-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HTlhIECXxEMM2nm7kGYA20OaN8ICnQcuFMk7ocd0HyDnajzWRJJb1kcs8SslP8Vg mF3WZGiQmK8OxqK8nreYTQ== 0000927356-99-001912.txt : 19991124 0000927356-99-001912.hdr.sgml : 19991124 ACCESSION NUMBER: 0000927356-99-001912 CONFORMED SUBMISSION TYPE: SC 13E4 PUBLIC DOCUMENT COUNT: 10 FILED AS OF DATE: 19991123 SUBJECT COMPANY: 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: SC 13E4 SEC ACT: SEC FILE NUMBER: 005-34894 FILM NUMBER: 99762828 BUSINESS ADDRESS: STREET 1: 400 W 48TH AVE CITY: DENVER STATE: CO ZIP: 80216 BUSINESS PHONE: 3032962121 FILED BY: 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: SC 13E4 BUSINESS ADDRESS: STREET 1: 400 W 48TH AVE CITY: DENVER STATE: CO ZIP: 80216 BUSINESS PHONE: 3032962121 SC 13E4 1 SCHEDULE 13E-4 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 Schedule 13E-4 ISSUER TENDER OFFER STATEMENT (Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934) VICORP Restaurants, Inc. (Name of the Issuer) VICORP Restaurants, Inc. (Name of Person Filing Statement) Common Stock, $.05 par value (Title of Class of Securities) 925817108 (CUSIP Number of Class of Securities) STANLEY ERECKSON, JR., ESQ. SENIOR VICE PRESIDENT AND GENERAL COUNSEL VICORP RESTAURANTS, INC. 400 WEST 48TH AVENUE DENVER, COLORADO 80216 (303) 296-2121 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person(s) Filing Statement) COPIES TO: REID A. GODBOLT, ESQ. NATHAN D. SIMMONS, ESQ. JONES & KELLER, P.C. WORLD TRADE CENTER 1625 BROADWAY, 16TH FLOOR DENVER, COLORADO 80202 (303) 573-1600 November 23, 1999 (Date Tender Offer First Published, Sent or Given to Security Holders) CALCULATION OF FILING FEE: Transaction valuation Amount of filing fee $38,000,000 (1) $7,600 (2) (1) For the purpose of calculating the filing fee only, this amount is based on the purchase 2,000,000 shares of common stock at the offer price of $19.00 per share. (2) The amount of the filing fee equals 1/50th of 1% of the value of the securities proposed to be acquired. [_] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: N/A Form or Registration No.: N/A Filing Party: N/A Date Filed: N/A ITEM 1. SECURITY AND ISSUER. (a) The name of the issuer is VICORP Restaurants, Inc. (the "Company"). The address of its principal executive office is 400 West 48th Avenue, Denver, Colorado 80216. (b) The securities being sought are up to 2,000,000 shares of the Company's common stock, $.05 par value (the "Shares") (or such lesser number of shares as are properly tendered), at a price of $19.00 per Share, net to the sellers in cash (the "Purchase Price"). As of November 22, 1999, 8,875,076 of the Shares were outstanding. In its Offer to Purchase, dated November 23, 1999 (the "Offer to Purchase"), the Company reserved the right to purchase more than 2,000,000 Shares, but has no current intention of doing so. The Offer to Purchase and the related Letter of Transmittal (which, as they may be amended from time to time, are collectively referred to herein as the "Offer") are attached hereto as Exhibits (a)(2) and (a)(3). Reference is hereby made to the Introduction of the Offer to Purchase, which Introduction is incorporated by reference into this Statement. The Offer is being made to all holders of Shares, including executive officers, directors and affiliates of the Company. The Company has not been advised whether any executive officers, directors or affiliates of the Company intend to tender any of their Shares pursuant to the Offer. Item 10 of the Offer to Purchase, which is hereby incorporated in this Statement by reference, sets forth the ownership of Shares by the Company's executive officers and directors as well as the ownership of persons known to own 5% or more of the Shares as of November 22, 1999. The Company does not anticipate that any of its executive officers, directors or affiliates will inform the Company if and when any decision to tender Shares pursuant to the Offer is made. The Company will not supplement or amend the Offer to Purchase if any of the executive officers, directors or affiliates actually tender Shares in the Offer. (c) Reference is hereby made to Section 7, "Price Range of Shares," of the Offer to Purchase, which Section is incorporated by reference herein. (d) Not applicable. ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a) Payments of cash to tendering shareholders, assuming there are tenders for the maximum 2,000,000 Shares, will equal $38.0 million. The Company anticipates using up to approximately $28.5 million of the proceeds from a recently completed sale and lease-back of 21 of its restaurant properties to fund part of the Offer. See "--Recent Developments" in the Offer to Purchase, incorporated in this Statement by reference. The remainder of the funds for the cash consideration to be paid in the Offer will be obtained from borrowings under the Company's existing Amended and Restated Credit Agreement, dated December 19, 1997, with Bank of America, N.A. (successor by merger to NationsBank of Texas, N.A.) as Agent and as a lender; and U.S. Bank National Association, as a lender (the "Credit Agreement"), along with any uninvested corporate cash which may be available. (b) The parties to the Credit Agreement are the Company, Bank of America, N.A., as Agent and as a lender, and U.S. Bank National Association, as a lender. Borrowings under the Credit Agreement by the Company will be unsecured. On December 19, 1997, the Company executed an amendment to the Credit Agreement which provides for an available credit limit of $40,000,000 in the aggregate with a sublimit of $10,000,000 on letters of credit. The maturity date of the Credit Agreement is February 28, 2001. Advances under the Credit Agreement bear interest at the higher of the Federal Funds rate plus 1/2 of 1% or the Agent's prime rate, or the Company may elect to borrow at the Eurodollar rate plus 1% to 1 5/8%. In addition, the Company is required to pay fees equal to 1/4 to 3/8 of 1% per annum on unused portions of the commitment, and 1% to 1 5/8% per annum on issued letters of credit. The unused commitment and letter of credit fees and the margin on Eurodollar borrowings are adjusted based on the Company's debt-to- capitalization ratio and fixed charge coverage ratio. The Company believes that it qualifies for minimum rates and fees provided in the Credit Agreement. Also, the Credit Agreement is attached as 1 Exhibit (b) and is incorporated in this Statement by reference and the above summary description of the Credit Agreement qualified by the actual language of the Credit Agreement. There is currently no unpaid debt under the Credit Agreement, although there were amounts outstanding prior to the most recently completed fiscal year. See "Capitalization," "Summary Financial Information," "Pro Forma Balance Sheet" and "Pro Forma Statement of Operations" in the Offer to Purchase, which are incorporated in this Statement by reference. The Company has no plans, nor has it made any arrangements, to finance or repay borrowings in connection with the Offer other than to comply with the terms of the Credit Agreement regarding payments of interest and principal. ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE. Reference is made to the Introduction and Section 2, "Purpose of the Offer; Certain Effects of the Offer," of the Offer, which Introduction and Section are incorporated by reference in this Statement. Under Colorado law, the Shares tendered and accepted by the Company, upon acquisition by the Company, will constitute authorized but unissued shares. Except as described below and except as described in the Offer to Purchase (which is incorporated herein by reference), there are no present plans or proposals which relate to or would result in: (a) The acquisition by any person of additional securities of the Company, or the disposition of any such securities by any such person; (b) Any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company; (c) A sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) Any change in the present board of directors or management of the Company, including, but not limited to, any plans or proposals to change the number or the term of directors, to fill any existing vacancy on the board or to change any material term of the employment contract of any executive officer. The Company, on October 4, 1999, announced the appointment of Joseph F. Trungale as President and elected him as a director (thus increasing the size of the board by one director) effective November 1, 1999. Mr. Trungale joined the Company in July 1997 as Regional Operating Partner for its Bakers Square, Chicago division. In September 1998, Mr. Trungale was named President of Bakers Square. Mr. Trungale has a food service career spanning over 30 years, holding various positions with Stouffer Foods Corporation, Mariott's, Big Boy, Long John Silver and What-A-Burger Restaurants; (e) Any material change in the present dividend rate or policy, or indebtedness or capitalization of the Company; (f) Any other material change in the Company's corporate structure or business; (g) Any changes in the Company's charter, by-laws or corresponding instruments or other actions which may impede the acquisition of control of the Company by any person; (h) Causing a class of equity security of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; 2 (i) A class of equity security of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or (j) The suspension of the Company's obligation to file reports pursuant to Section 15(d) of the Exchange Act. ITEM 4. INTEREST IN SECURITIES OF THE ISSUER. Neither the Company nor, to the best knowledge of the Company, any of its executive officers or directors or any other person, if any, controlling the Company, has engaged in any transactions involving the Shares during the 40 business days prior to the date hereof. ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO THE ISSUER'S SECURITIES. Neither the Company nor, to the best knowledge of the Company, any of its executive officers, directors or affiliates is a party to any contract, arrangement, understanding or relationship relating directly or indirectly to the Offer with respect to securities of the Company which would require disclosure under applicable rules and regulations of the Exchange Act. ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED. No person or class of persons has been employed, retained or is to be compensated by the Company to make solicitations or recommendations in connection with the Offer. The Company has retained D.F. King & Co., Inc. (the "Information Agent") to act as Information Agent and American Stock Transfer & Trust Company (the "Depositary") to act as Depositary in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, facsimile transmission, electronic mail and personal interviews and may request brokers, dealers and other nominee shareholders to forward materials relating to the Offer to beneficial owners. The Information Agent and the Depositary will each receive reasonable and customary compensation for their respective services, will be reimbursed for reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with their services, including certain liabilities under the federal securities laws. Neither the Information Agent nor the Depositary has been retained to make solicitations or recommendations in their respective roles as Information Agent and Depositary, and the fees to be paid to them will not be based on the number of Shares tendered pursuant to the Offer. ITEM 7. FINANCIAL INFORMATION. (a)-(b) Reference is made to "Capitalization," "Summary Financial Information" and "Pro Forma Financial Statements" in Section 9 of the Offer to Purchase, which information is incorporated in this Statement by reference. ITEM 8. ADDITIONAL INFORMATION. (a) To the best knowledge of the Company, there is no present or proposed contract, arrangement, understanding or relationship between the Company and any of its executive officers, directors or affiliates that is material to a decision by a shareholder whether to sell, tender or hold the Shares. (b) There is no regulatory requirement or approval that must be obtained in connection with the Offer. 3 (c) The information set forth in "Section 11. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act" in the Offer to Purchase is incorporated herein by reference. (d) There are no pending legal proceedings relating to the Offer. (e) Other than the information contained in the Offer to Purchase, which is incorporated in this Statement by reference, there is no additional material information which is necessary to make the above required statements, in light of the circumstances under which they are made, not materially misleading. ITEM 9. MATERIAL TO BE FILED AS EXHIBITS. (a)(1) Letter to Shareholders dated November 23, 1999. (a)(2) Offer to Purchase dated November 23, 1999. (a)(3) Form of Letter of Transmittal. (a)(4) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees (collectively, the "Brokers"). (a)(5) Form of letter from the Brokers to customers. (a)(6) Form of press release issued by the Company. (a)(7) Notice of Guaranteed Delivery. (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (b) U.S. $40,000,000 Amended and Restated Credit Agreement dated December 19, 1997, between VICORP Restaurants, Inc. and NationsBank of Texas, N.A. and U.S. Bank National Association, as amended. (c) None. (d) None. (e) Not applicable (f) None. 4 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. VICORP Restaurants, Inc. By:/s/ Charles R. Frederickson ----------------------------------------------- Charles R. Frederickson, Chairman of the Board and Chief Executive Officer Date: November 23, 1999 5 EXHIBIT INDEX EXHIBITS (a)(1) Letter to Shareholders dated November 23, 1999. (a)(2) Offer to Purchase dated November 23, 1999. (a)(3) Form of Letter of Transmittal. (a)(4) Form of letter to brokers, dealers, commercial banks, trust companies and other nominees (collectively, the "Brokers"). (a)(5) Form of letter from the Brokers to customers. (a)(6) Form of press release issued by the Company. (a)(7) Notice of Guaranteed Delivery. (a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (b) U.S. $40,000,000 Amended and Restated Credit Agreement dated December 19, 1997, between VICORP Restaurants, Inc. and NationsBank of Texas, N.A. and U.S. Bank National Association, as amended. 1 EX-99.A.1 2 LETTER TO SHAREHOLDERS EXHIBIT 99.A.1 [VICORP RESTAURANTS, INC. LETTERHEAD] Dear Shareholder: We are pleased to inform you that the Board of Directors of VICORP Restaurants, Inc. has unanimously authorized VICORP management to implement a tender offer for up to 2,000,000 shares of Common Stock for $19.00 in cash per share. The tender offer provides shareholders the opportunity to sell shares for cash without the usual transaction costs and, in the case of those holders who own less than 100 shares, without incurring any applicable odd lot discounts. The tender offer is not conditioned upon tender of a minimum number of shares; however, amounts tendered above 2,000,000 shares of Common Stock will be prorated, unless the Company elects to accept a greater number of shares. The tender offer will expire on 5:00 p.m. Eastern Standard Time, Wednesday, December 22, 1999 unless extended. The purpose of the tender offer is to provide an opportunity for additional liquidity to our shareholders. For several years, shareholders have expressed a desire for improved liquidity for their shares of Common Stock. The Board of Directors has determined that the Company's financial condition, outlook and current market condition, make it an appropriate time to repurchase up to 2,000,000 of the issued and outstanding shares. Shareholders who seek additional liquidity for their shares will have the opportunity to accept this offer. The enclosed Offer to Purchase provides important information about the Company and along with the accompanying Letter of Transmittal, contains the detailed terms of the tender offer. Please read and consider the information carefully. In order to tender your shares of Common Stock pursuant to the tender offer: . If you are the beneficial owner and the Shares are registered in your name, you must complete and sign the Letter of Transmittal and forward it, together with certificates representing the tendered shares to the Depositary at its address on the back cover page of the Offer to Purchase; . If you are the beneficial owner, but the shares are not registered in your name (because the registered holder is instead a securities brokerage firm, securities dealer, commercial bank, trust company or other nominee which holds the shares on your behalf) then you must instead promptly contact the registered holder of your shares to tender your shares in accordance with the instructions. Neither the Company nor its Board of Directors makes any recommendation to any shareholder as to whether to tender or refrain from tendering shares. Questions and requests for assistance or for additional copies of the Offer to Purchase should be directed to D.F. King & Co., Inc., the Company's information agent, at 800-758-5880. I trust you will give your careful consideration to the enclosed materials. Sincerely yours, /s/ Charles R. Frederickson Chairman of the Board EX-99.A.2 3 OFFERING CIRCULAR EXHIBIT 99.A.2 VICORP RESTAURANTS, INC. OFFER TO PURCHASE FOR CASH UP TO 2,000,000 OF ITS COMMON SHARES AT A PURCHASE PRICE OF $19.00 PER SHARE THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON WEDNESDAY, DECEMBER 22, 1999, UNLESS THE OFFER IS EXTENDED. VICORP Restaurants, Inc., a Colorado corporation (the "Company"), invites its shareholders to tender their shares of the Company's common stock, $.05 par value (the "Shares"), to the Company at $19.00 per Share, net to the seller in cash (the "Purchase Price"), as specified by tendering shareholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, accept for payment, and thereby purchase, up to 2,000,000 Shares validly tendered and not withdrawn. All Shares acquired in the Offer will be acquired at the Purchase Price. The Company reserves the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. In the event more than 2,000,000 Shares are validly tendered and not withdrawn, the Company will accept for payment, and thereby purchase, Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional Shares) upon the terms and subject to the conditions of the Offer. See Section 1. Shares not purchased because of proration will be returned at the Company's expense. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, NONE OF THE COMPANY, ITS BOARD OF DIRECTORS, THE INFORMATION AGENT OR THE DEPOSITARY MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES. SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER THEIR SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS NOT BEEN ADVISED WHETHER ANY OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES CONTROLLED BY SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10. The Shares are traded on Nasdaq National Market ("Nasdaq") under the symbol "VRES." On November 22, 1999, the last full trading day prior to commencement of the Offer, the closing sales price per Share as reported on Nasdaq was $17.44. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7. Questions and requests for assistance or for additional copies of this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed Delivery may be directed to the Information Agent at the address and telephone numbers set forth on the back cover of this Offer to Purchase. THE INFORMATION AGENT FOR THE OFFER IS: D.F. KING & CO., INC. (800) 758-5880 ---------------- IMPORTANT Any shareholder wishing to tender all or any part of his or her Shares should either (a) complete and sign a Letter of Transmittal (or a manually signed facsimile) in accordance with the instructions in the Letter of Transmittal and mail or deliver the Letter of Transmittal, together with any required signature guarantee, and any other required documents to American Stock Transfer & Trust Company (the "Depositary"), and either mail or deliver the certificates for the tendered Shares to the Depositary (together with any other documents required by the Letter of Transmittal) or tender the Shares pursuant to the procedure for book-entry transfer set forth in Section 3, or (b) request a broker, dealer, commercial bank, trust company or other nominee to effect the transaction. Holders of Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee should contact such person if they desire to tender their Shares. Any shareholder who desires to tender Shares and whose share certificates are not immediately available or cannot be delivered to the Depositary or who cannot comply with the procedure for book-entry transfer or whose other required documents cannot be delivered to the Depositary, in any case, by the expiration of the Offer must tender the Shares pursuant to the guaranteed delivery procedure set forth in Section 3. TO VALIDLY TENDER SHARES, SHAREHOLDERS MUST COMPLETE AND EXECUTE THE LETTER OF TRANSMITTAL. A2-2 TABLE OF CONTENTS
Page ---- SUMMARY................................................................... 4 FACTORS THAT MAY AFFECT FUTURE RESULTS.................................... 6 TO THE HOLDERS OF COMMON SHARES OF VICORP RESTAURANTS, INC................ 7 Introduction............................................................ 7 Recent Developments..................................................... 8 THE OFFER................................................................. 9 1.Number of Shares; Proration.......................................... 9 2.Purpose of the Offer; Certain Effects of the Offer................... 11 3.Procedures for Tendering Shares...................................... 12 4.Withdrawal Rights.................................................... 15 5.Purchase of Shares and Payment of Purchase Price..................... 16 6.Certain Conditions of the Offer...................................... 16 7.Price Range of Shares................................................ 18 8.Source and Amount of Funds........................................... 18 9.Certain Information Concerning the Company........................... 18 10. Interest of Directors and Officers and Principal Shareholders; Transactions and Arrangements Concerning Shares..................... 26 11.Effects of the Offer on the Market for Shares; Registration Under the Exchange Act........................................................... 28 12.Certain Legal Matters; Regulatory Approvals.......................... 29 13.Certain United States Federal Income Tax Consequences................ 29 14.Extension of the Offer; Termination; Amendment....................... 30 15.Fees and Expenses.................................................... 31 16.Miscellaneous........................................................ 32 FURTHER INFORMATION....................................................... 33
---------------- References in this Offer to Purchase to "the Company," "us" and "we" refer to VICORP Restaurants, Inc. A2-3 SUMMARY This general summary is provided for the convenience of the Company's shareholders and is qualified in its entirety by reference to the full text and more specific details of this Offer to Purchase and the related Letter of Transmittal. Number of Shares to be 2,000,000 Shares (or such lesser number of Shares Purchased as are validly tendered and not withdrawn). Purchase Price $19.00 per Share, net to the Seller in cash. All Shares acquired in the Offer will be acquired at the Purchase Price. Purpose of the Offer The purpose of the Offer to Purchase is to allow shareholders the opportunity to have added liquidity in their shares of Common Stock. The Board of Directors has determined that the Company's financial condition, outlook and current market conditions, make it an appropriate time to repurchase up to 2,000,000 of the issued and outstanding Shares. Management of the Company has received numerous comments from shareholders over the past several years voicing desires for added liquidity of the Common Stock, the Company's only trading security. Accordingly, the Company has determined to make the Offer to Purchase, which contemplates that up to 2,000,000 Shares will be purchased from existing shareholders. It is not possible to predict the impact that the Offer to Purchase will have on the trading price of the Common Stock. Conditions to the Offer The Offer is subject to certain conditions. See Section 6. Minimum Amount of Offer There is no minimum amount of Shares that must be tendered in the Offer. The Company also has the right in its sole discretion to terminate the Offer at any time before it is completed. How to Tender Shares See Section 3. Call the Information Agent at (800) 758-5880 or consult your broker for assistance. Brokerage Commissions Tendering shareholders who hold Shares in their own name and who tender their Shares directly to the Depositary will not be obligated to pay brokerage commissions. Shareholders holding Shares through brokers or banks are urged to consult the brokers or banks to determine whether transaction costs may be applicable if shareholders tender Shares through the brokers or banks and not directly to the Depositary. Stock Transfer Tax None, if payment is made to the registered holder. Expiration and Proration December 22, 1999 at 5:00 p.m. Eastern Standard Dates Time, unless extended by the Company. Payment Date As soon as practicable after the Expiration Date, as defined in Section 1. Position of the Company and its Board of Neither the Company nor its Board of Directors Directors makes any recommendation to any shareholder as to whether to tender or refrain from tendering Shares. A2-4 Withdrawal Rights Tendered Shares may be withdrawn at any time until 5:00 p.m., Eastern Standard Time on December 22, 1999 and, unless previously purchased, after 5:00 p.m., Eastern Standard Time on January 21, 2000. See Section 4. Proration In the event more than 2,000,000 Shares are validly tendered and not withdrawn, the Company will accept for payment, and thereby purchase Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional Shares). Odd Lots There will be no proration of Shares tendered by any shareholder who owns beneficially fewer than 100 Shares on November 23, 1999, and on the Expiration Date and who tenders all of the Shares prior to the Expiration Date and who checks the "Odd Lots" box in the Letter of Transmittal. See Section 1. Market Prices The Common Stock is traded on the Nasdaq National Market under the symbol VRES. On November 22, 1999 the last reported sales price for the Common Stock was $17.44. Depositary American Stock Transfer & Trust Company, 40 Wall Street, 46th Floor, New York, New York 10005, telephone (718) 921-8200. Information Agent D.F. King & Co., Inc., telephone (800) 758-5880 or (212) 269-5550 (collect). A2-5 FACTORS THAT MAY AFFECT FUTURE RESULTS Sections in this Offer to Purchase contain certain forward-looking statements based on management's current beliefs, estimates and assumptions concerning the operations, future results and prospects of the Company. All statements addressing operating performance, events or developments that management anticipates will occur in the future, including statements related to future revenue, profits, expenses, income and earnings per share or statements expressing general discussions about future events are forward- looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are subject to the safe harbors created in the Exchange Act. In addition, words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words, and similar expressions are intended to identify forward-looking statements. Because these statements are based on a number of beliefs, estimates and assumptions that could cause actual results to materially differ from those in the forward-looking statements, there is no assurance that forward-looking statements will prove to be accurate. Any number of factors could affect future operations and results, including the following: the Company's market price for its common stock could experience volatility; the Company's operating results may fluctuate significantly due to seasonality and other related factors; the restaurant industry is intensely competitive and the Company may not have the resources to compete adequately; changes in consumer preferences or discretionary consumer spending could negatively impact the Company's results; any failure of the Company to attract and retain highly qualified personnel to operate and manage its restaurants could adversely affect the Company; the Company must anticipate and react to food and labor costs; the Company is dependent upon key distributors, and disruptions in deliveries may adversely affect the Company's restaurants; the Company could be subject to adverse publicity, claims or lawsuits from its customers or employees or others; the Company is subject to extensive legal requirements applicable to franchise and other business operations; and the Company may fail to be year 2000 compliant. Forward-looking statements are subject to the safe harbors set forth in the Exchange Act. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. A2-6 TO THE HOLDERS OF COMMON SHARES OF VICORP RESTAURANTS, INC. Introduction VICORP Restaurants, Inc., a Colorado corporation (the "Company"), invites its shareholders to tender their shares of the Company's common stock, $.05 par value (the "Shares"), to the Company at $19.00 per Share, net to the seller in cash (the "Purchase Price"), as specified by tendering shareholders, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, accept for payment, and thereby purchase, up to 2,000,000 Shares validly tendered and not withdrawn. All Shares acquired in the Offer will be acquired at the Purchase Price. In the event more than 2,000,000 Shares are validly tendered and not withdrawn, the Company will accept for payment, and thereby purchase, Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional Shares) upon the terms and subject to the conditions of the Offer. See Section 1. Shares not purchased because of proration will be returned at the Company's expense to the shareholders who tendered the Shares. The Company reserves the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. See Section 14. The Offer is not conditioned on any minimum number of shares being tendered. The Offer is, however, subject to certain other conditions. See Section 6. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, NONE OF THE COMPANY, ITS BOARD OF DIRECTORS, THE INFORMATION AGENT OR THE DEPOSITARY MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES. SHAREHOLDERS MUST INDIVIDUALLY MAKE THE DECISION WHETHER TO TENDER THEIR SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS NOT BEEN ADVISED WHETHER ANY OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES CONTROLLED BY SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10. Upon the terms and subject to the conditions of the Offer, if at the Expiration Date more than 2,000,000 Shares (or such greater number of Shares as the Company may elect to purchase) are validly tendered and not withdrawn, the Company will accept Shares first from all Odd Lot Holders (as defined in Section 1) who validly tender, and not withdraw, all their Shares and then on a pro rata basis from all other shareholders who validly tender, and not withdraw, Shares. See Section 1. The Purchase Price will be paid net to the tendering shareholder in cash for all Shares purchased. Tendering shareholders who hold Shares in their own name and who tender their Shares directly to the Depositary will not be obligated to pay brokerage commissions, solicitation fees or, subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Company pursuant to the Offer. Shareholders holding Shares registered in the name of brokers or banks are urged to consult the brokers or banks to determine whether transaction costs are applicable if shareholders tender Shares through the brokers or banks and not directly to the Depositary. Any tendering shareholder or other payee who fails to complete, sign and return to the Depositary the substitute Form W-9 included as part of the Letter of Transmittal may be subject to required United States federal income tax back-up withholding of 31% of the gross proceeds payable to the tendering shareholder or other payee pursuant to the Offer. See Section 3. The Company will pay all fees and expenses of D.F. King & Co., Inc. (the "Information Agent") and American Stock Transfer & Trust Company (the "Depositary") incurred in connection with the Offer. See Section 15. A2-7 In the view of the Board of Directors, the Offer presents an opportunity to provide shareholders with additional liquidity. The Board of Directors has determined that the Company's financial condition, outlook and current market conditions, make it an appropriate time to repurchase up to 2,000,000 of the issued and outstanding Shares. The Offer provides shareholders who are considering a sale of all or a portion of their Shares with the opportunity, subject to the terms and conditions of the Offer, to sell those Shares for cash, where Shares are tendered by the registered owner directly to the Depositary, without the usual transaction costs associated with open market sales. In addition, the Offer may give shareholders the opportunity to sell at prices greater than market prices prevailing prior to the announcement of the Offer. The Offer also allows shareholders to sell a portion of their Shares while retaining a continuing equity interest in the Company. Shareholders who determine not to accept the Offer will realize a proportionate increase in their relative equity interest in the Company, and thus in the Company's future earnings and assets (subject to the Company's right to issue additional Shares and other equity securities in the future). In determining whether to tender Shares pursuant to the Offer, shareholders should consider the possibility that they may be able to sell their Shares in the future on Nasdaq or otherwise at a net price higher than the Purchase Price. Shareholders should also consider the possibility that, following completion of the Offer, they may not be able to sell their Shares in the future on Nasdaq or otherwise at a net price as high as the Purchase Price. See Sections 2 and 11. As of the close of business on November 22, 1999, the Company had 8,875,076 issued and outstanding Shares and 414,667 Shares reserved for issuance upon the exercise of options to purchase Shares granted under the Company's stock option plans (collectively, the "Plans"). Of these reserved Shares, 255,998 options have been granted and are exercisable below $19.00 per Share. See Section 10. The Company is not, in connection with the Offer, offering to cancel for cash any Options outstanding under the Plans and tenders of Options will not be accepted. See Section 3. The 2,000,000 Shares that the Company is offering to purchase pursuant to the Offer represent approximately 22.5% of the Shares outstanding on November 22, 1999 (approximately 21.9% assuming exercise of outstanding exercisable Options). The Shares are listed and traded on Nasdaq under the symbol "VRES." On November 22, 1999, the last full trading day prior to the announcement of the Offer, the closing sales price per Share as reported on Nasdaq was $17.44. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. See Section 7. Recent Developments In October 1999, the Company completed the sale and lease-back of 21 of its restaurant properties (the "Sale and Lease-Back Transaction"). The Company leased from the buyers all the restaurant properties that were sold. Net proceeds to the Company from the Sale and Lease-Back Transaction were approximately $28.5 million. With these funds, as well as borrowings under the Company's existing bank credit agreement and any cash available for such purposes, the Company expects to have the available capital in order to conclude the Offer to Purchase. See "Capitalization," "Summary Financial Information" and "Pro Forma Financial Statements" in this Offer to Purchase for further information. The Company's fiscal year ended October 31, 1999. The Company expects that the audit of the 1999 fiscal year results will be completed by the second week of December 1999. The Company presently estimates that the operating earnings per share for the fiscal year, before giving effect to tax benefits associated with the Sale and Lease-Back Transaction (see "Section 9. Certain Information Concerning the Company -- Pro Forma Financial Statements"), will be in the range of $1.30 to $1.35. In addition to the fiscal 1999 operating earnings, the Company also expects that its fiscal year 1999 results will include a non- recurring reduction in income tax expense of approximately $5.8 million or $.65 per share, to adjust the valuation allowance previously provided against deferred income tax assets. A2-8 THE OFFER 1. Number of Shares; Proration. Upon the terms and subject to the conditions of the Offer, the Company will purchase 2,000,000 Shares or such lesser number of Shares as are validly tendered and not withdrawn prior to the Expiration Date (as defined below) at a price of $19.00 per Share, net to the seller in cash. The term "Expiration Date" means 5:00 p.m., Eastern Standard Time, on Wednesday, December 22, 1999, unless and until the Company, in its sole discretion, shall have extended the period of time during which the Offer will remain open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Company, shall expire. See Section 14 for a description of the Company's right to extend, delay, terminate or amend the Offer. The Company reserves the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. In accordance with applicable regulations of the Securities and Exchange Commission (the "Commission"), the Company may purchase, pursuant to the Offer, an additional amount of Shares not to exceed 2.0% of the outstanding Shares without amending or extending the Offer. See Section 14. In the event of an over-subscription of the Offer, Shares tendered prior to the Expiration Date (other than Odd Lots) will be subject to proration, as described below. The proration period also expires on the Expiration Date. If: -- the Company changes the Purchase Price from $19.00 per Share; -- the Company increases the number of Shares being sought in the Offer and such increase in the number of Shares being sought exceeds 2.0% of the outstanding Shares; or -- the Company decreases the number of Shares being sought; And -- the Offer is scheduled to expire at any time earlier than the expiration of the period ending on the tenth business day from, and including, the date that notice of such increase or decrease is first published, sent or given in the manner specified in Section 14, then the Offer will be extended until the expiration of such period of 10 business days. THE OFFER IS NOT CONDITIONED ON THE TENDER OF ANY MINIMUM NUMBER OF SHARES. HOWEVER, THE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE SECTION 6. If the number of Shares validly tendered and not withdrawn prior to the Expiration Date is less than or equal to 2,000,000 Shares (or such greater number of Shares as the Company may elect to purchase pursuant to the Offer), the Company will, upon the terms and subject to the conditions of the Offer, accept for payment and thereby purchase, all Shares so tendered at the Purchase Price. All Shares tendered and not purchased pursuant to the Offer, including Shares not purchased because of proration, will be returned to the tendering shareholders at the Company's expense as promptly as practicable following the Expiration Date. The Company reserves the right, in its sole discretion to purchase more than 2,000,000 Shares pursuant to the Offer. See Section 14. Priority of Purchases. Upon the terms and subject to the conditions of the Offer, if more than 2,000,000 Shares (or such greater number of Shares as the Company may elect to purchase) have been validly tendered and not withdrawn prior to the Expiration Date, the Company will accept for payment and therefore purchase validly tendered Shares on the basis set forth below: (a) first, all Shares validly tendered and not withdrawn prior to the Expiration Date by any Odd Lot Holder (as defined below) who: A2-9 (1) tenders all Shares owned beneficially or of record by such Odd Lot Holder (tenders of less than all the Shares owned by such Odd Lot Holder will not qualify for this preference); and (2) completes the section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery; and (b) second, after the purchase of all of the foregoing Shares, all other Shares validly tendered, and not withdrawn, prior to the Expiration Date, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional Shares), as described below. Odd Lots. For purposes of the Offer, the term "Odd Lots" means all Shares validly tendered prior to the Expiration Date and not withdrawn by any person (an "Odd Lot Holder") who owned beneficially or of record as of the close of business on November 23, 1999, and who continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and so certified in the appropriate place on the Letter of Transmittal and, if applicable, on the Notice of Guaranteed Delivery. In order to qualify for this preference, an Odd Lot Holder must tender all Shares owned by the Odd Lot Holder in accordance with the procedures described in Section 3. As set forth above, Odd Lots will be accepted for payment before proration, if any, of the purchase of other tendered Shares. This preference is not available to partial tenders by an Odd Lot Holder or to beneficial or record holders of an aggregate of 100 or more Shares, even if these holders have separate accounts or certificates representing fewer than 100 Shares. By accepting the Offer, an Odd Lot Holder who holds Shares in its name and tenders its Shares directly to the Depositary would not only avoid the payment of brokerage commissions, but also would avoid any applicable odd lot discount in a sale of the holder's Shares. Any Odd Lot Holder wishing to tender all of such holder's Shares pursuant to the Offer should complete the section entitled "Odd Lots" in the Letter of Transmittal and, if applicable, in the Notice of Guaranteed Delivery. The Company also reserves the right, but will not be obligated, to purchase all Shares duly tendered by any shareholder who tenders all Shares beneficially owned and who, as a result of proration, would then beneficially own an aggregate of fewer than 100 Shares. If the Company exercises this right, it will increase the number of Shares that it is offering to purchase in the Offer by the number of Shares purchased through the exercise of such right. Proration. In the event that proration of tendered Shares is required, the Company will determine the proration factor as soon as practicable following the Expiration Date. Proration for each shareholder tendering Shares, other than Odd Lot Holders, will be based on the ratio of the number of Shares validly tendered and not properly withdrawn by such shareholder to the total number of Shares validly tendered and not properly withdrawn by all shareholders, other than Odd Lot Holders. Because of the difficulty in determining the number of Shares validly tendered (including Shares tendered by guaranteed delivery procedures, as described in Section 3) and not properly withdrawn, and because of the Odd Lot procedure, the Company does not expect that it will be able to announce the final proration factor or commence payment for any Shares purchased pursuant to the Offer until approximately five business days after the Expiration Date. The preliminary results of any proration will be announced by press release as promptly as practicable after the Expiration Date. Shareholders may obtain preliminary proration information from the Information Agent and may be able to obtain such information from their brokers. As described in Section 13, the number of Shares that the Company will purchase from a shareholder pursuant to the Offer may affect the United States federal income tax consequences to the shareholder and, therefore, may be relevant to a shareholder's decision whether or not to tender Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to shareholders who were record holders of Shares as of November 23, 1999, and will be furnished to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the Company's shareholder list or, if applicable, who are listed as participants in a clearing agency's security position listing for subsequent transmittal to beneficial owners of Shares. A2-10 2. Purpose of the Offer; Certain Effects of the Offer. The purpose of the Offer is to allow shareholders to have an opportunity to obtain added liquidity for their shares of Common Stock. As indicated above in "Recent Developments," the Company completed a sale lease-back transaction relating to 21 of its restaurant properties which resulted in net proceeds of $28.5 million. Proceeds from this transaction, as well as borrowings from the Company's existing bank credit facility and any cash available from future earnings and operating cash flow, are estimated to be sufficient to fund the Company's cash payments under the Offer. See Section 8. The Company has determined that shareholders, as a group, should be given the opportunity to obtain additional liquidity for their shares. Management has observed that the Company's level of trading and a liquid market for the Common Stock is relatively low due to the fact that stock market interest in small capitalization corporations and the restaurant industry as a whole has declined over the past few years. The Company is one of numerous companies that are traded on Nasdaq in which trading volume is not significant and does not receive significant coverage or following from securities analysts and other brokerage professionals. Management has received ongoing comments from shareholders over the past several years voicing a desire to add liquidity because of the low level of trading in the Common Stock. As a result of the Offer, the Company should be in a position to address shareholder desires about liquidity that have been voiced for several years. The Company believes that by offering shareholders the opportunity to receive $19.00 in cash in exchange per share of Common Stock, shareholders will have the opportunity for added liquidity of their shares. The Offer provides shareholders who are considering a sale of all or a portion of their Shares with the opportunity, subject to the terms and conditions of the Offer, to sell the Shares for cash, where Shares are tendered by the registered owner directly to the Depositary, without the usual transaction costs associated with open market sales. In addition, Odd Lot Holders who hold Shares in their names and tender their Shares directly to the Depositary and whose Shares are purchased pursuant to the Offer not only will avoid the payment of brokerage commissions, but also will avoid any applicable odd lot discount which may be payable on a sale of their Shares in a transaction on Nasdaq. The Offer also allows shareholders to sell a portion of their Shares while retaining a continuing equity interest in the Company. Shareholders who determine not to accept the Offer will realize a proportionate increase in their relative equity interest in the Company, and thus in the Company's future earnings and assets, subject to the Company's right to issue additional Shares and other equity securities in the future. Shareholders may be able to sell non-tendered Shares in the future on Nasdaq or otherwise at a net price higher than the Purchase Price. The Company can give no assurance, however, as to the price at which a shareholder may be able to sell Shares in the future. Shareholders should also consider the possibility that, following completion of the Offer, they may not be able to sell their Shares in the future on Nasdaq or otherwise at a net price as high as the Purchase Price. See Section 11. The Board of Directors has determined that the Company's financial condition, outlook and current market conditions, including the recent trading prices of the Shares, make it an appropriate time to repurchase outstanding Shares. In the view of the Board of Directors, the Offer represents an investment that should benefit the Company and its shareholders over the long term by reducing the number of outstanding shares and by increasing shareholder value by making cash payments to shareholders who tender outstanding shares. THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER. HOWEVER, NONE OF THE COMPANY, ITS BOARD OF DIRECTORS, THE INFORMATION AGENT OR THE DEPOSITARY MAKES ANY RECOMMENDATION TO SHAREHOLDERS AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR SHARES AND NONE HAS AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT WITH THEIR OWN INVESTMENT AND A2-11 TAX ADVISORS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER. THE COMPANY HAS NOT BEEN ADVISED WHETHER ANY OF ITS DIRECTORS, EXECUTIVE OFFICERS OR AFFILIATES CONTROLLED BY SUCH PERSONS INTEND TO TENDER SHARES PURSUANT TO THE OFFER. SEE SECTION 10. The Company may in the future purchase additional Shares in the open market, in private transactions, through tender offers or otherwise, subject to the approval of the Board of Directors. In particular, the Company may repurchase Shares in the open market beginning after the expiration of the period of ten business days after the Expiration Date. Future purchases by the Company may be on the same terms or on terms that are more or less favorable to shareholders than the terms of the Offer. Rule 13e-4 under the Exchange Act prohibits the Company and its affiliates from purchasing any Shares, other than pursuant to the Offer, until at least ten business days after the Expiration Date. Any possible future purchases by the Company will depend on many factors, including the market price of the Shares, the results of the Offer, the Company's business and financial position and general economic and market conditions. Shares the Company acquires pursuant to the Offer will be considered authorized but unissued shares and will be available for the Company to issue without further shareholder action (except as required by applicable law or the rules applicable to companies with shares traded on Nasdaq or any other securities exchange on which the Shares may be listed) for business purposes including, but not limited to the raising of additional capital for use in the Company's business. The Company has no current plans for the issuance of Shares repurchased pursuant to the Offer. 3. Procedures for Tendering Shares. Valid Tender of Shares. For Shares to be validly tendered pursuant to the Offer (a) the certificates for the Shares (or confirmation of receipt of the Shares pursuant to the procedure for book-entry transfer set forth below), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile), including any required signature guarantees, and any other documents required by the Letter of Transmittal, must be received prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date by the Depositary at its address set forth on the back cover of this Offer to Purchase, or (b) the tendering shareholder must comply with the guaranteed delivery procedure set forth below. ODD LOT HOLDERS WHO TENDER ALL SHARES MUST COMPLETE THE SECTION CAPTIONED "ODD LOTS" IN THE LETTER OF TRANSMITTAL AND, IF APPLICABLE, IN THE NOTICE OF GUARANTEED DELIVERY, TO QUALIFY FOR THE PREFERENTIAL TREATMENT AVAILABLE TO ODD LOT HOLDERS AS SET FORTH IN SECTION 1. SHAREHOLDERS WHO HOLD SHARES THROUGH BROKERS OR BANKS ARE URGED TO CONSULT THE BROKERS OR BANKS TO DETERMINE WHETHER TRANSACTION COSTS ARE APPLICABLE IF SHAREHOLDERS TENDER SHARES THROUGH THE BROKERS OR BANKS AND NOT DIRECTLY TO THE DEPOSITARY. Signature Guarantees and Method of Delivery. No signature guarantee is required if: (i) the Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes of this Section 3, shall include any participant in The Depository Trust Company (the "Book-Entry Transfer Facility") whose name appears on a security position listing as the owner of the Shares) tendered therewith and such holder has not completed the box entitled "Special Payment Instructions" on the Letter of Transmittal; or (ii) the Shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Exchange Act (each of the foregoing constituting an "Eligible Institution"). See Instruction 1 of the Letter of Transmittal. If a certificate for Shares is registered in the name of a person other than the person executing a Letter of Transmittal, or if payment is to be made, or Shares not purchased or tendered are to be issued to a person other than the registered holder, then the certificate must be endorsed or accompanied by an appropriate stock power, in either case, signed exactly as the name of the registered holder appears on the certificate, with the signature guaranteed by an Eligible Institution. A2-12 In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of certificates for the Shares (or a timely confirmation of the book-entry transfer of the Shares into the Depositary's account at the Book-Entry Transfer Facility as described above), a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile) and any other documents required by the Letter of Transmittal. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. Book-Entry Delivery. The Depositary will establish an account with respect to the Shares for purposes of the Offer at the Book-Entry Transfer Facility within two business days after the date of this Offer to Purchase, and any financial institution that is a participant in the Book-Entry Transfer Facility's system may make book-entry delivery of the Shares by causing the Book-Entry Transfer Facility to transfer Shares into the Depositary's account in accordance with the Book-Entry Transfer Facility's procedures for transfer. Although delivery of Shares may be effected through a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility, either (i) a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile) with any required signature guarantees and any other required documents must, in any case, be transmitted to and received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Expiration Date, or (ii) the guaranteed delivery procedure described below must be followed. DELIVERY OF THE LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. United States Federal Income Tax Backup Withholding. Under the United States federal income tax backup withholding rules, unless an exemption applies under the applicable law and regulations, 31% of the gross proceeds payable to a shareholder or other payee pursuant to the Offer must be withheld and remitted to the United States Internal Revenue Service (the "IRS"), unless the shareholder or other payee provides its taxpayer identification number (employer identification number or social security number) to the Depositary (as payor) and certifies under penalties of perjury that such number is correct. Therefore, each tendering shareholder should complete and sign the Substitute Form W-9 included as part of the Letter of Transmittal so as to provide the information and certification necessary to avoid backup withholding. If the Depositary is not provided with the correct taxpayer identification number, the United States Holder (as defined in Section 13) also may be subject to a penalty imposed by the IRS. If withholding results in an overpayment of taxes, a refund may be obtained. Certain "exempt recipients" (including, among others, all corporations and certain Non-United States Holders (as defined in Section 13)) are not subject to these backup withholding and information reporting requirements. In order for a Non-United States Holder to qualify as an exempt recipient, that shareholder must submit an IRS Form W-8 or a Substitute Form W-8, signed under penalties of perjury, attesting to that shareholder's exempt status. Such statements can be obtained from the Depositary. See Instruction 12 of the Letter of Transmittal. Withholding for Non-United States Holders. Even if a Non-United States Holder has provided the required certification to avoid backup withholding, the Depositary will withhold United States federal income taxes equal to 30% of the gross payments payable to a Non-United States Holder or such Holder's agent unless the Depositary determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because the gross proceeds are effectively connected with the conduct of a trade or business within the United States. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-United States Holder must deliver to the Depositary before the payment a properly completed and executed IRS Form 1001. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a Non-United States Holder must deliver to the Depositary a properly completed and executed IRS Form 4224. The Depositary will determine a shareholder's status as a Non-United States Holder and eligibility for a reduced A2-13 rate of, or exemption from, withholding by reference to any outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate that such reliance is not warranted. A Non-United States Holder may be eligible to obtain a refund of all or a portion of any tax withheld if such Non-United States Holder meets those tests described in Section 13 that would characterize the exchange as a sale (as opposed to a dividend) or is otherwise able to establish that no tax or a reduced amount of tax is due. NON-UNITED STATES HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND PROCEDURE. Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to the Offer and the shareholder's Share certificates are not immediately available or cannot be delivered to the Depositary prior to the Expiration Date (or the procedure for book-entry transfer cannot be completed on a timely basis) or if time will not permit all required documents to reach the Depositary prior to the Expiration Date, the Shares may nevertheless be tendered, provided that all of the following conditions are satisfied: (a) the tender is made by or through an Eligible Institution; (b) the Depositary receives by hand, mail, overnight courier, telegram or facsimile transmission, on or prior to the Expiration Date, a properly completed and duly executed Notice of Guaranteed Delivery in the form the Company has provided with this Offer to Purchase, including (where required) a signature guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery; and (c) the certificates for all tendered Shares, in proper form for transfer (or confirmation of book-entry transfer of the Shares into the Depositary's account at the Book-Entry Transfer Facility), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile) and any required signature guarantees or other documents required by the Letter of Transmittal, are received by the Depositary within three Nasdaq trading days after the date of receipt by the Depositary of the Notice of Guaranteed Delivery. Return of Tendered Shares. If any tendered Shares are not purchased, or if less than all Shares evidenced by a shareholder's certificates are tendered, certificates for unpurchased Shares will be returned as promptly as practicable after the expiration or termination of the Offer or, in the case of Shares tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares will be credited to the appropriate account maintained by the tendering shareholder at the Book-Entry Transfer Facility, in each case without expense to the shareholder. Company Option Plans. The Company is not offering, as part of the Offer, to cancel for cash any Options outstanding under the Company's Option Plans, and tenders of Options will not be accepted. Holders of Options who wish to participate in the Offer must exercise their Options and purchase Shares subject to the Option and then tender the Shares pursuant to the Offer; provided that, any exercise of an Option and tender of Shares is in accordance with the terms of the Option Plans and the Options and is in compliance with all applicable federal and state securities laws. In no event are any Options to be delivered to the Depositary in connection with a tender of Shares. An exercise of an Option cannot be revoked even if Shares received upon the exercise and tendered in the Offer are not purchased in the Offer for any reason. Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. Questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Company in its reasonable judgment, and its determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders of any Shares that it determines are not in proper form or the acceptance for payment of or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender with respect to any particular Shares or A2-14 any particular shareholder. The Company's interpretation of the terms of the Offer will be final and binding on all parties. No tender of Shares will be deemed to have been properly made until all defects or irregularities have been cured by the tendering shareholder or waived by the Company. None of the Company, the Information Agent, the Depositary or any other person shall be obligated to give notice of any defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any notice. Tendering Shareholder's Representation and Warranty; Company's Acceptance Constitutes an Agreement. A tender of Shares pursuant to any of the procedures described above will constitute the tendering shareholder's acceptance of the terms and conditions of the Offer, as well as the tendering shareholder's representation and warranty to the Company that, among other things, (a) the shareholder has a "net long position" (as defined in Rule 14e-4 promulgated by the Commission under the Exchange Act) in the Shares or equivalent securities at least equal to the Shares tendered within the meaning of Rule 14e-4 and (b) the tender of Shares complies with Rule 14e-4. It is a violation of Rule 14e-4 for a person, directly or indirectly, to tender Shares for that person's own account unless, at the time of tender and at the end of the proration period or period during which Shares are accepted by lot (including any extensions), the person so tendering both (i) has a net long position equal to or greater than the amount of (x) Shares tendered or (y) other securities immediately convertible into or exchangeable or exercisable for the Shares tendered and will acquire the Shares for tender by conversion, exchange or exercise and (ii) will deliver or cause to be delivered the Shares in accordance with the terms of the Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person. The Company's acceptance for payment of Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering shareholder and the Company upon the terms and conditions of the Offer. CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED LETTER OF TRANSMITTAL AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO THE COMPANY. ANY SUCH DOCUMENTS DELIVERED TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT BE DEEMED TO BE VALIDLY TENDERED. 4. Withdrawal Rights. Except as otherwise provided in this Section 4, tenders of Shares pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Company pursuant to the Offer, may also be withdrawn at any time after 5:00 p.m., Eastern Standard Time, on January 21, 2000. For a withdrawal to be effective, a notice of withdrawal must be in written form and transmitted by mail, overnight courier, hand delivery, telegraph, telex or facsimile and must be received in a timely manner by the Depositary at the address set forth on the back cover of this Offer to Purchase. Any notice of withdrawal must specify the name of the tendering shareholder, the number of Shares to be withdrawn and the name of the registered holder of the Shares. If the certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering shareholder must also submit the serial numbers shown on the particular certificates for Shares to be withdrawn and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (except in the case of Shares tendered for the account of an Eligible Institution). If Shares have been tendered pursuant to the procedure for book-entry delivery set forth in Section 3, the notice of withdrawal also must specify the name and the number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and must otherwise comply with the Book-Entry Transfer Facility's procedures. All questions as to the form and validity (including the time of receipt) of any notice of withdrawal will be determined by the Company, in its sole discretion, which determination will be final and binding. None of the Company, the Information Agent, the Depositary or any other person shall be obligated to give notice of any defects or irregularities in any notice of withdrawal, nor shall any of them incur liability for failure to give any notice. Withdrawals may not be rescinded and any Shares properly withdrawn will thereafter be deemed not validly tendered for purposes of the Offer unless the withdrawn Shares are validly retendered prior to the Expiration Date by following one of the procedures described in Section 3. A2-15 If the Company extends the Offer, is delayed in its purchase of Shares or is unable to purchase Shares pursuant to the Offer for any reason, then, without prejudice to the Company's rights under the Offer, the Depositary may, subject to applicable law, retain tendered Shares on behalf of the Company, and the Shares may not be withdrawn except to the extent tendering shareholders are entitled to withdrawal rights as described in this Section 4. 5. Purchase of Shares and Payment of Purchase Price. Upon the terms and subject to the conditions of the Offer, as promptly as practicable following the Expiration Date, the Company will accept for payment and thereby purchase Shares validly tendered, and not withdrawn, prior to the Expiration Date at the Purchase Price. For purposes of the Offer, the Company will be deemed to have accepted for payment, and therefore purchased, Shares that are validly tendered and not withdrawn (subject to the proration provisions of the Offer) only when and if it gives written notice to the Depositary of its acceptance of the Shares for payment pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, promptly following the Expiration Date the Company will accept for payment and pay the Purchase Price per Share for 2,000,000 Shares (subject to increase or decrease as provided in Section 14) validly tendered, or such lesser number of Shares as are validly tendered and not withdrawn as permitted in Section 4. The Company will pay for Shares purchased pursuant to the Offer by depositing the aggregate Purchase Price therefor with the Depositary, which will act as agent for tendering shareholders for the purpose of receiving payment from the Company and transmitting payment to the tendering shareholders. In the event of proration, the Company will determine the proration factor and pay for those tendered Shares accepted for payment as soon as practicable after the Expiration Date; however, the Company does not expect to be able to announce the final results of any proration and commence payment for Shares purchased until approximately five business days after the Expiration Date. Certificates for all Shares tendered and not purchased due to proration, will be returned (or, in the case of Shares tendered by book-entry transfer, will be credited to the account maintained with the Book-Entry Transfer Facility by the participant therein who so delivered the Shares) to the tendering shareholder at the Company's expense as promptly as practicable after the Expiration Date or termination of the Offer without expense to the tendering shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE BE PAID BY THE COMPANY BY REASON OF ANY DELAY IN MAKING PAYMENT. In addition, if certain events occur, the Company may not be obligated to purchase Shares pursuant to the Offer. See Section 6. The Company will pay all stock transfer taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, payment of the Purchase Price is to be made to, or (in the circumstances permitted by the Offer) if unpurchased Shares are to be registered in the name of, any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to the person will be deducted from the Purchase Price unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. See Instruction 6 of the Letter of Transmittal. 6. Certain Conditions of the Offer. Notwithstanding any other provision of the Offer, the Company will not be required to accept for payment, purchase or pay for any Shares tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of, or the purchase of and the payment for Shares tendered, subject to Rule 13e-4(f) under the Exchange Act, at any time on or after November 23, 1999, and prior to the Expiration Date in its sole discretion, including under circumstances in which any of the following events shall have occurred (or shall have been determined by the Company to have occurred) that, in the Company's reasonable judgment and regardless of the circumstances giving rise thereto (including any action or omission to act by the Company), makes it inadvisable to proceed with the Offer or with acceptance for payment: A2-16 (a) there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly (i) challenges the making of the Offer, the acquisition of some or all of the Shares pursuant to the Offer or otherwise relates in any manner to the Offer, or (ii) in the Company's reasonable judgment, could materially and adversely affect the business, condition (financial or otherwise), income, operations or prospects of the Company, or otherwise materially impair in any way the contemplated future conduct of the business of the Company or materially impair the contemplated benefits of the Offer to the Company; (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or the Company, by any court or any authority, agency or tribunal that, in the Company's reasonable judgment, would or might directly or indirectly (i) make the acceptance for payment of, or payment for, some or all of the Shares illegal or otherwise restrict or prohibit consummation of the Offer, (ii) delay or restrict the ability of the Company, or render the Company unable, to accept for payment or pay for some or all of the Shares, (iii) materially impair the contemplated benefits of the Offer to the Company, (iv) materially and adversely affect the business, condition (financial or other), income, operations or prospects of the Company, or otherwise materially impair in any way the contemplated future conduct of the business of the Company, or (v) make it likely that the Shares would be delisted from trading on Nasdaq following the Offer; (c) there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (iv) any limitation (whether or not mandatory) by any governmental, regulatory or administrative agency or authority on, or any event that, in the Company's reasonable judgment, might affect, the extension of credit by banks or other lending institutions in the United States, (v) any significant decrease in the market price of the Shares or any change in the general political, market, economic or financial conditions in the United States or abroad that could, in the reasonable judgment of the Company, have a material adverse effect on the Company's business, operations or prospects or the trading in the Shares, (vi) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof, or (vii) any decline in either the Dow Jones Industrial Average or the Standard and Poor's Index of 500 Industrial Companies by an amount in excess of 10% measured from the close of business on November 23, 1999; (d) a tender or exchange offer for any or all of the Shares (other than the Offer), or any merger, business combination or other similar transaction with or involving the Company, shall have been proposed, announced or made by any person; (e) (i) any entity, person or "group" (as that term is used in Section 13(d)(3) of the Exchange Act) shall have acquired or proposed to acquire beneficial ownership of more than 5% of the outstanding Shares (other than any such person, entity or group who has filed a Schedule 13D or Schedule 13G with the Commission on or before November 23, 1999), (ii) any such entity, group or person who has filed a Schedule 13D or Schedule 13G with the Commission on or before the Expiration Date shall have acquired or proposed to acquire beneficial ownership of an additional 2.0% or more of the outstanding Shares, or (iii) any person, entity or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or made a public announcement reflecting an intent to acquire the Company or any of its assets or securities other than in connection with a transaction authorized by the Board of Directors; or A2-17 (f) any change or changes shall have occurred in the business, financial condition, assets, income, operations, prospects or stock ownership of the Company that, in the Company's reasonable judgment, is or may have a material adverse effect on the Company. The foregoing conditions are for the sole benefit of the Company and may be asserted by the Company regardless of the circumstances (including any action or omission by the Company) giving rise to any such condition, and may be waived by the Company, in whole or in part, at any time and from time to time in its reasonable judgment. The Company's failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any right and each right will be deemed an ongoing right which may be asserted at any time and from time to time. Any determination by the Company concerning the events described above will be final and binding. 7. Price Range of Shares. The Shares are traded on the Nasdaq National Market under the symbol "VRES." The following tables set forth for the periods indicated the high and low bid prices for the Shares as reported by Nasdaq. This information is based upon closing bid prices as reported by the Nasdaq National Market and the quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission, and may not represent actual transactions.
Fiscal Quarter --------------------------- First Second Third Fourth Fiscal Year ------ ------ ------ ------ 2000 (through November 22, 1999) High............................................. $17.69 -- -- -- Low.............................................. 16.38 -- -- -- 1999 (ended October 31, 1999) High............................................. $16.00 $16.75 $18.31 $18.38 Low.............................................. 13.38 14.38 15.19 15.69 1998 (ended November 1, 1998) High............................................. $17.50 $19.25 $16.75 $15.63 Low.............................................. 15.38 15.50 14.50 13.00
On November 22, 1999, there were approximately 420 holders of record of the Shares. On November 22, 1999, the last full trading day prior to the announcement of the Offer, the closing per Share sales price as reported on Nasdaq was $17.44. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES. 8. Source and Amount of Funds. Assuming the Company purchases 2,000,000 Shares pursuant to the Offer at the Purchase Price, the Company expects the maximum aggregate cost, including all fees and expenses applicable to the Offer, to be approximately $38.4 million. The Company expects to fund the purchase of Shares pursuant to the Offer and the payment of related fees and expenses from available cash, short-term investments, cash equivalents and from borrowings under its existing line of credit. See " To Holders of Common Shares of VICORP Restaurants, Inc.-- Recent Events" for a description of the Sale and Lease-Back Transaction in October 1999 in which the Company received gross proceeds of $29.0 million. 9. Certain Information Concerning the Company. VICORP Restaurants, Inc. operates family style restaurants under the names "Bakers Square" and "Village Inn" and franchises restaurants under the Village Inn name. As of November 1, 1999, the Company operated 251 restaurants in 13 states, of which 150 were Bakers Squares and 101 were Village Inns. On that date, there were also 116 franchised Village Inn restaurants in 21 states. The Company has a pie manufacturing division supporting its restaurants, which operates under the name VICOM. VICOM has three production facilities. A2-18 Capitalization The following table sets forth the capitalization of the Company at July 11, 1999, and as adjusted to reflect both the sale and leaseback transaction and the exchange of 2,000,000 Shares of Common Stock for cash, with reduction for estimated fees and expenses relating to the Offer, as if the transaction has occurred on that date.
July 11, 1999 -------------------- Actual As adjusted -------- ----------- (in thousands) Short Term Debt: Current maturities of long term debt and capitalized lease obligations...................................... $ 1,403 $ 1,403 ======== ======== Long Term Debt: Long term debt.......................................... 38 38 Capitalized lease obligations........................... 4,514 4,514 -------- -------- Total long term debt.................................. 4,552 4,552 Shareholders' Equity: Common Stock, $.05 par value, 20,000,000 shares authorized, 8,841,941 issued actual, 6,841,941 shares issued as adjusted............................................... 443 343 Paid-in capital......................................... 80,639 42,339 Retained earnings....................................... 61,912 61,912 -------- -------- Total shareholders' equity............................ 142,994 104,594 -------- -------- Total capitalization...................................... $147,546 $109,146 ======== ========
Dividend Policy on Common Stock The Company has not paid any cash dividends on its Common Stock for several years and does not anticipate paying cash dividends on its Common Stock in the foreseeable future. Summary Financial Information The following is a summary of certain financial information with respect to the Company for the periods indicated. The summary financial information (other than book value per share) set forth for the fiscal year ended October 31, 1997, and for the fiscal year ended November 1, 1998, is summarized or prepared from the audited consolidated financial statements set forth in the Company's Annual Report on Form 10-K for the Fiscal Year Ended November 1, 1998. The financial information (other than book value per share) set forth below for the nine months ended July 31, 1998, and the 36 weeks ended July 11, 1999, is summarized or prepared from the consolidated financial statements set forth in the Company's Quarterly Reports on Form 10-Q for the quarters then ended. The financial information as of July 31, 1998 and July 11, 1999 and for the nine months and 36 weeks then ended, respectively, is unaudited, but in the opinion of management, includes all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of the results of operations for those periods. The Annual Report on Form 10-K for the Fiscal Year Ended November 1, 1998, as well as the Quarterly Reports Form 10-Q for the Quarters Ended July 31, 1998 and July 11, 1999, are incorporated in this Offer to Purchase by reference. More comprehensive financial information is included in these reports and the information below is qualified in its entirety by reference to these reports and all of the financial statements and related notes contained in the reports, copies of which may be obtained as set forth below under "Further Information." A2-19
Nine months Thirty-six Year ended Year ended Ended weeks Ended October 31, November 1, July 31, July 11, 1997 1998 1998 1999 ----------- ----------- ----------- ----------- (in thousands, except per share data) Income Statement Revenues...................... $325,527 $346,173 $258,502 $249,656 Operating profit.............. 12,729 15,527 11,941 13,755 Net income.................... 6,899 9,120 6,977 8,508 Balance Sheet Working capital............... (18,562) (19,535) (16,823) (20,026) Total assets.................. 194,990 199,670 191,868 202,016 Adjusted total assets(1)...... 190,224 195,293 187,297 197,712 Total debt.................... 21,050 7,494 7,799 5,955 Shareholders' equity.......... 129,919 138,007 138,503 142,994 Other data Basic earnings per common share........................ $ 0.76 $ 0.99 $ 0.76 $ 0.95 ======== ======== ======== ======== Diluted earnings per common share........................ $ 0.75 $ 0.98 $ 0.75 $ 0.94 ======== ======== ======== ========
- -------- (1) Balance adjusted to exclude intangible assets. Pro Forma Financial Statements The pro forma financial statements and information give pro forma effect to the payment of $38.0 million in cash upon the assumed tender of 2,000,000 Shares of Common Stock and the recently completed Sale and Lease-Back Transaction discussed above under "To the Holders of Common Shares of VICORP Restaurants, Inc.-- Recent Developments." The unaudited pro forma balance sheet data has been prepared as if the proposed transactions had occurred at the end of the period presented, while the unaudited statement of operations data has been prepared as if the proposed transactions had occurred at the beginning of the periods presented. The information in the pro forma financial statements is qualified by reference to, and should be read in conjunction with the Company's financial statements and the accompanying notes, incorporated by reference in this Offer to Purchase. The audited financial statements as of November 1, 1998 and October 31, 1997 and for each of the years in the three year period ended November 1, 1998 and the report on the financial statements are incorporated by reference in this Offer to Purchase from the financial statements contained in the Company's Form 10-K for the Fiscal Year Ended November 1, 1998. A2-20 VICORP RESTAURANTS, INC. PRO FORMA BALANCE SHEET (UNAUDITED)
November 1, 1998 ------------------------------------- Pro Forma Historical Adjustment Pro Forma ---------- ---------- --------- (in thousands, except per share data) Assets Current assets: Cash................................... $ 10,262 $ (9,890)(a)(c) $ 372 Receivables............................ 3,655 3,655 Inventories............................ 7,501 7,501 Deferred tax asset..................... 3,617 3,617 Prepaid expenses and other............. 2,192 2,192 -------- -------- Total current assets................. 27,227 17,337 Other assets: Property and equipment, net............ 128,648 (12,086)(b) 116,562 Deferred tax asset..................... 35,547 35,547 Other assets........................... 8,248 8,248 -------- -------- Total Assets......................... $199,670 $177,694 ======== ======== Liabilities and Shareholders' Equity Current liabilities: Current maturities of long-term debt and capitalized lease obligations..... 1,711 1,711 Accounts payable, trade................ 21,847 21,847 Accrued compensation................... 6,013 6,013 Accrued taxes.......................... 8,629 8,629 Other accrued expenses................. 8,562 8,562 -------- -------- Total current liabilities............ 46,762 46,762 Long-term liabilities: Long-term debt......................... 87 87 Capitalized lease obligations.......... 5,696 5,696 Long-term insurance claims............. 3,199 3,199 Other non-current credits.............. 5,919 16,424 (d) 22,343 Shareholders' equity: Common stock........................... 455 (100)(e) 355 Paid-in capital........................ 84,148 (38,300)(e) 45,848 Retained earnings...................... 53,404 53,404 -------- -------- Total shareholders' equity........... 138,007 99,607 Total liabilities and shareholders' equity.............................. $199,670 $177,694 ======== ======== Book value per common share.............. $ 15.22 $ 14.09 ======== ========
A2-21 VICORP RESTAURANTS, INC. PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
Fiscal Year Ended November 1, 1998 --------------------------------- Pro Forma Pro Historical Adjustment Forma ---------- ---------- -------- (in thousands, except per share data) Revenues: Restaurant operations.................... $342,654 $342,654 Franchise operations..................... 3,519 3,519 -------- -------- Total revenues......................... 346,173 346,173 Costs and Expenses Restaurant operations: Food..................................... 105,416 105,416 Labor.................................... 112,047 112,047 Other operating.......................... 87,165 1,146 (g) 88,311 General and administrative............... 26,018 26,018 -------- -------- Operating Profit........................... 15,527 14,381 Interest Expense........................... 1,547 293 (i) 1,840 Other (income) expense, net................ (382) (382) -------- -------- Income before income tax expense........... 14,362 12,923 Income tax expense......................... 5,242 (525)(h) 4,717 -------- -------- Net income................................. $ 9,120 $ 8,206 ======== ======== Basic earnings per common share............ $ 0.99 $ 1.14 ======== ======== Diluted earnings per common share.......... $ 0.98 $ 1.13 ======== ======== Weighted average common shares and dilutive common share equivalents.................. 9,262 7,262 ======== ======== Ratio of earnings to fixed charges (1)..... 3.03 2.67 ======== ========
- -------- (1) For purposes of calculating the ratio of earnings to fixed charges, earnings represent pre-tax earnings. Fixed charges represent interest as well as the portion of rent expense deemed representative of the interest factor. A2-22 VICORP RESTAURANTS, INC. PRO FORMA BALANCE SHEET (UNAUDITED)
July 11, 1999 ------------------------------------- Pro Forma Historical Adjustment Pro Forma ---------- ---------- --------- (in thousands, except per share data) Assets Current assets: Cash.................................... $ 11,938 $(9,890)(a)(c) $ 2,048 Receivables............................. 2,516 2,516 Inventories............................. 6,111 6,111 Deferred tax asset...................... 3,617 3,617 Prepaid expenses and other.............. 2,345 2,345 -------- -------- Total current assets.................. 26,527 16,637 Other assets: Property and equipment, net............. 134,930 (11,510)(b) 123,420 Deferred tax asset...................... 31,462 31,462 Other assets............................ 9,097 9,097 -------- -------- Total Assets.......................... $202,016 $180,616 ======== ======== Liabilities and Shareholders' Equity Current liabilities: Current maturities of long-term debt and capitalized lease obligations.......... 1,403 1,403 Accounts payable, trade................. 18,038 18,038 Accrued compensation.................... 7,203 7,203 Accrued taxes........................... 10,676 10,676 Other accrued expenses.................. 9,233 9,233 -------- -------- Total current liabilities............. 46,553 46,553 Long-term liabilities: Long-term debt.......................... 38 38 Capitalized lease obligations........... 4,514 4,514 Long-term insurance claims.............. 2,333 2,333 Other non-current credits............... 5,584 17,000 (d) 22,584 Shareholders' equity: Common stock............................ 443 (100)(e) 343 Paid-in capital......................... 80,639 (38,300)(e) 42,339 Retained earnings....................... 61,912 61,912 -------- -------- Total shareholders' equity............ 142,994 104,594 Total liabilities and shareholders' equity............................... $202,016 $180,616 ======== ======== Book value per common share............... $ 16.17 $ 15.29 ======== ========
A2-23 VICORP RESTAURANTS, INC. PRO FORMA STATEMENT OF OPERATIONS (UNAUDITED)
Thirty-six Weeks Ended July 11, 1999 -------------------------------- Pro Forma Historical Adjustment Pro Forma ---------- ---------- --------- (in thousands, except per share data) Revenues: Restaurant operations...................... $247,497 $247,497 Franchise operations....................... 2,159 2,159 -------- -------- Total revenues........................... 249,656 249,656 Costs and Expenses Restaurant operations: Food....................................... 75,527 75,527 Labor...................................... 80,207 80,207 Other operating............................ 60,651 767 (f) 61,418 General and administrative................. 19,516 19,516 -------- -------- Operating Profit............................. 13,755 12,988 Interest Expense............................. 704 704 Other (income) expense, net.................. (347) (347) -------- -------- Income before income tax expense............. 13,398 12,631 Income tax expense........................... 4,890 (280)(h) 4,610 ======== ======== Net income............................... $ 8,508 $ 8,021 ======== ======== Basic earnings per common share.............. $ 0.95 $ 1.15 ======== ======== Diluted earnings per common share............ $ 0.94 $ 1.14 ======== ======== Weighted average common shares and dilutive common share equivalents.................... 9,017 7,017 ======== ======== Ratio of earnings to fixed charges(1)........ 4.07 3.73 ======== ========
- -------- (1) For purposes of calculating the ratio of earnings to fixed charges, earnings represent pre-tax earnings. Fixed charges represent interest as well as the portion of rent expense deemed representative of the interest factor. A2-24 Notes to Pro Forma Financial Statements (a) To reflect the receipt of $29.0 million in cash as a result of the Sale and Lease-Back Transaction, offset by transaction costs of $490,000. (b) To reflect the sale of land, buildings and improvements in the Sale and Lease-Back Transaction. (c) To reflect the payment for $38.4 million in cash, both for the repurchase of shares as well as professional and other expenses. (d) To reflect the gain on the sale of assets in the Sale and Lease-Back Transaction. Balance is offset against lease rentals over the course of the lease. (e) To reflect the repurchase of 2,000,000 Shares for $38.0 million in cash. Also reflects $400,000 worth of professional and other expenses incurred in connection with the Offer. (f) To reflect $1.3 million of rental expense which will be incurred, offset by $572,000 of depreciation expense which will no longer be incurred on the disposed assets. (g) To reflect $2 million of rental expense which will be incurred, offset by $826,000 of depreciation expense which will no longer be incurred on the disposed assets. (h) To reflect the income tax expense at the Company's effective rate. (i) To reflect interest expense on the additional amount drawn on the line of credit. A2-25 10. Interest of Directors and Officers and Principal Shareholders; Transactions and Arrangements Concerning Shares. As of the close of business on November 22, 1999, the Company had 8,875,076 Shares issued and outstanding. The Company has not been advised whether any executive officers, directors, or their affiliates intend to tender any of their Shares pursuant to the Offer. The following table sets forth information as of November 22, 1999, with respect to the beneficial ownership of Shares of all persons known by the Company to be the beneficial owners of 5% or more of the outstanding Shares, each director of the Company, and each executive officer, as well as all directors and executive officers of the Company as a group.
Amount and Nature of Name and Address Beneficial Percent Title of Class of Beneficial Owner Ownership of Class -------------- ------------------- ---------- -------- Common Stock (par Southeastern Asset 1,279,900(1) 14.43% value $.05 per share) Management, Inc. 6410 Poplar Avenue Suite 900 Memphis, Tennessee 38119 Quaker Capital 820,700(2) 9.25% Management Corporation 1300 Arrott Building 401 Wood Street Pittsburgh, Pennsylvania 15222 First Manhattan Co. 751,902(3) 8.47% 437 Madison Avenue New York, New York 10022 The Prudential Insurance 654,200(4) 7.37% Company of America 751 Broad Street Newark, New Jersey 07102-3777 Dimensional Fund Advisors, Inc. 520,700(5) 5.87% 1299 Ocean Avenue, 11th Floor Santa Monica, California 90401-1038 Franklin Advisory Services, Inc. 480,000(6) 5.41% One Parker Plaza, 16th Floor Fort Lee, New Jersey 07024 Carole Lewis Anderson 23,000(7) * 3616 Reservoir Road NW Washington, D.C. 20007 Bruce B. Brundage 33,000(7) * 5290 DTC Parkway, Suite 160 Englewood, Colorado 80111 Charles R. Frederickson 113,654 1.28% 400 West 48th Avenue Denver, Colorado 80216 John C. Hoyt 63,868(7) * 500 SE Sixth Street Bartlesville, Oklahoma 74003
A2-26
Amount and Nature of Name and Address Beneficial Percent Title of Class of Beneficial Owner Ownership of Class -------------- ------------------- ---------- -------- Common Stock (par value Robert E. Kaltenbach 41,691(7) * $.05 per share 400 West 48th Avenue Denver, Colorado 80216 Robert T. Marto 16,000(7) * 354 New Caanan Wilton, Connecticut 06897 Dudley C. Mecum 25,500(7) * 33 Khakum Wood Road Greenwich, Connecticut 06831 Dennis B. Robertson 30,000(7) * 1987 West 111th Street Chicago, Illinois 60643 Richard E. Sabourin 78,544(7) * 400 West 48th Avenue Denver, Colorado 80216 Joseph F. Trungale 33,332(7) * 400 West 48th Avenue Denver, Colorado 80216 Hunter Yager 15,303(7) * 314 West Fields Manchester, Vermont 05255 Arthur Zankel 170,100(8) 1.91% 437 Madison Avenue New York, New York 10022 All directors 643,992 7.02% and executive officers as a group (12 persons including those named above)
- -------- * Percent of class is less than 1%. (1) Of the 1,279,900 shares beneficially owned, the shareholder has sole voting power over 281,000 shares, shared voting power over 982,400 shares, no voting power over 16,500 shares, sole dispositive power over 297,500 shares, and shared dispositive power over 982,400 shares. (2) Of the 820,700 shares beneficially owned, the shareholder has sole voting power over 287,300 shares, shared voting power over 533,400 shares, sole dispositive power over 287,300 shares, and shared dispositive power over 533,400 shares. (3) Of the 751,902 shares beneficially owned, the shareholder has sole voting power over 364,500 shares, shared voting power over 385,702 shares, sole dispositive power over 364,500 shares, and shared dispositive power over 387,402 shares. Arthur Zankel, a director of the Company, is a Partner of First Manhattan Co.; and 152,100 of the shares owned by him are reflected in the share ownership reported by First Manhattan Co. (4) Of the 654,200 shares beneficially owned, the shareholder has sole voting power over 173,600 shares, shared voting power over 480,600 shares, sole dispositive power over 173,600 shares, and shared dispositive power over 480,600 shares. (5) Of the 520,700 shares beneficially owned, the shareholder has sole voting and dispositive power over all the shares. A2-27 (6) Of the 480,000 shares beneficially owned, the shareholder has sole voting and dispositive power over all of the shares. (7) Includes 22,000, 18,000, 20,000, 41,666, 16,000, 24,000, 18,000, 75,000, 33,332, and 12,000 shares which Ms. Anderson, Messrs. Brundage, Hoyt, Kaltenbach, Marto, Mecum, Robertson, Sabourin, Trungale, and Yager, respectively, have the right to purchase under options that are presently exercisable. (8) Includes 152,100 shares owned directly by Mr. Zankel, and 18,000 shares which he has the right to purchase under options that are currently exercisable. Each outstanding Share is entitled to one vote. The 2,000,000 Shares that the Company is offering to purchase pursuant to the Offer represent approximately 22.5% of the Shares outstanding on November 22, 1999 (approximately 21.9% assuming exercise of outstanding exercisable Options). The following table sets forth for each of the Company's stock option plans Shares reserved for issuance, the Shares issuable pursuant to exercise of all options and the options which have an exercise price below the Purchase Price:
Exercisable Options Shares Reserved Exercisable With Exercise Price Plan Name for Issuance Options Below the Purchase Price --------- --------------- ----------- ------------------------ 1982 Stock Option Plan.. 318,082 74,998 74,998 1983 Stock Option Plan.. 198,000 148,000 106,000 Non-Plan Options........ 100,000 75,000 75,000
Neither the Company nor, to the best of the Company's knowledge, any of the Company's directors or executive officers, nor any affiliates of any of the foregoing, had any transactions involving the Shares during the 40 business days prior to the date hereof. Except for outstanding options to purchase shares granted to directors and executive officers and as otherwise described in this Offer to Purchase or incorporated herein, neither the Company nor, to the best of the Company's knowledge, any of its affiliates, directors or executive officers, is a party to any contract, arrangement, understanding or relationship with any other person relating, directly or indirectly, to the Offer with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or the giving or withholding of proxies, consents or authorizations. 11. Effects of the Offer on the Market for Shares; Registration Under the Exchange Act. The Company's purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise be traded publicly and may reduce the number of shareholders. Nonetheless, the Company anticipates there will be a sufficient number of Shares outstanding and publicly traded following consummation of the Offer to ensure a continued trading market for the Shares. A substantial decrease in the number of Shares outstanding could result in a substantial decrease in the liquidity of the Shares, even if the Company continues to be a reporting company under the Exchange Act and continues to file the periodic reports, including annual and quarterly reports, required to be filed thereunder. The Shares are registered under the Exchange Act, which requires, among other things, that the Company furnish certain information to its shareholders and the Commission and comply with the Commission's proxy rules in connection with meetings of the Company's shareholders. The Company believes its purchase of Shares pursuant to the Offer will not result in the Shares becoming eligible for deregistration under the Exchange Act. A2-28 12. Certain Legal Matters; Regulatory Approvals. The Company is not aware of any material license or regulatory permit to the Company's business that might be adversely affected by the Company's acquisition of Shares as contemplated in this Offer to Purchase or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by the Company as contemplated herein. Should any such approval or other action be required, the Company presently contemplates that such approval or other action will be sought. The Company is unable to predict whether it will be required to delay the acceptance for payment of or payment for Shares tendered pursuant to the Offer pending the outcome of any such matter. There can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to the Company's business. The Company's obligations under the Offer to accept for payment and pay for Shares is subject to certain conditions. See Section 6. 13. Certain United States Federal Income Tax Consequences. The following summary describes the principal United States federal income tax consequences to United States Holders (as defined below) of a sale of Shares pursuant to the Offer. Those shareholders who do not participate in the Offer should not incur any United States federal income tax liability from the Offer. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), existing United States Treasury Regulations promulgated thereunder, published rulings, administrative pronouncements and judicial decisions, all of which are subject to change. Any such change, which may be retroactive, could alter the tax consequences described herein. This summary addresses only Shares held as capital assets within the meaning of section 1221 of the Code. It does not address all of the United States federal tax consequences that may be relevant to particular shareholders in light of their personal circumstances (for example, tax consequences under the alternative minimum tax provisions of the Code) or to certain types of shareholders (such as certain financial institutions, dealers or traders in securities or commodities, insurance companies, real estate investments trusts, regulated investment companies, tax-exempt organizations or persons who hold Shares as a position in a "straddle" or as part of a "hedging" or "conversion" transaction or that have a functional currency other than the United States dollar). This summary may not be applicable with respect to Shares acquired as compensation (including Shares acquired upon the exercise of options or which were or are subject to forfeiture restrictions). This summary does not address the state, local or foreign tax consequences of participating in the Offer. EACH HOLDER OF SHARES SHOULD CONSULT THE HOLDER'S TAX ADVISOR AS TO THE PARTICULAR CONSEQUENCES TO THE HOLDER OF PARTICIPATION IN THE OFFER. A "United States Holder" is a holder of Shares that for United States federal income tax purposes is (i) a citizen or resident of the United States, (ii) a corporation or partnership created or organized in or under the laws of the United States or any State or division thereof (including the District of Columbia), (iii) an estate the income of which is subject to United States federal income taxation regardless of its source, or (iv) a trust (a) the administration over which a United States court can exercise primary supervision and (b) all of the substantial decisions of which one or more United States persons have the authority to control. A "Non-United States Holder" is a holder of Shares other than a United States Holder. A United States Holder participating in the Offer will be treated either as having sold Shares or as having received a dividend distribution from the Company depending on such United States Holder's particular circumstances. Under Section 302 of the Code, a United States Holder whose Shares are sold pursuant to the Offer will be treated as having sold Shares if the sale (i) results in a "complete termination" of all of such holder's equity interest in the Company, (ii) is a "substantially disproportionate" redemption with respect to such holder or (iii) is "not essentially equivalent to a dividend" with respect to such holder. In applying each of the Section 302 tests, a United States Holder will be treated as owning Shares actually or constructively owned by certain related individuals and entities, as well as Shares that the United States Holder has the right to accquire by exercise of an option or by conversion or exchange of a security. The receipt of cash by a shareholder will result in a "complete termination" of the shareholder's interest if either (i) all of the Shares that are actually and constructively owned by the shareholder are sold pursuant A2-29 to the Offer or (ii) all of the Shares actually owned by the shareholder are sold pursuant to the Offer and the shareholder is eligible to waive, and effectively waives, the attribution of the Shares constructively owned by the shareholder in accordance with the procedures described in the Code. A sale of Shares will be "substantially disproportionate" with respect to a United States Holder if the United States Holder owns actually and constructively, less than 50% of the total combined voting power of all classes of shares after the sale, and the percentage of the then outstanding Shares actually and constructively owned by such holder immediately after the sale of Shares pursuant to the Offer is less than 80% of the percentage of the Shares actually and constructively owned by such holder immediately before the sale (treating Shares sold pursuant to the Offer as outstanding before the sale). A United States Holder will satisfy the "not essentially equivalent to a dividend" test if the reduction in such holder's proportionate interest actually and constructively owned in the Company constitutes a "meaningful reduction" given such holder's particular facts and circumstances. The IRS has concluded in a published ruling that even a minor reduction in the percentage interest of a shareholder whose relative stock interest in a publicly held corporation is minimal (e.g., an interest of less than 1%) and who exercises no control over corporate affairs constitutes such a "meaningful reduction." If a United States Holder is treated as having sold Shares, such holder will recognize capital gain or loss equal to the difference between the amount of cash received and such holder's adjusted tax basis in the Shares sold to the Company. In the case of an individual United States Holder whose holding period for the Shares exceeds one year, the maximum marginal United States federal income tax rate of 20% applicable to such gain will be lower than the maximum marginal United States federal income tax rate applicable to ordinary income of 39.6%. If a United States Holder who participates in the Offer is not treated as having sold Shares, such holder will be treated as receiving a dividend to the extent of such holder's ratable share of the Company's earnings and profits. Such a dividend will be includible in the United States Holder's gross income as ordinary income without reduction for the adjusted tax basis of the Shares sold. In such event, the United States Holder's adjusted tax basis in its Shares sold in the Offer generally will be added to the adjusted tax basis of such holder's remaining Shares, if any, and may be lost if the United States Holder does not retain any Shares. A dividend received by a corporate United States Holder may be (i) eligible for a dividends-received deduction (subject to applicable limitations) and (ii) subject to the "extraordinary dividend" provisions of the Code. To the extent, if any, that the cash received by a United States Holder exceeds the Company's earnings and profits, it will be treated first as a tax-free return of such United States Holder's tax basis in the Shares and thereafter as capital gain, which will be long-term capital gain if the holding period for the Shares exceeds one year. See Section 3 with respect to the application of United States federal income tax withholding to payments made to Non-United States Holders and the backup withholding tax requirements. THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. EACH SHAREHOLDER IS URGED TO CONSULT THE HOLDER'S OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THE HOLDER OF THE OFFER, INCLUDING THE APPLICABILITY AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS,. 14. Extension of the Offer; Termination; Amendment. The Company expressly reserves the right, in its sole discretion, at any time and from time to time, and regardless of whether or not any of the events set forth in Section 6 shall have occurred or shall be deemed by the Company to have occurred, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and payment for, any Shares by giving oral or written notice of such extension to the Depositary and making a public announcement. During any extension of the Offer, all Shares previously tendered and not properly withdrawn will remain subject to the Offer and to the rights of a tendering shareholder to withdraw the shareholder's Shares. The Company also expressly reserves the right, in its reasonable discretion, to terminate the Offer and not accept for payment or pay for any Shares not theretofore accepted for payment or paid for or, subject to applicable law, to postpone payment for Shares upon the occurrence of any of the conditions specified in Section 6 by giving oral or written notice of termination or postponement to the Depositary and making a public announcement. The Company's reservation of the right to delay payment for Shares which it has accepted for payment is limited by Rule 13e-4(f)(5) promulgated under the A2-30 Exchange Act, which requires that the Company must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of a tender offer. Subject to compliance with applicable law, the Company further reserves the right, in its reasonable discretion, and regardless of whether any of the events set forth in Section 6 shall have occurred or shall be deemed by the Company to have occurred, to amend the Offer in any respect (including, without limitation, by decreasing or increasing the consideration offered in the Offer to holders of Shares or by decreasing or increasing the number of Shares being sought in the Offer). Amendments to the Offer may be made at any time and from time to time effected by public announcement, such announcement, in the case of an extension, to be issued no later than 9:00 a.m., Eastern Standard Time, on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to shareholders in a manner reasonably designed to inform shareholders of the change. Without limiting the manner in which the Company may choose to make a public announcement, except as required by applicable law, the Company will have no obligation to publish, advertise or otherwise communicate any public announcement other than by making a release to the Dow Jones News Service. If the Company materially changes the terms of the Offer or the information concerning the Offer, or if it waives a material condition of the Offer, the Company will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(2) promulgated under the Exchange Act. These rules provide that the minimum period during which an offer must remain open following material changes in the terms of the Offer or information concerning the Offer (other than a change in price or a change in percentage of securities sought) will depend on the facts and circumstances, including the relative materiality of such terms or information. If (i)(a) the Company increases or decreases the price to be paid for Shares, (b) increases the number of Shares being sought in the Offer and, in the event of an increase in the number of Shares being sought, such increase exceeds 2% of the outstanding Shares, or (c) decreases the number of Shares being sought, and (ii) the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that such notice of an increase or decrease is first published, sent or given in the manner specified in this Section 14, the Offer will be extended until the expiration of such period of ten business days. For the purposes of the Offer, a "business day" means any day other than a Saturday, Sunday or Federal holiday and consists of the time period from 12:01 a.m. through 12:00 Midnight, Eastern Standard Time. 15. Fees and Expenses. The Company has retained D.F. King & Co., Inc. as Information Agent in connection with the Offer. The Information Agent may contact shareholders by mail, telephone, telex, telegraph and personal interview, and may request brokers, dealers and other nominee shareholders to forward materials relating to the Offer to beneficial owners. The Information Agent will receive reasonable and customary compensation for their services. The Company will also reimburse the Information Agent for out-of-pocket expenses, including reasonable attorneys' fees, and has agreed to indemnify the Information Agent against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. The Company has retained American Stock Transfer & Trust Company to act as Depositary in connection with the Offer. The Depositary will receive reasonable and customary compensation for its services, will be reimbursed by the Company for certain reasonable out-of-pocket expenses and will be indemnified against certain liabilities in connection with the Offer, including certain liabilities under the federal securities laws. NEITHER THE INFORMATION AGENT NOR THE DEPOSITARY HAS BEEN RETAINED TO MAKE SOLICITATIONS OR RECOMMENDATIONS IN CONNECTION WITH THE OFFER. No fees or commissions will be payable by the Company to brokers, dealers or other persons for soliciting tenders of Shares pursuant to the Offer. Shareholders holding Shares through brokers or banks are urged to consult the brokers or banks to determine whether transaction costs are applicable if shareholders tender Shares through such brokers or banks and not directly to the Depositary. The Company, however, upon request through A2-31 the Information Agent, will reimburse brokers, dealers and commercial banks for customary mailing and handling expenses incurred by them in forwarding the Offer and related materials to the beneficial owners of Shares held by them as a nominee or in a fiduciary capacity. No broker, dealer, commercial bank or trust company has been authorized to act as the agent of the Company, the Information Agent or the Depositary for purposes of the Offer. The Company will pay or cause to be paid all stock transfer taxes, if any, on its purchase of Shares except as otherwise provided in Instruction 6 in the Letter of Transmittal. 16. Miscellaneous. The Company is not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If the Company becomes aware of any jurisdiction where the making of the Offer or the acceptance of Shares pursuant thereto is not in compliance with any valid applicable law, the Company will make a good faith effort to comply with the applicable law. If, after such good faith effort, the Company cannot comply with the applicable law, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such jurisdiction. In any jurisdiction the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on the Company's behalf by one or more registered brokers or dealers licensed under the laws of the jurisdiction. A2-32 FURTHER INFORMATION The Company files reports, proxy statements and other information with the Commission under the Exchange Act. These reports and statements are available upon request from the Secretary of the Company at the Company's principal executive office. This information may be read and copied at the following Commission locations: Public Reference Room New York Regional Office Chicago Regional Office 450 Fifth Street, N.W. 7 World Trade Center Citicorp Center Room 1024 Suite 1300 500 West Madison Street Washington, D.C. 20549 New York, New York 10048 Suite 1400 Chicago, Illinois 60661- 2511 Copies of this information are also available by mail from the Commission's Public Reference Section, 450 Fifth Street, N.W., Room 1024, Washington D.C., 20549, at prescribed rates. Further information on the operation of the Commission's Public Reference Room in Washington, D.C. may be obtained by calling the Commission at 1-800-SEC-0330. The Commission also maintains a world wide web site that contains reports, proxy statements and other information about registrants, such as the Company, that file electronically with the Commission. The address of that web site is http://www.sec.gov. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO MAKE ANY RECOMMENDATION ON BEHALF OF THE COMPANY AS TO WHETHER SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. THE COMPANY HAS NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. Pursuant to Rule 13e-4 of the General Rules and Regulations of the Commission under the Exchange Act, the Company has filed with the Commission a Schedule 13E-4 that contains additional information with respect to the Offer. The Schedule 13E-4, including its exhibits and any amendments, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth in Section 9 with respect to information concerning the Company. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE COMPANY OR THE INFORMATION AGENT IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED IN THIS OFFER TO PURCHASE OR IN THE RELATED LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE INFORMATION AGENT. VICORP RESTAURANTS, INC. November 23, 1999 A2-33 Facsimile copies of the Letter of Transmittal will be accepted from Eligible Institutions. The Letter of Transmittal and certificates for Common Stock and any other required documents should be sent or delivered by each holder or his, her or its broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below. The Depositary for the Offer is: AMERICAN STOCK TRANSFER & TRUST COMPANY BY REGISTERED OR CERTIFIED MAIL, HAND DELIVERY OR IN PERSON: 40 Wall Street, 46th Floor New York, New York 10005 BY FACSIMILE: (718) 234-5001 CONFIRM FACSIMILE BY TELEPHONE: (718) 921-8200 The Information Agent for the Offer is: D.F. KING & CO., INC. 77 Water Street, 20th Floor New York, New York 10005 Call Toll-Free: (800) 758-5880 or Call Collect: (212) 269-5550 Additional copies of the Offer to Purchase, the Letter of Transmittal or other tender offer materials may be obtained from the Information Agent or the Depositary and will be furnished at the Company's expense. Questions and requests for assistance may be directed to the Information Agent as set forth above. Holders also may contact their local broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer to Purchase. A2-34 EX-99.A.3 4 LETTER OF TRANSMITTAL CUSIP 925817108 EXHIBIT 99.A.3 Letter Of Transmittal To Tender Common Shares of VICORP RESTAURANTS, INC. Pursuant to the Offer to Purchase Dated November 23, 1999 of VICORP RESTAURANTS, INC. THE EXPIRATION DATE, WITHDRAWAL DEADLINE AND PRORATION DEADLINE IS WEDNESDAY, DECEMBER 22, 1999, AT 5:00 P.M. EASTERN STANDARD TIME, UNLESS EXTENDED. The Depositary for the Offer is: American Stock Transfer & Trust Company By Mail and Hand: The Information Agent is: American Stock Transfer & Trust Company D.F. King & Co., Inc. 40 Wall Street, 46th Floor 77 Water Street New York, New York 10005 New York, New York 10005 Telephone: (718) 921-8200 Bankers and Brokers Call Collect: For Eligible Institutions Only: (212) 269-5550 Facsimile: (718) 234-5001 or All Others Call Toll-Free: (800) 758-5880 THIS LETTER OF TRANSMITTAL, INCLUDING THE ACCOMPANYING INSTRUCTIONS, SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR VIA A FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. DELIVERY TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. DESCRIPTION OF SHARES TENDERED - --------------------------------------------------------------------------------
Print Name and Address of Registered Holder(s) (Please fill in exactly as name appears on Certificate(s) Enclosed certificate) (Attach signed list if necessary) - -------------------------------------------------------------------------------- Number of Shares Share Certificate Evidenced by Number of Shares Number(s) Certificate(s)* Tendered** ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- ---------------------------------------------------- Total:
- -------------------------------------------------------------------------------- * Need not be completed by shareholders that tender Shares by book-entry transfer. ** Unless otherwise instructed, it will be assumed that all Shares described above are being tendered. See Instruction 4. A3-1 This Letter of Transmittal is to be completed only (a) if certificates representing Shares (as defined below) are to be forwarded herewith or (b) if tenders of Shares are to be made concurrently by book-entry transfer to the account maintained by the Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3 of the VICORP Restaurants, Inc. Offer to Purchase, dated November 23, 1999 (the "Offer to Purchase"). Delivery of documents to the Book-Entry Transfer Facility does not constitute delivery to the Depositary. Shareholders whose Share certificates are not immediately available or who cannot deliver the certificates and all other documents required by this Letter of Transmittal to the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase), or who cannot comply with the procedure for book-entry transfer on a timely basis, may nevertheless tender their Shares pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2. [_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution: _____________________________________________ Account Number: ____________________________________________________________ Transaction Code Number: ___________________________________________________ [_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING: Name of Registered Holders(s): _____________________________________________ Window Ticket Number (if any): _____________________________________________ Date of Execution of Notice of Guaranteed Delivery: ________________________ Name of Institution with Guaranteed Delivery: ______________________________ A3-2 NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. To American Stock Transfer & Trust Company: The undersigned hereby tenders to VICORP Restaurants, Inc., a Colorado corporation (the "Company"), the above-described common shares, $.05 par value, of the Company (the "Shares"), at a price of $19.00 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Company's Offer to Purchase dated November 23, 1999 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). Subject to, and effective upon, acceptance for payment of the Shares tendered hereby in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Company all right, title and interest in and to all Shares tendered hereby and orders the registration of all such Shares if tendered by book-entry transfer and hereby irrevocably constitutes and appoints the Depositary as the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (with full knowledge that the Depositary also acts as the agent of the Company) with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to: (a) deliver certificate(s) representing such Shares or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facility, together, in either such case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Company upon receipt by the Depositary, as the undersigned's agent, of the Purchase Price (as defined below) with respect to such Shares; (b) present certificates for such Shares for cancellation and transfer on the Company's books; and (c) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares, subject to the next paragraph, all in accordance with the terms and subject to the conditions of the Offer. The undersigned hereby covenants, represents and warrants to the Company that: . the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby and that when and to the extent the same are accepted for payment by the Company, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all security interests, liens, restrictions, charges, encumbrances, conditional sales agreements or other obligations relating to the sale or transfer of such Shares, and not subject to any adverse claims; . the undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute the undersigned's acceptance of the terms and conditions of the Offer, including the undersigned's representation and warranty that (a) the undersigned has a net long position in the Shares or equivalent securities at least equal to the Shares tendered within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), and (b) such tender of Shares complies with Rule 14e-4; . the undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or the Company to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby; and . the undersigned has read, understands and agrees to all of the terms and conditions of the Offer. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Company, upon the terms and subject to the conditions of the Offer. The undersigned acknowledges that no interest will be paid on the Purchase Price for tendered Shares regardless of any extension of the Offer or any delay in making such payment. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, executors, administrators, successors, assigns, trustees in bankruptcy and legal representatives of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. A3-3 The name(s) and address(es) of the registered holder(s) should be printed, if they are not already printed above, exactly as they appear on the certificates representing Shares tendered hereby. The certificate numbers, the number of Shares represented by such certificates and the number of Shares that the undersigned wishes to tender should be set forth in the appropriate boxes above. The undersigned understands that: . the Company has, upon the terms and subject to the conditions of the Offer, determined a single per Share price of $19.00, net to the seller in cash, without interest thereon (the "Purchase Price"); . the Company will pay for Shares validly tendered and not withdrawn prior to the Expiration Date pursuant to the Offer, taking into account the number of Shares so tendered by tendering shareholders; . all Shares validly tendered prior to the Expiration Date and not withdrawn will be purchased at the Purchase Price, upon the terms and subject to the conditions of the Offer, including its proration provisions; . the Company will return all other Shares not purchased pursuant to the Offer, including Shares not purchased because of proration; and . the Company has reserved the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. The undersigned recognizes that, under certain circumstances set forth in the Offer to Purchase, the Company may terminate or amend the Offer or may postpone the acceptance for payment of, or the payment for, Shares tendered or may accept for payment fewer than all of the Shares tendered hereby. In any such event, the undersigned understands that certificate(s) for any Shares not tendered or not purchased will be returned to the undersigned at the address indicated above, unless otherwise indicated under the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" below. The check for the aggregate net Purchase Price for such of the tendered Shares as are purchased will be issued to the order of the undersigned and mailed to the address indicated above, unless otherwise indicated under the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" below. In the event that both the "Special Payment Instructions" and the "Special Delivery Instructions" are completed, please issue the check for the Purchase Price and/or return any Shares not so tendered or accepted for payment in the name of and deliver said check and/or return such Shares to the person or persons so indicated. Shareholders tendering Shares by book-entry transfer may request that any Shares not accepted for payment be returned by crediting such account maintained at the Book-Entry Transfer Facility by making an appropriate entry under "Special Payment Instructions." The undersigned acknowledges that the Company has no obligation, pursuant to the "Special Payment Instructions," to transfer any Shares from the name of its registered holder(s) thereof, or to order the registration or transfer of any Shares tendered by book-entry transfer, if the Company does not purchase any of such Shares. A3-4 SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS Instructions 1, 4, 5 and 8) (See Instructions 1, 4, 5 and 8) To be completed ONLY if certifi- To be completed ONLY if certifi- cates for Shares not tendered or cate(s) for Shares not tendered not purchased and/or the check or not purchased and any check for the purchase price of Shares for the Purchase Price are to be is to be issued in the name of mailed or sent to someone other someone other than the under- than the undersigned, or to the signed or if Shares tendered by undersigned at an address other book-entry transfer which are not than that designated above. purchased are to be returned by credit to an account maintained Mail:[_] Check by the Book-Entry Transfer Facil- [_] Certificate(s) ity. Name:_____________________________ Issue:[_] Check (Please Print) [_] Certificates to: Address: _________________________ Name: ____________________________ (Please Print) __________________________________ (Include Zip Code) Address: _________________________ __________________________________ __________________________________ (Taxpayer Identification or (Include Zip Code) Social Security Number) Credit unpurchased Shares ten- dered by Book-Entry Transfer to the account set forth below: __________________________________ Name __________________________________ Account Number __________________________________ A3-5 IMPORTANT: SHAREHOLDERS SIGN HERE (ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW) ....................................................... Signature of Holder Dated ..........................................., 1999 (Must be signed by the registered holder(s) exactly as name(s) appear(s) on share certificate(s) or on a security listing or by person(s) authorized to become registered holder(s) by certificate(s) and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of corporation or any other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 5.) Name(s):............................................... ................................................ (Please Print) Capacity (full title):................................. Address:............................................... ................................................ (Include Zip Code) Telephone Number:...................................... Tax Identification or Social Security No.:................................... Guarantee of Signature(s) (See Instructions 1 and 5) Authorized Signature:.................................. Name:.................................................. Title:................................................. Address:............................................... ................................................ (Include Zip Code) Telephone Number:...................................... Tax Identification or Social Security No.:................................... Dated: ................................................ A3-6 ODD LOTS (SEE INSTRUCTION 7) To be completed ONLY if Shares are being tendered by or on behalf of a person owning, beneficially or of record, as of the close of business on November 23, 1999 and who continues to own, beneficially or of record, as of the Expiration Date, an aggregate of fewer than 100 Shares. The undersigned either (check one box): [_]was the beneficial or record owner of, as of the close of business on November 23, 1999, and continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares, all of which are being tendered; or [_]is a broker, dealer, commercial bank, trust company, or other nominee that (a) is tendering, for the beneficial owner(s) thereof, Shares with respect to which it is the record holder, and (b) believes, based upon representations made to it by such beneficial owner(s), that each such person was the beneficial or record owner of, as of the close of business on November 23, 1999, and continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and is tendering all of such Shares. A3-7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. Guarantee of Signatures. No signature guarantee is required if either: (a) this Letter of Transmittal is signed by the registered holder of the Shares (which term, for purposes hereof, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of the Shares) tendered hereby exactly as the name of such registered holder appears on the certificate(s) for the Shares tendered with this Letter of Transmittal and payment and delivery are to be made directly to such owner unless the owner has completed the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" above; or (b) the Shares are tendered for the account of a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit union, savings association or other entity which is an "eligible guarantor institution," as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the foregoing constituting an "Eligible Institution"). In all other cases, an Eligible Institution must guarantee all signatures on this Letter of Transmittal. See Instruction 5. 2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery Procedures. This Letter of Transmittal is to be completed only if certificates for Shares are delivered with it to the Depositary (or such certificates will be delivered pursuant to a Notice of Guaranteed Delivery previously sent to the Depositary) or if a tender for Shares is being made concurrently pursuant to the procedure for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Certificates for all physically tendered Shares or confirmation of a book-entry transfer into the Depositary's account at the Book-Entry Transfer Facility of Shares tendered electronically, together in each case with a properly completed and duly executed Letter of Transmittal (or facsimile hereof), and any other documents required by this Letter of Transmittal, should be either mailed or delivered to the Depositary at the appropriate address set forth herein and must be delivered to the Depositary on or before the Expiration Date. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Shareholders whose certificates are not immediately available or who cannot deliver certificates for their Shares and all other required documents to the Depositary before the Expiration Date, or whose Shares cannot be delivered on a timely basis pursuant to the procedures for book-entry transfer, must, in any such case, tender their Shares by or through any Eligible Institution by properly completing and duly executing and delivering a Notice of Guaranteed Delivery (or facsimile thereof) and by otherwise complying with the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure, certificates for all physically tendered Shares or book- entry confirmations, as the case may be, as well as a properly completed and duly executed Letter of Transmittal (or facsimile hereof) and all other documents required by this Letter of Transmittal, must be received by the Depositary within three Nasdaq trading days after receipt by the Depositary of such Notice of Guaranteed Delivery, all as provided in Section 3 of the Offer to Purchase. The Notice of Guaranteed Delivery may be delivered by hand or transmitted by telegram, facsimile transmission or mail to the Depositary and must include a signature guarantee by an Eligible Institution in the form set forth therein. For Shares to be tendered validly pursuant to the guaranteed delivery procedure, the Depositary must receive the Notice of Guaranteed Delivery on or before the Expiration Date. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. A3-8 The Company will not accept any alternative, conditional or contingent tenders, nor will it purchase any fractional Shares, except as expressly provided in the Offer to Purchase. All tendering shareholders, by execution of this Letter of Transmittal (or a facsimile hereof), waive any right to receive any notice of the acceptance of their tender. 3. Inadequate Space. If the space provided in the box entitled "Description of Shares Tendered" above is inadequate, the certificate numbers and/or the number of Shares should be listed on a separate signed schedule and attached to this Letter of Transmittal. 4. Partial Tenders and Unpurchased Shares. (Not applicable to shareholders who tender by book-entry transfer.) If fewer than all of the Shares evidenced by any certificate are to be tendered, fill in the number of Shares that are to be tendered in the column entitled "Number of Shares Tendered" in the box entitled "Description of Shares Tendered" above. In such case, if any tendered Shares are purchased, a new certificate for the remainder of the Shares (including any Shares not purchased) evidenced by the old certificate(s) will be issued and sent to the registered holder(s) thereof, unless otherwise specified in either the box entitled "Special Payment Instructions" or the box entitled "Special Delivery Instructions" in this Letter of Transmittal, as soon as practicable after the Expiration Date. Unless otherwise indicated, all Shares represented by the certificate(s) set forth above and delivered to the Depositary will be deemed to have been tendered. 5. Signatures on Letter Of Transmittal; Stock Powers and Endorsements. (a) If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without any change whatsoever. (b) If the Shares tendered hereby are registered in the names of two or more joint holders, each holder must sign this Letter of Transmittal. (c) If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles hereof) as there are different registrations of certificates. (d) When this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsement(s) of certificate(s) representing the Shares or separate stock power(s) are required unless payment is to be made or the certificate(s) for Shares not tendered or not purchased are to be issued to a person other than the registered holder(s). Signature(s) on the certificate(s) must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the certificate(s) listed, or if payment is to be made or certificate(s) for Shares not tendered or not purchased are to be issued to a person other than the registered holder(s), the certificate(s) must be endorsed or accompanied by appropriate stock power(s), in either case signed exactly as the name(s) of the registered holder(s) appears on the certificate(s), and the signature(s) on the certificate(s) or stock power(s) must be guaranteed by an Eligible Institution. See Instruction 1. (e) If this Letter of Transmittal or any certificate(s) or stock power(s) are signed by a trustee, executor, administrator, guardian, attorney-in- fact, officer of a corporation or any other person acting in a fiduciary or representative capacity, the person should so indicate when signing this Letter of Transmittal and must submit proper evidence satisfactory to the Company of his or her authority to so act. 6. Stock Transfer Taxes. Except as provided in this Instruction 6, no stock transfer tax stamps or funds to cover such stamps need accompany this Letter of Transmittal. The Company will pay any stock transfer taxes payable on the transfer to it of Shares purchased pursuant to the Offer. If, however, either (a) payment of the Purchase Price for Shares tendered hereby and accepted for purchase is to be made to any person other than the registered holder(s), or (b) Shares not tendered or not accepted for purchase are to be registered in the name(s) of any person(s) other than the registered holder(s) or (c) certificate(s) representing tendered Shares are registered in the name(s) of any person(s) other than the person(s) signing this Letter of Transmittal, then the Depositary will deduct from such Purchase Price the amount of any stock transfer taxes (whether imposed on the registered A3-9 holder(s), other person(s) or otherwise) payable on account of the transfer to such person, unless satisfactory evidence of the payment of such taxes or any exemption therefrom is submitted. 7. Odd Lots. As described in Section 1 of the Offer to Purchase, if the Company is to purchase fewer than all Shares validly tendered before the Expiration Date and not withdrawn, the Shares purchased first will consist of all Shares validly tendered by any shareholder who owned, beneficially or of record, as of the close of business on November 23, 1999 and as of the Expiration Date, an aggregate of fewer than 100 Shares, and who tenders all of such holder's Shares (an "Odd Lot Holder"). This preference will not be available unless the box captioned "Odd Lots" is completed. 8. Special Payment and Delivery Instructions. If certificate(s) for Shares not tendered or not purchased and/or check(s) are to be issued in the name of a person other than the signer of this Letter of Transmittal or if certificates and/or checks are to be sent to someone other than the person signing this Letter of Transmittal or to the signer at a different address, the box entitled "Special Payment Instructions" and/or the box entitled "Special Delivery Instructions" on this Letter of Transmittal must be completed as applicable and signatures must be guaranteed as described in Instruction 1. 9. Irregularities. All questions as to the number of Shares to be accepted and the validity, form, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be resolved by the Company (or by its representatives, including the Depositary) in its sole discretion, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any or all tenders of Shares it determines not to be in proper form or the acceptance of which or payment for which may, in the opinion of the Company's counsel, be unlawful. The Company also reserves the absolute right to waive any of the conditions of the Offer or any defect or irregularity in any tender with respect to any particular Shares or any particular shareholder, and the Company's interpretation of the terms of the Offer (including these Instructions) will be final and binding on all parties. No tender of Shares will be deemed to be validly made until all defects and irregularities have been cured by the tendering shareholder or waived by the Company. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Company shall determine. None of the Company, the Depositary, the Information Agent (as defined in the Offer to Purchase) or any other person is or will be obligated to give notice of any defects or irregularities in tenders and none of them will incur any liability for failure to give any notice. 10. Questions and Requests for Assistance and Additional Copies. Questions and requests for assistance may be directed to, or additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from, the Information Agent at its address and telephone numbers set forth on the back cover of the Offer to Purchase or from brokers, dealers, commercial banks or trust companies. 11. Tax Identification Number and Backup Withholding. Federal income tax law generally requires that a shareholder whose tendered Shares are accepted for purchase, or such shareholder's assignee (in either case, the "Payee"), provide the Depositary such Payee's correct Taxpayer Identification Number ("TIN"), which, in the case of a Payee who is an individual, is such Payee's social security number. If the Depositary is not provided with the correct TIN or an adequate basis for an exemption, the Payee may be subject to a monetary penalty imposed by the Internal Revenue Service and backup withholding in an amount equal to 31% of the gross proceeds received pursuant to the Offer. If withholding results in an overpayment of taxes, a refund may be obtained. To prevent backup withholding, each Payee must provide the Payee's correct TIN by completing the Substitute Form W-9 set forth herein, certifying that the TIN provided is correct (or that such Payee is awaiting a TIN) and that (a) the Payee is exempt from backup withholding, (b) the Payee has not been notified by the Internal Revenue Service that the Payee is subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the Internal Revenue Service has notified the Payee that such Payee is no longer subject to backup withholding. A3-10 If the Payee does not have a TIN, the Payee should (a) consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for instructions on applying for a TIN, (b) write "Applied For" in the space provided in Part 1 of the Substitute Form W-9, and (c) sign and date the Substitute Form W-9 and the Certificate of Awaiting Taxpayer Identification Number set forth herein. If the Payee does not provide such Payee's TIN to the Depositary within sixty (60) days, backup withholding will begin and continue until the Payee furnishes his or her Payee's TIN to the Depositary. Note that writing "Applied For" on the Substitute Form W-9 means that the Payee has already applied for a TIN or that such Payee intends to apply for one in the near future. If Shares are held in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for certification of Taxpayer Identification Number on Substitute Form W-9 for information on which TIN to report. Exempt Payees (including, among others, all corporations and certain foreign individuals) are not subject to backup withholding and reporting requirements. To prevent possible erroneous backup withholding, an exempt Payee should write "Exempt" in Part 2 of Substitute Form W-9. See the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional instructions. In order for a nonresident alien or foreign entity to qualify as exempt, such person must submit a completed Form W-8 Certificate of Foreign Status, signed under penalty of perjury attesting to such exempt status. The form may be obtained from the Depositary. 12. Withholding On Non-United States Holders. Even if a Non-United States Holder (as defined below) has provided the required certification to avoid backup withholding, the Depositary will withhold United States federal income taxes equal to 31% of the gross payments payable to a Non-United States Holder or the holder's agent unless the Depositary determines that a reduced rate of withholding is available pursuant to a tax treaty or that an exemption from withholding is applicable because the gross proceeds are effectively connected with the conduct of a trade or business within the United States. For this purpose, a "Non-United States Holder" is any shareholder that for United States federal income tax purposes is not (a) a citizen or resident of the United States, (b) a corporation or partnership created or organized in or under the laws of the United States or any State or division thereof (including the District of Columbia), (c) an estate, the income of which is subject to United States federal income taxation regardless of the source of such income, or (d) a trust (i) the administration over which a United States court can exercise primary supervision and (ii) all of the substantial decisions of which one or more United States persons have the authority to control. Notwithstanding the foregoing, to the extent provided in United States Treasury Regulations, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such date, that elect to continue to be treated as United States persons also will not be Non-United States Holders. In order to obtain a reduced rate of withholding pursuant to a tax treaty, a Non-United States Holder must deliver to the Depositary before the payment a properly completed and executed IRS Form 1001. In order to obtain an exemption from withholding on the grounds that the gross proceeds paid pursuant to the Offer are effectively connected with the conduct of a trade or business within the United States, a Non-United States Holder must deliver to the Depositary a properly completed and executed IRS Form 4224. The Depositary will determine a shareholder's status as a Non-United States Holder and eligibility for a reduced rate of, or an exemption from, withholding by reference to outstanding certificates or statements concerning eligibility for a reduced rate of, or exemption from, withholding (e.g., IRS Form 1001 or IRS Form 4224) unless facts and circumstances indicate that reliance is not warranted. A Non-United States Holder may be eligible to obtain a refund of all or a portion of any tax withheld if the Non-United States Holder meets those tests described in Section 13 of the Offer to Purchase that would characterize the exchange as a sale (as opposed to a dividend) or is otherwise able to establish that no tax or a reduced amount of tax is due. NON-UNITED STATES HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF UNITED STATES FEDERAL INCOME TAX WITHHOLDING, INCLUDING ELIGIBILITY FOR A WITHHOLDING TAX REDUCTION OR EXEMPTION, AND THE REFUND PROCEDURE. A3-11 13. Lost, Stolen, Destroyed or Mutilated Certificates. If any certificate(s) representing Shares has been lost, stolen, destroyed or mutilated, the shareholder should promptly notify the Depositary by calling (718) 921-8200. The shareholder will then be instructed by the Depositary as to the steps that must be taken in order to replace the certificate. This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, stolen, destroyed or mutilated certificates have been followed. THIS LETTER OF TRANSMITTAL, PROPERLY COMPLETED AND DULY EXECUTED (OR FACSIMILE HEREOF), TOGETHER WITH CERTIFICATES REPRESENTING SHARES BEING TENDERED OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS, OR A NOTICE OF GUARANTEED DELIVERY, MUST BE RECEIVED PRIOR TO 5:00 P.M. EASTERN STANDARD TIME, ON THE EXPIRATION DATE. A3-12 PAYER'S NAME: AMERICAN STOCK TRANSFER & TRUST COMPANY, NEW YORK, NEW YORK PART 1--PLEASE PROVIDE YOUR Social security number TIN IN THE BOX AT RIGHT AND OR Employer CERTIFY BY SIGNING AND identification number DATING BELOW. SUBSTITUTE FORM W-9 Department of ---------------------- the Treasury -------------------------------------------------------- Internal PART 2--CERTIFICATION--Under penalties of perjury, I Revenue certify that: Service (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding. PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) -------------------------------------------------------- CERTIFICATION INSTRUCTIONS--You must PART 3 -- cross out item (2) above if you have AWAITING been notified by the IRS that you are TIN [_] currently subject to backup withhold- ing because of under reporting inter- est or dividends on your tax return. However, if after being notified by the IRS that you are subject to backup withholding, you received an- other notification from the IRS that you are no longer subject to backup withholding, do not cross out such item (2). THE INTERNAL REVENUE SERV- ICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP WITHHOLDING. SIGNATURE ______________ DATE _______ NAME (Please Print) ______________________________________ ADDRESS (Please Print) ______________________________________ ______________________________________ YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN THE SUBSTITUTE FORM W-9 INDICATING YOU HAVE APPLIED FOR, AND ARE AWAITING RECEIPT OF, YOUR TIN. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and that I mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I intend to mail or deliver an application in the near future). I understand that if I do not provide a taxpayer identification number to the payor, 31% of all payments made to me pursuant to this Offer shall be retained until I provide a tax identification number to the payor and that, if I do not provide my taxpayer identification number within sixty (60) days, such retained amounts shall be remitted to the IRS as backup withholding and 31% of all reportable payments made to me thereafter will be withheld and remitted to the IRS until I provide a taxpayer identification number. ------------------------------------ ------------------------------------ Signature Date NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY CASH PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. The Information Agent is: D.F. King & Co., Inc. 77 Water Street New York, New York 10005 Bankers and Brokers Call Collect: (212) 269-5550 or All Others Call Toll-Free: (800) 758-5880 A3-14 EX-99.A.4 5 BROKER, DEALER LETTER EXHIBIT 99.A.4 VICORP RESTAURANTS, INC. OFFER TO PURCHASE FOR CASH UP TO 2,000,000 OF ITS COMMON SHARES AT A PURCHASE PRICE OF $19.00 PER SHARE THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON WEDNESDAY, DECEMBER 22, 1999, UNLESS THE OFFER IS EXTENDED. November 23, 1999 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: VICORP Restaurants, Inc., a Colorado corporation (the "Company"), is offering to purchase up to 2,000,000 shares (or such lesser number of shares as are validly tendered) of its common stock, $.05 par value (the "Shares"), at $19.00 per Share, net to the seller in cash, without interest thereon, as specified by tendering shareholders, upon the terms and subject to the conditions set forth in the Offer to Purchase dated November 23, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer"). The Company will, upon the terms and subject to the conditions of the Offer, accept for payment, and thereby purchase, up to 2,000,000 Shares validly tendered and not withdrawn. All Shares acquired in the Offer will be acquired at the Purchase Price. In the event more than 2,000,000 Shares are validly tendered and not withdrawn, the Company will accept for payment, and thereby purchase, Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional shares) upon the terms and subject to the conditions of the Offer. Shares not purchased because of proration, will be returned at the Company's expense to the shareholders who tendered Shares. The Company reserves the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. THE OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. THE OFFER IS, HOWEVER, SUBJECT TO CERTAIN OTHER CONDITIONS. Upon the terms and subject to the conditions of the Offer, if at the Expiration Date more than 2,000,000 Shares (or such greater number of Shares as the Company may elect to purchase) are validly tendered and not withdrawn, the Company will buy Shares first from any person (an "Odd Lot Holder") who owned beneficially or of record as of the close of business on November 23, 1999 and who continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and so certified in the appropriate place in the Letter of Transmittal (and, if applicable, on a Notice of Guaranteed Delivery), who validly tender all their Shares, and then on a pro rata basis from all other shareholders who validly tender Shares (and do not withdraw Shares prior to the Expiration Date). For your information and for forwarding to those of your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents: 1. The Offer to Purchase dated November 23, 1999; 2. The Letter of Transmittal for your use and for the information of your clients (together with the accompanying Substitute Form W-9). Facsimile copies of the Letter of Transmittal may be used to tender Shares; 3. A letter to the shareholders of the Company dated November 23, 1999 from Charles R. Frederickson, Chairman of the Board and Chief Executive Officer of the Company; A4-1 4. The Notice of Guaranteed Delivery to be used to accept the Offer and tender Shares pursuant to the Offer if none of the procedures for tendering Shares set forth in the Offer to Purchase can be completed on a timely basis; 5. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with an instruction form provided for obtaining such clients' instructions with regard to the Offer; 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9; and 7. A return envelope addressed to American Stock Transfer & Trust Company, as Depositary for the Offer (the "Depositary"). YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON WEDNESDAY, DECEMBER 22, 1999, UNLESS THE OFFER IS EXTENDED. In order to take advantage of the Offer, a duly executed and properly completed Letter of Transmittal (or facsimile) including any required signature guarantees and any other required documents should be sent to the Depositary together with either certificate(s) representing tendered Shares or timely confirmation of their book-entry transfer, in accordance with the instructions set forth in the Offer to Purchase and the related Letter of Transmittal. Holders of Shares whose certificate(s) for Shares are not immediately available or who cannot deliver certificate(s) and all other required documents to the Depositary, or complete the procedures for book-entry transfer, prior to the Expiration Date must tender their Shares according to the procedure for guaranteed delivery set forth in Section 3 of the Offer to Purchase. No fees or commissions will be payable by the Company or any officer, director, shareholder, agent or other representative of the Company to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer (other than fees paid to D.F. King & Co., Inc., acting as Information Agent). The Company will, however, upon request, reimburse you for customary mailing and handling expenses incurred by you in forwarding any of the enclosed materials to your clients whose Shares held by you as a nominee or in a fiduciary capacity. The Company will pay any stock transfer taxes applicable to its purchase of Shares, except as otherwise provided in the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to D.F. King & Co., Inc., as Information Agent, 77 Water Street, New York, New York 10005, Bankers and Brokers Call Collect: (212) 269-5550, or all others call toll-Free: (800) 758-5880. Requests for additional copies of the enclosed materials may be directed to the Information Agent at the address and telephone number set forth above. Very truly yours, VICORP RESTAURANTS, INC. NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS AN AGENT OF THE COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. A4-2 EX-99.A.5 6 LETTER FROM BROKERS TO CUSTOMERS EXHIBIT 99.A.5 VICORP RESTAURANTS, INC. OFFER TO PURCHASE FOR CASH UP TO 2,000,000 OF ITS COMMON SHARES AT A PURCHASE PRICE OF $19.00 PER SHARE THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 5:00 P.M., EASTERN STANDARD TIME, ON WEDNESDAY, DECEMBER 22, 1999, UNLESS THE OFFER IS EXTENDED. November 23, 1999 To Our Clients: Enclosed for your consideration are the Offer to Purchase dated November 23, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") in connection with the offer by VICORP Restaurants, Inc., a Colorado corporation (the "Company"), to purchase up to 2,000,000 shares (or such lesser number of common shares as are validly tendered) of its common stock, $.05 par value (the "Shares"), at $19.00 per Share, net to the seller in cash, without interest thereon, as specified by tendering shareholders, upon the terms and subject to the conditions of the Offer. The Company will, upon the terms and subject to the conditions of the Offer, accept for payment, and thereby purchase, up to 2,000,000 Shares validly tendered and not withdrawn. All Shares acquired in the Offer will be acquired at the Purchase Price. In the event more than 2,000,000 Shares are validly tendered and not withdrawn, the Company will accept for payment, and thereby purchase, Shares, other than Odd Lots, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional shares) upon the terms and subject to the conditions of the Offer. Shares not purchased because of proration will be returned at the Company's expense to the shareholders who tendered Shares. The Company reserves the right, in its sole discretion, to purchase more than 2,000,000 Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, if at the Expiration Date more than 2,000,000 Shares (or such greater number of Shares as the Company may elect to purchase) are validly tendered and not withdrawn, the Company will buy Shares first from any person (an "Odd Lot Holder") who owned beneficially or of record as of the close of business on November 23, 1999, and who continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and so certified in the appropriate place in the attached Instruction Form (and, if applicable, on a Notice of Guaranteed Delivery), who validly tenders all its Shares and then on a pro rata basis from all other shareholders who validly tender Shares (and do not withdraw such Shares prior to the Expiration Date). A TENDER OF YOUR SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD THEREOF AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER YOUR SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions of the Offer. Please note the following: 1. Shares will be tendered at $19.00 per Share, as indicated in the attached Instruction Form, net to the seller in cash, without interest. 2. The Offer is not conditioned on any minimum number of Shares being tendered. The Offer is, however, subject to certain other conditions set forth in the Offer to Purchase. A5-1 3. The Offer, proration period and withdrawal rights will expire at 5:00 p.m., Eastern Standard Time, on Wednesday, December 22, 1999, unless the Offer is extended. 4. The Offer is for 2,000,000 Shares, of the Shares outstanding as of November 23, 1999. 5. The Board of Directors of the Company has approved the Offer. However, none of the Company, its Board of Directors, the Information Agent or the Depositary makes any recommendation to shareholders as to whether to tender or refrain from tendering their Shares. Shareholders must individually make the decision whether to tender Shares and, if so, how many Shares to tender. 6. Tendering shareholders will not be obligated to pay any brokerage fees or commissions or solicitation fees to the Information Agent, Depositary or the Company or, except as set forth in the Letter of Transmittal, stock transfer taxes on the transfer of Shares pursuant to the Offer. If (i) you owned beneficially or of record as of the close of business on November 23, 1999, and continue to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares; (ii) you instruct us to tender on your behalf all such Shares prior to the Expiration Date; and (iii) you complete the section entitled "Odd Lots" in the attached Instruction Form, the Company, upon the terms and subject to the conditions of the Offer, will accept all such Shares for purchase before proration, if any, of the purchase of other Shares validly tendered. If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing, detaching and returning to us the attached Instruction Form. An envelope to return your Instruction Form to us is enclosed. If you authorize us to tender your Shares, all such Shares will be tendered unless otherwise indicated on the attached Instruction Form. PLEASE FORWARD YOUR INSTRUCTION FORM TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER. As described in the Offer to Purchase, if more than 2,000,000 Shares (or greater number of Shares as the Company may elect to purchase) have been validly tendered and not withdrawn prior to the Expiration Date, the Company will accept for payment and therefore purchase tendered Shares on the basis set forth below: 1. First, all Shares validly tendered and not withdrawn prior to the Expiration Date by any Odd Lot Holder who: (a) tenders all Shares owned beneficially or of record by the Odd Lot Holder (tenders of less than all Shares owned by an Odd Lot Holder will not qualify for this preference); and (b) completes the box captioned "Odd Lots" in the attached Instruction Form and, if applicable, on the Notice of Guaranteed Delivery; and 2. Second, after purchase of all of the foregoing Shares, all other Shares validly tendered and not withdrawn prior to the Expiration Date, on a pro rata basis (adjusted downward to avoid acceptance for payment of fractional Shares) as described in the Offer to Purchase. The Offer is being made solely pursuant to the Offer to Purchase and the related Letter of Transmittal and is being made to all holders of Shares. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares residing in any jurisdiction in which the making of the Offer or its acceptance would not be in compliance with the securities laws of any jurisdiction. A5-2 INSTRUCTION FORM INSTRUCTIONS FOR TENDER OF SHARES OF VICORP RESTAURANTS, INC. The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase dated November 23, 1999 (the "Offer to Purchase") and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") in connection with the offer by VICORP Restaurants, Inc., a Colorado corporation (the "Company"), to purchase up to 2,000,000 (or such lesser number of shares as are validly tendered) of its common shares, $.05 par value (the "Shares"), at $19.00 per Share, net to the seller in cash, without interest thereon, as specified by tendering shareholders, upon the terms and subject to the conditions of the Offer. This will instruct you to tender to the Company, on (our) (my) behalf, the number of Shares indicated below (or if no number is indicated below, all Shares) which are beneficially owned by (us) (me) and registered in your name, upon terms and subject to the conditions of Offer. NUMBER OF SHARES TO BE TENDERED: SHARES* ODD LOTS [_]By checking this box the undersigned represents that the undersigned owned beneficially or of record as of the close of business on November 23, 1999 and continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and is tendering all of such Shares. * Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered. THE METHOD OF DELIVERY OF THIS DOCUMENT IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY. SIGN HERE: __________________________ Signature(s): _______________________ Print Name(s): ______________________ Address(es): ________________________ Telephone Number: ___________________ Taxpayer Identification or Social Security Number: ____________ A5-3 EX-99.A.6 7 PRESS RELEASE PRESS RELEASE EXHIBIT 99.A.6 Contact: Investor Relations 303-296-2121 Fax: 303-672-2668 FOR IMMEDIATE RELEASE TENDER OFFER FOR $38 MILLION OF COMMON STOCK LAUNCHED BY VICORP RESTAURANTS, INC. DENVER, CO, November 23, 1999 -- In a move designed to provide shareholders with an opportunity to obtain additional liquidity for their common stock, VICORP Restaurants, Inc. (NASDAQ: VRES) today announced it has launched a tender offer for up to 2,000,000 shares of its outstanding common stock for $19.00 in cash per share. If more than 2,000,000 shares are tendered, VICORP will accept shares on a pro rata basis, although tendering shareholders who own less than 100 shares of stock will not be subject to proration. The determination that VICORP's common shareholders should be given the opportunity to obtain additional liquidity for their common stock was in large part a response to shareholders who, over the past several years, expressed to management a desire for additional liquidity. In response to these concerns, shareholders who tender their shares of common stock will now have the opportunity to obtain cash. The details concerning the terms and conditions of the tender offer are set forth in an Offer to Purchase and related materials which are being forwarded to shareholders of record. Shareholders in whose names their common stock is registered may tender their shares directly according to the instructions in the Offer to Purchase and accompanying materials. Shareholders who hold their common stock through a securities firm, trust company or other nominee, should receive the above materials from the nominee. These shareholders may then instruct the nominee, which is the registered holder on the books of VICORP, to tender their common shares on their behalf. Interested persons may obtain documentation and information regarding the exchange offer from VICORP's information agent for the offer, D.F. King & Co., Inc., telephone (800) 758-5880. VICORP Restaurants, Inc. operates family style restaurants under the names Village Inn and Bakers Square and franchises restaurants under the Village Inn name. As of November 22, 1999, there were 8,875,076 shares of common stock outstanding. On November 22, 1999 the last reported sales price for the common stock was $17.44. Statements included in this press release which are not historical in nature are forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements regarding VICORP's future business prospects, plans, objectives, stock prices, expectations and intentions are subject to certain risks, uncertainties and other factors that could cause actual results to differ materially from those projected or suggested in the forward-looking statements, including, but not limited to those contained in the VICORP's Schedule 13E-4 filed on November 23, 1999. The Offer to Purchase, a letter of transmittal, and other materials are attached as exhibits to the Schedule 13E-4. a6-1 EX-99.A.7 8 NOTICE OF GUARANTEED DELIVERY EXHIBIT 99.A.7 NOTICE OF GUARANTEED DELIVERY FOR TENDER OF COMMON SHARES OF VICORP RESTAURANTS, INC. This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if certificates evidencing common shares, $0.05 par value (the "Shares"), of VICORP Restaurants, Inc., a Colorado corporation (the "Company"), are not immediately available, or if the procedure for book-entry transfer set forth in the Offer to Purchase dated November 23, 1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as amended or supplemented from time to time, together constitute the "Offer") cannot be completed on a timely basis or time will not permit all required documents, including a properly completed and duly executed Letter of Transmittal (or facsimile thereof), to reach the Depositary prior to the Expiration Date (as defined in the Offer to Purchase). This Notice of Guaranteed Delivery, properly completed and duly executed, may be delivered by hand, mail or facsimile transmission to the Depositary. See Section 3 of the Offer to Purchase. TO: AMERICAN STOCK TRANSFER & TRUST COMPANY, DEPOSITARY By Mail and Hand: AMERICAN STOCK TRANSFER & TRUST COMPANY 40 Wall Street, 46th Floor New York, New York 10005 Telephone: (718) 921-8200 For Eligible Institutions Only: Facsimile: (718) 234-5001 DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. DELIVERIES TO THE COMPANY WILL NOT BE FORWARDED TO THE DEPOSITARY AND THEREFORE WILL NOT CONSTITUTE VALID DELIVERY. DELIVERIES TO THE BOOK-ENTRY TRANSFER FACILITY WILL NOT CONSTITUTE VALID DELIVERY TO THE DEPOSITARY. This Notice of Guaranteed Delivery form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal is required to be guaranteed by an Eligible Institution (as defined in the Offer to Purchase) under the instructions thereto, the signature guarantee must appear in the applicable space provided in the signature box on the Letter of Transmittal. A7-1 Ladies and Gentlemen: The undersigned hereby tenders to the Company, upon the terms and subject to the conditions set forth in the Offer to Purchase and the related Letter of Transmittal, receipt of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. ODD LOTS To be completed ONLY if Shares are being tendered by or on behalf of a person owning beneficially or of record as of the close of business on November 23, 1999 and who continues to own, beneficially or of record, as of the Expiration Date, an aggregate of fewer than 100 Shares. The undersigned either (check one box): [_]was the beneficial or record owner of, as of the close of business on November 23, 1999, and continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares, all of which are being tendered; or [_]is a broker, dealer, commercial bank, trust company, or other nominee that (a) is tendering, for the beneficial owner(s) thereof, Shares with respect to which it is the record holder, and (b) believes, based upon representations made to it by such beneficial owner(s), that each such person was the beneficial or record owner of, as of the close of business on November 23, 1999, and continues to own beneficially or of record as of the Expiration Date, an aggregate of fewer than 100 Shares and is tendering all of such Shares. Signature(s): _________________________________________________ Name(s) of Record Holder(s): _____________________________________________ (Please type or print) Certificates Nos. (if available): _______________________________________________ Address: ______________________________________________________ ________________________________________________________ Area Code and Telephone No.: )_______________________________________________ If Shares will be delivered by book-entry transfer, provide the following information: Account Number: _______________________________________________ Date: _________________________________________________________ A7-2 DELIVERY GUARANTEE (NOT TO BE USED FOR A SIGNATURE GUARANTEE) THE UNDERSIGNED, A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER ENTITY WHICH IS A MEMBER IN GOOD STANDING OF THE SECURITIES TRANSFER AGENTS' MEDALLION PROGRAM OR A BANK, BROKER, DEALER, CREDIT UNION, SAVINGS ASSOCIATION OR OTHER ENTITY WHICH IS AN "ELIGIBLE GUARANTOR INSTITUTION," AS SUCH TERM IS DEFINED IN RULE 17Ad-15 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (EACH OF THE FOREGOING CONSTITUTING AN "ELIGIBLE INSTITUTION"), GUARANTEES THE DELIVERY TO THE DEPOSITARY OF THE SHARES TENDERED HEREBY, IN PROPER FORM FOR TRANSFER, OR A CONFIRMATION THAT THE SHARES TENDERED HEREBY HAVE BEEN DELIVERED PURSUANT TO THE PROCEDURE FOR BOOK- ENTRY TRANSFER SET FORTH IN THE OFFER TO PURCHASE INTO THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY, TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF) AND ANY OTHER REQUIRED DOCUMENTS, ALL WITHIN THREE (3) NASDAQ TRADING DAYS OF THE DATE HEREOF. The Eligible Institution that completes this form must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal and certificates representing Shares to the Depositary within the time period set forth herein. Failure to do so could result in a financial loss to such Eligible Institution. Name of Firm: _________________________________________________ Address: ______________________________________________________ ________________________________________________________ Area Code and Telephone No.: ________________________________________________ AUTHORIZED SIGNATURE Signature: ____________________________________________________ Name: _________________________________________________________ (Please type or print) Title: ________________________________________________________ Date: _________________________________________________________ NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. CERTIFICATES FOR SHARES SHOULD BE SENT WITH THE LETTER OF TRANSMITTAL. A7-3 EX-99.A.8 9 SUBSTITUTE FORM W-9 EXHIBIT 99.A.8 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Guidelines for Determining the Proper Identification Number to Give the Payer.--Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - ------------------------------------- -------------------------------------
Give the SOCIAL SECURITY For this type of account: number of-- - ------------------------------------------------ 1. An individual's account The individual 2. Two or more individuals The actual owner of (joint account) the account or, if combined funds, the first individual on the account(1) 3. Husband and wife (joint The actual owner of account) the account or, if joint funds, either person(1) 4. Custodian account of a The minor(2) minor (Uniform Gift to Minors Act) 5. Adult and minor (joint The adult or, if account) the minor is the only contributor, the minor(1) 6. Account in the name of The ward, minor, or guardian or committee incompetent for a designated ward, person(3) minor, or incompetent person 7.a. The usual revocable The grantor- savings trust account trustee(1) (grantor is also trustee) b. So-called trust account The actual owner(1) that is not a legal or valid trust under State law 8. Sole proprietorship The owner(4) account - ------------------------------------------------ ------
Give the EMPLOYER IDENTIFICATION For this type of account: number of-- ------ 9. A valid trust, estate, The legal entity or pension trust (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, charitable, The organization or educational organization account 12. Partnership account The partnership held in the name of the business 13. Association, club, or The organization other tax-exempt organization 14. A broker or registered The broker or nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments
(1) List names and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List names and circle the name of the legal trust, estate, or pension trust. Note: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 Page 2 Obtaining a Number If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service and apply for a number. Payees Exempt from Backup Withholding Payees specifically exempted from backup withholding on ALL payments include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a), or an individual retirement plan. . The United States or any agency or instrumentality thereof. . A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . An international organization or any agency, or instrumentality thereof. . A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. . A real estate investment trust. . A common trust fund operated by a bank under section 584(a). . An exempt charitable remainder trust, or a non-exempt trust described in section 4947(a)(1). . An entity registered at all times under the Investment Company Act of 1940. . A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. . Payments of tax-exempt interest (including exempt-interest dividends under section 852). . Payments described in section 6049(b)(5) to nonresident aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest dividends, and patronage dividends, that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. Privacy Act Notice.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. Penalties (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. (4) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to include any portion of an includible payment for interest, dividends or patronage dividends in gross income and such failure is due to negligence, a penalty of 20% is imposed on any portion of an underpayment attributable to that failure. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. EX-99.B 10 AMENDED AND RESTATED CREDIT AGREEMENT EXHIBIT 99.B $40,000,000 CREDIT AGREEMENT U.S. $40,000,000 AMENDED AND RESTATED CREDIT AGREEMENT Dated as of December 19, 1997 By and Among VICORP RESTAURANTS, INC. as the Borrower and NATIONSBANK OF TEXAS, N.A. as the Agent for the Lenders and as a Lender and U.S. BANK NATIONAL ASSOCIATION, D/B/A COLORADO NATIONAL BANK as a Lender TABLE OF CONTENTS ----------------- Page ---- ARTICLE I DEFINITIONS AND ACCOUNTING TERMS..................1 1.01 Certain Defined Terms ...............................1 1.02 Computation of Time Periods ........................11 1.03 Accounting Terms; Fiscal Periods ...................11 1.04 Other Definitional Provisions.......................11 ARTICLE II THE FACILITIES AND COMMITMENTS..................11 2.01 The Facilities......................................12 2.02 The Advance Commitment..............................12 2.03 The Letter of Credit Commitment.....................12 2.04 Fees................................................12 2.05 Reduction of the Commitment.........................12 2.06 Payments and Computations...........................12 2.07 Increased Capital or Costs and Reduced Return.......13 2.08 Interest Rate Contracts.............................14 ARTICLE III THE ADVANCE FACILITY...........................14 3.01 The Advances........................................14 3.02 Making the Advances.................................15 3.03 Conversion or Continuation of Advances..............16 3.04 Additional Provisions Applicable to Eurodollar Rate Advances.......................................17 3.05 Notes; Repayment....................................19 3.06 Interest............................................19 3.07 Additional Interest on Eurodollar Rate Advances.....20 3.08 Pre-payments........................................20 3.09 Maximum Interest Rate...............................21 3.10 Interest Recapture..................................21 3.11 Extension of Maturity...............................22 ARTICLE IV THE LETTER OF CREDIT FACILITY...................22 4.01 The Letters of Credit...............................22 4.02 Amounts and Terms...................................22 4.03 Conditions..........................................22 4.04 Issuing Letters of Credit...........................23 4.05 Paying under Letters of Credit......................23 4.06 Reimbursement Obligations...........................23 4.07 Compensation for Letters of Credit..................24 4.08 Sharing of Payments.................................24 4.09 Documentation.......................................25 4.10 Indemnification; Exoneration........................25 4.11 Termination of Letters of Credit; Cash Collateral...26 ARTICLE V CONDITIONS OF EXTENSIONS OF CREDIT...............26 5.01 Conditions Precedent to Initial Extension of Credit..............................................26 5.02 Conditions Precedent to Each Extension of Credit, Conversion or Continuation..........................26 ARTICLE VI REPRESENTATIONS AND WARRANTIES..................27 6.01 Representations and Warranties of the Borrower......27 ARTICLE VII COVENANTS OF THE BORROWER......................29 7.01 Affirmative Covenants...............................29 7.02 Negative Covenants..................................32 7.03 Financial Covenants.................................36 ARTICLE VIII EVENTS OF DEFAULT.............................37 8.01 Events of Default...................................37 ARTICLE IX MISCELLANEOUS...................................39 9.01 Amendments, Etc.....................................39 9.02 Notices, Etc........................................39 9.03 No Waiver; Remedies.................................40 9.04 Payments Set Aside..................................40 9.05 Costs, Expenses and Taxes...........................40 9.06 Right of Set-Off....................................41 9.07 Sharing of Payments.................................42 9.08 Indemnification.....................................42 9.09 Change in Accounting Principles.....................43 9.10 The Agent's Performance of Defaulted Acts...........43 9.11 Binding Effect; Assignments; Participations.........43 9.12 CHOICE OF LAW.......................................44 9.13 CONSENT TO JURISDICTION.............................44 9.14 WAIVER OF JURY TRIAL................................44 9.15 Term................................................45 9.16 Execution in Counterparts...........................45 9.17 Lenders' Creation of Security Interest..............45 ARTICLE X THE AGENT........................................45 10.01 Appointment........................................45 10.02 Agent's Reliance. Etc..............................45 10.03 NationsBank and Affiliates.........................46 10.04 Lender Credit Decision.............................46 10.05 Indemnification....................................46 10.06 Successor Agent....................................47 10.07 Invalidated Payments...............................47 EXHIBITS & SCHEDULES - -------------------- Exhibit A - Form of Notice of Borrowing Exhibit B - Form of Notice of Conversion/Continuation Exhibit C - Form of Revolving Loan Note Exhibit D - Form of Request for Letters of Credit Exhibit E - Form of Opinion of Counsel to the Borrower Exhibit F - List of Closing Documents Schedule 6.01(a) - Tradenames Schedule 7.02(a) - Permitted Existing Liens. Schedule 7.02(b) - Permitted Existing Debt Schedule 7.02(h) - Permitted Dispositions AMENDED AND RESTATED CREDIT AGREEMENT This Amended and Restated Credit Agreement is made as of December 19, 1997, by and among VICORP Restaurants, Inc., a Colorado corporation with an office located at 400 West 48th Avenue, P.O. Box 16601, Denver, Colorado 80216 (the "Borrower"), the banks or other financial institutions listed on the signature pages hereof (such banks or other financial institutions and their respective successors and assigns being referred to collectively as the "Lenders"), and NationsBank of Texas, N.A., a national banking association ("NationsBank"), as agent for the Lenders (in such capacity, the "Agent") (said Amended and Restated Credit Agreement, as the same may be amended, modified or supplemented from time to time, being hereafter referred to as the "Amended and Restated Agreement"). RECITALS -------- WHEREAS, the Borrower, the Agent and the Lenders are party to that certain Credit Agreement dated as of October 31, 1996 (as amended, the "Existing Agreement"); and WHEREAS, the Borrower has requested various modifications to the Existing Agreement, including, without limitation, an increase in the amount of the available credit and an extension of the maturity therefor; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrower, the Lenders and the Agent agree that the Existing Agreement is hereby amended and restated in its entirety as follows: ARTICLE I DEFINITIONS AND ACCOUNTING TERMS SECTION 1.01 Certain Defined Terms. As used in this Amended and Restated Agreement, the following capitalized terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural form of the terms defined): "Adjusted Consolidated EBITDAR" means, for any period with respect to the Borrower and its subsidiaries, the sum of the amounts for such period, of (i) Operating Income, plus (ii) depreciation, amortization and other non-cash charges deducted in computing operating income, plus (iii) Consolidated Rental Payments. "Adjusted Debt" means, as of the last day of any fiscal quarter, with respect to the Borrower and its subsidiaries, the sum of (i) Consolidated Funded Debt, plus (ii) Capital Lease Obligations, minus (iii) the aggregate outstanding principal balance of any subordinated debt, plus (iv) the product of Operating Lease expense for the four fiscal quarters ending on the date of determination times eight. "Advance" means an advance by any Lender to the Borrower pursuant to Article III, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each of which shall be 1 a "Type" of Advance). "Advance Commitment" has the meaning specified in Section 2.02. "Advance Facility" has the meaning specified in Section 2.01. "Affiliate" means, with respect to any Person, anyother Person controlled by, controlling or under common control with such Person, whether such control be direct or indirect. All of the Borrower's officers, shareholders holding in excess of five percent (5%) of any class of capital stock of the Borrower, directors, subsidiary corporations, joint ventures and partners shall be deemed to be the Borrower's Affiliates for purposes of this Amended and Restated Agreement. "Aggregate Commitment" means $40,000,000, as such amount may be reduced from time to time pursuant to the terms of this Amended and Restated Agreement. "Aggregate Outstandings" means, at any time, the sum of(i) the aggregate principal amount of the Advances outstanding at such time, plus (ii) the aggregate Letter of Credit Obligations at such time. "Alternate Base Rate" means, for any day, the greater of (a) the sum of the Federal Funds Rate plus 0.5%, or (b) the annual interest rate most recently announced by Agent as its prime rate (or, if the Person then acting as Agent under this Amended and Restated Agreement is not a bank organized under the Laws of the United States or any State, then the rate announced by NationsBank of Texas, N.A. as its prime rate) in effect at its principal office, automatically fluctuating upward and downward with and as specified in each announcement without special notice to Borrower or any other Person (which prime rate may not necessarily represent the lowest or best rate actually charged to a customer). "Applicable Commitment Fee" means, on any day, thecommitment fee percentage based on the ratio of debt to capitalization, calculated as set forth in the definition of "Applicable Margin", as follows: Applicable Ratio of debt to capitalization Commitment Fee Percentage ----------------------------------------------------------- Greater than or equal to 0.20 to 1.0 0.375% Less than 0.20 to 1.0 0.250% "Applicable Lending Office" means, with respect to each Lender, such Lender's Domestic Lending Office, in the case of a Base Rate Advance, and such Lender's Eurodollar Lending Office, in the case of a Eurodollar Rate Advance. "Applicable Margin" means, on any day, the interestmargin over the Eurodollar Rate, based on a ratio of debt to capitalization, as follows: Applicable Margin for Ratio of debt to capitalization Eurodollar Rate Advances 2 -------------------------------------------------------- Greater than or equal to 0.30 to 1.0 1.625% Less than 0.30 to 1.0 but 1.500% greater than or equal to 0.20to 1.0 Less than 0.20 to 1.0 but 1.250% greater than or equal to 0.15 to 1.0 Less than 0.15 to 1.0 1.000% For purposes of determining the Applicable Margin, (i) the ratio of debt to capitalization shall be the ratio of (i) the sum of (A) Consolidated Funded Debt, plus (B) Capital Lease Obligations of the Borrower and its subsidiaries, to (ii) the sum of (x) Consolidated Funded Debt, plus (y) Consolidated Net Worth, plus (z) Capital Lease Obligations of the Borrower and its subsidiaries, and shall be calculated quarterly as of the last day of the fiscal quarter for which the most recent quarterly financial statements have been delivered pursuant to Section 7.01(b), and shall apply to all Advances made on or after the date such financial statements are delivered, until recalculated in accordance with this paragraph. If Borrower fails to furnish Agent any such financial statements (or the related compliance certificate) when required pursuant to Section 7.02(b), then the highest applicable margin identified above shall apply to all subsequent Advances until Borrower furnishes the required financial statements and compliance certificate. The initial calculation as of the Closing Date shall be based upon the financial statements dated as of July 31, 1997. "Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C. 101 et seq.), as amended from time to time. "Base Rate Advance" means an Advance that bears interest as provided in Section 3.06(a). "Benefit Plan" means an employee benefit plan as defined in Section 3(35) of ERISA (other than a Multi-employer Plan) in respect of which the Borrower or any ERISA Affiliate is, or within the immediately preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA. "Borrowing" means a borrowing consisting of one or more Advances of the same Type made on the same day by the Lenders. "Business Day" means a day of the year on which banks are not required or authorized to close in Dallas, Texas, and if the applicable Business Day relates to any Eurodollar Rate Advance, a day of the year on which dealings are carried on in the London interbank market. "Capital Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of such Person. "Capital Lease Obligations" means, as applied to any Person, the obligations of such Person as lessee under leases that are Capital Leases. "Commitment" means, with respect to each Lender at any 3 time, such Lender's Pro Rata Share of the Aggregate Commitment at such time. "Consolidated Capital Expenditures" means, for anyperiod, the aggregate of all Permitted Asset Acquisitions and other expenditures (whether paid in cash or accrued as liabilities during that period and including that portion of Capital Leases that is capitalized on the consolidated balance sheet of the Borrower and its subsidiaries) by the Borrower or any of its subsidiaries during such period that, in conformity with GAAP, are required to be included in the property, plant and equipment or similar fixed asset accounts in the consolidated balance sheet of the Borrower and its subsidiaries (including equipment which is purchased simultaneously with the trade-in of existing equipment owned by the Borrower or any such subsidiary to the extent of the gross amount of such purchase price less the book value (net of accumulated depreciation) of the equipment being traded in at such time), but excluding expenditures made in connection with the replacement or restoration of assets, to the extent reimbursed or financed from insurance proceeds paid on account of the loss of or damage to the assets being replaced or restored or from awards of compensation arising from the taking by condemnation or eminent domain of such assets being replaced. "Consolidated Fixed Charges" means, for any period, (i) consolidated gross cash payments of interest expense (including the interest component of Capital Leases) of the Borrower and its subsidiaries, including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit, all as determined in conformity with GAAP, plus (ii) Consolidated Rental Payments for such period, plus (iii) all scheduled principal payments required to be made by the Borrower or any of its subsidiaries during such period with respect to any Debt. "Consolidated Funded Debt" means, as at any date of determination, all interest bearing indebtedness, obligations and other liabilities of the Borrower and its subsidiaries for borrowed money or evidenced by bonds, debentures, acceptances, notes or other similar instruments (whether such interest arises as a result of accrual or accretion). "Consolidated Net Worth" means, as at any date of determination, the amount by which consolidated total assets of the Borrower and its subsidiaries, determined in conformity with GAAP, exceed consolidated total liabilities of the Borrower and its subsidiaries, determined in conformity with GAAP. "Consolidated Rental Payments" means, for any period,the aggregate amount of all rents paid or accrued (net of sublease rents paid or accrued) under all Operating Leases of the Borrower or any of its consolidated subsidiaries as lessee, as determined in conformity with GAAP. "Consolidated Tangible Net Worth" means at any time, the sum of (i) Consolidated Net Worth, at such time, minus (ii) the aggregate amount, at such time (on a consolidated basis for the Borrower and its subsidiaries), of any intangible assets, including, without limitation, patents, trademarks, service marks, good will, rights and claims against carriers and shippers, trade names, rights to refunds and indemnification, and any other asset that would 4 be classified as an intangible under GAAP other than leasehold rights. "Contaminant" means any waste, pollutant, hazardoussubstance, toxic substance, hazardous waste, special waste, petroleum or petroleum-derived substance or waste, or any constituent of any such substance or waste. "Conversion Date" means, with respect to any Advance, the date that such Advance, if a Base Rate Advance, is converted into a Eurodollar Rate Advance, or, if a Eurodollar Rate Advance, is converted into a Base Rate Advance, in either case in accordance with the procedures described in Section 3.03. "Costs and Expenses" has the meaning specified in Section 9.05. "Debt" means, as applied to any Person, (i) indebtedness for borrowed money of such Person, (ii) obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (iii) obligations of such Person to pay the deferred purchase price of property or services, except trade accounts payable and accrued expenses arising in the ordinary course of business but only if and so long as the same are payable on available trade terms, (iv) Capital Lease Obligations of such Person, (v) obligations of such Person under direct or indirect guaranties in respect of, and obligations (contingent or otherwise) to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, indebtedness or obligations of others of the kinds referred to in clauses (i) through (iv) above, and (vi) liabilities of such Person in respect of unfunded vested benefits under Benefit Plans. "Default" means an event which with the lapse of time or the giving of notice or both would constitute an Event of Default. "Domestic Lending Office" means, with respect to each Lender, the office of such Lender specified as such Lender's "Domestic Lending Office" on the signature pages hereof or such other office as such Lender may from time to time specify to the Borrower and the Agent. "DOL" means the United States Department of Labor and any Person succeeding to the functions thereof. "Eligible Interest Rate Contract" has the meaning specified in Section 2.08. "ERISA" means the Employee Retirement Income Security Act of 1974, any amendments thereto, any successor statute, and any regulations or guidance promulgated thereunder. "ERISA Affiliate" means any (i) corporation which is a member of the same controlled group of corporations (within the meaning of Section 414(b) of the IRC) as the Borrower, (ii) partnership or other trade or business (whether or not incorporated) under common control (within the meaning of Section 414(c) of the IRC) with the Borrower, or (iii) member of the same affiliated service group (within the meaning of Section 414(m) of the IRC) as the Borrower, any corporation described in clause (i) above or any partnership or trade or business described in clause (ii) above. "Eurocurrency Liabilities" has the meaning assigned to 5 that term in Regulation D of the Board of Governors of the Federal Reserve System, as in effect from time to time. "Eurodollar Lending Office" means, with respect to each Lender, the office of such Lender specified as such Lender's "Eurodollar Lending Office" on the signature pages hereof, or such other office as such Lender may from time to time specify to the Borrower and the Agent. "Eurodollar Rate" means, for any Eurodollar Rate Advance for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar Rate Advance for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; provided, however, that if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates. "Eurodollar Rate Advance" means an Advance which bears interest as provided in Section 3.06(b). "Eurodollar Rate Reserve Percentage" means, with respect to each Lender, for any Interest Period for any Eurodollar Rate Advance, the reserve percentage applicable during such Interest Period (or if more than one such percentage shall be so applicable, the daily average of such percentages for those days in such Interest Period during which any such percentage shall be so applicable), with respect to such Lender, under regulations issued from time to time by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement), if any, for such Lender, with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period. "Event of Default" has the meaning specified in Section 8.01. "Existing Agreement" has the meaning specified in the Recitals. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it. 6 "Final Order" has the meaning specified in Section 9.08(a). "GAAP" means generally accepted accounting principles set forth in the rules, regulations, statements, opinions and pronouncements of the American Institute of Certified Public Accountants and the Financial Accounting Standards Board (or agencies with similar functions and of comparable stature and authority within the accounting profession), which are applicable to the circumstances as of the date of determination. "Governmental Acts" has the meaning specified in Section 4.10(a). "Governmental Authority" means any nation or government, any federal, state, city, town, municipality, county, local or other political subdivision thereof or thereto and any department, commission, board, bureau, instrumentality, agency or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. "Indemnified Parties" has the meaning specified in Section 9.08(a). "Interest Period" means, for each Eurodollar Rate Advance, a period of one (1), two (2), three (3), or six (6) months, as the Borrower may select, upon notice received by the Agent not later than noon (Dallas time) on the third Business Day prior to the first day of such period, and commencing on the date of such Advance, the date of continuation of such Advance pursuant to Section 3.03 or the date of conversion of a Base Rate Advance pursuant to Section 3.03; provided, however, that: (i) the aggregate principal amount of all Advances having Interest Periods ending after any Principal Repayment Date shall not exceed the principal amount of all Advances permitted to be outstanding after giving effect to the principal payments to be made on or prior to such Principal Repayment Date; (ii) the Borrower may not select any Interest Period that ends after the Maturity Date; (iii) Interest Periods commencing on the same date for Advances shall be of the same duration; and (iv) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day, provided, however, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such interest Period shall occur on the next preceding Business Day. "Interest Period Expiration Date" means the last day of any Interest Period for any Eurodollar Rate Advance. "Interest Rate Contracts" means interest rate swap agreements, interest rate collar agreements, options on any of the foregoing, or any other agreements or arrangements designed to provide protection against fluctuations in interest rates. 7 "IRC" means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, any successor statute and any regulations or guidance promulgated thereunder. "IRS" means the Internal Revenue Service and any Person succeeding to the functions thereof. "Letter of Credit" means any letter of credit issued under this Amended and Restated Agreement upon the application of, and for the account of, the Borrower. "Letter of Credit Application" means, with respect to a Letter of Credit, such form of application therefor and form of reimbursement agreement therefor (whether in a single or several documents) as the Agent may employ in the ordinary course of its business for its own account without requirement of collateral security. "Letter of Credit Commitment" has the meaning specified in Section 2.03. "Letter of Credit Facility" has the meaning specified in Section 2.01. "Letter of Credit Fee" has the meaning specified in Section 4.07. "Letter of Credit Obligations" means, at any time, the sum of (i) the aggregate Reimbursement Obligations at such time, plus (ii) the maximum aggregate amount available for drawing under Letters of Credit at such time. "Letter of Credit Rate" has the meaning specified in Section 4.07. "Lien" means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, security arrangement, security interest, encumbrance for the payment of money, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever. "Loan Documents" means this Amended and Restated Agreement, the Notes, and each of the other instruments, documents and agreements executed and/or delivered by the Borrower in connection herewith and therewith (including, without limitation, Letter of Credit Applications). "Majority Lenders" means those Lenders whose Pro Rata Shares aggregate 66 2/3%. "Maturity Date" means February 28, 2001. "Maximum Amount" and "Maximum Rate" respectively mean, for a Lender, the maximum non-usurious amount and the maximum non-usurious rate of interest that, under applicable law, such Lender is permitted to contract for, charge, take, reserve or receive on the Obligations. "Multiemployer Plan" means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Borrower or any ERISA Affiliate is a party and to which more than one employer is obligated to make contributions. 8 "NationsBank Agreement" means the $5,000,000 Credit Agreement between the Borrower and NationsBank, dated as of October 31, 1996, as amended. "Net Equity Issuance Proceeds" means the net cash proceeds received by the Borrower or any of its subsidiaries from the issuance and sale of equity securities. "Note" has the meaning specified in Section 3.05. "Notice of Borrowing" has the meaning specified in Section 3.02(a). "Notice of Continuation or Conversion" has the meaning specified in Section 3.03(b). "Obligations" means and includes all loans, advances, debts, liabilities, obligations, covenants and duties owing to the Agent or any of the Lenders from the Borrower of any kind or nature, present or future, arising under any of the Loan Documents, whether or not for the payment of money, whether arising by reason of an extension of credit, opening of a letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising and the performance obligations of the Borrower under any Eligible Interest Rate Contracts. The term "Obligations" includes, without limitation, the principal amount of all Advances and Reimbursement Obligations, interest, charges, expenses, fees, attorneys' and paralegals' fees and any other sums chargeable to the Borrower under this Amended and Restated Agreement. "Operating Income" means earnings before interest expenses, taxes and extraordinary gains and losses, calculated in accordance with GAAP. "Operating Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee which is not a Capital Lease. "PBGC" means the Pension Benefit Guaranty Corporation and any Person succeeding to the functions thereof. "Permitted Asset Acquisition" means (a) any acquisition in any fiscal year by the Borrower from any of the Borrower's franchisees of the franchise granted by the Borrower to such franchisee and all or substantially all of the assets of such franchisee associated with such franchise, (b) any acquisition by the Borrower of all or substantially all of the assets of any Person, other than a subsidiary of the Borrower, in any fiscal year, and (c) any acquisition by the Borrower of the capital stock or ownership interests of any other Person in any fiscal year, provided that the aggregate consideration paid by the Borrower in connection with all acquisitions permitted pursuant to clauses (a), (b) and (c) above in such fiscal year may not exceed $10,000,000, and shall be included in Consolidated Capital Expenditures for such fiscal year. "Permitted Existing Debt" means the Debt of the Borrower or any of its subsidiaries reflected on Schedule 7.02(b). "Permitted Existing Liens" means the Liens against property of the Borrower or any of its subsidiaries reflected on Schedule 7.02(a). 9 "Permitted Franchisee Guarantees" means any guarantee by the Borrower of obligations of any of the Borrower's franchisees arising in connection with the operation or maintenance of such franchisee's franchise so long as the aggregate amount of all such franchisee obligations guaranteed by the Borrower at any time does not exceed $10,000,000. "Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. "Plan" means an employee pension benefit plan that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the IRC as to which the Borrower or any ERISA Affiliate may have any liability. "Principal Repayment Date" means any date on which an installment of the aggregate outstanding principal amount of the Advances is due under the Notes. "Pro Rata Share" means, with respect to any Lender, the percentage specified on the signature pages hereto or as hereafter specified in the documentation governing any assignments of such Lender's Commitment. "Rate Adjustment Period" means a period (i) commencing on the first day of the month next succeeding the date that the Agent receives internal financial statements acceptable to it demonstrating that the Borrower has maintained, for two (2) consecutive fiscal quarters, the Required Rate Adjustment Level, and (ii) continuing for so long as the Borrower continues to maintain such Required Rate Adjustment Level. "Reimbursement Obligation" has the meaning specified in Section 4.06. "Reportable Event" means any of the events described in Section 4043 of ERISA or the regulations issued thereunder. "Request for Letters of Credit" has the meaning specified in Section 4.04. "Required Rate Adjustment Level" means a ratio of Adjusted Consolidated EBITDAR to Consolidated Fixed Charges, measured as of the end of the most recently ended fiscal quarter for the period of four fiscal quarters ending on such date, of at least 2.25 to 1. "SEC" means the Securities and Exchange Commission and any successor agency. "Single Employer Plan" means a Plan maintained by the Borrower or any ERISA Affiliate for employees of the Borrower or such ERISA Affiliate. "Taxes" means, for any Person, taxes, assessments or other governmental charges or levies imposed upon it, its income, or any of its properties, franchises or assets. "Termination Date" means the earliest to occur of (i) the Maturity Date, (ii) the termination in whole of the Commitments pursuant to Section 8.01, or (iii) the 10 termination in whole of the Advance Commitment pursuant to Section 2.05. "Termination Event" means (i) with respect to a Benefit Plan, a Reportable Event, or (ii) the withdrawal of the Borrower or any ERISA Affiliate from a Benefit Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or (iii) the imposition of an obligation on the Borrower or any ERISA Affiliate under Section 4041 of ERISA to provide affected parties written notice of intent to terminate a Benefit Plan in a distress termination described in Section 4041(c) of ERISA, or (iv) the institution of proceedings to terminate a Benefit Plan by the PBGC, or (v) any other event or condition that might constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan, or (vi) the partial or complete withdrawal of the Borrower or any ERISA Affiliate from a Multi-employer Plan. "Unfunded Liabilities" means, (i) in the case of a Single Employer Plan, the amount,if any, by which the present value of all vested nonforfeitable benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the most recent valuation date for such Plan, and (ii) in the case of a Multiemployer Plan, the withdrawal liability of the Borrower or any ERISA Affiliate under such Plan. "Unused Commitment" means, at any time, the excess of the Aggregate Commitment at such time over the Aggregate Outstandings at such time. SECTION 1.02 Computation of Time Periods. In this Amended and Restated Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding." SECTION 1.03 Accounting Terms; Fiscal Periods. Except as otherwise permitted pursuant to Section 9.09 all accounting terms not specifically defined herein shall be construed in accordance with GAAP. All references in this Amended and Restated Agreement to any fiscal period shall refer to a fiscal period of the Borrower, unless otherwise specified. SECTION 1.04 Other Definitional Provisions. References to "Sections", "Articles", "Schedules" and "Exhibits" shall be to Sections, Articles, Schedules and Exhibits, respectively, of this Amended and Restated Agreement unless otherwise specifically provided. ARTICLE II THE FACILITIES AND COMMITMENTS SECTION 2.01 The Facilities. On and subject to the terms and conditions hereinafter set forth each Lender severally agrees to extend credit and other financial accommodations of the kind described below to the Borrower, from time to time, on any Business Day during the period from the date hereof until the Termination Date by (i) making Advances to the Borrower pursuant to Article III (the "Advance Facility"); and (ii) issuing Letters of Credit for the account of the Borrower pursuant to Article IV (the "Letter of Credit Facility"). 11 SECTION 2.02 The Advance Commitment. The credit extended by the Lenders by making Advances under the Advance Facility shall be in an aggregate principal amount of Advances not to exceed at any time outstanding the excess of the Aggregate Commitment over the Letter of Credit Obligations outstanding at such time, as such amount may be reduced pursuant to Section 2.05, during the period from the date hereof to the Termination Date (the "Advance Commitment"). SECTION 2.03 The Letter of Credit Commitment. The credit extended by the Lenders by issuing Letters of Credit under the Letter of Credit Facility shall be in an aggregate amount of Letter of Credit Obligations outstanding at any time not to exceed the lesser of (a) $10,000,000 and (b) the excess of the Aggregate Commitment over the aggregate principal amount of Advances outstanding at such time, as such amount may be reduced pursuant to Section 2.05, during the period from the date hereof to the Termination Date (the "Letter of Credit Commitment"). SECTION 2.04 Fees. The Borrower agrees to pay (i) an extension fee to the Lenders and an annual administrative fee to NationsBank, for its own account, each as described in the fee letter agreement dated November 26, 1997, and (ii) to NationsBank, for its own account and the account of the Lenders, as applicable, the Letter of Credit fees described in Section 4.07. The Borrower also agrees to pay to the Agent, for the account of each Lender, a commitment fee on such Lender's Pro Rata Share of the average daily Unused Commitment from the date of this Amended and Restated Agreement until the Termination Date equal to the Applicable Commitment Fee per annum. Such commitment fee shall be payable on the last day of each January, April, July and October during the term of this Amended and Restated Agreement, and on the Termination Date. SECTION 2.05 Reduction of the Commitment. The Borrower shall have the right, upon at least thirty (30) Business Days' notice to the Agent, to terminate in whole or reduce in part the Aggregate Commitment by an amount not exceeding the Unused Commitment, each such reduction to be allocated among the unused portions of the Advance Commitment and the Letter of Credit Commitment, as the Borrower shall specify, in accordance with each Lender's Pro Rata Share thereof; provided, however, that each partial reduction shall be in the amount of $1,000,000 and in integral multiples of $1,000,000 in excess of that amount. SECTION 2.06 Payments and Computations. (a) The Borrower shall make each payment hereunder by wire transfer of immediately available funds not later than Noon (Dallas time) on the day when due in United States Dollars to the Agent, for the account of the Lenders, at the Agent's address referred to in Section 9.02. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest or commitment fees ratably (other than amounts payable pursuant to Section 2.07, 3.07, or 9.05(b)) to the Lenders for the account of their respective Applicable Lending office, and like funds relating to the payment of any other amount payable to any Lender to such Lender for the account of its Applicable Lending office, in each case to be applied in accordance with the terms of this Amended and Restated Agreement. (b) The Borrower hereby authorizes each Lender, if and 12 to the extent payment owed to such Lender is not made when due hereunder, to charge from time to time against any or all of the Borrower's accounts with such Lender any amount so due, or, upon notice to the Borrower, to make Base Rate Advances in the amount of and in payment of such amounts. (c) All computations of interest on Base Rate Advances shall be made by the Agent, on the basis of a year of 365 or 366 days, as the case may be, for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. All computations of interest on Eurodollar Rate Advances and of fees (including, without limitation, all computations of interest pursuant to Section 3.07) shall be made by the Agent, on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error. (d) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or fees, as the case may be; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the immediately preceding Business Day. (e) Unless the Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Agent may assume that the Borrower has made such payment in full to the Agent on such date and the Agent may, in reliance upon such assumption, cause to be distributed to each Lender on such date an amount equal to the amount then due such Lender. If and to the extent the Borrower shall not have so made such payment in full to the Agent, each Lender shall repay to the Agent forthwith on demand such amount distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Agent, at the Federal Funds Rate. SECTION 2.07 Increased Capital or Costs and Reduced Return. (a) If, due to either (i) the introduction of or any change (other than any change by way of imposition or increase of reserve requirements included in the Eurodollar Rate Reserve Percentage) in or in the interpretation of any law or regulation; or (ii) the compliance with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), there shall be any increase in the cost to any Lender of agreeing to make or making, funding or maintaining Eurodollar Rate Advances, by an amount deemed by such Lender to be material, then the Borrower shall, from time to time, promptly following demand by such Lender (with a copy of such demand to the Agent), pay to the Agent, for the account of such Lender, such additional amount or amounts as will compensate such Lender for such increased cost. (b) If after the date hereof, any Lender shall have determined that the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change 13 therein, or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender (or its Applicable Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's capital as a consequence of its obligations hereunder to a level below that which such Lender could have achieved but for such adoption, change or compliance by an amount deemed by such Lender to be material, then the Borrower shall, from time to time, promptly following demand by such Lender (with a copy of such demand to the Agent), pay to the Agent, for the account of such Lender, such additional amount or amounts as will compensate such Lender for such reduction. (c) Each Lender agrees to promptly notify the Borrower and Agent of any event of which such Lender has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to this Section 2.07 and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to such Lender. A certificate of the Lender claiming compensation under this Section 2.07 and setting forth the additional amount or amounts to be paid to such Lender hereunder, submitted to the Borrower and the Agent contemporaneously, shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods. SECTION 2.08 Interest Rate Contracts. At any time a Lender may, but shall have no obligation to, enter into Interest Rate Contracts with respect to the Advances, provided that the notional amount for all such Interest Rate Contracts in effect at any time shall not exceed $40,000,000 in the aggregate. The Borrower and the Lender entering into an Interest Rate Contract shall give written notice to the Agent, at least three (3) Business Days prior to entering into any Interest Rate Contract, specifying the term thereof and the notional amount thereof. The Agent shall, within two (2) Business Days of such notice, notify the applicable Lender and the Borrower whether the sum of (A) the aggregate notional amount of all Interest Rate Contracts then in effect plus (B) the notional amount of the proposed Interest Rate Contract, is within the limit set forth above, and if the sum of the notional amounts described in clauses (A) and (B) above is within such limit at such time, then the proposed Interest Rate Contract shall be deemed an "Eligible Interest Rate Contract" (whether or not the aggregate notional amount subsequently exceeds such limit). ARTICLE III THE ADVANCE FACILITY SECTION 3.01 The Advances. Each Lender severally agrees, on the terms and conditions hereinafter set forth, to make Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date in an amount not to exceed the excess of (i) such Lender's Pro Rata Share of the Advance Commitment at such time over (ii) the aggregate principal 14 amount of all Advances made by such Lender and outstanding at such time. Each Advance made by a Lender shall be in an amount not less than such Lender's Pro Rata Share of $250,000. Each Borrowing shall consist of Advances made on the same day by the Lenders, each Lender's Advance as part of a Borrowing to be in an amount equal to its Pro Rata Share of such Borrowing. Within the limits of the Advance Commitment in effect from time to time, the Borrower may borrow pursuant to this Section 3.01, prepay pursuant to Section 3.08, and reborrow under this Section 3.01. SECTION 3.02 Making the Advances. (a) Each Borrowing shall be made on notice by the Borrower to the Agent, given not later than 12:00 noon (Dallas time) (i) in the case of a Borrowing comprised of Base Rate Advances, on the date of the proposed Borrowing; and (ii) in the case of a Borrowing comprised of Eurodollar Rate Advances, on the third Business Day prior to the date of the proposed Borrowing; provided, however, that (x) in the case of any requested Borrowing to be comprised of Base Rate Advances, the proceeds of which Base Rate Advances are to be applied toward the Borrower's Reimbursement Obligations under a Letter of Credit, the notice effecting such request may be given at or prior to 2:00 P.M. on the date of the drawing giving rise to such Reimbursement Obligation for a Borrowing comprised of Base Rate Advances to be made on such date in the amount of such Reimbursement Obligation; and (y) if a Default or an Event of Default has occurred and is continuing, the Borrower shall not be entitled to request Borrowings comprised of Eurodollar Rate Advances and the Lenders shall not be required to make any Advances. Each such notice of a borrowing (a "Notice of Borrowing") shall be by telephone, confirmed immediately in writing (whether by telecopy, telex, cable or otherwise), in substantially the form of Exhibit A, specifying therein the requested (i) date of such Borrowing (which shall be a Business Day); (ii) Type of Advances comprising such Borrowing; (iii) amount of such Borrowing; and (iv) Interest Period for such Advance in the case of a requested Borrowing comprised of Eurodollar Rate Advances. Promptly after receipt of a Notice of Borrowing under this Section 3.02 (or telephonic notice in lieu thereof), the Agent shall notify each Lender by telex, telecopy, telegram, telephone or other similar form of transmission of the proposed Borrowing, and in each case of a proposed Borrowing comprised of Eurodollar Rate Advances, of the applicable interest rate. Each Lender shall, before Noon (Dallas time) on the date of such Borrowing, make available to the Agent at its address referred to in Section 9.02, in same day funds, such Lender's Pro Rata Share of such Borrowing. After the Agent's receipt of such funds, and upon fulfillment of the applicable conditions set forth in Article V, the Agent will make same day funds available to the Borrower at the Agent's address referred to in Section 9.02 in an amount equal to the amount requested by the Borrower for such Borrowing on the date requested by the Borrower therefor. (b) Each Notice of Borrowing shall be irrevocable and binding on the Borrower. In the case of any Borrowing that the related Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure by the Borrower to fulfill, on or before the date specified in such Notice of Borrowing for such Borrowing, the applicable conditions set forth in Article V, including, without limitation, any loss, cost or expense incurred by reason of 15 the liquidation or reemployment of deposits or other funds acquired by such Lender to fund the Advance to be made by such Lender as part of such Borrowing when such Advance, as a result of such failure, is not made on such date. (c) Unless the Agent shall have received notice from a Lender prior to the date of any Borrowing that such Lender will not make available to the Agent such Lender's Pro Rata Share of such Borrowing, the Agent may assume that such Lender has made such portion available to the Agent on the date of such Borrowing in accordance with and to the extent provided in subsection (a) of this Section 3.02 and the Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount; provided, however, that if the Agent has received such notice from such Lender, the Agent may not make such assumption and may not make available to the Borrower on such date such corresponding amount. If and to the extent such Lender shall not have so made such Pro Rata Share available to the Agent, such Lender and the Borrower severally agree to repay to the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Agent, at the Federal Funds Rate for such day. If such Lender shall repay to the Agent such corresponding amount, such amount so repaid shall constitute such Lender's Advance as part of such Borrowing for purposes of this Amended and Restated Agreement. (d) The failure of a Lender to make the Advance to be made by it as part of any Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Advance on the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Advance to be made by such other Lender on the date of any Borrowing. SECTION 3.03 Conversion or Continuation of Advances. (a) The Borrower shall have the option (i) to convert at any time all or any part of the outstanding Base Rate Advances comprising the same Borrowing into one or more Eurodollar Rate Advances, each for an Interest Period commencing on the applicable Conversion Date; (ii) to convert on any Interest Period Expiration Date all of the outstanding Eurodollar Rate Advances comprising the same Borrowing into one or more Base Rate Advances; or (iii) to continue on any Interest Period Expiration Date all or any part of outstanding Eurodollar Rate Advances comprising the same Borrowing as one or more Eurodollar Rate Advances, each for an Interest Period commencing on such Interest Period Expiration Date; provided, however, that (A) if the Borrower shall not have exercised its options set forth in either clauses (ii) or (iii) of this Section 3.03(a) with respect to any Eurodollar Rate Advances comprising a Borrowing by delivery to the Agent of a Notice of Continuation or Conversion in accordance with the terms of Section 3.03(b), the Borrower shall be deemed to have irrevocably elected to convert such Eurodollar Rate Advances into Base Rate Advances on the Interest Period Expiration Date for such Advances, and (B) if a Default or an Event of Default has occurred and is continuing the Borrower shall not be entitled to convert Base Rate Advances or continue Eurodollar Rate Advances. (b) Each continuation or conversion of Advances pursuant to this Section 3.03 shall be made on notice by the 16 Borrower to the Agent given not later than Noon (Dallas time) on (i) in the case of the conversion of one or more Eurodollar Rate Advances into Base Rate Advances, the first Business Day prior to the date of the proposed conversion, and (ii) in every other instance, the third Business Day prior to the date of the proposed conversion or continuation. Each such notice of continuation or conversion (a "Notice of Continuation or Conversion") shall be by telephone, confirmed immediately in writing (whether by telecopy, telex, cable or otherwise), in substantially the form of Exhibit B, specifying therein the requested (i) date of such continuation or conversion (which shall be a Business Day); (ii) amount of the Advances to be converted or continued; (iii) nature of such conversion or continuation; and (iv) Interest Periods for such Advances, in the case of a conversion of one or more Base Rate Advances to a Eurodollar Rate Advance or a continuation of one or more Eurodollar Rate Advances. Promptly after receipt of a notice of Continuation or Conversion (or telephonic notice in lieu thereof), the Agent shall notify each Lender by telex, telecopy, telegram, telephone or other similar form of transmission, of the proposed continuation or conversion. (c) Each Notice of Continuation or Conversion shall be irrevocable and binding upon the Borrower. In the case of any Advance which the related Notice of Continuation or Conversion specifies is to be a Eurodollar Rate Advance, the Borrower shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result of any failure to fulfill on or before the date of the continuation or conversion specified in such Notice of Continuation or conversion for such Advance the applicable conditions set forth in Article V, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund such Advance when such Advance is not converted or continued, as the case may be, on such date. SECTION 3.04 Additional Provisions Applicable to Eurodollar Rate Advances. Anything in Section 3.02 or 3.03 above to the contrary notwithstanding: (a) If any Lender shall notify the Borrower (with a copy of such notice to the Agent) that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other Governmental Authority asserts that it is unlawful, for such Lender or its Eurodollar Lending Office to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain Eurodollar Rate Advances hereunder, the right of the Borrower to select Eurodollar Rate Advances for any Borrowing or to convert any Base Rate Advances to Eurodollar Rate Advances shall be suspended until such Lender shall notify the Borrower (with a copy of such notice to the Agent) that the circumstances causing such suspension no longer exist. Upon any Lender's giving of the notice to the Borrower referred to in this Section 3.04(a), the Borrower shall, upon at least one (1) Business Day's written notice to such Lender (with a copy of such notice to the Agent), or if permitted by applicable law no later than the date permitted thereby, in the Borrower's sole discretion, either (i) prepay, notwithstanding the provisions of Section 3.08 hereof, the principal amount of all outstanding Eurodollar Rate Advances of such Lender together with accrued interest thereon to the date of payment; or (ii) convert, notwithstanding the provisions of Section 3.03, all 17 Eurodollar Rate Advances of all Lenders then outstanding into Base Rate Advances. Upon any such prepayment or conversion of a Eurodollar Rate Advance, the Borrower shall reimburse the applicable Lender in respect thereof pursuant to Section 9.05(b). (b) If the Agent shall, on the date of the making of any requested Borrowing comprised of Eurodollar Rate Advances, the continuation pursuant to Section 3.03 of any Eurodollar Rate Advances or the conversion pursuant to Section 3.03 of any Base Rate Advances, notify the Borrower that it is unable, for any reason whatsoever, to obtain timely information for determining the Eurodollar Rate for such Advances, the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any Borrowing subsequently made, converted or continued shall be suspended until the Agent shall notify the Borrower that the circumstances causing such suspension no longer exist and each Advance requested to be converted into or made or continued as a Eurodollar Rate Advance shall be a Base Rate Advance. (c) If any Lender shall, at least one (1) Business Day prior to the date of the making of any requested Borrowing to be comprised of Eurodollar Rate Advances, the continuation pursuant to Section 3.03 of any Eurodollar Rate Advances or the conversion pursuant to Section 3.03 of any Base Rate Advances, notify the Borrower (with a copy of such notice to the Agent) that the Eurodollar Rate for such Advances will not adequately reflect the cost to such Lender of making or funding such Advances, the right of the Borrower to select Eurodollar Rate Advances for such Borrowing or any Borrowing subsequently made, converted or continued shall be suspended until such Lender shall notify the Borrower (with a copy of such notice to the Agent) that the circumstances causing such suspension no longer exist and each Advance by such Lender requested to be converted into or made or continued as a Eurodollar Rate Advance shall be a Base Rate Advance. (d) Any Taxes payable by the Agent or any Lender or ruled (by a Governmental Authority) payable by the Agent or any Lender in respect of any Loan Document shall, if permitted by law, be paid by the Borrower, together with interest and penalties, if any (except for (i) (1) Taxes imposed on or measured by the overall net income of the Agent or that Lender, (2) franchise or similar taxes of the Agent or that Lender, and (3) amounts requested to be withheld for Taxes pursuant to the last sentence of Section 3.04(f) and (ii) interest and penalties incurred as a result of the gross negligence or willful misconduct of the Agent or any Lender). The Agent or that Lender (through the Agent) shall notify the Borrower and deliver to the Borrower a certificate setting forth in reasonable detail the calculation of the amount of payable Taxes, which certificate is conclusive and binding (absent manifest error), and the Borrower shall promptly pay that amount to the Agent for its account or the account of that Lender, as the case may be. If the Agent or that Lender subsequently receives a refund of the Taxes paid to it by the Borrower, then the recipient shall promptly pay the refund to the Borrower. (e) The Borrower Agrees To Indemnify Each Lender Against, And Pay To It Upon Demand, Any Funding Losses, Costs or Expenses Described in Section 3.02(b), 3.03(c) or 9.05(b) With Respect To Eurodollar Rate Advances. The 18 provisions of and undertakings and indemnification set forth in this paragraph shall survive the satisfaction and payment of the Obligations and termination of this Amended and Restated Agreement. (f) Each Lender that is organized under the laws of any jurisdiction other than the United States of America or any State thereof (a) represents to the Agent and the Borrower that (i) no Taxes are required to be withheld by the Agent or the Borrower with respect to any payments to be made to it in respect of the Obligations and (ii) it has furnished to the Agent and the Borrower two duly completed copies of U.S. Internal Revenue Service Form 4224, Form 1001, Form W-8, or any other tax form acceptable to the Agent (wherein it claims entitlement to complete exemption from U.S. federal withholding tax on all interest payments under the Loan Papers), and (b) covenants to (i) provide the Agent and the Borrower a new tax form upon the expiration or obsolescence of any previously delivered form according to law, duly executed and completed by it, and (ii) comply from time to time with all laws with regard to the withholding tax exemption. If any of the foregoing is not true or the applicable forms are not provided, then the Borrower and the Agent (without duplication) may deduct and withhold from interest payments under the Loan Documents United States federal income tax at the full rate applicable under law. SECTION 3.05 Notes; Repayment. Each Lender's Advances shall be evidenced by a Revolving Loan Note executed by the Borrower and delivered to such Lenders pursuant to Article V (each such Revolving Loan Note, as the same may be amended, modified, substituted or supplemented from time to time being hereinafter referred to individually as a "Note" and collectively as the "Notes"), substantially in the form of Exhibit C, in an original principal amount equal to such Lender's Pro Rata Share of the maximum Advance Commitment on the date hereof. Unless the Termination Date shall have earlier occurred, the Borrower shall repay the principal amount of the Advances outstanding on the Maturity Date. SECTION 3.06 Interest. The Borrower shall pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount shall be paid in full, at the following rates specified below: (a) Base Rate Advances. If such Advance is a Base Rate Advance, at a rate per annum equal at all times to the Alternate Base Rate in effect from time to time, payable monthly in arrears on the last Business Day of each calendar month and on the date such Base Rate Advance shall be paid in full; provided, however, that any amount of principal which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to two percent (2.0%) per annum above the Alternate Base Rate in effect from time to time. (b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance, at a rate per annum equal at all times during any Interest Period for such Advance to the sum of the Applicable Margin plus the Eurodollar Rate for such Advance for such Interest Period, payable in arrears on the last day of such Interest Period; provided, however, that any amount of principal which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall bear 19 interest, from the date on which such amount is due until such amount is paid in full, payable on demand, at a rate per annum equal at all times to two percent (2.0%) per annum above the Alternate Base Rate in effect from time to time. (c) Default Interest. Notwithstanding anything to the contrary in Sections 3.06(a) and 3.06(b), effective upon the occurrence of an Event of Default and for as long thereafter as such Event of Default shall be continuing, all amounts outstanding under the Loan Documents shall bear interest at a rate per annum equal at all times to two percent (2.0%) per annum above the Alternate Base Rate in effect from time to time, payable on demand and, absent demand, at the times specified in Section 3.06(a) with respect to Base Rate Advances and at the times specified in Section 3.06(b) with respect to Eurodollar Rate Advances. (d) Rate Adjustment Periods. Notwithstanding anything to the contrary in Sections 3.06(a) and 3.06(b) but subject to Section 3.06(c) above, at all times during a Rate Adjustment Period, interest on each Eurodollar Rate Advance shall be at a rate of one-quarter of one percent (0.25%) below the rate that would otherwise be payable under Section 3.06(b), provided, however, that (A) no reduction in the interest rate applicable to any Eurodollar Rate Advance outstanding on the commencement of a Rate Adjustment Period shall take effect until such Eurodollar Rate Advance has been continued or converted pursuant to Section 3.03; (B) no reduction in the interest rate applicable to any Eurodollar Rate Advance shall reduce such rate below the sum of 1.00% plus the Eurodollar Rate for such Advance for such Interest Period; and (C) interest on any amount of principal which is not paid when due (whether at stated maturity, by acceleration or otherwise) shall continue to be paid at the rates otherwise specified in Section 3.06(a) or 3.06(b) for such past due amounts. SECTION 3.07 Additional Interest on Eurodollar Rate Advances. The Borrower shall pay to each Lender (or to the Agent for the account of such Lender) so long as such Lender shall be required under regulations of the Board of Governors of the Federal Reserve System to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency Liabilities, additional interest on the unpaid principal amount of each Eurodollar Rate Advance of such Lender, from the date of such Advance until such principal amount is paid in full, at an interest rate per annum equal at all times to the remainder obtained by subtracting (i) the Eurodollar Rate for the Interest Period for such Advance from (ii) the rate obtained by dividing such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such Lender for such Interest Period, payable on each date on which interest is payable on such Advance; provided that the Borrower shall only be responsible for reserve costs incurred by a Lender not more than 270 days prior to the date on which such Lender notifies the Borrower thereof. Such additional interest so notified to the Borrower (with a copy to the Agent) by such Lender shall be payable to such Lender (or to the Agent for the account of such Lender) on the dates specified for payment of interest for such Advance in Section 3.06. SECTION 3.08 Pre-payments. The Borrower may prepay the outstanding amount of any Advance in whole or in part with accrued interest to the date of such prepayment on the amount prepaid; provided, however, that (i) notice of any 20 prepayment of a Eurodollar Rate Advance must be given at least three (3) Business Days prior to the date of prepayment; (ii) notice of any prepayment of a Base Rate Advance must be given not later than 12:00 noon (Dallas time) on the date of prepayment; (iii) any prepayment of any Eurodollar Rate Advance shall be made on, and only on, the last day of an Interest Period for such Advance; and (iv) each partial prepayment shall be in a principal amount of $250,000 and integral multiples of $50,000 in excess of that amount and, if made after the Termination Date, shall be applied to the principal installments on each Lender's Note in the inverse order of their maturities. SECTION 3.09 Maximum Interest Rate. Regardless of any provision contained in any Loan Document or any document related thereto, it is the intent of the parties hereto that neither the Agent nor any Lender contract for, charge, take, reserve, receive or apply, as interest on all or any part of the Obligations any amount in excess of the Maximum Rate or the Maximum Amount or receive any unearned interest in violation of any applicable law, and, if the Lenders ever do so, then any excess shall be treated as a partial repayment or prepayment of principal and any remaining excess shall be refunded to the Borrower. In determining if the interest paid or payable exceeds the Maximum Rate, the Borrower and the Lenders shall, to the maximum extent permitted under applicable law, (a) treat all Borrowings as but a single extension of credit (and the Lenders and the Borrower agree that is the case and that provision in this Amended and Restated Agreement for multiple Borrowings is for convenience only), (b) characterize any nonprincipal payment as an expense, fee or premium rather than as interest, (c) exclude voluntary repayments or prepayments and their effects, and (d) amortize, prorate, allocate and spread the total amount of interest throughout the entire contemplated term of the Obligations. However, if the Obligations are paid in full before the end of their full contemplated term, and if the interest received for its actual period of existence exceeds the Maximum Amount, the Lenders shall refund any excess (and the Lenders may not, to the extent permitted by law, be subject to any penalties provided by any laws for contracting for, charging, taking, reserving or receiving interest in excess of the Maximum Amount). If the laws of the State of Texas are applicable for purposes of determining the "Maximum Rate" or the "Maximum Amount," then those terms mean the "indicated rate ceiling" from time to time in effect under Article 5069-1.04, Title 79, Revised Civil Statutes of Texas, as amended. The Borrower agrees that Chapter 15, Subtitle 79, Revised Civil Statutes of Texas, 1925, as amended (which regulates certain revolving credit loan accounts and revolving tri-party accounts), does not apply to the Obligations, other than Article 15.10(b). SECTION 3.10 Interest Recapture. If the designated interest rate applicable to any Borrowing exceeds the Maximum Rate, the interest rate on that the Borrowing is limited to the Maximum Rate, but any subsequent reductions in the designated rate shall not reduce the interest rate thereon below the Maximum Rate until the total amount of accrued interest equals the amount of interest that would have accrued if that designated rate had always been in effect. If at maturity (stated or by acceleration), or at final payment of the Notes, the total interest paid or accrued is less than the interest that would have accrued if the designated rates had always been in effect, then, at that time and to the extent permitted by applicable law, the Borrower shall pay an amount equal to the difference between 21 (a) the lesser of the amount of interest that would have accrued if the designated rates had always been in effect and the amount of interest that would have accrued if the Maximum Rate had always been in effect, and (b) the amount of interest actually paid or accrued on the Notes. SECTION 3.11 Extension of Maturity. If no Default or Event of Default exists, the Borrower may request one-year extensions of the then-existing Maturity Date by making such request to the Agent and each Lender between 90 and 60 days preceding each anniversary of the date of this Amended and Restated Agreement. The then-existing Maturity Date shall be extended for one year only if (a) the Agent and each Lender consent in writing to such extension within 30 days following the Borrower's request (with a failure to respond by the Agent or any Lender being deemed a denial of such consent by such party), and (b) the Borrower pays to the Agent, for the account of the Lenders, within 10 days after its receipt of such consent, an extension fee equal to one-eighth of one percent (1/8%) of the then-existing Aggregate Commitment. ARTICLE IV THE LETTER OF CREDIT FACILITY SECTION 4.01 The Letters of Credit. The Agent agrees, on the terms and conditions hereinafter set forth, to issue for the account of the Borrower one or more Letters of Credit in accordance with this Article IV, from time to time on any Business Day during the period from the date hereof to the Termination Date in an aggregate face amount not to exceed the excess of (a) the Letter of Credit Commitment at such time over (b) the Letter of Credit Obligations at such time. Within the limits of the Letter of Credit Commitment, the Borrower may obtain credit by having the Agent issue the Letters of Credit being requested by the Borrower at such time, pay its Obligations with respect to such Letters of Credit pursuant to Section 4.06, and again obtain credit by having the Agent issue Letters of Credit under this Section 4.01. SECTION 4.02 Amounts and Terms. The Agent shall not have any obligation to issue any Letter of Credit at any time if the aggregate maximum amount then available for drawing under Letters of Credit theretofore issued, after giving effect to the Letter of Credit requested hereunder, shall exceed any limit imposed by law or regulation upon the Agent. SECTION 4.03 Conditions. In addition to being subject to the satisfaction of the conditions contained in Article V, the obligation of the Agent to issue any Letter of Credit is subject to the satisfaction in full of the following conditions: (a) the proposed Letter of Credit (including, without limitation, the level of detail and specificity with respect to the documents, certificates and drafts to be presented thereunder) shall be reasonably satisfactory to the Agent as to form and content; (b) as of the date of issuance, no order, judgment or decree of any Governmental Authority shall purport by its terms to enjoin or restrain the Agent from issuing the Letter of Credit, and no law, rule or regulation applicable to the Agent and no request or directive (whether 22 or not having the force of law) from any Governmental Authority with jurisdiction over the Agent shall prohibit or request that the Agent refrain from the issuance of Letters of Credit generally or the issuance of that Letter of Credit; and (c) the proposed Letter of Credit shall be governed by The Uniform Customs and Practice for Documentary Credits, 1993 Revision, International Chamber of Commerce Publication No. 500, or any successor thereto, and, as to matters not covered thereby, shall be governed by the internal laws and decisions (as distinguished from conflict of laws principles) of the State of Texas. SECTION 4.04 Issuing Letters of Credit. (a) Letters of Credit shall be issued upon written notice by the Borrower to the Agent, given not later than 10:00 A.M. (Dallas time) on the second Business Day prior to the Business Day on which such Letters of Credit are requested to be issued, or such lesser time prior to the requested issuance date as is acceptable to the Agent. Each such notice (a "Request for Letters of Credit") shall be in substantially the form of Exhibit D hereto, specifying therein (i) the aggregate stated amount of the Letters of Credit requested, (ii) the effective date (which day shall be a Business Day) of issuance of such requested Letters of Credit, (iii) the date on which such requested Letters of Credit are to expire (which date shall be a Business Day no more than 18 months following such effective date and shall in no event be later than the Maturity Date unless the Borrower deposits with and pledges to the Agent cash or cash equivalent investments acceptable to the Agent in an amount equal to the face amount of such Letter of Credit as collateral security for the Borrower's Obligations in connection with such Letter of Credit), and (iv) the Person for whose benefit the requested Letters of Credit are to be issued. At the time such request is made, the Borrower shall also provide the Agent with completed and executed Letter of Credit Applications and copies of the forms the Letters of Credit which the Borrower has requested the Agent to issue. Each Request for Letters of Credit shall be irrevocable and binding on the Borrower. (b) Promptly after receipt of a Request for Letters of Credit together with all supporting documentation, the Agent shall notify each Lender by telex, telecopy, telegram, telephone or other similar form of transmission of the proposed issuance of Letters of Credit. Subject to the satisfaction of the terms and conditions of this Article IV and upon fulfillment of the applicable conditions set forth in Article V, the Agent shall, on the requested date, issue its Letter of Credit on behalf of the Borrower. SECTION 4.05 Paying under Letters of Credit. In determining whether to pay under any Letter of Credit, the Agent shall have no obligation other than to confirm that documents that appear to comply on their face with the requirements of such Letter of Credit have been delivered to it. SECTION 4.06 Reimbursement Obligations. The Borrower is obligated, and hereby unconditionally agrees, to pay in immediately available funds to the Agent the amount of each drawing made under each Letter of Credit on the date of such drawing (the obligation of the Borrower under this Section 4.06 with respect to any drawing being the "Reimbursement Obligation" with respect to such drawing). Any 23 Reimbursement Obligation with respect to any Letter of Credit that is not paid by the Borrower to the Agent with respect to a Letter of Credit at or prior to 1:00 P.M. (Dallas time) on the date of the drawing giving rise thereto shall bear interest, payable on demand, from the date of such drawing until repaid in full to the Agent at a rate per annum equal at all times to two and one-half percent (2.50%) per annum above the Alternate Base Rate in effect from time to time. In the event of any conflict between the terms of this Amended and Restated Agreement and any Letter of Credit Application the terms of this Amended and Restated Agreement shall control. SECTION 4.07 Compensation for Letters of Credit. (a) The Borrower agrees to pay to the Agent, for the benefit of each Lender, a letter of credit fee ("Letter of Credit Fee") with respect to each Letter of Credit issued under this Article IV, payable quarterly in arrears on the last day of each January, April, July and October and on the Termination Date, at a per annum rate equal to the Applicable Margin (the "Letter of Credit Rate"), based on the average daily undrawn available amount of such Letter of Credit during such quarter. (b) The Borrower shall, in addition, pay to the Agent for its own account with respect to each Letter of Credit issued hereunder (i) upon its issuance, a fronting fee, equal to one-eighth percent (1/8%) of its face amount, (ii) upon any drawing under such Letter of Credit, a negotiation fee with respect to such drawing equal in amount to $250, and (ii) upon any transfer of or amendment to such Letter of Credit, a transaction fee equal in amount to $100. (c) Notwithstanding the foregoing, effective immediately upon the occurrence of an Event of Default and for as long thereafter as such Event of Default shall be continuing, the Letter of Credit Rate shall be increased to three and one- eighth percent (3.125%) per annum, payable on demand and, absent demand, at the times specified in Section 4.07(a). SECTION 4.08 Sharing of Payments. Immediately upon the Agent's issuance of any Letter of Credit, the Agent shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Agent, without recourse or warranty, an undivided interest and participation (to the extent of such Lender's Pro Rata Share) in the Letter of Credit and all applicable rights of the Agent in the Letter of Credit, including rights to cash collateral pledged under Section 4.11 (other than rights to receive the fees provided for in the last sentence of Section 4.07(b)). If the Borrower does not timely pay any Reimbursement Obligation, the Agent is irrevocably authorized to fund the Reimbursement Obligation as a Base Rate Borrowing and the proceeds of the Base Rate Borrowing shall be advanced directly to the Agent to pay the Reimbursement Obligation. If the Borrower fails to reimburse the Agent as provided in Section 4.06 and funds are not advanced to satisfy the Reimbursement Obligation, the Agent shall promptly notify each Lender of the Borrower's failure, of the date and amount paid, and of each Lender's Pro Rata Share of the unreimbursed amount. Each Lender shall promptly and unconditionally make available to the Agent in immediately available funds its Pro Rata Share of the unpaid Reimbursement Obligation. Such funds are due and payable to the Agent before the close of business on (i) 24 the Business Day the Agent gives notice to each Lender of the Borrower's reimbursement failure if the notice is received by a Lender before 2:00 p.m. in the time zone where such Lender's Domestic Lending Office is located, or (ii) on the next succeeding Business Day after the Business Day the Agent gives notice to each Lender of the Borrower's reimbursement failure, if such notice is received after 2:00 p.m. All amounts payable by any Lender accrue interest at the Federal Funds Rate from the day the applicable draft or draw is paid by the Agent to (but not including) the date the amount is paid by the Lender to the Agent. SECTION 4.09 Documentation. Upon the request of any Lender, the Agent shall furnish to such Lender copies of any Letters of Credit, Letter of Credit Reimbursement Agreements, and applications for any Letter of Credit to which the Agent is party and such other documentation as may reasonably be requested by such Lender. SECTION 4.10 Indemnification; Exoneration. (a) In addition to amounts payable as elsewhere provided in this Article IV, and without limitation of the Borrower's obligations pursuant to Section 9.05, the Borrower hereby agrees to protect, indemnify, pay and save the Agent and each Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' and paralegals' fees) which the Agent or any of the Lenders may incur or be subject to as a consequence, direct or indirect, of the failure of the Agent to honor a drawing under any Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or defacto Governmental Authority (all such acts or omissions being hereinafter referred to collectively as "Governmental Acts"). (b) As among the Borrower, the Agent and any of the Lenders, the Borrower assumes all risks of the acts and omissions of, or misuse of any of the Letters of Credit by, the respective beneficiaries of such Letters of Credit. In furtherance and not in limitation of the foregoing, the Agent and the Lenders shall not be responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any Person in connection with the application for and issuance of any of the Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) the failure of the beneficiary of any Letter of Credit to comply fully with the conditions required in order to draw upon such Letter of Credit, other than conditions expressly stated in such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors in interpretation of technical terms; (vi) any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit or of the proceeds thereof; (vii) the misapplication by the beneficiary of a Letter of Credit of the proceeds of any drawing under such Letter of Credit; or (viii) any consequences arising from causes beyond the control of the Agent or any of the Lenders, including, without limitation, 25 any Government Acts. None of the above shall affect, impair, or prevent the vesting of the Agent's or any Lender's rights or powers under this Section 4.10. (c) In furtherance and extension, and not in limitation, of the specific provisions set forth above, any action taken or omitted by the Agent under or in connection with any of the Letters of Credit issued by the Agent or any related certificates, if taken or omitted in good faith shall not result in any liability of the Agent to the Borrower. SECTION 4.11 Termination of Letters of Credit; Cash Collateral. The Agent may, at any time upon or following the occurrence of an Event of Default at its sole option, request that the Borrower deposit with the Agent, and upon any such request the Borrower shall forthwith deposit with and pledge to the Agent, cash or cash equivalent investments acceptable to the Agent in an amount equal to the undrawn face amount of any Letters of Credit that remain outstanding from time to time thereafter as collateral security for the Borrower's Obligations in connection with such Letters of Credit. The right of the Agent to require, and the Obligation of the Borrower to provide, collateral security shall continue to exist notwithstanding the release of any other collateral security by the Agent or any of the Lenders at any time. If the Borrower does not immediately deposit such collateral security with the Agent upon any such request, the Agent is hereby irrevocably authorized by the Borrower to fund such collateral security by making a Base Rate Advance in the amount thereof and depositing the proceeds of such Advance in a cash collateral account with the Agent. ARTICLE V CONDITIONS OF EXTENSIONS OF CREDIT SECTION 5.01 Conditions Precedent to Initial Extension of Credit. The obligation of each Lender to make its Pro Rata Share of the initial extension of credit under this Amended and Restated Agreement (whether in the form of an Advance or a Letter of Credit) is subject to the following conditions precedent: (a) The Agent shall have received such documents, instruments and agreements in furtherance of the financing transaction contemplated in the Loan Documents, each in form and substance satisfactory to the Agent and its counsel, as the Agent shall reasonably request, including, without limitation, those described on the List of Closing Documents attached hereto as Exhibit F. (b) No law or regulation affecting the Agent's or any Lender's entering into the financing transaction contemplated by the Loan Documents shall impose upon the Agent or any of the Lenders any material obligation, fee, liability, cost, expense or damages. SECTION 5.02 Conditions Precedent to Each Extension of Credit, Conversion or Continuation. The obligation of each Lender to make any Advance, to issue any Letter of Credit, or to convert or continue any Advance as described in Section 3.03 on the occasion of each such extension of credit (including the initial extension of credit hereunder), conversion or continuation shall be subject to the further conditions precedent that on the date of such 26 extension of credit, conversion or continuation: (a) The following statements shall be true (and each of the giving of the applicable Notice of Borrowing, Request for Letter of Credit or Notice of Continuation or Conversion, as applicable, and the acceptance by the Borrower of the proceeds or other benefits of the requested extension of credit, conversion or continuation shall constitute a representation and warranty by the Borrower that on the date of such extension of credit, conversion or continuation such statements are true): (i) The representations and warranties contained in Section 6.01 are correct on and as of the date of such extension of credit, conversion or continuation before and immediately after giving effect to such extension of credit, conversion or continuation and to the application of the proceeds or other benefits thereof, as though made on and as of such date; and (ii) No event has occurred and is continuing, or would result from such extension of credit, conversion or continuation or from the application of the proceeds or other benefits thereof, that constitutes a Default or an Event of Default. (b) The Lenders shall have received such other approvals, opinions or documents as the Lenders may reasonably request. ARTICLE VI REPRESENTATIONS AND WARRANTIES SECTION 6.01 Representations and Warranties of the Borrower. The Borrower represents and warrants to the Agent and each Lender that the following statements are true, correct and complete as of the date of this Amended and Restated Agreement and as of the date of each reaffirmation thereof made pursuant to Section 5.02(a)(i): (a) The Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado, and is duly qualified to do business, and is in good standing as a foreign corporation, in each jurisdiction in which such qualification is necessary or proper in view of its business and operations or the ownership of its properties; (ii) does not own any material amount of capital stock of, or have any other material equity investment in, any Person other than its wholly-owned subsidiary, Vicorp Restaurants, Inc., a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and the Borrower's ownership of 100,004 shares of Preferred Stock issued by a single issuer in replacement of a subordinated debenture in the original principal amount of $10,000,000 and (iii) has not (nor has any subsidiary) used or transacted business under any other corporate or trade name in the past five years, except as disclosed on Schedule 6.01(a). (b) The execution, delivery and performance by the Borrower of the Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Borrower's charter or by-laws; or (ii) any law or any contractual restriction binding on or affecting the Borrower. 27 (c) No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by the Borrower of the Loan Documents. (d) The Loan Documents are legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. (e) The consolidated balance sheet of the Borrower and its subsidiaries as at July 31, 1997, and the related consolidated statement of income and retained earnings of the Borrower and its subsidiaries for the three fiscal quarters then ended, copies of which have been furnished to the Agent and each Lender, fairly present the financial condition of the Borrower and its subsidiaries on a consolidated basis as at such date and the results of the operations of the Borrower and its subsidiaries an a consolidated basis for the period ended on such date, all in accordance with GAAP consistently applied, and since July 31, 1997, there has been no material adverse change in such condition or operations, or in the financial condition or operations of the Borrower and its subsidiaries. (f) There is no pending or threatened action or proceeding affecting the Borrower or any of its subsidiaries before any Governmental Authority or arbitrator, which action or proceeding (i) may materially adversely affect the financial condition or operations of the Borrower and its subsidiaries on a consolidated basis or (ii) purports to affect the legality, validity or enforceability of any Loan Document. (g) Neither the Borrower nor any of its subsidiaries is in violation of (i) any applicable statute, regulation, rule, ordinance or permit of any Governmental Authority or (ii) any patent, patent application, copyright, trademark, trademark application, trade name, or license of any Governmental Authority, in each case, in any respect that may materially adversely affect the financial condition or operations of the Borrower and its subsidiaries on a consolidated basis. The Borrower possesses adequate licenses, permits and other governmental approvals and authorization and adequate patents, trademarks, copyrights, trade names and licenses to continue to conduct its business as heretofore conducted by it. (h) Neither the Borrower nor any of its subsidiaries is in default with respect to any note, indenture, loan agreement, mortgage, lease, deed or other similar agreement relating to the borrowing of monies to which it is a party or by which it is bound, which default may materially adversely affect the financial condition or operations of the Borrower or any of its subsidiaries. (i) All of the Borrower's and its subsidiaries' respective property, tangible and intangible, is free and clear of all Liens, except as specifically permitted by Section 7.02(a). (j) The Borrower and each of its subsidiaries have filed all Tax returns and other reports they are required by law to file and have paid all Taxes that are due and payable, other than those being contested in good faith by appropriate proceedings diligently conducted and for which adequate cash and financial reserves have been 28 established. (k) Without limiting the representations and warranties set forth in Section 6.01(g), neither the Borrower nor any of its subsidiaries has received notice to the effect or is otherwise aware that its operations are not in material compliance with all of the requirements of applicable federal, state and local environmental, health and safety statutes and regulations or the subject of or likely to become the subject of any federal or state investigation evaluating whether any remedial action is needed to respond to a release of any Contaminant into the environment, which non-compliance or remedial action could have a material adverse effect on the business, operations, properties, assets or condition (financial or otherwise) of the Borrower or any of its subsidiaries. (l) No Plan has any Unfunded Liabilities. Each Plan complies in all material respects with all applicable requirements of law and regulations; no Reportable Event has occurred with respect to any Plan; neither the Borrower nor any of its subsidiaries has withdrawn from any Plan or initiated steps to do so; and no steps have been taken to terminate any Plan. (m) None of the Borrower or any of its ERISA Affiliates maintains any employee welfare benefit plans within the meaning of Section 3(l) of ERISA that provides benefits to employees after termination of employment other than as required by Section 601 of ERISA. (n) The Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Board of Governors of the Federal Reserve System), and no proceeds of any extension of credit hereunder will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. ARTICLE VII COVENANTS OF THE BORROWER SECTION 7.01 Affirmative Covenants. The Borrower covenants to Agent and each Lender that, so long as any Obligation shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will, unless the Majority Lenders shall otherwise consent in writing: (a) Compliance with Laws, Etc. Comply, and cause each of its subsidiaries to comply, in all material respects with all applicable laws, rules, regulations, orders, ordinances and decrees, such compliance to include, without limitation, paying before the same become delinquent all Taxes, recordation charges, rates, dues, fees, fines, impositions, liabilities, obligations and encumbrances imposed upon it or upon any of its property except to the extent contested in good faith and with respect to which adequate (as determined by independent public accountants having a national reputation) reserves shall have been established. Without limiting the generality of the foregoing, the Borrower (i) will conduct, and will cause each of its subsidiaries to conduct, its business so as to comply in all material respects with all applicable environmental, health and safety laws and regulations in all jurisdictions in which it is or may at any time be doing 29 business, including, without limitation, the Federal Resource Conservation and Recovery Act, the federal Comprehensive Environmental Response, Compensation and Liability Act, the federal Clean Water Act, the federal Clean Air Act and the federal Occupational Safety and Health Act; and (ii) will establish, maintain and operate, and will cause each ERISA Affiliate to establish, maintain and operate, all Plans to comply in all material respects with the provisions of ERISA, IRC, all other applicable laws and all regulations and interpretations thereunder. (b) Reporting Requirements. Furnish to each Lender: (i) as soon as available and in any event within forty-five (45) days after the end of each fiscal quarter of the Borrower, consolidated (and, if the Borrower at any time has any operating subsidiaries, consolidating) balance sheets of the Borrower and its subsidiaries as of the end of such quarter consolidated (and, if the Borrower at any time has any operating subsidiaries, consolidating) statements of income and retained earnings of the Borrower and its subsidiaries for such quarter and for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, all in accordance with GAAP consistently applied, certified by the chief financial officer of the Borrower on behalf of the Borrower and, in the case of quarter- end statements with respect to which a review shall have been undertaken by public accountants, accompanied by a summary of the review report rendered by such accountants; (ii) as soon as available and in any event within ninety (90) days after the end of each fiscal year of the Borrower, a copy of the annual report for such year for the Borrower and its subsidiaries, containing consolidated financial statements for such year all in accordance with GAAP consistently applied, certified by independent public accountants having a national reputation in a manner acceptable to the Agent; (iii) together with the financial statements required to be delivered under Sections 7.01(b)(i) and (ii), a certificate of the president, chief financial officer or treasurer of the Borrower demonstrating compliance with the financial covenants set forth in Section 7.03 for and as at the end of such quarter or year, as applicable, setting forth the calculations made by such officer to determine such compliance, and certifying on behalf of the Borrower that no Default or Event of Default shall have occurred during such quarter or year, as applicable (or as of the end of such quarter or year, as applicable, in the case of a Default or Event of Default consisting of a breach of the financial covenants set forth in Section 7.03), or, if any Default or Event of Default shall have occurred for or during such quarter or year, as applicable, describing the nature thereof and the procedures that the Borrower shall have taken or proposes to take with respect thereto; (iv) as soon as possible and in any event within five (5) days after the occurrence of each Default, Event of Default or other development, financial or otherwise, which might materially adversely affect the business, properties or affairs of the Borrower or any of its subsidiaries or the ability of the Borrower to repay the Obligations, a statement of the chief financial officer of the Borrower setting forth details of such Default, Event of Default or other development and the action which the Borrower has taken and proposes to take with respect thereto; 30 (v) promptly after the sending or filing thereof, copies of all reports which the Borrower sends to any of its security holders, and copies of all reports and registration statements which the Borrower or any subsidiary files with the SEC or any national securities exchange; (vi) before the beginning of each fiscal year of the Borrower, financial and operations projections with respect to such fiscal year, including, without limitation, pro forma financial statements prepared on a basis consistent with the most recent financial statements delivered to the Lenders in accordance with Sections 7.01(b)(i) and (ii), all in such detail as the Agent may reasonably request; (vii) within two hundred seventy (270) days after the close of each fiscal year, a statement of the Unfunded Liabilities of each Plan, certified as correct, to the extent applicable, by any actuary enrolled under ERISA; (viii) as soon as possible and in any event within ten (10) days after the Borrower or any of its subsidiaries knows that any Reportable Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of the Borrower, describing such Reportable Event and the action which the Company proposes to take with respect thereto; (ix) as soon as possible and in any event within ten (10) days after receipt thereof by the Borrower or any of its subsidiaries, a copy of (i) any notice or claim to the effect that the Borrower or any such subsidiary is or may be liable to any Person as a result of the release by the Borrower, any of its subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the Borrower or any of its subsidiaries; provided, however, that the Borrower shall not be required to furnish to the Agent any such notice resulting from any routine OSHA or health inspection to which the Borrower or any of its subsidiaries is subject by virtue of its respective activities in the food service industry, unless any violation described in such notice might have a material adverse effect on the financial condition or operations of the Borrower or any subsidiary; and (x) such other information respecting the condition or operations, financial or otherwise, of the Borrower or any of its subsidiaries as the Agent may from time to time reasonably request, all in such detail as the Agent may reasonably request. (c) Preservation of Corporation Existence, Etc. Except as otherwise permitted under Subsection 7.02(d), preserve and maintain, and cause each of its subsidiaries to preserve and maintain, its corporate existence, rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified and in good standing, and cause each of its subsidiaries to qualify and remain qualified and in good standing, as a foreign corporation in each jurisdiction in which such qualification is necessary or proper in view of its business and operations or the ownership of its properties. 31 (d) Maintenance of Insurance. Maintain, and cause each of its subsidiaries to maintain, insurance with responsible and reputable insurance companies or associations in such amounts as are usually carried, and covering such risks as are ordinarily insured against, by Persons engaged in similar businesses and owning similar properties in the same general areas in which the Borrower and each such subsidiary operate; and comply, and cause each subsidiary to comply, with all conditions and requirements necessary to maintain such insurance in effect. (e) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its subsidiaries to maintain and preserve, all of its properties, necessary or useful in the proper conduct of its business, in good working order and condition, ordinary wear and tear excepted, and maintain all assets, permits, licenses, privileges, franchises, concessions, privileges, patents, trademarks, copyrights, and trade names necessary to conduct its business as heretofore conducted by it. (f) Visitation Rights. At any reasonable time and from time to time, permit the Lenders or any agent or representative thereof to visit and inspect any of the properties of the Borrower or any of its subsidiaries, to examine and make copies of and abstracts from the records and books of account of the Borrower or any of its subsidiaries, and to visit and discuss the affairs, finances and accounts of the Borrower or any of its subsidiaries with any of their respective officers or with any of those of their respective directors that are involved in the operations of the Borrower's or such subsidiary's business. (g) Maintenance of Records. Maintain, and cause each of its subsidiaries to maintain, books and records with respect to accounting matters in accordance with generally accepted accounting principles consistently applied and in detail sufficient to provide the Lenders the information required pursuant to Section 7.01(b). (h) Condemnation. Notify the Agent, immediately upon learning of the institution of any proceeding for the condemnation or other taking of all or any part of any of the Borrower's real property or interests in real property if the property or interests involved have a book value in excess of $1,000,000 (regardless of the value of the specific portion subject to such proceeding), of the pendency of such proceeding and keep the Agent reasonably informed with respect to such proceeding as it progresses. (i) Destruction of Real Property. Notify the Agent immediately of any material damage to or material loss or destruction of the Borrower's real property or interests in real property with a book value in excess of $1,000,000, setting forth the nature and extent of such destruction. (j) Use of Proceeds. The Borrower will use the proceeds of the Advances only to repay its obligations under the NationsBank Agreement, for working capital, capital expenditures and other general corporate purposes, and for Permitted Asset Acquisitions. SECTION 7.02 Negative Covenants. The Borrower covenants to Agent and each Lender that, so long as any Obligation shall remain unpaid or any Lender shall have any Commitment hereunder, the Borrower will not, unless the Majority Lenders shall otherwise consent in writing: 32 (a) Liens, Etc. (i) Enter into or suffer to exist, or permit any of its subsidiaries to enter into or suffer to exist, any arrangement that directly or indirectly prohibits the Borrower or any of its subsidiaries from creating or incurring any Lien upon or with respect to any of its property, other than the Loan Documents, leases that prohibit Liens on the property leased and documents governing transactions described in clause (a)(ii)(C) below that prohibit Liens on the property or asset which is the subject of such transaction; or (ii) Create or suffer to exist, or permit any of its subsidiaries to create or suffer to exist, any Lien (other than the interest of the lessor under any Operating Lease) upon or with respect to any of its property, whether now owned or hereafter acquired, or assign, or permit any of its subsidiaries to assign, any right to receive income, in each case to secure or provide for the payment of any Debt of any Person, other than: (A) Liens securing Taxes or the claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other like persons, which in any such case (1) are not delinquent or (2) are being contested diligently and in good faith, provided that in the latter case the Borrower or the applicable subsidiary has established adequate reserves therefor and that neither the Borrower's nor any subsidiary's title to and right to use its property is materially and adversely affected by the nonpayment of such Tax, claim or demand; (B) Permitted Existing Liens; (C) Liens existing on such property at the time of its acquisition (other than any such Liens created in contemplation of such acquisition), and Liens on fixed assets of the Borrower or any of its subsidiaries acquired, constructed or improved after the date hereof which are created contemporaneously with such acquisition, construction or improvement to secure the purchase price of such property or the cost of such construction or improvement, and Liens on fixed assets of the Borrower or any of its subsidiaries arising in connection with sale and leaseback transactions entered into by the Borrower or any of its subsidiaries after the date hereof; provided, however, that no Lien of the kind described in this clause (C) shall extend to or cover any property or asset of the Borrower or any subsidiary of the Borrower other than the property or asset so acquired or the construction or improvement so procured; and (D) any extension, renewal or replacement, in whole or in part of any of the Liens referred to in the foregoing clauses (A) through (C), inclusive; provided, however, that the amount of Debt secured by any such extension, renewal or replacement Lien shall not exceed the amount of such Debt secured immediately prior to such extension, renewal or replacement and such extended, renewed, or replaced Lien shall be limited to the property or assets covered by the Lien existing immediately prior to such extension, renewal or replacement; provided, however, that notwithstanding anything to the contrary in this Section 7.02(a), the aggregate amount of Debt of the Borrower or any of its subsidiaries (including, without limitation, Capital Lease Obligations of the 33 Borrower or any of its subsidiaries) secured by any of the Liens referred to in the foregoing clauses (B) and (C), plus all Guarantees permitted by Section 7.02(e) (whether or not secured) shall not at any time exceed $24,000,000. (b) Debt. (i) Prepay or permit any of its subsidiaries to prepay, any of its Debt, other than (A) the Obligations and (B) Debt other than as described in the foregoing clause (i)(A) in an amount not to exceed $5,000,000 in any fiscal year; or (ii) create, incur, assume or suffer to exist, or permit any of its subsidiaries to incur, assume or suffer to exist, any Debt, except for (A) the Obligations, (B) Permitted Existing Debt, (C) Debt secured by Liens upon the property of the Borrower or any of its subsidiaries permitted pursuant to Section 7.02(a), and (D) Permitted Franchise Guarantees. (c) Dividends, Etc. Declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of capital stock of the Borrower, or purchase, redeem or otherwise acquire for value (or permit any of its subsidiaries to do so) any shares of any class of capital stock of the Borrower or any warrants, rights or options to acquire any such shares, now or hereafter outstanding, or make any other distribution in respect of any shares of such capital stock, or agree to any of the foregoing, if immediately after giving effect to such proposed action, a Default or Event of Default would exist. (d) Mergers, Etc. Merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets or capital stock of, any Person, or enter into an agreement to do any of the foregoing, or permit any of its subsidiaries to do so, except that (i) the Borrower may acquire the assets of any Person pursuant to a Permitted Asset Acquisition, (ii) any subsidiary of the Borrower may merge or consolidate with or into, or transfer assets to, or acquire assets of, any other subsidiary of the Borrower, and (iii) any subsidiary of the Borrower may merge into or transfer assets to the Borrower; provided, however, that at the time of any transaction permitted under any of the foregoing clauses (i), (ii) and (iii), and immediately after giving effect to such transaction, no Default or Event of Default would exist. (e) Guarantees; Assumption of Obligations; Contingent Liabilities. Guarantee or assume the obligations of any Person, including any subsidiaries of the Borrower, or create or suffer to exist any other contingent liability, or permit any subsidiary of the Borrower to do any of the foregoing, other than (i) guarantees by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, (ii) Permitted Franchisee Guarantees of up to $10,000,000, and (iii) existing guarantees as disclosed on Schedule 7.02(b). (f) Transactions with Affiliates. Enter into, or be a party to any transaction with one of the Borrower's Affiliates, except in the ordinary course of business and pursuant to the reasonable requirements of the Borrower's business and upon fair and reasonable terms which are no less favorable to the Borrower than the Borrower would obtain in a comparable arm's-length transaction with a 34 Person not the Borrower's Affiliate. (g) Transactions Detrimental to Business, Etc. Enter into any transaction which materially and adversely affects its business, property, assets, operation, condition (financial or otherwise), any collateral security for the Obligations or the Borrower's ability to perform its obligations under this Amended and Restated Agreement or to repay the Obligations. (h) Dispositions of Assets. (i) Sell, lease, assign, transfer or otherwise dispose of any real property (or enter into an agreement to do any of the foregoing), or permit any of its subsidiaries to sell, lease, assign, transfer or otherwise dispose of any real property (or enter into an agreement to do any of the foregoing), except for the properties described on Schedule 7.02(h), without the prior written consent of all of the Lenders; or (ii) Sell, lease, assign, transfer or otherwise dispose of any other asset (or enter into an agreement to do any of the foregoing), or permit any of its subsidiaries to sell, lease, assign, transfer or otherwise dispose of any other asset (or enter into an agreement to any of the foregoing), other than: (A) the sale of inventory in the ordinary course of the Borrower's or such subsidiary's business; (B) the sale or other disposition of assets of the Borrower or such subsidiary which are obsolete or no longer used or usable in the business of the Borrower or such subsidiary; and (C) the sale or other disposition of assets of the Borrower or such subsidiary other than of the kind described in clause (A) or (B) above; provided, however, that the value of all such other assets sold or otherwise disposed of during any fiscal year pursuant to this clause (C) shall not exceed $10,000,000, and provided further that in the event that the proceeds of such dispositions exceed $2,000,000 in the aggregate during any fiscal year, the Aggregate Commitment shall be permanently reduced by such excess and the Borrower shall make an immediate mandatory prepayment of the Obligations equal to the amount by which the Aggregate Outstandings exceed such reduced Aggregate Commitment. (i) ERISA. (i) Engage, or permit any ERISA Affiliate to engage, in any prohibited transaction described in Section 406 of ERISA or 4975 of the IRC for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the DOL; (ii) permit to exist any accumulated funding deficiency (as defined in Sections 302 of ERISA and 412 of the IRC), whether or not waived; (iii) fail, or permit any ERISA Affiliate to fail, to pay timely required contributions or annual installments due with respect to any waived funding deficiency to any Benefit Plan; (iv) terminate, or permit any ERISA Affiliate to terminate, any Benefit Plan which would result in any liability of the Borrower or any ERISA Affiliate under Title IV of ERISA; (v) fail, or permit any ERISA Affiliate to fail, to make any contribution or payment to any Multiemployer Plan which the Borrower or any ERISA Affiliate may be required to make under any agreement relating to such Multiemployer Plan, or any law pertaining 35 thereto; (vi) fail, or permit any ERISA Affiliate to fail, to pay any required installment or any other payment required under Section 412 of the IRC on or before the due date for such installment or other payment; (vii) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an increase in current liability for the plan year such that the Borrower or any ERISA Affiliate is required to provide security to such Plan under Section 401(a)(29) of the IRC. (j) Restrictions on Operating Leases. Become, or permit any of its subsidiaries to become, liable in any way whatsoever under any Operating Lease in any fiscal year, unless, immediately after giving effect to the incurrence of liability with respect to such Operating Lease, projected Consolidated Rental Payments for such fiscal year and each succeeding fiscal year do not exceed $20,000,000 per fiscal year. (k) Loans, Advances and Investments. Not make and not permit any subsidiary to make any loan, advance, extension of credit or capital contribution to, make any investment in, or purchase or commit to purchase any stock or other securities or evidences of Debt of, or interests in, any other Person, other than: (i) expense accounts for and other advances to its directors, officers and employees in the ordinary course of business up to an aggregate amount of $500,000 outstanding at any time; (ii) marketable obligations issued or unconditionally guaranteed by the United States Government or issued by any of its agencies and backed by the full faith and credit of the United States of America, in each case maturing within one year from the date of acquisition (and investments in mutual funds investing primarily in those obligations); (iii) short-term investment grade domestic and eurodollar certificates of deposit or time deposits that are fully insured by the Federal Deposit Insurance Corporation or are issued by commercial banks organized under the Laws of the United States of America or any of its states having combined capital, surplus, and undivided profits of not less than $100,000,000 (as shown on its most recently published statement of condition); (iv) commercial paper and similar obligations rated "P- 1" or better by Moody's Investors Services, Inc., or "A-1" or better by Standard & Poors Ratings Group (a division of McGraw Hill, Inc.); (v) investments in, and advances to, wholly-owned subsidiaries, or by a wholly-owned subsidiary in or to its parent; (vi) readily marketable tax-free municipal bonds of a domestic issuer rated "aaa" or better by Moody's Investors Service, Inc., or "AAA" or better by Standard & Poors Ratings Group (a division of McGraw Hill, Inc.), and maturing within one year from the date of issuance (and investments in mutual funds investing primarily in those bonds); (vii) promissory notes up to an aggregate amount of $3,000,000 outstanding at any time accepted as consideration for the disposition of properties described on Schedule 7.02(h); (viii) demand deposit accounts maintained in the ordinary course of business; (ix) current trade and customer accounts receivable that are for goods furnished or services rendered in the ordinary course of business and that are payable in accordance with customary trade terms; and (x) Permitted Asset Acquisitions. SECTION 7.03 Financial Covenants. The Borrower covenants to the Agent and each Lender that so long as any Obligation shall remain unpaid or any Lender shall have any obligation hereunder, the Borrower will, unless the Majority Lenders shall otherwise consent in writing: 36 (a) Maximum Adjusted Debt to EBITDAR Ratio. Maintain a ratio, determined as of the last day of each fiscal quarter, of (i) Adjusted Debt as of such date to (ii) Adjusted Consolidated EBITDAR for the four fiscal quarters ending on such date of no more than 3.50 to 1. (b) Minimum Consolidated Tangible Net Worth. Maintain Consolidated Tangible Net Worth, determined as of the last day of each fiscal quarter, of at least (i) $115,000,000, plus (ii) an amount equal to the greater of zero (0) and fifty percent (50%) of the consolidated net earnings after taxes of the Borrower and its subsidiaries determined in accordance with GAAP for the period (taken as a single accounting period) from and including November 1, 1996, to and including such day, plus (iii) an amount equal to seventy-five percent (75%) of any Net Equity Issuance Proceeds for the period (taken as a single accounting period) from and including November 1, 1996, to and including such day. (c) Maximum Consolidated Capital Expenditures. Not make or incur, and not permit any of its consolidated subsidiaries to make or incur, Consolidated Capital Expenditures, in any fiscal year in excess of $25,000,000; provided that in the event the actual Consolidated Capital Expenditures made or incurred during the applicable fiscal year are less than $25,000,000 (such difference being referred to as a "Carry-Over Amount"), the permitted amount solely with respect to the immediately succeeding fiscal year shall be increased by the lesser of (i) $5,000,000 and (ii) such Carry-Over Amount. (d) Minimum Fixed Charge Coverage Ratio. Maintain a ratio of (i) Adjusted Consolidated EBITDAR to (ii) Consolidated Fixed Charges, determined as of the last day of each fiscal quarter for the twelve month period ending on such day, of at least 1.50 to 1. (e) Maximum Debt to Capitalization Ratio. Maintain a ratio of (i) the sum of (A) Consolidated Funded Debt, plus (B) Capital Lease Obligations of the Borrower and its subsidiaries to (ii) the sum of (X) Consolidated Funded Debt, plus (Y) Consolidated Net Worth, plus (Z) Capital Lease Obligations of the Borrower and its subsidiaries, in each case, determined as of the last day of each fiscal quarter, of no more than 0.40 to 1. ARTICLE VIII EVENTS OF DEFAULT SECTION 8.01 Events of Default. If any of the following events ("Events of Default") shall occur and be continuing: (a) either (i) the Borrower shall fail to make any payment of principal on the Advances when the same becomes due, or (ii) the Borrower shall fail to make any other payment on the Obligations when the same becomes due and such failure shall continue for five (5) days; or (b) any representation or warranty made by the Borrower herein or in any other Loan Document or by the Borrower (or any of its officers) in connection with any Loan Document shall prove to have been incorrect or misleading in any material respect when made; or 37 (c) the Borrower shall fail to perform or observe any term, covenant or agreement contained in Section 7.02 on its part to be performed or observed; or (d) the Borrower shall fail to perform or observe any other term, covenant or agreement contained in any Loan Document on its part to be performed or observed and any such failure shall remain unremedied for the earliest of (i) ten (10) business days after written notice thereof shall have been given to the Borrower by the Agent, (ii) ten (10) business days after the date the Borrower discovers, or should have discovered, such failure, and (iii) if such failure has existed for more that sixty (60) days, five (5) business days after the earlier of (A) the date of delivery by the Agent to the Borrower of written notice thereof, and (B) the date that the Borrower discovers, or should have discovered, such failure; or (e) with respect to any Debt (other than Debt constituting Obligations) of the Borrower or any subsidiary of the Borrower in an aggregate principal amount outstanding in excess of $1,000,000, the Borrower or such subsidiary shall fail to pay any principal of or premium or interest on such Debt when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period,if any, specified in the agreement or instrument relating to such Debt; or any other event shall occur or condition shall exist under any agreement or instrument relating to any such Debt and shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to cause the holders of such Debt to accelerate, or to permit the holders of such Debt to accelerate, the maturity of such Debt; or any such Debt shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; or (f) (i) the Borrower or any of its subsidiaries shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors; or any proceeding shall be instituted by or against the Borrower or any of its subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property (unless, if such proceeding is involuntary, it is dismissed within 60 days after its filing); or (ii) the Borrower or any of its subsidiaries shall take any corporate action to authorize any of the actions set forth in clause (i) above; or (g) any judgment or order for the payment of money in excess of $1,000,000 above any insurance coverage therefor shall be rendered against the Borrower or any of its subsidiaries by any Governmental Authority or quasi-governmental authority, and either (i) enforcement proceedings shall have been commenced by any creditor upon such judgment or order, or (ii) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgment or order, by reason of a 38 pending appeal or otherwise, shall not be in effect; or (h) any Plan shall have any Unfunded Liabilities, or any Reportable Event shall occur in connection with any Plan; or (i) the Borrower or any of its subsidiaries shall be the subject of any proceeding or investigation pertaining to the release by the Borrower, any of its subsidiaries, or any other Person of any toxic or hazardous waste or substance into the environment, or any violation of any federal, state or local environmental, health or safety law or regulation, which would, in either case, have a material adverse effect upon the operations of the Borrower or any of its subsidiaries; or (j) the acquisition by any Person, or two or more Persons acting in concert (other than any Person or Persons who own, prior to that acquisition, 20% or more of the outstanding shares of the Borrower's voting stock), of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of the Borrower's voting stock; then, and in any such event, the Agent shall, at the direction of the Majority Lenders, by notice to the Borrower (i) declare the Advance Commitment and the Letter of Credit Commitment and the Advance Facility and the Letter of Credit Facility and the obligations of each Lender under each of the Loan Documents, to be terminated, whereupon the same shall forthwith terminate, and (ii) declare the Obligations to be forthwith due and payable, whereupon such Obligations shall become and be forthwith due and payable, without presentment, demand, protest or further notice of any kind, all of which are hereby expressly waived by the Borrower; provided, however, that upon the occurrence of any Event of Default described in Section 8.01(f)(i) above, (A) the Advance Commitment and the Letter of Credit Commitment, and the obligations of each Lender under each of the Advance Facility and the Letter of Credit Facility, shall automatically be terminated, and (B) the Obligations shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by the Borrower. ARTICLE IX MISCELLANEOUS SECTION 9.01 Amendments, Etc. No amendment or waiver of any provision of any Loan Document, nor consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Majority Lenders, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given, provided that no amendment or waiver which (i) increases the amount of any Lender's Commitment; (ii) decreases the interest rates specified in Sections 3.06 or any fees payable to the Lenders in Sections 2.04 and 4.07; (iii) extends the due date or decreases the amount of any payments required hereunder; (iv) changes the definition of "Majority Lenders" or "Pro Rata Shares"; or (v) changes the provisions of this Section 9.01, shall be effective unless the same is signed by all of the Lenders. SECTION 9.02 Notices, Etc. All notices and other 39 communications provided for hereunder shall be in writing (including telegraphic, telecopy, telex or cable communication) and mailed, telegraphed, telexed, cabled or delivered, if to the Borrower, at its address at 400 West 48th Avenue, P.O. Box 16601, Denver, Colorado 80216, Attention: Stanley Ereckson, Jr.; and if to the Agent, at its address at 901 Main Street, Dallas, Texas 75202, Attention: Kimberley Knop, with a copy to Porter & Hedges, L.L.P., 700 Louisiana, 35th Floor, Houston, Texas 77002, Attention: F. Walter Bistline, Jr.; or, as to each party, at such other address as shall be designated by such party in a written notice to the other party. All such notices and communications shall be effective upon receipt, or if mailed, four (4) days after deposit in the United States mails; if telegraphed, when delivered to the telegraph company; if telexed, when confirmed by telex answerback; if telecopied, when verbally confirmed by telephone; or if cabled, when delivered to the cable company, except that notices and communications to the Agent pursuant to Article II, III or IV shall not be effective until received by the Agent. SECTION 9.03 No Waiver; Remedies. No failure on the part of the Agent or any Lender to exercise, and no delay in exercising, any right under any Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 9.04 Payments Set Aside. To the extent that the Borrower makes a payment or payments to the Agent or any of the Lenders, or the Agent or any of the Lenders exercise their rights of set-off, and such payment or payments or the proceeds of such enforcement or set-off or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, real estate or federal law, common law or equitable cause, then to the extent of such recovery, the Obligation or part thereof originally intended to be satisfied, and all such Liens, rights and remedies therefor, shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or set-off had not occurred. SECTION 9.05 Costs, Expenses and Taxes. (a) The Borrower agrees to pay on demand all "Costs and Expenses," as hereinafter defined. "Costs and Expenses" means (A) all costs, expenses, fees and charges incurred by the Agent or its Affiliates (including, without limitation, NationsBanc Montgomery Securities, Inc.) and all fees for services (including disbursements) of the attorneys, accountants, valuation experts and all professionals (and all paraprofessionals and other staff employed by such professionals) employed by the Agent or any such Affiliate from time to time in any way or for any purpose arising out of, or relating to, the Obligations of the Borrower, any of the Loan Documents or the Agent's or such Affiliate's relationship or transactions with the Borrower, including, without limitation, (i) the development, preparation, negotiation, execution, delivery, syndication, modification, review and administration of the Loan Documents, (ii) the commencement, defense of or intervention in any court proceeding in any way related to 40 the Obligations of the Borrower or the Loan Documents, or any other agreements contemplated by the terms of this Amended and Restated Agreement, (iii) the filing of a petition, complaint, answer, motion or other pleadings, or the taking of any other action in or with respect to any suit or proceeding (bankruptcy or otherwise) relating to the Borrower or any Loan Document, (iv) the enforcement of any of the Agent's or any Lender's rights to collect any of the Obligations, (v) all costs and expenses incurred by the Agent or any Affiliate internally including, but not limited to, travel, food and lodging expenses for employees, duplicating and document processing costs, and internal auditing service expenses, and (vi) all audit costs, appraisal costs and costs of searches, recordings and filings, all recording and filing fees, all Taxes and all other similar fees and disbursements; and (B) all costs, expenses, fees and charges incurred by each Lender (including fees and disbursements for services of attorneys and paralegals) in connection with the matters described in clauses (ii), (iii) and (iv) above. The Borrower also agrees to pay, and to save harmless the Agent and the Lenders from any delay in paying, any tangibles, intangibles, documentary stamp and other Taxes, if any, which may be payable in connection with the execution and delivery of any of the Loan Documents, or the recording of any hereof or thereof, or in connection with any modification hereof or thereof, any of which Taxes payable by the Agent or the Lenders are to be part of the Costs and Expenses. All Costs and Expenses provided for in this Section 9.05 may, at the option of the Lenders, be charged and treated as a Borrowing comprised of Base Rate Advances made by each Lender in accordance with its Pro Rata Share. (b) If any payment of principal of any Eurodollar Rate Advance is made other than on the last day of the Interest Period for such Advance, as a result of acceleration of the maturity of the Notes pursuant to Section 8.01 or for any other reason, or if any Eurodollar Rate Advance is converted to a Base Rate Advance pursuant to Section 3.04(a), the Borrower shall, upon demand by the Agent, pay to each Lender any amounts required to compensate such Lender for any additional losses, costs or expenses which such Lender may reasonably incur as a result of such payment including, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain such Advance. SECTION 9.06 Right of Set-Off. Subject to the provisions of Section 9.07, the Agent, each Lender and each Affiliate of each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by the Agent, such Lender or such Affiliate to or for the credit or the account of the Borrower against any and all of the Obligations, irrespective of whether or not any demand shall have been made under any Loan Document and although such Obligations may be contingent and unmatured. Each Lender agrees to promptly notify the Agent after any such setoff and application made by such Lender and the Agent shall promptly thereafter notify the Borrower of such set-off and application. The Agent agrees promptly to notify the Borrower after any set-off and application made by the Agent; provided, however, that the Agent's failure to notify 41 the Borrower as set forth in this sentence and the immediately preceding sentence shall not affect the validity of such set-off and application. The rights of the Agent and each Lender under this Section 9.06 are in addition to other rights and remedies (including, without limitation, other rights of set- off) which the Agent or any Lender may have. SECTION 9.07 Sharing of Payments. If any Lender shall obtain any payment (whether voluntary, involuntary, through the exercise of any right of set-off, or otherwise) on account of the Advances made by it (other than pursuant to Section 3.08 and Section 9.05(b)) in excess of its Pro Rata share of payments on account of the Advances obtained by the other Lenders, such Lender shall forthwith purchase from the other Lenders a participation in the Advances made by them as shall be necessary to cause such purchasing Lender to share the excess payment ratably with the other Lenders; provided; however, that if all or any portion of such excess payment is thereafter received from such purchasing Lender, such purchase from the other Lenders shall be rescinded to the extent of such recovery and the other Lenders shall repay to the purchasing Lender that proportion of the purchase price received by it equal to (A) the amount recovered from the purchasing Lender, divided by (B) the total amount of the participation purchased by the purchasing Lender, together with an amount equal to each such Lender's Pro Rata Share of any interest or other amount payable by the purchasing Lender in respect of the total amount so recovered. The Borrower agrees that any Lender so purchasing a participation from any other Lender pursuant to this Section 9.07 may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of set-off) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation. SECTION 9.08 Indemnification. (a) The Borrower hereby indemnifies and holds the Agent and its Affiliates and each Lender, their respective attorneys and agents (individually and collectively referred to for purposes of this Section 9.08 as the "Indemnified Parties") harmless from and against any and all claims (including, without limitation, causes of action, cross-claims, counterclaims, rights of set-off and recoupment), whether by any Affiliate or shareholder of the Borrower, or by any creditor of the Borrower, or any Affiliate thereof, which are at any time asserted against the Indemnified Parties (together with all Costs and Expenses relating to the defense of such claims) arising out of, or relating to, the Indemnified Parties' relationship or transactions with the Borrower or any of its Affiliates, including, without limitation, (i) any claim for funds received by the Agent or any of the Lenders and applied to the Obligations; (ii) any claims contesting the validity or priority of the Liens granted to the Agent for the benefit of the Lenders pursuant to the terms and provisions of any of the Loan Documents; and (iii) any claims for actions taken or not taken by any of the Indemnified Parties in connection with, or otherwise resulting from, whether directly or indirectly, the negotiation, structuring, funding, issuance or administration of the Advances, Letters of Credit and all other extensions of credit by the Lenders to or on behalf of the Borrower; provided, however, that the Agent and each Lender hereby agrees to refund to the Borrower any amounts paid to the Agent or such Lender by the 42 Borrower pursuant to the foregoing indemnity to the extent that a court of competent jurisdiction has found, pursuant to a "Final Order," as hereinafter defined, that the liability asserted against the Indemnified Parties for which such indemnity payment was made resulted primarily from the Indemnified Parties' own willful misconduct or knowing and intentional violation (individually and not as a co-conspirator with the Borrower or any of its Affiliates) of any applicable law, rule or statute, which violation is punishable as a criminal offense. As used herein, a "Final Order" shall mean an order entered by a court of competent jurisdiction which is not interlocutory and as to which (i) the time to appeal or petition for a writ of certiorari has expired with no appeals or petitions for a writ of certiorari from such order having been taken, or (ii) all appeals and petitions for writs of certiorari prosecuted from such order have been exhausted. An used herein, "knowing and intentional" violation of a law, rule or statute shall be interpreted to mean that an Indemnified Party had knowledge both of the applicable law, rule or statute which it violated and that its act was a violation of such law, rule or statute. (b) The Borrower hereby agrees to reimburse the Indemnified Parties for all Costs and Expenses incurred by the Indemnified Parties at any time from and after the date hereof relating in any way to any and all claims which fall within the scope of the Borrower's indemnity obligations pursuant to Section 9.08(a). All such Costs and Expenses shall be payable by the Borrower upon demand. At each Lender's option, such Lender may reimburse itself for any such Costs and Expenses, and the amount of any such reimbursement shall constitute additional Obligations. SECTION 9.09 Change in Accounting Principles. If any changes in accounting principles from those used in the preparation of the financial statements referred to in Section 6.01(e) are hereafter required or permitted by GAAP, and are adopted by the Borrower with the agreement of its independent certified public accountants, and such changes result in a change in the method of calculation or the interpretation of any of the financial covenants, standards or terms found in Article VII or any other provision of this Amended and Restated Agreement, the Borrower and the Lenders agree to amend any such affected terms and provisions to reflect such changes in GAAP with the result that the criteria for evaluating the financial condition of the Borrower and its consolidated subsidiaries shall be the same after such changes in GAAP as if such changes had not been made. SECTION 9.10 The Agent's Performance of Defaulted Acts. The Agent may, but need not, following five (5) days prior notice to the Borrower and so long as the Borrower shall have failed to have made such payment or perform such act in a manner satisfactory to the Lenders, make any payment or perform any act herein required of the Borrower in any form and manner deemed expedient by the Lenders. All monies paid for any of the purposes herein authorized and all expenses paid or incurred in connection therein, including reasonable attorney's fees shall constitute Obligations and bear interest at the rate provided herein for Base Rate Advances. SECTION 9.11 Binding Effect; Assignments; Participations. This Amended and Restated Agreement shall become effective when it shall have been executed by the 43 Borrower, the Agent and each Lender and thereafter shall be binding upon and inure to the benefit of the Borrower, the Agent, the Lenders and their respective successors and assigns, except that the Borrower shall not have the right to assign its rights hereunder or any interest herein without the prior written consent of the Lenders. Each Lender may assign (in minimum amounts of $5,000,000 and with the consent of the Borrower and the Agent) to one or more banks or other entities all or any part or portion of, or may grant participations to one or more banks or other entities in all or any part or portion of its rights and obligations hereunder (including, without limitation, its Commitment, its Note, its Advances or its Letters of Credit). Upon, and to the extent of, any assignment (unless otherwise stated therein) made by a Lender hereunder and payment of a processing fee in the amount of $3,000 to Agent for its own account, the assignee or purchaser of such assignment shall be a Lender hereunder for all purposes of this Amended and Restated Agreement. Without limiting the foregoing, each assignee and each purchaser of an assignment or participation shall, to the fullest extent permitted by law, have the same rights and benefits hereunder with respect to the rights and benefits so assigned or participated as it would have if it were a Lender hereunder. SECTION 9.12 CHOICE OF LAW. THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. ANY DISPUTE BETWEEN THE BORROWER, THE AGENT OR ANY OF THE LENDERS ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS AND NOT THE CONFLICTS OF LAW PROVISIONS OF THE STATE OF TEXAS. SECTION 9.13 CONSENT TO JURISDICTION. (a) EXCEPT AS PROVIDED IN SECTION 9.13(b), THE BORROWER, THE AGENT AND EACH LENDER AGREE THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE OR FEDERAL COURTS LOCATED IN DALLAS COUNTY, TEXAS, BUT THE BORROWER, THE AGENT AND EACH LENDER ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF DALLAS COUNTY, TEXAS. THE BORROWER WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE. (b) THE BORROWER AGREES THAT THE AGENT AND EACH LENDER SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO ENFORCE A JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT OR ANY LENDER TO REALIZE ON THE BORROWER'S PROPERTY, THE BORROWER OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE AGENT OR ANY LENDER HAS COMMENCED A PROCEEDING DESCRIBED IN THIS PARAGRAPH. SECTION 9.14 WAIVER OF JURY TRIAL. THE BORROWER, THE 44 AGENT AND EACH LENDER EACH WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO. THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT JURY. SECTION 9.15 Term. This Amended and Restated Agreement shall remain in full force and effect until the later to occur of (i) the Termination Date, and (ii) the repayment in full of all the Obligations and the extinguishment of all Letters of Credit issued hereunder. SECTION 9.16 Execution in Counterparts. This Amended and Restated Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. SECTION 9.17 Lenders' Creation of Security Interest. Notwithstanding any other provision set forth in this Amended and Restated Agreement, any Lender may at any time create a security interest in all or any portion of its rights under this Amended and Restated Agreement (including, without limitation, Obligations owing to it and the Note held by it) in favor of any Federal Reserve bank in accordance with Regulation A of the Federal Reserve Board. ARTICLE X THE AGENT SECTION 10.01 Appointment. Each Lender hereby designates and appoints NationsBank as its Agent under the Loan Documents, and each Lender hereby irrevocably authorizes the Agent to take such action on its behalf under the provisions of the Loan Documents and to exercise such powers as are set forth herein or therein, together with such other powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Amended and Restated Agreement (including, without limitation, enforcement or collection of the Notes), the Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Lenders, and such instructions shall be binding upon all Lenders and all holders of Notes; provided, however, that the Agent shall not be required to take any action which exposes the Agent to personal liability or which is contrary to any Loan Document or applicable law. SECTION 10.02 Agent's Reliance. Etc. Neither the Agent nor any of its Affiliates, directors, officers, agents or employees shall be liable for any action taken or omitted to be taken by it or then under or in connection with any Loan Document, except for its or their own gross negligence or willful misconduct. Without limitation of the generality of the foregoing, the Agent: (a) may treat the payee of any Note as the holder thereof until the Agent has received 45 written notice of the assignment or transfer thereof signed by such payee and in form satisfactory to the Agent (together with the processing fee described in Section 9.11); (b) may consult with legal counsel (including counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (c) makes no warranty or representation to any Lender and shall not be responsible to any Lender for any statements, warranties or representations made in or in connection with any Loan Document; (d) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Loan Document or to inspect the property (including the books and records) of the Borrower; (e) shall not be responsible to any Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Loan Document or collateral covered thereby or any other instrument or document furnished pursuant thereto; and (f) shall incur no liability under or in respect of any Loan Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable, telecopy or telex) believed by it to be genuine and signed or sent by the proper party or parties. SECTION 10.03 NationsBank and Affiliates. With respect to its Commitment, the Advances made by it, the Note issued to it and the Letters of Credit by it, NationsBank shall have the same rights and powers under the Loan Documents as any other Lender and may exercise the same as though it were not the Agent, and the term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include NationsBank in its individual capacity. NationsBank and its Affiliates may accept deposits from, lend money to, act as trustee under indentures of, and generally engage in any kind of business with, the Borrower and any person or entity who may do business with or own securities of the Borrower, all as if NationsBank were not the Agent and without any duty to account therefor to the Lenders. SECTION 10.04 Lender Credit Decision. Each Lender acknowledges that it has, independently and without reliance upon the Agent or any of its Affiliates or any other Lender and based on the financial statements referred to in Section 6.01 and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Amended and Restated Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Agent or any of its Affiliates or any other Lender and based on such documents and information an it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents. SECTION 10.05 Indemnification. The Lenders agree to indemnify the Agent and its Affiliates (to the extent not reimbursed by the Borrower) ratably according to their Pro Rata Shares, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted against the Agent or any of its Affiliates in any way relating to or arising out of any Loan Document, or any action taken or omitted by the Agent or any of its Affiliates pursuant to the Loan Document, provided that no Lender shall be liable for any portion of such liabilities, 46 obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Agent's or any of its Affiliates' gross negligence or willful misconduct. Without limitation of the foregoing, each Lender agrees to reimburse the Agent and its Affiliates promptly upon demand for its Pro Rata Share of any reasonable out-of-pocket expenses (including counsel fees) incurred by the Agent or any of its Affiliates in connection with the preparation, execution, administration, or enforcement of, or legal advice in respect of rights or responsibilities under, the Loan Documents, or any of them, to the extent that the Agent or such Affiliate is not reimbursed for such expenses by the Borrower. SECTION 10.06 Successor Agent. The Agent may resign at any time as Agent under the Loan Documents by giving written notice thereof to the Lenders and the Borrower. Upon any such resignation, all of the Lenders shall have the right to appoint a successor Agent thereunder. If no successor Agent shall have been so appointed by all of the Lenders, and shall have accepted such appointment within thirty (30) days after the retiring Agent's giving of notice of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a commercial bank organized under the laws of the United States of America or of any State thereof and having a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Agent under the Loan Documents by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under the Loan Documents. After any retiring Agent's resignation or removal as Agent under the Loan Documents, the provisions of this Article X shall continue to inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under the Loan Documents. SECTION 10.07 Invalidated Payments. If any amounts distributed by the Agent to a Lender are subsequently returned or repaid by the Agent to the Borrower or any of its representatives or successors in interest, whether by court order, settlement or otherwise, such Lender shall, promptly upon its receipt of notice thereof from the Agent, pay to the Agent such amount. If any such amounts are recovered by the Agent from the Borrower or any of its representatives or successors in interest, the Agent shall redistribute such recovered amounts to the Lenders on the same basis as such amounts were originally distributed. The obligations of the Lenders and the Agent under this Section 10.07 shall survive the repayment of the Notes and the termination of the Loan Documents. IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written. VICORP RESTAURANTS, INC. By:/s/ Michael R. Kinnen --------------------- Michael R. Kinnen Treasurer Pro Rata Share: 75% NATIONSBANK OF TEXAS, N.A., as Agent and a Lender By:/s/ Kimberley Knop ------------------ Kimberley Knop Vice President Domestic and Eurodollar Lending Office: 901 Main Street, 67th Floor Dallas, Texas 75202 Attn: Kimberley Knop Pro Rata Share: 25% U.S. BANK NATIONAL ASSOCIATION, D/B/A COLORADO NATIONAL BANK, as a Lender By:/s/ Andrea C. Koeneke --------------------- Andrea C. Koeneke Vice President Domestic and Eurodollar Lending Office: 950 17th Street, Suite 300 Denver, Colorado 80202 Attn: Andrea C. Koeneke 47 EXHIBIT A NOTICE OF BORROWING ------------------- TO: NationsBank of Texas, N.A. as agent (the "Agent") under that certain Amended and Restated Credit Agreement dated as of December 19, 1997 by and among VICORP Restaurants, Inc., a Colorado corporation (the "Borrower"), the banks or other financial institutions listed on the signature pages thereof (such banks or other financial institutions and their respective successors and assigns being referred to collectively as the "Lenders") and the Agent (said Credit Agreement, as the same may have been amended, modified or supplemented from time to time, being hereinafter referred to as the "Credit Agreement"). Capitalized terms when used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement. Pursuant to Section 3.02 of the Credit Agreement, the Borrower hereby gives you notice, irrevocably, that the Borrower hereby requests a Borrowing under the Credit Agreement and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 3.02(a) of the Credit Agreement: (i) The date (which must be a Business Day) of the Proposed Borrowing is __________________, 19___. 48 (ii) The Advances comprising the Proposed Borrowing are [Base Rate Advances] [Eurodollar Rate Advances]. (iii) The aggregate amount of the Proposed Borrowing is $_____________________. (iv) The initial Interest Period for each Advance made as part of the Proposed Borrowing is [________ month[s]]. The Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing: (A) the representations and warranties contained in Section 6.01 of the Credit Agreement are correct, before and after giving effect to the Proposed Borrowing and to the application of the proceeds therefrom, as though made on and as of such date; and (B) no event has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds therefrom, which constitutes a Default or an Event of Default. Dated: _________________, 19____ VICORP RESTAURANTS, INC. By: --------------------- Title: - ----------------------------------- Use for Eurodollar Rate Advances. EXHIBIT B NOTICE OF CONVERSION/CONTINUATION --------------------------------- TO: NationsBank of Texas, N.A. as agent (the "Agent") under that certain Amended and Restated Credit Agreement dated as of December 19, 1997 by and among VICORP Restaurants, Inc., a Colorado corporation (the "Borrower"), the banks or other financial institutions listed on the signature pages thereof (such banks or other financial institutions and their respective successors and assigns being referred to collectively as the "Lenders") and the Agent (said Credit Agreement, as the same may have been amended, modified or supplemented from time to time, being hereinafter referred to as the "Credit Agreement"). Capitalized terms when used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement. Pursuant to Section 3.03 of the Credit Agreement and effective as of ____________, 19____ this Notice of Conversion/Continuation ("Notice") represents the Borrower's election to [insert one of the following]: 49 convert $_____________ in aggregate principal amount of Base Rate Advances comprising the same Borrowing to Eurodollar Rate Advances. The initial Interest Period for such Eurodollar Rate Advances is requested to be a _________________ (_________) month period. convert $_________________ in aggregate principal amount of Eurodollar Rate Advances comprising the same Borrowing to Base Rate Advances on__________________. , 19__. continue as Eurodollar Rate Advances $_______________ in aggregate principal of presently outstanding Eurodollar Rate Advances comprising the same Borrowing with a current Interest Period ending ______________, 19____. The succeeding Interest Period is requested to be a _____________ (______________) month period. The Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of the [conversion] [continuation] requested hereby: (1.) the representations and warranties contained in Section 6.01 of the Credit Agreement are correct, before and after giving effect to the [conversion] [continuation] requested hereby and to the application of the proceeds therefrom, as though made on and as of such date; and (2.) no event has occurred and is continuing, or would result from such [conversion] [continuation] or from the application of the proceeds therefrom, which constitutes a Default or an Event of Default. Dated: _________________, 19____. - --------------------------------------------------------------------- Insert Business Day on which conversion/continuation is to become effective. Use if converting Base Rate Advances to Eurodollar Rate Advances. Use if converting Eurodollar Rate Advances to Base Rate Advances. Use if continuing Eurodollas Rate Advances. VICORP RESTAURANTS, INC. By -------------------- Title: EXHIBIT C REPLACEMENT REVOLVING LOAN NOTE ------------------------------- U.S. $_________________ December 19, 1997 FOR VALUE RECEIVED, the undersigned, VICORP RESTAURANTS, INC., a Colorado corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of __________________________________________ (the "Lender") the principal sum of _______________________________ DOLLARS or, if less, the aggregate unpaid principal amount of all "Advances" (as defined in the "Credit Agreement" (as defined below)) made by the Lender to the Borrower pursuant to the 50 Credit Agreement outstanding on the "Termination Date" (as defined in the Credit Agreement). The Borrower promises to pay interest on the unpaid principal amount of each Advance from the date of such Advance until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. Both principal and interest are payable in lawful money of the United States of America to the "Agent" (as defined in the Credit Agreement), for the account of the Lender, at its principal office in Dallas, Texas, in same day funds. Each Advance made by the Lender to the Borrower, and all prepayments made on account of principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Promissory Note ("Note"), provided, however, that the Lender's failure to make any such recordation or endorsement shall not operate to relieve Borrower of its obligations to repay in full the unpaid principal amount hereof, together with accrued interest thereon and all other amounts payable under the Credit Agreement. This Note is one of the Notes referred to in, and is entitled to the benefits of, that certain Amended and Restated Credit Agreement dated as of December 19, 1997 (as amended from time to time, the "Credit Agreement") by and among the Borrower, the Lender and the other banks or other financial institutions listed on the signature pages thereof (the Lender, together with such other banks or other financial institutions and their respective successors and assigns being referred to collectively as the "Lenders") and NationsBank of Texas, N.A., a national banking association, in its capacity as agent for the Lenders. The Credit Agreement, among other things, (i) provides for the making of Advances by the Lender to the Borrower from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of the Borrower resulting from each such Advance being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. This Note is issued as a replacement for, and as an extension [and increase] of (but not a novation of) the Revolving Loan Note dated October 31, 1996, executed by the Borrower and payable to the order of the Lender in the principal amount of $_________________. VICORP RESTAURANTS, INC. By: --------------------- Michael R. Kinnen Treasurer 51 ADVANCES AND PAYMENTS OF PRINCIPAL -------------------------------------------------------- Amount of Unpaid Amount of Principal Notation Date Advance Prepaid Balance Made By - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- EXHIBIT D REQUEST FOR LETTER OF CREDIT ---------------------------- TO: NationsBank of Texas, N.A., as agent (the "Agent") under that certain Amended and Restated Credit Agreement dated as of December 19, 1997 by and among VICORP Restaurants, Inc., a Colorado corporation (the "Borrower"), the banks or other financial institutions listed on the signature pages thereof (such banks or other financial institutions and their respective successors and assigns being referred to collectively as the "Lenders") and the Agent (said Credit Agreement, as the same may have been amended, modified or supplemented from time to time, being hereinafter referred to as the "Credit Agreement"). Capitalized terms when used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement. The Borrower hereby gives you notice, irrevocably, pursuant to Section 4.04 of the Credit Agreement, that the Borrower hereby requests the Agent to issue a Letter of Credit under the Credit Agreement, as such Letter of Credit is more particularly described in the Letter of Credit Application attached hereto as Annex A and in the form set forth in such Letter of Credit Application. In connection with the requested Letter of Credit, the Borrower sets forth the following information as required by Section 4.04 of the Credit Agreement: (i) The stated amount of the requested Letter of Credit is $________________. (ii) The effective date of issuance of the requested Letter of Credit (which must be a Business Day) is ____________. (iii) The date on which the requested Letter of Credit is to expire (which must be a Business Day occurring no more than 18 months following such effective date and shall in no event be later than the Maturity Date unless the Borrower provides the cash collateral required by Section 4.04(a)). (iv) The beneficiary of the requested Letter of Credit is__________. The Borrower hereby certifies that the following statements are true on the date hereof, and will be true on the date of issuance of the Letter of Credit requested hereby: (A) the representations and warranties contained in Section 6.01 of the Credit Agreement are correct, before and after giving effect to the issuance of such Letter of Credit, as though made on and as of such date; and 52 (B) no event has occurred and is continuing, or would result from the issuance of such Letter of Credit, which constitutes a Default or an Event of Default. Dated: _____________, 19__ VICORP RESTAURANTS, INC. By: --------------------- Title: - ------------------------------- Attach as Annex A duly completed and executed Letter of Credit Application in the form to be provided from time to time by the Agent, accompanied by the form of the Letter of Credit requested to be issued. EXHIBIT E Form of Opinion of Counsel to the Borrower ------------------------------------------ [LETTERHEAD OF VICORP RESTAURANTS, INC.] 400 West 48th Avenue P.O. Box 16601 Denver, Colorado 80216 (303) 296-2121 December 19, 1997 TO: The Agent and each of the Lenders which is a party to the Amended and Restated Credit Agreement described below RE: VICORP Restaurants, Inc. Gentlemen: This opinion is furnished to you pursuant to Section 5.01(a)(iv) of that certain $40,000,000 Amended and Restated Credit Agreement (the "Credit Agreement"), dated as of December 19, 1997, by and among VICORP Restaurants, Inc., a Colorado corporation (the "Borrower"), the financial institutions party thereto (collectively the "Lenders"), and NationsBank in its capacity as agent for the Lenders (the "Agent"). Capitalized terms when used herein and not otherwise defined herein shall have the meaning ascribed to such terms in the Credit Agreement. I have acted as counsel for the Borrower in connection with the preparation, execution and delivery of and the initial extensions of credit made under the Credit Agreement. In that connection, I have examined: (1) The Credit Agreement and each of the other Loan Documents; (2) The documents furnished by the Borrower pursuant to Article V of the Credit Agreement; 53 (3) The Articles of Incorporation of the Borrower and all amendments thereto (the "Charter"); and (4) The by-laws of the Borrower and all amendments thereto (the "By-Laws"). I have also examined such other documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I deemed necessary or advisable for purposes of this opinion. I have assumed the due execution and delivery, pursuant to due authorization, of the Credit Agreement by the Agent and the Lenders. I am qualified to practice law in the State of Colorado and I do not purport to be an expert on any laws other than the laws of the State of Colorado and the Federal laws of the United States. Insofar as the opinions expressed in paragraphs 2, 3 and 4 below relate to matters which are governed by the laws of the State of Texas, or other states, I have assumed (without negating my opinion set forth in paragraph 7), with your consent, that the substantive law of the State of Texas is the same as the substantive law of the State of Colorado. Based upon the foregoing and upon such investigation as I have decided necessary, I am of the following opinion: 1. The Borrower (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Colorado, and is duly qualified to do business, and is in good standing as a foreign corporation, in each jurisdiction in which such qualification is necessary or proper in view of its business and operations or the ownership of its properties; (ii) does not own any material amount of capital stock of, or have any other material equity investment in, any Person other than its wholly-owned subsidiary, Vicorp Restaurants, Inc., a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and the Borrower's ownership of 100,004 shares of Preferred Stock issued by a single issuer in replacement of a subordinated debenture in the original principal amount of $10,000,000, and (iii) has not (nor has any subsidiary) used or transacted business under any other corporate or trade name in the past five years, except as disclosed on Schedule 6.01(a) to the Credit Agreement. The Borrower has all material approvals necessary to own its assets and carry on its business as now being conducted and to enter into the Loan Documents. 2. The execution, delivery and performance by the Borrower of the Loan Documents are within the Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) the Charter or the By-laws or (ii) any law, rule or regulation applicable to the Borrower (including, without limitation, Regulation X of the Board of Governors of the Federal Reserve System) or (iii) any contractual or legal restriction contained in any indentures, loans, or credit agreements and bonds, notes, orders, writs, judgments, awards, injunctions, decrees or other agreements or instruments relating to the Borrower of which, after diligent inquiry, I am aware. The Loan Documents have been duly executed and delivered on behalf of the Borrower. 3. No authorization. approval or other action 54 by, and no notice to or filing with, any Governmental Authority or regulatory body is required for the due execution, delivery and performance by the Borrower of the Loan Documents. 4. The Loan Documents are legal, valid and binding obligations of the Borrower enforceable against the Borrower in accordance with their respective terms. 5. To the best of my knowledge, after diligent inquiry, there are no pending or overtly threatened actions or proceedings against the Borrower or any of its subsidiaries before any Governmental Authority or arbitrator which purport to affect the legality, validity, binding effect or enforceability of the Loan Documents or which are likely to have a materially adverse effect upon the financial condition or operations of the Borrower or any of its subsidiaries. 6. To the best of my knowledge, after diligent inquiry, there is no default by the Borrower or any other party under any material contract, lease agreement, instrument or commitment to which the Borrower is a party. 7. In any action or proceeding arising out of or relating to the Loan Documents in any court of the State of Colorado or in any federal court sitting in the State of Colorado, such court would recognize and give effect to the provisions of Section 9.12 of the Credit Agreement wherein the parties thereto agree that the Loan Documents shall be governed by, and construed in accordance with, the laws of the State of Texas. Without limiting the generality of the foregoing, a court of the State of Colorado or a federal court sitting in the State of Colorado would apply the usury law of the State of Texas, and would not apply the usury law of the State of Colorado, to the Loan Documents. 8. None of the Borrower or any of its ERISA Affiliates maintains any employee welfare benefit plans within the meaning of Section 3(l) of ERISA that provides benefits to employees after termination of employment other than as required by Section 601 of ERISA. 9. None of the Borrower or any of its subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The opinions set forth above are subject to the following qualifications. (a) My opinion in paragraph 4 above is subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors' rights generally. (b) My opinion in paragraph 4 above is subject to the effect of general principles of equity, including (without limitation) concepts of materiality, reasonableness, good faith and fair dealing (regardless of whether considered in a proceeding in equity or at law). Sincerely, Stanley Ereckson, Jr. Senior Vice President General Counsel 55 EXHIBIT F LIST OF CLOSING DOCUMENTS ------------------------- 1. Amended and Restated Credit Agreement. 2. Replacement Revolving Loan Note payable to the order of NationsBank of Texas, N.A., in the principal amount of $30,000,000. 3. Replacement Revolving Loan Note payable to the order of U.S. Bank National Association, d/b/a Colorado National Bank, in the principal amount of $10,000,000. 4. Certificate of the Secretary of the Borrower, (i) certifying the resolutions of the Board of Directors of the Borrower approving the Loan Documents, (ii) confirming the names and true signatures of the officers of the Borrower authorized to sign the Loan Documents and (iii) confirming the accuracy and currency of the Borrower's Articles of Incorporation and By-Laws previously delivered to the Lenders. 5. Opinion of Stanley Ereckson, Jr., Vice President and General Counsel of the Borrower, addressed to the Agent and the Lenders, substantially in the form of Exhibit E. 6. Certificate of existence and good standing for the Borrower from the Secretary of State of the State of Colorado. 7. Certificate of existence and good standing for the Borrower's subsidiary from the Secretary of State of the State of Delaware. 8. Fee letter regarding fees payable to the Lenders and NationsBank. 9. Cancellation of the NationsBank Agreement and payment in full of all amounts outstanding thereunder. SCHEDULE 6.01(a) TRADENAMES ---------- Angel's Angel's Diner Angel's Diner & Bakery Bakers Square Restaurant Bakers Square Restaurant & Bake Shop Family Table Village Inn Family Restaurant Village Inn Pancake House Village Inn Restaurant 56 November 18, 1998 VICORP Restaurants, Inc. 400 West 48th Avenue Denver, Colorado 80216 Attention: Stanley Ereckson, Jr. Re: Second Amendment to Amended and Restated Credit Agreement Ladies and Gentlemen: Reference is made to that certain $40,000,000 Amended and Restated Credit Agreement dated as of December 19, 1997, as amended by the First Amendment to Amended and Restated Credit Agreement dated October 5, 1998 (together, the "Agreement"), among VICORP Restaurants, Inc. ("Borrower"), the financial institutions named therein as lenders ("Lenders"), and NationsBank, N.A. (successor by merger to NationsBank of Texas, N.A.), as Agent for Lenders ("Agent") Agreement. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower, Agent and Lenders agree as follows: 1. Maximum Consolidated Capital Expenditures Section 7.03(c) of the Agreement is hereby amended to read in its entirety as follows: "(c) Maximum Consolidated Capital Expenditures. Not make or incur, ----------------------------------------- and not permit any of its consolidated subsidiaries to make or incur, Consolidated Capital Expenditures in any fiscal year in excess of $35,000,000 provided that in the event the actual Consolidated Capital Expenditures made or incurred during the applicable fiscal year are less than $35,000,000 (such difference being referred to as a "Carry-Over Amount'), the permitted amount solely with respect to the immediately succeeding fiscal year shall be increased by the lesser of (i) $5,000,000 and (ii) such Carry-Over Amount." 2. Minimum Fixed Charge Coverage Ratio. Section 7.03(d) of the Agreement is hereby amended to read in its entirety as follows: "(d) Minimum Fixed Coverage Ratio. Maintain a ratio of (i) Adjusted ---------------------------- Consolidated EBITDAR to (ii) Consolidated Fixed Charges, determined as of the last day of each fiscal quarter for the four fiscal quarters ending on such day, of at least 1.50 to 1." 3. Consent. Lenders acknowledge that Borrower may request Agent to issue ------- letters of credit under Article IV of the Agreement for the benefit of third parties from time to time in an aggregate amount not to exceed $25,000 outstanding at anytime and that such letters of credit shall not be deemed to violate Section 7.02(e) or 7.02(k) of the Agreement. 4. No Waiver of Defaults. Except as expressly set forth above, Borrower --------------------- agrees that this letter does not constitute a waiver of, or a consent to, any present or future violation of or noncompliance with any provision of any Loan Document, or a waiver of Agent's and Lenders' right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents, and the Loan Documents shall continue to be binding upon, and inure to the benefit of, Borrower, Agent and Lenders and their respective successors and assigns. 5. Representations and Warranties. Borrower represents and warrants to ------------------------------ Agent and Lenders that (a) the execution and delivery of this letter have been authorized by all requisite corporate action on its part and will not violate its organizational documents, (b) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date hereof (except to the extent that (i) such representations and warranties speak to a specific date or (ii) the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents or this letter), and (c) it is in full compliance with all covenants and agreements as contained in each Loan Document to which it is a party (except for noncompliance permitted by this letter). 6. Loan Document; Effect. This letter is a Loan Document, and, --------------------- therefore, this letter is subject to the applicable provisions of Article IX of the Agreement, all of which applicable provisions are incorporated herein by reference the same as if set forth herein verbatim. Except as affected by this letter, the Loan Documents are unchanged and continue in full force and effect. Borrower agrees that all Loan Documents to which it is a party remain in full force and effect and continue to evidence its legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this letter). Borrower hereby releases Agent and Lenders from any liability for actions or failures to act in connection with the Loan Documents prior to the date hereof. This letter shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns. 7. Multiple Counterparts. This letter may be executed in more than one --------------------- counterpart, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. 8. Fees and Expenses. Borrower agrees to pay the reasonable fees and ----------------- expenses of counsel to Agent rendered in connection with the preparation, negotiation and execution of this letter. 9. Final Agreement. LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT THE --------------- FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES. This letter shall not become effective unless and until Agent receives copies executed by Borrower, Agent and Majority Lenders in the spaces provided below. If you are in agreement with the foregoing, please so indicate by executing the enclosed counterparts of this letter in the spaces provided below and returning them to Agent to the attention of the officer named below. Very truly yours, NATIONSBANK, N.A. U.S. BANK NATIONAL ASSOCIATION By:/s/ Natalie E. Hebert By:/s/ Andrea C. Koeneke ------------------------ --------------------- Natalie E. Hebert Andrea C. Koeneke Vice President Vice President 2 October 22, 1999 VICORP Restaurants, Inc. 400 West 48th Avenue Denver, Colorado 80216 Attention: Stanley Ereckson, Jr. Re: Amended and Restated Credit Agreement Ladies and Gentlemen: Reference is made to that certain $40,000,000 Amended and Restated Credit Agreement dated as of December 19, 1997, as amended by the First Amendment dated October 5, 1998, and the Second Amendment dated November 18, 1998 (collectively, the "Agreement'), among VICORP Restaurants, Inc. (the "Borrower ") the financial institutions named therein as lenders (the "Lenders"), and Bank of America, N.A., successor by merger to NationsBank, N.A., as Agent for the Lenders (the "Agent"). Unless otherwise indicated, all capitalized terms herein are used as defined in the Agreement. 1. Section 7.02(h) of the Agreement provides that the Borrower and its subsidiaries (a) may not dispose of any real property (except for certain specified parcels), unless all of the Lenders consent, and (b) may not dispose of other assets (except inventory and obsolete items, as described therein), unless such sales aggregate less than $10,000,000 per year and the Aggregate Commitment of the Lenders under the Agreement is permanently reduced by the amount of all such proceeds in excess of $2,000,000 per year. 2. Notwithstanding the provisions of Section 7.02(h), the Borrower wishes to enter into a sale/lease back transaction in an amount of up to $30,000,000 with respect to approximately 20 restaurant properties on terms and conditions substantially consistent with the commitment letter dated July 28, 1999, from CNL Fund Advisors, Inc. to the Borrower, and the First Amendment thereto dated September 16, 1999 from CNL American Properties Fund, Inc., as successor by merger to CNL Fund Advisors, Inc. (collectively, the "Commitment Letter"), provided to the Agent, without reducing the Aggregate Commitment (the "Proposed Transaction"). The Borrower has asked the Lenders not to exercise any of their rights or remedies under the Loan Documents as a result of, and to waive any Default and/or Event of Default caused by, the Proposed Transaction. 3. The Lenders hereby agree not to enforce their rights or remedies under the Loan Documents as a result of, and hereby waive any Default and/or Event of Default caused by, the Proposed Transaction, subject to the terms and conditions set forth below. 4. In consideration of the foregoing waiver, the Borrower hereby agrees that from the date hereof through the Maturity Date, neither the Borrower nor its subsidiaries shall purchase, redeem or otherwise acquire for value any shares of capital stock of the Borrower (or exchange shares of one class of capital stock of the Borrower for another) without the prior written consent of all of the Lenders, if the aggregate value of all such stock acquired or exchanged during such period would exceed the lesser of (a) $30,000,000 or (b) the net proceeds to the Borrower of the Proposed Transaction. 5. This letter shall not be effective until each of the following items have been executed and have been delivered to the Agent: (a) this letter signed by the Borrower, the Agent and the Lenders; (b) the fully executed Commitment Letter; and (c) such other documents as the Agent may reasonably request. 6. Except as expressly set forth above, the Borrower agrees that this letter does not constitute a waiver of, or a consent to, any present or future violation of or noncompliance with any provision of any Loan Document, or a waiver of the Agent's and the Lenders' right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents, and the Loan Documents shall continue to be binding upon, and inure to the benefit of, the Borrower, the Agent and the Lenders and their respective successors and assigns. 7. The Borrower represents and warrants to the Agent and the Lenders that (a) the execution and delivery of this letter have been authorized by all requisite corporate action on its part and will not violate its organizational documents, (b) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof (except to the extent that (i) such representations and warranties speak to a specific date or (ii) the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents or this letter), (c) it is in full compliance with all covenants and agreements contained in each Loan Document to which it is a party, (d) the final terms and conditions of the Proposed Transaction are substantially consistent with the Commitment Letter, and (e) the final documentation for the Proposed Transaction shall be substantially similar to, and on terms no less favorable to the Borrower and its subsidiaries than, the forms of Purchase Agreement, Lease Agreement, Rent Addendum, Memorandum of Lease and Assignment of Contract provided by the Borrower to the Agent on October 20, 1999. 8. This letter is a Loan Document, and, therefore, this letter is subject to the applicable provisions of Article IX of the Agreement, all of which applicable provisions are incorporated herein by reference the same as if set forth herein verbatim. Except as affected by this letter, the Loan Documents are unchanged and continue in fall force and effect. The Borrower agrees that all Loan Documents to which it is a party remain in full force and effect and continue to evidence its legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this letter). The Borrower hereby releases the Agent and the Lenders from any liability for actions or failures to act in connection with the Loan Documents prior to the date hereof. This letter shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns. 9. This letter may be executed in more than one counterpart, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. 10. The Borrower agrees to pay the reasonable fees and expenses of counsel to the Agent rendered in connection with the preparation, negotiation and execution of this letter. 11. THE LOAN DOCUMENTS, AS AMENDED HEREBY, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED By EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES. 2 If you are in agreement with the foregoing, please so indicate by executing the enclosed counterparts of this letter in the spaces provided below and returning them to the Agent to the attention of the officer named below. Very truly yours, BANK OF AMERICA, N.A. U.S. BANK NATIONAL ASSOCIATION By:/s/ Richard G. Parkhurst, Jr. By:/s/ Andrea C. Koeneke ----------------------------- --------------------------- Richard G. Parkhurst, Jr. Name: Andrea C. Koeneke Managing Director Title: Vice President AGREED AND ACCEPTED: VICORP RESTAURANTS, INC. By:/s/ Michael R. Kinnen --------------------- Michael R. Kinnen Treasurer 3 November 22, 1999 VICORP Restaurants, Inc. 400 West 48th Avenue Denver, Colorado 80216 Attention: Stanley Ereckson, Jr. Re: Third Amendment to Amended and Restated Credit Agreement Ladies and Gentlemen: Reference is made to this certain $40,000,000 Amended and Restated Credit Agreement dated as of December 19, 1997, as modified by the First Amendment dated October 5, 1998, the Second Amendment dated as of November 18, 1998, and the Waiver Letter dated October 22, 1999 (collectively, the "Agreement"), among VICORP Restaurants, Inc. (the "Borrower"), the financial institutions named therein as lenders (the "Lenders"), and Bank of America, N.A., successor by merger with NationsBank, N.A., as Agent for the Lenders (the "Agent"). Unless otherwise indicated, all capitalized terms herein are used as defined in the Agreement. Whereas, the Borrower has informed the Lenders of the Borrower's intent to offer to purchase up to 2,000,000 shares (subject to adjustment for over-subscription) of the Borrower's common stock on substantially the terms and conditions set forth in the Draft Offer To Purchase dated November 19, 1999 (the "Tender Offer"), notwithstanding the provisions of the Agreement; and Whereas, the Lenders are willing to allow the Borrower to proceed with the Tender Offer, subject to the terms and conditions set forth herein; Now, therefore and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrower, the Agent and the Lenders agree as follows: 1. Consent to Tender Offer. The Lenders hereby consent to the Tender Offer and ----------------------- waive any Default or Event of Default which would otherwise result from the Tender Offer. 2. Definitions. Section 1.01 of the Agreement is hereby amended by adding the ----------- following new definition in its appropriate alphabetical order: "Tender Offer" means the offer by the Borrower to purchase up to 2,000,000 shares (subject to adjustment for over-subscription) of its common stock on substantially the terms and conditions set forth in the Draft Offer to Purchase dated November 19, 1999. 3. Year 2000 Compliant. Section 6.01 of the Agreement is hereby amended by ------------------- adding the following new subsection (o) to the end of such Section: (o) The Borrower has: (i) initiated a review and assessment of its and its subsidiaries' business and operations (including third parties considered critical to the Borrower's and its subsidiaries' operations) that could be adversely affected by the "Year 2000 Problem" (that is, the risk that computer applications used by Borrower or any of its subsidiaries (or such third parties) may be unable to recognize and perform properly date- sensitive functions involving certain dates prior to, and any date after, December 31, 1999); (ii) developed a plan and timeline for addressing the Year 2000 Problem on a timely basis; and (iii) to date, implemented or are implementing that plan in accordance with that timetable. Based on the foregoing, the Borrower believes that all critical computer applications that are material to the Borrower's or any of its subsidiaries' business and operations are reasonably expected on a timely basis to be able to perform properly date-sensitive functions for all dates before and after January 1, 2000, except to the extent that a failure to do so could not reasonably be expected to have a material adverse effect on the financial condition or operations of the Borrower and its subsidiaries. 4. Use of proceeds. Section 7.01(j) of the Agreement is hereby amended to --------------- read in its entirety as follows: (j) Use of Proceeds. The Borrower will use the proceeds of the --------------- Advances only to repay its obligations under the NationsBank Agreement, for working capital, capital expenditures and other general corporate purposes (including the purchase of shares of the Borrower's capital stock pursuant to the Tender Offer), and for Permitted Asset Acquisitions. 5. Loans, Advances, Investments. Section 7.02(k) of the Agreement is hereby ---------------------------- amended by adding the following at the end of such Section: and repurchases of the Borrower's capital stock pursuant to the Tender Offer. 6. Minimum Consolidated Tangible Net Worth. Effective upon the consummation of --------------------------------------- the Tender Offer, Section 7.03(b) of the Agreement is hereby amended in its entirety to read as follows: (b) Minimum Consolidated Tangible Net Worth. Maintain Consolidated --------------------------------------- Tangible Net Worth, determined as of the last day of each fiscal quarter, of at least (i) $90,000,000, plus (ii) an amount equal to the greater of zero and 50% of the consolidated net earnings after taxes of the Borrower and its subsidiaries determined in accordance with GAAP for the period (taken as a single accounting period) from and including November 1, 1999, to and including such day, plus (iii) an amount equal to 75% of any Net Equity Issuance Proceeds for the period (taken as a single accounting period) from and including November 1, 1999, to and including such day. 7. Minimum Fixed Charge Coverage Ratio. Effective upon the consummation of the ----------------------------------- Tender Offer, Section 7.03(d) of the Agreement is hereby amended to read in its entirety as follows: (d) Minimum Fixed Charge Coverage Ratio. Maintain a ratio of (i) ----------------------------------- Adjusted Consolidated EBITDAR to (ii) the sum of Consolidated Fixed Charges plus the cash value of any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of preferred stock of the Borrower made by the Borrower or any of its subsidiaries, determined in each case as of the last day of each fiscal quarter for the four fiscal quarters ending on such day, of at least 1.50 to 1. 2 8. Covenant to Provide Pro Forma Financial Information. Prior to the --------------------------------------------------- consummation of the Tender Offer, the Borrower shall provide the Lenders with a certificate setting forth the pro forma effect of the Tender offer on the consolidated balance sheet of the Borrower and its subsidiaries. 9. Conditions. This letter shall not be effective if a material adverse change ---------- has occurred and until each of the following items have occurred or been delivered to the Agent: (a) this letter signed by the Borrower and the Majority Lenders; (b) the letter agreement between the Borrower and the Agent of even date herewith, concerning certain fees and other related matters (the "Fee Letter"); and (c) such other documents, if any, as the Agent may reasonably request. 10. No Waiver of Defaults. Except as expressly set forth above, the Borrower --------------------- agrees that this letter does not constitute a waiver of, or a consent to, any present or future violation of or noncompliance with any provision of any Loan Document, or a waiver of the Agent's and the Lenders' right to insist upon future compliance with each term, covenant, condition and provision of the Loan Documents, and the Loan Documents shall continue to be binding upon, and inure to the benefit of, the Borrower, the Agent and the Lenders and their respective successors and assigns. 11. Representations and Warranties. The Borrower represents and warrants to the ------------------------------ Agent and the Lenders that (a) the execution and delivery of this letter have been authorized by all requisite corporate action on its part and will not violate its organizational documents, (b) the representations and warranties in each Loan Document to which it is a party are true and correct in all material respects on and as of the date hereof as though made on and as of the date hereof (except to the extent that (i) such representations and warranties speak to a specific date or (ii) the facts on which such representations and warranties are based have been changed by transactions contemplated by the Loan Documents or this letter), and (c) it is in full compliance with all covenants and agreements contained in each Loan Document to which it is a party. 12. Loan Document; Effect. This letter is a Loan Document, and, therefore, this --------------------- letter is subject to the applicable provisions of Article IX of the Agreement, all of which applicable provisions are incorporated herein by reference the same as if set forth herein verbatim. Except as affected by this letter, the Loan Documents are unchanged and continue in full force and effect. The Borrower agrees that all Loan Documents to which it is a party remain in full force and effect and continue to evidence its legal, valid, and binding obligations enforceable in accordance with their terms (as the same are affected by this letter). The Borrower hereby releases the Agent and the Lenders from any liability for actions or failures to act in connection with the Loan Documents prior to the date hereof. This letter shall be binding upon and inure to the benefit of each of the undersigned and their respective successors and permitted assigns. 13. Multiple Counterparts. This letter may be executed in more than one --------------------- counterpart, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. 14. Fees and Expenses. The Borrower agrees to pay the reasonable fees and ----------------- expenses of counsel to the Agent rendered in connection with the preparation, negotiation and execution of this letter and the Fee Letter. 3 15. Final Agreement. This letter supercedes the Third Amendment to the Amended --------------- and Restated Credit Agreement dated November 8, 1999, which is hereby declared null and void. The Loan Documents, as amended hereby, represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no oral agreements between the parties. If you are in agreement with the foregoing, please so indicate by executing the enclosed counterparts of this letter in the spaces provided below and returning them to the Agent to the attention of the officer named below. Very truly yours, BANK OF AMERICA, N.A. U.S. BANK NATIONAL ASSOCIATION By: /s/ Richard G. Parkhurst, Jr. By: /s/ Andrea C. Koeneke ------------------------------ ------------------------- Richard G. Parkhurst, Jr. Andrea C. Koeneke Managing Director Vice President AGREED AND ACCEPTED: VICORP RESTAURANTS, INC. By: /s/ Michael R. Kinnen ------------------------ Michael R. Kinnen Treasurer 4 -----END PRIVACY-ENHANCED MESSAGE-----