Exhibit 10.1
LOAN AGREEMENT
by and between
IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP.,
as Lender
and
WILD BILLS CALIFORNIA, INC.,
KING HENRY'S, INC. and FORT LIBERTY, INC.
as Borrowers
Date: As of March 11, 1998
Exhibit 10.1
LOAN AGREEMENT
This Loan Agreement is made as of this 11th day of March, 1998, by and between
WILD BILLS CALIFORNIA, INC., a Nevada corporation, KING HENRY'S, INC., a Nevada
corporation, and FORT LIBERTY, INC., a Nevada corporation (collectively,
"Borrowers"), and IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT CORP., a
Maryland corporation ("Lender").
RECITALS
A. Concurrently with the recordation of the mortgage securing the Loan (as
hereinafter defined) to King Henry's, Inc., King Henry's, Inc. is
acquiring certain property commonly known as 0000 Xxxxxxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxx and legally described on Exhibit A-1 (the "King Henry's
Real Property").
B. Concurrently with the recording of the leasehold trust deed securing the
Loan to Wild Bills California, Inc., Wild Bills California, Inc. is
acquiring a leasehold interest in certain property commonly known as 0000
Xxxxx Xxxx., Xxxxx Xxxx, Xxxxxxxxxx and legally described on Exhibit A-2
(the "Wild Bills Real Property").
C. Concurrently with the recordation of the mortgage securing the Loan to
Fort Liberty, Inc., Fort Liberty, Inc. is acquiring certain property
commonly known as 0000 Xxxx Xxxx Xxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxx and
legally described on Exhibit A-3 (the "Fort Liberty Real Property").
D. The parties comprising Borrowers have applied to Lender for loans (each, a
"Loan" and collectively, the "Loans") in the following maximum amounts,
and Lender has agreed to make the Loan on the terms and conditions
contained herein:
Borrower Loan Amount
--------------------------- -----------
King Henry's Inc. $5,000,000
Fort Liberty, Inc. $6,600,000
Wild Bills California, Inc. $ 900,000
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto agree as follows:
1. DEFINED TERMS. The following terms as used herein shall have the following
meanings:
Affiliated Party: (i) With respect to any Person, any other Person (x) in
which such first Person, directly or indirectly, owns greater than a twenty
percent (20%) interest (whether economic or voting), (y) which directly or
indirectly owns greater than a twenty percent (20%) interest (whether
voting or economic) in such first Person or (z) which, directly or
indirectly, is in control of, is controlled by, or is under common control
with such first Person; (ii) without limiting clause (i) hereof, with
respect to any Person that is a partnership, each of its constituent
general or limited partners; and (iii) without limiting clause (i) hereof,
with respect to any Person that is a corporation, each of its officers,
directors and, unless its stock is publicly traded on the New York Stock
Exchange or American Stock Exchange or through the network of the National
Association of Securities Dealers, shareholders. For the purposes of this
definition, "control" and "controlled" with respect to a Person means the
power, directly or indirectly, either to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of voting securities or equity interests, by contract or otherwise.
Agreement: This Loan Agreement, as originally executed or as may be
hereafter supplemented or amended from time to time in writing.
Appraisal: An appraisal report prepared by a member of a national appraisal
organization that is certified in the state in which the property being
appraised by it is located and that has adopted the Uniform Standards of
Professional Appraisal Practice (USPAP) established by the Appraisal
Standards Board of the Appraisal Foundation. The appraiser shall use
assumptions and limiting conditions established by Lender, and the
appraisal shall be in conformity with Lender's appraisal guidelines. Unless
specifically provided in this Agreement, no Appraisal shall include any
"going concern value" or goodwill relating to the business conducted from
the applicable Project.
Assignment of Leases: The assignment of leases and rents described in
Section 2.2(c) of this Agreement and executed by the applicable Borrower,
as assignor, and recorded or to be recorded in the Official Records of the
county where the applicable Real Property is located, contemporaneously
with the recordation of the applicable Deed of Trust or Mortgage, as
originally executed or as may be hereafter supplemented or amended from
time to time in writing.
Blazing Piano's Security Agreement: A security agreement executed by
Blazing Piano's, Inc., a Nevada corporation which is an affiliate of
Borrowers, granting Lender a security interest in certain personal property
as additional security for the Loans.
Building Laws: All federal, state and local laws, regulations, ordinances
and requirements applicable to the development and operation of a Project,
including without limitation all access, building, zoning, planning,
subdivision, fire, traffic, safety, health, labor, discrimination,
environmental, air quality, wetlands, shoreline, and flood plain laws,
regulations and ordinances, including, without limitation, all applicable
requirements of the Fair Housing Amendments Act of 1988 (as amended), the
Americans with Disabilities Act of 1991, and all orders or decrees of any
court adopted or enacted with respect thereto applicable to such Project.
California Lease: That certain Master Ground Lease dated as of January 1,
1990 by and between Spiegel Enterprises, a California general partnership,
and Mecca Leisure (CAL), Inc. (Wild Bills California, Inc.'s predecessor in
interest).
Debt Service Coverage Ratio: For any calendar quarter, the ratio of (i) 25%
of the EBITDA for the four immediately prior calendar quarters (excluding
from EBITDA, for this purpose only, all nonrecurring items occurring on or
before December 31, 1997 as set forth in Schedule 1 attached hereto and
made part hereof), to (ii) the aggregate amount of principal and interest
payable under all the Loans for such quarter.
Deed of Trust: The leasehold deed of trust, security agreement and fixture
filing described in Section 2.2 of this Agreement, executed by Wild Bills
California, Inc., as trustor, and recorded or to be recorded in Orange
County, California, as applicable, as originally executed or as may be
hereafter supplemented or amended from time to time in writing.
Default: Any event which, if it were to continue uncured, would, with
notice or lapse of time or both, constitute an Event of Default.
Default Rate: The default interest rate specified in a Note.
EBITDA: For a given period, the sum of the following for On Stage
Entertainment, Inc. ("OSE"): (a) Net Income for such period, (b) the amount
deducted by OSE in determining Net Income for such period, representing (i)
Interest Expense of OSE; plus (ii) the amount deducted, in determining Net
Income for such period, of all federal, state and local income taxes
(whether paid in cash or deferred) of OSE; plus (iii) depreciation of
assets of OSE, plus (iv) amortization.
Environmental Indemnity: Each indemnity agreement delivered by a Borrower
to Lender contemporaneously herewith with respect to a given Project and
described in Section 2.2(g) of this Agreement, as originally executed or as
may be hereafter supplemented or amended from time to time in writing.
ERISA: Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder from time to time.
Event of Default: The meaning set forth in Section 7.1.
Fort Liberty Improvements: The Improvements associated with the Fort
Liberty Project.
Fort Liberty Real Property: The real property described on Exhibit A-3.
Fort Liberty Tenant Leases: All leases, licenses or other occupancy
arrangements for premises in or portions of the Fort Liberty Real Property
other than the On Stage Lease for the Fort Liberty Real Property.
GAAP: Generally accepted accounting principles according to U.S. accounting
(FASB) standards, consistently applied.
Governmental Approvals: The meaning set forth in Section 4.11 of this
Agreement.
Governmental Authority: Any federal, state, county or municipal government,
or political subdivision thereof, any governmental or quasi-governmental
agency, authority, board, bureau, commission, department, instrumentality,
or public body, or any court, administrative tribunal, or public utility.
Ground Lessor: The ground lessor under the California Lease (currently
Spiegel Enterprises, a California general partnership).
Guarantee(s): The Guarantees being executed concurrently herewith by King
Henry's Inc., Fort Liberty, Inc., Blazing Piano's, Inc., Wild Bills
California, Inc. and OSE.
Impound Account: The meaning set forth in Section 3.1.
Improvements: The buildings, parking and other structures, other permanent
improvements and Personal Property located on each respective parcel of
Land.
include or including: Including but not limited to.
Indemnitor: On Stage Entertainment, Inc. and the Borrowers collectively.
Internal Revenue Code: The Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder from time to time.
knowledge: When used to modify a representation or warranty, actual
knowledge or such knowledge as a reasonable person under the circumstances
should have, including such inquiry and investigation as a reasonable and
diligent person would conduct. Lender acknowledges Borrowers recently
purchased the Projects, and that the knowledge of each Borrower may be less
extensive than if such Borrower had owned the applicable Project for a
longer period of time.
Land: The land legally described in Exhibits X-0, X-0, X-0 and A-4 attached
hereto.
Laws: Collectively, all federal, state and local laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
precedential authority in the applicable jurisdiction.
Loan Documents: This Agreement, the documents and instruments listed in
Section 2.2 of this Agreement, and all the documents given to Lender from
time to time to evidence, secure or guarantee the Loan.
Loan Maturity: March 31, 2008.
Loan Opening Date: The date of the initial disbursement of the Loan.
Mortgage: Each mortgage, security agreement and fixture filing described in
Section 2.2 of this Agreement, executed by a Borrower as mortgagor in favor
of Lender as mortgagee and recorded or to be recorded in the county where
the applicable Land is located, as originally executed or as may be
hereafter supplemented or amended from time to time in writing.
Net Income: For any period, the aggregate of all amounts which, in
accordance with GAAP, would be included in determining net income on the
financial statements of OSE for such period (excluding, however, all
amounts in respect of any extraordinary items and all items of revenue to
the extent that cash with respect thereto is not expected to be received
within one year of the date on which such revenue is included in income).
Note: Each note relating to a Project described in Section 2.2 of this
Agreement, as originally executed and as may be hereafter supplemented or
amended from time to time in writing.
On Stage Lease: For each Project, a lease to On Stage Theaters, Inc. in
form and substance satisfactory to Lender.
OSE: On Stage Entertainment, Inc.
Permitted Exceptions: Those matters listed in Exhibit B hereto to which the
respective interests of each Borrower in the respective Real Property may
be subject and any such other title exceptions or objections, if any, as
Lender, or its counsel, may approve in advance in writing.
Person: Any person or entity, including an individual, trustee,
corporation, partnership, trust, limited liability company, unincorporated
organization, governmental agency or otherwise.
Personal Property: All goods, materials, supplies, chattels, furniture,
fixtures, equipment and machinery now or later to be attached to, placed in
or on, or used in connection with the use, enjoyment, occupancy or
operation of all or any part of the Land and Improvements, whether stored
on the Land or elsewhere, including all costumes, props, sets, stage
lighting, sound equipment, tables, chairs, plates, silverware, glasses,
mugs, cups, serving bowls, kitchen equipment, bar equipment, inventory and
articles of personal property and accessions thereof and renewals,
replacements thereof and substitutions therefor.
Project: The Land, Improvements and Personal Property associated with each
separate real property described in Exhibits X-0, X-0 and A-3.
Rating Agency: Each of Standard & Poor's Ratings Services, a division of
XxXxxx-Xxxx Companies, Inc., Xxxxx'x Investors Service, Inc., Duff and
Xxxxxx Credit Rating Co. and Fitch Investors Service, L.P., or any other
nationally-recognized credit rating agency which has been approved by
Lender.
Real Property: That portion of a Project constituting real property
(including that portion of the Land in which a Borrower has a leasehold
estate).
Secondary Market Transaction: The meaning set forth in Section 10.14.
Servicer: The entity, if any, selected by Lender to service the Loans.
Survey: Each certain ALTA/ACSM survey of the Land and Improvements
associated with a given Project.
Term: The term of the Loans.
Title Insurer: First American Title Insurance Company, or for each Project
such other title insurance company licensed in the State where the Project
is located as may be approved by Lender in connection with the Loan.
Warrant Agreement: That certain Warrant Agreement of even date herewith
between Lender and OSE.
Defined terms may be used in the singular or the plural. When used in the
singular preceded by "a", "an", or "any", such term shall be taken to
indicate one or more members of the relevant class. When used in the
plural, such term shall be taken to indicate all members of the relevant
class.
2. TERMS OF LOAN AND DOCUMENTS.
2.1 Agreement to Borrow and Lend. Subject to all of the terms, provisions and
conditions set forth in this Agreement, Lender agrees to make and each
Borrower agrees to accept the applicable Loan described in the Recitals of
this Agreement. Each Borrower agrees to pay all indebtedness evidenced and
secured by the Loan Documents for the Loan to such Borrower in accordance
with the terms thereof.
2.2 Loan Documents. In consideration of Lender's entry into this Agreement and
Lender's agreement to make the Loans, Borrowers agree that they will, in
sufficient time for review by Lender and its counsel prior to the Loan
Opening Date, execute and deliver or cause to be executed and delivered to
Lender the following documents and instruments in form and substance
acceptable to Lender:
(a) A promissory note payable to the order of Lender in the following
original principal amounts:
Borrower Loan Amount
--------------------------- -----------
King Henry's Inc. $ 5,000,000
Fort Liberty, Inc. $ 6,600,000
Wild Bills California, Inc. $ 900,000
-----------
Total of Loans: $12,500,000
===========
(b) A first mortgage or deed of trust, security agreement and fixture
filing on Borrower's fee or leasehold, as applicable, estate in the
property securing the applicable Loan, subject only to the Permitted
Exceptions;
(c) An assignment of leases and rents that together provide for the
assignment to Lender of all rents and all leases, licenses,
concessions and other similar agreements relating to or connected with
the Project, each of which shall be a present first priority absolute
assignment of all present and future leases of all or any part of the
Project described therein, all lease guarantees and all rents and
other sums payable thereunder (provided the applicable Borrower may
collect and retain rents until an Event of Default has occurred);
(d) A security agreement granting Lender a security interest in all
personal property, tangible and intangible, owned or hereafter
acquired by the applicable Borrower including bank accounts, accounts
receivable, all impound or reserve accounts required in the Loan
Documents, and all books, records, computer tapes, discs and memory
storage facilities, information stored by electronic media,
trademarks, tradenames and other intangible property, which agreement
may be combined with or incorporated into the Deed of Trust or
Mortgage;
(e) Uniform Commercial Code financing statements, in duplicate, executed
by the applicable Borrower as debtor with respect to all of the
Personal Property;
(f) The Blazing Piano's Security Agreement, along with uniform commercial
code financing statement(s) with respect to the property described
therein;
(g) An assignment to Lender of all of the right, title and interest of
such Borrower in and to all agreements and other documents relating to
the ownership, development, operation, construction, or use of the
Project, including any management agreements, franchise agreements,
reservation agreements, concession agreements, contracts, leases,
licenses, warranties and guaranties relating to such Project, together
with consents thereto from those third parties to such agreements as
Lender may require;
(h) An indemnity agreement with respect to certain matters including
environmental covenants;
(i) A repayment guaranty executed by On Stage Entertainment, Inc. and each
other Borrower;
(j) Any other documents required by this Agreement; and
(k) Such other papers and documents as Lender may reasonably require.
2.3 Terms of the Loans. The Loans will bear interest for the period and at the
rate set forth in the Notes. The unpaid principal balance, all accrued and
unpaid interest and all other sums due and payable under the Notes or other
Loan Documents, if not sooner paid, shall be paid in full at Loan Maturity.
2.4 Prepayments. No Borrower shall have the right to make prepayments of the
Loan in whole or in part except in accordance with the terms of the Notes.
2.5 Sources and Uses. Each Borrower shall use the proceeds of the respective
Loan solely for the purposes set forth in Exhibit C.
3. BORROWERS' COVENANTS. Borrowers further covenant and agree with Lender as
follows:
3.1 Impound Accounts and Reserves. With respect to each Project, the Borrower
shall deposit for the benefit of Lender into separate interest-bearing
accounts at a financial institution selected by Lender (collectively, the
"Reserves"):
3.1.1 Impound Account. On the first day of each calendar month, a sum equal to
one twelfth (1/12) of the amount estimated by Lender or its Servicer to
be required to pay, at least thirty (30) days prior to their respective
due dates, annual taxes, assessments, ground rent and insurance premiums
(for any Policy if the premiums therefor are not paid on a monthly basis)
for each Project (the "Impound Account"). On the Loan Opening Date, Such
Borrower shall make an initial deposit of a sum equal to one-twelfth
(1/12) of the yearly property taxes and assessments plus a sum equal to
one-twelfth (1/12) of the annual insurance premiums (for any Policy if
the premiums therefor are not paid on a monthly basis), each as estimated
by Lender, multiplied by the number of months elapsed in the respective
billing periods. The Servicer shall manage the disbursements out of the
Impound Account.
3.1.2 Additional Security; Control by Borrower Until released as above
provided, the Reserves shall constitute additional security for the Loan
relating to such Project. Each Borrower shall, from time to time, upon
Lender's request, execute, deliver, record and furnish such documents and
notices as Lender may reasonably deem necessary or desirable to create,
perfect and maintain perfected security interests in the Reserves.
Subject to Lender's security interests therein, until an Event of Default
has occurred, the Reserves shall remain in the name of Borrower. Upon the
occurrence of an Event of Default, Lender may require that any sums then
present in any Reserve be applied to the payment of the applicable Loan
in any order in its sole discretion.
3.2 Payment of Taxes. Each Borrower shall pay all special assessments and all
real estate taxes, assessments and charges of every kind upon such
Borrower's Project before the same become delinquent; provided, however,
that such Borrower shall have the right to pay any such tax under protest
or to otherwise contest any such tax, assessment or charge but only if
(i) such contest has the effect of preventing the collection of such
taxes so contested and also prevent the commencement of sale or
foreclosure proceedings with respect to, or forfeiture of, such Project
or any part thereof or any interest therein, (ii) such Borrower has
notified Lender in writing in advance of its intent to contest such
taxes, and (iii) such Borrower has deposited security in form and amount
satisfactory to Lender, in its sole judgment, and increases the amount of
such security so deposited promptly after Lender's request therefor. If
such Borrower fails to commence such contest or, having commenced to
contest the same, and having deposited such security required by Lender
for its full amount, Borrower shall thereafter fail to prosecute such
contest vigorously, in good faith, with due diligence and by appropriate
proceedings, or, upon adverse conclusion of any such contest, shall fail
to pay such tax, assessment or charge, Lender may at its election (but
shall not be required to), pay and discharge any such tax, assessment or
charge, and any interest or penalty thereon, and any amounts so expended
by Lender shall be deemed to constitute disbursements of the Loan
proceeds hereunder (even if the total amount of disbursements would
exceed the face amount of the applicable Note). Lender in making any
payment hereby authorized relating to taxes and assessments, may do so
according to any xxxx, statement or estimate procured from the
appropriate public office without inquiry into the accuracy of such xxxx,
statement or estimate or into the validity of any tax, assessment, sale,
forfeiture, tax lien or title or claim thereof.
3.3 Maintenance of Insurance.
3.3.1 All Risk Insurance. Each Borrower, at its sole cost and expense, for the
mutual benefit of such Borrower and Lender, shall obtain and maintain
during the entire Term (or if later, until all amounts payable under such
Loan are paid in full) policies of insurance against loss or damage by
fire, lightning, wind and such other perils as are included in a standard
"all-risk" or "special causes of loss" form, and against loss or damage
by all other risks and hazards covered by a standard extended coverage
insurance policy including, without limitation, riot and civil commotion,
vandalism, malicious mischief, burglary and theft. Such insurance shall
be in an amount equal to the greater of (i) the then full replacement
cost of the Improvements, without deduction for physical depreciation,
and (ii) such amount as would cause the insurer to not deem such Borrower
a co-insurer under said policies. The policies of insurance carried in
accordance with this paragraph shall be paid monthly in advance and shall
contain a "Replacement Cost Endorsement" with a waiver of depreciation
and an "Agreed Amount Endorsement". The policies shall have a deductible
no greater than $25,000 unless agreed to by Lender.
3.3.2 Additional Insurance. Each Borrower, at its sole cost and expense, for
the mutual benefit of such Borrower and Lender, shall also obtain and
maintain during the Term the following policies of insurance for each
Project:
(a) Flood insurance if any part of the applicable Project is located in
an area identified by the Federal Emergency Management Agency as an
area having special flood hazards and in which flood insurance has
been made available under the National Flood Insurance Program in an
amount at least equal to the outstanding principal amount of the
applicable Loan or the maximum limit of coverage available with
respect to the Improvements under said Program, whichever is less.
(b) Comprehensive General Liability or Commercial General Liability
insurance, including a broad form comprehensive general liability
endorsement and coverage for broad form property damage, contractual
damages, personal injuries (including death resulting therefrom) and
a liquor liability endorsement if liquor is sold on such Project
containing minimum limits per occurrence of $1,000,000.00 and
$2,000,000.00 in the aggregate for any policy year. In addition, at
least $10,000,000.00 excess and/or umbrella liability insurance
shall be obtained and maintained for any and all claims, including
all legal liability imposed upon such Borrower and all court costs
and attorneys' fee incurred in connection with the ownership,
operation and maintenance of the relevant Project.
(c) Rental loss and/or business interruption insurance from all perils
(including earthquake insurance if readily available and if not
unreasonable for a lender to require) for a period of 12 months in
an amount equal to the estimated gross revenues from the operations
of the Project over 12 months. The amount of such insurance shall be
increased from time to time during the Term as the annual estimate
of (or the actual) gross revenue, as may be applicable, increases.
(d) Insurance against loss or damage from (A) leakage of sprinkler
systems and (B) explosion of steam boilers, air conditioning
equipment, high pressure piping, machinery and equipment, pressure
vessels or similar apparatus now or hereafter installed in the
Improvements (without exclusion for explosions), in an amount at
least equal to the outstanding principal amount of the relevant Note
or $2,000,000.00, whichever is more.
(e) Worker's compensation insurance with respect to any employees of
such Borrower, as required by any governmental authority or
applicable Laws.
(f) During any period of renovation, repair or restoration, builder's
"all risk" insurance in an amount equal to not less than the full
insurable value of such Project against such risks (including,
without limitation, fire and extended coverage and collapse of the
Project Improvements to agreed limits) as Lender may request, in
form and substance acceptable to Lender.
(g) Earthquake insurance in an amount equal to the lesser of the
original principal balance of the relevant Loan and the maximum
amount permitted by law, if readily available and if not
unreasonable for a lender to require.
(h) Such other insurance as may from time to time be reasonably required
by Lender in order to protect its interests.
3.3.3 Additional Requirements. All policies of insurance (the "Policies")
required pursuant to this Section 3.3: (i) shall be issued by companies
approved by Lender and licensed to do business in the state where the
Project is located, with a claims paying ability rating of "BBB" or
better by Standard & Poor's Ratings Services, a division of XxXxxx-Xxxx
Companies, Inc., and a rating of "A:X" or better in the current Best's
Insurance Reports; (ii) shall name as additional insureds Lender and its
successors and/or assigns as their interest may appear; (iii) shall
contain a Non-Contributory Standard Mortgagee Clause and a Lender's Loss
Payable Endorsement, or their equivalents, naming Lender as the Person to
which all payments made by the insurance company issuing the Policies
shall be paid; (iv) shall contain a waiver of subrogation against Lender;
(v) shall be maintained throughout the Term without cost to Lender; (vi)
shall be assigned and the originals delivered to Lender (including
certified copies of the Policies in effect on the date hereof within
thirty (30) days after the closing of the Loan); (vii) shall contain such
provisions as Lender deems reasonably necessary or desirable to protect
its interest including, without limitation, endorsements providing that
neither any Borrower, Lender nor any other Person shall be a co-insurer
under said Policies and that Lender shall receive at least thirty (30)
days prior written notice of any modification, reduction or cancellation
for any reason, including nonpayment of premiums; and (viii) shall be
satisfactory in form and substance to Lender and shall be approved by
Lender as to amounts, form, risk coverage, deductibles, loss payees and
insureds. Lender may elect to close even though the Policies and related
certificate do not meet the requirements recited above, provided Lender
may subsequently require that duplicate original Policies meeting such
requirements be obtained and submitted to Lender within 30 days after
written notice to Borrowers. The applicable Borrower shall pay the
premiums (except to the extent Impounds therefor have been funded and
funds in such Impounds allocable thereto have not been otherwise applied)
for such Policies (the "Insurance Premiums") as the same become due and
payable and shall furnish to Lender evidence of the renewal of each of
the Policies with receipts for the payment of the Insurance Premiums or
other evidence of such payment reasonably satisfactory to Lender. If the
applicable Borrower does not furnish such evidence and receipts at least
thirty (30) days prior to the expiration of any Policy, then Lender may
procure, but shall not be obligated to procure, such insurance and pay
the Insurance Premiums therefor, and such Borrower shall reimburse Lender
for the cost of such Insurance Premiums promptly on demand. Within thirty
(30) days after request by Lender, such Borrower shall obtain such
increases in the amounts of coverage required hereunder as may be
reasonably requested by Lender, taking into consideration inflation,
changes in the value of money over time, changes in liability laws,
changes in prudent customs and practices, and the like.
3.4 Mechanics' Liens and Contest Thereof. Each Borrower will not suffer or
permit any mechanics' lien claims to be filed or otherwise asserted
against the Borrower's Project and will promptly discharge the same if
any claims for lien or any proceedings for the enforcement thereof are
filed or commenced; provided, however, that such Borrower shall have the
right to contest in good faith and with due diligence the validity of any
such lien or claim upon furnishing to the Title Insurer such security or
indemnity as it may require to induce the Title Insurer to insure against
all such claims, liens or proceedings; and provided further that Lender
will not be required to make any further disbursements of the Loan
proceeds unless (x) all mechanics' lien claims shown by any title
insurance commitments or interim binders or certifications, and all stop
notices delivered to it with respect to the Loan, have been released or
insured against by the Title Insurer or (y) such Borrower shall have
provided Lender with such other security with respect to such claim or
stop notice as may be acceptable to Lender, in its sole discretion. Such
Borrower shall properly post, deliver to Lender and (if legally required)
record notices of nonresponsibility in appropriate form with respect to
any contemplated work of improvement relating to the Borrower's Project.
3.5 Settlement of Mechanics' Lien Claims. If a Borrower shall fail promptly
to discharge any mechanics' lien claim filed or otherwise asserted or to
contest any such claims and give security or indemnity in the manner
provided in Section 3.4 hereof (except for mechanics' lien claims of less
than $10,000 for which no proceedings have commenced which could lead to
foreclosure of the lien), or, having commenced to contest the same, and
having given such security or indemnity, shall thereafter fail to
prosecute such contest vigorously, in good faith and with due diligence
and by appropriate proceeding, or fail to maintain such indemnity or
security so required by the Title Insurer for its full amount, or, upon
adverse conclusion of any such contest, shall fail to cause any judgment
or decree to be satisfied and lien to be promptly released, then, and in
any such event, Lender may, at its election (but shall not be required
to) and in addition to its remedies set forth in Section 8 (i) procure
the release and discharge of any such claim and any judgment or decree
thereon, without inquiring into or investigating the amount, validity or
enforceability of such lien or claim and (ii) effect any settlement or
compromise of the same, or may furnish such security or indemnity to the
Title Insurer, and any amounts so expended by Lender, including premiums
paid or security furnished in connection with the issuance of any surety
company bonds, shall be deemed to constitute disbursements of the Loan
proceeds hereunder (even if the total amount of disbursements would
exceed the face amount of the Note).
3.6 Maintenance, Repair and Restoration of Improvements. Each Borrower shall
(i) promptly repair, restore or rebuild any of such Borrower's
Improvements which may become damaged or be destroyed; and (ii) keep such
Improvements and each portion or component thereof in good condition and
repair, without waste. Notwithstanding (i) in the preceding sentence, in
the event of condemnation of or damage or destruction to a Project for
which the repair or restoration will exceed 75% of the original principal
amount of the applicable Loan, based on reasonable and detailed
estimates, the applicable Borrower may elect to prepay the relevant Loan
in full, provided the applicable Deed of Trust or Mortgage shall remain
in place in order to secure the Guarantee executed by such Borrower.
3.7 Leases and Lease Reports. (i) No Borrower shall enter into any new lease
of space in the Borrower's Project without Lender's prior written
consent, except for leases of premises at Fort Liberty (other than the On
Stage Lease) at market value entered into with bona fide third parties
for a term not to exceed five years on a form previously approved in
writing by Lender; (ii) no Borrower shall modify, amend, waive any
material provision of, terminate or cancel (a) any On Stage Lease, or (b)
any existing leases of space in the applicable Project that would cause
the term of any lease to exceed five years or the rentable payable
thereunder to be other than market rates without the prior written
consent of Lender (and the applicable Borrower shall be required at
Lender's election to use its reasonable best efforts to cause each lessee
to execute estoppel certificates and subordination, non-disturbance and
attornment agreements in form and substance satisfactory to Lender); and
(c) if there are any leases of space in such Project generating or
expected to generate annual rents of $60,000 or more, within fifteen (15)
days following the end of each month, such Borrower shall deliver to
Lender a report showing the status of such leases in the Project as of
the end of such month certified by such Borrower. Such report shall
include information on the amount of space covered by any letters of
intent, leases out for execution, and fully executed leases; the rental
under each lease agreement or proposed lease agreement; the term of each
lease agreement; and a summary of any terms which vary from the standard
form of lease previously approved by Lender.
3.8 Compliance With Laws. Each Borrower shall promptly comply with all
applicable Laws and all requirements of any Governmental Authority having
jurisdiction over such Borrower or the applicable Project, and shall take
all actions necessary to bring such Project into material compliance with
all applicable Laws, including without limitation all Building Laws
(whether now existing or hereafter enacted).
3.9 Alterations. Without the prior written consent of Lender, no Borrower
shall make any material alterations to the Borrower's Project other than
those that both (i) do not affect any structural component, element or
aspect of the Project and (ii) do not cost in any 24 month period in
excess of $50,000 in each case or $100,000 in the aggregate (other than
completion of tenant work required in accordance with the Fort Liberty
Tenant Leases entered into in accordance with the terms of this
Agreement).
3.10 Personal Property. (i) All of a Borrower's Personal Property, fixtures,
furnishings, furniture, attachments, equipment, books and records located
on or used or useful in connection with the Borrower's Project or its
operation, shall always be located at such Project or at the corporate
offices of OSE in Las Vegas, Nevada, or the corporate offices of On Stage
Theaters, Inc. in Florida, and shall also be kept free and clear of all
chattel mortgages, conditional vendor's liens and all other liens,
encumbrances and security interests of any kind whatever, (ii) such
Borrower will be the absolute owner of said Personal Property, fixtures,
attachments, equipment, books and records, except for additional
equipment acquired after the date hereof which a Borrower elects to lease
up to a maximum value of $50,000 per Project, and (iii) such Borrower
shall, from time to time, furnish Lender with evidence of such ownership
satisfactory to Lender, including searches of applicable public records.
Notwithstanding (i) above, Personal Property used in theater productions
may be moved to and used in other Projects or venues owned by On Stage
Theaters, Inc. or OSE, provided such relocated Personal Property shall be
replaced by other personal property of equal or greater value.
Notwithstanding item (ii) above, a Borrower may lease Personal Property
at a Project having an aggregate value in excess of $50,000 if at all
times during the term of such lease such Borrower also owns Personal
Property located at that Project and in good order and repair having a
value at least equal to the value of the Personal Property located at
that Project on the date hereof.
3.11 Inspection by Lender; Appraisals. Each Borrower will cooperate (and will
cause the managing agent to cooperate) with Lender in arranging for
inspections of such Borrower's Project from time to time by Lender and
its agents and representatives. Within thirty (30) days after written
request, such Borrower will cause an Appraisal to be performed and the
report thereof submitted to Lender; provided that one time per 12 month
period per Project Lender shall have the right to order independently an
Appraisal and the cost thereof shall be paid by such Borrower within
twenty (20) days after presentation of written invoice.
3.12 Financial Reporting.
3.12.1 Books and Records. Each Borrower will keep and maintain or will cause to
be kept and maintained on a fiscal year basis, in accordance with GAAP
(or such other accounting basis reasonably acceptable to Lender)
consistently applied, proper and accurate books, records and accounts
reflecting all of the financial affairs of such Borrower and all items of
income and expense in connection with the operation of the applicable
Project or in connection with any services, equipment or furnishings
provided in connection with the operation thereof. Lender shall have the
right from time to time at all times during normal business hours upon
reasonable notice to examine such books, records and accounts at the
office of any Borrower or other person maintaining such books, records
and accounts and to make such copies or extracts thereof as Lender shall
desire. After the occurrence of an Event of Default, the Borrower which
is in default shall pay any costs and expenses incurred by Lender to
examine such Borrower's books and accounting and other records with
respect to the Project, as Lender shall determine to be necessary or
appropriate in the protection of Lender's interest.
3.12.2 Annual Statements. Each Borrower will cause OSE to furnish to Lender,
within thirty (30) business days after Lender's request therefor (but no
sooner than March 31 for the year ending the preceding December 31), with
a complete copy of OSE's most recent consolidated financial statements,
including a consolidating schedule setting forth such Borrower's
financial condition, audited and certified without qualification by a
nationally-recognized independent certified public accountant that is
reasonably acceptable to Lender (in accordance with GAAP except as
disclosed and in accordance with generally accepted auditing standards
consistently applied as in effect as of the end of such fiscal year)
containing (for OSE and, in such consolidating schedule, for such
Borrower) a statement of revenues and expenses, a statement of assets and
liabilities and a statement of OSE's and such Borrower's equity. BDO
Xxxxxxx is acceptable to Lender. Each such statement shall indicate
compliance with any financial covenant relating to OSE and such Borrower
contained in the Loan Documents. Together with such financial statements,
such Borrower shall furnish to Lender an officer's certificate certifying
as of the date thereof (A) that the annual financial statements
accurately represent the results of operations and financial condition of
such entity all in accordance with GAAP (except as disclosed) and in
accordance with generally accepted auditing standards consistently
applied, and (B) whether there exists an event or circumstance which
constitutes, or which upon notice or lapse of time or both would
constitute, an Event of Default under this Agreement, the applicable Note
or any other Loan Document executed and delivered by such Borrower or OSE
and, if such event or circumstance exists, the nature thereof, the period
of time it has existed and the action then being taken to remedy such
event or circumstances.
3.12.3 Quarterly Statements. Each Borrower will furnish Lender quarterly, within
forty-five (45) days following the end of each quarter, with a complete
copy of OSE's Form 10-Q for such quarter as filed with the Securities and
Exchange Commission, including a consolidating schedule setting forth
such Borrower's financial condition, unaudited, containing a statement of
revenues and expenses for the Project. Together with such consolidating
schedule, such Borrower shall furnish to Lender an officer's certificate
certifying as of the date thereof that such consolidating schedule
accurately represents the results of operation of the applicable Project
for such quarter.
3.12.4 Other Information Requested by Lender. Each Borrower shall furnish to
Lender, within thirty (30) days after Lender's request therefor, such
further detailed information with respect to the operation of the
Borrower's Project and the financial affairs of such Borrower as may be
reasonably requested by Lender.
3.13 Documents of Further Assurance. Each Borrower shall, from time to time,
upon Lender's request, execute, deliver, record and furnish such
documents as Lender may reasonably deem necessary or desirable to (i)
perfect and maintain perfected as valid liens upon the Borrower's
Project, the liens granted by such Borrower to Lender under the Deed of
Trust or Mortgage and the collateral assignments and other security
interests under the other Loan Documents as contemplated by this
Agreement, (ii) correct any errors of a typographical nature or
inconsistencies which may be contained in any of the Loan Documents, and
(iii) consummate fully the transactions contemplated under this
Agreement.
3.14 Furnishing Reports. Each Borrower shall provide Lender promptly after
receipt with copies of all material inspections, reports, test results
and other information received by such Borrower from time to time from
its employees, agents, representatives, architects and engineers, which
in any way relate to its Project, any part thereof or the businesses
conducted by such Borrower or any Affiliated Party therein.
3.15 Operation of Project and Zoning. As long as any portion of a Loan remains
outstanding, the applicable Borrower shall maintain and operate its
Project in a first class manner. Each Borrower shall fully and faithfully
perform all of its covenants, agreements and obligations under each of
the leases of space in the Borrower's Project and each contract relating
to operation as a dinner theater, piano bar or restaurant, as applicable.
No Borrower shall initiate or acquiesce in a zoning variation or
reclassification without Lender's consent.
3.16 Intentionally Deleted.
3.17 Furnishing Notices. Each Borrower shall deliver to Lender copies of all
material notices received or given by such Borrower (or its agents or
representatives) in connection with the Borrower's Project.
3.18 Indemnification. Each Borrower shall indemnify, defend and hold harmless
Lender, and its officers, directors, employees, shareholders, advisers,
and agents (collectively, "Indemnified Parties") from and against all
claims, injury, damage, loss, costs (including attorneys' fees and costs)
and liability of any and every kind incurred by Indemnified Parties by
reason of (i) the operation or maintenance of the Borrower's Project or
any construction or business conducted at such Project; (ii) the payment
of any and all brokerage commissions or fees of any kind with respect to
the applicable Loan, and for any and all legal or other fees or expenses
paid or incurred by Lender in connection with any claims for such
commissions or fees; (iii) any and all other action or inaction by, or
matter which is the responsibility of, or is otherwise related to, such
Borrower; (iv) the transfer of the applicable Project to Borrower on the
date hereof, and any failure to obtain any consent or approval required
therefor from any Person; and (v) the breach of any representation or
warranty or failure to fulfill any of such Borrower's obligations under
this Agreement or any other Loan Document. The foregoing indemnity shall
include the cost of all alterations, repairs and replacements to the
applicable Project (including without limitation architectural,
engineering, legal and accounting costs), all fines, fees and penalties,
and all legal and other expenses (including attorneys' fees), incurred in
connection with such Project being in violation of Laws and for the cost
of collection of the sums due under this indemnity, whether or not
Borrower is in possession of such Project. Notwithstanding the preceding,
however, no Borrower shall be obligated to indemnify Indemnified Parties
for injuries to natural persons or damage to tangible property to the
extent caused by the gross negligence or willful misconduct of Lender.
3.19 Corporate Documents; Redemption; Capital Structure. Without the prior
written consent of Lender, no Borrower shall:
(a) Permit or suffer any amendment or modification of its bylaws,
articles, shareholder's agreement or other organizational documents,
and no Borrower shall permit or suffer the admission of any new
shareholder, except as permitted pursuant to Section 6.2;
(b) Redeem any stock of such Borrower;
(c) Issue any shares of common stock of such Borrower except in exchange
for the cash payment of the fair market value of such stock; or
(d) Issue any preferred shares of stock or otherwise change its capital
structure.
3.20 Replacement or Division of Note.
3.20.1 Each Borrower shall, if the applicable Note is mutilated, destroyed,
lost, or stolen, promptly deliver to Lender, in substitution therefor, a
new promissory note containing the same terms and conditions as the
applicable Note with a notation thereon of the unpaid principal accrued
and unpaid interest. In the case of the replacement of a lost Note,
Lender shall indemnify the applicable Borrower for damages arising out of
a claim for payment under the lost Note (as opposed to the replacement
Note).
3.20.2 At Lender's election, each Borrower shall execute two or more promissory
notes replacing the applicable Note and ancillary Loan Documents,
provided the principal balance, and payment terms (in the aggregate)
shall not be changed, provided that different notes may have different
interest rates provided that the aggregate interest on the aggregate
principal balance shall not be in excess of the interest rate provided
under the relevant Note.
3.21 Publicity. During the term of the Loan, Lender may issue or publish
releases or announcements stating that the financing for one or more
Projects is being provided by Lender to one or more Borrowers, and each
Borrower hereby consents thereto.
3.22 Access to Leased Premises and Right to Cure Defaults Under the Ground
Lease and Easement Agreements. In the event of a material default by a
Borrower under a ground lease or easement agreement, each Borrower agrees
that Lender shall have the right (but not the obligation), to cure or
cause the cure of such default and, in the event the cure of such default
by its nature requires that Lender enter upon and/or take possession of
the demised premises, each Borrower hereby agrees that Lender may, and
each Borrower hereby grants Lender the right to, enter in and upon and
take possession of the relevant Real Property to the extent necessary to
cause the cure of such default; provided, however, Lender shall not be
entitled to exercise its rights under this Section until the expiration
of applicable grace periods under such agreements, so long as Lender
shall be afforded an independent cure right and grace period of not less
than 30 days (subject to extension if Lender commences such cure within
such 30 day cure period and diligently prosecutes the same to completion)
following the expiration of applicable grace periods under such
agreements. Any costs incurred by Lender in curing such default shall
constitute additional indebtedness evidenced by the Note for such Real
Property and shall be secured by the Deed of Trust or Mortgage and other
Loan Documents to the same extent and effect as if the terms and
provisions of this Agreement were set forth therein, whether or not the
aggregate of such indebtedness shall exceed the aggregate face amount of
the applicable Note.
3.23 Lender's Attorneys' Fees and Expenses. If at any time prior to repayment
of the Loan in full, Lender employs counsel for advice or other
representation (whether or not any suit has been or shall be filed and
whether or not other legal proceedings have been or shall be instituted
and, if such suit is filed or legal proceedings instituted, through all
administrative, trial, and appellate levels) with respect to a Loan, a
Project or any part thereof, this Agreement or any of the Loan Documents,
including any proposed or actual restructuring of a Loan, or to protect,
collect, lease, sell, take possession of, or liquidate any of such
Project, or to attempt to enforce any security interest or lien on any of
such Project, or to enforce any rights of Lender or any of the relevant
Borrower's obligations hereunder or those of any other person, firm or
entity which may be obligated to Lender by virtue of this Agreement or
any other agreement, instrument or document heretofore or hereafter
delivered to Lender by or for the benefit of such Borrower, or to analyze
and respond to any request for consent or approval made by such Borrower,
then, in any such event, such Borrower shall pay upon demand all of the
reasonable attorneys' fees and expenses arising from such services, and
all expenses, costs and charges relating thereto, and if such Borrower
fails to pay such fees, costs and expenses payment thereof by Lender
shall be deemed to constitute disbursement of additional Loan proceeds
hereunder (even if the total amount of disbursements would exceed the
face amount of the applicable Note) and shall constitute additional
indebtedness of such Borrower to Lender, payable on demand and secured by
the Deed of Trust or Mortgage and other Loan Documents.
3.24 Loan Expenses. Each Borrower agrees to pay all reasonable expenses of or
related to the applicable Loan, including all amounts payable pursuant to
Sections 3.25 and 3.26 of this Agreement, and also including all
recording charges, title insurance charges, costs of surveys, costs for
certified copies of instruments, escrow charges, fees, expenses and
charges of architectural/engineering consultants of Lender, fees and
expenses (including word processing and photocopying expenses) of
Lender's attorneys, and all costs and expenses incurred by Lender in
connection with the determination of whether such Borrower has performed
the obligations undertaken by such Borrower under this Agreement or has
satisfied any conditions precedent to the obligations of Lender under
this Agreement. Each Borrower shall be obligated to pay, and shall pay,
all such expenses, charges, costs and fees regardless of whether the
applicable Loan is disbursed in whole or in part unless such failure to
disburse is due to Lender's wrongful failure to disburse hereunder. Any
and all advances or payments made by Lender under this Agreement from
time to time, or for fees of architectural and engineering consultants
and attorneys' fees and expenses, if any, and all other Loan expenses
shall, as and when advanced or incurred by Lender, constitute additional
indebtedness evidenced by the applicable Note and secured by the Deed of
Trust or Mortgage and the other Loan Documents. Lender acknowledges prior
receipt of $100,000 to be applied against expenses incurred in making the
Loans, and agrees that the total out of pocket expenses incurred by
Lender in the origination of the Loans shall not exceed $150,000.
3.25 Loan Fees. On the Loan Opening Date, Borrowers shall pay to Lender a loan
origination fee and, on behalf of Imperial Credit Capital, LLC, a loan
arrangement fee in the aggregate amount of Seven Hundred Thousand Dollars
($700,000). No additional loan origination fee or loan arrangement fee
shall be payable with respect to the Additional Loans (as defined in
Section 11).
3.26 Deferred Maintenance. All deferred maintenance listed on Schedule 3.26
attached hereto and made a part hereof shall be completed on or before
July 31, 1998.
3.27 No Additional Debt. No Borrower shall, without the prior written consent
of Lender, incur any indebtedness (whether personal or nonrecourse,
secured or unsecured) other than customary trade payables.
3.28 Single Purpose Entity/Separateness. Each Borrower does not own and will
not own any asset or property other than (i) the applicable Project, and
(ii) incidental Personal Property necessary for the ownership or
operation of the applicable Project. Each Borrower will not engage in any
business other than the ownership, management and operation of the
applicable Project and such Borrower will continue to conduct and operate
its business (i.e., renting its Project to On Stage Theaters, Inc. for
the purpose of operating a dinner theater live production show) as
presently conducted and operated. Other than the applicable On Stage
Lease, no Borrower will enter into any contract or agreement with any
Affiliated Parties of Borrower except if such Affiliated Parties have the
requisite skills therefor, and then only upon terms and conditions that
are intrinsically fair and substantially similar to those that would be
available on an arms-length basis with third parties other than any such
party. No Borrower has made and will not make any loans or advances to
any third party (including any Affiliated Parties), and shall not acquire
obligations or securities of its Affiliated Parties. Each Borrower is and
will remain solvent, and each Borrower will pay its debts and liabilities
(including, as applicable, shared personnel and overhead expenses) from
its assets as the same shall become due. Each Borrower will maintain all
of its books, records, financial statements and bank accounts separate
from those of its Affiliated Parties and each Borrower will file its own
tax returns, unless such Borrower is included within the consolidated tax
returns of OSE. Each Borrower shall maintain its books, records,
resolutions and agreements as official records. Each Borrower will be,
and at all times will hold itself out to the public as, a legal entity
separate and distinct from any other entity (including any Affiliated
Parties of such Borrower) shall correct any known misunderstanding
regarding its status as a separate entity, shall conduct business in its
own name, shall not identify itself or any of its Affiliated Parties as a
division or part of the other (except as subsidiaries of OSE) and shall
maintain and utilize a separate telephone number and separate invoices
and checks. Each Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character and in light of its contemplated business operations. Neither
any Borrower nor any Affiliated Parties of any Borrower will seek the
dissolution, winding up, liquidation, consolidation or merger in whole or
in part, of such Borrower. No Borrower will commingle the funds and other
assets of such Borrower with those of any Affiliated Parties or any other
person. Each Borrower has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or
identify its individual assets from those of any Affiliated Parties or
any other person. Each Borrower does not and will not hold itself out to
be responsible for the debts or obligations of any other person.
3.29 Changes in Laws Regarding Taxation. If any law is enacted or adopted or
amended after the date of this Agreement which deducts the outstanding
balance of the applicable Loan from the value of the applicable Project
for the purpose of taxation or which imposes a tax, either directly or
indirectly, on such Loan or Lender's interest in such Project, such
Borrower will pay such tax, with interest and penalties thereon, if any.
In the event Lender is advised by counsel chosen by it that the payment
of such tax or interest and penalties by a Borrower would be unlawful or
taxable to Lender or unenforceable or provide the basis for a defense of
usury, then in any such event, Lender shall have the option, by written
notice of not less than ninety (90) days, to declare the applicable Loan
immediately due and payable.
3.30 ERISA. Each Borrower covenants and agrees that during the Term, unless
Lender shall have previously consented in writing, (a) such Borrower will
take no action that would cause it to become an "employee benefit plan"
as defined in 29 C.F.R. Section 2510.3-101, or "assets of a governmental
plan" subject to regulation under the state statutes, and (b) such
Borrower will not sell, assign or transfer the applicable Project, or any
portion thereof or interest therein, to any transferee that does not
execute and deliver to Lender its written assumption of the obligations
of this covenant. Each Borrower further covenants and agrees to protect,
defend, indemnify and hold Lender harmless from and against all loss,
cost, damage and expense (including without limitation, all attorneys'
fees and excise taxes, costs of correcting any prohibited transaction or
obtaining an appropriate exemption) that Lender may incur as a result of
such Borrower's breach of this covenant. This covenant and indemnity
shall survive the extinguishment of the lien of the Deed of Trust or
Mortgage by foreclosure or action in lieu thereof; furthermore, the
foregoing indemnity shall supersede any limitations on such Borrower's
liability under any of the Loan Documents.
3.31 No Dividends. No Borrower shall make distributions, pay dividends or
repay loans to an Affiliated Party at any time when the Debt Service
Coverage Ratio is less than 2.0:1.
3.32 California Lease Option Exercise. If the Loans have not theretofore been
paid in full, Wild Bills California, Inc. shall exercise the option to
extend the term of the California Lease at least 180 days prior to the
last date such option may be exercised pursuant to the California Lease
and shall provide Lender with a copy of such exercise notice. If such
option has not been exercised by such date, Lender may exercise such
option to extend in the name of the then lessee under the California
Lease.
3.33 On Stage Leases. Concurrently with the execution of this Agreement, each
Borrower shall enter into the On Stage Lease for such Borrower's Project
having a triple net rent of at least 150% of the monthly payments due
under the Loan relating to applicable Projects and shall not amend,
modify or terminate such Lease without Lender's prior written consent,
which may be withheld in Lender's sole and absolute discretion.
3.34 Relocation of Drainage Easement. King Henry's, Inc. shall cooperate with
First American Title Insurance Company in relocating the drainage
easement in favor of the Florida Department of Transportation described
in Book 131, Page 313 of the Official Records of Orange County, Florida
to a location not under any buildings, and shall use its best efforts to
have such easement relocated on or before September 30, 1998.
4. REPRESENTATIONS AND WARRANTIES. To induce Lender to execute this
Agreement and perform the obligations of Lender hereunder, Borrowers
jointly and severally hereby represent and warrant to Lender as follows:
4.1 Organization. Each Borrower is duly organized and in good standing as a
corporation under the laws of the State of Nevada.
4.2 Title. On the Loan Opening Date and thereafter, each Borrower will have
good and marketable title to the Land on which such Borrower's Project is
located (or in the case of the Wild Bills Real Property, a valid
leasehold interest) and fee simple title to the Improvements, subject
only to the Permitted Exceptions.
4.3 No Litigation. Except for claims fully covered by insurance, where the
insurance company is defending such claims and such defense is not being
provided under a reservation of rights, and except as disclosed in
writing to Lender prior to the date hereof, there is no pending
litigation (i.e., litigation which has been filed and served) or
unsatisfied judgment entered of record, or to Borrowers' knowledge, any
filed but unserved litigation or threatened litigation, against Borrowers
or any Project. No litigation or proceedings are pending or to Borrowers'
knowledge are threatened, against any Affiliated Party (i) which might
affect the validity or priority of the lien of the Deed of Trust or
Mortgage, (ii) which might affect the ability of any Borrower or any
Indemnitor to perform their respective obligations pursuant to and as
contemplated by the terms and provisions of this Agreement and the other
Loan Documents, or (iii) which could materially affect the operations or
financial condition of any Project, Borrower, or any Affiliated Party.
4.4 No Breach. No Borrower is in breach of any obligation, nor has any breach
of any obligation of any Borrower been alleged (i) which might affect the
validity or priority of the lien of the Deed of Trust or Mortgage, (ii)
which might affect the ability of any Borrower or any Indemnitor to
perform their respective obligations pursuant to and as contemplated by
the terms and provisions of this Agreement and the other Loan Documents,
or (iii) which could materially affect the operations or financial
condition of any Project, Borrower, or any Affiliated Party.
4.5 Due Authorization. The execution and delivery of the Loan Documents and
all other documents executed or delivered by or on behalf of each
Borrower and pertaining to the Loan have been duly authorized or approved
by such Borrower and when executed and delivered by such Borrower or when
caused to be executed and delivered on behalf of such Borrower, will
constitute the legal, valid and binding obligations of such Borrower,
enforceable in accordance with their respective terms except as limited
by bankruptcy, insolvency, or other laws of general application relating
to the enforcement of creditor's rights, and the payment or performance
thereof will be subject to no offsets, claims or defenses of any kind or
nature whatsoever.
4.6 Breach of Laws or Agreements. The execution, delivery and performance of
this Agreement and the other Loan Documents have not constituted (and
will not, upon the giving of notice or lapse of time or both, constitute)
a breach or default under any other agreement to which any Borrower or
Indemnitor is a party or may be bound or affected, or a violation of any
Law which may affect any Project, any part thereof, any interest therein,
or the use thereof. No notice to, approval or consent from any party is
required in connection with the execution and delivery by any Borrower or
any Indemnitor of the Loan Documents or in connection with the
performance or consummation of any of the transactions contemplated
thereby, or if required, such consent or approval has been obtained.
4.7 Leases. Neither any Borrower or its respective agents have entered into
any leases or other arrangements for occupancy of space within the
applicable Project, except for the Fort Liberty Tenant Leases shown on
Exhibit D. Each lease listed on Exhibit D is in full force and effect,
and there is no default, breach or violation existing thereunder by any
party thereto and no event has occurred that, with the passage of time or
the giving of notice, or both, would constitute a default, breach,
violation by and party thereunder.
4.8 Condemnation. (i) No condemnation of any portion of any Project, (ii) no
condemnation or relocation of any roadways abutting any Project, and
(iii) no denial of access to any Project from any point of access to such
Project, has commenced or, to such Borrower's knowledge, is contemplated
by any Governmental Authority.
4.9 Condition of Improvements. Except as disclosed to Lender in writing prior
to the date of this Agreement, to each Borrower's knowledge, the
foundations and structure of such Borrower's Improvements are
structurally sound and the various mechanical systems have adequate
capacities and are in good working condition. Such Improvements were
built in substantial compliance with applicable plans and specifications
furnished to the Lender's engineering consultant, and such Improvements
are in full compliance with all applicable Building Laws. Certificates of
occupancy with respect to such Improvements and each portion thereof, and
any other certificates which may be required to evidence compliance with
building codes and permits and approval for full occupancy and use of
such Improvements and all installations therein have been issued by all
appropriate authorities. Each Borrower has no knowledge of required
capital expenditures or deferred maintenance other than those that would
be normally expected for a building of similar age and type. No Borrower
has received any notice of violation at any Project of any Building Law.
4.10 Mechanic's Liens. No mechanic's liens claims are currently pending or to
any Borrower's knowledge threatened against any Borrower's Project.
4.11 Information Correct. All financial statements furnished to Lender by any
Borrower or any Affiliated Party fairly present the financial condition
of such Persons and were prepared in accordance with a method of
preparation approved by Lender, consistently applied, and all other
information previously furnished by any Borrower or any Affiliated Party
to Lender in connection with the Loan or the financial capacity of
Borrowers and/or Indemnitor are true, complete and correct in all
respects except as otherwise disclosed to Lender in writing and do not
fail to state any material fact necessary to make the statements made not
misleading. Neither any Borrower nor Indemnitor has misstated or failed
to disclose to Lender any material fact relating to: (i) the condition,
use or operation of any Project, (ii) the status or any material
condition of any tenant or lease at any Project known to it, (iii) any
Borrower, (iv) Indemnitor; or (v) the litigation disclosure provided by
any Borrower and Indemnitor, except as disclosed in writing to Lender
prior to the date hereof. All projections of economic performance of the
Projects have been prepared by Borrowers based on information believed
accurate from the current owners of such Projects and are not
intentionally misleading.
4.12 Solvency. Neither any Borrower nor Indemnitor is (a) currently insolvent
on a balance sheet basis, or (b) currently unable to pay its debts as
they come due; and no bankruptcy or receivership proceedings are
contemplated or pending as to either of them.
4.13 Zoning. The use of each Project (including contemplated accessory uses)
does not violate (i) any Law (including subdivision, zoning, building,
environmental protection and wetlands protection Laws), or (ii) any
codes, covenants or restrictions of record, or any agreement affecting
such Project or any part thereof. Without limiting the generality of the
foregoing, all consents, licenses and permits and all other
authorizations or approvals (collectively, "Governmental Approvals")
required for the operation of such Project as a dinner theater-live
production show (and the balance of the Fort Liberty Project as a retail
center) (collectively, the "Licenses") have been obtained and are in full
force and effect (including without limitation any applicable liquor
license.
4.14 Utilities. Each Project has adequate water, gas and electrical supply,
storm and sanitary sewerage facilities, other required public utilities,
fire and police protection, and means of appropriate access between such
Project and public highways.
4.15 Brokerage Fees. Except as previously disclosed and agreed to by Lender in
writing, and/or to Imperial Capital, LLC no brokerage fees or commissions
are payable by or to any person in connection with this Agreement or any
Loan to be disbursed hereunder.
4.16 Encroachments. Except as disclosed in any Survey, no building or other
improvement in any Project encroaches upon any building line, setback
line, side yard line, or any recorded or visible easement (or other
easement of which any Borrower has knowledge of with respect to such
Project) and no neighboring buildings or improvements encroach upon the
Land related to such Project.
4.17 Separate Parcel. Each Project's Real Property is taxed separately without
regard to any other property and for all purposes such Real Property may
be mortgaged, conveyed, and otherwise dealt with as an independent
parcel.
4.18 No Default. No Default or Event of Default has occurred and is
continuing.
4.19 FIRPTA. No Borrower is a "foreign person" within the meaning of Sections
1445 or 7701 of the Internal Revenue Code.
4.20 RICO. No Borrower has been charged with nor, to its knowledge, is it
under investigation for, possible violations of the Racketeer Influenced
and Corrupt Organizations Act ("RICO"), the Continuing Criminal
Enterprise Act ("CCE"), the Controlled Substance Act of 1978, or similar
laws providing for the possible forfeiture of any of its respective
assets or properties.
4.21 No Casualty. No part of any Project has been damaged by fire or other
casualty except as disclosed in writing to Lender.
4.22 Liabilities. No Borrower has liability, contingent or otherwise, which is
not disclosed in the financial statements provided to Lender.
4.23 Truth of Recitals. All statements set forth in the Recitals are true and
correct.
4.24 No Breach. Neither the execution and delivery of the Loan Documents, each
Borrower's performance thereunder, the recordation of any of the
Mortgages or Deed of Trust, nor the exercise of any remedies by Lender,
will adversely affect any Borrower's rights under any franchise agreement
or any leases.
4.25 Liquor License. A validly issued liquor license is in effect for the each
Project's operations, allowing on-site consumption of all lawful
alcoholic beverages. Each license is in the name of the applicable
Borrower (or leased by the applicable Borrower from the former owner of
the Projects) and all required fees have been paid in connection
therewith.
4.26 California Ground Leases.
4.26.1 The California Lease or a memorandum thereof has been duly recorded, the
California Lease permits the interest of the ground lessee thereunder to
be encumbered by the Deed of Trust, and there has not been a material
change in the terms of the California Lease since its recordation.
4.26.2 Except for the Permitted Exceptions, Wild Bills California, Inc.'s
interest in the California Lease is not subject to any liens or
encumbrances superior to, or of equal priority with, the Deed of Trust.
4.26.3 Wild Bills California, Inc.'s interest in the California Lease is
assignable to Lender upon notice to, but without the consent of, Ground
Lessor (or, if any such consent is required, it has been obtained on or
prior to the date hereof) and it is further assignable by Lender and its
successors and assigns upon notice to, but without a need to obtain the
consent of, Ground Lessor.
4.26.4 The California Lease is in full force and effect and no default has
occurred under the California Lease and no event has occurred and there
is no existing condition which, but for the passage of time or the giving
of notice, would result in a default under the terms of the California
Lease.
4.26.5 The California Lease requires Ground Lessor to give notice of any default
by Wild Bills California, Inc. to any holder of a lien against or an
assignment of the California Lease, notice of which has been served upon
the lessor (each such party being referred to herein as a "Leasehold
Mortgagee"); or the California Lease provides that notice of termination
given under the California Lease is not effective against any Leasehold
Mortgagee unless a copy of the notice has been delivered to such
Leasehold Mortgagee in the manner described in the California Lease.
4.26.6 The California Lease permits a Leasehold Mortgagee an opportunity
(including, where necessary, sufficient time to gain possession of the
interest of Wild Bills California, Inc. under the California Lease) to
cure any default under the California Lease, which is curable after the
receipt of notice of any the default before Ground Lessor may terminate
the California Lease.
4.26.7 The California Lease has a term which, with options to renew, extends not
less than 10 years beyond the Maturity Date.
4.26.8 The California Lease requires Ground Lessor to enter into a new lease
with a Leasehold Mortgagee upon termination of the California Lease for
any reason, including rejection of the California Lease in a bankruptcy
proceeding.
4.26.9 Under the terms of the California Lease any insurance proceeds related to
Wild Bills California, Inc.'s Project will be applied either to the
repair or restoration of all or part of such Project, or to the payment
of the outstanding principal balance of the applicable Loan together with
any accrued interest thereon.
4.26.10 The California Lease does not impose any material restrictions on
subletting of portions of Wild Bills California, Inc.'s Improvements.
5. CASUALTY AND CONDEMNATION.
5.1 Borrower's Obligation to Restore. If any Project shall be damaged or
destroyed, in whole or in part, by fire or other casualty (a
"Casualty"), the relevant Borrower shall give prompt notice thereof to
Lender. Following the occurrence of a Casualty, such Borrower,
regardless of whether insurance proceeds are available, shall promptly
proceed to restore, repair, replace or rebuild the same to be of at
least equal value and of substantially the same character as prior to
such damage or destruction, all to be effected in accordance with
applicable law. The expenses incurred by Lender in the adjustment and
collection of insurance proceeds shall become part of the amounts owing
in connection with the respective Loan and shall be secured by the Deed
of Trust or Mortgage and shall be reimbursed to Lender upon demand.
5.2 Insured Losses; Condemnation Proceeds. In case of loss or damages
covered by any of the Policies or a condemnation or taking under power
of eminent domain of any portion of or interest in the Project, the
following provisions shall apply:
5.2.1 In the event of a Casualty or condemnation proceeding that does not
exceed twenty-five percent (25%) of the original principal amount of
the Note signed by Wild Bills California, Inc., twenty percent (20%) of
the original principal amount of the Notes signed by other Borrowers,
the applicable Borrower may settle and adjust any claim without the
consent of Lender and agree with the insurance company or companies on
the amount to be paid upon the loss; provided that such adjustment is
carried out in a competent and timely manner. In such case, such
Borrower is hereby authorized to collect and receipt for any such
condemnation or insurance proceeds.
5.2.2 In the event a Casualty or condemnation proceeding shall exceed
twenty-five percent (25%) of the original principal amount of the Note
signed by Wild Bills California, Inc., twenty percent (20%) of the
original principal amount of the Notes signed by other Borrowers, then
and in that event, Lender may settle and adjust any claim without the
consent of the applicable Borrower and agree with the insurance company
or companies on the amount to be paid on the loss and the proceeds of
any such policy shall be due and payable solely to Lender and held in
escrow by Lender in accordance with the terms of this Agreement.
5.2.3 In the event of a Casualty or condemnation proceeding where the loss is
in an aggregate amount less than thirty-three and one-third (33 1/3%)
of the original principal balance of the Note signed by Wild Bills
California, Inc. and twenty-five percent (25%) of the original
principal balance of the other Notes, and if, in the reasonable
judgment of Lender, the applicable Project can be restored within six
(6) months and prior to maturity of such Note to an economic unit not
less valuable (including an assessment of the impact of the termination
of any Leases due to such Casualty or condemnation) and not less useful
than the same was prior to the Casualty or condemnation, and after such
restoration will adequately secure the outstanding balance of the
applicable Loan, and if the applicable Borrower has deposited with
Lender in an amount equal to the difference between the total cost of
restoration/rebuild and net dollar proceeds actually received by
Lender, and if no Event of Default (as hereinafter defined) shall have
occurred and be then continuing, the proceeds (after reimbursement of
any expenses incurred by Lender and after application of any funds
deposited by such Borrower with Lender) shall be applied to reimburse
the applicable Borrower for the cost of restoring, repairing, replacing
or rebuilding such Project or part thereof subject to the Casualty, in
the manner set forth below. Each Borrower hereby covenants and agrees
to commence and diligently to prosecute such restoring, repairing,
replacing or rebuilding; provided always, that such Borrower shall pay
all costs (and if required by Lender, such Borrower shall deposit the
total thereof with Lender in advance), as estimated by Lender, of
completing such restoration, repair, replacement or rebuilding in
excess of the net proceeds made available pursuant to the terms hereof.
5.2.4 Except as provided above or in Section 3.6, the proceeds collected upon
any Casualty or condemnation shall, at the option of Lender in its sole
discretion, be applied to the payment of the applicable Loan or applied
to reimburse such Borrower for the cost of restoring, repairing,
replacing or rebuilding such Project or part thereof subject to the
Casualty or condemnation, in the manner set forth below. Any such
application to the relevant Loan shall be without any prepayment
consideration except that if an Event of Default, or an event which
with notice and/or the passage of time would constitute an Event of
Default, has occurred then the such Borrower shall pay to Lender any
prepayment penalty provided for in the relevant Note. Any such
application to the relevant Loan shall (A) be applied to those payments
of principal and interest last due under such Note but shall not
postpone any payments otherwise required pursuant to such Note other
than such last due payments and (B) cause such Note to be re-amortized
in accordance with its terms and conditions.
5.2.5 In the event a Borrower is entitled to reimbursement out of insurance
or condemnation proceeds held by Lender, such proceeds shall be
disbursed from time to time upon Lender being furnished with (i)
evidence satisfactory to it of the estimated cost of completion of the
restoration, repair, replacement and rebuilding, (ii) funds or, at
Lender's option, assurances satisfactory to Lender that such funds are
available, sufficient in addition to the insurance or condemnation
proceeds to complete the proposed restoration, repair, replacement and
rebuilding, and (iii) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, bonds,
plats of survey and such other evidences of cost, payment and
performance as Lender may reasonably require and approve. Lender may,
in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and
approved by Lender prior to commencement of work. No payment made prior
to the final completion of the restoration, repair, replacement and
rebuilding shall exceed ninety percent (90%) of the value of the work
performed from time to time; funds other than proceeds of insurance or
condemnation shall be disbursed prior to disbursement of such proceeds;
and at all times, the undisbursed balance of such proceeds remaining in
the hands of Lender, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Lender by or on behalf of
such Borrower for that purpose, shall be at least sufficient in the
reasonable judgment of Lender to pay for the cost of completion of the
restoration, repair, replacement or rebuilding, free and clear of all
liens or claims for lien. Any surplus which may remain out of insurance
or condemnation proceeds held by Lender after payment of such costs of
restoration, repair, replacement or rebuilding shall be paid to any
party entitled thereto.
6. ASSIGNMENTS.
6.1 Lender's Right to Assign. Lender shall have the right to assign,
transfer, sell, negotiate, pledge or otherwise hypothecate this
Agreement and any of its rights and security hereunder, including any
Note, Deed of Trust, Mortgage, and any other Loan Documents, provided
Lender shall not assign any of the Notes, Deed of Trust, Mortgage or
other Loan Documents to an entity known to Lender to be in the on-stage
entertainment business (but such proviso shall not apply to any
participation or assignment of part of any such Loan). Each Borrower
hereby agrees that all of the rights and remedies of Lender in
connection with the interest so assigned shall be enforceable against a
Borrower by such assignee with the same force and effect and to the
same extent as the same would have been enforceable by Lender but for
such assignment. Each Borrower agrees that Lender shall have the right
to sell participations in the applicable Loan or to include such Note
in a securitized pool of indebtedness without the consent of such
Borrower.
6.2 Transfer or Encumbrance of the Project.
6.2.1 Prohibition on Transfer or Encumbrance. Each Borrower acknowledges that
Lender has examined and relied on the creditworthiness and experience
of such Borrower in owning and operating properties such as the
applicable Project in agreeing to make such Loan, and that Lender will
continue to rely on such Borrower's ownership of such Project as a
means of maintaining the value of such Project as security for
repayment of such Loan. Each Borrower acknowledges that Lender has a
valid interest in maintaining the value of such Project so as to ensure
that, should such Borrower default in the repayment of the such Loan,
Lender can recover such Loan by a sale of the relevant Project. No
Borrower shall, without the prior written consent of Lender, sell,
assign, convey, alienate, mortgage, encumber, pledge or otherwise
transfer any Project, the California Lease or any part or component of
either of them, or permit any Project or any part or component thereof
to be sold, conveyed, alienated, mortgaged, encumbered, pledged or
otherwise transferred (or, in the case of a leasehold interest, permit
the relevant lease to expire or otherwise terminate). No assignment,
sale, conveyance or other transfer of a Project or the California
Lease, or any portion or component of either of them, shall release any
Borrower from its obligations under the Loan Documents.
6.2.2 Transfer Defined. A sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer within the meaning of this Section 6.2
shall be deemed to include (i) an installment sales agreement wherein a
Borrower agrees to sell a Project or any part thereof for a price to be
paid in installments; (ii) an agreement by Wild Bills California, Inc.
to subordinate its interest in the California Lease, except to the
Permitted Exceptions, (iii) except for the relevant On Stage Lease, an
agreement by a Borrower leasing all or a substantial part of any
Project for other than actual occupancy by a space tenant thereunder or
a sale, assignment or other transfer of, or the grant of a security
interest in, a Borrower's right, title and interest in and to any
ground lease or any leases or rents at such Project; (iv) if a Borrower
or any member of a Borrower is a corporation, the voluntary or
involuntary sale, conveyance or transfer of such corporation's stock
(or the stock of any corporation directly or indirectly controlling
such corporation by operation of law or otherwise) or the creation or
issuance of new stock in one or a series of transactions by which an
aggregate of more than 10% of such corporation's stock shall be vested
in a party or parties who are not now stockholders or any change in the
control of such corporation; (v) if a Borrower or any member of a
Borrower is a limited or general partnership, joint venture or limited
liability company, the change, removal, resignation or addition of a
general partner, managing partner, limited partner, joint venturer or
member or the transfer of the partnership interest of any general
partner, managing partner or limited partner or the transfer of the
interest of any joint venturer or member; and (vi) any pledge,
hypothecation, assignment, transfer or other encumbrance of any
ownership interest in a Borrower.
6.2.3 No Showing of Impairment Required. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk
of default hereunder in order to declare a Loan immediately due and
payable upon the applicable Borrower's sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of such Project or the
California Lease without Lender's consent. This provision shall apply
to every sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of a Project or the California Lease regardless of whether
voluntary or not, or whether or not Lender has consented to any
previous sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer of such Project or the California Lease.
6.2.4 No Waiver. Lender's consent to one sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of a Project or the
California Lease shall not be deemed to be a waiver of Lender's right
to require such consent to any future occurrence of same. Any sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of
the Project or the California Lease made in contravention of this
paragraph shall be null and void and of no force and effect.
6.2.5 Reimbursement of Lender's Expenses. Each Borrower agrees to bear and
shall pay or reimburse Lender on demand for all reasonable expenses
(including, without limitation, reasonable attorneys' fees and
disbursements, title search costs and title insurance endorsement
premiums) incurred by Lender in connection with the review, approval
and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
6.3 Successors and Assigns. Subject to the foregoing restrictions on
transfer and assignment contained in this Article 6, this Agreement
shall inure to the benefit of and shall be binding on the parties
hereto and their respective successors and assigns.
7. EVENTS OF DEFAULT.
7.1 The occurrence of any one or more of the following shall constitute an
"Event of Default," as such term is used herein:
(a) If any Borrower fails to pay principal or interest under a Note
and such failure shall continue for ten (10) days after the due
date therefor, without any requirement to give such Borrower
notice of such failure;
(b) If any Borrower defaults in the performance of any of its other
covenants, agreements and obligations under this Agreement
involving the payment of money and such failure shall continue for
ten (10) days after the due date therefor, without and requirement
to give such Borrower notice of such failure;
(c) If any Borrower defaults in the performance of any of its
non-monetary covenants, agreements and obligations under this
Agreement and fails to cure such default within thirty (30) days
after written notice thereof from Lender; provided, however, that
if such default can not be cured within such thirty (30) day
period but is reasonably susceptible of cure within thirty (30)
days after the end of such thirty (30) day period, then so long as
such Borrower promptly commences cure following notice of such
default from Lender and thereafter diligently and continuously
pursues such cure to completion, the cure period shall be extended
for an additional thirty (30) days, within which such Borrower may
complete such cure;
(d) If at any time or times hereafter any representation or warranty
(including the representations and warranties of any Borrower or
Indemnitor set forth in any Loan Document), or any statement,
report or certificate furnished to Lender in connection with a
Loan which was certified by a Borrower is not true and correct in
any material respect as of the time when made;
(e) If any petition is filed by or against any Borrower or any
Affiliated Party under the Federal Bankruptcy Code or any similar
state or federal Law, whether now or hereafter existing (and, in
the case of involuntary proceedings, failure to cause the same to
be vacated, stayed or set aside within ninety (90) days after
filing);
(f) If any assignment, pledge, encumbrance, transfer, hypothecation or
other disposition is made in violation of Section 6.2 of this
Agreement;
(g) If any Borrower or Indemnitor shall fail to pay any debt in excess
of $20,000 owed by it or is in default under any agreement with
Lender and such failure or default continues after any applicable
grace period specified in the instrument or agreement relating
thereto;
(h) If Wild Bill's California, Inc. materially defaults under the
California Lease or if the California Lease ceases to be in full
force and effect;
(i) If a default occurs under any of the Loan Documents and continues
beyond the applicable grace period, if any, contained therein;
(j) If any Borrower ceases to carry on its business (i.e., renting its
Project to On Stage Theaters, Inc. for the purpose of operating a
dinner theater live production show) as presently conducted (other
than during periods of repair of casualty loss or reconfiguration
due to condemnation);
(k) Any Project has a fair market value as shown by an Appraisal
(which for the purpose of this item (k) shall include the going
concern value of the business conducted by On Stage Theaters,
Inc.) less than 1.25 times the principal balance of the applicable
Loan at any time, and the Borrower fails to post, within thirty
(30) days after Lender notifies any Borrower or OSE of such
shortfall in value, additional collateral that is satisfactory to
Lender in all respects and the value of which, when added to the
value of such Project, will be sufficient in Lender's judgment to
equal or exceed 1.25 times the principal balance of such Loan.
(l) If the Debt Service Coverage Ratio is less than or equal to the
following ratios:
Calendar Quarter Ending Date Debt Service Coverage Ratio
---------------------------- ---------------------------
June 30, 1998 1.50:1
September 30, 1998 1.50:1
December 31, 1998 1.75:1
March 31, 1999 1.75:1
June 30, 1998 and all
subsequent quarters 2.00:1
(m) If there is a material default by OSE past any express cure period
under the Warrant Agreement.
8. REMEDIES.
8.1 Remedies Conferred Upon Lender. Upon the occurrence of any Event of
Default and until Lender commences any remedy (including those
described in Subparagraphs (a), (b) or (c) below), Lender shall have
the right (but not the obligation) to pursue any one or more of the
following remedies concurrently or successively, it being the intent
hereof that all such remedies shall be cumulative and that no such
remedy shall be to the exclusion of any other:
(a) Declare all Notes to be immediately due and payable;
(b) Use and apply any monies deposited by a Borrower with Lender or
any monies in which Lender has a security interest, including
amounts in the Impound Account, regardless of the purpose for
which the same was deposited, to cure any such default or to apply
on account of any indebtedness under this Agreement which is due
and owing to Lender; and
(c) Exercise or pursue any other right or remedy permitted under this
Agreement or any of the Loan Documents or conferred upon Lender by
operation of Law.
Lender shall accept complete cure of any Event of Default if such
complete cure is accomplished prior to Lender commencing any
remedy (including without limitation any of the non-exclusive
remedies described above).
8.2 Non-Waiver of Remedies. No waiver of any breach or default hereunder
shall constitute or be construed as a waiver by Lender of any
subsequent breach or default or of any breach or default of any other
provision of this Agreement.
8.3 Cash Collateral Account. Upon the occurrence of an Event of Default,
the defaulting Borrower shall deposit all revenues from the operation
of the applicable Project (including all businesses conducted by such
Borrower or any Affiliated Party therein) into an account in the name
of Lender or such Borrower (as elected by Lender) and pledged to Lender
in the manner required by Lender as additional security for the
applicable Loan ("Cash Collateral Account"). Lender shall not pay
interest on any amounts held on deposit in the Cash Collateral Account,
unless required to do so under applicable law. Such Borrower shall
execute such documents as Lender, in its sole discretion, deems
necessary to perfect its interest in the Cash Collateral Account.
9. ENVIRONMENTAL PROVISIONS.
9.1 Hazardous Substances. Each Borrower hereby represents and warrants to
Lender that, to such Borrower's knowledge: (a) the Borrower's Project
is not in direct or indirect violation of any local, state, federal or
other governmental authority, statute, ordinance, code, order, decree,
law, rule or regulation pertaining to or imposing liability or
standards of conduct concerning environmental regulation, contamination
or clean-up including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended
("CERCLA"), the Resource Conservation and Recovery Act, as amended
("RCRA"), the Emergency Planning and Community Right-to-Know Act of
1986, as amended, the Hazardous Substances Transportation Act, as
amended, the Solid Waste Disposal Act, as amended, the Clean Water Act,
as amended, the Clean Air Act, as amended, the Toxic Substance Control
Act, as amended, the Safe Drinking Water Act, as amended, the
Occupational Safety and Health Act, as amended, any state super-lien
and environmental clean-up statutes and all regulations adopted in
respect to the foregoing laws (collectively, "Environmental Laws"); (b)
such Project is not subject to any private or governmental lien or
judicial or administrative notice or action or inquiry, investigation
or claim relating to hazardous and/or toxic, dangerous and/or
regulated, substances, wastes, materials, raw materials which include
hazardous constituents, pollutants or contaminants including without
limitation, petroleum, tremolite, anthlophylie, actinolite or
polychlorinated biphenyls and any other substances or materials which
are included under or regulated by Environmental Laws or which are
considered by scientific opinion to be otherwise dangerous in terms of
the health, safety and welfare of humans (collectively, "Hazardous
Substances"); (c) except for lawfully used cleaning fluids and/or
copier toner or other substances typically used in offices or non-dry
cleaning retail establishments ("Permitted Substances"), no Hazardous
Substances are or have been (including the period prior to such
Borrower's acquisition of such Project) discharged, generated, treated,
disposed of or stored on, incorporated in, or removed or transported
from such Project other than in compliance with all Environmental Laws;
(d) no Hazardous Substances are present in, on or under any nearby real
property which could migrate to or otherwise affect such Project; and
(e) no underground storage tanks exist on any of such Project. So long
as such Borrower owns or is in possession of such Project, such
Borrower (i) shall keep or cause such Project to be kept free from
Hazardous Substances (except for Permitted Substances) and in
compliance with all Environmental Laws, (ii) shall promptly notify
Lender if such Borrower shall become aware of any Hazardous Substances
(except for Permitted Substances) on or near such Project and/or if
such Borrower shall become aware that such Project is in direct or
indirect violation of any Environmental Laws and/or if such Borrower
shall become aware of any condition on or near such Project which shall
pose a threat to the health, safety or welfare of humans, (iii) such
Borrower shall remove such Hazardous Substances (except for Permitted
Substances) and/or cure such violations and/or remove such threats, as
applicable, as required by law (or as shall be required by Lender in
the case of removal which is not required by law, but in response to
the opinion of a licensed hydrogeologist, licensed environmental
engineer or other qualified consultant engaged by Lender ("Lender's
Consultant")), promptly after such Borrower becomes aware of same, at
such Borrower's sole expense and (iv) shall comply with all of the
recommendations contained in the environmental report which was
delivered to Lender in connection with the origination of the
applicable Loan. Nothing herein shall prevent a Borrower from
recovering such expenses from any other party that may be liable for
such removal or cure. The obligations and liabilities of a Borrower
under this Section 9.1 shall survive any termination, satisfaction, or
assignment of the Deed of Trust or Mortgage and the exercise by Lender
of any of its rights or remedies thereunder, including, without
limitation, the acquisition of a Project by foreclosure or a conveyance
in lieu of foreclosure.
9.2 Asbestos. Each Borrower represents and warrants that, to such
Borrower's knowledge, no asbestos or any substance or material
containing asbestos ("Asbestos") is located on any Project except as
may have been disclosed in an environmental report delivered to Lender
prior to the date of this Agreement. No Borrower shall install in a
Project, nor permit to be installed in a Project, Asbestos and shall
remove any Asbestos promptly upon discovery to the satisfaction of
Lender, at such Borrower's sole expense. Each Borrower shall in all
instances comply with, and ensure compliance by all occupants of the
applicable Project with, all applicable federal, state and local laws,
ordinances, rules and regulations with respect to Asbestos, and shall
keep such Project free and clear of any liens imposed pursuant to such
laws, ordinances, rules or regulations. In the event that a Borrower
receives any notice or advice from any governmental agency or any
source whatsoever with respect to Asbestos on, affecting or installed
on the applicable Project, such Borrower shall immediately notify
Lender. The obligations and liabilities of each Borrower under this
Section 9.2 shall survive any termination, satisfaction, or assignment
of the Deed of Trust or Mortgage and the exercise by Lender of any of
its rights or remedies thereunder, including but not limited to, the
acquisition of a Project by foreclosure or a conveyance in lieu of
foreclosure.
9.3 Environmental Remediation.
9.3.1 Borrower's Obligation to Perform Remedial Work. If any investigation,
site monitoring, containment, cleanup, removal, restoration or other
remedial work of any kind or nature (collectively, "Remedial Work") is
required on a Project pursuant to an order or directive of any
Governmental Authority or under any applicable Environmental Law, or in
Lender's opinion, based upon recommendations of a qualified
environmental engineer reasonably acceptable to Lender, after notice to
the applicable Borrower, is reasonably necessary to prevent future
liability under any applicable Environmental Law, because of or in
connection with the current or future presence, suspected presence,
release, or suspected release of a Hazardous Substance into the air,
soil, ground water, surface water, or soil vapor on, under or from such
Project or any portion thereof, such Borrower shall (at such Borrower's
sole cost and expense), or shall cause such responsible third parties
to promptly commence and diligently prosecute to completion (or cause
to be commenced and diligently prosecuted to completion) all such
Remedial Work. In all events, such Remedial Work shall be commenced
within thirty (30) days after any demand therefor by Lender or such
shorter period as may be required under any applicable Environmental
Law; however, such Borrower shall not be required to commence such
Remedial Work within the above specified time periods if prevented from
doing so by any Governmental Authority, or if commencing such Remedial
Work within such time periods would result in such Borrower or such
Remedial Work violating any Environmental Law. All such Remedial Work
shall be commenced within thirty (30) days after any demand therefor by
Lender or such shorter period as may be required under any applicable
Environmental Law; however, such Borrower shall not be required to
commence such Remedial Work within the above-specified time periods if
(x) prevented from doing so by any Governmental Authority, (y)
commencing such Remedial Work within such time periods would result in
such Borrower or such Remedial Work violating any Environmental Law or
(z) such Borrower is contesting in good faith and by appropriate
proceedings the applicability of the relevant Environmental Laws;
provided that such contest shall not (i) create or materially increase
the risk of any civil or criminal liability of any kind whatsoever on
the part of Lender or (ii) permit or materially increase the risk of
the spread, release or suspected release of any Hazardous Substance
into the air, soil, ground water, surface water, or soil vapor on,
under or emanating from such Project or any portion thereof during the
pendency of such contest.
9.3.2 Contractors; Reimbursement of Lender's Costs and Expenses. All Remedial
Work shall be performed by contractors, and under the supervision of a
consulting engineer, each approved in advance by Lender (which approval
shall not be unreasonably withheld or delayed). All costs and expenses
reasonably incurred in connection with such Remedial Work and Lender's
reasonable monitoring or review of such Remedial Work (including
reasonable attorneys' fees and disbursements, but excluding internal
overhead, administrative and similar costs of Lender) shall be paid by
the applicable Borrower. If such Borrower does not timely commence and
diligently prosecute to completion the Remedial Work, then Lender may
(but shall not be obligated to) cause such Remedial Work to be
performed. Such Borrower agrees to bear and shall pay or reimburse
Lender on demand for all Advances and expenses (including reasonable
attorneys' fees and disbursements, but excluding internal overhead,
administrative and similar costs of Lender) reasonably relating to or
incurred by Lender in connection with monitoring, reviewing or
performing any such Remedial Work.
9.3.3 No Impairment of Lender's Security. Except with Lender's prior written
consent, no Borrower shall commence any Remedial Work or enter into any
settlement agreement, consent decree or other compromise relating to
any Hazardous Substances or Environmental Laws which might, in Lender's
sole judgment, impair the value of Lender's security hereunder to a
material degree. Lender's prior written consent shall not be required,
however, if the presence or threatened presence of Hazardous Substances
on, under or about a Project poses an immediate threat to the health,
safety or welfare of any person or is of such a nature that an
immediate remedial response is necessary, or if Lender fails to respond
to any notification by a Borrower hereunder within twenty (20) Business
Days from the date of such notification. In such events, such Borrower
shall notify Lender as soon as practicable of any action taken.
9.4 Inspection.
9.4.1 Lender's Right to Inspect. Upon reasonable prior notice, Lender and its
agents, representatives and employees shall have the right at all
reasonable times and during normal business hours, except to the extent
such access is limited by applicable Law, to enter upon and inspect all
or any portion of any Project, provided that such inspections shall not
unreasonably interfere with the operation thereof. At its sole expense,
except as provided in Section 9.4.2. hereof, (y) Lender may retain an
environmental consultant to conduct and prepare reports of such
inspections and (z) the applicable Borrower shall be given a reasonable
opportunity to review any and all reports, data and other documents or
materials reviewed or prepared by the consultant, and to submit
comments and suggested revisions or rebuttals to same. The inspection
rights granted to Lender in this Section 9.4 shall be in addition to,
and not in limitation of, any other inspection rights granted to Lender
in this Agreement, and shall expressly include the right to conduct
soil borings and other customary environmental tests, assessments and
audits in compliance with applicable Legal Requirements: provided,
that, except as set forth in clause (ii) below, Lender shall repair any
damage caused by borings, tests, assessments or audits.
9.4.2 Reimbursement of Lender's Costs and Expenses. Each Borrower agrees to
bear and shall pay or reimburse Lender on demand for all costs and
expenses (including reasonable attorneys' fees and disbursements, but
excluding internal overhead, administrative and similar costs of
Lender) reasonably relating to or incurred by Lender in connection with
the inspections, tests and reports described in this Section 9.4 in the
following situations:
(a) If Lender has reasonable grounds to believe at the time any such
inspection is ordered, that there exists a violation of any
Environmental Law or that a Hazardous Substance is present on,
under or emanating from the Real Property, or is migrating to or
from adjoining property, except under conditions permitted by
applicable Environmental Laws and not prohibited by any Loan
Document;
(b) If any such inspection reveals a violation of any Environmental
Law or that a Hazardous Substance is present on, under or
emanating to or from a Project or is migrating from adjoining
property, except under conditions permitted by applicable
Environmental Laws and not prohibited by any Loan Document; or
(c) If an Event of Default exists at the time any such inspection is
ordered.
9.5 Notices. To the extent that a Borrower has knowledge thereof, such
Borrower shall promptly provide notice to Lender of:
(a) any proceeding or investigation commenced or threatened by any
Governmental Authority with respect to the presence of any
Hazardous Substance on, under or emanating from a Project;
(b) any proceedings or investigation commenced or threatened by any
Governmental Authority, against such Borrower, with respect to the
presence, suspected presence, release or threatened release of
Hazardous Substances from any property not owned by such Borrower,
including, but not limited to, proceedings under the Federal
Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. ss. 9601 et seq.;
(c) all claims made or any lawsuit or other legal action or proceeding
against (i)such Borrower or such Project or any portion thereof,
or (ii) any other party occupying such Project or any portion
thereof, in any such case relating to any loss or injury allegedly
resulting from any Hazardous Substance or relating to any
violation or alleged violation of Environmental Law;
(d) the discovery of any occurrence or condition on such Project or on
any real property adjoining or in the vicinity of such Project, of
which the applicable Borrower becomes aware, which reasonably
could be expected to lead to such Project or any portion thereof
being in violation of any Environmental Law or subject to any
restriction on ownership, occupancy, transferability or use under
any Environmental Law; and
(e) the commencement and completion of any Remedial Work.
9.6 Copies of Notices. Each Borrower will transmit to Lender copies of any
citations, orders, notices or other communications received by such
Borrower with respect to the notices described in Section 9.5 hereof.
9.7 Environmental Claims. Lender may join and participate in, as a party if
Lender so determines, any legal or administrative proceeding or action
concerning a Project or any portion thereof under any Environmental
Law, if, in Lender's reasonable judgment, the interests of Lender will
not be adequately protected by Borrowers. Borrowers agree to bear and
shall pay or reimburse Lender on demand for all costs and expenses
(including reasonable attorneys' fees and disbursements, but excluding
internal overhead, administrative and similar costs of Lender) relating
to or incurred by Lender in connection with any such action or
proceeding.
9.8 Indemnification. Each Borrower agrees to indemnify, reimburse, defend
(with counsel reasonably approved by Lender), and hold harmless the
Indemnified Parties for, from, and against all demands, claims, actions
or causes of action, assessments, losses, damages, liabilities, costs
and expenses, including, without limitation, interest, penalties,
punitive and consequential damages, reasonable attorneys' fees,
disbursements and expenses, and reasonable consultants' fees,
disbursements and expenses asserted against, resulting to, imposed on,
or incurred by the Indemnified Parties, directly or indirectly, in
connection with any of the following:
(a) the events, circumstances, or conditions which are alleged to, or
do, (i) relate to the presence, or release into the environment,
of any Hazardous Substance at any location owned, leased or
operated by any Borrower or relate to circumstances forming the
basis of any violation, or alleged violation, of any Environmental
Law by a Borrower or with respect to any such locations, and in
either case, result in Environmental Claims, or (ii) constitute a
violation of any Environmental Law;
(b) any pollution or threat to human health or the environment that is
related in any way to a Borrower's or any previous owner's or
operator's management, use, control, ownership or operation of a
Project, including, without limitation, all onsite and offsite
activities involving Hazardous Substances, and whether occurring,
existing or arising prior to or from and after the date hereof,
and whether or not the pollution or threat to human health or the
environment is described in the Environmental Report;
(c) any Remedial Work under Section 9.3 hereof, required to be
performed pursuant to any Environmental Law of the terms hereof;
or
(e) the breach of any environmental representation, warranty or
covenant set forth in this Agreement;
except to the extent any of the foregoing result solely from
the negligence or willful misconduct of the Indemnified Parties.
The indemnity provided in this Section 9.8 shall not be included
in any exculpation of Borrowers from personal liability provided
in this Agreement or in any of the other Loan Documents and shall
survive the repayment in full of the Loan, any foreclosure of any
Project and the satisfaction and release of the Deed of Trust or
Mortgage or reconveyance. Nothing in this Section 9.8 shall be
deemed to deprive Lender of any rights or remedies provided to it
elsewhere in this Agreement or the other Loan Documents.
Notwithstanding anything to the contrary set forth herein, if
title to a Project is transferred to Lender or its nominee
pursuant to a foreclosure, then (i) in the event that Lender's
willful misconduct or gross negligence with respect to Hazardous
Substances existing on, at or under such Project prior to such
transfer of title causes additional liability with respect to such
Hazardous Substance, such Borrower shall have no obligation to
indemnify the Lender Parties for the cost, if any, of such
additional liability, and (ii) such Borrower shall have no
obligation to indemnify the Indemnified Parties for liability
arising from Hazardous Substances placed, released or disposed on,
at or under such Project after the date of such transfer of title
solely through the willful misconduct or negligence of Lender.
10. GENERAL PROVISIONS.
10.1 Captions. The captions and headings of various Articles and Sections of
this Agreement and Exhibits pertaining hereto are for convenience only
and are not to be considered as defining or limiting in any way, the
scope or intent of the provisions hereof.
10.2 Merger. This Agreement and the Loan Documents and instruments delivered
in connection herewith, as may be amended from time to time in writing,
constitute the entire agreement of the parties with respect to the
Projects and the Loans, and all prior discussions, negotiations and
document drafts are merged herein and therein. If there are any
inconsistencies between this Agreement and any other Loan Document, the
terms contained in this Agreement shall prevail. Neither Lender nor any
employee of Lender has made or is authorized to make any representation
or agreement upon which Borrowers may rely unless such matter is made
for the benefit of Borrowers and is in writing signed by an authorized
officer of Lender. Borrowers agree that they have not and will not rely
on any custom or practice of Lender, or on any course of dealing with
Lender, in connection with the Loans unless such matters are set forth
in this Agreement or the Loan Documents or in an instrument made for
the benefit of Borrowers and in a writing signed by an authorized
officer of Lender.
10.3 Notices. Any notice, demand, request or other communication which any
party hereto may be required or may desire to give hereunder shall be
in writing, addressed as follows and shall be deemed to have been
properly given if hand delivered, if sent by reputable overnight
courier (effective the business day following delivery to such
courier), by telecopier (provided electronic confirmation is received)
(provided delivery shall be effective only on the next business day
following electronic receipt) or by messenger:
If to Borrowers:
c/o On Stage Entertainment, Inc.
0000 X. Xxxxx
Xxx Xxxxx, Xxxxxx 00000
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. XxXxxxxx, Xx.
Facsimile (000) 000-0000
If to Lender:
Imperial Credit Commercial Mortgage Investment Corp.
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxxx
Telephone (000) 000-0000
Facsimile (000) 000-0000
with a copy to:
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxxxx
Telephone (000) 000-0000
Facsimile (000) 000-0000
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice
as a place for the service of notice. Notices given in any other
fashion shall be deemed effective only upon receipt.
10.4 Modification; Waiver. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing
and signed by the party against which the enforcement of such
modification, waiver, amendment, discharge or change is sought.
10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER
THE INTERNAL LAWS (AS OPPOSED TO THE LAWS OF CONFLICTS) OF THE STATE OF
FLORIDA.
10.6 Acquiescence Not to Constitute Waiver of Lender's Requirements. Each
and every covenant and condition for the benefit of Lender contained in
this Agreement may be waived by Lender.
10.7 Disclaimer by Lender.
(a) This Agreement is made for the sole benefit of Borrowers and
Lender (and Lender's successors, assigns and participants, if
any), and no other Person shall have any benefits, rights or
remedies under or by reason of this Agreement, or by reason of any
actions taken by Lender pursuant to this Agreement. Lender shall
not be liable for any debts or claims accruing in favor of any
third parties against Borrowers or others or against any Project.
Borrowers are not and shall not be an agent of Lender for any
purposes. Except as expressly set forth in the Loan Documents,
Lender is not and shall not be an agent of any Borrower for any
purposes. Lender, by making the Loan or taking any action pursuant
to any of the Loan Documents, shall not be deemed a partner or a
joint venturer with any Borrower or fiduciary of any Borrower.
(b) Any review, investigation or inspection conducted by Lender, any
architectural or engineering consultants retained by Lender or any
agent or representative of Lender in order to verify independently
any Borrower's satisfaction of any conditions precedent to the
disbursement of the Loan, any Borrower's performance of any of the
covenants, agreements and obligations of any Borrower under this
Agreement, or the truth of any representations and warranties made
by any Borrower hereunder (regardless of whether or not the party
conducting such review, investigation or inspection should have
discovered that any of such conditions precedent were not
satisfied or that any such covenants, agreements or obligations
were not performed or that any such representations or warranties
were not true), shall not affect (or constitute a waiver by Lender
of) (i) any of any Borrower's representations and warranties under
this Agreement or Lender's reliance thereon, or (ii) Lender's
reliance upon any certifications required under this Agreement or
any other facts, information or reports furnished Lender by any
Borrower hereunder.
(c) By accepting or approving anything required to be observed,
performed, fulfilled or given to Lender pursuant to the Loan
Documents, including any certificate, statement of profit and loss
or other financial statement, survey, appraisal, lease or
insurance policy, Lender shall not be deemed to have warranted or
represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term provision or condition thereof,
and such acceptance or approval thereof shall not constitute a
warranty or representation to anyone with respect thereto by
Lender.
10.8 Right of Lender to Make Advances to Cure Borrower's Defaults. If a
Borrower shall fail to perform in a timely fashion any of such
Borrower's covenants, agreements or obligations contained in this
Agreement or the Loan Documents, Lender may (but shall not be required
to) perform any of such covenants, agreements and obligations. Any
funds advanced by Lender in the exercise of its judgment that the same
are needed to protect its security for a Loan are deemed to be
obligatory advances hereunder and any amounts expended (whether by
disbursement of undisbursed Loan proceeds or otherwise) by Lender in so
doing, shall constitute additional indebtedness evidenced and secured
by the Notes, the Deed of Trust, the Mortgages and the other Loan
Documents.
10.9 Definitions Include Amendments. Definitions contained in this Agreement
which identify documents, including the Loan Documents, shall be deemed
to include all amendments and supplements to such documents from the
date hereof, and all future amendments and supplements thereto entered
into from time to time to satisfy the requirements of this Agreement or
otherwise with the consent of the Lender. Reference to this Agreement
contained in any of the foregoing documents shall be deemed to include
all amendments and supplements to this Agreement.
10.10 Time Is of the Essence. Time is hereby declared to be of the essence of
this Agreement and of every part hereof.
10.11 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
10.12 Waiver of Consequential Damages. In no event shall Lender be liable to
any Borrower for consequential damages, whatever the nature of a breach
by Lender of its obligations under this Loan Agreement, or any of the
Loan Documents, and each Borrower for itself and all Affiliated Parties
hereby waives all claims for consequential damages.
10.13 Claims Against Lender. Lender shall not be in default under this
Agreement, or under any other Loan Documents, unless a written notice
specifically setting forth the claim of a Borrower shall have been
given to Lender within 60 days after such Borrower first had knowledge
of the occurrence of the event which such Borrower alleges gave rise to
such claim and Lender does not remedy or cure the default, if any there
be, promptly thereafter. If it is determined in any proceedings that
Lender has improperly failed to grant its consent or approval, where
such consent or approval is required by this Loan Agreement or any
other Loan Documents, such Borrower's sole remedy shall be to obtain
declaratory relief determining such withholding to have been improper,
and for itself and all Affiliated Parties each Borrower hereby waives
all claims for damages or set-off against Lender resulting from any
withholding of consent or approval by Lender.
10.14 Secondary Sales. Each Borrower acknowledges that Lender and its
successors and assigns may (i) sell this Loan Agreement, the Deed of
Trust, the Mortgages, the Notes and other Loan Documents to one or more
investors as a whole loan, (ii) participate one or more Loans to one or
more investors, (iii) deposit this Loan Agreement, the Deed of Trust,
the Mortgages, the Notes and other Loan Documents with a trust, which
trust may sell certificates to investors evidencing an ownership
interest in the trust assets, or (iv) otherwise sell one or more of the
Loans or interest therein to investors (the transactions referred to in
clauses (i) through (iv) are hereinafter each referred to as "Secondary
Market Transaction"). Each Borrower shall cooperate with Lender in
effecting any such Secondary Market Transaction and shall cooperate to
implement all requirements imposed by any Rating Agency involved in any
Secondary Market Transaction. Each Borrower shall provide such
information, legal opinions and documents relating to such Borrower,
the applicable Project and any tenants of the Improvements as Lender
may reasonably request in connection with such Secondary Market
Transaction. In addition, each Borrower shall make available to Lender
all information concerning its business and operations that Lender may
reasonably request. Lender shall be permitted to share all such
information with the investment banking firms, Rating Agencies,
accounting firms, law firms and other third-party advisory firms
involved with the Loan and the Loan Documents or the applicable
Secondary Market Transaction. It is understood that the information
provided by Borrowers to Lender may ultimately be incorporated into the
offering documents for the Secondary Market Transaction and thus
various investors may also see some or all of the information. Lender
and all of the aforesaid third-party advisors and professional firms
shall be entitled to rely on the information supplied by, or on behalf
of, each Borrower and each Borrower indemnifies Lender as to any
losses, claims, damages or liabilities that arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in such information or arise out of or are based upon
the omission or alleged omission to state therein a material fact
required to be stated in such information or necessary in order to make
the statements in such information, or in light of the circumstances
under which they were made, not misleading. Lender may publicize the
existence of the Loans in connection with its marketing for a Secondary
Market Transaction or otherwise as part of its business development.
10.15 Jurisdiction and Venue. With respect to any suit, action or proceedings
relating to this agreement, any Project, or any of the Loan Documents
("Proceedings") each party irrevocably (i) submits to the non-exclusive
jurisdiction of the state and federal courts located in the State where
such Project is located, and (ii) waives any objection which it may
have at any time to the laying of venue of any proceedings brought in
any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have
jurisdiction over such party. Nothing in this agreement shall preclude
either party from bringing Proceedings in any other jurisdiction nor
will the bringing of Proceedings in any one or more jurisdictions
preclude the bringing of Proceedings in any other jurisdiction.
10.16 Severability. The parties hereto intend and believe that each provision
in this Agreement comports with all applicable local, state and federal
laws and judicial decisions. However, if any provision or provisions,
or if any portion of any provision or provisions, in this Agreement is
found by a court of law to be in violation of any applicable local,
state, or federal law, statute, ordinance, administrative or judicial
decision, or public policy, and if such courts declare such portion,
provision, or provisions of this Agreement to be illegal, invalid,
unlawful, void or unenforceable as written, then it is the intent of
all parties hereto that such portion, provision, or provisions shall be
given force to the fullest possible extent that they are legal, valid
and enforceable, and that the remainder of this Agreement shall be
construed as if such illegal, invalid, unlawful, void, or unenforceable
portion, provision, or provisions were not contained therein, and that
the rights, obligations, and interests of Borrower and Lender under the
remainder of this Agreement shall continue in full force and effect.
10.17 Incorporation of Recitals. The Recitals set forth herein and the
Exhibits attached hereto are incorporated herein and expressly made a
part hereof.
10.18 WAIVER OF JURY TRIAL. BORROWERS AND LENDER EACH HEREBY WAIVE ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RELATING
THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT
OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
11. ADDITIONAL LOANS. Upon fulfillment of each and every precondition set
forth below, Lender shall make one or more additional loans (each, an
"Additional Loan") in the aggregate amount of not less than $1,000,000
and not more than $7,500,000.
11.1 Preconditions. Prior to making any Additional Loan, the following
preconditions must be fulfilled to Lender's satisfaction:
(a) Each borrower for an Additional Loan (each, an "Additional Loan
Borrower") shall be a newly formed Nevada corporation, wholly
owned by On Stage Theaters, Inc., and otherwise meeting Lender's
requirements as to capital structure.
(b) The proceeds of the Additional Loans shall be used solely for the
payment of the purchase price for the acquisition of additional
projects (including a fee or leasehold estate in the related real
estate) to be used for on-stage live production entertainment.
Each such project shall be leased to On Stage Theaters, Inc.
pursuant to an On Stage Lease providing triple net rent equal to
at least 150% of the debt service for the relevant applicable
Additional Loan and subject to a lease guarantee executed by OSE
in form acceptable to Lender. Borrowers have previously identified
the acquisition of the assets of Xxxxxx Xxxxxxx Productions, Inc.,
a Delaware corporation, as a prospective project which would serve
as security for the Additional Loans. Lender's obligation to make
any Additional Loans is subject to Lender's being satisfied that
the value (net of liabilities) of the real estate components that
are a part of each such Additional Loan project shall be in excess
of 166.7% for the first $4,000,000 of Additional Loans, thereafter
133.3% (both exclusive of any going concern value or good will) of
the amount of the Additional Loan.
(c) The Additional Loans shall be funded on or before March 31, 1999,
and if such funding does not occur for any reason other than
Lender's breach of its obligations under this Section 11, then
Lender's obligation to make any or all of the Additional Loans
shall expire March 31, 1999 and be of no further force or effect.
(d) Each Additional Loan Borrower shall execute loan documents in
substantially the same form as the Loan Documents required for the
Loans, subject to such changes as shall be required by Lender's
counsel. Such Loan Documents shall include repayment guarantees by
each Additional Loan Borrower of the other Additional Loans and
the Loans. In addition, each Borrower and OSE shall be required to
execute an additional or restated Guarantee guaranteeing the
repayment of the Additional Loans, and each such modified or
restated Guarantee (other than OSE's Guarantee) shall be secured
by the Deed of Trust or Mortgage encumbering each Borrower's
Project or, as applicable, each Additional Loan Borrower's
project.
(e) All aspects of the Additional Loan projects shall meet Lender's
reasonable requirements, including without limitation requirements
as to permitted exceptions to clean title, title insurance and
endorsements, zoning, completeness of associated personal
property, building permit and other entitlements, structural
integrity, surveys, and similar due diligence items, and all
aspects of the Additional Loan project shall be satisfactory to
Lender in its reasonable judgment (including operating history,
management team, actual prior and projected EBITDA, and other
factors).
(f) Each Additional Loan Borrower shall be required to make each and
every one of the representations, warranties and covenants
contained in this Agreement (which shall be expanded to include
the Additional Loan Borrower's project), either by becoming a
party hereto or by executing an additional loan agreement, as
required by Lender.
(g) No Event of Default shall have occurred and be continuing past any
express cure period.
(h) Borrowers shall have paid all of Lender's costs and expenses
related to each proposed Additional Loan within 10 days after
request therefor.
(i) There shall have been no material adverse change in the financial
condition of OSE.
11.2 Minimum Additional Loan. No Additional Loan shall be for an original
principal balance of less than $1,000,000.
IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement as of the
day and year first set forth above.
BORROWERS:
WILD BILLS CALIFORNIA, INC.,
a Nevada corporation
By:_______________________________
Name:_____________________________
Title:_____________________________
KING HENRY'S, INC.
a Nevada corporation
By:_______________________________
Name:_____________________________
Title:_____________________________
FORT LIBERTY, INC.
a Nevada corporation
By:_______________________________
Name:_____________________________
Title:_____________________________
LENDER:
IMPERIAL CREDIT COMMERCIAL MORTGAGE INVESTMENT
CORP., a Maryland corporation
By:_______________________________
Name:_____________________________
Title:_____________________________
EXHIBIT A-1
LEGAL DESCRIPTION
King Henry's Real Property
EXHIBIT A-2
LEGAL DESCRIPTION
Wild Bills Real Property
EXHIBIT A-3
LEGAL DESCRIPTION
Fort Liberty Real Property
EXHIBIT B
PERMITTED EXCEPTIONS
EXHIBIT C
SOURCES AND USES OF FUNDS
SOURCES OF FUNDS
Loan Proceeds from Borrower ....................................... $12,500,000
Borrower's Funds .................................................. 212,500
TOTAL SOURCES OF FUNDS ................................... $12,712,350
USES OF FUNDS
Cash Portion of Acquisition Price ................................. $10,250,000
Funds Being Deposited into Escrow per Section ___ of
the Asset Purchase Agreement ............................. 1,250,000
Financing Fees and Expenses:
Lender Out of Pocket Costs not previously paid by Borrower 50,000
Loan Origination and Arrangement Fees .................... 700,000
Borrower Legal ........................................... $ 50,000
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Total Financing Fees and Expenses ................................. 800,000
Appraisal ......................................................... 45,000
Environmental ..................................................... 7,000
Structural ........................................................ 12,000
Document Stamps ................................................... 53,350
Title/Survey ...................................................... 45,000
Accounting & Legal Fees Associated w/Due Diligence ................ 250,000
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Total transaction costs (other than financing fees and expenses: .. 412,350
Total Financing Fees and Expenses and Transaction Costs: .......... $ 1,212,350
TOTAL USES OF FUNDS ...................................... $12,712,350
EXHIBIT D
FORT LIBERTY LEASES
Schedule 1
Non-Recurring Items For Periods Ended Prior to December 31, 1997
Items on balance sheet charged off
Pre-Opening costs-Miami ............................... $ 3,880
Pre-Opening costs-Branson ............................. 168,174
Pre-Opening costs-Toronto ............................. 76,181
Pre-Opening costs-Valley Forge ........................ 118
Pre-Opening costs-Cancun .............................. 2,297
Developmental ......................................... 71,760
Pre-Opening-Myrtle Beach .............................. 17,864
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Subtotal ........... $ 340,274
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Other Items
Direct operating expenses
physical inventory adjustments ............... $ 62,608
Indirect operating expenses
physical inventory adjustment ................ 9,391
Selling, general & administrative
adjustments .................................. 266,371
Discontinued operation-Daytona ........................ 1,925,711
CFO stock grant ....................................... 162,128
Principal stockholder debt foregiveness ............... 221,521
Interest expense-bridge loan underwriter .............. 444,000
Interest expense-debenture conversion ................. 194,228
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Subtotal ........... $3,285,958
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Total non recurring items ...................................... $3,626,232
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Schedule 3.26
Deferred Maintenance at Fort Liberty to Be Completed By July 31, 1998
Repair the missing portion of the exterior wall of the in-line retail premises
closest to (but not a part of) the Wild Bills Theater/Retail Courtyard portion
of the property, and repair the roof and water damage to ceiling and interior
walls of that retail premises and adjacent premises.
