EXHIBIT 10(ff)
AMENDMENT NUMBER ONE TO
STOCK PLEDGE AGREEMENT
This AMENDMENT NUMBER ONE TO STOCK PLEDGE AGREEMENT (this "Amendment")
is entered into as of October 30, 1998, by and between Foothill Capital
Corporation, a California corporation ("Foothill"), and FRI-MRD CORPORATION, a
Delaware corporation ("FRI-MRD") with reference to the following facts:
A. Foothill, on the one hand, and El Torito Restaurant's, Inc. ("El
Torito"), a Delaware corporation, Chi-Chi's, Inc., a Delaware
Corporation (collectively with El Torito, "Borrower"), 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 "Loan Agreement");
B. Foothill and FRI-MRD have heretofore entered into that certain
Stock Pledge Agreement, dated as of January 10, 1997 (the "Stock
Pledge Agreement"), pursuant to which FRI-MRD pledged, granted,
transferred, and assigned to Foothill a security interest in the
Collateral (as therein defined) to secure the Secured Obligations (as
therein defined), as provided therein;
C. Borrower, FRI-MRD, and Foothill have heretofore entered into that
certain Amendment Number Four to Loan and Security Agreement (the
"Fourth Amendment") to permit, inter alia, (a) FRI-MRD's issuance of
----------
new Senior Secured Discount Notes in the original principal amount of
up to $24,000,000 (yielding gross proceeds of approximately
$21,000,000) to be secured by a pledge of the Pledged HGI Collateral,
and (b) 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. Borrower and FRI-MRD have requested Foothill to amend the Stock
Pledge Agreement to permit the foregoing transactions; and
E. Foothill is willing to so modify the Stock Pledge Agreement in
accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein, Foothill and FRI-MRD hereby agree as follows:
1. DEFINITIONS FOR THIS AMENDMENT.
------------------------------
Any and all initially capitalized terms used herein shall have the
meanings ascribed thereto in the Stock Pledge Agreement, as amended hereby. For
purposes of this Amendment only, the following initially capitalized terms shall
have the following meanings:
"Effective Date" means the date on which Foothill acknowledges, in
--------------
writing, that each of the conditions contained in Section 3 have been fulfilled
---------
or waived.
"HGI Closing Date" shall have the meaning ascribed thereto in the
----------------
Fourth Amendment.
"KKR Closing Date" shall have the meaning ascribed thereto in the
----------------
Fourth Amendment.
2. AMENDMENTS TO THE STOCK PLEDGE AGREEMENT TO FACILITATE THE HGI
ACQUISITION.
a. Section 1(a) of the Stock Pledge Agreement hereby is amended
------------
by modifying the following definition:
"Future Rights" shall mean: (a) to the extent of Pledgor's
-------------
interest therein, all shares of stock (other than Pledged Shares) of
the Issuers, and all securities convertible or exchangeable into, and
all warrants, options, or other rights to purchase, shares of stock of
the Issuers; (b) to the extent of Pledgor's interest therein, all
shares of, all securities convertible or exchangeable into, and all
warrants, options, or other rights to purchase shares of stock of any
Person, not including HGI, in which Pledgor, after the date of this
Agreement, acquires a direct equity interest, irrespective of whether
such Person is or becomes a Subsidiary of Pledgor; and (c) the
certificates or instruments representing such additional shares,
convertible or exchangeable securities, warrants, and other rights and
all dividends, cash, options, warrants, rights, instruments, and other
property or proceeds from time to time received, receivable, or
otherwise distributed in respect of or in exchange for any or all of
such shares.
3. AMENDMENTS TO THE STOCK PLEDGE AGREEMENT TO FACILITATE THE KKR
MERGER.
a. Schedule A of the Stock Pledge Agreement is hereby amended,
----------
restated, and replaced in its entirety by the Schedule A attached hereto.
----------
4. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF SECTION 2 TO 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 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:
-2-
(1) this Amendment; and
(2) the Fourth Amendment;
b. Foothill shall have received a certificate from the Secretary
of FRI-MRD attesting to the resolutions of FRI-MRD's Board of Directors
authorizing its execution, delivery, and performance of this Amendment and
authorizing specific officers of FRI-MRD to execute the same;
c. All conditions to the effectiveness of Section 3 of the Fourth
---------
Amendment shall have been fulfilled or waived, and the same shall be in full
force and effect.
d. As of the HGI Closing Date, 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; and
e. 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.
5. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF SECTION 3 TO 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 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; and
(2) the Fourth Amendment.
b. All conditions to the effectiveness of Section 4 of the Fourth
---------
Amendment shall have been fulfilled or waived, and the same shall be in full
force and effect.
c. Foothill shall have received a certificate from the Secretary
of FRI-MRD attesting to the resolutions of FRI-MRD's Board of Directors
authorizing its execution, delivery, and performance of this Amendment and
authorizing specific officers of FRI-MRD to execute the same;
d. As of the KKR Closing Date, no injunction, writ, restraining
order, or other order of any nature prohibiting, directly or indirectly, the
consummation of the
-3-
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; and
e. 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. REPRESENTATIONS AND WARRANTIES. FRI-MRD hereby represents and
------------------------------
warrants to Foothill that: (a) the execution, delivery, and performance of this
Amendment and of the Stock Pledge 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; (b) this Amendment and the Stock Pledge
Agreement, as amended by this Amendment, constitute FRI-MRD's legal, valid, and
binding obligation, enforceable against FRI-MRD in accordance with its terms.
7. EFFECT ON STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, as
--------------------------------
amended by this Amendment, 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 Stock Pledge
Agreement, as in effect prior to the date hereof.
8. MISCELLANEOUS.
-------------
a. Upon the effectiveness of this Amendment, each reference in
the Stock Pledge Agreement to "this Agreement", "hereunder", "herein", "hereof"
or words of like import referring to the Stock Pledge Agreement shall mean and
refer to the Stock Pledge Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in
the Loan Documents to the "Stock Pledge Agreement", "thereunder", "therein",
"thereof" or words of like import referring to the Stock Pledge Agreement shall
mean and refer to the Stock Pledge Agreement as amended by this Amendment.
c. 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.
-4-
[Signature page to follow.]
-5-
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________________________________
Title:____________________________
FOOTHILL CAPITAL CORPORATION,
a California corporation
By________________________________
Title:____________________________
-6-
SCHEDULE A
----------
TO
STOCK PLEDGE AGREEMENT
----------------------
Pledgor: FRI-MRD CORPORATION
Pledged Shares
--------------
Former Name, if Pledgor's
Number of Certificate any, in which Percentage Jurisdiction of
Issuer Shares Class Numbers Certificate Issued Ownership Incorporation
------ -------- ----- ------- ------------------ --------- -------------
EL TORITO RESTAURANTS, INC. 100 common 3 100% Delaware
CHI-CHI'S INC. 1000 common 5 100% Delaware
FRI-ADMIN CORPORATION 100 common 3 100% Delaware
EL TORITO FRANCHISING COMPANY 100 common 1 100% Delaware
XXX XXX ROO, INC. -------- common ------- 100% Delaware
-7-
