FRI-M CORPORATION
FIRST AMENDMENT
TO CREDIT AGREEMENT, GUARANTIES AND
CERTAIN COLLATERAL DOCUMENTS
This FIRST AMENDMENT TO CREDIT AGREEMENT, GUARANTIES AND
CERTAIN COLLATERAL DOCUMENTS (this "Amendment") is dated as of July 1, 1996 and
entered into by and among FRD ACQUISITION CO., a Delaware corporation
("Holdings"), FRI-M CORPORATION, a Delaware corporation ("Company"), the other
Credit Support Parties (as defined in Section 4 hereof), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), BANKERS TRUST COMPANY,
CHEMICAL BANK and CITICORP USA, INC., as co-syndication agents for Lenders (in
such capacity, each individually referred to herein as a "Co-Syndication Agent"
and collectively as "Co-Syndication Agents"), and CREDIT LYONNAIS NEW YORK
BRANCH, as administrative agent for Lenders (in such capacity, "Administrative
Agent"), and is made with reference to that certain Credit Agreement dated as of
May 23, 1996 (the "Credit Agreement"), by and among Holdings, Company, Lenders,
Co- Syndication Agents and Administrative Agent, and to the other Loan
Documents. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Loan Parties and Lenders desire to (i) amend the
Credit Agreement to, among other things, permit Company to enter into daylight
overdraft protection agreements and make certain other changes as set forth
below and (ii) amend the Guaranties and certain of the Collateral Documents as
set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
1
Section 1. AMENDMENTS TO THE CREDIT AGREEMENT,
GUARANTIES AND CERTAIN COLLATERAL DOCUMENTS
1.1 Amendment to Section 1: Provisions Relating to
Certain Defined Terms
A. Additional Defined Term. Subsection 1.1 of the Credit
Agreement is hereby amended by adding thereto the following definition, which
shall be inserted in proper alphabetical order:
"`Daylight Overdraft Protection Agreement' means any agreement
pursuant to which any Person provides bank account overdraft protection
to Company for account deficiencies occurring during a Business Day as
a result of checks written or wire transfers or other electronic
transfers initiated by Company clearing on such Business Day and which
account deficiencies are expected to be cured with proceeds of wire
transfers or checks to be deposited later during such Business Day."
B. Contingent Obligations. Subsection 1.1 of the Credit
Agreement is hereby amended by adding to the end of the first sentence of the
definition of "Contingent Obligations" the following:
"or Daylight Overdraft Protection Agreements."
C. Indebtedness. Subsection 1.1 of the Credit Agreement is
hereby amended by adding to the end of the definition of "Indebtedness" the
following:
"Obligations under Daylight Overdraft Protection Agreements,
unless and until such obligations become matured obligations actually
arising pursuant thereto, do not constitute Indebtedness."
1.2 Amendments to Section 7: Provisions Relating to
Negative Covenants
A. Liens and Related Matters. Subsection 7.2A of the Credit
Agreement is hereby amended by deleting clause (ii) thereof in its entirety and
substituting therefor the following:
"(ii) Liens granted pursuant to the Collateral Documents,
including Liens granted in favor of a Lender or an Affiliate of such Lender
which is (a) a counterparty to an Interest Rate Agreement permitted under
subsection 7.4(iii) or (b) a counterparty to a Daylight Overdraft Protection
Agreement permitted under subsection 7.4(vii);"
B. Contingent Obligations. Subsection 7.4 of the Credit
Agreement is hereby amended by (i) deleting the word "and" from the end of
clause (v) thereof and (ii) adding to the end of such subsection immediately
prior to the period the following:
2
"; and
(vii) Company may become and remain liable with
respect to Contingent Obligations under Daylight Overdraft
Protection Agreements; provided that the aggregate amount of
overdraft protection available under all Daylight Overdraft
Protection Agreements shall not exceed at any time
$5,000,000."
1.3 Amendments to Section 9: Provisions Relating to Holdings
Guaranty.
A. Guarantied Obligations. Subsection 9.1 of the Credit
Agreement is hereby amended by deleting the first sentence of such subsection in
its entirety and substituting therefor the following:
"9.1 Guarantied Obligations.
As consideration for Lenders agreeing to
enter into this Agreement and extend the Commitments, make the
Loans hereunder and issue the Letters of Credit, Holdings
hereby unconditionally and irrevocably guaranties, as a
primary obligor and not merely as a surety, the due and
punctual payment when due (whether at stated maturity, by
required prepayment, declaration, demand or otherwise)
(including amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. ss. 362(a)) of all Obligations of Company
(including, without limitation, interest which, but for the
filing of a petition in bankruptcy with respect to Company
would accrue on such Obligations, whether or not allowable as
a claim) and all obligations of Company under Interest Rate
Agreements permitted under subsection 7.4(iii) or under
Daylight Overdraft Protection Agreements permitted under
subsection 7.4(vii) (all such Interest Rate Agreements and
Daylight Overdraft Protection Agreements, collectively, the
`Lender Interest Rate Agreements'), in each case to which a
Lender or an Affiliate of such Lender (in such capacity under
such Lender Interest Rate Agreements, collectively, `Interest
Rate Exchangers') is a counterparty (the `Guarantied
Obligations')."
1.4 Amendment to Company Pledge Agreement.
Preliminary Statements. The Company Pledge Agreement
is hereby amended by deleting paragraph C of the Preliminary Statements thereto
in its entirety and substituting therefor the following:
"C. Pledgor may from time to time enter into one or
more Interest Rate Agreements or Daylight Overdraft Protection
Agreements (all such Interest Rate Agreements and Daylight
Overdraft Protection Agreements, collectively, the `Lender
Interest Rate Agreements') with one or more Lenders or their
Affiliates
3
(in such capacity under all such Lender Interest Rate
Agreements, collectively, `Interest Rate Exchangers') in
accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Pledgor under the Lender
Interest Rate Agreements, including without limitation the
obligation of Pledgor to make payments under Lender Interest
Rate Agreements that are Interest Rate Agreements in the
event of early termination thereof (all such obligations in
respect of the Lender Interest Rate Agreements being the
`Interest Rate Obligations'), together with all obligations
of Pledgor under the Credit Agreement and the other Loan
Documents, be secured hereunder."
1.5 Amendments to Holdings Pledge Agreement, Subsidiary Pledge
Agreement, Holdings Security Agreement, Subsidiary Security Agreement and
Subsidiary Trademark Security Agreement. The Holdings Pledge Agreement, the
Subsidiary Pledge Agreement, the Holdings Security Agreement, the Subsidiary
Security Agreement and the Subsidiary Trademark Security Agreement are each
hereby amended by deleting the text of paragraph C of the Preliminary Statements
of each of the Holdings Pledge Agreement and the Subsidiary Pledge Agreement,
and the text of paragraph B of the Preliminary Statements of each of the
Holdings Security Agreement, the Subsidiary Security Agreement and the
Subsidiary Trademark Security Agreement, in each case, in its entirety and
substituting therefor the following:
"Company may from time to time enter, or may from
time to time have entered, into one or more Interest Rate
Agreements or Daylight Overdraft Protection Agreements (all
such Interest Rate Agreements and Daylight Overdraft
Protection Agreements, collectively, the `Lender Interest Rate
Agreements') with one or more Lenders or their Affiliates (in
such capacity under all such Lender Interest Rate Agreements,
collectively, `Interest Rate Exchangers')."
1.6 Amendments to Company Security Agreement and Company
Trademark Security Agreement. The Company Security Agreement and the Company
Trademark Security Agreement are each hereby amended by deleting paragraph B of
the respective Preliminary Statements of each such document in their entirety
and substituting therefor the following:
"B. Grantor may from time to time enter into one or
more Interest Rate Agreements or Daylight Overdraft Protection
Agreements (all such Interest Rate Agreements or Daylight
Overdraft Protection Agreements, collectively, the `Lender
Interest Rate Agreements') with one or more Lenders or their
Affiliates (in such capacity under all such Lender Interest
Rate Agreements, collectively, `Interest Rate Exchangers') in
accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Grantor under the Lender
Interest Rate Agreements, including without limitation the
obligation of Grantor to make payments under Lender Interest
Rate Agreements that are Interest Rate Agreements in the event
of early termination thereof (all such obligations under all
such Lender Interest Rate Agreements being the `Interest Rate
Obligations'),
4
together with all obligations of Grantor under
the Credit Agreement and the other Loan Documents, be secured
hereunder."
1.7 Amendment to Subsidiary Guaranty. The Subsidiary Guaranty
is hereby amended by deleting paragraph B of the Recitals thereto in its
entirety and substituting therefor the following:
"B. Company may from time to time enter into one or
more Interest Rate Agreements or Daylight Overdraft Protection
Agreements (such Interest Rate Agreements or Daylight
Overdraft Protection Agreements, collectively, the `Lender
Interest Rate Agreements') with one or more Lenders or their
Affiliates (in such capacity under all such Lender Interest
Rate Agreements, collectively, `Interest Rate Exchangers') in
accordance with the terms of the Credit Agreement, and it is
desired that the obligations of Company under the Lender
Interest Rate Agreements, including without limitation the
obligation of Grantor to make payments under Lender Interest
Rate Agreements that are Interest Rate Agreements in the event
of early termination thereof (all such obligations under all
such Lender Interest Rate Agreements, being the `Interest Rate
Obligations'), together with all obligations of Company under
the Credit Agreement and the other Loan Documents, be
guarantied hereunder."
1.8 Additional Amendments to Company Pledge Agreement,
Holdings Pledge Agreement, Subsidiary Pledge Agreement, Company Security
Agreement, Holdings Security Agreement, Subsidiary Security Agreement, Company
Trademark Security Agreement, Subsidiary Trademark Security Agreement and
Subsidiary Guaranty. Subsection 16 of each of the Company Pledge Agreement, the
Holdings Pledge Agreement and the Subsidiary Pledge Agreement, subsection 20 of
the Company Security Agreement, subsection 21 of each of the Company Trademark
Security Agreement, the Holdings Security Agreement, the Subsidiary Security
Agreement and the Subsidiary Trademark Security Agreement, and subsection 3.14
of the Subsidiary Guaranty are each hereby amended by deleting clause (ii) of
each such subsection in its entirety and, in each case, substituting therefor
the following:
"(ii) after payment in full of all Obligations under
the Credit Agreement and the other Loan Documents, (x) the
holders of a majority of the aggregate notional amount (or,
with respect to any Lender Interest Rate Agreement which is an
Interest Rate Agreement that has been terminated in accordance
with its terms, the amount then due and payable (exclusive of
expenses and similar payments but including any early
termination payments then due) under such Lender Interest Rate
Agreement) under all Lender Interest Rate Agreements which are
Interest Rate Agreements and (y) the holders of a majority of
the aggregate amount then due and payable under all Lender
Interest Rate Agreements that are Daylight Overdraft
Protection Agreements (Requisite Lenders or, if applicable,
such holders being referred to herein as `Requisite
Obligees')."
5
Section 1.9 Amendments to Exhibits.
Exhibits XV through XXIII of the Credit Agreement are hereby
amended to the extent necessary to make the provisions therein consistent with
the amendments made to the executed Collateral Documents and Guaranties pursuant
to Sections 1.4 through 1.8 above.
Section 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the prior or concurrent satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "First Amendment Effective Date"):
A. On or before the First Amendment Effective Date, Company
shall deliver to Lenders (or to Administrative Agent for Lenders) the following,
each, unless otherwise noted, dated as of the First Amendment Effective Date:
1. Resolutions of the Board of Directors of each Loan
Party party to this Amendment approving and authorizing the execution,
delivery and performance of this Amendment, certified as of the First
Amendment Effective Date by such Loan Party's secretary or assistant
secretary as being in full force and effect without modification or
amendment;
2. Signature and incumbency certificates of officers
of each Loan Party executing this Amendment certified by such Loan
Party's secretary or assistant secretary; and
3. Counterparts of this Amendment executed by
Requisite Lenders and each of the other parties hereto.
B. On or before the First Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
6
Section 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement, certain of the Collateral Documents, the Holdings
Guaranty, and the Subsidiary Guaranty in the manner provided herein, each of
Holdings, Company and each other Loan Party party hereto represents and warrants
to each Lender that the following statements are true, correct and complete:
A. Corporate Power and Authority. Each Loan Party party hereto
has all requisite corporate power and authority to enter into this Amendment and
to carry out the transactions contemplated hereby and each of Holdings, Company
and each other Loan Party party hereto has all requisite corporate power and
authority to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment (the
"Amended Agreement") and each Loan Party has all requisite corporate power and
authority to carry out the transactions contemplated by, and perform its
obligations under, the Collateral Documents or the Holdings Guaranty or the
Subsidiary Guaranty to which it is a party as amended by this Amendment
(collectively, the "Amended Collateral Documents and Guaranties").
B. Authorization of Agreements. The execution and delivery of
this Amendment and the performance of the Amended Agreement and the Amended
Collateral Documents and Guaranties have been duly authorized by all necessary
corporate action on the part of Holdings, Company and each of the other Loan
Parties party hereto, as the case may be.
C. No Conflict. The execution and delivery by each Loan Party
party hereto of this Amendment and the performance by such Loan Party of this
Amendment and the performance by Holdings and Company of the Amended Agreement
and performance by Loan Parties of the applicable Amended Collateral Documents
and Guaranties do not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to Holdings or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Holdings
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Holdings or any of its Subsidiaries, (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 Holdings or any of
its Subsidiaries, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Holdings or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of Holdings or any of its Subsidiaries.
D. Governmental Consents. The execution and delivery by each
Loan Party party hereto of this Amendment and the performance by such Loan Party
of this Amendment and the performance by Holdings and Company of the Amended
Agreement and performance by Loan Parties of the applicable Amended Collateral
Documents and Guaranties do not and will not
7
require any registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority or
regulatory body.
E. Binding Obligation. This Amendment has been duly executed
and delivered by each Loan Party party hereto and this Amendment, the Amended
Agreement and the Amended Collateral Documents and Guaranties are the legally
valid and binding obligations of such Loan Party, enforceable against 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.
F. Incorporation of Representations and Warranties From Credit
Agreement. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First 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.
G. Absence of Default. 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.
Section 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain Collateral Documents, in each
case as amended through the First Amendment Effective Date, pursuant to which
Company has created Liens in favor of Administrative Agent on certain Collateral
to secure the Obligations. Each of the other Loan Parties party hereto is a
party to certain Collateral Documents, the Subsidiary Guaranty or the Holdings
Guaranty, in each case as amended through the First Amendment Effective Date,
pursuant to which each such Loan Party has (i) guarantied the Obligations and
(ii) created Liens in favor of Administrative Agent on certain Collateral to
secure the obligations of such Loan Party under the Subsidiary Guaranty or the
Holdings Guaranty, as the case may be. The Loan Parties party hereto are
collectively referred to herein as the "Credit Support Parties", and the
Collateral Documents, the Subsidiary Guaranty and the Holdings Guaranty are
collectively referred to herein as the "Credit Support Documents".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement, the Collateral
Documents and Guaranties and this Amendment and consents to the amendment of the
Credit Agreement and Guaranties and the Collateral Documents effected pursuant
to this Amendment. Each Credit Support 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
8
fullest extent possible the payment and performance of all "Obligations,"
"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
"Obligations," "Guarantied Obligations" or "Secured Obligations," as the case
may be, in respect of the Obligations of Company now or hereafter existing under
or in respect of the Amended Agreement and the Notes defined therein.
Each Credit Support 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 Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement, the Amended Collateral Documents and Guaranties and the other
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 First 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 Credit Support Party (other than Holdings and Company)
acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Amendment, such Credit Support 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 Credit Support Party to any future
amendments to the Credit Agreement.
9
Section 5. MISCELLANEOUS
A. Reference to and Effect on the Credit Agreement and the
Other Loan Documents.
(i) On and after the First 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. On and after the First Amendment Effective Date,
each reference in any Collateral Document, the Holdings Guaranty or the
Subsidiary Guaranty to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to such Collateral Document,
the Holdings Guaranty or the Subsidiary Guaranty, and each reference in
the other Loan Documents to such "Pledge Agreement", "Security
Agreement", "Guaranty", "thereunder", "thereof" or words of like import
referring to such Collateral Document, Holdings Guaranty or Subsidiary
Guaranty shall mean and be a reference to such Collateral Document,
Holdings Guaranty or Subsidiary Guaranty, as applicable, as amended by
this Amendment.
(ii) 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.
(iii) 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 or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. Fees and Expenses. Company acknowledges that all reasonable
costs, fees and expenses as described in subsection 11.2 of the Credit Agreement
incurred by Administrative Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of Company.
C. 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.
D. Applicable Law. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER 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
00
XXXXX XX XXX XXXX), XXXXXXX REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
E. Counterparts; Effectiveness. 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. This Amendment (other than the
provisions of Section 1, which shall become effective upon the satisfaction of
each of the conditions set forth in Section 2) shall become effective upon the
execution of a counterpart hereof by all Requisite Lenders and each of the other
parties hereto and receipt by Company and Administrative Agent of written or
telephonic notification of such execution and authorization of delivery thereof.
11
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.
FRD ACQUISITION CO.
By:
Title:
FRI-M CORPORATION
By:
Title:
FRI-FRD CORPORATION
By:
Title:
CFC FRANCHISING COMPANY
By:
Title:
FRI-J CORPORATION
By:
Title:
JOJOS RESTAURANTS, INC.
By:
Title:
S-12
JOJOS CALIFORNIA FAMILY RESTAURANTS,
INC.
By:
Title:
COCO'S RESTAURANTS, INC.
By:
Title:
FRI-C CORPORATION
By:
Title:
CARROWS RESTAURANTS, INC.
By:
Title:
CARROWS CALIFORNIA FAMILY
RESTAURANTS, INC.
By:
Title:
FRI-DHD CORPORATION
By:
Title:
FAR WEST CONCEPTS, INC.
By:
Title:
S-13
FRI-NA CORPORATION
By:
Title:
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title:
BANKERS TRUST COMPANY,
individually and as
Co-Syndication Agent
By:
Title:
CHEMICAL BANK, individually and
as Co-Syndication Agent
By:
Title:
CITICORP USA, INC., individually and
as Co-Syndication Agent
By:
Title:
S-14
