Enterprise Identification Numbers: See Annexed Schedule of Properties
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of December 31, 1997 (this "Agreement"), is
entered into by and between the Borrower(s) designated on the Addendum
(hereinafter defined) (whether one, or if more than one then collectively,
"Borrower") and ENTERPRISE MORTGAGE ACCEPTANCE COMPANY, LLC, a Delaware
limited liability company ("EMAC", or "Originator", and together with its
successors and assigns, "Lender").
RECITALS
A. Borrower is the owner and operator of the Enterprise (hereinafter
defined).
B. Borrower has concurrently herewith executed other Loan Documents
(hereinafter defined) in connection with a loan (the "Loan") in the Loan
Amount (hereinafter defined) from Lender to Borrower which is subject to
the conditions set forth herein and in the other Loan Documents.
C. Borrower is fully aware that Lender is relying on this Agreement in
making the Loan and the representations and warranties made herein are
material factors in making the Loan.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Borrower and Lender agree as follows:
SECTION I. DEFINITIONS:
For purposes of this Agreement the following terms will be defined as follows:
"Actual Loss of Business Income" shall mean all losses incurred due to
the necessary suspension of operations during any period of Restoration,
including, but not limited to loss of net income and the cost of maintaining
operations, including payroll and Debt Service.
"Addendum" shall mean the Addendum to Loan Agreement annexed to this
Agreement.
Affiliate Borrower shall mean Cincinnati Lubes, Inc., a Florida
corporation.
"Application Date" shall mean the date identified as such in the
Addendum.
"Assignee" shall have the meaning given to such term in Section
X(e)(ii).
"Borrower Adjusted Free Cash Flow" shall mean, for any period, the Net
Income (loss) for Borrower and Affiliate Borrower, on a consolidated basis,
determined in accordance with GAAP, plus, to the extent previously deducted in
calculating Net Income (loss): (i) income taxes; (ii) Debt Service payments;
(iii) all non-cash charges including depreciation and amortization; (iv) the
amount of expenses paid under the CFA Management Agreement, or for salaries of
officers or general partners, charitable donations, travel and entertainment
and other items deemed to be owner compensation; and (v) non-recurring
expenses, including those non-recurring expenses required by the Franchisor or
Licensor, if any.
"Borrower FCCR shall mean, for any period, (i) Borrower Adjusted Free
Cash Flow plus base occupancy rents divided by (ii) aggregate Debt Service
payments of Borrower and Affiliate Borrower, on a consolidated basis plus base
occupancy rents.
"Business Day" shall mean any day on which banks are not authorized or
required to close in New York, New York.
ACFA Management Agreement shall mean the Amended and Restated Management
Agreement between Borrower and CFA Management, Inc., dated August, 1988, as
amended.
"Collateral" shall have the meaning given to that term in the Security
Agreement, and if the Loan is secured by a Mortgage, then such term also
refers to the property described as "Collateral" and/or "Property" in the
Mortgage.
"Commitment Date" shall mean the date identified as such in the
Addendum.
"Commitment Letter" shall mean that certain commitment letter from EMAC
to Borrower dated the Commitment Date, with respect to the Loan.
"Debt Service" shall mean, for any period, an amount equal to the sum of
all payments of interest and current maturities of principal required to be
made by the specified party during such period with respect to its
indebtedness.
"Default" shall mean any event or circumstance not yet constituting an
Event of Default but which, with the giving of any notice or the lapse of any
period of time or both, would become an Event of Default.
"Demand Rate" shall have the meaning given to that term in the Note.
"Enterprise" shall mean each business concern identified as such in the
Addendum.
"Enterprise Identification Number" shall mean the number designated as
such on the Addendum.
"Entity" shall mean a corporation, a limited partnership, a general
partnership, a limited liability company, an association, a trust, or any
other entity or organization, including a government or political subdivision
or an agency or instrumentality thereof.
"Environmental Indemnitor(s)" shall mean the Person(s) designated as
such on the Addendum.
"Environmental Indemnity" shall mean the Environmental Indemnity
executed by the Environmental Indemnitor(s) for the benefit of Lender
concurrently herewith.
"Environmental Laws" shall mean all present and future requirements of
law relating to the protection of human health and safety or the environment,
including, without limitation, all requirements of law pertaining to
reporting, licensing, permitting, investigation, and remediation of emissions,
discharges, releases, or threatened releases of hazardous materials, chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the presence, generation,
discharge, release, removal, manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of chemical substances,
pollutants, emissions, asbestos contaminants, or hazardous, radioactive or
toxic substances, materials, or wastes, whether solid, liquid, or gaseous in
nature; and all requirements of law pertaining to the protection of the health
and safety of employees or the public, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. ' 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C.
App. ' 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.'
6901 et seq.) the Clean Water Act (33 U.S.C. ' 1251 et seq.),the Clean Air Act
(42 U.S.C. ' 7401 et seq.), the Toxic Substance Control Act (15 U.S.C. ' 2601
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. '
136 et seq.), and the Occupational Safety and Health Act (29 U.S.C. ' 651 et
seq.), all as now or hereafter amended, and the regulations promulgated
pursuant thereto, and judicial interpretations thereof, as well as common law
rights of action under theories of nuisance, trespass and strict liability.
"Equipment" shall mean all estate, right, title and interest of the
Borrower in, to, under or derived from all machinery, equipment, fixtures and
accessions thereof and renewals and replacements thereof, and substitutions
therefor and other tangible property of every kind and nature whatsoever owned
by the Borrower, or in which the Borrower has or shall have an interest, now
or hereafter located at each Enterprise, or appurtenant thereto, or usable
exclusively in connection with the present or future operation and occupancy
of each Enterprise.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests, membership
interests or other equity interests in and of such Person (regardless of how
designated and whether or not voting or non-voting), (b) all warrants, options
and other rights to acquire any of the foregoing and (c) any securities
convertible into any of the foregoing.
"Event of Default" shall have the meaning given to that term in the
Note.
"Financial Statements" shall mean, with respect to any accounting period
for any Person, statements of income and of sources and uses of and changes in
cash flow of such person for such period, and balance sheets of such Person as
of the end of such period, setting forth in each case in comparative form
figures for the corresponding period in the preceding fiscal year if such
period is less than a full fiscal year or, if such period is a full fiscal
year, corresponding figures from the preceding fiscal year end, all prepared
in reasonable detail and in accordance with GAAP.
"Franchise Agreement" shall have the meaning given to that term in the
Addendum.
"Franchisor" shall have the meaning given to that term in the Addendum.
"GAAP" shall mean generally accepted accounting principles and practices
as in effect in the United States of America from time to time, consistently
applied. All references to GAAP shall mean either GAAP or, if a Franchisor or
Licensor is indicated in the Addendum, an accounting methodology in a format
and according to procedures acceptable to such Franchisor or Licensor, which
in any case shall be consistently applied.
"Guarantor" shall mean any Person designated as such on the Addendum.
"Guaranty" shall mean that certain guaranty(s) given by Guarantor(s) to
Lender in connection with the Loan.
"Improvements shall mean all right, title and interest of the Borrower
in, to, under or derived from all buildings, structures, facilities and other
improvements of every kind and description now or hereafter located on the
Real Property, including, without limitation, all parking areas, roads,
driveways, walks, fences, walls, drainage facilities and other site
improvements, all water, sanitary and storm sewer, drainage, electricity,
steam, gas, telephone and other utility equipment and facilities, all
plumbing, lighting, heating, ventilating, air-conditioning, refrigerating,
incinerating, compacting, fire, protection and sprinkler, surveillance and
security, public address and communications equipment and systems, all
awnings, floor coverings, partitions, elevators, escalators, motors,
machinery, pipes, fittings and other items of Equipment and personal property
of every kind and description now or hereafter located on the Real Property,
as defined herein, or attached to the improvements which by the nature of
their location thereon or attachment thereto are real property under
applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, Equipment, fixtures, structures and improvements, all of
which materials shall be deemed to be part of the Real Property immediately
upon delivery thereof on the Real Property and to be part of the improvements
immediately upon their incorporation therein.
"Indemnitees" shall have the meaning given to such term in Section X(c).
"Landlord Estoppel" shall mean, if any, each certain Landlord Estoppel
Certificate and Agreement Regarding Lease executed by the landlord under each
Lease for Lender's benefit.
"Lease" shall mean, if any, each Lease identified in the Addendum.
"License Agreement" shall have the meaning given to that term in the
Addendum.
"Licensor" shall have the meaning given to that term in the Addendum.
"Loan" shall have the meaning given to such term in the Recitals of this
Agreement.
"Loan Amount" shall mean the amount in U.S. Dollars designated as such
in the Addendum.
"Loan Application" shall mean that certain EMAC Loan Application
completed by Borrower, dated the Application Date, in order to obtain the
Loan.
"Loan Documents" shall mean and include this Agreement, the Note, the
Mortgage, the Security Agreement, the Environmental Indemnity (if any), the
Guaranty (if any), and all other documents, instruments and agreements
delivered to Lender in connection with the Loan.
"Loss" shall have the meaning given to such term in Section VI.
"Loss Proceeds" shall have the meaning given to such term in Section
VI(a).
"Maturity Date" shall have the meaning given to such term in the Note.
"Mortgage" shall mean, if any, the document identified as such in the
Addendum.
"Mortgagor" shall mean the Person identified as such in the Addendum.
"Net Income" shall mean the net income determined in accordance with
GAAP.
"Note" shall mean that certain Promissory Note in the form annexed
hereto as Exhibit B from Borrower to Lender dated as of the date hereof in the
Loan Amount. The terms of the Note shall be deemed incorporated herein by
reference.
"Owner(s)" shall have the meaning given to such term in Section II(t).
A Parent means Lucor, Inc., a Florida corporation.
"Permitted Lien" shall have the meaning given to such term in the
Addendum.
"Person" shall mean an individual or an Entity.
"Property" shall mean the Real Property, the Improvements, the Equipment
and rights appurtenant thereto.
"Real Property" shall have the meaning given to such term in the
Mortgage, if any, or, if there is no Mortgage, shall mean all of Borrower's
present and future estate, right, title and interest, together with right of
entry, in and to that certain real property at which each Enterprise is
located.
"Restoration" shall have the meaning given to such term in Section
VI(c).
"Security Agreement" shall mean that certain Security Agreement between
Lender and Borrower dated as of the date hereof executed in connection with
the Loan.
"State" shall mean the state (or Commonwealth) where the Enterprise is
located.
"Trade Name" shall mean the name designated as such in the Addendum.
"Yield Maintenance Fee" shall have the meaning given to that term in the
Note.
SECTION II, BORROWER'S REPRESENTATIONS AND WARRANTIES,
To induce Lender to enter into this Agreement and to make the Loan
hereunder, Borrower represents and warrants to Lender that:
(a) Due Organization and Qualification and Proper Licensing. Each
Entity, if any, comprising Borrower as designated in the Addendum, is (i) duly
organized, validly existing and in good standing under the laws of its state
of incorporation or organization, as applicable; (ii) has the power and
authority to own, lease and operate its properties and carry on its business
as now conducted; and (iii) is duly qualified, licensed to do business and in
good standing in the State and in each other state where the failure to be so
qualified or licensed might have a material adverse effect. Each natural
person, if any, comprising Borrower has the power and legal capacity (i) to
execute and deliver the Loan Documents and take the Loan, (ii) to own, lease
and operate its properties and (iii) carry on its business as now conducted
and is duly qualified and licensed to do business where the failure to be so
qualified or licensed might have a material adverse effect.
(b) Authority and Enforceability. The execution, delivery and
performance by Borrower of each Loan Document to be executed by Borrower and
the consummation of the transactions contemplated thereby are within the power
of Borrower and have been duly authorized by all necessary actions on the part
of Borrower. Each Loan Document executed, or to be executed, by Borrower has
been, or will be, on and after the date hereof, duly executed and delivered by
Borrower and constitutes, or will, on and after the date hereof, constitute, a
legal, valid and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to or affecting the enforcement of
creditors rights generally and general principles of equity; provided,
however, Borrower notes that waiver of jury trial may not be enforceable in
some states.
(c) Non-Contravention. The execution and delivery by Borrower of the
Loan Documents executed by Borrower and the performance and consummation of
the transactions contemplated thereby do not and will not (i) violate any
requirement of law applicable to Borrower; (ii) violate any provision of, or
result in the breach or the acceleration of, or entitle any other Person to
accelerate (whether after the giving of notice or lapse of time or both), any
contractual obligation of Borrower; (iii) result in the creation or imposition
of any lien upon any property, asset or revenue of Borrower constituting
Collateral (except such liens as may be created in favor of Lender pursuant to
this Agreement or the other Loan Documents); or (iv) to the extent applicable,
violate any provision of Borrower's articles of incorporation, Borrower's
limited partnership agreement, Borrower's partnership agreement or Borrower's
articles of organization.
(d) Approvals. No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental authority or other
Person (including, without limitation, any ground lessor, prior lien or the
shareholders of any Person) is required in connection with the execution and
delivery of the Loan Documents executed by Borrower and the performance and
consummation of the transactions contemplated thereby.
(e) No Violation or Default. No Event of Default or Default has
occurred and is continuing. Borrower is not in violation of or in default
with respect to any requirement of law or any contractual obligation,
including, but not limited to, any default on any contractual obligation to
any of its affiliates (nor is there any waiver in effect which, if not in
effect, would result in such a violation or default), where, in each case,
such violation or default could have a material adverse effect on Borrower.
Without limiting the generality of the foregoing, Borrower (i) has not
directly or indirectly violated any Environmental Laws; (ii) has no liability
under any Environmental Laws; and (iii) has not received notice or other
communication of an investigation nor is under investigation by any
governmental authority having authority to enforce Environmental Laws.
(f) Litigation. Except as previously disclosed to Lender in writing,
no actions (including, without limitation, derivative actions), suits,
proceedings or investigations are pending or, to the knowledge of Borrower,
threatened against Borrower or the Owners at law or in equity in any court or
before any other governmental authority (i) which could (alone or in the
aggregate) have a material adverse effect on Borrower's or any such Owner's
financial condition or (ii) which in any manner calls into question, either
directly or indirectly, the lawfulness of the execution, delivery or
performance by Borrower of the Loan Documents or the transactions contemplated
thereby.
(g) Financial Statements. The Financial Statements of Borrower
provided by Borrower to Lender in connection with the Loan Application (i) are
consistent with the books and records of Borrower and the Enterprise, which
have been maintained in accordance with good business practice; (ii) have been
prepared in conformity with GAAP; (iii) fairly present the financial condition
of Borrower and the Enterprise at such date; and (iv) do not omit any
information which is necessary to make the Financial Statements not
misleading. Borrower does not have any contingent obligations, liability for
taxes or other outstanding obligations which are material in the aggregate,
except as disclosed in the Financial Statements furnished by Borrower to
Lender prior to the date hereof.
(h) Patent and Other Rights. Borrower owns, and has the full right to
use without the consent of any other Person (or otherwise has been granted by
the Franchisor and/or Licensor the right to use), all patents, licenses,
trademarks, trade names, trade secrets, service marks, copyrights, computer
programs and records and other intellectual property and all rights with
respect thereto which are required to conduct its businesses as now conducted.
(i) Governmental Charges and Assessments. Borrower has filed or
caused to be filed all tax returns which are required to be filed by it.
Borrower has paid, or made provision for the payment of, all taxes, ground
rents, water charges, sewer rates and other governmental charges or
assessments which have become due pursuant to said returns or otherwise,
except such governmental charges, if any, which are being contested in good
faith and as to which adequate reserves (determined in accordance with GAAP)
have been provided and which could not have a material adverse effect on
Borrower or impose any criminal liability on Borrower if unpaid.
(j) Subsidiaries and Affiliates. Attached hereto is a complete list
of all subsidiaries and affiliates of Borrower and, as applicable, the
jurisdiction of organization of each, the classes of Equity Securities of each
and the number of shares and percentages of shares of each such class owned
directly or indirectly by Borrower. Except for such affiliates or
subsidiaries, Borrower has no affiliates or subsidiaries and is not a partner
in any partnership or joint venturer in any joint venture.
(k) Solvency. Borrower is able to pay its debts as they become due
and, after the execution and delivery of the Loan Documents and the
consummation of the transactions contemplated thereby, will be solvent. None
of the transactions contemplated by the Loan Documents will be or have been
made with an actual intent to hinder, delay or defraud any present or future
creditors of Borrower. Borrower acknowledges that Lender may make one or more
loans to one or more of any borrowers related to or affiliated or connected
with Borrower, and if Lender makes any such loan, Borrower acknowledges, in
consideration of Lender's making of the Loan, that Borrower will have received
fair and reasonably equivalent value in good faith for the grant of the lien
or security interest effected by the related Loan Documents.
(l) Catastrophic Events. Borrower is not, nor have any of its
properties been, affected by any fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, natural
disaster or other casualty that could have a material adverse effect on
Borrower or the Collateral.
(m) Franchise Agreement/License Agreement. If a Franchise Agreement
and/or License Agreement is identified in the Addendum, a true, correct and
complete copy of each such Franchise Agreement and License Agreement has been
provided to Lender, and each such Franchise Agreement and License Agreement
constitutes the legal, valid, binding and enforceable obligation between the
parties thereto authorizing the operation of each Enterprise as an enterprise
under the Trade Name. No party is in default under, and no circumstance
exists which with the passage of time could give rise to a default under, the
Franchise Agreement or License Agreement. There are no amendments,
modifications or supplements to any Franchise Agreement or License Agreement
other than those attached thereto. Borrower has not received any notices
under any Franchise Agreement or License Agreement with respect to Borrower's
compliance, other than notices, copies of which have been furnished to Lender.
The Maturity Date will occur prior to the expiration date of each Franchise
Agreement and License Agreement, if any.
(n) Loan Application. All statements made by Borrower in the Loan
Application and information provided in connection therewith were true when
made or provided to Lender and nothing has occurred since Borrower completed
the Loan Application or provided such information which would cause a material
change in such information or the financial condition or business prospects of
Borrower.
(o) Lease. If a Lease has been identified in the Addendum, a true,
correct and complete copy of each such Lease has been provided to Lender, and
each such Lease constitutes the legal, valid and binding obligation of the
parties thereto. All rent payments due and owing under each Lease have been
paid and no party is in default under any Lease, and no circumstance exists
which with the passage of time or giving of notice could give rise to a
default under any Lease. There are no amendments, modifications or
supplements to any Lease other than those attached thereto. Borrower has not
received any notices under any Lease with respect to Borrower's compliance,
other than notices, copies of which have been furnished to Lender. The
Maturity Date will occur prior to the expiration date of each Lease including
any lessee option to extend such term, provided any such option may be
exercised unconditionally in Borrower's sole discretion.
(p) Mortgage. If the Mortgage constitutes a lien on an interest of
Borrower as tenant under a Lease of the Real Property, but not on the related
fee interest in such Real Property, Borrower represents that:
(i) Such Lease or a memorandum thereof has been duly recorded; and
such Lease or the related Landlord Estoppel permits the interest of the tenant
thereunder to be encumbered by the related Mortgage and does not restrict the
use of the Property and related improvements by such tenant, its successors or
assigns in a manner inconsistent with the current and intended uses thereof;
and
(ii) Such Lease has an original term (or an original term plus
one or more optional renewal terms which under all circumstances may be
exercised unconditionally at Borrower's sole discretion, and will be
exercisable by Lender) which extends beyond the Maturity Date.
(q) Sufficiency of Collateral. The Collateral is sufficient for
Borrower to conduct the Enterprise using the trade names and service marks
licensed to Borrower under the Franchise Agreement and/or License Agreement.
(r) Accuracy of Information Furnished. The information set forth in
the Loan Documents (including, without limitation, all information set forth
in the Addendum) and provided to Lender in connection with the Loan
Application is true, complete and correct. None of the Loan Documents and
none of the other certificates, statements or information furnished to Lender
by or on behalf of Borrower or in connection with the Loan Documents or Loan
Application or the transactions contemplated thereby contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(s) Defenses. The Loan Documents are not subject to any offset,
defense or counterclaims or right of rescission, abatement or diminution as
against Lender, including the defense of usury, and the operation of any of
the terms of the Loan, or the exercise of any right thereunder, will not
render the Loan Documents unenforceable, in whole or in part, or subject to
any offset, defense or counterclaims or right of rescission, abatement or
diminution including the defense of usury, and to Borrower's knowledge Lender
has not taken any action which would give rise to the assertion of any of the
foregoing and no such right of rescission, set-off, abatement, diminution,
counterclaim or defense, including the defense of usury, has been asserted
with respect thereto.
(t) Equity Securities. All outstanding Equity Securities of Borrower
are duly authorized, validly issued, fully paid and non-assessable. There are
no outstanding subscriptions, options, conversion rights, warrants or other
agreements or commitments of any nature whatsoever (firm or conditional)
obligating Borrower to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional Equity Securities of Borrower, or obligating
Borrower to grant, extend or enter into any such agreement or commitment. All
Equity Securities of Borrower have been offered and sold in compliance with
all federal and state securities laws and other requirements of law. The
Equity Securities of Borrower are owned by the Persons designated in the
Addendum (the "Owner(s)").
(u) Insurance. All insurance premiums due and owing pursuant to
Section V hereof or otherwise due and owing by Borrower have been paid.
(v) Miscellaneous Fees or Charges. Borrower has paid all fees or
charges which are due and owing and affect the Collateral.
(w) No Condemnation or Damages. There is no proceeding pending for
the total or partial condemnation of the Property. The Property is being used
for the operation of the Enterprise and is free and clear of any damage or
defective condition that would materially and adversely affect the value of
the Collateral. The Property is lawfully used and occupied by Borrower under
applicable law.
(x) No Mechanics' Liens. The Property and Collateral are free and
clear of any mechanics' liens and materialmens' liens or liens in the nature
thereof, and no rights are outstanding that under law could give right to such
liens, except as insured against by Lender's title policy.
(y) Licenses and Permits. As of the date hereof, Borrower is in
possession of all licenses, permits and other authorizations necessary and
required by applicable law for the conduct of its business. All such
licenses, permits and authorizations are valid and in full force and effect.
SECTION III. COVENANTS.
Until the termination of this Agreement and the satisfaction in full by
Borrower of all obligations under the Loan Documents, Borrower shall comply,
and shall cause compliance, with the following affirmative covenants unless
Lender shall otherwise consent in writing:
(a) Fixed Charge Coverage Ratio. If the Borrower FCCR for any 12-
month period is less than 1.15, then Borrower shall provide to Lender a
compliance certificate in the form specified in Section III(d) herein within
15 days of the end of each calendar quarter, with an income statement and
balance sheet for the 12-month period ending with such calendar quarter
prepared in accordance with GAAP, until such time as Lender shall require, in
its sole discretion. In no event, however, shall Borrower permit the Borrower
FCCR for any 12-month compliance period ended December 31 or June 30 to be
less than 1.15. Notwithstanding the foregoing, a breach of the requirement
set forth in the immediately preceding sentence shall not constitute an Event
of Default provided that as of the conclusion of the six month period (the
Cure Period) immediately succeeding the relevant twelve month period with
respect to which breach occurred, the Borrower FCCR for the twelve month
period ending at the end of the Cure Period is not less than 1.15.
(b) Additional Indebtedness. Except as provided in Section VII,
Borrower shall not directly or indirectly create, incur, assume or permit to
exist any lien on or with respect to any of its assets or property
constituting Collateral, whether now owned or hereafter acquired except for
Permitted Liens, if any, or with the prior written consent of Lender.
Borrower may, however, without Lender's consent, incur any other indebtedness
not relating to the Collateral provided that, immediately prior to and after
Borrower incurs such additional indebtedness, no Event of Default shall exist
and be continuing and provided further that Borrower's pro forma Borrower FCCR
will not be less than the amount required by Section III(a), as determined
using Borrower Adjusted Free Cash Flow for the 12-month period immediately
preceding such determination and Debt Service payments with respect to
indebtedness equal to pro forma payments expected to be made over the 12-month
period immediately succeeding such determination on all Borrower indebtedness
outstanding which will not be retired upon Borrower incurring such additional
indebtedness and on such additional indebtedness. In no event, however, shall
Borrower incur any additional indebtedness for the payment of a dividend or
other distribution to shareholders.
(c) Asset Dispositions and Acquisitions. Borrower shall not sell,
assign, convey, lease, transfer or otherwise dispose of or permit to be sold,
assigned, conveyed, leased, transferred or otherwise disposed of, any of its
assets or property constituting Collateral hereunder, whether now owned or
hereafter acquired, except for inventory in the ordinary course of the
Enterprise's business provided, however, that Borrower may replace the
Enterprise's Equipment or acquire new Equipment and accessions to the
Enterprise's Equipment in the ordinary course of Borrower's business, provided
such replacement Equipment shall be equal to or greater in value as that which
it replaced; and provided, further, that any such replacement Equipment may
not be acquired subject to a purchase money or other security interest without
the prior written consent thereto of Lender.
(d) Compliance Certificates. Borrower and Affiliate Borrower shall
provide to Lender on or prior to March 31 and September 30 of each year a
compliance certificate executed by an authorized officer of Borrower and
Affiliate Borrower, respectively, for the twelve-month periods concluding on
December 31 and June 30, respectively, in the form attached hereto as Exhibit
A.
(e) Equity Securities. Borrower will not permit any person other than
the Owner(s) to own, either directly or beneficially, outstanding Equity
Securities of Borrower which in the aggregate equal or exceed 50% of the total
outstanding voting or controlling interests of Borrower.
(f) Other Documents. Borrower shall provide copies of such other
instruments, agreements, certificates, opinions, statements, documents and
information relating to the operations or condition (financial or otherwise)
of Borrower, and compliance by Borrower with the terms of this Agreement and
the other Loan Documents, as Lender may from time to time request.
(g) Books and Records. Borrower shall at all times keep proper books
of record and account in which full, true and correct entries will be made of
their dealings and transactions in accordance with GAAP and all requirements
of law.
(h) Inspections. Borrower shall permit any Person designated by
Lender, upon reasonable notice and during normal business hours, to visit and
inspect any of the properties and offices of Borrower, to examine and make
abstracts from the records and books of account of Borrower, and to discuss
the affairs, finances and accounts of Borrower, and to be advised as to the
same by, Borrower's officers, auditors and accountants. Borrower authorizes
said auditors and accountants to so discuss the affairs, finances, business,
operations, properties and accounts of Borrower, all at such times and
intervals as Lender may reasonably request.
(i) Governmental Charges and Other Indebtedness. Borrower shall
promptly pay and discharge when due all taxes, liabilities, impositions and
other governmental charges prior to the date upon which penalties accrue
thereon; provided, Borrower shall have the rights of contest set forth in
Section VII.
(j) Use of Proceeds. Borrower shall use the proceeds of the Loan only
for the purposes indicated in the Commitment Letter, which use is not
primarily a personal, family or household purpose and which use shall not
include the satisfaction, in whole or in part, of any debt owed or owing by
Borrower to itself or its affiliates, except as provided in the Commitment
Letter.
(k) General Business Operations. Borrower shall (i) preserve and
maintain its organizational (corporate, partnership, limited liability
company, as applicable) existence and all of its rights, privileges and
franchises reasonably necessary to the conduct of its business, (ii) conduct
its business activities and maintain the Collateral in substantially the same
manner as it is being conducted and maintained at the date of this Agreement
and in compliance with all applicable requirements of law and contractual
obligations applicable thereto, (iii) keep all property useful and necessary
in its business in good working order and condition, ordinary wear and tear
excepted, (iv) maintain its chief executive office and principal place of
business in the state and county specified in the Addendum, (v) if a Franchise
Agreement and/or License Agreement is identified in the Addendum, be and
remain a franchisee or licensee, as the case may be, in good standing under
such Franchise Agreement and/or License Agreement and shall not amend, modify,
or terminate, or permit termination, material amendment or material
modification of such Franchise Agreement and/or License Agreement or transfer,
assign or waive any of its rights under such Franchise Agreement and/or
License Agreement, (vi) if a Lease is identified in the Addendum, comply with
all provisions of such Lease and exercise any option or other extension right
necessary to cause the Lease term to extend to a date beyond the Maturity
Date, and (vii) shall not amend or modify any material term or provisions of,
or terminate such Lease or transfer, assign or waive any of its rights under
such Lease.
(l) Notices. Borrower shall give prompt written notice to Lender of
(i) any claims, proceedings or disputes (whether or not purportedly on behalf
of Borrower) against, or to Borrower's knowledge, threatened or affecting
Borrower which, if adversely determined, could reasonably be expected to have
a material adverse effect or which involve in the aggregate monetary amounts
or claims in excess of $50,000 not fully covered by insurance without
reservation of right; (ii) any proposal by any public authority to acquire the
Property or Collateral or any portion thereof; and (iii) the occurrence of any
Default or Event of Default hereunder.
(m) Loan Documents. Borrower shall comply with and observe all terms
and conditions of the Loan Documents.
(n) Recordation of Documents. Borrower shall cooperate with Lender to
ensure that within ten (10) days after the date hereof, the Mortgage (if any),
financing statements and other recordable documents shall be recorded or filed
in the proper official records of registry.
(o) Mergers and Acquisitions. Borrower shall not consolidate with or
merge into any other Person, except as approved in writing by Lender.
Borrower shall not permit any other Person to merge into it, or acquire all or
substantially all of the assets of any other Person unless, after such merger
or acquisition, Borrower or its successor-in-interest shall continue to meet
all of the requirements and conditions hereunder, including but not limited
to, those set forth in Section III(a) and (b).
(p) Transactions with Affiliates. In addition to any other covenant
in this Agreement that may apply to affiliate transactions, Borrower shall not
enter into any contractual obligation relating to the Enterprise with any
affiliate or subsidiary of Borrower or engage in any other transaction
relating to the Enterprise with any affiliate or subsidiary of Borrower except
upon terms at least as favorable to Borrower as an arms-length transaction on
commercially reasonable terms. For purposes of this subsection, the CFA
Management Agreement shall be deemed to be fair and reasonable.
(q) Accounting Changes. Borrower shall not change (i) its/their
fiscal year (currently as indicated on the Addendum) or (ii) its/their
accounting practices except as required by GAAP.
(r) No Proceedings. Borrower shall not institute, or cause or permit
to be instituted against it, any proceedings for the appointment of a
receiver, trustee, liquidator, or custodian of Borrower or of all or a
substantial part of the property thereof, or a voluntary or involuntary case
or other proceedings seeking liquidation, reorganization or other relief with
respect to the Borrower or the debts thereof under bankruptcy, insolvency or
other similar law.
SECTION IV. ASSUMPTION OF LOAN.
The Loan may be assumed one (1) time during its term, or any extension
thereof, by a new borrower provided that each of the following conditions are
met:
(a) The new borrower and any new guarantor, if any, shall provide to
Lender, at the expense of the new borrower, evidence satisfactory to Lender,
in its sole discretion, that the new borrower and new guarantor, if any, and
the Loan upon assumption shall meet Lender's underwriting standards then in
effect. Such obligation shall include providing to Lender financial
statements, appraisals, credit reports, environmental reports and such other
documentation as Lender shall reasonably request.
(b) The new borrower must purchase all of the Collateral and all of
Borrower's interest in the Property and, if a Franchise Agreement or License
Agreement is identified in the Addendum, be a franchisee or licensee, as
applicable in good standing of the Franchisor and/or Licensor, authorized to
operate the Enterprise.
(c) No Default or Event of Default shall exist under any Loan Document
or occur as a result of any assumption.
(d) The new borrower or Borrower shall pay to Lender a fixed
administrative fee equal to the greater of one percent of the then outstanding
principal balance of the Loan or $3,000.
(e) If the Loan has been sold to a trust, the transfer to a new
borrower shall not cause a change in the asset characteristics of the trust or
violate the trust's underwriting requirements. The determination of such
issues shall be at Lender's sole discretion.
(f) The new borrower shall assume all the obligations of Borrower
under the Loan Documents pursuant to an agreement approved by Lender, and, if
a Guaranty is in effect, Lender may require that a new guarantor shall assume
all the obligations of Guarantor under the Guaranty pursuant to an agreement
approved by Lender.
(g) Borrower shall obtain the prior written consent of Lender to the
assumption, which consent may be denied in Lender's reasonable discretion
based upon Lender's evaluation of the creditworthiness of the proposed new
borrower and/or guarantor or if in Lender's reasonable judgment the assumption
would have unfavorable tax consequences to Lender.
(h) Borrower shall have reimbursed Lender for its attorneys fees and
costs incurred in connection with such assumption.
SECTION V. INSURANCE.
At Borrower's sole cost and expense, Borrower shall:
(a) Keep the Collateral and the Property insured against such risks as
may be required by the Franchisor and/or Licensor, if any, and/or Lender,
including, without limitation, fire, lightning, windstorm, hail, explosion,
riot, riot attending a strike, civil commotion, aircraft, vehicles and smoke,
extended coverage, business interruption, life, peril and special form
insurance upon the Collateral and the Property insuring against loss or damage
by fire with extended coverage and against any other risks or hazards which,
in the opinion of Lender should be insured against, in an amount not less than
100% of the replacement cost thereof with an inflation guard endorsement (or,
otherwise blanket coverage in an amount reasonably satisfactory to Lender),
but in no event less than the minimum amount required to prevent the
imposition of any coinsurance requirement on the insured. If the Real
Property is in an area identified by the Federal Emergency Management Agency
as having special flood hazards (and such flood insurance has been made
available), Borrower shall carry a flood insurance policy meeting the
requirements of the current guidelines of the Federal Insurance Administration
with an insurance carrier acceptable to Lender, in an amount representing
coverage equal to the least of (i) the full insurable value of the Collateral
and the Property, (ii) the outstanding principal balance of the Loan, or (iii)
the maximum amount of insurance available under the Flood Protection Act of
1973, as amended. Borrower shall also carry comprehensive general public
liability insurance providing coverage not less than $1,000,000 per occurrence
for bodily injury and $500,000 per occurrence for property damage, business
interruption insurance in an amount equal to six (6) months of Actual Loss of
Business Income, and ordinance or law coverage if required by Lender;
(b) Cause all insurance policies required hereunder or insuring the
Collateral, Enterprise or Property (i) to contain a standard lender's loss
payable endorsement or mortgagee's endorsement acceptable to Lender providing
for payment directly to Lender and/or its designees, (ii) to provide for a
minimum of 30 day's written notice to Lender prior to cancellation or
modification or non-renewal, (iii) to provide that payment of the premium by
Lender will otherwise cause the policy to remain in force, (iv) to provide
coverage on all buildings or other structures, by direct mention or allowance
in the policy, (v) to contain loan number, property address and insured names,
and (vi) to be issued by companies authorized to issue such policies in the
state in which the Property is located having at all times prior to the
payment of the Note a General Policy Rating of AA-VIII or better in Best's
Key Rating Guide or AA by Standard and Poor's and no lower by either of Best's
or Standard & Poor's;
(c) Timely pay all premiums, fees and charges required in connection
with all of its insurance policies and otherwise continue to maintain such
policies in full force and effect; and
(d) Promptly deliver the insurance policies, certificates (and
renewals) thereof or other evidence of compliance herewith to Lender.
Borrower hereby (A) pledges and assigns to Lender and agrees to transfer and
deliver to Lender all moneys which may become due and payable with respect to
the Collateral under any policy insuring the Collateral, including return of
unearned premium, (B) directs any such insurance company to make payment
directly to Lender and (C) authorizes Lender, in its sole discretion, to apply
the same as set forth herein. If Borrower fails to insure the Collateral or
to take any other action as required by this Section, Lender may, in addition
to its other rights and remedies and in its sole discretion (and without any
obligation) obtain such insurance or take such other action and Borrower shall
immediately reimburse Lender for all costs and expenses incurred by Lender
thereby.
SECTION VI. CASUALTY AND CONDEMNATION.
In the event of any casualty or condemnation of the Collateral or any
portion thereof or a transfer in lieu of or in anticipation of condemnation (a
"Loss"):
(a) Borrower shall give prompt written notice thereof to Lender. Any
insurance proceeds or awards with respect to such Loss (the "Loss Proceeds")
shall be payable to Lender. Borrower shall proceed promptly and diligently to
prosecute in good faith the settlement or compromise of any and all claims or
proceedings relating to such Loss or Loss Proceeds; provided, however, any
such settlement or compromise shall be subject to Lender's prior written
consent, which consent shall not be unreasonably withheld. Borrower hereby
authorizes and directs any affected insurance company and any affected
governmental body responsible for such condemnation to make payment of the
Loss Proceeds directly to Lender. If Borrower receives any Loss Proceeds,
Borrower shall promptly pay over such Loss Proceeds to Lender. Borrower
hereby covenants that until such Loss Proceeds are so paid over to Lender,
Borrower shall hold such Loss Proceeds in trust for the benefit of Lender and
shall not commingle such Loss Proceeds with any other funds or assets of
Borrower or any other Person.
(b) Borrower hereby irrevocably assigns to Lender all Loss Proceeds to
which Borrower may become entitled by reason of its interest in the Property
if a Loss occurs. All Loss Proceeds shall be paid to Lender and applied
pursuant to this section. Subject to the preceding subsection (a) and to the
last sentence of this subsection (b), Borrower shall take all appropriate
action in connection with each such proceeding, settlement and adjustment and
shall pay all expenses thereof, including, if Lender shall elect to
participate therein, the cost of Lender's participation (including the fees
and disbursements of counsel); provided, however, that any final settlement or
adjustment shall be subject to the prior written consent of Lender unless the
Loss Proceeds are sufficient to prepay the Note in full, together with the
Yield Maintenance Fee specified in the Note and all accrued and unpaid
interest thereon and all other amounts due thereon. Borrower hereby appoints
Lender as its lawful attorney-in-fact, which appointment, coupled with an
interest, is irrevocable for the foregoing purpose and as such is duly
authorized and empowered to receive, receipt for, discharge and satisfy any
such award and judgment on behalf of Borrower, which receipt, discharge and
satisfaction shall be as legally binding and effective as if given directly by
Borrower; provided, however, that nothing herein contained shall deprive
Borrower of the right to contest, pursuant to Section VII, either the
necessity of any condemnation or the value placed on the Property. So long as
an Event of Default shall have occurred and be continuing, Lender may, at its
option and with respect to its interests as set forth herein, commence, appear
in and prosecute, in its own name (or, at Lender's option, in the name of the
Borrower), any such action or proceeding or make any compromise or settlement
in connection with such damage, destruction or taking and obtain directly all
Loss Proceeds.
(c) If the Property suffers a Loss, Borrower shall restore the
Property (or, in the case of a taking, the remaining Property) in such manner
as to restore the Property to the same condition, as nearly as possible, as
existed immediately prior to such casualty or taking (the "Restoration"),
whether or not the Loss Proceeds are sufficient therefor. If the cost of any
Restoration made by Borrower pursuant to this section shall exceed the amount
of the Loss Proceeds, such deficiency shall be paid by Borrower. The Loss
Proceeds shall be held by Lender or its agent and, provided that (i) no Event
of Default has occurred (ii) Lender reasonably determines that (a) such
Restoration is feasible and (b) following the Restoration the ratio which the
unpaid principal balance of the Loan bears to the value of the Collateral (as
determined by Lender) ("LTV") shall not exceed the LTV determined by Lender as
of the date of this Agreement, and (iii) the Franchise Agreement and License
Agreement, if any, have not terminated and shall not terminate as a result of
the Loss and/or Restoration, the Loss Proceeds, shall be disbursed to Borrower
as hereinafter set forth, provided that if the estimated cost of such
Restoration exceeds the amount of the Loss Proceeds, Borrower shall deliver to
Lender or its agent the estimated deficiency before commencing work. Lender
or its agent shall release such Loss Proceeds to Borrower, subject to such
reasonable procedural requirements as Lender or its agent may prescribe, from
time to time. Any portion of the Loss Proceeds which is not applied to the
Restoration shall be applied by Lender on the next loan installment date (as
provided in the Note) toward the prepayment of the entire outstanding
principal amount of the Loan, plus accrued and unpaid interest thereon, and
the Yield Maintenance Fee and all other amounts outstanding under the Loan
Documents, provided Borrower shall remain liable for any deficiency.
SECTION VII. PERMITTED CONTESTS.
After prior notice to Lender, Borrower may contest, by appropriate legal
or other proceedings conducted in good faith and with due diligence, the
amount, validity or application, in whole or in part, of any imposition or
lien therefor, any legal requirement, any insurance requirement or any lien of
any laborer, mechanic, materialman, supplier or vendor, provided that (a) the
Collateral and the Property, or any part thereof or estate or interest
therein, shall not be in any danger of being sold, forfeited or lost by reason
of such proceedings; (b) in the case of (i) liens of laborers, mechanics,
materialmen, suppliers or vendors or (ii) the impositions, or liens therefor,
such proceedings shall suspend the foreclosure of any such lien or any other
collection thereof from the Collateral or the Property; (c) in the case of a
legal requirement, Lender shall not be in any danger of any criminal liability
or, unless Borrower shall have furnished a bond or other security therefor
reasonably satisfactory to Lender, any additional civil liability for failure
to comply therewith, and the Property, or any part thereof or estate or
interest therein, shall not be subject to the imposition of any lien as a
result of such failure which is not properly contested pursuant to this
subsection; (d) in the case of any insurance requirement, no insurance
coverage required to be maintained pursuant to the Mortgage, if any, or this
Agreement shall be canceled or jeopardized; (e) no Default or Event of Default
shall have occurred; and (f) if reasonably required by Lender, Borrower shall
have furnished to Lender a bond or other security reasonably satisfactory to
Lender.
SECTION VIII. PERFORMANCE BY LENDER.
If Borrower shall fail to pay or perform any of its obligations herein
contained or under any other Loan Documents, Lender upon five (5) days prior
written notice to Borrower (except as otherwise expressly permitted by any
Loan Document or in the event of an emergency when no notice need be given)
may, but need not, make (or cause to be made) any such payment or perform (or
cause to be performed) any such obligation of Borrower hereunder or thereunder
(provided Borrower is not contesting such payment or performance as permitted
by Section VII), in any form and manner deemed reasonably expedient by Lender
as agent of Borrower, and any amount so paid or expended (plus reasonable
compensation to Lender for its out-of-pocket and other expenses (including
legal expenses) for each matter for which it acts under this Loan Agreement),
with interest thereon at the Demand Rate, shall be added to the obligations of
Borrower and shall be repaid to Lender upon demand. No such action of Lender
shall be considered as a waiver of any right accruing to it on account of the
occurrence of any Default, any Event of Default, or any default or event of
default under any other Loan Document.
SECTION IX. LENDER DISCUSSIONS WITH FRANCHISOR/LICENSOR.
(a) Communications with Franchisor/Licensor. Borrower shall provide
to Lender or its representatives (i) copies of annual financial reports (and
such other reports as Lender may from time to time request) required under the
Franchise Agreement and/or License Agreement, if any, at the same time it
provides such reports to the Franchisor and/or Licensor, as the case may be,
and (ii) any notices from Franchisor and/or Licensor of an event of default or
other event or condition which could have a material adverse effect on Lender,
promptly following receipt by Borrower, provided that such disclosure would
not create a breach of the Franchise Agreement and/or License Agreement. If
and to the extent that any disclosure required under clauses (i) or (ii) of
the preceding sentence is not made because of the provision in the last clause
of the preceding sentence, notice of such nondisclosure and the nature of
information not disclosed shall be provided to Lender at the time such
disclosure would have been required to be made. Borrower hereby authorizes
Lender to discuss with the Franchisor and/or Licensor, if any, Borrower's
operations relating to car counts and ticket averages and any matters relating
to the Franchise Agreement and/or License Agreement. Borrower further
consents to the release to Lender by the Franchisor and/or Licensor of any
information relating to the foregoing matters, and instructs the Franchisor
and/or Licensor to release any information relating to the foregoing matters
upon the request of Lender.
SECTION X. MISCELLANEOUS.
(a) Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lender or Borrower under this Agreement or the other Loan Documents shall be
in writing and sent by facsimile transmission, mailed or delivered to each
party at its facsimile number or address set forth below (or to such other
facsimile number or address for any party as indicated in any notice given by
that party to the other party). All such notices and communications shall be
effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the Business Day following the deposit with such
service; (b) when mailed, first class postage prepaid and addressed as
aforesaid through the United States Postal Service, upon receipt; (c) when
delivered by hand, upon delivery; and (d) when sent by facsimile transmission,
upon confirmation of receipt.
Lender: ENTERPRISE MORTGAGE ACCEPTANCE COMPANY, LLC
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile:(000) 000-0000
Borrower: AS PROVIDED IN THE ADDENDUM
In any case where this Agreement authorizes or requires notices, requests,
demands or other communication by Borrower to Lender, Lender may conclusively
presume that anyone purporting to be a Person designated in any borrowing
resolution, incumbency certificate or in any other such document delivered by
Borrower to Lender, is such a Person.
(b) Expenses. Borrower shall pay on demand, whether or not any Loan
is made hereunder, (a) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Lender in connection with the
preparation, execution and delivery of, and the exercise of its duties under,
this Agreement and the other Loan Documents, and the preparation, execution
and delivery of amendments, consents and waivers hereunder and thereunder, (b)
all recording costs and expenses (including, without limitation, documentary
stamp taxes, intangible recording taxes and the like), and (c) all reasonable
fees and expenses, including reasonable attorneys' fees and expenses, incurred
by Lender in the enforcement or attempted enforcement of any of Borrower's
obligations under the Loan Documents, including, but not limited to expenses
incurred in the investigation of Defaults or reasonably alleged Defaults, or
in preserving any of Lender's rights and remedies (including, without
limitation, all such fees and expenses incurred in connection with any
"workout" or restructuring affecting the Loan Documents or the Borrower's
obligations under the Loan Documents or any bankruptcy or similar proceeding
involving Borrower).
(c) Indemnification. To the fullest extent permitted by law, Borrower
agrees to protect, indemnify, defend and hold harmless Lender, Originator and
their respective shareholders, beneficial owners, members, directors,
partners, officers, employees, agents, attorneys, successors, assigns and any
affiliate thereof ("Indemnitees") from and against any and all liabilities,
losses, damages (whether direct or consequential), obligations, claims,
penalties, causes of action, fines, injunctions, costs or expenses of any kind
or nature (including without limitation, those arising out of, in respect of,
as a consequence of or in connection with any violation or failure to comply
with any Environmental Law) and from any and all suits, claims or demands
(including, without limitation, in respect of or for reasonable attorneys'
fees and other expenses whether incurred within or outside the judicial
process) arising on account of or in connection with or relating to Borrower,
the Property, the Collateral, the Loan or the Loan Documents, whether prior to
or after the date of this Agreement and whether prior to or after Borrower
became the lessee under the Lease, if any, including, without limitation, any
use by Borrower of any proceeds of the Loan, except to the extent such
liability arises from the willful misconduct or gross negligence of the
Indemnitees. Upon receiving knowledge of any suit, claim or demand asserted
by a third party that Lender believes is covered by this indemnity, Lender
shall give Borrower notice of the matter and an opportunity to defend it, at
Borrower's sole cost and expense, with legal counsel satisfactory to Lender.
Any failure or delay of Lender to notify Borrower of any such suit, claim or
demand shall not relieve Borrower of its obligations under this paragraph.
The obligations of Borrower under this paragraph shall survive the payment of
the Loan and the exercise of any rights or remedies by Lender.
(d) Waivers; Amendments. No term, covenant, agreement or condition of
this Agreement or any other Loan Document may be amended or waived unless such
amendment or waiver is in writing and is signed by Borrower and Lender. If
the Loan is sold to a trust, Section IV may not be amended unless Borrower has
provided to Lender an opinion of counsel satisfactory to Lender that such
amendment will not affect the tax treatment of the trust. No failure or delay
by Lender in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such
right preclude any other further exercise thereof or of any other right.
Unless otherwise specified in such waiver or consent, a waiver or consent
given hereunder shall be effective only in the specific instance and for the
specific purpose for which given.
(e) Successors and Assigns.
(i) Binding Effect. This Agreement and the other Loan Documents
shall be binding upon and inure to the benefit of Borrower, Lender, all
future holders of the Note and their respective successors and permitted
assigns, except that Borrower may not assign or transfer any of its
rights or obligations under any Loan Document except as provided in
Section IV. All references in this Agreement to any Person shall be
deemed to include all successors and assigns of such Person.
(ii) Assignments. Lender may at any time sell, assign, grant
participations in, delegate or otherwise transfer to any other Person
(an "Assignee") all or part of the rights and duties of Lender under
this Agreement and the other Loan Documents. To the extent indicated in
any document, instrument or agreement so selling, assigning, granting
participations in, or otherwise transferring to an Assignee such rights
and/or duties, (i) the Assignee shall acquire all of Lender's rights
(and, other than those duties retained, its duties) under this Agreement
and the other Loan Documents and (ii) the Assignee shall be deemed to be
the "Lender" under this Agreement and the other Loan Documents with the
authority to exercise such rights (and, other than those duties
retained, its duties) in the capacity of Lender.
(iii) Confidentiality. Lender may disclose the Loan Documents and
any other documents or financial or other information relating to
Borrower or any of its subsidiaries or affiliates or to the Enterprise
or the Collateral to any Assignee or potential Assignee, to any servicer
of the Loan, any investor, potential investor in interests in the Loan,
to any governmental authority regulating any of the foregoing or as may
be required by any governmental authority or any other authority having
jurisdiction over Lender and to any advisors of Lender, including,
without limitation, legal counsel; provided, however, Lender shall
instruct such individual to treat this information confidentially. The
terms of this provision shall replace and supersede any prior
understanding between the parties hereto regarding confidentiality and
the matters set forth herein, whether such understanding be verbal or
written.
(f) Setoff. In addition to any rights and remedies of Lender provided
by law, Lender shall have the right, without prior notice to Borrower, any
such notice being expressly waived by Borrower to the extent permitted by
applicable law, upon the occurrence and during the continuance of a Default or
an Event of Default, to set-off and apply against any indebtedness, whether
matured or unmatured, of Borrower to Lender, any amount owing from Lender to
Borrower. The aforesaid right of set-off may be exercised by Lender against
Borrower or against any trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, receiver or execution, judgment or attachment
creditor of any Borrower or against anyone else claiming through or against
Borrower or such trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by Lender prior to the occurrence of a Default or an Event of
Default. Lender agrees promptly to notify Borrower after any such set-off and
application made by Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application.
(g) No Third Party Rights. Nothing expressed in or to be implied from
this Agreement or any other Loan Document is intended to give, or shall be
construed to give, any Person, other than the Originator, the parties hereto
and thereto and their permitted successors and assigns, any benefit or legal
or equitable right, remedy or claim under or by virtue of this Agreement or
any other Loan Document.
(h) Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law of any jurisdiction, neither the legality, validity or enforceability
of the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
(i) Jury Trial. BORROWER, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY
ISSUE RELATING TO ANY LOAN DOCUMENT IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT.
(j) Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto
shall be deemed to constitute a complete, executed original for all purposes.
(k) Cumulative Rights. The rights, powers and remedies of Lender
hereunder are cumulative and in addition to all rights, powers and remedies
provided under any and all agreements between Borrower and Lender relating
hereto (including, without limitation, the Loan Documents), at law, in equity
or otherwise.
(l) Governing Law. This Loan Agreement shall be governed by and
construed in accordance with the laws of the State.
(m) Liability. If the Borrower consists of more than one Person, the
liability of all of such Persons under this Agreement shall be joint and
several.
(n) Survival. All representations, warranties, covenants and
agreements herein contained on the part of Borrower shall be effective until
the Loan is paid and performed in full, or longer as expressly provided
herein.
(o) Time of Essence. Time is of the essence under this Agreement and
in the performance of every term, covenant and obligation contained herein.
(p) Defeasance: At any time during the period beginning 2 years after
the date hereof, provided no Event of Default is then continuing, the Borrower
is permitted, on any regularly scheduled Payment Date (as defined in the Note)
selected by the Borrower upon at least thirty days notice to Lender (the
Defeasance Date), to defease all of the Loan (a Defeasance) (and release the
existing Collateral) provided that, among other conditions, the Borrower pays
on the Defeasance Date the Defeasance Deposit (as defined below). In
addition, in connection with any such defeasance, the Borrower is required (a)
to grant to Lender a valid perfected first priority security interest in the
Defeasance Deposit and (b) to deliver to Lender, among other things, (i) a
written confirmation from each rating agency which has rated bonds or other
securities issued by an entity which holds the Loan or an interest in the Loan
that such Defeasance will not result in the qualification, downgrade or
withdrawal of the ratings of such bonds or other securities and (ii) such
opinions of counsel, in form and substance satisfactory to Lender, as may be
required by Lender. The (Defeasance Deposit) means any direct noncancellable
obligations of the United States Government, including, without limitation,
treasury bills, notes and bonds in an amount sufficient to provide payments on
or prior to, but as close as possible to, all successive scheduled Payment
Dates upon which interest and/or principal payments are required under the
Loan from and after the Defeasance Date through and including the Maturity
Date and in amounts equal to the payments due on such dates under the Loan and
in the amount of the full outstanding principal balance of the Loan and all
deferred interest thereon on the Maturity Date. Upon the satisfaction of such
conditions, the existing Collateral will be released from the Mortgage and the
Security Agreement and the Defeasance Deposit will serve as the sole
collateral for the repayment of the Loan.
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be
executed, under seal, as of the day and year first above written.
CAROLINA LUBES, INC.
Attest:
By: By:
Name: Name: Xxxxxxx X. Xxxxxx
Title: Title: President
[CORPORATE SEAL]
ENTERPRISE MORTGAGE ACCEPTANCE COMPANY,
LLC
By:
Name:
Title:
ADDENDUM TO LOAN AGREEMENT
Borrower(s):
CAROLINA LUBES, INC., a corporation organized and existing
under the laws of the State of Florida
Address of
Chief 000 Xxxxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxx Xxxxxxxx 00000
Office: County of Wake
Enterprise
Address: See attached acehdule of Properties
Enterprise: Each Enterprise which is referred to in this
Agreement is a motor oil change facility operated at
the Enterprise Address under the Trade Name.
Trade Name: Jiffy Lube
Enterprise
Identification
Number: See attached acehdule of Properties
Borrower's
Address for 000 Xxxxxxxx Xxxx
Xxxxxxx: Xxxxxxx, Xxxxx Xxxxxxxx 00000
Borrower's
Facsimile
Number for
Notices: (000) 000-0000
Federal
Taxpayer
Identification
Number: 00-0000000
Loan Amount: $________________
Commitment
Date: December 3, 1997
Application
Date: December 17, 1997
Franchisor: JIFFY LUBE INTERNATIONAL, INC., a Nevada corporation,
or its successors or assigns under the Franchise
Agreement.
Franchise
Agreement: See attached Schedule of Franchise Agreements
Licensor: Jiffy Lube International, Inc., a Nevada corporation,
or its successors or assigns under the License
Agreement.
License
Agreement: See attached Schedule of Franchise Agreements
Environmental Each Borrower, and the following additional Persons
Indemnitor(s): (if any):
Lucor, Inc.
Lease: See attached Schedule of leases
Mortgage: That certain mortgage or deed of trust, identified in
the Note, dated the date hereof made by Mortgagor to
Lender.
Mortgagor: Borrower
Permitted Liens designated as Permitted Liens in the Mortgage,
Liens: if any, Liens (other than Mortgage liens, judgments,
or other liens which secure monetary obligations) set
forth in the title commitments and/or policies issued
by Chicago Title Insurance Company to lender with
respect to the properties listed on the annexed
Schedule of Properties, and the following: None
Owner(s) of
Borrower
Equity
Securities: Lucor, Inc.
Borrower's
Fiscal Year-
end: December 31 of each year.
Guarantor(s): Lucor, Inc. and the Affiliate Borrower
SIGNATURE OF BORROWER(S):
CAROLINA LUBES, INC.
By:__________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
EXHIBIT A
BORROWER
SEMI-ANNUAL COMPLIANCE CERTIFICATE
ENTERPRISE MORTGAGE ACCEPTANCE COMPANY, LLC
Attention:
Re: Loan Agreement, dated ____________ between__________ and
ENTERPRISE MORTGAGE ACCEPTANCE COMPANY, LLC (Loan Agreement),
Enterprise No. _____.
(1) Attached hereto are true and correct copies of (a ) an income statement
and a balance sheet for each of the Enterprise and Borrower for the twelve
months ended [December 31] [June 30]19__ and (b) the calculation of Borrower
Adjusted Free Cash Flow for such 12 months for the Enterprise in the form of
the attached "Calculation of Adjusted Free Cash Flow". (If Borrower's fiscal
year-end does not end on December 31 or June 30, Borrower shall attach to the
compliance certificate true and correct copies of its income statement and
balance sheet for Borrower's most recent fiscal year (unless already
provided). Such financial statements shall be audited(FN-1), reviewed (FN-2)
or certified (FN-3) as required.)
(2) If the loan was personally guaranteed, attached hereto, for the
compliance certificate due March 31, is each guarantor's federal tax return
for the year ended December 31, 19 , and a personal financial
statement as of December 31, 19 .
(3) Borrower owns ____ [INSERT NUMBER OF AND TRADE NAME OF ENTERPRISE] as
of the date hereof. Borrower and its Affiliates (including principals) is
[are] involved in the operation of _____ [INSERT NUMBER OF AND TRADE NAME OF
ENTERPRISE] as of the date hereof.
(4) Borrower hereby certifies that all real estate taxes due and owing in
connection with the Enterprise have been duly and punctually paid as follows:
Date paid:
Amount paid:
Address and phone no.
of office where taxes
were sent:
(5) Borrower hereby certifies to ENTERPRISE MORTGAGE ACCEPTANCE COMPANY, LLC
that (i) all representations and warranties made by Borrower in the above-
referenced Loan Agreement as of the date hereof are true and correct in all
material respects as if made on the date hereof, except as previously
disclosed in writing or as otherwise disclosed in an exhibit attached hereto,
(ii) Borrower has performed all of its covenants and other agreements
required to be performed under the Loan Documents (as defined in the Loan
Agreement) as of the date hereof, (iii) no Event of Default (as defined in the
Loan Agreement) has occurred and Borrower has no reason to believe that an
Event of Default will occur any time in the six-month period following the
date hereof; and (iv) the attached financial statements are true and correct
as of the date thereof.
IN WITNESS WHEREOF, the undersigned has caused this Compliance Certificate to
be executed and delivered for and on behalf of this day of
,19 .
[Borrower]
By:
Name:
Title:
FN-1 Financial statements shall be compiled and audited by an accountant and
certified by Borrower if the aggregate amount of Borrower's and its Affiliates
original principal Loan balance is equal to or greater than $5 million after
taking into consideration any loans that have been prepaid or assumed under the
Loan Documents.
FN-2 Financial statements shall be compiled and reviewed by an accountant and
certified by Borrower if the aggregate amount of Borrower's and its Affiliates
original principal Loan balance is equal to or greater than $2.5 million or
less than $5 million after taking into consideration any loans that have been
prepaid or assumed under the Loan Documents.
FN-3 Financial statements shall be compiled and certified by an accountant and
certified by Borrower if the aggregate amount of Borrower's and its Affiliates
original principal Loan balance is equal to or less than $2.5 million after
taking into consideration any loans that have been prepaid or assumed under the
Loan Documents.
CALCULATION OF ADJUSTED FREE CASH FLOW (FN-4)
Date of Report:
Borrower:
Enterprise Number:
Period Covered:
1. Enterprise Revenues
2. GAAP Net Income for the Period Covered:
3. Plus: Income Taxes if included in (2) above
4. Plus: Interest Payments on any indebtedness
5. Plus: Non-cash charges to (2) above
a) depreciation and amortization
b) other
6. Plus: Expenses included in (2) above , net of tax effects, if any,
consisting of the management fee (excluding market-rate fees paid
to any on-site manager), automobiles, administrative fees, legal
and accounting services, other professional services, office
supplies, and travel and entertainment and other items deemed to
be owner compensation and non-recurring expenses including those
required by [franchisor].
7. Equals: Adjusted Free Cash Flow for the Period Covered
FN-4 All definitions have the same meaning given in the Loan Agreement.
