FRI-M CORPORATION
THIRD AMENDMENT
TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of March 7, 1997 and entered into by and among FRD ACQUISITION CO., a
Delaware corporation ("HOLDINGS"), FRI-M CORPORATION, a Delaware corporation
("COMPANY"), the other Credit Support Parties (as defined in Section 4 hereof),
THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each
individually referred to herein as a "LENDER" and collectively as "LENDERS"),
BANKERS TRUST COMPANY, THE CHASE MANHATTAN BANK (FORMERLY KNOWN AS CHEMICAL
BANK) and CITICORP USA, INC., as co-syndication agents for Lenders (in such
capacity, each individually referred to herein as a "CO- SYNDICATION AGENT" and
collectively as "CO-SYNDICATION AGENTS"), and CREDIT LYONNAIS NEW YORK BRANCH,
as administrative agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT"),
and is made with reference to that certain Credit Agreement dated as of May 23,
1996, by and among Holdings, Company, Lenders, Co- Syndication Agents and
Administrative Agent, as amended by that First Amendment to Credit Agreement,
Guaranties and Certain Collateral Documents dated as of July 1, 1996 and the
Second Amendment to Credit Agreement, Guaranties and Certain Collateral
Documents dated as of November 19, 1996 (as so amended, the "CREDIT AGREEMENT"),
and to the other Loan Documents. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, Loan Parties and Lenders desire to further amend the
Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENT TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SECTION 1.1: DEFINITIONS
A. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting therefrom the definition of "Consolidated Excess Cash Flow" in its
entirety and substituting therefor the following definition:
1
"CONSOLIDATED EXCESS CASH FLOW" means, for any
period, an amount (if positive) equal to (i) the sum, without
duplication, of the amounts for such period of (a) Consolidated
Adjusted EBITDA and (b) the Consolidated Working Capital Adjustment
(other than any Consolidated Working Capital Adjustment arising from
(AA) with respect to the period ended December 31, 1996 only, changes
in the accrued interest account (it being understood that the
Consolidated Excess Cash Flow for all other periods shall include the
Consolidated Working Capital Adjustment arising from any changes in the
accrued interest account) or (BB) changes in the net assets held for
sale) minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total
Debt (excluding repayments of Revolving Loans except to the extent the
Revolving Loan Commitments are permanently reduced in connection with
such repayments), (b) Consolidated Capital Expenditures (net of any
proceeds of any related financings with respect to such expenditures),
(c) Consolidated Cash Interest Expense, and (d) the provision for
current taxes based on income of Holdings and its Subsidiaries and paid
or payable in cash with respect to such period."
SECTION 2. CONDITIONS TO EFFECTIVENESS
Section 1 of this Amendment shall become effective only upon
the prior or concurrent satisfaction of all of the following conditions
precedent (the date of satisfaction of such conditions being referred to herein
as the "THIRD AMENDMENT EFFECTIVE DATE"):
A. On or before the Third Amendment Effective Date, Company
shall deliver to Lenders (or to Administrative Agent for Lenders) counterparts
of this Amendment executed by Lenders and each of the other parties hereto.
B. On or before the Third Amendment Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of
Lenders, and its counsel shall be satisfactory in form and substance to
Administrative Agent and such counsel, and Administrative Agent and such counsel
shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to
amend the Credit Agreement in the manner provided herein, each of Holdings,
Company and each other Loan Party party hereto represents and warrants to each
Lender that the following statements are true, correct and complete:
2
A. CORPORATE POWER AND AUTHORITY. Each Loan Party party hereto
has all requisite corporate power and authority to enter into this Amendment and
to carry out the transactions contemplated hereby and each of Holdings, Company
and each other Loan Party party hereto has all requisite corporate power and
authority to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as further amended by this Amendment
(the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Holdings, Company
and each of the other Loan Parties party hereto, as the case may be.
C. NO CONFLICT. The execution and delivery by each Loan Party
party hereto of this Amendment and the performance by such Loan Party of this
Amendment and the performance by Holdings and Company of the Amended Agreement
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to Holdings or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of Holdings or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Holdings or any of its Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of Holdings or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of Holdings or any of its Subsidiaries (other than any
Liens created under any of the Loan Documents in favor of Administrative Agent
on behalf of Lenders), or (iv) require any approval of stockholders or any
approval or consent of any Person under any Contractual Obligation of Holdings
or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by each
Loan Party party hereto of this Amendment and the performance by such Loan Party
of this Amendment and the performance by Holdings and Company of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment has been duly executed
and delivered by each Loan Party party hereto and this Amendment and the Amended
Agreement are the legally valid and binding obligations of such Loan Party,
enforceable against such Loan Party in accordance with their respective terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Third Amendment Effective Date to the same extent as
though made on and as of
3
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Company is a party to certain Collateral Documents, in each
case as amended through the Third Amendment Effective Date, pursuant to which
Company has created Liens in favor of Administrative Agent on certain Collateral
to secure the Obligations. Each of the other Loan Parties party hereto is a
party to certain Collateral Documents, the Subsidiary Guaranty or the Holdings
Guaranty, in each case as amended through the Third Amendment Effective Date,
pursuant to which each such Loan Party has (i) guarantied the Obligations and
(ii) created Liens in favor of Administrative Agent on certain Collateral to
secure the obligations of such Loan Party under the Subsidiary Guaranty or the
Holdings Guaranty, as the case may be. The Loan Parties party hereto are
collectively referred to herein as the "CREDIT SUPPORT PARTIES", and the
Collateral Documents, the Subsidiary Guaranty and the Holdings Guaranty are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement, the Collateral
Documents and Guaranties and this Amendment and consents to the further
amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guaranty or secure, as the case may be, to the fullest extent
possible the payment and performance of all "Obligations," "Guarantied
Obligations" and "Secured Obligations," as the case may be (in each case as such
terms are defined in the applicable Credit Support Document), including without
limitation the payment and performance of all such "Obligations," "Guarantied
Obligations" or "Secured Obligations," as the case may be, in respect of the
Obligations of Company now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein.
Each Credit Support Party acknowledges and agrees that any of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Amended Agreement and the other Credit Support Documents to which it is a party
or otherwise bound are true, correct and complete in
4
all material respects on and as of the Third Amendment Effective Date to the
same extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.
Each Credit Support Party (other than Holdings and Company)
acknowledges and agrees that (i) notwithstanding the conditions to effectiveness
set forth in this Amendment, such Credit Support Party is not required by the
terms of the Credit Agreement or any other Loan Document to consent to the
amendments to the Credit Agreement effected pursuant to this Amendment and (ii)
nothing in the Credit Agreement, this Amendment or any other Loan Document shall
be deemed to require the consent of such Credit Support Party to any future
amendments to the Credit Agreement.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(i) On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
B. FEES AND EXPENSES. Company acknowledges that all reasonable
costs, fees and expenses as described in subsection 11.2 of the Credit Agreement
incurred by Administrative Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of Company.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
5
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment (other than the
provisions of Section 1, which shall become effective upon the satisfaction of
each of the conditions set forth in Section 2) shall become effective upon the
execution of a counterpart hereof by all Lenders and each of the other parties
hereto and receipt by Company and Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
6
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
FRD ACQUISITION CO.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-M CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-FRD CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
CFC FRANCHISING COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-J CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
JOJOS RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
S-1
JOJOS CALIFORNIA FAMILY RESTAURANTS,
INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
COCO'S RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-C CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
CARROWS RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
CARROWS CALIFORNIA FAMILY
RESTAURANTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-DHD CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
S-2
FAR WEST CONCEPTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
FRI-NA CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
Title: Vice President and Treasurer
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title:
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent
By:
Title:
THE CHASE MANHATTAN BANK (FORMERLY
KNOWN AS CHEMICAL BANK), individually and as
Co-Syndication Agent
By:
Title:
CITICORP USA, INC., individually and as Co-
Syndication Agent
By:
Title:
S-3
FAR WEST CONCEPTS, INC.
By:
Title:
FRI-NA CORPORATION
By:
Title:
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title: Senior Vice President
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent
By:
Title:
THE CHASE MANHATTAN BANK (FORMERLY
KNOWN AS CHEMICAL BANK), individually and as
Co-Syndication Agent
By:
Title:
CITICORP USA, INC., individually and as Co-
Syndication Agent
By:
Title:
S-3
FAR WEST CONCEPTS, INC.
By:
Title:
FRI-NA CORPORATION
By:
Title:
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title:
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent
By: /s/ Xxxx Xx Xxxxx
Title: Assistant Vice President
THE CHASE MANHATTAN BANK (FORMERLY
KNOWN AS CHEMICAL BANK), individually and as
Co-Syndication Agent
By:
Title:
CITICORP USA, INC., individually and as Co-
Syndication Agent
By:
Title:
S-3
FAR WEST CONCEPTS, INC.
By:
Title:
FRI-NA CORPORATION
By:
Title:
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title:
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent
By:
Title:
THE CHASE MANHATTAN BANK (FORMERLY
KNOWN AS CHEMICAL BANK), individually and as
Co-Syndication Agent
By: /s/
Title:
CITICORP USA, INC., individually and as Co-
Syndication Agent
By:
Title:
S-3
FAR WEST CONCEPTS, INC.
By:
Title:
FRI-NA CORPORATION
By:
Title:
LENDERS: CREDIT LYONNAIS NEW YORK BRANCH,
individually and as Administrative Agent
By:
Title:
BANKERS TRUST COMPANY, individually and
as Co-Syndication Agent
By:
Title:
THE CHASE MANHATTAN BANK (FORMERLY
KNOWN AS CHEMICAL BANK), individually and as
Co-Syndication Agent
By:
Title:
CITICORP USA, INC., individually and as Co-
Syndication Agent
By: /s/ Xxxxxxx Xxxxxx
Title: Attorney-in-Fact
S-3
