Exhibit 4.3
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is executed effective as of
December 19, 2001, by and between GE CAPITAL FRANCHISE FINANCE CORPORATION, a
Delaware corporation ("Lender"), whose address is 00000 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, and FRIENDLY'S REALTY II, LLC, a Delaware limited
liability company ("Borrower"), whose address is 0000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000-0000.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms used in
this Agreement shall have the meanings set forth in Section 1. Borrower has
requested that Lender make the Loans which will be secured by the Premises. Each
Loan will be evidenced by a Note and secured by a first priority security
interest in the corresponding Premises pursuant to a Mortgage. Lender has
committed to make the Loans pursuant to the terms and conditions of the
Commitment, this Agreement and the other Loan Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings for
all purposes of this Agreement:
"ACTION" has the meaning set forth in Section 10.A(4).
"ADA" means the Americans with Disabilities Act of 1990, as such act may
be amended from time to time.
"AFFILIATE" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities or otherwise.
"APPLICABLE REGULATIONS" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over the Premises, including, without
limitation, all health, building, fire, safety and other codes, ordinances and
requirements, all applicable standards of the National Board of Fire
Underwriters and the ADA and all rules of common law, in each case, as amended,
and any judicial or administrative interpretation thereof, including any
judicial order, consent, decree or judgment applicable to Borrower or Lessee.
"BORROWER ENTITIES" means, collectively, Borrower and any Affiliate of
Borrower.
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"BORROWER GROUP" means Friendly's Realty I, LLC, a Delaware limited
liability company, Friendly's Realty II, LLC, a Delaware limited liability
company and Friendly's Realty III, LLC, a Delaware limited liability company,
and any new borrowing entity formed pursuant to the Post Closing Agreement in
connection with such entity's assumption of certain Related Loans and
acquisition of the real property and other collateral securing the same (all as
provided in the Post Closing Agreement).
"BUSINESS DAY" means any day on which Lender is open for business other
than a Saturday, Sunday or a legal holiday, ending at 5:00 P.M. Phoenix, Arizona
time.
"CAPITAL LEASE" has the meaning set forth in Section 7.J.
"CHANGE OF CONTROL" means a change in control of Borrower, including,
without limitation, a change in control resulting from direct or indirect
transfers of voting stock or partnership, membership or other ownership
interests, whether in one or a series of transactions, or from a merger or
consolidation by Borrower with or into any other entity. For purposes of this
definition, "control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of Borrower.
"CLOSING" means the disbursement of the Loan Amounts by Title Company as
contemplated by this Agreement.
"CLOSING DATE" means the date of this Agreement.
"CODE" means Title 11 of the United States Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"COLLATERAL ASSIGNMENT OF LICENSE AGREEMENT" means the collateral
assignment of license agreement dated as of the date of this Agreement executed
by Borrower in favor of Lender pursuant to which Borrower has collaterally
assigned the License Agreement to Lender as security for the Loans, as the same
may be amended from time to time.
"COMMITMENT" means that certain Commitment Letter dated August 29, 2001
between Lender and Lessee, and any amendments or supplements thereto.
"COUNSEL" means legal counsel to Borrower and Lessee, licensed in the
states in which (i) the Premises are located, (ii) Borrower and Lessee are
incorporated or formed and (iii) Borrower and Lessee maintain their chief
executive offices, as selected by Borrower and Lessee, as the case may be, and
approved by Lender.
"DEBT" has the meaning set forth in Section 7.J.
"DEFAULT RATE" has the meaning set forth in the Notes.
"DEPRECIATION AND AMORTIZATION" has the meaning set forth in Section 7.J.
"DISCLOSURES" has the meaning set forth in Section 14.P(2).
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"ENVIRONMENTAL CONDITION" means any condition with respect to soil,
surface waters, groundwaters, land, stream sediments, surface or subsurface
strata, ambient air and any environmental medium comprising or surrounding any
of the Premises, whether or not yet discovered, which would reasonably be
expected to or does result in any damage, loss, cost, expense, claim, demand,
order or liability to or against Borrower, Lessee or Lender by any third party
(including, without limitation, any Governmental Authority), including, without
limitation, any condition resulting from the operation of business at any of the
Premises and/or the operation of the business of any other property owner or
operator in the vicinity of the Premises and/or any activity or operation
formerly conducted by any person or entity on or off any of the Premises.
"ENVIRONMENTAL INDEMNITY AGREEMENT" means the environmental indemnity
agreement dated as of the date of this Agreement executed by Borrower for the
benefit of the Indemnified Parties and such other parties as are identified in
such agreement with respect to the Premises, as the same may be amended from
time to time.
"ENVIRONMENTAL INSURER" means American International Specialty Lines
Insurance Company, or such other environmental insurance company as Lender may
select, and its successors and assigns.
"ENVIRONMENTAL LAWS" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations, orders, injunctions and
decrees of Governmental Authorities and common law, relating to Hazardous
Materials and/or the protection of human health or the environment by reason
of a Release or a Threatened Release of Hazardous Materials or relating to
liability for or costs of Remediation or prevention of Releases.
"Environmental Laws" includes, but is not limited to, the following statutes,
as amended, any successor thereto, and any regulations, rulings, orders or
decrees promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations, orders, injunctions and decrees of
Governmental Authorities: the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq.; the
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Section 11001
et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101
et seq.; the Resource Conservation and Recovery Act (including but not
limited to Subtitle I relating to USTs), 42 U.S.C. Sections 6901 et seq.; the
Clean Water Act, 33 U.S.C. Sections 1251 et seq.; the Clean Air Act, 42
U.S.C. Sections 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Safe Drinking Water Act, 42 U.S.C. Sections 7401 et
seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136
et seq.; the Endangered Species Act, 16 U.S.C. Sections 1531 et seq. and the
National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.
"Environmental Laws" also includes, but is not limited to, any present and
future federal, state and local laws, statutes, ordinances, rules,
regulations, orders, injunctions and decrees of Governmental Authorities and
common law: conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of
the property; requiring notification or disclosure of Releases or other
environmental condition of any of the Premises to any Governmental Authority
or other person or entity, whether or not in connection with transfer of
title to or interest in property; imposing conditions or requirements
relating to Hazardous Materials in connection with permits or other
authorizations required by Governmental Authorities; relating to the handling
and disposal of Hazardous Materials; relating to nuisance,
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trespass or other causes of action related to Hazardous Materials; and relating
to wrongful death, personal injury, or property or other damage in connection
with the physical condition or use of any of the Premises by reason of the
presence of Hazardous Materials in, on, under or above any of the Premises.
"ENVIRONMENTAL LIEN" has the meaning set forth in Section 6.K(9).
"ENVIRONMENTAL POLICIES" means environmental insurance policies issued by
Environmental Insurer to Lender with respect to the Premises, which
Environmental Policies shall be in form and substance satisfactory to Lender in
its sole discretion.
"EQUIPMENT PAYMENT AMOUNT" has the meaning set forth in Section 7.J.
"EVENT OF DEFAULT" has the meaning set forth in Section 10.
"EXISTING FACILITY" means the credit facility evidenced by the Credit
Agreement dated November 19, 1997, among Lessee, the several banks and other
financial institutions or entities from time to time parties thereto and Societe
Generale, as arranger and administrative agent, and any amendments or
supplements thereto.
"FCCR AMOUNT" has the meaning set forth in Section 10.A(7).
"FCCR AMOUNT NOTICE" has the meaning set forth in Section 10.A(7).
"FEE" means an underwriting, site assessment, valuation, processing and
commitment fee equal to 1% of the sum of the Loan Amounts for all of the
Premises.
"FINANCIAL INFORMATION" means the financial statements and other
financial information concerning Borrower and Lessee delivered to Lender by
Borrower and/or Lessee.
"FIXED CHARGE COVERAGE RATIO" has the meaning set forth in Section 7.J.
"GAAP" means generally accepted accounting principles consistently
applied.
"GOVERNMENTAL AUTHORITY" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or
quasi-governmental authority having jurisdiction or supervisory or regulatory
authority over any of the Premises or any of the Borrower Entities.
"GROSS SALES" has the meaning set forth in Section 7.J.
"HAZARDOUS MATERIALS" means (a) any toxic substance or hazardous waste,
substance, solid waste or related material, or any pollutant or contaminant; (b)
radon gas, asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment containing
dielectric fluid having levels of polychlorinated biphenyls in excess of
applicable standards established by any Governmental Authority, or any petroleum
product or additive; (c) any substance, gas, material or chemical which is now
or hereafter defined as or included in the definition of "hazardous substances,"
"toxic substances," "hazardous materials,"
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"hazardous wastes," "regulated substances" or words of similar import under any
Environmental Laws; and (d) any other chemical, material, gas or substance the
exposure to or release of which is prohibited, limited or regulated by any
Governmental Authority that asserts or may assert jurisdiction over any of the
Premises or the operations or activity at any of the Premises, or any chemical,
material, gas or substance that does or is reasonably likely to pose a hazard to
the health and/or safety of the occupants of any of the Premises or the owners
and/or occupants of property adjacent to or surrounding any of the Premises.
"INDEMNIFIED PARTIES" means Lender, Environmental Insurer, the trustees
under the Mortgages, if applicable, and any person or entity who is or will have
been involved in the origination of the Loans, any person or entity who is or
will have been involved in the servicing of the Loans, any person or entity in
whose name the encumbrance created by any of the Mortgages is or will have been
recorded, persons and entities who may hold or acquire or will have held a full
or partial interest in the Loans (including, but not limited to, investors or
prospective investors in any Securitization, Participation or Transfer, as well
as custodians, trustees and other fiduciaries who hold or have held a full or
partial interest in any of the Loans for the benefits of third parties), as well
as the respective directors, officers, shareholders, partners, members,
employees, lenders, agents, servants, representatives, affiliates, subsidiaries,
participants, successors and assigns of any and all of the foregoing (including,
but not limited to, any other person or entity who holds or acquires or will
have held a participation or other full or partial interest in any of the Loans
or any of the Premises, whether during the term of the Loans or as a part of or
following a foreclosure of any of the Loans and including, but not limited to,
any successors by merger, consolidation or acquisition of all or a substantial
portion of Lender's assets and business).
"INDEMNITY AGREEMENTS" means all indemnity agreements executed for the
benefit of Borrower, Lessee or any prior owner, lessee or occupant of the
Premises in connection with Hazardous Materials, including, without limitation,
the right to receive payments under such indemnity agreements.
"INTEREST EXPENSE" has the meaning set forth in Section 7.J.
"LEASE" means the master lease between Borrower, as lessor, and Lessee,
as lessee, with respect to the Premises, together with all amendments,
modifications and supplements thereto.
"LENDER ENTITIES" means, collectively, Lender (including any
predecessor-in-interest to Lender by merger) and any Affiliate of Lender
(including any Affiliate of any predecessor-in-interest to Lender by merger)
that have made any loans to any of the Borrower Entities which have not been
paid in full as of the date of this Agreement.
"LENDER PAYMENTS" has the meaning set forth in Section 7.J.
"LESSEE" means Friendly Ice Cream Corporation, a Massachusetts
corporation, and its successors.
"LICENSE AGREEMENT" means the license agreement dated as of the date of
this Agreement between Borrower and Lessee pursuant to which Lessee has granted
Borrower a license to use the trade name and trademarks of Lessee and to operate
the Premises as a Permitted Concept
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upon the occurrence of an event of default under the Lease, as the same may be
amended from time to time.
"LOAN" OR "LOANS" means, as the context may require, the loan for each
Premises, or the loans for all of the Premises, described in Section 2.
"LOAN AMOUNT" OR "LOAN AMOUNTS" means, as the context may require, the
aggregate amount set forth in Section 2 or, with respect to each Premises, the
individual amount set forth in Exhibit A.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Mortgages, the Environmental Indemnity Agreement, the UCC-1 Financing
Statements, the Collateral Assignment of License Agreement and all other
documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended from time to time.
"LOAN POOL" means:
(i) in the context of a Securitization, any pool or group of loans that
are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are sold, transferred
or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"LOST NOTE" has the meaning set forth in Section 7.K.
"LOSSES" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) any of
the Premises, including, without limitation, the operation of any of the
Premises as a Permitted Concept, or (ii) Borrower's ability to perform its
obligations under the Loan Documents.
"MEMORANDA" has the meaning set forth in Section 4.K.
"MORTGAGE" OR "MORTGAGES" means, as the context may require, the deed of
trust or mortgage dated as of the date of this Agreement executed by Borrower
for the benefit of Lender with respect to a Premises or the deeds of trust or
mortgages dated as of the date of this Agreement executed by Borrower for the
benefit of Lender with respect to all of the Premises, as the same may be
amended from time to time. A Mortgage has been executed for each Premises.
"NET INCOME" has the meaning set forth in Section 7.J.
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"NEW FACILITY" means a new credit facility entered into by Lessee at or
prior to Closing, which (i) is in the principal amount of not less than
$30,000,000, (ii) has a term of not less than three years, and (iii) has a
structure and documentation subject to Lender's approval, including provisions
that certain personal property and real property owned by Lessee after the
Closing (excluding Lessee's leasehold interests in the Premises) may be used by
Lessee for mortgage loan transactions, with the net proceeds therefrom (after
payment of applicable closing costs) being applied first to the remaining
principal amount outstanding under the Existing Facility as of the Closing Date
(the "Remaining Balance"), with any remaining net proceeds therefrom (the
"Excess Proceeds") being applied as Lessee and Lender shall mutually agree;
provided that none of the Excess Proceeds shall be required to be applied to any
amount under the New Facility.
"NOTE" OR "NOTES" means, as the context may require, the promissory note
dated as of the date of this Agreement executed by Borrower in favor of Lender
evidencing a Loan with respect to a Premises or the promissory notes dated as of
the date of this Agreement executed by Borrower in favor of Lender evidencing
the Loans with respect to all of the Premises, as the same may be amended,
restated and/or substituted from time to time, including, without limitation, as
a result of the payment of the FCCR Amount pursuant to Section 10. A Note has
been executed for each Premises in the Loan Amount corresponding to such
Premises.
"OBLIGATIONS" has the meaning set forth in the Mortgages.
"OPERATING LEASE EXPENSE" has the meaning set forth in Section 7.J.
"OTHER AGREEMENTS" means, collectively, all agreements and instruments
between or among any of the Borrower Entities and any of the Lender Entities,
and all agreements and instruments by any of the Borrower Entities for the
benefit of any of the Lender Entities, including, without limitation, the
Related Loan Documents provided, however, the term "Other Agreements" shall not
include the agreements and instruments defined as the Loan Documents.
"PARTICIPATION" means one or more grants by Lender or any of the other
Lender Entities to a third party of a participating interest in notes evidencing
obligations to repay secured or unsecured loans owned by Lender or any of the
other Lender Entities or any or all servicing rights with respect thereto.
"PERMITTED AMOUNTS" means, with respect to any given level of Hazardous
Materials, that level or quantity of Hazardous Materials in any form or
combination of forms the presence, use, storage, release or handling of which
does not constitute a violation of any Environmental Laws and is customarily
employed in the ordinary course of, or associated with, similar businesses
located in the states in which the Premises are located.
"PERMITTED CONCEPT" means a Friendly's restaurant.
"PERMITTED EXCEPTIONS" means those exceptions set forth as exceptions in
the title insurance policies issued by Title Company to Lender and approved by
Lender in its sole discretion in connection with the closing of the Loans.
"PERSON" means any individual, corporation, partnership, limited
liability company, trust, unincorporated organization, Governmental Authority or
any other form of entity.
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"PERSONAL PROPERTY" has the meaning set forth in the Mortgages.
"POST CLOSING AGREEMENT" means that certain Post Closing Agreement dated
as of the date of this Agreement executed by Friendly's Realty I, LLC, a
Delaware limited liability company, and Lender, as the same may be amended from
time to time.
"PREMISES" means the parcel or parcels of real estate corresponding to
the FFC File Numbers and addresses identified on Exhibit A attached hereto,
together with all rights, privileges and appurtenances associated therewith and
all buildings, fixtures and other improvements now or hereafter located thereon
(whether or not affixed to such real estate) and the Personal Property. As used
herein, the term "Premises" shall mean either a singular property or all of the
properties collectively, as the context may require.
"PROPOSED SUBSTITUTION NOTICE" has the meaning set forth in Section
13.B(1).
"QUESTIONNAIRES" means the environmental questionnaires completed by
Lessee with respect to the Premises and submitted to Environmental Insurer in
connection with the issuance of the Environmental Policies.
"RELATED LOANS" means, collectively, the loans evidenced by the Related
Notes.
"RELATED LOAN AGREEMENTS" means, collectively, those certain loan
agreements dated as of the date of this Agreement between Lender and each of the
entities in the Borrower Group, as the same may be amended from time to time.
"RELATED LOAN DOCUMENTS" means, collectively, the Related Loan
Agreements, the Related Notes and all other agreements and instruments between
or by any of the entities in the Borrower Group and, or for the benefit of,
Lender and executed pursuant to any of the Related Loan Agreements, as the same
may be amended from time to time.
"RELATED NOTES" means, collectively, the promissory notes executed by the
entities in the Borrower Group and payable to Lender pursuant to any of the
related Loan Agreements and any amendments, extensions or modifications of any
thereof.
"RELEASE" means any presence, release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials.
"REMEDIATION" means any response, remedial, removal, or corrective
action, any activity to clean up, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Materials required by any Environmental Law or any
Governmental Authority, any actions to prevent, cure or mitigate any Release,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or any evaluation
relating to any Hazardous Materials.
"RESTORATION" has the meaning set forth in the Mortgages.
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"SECURITIZATION" means one or more sales, dispositions, transfers or
assignments by Lender or any of the other Lender Entities to a special purpose
corporation, trust or other entity identified by Lender or any of the other
Lender Entities of notes evidencing obligations to repay secured or unsecured
loans owned by Lender or any of the other Lender Entities (and, to the extent
applicable, the subsequent sale, transfer or assignment of such notes to another
special purpose corporation, trust or other entity identified by Lender or any
of the other Lender Entities), and the issuance of bonds, certificates, notes or
other instruments evidencing interests in pools of such loans, whether in
connection with a permanent asset securitization or a sale of loans in
anticipation of a permanent asset securitization. Each Securitization shall be
undertaken in accordance with all requirements which may be imposed by the
investors or the rating agencies involved in each such sale, disposition,
transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations.
"SUBJECT PREMISES" has the meaning set forth in Section 10.A(7).
"SUBSTITUTE DOCUMENTS" has the meaning set forth in Section 13.
"SUBSTITUTE PREMISES" means one or more parcels of real estate
substituted for a Premises in accordance with the requirements of Section 13,
together with all rights, privileges and appurtenances associated therewith and
all buildings, fixtures and other improvements, equipment, trade fixtures,
appliances and other personal property located thereon (whether or not affixed
to such real estate). For purposes of clarity, where two or more parcels of real
estate comprise a Substitute Premises, such parcels or interests shall be
aggregated and deemed to constitute the Substitute Premises for all purposes of
this Agreement.
"SUBSTITUTE PREMISES PERMITTED EXCEPTIONS" has the meaning set forth in
Section 13.
"THREATENED RELEASE" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding any of the Premises
which may result from such Release.
"TITLE COMPANY" means Lawyers Title Insurance Corporation.
"TRANSFER" means one or more sales, transfers or assignments by Lender or
any of the other Lender Entities to a third party of notes evidencing
obligations to repay secured or unsecured loans owned by Lender or any of the
other Lender Entities or any or all servicing rights with respect thereto.
"UCC-1 FINANCING STATEMENTS" means such UCC-1 Financing Statements as
Lender shall require to be executed and delivered by Borrower with respect to
the transactions contemplated by this Agreement.
"USTS" means any one or combination of below or above ground tanks and
associated piping systems used in connection with the storage, dispensing and
general use of regulated substances.
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2. TRANSACTION. On the terms and subject to the conditions set forth in
the Loan Documents, Lender shall make the Loans. The Loans will be evidenced by
the Notes and secured by the Mortgages. Borrower shall repay the outstanding
principal amount of the Loans together with interest thereon in the manner and
in accordance with the terms and conditions of the Notes and the other Loan
Documents. The aggregate Loan Amount shall be $25,215,000, allocated among the
Premises as set forth on the attached Exhibit A. The Loans shall be advanced at
the Closing in cash or otherwise immediately available funds subject to any
prorations and adjustments required by this Agreement. The Premises shall be
leased to the Lessee pursuant to the Lease and, at Closing, Borrower shall
assign the Lease to Lender pursuant to the Mortgages.
3. ESCROW AGENT; CLOSING COSTS. A. Borrower and Lender hereby employ
Title Company to act as escrow agent in connection with the transaction
described in this Agreement. Title Company shall not cause the transaction to
close unless and until it has received written instructions from Lender and
Borrower to do so. Borrower and Lender will deliver to Title Company all
documents, pay to Title Company all sums and do or cause to be done all other
things reasonably necessary or required by this Agreement, in the reasonable
judgment of Title Company, to enable Title Company to comply herewith and to
enable any title insurance policy provided for herein to be issued. Title
Company is authorized to pay, upon written approval of Borrower and Lender with
respect to their respective funds, from any funds held by it for Lender's or
Borrower's respective credit, all amounts necessary to procure the delivery of
such documents and to pay, on behalf of Lender and Borrower, all charges and
obligations payable by them, respectively. Borrower will pay all charges and
expenses payable by it under the terms of the Loan Documents to Title Company.
Title Company is authorized, in the event any conflicting demand is made upon it
concerning these instructions or the escrow, at its election, to hold any
documents and/or funds deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of Borrower and Lender
or to interplead such documents and/or funds in an action brought in any such
court. Deposit by Title Company of such documents and funds, after deducting
therefrom its charges and its expenses and reasonable attorneys' fees incurred
in connection with any such court action, shall relieve Title Company of all
further liability and responsibility for such documents and funds. Title
Company's receipt of this Agreement and opening of an escrow pursuant to this
Agreement shall be deemed to constitute conclusive evidence of Title Company's
agreement to be bound by the terms and conditions of this Agreement pertaining
to Title Company. Disbursement of any funds shall be made by check, certified
check or wire transfer, as directed by Borrower and Lender. Title Company shall
be under no obligation to disburse any funds represented by check or draft, and
no check or draft shall be payment to Title Company in compliance with any of
the requirements hereof, until it is advised by the bank in which such check or
draft is deposited that such check or draft has been honored. Title Company is
authorized to act upon any statement furnished by the holder or payee, or a
collection agent for the holder or payee, of any lien on or charge or assessment
in connection with the Premises, concerning the amount of such charge or
assessment or the amount secured by such lien, without liability or
responsibility for the accuracy of such statement. The employment of Title
Company as escrow agent shall not affect any rights of subrogation under the
terms of any title insurance policy issued pursuant to the provisions thereof.
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B. Lender has ordered a title insurance commitment for each Premises
from Title Company. Prior to, or concurrently with, the Closing, the parties
hereto shall deposit with Title Company all documents and moneys necessary to
comply with their obligations under this Agreement. Subject to the terms of this
Agreement, all costs of such transaction shall be borne by Borrower, including,
without limitation, the cost of title insurance premiums and all endorsements
required by Lender, the cost of Personal Property lien insurance premiums and
all endorsements required by Lender, survey charges, UCC and litigation search
charges, the attorneys' fees of Borrower, reasonable attorneys' fees and
expenses of Lender (excluding the cost and expense of any of Lender's in-house
legal staff), the cost of the environmental due diligence undertaken pursuant to
Section 4.E, including, without limitation, the cost of the Environmental
Policies, Lender's site inspection costs and fees, stamp taxes, mortgage taxes,
transfer fees, escrow, filing and recording fees and UCC filing and recording
fees (including preparation, filing and recording fees for UCC continuation
statements). All real and personal property and other applicable taxes and
assessments and other charges relating to the Premises which are due and payable
on or prior to the Closing Date as well as taxes and assessments due and payable
subsequent to the Closing Date but which Title Company requires to be paid at
Closing as a condition to the issuance of the title insurance policy described
in Section 4.C, shall be paid by Borrower at or prior to the Closing. The Loan
Documents shall be dated as of the Closing Date.
4. CLOSING CONDITIONS. The obligation of Lender to consummate the
transaction contemplated by this Agreement is subject to the fulfillment or
waiver of each of the following conditions at, or prior to, Closing:
A. TITLE. Fee title to each of the Premises (other than the Personal
Property) shall be vested in Borrower, free of all liens, encumbrances,
restrictions, encroachments and easements, subject to the Permitted Exceptions
and the liens created by the Mortgages and the UCC-1 Financing Statements.
Lessee shall be the owner of all of the Personal Property, free and clear of all
liens, encumbrances, charges and security interests, except the liens created by
the Lease. Upon Closing, Lender will obtain a valid and perfected first priority
lien upon and security interest in each of the Premises subject to the Permitted
Exceptions.
B. CONDITION OF PREMISES. Lender shall have inspected and approved the
Premises.
C. INSURANCE COMMITMENTS. Lender shall have received for each of the
Premises: a preliminary title report and irrevocable commitment to insure title
in the amount of the Loan relating to such Premises, by means of a mortgagee's,
ALTA extended coverage policy of title insurance (or its equivalent, in the
event such form is not issued in the jurisdiction where the Premises is located)
issued by Title Company showing good and marketable fee title in the real
property comprising such Premises in Borrower, committing to insure Lender's
first priority lien upon and security interest in such real property subject
only to Permitted Exceptions, and containing such endorsements as Lender may
require.
D. SURVEY. Lender shall have received a current ALTA survey of each of
the Premises or its equivalent, the form and substance of which shall be
satisfactory to Lender in its reasonable discretion. Lender shall have obtained
a flood certificate indicating that the location
11
of each of the Premises is not within the 100-year flood plain or identified as
a special flood hazard area as defined by the Federal Emergency Management
Agency, or if any Premises is in such a flood plain or special flood hazard
area, Borrower shall have provided Lender with evidence of flood insurance
maintained on such Premises in amounts and on terms and conditions reasonably
satisfactory to Lender.
E. ENVIRONMENTAL. Lender shall have completed such environmental due
diligence of each of the Premises as it deems necessary or advisable in its sole
discretion, including, without limitation, receiving an Environmental Policy
with respect to each of the Premises, and Lender shall have approved the
environmental condition of each of the Premises in its sole discretion.
F. ZONING. Borrower shall have provided Lender with evidence
reasonably satisfactory to Lender that each of the Premises is properly zoned
for use as a Permitted Concept and that such use constitutes a legal, conforming
use under applicable zoning requirements.
G. COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. No event
shall have occurred or condition shall exist which would, upon the Closing Date,
or, upon the giving of notice and/or passage of time, constitute a breach or
default hereunder or under the Loan Documents or any other agreement between or
among Lender, Borrower or Lessee pertaining to the subject matter hereof, and no
event shall have occurred or condition shall exist or information shall have
been disclosed by Borrower or discovered by Lender which has had or would be
reasonably likely to have a Material Adverse Effect or a material adverse effect
on Lessee or Lender's willingness to consummate the transaction contemplated by
this Agreement, as determined by Lender in its sole and absolute discretion.
H. PROOF OF INSURANCE. Borrower shall have delivered to Lender
certificates of insurance and copies of insurance policies showing that all
insurance required by the Loan Documents and providing coverage and limits
satisfactory to Lender are in full force and effect.
I. OPINION OF COUNSEL. Borrower and Lessee shall have caused Counsel
to prepare and deliver an opinion to Lender in form and substance reasonably
satisfactory to Lender and its counsel, which opinion shall include, without
limitation, those opinions set forth in the Revised Legal Criteria for Multi-
and Single-Member LLCs published in Standard and Poor's CreditWeek on September
15, 1999, as the same may be amended or revised from time to time.
J. FEE AND CLOSING COSTS. Concurrently with Closing, Borrower shall
pay the Fee to Lender and shall have paid all of the costs required to be paid
at Closing by Borrower under Section 3. Upon Closing, the fee deposit of
$500,000 previously paid by Borrower and being held by Lender will be applied to
the payment of the Fee.
K. LEASE, MEMORANDA AND LICENSE AGREEMENT. Borrower and Lessee shall
have executed and delivered the Lease, a memorandum of master lease in
recordable form for each of the Premises (collectively, the "Memoranda") and the
License Agreement. The Lease, the Memoranda and the License Agreement shall be
in form and substance reasonably satisfactory to Lender.
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L. APPLICATION OF CERTAIN PROCEEDS. Concurrently with Closing, the net
proceeds of the Loans (after payment of the Fee and all of the costs required to
be paid by Borrower under Section 3) received by Lessee in connection with the
transfer of the Premises to Borrower shall be applied to the outstanding balance
under the Existing Facility. In addition, prior to or at the Closing Lessee
shall have entered or shall enter into the New Facility.
M. CLOSING DOCUMENTS. At or prior to the Closing Date, Lender and/or
Borrower, as may be appropriate, shall have executed and delivered or shall have
caused to be executed and delivered to Title Company or Lender, as may be
appropriate, all documents required to be delivered by this Agreement, and such
other documents, payments, instruments and certificates, as Lender may
reasonably require in form acceptable to Lender, including, without limitation,
the following:
(1) Notes;
(2) Mortgages;
(3) UCC-1 Financing Statements;
(4) Environmental Indemnity Agreement; and
(5) Collateral Assignment of License Agreement.
Upon fulfillment or waiver of all of the above conditions, Lender shall
deposit funds necessary to close this transaction with the Title Company and
this transaction shall close in accordance with the terms and conditions of this
Agreement.
5. REPRESENTATIONS AND WARRANTIES OF LENDER. The representations and
warranties of Lender contained in this Section are being made by Lender as of
the Closing Date to induce Borrower to enter into this Agreement and consummate
the transactions contemplated herein and shall survive the Closing. Lender
represents and warrants to Borrower as follows:
A. ORGANIZATION OF LENDER. Lender has been duly organized, is validly
existing and has taken all necessary action to authorize the execution, delivery
and performance by Lender of this Agreement.
B. AUTHORITY OF LENDER. The person who has executed this Agreement on
behalf of Lender is duly authorized so to do.
C. ENFORCEABILITY. Upon execution by Lender, this Agreement shall
constitute the legal, valid and binding obligation of Lender, enforceable
against Lender in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, liquidation, reorganization and
other laws affecting the rights of creditors generally and general principles of
equity.
6. REPRESENTATIONS AND WARRANTIES OF BORROWER. The representations and
warranties of Borrower contained in this Section are being made by Borrower as
of the Closing Date to induce Lender to enter into this Agreement and consummate
the transactions
13
contemplated herein and shall survive the Closing. Borrower represents and
warrants to Lender (and Environmental Insurer solely with respect to Section
6.K) as follows:
A. FINANCIAL INFORMATION. Borrower has delivered to Lender the
Financial Information, which is true, correct and complete in all material
respects; there have been no amendments to the Financial Information since the
date such Financial Information was prepared or delivered to Lender. Borrower
understands that Lender is relying upon the Financial Information and Borrower
represents that such reliance is reasonable. All financial statements included
in the Financial Information were prepared in accordance with GAAP and fairly
present, in all material respects, as of the date of such financial statements
the financial condition of each entity (on a consolidated basis in the case of
Lessee and its subsidiaries other than Borrower Entities) to which they pertain.
No change has occurred with respect to the financial condition of Borrower,
Lessee and/or the Premises as reflected in the Financial Information which has
not been disclosed in writing to Lender or has had, or would reasonably be
expected to result in, a Material Adverse Effect.
B. ORGANIZATION AND AUTHORITY. (1) Borrower is duly organized or
formed, validly existing and in good standing under the laws of its state of
formation, and qualified as a foreign limited liability company to do business
in each state where the Premises are located and any other jurisdiction where
the failure to be qualified would reasonably be expected to result in a Material
Adverse Effect. All necessary limited liability company action has been taken to
authorize the execution, delivery and performance by Borrower of this Agreement
and the other Loan Documents.
(2) The person(s) who have executed this Agreement on behalf of
Borrower are duly authorized so to do.
(3) Borrower is not a "foreign corporation", "foreign partnership",
"foreign trust", "foreign estate" or "foreign person" (as those terms are
defined by the Internal Revenue Code of 1986, as amended). Borrower's U.S.
Federal Tax Identification number, Organization Identification number and
principal place of business are correctly set forth on the signature page of
this Agreement.
C. ENFORCEABILITY OF DOCUMENTS. Upon execution by Borrower, this
Agreement, the other Loan Documents executed by Borrower, the Lease and the
License Agreement shall constitute the legal, valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, liquidation, reorganization and other laws affecting the rights of
creditors generally and general principles of equity.
D. LITIGATION. There are no suits, actions, proceedings or
investigations pending, or to the best of its knowledge, threatened against or
involving Borrower or any of the Premises before any arbitrator or Governmental
Authority, except for such lawsuits, actions, proceedings or investigations
which, individually or in the aggregate, have not had, and would not reasonably
be expected to result in, (i) a Material Adverse Effect or (ii) liability to
Borrower (taking into account all applicable insurance, and deductibles and self
insured retentions relating thereto) equal to or in excess of $100,000.
00
X. XXXXXXX XX XXXXXXXX XX DEFAULTS. Borrower is not, and the
authorization, execution, delivery and performance of this Agreement, the other
Loan Documents, the Lease and the License Agreement will not result, in any
breach or default under any other document, instrument or agreement to which
Borrower is a party or by which Borrower, any of the Premises or any of the
property of Borrower is subject or bound, except for such breaches or defaults
which, individually or in the aggregate, have not had, and would not reasonably
be expected to result in, a Material Adverse Effect. The authorization,
execution, delivery and performance of this Agreement, the other Loan Documents,
the Lease and the License Agreement will not violate any applicable law,
statute, regulation, rule, ordinance, code, rule or order applicable to
Borrower, Lessee or the Premises. None of the Premises are subject to any right
of first refusal, right of first offer or option to purchase or lease (other
than subleases permitted pursuant to the terms of this Agreement) granted to a
third party (other than the Lease).
F. UTILITIES. Adequate public utilities are available at each of the
Premises to permit utilization of each of the Premises as a Permitted Concept
and all utility connection fees and use charges will have been paid in full
prior to delinquency.
G. ZONING; COMPLIANCE WITH LAWS. Each of the Premises is in compliance
with all applicable zoning requirements, and the use of each of the Premises as
a Permitted Concept does not constitute a nonconforming use under applicable
zoning requirements. Borrower and the Premises are in compliance with all
Applicable Regulations except for such noncompliance which has not had, and
would not reasonably be expected to result in, a Material Adverse Effect.
H. AREA DEVELOPMENT; WETLANDS. No condemnation or eminent domain
proceedings covering all or any portion of the Premises have been commenced or,
to the best of Borrower's knowledge, are contemplated. None of the Premises and,
to the best of Borrower's knowledge, none of the real property bordering any of
the Premises are designated by any Governmental Authority as a wetlands.
I. LICENSES AND PERMITS; ACCESS. All required licenses and permits,
both governmental and private, to use and operate each of the Premises as a
Permitted Concept are in full force and effect, except for such licenses and
permits the failure of which to obtain has not had, and would not reasonably be
expected to result in, a Material Adverse Effect. Adequate rights of access to
public roads and ways are available to each of the Premises for ingress and
egress and otherwise to permit utilization of each of the Premises for their
intended purposes, and all such public roads and ways have been completed and
dedicated to public use.
J. CONDITION OF PREMISES. Each of the Premises, including the Personal
Property, is in working condition and repair, ordinary wear and tear excepted,
fully equipped and operational, free from structural defects, safe and properly
lighted.
K. ENVIRONMENTAL. Except as disclosed in the Questionnaires:
(1) None of the Premises nor any of the Borrower Entities are in
violation of, or subject to, any pending or, to Borrower's actual knowledge,
threatened investigation or inquiry by any Governmental Authority or to any
remedial obligations under any
15
Environmental Laws, and this representation and warranty would continue to be
true and correct following disclosure to the applicable Governmental Authorities
of all relevant facts, conditions and circumstances, if any, pertaining to any
of the Premises;
(2) All permits, licenses or similar authorizations required to
construct, occupy, operate or use any buildings, improvements, fixtures and
equipment forming a part of any of the Premises by reason of any Environmental
Laws have been obtained except to the extent that failure to obtain such
permits, licenses or similar authorizations would not reasonably be expected to
result in a Material Adverse Effect;
(3) No Hazardous Materials have been used, handled, manufactured,
generated, produced, stored, treated, processed, transferred, disposed of or
otherwise Released in, on, under, from or about any of the Premises, except in
Permitted Amounts;
(4) None of the Premises contain Hazardous Materials, except in
Permitted Amounts, or USTs;
(5) To the best knowledge of Borrower, there is no threat of any
Release migrating to any of the Premises in excess of Permitted Amounts;
(6) There is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with any of the
Premises;
(7) None of the Borrower Entities has received any written notice
or other written communication from any person or entity (including but not
limited to a Governmental Authority) relating to Hazardous Materials or
Remediation thereof in excess of Permitted Amounts, of possible liability of any
person or entity pursuant to any Environmental Law in connection with any of the
Premises, other environmental conditions in connection with any of the Premises,
or any actual or potential administrative or judicial proceedings in connection
with any of the foregoing;
(8) All information known to any of the Borrower Entities or
contained in the files of any of the Borrower Entities relating to any
Environmental Condition or Releases of Hazardous Materials in, on, under or from
any of the Premises, other than in Permitted Amounts, has been provided, or made
available, to Lender, including, without limitation, information relating to all
prior Remediation;
(9) All of the Premises have been kept free and clear of all liens
and other encumbrances imposed pursuant to any Environmental Law (the
"Environmental Liens"); and none of the Borrower Entities has allowed any tenant
or other user of any of the Premises to do any act that materially increased the
dangers to human health or the environment, posed an unreasonable risk of harm
to any person or entity (whether on or off any of the Premises), impaired the
value of any of the Premises in any material respect, is contrary to any
requirement of any insurer in connection with such insurer providing insurance
for the Premises in accordance with the terms of the Loan Documents, constituted
a public or private nuisance, constituted waste, or violated any covenant,
condition, agreement or easement applicable to any of the Premises in any
material respect; and
16
(10) The information and disclosures in the Questionnaires are
true, correct and complete in all material respects, and the person or persons
executing the Questionnaires were duly authorized to do so.
Lender has charged Borrower a fee for the Environmental Policies.
Borrower acknowledges that the Environmental Policies are for the sole
protection of Lender and will not protect Borrower or provide Borrower with any
coverage thereunder. Borrower acknowledges and agrees that Environmental Insurer
may rely on the environmental representations and warranties set forth in this
subsection K, that Environmental Insurer is an intended third-party beneficiary
of such representations and warranties and that Environmental Insurer shall have
all rights and remedies available at law or in equity as a result of a breach of
such representations and warranties, including, to the extent applicable, the
right of subrogation.
L. TITLE TO PREMISES; FIRST PRIORITY LIEN. Fee title to the real
property comprising each of the Premises is vested in Borrower, free and clear
of all liens, encumbrances, charges and security interests of any nature
whatsoever, except the Permitted Exceptions and the liens created by the
Mortgages and the UCC-1 Financing Statements. Lessee is the owner of all
Personal Property, free and clear of all liens, encumbrances, charges and
security interests of any nature whatsoever, except the liens created by the
Lease, and no Affiliate of Borrower (other than Lessee) owns any of the Personal
Property. Upon Closing, Lender shall have a first priority lien upon and
security interest in and to each of the Premises pursuant to the Mortgages and
the UCC-1 Financing Statements.
M. NO MECHANICS' LIENS. There are no delinquent accounts payable or
mechanics' liens in favor of any materialman, laborer, or any other person or
entity in connection with labor or materials furnished to or performed on any
portion of the Premises; and no work has been performed or is in progress nor
have materials been supplied to the Premises or agreements entered into for
work to be performed or materials to be supplied to the Premises prior to the
date hereof, which will be delinquent on or before the Closing Date.
N. LEASE. Borrower has delivered to Lender a true, correct and
complete copy of the Lease. The Lease is the only lease with respect to the
Premises, and is in full force and effect, and constitutes the legal, valid and
binding obligation of Borrower and Lessee, enforceable against Lessee and
Borrower in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, liquidation, reorganization and
other laws affecting the rights of creditors generally and general principles of
equity. Other than in connection with the Loans, Borrower has not assigned,
transferred, mortgaged, hypothecated or otherwise encumbered the Lease or any
interest therein, and Borrower has not received any notice that the Lessee has
made any assignment, pledge or hypothecation of all or any part of its interest
in the Lease. Borrower has not received any notice of default from the Lessee
which has not been cured or given any notice of default to the Lessee which has
not been cured. No event has occurred and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute a default by the
Lessee or Borrower under the Lease.
O. NONCONSOLIDATION. (1) Borrower maintains correct and complete books
and records of account separate from all other Persons. Where necessary or
appropriate, Borrower has disclosed the nature of the transaction contemplated
by the Loan Documents and
17
Borrower's independent status to its creditors. The Premises represent all of
the assets owned or leased by Borrower as of the date hereof, and Borrower has
not commingled its assets and its liabilities with those of any other Person.
(2) Borrower maintains its own checking account or accounts with
commercial banking institutions separate from other Persons.
(3) To the extent that Borrower shares the same employees with
other Persons, the salaries of and the expenses related to providing benefits to
such employees have been fairly and nonarbitrarily allocated among such Persons,
with the result that each such Person bears its fair share of the salary and
benefit costs associated with all such common employees.
(4) To the extent that Borrower jointly contracts with other
Persons to do business with vendors or service providers or to share overhead
expenses, the costs incurred in so doing are, and at all times shall be, fairly
and nonarbitrarily allocated among such Persons, with the result that each such
Person bears its fair share of such costs. To the extent that Borrower contracts
or does business with vendors or service providers where the goods or services
provided are or shall be partially for the benefit of other Persons, the costs
incurred in so doing are fairly and nonarbitrarily allocated to or among such
Persons for whose benefit the goods or services are provided, with the result
that each such Person bears its fair share of such costs.
(5) To the extent that Borrower or other Persons have offices in
the same location, there is a fair, appropriate and nonarbitrary allocation of
overhead among them, with the result that each such Person bears its fair share
of such expenses.
(6) Borrower has not incurred any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent, including, without
limitation, liability for the debts of any other Person (and Borrower has not
held itself out as being liable for the debts of any other Person), other than
the Loans and trade and operational debt incurred in the ordinary course of
business with trade creditors and in amounts as are normal and reasonable under
the circumstances. Borrower is not a guarantor of any obligations.
(7) Except as contemplated by the Loan Documents, Borrower is not
presently a party to a pledge of its assets for the benefit of other Persons.
Borrower has not made any loans or advances to any third party (including any
Affiliate or constituent party of Borrower).
(8) Borrower has conducted its affairs strictly in accordance with
its organizational documents including Borrower's corporate managing member's
organizational documents and has observed all necessary, appropriate and
customary formalities.
(9) Borrower does not hold itself out to the public or to any of
its individual creditors as being a unified entity with assets and liabilities
in common with any other Person.
18
(10) Borrower (a) is solvent, (b) is able to pay its obligations as
they become due and (c) is not and shall not be engaged in any business or
transaction for which its remaining capital is or may be unreasonably small.
(11) Borrower has no actual intent to hinder, delay or defraud
creditors in connection with any of the transactions contemplated herein or
intent to incur (or belief that it is incurring) debts beyond its ability to pay
the same as they mature.
(12) Borrower has not, as to itself or as to other Persons, (a)
commenced any case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to Borrower or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to Borrower or its debts or other Persons or their
debts or (b) sought appointment of a receiver, trustee, custodian or other
similar official for Borrower or for all or any substantial part of its or other
Person's assets or made a general assignment for the benefit of Borrower's
creditors.
7. COVENANTS. Borrower covenants to Lender (and Environmental Insurer
solely with respect to Section 7.F) from and after the Closing Date and until
all of the Obligations are satisfied in full, as follows:
A. PAYMENT OF THE NOTES. Borrower shall punctually pay, or cause to be
paid, the principal, interest and all other sums to become due in respect of the
Notes and the other Loan Documents in accordance with the Notes and the other
Loan Documents.
B. TITLE. Borrower shall maintain good and marketable fee simple title
to the real property comprising each of the Premises and Lessee shall maintain
title to the Personal Property, in each case, free and clear of all liens,
encumbrances, charges and other exceptions to title, except the Permitted
Exceptions and the liens created by the Mortgages, the UCC-1 Financing
Statements, the Lease and any other exception to title permitted by Lender in
writing. Lender shall have valid first liens upon and security interests in the
Premises, including the Personal Property, pursuant to the Mortgages and the
UCC-1 Financing Statements, subject to Permitted Exceptions.
C. ORGANIZATION AND STATUS OF BORROWER; PRESERVATION OF EXISTENCE.
Borrower shall be validly existing and in good standing under the laws of its
state of incorporation or formation and qualified as a foreign corporation,
partnership or limited liability company to do business in each state where the
Premises are located and any other jurisdiction where the failure to be
qualified would reasonably be expected to result in a Material Adverse Effect.
Borrower shall preserve its current form of organization and shall not change
its legal name, its state of formation, nor, in one transaction or a series of
related transactions, merge with or into, or consolidate with, any other entity
without providing, in each case, Lender with 30 days' prior written notice and
obtaining Lender's prior written consent (to the extent such consent is required
under Section 8 of this Agreement).
19
D. LICENSES AND PERMITS. All required licenses and permits, both
governmental and private, to use and operate each of the Premises as a Permitted
Concept shall be maintained in full force and effect, except to the extent that
the failure to maintain such licenses and permits in full force and effect would
not reasonably be expected to have a Material Adverse Effect.
E. COMPLIANCE WITH LAWS GENERALLY. Borrower shall, at the sole cost of
Borrower, take all steps required to ensure that the use and occupation of each
of the Premises, and the condition thereof, including, without limitation, any
Restoration, shall not be in violation of any Applicable Regulations now or
hereafter in effect in such a manner as would reasonably be expected to result
in a Material Adverse Effect. In addition, Borrower shall not violate, and shall
ensure that Lessee shall not violate, any Applicable Regulations now or
hereafter in effect in such a manner as would reasonably be expected to result
in a Material Adverse Effect. Without limiting the generality of the other
provisions of this Section, Borrower shall not violate, and shall ensure that
Lessee shall not violate, the ADA, and all regulations promulgated thereunder,
as it affects each of the Premises in such a manner as would reasonably be
expected to result in a Material Adverse Effect.
F. COMPLIANCE WITH ENVIRONMENTAL LAWS. (1) The Premises, the Borrower
Entities and any other operator or user of any of the Premises shall not be in
violation of or subject to any investigation or inquiry by any Governmental
Authority or subject to any Remediation obligations under any Environmental Laws
(other than any violation, investigation or inquiry disclosed in the
Questionnaires).
(2) All uses and operations on or of each of the Premises, whether
by Borrower or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto.
(3) There shall be no Releases in, on, under or from any of the
Premises, except in Permitted Amounts (other than Releases disclosed in the
Questionnaires).
(4) There shall be no Hazardous Materials in, on or under any of
the Premises, except in Permitted Amounts (other than such Hazardous Materials
in, on or under any of the Premises disclosed in the Questionnaires).
(5) Borrower shall keep each of the Premises, or cause each of the
Premises to be kept, free and clear of all Environmental Liens.
(6) Borrower shall not do or allow any tenant or other user of any
of the Premises to do any act that (a) materially increases the dangers to human
health or the environment, (b) poses an unreasonable risk of harm to any person
or entity (whether on or off any of the Premises), (c) impairs or is reasonably
likely to impair the value of any of the Premises, (d) is contrary to any
requirement of any insurer in connection with such insurer providing insurance
for the Premises, in accordance with the terms of the Loan Documents, (e)
constitutes a public or private nuisance or constitutes waste, or (f) violates
any covenant, condition, agreement or easement applicable to any of the Premises
which violation would reasonably be expected to result in a Material Adverse
Effect.
20
(7) Borrower shall promptly notify Lender in writing upon Borrower
obtaining actual knowledge of:
(a) any presence of Releases or Threatened Releases in, on,
under, from or migrating towards any of the Premises, in excess of Permitted
Amounts, including, without limitation, the presence on or under any of the
Premises of any Hazardous Materials, in excess of Permitted Amounts;
(b) any non-compliance with any Environmental Laws related in
any way to any of the Premises;
(c) any Environmental Lien or any act or omission which could
reasonably be expected to result in the imposition of an Environmental Lien
against any of the Premises;
(d) any required or proposed Remediation of environmental
conditions relating to any of the Premises, including, without limitation, any
and all enforcement, clean-up, remedial, removal or other governmental or
regulatory actions threatened, instituted or completed pursuant to any of the
Environmental Laws affecting any of the Premises;
(e) any written or oral notice or other communication of which
any of the Borrower Entities becomes aware from any source whatsoever (including
but not limited to a Governmental Authority) relating in any way to Hazardous
Materials or Remediation thereof, possible liability of any person or entity
pursuant to any Environmental Law relating to the Premises, other environmental
conditions in connection with any of the Premises, or any actual or potential
administrative or judicial proceedings in connection with the violation by
Borrower of any obligation under this Agreement; or
(f) any investigation or inquiry initiated by any Governmental
Authority relating to the Environmental Condition of any of the Premises.
(8) Borrower shall, at its sole cost and expense:
(a) perform any environmental site assessment or other
investigation of environmental conditions in connection with any of the
Premises as may be reasonably requested by Lender (including but not limited
to non-invasive sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas);
provided, however, that Lender shall not require or request that Borrower
conduct any invasive testing or investigation unless (i) such testing is
recommended pursuant to an environmental assessment of the Premises, (ii)
Lender reasonably believes that an Environmental Condition exists at the
Premises or any portion thereof, (iii) there is an uncured Event of Default,
(iv) upon the occurrence of an emergency or (v) in connection with any
Securitization, Participation or Transfer contemplated by this Agreement
(Borrower shall share with Lender and Environmental Insurer the reports and
other results thereof, and Lender, Environmental Insurer and other
Indemnified Parties shall be entitled to rely on such reports and other
results thereof). Notwithstanding the foregoing to the contrary, Borrower
shall be required to perform the foregoing environmental site assessments or
other investigations of environmental conditions on a Premises only (1) once
every year during the term of the Loan secured by such Premises or in
21
connection with any Securitization, Participation or Transfer contemplated by
this Agreement, and either such event upon reasonable prior written notice
delivered by Lender to Borrower, or (2) at any time and without prior written
notice (x) Lender reasonably requests if such request is made because Lender
reasonably believes that an Environmental Condition exists at the Premises, (y)
upon the occurrence of an event of an emergency, or (z) upon the occurrence and
during the continuation of an Event of Default); and
(b) have the Premises inspected as may be required by any
Environmental Laws for seepage, spillage and other environmental concerns.
Borrower shall provide Lender with written certified results of all inspections
performed on any of the Premises. All costs and expenses associated with the
inspection, preparation and certification of results, as well as those
associated with any corrective action, shall be paid by Borrower. All
inspections and tests performed on any of the Premises shall be conducted in
compliance with all Environmental Laws.
(9) Borrower shall, at its sole cost and expense, and without
limiting the rights of Lender under any other provision of this Agreement,
comply with all reasonable written requests of Lender to:
(a) reasonably effectuate Remediation of any condition
(including but not limited to a Release) in, on, under or from any of the
Premises;
(b) comply with any Environmental Law;
(c) comply with any directive from any Governmental Authority;
and
(d) take any other reasonable action reasonably necessary or
appropriate for protection of human health or the environment.
(10) Lender, Environmental Insurer and any other person or entity
designated by Lender, including but not limited to any receiver, any
representative of a Governmental Authority, and any environmental consultant,
shall have the right, but not the obligation, to enter upon any of the Premises
(a) once every year during the term of the Loan encumbered by such Premises,
during normal business hours, but only upon reasonable prior written notice to
Borrower, or (b) in connection with any Securitization, Participation or
Transfer contemplated by this Agreement, during normal business hours, but only
upon reasonable prior written notice to Borrower, or (c) at any time in the
event of an emergency, upon Lender's reasonable belief that an Environmental
Condition exists at the Premises, or upon the occurrence and during the
continuation of an Event of Default, in any of which events no prior written
notice shall be required, in order to assess any and all aspects of the
environmental condition of any of the Premises and its use, including but not
limited to conducting any environmental assessment or audit (the scope of which
shall be determined in Lender's sole and absolute discretion) and taking samples
of soil, groundwater or other water, air, or building materials; provided,
however, that no party shall conduct any invasive testing or investigation
without Borrower's prior written consent unless such testing is recommended
pursuant to an environmental assessment of a Premises. With respect to any
inspection hereunder that is conditioned upon reasonable notice to
22
the Borrower, Lender shall use good faith efforts to coordinate such inspection
with Borrower so as to permit Borrower to have a representative present during
such inspection; provided, however, Lender shall have no liability to Borrower
and Borrower shall not have the right to prevent any such inspection if, despite
Lender's good faith efforts, Lender is unable to coordinate its inspection in a
manner facilitating the presence of Borrower's representative at such
inspection. Borrower shall cooperate with and provide access to Lender,
Environmental Insurer and any such person or entity designated by Lender,
provided that Lender, Environmental Insurer and any such person shall use
commercially reasonable efforts to avoid disturbing Lessee's possession of the
Premises and the operation of Lessee's business on the Premises. Any such
assessment and investigation shall be at Borrower's sole cost and expense if, at
the time Lender undertakes such assessment or investigation, Lender has a
reasonable basis for believing that a Release has occurred at any of the
Premises in excess of Permitted Amounts or if an Event of Default has occurred
and is continuing. Otherwise, any such assessment and investigation shall be at
Lender's sole cost and expense. If invasive testing is permitted pursuant to the
terms of this Section or Section 7I. below, Lender shall cause any party
performing such testing to be appropriately insured or bonded in such amounts as
are commercially reasonable.
(11) To the extent any Environmental Condition stems from an action
or omission by a party other than Lessee or any of the Borrower Entities (a
"Responsible Party"), Lender agrees that (a) nothing set forth herein shall
limit Borrower's rights to seek contribution and/or reimbursement from such
Responsible Party or to compel such Responsible Party to take all steps
necessary to satisfy Borrower's Remediation obligation with respect to such
Environmental Condition, and (b) Borrower shall be deemed to have satisfied any
such Remediation obligation to the extent effected by such Responsible Party;
provided, however, that nothing herein shall or shall be deemed to obviate,
excuse or exonerate Borrower's Remediation obligation with respect to such
Environmental Condition to the extent (x) such Responsible Party contests any
such Remediation obligation (or the scope thereof) and (y) such Responsible
Party does not cause such Remediation obligation to be completed in due course
with all due diligence.
G. FINANCIAL STATEMENTS. (1) Within 45 days after the end of each
fiscal quarter and within 120 days after the end of each fiscal year of
Borrower, Borrower shall deliver to Lender (a) complete financial statements of
Borrower including a balance sheet, profit and loss statement, statement of cash
flows and all other related schedules for the fiscal period then ended; and (b)
such other financial information as Lender may reasonably request in order to
establish compliance with the financial covenants in the Loan Documents,
including, without limitation, Section 7.J of this Agreement. All such financial
statements shall be prepared in accordance with GAAP from period to period, and
shall be certified to be accurate and complete by Borrower (or the Treasurer or
other appropriate officer of Borrower or Lessee). Borrower understands that
Lender is relying upon such financial statements and Borrower represents that
such reliance is reasonable. In the event the property and business at the
Premises is ordinarily consolidated with other business for financial statement
purposes, such financial statements shall be prepared on a consolidated basis
showing separately the sales, profits and losses, assets and liabilities
pertaining to each of the Premises with the basis for allocation of overhead of
other charges being clearly set forth. The financial statements delivered to
Lender need not be audited, but Borrower shall deliver to Lender copies of any
audited financial statements of Borrower which may be prepared, as soon as they
are available.
23
(2) Borrower shall cause to be delivered to Lender copies of the
financial statements required to be delivered pursuant to Section 32 of the
Lease within the time periods set forth in such Section.
H. COMPLIANCE CERTIFICATES. Within 90 days after the end of each
fiscal year of Borrower, Borrower shall deliver a compliance certificate to
Lender in a form to be provided by Lender in order to establish that Borrower is
in compliance in all material respects with all of its obligations, duties and
covenants under the Loan Documents.
I. INSPECTIONS. Borrower shall, upon not less than 24 hours written
notice and during normal business hours (or without prior notice and at any time
in the event of an emergency), (1) provide Lender and Lender's officers,
employees, agents, advisors, attorneys, accountants, architects, and engineers
with access to each of the Premises, all drawings, plans, and specifications for
each of the Premises in possession of Borrower or Lessee, all engineering
reports relating to each of the Premises in the possession of Borrower or
Lessee, the files, correspondence and documents relating to each of the
Premises, and the financial books and records, including lists of delinquencies,
relating to the ownership, operation, and maintenance of each of the Premises
(including, without limitation, any of the foregoing information stored in any
computer files), (2) allow such persons to make such inspections, tests, copies,
and verifications as Lender considers reasonably necessary (except that none of
Lender nor such persons shall conduct any invasive testing on the Premises
without obtaining the prior consent of Borrower which may withheld in Borrower's
sole and absolute discretion), and (3) if Borrower is in breach of the Fixed
Charge Coverage Ratio requirement set forth in the following subsection J, pay
expenses reasonably incurred by Lender from time to time in conducting such
inspections, tests, copies and verifications upon demand (such amounts to bear
interest at the Default Rate if not paid upon demand until paid). All access and
entry onto the Premises or other property in connection with the exercise of the
rights granted to Lender in this Section shall occur (a) once every year during
the term of the Loan encumbered by such Premises, upon not less than 24 hours
written notice and during normal business hours, or (b) in connection with any
Securitization, Participation or Transfer contemplated by this Agreement, upon
not less than 24 hours written notice and during normal business hours, or (c)
at any time in the event of an emergency or upon the occurrence and during the
continuation of an Event of Default, in either of which cases no prior written
notice shall be required; provided, however, that the exercise of such access
and entry rights shall in no event disturb Lessee's possession of the Premises
nor the operation of Lessee's business on the Premises. With respect to any
inspection hereunder that is conditioned upon notice to the Borrower, Lender
shall use good faith efforts to coordinate such inspection with Borrower so as
to permit Borrower to have a representative present during such inspection;
provided, however, Lender shall have no liability to Borrower and Borrower shall
not have the right to prevent any such inspection if, despite Lender's good
faith efforts, Lender is unable to coordinate its inspection in a manner
facilitating the presence of Borrower's representative at such inspection.
J. FIXED CHARGE COVERAGE RATIO. Until such time as all of Borrower's
obligations under the Notes and the other Loan Documents are paid, satisfied and
discharged in full, Borrower shall cause to be maintained an aggregate Fixed
Charge Coverage Ratio at all of the Premises of at least 1.25:1, as determined
on the last day of each fiscal year of Borrower. For purposes of this Section,
the term "Fixed Charge Coverage Ratio" shall mean with respect to the
24
twelve month period of time immediately preceding the date of determination, the
ratio calculated for such period of time, each as determined in accordance with
GAAP, of (a) the sum of Net Income, Depreciation and Amortization, Interest
Expense and Operating Lease Expense, less a corporate overhead allocation in an
amount equal to 5% of Gross Sales, to (b) the sum of the Lender Payments,
Operating Lease Expense and the Equipment Payment Amount.
For purposes of this Section, the following terms shall be defined as set
forth below:
"CAPITAL LEASE" shall mean any lease of any property (whether real,
personal or mixed) with respect to one or more of the Premises which lease
would, in conformity with GAAP, be required to be accounted for as a capital
lease on the balance sheet of the lessee. The term "Capital Lease" shall not
include any operating lease.
"DEBT" shall mean as directly related to all of the Premises and the
period of determination (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, indentures, notes or similar instruments, (iii) obligations
to pay the deferred purchase price of property or services, (iv) obligations
under leases which should be, in accordance with GAAP, accounted for as Capital
Leases, and (v) obligations under direct or indirect guarantees in respect of,
and obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above.
"DEPRECIATION AND AMORTIZATION" shall mean with respect to all of the
Premises the depreciation and amortization accruing during any period of
determination as determined in accordance with GAAP.
"EQUIPMENT PAYMENT AMOUNT" shall mean for any period of determination the
sum of all regularly scheduled payments payable during such period of
determination under all (i) leases for equipment located at one or more of the
Premises, other than operating leases and (ii) all loans secured by equipment
located at one or more of the Premises.
"GROSS SALES" shall mean the sales or other income arising from all
business conducted at all of the Premises during the period of determination,
less sales tax and any amounts received from not-for-profit sales of all
non-food items approved for use in connection with promotional campaigns, if
any.
"INTEREST EXPENSE" shall mean for any period of determination, the sum of
all interest accrued or which should be accrued in respect of all Debt allocable
to one or more of the Premises and all business operations thereon during such
period (including interest attributable to Capital Leases), as determined in
accordance with GAAP.
"LENDER PAYMENTS" shall mean with respect to the period of determination,
the sum of all regularly scheduled payments payable under the Notes.
"NET INCOME" shall mean with respect to the period of determination, the
aggregate net income or net loss allocable to all of the Premises. In
determining the amount of Net Income, (i) adjustments shall be made for
nonrecurring gains and losses allocable to the period of determination, (ii)
deductions shall be made for Depreciation and Amortization, Interest Expense
25
and Operating Lease Expense allocable to the period of determination, and (iii)
no deductions shall be made for (x) income taxes or charges equivalent to income
taxes allocable to the period of determination, as determined in accordance with
GAAP, or (y) corporate overhead expense allocable to the period of
determination.
"OPERATING LEASE EXPENSE" shall mean the sum of all payments and expenses
incurred by the lessee under any operating leases with respect to one or more of
the Premises and the business operations thereon during the period of
determination, as determined in accordance with GAAP.
K. LOST NOTE. Borrower shall, if any Note is mutilated, destroyed,
lost or stolen (a "Lost Note"), promptly deliver to Lender, upon receipt from
Lender of an affidavit and indemnity in a form reasonably acceptable to Lender
and Borrower stipulating that such Note has been mutilated, destroyed, lost or
stolen (and, in the case of a mutilated Note, such mutilated Note), in
substitution therefor, a new promissory note containing the same terms and
conditions as such Lost Note with a notation thereon of the unpaid principal and
accrued and unpaid interest.
L. AFFILIATE TRANSACTIONS. Unless otherwise approved by Lender, all
transactions between Borrower and any of its Affiliates shall be on terms
substantially as advantageous to Borrower as those which could be obtained by
Borrower in a comparable arm's length transaction with a non-Affiliate of
Borrower.
M. NONCONSOLIDATION. (1) Borrower shall at all times maintain correct
and complete books and records of account separate from all other Persons. Where
necessary or appropriate, Borrower shall disclose the nature of the transactions
contemplated by the Loan Documents and Borrower's independent status to its
creditors. Borrower shall not own or lease any assets other than the Premises,
nor engage in any business other than owning and leasing the Premises, including
financing the Premises with Lender. Borrower shall not commingle its assets and
its liabilities with those of any other Person.
(2) Borrower shall maintain its own checking account or accounts
with commercial banking institutions separate from other Persons.
(3) To the extent that Borrower shares the same employees with
other Persons, the salaries of and the expenses related to providing benefits to
such employees, at all times shall be, fairly and nonarbitrarily allocated among
such Persons, with the result that each such Person shall bear its fair share of
the salary and benefit costs associated with all such common employees.
(4) To the extent that Borrower jointly contracts with other
Persons to do business with vendors or service providers or to share overhead
expenses, the costs incurred in so doing at all times shall be, fairly and
nonarbitrarily allocated among such Persons, with the result that each such
Person shall bear its fair share of such costs. To the extent that Borrower
contracts or does business with vendors or service providers where the goods or
services provided are or shall be partially for the benefit of other Persons,
the costs incurred in so doing at all times shall be, fairly and nonarbitrarily
allocated to or among such Persons for whose benefit
26
the goods or services are provided, with the result that each such Person shall
bear its fair share of such costs. All transactions between Borrower and other
Persons shall be only on an arm's-length basis.
(5) To the extent that Borrower or other Persons have offices in
the same location, there shall be a fair, appropriate and nonarbitrary
allocation of overhead among them, with the result that each such Person shall
bear its fair share of such expenses.
(6) Borrower shall not incur any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent (including guaranteeing
any obligation or assuming liability for the debts of any other Person and
Borrower will not hold itself out as being liable for the debts of any other
Person), other than the Loans and trade and operational debt incurred in the
ordinary course of business with trade creditors and in amounts as are normal
and reasonable under the circumstances. No indebtedness other than the Loans may
be secured (subordinate or pari passu) by the Premises or any portion thereof.
(7) Borrower shall not enter into any contract or agreement with
any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of
any constituent party of Borrower except upon terms and conditions that are
intrinsically fair and no more favorable to Borrower than to those that would be
available on an arms-length basis with third parties other than any such party.
(8) Except as contemplated by the Loan Documents, Borrower shall
not pledge, grant any security interest in, hypothecate or otherwise encumber
its assets for the benefit of any other Persons.
(9) Borrower shall issue separate financial statements prepared not
less frequently than annually and prepared according to GAAP.
(10) Borrower shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character in
light of its contemplated business operations.
(11) Borrower shall conduct its affairs strictly in accordance with
its organizational documents, including Borrower's corporate managing member's
organizational documents and shall observe all necessary, appropriate and
customary formalities. The books, records and accounts of Borrower shall at all
times be maintained in a manner permitting the assets and liabilities of
Borrower to be easily separated and readily ascertained from those of any other
Person and Borrower shall file its own tax returns.
(12) Borrower shall not hold itself out to the public or to any of
its individual creditors as being a unified entity with assets and liabilities
in common with any other Person. Borrower shall maintain and utilize separate
stationery, invoices and checks.
(13) Borrower shall not make any loans or advances to any third
party (including any Affiliate of Borrower or constituent party of Borrower).
27
(14) Borrower shall not, as to itself or as to other Persons, (a)
commence any case, proceeding or other action under any existing or future law
of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to Borrower or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to Borrower or its debts or other Persons or their
debts or (b) seek appointment of a receiver, trustee, custodian or other similar
official for Borrower or for all or any substantial part of its or other
Person's assets or make a general assignment for the benefit of Borrower's
creditors. Borrower shall not take any action in furtherance of, or indicating
its consents to, approval of or acquiescence in, any of the acts set forth
above. Borrower shall not be unable to, or admit in writing its inability to,
pay its debts.
8. PROHIBITION ON CHANGE OF CONTROL AND PLEDGE. Without limiting the
terms and conditions of Section 3.09 of the Mortgages, Borrower agrees that,
from and after the Closing Date and until all of the Obligations are satisfied
in full, without the prior written consent of Lender:
(1) no Change of Control shall occur; and
(2) no interest in Borrower shall be pledged, encumbered,
hypothecated or assigned as collateral for any obligation of any of the Borrower
Entities (each, a "Pledge").
Lender's consent to a Change of Control and/or Pledge shall be subject to
the satisfaction of such conditions as Lender shall determine in its sole
discretion, including, without limitation, (i) the execution and delivery of
such modifications to the terms of the Loan Documents as Lender shall reasonably
request, (ii) the proposed Change of Control and/or Pledge having been approved
by each of the rating agencies which have issued ratings in connection with any
Securitization of the Loans as well as any other rating agency selected by
Lender, and (iii) the proposed transferee having agreed to comply with all of
the terms and conditions of the Loan Documents (including any modifications
reasonably requested by Lender pursuant to clause (i) above). In addition, any
such consent shall be conditioned upon payment by Borrower to Lender of (x) a
fee equal to one percent (1%) of the then outstanding principal balance of the
Notes and (y) all out-of-pocket costs and expenses incurred by Lender in
connection with such consent, including, without limitation, reasonable
attorneys' fees. Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Obligations immediately due and payable upon a Change of Control
or Pledge in violation of this Section. The provisions of this Section shall
apply to every Change of Control or Pledge regardless of whether voluntary or
not, or whether or not Lender has consented to any previous Change of Control or
Pledge.
9. TRANSACTION CHARACTERIZATION. A. It is the intent of the parties
hereto that this Agreement and the other Loan Documents are a contract to extend
a financial accommodation (as such term is used in the Code) for the benefit of
Borrower and that, except as otherwise contemplated by Sections 14.P(4) and (5),
the Loan Documents evidence one unitary, unseverable transaction pertaining to
all of the Premises. Borrower acknowledges that all of the Loans are
cross-defaulted and cross-collateralized, except as otherwise contemplated by
Sections
28
14.P(4) and (5), and that such cross-default and cross-collateralization is a
material inducement to Lender making the Loans.
B. It is the intent of the parties hereto that the business
relationship created by the Loan Documents is solely that of creditor and debtor
and has been entered into by both parties in reliance upon the economic and
legal bargains contained in the Loan Documents. None of the agreements contained
in the Loan Documents is intended, nor shall the same be deemed or construed, to
create a partnership (either de jure or de facto) between Borrower and Lender,
to make them joint venturers, to make Borrower an agent, legal representative,
partner, subsidiary or employee of Lender, nor to make Lender in any way
responsible for the debts, obligations or losses of Borrower.
10. DEFAULT AND REMEDIES. A. Each of the following shall be deemed an
event of default by Borrower (each, an "Event of Default"):
(1) If any representation or warranty of Borrower set forth in any
of the Loan Documents is false in any material respect which would have a
Material Adverse Effect, or if Borrower renders any statement or account which
is false in any material respect as of the effective date of such
representation.
(2) If any principal, interest or other monetary sum due under the
Notes, the Mortgages or any other Loan Document is not paid within five days
after the date when due; provided, however, notwithstanding the occurrence of
such an Event of Default, Lender shall not be entitled to exercise its rights
and remedies set forth below unless and until Lender shall have given Borrower
notice thereof and a period of five days from the delivery of such notice shall
have elapsed without such Event of Default being cured.
(3) If Borrower fails to observe or perform any of the other
covenants (except with respect to a breach of the Fixed Charge Coverage Ratio,
which breach is addressed in subitem (7) below), conditions, or obligations of
this Agreement; provided, however, if any such failure does not involve the
payment of any monetary sum, is not willful or intentional, does not place any
rights or interest in collateral of Lender in immediate jeopardy, and is within
the reasonable power of Borrower to promptly cure after receipt of notice
thereof, all as determined by Lender in its reasonable discretion, then such
failure shall not constitute an Event of Default hereunder, except as otherwise
expressly provided herein, unless and until Lender shall have given Borrower
notice thereof and a period of 30 days shall have elapsed, during which period
Borrower may correct or cure such failure, upon failure of which an Event of
Default shall be deemed to have occurred hereunder without further notice or
demand of any kind being required. If such failure cannot reasonably be cured
within such 30-day period, as determined by Lender in its reasonable discretion,
and Borrower is diligently pursuing a cure of such failure, then Borrower shall
have a reasonable period to cure such failure beyond such 30-day period, which
shall not, except for Remediation exceed 90 days after receiving notice of the
failure from Lender. Except for Remediation, if Borrower shall fail to correct
or cure such failure within such 90-day period, an Event of Default shall be
deemed to have occurred hereunder without further notice or demand of any kind
being required.
29
(4) If Borrower becomes insolvent within the meaning of the Code,
files or notifies Lender that it intends to file a petition under the Code,
initiates a proceeding under any similar law or statute relating to bankruptcy,
insolvency, reorganization, winding up or adjustment of debts (collectively, an
"Action"), becomes the subject of either a petition under the Code or an Action,
or is not generally paying its debts as the same become due; provided that if
the Action is commenced by a party other than a Borrower Entity, the
commencement of such Action shall not be an Event of Default hereunder if such
Action is dismissed or discharged within sixty (60) days of filing thereof.
(5) If there is an "Event of Default" or a breach or default, after
the passage of all applicable notice and cure or grace periods, under any other
Loan Document, the Lease, any of the Related Loan Documents or any of the Other
Agreements.
(6) If a final, nonappealable judgment is rendered by a court
against Borrower which (i) has a material adverse effect on the operation of any
of the Premises as a Permitted Concept, or (ii) is in an amount greater than
$100,000.00; provided, however, that any such judgment of the nature specified
in Sections 10.A(6)(i) or 10.A(6)(ii) shall not result in an Event of Default if
(x) such judgment is discharged or provision made for such discharge within 60
days from the date of entry of such judgment, or (y) (1) Borrower has valid and
collectible insurance coverage for such judgment and (2) the total amount of
liability of the Borrower not paid or payable by such insurance, taking into
account all deductibles or self insured retentions, does not exceed $100,000.
(7) If there is a breach of the Fixed Charge Coverage Ratio
requirement and Lender shall have given Borrower written notice thereof (the
"FCCR Amount Notice") and Borrower shall have failed within a period of 30 days
from the delivery of such notice to (i) pay to Lender the FCCR Amount (without
premium or penalty) with respect to such of the Premises (starting with the
Premises with the lowest Fixed Charge Coverage Ratio and proceeding in ascending
order to the Premises with the next lowest Fixed Charge Coverage Ratio) as is
necessary to cure the breach of the Fixed Charge Coverage Ratio requirement and
for which the then Fixed Charge Coverage Ratio (with the definitions in Section
7.J being deemed to be modified as applicable to provide for the calculation of
the Fixed Charge Coverage Ratio for each such Premises on an individual basis
rather than on an aggregate basis with the other Premises) is below 1.25:1
(each, a "Subject Premises"), (ii) prepay the Note or Notes corresponding to the
Subject Premises in whole but not in part (without premium or penalty) or (iii)
notify Lender of Borrower's election to substitute a Substitute Premises for
each Subject Premises in accordance with the terms of Section 13 (the failure of
Borrower to complete such substitution within 60 days after Borrower has
delivered the Proposed Substitution Notice to Lender shall be deemed to be an
Event of Default without further notice or demand of any kind being required).
For purposes of the preceding sentence, "FCCR Amount" means that sum of money
which, when subtracted from the outstanding principal amount of the Note
corresponding to a Subject Premises, and assuming the resulting principal
balance is reamortized in equal monthly payments over the remaining term of such
Note at the rate of interest set forth therein, will result in an adjusted
aggregate Fixed Charge Coverage Ratio for all of the Premises of at least 1.25:1
based on the prior year's operations. Promptly after Borrower's payment of the
FCCR Amount, Borrower and Lender shall execute an amendment to each such Note in
form and substance reasonably acceptable to Lender reducing the principal amount
payable to Lender under
30
such Note and reamortizing the principal amount of such Note in equal monthly
payments over the then remaining term of such Note at the rate of interest set
forth therein.
B. Upon the occurrence and during the continuance of an Event of
Default, subject to the limitations set forth in subsection A, Lender may
declare all or any part of the obligations of Borrower under the Notes, this
Agreement and any other Loan Document to be due and payable, and the same shall
thereupon become due and payable without any presentment, demand, protest or
notice of any kind except as otherwise expressly provided herein, and Borrower
hereby waives notice of intent to accelerate the obligations secured by the
Mortgages and notice of acceleration. Thereafter, Lender may exercise, at its
option, concurrently, successively or in any combination, all remedies available
at law or in equity, including without limitation any one or more of the
remedies available under the Notes, the Mortgages or any other Loan Document.
Neither the acceptance of this Agreement nor its enforcement shall prejudice or
in any manner affect Lender's right to realize upon or enforce any other
security now or hereafter held by Lender, it being agreed that Lender shall be
entitled to enforce this Agreement and any other security now or hereafter held
by Lender in such order and manner as it may in its absolute discretion
determine. No remedy herein conferred upon or reserved to Lender is intended to
be exclusive of any other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the Loan
Documents to Lender, or to which Lender may be otherwise entitled, may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by Lender.
11. ASSIGNMENTS BY LENDER. Subject to the terms of Section 14P.(2) of
this Agreement, Lender may assign in whole or in part its rights under this
Agreement, including, without limitation, in connection with any Transfer,
Participation and/or Securitization. Upon any unconditional assignment of
Lender's entire right and interest hereunder, Lender shall automatically be
relieved, from and after the date of such assignment, of liability for the
performance of any obligation of Lender contained herein.
12. INDEMNITY; RELEASE. A. Borrower shall, at its sole cost and expense,
protect, defend, indemnify, release and hold harmless each of the Indemnified
Parties for, from and against any and all Losses (excluding Losses suffered by
an Indemnified Party directly arising out of such Indemnified Party's gross
negligence or willful misconduct; provided, however, that the term "gross
negligence" shall not include gross negligence imputed as a matter of law to any
of the Indemnified Parties solely by reason of Borrower's interest in any of the
Premises or Borrower's failure to act in respect of matters which are or were
the obligation of Borrower under the Loan Documents), and costs of Remediation
(whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including but not limited to
sampling, testing, and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas) imposed upon or
incurred by or asserted against any Indemnified Parties, and directly or
indirectly arising out of or in any way relating to any one or more of the
following:
(1) any presence of any Hazardous Materials in, on, above, or under
any of the Premises;
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(2) any past, present or Threatened Release in, on, above, under or
from any of the Premises;
(3) any activity by Borrower, any person or entity affiliated with
Borrower or any tenant or other user of any of the Premises in connection with
any actual, proposed or threatened use, treatment, storage, holding, existence,
disposition or other Release, generation, production, manufacturing, processing,
refining, control, management, abatement, removal, handling, transfer or
transportation to or from any of the Premises of any Hazardous Materials at any
time located in, under, on or above any of the Premises;
(4) any activity by Borrower, any person or entity affiliated with
Borrower or any tenant or other user of any of the Premises in connection with
any actual or proposed Remediation of any Hazardous Materials at any time
located in, under, on or above any of the Premises, whether or not such
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal, remedial or corrective action;
(5) any past, present or threatened non-compliance or violations of
any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with any of the Premises or operations thereon, including but not
limited to any failure by Borrower, any person or entity affiliated with
Borrower or any tenant or other user of any of the Premises to comply with any
order of any Governmental Authority in connection with any Environmental Laws;
(6) the imposition, recording or filing or the threatened
imposition, recording or filing of any Environmental Lien encumbering any of the
Premises;
(7) any administrative processes or proceedings or judicial
proceedings in any way connected with any matter addressed in this Agreement;
(8) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with any of the Premises,
including but not limited to costs to investigate and assess such injury,
destruction or loss;
(9) any acts of Borrower, any person or entity affiliated with
Borrower or any tenant or other user of any of the Premises in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Materials owned or possessed by Borrower,
any person or entity affiliated with Borrower or any tenant or other user, at
any facility or incineration vessel owned or operated by another person or
entity and containing such or similar Hazardous Materials;
(10) any acts of Borrower, any person or entity affiliated with
Borrower or any tenant or other user of any of the Premises, in accepting any
Hazardous Materials for transport to disposal or treatment facilities,
incineration vessels or sites selected by Borrower, any person or entity
affiliated with Borrower or any tenant or other user of any of the Premises,
from which there is a Release, or a Threatened Release of any Hazardous Material
which causes the incurrence of costs for Remediation;
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(11) any personal injury, wrongful death, or property damage
arising under any statutory or common law or tort law theory, including but not
limited to damages assessed for the maintenance of a private or public nuisance
or for the conducting of an abnormally dangerous activity on or near any of the
Premises; or
(12) any misrepresentation or inaccuracy in any representation or
warranty or material breach or failure to perform any covenants or other
obligations pursuant to this Agreement.
B. Borrower fully and completely releases, waives and covenants not to
assert any claims, liabilities, actions, defenses, challenges, contests or other
opposition against Lender and Environmental Insurer, however characterized,
known or unknown, foreseen or unforeseen, now existing or arising in the future,
relating to Borrower's breach of any representation, covenant, or obligation set
forth in this Agreement with respect to any Hazardous Materials, Releases and/or
Remediation on, at or affecting any of the Premises.
13. SUBSTITUTION. A. Borrower shall have the right to obtain a release of
all liens granted in favor of Lender with respect to a Premises by substituting
a Substitute Premises for such Premises if:
(1) the terms of Section 10.A(7) permit such substitution;
(2) there is an event that results in a default under, or an event
that, but for the passage of time or giving of notice would be a default under,
Section 7.D., 7.E. or 7.F. hereof; or
(3) Borrower determines for any reason to make a substitution,
provided, however, that Borrower may not substitute more than seven (7) of the
Premises pursuant to the provisions of this subitem (3).
B. Borrower's right to substitute a Substitute Premises for a Premises
pursuant to the preceding subsection A. shall be subject to the fulfillment of
each of the following terms and conditions:
(1) Borrower shall provide Lender with notice of its intention to
substitute a Substitute Premises. Any notice (the "Proposed Substitution
Notice") with respect to a proposed substitution pursuant to the preceding
subsection A(1) must be delivered within the 30 day period following Borrower's
receipt of the FCCR Amount Notice and the closing of the substitution shall take
place within the 60 day period following Borrower's delivery of the Proposed
Substitution Notice. Any substitution pursuant to the preceding subsection A(2)
or A(3) shall take place within 60 days after delivery to Lender of the
substitution notice.
(2) Borrower must provide for the substitution of a Substitute
Premises, and the proposed Substitute Premises must:
(a) be a Permitted Concept, in good condition and repair,
ordinary wear and tear excepted;
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(b) have for the twelve month period preceding the date of the
closing of such substitution a Fixed Charge Coverage Ratio (with the definitions
of Section 7.J being deemed to be modified if necessary and as applicable to
provide for a calculation of the Fixed Charge Coverage Ratio for each of the
Substitute Premises, and the Premises being replaced on an individual basis
rather than on an aggregate basis with the other Substitute Premises and the
other Premises, respectively) at least equal to the Fixed Charge Coverage Ratio
for the Premises being replaced and the substitution must not cause a breach of
any Fixed Charge Coverage Ratio requirement under this Agreement;
(c) be owned in fee simple by Borrower;
(d) Borrower's right, title and interest in and to each
proposed Substitute Premises shall be free and clear of all liens, restrictions,
easements and encumbrances, except such matters as are acceptable to Lender (the
"Substitute Premises Permitted Exceptions"); and
(e) have a fair market value no less than the greater of the
then fair market value of the Premises to be replaced or the fair market value
of such Premises as of the Closing, all as reasonably determined by Lender's
in-house inspectors and underwriters utilizing the same valuation method as used
in connection with the Closing.
(3) Lender shall have inspected and approved the Substitute
Premises utilizing Lender customary site inspection and underwriting approval
criteria. Borrower shall have reimbursed Lender for all of its costs and
expenses incurred with respect to such proposed substitution, including, without
limitation, Lender's site inspectors' costs and expenses with respect to the
proposed Substitute Premises. Borrower shall be solely responsible for the
payment of all costs and expenses resulting from such proposed substitution,
including, without limitation, the cost of title insurance premiums and
endorsements, the cost of personal property lien insurance premiums and
endorsements, survey charges, stamp taxes, mortgage taxes, transfer fees,
escrow, filing and recording fees and UCC filing and recording fees (including
preparation, filing and recording fees for UCC continuation statements), the
cost of environmental due diligence undertaken pursuant to subsection (7) below,
including, without limitation, the cost of environmental insurance, and the
reasonable attorneys' fees and expenses of counsel to Borrower and Lender.
(4) Lender shall have received a preliminary title report and
irrevocable commitment to insure title in the amount of the then outstanding
principal balance of the Loan relating to the Premises to be replaced by means
of a mortgagee's ALTA extended coverage policy of title insurance (or its
equivalent, in the event such form is not issued in the jurisdiction where the
proposed Substitute Premises is located) for such proposed Substitute Premises
issued by Title Company showing good and marketable title in the real property
comprising the Substitute Premises vested in Borrower and committing to insure
Lender's first priority lien upon and security interest in the proposed
Substitute Premises, subject only to the Substitute Premises Permitted
Exceptions and containing endorsements substantially comparable to those
required by Lender at the Closing.
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(5) Lender shall have received an irrevocable commitment issued by
First American Corporation to insure Lender's first priority lien upon and
security interest in the "Personal Property" (as defined in the Substitute
Documents) subject only to such exceptions as Lender shall approve and
containing endorsements substantially comparable to those required by Lender at
the Closing.
(6) Lender shall have received a current ALTA survey of such
proposed Substitute Premises or its equivalent, the form of which shall be
comparable to those received by Lender at the Closing and sufficient to cause
the standard survey exceptions set forth in the title policy referred to in the
preceding subsection to be deleted, and disclosing no matters other than the
Substitute Premises Permitted Exceptions.
(7) Lender shall have completed such environmental due diligence of
each of the Premises as it deems necessary or advisable in its sole discretion,
including, without limitation, receiving an environmental insurance policy with
respect to such proposed Substitute Premises in form and substance and issued by
such environmental insurance company as is acceptable to Lender in its sole
discretion, and Lender shall have approved the environmental condition of the
Substitute Premises in its sole discretion.
(8) Borrower shall deliver, or cause to be delivered, with respect
to Borrower and Lessee and the Substitute Premises, opinions of Counsel in form
and substance comparable to those received at Closing (but also addressing such
matters unique to the Substitute Premises as may be reasonably required by
Lender).
(9) Borrower shall have provided Lender with evidence reasonably
satisfactory to Lender that the Substitute Premises is properly zoned for use as
a Permitted Concept and that such use constitutes a legal, conforming use under
applicable zoning requirements.
(10) no Event of Default shall have occurred and be continuing
under any of the Loan Documents.
(11) Borrower and Lessee shall have executed such documents as are
comparable to the security documents executed and delivered at Closing, as
applicable (but with such revisions as may be reasonably required by Lender to
address matters unique to the Substitute Premises) or amendments to such
documents, including, without limitation, a Mortgage, amendments to the Lease,
Memoranda and License Agreement, and UCC-1 Financing Statements (the "Substitute
Documents"), to provide Lender with a first priority lien on the proposed
Substitute Premises, subject only to the Substitute Premises Permitted
Exceptions, and all other rights, remedies and benefits with respect to the
proposed Substitute Premises which Lender holds in the Premises to be replaced,
all of which documents shall be in form and substance reasonably satisfactory to
Lender.
(12) the representations and warranties set forth in the Substitute
Documents and Section 6 of this Agreement applicable to the proposed Substitute
Premises shall be true and correct in all material respects as of the date of
substitution, and Borrower shall have delivered to Lender an officer's
certificate to that effect.
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(13) Borrower shall have delivered to Lender certificates of
insurance and insurance policies showing that all insurance required by the
Substitute Documents is in full force and effect.
Upon satisfaction of the foregoing conditions with respect to the
release of a Premises:
(a) the proposed Substitute Premises shall be deemed
substituted for the Premises to be replaced;
(b) the Loan Amount for the Substitute Premises shall be the
same as for the replaced Premises;
(c) the Substitute Premises shall be referred to herein as a
"Premises" and included within the definition of "Premises" and shall secure the
same Obligations as were secured by the Premises that were replaced;
(d) the Substitute Documents shall be dated as of the date of
the substitution;
(e) Lender will release, or cause to be released, the lien of
the Mortgage, UCC-1 Financing Statements and any other Loan Documents
encumbering the replaced Premises; and
(f) at the closing of the substitution, Borrower shall convey
without warranty or recourse the replaced Premises to a third party (including
without limitation Lessee, but excluding any of the Borrower Group).
14. MISCELLANEOUS PROVISIONS.
A. NOTICES. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Agreement or
any of the other Loan Documents shall be in writing and given by (i) hand
delivery, (ii) facsimile, (iii) express overnight delivery service or (iv)
certified or registered mail, return receipt requested, and shall be deemed to
have been delivered upon (a) receipt, if hand delivered, (b) transmission, if
delivered by facsimile, (c) the next Business Day, if delivered by express
overnight delivery service, or (d) the third Business Day following the day of
deposit of such notice with the United States Postal Service, if sent by
certified or registered mail, return receipt requested. Notices shall be
provided to the parties and addresses (or facsimile numbers, as applicable)
specified below:
If to Borrower: Friendly's Realty II, LLC
0000 Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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If to Lender: Xxxxxx X. Xxxxx, Esq.
Executive Vice President,
General Counseland Secretary
GE Capital Franchise Finance Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
B. REAL ESTATE COMMISSION. Lender and Borrower represent and warrant
to each other that they have dealt with no real estate or mortgage broker,
agent, finder or other intermediary in connection with the transactions
contemplated by this Agreement or the other Loan Documents. Lender and Borrower
shall indemnify and hold each other harmless from and against any costs, claims
or expenses, including attorneys' fees, arising out of the breach of their
respective representations and warranties contained within this Section.
C. WAIVER AND AMENDMENT; DOCUMENT REVIEW. (1) No provisions of this
Agreement or the other Loan Documents shall be deemed waived or amended except
by a written instrument unambiguously setting forth the matter waived or amended
and signed by the party against which enforcement of such waiver or amendment is
sought. Waiver of any matter shall not be deemed a waiver of the same or any
other matter on any future occasion.
(2) In the event Borrower makes any request upon Lender requiring
Lender or Lender's attorneys to review and/or prepare (or cause to be reviewed
and/or prepared) any documents, plans, specifications or other submissions in
connection with or arising out of this Agreement or any of the other Loan
Documents, then Borrower shall (x) reimburse Lender promptly upon Lender's
demand for all reasonable out-of-pocket costs and expenses incurred by Lender in
connection with such review and/or preparation, including, without limitation,
reasonable attorneys' fees, and (y) pay Lender a reasonable processing and
review fee.
D. CAPTIONS. Captions are used throughout this Agreement and the other
Loan Documents for convenience of reference only and shall not be considered in
any manner in the construction or interpretation hereof.
E. LENDER'S LIABILITY. Notwithstanding anything to the contrary
provided in this Agreement or the other Loan Documents, it is specifically
understood and agreed, such agreement being a primary consideration for the
execution of this Agreement and the other Loan Documents by Lender, that (1)
there shall be absolutely no personal liability on the part of any shareholder,
director, officer or employee of Lender, with respect to any of the terms,
covenants and conditions of this Agreement or the other Loan Documents, (2)
Borrower waives all claims, demands and causes of action against Lender's
officers, directors, employees and agents in the event of any breach by Lender
of any of the terms, covenants and conditions of this Agreement or the other
Loan Documents to be performed by Lender and (3) Borrower shall look solely to
the assets of Lender for the satisfaction of each and every remedy of Borrower
in the event of any breach by Lender of any of the terms, covenants and
conditions of this Agreement or the
37
other Loan Documents to be performed by Lender, such exculpation of liability to
be absolute and without any exception whatsoever.
F. SEVERABILITY. The provisions of this Agreement and the other Loan
Documents shall be deemed severable. If any part of this Agreement or the other
Loan Documents shall be held invalid, illegal or unenforceable, the remainder
shall remain in full force and effect, and such invalid, illegal or
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
G. CONSTRUCTION GENERALLY. This Agreement and the other Loan Documents
have been entered into by parties who are experienced in sophisticated and
complex matters similar to the transaction contemplated by this Agreement and
the other Loan Documents and is entered into by both parties in reliance upon
the economic and legal bargains contained therein and shall be interpreted and
construed in a fair and impartial manner without regard to such factors as the
party which prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party. Borrower and Lender were each represented
by legal counsel competent in advising them of their obligations and liabilities
hereunder.
H. FURTHER ASSURANCES. Borrower will, at its sole cost and expense, do,
execute, acknowledge and deliver or cause to be done, executed, acknowledged and
delivered all such further acts, documents, conveyances, notes, mortgages, deeds
of trust, assignments, security agreements, financing statements and assurances
as Lender shall from time to time reasonably require or deem advisable to carry
into effect the purposes of this Agreement and the other Loan Documents, to
perfect any lien or security interest granted in any of the Loan Documents and
for the better assuring and confirming of all of Lender's rights, powers and
remedies under the Loan Documents.
I. ATTORNEYS' FEES. In the event of any judicial or other adversarial
proceeding between the parties concerning this Agreement or the other Loan
Documents, the prevailing party shall be entitled to recover its attorneys' fees
and other costs in addition to any other relief to which it may be entitled.
J. ENTIRE AGREEMENT. This Agreement and the other Loan Documents,
together with any other certificates, instruments or agreements to be delivered
in connection therewith, constitute the entire agreement between the parties
with respect to the subject matter hereof, and there are no other
representations, warranties or agreements, written or oral, between Borrower and
Lender with respect to the subject matter of this Agreement and the other Loan
Documents. Notwithstanding anything in this Agreement and the other Loan
Documents to the contrary, with respect to the Premises, upon the execution and
delivery of this Agreement by Borrower and Lender, the Commitment shall be
deemed null and void and of no further force and effect and the terms and
conditions of this Agreement shall control notwithstanding that such terms and
conditions may be inconsistent with or vary from those set forth in the
Commitment.
K. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. Borrower
acknowledges that this Agreement and the other Loan Documents were substantially
negotiated in the State of Arizona, this Agreement and the other Loan Documents
were executed by Lender in the State of Arizona and executed and delivered by
Borrower in the State of Arizona, all
38
payments under the Notes will be delivered in the State of Arizona and there are
substantial contacts between the parties and the transactions contemplated
herein and the State of Arizona. For purposes of any action or proceeding
arising out of this Agreement or any of the other Loan Documents, the parties
hereto hereby expressly submit to the jurisdiction of all federal and state
courts located in the State of Arizona and Borrower consents that it may be
served with any process or paper by registered mail or by personal service
within or without the State of Arizona in accordance with applicable law.
Furthermore, Borrower waives and agrees not to assert in any such action, suit
or proceeding that it is not personally subject to the jurisdiction of such
courts, that the action, suit or proceeding is brought in an inconvenient forum
or that venue of the action, suit or proceeding is improper. It is the intent of
the parties hereto that all provisions of this Agreement and the Notes shall be
governed by and construed under the laws of the State of Arizona, without giving
effect to its principles of conflicts of law. To the extent that a court of
competent jurisdiction finds Arizona law inapplicable with respect to any
provisions of this Agreement or the Notes, then, as to those provisions only,
the laws of the states where the Premises are located shall be deemed to apply.
Nothing in this Section shall limit or restrict the right of Lender to commence
any proceeding in the federal or state courts located in the states in which the
Premises are located to the extent Lender deems such proceeding necessary or
advisable to exercise remedies available under this Agreement or the other Loan
Documents.
L. COUNTERPARTS. This Agreement and the other Loan Documents may be
executed in one or more counterparts, each of which shall be deemed an original.
M. BINDING EFFECT. This Agreement and the other Loan Documents shall
be binding upon and inure to the benefit of Borrower and Lender and their
respective successors and permitted assigns, including, without limitation, any
United States trustee, any debtor in possession or any trustee appointed from a
private panel.
N. SURVIVAL. Except for the conditions of Closing set forth in Section
4, which shall be satisfied or waived as of the Closing Date, all
representations, warranties, agreements, obligations and indemnities of Borrower
and Lender set forth in this Agreement and the other Loan Documents shall
survive the Closing.
O. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES. BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY
OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED
HERETO. THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
FURTHERMORE, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES FROM THE OTHER AND ANY OF THE OTHER'S AFFILIATES, OFFICERS,
DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH
39
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER OR ANY OF THE OTHER'S
AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY
OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED
HERETO. THE WAIVER BY BORROWER AND LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE
PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
P. TRANSFERS, PARTICIPATIONS AND SECURITIZATIONS. (1) A material
inducement to Lender's willingness to complete the transactions contemplated by
the Loan Documents is Borrower's agreement that Lender may, at any time,
complete a Transfer, Participation or Securitization with respect to any Note,
Mortgage and/or any of the other Loan Documents or any or all servicing rights
with respect thereto.
(2) Borrower agrees to cooperate in good faith with Lender in
connection with any such Transfer, Participation and/or Securitization of any
Note, Mortgage and/or any of the other Loan Documents, or any or all servicing
rights with respect thereto, including, without limitation (i) providing such
documents, financial and other data, and other information and materials (the
"Disclosures") which would typically be required with respect to Borrower or
Lessee by a purchaser, transferee, assignee, servicer, participant, investor or
rating agency involved with respect to such Transfer, Participation and/or
Securitization, as applicable; provided, however, (x) Borrower and Lessee shall
not be required to make Disclosures of any confidential information or any
information which has not previously been made public unless required by
applicable federal or state securities laws, and (y) each such purchaser,
transferee, assignee, servicer or participant acknowledges the confidential
nature of such information; and (ii) amending the terms of the transactions
evidenced by the Loan Documents to the extent necessary so as to satisfy the
requirements of purchasers, transferees, assignees, servicers, participants,
investors or selected rating agencies involved in any such Transfer,
Participation or Securitization, so long as such amendments would not have a
material adverse effect upon Borrower, Lessee or the transactions contemplated
hereunder. Notwithstanding the preceding sentence, Borrower shall not be
required to amend or change any documents evidencing or securing any Loan
Documents which would modify (a) the interest rate payable under the Notes, (b)
the stated maturity date of the Notes, (c) the amortization of principal or
prepayment rights with respect to the Notes, or (d) any other material economic
term of the Loan Documents that would have a material adverse effect on
Borrower. Lender shall be responsible for preparing at its expense any documents
in connection with any Transfer, Participation and/or Securitization, including
without limitation all documents evidencing the amendments referred to in the
preceding subitem (ii).
(3) Subject to the terms of Section 14P.(2) above, Borrower
consents to Lender providing the Disclosures, as well as any other information
which Lender may now have or hereafter acquire with respect to the Premises or
the financial condition of Borrower and Lessee to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency involved with respect
to each Transfer, Participation and/or Securitization, as applicable. Lender
40
and Borrower (and their respective Affiliates) shall each pay their own
attorneys fees and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents:
(a) an Event of Default or a breach or default, after the
passage of all applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan or sale/leaseback
transaction which has not been the subject of a Securitization, Participation or
Transfer shall not constitute an Event of Default or a breach or default, as
applicable, under any Loan Document or Other Agreement which relates to a loan
which has been the subject of a Securitization, Participation or Transfer;
(b) an Event of Default or a breach or default, after the
passage of all applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan which is included in any
Loan Pool shall not constitute an Event of Default or a breach or default, as
applicable, under any Loan Document or Other Agreement which relates to a loan
which is included in any other Loan Pool;
(c) the Loan Documents and Other Agreements corresponding to
the loans in any Loan Pool shall not secure the obligations of any of the
Borrower Entities contained in any Loan Document or Other Agreement which does
not correspond to a loan in such Loan Pool; and
(d) the Loan Documents and Other Agreements which do not
correspond to a loan in any Loan Pool shall not secure the obligations of any of
the Borrower Entities contained in any Loan Document or Other Agreement which
does correspond to a loan in such Loan Pool.
(5) In the event that at least one, but not all, of the Loans are
included in a Loan Pool, Borrower, at the request of Lender, shall execute (i) a
separate Loan Agreement with respect to those Loans included in such Loan Pool,
which Loan Agreement shall be in substantially the same form and substance as
this Agreement but shall only apply with respect to those Premises corresponding
to such Loans (the "Other Loan Agreement"), (ii) an amendment to this Agreement
that shall modify the term "Premises" to delete those Premises corresponding to
the Other Loan Agreement from this Agreement. Lender shall prepare, at Lender's
expense, the documents contemplated by the preceding sentence. Subject to the
terms of Section 14P.(2) of this Agreement, if Borrower shall fail to execute
and deliver any of the documents contemplated by this subsection (5) within ten
(10) days after Lender's request, Lender shall be and is hereby irrevocably
appointed the agent and attorney-in-fact of Borrower to execute and deliver such
documents, which appointment is coupled with an interest and is irrevocable and
binding.
Q. ESTOPPEL CERTIFICATE. (1) At any time, and from time to time,
Borrower agrees, promptly and in no event later than fifteen (15) days after a
written request from Lender, to execute, acknowledge and deliver to Lender a
certificate in the form supplied by Lender,
41
certifying: (a) the date to which principal and interest have been paid under
the Note and the amount thereof then payable; (b) that no written notice has
been received by Borrower of any default under this Agreement or any of the
other Loan Documents which has not been cured, except as to defaults specified
in the certificate; (c) the capacity of the person executing such certificate,
and that such person is duly authorized to execute the same on behalf of
Borrower; (d) that Lender does not have actual involvement in the management or
control of decision making related to the operational aspects or the day-to-day
operations of the Premises; and (e) any other information reasonably requested
by Lender in connection with this Agreement and the other Loan Documents. If
Borrower shall fail or refuse to sign a certificate in accordance with the
provisions of this Section within fifteen (15) days following a request by
Lender, Borrower irrevocably constitutes and appoints Lender as its
attorney-in-fact to execute and deliver the certificate to any such third party,
it being stipulated that such power of attorney is coupled with an interest and
is irrevocable and binding.
(2) At any time, and from time to time, Lender, agrees, promptly
and in no event later than fifteen (15) days' after a request from Borrower, to
execute, acknowledge and deliver to Borrower a certificate in the form supplied
by Borrower, certifying: (a) to Lender's knowledge, whether there are then any
existing defaults by Borrower in the performance of its obligations under this
Agreement or any of the other Loan Documents, and, if there are any such
defaults, specifying the nature and extent thereof; (b) that no notice has been
delivered by Lender to Borrower of any default under this Agreement or the other
Loan Document which has not been cured, except as to defaults specified in the
certificate; (c) the date to which the principal and interest have been paid
under the Notes and the amount thereof then payable; (d) the capacity of the
person executing such certificate, and that such person is duly authorized to
execute the same on behalf of Lender; and (e) any other information reasonably
requested by Borrower in connection with this Agreement and the other Loan
Documents.
R. CONFIDENTIALITY. Lender shall take reasonable precautions and
exercise due care to maintain the confidentiality of all information provided to
it by Borrower or Lessee, and Lender shall not use any such information other
than in connection with the transactions contemplated hereunder or with other
business now or hereafter existing with Borrower, Lessee or any Affiliate of
Borrower or Lessee. The foregoing shall not apply to information which (i) is
generally available to the public other than as a result of Lender disclosing
such information, or (ii) was, is or becomes available on a non-confidential
basis from a source other than Borrower, Lessee or any Affiliate of Borrower or
Lessee, provided that such source is not bound by a confidentiality agreement
with Borrower, Lessee or any Affiliate of Borrower or Lessee, the existence of
which is known to Lender. In addition, Lender may disclose any confidential
information (a) at the request of, or pursuant to any requirement of, any
governmental authority of competent jurisdiction or in connection with an
examination of Lender by any such authority; (b) pursuant to subpoena or other
court process; (c) when required to do so in accordance with the provisions of
any applicable requirement of law; (d) to independent auditors and other
professional advisors of Lender; and (e) to any purchaser or transferee of, or
participant in, a Loan, or to any investor or servicer in connection with a
Transfer, Participation or Securitization, so long as such recipient
acknowledges that Lender has agreed to maintain the confidentiality of such
confidential information and agrees to maintain such confidentiality itself.
42
IN WITNESS WHEREOF, Borrower and Lender have entered into this Agreement
as of the date first above written.
LENDER:
GE CAPITAL FRANCHISE FINANCE CORPORATION,
a Delaware corporation
By
--------------------------------------
Printed Name ----------------------------
Its -------------------------------------
BORROWER:
FRIENDLY'S REALTY II, LLC, a Delaware
limited liability company
By
--------------------------------------
Xxxxx Xxxxxx, Vice President
U.S. Federal Tax Identification Number:
00-0000000
Organization Identification Number:
3443429
Principal Place of Business:
Wilbraham, Massachusetts
S1
POWER OF ATTORNEY
Lender may act as attorney-in-fact or otherwise on behalf of Borrower
pursuant to Sections 14.P(5) and 14.Q(1) of this Agreement. This power of
attorney is coupled with an interest, is durable and is not affected by
subsequent disability or incapacity of the principal or lapse of time.
--------------- --------------------
Witness Borrower
WITNESS
In accordance with the requirements of Arizona Revised Statutes Section
14-5506 and other applicable law, the undersigned has executed this Agreement
for the purpose of witnessing the grant of the powers of attorney by Borrower to
Lender.
--------------------------------
S2
STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me on November __, 2001
by ___________________________ , of GE Capital Franchise Finance Corporation, a
Delaware corporation, on behalf of the corporation.
-----------------------------------------
Notary Public
My Commission Expires:
------------------------------------------------------------
STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me on November __, 2001
by Xxxxx Xxxxxx, Vice President of Friendly's Realty II, LLC, a Delaware limited
liability company, on behalf of the limited liability company.
-----------------------------------------
Notary Public
My Commission Expires:
------------------------------------------------------------
S3
