EXHIBIT 10(hh)
AMENDMENT NUMBER FIVE TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER FIVE TO LOAN AND SECURITY AGREEMENT (this
"Amendment") is entered into as of October 30, 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"), FRI-MRD, and Foothill desire to amend the
Agreement as set forth in this Amendment; and
C. 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. Amendments to the Agreement.
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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:
"HGI Subsidiaries" means those Persons identified on Schedule
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5.18 of the Agreement.
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"KKR Subsidiaries" means those Persons identified on
Schedule 5.19 of the Agreement .
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b. The following is added as a new Section 5.18 to the
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Agreement:
5.18 HGI Subsidiaries. Except as set forth on Schedule 5.18, the HGI
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Subsidiaries have no liabilities, properties or assets, or engage in any
business activities.
c. The following is added as a new Section 5.19 to the
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Agreement:
5.19 KKR Subsidiaries. Except as set forth on Schedule 5.19, the KKR
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Subsidiaries have no liabilities, properties or assets, or engage in
any business activities.
d. The following is added as a new Section 7.22 to the
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Agreement:
7.22 HGI Subsidiaries. Permit, except as set forth on Schedule 5.18,
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the HGI Subsidiaries to incur any liabilities, or to hold any
properties or assets, or to engage in any business activities.
e. The following is added as a new Section 7.23 to the
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Agreement:
7.23 KKR Subsidiaries. Permit, except as set forth on Schedule 5.19,
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the KKR Subsidiaries to incur any liabilities, or to hold any
properties or assets, or to engage in any business activities.
f. Schedule 5.18 and Schedule 5.19 are hereby incorporated
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into the Agreement by this reference.
2. Conditions Precedent to the Effectiveness of this Amendment.
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The effectiveness 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 certificate from the
Secretary of each of Borrower and FRI-MRD attesting that all of the HGI
Subsidiaries, as set forth on Schedule 5.18 of the Agreement, as hereby amended,
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have no liabilities, properties or assets, or engage in any business activities,
except as set forth on Schedule 5.18 of the Agreement, as hereby amended.
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b. Foothill shall have received a certificate from the
Secretary of each of Borrower and FRI-MRD attesting that all of the KKR
Subsidiaries, as set forth on Schedule 5.19 of the Agreement, as hereby amended,
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have no liabilities, properties or assets, or engage in any business activities,
except as set forth on Schedule 5.19 of the Agreement, as hereby amended.
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c. Foothill shall have received the reaffirmation and
consent attached hereto as Exhibit A, duly executed by each Guarantor, and such
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document shall be in full force and effect;
d. The representations and warranties in this Amendment,
the Agreement as amended by 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
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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; and
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.
2A. Conditions Subsequent. As a condition subsequent to the effectiveness
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of this Amendment, 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. Anything in Section 2.2 of the Security Agreement, dated as of
October 30, 1998 (the "KKR Security Agreement"), entered into between KKR and
Foothill to the contrary notwithstanding, within 30 days after the date of
consummation of the KKR Merger, KKR shall (i) execute and deliver to Foothill a
stock pledge agreement (substantially in the form of the Stock Pledge Agreement
executed and delivered by Chi-Chi's with respect to the Stock of the Chi-Chi's
Subsidiaries), and (ii) deliver to Foothill possession of the original Stock
certificates respecting 65% of the issued and outstanding shares of Stock of
1170060 Ontario Limited;
b. Anything in Section 2.2 of the KKR Security Agreement to the
contrary notwithstanding, within 30 days after the date of consummation of the
KKR Merger, with respect to each KKR Subsidiary in existence as of the date of
consummation of the KKR Merger (other than 1170060 Ontario Limited), KKR shall
(i) merge such KKR Subsidiary with and into KKR, with KKR being the surviving
Person, (ii) merge such KKR Subsidiary into another KKR Subsidiary, (iii)
dissolve such KKR Subsidiary, or (iv) deliver to Foothill possession of the
original Stock certificates of such KKR Subsidiary respecting all of the issued
and outstanding shares of Stock of such KKR Subsidiary; and
c. Within 120 days after the date of consummation of the KKR Merger,
Foothill shall have received evidence, satisfactory to Foothill in its sole
discretion, that the obligations of KKR guaranteeing the obligations under
certain mortgages of certain Persons in which KKR owns an equity interest under
have been terminated. Anything in the Loan Agreement or other Loan Documents to
the contrary notwithstanding, for such 120 day period, such obligations of KKR
shall not constitute an Event of Default to the extent that (i) the aggregate
amount of such obligations do not exceed $1,750,000, (ii) such obligations were
in existence as of the date of consummation of the KKR Merger, and (iii) such
obligations have been disclosed to Foothill.
3. Representations and Warranties. Each of Borrower and FRI-MRD
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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; (b) this Amendment and the
Agreement, as amended by this Amendment, constitute Borrower's and FRI-MRD's
legal, valid, and binding obligation, enforceable against Borrower and FRI-MRD
in accordance with its terms.
4. Effect on Agreement. The Agreement, as amended hereby, shall be
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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.
5. Choice of Law and Venue; Jury Trial Waiver. Section 13 of the
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Agreement is incorporated herein by this reference as though fully set forth
herein.
6. Miscellaneous.
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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. 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.
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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 X. XXXXXXX, XX.
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Title: PRESIDENT
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EL TORITO RESTAURANTS, INC.,
a Delaware corporation
By /s/ XXXXXX X. XXXXXXX, XX.
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Title: VICE PRESIDENT
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CHI-CHI'S INC.,
a Delaware corporation
By /s/ XXXXXX X. XXXXXXX, XX.
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Title: VICE PRESIDENT
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FOOTHILL CAPITAL CORPORATION,
a California corporation
By /s/ XXXXX X. XXXXX
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Title: SENIOR VICE PRESIDENT
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-S-1-
SCHEDULE 5.18
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HGI Subsidiaries.
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Entity Assets
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H.H.K. of Virginia, Inc. Non-assignable liquor licenses
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H.H. of Maryland, Inc. Non-assignable liquor licenses
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Schedule 5.18
SCHEDULE 5.19
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KKR Subsidiaries.
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Entity Assets
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Arrosto Coffee Company, Inc. Certain trademark rights in Canada
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Arrosto Coffee Company None
Franchising, Inc.
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A.C.C. Las Vegas LLC None
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CMM Dissolution, Inc. Certain trademark rights in Canada
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Color Me Mine SW, LLC None
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Caulk 'N Paw None
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Lean Chick - 792 Lexington, Inc. None
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Food-Eez, Inc. None
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Xxx Xxx Roo Licensing Systems, None
Inc.
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1170060 Ontario Limited None
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Schedule 5.19
