Exhibit 10.10
EXCHANGE AGREEMENT
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This EXCHANGE AGREEMENT, dated as of November 20, 1995 (the
"Agreement"), is entered into by and between Foodmaker, Inc., a Delaware
corporation ("Foodmaker") and Apollo FRI Partners, L.P. ("Apollo").
WHEREAS, concurrently herewith Apollo (or one of its Affiliates) is
entering into a Participation Purchase Agreement, dated the date hereof, by
and among Apollo, Credit Lyonnais New York Branch, as Overline Agent, Credit
Lyonnais New York Branch and certain other Banks (the "Participation
Agreement") and has obtained the Letter of Credit referred to in Section 2 of
the Participation Agreement.
WHEREAS, Foodmaker is the registered holder of 389,634,375 shares (the
"Exchanged Shares") of common stock, par value $.01 per share (the "Common
Stock") of Family Restaurants, Inc. (the "Company"), and a warrant (the
"Warrant" and, together with the Exchanged Shares, the "Exchanged
Securities") to purchase 111,111 share of Common Stock; and
WHEREAS, Apollo desires to acquire from Foodmaker, and Foodmaker desires
to transfer to Apollo, the Exchanges Securities in exchange (the "Exchange")
for the Mutual Release of Claims, a copy of which is attached hereto as
Exhibit A (the "Mutual Release"), on the terms and conditions set forth
herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Exchange; Closing. Subject to the terms and conditions hereof,
Apollo and Foodmaker agree to the Exchange and Foodmaker shall deliver the
Exchange Securities and an executed copy of the Mutual Release to Apollo, and
Apollo shall deliver an executed copy of the Mutual Release to Foodmaker, in
each case at the Closing (the "Closing"). At the Closing, Foodmaker shall
deliver to Apollo the certificates representing the Exchange Securities, duly
endorsed for transfer to Apollo.
The Closing shall take place at the office of Morgan, Lewis &
Bockius LLP, 801 South Grand Avenue, Los Angeles, California 90017, at 9:00
a.m., Los Angeles time on the date (the "Closing Date") on which the last of
the conditions contained in Section 6 hereof are fulfilled or waived, or such
other business day and time as may be agreed upon by the parties hereto.
2. Covenants of Apollo. Apollo covenants and agrees that:
(a) Standstill. Prior to the earlier of (i) the Closing and
(ii) the termination of this Agreement pursuant to Section 7(i) hereof,
Apollo will not bring any Claim (as such term is defined in the Mutual
Release) to be released and discharged pursuant to Section 1 of the Mutual
Release.
(b) Shareholders Agreement. Upon execution of this Agreement,
the Shareholders Agreement, dated as of January 27, 1994, by and among the
Company, Apollo, GEI and Foodmaker (the "Shareholders Agreement") shall
hereby be terminated and all of Foodmaker's rights and obligations thereunder
shall be of no force or effect; provided, however, that Section 3.5 thereof
shall remain in effect as to Shareholders (as defined therein) other than
Foodmaker.
(c) Board of Directors and Shareholders' Agreement. If for any
reason this agreement is terminated, Apollo agrees (i) to use is best efforts
to re-appoint Jack W. Goodall, Jr., Charles W. Duddles and Edward Gibbons to
the Board of Directors of the Company and each other position they held with
the Company and each of its subsidiaries as of the date hereof and (ii) that
the Shareholders' Agreement shall be reinstated in full force and effect as
though the termination thereof referred to in Section 3(b) above had not
occurred.
3. Covenants of Foodmaker. Foodmaker covenants and agrees that:
(a) Standstill. Prior to the earlier of (i) the Closing and
(ii) the termination of this Agreement pursuant to Section 7(i) hereof,
Foodmaker will not bring any Claim (as such term is defined in the Mutual
Release) to be released and discharged pursuant to Section 2 of the Mutual
Release.
(b) Shareholders Agreement. Upon execution of this Agreement,
the Shareholders Agreement shall hereby be terminated and all of Foodmaker's
rights and obligations thereunder shall be of no force or effect; provided,
however, that Section 3.5 thereof shall remain in effect as to Shareholders
(as defined therein) other than Foodmaker.
(c) Board of Resignations and Distribution Agreement. Upon
execution of this Agreement (i) Foodmaker shall cause each of Jack W.
Goodall, Jr., Charles W. Duddles and Edward Gibbons to resign from the Board
of Directors of the Company and from each other position they hold with the
Company and each of its subsidiaries, and (ii) Foodmaker shall enter into
Amendment No. 2 to the Distribution Agreement by and between Foodmaker and
Chi-Chi's, Inc., a copy of which is attached hereto as Exhibit C.
(d) Participation Agreement and Letter of Credit. If for any
reason the Closing does not occur or this Agreement is terminated, Foodmaker
agrees to (A) enter into the Participation Agreement and assume 40% of
Apollo's Participation (as defined in the Participation Agreement) thereunder
and (B) obtain a Letter of Credit pursuant to Section 2(c) of the
Participation Agreement. Foodmaker agrees that, in such case, its Percentage
Interest (as defined in the Participation Agreement) of the Purchase Price
(as defined in the Participation Agreement) under the Participation Agreement
shall be 40%.
4. Representations and Warranties of Foodmaker. Foodmaker hereby
represents and warrants to Apollo that on each of the date hereof and on the
Closing Date:
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(a) Authorization. Foodmaker has full power and authority to
execute and deliver this Agreement, perform its obligations hereunder and
consummate the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Foodmaker and, assuming this Agreement
constitutes a valid and binding agreement of Apollo, this Agreement
constitutes a valid and binding agreement of Foodmaker, enforceable against
it in accordance with its terms.
(b) No Violation. Neither the execution or delivery of this
Agreement by Foodmaker, the performance by Foodmaker of its obligations
hereunder nor the consummation by Foodmaker of the transactions contemplated
hereby will (i) contravene any material law, statute, rule, regulation,
order, writ, injunction, judgment or decree of any governmental authority
("Applicable Law"), (ii) violate, result in a breach of, or constitute (with
due notice or lapse of time or both) a default under, any loan agreement,
mortgage, security agreement, trust indenture or other material agreement or
instrument to which Foodmaker or any of its subsidiaries is a party or by
which any of them is bound or to which any of their respective properties or
assets is subject, (iii) result in the creation of imposition of any lien
upon any of their respective properties or assets, except for any such
defaults or liens that could not, individually or in the aggregate,
materially impair Foodmaker's ability to consummate the transactions
contemplated hereby, or (iv) violate any provision of the charter or by-laws
of Foodmaker or any of its subsidiaries.
(c) Consents. No consent, authorization or order of, or filing
or registration with, any governmental authority or other person is required
to be obtained or made by Foodmaker for the execution or delivery of this
Agreement, the performance by Foodmaker of its obligations hereunder or the
consummation of any of the transactions contemplated hereby, except (i) for
those consents or authorizations that will have been obtained or made on or
prior to the completion of the Exchange or (ii) where the failure to obtain
such consents, authorizations or orders, or make such filings or
registrations, could not, individually or in the aggregate, materially impair
Foodmaker's ability to consummate the transactions contemplated hereby.
(d) Title. Foodmaker is the beneficial and record owner of the
Exchange Securities, and owns the Exchange Securities free and clear of (i)
all claims, liens, title defects and objections or equities of any kind and
nature whatsoever and (ii) all restrictions on voting and transfer other than
restrictions on transfer imposed by Federal and state securities laws.
(e) Investment Representations. Foodmaker exercises full
investment discretion with respect to the Exchanged Securities and has
neither purchased nor sold for its account any Common Stock or Warrants since
the original issuance thereof.
5. Representations and Warranties of Apollo. Apollo hereby
represents and warrants to Foodmaker that on each of the date hereof and on
the Closing Date;
(a) Authorization. Apollo has full power and authority to
execute and deliver this Agreement, perform its obligations hereunder and
consummate the
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transactions contemplated hereby. This Agreement has been duly executed and
delivered by Apollo and, assuming this Agreement constitutes the valid and
binding agreement of Foodmaker, this Agreement constitutes a valid and
binding agreement of Apollo, enforceable against it in accordance with its
terms.
(b) No Violation. Neither the execution or delivery of this
Agreement by Apollo, the performance by Apollo of its obligations hereunder
nor the consummation by Apollo of the transactions contemplated hereby will
(i) contravene any Applicable Law, (ii) violate, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under, any
loan agreement, mortgage, security agreement, trust indenture or other
material agreement or instrument to which Apollo or any of its subsidiaries
is a party or by which any of them is bound or to which any of their
respective properties or assets is subject, (iii) result in the creation or
imposition of any lien upon any of their respective properties or assets,
except for any such defaults or liens that could not, individually or in the
aggregate, materially impair Apollo's ability to consummate the transactions
contemplated hereby, or (iv) violate any provision of the charter or by-laws
of Apollo or any of its subsidiaries.
(c) Consents. No consent, authorization or order of, or filing
or registration with, any governmental authority or other person is required
to be obtained or made by Apollo for the execution or delivery of this
Agreement, the performance by Apollo to its obligations hereunder or the
consummation of any of the transactions contemplated hereby, except (i) for
those consents or authorizations that will have been obtained or made on or
prior to the completion of the Exchange (ii) where the failure to obtain
such consents, authorizations or orders, or make such filings or
registrations, could not, individually or in the aggregate, materially impair
Apollo's ability to consummate the transactions contemplated hereby (iii)
consents, authorizations, filings, and registrations, and expiration or
termination of the waiting periods, under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the Rules and Regulations
thereunder (the "HSR Act").
6. Conditions of Obligations. The obligation of (i) each of Apollo
and Foodmaker to execute and deliver the Mutual Release and (ii) Foodmaker to
deliver the Exchange Securities is subject to the fulfillment prior to or
concurrently with the Closing of the following condition:
HSR Act. With respect to the transaction contemplated hereby all
applicable waiting periods under the HSR Act shall have expired or been
terminated.
7. Miscellaneous.
(a) Amendment. Neither this Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally or by course
of dealing, but only by a statement in writing signed by the party against
which enforcement of the change, waiver, discharge or termination is sought.
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(b) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, next-
day air courier, or telecopier as follows:
If to Foodmaker:
Foodmaker, Inc.
9330 Balboa Avenue
San Diego, California 92123
Attention: Jack W. Goodall, Jr.
Telecopier: 619-571-2110
with a copy to:
Gibson, Dunn & Crutcher
750 "B" Street, Suite 3300
San Diego, CA 92101
Attention: Rhonda Wagner, Esq.
Telecopier: 619-544-8190
If to Apollo:
Apollo Advisors, L.P.
1999 Avenue of the Stars
Suite 1900
Los Angeles, California 90067
Attention: Mr. David Kaplan
Telecopier: 310-201-4198
with a copy to:
Morgan, Lewis & Bockius LLP
801 South Grand Avenue
Los Angeles, California 90017-4615
Attention: John F. Hartigan, Esq.
Telecopier: 213-612-2554
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; one (1) business day after
being timely dispatched postage prepaid, if by same-day or next-day courier;
and when receipt acknowledged, if sent by facsimile transmission. Any of the
above addresses may be changed by notice made in accordance with this Section
7(c).
(c) Assignment; No Third-Party Beneficiaries. Neither this
Agreement nor the rights and obligations of either party hereunder may be
assigned by operation of law or otherwise without the express consent of the
other party hereto (which
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consent may be granted or withheld in their sole discretion). This Agreement
will be binding upon and inure solely for the benefit of the parties hereto
and their respective permitted successors and assigns, and no other person
shall acquire or have any right hereunder or by virtue hereof.
(d) Headings. The headings of the sections and paragraphs of
this Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.
(e) Choice of Law. It is the intention of the parties that the
internal laws, and not the laws of conflicts, of the State of New York should
govern the enforceability and validity of this Agreement, the construction of
its terms and the interpretation of the rights and duties of the parties
hereto.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts,
with the same effect as if all parties had signed the same document. All
such counterparts shall be deemed an original, shall be construed together
and shall constitute one and the same instrument.
(g) Specific Performance. Each party hereto agrees that
irreparable harm, for which there may be no adequate remedy at law and for
which the ascertainment of damages would be difficult, would occur in the
event any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. Each party
hereto accordingly agrees that the other party hereto shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of this
Agreement, or any agreement contemplated hereunder and to enforce
specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, in each instance without
being required to post bond or other security and in addition to, and without
having to prove the adequacy of, other remedies at law.
(h) Further Assurances. Each party hereto agrees to use its
best efforts to obtain all consents and approvals, and to do all other
things, necessary for the transactions contemplated by this Agreement.
(i) Termination. This Agreement shall terminate and be of no
force or effect in the event that the Closing does not occur prior to January
26, 1996; provided, however, that, notwithstanding the foregoing, the
covenant of Apollo set forth in Section 2(c) and the covenant of Foodmaker
set forth in Section 3(d) shall remain in full force and effect.
Signatures follow
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed on their respective behalf by
their respective officers thereunto duly authorized, as of the day and year
first above written.
APOLLO FRI PARTNERS, L.P.
By: AIF II, L.P.,
its general partner
By: Apollo Advisors, L.P.,
its managing partner
By: Apollo Capital Management, Inc.,
its general partner
By: DAVID B. KAPLAN
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Name:
Title:
FOODMAKER, INC.
a Delaware corporation
By: CHARLES DUDDLES
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Name: Charles Duddles
Title: Executive Vice President
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Schedules (and similar attachments) omitted:
Exhibit A - Mutual Release
Exhibit C - Amendment No. 2 to the Distribution Agreement by and
between Foodmaker and Chi-Chi's, Inc.
Foodmaker agrees to furnish supplementally a copy of any omitted
schedule to the Commission upon request.