Master Subsidiary Guaranty - California Pizza Kitchen Inc. and Bank of America NA
MASTER SUBSIDIARY GUARANTY
TO: Bank of America, N.A., as Administrative Agent
("Administrative Agent")
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RECITALS
A. Reference is made to that certain Credit Agreement dated as of October
29, 1999 among California Pizza Kitchen, Inc., a California corporation
("Borrower"), Lenders from time to time party thereto, Bank of America, N.A., as
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Administrative Agent, Swing Line Lender and Issuing Lender and Bankers Trust
Company, as Documentation Agent (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the "Agreement;" the terms
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defined therein being used herein as therein defined).
B. Each Guarantor is a direct or indirect Domestic Subsidiary of Borrower
and has derived, and expects to continuing deriving, direct and indirect
benefits from extensions of credit made to Borrower, and now desires to guaranty
the Obligations
C. It is a requirement of the Credit Agreement that each direct or
indirect Domestic Subsidiary of Borrower execute and delivery this Master
Subsidiary Guaranty or a joinder hereto (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, this
"Guaranty").
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NOW, THEREFORE, each Guarantor agrees as follows:
1. For valuable consideration, each of the undersigned (together with
Person becoming a party hereto pursuant to Paragraph 18 hereof, each, a
"Guarantor" and collectively, "Guarantors") unconditionally, absolutely and
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irrevocably jointly and severally guarantees and promises to pay to
Administrative Agent, or order, on demand, in lawful money of the United States
and in immediately available funds, any and all present or future Obligations
owing to Lenders, Issuing Lender, Indemnitees and Administrative Agent
(collectively, the "Guarantied Parties"). The term Obligations has the meaning
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assigned to such term under the Credit Agreement and is used herein in its most
comprehensive sense and includes any and all advances, debts, obligations, and
liabilities of all Borrower Parties, now, or hereafter made, incurred, or
created, whether voluntary or involuntarily, and however arising, including,
without limitation, any and all attorneys' fees (including the allocated cost of
inhouse counsel), costs, premiums, charges, or interest owed by any Borrower
Party to any Guarantied Party under the Loan Documents, whether due or not due,
absolute or contingent, liquidated or unliquidated, determined or undetermined,
whether a Borrower Party may be liable individually or jointly with others,
whether recovery upon such indebtedness may be or hereafter becomes barred by
any statute of limitations or whether such indebtedness may be or hereafter
become otherwise unenforceable.
2. This Guaranty is a continuing guaranty which relates to any
Obligations, including those which arise under successive transactions which
shall either cause a Borrower Party to incur new Obligations, continue the
Obligations from time to time, or renew them after they have been satisfied.
Each Guarantor agrees that nothing shall discharge or satisfy its
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obligations created hereunder except for the full payment of the Obligations.
Any payment by any Guarantor shall not reduce its maximum obligation hereunder.
3. Each Guarantor agrees that it is directly and primarily liable to
Administrative Agent for the benefit of Guarantied Parties, that its obligations
hereunder are independent of the Obligations of any Borrower Party, or of any
other guarantor, and that a separate action or actions may be brought and
prosecuted against any Guarantor, whether action is brought against a Borrower
Party or whether a Borrower Party is joined in any such action or actions. Each
Guarantor agrees that any releases which may be given by Guarantied Parties to a
Borrower Party or any other guarantor shall not release it from this Guaranty.
4. The obligations of each Guarantor under this Guaranty shall not be
affected, modified or impaired upon the occurrence from time to time of any of
the following, whether or not with notice to or the consent of any Guarantor (a)
the compromise, settlement, change, modification, amendment (whether material or
otherwise) or partial termination of any or all of the Obligations; (b) the
failure to give notice to any Guarantor of the occurrence of any Event of
Default under the terms and provisions of the Agreement; (c) the waiver of the
payment, performance or observance of any of the Obligations; (d) the taking or
omitting to take any actions referred to in any Loan Document or of any action
under this Guaranty; (e) any failure, omission or delay on the part of
Administrative Agent and/or Guarantied Parties to enforce, assert or exercise
any right, power or remedy conferred in this Guaranty, the Credit Agreement, any
other Loan Document or any other indulgence or similar act on the part of
Administrative Agent and/or Guarantied Parties in good faith and in compliance
with applicable law; (f) the voluntary or involuntary liquidation, dissolution,
sale or other disposition of all or substantially all of the assets, marshalling
of assets, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors or readjustment of, or other similar proceedings which affect any
Guarantor, any other guarantor of any of the Obligations of a Borrower Party or
any of the assets of any of them, or any allegation of invalidity or contest of
the validity of this Guaranty in any such proceeding; (g) to the extent
permitted by law, the release or discharge of any other guarantors of the
Obligations from the performance or observance of any obligation, covenant or
agreement contained in any guaranties of the Obligations by operation of law; or
(h) the default or failure of any other guarantors of the Obligations fully to
perform any of their respective obligations set forth in any such guaranties of
the Obligations. To the extent any of the foregoing refers to any actions which
Administrative Agent or Guarantied Parties may take, each Guarantor hereby
agrees that Administrative Agent and/or Guarantied Parties may take such actions
in such manner, upon such terms, and at such times as Administrative Agent or
Guarantied Parties, in their discretion, deem advisable, without, in any way or
respect, impairing, affecting, reducing or releasing any Guarantor from its
undertakings hereunder and each Guarantor hereby consents to each and all of the
foregoing actions, events and occurrences.
5. Each Guarantor hereby waives (a) any and all rights to require
Guarantied Parties to prosecute or seek to enforce any remedies against a
Borrower Party or any other party liable to Guarantied Parties on account of the
Obligations; (b) any right to assert against Guarantied Parties any defense
(legal or equitable), set-off, counterclaim, or claim which such Guarantor may
now or at any time hereafter have against a Borrower Party or any other party
liable to Administrative Agent or Guarantied Parties in any way or manner under
the Credit Agreement; (c) all defenses, counterclaims and off-sets of any kind
or nature, arising directly or indirectly
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from the present or future lack of perfection, sufficiency, validity or
enforceability of any Loan Document and the security interest granted pursuant
thereto; (d) any defense arising by reason of any claim or defense based upon an
election of remedies by Administrative Agent or Guarantied Parties including,
without limitation, any direction to proceed by judicial or nonjudicial
foreclosure or by deed in lieu thereof, which, in any manner impairs, affects,
reduces, releases, destroys or extinguishes such Guarantor's subrogation rights,
rights to proceed against a Borrower Party for reimbursement, or any other
rights of such Guarantor to proceed against a Borrower Party, against any other
guarantor, or against any other security, with such Guarantor understanding that
the exercise by Administrative Agent and/or Guarantied Parties of certain rights
and remedies may offset or eliminate such Guarantor's right of subrogation
against a Borrower Party, and that such Guarantor may therefore incur partially
or totally non-reimbursable liability hereunder; (e) all presentments, demands
for performance, notices of non-performance, protests, notices of protest,
notices of dishonor, notices of default, notice of acceptance of this Guaranty,
and notices of the existence, creation, or incurring of new or additional
indebtedness, and all other notices or formalities to which such Guarantor may
be entitled; and (f) without limiting the generality of the foregoing, such
Guarantor hereby expressly waives any and all benefits of California Civil Code
Sections 2809, 2810, 2819, 2825, 2839 and 2845 through 2850.
6. Each Guarantor hereby agrees that unless and until all Obligations have
been paid to Guarantied Parties in full, it shall not have any rights of
subrogation, reimbursement or contribution as against a Borrower Party or any
other guarantor, if any, and shall not seek to assert or enforce the same. Each
Guarantor understands that the exercise by Administrative Agent of certain
rights and remedies contained in the Loan Documents may affect or eliminate such
Guarantor's right of subrogation if any, against a Borrower Party and that such
Guarantor may therefore incur a partially or totally non-reimbursable liability
hereunder; nevertheless, such Guarantor hereby authorizes and empowers
Guarantied Parties to exercise, in their sole discretion, any right and remedy,
or any combination thereof, which may then be available, since it is the intent
and purpose of such Guarantor that the obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances.
7. Each Guarantor is presently informed of the financial condition of each
Borrower Party and of all other circumstances which a diligent inquiry would
reveal and which bear upon the risk of nonpayment of the Obligations. Each
Guarantor hereby covenants that it will continue to keep itself informed of the
financial condition of each Borrower Party, the status of other guarantors, if
any, and of all other circumstances which bear upon the risk of nonpayment.
Each Guarantor hereby waives its right, if any, to require Administrative Agent
or Guarantied Parties to disclose to it any information which Administrative
Agent or any Lender may now or hereafter acquire concerning such condition or
circumstances including, but not limited to, the release of any other guarantor.
8. Administrative Agent and each Lender's books and records evidencing the
Obligations shall be admissible in any action or proceeding and shall be binding
upon the Guarantors for the purpose of establishing the terms set forth therein
and shall constitute prima facie proof thereof.
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9. Notwithstanding anything to the contrary contained herein, the
obligations of each Guarantor hereunder shall be limited to an aggregate amount
equal to the largest amount that would not render its obligations hereunder
subject to avoidance under Section 548 of the Bankruptcy Code (Title 11, United
States Code) or any comparable provisions of any applicable state law.
10. Each Guarantor represents and warrants for and with respect to itself
that:
(a) Guarantor is a corporation duly organized, validly existing and in
good standing under the Laws of the state of its incorporation, has the
power and authority and the legal right to own and operate its properties,
to lease the properties it operates and to conduct its business, is duly
qualified and in good standing under the Laws of each jurisdiction where
its ownership, lease or operation of properties or the conduct of its
business requires such qualification, and is in compliance with all Laws
except to the extent that noncompliance does not have a Material Adverse
Effect.
(b) Guarantor has the power and authority and the legal right to make,
deliver and perform this Guaranty and to authorize the execution, delivery
and performance of this Guaranty. No consent or authorization of, filing
with, or other act by or in respect of any Governmental Authority, is
required in connection with the execution, delivery, performance, validity
or enforceability of this Guaranty. This Guaranty has been duly executed
and delivered by Guarantor, and constitutes a legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in accordance with
its terms, except as enforceability may be limited by applicable Debtor
Relief Laws affecting the enforcement of creditors' rights generally or by
equitable principles relating to enforceability.
(c) The execution, delivery, and performance by Guarantor of this
Guaranty and compliance with the provisions hereof have been duly
authorized by all requisite action on the part of Guarantor and do not and
will not (i) violate or conflict with, or result in a breach of, or require
any consent, except where such violation, conflict, breach or failure to
obtain consent would not have a Material Adverse Effect, under (A) any
Organization Documents of Guarantor or any of its Subsidiaries, (B) any
applicable Laws, rules, or regulations or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (C) any Contractual
Obligation of Guarantor or any of its Subsidiaries or by which any of them
or any of their property is bound or subject, (ii) constitute a default
under any such agreement or instrument, except where such default would not
have a Material Adverse Effect or (iii) result in, or require, the creation
or imposition of any Lien on any material portion of the properties of
Guarantor or any of its Subsidiaries.
(d) No litigation, investigation or proceeding of or before an
arbitrator or Governmental Authority is pending or, to the best knowledge
of Guarantor, threatened by or against Guarantor or any of its Subsidiaries
or against any of their properties or revenues which, if determined
adversely, could have a Material Adverse Effect.
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(e) The execution, delivery and performance by Guarantor of this
Guaranty does not constitute, to the best knowledge of Guarantor, a
"fraudulent conveyance," "fraudulent obligation" or "fraudulent transfer"
within the meanings of the Uniform Fraudulent Conveyances Act or Uniform
Fraudulent Transfer Act, as enacted in any jurisdiction.
11. All notices and other communications hereunder shall be delivered, in
the manner and with the effect provided in the Credit Agreement and, in the case
of Guarantors, in care of Borrower.
12. This Guaranty shall be binding upon the successors and assigns of each
Guarantor and shall inure to the benefit of Administrative Agent's and
Guarantied Parties' successors and assigns. This Guaranty cannot be assigned by
any Guarantor without the prior written consent of Guarantied Parties which
shall be in Guarantied Parties' sole and absolute discretion.
13. No failure or delay by Administrative Agent or Guarantied Parties in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
14. Guarantors shall jointly and severally pay (a) all reasonable out-of-
pocket expenses of Guarantied Parties, including reasonable fees and
disbursements of counsel (including the allocated cost of inhouse counsel and
staff) for Administrative Agent, in connection with any waiver or consent
hereunder or any amendment hereof and (b) all out-of-pocket expenses incurred by
Guarantied Parties, including fees and disbursements of counsel (including the
allocated cost of inhouse counsel and staff), in connection with the enforcement
of this Guaranty (whether or not suit is brought).
15. No modification of this Guaranty shall be effective for any purpose
unless it is in writing and executed by an officer of Administrative Agent
authorized to do so. This Guaranty merges all negotiations, stipulations and
provisions relating to the subject matter of this Guaranty which preceded or may
accompany the execution of this Guaranty.
16. Any indebtedness of Borrower Parties now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of Borrower Parties to
Guarantied Parties; and after the occurrence and during the continuance of an
Event of Default, such indebtedness of Borrower Parties to any Guarantor if
Administrative Agent so requests shall be collected, enforced and received by
each Guarantor as trustee for Guarantied Parties and be paid over to
Administrative Agent on account of the indebtedness of Borrower Parties to
Guarantied Parties but without reducing or affecting in any manner the liability
of any Guarantor under the other provisions of this guaranty.
17. It is not necessary for Guarantied Parties to inquire into the powers
of any Borrower Party or of the officers, directors or agents acting or
purporting to act on their behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
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18. Any Person becoming a Domestic Subsidiary shall become a Guarantor
hereunder by executing and delivering a Joinder Agreement and by complying with
the terms of Section 6.13 of the Credit Agreement. Upon Administrative Agent's
receipt of a duly executed and delivered Joinder Agreement, this Guaranty shall
be deemed amended to include such additional Person as a Guarantor, and such
Person shall become a party hereto as through a signatory hereto, with no
amendment or further action required hereunder, and thereafter, all references
to Guarantors shall include such additional Person.
19. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE
OF CALIFORNIA WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
20. This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
DATED AS OF: October 29, 1999
"Guarantors"
CPK MANAGEMENT COMPANY
/s/ H.G. Carrington, Jr.
By ----------------------------
H. G. Carrington, Jr.
Chief Financial Officer
and Secretary
CALIFORNIA PIZZA KITCHEN
OF ILLINOIS, INC.
/s/ Larry S. Flax
By ----------------------------
Larry S. Flax
Secretary and Treasurer
Acknowledged:
BANK OF AMERICA,N.A.,as Administrative Agent
/s/ Patrick W. Zetzman
By:---------------------------
Patrick W. Zetzman
Vice President
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