Exhibit 10.51
Loan # 250
LOAN AND SECURITY AGREEMENT
made by
LLO-GAS, INC.,
a Delaware corporation,
as Borrower
in favor of
CONVENIENCE STORE FINANCE COMPANY, LLC,
its successors and assigns, as Secured Party
Dated: October 26, 1999
LOAN AND SECURITY AGREEMENT
TABLE OF CONTENTS
INDEX ITEM Page
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Preliminary Statement
1. GRANT
2. REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 Borrower's Name
2.2 Location of Borrower, Business and Collateral; Inspection
2.3 Organization; Chief Executive Office; Affiliates
2.4 No Change in Name, Location or Corporate Structure
2.5 Power and Authority
2.6 Due Execution and Delivery, Enforceability
2.7 Operating Experience
2.8 Financial Coverages
2.9 Limitation on Indebtedness and Lease Obligations
2.10 Title; No Liens, Claims or Encumbrances
2.11 No Further Disposition or Encumbrances
2.12 Principal Agreements
2.13 Encumbrance of Principal Agreements
2.14 Financing Statements; Perfected Security Interest
2.15 No Conflict
2.16 No Consent Required
2.17 Purpose for Loans
2.18 Compliance Certificates; Reports; Communications.
2.19 Accuracy of Information
2.20 Maintenance of Collateral and Business; Casualty and Condemnation
2.21 Insurance
2.22 Compliance with Laws; No Violation; Indemnity
2.23 Subsidiaries
2.24 Tax Returns
2.25 Litigation
2.26 Credit Card Agreements
2.27 Purchase Agreement; Bring Down of Representations; Survival of
Warranties; Cumulative
2.28 Capitalization; Solvency
2.29 Maintenance of Existence
2.30 Notice of Material Adverse Changes
2.31 Sale of Assets, Consolidation, Merger, Dissolution, Etc
2.32 Encumbrances
2.33 Indebtedness
2.34 Loans, Investments, Guarantees, Etc.
2.35 Distributions and Redemptions
2.36 Transactions with Affiliates
2.37 INTENTIONALLY OMITTED.
2.38 Deposit Accounts
2.39 Payments
2.40 Costs and Expenses
3. SPECIAL PROVISIONS ON COLLATERAL
3.1 New Collateral Locations; Right of First Refusal
3.2 Accounts
3.3 Inventory Covenants
3.4 Equipment Covenants
3.5 Power of Attorney
3.6 Right to Cure
3.7 Access to Premises
4. SPECIAL PROVISIONS CONCERNING COLLATERAL REVENUES
5. SPECIAL PROVISIONS CONCERNING RIGHTS AND DUTIES WHILE IN POSSESSION OF
COLLATERAL
5.1 Borrower's Possession
5.2 Secured Party's Possession
6. EVENTS OF DEFAULT
6.1 Nonpayment, default, breach, etc.
6.1.3 Other defaults of Borrower and other liable parties
7. REMEDIES
7.1 Cumulative Rights and Remedies
7.2 Acceleration of Obligations
7.3 Additional Rights of Secured Party
7.4 Application of Proceeds; Deficiency
7.5 Required Notice of Sale
8. POST-DEFAULT POWER OF ATTORNEY
9. HEIRS, SUCCESSORS AND ASSIGNS
10. INDEMNIFICATION
11. OBLIGATIONS AND SECURITY INTEREST ABSOLUTE
12. ASSIGNMENT
13. FURTHER ASSURANCES
14. TERM
15. MISCELLANEOUS
15.1 Entire Agreement.
15.2 Notices
15.3 Reasonableness
15.4 Recovery of Sums Required To Be Paid
15.5 WAIVERS
15.6 WAIVER OF TRIAL BY JURY
15.7 Waiver of Notices
15.8 Relationship
15.9 Waiver of Counterclaims
15.10 No Conflict with Principal Agreements
15.11 Time is of the Essence
15.12 Limitation on Interest
15.13 Governing Law; Binding Effect
15.14 Severability
15.15 Counterparts; Captions; Construction
SIGNATURE PAGE
Schedules List
Exhibits List
SCHEDULES LIST
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DEFINITIONS SCHEDULE
INFORMATION SCHEDULE
SPECIFIED MARKET SCHEDULE
SCHEDULE 2.3 AFFILIATES
SCHEDULE 2.14 FILING OFFICES
SCHEDULE 2.23 SUBSIDIARIES
SCHEDULE 2.26 CREDIT CARD AGREEMENTS
SCHEDULE 2.31 SALE OF ASSETS
SCHEDULE 2.38 LOCAL BANKS
EXHIBITS LIST
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EXHIBIT A Secured Promissory Note (Preliminary Statement)
EXHIBIT B Schedule of Notes and Properties (Preliminary Statement)
EXHIBIT C Current Filings (? 2.10)
EXHIBIT D Principal Agreements (? 2.12)
EXHIBIT E Compliance Certificate (? 2.18)
EXHIBIT F Local Bank Direction Letters (? 2.38)
EXHIBIT H Financing Statements (on Form UCC-1)
CONVENIENCE STORE FINANCE COMPANY, LLC
CSFC 1999 LOAN PROGRAM
CSFC Loan # 250
SECURITY AGREEMENT
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Date of Loan Agreement: October 26, 1999
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Borrower: LLO-GAS, INC.,
a Delaware corporation
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Property: 0000 X. Xxxxx Xxxxxx, Xxx Xxxxxxx, XX
0000 X. Xxx Xxxxxxx Xxxx., Xxxxxxxx, XX
000 X. Xxxxxxxx Xxxx, Xxxxxxx, XX
0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx, XX
00000 Xxxxxxxxx Xxx., Xxxxxxxxxxx, XX
00000 00/xx/ Xxxxxx/X.X. Xxx 000 X. Xxxxx Xxxxxxx, XX
000 Xxxxxxxx Xxxxx, Xxxxxxx Xxxxx, XX
00000 Xxxxxx Avenue, Fontana, CA
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Secured Party: CONVENIENCE STORE FINANCE COMPANY, LLC, together with
its successor and assigns
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CSFC Loan # 250
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Loan Agreement"), dated as of
October __, 1999, made by LLO-GAS, INC., a Delaware corporation, as borrower
("Borrower"), in favor of CONVENIENCE STORE FINANCE COMPANY, LLC, a Delaware
limited liability company, as secured party (together with its successors and
assigns, "Secured Party").
Preliminary Statement
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Borrower has requested that Secured Party make one or more loans to
Borrower in the aggregate principal amount of SEVEN MILLION EIGHT HUNDRED
THOUSAND DOLLARS ($7,800,000.00) (collectively, the "Loan") and Borrower has
agreed to evidence such Loan by executing and delivering to Secured Party one or
more Secured Promissory Notes in the form of EXHIBIT A attached hereto, and in
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the original principal amounts set forth on EXHIBIT B attached hereto (each a
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"Note", and collectively, the "Notes") made payable to Secured Party in said
original principal amounts and for the term and on the terms and conditions set
forth therein. The Notes shall be secured by one or more deeds of trust,
mortgages and/or deeds to secure debt on the commercial properties (each a
"Property" and collectively, the "Properties") with the addresses and in the
counties and states set forth on EXHIBIT B and on the INFORMATION SCHEDULE
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annexed hereto. In addition, and as a condition to the making of the Loan,
Secured Party has requested, and Borrower has agreed, among other things, to
grant to Secured Party a security interest in the Collateral (as defined below).
The terms used herein (whether or not capitalized) have the meanings accorded
such terms in the text hereof and in the DEFINITIONS SCHEDULE attached hereto
and made a part hereof and, to the extent not inconsistent therewith, the UCC.
Pursuant to that certain Security Agreement (the "Subordinate Loan
Agreement") dated as of October ___, 1999 by and between Borrower and Capstone
Capital, LLC, a Delaware limited liability company ("Subordinate Lender"),
Subordinate Lender has or may provide certain loans to Borrower in the principal
amount of $________________ (the "Subordinate Loan").
Pursuant to that certain Intercreditor Agreement (the "Intercreditor
Agreement") dated as of October ___, 1999 by and between Subordinate Lender and
Secured Party, Secured Party will allow Subordinate Lender to take a senior
security interest only in the Petroleum Inventory (as defined in the
Intercreditor Agreement).
In consideration of the foregoing, the benefits accruing to Borrower and
for other good and valuable consideration, the receipt and sufficiency of which
Borrower hereby acknowledges,
Borrower hereby makes the following representations and warranties to Secured
Party and covenants and agrees with Secured Party as follows:
1. GRANT. To secure the Obligations, Borrower hereby pledges, assigns,
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transfers and grants to Secured Party a continuing security interest in and Lien
on and right of set off with respect to the following property and assets,
whether now owned and existing or hereafter acquired or arising (collectively
"Collateral"): all Goods (including Inventory and Equipment), General
Intangibles (except as provided below), Accounts, certificates of title,
fixtures, money, instruments, securities, investment property, documents,
chattel paper, credit balances, deposits, deposit accounts, letters of credit,
bankers' acceptances, guaranties, credits, claims, choses in action, demands,
and all present and future Liens, security interests, rights, insurance,
remedies, title and interest in, to and in respect of Accounts and other
property of every kind and description and all other personal property, now or
hereafter owned, acquired, existing, arising, held, used, sold or consumed in
connection with Borrower's Business or Property and any other property, rights
and interests of Borrower which at any time relate to, arise out of or in
connection with the foregoing or which shall come into the possession or custody
or under the control of Secured Party or any of its agents or representatives,
for any purpose (including, without limitation, any Replacement Collateral); all
additions and accessions thereto, substitutions therefor and replacements and
improvements of or to any or all of the foregoing, all interest, income,
dividends, distributions and earnings thereon or other monies or revenues
derived therefrom, and all moneys which may become payable under any policy
insuring any of the foregoing or otherwise required to be maintained hereunder
(including the return of unearned premiums) ("Collateral Revenues"); and all
products and proceeds of the foregoing. In the event and to the extent that at
the request of the Secured Party under Section 2.13 hereof, Borrower shall
pledge and grant a security interest in its right, title and interest in and to
the Principal Agreements (as hereinafter defined), then Borrower shall be deemed
to hereby grant a security interest in all of its right, title and interest in
and to the Principal Agreements, and all proceeds thereof. Without limiting the
generality of the foregoing, this Loan Agreement also secures the payment of all
amounts which constitute part of the Obligations and would be owed by the
Borrower to the Secured Party but for the fact they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrower.
The Borrower hereby acknowledges and agrees that, in applying the law of
any jurisdiction that has now or hereinafter enacted all or substantially all of
the uniform revision of Article 8 of the Uniform Commercial Code, with new
provisions added to Article 9 contemplated by such revision, all as approved in
1994 by the American Law Institute and the National Conference of Commissioners
on Uniform State Laws, the foregoing collateral description shall be deemed to
include "investment property" as defined in such new provision of Article 9, it
being the intention of the Borrower that such collateral be included in the
foregoing collateral description, whether prior to or after the effectiveness of
such revision in such jurisdiction.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS. Borrower hereby
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represents, warrants and covenants that:
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2.1 Borrower's Name. Each of Borrower's legal name, trade name(s),
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if any, federal taxpayer identification number, and mailing address is
accurately set forth on the INFORMATION SCHEDULE annexed hereto and made a part
hereof. Except as disclosed on such INFORMATION SCHEDULE, Borrower has not
merged with or into, otherwise consolidated with, or acquired all or
substantially all of the assets of, any Person or used any other name (whether
in connection with the Business or the Collateral or for business, obtaining
credit or financing or otherwise) in the last twelve years.
2.2 Location of Borrower, Business and Collateral; Inspection.
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Under its legal name, Borrower is and shall continue to be engaged in the
business of operating convenience stores and/or gasoline stations (the
"Business") at each of the Properties with the addresses, in the Counties and
States set forth on the INFORMATION SCHEDULE annexed hereto, and, under its
legal name (or trade name(s), if any, referenced on such INFORMATION SCHEDULE).
The INFORMATION SCHEDULE annexed hereto correctly discloses either that Borrower
(i) is the sole record owner of a Property or (ii) leases (or subleases) a
Property and the record owner of each Property is the person disclosed on such
INFORMATION SCHEDULE. Borrower has provided to Secured Party a true, correct
and complete copy of every Lease and the terms of such Lease or Lease(s) are
accurately summarized in the INFORMATION SCHEDULE annexed hereto. All personal
property of Borrower owned, acquired, held, used, sold or consumed in the
Business, including the Collateral, and all writings relating thereto and
Records, employees, business, offices and operations, are located at and
conducted out of such Properties or at its chief executive office. Borrower
shall allow Secured Party, its agents and representatives, from time to time, to
inspect during normal business hours the Collateral, the Properties and
Borrower's Records pertaining thereto or otherwise to the Business, and Borrower
will assist (and permit abstracts and photocopies of Borrower's Records to be
taken and retained by) Secured Party, its agents and representatives in making
any such inspection. Secured Party shall have the right to review, monitor and,
upon reasonable notice, inspect Borrower's operations with respect to compliance
with Environmental Laws and conformity to sound environmental management
practices and to make recommendations to Borrower with respect thereto.
2.3 Organization; Chief Executive Office; Affiliates. Borrower is
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and will continue to be duly organized, validly existing and in good standing
under the laws of the state of its organization. Borrower is and will continue
to be duly qualified to do business and is in good standing in each jurisdiction
where it conducts its Business or where any Property is located. Borrower has
not failed and shall not fail to qualify to do business and be and remain in
good standing in any jurisdiction where such qualification or standing is
necessary, required or proper in connection with Borrower's ownership or use of
the Collateral or the Properties or the conduct of its Business. Borrower's
chief executive office address is accurately set forth on the INFORMATION
SCHEDULE annexed hereto. SCHEDULE 2.3 hereto contains and will continue to
contain a complete and accurate list of all of Borrower's Affiliates who have
executed and delivered any note, security agreement, guarantee or other loan
document to Secured Party.
2.4 No Change in Name, Location or Corporate Structure. Without
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the prior written consent of Secured Party, Borrower will not change its name,
federal taxpayer identification number, or its chief executive office, nor the
location of any of its Business,
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Properties or Collateral, nor assume a different name, nor conduct its business
or affairs under any other name or in any other location, nor merge,
consolidate, or change its structure (whether by equity sale, issuance, purchase
or otherwise), nor change its use of any item of Collateral during the term
hereof.
2.5 Power and Authority. Borrower has full power, authority and the
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legal right and all necessary permits, consents, licenses and authorizations to
own the Collateral, conduct its Business (including, without limitation, the
sale of nationally and/or regionally branded petroleum products pursuant to one
or more Principal Agreements) and own or lease the Properties. Borrower has full
power, authority and the legal right and all necessary permits, consents,
licenses and authorizations to execute, deliver and perform its obligations
under this Loan Agreement, each Note and the other Loan Documents.
2.6 Due Execution and Delivery, Enforceability. This Loan Agreement,
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each Note and the other Loan Documents have been duly and validly executed and
delivered by Borrower. Each of this Loan Agreement, the Notes and other Loan
Documents constitutes Borrower's legal, valid and binding obligation,
enforceable against Borrower in accordance with its terms.
2.7 Operating Experience. The individuals with primary responsibility
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for on-site management at each Property have and shall have, in the aggregate,
an average of not less than three (3) years experience operating the Business or
a business substantially similar to the Business and no individual with primary
responsibility for on-site management at any Property has or shall have less
than three (3) years experience operating the Business or a business
substantially similar to the Business. In addition, (i) Borrower's Businesses at
the Properties have each been operating for not less than twelve (12) months,
and (ii) the operating statements for the Business at all Properties, in the
aggregate, demonstrate that the per store average operating cash flow is
sufficient to make the per store average monthly payment on the Obligations,
Principal Agreements, Leases and projected operating expenses.
2.8 Financial Coverages. During the term of this Loan Agreement,
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Borrower shall maintain (i) with respect to each Property securing a Loan, (x)
FCCR at not less than 1.10:1.00 ("Minimum Unit Level FCCR") and (y) DSCR at not
less than 1.10:1.00 ("Minimum Unit Level DSCR"), (ii) with respect to all
Properties securing Loans on a consolidated basis, (x) FCCR at not less than
1.30:1.00 ("Minimum Consolidated FCCR") and (y) DSCR at not less than 1.30:1.00
("Minimum Consolidated DSCR"), and (iii) with respect to all of the Borrower's
operations including, without limitation, all of the Properties securing Loans
and the Business (collectively, "Borrower's Corporate Operations"), (x) FCCR at
not less than 1.20:1.00 ("Minimum Corporate FCCR") and (y) DSCR at not less than
1.20:1.00 ("Minimum Corporate DSCR"). On the Date of the Note, after giving
effect to the Obligations, (i) FCCR and DSCR with respect to each Property
securing a Loan are not less than the Minimum Unit Level FCCR and Minimum Unit
Level DSCR, respectively, (ii) FCCR and DSCR with respect to all Properties
securing Loans are not less than the Minimum Consolidated FCCR and Minimum
Consolidated DSCR, respectively, and (iii) FCCR and DSCR with respect to
Borrower's Corporate Operations are not less than the Minimum Corporate FCCR and
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Minimum Corporate DSCR, respectively. All calculations of FCCR and DSCR shall
be based upon the financial information furnished by Borrower hereunder (see
Sections 2.18 and 2.19 hereof) for the most recent twelve (12) month period.
2.9 Limitation on Indebtedness and Lease Obligations. Borrower shall
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not, directly or indirectly, incur any Indebtedness or Lease Obligations or
become obligated to make any payments (including any Payments to Affiliates) if,
after giving effect to such incurrence or payments, FCCR or DSCR would be less
than any of Minimum Unit Level FCCR, Minimum Unit Level DSCR, Minimum
Consolidated FCCR, Minimum Consolidated DSCR, Minimum Corporate FCCR or Minimum
Corporate DSCR.
2.10 Title; No Liens, Claims or Encumbrances. Borrower has maintained
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and will at all times maintain good and marketable title to the Collateral free
of all Liens, claims, encumbrances or rights of others (other than the security
interest granted to Secured Party hereunder and to the extent of the Permitted
Encumbrances) and such Collateral is sufficient to enable Borrower to operate
the Business at each Property in accordance with each of the Principal
Agreements. Except as reflected on the UCC Search attached hereto as EXHIBIT C
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("Current Filings"), there is no financing statement (or similar statement,
agreement, pledge, mortgage, notice or registration), Lien (including any
federal or state tax lien), suit (including any action, proceeding, or other
litigation pending, or to Borrower's knowledge, threatened) or judgment
(including any award, injunction or order) filed with, registered, indexed or
recorded in any public office, court, arbitration panel, administrative agency
or regulatory authority (or intended so to be), directly or indirectly,
identifying or encumbering or covering or involving the Collateral or any of the
Principal Agreements or which could materially affect Borrower, its Business,
any of the Properties or its ability to perform its Obligations. Prior to or
concurrently with the funding of the Loan, Borrower shall take all actions
necessary to terminate all Current Filings other than those consented to by
Secured Party and relating solely to Permitted Encumbrances, if any.
2.11 No Further Disposition or Encumbrances. Other than with respect
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to the interest granted in favor of Secured Party, the Permitted Encumbrances,
and except as provided in Section 3 hereof, Borrower has not and will not enter
into any agreement or understanding or take, permit or suffer to exist any
action (including the filing of a financing statement, agreement, pledge,
mortgage, notice or registration) or event (whether by operation of law or
otherwise) for the purpose of, or that may have the effect of, directly or
indirectly, granting a security interest in or Lien on (including any state or
federal tax lien except to the extent permitted by Section 2.24 hereof),
pledging, transferring, assigning, selling, disposing of, or encumbering any
Collateral, any interest therein or rights pertaining thereto or involving the
Business, or which otherwise would constitute a "Transfer", as defined in the
Mortgages.
2.12 Principal Agreements. The (i) agreements attached as EXHIBIT D
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hereto between Borrower and the other parties specified therein (together with
all replacements therefor in accordance with this Section 2.12, each a
"Principal Agreement"), and (ii) Leases are each in full force and effect in
accordance with their respective terms and neither Borrower or the other parties
thereto have breached or are otherwise in default thereunder. Until such time as
the
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Obligations have been paid in full in cash and otherwise fully satisfied,
Borrower agrees to make one or more timely elections to renew the term of each
of the Principal Agreements and each of the Leases in accordance with its terms
and shall use its best efforts to satisfy any and all conditions to any such
renewal, and to obtain, procure, execute and deliver, file and affix such
further agreements, instruments, documents, notices, statements, writings,
powers and information, and to do or cause to be done all such further acts and
things as Secured Party may reasonably request, from time to time, in its
discretion, in connection with the Obligations. In addition to the foregoing,
Borrower shall not terminate, breach or be in default under, or suffer any of
the foregoing to exist under or with respect to, any of the Principal Agreements
or any Lease and Borrower has no knowledge of any claim of (or basis for any
claim of) any such termination, nonrenewal, breach or default. However,
notwithstanding the foregoing, Borrower shall be permitted to replace each of
the Principal Agreements with a substantially similar agreement or agreement
with terms and conditions more advantageous in all material respects to
Borrower, so long as (i) Borrower shall provide Secured Party with at least
thirty (30) days' prior written notice of such replacement, (ii) such
replacement shall be in form and substance reasonably satisfactory to Secured
Party, (iii) in any event, under all circumstances and at all times, Borrower
shall have in effect one or more Principal Agreements which provide for the sale
by Borrower at each Property of nationally or regionally branded petroleum
products acceptable to Secured Party and (iv) Borrower shall provide Secured
Party with such other information as Secured Party shall request; provided,
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however, that the replacement of any of the foregoing agreements with a new
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agreement shall not itself be deemed to cure a breach under Section 6.1.1(iii)
hereof. Borrower agrees to comply fully, at Borrower's own cost and expense,
with the terms of the each of the Principal Agreements and to notify promptly
Secured Party of any adverse development of which Borrower becomes aware with
regard to any Principal Agreement, including any claim of breach of or default
under, or threat of nonrenewal or termination of, or litigation involving any
Principal Agreement.
2.13 Encumbrance of Principal Agreements. Borrower agrees that if
-----------------------------------
Borrower is permitted by the terms thereof to grant a security interest in any
Principal Agreement to Secured Party to secure the Obligations, then at Secured
Party's request, Borrower shall grant such security interest in favor of Secured
Party and shall promptly obtain, procure, execute and deliver, file and affix
such further agreements (including modification of this Loan Agreement),
assignments, instruments, documents, notices, statements, writings (including
financing statements), powers (including stock and bond powers, and powers of
attorney), tax stamps and information, and shall do or cause to be done all such
further acts and things (including the execution, delivery and filing of
financing statements on Form UCC-1) as Secured Party may reasonably request,
from time to time, in its discretion, to evidence and perfect such security
interest or otherwise in connection with such security interest and the
perfection thereof. Without limiting the foregoing, Borrower authorizes Secured
Party, to the extent permitted by law, to execute and file or file without
Borrower's signature, any and all financing statements (including a copy of this
Loan Agreement which shall be sufficient as a financing statement), amendments
thereto and continuations thereof as Secured Party deems necessary or
appropriate in connection therewith.
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2.14 Financing Statements; Perfected Security Interest. The execution
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and filing of the Financing Statements has been duly authorized by all
appropriate action on the part of Borrower (and any other Person named as debtor
therein) and Borrower (and any other Person named as debtor therein) has duly
executed the Financing Statements. The execution and delivery of this Loan
Agreement and the grant hereunder creates a valid security interest in the
Collateral which has attached and is enforceable. The filing offices set forth
on SCHEDULE 2.14 hereto ("Filing Offices") and made a part hereof are the only
offices where financing statements are required to be filed in order to perfect
such security interest in all Goods (including Inventory and Equipment), General
Intangibles, Accounts, fixtures, investment property, chattel paper and other
personal property included in the Collateral in which a security interest can be
perfected under the UCC by the filing of a financing statement ("Filing
Collateral"). The Secured Party's security interest in all Collateral is a first
priority security interest, and upon the filing of the financing statements with
respect to the Filing Collateral, and upon delivery into Secured Party's
possession of other Collateral in which a security interest can be perfected
under the UCC by obtaining possession, Secured Party's security interest therein
will be a perfected first priority security interest subject to no other
security interest, Liens or encumbrances other than and only then to the extent
of the Permitted Encumbrances.
2.15 No Conflict. Borrower's execution, delivery and consummation of
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the transactions contemplated by this Loan Agreement, the Note and other Loan
Documents do not and will not (with the passage of time or otherwise) (i)
conflict with, violate or constitute a default under any law, rule, regulation,
order, decree, contract, agreement (including the Principal Agreements), note,
mortgage, bond, indenture, lease, license, organizational documents, or
obligation of or applicable to Borrower or the Collateral or (ii) grant, create
or result in any Lien, claim, encumbrance or right in favor of any Person (other
than Secured Party as contemplated hereby) on or to Borrower's Business,
Properties or other assets (including the Collateral and the Principal
Agreements).
2.16 No Consent Required. Except for the filing of the Financing
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Statements with the Filing Offices (and the recording of the Mortgages, if any),
no consent, authorization, approval, license, permit, registration, exemption,
filing, notice or declaration of, from, with or to any other Person or any
court, government, agency or regulatory authority is required prior to or
otherwise in connection with (x) Borrower's execution, delivery and performance
of this Loan Agreement, the Notes and other Loan Documents, (y) the grant of the
security interest hereunder, or (z) the validity, perfection and maintenance of
the security interest created hereby.
2.17 Purpose for Loans. Borrower does not intend to (and will not) use
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all or any portion of the Loan to purchase or carry any securities, including,
without limitation, Margin Stock. None of the proceeds of the Loan will be used,
directly or indirectly, for the purposes of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any Margin Stock
or other security or for any other purpose which might cause any of the Loans to
be considered a "purpose credit" within the meaning of Regulations G, U, T or X
of the Board of Governors of the Federal Reserve System, as amended. Borrower
intends to and agrees to use the proceeds of the Loan solely for the lawful,
proper business or commercial purposes set forth in its application for the
Loan. Borrower shall use the proceeds of the Loans provided by
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Secured Party to Borrower only for payments to each of the Persons listed in the
disbursement direction letter furnished by Borrower to Secured Party on or about
the date hereof including, without limitation, payments of the costs, expenses
and fees in connection with the preparation, negotiation, execution and delivery
of this Loan Agreement and the other Loan Documents, and for general operating,
working capital and other proper corporate purposes of Borrower not otherwise
prohibited by the terms hereof.
2.18 Compliance Certificates; Reports; Communications.
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2.18.1 Borrower agrees to provide the following to Secured Party:
(i) within ten (10) days after the end of each month during the twelve (12)
month period after the Date of Note (as defined in the Notes), sales reports
(including year-to-date amount and any reports required under the Principal
Agreements) and Borrower's operating statements for each Property; (ii) within
thirty (30) days of March 31, June 30, September 30 and December 31 of each
calendar year during the term of this Loan Agreement, a Compliance Certificate
(in the form attached hereto as EXHIBIT E) and quarterly financial statements of
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Borrower certified by Borrower's chief financial officer which fairly present in
all material respects Borrower's financial condition and results of operations
for such period; and (iii) within seventy-five (75) days of December 31 of each
calendar year during the term of this Loan Agreement, a Compliance Certificate
and audited financial statements of Borrower together with the report thereon by
Borrower's Independent Accountants. Borrower further agrees to provide to
Secured Party (i) promptly following receipt by Borrower, complete copies of any
communications that are or may be materially adverse to, or which reflect
information which is or may be materially adverse to Borrower, its Business or
the Collateral and (ii) copies of such other reports and information, estoppels
and authorizations as Secured Party may from time to time reasonably request
promptly following any such request. The financial statements furnished to
Secured Party hereunder shall be prepared in accordance with GAAP applied on a
consistent basis and shall be sufficiently detailed to allow Secured Party to
calculate FCCR and DSCR and determine compliance with other financial covenants.
2.18.2 Borrower shall furnish or cause to be furnished to Secured
Party such budgets, forecasts, projections and other information respecting the
Collateral and the business of Borrower (including the Business) as Secured
Party may, from time to time, reasonably request. Secured Party is hereby
authorized to deliver, from time to time, a copy of any financial statement or
any other information relating to the business of Borrower (including the
Business) to any court or other government agency or to any participant or
assignee or prospective participant or assignee. Borrower hereby irrevocably
authorizes and directs all accountants or auditors to deliver to Secured Party,
at Borrower's expense, copies of the financial statements of Borrower and any
reports or management letters prepared by such accountants or auditors on behalf
of Borrower and to disclose to Secured Party such information as they may have
regarding the business of Borrower (including the Business). Any documents,
schedules, invoices or other papers delivered to Secured Party may (but shall
not be required to) be destroyed or otherwise disposed of by Secured Party at
any time after the same are delivered to Secured Party, except as otherwise
designated by Borrower to Secured Party in writing.
8
2.18.3 Borrower shall on or before the date of execution of this
Loan Agreement have delivered to Secured Party financial statements of Borrower
for the twelve (12) month period preceding the date hereof in form consistent
with that required for annual financial statements as set forth in Section
2.18.1 hereof. In addition, if requested by Secured Party, Borrower shall
deliver, or cause to be delivered, to Secured Party, within thirty (30) days
after the date of this Loan Agreement, a balance sheet of Borrower, prepared by
Borrower's Independent Accountant in accordance with GAAP, which shall present
fairly in all material respects the financial condition of Borrower as of the
Date of Note after giving effect to the Loan and all other transactions
contemplated hereby and thereby.
2.19 Accuracy of Information. All information, reports, statements
-----------------------
and financial and other data furnished (or hereafter furnished) by Borrower, its
Affiliates or their respective agents or representatives to Secured Party, its
agents or representatives hereunder or in connection with the Loan and the
Obligations, are (and shall be on the date so furnished) true, complete and
correct in all material respects, shall not contain any untrue statement of
material fact and shall not omit to state any fact necessary in order to make
the statements contained therein not materially misleading in light of the
circumstances under which such statements are made. All financial projections
that have been or are hereafter prepared by or on behalf of Borrower, its
Affiliates or their respective agents or representatives have been and shall be
prepared in good faith and based upon reasonable assumptions. Borrower shall
promptly advise Secured Party when Borrower becomes aware that any assumptions
made in connection with any projections previously provided to Secured Party
prove to be incorrect or untrue in any material respect. No Event of Default (or
event which with the passage of time or the giving of notice or both would be an
Event of Default) has occurred and is continuing. To Borrower's knowledge, no
event or circumstance has occurred which has had or could reasonably be expected
to have a material adverse effect on the business, assets or prospects of
Borrower (including the Business) which has not been fully and accurately
disclosed to Secured Party in writing and reflected in the Borrower's financial
information and projections and in the Appraisal.
2.20 Maintenance of Collateral and Business; Casualty and
----------------------------------------------------
Condemnation. At Borrower's sole cost and expense, Borrower shall (i) keep, use,
------------
operate and maintain the Collateral, the Business and the Properties in
accordance with applicable laws, rules and regulations and in accordance with
the standards, if any, established by any of the Principal Agreements, (ii)
operate the Business at the Properties in accordance with each of the Principal
Agreements and customary, prudent business practices, (iii) at all times fully
comply with terms and provisions of each of the Principal Agreements and (iv)
not do or suffer to be done any act whereby the value of the Collateral, the
Properties or the Business or any part or interest therein may be lessened in
any material respect. Borrower shall notify Secured Party promptly of any actual
or threatened destruction or material damage or impairment of the Business, or
any of the Collateral or the Properties.
2.20.1 (i) In the event of any casualty or condemnation
proceedings or action with respect to any Property (a "Loss"), Borrower shall
give prompt written notice thereof to Secured Party. Any insurance proceeds or
awards with respect to such Loss in an amount
9
greater than Ten Thousand Dollars ($10,000) (the "Loss Proceeds") shall be
payable to Secured Party. Borrower shall have no right to settle or compromise,
and shall not settle or compromise, any claim or proceeding relating to such
Loss or Loss Proceeds without Secured Party's consent. Borrower shall proceed
promptly and diligently to prosecute in good faith the settlement or compromise
of any and all claims or proceedings relating to such Loss or Loss Proceeds;
provided, however, any such settlement or compromise shall be subject to Secured
-------- -------
Party's consent. Borrower hereby authorizes and directs any affected insurance
company and any affected governmental body responsible for a condemnation to
make payment of the Loss Proceeds directly to Secured Party. If Borrower
receives any Loss Proceeds, Borrower shall promptly pay over such Loss Proceeds
to Secured Party. Borrower hereby covenants that until such Loss Proceeds are so
paid over to Secured Party, Borrower shall hold such Loss Proceeds in trust for
the benefit of Lender and shall not commingle such Loss Proceeds with any other
funds or assets of Borrower or any other party.
(ii) Borrower hereby irrevocably assigns to Secured Party all
Loss Proceeds to which Borrower may become entitled if a Loss occurs (regardless
of whether Borrower was obligated hereunder to obtain the insurance policy or
policies from which such Loss Proceeds are derived). All Loss Proceeds shall be
paid to Secured Party and applied pursuant to this Section 2.20.1. Subject to
the last sentence of this Section 2.20.1(ii), Borrower shall take all
appropriate action in connection with each such proceeding, settlement and
adjustment and shall pay all expenses thereof, including, if Secured Party shall
elect to participate therein, the cost of Secured Party's participation;
provided, however, that any final settlement or adjustment shall be subject to
-------- -------
the prior written consent of Secured Party unless the Loss Proceeds are
sufficient to prepay the Obligations in full in cash. So long as an Event of
Default shall have occurred and be continuing, Secured Party may, at its option
and with respect to its interests as set forth herein, commence, appear in and
prosecute, in its own name, any such action or proceeding or make any compromise
or settlement in connection with such damage, destruction or taking and obtain
directly all Loss Proceeds.
(iii) So long as no Event of Default shall have occurred and be
continuing, if Borrower suffers a Loss, Borrower shall restore the Property (or,
in the case of a taking, the remaining Property) to the same condition, as
nearly as possible, as existed immediately prior to such casualty or taking,
whether or not the Loss Proceeds are sufficient therefor. If the cost of any
restoration made by Borrower pursuant to this Section 2.20.1 shall exceed the
amount of the Loss Proceeds, such deficiency shall be paid by Borrower. The
Loss Proceeds shall be held by Secured Party or its agent or representatives and
shall be disbursed to Borrower as hereinafter set forth, provided that if the
estimated cost of such restoration exceeds the amount of the Loss Proceeds,
Borrower shall deliver to Secured Party or its agent or representative the
estimated deficiency before commencing work. Secured Party or its agent or
representative shall release such Loss Proceeds to Borrower, subject to such
reasonable procedural requirements as Secured Party or its agent or
representative may prescribe, from time to time, and provided that such amounts
shall be disbursed not more often than once monthly, as the restoration
progresses, upon Borrower's written request, accompanied by a certificate of the
architect or engineer in charge of the restoration or by an authorized officer
or managing partner of Borrower, stating that the sum then requested either has
been paid by Borrower or is justly due to the named persons (whose
10
addresses shall also be stated) who have rendered services or furnished
materials for certain portions of the restoration. The certificate shall give a
brief description of such services and materials, shall list the amounts so paid
or owing to each of such persons, shall state the estimated cost of the balance
of the work yet to be performed, and shall state that no part of such
expenditures has been or is being made the basis for any other request for
payment. Upon compliance with the foregoing, Secured Party or its agent shall
pay out of the Loss Proceeds to the extent available to the persons named in the
certificate the respective amounts stated to be due to them or shall pay to
Borrower the amount stated to have been paid by Borrower to such persons.
(iv) So long as an Event of Default shall have occurred and be
continuing, then such Loss Proceeds shall be applied at the option and direction
of Secured Party either to the restoration of the Property as set forth above or
to the prepayment of the outstanding Loan, together with all accrued and unpaid
interest.
2.21 Insurance. At Borrower's sole cost and expense, Borrower shall
---------
do the following:
(i) (a) keep the Collateral (which for purposes of this Section 2.21
shall be deemed to include the Properties) insured against loss or damage by
fire, theft, collision and other hazards (including flood, if no certification
or other evidence satisfactory to Secured Party is delivered to Secured Party to
the effect that the Property is not located within a federally designated
special flood hazard area) as may be required by the Principal Agreements and
Secured Party and by policies of fire, extended coverage and other insurance
with such company or companies, in such amounts and form (and, with respect to
policies required for property, fire and flood insurance in an amount not less
than the lesser of (A) the replacement value thereof and (B) the Maximum Loan
Amount), as may be required by the Principal Agreements or required by or
acceptable to Secured Party, but in no event less than the minimum amount
required to prevent the imposition of any coinsurance requirement on the
insured, (b) maintain liability insurance of not less than an amount reasonably
satisfactory to Secured Party, (c) maintain business interruption insurance with
scope and coverage reasonably satisfactory to Secured Party, and (d) maintain
such other insurance (including certain minimum levels of acceptable workers'
compensation, property damage, earthquake insurance and general public liability
insurance) as may be required by the Secured Party and Principal Agreements;
(ii) cause all insurance policies required hereunder (a) to be
maintained by providers either (A) having ratings of not less than A-VI from
A.M. Best Company Inc. (or comparable ratings from a comparable rating agency)
or (B) who, if not so rated, have been approved by Secured Party and (b) to
contain a standard non-contributory lender's loss payable endorsement or
mortgagee's endorsement in form and substance satisfactory to Secured Party
providing for payment directly to Secured Party and/or its designees and
providing for a minimum of 30-days notice to Secured Party prior to cancellation
or modification or nonrenewal and providing that Secured Party may act as
attorney for Borrower in obtaining, and at any time an Event of Default exists
or has occurred and is continuing, adjusting, settling, amending and canceling
such insurance. Such lender's loss payable endorsements shall specify that the
11
proceeds of such insurance shall be payable to Secured Party as its interests
may appear and further specify that Secured Party shall be paid regardless of
any act or omission by Borrower or any of its Affiliates;
(iii) timely pay all premiums, fees and charges required in connection
with all of its insurance policies and otherwise continue to maintain such
policies in full force and effect;
(iv) promptly deliver the insurance policies, certificates (and
renewals) thereof or other evidence of compliance herewith to Secured Party; and
(v) promptly notify Secured Party of any loss covered by or claim
under or notice made in connection with any such insurance policies. Borrower
shall allow Secured Party to join Borrower in adjusting any loss or claim in
excess of the Loss Proceeds. At its option, Secured Party may apply any
insurance proceeds received by Secured Party at any time to the cost of repairs
or replacement of Collateral and/or to payment of the Obligations, whether or
not then due, in any order and in such manner as Secured Party may determine or
hold such proceeds as cash collateral for the Obligations.
2.22 Compliance with Laws; No Violation; Indemnity.
---------------------------------------------
(i) Borrower is and shall continue to be in compliance in all
material respects with the requirements of all applicable laws, rules,
regulations, licenses, permits, approvals and orders of any governmental
authority relating to its business, including, without limitation, those set
forth in or promulgated pursuant to the Occupational Safety and Health Act of
1970, as amended, the Fair Labor Standards Act of 1938, as amended, the Internal
Revenue Code of 1986, as amended, and the rules and regulations thereunder, all
federal, state and local statutes, regulations, rules and orders relating to
consumer credit, all federal, state and local statutes, regulations, rules and
orders pertaining to sales of consumer goods (including, without limitation, the
Consumer Products Safety Act of 1972, as amended, and the Federal Trade
Commission Act of 1914, as amended and all regulations, rules and orders
promulgated thereunder). Borrower has obtained all material permits, licenses,
approvals, consents, certificates, orders or authorizations of any governmental
agency required for the lawful conduct of its business and is in compliance in
all material respects with the requirements of all applicable laws, rules,
regulations, orders, permits, approvals and stipulations of any governmental
agency (including, but not limited to, the Department of State, the Department
of Commerce, the Bureau of Alcohol, Tobacco and Firearms, and the Environmental
Protection Agency) relating to its business (including, without limitation,
those set forth in or promulgated pursuant to ERISA and those related to
environmental pollution and employee health and safety (including the
Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards
Act of 1938, as amended, the Code, and the Environmental Laws).
(ii) (a) Neither the Borrower nor any ERISA Affiliate (as
hereinafter defined) currently maintains or is obligated to contribute to an
employee benefit plan subject to ERISA (an "ERISA Plan"). Within the five-year
period ending on the date hereof, no ERISA Affiliate has incurred any material
liability to the U.S. Pension Benefit Guaranty Corporation (the
12
"PBGC"), the U.S. Internal Revenue Service (the "IRS") or an ERISA Plan on
account of any failure to meet the contribution requirements or minimum funding
standards of, or prohibited transactions with respect to, any ERISA Plan, the
administration or termination of any single employer pension plan which is an
ERISA Plan, or any partial or complete withdrawal from, or the insolvency,
reorganization or termination of, a multiemployer plan which is an ERISA Plan,
and no event has occurred and no condition exists which presents a material risk
that the Borrower or any of its Affiliates will incur liabilities on account of
the foregoing circumstances which are material in aggregate. As used in this
Loan Agreement, the term "ERISA Affiliate" means the Borrower and every
---------------
Affiliate and any other trade or business, whether or not incorporated, which is
subject to ERISA and which is from time to time a member of a controlled group
or a group under common control with the Borrower (within the meaning of Section
414(b) or Section 414(c) of the Code or Section 4001(b)(1) of ERISA), and other
terms used in this Section 2.22 shall have the meanings assigned thereto in the
applicable provisions of ERISA and the Code.
(b) Solely for the purposes of making the representation in the next
sentence and only to the extent that the accuracy of the representation made by
this sentence affects the accuracy of the representation in the next sentence,
neither the Borrower nor any of its Affiliates is a "party in interest" (within
-----------------
the meaning of Section 3(14) of ERISA) with respect to any ERISA Plan, and none
of their securities are "employer securities" (within the meaning of Section
-------------------
407(d) of ERISA) with respect to any ERISA Plan. The acquisition of the Notes
by Secured Party does not and will not constitute a "prohibited transaction"
----------------------
(within the meaning of Section 4975 of the Code or Section 406 of ERISA).
(iii) Borrower has not and shall not acquire, obtain, make,
manufacture, produce, operate, hold, possess, maintain, use, sell, transfer,
grant, pledge, or dispose of (for purposes of this Section, collectively
"Borrower's Use") any of its business (including the Business), securities,
property or assets (including any proceeds of the Loan, any Collateral and the
Properties) in violation of any statute, law, rule, ordinance, regulation,
policy, procedure, injunction, award, decree, judgment, contract, agreement
(including the Principal Agreements), understanding, or right or interest of any
other Person (for purposes of this Section, collectively "Violation"), and to
Borrower's knowledge no such Violation has been made by any other Person and no
basis for a claim of any such violation exists. Borrower shall indemnify and
hold Secured Party harmless from and against any such Violation or any breach of
this Section 2.22, and any other loss, liability, damage, cost or expense
whatsoever (including attorneys fees and disbursements) arising out of or in
connection with Borrower's Use of any of its business (including the Business),
securities, property or assets (including any proceeds of the Loan, any
Collateral and the Properties). The indemnification provisions of this Section
2.22 shall survive the payment of the Obligations and the termination of this
Loan Agreement.
2.23 Subsidiaries. Borrower does not have any subsidiaries on the
------------
date hereof other than those listed on SCHEDULE 2.23 hereto and shall not,
during the term hereof, create or own any other subsidiaries without prior
notice to and written consent of Secured Party.
13
2.24 Tax Returns. Borrower and each of its Affiliates and each
-----------
Person which might have tax liabilities for which Borrower or any Affiliates is
or may be liable (each, a "Tax Party") has filed, or caused to be filed, and
will continue to file in a timely manner all tax returns, reports and
declarations which are required to be filed by it (without requests for
extension). All information in such tax returns, reports and declarations is
complete and accurate in all material respects. Each Tax Party has paid or
caused to be paid all taxes due and payable or claimed due and payable in any
assessment received by it, and has collected, deposited and remitted in
accordance with all applicable laws all sales and/or use taxes applicable to the
conduct of its business, except taxes the validity of which are being contested
in good faith by appropriate proceedings diligently pursued and available to
Borrower and with respect to which adequate reserves have been set aside on its
books. No extensions of the time for the assessment of deficiencies have been
granted by any Tax Party. There are no material Liens on any properties or
assets of the Borrower or any of its Affiliates imposed or arising as a result
of the delinquent payment or the nonpayment of any tax, assessment, fee or other
governmental charge. The income tax returns of the Borrower and its Affiliates
have been examined and reported upon by the relevant tax authorities, or closed
by applicable statutes of limitations, for all fiscal years through the fiscal
year ended immediately prior to the date of the Note, and neither the Borrower
nor any of its Affiliates nor any such entity has given or consented to any
waiver of the statute of limitations with respect to its tax liabilities for any
such year. Adequate provision has been made for the payment of all other
accrued and unpaid Federal, State, county, local, foreign and other taxes
whether or not yet due and payable and whether or not disputed. Borrower has
collected and deposited in a segregated subaccount or remitted to the
appropriate tax authority all sales and/or use taxes applicable to its business
required to be collected under the laws of the United States and each possession
or territory thereof, and each State or political subdivision thereof, including
any State in which Borrower owns any Inventory or owns or leases any other
property, and Borrower knows of no transaction or matter which might or could
result in additional tax assessments to any Tax Party in the ordinary course.
There are no applicable taxes, fees or other governmental charges payable by any
Tax Party in connection with the execution and delivery of this Loan Agreement,
and the other Loan Documents by Borrower or any of its Affiliates or the offer,
issuance, sale and delivery of the Notes by Borrower. Borrower shall be liable
for any tax or penalties imposed on Secured Party as a result of the financing
arrangements provided for herein and Borrower agrees to indemnify and hold
Secured Party harmless with respect to the foregoing, and to repay to Secured
Party on demand the amount thereof, and until paid by Borrower such amount shall
be added to and deemed part of the Obligations, provided, that, nothing
-------- ----
contained herein shall be construed to require Borrower to pay any income or
franchise taxes attributable to the income of Secured Party from any amounts
charged or paid hereunder to Secured Party. The foregoing indemnity shall
survive the payment of the Obligations and the termination of this Loan
Agreement.
2.25 Litigation. Except as set forth on the INFORMATION SCHEDULE
----------
annexed hereto, there is no present investigation by any governmental agency
pending, or to the best of Borrower's knowledge threatened against or affecting
Borrower, its assets or Business and there is no action, suit, proceeding or
claim by any Person pending, or to the best of Borrower's knowledge threatened,
against Borrower or its assets or Business, or against or affecting any
transactions contemplated by this Loan Agreement.
14
2.26 Credit Card Agreements.
----------------------
2.26.1 Set forth in SCHEDULE 2.26 hereto is a correct and complete
list of (a) all of the Credit Card Agreements and all other agreements,
documents and instruments existing as of the date hereof between or among
Borrower, the Credit Card Issuers, the Credit Card Processors and any of their
affiliates, (b) the percentage of each sale payable to the Credit Card Issuer or
Credit Card Processor under the terms of the Credit Card Agreements, (c) all
other fees and charges payable by Borrower under or in connection with the
Credit Card Agreements and (d) the term of such Credit Card Agreements. The
Credit Card Agreements constitute all of such agreements necessary for Borrower
to operate its business as presently conducted with respect to credit cards and
debit cards and no Accounts of Borrower arise from purchases by customers of
Inventory with credit cards or debit cards, other than those which are issued by
Credit Card Issuers with whom Borrower has entered into one of the Credit Card
Agreements set forth on SCHEDULE 2.26 hereto. Each of the Credit Card
Agreements constitutes the legal, valid and binding obligation of Borrower and,
to the best of Borrower's knowledge, the other parties thereto, enforceable in
accordance with its terms and is in full force and effect. No default or event
of default, or act, condition or event which after notice or passage of time or
both, would constitute a default or an event of default under any of the Credit
Card Agreements, exists or has occurred. Borrower and, to Borrower's knowledge,
the other parties thereto have complied with all of the terms and conditions of
the Credit Card Agreements to the extent necessary for Borrower to be entitled
to receive all payments thereunder. Borrower has delivered, or caused to be
delivered, to Secured Party true, correct and complete copies of all of the
Credit Card Agreements.
2.26.2 Borrower shall: (a) observe and perform all material terms,
covenants, conditions and provisions of the Credit Card Agreements to be
observed and performed by it at the times set forth therein; (b) not do, permit,
suffer or refrain from doing anything, as a result of which there could be a
default under or breach of any of the terms of any of the Credit Card
Agreements; (c) at all times maintain in full force and effect the Credit Card
Agreements and not terminate, cancel, surrender, modify, amend, waive or release
any of the Credit Card Agreements, or consent to or permit to occur any of the
foregoing; except, that, Borrower may terminate or cancel any of the Credit Card
Agreements in the ordinary course of the business of Borrower provided that
Borrower shall give Secured Party not less than thirty (30) days' prior written
notice of its intention to so terminate or cancel any of the Credit Card
Agreements; (d) not enter into any new Credit Card Agreements with any new
Credit Card Issuer unless (i) Secured Party shall have received not less than
thirty (30) days prior written notice of the intention of Borrower to enter into
such agreement (together with such other information with respect thereto as
Secured Party may request) and (ii) if requested by Secured Party, Borrower
delivers, or causes to be delivered to Secured Party, a Credit Card
Acknowledgment in favor of Secured Party concurrently with entering into such
Credit Card Agreement; (e) give Secured Party immediate written notice of any
Credit Card Agreement entered into by Borrower after the date hereof, together
with a true, correct and complete copy thereof and such other information with
respect thereto as Secured Party may request; and (f) furnish to Secured Party,
promptly upon the request of Secured Party, such information and evidence as
Secured Party may
15
reasonably require from time to time concerning the observance, performance and
compliance by Borrower or the other party or parties thereto with the terms,
covenants or provisions of the Credit Card Agreements. Borrower shall notify
Secured Party promptly of: (i) any material default by Borrower under any of the
Credit Card Agreements or of any default which might result in the Credit Card
Issuer or Credit Card Processor ceasing to make payments or suspending payments
to Borrower; (ii) any notice from any Credit Card Issuer or Credit Card
Processor that such Person is ceasing or suspending, or will cease or suspend,
any present or future payments due or to become due to Borrower from such
Person, or that such Person is terminating or will terminate any of the Credit
Card Agreements; and (iii) the failure of Borrower to comply with any material
terms of the Credit Card Agreements or any terms thereof which might result in
the Credit Card Issuer or Credit Card Processor ceasing or suspending payments
to Borrower.
2.27 Purchase Agreement; Bring Down of Representations; Survival of
--------------------------------------------------------------
Warranties; Cumulative. Borrower will cooperate with Secured Party in connection
----------------------
with any sale or other disposition of the Loan by Secured Party and the
provisions of the Commitment with respect thereto are hereby incorporated by
reference as if set forth herein in their entirety. In this regard, Borrower
hereby covenants and agrees to execute and deliver in connection with the sale
or other disposition of the Loan, or any interest therein, at such time and from
time to time, as required by Secured Party, a purchase agreement and such other
agreements, documents, estoppels, consents or instruments as Secured Party may,
from time to time, reasonably request in connection with any such disposition,
including certificates reaffirming the representations and covenants of Borrower
hereunder as if made on the date of any such reaffirmation. All representations
and warranties contained in this Loan Agreement or any of the other Loan
Documents shall survive the execution and delivery of this Loan Agreement and
shall be deemed to have been made again to Secured Party on the date of each
additional borrowing or other credit accommodation hereunder and shall be
conclusively presumed to have been relied on by Secured Party regardless of any
investigation made or information possessed by Secured Party. The
representations and warranties set forth herein shall be cumulative and in
addition to any other representations or warranties which Borrower shall now or
hereafter give, or cause to be given, to Secured Party.
2.28 Capitalization; Solvency.
------------------------
2.28.1 All of the issued and outstanding capital stock of Borrower
is directly and beneficially owned and held by the Person identified on the
INFORMATION SCHEDULE annexed hereto and all of such capital stock has been duly
authorized and is fully paid and non-assessable and free and clear of all
claims, Liens, pledges and encumbrances of any kind; provided, however, that to
-------- -------
the extent no Event of Default has occurred and is continuing, such Person
identified on the INFORMATION SCHEDULE annexed hereto may transfer its capital
stock of Borrower to Permitted Transferees if such Person retains voting control
through proxy or otherwise over the capital stock transferred to such Permitted
Transferees.
2.28.2 Borrower (a) is solvent and will continue to be solvent
after giving effect to the Obligations, the security interests of Secured Party
and the other transactions
16
contemplated hereunder, and (b) is able to pay its debts as they mature and has
(and has reason to believe it will continue to have) sufficient capital (and not
unreasonably small capital) to carry on its business and all businesses in which
it is about to engage. Based upon the Appraisal, the assets and properties of
Borrower at a fair valuation and at their present fair salable value are, and
will be, greater than the indebtedness of Borrower, and including any
subordinated and contingent liabilities computed at the amount which, to the
best of Borrower's knowledge, represents an amount which can reasonably be
expected to become an actual or matured liability.
2.29 Maintenance of Existence. Borrower shall at all times preserve,
------------------------
renew and keep in full force and effect its existence and rights and franchises
with respect thereto and maintain in full force and effect all permits,
licenses, trademarks, tradenames, approvals, authorizations, leases and
contracts necessary to carry on the Business as presently or proposed to be
conducted.
2.30 Notice of Material Adverse Changes. Borrower promptly shall
----------------------------------
notify Secured Party in writing of the details of any material loss, damage,
investigation, action, suit, proceeding or claim relating to the Collateral, the
Properties or any other property which is security for the Obligations or which
would result in any material adverse change in Borrower's Business, Properties,
Collateral (including goodwill) or condition, financial or otherwise, and the
occurrence of any Event of Default or act, condition or event which, with the
passage of time or giving of notice or both, would constitute an Event of
Default.
2.31 Sale of Assets, Consolidation, Merger, Dissolution, Etc.
--------------------------------------------------------
Borrower shall not, directly or indirectly do or agree to do any of the
following:
2.31.1 merge into or with or consolidate with any other Person or
permit any other Person to merge into or with or consolidate with it unless
Borrower shall be the survivor of any such merger or consolidation; or
2.31.2 (a) take or permit to be taken any action which could impair
the rights of the Secured Party in the Properties or the Collateral, (b) sell,
assign, lease, transfer, abandon or otherwise dispose of any stock or
indebtedness or any assets other than Collateral if after giving effect thereto
there would be a breach of Section 2.8 hereof , (c) take or permit to be taken
any action which would constitute a Transfer under the Mortgages, or (d) sell,
assign, lease, transfer, abandon or otherwise dispose of any Properties or the
Collateral except for the following in the ordinary course of business and
consistent with present business practice and the requirements of the Principal
Agreements:
(i) sales of Inventory;
(ii) the disposition of worn-out or obsolete Equipment so long as if
an Event of Default exists or has occurred and is continuing, any proceeds are
paid to Secured Party and such sales do not involve Equipment having an
aggregate fair market value in excess of Ten Thousand Dollars ($10,000) for all
such Equipment disposed of in any fiscal year of Borrower; and
17
(iii) the sale or disposition of the property set forth on SCHEDULE
2.31 hereto in accordance with commercially reasonable business practices;
provided, however, that notwithstanding the foregoing, provided that no Event of
-------- -------
Default shall have occurred and be continuing or would occur (including, without
limitation, under Section 2.8 hereof) under any other Section of this Agreement
or any other Loan Document after giving effect to the following, the Borrower
shall be permitted to sell or otherwise dispose of Collateral and will not be
required to elect the Defeasance Option under the Note as a result solely of
such disposition of Collateral, so long as (i) Borrower shall provide Secured
-- ---- --
Party with not less than sixty (60) days prior written notice of the proposed
disposition, (ii) Borrower shall grant Secured Party a first priority security
interest in and lien on additional assets of Borrower (the "Replacement
Collateral") which shall be have an Appraised Value equal to or greater than
that of the Collateral being replaced and shall be otherwise acceptable in all
respects to Secured Party and (iii) Borrower shall execute and deliver to
Secured Party such agreements, documents and instruments as Secured Party may
deem necessary or desirable to perfect Secured Party's first priority security
interest in the Replacement Collateral which shall be deemed Collateral for all
purposes under this Agreement and the other Loan Documents.
2.32 Encumbrances. Borrower shall not create, incur, assume or suffer
------------
to exist any security interest, mortgage, pledge, Lien, charge or other
encumbrance of any nature whatsoever on any of the Collateral, Properties and
Principal Agreements, except the following permitted encumbrances ("Permitted
------
Encumbrances"):
2.32.1 Liens and security interests of Secured Party;
2.32.2 Liens securing the payment of taxes, either not yet overdue
or the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to Borrower and with respect to
which adequate reserves have been set aside on its books;
2.32.3 non-consensual statutory Liens (other than Liens securing the
payment of taxes) arising in the ordinary course of Borrower's business to the
extent such Liens secure indebtedness which is not overdue or such Liens secure
indebtedness relating to claims or liabilities which are fully insured and being
defended at the sole cost and expense and at the sole risk of the insurer or
being contested in good faith by appropriate proceedings diligently pursued and
available to Borrower, in each case prior to the commencement of foreclosure or
other similar proceedings and with respect to which adequate reserves have been
set aside on its books;
2.32.4 zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of Real Property which do not interfere in any
material respect with the use of such Real Property or ordinary conduct of the
business of Borrower as presently conducted thereon or materially impair the
value of the Real Property which may be subject thereto;
18
2.32.5 purchase money security interests in Equipment (including
capital leases) not to exceed Ten Thousand Dollars ($10,000) in the aggregate in
any year and in no event in excess of a maximum of Twenty Five Thousand Dollars
($25,000) in the aggregate at any time outstanding so long as such security
interests do not apply to any property of Borrower other than the Equipment so
acquired, and the indebtedness secured thereby does not exceed the cost of the
Equipment so acquired, as the case may be;
2.32.6 Liens or rights of setoff or credit balances of Borrower with
Credit Card Issuers, but not Liens on or rights of setoff against any other
property or assets of Borrower pursuant to the Credit Card Agreements (as in
effect on the date hereof) to secure the obligations of Borrower to the Credit
Card Issuers as a result of fees and chargebacks;
2.32.7 deposits of cash with the owner or lessor of premises leased
and operated by Borrower in the ordinary course of the business of Borrower to
secure the performance by Borrower of its obligations under the terms of the
lease for such premises;
2.32.8 Liens in favor of lessors that are expressly subordinate to
the security interest of Secured Party; and
2.32.9 Liens representing the interest of any Ground Lessor under
any Ground Lease, as defined in the applicable Mortgage.
2.33 Indebtedness. Borrower shall not incur, create, assume, become
------------
or be liable in any manner with respect to, or permit to exist, any obligations
or indebtedness except the following permitted indebtedness ("Permitted
Indebtedness"):
2.33.1 the Obligations;
2.33.2 trade obligations and normal accruals in the ordinary course
of business not yet due and payable;
2.33.3 purchase money indebtedness (including capital leases) to the
extent not incurred or secured by liens (including capital leases) on Collateral
in violation of any other provision of this Loan Agreement including Sections
2.8, 2.9 and 2.32, and all such purchase money indebtedness shall not in the
aggregate at any time exceed Twenty Five Thousand Dollars ($25,000);
2.33.4 other Indebtedness of the Borrower so long as the incurrence
thereof, and payments thereunder, do not cause a breach of Section 2.8 hereof;
and
2.33.5 The Subordinate Loan.
2.34 Loans, Investments, Guarantees, Etc. Borrower shall not,
-----------------------------------
directly or indirectly, make any loans or advance money or property to any
Person, or invest in (by capital contribution, dividend or otherwise) or
purchase or repurchase the equity securities or
19
indebtedness or all or a substantial part of the assets or property of any
Person, or guarantee, assume, endorse, or otherwise become responsible for
(directly or indirectly) the indebtedness, performance, obligations or dividends
of any Person or agree to do any of the foregoing, except:
------
2.34.1 the endorsement of instruments for collection or deposit in
the ordinary course of business; and
2.34.2 investments in: short-term (ninety (90) day) direct
obligations of the United States Government; negotiable certificates of deposit
issued by any bank satisfactory to Secured Party, payable to the order of the
Borrower or to bearer and delivered to Secured Party; and commercial paper rated
A1 or P1; provided, that, as to any of the foregoing, Borrower shall take such
-------- ----
actions as are deemed necessary by Secured Party to perfect the security
interest of Secured Party in such investments.
2.35 Distributions and Redemptions. Upon the occurrence and during
-----------------------------
the continuance of an Event of Default, Borrower shall not, directly or
indirectly, declare, or pay or make any dividends or any other distributions,
whether in cash, property, securities or any combination thereof, with respect
to any shares of its or any Affiliate's or any other Person's capital stock,
partnership interests or membership interests, as the case may be, now or
hereafter outstanding, or set aside or otherwise deposit or invest any sums for
such purpose, or redeem, retire, defease, purchase or otherwise acquire any of
the foregoing (or set aside or otherwise deposit or invest any sums for such
purpose) for any consideration or apply or set apart any sum, or make any other
distribution (by reduction of capital or otherwise) in respect of any of the
foregoing or agree to do any of the foregoing.
2.36 Transactions with Affiliates. Borrower shall not directly or
----------------------------
indirectly, (a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to, any Affiliate or any officer, employee, member,
manager, director, or agent of any Affiliate or (b) make any payments of
management, consulting or other fees for management or similar services, or of
any indebtedness owing to any Affiliate or any officer, employee, member,
manager, director, agent or any Affiliate or Borrower or make any other Payments
to Affiliates except in the ordinary course of business and pursuant to
agreements in writing on terms no less favorable to Borrower than would be
available in agreements with Persons other than those referenced in (a) or (b).
2.37 INTENTIONALLY OMITTED.
---------------------
2.38 Deposit Accounts. The banks set forth on SCHEDULE 2.38 hereto
----------------
constitute all of the banks with whom Borrower has deposit account arrangements
with respect to the Property as of the date hereof and identifies each of the
deposit accounts at such banks to a Property location of Borrower. At all times
during the term hereof, the banks listed on SCHEDULE 2.38 hereto shall
constitute all of the banks with whom Borrower has deposit account arrangements
with respect to the Properties and the deposit accounts identified therein shall
constitute all deposit accounts of Borrower with respect thereto; provided,
--------
however, that
-------
20
with the prior written consent of Secured Party, Borrower may substitute any
bank listed on SCHEDULE 2.38 hereto with another federally-insured bank.
2.38.1 Borrower shall deposit or cause to be deposited all proceeds
from sales of Inventory and other receipts, in every form, including, without
limitation, cash, checks, credit card sales drafts, credit card sales or charge
slips or receipts and other forms of daily restaurant receipts, from each
Property location of Borrower on each business day into the deposit accounts of
Borrower used solely for such purpose and identified to each Property location
as set forth on SCHEDULE 2.38 hereto. All such funds deposited into such deposit
accounts shall be remitted by intrabank account debit and credit, wire transfer
or otherwise (e.g., by ACH transfer) in immediately available funds on the
eleventh (11th) day of each month to the extent required to make payments on the
Obligations, including payments of Stated Payment Amount (as defined in the
Note) on the Note, to such account(s) as the Secured Party shall direct.
Borrower shall irrevocably authorize and direct in writing, in the form attached
as EXHIBIT F hereto, each of the banks required to be listed on SCHEDULE 2.38
---------
hereto to follow and comply with the instructions of the Secured Party with
respect to all matters concerning the accounts, including any directions by
Secured Party with respect to the disposition of funds in any account, in each
case without notice to or consent of Borrower. Such authorization and direction
shall not be rescinded, revoked or modified during the term hereof.
2.39 Payments. In accordance with Section 2.38.1 hereof, Borrower
--------
shall pay, or cause to be paid, and hereby authorizes Secured Party to cause to
be paid, all Obligations as and when due from all amounts in any bank required
to be listed on SCHEDULE 2.38 hereto. Borrower shall make, or cause to be made,
all payments to Secured Party on the Obligations in cash and free and clear of,
and without deduction or withholding for or on account of, any setoff,
counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. If after receipt of any
payment of, or proceeds of the Properties or the Collateral applied to the
payment of, any of the Obligations, Secured Party is required to surrender or
return such payment or proceeds to any Person for any reason, then the
Obligations intended to be satisfied by such payment or proceeds shall be
reinstated and continue and Borrower shall be and remain liable to Secured Party
hereunder and under other Loan Documents and this Loan Agreement and other Loan
Documents shall continue in full force and effect as if such payment or proceeds
had not been received by Secured Party. Borrower shall be liable to pay all
Obligations to Secured Party in cash, and does hereby indemnify and hold Secured
Party harmless for the amount of any payments or proceeds surrendered or
returned. This Section 2.39 shall remain effective notwithstanding any contrary
action which may be taken by Secured Party in reliance upon such payment or
proceeds. This Section 2.39 shall survive the payment of the Obligations and the
termination of this Loan Agreement.
2.40 Costs and Expenses. Borrower shall pay to Secured Party on
------------------
demand all costs, expenses, filing fees and taxes (other than income and
franchise taxes of Secured Party) paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Secured
Party's rights in the Properties or the Collateral, this Loan Agreement, the
Notes, the Mortgages, the other Loan Documents and all other documents related
hereto or thereto, including any
21
amendments, supplements, restatements or consents which may hereafter be
contemplated (whether or not executed) or entered into in respect hereof and
thereof, including, but not limited to: (a) all costs and expenses of filing or
recording (including Uniform Commercial Code financing statement filing taxes
and fees, documentary taxes, intangibles taxes and mortgage recording taxes and
fees, if applicable); (b) all title insurance and other insurance premiums,
appraisal fees and search fees; (c) costs and expenses of remitting loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining any account with any bank required to be listed on SCHEDULE 2.38
hereto, together with Secured Party's customary charges and fees with respect
thereto; (d) costs and expenses of preserving and protecting the Properties or
the Collateral; (e) costs and expenses paid or incurred in connection with
obtaining payment of the Obligations, enforcing the security interests and liens
of Secured Party, selling or otherwise realizing upon the Properties or the
Collateral, and otherwise enforcing the provisions of this Loan Agreement and
the other Loan Documents or defending any claims made or threatened against
Secured Party arising out of the transactions contemplated hereby and thereby
(including, without limitation, preparations for and consultations concerning
any such matters); (g) all out-of-pocket expenses and costs heretofore and from
time to time hereafter incurred by Secured Party during the course of periodic
field examinations of the Properties or the Collateral and Borrower's
operations, plus a customary per diem charge at the rate of $500 per person per
day for Secured Party's examiners in the field and office; and (h) the actual
and reasonable fees and disbursements of counsel (including legal assistants) to
Secured Party in connection with any of the foregoing.
22
2.41 Single Purpose Entity. Borrower has not and shall not: (a)
---------------------
engage in any business or activity other than the ownership, operation and
maintenance of the Business, the Properties and the Collateral, and activities
incidental thereto; (b) acquire or own any material assets other than (i) the
Business, the Properties and the Collateral, and (ii) such incidental Personal
Property as may be necessary for the operation of the Business, the Properties
and the Collateral, (c) notwithstanding anything contained herein to the
contrary, merge into or consolidate with any person or entity or dissolve,
terminate or liquidate in whole or in part, transfer or otherwise dispose of all
or substantially all of its assets or change its legal structure, without in
each case Secured Party's consent; (d) fail to preserve its existence as an
entity duly organized, validly existing and in good standing (if applicable)
under the laws of the jurisdiction of its organization or formation, or without
the prior written consent of Secured Party, amend, modify, terminate or fail to
comply with the provisions of Borrower's partnership agreement, articles or
certificate of incorporation , articles of organization, operating agreement, or
similar organizational documents, as the case may be, as same may be further
amended or supplemented, if such amendment, modification, termination or failure
to comply would adversely affect the ability of Borrower to perform its
obligations hereunder, under the Notes or under the other Loan Documents; (e)
notwithstanding anything contained herein to the contrary, own any subsidiary or
make any investment in, any person or entity without the consent of Secured
Party; (f) commingle its assets with the assets of any of its general partners,
managing members, shareholders, affiliates, principals or of any other person or
entity; (g) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any obligation), other than the Obligations, except as
may expressly be permitted in Section 2.33 (h) notwithstanding anything
contained herein to the contrary, fail to maintain its records, books of account
and bank accounts separate and apart from those of the general partners,
managing members, shareholders, principals and affiliates of Borrower, the
affiliates of a general partner or managing member of Borrower, and any other
person or entity; (i) enter into any contract or agreement with any general
partner, managing member, shareholder, principal or affiliate of Borrower, or
any general partner, managing member, shareholder, principal or affiliate
thereof, except upon terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an arms-length basis
with third parties other than any general partner, managing member, shareholder,
principal or affiliate of Borrower, or any general partner, managing member,
shareholder, principal or affiliate thereof; (j) seek the dissolution or winding
up in whole, or in part, of Borrower; (k) maintain its assets in such a manner
that it will be costly or difficult to segregate, ascertain or identify its
individual assets from those of any general partner, managing member,
shareholder, principal or affiliate of Borrower, or any general partner,
managing member, shareholder, principal or affiliate thereof or any other
person; (l) hold itself out to be responsible for the debts of another person;
(m) make any loans to any third party, except as may expressly be permitted in
Section 2.34; (n) fail either to hold itself out to the public as a legal entity
separate and distinct from any other entity or person or to conduct its business
solely in its own name in order not (i) to mislead others as to the identity
with which such other party is transacting business, or (ii) to suggest that
Borrower is responsible for the debts of any third party (including any general
partner, managing member, shareholder, principal or affiliate of Borrower, or
any general partner, managing member, shareholder, principal or affiliate
thereof); (o) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in light of
its contemplated business operations; or (p) file
23
or consent to the filing of any petition, either voluntary or involuntary, to
take advantage of any applicable insolvency, bankruptcy, liquidation or
reorganization statute, or make an assignment for the benefit of creditors.
3. SPECIAL PROVISIONS ON COLLATERAL.
--------------------------------
3.1 New Collateral Locations; Right of First Refusal. Borrower
------------------------------------------------
shall provide Secured Party with not less than 120 days written notice of
Borrower's proposal, or the proposal of any of Borrower's Affiliates, to own or
operate any new business location within the Specified Market. If Borrower
desires to finance such new location, Borrower hereby agrees that prior to
attempting to obtain financing from any Person (other than an Affiliate of
Borrower), it shall advise Secured Party of its requirements and Secured Party
shall have the right, but not the obligation, to offer to finance such new
location on terms and conditions mutually acceptable to Secured Party and
Borrower. In addition, if Secured Party and Borrower shall fail to reach
agreement on the terms of a financing after compliance with the prior sentence,
and Borrower shall thereafter obtain a firm, written commitment from a Person to
provide such financing, Secured Party shall have the right, but not the
obligation, to match the terms of such offer and if it shall so match the offer,
Borrower and Secured Party shall enter into such documents and instruments as
shall be required to complete such financing.
3.2 Accounts.
--------
3.2.1 With respect to each Account (including, without limitation,
each Credit Card Receivable), there shall be no setoffs, deductions, contras,
defenses, counterclaims or disputes existing or asserted with respect thereto,
other than with respect solely to Credit Card Receivables, those occurring in
the ordinary course of business, and none of the transactions giving rise
thereto will violate any applicable State or Federal Laws or regulations, and
all documentation relating to Credit Card Receivables will comply with such laws
and regulations and will be legally enforceable in accordance with its terms.
3.2.2 Secured Party may, at any time or times that an Event of
Default exists or has occurred and is continuing, (i) notify any or all account
debtors, Credit Card Issuers and Credit Card Processors that the Accounts have
been assigned to Secured Party and that Secured Party has a security interest
therein and Secured Party may direct any or all account debtors, Credit Card
Issuers and Credit Card Processors to make payments of Accounts directly to
Secured Party, (ii) extend the time of payment of, compromise, settle or adjust
for cash, credit, return of merchandise or otherwise, and upon any terms or
conditions, any and all Accounts or other obligations included in the Collateral
and thereby discharge or release the account debtor or any other party or
parties in any way liable for payment thereof without affecting any of the
Obligations, (iii) demand, collect or enforce payment of any Accounts or such
other obligations, but without any duty to do so, and Secured Party shall not be
liable for its failure to collect or enforce the payment thereof or for the
negligence of its agents or attorneys with respect thereto and (iv) take
whatever other action Secured Party may reasonably deem necessary or desirable
for the protection of its interests. At any time that an Event of Default
exists or has occurred and is continuing, at Secured Party's request, all
invoices and statements sent to any account debtor,
24
Credit Card Issuer or Credit Card Processor shall state that the Accounts due
from such account debtor, Credit Card Issuer or Credit Card Processor and such
other obligations have been assigned to Secured Party and are payable directly
and only to Secured Party and Borrower shall deliver to Secured Party such
originals of documents evidencing the sale and delivery of goods or the
performance of services giving rise to any Accounts as Secured Party may
require.
3.2.3 Secured Party shall have the right at any time or times, in the
name of a nominee of Secured Party and after occurrence and during the
continuance of an Event of Default, in Secured Party's name, to verify the
validity, amount or any other matter relating to any Account or other
Collateral, by mail, telephone, facsimile transmission or otherwise.
3.2.4 Borrower shall deliver or cause to be delivered to Secured
Party, with appropriate endorsement and assignment, with full recourse to
Borrower, all chattel paper and instruments which Borrower now owns or may at
any time acquire immediately upon Borrower's receipt thereof, except as Secured
Party may otherwise agree.
3.3 Inventory Covenants. With respect to the Inventory:
-------------------
3.3.1 Borrower shall at all times maintain inventory records
satisfactory to Secured Party, keeping correct and accurate records itemizing
and describing the kind, type, quality and quantity of Inventory, Borrower's
cost therefor and daily withdrawals therefrom and additions thereto;
3.3.2 Borrower shall conduct, from time to time, a physical count of
the Inventory in accordance with the requirements of the Principal Agreements
and otherwise prudent business practice, and at any time or times as Secured
Party may request on or after an Event of Default. Promptly following the
request of Secured Party from time to time, Borrower shall supply Secured Party
with a report in the form and with such specificity as may be reasonably
satisfactory to Secured Party concerning any such physical count;
3.3.3 Borrower shall not remove any Inventory from the locations set
forth or permitted herein, except for sales of Inventory in the ordinary course
of Borrower's business;
3.3.4 Borrower shall produce, use, store and maintain the Inventory,
with all reasonable care and caution and in accordance with applicable standards
of the Principal Agreements and any insurance and in conformity with applicable
laws (including, but not limited to, the requirements of the Federal Fair Labor
Standards Act of 1938, as amended and all rules, regulations and orders related
thereto);
3.3.5 Borrower assumes all responsibility and liability arising from
or relating to the production, use, sale or other disposition of the Inventory
except if such liability results solely from Secured Party's gross negligence or
willful misconduct;
3.3.6 Borrower shall keep the Inventory in good and marketable
condition; and
25
3.3.7 Borrower shall not, without prior written notice to Secured
Party, acquire or accept any Inventory on consignment or approval.
3.4 Equipment Covenants. With respect to the Equipment:
-------------------
3.4.1 Borrower shall, at its expense, at any time or times as Secured
Party may request on or after an Event of Default, deliver or cause to be
delivered to Secured Party written reports or appraisals as to the Equipment in
form, scope and methodology acceptable to Secured Party by an appraiser
acceptable to Secured Party;
3.4.2 Borrower shall keep the Equipment in good order, repair,
running and marketable condition (ordinary wear and tear excepted);
3.4.3 Borrower shall use the Equipment with all reasonable care and
caution and in accordance with applicable standards of the Principal Agreements
and any insurance and in conformity with all applicable laws;
3.4.4 The Equipment is and shall be used in Borrower's business and
not for personal, family, household or farming use;
3.4.5 Borrower shall not remove any Equipment from the locations set
forth or permitted herein, except to the extent necessary to have any Equipment
repaired or maintained in the ordinary course of the business of Borrower;
3.4.6 The Equipment is now and shall remain personal property and
Borrower shall use its best efforts to ensure that none of the Equipment is or
becomes a part of or affixed to real property; and
3.4.7 Borrower assumes all responsibility and liability arising from
the use of the Equipment, except if such liability results solely from Secured
Party's gross negligence or willful misconduct.
3.5 Power of Attorney. Borrower hereby irrevocably designates and
-----------------
appoints Secured Party (and all persons designated by Secured Party) as
Borrower's true and lawful attorney-in-fact, and authorizes Secured Party, in
Borrower's or Secured Party's name, to: (a) at any time an Event of Default has
occurred and is continuing, demand payment on Accounts or other proceeds of
Inventory or other Collateral, enforce payment of Accounts by legal proceedings
or otherwise, exercise all of Borrower's rights and remedies to collect any
Account or other Collateral, sell or assign any Account upon such terms, for
such amount and at such time or times as the Secured Party deems advisable,
settle, adjust, compromise, extend or renew an Account, discharge and release
any Account, prepare, file and sign Borrower's name on any proof of claim in
bankruptcy or other similar document against an account debtor, notify the post
office authorities to change the address for delivery of Borrower's mail to an
address designated by Secured Party, and open and dispose of all mail addressed
to Borrower, and do all acts and things which are necessary, in Secured Party's
determination, to fulfill Borrower's obligations
26
under this Loan Agreement and the other Loan Documents; and (b) at any time (i)
take control in any manner of any item of payment or proceeds thereof, (ii) have
access to any lockbox or postal box into which Borrower's mail is deposited,
(iii) endorse Borrower's name upon any items of payment or proceeds thereof and
deposit the same in the accounts at banks listed on SCHEDULE 2.38 hereto, (iv)
endorse Borrower's name upon any chattel paper, document, instrument, invoice,
or similar document or agreement relating to any Account or any goods pertaining
thereto or any other Collateral or Properties, (v) sign Borrower's name on any
verification of Accounts and notices thereof to account debtors and (vi) execute
in Borrower's name and file any UCC financing statements or amendments thereto.
Borrower hereby releases Secured Party and its officers, employees and designees
from any liabilities arising from any act or acts under this power of attorney
and in furtherance thereof, whether of omission or commission, except as a
result of Secured Party's own gross negligence or willful misconduct as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction;
3.6 Right to Cure. Secured Party may, at its option but without any
-------------
obligation:
3.6.1 After an Event of Default that is continuing, cure any default
by Borrower under any agreement with a third party, including the Principal
Agreements and Leases, or pay or bond on appeal any judgment entered against
Borrower;
3.6.2 Discharge taxes, Liens, security interests or other
encumbrances at any time levied on or existing with respect to the Collateral;
and
3.6.3 Pay any amount, incur any expense or perform any act which, in
Secured Party's judgment, is necessary or appropriate to preserve, protect,
insure or maintain the Properties or the Collateral and the rights of Secured
Party with respect thereto. Secured Party may add any amounts so expended to the
Obligations, such amounts to be repayable by Borrower on demand. Secured Party
shall be under no obligation to effect such cure, payment or bonding and shall
not, by doing so, be deemed to have assumed any obligation or liability of
Borrower. Any payment made or other action taken by Secured Party under this
Section shall be without prejudice to any right to assert an Event of Default
hereunder and to proceed accordingly.
3.7 Access to Premises. From time to time as reasonably requested
------------------
by Secured Party, at the cost and expense of Borrower:
3.7.1 Secured Party or its designee shall have complete access to all
of Borrower's premises during normal business hours and after notice to
Borrower, or at any time and without notice to Borrower if an Event of Default
exists or has occurred and is continuing, for the purposes of inspecting,
verifying and auditing the Collateral and all of Borrower's Records;
3.7.2 Borrower shall promptly furnish to Secured Party such copies of
such Records or extracts therefrom as Secured Party may request in good faith;
and
27
3.7.3 Secured Party or its designee shall have use during normal
business hours of such of Borrower's personnel, equipment, supplies and premises
as may be reasonably necessary for the foregoing, provided that such use does
not materially interfere with Borrower's ordinary business operations, and, if
an Event of Default exists or has occurred and is continuing, for the collection
of Accounts and realization of other Collateral, and Borrower assumes all
responsibility and liability arising from or relating to such use except if such
liability results solely from Secured Party's gross negligence or willful
misconduct.
4. SPECIAL PROVISIONS CONCERNING COLLATERAL REVENUES. Borrower shall take
-------------------------------------------------
such actions as shall be necessary and/or requested by Secured Party to direct
any and all transferors, distributors or payors (including insurance companies
with whom Borrower maintains insurance) to make payment of all Collateral
Revenues directly to Secured Party and authorizes Secured Party, in its sole
discretion, to hold the same in its possession as Collateral, to apply the same
to repayment of the Obligations, to deposit the same into any of the accounts
with the banks listed on SCHEDULE 2.38 hereto, or to apply the same toward
replacement of the Collateral. All Collateral Revenues and proceeds whether
received by Secured Party or by Borrower, or by any other Person will be
included in the Collateral and be subject to the security interest granted to
Secured Party hereunder. Borrower shall identify, earmark, segregate and keep
separate all Collateral Revenues and proceeds received by it, upon Secured
Party's request, promptly account to Secured Party for all Collateral Revenues
and proceeds, and hold all Collateral Revenues and proceeds received by Borrower
in trust for the benefit of Secured Party and shall promptly (and in any event
not later than the fifth (5th) day after receipt) deliver (or cause to be
delivered) the same to Secured Party and into its possession in the form
received by Borrower (with any necessary endorsements) and at a time and in a
manner satisfactory to Secured Party.
5. SPECIAL PROVISIONS CONCERNING RIGHTS AND DUTIES WHILE IN
--------------------------------------------------------
POSSESSION OF COLLATERAL.
------------------------
5.1 Borrower's Possession. Borrower will be deemed at all times to
---------------------
hold all securities, investment property, instruments, chattel paper, documents,
certificates and money and other writings evidencing or relating to the
Collateral in trust for Secured Party and, upon and during the continuation of
an Event of Default, to the extent the same shall, from time to time, be in
Borrower's possession, upon request or as otherwise provided herein, Borrower
shall promptly deliver the same to Secured Party in the form received (with any
necessary endorsements) and at a time and in a manner satisfactory to Secured
Party. With respect to the Collateral in Borrower's possession, Borrower shall
at Secured Party's request take such action as Secured Party in its discretion
deems necessary or desirable to create, perfect and protect Secured Party's
security interest in any of the Collateral.
5.2 Secured Party's Possession. With respect to all of the
--------------------------
Collateral delivered or transferred to, or otherwise in the custody or control
of (including any items in transit to or set apart for) Secured Party or any of
its agents or representatives in accordance with this Loan Agreement, Borrower
agrees that: (i) such Collateral will be and be deemed to be in the sole
possession of Secured Party; (ii) Borrower has no right to withdraw or
substitute any
28
such Collateral; and (iii) Borrower shall not take or permit any action, or
exercise any voting and other rights, powers and privileges in respect of the
Collateral, inconsistent with Secured Party's interest therein and sole
possession thereof and Secured Party may in its sole discretion and without
notice, without obligation or liability except to account for property actually
received by it, and without affecting or discharging the Obligations: (a)
further transfer and segregate the Collateral in its possession; (b) receive
Collateral Revenues or proceeds and hold the same as a part of the Collateral
and/or apply the same as hereinafter provided; and (c) exchange any of the
Collateral for other property upon reorganization, recapitalization or other
readjustment. Following the occurrence of an Event of Default, Secured Party is
authorized (i) to exercise or cause its nominee to exercise all or any rights,
powers and privileges (including to vote) on or with respect to the Collateral
with the same force and effect as an absolute owner thereof; (ii) whether any of
the Obligations be due, in its name or in Borrower's name or otherwise, to
demand, xxx for, collect or receive any money or property at any time payable or
receivable on account of or in exchange for, or make any compromise or
settlement Secured Party deems desirable with respect to, any of the Collateral;
and (iii) to extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, or release, any of the Collateral.
Notwithstanding the rights accorded Secured Party with respect to the Collateral
and except to the extent provided below or required by the UCC or other
applicable law (if such requirement cannot be modified, waived or excused),
Secured Party's sole duty with respect to the Collateral in its possession (with
respect to custody, preservation, safekeeping or otherwise and whether under
Section 9-207 of the UCC or otherwise) will be to deal with it in the same
manner that Secured Party deals with similar property owned and possessed by it.
Without limiting the foregoing, Secured Party, and any of its officers,
directors, members, partners, trustees, owners, employees, representatives and
agents, to the extent permitted by law, will: (A) have no duty with respect to
the Collateral or the rights granted hereunder; (B) not be required to sell,
invest, substitute, replace or otherwise dispose of the Collateral; (C) not be
required to take any steps necessary to preserve any rights against prior
parties to any of the Collateral; (D) not be liable for (or deemed to have made
an election of or exercised any right or remedy on account of) any delay or
failure to demand, collect or realize upon any of the Collateral; and (E) have
no obligation or liability in connection with the Collateral or arising under
this Loan Agreement, except as specifically set forth in this Agreement.
Borrower agrees that such standard of care is reasonable and appropriate.
6. EVENTS OF DEFAULT. The happening of any one or more of the following
-----------------
events shall constitute an "Event of Default" hereunder:
6.1 Nonpayment, Default, Breach
---------------------------
6.1.1 (i) Borrower fails to make any payment when due under this Loan
Agreement, the Subordinate Loan Agreement, the Notes, the Mortgages, any other
Loan Document or on any other Obligation or Borrower disclaims liability under
or the enforceability of any Loan Document, or any Loan Document shall for any
reason cease to be, or shall be asserted by Borrower not to be, a legal, valid
and binding obligation of Borrower, or the security interest or Lien granted
hereunder and under any other Loan Document shall for any reason cease to be, or
be asserted by Borrower not to be, a valid first priority perfected security
interest in any
29
Property or Collateral; (ii) any Principal Agreement shall cease to be in full
force and effect for any reason except as provided in Section 2.12 hereof; (iii)
other than as set forth in clause (i) above, Borrower is in default under, fails
to perform or observe any covenant or condition of or agreement in, or is in
breach of, or makes a material inaccuracy in or omission from any representation
or warranty under or in, this Loan Agreement, the Subordinate Loan Agreement,
the Notes, the Mortgages, any other Loan Document, the Principal Agreements, or
any financial or other statement delivered to Secured Party, or any agreement,
instrument or obligation in connection with any Permitted Encumbrance or any
other Indebtedness, and such default, failure, breach, inaccuracy or omission
shall continue unremedied for the earliest of (a) five (5) days following the
date that notice of such default, failure, breach, inaccuracy or omission is
given to Borrower by Secured Party, (b) five (5) days following the date that
Borrower first obtains knowledge of such default, failure, breach, inaccuracy or
omission or (c) in the case of any Permitted Encumbrance, Indebtedness or Lease,
the occurrence of such event; provided, however, that, there shall be no cure
-------- -------
period in the case of: (x) any failure to observe any such term, covenant,
condition or provision which is not capable of being cured at all or within such
five (5) day period or which has been the subject of a prior failure within a
six (6) month period or an intentional breach by Borrower of any such term,
covenant, condition or provision, or (y) the failure to observe or perform any
of the covenants or provisions contained in Sections 2.8, 2.9, 2.10, 2.11, 2.12,
2.13, 2.17, 2.20, 2.21, 2.24, 2.26, 2.31, 2.32, 2.33, 2.34 and 2.35 and 2.41 of
this Loan Agreement; or (iv) the Persons who own stock of Borrower on the date
of this Loan Agreement entitling such Persons to cast the votes required to
elect a majority of members of the board of directors or other applicable
governing body of Borrower, or a Permitted Transferee shall cease for any reason
to own such stock; or
6.1.2 Any of Borrower's Affiliates listed on SCHEDULE 2.3 hereto (as
amended from time to time) fails to make any payment when due under, or defaults
under, fails to perform or observe any covenant of or condition or agreement in
breach of, or makes any material inaccuracy in or omission from any
representation and warranty under, any security agreement with Secured Party or
note held by Secured Party or any other loan document with Secured Party or in
any other agreement, instrument, document or certificate, or financial or other
statement delivered to Secured Party, and such failure, default or breach
continues beyond any applicable grace period provided therein; or
6.1.3 Other defaults of Borrower and other liable parties: If
---------------------------------------------------
Borrower or any of Borrower's Affiliates who is a maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party for, or is otherwise liable
for, any of the Obligations, Properties or Collateral, or any partnership or
limited liability company in which Borrower is a partner or member (each
hereinafter called an "Other Liable Party") shall die, dissolve, merge or
consolidate, suspend the transaction of business, attempt to terminate (except
strictly in accordance with its terms), revoke or disclaim any obligation to
Secured Party, or incur any material adverse change in its financial condition
or prospects; or if Borrower or any Other Liable Party shall be expelled from or
suspended by any stock or securities exchange or other exchange, or any
proceeding, procedure or remedy supplementary to or in enforcement of judgment
(involving an amount in excess of $10,000 in the aggregate) shall be resorted to
or commenced against, or with respect to any property of, Borrower or any Other
Liable Party; or if
30
Borrower or any Other Liable Party shall make an assignment for the benefit of,
or composition with, creditors, or shall be or become insolvent or unable, or
generally fail, to pay its debts when due, or shall be or become a party or
subject to any bankruptcy, reorganization, insolvency or other similar
proceeding, or a receiver or liquidator, custodian or trustee shall be appointed
for Borrower or any Other Liable Party, or a substantial portion of any of
Borrower's or their respective assets and, if any of the foregoing shall occur
involuntarily as to Borrower and any Other Liable Party, it shall not be
dismissed with prejudice, stayed or discharged within thirty (30) days; or if
Borrower or any Other Liable Party shall take any action to effect, or which
indicates its acquiescence in, any of the foregoing.
7. REMEDIES.
--------
7.1 Cumulative Rights and Remedies. Secured Party has been granted
------------------------------
hereunder, and upon the occurrence of an Event of Default may exercise, the
rights, powers and remedies of: (i) secured parties under the UCC or other
applicable Uniform Commercial Code; (ii) secured parties under any other
applicable statute, law, rule or regulation; and (iii) Secured Party under this
Loan Agreement, the Notes, the Mortgages and any other Loan Document and other
agreement between Borrower and Secured Party. In addition, all such rights,
powers and remedies shall be cumulative and not alternative and enforceable, in
Secured Party's discretion, alternatively, successively, or concurrently on any
one or more occasions, and shall include, without limitation, the right to apply
to a court of equity for an injunction to restrain a breach or threatened breach
by Borrower of this Loan Agreement or any of the other Loan Documents. Any
single or partial exercise of, or forbearance, failure or delay in exercising
any right, power or remedy shall not be, nor shall any such single or partial
exercise of, or forbearance, failure or delay be deemed to be a limitation,
modification or waiver of any right, power or remedy and shall not preclude the
further exercise thereof; and every right, power and remedy of Secured Party
shall continue in full force and effect until such right, power and remedy is
specifically waived by an instrument in writing executed and delivered with
respect to each such waiver by Secured Party.
7.2 Acceleration of Obligations. Upon the occurrence of an Event of
---------------------------
Default, and at any time thereafter if any Event of Default shall then be
continuing, Secured Party may, from time to time in its discretion, by written
notice to Borrower declare any or all of the Notes (including, without
limitation, an amount equal to that required to be paid if the Loan were prepaid
as described in Paragraph 5, "Acceleration; Expenses" of the Note) and any other
----------------------
Obligations to be immediately due and payable whereupon (and, ipso facto,
----------
automatically without any notice, demand or other action by any Person, upon the
occurrence of any Event of Default of the type referred to in Section 6.1.3
hereof) such principal, interest and other Obligations shall be immediately due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by Borrower to the maximum extent permitted by
law and such amounts, to the extent not paid on the date of acceleration, shall
thereafter bear interest until paid at the Default Rate.
7.3 Additional Rights of Secured Party. Upon the occurrence of an
----------------------------------
Event of Default, Secured Party may, from time to time, in its discretion, and
without Borrower's assent,
31
without advertisements or notices of any kind (except for the notice specified
in Section 7.5 hereof regarding notice required in connection with a public or
private sale), or demand of performance or other demand, or obligation or
liability (except to account for amounts actually received) to or upon Borrower
or any other person (all such advertisements, notices and demands, obligation
and liabilities, if any, hereby being expressly waived and discharged to the
extent permitted by law), forthwith, directly or through its agents or
representatives: (i) disclose such default and other matters (including the name
of Borrower) in connection therewith in Secured Party's reasonable discretion to
any other Person; (ii) to the extent permitted by applicable law enter any
premises, with or without the assistance of other persons or legal process;
(iii) require Borrower to account for (including accounting for any products and
proceeds of any Collateral), segregate, assemble, make available and deliver to
Secured Party, its agents or representatives, the Collateral, at any place and
time designated by Secured Party; (iv) take possession of, operate, render
unusable, remove from any location, collect, transfer and receive, recover,
appropriate, foreclose, extend payment of, adjust, compromise, settle, release
any claims included in, and do all other acts or things necessary or, in Secured
Party's sole discretion appropriate, to protect, maintain, preserve and realize
upon, the Collateral and any products and proceeds thereof, in whole or in part;
and (v) exercise all rights, powers and interests with respect to any and all
Properties and Collateral, and sell, assign, lease, license, pledge, transfer,
negotiate (including endorse checks, drafts, orders, or instruments), deliver or
otherwise dispose (by contract, option(s) or otherwise) of the Properties, the
Collateral or any part thereof. Any such disposition may be in one or more
public or private sales, at or upon an exchange, board or system or in the
County, in the State or elsewhere, at such price, for cash or credit (or for
future delivery without credit risk) and upon such other terms and conditions as
it deems appropriate, with the right of Secured Party to the extent permitted by
law upon any such sale or sales, public or private, to purchase the whole or any
part of said Collateral, free of any right, claim or equity of redemption of or
in Borrower (such rights, claims and equity of redemption, if any, hereby being
expressly waived). If any of the Properties or Collateral is sold or leased by
Secured Party upon credit terms or for future delivery, the Obligations shall
not be reduced as a result thereof until payment therefore is finally collected
by Secured Party. In the event Secured Party institutes an action to recover any
Properties or Collateral or seeks recovery of any Properties or Collateral by
way of prejudgment remedy, Borrower waives the posting of any bond which might
otherwise be required. Notwithstanding that Secured Party, whether in its own
behalf and/or on behalf of another or others, may continue to hold the
Properties or Collateral and regardless of the value thereof, or any delay or
failure to dispose thereof, unless and then only to the extent that Secured
Party proposes to retain the Properties or Collateral in satisfaction of the
Obligations by written notice in accordance with the UCC, Borrower shall be and
remain liable for the payment in full of any balance of the Obligations and
expenses at any time unpaid. Without limiting the foregoing, upon Borrower's
failure to abide by and comply with its obligations hereunder, in addition to
its other rights and remedies, Secured Party may (but is not required to), in
its sole discretion and to the extent it deems necessary, advisable or
appropriate, take or cause to be taken such actions or things to be done
(including, without limitation, (x) the payment or advancement of funds, or
requiring advancement of funds to be held by Secured Party to fund such
obligations, including taxes or insurance, and (y) taking, or causing to be
taken, remediation actions with respect to environmental problems on any
Property as may be required hereby (or necessary or desirable in connection
herewith) to correct such
32
failure (including causing the Collateral to be maintained or insurance
protection required hereby to be procured and maintained) and any and all costs
and expenses incurred (including reasonable attorneys' fees and disbursements)
in connection therewith shall be included in Borrower's Obligations and shall be
immediately due and payable and bear interest at the Default Rate.
7.4 Application of Proceeds; Deficiency. Secured Party may apply the
-----------------------------------
net proceeds, if any, of any collection, receipt, recovery, appropriation,
foreclosure or realization, or from any use, operation, sale, assignment, lease,
pledge, transfer, delivery or disposition of all or any of the Collateral and
the Properties, after deducting all reasonable costs and expenses (including
attorneys' fees, court costs and legal expenses) incurred in connection
therewith or with respect to the care, safekeeping, custody, maintenance,
protection, administration or otherwise of any and all of said Collateral or in
any way relating to the rights of Secured Party under this Loan Agreement:
first, to the satisfaction of the Obligations, in whole or in part (whether or
not due) in such order as Secured Party may, in its discretion, elect; second,
to the payment, satisfaction or discharge of any other Indebtedness or
obligation (including any reimbursement, subrogation, contribution or other
obligation to any Person), or otherwise as may be permitted or as required by
any law, rule or regulation (including Section 9-504(1)(c) of the UCC); and
lastly, the surplus, if any, to Borrower. In connection with any disposition of
the Collateral or Properties, Borrower shall remain liable to Secured Party for
the payment of any deficiency with interest at the highest rate provided for
herein (to the extent permitted by applicable law) and all costs and expenses of
collection or enforcement, including reasonable attorneys' fees and legal
expenses. In applying any proceeds to any obligation secured by purchase money
security interest, the Secured Party shall use the "first-in-first-out" method
of allocation.
7.5 Required Notice of Sale. In exercising its rights, powers and
-----------------------
remedies as a secured party, Secured Party agrees to give Borrower ten (10)
days' notice of the time and place of any public sale of Collateral or of the
time after which any private sale of Properties or Collateral may take place,
unless such Collateral is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market. Borrower agrees that
such period and notice is commercially reasonable under the circumstances.
8. POST-DEFAULT POWER OF ATTORNEY. Borrower hereby irrevocably
------------------------------
constitutes and appoints Secured Party, acting through any officer or agent
thereof, with full power of substitution, as Borrower's true and lawful
attorney-in-fact with full irrevocable power and authority in Borrower's place
and stead and in Borrower's name or in its own name, from time to time in
Secured Party's discretion on and after the occurrence of an Event of Default,
to receive, open and dispose of mail addressed to Borrower, to take any and all
action, to do all things, to execute, endorse, deliver and file any and all
writings, documents, instruments, notices, statements (including financing
statements, and writings to correct any error or ambiguity in any Loan
Document), applications and registrations (including registrations and licenses
for securities, Copyrights, Patents, and Trademarks), checks, drafts,
acceptances, money orders, or other evidence of payment or proceeds, which may
be or become necessary or desirable in the sole discretion of Secured Party to
accomplish the terms, purposes and intent of this Loan
33
Agreement and the other Loan Documents, including the right to appear in and
defend any action or proceeding brought with respect to the Collateral or
Properties, and to bring any action or proceeding, in the name and on behalf of
Borrower, which Secured Party, in its discretion, deems necessary or desirable
to protect its interest in the Collateral or Property. Said attorney or designee
shall not be liable for any acts of commission or omission, nor for any error of
judgment or mistake of fact or law, unless and then only to the extent that the
same constitutes its gross negligence or willful misconduct. This power is
coupled with an interest and is irrevocable.
9. HEIRS, SUCCESSORS AND ASSIGNS. The terms of this Loan Agreement, the
-----------------------------
Notes, the Mortgages and of the other Loan Documents shall bind and inure to the
benefit of the heirs, successors and assigns of the parties. The foregoing
sentence shall not be construed to permit Borrower to assign the Loan except as
otherwise permitted under the Loan Documents. Secured Party and any successor
may, at any time, sell, transfer, or assign the Loan Agreement, the Notes, the
Mortgages and the other Loan Documents, and any or all servicing rights with
respect thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"). Secured Party
----------
may forward to each purchaser, transferee, assignee, servicer, participant,
investor in such Securities or any rating agency (a "Rating Agency") rating such
-------------
Securities (all of the foregoing entities collectively referred to as an
"Investor") and each prospective Investor, all documents, financial and other
--------
information which Secured Party now has or may hereafter acquire relating to (a)
the Loan; (b) the Properties and their operation (including, without limitation,
copies of all leases, subleases or any other agreements concerning the use and
occupancy of the Properties); and/or (c) any party connected with the Loan
(including, without limitation, Borrower, any partner or member of Borrower, any
constituent partner or member of Borrower, and any guarantor). In connection
with such Securities, Borrower further agrees that the Loan Documents shall be
sufficient evidence of the obligations of Borrower to each Investor, and
Borrower shall, within fifteen (15) days after request by Secured Party, deliver
an estoppel certificate verifying for the benefit of Secured Party and any other
party designated by Secured Party the status and the terms and provisions of the
Loan in form and substance acceptable to Secured Party, and enter into such
amendments or modifications to the Loan Documents as may be reasonably required
in order to facilitate the Securities without impairing Borrower's rights or
increasing Borrower's obligations. The representations, warranties,
obligations, covenants, and indemnity obligations of Borrower under the Loan
Documents shall also benefit and apply with respect to any purchaser,
transferee, assignee, servicer, participant or investor.
10. INDEMNIFICATION. Borrower hereby saves, indemnifies and holds Secured
---------------
Party, its agents, representatives, directors, employees and counsel
(collectively, "Indemnified Party") harmless from and against all expenses,
actions, judgments, suits, costs, liabilities, obligations, losses, penalties or
damages of any kind or nature, including attorneys' fees and expenses, imposed
on, asserted against, suffered or incurred by an Indemnified Party in any way
relating to, or arising out of or in connection with this Loan Agreement, the
Notes, the Mortgages, the Loan Documents, the Obligations or the transactions
contemplated hereby or thereby. Without limiting the foregoing, Borrower will
pay to Indemnified Party all expenses
34
(including reasonable expenses for legal services of every kind) of, or
incidental to, the negotiation of, entering into and enforcement of any of the
provisions hereof and of any of the Obligations, and any actual or attempted
sale, lease or other disposition of, and any exchange, enforcement, collection,
compromise or settlement of any of the Collateral and receipt of the proceeds
thereof, and for the care of the Properties and Collateral and defending or
asserting the rights and claims of Indemnified Party in respect thereof, by
litigation or otherwise, including expense of insurance, and all such expenses
shall constitute Obligations. Borrower shall indemnify and hold Indemnified
Party harmless from and against any and all losses, claims, damages,
liabilities, costs or expenses imposed on, incurred by or asserted against any
of them in connection with any litigation, investigation, claim or proceeding
commenced or threatened related to the negotiation, preparation, execution,
delivery, enforcement, performance or administration of this Loan Agreement, the
Notes, the Mortgages, any other Loan Documents, any other Obligation or any
undertaking or proceeding related to any of the transactions contemplated hereby
or any act, omission, event or transaction related or attendant thereto,
including, without limitation, amounts paid in settlement, court costs, and the
reasonable fees and expenses of counsel, but excluding any such losses, claims,
damages, liabilities, costs and expenses directly caused to be incurred by
reason of the gross negligence or willful misconduct of the person otherwise to
be indemnified and held harmless under this Section, as determined by a final,
non-appealable judgment of a court of competent jurisdiction. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in this Section
may be unenforceable because it violates any law or public policy, Borrower
shall pay the maximum portion which it is permitted to pay under applicable law
to Indemnified Party in satisfaction of indemnified matters under this Section.
The foregoing indemnity shall survive the payment of the Obligations and the
termination or non-renewal of this Loan Agreement.
11. OBLIGATIONS AND SECURITY INTEREST ABSOLUTE. The Obligations are
------------------------------------------
absolute, unconditional and irrevocable and will be paid or satisfied strictly
in accordance with their respective terms under all circumstances whatsoever,
including: the invalidity or unenforceability of all or any of, or any part of,
this Loan Agreement, the Notes or any other Loan Document, or any consent,
waiver, amendment or modification thereof; the existence of any claim, setoff,
defense or other right which Borrower may have at any time against Secured
Party, or any other Person, whether in connection with this Loan Agreement, any
other Loan Documents, the transactions contemplated hereby, thereby or otherwise
all of which Borrower hereby waives to the maximum extent permitted by law; or
the loss, theft, damage, destruction or unavailability of the Collateral to
Borrower for any reason whatsoever, it being understood and agreed that Borrower
retains all liability and responsibility with respect to the Collateral. All
rights of the Secured Party and the security interests hereunder shall be
absolute and unconditional irrespective of: (a) any change in the time, manner,
amount or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from the Notes or any other Loan Document; (b) any exchange, release or
nonperfection of all or any part of the Collateral or any other collateral, or
any release from, amendment to, waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or (c) to the fullest extent
permitted by law, any other circumstances which might otherwise constitute a
defense available to, or a discharge of, the Borrower or a third party pledgor.
35
12. ASSIGNMENT. Secured Party's assignee shall, to the extent of the
----------
assignment, be vested with all the powers and rights of Secured Party hereunder
(including those granted under Sections 7 and 8 hereof or otherwise with respect
to the Collateral), and to the extent of such assignment the assignee may fully
enforce such rights and powers as a secured party and all references to Secured
Party shall mean and refer to such assignee. Secured Party shall retain all
rights and powers hereby given not so assigned, transferred and/or delivered.
Without limiting the foregoing, Borrower understands and agrees that Secured
Party 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 Notes, this Loan Agreement and the other 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 Notes.
Borrower may not, in whole or in part, directly or indirectly, assign this Loan
Agreement or any other Loan Document or its rights hereunder or thereunder or
delegate its duties hereunder or thereunder without, in each instance, the
specific prior written consent of Secured Party, which consent may be withheld
or delayed in Secured Party's sole discretion, and payment of the amounts
required under and compliance with the terms of the Notes and other Loan
Documents; if Secured Party shall in its sole discretion consent to such
assignment, Borrower shall pay to Secured Party an assignment fee in an amount
equal to one percent (1%) of all outstanding Obligations, plus all of Secured
Party's costs and expenses (including the reasonable fees of Secured Party's
attorneys) in connection with such assignment. For purposes of this Loan
Agreement, a Transfer (as defined in the Mortgages) shall constitute an
assignment hereof and shall be an Event of Default under Section 6.1.1 hereof.
13. FURTHER ASSURANCES. Borrower agrees, at any time and from time to
------------------
time, at Borrower's sole cost and expense, to obtain, procure, execute and
deliver, file and affix or cause to be obtained, procured, executed, delivered,
filed and affixed such further agreements, bills of sale and assignments,
instruments, documents, warehouse receipts, bills of lading, vouchers, invoices,
notices, statements, writings (including financing statements, and writings to
correct any error or ambiguity in any Loan Document), powers (including stock
and bond powers, and powers of attorney), tax stamps and information, and to do
or cause to be done all such further acts and things (including the execution,
delivery and filing of financing statements, payment of filing fees and
transfer, gains and recording taxes) and do and cause to be done all such other
acts as Secured Party may reasonably request, from time to time, in its
discretion. Without limiting the foregoing, Borrower authorizes Secured Party to
the extent permitted under the UCC to file this Loan Agreement or a copy hereof,
and the same shall be sufficient as a financing statement, and to execute and
file, or file without Borrower's signature, any and all financing statements,
amendments thereto and continuations thereof as Secured Party deems necessary or
appropriate and Borrower shall pay and indemnify Secured Party for and hold
Secured Party harmless from any and all costs and expenses in connection
therewith. Borrower further agrees that it will promptly notify Secured Party of
and, subject to Section 15.1 hereof, agree to correct any defect, error or
omission in the contents of any of the Loan Documents or in the execution,
delivery or acknowledgment thereof. The Borrower further agrees to execute, from
time to time, prior to or within three (3) months of the date hereof, and
otherwise promptly
36
following Secured Party's request, a Form 4506 Request for Copy of Transcript of
Tax Form or its successor form.
14. TERM.
----
This Loan Agreement shall be immediately in full force and effect as a
security agreement under the UCC upon Borrower's execution below, whether or not
it is signed by Secured Party. Upon indefeasible payment in full of the
Obligations in cash in accordance with the terms hereof, this Loan Agreement and
the security interested granted hereunder shall terminate and Secured Party, at
Borrower's expense, shall within a reasonable time following Borrower's request
execute and deliver to Borrower the proper instruments (including UCC
termination statements) acknowledging the termination of the security interest,
and will transfer (without recourse, representation or warranty) such Collateral
as may be in Secured Party's possession, and which is not to be retained, sold,
or otherwise applied or released pursuant to this Loan Agreement, to Borrower,
except that the provisions of Sections 2.22, 2.24, 2.39 and 10 hereof shall
survive indefinitely. No termination of this Loan Agreement or the other Loan
Documents shall relieve or discharge Borrower of its respective duties,
obligations and covenants under this Loan Agreement or the other Loan Documents
until all Obligations have been fully and finally discharged and paid in full in
cash, and Secured Party's continuing security interest in the Collateral and the
rights and remedies of Secured Party hereunder, under the other Loan Documents
and applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid in cash.
15. MISCELLANEOUS.
-------------
15.1 Entire Agreement. THIS LOAN AGREEMENT REPRESENTS THE FINAL
----------------
AGREEMENT BETWEEN BORROWER AND SECURED PARTY AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF BORROWER AND
SECURED PARTY. BORROWER UNDERSTANDS AND AGREES THAT ORAL AGREEMENTS AND ORAL
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT ARE NOT ENFORCEABLE. BORROWER ACKNOWLEDGES AND AGREES THERE ARE NO
ORAL AGREEMENTS BETWEEN BORROWER AND SECURED PARTY. This Loan Agreement and the
Loan Documents represent the entire understanding of Secured Party and Borrower
with respect to the transactions contemplated hereby and thereby. None of the
terms or provisions of this Loan Agreement or any other Loan Document may be
waived, altered, modified, or amended except in each instance by a specific
written instrument duly executed by Secured Party. Any such waiver shall be
enforceable only to the extent specifically set forth therein. A waiver by
Secured Party of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Secured Party would otherwise have on any future occasion, whether similar in
kind or otherwise. Without limiting the foregoing, no action or omission to act
shall be deemed to be a consent, authorization, representation or agreement of
Secured Party, under the UCC or otherwise, unless, in each instance, the same is
in a specific writing signed by Secured Party. The inclusion of Collateral
Revenues and Proceeds in the
37
Collateral does not and shall not be deemed to authorize Borrower to sell,
exchange of dispose the Collateral or the Principal Agreements or otherwise use
the Collateral in any manner not otherwise specifically authorized herein.
15.2 Notices. All notices and other communications given pursuant to
-------
or in connection with this Loan Agreement shall be in duly executed writing
delivered to the parties at the addresses set forth below (or such other address
as may be provided by one party in a notice to the other):
If to Secured Party:
Convenience Store Finance Company, LLC
00000 Xxxxxxxx Xxxxxxxxx
00/xx/ Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
With a Copy To:
Credit Suisse First Boston Mortgage Capital LLC
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxx
Facsimile No.: (000) 000-0000 and (000) 000-0000
and: Stroock & Stroock & Xxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Borrower, to Borrower's chief executive office,
as represented to by Borrower herein, with a copy to:
The Law Firm of Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxxx Xxxx.
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
with a copy to:
Atlantic Richfield Company
0 Xxxxxxxxxxxx Xxxxx, XXX 0-000
00
Xx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Manager, Real Estate and Dealer Acquisitions
Facsimile No.: (000) 000-0000
Notice delivered in accordance with the foregoing shall be effective (i) when
delivered, if delivered personally or by receipted-for telex, telecopier or
facsimile transmission, (ii) one (1) day after being delivered in the United
States (properly addressed and all fees paid) for overnight delivery service to
a courier (such as Federal Express) which regularly provides such service and
regularly obtains executed receipts evidencing delivery or (iii) five (5) days
after being sent by registered or certified mail, postage prepaid, return
receipt requested.
15.3 Sole Discretion of Secured Party; Reasonableness. Except as may
------------------------------------------------
otherwise be expressly provided to the contrary, wherever pursuant to the Notes,
the Mortgage, this Loan Agreement, or any other document or instrument now or
hereafter executed and delivered in connection therewith or otherwise with
respect to the Loan secured hereby, Secured Party exercises any right given to
Secured Party to consent or not consent, or to approve or disapprove, or any
arrangement or term is to be satisfactory to Secured Party, the decision of
Secured Party to consent or not consent, or to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory, shall be
in the sole and absolute discretion of Secured Party, as applicable, and shall
be final and conclusive. If at any time Borrower believes that Secured Party has
not acted reasonably in granting or withholding any approval or consent under
the Notes, the Mortgages, this Loan Agreement, or any other Loan Document or
otherwise with respect to the Obligations, as to which approval or consent
either Secured Party has expressly agreed to act reasonably, or absent such
agreement, a court of law having jurisdiction over the subject matter would
require Secured Party to act reasonably, then Borrower's sole remedy shall be to
seek injunctive relief or specific performance and no action for monetary
damages or punitive damages shall in any event or under any circumstance be
maintained by Borrower against Secured Party. Secured Party shall not have any
liability to Borrower (whether in tort, contract, equity or otherwise) for
losses suffered by Borrower in connection with, arising out of, or in any way
related to the transactions or relationships contemplated by this Loan
Agreement, or any act, omission or event occurring in connection herewith,
unless and only to the extent that it is determined by a final and non-
appealable judgment or court order binding on Secured Party, that the losses
were the result of acts or omissions by Secured Party constituting gross
negligence or willful misconduct. In any such litigation, Secured Party shall be
entitled to the benefit of the rebuttable presumption that it acted in good
faith and with the exercise of ordinary care in the performance by it of the
terms of this Loan Agreement.
15.4 Recovery of Sums Required To Be Paid. Secured Party shall have
------------------------------------
the right from time to time to take action to recover any sum or sums which
constitute a part of the Obligations as the same become due, without regard to
whether or not the balance of the Obligations shall be due, and without
prejudice to the right of Secured Party thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Borrower existing
at the time such earlier action was commenced.
39
15.5 WAIVERS. BORROWER HEREBY MAKES AND ACKNOWLEDGES THAT IT MAKES ALL
-------
OF THE WAIVERS SET FORTH IN THIS LOAN AGREEMENT, THE NOTES, THE MORTGAGES AND
THE OTHER LOAN DOCUMENTS KNOWINGLY, INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS,
AND ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH
ITS ATTORNEY; BORROWER FURTHER ACKNOWLEDGES THAT SUCH WAIVERS ARE A MATERIAL
INDUCEMENT TO SECURED PARTY TO MAKE THE LOAN TO BORROWER AND THAT SECURED PARTY
WOULD NOT HAVE MADE THE LOAN WITHOUT SUCH WAIVERS; AND BORROWER HEREBY MAKES AND
ACKNOWLEDGES THAT IT MAKES SUCH WAIVERS WITH RESPECT TO EACH OTHER LOAN
DOCUMENT.
15.6 WAIVER OF TRIAL BY JURY. BORROWER HEREBY IRREVOCABLY AND
-----------------------
UNCONDITIONALLY WAIVES, AND SECURED PARTY BY ITS ACCEPTANCE OF THE NOTES AND
THIS LOAN AGREEMENT AND OTHER LOAN DOCUMENTS IRREVOCABLY AND UNCONDITIONALLY
WAIVES, ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT OR COUNTERCLAIM
ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE RELATING TO THE NOTE, THIS
SECURITY AGREEMENT, OR ANY OTHER LOAN DOCUMENT OR THE OBLIGATIONS.
15.7 Waiver of Notices. Borrower hereby expressly waives demand,
-----------------
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and commercial paper, included in or evidencing any
of the Obligations, the Properties or the Collateral, and any and all other
demands and notices of any kind or nature whatsoever with respect to the
Obligations, the Properties, the Collateral and this Loan Agreement and any Loan
Documents, except such as are expressly provided for herein. No notice to or
demand on Borrower which Secured Party may elect to give shall entitle Borrower
to any other or further notice or demand in the same, similar or other
circumstances. Without limiting the generality of the foregoing, Borrower
waives notice prior to Secured Party's taking possession or control of any of
the Properties or the Collateral or any bond or security which might be required
by any court prior to allowing Secured Party to exercise any of Secured Party's
remedies, including the issuance of an immediate writ of possession and the
benefit of all valuation, appraisement and exemption laws.
15.8 Relationship. The relationship of Secured Party to Borrower
------------
hereunder is strictly and solely that of secured commercial lender on the one
hand and commercial borrower on the other in a commercial transaction and
nothing contained in the Notes, the Mortgages, this Loan Agreement or any other
Loan Document or otherwise in connection with the Obligations is intended to
create, or shall in any event or under any circumstance be construed as
creating, a partnership, joint venture, tenancy-in-common, joint tenancy or
other relationship of any nature whatsoever between Secured Party and Borrower
other than as secured commercial lender on the one hand and commercial borrower
on the other in a commercial transaction.
40
15.9 Waiver of Counterclaims. Borrower waives all rights to interpose
-----------------------
any claims, deductions, setoffs or counterclaims of any nature (other then
compulsory counterclaims) in any action or proceeding brought by Secured Party
with respect to this Loan Agreement, any other Loan Documents, the Obligations,
the Collateral or any matter arising therefrom or relating hereto or thereto.
15.10 No Conflict with Principal Agreements. This Loan Agreement and
-------------------------------------
the rights (including the remedies) granted and the duties imposed hereunder are
not intended to conflict with or contravene the Principal Agreements.
15.11 Time is of the Essence. For all payments to be made and all
----------------------
obligations to be performed under the Loan Documents, time is of the essence.
15.12 Limitation on Interest. NOTWITHSTANDING ANY OTHER PROVISION
----------------------
HEREOF, IN NO EVENT SHALL THE AMOUNT OR RATE OF INTEREST (INCLUDING TO THE
EXTENT APPLICABLE ANY DEFAULT RATE INTEREST OR LATE PAYMENT CHARGES) PAYABLE,
CONTRACTED FOR, CHARGED OR RECEIVED UNDER OR IN CONNECTION WITH THE NOTES OR ANY
OTHER LOAN DOCUMENT, FROM TIME TO TIME OR FOR WHATEVER REASON, EXCEED THE
MAXIMUM RATE OR AMOUNT, IF ANY, SPECIFIED BY APPLICABLE LAW. If from any
circumstance whatsoever, fulfillment of any provision hereof or of such other
Loan Documents or other documents or obligations at the time performance of such
provision shall be due, shall involve transcending the limit of validity
proscribed by law, then, ipso facto, the obligation to be fulfilled shall be
---- -----
reduced to the limit of such validity, and if from any such circumstance Secured
Party shall ever receive an amount deemed interest by applicable law which shall
exceed the highest lawful rate, such amount which would be excessive interest
shall be applied to the reduction of the principal amount owing Thereunder or on
account of any other principal indebtedness of the Borrower to Secured Party,
and not to payment of interest or if such excessive interest exceeds the unpaid
balance of such principal amount and such other indebtedness, or if Secured
Party is prohibited by applicable law from applying such excessive interest to
the reduction of such principal amount or on account of any other indebtedness,
the excess shall be refunded to Borrower. All sums paid or agreed to be paid by
the Borrower for the use, forbearance or detention of the indebtedness of the
Borrower to Secured Party shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the actual rate of interest on
account of such indebtedness is uniform though the term hereof. The terms and
provisions of this paragraph shall control and supersede every other provision
of all agreements between the Borrower and Secured Party and all obligations of
Borrower to Secured Party.
15.13 Governing Law; Binding Effect. THIS SECURITY AGREEMENT SHALL BE
-----------------------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK;
provided, however, the parties agree that the states listed on SCHEDULE 2.14
-------- -------
hereto are the proper places to file financing statements with respect to the
Collateral and the laws of such states govern the perfection and the effect of
perfection or non-perfection of security interests in all collateral in which a
security interest is perfected by
41
filing a financial statement under the Uniform Commercial Code. This Loan
Agreement shall be binding upon Borrower, and the heirs, devisees,
administrators, executives, personal representatives, successors, receivers,
trustees, and (without limiting Section 12 hereof) assigns, including all
successors in interest of Borrower in and to all or any part of the Collateral,
and shall inure to the benefit of Secured Party, and the successors and assigns
of Secured Party. Borrower and Secured Party irrevocably consent and submit to
the non-exclusive jurisdiction of (a) any state or federal court sitting in the
state of New York, over any suit, action or proceeding, arising out of or
relating to this Loan Agreement, the Mortgage, the Notes or the Loan; and (b)
any state court sitting in the county of the state where the Premises are
located with respect to any suit, proceeding or action instituted therein
arising under this Loan Agreement or any of the other Loan Documents or in any
way connected with or related or incidental to the dealings of the parties
hereto in respect of this Loan Agreement, the Notes, the Mortgages or any of the
other Loan Documents or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agree that any dispute with respect to any such matters shall
be heard only in the courts described above (except that Secured Party shall
have the right to bring any action or proceeding against Borrower or its
property in the courts of any other jurisdiction which Secured Party deems
necessary or appropriate in order to realize on the Collateral or to otherwise
enforce its rights against Borrower or its property). Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that Borrower may
now or hereafter have to the laying of venue of any such suit, action, or
proceeding brought in any such court and any claim that any such suit, action,
or proceeding brought in any such court has been brought in an inconvenient
forum. Borrower hereby waives personal service of any and all process upon it
and consents that all such service of process may be made by certified mail
(return receipt requested) directed to its address set forth on the signature
pages hereof and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, properly
addressed and postage prepaid, or, at Secured Party's option, by service upon
Borrower in any other manner provided under the rules of any such courts. Within
thirty (30) days after such service, Borrower shall appear in answer to such
process, failing which Borrower shall be deemed in default and judgment may be
entered by Secured Party against Borrower for the amount of the claim and other
relief requested.
15.14 Severability. Whenever possible this Loan Agreement, the Notes,
------------
the Mortgages and each other Loan Document and each provision hereof and thereof
shall be interpreted in such manner as to be effective, valid and enforceable
under applicable law. If and to the extent that any such provision shall be held
invalid and unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provisions hereof or
thereof, and any determination that the application of any provision hereof or
thereof 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.
15.15 Counterparts; Captions; Construction. This Loan Agreement and
------------------------------------
each other Loan Document may be executed in counterpart, each of which shall be
an original and all of which taken together shall be and be deemed to be one and
the same instrument. The
42
headings, titles and captions used herein are for convenience only and shall not
affect the construction of this Loan Agreement or any term or provision hereof.
The inclusion of an example by way of illustration such as a parenthetical
("including . . .") shall not be construed as or deemed a limitation on the
generality of the general text to which it refers. The terms Borrower and
Secured Party shall include heirs, devisees, executors, administrators, personal
representatives, successors, receivers, trustees and assigns. The liability of
all Persons comprising or constituting Borrower under this Loan Agreement and
each other Loan Document shall be joint and several.
43
IN WITNESS WHEREOF, Secured Party and Borrower have caused these
presents to be duly executed as of the day and year first above written.
SECURED PARTY BORROWER
------------- --------
CONVENIENCE STORE FINANCE COMPANY, LLC, LLO-GAS, INC.,
a Delaware limited liability company a Delaware corporation
By: /s/ [illegible]
------------------------------------
Name: By: /s/ Xxxx Xxxxxxxxxxx
Title: -------------------------------
Name:
Title:
Address: Chief Executive Office:
------- ----------------------
00000 Xxxxxxxx Xxxxxxxxx
21/st/ Floor 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxx, XX 00000
44
DEFINITIONS SCHEDULE
--------------------
"Accounts" shall have the meaning accorded to such term in the UCC and
--------
shall include all present and future rights of Borrower to payment for goods
sold or leased or for services rendered, which are not evidenced by instruments
or chattel paper, and whether or not earned by performance, including, without
limitation, Credit Card Receivables.
"Affiliate", when used with any specified Person, means (i) any Person who
---------
controls, is controlled by, or is under common control with, such Person, (ii)
any Person who is a director or officer of, partner in, trustee of, or blood or
legal relative, guardian or representative of the specified Person, or any
Person who acts or serves in a similar capacity with respect to the specified
Person, (iii) any Person of which or whom the specified Person is a director or
officer, partner, trustee, or blood or legal relative, guardian or
representative, or with respect to which or whom, the specified Person acts or
serves in a similar capacity; (iv) any Person, who, directly or indirectly, is
the legal or beneficial owner of or controls 5% or more of any class of equity
securities of the specified Person, and (v) any Person who is an Affiliate as
defined in clauses (i), (ii), (iii) or (iv) of an Affiliate of the specified
Person.
"Appraisal" shall mean the appraisal of Borrower's Business and Collateral
---------
prepared by the Appraisers.
"Appraised Value" shall mean an amount equal to the value of Borrower's
---------------
Business and Collateral as set forth in the Appraisal obtained in connection
with the origination of the Loan.
"Appraisers" shall mean Deloitte & Touche LLP or PriceWaterhouseCoopers,
----------
LLP.
"Borrower's Corporate Operations" shall have the meaning accorded such term
-------------------------------
in Section 2.8 of the Loan and Security Agreement.
"Business" shall have the meaning accorded to such term in Section 2.2 of
--------
the Loan and Security Agreement.
"Collateral" shall have the meaning accorded to such term in Section 1 of
----------
the Loan and Security Agreement.
"Collateral Revenues" shall have the meaning accorded to such term in
-------------------
Section 1 of the Loan and Security Agreement.
"Commitment" shall mean the commitment letter and term sheet with respect
----------
to the Loan signed by Borrower and Secured Party.
"Copyrights" shall mean all United States or other registered and
----------
unregistered copyrights, all licenses thereto, and all applications therefor,
and all reissues, divisions, continuations,
45
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.
"County" shall mean the county, parish, city or recording district where
------
financing statements are filed under the UCC with respect to security interests
in personal property (including fixtures).
"Credit Card Acknowledgments" shall mean, individually and collectively,
---------------------------
the agreements by Credit Card Issuers or Credit Card Processors who are parties
to Credit Card Agreements in favor of Secured Party acknowledging Secured
Party's first priority security interest in the monies due and to become due to
Borrower (including, without limitation, credits and reserves) under the Credit
Card Agreements, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
"Credit Card Agreements" shall mean all agreements now or hereafter entered
----------------------
into by Borrower with any Credit Card Issuer or any Credit Card Processor, as
the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
"Credit Card Issuer" shall mean any person (other than Borrower) who issues
------------------
or whose members issue credit cards, including, without limitation, MasterCard
or VISA bank credit or debit cards or other bank credit or debit cards, and
American Express, Discover, Diners Club, Xxxxx Xxxxxxx and other non-bank credit
or debit cards.
"Credit Card Processor" shall mean any servicing or processing agent or any
---------------------
factor or financial intermediary who facilitates, services, processes or manages
the credit authorization, billing transfer and/or payment procedures with
respect to any of Borrower's sales transactions involving credit card or debit
card purchases by customers using credit cards or debit cards issued by any
Credit Card Issuer.
"Credit Card Receivables" shall mean all Accounts consisting of the present
-----------------------
and future rights of Borrower to payment for Inventory sold and delivered to
customers who have purchased such goods using a credit card or a debit card
issued by a Credit Card Issuer.
"Current Filings" shall have the meaning accorded to such term in Section
---------------
2.10 of the Loan and Security Agreement.
"Defeasance Option" shall have the meaning accorded such term in the Note.
-----------------
"DSCR" shall mean with respect to any Person, as of the date of
----
determination for any period, the quotient of (x) Cash Flow of such Person for
such period divided by (y) the aggregate of all regularly scheduled principal
payments on all Indebtedness made or to be made by such Person for such period
in accordance with GAAP. For purposes of this definition, "Cash Flow"
46
shall mean for any period for any Person an amount equal to the difference of
(1) the sum of (a) net income, plus (b) depreciation, plus (c) amortization,
plus (d) interest expense, plus (e) taxes, plus (f) Non-Recurring Expenses plus
(g) Discretionary Expenses, minus (2) the sum of (a) Non-Recurring Income, plus
(b) Discretionary Income, all as reflected on the financial statement for such
Person in accordance with GAAP.
"Default Rate" shall have the meaning accorded to such term in the Note.
------------
"Discretionary Expenses and Discretionary Income" shall mean for any
-----------------------------------------------
period, the expenses or income, as the case may be, that are at the discretion
of a Person and are generally not required in any period or reasonably
anticipated in any subsequent period in order to maintain then-current levels of
Cash Flow in each case as determined by the Secured Party in its sole
discretion.
"Environmental Laws" shall mean all federal, state, district, local and
------------------
foreign laws, rules, regulations, ordinances, and consent decrees relating to
health, safety, hazardous substances, pollution and environmental matters, as
now or at any time hereafter in effect, applicable to Borrower's business and
facilities (whether or not owned by it), including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or hazardous, toxic or dangerous substances, materials or wastes into
the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or otherwise relating to the
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes.
"Equipment" shall have the meaning accorded to such term in the UCC and
---------
shall include all goods used or bought for use primarily in the Business and not
included within the Inventory, including machines, computers, fixtures,
furnishings, furniture, appliances, vehicles, tools, and supplies, and the like
employed in connection with the Business, together with all present and future
additions, attachments, accessions thereto, all replacements, improvements and
betterments thereof and all substitutions therefor.
"ERISA" shall mean Employee Retirement Income Security Act of 1974, as
-----
amended.
"Event of Default" shall have the meaning accorded to such term in Section
----------------
6 of the Loan and Security Agreement.
"FCCR" shall mean, with respect to any Person, as of the date of
----
determination for any period, the quotient of (x) Cash Flow of such Person for
such period divided by (y) the sum of the aggregate of all (i) regularly
scheduled principal payments on all Indebtedness and (ii) regularly scheduled
payments of Lease Obligations, made or to be made by such Person for such period
in accordance with GAAP. As used in this definition, "Cash Flow" shall mean for
any period for any Person an amount equal to the difference of (1) the sum of
(a) net income, plus (b)
47
depreciation, plus (c) amortization, plus (d) interest expense, plus (e) taxes,
plus (f) regularly scheduled payments of Lease Obligations, plus (g) Non-
Recurring Expenses, plus (h) Discretionary Expenses, minus (2) the sum of (a)
Non-Recurring Income plus (b) Discretionary Income, all as reflected on the
financial statement for such Person in accordance with GAAP.
"Financing Statements" shall mean the financing statements on Form UCC-1,
--------------------
copies of which are attached as EXHIBIT H to the Loan and Security Agreement.
---------
"GAAP" shall mean generally accepted accounting principles in the United
----
States of America as in effect from time to time as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Boards which are applicable to the circumstances
as of the date of determination consistently applied on and after the date
hereof.
"General Intangibles" shall have the meaning accorded to such term in the
-------------------
UCC and shall include agreements, contracts, writings, memoranda, confirmations,
passbooks, signature cards, acknowledgments, understandings, contract rights,
licenses, leases, permits, filings, consents, and approvals, and all puts,
calls, options, warrants, and securities, and all tax and duty refunds, and all
security interests, Patents, inventions, processes, lists (including customer
and suppliers lists), methods, and information (including proprietary
information, member lists and information concerning members, sales, business,
financial, accounting, forecasts, projections, media, and other information),
know-how, software, programs, plans, data, blueprints, designs, drawings,
surveys, notices, Copyrights, Trademarks, trade names, trade secrets, service
marks, service names, logos and goodwill, going concern value, and market share
value and all recordings and registrations thereof, applications for recording
or registration, renewals, modifications, supplements, reissues, continuations,
extensions, divisions thereof and rights corresponding thereto, and all manuals,
standards, practices, mail, advertisements, files, reports, books, catalogs,
records, journals, invoices, and bills, and all rights (including voting rights,
rights to receive notice or to consent, rights to payment, interest, dividends,
distributions or earnings, rights to xxx and enforce), powers (including powers
of attorney), privileges, benefits, and remedies relating thereto or arising in
connection therewith.
"Goods" shall have the meaning accorded to such term in the UCC and shall
-----
include (i) all Inventory and (ii) all Equipment.
"Indebtedness" shall mean all indebtedness (including reimbursement,
------------
subrogation, or contribution obligations and any other indebtedness assumed or
guaranteed) in respect of money borrowed, whether evidenced by a note (including
the Note) or other like written obligation to pay money, or deferred purchase
price or constituting capitalized lease obligation or otherwise and will include
all obligations and accruals to the extent due and payable or incurred outside
the ordinary course of business).
48
"Independent Accountant" shall mean a "Big 6" firm of independent
----------------------
accountants.
"Inventory" shall have the meaning accorded to such term in the UCC and
---------
shall include all goods held by Borrower for sale or lease or to be furnished
under contracts of service, all goods so furnished by Borrower, all raw
materials and work in process, and all materials used or consumed in Borrower's
Business and all documents of title covering any inventory.
"Leases" shall mean the Leases included on the INFORMATION SCHEDULE to the
------
Loan and Security Agreement and any Master Lease, as defined in the Mortgage.
"Lease Obligations" shall mean Personal Property Lease Obligations having
-----------------
an original term of in excess of twelve (12) months and Real Property Lease
Obligations.
"Lien" shall mean with respect to any asset, (i) any mortgage, lien,
----
pledge, encumbrance, charge or security interest in or on such asset, (ii) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset, (iii) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities or (iv) any other right of or arrangement with
any creditor to have such creditor's claim satisfied out of such assets, or the
proceeds therefrom, prior to the general creditors of the owner thereof.
"Local Banks" shall mean the banks at which Borrower maintains deposit-only
-----------
accounts for each of its Properties.
"Loan" shall have the meaning accorded to such term in the Preliminary
----
Statement to the Loan and Security Agreement.
"Loan Documents" shall mean the Note, this Loan and Security Agreement and
--------------
any Mortgage, assignment of lease or other instrument, agreement, guaranty
document, certificate or other writing (including the Master Term Loan
Application submitted by Borrower to Secured Party and any commitment issued in
connection therewith), now or hereafter executed and delivered in connection
with the Obligations, as the same may be modified, amended, consolidated,
continued or extended, from time to time.
"Margin Stock" shall have the meaning accorded to such term in Regulation G
------------
of the Federal Reserve Board.
"Maximum Loan Amount" shall mean an amount equal to seventy (70%) percent
-------------------
of the Appraised Value.
"Minimum Consolidated FCCR" and "Minimum Consolidated DSCR" shall each have
------------------------- -------------------------
the meaning accorded to such term in Section 2.8 of the Loan and Security
Agreement.
49
"Minimum Corporate FCCR" and "Minimum Corporate DSCR" shall each have the
---------------------- ----------------------
meaning accorded such term in Section 2.8 of the Loan and Security Agreement.
"Minimum Unit Level FCCR" and "Minimum Unit Level DSCR" shall each have the
----------------------- -----------------------
meaning accorded to such term in Section 2.8 of the Loan and Security Agreement.
"Mortgages" shall mean real property and leasehold mortgages and/or deeds
---------
of trust executed and delivered from time to time by Borrower to Secured Party
with respect to the Real Property and related assets of Borrower now owned or
hereafter acquired, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
--------
"1933 Act" shall mean the Securities Act of 1933, as amended.
--------
"Non-Recurring Expenses and Non-Recurring Income" shall mean for any
-----------------------------------------------
period, expenses or income, as the case may be, that are extraordinary and
generally not reflected in any prior period or reasonably anticipated to be
incurred or received in any subsequent period, in each case as determined by the
Secured Party in its sole discretion.
"Note" shall have the meaning accorded to such term in the Preliminary
----
Statement to the Loan and Security Agreement.
"Obligations" shall mean all of Borrower's Indebtedness, obligations and
-----------
liabilities of every kind, nature and description now or hereafter owing by
Borrower to Secured Party, including those evidenced by, arising under or in
connection with the Note including, without limitation, indebtedness,
obligations and liabilities in respect of principal, interest, this Loan and
Security Agreement, or any other Loan Document, and any future advances thereon,
renewals, extensions, modifications, amendments, substitutions and
consolidations thereof, or any other agreement with Secured Party, including
Borrower's obligations to pay (or reimburse Secured Party for) all costs and
expenses (including attorneys' fees and disbursements) incurred by Secured Party
in obtaining, maintaining, protecting and preserving its interest in the
Collateral or its security interest therein, foreclosing, retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral or in exercising its rights hereunder or as secured party under
the UCC, any other applicable law, regulation or rule or this Loan and Security
Agreement and all other indebtedness, obligations and liabilities of any kind of
Borrower to Secured Party, now or hereafter existing (including future advances
whether or not pursuant to commitment), arising directly between Borrower and
Secured Party or acquired outright, conditionally or as collateral security from
another, absolute or contingent, joint and/or several, secured, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, or direct or indirect, including Borrower's liabilities to Secured
Party as a member of any partnership, syndicate, association or other group, and
whether
50
incurred by Borrower as principal, surety, endorser, guarantor, accommodation
party or otherwise.
"Patents" shall mean 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.
"Payments to Affiliates" shall mean all dividends or distributions, all
----------------------
salaries, fees and other compensation, and all reimbursement or indemnification,
directly or indirectly, paid or payable to (or for the benefit of) any Affiliate
of Borrower, other than a Person who is an officer of Borrower and is not
otherwise an Affiliate of Borrower. Payment to Affiliates shall include any
payment or reimbursement of travel and entertainment expenses, automobiles
expenses, and premiums or expenses associated with any insurance policy other
than those expressly required to be maintained pursuant to Section 2.21 of the
Loan and Security Agreement.
"Permitted Encumbrances" shall have the meaning accorded to such term in
----------------------
Section 2.32 of the Loan and Security Agreement.
"Permitted Indebtedness" shall have the meaning accorded to such term in
----------------------
Section 2.33 of the Loan and Security Agreement.
"Permitted Transferee" shall mean any surviving ancestor, living descendent
--------------------
(adopted or natural), brother, sister, spouse, sister-in-law or brother-in-law
of the Person identified on the INFORMATION SCHEDULE annexed to this Loan and
Security Agreement.
"Person" shall mean any natural person, corporation, partnership,
------
association, firm, trust, limited liability company, or other entity or any
government, governmental agency or regulatory authority or instrumentality or
any subdivision thereof.
"Personal Property Lease Obligation" shall mean any obligations of a Person
----------------------------------
in connection with any leases for personal property, including Equipment, not
included in Indebtedness.
"Preliminary Statement" shall mean the paragraphs of this Loan and Security
---------------------
Agreement preceding Section 1 of the Loan and Security Agreement and captioned
"Preliminary Statement" of the Loan and Security Agreement.
"Principal Agreement" shall mean the meaning accorded to such term in
-------------------
Section 2.12 of the Loan and Security Agreement.
51
"Property" shall mean the meaning accorded to such term in Section 2.2 of
--------
the Loan and Security Agreement.
"Real Property" shall mean all now owned and hereafter acquired real
-------------
property of Borrower, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, and related assets as more
particularly described in the Mortgages.
"Real Property Lease Obligation" shall mean any obligations of a Person in
------------------------------
connection with any leases for real property not included in Indebtedness.
"Records" shall mean all of Borrower's present and future books of account
-------
and records of every kind or nature, purchase and sale agreements, invoices,
ledger cards, bills of lading and other shipping evidence, statements,
correspondence, memoranda, credit files and other data relating to the
Collateral or any account debtor, together with the tapes, disks, diskettes and
other data and software storage media and devices, file cabinets or containers
(in or on which the foregoing are stored (including any rights of Borrower with
respect to the foregoing maintained with or by any other person).
"Replacement Collateral" shall have the meaning accorded to such term in
----------------------
Section 2.31.2 of the Loan and Security Agreement.
"Servicer" shall mean the Servicer referred to in the Servicing Agreement
--------
and any successors, assigns and replacements therefor.
"Servicer Collection Account" shall mean the Collection Account established
---------------------------
pursuant to the Servicing Agreement, by and among the Secured Party, the
Servicer and certain other parties thereto, as amended, modified, supplemented
or replaced from time to time.
"Servicing Agreement" shall mean the Servicing Agreement, by and among the
-------------------
Secured Party, the Servicer and certain other parties thereto, as amended,
modified, supplemented or replaced from time to time.
"Securitization" shall mean 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 Loan (or Secured Party's rights and powers
therein), from time to time, to one or more of Secured Party's Affiliates or to
other Persons, including the sale of the Loan by Secured Party to one or more
Persons who will issue debt instruments or equity certificates backed by the
Loan and the servicing of such Loan by the Person appointed as servicer in
connection therewith.
"Specified Market" shall mean the market area described in the SPECIFIED
----------------
MARKET SCHEDULE to the Loan and Security Agreement.
52
"State" shall mean each state of location of any Property from which
-----
Borrower operates the Business.
"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, 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 in effect in the State of
---
Texas.
"UCC Search" shall mean the security interest, tax lien, suit and judgment
----------
search of Borrower conducted in any State and County.
53
LLO-GAS, INC.
INFORMATION SCHEDULE
LLO Fee "F" Convenience Loan
Unit Address City County State Zip Lease "L" Gas Store Amount
---- ------- ---- ------ ----- --- --------- --- ----- ------
---------------------------------------------------------------------------------------------------------------------------------
609 0000 X. Xxxxx Xx. Xxx Xxxxxxx Xxx Xxxxxxx XX 00000 F Arco AM/PM $ 975,000
---------------------------------------------------------------------------------------------------------------------------------
712 0000 X. Xxx Xxxxxxx Xx. Xxxxxxxx Xxx Xxxxxxx XX 00000 F Arco Arco $ 700,000
---------------------------------------------------------------------------------------------------------------------------------
5045 000 X. Xxxxxxxx Xx. Xxxxxxx Xxxxxxxx XX 00000 F Arco AM/PM $1,230,000
---------------------------------------------------------------------------------------------------------------------------------
5191 0000 Xxxxxxxxxx Xxx. Xxxxxxxxxxx Xxxx XX 00000 F Arco AM/PM $ 760,000
---------------------------------------------------------------------------------------------------------------------------------
5234 00000 Xxxxxxxxx Xxx Xxxxxxxxxxx Xxxx XX 00000 F Arco AM/PM $ 585,000
---------------------------------------------------------------------------------------------------------------------------------
5972 64200 20/th/ St./PO Box 000 X. Xxxx Xxxxxxx Xxxxxxxxx XX 00000 F Arco AM/PM $ 750,000
---------------------------------------------------------------------------------------------------------------------------------
999 000 Xxxxxxxx Xx. Xxxxxxx Xxxxx Xxxx XX 00000 F Arco AM/PM $ 300,000
---------------------------------------------------------------------------------------------------------------------------------
81633 00000 Xxxxxx Xxx. Xxxxxxx Xxx Xxxxxxxxxx XX 00000 F Arco AM/PM $2,500,000
---------------------------------------------------------------------------------------------------------------------------------
Total $7,800,000
==========
54
LLO-GAS, INC.
INFORMATION SCHEDULE
LLO Borrower Borrower Borrower Principal Chief Executive
Unit: Legal Name: Trade Name(s): Taxpaper I.D. No.: Agreement: Office Street:
----- ----------- -------------- ------------------ ---------- --------------
---------------------------------------------------------------------------------------------------------------------------------
609 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
712 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5045 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5191 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5234 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5972 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
999 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Independent 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
81633 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
LLO Chief Executive Chief Executive Chief Executive
Unit: Office City: Office County: Office State:
------ ------------ -------------- -------------
---------------------------------------------------------------
609 Malibu Los Angeles California
---------------------------------------------------------------
712 Malibu Los Angeles California
---------------------------------------------------------------
5045 Malibu Los Angeles California
---------------------------------------------------------------
5191 Malibu Los Angeles California
---------------------------------------------------------------
5234 Malibu Los Angeles California
---------------------------------------------------------------
5972 Malibu Los Angeles California
---------------------------------------------------------------
999 Malibu Los Angeles California
---------------------------------------------------------------
81633 Malibu Los Angeles California
---------------------------------------------------------------
55
LLO-GAS, INC.
INFORMATION SCHEDULE
Lease
LLO Chief Executive Account No. Type Lease Lease Remaining
Unit Office Zip: Local Bank: Deposit: Acquisitions: "L, GL, SL": Payment Expiration: Lease Term:
---- ----------- ----------- -------- ------------- ------------ ------- ----------- -----------
-------------------------------------------------------------------------------------------------------------------------------
609 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
712 90265 Bank of America Arco 1099 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
5045 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
5191 90265 Bank of America Arco 1099 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
5234 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
5972 0265 Bank of America Arco 1099 n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
999 265 Bank of America n/a n/a n/a n/a n/a
-------------------------------------------------------------------------------------------------------------------------------
81633 90265 Bank of America Time Out, LLC 00-00 x/x x/x x/x x/x
-------------------------------------------------------------------------------------------------------------------------------
LLO
Unit Record Owner:
---- ------------
------------------------------------------------
609 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
712 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5045 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5191 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5234 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5972 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
999 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
81633 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
56
LLO-GAS, INC.
INFORMATION SCHEDULE
[Cost before depreciation - [illegible]
Hazard
LLO Principle Insurance Liability Workers" Comp BU
Unit Shareholder Litigation Permitted Transferees (D&T Cost) Insurance Insurance Insurance
---- ---------- ---------- --------------------- ---------- ---------- --------- ---------
------------------------------------------------------------------------------------------------------------------------------
609 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
712 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
5045 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
5191 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
5234 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
5972 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
999 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
81633 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
------------------------------------------------------------------------------------------------------------------------------
LLO UST
Unit Insurance
---- ---------
----------------------------
609 Private Insurance
----------------------------
712 Private Insurance
----------------------------
5045 Private Insurance
----------------------------
5191 Private Insurance
----------------------------
5234 Private Insurance
----------------------------
5972 Private Insurance
----------------------------
999 Private Insurance
----------------------------
81633 Private Insurance
----------------------------
57
Specified Market Schedule
Los Angeles County, California
Maricopa County, Arizona
Xxxx County, California
Riverside County, California
Mono County, California
San Bernardino County, California
58
SCHEDULE 2.3 - Affiliates
-------------------------
Xxxx X. Xxxxxxxxxxx
59
SCHEDULE 2.14
-------------
U.C.C.-1 Recordings
Property Locations Recorded at:
------------------ -----------
ARCO Facility Xx. 00000 Xxxxxxxxxx Xxxxxxxxx xx Xxxxx
0000 X. Xxxxx Xxxxxx UCC Division
Xxx Xxxxxxx, Xxxxxxxxxx 00000 X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Los Angeles County Recorder
00000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
ARCO Facility No. 05502 Arizona Secretary of State
000 Xxxx Xxxxxxxx Attn: UCC Division
Xxxxxxx, Xxxxxxx 00000 State Capital Building
0000 X. Xxxxxxxxxx
0/xx/ Xxxxx
Xxxxxxx, XX 00000-0000
Maricopa County Recorder's Xxxxxx
000 Xxxxx 0/xx/ Xxxxxx
Xxxxxxx, XX 00000
ARCO Facility Xx. 00000 Xxxxxxxxxx Xxxxxxxxx xx Xxxxx
3366 N. San Xxxxxxx Boulevard UCC Division
Xxxxxxxx, Xxxxxxxxxx 00000 X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Los Angeles County Recorder
00000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
60
ARCO Facility No. 05513 California Secretary of State
13001 Xxxxxxxxx Highway UCC Division
Xxxxxxxxxxx, Xxxxxxxxxx 00000 X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Xxxx County Recorders Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
ARCO Facility No. 05972 California Secretary of State
64200 20th Street XXX Xxxxxxxx
Xxxxx Xxxx Xxxxxxx, Xxxxxxxxxx 00000 X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Riverside County Recorders Xxxxxx
0000 Xxxxx Xxxxxx, Xx. 000
Xxxxxxxxx, XX 00000
ARCO Facility No. 06202 California Secretary of State
13001 Xxxxxxxxx Highway UCC Division
Xxxxxxxxxxx, Xxxxxxxxxx 00000 X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Xxxx County Recorders Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
00000 Xxxxxx Xxxxxx Xxxxxxxxxx Secretary of State
Fontana, CA 92335 UCC Division
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
San Bernardino County Recorders Office
000 X. Xxxxxxxxxxx Xxxx
Xxx Xxxxxxxxxx, XX 00000-0000
61
000 Xxxxxxxx Xxxxx Xxxxxxxxxx Secretary of Xxxxx
Xxxxxxx Xxxxx, XX 00000 UCC Division
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000-0000
Mono County Recorders Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, XX 00000
62
SCHEDULE 2.23 - Subsidiaries
----------------------------
None
63
SCHEDULE 2.26 - Credit Card Agreements
--------------------------------------
None
64
SCHEDULE 2.31 - Sale of Assets
None
65
SCHEDULE 2.38 - Listing of Local Banks
--------------------------------------
1. Bank of America
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Account No. 0000000000
Account Name: Llo-Gas, Inc., a Delaware Corporation
2. Washington Mutual Bank
00000 Xxxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Account No. 1790953369
Account Name: Llo-Gas, Inc., a Delaware Corporation
3. Sterling National Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Account No. 033028560
Account Name: Capstone Capital/Llo-Gas, Inc.
66
CONVENIENCE STORE FINANCE COMPANY, LLC
CSFC 1999 LOAN PROGRAM
CSFC Loan # _________________
SECURED PROMISSORY NOTE
This secured promissory note (this "Note") is made in connection with
the Loan and Security Agreement, dated as of the date hereof (the "Loan
Agreement") by and between LLO-GAS, INC., a Delaware corporation (the
Borrower"), and CONVENIENCE STORE FINANCE COMPANY, LLC, a Delaware limited
liability company (together with its successors and assigns, "CSFC"). All terms
used herein and not otherwise defined herein shall have the meaning accorded to
such terms in the table set forth below and in the Loan Agreement. This Note is
entitled to the benefits of and is secured by the pledge, liens, security,
title, rights and security interests granted under the Loan Agreement, the
Mortgages and the other Loan Documents, as the same may be amended, supplemented
or renewed, from time to time and evidences a loan (the "Loan") made to Borrower
by CSFC in accordance with the Loan Agreement.
Date of Note: October ___, 1999
Borrower: LLO-GAS, INC.,
a Delaware corporation
Principal Amount: $______________________
First Payment Date: December 11, 1999
Interest Rate: ______% per annum
Funding Date Payment: $______________________
Stated Payment Amount: $______________________
Lockout Period: A period commencing on the Date of
Note and ending on the third anniversary
of the first Payment Date
Amortization Period: A period of 180 months commencing on the
eleventh day of the month following the Date
of Note (or on the Date of Note if such date
is the eleventh day of a month).
Maturity Date: November 11, 2014
Defeasance Period A period (i) commencing on the earlier of (x)
the third anniversary of the first Payment
Date and (y) two years after the
securitization of the Loan by CSFC, and (ii)
ending on the Maturity Date
67
1. Payments of Principal. Borrower hereby promises to pay to the order of
---------------------
CSFC the Principal Amount outstanding under this Note (x) in monthly
installments from the date of the First Payment Date through the Maturity Date,
(y) at the option of Borrower, in full but not in part as permitted under the
Defeasance Option specified in Section 4 hereof, and (z) in full either at such
time as this Note is accelerated under Section 5 hereof or matures under Section
3 hereof.
2. Interest. Interest will accrue and be charged on the Principal
--------
Amount outstanding, from time to time (i) except as provided in clause (ii), at
the Interest Rate, and (ii) upon and during the continuation of an Event of
Default, at a rate per annum equal to the sum of (x) the Interest Rate plus (y)
500 basis points ("Default Rate"). Borrower promises to pay interest to the
order of CSFC in arrears on each Payment Date (as defined below) except as
provided in Section 3.a.ii hereof. All calculations of interest shall be
computed on the basis of a 360-day year and charged on the basis of actual days
elapsed for any whole or partial month in which interest is being calculated
("Actual/360"). Borrower acknowledges that interest calculated on an Actual/360
basis exceeds interest which is calculated on a basis of a 360-day year
consisting of 12 months of 30 days each ("30/360") and, therefore, a greater
portion of each monthly installment of principal and interest will be applied to
interest using the Actual/360 basis than would be the case if interest accrued
on a 30/360 basis. In no event shall Borrower's interest payment obligations or
the amounts of interest payable, contracted for, charged or received under or in
connection with this Note exceed the limitations set forth in Section 8 hereof.
3. Form, Place and Timing of Payments. Borrower agrees to make all
----------------------------------
payments, or cause all payments to be made, under this Note to the order of CSFC
in lawful money of the United States of America and in immediately available
funds, at such place or places and by such method or methods (including wire
transfer or bank account debit) as CSFC shall direct.
a. Payment and Amortization Schedule: Maturity.
-------------------------------------------
i. A "Payment and Amortization Schedule" is attached hereto as
Schedule 3.a.i. and made a part hereof, which schedule is calculated based on
--------------
amortization of the Principal Amount over the Amortization Period.
ii. On the date of funding, Borrower's Funding Date Payment is
due. The Funding Date Payment equals the amount of the interest payable for the
period from the date of the funding of the Note, through and including the tenth
(10th) day of the month immediately following the month in which funding occurs
(unless funding has occurred on the first day of the month in which case, said
interest is payable under Section 3.a.iii hereof).
iii. Commencing on the First Payment Date, and on the eleventh
(11th) day of each month thereafter (each a "Payment Date"), Borrower agrees to
pay the Stated Payment Amount until the earliest of the acceleration, exercise
of the Defeasance Option or Maturity Date of this Note, as the case may be.
iv. The Principal Amount outstanding on the Maturity Date,
together with any and all accrued and unpaid interest, charges, fees and
expenses, shall be due and payable on the Maturity Date.
b. Timing of Payments. Whenever a payment to be made under this Note
------------------
becomes due and payable on a Saturday or Sunday or on a legal holiday or a date
on which banking institutions located in the State of New York are authorized or
required to close, such payment shall be made on the next succeeding business
day.
68
c. Late Payment Charge. If CSFC has not received on any Payment
-------------------
Date, on the Maturity Date, or on any other date on which any payment is due
(whether due to acceleration or otherwise) the full amount due on such Payment
Date, Maturity Date or other date, as the case may be, Borrower promises to pay
to the order of CSFC, promptly on demand, a late payment charge in the amount
equal to the product of (x) the difference between (1) the amount due on such
due date and (z) the amount actually received on such due date, and (y) 0.05.
4. Defeasance Option. This Note, and the Obligations outstanding
-----------------
hereunder, may not be prepaid in whole or in part. However, notwithstanding the
foregoing:
I. So long as no Event of Default shall have occurred and be
continuing, at any time during the Defeasance Period, Borrower may cause the
release of the Collateral and the Properties from the lien of the Loan Documents
upon the satisfaction of the following conditions (such release of the lien and
satisfaction of such conditions referred to herein as the "Defeasance Option"):
(i) not less than thirty (30) days and not more than sixty (60) days
prior written notice shall be given to CSFC specifying a Payment Date on
which the Defeasance Collateral (as hereinafter defined) is to be delivered
(such Payment Date, the "Release Date");
(ii) all accrued and unpaid interest and all other sums then due
under this Note and under the other Loan Documents up to the Release Date,
including, without limitation, all costs and expenses incurred by CSFC or
its agents in connection with such release (including, without limitation,
the fees and expenses incurred by attorneys and accountants in connection
with the review of the proposed Defeasance Collateral and the preparation
of the Defeasance Loan Agreement (as hereinafter defined) and related
documentation and any revenue, documentary stamp or intangible taxes or any
other tax or charge due in connection with the transfer of the Note or
otherwise required to accomplish the agreements of this Section 4(I), and
all fees, costs and expenses incurred or to be incurred by Lender in the
purchase of such U.S. Obligations and the assumption payments referred to
herein), shall be paid in full on or prior to the Release Date; and
(iii) Borrower shall deliver to CSFC on or prior to the Release Date:
(A) an amount (in immediately available funds) equal to the
remaining principal amount of this Note and the Yield
Maintenance Premium (hereinafter defined), if any, sufficient to
purchase direct, non-callable obligations of the United States
of America (the "Defeasance Collateral") that provide for
payments prior, but as close as possible, to all successive
monthly Payment Dates occurring after the Release Date through
the Maturity Date (and assuming the Loan is paid in full on the
Maturity Date), with each such payment being equal to or greater
than the amount of the corresponding installment of principal
and interest required to be paid under this Note (the
"Defeasance Deposit"). The Defeasance Deposit shall be used to
purchase the Defeasance Collateral. Each instrument evidencing
such Defeasance Collateral shall be duly endorsed by the holder
thereof as directed by CSFC or accompanied by a written
instrument of transfer in form and substance wholly satisfactory
to CSFC (including, without limitation, such instruments as may
be required by the depository institution holding such
securities to effectuate book-entry transfers and pledges
through the book-entry facilities of such institution) in order
to create a first priority security interest therein in favor of
CSFC in conformity with all applicable state and federal laws
governing granting of such security interests;
69
(B) a pledge and security agreement, in form and substance
satisfactory to CSFC in its sole discretion, creating a first
priority security interest in favor of CSFC in the Defeasance
Deposit and the Defeasance Collateral (the "Defeasance Loan
Agreement"), which Defeasance Loan Agreement shall provide,
among other things, that any excess payments received by CSFC
from the Defeasance Collateral over the amounts payable by
Borrower hereunder shall be refunded to Borrower.
(C) a certificate of Borrower in form and substance satisfactory to
CSFC in its sole discretion certifying that all of the
requirements set forth in this Section 4 have been satisfied;
(D) an opinion of counsel for Borrower in form and substance and
delivered by counsel satisfactory to CSFC in its sole discretion
stating, among other things, that CFSC has a perfected first
priority security interest in the Defeasance Deposit and the
Defeasance Collateral purchased on behalf of Borrower and that
the Defeasance Loan Agreement is enforceable against Borrower in
accordance with its terms;
(E) a certificate from a firm of independent public accountants
acceptable to CSFC certifying that the Defeasance Collateral is
sufficient to satisfy the provisions of Section A above; and
(F) evidence in writing from each Rating Agency (as defined
hereinafter) selected by CSFC to the effect that such release
will not result in a re-qualification, reduction or withdrawal
of any rating in effect immediately prior to such defeasance for
any Securities (as hereinafter defined); and
(G) such other certificates, documents or instruments as CSFC
may reasonably request.
II. Upon compliance with the requirements of this Section 4 and with
the requirements of Section 4 of each of the other Notes, the Collateral and the
Properties shall be released from the lien of the Loan Documents and the
Defeasance Collateral shall constitute the only collateral which shall secure
the Obligations and CSFC will, at Borrower's expense, execute and deliver any
agreements reasonably requested by Borrower to release the lien of CSFC on the
Collateral and the Properties. Borrower, pursuant to the Defeasance Loan
Agreement, shall authorize and direct that the payments received from Defeasance
Collateral be made directly to CSFC and applied to satisfy the Obligations.
III. Upon the release of the Collateral and the Properties and substitution
of the Defeasance Collateral in accordance with this Section 4, Borrower shall,
upon the direction of CSFC, assign all of its Obligations, together with the
Defeasance Collateral, to a successor entity selected by CSFC. The Borrower and
such successor entity shall execute an assignment and assumption agreement in
form and substance satisfactory to CSFC in its sole discretion pursuant to which
the successor entity shall assume the Obligations in their entirety (including,
without limitation, under the Defeasance Loan Agreement). As conditions to the
effectiveness of such assignment and assumption, Borrower shall (i) deliver or
cause to be delivered to CSFC an opinion of counsel to Borrower (satisfactory to
CSFC in its sole discretion) in form and substance satisfactory to CSFC in its
sole discretion with respect to, among other things, the enforceability of the
assignment and assumption agreement, the Obligations and the applicable
agreements, instruments and documents (including, without limitation, the Loan
Documents) against the successor entity and (ii) pay all costs and expenses
incurred by CSFC, its agents and representatives in connection with the
foregoing. Upon the effectiveness of the assignment and assumption, Borrower
shall be relieved of all Obligations other than those specifically intended to
survive the termination, satisfaction or assignment of the Obligations or the
exercise by CSFC of it rights and remedies with respect to the Obligations.
70
IV. Upon the release of the Collateral and Properties in accordance with
this Section 4, Borrower shall have no further right to prepay this Note
pursuant to the other provisions of this Section 4 or otherwise. In connection
with the conditions set forth in Subsection I(A) above, Borrower hereby appoints
CSFC as its agent and attorney-in-fact for the purpose of purchasing the
Defeasance Collateral with funds provided by the Borrower. Borrower shall pay
any and all expenses incurred in the purchase of the Defeasance Collateral and
any revenue, documentary stamp or intangible taxes or any other tax or charge
due in connection with the transfer of this Note or otherwise required to
accomplish the agreements of this Section 4.
V. For purposes of this Note and the other Loan Documents, the term
"Yield Maintenance Premium" shall mean the amount, if any, which, when added to
the remaining principal amount of the Note, will be sufficient to purchase the
Defeasance Collateral.
5. Acceleration; Expenses. (a) If an Event of Default occurs, the entire
----------------------
Principal Amount may be accelerated by CSFC and CSFC may pursue it remedies
against Borrower and the personal and real property that secures Borrower's
Obligations, including Borrower's obligation to pay the Principal Amount
evidenced by this Note, from time to time and in such order as CSFC shall
determine. If an Event of Default described in Section 6.1.3 of the Loan
Agreement occurs, all Obligations including, without limitation, the entire
Principal Amount, shall be automatically accelerated without presentment,
demand, protest or notice of any kind. Upon acceleration of the Obligations,
Borrower hereby agrees to pay to the order of CSFC on the date of acceleration
an amount equal to (i) the full Principal Amount of this Note which remains
unpaid as of such date, plus (ii) all accrued and unpaid interest thereon and
all other amounts due and owing hereunder (including, without limitation, any
late payment charges) and under the other Loan Documents, plus (iii) all costs
of collection (including, without limitation, reasonable and actual attorneys'
fees and disbursements, whether or not a suit is commenced), which amounts (and
all other amounts which are due and payable by Borrower) shall be added to the
Principal Amount of this Note and will bear interest at the Default Rate, plus
(iv) the Default Repayment Amount (as herein defined).
(b) Simultaneously with each Default Repayment (as hereinafter
defined) occurring prior to the Maturity Date, Borrower shall pay to CSFC an
amount (the "Default Repayment Amount") equal to the greater of: (A) three (3%)
percent of the principal amount of this Note being prepaid; and (B) the present
value of a series of payments each equal to the Payment Differential (as
hereinafter defined) and payable on each Payment Date over the remaining
original term of this Note and on the Maturity Date, discounted at the
Reinvestment Yield (as hereinafter defined) for the number of months remaining
from the date of the Default Repayment (the "Repayment Date") to each such
monthly Payment Date and the Maturity Date. The term "Reinvestment Yield" as
used herein shall be equal to the lesser of (a) the (i) yield on the U.S.
Treasury issue (primary issue) with the same maturity date as the Maturity Date:
or (ii) if no such U.S. Treasury issue is available, then the interpolated yield
on the two U.S. Treasury issues (primary issues) with maturity dates (one prior
to and one following) that are closest to the Maturity Date; or (b) the (i)
yield on the U.S. Treasury issue (primary issue) with a term equal to the
remaining average life of the Obligations, or (ii) if no such U.S. Treasury
issue is available, then the interpolated yield on the two U.S. Treasury issues
(primary issues) with terms (one prior to and one following) that are closest to
the remaining average life of the Obligations, with each such yield being based
on the bid price for such issue as published in The Wall Street Journal on the
date that is 14 days prior to the Repayment Date (or, if such bid price is not
published on that date, the next preceding date on which such bid price is so
published) and converted to a monthly compounded nominal yield. The term
"Payment Differential" as used herein shall be equal to (x) the Interest Rate
minus the Reinvestment Yield, divided by (y) 12 and multiplied by (z) the
principal sum being repaid on such Repayment Date after application of the
Monthly Payment (if any) due on the date of the Default Repayment, provided that
the Payment Differential shall in no event be less than zero. In no event,
however, shall CSFC be required to reinvest any repayment proceeds in U.S.
Treasury obligations or otherwise.
71
For purposes of this Note, the term "Default Repayment" shall mean a
repayment of all or any portion of the principal amount of this Note made during
the continuance of any Event of Default or after an acceleration of the Maturity
Date under any circumstances, including, without limitation, a repayment
occurring in connection with reinstatement of the Mortgage provided by statute
under foreclosure proceedings or exercise of a power of sale, any statutory
right of redemption exercised by Borrower or any other party having a statutory
right to redeem or prevent foreclosure, any sale in foreclosure or under
exercise of a power of sale or otherwise.
6. WAIVERS AND SPECIAL AGREEMENTS: BORROWER HEREBY MAKES AND ACKNOWLEDGES
------------------------------
THAT IT MAKES ALL OF THE WAIVERS AND SPECIAL AGREEMENTS ("WAIVERS") SET FORTH IN
THIS NOTE KNOWINGLY, INTENTIONALLY, VOLUNTARILY, WITHOUT DURESS, AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF SUCH WAIVERS WITH ITS ATTORNEY;
BORROWER FURTHER ACKNOWLEDGES THAT BORROWER UNDERSTANDS THE RIGHTS BEING WAIVED
AND THAT THE WAIVERS ARE A MATERIAL INDUCEMENT TO CSFC TO MAKE THE LOAN TO
BORROWER; THAT THE TERMS OF THE LOAN ARE FAVORABLE TO BORROWER AND THAT CSFC
WOULD NOT HAVE MADE THE LOAN ON SUCH TERMS WITHOUT SUCH WAIVERS. Borrower and
any and all obligors, sureties, guarantors and endorsers of this Note and all
other parties now or hereafter liable hereon jointly and severally ("Obligors"):
(i) acknowledge that the transaction of which this Note is a part is part of a
commercial transaction; (ii) waive any and all (from time to time) (a) rights to
notice and hearing under any state or federal law with respect to any
prejudgment remedy which the CSFC may desire to use, from time to time, and (b)
grace. diligence, demand, presentment for payment, protest, notice of any kind
(including notice to sureties, disclosure of facts which materially increase
risks, notice of protest, acceptance, liability suit, demand, or action,
dishonor, payment or nonpayment, protest. intention to accelerate or
acceleration, extension or renewal), surety defenses of any kind (including
defenses relating to impairment of recourse, release or modification of
underlying obligation, extension of time, impairment of collateral,
nondisclosure), rights of appraisal of security or collateral for any obligation
or guaranteed obligation and diligence in collecting and bringing suit against
any party; (iii) agree (a) to all extensions of any obligation or guaranteed
obligations (including rescheduling and recalculation of amortization), in whole
or in part, from time to time, or any partial payments, with or without notice,
before or after maturity, (b) to any one or more substitutions, exchanges or
releases of any or all security, now or hereafter given for any obligation, (c)
to any and all releases, from time to time, of any and all parties primarily,
secondarily or otherwise liable for any obligation or guaranteed obligation, (d)
that it is not (and at no time will be) necessary for CSFC, or any other holder,
transferee, obligee or beneficiary of any note or obligation or guaranteed
obligation (or any interest therein) (collectively, "Obligee"), in order to
enforce such note or obligation, to first institute or exhaust such Person's
remedies against any borrower or other Person or against any collateral or other
security for such note or obligation, and (e) any delay in exercising, failure
to exercise, or non-exercise (or partial exercise), from time to time, by CSFC
or any other Obligee of any obligation or guaranteed obligation of any rights or
remedies (or to insist upon strict performance) in any one or more instances
shall not constitute a waiver thereof (or preclude full exercise or insistence
upon strict performance thereof) in that or any other instance, and any single
exercise of any such Person's right or remedies in any one or more instances
shall not preclude full exercise in any other instance; and (iv) waives and
agrees not to assert any right of set off and any claim (as defined in U.S.C.
Section 101), including, without limitation, any claim of subrogation,
reimbursement, exoneration, contribution or indemnification that Borrower or any
other Obligor may now or hereafter have against Borrower or any other Obligor or
any security held by or available to CSFC or any other Obligee.
7. WAIVER OF TRIAL BY JURY AND APPRAISAL RIGHT. BORROWER HEREBY
-------------------------------------------
IRREVOCABLY AND UNCONDITIONALLY WAIVES, AND CSFC BY ITS ACCEPTANCE OF THE NOTE
IRREVOCABLY AND UNCONDITIONALLY WAIVES, ANY AND ALL RIGHTS TO TRIAL BY JURY IN
ANY ACTION, SUIT OR COUNTERCLAIM ARISING IN CONNECTION WITH, OUT OF OR OTHERWISE
RELATING TO THIS NOTE. BORROWER HEREBY FURTHER WAIVES ANY AND ALL RIGHTS
72
BORROWER MAY NOW OR HEREAFTER HAVE TO AN APPRAISAL OF ANY SECURITY OR COLLATERAL
FOR BORROWER'S OBLIGATIONS HEREUNDER.
8. LIMITATION ON INTEREST. NOTWITHSTANDING ANY OTHER PROVISION HEREOF, IN
----------------------
NO EVENT SHALL THE AMOUNT OR RATE OF INTEREST (INCLUDING TO THE EXTENT
APPLICABLE ANY DEFAULT RATE INTEREST OR LATE PAYMENT CHARGES) PAYABLE,
CONTRACTED FOR, CHARGED OR RECEIVED UNDER OR IN CONNECTION WITH THIS NOTE, FROM
TIME TO TIME OR FOR WHATEVER REASON, EXCEED THE MAXIMUM RATE OR AMOUNT, IF ANY,
SPECIFIED BY APPLICABLE LAW. If from any circumstance whatsoever fulfillment of
any provision hereof or of such other Loan Documents or other documents or
obligations at the time performance of such provision shall be due shall involve
transcending the limit of validity prescribed by law, then, ipso facto, the
---- -----
obligation to be fulfilled shall be reduced to the limit of such validity, and
if from any such circumstance CSFC shall ever receive an amount deemed interest
by applicable law which shall exceed the highest lawful rate, such amount which
would be excessive interest shall be applied to the reduction of the Principal
Amount owing hereunder or on account of any other principal indebtedness of the
Borrower to CSFC, and not to payment of interest or if such excessive interest
exceeds the unpaid balance of the Principal Amount and such other indebtedness,
or if CSFC is prohibited by applicable law from applying such excessive interest
to the reduction of the Principal Amount or on account of any other
indebtedness, the excess shall be refunded to Borrower. All sums paid or agreed
to be paid by the Borrower for the use, forbearance or detention of the
indebtedness of the Borrower to CSFC shall, to the extent permitted by
applicable law, be amortized prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of such indebtedness is uniform though the term hereof. The
terms and provisions of this Section shall control and supersede every other
provision of all agreements between the Borrower and CSFC and all obligations of
Borrower to CSFC.
9. Applications: Calculations of Amounts Due. Timely payments of the
-----------------------------------------
Stated Payment Amount shall be applied first to accrued and unpaid interest,
then to the outstanding Principal Amount. All calculations and applications of
amounts due on any date, whether by acceleration or otherwise, will be made by
CSFC (or its agent or representative) and Borrower agrees that all such
calculations and applications will be conclusive and binding absent manifest
error.
10. Sale or Participation of Loan. CSFC and any successor may, at any
-----------------------------
time, sell, transfer, or assign this Note, the Loan Agreement, the Mortgages,
and the other Loan Documents, and any or all servicing rights with respect
thereto, or grant participations therein or issue mortgage pass-through
certificates or other securities evidencing a beneficial interest in a rated or
unrated public offering or private placement (the "Securities"). CSFC may
forward to each purchaser, transferee, assignee, servicer, participant. investor
in such Securities or any rating agency (a "Rating Agency") rating such
Securities (all of the foregoing entities collectively referred to as an
"Investor") and each prospective Investor, all documents, financial and other
information which CSFC now has or may hereafter acquire relating to (a) the
Loan; (b) the Business and the Properties and their operation (including,
without limitation, copies of all leases, subleases or any other agreements
concerning the operation, use and occupancy of the Business and the Properties);
and/or (c) any party connected with the Loan (including, without limitation,
Borrower, any partner or member of Borrower, any constituent partner or member
of Borrower, and any guarantor). In connection with such Securities, Borrower
further agrees that the Loan Documents shall be sufficient evidence of the
obligations of Borrower to each Investor, and Borrower shall, within fifteen
(15) days after request by CSFC, deliver an estoppel certificate verifying for
the benefit of CSFC and any other party designated by CSFC the status and the
terms and provisions of the Loan in form and substance acceptable to CSFC, and
enter into such amendments or modifications to the Loan Documents as may be
reasonably required in order to facilitate the Securities without impairing
Borrower's rights or increasing Borrower's obligations. The representations,
warranties, obligations, covenants, and indemnity obligations of Borrower under
the Loan Documents shall also benefit and apply with respect to any purchaser,
transferee, assignee, participant, service or investor.
73
11. Miscellaneous. This Note and the rights and obligations under this
-------------
Note are not assignable or delegable, directly or indirectly, in whole or in
part, by Borrower, except as provided in the Mortgage. This Note shall be
binding upon Borrower, its successors and, without limiting the preceding
sentence, assigns. For all payments to be made and obligations to be performed
under this Note, Borrower agrees to perform strictly in accordance with the
terms of this Note and time is of the essence. Whenever possible, this Note and
each provision hereof, shall be interpreted in such manner as to be effective,
valid and enforceable under applicable law. If and to the extent that any such
provision shall be held invalid and unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provisions hereof, and 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.
All rights and remedies provided in this Note, the Loan Agreement, the
Mortgages, and any other Loan Document or any law shall be available to CSFC and
shall be cumulative. THIS NOTE CONTAINS WAIVERS OF VARIOUS RIGHTS AND DEFENSES,
INCLUDING (WITHOUT LIMITATION) WAIVERS OF RIGHTS OF JURY TRIAL AND APPRAISAL AS
SET FORTH IN SECTION 7 HEREOF. THIS DOCUMENT IS EXECUTED UNDER SEAL AND INTENDED
TO TAKE EFFECT AS A SEALED INSTRUMENT.
12. Governing Law. This Note was accepted by CSFC in the state of New
-------------
York and the proceeds of this Note were disbursed from the state of New York,
which state the parties agree has a substantial relationship to the parties and
to the underlying transaction embodied hereby. Accordingly, in all respects,
including, without limiting the generality of the foregoing, matters of
constructions, validity, enforceability and performance, this Note, the Loan
Agreement, the Mortgages and the other Loan Documents and the obligations
arising hereunder and thereunder shall be governed by, and construed in
accordance with, the laws of the state of New York applicable to contracts made
and performed in such state and any applicable law of the United States of
America, except that at all times the provisions for the enforcement of CSFC's
rights to foreclose granted under the Mortgages securing this Note and the
creation, perfection and enforcement of the security interests created pursuant
thereto and pursuant to the other Loan Documents shall be governed by and
construed according to the law of the state where each applicable Property is
located. Except as provided in the immediately preceding sentences, Borrower
hereby unconditionally and irrevocably waives, to the fullest extent permitted
by law, any claim to assert that the law of any jurisdiction other than New York
governs the Mortgages, this Note, the Loan Agreement and the other Loan
Documents.
13. Consent to Jurisdiction. Borrower irrevocably submits to the
-----------------------
jurisdiction of: (a) any state or federal court sitting in the State of New York
over any suit, action, or proceeding arising out of or relating to this Note or
the Loan evidenced hereby; and (b) any state court sitting in the county of the
state where the applicable Property is located over any suit, action, or
proceeding, brought by CSFC to exercise its rights to foreclose under the
Mortgages or any action brought by CSFC to enforce its rights with respect to
the Collateral. Borrower irrevocably waives, to the fullest extent permitted by
law, any objection that Borrower may now or hereafter have to the laying of
venue of any such suit, action, or proceeding brought in any such court and any
claim that any such suit, action, or proceeding brought in any such court has
been brought in an inconvenient forum.
74
SCHEDULE 3.a.i.
SECURED PROMISSORY NOTES
OF
LLO-GAS, INC.
PAYMENT AND AMORTIZATION
75
LLO-GAS, INC.
INFORMATION SCHEDULE
LLO Fee "F" Convenience Loan
Unit Address City County State Zip Lease "L" Gas Store Amount
---- ------- ---- ------ ----- --- --------- --- ----- ------
----------------------------------------------------------------------------------------------------------------------------------
609 0000 X. Xxxxx Xx. Xxx Xxxxxxx Xxx Xxxxxxx XX 00000 F Arco AM/PM $ 975,000
----------------------------------------------------------------------------------------------------------------------------------
712 0000 X. Xxx Xxxxxxx Xx. Xxxxxxxx Xxx Xxxxxxx XX 00000 F Arco Arco $ 700,000
----------------------------------------------------------------------------------------------------------------------------------
5045 000 X. Xxxxxxxx Xx. Xxxxxxx Xxxxxxxx XX 00000 F Arco AM/PM $1,230,000
---------------------------------------------------------------------------------------------------------------------------------
5191 0000 Xxxxxxxxxx Xxx. Xxxxxxxxxxx Xxxx XX 00000 F Arco AM/PM $ 760,000
----------------------------------------------------------------------------------------------------------------------------------
5234 00000 Xxxxxxxxx Xxx Xxxxxxxxxxx Xxxx XX 00000 F Arco AM/PM $ 585,000
----------------------------------------------------------------------------------------------------------------------------------
5972 64200 20/th/ St./PO Box 000 X. Xxxx Xxxxxxx Xxxxxxxxx XX 00000 F Arco AM/PM $ 750,000
----------------------------------------------------------------------------------------------------------------------------------
999 000 Xxxxxxxx Xx. Xxxxxxx Xxxxx Xxxx XX 00000 F Arco AM/PM $ 300,000
----------------------------------------------------------------------------------------------------------------------------------
81633 00000 Xxxxxx Xxx. Xxxxxxx Xxx Xxxxxxxxxx XX 00000 F Arco AM/PM $2,500,000
----------------------------------------------------------------------------------------------------------------------------------
Total $7,800,000
==========
76
LLO-GAS, INC.
INFORMATION SCHEDULE
LLO Borrower Borrower Borrower Principal Chief Executive
Unit: Legal Name: Trade Name(s): Taxpaper I.D. No.: Agreement: Office Street:
----- ----------- -------------- ------------------ ---------- --------------
---------------------------------------------------------------------------------------------------------------------------------
609 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
712 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5045 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5191 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5234 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
5972 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
999 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Independent 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
81633 LLO Gas, Inc., a Delaware Corporation None 00-0000000 Arco 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
---------------------------------------------------------------------------------------------------------------------------------
LLO Chief Executive Chief Executive Chief Executive
Unit: Office County: Office County: Office State:
----- ------------ ------------ -------------
-----------------------------------------------------------
609 Malibu Los Angeles California
-----------------------------------------------------------
712 Malibu Los Angeles California
-----------------------------------------------------------
5045 Malibu Los Angeles California
-----------------------------------------------------------
5191 Malibu Los Angeles California
-----------------------------------------------------------
5234 Malibu Los Angeles California
-----------------------------------------------------------
5972 Malibu Los Angeles California
-----------------------------------------------------------
999 Malibu Los Angeles California
-----------------------------------------------------------
81633 Malibu Los Angeles California
-----------------------------------------------------------
77
LLO-GAS, INC.
INFORMATION SCHEDULE
Lease
LLO Chief Executive Account No. Type Lease Lease Remaining
Unit Office Zip: Local Bank: Deposit: Acquisitions: "L, GL, SL": Payment Expiration: Lease Term:
---- ----------- ----------- -------- ------------- ------------ ------- ----------- -----------
----------------------------------------------------------------------------------------------------------------------------------
609 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
712 90265 Bank of America Arco 1099 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
5045 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
5191 90265 Bank of America Arco 1099 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
5234 90265 Bank of America Arco 10/99 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
5972 0265 Bank of America Arco 1099 n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
999 265 Bank of America n/a n/a n/a n/a n/a
----------------------------------------------------------------------------------------------------------------------------------
81633 90265 Bank of America Time Out, LLC 00-00 x/x x/x x/x x/x
----------------------------------------------------------------------------------------------------------------------------------
LLO
Unit Record Owner:
---- ------------
------------------------------------------------
609 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
712 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5045 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5191 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5234 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
5972 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
999 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
81633 LLO-GAS, INC., a Delaware Corporation
------------------------------------------------
78
LLO-GAS, INC.
INFORMATION SCHEDULE
[Cost before depreciation -
Hazard
LLO Principle Insurance Liability Workers" Comp BU
Unit Shareholder Limitation Permitted Transferees (D&T Cost) Insurance Insurance Insurance
---- ----------- ---------- --------------------- ---------- --------- --------- ---------
---------------------------------------------------------------------------------------------------------------------------------
609 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
712 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
5045 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
5191 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
5234 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
5972 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
999 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
81633 Xxxx Xxxxxxxxxxx None None $1,000,000 State Requirements 6 months
---------------------------------------------------------------------------------------------------------------------------------
LLO UST
Unit Insurance
---- ---------
---------------------------
609 Private Insurance
---------------------------
712 Private Insurance
---------------------------
5045 Private Insurance
---------------------------
5191 Private Insurance
---------------------------
5234 Private Insurance
---------------------------
5972 Private Insurance
---------------------------
999 Private Insurance
---------------------------
81633 Private Insurance
---------------------------
79
EXHIBIT C
---------
Please see attached
80
[STATE OF CALIFORNIA]
[SEAL OF STATE OF CALIFORNIA]
XXXX XXXXX
SECRETARY OF STATE
SACRAMENTO
CERTIFICATE REQUESTED ON: October 13, 1999
LLO-GAS, INC., A DELAWARE CORPORATION
@ANY ADDRESS
FINANCING STATEMENT FILED ON AUG 26, 1999 AT 1548 FILE NO. 9924360711
DEBTOR: LLO-GAS, INC., A DELAWARE CORPORATION
###-##-####
LAWS BULK PLANT, 108 DEHY-LAWS
XXXXXX, XX 00000
SECURED PARTY: CAPSTONE CAPITAL, LLC
000 XXXXXXX, 00XX XX
XXX XXXX, XX 00000
FINANCING STATEMENT FILED ON AUG 26, 1999 AT 1548 FILE NO. 992248360717
DEBTOR: LLO GAS, INC., A DELAWARE CORPORATION
###-##-####
000 XXXXXXX XXXX
XXXXXXX, XX 00000
SECURED PARTY: CAPSTONE CAPITAL, LLC
000 XXXXXXX, 00XX XX
XXX XXXX, XX 00000
FINANCING STATEMENT FILED ON AUGUST 26, 1999 AT 1548 FILE No. 9924360720
DEBTOR: LLO GAS, INC., A DELAWARE CORPORATION
###-##-####
000 XXXXXXX XXXX
XXXXXXX, XX 00000
CERTIFICATE: 99291-R-0351
81
[STATE OF CALIFORNIA]
[SEAL OF STATE OF CALIFORNIA]
XXXX XXXXX
SECRETARY OF STATE
SACRAMENTO
(CONTINUED) AUGUST 26, 1999 AT 1548 FILE No.9924360720
SECURED PARTY: CAPSTONE CAPITAL, LLC
000 XXXXXXX, 00XX XX
XXX XXXX, XX 00000
FINANCING STATEMENT FILED ON AUG 26, 1999 AT 1548 FILE NO.9924360732
DEBTOR: LLO-GAS, INC., A DELAWARE CORPORATION
###-##-####
LAWS BULK PLANT, 108 DEHY-LAWS
XXXXXX, XX 00000
SECURED PARTY: CAPSTONE CAPITAL, LLC
000 XXXXXXX, 00XX XX
XXX XXXX, XX 00000
THE UNDERSIGNED FILING OFFICER HEREBY CERTIFIES THAT THE ABOVE LISTING IS A
RECORD OF ALL PRESENTLY EFFECTIVE FINANCING STATEMENTS, TAX LIENS, ATTACHMENT
LIENS AND JUDGMENT LIENS, INCLUDING ANY CHANGE DOCUMENTS RELATING TO THEM, WHICH
NAME THE ABOVE DEBTOR AND ARE ON FILE IN MY OFFICE AS OF OCTOBER 06, 1999 AT
1700 HOURS.
/s/ Xxxx Xxxxx
-------------------------
XXXX XXXXX
SECRETARY OF STATE
CERTIFICATE: 99291-R-0351
82
EXHIBIT D - Principal Agreements
--------------------------------
Property Description Agreements
-------------------- ----------
ARCO Facility No. 01860 (1) am/pm MINI MARKET AGREEMENT
0000 X. Xxxxx Xxxxxx (2) CONTRACT DEALER AGREEMENT
Xxx Xxxxxxx, Xxxxxxxxxx 00000
ARCO Facility No. 05502 (1) am/pm MINI MARKET AGREEMENT
000 Xxxx Xxxxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxxxx, Xxxxxxx 00000
ARCO Facility No. 05212 (1) am/pm MINI MARKET AGREEMENT
0000 X. Xxx Xxxxxxx Xxxxxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxxxxx, Xxxxxxxxxx 00000
ARCO Facility No. 05513 (1) am/pm MINI MARKET AGREEMENT
00000 Xxxxxxxxx Xxxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxxxxxxxx, Xxxxxxxxxx 00000
ARCO Facility No. 05972 (1) am/pm MINI MARKET AGREEMENT
00000 00xx Xxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxx Xxxx Xxxxxxx, Xxxxxxxxxx 00000
ARCO Facility No. 06202 (1) am/pm MINI MARKET AGREEMENT
0000 Xxxxxxxxxx Xxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxxxxxxxx, Xxxxxxxxxx 00000
ARCO Facility (1) am/pm MINI PARKET AGREEMENT
00000 Xxxxxx Xxxxxx (2) CONTRACT DEALER AGREEMENT
Xxxxxxx, Xxxxxxxxxx 00000
83
EXHIBIT E
COMPLIANCE CERTIFICATE
----------------------
Convenience Store Finance Company, LLC
00000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Re: Loan and Security Agreement, dated as of October __, 1999, by and
between CONVENIENCE STORE FINANCE COMPANY, LLC and LLO-GAS, INC.,
a Delaware corporation (the "Loan Agreement") Section 2.18 -
COMPLIANCE CERTIFICATE
The undersigned ("Borrower") hereby certifies to Secured Party (as
defined in the Loan Agreement) that except to the extent set forth on Schedule I
attached hereto, (i) all representations and warranties made by Borrower in the
captioned Loan Agreement, as of the date hereof, are true in all material
respects and correct in all material respects as if made on the date hereof;
Borrower has performed all of its material covenants and other Obligations (as
defined in the Loan Agreement) required to be performed under the Loan Documents
(as defined in the Loan Agreement) as of the date hereof and is in compliance
with the financial covenants set forth in Section 2.8 of the Loan Agreement; no
Event of Default (as defined in the Loan Agreement) has occurred and Borrower
has no reason to believe that an Event of Default will occur any time in the
six-month period following the date hereof; and (ii) all written information,
written reports, written statements and financial and other written data
furnished by Borrower to Secured Party, its agents or representatives since
_______________, _____ in connection with Borrower's Loan and the secured
Obligations were, on the date so furnished, and are true, complete and correct
in all material respects.
IN WITNESS WHEREOF, the undersigned has caused this Compliance
Certificate to be executed and delivered for and on behalf of Borrower, this
_____ day of _______________.
LLO-GAS, INC.,
a Delaware corporation
By:_______________________________________
Name:
Title:
84
LLO-GAS INC.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
October 26, 1999
Washington Mutual Bank
00000 Xxxxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxx 00000
Gentlemen:
Llo-Gas, Inc., a Delaware corporation, ("Borrower"), hereby notifies
you that it has entered into financing arrangements with Convenience Store
Finance Company, LLC ("Lender"), pursuant to which Lender may from time to time
make loans and advances and provide other financial accommodations to Borrower,
and Borrower has granted to Lender a security interest in that certain deposit
account ("Deposit Account") maintained by Borrower with you and described below:
Account Number Depositor's Name
-------------- ----------------
179093369 Llo-Gas, Inc., a Delaware corporation
You are hereby irrevocably authorized and directed, without any
additional consent or authorization of Borrower, to deliver the Deposit Account
and all funds held therein to Lender, its successors or assigns, upon the
written request of Lender, or any successor or assign.
Lender is relying upon this letter agreement in providing financing to
us, and this letter agreement shall be binding upon you and your successors and
assigns and inure to the benefit of Lender and its successors and assigns. This
letter agreement cannot be changed, modified or terminated, except by written
agreement signed by Lender.
Please acknowledge your receipt of, and agreement to, the foregoing by
signing in the space provided below.
Very truly yours,
Llo-Gas, Inc., a Delaware corporation
By:_______________________________________
Xxxx X. Xxxxxxxxxxx, President
Acknowledged and Agreed:
Washington Mutual Bank
By:___________________________
Its:__________________________
85
Llo-Gas, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
October 22, 1999
VIA FEDERAL EXPRESS
-------------------
The Company Corporation
0000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Amendment to Certificate of Incorporation
Dear Sir or Madam:
Enclosed for filing on Monday, October 25, 1999, is an original and
three copies of the Amendment to Certificate of Incorporation of Llo-Gas, Inc.
Please file the attached Amendment and return a conformed copy to me via
facsimile and U. S. Mail.
Because we were unable to reach you before your close of business, we
were unable to determine the exact filing fee for the Amendment. Accordingly,
following is my Bank of America Visa number for use in this regard:
0000-0000-0000-0000; Expiration 07/01.
If you have any questions or encounter any problems filing the
Amendment, please telephone me at the above number, or telephone my attorney,
Xxx Xxxxxxx, at (000) 000-0000.
Thank you for your assistance.
Very truly yours,
Xxxx X. Xxxxxxxxxxx
President
JDC:cIh
Enclosures
86
LLO-GAS INC.
00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
October 26, 0000
Xxxx xx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Gentlemen:
Llo-Gas, Inc., a Delaware corporation, ("Borrower"), hereby notifies
you that it has entered into financing arrangements with Convenience Store
Finance Company, LLC ("Lender"), pursuant to which Lender may from time to time
make loans and advances and provide other financial accommodations to Borrower,
and Borrower has granted to Lender a security interest in that certain deposit
account ("Deposit Account") maintained by Borrower with you and described below:
Account Number Depositor's Name
-------------- ----------------
0000000000 Llo-Gas, Inc., a Delaware corporation
You are hereby irrevocably authorized and directed, without any
additional consent or authorization of Borrower, to deliver the Deposit Account
and all funds held therein to Lender, its successors or assigns, upon the
written request of Lender, or any successor or assign.
Lender is relying upon this letter agreement in providing financing to
us, and this letter agreement shall be binding upon you and your successors and
assigns and inure to the benefit of Lender and its successors and assigns. This
letter agreement cannot be changed, modified or terminated, except by written
agreement signed by Lender.
Please acknowledge your receipt of and agreement to, the foregoing by
signing in the space provided below.
Very truly yours,
Llo-Gas, Inc., a Delaware corporation
By:_______________________________________
Xxxx X. Xxxxxxxxxxx, President
Acknowledged and Agreed:
Bank of America
By:___________________________
Its:___________________________
87
NATIONAL FINANCING STATEMENT (FORM UCC1) TRANS
THIS SPACE FOR USE OF FILING OFFICER
FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This Financing Statement is presented for filing pursuant to the Uniform
Commercial Code and will remain effective, with certain exceptions, for 5 years
from the date of filing
A NAME & TEL # OF CONTACT FILER (optional) B FILING OFFICE ACCOUNT #
(optional)
C RETURN COPY TO (Name and Mailing Address)
[ ]
Stroock & Stroock & Xxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
[ ]
D OPTIONAL DESIGNATION (if applicable). |_| LESSOR/LESSEE |_|CONSIGNOR/CONSIGNEE|_| NON-UCC FILING
------------------------------------------------------------------------------------------------------------------------------------
1 DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor (1a or 1b)
1a. ENTITY'S NAME
LLO-GAS, INC., a Delaware corporation
1b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
1c. MAILING ADDRESS CITY: STATE COUNTRY POSTAL CODE
00000 Xxxxxx Xxxxx Xxxx Xxxxxx XX XXX 00000
1d. S.S. OR TAX ID # OPTIONAL 1e. TYPE OF ENTITY 1f. ENTITY 1g. ENTITY'S ORG I.D.#, if any
ADDN'L INFO RE OR COUNTY OF
ENTITY DEBTOR ORGANIZATION |X| NONE
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (2a or 2b)
2a. ENTITY'S NAME
2b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
2c. MAILING ADDRESS CITY: STATE COUNTRY POSTAL CODE
2d. S.S. OR TAX ID # OPTIONAL 2e. TYPE OF ENTITY 2f.ENTITY'S STATE 2g. ENTITY'S ORG I.D.#, if any
ADDN'L INFO RE OR COUNTY OF
ENTITY DEBTOR ORGANIZATION |_| NONE
3. SECURED PARTY'S (ORIGINAL S/P or ITS TOTAL ASSIGNED) EXACT FULL LEGAL NAME - insert only one debtor name (3a or 3b)
3a ENTITY'S NAME CONVENIENCE STORE FINANCE COMPANY, LLC, a Delaware limited liability company
3b INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX
3c. MAILING ADDRESS CITY: STATE COUNTRY POSTAL CODE
00000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx Xxx Xxxxxxx XX XXX 00000
4. This FINANCING STATEMENT covers the following types or items of property
Con'td.-See Attached Schedule A.
-----------------------------------------------------------------------------------------------------------------------------------
5 CHECK [_] THIS FINANCING STATEMENT is signed by the Secured 7 If file in Florida (check one)
Party instead of the Debtor to perfect a security [_] Documentary [_] Documentary
interest (a) in collateral already subject to a security Stamp stamp tax paid tax not
interest in another jurisdiction when it was brought into applicable
this state, or when the debtor's location was state, or
(b) in accordance with other statutory provisions (additional
data may be required)
REQUIRED SIGNATURE(S) 8 This FINANCING STATEMENT is to be filed (for record)
Cont'd.-See Attached Schedule B. |_| (or recorded) in the REAL ESTATE RECORDS
Attach Addendum (If applicable)
-----------------------------------------------------------------------------------------------------------------------------------
9 Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
(ADDITIONAL FEE)
(Optional) |_| all Debtors |_| Debtor 1 |_| Debtor 2
-----------------------------------------------------------------------------------------------------------------------------------
NATIONAL FINANCING STATEMENT (FORM UCC1)
88
Schedule "A" to UCC-1 Financing Statement
-----------------------------------------
DEBTOR: LLO-GAS, INC.
00000 Xxxxxx Xxxxx Xxxx. Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
SECURED PARTY: CONVENIENCE STORE FINANCE COMPANY, LLC
00000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
This financing statement covers all the Debtor's right, title and interest
in, to and under the following property, whether now owned or hereafter
acquired, now existing or hereafter arising and wherever located (collectively,
the "Collateral
(a) all Goods (including Inventory and Equipment), General Intangibles.
Accounts, certificates of title, fixtures, money, instruments, securities,
investment property, documents, chattel paper, credit balances, deposits,
deposit accounts, letters of credit, bankers' acceptances, guaranties, credits,
claims, choses in action, demands, and all present and future liens, security
interests, rights, insurance, remedies, title and interest in, to and in respect
of Accounts and other property of every kind and description, and all other
personal property, now or hereafter owned, acquired, held, used, sold or
consumed in connection with Debtor's business or property and any other
property, rights and interests of Debtor which at any time relate to, arise out
of or in connection with the foregoing or which shall come into the possession
or custody or under the control of the Secured Party or any of its agents,
representatives, associates or correspondents, for any purpose, including
without limitation, any Replacement Collateral; all additions and accessions
thereto, substitutions therefor and replacements and improvements of or to any
of the foregoing; all interest, income, dividends, distributions and earnings
thereon or other monies or revenues derived therefrom, including any such
property received in connection with any disposition thereof and all moneys
which may become payable under any policy insuring the foregoing or otherwise
required to be maintained hereunder (including return of unearned premium)
("Collateral Revenues"); and
(d) all products and proceeds of all or any of the foregoing.
As used herein, the following terms have the meanings set forth below:
"Accounts" shall have the meaning accorded to such term in the UCC
and shall include all present and future rights of Debtor to payment for goods
sold or leased or for services rendered, which are not evidenced by instruments
or chattel paper, and whether or not earned by performance, including, without
limitation, Credit Card Receivables.
89
"Credit Card Issuer" shall mean any person (other than Debtor) who
issues or whose members issue credit cards, including, without limitation.
MasterCard or VISA bank credit or debit cards or other bank credit or debit
cards, and American Express. Discover, Diners Club. Xxxxx Xxxxxxx and other non-
bank credit or debit cards.
"Credit Card Receivables" shall mean all Accounts consisting of the
present and future rights of Debtor to payment for Inventory sold and delivered
to customers who have purchased such goods using a credit card or a debit card
issued by a Credit Card Issuer.
"Equipment" shall have the meaning accorded to such term in the UCC
and shall include all goods used or bought for use primarily in the business and
not included within the Inventory, including machines, computers, fixtures,
furnishings, furniture, appliances, vehicles, tools, and supplies, and the like
employed in connection with the business, together with all present and future
additions, attachments, accessions thereto, all replacements, improvements and
betterments thereof and all substitutions therefor.
"General Intangibles" shall have the meaning accorded to such term in
the UCC and shall include agreements, contracts, writings, memoranda,
confirmations, passbooks, signature cards, acknowledgments, understandings,
contract rights, licenses, leases, permits, filings, consents, and approvals,
and all puts, calls, options, warrants, and securities, and all tax and duty
refunds, and all security interests, patents, inventions, processes, lists
(including customer and suppliers lists), methods, and information (including
proprietary information, member lists and information concerning members, sales,
business, financial, accounting, forecasts, projections, media, and other
information), know how, software, programs, plans, data, blueprints, designs,
drawings, surveys, notices, copyrights, trademarks, trade names, trade secrets,
service marks, service names, logos and goodwill, going concern value, and
market share value and all recordings and registrations thereof, applications
for recording or registration, renewals, modifications, supplements, reissues,
continuations, extensions, divisions thereof and rights corresponding thereto,
and all manuals, standards, practices, mail, advertisements, files, reports,
books, catalogs, records, journals, invoices, and bills, and all rights
(including voting rights, rights to receive notice or to consent, rights to
payment, interest, dividends, distributions or earnings, rights to xxx and
enforce), powers (including powers of attorney), privileges, benefits, and
remedies. relating thereto or arising in connection therewith.
"Goods" shall have the meaning accorded to such term in the UCC and
shall include (i) all Inventory and (ii) all Equipment.
"Inventory" shall have the meaning accorded to such term in the UCC
and shall include all goods held by Debtor for sale or lease or to be furnished
under contracts of service, all goods so furnished by Debtor, all raw materials
and work in process, and all materials used or consumed in Debtor's business and
all documents of title covering any inventory.
"Replacement Collateral" shall mean those assets of the Debtor-which
replace certain Collateral and which have an appraised value equal to or greater
than that of the
90
Collateral which such assets replace and which shall be otherwise acceptable in
all respects to the Secured Party.
"UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
91
Schedule "B" to UCC-1 Financing Statement
-----------------------------------------
DEBTOR: LLO-GAS, INC.
0000 Xxxxxx Xxxxx Xxxx. Xxxxx 00
Xxxxxx, Xxxxxxxxxx 9026
SECURED PARTY: CONVENIENCE STORE FINANCE COMPANY. LLC
00000 Xxxxxxxx Xxxxxxxxx, 00 xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
ITEM 6. CONTINUED
SIGNATURE OF DEBTOR: LLO-GAS, INC.,
a Delaware corporation
By:_____________________________
Name:___________________________
92
