Exhibit 10.34
LOAN AGREEMENT
BETWEEN
CNL APF PARTNERS, LP, a Delaware limited partnership
AND
SYBRA, INC., a Michigan corporation
Dated as of December 21, 1999
TABLE OF CONTENTS
PAGE
1. PAYMENT OF PRINCIPAL AND INTEREST.......................... 1
2. CONDITIONS PRECEDENT....................................... 1
3. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES............... 2
4. APPLICATION OF PAYMENTS.................................... 2
5. CHARGES; LIENS............................................. 3
6. INSURANCE.................................................. 3
7. PRESERVATION AND MAINTENANCE OF PROPERTY................... 5
8. PROTECTION OF LENDER'S SECURITY............................ 5
9. BOOKS AND RECORDS.......................................... 6
10. CONDEMNATION............................................... 6
11. FORBEARANCE BY LENDER NOT A WAIVER......................... 7
12. ESTOPPEL CERTIFICATE....................................... 8
13. LEASES OF THE PROPERTY..................................... 8
14. REMEDIES CUMULATIVE........................................ 8
15. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY.............. 9
16. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN
BORROWER; ASSUMPTION ...................................... 9
17. NOTICE..................................................... 9
18. SUCCESSORS AND ASSIGNS BOUND; JOINT AND SEVERAL LIABILITY;
AGENTS; CAPTIONS .......................................... 10
19. GOVERNING LAW; SEVERABILITY............................... 10
20. ASSIGNMENT OF LEASES AND RENTS; APPOINTMENT OF RECEIVER;
LENDER IN POSSESSION...................................... 10
21. ACCELERATION: REMEDIES.................................... 11
22. SUBROGATION............................................... 13
23. PARTIAL INVALIDITY........................................ 13
24. REPRESENTATIONS OF BORROWER............................... 13
25. BORROWER'S ADDITIONAL COVENANTS........................... 15
26. MAINTENANCE OF CASH FLOW.................................. 16
27. ASSIGNMENT BY LENDER...................................... 16
28. SECURITIZATION OPINIONS; FINANCIAL INFORMATION............ 17
29. DEFINITIONS............................................... 17
30. CONSTRUCTION LOAN......................................... 21
31. WAIVER OF JURY TRIAL...................................... 21
32. MISCELLANEOUS............................................. 22
33. ADDITIONAL NON-UNIFORM PROVISIONS......................... 23
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is made as of December 21, 1999,
between SYBRA, INC., a Michigan corporation, whose address is 0000 Xxxxx Xxxxxx,
Xxx Xxxxx, Xxxxxxxxxx 00000 (herein "Borrower") and CNL APF PARTNERS, LP, a
Delaware limited partnership, whose address is CNL Center at City Commons, 000
Xxxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000-0000 (herein "Lender").
WHEREAS, subject to and upon the terms and conditions herein set forth,
Lender is willing to make a loan available for the Borrower in the aggregate
amount of FIVE HUNDRED FOURTEEN THOUSAND AND NO/100 DOLLARS (US $514,000.00)
(the "Loan"), which indebtedness is evidenced by Borrower's promissory note
dated December 21, 1999 (the "Note");
WHEREAS, the indebtedness evidenced by the Note is secured by that certain
Commercial Mortgage, Assignment of Rents and Security Agreement dated as of the
date hereof (the "Instrument") granting to Lender a security interest in
Borrower's Property (as such term is defined therein), including without
limitation, Borrower's leasehold interest, as tenant, as to Site No. 133, under
that certain Lease Agreement (the "Lease") with G & G Realty, a Florida general
partnership, as Landlord, ("Landlord") dated October 10, 1989, as memorialized
in that certain Memorandum of Lease executed by Landlord and Borrower, as
tenant, and recorded in the Public Records of Polk County, Florida; and as to
Site No. 1695 under that certain Lease Agreement (the "Lease") with G & G
Realty, a Florida general partnership, as Landlord, ("Landlord") dated October
10, 1989, as memorialized in that certain Memorandum of Lease executed by
Landlord and Borrower, as tenant, and recorded in the Public Records of
Highlands County, Florida; and as to Site No. 1134 under that certain Lease
Agreement (the "Lease") with Xxxxx Xxxxxx Revocable Trust, as Landlord
("Landlord") dated October 10, 1989, as memorialized in that certain Memorandum
of Lease executed by Landlord and Borrower, as tenant, and recorded in the
Public Records of Hillsborough County, Florida; and
WHEREAS, to further secure Lender in respect of the repayment of the
indebtedness, Borrower has executed other documents with or to or in favor of
Lender in connection with the Loan (herein, together with the Note, the
Instrument, this Agreement and the guaranty of the Guarantor, if any,
guaranteeing the obligations of the Borrower, collectively the "Loan
Documents").
NOW THEREFORE, for and in consideration of Lender's making the Loan to
Borrower and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, Borrower and Lender covenant and agree as follows:
1. PAYMENT OF PRINCIPAL AND INTEREST. Borrower shall promptly pay when due the
principal of, interest on and all other sums accruing in respect of the
indebtedness evidenced by the Note, in accordance with the terms and conditions
thereof, hereof and as otherwise provided in the Loan Documents.
2. CONDITIONS PRECEDENT. The obligation of Lender to make the Loan is subject to
the satisfaction of the following conditions:
(a) all of the Loan Documents shall have been duly executed by
Borrower and delivered to Lender;
(b) all of the requirements set forth in that certain Commitment
Letter dated November 8, 1999, executed by Borrower shall have
been fulfilled or waived by Lender;
(c) no Default (as hereafter defined) has occurred and all
representations, warranties and covenants contained herein and in
the other Loan Documents shall be true and correct in all material
respects; and
(d) all corporate and legal proceedings, and all instruments and
agreements in connection with the transactions contemplated in
this Agreement and the other Loan Documents, including, without
limitation, a marked-up title commitment, shall be reasonably
satisfactory in form and substance to
Lender, and Lender shall have received all information and copies
of all documents and papers, including records of corporate
proceedings, governmental approvals, if any, which Lender may
reasonably have requested in connection therewith.
3. FUNDS FOR TAXES, INSURANCE AND OTHER CHARGES. Upon a Borrower's Default
hereunder or under the Instrument, or in the event Borrower is, or has been,
materially or habitually delinquent in the timely payment of any services,
taxes, assessments, insurance or rent payment under the Lease, at Lender's
request, Borrower shall pay to Lender or its loan servicer a sum (the "Initial
Yearly Premium Payment") equal to such amount as is deemed necessary by Lender
to be in position to pay the next annual payment of taxes and insurance when
due. Thereafter, Borrower shall pay to Lender or its loan servicer on the day
monthly installments of principal or interest are payable under the Note (or on
another day designated in writing by Lender), until the Note is paid in full, a
sum (herein, together with the Initial Yearly Premium Payment, the "Funds")
equal to one-twelfth of (a) the yearly water and sewer rates and taxes and
assessments which may be levied on the Property, (b) the yearly premium
installments for fire and other hazard insurance, rent loss insurance and such
other insurance covering the Property as Lender may require pursuant to
paragraph 5 hereof (the "Yearly Premium"), and (c) the yearly fixed rents, if
any, under the Lease, all as reasonably estimated initially and from time to
time by Lender on the basis of assessments and bills and reasonable estimates
thereof. Any waiver by Lender of a requirement that Borrower pay such Funds may
be revoked by Lender, in Lender's sole discretion, at any time upon notice in
writing to Borrower. Lender may require Borrower to pay to Lender, in advance,
such other Funds for other taxes, charges, premiums, assessments and impositions
in connection with Borrower or the Property which Lender shall reasonably deem
necessary to protect Lender's interests (herein "Other Impositions"). Lender may
require the payment of Funds in respect of Other Impositions upon a Borrower's
Default hereunder or under the Instrument, or in the event Borrower is, or has
been materially or habitually delinquent in the timely payment of such Other
Impositions. Unless otherwise provided by applicable law, Lender may require
Funds for Other Impositions to be paid by Borrower in a lump sum or in periodic
installments, at Lender's option.
Lender shall apply the Funds to pay said rates, rents, taxes, assessments,
insurance premiums and Other Impositions so long as Borrower is not in Default
(as hereinafter defined) under the Instrument, this Agreement, any of the other
Instruments (as hereinafter defined or under any of the Loan Documents). Lender
shall make no charge for so holding and applying the Funds, analyzing said
account or for verifying and compiling said assessments and bills and such Funds
shall be held in an interest-bearing account and interest shall be applied by
Lender to pay such taxes and insurance premiums. Lender shall give to Borrower,
at Borrower's expense, an annual accounting of the Funds in Lender's normal
format showing credits and debits to the Funds and the purpose for which each
debit to the Funds was made. The Funds are pledged as additional security for
the sums secured by the Instrument, this Agreement, any of the other Instruments
or in any of the Loan Documents.
If the amount of the Funds held by Lender at the time of the annual
accounting thereof shall exceed the amount deemed necessary by Lender to provide
for the payment of water and sewer rates, taxes, assessments, insurance
premiums, rents and Other Impositions, as they fall due, such excess shall be
credited to Borrower on the next monthly installment or installments of Funds
due. If at any time the amount of the Funds held by Lender shall be less than
the amount deemed necessary by Lender to pay taxes, assessments, insurance
premiums, rents and Other Impositions, as they fall due, Borrower shall pay to
Lender any amount necessary to make up the deficiency within thirty (30) days
after notice from Lender to Borrower requesting payment thereof.
Upon Borrower's Default under this Agreement, the Instrument or any of the
Loan Documents, Lender may apply, in any amount and in any order as Lender shall
determine in Lender's sole discretion, any Funds held by Lender at the time of
application (i) to pay rates, rents, taxes, assessments, insurance premiums and
Other Impositions which are now or will hereafter become due, or (ii) as a
credit against sums due under or accrued pursuant to the Instrument. Upon the
release of the Property secured by the Instrument and payment in full of the
amounts secured hereby, Lender shall promptly refund to Borrower any Funds held
by Lender applicable to the Property.
4. APPLICATION OF PAYMENTS. Unless applicable law provides otherwise, so long as
Borrower is not in Default under the Loan Documents, all payments received by
Lender from Borrower under the Note or the Loan Documents shall be applied by
Lender in the order of priority set forth in the Note. Upon Borrower's Default
under the
Loan Documents, Lender may apply any payments received by Lender in any amount
and in any order as Lender shall determine in Lender's sole discretion.
5. CHARGES; LIENS. Borrower shall pay all water and sewer rates, rents, taxes,
assessments, premiums, and Other Impositions attributable to the Property
(exclusive of Permitted Encumbrances), by Borrower making payment, within the
applicable payment period, directly to the payee thereof provided that after a
Borrower's Default under this Agreement or the Instrument or after material or
habitual payment delinquencies in respect of such payments have occurred, at
Lender's option, Borrower shall make such payments in the manner provided under
paragraph 3 hereof, or in such other manner as Lender may designate in writing.
Borrower shall promptly discharge any lien which has, or may have, priority over
or equality with, the lien of the Instrument, and Borrower shall pay, when due,
the claims of all persons supplying labor or materials to or in connection with
the Property, except for Permitted Encumbrances. Without Lender's prior written
permission, Borrower shall not allow any lien inferior to the Instrument to
exist against the Property except for Permitted Encumbrances and as otherwise
provided herein and in the Instrument.
6. INSURANCE. Borrower shall keep the improvements now existing or hereafter
erected on the Property insured by Approved Carriers (as hereinafter defined)
against loss by fire, hazards included within an all-risk "extended coverage"
endorsement and such other hazards, casualties, liabilities and contingencies,
including rent loss and/or business interruption coverage, as applicable, as
Lender and the Lease shall require and in such amounts and for such periods
provided in this paragraph 6. All premiums on insurance policies shall be paid,
at Lender's option, in the manner provided under paragraph 3 hereof, if
applicable, or in the Note, or by Borrower making payment, when due, directly to
the carrier, or in such other manner as Lender may reasonably designate in
writing.
"Approved Carriers" shall mean insurance carriers which have a long-term
debt rating of claims paying in the category "A-" or better as rated by Best's
Insurance Rating Service or otherwise reasonably acceptable to Lender.
Borrower shall purchase a blanket or other policies of insurance with
respect to the Property with such Approved Carriers, in such amounts and
covering such risks including, but not limited to, (i) loss or damage by fire,
lightning, hail, windstorm, explosion, earthquake (if in a high risk area), and
such other hazards, casualties and contingencies insured in an "all-risk"
policy, all on an occurrence basis (including at least twelve (12) months rental
or business interruption insurance and broad form boiler and machinery
insurance, if applicable); (ii) loss or damage by flood, if the Property is in a
100-year flood hazard area as defined by the Federal Emergency Management Agency
under the National Flood Insurance Program, in an amount equal to the greater of
the replacement cost of the Property or the maximum amount available through the
National Flood Insurance Program, but in no event less than the maximum amount
available under the Flood Disaster Protection Act of 1973, and regulations
issued pursuant thereof, as amended from time to time, or such lesser standard
as Lender may permit, in form complying with the "insurance purchase
requirement" of that Act; (iii) commercial general liability (including, liquor
liability if Borrower serves alcoholic beverages on the Property) with limits
equal to or greater than $1,000,000.00 per occurrence, including product and
liquor liability equal to or greater than $2,000,000.00 aggregate, and
employer's liability and workers' compensation in amounts which are customary
practice; (iv) an umbrella policy in the amount of $5,000,000.00 per occurrence
in excess of the above comprehensive general liability, product and liquor
liability, if applicable, and employer's liability requirements; and (v) such
other insurance as Lender may reasonably require from time to time or which is
required by the Loan Documents; provided, that each policy shall provide by way
of endorsement, rider or otherwise that no such insurance policy shall be
canceled or non-renewed, unless such insurer shall have first given Lender
thirty (30) days prior written notice thereof and ten (10) days notice in the
case of premium nonpayment, such property policy shall be on a replacement cost
basis ( without coinsurance) and in amount not less than one hundred percent
(100%) of the insurable value (based upon replacement cost) of the Property and
the deductible clause, if any, property policy may not exceed the lesser of (x)
one percent (1%) of the face amount of the policy, (y) $25,000.00, and (z)
unless included in a blanket policy for all the Properties (if more than one (1)
restaurant operation secures the Loan), five percent (5%) of the gross annual
income of or recovery from the applicable Property. Borrower shall cause all
property insurance carried in accordance with this paragraph 6 to be payable to
Lender as a mortgagee and not as a coinsured, and, in the case of all policies
of insurance carried by each lessee for the benefit of Borrower, if any, to
cause all such policies to be payable to Lender as Lender's interest may appear.
The Borrower shall also cause the Lender to be named as an Additional Insured
with respect to the commercial general liability and umbrella policies.
All insurance policies and renewals thereof shall be in a form reasonably
acceptable to Lender as provided in this paragraph 6 and all property policies
shall include a standard mortgagee clause in favor of and in a form reasonably
acceptable to Lender. Lender shall have the right to hold the policies, and
Borrower shall promptly furnish to Lender all renewal certificates, if Lender
requests all receipts of paid premiums. At least ten (10) days prior to the
expiration date of a policy, Borrower shall deliver to Lender a renewal policy
insurance certificate(s) in form and substance satisfactory to Lender, together
with an outline of the material terms of such renewal policy. If the Instrument
is on a leasehold, Borrower shall furnish Lender, upon request, a duplicate of
all policies, renewal notices, renewal policies and receipts of paid premiums
if, by virtue of the Lease, the originals thereof may not be supplied by
Borrower to Lender.
In the event of loss, Borrower shall give prompt written notice to the
insurance carrier and to Lender. During a Default hereunder or in the event of a
Major Casualty (as hereinafter defined) and Borrower is not diligently pursuing
resolution of claims with respect to the Property and such non-action could
result in a material adverse effect on the value of the Property, Borrower
hereby irrevocably appoints, authorizes and empowers Lender (which appointment
is coupled with an interest), and/or its assigns with respect to the Loan, as
attorney-in-fact for Borrower to make proof of loss, to adjust and compromise
any claim under insurance policies, to appear in and prosecute any action
arising from such insurance policies, to collect and receive insurance proceeds,
and to deduct therefrom Lender's reasonable expenses incurred in the collection
of such proceeds; provided however, that nothing contained in this paragraph 6
shall require Lender to incur any expense or take any action hereunder. Borrower
agrees and covenants that in the event of a Major Casualty (unless waived by
Lender) or after a Default hereunder all property insurance proceeds for the
Property (except rent loss) shall be paid to Lender, and the insurance proceeds
shall be payable to Borrower if Borrower is not in Default hereunder (and no
event exists which, with the passing of time or giving of notice, would
constitute a Default hereunder). Borrower, subject to the following sentence,
further authorizes Lender, at Lender's option, to hold the balance of a Major
Casualty proceeds provided they are used to reimburse Borrower to pay for the
cost of reconstruction or repair of the Property. Borrower shall apply the
balance of any proceeds remaining after restoration or repair to reinvestment in
the operations of the Borrower (subject, however, to the rights of Landlord
under the Lease, if the Instrument is on a leasehold). In the event of a Total
Casualty (as hereinafter defined) for the Property, then at Lender's option, all
insurance proceeds (except rent loss) shall be paid to Lender and applied to the
payment of sums secured by the Instrument, whether or not then due, in the order
of application set forth in paragraph 4 hereof, in which event the Lender shall
have the right to accelerate all amounts payable hereunder, and Borrower shall
have the right to prepay any remaining balance due, without any prepayment
premium. Borrower covenants that in no event shall Borrower use any insurance
proceeds from loss or damage to the Property or Condemnation Proceeds (as
hereinafter defined) to rebuild any buildings or improvements on any real
property other than the Property. Notwithstanding the foregoing, except in the
event of a Total Casualty (as hereinafter defined) for the Property, so long as
Borrower is not in Default hereunder (and no event exists which, with the
passing of time or giving of notice, would constitute a Default hereunder), and
Lender is satisfied that Lender is holding sufficient funds for such restoration
and repair, then the Lender shall not unreasonably withhold its approval for the
application of insurance proceeds for the cost of restoration and repair of the
Property as provided below.
If the insurance proceeds from a Major Casualty are held by Lender to pay
mechanics, materialmen and suppliers of materials, including Borrower, for the
cost of restoration and repair of the Property, Borrower shall restore the
Property to the equivalent of the type and class of construction existing before
such casualty, with new materials as required by the current building codes or
such other condition as Lender may approve in writing. If the insurance proceeds
from a Major Casualty are held by Lender, Lender shall disburse (no more than
once a month) such proceeds to Borrower for restoration and repair of the
Property, and Lender may, at Lender's option, condition disbursement of said
proceeds on Lender's approval of such plans and specifications of an architect
satisfactory to Lender, contractor's cost estimates, architect's certificates,
waivers of liens, sworn statements of mechanics and materialmen and such other
evidence of costs, percentage completion of construction, application of
payments, and satisfaction of liens as Lender may reasonably require; provided,
however, in the event of a Default, any or all such proceeds shall be applied in
the manner prescribed in paragraph 4 hereof. If the insurance proceeds are
applied to the payment of the sums secured by the Instrument, any such
application of proceeds to principal shall not extend or postpone the due dates
of the monthly installments referred to in paragraphs 1 and 3 hereof or change
the amounts of such installments unless Lender and Borrower otherwise agree in
writing. Such application of proceeds to principal shall be without penalty or
premium. If the Property is sold pursuant to paragraph 21 hereof or if Lender
acquires title to the Property, Lender shall have all of
the right, title and interest of Borrower in and to the proceeds resulting from
any damage to the Property prior to such sale or acquisition.
"Major Casualty" shall mean any damage, injury or loss to the Property by
fire, lightning, hail, windstorm, explosion, flood or other hazard or casualty
(collectively, a "Casualty") for which the cost to replace or repair would
exceed$100,000.00. "Total Casualty" shall mean any Casualty for which the cost
to replace or repair would exceed fifty percent (50%) of the value of the
Property.
7. PRESERVATION AND MAINTENANCE OF PROPERTY. Borrower shall preserve and
maintain the Property in accordance with the provisions of paragraph 6 of the
Mortgage.
Borrower (i) shall comply with the provisions of the Lease (except that
Borrower may contest enforcement or application of provisions in good faith so
long so long as Borrower has set aside adequate reserves (in accordance with
GAAP) therefor), (ii) shall give immediate written notice to Lender of any
default by Landlord under the Lease which is known to Borrower or of any notice
received by Borrower from Landlord of any default under the Lease by Borrower,
(iii) shall exercise any option to renew or extend the Lease relating to a
period prior to the maturity date of the Note and give written confirmation
thereof to Lender within thirty (30) days after such option becomes exercisable
and hereby irrevocably appoints Lender as its attorney-in-fact which appointment
is coupled with an interest, and is applicable to this paragraph 7, 7(iii),
7(iv) and 7(y) giving Lender full power and authority to exercise any option to
renew or extend the Lease (if necessary to extend the Lease to a date on or
after the Maturity Date) in the event Borrower fails to do so, (iv) shall give
immediate written notice to Lender of the commencement of any remedial
proceedings under the Lease by any party thereto and, if during the continuance
of a Default, or if Borrower is not diligently pursuing resolution of claims or
prosecuting actions with respect to the lease and such non-action could result
in a material adverse affect on the value of the Property, shall permit Lender
as Borrower's attorney-in-fact to control and act for Borrower in any such
remedial proceedings, and (v) shall use its reasonable efforts within thirty
(30) days after request by Lender to obtain from Landlord under the Lease and
deliver to Lender the lessor's estoppel certificate required thereunder, if any.
Borrower hereby expressly transfers and assigns to Lender the benefit of all
covenants contained in the Lease, whether or not such covenants run with the
land, but Lender shall have no liability with respect to such covenants nor any
other covenants contained in the Lease. Borrower hereby irrevocably authorizes
and empowers Lender as attorney-in-fact for Borrower, at Borrower's expense
during the continuance of a Default, or if Borrower is not diligently pursuing
resolution of claims or prosecuting actions with respect to the lease and such
non-action could result in a material adverse affect on the value of the
Property, to make proof of claim, to adjust and compromise any claim under any
such leases, to appear in and prosecute any action arising from such leases, and
otherwise to represent and act on behalf of the Borrower in connection with any
enforcement, arbitration, bankruptcy or similar action or proceeding involving
such leases, and to deduct therefrom Lender's expenses incurred in connection
therewith, provided however, that nothing contained in this paragraph 7 shall
require Lender to incur any expense or take any action hereunder.
Borrower shall not surrender the leasehold estate and interests conveyed by
the Instrument nor terminate or cancel the Lease creating said estate and
interests, and Borrower shall not, without the express written consent of
Lender, materially alter or amend said Lease. Borrower covenants and agrees that
there shall not be a merger of the Lease, or of the leasehold estate created
thereby, with the fee estate covered by the Lease by reason of said leasehold
estate or said fee estate, or any part of either, coming into common ownership,
unless Lender shall consent in writing to such merger; if Borrower shall acquire
such fee estate, then the Instrument shall simultaneously and without further
action be spread so as to become a lien on such fee estate.
8. PROTECTION OF LENDER'S SECURITY. If Borrower is in Default or if any action
or proceeding is commenced which materially adversely affects the Property or
title thereto or the interest of Lender therein, including, but not limited to,
eminent domain, insolvency, code enforcement, or arrangements or proceedings
involving a bankrupt or decedent, then Lender at Lender's option may make such
appearances, disburse such sums and take such action as Lender deems necessary,
in its sole discretion, to protect Lender's interest, including, but not limited
to, (i) disbursement of attorneys' fees, (ii) entry upon the Property to make
repairs, (iii) procurement of satisfactory insurance as provided in paragraph 6
hereof, (iv) if the Instrument encumbers a leasehold interest, exercise of any
option to renew or extend the Lease on behalf of Borrower and the curing of any
default of Borrower in the terms and conditions of the Lease, (v)
the payment of any taxes and/or assessments levied against the Property and then
due and payable, and (vi) discharge (by payment, bonding or otherwise) of any
lien (including any Lien) on the Property which is not a Permitted Encumbrance.
In addition, if any action or proceeding is commenced which materially adversely
affects the Property or title thereto or the interest of Lender therein,
including, but not limited to, eminent domain, insolvency, code enforcement, or
arrangements or proceedings involving a bankruptcy and if Borrower is not
diligently pursuing available legal rights or remedies with respect to such
actions or proceedings and such non-action could result in a material adverse
effect on the value of the Property, then Lender, at Lender's option, may make
such appearances, disburse such sums (including reasonable attorneys' fees) and
take such actions as Lender deems reasonably necessary to protect Lender's
interest. In addition, with respect to an environmental condition which may
affect the Property during the term of the Loan or the interest of Lender
therein, including, but not limited to any actual or suspected on-site
environmental pollution conditions which are, or are reasonably believed to be,
in violation of applicable environmental laws and have (or are reasonably
believed to have) a material adverse affect on the Property or the Borrower, or
upon a Default, then Lender (or its agent, contractor or designee), at Lender's
option, shall have the right to enter the Property to conduct tests and
investigate any such pollution conditions. If the environmental assessment
reveals environmental pollution at or above actionable levels under applicable
law, and Lender reasonably determines that Borrower is not diligently pursuing
remediation with respect thereto, then Lender may, at Lender's sole option,
engage third party providers to undertake such remediation up to the limits of
the Secured Creditor Pollution Policy relating to the Property.
9. BOOKS AND RECORDS. Borrower shall keep and maintain at all times at
Borrower's address stated below, or such other place as Lender may approve in
writing, complete and accurate books of accounts and records adequate to reflect
correctly Borrower's financial condition and the results of the operation of the
Property and copies of all written contracts, leases and other instruments which
affect the Property. Such books, records, contracts, leases and other
instruments shall be in accordance with generally accepted accounting principles
consistently applied, and shall be subject to examination and inspection by
Lender at all times during normal business hours and Lender shall have the right
to make such copies or abstracts thereof as Lender may desire. Borrower shall
furnish to Lender, within one hundred twenty (120) days after the end of each
fiscal year of Borrower, its audited current signed financial statements
(including an annual balance sheet, profit/loss statement, statement of cash
flow and footnotes) of Borrower and also an income and expense statement of the
operation of the Property (including the total rents and other income received
from any tenant, total gross receipts from operations and total expenses), each
in reasonable detail and certified by Borrower and, if Lender shall require, by
an independent certified public accountant, together with any restaurant reports
required under the Franchise Agreement, and, if the Property is subject to any
leases, Borrower shall furnish to Lender current signed rent rolls or lease
digests certified to be correct by Borrower. Borrower shall furnish to Lender,
within forty-five (45) days after the end of each fiscal quarter of Borrower, an
unaudited financial statement of Borrower and a statement of income and expenses
of the Property (and a year-end statement of income and expenses of the Property
within forty-five (45) days after the end of each fiscal year, in reasonable
detail and certified by Borrower to be true, correct and accurate to the best of
his or her knowledge. Borrower shall furnish to Lender, certified copies of all
tax returns of the Borrower within forty-five (45) days of filing; provided,
that, if the Borrower has provided audited current signed financial statements
certified by an independent certified public accountant, then no copies of the
tax returns of the Borrower shall be furnished to Lender and an annual statement
disclosing all contingent liabilities. In addition, within ten (10) days after
the end of each calendar quarter, Borrower agrees to provide to Lender a summary
of all material communications and notices received from Franchisor relating to
the Property during the preceding quarter, provided that such disclosure does
not create a breach under the terms of any Franchise Agreement. In addition,
Borrower shall also furnish such other interim statements of Borrower as Lender
may reasonably require from time to time. Borrower shall advise Lender of its
fiscal year-end date and shall notify Lender, in writing, of any change in such
year-end date.
10. CONDEMNATION. Borrower shall promptly notify Lender of any action or
proceeding known to Borrower relating to any condemnation or other taking,
whether direct or indirect, of the Property, or part thereof, and Borrower shall
appear in and prosecute any such action or proceeding unless otherwise directed
by Lender in writing. During the continuance of a Default or, if Lender has made
the determination, in its reasonable discretion, that Borrower is not diligently
and effectively prosecuting such action or proceeding and, such lack of
prosecution could result in a materially adverse effect on the value of the
Property, then immediately upon written notice to Borrower of Lender's
determination, Borrower authorizes Lender, at Lender's option, as
attorney-in-fact for Borrower, to commence, appear in and prosecute, in Lender's
or Borrower's name, any action or proceeding relating to any condemnation or
other taking of the Property,
whether direct or indirect, and to settle or compromise any claim in connection
with such condemnation or other taking. Borrower hereby irrevocably appoints
Lender as its attorney-in-fact (coupled with an interest) for the purposes
described in the immediately preceding sentence. The proceeds of any award,
payment or claim for damages, direct or consequential, in connection with any
Major Taking, whether direct or indirect, of the Property, or part thereof, or
for conveyances in lieu of condemnation ("Condemnation Proceeds"), are hereby
assigned to and shall be paid to Lender subject to the rights of Landlord under
the Lease.
In the event such condemnation or other taking involves less than fifty
percent (50%) of the value of the Property and will not result in a material
diminution of the restaurant operation, and Borrower is not in Default under the
Loan Documents (or an event exists which, with the passing of time or giving of
notice, would constitute a Default), then Borrower shall retain the Condemnation
Proceeds which shall be used for reinvestment in the operations of the Borrower.
In the event such condemnation or other taking involves is a Major Taking (as
defined below), or to the extent that Condemnation Proceeds are not necessary
for feasible repair and restoration of the Property (except as set forth in the
immediately preceding sentence), or if Borrower is in Default under the Loan
Documents (or an event exists which, with the passing of time or giving of
notice, would constitute a Default), then the Condemnation Proceeds shall, at
Lender's sole option, be assigned and paid to Lender and applied to the payment
of sums secured by the Instrument, whether or not due, in accordance with
paragraph 4 hereof without a prepayment premium. In the event such condemnation
or other taking is not a Major Taking and requires the repair and restoration of
the remaining portion of the Property for use of the Property as contemplated by
this Agreement, then, provided Borrower is not in Default hereunder and Lender
is not otherwise authorized to apply Condemnation Proceeds to the payment of
sums secured hereby as aforesaid, the Condemnation Proceeds shall be paid to
Borrower and Borrower shall immediately undertake the renovation and repair of
the remaining portions of the Property. In the event such condemnation or other
taking is a Major Taking, involves less than fifty percent (50%) of the Property
and requires the repair and restoration of the remaining portion of the Property
for use of the Property as contemplated by this Agreement, then the Condemnation
Proceeds shall be assigned and paid to Lender, and Borrower shall repair and
restore the remaining portion of the Property and Lender shall distribute the
Condemnation Proceeds in the same manner as Lender distributes insurance
proceeds under paragraph 6 hereof. If Borrower is in Default hereunder at the
time of such condemnation or other taking, Lender, at its sole option, shall
apply the Condemnation Proceeds as set forth in paragraph 4 hereof. After
application of the Condemnation Proceeds as set forth herein, any excess
proceeds shall, at Lender's sole option, be applied to the principal balance of
the Note without penalty or premium, or paid directly to Borrower. "Major
Taking" shall mean any condemnation or other taking by eminent domain, or
conveyance in lieu thereof, of a portion of the Property for which a claim for
payment of an award for such taking and for damages in connection therewith is
fifty percent (50%) or more of the value of the Property.
The foregoing provisions providing for the application of Condemnation
Proceeds to the sums secured by the Instrument are agreed to be necessary to
prevent an impairment of Lender's security resulting from such taking. In the
event, however, that any provision hereof providing for the application of any
Condemnation Proceeds to the indebtedness secured by the Instrument is held to
be unenforceable, in whole or in part, then all Condemnation Proceeds not
payable to Lender for immediate application to the sums secured by the
Instrument as the result of such invalidity, shall be applied by Borrower to the
restoration of the Property for use of the Property as contemplated by this
Agreement with the balance thereof, if any, being deposited with Lender as
additional amounts due under paragraph 3 hereof, which balance shall be held and
applied as provided for therein.
Unless Borrower and Lender otherwise agree in writing, any application of
proceeds to principal shall not extend or postpone the due date of the monthly
installments referred to in paragraphs 1 and 3 hereof or change the amount of
such installments. Such application of proceeds to principal shall be without
penalty or premium. Borrower agrees to execute such further evidence of
assignment of any awards, proceeds, damages or claims arising in connection with
such condemnation or taking as Lender may require.
11. FORBEARANCE BY LENDER NOT A WAIVER. Any forbearance by Lender in exercising
any right or remedy hereunder or under the Instrument, or any of the other Loan
Documents or Instruments, or otherwise afforded by applicable law, shall not be
a waiver of or preclude the exercise of any right or remedy available to Lender.
The acceptance by Lender of payment of any sum secured by the Instrument after
the due date of such payment shall not
be a waiver of Lender's right to either require prompt payment when due of all
other sums so secured or to declare a default for failure to make prompt
payment. The procurement of insurance or the payment of taxes or other liens or
charges by Lender shall not be a waiver of Lender's right to accelerate the
maturity of the indebtedness secured by the Instrument or by any of the other
Instruments after notice of such breach and failure of Borrower to cure as
hereinafter provided, nor shall Lender's receipt of any awards, proceeds or
damages under paragraphs 6 and 10 hereof operate to cure or waive Borrower's
default in payment of sums secured by the Instrument or by any of the other
Instruments.
12. ESTOPPEL CERTIFICATE. Borrower shall within ten (10) days of a written
request from Lender furnish Lender with a written statement, duly acknowledged,
(a) setting forth (i) the then outstanding principal balance of the Note and all
other sums, if any, then due and payable by Borrower to Lender under the
provisions of the Note or this Agreement or Loan Documents relating to the
Property and any right of set-off, counterclaim or other defense which exists
against such sums and the obligations under the Loan Documents; (ii) that no
Default or event which, with the passage of time or the giving of notice, would
constitute a Default exists; and (iii) other matters reasonably requested by
Lender; and (b) attaching true, correct and complete copies of the Note, and the
Instrument and any other Loan Documents and all modifications, amendments and
substitutions thereof.
13. LEASES OF THE PROPERTY. As used in this paragraph 13, the word "lease" shall
mean "sublease" if the Instrument encumbers a leasehold interest. Borrower shall
comply with and observe Borrower's obligations as landlord under all leases of
the Property or any part thereof. Borrower will not lease any portion of the
Property except with the prior written approval of Lender. Borrower, at Lender's
request, shall furnish Lender with executed copies of all leases now existing or
hereafter made of all or any part of the Property, and all leases now or
hereafter entered into will be in form and substance subject to the approval of
Lender. All leases of the Property shall specifically provide that such leases
are subordinate to the Instrument; that the tenant will, upon request, attorn to
Lender or any purchaser of the Property at foreclosure or following issuance of
a deed-in-lieu of foreclosure; that the tenant agrees to execute such further
evidences of attornment as Lender may from time to time request, and that Lender
may, at Lender's option, accept or reject such attornments; that the leases
shall not be modified without Lender's prior written approval; that the tenant
shall pay rent to Lender after notification of a Default hereunder; and that
Lender, or its successors in the event of a foreclosure or deed-in-lieu of
foreclosure of the interest secured by the Instrument, shall not be liable for
(i) any default existing prior to the date upon which Lender or any such
successor obtains title to the Property, (ii) rents paid more than one month in
advance, or (iii) any offsets or defenses against any prior landlord. Borrower
shall not, without Lender's written consent, execute, modify, surrender or
terminate, either orally or in writing, any lease now existing or hereafter made
of all or any part of the Property, permit an assignment or sublease of such a
lease without Lender's written consent, or request or consent to the
subordination of any lease of all or any part of the Property to any lien
subordinate to the Instrument. If Borrower becomes aware that any tenant
proposes to do, or is doing, any act or thing which may give rise to any right
of set-off against rent, Borrower shall (i) take such steps as shall be
reasonably calculated to prevent the accrual of any right to a set-off against
rent, (ii) notify Lender thereof and of the amount of said set-offs, and (iii)
within ten (10) days after such accrual, reimburse the tenant who shall have
acquired such right to set-off or take such other steps as shall effectively
discharge such set-off and as shall assure that rents thereafter due shall
continue to be payable without set-off or deduction.
Notwithstanding the general assignment of all leases hereunder, upon
written request of Lender, Borrower shall assign to Lender, by written
instrument satisfactory to Lender, all leases now existing or hereafter made of
all or any part of the Property and all security deposits made by tenants in
connection with such leases of the Property. Upon assignment by Borrower to
Lender of any leases of the Property, Lender shall have all of the rights and
powers possessed by Borrower prior to such assignment and Lender shall have the
right to modify, extend or terminate such existing leases and to execute new
leases, in Lender's sole discretion.
14. REMEDIES CUMULATIVE. Each remedy provided in the Loan Documents is distinct
and cumulative to all other rights or remedies under the Loan Documents or
afforded by law or equity, and may be exercised concurrently, independently, or
successively, in any order whatsoever.
15. ACCELERATION IN CASE OF BORROWER'S INSOLVENCY. If Borrower or any Guarantor
shall voluntarily file a petition under the Federal Bankruptcy Code (the
"Code"), as such Code may from time to time be amended, or under
any similar or successor Federal statute relating to bankruptcy, receivership,
insolvency, arrangements or reorganizations, or under any state bankruptcy or
insolvency act, or file an answer in an involuntary proceeding admitting
insolvency or inability to pay debts, or if Borrower or any Guarantor shall fail
to obtain a vacation or stay of involuntary proceedings brought for the
reorganization, dissolution or liquidation of Borrower or such Guarantor
respectively, within ninety (90) days of the filing of such involuntary
proceeding, or if Borrower or any Guarantor shall be adjudged a bankrupt, or if
a trustee or receiver shall be appointed for Borrower or any Guarantor or for
any of Borrower's property or any Guarantor's property, or if the Property shall
become subject to the jurisdiction of a Federal bankruptcy court or similar
state court, or if Borrower or any Guarantor shall make an assignment for the
benefit of Borrower's or such Guarantor's creditors, or if there is an
attachment, execution or other judicial seizure of any portion of Borrower's or
such Guarantor's assets and such seizure is not discharged within thirty (30)
days, then Borrower shall be in Default under the Instrument and Lender may, at
Lender's option, declare all of the sums secured by the Instrument to be
immediately due and payable without prior notice to Borrower, and Lender may
invoke any remedies permitted by paragraph 21 of this Agreement. Any reasonable
attorneys' fees and other expenses incurred by Lender in connection with
Borrower's or any Guarantor's bankruptcy or any of the other aforesaid events
shall be additional indebtedness of Borrower secured by the Instrument pursuant
to paragraph 8 hereof and paragraph 8 of the Instrument.
16. TRANSFERS OF THE PROPERTY OR BENEFICIAL INTERESTS IN BORROWER; ASSUMPTION.
Except as otherwise provided in this paragraph 16, on sale or transfer of (i)
all or any part of the Property, or any interest therein, or (ii) beneficial
interests in Borrower (if Borrower is not a natural person or persons but is a
corporation, partnership, trust or other legal entity), Borrower shall be in
Default under the Instrument and this Agreement and Lender may, at Lender's
option, declare all of the sums secured by the Instrument and due under the
provisions of this Agreement to be immediately due and payable, and Lender may
invoke any remedies permitted by paragraph 21 of this Agreement and applicable
law. This option shall not apply in case of:
(a) transfers by devise or descent or by operation of law upon the
death of a joint tenant or a partner;
(b) sales or transfers of direct beneficial interests in Borrower
provided that such sales or transfers, together with any prior
sales or transfers of beneficial interests in Borrower, but
excluding sales or transfers under subparagraph (a) above, do not
result in more than forty-nine percent (49%) of the beneficial
interests in Borrower having been sold or transferred since the
date hereof; and
(c) sales or transfers of fixtures or any personal property pursuant
to the first paragraph of paragraph 6 of the Instrument hereof.
Notwithstanding anything in this paragraph 16, Borrower shall be entitled to
transfer the Property to any of the following: (i) the Franchisor, (ii) any
Affiliate of Borrower, or (iii) any other franchisee acceptable to Franchisor
whose financial condition, creditworthiness and ability to operate the Property
are satisfactory to Lender in its sole discretion, provided however, that in
each of such cases itemized as (i), (ii) or (iii) above: (1) Borrower obtains
Lender's prior written consent to such transfer; (2) the proposed transferee
assumes in writing all obligations of the Borrower under the Note, the
Instrument and the Loan Documents; (3) Lender receives a transfer fee in the
amount of one percent (1%) of the then outstanding principal balance of the Note
and all accrued but unpaid interest due thereunder; (4) Lender shall receive for
its review and approval copies of all transfer documents; and (5) Borrower or
the transferee shall pay all costs and expenses in connection with such transfer
and assumption, including without limitation all reasonable fees and expenses
incurred by Lender.
17. NOTICE. Except for any notice required under applicable law to be given in
another manner, any notice to Borrower provided for in this Agreement or in the
Note shall be given by certified mail, return receipt requested, postage
prepaid, or by national receipted overnight delivery service, to Borrower's
address as set forth above or as otherwise specified in writing by Borrower, and
shall be effective only upon delivery or attempted delivery. Notices to the
Lender shall be by certified mail, return receipt requested, postage prepaid, or
by national receipted overnight delivery service, to the address of the Lender
as set forth above or as otherwise specified in writing by the Lender, with a
copy to Xxxxxxx X. Xxxxx, Esquire, Lowndes, Drosdick, Doster, Xxxxxx & Xxxx,
P.A., 000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000, and shall be effective only
upon delivery or attempted delivery.
18. SUCCESSORS AND ASSIGNS BOUND; AGENTS; CAPTIONS. The covenants and agreements
herein contained shall bind, and the rights hereunder shall inure to, the
respective successors and assigns of Lender and Borrower, subject to the
provisions of paragraph 16 hereof. In exercising any rights hereunder or taking
any actions provided for herein, Lender may act through its employees, agents or
independent contractors as authorized by Lender. The captions and headings of
the paragraphs of the Loan Documents are for convenience only and are not to be
used to interpret or define the provisions hereof.
19. GOVERNING LAW; SEVERABILITY. This Agreement shall be governed by the law of
the jurisdiction in which the real estate that constitutes a portion of the
Property is located. Borrower and Lender agree that any dispute arising out of
this Agreement shall be subject to the jurisdiction of both the state and
federal courts in Florida. For that purpose, Borrower hereby submits to the
jurisdiction of the state and federal courts of Florida. Borrower further agrees
to accept service of process out of any of the aforesaid courts in any such
dispute by registered or certified mail, postage prepaid, addressed to the
undersigned. Nothing herein contained, however, shall prevent Lender from
bringing any action or exercising any rights against (i) Borrower, (ii) any
security, (iii) a Guarantor personally, or (iv) the assets of Borrower or any
Guarantor, within any other state or jurisdiction. In the event that any
provision of any of this Agreement or the Note conflicts with applicable law,
such conflict shall not affect other provisions of this Agreement or the Note
which can be given effect without the conflicting provisions, and to this end
the provisions of any of this Agreement, the Note and the other Instruments and
Loan Documents are declared to be severable. In the event that any applicable
law limiting the amount of interest or other charges permitted to be collected
from Borrower is interpreted so that any charge provided for this Agreement, in
the Note, the other Instruments or Loan Documents, whether considered separately
or together with other charges levied in connection with this Agreement and the
Note, violates such law, and Borrower is entitled to the benefit of such law,
such charge is hereby reduced to the extent necessary to eliminate such
violation. The amounts, if any, previously paid to Lender in excess of the
amounts payable to Lender pursuant to such charges as reduced shall be applied
by Lender to reduce the principal of the indebtedness evidenced by the Note in
inverse order of maturity in which case such prepayment shall not be subject to
any Prepayment Premium. For the purpose of determining whether any applicable
law limiting the amount of interest or other charges permitted to be collected
from Borrower has been violated, all indebtedness which is secured by the
Instrument and any of the other Instruments, or evidenced by the Note and which
constitutes interest, as well as all other charges levied in connection with
such indebtedness which constitute interest, shall be deemed to be allocated and
spread over the stated term of the Note. Unless otherwise required by applicable
law, such allocation and spreading shall be effected in such a manner that the
rate of interest computed thereby is uniform throughout the stated term of the
Note.
20. ASSIGNMENT OF LEASES AND RENTS; APPOINTMENT OF RECEIVER; LENDER IN
POSSESSION. As part of the consideration for the indebtedness evidenced by the
Note, Borrower, under the provisions of paragraph 23 of the Instrument
absolutely and unconditionally assign and transfer to Lender the leases and all
the rents and revenues of the Property.
Borrower hereby covenants that Borrower has not executed any prior
assignment of said leases or rents, that Borrower has not performed, and will
not perform, any acts or has not executed, and will not execute, any instrument
which would prevent Lender from exercising its rights under this paragraph 20,
and that at the time of execution of this Agreement there has been no
anticipation or prepayment of any of the rents of the Property for more than one
(1) month prior to the due dates of such rents. Borrower covenants that Borrower
will not hereafter collect or accept payment of any rents of the Property more
than one (1) month prior to the due dates of such rents. Borrower further
covenants that Borrower will execute and deliver to Lender such further
assignments of rents and revenues of the Property as Lender may from time to
time request.
Upon Borrower's Default hereunder, under the Instrument or under the Loan
Documents, Lender shall be entitled to the appointment of a receiver for the
Property and Lender may in person, by agent or by a court-appointed receiver,
regardless of the adequacy of Lender's security, enter upon and take and
maintain full control of the Property in order to perform all acts necessary and
appropriate for the operation and maintenance thereof including, but not limited
to, the execution, cancellation or modification of leases, the collection of all
rents and revenues of the Property, the making of repairs to the Property and
the execution or termination of contracts providing for the management or
maintenance of the Property, all on such terms as are deemed best to protect the
security of the Instrument. In the event Lender elects to seek the appointment
of a receiver for the Property upon Borrower's Default, Borrower hereby
expressly consents to the appointment of such receiver. Lender or the receiver
shall be entitled to receive a reasonable fee for so managing the Property.
All rents and revenues collected as a lessor subsequent to the Default by
Borrower under the Loan Documents shall be applied first to the costs, if any,
of taking control of and managing the Property and collecting the rents,
including, but not limited to, attorneys' fees, receiver's fees, premiums on
receiver's bonds, costs of repairs to the Property, premiums on insurance
policies, taxes, assessments and other charges on the Property, and the costs of
discharging any obligation or liability of Borrower as lessor or landlord of the
Property and then to the sums secured by the Instrument. Lender or the receiver
shall have access to the books and records used in the operation and maintenance
of the Property and shall be liable to account only for those rents actually
received. Lender shall not be liable to Borrower, anyone claiming under or
through Borrower or anyone having an interest in the Property by reason of
anything done or left undone by Lender under this paragraph 20.
If the rents of the Property are not sufficient to meet the costs, if any,
of taking control of and managing the Property and collecting the rents, any
funds expended by Lender for such purposes shall become indebtedness of Borrower
to Lender secured by the Instrument pursuant to paragraph 8 hereof and paragraph
8 of the Instrument. Unless Lender and Borrower agree in writing to other terms
of payment, such amounts shall be payable upon notice from Lender to Borrower
requesting payment thereof and shall bear interest from the date of disbursement
at the rate stated in the Note which applies in the event of Default unless
payment of interest at such rate would be contrary to applicable law, in which
event such amounts shall bear interest at the highest rate which may be
collected from Borrower under applicable law.
Any entering upon and taking and maintaining of control of the Property by
Lender or the receiver and any application of rents as provided herein shall not
cure or waive any Default hereunder or invalidate any other right or remedy of
Lender under applicable law or provided herein. This assignment of rents of the
Property shall terminate at such time as the indebtedness and obligations
secured by this Instrument have been paid and performed in a complete and
irrevocable manner.
21. ACCELERATION: REMEDIES. Any one or more of the following shall constitute a
"Default" under the Instrument and this Agreement:
(a) failure of Borrower to make any payment due under the Note or
under paragraph 1 of this Agreement within ten (10) calendar days
after Lender's written demand for such amount;
(b) failure of Borrower (except as set forth under clause (a) above)
to pay any amount, costs, expenses or fees (including attorneys'
fees) of Lender, as required by any provision of the Note, this
Agreement, the Instrument or any Loan Document within ten (10)
days after Lender's written demand for such amount;
(c) failure of Borrower (except as set forth under clauses (a), (b),
(d), (e), (f), (g), (h), (i), (j) and (k) of this paragraph 21) to
comply with or perform, or any breach or violation by Borrower of,
any warranty, representation, covenant, agreement, prohibition,
restriction or condition contained herein (except for those
contained in paragraphs 15 and 16 hereof and paragraph 17 of the
Instrument), in the Note, the Instrument or any Loan Document, or
in the Franchise Agreement, which failure or breach or violation
continues uncured to Lender's reasonable satisfaction for thirty
(30) calendar days after the delivery by Lender of written notice
to Borrower describing such failure or breach or violation;
provided, however, that if such failure or breach or violation
shall be not be curable within said thirty (30) calendar day
period and Borrower is diligently attempting to cure such failure
or breach or violation within such thirty (30) calendar day
period, then such failure or breach or violation shall not
constitute a Default unless it shall continue uncured to Lender's
reasonable satisfaction for ninety (90) calendar days after the
delivery by Lender of such notice to Borrower or by Borrower of
such notice to Lender,
or if Borrower is diligently attempting to effect such cure, such
longer period of time as may be necessary in Lender's reasonable
judgment to effect such cure;
(d) except as provided in and permitted under the Note, the Instrument
or any other Loan Document, any sale, assignment, transfer,
conveyance, mortgaging, encumbering or other change in, or
collateral assignment of, the legal title to or beneficial
interest in the Property, or any part thereof, or any interest
therein, including, without limitation, the granting of any
subordinate lien, whether voluntarily or involuntarily by
operation of law and whether or not of record or for
consideration, which is not cured to Lender's reasonable
satisfaction within thirty (30) calendar days of such sale,
assignment, transfer or encumbrance;
(e) the occurrence of any event deemed to be a Default under either
paragraph 15 or 16 hereof;
(f) any default shall occur under any Related Note, the Instrument or
any Loan Document which remains uncured after the expiration of
any applicable notice and/or cure period;
(g) the occurrence of any event deemed to be a default under any
commitment and/or loan made by Lender or affiliate of Lender to
Borrower with the amount in controversy in excess of $25,000.00
which remains uncured after the expiration of any applicable
notice and/or cure period and/or the payment of the indebtedness
outstanding pursuant thereto has been accelerated shall, at the
option of Lender, be and constitute a default under all
commitments and/or loans made to Borrower by Lender (including
without limitation, the Note, this Agreement, the Instrument or
any other Instruments and the Loan Documents);
(h) a material misrepresentation or material error or withholding of
material information by Borrower, in each case, incident to the
Loan or the Loan Documents;
(i) the ownership by Borrower or any Guarantor, or any of their
Affiliates, of an interest in, or the operation by the Borrower or
any Guarantor or any of their Affiliates of any ARBY'S restaurant
within a one (1) mile radius of the Property (excluding the ARBY'S
restaurant located or to be located on the Property);
(j) the termination of the Franchise Agreement; and
(k) the occurrence of any event deemed to be a default under the
Lease, which remains uncured after any applicable notice or cure
period provided for therein.
Upon Borrower's Default, in addition to Lender's right to appoint a
receiver or enter upon and take and maintain control of the Property as set
forth in paragraph 23 of the Instrument and paragraph 20 of this Agreement,
Lender at Lender's option may declare all of the sums secured by the Instrument
to be immediately due and payable without further demand and may foreclose the
interest secured by the Instrument by judicial proceeding and may invoke any
other remedies permitted by applicable law or provided herein. Borrower
acknowledges that the power of sale granted may be exercised by Lender without
prior judicial hearing. Borrower has the right to bring an action to assert the
non-existence of a Default or any other defense of Borrower to acceleration and
sale. Lender shall be entitled to collect all reasonable costs and expenses
incurred in pursuing such remedies, including, but not limited to, reasonable
attorneys' fees and costs of documentary evidence, abstracts and title reports.
Nothing contained herein shall be deemed to require Lender to provide Borrower
with notice in the event a bankruptcy proceeding (whether voluntary or
involuntary) has been instituted by or against Borrower or any Guarantor of
Borrower's indebtedness under any of the other Instruments or Loan Documents.
If the Property is sold pursuant to this paragraph 21, Borrower or any
person holding possession of the Property through Borrower shall immediately
surrender possession of the Property to the purchaser at such sale upon the
purchaser's written demand. If possession is not surrendered upon the
purchaser's written demand, Borrower or such
person shall be a tenant at sufferance and may be removed by writ of possession
or by an action for forcible entry and detainer.
If Lender invokes the power of sale, Lender shall mail a copy of a notice
of sale to Borrower in the manner provided in paragraph 17 hereof. Lender shall
publish the notice of sale once a week for three (3) consecutive weeks in a
newspaper published in Polk County, Florida as to Site No. 133 and in Highlands
County, Florida as to Site No. 1695, and in Hillsborough County, Florida as to
Site No. 1134 and thereupon shall sell the Property to the highest bidder at
public auction at the front door of the County Courthouse of said County. Lender
may sell the Property in one or more parcels and in such order as Lender may
determine. Lender may postpone the sale of all or any parcel of the Property by
public announcement at the time and place of any previously scheduled sale.
Lender or Lender's designee may purchase the Property at any sale.
Lender shall deliver to the purchaser Lender's deed conveying the Property
so sold without any covenant or warranty, expressed or implied. The recitals in
Lender's deed shall be prima facie evidence of the truth of the statements made
therein. Borrower covenants and agrees that the proceeds of any sale shall be
applied in the following order (a) to all costs and expenses of the sale,
including, but not limited to, attorneys' fees and costs of title evidence; (b)
to all sums secured by this Instrument in such order as Lender, in Lender's sole
discretion, directs; and (c) the excess, if any, to the person or persons
legally entitled thereto.
In the event of a Default under this Agreement, any other Instruments or
the Loan Document or upon a default by the manager of the Property under its
management agreement, Lender or any receiver for the Property shall be entitled
to terminate the management agreement between Borrower and any manager of the
Property.
Notwithstanding any provision to the contrary herein, in the event that (i)
Borrower's interest in the Property is a leasehold interest, (ii) the real
estate portion of the Property is not separately assessed for real estate
taxation or assessment purposes, (iii) Borrower is current in its payments, if
any, to lessor/owner in connection therewith, and (iv) the lessor/owner of such
Property is responsible for the payment of taxes and assessments therefor, then
such non-payment of taxes and assessments by the lessor/owner shall not be a
Default under this Agreement and Borrower shall not be required to make payments
as set forth in paragraph 3 hereof as a result of said non-payment.
22. SUBROGATION. Any of the proceeds of the Note utilized to satisfy outstanding
liens against all or any part of the Property have been advanced by Lender at
Borrower's request and upon Borrower's representation that such amounts are due
and are secured by valid liens against the Property. Lender shall be subrogated
to any and all rights, superior titles, liens and equities owned or claimed by
any owner or holder of any outstanding liens and debts, however remote,
regardless of whether said liens or debts are acquired by Lender, by assignment
or are released by the holder thereof upon payment.
23. PARTIAL INVALIDITY. In the event any portion of the sums intended to be
secured by the Instrument cannot be lawfully secured thereby, payments in
reduction of such sums shall be applied first to those portions not secured
thereby.
24. REPRESENTATIONS OF BORROWER. The Borrower hereby represents and warrants to
Lender the following:
(a) Borrower (i) is a Borrower Entity duly organized, validly existing
and in good standing under the laws of the Borrower State and in
all jurisdictions in which qualification or licensing is required;
and (ii) has the power and authority to own, lease and operate the
Property and conduct its business as it is now conducted. There
are no proceedings or actions pending, threatened or contemplated
for the liquidation, reorganization, termination or dissolution of
Borrower.
(b) There have been no material adverse changes, financial or
otherwise, in the condition of Borrower from that disclosed to
Lender in the loan application submitted to Lender by Borrower, or
in any supporting data submitted in connection with the Loan, and
all of the information contained therein was true and
correct in all material respects when submitted and is now
substantially materially true and correct on the date hereof.
(c) No proceedings in bankruptcy or insolvency have ever been
instituted by or against Borrower and no such proceeding is now
pending or contemplated.
(d) Borrower, and the general partner of Borrower if applicable, is
solvent pursuant to the laws of the United States and the state in
which the Property is located, as reflected by the entries in
Borrower's books and records and as reflected by the actual facts.
(e) The Note, the Instrument, the other Instruments, the Loan
Documents, and all other notes and loan documents evidencing all
other obligations of Borrower to Lender, if any, and the Franchise
Agreement have been duly authorized, executed and delivered by
Borrower and constitute valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective
terms, except as the enforcement of them may be limited by
bankruptcy, insolvency, moratorium and other applicable debtor
relief laws, which should not make them inadequate for the
practical realization of the benefits to be afforded Lender by
them. No approval, consent, order or authorization of any
governmental authority and no designation, registration,
declaration or filing with any governmental authority is required
in connection with the execution and delivery of the Note, the
Instrument or any of the other Instruments or Loan Documents or
the Franchise Agreement.
(f) The execution, delivery, and performance of the Loan Documents
will not violate or contravene in any way the organizational
documents of Borrower (if Borrower is a partnership, corporation
or other entity) or any indenture, agreement or Instrument to
which Borrower is a party or by which it or its property may be
bound, or be in conflict with, result in a breach of or constitute
a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the property or
assets of Borrower, except as contemplated by the provisions of
such instrument, and no action or approval with respect thereto by
any third person is required.
(g) The proceeds of the Loan will be used by Borrower for its business
and commercial purposes, not to include the purchase of margin
stock, and not for personal, family, household or agricultural
use. No part of the Property is all or part of Borrower's
homestead.
(h) There is no litigation, legal or administrative proceeding,
investigation or other action of any nature commenced, pending,
or, to the knowledge of Borrower, threatened against or affecting
the Borrower, the Property or any interest or right therein or any
Guarantor which has not been disclosed in detail in writing to
Lender and which may involve the possibility of any judgment or
liability not fully covered by insurance, or materially adversely
affecting any of the assets of the Borrower or Borrower's right to
carry on business as now conducted, or affecting the continued
employment of any officer or director of Borrower.
(i) The representations and warranties contained in paragraph 25 of
the Mortgage are hereby confirmed.
25. BORROWER'S ADDITIONAL COVENANTS. Borrower hereby covenants, agrees and
undertakes to:
(a) from time to time, at the reasonable request of Lender, (i)
promptly correct any defect, error or omission which may be
discovered in the contents of this Agreement, the Instrument or
any of the other Loan Documents or any of the other Instruments or
in the execution or acknowledgment thereof; (ii) execute,
acknowledge, deliver and record and/or file such further documents
or instruments (including, without limitation, further mortgages,
security agreements, financing statements, continuation
statements, assignments of rents or leases and environmental
indemnity agreements) and perform such further acts and provide
such further assurances as may be necessary, desirable or proper,
in Lender's
reasonable opinion, to carry out more effectively the purposes of
this Agreement and such other instruments and to subject to the
liens and security interests hereof and thereof any property
intended by the terms hereof or thereof to be covered hereby or
thereby, including specifically, but without limitation, any
renewals, additions, substitutions, replacements, or appurtenances
to the Property; and (iii) execute, acknowledge, deliver, procure,
and file and/or record any document or instrument (including
specifically, but without limitation, any financing statement)
reasonably deemed necessary by Lender to protect the liens and the
security interests herein granted against the rights or interests
of third persons; provided that such documents or instruments do
not increase Borrower's liability or obligations under the Loan
Documents. Borrower will pay all reasonable costs connected with
any of the foregoing in this subparagraph (a);
(b) continuously maintain Borrower's existence, if applicable, as a
Borrower Entity, and the right to do business, as applicable, in
the State of Florida;
(c) at any time any law shall be enacted imposing or authorizing the
imposition of any tax upon the Instrument or any of the other Loan
Documents, or upon any rights, title, liens or security interests
created hereby, or upon the obligations secured hereby or any part
thereof, pay all such taxes within the applicable payment period;
provided that, if such law as enacted makes it unlawful for
Borrower to pay such tax, Borrower shall not pay nor be obligated
to pay such tax, and in the alternative, Borrower may, in the
event of the enactment of such a law, and must, if it is unlawful
for Borrower to pay such taxes, prepay the obligations secured
hereby in full within one hundred twenty (120) days after demand
therefor by Lender, without penalty or premium;
(d) promptly pay all reasonable and bona fide out-of-pocket costs,
fees and expenses and other expenditures, including, but not
limited to, reasonable attorneys' fees and expenses, paid or
incurred by Lender to third parties incident to this Agreement,
the Instrument or any of the other Loan Documents (including, but
not limited to, reasonable attorneys' fees and expenses in
connection with the negotiation, preparation and execution hereof
and of any other Loan Document and any amendment hereto or
thereto, any release hereof, any consent, approval or waiver
hereunder or under any other Loan Document, the making of any
advance under the Note, and any suit to which Lender is a party
involving this Agreement or the Property including any such fees
incurred on appeal of such suit) or incident to the enforcement of
the obligations secured hereby or the exercise of any right or
remedy of the Lender under any Loan Document;
(e) not materially amend the constituent entity organizational
documents of Borrower without the prior written consent of Lender,
which consent shall not be unreasonably delayed or withheld;
(f) at its sole cost and expense, furnish Lender with such title
endorsements or updates to Lender's title insurance policy as
Lender may reasonably require, from time to time, to insure Lender
that no other matters of record affect the condition of title or
the priority of Lender's lien;
(g) not amend, modify or terminate the management agreement, if any,
relating to the management of the Property or the Restaurant
without the Lender's prior written consent, and Borrower shall
strictly enforce all the material terms of any such management
agreement. (The existence and identity of any manager of the
Property and/or the Restaurant which is not an Affiliate of
Borrower, as well as the terms and conditions of any management
agreement relating thereto, shall be subject to Lender's prior
written approval);
(h) not own an interest in, or operate, any other ARBY'S restaurant
within a one (1) mile radius of the Property (excluding the ARBY'S
restaurant operated on the Property);
(i) without limiting any other obligation of the Borrower hereunder,
shall and does hereby indemnify, hold harmless and insure the
Lender of and from any and all claim, liability, loss or damage
whatsoever, including without limitation, and without duplication,
in-house and outside counsel attorneys' and paralegals' fees and
costs, arising from or in any way relating to the Property this
Agreement, the Instrument or any of the other the Loan Documents,
save only and except for any claim or loss caused directly as a
result of gross negligence or intentional breach or misconduct by
Lender or to any claim that Borrower indemnifies Lender for the
amount of any final judgment obtained by Borrower against Lender
in a court of competent jurisdiction;
(j) promptly, and in any event within three (3) business days after an
officer of the Borrower obtains actual knowledge of any failure or
breach or violation or a Default under this Agreement, to provide
Lender with written notice thereof. "Actual knowledge" as used in
this clause (j) of paragraph 25 means the actual knowledge of an
executive officer of Borrower;
(k) not provide a guaranty of the obligations of any of its affiliates
or a third party which if exercised would result in a Default (or
which but for the passage of time would be a Default hereunder)
with respect to the requirements set for cash flow in paragraph 26
hereof; and
(l) keep the covenants set forth in paragraph 26 of the Instrument.
26. MAINTENANCE OF CASH FLOW. During the term of this Instrument, the Borrower
shall maintain a Consolidated Fixed Charge Coverage Ratio for the Borrower and
Guarantors, if any, of not less than 1.2:1. All calculations of the Consolidated
Fixed Charge Coverage Ratio shall be based upon the financial information
furnished by the Borrower hereunder for the twelve (12) month period ending on
the last day of each fiscal year of Borrower or after and during the continuance
of a Default more frequently as the Lender may from time to time reasonably
request. The initial Consolidated Fixed Charge Coverage Ratio shall be
calculated for the twelve (12) month period ending on the last day of the
Borrower's fiscal year. Notwithstanding the foregoing, if the Loan proceeds are
used to construct or acquire new units, the first measurement of the FCCR shall
be made at the fiscal quarter end following one (1) year after the Loan closing
date. If the Loan proceeds are used to refinance existing units of the Borrower,
the first measurement of the FCCR shall be for the twelve (12) month period
ending the last day of Borrower's fiscal year. Failure by Borrower to comply
with the covenants set forth herein shall be deemed a Default under this
Agreement.
For the purposes of calculating the Borrower's Cash Flow, Rental
Payments, Non-Recurring Expenses and Non-Recurring Income, the term "Borrower"
shall mean the Borrower and all Guarantors, if any, and the term "financial
statement" shall mean a consolidated financial statement of the Borrower and
such Guarantors.
27. ASSIGNMENT BY LENDER. This Agreement (and unless a contrary intention is
expressly provided, each other Loan Document) is freely assignable, in whole or
in part, by the Lender and, to the extent of any such assignment, the Lender
shall be fully discharged from all liability under this Agreement (and each
other Loan Document) accruing from and after the date of such assignment. The
Lender's assignee shall, to the extent of the assignment, be vested with all the
powers and rights of the Lender hereunder and under the other Loan Documents,
and to the extent of which assignment the assignee may fully enforce such rights
and powers as the holder hereof and all references to the Lender shall mean and
refer to such assignee. The Lender shall retain all rights and powers hereby
given which are not so assigned, transferred and/or delivered. Without limiting
the foregoing, the Borrower understands and agrees that the Lender intends to
and may, from time to time, sell, pledge, grant a security interest in and
collaterally assign, transfer and deliver or otherwise encumber or dispose of
the Note, and the Loan Documents and its rights and powers hereunder and
thereunder, in whole or in part, in connection with the Securitization or any
other assignment or other disposition of the Note. The Borrower may not, in
whole or in part, directly or indirectly, assign this Agreement, the Instrument
or any Loan Document or its rights hereunder or thereunder or delegate its
duties hereunder.
28. SECURITIZATION OPINIONS; FINANCIAL INFORMATION. In the event the Loan is
included as an asset of a Securitization by Lender or any of its Affiliates,
Borrower shall, within ten (10) days after Lender's written request therefor,
deliver or cause to be delivered opinions and certifications in form and
substance and delivered by counsel reasonably acceptable to Lender and the
Rating Agency, as may be reasonably required by Lender and/or the Rating Agency
in connection with such Securitization. Borrower shall not be required to bear
the cost of the delivery of such opinions, if any.
Borrower shall, in the event the Loan is included as an asset of a
Securitization, (a) gather any environmental information reasonably required by
the Rating Agency in connection with such a Securitization, at Lender's request,
(b) meet with representatives of the Rating Agency to discuss the business and
operations of the Property, and (c) cooperate with the reasonable requests of
the Rating Agency and Lender in connection with all of the foregoing and the
preparation of any offering documents with respect thereof.
Borrower shall, upon Lender's written request therefor in connection with
a Securitization in which the Loan is to be included as an asset, promptly
deliver such financial statements and related documentation prepared by an
independent certified public accountant as may be reasonably necessary and shall
fully cooperate with the Lender in connection with any assurances or other
documents, which are deemed to be reasonably necessary or convenient by Lender,
requested from Borrower and consistent with the Borrower's obligations
hereunder, in connection therewith. Borrower shall not be required to bear the
costs of preparation of financial statements and related documentation prepared
by an independent certified public accountant in connection with a
Securitization (unless Borrower is otherwise having such financial statements
and related documents prepared).
29. DEFINITIONS. Borrower and Lender agree that, unless the context otherwise
specifies or requires, the following terms shall have the meanings herein
specified, such definitions to be applicable equally to the singular and the
plural forms of such terms.
"Affiliate" means, with respect to any designated Person, any Person
that, directly or indirectly, controls or is controlled by or is under common
control with such designated Person and, without limiting the generality of the
foregoing, shall include, (i) any Person who is a director or officer of,
partner in, trustee of, or blood or legal relative, guardian or representative
of the designated Person, or any Person who acts or serves in a similar capacity
with respect to the designated Person, (ii) any Person of which or whom the
designated Person is a director or officer, partner, trustee, or blood or legal
relative, guardian or representative, or with respect to which or whom, the
designated Person acts or serves in a similar capacity; and (iii) any Person,
who, directly or indirectly, is the legal or beneficial owner of or controls 10%
or more of any class of equity securities of the designated Person. For the
purposes of this definition, "CONTROL" (including, with correlative meanings,
the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Actual knowledge" means the actual knowledge of an executive officer of
the Borrower.
"Affiliate Guarantor" means any Affiliate of the Borrower that is
providing the Lender with a guarantee of the Note.
"Approved Carriers" has the meaning ascribed to such term in paragraph 6 of
this Agreement.
"Borrower" has the meaning ascribed to such term in the first paragraph
of the preamble of this Agreement.
"Borrower Entity" means, if applicable, the entity form of Borrower which
is a corporation.
"Borrower State" means, if applicable, the state or other jurisdiction
under which the Borrower is formed, which is the State of Michigan.
"Cash Flow" means, for any period, with respect to any Person, an amount
equal to (a) the sum of (i) pre-tax
income, (ii) interest expense, (iii) all non-cash amounts in respect of
depreciation and amortization, (iv) Non-Recurring Expenses, (v) discretionary
management fees, and (vi) Rental Payments LESS (b) Non-Recurring Income, all as
reflected on such Person's financial statement for such period.
"Casualty" has the meaning ascribed to such term in paragraph 6 of this
Agreement.
"Code" has the meaning ascribed to such term in paragraph 15 of this
Agreement.
"Collateral Assignment of Liquor License" means that certain Collateral
Assignment of Liquor License dated as of the date hereof by Borrower to and in
favor of Lender pledging the liquor license collateral, if any, relating to
operation of the Restaurant located at the Property.
"Commitment" means the commitment letter from CNL APF Partners, LP to
Borrower dated November 8, 1999.
"Condemnation Proceeds" has the meaning ascribed to such term in
paragraph 10 of this Agreement.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of (a) the Borrower's and Guarantor's, if any, Cash Flow for such period
to (b) the sum of Borrower's and Guarantor's, if any, Debt Service for such
period.
"Contracts" means all contracts and agreements to which the Borrower now
is, or hereafter will be, bound, or a party, beneficiary or assignee (other than
rights evidenced by Chattel Paper, Documents, the Instrument or other
Instruments) including, without limitation the Franchise Agreement and the
License and all other agreements and documents executed and delivered with
respect to such contracts, and all revenues, rentals and other sums of money due
and to become due thereunder from any of the foregoing.
"Copyrights" means all United States or other registered and unregistered
copyrights, all licenses thereto, and all applications therefor, and all
reissues, divisions, continuations, renewals, extensions, modifications,
supplements thereto or to any part thereof, and the right to xxx for past,
present and future infringements of the foregoing, and all rights corresponding
to the foregoing throughout the world.
"Debt Service" means, for any period, with respect to any Person all of
such Person's (i) interest payments, (ii) current portion of the principal
payments, (iii) Rental Payments and (iv) current portion of capital lease
obligations.
"Default" has the meaning ascribed to such term in paragraph 21 of
Agreement.
"Document" has the meaning ascribed to such term under the UCC related to
the Restaurants.
"Equipment" means any "equipment," as such term is defined in the UCC,
used or bought for use primarily in the Restaurant and not included within
Inventory, now or hereafter owned or leased by the Borrower and, in any event,
shall include, but shall not be limited to, all machinery, tools, computer
software, office equipment, furniture, appliances, fixtures, vehicles, motor
vehicles, and any manuals, instructions and similar items which relate to the
foregoing, and any and all additions, substitutions and replacements of any of
the foregoing, wherever located, together with all improvements thereon and all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto.
"Franchise Agreement" means the Franchise Agreement between the
Franchisor, as franchisor, and the Borrower, as franchisee relating to the
Restaurant.
"Franchisor" means the franchisor of Arby's restaurants.
"Funds" has the meaning ascribed to such term in paragraph 3 of this
Agreement.
"Future Advances" has the meaning ascribed to such term in the granting
clause on page 1 of this Agreement, with respect to future indebtedness pursuant
to paragraph 29 of the Instrument.
"GAAP" means generally accepted accounting principles.
"General Intangibles" has the meaning ascribed to such term under the UCC
related to the Restaurants.
"Guarantor" means any guarantor of all or part of Borrower's obligations
under the Note, this Agreement, the Instrument or the other Loan Documents.
"Initial Yearly Premium Payment" has the meaning ascribed to such term in
paragraph 3 of this Agreement.
"Instrument" means the Commercial Mortgage, Assignment of Rents and
Security Agreement as defined in the second WHEREAS clause on page 1 hereof.
"Instruments" means all documents granting a security interest or
assigning rights or otherwise pledging the assets of Borrower (or Guarantor(s)
or its or their respective affiliates) to Lender or its Affiliate to secure the
indebtedness evidenced by any Related Note.
"Inventory" means all inventory of the Borrower of every type or
description relating to the Restaurants, including all "inventory" as such term
is defined in the UCC, now owned or hereafter acquired and wherever located,
whether raw, in process or finished, and all materials usable in processing the
same and all documents of title covering any inventory, including, without
limitation, work in process, materials used or consumed in the Restaurants, now
owned or hereafter acquired or manufactured by the Borrower and held for sale in
the ordinary course of its business; all present and future substitutions
thereof, parts and accessories thereof and all additions thereto; and all
proceeds thereof and products of such inventory in any form whatsoever.
"License" means the license to use the Trademarks and other intellectual
property of Franchisor under the Franchise Agreement relating to the
Restaurants.
"Lien" means any mortgage, pledge, security interest, hypothecation,
collateral assignment, encumbrance, lien (statutory or other), or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the UCC).
"Loan" has the meaning ascribed to such term in the first WHEREAS clause
of this Agreement.
"Loan Documents" means the Note, the Instrument, this Agreement, UCC-1
Financing Statement, any of the Related Notes secured hereby from time to time,
and all other instruments, guaranties, documents and agreements evidencing or
securing the same or the indebtedness represented thereby.
"Major Casualty" has the meaning ascribed to such term in paragraph 6 of
this Agreement.
"Major Taking" has the meaning ascribed to such term in paragraph 10 of
this Agreement.
"Maturity Date" has the meaning ascribed to such term in the preamble of
the Note.
"Non-Recurring Expenses" and "Non-Recurring Income" mean expenses or
income, as the case may be, that is extraordinary and generally not reflected in
any prior period or reasonably anticipated to be incurred in any subsequent
period.
"Note" has the meaning ascribed to such term in the first WHEREAS clause of
this Agreement.
"Other Impositions" has the meaning ascribed to such term in paragraph 3
of this Agreement.
"Patents" means all United States or other registered and unregistered
patents, all licenses thereto, and all applications therefor, and all reissues,
divisions, continuations, renewals, extensions, modifications, supplements
thereto or to any part thereof, and the right to xxx for past, present and
future infringements of the foregoing, and all rights corresponding to the
foregoing throughout the world.
"Payment Date" means the first day of each month or, in the event that
the first day of a month is not a Business Day (as defined in the Note), the
next Business Day (as provided in the Note) during the term of the Loan in which
a monthly installment of principal and interest is due under the Note.
"Permitted Encumbrances" means (i) liens created by the Loan Documents;
(ii) liens for taxes not yet due and payable or which are being contested in
good faith with appropriate and adequate reserves (in accordance with GAAP) held
by Borrower as reasonably determined by Lender; (iii) liens imposed by law
incurred in the ordinary course of business, such as warehousemen's liens; (iv)
liens to secure the performance of tenders, bids, contracts (other than for the
repayment or guarantee of borrowed money or purchase money obligations),
statutory obligations and other similar obligations or arising as a result of
progress payments under government contracts; (v) liens for workers'
compensation, unemployment insurance and similar payments arising in the
ordinary course of business and relating to payments which are not yet
delinquent or are being contested; (vi) other easements, rights-of-way,
restrictions, minor defects in title and similar matters (including those which
do not diminish, in any material respect, the value of the Property or impair,
in any material respect, the priority of the liens created by the Loan Documents
related to the Property; and a security interest relating to purchase money (or
lease) financing in connection with the purchase (or lease) of Equipment to
replace existing, obsolete or surplus Equipment or to comply with the terms of
the Franchise Agreements in an amount not to exceed (x) $75,000.00 per
restaurant site if the related Property is owned or held by Borrower in fee
simple or pursuant to a ground lease or (y) $50,000.00 per restaurant site if
the Property is owned or held by Borrower pursuant to a space lease; provided
that Borrower has obtained the prior written approval of the Lender for such
purchase money (or lease) financing.
"Person" means any individual, corporation, partnership, unincorporated
association, firm, trust, joint stock company, joint venture or other entity of
whatever nature.
"Prepayment Premium" has the meaning ascribed to such term in the Note.
"Property" has the meaning ascribed to such term in the description of
collateral in the Instrument.
"Rating Agency" means any nationally recognized statistical rating
agency; provided, however, that at any time during which the Loan is an asset of
a Securitization, "Rating Agency" shall mean the rating agency or rating
agencies that rate the securities issued in connection with such Securitization.
"Receivables" means any "account" as such term is defined in the UCC
related to the Restaurants and in any event shall include, but not be limited
to, all of the Borrower's rights to payment for goods sold or leased, or
services performed, by the Borrower, whether now in existence or arising from
time to time hereafter, including, without limitation, rights evidenced by an
account, note, contract, security agreement, chattel paper, or other evidence of
indebtedness or security, together with (a) all security pledged, assigned,
hypothecated or granted to or held by the Borrower to secure the foregoing, (b)
all the Borrower's rights, title, and interest in and to any goods, the sale of
which gave rise thereto, (c) guarantees, endorsements and indemnifications on,
or of, any of the foregoing, (d) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(e) all books, correspondence, credit files, records, ledger cards, invoices,
and other papers relating thereto, including without limitation all similar
information stored on a magnet medium or other similar storage device and other
papers and documents in the possession or under the control of the Borrower or
any computer bureau from time to time acting for the Borrower, (f) all evidences
of the filing of financing statements and other statements and the registration
of other instruments in connection therewith and amendments thereto, notices to
other creditors or secured parties, and certificates from filing or other
registration officers, (g) all credit information, reports and memoranda
relating thereto, and
(h) all other writings related in any way to the foregoing.
"Related Note" has the meaning ascribed to such term in paragraph 27 of
the Instrument.
"Rental Payments" means, for any period, with respect to any Person, all
of such Person's operating lease or rent obligations other than capital lease
obligations.
"Restaurant" means a franchise restaurant licensed by the Franchisor and
operated by Borrower and pledged to Lender hereunder.
"Securitization" means the sale, pledge, grant of a security interest,
collateral assignment, transfer and delivery or other encumbrance or disposition
of all or any portion of the Lender's rights and powers in the Note, this
Agreement, the Instrument and the other Loan Documents by the Lender, from time
to time, to one or more of its Affiliates or to other Persons, including the
sale of the Note, this Agreement, the Instrument and the other Loan Documents by
the Lender to one or more Persons who will issue debt instruments or equity
certificates backed by such Note, this Agreement, the Instrument and the other
Loan Documents and the servicing of such instruments by a Person appointed as
servicer in connection therewith.
"sublease" has the meaning ascribed to such term in paragraph 13 of this
Agreement.
"Tax Code" means the Internal Revenue Code of 1986, as amended.
"Trademarks" shall mean all United States or other registered or
unregistered trademarks together with the goodwill of the business connected
with the use thereof, and symbolized thereby, all licenses thereto (including
the License), and all applications therefor, and all reissues, divisions,
continuations, renewals, extensions, modifications, supplements thereto or to
any part thereof, and the right to xxx for past, present and future
infringements of the foregoing, and all rights corresponding to the foregoing
throughout the world.
"UCC" shall mean the Uniform Commercial Code as adopted in the State of
Florida.
30. CONSTRUCTION LOAN. [[INTENTIONALLY OMITTED.]]
31. WAIVER OF JURY TRIAL. BORROWER AND LENDER BY ITS ACCEPTANCE HEREOF, FOR
ITSELF AND FOR EACH HOLDER HEREOF, HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY AGREE, THAT:
(a) NEITHER BORROWER NOR LENDER, NOR ANY ASSIGNEE, SUCCESSOR, HEIR OR
LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEDURE ARISING FROM OR BASED UPON THE NOTE, THIS AGREEMENT, THE
INSTRUMENT OR ANY OTHER LOAN DOCUMENT EVIDENCING, SECURING OR
RELATING TO THE OBLIGATIONS OR TO THE DEALINGS OR RELATIONSHIP
BETWEEN OR AMONG THE PARTIES THERETO;
(b) NEITHER BORROWER NOR LENDER SHALL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED;
(c) THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY NEGOTIATED BY THE
BORROWER AND LENDER, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS;
(d) NEITHER BORROWER NOR LENDER HAS IN ANY WAY AGREED WITH OR
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS
PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES;
(e) IN NO EVENT SHALL LENDER BE RESPONSIBLE OR LIABLE FOR
CONSEQUENTIAL OR PUNITIVE DAMAGES; AND
(f) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO
THIS TRANSACTION AND IS SEPARATELY GIVEN, KNOWINGLY AND
VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.
32. MISCELLANEOUS.
(a) Time shall be of the essence with respect to all of Borrower's
obligations under the Note, this Agreement, the Instrument and the
other Loan Documents.
(b) In the event that the Lender should become the owner of the
Property, there shall be no merger of the estate created by the
Instrument with the estate or any other interest in the Property.
(c) The Note, this Agreement, the Instrument, and the Loan Documents
may not be changed, amended or modified, except in a writing
expressly intended for such purpose and executed by the parties
hereto.
(d) The Note, this Agreement, the Instrument and the other Loan
Documents are intended to and shall be deemed to create only the
relationship of a borrower and a lender between Borrower and
Lender, and are not intended to nor shall they be construed to
create a joint venture or any relationship other than the
relationship of Borrower and Lender.
(e) The liability of each of the parties named as the Borrower
hereunder, if more than one, and every other party who or which is
or may become liable hereunder is and shall be joint and several
in all respects.
(f) Borrower hereby appoints Lender as its attorney-in-fact to perform
any action or execute any document required to be taken or
executed by Borrower under this Agreement, the Instrument or any
of the other Loan Documents or otherwise deemed necessary or
advisable by Lender in its sole discretion with respect to the
Loan or the Property; provided that Lender shall not so act as
Borrower's attorney-in-fact prior to a Default under this
Agreement or the Loan Documents related to the Property unless
Borrower has not, and is then not, undertaking such action and
Lender reasonably determines that such non-action could result in
a material adverse effect on the value of the Property. Lender, in
its sole discretion, shall have the right, but not the obligation,
to perform or refrain from performing any of Borrower's
obligations described in the Loan Documents and such substituted
performance shall not relieve Borrower from its obligations or
cure any default under the Loan Documents. The powers of attorney
described in this paragraph are coupled with an interest and
irrevocable, shall survive Borrower's death, and shall not be
affected by Borrower's disability in any manner. As additional
security to Lender, Borrower hereby authorizes Lender to sign and
file financing statements at any time with respect to any and all
items of personalty included as a portion of the Property, which
may be subject to a security interest pursuant to the UCC, without
the signature of Borrower. Borrower will, however, at any time on
the reasonable request of Lender, sign financing statements, trust
receipts, security agreements or other agreements with respect to
such Property. Upon the Borrower's failure to do so, Lender is
authorized as the agent of Borrower to sign any such Agreement.
Borrower agrees to pay all filing fees and to reimburse Lender all
reasonable costs and expenses of any kind incurred in any way in
connection with such Property.
(g) Whenever possible this Agreement and each provision hereof shall
be interpreted in such manner as to be effective, valid and
enforceable under applicable law. Any provisions of this Agreement
which are prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. In
addition, any determination that the application of any provision
hereof to any person or under any circumstance is illegal and
unenforceable shall not affect the legality, validity and
enforceability of such provision as it may be applied to any other
person or in any other circumstance.
(h) The Powers of Attorney granted to Lender pursuant to this
Agreement, or other related Loan Document shall be automatically
terminated upon the irrevocable payment of the Note and release of
the Instrument.
(i) From time to time, at the reasonable request of Borrower, Lender
agrees to promptly correct any defect, error or omission which may
be discovered in the contents of this Agreement, the Instrument or
in the other Loan Documents or in the execution or acknowledgment
thereof.
(j) Borrower shall take all action necessary to assure that Borrower's
computer-based systems are able to operate and effectively process
data including dates on and after January 1, 2000. Borrower hereby
represents and warrants to Lender that Borrower's operations are
Year 2000 compatible.
33. ADDITIONAL NON-UNIFORM PROVISIONS.
(a) Notwithstanding anything to the contrary contained herein,
Borrower shall have the option to substitute the Property securing
the Loan with a substitute property of equal or greater value,
such value being determined by a valuation and appraisal of such
proposed substitute property in accordance with the provisions of
the Commitment dated November 8, 1999 (the "Commitment Letter");
and which substitute property meets all of Lender's underwriting
requirements, including, but not limited to, confirmation that the
rating of any bonds or trust certificates issued in connection
with a securitization in which the Loan is included will not
change as a result of the substitution. This substitution option
is subject to the following: (i) there shall be no Default under
the Loan Documents (or an event which, but for the passage of time
or the giving of notice, would constitute a Default); (ii) there
shall be no more than one (1) site of the eight (8) sites securing
the loans contemplated by the Commitment Letter) substituted for
other property; (iii) Borrower shall have an equal or greater real
property interest in the property to be substituted (e.g., a
leasehold Property may be substituted with a leasehold, ground
lease or fee simple interest, but a fee simple Property may not be
substituted with a leasehold or ground lease interest) and all
personal property (including equipment) and any and all other
property and/or interests relating to and used or necessary for
the operation of the restaurant business at such substituted site
shall be owned by Borrower and free of encumbrances except for
Permitted Encumbrances or as specifically allowed or excluded by
Lender; (iv) the unit level FCCR for the substitution property
shall be equal or greater than that of the substituted Property;
and (v) there shall be a Franchise Agreement in effect for such
substitution property which shall have a term equal to or in
excess of the term of the Loan. Borrower shall also be responsible
for all costs associated with preparation of the documentation to
evidence the substitution of property for any Property and release
of the Property which is so substituted, including but not limited
to attorneys' fees, recording costs, title search and endorsement
fees, and all other out-of pocket costs of Lender. Upon such a
substitution of property, the security interests of Lender in such
Property which has been so substituted shall be released.
Notwithstanding the provisions of Paragraph 6 hereof to the
contrary, Borrower shall be permitted to use insurance proceeds or
Condemnation Proceeds obtained with respect to the Property for
and in connection with the substitution property.
(b) Notwithstanding any provision hereof or in the other Loan
Documents to the contrary, (i) none of Borrower's Franchise
Agreements, Trademarks, Copyrights or Licenses (if any) shall be
deemed to be a portion of the Property encumbered under this
Agreement or the Loan Documents and (ii) the Borrower has no
liquor licenses.
(c) Notwithstanding any provision hereof or in the other Loan
Documents to the contrary, Borrower shall
be permitted to sell inventory and obsolete and surplus assets in
the ordinary course of business so long as such assets are
replaced with assets of equal or greater value.
(d) Notwithstanding the provisions of paragraph 16 hereof or any other
provision hereof or in the other Loan Documents to the contrary,
Borrower shall not be required to pay a one percent (1%) fee for a
transfer of ownership upon a permitted transfer to an Affiliate of
the Borrower.
(e) Notwithstanding the provisions of paragraph 9 hereof or any other
provision hereof or in the other Loan Documents to the contrary,
until the occurrence (and during the continuance) of a Default
hereunder, Lender shall be permitted to inspect the books and
records and the Property once a year, during normal business
hours, upon 48 hours prior written notice to Borrower. In
addition, Lender shall have a right to one additional inspection,
at it's sole cost and expense, each year. Upon the occurrence (and
during the continuance) of a Default, Lender shall have a right to
such inspections more frequently as Lender reasonably deems
necessary.
(f) Notwithstanding the provisions contained in the definition of
"Affiliate" in paragraph 29 hereof to the contrary, with respect
to Borrower, the definition of Affiliate shall exclude therefrom:
in subclause (i) the phrase "partner in, trustee of, or blood or
legal relative, guardian or representative of " and (y) in
subclause (ii) the phrase "partner, trustee, or blood or legal
relative, guardian or representative, or with respect to which or
whom, the designated Person acts or serves in a similar capacity."
(g) Notwithstanding the definition of "Cash Flow" in paragraph 29
hereof to the contrary, the calculation shall include deductions
for actual general and administrative expenses of such Person.
(h) Notwithstanding the definition of "Permitted Encumbrances" in
paragraph 29 hereof to the contrary such term shall also include
landlord's liens, but only if such landlord's liens are
subordinated to Lender's security interest or otherwise permitted,
in writing, by Lender and such term shall include the POS
Equipment (hardware and software) the purchase (or lease) of which
is currently being contemplated by Borrower for use in the
Restaurants and its other restaurants; provided that Lender shall
have a springing lien in such POS Equipment when the purchase
money security interest has been released or lease financing has
been paid.
(i) The payment of all management fees, intercompany fund transfers,
stock dividends, advances to affiliates/owners, equity advance
loan repayments and owner distributions shall be expressly
subordinated to the payments due to Lender under the Note and the
other Loan Documents. In the event the payment of such management
fees shall cause Borrower to be unable to meet the Consolidated
Fixed Charge Coverage Ratio requirements of paragraph 26 hereof,
the payment of such amounts shall be deferred until Borrower is
able to comply with the requirements of paragraph 26. In addition,
the Consolidated Fixed Charge Coverage Ratio set forth in
paragraph 26 is hereby changed from 1.2:1 to 1.05:1.
(j) Notwithstanding the provisions hereof which reference a guarantor,
Lender confirms that there is no Guarantor of the Loan.
(k) Notwithstanding the provisions of Paragraph 17 hereof, an
additional copy of all notices to Borrower shall be sent to: Xxxxx
Xxxxxxx Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx , Xxx Xxxx
00000-0000, Attention: Xxxxxxx X. Xxxxxx, Esquire.
IN WITNESS WHEREOF, the parties have executed this Agreement or have caused
the same to be executed by their respective representatives thereunto duly
authorized.
BORROWER:
Signed, sealed and delivered
in the presence of:
SYBRA, INC., a Michigan corporation
------------------------------ By:
Name: -----------------------------------
------------------------- XXXXXX X. XXXXXXXXX, Executive Vice
President
------------------------------
Name: (CORPORATE SEAL)
-------------------------
ACKNOWLEDGMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
BEFORE ME, the undersigned, a Notary Public in and for said County and
State, on this day personally appeared XXXXXX X. XXXXXXXXX as Executive Vice
President of SYBRA, INC., a Michigan corporation, that executed the foregoing
instrument on behalf of SYBRA, INC., known to me to be the person and whose name
is subscribed to the foregoing instrument, and acknowledged to me that the same
was the act of the said corporation and that such Executive Vice President of
SYBRA, INC. and that such corporation executed the same for the purposes and
consideration therein expressed and in the capacity therein stated for and on
behalf of the corporation.
GIVEN UNDER MY HAND AND SEAL this 21st day of December, 1999.
---------------------------------------------
Notary Public - State of New York
Print Name:
---------------------------------
Commission Number:
--------------------------
Commission Expires:
-------------------------
LENDER:
CNL APF PARTNERS, LP,
a Delaware limited partnership
BY: CNL APF GP CORP., a Delaware corporation,
as General Partner
By:
------------------------------ -------------------------------------
Name: XXXXXXX XXX, as Vice President
-------------------------
------------------------------
Name:
-------------------------
CNL APF PARTNERS, LP ACKNOWLEDGMENT
STATE OF DELAWARE
COUNTY OF NEW CASTLE
The foregoing instrument was acknowledged before me this 21st day of
December, 1999, by XXXXXXX XXX, as Vice President of CNL APF GP CORP., a
Delaware corporation, the General Partner of CNL APF PARTNERS, LP, a Delaware
limited partnership, for and on behalf of the corporation and limited
partnership. She is personally known to me and did not take an oath.
---------------------------------------------
Notary Public - State of Delaware
Print Name:
---------------------------------
Commission Number:
--------------------------
Commission Expires:
-------------------------
