Multiple Loans
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT dated as of November 29, 1995 (as it may
be amended from time to time, this "Agreement") is entered into by and between
AMERIKING COLORADO CORPORATION I, a Delaware corporation (hereinafter called
"Borrower") and FRANCHISE ACCEPTANCE CORPORATION LIMITED (herein, together with
any assignee thereof or successor thereto, called "Lender").
PRELIMINARY STATEMENT
Borrower wishes to borrow funds from Lender to finance various activities
of Borrower in connection with Borrower's Burger King(Registered Trademark)
restaurant or restaurants as more fully set forth herein, and Lender is
willing to lend such funds, on the terms and conditions set forth herein, and
in connection with the Franchisee Loan Program (as defined below) of Lender.
The restaurants subject to the terms of this Agreement are identified by
Burger King Corporation ("BKC") store number and address on Annex I hereto
(the "Restaurants"). Each of the Restaurants is operated by the Borrower
pursuant to a franchise agreement ("Franchise Agreement") issued by BKC. To
induce Lender to lend such funds, Borrower is granting to Lender a security
interest in property and rights of Borrower relating to the Restaurants as set
forth below.
The parties hereto hereby agree as follows:
1. The Loan. Lender agrees, upon compliance by Borrower with the terms
and conditions hereof, to make a loan or loans (collectively the "Loan") to
the Borrower in the principal amounts and during the periods set forth in
Schedule 1 hereto. Borrower agrees to pay the principal amount of the Loan and
interest thereon on the dates and in the amounts set forth in the promissory
note(s) substantially in the form of Exhibit A which the Borrower signs and
delivers to Lender pursuant to Section 7 ("Note").
2. Business Loan; Franchisee Loan Program. Borrower agrees that Borrower
will use the proceeds of the Loan only for the business purpose(s) specified
in Annex I hereto. The proceeds of the Loan will not be used for personal,
family, household or consumer purposes. Borrower acknowledges that: (a) the
Loan is provided under a financing program (the "Franchisee Loan Program") of
Lender under which similar financing may be provided by Lender to other
persons for similar purposes; (b) Lender may finance its lending under the
Franchisee Loan Program by selling or granting interests in Lender's rights
under this Agreement and other similar loan documents to purchasers
("Purchasers") or to an agent, trustee or other representative for Purchasers
("Purchaser Agent"), and the Purchasers intend to finance their purchase and
holding of such interests on an aggregate basis and not on a basis solely
related to this Agreement; (c) Lender and/or Purchasers may grant a security
interest in their rights under this Agreement to a party or parties providing
financing or credit enhancement for the Franchisee Loan Program ("Credit
Enhancers"); (d) the interest rate applicable to the Loan will fluctuate from
time to time based on the costs of funding the Franchisee Loan Program; and
(e) the Purchasers, any Purchaser Agent, the Credit Enhancer(s) and their
respective successors and assigns are intended third-party beneficiaries
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of this Agreement and the other documents provided in connection with this
Agreement (each as it may be amended from time to time, together with this
Agreement, the "Loan Documents").
3. Interest. Borrower agrees to pay to Lender interest on the unpaid
balance of each Note outstanding from the date hereof until final maturity at
the rate per annum equal to the sum of (x) applicable margin specified in such
Note (the "Applicable Margin") plus (y) the Program Rate (as hereinafter
defined). Accrued interest shall be payable as provided in such Note. The
"Program Rate" shall be determined on each day by Lender as described in the
Program Rate Rider hereto. Each such determination by Lender shall be
conclusive absent manifest error. The unpaid principal amount of each Note
shall bear interest after final maturity, including maturity by acceleration,
at the rate per annum equal to the sum of (x) 2.0% plus (y) the Applicable
Margin plus (z) the Program Rate, which interest shall be payable upon demand
by Lender. All computations of interest shall be made on the basis of a year
of 360 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
In the event that any amounts due hereunder have not been paid to the
Lender within five (5) days after the date due, Borrower shall pay on demand
as a late charge, to the extent legally permitted, an amount equal to the
lesser of five percent (5%) of such overdue amounts or the maximum amount
allowed by law.
Borrower also agrees to pay to Lender or Purchaser Agent, upon its
written request providing reasonable detail, any increase in the cost to
Lender, any Purchaser or any Credit Enhancer in maintaining the Loan or any
reduction in any amount receivable by Lender, such Purchaser or such Credit
Enhancer arising by reason of (x) the introduction of or any change (including
any change by way of imposition or change of reserve requirements or tax laws)
in or in the interpretation of any law or regulation, in each case after June
2, 1994 or (y) compliance by Lender or its assignee with any guideline or
request from any governmental authority.
Notwithstanding anything to the contrary contained herein, interest
payable on the Loan shall at no time exceed the maximum amount permitted by
applicable law.
4. Fees. Borrower agrees to pay each of the fees described in Annex II
hereto, which fees shall be payable in immediately available funds on the date
of funding of the Loan or on such other day as is specified in such Annex.
5. Payments. Borrower shall make all payments hereunder not later than
11 a.m., New York time, on the date when due in U.S. dollars through the
Disbursing Account as provided in Section 11(e) for the account of Lender. All
payments, whenever made, shall apply first toward accrued interest, with the
remainder of any payment applying toward principal and other amounts due.
Lender, any Purchaser and any Purchaser Agent is authorized to record in its
records and/or on the related Note (as defined below) the principal amount of
the portion of the Loan evidenced thereby and each repayment thereof. The
amount so recorded shall be rebuttable presumptive evidence of the principal
amount owing and unpaid on the Loan, but any failure to make such a record or
any error in the record shall not affect Borrower's obligation to repay the
Loan. Borrower agrees to pay to Lender upon Lender's demand any amount
required to compensate Lender for any additional losses, costs or expenses
Lender may incur
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(including without limitation by reason of its funding through the Franchisee
Loan Program) as a result of any late payment, including any delay in payments
from the Disbursing Account.
6. Prepayments. Upon 45 days' prior written notice to Lender, Borrower
may prepay all or any part of the principal of, or interest on, any Note on an
interest payment date not more than once in any year. Any partial prepayment
of principal shall be in an amount of at least $25,000 and shall be applied to
the install ments due on such Note in the inverse order of maturity. Any
partial prepayments shall not relieve or diminish any scheduled subsequent
payments of principal or interest until all obligations of Borrower with
respect to this Agreement are paid in full. Upon acceleration or any
prepayment of any portion of the Loan, Borrower shall pay to Lender and its
assignees (i) all losses, costs or expenses reasonably accrued as a result of
such payment, including any loss (including loss of anticipated profits), cost
or expense incurred by reason of liquidation or redeployment of deposits or
other funds acquired to maintain such portion of the Loan, and (ii) all unpaid
Hedge Payments (as defined in the Program Rate Rider hereto and whether due or
to become due in the future) related to the amount prepaid, as determined by
Lender.
7. Conditions Precedent to Loan. The obligation of Lender to make the
Loan pursuant to Section 1 of this Agreement is subject to satisfaction of the
following conditions precedent (unless otherwise waived by Lender) on or
before the date of this Agreement, in each case in form and substance
satisfactory to Lender:
(a) Lender shall have received the Note(s) evidencing the Loan,
duly executed by Borrower, and the guaranty attached hereto shall have been
duly executed by the persons listed on Annex III hereto as guarantors (the
"Guarantors") (the attached guaranty is hereby incorporated into and made a
part of this Agreement).
(b) Lender shall have received the trust deed or mortgage (in
either case, the ("Mortgage"), duly recorded in all applicable filing and
recording offices granting Lender a valid first priority perfected lien on the
real property relating to the applicable Burger King Restaurants, together
with evidence of payment of all filing and recording taxes and fees.
(c) Lender shall have received complete copies of any lease
agreement covering the related real property, and such landlord consents,
issued or committed title insurance policies, surveys, environmental audits
and appraisals with respect to the related real property, as are satisfactory
to Lender and which also are for the benefit of Purchaser Agent.
(d) Lender shall have received lien searches and evidence of filing
of Uniform Commercial Code financing statements in satisfactory form in the
appropriate offices and such other action required by Lender to perfect and
protect the security interest granted under this Agreement and the other Loan
Documents, and evidence of satisfactory insurance covering the Collateral (as
defined below) and the naming of Lender and Purchaser Agent as additional
insured, mortgagee and loss payee thereon.
(e) Lender shall have received a complete copy of the Franchise
Agreement(s).
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(f) Lender shall have received the authorization(s) required under
Section 11(e) authorizing Lender to debit the Disbursing Account (as defined
below) for the payments of all amounts due under the Loan Documents in form
and content acceptable to Lender.
(g) Lender shall have received all fees payable pursuant to
Section 4.
(h) Lender shall have received such additional documents,
agreements and certificates as Lender shall reasonably require.
(i) The other conditions set forth in Annex III hereto, if any,
shall have been satisfied or waived by Lender.
8. Additional Conditions Precedent to Loan. The obligation of Lender to
make the Loan (or any portion thereof) pursuant to Section 1 of this Agreement
is subject to satisfaction of the following additional conditions precedent
(unless otherwise waived by Lender) on or before the date of the Loan:
(a) The representations set forth in this Agreement and the other
Loan Documents shall be true and correct on the date of making of the Loan (or
portion thereof) as if made on such date. No Default (as defined below) shall
exist or will result from making the Loan. No material adverse change
affecting Borrower or any Guarantor shall have occurred.
(b) Lender shall have received such additional documents,
agreements and certificates as Lender shall from time to time reasonably
require.
The borrowing of the Loan (or any portion thereof) by Borrower shall be deemed
to constitute a representation by Borrower to Lender that the conditions
precedent to the Loan set forth in clause (a) of this Section 8 are satisfied.
9. Grant of Security Interest in Collateral. (a) To secure the Secured
Obligations (as defined below), Borrower hereby grants to Lender a security
interest in all of Borrower's right, title and interest in the following
described property and rights, whether now existing or hereafter arising and
wherever located, in each case to the extent such property or rights are used
or useful in the operation of a Restaurant, arise out of the operation of a
Restaurant or otherwise relate to a Restaurant (the "Collateral"):
(i) The Franchise Agreement(s); and
(ii) All inventory, raw materials, work in process and
materials sold, used or consumed or to be sold, used or consumed in Borrower's
business; and
(iii) All equipment, including, but not limited to, all
present and future machinery, computer hardware and software, vehicles,
furniture, fixtures, office and record keeping equipment, parts and tools and
all other tangible personal property and all leases and licenses with respect
thereto; and
(iv) Each and every right to the payment of money, whether
such right to payment arises out of a sale, lease or other disposition of
goods or other property, out of a rendering of services,
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out of a loan, out of the overpayment of taxes or other liabilities or
otherwise arises under any contract or agreement, whether such right to
payment is or is not already earned by performance, and howsoever such right
to payment may be evidenced, together with all of the rights and interest
(including all liens and security interest) which Borrower may at any time
have by law or agreement against any account debtor or other obligor obligated
to make any such payment or against any of the property of such account debtor
or other obligor; all including but not limited to all present and future debt
instruments, chattel papers, accounts, loans and obligations receivable and
tax refunds; and
(v) All general intangibles of the Borrower, whether now owned
or hereafter acquired, including but not limited to, trademarks, trade
secrets, good will, trade names, customer lists, permits and franchises, and
the right to use Borrower's name; and
(vi) All certificates of title, instruments, documents,
chattel paper, deposits and credits (where necessary to perfect Lender's
security interest, a notation of Lender's security interest shall be made on
each Certificate of Title or other document, instrument or paper, as
appropriate); and
(vii) All other personal property of Borrower of every kind
and description which is now or hereafter comes into the possession of Lender
for any reason, including, but not limited to property delivered to Lender for
safekeeping, or for collection or exchange, and all dividends and
distributions on and other rights in connection with such property; and
(viii) In addition to any property generally described above,
the Collateral described on Annex IV hereto,
together with all parts, accessories, repairs, improvements and accessions
thereto and replacements and substitutions thereof; and proceeds (including,
but not limited to, insurance proceeds), products and issue therefrom now or
hereafter at any time made or acquired; and all books and records with respect
thereto and all equipment containing such books and records.
(b) Until terminated by Lender in writing, the security interest
granted under this Agreement secures all performance and payment obligations
of Borrower under the Loan Documents, all extensions, modifications and
renewals thereof, and all prior, contemporaneous and future debts owed to
Lender by Borrower, whether originally owned or transferred to Lender (the
"Secured Obligations"). The Loan and the other Secured Obligations may be
secured by prior or subsequent security documents notwithstanding that such
security is not indicated hereon.
(c) Borrower hereby irrevocably appoints Lender as Borrower's
attorney-in-fact (with power of substitution), which power of attorney is
coupled with an interest, with full authority in the place and name of
Borrower, Lender or otherwise, from time to time, to take any action and to
execute any instrument which Lender may deem necessary or advisable to
accomplish the purposes of the Loan Documents, including without limitation
with respect to perfection, collection, endorsement, filing claims, sale or
other disposition and insurance. Lender may, but shall not be obligated to,
perform any of Borrower's undertakings under this Agreement. Lender has no
duty to Borrower or any Guarantor as to any Collateral or the preservation of
any rights against other parties other than safe custody of Collateral in its
possession.
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(d) The Secured Obligations are also secured by (and the term
"Collateral" shall include any property and rights in which Lender is granted
a security interest in under) the mortgages delivered contemporaneously to
Lender herewith and/or other separate collateral documents (if any) described
in Annex IV hereto.
(e) To induce Lender to extend credit to Borrower hereunder,
Borrower has requested BKC to (i) consent to the creation of liens on the
Franchise Agreements, [and certain leases on which BKC is lessor (the
"Leases")] and (ii) provide to Lender information with respect to the
Franchise Agreements [the Leases], the Restaurants, Borrower and its
affiliates from time to time (including without limitation notice of default
by Borrower and its affiliates in the performance of their obligations under
any franchise agreements, leases or other contracts with BKC). BKC has
expressed its willingness to permit such liens and to provide such
information, subject to certain conditions, including without limitation (i)
Lender's agreement to provide notice to BKC of Defaults and to provide other
information to BKC from time to time with respect to the transactions
contemplated by the Loan Documents and the parties thereto, and (ii)
provisions with respect to Lender's exercise of its rights and remedies with
respect to the Collateral, and the timing of such exercise. Borrower agrees
that (x) BKC and Lender may give such notices, and exchange such information,
(y) BKC and Lender may from time to time confer with respect to each such
party's exercise of its respective rights and remedies, and (z) Lender's
exercise of its rights and remedies will be subject to the terms of the BKC
consent. BKC may rely on such agreement of Borrower as if it were a party
hereto.
10. Representations. To induce Lender to make the Loan, Borrower
represents and warrants to Lender as follows:
(a) Borrower (if a corporation or partnership) is duly organized
and in good standing under the laws of the State of its organization and
possesses all necessary licenses, permits, intellectual property rights,
franchises and qualifications (including without limitation in each
jurisdiction where Borrower does business) necessary to operate its business.
Borrower is an authorized franchisee under the Franchise Agreements and the
term of the Franchise Agreements extends beyond the final maturity of the
Loan. All BKC franchisees who are under common control with Borrower (or which
control Borrower or which are controlled by Borrower) are listed on Annex V
hereto (all such franchisees being collectively called ("Related Persons").
Neither Borrower nor any Related Person is in default of any obligations to
Lender, BKC or any of their respective affiliates.
(b) The entering into and performance by Borrower of the Loan
Documents do not violate or breach any provision of law, any constitutive
document of Borrower or any agreement or other obligation affecting Borrower.
The Loan Documents have been duly authorized and entered into by Borrower and
constitute the legal, valid and binding obligations of Borrower, enforceable
in accordance with their respective terms. The Loan Documents are not subject
to any dispute, offset, counterclaim or defense. Borrower acknowledges and
agrees that no claim or defense which Borrower may at any time have against
BKC or any affiliate of BKC (other than Lender) shall relieve Borrower of its
obligations under the Loan Documents, and Borrower will not assert any offset,
counterclaim or defense to its obligations under the Loan Documents as a
result of any such claim or defense against BKC or its affiliates. No approval
or other action of any governmental authority is required for the entering
into and performance by Borrower of the Loan Documents (including without
limitation the grant of Collateral).
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(c) All factual information provided by or on behalf of Borrower to
Lender is true and accurate as of the date on which it is dated or certified
and not incomplete by omitting to state any material facts necessary to make
such information not misleading. The financial statement described on Annex V
hereto delivered by Borrower to Lender is complete and correct, fairly
presents the financial condition of Borrower, and was prepared in accordance
with generally accepted accounting principles. Since the date of such
financial statement no material adverse change affecting the Borrower has
occurred. Borrower is not in default on any payment obligation or any material
contract. Borrower is not subject to any unusual or unduly burdensome
agreement or governmental order materially affecting it. There are no pending
or threatened claims or litigation which could materially adversely affect
Borrower.
(d) Borrower, the Collateral and each Restaurant site are in
compliance in all material respects with all applicable law (including, but
not limited to, environmental, zoning, health, safety, pension and labor
laws). Borrower has no material unfunded pension liability with respect to any
pension or employee benefit plan for employees of Borrower or any affiliate of
Borrower. There are no hazardous waste materials, toxic materials, hazardous
waste dump sites or toxic or chemical waste clean-up requirements currently on
or being conducted on any Collateral or the site of any Restaurant. Borrower
has no knowledge that any Collateral or the site of any Restaurant has ever
been the site of any contamination by any hazardous or toxic waste materials,
or used in a manner making such contamination more likely than not or the
subject of any environmental inquiry by any authority. Borrower has filed all
applicable tax returns that are required to be filed by it, and has paid or
has caused to be paid all taxes to the extent that such taxes have become due.
Such tax returns properly reflect the applicable tax liability of Borrower for
the periods covered thereby.
(e) After giving effect to the Loan, (i) the assets of Borrower, at
fair valuation, exceed its liabilities, (ii) the capital of Borrower is not
unreasonably small to conduct its business, and (iii) Borrower has not
incurred debts, and does not intend to incur debts, beyond its ability to pay
such debts as they mature.
(f) Borrower is the owner of the Collateral free from any security
interest or encumbrance and the Collateral is not covered by any financing
statement, except for (i) liens for current taxes not delinquent, (ii) the
security interest granted herein, and (iii) liens shown on Annex V hereto.
This Agreement creates a valid perfected first priority security interest in
the Collateral, and all actions necessary or desirable to perfect or protect
such security interest have been taken. The chief place of business and chief
executive office of Borrower is described on Annex V hereto. If Borrower is an
individual, Borrower's residence is described on Annex V hereto. The office
where Borrower keeps its records concerning the Collateral, and the
location(s) of the Collateral are listed on Annex V hereto. None of the
Collateral nor any site of any Restaurant is located in an area identified by
the Secretary of Housing and Urban Development or other appropriate authority
as an area having special flood hazards pursuant to the National Flood
Insurance Act of 1968, or the Flood Disaster Protection Act of 1973, as
amended, or any successor law.
(g) Each Restaurant site (and the Collateral, as applicable) is
free of material damage and waste and, to the best of Borrower's knowledge,
there are no material mechanical or structural defects in any Restaurant or
the Collateral. To the best of Borrower's knowledge, there is no proceeding
pending for the total or partial condemnation of or affecting any Restaurant.
Any easement agreement benefitting any Restaurant or the Collateral (i) is in
full force and effect, (ii) has no default thereunder
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with respect to any party thereto, (iii) contains no executory obligations
with respect to Borrower other than normal obligations standard in the
industry, and (iv) has priority over, or the recorded consent of, any
mortgagee or holder of any other prior lien on the burdened property.
11. Covenants. So long as any Secured Obligations remain unpaid or
unperformed or Lender has any commitment that could give rise to Secured
Obligations, Borrower agrees as follows:
(a) Borrower will maintain its existence in good standing under
applicable state law and regulations (if not an individual) and all necessary
licenses, permits, franchises and qualifications necessary to operate its
business. Borrower will comply with its organizational documents (if any) and
applicable law in all material respects. Borrower will maintain adequate books
and accounts in accordance with generally accepted accounting principles.
Borrower will pay state and local franchise fees, taxes (including intangible
taxes) and other liabilities when due. Borrower will maintain its status as a
franchisee under, and comply in all material respects with the terms of the
Franchise Agreement(s). Borrower will own or lease sufficient equipment for
the operation of its business. Borrower will maintain its business facilities
in good condition to permit its continuing operations. Borrower will comply
with all applicable environmental law (including without limitation all
reporting and notice requirements) and will remedy any release or spill of
hazardous substances on any Collateral or the site of any Restaurant in
accordance with applicable environmental law to the satisfaction of the
applicable authorities.
(b) Borrower will maintain insurance (including flood plain
insurance, if applicable) of the types and in amounts customarily carried by
businesses similar to Borrower's, and keep the Collateral insured against such
risks, with such limits, and upon such additional terms and conditions as
Lender may reasonably require. Lender shall be named as additional insured,
mortgagee and loss payee under said policies. Unless prohibited by applicable
law, Lender is hereby authorized (but not required or obligated) to act as
attorney in fact for Borrower in making and settling claims under said
policies and endorsing Borrower's name on any drafts or checks paying losses
under said policies. Borrower will not carry separate or additional insurance
concurrent in form or contributing, in the event of loss, with that required
under the Loan Documents unless endorsed in favor of Lender as loss payee,
mortgagee or additional insured, as applicable, and otherwise acceptable to
Lender in all respects. Borrower will deliver to Lender, upon request, proof
of payment and Certificates of Insurance for all Insurance required of
Borrower.
(c) Borrower will defend the Collateral against all claims and
demands at any time claiming the same or any interest therein. Borrower will
not sell or offer to sell or otherwise transfer or encumber the Collateral or
any interest therein without the prior written consent of Lender, unless (i)
said Collateral is the inventory of Borrower, or (ii) said Collateral is
equipment which is sold or traded in and the proceeds of such sale or trade in
are used to acquire replacement equipment of at least comparable value.
Borrower will immediately notify Lender in writing of any change of address
from that shown in this Agreement and also, upon demand, furnish to Lender
such further information and will execute and deliver to Lender such financing
statements, mortgages and other papers and will do all such acts and things as
Lender may at any time or from time
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to time reasonably request and/or as may be necessary or appropriate to
comply with or accomplish the covenants and agreements contained in the
Loan Documents, including without limitation establishing and maintaining
a valid perfected first priority security interest in the Collateral as
security for the Secured Obligations. Borrower will not permanently remove
any Collateral from the locations specified herein without prior written
notice to Lender of the location or locations to which Borrower desires to
remove the Collateral and written consent of Lender. Borrower will keep the
Collateral in good order and repair, will not waste or destroy the Collateral
or any part thereof, and will not use or permit anyone else to use the
Collateral in violation of any applicable law or policy of insurance thereon.
Borrower will permit Lender to examine and inspect the Collateral and
Borrower's books and records wherever located at any reasonable time or times.
(d) Borrower will furnish Lender with the financial and tax
information with respect to Borrower and the Guarantors specified in Annex VI
hereto, in each case at the times specified in such annex. Borrower will
notify Lender promptly (but in no event more than five days after the
occurrence of) (i) any Default, (ii) any change in name, address or
organizational structure of Borrower, (iii) any notification from an insurer
of its intention to materially alter or cancel any insurance policy Borrower
is required to maintain, any material alteration, termination or cancellation
of any insurance policy Borrower is required to maintain, and any uninsured or
partially uninsured loss or any threatened or pending litigation claim in
excess of $10,000, any other matter which might materially adversely affect
Borrower's or any Guarantor's financial condition or affairs, (iv) any matured
or unmatured default by Borrower or any Related Person under a BKC franchise
agreement, or receipt by Borrower or any Related Person of a notice of default
from BKC with respect to any BKC franchise agreement, (v) any release or spill
of hazardous substances on any Collateral or the site of any Restaurant and
any report to any authority of any release or spill of hazardous substances on
Collateral or the site of any Restaurant, and (vi) any condition or occurrence
that (A) results in noncompliance with any applicable environmental law, or
(B) could reasonably be expected to result in liability to Borrower under
environmental law, or (C) could reasonably be expected to cause any Collateral
or the site of any Restaurant to become subject to restrictions on ownership,
occupancy, use or transfer under environmental law. Borrower will furnish
Lender any other information reasonably requested by Lender from time to time.
(e) Borrower will maintain (i) an account ("Disbursing Account")
with a commercial bank that shall be a member of the automated clearing house
system (the "ACH System") and (ii) such authorizations as may be necessary to
enable Lender or its designated collecting agent to obtain payments due under
this Agreement from the Disbursing Account through the ACH System. Borrower
shall not terminate the Disbursing Account or such authorizations at any time
during the term of this Agreement without having provided 60 days' prior
written notice thereof to Lender, which notice shall specify the institution
at which a substitute Disbursing Account has been established and the account
number of such substitute Disbursing Account, and certifying that all
authorizations necessary to enable Lender or its collection agent to obtain
payments due under this Agreement from such substitute Disbursing Account
through the ACH System have been given and are then in effect. By not later
than the opening of business on each day that any payment shall be due under
this Agreement, Borrower shall cause an amount, in immediately available
funds, equal to such payment to be present in the Disbursing Account.
(f) Borrower will not create or permit to exist any security
interest in the Collateral except for (i) liens for current taxes not then due
and payable and not then delinquent and the security interest
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granted herein and in the other Loan Documents and/or (ii) purchase money
security interests, vehicle leases and loans, and leasehold interests under
capital leases, provided that such encumbrances, liens and security interests
(x) shall only attach to the assets so purchased, mortgaged or leased and (y)
shall not exceed a total aggregate amount of $100,000.00 at any time during the
term of the Loan.
(g) Borrower will maintain Fixed Charge Coverage Ratio(s) of greater
than 1.10:1, for each of (x) the Restaurants, and (y) Borrower's consolidated
restaurant operations. Fixed Charge Coverage Ratio(s) will be measured at the
end of each Borrower's fiscal quarter on a rolling twelve (12) month basis.
"Fixed Charge Coverage Ratio" means, with respect to any period, Cash Flow (as
hereinafter defined) divided by Total Fixed Charges (as hereinafter defined).
"Cash Flow" means, with respect to any period, the sum of: (i) net income from
the Restaurants before taxes for such period; plus, (ii) depreciation and
amortization used in calculating net income for such period; minus (iii)
compensation (advances, dividends, salaries, etc.) paid to Borrower's direct
or indirect owners for such period; minus (iv) principal payments made or
required to be made in respect of Borrower's long term debt obligations and
capital leases during such period; plus (v) Total Fixed Charges for such
period. "Total Fixed Charges" means, with respect to any period and each
Restaurant, the sum of: (i) rent, equipment rent, and Burger King(Registered
Trademark) advertising and royalties fees, paid or payable during such period;
plus (ii) the current portion of Borrower's long term debt and capital leases;
plus (iii) interest paid or payable by Borrower during such period.
(h) Borrower will not become a guarantor or surety of, or otherwise
become responsible in any manner with respect to, any undertaking of any other
person or entity, or make loans or advances to any other person or entity,
except for (i) the endorsement in the ordinary course of collection, of
instruments payable to Borrower's order, (ii) arrangements clearly reflected
in the financial statement described in Section 10(c) hereof, and (iii) other
advances so long as after making such advances Borrower is not in default of
the required minimum Fixed Charge Coverage Ratio under Section 11(g),
calculated on a pro forma basis as of the end of Borrower's last fiscal
quarter and as of the end of Borrower's next fiscal quarter.
(i) Borrower (if not an individual) will not be party to any merger
or consolidation, or acquire all or substantially all of the assets or stock
of, or any partnership or joint venture interest in, any other person or
entity; and Borrower will not sell, lease or otherwise transfer all or
substantially all of its assets.
(j) Borrower will not permit the stated term of any Franchise
Agreement relating to the Restaurants to end prior to the final maturity of
the Loan or agree to any amendment to any Franchisee Agreement that is
materially likely to impair Borrower's ability to repay the Loan; provided
that changes in the operations manual incorporated by reference in such
Franchise Agreement will not be considered an amendment for purposes of this
covenant.
(k) Borrower will pay all costs of preparation of the Loan
Documents as set forth in Annex II and all costs of enforcement or collection,
including but not limited to reasonable attorneys' fees if Lender is the
prevailing party ("prevailing party" shall include a party who receives
substantially the relief desired whether by dismissal, summary judgement,
judgement, or otherwise) at any time paid or incurred by Lender on account of
such preparation, enforcement or collection, whether or not suit is filed with
respect thereto. Borrower will pay all stamp, documentary, recording and other
taxes and fees
10
payable in connection with the Loan Documents and save Lender harmless
from and against all liabilities with respect to such taxes and any late
payment or nonpayment of such taxes. To the fullest extent permitted by law,
Borrower hereby agrees to indemnify Lender and each Purchaser and Credit
Enhancer on an after-tax basis for any and all taxes arising out of the Loan
and the Collateral and the holding of any rights therein, other than income
taxes and franchise taxes imposed by the jurisdiction under which Lender or
such other entity, as the case may be, is qualified to do business or has an
office or any political subdivision thereof. To the fullest extent permitted
by law, Borrower hereby agrees to indemnify and defend Lender, each Purchaser,
each Credit Enhancer and each of their respective officers, directors,
stockholders, employees, attorneys, agents, trustees and representatives
(each, an "Indemnitee") for any costs, losses, expenses, liabilities or
damages that such party may incur by reason of the financing provided under
this Agreement, any Collateral or any transaction related hereto (including
without limitation any liability imposed under environmental law), other than
those resulting solely from such Indemnitee's gross negligence or willful
misconduct. The provisions of this paragraph shall survive termination of this
Agreement.
12. Default. Borrower shall be in default upon the occurrence of any one
or more of any of the following events (each an "Event of Default"; a
"Default" is any Event of Default or any event, which with the lapse of time
or the giving of notice or both would be an Event of Default):
(a) Borrower shall fail to pay, when due, any amount required
hereunder, and such failure shall continue for five (5) days after notice of
such failure by Lender; or Borrower shall fail to pay, when due (but subject
to any applicable grace period) any other indebtedness of Borrower to Lender
or any third parties; or
(b) Any warranty or representation made by Borrower or any
Guarantor shall prove to be false or misleading in any respect; or
(c) Borrower or any Guarantor shall liquidate, merge, dissolve,
terminate its existence, suspend business operations, die (if an individual),
generally wind up or readjust its debt, have a receiver or similar official
appointed for all or any part of its property, make an assignment for the
benefit of its creditors, admit in writing its inability to pay its debts when
due, generally fail to pay its obligations when due, or have any bankruptcy or
insolvency proceeding with respect to it or a substantial part of its property
instituted by or against it, or take any action to authorize any of the
foregoing; or
(d) Borrower or any Guarantor fails to perform or meet any
covenants or obligations under any Loan Document or any other agreement
intended to secure the repayment of the Secured Obligations, and such failure
shall continue for 30 days after notice from Lender of such failure; or
(e) Any material provision of any Loan Document shall for any reason
cease to be valid and binding on any party thereto and such invalidity continues
for ten days, or any Guarantor revokes or seeks to revoke its guaranty or this
Agreement and the other Loan Documents shall cease or fail to create a valid
perfected first priority security interest in the Collateral; or
(f) Borrower or a Related Person shall fail to perform any
obligation under any BKC franchise agreement, and such failure shall not have
been cured on or before the first date on which BKC may terminate such BKC
franchise agreement by reason of such failure; or any BKC franchise agreement
11
of Borrower or a Related Person is terminated or canceled; or Borrower or any
Related Person shall default in the performance of its obligations to Lender
under any loan or credit agreement (other than this Agreement), subject to
applicable grace periods; or
(g) Borrower shall fail to perform its obligations under any lease
or other material contract relating to the Restaurants (such as a common area
maintenance agreement), and such failure shall continue for thirty (30) days
after notice from Lender; or
(h) Enforcement shall have commenced of any judgment or final order
for the payment of money in an amount of $25,000 or more against Borrower or
any Guarantor without a stay of enforcement for a period of ten days, unless
contested in good faith by appropriate proceedings with adequate reserves set
aside therefor satisfactory to Lender; or
(i) Borrower or any Guarantor shall at any time suffer a material
adverse change in its business, condition (financial or otherwise),
operations, performance, properties or prospects.
13. Remedies. If any Event of Default occurs under Section 12(c), the
commitment of Lender to make the Loan shall terminate and the entire unpaid
balance of principal and interest on the Loan shall be immediately due and
payable without notice or demand. If any other Event of Default occurs, Lender
may, at its option, declare its commitment to make any Loan terminated and/or
the entire unpaid balance of principal and interest on the Loan immediately
due and payable without notice or demand at any time after such Event of
Default. If any Event of Default exists under this Agreement, Lender shall
also have all the rights under the Uniform Commercial Code to realize on the
Collateral in addition and cumulative with any other rights granted under the
Loan Documents or otherwise. These rights include without limitation the right
to demand payment from any Guarantor, to take possession of Collateral, to
sell Collateral at public or private sales and on such terms as Lender deems
advisable (and to be the purchaser in such sale), and to require Borrower to
make Collateral available to Lender at a place to be designated by Lender
which is reasonably convenient to both parties. Borrower and Lender agree that
as to any reasonable notice requirement under the Uniform Commercial Code,
that such reasonable notice requirements shall consist of five business days'
written notice mailed to the last known address of Borrower known to Lender.
Expenses of retaking, holding, preparing for sale, selling or the like will
first be paid from the proceeds before the balance will be applied toward the
indebtedness.
14. Setoff. Lender may at any time before or after Default exercise its
right to set-off all or any portion of the indebtedness evidenced hereby
against any liability or indebtedness of Lender to Borrower (whether owned by
the Borrower alone or in conjunction with any other person or entity, provided
that Borrower has a beneficial interest therein) without prior notice to
Borrower.
15. Waiver. Borrower's obligation to pay the Secured Obligations is
absolute, unconditional and irrevocable under all circumstances whatsoever.
Presentment, protest, notice of non-payment (except for such notice as
contemplated under section 12(a) above) and dishonor of this Agreement are
hereby waived. Borrower waives any claim or defense based on Lender's choice
of remedies, Lender's failure to perfect or protect its interest in any
Collateral or any requirement that Lender pursue any remedy or party instead
of or before another. Lender may release any party or security, make future
loans to any party or contractually change its relationship to or the
obligation of any party without waiving or affecting the obligation of any
other party to this Agreement. A party to this Agreement is any maker,
12
surety, endorser or guarantor. Waiver by Lender at any time or any delay
by Lender in the exercise of any right conferred by this Agreement or any
other Loan Document will not affect Lender's future exercise of said right or
any other. Borrower agrees that nothing shall discharge or satisfy the
liability of Borrower hereunder except the full payment and performance of all
Secured Obligations. Lender shall not be deemed to have received a payment under
the Loan if Lender is required to turn over any payment due to the actions or
inactions of Borrower. Any and all obligations of one Borrower or Guarantor to
another Borrower or Guarantor are hereby subordinated to the full payment and
performance of the Secured Obligations.
16. Governing Law; Jurisdiction. This Agreement and the other Loan
Documents will be governed by the internal laws of the State of New York,
except that the law of the jurisdiction in which Collateral is located may
govern the validity, perfection and enforcement of the security interest
granted hereunder in such Collateral. The fact that any part of any Loan
Document may not be enforced will not affect the enforceability of the rest of
such Loan Document. Borrower irrevocably submits to the nonexclusive
jurisdiction of any Federal or state court located in the State of New York or
Florida with respect to any proceedings relating to the Loan Documents, and
irrevocably agrees not to assert any objection to venue in such court or any
claim of inconvenient forum. Borrower irrevocably consents to service of
process by mailing of such process by registered or certified mail, postage
prepaid, at its address set forth below.
17. Assignment. BORROWER CONSENTS TO THE ASSIGNMENT BY LENDER OF ALL OR
ANY PORTION OF ITS RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS,
INCLUDING, BUT NOT LIMITED TO, ASSIGNMENT(S) TO PURCHASERS AND CREDIT
ENHANCERS MADE IN CONNECTION WITH THE FRANCHISEE LOAN PROGRAM. BORROWER
ACKNOWLEDGES AND AGREES THAT ANY AND ALL RIGHTS OF LENDER UNDER THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS MAY BE EXERCISED FROM TIME TO TIME BY ANY
ASSIGNEE OR SUCCESSOR OF LENDER, INCLUDING, BUT NOT LIMITED TO, ANY PURCHASER,
ANY PURCHASER AGENT, ANY CREDIT ENHANCER OR ANY AGENT, TRUSTEE OR OTHER
REPRESENTATIVE THEREFOR, INCLUDING CITICORP NORTH AMERICA, INC., AS SERVICING
AGENT. BORROWER FURTHER ACKNOWLEDGES AND AGREES THAT LENDER MAY PROVIDE TO ANY
SUCH ASSIGNEE OR SUCCESSOR ANY AND ALL INFORMATION IN LENDER'S POSSESSION WITH
REGARD TO BORROWER, ANY GUARANTOR OR OWNER OF BORROWER, OR ANY TRANSACTION
CONTEMPLATED BY THE LOAN DOCUMENTS. Borrower may not assign its rights and
obligations under the Loan Documents without Lender's prior written consent.
Lender may grant participations in its rights under the Loan Documents.
18. Successors; Joint and Several Liability; Time is of the Essence;
Independent Parties. This Agreement and the other Loan Documents shall be
binding upon each Borrower and the Borrower's heirs, executors,
administrators, successors and assigns. If there is more than one Borrower,
the liability of each Borrower for the payment and performance of each
obligation under the Loan Documents is joint and several. For the payment of
any Secured Obligations, time is of the essence. Lender and Borrower are not
joint venturers, partners or agents of the other. Lender shall not be liable
for any of the debts or other liabilities contracted by or due from Borrower
and Borrower shall hold Lender free and harmless therefrom.
13
19. Notices. All notices and other communications relating to this
Agreement shall be made in writing and delivered to Borrower at its chief
executive office (or residence) as represented by Borrower herein and
delivered to Lender c/o Citicorp North America, 0000 Xxxxxxxxx Xxxxx, 00xx
Xxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Program Manager, Phone
800/000-0000, Facsimile (714) 250- 6990, or to either party at such other
address as it gives written notice of to the other party. Any such notice
shall be deemed effective (i) when delivered, if delivered personally or by
receipted-for telex or facsimile transmission, (ii) two days after delivered
(properly addressed and all fees paid) for overnight delivery service to a
courier which regularly provides such service and regularly obtains executed
receipts evidencing delivery, or (iii) five days after deposited (properly
addressed and stamped for certified mail delivery) in the United States mail.
20. Waiver of Trial by Jury. EXCEPT AS MAY BE PROHIBITED BY LAW,
BORROWER AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION NOW EXISTING OR HEREAFTER ARISING RELATING TO THIS AGREEMENT, THE LOAN,
THE COLLATERAL, ANY OTHER LOAN DOCUMENT, THE FRANCHISEE LOAN PROGRAM, ANY
DEALINGS OR TRANSACTIONS RELATED THERETO, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. IF
THE SUBJECT MATTER OF ANY SUCH LITIGATION IS ONE IN WHICH THE WAIVER OF A JURY
TRIAL IS PROHIBITED, NEITHER BORROWER NOR LENDER SHALL PRESENT A
NON-COMPULSORY COUNTERCLAIM IN SUCH LITIGATION OR ANY CLAIM ARISING OUT OF OR
IN CONNECTION WITH ANY OF THE FOREGOING. FURTHERMORE, NEITHER LENDER NOR
BORROWER SHALL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS
NOT BEEN WAIVED. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER'S
EXTENSION OF CREDIT TO THE BORROWER.
21. Final Agreement; Amendments; Construction. THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT OF BORROWER AND LENDER AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BORROWER AND
LENDER. None of the terms and provisions of this Agreement or any other Loan
Document may be amended, waived or otherwise modified except in writing by the
party to be bound thereby. This Agreement may be executed in any number of
counterparts, all of which taken together will constitute one instrument.
Captions used in any Loan Document are for identification only and are not
part of such Loan Document. Accounting terms not specifically defined in any
Loan Document are to be construed in accordance with generally accepted
accounting principles consistently applied.
22. Severability. If the Lender chooses to waive any covenant,
paragraph, or provision of this Agreement, or if any covenant, paragraph, or
provision of this Agreement is construed by a court of competent jurisdiction
to be invalid or unenforceable, it shall not affect the applicability,
validity, or enforceability of the remaining covenants, paragraphs, or
provisions.
23. Additional Provisions. This Agreement is also subject to the
additional provisions, if any, set forth on Annex VII hereto.
14
24. Filing. A carbon, photographic or other reproduction of this
Agreement may be used and shall be as effective for filing as the original.
Description of Real Estate if above Collateral includes fixtures:
See Annex IV hereto.
15
BORROWER: WITNESSES:
AMERIKING COLORADO CORPORATION I,
a Delaware corporation
By: ___________________________/SEAL/ By: ___________________________/SEAL/
Name: _______________________________ Name: _______________________________
Title: ______________________________
By: ___________________________/SEAL/ By: ___________________________/SEAL/
Name: _______________________________ Name: _______________________________
Title: ______________________________
Address:
Ameriking Colorado Corporation I
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
ENDORSEMENT
-----------
PAYABLE TO THE ORDER OF CITICORP NORTH AMERICA, INC., AS INVESTOR AGENT,
WITHOUT RECOURSE, EXCEPT AS PROVIDED IN THE FRANCHISE LOAN PURCHASE AND SALE
AGREEMENT BETWEEN LENDER, THE INVESTOR AGENT AND CERTAIN OTHER PARTIES
FRANCHISE ACCEPTANCE CORPORATION LIMITED
By: /s/ Xxx XxXxxxxx /SEAL/
----------------------------------
Name: Xxx XxXxxxxx
Title: Director
By: /s/ Xxxxxxx X. Xxxxxxxx /SEAL/
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
4
If checked, this Agreement is to be filed (for record) in the real estate
records.
BORROWER: WITNESSES:
AMERIKING COLORADO CORPORATION I,
a Delaware corporation
By: /s/ Xxx Xxxxx /SEAL/
By: /s/ Xxxxxxxx X. Xxxx /SEAL/ ---------------------------
------------------------------- Name: Xxx Xxxxx
-------------------------
Name: Xxxxxxxx X. Xxxx
Title: CEO
By: /s/ Xxxx Xxxxxx /SEAL/ By: /s/ Xxxxx Xxxxx /SEAL/
------------------------------- ---------------------------
Name: Xxxx Xxxxxx Name: Xxxxx Xxxxx
Title: CEO -------------------------
Address:
Ameriking Colorado Corporation I
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
Federal Employer Identification Number: 00-000-0000
FRANCHISE ACCEPTANCE CORPORATION LIMITED
By: _______________________________________________________ /SEAL/
Title: ___________________________________________________________
By: _______________________________________________________ /SEAL/
Title: ___________________________________________________________
Address: Franchise Acceptance Corporation Limited
c/o Grand Metropolitan Finance Ireland
La Touche House
International Financial Services Centre
Dublin 1
Ireland
16
INDEX OF DEFINED TERMS
ACH System.............................................................9
Agreement..............................................................1
Applicable Margin......................................................2
BKC....................................................................1
Borrower...............................................................1
Cash Flow.............................................................10
Collateral.............................................................4
Credit Enhancers.......................................................1
Default...............................................................11
Disbursing Account.....................................................9
Event of Default......................................................11
Fixed Charge Coverage Ratio...........................................10
Franchise Agreement....................................................1
Franchisee Loan Program................................................1
Guarantors.............................................................3
Indemnitee............................................................11
Lender.................................................................1
Loan...................................................................1
Loan Documents.........................................................2
Mortgage...............................................................3
Note...................................................................1
Program Rate...........................................................2
Purchaser Agent........................................................1
Purchasers.............................................................1
Related Persons........................................................6
Restaurants............................................................1
Secured Obligations....................................................5
Total Fixed Charges...................................................10
17
SCHEDULE, ANNEXES, RIDERS AND EXHIBITS
Schedule 1 - Loans
Annex I - Restaurants and Business Purpose(s) of Loan(s)
Annex II - Fees
Annex III - Additional Conditions Precedent
Annex IV - Additional Collateral; Separate Collateral Documents;
Description of Real Estate
Annex V - Related Persons; Borrower's Financial Statement; Borrower's
Chief Place of Business and Chief Executive Office; Offices
Where Borrower Keeps Records Concerning Collateral; Locations
of Collateral; Exceptions to Lien Representation
Annex VI - Financial and Tax Reporting Requirements
Annex VII - Additional Provisions
Program Rate Rider
Management and Accounting Agreement Rider
Exhibit A - Form of Note
Exhibit B - [Intentionally Omitted]
Addendum
18
SCHEDULE 1
to Loan and Security Agreement dated ____________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
LOANS
Applicable To Be Disbursed Number of
Principal Amount Margin on or before Disbursements
---------------- ----------- ---------------------- --------------
$1,865,000.00 See Note(s) See Note(s)) 1
for Applicable for availability
Margin of funding
S-1
ANNEX I
to Loan and Security Agreement dated _______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
RESTAURANTS
BK #2942 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx
BK #4361 000 Xxxx 00xx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #4690 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #7885 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #9334 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx
BUSINESS PURPOSE(S) OF LOAN(S)
The proceeds of the Loans will be used only for the following business
purpose(s) checked below:
____ acquisition of sites for one or more Restaurants approved by BKC,
____ upgrades or remodeling of Restaurants,
__X_ purchase of a Restaurant from BKC or another BKC franchisee,
__X_ in connection with the development of one or more Restaurants,
refinancing of an existing loan made to the Borrower,
AI-1
ANNEX II
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
FEES
Amount Type Payment Date
------ ---- -------------
$ 1,500.00 Documentation Fee at closing
$ 550.00 Environmental Fee at closing
$ 1,500.00 Title, Search and
Recording Fees at closing
$19,254.32 Legal Expenses at closing
AII-1
ANNEX III
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
ADDITIONAL CONDITIONS PRECEDENT
Borrower shall provide Lender, in a form reasonably acceptable to Lender,
evidence of the following documents (as applicable)
(a) [Intentionally Omitted];
(b) [Intentionally Omitted];
(c) [Intentionally Omitted];
(d) [Intentionally Omitted];
(e) [Intentionally Omitted];
(f) [Intentionally Omitted];
(g) [Intentionally Omitted];
(h) [Intentionally Omitted];
(i) Management and Accounting Agreement;
(j) Landlord Consent;
(k) Borrower's Certificate of Good Standing from both the State of
Colorado and the State of Delaware;
(l) FF & E Inventory;
(m) Secretary's Certificate relating to Incumbency and Corporate
Resolutions (Borrower); and
(n) [Intentionally Omitted].
AIII-1
ANNEX IV
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
ADDITIONAL COLLATERAL
None.
SEPARATE COLLATERAL DOCUMENTS
(a) four (4) UCC-1 Financing Statements with attachment, to be filed
with the clerk and recorder of Boulder, Larimer and Weld Counties,
and the Colorado Secretary of State, respectively.
(b) One (1) Conditional Assignment of Franchise Agreements.
(c) One (1) Conditional Assignment of Leases.
(d) Three (3) Leasehold Deed of Trust, Assignment of Leases and Rents,
Security Agreement and Financing Statement to be filed with the clerk
and recorder of Boulder, Larimer and Weld Counties, respectively.
DESCRIPTION OF REAL ESTATE
1. Owner: White II Investments, LLC, a Colorado limited liability company
Property: Xxx Xxx, Xxxxx Xxx, Xxx Xxxxxx Xxxxxxx, Xxxxxx of Larimer,
State of Colorado, known and identified as 000 Xxxx 00xx Xxxxxx,
Xxxxxxxx, Xxxxxxxx.
2. Owner: White III Investments, LLC, a Colorado limited liability company
Property: Xxx 0, Xxxx Xxxxxx Xxxxxx Xxxxxxxxxxx, Xxxxxx X, Xxxx 0 and 7,
County of Boulder, State of Colorado, known and identified as 0000 Xxxxx
Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx.
3. Owner: White I Investments, LLC, a Colorado limited liability company
Property: Xxx 0 Xxxxxxxx Xxxxxxxxxxx, Xxxx xx Xxxxxxxx, Xxxxxx of
Larimer, State of Colorado, known and identified as 0000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx.
4. Owner: Longs Peak BK, a Colorado general partnership
Property: Xxx 00X, Xxxx Xxxxx Xxxx Subdivision Replat "A", County of
Boulder, State of Colorado, known and identified as 0000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx.
5. Owner: The Estate of Xxxx X. X. Xxxxxxx
Property: Legal description attached hereto as EXHIBIT A, for the
property commonly referred to as 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx
AIV-1
EXHIBIT A TO ANNEX IV
(Legal Description of 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx)
PARCEL A
That part of the Southwest 1/4 of Section 17, Township 5 North, Range 65 West
of the 6th Principal Meridian, Greeley, Weld County, Colorado, more
particularly described as follows:
Commencing at the Southwest corner of Section 17, Township 5 North, Range 65
West of the 6th Principal Meridian, thence North 00'33'00" West, 297.04 feet
along the West line of Section 17, said line also being the center line of 11th
Avenue; thence North 89'27'00" East, 50.00 feet to the True Point of Beginning,
said point being on the Eastern Right-of-Way of 11th Avenue; thence North
00'33'00" West, along said Eastern Right-of-Way of 11th Avenue, 70.00 feet;
thence North 89'27'00" East, 175.00 feet; thence South 00'33'00" East, 70.00
feet; thence South 89'27'00" West, 175.00 feet to the True Point of Beginning.
PARCEL B - An Exclusive Sign Easement over the following:
That part of the Southwest 1/4 of Section 17, Township 5 North, Range 65 West
of the 6th Principal Meridian, Greeley, Weld County, Colorado, more
particularly described as follows:
Commencing at the Southwest corner of Section 17, Township 5 North, Range 65
West of the 6th Principal Meridian; North 00'33'00" West, 117.70 feet along the
West line of Section 17, said line also being the center line of 11th Avenue;
thence North 89'27'00" East, 50.00 feet to the True Point of Beginning, said
point being the intersection of Easterly Right-of-Way line of said 00xx Xxxxxx
and the Northerly Right-of-Way Line of U.S. 34 By-Pass; thence along said
Easterly Right-of-Way line of 11th Avenue North 00'33'00" West, 20.00 feet;
thence North 89'27'00' East, 15.00 feet; thence South 00'33'00" East, 21.88
feet to a point on the aforementioned Northerly Right-of-Way line of U.S. 34
By-Pass; thence along said Northerly Right-of-Way line of X.X. 00 Xx-Xxxx
Xxxxx 00'00'00" West, 15.12 feet to the True Point of Beginning.
PARCEL C - An Exclusive Utility Easement over the following:
That part of the Southwest 1/4 of Section 17, Township 5 North, Range 65 West
of the 6th Principal Meridian, Greeley, Weld County, Colorado, more
particularly described as follows:
Commencing at the Southwest corner of Section 17, Township 5 North, Range 65
West of the 6th Principal Meridian; North 00'33'00" West 297.04 feet along the
West line of Section 17, said line also being the center line of 11th Avenue;
thence North 89'27'00" East, 50.00 feet to the True Point of Beginning, said
point being on the Eastern Right-of-Way of 11th Avenue; thence continuing
North 89'27'00" East, 10.00 feet; thence South 00'33'00" East, 159.34 feet;
thence South 89'27'00' West, 10.00 feet to a point on the aforementioned
Easterly Right-of-Way line of 00xx Xxxxxx; thence along said Easterly
Right-of-Way line North 00'33'00" West, 159.34 feet to the True Point of
Beginning.
EA-IV-1
PARCEL D - A non-exclusive easement for ingress, egress, parking and utilities
over the unconstructed portions of the following:
A tract of land located in the Southwest Quarter (SWI/4) of Section 17,
Township 5 North, Range 65 West of the Sixth Principal Meridian, Weld County,
Colorado, and being more particularly described as follows:
Commencing at the Southwest corner of said Section 17, and considering the
West line of said Section 17 to bear North 00'33'00" West and with all other
bearings contained herein being relative thereto, thence North 00'33'00" West,
along the West line of said Section 17 and also the centerline of 11th Avenue,
City of Greeley, 117.70 feet; thence North 89'27'00" East, 50.00 feet to the
intersection of the East right-of-way line of said 00xx Xxxxxx and the North
right-of-way line of U.S. Highway No. 34 Bypass, said intersection being the
True Point of Beginning, thence North 00'33'00" West, along the East
right-of-way line of said 11th Avenue, 861.76 feet; thence North 89'57'30"
East, 214.7 feet; thence North 00'33'00" West, 244 feet to the South
right-of-way line of 00xx Xxxxxx, Xxxx of Greeley; thence North 89'57'30"
East, along the South right-of-way line of said 00xx Xxxxxx 790.3 feet to a
point on the West right-of-way line of 9th Avenue, City of Greeley; thence
South 00'01'10" East, along the West right-of-way line of said 0xx Xxxxxx 699.8
feet; thence South 89'59'30" West, 190.5 feet; thence South 00'01'10" East, 300
feet, thence North 89'57'30" East, 190.5 feet to the West right-of-way line of
said 0xx Xxxxxx; thence South 00'01'10" East, along said West right-of-way line,
217.33 feet to the North right-of-way line of U.S. Highway No. 34 Bypass; thence
along the North right-of-way of said U.S. Highway No. 34 Bypass by the following
three (3) courses and distances:
South 89'30'25" West, 305 feet;
North 73'09'30" West, 209.3 feet;
North 82'10'00" West, 482.2 feet to the True Point of Beginning, LESS AND
EXCEPT Parcels A, B and C above.
EA-IV-2
ANNEX V
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
RELATED PERSONS: NRE Holdings, Inc. and National Restaurant Enterprises, Inc.
BORROWER'S FINANCIAL STATEMENT: Proforma Financial Statements as submitted with
the loan application dated July 26, 1995.
BORROWER'S CHIEF EXECUTIVE OFFICE:
Ameriking Colorado Corporation I
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
BORROWER'S CHIEF PLACE OF BUSINESS:
Ameriking Colorado Corporation I
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx
OFFICE(S) WHERE BORROWER KEEPS RECORDS CONCERNING COLLATERAL:
Ameriking Colorado Corporation I
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
LOCATIONS OF COLLATERAL:
BK #2941 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx
BK #4361 000 Xxxx 00xx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #4690 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #7885 0000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
BK #9334 0000 Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxx
EXCEPTIONS TO LIEN REPRESENTATION: NONE.
AV-1
ANNEX VI
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
FINANCIAL AND TAX REPORTING REQUIREMENTS
Borrower shall furnish, or cause to be furnished, to Lender each of the
following:
(a) Quarterly Reports. As soon as available and in any event within
thirty-one (31) days after the end of each of the first three quarters of each
fiscal year of Borrower, balance sheets of Borrower as of such quarter and
statements of income and retained earnings of Borrower for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, certified by a representative of Borrower acceptable to Lender.
(b) Compliance Certificate. As soon as available and in any event within
thirty-one (31) days after the end of each of the second quarter and the
fourth quarter of each fiscal year of Borrower, a compliance certificate
signed by a representative of Borrower acceptable to Lender indicating that as
of the end of such quarter Borrower was in compliance with each of the
covenants contained in the Loan Documents.
(c) Annual Reports. As soon as available and in any event within 120
days after the end of each fiscal year of Borrower, (i) a copy of the annual
report for such year for Borrower containing financial statements for such
year certified in a manner acceptable to Lender by a representative of
Borrower acceptable to Lender, (ii) personal statements of each Guarantor, if
such Guarantor is an individual, or balance sheets and statements of income
and retained earnings, if such Guarantor is not an individual, for the most
recent fiscal year of such Guarantor certified in a manner acceptable to
Lender by such Guarantor or a representative of such Guarantor acceptable to
Lender, and (iii) annual financial projections for Borrower's following fiscal
year.
(d) Tax Returns. Within 30 days of filing any tax return for Borrower or
any Guarantor with the Internal Revenue Service, copies of such returns.
AVI-1
ANNEX VII
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
ADDITIONAL PROVISIONS
1. [Intentionally Omitted]
2. Borrower hereby agrees that it will, at any time and from time to time
after the closing of the Loan, upon the request of Lender, do, execute,
acknowledge and deliver or will cause to be done, executed, acknowledged and
delivered, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be reasonably required for the
effective assigning, transferring, granting, conveying, assuring and
confirming to Lender, its heirs, legal representatives or assigns or for
securing, aiding and assisting in the collection and reducing to possession,
any and all of the assets or property to be assigned to it as provided herein,
at the sole cost and expenses of Borrower.
3. [Intentionally Omitted]
4. The provisions of Section 7(b) shall be amended to read in its
entirety:
"Lender shall have received the Leasehold Deed of Trust, Assignment
of Leases and Rents, Security Agreement and Financing Statement duly
executed by Borrower in order to grant Lender a valid first priority
perfected lien on the leasehold interests to the applicable Burger
King Restaurants as of the date of this Agreement."
5. Lender and Borrower hereby acknowledge and agree that there is no
Guarantor(s), as that term is defined in Section 7(a) of the Agreement.
AVII-1
PROGRAM RATE RIDER
(To Be Distributed Separately)
to Loan and Security Agreement dated , 1995
(as amended or modified from time to time, the "Agreement")
between AMERIKING COLORADO CORPORATION I, a Delaware corporation ("Borrower"),
and
FRANCHISE ACCEPTANCE CORPORATION LIMITED ("Lender")
Part I of this Rider describes the method by which Lender determines the
Program Rate from time to time. Capitalized terms used but not defined in Part
I have the meanings set forth in the Agreement or in Part II of this Rider.
Part I. Determination of Program Rate
--------------------------------------
During the term of the Agreement, Lender may use a variety of funding
sources ("Funding Sources") in connection with the Franchisee Loan Program.
These include:
A. Commercial Paper. Lender may sell or grant interests in Franchisee
Loans to a Purchaser that funds itself (wholly or partially) by issuing
commercial paper. Lender may also issue its own commercial paper. Lender or a
Purchaser, in each case to the extent it provides funds (directly or
indirectly) for the Franchisee Loan Program by issuing commercial paper, is
herein called a "CP Issuer". Lender's cost of using Funding Sources described
in this paragraph will be based on the weighted average of the CP Rates of the
applicable CP Issuers.
B. Term Notes. Lender may sell or grant interests in Franchisee Loans to
a Purchaser that funds itself (wholly or partially) by issuing term notes.
Lender may also issue its own term notes. Lender or a Purchaser or any
assignee of either, in each case to the extent it provides funds (directly or
indirectly) for the Franchisee Loan Program by issuing term notes, is herein
called an "MTN Issuer". Lender's cost of using Funding Sources described in
this paragraph will be based on the weighted average of the MTN Fixed Rates
and/or the MTN Floating Rates of the applicable MTN Issuers.
C. Other Funding Sources. Lender may sell or grant interests in
Franchisee Loans to a Purchaser that funds itself (wholly or partially) by
borrowing loans or obtaining other credit from banks, insurance companies or
other credit providers (such banks, insurance companies or other credit
providers or any assignees of the foregoing being herein called "Other Credit
Providers") or by selling assets (including Franchisee Loans or interests
therein) to Other Credit Providers. Lender may also borrow or obtain other
credit directly from Other Credit Providers or sell assets (including
Franchisee Loans or interests therein) to Other Credit Providers. Lender's
cost of using the Funding Sources described in this paragraph will be based on
the weighted average of the Alternate Base Rate and/or the OCP Rates of the
applicable Other Credit Providers.
The initial Funding Sources for the Franchisee Loan Program will be
Corporate Asset Funding Company, Inc. ("CAFCO"), Corporate Receivables
Corporation ("CRC") and Other Credit Providers that provide liquidity and
credit support for the commercial paper programs of CAFCO and CRC. Lender may
change the Funding Sources for the Franchisee Loan Program at any time.
Lender's current
1
preferred Funding Sources are the issuance of commercial paper and term notes
(rather than obtaining credit, directly or indirectly, from Other Credit
Providers) and Lender will rely on such Funding Sources to the extent
reasonably practicable, taking into account requirements of Lender's
contracts with Purchasers and Other Credit Providers, market conditions,
rating agency concerns and the interests of Lender in connection with the
Franchisee Loan Program as a whole.
In connection with any Funding Source, Lender will be required to pay
certain fees ("Fees") including without limitation program fees to Purchasers,
commercial paper and term note placement agent or dealer fees, and commitment
or non-use fees to Other Credit Providers. In addition, under contracts
relating to Funding Sources, Purchasers and Other Credit Providers may be
entitled to recover certain costs and expenses ("Costs"), including increased
costs due to a change in law (such as changes in tax law and bank or insurance
company regulation) or otherwise, and costs and expenses relating to
redeployment of funds, administrative and enforcement expenses and
indemnities. Consistent with market practice, Lender, Purchasers and Other
Credit Providers reserve the right to renegotiate, from time to time, Fees and
the circumstances under which Costs will be recovered. Lender will pay
Borrower's proportionate share of the Fees currently applicable to the
Franchisee Loan Program from the "Applicable Margin" specified in the Loan
Documents. However, if the amount of Fees required to be paid by Lender in
connection with the Franchisee Loan Program increases, or if Purchasers or
Other Credit Providers are entitled to recover Costs, Borrower's proportionate
share of such increases or Costs may be included in the Program Rate payable
by Borrower by adding an "Increased Cost Factor".
Lender will hedge its interest rate exposure in connection with the Loan
by entering into an interest rate cap or collar or another interest rate
hedging arrangements (the "Hedge"). The term of the Hedge will be at least
half the term of the Loan. The Hedge may also relate to loans made by Lender
to other franchisees in the Franchisee Loan Program. At the election of
Lender, Borrower will either pay its proportionate share of the cost of the
Hedge at the closing of the Loan or pay such share in installments ("Hedge
Payments") over the term of the Loan. If Lender receives payments under the
Hedge, it will elect to either credit Borrower's proportionate share of such
payments to Borrower's obligation to pay interest on the Loan or refund such
proportionate share to Borrower.
Lender will calculate the "Program Rate" on each day by:
(i) determining the interest rate per annum equal to the weighted
average (adjusted to the next higher 1/8 of 1%) for such day of the rates
applicable to each Funding Source used to fund the Franchisee Loan Program on
such day (i.e., the applicable CP Rates, MTN Fixed Rates, MTN Floating Rates,
OCP Rates and Alternate Base Rates); provided that if any such rate is payable
to a Purchaser or Other Credit Provider, Lender may rely on such Purchaser or
Other Credit Provider's calculation of such rate (as communicated to Lender by
the applicable Investor Agent); and provided, further, that the Alternate Base
Rate shall be computed on the basis of a 365 or 366-day year and all such
other rates shall be computed on the basis of a 360-day year (consisting, in
the case of a computation of any MTN Fixed Rate, of twelve 30-day months); and
provided, further, that any such rate may be adjusted to take into account
negative carrying costs that arise as a result of Lender's receipt of funds
under the Franchisee Loan Documents at a time when no amounts are due in
connection with any Funding Source; and
2
(ii) adding to the rate determined pursuant to clause (i) above any
applicable Increased Cost Factor or Hedge Payments.
Any changes in the Program Rate shall become effective immediately.
Part II. Additional Definitions
--------------------------------
"Alternate Base Rate" means, for any day and any Other Credit Provider,
the sum of (x) such Other Credit Provider's applicable Spread (if any) plus
(y) the interest rate per annum equal to the highest on such day of:
(a) the rate of interest announced publicly by its Reference Bank in New
York, New York, from time to time as such Reference Bank's base rate; or
(b) 1/2 of 1% per annum above the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such
three-week moving average being determined weekly on each Monday (or, if such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by such Reference Bank on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such publication
shall be suspended or terminated, on the basis of quotations for such rates
received by such Reference Bank from three New York certificate of deposit
dealers of recognized standing selected by such Reference Bank, in either case
adjusted to the nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%; or
(c) 1/2 of 1% per annum above the fluctuating interest rate per annum
equal for such day to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such transactions
received by such Reference Bank from three Federal funds brokers of recognized
standing selected by it.
"Business Day" means any day on which banks are not authorized or
required to close in New York City and, if the applicable Business Day relates
to the LIBO Rate, on which dealings are carried on in the London interbank
market.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" means Citicorp North America, Inc., a Delaware corporation.
"CP Rate" means, for any day and any CP Issuer, the interest rate per
annum equal to the rate (or if more than one rate, the weighted average of the
rates adjusted to the next higher 1/8 of 1%) at which all commercial paper
notes of such CP Issuer which are then outstanding or are to be issued on such
day to fund the Franchisee Loan Program were or may be sold by any placement
agent or commercial paper dealer selected by such CP Issuer, as agreed between
each such agent or dealer and
3
such CP Issuer and notified by such CP Issuer to Lender or the applicable
Investor Agent, which rate or rates shall reflect and give effect to the
actual commission of placement agents and dealers and other costs of issuance
in respect of such commercial paper notes; provided, however, if such rate (or
rates) as agreed between any such agent or dealer and any such CP Issuer with
regard to any such commercial paper notes is a discount rate (or rates), the
"CP Rate" for such commercial paper notes shall be the rate (or if more than
one rate, the weighted average of the rates) resulting from converting such
discount rate (or rates) to an interest-bearing equivalent rate per annum.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time
to time.
"Eurodollar Rate Reserve Percentage" for any day means the reserve
percentage applicable on such day under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
LIBO Rate is determined).
"Fixed Period" means each period commencing on the date selected by the
applicable Investor Agent or Lender in its discretion and ending the number of
days from such date as selected by such Investor Agent or Lender in its
discretion; provided, however, that:
(i) any such Fixed Period (other than of one day) which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day (provided, however, if the interest rate in respect of
such Fixed Period is computed by reference to the LIBO Rate, and such Fixed
Period would otherwise end on a day which is not a Business Day, and there is
no subsequent Business Day in the same calendar month as such day, such Fixed
Period shall end on the next preceding Business Day); and
(ii) in the case of Fixed Periods of one day, (A) if such Fixed Rate is
an initial Fixed Period, such Fixed Period shall be the day the OCP Rate is
first applicable; (B) any subsequently occurring Fixed Period which is one day
shall, if the immediately preceding Fixed Period is more than one day, be the
last day of such immediately preceding Fixed Period, and, if the immediately
preceding Fixed Period is one day, be the day next following such immediately
preceding Fixed Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business Day, such Fixed Period
shall be extended to the next succeeding Business Day, provided, however, in
the case of fundings at the LIBO Rate, if such extension would cause the last
day of such Fixed Period to occur in the next following calendar month, the
last day of such Fixed Period shall occur on the next preceding Business Day.
"Franchisee Loan Documents" means the Agreement, the Loan Documents and
other similar loan documents pursuant to which Lender extends credit to Burger
King(Registered Trademark) franchisees.
4
"Franchisee Loans" means loans or other extensions of credit made by
Lender under Franchisee Loan Documents, together with all related rights of
Lender and its assigns (including rights in respect of collateral and
guarantees).
"Investor Agent" means any person or entity acting as agent for any
Purchasers or other Credit Providers, as notified by such Purchasers or Other
Credit Providers to Lender. Citicorp is the Investor Agent for CAFCO and CRC.
"LIBO Rate" has the meaning set forth in the definition of OCP Rate.
"MTN Fixed Rate" means, for any day and any MTN Issuer, an interest rate
per annum equal to the interest rate (or if more than one rate, the weighted
average of the rates adjusted to the next higher 1/8 of 1%) applicable to all
term notes which have been issued, or are to be issued on such day, by such
MTN Issuer at a fixed interest rate to fund the Franchisee Loan Program.
"MTN Floating Rate" means, for any day and any MTN Issuer, the interest
rate per annum equal to the interest rate (or if more than one rate, the
weighted average of the rates adjusted to the next higher 1/8 of 1%)
applicable to all term notes which have been issued, or are to be issued on
such day, by such MTN Issuer at a floating interest rate per annum (determined
by reference to an interest rate formula) in effect from time to time to fund
the Franchisee Loan Program.
"OCP Rate" means, for each day during any Fixed Period and with respect
to any Other Credit Provider, the sum of (x) such Other Credit Provider's
applicable Spread plus (y) an interest rate per annum obtained by dividing (i)
the rate (the "LIBO Rate") per annum at which deposits in U.S. dollars are
offered by the principal office of such Other Credit Provider's Reference Bank
in London, England, to prime banks in the London interbank market at 11:00
A.M. (London time) two Business Days before the first day of such Fixed Period
for an amount of at least $1 million and with a maturity equal to such Fixed
Period by (ii) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such day; provided, however, that in the case of:
A. any Fixed Period on or prior to the first day of which such Other
Credit Provider shall have notified Lender or the applicable Investor Agent
that, after reasonable efforts by such Other Credit Provider (consistent with
its internal policy and legal and regulatory restrictions) to designate a
lending office that would allow such Other Credit Provider to fund the
Franchisee Loan Program at the LIBO Rate set forth above and which would not,
in the judgment of such Other Credit Provider, be otherwise disadvantageous to
such Other Credit Provider, the introduction of or any change occurring on or
after June 2, 1994 or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it
is unlawful, for such Other Credit Provider to fund the Franchisee Loan
Program at the LIBO Rate set forth above (and such Other Credit Provider shall
not have subsequently notified the Lender or applicable Investor Agent that
such circumstances no longer exist), or
B. any Fixed Period of 1 to (and including) 13 days;
the "OCP Rate" for such day shall be an interest rate per annum equal to the
Alternate Base Rate for such Other Credit Provider in effect on such day.
5
"Payment Date" means, with respect to any Franchisee Loan, each date on
which a payment is required to be made under the related promissory note.
"Reference Bank" means, with respect to any Other Credit Provider, the
financial institution designated by such Other Credit Provider, as notified by
such Other Credit Provider to the related Purchaser (if any) and Lender.
Citibank is the Reference Bank for CAFCO's and CRC's Other Credit Providers.
"Spread" means, at any time, with respect to any Other Credit Provider,
the number of basis points (if any) required to be added (under applicable
contracts) to the rates described in clause (y) of the definition of Alternate
Base Rate or OCP Rate, as the case may be, in order to determine the interest
or yield payable to such Other Credit Provider.
BORROWER WITNESSES
AMERIKING COLORADO CORPORATION I,
a Delaware corporation
By: /s/ Xxxxxxxx X. Xxxx /SEAL/ By: /s/ Xxx Xxxxx
------------------------------- ---------------------------
Print Name: Xxxxxxxx X. Xxxx Print Name: Xxx Xxxxx
Title: CEO
By: /s/ Xxxx Xxxxxx /SEAL/ By: /s/ Xxxxx Xxxxx
------------------------------ ----------------------------
Print Name: Xxxx Xxxxxx Print Name: Xxxxx Xxxxx
Title: CEO
By: /SEAL/ By:
------------------------------ ---------------------------
Print Name: Print Name:
Title:
6
MANAGEMENT AND ACCOUNTING AGREEMENT RIDER
to Loan and Security Agreement dated ______________
between Ameriking Colorado Corporation I, a Delaware corporation,
and Franchise Acceptance Corporation Limited
November 29, 1995
Franchise Acceptance Corporation Limited
x/x Xxxxxxxx Xxxxx Xxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
RE: Management and Accounting Support
Gentlemen:
It is our understanding that on the same date hereof, Franchise
Acceptance Corporation Limited (the "Lender") will loan monies to AmeriKing
Colorado Corporation I, our wholly-owned subsidiary (the "Borrower"). This
letter shall confirm our understanding as more fully set forth below, that we
will provide management and accounting support to the Borrower. All
capitalized terms used herein and not otherwise defined are used as
collectively defined in the Loan and Security Agreement between AmeriKing
Colorado Corporation I and Franchise Acceptance Corporation Limited dated
___________, (the "Agreement").
1. National Restaurant Enterprises, Inc. ("NRE") will provide management
and accounting services sufficient for the Borrower to operate the Burger King
restaurants. Also, Lender, upon prior written reasonable notice to NRE, will
have the right to inspect the books and records maintained by NRE relating to
the Borrower.
2. NRE represents, warrants and covenants not to take any action that
at the time of the action a reasonable person believes would (i) cause a
material violation of the Agreement, or (ii) materially diminish the value of
the collateral for the Notes.
3. NRE will not accept any dividends or capital distributions or
other distributions from Borrower relating to its status as a shareholder of
the Borrower that at the time of such dividend or distribution will cause
Borrower to be in violation of Section 11(g) or Section 12(a) of the
Agreement.
4. If an Event of Default occurs under the Agreement and thereafter the
Lender commences to liquidate and realize on the collateral securing the
Notes, NRE will exercise its reasonable best efforts to assist the
Lender in obtaining the maximum proceeds from the liquidation of all
inventory, equipment, real estate or any other collateral under the Loan
Documents. Upon receipt of a written notice ("Notice") from Lender to NRE
advising of the Event of Default and the commencement of liquidation and
requesting that NRE provide an appropriate individual to act as an
-1-
agent or representative on behalf of Borrower in connection with the
liquidation of assets, NRE shall provide such an appropriate individual to
provide such services, provided that such request is reasonable. NRE shall use
its commercially reasonable best efforts to see that all books and records of
the Borrower are properly maintained during this period.
5. The understandings set forth in this letter are independent of the
Agreement and the Loan Documents.
6. The understandings hereunder are irrespective of and shall not be
dependent upon or affected by:
(i) the validity, legality or enforceability of the Agreement,
Notes or any Loan Document;
(ii) the existence, value or condition of any of the Collateral;
(iii) the validity, perfection or priority of the Security Interest
in any of the Collateral;
(iv) any action or failure to take action by the Lender under, or
with respect to, the Agreement, the Notes, any Loan Document, any
Secured Obligation, any Secured Obligation, any Borrower or any of
the Collateral; or
(v) any other dealings among the Lender, the Borrower or any
Obligor.
7. All notices and other communications provided for hereunder shall be
in writing and mailed, telecopied or delivered, if to NRE, at 0000 Xxxxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxxxxxx, Xxxxxxxx 00000, and if to Lender, at its
address specified in the Agreement. All such notices and other communications
shall be effective when deposited in the mails, telecopied or delivered,
respectively.
8. Nothing herein contained shall be deemed to impose any liability upon
the Lender to pay NRE for any services performed pursuant to the terms
of this letter. In no event shall any of NRE's employees and other
agents be considered an employee, agent or representative of the Lender.
9. This agreement shall be governed by the internal laws of the State of
New York and the laws of the State of New York shall govern (i) all issues
relating to this letter agreement, including the validity or enforcement of
this letter agreement and (ii) the interpretation and construction of this
agreement.
Very truly yours,
NATIONAL RESTAURANT ENTERPRISES, INC.
By: /s/ Xxxxxxxx X. Xxxx
----------------------------------------
Xxxxxxxx X. Xxxx, Chief Executive Officer
-2-
Non-construction Loan
(Multiple Loans)
EXHIBIT A
TO THE LOAN AND SECURITY AGREEMENT
FORM OF PROMISSORY NOTE
-----------------------
$1,865,000.00 Date: ___________, 19__
FOR VALUE RECEIVED, the undersigned, AMERIKING COLORADO CORPORATION I, a
Delaware corporation (hereinafter referred to as "Borrower"), HEREBY PROMISES
TO PAY to the order of FRANCHISE ACCEPTANCE CORPORATION LIMITED ("Lender") in
lawful money of the United States of America, the principal amount of One
Million Eight Hundred Sixty Five Thousand and No/100ths United States dollars
(U.S. $1,865,000.00), together with interest on the unpaid principal balance
outstanding from time to time at a rate equal to the Program Rate (as defined
in the Loan and Security Agreement dated _______________ between Lender and
Borrower (as amended or supplemented from time to time, the "Loan Agreement"))
as in effect from time to time, plus two and three-fourths (2.75)% (such
percentage being referred to herein as the "Applicable Margin"). Accrued
interest shall be payable in arrears on the unpaid principal balance of this
Note on the fifteenth (15th) day of each month (each, a "Payment Date")
commencing on ______________, 1995 and continuing until this Note is fully
paid, and principal on this Note shall be payable in one hundred twenty (120)
consecutive monthly installments on each Payment Date, commencing on
______________, 1995 until this Note is fully paid; provided, however, that
the final payment under this Note shall be in the amount of the balance of
principal, interest and all other charges remaining unpaid. The amount of each
monthly installment of principal is set forth in ANNEX A attached hereto and
made a part hereof. All advances, if any, shall be set forth on ANNEX B
attached hereto and made a part hereof. Capitalized terms used but not defined
in this Note are defined in the Loan Agreement.
Interest shall be calculated on the basis of a three hundred and sixty
(360) day year and charged on the actual number of days elapsed in each
calendar year by multiplying the actual number of days the debt is outstanding
in each calendar year by the rate of Interest, and dividing the product
thereof by three hundred and sixty (360).
In the event of the acceleration of this Note, and the mortgage by
which it is secured, by reason of any default thereunder, any prepaid and
unearned interest in excess of the highest rate allowable by law to date of
enforcement of payment, shall thereupon be refunded to the maker automatically
by crediting of same against the sums then due, but such credit shall not cure
or waive the occasioning
-1-
default and acceleration. Under no circumstances shall the total liability
for payment in the nature of interest under this Note and the mortgage by
which it is secured exceed the highest rate allowed by law.
Borrower shall make each payment hereunder not later than 11:00 a.m.
(New York time) on the day when due in U.S. dollars through the Disbursing
Account as provided in the Loan Agreement for the account of the Lender.
In the event of a partial prepayment of principal due and payable
hereunder, no such partial prepayment shall postpone or interrupt payments of
principal and interest, all of which shall continue to be due and payable at
the time and the manner set forth above.
If any payment of principal or interest on this Note shall become due on
a day which is not a business day, such payment shall be made on the next
succeeding business day.
Upon the maturity of any portion of this Note, whether by acceleration
or otherwise, Borrower further promises to pay interest at the rate per annum
equal to the sum of (x) 2.0%, plus (y) the Applicable Margin, plus (z) the
Program Rate in effect from time to time, on the then outstanding past-due
amount of principal, until such amount is paid in full. Such interest shall be
payable upon demand of the Lender.
In the event that any amounts due hereunder have not been paid to the
Lender within five (5) days after the date due, Borrower shall pay on demand
as a late charge, to the extent legally permitted, an amount equal to the
lesser of five percent (5%) of such overdue amounts or the maximum amount
allowed by law.
This Note is one of the Notes referred to in the Loan Agreement and
evidences indebtedness incurred under the Loan Agreement. The Loan Agreement,
among other things, contains provisions for acceleration of the maturity
hereof upon the happening of certain stated events.
Not more than once a year, Borrower may prepay all or a portion of the
principal hereof, interest accrued but unpaid hereon and any other amounts as
may be due and payable hereunder at any time; provided that Borrower shall
give at least 45 days prior written notice to Lender of the intended date of
prepayment, which date shall be a Payment Date and provided further that any
partial prepayment of principal shall be in an amount of at least $25,000 and
shall be applied to the installments due on this Note in the inverse order of
maturity.
Borrower hereby waives presentment, demand for payment (except for such
notice as contemplated under Section 12(a) of the Loan Agreement) and notice of
protest or dishonor in connection with the delivery, acceptance, performance,
default, acceleration or enforcement of this Note and hereby consents to any
extensions of time, renewals, releases of any party to this Note, waivers or
modifications that may be granted or consented to by the holder of this Note in
respect of the time of payment or any other provision of this Note.
Each Borrower, endorser, and/or guarantor jointly and severally agrees to
pay all costs, reasonable attorneys' fees if Lender is the prevailing party
("prevailing party" shall include a party who receives substantially the
relief desired whether by dismissal, summary judgment, judgment or otherwise),
A-2
paralegal fees, and expenses incurred in the event it becomes necessary for
Lender to protect its security and in the event of collection, whether or not
Lender brings suit; and if suit is brought said parties agree to pay the
Lender's costs and reasonable attorneys' fees, paralegal fees and expenses
incurred therein including costs and reasonable attorneys' fees, paralegal
fees, and costs incurred on appeal, if any.
BORROWER CONSENTS TO THE ASSIGNMENT BY LENDER OF ALL OR ANY PORTION OF
ITS RIGHTS UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS, INCLUDING, BUT NOT
LIMITED TO, ASSIGNMENT(S) TO PURCHASERS AND CREDIT ENHANCERS MADE IN
CONNECTION WITH THE FRANCHISEE LOAN PROGRAM. BORROWER ACKNOWLEDGES AND AGREES
THAT ANY AND ALL RIGHTS OF LENDER UNDER THIS NOTE AND THE OTHER LOAN DOCUMENTS
MAY BE EXERCISED FROM TIME TO TIME BY ANY ASSIGNEE OR SUCCCESSOR OF LENDER,
INCLUDING, BUT NOT LIMITED TO, ANY PURCHASER, ANY PURCHASER AGENT, ANY CREDIT
ENHANCER OR ANY AGENT, TRUSTEE OR OTHER REPRESENTATIVE THEREFOR, INCLUDING
CITICORP NORTH AMERICA, INC., AS SERVICING AGENT. BORROWER AGREES THAT ANY
ASSIGNEE'S RIGHTS SHALL BE FREE OF ALL DEFENSES, SET-OFFS OR COUNTERCLAIMS
WHICH BORROWER MAY HAVE AGAINST LENDER.
Notwithstanding any other provision set forth in this Note, any holder
of this Note may at any time create a security interest in all or any portion
of its rights under this Note in favor of any Federal Reserve Bank in
connection with Regulation A of the Board of Governors of the Federal Reserve
System.
This Note shall be binding upon Borrower and its successors and assigns.
This Note shall be governed by, and construed in accordance with, the
laws of the State of New York, United States.
Except as may be prohibited by law, Lender and Borrower hereby
knowingly, voluntarily, intentionally and unconditionally waive the right
either may have to a jury trial in respect to any litigation based hereon, or
arising out of, under or in connection with this Note, or any agreement or
instrument contemplated to be executed in conjunction herewith, or any course
of conduct, course of dealing, statements (whether oral or written) or actions
of either party. If the subject matter of any such litigation is one in which
the waiver of a jury trial is prohibited, neither the Borrower nor the Lender
shall present a non-compulsory counterclaim in such litigation or any claim
arising out of this Note. Furthermore, neither the Lender nor Borrower shall
seek to consolidate any such action in which a jury trial has not been waived.
This provision is a material inducement for the Lender's extension of credit
to the Borrower.
If Lender chooses to waive any provision of this Note, or if any
provision of this Note is construed by a court of competent jurisdiction to be
invalid or unenforceable, it shall not affect the applicability, validity, or
enforceability of the remaining provisions of this Note.
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Address:
Ameriking Colorado Corporation I
0000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx
ENDORSEMENT
-----------
PAYABLE TO THE ORDER OF CITICORP NORTH AMERICA, INC., AS INVESTOR AGENT,
WITHOUT RECOURSE, EXCEPT AS PROVIDED IN THE FRANCHISE LOAN PURCHASE AND SALE
AGREEMENT BETWEEN LENDER, THE INVESTOR AGENT AND CERTAIN OTHER PARTIES
FRANCHISE ACCEPTANCE CORPORATION LIMITED
By: _________________________________________/SEAL/
Name: _______________________________________
Title: ______________________________________
By: _________________________________________/SEAL/
Name: _______________________________________
Title: ______________________________________
A-4
ANNEX A
TO THE PROMISSORY NOTE
AMORTIZATION SCHEDULE
AA-1
ANNEX B
TO THE PROMISSORY NOTE
ADVANCES OF PRINCIPAL
Date Amount of Advance Balance Notation by
-------------------------------------------------------------
AB-1
