PARTICIPATION AGREEMENT
EXHIBIT C
Form of Loan Agreement
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LOAN AGREEMENT
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THIS LOAN AGREEMENT (as amended, supplemented or otherwise modified from
time to time, this "Loan Agreement") dated as of May 20, 1998, is made by SMART
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& FINAL REALTY TRUST 1998, a Delaware business trust ("Borrower"), the financial
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institutions party hereto from time to time and, which, as of the date hereof,
are listed on Schedule I, as lenders (collectively, "Lenders"), and CREDIT
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LYONNAIS LOS ANGELES BRANCH, a branch duly licensed under the laws of the State
of California of a banking corporation organized and existing under the laws of
the Republic of France, as Agent for itself and for Lenders (in such capacity,
"Agent").
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W I T N E S S E T H:
WHEREAS, pursuant to the Participation Agreement, the Lease and the
Construction Agency Agreement, Borrower desires to purchase the Site from
Certified Grocers of California, Ltd., lease the Site to Lessee, and have
Sublessee serve as Construction Agent to construct the New Facility thereon,
utilizing Advances from Borrower to pay the costs thereof; and
WHEREAS, Borrower desires to borrow from Lenders a portion of the cost
to acquire the Site, construct the New Facility and to finance certain
Transaction Costs in connection therewith, pursuant to the terms and conditions
hereof and in the other Operative Documents;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Defined Terms. The capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in Appendix 1 to the
Participation Agreement dated as of the date hereof among Lessee, Borrower (in
such capacity, the "Lessor"), Investor, Sublessee, Trustee, Agent and Lenders.
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ARTICLE II.
AMOUNT AND TERMS OF COMMITMENTS;
REPAYMENT AND PREPAYMENT OF LOANS
Section 2.1. Commitment; Term. Subject to the terms and conditions hereof
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and of the Participation Agreement, each Lender severally agrees to make loans
to Borrower ("Loans") on Advance Date in an aggregate principal amount not to
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exceed the amount of such Lender's Commitment. No Lender shall be obligated to
make any Loans after 5:00 P.M., New York time, on August 31, 1998 (for the
initial Loan), and one year anniversary following the Document Closing Date (for
any subsequent Loan). Any Loans borrowed and repaid may not be reborrowed.
Section 2.2. Notes. The Loans made by each Lender shall be evidenced by
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a promissory note of Borrower, substantially in the form of Exhibit A (each, a
"Note"), with appropriate insertions as to payee, date and principal amount,
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payable to the order of such Lender and in the aggregate principal amount equal
to the lesser of (a) the initial Commitment Amount of such Lender and (b) the
aggregate outstanding principal amount of all Loans made by such Lender. Each
Note shall (i) be dated as of the Document Closing Date, (ii) be stated to
mature on the Final Maturity Date and (iii) bear interest on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as specified in,
Section 2.6.
Section 2.3. Procedure for Borrowing. (a) Subject to the terms and
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conditions of the Participation Agreement, this Loan Agreement and the other
operative Documents, Borrower shall borrow on each Advance Date upon receipt by
Agent from Borrower (or Lessee or Construction Agent, on behalf of Borrower,
pursuant to the terms of the Operative Documents) of (i) an Advance Request in
accordance with Section 2.5(a) of the Participation Agreement or (ii) during the
Construction Period, if no Advance Request was delivered, a deemed request by
the Construction Agent pursuant to Section 2.5(b) of the Participation Agreement
of an Advance equal to the interest payable to Lenders on the following Business
Day.
(b) Agent shall notify each Lender of Agent's receipt of the Advance
Request on the date of such receipt (if received by 11:00 a.m., New York time,
on a Business Day; otherwise the following Business Day) or the deemed request
pursuant to Section 2.3(a)(ii). Each Lender will make the amount of its pro rata
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share of the borrowing available to Agent for the account of Borrower at the
office of Agent referred to in Section 8.2 prior to noon, New York time, on the
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scheduled Advance Date in funds immediately available to Agent. The proceeds of
all such Loans will then be made available to Borrower pursuant to the terms of
the Participation Agreement.
Section 2.4. Lease Termination Payments. Borrower shall repay the Loans
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as follows:
(a) on the Lease Termination Date, if Lessee shall have exercised and
consummated the purchase option set forth in Section 6.2 of the Lease, Borrower
shall pay an amount equal to the Purchase Option Exercise Price;
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(b) if Lessee shall have elected to sell the Site pursuant to Section
6.3 of the Lease, upon any sale pursuant to Section 6.4 of the Lease, Borrower
shall pay an amount equal to the sum of the Proceeds, the Residual Guaranty
Amount;
(c) if Lessee shall be required to purchase the Site pursuant to
Section 13.1 of the Lease, Borrower shall prepay a principal amount of the Loans
equal to ninety six percent (96%) of the Termination Value, and no amounts
(including payments of Termination Value) shall be distributed to Investor until
all amounts due and owing under the Loan Agreement have been paid in full in
cash;
(d) upon receipt of any amounts pursuant to Section 6.8(a) and (d) of
the Lease, Borrower shall pay the Loans, together with interest accrued thereon
to the date of payment and all other amounts then due and payable by Borrower
hereunder or under the other Operative Documents to Agent and Lenders; provided
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that the aggregate amount paid pursuant to this clause shall not exceed the sum
of (i) the Residual Guaranty Amount which Borrower shall receive pursuant to
Section 6.8(a) of the Lease, plus (ii) the proceeds from the sale of the Site
which Borrower shall receive pursuant to Section 6.8(d) of the Lease, plus (iii)
all other amounts due and payable by Lessee under the Lease pursuant to the
provisions of Section 6.8 thereof;
(e) if on any date Agent or Borrower shall receive any Shortfall
Amount pursuant to Section 6.4 of the Lease, such payment shall be applied to
the Loans on such date in accordance with Article IV; and
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(f) no principal amortization of the Loans shall be required prior to
maturity (whether by acceleration or otherwise), except as provided in this
Section.
Section 2.5. Method of Payment. Borrower shall make each payment under
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this Loan Agreement and the other Loan Documents not later than 11:00 a.m., New
York City time, on the day when due to Agent by wire transfer of immediately
available funds, identifying each payment in such manner and payable to such
account of Agent as provided in writing by Agent from time to time. Agent will
promptly thereafter distribute to each Lender its ratable share of each such
payment received by Agent at such place as has been provided to Agent in
writing, to be applied with and subject to the terms of this Loan Agreement.
Section 2.6. Interest Rate. (a) Each Note, and its related Loan, shall
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bear interest for the Interest Period then applicable thereto on the unpaid
principal amount thereof at a rate per annum equal to, at either (i) the LIBO
Rate plus the Applicable Margin as determined by Agent for such Interest Period
or (ii) the Base Rate plus the Applicable Margin as determined by Agent for such
Interest Period.
(b) If all or a portion of the principal amount of or interest on the
Notes or other amounts payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall,
without limiting the rights of any Lender under Article VII, bear interest at
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the Overdue Rate, in each case from the date first due until paid in full (as
well after as before judgment).
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(c) Interest on each Note shall be payable in arrears on each Payment
Date with respect to the interest accrued on such Note from and including the
immediately preceding Payment Date (or, in the case of the first Payment Date,
the applicable Advance Date) through but excluding the Payment Date on which
such payment of interest is payable.
(d) Borrower may convert all or any part of any outstanding Loan into
a Loan of a different type or continue any LIBO Rate Loan as a LIBO Rate Loan.
Borrower (or Lessee on its behalf pursuant to the terms of the Operative
Documents) by giving written notice to Agent not later than (a) in the case of
conversion into a Base Rate Loan, 11:00 a.m., New York City time, on the
Business Day before the proposed date of such conversion; provided, however,
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that any such conversion may only be on the last day of an Interest Period with
respect thereto, and (b) in the case of a conversion into or continuation of a
LIBO Rate Loan, 11:00 a.m., New York City time, at least three (3) Business Days
prior to the proposed date of such conversion or continuation; provided,
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however, that no LIBO Rate Loan may be so converted or continued if a Loan
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Default or Loan Event of Default exists. Each such notice shall be effective
upon receipt by Agent and shall specify the date and amount of such conversion
or continuation, the Loan to be so converted or continued, and the type of Loan
to be converted or continued into. Promptly upon receipt of such notice, Agent
shall advise each Lender thereof. Subject to the other terms hereof, such Loan
shall be so converted or continued on the requested date of conversion or
continuation. Each conversion or continuation shall be on a Business Day and,
after giving effect to any conversion or continuation, the aggregate principal
amount of each group of LIBO Rate Loans shall be at least One Million Dollars
($1,000,000) and an integral multiple of One Million Dollars ($1,000,000);
provided, however, that the aggregate principal amount of one group of Loans may
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be equal to the total remaining amount available for borrowings under this Loan
Agreement if, at the time of such borrowing, such amount was less than One
Million Dollars ($1,000,000). Notwithstanding the foregoing, in the event
Borrower fails to give any notice prior to the end of an Interest Period, all
LIBO Rate Loans shall automatically be converted to Base Rate Loans on the last
day of such then expiring Interest Period.
Section 2.7. Computation of Interest. (a) During such time as a LIBO
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Rate applies to any of the Notes, interest in respect of such Notes shall be
calculated on the basis of a 360-day year for the actual days elapsed. For each
Interest Period in which a LIBO Rate is applicable, Agent shall as soon as
practicable, but in no event later than 11:00 a.m., New York City time, one (1)
Business Day prior to the effectiveness of such LIBO Rate, notify Borrower,
Lessee and each Participant of such LIBO Rate and the corresponding Yield. Any
change in the interest rate on the Loan resulting from a change in the
Applicable Margin shall become effective as of the opening of business on the
day on which such Applicable Margin changes as provided herein.
(b) During such time as the Base Rate applies to any of the Notes,
interest in respect of such Notes shall be calculated on the basis of a year
consisting of 360 days for the actual days elapsed. For each Interest Period in
which the Base Rate is applicable, Agent shall as soon as practicable, but in no
event later than 11:00 a.m., New York City time, one (1) Business Day prior to
the Payment Date for such Interest Period, notify Borrower, Lessee and each
Participant of the Base Rate or Base Rates applicable during such Interest
Period. Any change in the interest rate on the Loan resulting from a change in
the Base Rate or the Applicable Margin
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shall become effective as of the opening of business on the day on which the
Base Rate or the Applicable Margin shall so change.
(c) Each determination of an interest rate or Applicable Margin
pursuant to any provision of this Loan Agreement shall be conclusive and binding
on Borrower, Lessee and each Participant in the absence of manifest error.
Section 2.8. Basis for Determining Interest Rate Inadequate or Unfair.
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If on or prior to the first day of any Interest Period with respect to an
Advance which will bear interest based on the LIBO Rate for such Interest
Period:
(a) Agent is unable to determine the LIBO Rate for such Interest
Period in the manner contemplated by the definition of the term "LIBO Rate;" or
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(b) Lenders constituting Required Lenders advise Agent that the
interest rate determined pursuant to Section 2.6(a) for such Interest Period
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will not adequately and fairly reflect the cost to such Lenders of funding their
LIBO Rate Loans for such Interest Period;
Agent shall forthwith give notice thereof to Borrower, Lessee and each
Participant, whereupon until Agent notifies Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of Lenders to
make LIBO Rate Loans or to continue or convert into LIBO Rate Loans shall be
suspended; provided, however, that in the case of Advances which bear interest
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based on the LIBO Rate, unless Borrower notifies Agent at least two (2) Business
Days before the date of any such Advance for which an Advance Request has
previously been given that it elects not to borrow on such date, such Advance
shall be made as an Advance bearing interest at the Base Rate for the initial
and all future Interest Periods (except for any Interest Periods fully occurring
after Agent is thereafter able to determine the LIBO Rate, in the manner
contemplated by the definition of the term "LIBO Rate" or after Lenders
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constituting Required Lenders notify Agent of their rescission of the advice to
Agent under clause (b) of this Section).
Section 2.9. Pro Rata Treatment and Payments.
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(a) Except as otherwise set forth in Article IV, each payment
(including each prepayment) by Borrower on account of principal of and interest
on the Loans shall be made pro rata to Lenders according to the outstanding
principal amount of the Notes held by each Lender. All payments (including
prepayments) to be made by Borrower hereunder and under the Notes shall be made
without set-off or counterclaim and shall be made to Agent, for the account of
Lenders, at Agent's office referred to in Section 9.2, in lawful money of the
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United States of America and in immediately available funds. Agent shall
distribute such payments to each Lender, promptly upon receipt in like funds as
received.
(b) Unless Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make its share of such borrowing
available to Agent, Agent may assume that such Lender is making such amount
available to a corresponding amount. If such amount is not made available to
Agent by the required time on the Advance Date thereof, such Lender shall pay to
Agent, on demand, such amount with interest thereon at a rate equal to
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the daily average Base Rate for the period until such Lender makes such amount
immediately available to Agent. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this Section shall be conclusive
in the absence of manifest error.
Section 2.10. Payment from Site Only. All payments to be made by
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Borrower in respect of the Loans and other obligations under any Loan Document
made only from the income and the proceeds from the Site and Borrower's interest
in the Operative Documents (excluding Excluded Amounts) and only to the extent
that Agent shall have received sufficient income or proceeds therefrom to make
such payments in accordance with the terms of Article IV. Each Lender agrees
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that it will look solely to the income and proceeds from the Site and Borrower's
interest in the Operative Documents (excluding Excluded Amounts) to the extent
available for distribution to such Lender as herein provided and that neither
Borrower nor Agent is or shall be personally liable to any Lender for any amount
payable hereunder or under any Note.
Section 2.11. Illegality. If the adoption after the date of this Loan
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Agreement of any applicable law, rule or regulation, or any change after the
date of this Loan Agreement therein, or any change after the date of this Loan
Agreement in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency made after the date of this Loan Agreement
shall make it unlawful or impossible for any Lender to make, maintain or fund
its LIBO Rate Loans, and such Lender shall so notify Borrower and Agent, Agent
shall forthwith give notice thereof to the other Lenders, whereupon until such
Lender notifies Borrower and Agent that the circumstances giving rise to such
suspension no longer exist, the obligation of such Lender to make LIBO Rate
Loans shall be suspended. If such Lender shall determine that it may not
lawfully continue to maintain and fund any of its outstanding LIBO Rate Loans to
maturity and shall so specify in such notice, such LIBO Rate Loans shall
automatically be converted to bear interest for the then current Interest Period
on the unpaid principal amount thereof at a rate per annum equal to the Base
Rate.
Section 2.12. Additional Compensation in Certain Circumstances.
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(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
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Capital Adequacy Requirements, Expenses, etc. If any Applicable Laws and
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Regulations or guideline or interpretation or application thereof by any
Governmental Authority charged with the interpretation or administration thereof
or compliance with any request or directive of any Governmental Authority
(whether or not having the force of Applicable Laws and Regulations) now
existing or hereafter adopted:
(i) subjects any Lender to any tax or changes the basis of taxation
with respect to this Agreement, the Notes, other Loan Documents, the Loans
or payments by Borrower or Lessee of principal, interest, commitment fee or
other amounts due from any such party hereunder or under the Notes, other
Loan Documents or the Participation Agreement (except for taxes on the
overall net income or overall gross receipts of such Lender imposed by the
jurisdictions (federal, state and local) in which such Lender's principal
office is located),
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(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Lender (other than
requirements expressly included herein in the determination of the LIBO
Rate hereunder),
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or
credits or commitments to extend credit extended by, any Lender, or (B)
otherwise applicable to the obligations of any Lender under this Loan
Agreement, the Notes, any other Loan Document or the Participation
Agreement, or
(iv) imposes upon any Lender any other condition or expense with
respect to this Loan Agreement, the Notes, any other Loan Document or the
Participation Agreement, or its making, maintenance or funding of any Loan
or any security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender, or in the case of clause (iii) hereof, any Person controlling a Lender,
with respect to this Loan Agreement, the Notes, any other Loan Document or the
Participation Agreement, or the issuance, making, maintenance or funding of any
Loan (or, in the case of any capital adequacy or similar requirement, to have
the effect of reducing the rate of return on such Lender's or such controlling
Person's capital, taking into consideration such Lender's or such controlling
Person's policies with respect to capital adequacy), such Lender may from time
to time notify Agent, Borrower and Lessee of the amount determined in good faith
(using any averaging and attribution methods) by such Lender (which
determination shall be conclusive) to be necessary to compensate for such
increase, reduction or imposition. Such amount shall be due and payable by
Borrower to such Lender thirty (30) days after such notice is given, together
with an amount equal to interest on such amount from the date two (2) Business
Days after the date demanded until such due date at the Base Rate plus the
Applicable Margin (calculated on the basis of a year of 360 days and actual days
elapsed). A certificate by such Lender as to the amount due and payable under
this Section from time to time and the method of calculating such amount shall
be conclusive.
(b) Funding Losses. If any payment of principal with respect to a
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LIBO Rate Loan is made on any day other than the last day of the Interest Period
applicable to such Loan, or if Borrower fails to borrow any LIBO Rate Loan or
convert to LIBO Rate Loan, after notice has been given to Agent in accordance
with Section 2.3 or 2.6, Borrower shall reimburse each Lender on demand for any
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resulting loss or expense incurred by such Lender, including, without
limitation, any loss incurred in obtaining, liquidating or employing deposits
for third parties; provided that such Lender shall have delivered to Borrower a
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certificate as to the amount of such loss, which certificate shall be conclusive
in the absence of manifest error.
(c) Non-United States Persons. Each Lender that is not a United
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States Person as such term is defined in (S) 7701(a)(30) of the Code (a "United
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States Person") shall complete and deliver to Borrower, prior to the date on
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which the first payment to such Lender is due hereunder, a duly certified
Internal Revenue Service Form 1001 in duplicate claiming that it is
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entitled to complete exemption from United States withholding tax under an
income tax treaty to which the United States is a party or a duly certified
Internal Revenue Service Form 4224 in duplicate claiming that the payments to be
received under this Loan Agreement are effectively connected with the conduct of
a trade or business of such Lender in the United States, as appropriate. Each
Lender further agrees to complete and deliver to Borrower from time to time any
successor or additional form or certificate required by the Internal Revenue
Service in order to secure complete exemption from United States withholding
tax. If for any reason during the term of this Loan Agreement, a Lender becomes
unable to submit the forms or certificate referred to above or the information
or representations contained therein is no longer accurate in any material
respect, such Lender shall notify Agent and Borrower in writing to that effect.
(d) Base Rate Loans Substituted for Affected LIBO Rate Loans. If (i)
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the obligation of any Lender to make LIBO Rate Loans has been suspended pursuant
to Section 2.11 or (ii) any Lender has demanded compensation under Section
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2.12(b), and Borrower shall, by at least five (5) Business Days' prior notice to
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such Lender through Agent, have elected that the provisions of this Section
shall apply to such Lender, then, unless and until such Lender notifies Borrower
that the circumstances giving rise to such suspension or demand for compensation
no longer apply:
(i) all Loans which would otherwise be made by such Lender as LIBO
Rate Loans shall be made instead as Loans bearing interest at the Base Rate
(on which interest shall be payable contemporaneously with the related LIBO
Rate Loans of the other Lenders), and
(ii) after each of its LIBO Rate Loans has been repaid, all payments
of principal which would otherwise be applied to repay such LIBO Rate Loans
shall be applied to repay its Loans bearing interest at the Base Rate
instead.
Section 2.13. Notice to Lessee. Notwithstanding anything to the
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contrary contained herein, Lenders, Agent and Borrower hereby agree that they
shall give all notices to Lessee required to be provided to Lessee in accordance
with Section 9.17 of the Participation Agreement.
Section 2.14. Commitment Fees. Promptly after receipt from the Lessee of
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payment of any Commitment Fees payable pursuant to the Participation Agreement,
Agent shall distribute such payment to Lenders pro rata according to their
respective Commitment Percentages.
Section 2.15. Taxes. (a) All payments made by Borrower under this Loan
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Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on Agent or any Lender as a result of a
present or former connection between Agent or such lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from Agent or such Lender having executed,
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delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Note). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") are
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required to be withheld from any amounts payable to Agent or any Lender
hereunder, the amounts so payable to Agent or such Lender shall be increased to
the extent necessary to yield to Agent or such Lender (after payment of all Non-
Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement. Whenever any Non-Excluded
Taxes are payable by Borrower, as promptly as possible thereafter Borrower shall
send Agent for its own account or for the account of such Lender, as the case
may be, a certified copy of an original official receipt received by Borrower
showing payment thereof. If Borrower fails to pay any Non-Excluded Taxes when
due to the appropriate taxing authority or fails to remit to Agent the required
receipts or other required documentary evidence, Borrower shall indemnify Agent
and Lenders for any incremental taxes, interest or penalties that may become
payable by Agent or any Lender as a result of any such failure. The agreements
in this Section shall survive the termination of this Loan Agreement and the
payment of the Loans and all other amounts payable hereunder or under the other
Loan Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce Agent and Lenders to enter into this Agreement and to make
the Loans, Borrower hereby represents and warrants to Agent and each Lender that
the representations and warranties of Lessor set forth in Section 4.3 of the
Participation Agreement are true and correct.
ARTICLE IV.
RECEIPT, DISTRIBUTION AND APPLICATION OF RECEIPTS
Section 4.1. Rent Distribution. Except as otherwise provided in Section
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4.3, each payment of Basic Rent under the Lease, as well as any payment of
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interest on overdue installments of Basic Rent under the Lease, and any other
monies paid over by Lessee or Borrower to Agent for such purpose, shall be
distributed as promptly as possible (it being understood that any payments of
Basic Rent received by Agent under the Lease on a timely basis and in accordance
with the provisions of the Lease shall be distributed on the date received in
the funds so received) in the following order of priority:
(a) first, to Lenders, an amount equal to the aggregate amount of the
payment of interest (as well as any interest on (to the extent permitted by
Applicable Laws and Regulations) overdue interest) then due shall be
distributed and paid to Lenders, such distributions under this clause first
being made without priority of one such Lender over any other, in the
proportion that the unpaid principal amount of the Notes held by each
Lender bears to the aggregate unpaid principal amount of the Notes;
(b) second, to Lenders, an amount equal to the aggregate amount of the
payment of principal then due shall be distributed and paid to Lenders,
such distributions under this clause second being made without priority of
one such Lender over any other,
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in the proportion that the unpaid principal amount of the Notes held by
each Lender bears to the aggregate unpaid principal amount of the Notes;
and
(c) third, the balance, if any, of such payment remaining thereafter
shall be distributed at Borrower's direction.
Section 4.2. Distribution of Mandatory Payments.
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(a) Except as otherwise provided in Section 4.2(b) and Section 4.3,
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the amount of any payment received pursuant to Section 2.4 shall in each case be
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distributed and paid in the following order of priority:
(i) first, to Lenders an amount equal to the aggregate unpaid
principal of, and accrued interest on, the Notes, together with the other
amounts required to be paid by Borrower pursuant to Section 2.4 (other than
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Excluded Amounts) shall be distributed and paid to Lenders, the principal
portion of such distribution being equal to the product of (i) ninety six
percent (96%) multiplied by (ii) the portion of the Lease Balance so paid
by Lessee in connection with the applicable event described in Section 2.4,
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such distributions under this clause first being made without priority of
one such Lender over any other, in the proportion that the unpaid principal
amount of the Notes held by each Lender bears to the aggregate unpaid
principal amount of the Notes; and
(ii) second, the balance, if any, of such payment remaining thereafter
shall be distributed at Borrower's direction.
(b) Except as otherwise provided in Section 4.3, any amounts received
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directly or through Lessee from any insurer or from any Governmental Authority
in connection with an Event of Loss, to the extent that such amounts are not at
the time required to be paid to Lessee pursuant to the Lease, shall, except as
otherwise provided in the next sentence, be held and distributed on the Payment
Date referred to in Section 13.1(a) of the Lease in accordance with Section
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4.2(a).
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Any portion of any such amount referred to in the preceding sentence which is
not required to be so paid to Lessee pursuant to the Lease solely because a
Lease Default or Lease Event of Default shall have occurred shall be held by
Agent as security for the obligations of Lessee under the Lease and the other
Operative Documents and invested in Permitted Investments and at such time as
there shall not be continuing any such Lease Default or Lease Event of Default,
such portion shall be paid to Lessee, unless Agent (as assignee of Borrower)
shall have theretofore declared the Lease to be in default pursuant to Article
XVII thereof, in which event such portion shall be distributed forthwith upon
such declaration in accordance with the provisions of Section 4.3.
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Section 4.3. Distribution of Payments After Loan Event of Default.
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Except as otherwise provided in Section 4.4(b), all payments received and
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amounts realized by Agent after a Loan Event of Default shall have occurred and
be continuing shall be distributed forthwith by Agent in the following order of
priority:
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first, so much of such payments or amounts as shall be required to
reimburse Agent for any tax, expense or other loss incurred by Agent (to
the extent not previously reimbursed and to the extent incurred in
connection with its duties as Agent) and any unpaid ongoing fees of Agent
shall be distributed to Agent for its own account;
second, so much of such payments or amounts as shall be required to
reimburse the then existing or prior Lenders for payments made by them to
Agent pursuant to Section 8.7 (to the extent not previously reimbursed),
-----------
and to pay such then existing or prior Lenders the amounts payable to them
pursuant to any expense reimbursement provisions of the Operative Documents
shall be distributed to each such Lender, without priority of one over the
other, in accordance with the amount of such payment or payments payable to
each such Lender;
third, so much of such amount as shall be required to pay in full the
aggregate unpaid principal amount of the Notes and the accrued but unpaid
interest on the Notes to the date of distribution shall be distributed to
the Lenders holding Notes; and in the case the amount so to be distributed
shall be insufficient to pay in full as aforesaid, then, pro rata among
such Lenders, without priority of one such Lender over any other, in the
proportion that the unpaid principal amount of the Notes held by each
Lender bears to the aggregate unpaid principal amount of the Notes;
fourth, the balance, if any, of such payments or amounts remaining
thereafter shall be promptly distributed as directed by Borrower.
Section 4.4. Unidentified and Other Payments. (a) In the event that
-------------------------------
Lessee shall fail to identify the nature of any payment or Agent in its
reasonable judgment shall determine that the identification made by Lessee is
incorrect or inappropriate, the nature of such payment shall instead be
identified by Agent in its reasonable judgment and applied in the manner
specified herein.
(b) Except for any distributions to Borrower while a Loan Event of
Default not caused by a Lease Event of Default shall have occurred and be
continuing, any payment received by Agent for which provision as to the
application thereof is made in an Operative Document but not elsewhere in this
Article shall be distributed forthwith by Agent to the Person for the purpose
for which such payment was made in accordance with the terms of such Operative
Document.
Section 4.5. Distributions to Borrower. Notwithstanding anything in
-------------------------
this Loan Agreement to the contrary, Agent shall make payment of all amounts
from time to time distributable to Borrower pursuant to this Article directly to
Borrower, unless it shall have received written instructions from Borrower to
the contrary.
Section 4.6. Distribution of Excluded Amounts. Notwithstanding anything
--------------------------------
in this Loan Agreement to the contrary, all amounts constituting Excluded
Amounts received by Agent shall be paid by Agent to the Person or Persons
entitled thereto pursuant to the Operative Documents.
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Section 4.7. Supplemental Rent. Except as otherwise provided in Section
----------------- -------
4.3, the amounts, if any, from time to time received by Agent which constitute
---
payments of Supplemental Rent shall be paid to or upon the order of the Person
entitled thereto pursuant to the Operative Documents.
ARTICLE V.
CONDITIONS PRECEDENT
The agreement of each Lender to make Loans requested to be made by it on
any Advance Date is subject to the satisfaction on the Advance Date of the
conditions precedent set forth in Article III of the Participation Agreement.
ARTICLE VI.
AFFIRMATIVE COVENANTS OF BORROWER
Section 6.1. Performance by Borrower. Subject to Section 2.10, so long
----------------------- ------------
as any Note remains outstanding and unpaid or any other amount is owing to any
Lender hereunder, Borrower will promptly pay all amounts payable by it under
this Loan Agreement, the Notes and the other Loan Documents in accordance with
the terms hereof and thereof and shall duly perform each of its obligations
under this Loan Agreement, the Notes and the other Loan Documents.
Section 6.2. Waiver by Borrower. (a) To the extent permitted by
------------------
Applicable Laws and Regulations, Borrower is hereby deemed to have irrevocably
waived:
(i) the protection of any stay (automatic or otherwise) arising out of
or in connection with any proceedings for the reorganization or liquidation
of Borrower under the Bankruptcy Code or otherwise of the exercise by
Lenders or Agent of rights and remedies under the Operative Documents; and
(ii) any right that Borrower might otherwise have to enjoin, limit or
restrict the good faith exercise of such rights and remedies.
(b) To the extent permitted by Applicable Laws and Regulations,
Lenders and Agent are hereby expressly relieved from any obligation to comply
with any such stay which might otherwise affect their exercise at any time of
such rights and remedies.
Section 6.3. Year 2000. Borrower shall take all actions necessary to
---------
assure that Borrower's material software, hardware, firmware, equipment, goods
and systems (including embedded systems) are able to effectively process data
including dates prior to, on and after January 1, 2000. At the request of the
Agent or any Lender, the Borrower shall provide the Agent or such Lender, as the
case may be, with assurance acceptable to the Agent or such Lender, as the case
may be, of the Borrower's year 2000 capability.
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ARTICLE VII.
LOAN EVENTS OF DEFAULT; REMEDIES
Section 7.1. Loan Events of Default. Each of the following events shall
----------------------
constitute a "Loan Event of Default" (whether any such event shall be voluntary
---------------------
or involuntary or come about or be effected by operation of law or pursuant to
or in compliance with any judgment, decree or order of any court or any order,
rule or regulation of any governmental authority) and each such Loan Event of
Default shall continue so long as, but only as long as, it shall not have been
remedied:
(i) Borrower shall fail to pay any principal of or interest on, any
Note when due and such failure shall continue for a period of five (5)
days; or
(ii) failure by Borrower in any material respect to timely perform any
other covenant or condition herein or in any other Operative Document to
which Borrower is a party and such failure shall continue unremedied for a
period of thirty (30) days; or
(iii) any representation or warranty by Borrower in any Operative
Document or in any certificate or document delivered thereunder shall have
been incorrect in a material respect when made and shall remain material
when discovered and if curable shall continue unremedied for a period of
thirty (30) days; or
(iv) the filing by Borrower of any petition for dissolution or
liquidation of Borrower; or the commencement by Borrower of a voluntary
case under any applicable bankruptcy, insolvency or other similar law for
the relief of debtors, foreign or domestic, now or hereafter in effect; or
Borrower shall have consented to the entry of an order for relief in an
involuntary case under any such law; or the failure of Borrower generally
to pay, or the admission by Borrower in writing that it is unable to pay,
its debts as such debts become due (within the meaning of the Bankruptcy
Code); or the failure by Borrower promptly to satisfy or discharge any
execution, garnishment or attachment of such consequence as will impair its
ability to carry out its obligations under the Operative Documents; or the
appointment of or taking possession by a receiver, custodian or trustee (or
other similar official) for Borrower or any substantial part of its
property; or a general assignment by Borrower for the benefit of creditors;
or the entry by Borrower into an agreement of composition with its
creditors; or Borrower shall have taken any corporate action in furtherance
of any of the foregoing; or the filing against Borrower of an involuntary
petition in bankruptcy which results in an order for relief being entered
or, notwithstanding that an order for relief has not been entered, the
petition is not dismissed within thirty (30) days of the date of the filing
of the petition; or the filing under any law relating to bankruptcy,
insolvency or relief of debtors of any petition against Borrower which
either (i) results in a finding or adjudication of insolvency of Borrower
or (ii) is not dismissed within thirty (30) days of the date of the filing
of such petition; or
(v) a Lease Event of Default shall occur and be continuing.
Section 7.2. Remedies.
--------
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(a) Upon the occurrence of a Loan Event of Default hereunder, (i) if
such event is a Loan Event of Default specified in clause (iv) of Section 7.1,
-----------
automatically the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Loan Agreement, the Notes and the other Loan Documents
shall immediately become due and payable, and the Lenders' Commitments shall be
automatically terminated, and (ii) if such event is any other Loan Event of
Default, (x) with the consent of the Required Lenders, Agent may, or upon the
request of the Required Lenders, Agent shall, by notice of default to Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Loan Agreement, the Notes and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately become due
and payable and (y) Agent shall, upon the request of the Required Lenders,
declare the Lenders' Commitments terminated, whereupon the Commitments will
terminate. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
(b) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing, Agent may,
and upon the written instructions of the Required Lenders shall, exercise any or
all of the rights and powers and pursue any and all of the remedies available to
it hereunder and (subject to the terms thereof) under the other Loan Documents
and the Lease and shall have and may exercise any and all rights and remedies
available under the Uniform Commercial Code or any provision of law.
(c) Upon the occurrence of any Loan Event of Default and at any time
thereafter so long as any Loan Event of Default shall be continuing, Agent may
proceed to protect and enforce this Loan Agreement, the Notes, the other Loan
Documents and the Lease by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted,
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the Site or for the recovery of judgment for the indebtedness secured
thereby or for the enforcement of any other proper, legal or equitable remedy
available under Applicable Laws and Regulations.
(d) Borrower shall be liable for any and all accrued and unpaid
amounts due hereunder before, after or during the exercise of any of the
foregoing remedies, including all legal fees and other costs and expenses
incurred by Agent or any Lender by reason of the occurrence of any Loan Event of
Default or the exercise of remedies with respect thereto.
(e) Except as expressly provided above, no remedy under this Section
is intended to be exclusive, but each shall be cumulative and in addition to any
other remedy provided under this Section or under the other Operative Documents
or otherwise available at law or in equity. The exercise by Agent or any Lender
of any one or more of such remedies shall not preclude the simultaneous or later
exercise of any other remedy or remedies. No express or implied waiver by Agent
or any Lender of any Loan Event of Default shall in any way be, or be construed
to be, a waiver of any future or subsequent Loan Event of Default. The failure
or delay of Agent or any Lender in exercising any rights granted it hereunder
upon any occurrence of any of the contingencies set forth herein shall not
constitute a waiver of any such right upon the continuation or recurrence of any
such contingencies or similar contingencies and any single or
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partial exercise of any particular right by Agent or any Lender shall not
exhaust the same or constitute a waiver of any other right provided herein.
(f) No failure to exercise and no delay in exercising, on the part of
Agent or any Lender, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
(g) If there is a Loan Event of Default and no Lease Event of Default,
Agent shall not exercise remedies under the Collateral Documents against Lessee
or under the Guaranty against the Guarantors.
(h) If there is any transfer of Borrower's interest in the Site
pursuant to a Loan Event of Default where there is no Lease Event of Default,
any successor owner of the Site shall be subject to the consent of Lessee, not
to be unreasonably withheld.
ARTICLE VIII.
AGENT
Section 8.1. Appointment of Agent; No Duties. Each Lender hereby
-------------------------------
irrevocably (subject to Section 8.10) designates, authorizes and appoints Credit
------------
Lyonnais Los Angeles Branch as administrative agent of such Lender under this
Loan Agreement and each other Operative Document, and each such Lender
irrevocably authorizes Credit Lyonnais Los Angeles Branch, as the administrative
agent for such Lender, to take such action on its behalf under the provisions of
this Loan Agreement and each other Operative Document and to exercise such
powers and perform such duties as are expressly delegated to Agent by the terms
of this Loan Agreement and the other Operative Documents, together with such
other powers as are reasonably incidental thereto. Without limitation, each
Lender authorizes and directs Agent to, and Agent agrees for the benefit
thereof, that, on the Document Closing Date it will accept the Operative
Documents and thereafter, it will accept all documents to be delivered to Agent
on behalf of Lenders under the Operative Documents. Notwithstanding any
provision to the contrary elsewhere in this Loan Agreement or any other
Operative Document, Agent shall not have any duties or responsibilities except
those expressly set forth herein or therein, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Loan Agreement or otherwise
exist against Agent.
Section 8.2. Delegation of Duties. Agent may execute any of its duties
--------------------
under this Loan Agreement and the other Operative Documents by or through agents
or attorneys-in-fact, and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 8.3. Exculpatory Provisions. Neither Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action taken or omitted to be taken by it or such Person
under or in connection with this Loan Agreement or any other Operative Document
(except only for direct, as opposed to consequential, damages suffered by a
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Person to the extent that such Person proves damages were caused by Agent's or
Agent's officers', directors', employees', agents', attorneys-in-fact's or
Affiliates' own gross negligence or willful misconduct as determined in a final,
nonappealable order made by a court of competent jurisdiction), or (ii) except
as expressly set forth in this Loan Agreement or any other Operative Document,
responsible in any manner to any of Lenders for any recitals, statements,
representations or warranties made by Borrower or any officer thereof contained
in this Loan Agreement or any other Operative Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by Agent under or in connection with, this Loan Agreement or any other Operative
Document, or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Loan Agreement or any other Operative Document, including
the Notes, or for any failure of Borrower to perform its obligations hereunder
or thereunder. Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Loan Agreement or any other
Operative Document, or to inspect the properties, books or records of Borrower.
Section 8.4. Reliance by Agent. Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex,
facsimile or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Borrower), independent
accountants and other experts selected by Agent. Agent may deem and treat the
registered owner of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with Agent. Agent shall be fully justified in failing or refusing to take
any action under this Loan Agreement or any other Operative Document, unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate and, if it so requests, it shall first be indemnified to its
satisfaction against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Loan Agreement, the Notes and any other Operative Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all Lenders and all future
holders of the Notes and Borrower.
Section 8.5. Notice of Loan Default. Agent shall not be deemed to have
----------------------
knowledge or notice of the occurrence of any Loan Default or Loan Event of
Default hereunder (other than a Loan Event of Default described in Section
-------
7.1(i)) unless Agent has received notice from a Lender or Borrower referring to
------
this Loan Agreement, describing such Loan Default or Loan Event of Default and
stating that such notice is a "notice of default." In the event that Agent
receives such a notice, Agent shall give notice thereof to Lenders. Agent shall
take such action with respect to such Loan Default or Loan Event of Default as
shall be reasonably directed by the Required Lenders; provided that, unless and
--------
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Loan Default or Loan Event of Default, as it shall deem advisable in the
best interests of Lenders.
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Section 8.6. Non-Reliance on Agent and Other Lenders. Each Lender
---------------------------------------
expressly acknowledges that neither Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it, and that no act by Agent hereinafter taken,
including any review of the affairs of Borrower or Lessee, shall be deemed to
constitute any representation or warranty by Agent to any Lender. Each Lender
represents to Agent that it has, independently and without reliance upon Agent,
or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of Borrower and Lessee, the value of and title to any
collateral, and all applicable bank regulatory laws relating to the transactions
contemplated hereby and by the other Operative Documents and has made its own
decision to make its portion of the Loan hereunder and enter into this Loan
Agreement and the other Operative Documents to which it is a party as a Lender.
Each Lender also represents that it will, independently and without reliance
upon Agent, or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Loan
Agreement and the other Operative Documents to which it is a party as a Lender,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of Borrower and Lessee. Except for notices, reports and other
documents expressly required to be furnished to Lenders by Agent hereunder,
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of Borrower, Agent or Lessee
which may come into the possession of Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 8.7. Indemnification. Lenders severally and Borrower agree to
---------------
indemnify Agent in its capacity as such (to the extent not reimbursed by Lessee
within a reasonable period after demand has been made by Agent to Lessee for
those amounts owing by Lessee, and without limiting the obligation of Lessee to
do so), with respect to Lenders, ratably according to the respective principal
amounts of their Notes, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against Agent in any way relating to or arising out of
this Loan Agreement or any other Operative Document, or any documents
contemplated by or referred to herein or therein or any action taken or omitted
by Agent under or in connection with any of the foregoing; provided that no
--------
Lender nor Borrower shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from Agent's gross negligence
or willful misconduct, which has been determined in a final, nonappealable order
of a court of competent jurisdiction. Whenever, at any time after Agent has
received from any Lender or Borrower such Lender's or Borrower's amounts owing
to Agent pursuant to this Section, Agent shall receive any reimbursement from
Lessee on account of such amounts, Agent shall distribute to such Lender or
Borrower its share thereof in like funds as received; provided, however, that in
-------- -------
the event that the receipt by Agent of such reimbursement is required by law or
court or administrative order to be returned, such Lender or Borrower shall
return to Agent any portion
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thereof previously distributed by Agent to it in like funds as such
reimbursement is required to be returned by Agent.
Section 8.8. Agent in Its Individual Capacity. Agent and its respective
--------------------------------
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
business with Borrower or any Lessee Party as though Agent were not Agent
hereunder and without notice to or the consent of Lenders. It is understood and
acknowledged by each Lender that an Affiliate of Agent is Borrower and Agent or
an Affiliate of Agent may also separately be a Participant. It is further
understood and acknowledged by each Lender that, pursuant to the activities
referenced in this Section, Agent and/or its respective Affiliates may receive
information regarding Borrower or Lessee (including information that may be
subject to confidentiality obligations in favor of Borrower or Lessee) and
acknowledge that Agent shall be under no obligation to provide such information
to them. If Agent is one of Lenders, with respect to the portion of the Loan
made by it and any Note issued to it, Agent shall have the same rights and
powers under this Loan Agreement (if it is a Lender) and the other Operative
Documents as any Lender and may exercise the same as though it were not Agent,
and the terms "Lender" and "Lenders" shall include Agent in its individual
------ -------
capacity as a holder of Notes, if applicable. In addition, Borrower may exercise
its rights and powers under this Loan Agreement and the other Operative
Documents notwithstanding that Agent is an Affiliate of Borrower.
Section 8.9. Concerning the Collateral.
-------------------------
(a) Agent hereby declares that it will hold the Collateral for the
benefit of Lenders, subject to, and upon the terms and conditions of the Loan
Documents, for the sole use and benefit of Lenders.
(b) Upon discharge of the indebtedness secured by the Lien or security
interest provided for in the Collateral Documents, Agent shall execute and
deliver, at Lessee's cost and expense, such satisfaction of mortgage or
termination of security interest as may be required.
(c) In the event that the Required Lenders shall notify Agent that an
event of default under a security instrument has occurred, Agent shall take such
action with respect thereto as the Required Lenders may require by written
instructions, but Agent shall not be required to take any action not expressly
set forth in such written instructions.
(d) Agent shall not have any duty or obligation to manage, operate,
control, use, sell, dispose of or otherwise deal with the Site or any other part
of the Collateral or to otherwise take or refrain from taking any action under,
or in connection with, the Collateral Documents, except as expressly provided by
the terms of this Loan Agreement or as expressly provided in written
instructions from the Required Lenders received pursuant to the terms of Section
-------
8.9(c).
------
(e) Except in accordance with written instruction furnished pursuant
to Section 8.9(c), and without limiting the generality of Section 8.9(d), Agent
-------------- --------------
shall have no duty (i) to see to any recording, filing or depositing of any
security instrument or amendment thereof, (ii) to see to
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any insurance on the Site or to effect or maintain any such insurance, (iii) to
see to the payment or discharge of any tax, assessment, or other governmental
charge or any Lien or encumbrance of any kind owing with respect to, assessed or
levied against, any part of the Collateral, (iv) to confirm or verify any
notices or reports of Borrower other than to furnish (to the extent not
otherwise furnished) Lenders with a copy of each notice or report furnished to
Agent by Borrower pursuant to a Collateral Document or (v) to inspect the Site
at any time or ascertain or inquire as to the performance or observance of
Borrower's covenants under any security instrument.
(f) In accepting the obligations hereby created, Agent acts solely as
Agent hereunder and not in its individual capacity, and all persons, other than
Lenders, having any claim against Agent by reason of the transactions
contemplated hereby shall look only to the Collateral for payment or
satisfaction thereof; provided that the foregoing shall not restrict or limit
--------
the right or ability of Agent to hold any Notes or Trust Certificates in its
individual capacity.
(g) If the agency created hereby is determined to be subject to any
law limiting the duration of obligations, this agency shall terminate, cease and
determine upon the earlier of: (i) the assignment, conveyance and transfer by
Agent to Lenders of any property then comprising the Collateral and (ii) twenty-
one years less one day after the death of the last survivor of all the
descendants living on the date of this Loan Agreement of the late Xxxxxx X.
Xxxxxxx, former United States Ambassador to the Court of St. Xxxxx.
Section 8.10. Successor Agent. At any time following the expiration of
---------------
the period one hundred twenty (120) days after the Construction Period (or
earlier with the consent of the Required Lenders), Agent may resign as Agent
upon thirty (30) days' prior written notice to Borrower, Participants and Lessee
or Agent may be removed at any time for cause by thirty (30) days' prior written
notice from the Required Lenders to Agent, the other Participants and Lessee. If
Agent resigns herewith, the Required Lenders shall appoint from among Lenders a
successor Agent which successor Agent shall be approved by, so long as no Loan
Default or Loan Event of Default exists, Borrower and, so long as no Lease
Default or Lease Event of Default exists, Lessee (which approval shall not be
unreasonably withheld or delayed). If no successor Agent is appointed prior to
the effective date of the resignation of Agent, Agent may appoint, after
consulting with Participants, Borrower and Lessee, a successor Agent from among
Lenders. Upon the successor Agent's acceptance of its appointment as successor
Agent hereunder, such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
-----
Agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation herewith as Agent, the
provisions of this Article and Article VIII of the Participation Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent hereunder and under the other Operative Documents. If no successor
Agent has accepted appointment as Agent by the date which is thirty (30) days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall thereupon become effective and Lenders shall perform all of
the duties of Agent hereunder and under the other Operative Documents until such
time, if any, as the Required Lenders appoint a successor Agent as provided for
above.
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Section 8.11. Separate Agent. Agent may, for the purpose of meeting any
--------------
legal requirements of any jurisdiction in which the Site or Collateral may be
located, appoint one or more individuals or corporations either to act as co-
agent jointly with Agent or to act as separate agent of all or any part of the
Collateral, and vest in such individuals or corporations, in such capacity, such
title to such Collateral or any part thereof, and such rights or duties as Agent
may consider necessary or desirable. Agent shall not be required to qualify to
do business in any jurisdiction where it is not now so qualified. Agent shall
execute, acknowledge and deliver all such instruments as may be required by any
such co-agent or separate agent more fully confirming such title, rights or
duties to such co-agent or separate agent. Upon the acceptance in writing of
such appointment by any such co-agent or separate agent, it, she or he shall be
vested with such interest in the Collateral or any part thereof, and with such
rights and duties, not inconsistent with the provisions of the Operative
Documents, as shall be specified in the instrument of appointment, jointly with
Agent (except insofar as local law makes it necessary for any such co-agent or
separate agent to act alone), subject to all terms of the Operative Documents.
Any co-agent or separate agent, to the fullest extent permitted by legal
requirements of the relevant jurisdiction, at any time, by an instrument in
writing, shall constitute Agent its attorney-in-fact and agent, with full power
and authority to do all acts and things and to exercise all discretion on its
behalf and in its name. If any co-agent or separate agent shall die, become
incapable of acting, resign or be removed, the interest in the Collateral or the
Site and all rights and duties of such co-agent or separate agent shall, so far
as permitted by law, vest in and be exercised by Agent, without the appointment
of a successor to such co-agent or separate agent.
Section 8.12. Compensation of Agency. Borrower shall pay Agent (i) the
----------------------
fees set forth in Section 2.6 of the Participation Agreement or in any other
Operative Document, and (ii) Agent's reasonable costs and expenses for the
performance of Agent's obligations under the Loan Documents and other Operative
Documents, as may be further provided for herein or therein.
Section 8.13. Easements. Agent agrees that in the event that Lessor
---------
shall take action described in, and in accordance with the provisions of,
Section 8.3 of the Lease or Section 3.4 of the Construction Agency Agreement, or
execute and deliver any documents in connection therewith, upon Lessee's
request, Agent (on behalf of Lenders) shall participate or join in such action
and execute and deliver such joinders, subordination agreements, releases or
other documents appropriate for the action being take.
ARTICLE IX.
MISCELLANEOUS
Section 9.1. Amendments and Waivers. Neither this Loan Agreement, any
----------------------
Note, the Mortgage, any other Loan Document nor any terms hereof or thereof may
be amended, supplemented or modified, except in accordance with the provisions
of the Participation Agreement.
Section 9.2. Notices. Unless otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be delivered in accordance with, and shall be deemed to have been
given as provided in, Section 9.3 of the Participation
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Agreement; provided, that any notice, request, demand or other communication to
--------
or upon Agent or Lenders pursuant to Section 2.3 shall not be effective until
-----------
received.
Section 9.3. Successors and Assigns; Transfers and Participations. (a)
----------------------------------------------------
This Loan Agreement shall be binding upon and inure to the benefit of Borrower,
Lenders, Agent, all future holders of the Notes and their respective successors
and assigns.
(b) Any transfer by a Lender of its Notes or any sale by a Lender of
any participating interest in the Loans evidenced by its Notes shall comply with
Section 6.3 of the Participation Agreement. Any Lender transferring its Notes
shall pay, or cause the transferee to pay, the costs and expenses (including
reasonable counsel fees) incurred by Agent in connection with such transfer.
Section 9.4. Adjustments. If the holder of any Note (a "Benefited
----------- ---------
Lender") shall at any time receive any payment of all or part of its Note, or
------
interest thereon, or any amount payable pursuant to Section 2.12(b) with respect
---------------
thereto, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(iv), or otherwise) in a greater proportion than any
---------------
such payment to and collateral received by any other holders of Notes in respect
of such other Lender's Notes, or interest thereon, or amount payable pursuant to
Section 2.12(b) with respect thereto, such Benefited Lender shall purchase for
---------------
cash from the other Lenders such portion of each such other Lender's Notes, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of such holders; provided, however, that if all or any portion of such
-------- -------
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Borrower agrees that each
Lender purchasing a portion of another Lender's portion of the Loans pursuant to
this Section may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
Section 9.5. Counterparts. This Loan Agreement may be executed by one
------------
or more of the parties to this Loan Agreement on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Loan
Agreement signed by all the parties hereto shall be lodged with Borrower and
Agent.
Section 9.6. GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES HAVE BEEN
-------------
DELIVERED IN, AND THIS LOAN AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.
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Section 9.7. No Waiver; Cumulative Remedies. No failure to exercise and
------------------------------
no delay in exercising, on the part of Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Operative Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
Section 9.8. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder, in the other Operative Documents
and in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Loan
Agreement and the Notes and the making of the Loans hereunder.
Section 9.9. Entire Agreement. This Loan Agreement sets forth the
----------------
entire agreement of the parties hereto with respect to its subject matter, and
supersedes all previous understandings, written or oral, with respect thereto.
Section 9.10. Severability. Any provision of this Loan Agreement or of
------------
the other Loan Documents which is prohibited, unenforceable or not authorized in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition, unenforceability or non-authorization without invalidating the
remaining provisions hereof or thereof or affecting the validity, enforceability
or legality of any such provision in any other jurisdiction.
Section 9.11. Limitations of Liability. Except in the case of the gross
------------------------
negligence or willful misconduct of Trustee or the Trust Company, as determined
in a final, nonappealable order by a court of competent jurisdiction, anything
in this Loan Agreement to the contrary notwithstanding, neither Agent nor any
Lender nor any other holder of Notes nor the successors or assigns of any of
said Persons, shall have any claim, remedy or right to proceed against Trustee
or the Trust Company, or any past, present or future settlor, owner, trustee,
officer, director, incorporator or partner thereof, whether by virtue of any
constitutional provision, statute or rule of law or by enforcement of any
penalty or assessment or otherwise, for the payment of any deficiency or any
other sum owing on account of the indebtedness evidenced by the Notes or for the
payment of any liability resulting from the breach of any representation,
agreement or warranty of any nature whatsoever in this Loan Agreement or any
other Operative Document, from any source other than the Collateral securing the
Notes, including the Rent, but excluding Excluded Amounts. Agent, Lenders and
any other holders of the Notes by acceptance of this Loan Agreement and the
Notes, waive and release any liability of Trustee and Trust Company, or any
past, present or future stockholder, subscriber of capital stock, officer,
director, incorporator or partner thereof for and on account of such
indebtedness or such liability, and Agent, Lenders and the holders of the Notes
agree to look solely to the Collateral securing the Notes, including the Rent,
but excluding Excluded Amounts, for the payment of said indebtedness or the
satisfaction of such liability; provided, however, that nothing herein contained
-------- -------
shall limit, restrict or impair the rights of Agent to accelerate the maturity
of the Notes upon a Loan Event of Default or, subject to the limitations
hereinabove described, to bring suit and obtain a judgment on the Notes or to
exercise all rights and remedies provided under this Loan Agreement or otherwise
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realize upon the Collateral securing the Notes, other than the pursuit of any
claim of personal liability.
Section 9.12. The Register; Disclosure; Pledges to Federal Reserve Banks.
----------------------------------------------------------
(a) Agent shall maintain at its address a copy of each Assignment
and Acceptance delivered to it and a register (the "Register") for the
--------
recordation of the names and addresses of Lenders, the Commitments of Lenders,
and the principal amount of the Loans owing to each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of clearly
demonstrable error, and Borrower, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Loan Agreement. The Register shall be available for
inspection by Borrower or any Lender at any reasonable time from time to time
upon reasonable prior notice.
(b) Nothing herein or in any other Operative Document shall prohibit
any Lender from pledging or assigning any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
Section 9.13. Submission or Jurisdiction; Waivers. EACH PARTY HERETO
-----------------------------------
IRREVOCABLY AND UNCONDITIONALLY:
(a) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON ARISING
FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT OR ANY
STATEMENT, COURSE OF CONDUCT, ACT OR OMISSION, OR EVENT OCCURRING IN CONNECTION
HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY
------------------
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN THE BOROUGH OF
MANHATTAN, STATE OF NEW YORK, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND TO
THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT, TO THE EXTENT THAT ANY SUCH
COURT HAS OR IS ABLE TO OBTAIN PERSONAL JURISDICTION OVER THE PARTY AGAINST
WHICH SUCH PARTY IS SEEKING TO BRING RELATED LITIGATION, IT WILL NOT BRING ANY
RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL AFFECT THE RIGHT
OF ANY INVESTOR, AGENT OR LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING IN ANY
OTHER FORUM);
(b) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING
OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM
THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND
WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO ANY RELATED LITIGATION BROUGHT IN
ANY SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY;
(c) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR CERTIFIED U.S. MAIL,
POSTAGE PREPAID, TO SUCH PARTY'S ADDRESS FOR NOTICES DESCRIBED IN SCHEDULE II
HEREOF, AND CONSENTS
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AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND
EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS
OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(d) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED LITIGATION.
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IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered in New York, New York, by their proper and
duly authorized officers as of the day and year first above written.
SMART & FINAL REALTY TRUST 1998,
as Borrower
By: Wilmington Trust Company, not in its
individual capacity but solely as Trustee
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
CREDIT LYONNAIS LOS ANGELES BRANCH, as Agent
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Manager
CREDIT LYONNAIS LOS ANGELES BRANCH, as Lender
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Manager
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND," NEW YORK BRANCH,
as Lender
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
By: /s/ W. Xxxxxx X. Xxxxx
-----------------------------------------
Name: W. Xxxxxx X. Xxxxx
Title: Vice President
LOAN AGREEMENT
SCHEDULE I
LIST OF LENDERS
---------------
Credit Lyonnais Los Angeles Branch
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.,
"Rabobank Nederland," New York Branch
000 Xxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
S-1
LOAN AGREEMENT
EXHIBIT A
Form of Note
------------
NOTE
$[ ] New York, New York
Dated as of ___________, ____
FOR VALUE RECEIVED, the undersigned SMART & FINAL REALTY TRUST 1998, a
Delaware business trust, as borrower ("Borrower"), hereby unconditionally
promises to pay to the order of __________________, a ___________________
("Lender"), at the office of Credit Lyonnais Los Angeles Branch, located at 515
------
Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, in lawful money of the
United States of America in same day or immediately available funds to the
account designated by Lender from time to time in writing, the aggregate unpaid
principal amount of all Loans made by Lender to, or for the benefit of,
Borrower, as recorded either on the grid attached to this Note or in the records
of Lender (and such recordation shall constitute prima facie evidence of the
information so recorded; provided, however, that the failure to make any such
-------- -------
recordation shall not in any way affect Borrower's obligation to repay this
Note). The principal amount of each Loan evidenced hereby shall be payable on
or prior to the Final Maturity Date as provided in that certain Loan Agreement,
dated as of May 20, 1998, among Borrower, the various lenders named therein, and
Credit Lyonnais Los Angeles Branch, as Agent for itself and such lenders
("Agent") (as amended, supplemented or otherwise modified from time to time, the
-----
"Loan Agreement").
--------------
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from and including the date hereof until
maturity (whether by acceleration or otherwise) and, after maturity, until paid,
at the rates per annum and on the dates specified in the Loan Agreement.
Prepayments on this Note are subject to the provisions of Section 2.4 of
the Loan Agreement.
This Note is one of the Notes referred to in, and evidences indebtedness
incurred under, the Loan Agreement, to which reference is made for a statement
of the terms and conditions on which Borrower is required to make prepayments
and repayments of principal of the indebtedness evidenced by this Note and on
which such indebtedness may be declared to be immediately due and payable.
Capitalized terms used herein without definition shall have the meanings
provided in the Loan Agreement. This Note is secured and guaranteed pursuant to
the Loan Documents made by Borrower and Guarantors in favor of Agent referred to
in the Loan
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Agreement and reference is hereby made to the Loan Agreement and such Loan
Documents for statement of the terms and provisions of such security.
Anything to the contrary herein notwithstanding, Borrower's liability for
any sums due hereunder shall be limited in accordance with Section 9.11 of the
Loan Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest, and notice of dishonor, notice
of the existence, creation or nonpayment of all or any of the Loans and all
other notices whatsoever.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
SMART & FINAL REALTY TRUST 1998,
as Borrower
By: Wilmington Trust Company, not in its
individual capacity but solely as Trustee
By
--------------------------------------------
Name:
Title:
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GRID ATTACHED TO NOTE
DATED AS OF _________, ____ OF
SMART & FINAL REALTY TRUST 1998, AS BORROWER,
PAYABLE TO THE ORDER OF
__________________, AS LENDER
Loans made by Lender to Borrower and payments of principal of such Loans.
Outstanding
Amount of Principal Notation
Date Loan Balance Made By
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