2- 3 "(f) Notwithstanding any contrary provision in this Section 2.07, any Net Cash Proceeds received from (i) the disposition of any assets set forth in the list referred to in Section 2. of the Fourth Amendment and (ii) the disposition of any other...
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EXHIBIT 10.1
FOURTH AMENDMENT TO
REVOLVING CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO THE REVOLVING CREDIT AGREEMENT (the
"Fourth Amendment") is made as of August 1, 1995, among FRI-M Corp., a Delaware
corporation (the "Borrower"), Family Restaurants, Inc., a Delaware corporation
("FRI"), each of the Subsidiary Guarantors, each of the banks identified on the
signature pages hereof (each a "Bank" and, collectively, the "Banks") and
Credit Lyonnais New York Branch, as Agent, Collateral Agent, Issuing Bank and
Swing Line Bank.
W I T N E S S E T H
WHEREAS, the Borrower, FRI, the Subsidiary Guarantors, the
Banks, the Agent, the Collateral Agent, the Issuing Bank and the Swing Line
Bank have entered into the Revolving Credit Agreement, dated as of January 27,
1994, as amended by the First Amendment to the Revolving Credit Agreement,
dated April 15, 1994, by the Second Amendment to the Revolving Credit
Agreement, dated August 15, 1994, and by the Third Amendment to the Revolving
Credit Agreement, dated March 24, 1995 (the "Credit Agreement");
WHEREAS the Borrower is in default under Section 9.01 of the
Credit Agreement as a result of the Borrower's failure to comply with the
financial covenants specified in Section 3. of this Fourth Amendment, and as a
result thereof, the Banks have no further obligations to make Loans or
participate in Swing Line Advances or Syndicated Letters of Credit;
WHEREAS Schedule A to this Fourth Amendment sets forth the
totals of all outstanding Loans, Swing Line Advances and Syndicated Letters of
Credit under the Credit Agreement as of the date hereof;
WHEREAS the Borrower has requested that the Banks waive such
defaults in order that it may borrow funds under the Credit Agreement and
maintain certain limited availability of funds through October 31, 1995;
WHEREAS the Banks have indicated that as a result of the
Borrower's present default under Section 9.01 of the Credit Agreement, except
as expressly provided for in the Credit Agreement as amended hereby, they will
not make any new Loans nor participate in any new Swing Line Advances or
Syndicated Letters of Credit;
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WHEREAS Credit Lyonnais is willing to fund a loan to enable
the Borrower to pay a dividend in the amount of $14,625,000 on August 1, 1995
to FRI (the "Dividend Loan"), and all parties hereby acknowledge that, as of
the date hereof, the Banks other than Credit Lyonnais are not required to fund
any portion of the Dividend Loan and that the terms of the Credit Agreement
allow Credit Lyonnais to fund the entire amount; and
WHEREAS, the parties hereto desire to amend the Credit
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements contained herein and in the Credit Agreement, the
parties hereto agree that the Credit Agreement is hereby amended as set forth
herein:
1. Capitalized terms used herein which are not otherwise
defined herein but are defined in the Credit Agreement shall have the meanings
given to them in the Credit Agreement.
2. The Borrower represents and warrants that a pro forma
cash forecast for the period from July 24, 1995 to August 18, 1995 and for the
period from August 21, 1995 to September 22, 1995, and a list of proposed asset
sales and other proceeds of asset financings expected to be completed by the
Borrower have been provided to the Banks and that they have been prepared by
the Borrower in good faith and represent the best estimate of management as to
the matters presented therein, and the Borrower acknowledges that the Banks are
relying on such information in entering into this Fourth Amendment. The
Borrower agrees that it will deliver to the Banks a pro forma cash forecast for
the period from September 25, 1995 to October 31, 1995 (the "October Forecast")
no later than September 5, 1995 (and the failure to provide the October
Forecast by such date shall be an Event of Default on such date without giving
effect to the 30-day cure period referred to in Section 9.01(d).
3. The parties hereto agree that failure by the Borrower to
meet the financial covenants in subsections 8.03(a), (c), (d), (e) and (f) for
the fiscal quarter ending June 1995 or for the four fiscal quarters ending June
1995, for the two fiscal quarters ending September 1995 or the four fiscal
quarters ending September 1995, shall not constitute Defaults or Events of
Default under the Credit Agreement.
4. Section 2.07 of the Credit Agreement is amended to add new
subsections (f) and (g) which shall read in their entirety as follows:
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"(f) Notwithstanding any contrary provision in this Section
2.07, any Net Cash Proceeds received from (i) the disposition of any
assets set forth in the list referred to in Section 2. of the Fourth
Amendment and (ii) the disposition of any other individual asset or
group of related assets (other than sales of inventory in the ordinary
course of business) resulting in net proceeds to the Borrower of more
than $500,000 shall first be applied to repay the outstanding Dividend
Loan and shall thereafter be applied to reduce each Bank's Commitment,
as set forth in and reduced by subsection (g) below, permanently by
such Bank's Pro Rata Share of such Net Cash Proceeds. Any notes or
other securities received in connection with any such disposition or
financing shall be pledged to the Banks until such securities are
liquidated, at which time the Net Cash Proceeds therefrom shall be
applied as set forth in the preceding sentence. Promptly upon receipt
of any such Net Cash Proceeds or marketable securities, FRI or the
Borrower shall deliver to the Agent a certificate signed by the chief
financial officer of FRI or the Borrower, as the case may be, setting
forth the amount of the gross cash proceeds received and the items
deducted therefrom in reasonable detail in order to confirm the amount
of such Net Cash Proceeds and the amount of any marketable securities
received.
(g) Notwithstanding any contrary provision in this Agreement,
no Bank will be obligated to extend any Loans or participate in any
Swing Line Advances or Syndicated Letters of Credit so long as the
total outstandings under this Agreement (exclusive of the Dividend
Loan) exceed (i) $125,100,000 on any day from the date of this Fourth
Amendment to August 3, 1995, (ii) $126,600,000 on any day from August
4, 1995 to August 25, 1995, or (iii) $125,100,000 on any day from
August 26, 1995 to October 31, 1995. After October 31, 1995, no Bank
will be obligated to extend any Loans or participate in any Swing Line
Advances or Syndicated Letters of Credit."
5. Section 7.03(c) of the Credit Agreement is amended to
read in its entirety as follows:
"(c) The Agent shall have received from the Borrower a
certificate signed by an authorized officer of the Borrower setting
forth details as to the use of proceeds of such Loan, Swing Line
Advance or Syndicated
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Letter of Credit. Promptly after the use of the proceeds of any Loan,
Swing Line Advance or Letter of Credit hereunder, the Borrower shall
deliver a certificate to the Agent detailing such use of proceeds in
accordance with the certificate presented pursuant to this Section
7.03(c)."
6. (a) Section 8.03 of the Credit Agreement is amended to
add a new last sentence to subsection (b) which shall read in its entirety as
follows:
"Notwithstanding any contrary provision in this Section
8.03(b), FRI, the Borrower and its Subsidiaries may not make Capital
Investments between July 1, 1995 and October 31, 1995 in an amount in
excess of $7,000,000."
(b) Section 8.03 of the Credit Agreement is further
amended to add a new subsection (g) which shall read in its entirety as
follows:
"(g) The Borrower and FRI shall maintain, for the 12 months ended
October 31, 1995, the minimum consolidated EBITDA, minimum interest
coverage ratio, fixed charge coverage ratio, adjusted fixed charge
coverage ratio and ratio of total indebtedness of the Borrower to
consolidated EBITDA, respectively, set forth in subsections (a), (c),
(d), (e) and (f) for the four fiscal quarters ended 9-95, and shall
deliver the certificates required by subsections 8.01(a)(i) and (iv)
no later than November 15, 1995."
7. Section 9.01 of the Credit Agreement is amended to
add a new subsection (o) which shall read in its entirety as follows:
"(o) (i) On any of the dates set forth below, the cumulative cash
flow of the Borrower for the period from July 24, 1995 to such date
(calculated based on column 11 of the cash forecasts delivered to the
Banks by the Borrower on the date of the Fourth Amendment), shall be
below the default amount set forth opposite such date below:
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Date Default Amount
--------- --------------
18-Aug-95 ($22,132,000)
01-Sep-95 ($16,365,000)
15-Sep-95 ($17,970,000)
29-Sep-95 ($12,908,000)
(ii) on October 13, 1995 or on October 27, 1995, the
cumulative cash flow of the Borrower from July 24, 1995 to such date
shall be below the default amount for such date, which default amount
shall be determined, on a basis consistent with the prior periods,
based on the October Forecast at such time as the Borrower delivers
the October Forecast to the Banks pursuant to Section 2. of the
Fourth Amendment."
8. The Borrower hereby covenants and agrees that it
shall deliver to the Banks a comprehensive financial and business plan, in a
form acceptable to the Banks, on or prior to October 1, 1995.
9. Each Bank shall receive a fee of 25 basis points on
such Bank's outstanding Loans, Swing Line Advances and obligations with respect
to outstanding Syndicated Letters of Credit as of the date hereof, payable only
if the parties hereto sign this Fourth Amendment to Revolving Credit Agreement
by 9:45 a.m., California time, on August 1, 1995. Such fee shall be paid on or
before August 31, 1995.
10. The Borrower and FRI represent and warrant that the
execution and delivery of this Fourth Amendment by each of the Borrower, FRI
and the Subsidiary Guarantors has been duly authorized by all necessary
corporate action and this Fourth Amendment is enforceable without any further
approval, authorization or consent.
11. The Borrower and FRI, on behalf of themselves, and,
to the extent they may lawfully do so, any of their respective present and
former officers, directors, shareholders, attorneys, agents, successors,
assigns, or anyone acting on their behalf, hereby release the Agent and the
Banks, and any of their respective officers and directors, employees, agents,
shareholders, affiliates, subsidiaries or parent corporations, representatives,
insurers, attorneys, advisors, successors, assigns, or anyone acting on their
behalf, from any liability, whether known or unknown, suspected or unsuspected,
concealed or hidden, accrued or unaccrued, from the beginning of time
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through the date of this Fourth Amendment, in connection with, arising out of
or related to the Credit Agreement and this Fourth Amendment.
To ensure that this Section 11. is fully enforceable in
accordance with its terms, the Borrower and FRI (on behalf of themselves, and,
to the extent they may lawfully do so, any of their respective present and
former officers, directors, employees, shareholders, attorneys, agents,
successors, assigns, or anyone acting on their behalf) hereby knowingly and
voluntarily waive any protection that they might have by virtue of Section 1542
of the California Civil Code, which provides:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
In addition, the Borrower and FRI (on behalf of themselves,
and, to the extent they may lawfully do so, any of their respective present and
former officers, directors, employees, shareholders, attorneys, agents,
successors, assigns, or anyone acting on their behalf), hereby knowingly and
voluntarily waive any protection that may exist under any comparable or similar
statutes and principles of common law of any and all states of the United
States or of the United States.
12. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS XX XXX XXXXX XX XXX XXXX, XXXXXX XXXXXX OF
AMERICA.
13. This Fourth Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall together constitute but one and the same
instrument. This Fourth Amendment shall become effective as of the date hereof
upon the delivery to the Agent of executed counterparts from the Company and
the Required Banks and the Agent shall so inform all of the parties hereto.
14. The Credit Agreement, as amended hereby, shall be binding
upon the Borrower, FRI, the Subsidiary Guarantors, the Banks, the Agent, the
Collateral Agent, the Issuing Bank and the Swing Line Bank and their respective
successors and assigns, and shall inure to the benefit of the Company, FRI, the
Subsidiary Guarantors, the Banks, the Agent, the Collateral Agent, the Issuing
Bank and the Swing Line Bank and their respective successors and assigns.
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15. Except as expressly provided in this Fourth Amendment,
all of the terms, covenants, conditions, restrictions and other provisions
contained in the Credit Agreement shall remain in full force and effect. The
Credit Agreement as amended by this Fourth Amendment, the materials delivered
pursuant hereto and the other Credit Documents constitute the entire agreement
and understanding among the parties hereto and supersede all prior agreements
and understandings among them relating to the subject matter hereof and
thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date first above written.
FRI-M CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
FAMILY RESTAURANTS, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Senior Vice President,
Finance
FRI-FRD CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
FRI-DHD CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
FRI-NA CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
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FRI-J CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
FRI-MRD CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
FRI-C CORPORATION
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: Vice President
CHI-CHI'S, INC.
By:
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CCMR OF CUMBERLAND, INC.
By:
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Authorized Signatory
CCMR OF GREENBELT, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
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CCMR OF MARYLAND, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
CCMR OF TIMONIUM, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
CHI-CHI'S OF SOUTH CAROLINA, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
CHI-CHI'S OF WEST VIRGINIA, INC.
By:
---------------------------
Name: X.X. Xxxxxxx, Xx.
Title: President
COCO'S RESTAURANTS, INC.
By:
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
FAR WEST CONCEPTS, INC.
By:
---------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
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jojos RESTAURANTS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
jojos CALIFORNIA FAMILY
RESTAURANTS INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
EL TORITO RESTAURANTS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CARROWS RESTAURANTS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
CARROWS CALIFORNIA FAMILY
RESTAURANTS, INC.
By:
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Treasurer
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CREDIT LYONNAIS NEW YORK BRANCH
as Agent for the Banks
By:
---------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH
as Collateral Agent for the Banks
By:
---------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH
Signing as a Bank, as the Issuing
Bank and as the Swing Line Bank
By:
---------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Senior Vice President
UNITED STATES NATIONAL BANK OF
OREGON
By:
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE MITSUBISHI TRUST AND BANKING
CORPORATION, Los Angeles Agency
By:
---------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Manager and
Senior Vice President
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Schedule A
Outstandings as of July 31, 1995
under Revolving Credit Agreement
Letters of Credit $ 38,500,727
LIBOR Loans 75,000,000
Base Rate Loans 6,900,000
Swing-Line Loans 500,000
------------
$120,900,727
============
LA_LAN01\44663.10
