EXHIBIT (B)
Chase Securities Inc.
000 Xxxxxx Xxxxxx, 0-XXXX-00
Xxxxxxx, Xxxxx 00000-0000
Carrols Corporation
Senior Secured Credit Facility
Engagement Letter
June 1, 1998
Carrols Corporation
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx
Re: Loan Agreement dated May 12, 1997 among Carrols Corporation
("Carrols") as Borrower, Chase Bank of Texas, National Association
(formerly known as Texas Commerce Bank National Association)
("Chase"), as Agent, Xxxxxx Financial, Inc., as Documentation
Agent, and First Union National Bank of North Carolina, as
Co-Agent, and all the other Banks thereto as amended, modified or
restated (the "Credit Agreement").
Ladies and Gentlemen:
You have advised Chase Bank of Texas, National Association
("Chase") and Chase Securities Inc. ("CSI") that Carrols Corporation
(the "Borrower" or "you"), desires to amend its Credit Agreement, which
amendment shall include but not be limited to the changes to the Credit
Agreement requested by the Borrower and specified on Schedule I hereto
(the "Requested Changes"). In that connection, you have requested that
CSI agree to structure, arrange and syndicate the amendment in an
aggregate amount of up to $150,000,000 (the "Facility"), inclusive of
the existing availability under the Credit Agreement, and that Chase
commit to provide the entire principal amount of the Facilty and
continue to serve as administrative agent for the Facility.
CSI is pleased to advise you that it is willing to act as
exclusive advisor and arranger for the Facility.
Futhermore, Chase is pleased to advise you of its commitment to
underwrite the entire amount of the additional funds, or if necessary,
the entire amount of funds for the Facility, upon the terms and
subject to the conditions set forth or referred to in this engagement
letter (this "Engagement Letter"). Proceeds from the Facility will be
used to: (i) fund the entire purchase price to acquire 100% of the outstanding
shares of Pollo Tropical, Inc. (including transaction costs); (ii) refinance
certain existing indebtedness; and (iii) fund on-going working capital, capital
expenditures and future acquisitions. The provisions of this Engagement Letter
are subject to compliance with the Senior Notes Documentation.
You agree actively to assist CSI in arrangement of the Facility. Such
assistance shall include (a) your using commercially reasonable efforts to
ensure that the syndication efforts benefit materially from your existing
lending relationships, (b) direct contact between senior management and advisors
of the Borrower and the proposed Lenders, and (c) the hosting, with CSI, of one
or more meetings of prospective Lenders.
Chase and CSI shall be entitled, after consultation with you, to change
the structure, terms or pricing, but not the aggregate amount, of the Facility
after July 10, 1998 if the syndication has not been completed and if Chase and
CSI determine that such changes are advisable in order to insure a successful
syndication of the Facility.
To assist CSI in its syndication efforts, you agree promptly to prepare
and provide to CSI and Chase all information with respect to the Borrower, the
Facility and the other transactions contemplated hereby and by Schedule 1 and
the Fee Letter referred to below, including all financial information and
projections (the "Projections"), as we may reasonably request in connection with
the arrangement of the Facility. You hereby represent and covenant that (a) all
information other than the Projections (the "Information") that has been or will
be made available to Chase or CSI by you or any of your representatives is or
will be, when taken as a whole and when furnished, complete and correct in all
material respects and does not or will not, when taken as a whole considered
with all other information given to Chase or CSI by you or your representatives
and when furnished, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements are made and (b) the Projections that have been or will be made
available to Chase or CSI by you or your representatives have been or will be
prepared in good faith based upon assumptions believed reasonable when made. You
understand that in arranging the Facility we may use and rely on the Information
and Projections without independent verification thereof.
You hereby acknowledge and consent that CSI may share, the Information
and any other information or matters relating to the Borrower, or the
transactions contemplated hereby with affiliates of CSI, including The Chase
Manhattan Bank, and Chase, and that such affiliates may likewise share
information relating to the Borrower or such transactions with CSI.
As consideration for Chase's commitment hereunder and CSI's agreement to
perform the services described herein, you agree to repay at closing to CSI and
Chase on the date on which the documentation evidencing the Facility is executed
by all parties
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thereto (the "Closing Date") the nonrefundable fees set forth in the Fee Letter
dated the date hereof and delivered herewith (the "Fee Letter").
Chase's commitment hereunder and CSI's agreement to perform the services
described herein are subject to (a) there not occurring or becoming known to us
any material adverse condition or material adverse change in or affecting the
business, operations, property, condition (financial or otherwise) or prospects
of the Borrower and its subsidiaries, taken as a whole, (b) there not having
occurred a material disruption of or material adverse change in financial,
banking or capital market conditions that, in our judgment, could materially
impair the syndication of the Facility, (c) our satisfaction that prior to and
during the syndication of the Facility there shall be no competing senior
secured financing, (d) the negotiation, execution and delivery on or before
June 30, 1998 of definitive documentation with respect to the Facility
satisfactory to Chase and its counsel (such documentation to include terms set
forth in Schedule 1) Those matters that are not covered by the provisions hereof
and of Schedule 1 are subject to the approval and agreement of Chase, CSI and
the Borrower.
You agree to indemnify and hold harmless Chase, CSI, their affiliates
and their respective officers, directors, employees, advisors, and agents
(each, an "Indemnified Person") from and against any and all losses, claims,
damages and liabilities to which any such Indemnified Person may become subject
arising out of or in connection with this Engagement Letter, the Facility,
the use of the proceeds thereof, or any related transaction or any claim,
litigation, investigation or proceeding relating to any of the foregoing,
regardless of whether any Indeminified Person is a party thereto, and to
reimburse each Indemnified Person upon demand for any legal or other expenses
incurred in connection with investigating or defending any of the foregoing,
provided that the foregoing indemnity will not, as to any Indemnified Person,
apply to Losses or related expenses to the extent they arise from the willful
misconduct or gross negligence of such Indemnified Person. YOU AGREE THAT THE
INDEMNITY CONTAINED IN THE PRECEDING SENTENCE EXTENDS TO AND IS INTENDED TO
COVER LOSSES AND RELATED EXPENSES ARISING OUT OF THE ORDINARY, SOLE OR
CONTRIBUTORY NEGLIGENCE OF AN INDEMNIFIED PERSON. In addition, you agree to
reimburse Chase, CSI and their affiliates on demand for all out-of-pocket
expenses (including due diligence expenses, syndication expenses, travel
expenses, and reasonable fees, charges and disbursements of counsel) incurred in
connection with the Facility and any related documentation (including this
Engagement Letter, Schedule 1, the Fee Letter and the definitive financing
documentation) or the administration, amendment, modification or waiver thereof.
No Indemnified Person shall be liable for any indirect or consequential damages
in connection with its activities related to the Facility.
This Engagement Letter shall not be assignable by you without the prior
written consent of Chase and CSI (and any purported assignment without such
consent shall be null and void), is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto. This Engagement
Letter may not be amended or waived except by an instrument in writing signed by
you, Chase and CSI. This Engagement Letter may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Engagement Letter by facsimile transmission shall be effective as
delivery of a manually executed counterpart hereof. This Engagement Letter
(together with Schedule 1) and the Fee Letter are the only agreements that have
been entered into among us with respect to the Facility and set forth the entire
understanding of the parties with respect thereto. This Letter Agreement, the
Fee Letter and the Term Sheet (including all exhibits and schedules hereto or
thereto) shall be governed by and construed in accordance with, the laws of the
State of New York.
This Engagement Letter is delivered to you on the understanding that
neither this Engagement Letter, Schedule 1 or the Fee Letter nor any of their
terms or substance shall be disclosed, directly or indirectly, to any other
person except (a) to your officers, agents and advisors who are directly
involved in the consideration of this matter or (b) as may be compelled in a
judicial or administrative proceeding or as otherwise required by law (in which
case you agree to inform us promptly thereof).
The reimbursement, indemnification and confidentiality provisions
contained herein and in the Fee Letter shall remain in full force and effect
regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Engagement or Chase's
commitment hereunder.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of Schedule 1 and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 5:00 p.m., Houston, Texas time, on or before June 5, 1998. Chase's
commitment and CSI's agreements herein will expire at such time in the event
Chase has not received such executed counterparts in accordance with the
immediately preceding sentence.
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Chase and CSI are pleased to have been given the opportunity to
assist you in connection with this important financing.
Very truly yours.
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
CHASE SECURITIES INC.
By: /s/ XXXX X. XXXXXX
--------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
Accepted and agreed to as of
the date first above written by:
CARROLS CORPORATION
By: /s/ XXXX X. XXXXXXXX
--------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President-Finance
