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Exhibit 10.24
Loan Nos. _____________
All located in Michigan
SECURITY AGREEMENT
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THIS SECURITY AGREEMENT ("Agreement") is made as of the _____ day of
________________________, 1998, by WM LIMITED PARTNERSHIP - 1998 D/B/A WENDY'S
OF MICHIGAN, a Michigan limited partnership, of 00 Xxxxx Xxxxxx XX, Xxxxx 000,
Xxxxx Xxxxxx, Xxxxxxxx 00000 ("Borrower") in favor of CAPTEC FINANCIAL GROUP,
INC., a Michigan corporation, of 24 Xxxxx Xxxxx Xxxxxx Drive, Lobby L, 4th
Floor, X.X. Xxx 000, Xxx Xxxxx, Xxxxxxxx, 00000 (together with its successors,
assigns and transferees, "Lender"). This instrument shall become effective on
_____________, 1998.
PRELIMINARY STATEMENT
This Agreement is made to secure all of the following (individually and
collectively the "Indebtedness"):
1. Payment in the sum of ______________________________________________
______ Dollars _______________, together with interest, costs and all other
sums, to be paid according to those certain Promissory Notes (the "Notes"), by
Borrower to Lender, made as of the date of this Agreement by Borrower, together
with any and all extensions, renewals, modifications, substitutions or
replacements thereof; and the performance of the covenants and obligations of
Borrower due or to become due to Lender under this Agreement or under any other
documents securing payment of all amounts due under the Notes (collectively, the
"Loan Documents"), and the repayment of all sums expended by Lender in
connection with performance of those covenants and obligations.
2. If the Notes, this Agreement and the Loan Documents are assigned to
a trust sponsored by Lender or any of its affiliates to securitize its loan
receivables (the "Trust"), "Indebtedness" shall also include the payment of all
other sums (together with interest and costs thereon) concurrently or
subsequently loaned to Borrower by Captec Financial Group, Inc., a Michigan
corporation, Captec Financial Group Funding Corporation, a Michigan corporation,
or Captec Leasing Company, a California corporation (each an "Originator"), as
evidenced and/or secured by certain notes and other documents of Borrower with
respect to such amounts and which notes and other documents are assigned to the
Trust, together with any and all extensions, renewals, modifications,
substitutions or replacements thereof; and the performance of the covenants and
obligations of Borrower due or to become due under such notes and other
documents assigned to the Trust, and the repayment of all sums expended in
connection with performance of those covenants and obligations (collectively,
the "Trust Obligations").
3. If the Notes, this Agreement and the Loan Documents are not assigned
to the Trust, "Indebtedness" shall also include the payment of all other sums
(together with interest thereon) concurrently or subsequently loaned to Borrower
by an Originator, as evidenced and/or secured by certain notes and other
documents of Borrower which are not assigned to the Trust, together with any and
all extensions, renewals, modifications, substitutions or replacements thereof;
and the performance of the covenants and obligations of Borrower due or to
become due under such notes and other documents, and the repayment of all sums
expended in connection with performance of those covenants and obligations
(collectively, the "Retained Obligations").
In consideration of the above facts and the mutual promises of the
parties, and as security for the purposes stated above and elsewhere in this
Agreement, the parties agree as follows:
1. COLLATERAL.
(a) GRANT OF SECURITY INTEREST. Borrower grants Lender a
security interest in all of Borrower's Inventory Equipment, Instruments,
Accounts and General Intangibles, each as defined in Section 1(b) below, whether
now owned or hereafter acquired, together with all replacements, substitutions,
and additions thereto (the "Collateral") which are (i) located on the premises
of, or are related to the operations of, the Wendy's restaurants
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operated by Borrower and located at ___________________________________________
______________________________________________ (each a "Franchised Operation"
and collectively the "Franchised Operations"), or (ii) related to the Franchised
Operations and located at the principal business office of Borrower located at
00 Xxxxx Xxxxxx XX, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxx 00000. Also included as
part of the Collateral are all proceeds and products thereof, including, without
limit, insurance proceeds, stock rights, subscription rights, dividends, stock
dividends, stock splits or liquidating dividends, and all cash, accounts,
chattel paper and general intangibles arising from the sale, rent, lease,
casualty loss or other disposition of the Collateral, and including any records
or documents of title relating to the Collateral.
(b) DEFINITIONS. For purposes of this Agreement, the following
terms shall be defined as follows:
(i) "Inventory" shall consist of all property
held at any location by or for Borrower for sale, rent, or
lease, or furnished or to be furnished by Borrower under any
contract of service, or raw materials or work in process and
their products, or materials used or consumed in Borrower's
business.
(ii) "Equipment" shall consist of any goods at
any time acquired, owned or held by Borrower at any location
primarily for use in Borrower's business, including, without
limit, machinery, fixtures, furniture, furnishings and
vehicles, and any accessions, parts, attachments, accessories,
tools, dies, additions, substitutions, replacements and
appurtenances and their related rights.
(iii) "Instruments" shall consist of Borrower's
interest of any kind in any negotiable instrument or security
as those terms are defined in the Michigan Uniform Commercial
Code ("UCC"), or any other writing which evidences a right to
payment of money and is of a type which is, in the ordinary
course of business, transferred by delivery alone or by
delivery with any necessary endorsement or assignment.
(iv) "General Intangibles" shall consist of any
personal property (including things in action) other than
goods, accounts, chattel paper, documents, instruments and
money.
(v) "Accounts" shall consist of any right to
payment for goods sold or leased or for services rendered
which is not evidenced by an instrument or chattel paper
whether or not it has been earned by performance.
2. WARRANTIES AND REPRESENTATIONS. Borrower warrants and covenants to
Lender as follows:
(a) PAYMENT OF INDEBTEDNESS. Borrower will pay the
Indebtedness and perform all obligations related to the Indebtedness when due,
whether by maturity, acceleration or otherwise.
(b) AUTHORITY. This Agreement is the valid and binding
obligation of Borrower, enforceable in accordance with its terms. If Borrower is
a corporation, partnership, limited liability company or other organization,
Borrower is organized and validly existing and in good standing under the laws
of its state of establishment, and the execution, delivery and performance of
this Agreement has been duly authorized by all necessary action of Borrower's
board of directors, partners, members or governing body, and will not violate
Borrower's governing instruments or other agreements.
(c) NAME; ADDRESS; LOCATION OF COLLATERAL. Borrower's name and
address and the location of the Collateral are accurately set forth on the
signature page of this Agreement.
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(d) TITLE TO COLLATERAL. Borrower has good and marketable
title to the Collateral, free and clear of any liens, encumbrances or security
interests whatsoever, other than the security interest granted by this Agreement
and existing liens, encumbrances or security interests disclosed to and accepted
by Lender in writing. Borrower will keep the Collateral free of all other liens,
encumbrances and security interests. Borrower will defend the Collateral against
all claims and demands of all persons at any time claiming any interest in the
Collateral.
(e) PRIORITY OF SECURITY INTEREST. The execution and delivery
of this Agreement creates a valid security interest in the Collateral, and upon
the filing of a UCC-1 financing statement with the Michigan Secretary of State,
Lender will have a first priority perfected security interest in the Collateral,
subject to no other security interest, except as otherwise approved by Lender in
writing.
(f) FINANCING STATEMENTS. Except as disclosed to and accepted
by Lender in writing, no financing statement covering all or any part of the
Collateral is on file in any public office. Borrower will execute financing
statements in form acceptable to Lender and will pay the cost of filing
financing statements in all public offices wherever filing is deemed desirable
by Lender. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement under the UCC and may be filed by Lender
in any filing office. This Agreement shall be terminated only by the filing of a
termination statement in accordance with the applicable provisions of the UCC.
(g) PAYMENT OF TAXES. Borrower shall pay when due and before
any interest, collection fees or penalties accrue, all taxes, expenses,
assessments, liens or other charges which may now or hereafter be levied or
assessed against the Collateral. Borrower shall furnish proof of payment upon
request of Lender.
(h) INSURANCE.
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(i) Borrower shall keep the tangible
Collateral (including, without limit, the Equipment and Inventory) insured for
the benefit of Lender. Borrower covenants and agrees that Borrower will carry
and maintain, at its sole cost and expense, the following types of insurance, in
the amounts specified: (A) comprehensive general liability insurance with
initial limits of not less than Two Million Dollars ($2,000,000) for death or
injuries to one person and not less than One Million Dollars ($1,000,000) for
death or injuries to two or more persons in one occurrence, and not less than
One Million Dollars ($1,000,000) for damage to property; (B) fire and extended
coverage insurance on a replacement form with inflation-guard, vandalism and
malicious mischief endorsements; (C) rent loss or business interruption
insurance covering a period of not less than twelve (12) months; (D) an umbrella
policy of not less than $5,000,000; and (E) such other insurance and in such
amounts as may be reasonably required from time to time by Lender. All insurance
shall be in forms and with companies satisfactory to Lender. Borrower shall
deliver to Lender the policies evidencing the required insurance with premiums
fully paid, and with loss payee clauses (making all losses payable to Lender).
Renewals of the required insurance (together with evidence of premium prepayment
for one (1) year in advance) shall be delivered to Lender at least thirty (30)
days before the expiration of any existing policies. All policies and renewals
shall provide that they may not be canceled or amended without giving Lender
thirty (30) days prior written notice of cancellation or amendment.
(ii) Should Borrower fail to insure or fail to
pay the premiums on any required insurance or fail to deliver the policies or
renewals as provided above, Lender may have the insurance issued or renewed (and
pay the premiums on it for the account of Borrower) in amounts and with
companies and at premiums as Lender deems appropriate. If Lender elects to have
insurance issued or renewed to insure Lender's interest, Lender shall have no
duty or obligation of any kind to also insure Borrower's interest or to notify
Borrower of Lender's actions. Any sums paid by Lender for insurance, as provided
above, shall be a lien upon the Collateral, added to the amount secured by this
Agreement, and payable immediately by Borrower to Lender, with interest on those
sums at the highest rate charged by Lender on any of the Indebtedness (but not
to exceed the maximum interest rate permitted by law).
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(iii) In the event of loss or damage, the
proceeds of all required insurance shall be paid to Lender. No loss or damage
shall itself reduce the Indebtedness. Lender or any of its employees is each
irrevocably appointed attorney-in-fact for Borrower and is authorized to adjust
and compromise each loss without the consent of Borrower, to collect, receive
and receipt for the insurance proceeds in the name of Lender and Borrower and to
endorse Borrower's name upon any check in payment of the loss. The proceeds
shall be applied first toward reimbursement of all costs and expenses of Lender
in collecting the proceeds (including, without limit, court costs and reasonable
attorneys' fees), and then toward payment of the Indebtedness or any portion of
it, whether or not then due or payable and in whatever order of maturity as
Lender may elect, or Lender, at its option, may apply the insurance proceeds, or
any part of them, to the repair or rebuilding of the Collateral. If Lender
elects to restore or repair the Collateral, Borrower and Lender shall enter into
a written agreement satisfactory to Lender providing for the terms under which
the insurance proceeds shall be released. Application of proceeds by Lender
toward later maturing installments of the Indebtedness shall not excuse Borrower
from making the regularly scheduled installment payments nor shall such
application extend or reduce the amount of any of these payments.
(i) MAINTENANCE OF COLLATERAL. Borrower will maintain the
Collateral in good condition and repair. Borrower will promptly inform Lender of
any loss or diminution in value of the Collateral. Borrower shall make or permit
no modification, compromise or substitution for the Collateral without the prior
written consent of Lender.
(j) LEASED FACILITIES. If the Collateral is located at a
facility leased by Borrower, Borrower will obtain from the lessor a consent to
the granting of a security interest in the Collateral and a subordination of the
lessor's interest in the Collateral. The consent and subordination shall be in
form acceptable to Lender.
(k) REPORTING OBLIGATIONS. Borrower hereby covenants and
agrees to deliver to Lender or cause Meritage Hospitality Group Inc., a Michigan
corporation ("MHG"), to deliver to Lender the following:
(A) Management prepared and certified quarterly
financial statements for Borrower within forty-five (45) days after the
end of the first three (3) quarters of each fiscal year of Borrower.
(B) Annual financial statements for MHG audited by an
independent certified public accountant, which annual financial
statements will include a consolidating statement on Borrower, within
one hundred twenty (120) days after the end of each fiscal year of
Borrower.
(C) Management prepared and certified unit level
profit and loss statements relating to the operation of the Franchised
Operations within forty-five (45) days after the end of each fiscal
year of Borrower;
Such financial statements shall be true and correct in all respects, shall be
prepared in accordance with generally accepted accounting principles, and shall
fairly represent the respective financial conditions of the subjects thereof as
of the respective dates thereof. If Borrower's financial statements are prepared
on a consolidated basis, Borrower hereby covenants and agrees to prepare
financial statements specifically relating to the operation of the Franchised
Operations. At the request of Lender, Borrower shall obtain the consent of
Borrower's accountant(s) to the inclusion of Borrower's most recent financial
statement in any regulatory filing or report to be filed by Lender.
(l) FRANCHISE AGREEMENT. Borrower is a franchisee in good
standing with Wendy's International, Inc., a/n Ohio corporation ("Franchisor"),
and is not in default under its franchise agreements with Franchisor relating to
the Franchised Operations ("Franchise Agreements"). Borrower agrees to comply
with the terms of the Franchise Agreements and to take all actions necessary or
required to keep the Franchise Agreements in full force and effect. Borrower
will not encumber its rights under each of the Franchise Agreements, except to
Lender, provided Franchisor has consented to such encumberance. Borrower agrees
to promptly provide Lender with a copy of any notice of default under each of
the Franchise Agreements. Further, Borrower agrees to promptly
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provide Lender with a copy of any notice to Borrower of the existence of any
breach which, with notice or the passage of time, or both, would entitle
Franchisor to terminate each of the Franchise Agreements.
(m) FIXED CHARGE COVERAGE RATIO. Borrower shall maintain a
Fixed Charge Coverage Ratio (as hereinafter defined) of not less than 1.2 to 1.0
for Borrower's business operations generally and not less than 1.4 to 1.0 for
the Franchised Operations. "Fixed Charge Coverage Ratio" shall mean Borrower's
Operating Cash Flow divided by its Fixed Charges (each as defined below). The
Fixed Charge Coverage Ratios shall be calculated by Borrower from time to time
and dates as determined by Lender, and Borrower shall submit such information as
Lender may require to confirm and approve Borrower's calculation of the Fixed
Charge Coverage Ratios.
(i) "Fixed Charges" shall mean the sum of the following items
set forth on a pro forma basis separately stated for both Borrower's
business operations generally and for each of the Franchised
Operations, in each case, for the applicable twelve (12) month
operating period:
(A) current portion of long-term debt (defined as the
current portion of long-term debt due to mature during the next twelve
(12) month operating period, as stated in Borrower's applicable
financial statement, plus, if not already included therein, the current
portion of principal payments imputed on all capital leases), plus
(B) interest expense (defined as the interest expense
as stated on Borrower's applicable financial statement, plus, if not
already included therein, the interest expense imputed on all capital
leases), plus
(C) the current portion of operating leases (defined
as the amount of rent due under operating leases for the next twelve
(12) month operating period).
(ii) "Operating Cash Flow" shall mean the sum or subtraction
of the following items separately stated for both Borrower's business
operations generally and for each of the Franchised Operations, in each
case, for the applicable prior twelve (12) month operating period:
(A) net income (defined as the net income stated on
Borrower's applicable financial statement), plus
(B) depreciation and amortization (defined as the
depreciation and amortization expense as stated on Borrower's
applicable financial statement), plus
(C) interest expense (as defined above), plus
(D) operating lease expense (defined as the amount of
rental expense paid under operating leases, as stated on Borrower's
applicable financial statements), plus or minus
(E) non-recurring items (defined as items which, when
computing cash flow, should in Lender's reasonable business judgment,
be added back to or subtracted from net income to normalize results).
3. PROHIBITION ON TRANSFER OR MODIFICATION. Borrower shall not
transfer, sell, assign, lease or modify the Collateral or any interest therein,
any part thereof, or any substantial portion of Borrower's other assets or
property without the prior written consent of Lender. Notwithstanding the
foregoing, Borrower may use Collateral if the same is in the ordinary course of
Borrower's business and on customary terms and at usual prices.
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4. PROHIBITION ON CHANGE OF NAME, ORGANIZATION OR LOCATION. Borrower
shall not assume a different name, conduct its business at any location other
than as appears in this Agreement, merge, consolidate, change or reorganize its
organizational structure nor change the location of any of the Collateral
without, in each instance, obtaining the prior written consent of Lender thirty
(30) days prior to any such event.
5. RIGHT OF SETOFF. Borrower hereby grants Lender the right,
exercisable at any time, whether or not Borrower is then in default, to set off
or apply against the Indebtedness any account or deposit with Lender in which
Borrower has an interest or against any other amounts which may be in the
possession of Lender and to the credit of Borrower.
6. EXAMINATION OF RECORDS AND COLLATERAL. Borrower shall keep full and
accurate records of Borrower's business, including, without limit, records
related to the Collateral, and such records shall be open to inspection and
duplication by Lender at all reasonable times. Lender may enter upon any
property owned by or in the possession of Borrower to examine and inspect the
Collateral. Borrower shall promptly provide Lender with any information
concerning the Collateral as Lender may request at any time.
7. REIMBURSEMENT OF EXPENSES. Borrower shall reimburse Lender for all
reasonable costs and expenses, including attorneys' fees, incurred by Lender in
enforcing the rights of Lender under this Agreement. All costs and expenses
shall be included in the Indebtedness and shall be immediately due and payable
together with interest at the maximum legal rate. Such costs and expenses shall
include, without limitation, costs or expenses incurred by Lender in any
bankruptcy, reorganization, insolvency or other similar proceeding.
8. RIGHTS AND OBLIGATIONS OF LENDER. In the event that Borrower fails
to pay taxes, maintain insurance or perform any other obligation arising under
this Agreement, Lender may pay or perform such obligation(s) for the account of
Borrower and the same shall be added to the Indebtedness and shall be
immediately due and payable together with interest at the highest rate charged
by Lender on any of the Indebtedness (but not to exceed the maximum rate
permitted by law). Lender shall not be liable for any loss to the Collateral nor
shall such loss reduce the balance due.
9. INDEMNIFICATION. Borrower shall indemnify and save Lender harmless
from all claims, obligations, costs, expenses, including attorneys' fees, and
causes of action or other rights asserted against Lender and relating to this
Agreement and/or the Collateral, except those arising from the gross negligence
or wilful misconduct of Lender.
10. EVENTS OF DEFAULT AND REMEDIES.
(a) EVENTS OF DEFAULT. Any of the following events shall, for
purposes of this Agreement, constitute an "Event of Default":
(i) Failure by Borrower to pay any amount owing on or
with respect to the Indebtedness when due, whether by maturity, acceleration or
otherwise, which failure continues for three (3) days after the date of written
notice to Borrower from Lender of such default.
(ii) Any failure by Borrower to comply with, or
breach by Borrower of, any of the non-monetary terms, provisions, warranties or
covenants of the Notes, this Agreement or the other Loan Documents, which
failure continues for fifteen (15) days after the date of written notice to
Borrower from Lender of such default.
(iii) Institution of remedial proceedings or other
exercise of rights and remedies by the holder of any security interest or other
lien against the Collateral or any portion thereof.
(iv) The insolvency of Borrower or the admission in
writing of Borrower's inability to pay debts as they mature.
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(v) Any statement, representation or information made
or furnished by or on behalf of Borrower to Lender in connection with or to
induce Lender to provide any of the Indebtedness shall prove to be false or
materially misleading when made or furnished.
(vi) Institution of bankruptcy, reorganization,
insolvency or other similar proceedings by or against Borrower, unless, in the
case of a petition filed against Borrower, the same is dismissed within sixty
(60) days of filing.
(vii) The issuance or filing of any judgment,
attachment, levy, garnishment or the commencement of any related proceeding or
the commencement of any other judicial process upon or in respect to Borrower or
the Collateral.
(viii) Sale or other disposition by Borrower of any
substantial portion of assets or property.
(ix) Death, dissolution, merger, consolidation,
termination of existence, insolvency, business failure or assignment for the
benefit of creditors of or by Borrower.
(x) If there is any failure by Borrower to pay when
due any indebtedness (other than to Lender) or in the observance or performance
of any term, covenant or condition in any document evidencing, securing or
relating to such indebtedness, which failure continues beyond any applicable
cure period.
(xi) Receipt by Borrower of a notice of termination
of any of the Franchise Agreement.
(xii) If the Notes, this Agreement and the other Loan
Documents have not been assigned to the Trust, the default by Borrower which
continues beyond any applicable grace or cure period under the Retained
Obligations; provided, however, if the Notes, this Agreement and the other Loan
Documents are assigned to the Trust, this clause (xii) shall be of no force or
effect during the term of such assignment.
(xiii) In the event that the Notes, this Agreement
and the other Loan Documents are assigned to the Trust, the default by Borrower
which continues beyond any applicable grace or cure period under the Trust
Obligations.
(b) REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of any
Event of Default, Lender shall have the following rights:
(i) Declare all or part of the Indebtedness
immediately due and payable.
(ii) Borrower agrees, upon request of Lender, to
assemble the Collateral and make it available to Lender at any place which is
reasonably convenient for Borrower and Lender. Borrower grants Lender permission
to enter upon any premises owned or occupied by Borrower for the purpose of
taking possession of the Collateral.
(iii) Lender shall have the right to take possession
of the Collateral, with or without demand, and with or without process of law.
Lender shall have the right to sell and dispose of the Collateral and to
distribute the proceeds according to law. In connection with the right of Lender
to take possession of the Collateral, Lender may take possession of any other
items of property in or on the Collateral at the time of taking possession, and
hold them for Borrower without liability on the part of Lender. If there is any
statutory requirement for notice, that requirement shall be met if Lender shall
send notice to Borrower at least five (5) days prior to the date of sale,
disposition or other event giving rise to the required notice. Borrower shall be
liable for any deficiency remaining after disposition of the Collateral.
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(iv) Lender shall also have any one or more of the
rights and remedies under the UCC or at law or equity to enforce the payment of
the Indebtedness.
(c) REMEDIES GENERALLY.
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(i) All remedies provided for in Section 10(b) shall
be available to the extent not prohibited by law. Each remedy shall be
cumulative and additional to any other remedy of Lender at law, in equity or by
statute. No delay or omission to exercise any right or power accruing upon any
default or Event of Default shall impair any such right or power or shall be
construed to be a waiver of, or acquiescence in, any such default or Event of
Default.
(ii) Lender may waive any Event of Default and may
rescind any declaration of maturity of payments on the Indebtedness. In case of
such waiver or recision Borrower and Lender shall be restored to their
respective former positions and rights under this Agreement. Any waiver by
Lender of any default or Event of Default shall be in writing and shall be
limited to the particular default waived and shall not be deemed to waive any
other default.
(d) APPLICATION OF PROCEEDS. Any proceeds received by Lender from the
exercise of remedies pursuant to Section 10(b) of this Agreement shall be
applied as follows:
(i) First, to pay all costs and expenses incidental
to the leasing, foreclosure, sale or other disposition of the Collateral. These
costs and expenses shall include, without limit, any costs and expenses incurred
by Lender (including, without limit, attorneys' fees and disbursements), and any
taxes and assessments or other liens and encumbrances prior to the lien of this
Agreement.
(ii) Second, to all sums expended or incurred by
Lender, directly or indirectly in carrying out any term, covenant or agreement
under this Agreement or any related document, together with interest as provided
in this Agreement.
(iii) Third, to the payment of the Indebtedness. If
the proceeds are insufficient to fully pay the Indebtedness, then application
shall be made first to late charges and interest accrued and unpaid, then to any
applicable prepayment premiums, and then to unpaid fees and other charges, then
to the outstanding principal balance.
(iv) Fourth, any surplus remaining shall be paid to
Borrower or to whomsoever may be lawfully entitled.
(e) FURTHER ACTIONS. Promptly upon the request of Lender,
Borrower shall execute, acknowledge and deliver any and all further documents,
security agreements, financing statements and assurances, and do or cause to be
done all further acts as Lender may require to confirm and protect the lien of
this Agreement or otherwise to accomplish the purposes of this Agreement.
(f) ATTORNEYS FEES. Any reference in this Agreement to
attorneys' fees shall refer to fees, charges, costs and expenses of in-house and
outside attorneys and paralegals, whether or not a suit or proceeding is
instituted, and whether incurred at the trial court level, on appeal, in a
bankruptcy, administrative or probate proceeding, in consultation with counsel,
or otherwise. All costs, expenses and fees of any nature for which Borrower is
obligated to reimburse or indemnify Lender are part of the Indebtedness secured
by this Agreement and are payable upon demand, unless expressly provided
otherwise, with interest until repaid at the highest rate charged on any of the
Indebtedness (but not to exceed the maximum rate permitted by law).
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11. PARTIAL RELEASES. Lender shall from time to time execute and
deliver to Borrower, within ten (10) business days after the written request of
Borrower, UCC termination statements with respect to a portion of the Collateral
secured hereunder, provided that (a) Borrower shall not be in default under any
of the terms, covenants or conditions of any document or instrument evidencing
or securing the Indebtedness; (b) the outstanding principal balance of the
applicable promissory note, together with interest, premiums, costs and all
other sums on that amount, shall be paid in full; and (c) all termination
statements shall be prepared by Lender at Borrower's expense. The portion of the
Collateral released under this Section 11 shall be determined by matching the
Collateral located at or related to a specified Franchised Operation with the
promissory note referencing that Franchised Operation on its face.
12. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be construed according
to the laws of the State of Michigan.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the successors and assigns of Borrower including, without limit, any debtor
in possession or trustee in bankruptcy for Borrower, and the rights and
privileges of Lender under this Agreement shall inure to the benefit of its
successors and assigns. This shall not be deemed a consent by Lender to a
conveyance by Borrower of all or any part of the Collateral or of any ownership
interest in Borrower.
(c) NOTICES. Notice from one party to another relating to this
Agreement, if required, shall be deemed effective if made in writing (including
telecommunications) and delivered to the recipient's address, telex number or
telecopier number set forth by any of the following means: (i) hand delivery,
(ii) registered or certified mail, postage prepaid, (iii) express mail or other
overnight courier service or (iv) telecopy, telex or other wire transmission
with request for assurance of receipt in a manner typical with respect to
communications of that type. Notice made in accordance with these provisions
shall be deemed delivered on receipt if delivered by hand or wire transmission,
on the third business day after mailing if mailed by registered or certified
mail, or on the next business day after mailing or deposit with the postal
service or an overnight courier service if delivered by express mail or
overnight courier. Borrower's telecopier number is (000) 000-0000, and Lender's
telecopier number is (000) 000-0000.
(d) ENTIRE AGREEMENT; AMENDMENTS. This Agreement and any
agreement to which it refers state all rights and obligations of the parties and
supersede all other agreements (oral or written) with respect to the security
interests granted by this Agreement. Any amendment of this Agreement shall be in
writing and shall require the signature of Borrower and Lender.
(e) PARTIAL INVALIDITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of the remaining provisions of this Agreement.
(f) INSPECTIONS. Any inspection, audit, appraisal or
examination by Lender or its agents of the Collateral or of information or
documents pertaining to the Collateral is for the sole purpose of protecting
Lender's interests under this Agreement and is not for the benefit or protection
of Borrower or any third party.
(g) JOINT AND SEVERAL LIABILITY. In the event that more than
one person or entity executes this Agreement, the obligations of each person or
entity shall be joint and several.
(h) AUTOMATIC REINSTATEMENT. Notwithstanding any prior
revocation, termination, surrender or discharge of this Agreement, the
effectiveness of this Agreement shall automatically continue or be reinstated,
as the case may be, in the event that:
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(i) Any payment received or credit given by
Lender in respect of the Indebtedness is determined to be a preference,
impermissible setoff, fraudulent conveyance, diversion of trust funds, or
otherwise required to be returned to Borrower or any third party under any
applicable state or federal law, including, without limit, laws pertaining to
bankruptcy or insolvency, in which case this Agreement shall be enforceable as
if any such payment or credit had not been received or given, whether or not
Lender relied upon this payment or credit or changed its position as a
consequence of it.
(ii) In the event of continuation or
reinstatement of this Agreement, Borrower agrees upon demand by Lender to
execute and deliver to Lender those documents which Lender determines are
appropriate to further evidence (in the public records or otherwise) this
continuation or reinstatement, although the failure of Borrower to do so shall
not affect in any way the reinstatement or continuation. If Borrower does not
execute and deliver to Lender such documents upon demand, Lender and each
officer of Lender is irrevocably appointed (which appointment is coupled with an
interest) the true and lawful attorney of Borrower (with full power of
substitution) to execute and deliver such documents in the name and on behalf of
Borrower.
(i) WAIVER OF JURY TRIAL. BORROWER AND LENDER ACKNOWLEDGE THAT
THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH
COUNSEL OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL
BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR
THE INDEBTEDNESS.
(j) ASSIGNMENT. This Agreement is freely assignable, in whole
or in part, by Lender without the consent of Borrower. Except as set forth
below, Lender shall provide Borrower with written notice of assignment. Lender
shall be fully discharged from all responsibility accruing hereunder from and
after the effective date of any such assignment. Lender's assignee shall, to the
extent of the assignment, be vested with all the powers and rights of Lender
hereunder (including those granted under Section 10 hereof or otherwise with
respect to the Collateral), and to the extent of such assignment the assignee
may fully enforce such rights and powers, and all references to Lender shall
mean and refer to such assignee. Lender shall retain all rights and powers
hereby given not so assigned, transferred and/or delivered. Borrower hereby
waives all defenses which Borrower may be entitled to assert against Lender's
assignee with respect to liability accruing hereunder prior to the effective
date of any assignment of Lender's interest herein. Borrower may not, in whole
or in part, directly or indirectly, assign this Agreement or its rights
hereunder or delegate its duties hereunder without, in each instance, the
specific prior written consent of Lender, which consent shall not be
unreasonably withheld.
(k) SECURITIZATION. Borrower understands and agrees that
Lender may, from time to time, assign its rights and powers under the Notes,
this Agreement and any other Loan Documents, in whole or in part, in connection
with a securitization program. Borrower agrees to enter into an amendment to the
Notes, this Agreement and any other Loan Documents if such amendments are
required by a nationally recognized rating agency in connection with a
securitization program sponsored by Lender and in which the Notes, this
Agreement and any other Loan Documents are to be included; provided that
Borrower shall not be obligated to enter into any agreement which adversely
affects Borrower or adversely alters any of the financial terms of the Loan
Documents. Lender shall pay Borrower's reasonable costs associated with such
assignment.
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Borrower has executed this Agreement on the day and year first above
written.
Borrower's principal place of business is located in the County of
Kent, State of Michigan.
Locations of the Collateral:
000 00xx Xx.XX, Xxxxxxxxxxx, Xxxxxxxx
0000 Xxxxxxx Xx., Xxxxxx Xxxxx, Xxxxxxxx
00000 Xxxxx St., Holland, Michigan
0000 Xxxx Xxxxxxxx Xx., Xxxxxx, Xxxxxxxx
BORROWER:
WM LIMITED PARTNERSHIP - 1998 D/B/A WENDY'S
OF MICHIGAN
By MCC Food Service Inc.
Its: General Partner
By
---------------------------------
Its
------------------------------
Borrower's Address:
00 Xxxxx Xxxxxx XX, Xxxxx 000, Xxxxx Xxxxxx, Xxxxxxxx 00000
Borrower's Tax Identification Number: 00-0000000
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