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EXHIBIT 10.(L)
LOAN FACILITY AGREEMENT
AND GUARANTY
by and among
XXXXX RENTS, INC.
and
SOUTHTRUST BANK
Dated as of August ____, 2000
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LOAN FACILITY AGREEMENT AND GUARANTY
THIS LOAN FACILITY AGREEMENT AND GUARANTY (the "Agreement") made as of
August ____, 2000, by and between XXXXX RENTS, INC., a Georgia corporation
having its principal place of business and chief executive office at 1100 Xxxxx
Building, 000 Xxxx Xxxxx Xxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000 ("Sponsor")
and SOUTHTRUST BANK, an Alabama banking corporation having its principal Georgia
office in Atlanta, Georgia (the "Bank").
W I T N E S S E T H:
WHEREAS, Sponsor has established relationships with certain individual
owners (the "Franchisee Owners") of certain rental store operators (the
"Franchisees") across the United States who own and operate rental stores under
the "Aaron's Rental Purchase" franchise;
WHEREAS, in connection therewith, Sponsor wishes to establish a loan
program with the Bank to provide term loans to the Franchisee Owners for equity
contributions towards capitalization of such Franchisee Owner's "Aaron's Rental
Purchase" franchise;
WHEREAS, the Bank is willing to establish such a loan program based
upon the obligation of the Sponsor to unconditionally guarantee such loans, all
as more particularly set out below;
THEREFORE, upon the terms and conditions hereinafter stated, and in
consideration of the mutual premises set forth above and other adequate
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. DEFINITIONS
1.1 Definitions. In addition to the other terms defined herein, the
following terms used herein shall have the meanings herein specified
(such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Adjusted LIBO Rate" shall mean, with respect to each Payment Period,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
"Adjusted LIBO Rate" = LIBOR
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1.00 - LIBOR Reserve Percentage
"Adjusted LIBO Plus Rate" shall mean the Adjusted LIBO Rate plus one
and one-half percent (1 1/2%).
As used herein, LIBOR Reserve Percentage shall mean, for any Payment Period, the
reserve percentage (expressed as a decimal) equal to the then stated maximum
rate of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of
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Eurocurrency liabilities as defined in Regulation D (or against any successor
category of liabilities as defined in Regulation D).
"Affiliate" of any Person shall mean any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agreement" shall mean this Loan Facility Agreement and Guaranty, as
amended, restated, supplemented or modified from time to time.
"Authorized Signatory" shall mean each officer of Sponsor specified
from time to time in an appropriate certificate to the Bank as authorized to
execute Funding Approval Notices and other such documents relating to the Loan
Documents.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as amended
and in effect from time to time (11 U.S.C. ss.101 et seq.).
"Bankruptcy Law" shall mean any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law.
"Base Rate" shall mean the per annum rate of interest designated from
time to time by the Bank to be its base rate. The Base Rate is a reference rate
and does not necessarily represent the lowest or best rate of interest that is
being offered by the Bank to its borrowers.
"Borrower" shall mean a Franchisee Owner who is primarily liable for
repayment of a Loan as a result of having executed Loan Documents as maker, or
its permitted assignee.
"Borrower Rate" shall mean, with respect to each Loan, the Base Rate
per annum plus any additional margin per annum specified for such Loan by
Sponsor in the applicable Funding Approval Notice, such margin not to exceed ten
percent (10.0%) per annum.
"Business Day" shall mean any day excluding Saturday, Sunday and any
other day on which banks are required or authorized to close in Atlanta, Georgia
or New York, New York and, if the applicable Business Day relates to Adjusted
LIBO Rate, on which trading is not carried on by and between banks in the London
interbank market.
"Capital Stock" means any capital stock (or other equivalent equity
interest issued in other than stock, including, in the case of a partnership or
limited liability company, partnership interests or member interests) of a
Franchisee, whether common, preferred or otherwise.
"Closing Date" shall mean, for any Loan Commitment, the date upon
which the Loan Documents with respect to such Loan Commitment are executed and
delivered and the Loan Commitment is established thereunder.
"Closing Fee" shall have the meaning set forth in Section 2.1(d).
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"Collateral" shall mean, with respect to any Loan, all property of the
Borrower of such Loan and of the Franchisee owned by such Borrower as designated
by the Sponsor, which may include the Capital Stock of the Franchisee owned by
such Borrower.
"Collateral Agreement" shall mean an agreement executed by a Borrower
and any other Persons primarily or secondarily liable for all or part of the
Loan or granting a security interest to the Bank in specified Collateral as
security for such Loan, including without limitation, a Pledge Agreement, any
other Loan Documents and any Existing Loan Documents between the Franchisee
owned by such Borrower or such other Person and the Bank.
"Commitment" shall mean have the meaning set forth in Section 2.1(a).
"Commitment Letter" means a letter from Bank to a Franchisee Owner
named in a Funding Approval Notice, substantially in the form of Exhibit A,
whereby Bank agrees to establish a Loan Commitment in favor of such Franchisee
Owner upon the terms and conditions set forth therein and in the Operative
Documents.
"Commitment Termination Date" shall have the meaning set forth in
Section 2.1(a).
"Consolidated Companies" shall mean, collectively, Sponsor and all of
its Subsidiaries.
"Conversion Date" shall mean the last day of the Interest Only Period.
"Corporate Authorization" means, with respect to any Franchisee
Guarantor which is a corporation, certifications as to authorized signatories
and corporate action with respect to the Guaranty Agreement in the form attached
hereto as Exhibit B.
"Credit Event" shall have the meaning set forth in Article 8 of this
Agreement.
"Credit Parties" shall mean, collectively, each of the Sponsor and the
Guarantors.
"Debit Authorization" means an authorization from a Borrower to
automatically debit Loan payments from a deposit account of such Borrower, in
the form prescribed by Bank from time to time.
"Defaulted Borrower" shall mean a Borrower under a Defaulted Loan.
"Defaulted Loan" shall mean a Loan Commitment evidenced by Loan
Documents under the terms of which exist one or more Loan Defaults which have
not been cured or waived as permitted herein.
"Effective Date" shall mean the date upon which all conditions
precedent to the effectiveness of this Agreement have been satisfied.
"Environmental Laws" shall mean all federal, state, local and
applicable foreign statutes and codes or regulations, rules or ordinances
issued, promulgated, or approved thereunder, now or hereafter in effect
(including, without limitation, those with respect to asbestos or asbestos
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containing material or exposure to asbestos or asbestos containing material),
relating to pollution or protection of the environment and relating to public
health and safety, relating to (i) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law into the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), or (ii) the
manufacture, processing, distribution, use, generation, treatment, storage,
disposal, transport or handling of any Hazardous Substance, petroleum including
crude oil or any fraction thereof, any petroleum product or other waste,
chemicals or substances regulated by any Environmental Law, and (iii)
underground storage tanks and related piping, and emissions, discharges and
releases or threatened releases therefrom, such Environmental Laws to include,
without limitation (a) the Clean Air Act (42 U.S.C.ss.7401 et seq.), (b) the
Clean Water Act (33 X.X.X.xx. 1251 et seq.), (c) the Resource Conservation and
Recovery Act (42 X.X.X.xx. 6901 et seq.), (d) the Toxic Substances Control Act
(15 X.X.X.xx. 2601 et seq.), (e) the Comprehensive Environmental Response
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act (42 X.X.X.xx. 9601 et seq.), and (f) all applicable national
and local laws or regulations with respect to environmental control.
"Existing Facility Agreement" shall mean that certain Amended and
Restated Loan Facility and Guaranty Agreement dated as of November 3, 1999, by
and among the Sponsor, SunTrust Bank, formerly SunTrust Bank, Atlanta, as Bank
and each of the Participants a party thereto.
"Final Termination Date" shall mean the date which is ninety (90) days
after the last Maturity Date of any Loan.
"Financing Statement" shall mean, with respect to a Loan, a document
which among other things, describes the Borrower and the Collateral, the proper
filing of which perfects a security interest in the Collateral described therein
under the laws of the state in which such document is filed.
"Franchisee" shall have the meaning set forth in the recitals hereof.
"Franchise Agreement" shall mean the written agreement between Sponsor
and a Franchisee whereby the Franchisee is authorized to establish an "Aaron's
Rental Purchase" franchise.
"Franchisee Guarantor" shall mean, with respect to any Borrower's Loan
Commitment, the Franchisee owned by such Borrower that becomes a party to a
Franchisee Guaranty.
"Franchisee Guaranty" shall mean the Guaranty Agreement substantially
in the form of Exhibit D, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
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"Franchisee Loan Agreement" shall mean, with respect to any Borrower, a
"Loan Agreement", as such term is defined in the Existing Facility Agreement,
between the Franchisee owned by such Borrower and the Bank.
"Franchisee Loan Document" shall mean, with respect to any Borrower, a
"Loan Document", as such term is defined in the Existing Facility Agreement,
between the Franchisee owned by such Borrower and the Bank.
"Franchisee Owner" shall have the meaning set forth in the recitals
hereof.
"Funding Approval Notice" shall mean a written notice to the Bank from
Sponsor setting forth the conditions of a proposed Loan Commitment, consistent
with the requirements therefor as set forth in this Agreement, and containing
such information and in substantially in the form of Exhibit E attached hereto.
"Guaranteed Obligations" shall mean the aggregate amount of all Loan
Indebtedness of all Borrowers outstanding under all Loan Documents to include,
without limitation (i) all principal, interest and commitment fees due with
respect to all Loans, including post-petition interest in any proceeding under
federal bankruptcy laws, (ii) all fees, expenses, and amounts payable by all
Borrowers for reimbursement or indemnification under the terms of all Loan
Agreements and all other Loan Documents executed in connection with the Loan to
such Borrower, (iii) all amounts advanced by Bank to protect or preserve the
value of any security for the Loans, (iv) all other obligations and liabilities
of Borrowers under the Loan Documents, and (v) all renewals, extensions,
modifications, and refinancings (in whole or in part) of any of the amounts
referred to in clauses (i) and (ii) above).
"Guarantor" shall mean Xxxxx Rents, Inc. and all other subsidiaries of
the Sponsor that from time to time become parties to the Guaranty Agreement, and
their respective successors and permitted assigns.
"Interest Only Period" shall mean, as to each Loan, the period of time
from the Loan Funding Date applicable thereto, through such later date requested
by Sponsor in the Loan Request for such Loan, but in no event more than ninety
(90) days after such Loan Funding Date.
"LIBOR" shall mean, for each Payment Period, the offered rate for
deposits in U.S. Dollars, for a period of one month and in an amount comparable
to the aggregate outstanding principal of the Loans as of the first day of such
Payment Period, appearing on Telerate Page 3750 as of 11:00 A.M. (Atlanta,
Georgia time) on the Business Day next preceding such date. If two or more of
such rates appear on Telerate Page 3750, the rate for that Payment Period shall
be the arithmetic mean of such rates. If the foregoing rate is unavailable from
Telerate Page 3750 for any reason, then such rate shall be determined by the
Bank from the Reuters Screen LIBO Page or, if such rate is also unavailable on
such service, then on any other interest rate reporting service of recognized
standing designated in writing by the Bank to Sponsor; in any such case rounded,
if necessary, to the next higher 1/100 of 1.0%, if the rate is not such a
multiple.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust
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or other arrangement having the practical effect of the foregoing (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, including any lease or
similar arrangement with a public authority executed in connection with the
issuance of industrial revenue bonds or pollution control revenue bonds, and the
filing of or agreements to give any financing statement under the Uniform
Commercial Code of any jurisdiction).
"Loan" shall mean the transaction whereby a term loan is made by the
Bank to a Borrower in the amount upon the terms and pursuant to the Loan
Commitment described in the Loan Agreement of such Borrower, and shall include
the Prior Loans.
"Loan Account" means the internal bank loan account established by Bank
for each Borrower.
"Loan Agreement" shall mean a Term Loan and Security Agreement setting
forth the terms and conditions, as between a Borrower and the Bank, under which
the Bank has established Loan Commitments to make Loans to such Borrower, with
such changes as the Sponsor and the Bank shall agree to, subject to Section
3.1(b); provided, however, that any Loan Agreement executed prior to the
Effective Date shall be substantially in the form previously approved by the
Bank.
"Loan Commitment" shall mean, for any Borrower, the commitment to make
Loans established by the Bank in favor of any Borrower in the form of Exhibit F,
in an amount not less than $100,000, and upon the terms described in, the
applicable Funding Approval Notice and the applicable Loan Documents, and shall
include the Prior Loan Commitments.
"Loan Default" shall mean an occurrence with respect to a Loan which is
defined by the applicable Loan Documents to be an event of default (including
but not limited to a Loan Payment Default).
"Loan Documents" shall mean, with respect to any Loan, the Loan
Agreement, the Master Note, each Loan Request, any Spousal Consent, each
Collateral Agreement, in each case relating to such Loan, any other documents
relating to such Loan delivered by any Borrower or any guarantor or surety
thereof to the Bank and any amendments thereto (provided that such amendments
are made with the consent of Sponsor, where such consent is required under this
Agreement).
"Loan Funding Date" shall mean, with respect to any Loan, the date on
which the Bank advances such Loan to the applicable Borrower.
"Loan Indebtedness" shall mean all amounts due and payable by a
Borrower under the terms of the Loan Documents governing the Loan Commitment of
such Borrower, including, without limitation, outstanding principal, accrued
interest, any commitment fees, and all reasonable costs and expenses of any
legal proceeding brought by the Bank to collect any of the foregoing (including
without limitation, reasonable attorneys' fees actually incurred).
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"Loan Payment Default" shall mean the failure of a Borrower to make a
payment of principal, accrued interest thereon or any other amounts, within the
cure period following the due date therefor, as provided under the applicable
Loan Documents.
"Loan Request" shall mean the funding request from the Sponsor, on
behalf of a Borrower, which shall be substantially in the form of Exhibit C.
"Master Note" shall mean that certain Master Note, executed by a
Borrower in favor of the Bank, evidencing such Borrower's obligation to repay
all Loans made to it pursuant to a Loan Commitment, substantially in the form of
Exhibit G to the Loan Agreement, with such changes as the Sponsor and the Bank
shall agree to, subject to Section 3.1(b); provided, however, that any Master
Note executed prior to the Effective Date shall be substantially in the form
previously agreed upon by the Bank.
"Materially Adverse Effect" shall mean any materially adverse change in
(i) the business, results of operations, financial condition, assets or
prospects of the Sponsor and its Subsidiaries, taken as a whole, (ii) the
ability of the Sponsor to perform its obligations under this Agreement, or (iii)
the ability of the Guarantors (taken as a whole) to perform their respective
obligations under the Guaranty Agreement.
"Maturity Date" shall mean, with respect to any Loan, if not earlier
accelerated, the Payment Date occurring during the month in which occurs the
fifth (5th) anniversary of the Conversion Date of such Loan; provided that, each
Maturity Date shall be a Payment Date.
"Monthly Servicing Report" shall have the meaning set forth in Section
3.3(a).
"Operative Documents" shall mean this Agreement, and any other
documents delivered by Sponsor or any Guarantor to the Bank in connection
herewith or therewith.
"Payment Date" shall mean the fifteenth (15th) day of each calendar
month; provided, however, if such day is not a Business Day, the next succeeding
Business Day.
"Payment Period" shall mean a period of one (1) month; provided that
(i) the first day of a Payment Period must be a Business Day, (ii) any Payment
Period that would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day, (iii) the first Payment Period
hereunder shall commence on the date hereof and shall end on the last day of the
next succeeding calendar month and (iv) the first day of any succeeding Payment
Period shall be the last day of the preceding Payment Period and shall end on
the last day of the next succeeding calendar month.
"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, trust or other entity, or any government or
political subdivision or agency, department or instrumentality thereof.
"Pledge Agreement" shall mean a Pledge Agreement in substantially the
form of Exhibit H, pursuant to which a Borrower pledges certain of the Capital
Stock of the Franchisee owned by such Borrower to secure such Borrower's Loans.
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"Prior Loan" shall have the meaning set forth in Section 13.13.
"Prior Loan Commitment" shall have the meaning set forth in Section
13.13.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be in effect from time to time.
"Response Period" shall mean, for any Loan, a period of seventy (70)
days commencing on the day next succeeding the day on which the Sponsor receives
a notice from the Bank of such Loan Default, provided, however, that no Response
Period shall extend beyond the Final Termination Date.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuters Monitor
Money Rates Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Servicing Fee" shall mean, for any calendar month, a fee equaling
one-half (1/2) of one percent (.50%) of the average daily aggregate outstanding
balance of all Loans during such month, payable monthly as hereinafter provided.
"Spousal Consent" shall mean any agreement provided by the spouse of
any Borrower, to be substantially in the form provided by the Bank.
"Subordinated Debt" shall have the meaning set forth in Section 9.6.
"Subsidiary" shall mean, with respect to any Person, any corporation or
other entity (including, without limitation, partnerships, joint ventures, and
associations) regardless of its jurisdiction of organization or formation, at
least a majority of the total combined voting power of all classes of voting
stock or other ownership interests of which shall, at the time as of which any
determination is being made, be owned by such Person, either directly or
indirectly through one or more other Subsidiaries.
"Synthetic Lease Documents" shall mean, collectively, the Master
Agreement, dated as of September 30, 1996, among the Sponsor, SunTrust Banks,
Inc., as lessor (the "Lessor"), SunTrust Bank, Atlanta and SouthTrust Bank of
Georgia, N.A., as lenders, and SunTrust Bank, Atlanta, as agent, the Lease
Agreement, dated as of September 30, 1996, between the Lessor and the Sponsor
and any supplements thereto, the Construction Agency Agreement, dated as of
September 30, 1996, among the Lessor and the Sponsor, the Guaranty, dated as of
September 30, 1996, executed by the Sponsor in favor of the Funding Parties (as
defined therein), and any and all Security Agreements and Assignments
(Construction Contract, Architect's Agreement, Permits, Licenses and
Governmental Approvals, and Plans and Specifications and Drawings) executed from
time to time by the Sponsor in favor of the Lessor, and any modifications of or
replacements for any or all of the foregoing.
"Taxes" shall mean any present or future taxes, levies, imposts,
duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales,
transfer, license, payroll, withholding, social security
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and franchise taxes now or hereafter imposed or levied by the United States, or
any state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interest,
penalties, additions to tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any designated page
and LIBOR, the display page so designated on the Dow Xxxxx Telerate Service (or
such other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"Unmatured Credit Event" shall mean any condition or event which, with
notice or the passage of time or both, would constitute a Credit Event.
"Voting Stock" shall mean securities of any class or classes, the
holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
"Wind-Down Event" shall mean that the Commitment Termination Date
occurs.
1.2 Accounting Terms and Determination.
Unless otherwise defined or specified herein, all accounting terms
shall be construed herein, all accounting determinations hereunder
shall be made, all financial statements required to be delivered
hereunder shall be prepared, and all financial records shall be
maintained in accordance with, GAAP.
1.3 Other Definitional Terms.
The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
Article, Section, Schedule, Exhibit and like references are to this
Agreement unless otherwise specified.
1.4 Exhibits and Schedules.
All Exhibits and Schedules attached hereto are by reference made a part
hereof.
2. LOAN FACILITY
2.1 Establishment of the Commitment; Loans; Closing Fee.
(a) Commitment. Subject to and upon the terms and conditions
set forth in this Agreement and the other Operative Documents, and in
reliance upon the guaranty and other obligations of the Sponsor set
forth herein, the Bank hereby commits to Sponsor to establish Loan
Commitments and to make Loans thereunder to such Borrowers as may be
designated by the Sponsor in its Funding Approval Notices during a
period commencing on the date hereof and ending on August 31, 2001 (the
"Commitment Termination Date") in an aggregate committed amount at any
one time outstanding not to exceed FIVE MILLION AND NO/100 DOLLARS
($5,000,000.00) (the "Commitment"); provided, that, notwithstanding any
provision of this Agreement to the contrary, at no time shall the
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sum of aggregate committed amounts of all Loan Commitments outstanding
pursuant to the Commitment, or, following the termination of any such
Loan Commitment, Loans outstanding thereunder, exceed the Commitment.
(b) Within the limits of the Commitment and in accordance with
the procedures set forth in this Agreement, the Sponsor may authorize
the Bank to establish a Loan Commitment in favor of a Franchisee Owner
who meets the credit criteria established by the Sponsor. The amount of
each Loan Commitment shall be determined by the Sponsor but shall not
be less than $100,000 for any Borrower and, in any event, shall be
subject to the aggregate Commitment herein before stipulated. Pursuant
to a Loan Commitment, the Bank shall agree to make Loans to the
Borrower thereunder. The Loans made to a particular Borrower shall be
evidenced by and secured under Loan Documents which shall be in form
and substance mutually satisfactory to Bank and Sponsor, and the Bank
shall prepare and distribute such Loan Documents to such Borrower and
shall arrange for such Borrower to execute and deliver the same, and
Bank shall provide Sponsor with copies of such Loan Documents if and to
the extent requested by Sponsor. All Loans made pursuant to a
particular Loan Commitment shall bear interest at the Borrower Rate
designated by Sponsor in the applicable Funding Approval Notice. Each
Loan may be prepaid in full or in part on any Business Day, without
premium or penalty. Each Loan Commitment shall be, initially, one year,
but shall automatically renew unless terminated by ninety (90) days'
prior written notice by Bank or the Sponsor to the Borrower prior to
the first anniversary date and may thereafter be terminated at any time
by Bank or the Sponsor upon ninety (90) days' prior written notice to
the Borrower or the Bank, as the case may be. Upon the termination of
any Loan Commitment, the Bank shall have no further obligation to make
Loans and any portion of a Loan Commitment not advanced prior to the
termination of the Loan Commitment will be forfeited by the Borrower.
The proceeds of each Loan made pursuant to the Loan Commitments shall
be used solely to make equity contributions towards capitalization of
the Franchisee owned by such Borrower.
(c) The Bank's obligation to establish each Loan Commitment
under the Operative Documents is subject to the fulfillment of the
following conditions as of the Closing Date of such Loan Commitment:
(i) this Agreement and each of the other Operative
Documents shall be in full force and effect;
(ii) the representations and warranties of the
Sponsor contained in Article 5 shall be true and correct in
all material respects with the same effect as though such
representations and warranties had been made on the Closing
Date of such Loan Commitment;
(iii) the Bank shall have received from the Sponsor a
Funding Approval Notice authorizing such Loan Commitment;
(iv) all precedents and conditions to the Loan
Commitment together with such additional precedents and
conditions as may, at Sponsor's election, be
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included in the applicable Funding Approval Notice, shall have
been completed to the Bank's reasonable satisfaction; and
(v) no Credit Event, Unmatured Credit Event, or
Wind-Down Event shall have occurred and be continuing.
(d) On the date of the execution and delivery of this
Agreement, Sponsor shall pay to the Bank a one-time closing fee in the
amount of $6,250.00 (the "Closing Fee") which amount shall be fully
paid and non refundable as of such date.
2.2 Funding of Loans; Loan Payment Dates.
(a) The initial Loan made pursuant to each Loan Commitment
shall be made by the Bank to Sponsor on behalf of the Borrower on the
Closing Date thereof in accordance with the instructions set forth in
the initial Loan Request. Thereafter, the Sponsor, on behalf of a
Borrower, may request no more than one (1) additional Loan per month
until the termination of the Loan Commitment; provided that, the
Sponsor shall not have the right to request -------- an additional Loan
if the making of such Loan to the Bank would cause such Borrower's Loan
Indebtedness to exceed such Borrower's Loan Commitment. Any amount of
the Loan Commitment not advanced prior to the termination of the Loan
Commitment shall be forfeited by the applicable Borrower on the last
day thereof. If the Borrower desires a Loan pursuant to its Loan
Commitment, the Borrower shall submit a duly executed Loan Request to
the Sponsor in writing (including by telecopy with original to follow
by U.S. Mail) at least five (5) Business Days prior to the requested
Loan, which Loan Request shall include the following information:
(i) the Borrower's legal name;
(ii) the amount of the Loan;
(iii) the proposed Loan Funding Date of, and the
length of the Interest Only Period applicable to, the Loan;
(iv) the instructions for funding such Loan.
The Bank shall have no obligation to make a Loan unless the Sponsor
gives its prior written consent thereto by executing such Loan Request
and forwarding such Loan Request to the Bank at least three (3)
Business Days prior to the date such disbursement is to be made. All
proceeds of Loans shall be funded to Sponsor on behalf of the Borrower,
or at the request of Sponsor, directly to the Borrower. If Sponsor
rejects the Loan Request, Sponsor shall notify the Borrower in writing
within two (2) Business Days of such rejection.
(b) The Bank shall fund the Loans and each applicable Borrower
shall repay the Loans made to it. Each Loan shall be repaid as follows:
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(i) Interest on principal shall be payable monthly,
commencing on the first Payment Date occurring after the Loan
Funding Date, and throughout the term of the Loan;
(ii) Commencing on the Payment Date of the first
month following the Conversion Date applicable to a Loan,
installments of principal shall be payable in amounts equal to
1/60th of the principal amount of the Loan funding on the Loan
Closing Date.
On or before the fifteen (15th) day of each calendar month, Bank shall
mail to each Borrower a statement of the principal and interest then due on such
Borrower's Loans. Payments of such principal and interest amount shall be due
and payable on the Payment Dates and all accrued and unpaid interest and all
outstanding principal on any Loan shall be due and payable in full on the
Maturity Date for such Loan.
(c) The Bank shall have the exclusive right to collect and
receive all such payments on the Loans from the Borrowers which are due
and owing to Bank. In the event that Sponsor receives any such payment
with respect to the Loans (other than with respect to Loans purchased
by Sponsor or where Sponsor has been subrogated to the rights of the
Bank pursuant to Section 9.13), such payments shall be accepted by
Sponsor as agent for the Bank and the Sponsor shall immediately endorse
and forward the same to the Bank.
(d) Payments on Loans received by Borrowers shall be allocated
as provided in Section 3.1 hereof.
2.3 Prepayment.
The Borrowers shall have the right to prepay their respective Loans in
whole or in part upon at least two (2) Business Days prior notice to
the Bank; provided that each full prepayment must be accompanied by all
accrued and unpaid interest which has become due and payable. Partial
prepayments of any Loan shall be applied to unpaid principal payments
in inverse order of maturity.
2.4 Default Interest.
If any amount payable to the Bank by the Borrower under the Operative
Documents is not paid on the date due hereunder, such amount shall bear
interest (to the extent permitted by law) for each day from such date
up to (but not including) the date of actual payment (after as well as
before judgment) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) equal to a rate
per annum of the Borrower Rate plus 4%.
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2.5 Voluntary Reduction of the Unutilized Commitment.
Upon at least three (3) Business Days' prior telephonic notice
(promptly confirmed in writing) to the Bank, Sponsor shall have the
right, without premium or penalty, to terminate the Commitment, in part
or in whole, provided that (i) any such termination shall apply to
permanently reduce the Commitment, (ii) any partial termination
pursuant to this Section 2.5 shall be in an amount of at least
$1,000,000 and integral multiples of $1,000,000, and (iii) the
Commitment may not be reduced if, as a result thereof, the amount of
the Commitment is less than the aggregate sum of all outstanding Loan
Commitments.
2.6 Late Payment Fees; Servicing Fee; Minimum Bank Interest; Calculation of
Interest and Fees.
(a) The Bank shall pay the Sponsor any and all late payment
fees collected by Bank from Borrowers, which payments shall be made
promptly after Bank's collection of such fees.
(b) All computations of interest and fees required in this
Agreement shall be performed by the Bank and shall be conclusive in the
absence of manifest error. If and to extent reasonably requested by the
Sponsor from time to time, the Bank shall provide the Sponsor with
supporting information for such calculations.
(c) On or before the fifteenth (15th) day of each calendar
month, the Bank shall be entitled to receive the Servicing Fee for the
immediately preceding month, which fee shall be payable in accordance
with paragraph (d) below.
(d) At the end of each calendar month, Bank shall calculate
the aggregate amount of interest actually received by it on all
outstanding Loans during such month (such amount being herein called
the "Borrower Interest") and shall also determine the amount of
interest that would have been received on the Loans during such month
had such interest been computed at the Adjusted LIBO Plus Rate rather
than the applicable Borrower Rate (such amount being herein called the
"Bank Interest"). Bank shall report to Sponsor in each Monthly
Servicing Report the difference between the Borrower Interest, on the
one hand, and the sum of the Bank Interest and the Servicing Fee for
such month, on the other hand. If the Borrower Interest for any month
shall be less than the sum of the Bank Interest and the Servicing Fee
for such month, Sponsor shall pay the Bank an amount equal to such
difference within ten (10) Business Days following the delivery date of
the Monthly Servicing Report for such month. In the event that the
Borrower Interest for any month exceeds the sum of the Bank Interest
plus the Servicing Fee for such month, Bank shall pay the Sponsor an
amount equal to such difference by no later than the tenth (10th)
Business Day following the delivery date of the Monthly Servicing
Report for such month.
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2.7 Wind-Down Events.
In the event that the Commitment is not extended for any reason and the
Commitment Termination Date occurs, then (x) the Sponsor shall not have
the right to request that any further Loan Commitments be established,
and (y) the Bank shall, within a reasonable period of time and in any
event no later than thirty (30) days after the Commitment Termination
Date, give notice to each of the Borrowers terminating the Loan
Commitments as of the date which is ninety (90) days after delivery of
such notice; provided, however, that the occurrence of such Wind-Down
Event shall not affect the obligation of (i) the Bank to make Loans
pursuant to existing Loan Commitments, except to the extent that the
Loan Commitments are terminated pursuant to clause (y) above or (ii)
the Credit Parties under the Operative Documents.
2.8 Reserve Requirements; Change in Circumstances; Change in Lending
Offices.
(a) Notwithstanding any other provision herein, if, by reason
of (i) after the date hereof, the introduction of or any change
(including any change by way of imposition or increase of reserve
requirements) in or in the interpretation of any law or regulation, or
(ii) the compliance with any guideline or request from any central bank
or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally
(whether or not having the force of law), any reserve (including any
imposed by the Federal Reserve Board), special deposit or similar
requirement (including a reserve, special deposit or similar
requirement that takes the form of a tax) against assets of, deposits
with or for the account of, or credit extended by, the Bank's office
through which it funds its obligations hereunder shall be imposed or
deemed applicable or any other condition affecting its obligation to
make or maintain the Loans at a rate based upon the Adjusted LIBO Rate
shall be imposed on the Bank or its office through which it funds its
obligations hereunder or the interbank eurodollar market; and as a
result thereof there shall be any increase in the cost to the Bank of
agreeing to make or making, funding or maintaining funds its
obligations hereunder (except to the extent already included in the
determination of the applicable Adjusted LIBO Rate), or there shall be
a reduction in the amount received or receivable by the Bank or its
office through which it funds its obligations hereunder, then the
Sponsor shall from time to time, upon written notice from and demand by
the Bank (with a copy of such notice and demand to the Bank), pay to
the Bank within five Business Days after the date specified in such
notice and demand, additional amounts sufficient to indemnify the Bank
against such increased cost. A certificate as to the amount of such
increased cost submitted to the Sponsor by the Bank, shall, except for
manifest error, be final, conclusive and binding for all purposes.
(b) If while the Commitment or any Loan Commitments are
outstanding, the Bank determines that the adoption of any law, rule or
regulation regarding capital adequacy or capital maintenance, or any
change in any of the foregoing or 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 the Bank (or any lending office of the Bank)
or the Bank's holding company with any request or directive regarding
capital adequacy or capital maintenance (whether or not having the
force of law) of any such authority, central bank or
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comparable agency, has or would have the effect of reducing the rate of
return on the Bank's capital or on the capital of the Bank's holding
company, if any, as a consequence of this Agreement or the Loan
Documents to a level below that which the Bank or the Bank's holding
company could have achieved but for such adoption, change or compliance
(taking into consideration the Bank's policies and the policies of the
Bank's holding company with respect to capital adequacy) by an amount
reasonably deemed by the Bank to be material, then from time to time,
within 15 days after written demand by the Bank, the Sponsor shall pay
to the Bank such additional amount or amounts as will compensate the
Bank or the Bank's holding company for such reduction. A certificate as
to the amount of any such additional amount or amounts, submitted to
the Sponsor by the Bank, shall, except for manifest error, be final,
conclusive and binding for all purposes.
(c) The Bank agrees that, if requested by the Sponsor, it will
use reasonable efforts (subject to overall policy considerations of the
Bank) to designate an alternate lending office with respect to any of
the Loans affected by the matters or circumstances described above to
reduce the liability of the Sponsor or avoid the results provided
thereunder, so long as such designation is not disadvantageous to the
Bank as determined by the Bank, which determination if made in good
faith, shall be conclusive and binding on all parties hereto. Nothing
in this Section 2.8(c) shall affect or postpone any of the obligations
of the Sponsor or any right of provided hereunder.
2.9 Payments.
(a) Each Borrower shall make each payment required to be made
by it hereunder and under any other Operative Document to the Bank not
later than 1:00 p.m. (Atlanta, Georgia time), on the date when due in
dollars to the Bank at its offices in Atlanta, Georgia in immediately
available funds.
(b) Whenever any payment hereunder or under any other
Operative Document shall become due, or otherwise would occur, on a day
that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case
be included in the computation of interest or Commitment Fees, if
applicable.
3. BANK'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS
3.1 Servicing of Loans.
(a) The Loan Documents for any Borrower's Loan shall not be
modified or waived without the consent of Bank and Sponsor.
(b) Bank shall service the Loan Commitments and the Loans in
the same manner in which it services loans of a similar type and size
which Bank makes for its own account.
(c) If and for so long as no Credit Event shall have occurred
and be continuing, Bank shall:
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(i) open and maintain files for the Loan
Documents for each Loan Commitment and receive and keep
records of all payments with respect to the Loans;
(ii) provide each Borrower with a monthly notice
of the principal and interest due on such Borrower's Loan;
(iii) provide each Borrower with a reminder notice
of any monthly payment on its Loans which is past due;
(iv) within five (5) days after any payment on
any Loan becomes more than 30 days past due, use good faith
efforts to provide the applicable Borrower with written notice
of such delinquency, which notice shall be sent by registered
mail with a copy to Sponsor;
(v) use good faith efforts to provide Sponsor on
each Business Day with a report by telecopy summarizing all
Loans made on such day, all payments received on the Loans on
such day, and the remaining available balance under each Loan
Commitment;
(vi) use good faith efforts to provide Sponsor
with a weekly report of all Defaulted Loans, which report
shall identify all Loans which are fifteen (15) days or more
past due;
(vii) provide the Sponsor with notice of any Loan
Default (other than a Loan Payment Default) of which the Bank
acquires actual knowledge (it being agreed that the Bank shall
acquire such knowledge only if and to the extent such Loan
Default becomes known to the person or persons within the Bank
who are primarily responsible for administering the Loan
Commitments and the Loans); and
(viii) provide to the Sponsor the Monthly Servicing
Reports required pursuant to Section 3.3 below.
3.2 Application of Payments.
(a) The Bank and the Sponsor shall instruct each Borrower to
make payments with respect to the Loans and the Loan Commitments
directly to the Bank, either by wire transfer or debit pursuant to a
Debit Authorization.
(b) If during any period when no Credit Event has occurred and
is continuing, amounts received by Bank are not capable of being
allocated to any specific Loan or, in the case of amounts allocable to
a specific Loan, are not sufficient to repay all obligations then due
and owing with respect thereto, such amount shall be applied by the
Bank as follows: (i) first, to the payment of accrued interest on the
outstanding Loans, (ii) second, to the payment of any Servicing Fees
owing hereunder, (iii) third, to the repayment of the Loans outstanding
under the Loan Commitments, (iv) fourth, to the payment of all other
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amounts owing to the Bank hereunder, and (v) fifth, if all obligations
of the Sponsor pursuant to the Operative Documents have been satisfied
in full, to the Sponsor.
(c) During any period when a Credit Event has occurred and is
continuing, any amounts received by Bank with respect to the Loan shall
be applied, after deduction of any expenses incurred and the collection
of any such amounts, as follows: (i) first, to the payment of any
accrued and unpaid Servicing Fees, (ii) second, to the payment of all
other amounts owing to the Bank hereunder, and (iii) thereafter, to
such Persons as may be legally entitled thereto.
(d) If no sooner repaid, all amounts due and payable to the
Bank under the Operative Documents shall be due and payable in full on
the Final Termination Date.
3.3 Servicing Reports.
(a) On each Payment Date, Bank shall provide to Sponsor by
telecopy a report in the form of Exhibit P attached hereto (a "Monthly
Servicing Report") setting forth the information required therein.
(b) Bank shall generate at the end of each calendar month, a
monthly loan account statement which shall be sent to each Borrower.
3.4 Sponsor Instructions.
If and for so long as no Credit Event shall have occurred and be
continuing, Bank shall comply with the instructions of Sponsor with
respect to modifications or waivers of the provisions of any of the
Loan Documents or with respect to the administration of the Loan
Commitments and the Loans; provided, however, that Bank shall not be
required to comply with any such instructions if and to the extent that
Bank reasonably determines that such compliance is contrary to the
terms of any of the Loan Documents or the Operative Documents, is
contrary to applicable law, or otherwise would expose Bank to possible
liability.
3.5 Amendments and Additional Loan Documents.
Bank shall not agree to any amendment of any Loan Documents without the
prior written approval of Sponsor unless (i) such amendment is
necessary to correct a typographical or other manifest error in such
Loan Document or to correct an immaterial ambiguity in such Loan
Document or (ii) a Credit Event shall have occurred and be then
continuing. Bank shall provide Sponsor with copies of any and all
amendments of the Loan Documents if and to the extent requested by
Sponsor.
3.6 Assignment of Loans.
If a Sponsor purchases a Loan from Bank pursuant to this Agreement, or
in the event that Sponsor reimburses Bank for expenses incurred by it
in connection with a proposed loan which was not closed and for which
Bank has not received such reimbursement from the applicable Borrower,
Bank shall be deemed to have assigned to Sponsor all of the Bank's
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rights and remedies against such Borrower, provided that such
Assignment shall be subject to the terms and conditions of Section 9.13
hereof.
4. LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND
4.1 Notice of Loan Defaults.
(a) Within fifteen (15) days after the occurrence of a Loan
Payment Default or after Bank obtains actual knowledge of any other
Loan Default, Bank shall use good faith efforts to send a notice of
Loan Default to the applicable Borrower and notice to Sponsor.
(b) Following the sending of such notice of Loan Default, Bank
shall as soon as is practicable, provide Sponsor with such other
information relating to the Defaulted Borrower and the Defaulted Loan
as Sponsor requests.
(c) Bank shall not be required to take any remedial action
against any Defaulted Borrower under a Defaulted Loan and shall not be
entitled to take any remedial action during any applicable Response
Period except as expressly provided herein.
4.2 Waiver or Cure By The Sponsor.
Unless a Credit Event or an Unmatured Credit Event has occurred and is
continuing, within the Response Period, the Sponsor shall be entitled
(but not obligated) to:
(a) in the case of a Loan Default, other than a Loan Payment
Default, waive such Loan Default by sending to the Bank a Default
Waiver Request, except as set forth in Section 4.4; provided however,
that the Sponsor shall not request a waiver of more than three (3) such
Loan Defaults in any one year period with respect to any Loan
Commitment; or
(b) in the case of a Loan Payment Default, to waive and cure
such Loan Payment Default; provided, however, that Sponsor shall not
waive and cure more than two (2) consecutive Loan Payment Defaults nor
waive and cure more than a total of four (4) Loan Payment Defaults in
any four year period, with respect to any Loan Commitment.
During a Response Period, the Bank shall refrain from taking
any legal action against the Defaulted Borrower under the Defaulted
Loan which is the subject of such Response Period, and from
accelerating payment of the Loan Indebtedness under such Defaulted
Loan, but the Bank shall cease funding any further Loans pursuant to
the Loan Commitment. If the Sponsor waives any Loan Default (other than
a Loan Payment Default) or waives and cures any Loan Payment Default
(subject to Section 4.4) prior to the expiration of a Response Period,
then as to each Loan Default so waived or waived and cured, the
Defaulted Borrower's and the Bank's respective rights and obligations
under the Loan Documents shall be restored to the same status as if
such waived Loan Default never occurred. In addition, if the Sponsor
takes over the operation of the business of a certain Franchisee that
is an "Established Franchisee Borrower" (as such term is defined in the
Existing Facility Agreement) as provided in Article 10 of the
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Existing Facility Agreement, the Bank shall refrain from exercising
remedies against the Borrower that owns such Franchisee for as long as
the "Bank" under the Existing Facility Agreement refrains from
exercising remedies against such Franchisee.
4.3 Defaulted Loan Guaranty Demand.
(a) In the event that following the end of a Response Period,
a Loan Payment Default is not cured or in the event that any other Loan
Default is not then waived, the Bank shall have the right at any time
thereafter to demand that Sponsor comply with its obligations with
respect to such Defaulted Loan set forth in Article 9.
(b) In the event that a Credit Event has occurred and is
continuing and Sponsor has not purchased all outstanding Loans
hereunder and fully cash-collateralized the amount of the aggregate
Loan Commitments, the Sponsor agrees that the Bank shall be released
from its obligations to the Sponsor hereunder with respect to
administering and enforcing all Loans and Loan Commitments and may
administer and enforce such Loans and Loan Commitments as it deems
appropriate, without regard to any limitations or restrictions set
forth herein (but subject to Article 3 in all events) or in any other
Operative Document.
4.4 No Waiver or Cure Available.
Notwithstanding anything contained in this Article to the contrary, the
Sponsor shall, within five (5) Business Days of its receipt of a
written demand from the Bank instructing it to do so, purchase the Loan
Indebtedness of any Loan and assume the Loan Commitment with respect to
a Defaulted Borrower whose Loan Default either arises from the
bankruptcy or insolvency of such Borrower or such Borrower's Franchisee
or the termination of the Franchise Agreement to which such Borrower's
Franchisee is a party.
5. REPRESENTATIONS AND WARRANTIES
The Sponsor (as to itself and each of the Consolidated Companies)
hereby represents and warrants to the Bank that:
5.1 Organization and Qualification.
The Sponsor and its Subsidiaries are corporations duly organized,
validly existing and in good standing under the laws of the State of
Georgia and the State of Delaware, as applicable; the Sponsor and its
Subsidiaries have the corporate power to own their property and to
carry on their business as now being conducted; and the Sponsor and its
Subsidiaries are duly qualified as foreign corporations to do business
and are in good standing in every jurisdiction in which the nature of
the business conducted by them makes such qualification necessary and
where failure to qualify would have a Materially Adverse Effect.
5.2 Sponsor's Powers.
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The execution, delivery and performance of this Agreement, the Guaranty
Agreement, the Amendment to Loan Agreement and each other Operative
Document required hereunder are within the Sponsor's or the Guarantors'
corporate powers, as the case may be, have been duly authorized by all
necessary shareholder or corporate action, and do not and will not
contravene or conflict with the terms of any charter, by-law or other
organizational papers of the Sponsor or any of its Subsidiaries, or any
indenture, agreement or undertaking to which the Sponsor or any of its
Subsidiaries is a party or by which the Sponsor or any of its
Subsidiaries is bound or affected.
5.3 Enforceability of Agreement and Other Operative Documents.
This Agreement is a legal, valid and binding agreement of the Sponsor,
enforceable against the Sponsor in accordance with its terms, and each
other Operative Document and any other instrument or agreement required
hereunder, when executed and delivered, will be similarly legal, valid,
binding and enforceable against the Sponsor and its Subsidiaries, as
applicable, in accordance with their respective terms.
5.4 Statutes, Judgments.
There is no law, statute, rule or regulation, nor is there any
judgment, decree or order of any court or agency binding on the Sponsor
or any of its Subsidiaries, which would be contravened by the
execution, delivery or performance of this Agreement (including,
without limitation, the interest payment and allocation provisions
hereof).
5.5 No Credit Event; Unmatured Credit Event or Change of Control.
No Credit Event or Unmatured Credit Event has occurred and is
continuing or will occur as a result of the incurring of any obligation
under this Agreement.
5.6 Possession of Franchises, Licenses, Etc.; Laws.
The Sponsor and its Subsidiaries possess all franchises, certificates,
licenses, permits and other authorizations from governmental political
subdivisions or regulatory authorities, and all patents, trademarks,
service marks, trade names, copyrights, licenses and other rights, free
from burdensome restrictions, that are necessary for the ownership,
maintenance and operation of any of their respective properties and
assets, and neither the Sponsor nor any of its Subsidiaries is in
violation in any material respect of any thereof.
5.7 Contingent Liabilities.
After due inquiry, there exists no material contingent liability or
obligation assertable against the Sponsor or its Subsidiaries that is
not identified and disclosed to the Bank in the consolidated financial
statements hereto delivered to Bank.
5.8 Compliance with Laws.
Each of the Sponsor and its Subsidiaries is in compliance in all
material respects with all applicable federal, state and local laws,
rules, regulations and orders, including, without
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limitation, all federal, state and local laws, rules, regulations and
orders relating to pollution, reclamation or protection of the
environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, or hazardous or
toxic materials or wastes into air, water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants
or hazardous or toxic materials or wastes, and all federal, state and
local laws, rules, regulations and orders relating to franchising
activities.
5.9 Representations and Warranties with Respect to Specific Loans.
The Sponsor represents and warrants to the Bank with respect to each
Loan Commitment established and each Loan made pursuant to the
Operative Documents that:
(a) The Franchise Agreement, the Master Note, the Loan
Agreement and each other Loan Document executed in connection with such
Loan Commitment each constitutes a valid and binding agreement of each
Borrower or guarantor party thereto and is enforceable against each
such party in accordance with its terms.
(b) The Master Note and accompanying Loan Documents executed
in connection with such Loan and delivered to the Bank are the only
contracts evidencing the transaction described therein and constitute
the entire agreement of the parties thereto with respect to such
transaction and Sponsor has not made any other promises, agreements or
representations and warranties with respect to the transactions
evidenced by such Master Note.
(c) The Master Note and each accompanying Loan Documents
executed in connection with such Loan is genuine and all signatures,
names, amounts and other facts and statements therein and thereon are
true and correct.
(d) All disclosures required to be made under applicable
federal and state law in connection with such Loan have been properly
and completely made with respect to each Master Note, the other Loan
Documents and the Loan and each such Master Note, other Loan Documents
and Loan is in full compliance with all applicable federal and state
laws, including without limitation, applicable state and federal usury
laws and regulations.
(e) The proceeds of each Master Note will be solely for the
purpose of financing the Franchisee Owner's equity contributions to the
Franchisee that such Franchisee Owner owns and is required to make
contributions to pursuant to the Franchise Agreement.
6. AFFIRMATIVE COVENANTS
The Sponsor covenants and agrees that it will, as long as the
Commitment is in effect or the Bank is committed to make Loans under any Loan
Documents and thereafter so long as any
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Loan remains outstanding or any Loan Commitment remains in effect under this
Agreement or Sponsor has any other unsatisfied obligations under the Operative
Documents:
6.1 Financial Statements, Reports and Other Financial Data.
The Sponsor will deliver to the Bank:
(a) as soon as practicable and in any event within forty-five
(45) days after the end of each calendar quarter (other than the last
calendar quarter) in each fiscal year, consolidated statements of
income, cash flow and retained earnings of the Sponsor and its
Subsidiaries for the period from the beginning of the current fiscal
year to the end of such calendar quarter, and consolidated balance
sheets of the Sponsor and its Subsidiaries as at the end of such
calendar quarter, setting forth in each case in comparative form
figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and certified by the Chief Financial Officer of
the Sponsor, subject to changes resulting from year-end adjustments;
(b) as soon as practicable and in any event within 90 days
after the end of each fiscal year (or as soon as made available by the
Sponsor's independent public accountants if availability is delayed
beyond such 90-day period for reasons beyond the Sponsor's control)
audited consolidated statements of income, cash flow and retained
earnings of the Sponsor and its Subsidiaries for such year, and an
audited consolidated balance sheet of the Sponsor and its Subsidiaries
as at the end of such year, setting forth in each case in comparative
form corresponding figures from the preceding annual statements, all in
reasonable detail and reasonably satisfactory in scope to the Bank, and
the consolidated financial statements shall be certified by independent
public accountants of recognized standing, selected by the Sponsor,
whose report shall be in scope and substance reasonably satisfactory to
Bank, and shall be certified by the Chief Financial Officer of the
Sponsor;
(c) along with the quarterly and annual reports required by
clauses (a) and (b) above, a certificate of the Chief Financial Officer
of the Sponsor certifying that no Event of Default exists and that no
event exists which with notice or the lapse of time or both would
become such an Event of Default;
(d) promptly upon receipt thereof, copies of any detailed
reports submitted to the Sponsor by its independent public accountants
in connection with each annual audit or interim review of the books of
the Sponsor or its Subsidiaries made by such accountants;
(e) promptly upon transmission thereof, copies of all
financial statements, proxy statements, notices and reports as the
Sponsor shall send to its shareholders and of all regular or periodic
reports which it is or may be required to file with the Securities and
Exchange Commission or any governmental department, bureau, commission
or agency succeeding to the functions of the Securities and Exchange
Commission; and
(f) with reasonable promptness, such other financial data as
the Bank may reasonably request.
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6.2 Payment.
The Sponsor will pay all sums due under this Agreement and the other
Operative Documents according to the terms hereof.
6.3 Notice of Credit Event, Unmatured Credit Event.
The Sponsor will immediately give notice to the Bank of any Credit
Event or Unmatured Credit Event.
6.4 Corporate Existence.
The Sponsor will maintain its corporate existence and good standing in
the jurisdiction of its incorporation, and the Sponsor will qualify and
remain qualified to do business as a foreign corporation in each
jurisdiction in which the nature of the business conducted by it or its
ownership of property makes such qualification necessary and where
failure to qualify would have a Materially Adverse Effect.
6.5 Compliance with Laws, Etc.
The Sponsor will comply, and cause each of its Subsidiaries to comply,
in all material respects with all applicable federal, state, and local
laws, rules, regulations and orders, including, without limitation, all
federal, state and local laws, rules, regulations and orders relating
to pollution, reclamation, or protection of the environment, including
laws relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants, or hazardous or toxic materials or wastes
into air, water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants or hazardous or toxic materials
or wastes, and all federal, state and local law, rules, regulations and
orders relating to franchising activities.
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7. NEGATIVE COVENANTS
NOT APPLICABLE.
8. CREDIT EVENTS AND REMEDIES
In the event that:
(a) The Sponsor defaults in the payment of any amount due
hereunder; or
(b) The Sponsor or any of its Subsidiaries defaults in any
payment of principal of or interest on any other obligation for a
material amount of money borrowed (or any material obligation under
conditional sale or other title retention agreement or any material
obligation secured by a purchase money mortgage or any material
obligation under notes payable or drafts accepted representing
extensions of credit) or defaults in the performance of any other
agreement, term or condition contained in any agreement under which any
such material obligation is created (or if any other default under any
such agreement shall occur and be continuing) if the effect of such
default is to cause, or to permit the holder or holders of such
obligation (or a trustee on behalf of such holder or holders) to cause,
such obligation to become due prior to its stated maturity (for
purposes of this subsection (b), an obligation shall be material if the
amount owed thereunder exceeds $500,000); or
(c) Any representation or warranty made by the Sponsor or any
of its Subsidiaries herein or in any writing furnished in connection
with or pursuant to this Agreement or other Operative Document shall be
false or misleading in any material respect on the date as of which
made; or
(d) The Sponsor defaults in the performance or observance of
any other agreement, term, condition or covenant contained herein and
such default shall continue for 30 days after the Sponsor knows or has
reason to know of any such default; or
(e) The Sponsor or any of its Subsidiaries makes an assignment
for the benefit of creditors or fails to pay its debts generally as
they become due; or
(f) Any order, judgment or decree is entered under any
Bankruptcy Law of any jurisdiction adjudicating the Sponsor or any of
its Subsidiaries bankrupt or insolvent; or
(g) The Sponsor or any of its Subsidiaries petitions or
applies to any tribunal for, or consents to, the appointment of, or
taking possession by, a trustee, receiver, custodian or liquidator or
similar official of the Sponsor or any of its Subsidiaries, or of any
substantial part of the assets of the Sponsor or any of its
Subsidiaries, or commences any proceedings (other than proceedings for
the voluntary liquidation and dissolution of a Subsidiary) relating to
the Sponsor or any of its Subsidiaries under the Bankruptcy Law of any
jurisdiction, whether now or hereafter in effect, or any such petition
or application is filed, or any such proceedings are commenced, against
the Sponsor or any of its Subsidiaries and the Sponsor or such
Subsidiary by any act indicates its approval thereof,
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consent thereto or acquiescence therein, or an order for relief is
entered in an involuntary case under the federal bankruptcy laws, as
now or hereafter constituted, or an order, judgment or decree is
entered appointing any such trustee, receiver, custodian, liquidator or
similar official, or approving the petition in any such proceedings,
and such order judgment, or decree remains unstayed and in effect for
more than 60 days; or
(h) Any order, judgment or decree is entered in any
proceedings against the Sponsor decreeing the dissolution of the
Sponsor and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(i) Any order, judgment or decree is entered in any
proceedings against the Sponsor or any of its Subsidiaries decreeing a
split-up of the Sponsor or such Subsidiary which requires the
divestiture of a substantial part, or the divestiture of assets, or
stock of a Subsidiary, which shall have contributed a substantial part
of consolidated net earnings for any of the three fiscal years most
recently ended, and such order, judgment or decree remains unstayed and
in effect for more than 60 days; or
(j) Any "Reportable Event" shall have occurred, or any finding
or determination shall be made with respect to a Plan under Section
4041(c) or (e) of ERISA, or any fact or circumstance shall occur with
respect to a Plan which, in the opinion of the Bank, provides grounds
for the commencement of any proceeding under Section 4042 of ERISA, or
any proceeding shall be commenced with respect to a Plan under Section
4042 of ERISA; or
(k) There shall exist or occur any default as provided under
the terms of any other Operative Document, or any Operative Document
ceases to be in full force and effect or the validity or enforceability
thereof is disaffirmed by or on behalf of Sponsor or any other Credit
Party, or at any time it is or becomes unlawful for Sponsor or any
other Credit Party to perform or comply with its obligations under any
Operative Document, or the obligations of Sponsor or any other Credit
Party under any Operative Document are not or cease to be legal, valid
and binding on Sponsor or any such Credit Party;
(l) The Sponsor or any of its Subsidiaries shall fail to make
any payment as and when such payment is due under the Synthetic Lease
Documents, or any other default, event or condition shall have occurred
or exist under the Synthetic Lease Documents, the effect of which is to
cause, or to permit the holder of the obligations of the Sponsor or any
such Subsidiary under the Synthetic Lease Documents to cause, the
obligations of the Sponsor or any of its Subsidiaries, or any portion
thereof, to become due prior to its stated maturity date or prior to
its regularly scheduled date of payment;
(m) There shall occur a Credit Event under the Existing
Facility Agreement; or
(n) There occurs a default under any other agreement, note or
loan agreement to which Sponsor (or any of its Subsidiaries) and Bank
(whether directly or as participant or assignee) are parties.
then upon the occurrence and during the continuation of any such event
(each, a "Credit Event"):
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the Bank may, take any or all of the following actions, without
prejudice to the rights of the Bank to enforce its claims against
Sponsor, any other Credit Party, any Borrower or other obligor with
respect to any Loan: (i) declare the Commitment terminated, whereupon
the Commitment shall terminate immediately and any unpaid Commitment
Fee shall forthwith become due and payable without any other notice of
any kind (with the express understanding that such termination of the
Commitment shall not result in a termination of the obligation of the
Bank to fund any Loan Commitment); (ii) demand that the Sponsor
purchase specified or all outstanding Loans and assume all Loan
Commitments by paying to the Bank the Loan Indebtedness of each Loan
and assuming the Bank's obligations under each Loan Commitment,
whereupon such amount shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Sponsor; and (iii) take any other action and
exercise any other remedy available by contract or at law; provided,
that, if a Credit Event specified in Sections 8(f) or (g) shall occur,
the result which would occur upon the giving of notice by the Bank to
any Credit Party, shall occur automatically without the giving of any
such notice.
In addition, the Bank may, to the extent authorized to do so pursuant
to the Loan Agreements (which authorization is limited to certain
specified Credit Events), (x) cease funding further Loans pursuant to
the Loan Commitments and (y) declare all Loan Indebtedness outstanding
pursuant to the Loan Commitments to be immediately due and payable in
accordance with the terms of the applicable Loan Documents and exercise
all rights and remedies provided under the Loan Documents.
9. GUARANTY
In addition to its obligations upon the occurrence of a Credit Event
and its other obligations pursuant to the Operative Documents, the Sponsor
hereby agrees as follows:
9.1 Unconditional Guaranty.
The Sponsor hereby unconditionally and irrevocably guarantees to the
Bank, and any transferee of the Bank, the full and prompt payment of
all of the Guaranteed Obligations relating to the Loans and all costs,
charges and expenses (including reasonable attorneys' fees) actually
incurred or sustained by the Bank in enforcing the obligations of the
Sponsor hereunder or the obligations of the Borrowers under the
applicable Loan Documents. If any portion of the Loan Indebtedness with
respect to any Defaulted Loan is not paid by the date specified herein,
Sponsor hereby agrees to and will immediately pay the same, without
resort by Bank to any other person or party. The obligation of Sponsor
to Bank hereunder is primary, absolute and unconditional, except as may
be specifically set forth herein. This is a guaranty of payment and not
of collection. The obligations of the Sponsor pursuant to this Article
9 shall be direct and immediate and constitute a guarantee which is
continuing in nature; and such obligations are not contingent on the
pursuit of any remedies against Borrower or other persons, OR on the
satisfaction or compliance by Bank with any of the obligations
covenants or agreements of Bank under this Agreement and such
obligations. Guarantor does hereby agree that if any Guaranteed
Obligation is not paid timely by a Borrower, or if any and all sums
which
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are now or may hereafter become due from a Borrower to Bank under the
Loan Documents are not paid or performed in accordance with their
terms, Guarantor will immediately make such payments, subject to any
limitations expressly set forth in this Agreement.
The Bank may, in the event that the obligations of the Sponsor with
respect to a Defaulted Loan have arisen hereunder, request that the
Sponsor purchase the Defaulted Loan from the Bank prior to the
acceleration of the Defaulted Loan and assume the Loan Commitment
pursuant to which such Defaulted Loan was made, pursuant to the terms
of the applicable Loan Documents for an amount equal to the Loan
Indebtedness with respect to such Defaulted Loan and such purchase by
the Sponsor, together with the assumption of the related Loan
Commitment, shall be deemed to be a payment hereunder in such amount.
9.2 Continuing Guaranty.
The obligations of the Sponsor pursuant to this Article 9 constitute a
guarantee which is continuing in nature and shall be effective with
respect to the full amount outstanding under all Guaranteed
Obligations, now existing or hereafter made or extended, regardless of
the amount.
9.3 Waivers.
The Sponsor hereby waives notice of Bank's acceptance of this Agreement
and the creation, extension or renewal of any Loans or other Guaranteed
Obligations. Sponsor hereby consents and agrees that, at any time or
times, without notice to or further approval from Sponsor, and without
in any way affecting the obligations of Sponsor hereunder, Bank may,
with or without consideration (i) release, compromise with, or agree
not to xxx, in whole or in part, any Borrower or any other obligor,
guarantor, endorser or surety on any Loans or any other Guaranteed
Obligations, (ii) renew, extend, accelerate, or increase or decrease
the principal amount of any Loans or other Guaranteed Obligations,
either in whole or in part, (iii) amend, waive, or otherwise modify any
of the terms of any Loans or other Guaranteed Obligations or of any
mortgage, deed of trust, security agreement, or other undertaking of
any of the Borrowers or any other obligor, endorser, guarantor or
surety in connection with any Loans or other Guaranteed Obligations,
and (iv) apply any payment received from Borrowers or from any other
obligor, guarantor, endorser or surety on the Loans or other Guaranteed
Obligations to any of the liabilities of Borrowers or of such other
obligor, guarantor, endorser, or surety which Bank may choose, subject,
however, to the rights of Sponsor to bring a separate action for any
breach of the Operative Documents pursuant to Section 9.10.
9.4 Additional Actions.
Subject to Section 9.10, Sponsor hereby consents and agrees that the
Bank may at any time or times, either with or without consideration,
surrender, release or receive any property or other Collateral of any
kind or nature whatsoever held by it or for its account securing any
Loans or other Guaranteed Obligations, or substitute any Collateral so
held by Bank for other Collateral of like or different kind, without
notice to or further consent
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from Sponsor, and such surrender, receipt, release or substitution
shall not in any way affect the obligations of Sponsor hereunder.
Subject to Section 9.10, Bank shall have full authority to adjust,
compromise, and receive less than the amount due upon any such
Collateral, and may enter into any accord and satisfaction agreement
with respect to the same as Bank may deem advisable without affecting
the obligations of Sponsor hereunder. Bank shall be under no duty to
undertake to collect upon such Collateral or any part thereof, and
Sponsor's obligations hereunder shall not be affected by Bank's alleged
negligence or mistake in judgment in handling, disposing of, obtaining,
or failing to collect upon or perfect a security interest in, any such
Collateral.
9.5 Additional Waivers.
Sponsor hereby waives presentment, demand, protest, and notice of
dishonor of any of the liabilities guaranteed hereby. Guarantor hereby
further waives and agrees not to assert or take advantage of (a) the
defense of the statute of limitations in any action hereunder or for
the collection of the indebtedness or the performance of any obligation
hereby guaranteed; (b) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of Guarantor or any
other person or entity, or the failure of Bank to file or enforce a
claim against the estate (either in administration, bankruptcy, or any
other proceeding) of Borrower or any other person or entity; (c) any
defense based on the failure of Bank to give notice of the existence,
creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of any other
person whomsoever, in connection with any obligation hereby guaranteed;
(d) any defense based upon an election of remedies by Bank which
destroys or otherwise impairs any subrogation rights of Guarantor or
the right of Guarantor to proceed against Borrower for reimbursement,
or both; (e) notwithstanding the application of Official Code of
Georgia Annotated ss. 10-7-24, any defense based upon failure of Bank
to commence an action against Borrower; (f) any duty on the part of
Bank to disclose to Guarantor any facts it may now or hereafter know
regarding Borrower; (g) any and all other notices whatsoever to which
Guarantor might otherwise be entitled except as otherwise expressly
required under this Agreement; (k) any defense based on lack of due
diligence by Bank in collection, protection or realization upon any
collateral securing the indebtedness evidenced by the Note; (l) any
defense based on the failure of Bank to comply with or satisfy any
obligations, agreements or covenants of Bank under this Agreement; and
(m) any other legal or equitable defenses whatsoever to which Guarantor
might otherwise be entitled. Bank shall not have any duty or obligation
(i) to proceed or exhaust any remedy against any Borrower, any other
obligor, guarantor, endorser, or surety on any Loans or other
Guaranteed Obligations, or any other security held by Bank for any
Loans or other Guaranteed Obligations, or (ii) to give any notice
whatsoever to Borrowers, Sponsor, or any other obligor, guarantor,
endorser, or surety on any Loans or other Guaranteed Obligations,
before bringing suit, exercising rights to any such security or
instituting proceedings of any kind against Sponsor, any Borrower, or
any of them, and Sponsor hereby waives any requirement for such actions
by Bank. Upon default by any Borrower and Bank's demand to Sponsor
hereunder, Sponsor shall be held and bound to Bank directly as
principal debtor in respect of the payment of the amounts hereby
guaranteed, such liability of Sponsor being joint and several with each
Borrower and all other obligors, guarantors, endorsers and sureties on
the Loans or other Guaranteed Obligations, subject, however, to the
rights of Sponsor to bring a separate action for any
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breach of the Operative Documents pursuant to Section 9.10.
9.6 Postponement of Obligations.
Until the Loan and other Guaranteed Obligations of any Borrower to the
Bank have been paid in full (i) all present and future indebtedness of
such Borrower to Sponsor (the "Subordinated Debt") is hereby postponed
to the present and future indebtedness of such Borrower to Bank, and
all monies received from such Borrower or for its account by Sponsor
with respect to such Subordinated Debt shall be received in trust for
Bank, and promptly upon receipt, shall be paid over to Bank in
accordance herewith until such Borrower's indebtedness to Bank is fully
paid and satisfied, all without prejudice to and without in any way
affecting the obligations of Sponsor hereunder; provided that unless a
Loan Default or Loan Payment Default has occurred and is continuing,
the Sponsor may accept and retain any payments made by any Borrower to
the Sponsor in the ordinary course of business, and (ii) Sponsor shall
not have any rights of subrogation or otherwise to participate in any
security held by the Bank for any Loan to such Borrower or any other
Guaranteed Obligations arising therefrom, and Sponsor hereby waives
such rights until such time as such Loan and other Guaranteed
Obligations have been paid in full to the Bank (whether by repurchase
by the Sponsor, pursuant to this Article 10 or otherwise).
9.7 Effect on Additional Guaranties.
The obligations of the Sponsor pursuant to this Article 10 are in
addition to, and are not intended to supersede or be a substitute for
any other guarantee, suretyship agreement, or instrument which Bank may
hold in connection with any Loans or other Guaranteed Obligations.
9.8 Reliance on Guaranty and Purchase Obligation; Disclaimer of Liability.
Sponsor expressly acknowledges and agrees that the Bank, in making its
credit decision with regard to the funding of the Loans, will rely
solely upon the guaranty and purchase obligation of Sponsor set forth
above and in Article 10 and that the Bank is not under any obligation
or duty to perform any credit analysis or investigation with regard to
the creditworthiness of any Borrower. In addition, the Bank expressly
disclaims any responsibility or liability for the authenticity of
signatures on any of the Loan Documents (other than the Bank's), the
authority of the Persons executing the Loan Documents (other than the
Bank) or the enforceability or compliance with laws of any of the Loan
Documents.
SPONSOR EXPRESSLY ACKNOWLEDGES AND AGREES THAT SPONSOR'S GUARANTY
OBLIGATIONS TO PURCHASE LOANS UNDER THIS AGREEMENT ARE ABSOLUTE AND
UNCONDITIONAL. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
SPONSOR'S OBLIGATION SHALL NOT BE AFFECTED BY THE EXISTENCE OF ANY
DEFAULT BY ANY BORROWER UNDER THE APPLICABLE LOAN DOCUMENTS, ANY
EXCHANGE, RELEASE OR NONPERFECTION OF ANY LIEN WITH RESPECT TO ANY
COLLATERAL SECURING PAYMENT OF ANY LOAN, THE SUBSTITUTION OR RELEASE OF
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ANY ENTITY PRIMARILY OR SECONDARILY LIABLE FOR ANY LOAN, ANY LACK OF
ENFORCEABILITY OF ANY LOAN DOCUMENT, ANY LAW, REGULATION, OR ORDER OF
ANY JURISDICTION AFFECTING ANY LOAN OR LOAN DOCUMENT OR THE RIGHTS OF
THE HOLDER THEREOF, ANY CHANGE IN THE CONDITION OR PROSPECTS OF ANY
BORROWER, INCLUDING WITHOUT LIMITATION, INSOLVENCY, BANKRUPTCY,
REORGANIZATION OR SIMILAR PROCEEDING, OR ANY OTHER CIRCUMSTANCE WHICH
MIGHT, BUT FOR THE PROVISIONS OF THIS PARAGRAPH, CONSTITUTE A LEGAL OR
EQUITABLE DISCHARGE OF SPONSOR'S OBLIGATIONS HEREUNDER. SPONSOR'S
OBLIGATIONS HEREUNDER SHALL NOT BE AFFECTED BY ANY SET-OFF OR CLAIM
WHICH IT MIGHT HAVE AGAINST THE BANK, WHETHER ARISING OUT OF THIS
AGREEMENT OR OTHERWISE, BUT SUBJECT TO SECTION 9.10 BELOW.
9.9 Reinstatement of Obligations.
The obligations of the Sponsor pursuant to the Operative Documents
shall continue to be effective or be reinstated, as the case may be, if
at any time payment or any part thereof, of principal of, interest on
or any other amount with respect to any Loan or any obligation of
Sponsor pursuant to the Operative Documents is rescinded or must
otherwise be restored by the Bank upon the bankruptcy or reorganization
of Sponsor, any Borrower or any guarantor or otherwise.
9.10 Right to Bring Separate Action.
Nothing contained in this Article 9 shall be construed to affect any
other right that Sponsor may otherwise have under this Agreement, or
any Operative Document or Loan Documents, at law or in equity to
institute an action or assert a claim against the Bank based upon a
breach of Bank's obligations set forth in the Operative Documents or
Loan Documents or to assert a compulsory counterclaim with respect
thereto and any waiver of notice or other matter set forth in this
Article 9 shall not affect Sponsor's right to seek damages arising from
the failure of the Bank to give such notice otherwise required by the
terms of the Operative Documents or Loan Documents.
9.11 Subordination of Liens.
The Sponsor hereby subordinates the lien and priority of the Sponsor's
existing and future liens and other interests, if any, in and to the
Collateral to the Bank's existing and future interest in the Collateral
under the Loan Documents notwithstanding the time of attachment of the
interests of the Sponsor or the Bank or the time the Loan Indebtedness
or the Subordinated Debt is incurred. Notwithstanding anything to the
contrary contained in this Agreement, under applicable law or
otherwise, in the event that the liens of the Bank are at any time
unperfected with respect to any or all of the Collateral, the lack of
perfection by the Bank as to any such Collateral shall not affect the
validity, enforceability or priority of any lien on the Collateral in
favor of the Sponsor. In any such event, the liens of the Sponsor shall
have priority over any and all other Liens in favor of any third party
with respect to the Collateral (including, but not limited to any
trustee under the Bankruptcy Code) and the Sponsor shall be, and is
hereby constituted,
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as the Bank's agent and bailee for purposes of perfection of the Liens
of the Bank in the Collateral such that the Lien in favor of the
Sponsor shall be held by the Sponsor for the benefit of the Bank and
the proceeds of any disposition of the Collateral of any Borrower shall
be and are in all respects subject to the priority of right to payment
and satisfaction of first, the Loan Indebtedness of such Borrower and
then, the Subordinated Debt with respect to such Borrower. The lien
priorities provided in this Section shall not be altered or otherwise
affected by any amendment, modification, supplement, extension,
renewal, restatement or refinancing of either the applicable Loan
Indebtedness or the Subordinated Debt, nor by any action or inaction
which either the Bank or the Sponsors may take or fail to take in
respect of the Collateral, except as otherwise provided above in this
subsection.
9.12 Exercise of Remedies With Respect to Collateral.
(a) Until the Loan Indebtedness of any Borrower has been fully
and indefeasibly paid in cash, the Sponsor shall not, without the prior
written consent of the Bank, ask, demand, assign, declare a default
under, xxx for, liquidate, sell, foreclose, set off, collect, accept a
surrender, petition, commence or otherwise initiate any bankruptcy
action (or join any other Person in so doing) against the Borrower or
its assets or otherwise realize or seek to realize upon all or any part
of the Collateral without the prior written consent of the Bank or as
expressly authorized hereunder. In the event that following the
occurrence of a Loan Default, the Bank may from time to time execute
releases, partial releases, terminations, reconveyances, subordinations
or other documents releasing or otherwise limiting the Bank's interests
in the Collateral in connection with the exercise of the Bank's
remedies or the refinancing of the Defaulted Loan, the Sponsor agrees
to execute and deliver at such time such further documents as the Bank
may require to effect a corresponding change to the Sponsor's position
in the same Collateral.
(b) In the event that the Loan Indebtedness of any Defaulted
Loan is not repaid or repurchased by the Sponsor as set forth herein,
the Bank, shall have the exclusive right to exercise and enforce all
privileges and rights with respect to the Collateral according to the
Bank's discretion and the exercise of its business judgment, including,
without limitation, the exclusive right to take or retake control or
possession of such Collateral and to hold, prepare for sale, process,
sell, lease, dispose of, or liquidate such Collateral.
(c) Only the Bank shall have the right to restrict or permit,
or approve or disapprove, the sale, transfer or other disposition of
Collateral following the occurrence of a Loan Default where the Loan
Indebtedness is not repaid or repurchased by the Sponsor in accordance
with the terms hereof. In the event the Bank releases its Liens on all
or any part of the Collateral, the Sponsor will, immediately upon the
request of the Bank, release its Liens upon the same Collateral, but
only to the extent such Collateral is sold or otherwise disposed of by
the Borrower with the consent of the Bank or in a commercially
reasonable manner by the Bank or its agents. The Sponsor will
immediately deliver such releases, acknowledgments and other documents
as the Bank may require in connection therewith.
9.13 Rights of Sponsor Upon Payment; Cooperation By Bank.
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Upon receipt by the Bank of payment in full of the Loan Indebtedness of
a Defaulted Loan by Sponsor, Sponsor shall be subrogated to the rights
of the Bank with respect to the Loan and the Bank shall be deemed to
have assigned to Sponsor, and Sponsor shall, to the extent permitted by
applicable law, automatically, immediately and without further action
by any Person, be entitled to, all rights and remedies that the Bank
may have had against the Defaulted Borrower and any other Persons
primarily or secondarily liable on such Defaulted Loan, including
without limitation the right to resort to any and all Collateral which
secures the Defaulted Loan. The Bank agrees that, upon receipt of
payment in full of the Loan Indebtedness, the Bank shall:
(a) execute on a timely basis, without recourse,
representation or warranty of any kind (except as to its own title),
all such instruments and documents as are reasonably requested in order
to evidence Sponsor's rights hereunder or permit Sponsor to exercise
such rights;
(b) permit Sponsor at reasonable times and as often as may be
reasonably requested to discuss with appropriate Bank employees and
officers the Bank's experience, relationships, books, accounts and
files and to review the Bank's loan files relating to the purchased
Defaulted Loan (and Sponsor hereby agrees to keep all such information
confidential); and
(c) otherwise reasonably cooperate with Sponsor in the
exercise of Sponsor's rights.
Sponsor shall reimburse the Bank for its expenses reasonably and
actually incurred in complying with this Section.
10. INDEMNIFICATION
10.1 Indemnification.
(a) In addition to the other rights of the Bank hereunder,
Sponsor hereby agrees to protect, indemnify and save harmless the Bank
and the officers, directors, shareholders, employees, agents and
representatives of the Bank (each an "Indemnified Party") from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs (including, without
limitation, reasonable attorney's fees and costs actually incurred),
expenses or disbursements of any kind or nature whatsoever, whether
direct, indirect, consequential or incidental, with respect to or in
connection with or arising out of (i) the execution and delivery of
this Agreement, any other Operative Document or any agreement or
instrument contemplated hereby or thereby, including without
limitation, the Loan Documents, the performance by the parties hereto
or thereto of their respective obligations hereunder or thereunder or
the consummation of the transactions contemplated hereby, (ii) the
making or administration of the Loan Commitments, the Loans or any of
them, including any violation of federal or state usury or other laws,
provided that with respect to clauses (i) and (ii), Sponsor shall have
no obligation to indemnify the Bank for more than one (1) counsel's
reasonable fees and expenses, (iii) the enforcement, performance and
administration of this Agreement or the Loan Documents or any powers
granted to the Bank hereunder or under any Loan
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Documents, (iv) any misrepresentation of the Sponsor hereunder, (v) any
matter arising pursuant to any Environmental Laws as a result of the
Collateral or (vi) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether
based on contract, tort or any other theory, whether or not the
Indemnified Party is a named party thereto, except to the extent that
such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnified Party or arise solely from the
nonpayment of any Loan Indebtedness notwithstanding the performance by
Sponsor of all of its obligations under the Operative Documents
relating to such Loan Indebtedness.
(b) Without limiting the generality of the foregoing, and
separate and apart from any obligation of Sponsor pursuant to Article
9, Sponsor agrees to indemnify and hold harmless each Indemnified Party
from and against, and on demand will pay or reimburse any Indemnified
Party for, any and all (i) liabilities arising from a breach of any
representation or warranty made by Sponsor hereunder (whether or not
Sponsor's obligations under Article 9 have been satisfied), (ii) any
breach by Sponsor of its agreements with the Borrowers, (iii) any
overadvance to any Borrower caused by the transfer of ACH transfer
instructions from the ATAC System to the Bank by Sponsor resulting in
aggregate advances to such Borrower in excess of the Loan Commitment to
such Borrower.
(c) This indemnity shall survive the termination of this
Agreement.
10.2 Notice Of Proceedings; Right To Defend.
(a) Any Person with an indemnification claim (or potential
claim) pursuant to Section 10.1 ("Potential Indemnitee") agrees to
notify Sponsor (the "Potential Indemnitor") in writing within a
reasonable time after receipt by it of written notice of the
commencement of any administrative, legal or other proceeding, suit or
action by a Person (other than Indemnitee or an affiliate thereof), if
a claim for indemnification may be made by the Potential Indemnitee
against the Potential Indemnitor under this Article 11.
(b) Following receipt by the Potential Indemnitor of any such
notice from a Potential Indemnitee, (an "Indemnity Notice"), the
Potential Indemnitor shall be entitled at its own cost and expense to
investigate and participate in the proceeding, suit or action referred
to in the Indemnity Notice. At such time as the Potential Indemnitor
shall have acknowledged in writing to the Potential Indemnitee that it
will pay any judgment, damages, or losses incurred by the Potential
Indemnitee in the proceeding, suit or action referred to in the
Indemnity Notice other than those for gross negligence or willful
misconduct on the part of the Potential Indemnitee (at which time the
"Potential Indemnitor" shall be deemed to be the "Indemnitor" and the
"Potential Indemnitee" shall be deemed to be the "Indemnitee"), the
Indemnitor shall be entitled, to the extent that it shall desire, to
assume the defense of such proceeding, suit or action, with counsel
reasonably satisfactory to the Indemnitee. If the Indemnitor shall so
assume the defense of such proceeding, suit or action, the Indemnitor
shall conduct such defense with due diligence and at its own cost and
expense.
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(c) In the event that the Indemnitor so assumes the defense
of such proceeding, suit or action, the Indemnitor shall not be
entitled to settle such proceeding, suit or action without the written
consent of the Indemnitee, provided that in the event that the
Indemnitee does not consent to such settlement not to be unreasonably
withheld or delayed (i) the Indemnitor's indemnification liability in
connection with such proceeding, suit or action shall not exceed the
amount of such proposed settlement and (ii) Indemnitee shall assume
and pay all costs and expenses, including reasonable attorneys' fees,
incurred by Indemnitor from the date that the Indemnitor presented the
Indemnitee the terms of the proposed settlement. An Indemnitor shall
not be liable to an Indemnitee for any settlement of a claim in any
proceeding, suit or other action referred to in an Indemnity Notice,
consented to by the Indemnitee without the consent of the Indemnitor.
(d) A Potential Indemnitor shall be liable to a Potential
Indemnitee for a settlement of a claim in any proceeding, suit or other
action referred to in an Indemnity Notice consented to by such
Potential Indemnitee only if (i) such Potential Indemnitor first had a
reasonable opportunity to investigate such claim and participate in
such proceeding, suit or action, (ii) the Potential Indemnitee gave the
Potential Indemnitor at least ten (10) Business Days notice of the
proposed terms of such settlement prior to entering into such
settlement and (iii) the Potential Indemnitor did not acknowledge in
writing to the Potential Indemnitee, by the expiration of such ten (10)
Business Days period, or such longer period as may be agreed to by the
Potential Indemnitee and Potential Indemnitor that it would pay any
judgment, damages or losses incurred by the Potential Indemnitee in
such proceeding suit or action.
10.3 Third Party Beneficiaries.
No Persons shall be deemed to be third party beneficiaries of this
Agreement. Except as expressly otherwise provided in this Agreement,
this Agreement is solely for the benefit of Sponsor and the Bank and
their respective successors and permitted assigns, and no other Person
shall have any right, benefit, priority or interest under, or because
of the existence of, this Agreement.
11. SURVIVAL OF LOAN FACILITY
The terms of this Loan Facility Agreement shall survive the termination
of the Commitment hereunder and the termination of any Loan Commitment
established pursuant the terms hereof until the indefeasible payment in full of
each of the Loans outstanding hereunder and Article 10 shall survive the
termination of this Agreement upon such repayment.
12. CONDITIONS PRECEDENT
The effectiveness of this Agreement and the amendment and restatement
of the Existing Facility Agreement, as well as the obligation of the Bank to
establish the initial Loan Commitment pursuant to this Agreement, is subject to
satisfaction of the following conditions:
12.1 Receipt of Documents.
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The Bank shall have received the following, each dated as of the
Effective Date, in form and substance satisfactory to the Bank:
(a) Duly executed counterparts of this Agreement.
(b) Duly executed counterparts of the Guaranty Agreement.
(c) A duly executed closing certificate of Sponsor, in form
and substance satisfactory to the Bank.
(d) A duly executed certificate of Sponsor identifying the
Authorized Signatories;
(e) Copies of the organizational papers of Guarantor,
certified as true and correct by the Secretary of State of its
respective State of incorporation, and certificates from the Secretary
of State of such State of incorporation certifying Sponsor's good
standing as a corporation in such State.
(f) A certificate of the Secretary or Assistant Secretary of
Guarantor certifying (i) the names and true signatures of the officers
of Sponsor authorized to execute the Guaranty Agreement, this
Agreement, the Servicing Agreement and the other Operative Documents to
be delivered hereunder to which each is a party, (ii) the bylaws of
Sponsor, and (iii) the resolutions of the Board of Directors of
Sponsor, respectively, approving the Operative Documents to which each
is a party and the transactions contemplated hereby.
(g) A favorable written opinion of Xxxxxxxxxx Xxxxxxxx, LLP,
counsel for Sponsor, in a form satisfactory to the Bank and covering
such matters relating to the transactions contemplated hereby as the
Bank may reasonably request.
(h) All corporate and other proceedings taken or to be taken
in connection with the transactions contemplated hereby and all
documents incident hereto or delivered in connection therewith shall be
satisfactory in form and substance to the Bank.
13. MISCELLANEOUS
13.1 Notices.
All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, telecopy or similar
teletransmission or writing) and shall be given to such party at its
address or applicable teletransmission number set forth on the
signature pages hereof, or such other address or applicable
teletransmission number as such party may hereafter specify by notice
to the Bank and Sponsor. Each such notice, request or other
communication shall be effective (i) if given by telex, when such telex
is transmitted to the telex number specified in this Section and the
appropriate answer back is received, (ii) if given by mail, 72 hours
after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (iii) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate confirmation is received, or (iv) if
given by any other means (including,
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without limitation, by air courier), when delivered or received at the
address specified in this Section; provided that notices to the Bank
shall not be effective until received.
13.2 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or the other
Operative Documents, nor consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Bank (and in the case of any amendment, the
applicable Credit Party), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose
for which given. Notwithstanding the foregoing, no amendment, waiver or
consent shall, unless in writing and signed by the Bank affect the
rights or duties of the Bank under this Agreement or under any other
Operative Document or Loan Document.
13.3 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Bank in exercising any right or
remedy hereunder or under any other Operative Document, and no course
of dealing between any Credit Party and the Bank shall operate as a
waiver thereof, nor shall any single or partial exercise of any right
or remedy hereunder or under any other Operative Document preclude any
other or further exercise thereof or the exercise of any other right or
remedy hereunder or thereunder. The rights and remedies herein
expressly provided are cumulative and not exclusive of any rights or
remedies which the Bank would otherwise have. No notice to or demand on
any Credit Party not required hereunder or under any other Operative
Document in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Bank to any other or further
action in any circumstances without notice or demand.
13.4 Payment of Expenses, Etc. Sponsor shall:
(a) whether or not the transactions hereby contemplated are
consummated, pay all reasonable, out-of-pocket costs and expenses of
the Bank in the administration (both before and after the execution
hereof and including reasonable expenses actually incurred relating to
advice of counsel as to the rights and duties of the Bank with respect
thereto) of, and in connection with the preparation, execution and
delivery of, preservation of rights under, enforcement of, and, after a
Unmatured Credit Event or Credit Event, refinancing, renegotiation or
restructuring of, this Agreement and the other Operative Documents and
the documents and instruments referred to therein, and any amendment,
waiver or consent relating thereto (including, without limitation, the
reasonable fees actually incurred and disbursements of counsel for the
Bank); and
(b) Pay and hold the Bank harmless from and against any and
all present and future stamp, documentary, and other similar Taxes with
respect to this Agreement, the Loan Documents and any other Operative
Documents, any collateral described therein, or any payments due
thereunder, and save the Bank harmless from and against any and all
liabilities with respect to or resulting from any delay or omission to
pay such Taxes.
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13.5 Right of Setoff.
In addition to and not in limitation of all rights of offset that the
Bank may have under applicable law, the Bank shall, upon the occurrence
of any Credit Event and whether or not the Bank has made any demand or
any Credit Party's obligations have matured, have the right to
appropriate and apply to the payment of any Credit Party's obligations
hereunder and under the other Operative Documents, all deposits of any
Credit Party (general or special, time or demand, provisional or final)
then or thereafter held by and other indebtedness or property then or
thereafter owing by the Bank or other holder to any Credit Party,
whether or not related to this Agreement or any transaction hereunder.
13.6 Benefit of Agreement; Assignments; Participations.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto, provided that Sponsor may not assign or transfer
any of its interest hereunder without the prior written consent of the
Bank.
(b) The Bank may grant a participation in the Commitment and
the Loans held by it to any financial institution, provided, however,
that no participant shall have any direct rights hereunder.
(c) The Bank may make, carry or transfer Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate
of the Bank.
(d) The Bank may at any time assign all or any portion of its
rights in this Agreement to a Federal Reserve Bank; provided that no
such assignment shall release the Bank from any of its obligations
hereunder.
13.7 Governing Law; Submission to Jurisdiction.
(A) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF) OF THE STATE OF GEORGIA.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER OPERATIVE DOCUMENT MAY BE BROUGHT IN THE
SUPERIOR COURT OF XXXXXX COUNTY, GEORGIA, OR ANY OTHER COURT OF THE
STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN
DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
SPONSOR HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE TRIAL BY JURY, AND
SPONSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION
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TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION
OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) Nothing herein shall affect the right of the Bank or any
Credit Party to commence legal proceedings or otherwise proceed against
Sponsor in any other jurisdiction.
13.8 Counterparts.
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
13.9 Severability.
In case any provision in or obligation under this Agreement or the
other Operative Documents shall be invalid, illegal or unenforceable,
in whole or in part, in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
13.10 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or
be otherwise within the limitation of, another covenant, shall not
avoid the occurrence of a Unmatured Credit Event or an Credit Event if
such action is taken or condition exists.
13.11 No Joint Venture.
Nothing in this Agreement or any of the Loan Documents shall be
construed as constituting Sponsor and the Bank as partners or joint
venturers or as creating the relationship of employer and employee,
master and servant, principle and agent, or franchisor or franchisee
between Sponsor and the Bank. Neither Sponsor nor Bank shall have any
right or authority to bind the other party or to assume or create any
obligation or responsibility, express or implied, on behalf of the
other party or in the other party's name. All rights, duties and
obligations under this Agreement and the Operative Documents are
exclusively for the benefit of Sponsor and the Bank, as the case may
be, and shall not be deemed to affect any agreement between either of
such parties and any third party (including, without limitation, any
Borrower).
13.12 Repurchase Right.
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Sponsor may at any time (upon thirty (30) days' prior written notice to
Bank) purchase from Bank all Loans and assume all Loan Commitments and
all rights, titles and interests of the Bank in and to the Loan
Documents and the Collateral relating thereto for a purchase price
(payable in immediately available funds) equal to the aggregate Loan
Indebtedness, plus all amounts otherwise owing by the Sponsor pursuant
to the Operative Documents, and the Bank shall assign, without
recourse, representation or warranty (except as to its own title), its
right, title and interest therein to Sponsor upon the Bank's receipt of
such purchase price. Thereafter, Bank shall have no responsibility with
respect to any Loans or Loan Commitments.
13.13 Effect on Existing Loans and Loan Commitments; Execution of New Loan
Documents.
Upon the Effective Date all loan commitments established by the Bank in
favor of certain Franchisee Owners and loans made pursuant to such loan
commitments, all as more particularly described on Schedule 13.13 (such
loan commitments described on Schedule 13.13 shall be referred to
herein as the "Prior Loan Commitments" and such loans referred to in
Schedule 13.13 shall be referred to herein as the "Prior Loans") prior
to the Effective Date of this Agreement shall be deemed to be Loans
Commitments and Loans outstanding pursuant to the Commitment. Sponsor
and Bank hereby acknowledge and agree that the Prior Loan Commitments
and Prior Loans shall be subject in all respects to terms and
provisions of this Agreement.
13.14 Confidentiality.
The Bank agrees that it will maintain in confidence and will not
disclose, publish or disseminate, to any Person, any confidential
information which it has or shall acquire during the term of this
Agreement relating to the business, operations and condition, financial
or otherwise of the Sponsor or any Borrower, except that such
information may be disclosed by the Bank if and to the extent that:
(i) such information is in the public domain at
the time of disclosure;
(ii) such information is required to be disclosed
by subpoena or similar process of applicable law or
regulations;
(iii) such information is required to be disclosed
to any regulatory or administrative body or commission to
whose jurisdiction the Bank or any of its Affiliates may be
subject;
(iv) such information is disclosed to counsel,
auditors or other professional advisors to the Bank or to
affiliates of the Bank provided that such affiliates agree to
keep such information confidential as set forth herein;
(v) such information is disclosed with the prior
written consent of the Sponsor or the relevant Borrower, as
the case may be, which consent shall not be unreasonably
withheld or delayed;
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(vi) such information is disclosed in connection
with any litigation or dispute between the Bank and the
Sponsor or any Borrower concerning the Operative Documents or
the Loan Documents of such Borrower;
(vii) such information is disclosed in connection
with a prospective assignment, grant of a participation
interest in or other transfer by the Bank of any of its
interest in the Operative Documents, provided that the Person
to whom such information shall be disclosed shall have agreed
to keep such information confidential as set forth herein;
(viii) such information was in the possession of
such Person or such Person's affiliates without obligation of
confidentiality prior to the Borrower furnishing it to such
Person; or
(ix) such information is received by the Bank,
without restriction as to its disclosure or use, from a
Person, who, to the Bank's knowledge or reasonable belief, was
not prohibited from disclosing it by any duty of
confidentiality.
The Bank agrees to use its best efforts to give the Sponsor prompt
notice of any subpoena or similar process referred to in clause (ii)
above, provided that the Bank shall have no liability in event such
notice is not given.
13.15 Headings Descriptive; Entire Agreement.
The headings of the several sections and subsections of this Agreement
are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement. This
Agreement, the other Operative Documents, and the agreements and
documents required to be delivered pursuant to the terms of this
Agreement constitute the entire agreement among the parties hereto and
thereto regarding the subject matters hereof and thereof and supersede
all prior agreements, representations and understandings related to
such subject matters.
13.16 Time. Time is of the essence of this Agreement and the performance of
all agreements and covenants described herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
Address for Notices: XXXXX RENTS, INC.
000 Xxxx Xxxxx Xxxxx Xxxx, XX By:
Xxxxxxx, Xxxxxxx 00000 --------------------------------
Attn: Xxxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxxxxxx
Telecopy: 000-000-0000 Executive Vice President and
Chief Financial Officer
Attest:
----------------------------
Name:
-----------------------
Title:
----------------------
[Corporate Seal]
Address for Notices: SOUTHTRUST BANK,
an Alabama Banking Corporation
000 X. Xxxxxxxxx Xxxxxx, X.X.
Xxx Xxxxxxx Xxxxxx - 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx Xxxxxxxx, V.P. By:
Telecopy No.: (000) 000-0000 --------------------------------
Name:
------------------------------
Title:
-----------------------------
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EXHIBIT A: COMMITMENT
EXHIBIT B: CORPORATE AUTHORIZATION
EXHIBIT C: LOAN REQUEST
EXHIBIT D: FRANCHISEE GUARANTY
EXHIBIT E: FUNDING APPROVAL NOTICE
EXHIBIT F: LOAN COMMITMENT -- BORROWERS
EXHIBIT G: MASTER NOTE
EXHIBIT H: PLEDGE AGREEMENT
EXHIBIT N: FRANCHISE GUARANTY
EXHIBIT O: RESERVED
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TABLE OF CONTENTS
1. DEFINITIONS..................................................................................... 1
1.1 Definitions. In addition to the other terms defined herein, the following terms used herein
shall have the meanings herein specified (such meanings to be equally applicable to both the
singular and plural forms of the terms defined)................................................. 1
1.2 Accounting Terms and Determination.............................................................. 9
1.3 Other Definitional Terms........................................................................ 9
1.4 Exhibits and Schedules.......................................................................... 9
2. LOAN FACILITY................................................................................... 9
2.1 Establishment of the Commitment; Loans; Closing Fee............................................. 9
2.2 Funding of Loans; Loan Payment Dates............................................................ 11
2.3 Prepayment...................................................................................... 12
2.4 Default Interest................................................................................ 12
2.5 Voluntary Reduction of the Unutilized Commitment................................................ 13
2.6 Late Payment Fees; Servicing Fee; Minimum Bank Interest; Calculation of Interest and Fees....... 13
2.7 Wind-Down Events................................................................................ 14
2.8 Reserve Requirements; Change in Circumstances; Change in Lending Offices........................ 14
2.9 Payments........................................................................................ 15
3. BANK'S SERVICING OBLIGATIONS; DISTRIBUTION OF PAYMENTS.......................................... 15
3.1 Servicing of Loans.............................................................................. 15
3.2 Application of Payments......................................................................... 16
3.3 Servicing Reports............................................................................... 17
3.4 Sponsor Instructions............................................................................ 17
3.5 Amendments and Additional Loan Documents........................................................ 17
3.6 Assignment of Loans............................................................................. 17
4. LOAN DEFAULT; RIGHT TO MAKE GUARANTY DEMAND..................................................... 18
4.1 Notice of Loan Defaults......................................................................... 18
4.2 Waiver or Cure By The Sponsor................................................................... 18
4.3 Defaulted Loan Guaranty Demand.................................................................. 19
4.4 No Waiver or Cure Available..................................................................... 19
5. REPRESENTATIONS AND WARRANTIES.................................................................. 19
5.1 Organization and Qualification.................................................................. 19
5.2 Sponsor's Powers................................................................................ 19
5.3 Enforceability of Agreement and Other Operative Documents....................................... 20
5.4 Statutes, Judgments............................................................................. 20
5.5 No Credit Event; Unmatured Credit Event or Change of Control.................................... 20
5.6 Possession of Franchises, Licenses, Etc.; Laws.................................................. 20
5.7 Contingent Liabilities.......................................................................... 20
5.8 Compliance with Laws............................................................................ 20
5.9 Representations and Warranties with Respect to Specific Loans................................... 21
6. AFFIRMATIVE COVENANTS........................................................................... 21
6.1 Financial Statements, Reports and Other Financial Data.......................................... 22
6.2 Payment......................................................................................... 23
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6.3 Notice of Credit Event, Unmatured Credit Event.................................................. 23
6.4 Corporate Existence............................................................................. 23
6.5 Compliance with Laws, Etc....................................................................... 23
7. NEGATIVE COVENANTS.............................................................................. 24
8. CREDIT EVENTS AND REMEDIES...................................................................... 24
9. GUARANTY........................................................................................ 26
9.1 Unconditional Guaranty.......................................................................... 26
9.2 Continuing Guaranty............................................................................. 27
9.3 Waivers......................................................................................... 27
9.4 Additional Actions.............................................................................. 27
9.5 Additional Waivers.............................................................................. 28
9.6 Postponement of Obligations..................................................................... 29
9.7 Effect on Additional Guaranties................................................................. 29
9.8 Reliance on Guaranty and Purchase Obligation; Disclaimer of Liability........................... 29
9.9 Reinstatement of Obligations.................................................................... 30
9.10 Right to Bring Separate Action.................................................................. 30
9.11 Subordination of Liens.......................................................................... 30
9.12 Exercise of Remedies With Respect to Collateral................................................. 31
9.13 Rights of Sponsor Upon Payment; Cooperation By Bank............................................. 31
10. INDEMNIFICATION................................................................................. 32
10.1 Indemnification................................................................................. 32
10.2 Notice Of Proceedings; Right To Defend.......................................................... 33
10.3 Third Party Beneficiaries....................................................................... 34
11. SURVIVAL OF LOAN FACILITY....................................................................... 34
12. CONDITIONS PRECEDENT............................................................................ 34
12.1 Receipt of Documents............................................................................ 34
13. MISCELLANEOUS................................................................................... 35
13.1 Notices......................................................................................... 35
13.2 Amendments, Etc................................................................................. 36
13.3 No Waiver; Remedies Cumulative.................................................................. 36
13.4 Payment of Expenses, Etc. Sponsor shall:....................................................... 36
13.5 Right of Setoff................................................................................. 37
13.6 Benefit of Agreement; Assignments; Participations............................................... 37
13.7 Governing Law; Submission to Jurisdiction....................................................... 37
13.8 Counterparts.................................................................................... 38
13.9 Severability.................................................................................... 38
13.10 Independence of Covenants....................................................................... 38
13.11 No Joint Venture................................................................................ 38
13.12 Repurchase Right................................................................................ 38
13.13 Effect on Existing Loans and Loan Commitments; Execution of New Loan Documents.................. 39
13.14 Confidentiality................................................................................. 39
13.15 Headings Descriptive; Entire Agreement.......................................................... 40
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