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PARTICIPATION AGREEMENT
dated as of October 10, 2000
among
O'CHARLEY'S INC.,
as Lessee,
FIRST AMERICAN BUSINESS CAPITAL, INC.
as Lessor,
AMSOUTH BANK,
as Agent,
and
THE LENDERS SET FORTH
AS SIGNATORIES HERETO,
as Noteholders
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TABLE OF CONTENTS
Section Heading Page
------- ------- ----
SECTION 1. DEFINITIONS.................................................1
SECTION 2. PARTICIPATION IN THE ACQUISITION, CONSTRUCTION, FINANCING
AND LEASE OF THE PROPERTIES; ISSUANCE OF NOTES..............1
2.1.(a) Loans.......................................................1
2.2. Transactions to Occur on the HQ Closing Date................2
2.3. Transactions to Occur on Each Restaurant Closing Date.......3
2.4. The Notes...................................................4
SECTION 3. REPRESENTATIONS AND WARRANTIES..............................5
3.1. Representations and Warranties of Lessor....................5
3.2. Representations and Warranties of Lessee....................7
3.3. Opinion Acknowledgment.....................................12
SECTION 4. CONDITIONS PRECEDENT.......................................12
4.1. Conditions Precedent to Closing............................12
4.3. Conditions Precedent to Each Restaurant Acquisition........16
4.4. Conditions Precedent to Each Restaurant Improvement
Advance..................................................20
4.5. Conditions Precedent to HQ Closing.........................21
4.6. Conditions Precedent to Each HQ Expansion Advance..........24
SECTION 5. COVENANTS..................................................25
5.1. Covenants of Lessee........................................25
5.2. Covenants of Lessor........................................31
SECTION 6. ADVANCES AND LESSOR INVESTMENT.............................32
6.1. Terms of Advances and Lessor Investment....................32
6.2. Interest and Investment Yield..............................33
6.3. Interest and Investment Yield..............................33
6.4. Payments...................................................35
6.5. Assignments/Participations.................................39
SECTION 7. INDEMNITY; WALK AWAY EVENT.................................40
7.1. General Indemnification and Waiver of Certain Claims.......40
SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT; NONDISTURBANCE..........47
SECTION 9. EVENTS OF DEFAULT; REMEDIES................................49
9.1. Events of Default..........................................49
9.2. Remedies...................................................51
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Section Heading Page
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SECTION 10. AGENT......................................................53
10.1. Authorization and Action...................................53
10.2. Agent Not Liable...........................................53
10.3. Rights as Holder...........................................54
10.4. Holder Credit Decision.....................................54
10.5. Indemnification............................................55
10.6. Successor Agent............................................55
SECTION 11. MISCELLANEOUS..............................................55
11.1. Amendments and Waivers.....................................55
11.2. Survival...................................................56
11.3. Notices....................................................56
11.4. Successors and Assigns.....................................57
11.5. Business Day...............................................57
11.6. GOVERNING LAW..............................................57
11.7. Severability...............................................57
11.8. Counterparts...............................................57
11.9. Headings and Table of Contents.............................57
11.10. Tax and Accounting Matters.................................57
11.11. Limitations of Liability...................................58
11.12. Transaction Costs; Fees....................................58
11.13. Operative Documents; Further Assurances....................59
11.14. Exculpation................................................59
11.15. Waiver of Trial by Jury....................................60
11.16. Benefit....................................................60
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ATTACHMENTS TO PARTICIPATION AGREEMENT
Appendix A - Definitions and Rules of Usage
Schedule 1 - Noteholders' Addresses and Percentages
Schedule 2 - Pricing Grid
Schedule 3 - Form of Construction Budget
Schedule 4 - States of Incorporation of Subsidiaries
Schedule 5 - States in which Borrower and Subsidiary are Qualified to
Transact Business.
Schedule 6 - Stock Ownership
Schedule 7 - Changes in Names, Principal Office etc
Schedule 8 - Addresses of Offices of Borrower and Subsidiaries
Schedule 9 - Pending Litigation
Schedule 10 - Compliance with Laws
Schedule 11 - Existing Indebtedness
Schedule 12 - Leased Restaurant Facilities
Schedule 13 - Existing Investments
Schedule 14 - Insider Loans
Schedule 15 - Existing Sale/Leaseback Transaction
Schedule 16 - Affiliated Transactions
Exhibit A - Form of A-Note
Exhibit B - Form of B-Note
Exhibit C - Freezer Lease
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PARTICIPATION AGREEMENT
This PARTICIPATION AGREEMENT, dated as of October 10, 2000 (this
"AGREEMENT"), among O'CHARLEY'S INC., a Tennessee corporation having an address
at 0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 ("LESSEE" and "CONSTRUCTION
AGENT"), FIRST AMERICAN BUSINESS CAPITAL, INC., a Tennessee corporation having
an address at AmSouth Center, Xxxxxxxxx, Xxxxxxxxx 00000 ("LESSOR"), AMSOUTH
BANK, a banking association having an address at AmSouth Center, Xxxxxxxxx,
Xxxxxxxxx 00000, in its capacity as agent for the Noteholders ("AGENT"), and
the lender parties signatory hereto (the "NOTEHOLDERS").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the parties hereto desire to enter into this Agreement in
order to undertake certain obligations and to clarify certain of their
obligations pursuant to the Operative Documents.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used in this Agreement (including the
foregoing preamble and recitals) and not otherwise defined herein shall have
the respective meanings specified in APPENDIX A hereto unless the context
hereof shall otherwise require. All references to Sections, Schedules and
Exhibits herein are to Sections, Schedules and Exhibits of this Agreement
unless otherwise indicated.
SECTION 2. PARTICIPATION IN THE ACQUISITION, CONSTRUCTION,
FINANCING AND LEASE OF THE PROPERTIES; ISSUANCE
OF NOTES
2.1.(a) LOANS.
(i) ADVANCES. Subject to the terms and conditions of
this Agreement, the Noteholders have agreed to make Advances,
severally and not jointly, to the Lessor in an aggregate principal
amount of up to $24,250,000 to acquire the HQ Property, construct the
HQ Expansion and acquire, develop and construct various Restaurant
Properties, in each case in accordance with the terms of this
Agreement, the Agency Agreement and the other Operative Documents, and
to pay other Project Costs, and in consideration of such Advances, the
Lessor will issue the A-Notes and B-Notes to the Noteholders.
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(ii) COLLATERAL. The notes and the obligations of the
Lessor under this Agreement and the other Operative Documents shall be
secured by inter alia, (i) a perfected, first priority mortgage lien
or deed of trust on each Property, (ii) a perfected, first priority
assignment of the Lease with respect to each Property, (iii) a
perfected, first priority assignment of the Lessor's right, title and
interest in, to and under the Agency Agreement, granted pursuant to
the Assignment of Documents and (iv) a perfected, first priority
security interest in all items of personal property owned by the
Lessor and comprising a portion of each Property.
(iii) GUARANTY. The indebtedness evidenced by the A-Notes
shall be guaranteed by the Lessee to the extent set forth in the
A-Note Guaranty.
(iv) LESSOR INVESTMENT. Subject to the terms and
conditions of this Agreement, on each Advance Date, the Lessor shall
fund an amount equal to the Lessor Percentage of the total Project
Costs requested by the Construction Agent in the applicable
Requisition for such Advance Date (the "LESSOR INVESTMENT") which
Lessor Investment shall be used to pay a portion of the applicable
Project Costs simultaneously and pro rata with the Advances by the
Noteholders.
(b) TIME AND PLACE OF CLOSING. The Closing shall commence at
10:00 a.m. EST on the Closing Date at such place as the parties may
agree upon in writing.
(i) the Construction Agent and Lessor shall execute and
deliver the Agency Agreement;
(ii) the Subsidiary Guarantors shall execute and deliver
the Subsidiary Guaranty;
(iii) Agent, Lessor and the Noteholders shall enter into
the Intercreditor Agreement;
(iv) Lessor shall create, issue, sell and deliver to the
Noteholders the A-Notes and the B-Notes in accordance with each
Noteholder's Commitment Percentage with respect to each such Series;
(v) Lessee shall execute and deliver the A-Note
Guaranty; and
(vi) Lessor and Lessee shall execute and deliver the
Lease.
2.2. TRANSACTIONS TO OCCUR ON THE HQ CLOSING DATE. Subject to the
satisfaction or waiver of the conditions precedent set forth in SECTION 4.5, on
the HQ Closing Date:
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(a) each Noteholder shall make an Advance to, or as directed by,
Lessor, for each Series held by such Noteholder, in the manner
provided in SECTION 6 and in an amount equal to the product of (i) the
applicable Series Percentage, (ii) the HQ Acquisition Costs and (iii)
such Noteholder's Commitment Percentage with respect to such Series
but in no event shall the aggregate of all Advances, including all
Advances not yet funded, but requested in a Requisition, of any
Noteholder exceed such Noteholder's Maximum Commitment Amount;
(b) Lessor shall make an investment (a "LESSOR INVESTMENT") (to
be contributed as equity and obtained by Lessor from the shareholders
of Lessor, it being intended that these amounts are in addition to the
funds advanced by the Noteholders pursuant to SECTION 2.2 (A) above)
toward the purchase of the HQ Property equal to the product of (i) the
Lessor Percentage and (ii) the HQ Acquisition Costs;
(c) Lessor (i) shall acquire good and marketable fee simple title
in the HQ Property (excluding, however, the Freezer Improvements,
which shall not be conveyed to Lessor and shall continue to be owned
by Lessee notwithstanding anything set forth herein or in any of the
Operative Documents to the contrary) free and clear of all Liens other
than Permitted Encumbrances, (ii) by execution and delivery of the HQ
Mortgage and the UCC-1 Financing Statements provided for therein,
shall grant to Agent a first priority mortgage lien on and security
interest in the HQ Property, subject only to the Permitted
Encumbrances, as security for the repayment of the Notes and Lessor
Investment, (iii) shall enter into with Lessee a Lease Supplement and
a Memorandum of Lease with respect to the HQ Property (provided,
however, that the Freezer Land shall be expressly excluded therefrom,
it being agreed that the Freezer Land shall be leased separately to
Lessee pursuant to the Freeze Lease), and (iv) shall execute and
deliver the Freezer Lease in the form attached hereto as Exhibit C;
and
(d) Lessee (i) shall cause to be conveyed to Lessor good and
marketable fee simple title in and to the HQ Property, subject only to
the Permitted Encumbrances, and (ii) shall execute and deliver a Lease
Supplement and a Memorandum of Lease for the HQ Property and (iii)
shall execute and deliver the Freezer Lease.
2.3. TRANSACTIONS TO OCCUR ON EACH RESTAURANT CLOSING DATE.
Subject to the satisfaction or waiver of the conditions precedent set forth in
SECTION 4.3, on each Restaurant Closing Date:
(a) each Noteholder shall make an Advance to, or as directed by,
Lessor, for each Series held by such Noteholder, in the manner
provided in SECTION 6 and in an amount equal to the product of (i) the
applicable Series Percentage (ii) the Restaurant Property Acquisition
Costs and (iii) such Noteholder's Commitment Percentage with
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respect to such Series but in no event shall the aggregate of all
Advances, including, all Advances not yet funded but requested in a
Requisition, of any Noteholder exceed such Noteholder's Maximum
Commitment Amount;
(b) Lessor shall make a Lessor Investment (to be contributed as
equity and obtained by Lessor from the shareholders of Lessor, it
being intended that these amounts are in addition to the funds
advanced by the Noteholders pursuant to SECTION 2.3(A) above) toward
the purchase of the applicable Restaurant Property in an amount equal
to the product of (i) the Lessor Percentage and (ii) the Restaurant
Property Acquisition Costs; and
(c) Lessor (i) shall acquire good and marketable fee simple title
in the applicable Restaurant Land or shall enter into a ground lease
in form and substance satisfactory to Agent, pursuant to which Lessor
shall acquire a valid and subsisting leasehold estate in such
Restaurant Land, in either case, free and clear of all Liens other
than Permitted Encumbrances, (ii) by execution and delivery of a
Mortgage and UCC-1 Financing Statements specified therein with respect
to such Restaurant Land, shall grant to Agent a first priority
mortgage lien on and security interest in the Lessor's fee or
leasehold interest, as the case may be, in the applicable Restaurant
Land and the improvements located at such Restaurant Land subject only
to the Permitted Encumbrances, as security for the repayment of the
Notes and Lessor Investment and (iii) will enter into with Lessee a
Lease Supplement and a Memorandum of Lease with respect to such
Restaurant Property;
(d) Lessee shall enter into a Lease Supplement and a Memorandum
of Lease with Lessor with respect to such Restaurant Land, in form and
substance satisfactory to Agent, pursuant to which Lessee shall
acquire a valid and subsisting leasehold estate in such Restaurant
Land.
2.4. THE NOTES.
(a) Two series of notes (each, a "SERIES") of Notes are hereby
created which Notes shall be designated as "A-NOTES" and "B-NOTES" and
collectively referred to as the "NOTES." The A-Notes shall each be
substantially in the form attached hereto as EXHIBIT A. The B-Notes
shall each be substantially in the form attached hereto as EXHIBIT B.
(b) The Notes shall be dated the date of issuance thereof
hereunder, shall bear interest on the then outstanding unpaid
principal amount thereof as provided in SECTION 6.3 until paid in
full, and shall bear interest on any overdue principal, premium, if
any, and interest, at the Default Rate.
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2.5. THE LESSOR INVESTMENT. All amounts that the Lessor shall be
required to make as a Lessor Investment as provided in the Operative Documents
shall be contributed to Lessor from the shareholders of Lessor as equity and
not from the proceeds of the issuance of the Notes.
2.6 THE HQ EXPANSION. Anything to the contrary provided herein
notwithstanding, nothing herein or in any of the Operative Documents shall
require Lessee to request that Lessor finance the HQ Expansion under this
Agreement and the other Operative Documents unless Lessee elects to do so in
its sole discretion.
SECTION 3. REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF LESSOR. Lessor represents
and warrants to each other party hereto that:
(a) ORGANIZATION. Lessor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Tennessee
and has full corporate power and authority to carry on its business as
now conducted, and has the full power, authority and legal right to
execute, deliver and perform its obligations hereunder and under the
other Operative Documents to which it is a party and has full power,
authority and legal right under the laws of the State of Tennessee to
execute, deliver and perform its obligations under each of the
Operative Documents to which it is a party Lessor has not changed its
name, been the surviving corporation in a merger, acquired any
business, or changed its jurisdiction of incorporation.
(b) AUTHORITY. Lessor has duly authorized, executed and delivered
this Agreement and each other Operative Documents to which it is a
party to be delivered on the Closing Date;
(c) VALIDITY. This Agreement constitutes, and the Notes, the
Lease, the Mortgage and each of the other Operative Documents to which
Lessor is a party, when executed and delivered, will constitute, a
legal, valid and binding obligation of Lessor, enforceable against it,
in accordance with their respective terms, subject to laws generally
affecting the enforcement of creditors' rights;
(d) APPROVALS. Neither the execution, delivery and performance by
Lessor of the Operative Documents to which it is a party, nor the
consummation by Lessor of any of the transactions contemplated hereby
or thereby, nor the compliance by Lessor with any of the terms and
provisions hereof and thereof, (A) requires any approval of its
stockholders, or any approval or consent of or notice to any trustees
or holders of any indebtedness or obligations of it, or (B) violates
its articles of incorporation or by-laws,
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or contravenes or will contravene any provision of, or constitutes a
default under, or results in any breach of, or results in the creation
of any Lien (other than Permitted Encumbrances) upon its property
under any indenture, mortgage, chattel mortgage, deed of trust,
conditional sale contract, bank loan or credit agreement, license or
other agreement or instrument to which it is a party or by which it is
bound, or contravenes any Applicable Law (with respect to execution
and delivery) or any Tennessee or any judgment or order applicable to
or binding on it;
(e) TAXES. There are no Taxes payable by Lessor imposed by the
United States of America, any state or any political subdivision
thereof in connection with (A) the execution and delivery by Lessor of
this Agreement, the Notes, the Mortgages or the other Operative
Documents to which Lessor is a party or (B) the acquisition of its
interests in the Properties (other than franchise or other taxes based
on or measured by any fees or compensation received by Lessor for
services rendered in connection with the transactions contemplated
hereby) solely because Lessor is a corporation having its principal
office located in Nashville, Tennessee;
(f) NO LITIGATION. There is no litigation, proceeding or action
pending or, to the best of the knowledge of Lessor, threatened,
against Lessor before any Governmental Authority which individually or
in the aggregate, if determined adversely to it, would materially
adversely affect the ability of Lessor to perform its obligations
under this Agreement, the Notes or the other Operative Documents to
which it is a party;
(g) CONSENTS. No consent, approval, order or authorization of,
giving of notice to, or registration with, or taking of any other
action in respect of, any State of Tennessee or United States
Governmental Authority is required for the execution and delivery of,
or the performance by, Lessor of any of the transactions contemplated
hereby or of any of the transactions contemplated by any of the other
Operative Documents to which Lessor is a party, other than any such
consent, approval, order, authorization, registration, notice or
action as has been duly obtained, given or taken;
(h) LESSOR LIENS. (A) From and after the HQ Closing Date, the HQ
Property and (B) from and after each Restaurant Closing Date, the
applicable Restaurant Property shall be free of any Lessor Liens
attributable to Lessor and Lessor agrees that it will promptly cause
any such Lessor Lien to be duly discharged and removed at its own cost
and expense and not out of its interest in the Properties. Lessor, at
its own expense and not out of its interest in the Properties, shall
indemnify, protect, save and hold harmless Lessee, the Noteholders,
Agent, and their respective assigns, successors, servants and agents,
from and against any reduction in the amount payable out of the
Properties to the Noteholders, or any other loss, liability,
obligation, damage, penalty, claim, action, suit, disbursement, cost
or expense of whatsoever kind and nature (including reasonable legal
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fees and expenses) imposed on, asserted against or incurred by the
Noteholders, Agent or Lessee as a result of the imposition or
enforcement of any such Lessor Lien;
(i) CHIEF EXECUTIVE OFFICE. The chief executive office (as such
term is used in Section9-103 and 9-401 of the Uniform Commercial Code)
and principal place of business of Lessor is located at AmSouth
Center, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000; and
(j) NO DEFAULT. NoDefault or Event Default has occurred and is
continuing under this Agreement or any of the other Operative
Documents to which Lessor is a party.
(k) INVESTMENT COMPANY. Lessor is not an "investment company" or
a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
(l) NO OFFERING. Except as contemplated by the Operative
Documents, Lessor has not offered (and on the Closing Date and each
Restaurant Closing Date will not have offered) any interest in the HQ
Property, any Restaurant Property, the Notes, the Mortgages or the
Lease, to, or solicited any offer to acquire any of the same from, any
Person, in violation of Section 5 of the Securities Act, nor has it
authorized any Person to take any such action, and Lessor has not
taken (and on the Closing Date and each Restaurant Date shall not have
taken) any action that would subject any interest in the HQ Property,
any Restaurant Property, the Notes, or the Lease to the registration
requirements of Section 5 of the Securities Act.
(m) MARGIN REGULATIONS. No proceeds from any Advance will be used
for any purpose that requires any Noteholder to deliver or obtain any
certification under, or comply with, any margin requirement or other
provision of Regulations T, U and X of the Board of Governors of the
Federal Reserve System.
3.2. REPRESENTATIONS AND WARRANTIES OF LESSEE. Lessee represents
and warrants to each other party hereto that:
(a) ORGANIZATION. Lessee is a corporation duly organized, validly
existing and in good standing under the Laws of the State of
Tennessee. Each of Lessee's Subsidiaries is a corporation or limited
liability company duly organized, validly existing and in good
standing under the Laws of its state of incorporation or formation,
all as set forth in SCHEDULE 4 attached hereto. Lessee and each such
Subsidiary has the lawful power to own its properties and to engage in
the business it conducts, and each is duly qualified and in good
standing as a foreign corporation or limited liability company, as
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applicable, in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification
necessary. The states in which Lessee and each Subsidiary are
qualified to do business are set forth in SCHEDULE 5 attached hereto.
The percentage of Lessee's ownership of the outstanding stock of each
Subsidiary is as listed in SCHEDULE 6 attached hereto. Neither Lessee
nor any Subsidiary has changed its name, been the surviving
corporation in a merger, acquired any business, or changed its
principal executive office or jurisdiction of incorporation since
April 21, 1994, except as set forth in SCHEDULE 7 attached hereto. The
addresses of all places of business of Lessee and each such Subsidiary
are as set forth in SCHEDULE 8 attached hereto.
(b) NO CONFLICT. Neither Lessee nor any Subsidiary is in material
default with respect to any of its existing Indebtedness, and the
making and performance of this Agreement, the Lease and the other
Operative Documents to which Lessee or such Subsidiary is a party will
not (immediately, or with the passage of time or the giving of notice,
or both):
(i) cause Lessee or any Subsidiary to be in material
default thereunder on account thereof;
(ii) violate the charter or bylaw provisions of Lessee or
any Subsidiary, or violate any Applicable Laws or result in a
default under any contract, agreement, or instrument to which
Lessee or any Subsidiary is a party or by which Lessee or any
Subsidiary or its property is bound; or
(iii) result in the creation or imposition of any security
interest in, or Lien (other than liens created pursuant to
the Operative Documents) upon, any of the assets of Lessee or
any Subsidiary.
(c) DUE AUTHORIZATION. Lessee has the power and authority to
enter into and perform this Agreement, the Lease and the other
Operative Documents, as applicable, and to incur the obligations
herein and therein provided for, and has taken all corporate action
necessary to authorize the execution, delivery, and performance of
this Agreement, the Lease and the other Operative Documents to which
it is a party.
(d) VALIDITY. This Agreement, the Lease and the other Operative
Documents executed as of the date hereof are, and the Lease
Supplements when delivered will be, valid, binding and enforceable
against Lessee in accordance with their respective terms, subject to
laws generally affecting the enforcement of creditors' rights.
(e) NO LITIGATION. Except as disclosed in SCHEDULE 9 attached
hereto, there is no pending or, to Lessee's knowledge, threatened
order, notice, claim, litigation,
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proceeding or investigation against or affecting Lessee or any
Subsidiary, whether or not covered by insurance, that would involve,
in the aggregate, the payment by Lessee or any Subsidiary of Two
Hundred Fifty Thousand Dollars ($250,000.00) or more or have a
material adverse effect on the Lessee, any Subsidiary or any of their
respective operations if adversely determined. Upon the request by
Agent, Lessee shall provide Agent with copies of all pleadings and
other documents filed in any of the matters disclosed in said
Schedule.
(f) FINANCIAL STATEMENTS. The Financial Statements, including any
schedules and notes pertaining thereto, have been prepared in
accordance with GAAP, and fully and fairly present in all material
respects the financial condition of Lessee and its Subsidiaries at the
dates thereof and the results of operations for the periods covered
thereby, and there have been no material adverse changes in the
financial condition or business of Lessee and its Subsidiaries taken
as a whole from July 9, 2000 to the date hereof.
(g) FINANCIALS BRING-DOWN. Lessee and its Subsidiaries have no
material Indebtedness of any nature, including, but without
limitation, liabilities for Taxes or any interest or penalties
relating thereto, except to the extent reflected (in a footnote or
otherwise) and reserved against in the Financial Statements, or as
disclosed in or permitted by this Agreement. Lessee does not know, and
has no knowledge of any basis for the assertion against it or any
Subsidiary, of any material Indebtedness of any nature not fully
reflected and reserved against in the Financial Statements.
(h) TAXES. Lessee and each of its Subsidiaries have filed all
federal, state and local tax returns and other reports they are
required by Applicable Law to file prior to the date hereof and which
are material to the conduct of their respective businesses, have paid
or caused to be paid all Taxes that are due and payable prior to the
date hereof, and have made adequate provision for the payment of such
Taxes that are accruing but not yet payable. Lessee has no knowledge
of any deficiency or additional assessment in a materially important
amount in connection with any Taxes not provided for on its books.
(i) COMPLIANCE WITH LAW. Except as otherwise disclosed in
SCHEDULE 10 attached hereto, or except to the extent that the failure
to comply would not materially interfere with the conduct of the
business of Lessee and its Subsidiaries taken as a whole, Lessee and
its Subsidiaries have complied, in all material respects, with all
Applicable Law with respect to: (i) any restrictions, specifications,
or other requirement pertaining to products that Lessee or any
Subsidiary sells or to the services each performs, (ii) the conduct of
their respective businesses, (iii) the use, maintenance, and operation
of the properties owned or leased by them, in the conduct of their
respective businesses and (iv) health, safety, worker's compensation
and equal employment opportunity.
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(j) ENVIRONMENTAL. Lessee and its Subsidiaries and their
respective assets and operations are in compliance in all material
respects with all Environmental Laws, and Lessee and its Subsidiaries
will comply, in all material respects, with all such Environmental
Laws and regulations which may be imposed in the future. All
facilities and properties of Lessee and its Subsidiaries are and will
be in all material respects, in a clean and healthful condition, free
of asbestos and of all contamination by Hazardous Materials and other
potentially harmful chemical or physical conditions, including,
without limitation, any contamination of the air, soil, groundwater or
surface waters associated with such facilities and properties. There
are no storage tanks (whether above or below ground) located in or on
such facilities and properties. No Hazardous Materials intended for
use or generated at any such facilities or properties have been or are
used, stored, treated or disposed of in violation of Applicable Laws
and regulations. All Hazardous Materials which have been removed,
released or emitted from any of such facilities or properties were and
are documented, transported and disposed of in compliance in all
material respects with all Applicable Laws and regulations; and
neither Lessee nor any Subsidiary is a defendant in any administrative
or judicial action alleging liability under the Comprehensive
Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), or any other Environmental Law, nor has Lessee or any
Subsidiary received a notice that it is a potentially responsible
party under CERCLA, similar state laws, or any other Environmental
Law.
(k) REPRESENTATIONS. No representation or warranty by Lessee or
any Subsidiary contained herein or in any certificate, Exhibit or
Schedule furnished by Lessee or any Subsidiary pursuant to this
Agreement contains any untrue statement of material fact or omits to
state a material fact necessary to make such representation or
warranty not misleading in light of the circumstances under which it
was made.
(l) CONSENTS. Each consent, approval or authorization of, or
filing, registration or qualification with, any Person required to be
obtained or effected by Lessee or any Subsidiary in connection with
the execution and delivery of this Agreement or the other Operative
Documents to which it is a party or the undertaking or performance of
any obligation thereunder has been duly obtained or effected.
(m) INDEBTEDNESS. All existing Indebtedness of Lessee or any
Subsidiary (i) for money borrowed or (ii) secured by any security
agreement, mortgage, or agreement covering the lease of real or
personal property by Lessee or any Subsidiary as lessee, is described
on SCHEDULE 11 attached hereto.
(n) RESTAURANT LEASES. All lease agreements for restaurant
facilities operated by Lessee or its Subsidiaries are described on
SCHEDULE 12 attached hereto.
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(o) ERISA. All Defined Benefit Pension Plans, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
of Lessee and each Subsidiary meet, as of the date hereof, the minimum
funding standards of Section 302 of ERISA, and no Reportable Event or
Prohibited Transaction, as such terms are defined in ERISA, has
occurred with respect to any such plan.
(p) TITLE TO ASSETS. Upon consummation of the transactions
contemplated by this Agreement and the other Operative Documents on
the Closing Date and each Restaurant Closing Date, Lessor shall hold
good and marketable fee title to or a valid and subsisting leasehold
estate in each of the Properties, in either case, free and clear of
all liens except Permitted Encumbrances. Without limiting the
immediately preceding sentence, Lessee and each Subsidiary has good
and marketable fee title or a valid and subsisting leasehold estate,
as the case may be, as of the date of each of its financial statements
delivered hereunder, to all of its material assets reflected therein
free and clear of all Liens except those permitted under the Bank
Credit Agreement.
(q) CHIEF EXECUTIVE OFFICE. The chief executive office (as such
term is used in Sections 9-103 and 9-401 of the Uniform Commercial
Code) and principal place of business of Lessee and where Lessee keeps
its records concerning the HQ Property and where Lessee shall keep its
records concerning the Restaurant Properties, and the transactions
contemplated hereby and by the other Operative Documents is located at
0000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
(r) NO DEFAULT. No Default or Event of Default has occurred and
is continuing.
(s) INVESTMENT COMPANY. Neither Lessee nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(t) NO OFFERING. Except as contemplated by the Operative
Documents, Lessee has not offered (and on the Closing Date and each
Restaurant Closing Date will not have offered) any interest in the HQ
Property, any Restaurant Property, the Notes, the Mortgages or the
Lease, to, or solicited any offer to acquire any of the same from, any
Person, in violation of Section 5 of the Securities Act, nor has it
authorized any Person to take any such action, and Lessee has not
taken (and on the Closing Date and each Restaurant Date shall not have
taken) any action that would subject any interest in the HQ Property,
any Restaurant Property, the Notes, or the Lease to the registration
requirements of Section 5 of the Securities Act.
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(u) MARGIN REGULATIONS. No proceeds from any Advance will be used
for any purpose that requires any Noteholder to deliver or obtain any
certification under, or comply with, any margin requirement or other
provision of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System.
(v) BROKER. Lessee has not retained any broker, finder or
financial advisor (except that AmSouth Bank has been retained to
structure, arrange and syndicate the synthetic lease facility
contemplated by this Agreement pursuant to a separate agreement) in
connection with the transactions contemplated by the Operative
Documents, and there is no real estate broker or agent to whom a
commission is due by Lessor or Lessee as a result of the acquisition
by Lessor of any interest in (i) the HQ Property or (ii) any
Restaurant Property, except with respect to any broker identified in a
written notice by Lessee to Lessor and Agent prior to the applicable
Restaurant Closing Date to whom Lessee or any of its Subsidiaries has
agreed to pay a brokerage commission customary in the locale in which
the applicable Restaurant Property is located, which Lessee shall
cause to be paid in full upon the applicable Restaurant Closing Date.
(w) DUE AUTHORIZATION OF EACH SUBSIDIARY. Each Subsidiary has the
power and the authority to enter into and perform the Subsidiary
Guaranty and to insure the obligations therein provided for, and have
taken all corporate or limited liability company, as applicable,
action necessary to authorize the execution, delivery and performance
of the Subsidiary Guaranty.
(x) VALIDITY WITH RESPECT TO SUBSIDIARIES. The Subsidiary
Guaranty, when executed and delivered, will be binding and enforceable
against each Subsidiary party thereto in accordance with its terms,
subject to laws generally affecting the enforcement of creditor's
rights.
3.3. OPINION ACKNOWLEDGMENT. Each of the parties hereto, with
respect to such party, expressly consents to the rendering by its counsel of
the applicable opinion referred to in SECTION 4.1 and acknowledges that such
opinion shall be deemed to be rendered at the request and upon the instructions
of such party, each of whom has consulted with and has been advised by its
counsel as to the consequences of such request, instructions and consent.
SECTION 4. CONDITIONS PRECEDENT
4.1. CONDITIONS PRECEDENT TO CLOSING. The obligation of Lessor,
Agent and the Noteholders to enter into the transactions contemplated in
SECTION 2 shall be subject to fulfillment of the following conditions (other
than such conditions that are the responsibility of such party hereunder) on or
before the Closing Date:
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(a) OPERATIVE DOCUMENTS IN FULL FORCE AND EFFECT. The Operative
Documents described in SECTION 2.1(B) hereof shall have been duly
authorized, executed and delivered by the parties thereto (except that
the execution and delivery of the documents referred to above by a
party hereto shall not be a condition precedent to such party's
obligations hereunder), shall each be in full force and effect and
executed counterparts of each shall have been delivered to each such
party or its counsel.
(b) CORPORATE DOCUMENTS. Agent shall have received such documents
and evidence with respect to Lessee, the Subsidiary Guarantors and
Lessor, as Agent may reasonably request in order to establish that the
consummation of the transactions contemplated by this Agreement and
the other Operative Documents, the taking of all corporate and other
proceedings in connection therewith and compliance with the conditions
herein or therein set forth have been duly authorized, including (i)
certified copies of all documents evidencing the corporate actions, or
actions by the members, as applicable, of Lessee, the Subsidiary
Guarantors and Lessor including resolutions of the Board of Directors
or managing members of each such party, as applicable, in each case,
duly authorizing the transactions contemplated hereby and the
execution, delivery and performance by Lessee, the Subsidiary
Guarantors and Lessor of each Operative Document to which it is a
party and (ii) certified copies, as applicable, of the by-laws,
operating agreements, certificates of formation and certificates or
articles of incorporation of Lessee, the Subsidiary Guarantors and
Lessor.
(c) INCUMBENCY CERTIFICATES. Agent shall have received an
incumbency certificate dated as of the Closing Date of each of Lessee,
the Subsidiary Guarantors and Lessor regarding the officers authorized
to execute and deliver the Operative Documents to which it is a party
and any other documents and agreements delivered in connection
therewith.
(d) OPINIONS OF COUNSEL. Agent shall have received the favorable
written opinion from each of (1) Bass, Xxxxx & Xxxx PLC, counsel for
Lessee and the Subsidiary Guarantors, (2) Xxxxx, Xxxx & Heyburn PLLC,
special counsel for Lessor and (3) such other opinions of counsel as
Agent or its counsel may reasonably request, each in form and
substance and addressed to such parties as Agent or its counsel may
require.
(e) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Lessor and Lessee set forth in the Operative Documents
shall be true and correct in all material respects as of the Closing
Date, and Lessee and Lessor shall each have delivered an Officer's
Certificate dated as of the Closing Date to such effect as to such
party's representations and warranties.
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(f) CONSENTS. All approvals or consents relating to Lessor,
Lessee or the Subsidiary Guarantors required in connection with the
transactions contemplated by the relevant Operative Documents shall
have been obtained and be in full force and effect.
(g) GOVERNMENTAL ACTIONS. All actions, if any, required to have
been taken on or prior to the Closing Date shall have been taken by
any Governmental Authority and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to
be in effect in connection with the transactions contemplated by this
Agreement and the other Operative Documents shall have been issued,
and all such orders, permits, waivers, exemptions, authorizations and
approvals shall be in full force and effect.
(h) NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall
have occurred since the execution of this Agreement that shall not
have been remedied to Agent's and Lessor's satisfaction.
(i) OTHER INFORMATION. Lessor and Agent shall have received such
information and copies of such other documents as either of them may
reasonably request.
4.2. CONDITIONS PRECEDENT TO EACH FUNDING. Without limiting the
conditions precedent set forth elsewhere in this SECTION 4, the obligation of
each of the Noteholders to make any Advance and of the Lessor to make any
Lessor Investment shall be subject to the satisfaction of each of the following
conditions (other than such conditions that are the responsibility of such
party hereunder) on or before the applicable Advance Date:
(a) REQUISITION. Agent shall have received, with respect to each
Eurodollar Advance, no later than three (3) Business Days prior to and
with respect to each Floating Rate Advance, no later than one (1)
Business Day prior to the date on which such Advance is to be funded,
(an "ADVANCE DATE") (i) a requisition (a "REQUISITION") which contains
(A) the identity of the Property or Properties with respect to which
such Advance is being requested, (B) the Advance Date, (C) the amount
of the Advance and Lessor Investment requested, together with
allocation of the amount to be advanced with respect to each
applicable Property and the purpose for which such Advance is made and,
(D) a designation of such Advance as a Floating Rate Advance or a
Eurodollar Advance, (E) a designation as to whether the Investment
Yield applicable to the Lessor Investment so requested shall be the
rate under clause (i) or (ii) of SECTION 6.3(B) hereof, (F) in the
case of Eurodollar Advance (or in the case of Investment Yield upon
the requested Lessor Investment being the rate described in SECTION
6.3(B)(I) hereof), the duration of the initial Eurodollar Interest
Period for such Eurodollar Advance or Lessor Investment, as
applicable, (G) a representation and warranty by Construction Agent
that
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all the conditions precedent to such Advance hereunder and under the
other Operative Documents have been satisfied, (H) the corresponding
amount of Lessor Investment to be funded on such Advance Date and (I)
such additional information as Agent may reasonably request with
respect to such Advance and (ii) an Officer's Certificate dated as of
such Advance Date to the effect that such party's representations and
warranties set forth herein and in the other Operative Documents are
true and correct as of such Advance Date.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Lessee and Lessor set forth herein and in the other
Operative Documents shall be true and correct as of such Advance Date.
(c) NO EVENT OF DEFAULT. No Event of Default or Default shall
have occurred and be continuing.
(d) NO THREATENED PROCEEDINGS. No action, suit or proceeding
shall have been instituted nor, to the knowledge of Lessee or its
Subsidiaries, shall governmental action be threatened before any court
or Governmental Authority, nor shall any order, judgment or decree
have been issued or proposed to be issued by any court or Governmental
Authority (i) regarding any Property or Lessee's, Lessor's or any
Noteholder's interest therein, (ii) that questions the validity or
enforceability of any Operative Document or transactions contemplated
thereby or (iii) where there is a reasonable probability of a
determination that would, individually or in the aggregate, result in
a Material Adverse Change.
(e) NO MATERIAL ADVERSE CHANGE. No Material Adverse Change shall
have occurred since the Closing Date that shall not have been remedied
to Agent's satisfaction.
(f) LEGALITY. The making of such Advance, and the maintenance
thereof, by any Noteholder shall not be prohibited by any Applicable
Law (including, without limitation, Regulation G, T, U or X and any
applicable usury laws) and shall not subject any Noteholder to any Tax
(other than any amounts paid or payable pursuant to SECTION 6.4(D)),
penalty, liability or other onerous condition under or pursuant to any
Applicable Law.
(g) MAXIMUM AMOUNT. The aggregate amount of Advances to be made
with respect to any Series shall not, when added to the aggregate
amount of Advances already made with respect to such Series, exceed
the Maximum Series Amount with respect to such Series. The aggregate
amount invested by the Lessor shall not exceed the Maximum Lessor
Investment Amount.
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(h) CLOSING FEES. Agent, Lessor and the Noteholders shall have
either received payment of all fees and expenses pursuant to SECTION
11.12 from the proceeds of previous Advances and Lessor Investment or
will receive such payment from the proceeds of the Advances and Lessor
Investment being requested by the applicable Requisition.
(i) PAYMENT OF TAXES, ETC. All taxes, charges, and reasonable and
documented fees and costs, if any, payable on or prior to the
applicable Advance Date in connection with the execution, delivery,
recording, filing and performance through such Advance Date of the
Operative Documents, or in connection with the issuance and sale of the
Notes shall have been paid in full unless same will be paid from the
proceeds of the Advances and Lessor Investment being requested by the
applicable Requisition.
(j) RESTAURANT ADVANCES. With respect to any Restaurant Advance
the aggregate amount of Restaurant Advances to be made by each
Noteholder with respect to the Restaurant Land being acquired and the
Restaurant Improvements being constructed on such Restaurant Land and
each Series of Notes held by such Noteholder shall not exceed the
product of (A) the applicable Series Percentage, (B) such Noteholder's
Commitment Percentage with respect to such Series of Notes and (C) the
applicable Restaurant Property Maximum Advance Amount.
(k) HEADQUARTERS ADVANCES. With respect to HQ Advances, the
aggregate amount of Advances to be made by such Noteholder with respect
to the acquisitions of the HQ Property or, HQ Expansion, as the case
may be, and each Series held by such Noteholder shall not exceed the
product of (i) the applicable Series Percentage, (ii) such Noteholder's
Commitment Percentage with respect to such Series and (iii) (A) with
respect to the Advance to Fund the HQ Closing, the HQ Acquisition Costs
and (B) with respect to HQ Expansion Advances the HQ Expansion Maximum
Advance Amount.
(l) SINGLE ADVANCE PER MONTH. Except for Advances or Lessor
Investment pursuant to SECTION 6.2 hereof, no more than one (1) Advance
and corresponding Lessor Investment shall be made in any calendar
month, which Advance and Lessor Investment may be used to fund Project
Costs with respect to multiple Properties.
4.3. CONDITIONS PRECEDENT TO EACH RESTAURANT ACQUISITION. The
obligation of each of the Noteholders to make any Advance (a "RESTAURANT
ACQUISITION ADVANCE") and of the Lessor to make a Lessor Investment to acquire
any Restaurant Land in accordance with SECTION 2.3 shall be subject to the
satisfaction of each of the following conditions (other than such conditions
that are the responsibility of such party hereunder) on or before the date of
the closing of such transaction (a "RESTAURANT CLOSING DATE"):
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(a) OPERATIVE DOCUMENTS. The documents and transactions described
in SECTION 2.3 shall have been duly authorized, executed, delivered
and consummated with respect to such Restaurant Land, and such
documents shall each be in full force and effect. Lessor shall have
received a copy of each of the deliveries made to the Agent pursuant
to SECTION 4.1 (other than deliveries of Lessor) and each certificate
or opinion described in such SECTION 4.1 shall be addressed to Lessor
as well as Agent and the Noteholders.
(b) INSURANCE CERTIFICATE. Agent and Lessor shall have received
an insurance certificate of an independent insurance broker dated on
or prior to the applicable Restaurant Closing Date evidencing the
insurance required pursuant to SECTION 9 of the Lease with respect to
such Restaurant Property.
(c) NO VIOLATION OF APPLICABLE LAW. The execution, delivery and
performance of the documents described in SECTION 4.3(A) with respect
to such Restaurant Property and the consummation of the transactions
contemplated thereby shall not violate or conflict with any Applicable
Law.
(d) CLOSING FEES. All reasonable and documented fees, expenses
and transactions costs payable pursuant to SECTION 11.12 on or prior
to such Restaurant Closing Date shall have been paid in full, which
fees, expenses and costs shall be reimbursed from the proceeds of
Advances and Lessor Investment.
(e) CONSENTS. All approvals or consents relating to such
Restaurant Property required in connection with the transactions
contemplated by the documents described in SECTION 4.3(A) with respect
to such Restaurant Property shall have been obtained.
(f) GOVERNMENTAL ACTIONS. All actions, if any, required to have
been taken on or prior to the applicable Restaurant Closing Date shall
have been taken by any Governmental Authority and all orders, permits,
waivers, exemptions, authorizations and approvals of such entities
required to be in effect in connection with the transactions
contemplated by the documents described in SECTION 4.3(A) with respect
to such Restaurant Property shall have been issued, and all such
orders, permits waivers, exemptions, authorizations and approvals
shall be in full force and effect.
(g) TITLE AND TITLE INSURANCE. On the applicable Restaurant
Closing Date, (i) Lessor shall have received from the Title
Underwriter its ALTA Form B-1970, revised 1984, an Extended Coverage
Owner's Policy of Title Insurance (a "RESTAURANT OWNER'S POLICY"),
insuring that Lessor owns good and marketable fee simple title to, or
holds a valid and subsisting ground leasehold estate in, the
applicable Restaurant Land, subject only to the Permitted
Encumbrances, in an amount equal to the budgeted total
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Project Costs for the applicable Restaurant Land and Restaurant
Improvements (subject to customary pending disbursements provisions),
together with complete, legible copies of all encumbrances, plats,
maps and surveys of record and (ii) Agent shall have received from the
Title Underwriter its ALTA Form B-1970, revised 1984, of extended
coverage Lender's Policy of Title Insurance (an "RESTAURANT LENDER'S
POLICY"; together with the Restaurant Owner's Policy, "RESTAURANT
TITLE POLICIES"), insuring the creation under the applicable Mortgage
in favor of Agent of a valid first priority Lien against the
Restaurant Property, subject only to Permitted Encumbrances in an
amount equal to all amounts to be advanced under the Notes with
respect to such Restaurant Property, together with complete legible
copies of all encumbrances and plats of record. The Restaurant Title
Policies shall have an effective date as of such Restaurant Closing
Date and shall contain the endorsements reasonably requested by Agent,
Lessor and/or Lessee. Nothing contained in this SECTION 4.2(G) shall
be deemed to preclude Lessee from obtaining, at its own cost and
expense, to the extent available, a leasehold title policy with
respect to the Restaurant Property from the Title Underwriter or any
other title insurance company, in form and substance satisfactory to
Lessee.
(h) ENVIRONMENTAL REPORT. A Phase I environmental assessment of
the applicable Land shall have been conducted by the Environmental
Consultant, and Agent and Lessor shall have received a copy of the
Environmental Consultant's report on such environmental assessment,
the scope of which review and which report, as well as the condition
of the Land as evidenced by such report, shall disclose no adverse
environmental condition requiring remediation or potential
environmental liability and shall otherwise be satisfactory, in form
and substance, to Agent and Lessor each in their sole discretion. If
such environmental assessment is not addressed directly to Lessor,
Agent and the Noteholders, Agent and Lessor shall have received
letters from the Environmental Consultant stating that Agent, the
Noteholders and Lessor may rely on such environmental assessment as if
it was originally addressed to them in all respects.
(i) PAYMENT OF TAXES, ETC. All Taxes, charges, and reasonable and
documented fees and costs, if any, payable on or prior to such
Restaurant Closing Date in connection with the execution, delivery,
recording, filing and performance through such Restaurant Closing
Date, or use and occupancy of such Restaurant Property shall have been
paid in full or sufficient funds to pay such Taxes, charges, fees and
costs have been deposited with the Title Underwriter under
instructions to pay the same, which Taxes, charges, fees and costs
shall be reimbursed from the proceeds of Advances and Lessor
Investments.
(j) SURVEY. Lessor, the Title Underwriter and Agent shall have
received an accurate "ALTA/ASCM Land Title Survey" with respect to
such Restaurant Land meeting the accuracy requirements of a Class "A"
Survey, as defined by the guidelines of
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the ALTA/ASCM and certified by the applicable surveyor to Lessee,
Lessor, Agent and the Title Underwriter, which survey (1) shall
include all minimum standard detail requirements for Class "A"
ALTA/ASCM Land Title Surveys and items 1-13 listed on Table 34
thereof, except items 5 and 12 regarding topography and governmental
agency requirements, respectively, (2) a statement that such land does
not lie within any flood hazard areas designated on the maps entitled
"Flood Insurance Rate Map," "Flood Hazard Floodway Boundary Map,"
"Flood Hazard Boundary Map" or "Flood Boundary and Floodway Map"
published by the Federal Emergency Management Agency or on any Flood
Hazard Boundary Map published by the U.S. Department of Housing and
Urban Development, and (3) shall be satisfactory to the Title
Underwriter.
(k) APPRAISAL. With respect to the first three Restaurant
Properties to be acquired with Advances made pursuant to this
Agreement (the "Initial Restaurant Properties") Agent and Lessor shall
have received an appraisal indicating a fair market value of such
Restaurant Property upon the completion of the related Restaurant
Improvements of no less than the projected Project Costs for the
applicable Restaurant Improvements and otherwise in form and substance
reasonably satisfactory to Agent and Lessor. With respect to
Restaurant Properties acquired after the Initial Restaurant
Properties, Lessor and Agent shall have received such appraisals, if
any, as may be requested by Lessor or Agent in their sole discretion.
(l) SEPARATE ASSESSMENT; ZONING. Lessor and Agent shall have
received evidence reasonably satisfactory to Lessor and Agent that
such Restaurant Land is (i) separately assessed for real estate tax
purposes and legally subdivided under local law and (ii) properly
zoned for the construction and use of such Restaurant Improvements in
accordance with the terms of the Lease.
(m) OTHER INFORMATION. Lessor and Agent shall have received such
information and copies of such other documents as any of them may
reasonably request.
(n) APPROVED PLANS. Agent shall have received the plans and
specifications with respect to the Restaurant Improvements; the
Construction Agent acknowledging hereby that it has delivered to Agent
prototype plans and specifications for Restaurant Improvements and
agreeing that it shall promptly notify Agent of any material
modification to such prototype plans or specifications for the
construction of any Restaurant Property;
(o) APPROVED BUDGET. Agent shall have received the final
construction budget with respect to the development and improvement of
such Restaurant Improvements which construction budget shall reflect a
total construction cost that, when added to the cost of acquisition of
the applicable Restaurant Property, will not violate the
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condition set forth in SECTION 4.2(J); the Construction Agent
acknowledging hereby that it has delivered to Agent the pro forma
construction budget for the construction of the prototype Restaurant
Improvements and agrees that it shall promptly notify Agent of any
material modifications to such pro forma construction budget;
provided, however, that in no event shall the sum of all delivered and
proposed construction budgets, including contingencies exceed the sum
of the Maximum Series Amounts and the Maximum Lessor Investment.
(p) MAXIMUM CONSTRUCTION IN PROGRESS. The aggregate amount of
actual and projected Project Costs (whether or not already funded) for
all Restaurant Improvements that have yet to be completed in
accordance with the Agency Agreement (as set forth in the applicable
construction budgets) shall at no time exceed $10,000,000.
(q) RESTAURANT CLOSING DATE. The applicable Restaurant Closing
Date shall occur no later than the first anniversary of the first
Advance under this Agreement.
(r) INCUMBENCY CERTIFICATES. Agent and Lessor shall have received
an incumbency certificate, dated as of such Restaurant Acquisition
Advance Date, of Lessee regarding the officers authorized to execute
and deliver the Operative Documents to which it is a party in
connection with the acquisition or improvement of the applicable
Property and any other documents and agreements delivered in
connection therewith.
4.4. CONDITIONS PRECEDENT TO EACH RESTAURANT IMPROVEMENT ADVANCE.
The obligation of each of the Noteholders to make any Advance (a "RESTAURANT
IMPROVEMENT ADVANCE") and of Lessor to make a Lessor Investment with respect to
any Project Costs for any Restaurant Improvements shall be subject to the
satisfaction of each of the following conditions:
(a) RESTAURANT ACQUISITION. Each of the conditions set forth in
SECTION 4.3 with respect to the acquisition of the applicable
Restaurant Land by Lessor in accordance with SECTION 2.3 shall have
been satisfied and the transactions contemplated by said SECTION 2.3
shall have been completed. Each of the conditions set forth in SECTION
4.3 with respect to the applicable Restaurant Property shall continue
to be satisfied as of the date of the Restaurant Advance Date.
(b) USE OF RESTAURANT ADVANCE PROCEEDS. All proceeds of prior
Restaurant Advances with respect to the applicable Restaurant Property
expended by or on behalf of the Construction Agent shall have been
applied solely to Project Costs (and all work and materials related
thereto shall have been actually performed or purchased, as the case
may be) for the applicable Restaurant Improvements, and the
Construction Agent shall certify the same in each Requisition and
provide such other evidence with respect to the use of such proceeds
as may be reasonably requested by Agent.
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(c) COMPLIANCE WITH LAW. The applicable Restaurant Property and
the construction and development thereof shall be in material
compliance with all Applicable Law.
(d) PERMITS. All Permits that are required by Applicable Law (i)
with respect to the work in place as of the applicable Restaurant
Advance Date or (ii) that, in accordance with good construction
practice would be obtained as of the applicable Restaurant Advance
Date in order to permit Construction Agent to complete the applicable
Restaurant Improvements on or before the Outside Completion Date shall
have been obtained, shall be in proper form, in full force and effect
and not subject to any appeal, consent or further contest or to any
unsatisfied condition (other than conditions relating to completion in
the future) that may allow modification or revocation.
(e) SUFFICIENT FUNDS. The sum of (i) the amount of the requested
Restaurant Improvement Advance, (ii) the total amount of Restaurant
Improvement Advances made by the Noteholders and Lessor Investment
made by the Lessor with respect to the applicable Restaurant
Improvements prior to the applicable Restaurant Advance Date, (iii)
the unadvanced portion of the applicable Restaurant Property Maximum
Advance Amount and (iv) the unfunded portion of the Lessor Investment
for the applicable Restaurant Property shall be sufficient, as
determined by Agent, to complete the applicable Restaurant
Improvements on or before the Restaurant Property Completion Date
within the applicable construction budget.
(f) CASUALTY. As of the applicable Restaurant Advance Date, no
Casualty has occurred with respect to the applicable Restaurant
Property.
(g) TIMING. No Restaurant Improvement Advance shall be made later
than the first anniversary of the applicable Restaurant Acquisition
Date.
(h) HQ ADVANCE. No Restaurant Advance with respect to any
Restaurant Property shall be made prior to the HQ Closing and funding
of the corresponding HQ Advance.
4.5. CONDITIONS PRECEDENT TO HQ CLOSING. The obligation of Lessee,
Lessor, Agent and the Noteholders to enter into the transactions contemplated
in SECTION 2.2 shall be subject to the conditions contained in SECTION 4.1
hereof and following conditions (other than such conditions that are the
responsibility of such party hereunder) on or before the HQ Closing Date:
(a) OPERATIVE DOCUMENTS. The documents and transactions described
in SECTION 2.2 shall have been duly authorized, executed, delivered
and consummated with respect to HQ Property, and such documents shall
each be in full force and effect. Lessor shall have received a copy of
each of the deliveries
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made to the Agent pursuant to SECTION 4.1 (other than deliveries of
Lessor) and each certificate or opinion described in such SECTION
4.1 shall be addressed to Lessor as well as Agent and the
Noteholders.
(b) HQ PROPERTY INSURANCE CERTIFICATE. Agent and Lessor shall
have received an insurance certificate of an independent insurance
broker dated on or prior to the Closing Date evidencing the insurance
required pursuant to SECTION 9 of the Lease with respect to the HQ
Property.
(c) TITLE AND TITLE INSURANCE. On the HQ Closing Date, (i) Lessor
shall have received from the Title Underwriter its ALTA Form B-1970,
revised 1984, an Extended Coverage Owner's Policy of Title Insurance
(the "HQ OWNER'S POLICY"), insuring that Lessor owns good and
marketable fee simple title to the HQ Land, subject only to the
Permitted Encumbrances, in an amount equal to the HQ Commitment,
together with complete, legible copies of all encumbrances, plats,
maps and surveys of record and (ii) Agent shall have received from the
Title Underwriter its ALTA Form B-1970, revised 1984, of extended
coverage Lender's Policy of Title Insurance (the "HQ LENDER'S POLICY";
together with the HQ Owner's Policy, "HQ TITLE POLICIES"), insuring
the creation under the Mortgage in favor of Agent of a valid first
priority deed of trust or mortgage against the HQ Land, subject only
to Permitted Encumbrances in an amount equal to all amounts to be
advanced under the Notes with respect to the HQ Property, together
with complete legible copies of all encumbrances and plats of record.
The HQ Title Policies shall have an effective date as of the HQ
Closing Date and shall contain the endorsements reasonably requested
by Agent, Lessor and/or Lessee. Nothing contained in this SECTION
4.5(C) shall be deemed to preclude Lessee from obtaining, at its own
cost and expense, to the extent available, a leasehold title policy
with respect to the HQ Land from the Title Underwriter or any other
title insurance company, in form and substance satisfactory to Lessee.
(d) ENVIRONMENTAL REPORT. A Phase I environmental assessment of
the HQ Land shall have been conducted by the Environmental Consultant,
and Agent and Lessor shall have received a copy of the Environmental
Consultant's report on such environmental assessment, the scope of
which review and which report, as well as the condition of the HQ Land
as evidenced by such report, shall disclose no adverse environmental
conditions requiring remediations or potential environmental liability
and shall otherwise be satisfactory, in form and substance, to Agent
and Lessor each in their sole discretion. If such environmental
assessment is not addressed directly to Lessor, Agent and the
Noteholders, Agent and Lessor shall have received letters from the
Environmental Consultant stating that Agent, the Noteholders and
Lessor may rely on such environmental assessment as if it was
originally addressed to them in all respects.
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(e) SURVEY. Lessor, the Title Underwriter and Agent shall have
received an accurate "ALTA/ASCM Land Title Survey" with respect to the
HQ Land meeting the accuracy requirements of a Class "A" Survey, as
defined by the guidelines of the ALTA/ASCM and certified by the
applicable surveyor to Lessee, Lessor, Agent and the Title
Underwriter, which survey (1) shall include all minimum standard
detail requirements for Class "A" ALTA/ASCM Land Title Surveys and
items 1-13 listed on Table 34 thereof, except items 5 and 12 regarding
topography and governmental agency requirements, respectively, (2) a
statement that such land does not lie within any flood hazard areas
designated on the maps entitled "Flood Insurance Rate Map," "Flood
Hazard Floodway Boundary Map," "Flood Hazard Boundary Map" or "Flood
Boundary and Floodway Map" published by the Federal Emergency
Management Agency or on any Flood Hazard Boundary Map published by the
U.S. Department of Housing and Urban Development, and (3) shall be
satisfactory to the Title Underwriter.
(f) APPRAISAL. Agent and Lessor shall have received an appraisal
of the HQ Property prepared by the Appraiser, which Appraisal shall
(i) be prepared in accordance with FIRREA requirements and (ii) shall
indicate a fair market value of the HQ Property of no less than the HQ
Acquisition Costs and otherwise in form and substance reasonably
satisfactory to Agent and Lessor.
(g) CONSENTS. All approvals or consents relating to the HQ
Property required in connection with the transactions contemplated by
the relevant Operative Documents shall have been obtained and be in
full force and effect.
(h) CASUALTY. As of the HQ Closing Date, no Casualty has occurred
with respect to the HQ Property.
(i) PAYMENT OF TAXES, ETC. All Taxes, charges, and reasonable and
documented fees and costs, if any, payable on or prior to the HQ
Closing Date in connection with the execution, delivery, recording,
filing and performance through such HQ Closing Date, or use and
occupancy of the HQ Property shall have been paid in full or
sufficient funds to pay such Taxes, charges, fees and costs have been
deposited with the Title Underwriter under instructions to pay the
same, which Taxes, charges, fees and costs shall be reimbursed from
the proceeds of Advances and Lessor Investment.
(j) NO VIOLATION OF APPLICABLE LAW. The execution, delivery and
performance of the documents described in SECTION 2.2 with respect to
the HQ Property and the consummation of the transactions contemplated
thereby shall not violate or conflict with any Applicable Law.
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(k) CLOSING FEES. All reasonable and documented fees, expenses
and transactions costs payable pursuant to SECTION 11.12 on or prior
to the HQ Closing Date shall have been paid in full, which fees,
expenses and costs shall be reimbursed from the proceeds of Advances
and Lessor Investments.
(l) GOVERNMENTAL ACTIONS. All actions, if any, required to have
been taken on or prior to the HQ Closing Date shall have been taken by
any Governmental Authority and all orders, permits, waivers,
exemptions, authorizations and approvals of such entities required to
be in effect in connection with the transactions contemplated by the
documents described in SECTION 2.2 with respect to the HQ Property
shall have been issued, and all such orders, permits waivers,
exemptions, authorizations and approvals shall be in full force and
effect.
(m) SEPARATE ASSESSMENT; ZONING. Lessor and Agent shall have
received evidence reasonably satisfactory to Lessor and Agent that the
HQ Property is (i) separately assessed for real estate tax purposes
and legally subdivided under local law and (ii) properly zoned for the
construction and use of the HQ Improvements in accordance with the
terms of the Lease.
(n) INCUMBENCY CERTIFICATES. Agent and Lessor shall have received
an incumbency certificate, dated as of Closing Date, of Lessee
regarding the officers authorized to execute and deliver the Operative
Documents to which it is a party in connection with the acquisition or
improvement of the applicable Property and any other documents and
agreements delivered in connection therewith.
4.6. CONDITIONS PRECEDENT TO EACH HQ EXPANSION ADVANCE. The
obligation of each of the Noteholders to make any Advance (an "HQ EXPANSION
ADVANCE") and of Lessor to make a Lessor Investment with respect to any HQ
Expansion Costs shall be subject to the satisfaction of each of the following
conditions:
(a) Each of the conditions set forth in SECTION 4.5 with respect
to the acquisition of the HQ Property by Lessor in accordance with
SECTION 2.2 shall have been satisfied and the transaction contemplated
by said SECTION 2.2 shall have been completed. Each of the conditions
set forth in SECTION 4.5 with respect to the HQ Property shall
continue to be satisfied as of the date of the HQ Expansion Advance
Date.
(b) USE OF HQ EXPANSION ADVANCE PROCEEDS. All proceeds of prior
HQ Expansion Advances expended by or on behalf of the Construction
Agent shall have been applied solely to HQ Expansion Costs (and all
work and materials related thereto shall have been actually performed
or purchased, as the case may be), and the Construction
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Agent shall certify the same in each Requisition and provide such
other evidence with respect to the use of such proceeds as may be
reasonably requested by Agent.
(c) COMPLIANCE WITH LAW. The HQ Expansion shall be in material
compliance with all Applicable Law.
(d) PERMITS. All Permits that are required by Applicable Law (i)
with respect to the work in place as of the applicable HQ Expansion
Advance Date or (ii) that, in accordance with good construction
practice would be obtained as of the applicable HQ Expansion Advance
Date in order to permit Construction Agent to complete the HQ
Expansion on or before the applicable Outside Completion Date shall
have been obtained, shall be in proper form, in full force and effect
and not subject to any appeal, consent or further contest or to any
unsatisfied condition (other than conditions relating to completion in
the future) that may allow modification or revocation.
(e) SUFFICIENT FUNDS. The sum of (i) the amount of the requested
HQ Expansion Advance and corresponding Lessor Investment, (ii) the
total amount of HQ Expansion Advances made by the Noteholders and
Lessor Investment made by the Lessor with respect to the HQ Expansion
prior to the applicable HQ Expansion Advance Date, (iii) the
unadvanced portion of the applicable HQ Expansion Maximum Advance
Amount and (iv) the unfunded Lessor Investment to be contributed by
Lessor for the applicable HQ Expansion Costs shall be sufficient, as
determined by Agent, to complete the HQ Expansion on or before the
applicable Outside Completion Date within the construction budget
therefor.
(f) APPRAISAL. At Lessee's expense, Lessor and Agent shall have
received a letter update from the Appraiser, which letter shall update
the appraisal delivered with respect to the HQ Property prior to the
HQ Closing pursuant to SECTION 4.5(F) hereof to account for the fair
market value of the HQ Expansion.
(g) TIMING. No HQ Expansion Advance shall be made after the third
anniversary of the Closing Date.
SECTION 5. COVENANTS
5.1. COVENANTS OF LESSEE. (a) NOTICE OF DEFAULTS. Lessee shall
deliver to each other party hereto, promptly upon a Responsible Officer of
Lessee becoming aware of the existence thereof, notice specifying any condition
that constitutes a Default, an Event of Default or a Casualty.
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(b) FURTHER ASSURANCES. Lessee shall cause to be promptly and
duly taken, executed, acknowledged, delivered and recorded all such further
acts, documents and assurances as Lessor or Agent from time to time may
reasonably request in order to carry out more effectively the intent and
purposes of this Agreement, the Operative Documents and the transactions
contemplated hereby and thereby.
(c) CHIEF EXECUTIVE OFFICE. Lessee shall notify each other party
hereto promptly after any change in its chief executive office and place of
business, jurisdiction of incorporation or the office where it keeps its
records concerning its accounts relating to the transactions contemplated by
this Agreement.
(d) ASSIGNMENT OF LEASE. In order to secure the Notes, Lessor has
assigned all of its right, title and interest to and in the Lease and
Construction Agency Agreement to Agent. Lessee hereby consents to such
assignment.
(e) ADDITIONAL AFFIRMATIVE COVENANTS.
(i) Lessee will furnish Agent:
(A) within forty-five (45) days after the close
of each quarter-annual accounting period in each fiscal year
of Lessee, on a consolidated basis: (1) quarterly 10-Q
financial statements and (2) an income statement, statement
of cash flows and a balance sheet of Lessee for such
quarter-annual period. All financial statements shall be in
reasonable detail, subject to year-end audit adjustments, and
certified by Lessee's chief executive officer or chief
financial officer to have been prepared in accordance with
GAAP, except for any inconsistencies explained in such
certificate;
(B) within ninety (90) days after the close of
each fiscal year of Lessee, on a consolidated basis: (1)
annual audited financial statements of Lessee as of the end
of such fiscal year, all in reasonable detail, including all
supporting schedules, notes and comments, and (2) an annual
forecast prepared by Lessee including a balance sheet, income
statement and statement of cash flows, to be in form and to
contain reasonable detail satisfactory to Lessor and Agent.
The annual statements shall be audited by an independent
certified public accountant selected by Lessee and reasonably
acceptable to Lessor and Agent and certified by such
accountants to have been prepared in accordance with GAAP,
except for any inconsistencies explained in such certificate.
Lessor and Agent shall have the right, from time to time, to
discuss Lessee's affairs directly with Lessee's independent
certified public accountants after notice to Lessee and
opportunity of Lessee to be present at any such discussions.
So long as no Default or Event of
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Default has occurred and is continuing, Lessor and Agent
agree to coordinate discussions with Lessee's accountants so
as to minimize the additional expense incurred;
(C) contemporaneously with each quarter-annual
and fiscal year-end financial report required by the
foregoing paragraphs (A) and (B), a certificate of the chief
executive officer, chief financial officer or
secretary/treasurer of Lessee (in his or her corporate
capacity) stating that: (1) such officer has individually
reviewed the provisions of this Agreement and the other
Operative Documents and is knowledgeable of the activities of
Lessee and its Subsidiaries during such year or
quarter-annual period, as the case may be, and (2) to the
best of such officer's knowledge, Lessee has observed and
performed, in all material respects, each undertaking
contained in this Agreement and the other Operative Documents
and no Default has occurred that is continuing, or if a
Default has so occurred and is continuing, specifying any
such Default of which he or she may have knowledge. Such
certificate shall further set forth the calculations of the
financial ratios and covenants set forth in SECTION
5.1(E)(II), including, without limitation, any antecedent
calculations and the source of any information that was used
in such calculations;
(D) promptly after the sending or making
available or filing of the same, copies of all reports, proxy
statements, annual reports, and financial statements that
Lessee sends or makes available to its stockholders generally
and all registration statements and reports that Lessee files
with the Securities and Exchange Commission or any successor
Person; and
(E) immediately upon receipt of the same by
Lessee or any Subsidiary, copies of all management letters
and any other reports which are submitted to Lessee or any of
its Subsidiaries by its independent accountants in connection
with any annual or interim audit of the Records of Lessee or
its Subsidiaries by such accountants.
Agent shall promptly forward to the Noteholders and Lessor copies of
all items delivered to Agent under this SECTION 5.1(E)(I).
(ii) Lessee will maintain:
(A) a Fixed Charge Coverage Ratio of greater
than 2.25 to 1, calculated quarterly on a rolling four (4)
quarter basis;
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(B) an Adjusted Debt to Capitalization Ratio of
less than or equal to 59% at all times;
(C) a Funded Debt to EBITDA Ratio of less than
2.5 to 1, calculated quarterly, with EBITDA computed on a
rolling four (4) quarter basis; and
(D) an Adjusted Funded Debt to EBITDAR Ratio of
less than 3.25 to 1, calculated quarterly with EBITDAR
computed on a rolling four (4) quarter basis.
All financial covenants shall be tested on a consolidated basis and
calculated in accordance with GAAP.
(iii) Lessee and its Subsidiaries will, when requested to
do so, make available any of their Records for inspection by duly
authorized representatives of Agent or Lessor and will furnish Agent
any information regarding their business affairs and financial
condition within a reasonable time after written request therefor.
Notwithstanding the foregoing, so long as no Default has occurred that
is continuing, inspections of Lessee's Records shall be limited to
once per calendar year and any costs incurred in connection with such
inspection shall be borne by the Noteholders and Lessor.
(iv) Lessee and its Subsidiaries will give immediate
notice to Agent of: (A) any litigation or proceeding in which any of
them is a party if an adverse decision herein would require them to
pay more than Five Hundred Thousand Dollars ($500,000.00),
individually or in the aggregate, or deliver assets the value of which
exceeds such sum (if such claim is not fully covered by insurance
subject to approved deductibles); (B) the institution of any other
suit or proceeding involving any of them that might materially and
adversely affect their operations, financial condition, property, or
business operations considered on a consolidated basis and (c) any
litigation or proceeding that involves a Property or the validity or
enforceability of any Operative Document.
(f) NEGATIVE COVENANTS.
(i) Neither Lessee nor any Subsidiary will change its
name or voluntarily enter into any merger, consolidation, or
reorganization in which Lessee or such Subsidiary is not the surviving
entity.
(ii) [INTENTIONALLY DELETED]
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(iii) Neither Lessee nor any Subsidiary will become
liable, directly or indirectly, as guarantor or otherwise, for any
obligation of any other Person, except, provided no Default or Event
of Default exists or would result from Lessee or any Subsidiary
incurring liability for the following liabilities: (A) the endorsement
of commercial paper for deposit or collection in the ordinary course
of business, (B) the Indebtedness described in SCHEDULE 11 attached
hereto, (C) Equipment leases and purchase money financing for
Equipment entered into in the ordinary course of business, (D)
obligations to vendors and other trade payables incurred in the
ordinary course of business which are paid in accordance with the
customary terms provided to Lessee (or such obligations or trade
payables which are being contested in good faith for which adequate
security has been reserved in a manner satisfactory to Agent), (E)
Indebtedness incurred to finance any eal Property not subject to this
Agreement and (F) other Indebtedness incurred in the ordinary course
of business, which, including the Indebtedness described under SECTION
5.1(F)(IV)(G), does not, at any time, exceed $15,000,000.00 in the
aggregate, provided the documents or instruments evidencing such
Indebtedness contain terms and conditions consented to by Agent, which
consent shall not be unreasonably withheld.
(iv) Neither Lessee nor any Subsidiary will incur,
create, assume, or permit to exist any Indebtedness except: (A) the
loans made under the Bank Credit Agreement; (B) the Indebtedness
described in SCHEDULE 11 attached hereto; and, provided no Default or
Event of Default exists or would result from Lessee or any Subsidiary
incurring the following Indebtedness, (C) Equipment leases, and
purchase money financing for Equipment entered into in the ordinary
course of business; (D) obligations to vendors and other trade
payables incurred in the ordinary course of business which are paid in
accordance with the customary terms provided to Lessee (or such
obligations or trade payables which are being contested in good faith
for which adequate security has been reserved in a manner satisfactory
to Agent); (E) contingent Indebtedness permitted by SECTION
5.1(F)(III); (F) Indebtedness incurred to finance any Real Property
not subject to this Agreement and (G) other Indebtedness incurred in
the ordinary course of business, which, including the Indebtedness
described in SECTION 5.1(F)(III)(F) does not exceed $15,000,000.00 in
the aggregate, provided the documents or instruments evidencing such
Indebtedness contain terms and conditions consented to by Agent, which
consent shall not be unreasonably withheld.
(v) Except for the existing matters disclosed in on
SCHEDULE 13 attached hereto, neither Lessee nor any Subsidiary will
make any investment in or make any loan in the nature of any
investment to any Person, without the prior written consent of Agent,
which consent shall not be unreasonably withheld.
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(vi) Except as described in on SCHEDULE 14 attached
hereto, neither Lessee nor any Subsidiary will make any loan or
advance to any officer, shareholder, director or employee of Lessee or
any Subsidiary, except for temporary advances in the ordinary course
of business.
(vii) Neither Lessee nor any Subsidiary will prepay any
Subordinated Indebtedness, except in accordance with its terms.
(viii) Neither Lessee nor any Subsidiary will enter into
any sale-leaseback transaction except: (A) the transactions described
in SCHEDULE 15 attached hereto; (B) such sale-leaseback transactions
as shall be consented to by Agent, which consent shall not be
unreasonably withheld, provided the proceeds of any such
sale-leaseback transaction are applied to outstanding Indebtedness of
Lessee; and (C) the transactions contemplated hereby and by the other
Operative Documents.
(ix) Neither Lessee nor any Subsidiary will acquire any
stock in, or all or substantially all of the assets of, any Person,
without the prior written consent of Agent, which consent shall not be
unreasonably withheld.
(x) Neither Lessee nor any Subsidiary will furnish
Agent, Lessor or any Noteholder any certificate or other document that
will contain any untrue statement of material fact or that will omit
to state a material fact necessary to make it not misleading in light
of the circumstances under which it was furnished.
(xi) Neither Lessee nor any Subsidiary will directly or
indirectly apply any part of the proceeds of the Advances to the
purchasing or carrying of any "margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System,
or any regulation, interpretations or ruling thereunder.
(xii) Except as described in SCHEDULE 16 attached hereto,
Lessee will not, and will not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction
(including without limitation the purchase, sale, lease or exchange of
any property or the rendering of any service) with any Affiliate
(other than any Subsidiary which is wholly owned by Lessee) on terms
that are less favorable to Lessee or its Subsidiaries than those that
would be obtainable at the time from any Person who is not an
Affiliate.
(xiii) Neither Lessee nor any Subsidiary will materially
alter its current business operations, or engage in a new business
venture which is not reasonably compatible with Lessee's current
business operations.
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(xiv) Lessee will not permit a change in Lessee's senior
management, except to the extent an individual member of senior
management is replaced with an individual with substantially
equivalent expertise with the consent of Agent, which consent shall
not be unreasonably withheld. For purposes of this Agreement, senior
management shall mean Xxxxxxx X. Xxxxx and Xxxxx Xxxxxx.
(xv) Lessee will not declare or pay cash dividends or
other similar distributions without the prior written consent of
Agent.
(xvi) Lessee will not purchase, redeem or retire in excess
of $10,000,000 of Lessee's outstanding capital stock without the prior
written consent of Agent (with the consent of the Requisite Holders).
5.2. COVENANTS OF LESSOR. (a) NO LESSOR LIENS. Lessor hereby
unconditionally agrees with and for the benefit of the other parties to this
Agreement that Lessor will not directly or indirectly create, incur, assume or
suffer to exist any Lessor Liens attributable to it on or against any Property
arising out of any act or omission of or claim against Lessor, and Lessor
agrees that it will, at its own cost and expense, promptly take such action as
may be necessary to duly discharge and satisfy in full any such Lessor Lien.
Lessor hereby indemnifies and holds harmless each other party hereto from and
against any loss, cost or expense (including reasonable legal fees and
expenses) which may be suffered or incurred by any of them as the result of the
failure of Lessor to discharge and satisfy any such Lessor Lien.
(b) CHIEF EXECUTIVE OFFICE. The Lessor shall notify each other
party hereto promptly after any change in its chief executive office and place
of business or jurisdiction of incorporation or the office where it keeps its
records concerning its accounts relating to the transactions contemplated by
this Agreement and the other Operative Documents.
(c) FURTHER ASSURANCES. The Lessor shall cause to be promptly and
duly taken, executed, acknowledged, delivered and recorded all such further
acts, documents and assurances as any Lessee or Agent from time to time may
reasonably request in order to carry out more effectively the intent and
purposes of this Agreement and the other Operative Documents and the
transactions contemplated hereby and thereby, including, without limitation,
amendments or continuation of any UCC-1 Financing Statements.
(d) FACILITY FEE. The Lessor shall pay to the Agent for the
account of the Holders a Facility Fee (the "FACILITY FEE") for the period from
and including the Closing Date to the Maturity Date in an amount per annum
equal to the applicable percentage set forth on SCHEDULE 2 times the Maximum
Series Amount for the A-Notes and B-Notes, such Facility Fee to be payable
quarterly in arrears in accordance with the provisions of SCHEDULE 2. From and
after the end of the Construction Period for each Property, the portion of the
Facility Fee payable
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on Advances made with respect to such Property shall be paid by the Lessee as
Additional Rent under the Lease. The remainder of the Facility Fee shall be
funded by Advances and Lessor Investment until the Commitment Expiration Date,
after which time such portion of the Facility Fee shall be paid by the Lessee
to the Lessor as Additional Rent under the Lease.
SECTION 6. ADVANCES AND LESSOR INVESTMENT
6.1. TERMS OF ADVANCES AND LESSOR INVESTMENT. (a) RESTAURANT
ADVANCES. Subject to the conditions precedent set forth in SECTIONS 4.1, 4.2,
4.3 AND 4.4 (i) each Noteholder shall fund a portion of each Restaurant Advance
equal to the product of (A) the applicable Series Percentage, (B) the Project
Costs requested to be funded by the applicable Requisition and (C) such
Noteholder's Commitment Percentage with respect to such Series and (ii) Lessor
shall make a Lessor Investment on the applicable Advance Date in an amount
equal to the product of (A) the Lessor Percentage and (B) the Project Costs to
be funded pursuant to the applicable Requisition.
(b) HQ ADVANCES. Subject to the conditions precedent set forth in
SECTIONS 4.1, 4.2, 4.5 and 4.6 (i) each Noteholder shall fund a portion of each
Advance with respect to the HQ Property (i.e., both the HQ Expansion Advances
and Advances with respect to HQ Acquisition Costs) equal to the product of (A)
the applicable Series Percentage, (B) the Project Costs requested to be funded
pursuant to the applicable Requisition and (C) such Noteholder's Commitment
Percentage with respect to such Series and (ii) Lessor shall make a Lessor
Investment on the applicable Advance Date in an amount equal to the product of
(A) the Lessor Percentage and (B) the Project Costs requested to be funded
pursuant to the applicable Requisition.
(c) ADVANCE DATE. Unless Agent receives notice from a Noteholder
prior to any Advance Date that such Noteholder will not make available to Agent
the Advance to be made by it on such Advance Date, Agent may assume that such
Noteholder has made its portion of the applicable Advance, and Agent may, in
reliance upon such assumption, may advance such portion on such Advance Date.
If and to the extent that such Noteholder fails to make such amount available
to Agent, such Noteholder and Lessor severally agree to repay to Agent promptly
on demand such amount together with interest thereon, for each day from the
date such amount is made available to Lessor until the date such amount is
repaid to Agent at (A) in the case of Lessor, the interest rate applicable at
the time to such Advance and (B) in the case of such Noteholder, the Federal
Funds Rate until the third Business Day after demand by Agent to such
Noteholder for such repayment and thereafter at the rate applicable at the time
to such Advance, as the case may be. If such Noteholder shall repay to Agent
such corresponding amount, such amount so repaid shall constitute the portion
such Noteholder's Advance for purposes hereof and Lessor shall thereupon be
excused from making the repayment described in the preceding sentence.
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(d) OBLIGATIONS SECURED. All obligations of the Noteholders
hereunder shall be several, but not joint. The failure of any Noteholder to
make any Advance required hereunder shall not relieve any other Noteholder of
its obligation, if any, hereunder to advance its portion of such Advance, but
no Noteholder shall be responsible for the failure of any other Noteholder to
advance its portion of such Advance.
(e) NOTICE. Agent will give prompt notice of each Requisition to
the Noteholders and Lessor. Such notice by Agent shall specify the amount of
the Advance to be made by each Noteholder.
6.2 CONSTRUCTION PERIOD. Anything to the contrary provided in
SECTION 6.1 notwithstanding, on each date during any Construction Period with
respect to a Property that is two (2) Business days prior to any Payment Date,
unless otherwise requested by Lessee at least three (3) Business Days prior to
such Payment Date (a) the Construction Agent shall be deemed to have requested
a Floating Rate Advance with respect to such Property in an amount equal to the
aggregate amount on interest due on such Payment Date under the Notes on the
principal amount of all Advances made with respect to such Property and (b) the
Construction Agent shall be deemed to have requested that the Lessor make a
Lessor Investment in an amount equal to the Investment Yield accrued and unpaid
as of such Payment Date on Lessor Investment made with respect to such Property
solely for the purpose of paying such accrued Investment Yield.
6.3 INTEREST AND INVESTMENT YIELD. (a) Interest shall be charged
to and paid by Lessor to the Noteholders on each Advance and Investment Yield
shall be calculated and paid to Lessor on its Lessor Investment as follows:
(i) For each Floating Rate Advance, at a floating rate
per annum equal to the Prime Rate minus the Applicable Floating Rate
Margin, said rate to change contemporaneously with any change in the
Prime Rate.
(ii) For a Eurodollar Advance, at a rate per annum equal
to the LIBOR Rate plus the Applicable LIBOR Margin in accordance with
SCHEDULE 2.
(b) The Investment Yield for all unreturned Lessor Investment
shall be a rate per annum equal to either (i) the LIBOR Rate plus the
Applicable LIBOR Margin or (ii) the Prime Rate plus the Applicable Floating
Rate Margin, which rate shall be selected by Lessee pursuant to the applicable
Requisition or pursuant to SECTION 6.3 (F) hereof.
(c) If and so long as any Noteholders or the Lessor shall be
required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves with respect to liabilities or assets consisting of
or including Eurodollar Liabilities, the Noteholders shall be entitled to
additional interest on the unpaid principal amount of each Eurodollar
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Advance and the Lessor shall be entitled to additional yield on each Lessor
Investment, from the date of such Advance or Lessor Investment, as the case may
be, until such principal amount is paid in full, at an interest rate per annum
equal at all times to the remainder obtained by subtracting (i) the LIBOR Rate
plus the Applicable LIBOR Margin for the Eurodollar Interest Period from (ii)
the rate obtained by dividing the LIBOR Rate plus the Applicable LIBOR Margin
by a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for
such Eurodollar Interest Period, payable on each date on which interest is
payable. Such additional interest shall be determined by each Noteholder or
Lessor, which shall so notify Lessor thereof.
(d) The interest for Advances and Investment Yield shall be
computed on the basis of a 360-day year, counting the actual number of days
elapsed, and shall be due and payable without notice (i) quarterly in arrears
on the first day of each consecutive quarter commencing on the first day of the
first calendar quarter occurring after the initial Advance Date in the case of
Floating Rate Advances and Investment Yield calculated with reference to the
Prime Rate, and (ii) at the end of the applicable Eurodollar Interest Period
for each Eurodollar Advance or Investment Yield calculated with reference to
the LIBOR Rate.
(e) Notwithstanding the foregoing, upon the occurrence and
continuation of an Event of Default, interest (and Investment Yield) shall be
charged at the Default Rate regardless of whether the Noteholders have elected
to exercise any other available remedies, including without limitation
acceleration of the maturity of the outstanding principal of the Notes. All
such interest shall be paid at the time of and as a condition precedent to the
curing of any such default to the extent any right to cure is given.
(f) CONVERSION. Lessee shall have the right at any time, on prior
irrevocable written or telefaxed notice to Agent (a "CONVERSION NOTICE"), to
convert any Floating Rate Advance into a Eurodollar Advance, to convert any
Eurodollar Advance into a Floating Rate Advance, to change the basis of
calculation of Investment Yield from the LIBOR Rate to the Prime Rate and vice
versa, or to continue any Eurodollar Advance or Investment Yield for a
subsequent Eurodollar Interest Period (specifying in each case the Eurodollar
Interest Period to be applicable thereto), subject in each case to the
following:
(i) the Conversion Notice to convert an Advance to a
Eurodollar Advance, to convert or continue the basis for calculation
of Investment Yield at the LIBOR Rate or to continue any Eurodollar
Advance, must be received by Agent not later than 1:00 p.m., Nashville
time, three (3) Business Days prior to the requested conversion date;
(ii) no Eurodollar Advance shall be converted or prepaid
(or the basis for calculation of Investment Yield changed from the
LIBOR Rate) at any time other than at the end of the Eurodollar
Interest Period applicable thereto;
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(iii) each conversion of an Advance (or Lessor Investment,
as applicable) shall be effected by applying the proceeds of the new
Eurodollar or Floating Rate Advance (or Lessor investment, as
applicable), as the case may be, to the Advance (or Lessor investment,
as applicable) (or portion thereof) being converted; and
(iv) the number of non-coterminous Interest Periods with
respect to Eurodollar Advances outstanding at any one time shall not
exceed four (4) and the Lessee shall be deemed to have elected an
Interest Period for any Investment Yield calculated as set forth in
SECTION 6.3 (B) (I) corresponding to the Interest Period elected for
the Eurodollar Advance funded on the same Advance Date as the
applicable Lessor Investment.
Each Conversion Notice shall be irrevocable and shall specify (i) the identity
and principal amount of the particular Advance (or Lessor Investment, as
applicable) that Lessee requests to be converted or continued, (ii) if such
Conversion Notice requests conversion, the date of conversion (which shall be a
Business Day) and (iii) if an Advance is to be converted to a Eurodollar
Advance, or a Eurodollar Advance is to be continued, or if the basis for
calculation of Investment Yield shall be changed or continued to the LIBOR
Rate, the Eurodollar Interest Period with respect thereto. In the event that
Lessee shall fail to give notice to continue any Eurodollar Advance (or Lessor
Investment, as applicable) for a subsequent period, such Advance (or Lessor
Investment, as applicable) (unless repaid) shall automatically be converted
into a Floating Rate Advance. If Lessee shall fail to specify in the
Requisition the type of borrowing, or, in the case of a Eurodollar Advance (or
Lessor Investment, as applicable), the applicable Eurodollar Interest Period,
Lessee will be deemed to have requested a Floating Rate Advance. If Agent
reasonably believes that any failure by Lessee to specify the type of borrowing
or the applicable Eurodollar Interest Period shall have resulted from failure
of communications equipment or clerical error, then prior to funding any such
borrowing, Agent shall use reasonable efforts to obtain confirmation from
Lessee of the contents of such Conversion Notice; however, in the absence of
confirmation by Lessee that specifies the type of borrowing and the applicable
Eurodollar Interest Period, Lessee will be deemed to have requested a Floating
Rate Advance (or calculations of Investment Yield base upon the Prime Rate).
Notwithstanding anything to the contrary contained above, if an Event of
Default shall have occurred and be continuing, no Eurodollar Advance may be
continued, no Floating Rate Advance may be converted into a Eurodollar Advance
and all Investment Yield shall be calculated as set forth in SECTION 6.3
(A)(II).
6.4 ILLEGALITY; TAXES; OTHER COSTS. (a) Notwithstanding anything
set forth herein or in any of the Operative Documents to the contrary, if, at
any time, the interest rate payable under the Notes, the Investment Yield or
any other amounts payable under the Operative Documents shall be deemed by any
competent court of law, governmental agency or tribunal to exceed the maximum
rate of interest, yield or other applicable amount permitted by any Applicable
Law, for such time as such interest rate, yield or other applicable change
would be deemed excessive,
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its application shall be suspended and there shall be charged instead the
maximum rate of interest yield or other applicable change permissible under
Applicable Law.
(b) In the event, and on such occasion, that on the date of
commencement of any Eurodollar Interest Period for a Eurodollar Advance or
Lessor Investment, any Noteholder or the Lessor shall have reasonably
determined:
(i) that dollar deposits in the amount of the requested
principal amount of such Eurodollar Advance or Lessor Investment are
not generally available to first-class banks in the London Interbank
Market;
(ii) that the rate at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to such
Noteholder or Lessor of making or maintaining such Eurodollar Advance
or Lessor Investment during such Eurodollar Interest Period; or
(iii) that reasonable means do not exist for ascertaining
the LIBOR Rate generally, such Noteholder or the Lessor, as the case
may be, shall, as soon as practicable thereafter, given written or
telephonic notice of such determination to Lessee. In the event of any
such determination, (A) any request by Lessee for a Eurodollar Advance
pursuant to SECTION 6.1 shall, until the circumstances giving rise to
such notice no longer exist, be deemed to be a request for a Floating
Rate Advance and (B) until the circumstances giving rise to such
notice no longer exist, the Investment Yield shall be a rate per annum
equal to the Prime Rate plus the Applicable Floating Rate Margin. Each
determination by the Noteholders or Lessor hereunder shall be
conclusive absent manifest error.
(c) Notwithstanding any other provision herein, if after the date
of this Agreement any change in Applicable Law or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to a Noteholder under any
Eurodollar Advance made by a Noteholder or to the Lessor with respect to Lessor
Investment or any other fees or amounts payable hereunder (other than taxes
imposed on the overall net income of a Noteholder or the Lessor by the country
in which a Noteholder or the Lessor is located, or by the jurisdiction in which
a Noteholder or the Lessor has its principal office, or by any political
subdivision or taxing authority therein), or shall impose, modify, or deem
applicable any reserve requirement, special deposit, insurance charge
(including FDIC insurance on Eurodollar deposits) or similar requirements
against assets of, deposits with or for the account of, or credit extended by,
such Noteholder or the Lessor or shall impose on such Noteholder or the Lessor
or the London Interbank Market any other condition affecting this Agreement or
Eurodollar Advances made by such Noteholder or Lessor Investment made by the
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Lessor, and the result of any of the foregoing shall be to increase the cost to
the Noteholder of making or maintaining its Eurodollar Advance or the cost to
the Lessor of making or maintaining its Lessor Investment or to reduce the
amount of any sum received or receivable by such Noteholder for any of its
Eurodollar Advances hereunder (whether of principal, interest or otherwise) or
the amount of any sum received or receivable by the Lessor for its Lessor
Investment hereunder by an amount reasonably deemed by the Noteholder or the
Lessor, as the case may be, to be material, then Lessor will pay to such
Noteholder and Lessee shall reimburse Lessor as Additional Rent under the Lease
or Lessee shall pay to Lessor, as Additional Rent under the Lease, as
applicable, such additional amount or amounts as will reasonably compensate
such Noteholder or the Lessor for such additional costs.
(d) If either:
(i) the introduction of, or any change in, or in the
interpretation of, any United States or foreign law, rule or
regulation; or
(ii) compliance with any directive, guidelines or request
from any central bank or other United States or foreign Governmental
Authority (whether or not having the force of law) promulgated or made
after the date hereof (but excluding, however, any law, rule,
regulation, interpretation, directive, guideline or request
contemplated by or resulting from the report dated July 1988, entitled
"International Convergence of Capital Measurement and Capital
Standards" issued by the Basic Committee on Banking Regulations and
Supervisory Practices), affects or would affect the amount of capital
required or expected to be maintained by any Noteholder (or any
lending office of any Noteholder), Lessor (or any lending office of
Lessor) or any corporation directly or indirectly owning or
controlling any Noteholder or Lessor (or any lending office of any
Noteholder or Lessor) based upon the existence of this Agreement or
its Advances, and such Noteholder or Lessor shall have determined that
such introduction, change or compliance has or would have the effect
of reducing the rate of return on such Noteholder's or Lessor's
capital or on the capital of such owning or controlling corporation as
a consequence of its obligations hereunder (including its commitment
to make additional Advances or Lessor Investment hereunder) to a level
below that which such Noteholder or Lessor or such owning or
controlling corporation could have achieved but for such introduction,
change or compliance (after taking into account that such Noteholder's
or Lessor's policies or the policies of such owning or controlling
corporation, as the case may be, regarding capital adequacy) by an
amount deemed by such Noteholder or Lessor (in its sole discretion) to
be material, then Lessor will pay to such Noteholder (and Lessee will
reimburse Lessor as Additional Rent under the Lease) or Lessee will
pay to Lessor such additional amount or amounts as will compensate the
Noteholder or Lessor for such reduction attributable to making,
funding and maintaining its Advances or Lessor Investment hereunder.
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(e) A certificate of any Noteholder or Lessor setting forth such
amount or amounts as shall be necessary to compensate such Noteholder or Lessor
(or its participating banks or other entities pursuant to this Agreement), as
specified in paragraph (i) or (ii) of SECTION 6.4(D), as the case may be, shall
be delivered to Lessee and shall be conclusive absent manifest error; provided,
however, that Lessee shall be responsible for compliance herewith and the
payment of increased costs only to the extent:
(1) any change in Applicable Law giving rise to
increased costs occurs after the date of this Agreement and such
change is generally applicable to financial institutions similarly
situated to the Noteholders and Lessor; and
(2) such costs arise or accrue after the day that is one
hundred eighty (180) Business Days after the date on which such
Noteholder or Lessor provides Lessee with written notice specifying
the change or event giving rise to such increased costs.
Subject to the foregoing, Lessee shall pay the affected Noteholder or Lessor
the amount shown as due on any such certificate within ten (10) days after its
receipt of such certificate.
(f) The protections of SECTIONS 6.4 shall be available to the
Noteholders and Lessor regardless of any possible contention of invalidity or
inapplicability of Applicable Law.
(g) Notwithstanding anything to the contrary herein contained, if
any change in any law or regulation or in interpretation thereof by any
Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Noteholder to make or maintain any
Eurodollar Advance or to give effect to its obligations to make Eurodollar
Advances or for Lessor to collect Investment Yield based upon the LIBOR Rate as
contemplated hereby, then, by written notice to Lessee, such Noteholder or
Lessor, as applicable, may:
(i) declare that Eurodollar Advances will not thereafter
be made by such Noteholder hereunder, whereupon Lessee shall be
prohibited from requesting Eurodollar Advances from the Noteholders
hereunder unless such declaration is subsequently withdrawn; and/or
(ii) require, in the case of Noteholders that all
outstanding Eurodollar Advances made by it be converted to Floating
Rate Advances, in which event (a) all such Eurodollar Advances shall
be automatically converted to Floating Rate Advances as of the
effective date of such notice as provided in paragraph (B) below, and
(b) all payments and prepayments of principal that would otherwise
have been applied to repay the converted Eurodollar Advances shall
instead be applied to repay the Floating Rate Advances resulting from
the conversion of such Eurodollar Advances and, in the case of
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Lessor that all Investment Yield be therefore calculated at an annual
rate equal to the Applicable Prime Rate plus the Applicable Floating
Rate Margin.
For purposes of this SECTION 6.4(g), a notice to Lessee by any Noteholder or
Lessor pursuant to clause (i) above shall be effective, if lawful, on the last
day of the then current Eurodollar Interest Period; in all other cases, such
notice shall be effective on the date of receipt by Lessee.
6.5. PAYMENTS. (a) Agent shall send Lessor and Lessee statements
of all amounts due under the Notes and of the Investment Yield for the
applicable period, which statements shall be considered correct and
conclusively binding unless Lessee notifies Agent to the contrary within ten
(10) days of its receipt of any statement which it deems to be incorrect. All
sums payable to the Noteholders and Lessor hereunder shall be paid directly to
Agent for the account of each Noteholder or Lessor, as appropriate in
immediately available funds prior to 12:00 noon, Nashville time, on the date
when such sums are due and payable. Any amounts received by Agent prior to
12:00 noon Nashville time on any Business Day shall be deemed to have been
received by all Noteholders or Lessor, as appropriate, on such Business Day,
and any amounts received by Agent after such time shall be deemed to have been
received by all Noteholders or Lessor, as appropriate, on the next Business
Day.
(b) Subject to ARTICLE 4 of the Intercreditor Agreement, each
payment made to Agent on the Notes or for other sums or fees due hereunder or
under any other Operative Document for the account of the Noteholders shall be
properly remitted by Agent to each Noteholder, pro rata in accordance with the
outstanding unpaid principal amount of the Notes held by each Noteholder, no
later than 2:00 p.m., Nashville time, on the date on which Agent receives such
payment.
6.6. ASSIGNMENTS/PARTICIPATIONS. (a) Each Noteholder may, with the
prior written consent of Lessee (which may not be unreasonably withheld) and
Agent, assign to one or more assignees all or a portion (but not less than
$2,500,000 without the consent of Agent in its sole discretion) of its
interests, rights and obligations under this Agreement and the other Operative
Documents (including, without limitation, all or a portion of the Advances at
the time owing to it and the Notes held by it); provided, however, that (a)
each such assignment shall be of a constant, and not a varying, percentage of
the applicable Noteholder's interest in each Series of Notes and of all the
assigning Noteholder's rights and obligations under this Agreement and the
other Operative Documents, and (b) the parties to each such assignment shall
execute and deliver to Agent, for its acceptance, an Assignment and Acceptance,
together with any Note or Notes subject to such assignment. Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (i) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Noteholder hereunder and under the Other
Operative Documents, and (ii) the
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assigning Noteholder thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
Notwithstanding the foregoing, each Noteholder may assign its interest under
this Agreement and the other Operative Documents without the consent of any
other party (but in compliance with such reasonable documentation requirements
as Agent may impose) to (A) to any institutional Affiliate of such Noteholder
or (B) to the Federal Reserve Bank or any branch thereof as collateral in the
ordinary course of business.
(b) Notwithstanding any other provision of this Agreement, Lessee
agrees that any Noteholder may at any time enter into participation agreements
with one or more participants whereby such Noteholder will allocate certain
percentages of its interests in the Notes and its rights and obligations
hereunder and under the other Operative Documents to such participants. Lessee
acknowledges that, for the convenience of all parties, this Agreement and the
other Operative Documents has been entered into with the Noteholders only and
that Lessee's obligations hereunder are undertaken for the benefit of, and as
an inducement to, any such participant as well as the Noteholders; provided
that such participating Noteholders shall not become "Noteholders" hereunder,
or be entitled to exercise directly any of the rights or remedies of the
Noteholders hereunder.
SECTION 7. INDEMNITY; WALK AWAY EVENT
7.1. GENERAL INDEMNIFICATION AND WAIVER OF CERTAIN CLAIMS. (a)
CLAIMS DEFINED. For the purposes of this SECTION 7.1, "CLAIMS" shall mean any
and all costs, expenses, liabilities, obligations, losses, damages, penalties,
actions or suits or claims of whatsoever kind or nature (whether or not on the
basis of negligence, strict or absolute liability or liability in tort) which
may be imposed on, incurred by, suffered by, or asserted against an Indemnified
Person, as defined herein, or any Property and, except as otherwise expressly
provided in this SECTION 7.1, shall include, but not be limited to, all
reasonable and documented out-of-pocket costs, disbursements and expenses
(including reasonable and documented legal fees and expenses) paid or incurred
by an Indemnified Person in connection therewith or related thereto.
(b) INDEMNIFIED PERSON DEFINED. For the purposes of this SECTION
7.1, "INDEMNIFIED PERSON" means Agent, the Noteholders, Lessor and each of
their respective Affiliates and affiliated directors, officers, employees,
successors and permitted assigns, agents and servants (such directors,
officers, employees, successors and permitted assigns, agents and servants
being referred to herein collectively as the "RELATED INDEMNITEE GROUP").
(c) CLAIMS INDEMNIFIED. Lessee agrees, whether or not any of the
transactions contemplated hereby or by any other Operative Document shall be
consummated, to assume liability for, and to indemnify, protect, defend, save
and keep harmless each Indemnified Person, from and against any and all Claims
that may be imposed on, incurred by, or asserted against, any Indemnified
Person, whether or not such Indemnified Person shall also be
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indemnified as to any such Claim by any other person and whether or not such
Claim arises or accrues prior to the date hereof, arising out of, in any way
relating to, resulting from, or in connection with, in each case, directly or
indirectly, any one or more of the following:
(i) (A) the ownership, lease, operation, possession,
occupancy, modification, improvement, abandonment, use, non-use,
maintenance, sublease, substitution, control, repair, storage,
alteration, transfer or other application or disposition, return,
overhaul, testing, servicing, replacement or registration of any
Property (including, without limitation, injury to, or death of any
person or property damage or any other thing occurring on or resulting
from activities on or with respect to the Properties or any part
thereof); (B) any Environmental Activity, Default or Event of Default;
and (C) any protest or contest by Lessee pursuant to SECTION 8 of the
Lease;
(ii) the construction, financing, refinancing, design,
purchase or condition of any Property (including, without limitation,
latent and other defects, whether or not discoverable, and any claim
for patent, trademark or copyright infringement);
(iii) any act or omission (whether negligent or otherwise)
or any breach of or failure to perform or observe, or any other
non-compliance with, any covenant, condition or agreement to be
performed by, or other obligation of Lessee (including in its capacity
as Construction Agent) or any Subsidiary under any of the Operative
Documents or any other agreement to which it is a party; or the
falsity of any representation or warranty of Lessee (including in its
capacity as Construction Agent) or any Subsidiary in any of the
Operative Documents or in any document or certificate delivered in
connection therewith;
(iv) any failure of (A) any Ground Lease or the Lease to
create a valid and subsisting leasehold estate in the applicable
Property, (B) any deed to vest a valid and subsisting fee simple title
to the applicable Property in Lessor or (C) any Mortgage to constitute
valid and perfected first priority liens on, and security interests
in, the applicable Property in favor of Agent, in each case, subject
only to the Permitted Encumbrances; and
(v) any violation of law, rule, regulation or order by
Lessee or any sublessee or any of their respective directors,
officers, employees, agent or servants.
(d) TAX INDEMNITY. (i) Lessee shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend the Property and each
Indemnified Person, and hold them harmless against, all Impositions.
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(ii) Lessee shall pay or cause to be paid all Impositions
directly to the taxing authorities where feasible and otherwise to the
Indemnified Person, as appropriate, and Lessee shall at its own
expense, upon such Indemnified Person's reasonable request, furnish to
such Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(iii) In the case of Impositions for which no contest is
conducted pursuant to Section 8 of the Lease and which Lessee pays
directly to the taxing authorities, Lessee shall pay such Impositions
prior to the latest time permitted by the relevant taxing authority
for timely payment. In the case of Impositions for which Lessee
reimburses a Indemnified Person, Lessee shall do so within twenty (20)
days after receipt by Lessee of demand by such Indemnified Person
describing in reasonable detail the nature of the Imposition and the
basis for the demand (including the computation of the amount
payable), but in no event shall Lessee be required to pay such
reimbursement prior to thirty (30) days before the latest time
permitted by the relevant taxing authority for timely payment. In the
case of Impositions for which a contest is conducted pursuant to
Section 8 of the Lease, Lessee shall pay such Impositions or reimburse
such Indemnified Person for such Impositions, to the extent not
previously paid or reimbursed, prior to the latest time permitted by
the relevant taxing authority for timely payment after conclusion of
all contests under Section 8 of the Lease.
(iv) At Lessee's request, the amount of any
indemnification payment by Lessee pursuant to subsection (i) shall be
verified and certified by an independent public accounting firm
mutually acceptable to Lessee and the Indemnified Person. The fees and
expenses of such independent public accounting firm shall be paid by
Lessee unless such verification shall result in an adjustment in
Lessee's favor of 10% or more of the payment as computed by such
Indemnified Person, in which case such fee shall be paid by such
Indemnified Person.
(v) Lessee shall be responsible for preparing and filing
any real and personal property or ad valorem tax returns in respect of
the Property. In case any other report or tax return shall be required
to be made with respect to any obligations of Lessee under or arising
out of subsection (i) and of which Lessee has knowledge, Lessee, at
its sole cost and expense, shall notify the relevant Indemnified
Person of such requirement and (except if such Indemnified Person
notifies Lessee that such Person intends to file such report or
return) (A) to the extent required or permitted by and consistent with
applicable law, make and file in its own name such return, statement
or report; and (B) in the case of any other such return, statement or
report required to be made in the name of such Indemnified Person,
advise such Indemnified Person of such fact and prepare such return,
statement or report for filing by such Indemnified Person or, where
such return, statement or report shall be required to reflect items in
addition to any obligations of
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Lessee under or arising out of subsection (i), provide such
Indemnified Person at Lessee's expense with information sufficient to
permit such return, statement or report to be properly made with
respect to any obligations of Lessee under or arising out of
subsection (i). Such Indemnified Person shall, upon Lessee's request
and at Lessee's expense, provide any data maintained by such
Indemnified Person (and not otherwise within the control of Lessee)
with respect to the Property which Lessee may reasonably require to
prepare any required tax returns or reports;
(vi) If a written claim is made against any Indemnified
Person or if any proceeding shall be commenced against such
Indemnified Person (including a written notice of such proceeding),
for any Impositions, such Indemnified Person shall promptly notify
Lessee in writing and shall not take action with respect to such claim
or proceeding without the consent of Lessee for thirty (30) days after
the receipt of such notice by Lessee; provided, that, in the case of
any such claim or proceeding, if action shall be required by law or
regulation to be taken prior to the end of such 30-day period, such
Indemnified Person shall, in such notice to Lessee, inform Lessee, and
no action shall be taken with respect to such claim or proceeding
without the consent of Lessee before the end of such shorter period;
provided, further, that the failure of such Indemnified Person to give
the notices referred to this sentence shall not diminish Lessee's
obligation hereunder except to the extent such failure precludes
Lessee from contesting all or part of such claim.
(e) For purposes of the indemnification provided in this SECTION
7.1, the term "PROPERTY" shall include both the HQ Property and Restaurant
Properties as well as any property considered as proposed for inclusion as a
Restaurant Property, whether or not actually included.
(f) LESSEE'S CLAIMS EXCLUDED. The following are excluded from the
agreement to indemnify under this SECTION 7.1:
(i) Claims to the extent such claims are attributable to
acts or events occurring with respect to any Property after the last
to occur of (x) the earlier to occur of the termination of the Lease
or the expiration of the Term, (y) the return of such applicable
Property to Lessor in accordance with the Lease and (z) the release of
the lien of the applicable Mortgage on such Property;
(ii) Claims related to any Lessor Liens;
(iii) with respect to an Indemnified Person, Claims to the
extent attributable to the gross negligence, willful misconduct,
misrepresentation or breach of covenant under the Operative Documents
of such Indemnified Person; or
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(iv) consequential damages.
(g) INSURED CLAIMS. In the case of any Claim indemnified by
Lessee hereunder which is covered by a policy of insurance maintained by Lessee
pursuant to SECTION 9 of the Lease or otherwise, each Indemnified Person agrees
to provide reasonable cooperation to the insurers in the exercise of their
rights to investigate, defend or compromise such Claim as may be required to
retain the benefits of such insurance with respect to such Claim.
(h) CONSTRUCTION PERIOD. Anything to the contrary provided in
this Agreement or the other Operative Documents notwithstanding, during any
Construction Period with respect to a Property (and for purposes of the
application of this Section during the Construction Period relating to the HQ
Expansion, the term "Property" shall refer only to the Improvements
constituting the HQ Expansion),(i) the Lessee shall not be obligated under any
of the Operative Documents to indemnify (A) any Person other than the Lessor
with respect to Claims arising with respect to such Property; (B) any Person
with respect to any costs arising from third-party damage claims relating to
such Property, other than (1) those Claims caused by or resulting from the
actions or failure to act by Construction Agent or any of its agents,
employees, consultants, contractors or subcontractors (or anyone else under the
control of Construction Agent or such Persons) while the Lessee or Construction
Agent is in possession or control of such Property, and (2) those Claims
imposed, incurred or asserted (x) pursuant to SECTION 7.1(L), (y) as a result
of a breach of the representations and warranties made by the Lessee pursuant
to SECTION 3.2(J) or (2) a violation by the Construction Agent of the covenants
contained in Section 4 of the Agency Agreement and (ii) Lessor shall, subject
to SECTION 11.14 hereof, assume liability for, and indemnify, protect, defend,
save and keep harmless each other Indemnified Person from and against all
claims that may be imposed on, incurred by, or asserted against, any such
Indemnified Person, arising out of, in any way relating to, resulting from, or
in connection with, in each case, directly or indirectly, any one or more of
the matters set forth in SECTION 7.1 (C) to the extent such Claim arises with
respect to a Property during the Construction Period for such Property, which
indemnity shall be subject to the limitations set forth in SECTION 7.1(F) and
shall otherwise be governed by the provisions of SECTION 7.1.
(i) CLAIMS PROCEDURE. An Indemnified Person shall promptly notify
Lessee of any Claim as to which indemnification is sought; provided, however,
that the failure to give such notice shall not release Lessee from any of its
obligations under this SECTION 7.1 except to the extent (and only to such
extent) that such delay shall result in actual prejudice to Lessee. Subject to
the rights of insurers under policies of insurance maintained by Lessee and
subject to the proviso below, Lessee shall have the right in each case, at
Lessee's sole expense, to investigate, and the right in its sole discretion to
defend or compromise, any Claim which if adversely determined
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would give rise to a payment by Lessee under this SECTION 7.1 and the
Indemnified Person shall cooperate with all reasonable requests of each Lessee
in connection therewith; provided that (i) no right to defend or compromise
such Claim shall exist if an Event of Default shall have occurred and be
continuing, (ii) Lessee shall keep each Indemnified Person which is the subject
of such proceeding fully apprised of the status of such proceeding and shall
provide such Indemnified Person with all material information with respect to
such proceeding as such Indemnified Person shall reasonably request, (iii) such
proceeding will not involve any
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material danger of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Exception or a Lien which is adequately bonded to the
satisfaction of such Indemnified Person) on, any Property, (iv) in the good
faith opinion of such Indemnified Person, upon written advice from its counsel
(the reasonable and documented fees and expenses of such counsel in connection
with the rendering of such advice being at the cost and expense of Lessee),
there exists no actual or potential conflict of interest such that it is
advisable for such Indemnified Person to retain control of such proceeding or
(v) such claim or liability involves no reasonable possibility of criminal
sanctions or liability to such Indemnified Person. In the circumstances
described in clauses (i) through (v) above, the Indemnified Person shall, after
delivery of written notice to Lessee (which notice shall specify in reasonable
detail the Indemnified Party's basis for claiming that any circumstance in
clauses (i) through (v) above applies), be entitled to control and assume
responsibility for the defense of such claim or liability at the expense of
Lessee; provided, however, that Lessee shall have the right to participate in
such contest, including, without limitation, the right, to the extent permitted
by law, to attend private party, governmental or judicial conferences
concerning such Claim and the right to review all submissions to any private
party, governmental or other authority. In addition, at its own expense (or at
the expense of Lessee in the event the circumstances described in clauses (i)
through (v) above shall apply and Lessee shall continue to control the defense
of such claim or liability), any Indemnified Person may participate in any
proceeding controlled by Lessee. Lessee may in any event participate in all
such proceedings at its own cost; provided that where Lessee or the insurers
under a policy of insurance maintained by Lessee undertake the defense of an
Indemnified Person with respect to a Claim, no additional legal fees or
expenses of such Indemnified Person in connection with the defense of such
Claim shall be indemnified hereunder unless such fees or expenses were incurred
at the request of Lessee or such insurers or the circumstances described in
clauses (i) through (v) above shall apply. Nothing contained in this SECTION
7.1(I) shall be deemed to require an Indemnified Person to contest any Claim or
to assume responsibility for or control of any judicial proceeding with respect
thereto.
(j) CONFLICTING PROVISIONS. The general indemnification
provisions of this SECTION 7.1 are not intended to waive or supersede any
specific provisions of, or any rights or remedies of Lessee under the Lease,
the Agency Agreement, this Agreement or any other Operative Document to the
extent such provisions apply to any Claim. Without limiting any other
obligation of Lessee under any of the Operative Documents, the general
indemnification provisions of this SECTION 7.1 do not constitute a guaranty by
Lessee that the principal of, interest on or any amounts payable with respect
to the Notes will be paid.
(k) SURVIVAL. The representations, warranties, indemnities,
agreements and rights provided for in SECTION 7.1, and Lessee's obligations
under any and all provisions thereof, shall survive the delivery of the
Properties and the expiration or other termination of this Participation
Agreement and the other Operative Documents.
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(l) Subject to SECTION 7.1(D), Lessee acknowledges and agrees
that its obligations under this SECTION 7.1 are intended to include and extend
to any and all liabilities, sums paid in settlement of claims, obligations,
charges, actions, Liens, taxes, damages (including punitive damages, penalties,
fines, court costs, administrative service fees, response and remediation
costs, stabilization costs, encapsulation costs, treatment, storage or disposal
costs), imposed upon or incurred by or asserted at any time against any
Indemnified Party (whether or not indemnified against by any other party)
arising directly or indirectly out of: (i) the treatment, storage, disposal,
generation, use, transport, movement, presence, release, threatened release,
spill, installation, sale, emission, injection, leaching, dumping, escaping or
seeping of any Hazardous Materials or material containing or alleged to contain
Hazardous Materials at or from the Property or any part thereof; (ii) the
violation or alleged violation of any Environmental Laws relating to or in
connection with the Property or any part thereof or any acts or omissions
thereon or relating thereto; (iii) all other federal, state and local
Applicable Laws designed to protect the environment or persons or property
therein, whether now existing or hereinafter enacted, promulgated or issued by
any federal, state, county, municipal or other Governmental Authority; and (iv)
Lessee's failure to comply with its obligations under SECTION 3.2 of the Lease.
7.2 WALK AWAY EVENT. If a Walk-Away Event shall have occurred,
and no Default or Event of Default has occurred and is continuing, Lessee shall
have the right to terminate the Lease, the Agency Agreement and the other
Operative Agreements (in each case, with respect only to the Property affected
by such Walk Away Event) by notice to the Lessor and Agent and, upon
termination and satisfaction of the other requirements under Section 23.1 of
the Lease, Lessee shall have no financial or other obligations under any of the
Operative Agreements with respect to the affected Property except (i) specific
obligations of Lessee under the Operative Agreement that accrued prior to
termination of Lease, (ii) obligations of Lessee arising out of any event,
condition, act, or circumstance, or breach which is subject to the
indemnification provisions of SECTION 7.1 of this Agreement and which exists or
occurs prior to termination of the Lease, and (iii) provisions of the Operative
Agreement which are expressly stated to continue after termination.
SECTION 8. LESSEE'S RIGHT OF QUIET ENJOYMENT; NONDISTURBANCE
Each party to this Agreement acknowledges notice of, and consents in
all respects to, the terms of the Lease and expressly, severally and, as to its
own actions only, agrees that, so long as no Lease Event of Default has
occurred and is continuing under the Lease and such Lease has not been
terminated as a result of such Lease Event of Default, it shall not take or
cause to be taken any action contrary to Lessee's rights under the Lease,
including, without limitation, the right to possession, use and quiet enjoyment
by Lessee or any permitted sublessee.
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(i) The Lease and all of Lessee's rights thereunder are
and shall be at all times and in all respects subject and subordinate
to the liens of the Mortgages and to all Advances now or hereafter
made under or secured by the Mortgages applicable thereto and all
renewals, modifications, consolidations, replacements, substitutions,
additions and extensions of the Mortgages.
(ii) Provided no Lease Event of Default shall have
occurred and be continuing as of the date Agent commences a
foreclosure action, (A) Lessee shall not be named as a party in any
action or proceeding to enforce any Mortgage, unless such joinder
shall be required under applicable law, and in which case Agent shall
not seek affirmative relief from such Lessee in such action or
proceeding, nor shall the Lease be cut off or terminated nor Lessee's
possession thereunder be disturbed in any such action or proceeding,
and (B) subject to the provisions of clause (iv) below, Agent will
recognize the Lease and Lessee's rights thereunder.
(iii) Upon any foreclosure of any Mortgage or other
acquisition of the Property encumbered thereby, Lessee shall attorn to
Agent or any other party acquiring said property or so succeeding to
Lessor's rights (collectively, a "SUCCESSOR OWNER") and shall
recognize the Successor Owner as its landlord under the Lease and
Lessee shall promptly execute and deliver any instrument that the
Successor Owner may reasonably request in writing to evidence further
said attornment.
(iv) Upon such attornment or other acquisition of said
Property, the Lease shall continue as a direct lease between the
Successor Owner and such Lessee upon all terms, covenants and
conditions thereof as are then applicable except that the Successor
Owner shall not be (A) liable for any previous act or omission of
Lessor, individually, under the Lease, (B) subject to any offsets,
defenses, claims or counterclaims that Lessee may have against Lessor
individually or (C) bound by any amendment, modification, extension,
expansion, termination, cancellation or surrender of such Lease unless
approved in writing by Agent.
(v) The attornment provided for in clause (iii) above
shall inure to the benefit of Agent or any Successor Owner, shall be
self-operative, and no further instrument shall be required to give
effect to the attornment. Lessee, however, upon demand of Agent or any
Successor Owner, as the case may be, agrees to execute, from time to
time, instruments in confirmation thereof, reasonably satisfactory to
Agent or any such Successor Owner, acknowledging such attornment and
setting forth the terms and conditions of its tenancy. Nothing
contained in this Section shall be construed to impair any right
otherwise exercisable by Agent or any such Successor Owner.
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SECTION 9. EVENTS OF DEFAULT; REMEDIES
9.1. EVENTS OF DEFAULT. If any of the following events shall occur
and be continuing, it shall constitute an "EVENT OF DEFAULT" hereunder:
(a) NON-PAYMENT OF PRINCIPAL AND STATED AMOUNT. The
principal amount of any Note is not paid when due; or
(b) NON-PAYMENT OF INTEREST. Any interest payable under
the Notes or any other amount payable under SECTION 6.3 is not paid
when due; or
(c) NON-PAYMENT OF COSTS. Lessor fails to pay when due
any sums payable by it hereunder or under any other Operative Document
including, without limitation, Breakage Costs, Taxes and/or any other
amounts payable under SECTION 6.4, and such failure continues for
thirty (30) days or such other period of grace provided for herein; or
(d) NON-PAYMENT OF FEES. Lessor fails to pay when due
any fee payable under SECTION 11.12 or any other amount payable by it
hereunder and such failure continues for thirty (30) days or such
other period of grace provided for herein; or
(e) REPRESENTATIONS AND WARRANTIES. Any representation
or warranty made by Lessee or any Subsidiary Guarantor under or in
connection with any Operative Document proves to have been incorrect
in any material respect when made or repeated and either (i) such
representation or warranty cannot be remedied or (ii) such
representation or warranty continues to be incorrect in any material
respect for thirty (30) days (or for such longer period as is
reasonably necessary to remedy the same so long as Lessee diligently
pursues the same) after either (A) such incorrectness is acknowledged
in writing by Lessee or (B) written notice thereof is given to Lessee
or such Subsidiary Guarantor, as the case may be, by Agent or any
Noteholder; or
(f) FINANCIAL, LIEN AND DEBT COVENANTS. Lessee fails to
perform or observe any term, covenant or agreement set forth in
SECTION 5.1(F); or
(g) COVENANTS. Lessee or any Subsidiary Guarantor fails
to perform or observe any term, covenant or agreement contained in
this Agreement or any other Operative Document (other than (i) those
specifically referred to in subsections (A), (B), (C) (D), (E) and (F)
of this SECTION 9.1 or (ii) those for which a specified grace or cure
period is provided under the applicable Operative Document) and such
failure (1) is not capable of cure or (2) continues for ninety (90)
days (or for such longer period as is reasonably necessary to remedy
the same so long as Lessee diligently pursues the same) after either
(i) it is acknowledged in writing by Lessee or (ii) written notice
thereof is given to Lessee by Agent; or
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(h) DEBT. Lessee or any of its Subsidiaries shall
default in any other Indebtedness for borrowed money, directly or
indirectly, whether matured or unmatured, which is in excess of
$2,500,000.
(i) LESSEE BANKRUPTCY. Lessee or any Subsidiary
Guarantor is generally not paying its debts as they become due or
admits in writing its inability to pay its debts generally or makes a
general assignment for the benefit of creditors; or any proceeding is
instituted by or against any such Person seeking an order for relief
under the United States Bankruptcy Code or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts or the appointment of a
receiver, trustee, custodian or other similar official for it or for
any substantial part of its property under any law relating to
bankruptcy, insolvency, liquidation or reorganization or relief of
debtors and either (i) any such relief in any such proceeding is
sought or consented to by it or an order for any such relief is
entered against it, or (ii) any such proceeding instituted against it
remains undismissed and unstayed for a period of 60 days; or any such
party takes any corporate action to authorize any of the actions set
forth above; or
(j) JUDGMENTS. Lessee or any of its Subsidiaries shall
(i) suffer a final judgment (which is not covered by insurance subject
to approved deductibles) requiring payment of money (including costs
and expenses) aggregating in excess of $500,000, which judgment is not
discharged within a period of thirty (30) days unless, pending further
proceedings, execution has been effectively stayed pending appeal, to
the satisfaction of Agent, or (ii) suffer a final judgment or
judgments (which are not covered by insurance subject to approved
deductibles), requiring payment of money (including costs and
expenses) in an aggregate amount in excess of $2,000,000; or
(k) LITIGATION. Lessee or any of its Subsidiaries shall
pay, in satisfaction of any final nonappealable judgment or in
connection with the settlement or compromise of litigation against
Lessee or such Subsidiary (excluding payment of approved deductibles,
or insurance proceeds paid, in connection with a judgment or
settlement of litigation which is covered by insurance, or in
connection with an appeal bond or other security required in
connection with the appeal of a final judgment against Lessee or such
Subsidiary) in an aggregate amount in excess of $750,000 in any fiscal
year; or
(l) GUARANTY. Any provision of the Subsidiary Guaranty
after delivery thereof for any reason ceases to be valid and binding
on each Subsidiary Guarantor, or any Subsidiary Guarantor shall
repudiate or purport to revoke the Subsidiary Guaranty; or
(m) LEASE EVENT OF DEFAULT. A "Lease Event of Default"
shall occur under the Lease;
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(n) BANK CREDIT AGREEMENT DEFAULT. An "EVENT OF DEFAULT"
shall occur under the Bank Credit Agreement;
(o) LESSOR BANKRUPTCY. Lessor is generally not paying
its debts as they become due or admits in writing its inability to pay
its debts generally or makes a general assignment for the benefit of
creditors; or any proceeding is instituted by or against Lessor
seeking an order for relief under the United States Bankruptcy Code or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts or
the appointment of a receiver, trustee, custodian or other similar
official for it or for any substantial part of its property under any
law relating to bankruptcy, insolvency, liquidation or reorganization
or relief of debtors and either any such relief in any such proceeding
is sought or consented to by it or an order for any such relief is
entered against it, or any such proceeding instituted against it
remains undismissed and unstayed for a period of 60 days; or Lessor
takes any corporate action to authorize any of the actions set forth
above; or
(p) LESSOR JUDGMENTS. Lessor shall (i) suffer a final
judgment (which is not covered by insurance subject to approved
deductibles) requiring payment of money (including costs and expenses)
aggregating in excess of $500,000 which judgment is not discharged
within a period of thirty (30) days unless, pending further
proceedings, execution has been effectively stayed pending appeal, to
the satisfaction of Agent, or (ii) suffer a final judgment or
judgments (which are not covered by insurance subject to approved
deductibles), requiring payment of money (including costs and
expenses) in an aggregate amount in excess of $2,000,000; or
(q) AGENCY AGREEMENT DEFAULT. An Agency Agreement Event
of Default shall occur under the Agency Agreement.
9.2. REMEDIES. (a) If an Event of Default has occurred and is
continuing, each of Lessor and/or Agent (who, for such purpose, is hereby
granted a power of attorney which, being coupled with an interest, is
irrevocable) shall at the written direction or may, with the consent of the
Requisite Holders (i) declare, by written notice to Lessor and Lessee (A) the
entire accrued and unpaid amount of interest on and the principal amount of the
Notes (if not then due and payable) to be due and payable immediately and (B)
the obligation of each Holder to make Advances to be terminated; provided,
however, that if an order for relief under the United States Bankruptcy Code is
entered at the request or upon the consent of Lessee or involuntarily against
Lessee, (Y) then the entire accrued and unpaid amount of interest on and the
principal amount of the Notes shall automatically be and become due and payable
immediately, without request, demand, presentment, protest or notice,
notwithstanding anything contained in the Notes or any Operative Document to
the contrary and (Z) the obligation of Lessor to make Lessor Investment and
each Noteholder to make Advances shall automatically be terminated and (ii)
shall, subject to SECTION 8, exercise any of the rights or remedies granted to
it under the Lease or any of the
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other Operative Documents, in addition to any rights or remedies of such
parties set forth in this Agreement or any other Operative Document.
(b) The foregoing notwithstanding, to the extent that any Event
of Default described in clauses (A), (B), (C), (D), (O) or (P) of SECTION 9.1
is not the result of a Lease Event of Default or other failure of Lessee to pay
amounts required pursuant to the Operative Documents, then the rights and
remedies of Agent and Holders with respect to such Event of Default shall be
limited to such rights and remedies as Agent and Holders may have under the
Operative Documents and Applicable Law against Lessor, and neither Agent nor
the Holders shall be entitled to exercise any right or remedy against Lessee or
Lessee's interest in any property solely by reason of such Event of Default.
(c) If an Event of Default has occurred and is continuing or in
the event that any party hereto (other than Lessee) has failed to observe or
perform any covenant or agreement contained in any Operative Document (and such
failure shall not have been remedied), or if any representation or warranty of
such party set forth in any Operative Document shall prove to be incorrect in
any material respect as of the time when the same shall have been made, then
each of the other parties hereto may take all steps necessary or advisable to
protect and enforce its rights hereunder, whether by action, suit or proceeding
at law or in equity, for the specific performance of any covenant, condition or
agreement contained herein, or in aid of the execution of any power herein
granted, or for the enforcement of any other appropriate legal or equitable
remedy or otherwise as such party shall deem necessary or advisable.
(d) No right or remedy hereunder or under any other Operative
Document shall be exclusive of any other right, power or remedy, but shall be
cumulative and in addition to any other right or remedy hereunder or now or
hereafter existing by law or in equity, and the exercise by a party hereto of
any one or more of such rights, power or remedies shall not preclude the
simultaneous or further exercise of any or all of such other rights, powers or
remedies. Any failure to insist upon the strict performance of any provision
hereof or to exercise any option, right, power or remedy contained herein shall
not constitute a waiver or relinquishment thereof for the future. Each of
Lessor, Agent and the Holders shall be entitled to injunctive relief in case of
the violation or attempted or threatened violation of any of the provisions
hereof by any other party hereto, a decree compelling performance of any of the
provisions hereof or any other remedy allowed by Applicable Law or in equity.
(e) To the extent that any Default or Event of Default shall have
been fully and completely cured prior to the exercise of any remedies by
Lessor, Agent or any Holders under this Agreement, the other Operative
Documents or Applicable Law, such Default or Event of Default shall cease to be
a "Default" or "Event of Default" for all purposes under the Operative
Documents, including, without limitation, for purposes of exercise of remedies
or denial or conditioning of rights of Lessee.
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SECTION 10. AGENT
10.1. AUTHORIZATION AND ACTION. Each Holder and Lessor hereby
appoints and authorizes Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement or any other Operative Document as
are delegated to Agent or Lessor or both by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto. Lessee
acknowledges and consents to the rights of Agent pursuant to the immediately
preceding sentence. As to any matters not expressly provided for by this
Agreement or any other Operative Document, Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Holders, and such
instructions shall be binding upon all Holders; provided, however, that Agent
shall not be required to take any action which exposes Agent to personal
liability (unless the Lessor and the Noteholders agree to indemnify the Agent
for such costs) or which is contrary to this Agreement or any other Operative
Document or Applicable Law. Agent shall not be liable to any Holder if, in
accordance with the terms of this Agreement or any other Operative Document, it
takes or omits to take any action pursuant to the instructions of the Requisite
Holders. Agent agrees to give to each Holder prompt notice of each notice given
to it by Lessee pursuant to the terms of this Agreement or any other Operative
Document. Agent agrees to perform and discharge the duties and powers delegated
to it under this Agreement and the other Operative Documents in accordance with
the terms hereof and thereof.
10.2. AGENT NOT LIABLE. (a) Except as otherwise expressly provided
in the Operative Documents neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or any of them under or in connection with this Agreement or any other
Operative Document, except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the foregoing, Agent (i) may
treat the payee of any Note as the Holder thereof until Agent receives written
notice of the assignment or transfer thereof signed by such payee and including
the agreement of the assignee or transferee to be bound hereby as it would have
been if it had been an original Holder party hereto, in form satisfactory to
Agent; (ii) may consult with legal counsel (including counsel for Lessee),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (iii) makes
no warranty or representation to any Holder and shall not be responsible to any
Holder for any statements, warranties or representations (whether written or
oral) made in or in connection with this Agreement or any other Operative
Document; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or any other Operative Document on the part of Lessee or to inspect
the property (including the books and records) of Lessee; (v) shall not be
responsible to any Holder for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Operative Document or any
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other instrument or document furnished pursuant to any Operative Document or
for the creation, validity, enforceability, sufficiency, value, perfection or
priority of any Lien purported to be granted to Agent, whether pursuant to any
Mortgage or otherwise; and (vi) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier) believed by it in good faith
to be genuine and signed or sent by the proper party or parties.
(b) In exercising rights and performing obligations on behalf of
Lessor pursuant to the authority granted in this SECTION 10, elsewhere in this
Agreement or the other Operative Documents, Agent shall be directly liable to
the other parties to the Operative Documents to the same extent that Lessor
would have been liable had it exercised such rights or performed such
obligations directly and Agent shall also be protected and exculpated to the
same extent as Lessor would be protected and exculpated in exercising such
rights and performing such rights directly. Anything to the contrary provided
in this Agreement or the other Operative Documents notwithstanding, in no event
shall Lessor be liable as a result of any action or omission of Agent taken
pursuant to the authority of Agent to act on behalf of Lessor granted in this
SECTION 10 or elsewhere in this Agreement or the other Operative Documents.
10.3. RIGHTS AS HOLDER. With respect to its commitment and the
Notes held by it or any of its Affiliates and all other rights, claims and
interests accorded it or such Affiliate as Holder, such Holder shall have the
same rights and powers under this Agreement as any other Holder and may
exercise the same as though it were not Agent; and the term "Holder" or
"Holders" shall include Agent and any Affiliate of Agent in its individual
capacity. Agent and its Affiliates may accept deposits from, lend money to, act
as trustee under indentures of, and generally engage in any kind of business
with, Lessee, any of its Subsidiaries and any Person who may do business with
or own securities of Lessee or any such Subsidiary, all as if Agent were not
Agent and without any duty to account therefor to the Holders. Any Holder and
its respective Affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
Lessee, any of its Subsidiaries and any Person who may do business with or own
securities of Lessee or any such Subsidiary, all as if such Holder were not a
Holder hereunder and without any duty to account therefor to the other Holders.
10.4. HOLDER CREDIT DECISION. Each Holder acknowledges that it has,
independently and without reliance upon Agent or any other Holder and based on
the financial statements referred to in SECTION 5.1(E)(I) delivered through the
Closing Date and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Holder also acknowledges that it will, independently and
without reliance upon Agent or any other Holder and based on such documents and
information as it deems appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
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10.5. INDEMNIFICATION. The Holders and Lessor agree to indemnify
Agent (to the extent not reimbursed by Lessee) ratably according to their
respective Series Percentages from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Agent in any way relating to or arising
out of this Agreement or the other Operative Documents or any action taken or
omitted by Agent under this Agreement or the other Operative Documents;
provided that no Holder shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Holder agrees to reimburse
Agent promptly upon demand for its ratable share of any reasonable
out-of-pocket expenses (including reasonable fees and expenses of counsel)
incurred by Agent in connection with the preparation, execution, delivery,
modification, amendment, protection or enforcement (whether through
negotiations, by legal proceedings, in bankruptcy or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement or the
other Operative Documents, to the extent that Agent is not reimbursed for such
expenses by Lessor.
10.6. SUCCESSOR AGENT. Agent may resign at any time by giving
written notice thereof to the Holders and Lessee and may be removed at any time
with or without cause by the Requisite Holders. Upon any such resignation or
removal, the Requisite Holders shall, subject to the written consent of Lessee,
which consent shall not be unreasonably withheld or delayed, have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed
by the Requisite Holders, and shall have accepted such appointment, within 30
days after the retiring Agent's giving of notice of resignation or the
Requisite Holders' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Holders, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States of America or of
any State and having total assets of at least $20,000,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement.
After any retiring Agent's resignation or removal hereunder as Agent, the
provisions of this SECTION 10 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 11. MISCELLANEOUS
11.1. AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Operative Document, nor consent to any
departure by Lessee therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Requisite Holders (unless Agent is
expressly authorized hereunder or under any Operative Document to act without
joinder of the Requisite Holders, in which case Agent may take such action),
and,
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with respect to amendments only, Lessee and Lessor, and then, with respect to
waivers and consents, such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided that
no amendment, waiver or consent shall, unless in writing and signed by all of
the Holders, do any of the following: (a) increase the amount of Advances
required to be made by any Holder or subject the Holders to any additional
obligations, (b) reduce the Prime Rate, Applicable Floating Rate Margin, LIBOR
Rate, Applicable LIBOR Margin, or Facility Fees, or any fees or other amounts
payable hereunder or under any other Operative Document, (c) take action which
requires the signing of all the Holders pursuant to the terms of this Agreement
or under any other Operative Document, (d) affect the allocation of funds
pursuant to the Intercreditor Agreement, (e) postpone any date fixed for any
payment of principal or stated amount of, or interest on the Notes or any fees
or other amounts payable under any Operative Document, (f) postpone or reduce
the payment obligations of the Subsidiary Guarantors under the Guaranty, (g)
release any of the Liens created pursuant to the Operative Documents or permit
the disposition of any Property, other than as expressly provided in the
Operative Documents, (h) release, waive, or modify in a manner adverse to any
Holder, the obligations of the Subsidiary Guarantors under the Guaranty, (i)
modify the priority of any Lien or except as expressly permitted by the
Operative Documents, allow any Person to have an interest in the collateral
created pursuant to the Operative Documents; (j) amend this SECTION 11.1 or (k)
amend the definition of Requisite Holders; provided further that (1) no
amendment, waiver or consent shall, unless in writing and signed by Agent in
addition to the Holders required above to take such action, affect the rights
or duties of Agent under this Agreement or any of the Operative Documents; and
(2) no amendment, waiver or consent shall, unless in writing and signed by
Lessor in addition to the Holders required above to take such action, affect
the rights or duties of Lessor under this Agreement or any of the Operative
Documents.
11.2. SURVIVAL. All warranties, representations, indemnities and
covenants made by any party hereto, herein or in any certificate or other
instrument delivered by any such party or on the behalf of any such party under
this Agreement shall be considered to have been relied upon by each other party
hereto and shall survive the consummation of the transactions contemplated
hereby on the Closing Date and each Restaurant Closing Date, regardless of any
investigation made by any such party or on behalf of any such party.
11.3. NOTICES. Unless otherwise specifically provided in any
Operative Document, all notices, consents, directions, approvals, instructions,
requests and other communications given to any party hereto under any Operative
Document shall be in writing to such party at the address set forth in
SCHEDULE 1 or at such other address as such party shall designate by notice to
each of the other parties hereto and may be personally delivered (including
delivery by private courier services) or by telecopy (with a copy of such
notice sent by private courier service for overnight delivery or by registered
or certified mail), to the party entitled thereto, and shall be deemed to be
duly given or made when delivered by hand unless such day is not a Business
Day, in which
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case such delivery shall be deemed to be made as of the next succeeding
Business Day or in the case of telecopy (with a copy of such notice sent by
private courier service for overnight delivery or by registered or certified
mail), when sent, so long as it was received during normal business hours of
the receiving party on a Business Day and otherwise such delivery shall be
deemed to be made as of the next succeeding Business Day.
11.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of, and shall be enforceable by, the parties
hereto and their respective successors and assigns as permitted by and in
accordance with the terms hereof, including, without limitation, each
successive holder of any Note. Except as expressly provided herein or in the
other Operative Documents, no party hereto may assign their interests herein
without the written consent of the parties hereto.
11.5. BUSINESS DAY. Notwithstanding anything hereto or in any other
Operative Document to the contrary, if the date on which any payment is to be
made or the last date for performance of any act or the exercising of any right
pursuant to this Agreement or any other Operative Document is not a Business
Day, then such payment may be made or act performed or right exercised on the
next succeeding Business Day with the same force and effect as if made on the
nominal date provided in the applicable Operative Document, except that
interest and Distributions shall accrue and be payable for the period after
such nominal date.
11.6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TENNESSEE.
11.7. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
11.8. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each executed counterpart constituting an original but all
together only one Agreement.
11.9. HEADINGS AND TABLE OF CONTENTS. The headings of the sections
of this Agreement and the Table of Contents are inserted for purposes of
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
11.10. TAX AND ACCOUNTING MATTERS. Lessee acknowledges that none of
any Holder, Agent, Lessor or any Affiliate of any thereof is making any
representation, nor is it required to make any disclosure, now or in the
future, with respect to the parties' tax or accounting treatment
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of any Property or the financing thereof, nor is any Holder, Agent, Lessor, or
any Affiliate of any thereof responsible, nor will it be responsible in the
future, for tax and accounting advice with respect to any Property or the
financing thereof, and Lessee has had or will have the benefit of the advice of
its own independent tax and accounting advisors with respect to such matters.
11.11. LIMITATIONS OF LIABILITY. None of Agent, Lessor or any Holder
shall have any obligation or duty to Lessee, or to others with respect to the
transactions contemplated hereby, except those obligations or duties of such
party expressly set forth in this Agreement and the other Operative Documents
to be undertaken in such party's individual capacity, and none of Agent, Lessor
or any Holder shall be liable for performance by any other party hereto of such
other party's obligations or duties hereunder. Without limitation of the
generality of the foregoing, but subject to the provisions of SECTION 10.2(B),
under no circumstances whatsoever shall Agent or any Holder be liable to Lessee
for any action or inaction on the part of Lessor in connection with the
transactions contemplated herein, whether or not such action or inaction is
caused by willful misconduct or gross negligence of Lessor unless such action
or inaction is at the direction of Agent or any Holder, as the case may be, and
such direction is expressly permitted hereby.
11.12. TRANSACTION COSTS; FEES. Anything to the contrary provided
herein notwithstanding, the initial Advance and corresponding Lessor Investment
hereunder shall include funds necessary for the payment of all reasonable and
documented fees, expenses, disbursements and out-of-pocket costs incurred by
Lessor, Agent and the Noteholders on or before the initial Advance Date in
connection with the preparation, execution and delivery of any Operative
Document, or any other agreement, arrangement, document or paper relating to
the transactions contemplated hereby or any amendment or supplement thereto or
any waivers or enforcement thereof (collectively "Transaction Costs"),
including, but not limited to:
(a) the reasonable and documented fees, expenses and
disbursements of each of Agent, Lessor, Lessor's counsel, and special
counsel and local counsel to Agent and up to $2,500 of the reasonable
and documented fees, expenses and disbursements of each Noteholder for
services rendered to such parties in connection with such
transactions;
(b) all reasonable and documented fees and expenses in
connection with any appraisal, environmental report, survey or
inspection of any Property, or any printing and other document
reproduction and distribution expenses, stamp or other similar Taxes,
fees or excises, including interest and penalties, and all filing fees
and Taxes in connection with the recording or filing of instruments
and financing statements in connection with the transactions described
in this Agreement;
(c) the reasonable and documented out-of-pocket expenses
of Lessor and Agent in connection with the placement of the Notes;
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(d) the reasonable and documented fees, expenses and
disbursements of each of the Noteholders, including the reasonable and
documented fees and disbursements of their respective counsel, in
connection with the enforcement of any rights of the Noteholders under
any of the Operative Documents; and
(e) any and all fees payable under the separate fee
letter between Lessee and Agent entered into on or prior to the
Closing Date. Any Transaction Costs paid or incurred after the initial
Advance Date shall be paid from the proceeds of subsequent Advances
and Lessor Investment hereunder or, if no further Advances or Lessor
Investment are available, paid by Lessor and reimbursed by Lessee to
Lessor as Additional Rent under the Lease. If for any reason the
transactions contemplated by this Agreement fail to close, such
Transaction Costs shall be paid by Lessee and Lessee shall indemnify
and hold harmless Lessor, the Agent and each Noteholder from and
against any such Transaction Costs.
11.13. OPERATIVE DOCUMENTS; FURTHER ASSURANCES. Each of the parties
hereto does hereby covenant and agree to perform and be governed and restricted
by the Operative Documents to which it is a party and, subject to the terms and
conditions thereof, to take or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper or advisable in connection
therewith. Lessee, Lessor, Agent and the Holders will, at the expense of
Lessee, execute and deliver such further instruments and do such further acts
as may be necessary or proper to carry out more effectively the purposes of the
Operative Documents and the transactions contemplated thereby. Lessee, Lessor,
Agent and the Holders may at any time, subject to the conditions and
restrictions contained in the Operative Documents, enter into supplements which
shall form a part hereof, when required or permitted by any of the provisions
of the Operative Documents or to cure any ambiguity, or to cure, correct or
supplement any defective or inconsistent provision contained herein or in any
other Operative Document.
11.14. EXCULPATION. The Agent shall not be entitled to, and shall
not enforce, the liability and obligation of the Lessor to perform and observe
the obligations contained in this Agreement, the Notes or in any of the other
Operative Documents by any action or proceeding wherein a money judgment or
personal liability shall be sought against the Lessors, any partners,
shareholders or members (or other constituent party(ies)), principals
(disclosed or undisclosed) of the Lessor (the "EXCULPATED PARTIES"), except
that the Agent may bring an appropriate action or proceeding to enable the
Agent to enforce and realize upon the Noteholders' interests under this
Agreement, the Note, or the other Operative Documents; provided, however, that,
except as specifically provided herein, any judgment in any such action or
proceeding shall be enforceable against the Lessor only to the extent of the
collateral given or granted to the Noteholders in connection with this
Agreement, and the Agent agrees that it shall not xxx for, seek or demand any
deficiency judgment against any of the Exculpated Parties in any such action or
proceeding under, or by reason of, or in connection with this Agreement, the
Note, or any of the other
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Operative Documents. The provisions of this paragraph shall not, however,
constitute a waiver, release or impairment of any obligation evidenced or
secured by this Agreement, the Notes or any of the other Operative Document.
Notwithstanding the foregoing provisions of this SECTION 11.14, the Lessor
shall and hereby agrees to be personably liable for any loss, damage, cost,
expense, liability, claim or other obligation incurred by the Agent (including
reasonable attorneys' fees and costs reasonably incurred) arising out of or in
connection with fraud or intentional misrepresentation by the Lessor in
connection with the transactions contemplated by the Operative Documents.
11.15. WAIVER OF TRIAL BY JURY. IN ANY ACTION OR PROCEEDING UNDER OR
RELATED TO THIS AGREEMENT, THE OPERATIVE DOCUMENTS OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION WITH THE FOREGOING, LESSEE, AGENT, LESSOR AND EACH
HOLDER HEREBY AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY, IRRESPECTIVE OF WHICH PARTY COMMENCES SUCH ACTION
OR PROCEEDING.
11.16. BENEFIT. The parties hereto and their permitted successors
and assigns shall be bound hereby and entitled to the benefits hereof.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Participation
Agreement to be executed and delivered, all as of the date first above written.
LESSEE AND CONSTRUCTION AGENT:
O'CHARLEY'S INC.
By: /s/ A. Xxxx Xxxxxxxx
------------------------------------
Name: A. Xxxx Xxxxxxxx
Title: Treasurer
LESSOR:
FIRST AMERICAN BUSINESS CAPITAL, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
AGENT:
AMSOUTH BANK, as Agent
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
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[NOTEHOLDERS]
BANK OF AMERICA, N.A.
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
By: Xxxxxxx X. Xxxxx
Title: Senior Vice President
FIRSTAR BANK, N.A.
/s/ Xxxx Xxxxxxx
-----------------------------
By: Xxxx Xxxxxxx
Title: Assistant Vice President
AMSOUTH BANK
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
By: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
FIRST UNION NATIONAL BANK
/s/ Xxxx X. Xxxxxxx
------------------------------
By: Xxxx X. Xxxxxxx
Title: Vice President
SUNTRUST BANK
/s/ Xxxxx Xxxxx
------------------------------
By: Xxxxx Xxxxx
Title: Vice President
