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EXHIBIT 4.12
EXECUTION
AMERICAN RESTAURANT GROUP
LIMITED WAIVER AND SIXTH AMENDMENT
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS LIMITED WAIVER AND SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (this "AMENDMENT") is dated as of August 26, 1996, and entered into by
and among AMERICAN RESTAURANT GROUP, INC., a Delaware corporation ("COMPANY"),
the Subsidiaries of Company listed on the signature pages hereof (the "WORKING
CAPITAL BORROWERS"), the financial institutions listed on the signature pages
hereof ("LENDERS") and BANKERS TRUST COMPANY, as agent for Lenders ("AGENT"),
and, for purposes of Section 3 hereof, Local Favorite, Inc., a California
corporation, and is made with reference to that certain Amended and Restated
Credit Agreement, dated as of December 13, 1993, as amended by that certain
Limited Waiver and First Amendment to Amended and Restated Credit Agreement
dated as of March 23, 1994, that certain Second Amendment to Amended and
Restated Credit Agreement dated as of May 10, 1994, that certain Limited Waiver
and Third Amendment to Amended and Restated Credit Agreement dated as of March
17, 1995, and that certain Limited Waiver and Fourth Amendment to Amended and
Restated Credit Agreement dated as of November 1, 1995, and that certain Limited
Waiver and Fifth Amendment to Amended and Restated Credit Agreement dated as of
February 27, 1996 (the "CREDIT AGREEMENT"), by and among Company, the Working
Capital Borrowers, Lenders and Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Borrowers have requested Lenders to extend the maturity date of
the Working Capital Commitments from June 30, 1996 to August 29, 1996 and to
extend the maturity date of the Facility Letter of Credit Commitments from
September 30, 1996 to March 31, 1997, and Lenders have agreed to make such
extensions subject to the terms and conditions set forth herein;
WHEREAS, Company is entering into supplemental indentures amending certain
terms of the Exchange Note Indenture and the New Senior Note Indenture and an
amendment to the Subordinated Loan Agreement concurrently with entering into
this Amendment, which amendments require the consent of Agent and Requisite
Lenders;
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WHEREAS, Borrowers have further requested Lenders to amend certain
covenants in the Credit Agreement and Lenders have agreed to such amendments;
and
WHEREAS, Borrowers have further requested Lenders to waive compliance with
certain covenants in the Credit Agreement and Lenders have agreed to such
waivers;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1.
AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 1.1.
Subsection 1.1 of the Credit Agreement is hereby amended as follows:
(a) Subsection 1.1 of the Credit Agreement is hereby amended by
amending the definitions of "Asset Sales", "Commitments", "Consolidated
Adjusted EBITDA", "Net Cash Proceeds of Asset Sale" and "Net Cash Proceeds
of Fee Collateral Sale" to read in their
entirety as follows:
`ASSET SALE' means the sale, lease, assignment or other
transfer for value by any Loan Party or any of its Subsidiaries
(including, without limitation, any Sale/leaseback) to any Person of
(i) any of the stock of any Subsidiary of any Loan Party or any of
its Subsidiaries, (ii) all or substantially all of the assets of any
division or line of business of any Loan Party or any of its
Subsidiaries, or (iii) any other assets or rights, or related group
of assets or rights, of any Loan Party or any of its Subsidiaries
having a book value or sales price in excess of $150,000 (it being
under stood that if the book value or sales price thereof exceeds
$150,000, the entire value and not just the portion thereof in
excess of $150,000 shall be subject to subsection 2.5A(ii)(a) and
2.5A(iii)) other than the trade-in or replacement of assets for or
with assets of comparable value in the ordinary course of business
of Loan Parties; provided that the sale or other transfer of assets
from Company or any Working Capital Borrower to any Working Capital
Borrower shall not constitute an Asset Sale.
`COMMITMENTS' means the Working Capital Commitments of Lenders
as set forth in subsection 2.2A and the Facility Letter of Credit
Commitments as set forth in subsection 2.10A and the Swing Line Loan
Commitment of Bankers as set forth in subsection 2.2B."
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`CONSOLIDATED EBITDA' means, for any period, the sum (without
duplication) of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) to
the extent Consolidated Net Income has been reduced thereby,
amortization expense, depreciation expense, and other non-cash
expenses, (v) losses on Asset Sales, (vi) losses on sales or
Sale/leasebacks of Fee Collateral, (vii) to the extent Consolidated
Net Income has been reduced thereby, Designated Transaction Fees,
(viii) Consolidated Rental Expense attributable to Operating Leases
entered into in connection with Sale/leasebacks consummated pursuant
to subsections 5.19 and 5.20, and (ix) other non-cash items reducing
Consolidated Net Income (excluding any non-cash charges in an
aggregate amount not to exceed $6.7 million taken by Company in
connection with the closing of certain of its restaurants and the
writeoff of certain prepaid advertising costs) less the sum (without
duplication) of (a) gains on sale or Sale/leasebacks of Fee
Collateral, (b) gains on Asset Sales and (c) other non-cash items
increasing Consolidated Net Income, all as determined on a
consolidated basis for Company and its Subsidiaries in conformity
with GAAP."
`NET CASH PROCEEDS OF ASSET SALE' means Cash Proceeds
received from any Asset Sale (other than a sale of Fee Collateral)
net of (i) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees
and sales commissions), (ii) taxes paid or payable ((a) including,
without limitation, income taxes reasonably estimated to be actually
payable as a result of such Asset Sale within two years of the date
of the Asset Sale and (b) but after taking into account any
reduction in tax liability due to available tax credits or
deductions and any tax sharing arrangements), (iii) amounts required
to be applied to the repayment of Indebtedness (including any
Obligations required to be paid pursuant to subsection 2.5A(iv) but
excluding all other Obligations) secured by a Lien on the asset or
assets which are the subject of such Asset Sale, (iv) any reasonable
reserve for adjustment in respect of the sale price of such asset or
assets; and (v) with respect to the Asset Sale described in
subsection 5.19, Designated Transaction Fees.
`NET CASH PROCEEDS OF FEE COLLATERAL SALE' means Cash
Proceeds (including any cash received by way of deferred payment
pursuant to, or monetization of, a note receivable or otherwise, but
only as and when so received and excluding the portion of such
deferred payment which constitutes interest, which portion shall be
deemed not to constitute Net Cash Proceeds of Fee Collateral Sale)
received from any sale or Sale/leaseback of Fee Collateral net of
(i) the direct costs relating to such sale or Sale/leaseback
(including, without limitation, legal, accounting, investment
banking fees, sales commissions, survey expenses and title insurance
fees paid by Company or any of its Subsidiaries), (ii) taxes paid or
payable ((a) including, without limitation, income taxes reasonably
estimated to be actually
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payable as a result of such sale or Sale/leaseback of Fee Collateral
within two years of the date of the sale or Sale/leaseback of Fee
Collateral and (b) but after taking into account any reduction in
tax liability due to available tax credits or deductions and any tax
sharing arrangements), (iii) amounts required to be applied to the
repayment of Indebtedness (including, if applicable, any Obligations
required to be paid pursuant to subsection 2.5A(iv) but excluding
all other Obligations) secured by a Lien on the asset or assets the
subject of such sale or Sale/leaseback, (iv) any reasonable reserve
for adjustment in respect of the sale price of or prorations
pertaining to such asset or assets; and (v) with respect to the
Asset Sale described in subsection 5.19, Designated Transaction
Fees."
(b) Subsection 1.1 of the Credit Agreement is hereby further
amended by adding the following definitions, which shall be inserted in
proper alphabetical order:
`DESIGNATED TRANSACTION FEES' means the consent, advisory
and legal fees paid by Company in connection with (i) the
Supplemental Indentures, (ii) the First Amendment to the
Subordinated Loan Agreement, and (iii) the Sixth Amend ment, all
such fees and any other costs, fees and expenses specified in the
Supplemental Indentures, the First Amendment to Subordinated Loan
Agreement and the First Amendment to the MLIF Registration Rights
Agreement in an aggregate amount not to exceed $4,500,000, all as
set forth in reasonable detail in an Officer's Certificate delivered
to Agent.
`FIRST AMENDMENT TO MLIF REGISTRATION RIGHTS AGREEMENT' means
the First Amendment to the MLIF Registration Rights Agreement, dated
as of August 19, 1996.
`FIRST AMENDMENT TO SUBORDINATED LOAN AGREEMENT' means the
First Amendment to the Subordinated Loan Agreement, dated as of
August 19, 1996.
`SIXTH AMENDMENT' means the Limited Waiver and Sixth Amendment
to this Agreement, dated as of August 26, 1996.
`SIXTH AMENDMENT EFFECTIVE DATE' means the date, on or before
August 29, 1996, upon which all of the conditions set forth in
Section 6 of the Sixth Amendment shall have been satisfied or
waived.
`SUPPLEMENTAL INDENTURES' means the Second Supplemental
Indenture to the Exchange Note Indenture and the First Supplemental
Indenture to the New Senior Note Indenture, each dated as of August
28, 1996, and in the forms delivered to Agent and Lenders prior to
the execution of the Limited Waiver and Sixth Amendment to this
Agreement."
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1.2 AMENDMENT TO SUBSECTION 2.2: WORKING CAPITAL AND SWINGLINE LOANS.
Subsection 2.2 of the Credit Agreement is hereby amended by deleting all
references to "June 30, 1996" contained in subsections 2.2A and 2.2B thereof and
substituting "August 29, 1996" therefor.
1.3 AMENDMENT TO SUBSECTION 2.3: INTEREST ON LOANS.
Subsection 2.3B(v) of the Credit Agreement is hereby amended by deleting
the reference to "June 30, 1996" contained therein and substituting "August 29,
1996" therefor.
1.4 AMENDMENT TO SUBSECTION 2.4: FEES.
Subsection 2.4 of the Credit Agreement is hereby amended as follows:
(a) Clause (iii) of subsection 2.4 is hereby amended to read in
its entirety as follows:
"(iii) for distribution to each Facility L/C Lender in
proportion to that Facility L/C Lender's Pro Rata Share of the
Facility Letter of Credit Commitments, a fee payable for the period
from and including the first day of the third Fiscal Quarter of 1996
through but excluding the Sixth Amendment Effective Date equal to
(x) the average of the daily amount of the Facility Letter of Credit
Commitments multiplied by (y) one quarter of one percent, such fee
to be due and payable in arrears on the Sixth Amendment Effective
Date."
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(b) Subsection 2.4 is hereby further amended by adding the
following subsection 2.4E thereto:
"E. AMENDMENT FEES IN CONNECTION WITH THE SIXTH AMENDMENT.
Borrowers jointly and severally agree to pay to Agent (i) for
distribution to each Lender in proportion to that Lender's Pro Rata
Share, an amendment fee equal to one percent of the Working Capital
Commitments and Facility Letter of Credit Commitments as of the
Sixth Amendment Effective Date, 50% of such fee to be due and
payable on the Sixth Amendment Effective Date and 50% of such fee to
be due and payable upon the consummation of the sale of the Black
Angus restaurants referenced in subsection 5.19, and (ii) if the
Facility Letter of Credit Commitments are extended on August 29,
1996 in accordance with subsection 2.10A and are not terminated on
or before February 14, 1997, for distribution to each Facility L/C
Lender in proportion to that Facility L/C Lender's Pro Rata Share of
the Facility Letter of Credit Commitments, a fee equal to the
Facility Letter of Credit Commitments as of February 14, 1997 less
the amount of cash Collateral held by Agent to cash collateralize
outstanding Facility Letters of Credit as of such date multiplied by
one percent, such fee to be due and payable on February 14, 1997."
1.5 AMENDMENTS TO SUBSECTION 2.5.: PREPAYMENTS AND PAYMENTS; REDUCTIONS IN
COMMITMENTS.
Subsection 2.5 of the Credit Agreement is hereby amended as follows:
(a) The last sentence of subsection 2.5A(ii)(a) is hereby amended
to read in its entirety as follows:
"Notwithstanding anything in this subsection 2.5A(ii)(a) to
the contrary, to the extent Borrowers receive Net Cash Proceeds of
Asset Sales in excess of the Lenders' Share of Net Cash Proceeds of
Asset Sales which are not applied to the redemption of Senior Notes
in accordance with the terms of the Senior Note Indenture ("EXCESS
ASSET SALE PROCEEDS"), Borrowers shall further prepay the Loans in
an amount equal to such Excess Asset Sale Proceeds in accordance
with this subsection 2.5(A)(ii)(a); provided Borrowers may retain up
to an aggregate of $8,000,000 of the Excess Asset Sale Proceeds
received after the Sixth Amendment Effective Date (excluding
Designated Transaction Fees) to the extent permitted under the
Senior Note Indenture as amended by the Supplemental Indentures and
so long as such Excess Asset Sale Proceeds are reinvested in
Productive Assets (as defined in the Senior Note Indenture) which
are pledged to the Collateral Agent under the Collateral Documents."
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(b) Subsection 2.5A(iii)(b) is hereby amended to read in its
entirety:
"(b) Application of Mandatory Prepayments. Mandatory
prepayments required pursuant to subsections 2.5A(ii)(a), (b), (c),
(d), (e), (f) and (h) and 2.5A(v) (shall be applied (1) first, to
prepay Working Capital Loans, together with interest thereon to the
full extent thereof, (2) second, to prepay Facility L/C
Reimbursement Obligations to the full extent thereof, together with
accrued interest and (3) third, to cash collateralize any
outstanding Facility Letters of Credit which have not been drawn or
returned undrawn to the full extent thereof. Any amounts required to
be applied to cash collateralize outstanding Facility Letters of
Credit pursuant to this subsection 2.5A(iii)(b) shall be held by
Agent in a blocked deposit account. So long as no Event of Default
has occurred or is continuing, the funds in such account may be
invested at the direction of Company in Cash Equivalents having a
maturity no later than October 15, 1996 or if the Facility Letter of
Credit Commitments are extended in accordance with subsection 2.10A,
March 31, 1997. Upon receipt of a written request from Company,
Agent will transfer funds being held as cash collateral for the
Facility Letters of Credit to a beneficiary of a Facility Letter of
Credit provided that such Facility Letter of Credit is simulta-
neously reduced in an amount equal to the funds so transferred."
(c) Subsection 2.5A(v) is hereby amended to read in its entirety
as follows:
"(v) Additional Prepayments of Working Capital Loans and Cash
Collateralization of Facility Letters of Credit following Sixth
Amendment Effective Date. Notwithstanding anything in this Agreement
to the contrary, upon receipt of any Net Cash Proceeds from any
Asset Sales described in subsections 5.19 and 5.20, Working Capital
Borrowers shall (unless subsection 2.5A(iv) is applicable thereto in
which case such Net Cash Proceeds shall be applied in accordance
with subsection 2.5A(iv)) apply the Lenders' Share of such Net Cash
Proceeds in accordance with subsection 2.5A(iii)(b)."
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(d) Subsection 2.5H is hereby amended to read in its entirety as
follows:
"H. MANDATORY REDUCTIONS OF WORKING CAPITAL COMMITMENTS AND FACILITY
LETTER OF CREDIT COMMITMENTS. The Working Capital Commitments shall
be permanently reduced by the amount of any prepayments of Working
Capital Loans made pursuant to subsection 2.5A. The Facility Letter
of Credit Commitments shall be permanently reduced in the amount of
any payment of Facility L/C Reimbursement Obligations pursuant to
subsection 2.5A. The Working Capital Commitments and Facility Letter
of Credit Commitments shall further be permanently reduced in
accordance with the provisions of subsection 2.5A(iv). Any
Commitment reductions pursuant to this subsection 2.5H shall reduce
the applicable Commitments of each Lender proportionately to such
Lenders' Pro Rata Share of the applicable Commitments."
1.6 AMENDMENTS TO SUBSECTION 2.10: FACILITY LETTERS OF CREDIT.
(a) Subsection 2.10A of the Credit Agreement is hereby amended by
deleting all references to "September 30, 1996" contained therein and
substituting "October 15, 1996" therefor.
(b) Subsection 2.10A of the Credit Agreement is hereby amended by
adding the following paragraph at the end of such subsection:
"If (i) all of the outstanding Working Capital Loans are paid
in full and the Working Capital Commitments terminated on or before
August 29, 1996, and (ii) no Event of Default or Potential Event of
Default shall have occurred and be continuing as of such date, then
the maturity date of the Facility Letter of Credit Commitments shall
be extended from October 15, 1996 to March 31, 1997, and all
references to October 15, 1996 contained in this subsection 2.10A
shall be deemed references to March 31, 1997."
1.7 AMENDMENT TO SUBSECTION 2.11: LETTERS OF CREDIT GENERALLY.
Subsection 2.11A(2) of the Credit Agreement is hereby amended to read in
its entirety as follows:
"(2) a commission equal to 3.5% per annum of the maximum amount
available from time to time to be drawn under such Letter of Credit,
payable in arrears on and to (but not including) each February 28, May 31,
August 31 and November 30 of each year, commencing on August 31, 1996 for
the period from and including the Sixth Amendment Effective Date to but
not including August 31, 1996;"
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1.8 AMENDMENT TO SUBSECTION 5.17: SALE OF GRANDY'S.
Subsection 5.17 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"5.17 [INTENTIONALLY OMITTED.]"
1.9 AMENDMENT TO SUBSECTION 5.19: SALE OF CERTAIN BLACK ANGUS RESTAURANTS.
Subsection 5.19 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"5.19 SALE OF CERTAIN BLACK ANGUS RESTAURANTS.
Company shall on or before August 29, 1996, consummate the sale of
certain Black Angus restaurants to an unaffiliated third-party purchaser
for an aggregate purchase price of not less than $48,000,000 and Net Cash
Proceeds of not less than $43,500,000 pursuant to documentation which
shall be in form and substance reasonably satisfactory to Requisite
Lenders. Notwithstanding anything in subsection 6.8 to the contrary,
Company may leaseback the Black Angus restaurants sold pursuant to this
subsection 5.19, provided that all documentation relating to both the sale
and the leaseback of such restaurants is in form and substance reasonably
satisfactory to Requisite Lenders. Notwithstanding anything in subsections
6.4 and 6.8 to the contrary, Company may guarantee the lease obligations
of ARG Enterprises, Inc. in connection with the leaseback of such
restaurants, provided that all documentation relating to the guarantees of
such leases in connection with the leaseback of such restaurants is in
form and substance reasonably satisfactory to Requisite Lenders. Requisite
Lenders' approval of the documentation relating to the Asset Sales
contemplated by this subsection 5.19 and subsection 5.20 shall constitute
Requisite Lenders' consent to such Asset Sales for purposes of subsection
6.7B(ii)."
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1.10 AMENDMENT TO SECTION 5: AFFIRMATIVE COVENANTS.
Section 5 of the Credit Agreement is hereby amended to add the following
subsection 5.20 thereto:
"5.20 CONSUMMATION OF OTHER ASSET SALES.
Company shall in the period from July 15, 1996 to December 31, 1996,
consummate Asset Sales in addition to the Asset Sale contemplated by
subsection 5.19 to one or more unaffiliated third-party purchasers (or to
an Affiliate other than Holdings or a Subsidiary of Company provided
Company delivers to Agent an opinion from an independent financial advisor
reasonably acceptable to Agent and Requisite Lenders that the Company is
receiving fair market value for the assets subject to such sale) for
aggregate Net Cash Proceeds of not less than $25,000,000 which shall be
applied in accordance with subsection 2.5A(v), such Asset Sales to be in
form and substance and pursuant to documentation reasonably satisfactory
to Requisite Lenders. Notwithstanding anything in subsection 6.8 to the
contrary, Company may leaseback restaurants sold pursuant to this
subsection 5.20."
1.11 AMENDMENTS TO SUBSECTION 6.1: INDEBTEDNESS.
(a) Subsection 6.1(iv) is hereby amended to read in its entirety as
follows:
"(iv) Loan Parties and their Subsidiaries may become and remain
liable with respect to (a) Capital Leases entered into in connection
with Sale/leasebacks permitted by subsections 5.19 and 5.20 and (b)
Capital Leases if such Capital Leases would be permitted under
subsection 6.6F, provided that (1) the aggregate principal amount
incurred pursuant to clause (iv)(b) in any Fiscal Year shall not
exceed $5,000,000 (provided that any unused amounts may be carried
forward to the next two (but not any subsequent) Fiscal Years) and
(2) the aggregate principal amount incurred pursuant to clause
(iv)(b) at any time outstanding shall not exceed $15,000,000;"
(b) Subsection 6.1 of the Credit Agreement is further hereby amended by
deleting the reference to "December 31, 1995" in clause (ix) thereof and
substituting "March 31, 1997" therefor."
1.12 AMENDMENTS TO SUBSECTION 6.6: FINANCIAL COVENANTS.
Subsection 6.6 of the Credit Agreement is hereby amended as follows:
(a) Subsection 6.6A is hereby amended to read in its entirety as
follows:
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"Company and its Subsidiaries shall not permit Consolidated
EBITDA as of the last day of any Fiscal Quarter for the two
consecutive Fiscal Quarter period ended on such day to be less than
$13,000,000.
Company and its Subsidiaries further shall not permit
Consolidated EBITDA (i) as of the last day of the second Fiscal
Quarter of 1996 for the two consecutive Fiscal Quarter period ended
as of such date to be less than $18,000,000, (ii) as of the last day
of the third Fiscal Quarter of 1996 for the three consecutive Fiscal
Quarter period ended as of such date to be less than $23,000,000,
(iii) as of the last day of the fourth Fiscal Quarter of 1996 for
the four consecutive Fiscal Quarters period ended as of such date to
be less than $33,000,000 and (iv) as of the last day of the first
Fiscal Quarter of 1997 for the four consecutive Fiscal Quarter
period ended as of such date to be less than $34,000,000."
(b) Subsection 6.6B is hereby amended to read in its entirety as
follows:
"[Intentionally Omitted]".
(c) Subsection 6.6C is hereby amended to read in its entirety as
follows:
"[Intentionally Omitted]".
(d) Subsection 6.6D is hereby amended to read in its entirety as
follows:
"[Intentionally Omitted]".
(e) Subsection 6.6E is hereby amended to read in its entirety as
follows:
"[Intentionally Omitted]".
(f) Subsection 6.6F is hereby amended by deleting such
subsection in its entirety and substituting the following therefor:
"Company and its Subsidiaries shall not permit Consolidated
GAAP Capital Expenditures as of the last day of each Fiscal Quarter
shown below to exceed the correlative amount indicated (the "MAXIMUM
CAPITAL EXPENDITURE AMOUNT"); provided that if the Maximum Capital
Expenditures Amount for any Fiscal Quarter exceeds the actual
Consolidated GAAP Capital Expenditure for such Fiscal Quarter, the
amount of such excess may be carried forward and added to the
Maximum Capital Expenditures Amount permitted for succeeding Fiscal
Quarters:
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Maximum Capital
Fiscal Quarter Expenditure Amount
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First Fiscal Quarter 1996 $3,000,000
Second Fiscal Quarter 1996 $4,000,000
Third Fiscal Quarter 1996 $4,000,000
Fourth Fiscal Quarter 1996 $4,000,000
First Fiscal Quarter 1997 $4,000,000
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To the extent Company and its Subsidiaries use net cash proceeds
received from Sale/leasebacks permitted pursuant to subsection 6.8 to make
Consolidated GAAP Capital Expenditures, such Consolidated GAAP Capital
Expenditures shall be disregarded for purposes of determining compliance
with this subsection 6.6F."
(g) Subsection 6.6 is hereby amended by adding the following
subsections 6.6G and 6.6H thereto:
"G. MAXIMUM CONSOLIDATED TOTAL DEBT.
Company and its Subsidiaries shall not permit Consolidated
Total Debt (excluding Capital Leases entered into in connection
with Sale/leasebacks permitted under subsections 5.19 and 5.20) as
of the last day of any Fiscal Quarter to exceed $250,000,000 less
the aggregate amount of all repayments made of the Loans and the
Senior Notes in connection with the Sixth Amendment and the
Supplemental Indentures and at any time after the Sixth Amendment
Effective Date."
"H. MAXIMUM OPERATING LEASE EXPENSE.
Company and its Subsidiaries shall not permit the aggregate amount
of all rents paid by Company and its Subsidiaries on a
consolidated basis during any four Fiscal Quarter period under
all Operating Leases of Company and its Subsidiaries
(excluding Operating Leases entered into in connection with
Sale/leasebacks permitted under subsections 5.19 and 5.20) to
exceed $24,000,000."
1.13 AMENDMENT TO SUBSECTION 6.8
Subsection 6.8 of the Credit Agreement is hereby amended to read in its
entirety as follows:
"No Loan Party will, nor will it permit any of its Subsidiaries,
directly or indirectly,
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to become or remain liable as a lessee or as a guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease
of any property (whether real or personal or mixed) whether now owned or
hereafter acquired, (i) that such Loan Party or its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person (other than
another Loan Party) or (ii) that such Loan Party or its Subsidiaries
intends to use for substantially the same purpose as any other property
that has been or is to be sold or transferred by such Loan Party or any
such Subsidiary to any Person (other than another Loan Party) in
connection with such lease (a "SALE/LEASEBACK"). Notwithstanding the
foregoing, Loan Parties may enter into Sale/leasebacks of restaurants
(including the real property on which such restaurant is located and any
furniture, fixtures and equipments located at such restaurants
(collectively, "RESTAURANT PROPERTIES" and each individually, a
"RESTAURANT PROPERTY"); provided, that (i) any such sale is for the fair
market value of the Restaurant Property, (ii) all of the consideration for
such sale is paid in cash, (iii) the aggregate net proceeds from such sale
shall be reinvested in assets of a kind used or usable in the business of
the Loan Parties within 180 days of receipt, (iv) the aggregate cumulative
value of all Restaurant Properties subject to Sale/leasebacks on or after
the Sixth Amendment Effective Date shall not exceed $10,000,000 (with the
value of each Restaurant Property to be deemed the greater of the cost or
fair market value of such Restaurant Property), (v) the lease, whether an
Operating Lease or Capital Lease, shall otherwise be permitted under this
Agreement and (vi) such Restaurant Property was acquired by the Loan
Parties on or after the Sixth Amendment Effective Date and the
Sale/leaseback of the Restaurant Property is consummated within 90 days
after such Restaurant Property has been put into service. Prior to the
consummation of any Sale/leaseback permitted under this subsection 6.8,
Company shall deliver to Agent an Officer's Certificate, in form and
substance reasonably satisfactory to Agent setting forth the following:
(i) the date the Restaurant Property was put in service, (ii) the cost of
the Restaurant Property, (iii) the fair market value of the Restaurant
Property, (iv) the proposed date upon which the Sale/leaseback is to be
consummated and (v) the aggregate cumulative value of all Restaurant
Property subject to Sale/leasebacks prior to the date of the Officer's
Certificate. Any Sale/leasebacks permitted by this subsection 6.8 shall
not be subject to the provisions of the mandatory prepayment provisions of
subsection 2.5A(ii)(a) or 2.5A(ii)(b) or the provisions of 6.7(ii)
governing Asset Sales generally."
1.14 AMENDMENT TO SECTION 6.
Section 6 of the Credit Agreement is hereby amended by adding the
following subsection 6.14 thereto:
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"6.14 COMPENSATION LIMITATIONS.
Company shall not pay compensation to Xxxxx Xxxxxxx or Xxxxx Xxxxxxx
in excess of the amounts permitted to be paid to them under the Senior
Note Indenture as amended by the Supplemental Indentures."
1.15 AMENDMENTS TO SUBSECTION 7.3: BREACH OF CERTAIN COVENANTS.
Subsection 7.3 is hereby amended to read in its entirety as follows:
"Failure of Company or any Working Capital Borrower to conform or
comply with any term or condition contained in subsections 2.5, 2.6. 5.2,
5.6, 5.17, 5.18, 5.19, 5.20 or Section 6; or"
1.16 AMENDMENT TO SUBSECTION 9.7: AMENDMENTS AND WAIVERS.
Subsection 9.7 is hereby amended by amending the fifth sentence thereof to
read in its entirety as follows:
"No amendment, modification, termination or waiver of any provision of
subsection 5.19 or 5.20 shall be effective without the written concurrence
of Lenders having 60% or more of the aggregate amount of the Commitments
or, if the Commitments have been terminated, Lenders having 60% or more of
the aggregate outstanding principal amount of the Loans."
SECTION 2.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend the
Credit Agreement in the manner provided herein, each Loan Party represents and
warrants to each Lender that the following statements are true, correct and
complete:
2.1 CORPORATE POWER AND AUTHORITY.
Each Loan Party has all requisite corporate power and authority to enter
into this Amendment and to carry out the transactions contemplated by, and
perform its obligations under, the Credit Agreement as amended by this Amendment
(the "AMENDED AGREEMENT").
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2.2 AUTHORIZATION OF AGREEMENTS.
The execution and delivery of this Amendment and the performance of the
Amended Agreement have been duly authorized by all necessary corporate action on
the part of each Loan Party.
2.3 NO CONFLICT.
The execution and delivery by each Loan Party of this Amendment and the
performance by each Loan Party of the Amended Agreement do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to any Loan Party, the Certificate or Articles of Incorporation or
Bylaws of any Loan Party or any order, judgment or decree of any court or other
agency of government binding on any Loan Party, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of any Loan Party, except for conflicts,
breaches or defaults which would not singly or in the aggregate have a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of any Loan Party (other than any
Liens in favor of Collateral Agent for the benefit of Lenders and the Senior
Note Holders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any Loan Party, except
for such approvals or consents which have been obtained on or before the Sixth
Amendment Effective Date (as hereinafter defined in Section 6) or the absence of
which would not singly or in the aggregate have a Material Adverse Effect.
2.4 GOVERNMENTAL CONSENTS.
The execution, delivery and performance by each Loan Party of this
Amendment and the Amended Agreement do not and will not require any registration
with, consent or approval of, or notice to, or action to, with or by, any
Federal, state or other governmental authority or regulatory body, other than
registrations, consents, approvals, notices and actions that have been taken or
obtained prior to the Sixth Amendment Effective Date or the absence of which
would not have a Material Adverse Effect.
2.5 BINDING OBLIGATION.
This Amendment and the Amended Agreement have been duly executed and
delivered by each Loan Party which is a party thereto and are the legally valid
and binding obligations of each such Loan Party, enforceable against each such
Loan Party in accordance with their respective terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability.
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2.6 INCORPORATION OF REPRESENTATIONS AND WARRANTIES.
The representations and warranties contained in Section 4 of the Credit
Agreement and in each of the Collateral Documents are and will be true, correct
and complete in all material respects on and as of the Sixth Amendment Effective
Date to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
2.7 ABSENCE OF DEFAULT.
As of the Sixth Amendment Effective Date, after giving effect to this
Amendment, no event has occurred and is continuing or will result from the
consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default or a Potential Event of Default.
2.8 SCHEDULES TO COLLATERAL DOCUMENTS.
All of the schedules annexed to each of the Collateral Documents, as
supplemented prior to the Sixth Amendment Effective Date by the supplements
attached hereto as Exhibit H, are and will be true, correct and complete in all
material respects on and as of the Sixth Amendment Effective Date.
SECTION 3.
ACKNOWLEDGEMENT AND CONSENT
Company is a party to the Company Guaranty pursuant to which Company has
guarantied certain Obligations under the Credit Agreement. Each Subsidiary of
Company is a party to the Subsidiary Guaranty Agreement pursuant to which each
such Subsidiary has guarantied certain Obligations under the Credit Agreement.
Each of the Loan Parties is a party to certain Collateral Documents pursuant to
which the Loan Parties have granted Liens on certain Collateral to the
Collateral Agent, for the benefit of Lenders and the Senior Note Holders. The
Company Guaranty, the Subsidiary Guaranty Agreement and the Collateral Documents
are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Loan Party hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment and consents to the
amendment of the Credit Agreement effected pursuant to this Amendment. Each Loan
Party hereby confirms that each Credit Support Document to which it is a party
or otherwise bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, to the fullest extent possible the
payment and
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performance of all "GUARANTIED OBLIGATIONS" and "SECURED OBLIGATIONS", as the
case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance of
all such "GUARANTIED OBLIGATIONS" or "SECURED OBLIGATIONS", as the case may be,
in respect of the Obligations now or hereafter existing under or in respect of
the Amended Agreement.
Each Loan Party acknowledges and agrees that any of the Credit Support
Documents to which it is a party or otherwise bound shall continue in full force
and effect and that all of its obligations thereunder shall be valid and
enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Loan Party represents and warrants that
all representations and warranties contained in the Amended Agreement and the
Credit Support Documents to which it is a party or otherwise bound are true,
correct and complete in all material respects on and as of the Sixth Amendment
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
Each Loan Party (other than Borrowers) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Loan Party is not required by the terms of the Credit Agreement or any
other Loan Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit Agreement,
this Amendment or any other Loan Document shall be deemed to require the consent
of such Loan Party to any future amendments to the Credit Agreement.
Notwithstanding anything to the contrary contained herein, each Loan Party
acknowledges and agrees that for the period from and including June 30, 1996 to
and including the Sixth Amendment Effective Date, the Working Capital Loans
shall bear interest at the rate specified in subsection 2.2E of the Credit
Agreement.
SECTION 4.
AGENT AND REQUISITE LENDER CONSENT
Agent and Requisite Lenders hereby consent to the Company entering into
(i) the Supplemental Indentures to the extent such Supplemental Indentures are
in the forms attached hereto as Exhibit A and Exhibit B, (ii) the First
Amendment to the Subordinated Loan Agreement to the extent such amendment is in
the form attached hereto as Exhibit C, (iii) the First Amendment to the MLIF
Registration Rights Agreement to the extent such amendment is in the form
attached hereto as Exhibit D and (iv) the First Amendments to the Employment
Agreements to the extent such amendments are in the form attached hereto as
Exhibit E.
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SECTION 5.
LIMITED WAIVER
5.1 WAIVER. Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of each Loan Party herein
contained, Lenders hereby waive compliance by the Company and its Subsidiaries
with the provisions of subsections 6.6A, 6.6B, 6.6C, 6.6D and 6.6E for the
Fiscal Quarter ended June 24, 1996 solely to the extent reported by Company in
that certain Compliance Certificate dated July 26, 1996.
5.2 LIMITATION OF WAIVER. Without limiting the generality of the
provisions of subsection 9.7 of the Credit Agreement, the waiver set forth above
shall be limited precisely as written and relates solely to the noncompliance by
Company and its Subsidiaries with the provisions of subsections 6.6A, 6.6B,
6.6C, 6.6D and 6.6E of the Credit Agreement in the manner and to the extent
described above, and nothing in this Section 5 shall be deemed to:
(i) constitute a waiver of compliance by Company or any of its
Subsidiaries with respect to subsections 6.6A, 6.6B, 6.6C, 6.6D and 6.6E
of the Credit Agreement in any other instance or (ii) any other term,
provision or condition of the Credit Agreement or any other instrument or
agreement referred to therein; or
(ii) prejudice any right or remedy that Agent or any Lender may now
have or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and conditions
of the Credit Agreement and the other Loan Documents shall remain in full force
and effect and in all other respects are hereby ratified and confirmed.
SECTION 6.
CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective only upon the satisfaction of all of
the following conditions precedent (the date of satisfaction of such conditions
being referred to herein as the "SIXTH AMENDMENT EFFECTIVE DATE"):
6.1 DOCUMENTS.
On or before the Sixth Amendment Effective Date, Loan Parties shall
deliver to Agent for Lenders (with sufficient originally executed copies, where
appropriate, for each Lender) the following, each, unless otherwise noted, dated
the Sixth Amendment Effective Date:
(a) Resolutions of its Board of Directors approving and
authorizing the execution,
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delivery and performance of this Amendment, certified as of the Sixth
Amendment Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment; and
(b) Originally executed copies of this Amendment, duly executed
and delivered by each of the parties hereto.
6.2 OPINIONS.
Lenders shall have received originally executed copies of one or more
favorable written opinions of (i) Xxxxxxx Xxxxxxx & Xxxxxxxx, counsel for Loan
Parties, and (ii) the general counsel of Company, each in form and substance
satisfactory to Agent and its counsel, dated as of the Sixth Amendment Effective
Date, and setting forth substantially the matters and the opinions designated in
Exhibit F and Exhibit G, respectively, hereto and as to such other matters as
Agent may reasonably request.
6.3 SUPPLEMENTAL INDENTURES, FIRST AMENDMENT TO SUBORDINATED LOAN AGREEMENT,
FIRST AMENDMENT TO MLIF REGISTRATION RIGHTS AGREEMENT AND FIRST AMENDMENTS
TO EMPLOYMENT AGREEMENTS.
Lenders (i) shall have received executed copies of each of the
Supplemental Indentures, First Amendment to Subordinated Loan Agreement, First
Amendment to MLIF Registration Rights Agreement and First Amendments to
Employment Agreements which shall be in the forms of Exhibits A, B, C, D and E
hereto, (ii) all necessary consents to the Supplemental Indentures, First
Amendment to Subordinated Loan Agreement, First Amendment to MLIF Registration
Rights Agreement and First Amendments to Employment Agreements shall have been
obtained, (iii) the Supplemental Indentures, the First Amendment to Subordinated
Loan Agreement, the First Amendment to MLIF Registration Rights Agreement and
First Amendments to Employment Agreements shall be in full force and effect as
of the Sixth Amendment Effective Date and (iv) Lenders shall have received an
Officer's Certificate of Company certifying as to the matters set forth in
clauses (i), (ii) and (iii).
6.4 FEES AND EXPENSES.
Lenders shall have received all accrued and unpaid fees payable under
subsections 2.5D and 2.5E as of the Sixth Amendment Effective Date and all fees
and expenses incurred and payable pursuant to subsection 9.3 of the Credit
Agreement as of the Sixth Amendment Effective Date (including fees and expenses
of counsel to Agent).
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SECTION 7.
MISCELLANEOUS
7.1 REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(a) On and after the Sixth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Amended
Agreement.
(b) Except as specifically amended by this Amendment, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Agent, the Collateral Agent or any Lender under, the Credit Agreement or
any of the other Loan Documents.
7.2 FEES AND EXPENSES.
Company acknowledges that all reasonable costs, fees and expenses as
described in subsection 9.3 of the Credit Agreement incurred by Agent and its
counsel with respect to this Amendment and the documents and transactions
contemplated hereby shall be for the account of Company.
7.3 HEADINGS.
Section and subsection headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose or be given any substantive effect.
7.4 APPLICABLE LAW.
THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5.1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF
NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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7.5 COUNTERPARTS.
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AMERICAN RESTAURANT GROUP, INC.,
a Delaware corporation
ARG ENTERPRISES, INC.,
a California corporation
SPECTRUM FOODS, INC.,
a California corporation
SPOONS RESTAURANTS, INC.,
a Texas corporation
ARG PROPERTY MANAGEMENT CORPORATION,
a California corporation
XXXXXX'X, INC.,
a California corporation
By: /s/ XXXXXXX X. XxXXXXXXX, XX.
------------------------------------
Xxxxxxx X. XxXxxxxxx, Xx.
Vice President and
Chief Financial Officer
of each of the foregoing
FOR PURPOSES OF SECTION 3 ONLY:
LOCAL FAVORITE, INC.,
a California corporation
By: /s/ XXXXXXX X. XxXXXXXXX, XX.
-------------------------------------
Xxxxxxx X. XxXxxxxxx, Xx.
Vice President and
Chief Financial Officer
S-1
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BANKERS TRUST COMPANY,
individually, as Agent and a Lender
By: /s/ XXXX XX XXXXX
------------------------------------
Name: Xxxx Xx Xxxxx
Title: Assistant Vice President
BANQUE NATIONALE DE PARIS,
as a Lender
By: /s/ X. XXXXXXX
------------------------------------
Name: X. Xxxxxxx
Title: Sr. V.P. & Manager
By: /s/ XXXXXX XXXXXX
------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
BANQUE PARIBAS,
as a Lender
By: /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
By: /s/ XXXXXX X. XXXXX, XX.
------------------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Vice President
X-0
00
XXXXX BANK CORPORATION
CAYMAN ISLANDS BRANCH,
as a Lender
By: /s/ XXXXXX X. XXXX III
------------------------------------
Name: Xxxxxx X. Xxxx III
Title: Director - Attorney-In-Fact
By: /s/ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Attorney-In-Fact
DRESDNER BANK AG,
as a Lender
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
By: /s/ XXXX X. XXXXXXX
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Assistant Vice President
S-3
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EXHIBIT A
FORM OF SECOND SUPPLEMENTAL INDENTURE TO
EXCHANGE NOTE INDENTURE
A-1
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EXHIBIT B
FORM OF FIRST SUPPLEMENTAL INDENTURE TO
NEW SENIOR NOTE INDENTURE
B-1
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EXHIBIT C
FORM OF FIRST AMENDMENT TO
SUBORDINATED LOAN AGREEMENT
C-1
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EXHIBIT D
FORM OF FIRST AMENDMENT TO
MLIF REGISTRATION RIGHTS AGREEMENT
D-1
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EXHIBIT E
FORM OF FIRST AMENDMENT TO
EMPLOYMENT AGREEMENTS
E-1
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EXHIBIT F
Opinions to be Given by Xxxxxxx Xxxxxxx & Xxxxxxxx
--------------------------------------------------
All terms used herein without definition shall have the meanings given
such terms in the Credit Agreement, as amended.
1. The Company is validly existing and in good standing as a
corporation under the laws of the jurisdiction of its incorporation.
2. The Company has the corporate power and authority to execute and
deliver the (a) Limited Waiver and Sixth Amendment to Amended and Restated
Credit Agreement (the "AMENDMENT"), the Supplemental Indentures and the First
Amendment to the Subordinated Loan Agreement (all of the foregoing collectively
referred to as the "AMENDMENTS") and to perform its obligations thereunder. The
Company has taken all necessary corporate action to authorize the execution,
delivery and performance by it of the Amendments. The Company has duly executed
and delivered the Amendments. Each of the Amendments constitutes the valid and
legally binding obligation of each Loan Party, party thereto, enforceable
against such Loan Party in accordance with its terms.
3. Neither the execution nor the delivery by any Loan Party of the
Amendments nor the performance of its obligations thereunder, nor the
consummation of the transactions contemplated thereby, will (a) contravene any
applicable provision of any law, statute, rule or regulation (including, without
limitation, regulations G, T, U and X of the Board of Governors of the Federal
Reserve System of the United States of America or the State of New York, or of
any governmental or regulatory body thereof, or any applicable provision of the
General Corporation Law of the State of Delaware or, to the best of our
knowledge, any order, writ, injunction or decree of any United States Federal or
New York State court binding on such Loan Party or any of its assets; (b) result
in any breach, or constitute a default under, any of the terms, covenants,
conditions or provisions of the Senior Debt Documents, the Subordinated Loan
Documents or any other agreement, contract or instrument certified by the
Company to us as being material to which the Company is a party or by which any
of its property or assets are bound (collectively, the "SPECIFIED AGREEMENTS");
(c) result in the creation or imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of any Loan Party pursuant
to the terms of any Specified Agreement other than those in favor of the
Collateral Agent; or (d) violate any provision of the Certificate of
Incorporation or Bylaws of the Company.
4. No order, consent, approval, license, authorization or validation,
or filing, recording, declaration or registration with, or authorization or
exemption by, any governmental or regulatory authority pursuant to any law or
regulation of the United States of America or the State of New York
F-1
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or pursuant to the General Corporation Law of the State of Delaware is required
to be obtained or made by any Loan Party in connection with (a) the execution
and delivery by each Loan Party of the Amendments to which it is party or (b)
the performance by each Loan Party of the obligations to be performed by it on
or prior to the Sixth Amendment Effective Date pursuant to the Amendments to
which it is a party.
5. To our knowledge, there does not exist any judgment, order,
injunction or other restraint of any United States Federal or New York State
court issued or filed binding on any Loan Party or any hearing seeking
injunctive relief with respect to any Loan Party or any other restraint pending,
noticed or threatened with respect to any Loan Party (a) with respect to the
making or maintenance of the Loans by the Lenders or the performance by the Loan
Parties of their obligations under the Amendments or Loan Documents or (b) that
could reasonably be expected to have a Material Adverse Effect.
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EXHIBIT G
Opinions to be Given by the General Counsel to Company
------------------------------------------------------
All capitalized terms used herein without definition shall have the
meanings given such terms in the Credit Agreement, as amended.
1. Each of the Loan Parties has been duly incorporated and is validly
existing and in good standing as a corporation under the laws of the state of
its incorporation. Each Loan Party has the corporate power and authority to own
and operate its properties and assets and to transact the business in which it
is engaged and currently proposes to engage. Each Loan Party is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the character of the properties or assets owned or leased
by such Loan Party or the nature of the business conducted by such Loan Party
makes such qualification necessary, except for such jurisdictions where, in the
aggregate, the failure to so qualify could not reasonably be expected to have a
Material Adverse Effect.
2. Each Loan Party has the corporate power and authority to execute and
deliver the Limited Waiver and Sixth Amendment to Amended and Restated Credit
Agreement (the "AMENDMENT") and to perform its obligations thereunder. Each Loan
Party has taken all necessary corporate action to authorize the execution,
delivery and performance by it of the Amendment. Each Loan Party has duly
executed and delivered the Amendment.
3. Neither the execution nor the delivery by any Loan Party of the
Amendment or by the Company of the Supplemental Indentures or the First
Amendment to the Subordinated Loan Agreement, nor the consummation of the
transactions contemplated thereby, will (a) contravene any applicable provision
of any law, statute, rule or regulation of the state of California, or any
governmental or regulatory body thereof, or, to the best of my knowledge, any
order, writ, injunction or decree of any California State court binding on such
Loan Party or any of its assets; (b) conflict with, or result in any breach of,
or constitute a default under, any of the terms, covenants, conditions or
provisions of the Senior Debt Documents, the Subordinated Loan Documents or, to
my knowledge, any other indenture, mortgage, deed of trust, loan agreement, or
any other material agreement, contract or instrument to which any Loan Party is
a party or by which any of its property or assets are bound (collectively, the
"SPECIFIED AGREEMENTS"); (c) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the properties or assets of
any Loan Party pursuant to the terms of any Specified Agreement other than those
in favor of the Collateral Agent; or (d) violate any provision of the
Certificate or Articles of Incorporation or Bylaws of any Loan Party.
G-1
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4. No order, consent, approval or license or validation of,
authorization or exemption by, or registration, declaration, recording or filing
with, any governmental or regulatory authority pursuant to any law or regulation
of the State of California is required to be obtained or made by any Loan Party
in connection with (a) the execution and delivery by each Loan Party of the
Amendment or the execution and delivery by the Company of the Supplemental
Indentures or the First Amendment to the Subordinated Loan Agreement or (b) the
performance by each Loan Party of the obligations to be performed by it on or
prior to the Sixth Amendment Effective Date pursuant to the Amendment, the
Supplemental Indentures and the First Amendment to the Subordinated Loan
Agreement.
5. To the best of my knowledge, there does not exist any judgment,
order, injunction or other restraint of any California State court issued or
filed binding on any Loan Party or any hearing seeking injunctive relief with
respect to any Loan Party or other restraint pending, noticed or threatened with
respect to any Loan Party (a) with respect to the making or maintenance of any
of the Loans by the Lenders or the performance by the Loan Parties of their
obligations under the Amendment or other Loan Documents or the Supplemental
Indentures or the First Amendment to the Subordinated Loan Agreement or (b) that
could reasonably be expected to have a Material Adverse Effect.
G-2
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EXHIBIT H
Supplement to Schedules to Collateral Documents
H-1
