EXHIBIT 10.30
AMENDMENT NUMBER FOUR TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER FOUR TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is entered into as of June 9, 1998, by and between Foothill Capital
Corporation, a California corporation ("Foothill"), on the one hand, and FRI-MRD
Corporation, a Delaware corporation ("FRI-MRD"), El Torito Restaurants, Inc., a
Delaware corporation ("El Torito"), and Chi-Chi's, Inc., a Delaware corporation
("Chi-Chi's"), on the other hand, with reference to the following facts:
A. Foothill, on the one hand, and El Torito, Chi-Chi's, FRI-MRD, and
certain of their Affiliates, on the other hand, heretofore have
entered into that certain Loan and Security Agreement, dated as of
January 10, 1997 (as heretofore amended, supplemented, or otherwise
modified, the "Agreement");
B. El Torito and Chi-Chi's (individually and collectively, jointly and
severally, "Borrower") and FRI-MRD have requested Foothill to consent
to (a) FRI-MRD's issuance of new Senior Secured Discount Notes in the
original principal amount at maturity of up to $24,000,000 (yielding
gross proceeds of approximately $21,000,000), (b) the acquisition by
FRI-MRD of all of the issued and outstanding capital Stock of The
Hamlet Group, Inc., a California corporation ("HGI"), (c) the merger
of FRI-Sub, Inc., a Delaware corporation ("FRI-Sub"), into Xxx Xxx
Roo, Inc., a Delaware corporation ("KKR"), with KKR as the survivor,
(d) increase the maximum line amount and subline amounts under the
Agreement by $20,000,000, (e) FRI-MRD or one of its Subsidiaries
providing loans or other advances to KKR or its Subsidiaries in an
amount not to exceed $3,000,000 outstanding at any one time, and (f)
certain other transactions as contemplated by the KKR Merger
Agreements as hereinafter defined.
C. Borrower and FRI-MRD have requested Foothill to amend the Agreement to
permit the foregoing transactions, as set forth in this Amendment;
D. Foothill is willing to so modify the Agreement in accordance with the
terms and conditions hereof; and
E. All capitalized terms used herein and not defined herein shall have
the meanings ascribed to them in the Agreement, as amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein, Foothill, Borrower and FRI-MRD hereby agree as
follows:
1. DEFINITIONS FOR THIS AMENDMENT.
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Any and all initially capitalized terms used herein shall have the
meanings ascribed thereto in the Agreement, as amended hereby. For purposes of
this Fourth Amendment only, the following initially capitalized terms shall have
the following meanings:
"Effective Date" means the date of execution of this Amendment.
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"HGI Closing Date" means the later to occur of (a) the Effective Date,
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or (b) the date on which Foothill acknowledges, in writing, that each of the
conditions contained in Section 4 have been fulfilled or waived.
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"KKR Closing Date" means the later to occur of (a) the Effective Date,
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or (b) the date on which Foothill acknowledges, in writing, that each of the
conditions contained in Section 5 have been fulfilled or waived.
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"KKR Senior Notes" means the 13% Senior Notes due August 14, 2000
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issued by XXX.
0. AMENDMENTS TO THE AGREEMENT TO FACILITATE THE INCREASE IN THE
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MAXIMUM AMOUNT AND TO PERMIT THE KKR CREDIT FACILITY.
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a. All references to "Regulation G" of the Federal Reserve
Board hereby are deleted from the Agreement.
b. Section 1.1 of the Agreement hereby is amended by adding or
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modifying, as the case may be, the following definitions:
"KKR" means Xxx Xxx Roo, Inc., a Delaware corporation.
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"KKR Credit Facility" means the financial arrangement pursuant to
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which FRI-MRD or one of its Subsidiaries has agreed to make loans or other
advances to KKR or its Subsidiaries, in an amount not to exceed $3,000,000,
in the aggregate, outstanding at any one time, pursuant to a written
agreement, substantially in the form attached hereto as Exhibit A4-1.
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"Line Increase Blockage Amount" means $20,000,000; provided,
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however, that such amount shall be decreased, but not below zero, in an
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amount equal to $675,000 for each parcel of Real Property identified on
Schedule R-1, for which (a) Foothill has received an endorsement to the
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mortgage title insurance policy relative to such property, and (b) an
amendment to the Mortgage relative to such property has been recorded, in
each case, to reflect the increase in the Maximum Amount from $35,000,000
to $55,000,000, and in form and substance satisfactory to Foothill in its
reasonable credit judgment; provided further, however, that notwithstanding
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the foregoing, the Line Increase Blockage Amount shall remain at
$20,000,000 until the earlier to occur of (i) the HGI Acquisition and the
KKR Merger both having become effective, and (ii) the
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holders of the Senior Discount Notes having consented to the increase in
the Maximum Amount from $35,000,000 to $55,000,000.
"Maximum Amount" means, as of any date of determination, the
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result of (a) $55,000,000, minus (b) 100% of the Net Proceeds in excess of
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$3,500,000 received by FRI-MRD or its Subsidiaries on or after the Closing
Date from Permitted Dispositions (other than (i) Asset Dispositions of
Dinnerhouse Assets, (ii) Asset Dispositions of Chi-Chi's Specified Assets,
(iii) Ordinary Course Dispositions, (iv) Permitted Sale and Lease-backs,
and (v) after the effective date of the HGI Acquisition, the HGI
Disposition), minus (c) the Line Increase Blockage Amount.
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"Maximum Chi-Chi's Amount" means (a) $55,000,000, minus (b) 100%
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of the Net Proceeds in excess of $3,500,000 received by FRI-MRD or its
Subsidiaries on or after the Closing Date from Permitted Dispositions
(other than (i) Asset Dispositions of Dinnerhouse Assets, (ii) Asset
Dispositions of Chi-Chi's Specified Assets, (iii) Ordinary Course
Dispositions, (iv) Permitted Sale and Lease-backs, and (v) after the
effective date of the HGI Acquisition, the HGI Disposition), minus (c) the
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Line Increase Blockage Amount.
"Maximum Chi-Chi's Revolving Amount" means (a) $35,000,000, minus
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(b) 100% of the Net Proceeds in excess of $3,500,000 received by FRI-MRD or
its Subsidiaries on or after the Closing Date from Permitted Dispositions
(other than (i) Asset Dispositions of Dinnerhouse Assets, (ii) Asset
Dispositions of Chi-Chi's Specified Assets, (iii) Ordinary Course
Dispositions, (iv) Permitted Sale and Lease-backs, and (v) after the
effective date of the HGI Acquisition, the HGI Disposition), minus (c) the
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Line Increase Blockage Amount.
"Maximum El Torito Amount" means (a) $55,000,000, minus (b) 100%
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of the Net Proceeds in excess of $3,500,000 received by FRI-MRD or its
Subsidiaries on or after the Closing Date from Permitted Dispositions
(other than (i) Asset Dispositions of Dinnerhouse Assets, (ii) Asset
Dispositions of Chi-Chi's Specified Assets, (iii) Ordinary Course
Dispositions, (iv) Permitted Sale and Lease-backs, and (v) after the
effective date of the HGI Acquisition, the HGI Disposition), minus (c) the
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Line Increase Blockage Amount.
"Maximum El Torito Revolving Amount" means (a) $35,000,000, minus
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(b) 100% of the Net Proceeds in excess of $3,500,000 received by FRI-MRD or
its Subsidiaries on or after the Closing Date from Permitted Dispositions
(other than (i) Asset Dispositions of Dinnerhouse Assets, (ii) Asset
Dispositions of Chi-Chi's Specified Assets, (iii) Ordinary Course
Dispositions, (iv) Permitted Sale and Lease-backs, and (v) after the
effective date of the HGI Acquisition, the HGI Disposition), minus (c) the
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Line Increase Blockage Amount.
"Permitted Investments" means (a) Permitted Ordinary Course
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Investments, (b) Permitted Acquisitions, (c) Permitted Dispositions, (d)
Investments existing on the Closing Date, (e) Permitted Toehold
Investments, (f) loans or other
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advances made from time to time to KKR and its Subsidiaries pursuant to the
KKR Credit Facility, (g) the HGI Acquisition, and (h) the KKR Merger.
c. Section 2.6(a) of the Agreement hereby is amended and
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restated in its entirety to read as follows:
(a) Interest Rate. Except as provided in clause (b) below (i) at
such times as the aggregate amount of Advances outstanding hereunder is
less than $23,333,333, all monetary Obligations that are charged to the
Loan Account (except for undrawn Letters of Credit) shall bear interest at
a per annum rate of 1.875 percentage points above the Reference Rate, and
(ii) at such times as the aggregate amount of Advances outstanding
hereunder is equal to or greater than $23,333,333, all monetary Obligations
that are charged to the Loan Account (except for undrawn Letters of Credit)
in excess of $23,333,333 shall bear interest at a per annum rate of 2.875
percentage points above the Reference Rate and the portion of such monetary
Obligations not in excess of $23,333,333 shall bear interest at a per annum
rate of 1.875 percentage points above the Reference Rate.
3. AMENDMENTS TO THE AGREEMENT TO FACILITATE THE HGI ACQUISITION.
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a. Section 1.1 of the Agreement hereby is amended by adding or
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modifying, as the case may be, the following definitions:
"Acquisition Lien" means in respect of the assets of (i) any
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Person that is the subject of a Permitted Acquisition, or (ii) HGI, after
giving effect to the HGI Acquisition, or (iii) KKR, after giving effect to
the KKR Merger, a Lien that attaches solely to such assets, is in
existence immediately prior to such Acquisition, the HGI Acquisition, or
the KKR Merger, as the case may be, and was not created in connection
with, or in anticipation of, the Acquisition of such Person, the HGI
Acquisition, or the KKR Merger, respectively.
"FRI-Sub" means FRI-Sub, Inc., a Delaware corporation.
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"Guarantors" means FRI, FRI-MRD, FRI-Admin, Franchising, upon the
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effectiveness of the HGI Acquisition, HGI, upon the effectiveness of the
KKR Merger, KKR, each of the Chi-Chi's Subsidiaries and each of the other
Subsidiaries of FRI-MRD from time to time party to one of the Guaranties.
"HGI" means The Hamlet Group, Inc., a California corporation.
---
"HGI Acquisition" means the acquisition by FRI-MRD from KKR of
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all of the issued and outstanding shares of Stock of HGI.
"HGI Acquisition Agreements" means the Stock Purchase Agreement,
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dated as of June 9, 1998, between FRI-MRD and KKR and all related
agreements,
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documents and instruments, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
"HGI Disposition" means the sale, transfer or other disposition,
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directly or indirectly, in one or a series of transactions, for cash or
other assets, by FRI-MRD of all or substantially all of the assets or Stock
of HGI.
"Net HGI Proceeds" means, (a) the gross cash proceeds received by
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or on behalf of FRI-MRD or its Subsidiaries in respect of an HGI
Disposition, less (b) the sum of (i) the amount, if any, of all (y) taxes
----
(other than income taxes) payable by FRI-MRD or its Subsidiaries in
connection with such HGI Disposition and (z) FRI-MRD's good faith best
estimate of the amount of all income taxes payable in connection with such
HGI Disposition, (ii)(A) the amount of any reasonable reserve established
in accordance with GAAP against any liabilities associated with the assets
sold or disposed of and retained by FRI-MRD or its Subsidiaries (including
any post-closing adjustments, severance, relocation, pension, and closure
liabilities provided for under the applicable purchase documentation),
provided that the amount of any subsequent reduction of such reserve (other
than in connection with a payment in respect of any such liability) shall
be deemed to be Net Cash Proceeds of an HGI Disposition occurring on the
date of such reduction, and (B) the amount applied to repay any
Indebtedness to the extent such Indebtedness is required by its terms to be
repaid as a result of such HGI Disposition, and (iii) reasonable and
customary fees, commissions, and expenses and other costs paid by FRI-MRD
or its Subsidiaries in connection with such HGI Disposition (other than
those payable to FRI-MRD or any Affiliate of FRI-MRD), in each case only to
the extent not already deducted in arriving at the amount referred to in
clause (a).
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"Pledged HGI Collateral" means: (a) the Pledged HGI Securities
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and the certificates representing the Pledged HGI Securities and any
interest of FRI-MRD in the entries on the books of any financial
intermediary pertaining to the Pledged HGI Securities, and all dividends or
distributions of any kind whatsoever (other than cash or cash equivalents)
from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the Pledged HGI Securities; (b) all
additional shares of, and all securities convertible into, and warrants,
options and other rights to purchase, Stock (whether certificated or
uncertificated and now existing or hereafter created) of HGI from time to
time acquired by FRI-MRD in any manner (which shares shall be deemed to be
part of the Pledged HGI Securities), the certificates or other instruments
representing such additional shares, securities, warrants, options, or
other rights and any interest of FRI-MRD in the entries on the books of any
financial intermediary pertaining to such additional shares, and all
dividends or distributions of any kind whatsoever (other than cash or cash
equivalents) from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such additional
shares, securities, warrants, options or other rights; and (c) to the
extent not covered in clause (a) or (b) hereof, all Proceeds thereof.
"Pledged HGI Securities" means all of the issued and outstanding
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shares of Stock of HGI as of the effective date of the HGI Acquisition.
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"Proceeds" shall have, for purposes of the definition of "Pledged
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HGI Collateral," the meaning ascribed thereto under the Uniform Commercial
Code as in effect in any relevant jurisdiction or under relevant law.
"Release Condition" means that (a) no Default or Event of Default
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has occurred and is continuing or would result therefrom, (b) with regard
to the HGI Disposition, the Senior Secured Discount Notes are prepaid in an
amount equal to 100% of the Net HGI Proceeds received from the HGI
Disposition in accordance with the provisions of the Senior Secured
Discount Note Agreement, (c) in all cases other than Asset Dispositions of
the Dinnerhouse Assets or the Chi-Chi's Specified Assets, FRI-MRD or its
Subsidiary is receiving at least fair value for the property or assets that
are the subject of the Asset Disposition, and (d) following such Asset
Disposition, the subject properties or assets are not to be the subject of
a lease (other than in connection with a Permitted Sale and Lease-back) by
FRI-MRD or any of its Subsidiaries.
"Relevant Measuring Period" means (a) as applied to (i) KKR, upon
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the effectiveness of the KKR Merger, (ii) HGI, upon the effectiveness of
the HGI Acquisition, and (iii) the combined EBITDA covenant set forth in
Section 7.20(c): with respect to June 30, 1999, the three months then
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ended, with respect to September 30, 1999, the six months then ended, with
respect to December 31, 1999, the nine months then ended, and, with respect
to any fiscal quarter ended thereafter, the twelve months then ended, and
(b) as applied to El Torito and Chi-Chi's, with respect to each Relevant
Measuring Period, the twelve months then ended.
"Senior Secured Discount Notes" means the 14.0% Senior Secured
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Discount Notes due January 24, 2002 to be issued by FRI-MRD, in an
aggregate principal amount not to exceed $24,000,000, the proceeds from the
sale of which are to be used to purchase the Pledged HGI Securities, and
thereafter to be secured by the Pledged HGI Collateral.
"Senior Secured Discount Note Agreement" means the Note Agreement
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to be entered into between FRI-MRD and each of the purchasers referred to
therein in connection with the issuance of the Senior Secured Discount
Notes, and any other note agreement providing for the issuance of the
Senior Secured Discount Notes, in each case, in form and substance
satisfactory to Foothill.
b. The definition of "Permitted Liens" in Section 1.1 of the
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Agreement is amended by replacing the final "." in clause (n) with ", and", and
adding the following as a new clause (m):
(m) the pledge of the Pledged HGI Security pursuant to the
Senior Discount Note Agreement.
c. The following is added as a new Section 5.15 to the Loan
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Agreement:
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5.15 ISSUANCE OF SENIOR SECURED DISCOUNT NOTES. The Senior
Secured Discount Note Agreement and the transactions contemplated
thereunder have been duly executed, delivered and performed in accordance
with their terms by the respective parties thereto in all respects,
including the fulfillment of all conditions precedent set forth therein.
All actions and proceedings required by the Senior Secured Discount Note
Agreement, applicable law or regulation have been taken and the
transactions required thereunder have been duly and validly taken and
consummated. No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the Senior Secured Discount Note Agreement.
Borrower has received the proceeds pursuant to each issuance of the Senior
Secured Discount Notes. Borrower has delivered, or caused to be delivered,
to Foothill true, correct and complete copies of the Senior Secured
Discount Note Agreement.
d. The following is added as a new Section 5.16 to the Loan
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Agreement:
5.16 HGI ACQUISITION. The HGI Acquisition Agreements and the
transactions contemplated thereunder have been duly executed, delivered and
performed in accordance with their terms by the respective parties thereto
in all respects, including the fulfillment of all conditions precedent set
forth therein and giving effect to the terms of the HGI Acquisition
Agreements, FRI-MRD has acquired and has good and marketable title to all
of the issued and outstanding shares of Stock of HGI, free and clear of all
claims, liens, pledges and encumbrances of any kind, except for the pledge
to the holders of the Senior Secured Discount Notes pursuant to the Senior
Secured Discount Note Agreement. All actions and proceedings required by
the HGI Acquisition Agreements, applicable law or regulation (including
compliance with the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976,
as amended) have been taken and the transactions required thereunder have
been duly and validly taken and consummated. No court of competent
jurisdiction has issued any injunction, restraining order or other order
which prohibits consummation of the transactions described in the HGI
Acquisition Agreements. Borrower has delivered, or caused to be delivered,
to Foothill true, correct and complete copies of the HGI Acquisition
Agreements.
e. Section 6.5 of the Agreement hereby is amended and restated
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in its entirety to read as follows:
6.5 TITLE TO EQUIPMENT. With the exception of Equipment of HGI,
in the event that the book value of all Equipment of Borrower and the
Guarantors the ownership of which is evidenced by a certificate of title or
similar form of evidence of ownership exceeds $200,000 in the aggregate,
then, upon Foothill's request, FRI-MRD and its Subsidiaries shall deliver
to Foothill, properly endorsed, any and all evidences of ownership of,
certificates of title, or applications for title to any items of Equipment
owned by Borrower or any Guarantor.
f. Subsections (c) and (d) of Section 6.8 of the Agreement
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hereby are amended and restated in their entirety to read as follows:
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(c) All such policies of insurance shall be in such form, with
such companies, and in such amounts as may be reasonably satisfactory to
Foothill. Insurance policies covering property and assets against loss by
fire, lightning, windstorm, hail, explosion, aircraft, smoke damage,
earthquake, elevator collisions and other risks included under an "extended
coverage" endorsement shall contain a California Form 438BFU (NS) mortgagee
endorsement, or an equivalent endorsement satisfactory to Foothill, showing
Foothill as a loss payee thereof as its interests may appear, and shall
contain a waiver of warranties. All such insurance (with the exception of
workers' compensation and health insurance policies and policies of
insurance covering the property or assets of HGI) shall name Foothill as an
additional insured as its interest may appear. Every policy of insurance
referred to in this Section 6.8 (with the exception of workers'
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compensation and health insurance policies and policies of insurance
covering the property or assets of HGI) shall contain an agreement by the
insurer that it will not cancel such policy except after 10 days prior
written notice to Foothill. Certified copies or originals of such policies
or certificates thereof satisfactory to Foothill evidencing such insurance
shall be delivered to Foothill prior to the expiration or cancellation of
the existing or preceding policies. Each of FRI-MRD and Borrower shall
deliver to Foothill, upon the request of Foothill, evidence of the payment
of all premiums for such policies of insurance.
(d) Each of FRI-MRD and Borrower shall give Foothill prompt
notice of any loss or damage to their properties and assets by fire,
lightning, windstorm, hail, explosion, aircraft, smoke damage, vehicle
damage, earthquake, elevator collision, and other risks included under an
"extended coverage" endorsement covered by such insurance in excess of
$250,000. With the exception of insurance policies covering the property
or assets of HGI, upon the occurrence and during the continuance of an
Event of Default, Foothill shall have the exclusive right to adjust all
losses payable under the applicable insurance policies without any
liability to FRI-MRD or Borrower, as applicable, whatsoever in respect of
such adjustments. Any monies received as payment for any loss or damage to
their properties and assets by fire, lightning, windstorm, hail, explosion,
aircraft, smoke damage, vehicle damage, earthquake, elevator collision, and
other risks included under an "extended coverage" endorsement under the
applicable insurance policy (exclusive of any casualty loss wherein the
insurance proceeds are less than $50,000 and excluding insurance proceeds
received with respect to the assets or properties of HGI), shall be paid
over to Foothill, and FRI-MRD and Borrower shall have the right to
designate in writing to Foothill within 45 days of such payment whether
such payment shall be (i) applied to the prepayment of the Obligations
without premium, in such order or manner as Foothill may elect (together
with a commensurate reduction of the Maximum Amount, the Maximum Chi-Chi's
Amount, the Maximum Chi-Chi's Revolving Amount, the Maximum El Torito
Amount, and the Maximum El Torito Revolving Amount), or (ii) disbursed to
FRI-MRD or its Subsidiary, as applicable, under staged payment terms
satisfactory to Foothill for application to the cost of repairs,
replacements, or restorations and subject to the conditions set forth in
this Section 6.8(d). In the event Foothill fails to receive timely such
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written designation or the conditions set forth in the following sentence
are not satisfied, the payment shall be applied in the manner set forth in
clause (i) of the immediately preceding sentence. If FRI-MRD and
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Borrower elect to cause Foothill to disburse any monies received as payment
for any loss pursuant to this Section 6.8(d), Foothill only shall be
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obligated to disburse such money for the repair, replacement or restoration
of the affected property or assets if all of the following conditions are
satisfied: (A) no Default or Event of Default has occurred and is
continuing or would result from the disbursement or application of such
monies; (B) FRI-MRD or Borrower have cash, cash equivalents, borrowing
availability under Section 2.1 or Section 2.3, and/or business interruption
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insurance proceeds in amounts sufficient, in Foothill's reasonable
judgment, to ensure that Borrower will be able to make payment as and when
due of each of its direct Obligations that will be payable during the
period of such repair, replacement, or restoration; (C) Foothill is
reasonably satisfied that the amount of such cash, cash equivalents,
borrowing availability, and/or insurance proceeds will be sufficient fully
to repair, replace, or restore the affected property or assets; (D)
construction, completion of the repair, replacement, or restoration of the
affected property or assets shall be completed in accordance with plans,
specifications, and drawings submitted to and approved by Foothill, which
approval shall not be unreasonably withheld or delayed; (E) all
construction and completion of the repair, replacement, or restoration
shall be effected with reasonable promptness and shall be of a value (the
"Replaced Value") (i) at least equal to the replacement value (the
"Destroyed Value") of such items of property destroyed or condemned prior
to such destruction or condemnation, or (ii) of a value less than the
Destroyed Value so long as the difference between the Destroyed Value and
the Replaced Value is applied to the prepayment of the Obligations without
premium, in such order or manner as Foothill may elect (together with a
commensurate reduction of the Maximum Amount, the Maximum Chi-Chi's Amount,
the Maximum Chi-Chi's Revolving Amount, the Maximum El Torito Amount, and
the Maximum El Torito Revolving Amount); and (f) all monies paid by
Borrower to Foothill may be commingled with other funds of Foothill and
will not bear interest pending disbursement hereunder. Upon the occurrence
and during the continuance of an Event of Default, Foothill shall have the
right to apply all prepaid premiums to the payment of the Obligations in
such order or form as Foothill shall determine.
g. Section 6.10 of the Agreement hereby is amended and restated
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in its entirety to read as follows:
6.10 LOCATION OF INVENTORY AND EQUIPMENT. With the exception of
the Inventory and Equipment of HGI, keep their Inventory and Equipment only
at or in-transit between the locations identified on Schedule 6.10;
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provided, however, that Borrower may amend Schedule 6.10 so long as such
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amendment occurs by written notice to Foothill not less than 30 days prior
to the date on which the Inventory or Equipment is moved to such new
location, so long as such new location is within the continental United
States, and so long as, at the time of such written notification, FRI-MRD
or its Subsidiary, as applicable, provides any financing statements or
fixture filings necessary to perfect and continue perfected Foothill's
security interests in such assets.
h. Section 7.1(b) of the Agreement hereby is amended and
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restated in its entirety to read as follows:
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(b) Indebtedness set forth on the Second Amended and Restated
---------------------------
Schedule 7.1;
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i. Section 7.8 of the Agreement hereby is amended and restated
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in its entirety to read as follows:
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by Section
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7.1(h), prepay, redeem, retire, defease, purchase, or otherwise acquire the
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Senior Discount Notes or the Senior Secured Discount Notes, provided,
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however, that so long as no Blockage Event exists, FRI-MRD may prepay,
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redeem, retire, defease, purchase, or otherwise acquire the Senior Discount
Notes or the Senior Secured Discount Notes; and
(b) Directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of the Senior Discount Note Agreement
or the Senior Secured Discount Note Agreement without the prior written
consent of Foothill.
j. The following is added as a new subsection (e) to Section 7.20 of
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the Agreement:
(e) EBITDA - HGI. In the case of HGI, fail to maintain EBITDA
(before deduction of general and administrative expenses allocated to HGI)
for the Relevant Measuring Period (and until such time as all or
substantially all of the assets or Stock of HGI is disposed of through one
or more HGI Dispositions) of not less than the relevant amount set forth in
the following table, measured on a fiscal quarter-end basis:
========================================
Period Ending Minimum EBITDA
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06/30/99 -0-
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09/30/99 $500,000
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12/31/99 $500,000
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quarterly thereafter $500,000
========================================
k. final "or" in clause (b) of the first sentence thereof, replacing
the final "." in clause (c) with "," and by adding the following as new clauses
(d) and (e):
(d) Section 7.14 of the Agreement is hereby amended by deleting the
the payment by FRI or FRI-MRD of reasonable and customary director fees and
the reimbursement of expenses to directors of FRI and its Subsidiaries
(including such payments to Apollo Related Persons), or
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(e) the payment by FRI or FRI-MRD of such amounts, in cash, provided
that the cash portion does not exceed $6,000,000, and in the Stock of FRI,
necessary to terminate the Family Restaurants, Inc., FRI-MRD, Corporation,
Chi-Chi's, Inc. and El Torito Restaurants, Inc. Amended and Restated Value
Creation Units Plan.
l. Amended and Restated Schedule 7.1 of the Agreement is hereby
---------------------------------
amended, restated, and replaced in its entirety by the Second Amended and
------------------
Restated Schedule 7.1 attached hereto.
---------------------
4. AMENDMENTS TO THE AGREEMENT TO FACILITATE THE KKR MERGER.
--------------------------------------------------------
a. Section 1.1 of the Agreement hereby is amended by adding or
-----------
modifying, as the case may be, the following definitions:
"KKR Merger" means the merger of FRI-Sub with and into KKR with KKR as
----------
the surviving corporation pursuant to the terms of the KKR Merger
Agreements.
"KKR Merger Agreements" means the Agreement and Plan of Merger by and
---------------------
among FRI, KKR, and FRI-Sub, and all related agreements (other than the KKR
Credit Facility), documents and instruments, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated
or replaced.
"Permitted KKR Capital Expenditures" means capital expenditures
----------------------------------
directly related to the operations of KKR and its Subsidiaries, plus new
unit expansion, in an amount not to exceed the amounts, and for the
periods, set forth below:
================================================================
Fiscal Year Ended Maximum Capital Expenditures
----------------------------------------------------------------
12/31/1999 $ 6,000,000
----------------------------------------------------------------
12/31/2000 $18,000,000
----------------------------------------------------------------
12/31/2001 and thereafter $30,000,000
================================================================
b. The definition of "Change of Control" in Section 1.1 of the
-----------
Agreement is amended by deleting the final "or" in clause (f), replacing the
final "." in clause (g) with ", or", and adding the following as a new clause
(h):
(h) FRI-MRD shall fail to own free and clear of any consensual Liens of any
Person (other than Liens in favor of Foothill) and control (without being
subject to any voting trust, voting agreement, shareholders agreement, or
any other agreement or arrangement limiting or affecting the voting of such
Voting Stock) at any time 100% of the outstanding Voting Stock of KKR by
vote (other than directors qualifying shares and
11
assuming that all convertible instruments, warrants, or options then
outstanding have been exercised).
c. The following is added as a new Section 5.17 to the Loan
------------
Agreement:
5.17 KKR MERGER. The KKR Merger is valid and effective in
accordance with the terms of the KKR Merger Agreements, and the corporation
statutes of the State of Delaware and KKR is the surviving corporation
pursuant to the merger. All actions, proceedings required by the KKR
Merger Agreements, applicable law and regulation (including but not limited
to, compliance with the Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of
1976, as amended) have been taken and the transactions required thereunder
have been duly and validly taken and consummated. No court of competent
jurisdiction has issued any injunction, restraining order or other order
which prohibits consummation of the transactions described in the KKR
Merger Agreements and no governmental action or proceeding has been
threatened or commenced seeking an injunction, restraining order or other
order which seeks to void or otherwise materially modify the transactions
described in the KKR Merger Agreements. Borrower has delivered, or caused
to be delivered, to Foothill, true, correct and complete copies of the KKR
Merger Agreements.
d. Section 7.3 of the Agreement hereby is amended and restated
-----------
in its entirety to read as follows:
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Except to the extent
otherwise permitted by Section 7.13, enter into any Acquisition, merger,
------------
consolidation, reorganization, or recapitalization, or reclassify its
capital Stock, or liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, assign, lease, transfer, or
otherwise dispose of, in one transaction or a series of related
transactions, all or substantially all of its property or assets; provided,
--------
however, that: (i) any Chi-Chi's Subsidiary may be merged with any other
-------
Chi-Chi's Subsidiary or with Chi-Chi's; and (ii) any Subsidiary of FRI-MRD
(other than one of the Chi-Chi's Subsidiaries, one of the Debtors or HGI)
may be merged with FRI-MRD or any of its Subsidiaries (other than the Chi-
Chi's Subsidiaries, one of the Debtors or HGI); and (iii) one Debtor may be
merged with the other Debtor.
e. Section 7.7 of the Agreement hereby is amended and restated
-----------
in its entirety to read as follows:
7.7 NATURE OF BUSINESS. With the exception of the lines of
business currently operated by Color Me Mine, Inc., and Arrosto Coffee
Company, Inc., each a wholly owned subsidiary of KKR, make any change in
the principal nature of FRI-MRD's or any of its Subsidiaries' business.
f. The following is added as a new subsection (e) to Section
-------
7.11 of the Agreement:
----
12
(e) FRI-MRD may make loans to or declare and pay dividends or
other distributions in cash to FRI to (i) pay, to the extent required to be
paid by applicable law, appraisal rights of dissenting KKR shareholders
upon the effectiveness of the KKR Merger, (ii) redeem shares of Stock of
KKR held by its officers, directors, or employees or its former officers,
directors, or employees (or their estates or beneficiaries under their
estates) that were issued pursuant to any stock option plan, restricted
stock plan, or similar arrangement pursuant to the terms under which such
shares of Stock were issued; provided, however, that the aggregate amount
-------- -------
of such dividends or other distributions shall not exceed $5,000,000, or
(iii) to reimburse FRI for reasonable costs and expenses paid or incurred
in connection with the HGI Acquisition or the KKR Merger.
g. Section 7.20(c) of the Agreement hereby is amended and
---------------
restated in its entirety to read as follows:
(c) EBITDA - Combined. In the case of Chi-Chi's, El Torito,
HGI, and KKR, on a combined basis, fail to maintain EBITDA for the Relevant
Measuring Period of not less than the relevant amount set forth in the
following table, measured on a fiscal quarter-end basis:
========================================
Period Ending Minimum EBITDA
----------------------------------------
09/30/98 $15,500,000
----------------------------------------
12/31/98 $15,500,000
----------------------------------------
03/31/99 $16,500,000
----------------------------------------
06/30/99 $17,500,000
----------------------------------------
09/30/99 $19,000,000
----------------------------------------
12/31/99 $21,000,000
----------------------------------------
quarterly thereafter $21,500,000
========================================
h. The following is added as a new subsection (f) to Section
7.20 of the Agreement:
(f) EBITDA - KKR. In the case of KKR, fail to maintain
EBITDA for the Relevant Measuring Period of not less than the relevant
amount set forth in the following table, measured on a fiscal quarter-end
basis:
13
===========================================================
Period Ending Minimum EBITDA
-----------------------------------------------------------
06/30/99 $1,000,000
-----------------------------------------------------------
09/30/99 $2,000,000
-----------------------------------------------------------
12/31/99 $3,000,000
-----------------------------------------------------------
quarterly thereafter $3,000,000
===========================================================
i. Section 7.21 of the Agreement hereby is amended and restated
------------
in its entirety to read as follows:
7.21 CAPITAL EXPENDITURES. With the exception of Permitted KKR
Capital Expenditures, make capital expenditures in connection with new
restaurants in any consecutive 12 month period in excess of the sum of (a)
the amount of equity capital contributions made by FRI to Borrower for the
sole purpose of permitting Borrower to make capital expenditures in
connection with new restaurants, plus (b) the greater of (i) $5,000,000, or
(ii) 25% of the combined EBITDA of the Debtors during the applicable 12
month period (as reflected in the financial statements delivered to
Foothill pursuant hereto). For purposes of this Section 7.21, a restaurant
shall be deemed to be a "new restaurant" if, as of any date of
determination, it was opened for the first time not more CAPITAL
EXPENDITURES. With the exception of Permitted KKR than 12 months prior to
such date.
5. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF SECTION 2 OF THIS
--------------------------------------------------------------
AMENDMENT.
---------
The effectiveness of the provisions of Section 2 of this Amendment is
---------
subject to the fulfillment, to the satisfaction of Foothill and its counsel, of
each of the following conditions:
a. Foothill shall have received and have completed a
satisfactory review of the Senior Secured Discount Note Agreement and such other
agreements or documents related to the Senior Secured Discount Notes as are
requested by Foothill in its reasonable discretion;
b. Foothill shall have received each of the following
documents, in form and substance satisfactory to Foothill and its counsel, duly
executed, and each such document shall be in full force and effect:
(1) this Amendment;
(2) the Reaffirmation and Consent (as hereinafter defined);
and
(3) a copy of the Senior Secured Discount Note Agreement,
certified by the Secretary of FRI-MRD as being true,
correct, and complete.
14
c. Foothill shall have received a line increase fee of
$500,000, which fee is earned in full by Foothill upon the Effective Date, but
shall be due and payable by Borrower to Foothill $150,000 concurrently with the
execution and delivery of this Amendment by Borrower and the balance of $350,000
due and payable by Borrower to Foothill on the HGI Closing Date, and, in each
case, non-refundable when paid;
d. The representations and warranties in Section 13 of this
Amendment, the Agreement as amended by Section 2 of this Amendment, and the
other Loan Documents shall be true and correct in all respects on and as of the
date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date);
e. After giving effect hereto, no Event of Default or event
which with the giving of notice or passage of time would constitute an Event of
Default shall have occurred and be continuing on the date hereof, nor shall
result from the consummation of the transactions contemplated herein;
f. No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated herein shall have been issued and remain in force by
any governmental authority against Borrower, FRI-MRD, any Guarantor, Foothill,
or any of their Affiliates;
g. No material adverse change shall have occurred in the
financial condition of Borrower, FRI-MRD, any Guarantor, or in the value of the
Collateral; and
h. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Foothill and its counsel.
6. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF SECTION 3 OF THIS
--------------------------------------------------------------
AMENDMENT.
---------
The effectiveness of the provisions of Section 3 of this Amendment is
---------
subject to the fulfillment, to the satisfaction of Foothill and its counsel, of
each of the following conditions:
a. Foothill shall have received a consent fee of $100,000,
which fee is earned in full by Foothill, due and payable by Borrower to Foothill
on the KKR Closing Date, and non-refundable when paid;
b. Foothill shall have received evidence, satisfactory to
Foothill, of the consummation of the HGI Acquisition;
c. Foothill shall have received each of the following
documents, in form and substance satisfactory to Foothill and its counsel, duly
executed, and each such document shall be in full force and effect:
15
(1) this Amendment;
(2) the Reaffirmation and Consent (as hereinafter defined);
(3) the Joinder Agreement (as hereinafter defined) executed
by HGI;
(4) a copy of the Senior Secured Discount Note Agreement,
certified by the Secretary of FRI-MRD as being true,
correct, and complete;
(5) a guaranty (in the form of Exhibit C attached hereto)
---------
executed by HGI;
(6) Amendment Number One to General Continuing Guaranty and
Security Agreement (in the form of Exhibit D attached
---------
hereto);
(7) Amendment Number One to Security Agreement (in the form
of Exhibit E attached hereto); and
---------
(8) Amendment Number One to Stock Pledge Agreement (in the
form of Exhibit F attached hereto).
---------
d. Foothill shall have received evidence satisfactory to it
that, contemporaneously with the HGI Closing Date, FRI-MRD shall receive the
proceeds pursuant to each issuance of the Senior Secured Discount Notes.
e. Foothill shall have received a certificate of status with
respect to HGI, dated within 20 days of the HGI Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization of
HGI, which certificate shall indicate that HGI is in good standing in such
jurisdiction;
f. Foothill shall have received a certificate from the
Secretary of HGI attesting to the resolutions of HGI's Board of Directors
authorizing its execution, delivery, and performance of its guaranty and
authorizing specific officers of HGI to execute the same, and authorizing its
performance of the Agreement as modified by this Amendment.
g. Foothill shall have received certificates of status with
respect to HGI, dated within 20 days of the HGI Closing Date, such certificates
to be issued by the appropriate officer of the jurisdictions in which HGI's
failure to be duly qualified or licensed would result in a Material Adverse
Change, which certificates shall indicate that HGI is in good standing in such
jurisdictions;
h. Foothill shall have received, in form and substance
satisfactory to Foothill, an opinion of Borrower's and Guarantors' counsel with
respect to the authorization,
16
execution and delivery of the HGI Acquisition Agreements by FRI or FRI-MRD, as
applicable, and such other related matters as Foothill may reasonably request;
i. Foothill shall have received such amended and restated, or
new Schedules to the Agreement as are necessary to reflect the addition of HGI
as a Subsidiary of FRI-MRD and as a Guarantor under the Agreement, and such
Schedules are reasonably satisfactory to Foothill;
j. No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the
transactions contemplated by Section 3 hereof herein shall have been issued and
remain in force by any governmental authority against Borrower, FRI-MRD, HGI,
any Guarantor, Foothill, or any of their Affiliates;
k. Foothill shall have received evidence, satisfactory to
Foothill, that all of the KKR Senior Notes have been, or will be upon the
consummation of the HGI Acquisition, redeemed.
l. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Foothill and its counsel.
7. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF SECTION 4 OF THIS
--------------------------------------------------------------
AMENDMENT.
---------
The effectiveness of the provisions of Section 4 of this Amendment is
---------
subject to the fulfillment, to the satisfaction of Foothill and its counsel, of
each of the following conditions:
a. Foothill shall have received evidence, reasonably
satisfactory to Foothill, of the consummation of the KKR Merger;
b. Foothill shall have received executed but unfiled financing
statements and fixture filings relative to the assets of KKR;
c. Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force and
effect:
(1) this Amendment;
(2) the Reaffirmation and Consent (as hereinafter defined);
(3) the Joinder Agreement (as hereinafter defined) executed
by KKR;
(4) a guaranty (in the form of Exhibit G attached hereto)
---------
executed by KKR;
17
(5) a certificate from an appropriate officer of KKR
regarding the depositaries at which KKR maintains
deposit accounts and account numbers of each of such
deposit accounts, together with notification letters to
such depositaries pursuant to Section 9302(g) of the
Code;
(6) the Guarantor Security Agreement (in the form of
Exhibit H attached hereto) executed by KKR; and
---------
(7) Amendment Number One to Stock Pledge Agreement (in the
form of Exhibit F attached hereto).
---------
d. Foothill shall have received a certificate from the
Secretary of KKR attesting to the resolutions of KKR's Board of Directors
authorizing its execution, delivery, and performance of its guaranty, the
Guarantor Security Agreement, and authorizing specific officers of such Obligor
to execute the same, and authorizing its performance of the Agreement as amended
by this Amendment;
e. Foothill shall have received a certificate of status with
respect to KKR, dated within 20 days of the KKR Closing Date, such certificate
to be issued by the appropriate officer of the jurisdiction of organization of
KKR, which certificate shall indicate that KKR is in good standing in such
jurisdiction;
f. Foothill shall have received certificates of status with
respect to KKR, dated within 20 days of the KKR Closing Date, such certificates
to be issued by the appropriate officer of the jurisdictions in which KKR's
failure to be duly qualified or licensed would result in a Material Adverse
Change, which certificates shall indicate that KKR is in good standing in such
jurisdictions;
g. Foothill shall have received, in form and substance
satisfactory to Foothill, an opinion of Borrower's and Guarantors' counsel with
respect to the effectiveness of the KKR Merger as of the KKR Closing Date, the
security interests and liens of Foothill with respect to the assets of KKR and
such other matters as Foothill may reasonably request;
h. Foothill shall have received, in form and substance
satisfactory to Foothill, evidence that the certificates of merger with respect
to the KKR Merger have been filed with the Secretary of State of the State of
Delaware and the KKR Merger is valid and effective in accordance with the terms
and provisions of the KKR Merger Agreements and the applicable corporation
statute of the State of Delaware.
i. With respect to KKR, Foothill shall have received a
certificate of insurance, together with the endorsements thereto, as is required
by Section 6.8 of the Agreement, the form and substance of which shall be
-----------
reasonably satisfactory to Foothill and its counsel;
18
j. Foothill shall have received such amended and restated, or
new Schedules to the Agreement as are necessary to reflect the addition of KKR
as a Subsidiary of FRI-MRD and as a Guarantor under the Agreement, and such
Schedules are reasonably satisfactory to Foothill;
k. No injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the consummation of the KKR
Merger shall have been issued and remain in force by any governmental authority
against Borrower, FRI-MRD, any Guarantor, Foothill, or any of their Affiliates;
l. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance reasonably satisfactory
to Foothill and its counsel.
8. CONDITIONS SUBSEQUENT. As a condition subsequent to the
---------------------
effectiveness of the increase in the Maximum Amount and the other amendments
related thereto set forth in Section 2 hereof, each of FRI-MRD and Borrower
---------
shall perform or cause to be performed the following (the failure by FRI-MRD or
Borrower to so perform or cause to be performed constituting an Event of Default
under the Agreement):
a. within 30 days of the Effective Date, Foothill shall have
received an opinion of counsel of Borrower, FRI-MRD, and the other Guarantors,
regarding the authorization, execution, delivery and enforceability of the
Amendment, in form and substance reasonably satisfactory to Foothill; provided,
--------
however, that until Foothill shall have received such opinion, the Line Increase
-------
Blockage Amount shall be $20,000,000 notwithstanding any reductions in the Line
Increase Blockage Amount pursuant to the terms of the Agreement, as amended
hereby;
b. within 30 days of the Effective Date, Foothill shall have
received a certificate from the Secretary of each Obligor attesting to the
resolutions of such Obligor's Board of Directors authorizing its execution,
delivery, and performance of this Amendment and authorizing specific officers of
such Obligor to execute the same; and
c. within 30 days of the Effective Date, Foothill shall have
received a duly executed collateral assignment of rights with respect to the
rights of FRI or any of its Subsidiaries under the KKR Credit Facility, and
shall have received any notes or other instruments evidencing KKR's Indebtedness
under the KKR Credit Facility.
9. CONSENT TO KKR CREDIT FACILITY. Notwithstanding anything herein
------------------------------
or in the Agreement to the contrary but without affecting future compliance with
the provisions of the Agreement including Section 3.2 thereof, upon the
-----------
satisfaction of the conditions set forth in Section 5 hereof, and pursuant to
---------
the terms and conditions of the Agreement and this Amendment, Foothill hereby
(a) consents to the financial arrangement pursuant to which FRI-MRD or one of
its Subsidiaries has agreed to make loans or other advances to KKR, in an amount
not to exceed $3,000,000, in the aggregate, outstanding at any one time, and (b)
agrees
19
that such financial arrangements shall constitute Permitted Investments pursuant
to the Agreement as amended by this Amendment.
10. CONSENT TO SENIOR SECURED DISCOUNT NOTES. Notwithstanding
----------------------------------------
anything herein or in the Agreement to the contrary but without affecting future
compliance with the provisions of the Agreement including Section 3.2 thereof,
-----------
upon the satisfaction of the conditions set forth in Section 6 hereof, and
---------
pursuant to the terms and conditions of the Agreement and this Amendment,
Foothill hereby (a) consents to the incurrence by FRI-MRD of up to $24,000,000
in aggregate principal amount of Indebtedness on the terms set forth in the
Senior Secured Discount Notes and the Senior Secured Discount Note Agreement,
and (b) agrees that such Indebtedness shall constitute permitted Indebtedness
pursuant to Section 7.1(b) of the Agreement as amended by this Amendment.
--------------
11. CONSENT TO HGI ACQUISITION. Notwithstanding anything herein or
--------------------------
in the Agreement to the contrary but without affecting future compliance with
the provisions of the Agreement including Section 3.2 thereof, upon the
-----------
satisfaction of the conditions set forth in Section 6 hereof, and pursuant to
---------
the terms and conditions of the Agreement and this Amendment, Foothill hereby
consents to the acquisition by FRI-MRD from KKR of all of the issued and
outstanding shares of Stock of HGI.
12. CONSENT TO KKR MERGER. Notwithstanding anything herein or in the
---------------------
Agreement to the contrary but without affecting future compliance with the
provisions of the Agreement including Section 3.2 thereof, upon the satisfaction
-----------
of the conditions set forth in Section 7 hereof, and pursuant to the terms and
---------
conditions of the Agreement and this Amendment, Foothill hereby consents to the
KKR Merger.
13. REPRESENTATIONS AND WARRANTIES. Each Borrower party hereto and
------------------------------
FRI-MRD hereby represents and warrants to Foothill that: (a) the execution,
delivery, and performance of this Amendment and of the Agreement, as amended by
this Amendment, are within its corporate powers, have been duly authorized by
all necessary corporate action, and are not in contravention of any law, rule,
or regulation, or any order, judgment, decree, writ, injunction, or award of any
arbitrator, court, or governmental authority, or of the terms of its charter or
bylaws, or of any contract or undertaking to which it is a party or by which any
of its properties may be bound or affected; and (b) this Amendment and the
Agreement, as amended by this Amendment, constitute each Borrower party hereto
and FRI-MRD's legal, valid, and binding obligation, enforceable against each
Borrower party hereto and FRI-MRD in accordance with their terms.
14. REAFFIRMATION AND CONSENT. Concurrently herewith, FRI-MRD and
-------------------------
Borrower shall cause each current Guarantor to execute and deliver to Foothill
the Reaffirmation and Consent attached hereto as Exhibit A (the "Reaffirmation
---------
and Consent").
15. JOINDER AGREEMENT. Concurrently with the consummation of the HGI
-----------------
Acquisition and the KKR Merger, Borrower shall cause HGI or KKR, as the case may
be, to execute and deliver to Foothill the Joinder Agreement in the form of
Exhibit B (the "Joinder Agreement").
---------
20
16. EFFECT ON AGREEMENT. The Agreement, as amended hereby, shall be
-------------------
and remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. The execution, delivery, and
performance of this Amendment shall not operate as a waiver of or, except as
expressly set forth herein, as an amendment, of any right, power, or remedy of
Foothill under the Agreement, as in effect prior to the date hereof.
17. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. Section 13 of the
------------------------------------------
Loan Agreement is incorporated herein by this reference as though fully set
forth herein.
18. MISCELLANEOUS.
-------------
a. Upon the effectiveness of this Amendment, each reference in
the Agreement to "this Agreement", "hereunder", "herein", "hereof" or words of
like import referring to the Agreement shall mean and refer to the Agreement as
amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in
the Loan Documents to the "Agreement", "thereunder", "therein", "thereof" or
words of like import referring to the Agreement shall mean and refer to the
Agreement as amended by this Amendment.
c. Upon the effectiveness of Section 3 of this Amendment, HGI
---------
shall be deemed a Guarantor under the Loan Agreement and each reference in the
Loan Documents to "Guarantors" or words of like import shall include HGI.
d. Upon the effectiveness of Section 4 of this Amendment, KKR
shall be deemed a Guarantor under the Loan Agreement and each reference in the
Loan Documents to "Guarantors" or words of like import shall include KKR.
e. This Amendment may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Amendment by signing
any such counterpart. Delivery of an executed counterpart of this Amendment by
telefacsimile shall be equally as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of
this Amendment by telefacsimile also shall deliver a manually executed
counterpart of this Amendment but the failure to deliver a manually executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Amendment.
[remainder of page intentionally left blank]
21
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first written above.
FRI-MRD CORPORATION,
a Delaware corporation
By /s/ Xxxxxx Xxxxxxx, Xx.
------------------------------
Title: President
--------------------------
EL TORITO RESTAURANTS, INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxx
------------------------------
Title: Treasurer
--------------------------
CHI-CHI'S INC.,
a Delaware corporation
By /s/ Xxxxxx Xxxxx
------------------------------
Title: Treasurer
--------------------------
FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ Xxxx Xxxx
------------------------------
Title: Executive V.P.
--------------------------
-S-1-
EXHIBIT A
----------
Reaffirmation and Consent
All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in that certain Amendment Number Four
to Loan and Security Agreement, dated as of June 9, 1998 (the "Amendment").
Each of the undersigned hereby (a) represents and warrants to Foothill that the
execution, delivery, and performance of this Reaffirmation and Consent are
within its corporate powers, have been duly authorized by all necessary
corporate action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or governmental authority, or of the terms of its charter or bylaws, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected; (b) consents to the amendment of the
Agreement by the Amendment; (c) acknowledges and reaffirms its obligations owing
to Foothill under the Guaranty and any other Loan Documents to which it is
party; and (d) agrees that each of the Guaranty and any other Loan Documents to
which it is a party is and shall remain in full force and effect. Although each
of the undersigned has been informed of the matters set forth herein and has
acknowledged and agreed to same, it understands that Foothill has no obligation
to inform it of such matters in the future or to seek its acknowledgement or
agreement to future amendments, and nothing herein shall create such a duty.
This Reaffirmation and Consent may be executed in any number of counterparts and
by different parties on separate counterparts, each of which, when executed and
delivered, shall be deemed to be an original, and all of which, when taken
together, shall constitute but one and the same Reaffirmation and Consent.
Delivery of an executed counterpart of this Reaffirmation and Consent by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Reaffirmation and Consent. Any party delivering an executed
counterpart of this Reaffirmation and Consent by telefacsimile also shall
deliver an original executed counterpart of this Reaffirmation and Consent but
the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Reaffirmation and Consent.
This Reaffirmation and Consent shall be governed by internal laws of the State
of California as more fully set forth in Section 13 of the Loan Agreement.
FAMILY RESTAURANTS, INC.,
a Delaware corporation
FRI-MRD CORPORATION,
a Delaware corporation
FRI-ADMIN CORPORATION,
a Delaware corporation
EL TORITO FRANCHISING COMPANY,
a Delaware corporation
CCMR OF TIMONIUM, INC.,
a Delaware corporation
CCMR OF MARYLAND, INC.,
a Delaware corporation
CHI-CHI'S OF KANSAS, INC.,
a Kansas corporation
CHI-CHI'S OF GREENBELT, INC.,
a Kentucky corporation
CHI-CHI'S FRANCHISE OPERATIONS CORPORATION,
a Kentucky corporation
CCMR OF CATONSVILLE, INC.,
a Kentucky corporation
CCMR OF GREENBELT, INC.,
a Kentucky corporation
CCMR OF XXXXXXX HIGHWAY, INC.,
a Kentucky corporation
CHI-CHI'S MANAGEMENT CORPORATION,
a Kentucky corporation
CCMR OF HARFORD COUNTY, INC.,
a Kentucky corporation
CHI-CHI'S OF SOUTH CAROLINA, INC.,
a Kentucky corporation
MAINTENANCE SUPPORT GROUP, INC.,
a Kentucky corporation
CCMR OF XXXXXXXXX, INC.,
a Kentucky corporation
CCMR OF INNER HARBOR, INC.,
a Kentucky corporation
CHI-CHI'S OF WEST VIRGINIA, INC.,
a Kentucky corporation
CCMR ADVERTISING AGENCY, INC.,
a Kentucky corporation
CCMR OF GOLDEN RING, INC.,
a Kentucky corporation
By _____________________________
Title: _________________________
CCMR OF CUMBERLAND, INC.,
a Kentucky corporation
By _____________________________
Title: Authorized Signatory
EXHIBIT B
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FORM OF
JOINDER AGREEMENT
____________, 1998
Foothill Capital Corporation
00000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Business Finance Division Manager
Re: Family Restaurants, Inc. Joinder Agreement
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Ladies and Gentlemen:
Reference hereby is made to that certain Loan and Security Agreement,
dated as of January 10, 1997 (as amended, restated, supplemented, or modified
from time to time, the "Loan Agreement"), by and between Foothill Capital
Corporation, a California corporation ("Lender"), on the one hand, and Family
Restaurants, Inc., a Delaware corporation, FRI-MRD Corporation, a Delaware
corporation, El Torito Restaurants, Inc., a Delaware corporation, Chi-Chi's,
Inc., a Delaware corporation, and each of their Subsidiaries (individually and
collectively, the "Obligors"), on the other hand. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in the
Loan Agreement.
This Joinder Agreement is executed and delivered by the entity
identified as the New Guarantor on the signature page hereof (the "New
Guarantor") in favor of Lender.
SECTION 1. Joinder. The New Guarantor hereby joins in and agrees to
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be bound by Section 15.11 of the Loan Agreement and any other Loan Document to
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which any Guarantor is a party, and, in so doing, hereby becomes a Guarantor.
SECTION 2. Representations and Warranties. The New Guarantor hereby
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represents and warrants to Lender that: (a) the execution, delivery, and
performance of this Joinder Agreement and any other Loan Document to which the
New Guarantor is party are within its corporate (or equivalent) powers, have
been duly authorized by all necessary corporate (or equivalent) action, and do
not and will not (i) violate any provision of federal, state, or local law or
regulation, the Governing Documents of the New Guarantor, or any order,
judgment, or decree of any court or other governmental authority binding on the
New Guarantor, (ii) conflict with, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation or material lease of the New Guarantor, (iii) result in or require
the creation or imposition of any Lien of
any material nature whatsoever upon any material properties or assets of any
Obligor, other than Permitted Liens, or (iv) require any approval of
Stockholders (or equivalent) or any approval or consent of any Person under any
material contractual obligation of the New Guarantor, other than those already
obtained prior to the effective date hereof; (b) this Joinder Agreement and any
and all other Loan Documents to which the New Guarantor is party constitute its
legal, valid, and binding obligations, enforceable against the New Guarantor in
accordance with their respective terms; (c) the chief executive office of the
New Guarantor is located at 00000 Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000;
(d) the FEIN of the New Guarantor is set forth following the name of the New
Guarantor on the signature page hereof; and (e) each other representation and
warranty applicable to the New Guarantor as a Guarantor under the Loan Documents
is and will be true and correct as of the date hereof.
SECTION 3. Binding Effect. This Joinder Agreement is binding upon
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and enforceable against the New Guarantor and its successors and assigns. It
shall inure to the benefit of and may be enforced by Lender and its successors
and assigns.
SECTION 4. Notices. Notices to the New Guarantor shall be given in
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the manner set forth in Section 12 of the Loan Agreement.
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SECTION 5. Loan Document. This Joinder Agreement is a Loan Document.
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SECTION 6. Loan Document References. (a) Each reference in the Loan
------------------------
Agreement and the other Loan Documents to "Guarantor", or words of like import
referring to the Guarantors shall include and refer to the undersigned New
Guarantor; and (b) each reference in the Loan Documents to this "Agreement",
"hereunder", "herein", "hereof", "thereunder", "therein", "thereof", or words of
like import referring to the Loan Agreement, or other Loan Document to which New
Guarantor is a party shall mean and refer to such Loan Document as supplemented
by this Joinder Agreement.
SECTION 7. Further Assurances. The New Guarantor and the other
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Obligors shall execute and deliver to Lender all [financing statements,
continuation financing statements, fixture filings, security agreements, chattel
mortgages, pledges, mortgages, deeds of trust, assignments, supplements in
respect of any of the foregoing, endorsements of certificates of title,
applications for title, schedules of accounts] affidavits, reports, notices,
letters of authority, and all other documents that Lender may reasonably
request, in form satisfactory to Lender, [to perfect and continue perfected
Lender's security interests in the Collateral and] in order to fully consummate
all of the transactions contemplated under this Joinder Agreement and the Loan
Documents.
(The text contained between the square brackets in Section 7 is only
applicable to the Joinder Agreement to be executed by KKR).
SECTION 8. Counterparts. This Joinder Agreement may be executed in
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any number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Joinder
Agreement by signing
any such counterpart. Delivery of an executed counterpart of this Joinder
Agreement by telefacsimile shall be equally as effective as delivery of an
original executed counterpart of this Joinder Agreement. Any party delivering
an executed counterpart of this Joinder Agreement by telefacsimile also shall
deliver an original executed counterpart of this Joinder Agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Joinder Agreement.
[Signature page to follow.]
IN WITNESS WHEREOF, each of the undersigned has caused this Joinder
Agreement to be duly executed and delivered as of the date first above written.
NEW GUARANTOR:
_______________________________,
a _________ corporation
By:__________________________
Title:
FEIN: _______________________
Acknowledged and Agreed:
FRI-MRD CORPORATION
EL TORITO RESTAURANTS, INC.
CHI-CHI'S, INC.
By___________________________
Title:_______________________
FOOTHILL CAPITAL CORPORATION
By___________________________
Title:_______________________
Second Amended and Restated Schedule 7.1
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INDEBTEDNESS
[TO BE PREPARED BY BORROWER ON THE BASIS OF EXISTING AMENDED AND RESTATED
SCHEDULE 7.1 TO THE AGREEMENT, REFLECTING THE CURRENT BALANCES FOR ALL EXISTING
SCHEDULED DEBT AS OF ___________, 1998 AND INCORPORATING THE ADDITIONAL SENIOR
DISCOUNT NOTES IN THE AMOUNT OF $24,000,000.]
