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EXHIBIT 10(x)
GENERAL CONTINUING GUARANTY
FAMILY RESTAURANTS, INC.
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated as of
January 10, 1997, is executed and delivered by FAMILY RESTAURANTS, INC., a
Delaware corporation ("Guarantor"), in favor of Foothill Capital Corporation, a
California corporation ("Guarantied Party"), in light of the following:
WHEREAS, Debtor, Guarantor, Guarantied Party, and the other
parties thereto are, contemporaneously herewith, entering into the Loan
Agreement; and
WHEREAS, in order to induce Guarantied Party to extend
financial accommodations to Debtor pursuant to the Loan Agreement, and in
consideration thereof, and in consideration of any loans or other financial
accommodations at any time extended by Guarantied Party to Debtor pursuant to
the Loan Agreement, Guarantor has agreed to guaranty the Guarantied
Obligations.
NOW, THEREFORE, in consideration of the foregoing, Guarantor
hereby agrees, in favor of Guarantied Party, as follows:
1. Definitions and Construction.
(a) Definitions. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Loan Agreement. The following terms, as used in this Guaranty, shall have
the following meanings:
"Debtor" shall mean any one or more of
Chi-Chi's, Inc., a Delaware corporation, and El Torito Restaurants, Inc., a
Delaware corporation, individually and collectively, jointly and severally.
"Guarantied Obligations" shall mean the due
and punctual payment of the principal of, and interest (including, any and all
interest which, but for the application of the provisions of the Bankruptcy
Code, would have accrued on such amounts) on, and premium, if any, on the
Indebtedness owed by Debtor to Guarantied Party pursuant to the terms of the
Loan Documents.
"Guarantied Party" shall have the meaning set
forth in the preamble to this Guaranty.
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"Guarantor" shall have the meaning set forth
in the preamble to this Guaranty.
"Guaranty" shall have the meaning set forth
in the preamble to this Guaranty.
"Indebtedness" shall mean any and all
Obligations, whether recovery is or hereafter becomes barred by any statute of
limitations or otherwise becomes unenforceable for any reason whatsoever,
including any act or failure to act by Guarantied Party.
"Loan Agreement" shall mean that certain Loan
and Security Agreement, dated as of the date hereof, entered into between
Debtor, Guarantied Party, and the other parties thereto.
"Permitted Liens" shall have the meaning set
forth in that certain Guarantor Security Agreement executed by Guarantor.
"Restricted Subsidiary" means any Subsidiary
of Guarantor (other than FRI-MRD and its Subsidiaries) that has not been
designated by Guarantor as an Unrestricted Subsidiary.
"Unrestricted Subsidiary" means any
Subsidiary of Guarantor (other than FRI-MRD and its Subsidiaries) that is (a)
now existing or hereafter created or acquired, and (b) designated in writing by
Guarantor to Foothill as an Unrestricted Subsidiary.
(b) Construction. Unless the context of this
Guaranty clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the part includes the
whole, the terms "include" and "including" are not limiting, and the term "or"
has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and other similar terms refer to
this Guaranty as a whole and not to any particular provision of this Guaranty.
Any reference in this Guaranty to any of the following documents includes any
and all alterations, amendments, restatements, extensions, modifications,
renewals, or supplements thereto or thereof, as applicable: the Loan Agreement;
this Guaranty; and the other Loan Documents. This Guaranty has been reviewed
by Guarantor, Guarantied Party, and their respective counsel, and shall be
construed and interpreted according to the ordinary meaning of the words used
so as to fairly accomplish the purposes and intentions of Guarantied Party and
Guarantor.
2. Guarantied Obligations. Guarantor hereby irrevocably
and unconditionally guaranties to Guarantied Party, as and for its own debt,
until final and indefeasible payment
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thereof has been made, (a) the payment of the Guarantied Obligations, in each
case when and as the same shall become due and payable, whether at maturity,
pursuant to a mandatory prepayment requirement, by acceleration, or otherwise;
it being the intent of Guarantor that the guaranty set forth herein shall be a
guaranty of payment and not a guaranty of collection; and (b) the punctual and
faithful performance, keeping, observance, and fulfillment by Debtor of all of
the agreements, conditions, covenants, and Obligations of Debtor contained in
the Loan Agreement, and under each of the other Loan Documents.
3. Continuing Guaranty. This Guaranty includes
Guarantied Obligations arising under successive transactions continuing,
compromising, extending, increasing, modifying, releasing, or renewing the
Guarantied Obligations, changing the interest rate, payment terms, or other
terms and conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been satisfied in whole or
in part. To the maximum extent permitted by law, Guarantor hereby waives any
right to revoke this Guaranty as to future Indebtedness. If such a revocation
is effective notwithstanding the foregoing waiver, Guarantor acknowledges and
agrees that (a) no such revocation shall be effective until written notice
thereof has been received by Guarantied Party, (b) no such revocation shall
apply to any Guarantied Obligations in existence on such date (including any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Guarantied Obligations made or created after
such date to the extent made or created pursuant to a legally binding
commitment of Guarantied Party in existence on the date of such revocation, and
(d) any payment by Debtor or from any source other than Guarantor subsequent to
the date of such revocation shall first be applied to that portion of the
Guarantied Obligations as to which the revocation is effective and which are
not, therefore, guarantied hereunder, and to the extent so applied shall not
reduce the maximum obligation of Guarantor hereunder.
4. Performance Under this Guaranty. In the event that
Debtor fails to make any payment of any Guarantied Obligations, on or before
the due date thereof, or if Debtor shall fail to perform, keep, observe, or
fulfill any other obligation referred to in clause (b) of Section 2 hereof in
the manner provided in the Loan Agreement or the other Loan Documents, as
applicable, Guarantor immediately shall cause such payment to be made or each
of such obligations to be performed, kept, observed, or fulfilled.
5. Primary Obligations. This Guaranty is a primary and
original obligation of Guarantor, is not merely the creation of a surety
relationship, and is an absolute, unconditional, and continuing guaranty of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions until full and final payment in cash
(or other consideration acceptable to Foothill in its sole discretion and
agreed to by Foothill) of the Guarantied Obligations and the termination of all
commitments of Foothill to extend Credit to
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Debtor or Guarantor. Guarantor agrees that it is directly, jointly and
severally with any other guarantor of the Guarantied Obligations, liable to
Guarantied Party, that the obligations of Guarantor hereunder are independent
of the obligations of Debtor or any other guarantor, and that a separate action
may be brought against Guarantor, whether such action is brought against Debtor
or any other guarantor or whether Debtor or any other guarantor is joined in
such action. Guarantor agrees that its liability hereunder shall be immediate
and shall not be contingent upon the exercise or enforcement by Guarantied
Party of whatever remedies it may have against Debtor or any other guarantor,
or the enforcement of any lien or realization upon any security Guarantied
Party may at any time possess. Guarantor agrees that any release which may be
given by Guarantied Party to Debtor or any other guarantor shall not release
Guarantor. Guarantor consents and agrees that Guarantied Party shall be under
no obligation to marshal any property or assets of Debtor or any other
guarantor in favor of Guarantor, or against or in payment of any or all of the
Guarantied Obligations.
6. Waivers.
(a) To the fullest extent permitted by applicable
law, Guarantor hereby waives: (i) notice of acceptance hereof; (ii) notice of
any loans or other financial accommodations made or extended under the Loan
Agreement, or the creation or existence of any Guarantied Obligations; (iii)
notice of the amount of the Guarantied Obligations, subject, however, to
Guarantor's right to make inquiry of Guarantied Party to ascertain the amount
of the Guarantied Obligations at any reasonable time; (iv) notice of any
adverse change in the financial condition of Debtor or of any other fact that
might increase Guarantor's risk hereunder; (v) notice of presentment for
payment, demand, protest, and notice thereof as to any instrument among the
Loan Documents; (vi) notice of any unmatured Event of Default or Event of
Default under the Loan Agreement; and (vii) all other notices (except if such
notice is specifically required to be given to Guarantor under this Guaranty or
any other Loan Documents to which Guarantor is a party) and demands to which
Guarantor might otherwise be entitled.
(b) To the fullest extent permitted by applicable
law, Guarantor hereby waives the right by statute or otherwise to require
Guarantied Party to institute suit against Debtor or to exhaust any rights and
remedies which Guarantied Party has or may have against Debtor. In this
regard, Guarantor agrees that it is bound to the payment of each and all
Guarantied Obligations, whether now existing or hereafter arising, as fully as
if such Guarantied Obligations were directly owing to Guarantied Party by
Guarantor. Guarantor further waives any defense arising by reason of any
disability or other defense (other than the defense that the Guarantied
Obligations shall have been fully and finally performed and indefeasibly paid)
of Debtor or by reason of the cessation from any cause whatsoever of the
liability of Debtor in respect thereof.
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(c) To the fullest extent permitted by applicable
law, Guarantor hereby waives: (i) any rights to assert against Guarantied
Party any defense (legal or equitable), set-off, counterclaim, or claim which
Guarantor may now or at any time hereafter have against Debtor or any other
party liable to Guarantied Party on account of or with respect to the
Guarantied Obligations; (ii) any defense, set-off, counterclaim, or claim, of
any kind or nature, arising directly or indirectly from the present or future
lack of perfection, sufficiency, validity, or enforceability of the Guarantied
Obligations or any security therefor; (iii) any defense arising by reason of
any claim or defense based upon an election of remedies by Guarantied Party
including any defense based upon an election of remedies by Guarantied Party
under the provisions of Section Section 580d and 726 of the California Code of
Civil Procedure, or any similar law of California or any other jurisdiction;
(iv) the benefit of any statute of limitations affecting Guarantor's liability
hereunder or the enforcement thereof, and any act which shall defer or delay
the operation of any statute of limitations applicable to the Guarantied
Obligations shall similarly operate to defer or delay the operation of such
statute of limitations applicable to Guarantor's liability hereunder.
(d) Until such time as all of the Guarantied
Obligations have been fully, finally, and indefeasibly paid in full in cash (or
other consideration acceptable to Foothill in its sole discretion and agreed to
by Foothill): (i) Guarantor hereby waives and postpones any right of
subrogation Guarantor has or may have as against Debtor with respect to the
Guarantied Obligations; (ii) in addition, Guarantor hereby waives and postpones
any right to proceed against Debtor or any other Obligor with respect to any
portion of the Obligations, now or hereafter, for contribution, indemnity,
reimbursement, or any other suretyship rights and claims (irrespective of
whether direct or indirect, liquidated or contingent), with respect to the
Guarantied Obligations; and (iii) in addition, Guarantor also hereby waives
and postpones any right to proceed or to seek recourse against or with respect
to any property or asset of Debtor.
(e) If any of the Guarantied Obligations at any
time are secured by a mortgage or deed of trust upon real property, Guarantied
Party may elect, in its sole discretion, upon a default with respect to the
Guarantied Obligations, to foreclose such mortgage or deed of trust judicially
or nonjudicially in any manner permitted by law, before or after enforcing this
Guaranty, without diminishing or affecting the liability of Guarantor
hereunder. Guarantor understands that (a) by virtue of the operation of
California's antideficiency law applicable to nonjudicial foreclosures, an
election by Guarantied Party nonjudicially to foreclose such a mortgage or deed
of trust probably would have the effect of impairing or destroying rights of
subrogation, reimbursement, contribution, or indemnity of Guarantor against
Debtor or other guarantors or sureties, and (b) absent the waiver given by
Guarantor herein, such an election would estop Guarantied Party from enforcing
this Guaranty against Guarantor. Understanding the foregoing, and understanding
that Guarantor is hereby relinquishing a defense to the enforceability of this
Guaranty, Guarantor hereby waives any right to assert against Guarantied Party
any defense to the enforcement of this Guaranty, whether denominated "estoppel"
or
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otherwise, based on or arising from an election by Guarantied Party
nonjudicially to foreclose any such mortgage or deed of trust securing the
Guarantied Obligations. Guarantor understands that the effect of the foregoing
waiver may be that Guarantor may have liability hereunder for amounts with
respect to which Guarantor may be left without rights of subrogation,
reimbursement, contribution, or indemnity against Debtor or other guarantors or
sureties. Guarantor also agrees that the "fair market value" provisions of
Section 580a of the California Code of Civil Procedure shall have no
applicability with respect to the determination of Guarantor's liability under
this Guaranty.
(f) WITHOUT LIMITING THE GENERALITY OF ANY OTHER
WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR HEREBY WAIVES,
TO THE MAXIMUM EXTENT SUCH WAIVER IS PERMITTED BY LAW, ANY AND ALL BENEFITS OR
DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY ONE OR MORE OF CALIFORNIA
CIVIL CODE Section Section 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821,
2822, 2838, 2839, 2845, 2847, 2848, 2849, AND 2850, CALIFORNIA CODE OF CIVIL
PROCEDURE Section Section 580A, 580B, 580C, 580D, AND 726, AND CHAPTER 2 OF
TITLE 14 OF THE CALIFORNIA CIVIL CODE.
(g) WITHOUT LIMITING THE GENERALITY OF ANY OTHER
WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY, GUARANTOR WAIVES ALL
RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION OF REMEDIES BY THE GUARANTIED
PARTY, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE
WITH RESPECT TO SECURITY FOR A GUARANTEED OBLIGATION, HAS DESTROYED THE
GUARANTOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE DEBTOR BY THE
OPERATION OF SECTION 580D OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR
OTHERWISE.
7. Releases. Guarantor consents and agrees that,
without notice to or by Guarantor and without affecting or impairing the
obligations of Guarantor hereunder, Guarantied Party may, by action or
inaction, compromise or settle, extend the period of duration or the time for
the payment, or discharge the performance of, or may refuse to, or otherwise
not enforce, or may, by action or inaction, release all or any one or more
parties to, any one or more of the terms and provisions of the Loan Agreement
or any of the other Loan Documents or may grant other indulgences to Debtor in
respect thereof, or may amend or modify at any time (or from time to time) any
one or more of the Loan Agreement or any of the other Loan Documents in any
manner permitted thereunder, or may, by action or inaction, release or
substitute any other guarantor, if any, of the Guarantied Obligations, or may
enforce, exchange, release, or waive, by action or
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inaction, any security for the Guarantied Obligations or any other guaranty of
the Guarantied Obligations, or any portion thereof.
8. No Election. Guarantied Party shall have the right
to seek recourse against Guarantor to the fullest extent provided for herein
and no election by Guarantied Party to proceed in one form of action or
proceeding, or against any party, or on any obligation, shall constitute a
waiver of Guarantied Party's right to proceed in any other form of action or
proceeding or against other parties unless Guarantied Party has expressly
waived such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by Guarantied Party under
any document or instrument evidencing the Guarantied Obligations shall serve to
diminish the liability of Guarantor under this Guaranty except to the extent
that Guarantied Party finally and unconditionally shall have realized
indefeasible payment by such action or proceeding.
9. Indefeasible Payment. The Guarantied Obligations
shall not be considered indefeasibly paid for purposes of this Guaranty unless
and until all payments to Guarantied Party are no longer subject to any right
on the part of any person whomsoever, including Debtor, Debtor as a debtor in
possession, or any trustee (whether appointed under the Bankruptcy Code or
otherwise) of Debtor's assets to invalidate or set aside such payments or to
seek to recoup the amount of such payments or any portion thereof, or to
declare same to be fraudulent or preferential. In the event that, for any
reason, all or any portion of such payments to Guarantied Party is set aside or
restored, whether voluntarily or involuntarily, after the making thereof, the
obligation or part thereof intended to be satisfied thereby shall be revived
and continued in full force and effect as if said payment or payments had not
been made and Guarantor shall be liable for the full amount Guarantied Party is
required to repay plus any and all costs and expenses (including attorneys
fees) paid by Guarantied Party in connection therewith.
10. Financial Condition of Debtor. Guarantor represents
and warrants to Guarantied Party that it is currently informed of the financial
condition of Debtor and of all other circumstances which a diligent inquiry
would reveal and which bear upon the risk of nonpayment of the Guarantied
Obligations. Guarantor further represents and warrants to Guarantied Party
that it has read and understands the terms and conditions of the Loan Agreement
and the other Loan Documents. Guarantor hereby covenants that it will continue
to keep itself informed of Debtor's financial condition, the financial
condition of other guarantors, if any, and of all other circumstances which
bear upon the risk of nonpayment or nonperformance of the Guarantied
Obligations.
11. [Intentionally Omitted.]
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12. Payments; Application. All payments to be made
hereunder by Guarantor shall be made in lawful money of the United States of
America at the time of payment, shall be made in immediately available funds,
and shall be made without deduction (whether for taxes or otherwise) or offset.
All payments made by Guarantor hereunder shall be applied as follows: first,
to all reasonable out-of-pocket costs and expenses (including reasonable
attorneys fees) actually incurred by Guarantied Party in enforcing this
Guaranty or in collecting the Guarantied Obligations; second, to all accrued
and unpaid interest, premium, if any, and fees owing to Guarantied Party
constituting Guarantied Obligations; and third, to the balance of the
Guarantied Obligations.
13. Attorneys Fees and Costs. Guarantor agrees to pay
promptly all reasonable attorneys fees and all other reasonable costs and
expenses which may be incurred by Guarantied Party in the enforcement of this
Guaranty or in any way arising out of, or consequential to the protection,
assertion, or enforcement of the Guarantied Obligations (or any security
therefor), irrespective of whether suit is brought.
14. Notices. Unless otherwise specifically provided in
this Guaranty, any notice or other communication relating to this Guaranty or
any other agreement entered into in connection therewith shall be in writing
and shall be personally delivered or sent by registered or certified mail,
postage prepaid, return receipt requested, or by prepaid telex, TWX,
telefacsimile, or telegram (with messenger delivery specified) to Guarantor or
to Guarantied Party, as the case may be, at its addresses set forth below:
If to Guarantor: FAMILY RESTAURANTS, INC.
00000 Xxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
with a copy to: SKADDEN, ARPS, SLATE,
XXXXXXX & XXXX LLP
000 X. Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopy No.: (000) 000-0000
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If to Guarantied Party: FOOTHILL CAPITAL CORPORATION
00000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Business Finance Division Manager
Telecopy No.: (000) 000-0000
with a copy to: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Telecopy No.: (000) 000-0000
The parties hereto may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given
to the other. All notices or demands sent in accordance with this Section 14,
other than notices by Guarantied Party in connection with Sections 9504 or 9505
of the Code, shall be deemed received on the earlier of the date of actual
receipt or three (3) calendar days after the deposit thereof in the mail.
Guarantor acknowledges and agrees that notices sent by Guarantied Party in
connection with Sections 9504 or 9505 of the Code shall be deemed sent when
deposited in the mail or transmitted by telefacsimile or other similar method
set forth above.
15. Cumulative Remedies. No remedy under this Guaranty,
under the Loan Agreement, or any other Loan Document is intended to be
exclusive of any other remedy, but each and every remedy shall be cumulative
and in addition to any and every other remedy given under this Guaranty, under
the Loan Agreement, or any other Loan Document, and those provided by law. No
delay or omission by Guarantied Party to exercise any right under this Guaranty
shall impair any such right nor be construed to be a waiver thereof. No
failure on the part of Guarantied Party to exercise, and no delay in
exercising, any right under this Guaranty shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Guaranty
preclude any other or further exercise thereof or the exercise of any other
right.
16. Severability of Provisions. Any provision of this
Guaranty which is prohibited or unenforceable under applicable law shall be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
17. Entire Agreement; Amendments. This Guaranty
constitutes the entire agreement between Guarantor and Guarantied Party
pertaining to the subject matter contained herein. This Guaranty may not be
altered, amended, or modified, nor may any provision hereof be waived or
noncompliance therewith consented to, except by means of a writing executed by
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both Guarantor and Guarantied Party. Any such alteration, amendment,
modification, waiver, or consent shall be effective only to the extent
specified therein and for the specific purpose for which given. No course of
dealing and no delay or waiver of any right or default under this Guaranty
shall be deemed a waiver of any other, similar or dissimilar, right or default
or otherwise prejudice the rights and remedies hereunder.
18. Successors and Assigns. This Guaranty shall be
binding upon Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of Guarantied Party permitted under the
Loan Agreement and the Other Loan Documents; provided, however, Guarantor shall
not assign this Guaranty or delegate any of its duties hereunder without
Guarantied Party's prior written consent and any unconsented to assignment
shall be absolutely void. In the event of any assignment or other transfer of
rights by Guarantied Party in accordance with the Loan Agreement, the rights
and benefits herein conferred upon Guarantied Party shall automatically extend
to and be vested in such assignee or other transferee.
19. No Third Party Beneficiary. This Guaranty is solely
for the benefit of Guarantied Party and its successors and permitted assigns
and may not be relied on by any other Person.
20. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
THE VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION,
INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE PARTIES HERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED
UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS GUARANTY SHALL BE TRIED AND LITIGATED ONLY IN
THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT FOOTHILL'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE FOOTHILL ELECTS TO BRING SUCH ACTION OR WHERE
SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH OF GUARANTOR AND
GUARANTIED PARTY WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO
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VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
20.
GUARANTOR AND GUARANTIED PARTY HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. GUARANTOR AND GUARANTIED PARTY REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
21. Certain Covenants Applicable to Guarantor.
(a) Guarantor shall not pay dividends or
make distributions with respect to its Stock, or repurchase or redeem shares of
its Stock, except that, so long as no Default or Event of Default exists and is
continuing at the time of such payment or would result therefrom, dividends or
other distributions may be made by Guarantor to redeem shares of Stock of
Guarantor held by its officers, directors, or employees or its former officers,
directors, or employees (or their estates or beneficiaries under their estates)
that were issued pursuant to any stock option plan, restricted stock plan, or
similar arrangement, upon the death, disability, retirement, termination of
employment, or pursuant to the terms under which such shares of Stock were
issued; provided, that the aggregate consideration paid for such redemption
does not exceed $2,000,000 in any fiscal year.
(b) Guarantor shall not pay management
or other fees to any Affiliate of Apollo (other than customary director's fees
paid to directors generally).
(c) Except as otherwise provided below,
(i) if, after the Closing Date, Guarantor acquires any real or personal
property or assets, Guarantor shall grant to Guarantied Party first priority
(except for Permitted Liens) security interests in any or all of such real or
personal property or assets, and (ii) if, after the Closing Date, Guarantor
forms or acquires any additional Subsidiary, Guarantor shall (A) grant or cause
to be granted to Guarantied Party a first priority security interest in all
Stock of such Subsidiary owned by Guarantor or any Subsidiary of Guarantor, (B)
cause such Subsidiary, if it is a Restricted Subsidiary, to guarantee payment
and performance of the Obligations pursuant to a written guaranty similar in
form and substance to the Guaranty (including similar representations,
warranties, and covenants, except
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for any provisions that are unique to Guarantor and therefore inapplicable to
such Restricted Subsidiary), and (C) cause such Subsidiary, if it is a
Restricted Subsidiary, to grant to Guarantied Party first priority (except for
Permitted Liens) security interests in any or all of the real or personal
property or assets of such Subsidiary pursuant to a written security agreement
similar in form and substance to the Guarantor Security Agreement (including
similar representations, warranties, and covenants, except for any provisions
that are unique to Guarantor and therefore inapplicable to such Restricted
Subsidiary).
(d) From and after the Closing Date, up
to but not more than $10,000,000 in the aggregate at any one time of assets of
Guarantor and the Restricted Subsidiaries may be transferred to, contributed
to, or invested in Unrestricted Subsidiaries.
(e) Guarantor shall not transfer, sell,
or otherwise dispose of any real property or interest in real property that is
subject to any mortgage or deed of trust in favor of Foothill without the prior
written consent of Foothill to any such transfer, sale, or disposition.
(f) Guarantor shall not cause, suffer,
or permit any now existing or hereafter created or acquired Unrestricted
Subsidiary to own, operate or manage any Chi-Chi's restaurant or any El Torito
restaurant.
22. Effectiveness. This Guaranty shall be binding and
deemed effective upon the later of (a) the execution of this Guaranty by
Guarantor and (b) the Closing Date.
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IN WITNESS WHEREOF, the undersigned has executed and delivered
this Guaranty as of the date first written above.
FAMILY RESTAURANTS, INC.,
a Delaware corporation
By _____________________________
Title: _________________________
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