EXHIBIT 10.3
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made as of December 18, 1998,
by and between FFCA ACQUISITION CORPORATION, a Delaware corporation ("FFCA"),
whose address is 00000 Xxxxx Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, and
RALLY'S HAMBURGERS, INC., a Delaware corporation ("Debtor"), whose address is
Building One, 00000 00xx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms used in
this Agreement shall have the meanings set forth in Section 1. Debtor has
requested from FFCA, and applied for, the Loans to provide long-term financing
for the Premises, and for no other purpose whatsoever. Each Loan will be
evidenced by a Note and secured by a first priority security interest in the
corresponding Premises pursuant to a Mortgage. FFCA has committed to make the
Loans pursuant to the terms and conditions of the Commitment, this Agreement and
the other Loan Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. Definitions. The following terms shall have the following
meanings for all purposes of this Agreement:
"Action" has the meaning set forth in Section 10.A(4).
"Affiliate" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
ownership of voting securities or otherwise.
"Closing" shall have the meaning set forth in Section 4.
"Closing Date" shall have the meaning set forth in Section 4.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"Commitment" means that certain Commitment Letter dated September 23,
1998 between FFCA and Debtor, and any amendments or supplements thereto.
"Counsel" means legal counsel to Debtor, licensed in the states in which
(i) the Premises are located, (ii) Debtor is incorporated, and (iii) Debtor
maintains its chief executive offices, as selected by Debtor and approved by
FFCA.
"Debtor Entities" means, collectively, Debtor and any Affiliate of
Debtor, including successors by operation of law to Debtor and any Affiliate of
Debtor by merger or otherwise.
"De Minimis Amounts" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms which does not constitute a violation of any
Environmental Laws and is customarily employed in, or associated with, similar
businesses located in the states in which the Premises are located.
"Disclosures" has the meaning set forth in Section 14.P.
"Environmental Condition" means any condition with respect to soil,
surface waters, groundwaters, land, stream sediments, surface or subsurface
strata, ambient air and any environmental medium comprising or surrounding any
of the Premises, whether or not yet discovered, which could or does result in
any damage, loss, cost, expense, claim, demand, order or liability to or against
Debtor or FFCA by any third party (including, without limitation, any
Governmental Authority), including, without limitation, any condition resulting
from the operation of Debtor's business at the Premises and/or the operation of
the business of any other property owner or operator in the vicinity of the
Premises and/or any activity or operation formerly conducted by any person or
entity on or off the Premises.
"Environmental Indemnity Agreement" or "Environmental Indemnity
Agreements" means, as the context may require, the environmental indemnity
agreement dated as of the date of this Agreement to be executed by Debtor for
the benefit of FFCA with respect to a Premises or the environmental indemnity
agreements dated as of the date of this Agreement to be executed by Debtor for
the benefit of FFCA with respect to all of the Premises, as the same may be
amended from time to time. An Environmental Indemnity Agreement will be executed
for each Premises.
"Environmental Insurer" means American International Specialty Lines
Insurance Company or such other environmental insurance company as FFCA may
select in its sole discretion.
"Environmental Laws" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to Hazardous Materials and/or the protection of human
health or the environment by reason of a Release or a Threatened Release of
Hazardous Materials or relating to liability for or costs of Remediation or
prevention of Releases. "Environmental Laws" includes, but is not limited to,
the following statutes, as amended, any successor thereto, and any regulations
promulgated
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pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. "Environmental Laws" also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
Governmental Authority of the environmental condition of the property; requiring
notification or disclosure of Releases or other environmental condition of the
Premises to any Governmental Authority or other person or entity, whether or not
in connection with transfer of title to or interest in property; imposing
conditions or requirements relating to Hazardous Materials in connection with
permits or other authorization for lawful activity; relating to nuisance,
trespass or other causes of action related to Hazardous Materials; and relating
to wrongful death, personal injury, or property or other damage in connection
with the physical condition or use of the Premises by reason of the presence of
Hazardous Materials in, on, under or above the Premises.
"Environmental Policies" means the environmental insurance policies
issued by Environmental Insurer to FFCA with respect to the Premises, which
Environmental Policies shall be in form and substance satisfactory to FFCA in
its sole discretion.
"Event of Default" has the meaning set forth in Section 10.
"FCCR Amount" has the meaning set forth in Section 10.A(6).
"Fee" means an underwriting, valuation, processing and commitment fee
equal to 1.00% of the sum of the Loan Amounts for all of the Premises, which Fee
shall be payable as set forth in Section 3.
"FFCA Entities" means, collectively, FFCA, Franchise Finance and any
Affiliate of FFCA or Franchise Finance.
"Franchise Finance" means Franchise Finance Corporation of America, a
Delaware corporation, and its successors.
"Governmental Authority" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the states where the Premises
are located or any political subdivision thereof.
"Hazardous Materials" means (a) any toxic substance or hazardous waste,
substance, solid waste or related material, or any pollutant or contaminant; (b)
radon gas, asbestos in any
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form which is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment which contains dielectric fluid containing
levels of polychlorinated biphenyls in excess of federal, state or local safety
guidelines, whichever are more stringent, or any petroleum product; (c) any
substance, gas, material or chemical which is or may be defined as or included
in the definition of "hazardous substances," "toxic substances," "hazardous
materials," "hazardous wastes," "regulated substances" or words of similar
import under any Environmental Laws; and (d) any other chemical, material, gas
or substance the exposure to or release of which is or may be prohibited,
limited or regulated by any Governmental Authority that asserts or may assert
jurisdiction over the Premises or the operations or activity at the Premises, or
any chemical, material, gas or substance that does or may pose a hazard to the
health and/or safety of the occupants of the Premises or the owners and/or
occupants of property adjacent to or surrounding the Premises.
"Indemnified Parties" has the meaning set forth in Section 12.
"Loan" or "Loans" means, as the context may require, the loan for each
Premises, or the loans for all of the Premises, described in Section 2.
"Loan Amount" or "Loan Amounts" means, as the context may require, the
aggregate amount set forth in Section 2 or, with respect to each Premises, the
individual amount set forth in Exhibit A.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Mortgages, the Environmental Indemnity Agreements, the UCC-1 Financing
Statements and all other documents, instruments or agreements executed in
connection therewith or contemplated thereby.
"Modified FCCR Amount" has the meaning set forth in Section 10.A(6).
"Mortgage" or "Mortgages" means, as the context may require, the deed of
trust or mortgage dated as of the date of this Agreement to be executed by
Debtor for the benefit of FFCA with respect to a Premises or the deeds of trust
or mortgages dated as of the date of this Agreement to be executed by Debtor for
the benefit of FFCA with respect to all of the Premises, as the same may be
amended from time to time. A Mortgage will be executed for each Premises.
"Note" or "Notes" means, as the context may require, the promissory note
dated as of the date of this Agreement to be executed by Debtor in favor of FFCA
with respect to a Premises or the promissory notes dated as of the date of this
Agreement to be executed by Debtor in favor of FFCA with respect to all of the
Premises, as the same may be amended from time to time, including, without
limitation, as a result of the payment of the FCCR Amount or the Modified FCCR
Amount pursuant to Section 10. A Note will be executed for each Premises in the
Loan Amount corresponding to such Premises.
"Notice" has the meaning set forth in Section 14.A.
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"Other Agreements" means, collectively, all agreements and instruments
between, among or by (1) any of the Debtor Entities, and, or for the benefit of,
(2) any of the FFCA Entities, including, without limitation, promissory notes
and guaranties; provided, however, the term "Other Agreements" shall not include
the agreements and instruments defined as the Loan Documents.
"Other Loans" means any loans to Debtor evidenced by the Other
Agreements.
"Other Notes" means the promissory notes relating to the Other Loans.
"Other Premises" means the premises relating to the Other Loans.
"Participations" has the meaning set forth in Section 14.P.
"Permitted Concept" means either a Checkers Drive-in, Rally's, Carl's,
Jr. or Hardee's restaurant. The term "Permitted Concept" shall also include any
other national or regionally recognized restaurant concept operated at a
Premises provided such other concept is dual branded at such Premises with at
least one of the restaurant concepts listed in the preceding sentence.
"Permitted Exceptions" means those recorded easements, restrictions,
liens and encumbrances set forth as exceptions in the title insurance policies
issued by Title Company to FFCA and approved by FFCA in connection with the
Loans.
"Permitted Merger" has the meaning set forth in Section 11.B.
"Person" means any individual, corporation, partnership, limited
liability company, trust, unincorporated organization, Governmental Authority or
any other form of entity.
"Premises" means the parcel or parcels of real estate corresponding to
the FFCA File Numbers and addresses identified on Exhibit A attached hereto,
together with all rights, privileges and appurtenances associated therewith and
all buildings, fixtures and other improvements, equipment, trade fixtures,
appliances, machinery, furniture and other personal property now or hereafter
located thereon (whether or not affixed to such real estate). As used herein,
the term "Premises" shall mean either a singular property or all of the
properties collectively, as the context may require.
"Questionnaires" means the environmental questionnaires completed by
Debtor with respect to the Premises and submitted to Environmental Insurer in
connection with the issuance of the Environmental Policies.
"Release" means any presence, release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials.
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"Remediation" means any response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Material, any actions to prevent, cure or mitigate any
Release, any action to comply with any Environmental Laws or with any permits
issued pursuant thereto, any inspection, investigation, study, monitoring,
assessment, audit, sampling and testing, laboratory or other analysis, or any
evaluation relating to any Hazardous Materials.
"Securitization" means one or more sales, dispositions, transfers or
assignments by FFCA or any of the other FFCA Entities to a special purpose
corporation, trust or other entity identified by FFCA or any of the other FFCA
Entities of notes evidencing obligations to repay secured or unsecured loans
owned by FFCA or any of the other FFCA Entities (and, to the extent applicable,
the subsequent sale, transfer or assignment of such notes to another special
purpose corporation, trust or other entity identified by FFCA or any of the
other FFCA Entities), and the issuance of bonds, certificates, notes or other
instruments evidencing interests in pools of such loans, whether in connection
with a permanent asset securitization or a sale of loans in anticipation of a
permanent asset securitization. Each Securitization shall be undertaken in
accordance with all requirements which may be imposed by the investors or the
rating agencies involved in each such sale, disposition, transfer or assignment
or which may be imposed by applicable securities, tax or other laws or
regulations, including, without limitation, laws relating to FFCA's status as a
real estate investment trust.
"Securitized Loan Pool" means any pool or group of loans that are a part
of any Securitization.
"Substitute Premises" means one or more parcels of real property
substituted for a Premises in accordance with the requirements of Section 13,
together with all rights, privileges and appurtenances associated therewith, and
all buildings, fixtures and other improvements, equipment, trade fixtures,
appliances, machinery, furniture and other personal property located thereon
(whether or not affixed to such real estate). For purposes of clarity, where two
or more parcels of real property comprise a Substitute Premises, such parcels or
interests shall be aggregated and deemed to constitute the Substitute Premises
for all purposes of this Agreement.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding any of the Premises
which may result from such Release.
"Title Company" means the title insurance company described in Section
4.
"Transfer" has the meaning set forth in Section 14.P.
"UCC-1 Financing Statements" means such UCC-1 Financing Statements as
FFCA shall require to be executed and delivered by Debtor with respect to the
transactions contemplated by this Agreement.
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2. Transaction. On the terms and subject to the conditions set
forth in the Loan Documents, FFCA shall make the Loans. The Loans will be
evidenced by the Notes and secured by the Mortgages. Debtor shall repay the
outstanding principal amount of the Loans together with interest thereon in the
manner and in accordance with the terms and conditions of the Notes and the
other Loan Documents. The aggregate Loan Amount shall be $4,300,000.00,
allocated among the Premises as set forth on the attached Exhibit A. The Loans
shall be advanced at the Closing in cash or otherwise immediately available
funds subject to any prorations and adjustments required by this Agreement.
3. Underwriting, Valuation, Processing and Commitment Fee. Debtor
paid FFCA a portion of the Fee pursuant to the Commitment, and such portion was
deemed fully earned when received. The remainder of the Fee shall be paid at the
Closing and shall be deemed nonrefundable and fully earned upon the Closing. The
Fee constitutes FFCA's underwriting, valuation, processing and commitment fee.
In the event the transaction set forth in this Agreement fails to close due to a
breach or default by Debtor under this Agreement, FFCA shall retain the portion
of the Fee received by FFCA (without affecting or limiting FFCA's remedies set
forth in this Agreement).
4. Closing. (a) The Loans shall be closed simultaneously (the
"Closing") within 30 days following the satisfaction of all of the terms and
conditions contained in this Agreement, but in no event shall the date of the
Closing be extended beyond December 11, 1998, unless such extension shall be
approved by FFCA in its sole discretion (the date on which the Closing shall
occur is referred to herein as the "Closing Date").
(b) FFCA has ordered a title insurance commitment for each Premises
from Fidelity Title Insurance Company (the "Title Company"). Prior to the
Closing Date, the parties hereto shall deposit with Title Company all documents
and moneys necessary to comply with their obligations under this Agreement. All
costs of the transaction contemplated by this Agreement shall be borne by
Debtor, including, without limitation, the cost of title insurance and
endorsements, survey charges, UCC search charges, the attorneys' fees of Debtor,
attorneys' fees and expenses of FFCA (provided that FFCA shall advise Debtor
prior to the commencement of any legal work for which extraordinary fees would
be payable (i.e., fees in excess of a total of $________________) and discuss
with Debtor the most cost effective means to proceed), the cost of the
environmental reports and Environmental Policies to be delivered pursuant to
Section 9.E, FFCA's site inspection costs and fees, stamp taxes, mortgage taxes,
transfer fees, and escrow and recording fees. All real and personal property and
other applicable taxes and assessments and other charges relating to the
Premises which are due and payable on or prior to the Closing Date as well as
taxes and assessments due and payable subsequent to the Closing Date but which
Title Company requires to be paid at Closing as a condition to the issuance of
the title insurance policies described in Section 9.C, shall be paid by Debtor
at or prior to the Closing. The Closing documents shall be dated as of the
Closing Date.
Debtor and FFCA hereby employ Title Company to act as escrow agent in
connection with this transaction. Title Company shall not cause the transactions
described in this Agreement
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to close unless and until it has received written instructions from FFCA and
Debtor to do so. Debtor and FFCA will deliver to Title Company all documents,
pay to Title Company all sums and do or cause to be done all other things
necessary or required by this Agreement, in the reasonable judgment of Title
Company, to enable Title Company to comply herewith and to enable any title
insurance policy provided for herein to be issued. Title Company is authorized
to pay, from any funds held by it for FFCA's or Debtor's respective credit all
amounts necessary to procure the delivery of such documents and to pay, on
behalf of FFCA and Debtor, all charges and obligations payable by them,
respectively. Debtor will pay all charges payable by it to Title Company. Title
Company is authorized, in the event any conflicting demand is made upon it
concerning these instructions or the escrow, at its election, to hold any
documents and/or funds deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of Debtor and FFCA or to
interplead such documents and/or funds in an action brought in any such court.
Deposit by Title Company of such documents and funds, after deducting therefrom
its charges and its expenses and attorneys' fees incurred in connection with any
such court action, shall relieve Title Company of all further liability and
responsibility for such documents and funds. Title Company's receipt of this
Agreement and opening of an escrow pursuant to this Agreement shall be deemed to
constitute conclusive evidence of Title Company's agreement to be bound by the
terms and conditions of this Agreement pertaining to Title Company. Disbursement
of any funds shall be made by check, certified check or wire transfer, as
directed by FFCA. Title Company shall be under no obligation to disburse any
funds represented by check or draft, and no check or draft shall be payment to
Title Company in compliance with any of the requirements hereof, until it is
advised by the bank in which such check or draft is deposited that such check or
draft has been honored. Title Company is authorized to act upon any statement
furnished by the holder or payee, or a collection agent for the holder or payee,
of any lien on or charge or assessment in connection with the Premises,
concerning the amount of such charge or assessment or the amount secured by such
lien, without liability or responsibility for the accuracy of such statement.
The employment of Title Company as escrow agent shall not affect any rights of
subrogation under the terms of any title insurance policy issued pursuant to the
provisions thereof.
5. Representations and Warranties of FFCA. The representations and
warranties of FFCA contained in this Section are being made by FFCA as of the
date of this Agreement and the Closing Date to induce Debtor to enter into this
Agreement and consummate the transactions contemplated herein, and Debtor has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. FFCA represents and
warrants to Debtor as follows:
A. Organization of FFCA. FFCA has been duly formed, is
validly existing and has taken all necessary action to authorize the
execution, delivery and performance by FFCA of this Agreement.
B. Authority of FFCA. The person who has executed this
Agreement on behalf of FFCA is duly authorized so to do.
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C. Enforceability. Upon execution by FFCA, this Agreement
shall constitute the legal, valid and binding obligation of FFCA,
enforceable against FFCA in accordance with its terms.
All representations and warranties of FFCA made in this Agreement shall
survive the Closing.
6. Representations and Warranties of Debtor. The representations
and warranties of Debtor contained in this Section are being made by Debtor as
of the date of this Agreement and the Closing Date to induce FFCA to enter into
this Agreement and consummate the transactions contemplated herein, and FFCA has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. Debtor represents and
warrants to FFCA as follows:
A. Information and Financial Statements. Debtor has
delivered to FFCA financial statements (either audited financial
statements or, if Debtor does not have audited financial statements,
certified financial statements) and certain other information, which
financial statements and other information are true, correct and
complete in all material respects; and no material adverse change has
occurred with respect to any such financial statements and other
information provided to FFCA since the date such financial statements
and other information were prepared or delivered to FFCA. Debtor
understands mat FFCA is relying upon such financial statements and
information and Debtor represents that such reliance is reasonable. All
such financial statements were prepared in accordance with generally
accepted accounting principles consistently applied and, with respect to
the most recent financial statements delivered by Debtor to FFCA,
accurately reflect as of the date of this Agreement and the Closing
Date, the financial condition of each individual or entity to which they
pertain.
B. Organization and Authority. (1) Debtor is duly
organized, validly existing and in good standing under the laws of its
state of incorporation, and qualified as a foreign corporation to do
business in any jurisdiction where such qualification is required. All
necessary corporate action has been taken to authorize the execution,
delivery and performance of this Agreement and of the other documents,
instruments and agreements provided for herein.
(2) The person who has executed this Agreement on behalf of
Debtor is duly authorized so to do.
C. Enforceability of Documents. Upon execution by Debtor,
this Agreement and the other Loan Documents shall constitute the legal,
valid and binding obligations of Debtor, enforceable against Debtor in
accordance with their respective terms.
D. Litigation. Except as set forth on the attached Schedule
I, there are no proceedings or investigations pending or threatened
against or involving Debtor or the Premises before any arbitrator or
Governmental Authority which might reasonably result in
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any material adverse change in the contemplated business, condition,
worth or operations of Debtor or the Premises.
E. Absence of Breaches or Defaults. Debtor is not, and the
authorization, execution, delivery and performance of this Agreement and
the other Loan Documents will not result, in any breach or default under
any other document, instrument or agreement to which Debtor is a party
or by which Debtor, the Premises or any of the property of Debtor is
subject or bound. The authorization, execution, delivery and performance
of this Agreement and the other Loan Documents will not violate any
applicable law, statute, regulation, rule, ordinance, code, rule or
order.
F. Utilities. The Premises are served by ample public
utilities to permit full utilization of the Premises for their intended
purpose and all utility connection fees and use charges will have been
paid in full.
G. Intended Use and Zoning; Compliance With Laws. Debtor
intends to use the Premises solely for the operation of Permitted
Concepts, and related ingress, egress and parking, and for no other
purposes. Each of the Premises is in compliance with all applicable
zoning requirements and the use of each of the Premises as a Permitted
Concept does not constitute a nonconforming use under applicable zoning
requirements. The Premises comply with all applicable statutes,
regulations, rules, ordinances, codes, licenses, permits, orders and
approvals of each Governmental Authority having jurisdiction over the
Premises, including, without limitation, all health, building, fire,
safety and other codes, ordinances and requirements, all applicable
standards of the National Board of Fire Underwriters and the Americans
With Disabilities Act of 1990 and all policies or rules of common law,
in each case, as amended, and any judicial or administrative
interpretation thereof, including any judicial order, consent, decree or
judgment applicable to Debtor.
H. Area Development; Wetlands. No condemnation or eminent
domain proceedings affecting the Premises have been commenced or, to the
best of Debtor's knowledge, are contemplated. To the best of Debtor's
knowledge, the areas where the Premises are located have not been
declared blighted by any Governmental Authority. The Premises and/or the
real property bordering the Premises are not designated by any
Governmental Authority as a wetlands.
I. Licenses and Permits; Access. Debtor has all required
licenses and permits, both governmental and private, to use and operate
the Premises in the intended manner. There are adequate rights of access
to public roads and ways available to the Premises to permit full
utilization of the Premises for their intended purposes and all such
public roads and ways have been completed and dedicated to public use.
J. Condition of Premises. The Premises, including the
equipment located thereon, are of good workmanship and materials, fully
equipped and operational, in good condition and repair, free from
material structural defects, clean, orderly and sanitary, safe,
well-lit, landscaped, decorated and well-maintained.
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K. Environmental. Debtor is fully familiar with the present
use of the Premises, and, after due inquiry, Debtor has become generally
familiar with the prior uses of the Premises. No Hazardous Materials
have been used, handled, manufactured, generated, produced, stored,
treated, processed, transferred or disposed of at or on the Premises,
except in De Minimis Amounts and in compliance with all applicable
Environmental Laws, and no Release or Threatened Release has occurred at
or on the Premises. The activities, operations and business undertaken
on, at or about the Premises, including, but not limited to, any past or
ongoing alterations or improvements at the Premises, are and have been
at all times, in compliance with all Environmental Laws. No further
action is required to remedy any Environmental Condition or violation
of, or to be in full compliance with, any Environmental Laws, and no
lien has been imposed on the Premises by any Governmental Authority in
connection with any Environmental Condition, the violation or threatened
violation of any Environmental Laws or the presence of any Hazardous
Materials on or off the Premises.
There is no pending or threatened litigation or proceeding
before any Governmental Authority in which any person or entity alleges
the violation or threatened violation of any Environmental Laws or the
presence, Release, Threatened Release or placement on or at the Premises
of any Hazardous Materials, or of any facts which would give rise to any
such action, nor has Debtor (a) received any notice (and Debtor has no
actual knowledge) that any Governmental Authority or any employee or
agent thereof has determined, threatens to determine or requires an
investigation to determine that there has been a violation of any
Environmental Laws at, on or in connection with the Premises or that
there exists a presence, Release, Threatened Release or placement of any
Hazardous Materials on or at the Premises, or the use, handling,
manufacturing, generation, production, storage, treatment, processing,
transportation or disposal of any Hazardous Materials at or on the
Premises; (b) received any notice under the citizen suit provision of
any Environmental Law in connection with the Premises or any facilities,
operations or activities conducted thereon, or any business conducted in
connection therewith; or (c) received any request for inspection,
request for information, notice, demand, administrative inquiry or any
formal or informal complaint or claim with respect to or in connection
with the violation or threatened violation of any Environmental Laws or
existence of Hazardous Materials relating to the Premises or any
facilities, operations or activities conducted thereon or any business
conducted in connection therewith.
The information and disclosures in the Questionnaires is true,
correct and complete in all material respects, FFCA and Environmental
Insurer may rely on such information and disclosures, and the person or
persons executing the Questionnaires were duly authorized to do so.
L. Title to Premises; First Priority Lien. As of the
Closing Date, fee title to each of the Premises is vested in Debtor,
free and clear of all liens, encumbrances, charges and security
interests of any nature whatsoever, except the Permitted Exceptions.
Debtor is the owner of all equipment, trade fixtures, appliances,
machinery, furniture and other
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personal property located on or at each of the Premises free and clear
of all liens, encumbrances, charges and security interests of any nature
whatsoever. Upon Closing, FFCA shall have a first priority lien upon and
security interest in each of the Premises pursuant to the Mortgages and
the UCC-1 Financing Statements.
M. No Other Agreements and Options. Neither Debtor nor the
Premises are subject to any commitment, obligation, or agreement,
including, without limitation, any right of first refusal, option to
purchase or lease granted to a third party, which could or would prevent
or hinder FFCA in making the Loans or prevent or hinder Debtor from
fulfilling its obligations under this Agreement or the other Loan
Documents.
N. No Mechanics' Liens. There are no outstanding accounts
payable, mechanics' liens, or rights to claim a mechanics' lien in favor
of any materialman, laborer, or any other person or entity in connection
with labor or materials furnished to or performed on any portion of the
Premises; no work has been performed or is in progress nor have
materials been supplied to the Premises or agreements entered into for
work to be performed or materials to be supplied to the Premises prior
to the date hereof, which will not have been fully paid for on or before
the Closing Date or which might provide the basis for the filing of such
liens against the Premises or any portion thereof; Debtor shall be
responsible for any and all claims for mechanics' liens and accounts
payable that have arisen or may subsequently arise due to agreements
entered into for and/or any work performed on, or materials supplied to
the Premises prior to the Closing Date; Debtor has made no contract or
arrangement of any kind the performance of which by the other party
thereto would give rise to a lien on the Premises; and Debtor shall and
does hereby agree to defend, indemnify and forever hold FFCA and FFCA's
designees harmless from and against any and all such mechanics' lien
claims, accounts payable or other commitments relating to the Premises.
O. No Reliance. Debtor acknowledges that FFCA did not
prepare or assist in the preparation of any of the projected financial
information used by Debtor in analyzing the economic viability and
feasibility of the transaction contemplated by this Agreement.
Furthermore, Debtor acknowledges that it has not relied upon, nor may it
hereafter rely upon, the analysis undertaken by FFCA in determining the
Loan Amounts, and such analysis will not be made available to Debtor.
All representations and warranties of Debtor made in this Agreement
shall be and will remain true and complete as of and subsequent to the Closing
Date as if made and restated in full as of such time and shall survive the
Closing. Debtor acknowledges and agrees that Environmental Insurer may rely on
the environmental representations and warranties set forth in the preceding
subsection K, that Environmental Insurer is an intended third-party beneficiary
of such representations and warranties and that Environmental Insurer shall have
all rights and remedies available at law or in equity as a result of a breach of
such representations and warranties, including, to the extent applicable, the
right of subrogation.
7. Covenants. Debtor covenants to FFCA from and after the Closing
Date as follows:
12
A. Inspections. Debtor shall, at all reasonable times, (i)
provide FFCA and FFCA's officers, employees, agents, advisors,
attorneys, accountants, architects, and engineers with access to the
Premises, all drawings, plans, and specifications for the Premises in
possession of Debtor, all engineering reports relating to the Premises
in the possession of Debtor, the files and correspondence relating to
the Premises, and the financial books and records, including lists of
delinquencies, relating to the ownership, operation, and maintenance of
the Premises, and (ii) allow such persons to make such inspections,
tests, copies, and verifications as FFCA considers necessary.
B. Fixed Charge Coverage Ratio. Until such time as all of
Debtor's obligations under the Notes and the other Loan Documents are
paid, satisfied and discharged in full, Debtor shall maintain an
aggregate Fixed Charge Coverage Ratio at all of the Premises of at least
1.25:1, as determined on the last day of each fiscal year of Debtor. For
purposes of this Section, the term "Fixed Charge Coverage Ratio" shall
mean with respect to the twelve month period of time immediately
preceding the date of determination, the ratio calculated for such
period of time of (a) the sum of Net Income, Depreciation and
Amortization, Interest Expense and Operating Lease Expense, less a
corporate overhead allocation in an amount equal to 4% of Gross Sales,
to (b) the sum of the FFCA Payments, Operating Lease Expense and the
Equipment Payment Amount.
For purposes of this Section, the following terms shall be defined as
set forth below:
"Capital Lease" shall mean any lease of any property
(whether real, personal or mixed) by Debtor with respect to one
or more of the Premises which lease would, in conformity with
GAAP, be required to be accounted for as a capital lease on the
balance sheet of Debtor. The term "Capital Lease" shall not
include any operating lease.
"Debt" shall mean as directly related to all of the
Premises and the period of determination (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, indentures,
notes or similar instruments, (iii) obligations to pay the
deferred purchase price of property or services, (iv)
obligations under leases which should be, in accordance with
GAAP, recorded as Capital Leases, and (v) obligations under
direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to
in clauses (i) through (iv) above.
"Depreciation and Amortization" shall mean with respect
to all of the Premises the depreciation and amortization
accruing during any period of determination with respect to
Debtor as determined in accordance with GAAP.
"Equipment Payment Amount" shall mean for any period of
determination the sum of all amounts payable during such period
of determination under all
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(i) leases for equipment located at one or more of the Premises
and (ii) all loans secured by equipment located at one or more
of the Premises.
"FFCA Payments" shall mean with respect to the period of
determination, the sum of all scheduled payments due and payable
under the Notes.
"GAAP" means generally accepted accounting principles
consistently applied.
"Gross Sales" shall mean the sales or other income
arising from all business conducted at all of the Premises by
Debtor during the period of determination, less sales tax and
any amounts received from not-for-profit sales of all non-food
items approved for use in connection with promotional campaigns,
if any, for all of the Premises.
"Interest Expense" shall mean for any period of
determination, the sum of all interest accrued or which should
be accrued in respect of all Debt of Debtor specifically
allocable to one or more of the Premises and all business
operations thereon during such period (including interest
attributable to Capital Leases), as determined in accordance
with GAAP. The term "Interest Expense" shall not include
interest accrued under indebtedness for borrowed money or
obligations evidenced by bonds, indentures, notes or similar
instruments which do not relate to one or more of the Premises.
"Net Income" shall mean with respect to the period of
determination, the net income or net loss of Debtor allocable to
all of the Premises. In determining the amount of Net Income,
(i) adjustments shall be made for nonrecurring gains and losses
allocable to the period of determination, (ii) deductions shall
be made for, among other things, Depreciation and Amortization,
Interest Expense and Operating Lease Expense allocable to the
period of determination, and (iii) no deductions shall be made
for (x) income taxes or charges equivalent to income taxes
allocable to the period of determination, as determined in
accordance with GAAP, or (y) corporate overhead expense
allocable to the period of determination.
"Operating Lease Expense" shall mean the expenses
incurred by Debtor under any operating leases with respect to
one or more of the Premises and the business operations thereon
during the period of determination, as determined in accordance
with GAAP.
Notwithstanding the foregoing, FFCA may elect at any time to
amend the Fixed Charge Coverage Ratio requirements set forth herein so
that Debtor shall be required to maintain an aggregate Fixed Charge
Coverage Ratio, as determined on the last day of Debtor's fiscal year,
of at least 1.25:1 for all of the Premises and Other Premises
corresponding to the Loans and the Other Loans which are included in any
Securitized
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Loan Pool. If such election is made, Debtor shall also be required to
maintain an aggregate Fixed Charge Coverage Ratio, as determined on the
last day of Debtor's fiscal year, of at least 1.25:1 for all of the
Premises which are not included in a Securitized Loan Pool. To the
extent that such election is made, the definitions relating to the Fixed
Charge Coverage Ratio shall be deemed to be modified as applicable to
provide for the calculation of the aggregate Fixed Charge Coverage Ratio
for all of the Premises and Other Premises corresponding to each
Securitized Loan Pool and all of the Premises which are not included in
a Securitized Loan Pool. Notwithstanding the foregoing, FFCA agrees that
at the time of any Securitization, the Loans included in the
corresponding Securitized Loan Pool will not have an aggregate Fixed
Charge Coverage Ratio which is materially different than the lesser of
the aggregate Fixed Charge Coverage Ratio with respect to the Premises
corresponding to the Loans, if applicable, which are not included in
such Securitized Loan Pool as of the Closing Date and the date of such
Securitization; provided further that, to the extent FFCA is unable to
include any Loan in such Securitized Loan Pool because of any problem
relating to the corresponding Premises which is beyond the control of
FFCA, then such Loan, if applicable, shall not be taken into account for
purposes of comparing the aggregate Fixed Charge Coverage Ratio for the
Premises corresponding to the Loans, if applicable, which are included
in such Securitized Loan Pool against the aggregate Fixed Charge
Coverage Ratio for the Premises corresponding to the Loans, if
applicable, which are not included in such Securitized Loan Pool.
C. Lost Note. Debtor shall, if any Note is mutilated,
destroyed, lost or stolen (a "Lost Note"), promptly deliver to FFCA,
upon receipt of an affidavit from FFCA stipulating that such Note has
been mutilated, destroyed, lost or stolen, in substitution therefor, a
new promissory note containing the same terms and conditions as such
Lost Note with a notation thereon of the unpaid principal and accrued
and unpaid interest. Debtor shall provide fifteen (15) days' prior
Notice to FFCA before making any payments to third parties in connection
with a Lost Note.
8. Transaction Characterization. This Agreement is a contract to
extend a financial accommodation (as such term is used in the Code) for the
benefit of Debtor. It is the intent of the parties hereto that the business
relationship created by this Agreement, the Notes, the Mortgages and the other
Loan Documents is solely that of creditor and debtor and has been entered into
by both parties in reliance upon the economic and legal bargains contained in
the Loan Documents. None of the agreements contained in the Loan Documents is
intended, nor shall the same be deemed or construed, to create a partnership
between Debtor and FFCA, to make them joint venturers, to make Debtor an agent,
legal representative, partner, subsidiary or employee of FFCA, nor to make FFCA
in any way responsible for the debts, obligations or losses of Debtor.
9. Conditions of Closing. The obligation of FFCA to consummate the
transaction contemplated by this Agreement is subject to the fulfillment or
waiver of each of the following conditions:
15
A. Title. Fee title to each of the Premises shall be vested
in Debtor, free of all liens, encumbrances, restrictions, encroachments
and easements, except the Permitted Exceptions and the liens created by
the Mortgages and the UCC-1 Financing Statements. Debtor shall be the
owner of all of the equipment, trade fixtures, appliances, machinery,
furniture and other personal property located on or at each of the
Premises free and clear of all liens, encumbrances, charges and security
interests, except the liens created by the Mortgages and the UCC-1
Financing Statements. Upon Closing, FFCA will obtain a valid and
perfected first priority lien upon and security interest in each of the
Premises.
B. Condition of Premises. FFCA shall have inspected and
approved the Premises, the Premises and the equipment located thereon
shall be in good condition and repair and of good workmanship and
materials, and the Premises shall be fully equipped and operational,
clean, orderly, sanitary, safe, well-lit, landscaped, decorated,
attractive and with a suitable layout, physical plant, traffic pattern
and location, all as determined by FFCA in its sole discretion.
C. Evidence of Title. FFCA shall have received for each of
the Premises a preliminary title report and irrevocable commitment to
insure title by means of a mortgagee's, ALTA extended coverage policy of
title insurance (or its equivalent, in the event such form is not issued
in the jurisdiction where the Premises is located) issued by Title
Company showing good and marketable fee title in such Premises in
Debtor, committing to insure FFCA's first priority lien upon and
security interest in such Premises subject only to liens, encumbrances,
restrictions and easements approved by FFCA, and containing such
endorsements as FFCA may require. FFCA shall also have received evidence
reasonably satisfactory to FFCA that Debtor is the owner of all of the
equipment, trade fixtures, appliances, machinery, furniture and other
personal property located on or at each of the Premises free and clear
of all liens, encumbrances, charges and security interests, except the
liens created by the Mortgages and the UCC-1 Financing Statements.
D. Survey. FFCA shall have received a current ALTA survey
of each of the Premises, the form and substance of which shall be
satisfactory to FFCA in its sole discretion. Debtor shall have provided
FFCA with evidence satisfactory to FFCA that the location of each of the
Premises is not within the 100-year flood plain or identified as a
special flood hazard area as defined by the Federal Insurance
Administration, or if any Premises is in such a flood plain or special
flood hazard area, Debtor shall provide FFCA with evidence of flood
insurance maintained on such Premises in amounts and on terms and
conditions satisfactory to FFCA.
E. Environmental. FFCA shall have received (i) a Phase I
environmental report (and a Phase II environmental report, if necessary,
as determined by FFCA in its sole discretion) for each of the Premises,
the form, substance and conclusions of which shall be satisfactory to
FFCA in its sole discretion, and/or (ii) an Environmental Policy with
respect to each of the Premises, as required by FFCA in its sole
discretion.
16
F. Zoning. Debtor shall have provided FFCA with evidence
satisfactory to FFCA that each of the Premises is properly zoned for use
as a Permitted Concept and that such use constitutes a legal, conforming
use under applicable zoning requirements.
G. Compliance With Representations, Warranties and
Covenants. All obligations of Debtor under this Agreement shall have
been fully performed and complied with, and no event shall have occurred
or condition shall exist which would, upon the Closing Date, or, upon
the giving of notice and/or passage of time, constitute a breach or
default hereunder or under the Loan Documents or any other agreement
between or among FFCA or Debtor pertaining to the subject matter hereof,
and no event shall have occurred or condition shall exist or information
shall have been disclosed by Debtor or discovered by FFCA which has had
or would have a material adverse effect on the Premises, Debtor or
FFCA's willingness to consummate the transaction contemplated by this
Agreement, as determined by FFCA in its sole and absolute discretion.
H. Proof of Insurance. Debtor shall have delivered to FFCA
copies of insurance policies showing that all insurance required by the
Loan Documents and providing coverage and limits satisfactory to FFCA
are in full force and effect.
I. Opinion of Counsel to Debtor. Debtor shall have caused
Counsel to prepare and deliver an opinion to FFCA in form and substance
satisfactory to FFCA and its counsel.
J. Due Diligence. FFCA shall have received a management
practices survey from Debtor in form and substance satisfactory to FFCA.
K. Closing Documents. At or prior to the Closing Date, FFCA
and/or Debtor, as may be appropriate, shall execute and deliver or cause
to be executed and delivered to Title Company or FFCA, as may be
appropriate, all documents required to be delivered by this Agreement,
and such other documents, payments, instruments and certificates, as
FFCA may require in form acceptable to FFCA, including, without
limitation, the following:
(1) Notes;
(2) Mortgages;
(3) Proof of Insurance;
(4) Opinion of Counsel to Debtor;
(5) Evidence of satisfactory zoning;
(6) UCC-1 Financing Statements; and
(7) Environmental Indemnity Agreements.
Upon fulfillment or waiver of all of the above conditions, FFCA shall deposit
funds necessary to close this transaction with the Title Company and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
10. Default and Remedies. A. Each of the following shall be deemed
an event of default by Debtor (each, an "Event of Default"):
17
(1) If any representation or warranty of any of the Debtor
Entities set forth in any of the Loan Documents is false in any material
respect, or if any of the Debtor Entities renders any statement or
account which is false in any material respect.
(2) If any principal, interest or other monetary sum due
under the Notes, the Mortgages or any other Loan Documents is not paid
within five days after the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, FFCA shall
not be entitled to exercise its rights and remedies set forth below
unless and until FFCA shall have given Debtor Notice thereof and a
period of five days from the delivery of such Notice shall have elapsed
without such Event of Default being cured.
(3) If Debtor fails to observe or perform any of the other
covenants (except with respect to a breach of the Fixed Charge Coverage
Ratio, which breach is addressed in subitem (6) below), conditions, or
obligations of this Agreement; provided, however, if any such failure
does not involve the payment of any monetary sum, is not willful or
intentional, does not place any rights or property of FFCA in immediate
jeopardy, and is within the reasonable power of Debtor to promptly cure
after receipt of Notice thereof, all as determined by FFCA in its
reasonable discretion, then such failure shall not constitute an Event
of Default hereunder, unless otherwise expressly provided herein, unless
and until FFCA shall have given Debtor Notice thereof and a period of 30
days shall have elapsed, during which period Debtor may correct or cure
such failure, upon failure of which an Event of Default shall be deemed
to have occurred hereunder without further notice or demand of any kind
being required. If such failure cannot reasonably be cured within such
30-day period, as determined by FFCA in its reasonable discretion, and
Debtor is diligently pursuing a cure of such failure, then Debtor shall
have a reasonable period to cure such failure beyond such 30-day period,
which shall not exceed 90 days after receiving Notice of the failure
from FFCA. If Debtor shall fail to correct or cure such failure within
such 90-day period, an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being required.
(4) If Debtor becomes insolvent within the meaning of the
Code, files or notifies FFCA that it intends to file a petition under
the Code, initiates a proceeding under any similar law or statute
relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts (collectively, an "Action"), becomes the subject of
either a petition under the Code or an Action, or is not generally
paying its debts as the same become due.
(5) If there is an "Event of Default" under any other Loan
Document or a breach or default, after the passage of all applicable
notice and cure or grace periods, under any of the Other Agreements.
(6) If there is a breach of the Fixed Charge Coverage Ratio
requirement and FFCA shall have given Debtor Notice thereof and Debtor
shall have failed within a period of 30 days from the delivery of such
Notice (the "Cure Period") to elect (which election shall be made by
Debtor) and complete one of the following options to cure such breach:
18
(i) pay to FFCA the FCCR Amount (without premium or
penalty) with respect to such of the Premises (starting with the
Premises with the lowest Fixed Charge Coverage Ratio and
proceeding in ascending order to the Premises with the next
lowest Fixed Charge Coverage Ratio) as is necessary to cure the
breach of the Fixed Charge Coverage Ratio requirement and for
which the then Fixed Charge Coverage Ratio (with the definitions
in Section 7.B being deemed to be modified as applicable to
provide for the calculation of the Fixed Charge Coverage Ratio
for each such Premises on an individual basis rather than on an
aggregate basis with the other Premises) is below 1.25:1 (each,
a "Subject Premises");
(ii) prepay the Note corresponding to each Subject
Premises in whole but not in part (without premium or penalty);
or
(iii) notify FFCA of Debtor's election to substitute a
Substitute Premises in accordance with the terms of Section 13
for each Subject Premises (the failure of Debtor to complete
such substitution within 90 days after FFCA shall have given
Debtor the Notice discussed above shall be deemed to be an Event
of Default without further notice or demand of any kind being
required).
For purposes of clause (i) above, "FCCR Amount" means that sum
of money which, when subtracted from the outstanding principal amount of
the Note corresponding to a Subject Premises, and assuming the resulting
principal balance is reamortized over the remaining term of such Note,
will result in an adjusted aggregate Fixed Charge Coverage Ratio for all
of the Premises of at least 1.25:1 based on the prior year's operations.
Promptly after Debtor's payment of the FCCR Amount, Debtor and FFCA
shall execute an amendment to each such Note in form and substance
reasonably acceptable to FFCA reducing the principal amount payable to
FFCA under such Note and reamortizing the principal amount of such Note
over the then remaining term of such Note.
Notwithstanding the foregoing, to the extent that, in accordance
with the provisions of Section 7.B, FFCA shall have elected to amend the
Fixed Charge Coverage Ratio requirements, then, in order to prevent an
Event of Default from occurring by reason of a breach of such amended
Fixed Charge Coverage Ratio requirements, Debtor must prior to the end
of the Cure Period elect (which election shall be made by Debtor) and
complete one of the following options to cure such breach:
(i) pay to FFCA the Modified FCCR Amount (without
premium or penalty) with respect to such of the Premises and
Other Premises (starting with the Premises or Other Premises
with the lowest Fixed Charge Coverage Ratio and proceeding in
ascending order to the Premises or Other Premises with the next
lowest Fixed Charge Coverage Ratio) as is necessary to cure each
breach of such amended Fixed Charge Coverage Ratio requirements
and for which the then Fixed Charge Coverage Ratio (with the
definitions relating to the Fixed Charge Coverage Ratio being
deemed to be modified as applicable to provide for the
19
calculation of the Fixed Charge Coverage Ratio for each such
Premises and Other Premises on an individual basis rather than
on an aggregate basis with the other Premises and Other Premises
which are subject to the applicable Fixed Charge Coverage Ratio
requirement) is below 1.25:1 (each, a "Selected Premises");
(ii) prepay the Note or Other Note corresponding to
each Selected Premises in whole but not in part (without premium
or penalty); or
(iii) notify FFCA of Debtor's election to substitute a
Substitute Premises for each Selected Premises in accordance
with the terms of Section 13 (or, with respect to any Selected
Premises which is an Other Premises, in accordance with the
terms set forth in the applicable loan agreement) (the failure
of Debtor to complete such substitution within 60 days after
FFCA shall have given Debtor the Notice discussed above shall be
deemed to be an Event of Default without further notice or
demand of any kind being required).
For purposes of clause (i) above, "Modified FCCR Amount" means
that sum of money which, when subtracted from the outstanding principal
amount of the Note or Other Note corresponding to a Selected Premises,
and assuming the resulting principal balance is reamortized over the
remaining term of such Note or Other Note, will result in an adjusted
aggregate Fixed Charge Coverage Ratio for all of the Premises and/or
Other Premises which are subject to the applicable Fixed Charge Coverage
Ratio requirement of at least 1.25:1 based on the prior year's
operations. Promptly after Debtor's payment of the Modified FCCR Amount,
Debtor and FFCA shall execute an amendment to each such Note and Other
Note in form and substance reasonably acceptable to FFCA reducing the
principal amount payable to FFCA under such Note and Other Note and
reamortizing the principal amount of such Note and Other Note over the
then remaining term of such Note and Other Note.
B. Upon the occurrence of an Event of Default, subject to the
limitations set forth in subsection A, FFCA may declare all or any part of the
obligations of Debtor under the Notes, this Agreement and any other Loan
Document to be due and payable, and the same shall thereupon become due and
payable without any presentment, demand, protest or notice of any kind except as
otherwise expressly provided herein, and Debtor hereby waives notice of intent
to accelerate the obligations secured by the Mortgages and notice of
acceleration. Thereafter, FFCA may exercise, at its option, concurrently,
successively or in any combination, all remedies available at law or in equity,
including without limitation any one or more of the remedies available under the
Notes, the Mortgages or any other Loan Document. Neither the acceptance of this
Agreement nor its enforcement shall prejudice or in any manner affect FFCA's
right to realize upon or enforce any other security now or hereafter held by
FFCA, it being agreed that FFCA shall be entitled to enforce this Agreement and
any other security now or hereafter held by FFCA in such order and manner as it
may in its absolute discretion determine. No remedy herein conferred upon or
reserved to FFCA is intended to be exclusive of any other remedy given hereunder
or now or hereafter existing at law or in equity or by statute. Every power or
remedy given by any of the Loan Documents to FFCA, or to which FFCA may be
otherwise entitled,
20
may be exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by FFCA.
11. Assignments. A. FFCA may assign in whole or in part its rights
under this Agreement, including, without limitation, in connection with any
Transfer, Participation and/or Securitization. Upon any unconditional assignment
of FFCA's entire right and interest hereunder, FFCA shall automatically be
relieved, from and after the date of such assignment, of liability for the
performance of any obligation of FFCA contained herein which accrues from and
after the date of such assignment.
B. Debtor shall not, without the prior written consent of FFCA,
sell, assign, transfer, mortgage, convey, encumber or grant any easements or
other rights or interests of any kind in the Premises, any of Debtor's rights
under this Agreement or any interest in Debtor, whether voluntarily,
involuntarily or by operation of law or otherwise, including, without
limitation, by merger, consolidation, dissolution or otherwise, except,
subsequent to the Closing, (i) as expressly permitted by the Mortgages, and (ii)
Debtor and Checkers Drive-In Restaurants, Inc., a Delaware corporation
("Checkers"), may consummate a merger with each other without the prior written
consent of FFCA provided each of the following conditions precedent are
satisfied (the "Permitted Merger"):
(1) no Event of Default shall have occurred and the
consummation of the Permitted Merger shall not result in an Event of
Default;
(2) the Permitted Merger shall be consummated within one
year after the date of this Agreement;
(3) the surviving corporation of the Permitted Merger shall
be either Debtor or Checkers (the "Surviving Corporation");
(4) the identity and relative ownership of the shareholders
of the Surviving Corporation shall be substantially the same as the
identity and relative ownership of the shareholders of Debtor and
Checkers as of the date of this Agreement;
(5) the Permitted Merger shall involve only the merger of
Debtor and Checkers. Any related transaction undertaken or proposed to
be undertaken simultaneously with or subsequent to the Permitted Merger,
including, without limitation, any sale, assignment or transfer of any
interest in the Surviving Corporation or any other merger with the
Surviving Corporation, shall require the prior written consent of FFCA
pursuant to the terms and conditions of this Agreement and the other
Loan Documents;
(6) the consummation of the Permitted Merger would not,
after giving effect to the Permitted Merger, have a material adverse
effect on the financial condition or net worth of the Surviving
Corporation, and the Surviving Corporation shall have a net worth at
least equal to the greater of (i) the net worth of Debtor or Checkers
immediately prior
21
to the consummation of the Permitted Merger, or (ii) the combined net
worth of Debtor and Checkers;
(7) following the consummation of the Permitted Merger, the
Surviving Corporation shall be deemed to be "Debtor" for all purposes of
the Loan Documents and obligated and bound by the terms and conditions
of the Loan Documents. The Surviving Corporation agrees to execute such
documents and take such actions as FFCA may reasonably request to
evidence the obligations of such Surviving Corporation under the Loan
Documents; and
(8) Debtor shall be responsible for the payment of all
reasonable costs and expenses incurred by FFCA in connection with the
Permitted Merger, including, without limitation, FFCA's reasonable
attorneys' fees.
Debtor shall deliver to FFCA prior to the consummation of the Permitted Merger
(i) a certificate of the chief executive officer of Debtor certifying that all
of the conditions set forth in the preceding items (1) through (7) have been
satisfied, and (ii) an opinion of Counsel with respect to such matters as FFCA
may reasonably request in connection with the Permitted Merger.
12. Indemnity. Debtor agrees to indemnify, hold harmless and defend
FFCA and its directors, officers, shareholders, employees, successors, assigns,
agents, contractors, subcontractors, experts, licensees, affiliates, lessees,
lenders, mortgagees, trustees and invitees, as applicable (collectively, the
"Indemnified Parties"), from and against any and all losses, costs, claims,
liabilities, damages and expenses, including, without limitation, reasonable
attorneys' fees, arising as the result of an Environmental Condition and/or a
breach of any of the representations, warranties, covenants, agreements or
obligations of Debtor set forth in this Agreement. Without limiting the
generality of the foregoing, such indemnity shall include, without limitation,
any engineering, governmental inspection and reasonable attorneys' fees and
expenses that the Indemnified Parties may incur by reason of any representation
set forth in this Agreement being false, or by reason of any investigation or
claim of any Governmental Authority in connection therewith.
13. Substitution. Debtor shall have the right to obtain a release of
a Premises by substituting a Substitute Premises for such Premises if permitted
by the terms of Section 10.A(6), subject to fulfillment of the following
conditions:
(i) Debtor shall provide FFCA with Notice of its intention
to substitute a Substitute Premises within the 30 day period
contemplated by Section 10.A(6) and the closing of the substitution
shall take place within the 90 day period contemplated by such section.
(ii) Debtor must provide for the substitution of a Substitute
Premises, and the proposed Substitute Premises must:
22
(1) be a Permitted Concept, in good condition and
repair, ordinary wear and tear excepted;
(2) have for the twelve consecutive month period
preceding the date of the closing of such substitution a Fixed
Charge Coverage Ratio (with the definitions of Section 7.B being
deemed to be modified if necessary and as applicable to provide
for a calculation of the Fixed Charge Coverage Ratio for the
Substitute Premises and the Premises to be replaced on an
individual basis) at least equal to the Fixed Charge Coverage
Ratio for the Premises being replaced and the substitution must
not cause a breach of any Fixed Charge Coverage Ratio
requirement otherwise set forth in this Agreement;
(3) at the time of the substitution, be owned by and
vested in Debtor free and clear of all liens and encumbrances,
except such matters as are acceptable to FFCA (the "Substitute
Premises Permitted Exceptions"); and
(4) have a fair market value no less than the
greater of the then market value of the Premises to be replaced
or the fair market value of such Premises as of the Closing, all
as reasonably determined by FFCA's in-house inspectors and
underwriters.
(iii) FFCA shall have inspected and approved the Substitute
Premises utilizing FFCA customary site inspection and underwriting
approval criteria. Debtor shall have reimbursed FFCA for all of its
costs and expenses incurred with respect to such proposed substitution,
including, without limitation, FFCA's third-party and/or in-house site
inspectors' costs and expenses with respect to the proposed Substitute
Premises. Debtor shall be solely responsible for the payment of all
costs and expenses resulting from such proposed substitution, including,
without limitation, the cost of title insurance and endorsements, survey
charges, stamp taxes, mortgage taxes, transfer fees, escrow and
recording fees, the cost of environmental reports and/or an
environmental insurance policy and the attorneys' fees and expenses of
counsel to Debtor and FFCA.
(iv) FFCA shall have received a preliminary title report and
irrevocable commitment to insure title by means of a mortgagee's ALTA
extended coverage policy of title insurance (or its equivalent, in the
event such form is not issued in the jurisdiction where the proposed
Substitute Premises is located) for such proposed Substitute Premises
issued by Title Company showing good and marketable title in Debtor and
committing to insure FFCA's first priority lien upon and security
interest in the proposed Substitute Premises, subject only to the
Substitute Premises Permitted Exceptions and containing endorsements
substantially comparable to those required by FFCA at the Closing.
(v) FFCA shall have received a current ALTA survey of such
proposed Substitute Premises, the form of which shall be comparable to
those received by FFCA at the Closing and sufficient to cause the
standard survey exceptions set forth in the title policy referred to in
the preceding subsection to be deleted.
23
(vi) FFCA shall have received a Phase I environmental report
(and a Phase II environmental report, if necessary, as determined by
FFCA in its sole discretion) and/or an environmental insurance policy
with respect to such proposed Substitute Premises, which (A)
environmental report(s) shall conform in scope to the then customary
standards for lenders making loans secured by commercial real estate,
which shall conclude that there is no Environmental Condition affecting
the proposed Substitute Premises, and (B) environmental insurance policy
shall be in form and substance and issued by such environmental
insurance company as is acceptable to FFCA in its sole discretion.
(vii) Debtor shall deliver, or cause to be delivered, with
respect to Debtor and the Substitute Premises, opinions of Counsel in
form and substance comparable to those received at Closing (but also
addressing such matters unique to the Substitute Premises as may be
reasonably required by FFCA).
(viii) no Event of Default shall have occurred under any of the
Loan Documents.
(ix) Debtor shall have executed such documents as are
comparable to the security documents executed and delivered at Closing,
as applicable (but with such revisions as may be reasonably required by
FFCA to address matters unique to the Substitute Premises) or amendments
to such documents, including, without limitation, a Mortgage and UCC-1
Financing Statements (the "Substitute Documents"), to provide FFCA with
a first priority lien on the proposed Substitute Premises subject only
to the Substitute Premises Permitted Exceptions, and all other rights,
remedies and benefits with respect to the proposed Substitute Premises
which FFCA holds in the Premises to be replaced, all of which documents
shall be in form and substance reasonably satisfactory to FFCA.
(x) the representations and warranties set forth in the
Substitute Documents and Section 6 of this Agreement applicable to the
proposed Substitute Premises shall be true and correct in all material
respects as of the date of substitution, and Debtor shall have delivered
to FFCA an officer's certificate certifying to that effect.
(xi) Debtor shall have delivered to FFCA certificates of
insurance showing that insurance required by the Substitute Documents is
in full force and effect.
Upon satisfaction of the foregoing conditions with respect to the
release of a Premises:
(a) the proposed Substitute Premises shall be deemed
substituted for the Premises to be replaced;
(b) the Loan Amount for the Substitute Premises shall be the
same as for the replaced Premises;
24
(c) the Substitute Premises shall be referred to herein as a
"Premises" and included within the definition of "Premises" and shall
secure the same Obligations (as defined in the Mortgages) as were
secured by the Premises that were replaced;
(d) the Substitute Documents shall be dated as of the date
of the substitution; and
(e) FFCA will release, or cause to be released, the lien of
the Mortgage, UCC-1 Financing Statements and any other Loan Documents
encumbering the replaced Premises.
14. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant
to this Agreement (each, a "Notice") shall be in writing and given by
(i) hand delivery, (ii) express overnight delivery service or (iii)
certified or registered mail, return receipt requested, and shall be
deemed to have been delivered upon (a) receipt, if hand delivered, (b)
the next business day, if delivered by express overnight delivery
service, or (c) the third business day following the day of deposit of
such Notice with the United States Postal Service, if sent by certified
or registered mail, return receipt requested. Notices shall be provided
to the parties and addresses specified below:
If to Debtor: Xx. Xxxxxx X. Xxxxx
Chief Financial Officer
Rally's Hamburgers, Inc.
Building One
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
With a copy to: Legal Department
Rally's Hamburgers, Inc.
Building One
00000 00xx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
25
If to FFCA: Xxxxxx X. Xxxxx, Esq.
Executive Vice President and General Counsel
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
B. Real Estate Commission. FFCA and Debtor represent and
warrant to each other that they have dealt with no real estate or
mortgage broker, agent, finder or other intermediary in connection with
the transactions contemplated by this Agreement. FFCA and Debtor shall
indemnify and hold each other harmless from and against any costs,
claims or expenses, including attorneys' fees, arising out of the breach
of their respective representations and warranties contained within this
Section.
C. Waiver and Amendment. No provisions of this Agreement
shall be deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and signed by
the party against which enforcement of such waiver or amendment is
sought. Waiver of any matter shall not be deemed a waiver of the same or
any other matter on any future occasion.
D. Captions. Captions are used throughout this Agreement
for convenience of reference only and shall not be considered in any
manner in the construction or interpretation hereof.
E. FFCA's Liability. Notwithstanding anything to the
contrary provided in this Agreement, it is specifically understood and
agreed, such agreement being a primary consideration for the execution
of this Agreement by FFCA, that (i) there shall be absolutely no
personal liability on the part of any shareholder, director, officer or
employee of FFCA, with respect to any of the terms, covenants and
conditions of this Agreement or the other Loan Documents, (ii) Debtor
waives all claims, demands and causes of action against FFCA's officers,
directors, employees and agents in the event of any breach by FFCA of
any of the terms, covenants and conditions of this Agreement or the
other Loan Documents to be performed by FFCA and (iii) Debtor shall look
solely to the assets of FFCA for the satisfaction of each and every
remedy of Debtor in the event of any breach by FFCA of any of the terms,
covenants and conditions of this Agreement or the other Loan Documents
to be performed by FFCA, such exculpation of liability to be absolute
and without any exception whatsoever.
F. Severability. The provisions of this Agreement shall be
deemed severable. If any part of this Agreement shall be held
unenforceable, the remainder shall remain in full force and effect, and
such unenforceable provision shall be reformed by such court so as to
give maximum legal effect to the intention of the parties as expressed
therein.
26
G. Construction Generally. This is an agreement between
parties who are experienced in sophisticated and complex matters similar
to the transaction contemplated by this Agreement and is entered into by
both parties in reliance upon the economic and legal bargains contained
herein and shall be interpreted and construed in a fair and impartial
manner without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the
domicile of any party. Debtor and FFCA were each represented by legal
counsel competent in advising them of their obligations and liabilities
hereunder.
H. Other Documents. Each of the parties agrees to sign such
other and further documents as may be appropriate to carry out the
intentions expressed in this Agreement.
I. Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this Agreement,
the prevailing party shall be entitled to recover its attorneys' fees
and other costs in addition to any other relief to which it may be
entitled. References in this Agreement to the attorneys' fees and/or
costs shall mean the fees and costs of independent outside counsel
retained by the prevailing party with respect to this transaction.
J. Entire Agreement. This Agreement and the other Loan
Documents, together with any other certificates, instruments or
agreements to be delivered in connection therewith, constitute the
entire agreement between the parties with respect to the subject matter
hereof, and there are no other representations, warranties or
agreements, written or oral, between Debtor and FFCA with respect to the
subject matter of this Agreement. Notwithstanding anything in this
Agreement to the contrary, upon the execution and delivery of this
Agreement by Debtor and FFCA, the Commitment shall be deemed null and
void and of no further force and effect and the terms and conditions of
this Agreement shall control notwithstanding that such terms may be
inconsistent with or vary from those set forth in the Commitment.
K. Forum Selection; Jurisdiction; Venue; Choice of Law.
Debtor acknowledges that this Agreement was substantially negotiated in
the State of Arizona, this Agreement was signed and delivered by FFCA
and Debtor in the State of Arizona, all payments under the Notes will be
delivered in the State of Arizona and there are substantial contacts
between the parties and the transactions contemplated herein and the
State of Arizona. For purposes of any action or proceeding arising out
of this Agreement, the parties hereto hereby expressly submit to the
jurisdiction of all federal and state courts located in the State of
Arizona and Debtor consents that it may be served with any process or
paper by registered mail or by personal service within or without the
State of Arizona in accordance with applicable law. Furthermore, Debtor
waives and agrees not to assert in any such action, suit or proceeding
that it is not personally subject to the jurisdiction of such courts,
that the action, suit or proceeding is brought in an inconvenient forum
or that venue of the action, suit or proceeding is improper. It is the
intent of the parties hereto that all provisions of this Agreement shall
be governed by and construed under the laws of the State of
27
Arizona. To the extent that a court of competent jurisdiction finds
Arizona law inapplicable with respect to any provisions hereof, then, as
to those provisions only, the laws of the states where the Premises are
located shall be deemed to apply. Nothing in this Section shall limit or
restrict the right of FFCA to commence any proceeding in the federal or
state courts located in the states in which the Premises are located to
the extent FFCA deems such proceeding necessary or advisable to exercise
remedies available under this Agreement or the other Loan Documents.
L. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original.
M. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Debtor and FFCA and their respective successors
and permitted assigns, including, without limitation, any United States
trustee, any debtor in possession or any trustee appointed from a
private panel.
N. Survival. Except for the conditions of Closing set forth
in Section 9, which shall be satisfied or waived as of the Closing Date,
all representations, warranties, agreements, obligations and indemnities
of Debtor and FFCA set forth in this Agreement shall survive the
Closing.
O. Waiver of Jury Trial and Punitive, Consequential,
Special and Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL
BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES
HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. THIS WAIVER BY THE PARTIES HERETO
OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND
IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM FFCA OR
ANY OF FFCA'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF
THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY DEBTOR AGAINST FFCA
OR ANY OF FFCA'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF
THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR
RELATED HERETO. THE WAIVER BY DEBTOR OF ANY RIGHT IT MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
28
DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN.
P. Transfers, Participations and Securitization. (1) A
material inducement to FFCA's willingness to complete the transactions
contemplated by the Loan Documents is Debtor's agreement that FFCA may,
at any time, sell, transfer or assign any Note, Mortgage and/or any of
the other Loan Documents (each, a "Transfer"), and any or all servicing
rights with respect thereto, or grant participations in any Note,
Mortgage and/or any of the other Loan Documents (each, a
"Participation"), or complete a Securitization with respect to any Note,
Mortgage and/or any of the other Loan Documents.
(2) Debtor agrees to cooperate in good faith with FFCA in
connection with any such Transfer, Participation and/or Securitization
of any Note, Mortgage and/or any of the other Loan Documents, including,
without limitation, (i) providing such documents, financial and other
data, and other information and materials (the "Disclosures") which
would typically be required with respect to Debtor by a purchaser,
transferee, assignee, servicer, participant, investor or rating agency
involved with respect to such Transfer, Participation and/or
Securitization, as applicable; provided, however, Debtor shall not be
required to make Disclosures of any confidential information or any
information which has not previously been made public unless required by
applicable federal or state securities laws; and (ii) amending the terms
of the transactions evidenced by the Loan Documents to the extent
necessary so as to satisfy the requirements of purchasers, transferees,
assignees, servicers, participants, investors or selected rating
agencies involved in any such Transfer, Participation of Securitization,
so long as such amendments would not have a material adverse effect upon
Debtor or the transactions contemplated hereunder. FFCA agrees that any
amendment to the interest rate, maturity date or amortization schedule
of the Notes shall be deemed to have a material adverse effect on the
transactions contemplated hereunder; provided, however, Debtor agrees to
execute such amendments to the Loan Documents as FFCA may reasonably
request to correct "scrivener's errors" with respect to the Loan
Documents.
(3) Debtor consents to FFCA providing the Disclosures, as
well as any other information which FFCA may now have or hereafter
acquire with respect to the Premises or the financial condition of
Debtor to each purchaser, transferee, assignee, servicer, participant,
investor or rating agency involved with respect to such Transfer,
Participation and/or Securitization, as applicable, with respect to any
Note, Mortgage and/or any of the other Loan Documents. FFCA and Debtor
(and their respective Affiliates) shall each pay their own attorneys
fees and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in
this Agreement or the other Loan Documents:
(a) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which
29
relates to a loan or sale/leaseback transaction which has not
been the subject of a Securitization shall not constitute an
Event of Default under any Loan Document or Other Agreement
which relates to a loan which has been the subject of a
Securitization;
(b) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan which is
included in any Securitized Loan Pool shall not constitute an
Event of Default under any Loan Document or Other Agreement
which relates to a loan which is included in any other
Securitized Loan Pool;
(c) the Loan Documents corresponding to the Loans in
any Securitized Loan Pool shall not secure the obligations of
any of the Debtor Entities contained in any Loan Document or
Other Agreement which does not correspond to a loan in such
Securitized Loan Pool; and
(d) the Loan Documents and Other Agreements which do
not correspond to a loan in any Securitized Loan Pool shall not
secure the obligations of any of the Debtor Entities contained
in any Loan Document or Other Agreement which does correspond to
a loan in such Securitized Loan Pool.
Q. Confidentiality. Debtor and FFCA shall not make any
public announcements concerning the Loans without the prior written
consent of the other, except as may be required by law, judicial action
or Governmental Authority, including, without limitation, the Securities
and Exchange Commission.
30
IN WITNESS WHEREOF, Debtor and FFCA have entered into this Agreement as
of the date first above written.
FFCA:
FFCA ACQUISITION CORPORATION, a
Delaware corporation
By /s/ Xxxxx X. Xxxxx
---------------------------------------
Xxxxx X. Xxxxx, Senior Vice President
DEBTOR:
RALLY'S HAMBURGERS, INC., a Delaware
corporation
By /s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx, Executive Vice
President and Chief Financial Officer
31
STATE OF ARIZONA )
)SS.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me on December 16, 1998
by Xxxxx X. Xxxxx, Senior Vice President of FFCA Acquisition Corporation, a
Delaware corporation, on behalf of the corporation.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public
My Commission Expires:
[SEAL OF XXXXX X. XXXXX]
STATE OF ARIZONA )
)SS.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me on December 16, 1998
by Xxxxxx X. Xxxxx, Executive Vice President and Chief Financial Officer of
Rally's Hamburgers, Inc., a Delaware corporation, on behalf of the corporation.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public
My Commission Expires:
[SEAL OF XXXXX X. XXXXX]
32
EXHIBIT A
DESCRIPTION OF PREMISES; ALLOCATED LOAN AMOUNT
Rally's Restaurants
FFCA File No. Fidelity # Unit No. City State Zip Code Loan Amount
-----------------------------------------------------------------------------------------------------------
1 8000-7927 X/X-00 000 Xxxxxxxxxxxx XX 00000 $ 685,000.00
2 8000-7937 X/X-00 000 Xxx Xxxxxxx XX 00000 $ 506,000.00
3 8000-7953 C/R-54 000 Xxxxxxxxx XX 00000 $ 506,000.00
4 0000-0000 X/X-00 000 Xxxxx XX 00000 $ 569,000.00
5 8000-7963 X/X-00 000 Xxxxxxxxxx XX 00000 $ 473,000.00
6 8000-7964 X/X-00 000 Xxxxxxxxxxx XX 00000 $ 510,000.00
7 8000-7965 C/R-69 000 Xxxxxxx Xxxxx XX 00000 $ 450,000.00
8 8000-7966 C/R-70 621 Xxxxxxx XX 00000 $ 601,000.00
$ 4,300,000.00
12/16/98
SCHEDULE I
LITIGATION DISCLOSURE
Those matters disclosed in the Legal Proceedings section of the
September 6, 1998 Securities and Exchange Commission Form 10-Q filing for
Rally's Hamburgers, Inc.
