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EXHIBIT 10.2
Dated the 21st day of August 2000
COLLINS FOODS GROUP PTY LTD
ACN 009 937 900
AND THE OTHER COMPANIES LISTED IN SCHEDULE A
In Account with
WESTPAC BANKING CORPORATION
A.R.B.N. 007 457 141
UNLIMITED CROSS GUARANTEE AND
INDEMNITY AND NEGATIVE PLEDGE WITH
FINANCIAL RATIO COVENANTS
BY THE GUARANTORS LISTED IN SCHEDULE A
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TABLE OF CONTENTS
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UNLIMITED CROSS GUARANTEE AND INDEMNITY AND NEGATIVE PLEDGE WITH FINANCIAL RATIO
COVENANTS............................................................................. 1
DEFINITIONS AND INTERPRETATION............................................................... 2
1. DEFINITIONS........................................................................... 2
CONDITIONS OF GUARANTEE AND INDEMNITY........................................................ 7
2. GUARANTEE............................................................................. 7
3. EXTENT OF GUARANTEE................................................................... 7
4. CONTINUING GUARANTEE.................................................................. 7
5. INSOLVENCY............................................................................ 7
6. VARIATION OF ARRANGEMENTS WITH CUSTOMER............................................... 8
7. UNCONDITIONAL OBLIGATION.............................................................. 8
8. REFUND OF PAYMENTS.................................................................... 8
9. INDEMNITY............................................................................. 9
10. OTHER SECURITY........................................................................ 9
NEGATIVE PLEDGE AND FINANCIAL RATIO COVENANTS................................................ 10
11. REPRESENTATIONS AND WARRANTIES........................................................ 10
12. UNDERTAKINGS.......................................................................... 11
12.1 Information.................................................................... 11
12.2 Negative Pledges............................................................... 12
12.3 Financial Covenants............................................................ 13
12.4 General Undertakings........................................................... 15
12.5 Undertakings by Guarantors..................................................... 16
13. EVENTS OF DEFAULT..................................................................... 16
14. WESTPAC'S REMEDIES AND POWERS......................................................... 18
14.1 Event of Default............................................................... 18
14.2 No waiver...................................................................... 19
GENERAL PROVISIONS........................................................................... 20
15. PAYMENTS.............................................................................. 20
15.1 Payments....................................................................... 20
15.2 Time of payment................................................................ 20
15.3 Interest....................................................................... 20
16. YIELD PROTECTION...................................................................... 21
17. ADDITIONAL PAYMENTS................................................................... 21
17.1 Indemnity and costs............................................................ 21
17.2 Currency Indemnity............................................................. 21
17.3 Expenses....................................................................... 21
17.4 Goods and Services Tax......................................................... 22
18. GENERAL............................................................................... 22
18.1 Term........................................................................... 22
18.2 Statements..................................................................... 22
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<TABLE>
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18.3 Notices........................................................................ 22
18.4 Agent for Service of Process................................................... 23
19. APPROPRIATION AND SET-OFF............................................................. 23
19.1 Appropriation.................................................................. 23
19.2 Set-Off........................................................................ 23
20. ASSIGNMENT AND TRANSFER............................................................... 23
21. RELIANCE.............................................................................. 23
22. MULTIPLE PARTIES...................................................................... 24
22.1 Multiple Guarantors............................................................ 24
22.2 Multiple Customers............................................................. 24
23. NEW GUARANTORS........................................................................ 24
24. LAW AND JURISDICTION.................................................................. 24
25. COUNTERPARTS.......................................................................... 24
26. ATTORNEYS............................................................................. 25
27. INCONSISTENCY......................................................................... 25
28. RELEASE OF GUARANTORS................................................................. 25
SCHEDULE A -- GUARANTORS..................................................................... 27
EXECUTION.................................................................................... I
TABLE OF CONTENTS............................................................................ VIII
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UNLIMITED CROSS GUARANTEE AND
INDEMNITY AND NEGATIVE PLEDGE WITH
FINANCIAL RATIO COVENANTS
THE GUARANTEES, INDEMNITIES, NEGATIVE PLEDGES AND FINANCIAL RATIO COVENANTS IN
THIS AGREEMENT ARE GIVEN
BY EACH OF THE COMPANIES LISTED IN SCHEDULE A (each, a "GUARANTOR")
TO WESTPAC BANKING CORPORATION (ARBN 007 457 141) ("WESTPAC") of 15th
Floor, 260 Queen Street, Brisbane, Queensland
FOR the liabilities and obligations to Westpac of EACH OTHER OF THE
COMPANIES LISTED IN SCHEDULE A (each, a "CUSTOMER") on the conditions
set out in this Agreement
IN EXCHANGE FOR Westpac providing or continuing credit to one or more (whether
jointly or severally) of the Customers, or not taking immediate action to
enforce those Customers' obligations to Westpac.
THE LIABILITIES AND OBLIGATIONS WHICH THE GUARANTORS GUARANTEE TO WESTPAC ARE:
All liabilities and obligations of the Customer to Westpac of any kind and for
any reason, now or in the future, whether or not currently contemplated,
including where Westpac obtains rights because of an assignment or transfer
(as amended, the "GUARANTEED OBLIGATIONS") and all money which the Customer may
owe to Westpac, now or in the future, for any reason under or in relation to the
Guaranteed Obligations, whether the money is or becomes owed:
(a) by the Customer alone, or together with one or together with one or more
others, or
(b) actually or contingently,
(including amounts referred to in Clause 1) (the "GUARANTEED MONEY").
Each Guarantor's liability as guarantor under this Agreement is unlimited.
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DEFINITIONS AND INTERPRETATION
1. DEFINITIONS
In this Agreement:
"ADMINISTRATION" includes bankruptcy, administration arising out of mental
illness or incapacity, administration of an insolvent estate, administration of
a corporation, arrangement, receivership or winding up, dissolution or anything
similar.
"ACCOUNTS" means profit and loss accounts, balance sheets, cash flow statements
and statements, reports (including auditor's reports and director's reports) and
notes attached to, or intended to be read with, any of them.
"AGREEMENT" includes any document or instrument of any kind, any deed, agreement
or arrangement.
"ANYONE" includes without limitation anyone who signs this Agreement, the
Customer or anyone else who gives a Security.
"AUTHORISATION" includes any consent, registration, filing, lodgment, agreement,
certificate, notarisation, permission, licence, approval, authority or
exemption, from by or with any Governmental Agency. Where a Governmental Agency
can prohibit or restrict something if it acts within a specified period after
formal notification of it (for example lodgment, registration or filing),
Authorisation includes the expiry of that period without that action.
"BANK DOCUMENT" means this Agreement, any agreement the performance of which is
secured or guaranteed by this Agreement, any agreement that documents the terms
of any Finance Debt between Westpac and any one or more Guarantors, any
Security, or any agreement or document issued under or entered into in
connection with any of them including without limitation any subordination
agreement. It includes any amendment or replacement of any of them.
"BILL FACILITY" means the bill acceptance and discount facility described in the
Bill Facility Agreement.
"BILL FACILITY AGREEMENT" means the Agreement between Collins Restaurants
Management Pty Ltd ACN 093 912 979 and Westpac dated on or about the date of
this Agreement.
"CFI" means Collins Foods International Pty Ltd A.R.B.N. 009 980 250.
"CFI GROUP" means CFI and its Subsidiaries.
"CFG" means Collins Foods Group Pty Ltd ACN 009 937 900.
"CFG GROUP" means CFG and its Subsidiaries.
"EBITDA" means, for a period, the aggregate of:
(a) Operating Cash Flow for the period; and
(b) Interest Expense for the period (excluding Interest Expense relating to
Subordinated Debt);
"COMMITMENT" has the same meaning as in the Bill Facility Agreement.
"EVENT OF DEFAULT " has the meaning given in clause 13 below.
"FINANCE DEBT" includes any indebtedness, present or future, actual or
contingent in relation to money borrowed or raised or any other financing. It
includes any such
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indebtedness under or in respect of any of the following: a Guarantee, a
discounting arrangement, a Finance Lease, deferred purchase price (for more than
90 days), or an obligation to deliver property or provide services paid for in
advance by a financier. It also includes exposure under any interest, commodity,
securities, index, or currency exchange, option, hedge, swap or other similar
arrangement.
"FINANCE LEASE" means a Lease which under Australian Accounting Standard 17 is
(or would if that Standard was applied to the relevant company or the Lease was
regarded as a "lease" for the purposes of that Standard be) regarded as a
finance lease or which under any other applicable Accounting Standard would be
regarded as a finance lease.
"FRANCHISOR" means a franchisor under any franchise agreement to which a
Relevant Company is a party.
"FREE CASH FLOW" means, for any period:
(a) EBITDA for the period; less
(b) capital expenditure for the period which is not to exceed the amount
specified in clause 12.3(v);
for CFG Group, and for any period before the Restructure is complete, the Group.
"GOVERNMENTAL AGENCY" means any government or any governmental,
semi-governmental, statutory, judicial entity or authority. It includes any
self-regulatory organisation established under statute and any stock or futures
exchange.
"GROUP" means the CFI Group and the SIM Group .
"GUARANTEE" means any guarantee, indemnity, letter of comfort or other assurance
against loss. It includes any obligation to be responsible for the solvency or
financial condition of another party, or for payment of a debt or obligation of
another party, either directly or indirectly (for example, by acquiring the debt
or obligation). "GUARANTEED" has a corresponding meaning.
"GUARANTEED MONEY" includes at any time:
(a) money which the Customer would have owed Westpac under or in relation to
the Guaranteed Obligations but for some reason as described in Clause 9;
(b) money which the Customer is or may become liable to pay to Westpac as
surety for the liabilities of another person;
(c) money owed because of an assignment to Westpac;
(d) money which will become payable to Westpac by the Customer only if
particular circumstances occur, even though the Customer may not at a
particular time be under an existing obligation to pay that money (for
example damages or compensation).
"GUARANTEED OBLIGATIONS" includes at any time obligations and liabilities which
the Customer would have owed Westpac but for some reason as described in Clause
9.
"GUARANTOR" means any party which gives any Guarantee or Security Interest in
relation to the obligations of a Customer to Westpac now or in the future.
"INTEREST EXPENSE" means all gross interest expenses and all other outgoings in
the nature of interest (including, without limitation, Finance Lease charges)
incurred by CFG Group and for any period before the Restructure is complete, the
Group in respect of Total Group Debt as disclosed by the Latest Financial
Information.
"LATEST FINANCIAL INFORMATION" means the most recent consolidated or aggregated
(as the case may be) financial information (after making such adjustments as in
the opinion of CFG's auditor are necessary for the proper determination of the
financial condition of
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CFG Group or for any period before the Restructure is complete, the Group) as at
or prior to the date at which an examination is being made to determine Total
Liabilities or Total Tangible Assets for the purposes of this Agreement.
"LEASE" means:
(a) any lease, charter, hire purchase or hiring arrangement of any property;
(b) any other agreement under which any property is or may be used or
operated by a person other than the owner; or
(c) any agreement or arrangement under which any property is or may be
managed or operated for or on behalf of the owner or another person by a
person other than the owner, and the operator or manager or its related
body corporate (as defined in the Corporations Law) (whether in the same
or another agreement or arrangement) is required to make or assure
minimum, fixed and/or floating rate payments of a periodic nature;
but does not include an Operating Lease.
"LEASE RENTAL OBLIGATIONS" means, for a period, the aggregate amount of all
payments required to be made during the period pursuant to an Operating Lease.
"MATERIAL ADVERSE EFFECT" means, in the reasonable opinion of Westpac, a
material adverse effect on:
(a) the business, assets, operations, material contracts (taken as a whole)
or condition, financial or otherwise of a Guarantor;
(b) the ability of a Guarantor to perform any of its obligations under a
Bank Document;
(c) the rights or benefits available to Westpac under the Bill Facility
Agreement; or
(d) the effectiveness of, or the validity or enforceability of any Bank
Document.
"OPERATING CASH FLOW" means, for any period, the aggregate of:
(a) operating profit (or loss) for the period before income tax excluding
abnormal items; and
(b) amortisation and depreciation for the period as determined in accordance
with generally accepted accounting principles;
of CFG Group and, for any period before the Restructure is complete, the Group.
"OPERATING LEASE" means a Lease which under the Australian Accounting Standard
17 is (or would if that Standard was applied to the relevant Company or the
Lease was regarded as a "lease" for the purposes of that Standard) regarded as
an operating lease or which under any other applicable Accounting Standard would
be regarded as an operating lease.
"POTENTIAL EVENT OF DEFAULT" means any event, thing or circumstance which with
the giving of notice or passage of time or both would become an Event of
Default. It includes any breach of a Bank Document.
"REFERENCE LENDING RATE" means the rate Westpac regularly publishes in major
metropolitan newspapers as its "Reference Lending Rate" or such other rate as
may supercede its Reference Lending Rate.
"RELEVANT COMPANY" means any Guarantor or Customer or any Subsidiary of any of
them.
"RESTRUCTURE" means the restructure of the Group as described to Westpac before
the date of this Agreement. For the purpose of this Agreement and the Bill
Facility Agreement, the Restructure is complete when:
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(a) Collins Foods Group Pty Ltd ACN 009 937 900 holds all of the issued
shares in:
- Sizzler Asia Holdings, Inc;
- Collins Restaurants Queensland Pty Ltd;
- Collins Restaurants Management Pty Ltd; and
- Sizzler Restaurants Group Pty Ltd;
(b) Sizzler Asia Holdings, Inc holds all of the issues shares in:
- Sizzler Restaurant Services, Inc.;
- Sizzler South East Asia, Inc.;
- Sizzler New Zealand Limited; and
and not less than 50% of the issued shares in Sizzler Steak Seafood
Salad (S) Pte Ltd;
(c) all of the issued shares in Collins Foods Group Pty Ltd ACN 009 937 900
are held by Restaurants Concepts International, Inc.
"SECURITY" is any Security Interest, claim or other right held by Westpac from
or against the Customer or anyone else in relation to the Guaranteed Obligations
or the Guaranteed Money, now or in the future. It includes the rights against
any Guarantor under this Agreement.
"SECURITY INTEREST" includes any mortgage, pledge, lien, charge or other
security or any arrangement which gives a creditor a preferential right to an
asset or its proceeds.
"SENIOR INTEREST" means, for a period, the Interest Expense incurred during the
period in respect of the Total Senior Debt.
"SIM" means Sizzler International Marks Inc.
"SIM GROUP" means SIM and its subsidiaries.
"SUBORDINATED DEBT" means all Finance Debt (other than Finance Debt payable to
Westpac) which has been subordinated on terms acceptable to Westpac.
"SUBSIDIARY" of a corporation is an entity whose accounts are included in that
corporation's consolidated accounts.
TANGIBLE ASSETS means all assets other than future tax benefits, goodwill,
patents, trademarks, trade names, design rights, franchises, underwriting and
formation expenses and other items of a like nature which according to current
accounting practice are regarded as intangible assets.
TOTAL GROUP DEBT means at any time the aggregate amount (as disclosed by the
Latest Financial Information) of all outstanding Finance Debt of CFG Group and
for any period before the Restructure is complete, the Group other than trade
creditors, TNA's (Transaction Negotiation Authorities), Cheque Cashing
Authorities and Finance Debt owing to Sizzler International, Inc. or any of its
subsidiaries which is subordinated to monies owing to Westpac.
TOTAL LIABILITIES means at any time the aggregate amount (as disclosed by the
Latest Financial Information) of all secured and unsecured liabilities of CFG
Group and for any period before the Restructure is complete, the Group other
than deferred income tax liabilities.
"TOTAL SENIOR DEBT" means all Finance Debt which is not Subordinated Debt.
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TOTAL TANGIBLE ASSETS means at any time the aggregate of the book values of all
Tangible Assets of CFG Group and for any period before the Restructure is
complete, the Group as disclosed by the Latest Financial Information.
"VERIFICATION CERTIFICATE" means a certificate described in any Bank Document
and given by a director or secretary of any Guarantor confirming the matters
described therein.
Where an EXAMPLE is given, it does not limit what else might be included.
Unless otherwise stated all references to MONEY are references to Australian
dollars.
References to ANY DOCUMENT include references to the document as varied,
supplemented or novated.
References to any GENDER include all genders.
References to PERSONS include references to any entity including without
limitation any individual or body corporate.
References to the PLURAL include the SINGULAR and vice versa.
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CONDITIONS OF GUARANTEE AND INDEMNITY
2. GUARANTEE
The Guarantor guarantees to Westpac that the Customer will:
(a) pay to Westpac on time all the Guaranteed Money, and
(b) perform the Guaranteed Obligations.
If the Customer does not pay an amount of the Guaranteed Money when it is due,
Westpac may demand that the Guarantor pay that amount. The Guarantor must then
immediately pay that amount to Westpac. Westpac can make any number of demands
and demand can be made:
(c) for all or part of the Guaranteed Money; and
(d) even if Westpac does not take action to recover the Guaranteed Money
from the Customer.
3. EXTENT OF GUARANTEE
This Agreement is a guarantee for the full amount of the Guaranteed Money and is
a principal obligation and shall not be treated as ancillary or collateral to
any other right or obligation.
4. CONTINUING GUARANTEE
The Guarantor's obligations under this Agreement are continuing. Even though
Westpac receives payments from or makes arrangements with the Customer or anyone
else, the Guarantor is still liable for the Guaranteed Money and the Guaranteed
Obligations now and in the future.
The guarantee hereunder is a guarantee of payment, and not merely of
collectability, and may be enforced against any Guarantor without first
proceeding against the Customer or any collateral for or other guarantees of the
Guaranteed Obligations.
5. INSOLVENCY
If:
(a) the Customer or anyone goes into Administration, and
(b) in the Administration, Westpac makes a claim which in any way relates to
any of the Guaranteed Money or other money owed to Westpac by the
Customer,
then if Westpac receives money as a result of making such a claim or for any
other reason, it may set that money aside.
Westpac need not use the money set aside to pay the Guaranteed Money until it
has received enough in respect of the Guaranteed Money (including the amount set
aside) to pay all of the Guaranteed Money. Until that happens, the Guarantor is
fully liable for the Guaranteed Money, as if Westpac had not received the money
set aside.
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Until the Guaranteed Money has been irrevocably paid and discharged in full, the
Guarantor shall not be entitled either directly or indirectly to prove in any
Administration of the Customer or claim or receive any benefit of any such
Administration.
6. VARIATION OF ARRANGEMENTS WITH CUSTOMER
This Agreement applies automatically to all dealings between Westpac and the
Customer, whether or not those dealings increase the Guarantor's liability and
whether or not Westpac notifies, or obtains the consent of, the Guarantor
including:
(a) a change in the Guaranteed Obligations or Guaranteed Moneys, or
(b) new or replacement obligations.
7. UNCONDITIONAL OBLIGATION
The Guarantor's liability under this Agreement is unconditional. It is not
affected by anything which might release the Guarantor from or limit all or part
of its obligations, including if:
(a) Westpac does not exercise any of its Security or rights against the
Customer or anyone,
(b) Westpac makes any arrangement, transaction or compromise with the
Customer or anyone, including one which varies, takes away or limits its
Security or rights or its freedom to exercise them,
(c) Westpac gives the Customer or anyone a full or partial discharge or
release or time to pay or any other concession,
(d) this or any document or Security is temporarily or permanently
unenforceable, is not taken by Westpac, is lost, is not signed by anyone
or is not binding on anyone intended to give a Guarantee or Security,
(e) there is a change in the nature or constitution of the Customer or
anyone including its members,
(f) that or any other Guarantor, the Customer or anyone dies, becomes
insolvent or incapacitated or goes into some form of Administration, or
(g) the Customer or anyone has any claim against Westpac.
8. REFUND OF PAYMENTS
For some reason (for example, a law about Administration or directors' duties)
Westpac may have to refund or give up any money which the Customer or anyone
else has paid to it, or which it recovers in any way. If that happens the
Guarantor owes Westpac all the money that it would have owed if the amount
refunded or given up had never been paid to or received by Westpac. The
Guarantor will do everything it can to restore to Westpac any rights against the
Guarantor or its property which Westpac had before it received the money which
it later had to refund or give up.
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9. INDEMNITY
If for any reason (for example, lack of capacity or authority, Administration,
illegality or inadequate or improper execution or stamping):
(a) Westpac has no legal right to recover an amount of the Guaranteed Money
from the Customer or enforce the Guaranteed Obligations, or
(b) the Customer is not bound by obligations that would otherwise have been
Guaranteed Obligations or owe an amount that would otherwise have been
included in the Guaranteed Money,
the amount will be taken to be part of the Guaranteed Money, and the Guarantor
will pay it to Westpac whenever Westpac demands, and the obligations will be
taken to be part of the Guaranteed Obligations. This applies even if Westpac
knew or should have known of the problem, and even if, because of the problem,
the Customer could never have been required to pay Westpac the amount. This is a
principal and independent obligation.
10. OTHER SECURITY
Any other Security held by Westpac for all or part of the Guaranteed Money or
the Guaranteed Obligations is independent of this Agreement. Nothing affecting
any Security will affect the Guarantor's liability under this Agreement. Westpac
can enforce this Agreement and any Security in any order it wishes, or can
choose not to enforce any Security at all.
Until the Guaranteed Money is paid in full, the Guarantor cannot claim the
benefit of, and has no right to, the Security held by Westpac.
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NEGATIVE PLEDGE AND FINANCIAL RATIO COVENANTS
11. REPRESENTATIONS AND WARRANTIES
Each Guarantor makes the following representations and warranties to the extent
they relate to it.
(a) (STATUS) Each Relevant Company is incorporated in the place stated by
the Guarantor to Westpac. Any Bank Document to which a Relevant Company
is expressed to be a party is its binding obligation enforceable against
it, and does not breach any document or agreement binding on it or any
other Guarantor or Relevant Company or any law or the memorandum and
articles of association or any other constituent documents of the
Relevant Company.
(b) (AUTHORITY) It has the power to enter into each Bank Document to which
it is a party and to carry out any transaction or obligation
contemplated by it. Furthermore, no further corporate action is
necessary for it to enter into the Bank Documents to which it is party
and draw under any facility provided to it under a Bank Document. Each
person held out in a Verification Certificate or other document signed
by a secretary or director as having that authority, is authorised to
sign a draw down or other notice on its behalf.
(c) (INFORMATION) All information provided by it to Westpac is or was true
when given and is not misleading by omission or otherwise in all
material respects.
(d) (DISCLOSURE) It has no material obligation other than those incurred in
the ordinary course of day to day trading (whether to pay money or
otherwise and whether or not contingent) to any person outside of the
CFG Group which it has not disclosed in writing to Westpac prior to the
date of this Agreement.
(e) (ACCOUNTS) Its holding company's most recent consolidated and
unconsolidated accounts give a true and fair view in all material
respects under generally accepted accounting principles. There has been
no material adverse change or Material Adverse Effect since the period
they cover. They disclose all material Finance Debt and material
contingent liabilities.
(f) (LITIGATION) No litigation, tax claim, dispute or other proceeding is
current or, to its knowledge, threatened, which is likely to have a
Material Adverse Effect.
(g) (NO TRUSTEE) No Relevant Company is a trustee, except for a Subsidiary
which is a trustee of its superannuation funds and except for any
implied constructive or resulting trust which arises under its ordinary
course of business.
(h) (NO DEFAULT) There is no subsisting Event of Default, or Potential Event
of Default.
(i) (OTHER SECURITY INTERESTS) The execution and performance of this
Agreement and each other Bank Document to which it is a party does not
result in a Security Interest (other than under a Bank Document) being
created on, or a charge crystallising over, its or any other Guarantor's
or Relevant Company's assets.
(j) (SOLVENCY) It is solvent and there are reasonable grounds to expect
that, on execution of each Bank Document to which it is a party, it will
continue to be able to pay all its debts as and when they become due and
payable.
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(k) (ENVIRONMENTAL LAW) No environmentally hazardous substance affects any
of its property the subject of a Security in breach of any law or the
requirements of any Governmental Agency.
Without limiting clause 12.1(a)(v)(B), the above representations and warranties
are repeated on each day on which a Customer draws down or otherwise makes use
of any facility provided by Westpac under a Bank Document.
12. UNDERTAKINGS
CFG undertakes as follows unless Westpac otherwise consents in writing.
12.1 INFORMATION
(a) (INFORMATION) It will provide the following to Westpac:
(i) Audited consolidated or aggregated (as the case may be) annual
Accounts (not later than 120 days from balance date);
(ii) Consolidated or aggregated (as the case may be) annual
projections and budgets (not later than 120 days from balance
date);
(iii) Consolidated or aggregated (as the case may be) quarterly
management Accounts (within 45 days after the end of the
quarter),
which relate to CFG Group and for any period before the Restructure is
complete, the Group,
(iv) a certificate by two of its directors (not later than 45 days
from the end of each accounting quarter and on production of the
audited consolidated and aggregated (as the case may be) annual
accounts) including the following representations/information:
(A) that nothing has occurred which constitutes an Event of
Default or Potential Event of Default;
(B) that the representations and warranties by each
Guarantor in this Agreement are true in all material
respects as though they had been made at the date of the
certificate in respect of the facts and circumstances
then subsisting;
(C) that it and each other company in the CFG Group has
complied with and continues to comply with the financial
undertakings in clauses 12.2 (Negative Pledges) and 12.3
(Financial Covenants); and
(D) the CFG Group's and for any period before the
Restructure is complete, the Group's consolidated:
(1) interest rate and foreign exchange exposures at
the time of the report and details of hedging or
other risk reduction strategies applied by
management to the exposures;
(2) balance sheet;
(3) profit and loss account;
(4) cash flow statement; and
(5) performance against budget and revised forecast
for the month, quarter, year to date and
corresponding period of the preceding year,
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In the case of audited Accounts, the certificate should have
attached a certificate by the auditor as to compliance with the
financial undertakings;
(v) details of any material property or real estate acquired or
purchased by a Relevant Company;
(vi) promptly, details of any actual or proposed sale of any asset
the proceeds of which must be dealt with under clause 1.1(b)(ii)
of the Bill Facility Agreement;
(vii) promptly, all documents issued by it to any stock exchange or
shareholders;
(viii) promptly, details of any substantial dispute between a Relevant
Company and a Governmental Agency, or a proposal by a
Governmental Agency to acquire compulsory all or a substantial
part of any Relevant Company's assets;
(ix) promptly, details of any substantial dispute between a Relevant
Company and a Franchisor;
(x) promptly, notice of any litigation to which it or a Relevant
Company is a party which may have a Material Adverse Effect;
(xi) promptly, any other information reasonably requested by Westpac;
(xii) promptly, any other information in relation to the financial
condition or business of the CFG Group or, for any period before
the Restructure is complete, the Group which Westpac may
reasonably request; and
(xiii) promptly, any correspondence between a Relevant Company and a
Government Agency which is likely to have a Material Adverse
Effect on the CFG Group's business or assets.
(b) (QUARTERLY MEETINGS) At Westpac's request, it will meet with Westpac
quarterly to review the consolidated and aggregated quarterly management
Accounts (within 14 days after receipt by Westpac of the consolidated
and aggregated quarterly management Accounts);
(c) (NOTICE OF DEFAULT) It will immediately notify Westpac as soon as it
becomes aware of any Event of Default or Potential Event of Default.
(d) (INSURANCE POLICIES) It will deliver to Westpac up-to-date copies of
insurance policy(ies) insuring all assets forming part of Westpac's
Security for full replacement value against fire and other risks duly
signed by the insurance company(ies) and having the interest of Westpac
noted as mortgagee.
12.2 NEGATIVE PLEDGES
(a) (NEGATIVE PLEDGE) It will not create or allow, nor permit any Relevant
Company to create or allow, a Security Interest over any of its assets
or enter any other transaction or arrangement which gives a creditor a
preferential right to an asset owned or used by it except a lien or
statutory charge which arises by operation of law in the ordinary course
of its day to day business and does not secure Finance Debt, but only so
long as it pays the amount secured promptly, except where that amount is
being contested in good faith;
(b) (ASSETS) It will not dispose, nor permit any Relevant Company to
dispose, of all or any part of its assets or an interest in them or
agree or attempt to do so (whether in one or more related or unrelated
transactions) except:
(i) disposals in the ordinary course of its day to day trading;
<PAGE> 16
13
(ii) disposal of an asset with a market value of less than
$100,000.00;
(iii) disposal of an asset for the purpose of a sale and leaseback;
(iv) disposal of an asset to a Group entity for the purpose of the
Restructure; or
(v) disposal of an asset where:
(A) the net sale proceeds of the asset will be paid to
Westpac pursuant to clause 1.1 (b) (ii) of the Bill
Facility Agreement; and
(B) if the asset sold has a market value of more than
$100,000.00, Westpac has consented to the disposal of
the asset or the market value of the asset and all other
assets with a market value exceeding $100,000.000
disposed of during a period does not exceed the maximum
aggregate amount approved by Westpac for the period.
Where a Subsidiary issues shares and its holding company does not
acquire all of the shares, or a rateable portion of its shares according
to its then shareholding, the holding company will be taken to have
disposed of the shares that it does not acquire.
(c) (CHANGE OF BUSINESS) It will ensure that the Relevant Companies will not
substantially change the nature of the main business or businesses
carried on by them as a whole, and that no Relevant Company will take
any action which would have that effect, whether by disposal,
acquisition or otherwise.
(d) (NEW SUBSIDIARY) It will ensure that no Relevant Company will create or
acquire a new subsidiary unless within 3 months that Subsidiary becomes
a party to a Guarantee in relation to the Bank Documents satisfactory to
Westpac, and provides evidence satisfactory to Westpac that it is bound
by the Guarantee.
(e) (ARMS LENGTH DEALINGS) It will ensure that no Relevant Company will deal
with any other party except at arms length for full commercial
consideration in the ordinary course of business.
(f) (PARTNERSHIP) It will not enter into any partnership without Westpac's
consent. For this purpose Westpac consents to the existing arrangements
with Sizzler Steak Seafood Salad Pte Ltd in Singapore.
(g) (NO OTHER LOANS) It will ensure that no Relevant Company will make or
receive:
- any Finance Debt other than Subordinated Debt; or
- any payment in connection with any Finance Debt other than
Subordinated Debt;
except as permitted by a Bank Document.
12.3 FINANCIAL COVENANTS
CFG Group will maintain the following financial ratios on a consolidated basis
(unless Westpac otherwise agrees to vary them, whether temporarily or
otherwise):
(i) (MINIMUM EBITDA) for the period from 30 April 2000 to 30 April 2001,
EBITDA on a twelve monthly rolling basis is to be not less than
A$18,000,000.00;
(ii) (TOTAL SENIOR DEBT/FREE CASH FLOW) at all times on and from 1 May 2001,
the ratio of Total Senior Debt to Free Cash Flow is not to exceed three
times;
<PAGE> 17
14
(iii) (TOTAL LIABILITIES/TOTAL TANGIBLE ASSETS) the percentage of Total
Liabilities to Total Tangible Assets must not during any of the
following periods exceed the amounts shown below for that period:
<TABLE>
<CAPTION>
Period Percentage
--------------------------------------------------------------------------------
<S> <C>
From and including 30 April 2000 up to 205%
and including 23 July 2000
--------------------------------------------------------------------------------
From and including 24 July 2000 up to 195%
and including 15 October 2000
--------------------------------------------------------------------------------
From and including 16 October 2000 up to 190%
and including 4 February 2001
--------------------------------------------------------------------------------
From and including 5 February 2001 up to 180%
and including 14 October 2001
--------------------------------------------------------------------------------
From 15 October 2001 170%
--------------------------------------------------------------------------------
</TABLE>
(iv) (FIXED CHARGE COVER) the ratio of:
(EBITDA and Lease Rental Obligations) to (Senior Interest plus Lease
Rental Obligations) for CFG Group and for any period before the
Restructure is complete, the Group
on a twelve monthly rolling basis is not to be less than:
- for any period ending before 4 February 2001 -- 1.8 times; and
- for any period after 4 February 2001 -- 1.7 times;
(v) (CAPITAL EXPENDITURE) in each of the following financial years, capital
expenditure of CFG Group and for any period before the Restructure is
complete, the Group (including the costs of assets subject to any Lease)
must not exceed the following amounts at the following times without
Westpac's prior written consent.
Year ending 30 April:
(i) 2000, $6,325,000.00;
(ii) 2001, $6,240,000.00;
(iii) 2002, $6,448,000.00;
(iv) 2003, $6,706,000.00;
in addition, capital expenditure on a twelve month rolling basis for
each quarter in the financial year starting 1 May 2000 and ending 30
April 2001 is not to exceed:
<TABLE>
<CAPTION>
Quarter ending Maximum Amount
--------------------------------------------------------------------------------
<S> <C>
23 July 2000 $8,294,000.00
--------------------------------------------------------------------------------
15 October 2000 $8,553,000.00
--------------------------------------------------------------------------------
4 February 2001 $9,178,000.00
--------------------------------------------------------------------------------
</TABLE>
(vi) (TOTAL SENIOR DEBT CAP) the Total Senior Debt must not at any time
exceed $46,000,000.00; and
(vii) (NO DIVIDENDS) CFG will not declare or pay any dividend without the
prior written consent of Westpac.
<PAGE> 18
15
Compliance with the above financial covenants is to be determined on a twelve
monthly rolling basis on the last day of each operational quarter by reference
to the information provided to Westpac under clause 12.1 (a) and where the
determination is to be made in respect of all or part of a period before the
Restructure is complete, the determination will be made for that part of the
period on the information relating to the Group provided under clause 12.1(a).
12.4 GENERAL UNDERTAKINGS
(a) (PAYMENTS TO SIZZLER INTERNATIONAL, INC) It will ensure that no company
in the CFG Group makes, without the prior written consent of Westpac,
any payments to Sizzler International, Inc. or Restaurants Concept
International, Inc other than the following permitted payments:
(i) a maximum aggregate amount of $58,000,000.00, to Sizzler
International, Inc when the Restructure is complete;
(ii) an annual payment not exceeding $3,900,000.00 ("Payment") in any
twelve month period commencing 1 May and ending 30 April for
management fees and Interest Expense on Subordinated Debt owing
to Restaurants Concepts International, Inc or Sizzler
International, Inc.which is to be paid as follows:
(A) until the Commitment is reduced to $38,000,000.00, the
whole amount of the Payment is to be paid into a deposit
account held by Collins Restaurants Management Pty Ltd
ACN 093 912 978 with Westpac (the "Account");
(B) when the Commitment is reduced to $38,000,000.00 or
less, 64% of the amount of the Payment can be paid
direct to Sizzler International, Inc or Restaurants
Concepts International, Inc (as the case may be) and the
remainder of the Payment must be paid into the Account;
and
(C) when the Commitment is reduced to $32,000,000.00 or
less, the whole amount of the Payment can be paid
directly to Sizzler International, Inc or Restaurants
Concepts International, Inc (as the case may be).
Without limitation, Westpac agrees that if:
- no Total Senior Debt is due and unpaid; and
- no Event of Default or Potential Event of Default has occurred;
Westpac will:
(A) when the Commitment is reduced to $38,000,000.00 release 64% of
the funds in the Account to Collins Restaurants Management Pty
Ltd to enable it to pay management fees and Interest Expense on
Subordinated Debt to Restaurants Concepts International, Inc or
Sizzler International, Inc as the case may be; and
(B) when the Commitment is reduced to $32,000,000.00, remove any
restriction on the right of Collins Restaurants Management Pty
Ltd to withdraw funds from the Account.
Each Guarantor agrees that if there is any material breach of a
financial covenant in clause 12.3 or 12.4 of this Agreement, that it is
not remedied to the reasonable satisfaction of Westpac within 30 days of
Westpac giving written notice of the
<PAGE> 19
16
breach to CFG, Westpac may apply the funds in the Account in repayment
of Finance Debt owing to Westpac.
(b) (CHANGE IN MANAGEMENT) CFG will immediately notify Westpac in writing if
there is a change in the person holding the position of the chief
executive officer of CFG or any other significant change in the
management of any company in the CFG Group.
12.5 UNDERTAKINGS BY GUARANTORS
Each Guarantor gives the undertakings contained in this Clause 12, other than
the undertakings contained in Sub-clauses 12.1 (a)(i) -- (v), 12.1(b) and
12.1(d) unless Westpac otherwise consents in writing.
13. EVENTS OF DEFAULT
Each of the following is an Event of Default (even if outside the control of any
Relevant Company) except as stated below.
(a) (OBLIGATIONS UNDER TRANSACTION DOCUMENTS) Any Relevant Company fails to
do any of the following (to the extent applicable to it):
(i) pay principal under a Bank Document or any interest or other
amount under a Bank Document on the due date;
(ii) comply with any of its financial undertakings in clauses 12.2
(Negative Pledges), 12.3 (Financial Covenants); or
(iii) comply with any other material obligation in the Bank Documents
and, if that failure can be remedied within 30 days of written
notice from Westpac, it does not remedy that failure within 30
days of written notice from Westpac of that failure.
(b) (NON PAYMENT BY SII) Sizzler International, Inc fails to make a payment
on time under a limited guarantee with Westpac dated on or about the
date of this Agreement.
(c) (MISREPRESENTATION) A representation or statement by or on behalf of a
Relevant Company in a Bank Document, or in a document provided under it,
is misleading in a material respect.
(d) (CROSS DEFAULT) Finance Debt of a Relevant Company totalling at least
$50,000.00 or an equivalent sum in any currency:
(i) is not paid when due (or within an applicable grace period)
except where it is being contested in good faith; or
(ii) becomes due and payable before its stated maturity, except as a
result of an exercise of a prepayment right in the absence of
default; or
(iii) an obligation to provide finance to a Relevant Company totalling
at least that amount is terminated except as a result of
voluntary termination in the absence of default, or
an event of default as defined in any other Bank Document occurs.
(e) (WINDING UP) An application or order is made, or a resolution is passed
or proposed in a notice of meeting, for:
<PAGE> 20
17
(i) the winding up, dissolution, official management or
administration of a Relevant Company or any analogous process;
or
(ii) an arrangement compromise or composition with its creditors or a
class of them, or
(iii) an application is made for any of the above except one which is
frivolous and vexatious.
(f) (ENFORCEMENT AGAINST ASSETS) A receiver, receiver and manager,
administrator or similar officer is appointed over a Relevant Company or
a material asset or any material portion of its assets. A Security
Interest is enforced, or distress or other execution levied, against a
material asset or any material portion of the assets of a Relevant
Company.
(g) (REDUCTION OF CAPITAL) A Guarantor or Customer reduces its capital,
cancels its uncalled capital or buys back its shares to an extent which
is likely to cause a breach of the financial undertakings in clause 12.
(h) (INSOLVENCY) A Relevant Company is insolvent or is deemed or presumed
insolvent under any applicable law. A Relevant Company ceases or
threatens to cease carrying on its business or paying its debts. A
Relevant Company disposes or threatens to dispose of a substantial part
of its assets.
(i) (BANK DOCUMENTS) All or a material part of a Bank Document is for any
reason:
(i) terminated or of no force or limited force; or
(ii) terminable at the option of the Relevant Company, except as
expressly provided under that Bank Document; or
(iii) a Relevant Company alleges that it is so.
(j) (INVESTIGATION) An investigator or any other form of enquiry is
instituted under the Corporations Law or similar legislation into the
affairs of a Relevant Company which in the reasonable opinion of Westpac
is likely to have a Material Adverse Effect.
(k) (REVOCATION OF AUTHORISATION) An Authorisation which is material to the
business of a Guarantor or to the performance by the Relevant Companies
of the Bank Documents or their validity or enforceability ceases to have
effect and is not replaced by another Authorisation acceptable to
Westpac.
(l) (MATERIAL ADVERSE CHANGE) There are any other circumstances including a
material adverse change to the business assets or financial condition of
the CFG Group as a whole or the Relevant Companies taken as a whole
which may in the opinion of Westpac have a Material Adverse Effect.
(m) (CONTROL) Any Relevant Company or its holding company becomes controlled
by another person or there is a substantial change in the control of CFG
other than pursuant to the Restructure.
(n) (FUNDING APPLIED FOR ANY OTHER PURPOSE) Funding by Westpac to any
Relevant Company is applied for any purpose other than the purpose it
was provided for.
(o) (PRIOR INTEREST NOT DISCLOSED) A Relevant Company did not disclose to
Westpac in writing, before or at the time this Agreement was executed,
the fact that a Security Interest, trust, option or other third party
right or interest affects its property, assets and rights the subject of
a Security.
<PAGE> 21
18
(p) (CHANGE IN CONSTITUENT DOCUMENTS) Any Relevant Company alters its
Memorandum or Articles of Association or other constituent documents in
any material way without the consent of Westpac.
(q) (COMPULSORY ACQUISITION):
(i) All or any material part of any Relevant Company's property the
subject of a Security is compulsorily acquired by or by order of
any Governmental Agency or under any law and the amount of
compensation received or to be received by that Relevant Company
in respect of that acquisition is, in the opinion of Westpac,
substantially less than the value of the property acquired or
that amount is not dealt with in accordance with this Agreement;
(ii) Any Governmental Agency orders the sale, vesting or divesting of
all or any material part of a Relevant Company's property the
subject of a Security and the amount of any compensation
received or to be received by that Relevant Company in respect
of that sale, vesting or divesting is, in the opinion of
Westpac, substantially less that the value of the property sold,
vested or divested or that amount is not dealt with in
accordance with this Agreement; or
(iii) Any Governmental Agency takes any step for the purposes of any
of the above,
the result of which (whether individually or cumulatively) has a
Material Adverse Effect).
Nothing in paragraph (d) or (f) is an Event of Default if done for the purpose
of solvent reorganisation previously approved by Westpac.
14. WESTPAC'S REMEDIES AND POWERS
14.1 EVENT OF DEFAULT
In addition to any other rights provided by law or any Bank Document at any time
after an Event of Default (whether or not it is continuing) Westpac may do
either or both of the following:
(a) terminate any facility provided under any Bank Document; and
(b) by written notice require the Customer to repay all amounts lent or
provided to it under any Bank Document (subject to the provisions of the
Bank Document), and all other amounts actually or contingently
outstanding by it under this Agreement or any Bank Document, and the
respective Customer must pay them immediately.
(c) by written notice require the Guarantor to pay all the amounts
Guaranteed by it under this Agreement or any Bank Document (whether or
not contingently due), and the respective Guarantor must pay them
immediately.
If an amount is paid to Westpac to cover an amount contingently owing, Westpac
will hold that amount in an interest bearing account until the amount becomes
actually owing or ceases to be contingently owing. Westpac will then apply the
amount in the account (including interest) in payment of the amount actually
owing and return the balance to the relevant Guarantor.
<PAGE> 22
19
14.2 NO WAIVER
No failure to exercise a right or power, and no delay in exercising a right or
power, operates as a waiver. Waivers must be in writing.
<PAGE> 23
20
GENERAL PROVISIONS
15. PAYMENTS
15.1 PAYMENTS
The Guarantor will make all payments under this Agreement when Westpac demands
them and without deducting any amounts the Guarantor may claim from Westpac.
Payments must be in cleared funds and free of any set-off or deduction, except
for taxes where required by law. The Guarantor must pay:
(a) in the currency in which the amounts demanded are denominated, and
(b) at Westpac's address set out on the front cover or any other address
which Westpac gives from time to time.
If any amount is received by Westpac in a currency other than that in which it
was demanded, the Guarantor will compensate Westpac for any exchange loss.
If the Guarantor is required to deduct any tax from any payment (except a tax on
Westpac's overall net income), then:
(a) it must pay that amount to the appropriate authority and promptly give
Westpac evidence of payment, and
(b) the amount payable is increased so that (after deducting that tax, and
paying any taxes on the increased amount) Westpac receives the same
amount it would have received had no deduction been made.
15.2 TIME OF PAYMENT
Unless otherwise stated, amounts payable under any of the Clauses 16 (Yield
Protection) and 17 (Additional Payments), are payable within two Business Days
of demand.
15.3 INTEREST
The Guarantor will pay interest on any amount which has been demanded by Westpac
but remains unpaid at the rate at which overdue amounts bear interest under the
Bank Documents. If several rates are provided for in the Bank Documents,
interest under these conditions will be payable at the highest of those rates.
Interest will accrue each day on each amount due under a Bank Document but
unpaid. Unless otherwise specified in the Bank Document, the rate will be
Westpac's Reference Lending Rate then applicable plus:
(a) in the case of a facility governed by a Bank Document, any margin
applied by Westpac under the relevant Bank Document plus 2% per annum;
and
(b) otherwise, 4% per annum.
That interest accrues before and after any judgment. Unless it does so more
often, Westpac will be taken to have debited monthly the Guarantor's account
with accrued interest under this paragraph. That interest will then itself bear
interest.
Despite any other provision in any other Bank Document, but only for the purpose
of calculating interest, if Westpac is paid moneys by one or more of the
Guarantors under a Bank Document and Westpac, although being entitled to apply
those moneys to reduce the Secured Moneys, decides instead to deposit the moneys
into one or more suspense
<PAGE> 24
21
accounts, interest on the Secured Moneys will be calculated on the difference
between the Secured Moneys and the aggregate of all amounts held in such
suspense account(s).
16. YIELD PROTECTION
Whenever Westpac determines that a Change in Law (as defined below) has the
effect of:
(a) increasing its costs of funding or maintaining a facility under a Bank
Document, or reducing its return or amounts received in respect of the
facility; or
(b) reducing its return on capital allocated to a facility under a Bank
Document (including because more capital needs to be allocated to the
facility or cannot be used elsewhere),
then it will promptly notify the relevant Guarantor, who must pay Westpac the
amount Westpac certifies is necessary to compensate it. That certificate will
give an outline of the calculation, and will be conclusive and bind the
Guarantor in the absence of manifest error.
If the Guarantor so requests, Westpac will negotiate in good faith with a view
to finding a means of minimising the effect, but it is not a defence that the
effect could have been avoided or minimised.
A CHANGE IN LAW is the introduction of, or a change in, any law, official
directive, ruling or request or a change in its interpretation. If it does not
have the force of law, it must be one with which responsible Australian banks
would comply. Without limitation, it includes any occurrence which is a "Change
in Law" as described above and which relates to capital adequacy, special
deposit, liquidity, reserve, prime assets, tax or prudential requirements
(except a change in tax on overall net income).
17. ADDITIONAL PAYMENTS
17.1 INDEMNITY AND COSTS
Each Guarantor will indemnify Westpac against any liability, loss, cost or
expense (including legal costs and goods and services tax on a full indemnity
basis and the cost to Westpac of in house counsel at reasonable rates) it incurs
in or as a result of an Event of Default or Potential Event of Default or a
breach of its obligations, or actual or contemplated enforcement of this
Agreement or any Bank Document to which it is a party or any Security.
17.2 CURRENCY INDEMNITY
Each Guarantor will indemnify Westpac if any amount payable under or in
connection with a Bank Document is received in a currency which is different
from that in which it is required to be paid under this Agreement. This
indemnity applies whatever the reason for receipt of the amount in a different
currency.
17.3 EXPENSES
The Guarantor will pay:
(a) all stamp, transaction and other similar duties and charges, plus
(b) all external legal costs which Westpac incurs (on a full indemnity
basis),
<PAGE> 25
22
in relation to this Agreement or any Bank Document to which it is a party and
any Security and any transaction under them. This includes financial
institutions duty and debits tax.
The Guarantor will on a full indemnity basis pay all amounts which Westpac
incurs in relation to the enforcement of this Agreement or any Security.
Each Guarantor will also pay any fines and penalties unless they result from a
failure by Westpac to lodge a document for stamping in sufficient time, having
received from the Guarantor the amount of stamp duty in good time.
17.4 GOODS AND SERVICES TAX
(a) All payments to be made by the Guarantor or Customer under or in
connection with this Agreement have been calculated without regard to
GST.
If all or part of any such payment is the consideration for a taxable
supply for GST purposes then, when the Guarantor or Customer makes the
payment:
(i) it must pay to Westpac an additional amount equal to that
payment (or part) multiplied by the appropriate rate of GST; and
(ii) Westpac will promptly provide it with a tax invoice complying
with the GST law.
(b) Where under this letter or a Bank Document the Customer or a Guarantor
is required to reimburse or indemnify for an amount, the Customer or the
Guarantor (as the case may be) will pay the relevant amount (including
any sum in respect of GST) less any GST input tax credit Westpac
determines that it is entitled to claim in respect of that amount.
(c) Any word or expression used in this clause which is defined in A New Tax
System (Goods and Services Tax) Act 1999 (Cth) has the same meaning in
this document.
18. GENERAL
18.1 TERM
This Agreement will continue so long as there is any liability, obligation,
document or agreement between Westpac and any Guarantor or Westpac releases it.
18.2 STATEMENTS
The Guarantor agrees that a written statement by Westpac, setting out the amount
which the Guarantor owes under this Agreement, is sufficient proof that the
Guarantor owes the amount stated, unless it is proved wrong.
18.3 NOTICES
Any notice, demand, statement, certificate or other communication by Westpac
under any Bank Document may be given by any person whose title includes the word
"manager", "counsel", "head" or "president", or any attorney authorised to do
so.
Notices may be sent by facsimile, post or any other means to the recipient's
address or number set out on the signature page of this Agreement or in any
other address or number notified to the sender by the recipient.
<PAGE> 26
23
Notices will be taken to have been given if delivered or left at that address on
the date on which it is delivered or left.
18.4 AGENT FOR SERVICE OF PROCESS
Each Guarantor having its registered office outside Queensland:
(a) irrevocably appoints Collins Restaurants Management Pty Ltd ACN 093 912
979 ("CRM") as its agent for service of process relating to any
proceedings before the courts and appellate courts of the State of
Queensland in connection with each Bank Document; and
(b) agrees that failure by CRM to notify it of the process will not
invalidate the proceedings concerned.
19. APPROPRIATION AND SET-OFF
19.1 APPROPRIATION
Any money paid to Westpac to reduce the Customer's debts to Westpac may be used
to pay off any part of the Customer's debts which Westpac chooses.
19.2 SET-OFF
If the Guarantor has any money in any account with Westpac, Westpac may use it
to pay money the Guarantor owes to Westpac under this Agreement, but it need not
do so. It can convert currencies using its normal procedures.
To the maximum extent allowed by law, the Guarantor gives up any right to set
off any amounts Westpac owes it against amounts owed by the Guarantor under this
Agreement.
20. ASSIGNMENT AND TRANSFER
Westpac can transfer its rights under this Agreement to someone else. If Westpac
does, this Agreement will apply to the transferee as if it were Westpac. To the
maximum extent allowed by law, any transfer will be free of any set off, equity
or cross-claim which but for this paragraph the Guarantor would have had against
Westpac or the transferee of this Agreement. Westpac may disclose information
concerning the Guarantee or the Guarantor to a potential transferee or
sub-participant of this Agreement, the Guaranteed Obligations or the Guaranteed
Money.
No Guarantor may assign its rights under any Bank Document.
21. RELIANCE
The Guarantor acknowledges that it did not sign this Agreement relying on any
promises or statements made by Westpac. It does not matter whether they were
made in response to any question or not.
The only terms which apply to this Agreement are contained in it.
Westpac is not required to do anything in relation to, or tell the Guarantor
anything concerning, the Customer's financial and business condition and affairs
or its transactions with Westpac.
<PAGE> 27
24
22. MULTIPLE PARTIES
22.1 MULTIPLE GUARANTORS
The terms of this Agreement apply to each Guarantor individually and to all
Guarantors as a group. Each Guarantor is individually liable for the full amount
of the Guaranteed Moneys, even if one or more of the others:
(a) has not signed or is not bound by it, or
(b) in the future stops being liable (for example, because Westpac releases
that Guarantor).
Westpac can demand payment from one or more of the Guarantors without demanding
it from the others.
References to "the Guarantor", "a Guarantor" or "Guarantors" shall be construed
accordingly.
22.2 MULTIPLE CUSTOMERS
The terms of the guarantee and this Agreement apply to each Customer
individually and to all of them as a group. Without limiting the above, this
Agreement applies to money owed by any one or more of them.
References to "the Customer", "a Customer" or "Customers" shall be construed
accordingly
23. NEW GUARANTORS
A party can join this Agreement as a guarantor. To do so the party must sign an
accession agreement in the form attached. Upon signing the agreement the party
will automatically become a guarantor under this Agreement and it, as well as
the other parties to this Agreement, will have the same obligations and rights
as if the party were named in it as a Guarantor and Customer, and as if the
party had signed this Agreement.
24. LAW AND JURISDICTION
This Agreement is governed by Queensland law. The Guarantor accepts the
non-exclusive jurisdiction of the courts having jurisdiction there.
Any law that allows the Guarantor or the Customer to avoid or defer payment, or
that gives the Guarantor or Customer rights not contained in this Agreement,
does not apply, unless the law is one which applies despite an agreement to the
contrary. If any part of this Agreement is prohibited or unenforceable, it will
not affect the remaining part.
25. COUNTERPARTS
This Agreement may be executed in any number of counterparts. All of such
counterparts, taken together, shall be deemed to constitute the one instrument.
<PAGE> 28
25
26. ATTORNEYS
Each attorney executing this agreement states that he has no notice of
revocation of his power of attorney.
27. INCONSISTENCY
(a) Subject to paragraph (b), to the extent that there is any express
inconsistency between the terms of this Agreement and any other Bank
Document the terms of this Agreement shall prevail.
(b) To the extent that there is any inconsistency between the terms of this
Agreement and s cross guarantee and negative pledge dated 19 September
1997 between CFI, Westpac and others (the "earlier agreement") the
earlier agreement prevails until the Restructure is complete. This
Agreement terminates the earlier agreement (except in respect of any
liability arising under it prior to termination) from the time that the
Restructure is complete.
28. RELEASE OF GUARANTORS
(a) If:
(i) the Restructure is complete;
(ii) no Event of Default or Potential Event of Default has occurred;
and
(iii) Westpac has received the opinion from PricewaterhouseCoopers
referred to in clause 5.5(a) of the Bill Facility Agreement in
form and substance reasonably satisfactory to it,
Westpac will:
(iv) release the following Guarantors from liability under this
Agreement:
- Collins Foods Australia Pty Ltd ACN 009 914 103;
- Collins Finance and Management Pty Ltd ACN 009 996 721;
- Sizzler Australia Pty Ltd ACN 010 060 876;
- Subject to satisfaction of paragraph (b), Collins Property
Development Pty Ltd ACN 010 539 616; and
- Subject to paragraph (c), each of the companies in the SIM
Group; and
(v) release Sizzler International, Inc from its obligations under
the Stock Pledge with Westpac dated 19 September 1997.
(b) Westpac is not required to release Collins Property Development Pty Ltd
from this Agreement unless that company has granted leases on terms
reasonably satisfactory to Westpac over all interests in land owned or
occupied by the company in favour of Collins Restaurants Queensland Pty
Ltd or Sizzler Restaurants Group Pty Ltd and Westpac holds a first
registered mortgage from the relevant company over the lease of each
property and a lessor's right of entry deed for each property
<PAGE> 29
26
(c) Westpac is not required to release a company in the SIM Group from this
Agreement unless SIM has entered into a franchise and licence agreement
(relating to the granting of Sizzler intellectual property in the Asia
Pacific region) with a company in the CFG Group on terms reasonably
satisfactory to Westpac and both of those companies have entered into a
Tripartite Agreement on terms reasonably acceptable to Westpac with
Westpac in relation to that Agreement.
(d) Each Guarantor consents to the release of a Guarantor pursuant to this
clause and agrees that its liability under this Agreement is not
affected by the release of any other Guarantor.
<PAGE> 30
27
SCHEDULE A -- GUARANTORS
<TABLE>
<CAPTION>
ACN/ARBN/
PLACE OF
NAME OF COMPANY INCORPORATION POSTAL ADDRESS
--------------- ------------- --------------
<S> <C> <C>
Collins Foods Group Pty Ltd 009 937 900 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Finance and Management Pty Ltd 009 996 721 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Foods Australia Pty Ltd 009 914 103 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Foods International Pty Ltd 009 980 250 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Collins International Inc Delaware 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Property Development Pty Ltd 010 539 616 16 Edmondstone Street,
Newmarket, Qld 4051
Furnace Concepts Australia Corp. 070 065 468 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Furnace Concepts International Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Restaurants Queensland Pty Ltd 009 988 381 16 Edmondstone Street,
Newmarket, Qld 4051
Restaurant Concepts of Australia Pty Ltd Nevada 16 Edmondstone Street,
(Deregistered in Australia 24-04-96, Newmarket, Qld 4051
code s350, Formerly A.R.B.N.
010 761 770)
Restaurant Concepts International Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Australia Pty Ltd 010 060 876 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Franchise Development Limited Bermuda 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler International Marks Inc. Delaware 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler New Zealand Limited Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Restaurant Services Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler South Pacific Pty Ltd 010 713 852 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Sizzler South-East Asia Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
</TABLE>
<PAGE> 31
28
<TABLE>
<CAPTION>
ACN/ARBN/
PLACE OF
NAME OF COMPANY INCORPORATION POSTAL ADDRESS
--------------- ------------- --------------
<S> <C> <C>
Sizzler Asia Holdings, Inc Delaware 16 Edmonstone Street,
Newmarket, Qld 4051
Collins Restaurants Management Pty Ltd 093 912 979 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Restaurants Group Pty Ltd 010 102 388 16 Edmondstone Street,
Newmarket, Qld 4051
</TABLE>
<PAGE> 32
29
SCHEDULE B - FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT is made the day of 20
-------------------- --------- --
BY [*] A.C.N. [*] of [*] (the "NEW GUARANTOR")
AND EACH OF THE COMPANIES LISTED IN THE SCHEDULE (each an "EXISTING
GUARANTOR")
TO WESTPAC BANKING CORPORATION A.R.B.N. 007 457 141 ("WESTPAC").
THIS ACCESSION AGREEMENT IS ENTERED INTO IN EXCHANGE FOR Westpac giving credit,
or continuing to provide it, or not taking immediate action to enforce the
obligations of any Customer referred to in the Cross Guarantee and Indemnity and
Negative Pledge with Financial Ratio Covenants dated [*] between Westpac and the
Existing Guarantors (as amended from time to time, the "GUARANTEE") and for
other good and valuable consideration.
Expressions defined in the Guarantee have the same meaning in this Accession
Agreement.
THE NEW GUARANTOR AND THE EXISTING GUARANTORS agree with and acknowledge to
Westpac:
(a) That the New Guarantor shall as and from the date of this Accession
Agreement be subject in all respects to all those obligations to
Westpac, and the Existing Guarantors shall have the same liability with
respect to the indebtedness of the New Guarantor as if the New Guarantor
was a Guarantor and Customer respectively named as a party to the
Guarantee and all the terms of the Guarantee shall apply to and bind the
Guarantors (including the New Guarantor) accordingly.
(b) That at the time of executing this Accession Agreement the New Guarantor
is aware that the Existing Guarantors have already incurred liabilities
to Westpac and that the existence of such liabilities is not to diminish
or release in any way the liabilities of the New Guarantor arising under
clause (a) of this Accession Agreement or Westpac's rights powers and
remedies arising because of this Accession Agreement.
(c) [That at the time of executing this Accession Agreement the Existing
Guarantors are aware that the New Guarantor has already incurred
liabilities to Westpac and that the existence of such liabilities is not
to diminish or release in any way the liabilities of the Existing
Guarantors arising under the Guarantee.] [insert if the New Guarantor
has existing liabilities to Westpac]
This Agreement may be executed in any number of counterparts. All of such
counterparts, taken together, shall be deemed to constitute the one instrument.
Clause 18.4 of the Guarantee applies to this Agreement as if stated in it (with
"Guarantor" being read to include the New Guarantor).
SCHEDULE
<TABLE>
<CAPTION>
ACN/ARBN/
PLACE OF
NAME OF COMPANY INCORPORATION POSTAL ADDRESS
--------------- ------------- --------------
<S> <C> <C>
Collins Foods Group Pty Ltd 009 937 900 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Finance and Management Pty Ltd 009 996 721 16 Edmondstone Street,
Newmarket, Qld 4051
</TABLE>
<PAGE> 33
30
<TABLE>
<CAPTION>
ACN/ARBN/
PLACE OF
NAME OF COMPANY INCORPORATION POSTAL ADDRESS
--------------- ------------- --------------
<S> <C> <C>
Collins Foods Australia Pty Ltd 009 914 103 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Foods International Pty Ltd 009 980 250 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Collins International Inc Delaware 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Property Development Pty Ltd 010 539 616 16 Edmondstone Street,
Newmarket, Qld 4051
Furnace Concepts Australia Corp. 070 065 468 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Furnace Concepts International Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Collins Restaurants Queensland Pty Ltd 009 988 381 16 Edmondstone Street,
Newmarket, Qld 4051
Restaurant Concepts of Australia Pty Ltd Nevada 16 Edmondstone Street,
(Deregistered in Australia 24-04-96, Newmarket, Qld 4051
code s350, Formerly A.R.B.N.
010 761 770)
Restaurant Concepts International Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Australia Pty Ltd 010 060 876 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Franchise Development Limited Bermuda 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler International Marks Inc. Delaware 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler New Zealand Limited Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Restaurant Services Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler South Pacific Pty Ltd 010 713 852 16 Edmondstone Street,
Nevada Newmarket, Qld 4051
Sizzler South-East Asia Inc Nevada 16 Edmondstone Street,
Newmarket, Qld 4051
Sizzler Asia Holdings, Inc. Delaware 16 Edmonstone Street,
Newmarket, Qld 4051
Collins Restaurants Management Pty Ltd 093 912 979 16 Edmonstone Street
Newmarket, Qld 4051
Sizzler Restaurants Group Pty Ltd 010 102 388 16 Edmonstone Street,
Newmarket, Qld 4051
</TABLE>
<PAGE> 34
31
EXECUTED AS AN AGREEMENT in
THE COMMON SEAL of )
) ---------------------------------
was duly affixed by authority of the ) Director
Board of Directors in the presence of )
)
(insert name) ) ---------------------------------
----------------------- ) Director/Secretary
and )
)
(insert name) )
----------------------- )
[ONE EXECUTION TO BE INCLUDED FOR EACH NEW GUARANTOR AND EACH EXISTING
GUARANTOR]
<PAGE> 35
i
EXECUTION
EXECUTED AS AN AGREEMENT in
ON
THE COMMON SEAL of )
)
COLLINS FOODS GROUP PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS FINANCE AND MANAGEMENT PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS FOODS AUSTRALIA PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 36
ii
THE COMMON SEAL of )
)
COLLINS FOODS INTERNATIONAL PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS INTERNATIONAL INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS PROPERTY DEVELOPMENT PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 37
iii
THE COMMON SEAL of )
)
FURNACE CONCEPTS AUSTRALIA CORP. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
FURNACE CONCEPTS INTERNATIONAL INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS RESTAURANTS QUEENSLAND PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 38
iv
THE COMMON SEAL of )
)
RESTAURANT CONCEPTS OF AUSTRALIA PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
RESTAURANT CONCEPTS INTERNATIONAL INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER AUSTRALIA PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 39
v
THE COMMON SEAL of )
)
SIZZLER FRANCHISE DEVELOPMENT, LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER INTERNATIONAL MARKS INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER NEW ZEALAND LIMITED )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 40
vi
THE COMMON SEAL of )
)
SIZZLER RESTAURANT SERVICES INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER SOUTH PACIFIC PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER SOUTH-EAST ASIA INC. )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
<PAGE> 41
vii
THE COMMON SEAL of )
)
SIZZLER ASIA HOLDINGS, INC DELAWARE PTY )
LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
COLLINS RESTAURANTS MANAGEMENT PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
THE COMMON SEAL of )
)
SIZZLER RESTAURANTS GROUP PTY LTD )
)
was duly affixed by authority of the ) ---------------------------------
Board of Directors in the presence of ) Authorised officer
)
(insert name) )
----------------------- ) ---------------------------------
and ) Authorised officer
)
(insert name) )
----------------------- )
