AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is made
effective as of October 1, 2000, by and between FFCA ACQUISITION CORPORATION,
a Delaware corporation ("FFCA"), whose address is 00000 Xxxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, and SHONEY'S, INC., a Tennessee corporation
("Debtor"), whose address is 0000 Xxx Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
PRELIMINARY STATEMENT:
Debtor and FFCA FUNDING CORPORATION, a Delaware corporation
("Original Lender") executed a loan agreement dated September 6, 2000
("Original Loan Agreement") for the long-term financing for each of the
Premises. Concurrently therewith, Debtor executed a Note ("Original Note")
for each Loan, and each Original Note was secured by a Mortgage executed by
Debtor in favor of Original Lender encumbering each of the Premises.
Original Lender has assigned the Original Loan Agreement, the Loan Documents,
the Original Notes and Mortgages to FFCA.
Each Loan will hereafter be evidenced by an Amended and Restated Note
and secured by a first priority security interest in the corresponding
Premises pursuant to the corresponding Mortgage recorded under the Original
Loan Agreement and a Confirmation of Mortgage and Security Agreement. FFCA
has committed to refinance the Loans pursuant to the terms and conditions of
this Agreement and the other Loan Documents.
Unless otherwise expressly defined herein, all capitalized terms used
in this Agreement shall have the meanings set forth in Section 1.
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.
"AMENDED AND RESTATED NOTE" means each of, and "AMENDED AND
RESTATED NOTES" means all of, the amended and restated notes executed
by Debtor in connection with the execution of this Agreement with
FFCA.
"BUSINESS DAY" means any day on which national banks are not
required or authorized to remain closed.
"CAPITAL LEASE" has the meaning set forth in Section 7.B.
"CLOSING" has the meaning set forth in Section 4.
"CLOSING DATE" has 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 June
29, 2000 between FFCA and Debtor, and any amendments or supplements
thereto.
"CONFIRMATION OF MORTGAGE AND SECURITY AGREEMENT" or
"CONFIRMATIONS OF MORTGAGE AND SECURITY AGREEMENT" means, as the
context may require, the Confirmation of Mortgage and Security
Agreement executed concurrently with this Agreement by Debtor for the
benefit of Lender for each of the Mortgages corresponding to the
applicable Amended and Restated Notes. A Confirmation of Mortgage
and Security Agreement will be executed for each Mortgage.
"COUNSEL" means legal counsel to Debtor licensed in the
states in which (i) the Premises are located, (ii) Debtor is
incorporated or formed; provided, however, that legal counsel
licensed in states other than Delaware and approved by FFCA may
provide opinions with respect to Delaware law, and (iii) Debtor
maintains its chief executive office, as selected by Debtor and
approved by FFCA.
"DEBT" has the meaning set forth in Section 7.B.
"DEBTOR ENTITIES" means, collectively, Debtor, Related
Debtors and any Affiliate of Debtor or any Related Debtor.
"DEFAULT RATE" has the meaning set forth in the Notes.
"DE MINIMIS AMOUNTS" means, (i) with respect to any
presence, Release or Threatened Release of Hazardous Materials, those
quantities of Hazardous Materials in any form or combination of
forms, which do not constitute a violation requiring regulation or
remediation under any Environmental Laws in the state in which the
affected Premises is located, and (ii) with respect to the use or
storage of Hazardous Materials in or upon the Premises, those
quantities of Hazardous Materials customarily
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employed in the ordinary course of, or associated with the operation
of a Permitted Concept and used or stored in compliance with
Environmental Laws.
"DEPRECIATION AND AMORTIZATION" has the meaning set forth in
Section 7.B.
"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 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 September 6, 2000,
executed by Debtor for the benefit of the Indemnified Parties and
such other parties as are identified in such agreement with respect
to a Premises as such Environmental Indemnity Agreements have been
assigned to FFCA, 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.
"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, rulings, orders or decrees promulgated 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
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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 any of the
Premises to any Governmental Authority or other Person, 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 environmental insurance
policies issued by Environmental Insurer to Original Lender under the
Original Loan Agreement and thereafter assigned to FFCA with respect
to the Premises.
"EQUIPMENT PAYMENT AMOUNT" has the meaning set forth in
Section 7.B.
"EVENT OF DEFAULT" has the meaning set forth in Section 10.
"FCCR AMOUNT" has the meaning set forth in Section 10.A (6).
"FFCA ENTITIES" means, collectively, FFCA, Franchise Finance
and any Affiliate of FFCA or Franchise Finance.
"FFCA PAYMENTS" has the meaning set forth in Section 7.B.
"FIXED CHARGE COVERAGE RATIO" has the meaning set forth in
Section 7.B.
"FRANCHISE FINANCE" means Franchise Finance Corporation of
America, a Delaware corporation, and its successors.
"GAAP" means generally accepted accounting principles in the
United States, at the time at which the information affected by these
principles was prepared, consistently applied.
"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.
"GROSS SALES" has the meaning set forth in Section 7.B.
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"HAZARDOUS MATERIALS" means (a) any toxic substance or
hazardous waste, substance, solid waste or related material, or any
pollutant or contaminant; (b) radon gas, asbestos in any form which
is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment 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.
"INTEREST EXPENSE" has the meaning set forth in Section 7.B.
"LICENSE AGREEMENT" means the license agreement dated as of
September 6, 2000 between Debtor and Original Lender, which License
Agreement was assigned to FFCA, pursuant to which Debtor granted FFCA
a license to use the trade name and trademarks of Debtor and to
operate the Premises as Shoney's restaurants upon the terms and
conditions set forth therein, as the same may be amended from time
to time.
"LOAN" or "LOANS" means, as the context may require, the
loan for each Premises, or the loans for all of the Premises as
described in the Original Loan Agreement and as refinanced in this
Agreement.
"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
Amended and Restated Notes, the Mortgages, the Confirmations of
Mortgage and Security Agreement, the Environmental Indemnity
Agreements, the UCC-1 Financing Statements, the License Agreement and
all other documents, instruments and agreements executed in
connection with the Original Loan Agreement, all as assigned, amended
and supplemented and any and all replacements or substitutions
thereof, including, but not limited to, those executed concurrently
with this Agreement.
"LOAN POOL" means:
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(i) in the context of a Securitization, any pool or
group of loans that are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are
sold, transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to
which participating interests are granted to the same participant.
"LOST NOTE" has the meaning set forth in Section 7.C.
"MATERIAL ADVERSE EFFECT" means any material adverse effect
on (i) any Premises, including, without limitation, the operation of
any of the Premises as a Permitted Concept and/or the value of any
of the Premises or (ii) Debtor's ability to perform its obligations
under this Agreement, the Notes and the other Loan Documents.
"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, deed to secure debt or mortgage dated as of
September 6, 2000 executed by Debtor for the benefit of Original
Lender and thereafter assigned by Original Lender to FFCA with
respect to a Premises or the deeds of trust, deeds to secure debt or
mortgages dated September 6, 2000 executed by Debtor for the benefit
of Original Lender and thereafter assigned by Original Lender to FFCA
with respect to all of the Premises, as the same may be amended from
time to time. The terms "Mortgage" and "Mortgages" shall also
include the Confirmations of Mortgage and Security Agreement executed
by Debtor concurrently with this Agreement with respect to the
Premises. There will be an executed Confirmation of Mortgage and
Security Agreement for each Premises.
"NET INCOME" has the meaning set forth in Section 7.B.
"NOTE" or "NOTES" means, as the context may require, the
original promissory note dated as of September 6, 2000 executed by
Debtor in favor of Original Lender which Note was subsequently
assigned to FFCA, evidencing a Loan with respect to a Premises or the
promissory notes dated as of September 6, 2000 executed by Debtor in
favor of Original Lender which were subsequently assigned to FFCA,
evidencing the Loans with respect to all of the Premises, as such
Notes are amended and restated concurrently with this Agreement as
evidenced by the Amended and Restated Notes, as applicable, and as
such Note may be otherwise amended from time to time, as the same may
be amended, restated and/or substituted from time to time, including,
without limitation, as a result of the payment of the FCCR Amount 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. All references in the Loan Documents to the Note which are
applicable to the period of time from and after the execution and
delivery of an
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Amended and Restated Note, to the extent applicable, shall mean such
Amended and Restated Note.
"OPERATING LEASE EXPENSE" has the meaning set forth in
Section 7.B.
"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, the Related Loan Documents; provided, however,
the term "Other Agreements" shall not include the agreements and
instruments defined as the Loan Documents.
"PARTICIPATION" means one or more grants by FFCA or any of
the other FFCA Entities to a third party of a participating interest
in notes evidencing obligations to repay secured or unsecured loans
owned by FFCA or any of the other FFCA Entities or any or all
servicing rights with respect thereto.
"PERMITTED CONCEPT" means a Shoney's restaurant; provided,
however, up to two (2) of the Premises may be operated as another
nationally or regionally recognized restaurant concept.
"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 on September 6, 2000 in connection with the closing of the
Loans, and those certain matters set forth on the ALTA surveys of the
Premises obtained pursuant to Section 9.D which the Title Company has
insured over and approved by FFCA, in connection with the closing of
the Loans.
"PERSON" means any individual, corporation, partnership,
limited liability company, trust, unincorporated organization,
Governmental Authority or any other form of entity.
"PERSONAL PROPERTY" means, to the extent applicable, all
machinery, appliances, furniture, equipment, trade fixtures, and
other personal property now or hereafter located on or at the
Premises or, to the extent applicable, the Substitute Premises.
"PREMISES" means, collectively, the parcel or parcels of
real estate described by addresses and FFCA File Numbers on Exhibit
A attached hereto, together with all rights, privileges and
appurtenances associated therewith and all buildings, fixtures and
other improvements now or hereafter located thereon (whether or not
affixed to such real estate), and all Personal Property. As used
herein, the term "Premises" shall mean either a singular property or
all of the properties collectively, as the context may require.
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"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.
"REFINANCING" has the meaning set forth in Section 2(b).
"RELATED DEBTORS" means, collectively, Shoney's Properties
Group 1, LLC, a Delaware limited liability company, Shoney's
Properties Group 2, LLC, a Delaware limited liability company,
Shoney's Properties Group 3, LLC, a Delaware limited liability
company, Shoney's Properties Group 4, LLC, a Delaware limited
liability company, Shoney's Properties Group 5, LLC, a Delaware
limited liability company, and Shoney's Properties Group 6, LLC, a
Delaware limited liability company.
"RELATED LEASES" means, collectively, those certain Master
Leases dated September 6, 2000 between any of the FFCA Entities and
any of the Related Debtors as may be amended from time to time.
"RELATED LOAN AGREEMENTS" means, collectively, those certain
loan agreements dated as of September 6, 2000 between any of the FFCA
Entities and any of the Related Debtors, as the same may be amended
from time to time.
"RELATED LOAN DOCUMENTS" means, collectively, the Related
Loan Agreements, the Related Notes and all other agreements and
instruments between, among or by any of the Related Debtors and, or
for the benefit of, any of the FFCA Entities and executed pursuant
to any of the Related Loan Agreements, as the same may be amended
from time to time.
"RELATED NOTES" means, collectively, the promissory notes
dated as of September 6, 2000 executed by any of the Related Debtors
and payable to any of the FFCA Entities pursuant to any of the
Related Loan Agreements and any amendments, extensions or
modifications thereof.
"RELEASE" means any presence, release, deposit, discharge,
emission, leaking, spilling, seeping, migrating, injecting, pumping,
pouring, emptying, escaping, dumping, disposing, leaching or other
movement of Hazardous Materials in, on, under, to or from 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, except in De Minimis
Amounts.
"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
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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.
"SUBJECT PREMISES" has the meaning set forth in Section
10.A(6).
"SUBSTITUTE DOCUMENTS" has the meaning set forth in Section
13.
"SUBSTITUTE PREMISES" means one or more parcels of real
estate substituted for a Premises in accordance with the requirements
of Section 13, together with all rights, privileges and appurtenances
associated therewith and all buildings, fixtures and other
improvements located thereon (whether or not affixed to such real
estate), and all Personal Property. For purposes of clarity, where
two or more parcels of real property comprise a Substitute Premises,
such parcels shall be aggregated and deemed to constitute the
Substitute Premises for all purposes of this Agreement.
"SUBSTITUTE PREMISES PERMITTED EXCEPTIONS" has the meaning
set forth in Section 13.
"THREATENED RELEASE" means a substantial likelihood of a
Release which requires action to prevent or mitigate damage to the
soil, surface waters, groundwaters, land, stream sediments, surface
or subsurface strata, ambient air or any other environmental medium
comprising or surrounding the Premises which may result from such
Release.
"TITLE COMPANY" means the title insurance company described
in Section 4.
"TRANSFER" means one or more sales, transfers or assignments
by FFCA or any of the other FFCA Entities to a third party of notes
evidencing obligations to repay secured or unsecured loans owned by
FFCA or any of the other FFCA Entities or any or all servicing rights
with respect thereto.
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"UCC-1 FINANCING STATEMENTS" means such UCC-1 Financing
Statements as Original Lender required to be executed and delivered
by Debtor with respect to the transactions contemplated by the
Original Loan Agreement, which UCC-1 Financing Statements were
assigned by Original Lender to FFCA pursuant to certain UCC-3
Financing Statements.
2. TRANSACTION. (a) On the terms and subject to the
conditions set forth in the Loan Documents, FFCA shall refinance 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 $8,750,000.00, 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. FFCA will provide reasonable
cooperation in connection with any request by Debtor for information related
to the preparation of necessary or appropriate tax records and reports for
the Premises.
(b) FFCA shall convert the interest rate under the Notes
from a variable rate of interest to a fixed rate of interest (the
"Refinancing"). The Notes shall be amended and restated pursuant to the
Amended and Restated Notes. Simultaneously with the execution and delivery
of the Amended and Restated Notes, Debtor shall also execute the
Confirmations of Mortgage and Security Agreement encumbering the Premises
corresponding to the Notes to evidence the continued first priority of such
Mortgages. In addition, on or prior to the Refinancing, Debtor shall
(i) cause Counsel to deliver such opinions as
FFCA may reasonably require with respect to the Amended and
Restated Notes and the other documents FFCA requires Debtor
to execute as a result of the Refinancing, the substance of
which opinions shall be substantially the same as those in
the opinions delivered at the Closing of the Original Loan
Agreement, modified to the extent required to address the
transactions covered by this Agreement.
(ii) cause Title Company to issue an endorsement
to the loan policies of title insurance issued to FFCA in
connection with the Closing (as defined in the Original Loan
Agreement) with respect to the Mortgages corresponding to
the Notes bringing current the effective date of such
policies through the date of execution of this Agreement
without adding any exceptions to such policies other than
for then current taxes not yet due and payable, and
(iii) take such other actions and execute such
additional documents as FFCA may reasonably require to
evidence the Refinancing.
Debtor shall be solely responsible for the payment of all costs and expenses
incurred by FFCA and Debtor as a result of the Refinancing, including,
without limitation, Debtor's attorney's fees
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and expenses, FFCA's reasonable attorney's fees and expenses, title insurance
charges, recording fees and documentary stamps charges.
3. INTENTIONALLY DELETED.
4. CLOSING. (a) Each Loan shall be closed (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 November 30, 2000, 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 pro forma endorsement for
each Premises from Lawyers Title Insurance Corporation ("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 such transaction shall be borne by Debtor,
including, without limitation, the cost of title insurance and all
endorsements required by FFCA, survey charges, UCC and litigation search
charges, the attorneys' fees of Debtor, reasonable attorneys' fees and
expenses of FFCA, stamp taxes, mortgage taxes, transfer fees, escrow and
recording fees and site inspection fees for the Premises, if any. 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 if not
previously paid at the Closing of the Original Loan Agreement. Except for
the original Loan Documents assigned to FFCA and not amended and restated
hereunder, all Closing documents under this Agreement shall be dated as of
October 1, 2000.
Debtor and FFCA hereby employ Title Company to act as escrow agent
in connection with the transaction described in this Agreement. Title Company
shall not cause the transaction to close unless and until it has received
written instructions from 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 reasonable attorneys' fees incurred in
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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 Debtor and 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 as of 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.
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,
subject to general equity principles and to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws from time to
time in effect affecting the enforcement of creditors' rights
generally.
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 will be reaffirmed as of
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
12
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 copies of the following financial statements:
(1) Debtor's Form 10-Q for the quarters ended
February 20, 2000 and May 14, 2000 as filed with the United
States Securities and Exchange Commission ("SEC");
(2) Debtor's Form 10-K for the years ended
October 26, 1997, October 25, 1998 and October 31, 1999, as
filed with the SEC;
(3) Debtor's unaudited consolidated profit and
loss statements and balance sheets for the 28 week period
ended May 14, 2000; and
(4) Debtor's unaudited profit and loss
statements for each of the Premises for (i) the 52 week
period ended October 25, 1998 and the 53 week period ended
October 31, 1999; (ii) the 20 week periods ended March 14,
1999 and March 19, 2000; and (iii) the 28 week periods ended
May 9, 1999 and May 14, 2000 (collectively, the "Financial
Statements").
The Financial Statements are true, correct and complete in
all material respects as of their respective dates; and no material
adverse change has occurred with respect to any such Financial
Statements provided to FFCA since the date such Financial Statements
were prepared or delivered to FFCA. Debtor understands that FFCA is
relying upon such Financial Statements and Debtor represents that
such reliance is reasonable. All such Financial Statements listed
in paragraph (1) and (2) above, were prepared in accordance with GAAP
and all such Financial Statements accurately reflect, as of their
respective dates, the financial condition of each entity to which
they pertain.
B. ORGANIZATION AND AUTHORITY. (1) Debtor is duly
organized or formed, validly existing and in good standing under the
laws of its state of incorporation or formation, and qualified as a
foreign corporation, to do business in any jurisdiction where any of
the Premises are located. All necessary corporate action has been
taken to authorize the execution, delivery and performance of this
Agreement and the other Loan Documents.
(2) The Person(s) who have executed this Agreement on
behalf of Debtor are duly authorized so to do.
C. ENFORCEABILITY OF DOCUMENTS. Upon execution by
Debtor, this Agreement, the other Loan Documents and the License
Agreement shall constitute the legal, valid and binding obligations
of Debtor, enforceable against Debtor in accordance with their
13
respective terms, subject to general equitable principles and to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws from time to time in effect affecting the enforcement
of creditors' rights generally.
D. LITIGATION. There are no suits, actions,
proceedings or investigations pending or to the best of Debtor's
knowledge threatened against or involving Debtor or the Premises
before any arbitrator or, Governmental Authority which might
reasonably be expected to result in any Material Adverse Effect.
E. ABSENCE OF BREACHES OR DEFAULTS. No default on the
part of Debtor exists under any document, instrument or agreement to
which Debtor is a party or by which Debtor or the Premises is subject
or bound, which could reasonably be expected to result in any
Material Adverse Effect. The authorization, execution, delivery and
performance of this Agreement, the other Loan Documents and the
License Agreement 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 or any of the Premises is subject or bound. The
authorization, execution, delivery and performance of this Agreement,
the other Loan Documents, and the License Agreement will not violate
any applicable law, statute, regulation, rule, ordinance, code, rule
or order which could reasonably be expected to result in any Material
Adverse Effect.
F. UTILITIES. The Premises are served by public
utilities deemed adequate by Debtor to permit full utilization of the
Premises as a Permitted Concept and all utility connection fees and
use charges that are due and payable have been paid in full.
G. INTENDED USE AND ZONING; COMPLIANCE WITH LAWS.
Debtor intends to use each of the Premises solely for the operation
of a Permitted Concept, in accordance with the standards of
operations in effect on a system - wide basis for such Permitted
Concept, 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, except for such non-compliance as
would not reasonably be expected to result in any Material Adverse
Effect. 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, except for such
non-compliance as would not reasonably be expected to result in any
Material Adverse Effect.
H. AREA DEVELOPMENT; WETLANDS. No condemnation or
eminent domain proceedings affecting the Premises have been commenced
or, to the best of Debtor's
14
knowledge, are contemplated as of the Closing. Debtor has not
received written notice that the areas where the Premises are located
have been declared blighted by any Governmental Authority or that the
real property bordering any of the Premises are designated by any
Governmental Authority as wetlands.
I. LICENSES AND PERMITS; ACCESS. All required licenses
and permits, both governmental and private, to use and operate each
of the Premises as a Permitted Concept have been obtained, except for
such licenses or permits, the absence of which would not be
reasonably expected to have any Material Adverse Effect. Each of the
Premises has access, either directly or by a perpetual easement, to
public roads and ways, and, to the best of Debtor's knowledge, all
such public roads and ways have been completed and dedicated to
public use.
J. CONDITION OF PREMISES AND PERSONAL PROPERTY. The
Premises, and the Personal Property are of good workmanship and
materials, fully equipped and operational, in good condition and
repair and, to the best of Debtor's knowledge, free from structural
defects.
K. ENVIRONMENTAL. Except as set forth in the
Questionnaires, other than in De Minimis Amounts or in compliance
with all applicable Environmental Laws, no Hazardous Materials have
been used, handled, manufactured, generated, produced, stored,
treated, processed, transferred or disposed of at or on any of the
Premises by Debtor or its Affiliates or, to the best of Debtor's
knowledge, by any prior owner of any of the Premises which might
reasonably be expected to result in any Material Adverse Effect.
Except as set forth in the Questionnaires, other than in De Minimis
Amounts, no Release or Threatened Release has occurred at or on any
of the Premises while in the possession and control of the Debtor and
its Affiliates or, to the best of Debtor's knowledge, while in the
possession and control of any prior owner of any of the Premises
which might reasonably be expected to result in any Material Adverse
Effect. Except as set forth in the Questionnaires, the activities,
operations and business undertaken on, at or about each of the
Premises by Debtor and its Affiliates, including, without limitation,
any past or ongoing alterations or improvements at each of the
Premises, are and have been at all times in compliance with all
Environmental Laws, except such non-compliance which would not
reasonably be expected to result in any Material Adverse Effect.
Except as set forth in the Questionnaires, no further action is
required to remedy any Environmental Condition or violation of, or
to be in compliance in all material respects with, any Environmental
Laws and no lien has been imposed on any of the Properties 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 any of the
Premises. There is no pending or, to the best of Debtor's knowledge,
threatened litigation or proceeding before any Governmental Authority
in which any Person alleges the violation or threatened violation of
any Environmental Laws or the presence, Release, Threatened Release
or placement on or at any of the Premises of any Hazardous Materials,
or of any facts which would give rise to any such
15
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 intends to
require an investigation to determine that there has been a violation
of any Environmental Laws at, on or in connection with any of the
Premises or that there exists a presence, Release, Threatened Release
or placement of any Hazardous Materials on or at any of the Premises,
or the use, handling, manufacturing, generation, production, storage,
treatment, processing, transportation or disposal of any Hazardous
Materials at or on any of the Premises; (b) received any notice under
the citizen suit provision of any Environmental Law in connection
with any of 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 any of the Premises or
any facilities, operations or activities conducted thereon or any
business conducted in connection therewith.
Original Lender charged Debtor a fee for the Environmental
Policies. Debtor acknowledges that the Environmental Policies are
for the sole protection of FFCA and will not protect Debtor or
provide Debtor with any coverage thereunder.
The information and disclosures in the Questionnaires are
true, correct and complete in all material respects, FFCA may rely
on such information and disclosures, and the Persons executing the
Questionnaires were duly authorized to do so.
L. TITLE TO PREMISES AND PERSONAL PROPERTY; FIRST
PRIORITY LIEN. 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 and the terms and conditions of any recorded instrument
that creates any non-fee simple easement or estate which are part of
the description of the Premises that is insured under Schedule A of
the title insurance policies issued by the Title Company to FFCA and
approved by FFCA in connection with the closing of the Loans. Debtor
is the owner of all of the Personal Property except for the personal
property described on Exhibit B to this Agreement 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 (and upon filing of the
UCC-3 Financing Statements) and the Personal Property.
M. NO OTHER AGREEMENTS AND OPTIONS. Neither Debtor nor
any of 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 exercising any
of
16
its rights or remedies under the Loan Documents 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
mechanics' liens, or rights to claim a mechanics' lien in favor of
any materialman, laborer, or any other Person 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 date such payment becomes delinquent; 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; and Debtor shall and does
hereby agree to defend, indemnify and forever hold FFCA and FFCA's
designees harmless for, from and against any and all such mechanics'
lien claims, 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 in all respects as of the Closing
Date as if made and restated in full as of such time and shall survive the
Closing.
7. COVENANTS. Debtor covenants to FFCA from and after the
Closing Date as follows:
A. INSPECTIONS. Debtor shall, at all reasonable times
and upon not less than five Business Days' prior written notice
(except for emergencies or where notice is not otherwise
practicable), (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,
correspondence and documents relating to the Premises, and the
financial books and records, including lists of delinquencies,
relating to the ownership, operation, and maintenance of the Premises
(including, without limitation, any of the foregoing information
stored in any computer files), (ii) allow such Persons to make such
inspections, tests, copies, and verifications as FFCA considers
necessary, and (iii) if the Fixed Charge Coverage Ratio requirement
set forth in the following Section 7.B has not been maintained, pay
expenses reasonably incurred by FFCA from time to time in
17
conducting such inspections, tests, copies and verifications upon
demand (such amounts to bear interest at the Default Rate until paid
if not paid upon demand).
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 with respect to all of the
Premises then owned by the Debtor of at least 1.25:1, as determined
on the last day of each fiscal year of Debtor, the first such fiscal
year commencing on October 29, 2000, and ending on October 28, 2001,
and, thereafter, each fiscal year commencing on the day after the
last Sunday in October of each year and ending on the last Sunday in
October of the following year. For purposes of this Section, the
term "Fixed Charge Coverage Ratio" shall mean with respect to the
fifty-two (52) or, when applicable due to Debtor's fiscal year end,
fifty-three (53) week period of time immediately preceding the date
of determination, the ratio calculated for such period of time, each
as determined in accordance with GAAP, of (a) the sum of Net Income,
Depreciation and Amortization, Interest Expense, Operating Lease
Expense, and the Equipment Payment Amount less a corporate overhead
allocation in an amount equal to 4.5% of Gross Sales, to (b) the sum
of the FFCA Payments, Operating Lease Expense and the Equipment
Payment Amount; provided, however, that, with respect to each of the
Premises which are leased pursuant to Section 3.06(c) of the
Mortgage, clause (a) of the ratio for such Premises during the period
of time in which the applicable lease is in effect shall be equal to
the sum of the rent payable to Debtor, as lessor, under the
applicable lease plus the royalty payments payable to Debtor by the
applicable franchisee.
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, accounted for as Capital Leases, and (v)
obligations under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against
loss in respect of, indebtedness or obligations of others of
the kinds referred to in clauses (i) through (iv) above.
18
"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 (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 amounts, whether as
principal or interest, payable under the Notes.
"GROSS SALES" shall mean the sales or other income
arising from all business conducted at all of the Premises
during the period of determination, less sales tax and any
amounts attributable to coupons, discounts and complimentary
meals, if any.
"INTEREST EXPENSE" shall mean for any period of
determination, the sum of all interest accrued or which
should be accrued in respect of all Debt of Debtor 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.
"NET INCOME" shall mean with respect to the period
of determination, the aggregate 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
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 sum of all
payments and 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.
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 executed by FFCA stipulating that such
Lost Note has been mutilated, destroyed, lost or stolen and of an
instrument executed by FFCA in a form reasonably acceptable to Debtor
in which FFCA agrees to indemnify, defend and hold Debtor harmless
from and against any and all Losses that Debtor may incur by virtue
of the mutilation, destruction, loss or theft of
19
such Lost Note, in substitution therefor, a new promissory note
containing the same terms and conditions as such Lost Note with a
notation thereon of the unpaid principal and accrued and unpaid
interest. Debtor shall provide fifteen days' prior notice to FFCA
before making any payments to third parties in connection with a
Lost Note.
D. AFFILIATE TRANSACTIONS. Unless otherwise approved
by FFCA, all transactions between Debtor and any of its Affiliates
shall be on terms substantially as advantageous to Debtor as those
which could be obtained by Debtor in a comparable arm's length
transaction with a non-Affiliate of Debtor.
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 (either de jure or de facto) 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:
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 Personal Property, except the
personal property described on Exhibit B to this Agreement, free and
clear of all liens, encumbrances, charges and security interests.
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 AND PERSONAL PROPERTY. FFCA
shall have inspected and approved the Premises and the Personal
Property, the Premises and the Personal Property shall be in good
condition and repair, free from structural defects, and of good
workmanship and materials, and the Premises shall be fully equipped
and operational, and with a suitable layout, physical plant, traffic
pattern and location, all as determined by FFCA in its sole
discretion. In this regard, FFCA acknowledges that it has inspected
and approved the Premises and the Personal Property and has accepted
the same and that this condition has been satisfied.
C. EVIDENCE OF TITLE. FFCA shall have received for
each of the Premises a preliminary title report and irrevocable
commitment to insure title in the amount of the Loan relating to such
Premises, by means of a mortgagee's, ALTA extended coverage
20
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 Permitted
Exceptions, 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 Personal Property free
and clear of all liens, encumbrances, charges and security interests.
In this regard, FFCA acknowledges that the title policies and
endorsements previously delivered to the Original Lender and
subsequently issued to FFCA, together with all pro forma bring down
endorsements and the Permitted Exceptions are accepted and approved
by FFCA and that this condition has been satisfied.
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. In this regard, FFCA
acknowledges that the Surveys have been reviewed and approved by FFCA
and that this condition has been satisfied.
E. ENVIRONMENTAL. FFCA shall have received an
assignment of the Environmental Policy with respect to each of the
Premises.
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. In
this regard, FFCA acknowledges that this condition has been
satisfied.
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, Debtor or any of the Related Debtors
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
any Material Adverse Effect or which would materially and adversely
affect FFCA's willingness to consummate the transaction contemplated
by this Agreement, as determined by FFCA in its sole and absolute
discretion. All of Debtor's representations and warranties made
under this Agreement shall be true and correct on and as of the
21
Closing Date as if made and restated on such date and FFCA shall
have received a certificate from an officer of Debtor to that effect.
H. PROOF OF INSURANCE. Debtor shall have delivered to
FFCA certificates of insurance and, if requested by FFCA, copies of
insurance policies showing that all insurance required by the Loan
Documents is in full force and effect.
I. OPINION OF COUNSEL TO DEBTOR. Debtor shall have
caused Counsel to prepare and deliver opinions to FFCA in form and
substance satisfactory to FFCA and its counsel.
J. INTENTIONALLY DELETED.
K. INTENTIONALLY DELETED.
L. CLOSING DOCUMENTS. At or prior to the Closing Date,
in addition to other documents that may be required to be executed
and delivered by this Agreement, Debtor shall execute and deliver or
cause to be executed and delivered to Title Company or FFCA or
Debtor, as may be appropriate, such other documents, payments,
instruments and certificates, as FFCA may require in form acceptable
to FFCA, including, without limitation, the following:
(1) The Amended and Restated Notes;
(2) The Confirmations of Mortgage and Security
Agreement;
(3) Proof of Insurance; and
(4) Opinion of Counsel to Debtor.
Debtor and FFCA acknowledge that (i) the following documents have
been previously executed and delivered pursuant to the Original Loan
Agreement and, thereafter, Original Lender assigned all of its right, title,
and interest to FFCA; and (ii) all terms and provisions remain unchanged and
in full force and effect:
(1) Evidence of satisfactory zoning as shown on
the surveys for the Premises;
(2) UCC-1 Financing Statements;
(3) Environmental Indemnity Agreements;
(4) License Agreement; and
(5) Environmental Indemnity Insurance.
Upon fulfillment or waiver of all of the above conditions, FFCA shall
refinance the Loans and close this transaction 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"):
22
(1) If any representation or warranty of Debtor set
forth in any of the Loan Documents is false in any material respect,
or if Debtor 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 Document 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 Section 10.A (6)),
conditions, or obligations of this Agreement; provided, however, if
any such failure does not involve the payment of any monetary sum,
is not willful or intentional, does not place any rights or interest
in collateral of 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 corrected
or cured within such 30-day period, as determined by FFCA in its
reasonable discretion, and Debtor is diligently pursuing a correction
or cure of such failure, then Debtor shall have a reasonable period
to correct or cure such failure beyond such 30-day period, which
shall not exceed 90 days after receiving notice of the failure from
FFCA (except if Debtor is diligently pursuing such cure and such cure
relates to an Environmental Condition which could not reasonably be
expected to result in any Material Adverse Effect, Debtor may have
up to an additional 180 days within which to complete such cure).
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 an involuntary petition under the Code or an
involuntary Action that is not dismissed within 90 days after the
initiation of such involuntary petition or Action, or is not
generally paying its debts as the same become due.
23
(5) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or grace
periods, under any other Loan Document, any Related Loan Document,
any Other Agreement or any of the Related Leases.
(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 to either (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 or Notes corresponding to the 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 for
each Subject Premises in accordance with the terms of Section 13 (the
failure of Debtor to complete such substitution within 60 days after
FFCA shall have given 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 the preceding sentence, "FCCR
Amount" means that sum of money which, when subtracted from the
outstanding principal amount of the Note corresponding to a Subject
Premises, and assuming the resulting principal balance is reamortized
in equal monthly payments over the remaining term of such Note at the
rate of interest set forth therein, will result in an adjusted
aggregate Fixed Charge Coverage Ratio for all of the Premises of at
least 1.25:1 based on the prior year's operations. Promptly after
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
in equal monthly payments over the then remaining term of such Note
at the rate of interest set forth therein.
B. Upon the occurrence of an Event of Default, subject to the
limitations set forth in Section 10.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
24
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, 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.
B. Debtor shall not, without the prior written consent
of FFCA, sell, assign, lease, 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, as expressly permitted by the Mortgages,
provided, however, the foregoing shall not apply to (x) any transfer of stock
traded publicly during such period of time that the stock of Debtor is
publicly traded or (y) any other transfer of stock that does not result in a
change of voting control in Debtor. A change in voting control of Debtor
shall not be deemed to have occurred in a corporate reorganization in which
Debtor becomes a wholly-owned subsidiary of a new holding corporation having
the same shareholders as Debtor immediately before the reorganization (except
for changes as a result of ordinary market transactions or the exercise of
any dissenters' rights) and pursuant to which no Material Adverse Effect
occurs solely as a result of the reorganization.
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"), for, from and against any and all
losses, costs, claims, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and court costs, arising as the result
of a breach of any of the representations, warranties, covenants, agreements
or obligations of Debtor set forth in this Agreement or any other Loan
Document. 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.
25
13. SUBSTITUTION. A. Subject to fulfillment of the conditions
set forth in this Xxxxxxx 00, Xxxxxx shall have the right to obtain a release
of the lien and security interest of the Mortgage encumbering a Premises by
substituting a Substitute Premises for such Premises if:
(i) the Fixed Charge Coverage Ratio for such Premises for the
preceding twelve month period (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 of the
replaced Premises on an individual basis) is less than 1:1; provided,
however, that Debtor may not substitute, in the aggregate, more than
two (2) of the Premises pursuant to the provisions of this subitem
(i);
(ii) the terms of Section 10.A(6) permit such substitution;
(iii) there is an Environmental Condition affecting such Premises
which could reasonably be expected to have any Material Adverse
Effect;
(iv) an Event of Default has occurred under the Mortgage
encumbering such Premises which arises solely from a breach of the
provisions of Sections 3.04 or 3.07 thereof.
B. Debtor's right to substitute a Substitute Premises for a
Premises pursuant to the preceding Section 13.A shall be subject to the
fulfillment of each of the following terms and conditions:
(i) Debtor shall provide FFCA with notice of its
intention to substitute a Substitute Premises. Any notice with
respect to a proposed substitution pursuant to the preceding Section
13.A must be delivered within the applicable time period contemplated
by Section 10.A(6).
(ii) The closing of each substitution pursuant to the
preceding Section 13.A shall take place within the applicable time
period contemplated by Section 10.A(6). The closing of any other
substitution shall take place within 60 days after delivery to FFCA
of the substitution notice described in the preceding Section
13.B(i).
(iii) Debtor must provide for the substitution of a
Substitute Premises, and the proposed Substitute Premises must:
(1) be a Permitted Concept, in good condition
and repair, ordinary wear and tear excepted;
(2) have for the twelve month period preceding
the date of the closing of such substitution a Fixed Charge
Coverage Ratio (with the definitions of Section 7.B being
deemed to be modified as applicable to provide for a
calculation of the Fixed Charge Coverage
26
Ratio for each of the Premises on an individual basis) at
least equal to the greater of the then Fixed Charge Coverage
Ratio for the Premises being replaced or the Fixed Charge
Coverage Ratio for such Premises as of the Closing;
(3) be owned in fee simple by Debtor, free and
clear of all liens, restrictions, easements and
encumbrances, except such matters as are acceptable to FFCA
(the "Substitute Premises Permitted Exceptions");
(4) have a fair market value no less than the
greater of the then fair market value of the Premises to be
replaced or the fair market value of such Premises to be
replaced as of the Closing, all as reasonably determined by
FFCA's in-house inspectors and underwriters.
(iv) 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 insurance and the attorneys' fees and expenses of
counsel to Debtor and FFCA.
(v) FFCA shall have received a preliminary title report
and irrevocable commitment to insure title in the amount of the then
outstanding principal balance of the Loan relating to the Premises
to be replaced by means of a mortgagee's ALTA extended coverage
policy of title insurance (or its equivalent, in the event such form
is not issued in the jurisdiction where the proposed Substitute
Premises is located) for such proposed Substitute Premises issued by
Title Company showing good and marketable title in 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.
FFCA shall also have received evidence reasonably satisfactory to
FFCA that Debtor is, or will be, the owner of all of the Personal
Property at the Substitute Premises (except for the personal property
described on Exhibit B to this Agreement) on the Substitute Premises,
in both instances free and clear of all liens, encumbrances, charges
and security interests.
(vi) 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 Section 13.B(v) to be deleted, and
disclosing no matters other than the Substitute Premises Permitted
Exceptions.
27
(vii) FFCA shall have received an environmental insurance
policy with respect to such proposed Substitute Premises, which
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.
(viii) 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).
(ix) no Event of Default shall have occurred and be
continuing under any of the Loan Documents (other than the Event of
Default, if any, which was the basis for the substitution).
(x) Debtor shall have executed such documents as are
comparable to the 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, UCC-1 Financing Statements and an amendment to the License
Agreement to substitute the Substitute Premises therein for the
Premises to be replaced (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.
(xi) 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.
(xii) Debtor shall have delivered to FFCA certificates of
insurance and, if requested by FFCA, certified copies or duplicate
originals of the insurance policies showing that all insurance
required by the Substitute Documents is in full force and effect.
Upon satisfaction of the foregoing conditions with respect to the release of
a Premises:
(a) the proposed Substitute Premises shall be deemed
substituted for the Premises to be replaced;
(b) the Loan Amount for the Substitute Premises shall be
the same as for the replaced Premises;
28
(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 was replaced;
(d) the Substitute Documents shall be dated as of the
date of the substitution;
(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; and
(f) at the closing of the substitution, Debtor shall
convey fee simple insurable title to the replaced Premises to a third
party other than any of the Related Debtors "as-is" by special or
limited warranty deed or quit claim deed subject only to those
matters approved in writing by FFCA.
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 shall be in writing and given by (i) hand
delivery, (ii) facsimile, (iii) express overnight delivery service
or (iv) certified or registered mail, return receipt requested, and
shall be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) transmission, if delivered by facsimile during regular
business hours of recipient or, if not, on the next Business Day, (c)
the next Business Day, if delivered by express overnight delivery
service, or (d) the third Business Day following the day of deposit
of such notice with the United States Postal Service, if sent by
certified or registered mail, return receipt requested. Notices
shall be provided to the parties and addresses (or facsimile numbers,
as applicable) specified below:
29
If to Debtor: Shoney's, Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx, Esq.
Senior Vice President and
General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to FFCA: Xxxxxx X. Xxxxx, Esq.
Executive Vice President, General Counsel
and Secretary
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (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; SECTION REFERENCES. 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. References to a particular Section herein shall mean such
Section of this Agreement unless specific reference is also made to
another instrument or agreement.
E. 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
30
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. Subject to the "Carveouts", as hereinafter set forth,
it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Agreement by Debtor,
that (i) there shall be absolutely no personal liability on the part
of the trustees, members, partners, shareholders, officers,
directors, employees and agents of Debtor and its successors or
assigns, to FFCA with respect to any of the terms, covenants and
conditions of this Agreement or the other Loan Documents, and (ii)
FFCA waives all claims, demands and causes of action against the
trustees, members, partners, shareholders, officers, directors,
employees and agents of Debtor and its successors or assigns in the
event of any breach by Debtor of any of the terms, covenants and
conditions of this Agreement or the other Loan Documents to be
performed by Debtor, such exculpation of liability and waiver of
claims, however, shall not be applicable and shall be of no force or
effect upon the occurrence of any one or more of the following
specified circumstances (the "Carveouts"):
(i) Any fraud or misrepresentation by Debtor under this
Agreement, any of the other Loan Documents, or any of the Other Agreements;
(ii) Waste of any of the Premises (which shall be defined to
include damage, destruction or disrepair of the Premises caused by a willful
act or grossly negligent omission of the Debtor, but to exclude ordinary wear
and tear in the absence of gross negligence); and
(iii) Misapplication of proceeds resulting from a Casualty or
Taking (each as defined in the Mortgages).
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.
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.
31
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
reasonable 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 of a party shall mean both the fees
and costs of independent outside counsel retained by a party with
respect to this transaction and the fees and costs of a party's in-
house counsel incurred in connection with 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 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 non-exclusive 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 Arizona,
without giving effect to its principles of conflicts of law. To the
extent that a court of competent jurisdiction finds Arizona law
inapplicable with respect to any provisions hereof, then, as to those
provisions only, the laws of the states where the Premises are
located shall be deemed to apply as required. 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 any of the Premises
32
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. EACH OF DEBTOR AND FFCA HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY IT AGAINST
THE OTHER PARTY OR SUCH OTHER PARTY'S 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 EACH
OF THE PARTIES HERETO OF ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY HAS
BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
FURTHERMORE, EACH OF FFCA AND DEBTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER PARTY AND
ANY OF SUCH OTHER PARTY'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 SUCH PARTY AGAINST THE OTHER PARTY OR ANY OF SUCH OTHER
PARTY'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
RESPECTIVE 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 EACH OF DEBTOR AND FFCA OF ANY
RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN.
33
P. TRANSFERS, PARTICIPATIONS AND SECURITIZATIONS. (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, complete a Transfer, Participation or
Securitization with respect to any Note, Mortgage and/or any of the
other Loan Documents or any or all servicing rights with respect
thereto.
(2) 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, or any or all servicing rights with respect thereto,
including, without limitation, (i) providing such documents,
financial and other data, and other information and materials (the
"Disclosures") which would typically be required with respect to
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 or Securitization, so
long as such amendments would not change any of the economic terms
or provisions of the Loan Documents or have any material adverse
effect upon Debtor, or the transactions contemplated by 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. 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; provided, however, FFCA shall be responsible for the
preparation of any amendments contemplated by clause (ii) of
subsection (2) immediately above.
(4) Notwithstanding anything to the contrary contained
in this Agreement or the other Loan Documents:
(a) an Event of Default or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Loan Document or Other Agreement which
relates to a loan or sale/leaseback transaction which has
not been the subject of a Securitization, Participation or
Transfer shall not constitute an Event of Default or a
breach or default, as applicable, under any Loan Document or
Other Agreement which relates to a loan which has been the
subject of a Securitization, Participation or Transfer;
34
(b) an Event of Default or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Loan Document or Other Agreement which
relates to a loan which has been included in any Loan Pool
shall not constitute an Event of Default or a breach or
default, as applicable, under any Loan Document or Other
Agreement which relates to a loan which has been included in
any other Loan Pool;
(c) the Loan Documents and Other Agreements
corresponding to the loans in any Loan Pool shall not secure
the obligations of any of the Debtor Entities contained in
any Loan Document or Other Agreement which does not
correspond to a loan in such Loan Pool; and
(d) the Loan Documents and Other Agreements
which do not correspond to a loan in any Loan Pool shall not
secure the obligations of any of the Debtor Entities
contained in any Loan Document or Other Agreement which does
correspond to a loan in such Loan Pool.
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/ Xxxxxx X. Xxxxx
-----------------------------------
Xxxxxx X. Xxxxx, Esq.
Executive Vice President,
General Counsel and Secretary
DEBTOR:
SHONEY'S, INC., a Tennessee
corporation
By /s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
Vice President
35
STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA )
The foregoing instrument was acknowledged before me on November 1,
2000 by Xxxxxx X. Xxxxx, Esq., Executive Vice President, General Counsel and
Secretary of FFCA ACQUISITION CORPORATION, a Delaware corporation, on behalf
of the corporation.
/s/ Xxxxxxxx X. Xxxxxxxxxx
------------------------------
Notary Public
My Commission Expires:
STATE OF Tennessee )
) SS.
COUNTY OF Davidson )
The foregoing instrument was acknowledged before me on November 1,
2000 by Xxxxxxx X. Xxxxxxx, Vice President of SHONEY'S, INC., a Tennessee
corporation..
/s/
-----------------------------
Notary Public
My Commission Expires:
5/26/02
-------------------------------
EXHIBITS AND SCHEDULES OMITTED DUE TO IMMATERIALITY.
