EXHIBIT 10.33
FORM OF
AMENDMENT NUMBER ONE TO
SECURITY AGREEMENT
This AMENDMENT NUMBER ONE TO SECURITY AGREEMENT (this "Amendment") is
entered into as of June 9, 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 amended by that certain Amendment Number One to
Loan and Security Agreement, dated as of May 23, 1997, as amended by
that certain Amendment Number Two to Loan and Security Agreement,
dated as of August 12, 1997, as amended by that certain Amendment
Number Three to Loan and Security Agreement, dated as of April __,
1998, and as amended by that certain Amendment Number Four to Loan and
Security Agreement, dated as of the date hereof (the "Fourth
Amendment"), (collectively, the "Loan Agreement");
B. Foothill and FRI-MRD have heretofore entered into that certain General
Continuing Guaranty, dated as of January 10, 1997 (the "Guaranty"),
pursuant to which FRI-MRD has guaranteed the obligations of Borrower
to Foothill under the Loan Agreement, and that certain Security
Agreement, dated as of January 10, 1997 (the "Security Agreement"),
pursuant to which FRI-MRD has collateralized its obligations under the
Guaranty;
C. Borrower and FRI-MRD have requested Foothill to consent to, inter
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alia, 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;
D. Borrower and FRI-MRD have requested Foothill to amend the Loan
Agreement and the Security Agreement to permit the foregoing
transactions;
E. Concurrently herewith, Borrower, FRI-MRD, and Foothill are entering
into the Fourth Amendment to so modify the Loan Agreement; and
F. Foothill is willing to so modify the Security 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.
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Any and all initially capitalized terms used herein shall have the
meanings ascribed thereto in the Security 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
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writing, that each of the conditions contained in Section 3 have been fulfilled
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or waived.
2. AMENDMENTS TO THE SECURITY AGREEMENT.
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a. Section 1.1 of the Agreement hereby is amended by modifying
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the following definition:
"Collateral" means each of the following: the Accounts;
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Guarantor's Books; the Equipment; the General Intangibles; the Inventory;
the Negotiable Collateral; any money, or other assets of Guarantor which
now or hereafter come into the possession, custody, or control of Foothill;
and the proceeds and products, whether tangible or intangible, of any of
the foregoing, including proceeds of insurance covering any or all of the
Collateral, and any and all Accounts, Guarantor's Books, Equipment, General
Intangibles, Inventory, Negotiable Collateral, money, deposit accounts, or
other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion
thereof or interest therein, and the proceeds thereof; provided, however,
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that the Pledged HGI Collateral and the proceeds or products thereof shall
not constitute Collateral.
b. Section 5.1 of the Security Agreement hereby is amended and
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restated in its entirety to read as follows:
5.1 LIENS. Create, incur, assume, or permit to exist, directly
or indirectly, any Lien on or with respect to any of its property or
assets, of any kind, whether now owned or hereafter acquired, or any income
or profits therefrom, except for Permitted Liens and the pledge of the
Pledged HGI Collateral pursuant to the Senior Secured Discount Note
Agreement.
3. CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THIS AMENDMENT.
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The effectiveness of the provisions of this Amendment is subject to
the fulfillment, to the satisfaction of Foothill and its counsel, of each of the
following conditions:
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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 3 of the
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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 such FRI-MRD to execute the same;
d. 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.
4. REPRESENTATIONS AND WARRANTIES. FRI-MRD hereby represents and
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warrants to Foothill that: (a) the execution, delivery, and performance of this
Amendment and of the Security 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 Security
Agreement, as amended by this Amendment, constitute FRI-MRD's legal, valid, and
binding obligation, enforceable against FRI-MRD in accordance with its terms.
5. EFFECT ON SECURITY AGREEMENT. The Security Agreement, as amended
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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 Security Agreement, as in effect
prior to the date hereof.
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6. MISCELLANEOUS.
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a. Upon the effectiveness of this Amendment, each reference in
the Security Agreement to "this Agreement", "hereunder", "herein", "hereof" or
words of like import referring to the Security Agreement shall mean and refer to
the Security Agreement as amended by this Amendment.
b. Upon the effectiveness of this Amendment, each reference in
the Loan Documents to the "Security Agreement", "thereunder", "therein",
"thereof" or words of like import referring to the Security Agreement shall mean
and refer to the Security 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.
[Signature page to follow.]
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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
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Title:
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FOOTHILL CAPITAL CORPORATION,
a California corporation
By
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Title:
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