EXECUTION COPY
FRANCHISE RECEIVABLE FUNDING AND SERVICING AGREEMENT
Dated as of October 14, 1999
by and among
CNL APF PARTNERS, LP,
as Borrower,
NEPTUNE FUNDING CORPORATION,
as Lender,
CNL FINANCIAL SERVICES, LP, as Servicer,
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A.,
"RABOBANK INTERNATIONAL", NEW YORK BRANCH,
as the Collateral Agent and as the Deal Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................1
SECTION 1.1. Certain Defined Terms............................................................................1
SECTION 1.2. Terms............................................................................................1
SECTION 1.3. Incorporation....................................................................................1
SECTION 1.4. Interpretation...................................................................................1
ARTICLE II ADVANCES..............................................................................................1
SECTION 2.1. Advances.........................................................................................1
SECTION 2.2. Procedures for Advances..........................................................................1
SECTION 2.3. Reduction of the Program Amount..................................................................1
SECTION 2.4. Liquidity Advances...............................................................................1
SECTION 2.5. Note.............................................................................................1
SECTION 2.6. Repayments.......................................................................................1
SECTION 2.7. Interest.........................................................................................1
SECTION 2.8. Fees.............................................................................................1
SECTION 2.9. Time and Method of Payments......................................................................1
SECTION 2.10. Additional Costs; Capital Requirements..........................................................1
SECTION 2.11. Breakage Costs..................................................................................1
SECTION 2.12. Taxes...........................................................................................1
ARTICLE III CONDITIONS TO LENDING................................................................................1
SECTION 3.1. Conditions Precedent to Effectiveness of Agreement...............................................1
SECTION 3.2. Conditions Precedent to All Advances.............................................................1
ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................1
SECTION 4.1. Representations and Warranties of the Borrower...................................................1
SECTION 4.2. Representations and Warranties of the Servicer...................................................1
ARTICLE V GENERAL COVENANTS OF THE BORROWER......................................................................1
SECTION 5.1. Affirmative Covenants of the Borrower............................................................1
SECTION 5.2. Negative Covenants of the Borrower...............................................................1
SECTION 5.3. Borrower Hedging Instruments.....................................................................1
ARTICLE VI COLLECTIONS AND DISBURSEMENTS; FEES...................................................................1
SECTION 6.1. Establishment of Accounts........................................................................1
SECTION 6.2. Funding of Collection Account....................................................................1
SECTION 6.3. Borrowing Excess.................................................................................1
SECTION 6.4. Disbursements From the Collection Account -- Payment Date Procedures.............................1
SECTION 6.5. Notification by Servicer.........................................................................1
SECTION 6.6. Investment of Collections........................................................................1
SECTION 6.7. Termination Procedure............................................................................1
ARTICLE VII APPOINTMENT OF THE SERVICER..........................................................................1
SECTION 7.1. Appointment of the Servicer......................................................................1
SECTION 7.2. Duties and Responsibilities of the Servicer......................................................1
SECTION 7.3. Authorization of the Servicer....................................................................1
SECTION 7.4. Servicing Fees...................................................................................1
SECTION 7.5. Negative Covenants of the Servicer...............................................................1
SECTION 7.6. Reporting........................................................................................1
SECTION 7.7. Limited Partnership Existence....................................................................1
SECTION 7.8. No Recourse......................................................................................1
SECTION 7.9. Cooperation With Requests for Information or Documents...........................................1
SECTION 7.10. Successor Servicer..............................................................................1
SECTION 7.11. Transfer of Servicing...........................................................................1
ARTICLE VIII GRANT OF SECURITY INTERESTS.........................................................................1
SECTION 8.1. Borrower's Grant of Security Interest............................................................1
SECTION 8.2. Delivery of Collateral...........................................................................1
SECTION 8.3. Borrower Remains Liable..........................................................................1
SECTION 8.4. Covenants of the Borrower and Servicer Regarding the Collateral..................................1
SECTION 8.5. Limited Recourse.................................................................................1
SECTION 8.6. Release of Collateral............................................................................1
SECTION 8.7. Substitution.....................................................................................1
ARTICLE IX TERMINATION EVENTS....................................................................................1
SECTION 9.1. Termination Events...............................................................................1
SECTION 9.2. Servicer Event of Default........................................................................1
SECTION 9.3. Control of Lockbox Account.......................................................................1
ARTICLE X REMEDIES...............................................................................................1
SECTION 10.1. Actions Upon Termination Event..................................................................1
SECTION 10.2. Application of Proceeds.........................................................................1
SECTION 10.3. Exercise of Remedies............................................................................1
SECTION 10.4. Waiver of Certain Laws..........................................................................1
SECTION 10.5. Power of Attorney...............................................................................1
ARTICLE XI INDEMNIFICATION.......................................................................................1
SECTION 11.1. Indemnities by the Borrower.....................................................................1
SECTION 11.2. Indemnities by the Servicer.....................................................................1
ARTICLE XII MISCELLANEOUS........................................................................................1
SECTION 12.1. Notices, etc....................................................................................1
SECTION 12.2. Binding Effect; Assignability; Termination......................................................1
SECTION 12.3. Costs, Expenses and Taxes.......................................................................1
SECTION 12.4. The Deal Agent..................................................................................1
SECTION 12.5. Confidentiality.................................................................................1
SECTION 12.6. No Proceedings..................................................................................1
SECTION 12.7. Amendments; Waivers; Consents...................................................................1
SECTION 12.8. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................................1
SECTION 12.9. Execution in Counterparts; Severability.........................................................1
SECTION 12.10. Descriptive Headings...........................................................................1
SECTION 12.11. Recourse Against Certain Parties...............................................................1
SECTION 12.12. Signed, sealed and delivered in the............................................................1
ARTICLE XIII WARRANTY DEED.......................................................................................1
SCHEDULES
SCHEDULE 1........List of Pledged Receivables
SCHEDULE 2........Concentration Limits and Tiers
SCHEDULE 3........Approved Concepts
SCHEDULE 4 List of Lockbox Account Banks, Lockboxes and Lockbox Accounts
SCHEDULE 5 Licenses and Permits of Borrower and Servicer Applied for but not Obtained
SCHEDULE 6 Trade Names and Former Names
SCHEDULE 7 Addresses for Notice / UCC Locations
EXHIBITS
EXHIBIT A..................Forms of Borrower's Notice
- Funding Request
- Repayment of Advance
- Reduction of Program Amount
- Termination of Program Amount
EXHIBIT A-1...........Form of Final Transaction Summary
EXHIBIT B Settlement Agent's Letter
- Loan
- Lease
EXHIBIT C Form of Note
EXHIBIT D List of Litigation Matters
EXHIBIT E Form of Officer's Certificate as to Insolvency
EXHIBIT F Form of Monthly Report
EXHIBIT G Copy of Servicer's Credit and Collection Policies
EXHIBIT H Form of Estoppel Letter
EXHIBIT I Successor Servicer
EXHIBIT J The Deal Agent
EXHIBIT K Form of Obligor Note
EXHIBIT L Required Lease Provisions
EXHIBIT M Approved Environmental Assessment Firms
EXHIBIT N [Reserved.]
EXHIBIT O Form of Opinion (Counsel to Borrower - Mortgages
EXHIBIT P-1 Form of Franchise Receivable Assignment - Loan
EXHIBIT P-2 Form of Franchise Receivable Assignment - Lease
EXHIBIT Q Form of Pledged Receivable Supplement
FRANCHISE RECEIVABLE FUNDING AND SERVICING AGREEMENT, dated as
of October 14, 1999 (the "Agreement") by and among CNL APF PARTNERS, LP, a
Delaware limited partnership (the "Borrower"), NEPTUNE FUNDING CORPORATION, a
Delaware corporation ("Neptune" or the "Lender"), COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A., "RABOBANK INTERNATIONAL", NEW YORK BRANCH
("Rabobank"), as collateral agent (in such capacity, the "Collateral Agent") and
as deal agent (in such capacity, the "Deal Agent"), and CNL FINANCIAL SERVICES,
LP, a Delaware limited partnership, as servicer (the "Servicer").
W I T N E S S E T H:
WHEREAS, the Borrower is engaged in the business of, among
other things, making secured Franchise Loans to, and entering into Franchises
Leases with, Obligors owning or operating specified properties under Approved
Concepts, and acquiring such Franchise Loans, and the properties subject to
Franchise Leases, from its affiliates;
WHEREAS, the Borrower and the Lender intend that the Lender
will make Advances to the Borrower from time to time, such Advances to be
secured by the Collateral;
WHEREAS, the Deal Agent has been requested and is willing to
act as agent on behalf of the Lender in connection with the making and financing
of such Advances;
WHEREAS, in order to effectuate the purposes of this
Agreement, the Borrower, the Lender and the Deal Agent desire that a servicer be
appointed to perform certain servicing, administrative and collection functions
in respect of the Collateral;
WHEREAS, the Servicer has been requested and is willing to
perform such servicing, administrative and collection functions in respect of
the Collateral; and
WHEREAS, in order to secure the Advances made to the Borrower
by the Lender and the other Borrower Secured Obligations, the Borrower intends
to grant to the Collateral Agent a security interest in the Franchise
Receivables and the other Collateral.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1.......Certain Defined Terms.
As used herein, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and the
plural forms of the terms defined):
Additional Amounts: Any amounts payable to any Affected Party
under Sections 2.10 and 2.11.
Additional Costs: As defined in Section 2.10(b).
Advance: As defined in Section 2.1.
Adverse Claim: With respect to any Person, any claim of
ownership or any lien, security interest, title retention, trust or other charge
or encumbrance, or other type of preferential arrangement having the effect or
purpose of creating a lien or security interest in any property of such Person.
Affected Party: The Lender, the Deal Agent, any Liquidity
Lender, any letter of credit provider to the Lender, or any affiliate of the
foregoing persons.
Affiliate: As to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For the purposes of this definition, the terms "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or to cause the direction of
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise.
Aggregate Eligible Investment Value: As of the date of any
calculation, an amount equal to the sum of the Eligible Investment Values of all
Eligible Investments which are owned by the Borrower on such date and were
acquired with Collections on account of principal payments on Franchise Loans or
rental payments on Franchise Leases deposited in the Collection Account, reduced
by the sum of all amounts received by the Borrower in respect of the principal
of such Eligible Investments through such date of calculation.
Aggregate Eligible Receivable Value: As of the date of any
calculation, an amount equal to (i) the aggregate Receivable Basis of all
Eligible Receivables, minus (ii) an amount equal to the sum of (x) the aggregate
Receivable Basis of all Eligible Receivables which are Defaulted Receivables,
(y) 50% of the aggregate Receivable Basis of all Eligible Receivables which are
Delinquent Receivables and (z) the aggregate Excess Concentration Amounts (as
defined in Schedule 2).
Aggregate Unpaids: At any time, an amount equal to the
aggregate outstanding principal balance of the Advances, all accrued and unpaid
Yield and all other unpaid Borrower Secured Obligations at such time.
Agreement: This Franchise Receivable Funding and Servicing
Agreement, dated as of October 14, 1999, as amended, modified, supplemented or
restated from time to time.Applicable Margin: Has the meaning given to such term
in the Fee Letter.
Appraised Value: With respect to any property which secures a
Franchise Loan or is the subject of a Franchise Lease, the fair market thereof
as disclosed in a report prepared by an Approved Valuation Company using market
standard valuation methods for valuing property of the relevant type and
otherwise satisfactory to the Deal Agent.
Approved Valuation Company: Valuation Associates or such other
accounting, investment banking or valuation firm as shall have been approved in
writing by the Deal Agent.
Approved Concept: The restaurant concepts set forth in
Schedule 3, as revised from time to time by the Borrower, with the written
approval of the Deal Agent.
Basic Documents: This Agreement, the Note, the Fee Letter, the
Franchise Receivable Assignments, the Custodial Agreement, the Liquidity
Agreement and all agreements, instruments, guarantees, certificates, financing
statements or other documents (including, without limitation, all Mortgages,
Mortgage Assignments and Hedging Instruments, but not including Pledged
Receivables) executed and/or delivered in connection herewith or therewith.
Borrower: CNL APF Partners, LP, a Delaware partnership, and
any successor thereto.
Borrower Account Collateral: As defined in Section 8.1(c).
Borrower Assigned Agreements: As defined in Section 8.1(b).
Borrower Notice: A written notice, in the form of Exhibit A,
to be used for each borrowing, repayment of each Advance, or termination or
reduction of the Program Amount and Optional Prepayments of Advances.
Borrower Secured Obligations: All obligations of every nature
of the Borrower to the Lender or any other Secured Party, now or hereafter
existing, under this Agreement or any other Basic Document, and all amendments,
extensions or renewals hereof or thereof, whether for principal, interest, fees,
expenses or otherwise, whether now existing or hereafter arising, voluntary or
involuntary, whether or not jointly owned with others, direct or indirect,
absolute or contingent, liquidated or unliquidated, and whether or not from time
to time decreased or extinguished and later increased, created or incurred and
all or any portion of such obligations that are paid, to the extent all or any
part of such payment is avoided or recovered directly or indirectly from the
Lender or any such Secured Party as a preference, fraudulent transfer or
otherwise.
Borrowing Base: At any time, the sum of (i) 85% of the
Aggregate Eligible Receivable Value as of such date, plus (ii) the Aggregate
Eligible Investment Value as of such date, plus (iii) the aggregate amount of
Collections on account of principal payments on Franchise Loans and rental
payments on Franchise Leases on deposit in the Collection Account on such day
(excluding any such Collections invested in Eligible Investments).
Borrowing Excess: For any date, as disclosed in the most
recently submitted Borrower Notice or Monthly Report, the amount, if any, by
which the aggregate outstanding principal balance of the Advances as of such
date exceeds the lesser of (i) the Program Amount and (ii) the Borrowing Base.
Breakage Costs: As defined in Section 2.11.
Business Day: Any day of the year other than a Saturday,
Sunday or any day on which banks generally are required, or authorized, to close
in New York, New York.
Cash Flow: As to any calculation at the level of an Obligor
(which shall be deemed to include its consolidated Affiliates), an amount equal
to (a) the sum of (i) net income, (ii) income tax, (iii) interest expense, (iv)
all non-cash amounts in respect of depreciation and amortization, (v) all
non-recurring expenses, (vi) the amount of any management fees paid by such
Obligor in excess of 2% of annual sales and (vii) all operating lease or rent
expense, less (b) all non-recurring income.
As to any calculation at the Unit level, an amount equal to
(a) the sum of (i) net income, (ii) income tax, (iii) interest expense, (iv) all
non-cash amounts in respect of depreciation and amortization, (v) all
non-recurring expenses, (vi) the amount of any management fees paid with respect
to such Unit in excess of the greater of 2% of annual sales or $20,000 and (vii)
all operating lease or rent expense, less (b) all non-recurring income.
Closing Date: October 14, 1999.
Collateral: As defined in Section 8.1.
Collateral Agent: Rabobank in its capacity as Collateral agent
for the Lender and the other Secured Parties, and any successor thereto in such
capacity.
Collection Account: The account maintained with the Depositary
described in Section 6.1(b).
Collection Account Deficiency: For any Payment Date, any
deficiency in the amounts on deposit in the Collection Account necessary to make
the payments required under Sections 6.4(a)(i) through (v).
Collection Period: Each calendar month, except that the first
Collection Period shall be the period from and including the Closing Date to and
including the last day of the calendar month in which the Closing Date occurs.
Collections: All cash collections and other Proceeds of the
Collateral including, without limitation, (i) all payments of principal and
interest in respect of Franchise Loans, (ii) all basic rent and percentage rent
payments in respect of Franchise Leases, (iii) all late charges, penalties, fees
and interest arising in connection with any Franchise Receivable and recoveries
with respect to Franchise Receivables that have been written off as
uncollectible, (iv) all payments made to or for the benefit of the Borrower
under any Obligor Document or Basic Document and (v) all cash proceeds from the
sale, re-lease or other disposition of any of the Collateral; provided, however,
that "Collections" shall not include any payments made in respect of Franchise
Leases (including without limitation payments for insurance, real estate tax and
sales tax) except as described in items (ii) and (v).
Commitment: The commitment of the Lender to make Advances to
the Borrower, on the terms and conditions set forth herein, in an aggregate
principal amount not to exceed at any one time outstanding the Program Amount.
Commitment Termination Date: The earlier of (i) the
Termination Date and (ii) the Scheduled Commitment Termination Date.
Company Obligor: A franchisor of an Approved Concept.
Concentration Limits: The Concentration Limits set forth in
Schedule 2, as revised from time to time by the Borrower with the prior written
approval of the Deal Agent.
Covered Taxes: As defined in Section 2.12.
CP Rate: For any day during any Yield Period, a rate
equivalent to the sum of (i) the per annum rate equivalent to the weighted
average of the per annum rates paid or payable by the Lender from time to time
as interest on commercial paper notes or otherwise (by means of interest rate
▇▇▇▇▇▇ or otherwise and taking into consideration any incremental carrying costs
associated with short-term promissory notes issued by the Lender maturing on
dates other than those certain dates on which the Lender is to receive funds) in
respect of the promissory notes issued by the Lender that are allocated, in
whole or in part, by the Deal Agent (on behalf of the Lender) to fund or
maintain the Advances during such period, as determined by the Deal Agent (on
behalf of the Lender) and reported to the Borrower and the Servicer, which rates
shall reflect and give effect to (A) the commissions of placement agents and
dealers in respect of such promissory notes, to the extent such commissions are
allocated, in whole or in part, to such promissory notes by the Deal Agent (on
behalf of the Lender) and (B) other borrowings by the Lender, including, without
limitation, borrowings to fund small or odd dollar amounts that are not easily
accommodated in the commercial paper market; provided, however, that if any
component of such rate is a discount rate, in calculating the CP Rate, the Deal
Agent shall for such component use the rate resulting from converting such
discount rate to an interest bearing equivalent rate per annum, plus (ii) the
Applicable Margin.
Credit and Collection Policies: The credit, collection,
customer relations and service policies and procedures of the Servicer in effect
on the Closing Date, a description of which is attached as Exhibit G and as such
policies and procedures may hereafter be amended, modified or supplemented from
time to time in accordance with Section 7.5(e).
Custodian: U.S. Bank National Association or such other
custodian as the Collateral Agent may appoint.
Custodial Agreement: That certain Custodial Agreement dated as
of the date hereof among the Custodian, Collateral Agent, Deal Agent, Servicer
and Borrower.
DCR: Duff & ▇▇▇▇▇▇ Credit Rating Co. and any successor
thereto.
Deal Agent: Rabobank, in its capacity as agent for the Lender
hereunder, and any successor thereto in such capacity.
Debt: As to any Person at any date, all liabilities,
obligations and indebtedness (actual or contingent) of such Person (a) for
borrowed money, (b) evidenced by promissory notes, bonds, debentures, notes or
other similar instruments, (c) to pay the deferred purchase price of property or
services, (d) as lessee under leases which have been or should be, in accordance
with GAAP, recorded as capital leases, (e) secured by any lien or other charge
upon a property or asset owned by such Person, even though such Person has not
assumed or become liable for the payment of such obligations, (f) under any
interest rate swap, interest rate cap, interest rate floor, interest rate
collar, or other hedging instrument or agreement, (g) under reimbursement
agreements or similar agreements with respect to the issuance of letters of
credit (other than obligations in respect of letters of credit opened to provide
for payment of goods and services purchased in the ordinary course of business),
(h) under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (a) through (g) above, or (i) for
liabilities in respect of unfunded vested benefits under plans covered by ERISA.
For the purposes hereof, all liabilities, obligations and indebtedness shall be
without duplication and the term "guarantee" shall include any agreement,
whether such agreement is on a contingency or otherwise, to purchase, repurchase
or otherwise acquire Debt of any other Person, or to purchase, sell or lease, as
lessee or lessor, property or services, in any such case primarily for the
purpose of enabling another person to make payment of Debt, or to make any
payment (whether as an advance, capital contribution, purchase of an equity
interest or otherwise) to assure a minimum equity, asset base, working capital
or other balance sheet or financial condition, in connection with the Debt of
another Person, or to supply funds to or in any manner invest in another Person
in connection with the Debt of such Person.
Defaulted Receivable: With respect to any Collection Period,
any Franchise Receivable (i) that is more than 90 days past due in the payment
of principal or interest or rent as of the end of such Collection Period, (ii)
as to which the Obligor thereunder has become the subject of an Event of
Bankruptcy, or (iii) that has been, or should be, considered defaulted or has
been, or should be, placed on non-accrual status in accordance with the Credit
and Collection Policies.
Delinquency Ratio: With respect to any Collection Period, the
ratio, expressed as a percentage, the numerator of which is the aggregate
Receivable Basis of all Eligible Receivables greater than 60 days past due in
the payment of interest or principal or rent that are not Defaulted Receivables,
and the denominator of which is the Aggregate Eligible Receivable Value, in each
case as of the last day of such Collection Period.
Delinquent Receivable: With respect to any Collection Period,
any Franchise Receivable that is greater than 60 days past due in the payment of
principal or interest or rent as of the end of such Collection Period.
Depositary: Rabobank.
Determination Date: With respect to any Payment Date, the last
day of the immediately preceding calendar month.
Dollar and $: Lawful currency of the United States of America.
Effective Date: The date on which the conditions specified in
Section 3.1 shall have been satisfied.
Eligible Assignee: (a) A Person whose short-term unsecured and
unguaranteed obligations are rated at least A-1 by S&P and D-1 by DCR, or whose
obligations under the Liquidity Agreement are guaranteed by a Person whose
short-term ratings are at least A-1 by S&P and D-1 by DCR, or (b) such other
Person satisfactory to the Lender, the Deal Agent and each of the rating
agencies rating any of the short-term commercial paper notes issued by the
Lender.
Eligible Investments: One or more of the following types of
investments:
(a)......marketable obligations of the United States, the full
and timely payment of which are backed by the full faith and credit of the
United States which have a maturity of not more than 270 days from the date of
acquisition;
(b)......marketable obligations, the full and timely payment
of which are directly and fully guaranteed by the full faith and credit of the
United States and which have a maturity of not more than 270 days from the date
of acquisition;
(c)......bankers' acceptances and certificates of deposit and
other interest-bearing obligations (in each case having a maturity of not more
than 270 days from the date of acquisition) denominated in Dollars and issued by
any bank with capital, surplus and undivided profits aggregating at least
$100,000,000, the short-term securities of which are rated at least A-1 by S&P
and, if rated by DCR, at least D-1 by DCR and, if rated by ▇▇▇▇▇'▇, at least P-1
by ▇▇▇▇▇'▇;
(d) .....repurchase obligations with a term of not more than
ten days for underlying securities of the types described in clauses (a), (b)
and (c) above entered into with any bank of the type described in clause (c)
above;
(e)......commercial paper rated at least A-1 by S&P and, if
rated by DCR, at least D-1 by DCR and, if rated by ▇▇▇▇▇'▇, at least P-1 by
▇▇▇▇▇'▇; and
(f)......demand deposits, time deposits or certificates of
deposits (having original maturities of no more than 365 days) of depositary
institutions or trust companies incorporated under the laws of the United States
or any state thereof (or domestic branches of any foreign bank) and subject to
supervision and examination by federal or state banking or depository
institution authorities; providedthat at the same time such investment, or the
commitment to make such investment, is entered into, the short-term debt rating
of such depository institution or trust company shall be rated at least A-1 by
S&P and, if rated by DCR, at least D-1 by DCR and, if rated by ▇▇▇▇▇'▇, at least
P-1 by ▇▇▇▇▇'▇.
Eligible Investment Value: As of the date of any calculation,
for any Eligible Investment, the cash purchase price paid (which may include
accrued interest through the date of such purchase) to acquire such Eligible
Investment for the Collection Account; provided, however, if such Eligible
Investment was not acquired for cash, then the Eligible Investment Value for
such Eligible Investment shall be the amount agreed upon by the Borrower and the
Deal Agent at the time such Eligible Investment was acquired.
Eligible Obligor: Any Obligor liable, or any group of Obligors
who together are jointly and severally liable, for a Franchise Receivable, and
which Obligor individually, or group of Obligors collectively, satisfies each of
the following requirements at the time such Franchise Receivable is added to the
Pledged Receivables hereunder and, to the extent provided below, at all other
times:
(a)......at all times, the Obligor is a franchisee under an
Approved Concept, or is a Company Obligor that is operating restaurants within
an Approved Concept;
(b)......at all times, the Obligor is a U.S. Person as defined
under the IRC, unless otherwise approved by the Deal Agent in its sole
discretion;
(c)......the Obligor (i) is a Company Obligor or has entered
into a franchise agreement with respect to the Approved Concept and is in
compliance with all material terms and conditions of such franchise agreement,
or (ii) if the Obligor is not a Company Obligor and is seeking funding with
respect to construction of all or part of a restaurant and such restaurant
remains uncompleted at the time such Franchise Receivable is added to the
Pledged Receivables hereunder, the Obligor shall have executed a franchise
agreement with an Approved Concept within seven (7) months after the time such
Franchise Receivable is added to the Pledged Receivables hereunder;
(d)......the Obligor is not an Affiliate of the Borrower, or
if it is an Affiliate of the Borrower, the Lender, in its sole discretion, shall
have given its prior written consent to such Person qualifying as an "Eligible
Obligor";
(e)......the Obligor is not delinquent in the payment of (to
the extent liable therefor) any ground rent, taxes or other assessment
attachable to the collateral securing the Franchise Receivable (or, in the case
of a Franchise Lease, any of the Real Property which is the subject of such
Franchise Lease), unless the proceeds of such Franchise Receivable are used to
cure such delinquency;
(f)......the Obligor is a Company Obligor or the term of the
Obligor's franchise agreement is at least equal to the remaining term of the
related Franchise Receivable or allows for renewal periods or successor
franchise agreements the cumulative term of which will be greater than or equal
to the term of such Franchise Receivable;
(g)......to the knowledge of the Borrower and the Servicer,
(i) the Obligor is not in default in any material respect under any existing
Franchise Receivable or other lease or loan agreement with any lender or
landlord (unless such default will be cured by virtue of the funding under the
Franchise Receivable), (ii) the Obligor, if a franchisee, is not in default
under any franchise agreement and (iii) no Event of Bankruptcy has occurred with
respect to such Obligor during the preceding five (5) years;
(h)......the Obligor or Affiliates thereof operate and manage
at least four (4) additional casual dining restaurants or at least four (4)
additional quick service restaurants under Approved Concepts; and
(i)......the Obligor or Affiliates thereof have operated or
managed one or more Approved Concepts for at least three (3) years.
Eligible Receivable: A Franchise Receivable (i) which is a
Pledged Receivable, and (ii) which, unless otherwise agreed to in writing by the
Deal Agent, satisfies each of the following requirements at the time such
Franchise Receivable is added to the Pledged Receivables hereunder and, to the
extent provided below, at all other times:
(a)......at all times such Franchise Receivable is either (i)
a Fee Simple Loan, a Ground Lease Loan or an Enterprise Loan or (ii) a Franchise
Lease consisting of a triple-net lease on Real Property, fee title of which Real
Property is vested in the Borrower free and clear of any Adverse Claim or
Restrictions on Transferability (other than Permitted Liens);
(b)......such Franchise Receivable was originated, documented
and closed in accordance with the terms of the Credit and Collection Policies
(excluding for these purposes policies relating to minimum LTV Ratios) and in
the ordinary course of business of the Borrower or a Transferring Affiliate;
(c)......such Franchise Receivable was originated pursuant to
a commitment letter issued in the name of the Borrower or a Transferring
Affiliate in connection with one or more Units to be operated under an Approved
Concept;
(d)......at all times such Franchise Receivable has an
amortization schedule and final maturity (in the case of a Franchise Loan) or an
original lease term (in the case of a Franchise Lease) of no more than 20 years;
(e)......such Franchise Receivable on the date of its
origination and the related Funding Date is not a Defaulted Receivable or a
Delinquent Receivable;
(f)......such Franchise Receivable at all times is evidenced
by (i) in the case of a Franchise Loan, one or more notes (provided that there
shall not be more than one note per Unit site) in substantially the form
attached hereto as Exhibit K, each of which is duly endorsed in blank or (ii) in
the case of a Franchise Lease, one or more leases (provided that there shall not
be more than one lease per Unit site) which satisfies each of the requirements
specified in Exhibit L;
(g)......payment on the Franchise Receivable is, at all times,
due monthly; and such Franchise Receivable either has a fixed Receivable Yield
equal to or greater than the equivalent yield to maturity on a ten (10) year
U.S. Treasury Security (the "Treasury Rate") plus 250 basis points, or a
floating Receivable Yield equal to or greater than LIBOR plus 250 basis points;
(h)......at all times, each Obligor in respect of such
Franchise Receivable has been instructed, or has received coupon books
instructing it, to remit all payments to a Lockbox;
(i)......such Franchise Receivable was originated in
accordance with and, together with the related Obligor Documents, satisfies any
and all requirements of, all applicable federal, state, and other applicable
laws and regulations (including, without limitation, all such laws and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity and usury);
(j)......at all times, such Franchise Receivable has an LTV
Ratio that is no greater than (i) 70% if such Franchise Receivable is a Fee
Simple Loan, (ii) 60% if such Franchise Receivable is an Enterprise Loan or a
Ground Lease Loan and (iii) 94% if such Franchise Receivable is a Franchise
Lease;
(k)......the consolidated FCCR at the Obligor level in respect
of such Franchise Receivable equals or exceeds 1.20x and the FCCR at the Unit
level for each Unit related to such Franchise Receivable equals or exceeds
1.10x; provided, that if such Franchise Receivable is a Franchise Lease whose
Obligor operates and manages (or has Affiliates which operate or manage) at
least 10 separate Units under Approved Concepts, the FCCR at the Unit level for
each Unit related to such Franchise Receivable need not equal or exceed 1.10x;
(l)......at all times, such Franchise Receivable, if a Ground
Lease Loan or an Enterprise Loan, is supported by a lease term on the premises
at least as long as such Franchise Receivable's final maturity, or is subject to
renewals or options to renew that, if exercised, will cause such lease term to
exceed the Franchise Receivable's final maturity;
(m)......at all times, the Borrower shall be the owner of such
Franchise Receivable free and clear of any Adverse Claims other than Permitted
Liens, and all filings (including, without limitation, all Mortgages, Mortgage
Assignments and financing statements described in the definition of "Obligor
Documents") required in order to cause (i) the Borrower to have a first priority
perfected security interest in, and lien on, the collateral securing such
Franchise Receivable, (ii) in the case of a Franchise Lease, the legal and
beneficial ownership of the Real Property which is the subject of such Franchise
Lease to be vested in the Borrower, free and clear of any Adverse Claims and
Restrictions on Transferability (other than Permitted Liens) and (iii) the
Collateral Agent to have a first priority perfected security interest in, and
lien on, all Collateral relating to such Franchise Receivable (including,
without limitation, any Real Property securing any Franchise Loan or the subject
of any Franchise Lease) have, in each case of clauses (i), (ii) and (iii), been
duly filed and recorded with all appropriate Governmental Authorities or have
been released to the title insurer or local recording office for timely filing
and recording in the ordinary course and all fees in respect of such filings
have been paid in full;
(n)......at all times, the property which secures such
Franchise Receivable (and, in the case of a Franchise Lease, all property which
is the subject of such Franchise Lease) is insured against loss or damage by all
hazards (except for earthquake and flood hazards) included in standard extended
coverage and the Collateral Agent is named as an additional insured and loss
payee;
(o)......at all times such Franchise Receivable, if a
Franchise Lease or a fixed rate Franchise Loan, is covered by a Hedging
Instrument (either individually or on a portfolio basis) acceptable to the Deal
Agent and (i) in the case of a fixed rate Franchise Loan, has a prepayment
penalty sufficient to cover any swap breakage costs associated with early
termination (in whole or in part) of such Hedging Instrument to the extent such
Franchise Loan is prepayable and (ii) in the case of a Franchise Lease, is
non-cancelable for five (5) years (subject to certain exceptions relating to
casualty and condemnation and substitution of leases as set forth in the lease
provisions attached hereto as Exhibit L) and, to the extent the Obligor or any
of its Affiliates has any option or obligation to purchase the property which is
the subject of such Franchise Lease, such Franchise Lease or the relevant
agreement under which such option or obligation arises provides that such
purchase shall be made at a purchase price equal to at least 115% of the Rent
Cost Basis of such property, provided that such minimum purchase price
requirement shall not apply with respect to a Franchise Lease if (i) the Deal
Agent shall have agreed in writing that such Franchise Receivable may be treated
as an Eligible Receivable hereunder notwithstanding its failure to satisfy such
requirement and (ii) after giving effect to such treatment, no more than 20% of
the Maximum Funded Collateral Amount would consist of Franchise Leases which
fail to satisfy such requirement
(p)......all Real Property securing or supporting payments on
such Franchise Receivable (including, in the case of a Franchise Lease, all Real
Property subject to such Franchise Lease) is in compliance with all
Environmental Laws, as confirmed by (i) in the case of an Enterprise Loan or a
Ground Lease Loan, an environmental questionnaire and other environmental due
diligence obtained and completed in accordance with the Credit and Collection
Policy with respect to such Real Property no more than six months prior to
originating such Franchise Loan and (ii) in the case of a Franchise Lease or a
Fee Simple Loan, an Environmental Site Assessment obtained and completed in
accordance with the Credit and Collection Policy with respect to such Real
Property no more than six months prior to origination of such Franchise Lease or
Fee Simple Loan;
(q)......a complete set of Obligor Documents has been executed
and delivered with respect to such Franchise Receivable, which Obligor Documents
(i) at all times, together with such Franchise Receivable, are in full force and
effect and constitute the legal, valid and binding obligation of each related
Obligor, enforceable against each such Obligor in accordance with its terms and,
at the time such Franchise Receivable is added to the Pledged Receivables
hereunder, are not subject to any dispute, offset, counterclaim or defense
whatsoever, (ii) if such Franchise Receivable is a Franchise Loan, such
Franchise Loan at all times is substantially in a form that has been approved by
the Deal Agent (such approval not to be unreasonably withheld), or if such
Franchise Receivable is a Franchise Lease, such Franchise Lease at all times
complies with the Required Lease Provisions set forth in Exhibit L and (iii)
have been received by the Custodian within fifteen (15) Business Days of such
Franchise Receivable being included in the Pledged Receivables;
(r)......at all times, the collateral securing such Franchise
Receivable (and, in the case of a Franchise Lease, the Real Property which is
the subject of such Franchise Lease) is located in the United States or a
territory of the United States or in any other country approved by the Deal
Agent (in its sole discretion);
(s)......the Obligor with respect to such Franchise Receivable
is an Eligible Obligor;
(t)......in the case of a Franchise Loan, such Franchise Loan,
if originated at the same time as other Franchise Loans having the same Obligor,
is cross-defaulted with such other Franchise Loans, such that a default under
one such Franchise Loan will constitute a default under the other such Franchise
Loans;
(u)......if such Franchise Receivable was originated by a
Transferring Affiliate, then such Franchise Receivable has been duly assigned to
the Borrower by such Transferring Affiliate in accordance with a Franchise
Receivable Assignment and all consideration required to be paid by the Borrower
to such Transferring Affiliate with respect to such assignment has been paid in
full;
(v)......in the case of a Franchise Lease, if after giving
effect to the inclusion of such Franchise Lease in the Collateral the aggregate
Receivable Basis for all Franchise Leases covering property in the same State
would be equal to or greater than $15,000,000, then the Deal Agent shall have
received an opinion substantially in the form attached hereto as Exhibit O
covering the laws of such State from counsel reasonably satisfactory to the Deal
Agent (it being understood that such opinion need only be delivered once for
each applicable State);
(w)......in the case of a Franchise Loan, the debt obligation
under such Franchise Receivable constitutes an "instrument" or a "general
intangible" within the meaning of the UCC of the jurisdiction which governs
perfection of a security interest in such Franchise Receivable; and
(x)......such Franchise Receivable has not been extended,
amended, forgiven, discharged, waived, canceled or otherwise modified in any
material respect at any time since it was initially included in the Collateral
except as permitted by Section 5.2(b) and Section 7.5(b); provided that the
Borrower may consent to the assignment of any Franchise Lease not subject to
assignment restrictions in the related franchise agreement so long as the
assignee is an Eligible Obligor hereunder.
Enterprise Loan: Any Franchise Loan secured by a first
priority perfected security interest in, or lien on, the Obligor's rights as
lessee to access and operate the related Unit.
Environmental Laws: Any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued, by the United
States of America, any state of the United States and any political subdivision
of any of the foregoing (and any agency, department, commission, board, bureau,
court or other tribunal having jurisdiction over any Obligor, the Borrower, any
Transferring Affiliate or any of their respective property) relating to
environmental matters in any jurisdiction where any Obligor, any Transferring
Affiliate or the Borrower owns, leases or operates its property or under federal
law .
Environmental Site Assessment: A Phase I environmental site
assessment and testing report prepared according to ASTM standards which
presents a description of the subject real property, its location, surroundings,
use, proposed use and any associated environmental issues and problems, or such
further environmental audit and testing report as shall be recommended in the
Phase I environmental site assessment and testing report from time to time,
conducted by an Environmental Site Assessment Firm.
Environmental Site Assessment Firm: Any of the environmental
audit firms listed on Exhibit M hereto, and any other environmental audit firm
of national standing which specializes in environmental audits and inspections
which firms shall from time to time be approved in writing by the Deal Agent.
ERISA: The Employee Retirement Income Security Act of 1974, as
it may be amended from time to time and the regulations promulgated thereunder.
Eurodollar Disruption Event: With respect to any day occurring
in any Yield Period, any of the following: (a) a determination by any Liquidity
Lender on such day that it would be contrary to law or to the directive of any
central bank or other governmental authority (whether or not having the force of
law) to obtain United States Dollars in the London interbank market to make,
fund or maintain any Liquidity Loan during such Yield Period, (b) a
determination by any Liquidity Lender on such day that the rate at which
deposits of United States Dollars are being offered to such Liquidity Lender in
the London interbank market does not accurately reflect the cost to such
Liquidity Lender of making, funding or maintaining any Liquidity Loan during
such Yield Period or (c) the inability of any Liquidity Leader on such day to
obtain United States Dollars in the London interbank market to make, fund or
maintain any Liquidity Loan to be made by it during such Yield Period.
Event of Bankruptcy: With respect to any specified Person, the
occurrence of any of the following events:
(a)......a case or other proceeding shall be commenced,
without the application or consent of such Person, in any court, seeking the
liquidation, reorganization, debt arrangement, dissolution, winding up, or
composition or readjustment of debts of such Person, the appointment of a
trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for
such Person or any substantial part of its assets, or any similar action with
respect to such Person under any law (foreign or domestic) relating to
bankruptcy, insolvency, reorganization, winding up or composition or adjustment
of debts, and such case or proceeding shall continue undismissed, or unstayed
and in effect, for a period of 60 days or an order for relief in respect of such
Person shall be entered in an involuntary case under the federal bankruptcy laws
or other similar laws (foreign or domestic) now or hereafter in effect; or
(b)......such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors, or shall fail to, or
admit in writing its inability to, pay its debts generally as they become due.
Facility Maturity Date: The earliest of (i) the Termination
Date, (ii) the Scheduled Facility Maturity Date, (iii) the third anniversary of
the Scheduled Commitment Termination Date and (iv) the third anniversary of any
borrowing by the Lender under the Liquidity Agreement to fund an Advance to the
Borrower, if such borrowing shall remain outstanding as of such third
anniversary.
FCCR: The "fixed charge coverage ratio" (i) as to any
calculation at the Obligor level is the ratio of (a) the Obligor's Cash Flow for
the trailing twelve months, to (b) the Obligor's Fixed Charges for such period,
and (ii) as to any calculation at the Unit level is the ratio of (x) the Unit's
Cash Flow for the trailing twelve months, to (y) the Unit's Fixed Charges for
such period.
Fee Letter: The fee letter agreement dated as of the date
hereof, among the Borrower, the Servicer, the Lender and the Deal Agent, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
Fee Simple Loan: Any Franchise Loan secured by a first
priority perfected security interest in, or lien on, the Obligor's (or that of
any Affiliate of the Obligor) fee simple ownership interest in the land and
building on which the related Unit will be located.
Final Transaction Summary: A final transaction summary for
each Franchise Receivable and each that is the subject of a proposed Advance, in
substantially the form of Exhibit A-1.
Fixed Charges: As to any Obligor or Unit, all of such
Obligor's or Unit's annual payments (principal and interest) due on (i) all
loans, (ii) capital lease obligations and (iii) operating leases or rent.
Franchise Lease:
(a)......all obligations of an Obligor under a lease entered
into in connection with a Unit, including the right to payment of any rent,
interest or finance charges and other obligations of such Obligor with respect
thereto;
(b)......the Real Property which is the subject of such lease,
together with all security interests in, or other liens on, any other property
securing or purporting to secure the Obligor's obligations in respect of such
lease;
(c)......all guarantees, indemnities and warranties and
proceeds thereof, proceeds of insurance policies, financing statements and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such obligations and all other Obligor Documents and Basic
Documents relating to such lease;
(d)......all right, title and interest of the Borrower or any
Affiliate of the Borrower in, to and under any related franchise agreements;
(e)......all Collections with respect to any of the foregoing;
and
(f)......all Proceeds with respect to any of the foregoing;
provided, that no Franchise Lease may relate to more than one Unit.
Franchise Loan:
(a)......indebtedness of an Obligor arising in connection with
one or more Units, including the right to payment of any interest or finance
charges and other obligations of such Obligor with respect thereto;
(b)......all security interests in, or liens on, any property
(whether real or personal) securing or purporting to secure payment by the
Obligor;
(c)......all guarantees, indemnities and warranties and
proceeds thereof, proceeds of insurance policies, financing statements and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such indebtedness and all other Obligor Documents and Basic
Documents relating to such indebtedness;
(d)......all right, title and interest of the Borrower and any
Affiliate of the Borrower in, to and under any related franchise agreements;
(e)......all Collections with respect to any of the foregoing;
and
(f)......all Proceeds with respect to any of the foregoing;
provided, that any Franchise Loan may relate to one or more Units.
Franchise Receivable: A Franchise Lease or a Franchise Loan.
Franchise Receivable Assignment: The instrument of assignment
of Pledged Receivables from a Transferring Affiliate to the Borrower in
substantially the form of Exhibit P-1 for Franchise Loans and Exhibit P-2 for
Franchise Leases.
Funding Date: Each day on which an Advance is made.
Funding Request: A Borrower Notice requesting an Advance and
including the items required by Section 2.2.
GAAP: Generally accepted accounting principles as in effect in
the United States, consistently applied, as of the date of such application.
Governmental Authority: The United States of America, any
state, local or other political division thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions thereof
or pertaining thereto.
Ground Lease Loan: Any Franchise Loan secured by a first
priority perfected security interest in, or lien on, the Obligor's ownership of
the building in which the related Unit is located and its rights as lessee of
the property on which such building is situated.
Hedge Counterparty: An entity acceptable to the Deal Agent (i)
whose commercial paper or short-term deposit rating is, at the time it enters
into a Hedging Instrument with the Borrower, at least D-1 by DCR (if rated by
DCR) and at least A-1 by S&P and, if rated by ▇▇▇▇▇'▇ at least P by ▇▇▇▇▇'▇ (ii)
which shall have, at the time it enters into a Hedging Instrument with the
Borrower, a long-term unsecured debt rating of at least A by S&P, and (iii)
which has entered into a Hedging Instrument.
Hedging Instrument: Any interest rate swap agreement, interest
rate cap agreement, interest rate floor agreement, interest rate collar
agreement or other interest rate hedging instrument or agreement acceptable to
the Deal Agent and entered into by the Borrower with a Hedge Counterparty, with
payment dates to Borrower no less frequently than quarterly.
Income Taxes: Any federal, state, local or foreign taxes based
upon, measured by, or imposed upon gross or net income, gross or net receipts,
capital, net worth, or the privilege of doing business, including without
limitation franchise taxes, and any minimum taxes or withholding taxes based
upon any of the foregoing, including any penalties, interest or additions to tax
imposed with respect thereto.
Indemnified Amounts: As defined in Section 11.1(a).
Indemnified Party: As defined in Section 11.1(a).
Ineligible Receivable: As defined in Section 8.7.
Investments: With respect to any Borrower Account Collateral,
the certificates, instruments or other Eligible Investments in which amounts
credited to the accounts included in the Borrower Account Collateral are
invested from time to time.
IRC: The U.S. Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Lender: Neptune, together with its successors and assigns.
Lien: With respect to any item of property, (a) any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, in respect of
such property or (b) the interest of a vendor or lessor under any conditional
sale agreement, financing lease or other title retention agreement relating to
such property.
Liquidity Agreement: The Liquidity Agreement dated as of
October 14, 1999, among Neptune, Rabobank, as the Liquidity Agent for the
Liquidity Lenders, and the Liquidity Lenders from time to time parties thereto,
as the same may be amended, restated, supplemented or otherwise modified from
time to time.
Liquidity Lender: Any financial institution from time to time
party to the Liquidity Agreement as a "Lender" thereunder.
Liquidity Loan: An "Advance" under (and as defined in) the
Liquidity Agreement.
Loans: Any indebtedness, including Advances, evidenced by the
Note and issued by the Borrower to an Affected Party.
Lockbox: A post office box to which Collections are remitted.
Lockbox Account: A depository account, lockbox account or
similar account in which any Collections are collected or deposited, which
account shall be in the name of "CNL Financial Services, LP, as servicer."
Lockbox Account Bank: Any bank or other financial institution
at which a Lockbox Account has been established.
Lockbox Agreement: An agreement among a Lockbox Account Bank,
the Servicer and the Deal Agent in form and substance satisfactory to the Deal
Agent and the other parties thereto.
LTV Ratio: With respect to any Franchise Receivable, a
fraction, expressed as a percentage, the numerator of which is the Receivable
Basis of such Franchise Receivable, and the denominator of which is (i) in the
case of a Franchise Lease, the Appraised Value of the Real Property which is the
subject of such Franchise Lease and (ii) in the case of a Franchise Loan, the
Appraised Value of the collateral securing such Franchise Loan. The Appraised
Value of any such property shall be determined as of a date on or about the date
on which the relevant Franchise Receivable was originated.
Material Adverse Effect: A material adverse effect on (i) the
financial condition, business or operations of the Borrower, the Servicer or any
Transferring Affiliate, (ii) the ability of the Borrower, the Servicer or any
Transferring Affiliate to perform its obligations under any Basic Document,
(iii) the legality, validity or enforceability of any Basic Document, (iv) the
Borrower's or the Collateral Agent's interest in the Collateral generally or in
any significant portion of the Collateral or the perfection or validity of any
such interest, (v) the collectibility of the Franchise Receivables included in
the Collateral generally or of any material portion of such Franchise
Receivables or (vi) the value of the Real Property included in the Collateral
generally or any material portion of such Real Property.
Maximum Funded Collateral Amount: $172,900,000.
Maximum Lawful Rate: As defined in Section 2.7(c).
Monthly Report: A report in the form of Exhibit F with blanks
appropriately completed.
▇▇▇▇▇'▇: ▇▇▇▇▇'▇ Investors Services, Inc. and any successor
thereto.
Mortgage: Any mortgage, deed of trust, security agreement,
assignment of lease or rent, or other Lien or security interest granted in
respect of Real Property executed by (i) an Obligor or guarantor of an Obligor
to secure such Obligor's obligations under or with respect to any Franchise
Receivable or (ii) the Borrower to secure the payment of the Borrower Secured
Obligations.
Mortgage Assignment: A mortgage assignment forming part of the
Obligor Documents pursuant to which the Borrower shall make a collateral
assignment of a Mortgage to the Collateral Agent.
Note: As defined in Section 2.5(a).
Note Interest: For any Yield Period, the aggregate accrued and
unpaid Yield with respect to each Advance that was outstanding at any time
during such Yield Period.
Obligor: With respect to any Franchise Receivable, the Person
or Persons obligated to make payments with respect thereto, including any
guarantor thereof.
Obligor Documents: With respect to:
(a)......any Franchise Loan:
(i) the original promissory note (x) executed in favor of the
Borrower and endorsed by the Borrower in blank, or endorsed to
"COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK, B.A., NEW YORK
BRANCH, as Collateral Agent" and any note given in substitution
therefor or (y) executed in favor of an Affiliate of the Borrower and
endorsed by such Affiliate to the Borrower and endorsed by the Borrower
in blank, or endorsed by the Borrower to "COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK, B.A., NEW YORK BRANCH, as Collateral Agent"
and any note given in substitution therefor;
(ii) an original recorded Mortgage executed by the Obligor in
favor of the Borrower (or, if such Franchise Loan was originated by a
Transferring Affiliate, such Transferring Affiliate) securing the above
note; provided, that, in lieu of a recorded document, the Custodian may
accept a copy certified by the records office or an escrow or title
company, with the original to be delivered to the Custodian within 180
days of the date of delivery of the above note to the Custodian;
provided, further, that if within such 180 day period the original
recorded instrument cannot be delivered solely because of a delay
caused by the recording office to which such instrument was delivered
for recordation, the Borrower or the Servicer on behalf of the Borrower
shall deliver to the Custodian and the Deal Agent an Officer's
Certificate stating that such delay has occurred and shall use all
reasonable efforts to cause the original recorded instrument to be
delivered to the Custodian within one (1) year of the date of delivery
of the above note by the Borrower to the Custodian;
(iii) the original or a copy, certified by the records office
or an escrow or title company, of a Mortgage Assignment by the Borrower
to the Collateral Agent in recordable form, and the original or a copy,
certified by the records office or an escrow or title company, of a
properly recorded assignment or assignments of the related mortgage or
deed of trust from the original holder, through any subsequent
transferees, to the Borrower;
(iv) a copy of the executed franchise agreement(s) and
collateral assignment(s) thereof to the Borrower or the Transferring
Affiliate, as applicable, if permitted by franchisor, the executed
pre-franchise agreement, if any, or such other documentation evidencing
the franchisor's approval of the Obligor;
(v) evidence of the Appraised Value of the property securing
such Franchise Loan; (vi) evidence satisfactory to the Deal
Agent that (A) all legal and beneficial ownership of
such Franchise Loan is vested in the Borrower free and clear of any
Adverse Claims other than Permitted Liens (including, in the case of a
Franchise Loan originated by any Transferring Affiliate, a Franchise
Receivable Assignment duly executed and delivered by such Transferring
Affiliate) and (B) the Borrower has a first priority perfected security
interest in, and lien on, the property securing such Franchise Loan
including, without limitation, title insurance policies in form and
substance, and issued by title insurance companies, satisfactory to the
Deal Agent, and an assignment endorsement naming the Collateral Agent
as the insured and loss payee;
(vii) [Reserved.];
(viii) a copy of any guaranties;
(ix) if any of the above items were executed pursuant
to a power of attorney, a copy of such; and
(x) a list of any other documents in addition to items
(a)(i)-(ix) above relating to such Franchise Loan which are being
delivered to the Custodian;
(b)......any Franchise Lease:
(i) a copy of the original lease executed in favor of
the Borrower or a Transferring Affiliate;
(ii) an original recorded Mortgage in favor of the Collateral
Agent on the Real Property which is the subject of such Franchise
Lease; provided, that, in lieu of a recorded document, the Custodian
may accept a copy certified by the records office or an escrow or
title, with the original to be delivered to the Custodian within 180
days of the date of delivery of the above lease to the Custodian;
provided, further, that if within such 180 day period the original
recorded instrument cannot be delivered solely because of a delay
caused by the recording office to which such instrument was delivered
for recordation, the Borrower or the Servicer on behalf of the Borrower
shall deliver to the Custodian and the Deal Agent an Officer's
Certificate stating that such delay has occurred and shall use all
reasonable efforts to cause the original recorded instrument to be
delivered to the Custodian within one (1) year of the date of delivery
of the above note by the Borrower to the Custodian;
(iii) a copy of the executed franchise agreement(s), if any,
and such other documentation evidencing the franchisor's approval of
the Obligor, in each case in the franchisor's customary form, and any
other document creating a purchase option or right of first refusal in
the Obligor or any Affiliate thereof, together with, if thirty (30) or
more days have expired since the commencement of the term of such
Franchise Lease, a copy of a notice sent to such Obligor requesting an
estoppel letter in the form attached hereto as Exhibit H or such other
form as the Obligor is obligated to provide, if applicable, under the
Franchise Receivable;
(iv) evidence of the Appraised Value of the property which is
the subject of such Franchise Lease;
(v) evidence satisfactory to the Deal Agent that (A) all legal
and beneficial ownership of such Franchise Lease and the fee title to
the Real Property which is the subject of such Franchise Lease is
vested in the Borrower free and clear of any Adverse Claims or
Restrictions on Transferability other than Permitted Liens (including,
if such Franchise Lease was originated by a Transferring Affiliate, a
Franchise Receivable Assignment duly executed and delivered by such
Transferring Affiliate) and (B) that the Collateral Agent has a first
priority perfected security interest in, and lien on, such Real
Property including, without limitation, title insurance policies or
commitments in form and substance, and issued by title insurance
companies, satisfactory to the Deal Agent, naming the Collateral Agent
as the insured;
(vi) a copy of any guaranties;
(vii) if any of the above items were executed pursuant to a
power of attorney, a copy of such; and
(viii) a list of any other documents in addition to items
(a)(i)-(viii) above relating to such Franchise Loan which are being
delivered to the Custodian;
(c)......in the case of any Franchise Receivable secured in
part by personal property, the following, as and to the extent applicable in
accordance with the terms of such Franchise Receivable:
(i) to the extent not covered above a copy of executed
security agreements relating to furnishings, fixtures, equipment and
other property securing such Franchise Receivable;
(ii) copies of all UCC filings with respect to furnishings,
fixtures, equipment and other property securing such Franchise
Receivable, the originals thereof to be delivered promptly to the
Custodian upon their return from filing offices; and
(iii) if any of the above items were executed pursuant to a
power of attorney, a copy of such; and
(d)......in the case of any Ground Lease Loans or Leasehold
Loans, copies of any landlord waivers and estoppel certificates.
Officer's Certificate: With respect to any Person, a
certificate of such Person signed on its behalf by the Chairman of the Board,
Chief Executive Officer, the President, a Vice President, the Treasurer, the
Secretary, or any other duly authorized officer of such Person acceptable to the
Deal Agent.
Optional Prepayment of Advances: The option of the Borrower to
repay an Advance pursuant to a Borrower Notice and in accordance with Section
2.6.
Optional Repayment Amount: The principal amount (not less than
$1,000,000) of any Optional Prepayment of Advances, plus the interest accrued on
such principal amount through the prepayment date, as set forth in any Borrower
Notice.
Other Costs: As defined in Section 12.3(a).
Parent: CNL American Properties Fund, Inc., a Maryland
corporation, and any successor thereto.
Payment Date: The 20th day of each month or, if such day is
not a Business Day, the next succeeding Business Day, commencing the 20th day of
the month after the month in which the Closing Date occurs. The Termination Date
and the Facility Maturity Date shall each be deemed to be a Payment Date whether
or not they occur on the 20th day of a month.
Permitted Liens:
(i) any Lien (A) granted by an Obligor in favor of a
Transferring Affiliate, which Lien shall have been assigned by such
Transferring Affiliate to the Borrower in accordance with a Franchise
Receivable Assignment and further assigned by the Borrower to the
Collateral Agent in accordance with this Agreement, (B) granted by an
Obligor in favor of the Borrower, which Lien shall have been assigned
by the Borrower to the Collateral Agent in accordance with this
Agreement, or (C) granted by the Borrower in favor of the Collateral
Agent or the Custodian in accordance with this Agreement;
(ii) inchoate Liens with respect to the payment of taxes,
assessments or governmental charges or claims either not yet due, or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions
are being maintained, to the extent appropriate;
(iii) Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other Liens imposed
by law created in the ordinary course of business for amounts either
not yet due, or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained, to the extent appropriate;
(iv) zoning restrictions, easements, licenses, reservations,
covenants, rights-of-way, utility easements, building restrictions and
other similar charges or encumbrances on the use of Real Property which
do not materially interfere with the ordinary conduct of the business
of the relevant Obligor or the Borrower, as the case may be, and which
do not materially adversely affect the value of such Real Property and
are acceptable to lending institutions generally;
(v) subordinate Liens identified in any title insurance
policies issued with respect to any Real Property securing payment on a
Franchise Loan or which is the subject of a Franchise Lease, so long as
such title insurance policies insure that (A) in the case of a
Franchise Loan, the Mortgage in favor of the Borrower (and its
successors and assigns) is senior to such Lien and (B) in the case of a
Franchise Lease, the Mortgage in favor of the Collateral Agent is
senior to such Lien; and
(vi) any purchase option or right of first refusal which an
Obligor of a Franchise Lease or its Affiliate may have under such
Franchise Lease or another document, or any other rights of the Obligor
under such Franchise Lease.
Person: An individual, partnership, corporation, including a
business trust, limited liability company, joint stock company, trust,
unincorporated association, sole proprietorship, joint venture, Governmental
Authority or any other entity of whatever nature.
Pledged Receivable: Each Franchise Receivable identified on
Schedule 1, together with any other Franchise Receivables identified by the
Borrower in a Pledged Receivable Supplement pursuant to Section 2.2(g);
provided, that no Franchise Loan may constitute a Pledged Receivable hereunder
until the Deal Agent has specifically confirmed in writing to the Borrower,
mentioning this definition of "Pledged Receivable," that it has received
satisfactory evidence that compliance with this Agreement and the other Basic
Documents is sufficient to establish Lender's first priority perfected security
interest in promissory notes evidencing Franchise Loans.
Pledged Receivable Supplement. As defined in Section 2.2(g).
Proceeds: With respect to any Collateral, whatever is
receivable or received upon the sale, lease, license, exchange, collection,
liquidation, or foreclosure or other disposition of such Collateral, whether
such disposition is voluntary or involuntary, and including any and all proceeds
of any insurance, indemnity, warranty or guaranty payable in respect of any such
Collateral.
Program Amount: An amount equal to $147,000,000; provided,
that the Program Amount may be adjusted from time to time pursuant to Section
2.3, further provided, that after the Commitment Termination Date, the Program
Amount shall be zero.
Rabobank: Cooperatieve Centrale Raiffeisen-Boerenleenbank,
B.A., "Rabobank International", New York Branch, and any successor thereto.
Rating Agency: Each of DCR and S&P.
Real Property: Any real property consisting of a land lot
and/or any building and related improvements thereon.
Receivable Basis: At any time (i) with respect to any
Franchise Loan, the outstanding principal amount thereof at such time and (ii)
with respect to any Franchise Lease, the Rent Cost Basis thereof at such time;
provided, that upon the expiration of 30 days after termination of a Franchise
Lease (whether such termination occurs by reason of a default by the Obligor or
for any other reason) the Receivable Basis of such Franchise Lease shall be
equal to zero.
Records: With respect to any Franchise Receivable, all
documents, books, records and other information (including, without limitation,
computer programs, tapes, disks, data processing software and related property
and rights) prepared and maintained by the Servicer, the Borrower or any
Transferring Affiliate with respect to such Franchise Receivable and the related
Obligors, other than the Obligor Documents.
Receivable Yield: With respect to (i) any Franchise Loan, the
rate per annum at which interest accrues on the Receivable Basis thereof, as
specified in the note evidencing such Franchise Loan and (ii) any Franchise
Lease, the annual rent payments payable by the Obligor under such Franchise
Lease, expressed as a percentage of the Receivable Basis of such Franchise
Lease.
Regulatory Change: Any change after the Closing Date in
federal, state or foreign law or regulations (including, without limitation,
Regulation D of the Federal Reserve Board) or the adoption or making after such
date of any interpretation, judgement, directive or request applying to any
Affected Party under any federal, state or foreign law or regulations (whether
or not having the force of law) by any Governmental Authority charged with the
interpretation or administration thereof.
Release Request: As defined in Section 8.6(a).
Rent Cost Basis: With respect to any Franchise Lease, the full
cost incurred by the Borrower (or, if such Franchise Lease was originated by a
Transferring Affiliate of the Borrower, by such Transferring Affiliate) to
acquire fee title to such Real Property, and shown as the "rent cost basis" in
Borrower's internal property records. By way of description and not of
limitation, the term "Rent Cost Basis" may include any or all of the following:
(a) with respect to Real Property which is fully constructed and operating at
the time of Borrower's (or Transferring Affiliate's) acquisition thereof, the
purchase price of such Real Property, or, with respect to Real Property which is
not fully constructed at the time of Borrower's (or Transferring Affiliate's)
acquisition thereof, the total of the actual cost of the land plus Borrower's
approved "hard" construction costs and "soft" costs for the improvements; (b)
all Borrower (or Transferring Affiliate) approved closing costs incurred by
Obligor, including title insurance premiums, transfer taxes or stamps, survey
costs and recording fees; (c) all closing and acquisition costs, which may
include appraisal fees, environmental audits, closing fees, legal fees, travel
and lodging expenses related to the physical inspection of the property by a
Borrower representative, and related miscellaneous out-of-pocket expenses of
Borrower.
Report Date: The 10th day of each month or, if such day is not
a Business Day, the next succeeding Business Day.
Restrictions on Transferability: Any material condition to, or
restriction on, the ability of the holder or an assignee of the holder of any
right, title or interest in any property to sell, assign, transfer or otherwise
liquidate such right, title or interest in a commercially reasonable time and
manner or which would otherwise materially deprive the holder or any assignee of
the holder of the benefits thereof, provided, however, that any restriction
included in a franchisor's customary franchise agreement shall not be deemed a
Restriction on Transferability.
Revolving Period: The period commencing on the Closing Date
and ending on the day immediately prior to the Commitment Termination Date.
S&P: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., and any successor thereto.
Schedule of Payments: For any Franchise Receivable, the
schedule of payments disclosed in, or required under the terms of, such
Franchise Receivable.
Scheduled Commitment Termination Date: October 10, 2000 as
such date may be extended by the Lender in its sole discretion in accordance
with Section 2.1(b).
Scheduled Facility Maturity Date: The fifth year anniversary
of the Closing Date.
Scheduled Payment: For any Franchise Receivable, the periodic
installment payment or rent amount disclosed in the Schedule of Payments for
such Franchise Receivable.
Secured Parties: The Lender, the Deal Agent, the Collateral
Agent, the Hedge Counterparties, the Custodian, all other Indemnified Parties
and their respective successors and assigns.
Servicer: CNL Financial Services, LP, or any Person designated
as Successor Servicer, and its successors and permitted assigns from time to
time hereunder.
Servicer Event of Default: As defined in Section 9.2.
Servicer Termination Notice: A notice by the Deal Agent to the
Servicer that a Servicer Event of Default has occurred and that the Servicer's
appointment hereunder has been terminated.
Servicing Fee: The Servicing Fee set forth in the Fee Letter.
Servicing Records: All Records prepared and maintained by the
Servicer.
Subordinated Debt: Any debt of the Borrower which is
subordinated in right of payment to the obligations of the Borrower under this
Agreement.
Sub-Servicer: Any Person with whom the Servicer enters into a
Sub-Servicing Agreement.
Sub-Servicing Agreement: Any written contract between the
Servicer and any Sub-Servicer, relating to servicing, administration or
collection of Eligible Receivables as provided in Section 7.1, in such form as
has been approved in writing by the Servicer and the Deal Agent.
Subsidiary: As to any Person, any corporation or other entity
of which securities or other ownership interests having ordinary voting power to
elect a majority of the Board of Directors or other Persons performing similar
functions are at the time directly or indirectly owned or controlled by such
Person.
Successor Servicer: As defined in Exhibit I.
Successor Servicing Fees and Expenses: The fees and expenses
payable by the Borrower to the Successor Servicer, as agreed to by the Borrower,
the Lender and the Deal Agent.
Taxes: Any and all present or future taxes, levies, imposts,
deductions, charges or withholdings (including all liabilities with respect
thereto) that are imposed by any government or other taxing authority.
Termination Date: The date so designated pursuant to Section
9.1 as a result of a Termination Event.
Termination Event: As defined in Section 9.1.
Tier: A classification of Approved Concepts by relative
strength. The strongest Approved Concepts shall be in Tier I and the least
credit-worthy Approved Concepts shall be in Tier IV. The Approved Concepts in
each Tier shall be specified in Schedule 2 hereto as revised from time to time
with the written approval of the Deal Agent.
Transfer Request: As defined in Section 8.5(a).
Transferring Affiliate: An Affiliate of the Borrower that has
been approved in writing by the Deal Agent. CNL American Properties Fund, Inc.
shall be deemed to have been approved as a Transferring Affiliate.
UCC: The Uniform Commercial Code as from time to time in
effect in the specified jurisdiction.
Unit: A restaurant unit which is the subject of a franchise
agreement or is operated by a Company Obligor.
Yield: For each Yield Period and any Advances outstanding
during such Yield Period (or portion thereof), the sum of the products
(determined daily for each Advance which is outstanding on any day during such
Yield Period) of:
YR x C x 1/360
where:
YR = the Yield Rate on such day applicable to such Advance;
and
C = the amount of such Advance.
Yield Period: For any Payment Date, the period beginning with
and including the day next following the end of the preceding Yield Period and
ending on and including such Payment Date, except that in the case of the first
Yield Period, such Yield Period shall be the period beginning with and including
the Effective Date and ending on and including the first Payment Date.
Yield Rate: For each day in a Yield Period on which an Advance
is outstanding: (i) to the extent such Advance is funded through the issuance of
commercial paper, a rate equal to the CP Rate for such day, and (ii) to the
extent such Advance is funded through a "LIBO Rate Advance" or a "Base Rate
Advance" under and as such terms are defined in the Liquidity Agreement, the sum
of the Applicable Margin and, with respect to such LIBO Rate Advance, the
Adjusted LIBO Rate (as defined in the Liquidity Agreement) in effect for such
day, or, with respect to such Base Rate Advance, the Base Rate (as defined in
the Liquidity Agreement) in effect for such day. References in this Agreement to
the Liquidity Agreement and the terms contained therein refer specifically to
the Liquidity Agreement as in effect on the date of determination after giving
effect to all amendments and modifications thereto that have been approved by
the Borrower but without regard to any amendments or modifications thereto that
have not been approved by the Borrower.
SECTION 1.2.......Terms.
All accounting terms not specially defined herein shall be
construed in accordance with GAAP. All terms used in Article 9 of the UCC of the
State of New York, and not specifically defined herein, are used herein as
defined in such Article 9. All hourly references herein shall refer to New York
City time.
SECTION 1.3.......Incorporation.
Whenever this Agreement incorporates the provision in any of
the exhibits attached hereto, such provisions shall be deemed to be a part of
this Agreement as fully to all intents and purposes as though such provisions
had been set forth in full in this Agreement.
SECTION 1.4.......Interpretation.
Except as otherwise indicated, all agreements defined in this
Agreement refer to the same as from time to time amended or supplemented or as
the terms of such agreements are waived or modified in accordance with their
terms. The term "including" means "including without limitation"
ARTICLE II
ADVANCES
SECTION 2.1.......Advances.
(a)......The Borrower may from time to time, at its option,
request that the Lender make advances (each, an "Advance") to it during the
Revolving Period and the Lender shall, subject to the terms and conditions
hereinafter set forth, make each such Advance on a Funding Date.
(b)......The Borrower may, within 60 days, but no later than
45 days, prior to the Scheduled Commitment Termination Date, by written notice
to the Deal Agent, make written request for the Lender to extend the Scheduled
Commitment Termination Date. The Deal Agent will give prompt notice to the
Lender of its receipt of such request for extension of the Scheduled Commitment
Termination Date. The Lender shall make a determination, in its sole discretion,
within 30 days of the Deal Agent's receipt of such request for extension as to
whether or not it will agree to extend the Scheduled Commitment Termination
Date; provided, however, that the failure of the Lender to make a timely
response to the Borrower's request for extension of the Commitment Termination
Date shall be deemed to constitute a refusal by the Lender to extend the
Scheduled Commitment Termination Date.
SECTION 2.2.......Procedures for Advances.
(a)......In the case of each borrowing, repayment of an
Advance, termination, increase or reduction of the Program Amount, or Optional
Prepayments of Advances, the Borrower shall give the Deal Agent a Borrower
Notice. Each Borrower Notice shall specify the amount (subject to Section 2.1
hereof) of Advances to be borrowed or repaid and the Funding Date or repayment
date (which shall be a Business Day).
(b)......Subject to the conditions described herein, the
Borrower may request an Advance from the Lender by delivering to the Deal Agent
or the Collateral Agent, as applicable, at certain times the information and
documents set forth in this Section 2.2; provided, however, that such Advance,
when combined with all other Advances then outstanding, shall not exceed the
lesser of the Program Amount and the Borrowing Base.
(c)......No later than 10:00 a.m. (New York City time) three
(3) Business Days prior to the proposed Funding Date, the Borrower shall notify
the Deal Agent of the proposed Funding Date and shall deliver to the Deal Agent
a credit report and transaction summary for each Franchise Receivable to be
funded with the proceeds of the proposed Advance setting forth the credit
underwriting by the Borrower of such Franchise Receivable, including, without
limitation, a description of the Obligor and the terms of such Franchise
Receivable. By 5:00 p.m. (New York City time) on the next Business Day, the Deal
Agent shall use its reasonable efforts to confirm to the Borrower the receipt of
such items and whether it has reviewed such items and found them to be complete
and in proper form. If the Deal Agent makes a determination that the items are
incomplete or not in proper form, it will communicate such determination to the
Borrower. The Borrower will then take such steps as the Deal Agent determines to
be necessary to correct the problem(s). In the event of a delay in the actual
Funding Date due to the need to correct any such problems, the Funding Date
shall, subject to the satisfaction of the conditions set forth in Article III,
be the day that is two (2) Business Days after the day on which the Deal Agent
confirms to the Borrower that items are acceptable as submitted, or that the
problems have been corrected.
(d)......No later than 5:00 p.m. (New York City time) on the
Business Day prior to the proposed Funding Date, the Borrower shall deliver to
the Deal Agent the following:
(i) a Funding Request meeting the requirements set forth in
subsection (e) below; (ii) a Final Transaction Summary for
each Franchise Receivable to be funded with the
proceeds of the proposed Advance;
(iii) a disbursement and authorization form; and
(iv) a settlement agent's letter substantially in the form of
Exhibit B from outside counsel to the Borrower concerning its receipt
of certain documentation, and its transmission of certain documents to
title insurance companies relating to the funding of the Eligible
Receivable(s) related to such Advance.
A copy of item (iv) shall also be delivered to the Custodian.
(e)......Each Funding Request shall specify the aggregate
amount of the requested Advance, which shall be in an amount equal to $400,000
or increments of $1,000 in excess thereof. Each Funding Request shall be
accompanied by a report prepared by the Servicer, containing the same
information as provided in the form of the Monthly Report as of the times both
immediately before and immediately after the making of the requested Advance,
and representing that all conditions precedent for a funding have been met,
including a representation by the Borrower that the requested Advance would not
result in a Borrowing Excess.
(f)......On the Funding Date following the satisfaction of the
applicable conditions set forth in this Section 2.2 and Article III, the Deal
Agent, on behalf of the Lender, shall give the Borrower the confirmation number
of the wire transfer of immediately available funds sent by the Deal Agent to
the Borrower or its designee at the account specified in the Funding Request.
(g)......The Borrower may at any time add a new Franchise
Receivable to the Collateral by delivering a written notice to the Deal Agent in
the form attached hereto as Exhibit Q (a "Pledged Receivable Supplement"),
whereupon Schedule 1 shall automatically be deemed to have been amended to add
such new Franchise Receivable to the list of Pledged Receivables set forth
therein.
SECTION 2.3.......Reduction of the Program Amount.
The Borrower may, upon at least thirty (30) Business Days'
notice to the Deal Agent, terminate in whole or reduce in part the portion of
the Program Amount that exceeds the aggregate outstanding principal amount of
Advances; provided, that each partial reduction of the Program Amount shall not
be less than $5,000,000. Each notice of reduction or termination pursuant to
this Section 2.3 shall be irrevocable.
SECTION 2.4.......Liquidity Advances.
Prior to the occurrence of a Termination Event, the Lender
shall cause any Base Rate Advance under and as defined in the Liquidity
Agreement, the aggregate principal amount of which is at least $5,000,000, to be
converted to a LIBO Rate Advance under and as defined in the Liquidity Agreement
at the earliest available date for such conversion in accordance with the terms
thereof but not later than one month following the date of such Base Rate
Advance, unless a Eurodollar Disruption Event shall have occurred and be
continuing.
SECTION 2.5.......Note.
(a)......The Advances made by the Lender hereunder shall be
evidenced by a duly executed promissory note of the Borrower in substantially
the form of Exhibit C hereto (the "Note"). The Note shall be dated the initial
Funding Date and shall be duly completed. The Note shall be payable to the
Lender in a principal amount up to the Program Amount. The Advances evidenced by
the Note shall be payable as provided in Article VI.
(b)......The Deal Agent as agent for the Lender may, in its
discretion, enter on a schedule attached to the Note a notation (which may be
computer generated) with respect to each Advance made hereunder of: (i) the date
and principal amount thereof and (ii) each payment and repayment of principal
thereof. The failure of the Deal Agent to make any such notation on the schedule
to the Note shall not limit or otherwise affect the obligation of the Borrower
to repay the Advances in accordance with their respective terms as set forth
herein.
SECTION 2.6.......Repayments.
(a)......Notwithstanding any other provision to the contrary
appearing elsewhere in this Agreement, the aggregate outstanding principal
amount of all Advances shall be due and payable on the Facility Maturity Date.
The Advances shall be repaid as and when necessary, as set forth in Sections 6.3
and 6.4, to eliminate any Borrowing Excess.
(b)......Advances, including any Optional Prepayment of
Advances, may be repaid at any time and from time to time, in whole or in part,
upon ten (10) days' prior written notice to the Lender or such shorter period of
time as agreed to in writing by the Borrower and the Lender. No prior written
notice shall be required in the case of a repayment pursuant to Section 6.3. All
repayments of Advances or any portion thereof shall be not less than the
Optional Repayment Amount and shall be made together with payment of (i) all
Note Interest accrued on the amount repaid to (but excluding) the date of such
repayment, (ii) any Breakage Costs payable under Section 2.11, and (iii) any
loss, cost or expense relating to the early termination of any Hedging
Instrument related to any such Advance. Any amounts so repaid may, subject to
the terms and conditions hereof, be reborrowed hereunder during the Revolving
Period.
SECTION 2.7.......Interest.
(a)......The Borrower shall pay to the Lender, as set forth in
Section 6.4, the Note Interest on the unpaid principal amount of each Advance
for the period commencing on and including the Funding Date of such Advance
until but excluding the date such Advance shall be paid in full. Note Interest
shall not be considered paid by any distribution if at any time such
distribution is rescinded or must otherwise be returned for any reason.
(b)......Notwithstanding the foregoing, the Borrower shall pay
interest on the unpaid Note Interest, on any Advance or any installment thereof,
and on any other amount payable by the Borrower hereunder (to the extent
permitted by law) that shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise) for the period commencing on the due
date thereof to (but excluding) the date the same is paid in full at a rate per
annum equal to the Base Rate (as defined in the Liquidity Agreement) plus 2%.
(c)......Anything in the Basic Documents to the contrary
notwithstanding, if at any time the rate of interest payable by any Person under
the Basic Documents exceeds the highest rate of interest permissible under any
applicable law (the "Maximum Lawful Rate"), then, so long as the Maximum Lawful
Rate would be exceeded, the rate of interest under such Basic Document shall be
equal to the Maximum Lawful Rate. If at any time thereafter the rate of interest
payable under such Basic Document is less than the Maximum Lawful Rate, such
Person shall continue to pay interest under such Basic Document at the Maximum
Lawful Rate until such time as the total Note Interest received from such Person
is equal to the total interest that would have been received had the applicable
law not limited the interest rate payable under such Basic Document. In no event
shall the total interest received by the Lender under the Basic Documents exceed
the amount which the Lender could lawfully have received, had the interest due
under such Basic Documents been calculated since the Closing Date at the Maximum
Lawful Rate.
SECTION 2.8.......Fees.
(a)......On each Payment Date, the Servicing Fee shall be paid
to the Servicer, and the Successor Servicing Fees and Expenses shall be paid to
the Successor Servicer, out of Collections available for such purpose pursuant
to Section 6.4.
(b)......On the Closing Date, the Borrower shall pay the Deal
Agent all fees required to be paid to the Deal Agent pursuant to the terms and
provisions of the Fee Letter.
SECTION 2.9.......Time and Method of Payments.
Subject to the provisions of Sections 6.3 and 6.4, all
payments of principal, Note Interest, fees and other amounts (including
indemnities) payable by the Borrower hereunder shall be made in Dollars, in
immediately available funds, to the Deal Agent not later than 11:00 a.m. (New
York City time) on each Payment Date. On each Payment Date amounts on deposit in
the Collection Account shall be withdrawn to make required payments in
accordance with Section 6.4. Any such payment made on such date but after such
time shall, if the amount paid bears interest, be deemed to have been made on,
and interest shall continue to accrue and be payable thereon until, the next
succeeding Business Day. If any payment of principal or Note Interest becomes
due on a day other than a Business Day, such payment may be made on the next
succeeding Business Day and such extension shall be included in computing
interest in connection with such payment. All payments hereunder and under the
Note shall be made without setoff or counterclaim and in such amounts as may be
necessary in order that all such payments shall not be less than the amounts
otherwise specified to be paid under this Agreement and the Note. Upon payment
in full of the Note, following the Facility Maturity Date, the Deal Agent as
agent for the Lender shall ▇▇▇▇ the Note "paid" and return it to the Borrower.
SECTION 2.10......Additional Costs; Capital Requirements.
(a)......In the event that any existing or future law,
regulation or guideline, or interpretation thereof, by any court or
administrative or governmental authority charged with the administration
thereof, or compliance by any Affected Party with any request or directive
(whether or not having the force of law) of any such authority shall impose,
modify or deem applicable or result in the application of, any capital
maintenance, capital ratio or similar requirement against commitments made by
any Affected Party under this Agreement, the Liquidity Agreement or any of the
program documents relating to the issuance of the Lender's commercial paper
notes funding any Advances, and the result of any event referred to above is to
impose upon any Affected Party or increase any capital requirement applicable as
a result of the making or maintenance of such Affected Party's commitment under
this Agreement, the Liquidity Agreement or such other program document (which
imposition of capital requirements may be determined by each Affected Party's
reasonable allocation of the aggregate of such capital increases or
impositions), then, upon demand made by the Deal Agent on behalf of such
Affected Party as promptly as practicable after it obtains knowledge that such
law, regulation, guideline, interpretation, request or directive exists and
determines to make such demand, the Borrower shall immediately pay to the Deal
Agent for the benefit of such Affected Party from time to time as specified by
the Deal Agent additional amounts which shall be sufficient to compensate such
Affected Party for such imposition of or increase in capital requirements. A
certificate setting forth in reasonable detail the amount necessary to
compensate such Affected Party as a result of an imposition of or increase in
capital requirements submitted by the Deal Agent to the Borrower shall be
conclusive, absent manifest error, as to the amount thereof.
(b)......In the event that any Regulatory Change shall: (i)
change the basis of taxation of any amounts payable to any Affected Party in
respect of any Loans (other than taxes imposed on the net or taxable income of
such Affected Party by the United States of America or the jurisdiction in which
such Affected Party has its principal office); (ii) impose or modify any
reserve, Federal Deposit Insurance Corporation premium or assessment, special
deposit or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Affected Party; or
(iii) impose any other conditions affecting this Agreement in respect of Loans
(or any of such extensions of credit, assets, deposits or liabilities); and the
result of any event referred to in clause (i), (ii) or (iii) above shall be to
increase such Affected Party's costs of making or maintaining any Loans or its
commitments under any of the program documents relating to the issuance of the
Lender's commercial paper notes funding any Advances, or to reduce any amount
receivable by such Affected Party hereunder in respect of any of its Loans or
its commitment (such increases in costs and reductions in amounts receivable are
hereinafter referred to as "Additional Costs") then, upon demand made by the
Deal Agent for the benefit of such Affected Party, the Borrower shall pay to the
Deal Agent on behalf of such Affected Party, from time to time as specified by
the Deal Agent, additional commitment fees or other amounts which shall be
sufficient to compensate such Affected Party for such increased cost or
reduction in amounts receivable by such Affected Party from the date of such
change.
(c)......Determinations by any Affected Party for purposes of
this Section 2.10 of the effect of any Regulatory Change on its costs or on
amounts receivable by it, and of the additional amounts required to compensate
such Affected Party in respect of any Additional Costs, shall be set forth in a
written notice to the Borrower in reasonable detail and shall be conclusive,
absent manifest error.
SECTION 2.11......Breakage Costs.
The Borrower shall pay to the Deal Agent for the account of
the Lender, upon the request of the Deal Agent, such amount or amounts as shall
compensate the Lender for any loss, cost or expense incurred by the Lender (as
reasonably determined by the Deal Agent) as a result of (a) any failure of an
Advance to be made on the date requested by the Borrower in a Funding Request,
whether because the conditions precedent to such Advance shall not have been
satisfied as of such date or for any other reason other than default on the part
of the Lender and (b) any repayment of an Advance (and interest thereon) other
than (i) on a Payment Date or (ii) if such Advance is funded by a Liquidity
Loan, the maturity date of such Liquidity Loan, such compensation to include,
without limitation, any loss (not including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by the Lender to fund or maintain such Advance or any loss
(not including loss of anticipated profits), cost or expense relating to the
Lender's anticipated interest income hereunder and its actual funding costs in
respect of its issued and outstanding commercial paper notes and any funding
obtained pursuant to the Liquidity Agreement (such loss, cost and expense to be
referred to as "Breakage Costs"). The determination by the Lender of the amount
of any such loss or expense shall be set forth in a written notice to the
Borrower in reasonable detail and shall be conclusive, absent manifest error.
SECTION 2.12......Taxes.
(a)......Any and all payments by the Borrower or the Servicer
hereunder shall be made free and clear of, and without deduction or withholding
for, any Taxes unless such deduction or withholding is required by law.
(b)......If any withholding or deduction from any payment to
be made by the Borrower or Servicer hereunder is required in respect of any
Taxes except for: (i) franchise taxes, (ii) any taxes (other than withholding
taxes) that would not be imposed but for a connection between the Deal Agent or
the Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Deal Agent or the Lender
pursuant to or in respect of this Agreement or any other Basic Document), (iii)
any withholding taxes payable with respect to payments hereunder or under any
other Basic Document under applicable law in effect on the Closing Date, (iv)
any taxes imposed on or measured by the Lender's assets, net income, receipts or
branch profits, (v) any taxes arising after the Closing Date solely as a result
of or attributable to the Lender changing its designated lending office after
the Closing Date and (vi) any interest, fees, additional taxes or penalties
relating to any of the items described in the preceding clauses (i) through (v)
(all such non-excluded Taxes being "Covered Taxes"), then the Borrower will:
(i) pay directly to the relevant Governmental Authority
the full amount required to be so withheld or deducted;
(ii) promptly forward to the Deal Agent an official receipt or
other documentation satisfactory to the Deal Agent evidencing such
payment to such Governmental Authority; and
(iii) pay to the Deal Agent for the account of the Lender such
additional amount or amounts as is necessary to ensure that the net
amount actually received by the Lender will equal the full amount that
the Lender would have received had no such withholding or deduction
been required.
(c)......Tax Indemnification. The Borrower will indemnify the
Lender and the Deal Agent for the full amount of Covered Taxes (including,
without limitation, any Covered Taxes imposed by any jurisdiction on amounts
payable under this section) paid by the Lender or the Deal Agent (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto; provided that the Lender or the Deal Agent,
as appropriate, making a demand for indemnity payment shall provide the Borrower
with a certificate from the relevant taxing authority or from a responsible
officer of the Lender or the Deal Agent stating or otherwise evidencing that the
Lender or the Deal Agent has made payment of such Covered Taxes and will provide
a copy of or extract from documentation, if available, furnished by such taxing
authority evidencing assertion or payment of such Covered Taxes. This
indemnification shall be made within ten days from the date the Lender or the
Deal Agent (as the case may be) makes written demand therefor.
(d)......If, in connection with an agreement or other document
providing liquidity support, credit enhancement or other similar support to the
Lender in connection with this Agreement or the funding or maintenance of
Advances hereunder, the Lender is required to compensate any Liquidity Lender
(either directly or through a participation) or any agent thereof in respect of
taxes imposed by any Governmental Authority under circumstances similar to those
described in this Section 2.12, then, provided that such agreement or document
limits the scope of the taxes for which compensation is required in the same
manner as Section 2.12(b) hereof and conditions such compensation on the
provision of forms as described in Section 2.12(e) hereof, thereby eliminating
all United States Federal backup withholding and withholding on payments by the
Lender to such Liquidity Lender, after demand by the Lender, the Borrower shall
pay to the Lender on the following Payment Date such additional amount or
amounts as may be necessary to reimburse the Lender for any amounts paid by it.
Such compensation shall not include any penalties or interest imposed by reason
of the Lender's failure to timely comply with any requirement to withhold taxes.
If payments by the Lender become subject to withholding tax under circumstances
that would require compensation from the Borrower under this section, the Lender
shall use commercially reasonable efforts to avoid or mitigate the burden of
such tax, including efforts to procure a change in the identity or lending
office of the relevant Liquidity Lender.
(e)......Tax Forms: The Deal Agent or the Lender or its
assignee, as applicable, shall:
(i) in the case of the Lender or its assignee, deliver to the
Borrower and the Deal Agent prior to the date the Lender or its
assignee becomes a party hereto, (A) if such Person is a "United States
Person" (as such term is defined in IRC section 7701(a)(30)), a duly
completed United States Internal Revenue Service Form W-9 or successor
applicable form, or (B) if such Person is not a United States Person, a
duly completed United States Internal Revenue Service Form W-8BEN or
W-8ECI, as the case may be, or successor applicable form, thereby
eliminating all United States Federal backup withholding and
withholding on payments by the Borrower or Servicer to the Lender;
(ii) in the case of the Deal Agent or its assignee, deliver to
the Borrower on or before the first date required by the regulations
issued by the United States Treasury Department under IRC section 1441
pursuant to T.D. 8734 (the "New Regulations") or successor regulations,
if such Person is not a United States Person, and if the New
Regulations so require, a duly completed United States Internal Revenue
Service Form W-8IMY or successor applicable form;
(iii) in the case of any such Person, deliver to the Borrower
and the Deal Agent a further copy of such forms or other appropriate
certification of such forms on or before the date that any such form
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form delivered to the Borrower;
and
(iv) in the case of any such Person, renew such forms and
certifications thereof as may reasonably be requested by the Borrower
or the Deal Agent,
unless an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery otherwise
would be required which renders all such forms inapplicable or which would
prevent such Person from duly completing and delivering any such form and such
Person so advises the Borrower and the Deal Agent.
For any period with respect to which such Person has failed to
provide the Borrower with the appropriate form, certificate or statement
described in this subsection (other than if such failure is due to a change in
law occurring after the date on which such form, certificate or statement
originally was required to be provided under this Agreement), such Person, shall
not be entitled to indemnification under clauses (b), (c) or (d) of this section
with respect to any Taxes until such forms are so provided and then only for
periods for which the Borrower may rely on such forms to reduce or eliminate
United States Federal backup withholding and withholding on payments to the Deal
Agent, the Lender, or assignees of either the Deal Agent or the Lender.
(f)......Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this section shall survive the termination of this
Agreement.
ARTICLE III
CONDITIONS TO LENDING
SECTION 3.1.......Conditions Precedent to Effectiveness of Agreement.
The effectiveness of this Agreement is subject to the
conditions precedent that the Deal Agent shall have received on or before the
Closing Date the following, in form and substance satisfactory to the Deal
Agent:
(a)......An executed copy of each Basic Document, each in a
form approved by the Deal Agent and evidence to the effect that all conditions
precedent to the effectiveness thereof shall have been satisfied;
(b)......A certificate from an officer of the Borrower in the
form of Exhibit E to the effect that the performance of this Agreement will not
render the Borrower insolvent and the Borrower will be able to remain
economically viable without further capital investments for the foreseeable
future;
(c)......With respect to the Borrower:
(i) the certificate of limited partnership of the Borrower
certified, as of a date no more than twenty (20) days prior to the
Closing Date, by the Secretary of State of its state of organization;
(ii) a certificate of existence or good standing, dated no
more than twenty (20) days prior to the Closing Date, from the
respective Secretary of State of its state of organization and the
primary state in which the Borrower conducts business and is required
to qualify, or represents that it is qualified, to do business;
(iii) a certificate of the Secretary of the general partner of
the Borrower certifying as of the Closing Date: (A) the names and true
signatures of the persons authorized on behalf of the Borrower to sign
this Agreement, (B) a copy of the Borrower's partnership agreement, and
(C) a copy of the resolutions of the corporate general partner(s) of
the Borrower approving the Basic Documents to which it is a party and
the transactions contemplated hereby and thereby; and
(d)......the Note shall have been duly executed and delivered
by the Borrower to the Deal Agent and shall be in full force and effect;
(e)......With respect to the Servicer:
(i) the certificate of limited partnership of the Servicer
certified, as of a date no more than twenty (20) days prior to the
Closing Date, by the Secretary of State of its state of organization;
(ii) a certificate of existence, dated no more than twenty
(20) days prior to the Closing Date, from the respective Secretary of
State of its state of organization and the primary state in which the
Servicer conducts business and is required to qualify, or represents
that it is qualified, to do business; and
(iii) a certificate of the Secretary of the general partner of
the Servicer certifying as of the Closing Date: (A) the names and true
signatures of the persons authorized on behalf of the Servicer to sign
this Agreement, (B) a copy of the Servicer's partnership agreement, and
(C) a copy of the resolutions of the partners of the Servicer approving
the Basic Documents to which it is a party and the transactions
contemplated hereby and thereby;
(iv) Certified copies of requests for information or copies on
form UCC-11 (or a similar search report certified by a party acceptable
to the Deal Agent), dated a date no more than thirty (30) days prior to
the Closing Date listing all effective financing statements and other
similar instruments and documents which name the Borrower or any
Transferring Affiliate (under its present name and any previous name)
as debtor, together with copies of such financing statements;
(f)......Any necessary third party (including any Governmental
Authority) consents to the closing of the transactions contemplated by this
Agreement on behalf of the Borrower or Servicer hereby, in form and substance
satisfactory to the Deal Agent;
(g)......Executed financing statements (form UCC-1), in
respect of the Collateral (1) with respect to each Transferring Affiliate,
naming such Transferring Affiliate as an assignor, the Borrower as the assignee
and the Collateral Agent as assignee of the Borrower, and (2) pursuant to
Article VIII, naming the Borrower as the debtor, and the Collateral Agent on
behalf of the Lender as secured party, or other, similar instruments or
documents, as may be necessary or, in the opinion of the Deal Agent, desirable
under the UCC of all appropriate jurisdictions or any other applicable law
(including the Assignment of Claims Act) to perfect the Collateral Agent's
interests in all Collateral in which an interest may be assigned hereunder;
(h)......The opinion of counsel to the Borrower, the Servicer
and the Transferring Affiliates in form and substance satisfactory to Deal
Agent;
(i)......Confirmation from S&P and DCR that the Lender's
commercial paper notes will continue to be rated at least A-1 by S&P and at
least D-1 by DCR after giving effect to the transactions contemplated by this
Agreement;
(j)......Fully executed copies of Lockbox Agreements covering
each Lockbox Account; and
(k)......Such other approvals, consents, opinions, documents
and instruments, as the Deal Agent may reasonably request.
SECTION 3.2.......Conditions Precedent to All Advances.
Each Advance (including the initial Advance) shall be subject
to the further conditions precedent that:
(a)......On the related Funding Date, the following statements
shall be true and the Borrower shall have certified in the related Borrower
Notice that such statements are true:
(i) The representations and warranties of the Borrower and the
Servicer set forth in Sections 4.1 and 4.2 are true and correct on and
as of such date, before and after giving effect to such borrowing and
to the application of the proceeds therefrom, as though made on and as
of such date;
(ii) No event has occurred, or would result from such Advance
or from the application of the proceeds therefrom, which constitutes a
Termination Event or which would, after the giving of notice or the
lapse of time, or both, constitute a Termination Event;
(iii) The Borrower is in material compliance with each of its
covenants set forth herein; and (iv) No event has occurred
which constitutes a Servicer Event of Default or which would,
after the giving of notice or the lapse of time, or both, constitute
a Servicer Event of Default; (b)......The Commitment
Termination Date shall not have occurred;
(c)......Before and after giving effect to such borrowing and
to the application of proceeds therefrom, there exists no Borrowing Excess;
(d)......Each Pledged Receivable is an Eligible Receivable;
and
(e)......The Borrower shall have delivered to the Deal Agent
the related Funding Request and such other items required to be delivered to the
Borrower pursuant to Section 2.2, and the Borrower and the Transferring
Affiliates shall have taken such other action, including delivery of approvals,
consents, opinions, documents and instruments to the Lender and the Deal Agent,
as the Deal Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1.......Representations and Warranties of the Borrower.
The Borrower represents and warrants to the Deal Agent and the
Lender as of the date hereof, as of the Closing Date and on each subsequent
Funding Date as follows:
(a)......The Borrower is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority and all licenses necessary to own its
properties and assets and to transact the business in which it is presently
engaged except for those licenses applied for but not yet obtained as set forth
on Schedule 5, except to the extent the failure to have any such license would
not have a Material Adverse Effect, and is duly qualified as a limited
partnership or a foreign limited partnership, as applicable, and is in good
standing under the laws of each other jurisdiction in which its business or
activities require such qualification and where a failure to be so qualified
would have a Material Adverse Effect.
(b)......The Borrower has the power and authority to own,
pledge, mortgage, operate and convey all of its properties, to conduct its
business as now conducted and to execute and deliver the Basic Documents and to
perform the transactions contemplated hereby and thereby.
(c)......The execution, delivery and performance by the
Borrower of the Basic Documents to which it is a party and the transactions
contemplated hereby and thereby (i) have been duly authorized by all necessary
partnership or other action on the part of the Borrower, (ii) do not contravene
or cause the Borrower to be in default under (A) the Borrower's certificate of
limited partnership or partnership agreement, (B) any contractual restriction
contained in any indenture, loan or credit agreement, lease, mortgage, security
agreement, bond, note, or other agreement or instrument binding on or affecting
the Borrower or its property or any Affiliate of the Borrower or its property,
or (C) any law, rule, regulation, order, license requirement, writ, judgment,
award, injunction, or decree applicable to, binding on or affecting the Borrower
or its property or any Affiliate of the Borrower or its property, and (iii) do
not result in or require the creation of any Adverse Claim upon or with respect
to any of the property of the Borrower or any Affiliate of the Borrower (other
than in favor of the Lender and the Collateral Agent as contemplated hereunder).
(d)......The Basic Documents to which the Borrower is a party
and that have been executed and delivered prior to the date this representation
is made or deemed to be made have each been duly executed and delivered by the
Borrower.
(e)......All Hedging Instruments required by Section 5.3 have
been entered into by Borrower, and all agreements and related documentation
required in connection with any such Hedging Instruments have been executed and
delivered by Borrower to the applicable Hedge Counterparties.
(f)......No consent of, notice to, filing with or permits,
qualifications or other action by any Governmental Authority or any other party
is required (i) for the due execution, delivery and performance by the Borrower
of the Basic Documents to which the Borrower is a party, (ii) for the perfection
of or the exercise by the Lender, any Hedge Counterparty, the Deal Agent or the
Collateral Agent of any of its rights or remedies hereunder or thereunder, (iii)
for the grant by the Borrower of the security interests granted under Section
8.1 of this Agreement, (iv) for the perfection of or the exercise by the Lender,
any Hedge Counterparty or the Collateral Agent of its rights and remedies
provided for in this Agreement, or (v) to ensure the legality, validity,
enforceability or admissibility into evidence of this Agreement in any
jurisdiction in which any of the Collateral is located, in each case other than
consents, notices, filings and other actions which have been obtained or made,
or have been applied for as disclosed on Schedule 5, but not yet obtained.
(g)......No transaction contemplated by this Agreement
requires compliance with any bulk sales act or similar law.
(h)......Each Basic Document to which the Borrower is a party
is the legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with its respective terms, subject to any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the enforceability of creditors'
rights generally and general equitable principles, whether applied in a
proceeding at law or in equity. Each of the Borrower Assigned Agreements to
which the Borrower or any Transferring Affiliate is a party constitutes the
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms, subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the enforceability of creditors' rights
generally and general equitable principles, whether applied in a proceeding at
law or in equity.
(i)......Except as disclosed to the Deal Agent on Exhibit D
hereto, there is no pending or, to its knowledge, threatened action, suit or
proceeding against or affecting the Borrower, its officers or managers, or the
property of the Borrower, in any court or tribunal, before any arbitrator of any
kind or before or by any Governmental Authority in which an adverse result could
reasonably be expected to produce a Material Adverse Effect on Borrower.
(j)......No injunction, writ, restraining order or other order
of any nature adverse to the Borrower or the conduct of its business or which is
inconsistent with the due consummation of the transactions contemplated by the
Basic Documents has been issued by a Governmental Authority, nor has Borrower
received written notice, except as disclosed in writing to the Deal Agent, that
any such injunction, writ or order has been sought by any Person.
(k)......The principal place of business and chief executive
office of the Borrower, and the office where the Borrower keeps its Records and
the original copies of the Borrower Assigned Agreements, is located at the
address of the Borrower for notices under Section 12.1 and as set forth on
Schedule 7, and there are currently no, and during the four months prior to the
Closing Date there have not been any, other locations where the Borrower is
located (as that term is used in the UCC of the jurisdiction where such
principal place of business is located) or keeps Records.
(l)......The Borrower does not have, and has never conducted
business using, trade names, fictitious names, assumed names or "doing business
as" names other than those set forth on Schedule 6.
(m)......For federal income tax, reporting and accounting
purposes, the Borrower will treat the assignment of each Pledged Receivable from
a Transferring Affiliate to the Borrower pursuant to a Franchise Receivable
Assignment as an absolute assignment of such Transferring Affiliate's full
right, title, and ownership interest in such Pledged Receivable to the Borrower,
and the Borrower has not in any other manner accounted for or treated the
transfers of such Pledged Receivables contemplated in any Franchise Receivable
Assignment.
(n)......The Borrower has complied and will comply in all
material respects with all applicable laws, rules, regulations, judgments,
agreements, decrees and orders with respect to its business and properties and
all Collateral including, without limitation, all Environmental Laws.
(o)......The Borrower has filed all tax returns (including,
without limitation, foreign, federal, state, local and other tax returns)
required to be filed, is not liable for taxes payable by any other Person and
has paid or made adequate provisions for the payment of all taxes, assessments
and, to its knowledge, other governmental, charges due from the Borrower arising
from such returns. No tax lien or similar Adverse Claim has been filed, and, to
its knowledge, no claim is being asserted, with respect to any such tax,
assessment or other governmental charge. Any taxes, fees and other governmental
charges payable by the Borrower or any of its Affiliates in connection with the
execution and delivery of the Basic Documents and the transactions contemplated
hereby or thereby have been paid or shall have been paid if and when due at or
prior to such Funding Date.
(p)......With respect to any Funding Date, the related
Borrower Notice is accurate in all material respects.
(q)......The Collateral and each part thereof is owned by the
Borrower free and clear of any Adverse Claim or Restrictions on Transferability
(other than Permitted Liens) and the Borrower has the full right, limited
partnership power and lawful authority to assign, transfer and pledge the same
and interests therein and all substitutions therefor and additions thereto
pursuant to Section 8.1 of this Agreement, and upon making each Advance, the
Collateral Agent on behalf of the Lender will have acquired a valid and
perfected first priority security interest in, and lien on, the Collateral, free
and clear of any Adverse Claim or Restrictions on Transferability other than
Permitted Liens. No effective financing statement, mortgage, deed of trust or
other instrument similar in effect covering all or any part of the Collateral is
on file in any recording office, except such as may have been filed in favor of
the Collateral Agent pursuant to Article VIII of this Agreement or, with respect
to the Pledged Receivables, in favor of the Borrower pursuant to a Franchise
Receivable Assignment.
(r)......All information heretofore furnished by or on behalf
of the Borrower to the Deal Agent, the Lender or any Hedge Counterparty in
connection with this Agreement or any transaction contemplated hereby is true
and complete in all material respects and does not misstate or omit to state a
material fact necessary to make the statements contained therein not misleading.
(s)......The Borrower is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) to the Pension Benefit
Guaranty Corporation ("PBGC") (or any successor thereto) under ERISA.
(t)......(i) The Borrower is not a party to any indenture,
loan or credit agreement or any lease or other agreement or instrument or
subject to any limited restriction that could have, and no provision of
applicable law or governmental regulation is reasonably likely to have, in the
absence of a default thereunder, a Material Adverse Effect; and (ii) the
Borrower is not in default under or with respect to any contract, agreement,
lease or other instrument to which the Borrower is a party, which default is
reasonably likely to have a Material Adverse Effect;
(u)......The consolidated balance sheets of the Borrower and
its consolidated Subsidiaries as at December 31, 1998, and the related
statements of income of the Borrower and its consolidated Subsidiaries for the
fiscal year then ended, certified by the chief financial officer or chief
accounting officer of the Borrower, copies of which have been furnished by the
Borrower to the Deal Agent, fairly present in all material respects the
consolidated financial condition of the Borrower and its consolidated
Subsidiaries for the period ended on such date, all in accordance with GAAP, and
there has been no material adverse change in the condition (financial or
otherwise), business, operations, results of operations, or properties of the
Borrower since December 31, 1998.
(v)......The Borrower is not required to be registered as an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. The making of the Advances by the
Lender, the application of the proceeds and repayment thereof by the Borrower
and the consummation of the transactions contemplated by the Basic Documents to
which the Borrower is a party do not violate, solely with respect to the
Borrower, any provision of such Act or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder.
(w)......Each of the representations and warranties of the
Borrower contained in the Basic Documents and the Hedging Instruments to which
the Borrower is a party and which have been executed and delivered prior to the
date this representation is made or deemed to be made is true and correct in all
material respects and the Borrower hereby makes each such representation and
warranty to, and for the benefit of, the Deal Agent, the Lender and each Hedge
Counterparty as if the same were set forth in full herein.
(x)......All Lockboxes and the Lockbox Accounts are set forth
in Schedule 4. Each such Lockbox and Lockbox Account is subject to a Lockbox
Agreement duly executed and delivered by the Borrower, the Servicer and the
applicable Lockbox Account Bank. Each Lockbox and Lockbox Account is held in the
name of "CNL Financial Services, LP, as servicer."
(y)......Each Pledged Receivable is an Eligible Receivable.
(z)......On the basis of a commercially reasonable review and
assessment undertaken by the Borrower of the Borrower's computer applications
and inquiry made of the Borrower's material suppliers, vendors and customers,
the Borrower reasonably believes that the "Year 2000 problem" (that is, the risk
that computer applications used by any Person may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999) will not result in a Material Adverse Effect
on Borrower or Servicer.
SECTION 4.2.......Representations and Warranties of the Servicer.
The Servicer represents and warrants to the Lender, the
Collateral Agent and the Deal Agent as follows as of the Closing Date and as of
each Funding Date:
(a)......The Servicer is a limited partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and is duly qualified to do business, and is in good standing, in
every jurisdiction in which the nature of its business requires it to be so
qualified, and where a failure to be so qualified would have a material adverse
effect upon the Servicer's ability to perform its obligations hereunder.
(b)......The Servicer has the power and authority to execute
and deliver this Agreement and the transactions contemplated hereby.
(c)......The execution, delivery and performance by the
Servicer of each Basic Document to which it is a party and the transactions
contemplated hereby (i) have been duly authorized by all necessary action on the
part of the Servicer; (ii) do not contravene or cause the Servicer to be in
default under (A) its agreement of limited partnership, (B) any contractual
restriction with respect to any Debt of the Servicer or contained in any
indenture, loan or credit agreement, lease, mortgage, security agreement, bond,
note or other agreement or instrument binding on or affecting it or its
property, or (C) any law, rule, regulation, order, writ, judgment, award,
injunction or decree binding on or affecting it or its property; and (iii) do
not result in or require the creation of any Adverse Claim upon or with respect
to any of its properties.
(d)......Each Basic Document to which it is a party has been
duly executed and delivered by the Servicer.
(e)......No consent of, notice to, filing with or permits,
qualifications or other action by any Governmental Authority or any other party
is required for the due execution, delivery and performance by the Servicer of
any Basic Document to which it is a party or any other agreement, document or
instrument to be delivered hereunder where a failure to so obtain or make such
consent, notice, filing, permit, qualification or other action would have a
material adverse effect upon the Servicer's ability to perform its obligations
hereunder, other than any consents, notices, permits, qualifications, filings or
other actions which have been obtained or made.
(f)......Each Basic Document to which it is a party is the
legal, valid and binding obligation of the Servicer enforceable against the
Servicer in accordance with its terms subject to any applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the enforceability of creditors' rights
generally and general equitable principles, whether applied in a proceeding at
law or in equity.
(g)......Except as disclosed to the Deal Agent on Exhibit D
hereto, there is no pending or, to its knowledge, threatened action, suit,
investigation or proceeding of a material nature against or affecting the
Servicer, its members or managers, or the property of the Servicer, in any court
or tribunal, before any arbitrator of any kind or before or by any Governmental
Authority asserting the invalidity of any Basic Document to which it is a party
or any document to be delivered by the Servicer hereunder or thereunder, or any
order of any material nature adverse to the Servicer or the conduct of its
business or which is inconsistent with the due consummation of the transactions
contemplated by the Basic Documents and which has been issued by a Governmental
Authority or, to the knowledge of the Servicer, has been sought by any other
Person.
(h)......The Servicer has filed all tax returns (including,
without limitation, foreign, federal, state, local and other tax returns)
required to be filed by it and has paid or has made adequate provision for the
payment of all taxes, fees, assessments and other governmental charges due from
the Servicer arising under such tax returns, no tax lien or other similar
Adverse Claim has been filed, and no claim has been filed, and to its knowledge
no claim is being asserted, with respect to any such tax, fee, assessment or
other governmental charge. Any taxes, fees and other governmental charges
payable by the Servicer in connection with the transactions contemplated by the
Basic Documents and the execution and delivery of the Basic Documents have been
paid or shall have been paid at or prior to the Closing Date.
(i)......Each of the representations and warranties of the
Servicer contained in the Basic Documents is true and correct in all material
respects and the Servicer hereby makes each such representation and warranty
contained in the Basic Documents to, and for the benefit of, the Lender, each
Hedge Counterparty and the Deal Agent.
(j)......The Servicer is in compliance with ERISA and has not
incurred and does not expect to incur any liabilities (except for premium
payments arising in the ordinary course of business) to the PBGC (or any
successor thereof) under ERISA.
(k)......There has been no material adverse change in the
condition (financial or otherwise), business, operations, results of operations
or properties of the Servicer since the date of the consolidated and
consolidating balance sheets of the Servicer required to be delivered to the
Deal Agent pursuant to Section 3.1(j).
(l)......[Reserved.]
(m)......On the basis of a commercially reasonable review and
assessment undertaken by the Servicer of the Servicer's computer applications
and inquiry made of the Servicer's material suppliers, vendors and customers,
the Servicer reasonably believes that the "Year 2000 problem" (that is, the risk
that computer applications used by any Person may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999) will not result in a material adverse change
(i) in the operations, business, properties, or condition (financial or
otherwise) of the Servicer or (ii) in the Servicer's ability to service the
Collateral in accordance with this Agreement.
ARTICLE V
GENERAL COVENANTS OF THE BORROWER
SECTION 5.1.......Affirmative Covenants of the Borrower.
The Borrower shall, unless the Deal Agent shall otherwise
consent in writing:
(a)......perform each of its obligations under the Basic
Documents and comply in all respects with all of its obligations under the Basic
Documents and comply with all applicable laws, rules, regulations and orders
with respect to the Basic Documents, its business and properties and all
Collateral and related Collections with respect thereto including, without
limitations, all Environmental Laws;
(b)......preserve and maintain its existence, rights,
franchises and privileges in the jurisdiction of its formation and maintain its
qualifications to do business as a foreign limited liability company in any
other state in which it does business and in which it is required to be so
qualified and where the failure to be so qualified would have a Material Adverse
Effect on the assets or business operations of the Borrower, and conduct its
business in accordance with the terms of its partnership agreement;
(c)......instruct all Obligors to remit payments in respect of
the Collateral directly to a Lockbox Account and deposit all Collections it may
receive in respect of Collateral into the Lockbox Account within one Business
Day of receipt;
(d)......use the proceeds of the Advances made hereunder for
the funding of Pledged Receivables or for general corporate purposes;
(e)......provide commercially reasonable cooperation with all
requests of the Deal Agent and the Collateral Agent regarding the information
and any documents necessary or desirable to allow each of the Lender, the Deal
Agent and the Collateral Agent to carry out its responsibilities hereunder;
(f)......permit the Lender, each Hedge Counterparty and the
Deal Agent to make or cause to be made inspections and audits of any books,
records and papers of the Borrower and the Servicer and to make extracts
therefrom and copies thereof, or to make inspections and examinations of any
properties and facilities of the Borrower and the Servicer, on reasonable
notice, at all such reasonable times (but not more often than quarterly) as
required in order to assure that the Borrower is and will be in compliance with
its obligations under the Basic Documents or to evaluate the Lender's investment
in the then outstanding Note;
(g)......pay and discharge, at least thirty (30) days before
nonpayment would otherwise cause a permanent loss of title (or, with respect to
any Real Property leased by the Borrower to a lessee, use commercially
reasonable efforts to cause such lessee to pay and discharge), all obligations
and liabilities that could give or have given rise to a lien on its properties,
including, without limitation, all Taxes, assessments and governmental charges
upon its income and properties;
(h)......▇▇▇▇ its Records in a commercially reasonable manner
to show the interests of the Collateral Agent in the Pledged Receivables;
(i)......promptly notify the Deal Agent in writing of any
litigation, legal proceeding or material dispute, whether or not in the ordinary
course of business, adversely and materially affecting the Borrower, whether or
not fully covered by insurance, and regardless of the subject matter thereof;
(j)......cause all information hereafter furnished by or on
behalf of the Borrower to the Deal Agent or the Lender in connection with this
Agreement or any transaction contemplated hereby to be true and complete in all
material respects and not omit to state a material fact necessary to make the
statements contained therein not misleading;
(k)......cause the Borrower's partnership agreement to remain
in full force and effect;
(l)......pay and discharge, within thirty (30) days before
nonpayment would otherwise cause a permanent loss of title (or, with respect to
any Real Property leased by the Borrower to a lessee, use commercially
reasonable efforts to cause such lessee to pay and discharge), all taxes,
assessments and governmental charges or levies imposed upon it or upon its
respective income or profits or upon any properties belonging to it (or in the
case of any such lessee, such lessee or such Real Property);
(m)......with respect to any Real Property included in the
Collateral, maintain (or cause the applicable Obligor to maintain) at all times
insurance covering such Real Property customary for similar businesses in the
area where such Real Property is located; and
(n)......with respect to each Franchise Lease which has been
in effect for thirty (30) days or more at the time such Franchise Lease is
included in the Pledged Receivables, use its commercially reasonable efforts to
obtain an estoppel letter in the form attached hereto as Exhibit H, or such
other form as the Obligor is obligated to provide, duly executed by the relevant
Obligor within 30 days of the date on which such Franchise Lease is first
included in the Collateral and, upon receipt of any such estoppel letter,
deliver a copy of the same to the Collateral Agent.
(o)......Promptly after learning of the occurrence of any of
the following at, or with respect to, the Real Property included in the
Collateral give the Deal Agent oral and written notice thereof, describing the
same and the steps being taken by the Borrower with respect thereto: (a) the
happening of any event involving the use, spill, release, leak, seepage,
discharge or cleanup of any Contaminant; (b) notice that the Borrower's
operations on the Real Property are not in compliance with requirements of
applicable federal, state or local environmental, health and safety statutes and
regulations; (c) notice that the Borrower is subject to federal or state
investigation evaluating whether any remedial action is needed to respond to the
release of any Contaminant or other substance from the Real Property into the
environment; or (d) notice that the Real Property is subject to a lien in favor
of any governmental entity for (i) any liability under federal or state
environmental laws or regulations or (ii) damages arising from or costs incurred
by such governmental entity in response to a release of a Contaminant or other
substance into the environment.
(p)......In the event of the enactment after the date hereof
of any law by the State or any other governmental entity deducting from the
value of the Real Property for the purpose of taxation any lien or security
interest thereon, or changing in any way the laws for the taxation of mortgages,
deeds of trust or other liens or debts secured thereby, or the manner of
collection of such taxes, so as to affect the Mortgage, the Borrower Secured
Obligations, or the Lender, then, and in any such event, the Borrower shall on
demand, pay to the Lender, or reimburse Lender for payment of, all taxes,
assessments, charges or liens for which Lender is or may be liable as a result
thereof, provided that if any such payment or reimbursement shall be unlawful or
would constitute usury or render the Borrower Secured Obligations wholly or
partially usurious under applicable law, then Lender may, at its option, declare
the Borrower Secured Obligations immediately due and payable or require the
Borrower to pay or reimburse the Lender for payment of the lawful and
non-usurious portion thereof.
SECTION 5.2.......Negative Covenants of the Borrower.
The Borrower shall not, without the written consent of the
Deal Agent:
(a)......except in accordance with Section 8.6 or 8.7, (i)
sell, assign (by operation of law or otherwise) or otherwise dispose of any
Collateral, or create or suffer to exist or consent to, cause or permit in the
future (upon the happening of a contingency or otherwise) the creation,
incurrence or existence of, any Adverse Claim or Restriction on Transferability
(and any such purported disposition shall be null and void), upon or with
respect to any Collateral, or upon or with respect to the Lockbox Account, the
Lockboxes, the Collection Account or any other account to which any Collections
of any Collateral are deposited other than Permitted Liens or (ii) assign any
right to receive income in respect thereof;
(b)......extend, amend, forgive, discharge, compromise, waive,
cancel or otherwise make a material modification to the terms of any Basic
Document, the Credit and Collection Policies or any Pledged Receivable, other
than:
(i) any adjustment, settlement or compromise of the account or
payment of a Pledged Receivable pursuant to Section 7.3 and any
deferments in the ordinary course of business which are consistent with
the Credit and Collection Policies; and
(ii) any amendment made in accordance with the Credit and
Collection Policies which does not extend the scheduled maturity date
of, modify the interest rate or rent payable under (except as required
by law), or constitute a cancellation or discharge of any amount
payable under a Pledged Receivable and does not materially and
adversely affect the security afforded by the real property,
furnishings, fixtures or equipment securing or supporting payment of
such Pledged Receivable and which does not cause such Pledged
Receivable to cease to be an Eligible Receivable;
(c)......except as otherwise provided herein or in the
Franchise Receivable Assignments, merge with or into, consolidate with or into,
convey, transfer, lease or otherwise dispose of all or substantially all of its
assets (whether now owned or hereafter acquired) to, or acquire all or
substantially all of the assets or capital stock or other ownership interest of,
any Person (whether in one transaction or in a series of transactions);
provided, however, that the Borrower may merge or consolidate with, or acquire
all or substantially all of the assets or capital stock or other ownership
interest of, any Person if (i) immediately prior to such transaction, and
immediately thereafter and after giving effect thereto, no Termination Event or
event or circumstance which, with the giving of notice or the passage of time,
or both, would constitute a Termination Event shall have occurred and be
continuing, (ii) such transaction would not have a Material Adverse Effect and
(iii) in the case of a merger or consolidation, the Borrower is the survivor;
(d)......prepare any financial statements which shall account
for or treat the transfer by a Transferring Affiliate to Borrower of any
Franchise Receivables in any manner other than as a contribution or absolute
assignment of the Pledged Receivables to the Borrower from such Transferring
Affiliate;
(e)......at any time (i) advance credit to any Person, or (ii)
declare any dividends, or return any capital if, after giving effect to such
action, there would be a Borrowing Excess;
(f)......maintain partners' capital (i.e., partnership assets
less partnership liabilities) in an amount less than $250,000,000; or
(g)......act in a manner that would cause it to be taxed as a
corporation, association taxable as a corporation or taxable mortgage pool (with
respect to any Collateral), all as defined under the IRC.
SECTION 5.3.......Borrower Hedging Instruments.
The Borrower shall have at all times from and after the date
of the initial Advance in effect one or more Hedging Instruments acceptable to
the Deal Agent with a qualified Hedge Counterparty, provided that:
(a)......the form and substance of any such Hedging Instrument
shall be acceptable to the Deal Agent;
(b)......all amounts payable by the Hedge Counterparty
thereunder shall be required to be paid by such counterparty directly to the
Collection Account; and
(c)......such hedging agreement or agreements or other Hedging
Instrument shall provide that the Hedge Counterparty acknowledges (i) that the
Borrower's rights thereunder have been irrevocably assigned to, and a security
interest therein has been granted to, the Collateral Agent for the benefit of
the Lender and the Hedge Counterparties on a pari passu basis, and (ii) the
terms and conditions set forth in this Agreement.
ARTICLE VI
COLLECTIONS AND DISBURSEMENTS; FEES
SECTION 6.1.......Establishment of Accounts.
(a)......Lockbox Account.
(i) The Servicer has established and shall maintain a
segregated account with a Lockbox Account Bank titled "CNL Financial
Services, LP, as Servicer".
(ii) The Borrower, the Servicer and the Transferring
Affiliates, as the case may be, shall instruct (or cause to be
instructed) all Obligors to make all payments on the Pledged
Receivables to the Lockbox Account or Lockbox, as the case may be, by
wire transfer, ACH transfer, check or other means acceptable to the
Lender, and all Collections on Pledged Receivables will, pending
remittance to the Collection Account, be held for the benefit of the
Collateral Agent and immediately after such proceeds have cleared and
become available in accordance with the policies of the Lockbox Account
Bank, shall be transferred to the Collection Account.
(iii) The Borrower and Servicer will deposit or cause to be
deposited in the Lockbox Account all cash, checks, money orders, wire
transfers, Collections or other Proceeds received by the Borrower and
the Servicer (and not the lockbox Account Bank) in respect of Pledged
Receivables immediately upon the receipt thereof in the original form
received (if other than cash). Until so deposited, all such proceeds
shall be held in trust for the Collateral Agent by the Borrower or
Servicer, as the case may be.
(iv) In the event that any Lockbox Agreement terminates for
any reason or any Lockbox Account Bank fails to comply with its
obligations under the Lockbox Agreement for any reason, then the
Borrower shall promptly notify all Obligors to make all future payments
to another existing Lockbox Account or to a new Lockbox Account
established in accordance with the following sentence. The Borrower
shall not establish any new Lockbox Account unless (1) it has received
the prior written consent of the Deal Agent and the Collateral Agent,
(2) such new Lockbox Account is established with a Lockbox Account Bank
satisfactory to the Deal Agent and the Collateral Agent, and (3) the
Deal Agent has received a Lockbox Agreement covering such new account
duly executed and delivered by the Lockbox Account Bank, the Servicer
and the Borrower. The Borrower shall not close any Lockbox Account
without the prior consent of the Deal Agent unless all Obligors have
previously been instructed to remit payments to a different Lockbox
Account and the Lockbox Account Bank has agreed in writing to forward
any payments received to the new Lockbox Account.
(b)......Collection Account.
(i) The Deal Agent, as agent for the Collateral Agent, has
established and shall maintain a segregated deposit account with the
Depositary titled "Neptune Funding Corporation--Collection Account (CNL
APF Partners, LP)." The Borrower agrees that the Collateral Agent shall
have exclusive dominion and control of the Collection Account and all
monies, instruments and other property from time to time in the
Collection Account; provided, that such dominion and control shall be
subject to the Servicer's right to make withdrawals from the Collection
Account for the purpose of applying such amounts to required payments
under this Article VI, which right may be terminated by the Collateral
Agent at any time in its sole discretion, and until such right has been
so terminated, all withdrawals required to be made from the Collection
Account shall be made by the Servicer; further provided, that Borrower
may direct the Collateral Agent in the investment of funds in the
Collection Account into Eligible Investments.
(ii) In the event that the Depositary wishes to resign as
depositary of the Collection Account for any reason or fails to carry
out the instructions of the Deal Agent or the Collateral Agent for any
reason, then the Deal Agent shall promptly notify the Lender and the
Borrower. The Deal Agent shall not close the Collection Account unless
it shall have (A) provided such notice to the Lender and the Borrower,
(B) received the prior written consent of the Collateral Agent, (C)
established a new account with the Depositary or with a new depositary
institution satisfactory to the Deal Agent and the Collateral Agent,
(D) entered into an agreement covering such new account with such new
depositary institution satisfactory in all respects to the Deal Agent,
the Collateral Agent and the Borrower (whereupon such new account shall
become the Collection Account for all purposes of the Basic Documents),
and (E) taken all such action as the Collateral Agent shall require to
grant and perfect a first priority security interest in such new
Collection Account to the Collateral Agent under this Agreement.
SECTION 6.2.......Funding of Collection Account.
No later than 11:30 a.m. (New York City time) on each Business Day:
(i) the Servicer shall instruct each Lockbox Account Bank to
transfer all Collections deposited in any Lockbox Account prior to such
Business Day to the Collection Account immediately after such funds
have cleared and become available in accordance with the policies of
the Lockbox Account Bank;
(ii) the Servicer shall within two Business Days of receipt
transfer to a Lockbox Account or the Collection Account all Collections
received by it or on its behalf with respect to the Collateral;
(iii) if the Deal Agent has notified the Borrower of any
Borrowing Excess, the Borrower shall deposit cash in the amount of such
Borrowing Excess in the Collection Account in accordance with the
provisions of Section 6.3;
(iv) to the extent required pursuant to Section 8.6, the
Borrower shall deposit, or shall cause to be deposited to the
Collection Account, all proceeds in connection with any release of
Collateral. SECTION 6.3.......Borrowing Excess.
If on any Business Day the Deal Agent shall notify the
Borrower of any Borrowing Excess or the Borrower shall notify the Deal Agent of
the same, the Borrower shall deposit the amount of such Borrowing Excess in the
Collection Account by 11:30 a.m. not later than the third (3rd) Business Day
following the date of such notice.
SECTION 6.4.......Disbursements From the Collection Account -- Payment
Date Procedures.
(a)......No later than 11:00 a.m. on each Payment Date during
the Revolving Period, the amounts held in the Collection Account shall be
disbursed in the following priority:
(i) if a Servicer Event of Default has occurred and a
Successor Servicer has been appointed, to the Successor Servicer in an
amount equal to its accrued and unpaid Successor Servicing Fees and
Expenses to the end of the preceding Collection Period and any other
amounts owed to the Successor Servicer (including unpaid costs
associated with the transfer of servicing to such Successor Servicer);
(ii) to each Hedge Counterparty all amounts (including any
termination amounts) owing to such Hedge Counterparty under its
respective Hedging Instruments;
(iii) to the Servicer, unless a Servicer Event of Default
shall have occurred and be continuing, in an amount equal to its
accrued and unpaid Servicing Fee to the end of the preceding Collection
Period, to the extent not paid under (i) above;
(iv) to the Deal Agent for distribution to the Lender (or, if
applicable, any Indemnified Party) in payment of the following
obligations in the following amounts and in the following priority:
(A) an amount equal to the accrued and unpaid Note
Interest through the end of the Yield Period ending on such
Payment Date, plus the amount, if any, of accrued Note
Interest for any prior Yield Period that remains unpaid;
(B) all Additional Amounts incurred and payable to
any Affected Party through the end of the Yield Period ending
on such Payment Date;
(C) all other Borrower Secured Obligations accrued
and payable under this Agreement or any other Basic Document
other than principal of the Advances (including Indemnified
Amounts incurred and payable to any Indemnified Party) through
the Yield Period ending on such Payment Date;
(D) if there is a Borrowing Excess, an amount equal
to such Borrowing Excess, in repayment of the outstanding
principal amount of the Advances; and
(E) if the Revolving Period has expired, an amount
equal to the aggregate outstanding principal balance of the
Advances, to the repayment of such Advances until such
outstanding principal balance has been reduced to zero;
(v) to the Servicer, during the continuance of any Servicer
Event of Default but prior to the appointment of a Successor Servicer,
in an amount equal to its accrued and unpaid Servicing Fee to the end
of the preceding Collection Period; and
(vi) to the extent of any excess Collections remaining in the
Collection Account after the payment of items (i) through (v) above,
that excess, at the election of the Borrower, to be released to an
account previously designated by the Borrower.
(b)......Two Business Days prior to each Payment Date, the
Deal Agent shall determine and notify the Borrower of any Collection Account
Deficiency for the preceding Collection Period, and the Borrower shall deposit
cash in the amount of such Collection Account Deficiency to the Collection
Account.
SECTION 6.5.......Notification by Servicer.
The Servicer shall notify the Borrower and the Deal Agent of
the determinations and disbursements made pursuant to Sections 6.4 and 6.7.
SECTION 6.6.......Investment of Collections.
During the Revolving Period, to the extent there are
uninvested amounts deposited in the Collection Account, the Deal Agent shall, at
the direction of the Borrower, invest all such amounts in Eligible Investments
selected by the Borrower that mature no later than the Business Day before the
immediately succeeding Payment Date. If the Borrower does not so direct the
investment of such amounts, the Deal Agent may, in its discretion, cause such
amounts to be invested in Eligible Investments selected by the Deal Agent that
mature no later than the Business Day before the immediately succeeding Payment
Date. Any earnings thereon shall be deposited into the Collection Account on
such Payment Date. Any investment of such amounts shall be solely at the
discretion of the Deal Agent subject to the restrictions described above. In no
event shall the Deal Agent have any liability to the Borrower for any loss in
respect of any investment or reinvestment made by it pursuant to this Section
6.6.
SECTION 6.7.......Termination Procedure.
(a)......On the earlier of (i) the first Business Day after
the Commitment Termination Date on which the aggregate outstanding principal
balance of the Advances has been reduced to zero or (ii) the Termination Date,
the Borrower shall immediately deposit into the Collection Account an amount
sufficient, when combined with the Collections already on deposit therein and
available for such purpose in accordance with the priority of payments set forth
in Section 6.4, to pay the Aggregate Unpaids in full.
(b)......On the first Business Day after the Commitment
Termination Date on which the Aggregate Unpaids have been reduced to zero, all
amounts held in the Collection Account, if any, shall be disbursed to the
Borrower and all security interests of the Lender and the Collateral Agent in
all of the Collateral owned by the Borrower shall be released by the Lender and
the Collateral Agent. Such disbursement shall constitute the final payment to
which the Borrower is entitled pursuant to the terms of this Agreement.
ARTICLE VII
APPOINTMENT OF THE SERVICER
SECTION 7.1.......Appointment of the Servicer.
The Borrower hereby appoints the Servicer as its agent to
service the Pledged Receivables and enforce its respective rights and interests
in and under each Pledged Receivable and to serve in such capacity until the
termination of its responsibilities pursuant to Sections 7.7, 9.2 or subsection
3(A) of Exhibit I. The Servicer hereby agrees to perform the duties and
obligations with respect thereto set forth herein. The Servicer may, with the
prior consent of the Borrower and the Deal Agent, subcontract with a
Sub-Servicer for collection, servicing or administration of the Pledged
Receivables, provided that (a) the Servicer shall remain liable for the
performance of the duties and obligations of the Sub-Servicer pursuant to the
terms hereof, and (b) any Sub-Servicing Agreement that may be entered into and
any other transactions or services relating to the Pledged Receivables involving
a Sub-Servicer shall be deemed to be between the Sub-Servicer and the Servicer
alone and the Borrower, the Lender, the Deal Agent and the Collateral Agent
shall not be deemed parties thereto and shall have no obligations, duties or
liabilities with respect to the Sub-Servicer.
SECTION 7.2.......Duties and Responsibilities of the Servicer.
(a)......The Servicer shall conduct the servicing,
administration and collection of the Pledged Receivables and shall take, or
cause to be taken, all such actions as may be necessary or advisable to service,
administer and collect Pledged Receivables from time to time on behalf of the
Borrower and for the benefit of the Secured Parties.
(b)......The duties of the Servicer shall include, without
limitation:
(i) preparing and submitting of claims to, and
post-billing liaison with, Obligors on Pledged Receivables;
(ii) maintaining all necessary Servicing Records with respect
to the Pledged Receivables and providing such reports to the Deal Agent
in respect of the servicing of the Pledged Receivables (including
information relating to its performance under this Agreement) as may be
required hereunder or as the Deal Agent may reasonably request;
(iii) maintaining and implementing administrative and
operating procedures (including, without limitation, an ability to
recreate Servicing Records evidencing the Pledged Receivables in the
event of the destruction of the originals thereof) and keeping and
maintaining all documents, books, records and other information
reasonably necessary or advisable for the collection of the Pledged
Receivables (including, without limitation, records adequate to permit
the identification of each new Pledged Receivable and all Collections
of and adjustments to each existing Pledged Receivable);
(iv) promptly delivering to the Deal Agent or the Collateral
Agent, from time to time, such information and Servicing Records with
respect to the Pledged Receivables (including information relating to
its performance under this Agreement) as the Deal Agent or the
Collateral Agent may from time to time reasonably request;
(v) identifying each Pledged Receivable clearly and
unambiguously in its Servicing Records to reflect that such Pledged
Receivable is owned by the Borrower and pledged to the Collateral
Agent;
(vi) complying in all material respects with the Credit and
Collection Policies in regard to each Pledged Receivable;
(vii) complying in all material respects with all applicable
laws, rules, regulations and orders with respect to it, its business
and properties and all Pledged Receivables and Collections with respect
thereto;
(viii) preserving and maintaining its existence, rights,
franchises and privileges as a limited partnership in the jurisdiction
of its organization, and qualifying and remaining qualified in good
standing as a foreign limited partnership and qualifying to and
remaining authorized to perform obligations as Servicer (including
enforcement of collection of Pledged Receivables on behalf of the
Lender, each Hedge Counterparty and the Collateral Agent) in each
jurisdiction where the failure to preserve and maintain such existence,
rights, franchises, privileges and qualification would materially
adversely affect (A) the rights or interests of the Borrower, Lender,
each Hedge Counterparty and the Collateral Agent in the Pledged
Receivables, (B) the collectibility of any Pledged Receivable, or (C)
the ability of the Servicer to perform its obligations hereunder;
(ix) promptly after it obtains actual knowledge thereof,
immediately notifying the Deal Agent of the occurrence of a Termination
Event (including, without limitation, a material adverse change in the
financial condition of any Affiliate of the Borrower);
(x) notifying the Deal Agent promptly after it obtains actual
knowledge thereof, of any material action, suit, proceeding, dispute,
offset, deduction, defense or counterclaim that is or may be (1)
asserted by an Obligor with respect to any Pledged Receivable, or (2)
reasonably expected to have a Material Adverse Effect on the Borrower
or Servicer;
(xi) arranging for the direct remittance of all Collections
with respect to each Pledged Receivable to the Lockbox Account or
Lockbox, as the case may be; and
(xii) notifying the Deal Agent of any proposed change in the
Credit and Collection Policies.
(c)......The Lender, the Deal Agent and the Collateral Agent
shall not have any obligation or liability with respect to any Pledged
Receivables, nor shall any of them be obligated to perform any of the
obligations of the Servicer hereunder.
SECTION 7.3.......Authorization of the Servicer.
(a)......Each of the Borrower and the Deal Agent on behalf of
the Lender and each Hedge Counterparty and the Collateral Agent hereby
authorizes the Servicer (including any successor thereto) to take any and all
reasonable steps in its name and on its behalf necessary or desirable and not
inconsistent with the pledge of the Pledged Receivables to the Collateral Agent,
but subject to Servicer's right to follow customary market practices in
accordance with its reasonable business judgment, in the reasonable
determination of the Servicer, to collect all amounts due under any and all
Pledged Receivables, including, without limitation, endorsing any of their names
on checks and other instruments representing Collections, executing and
delivering any and all instruments of satisfaction or cancellation, or of
partial or full release or discharge, and all other comparable instruments, with
respect to the Pledged Receivables and, after the delinquency of any Pledged
Receivable and to the extent permitted under and in compliance with applicable
law and regulations and the Credit and Collection Policies, to commence
proceedings with respect to enforcing payment of such Pledged Receivables, and
adjusting, settling or compromising the account or payment thereof, to the same
extent as the Borrower could have done. The Borrower, each Transferring
Affiliate and the Deal Agent on behalf of the Lender, Collateral Agent and each
Hedge Counterparty shall furnish the Servicer (and any successors thereto) with
any powers of attorney and other documents necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder, and
shall cooperate with the Servicer to the fullest extent in order to ensure the
collectibility of the Pledged Receivables. In no event shall the Servicer be
entitled to make the Lender, the Borrower, any Hedge Counterparty, the
Collateral Agent or the Deal Agent a party to any litigation without such
party's express prior written consent (other than as required for purposes of
any routine foreclosure or similar collection procedure).
(b)......After a Termination Event has occurred and is
continuing, at the Collateral Agent's direction the Servicer shall take such
action as the Collateral Agent may deem necessary or advisable to enforce
collection of the Pledged Receivables and the Borrower Assigned Agreements;
provided, however, that the Collateral Agent may, at any time that a Termination
Event has occurred and is continuing, notify any Obligor with respect to any
Pledged Receivables or obligors under the Borrower Assigned Agreements of the
assignment of such Pledged Receivables and Borrower Assigned Agreements, as the
case may be, to the Borrower and the pledge of such Pledged Receivables and
Borrower Assigned Agreements to the Collateral Agent and direct that payments of
all amounts due or to become due to the Borrower thereunder be made directly to
the Collateral Agent or any servicer, collection agent or lockbox or other
account designated by the Collateral Agent and, upon such notification and at
the expense of the Borrower, the Collateral Agent may enforce collection of any
such Pledged Receivables or the Borrower Assigned Agreements and adjust, settle
or compromise the amount or payment thereof.
SECTION 7.4.......Servicing Fees.
As compensation for its servicing activities and as
reimbursement for its expenses in connection therewith, the Servicer shall be
entitled to receive the Servicing Fees pursuant to, and subject to the priority
of payments set forth in, Section 6.4, payable monthly in arrears on each
Payment Date with respect to the preceding Collection Period. Except as provided
in the following two sentences, the Servicer shall be required to pay for all
expenses incurred by the Servicer in connection with its activities hereunder
(including any payments to accountants, counsel or any other Person) and shall
not be entitled to any payment therefor other than the Servicing Fees. The
Servicer shall be reimbursed for extraordinary expenses incurred by it in
connection with its reasonable efforts to realize upon defaulted Pledged
Receivables to the extent such expenses are recoverable out of the related
Collateral or Proceeds or from the Obligor. The Servicer shall not be required
to expend its own funds in connection with any such realization unless, in the
reasonable judgment of the Servicer, such realization will allow the Servicer to
recover its own funds out of the related Collateral or Proceeds or from the
Obligor.
SECTION 7.5.......Negative Covenants of the Servicer.
The Servicer shall not, without the prior written consent of
the Deal Agent:
(a)......sell, assign (by operation of law or otherwise) or
otherwise dispose of, or create or suffer to exist any Adverse Claim upon or
with respect to (and any such purported disposition shall be null and void) any
Collateral, or upon or with respect to the Collection Account or any other
account to which any Collections of any Collateral are deposited, or assign any
right to receive income in respect thereof;
(b)......extend, amend, waive, or otherwise modify the terms
of any Pledged Receivable, other than:
(i) adjusting, settling or compromising the account or payment
of such Pledged Receivable pursuant to Section 7.3(a) and except for
deferments in the ordinary course of business which are consistent with
the Credit and Collection Policies;
(ii) except in accordance with amendments permitted under
Section 5.2(b), amending such Pledged Receivable in accordance with the
Credit and Collection Policy in a manner which does not extend the
scheduled maturity date of, modify the interest rate or rent payable
under (except as required by law), or constitute a cancellation or
discharge of the outstanding Franchise Loan Balance of, such Pledged
Receivable and does not materially and adversely affect the security
afforded by the real property, furnishings, fixtures or equipment
securing or supporting payments on such Pledged Receivable and which
would not cause such Pledged Receivable to cease to be an Eligible
Receivable;
(c)......make any material change in the character of its
business;
(d)......without 30 days' prior written notice to the Deal
Agent, make any change to its corporate name or use any trade names, fictitious
names, assumed names or "doing business as" names; or
(e)......without the prior written consent of the Lender or
the Deal Agent, agree or consent to or otherwise permit to occur any material
amendment, modification, change, supplement, or rescission of the Credit and
Collection Policies in whole or in part in any manner, except in accordance with
amendments permitted under Section 5.2(b).
SECTION 7.6.......Reporting.
During the term of this Agreement, the Servicer shall keep or
cause to be kept in reasonable detail books and records of the account of the
Servicer's assets and business, including, but not limited to, books and records
relating to the transactions contemplated in the Basic Documents) which shall be
furnished to the Deal Agent upon request at reasonable times and at reasonable
intervals (but not more often than quarterly) so as not to create a commercially
unreasonable burden on the operation of Borrower. The Borrower (or the Servicer,
on behalf of the Borrower) shall furnish to the Deal Agent:
(a)......monthly, as soon as available, and in any event, not
later than the Report Date, a Monthly Report in the form of Exhibit F, which
Monthly Report shall be certified by an officer of the Borrower and shall
contain a representation or warranty by the Borrower that no Borrowing Excess
exists hereunder;
(b)......as soon as available and in any event within 120 days
(or the next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each fiscal year, (i) a copy of the audited
financial statements (if applicable, on a consolidated basis) for such year for
the Parent and any consolidated Subsidiaries of the Parent, certified by
independent public accountants acceptable to the Deal Agent and each other
report or statement sent to shareholders by the Parent and (ii) a copy of the
financial statements (if applicable, on a consolidated basis) for such year for
each of the Servicer and the Borrower and any consolidated Subsidiaries of such
Person, certified by the chief financial officer or chief accounting officer of
such Person and stating the information set forth therein fairly presents the
financial condition of such Person and any consolidated Subsidiaries of such
Person in accordance with GAAP as of and for the fiscal year then ended and
confirming, in the case of the Borrower, that the Borrower is in compliance with
all of its financial covenants in this Agreement, and each other report or
statement sent to partners by the Borrower or the Servicer;
(c)......as soon as available and in any event within 45 days
(or next succeeding Business Day if the last day of such period is not a
Business Day) after the end of each of the first three quarters of each fiscal
year of each of the Borrower, the Servicer and the Parent, a balance sheet (if
applicable, on a consolidated basis) of such Person and any consolidated
Subsidiaries of such Person, as of the end of such quarter and including the
prior comparable period, and statements of income (if applicable, on a
consolidated basis), of such Person and any consolidated Subsidiaries of such
Person, for such quarter and for the period commencing at the end of the
previous fiscal year and ending with the end of such quarter, certified by the
chief financial officer or chief accounting officer of such Person identifying
such documents as being the documents described in this paragraph (c) and
stating the information set forth therein fairly presents the financial
condition of such Person and any consolidated Subsidiaries of such Person in
accordance with GAAP as of and for the periods then ended, subject to year-end
adjustments consisting only of normal, recurring accruals and confirming that
the partners' capital (i.e., partnership assets less partnership liabilities)
for the Borrower is not less than $250,000,000;
(d)......as soon as available and in any event by September 30
of each year (or the next succeeding Business Day if September 30 is not a
Business Day), an Officer's Certificate stating, as to each signer thereof, that
(i) a review of the activities of the Servicer during the year ended on the
preceding June 30 and of its performance under this Agreement has been made
under such officer's supervision, (ii) to the best of such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof; (iii) the Servicer has complied with
the covenants set forth in Section 7.5; and (iv) the representations and
warranties of the Servicer in Section 4.3 are true and correct as if made on the
date of such Officer's Certificate;
(e)......as soon as possible and in any event within five (5)
Business Days after the occurrence of a Termination Event, the statement of the
chief financial officer or chief accounting officer of the Borrower setting
forth complete details of such Termination Event and the action which the
Borrower has taken, is taking and proposes to take with respect thereto;
(f)......as soon as available and in any event within 90 days
after June 30 of each year, a letter from a firm of independent public
accountants acceptable to the Deal Agent (which may be the same firm that
certifies the audited financial statements referred to in Section 7.6(b)) to the
effect that such firm has examined the Monthly Reports and such Servicing
Records relating to the Pledged Receivables as such firm deems necessary as a
basis for the report contemplated by this Section 7.6(f) and has issued its
report therefor and that such examination (1) was made in accordance with
generally accepted auditing standards, and accordingly included such tests of
the accounting records and such other audit procedures as such firm considered
necessary in the circumstances; (2) included an examination of the delinquency
and loss statistics relating to the Servicer's portfolio of Pledged Receivables;
and (3) except as described in the report, disclosed no exceptions or errors in
the records relating to Pledged Receivables serviced for others that, in the
firm's opinion, requires such firm to report. The accountant's report shall
further state that (1) the Servicer has completed with the minimum servicing
standards in the Uniform Single Attestation Program for Mortgage Bankers
("USAP") published by the Mortgage Bankers Association of America; (2) except as
disclosed in the report, no exceptions or errors were found; (3) except as
disclosed in the report, the delinquency and loss information relating to the
Pledged Receivables contained in the Monthly Reports was found to be accurate;
(4) except for (i) such exceptions as such firm shall believe to be immaterial,
and (ii) such other exceptions as shall be set forth in such statement, such
firm has examined the financial statements for the preceding year of the
Servicer and, on the basis of such examination, the Servicer has complied during
such year with such covenants; (5) except for (i) such exceptions as such firm
shall believe to be immaterial, and (ii) such other exceptions as shall be set
forth in such statement, such firm has examined the Monthly Reports delivered
during the previous calendar year (including the calculation of the Aggregate
Pledged Receivable Value set forth therein) and such Records relating to the
Pledged Receivables as such firm deems necessary as a basis for its report; and
(6) the Lender, the Deal Agent and the Collateral Agent may rely on such report;
not later than each Report Date, such detailed portfolio information as the Deal
Agent shall reasonably request in order for it to track and monitor the Pledged
Receivables, Collections and insurance;
(g)......promptly, copies of all public filings with any
Governmental Authority after the sending or filing thereof, the annual report of
the Servicer after the sending or filing thereof, and from time to time, such
other information, documents, records or reports respecting the Pledged
Receivables or the condition or operations, financial or otherwise, of the
Borrower, any Transferring Affiliate or any of their respective Subsidiaries, as
the Deal Agent or the Collateral Agent may, from time to time, reasonably
request, no such request to impose a commercially unreasonable burden on the
operations of Servicer.
SECTION 7.7.......Limited Partnership Existence.
The Servicer shall maintain its existence as a limited
partnership and shall at all times continue to be duly organized under the laws
of the State of Delaware and duly qualified and duly authorized to conduct its
business, and shall conduct its business in accordance with the terms of its
limited partnership agreement.
SECTION 7.8.......No Recourse.
The Servicer agrees that its recourse for the repayment of any
obligations of the Borrower owing hereunder or in respect hereof shall in all
events be limited to monies on deposit in the Collection Account or otherwise as
collected under the Pledged Receivables and any proceeds thereof and such
obligations shall only be payable by the Borrower to the extent that funds are
available therefor in accordance with this Agreement.
SECTION 7.9.......Cooperation With Requests for Information or
Documents.
The Servicer will provide all commercially reasonable
cooperation with all reasonable requests of the Borrower, the Deal Agent and the
Collateral Agent regarding the provision of any information or documents
necessary or desirable to allow each of the Borrower, the Deal Agent and the
Collateral Agent to carry out its responsibilities under the Basic Documents,
including the provision of such information or documents in electronic or
machine-readable format.
SECTION 7.10......Successor Servicer.
The terms and provisions of Exhibit I with respect to a
Successor Servicer are hereby incorporated by reference.
SECTION 7.11......Transfer of Servicing.
Notwithstanding any other provision of this Agreement to the
contrary, the Borrower may, upon written notice to the Collateral Agent,
transfer the servicing duties and obligations of the Servicer to U.S. Bank
National Association ("U.S. Bank"). U.S. Bank must agree in writing to perform
all of the duties and obligations of the Servicer under this Agreement. The
Borrower and U.S. Bank shall execute and deliver a Transfer Agreement mutually
agreed upon in advance and effective on the Transfer Date, whereby U.S. Bank
will agree to perform all of the duties and obligations of the Servicer under
this Agreement. U.S. Bank shall be entitled to payment of a pro rated portion
(based on actual days of service and a year of 365 days) of the Servicing Fee
during its term of service. Each Transfer Agreement shall include any additional
terms and provisions the parties reasonably determine are necessary or
appropriate and which additional terms and provisions are approved by the
parties to the Transfer Agreement, which approvals shall not be unreasonably
withheld. The Transfer Agreement shall contain a provision stating that the
former Servicer is relieved from all liability under this Agreement for acts or
omissions occurring after the Transfer Date. Within five (5) business days after
the Transfer Date, the Borrower may transfer servicing and appoint the former
Servicer as the Servicer. The transfer of servicing shall be contingent upon the
receipt by the Collateral Agent of written notice from the Borrower and written
consent from the former Servicer of its acceptance of its appointment. In the
event that the Borrower elects to transfer servicing and appoint the former
Servicer as the Servicer, U.S. Bank shall be relieved from all liability under
this Agreement for acts or omissions occurring after the later of the date of
the written notice from the Borrower or the written consent from the former
Servicer of its acceptance of its appointment. On the sixth Business Day after
the Transfer Date and thereafter, servicing may only be transferred in
accordance with the procedures set forth in Exhibit I hereto.
ARTICLE VIII
GRANT OF SECURITY INTERESTS
SECTION 8.1.......Borrower's Grant of Security Interest.
As security for the prompt payment or performance in full when
due, whether at stated maturity, by acceleration or otherwise, of all Borrower
Secured Obligations, the Borrower hereby assigns and pledges to the Collateral
Agent and grants to the Collateral Agent a security interest in and lien upon,
all of the Borrower's right, title and interest in and to the following, in each
case whether now or hereafter existing or in which Borrower now has or hereafter
acquires an interest and wherever the same may be located (collectively, the
"Collateral"):
(a)......all Pledged Receivables, Collections, Obligor
Documents and Records related thereto;
(b)......all Lockbox Agreements, Franchise Receivable
Assignments and Obligor Documents now or hereafter in effect (collectively, the
"Borrower Assigned Agreements"), including (i) all rights of the Borrower to
receive moneys due and to become due under or pursuant to the Borrower Assigned
Agreements, (ii) all rights of the Borrower to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Borrower Assigned
Agreements, (iii) the Borrower's right of foreclosure as lienholder of the real
or personal property underlying the Pledged Receivables; (iv) claims of the
Borrower for damages arising out of or for breach of or default under the
Borrower Assigned Agreements, and (v) the right of the Borrower to amend, waive
or terminate the Borrower Assigned Agreements, to perform under the Borrower
Assigned Agreements and to compel performance and otherwise exercise all
remedies and rights under the Borrower Assigned Agreements;
(c)......all of the following (the "Borrower Account
Collateral"): (i) each Lockbox Account, the Lockboxes and all funds held in each
Lockbox Account and the Lockboxes and all certificates and instruments, if any,
from time to time representing or evidencing each Lockbox Account, the Lockboxes
or such funds, (ii) the Collection Account, all funds held in such account, and
all certificates and instruments, if any, from time to time representing or
evidencing the Collection Account or such funds, (iii) all Investments from time
to time of amounts in each Lockbox Account and the Collection Account, and all
certificates and instruments, if any, from time to time representing or
evidencing such Investments, (iv) all notes, certificates of deposit and other
instruments from time to time delivered to or otherwise possessed by the Lender
or any assignee or agent on behalf of the Lender in substitution for or in
addition to any of the then existing Borrower Account Collateral, and (v) all
interest, dividends, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any and all of the then existing Borrower Account Collateral; (d)......all
Hedging Instruments with respect to the Pledged Receivables;
(e)......all Real Property in which the Borrower has acquired
an interest (whether an ownership interest or a Lien) relating to any Pledged
Receivable (including any such Real Property in which the Borrower has retained
an interest following the termination of such Pledged Receivable);
(f)......all additional property that may from time to time
hereafter be granted and pledged by the Borrower or by anyone on its behalf
under this Agreement, including the deposit with the Lender, the Deal Agent or
the Collateral Agent of additional moneys by the Borrower; and
(g)......all Proceeds, accessions, substitutions, rents and
profits of any and all of the foregoing Collateral (including Proceeds that
constitute property of the types described in Sections 8.1 (a) through (f)
above) and, to the extent not otherwise included, all payments under insurance
(whether or not the Lender or any Hedge Counterparty or any assignee or agent on
behalf of the Lender or any Hedge Counterparty is the loss payee thereof) or any
indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.
SECTION 8.2.......Delivery of Collateral.
All Obligor Documents relating to the Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant to this
Agreement and the Custodial Agreement, and shall be in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent. From and after the Termination Date, the Collateral Agent
shall have the right, at any time in its discretion and without notice to the
Borrower or the Lender, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral.
SECTION 8.3.......Borrower Remains Liable.
Notwithstanding anything to the contrary in this Agreement,
(a) each of the Borrower and the Transferring Affiliates shall remain liable
under the Pledged Receivables, Borrower Assigned Agreements and other agreements
included in the Collateral to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
except to the extent otherwise expressly provided in this Agreement, the
exercise by the Deal Agent as agent of the Lender and each Hedge Counterparty or
the Collateral Agent as agent of the Lender and the Hedge Counterparties of any
of its rights under this Agreement shall not release the Borrower or the
Servicer from any of their respective duties or obligations under the Pledged
Receivables, Borrower Assigned Agreements or other agreements included in the
Collateral, (c) the Deal Agent as agent of the Lender and each Hedge
Counterparty and the Collateral Agent shall not have any obligation or liability
under the Pledged Receivables, Borrower Assigned Agreements or other agreements
included in the Collateral by reason of this Agreement, and (d) neither the
Collateral Agent nor the Lender nor any Hedge Counterparty shall be obligated to
perform any of the obligations or duties of the Borrower or the Servicer under
the Pledged Receivables, Borrower Assigned Agreements or other agreements
included in the Collateral or to take any action to collect or enforce any claim
for payment assigned under this Agreement.
SECTION 8.4.......Covenants of the Borrower and Servicer Regarding the
Collateral.
(a)......Offices and Records. The Borrower shall keep its
chief place of business and chief executive offices and the office where it
keeps its Records at the location specified in Schedule 7 or, upon thirty (30)
days' prior written notice to the Collateral Agent, at such other location in a
jurisdiction where all action required by Section 8.4(e) shall have been taken
with respect to the Collateral. The Borrower and the Servicer shall, until the
period ending one year after the repayment in full or maturity of each Pledged
Receivable or for such longer period as may be required by law, from the date on
which such Pledged Receivable arose, maintain the Records with respect to such
Pledged Receivable, including records of all payments received. The Borrower and
the Servicer will permit representatives of the Deal Agent and the Collateral
Agent at any time and from time to time (but no more often than quarterly)
during normal business hours of the Borrower and the Servicer and upon
reasonable advance notice (i) to inspect and make copies (at the sole cost and
expense of the Deal Agent or the Collateral Agent, as the case may be) of and
abstracts from such records, and (ii) to visit the properties of the Borrower or
the Servicer utilized in connection with the collection, processing or servicing
of the Pledged Receivables for the purpose of examining such Records, and to
discuss matters relating to the Pledged Receivables or the Borrower's or
Servicer's performance under this Agreement with any officer or employee of the
Borrower or Servicer having knowledge of such matters. In connection therewith,
the Deal Agent may institute procedures to permit it at its expense to confirm
the Obligor balances in respect of any Pledged Receivables. If a Termination
Event shall have occurred and be continuing, promptly upon request therefor, the
Borrower or the Servicer shall deliver to the Collateral Agent records
reflecting activity through the close of business on the Business Day
immediately preceding such Termination Event.
(b)......Maintain Records of Pledged Receivables. The Servicer
shall, at its own cost and expense, maintain satisfactory and complete records
of the Collateral, including a record of all payments received with respect to
the Collateral and all other dealings with the Collateral.
(c)......Performance of Borrower Assigned Agreements. The
Borrower shall (i) perform and observe all the terms and provisions of the
Borrower Assigned Agreements to be performed or observed by it, maintain the
Borrower Assigned Agreements in full force and effect, enforce the Borrower
Assigned Agreements in accordance with their terms and, upon the occurrence and
during the continuation of a Termination Event, take all such action to such end
as may be from time to time requested by the Collateral Agent, and (ii) upon
request of the Deal Agent or the Collateral Agent, make to any other party to
the Borrower Assigned Agreements such demands and requests as may be reasonable
for information and reports or for action as the Borrower is entitled to make
under the Borrower Assigned Agreements.
(d)......Notice of Adverse Claim. Each of the Borrower and the
Servicer shall advise the Deal Agent and the Collateral Agent promptly, in
reasonable detail, (i) of any Adverse Claim known to it made or asserted against
any of the Collateral which would have a material adverse effect on the value of
the Collateral, and (ii) of the occurrence of any event which would have a
material adverse effect on the aggregate value of the Collateral or on the
assignments and security interests granted by the Borrower in this Agreement.
(e)......Further Assurances; Financing Statements; Mortgages.
(i) Each of the Borrower and the Servicer severally agrees
that at any time and from time to time, at its expense, it shall
promptly execute, endorse and deliver all further instruments and
documents, and take all further action, that may be necessary or
reasonably desirable or that the Deal Agent or the Collateral Agent may
reasonably request to perfect and protect the assignments and security
interests granted or purported to be granted by this Article VIII or to
enable the Lender, the Hedge Counterparties, the Deal Agent or the
Collateral Agent to exercise and enforce its rights and remedies under
this Agreement with respect to any Collateral. Without limiting the
generality of the foregoing, the Borrower shall execute and file such
financing or continuation statements, or amendments thereto, such
Mortgages and Mortgage Assignments and such other instruments or
notices as may be necessary or reasonably desirable or that the Deal
Agent or the Collateral Agent may reasonably request to protect and
preserve the assignments and security interests granted by this
Agreement.
(ii) The Borrower, the Lender and the Hedge Counterparties
hereby severally authorize the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relating
to all or any part of the Collateral without the signature of the
Borrower, the Lender or any Hedge Counterparty where permitted by law.
A photographic or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. The
Collateral Agent will promptly send to the Borrower any financing
statements or continuation statements thereto which it files without
the signature of the Borrower and will promptly send to the Lender and
the Hedge Counterparties any financing statements or continuation
statements thereto which it files without the signature of the Lender
except in the case of filings of copies of this Agreement as financing
statements, the Collateral Agent will promptly send the Borrower, the
Lender or the Hedge Counterparties, as the case may be, the filing or
recordation information with respect thereto.
(iii) Each of the Borrower and the Servicer shall furnish to
the Collateral Agent from time to time such statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.
(f)......Defaulted Receivables. Upon receipt of notice from
the Borrower, the Deal Agent or any other Person, or if the Servicer otherwise
learns, that the Obligor under any Franchise Receivable is in material default
thereunder, the Servicer will take such action as is appropriate, consistent
with the Servicer's administration of leases and loans serviced for its
Affiliates and consistent with the customary practices of servicers in the same
segment of the industry, including such action as may be necessary to cause, or
attempt to cause, the Obligor thereunder to cure such default (if the same may
be cured) or to terminate or attempt to terminate such Franchise Receivable and
to recover, or attempt to recover, all damages resulting from such default to
the extent permitted under such Franchise Receivable and under applicable law.
(g)......Liquidation of Real Property. Upon the expiration or
termination of any Franchise Lease (whether such expiration or termination
arises following the occurrence of a default under such Franchise Lease or for
any other reason), the Servicer will use its best efforts to promptly sell all
of the Real Property which was the subject of such Franchise Lease, such sale to
be made in a manner consistent with that utilized by the Servicer with respect
to Real Property serviced by it for its Affiliates and otherwise in a manner
consistent with industry practices, so as to realize, to the extent possible
under then prevailing market conditions, the fair market value of such Real
Property; provided that, prior to the last day of the Revolving Period, the
Servicer shall have the right, instead of selling such Real Property, to
promptly lease such property to an Eligible Obligor pursuant to a Franchise
Lease so long as (i) such Franchise Lease is an Eligible Receivable and (ii)
such Franchise Lease shall have been added to the Collateral pursuant to Section
2.2(g), or to substitute a new Franchise Lease for such Franchise Lease pursuant
to Section 8.8; further provided, that the Servicer may, instead of selling such
Real Property, substitute a new Franchise Lease for such Franchise Lease
pursuant to Section 8.8 at any time if such expiration or termination arises
following the occurrence of a default under such Franchise Lease. In no event
shall the Servicer or any Affiliate of the Servicer purchase any such Real
Property from the Borrower unless (i) the Deal Agent shall have approved the
documents evidencing such sale and (ii) the purchase price paid to the Borrower
with respect thereto at least equal to the greater of the fair market value of
such Real Property and the Rent Cost Basis for such Real Property. In the event
the Servicer is required to sell any item of Real Property pursuant to the
provisions of this Section 8.4(g) at a time when the Servicer is trying to lease
or sell other similar items of Real Property, the Servicer will not disfavor the
Real Property included in the Collateral in its selling efforts.
(h)......Insurance. If the Borrower fails to maintain (or
caused to be maintained) any of the insurance required by Section 5.1(m), the
Deal Agent or the Collateral Agent may (but shall not be obligated to) procure
such insurance and charge the cost thereof to the Borrower as part of the
Borrower Secured Obligations payable on demand.
SECTION 8.5.......Limited Recourse. Anything in this Agreement or any
of the other Basic Documents to the contrary notwithstanding, no recourse for
the repayment of the Borrower Secured Obligations shall be had against the
Borrower except to the extent of the Collateral; provided that nothing in this
Section 8.5 shall impair the validity of the obligations of the Borrower arising
under this Agreement and the other Basic Documents, prevent the taking of any
action permitted by law against the Borrower to the extent of the Collateral or
the proceeds thereof, or in any way affect or impair the right of the Collateral
Agent or any Secured Party to take any action permitted by law to realize upon
any of the Collateral; and provided further that, notwithstanding anything
herein to the contrary, each Secured Party shall have full recourse to the
Borrower and to any property or assets of the Borrower to satisfy any claim of
such Secured Party pursuant to Section 11.1 or Section 12.3 of this Agreement
arising out of or relating to (i) any fraud, gross negligence or willful
misconduct on the part of the Borrower or the Servicer, (ii) any environmental
liability arising out of or in connection with any Real Property securing any
Franchise Loan or which is the subject of any Franchise Lease, (iii) any failure
by the Borrower or the Servicer to apply funds as required pursuant to Section
6.4(A)(iv)(e), or (iv) any failure on the part of the Borrower to perform any of
its obligations under Section 8.7.
SECTION 8.6.......Release of Collateral.
(a)......Generally. The Borrower may obtain releases of the
security interest of the Collateral Agent in all or any part of the Collateral
to the extent that either (i) such release is necessary in order to consummate
the sale of the Real Property which is the subject of a Franchise Lease to the
related Obligor or any Affiliate thereof pursuant to a right or obligation of
such Obligor or such Affiliate satisfying the requirements set forth in clause
(o) of the definition of "Eligible Receivable", or (ii) (A) both before and
after giving effect to such release no Borrowing Excess exists and no event or
circumstance has occurred which constitutes a Termination Event or which, with
the giving of notice or the passage of time, or both, would constitute a
Termination Event, (B) prior to such release, any termination or partial
termination of any Hedging Instrument that is required under the terms of such
Hedging Instrument (including the terms of any agreement or document governing
such Hedging Instrument) has been effected in accordance with the terms thereof
and (C) after giving effect to such release, the Aggregate Eligible Receivables
value is not less than $25,000,000. Each request for a partial release of
Collateral (a "Release Request") shall be addressed to the Collateral Agent,
certifying as to compliance with the immediately preceding sentence and, if
applicable, acknowledging that the receipt of proceeds from such sale or
transfer to an Obligor or any other third party shall be deposited into the
Collection Account in accordance with Section 6.2. Such proceeds shall
thereafter be disbursed when the next disbursement is made from the Collection
Account in accordance with Section 6.4.
(b)......Releases. With respect to any release of Collateral
permitted by Section 8.6(a), the Collateral Agent shall, upon the request and at
the expense of the Borrower, (i) execute such releases as may be reasonably
requested by the Borrower to give effect to such release and (ii) deliver, or
instruct the Custodian to deliver, any Obligor Documents relating solely to the
Collateral so released.
(c)......Continuation of Lien. With respect to any Collateral
which is to be released in connection with the sale or transfer of such
Collateral to an Obligor or third party, the security interest in favor of the
Collateral Agent in such Collateral shall continue in effect until such time as
the proceeds from such sale or transfer have been deposited into the Collection
Account in accordance with this Agreement. Such funds shall thereafter be
disbursed when the next disbursement is made from the Collection Account in
accordance with Section 6.4.
(d)......Application of Proceeds; No Duty. Neither the Deal
Agent nor any other Secured Party shall be under any duty at any time (i) to
credit the Borrower for any amount due from any third party in respect of any
sale of any Collateral to such third party, until the Deal Agent has actually
received such amount in immediately available funds for deposit to the
Collection Account or (ii) to collect any amounts or otherwise enforce any
obligations due from any third party in respect of any such sale.
(e)......Representation in Connection with Releases. Each
Release Request delivered by the Borrower hereunder with respect to a release
described in Section 8.6(a)(ii) shall be deemed to constitute a representation
and warranty to the Deal Agent and the other Secured Parties to the effect that
immediately before and after giving effect to such release (i) no Borrowing
Excess exists and (ii) no event or circumstance has occurred which constitutes a
Termination Event or which, with the giving of notice or the passage of time, or
both, would constitute a Termination Event.
SECTION 8.7.......Substitution. (a) In the event the Borrower, the
Servicer or the Deal Agent determines (in the case of the Deal Agent, on a
reasonable basis) that any Franchise Receivable included, or purported to be
included, in the Collateral is not an Eligible Receivable (any such Franchise
Receivable, an "Ineligible Receivable"), then the Borrower shall, within 90 days
of such determination, substitute one or more Eligible Receivables for such
Ineligible Receivable in accordance with this Section 8.7; provided that the
Eligible Receivables added to the Collateral in connection with such
substitution shall have an aggregate Receivable Basis (the "Required Balance")
equal to or greater than the Receivable Basis of the Ineligible Receivable to be
removed from the Collateral in connection with such substitution. Any such
substitution shall be made on notice from the Borrower to the Deal Agent
specifying (i) the effective date of such substitution, which shall be a
Business Day, (ii) the Ineligible Receivable which is to be removed from the
Collateral in connection with such substitution and the Receivable Basis thereof
and (iii) the Eligible Receivables which are to be added to the Collateral in
connection with such substitution and the aggregate Receivable Basis thereof.
Any such addition of an Eligible Receivable shall be made in accordance with
Section 2.2(g). Upon the Collateral Agent's confirmation that Eligible
Receivables having the Required Balance have been so added to the Collateral,
the Ineligible Receivable which is the subject of such substitution shall be
deemed to have been released from the Collateral. With respect to any Ineligible
Receivable so released from the Collateral, the Collateral Agent shall, upon the
request and at the expense of the Borrower, (i) execute such releases as may be
reasonably requested by the Borrower to give effect to such release and (ii)
deliver, or instruct the Custodian to deliver, any Obligor Documents relating
solely to the Ineligible Receivables so released.
(b)......The Borrower may remove an Eligible Receivable from
the Collateral and substitute one or more Eligible Receivables in its place;
provided that (i) any such removal shall be made in accordance with, and subject
to the terms and conditions set forth in, Section 8.6 and (ii) any such
substitution shall be effected by adding the new Eligible Receivables to the
Collateral in accordance with Section 2.2(g).
ARTICLE IX
TERMINATION EVENTS
SECTION 9.1.......Termination Events.
If any of the following events (each, a "Termination Event")
shall occur and be continuing:
(a)......the Borrower shall fail to make any payment or
deposit required to be made by it under the terms of this Agreement or any other
Basic Document and such failure continues unremedied for a period of five (5)
Business Days
(b)......a Borrowing Excess shall exist for more than five (5)
Business Days; or
(c)......the Borrower shall fail to perform or observe in any
material respect any other covenant or other agreement of the Borrower set forth
in this Agreement or any other Basic Document, or (ii) any Transferring
Affiliate shall fail to perform or observe in any material respect any term,
covenant or agreement of such Transferring Affiliate set forth in any Franchise
Receivable Assignment or any other Basic Document, in each case when such
failure continues unremedied for more than fifteen (15) days after written
notice thereof shall have been given by the Deal Agent or the Collateral Agent
to such Person; or
(d)......any representation or warranty made by the Borrower
or any Transferring Affiliate pursuant to this Agreement or any other Basic
Document shall prove to be incorrect in any material respect as of the time when
the same shall have been made; or
(e)......any Event of Bankruptcy shall occur with respect to
the Borrower or any Transferring Affiliate; or
(f)......a Servicer Event of Default has occurred; or
(g)......The Borrower or any Transferring Affiliate shall fail
to pay any principal of or premium or interest on any Debt having an aggregate
outstanding principal amount of $10,000,000 or more ("Material Debt"), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Material Debt; or any other default under any
agreement or instrument relating to any Material Debt or any other event, shall
occur and shall continue after the applicable grace period, if any, specified in
such agreement or instrument if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Material
Debt; or any such Material Debt shall be declared to be due and payable or
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof, and such acceleration shall have a
Material Adverse Effect on such entity;
(h)......the Collateral Agent shall cease for any reason,
other than because of its own failure to file a continuation statement or take
other appropriate action within its control, to have a valid and perfected first
priority security interest in all of the Collateral and the proceeds thereof; or
(i)......(x) a final judgment for the payment of money in
excess of $3,000,000 shall have been rendered against the Borrower or any
Transferring Affiliate by a court of competent jurisdiction and the Borrower or
such Transferring Affiliate, as applicable, shall not, within thirty (30) days,
have either, (1) discharged or provided for the discharge of such judgment in
accordance with its terms, or (2) perfected a timely appeal of such judgment and
caused the execution thereof to be stayed during the pendency of such appeal or
(y) the Borrower or any Transferring Affiliate shall have made payments of
amounts in excess of $3,000,000, in settlement of any litigation; or
(j)......(i) the long-term debt rating of any Hedge
Counterparty under a Hedging Instrument is downgraded to below A- by S&P or DCR
or A3 by ▇▇▇▇▇'▇ or the short-term debt rating of any such counterparty is
downgraded to below A-1 by S&P or D-1 by DCR or P-1 by ▇▇▇▇▇'▇ and (ii) a
successor to such Hedging Counterparty acceptable to the Deal Agent is not in
place or collateral acceptable to the Deal Agent has not been posted, in each
case, within ten (10) Business Days; or
(k)......the Delinquency Ratio including only those Eligible
Receivables greater than 60 days past due shall exceed 5.0% at any time or the
cumulative aggregate Receivable Basis of all Defaulted Receivables shall exceed
$10,000,000 over any thirteen month period during the term of this Agreement; or
(l)......the Borrower shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as amended (the "40
Act") or the arrangements contemplated by this Agreement shall require
registration as an "investment company" within the meaning of the 40 Act;
then, and in any such event, the Deal Agent or the Lender may by notice to the
Borrower declare the Termination Date to have occurred, without demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower, and all Advances and all other amounts owing by the Borrower under
this Agreement shall be accelerated and become immediately due and payable,
provided, that if any Event of Bankruptcy shall occur with respect to the
Borrower, the Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 9.2.......Servicer Event of Default.
Upon the occurrence of any of the following events (each, a
"Servicer Event of Default"), the Lender may terminate the rights of the
Servicer and cause a successor Servicer to be appointed to service the Pledged
Receivables:
(a)......any failure by the Servicer to deposit or transfer
into the Collection Account any proceeds or payment, required to be so deposited
or transferred under the terms of this Agreement that shall continue unremedied
for a period of five (5) Business Days; or
(b)......any failure on the part of the Servicer to perform or
to observe in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement, which failure shall continue unremedied
for more than fifteen (15) days after the date on which written notice of such
failure or breach, requiring the same to be remedied, shall have been given to
the Servicer by the Borrower, the Deal Agent or the Collateral Agent; or
(c)......any representation or warranty made by the Servicer
pursuant to this Agreement or any other Basic Document shall prove to be
incorrect in any material respect as of the time when the same shall have been
made; or
(d)......any Event of Bankruptcy shall occur with respect to
the Servicer; or (e)......a Termination Event has occurred.
If a Servicer Event of Default shall occur, then, and in any such event, the
Deal Agent or the Lender may, by delivery of a Servicer Termination Notice to
the Borrower and the Servicer, terminate the servicing responsibilities of the
Servicer hereunder, without demand, protest or further notice of any kind, all
of which are hereby waived by the Servicer. Upon any such declaration and the
appointment and acceptance of a Successor Servicer, all authority and power of
the Servicer under this Agreement and the Custodial Agreement shall pass to and
be vested in the Successor Servicer appointed pursuant to Section 7.11.
In addition, if any such event shall occur and be continuing,
(i) the Deal Agent may direct that payment of all amounts payable under any
Pledged Receivable be made directly to the Collateral Agent or its designee,
(ii) the Borrower shall (at the Deal Agent's request) give notice of the Deal
Agent's interest in the Pledged Receivables to each Obligor and each guarantor
and direct that payments be made directly to the Deal Agent or its designee,
(iii) the Borrower shall (at the Deal Agent's request) transfer all Pledged
Receivable files to the Deal Agent or its designee; and (iv) the Borrower shall
authorize the Deal Agent to take any and all steps in the Borrower's name and on
behalf of the Borrower necessary (in the determination of the Deal Agent) to
collect all amounts due under the Pledged Receivables.
All related costs of replacing the Servicer and transferring
the servicing of the Pledged Receivables to a Successor Servicer, including but
not limited to all third party costs and reimbursable expenses of the Servicer,
shall be borne by the Servicer.
SECTION 9.3.......Control of Lockbox Account. Rabobank agrees for the
benefit of the Borrower and the Servicer that it will not exercise its right to
obtain exclusive ownership of and access to any Lockbox Account unless and until
a Termination Event has occurred.
ARTICLE X
REMEDIES
SECTION 10.1......Actions Upon Termination Event.
Upon the occurrence and during the continuation of a
Termination Event, the Servicer shall (i) deliver and turn over to the
Collateral Agent or to its representatives, or at the option of the Collateral
Agent, provide the Collateral Agent or its representatives with access to, at
any time, all of the Servicer's facilities, personnel, books and records
pertaining to the Collateral, including all Records, (ii) allow the Collateral
Agent to occupy the premises of the Servicer where such books, records and
Records are maintained, and (iii) assist the Collateral Agent in using such
premises, the equipment thereon and any personnel of the Servicer that the
Collateral Agent may lawfully employ to administer, service and collect the
Pledged Receivables.
If any Termination Event shall have occurred and be continuing
and the Deal Agent shall have declared the Termination Date to have occurred or
the Termination Date shall have been deemed to have occurred pursuant to Section
9.1, then the Collateral Agent may exercise in respect of the Collateral, in
addition to any and all other rights and remedies otherwise available to it, all
of the rights and remedies of a secured party upon default under the UCC (such
rights and remedies to be cumulative and nonexclusive), and, in addition, may
take the following remedial actions:
(a)......The Collateral Agent may, without notice to the
Borrower except as required by law and at any time or from time to time, charge,
set-off and otherwise apply all or any part of the Borrower Secured Obligations
against amounts payable to the Borrower from the Lockbox Account, the Lockboxes,
the Collection Account or any part of such accounts in accordance with the
priorities required by Section 10.2.
(b)......Consistent with the rights and remedies of a secured
party under the UCC (and except as otherwise required by the UCC), the
Collateral Agent may, without notice except as specified below, solicit and
accept bids for and sell the Collateral or any part of the Collateral in one or
more parcels at public or private sale, at any exchange, broker's board or at
any of the Lender's, Deal Agent's or Collateral Agent's offices or elsewhere,
for cash, on credit or for future delivery, and upon such other terms as the
Collateral Agent may deem commercially reasonable. The Borrower agrees that, to
the extent notice of sale shall be required by law, ten (10) or more Business
Days' notice to the Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Collateral Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Collateral Agent
may adjourn any public or private sale from time to time by announcement at the
time and place fixed for such sale, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Every such sale
shall operate to divest all right, title, interest, claim and demand whatsoever
of the Borrower in and to the Collateral so sold, and shall be a perpetual bar,
both at law and in equity, against the Borrower, any Transferring Affiliate, any
Person claiming the Collateral sold through the Borrower, any Transferring
Affiliate and their respective successors or assigns.
(c)......Upon the completion of any sale under Section
10.1(b), the Borrower or the Servicer will deliver or cause to be delivered all
of the Collateral sold to the purchaser or purchasers at such sale on the date
of sale, or within a reasonable time thereafter if it shall be impractical to
make immediate delivery, but in any event full title and right of possession to
such property shall pass to such purchaser or purchasers forthwith upon the
completion of such sale. Nevertheless, if so requested by the Collateral Agent
or by any purchaser, the Borrower shall confirm any such sale or transfer by
executing and delivering to such purchaser all proper instruments of conveyance
and transfer and releases as may be designated in any such request.
(d)......At any sale under Section 10.1(b), the Lender, the
Collateral Agent or any secured party may bid for and purchase the property
offered for sale and, upon compliance with the terms of sale, may hold, retain
and dispose of such property without further accountability therefor. Any holder
of the Note purchasing property at a sale under Section 10.1(b) may set off the
purchase price of such property against amounts outstanding under the Note in
full payment of such purchase price.
(e)......The Collateral Agent may exercise at the Borrower's
expense any and all rights and remedies of the Borrower under or in connection
with the Borrower Assigned Agreements or the other Collateral, including any and
all rights of the Borrower to demand or otherwise require payment of any amount
under, or performance of any provisions of, the Borrower Assigned Agreements.
SECTION 10.2......Application of Proceeds.
Any cash held by or on behalf of the Collateral Agent as
Collateral, whether from Pledged Receivables or otherwise, and all cash proceeds
received by the Collateral Agent in respect of any sale of, collection from or
other realization upon all or any part of the Collateral, shall be applied as
set forth in Section 6.4. Any surplus of such cash or cash proceeds held by or
on behalf of the Collateral Agent shall be disposed of in accordance with
Section 6.7.
SECTION 10.3......Exercise of Remedies.
No failure or delay on the part of the Collateral Agent to
exercise any right, power or privilege under this Agreement and no course of
dealing between the Borrower, the Servicer, the Lender or the Deal Agent, on the
one hand, and the Collateral Agent, on the other hand, shall operate as a waiver
of such right, power or privilege, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. The rights and remedies expressly provided in this Agreement
and the other Basic Documents are cumulative and not exclusive of any rights or
remedies which the Collateral Agent, the Lender or the Hedge Counterparties
would otherwise have pursuant to law or equity. No notice to or demand on any
party in any case shall entitle such party to any other or further notice or
demand in similar or other circumstances, or constitute a waiver of the right of
the other party to any other or further action in any circumstances without
notice or demand.
SECTION 10.4......Waiver of Certain Laws.
Each of the Borrower and the Servicer agrees, to the full
extent that it may lawfully so agree, that neither it nor anyone claiming
through or under it will set up, claim or seek to take advantage of any
appraisement, valuation, stay, extension or redemption law now or hereafter in
force in any locality where any Collateral may be situated in order to prevent
hinder or delay the enforcement of this Agreement or the foreclosure of any
Collateral, or the absolute sale of any of the Collateral or any part thereof,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchasers thereof, and each of the Borrower and the Servicer,
for itself and all who may at any time claim through or under it, hereby waives,
to the full extent that it may be lawful so to do, the benefit of all such laws,
and any and all right to have any of the properties or assets constituting the
Collateral marshalled upon any such sale, and agrees that the Collateral Agent
or any court having jurisdiction to foreclose the security interests granted in
this Agreement may sell the Collateral as an entirety or in such parcels as the
Collateral Agent or such court may determine.
SECTION 10.5......Power of Attorney.
Each of the Borrower and the Servicer hereby irrevocably
appoints the Collateral Agent its true and lawful attorney (with full power of
substitution) in its name, place and stead and at its expense, in connection
with the enforcement of the rights and remedies provided for in this Article X,
including with the following powers: (a) to give any necessary receipts or
acquittance for amounts collected or received hereunder, (b) to make all
necessary transfers of the Collateral in connection with any sale or other
disposition made pursuant hereto, (c) to execute and deliver for value all
necessary or appropriate bills of sale, assignments and other instruments in
connection with any such sale or other disposition, the Borrower and the
Servicer hereby ratifying and confirming all that such attorney (or any
substitute) shall lawfully do hereunder and pursuant hereto, and (d) to sign any
agreements, orders or other documents in connection with or pursuant to any
Basic Document or Hedging Instrument. Nevertheless, if so requested by the
Collateral Agent or a purchaser of Collateral, the Borrower shall ratify and
confirm any such sale or other disposition by executing and delivering to the
Collateral Agent or such purchaser all proper bills of sale, assignments,
releases and other instruments as may be designated in any such request.
ARTICLE XI
INDEMNIFICATION
SECTION 11.1......Indemnities by the Borrower.
(a)......Without limiting any other rights that the Collateral
Agent, the Lender, the Hedge Counterparties, the Deal Agent or any director,
officer, employee or agent or incorporator of such party (each an "Indemnified
Party") may have hereunder or under applicable law, the Borrower hereby agrees
to indemnify each Indemnified Party from and against any and all claims, losses,
liabilities, obligations, damages, penalties, actions, judgments, suits, and
related costs and expenses of any nature whatsoever, including reasonable
attorneys' fees and disbursements (all of the foregoing being collectively
referred to as "Indemnified Amounts"), which may be imposed on, incurred by or
asserted against an Indemnified Party in any way arising out of or relating to
(i) any breach of the Borrower's obligations under any Basic Document or (ii)
the financing or the pledge of or foreclosure on the Collateral, excluding,
however, Indemnified Amounts to the extent resulting solely from gross
negligence or willful misconduct on the part of such Indemnified Party. Without
limiting or being limited by the foregoing, the Borrower shall pay on demand to
each Indemnified Party any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to
or resulting from:
(A) the failure of any representation or warranty made or
deemed made by the Borrower, any Transferring Affiliate or the Servicer
(or any of their respective officers) under or in connection with any
Basic Document or any report or other information delivered by the
Borrower, any Transferring Affiliate or the Servicer pursuant thereto
to have been true and correct in all respects when made or deemed made
or delivered;
(B) the failure by the Borrower, any Transferring Affiliate
or the Servicer to comply with any term, provision or covenant
contained in any Basic Document or any agreement executed by it in
connection with any Basic Document or with any applicable law, rule or
regulation with respect to Collateral, or the nonconformity of any
Collateral with any such applicable law, rule or regulation;
(C) the failure to vest and maintain vested in the Borrower
legal and equitable title to and ownership of all Franchise Receivables
that are, or are purported to be, Pledged Receivables, together with
all Collections in respect thereof, free and clear of any Adverse Claim
or Restrictions on Transferability, whether existing at the time of the
purchase of such Franchise Receivable or at any time thereafter, and to
vest and maintain vested in the Collateral Agent a first priority
perfected security interest in the Collateral;
(D) with respect to any Real Property that is the subject of
a Franchise Lease, the failure to vest and maintain vested in the
Borrower legal and equitable title to and ownership of such Real
Property, free and clear of any Adverse Claim or Restrictions on
Transferability, whether existing at the time of purchase of such Real
Property or at any time thereafter, and to maintain vested in the
Collateral Agent a first priority perfected lien on and security
interest in such Real Property;
(E) the use, possession, ownership or operation of any Real
Property securing any Franchise Loan or which is the subject of any
Franchise Lease or any environmental liability allegedly arising out of
or in connection with any such Real Property;
(F) any negligent action or willful misconduct taken by, or
negligent omission of, the Borrower, the Servicer or any Transferring
Affiliate with respect to any Franchise Receivable;
(G) the failure of any Franchise Receivable which is treated
as or represented to be a Pledged Receivables to be an Eligible
Receivable;
(H) the failure by the Borrower, any Transferring Affiliate or
any of their respective Affiliates to pay when due any Taxes;
(I) any products liability claim or personal injury or
property damage suit or other similar or related claim or action of
whatever sort arising out of or in connection with any Obligor
Documents, Franchise Receivables or Real Property included in the
Collateral; or
(J) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor on any Franchise
Receivable to the payment thereof (including, without limitation, a
defense based on such Franchise Receivable not being a legal, valid and
binding obligation of such Obligor, enforceable against such Obligor in
accordance with its terms);
(K) any failure of the Borrower or the Servicer or any of
their respective agents or representatives to remit to the Collection
Account any Collections;
(L) the commingling of Collections with any other funds; or
(M) any investigation, litigation or proceeding related to
this Agreement, any other Basic Document or the use of proceeds of the
Advances.
(b)......Any Indemnified Amounts subject to the
indemnification provisions of this Section 11.1 shall be paid in accordance with
Article VI, to the extent that funds are available therefor in accordance with
the provisions of Article VI.
SECTION 11.2......Indemnities by the Servicer.
(a)......Without limiting any other rights that an Indemnified
Party may have hereunder or under applicable law, the Servicer hereby agrees to
indemnify each Indemnified Party from and against any and all Indemnified
Amounts that may be imposed on, incurred by or asserted against an Indemnified
Party in any way arising out of or relating to any breach of the Servicer's
obligations under this Agreement excluding, however, Indemnified Amounts to the
extent resulting from gross negligence or willful misconduct on the part of such
Indemnified Party. Without limiting or being limited by the foregoing, the
Servicer shall pay on demand to each Indemnified Party any and all amounts
necessary to indemnify such Indemnified Party from and against any and all
Indemnified Amounts relating to or resulting from:
(i) the failure of any representation or warranty made or
deemed made by the Servicer (or any of its officers) under or in
connection with any Basic Document or any report or other information
delivered by the Servicer pursuant hereto to be true and correct in all
respects when made or deemed made or delivered;
(ii) the failure by the Servicer to comply with any term,
provision or covenant applicable to the Servicer and contained in any
Basic Document or any agreement executed by it in connection with any
Basic Document or with any applicable law, rule or regulation with
respect to any Pledged Receivable;
(iii) the failure to vest and maintain vested in the Borrower
legal and equitable title to and ownership of all Receivables that are,
or are purported to be, Pledged Receivables, together with all
Collections in respect thereof, free and clear of any Adverse Claim or
Restrictions on Transferability whether existing at the time of the
funding of such Pledged Receivable or at any time thereafter, and to
vest and maintain vested in the Collateral Agent a first priority
perfected security interest in the Collateral;
(iv) with respect to any Real Property that is the subject of
a Franchise Lease, the failure to vest and maintain vested in the
Borrower legal and equitable title to and ownership of such Real
Property, free and clear of any Adverse Claim or Restrictions on
Transferability (except for Permitted Liens), whether existing at the
time of purchase of such Real Property or at any time thereafter, and
to maintain vested in the Collateral Agent a first priority perfected
lien on and security interest in such Real Property;
(v) any negligent action or willful misconduct taken by, or
negligent omission of, the Servicer with respect to any Franchise
Receivable;
(vi) any failure of the Servicer or any of its agents or
representatives to remit to the Collection Account any Collections;
(vii) the commingling of Collections with any other funds; or
(viii) the failure of any Franchise Receivables which is
treated as or represented to be a Pledged Receivable to be an Eligible
Receivable.
(b)......Any Indemnified Amounts subject to the
indemnification provisions of this Section 11.2 shall be paid to the Indemnified
Party within five (5) Business Days following demand therefor.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1......Notices, etc.
All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including communication by
facsimile copy) and mailed, transmitted or delivered, as to each party hereto,
at its address set forth on Schedule 7 hereto or at such other address as shall
be designated by such party in a written notice to the other parties hereto. In
the case of any notice or communication sent by a party to the Borrower, such
party shall send a copy to the Servicer. All such notices and communications
shall be effective upon receipt, or in the case of notice by facsimile copy,
when verbal communication of receipt is obtained, provided, however, that no
notice or communication sent pursuant to Article II shall be effective until
received.
SECTION 12.2......Binding Effect; Assignability; Termination.
This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Servicer, the Lender, the Hedge Counterparties, the Deal
Agent and their respective permitted successors and assigns. Neither the
Borrower nor the Servicer may assign any of their rights and obligations
hereunder or any interest herein (i) without the prior written consent of the
Collateral Agent and the Deal Agent, except that the Servicer may delegate the
performance of its duties hereunder to an Affiliate of the Servicer with the
prior, written consent of the Deal Agent (which will not unreasonably be
withheld), provided that, notwithstanding any such delegation, the Servicer
shall remain primarily liable for the performance of its obligations hereunder,
and (ii) if such assignment may result in a withdrawal or reduction of the then
current rating by each Rating Agency of Neptune's commercial paper notes,
without the confirmation in writing from each Rating Agency that such assignment
will not result in any such withdrawal or reduction of the then current rating.
The Lender, the Hedge Counterparties, the Collateral Agent and the Deal Agent
may, at any time, assign any of their respective rights and obligations
hereunder or interest herein to an Eligible Assignee. Any such Eligible Assignee
may at any time further assign its rights and obligations hereunder or interests
herein to an Eligible Assignee. This Agreement shall create and constitute the
continuing obligations of the parties hereto in accordance with its terms, and
shall remain in full force and effect until its termination; provided, that the
rights and remedies with respect to any breach of any representation and
warranty made by the Borrower or the Servicer pursuant to Article IV and the
indemnification and payment provisions of Article XI shall be continuing and
shall survive any termination of this Agreement.
SECTION 12.3......Costs, Expenses and Taxes.
(a)......In addition to the rights of Indemnification under
Article XI hereof, the Borrower agrees to pay upon demand all reasonable costs
and expenses incurred by the Lender, the Deal Agent or the Collateral Agent
("Other Costs") in connection with the administration (including periodic
auditing, Rating Agency fees, modification and amendment) of the Basic Documents
and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Lender, the Deal Agent and the Collateral Agent with respect thereto. The
Borrower further agrees to pay within ten (10) Business Days after demand all
reasonable costs, counsel fees and expenses in connection with the enforcement
by the Deal Agent against the Borrower or the Servicer (whether through
negotiation, legal proceedings or otherwise) of the Basic Documents and the
other agreements and documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 12.3 in accordance with the provisions
of Article VI to the extent that funds are available therefor in accordance
therewith.
(b)......In addition, the Borrower shall pay on demand
(subject to Section 5.1(j)) any present or future stamp, sales, excise, or
documentary taxes or fees or any other property taxes, charges or similar levies
that arise from any payment made hereunder or from the execution, delivery or
registration of, performing under, or otherwise with respect to, this Agreement,
or which are payable in connection with the execution, delivery, filing or
recording of the Basic Documents or the other agreements to be delivered
hereunder. The Borrower agrees to indemnify and save each Indemnified Party from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such fees.
(c)......If the Borrower or the Servicer fails to perform any
agreement or obligation contained herein, the Lender, any Hedge Counterparty,
the Collateral Agent or the Deal Agent may (but shall not be required to) itself
perform, or cause performance of, such agreement or obligation, and the expenses
of such party incurred in connection therewith shall be payable by the party
which has failed to so perform upon such party's demand therefor.
SECTION 12.4......The Deal Agent.
The terms and provisions of Exhibit J with respect to the Deal
Agent are hereby incorporated by reference.
SECTION 12.5......Confidentiality.
(a)......Each of the parties to this Agreement shall maintain
and shall cause each of its employees, managers, members and officers to
maintain the confidentiality of this Agreement (and all drafts hereof and
documents ancillary thereto) and the other confidential proprietary information
with respect to the other parties hereto and their respective businesses
obtained by it or them in connection with the structuring, negotiating and
execution of the transactions contemplated herein and agree not to disclose,
deliver or otherwise make available to any third party (other than to their
employees, managers, members or officers, each of whom shall be informed of the
confidential nature of any such information) the original or any copy of all or
any part of this Agreement (or any draft hereof and documents ancillary
thereto), except that each such party and its employees, managers, members and
officers may disclose such information (i) to its external accountants and
attorneys, or as required by applicable law, any order of any judicial or
administrative proceeding, or as required to be filed with the Securities and
Exchange Commission, (ii) to any third party which the Borrower, the Servicer or
any Transferring Affiliate reasonably believes may become an Obligor, or (iii)
in cases where the provider of such information shall otherwise consent in
writing.
(b)......Anything herein to the contrary notwithstanding, the
Borrower and the Servicer hereby consent to the disclosure of any nonpublic
information with respect to them (i) by the Deal Agent or the Lender to any
prospective or actual Eligible Assignee of either of them or (ii) by the Deal
Agent or the Lender to any Rating Agency, commercial paper dealer or provider of
a credit or liquidity enhancement and to any employees, managers, members,
officers, outside accountants and attorneys of any of the foregoing, provided
each such Person is informed of the confidential nature of such information and
agrees to be bound hereby.
SECTION 12.6......No Proceedings.
Each of the Borrower, the Deal Agent, the Servicer, the Lender
and the Hedge Counterparties hereby agrees that it will not institute against,
join or cooperate with any other Person in instituting against, or encourage or
solicit any other Person to institute against, Neptune any proceedings of the
type referred to in the definition of "Event of Bankruptcy" hereunder until one
year and one day shall have elapsed since the last day on which any of Neptune's
commercial paper notes remained outstanding .
SECTION 12.7......Amendments; Waivers; Consents.
No modification, amendment or waiver of or with respect to any
provision of the Basic Documents (other than Pledged Receivables), nor consent
to any departure by the Borrower or the Servicer from any of the terms or
conditions thereof, shall be effective unless it shall be in writing and signed
by the Deal Agent, as agent for the Lender. Any waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
consent to or demand on the Borrower, any Transferring Affiliate or the Servicer
in any case shall, in itself, entitle it to any other consent or further notice
or demand in similar or other circumstances. The Basic Documents and the
documents referred to therein embody the entire agreement among the Borrower,
the Lender, the Deal Agent, the Collateral Agent and the Servicer and supersede
all prior agreements and understandings relating to the subject hereof.
Notwithstanding the foregoing provisions of this Section 12.7, no amendment,
waiver or other modification of any provision of this Agreement that otherwise
meets the requirements of this Section 12.7 shall be effective without the
written consent of a Hedge Counterparty if the effect of that amendment, waiver
or modification would be to diminish or impair the rights, interests or benefits
provided to it as a Hedge Counterparty under the Basic Documents or to increase
its obligations as a Hedge Counterparty under the Basic Documents.
SECTION 12.8......GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a)......THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE
CONFLICT OF LAW PROVISIONS THEREOF).
(b)......EACH OF THE PARTIES TO THIS AGREEMENT HEREBY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK
CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL, AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL
HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. EACH OF THE PARTIES TO
THIS AGREEMENT HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE
COURT. NOTHING IN THIS SECTION 12.9(b) SHALL AFFECT THE RIGHT OF ANY PARTY TO
THIS AGREEMENT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
AFFECT ANY PARTY'S RIGHT TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY
OTHER JURISDICTION.
(c)......TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE
ARISING OUT OF, CONNECTED WITH, RELATED TO OR IN CONNECTION WITH THIS AGREEMENT.
INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT
A JURY.
SECTION 12.9......Execution in Counterparts; Severability.
This Agreement may be executed by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation shall not in any way be affected or impaired thereby in
such jurisdiction and the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation shall not be
impaired thereby in any other jurisdiction.
SECTION 12.10.....Descriptive Headings.
The descriptive headings of the various sections of this
Agreement are inserted for convenience of reference only and shall not be deemed
to affect the meaning or construction of any of the provisions hereof.
SECTION 12.11.....Recourse Against Certain Parties.
No recourse under or with respect to any obligation, covenant
or agreement (including, without limitation, the payment of any fees or any
other obligations) of the Lender or Hedge Counterparty, as contained in this
Agreement or any other agreement, instrument or document entered into by it
pursuant hereto or in connection herewith shall be had against any administrator
of such Lender or Hedge Counterparty or any incorporator, affiliate,
stockholder, officer, employee or director of such Lender or Hedge Counterparty
or of any such administrator, as such, by the enforcement of any assessment or
by any legal or equitable proceeding, by virtue of any statute or otherwise; it
being expressly agreed and understood that the agreements of such Lender or
Hedge Counterparty contained in this Agreement and all of the other agreements,
instruments and documents entered into by it pursuant hereto or in connection
herewith are, in each case, solely the corporate obligations of such Lender or
Hedge Counterparty, provided that, in the case of the Lender, such liabilities
shall be paid only after the repayment in full of all of the Lender's commercial
paper notes and all other liabilities contemplated in the program documents with
respect to the Lender, and that no personal liability whatsoever shall attach to
or be incurred by any administrator of such Lender or Hedge Counterparty or any
incorporator, stockholder, affiliate, officer, employee or director of such
Lender or Hedge Counterparty or of any such administrator, as such, or any of
them, under or by reason of any of the obligations, covenants or agreements of
such Lender or Hedge Counterparty contained in this Agreement or in any other
such instruments, documents or agreements, or which are implied therefrom, and
that any and all personal liability of every such administrator of such Lender
or Hedge Counterparty and each incorporator, stockholder, affiliate, officer,
employee or director of such Lender or Hedge Counterparty or of any such
administrator, or any of them, for breaches by such Lender or Hedge Counterparty
of any such obligations, covenants or agreements, which liability may arise
either at common law or at equity, by statute or constitution, or otherwise, is
hereby expressly waived as a condition of, and in consideration for, the
execution of this Agreement. The provisions of this Section 12.11 shall survive
the termination of this Agreement.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, the parties have caused this Franchise Receivable
Funding and Servicing Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.
SERVICER: CNL FINANCIAL SERVICES, LP, as Servicer
By: CNL FINANCIAL SERVICES GP CORP,
its general partner
By: _________________________________________________________
Name:
Title:
BORROWER:_________CNL APF PARTNERS, LP, as Borrower
By: CNL APF GP CORP., its general partner
By:__________________________________________________________
Name:
Title:
LENDER: NEPTUNE FUNDING CORPORATION,
as Lender
By: COOPERATIEVE CENTRALE
RAIFFEISEN - BOERENLEENBANK,
B.A., "RABOBANK INTERNATIONAL,"
NEW YORK BRANCH, as attorney-in-fact
By:__________________________________________________________
Name:
Title:
DEAL AGENT: COOPERATIEVE CENTRALE RAIFFEISEN -
BOERENLEENBANK, B.A., "RABOBANK INTERNATIONAL", NEW YORK
BRANCH, as Deal Agent and Collateral Agent
By:__________________________________________________________
Name:
Title:
By:__________________________________________________________
Name:
Title:
[Schedule 1 to the Agreement]
LIST OF PLEDGED RECEIVABLES
[Attached]
[Schedule 2 to the Agreement]
CONCENTRATION LIMITS AND TIERING
(A) Concentration Limits with respect to types of Franchise Loans (without
duplication) shall be as follows:
(i) the aggregate Receivable Basis of all Enterprise Loans
included in the Collateral shall be no greater than 35% of the
Maximum Funded Collateral Amount; and
(ii) the aggregate Receivable Basis of all Ground Lease Loans
included in the Collateral shall be no greater than 50% of the
Maximum Funded Collateral Amount, and when combined with the
aggregate Outstanding Balance of all Enterprise Loans included
Collateral shall be no greater than 70% of the Maximum Funded
Collateral Amount.
(B) Concentration Limits by Tier (without duplication) shall be as follows:
(i) with respect to each Obligor of an Eligible Receivable arising
in connection with a Tier I Approved Concept, the aggregate
Receivable Basis of all Eligible Receivables with respect to
such Obligor or any consolidated Affiliate of such Obligor
included in the Collateral shall be no greater than 15% of the
Maximum Funded Collateral Amount;
(ii) with respect to each Obligor of an Eligible Receivable arising
in connection with a Tier II Approved Concept, the aggregate
Receivable Basis of all Eligible Receivables with respect to
such Obligor or any consolidated Affiliate of such Obligor
included in the Collateral shall be no greater than (A) in the
case of IHOP Properties, Inc., 15% of the Maximum Funded
Collateral Amount, (B) in the case of Foodmaker, Inc., 20% of
the Maximum Funded Collateral Amount and (C) in the case of
any other Obligor, 10% of the Maximum Funded Collateral
Amount;
(iii) with respect to each Obligor of an Eligible Receivable arising
in connection with a Tier III Approved Concept, the aggregate
Receivable Basis of all Eligible Receivables with respect to
such Obligor or any consolidated Affiliate of such Obligor
included in the Collateral shall be no greater than 10% of the
Maximum Funded Collateral Amount;
(iv) with respect to each Obligor of an Eligible Receivable arising
in connection with a Tier IV Approved Concept, the aggregate
Receivable Basis of all Eligible Receivables with respect to
such Obligor or any consolidated Affiliate of such Obligor
included in the Collateral shall be no greater than 7.5% of
the Maximum Funded Collateral Amount;
(v) the aggregate Receivable Basis of the Eligible Receivables
included in the Collateral arising in connection with Approved
Concepts included in a single Tier shall be no greater than
(A) 100% of the Maximum Funded Collateral Amount in the case
of Tier I, (B) 50% of the Maximum Funded Collateral Amount in
the case of Tier II, (C) 30% of the Maximum Funded Collateral
Amount in the case of Tier III and (D) 20% of the Maximum
Funded Collateral Amount in the case of Tier IV; and
(vi) with respect to any Approved Concept, the aggregate Receivable
Basis of all Eligible Receivables arising in connection with
such Approved Concept and included in the Collateral shall be
no greater than (A) in the case of an Approved Concept
included in Tier I, 40% of the Maximum Funded Collateral
Amount, (B) in the case of an Approved Concept included in
Tier II, 25% of the Maximum Funded Collateral Amount, (C) in
the case of an Approved included in Tier III, 15% of the
Maximum Funded Collateral Amount and (D) in the case of an
Approved Concept included in Tier IV, 15% of the Maximum
Funded Collateral Amount.
To the extent the aggregate Receivable Basis of the Eligible
Receivables which are the subject of any Concentration Limit exceed
such Concentration Limit, the amount of such excess shall constitute an
"Excess Concentration Amount" for purposes of the Agreement.
[Schedule 3 to the Agreement]
APPROVED CONCEPTS
[Attached]
[Schedule 4 to the Agreement]
LIST OF LOCKBOX ACCOUNT BANKS, LOCKBOXES AND LOCKBOX ACCOUNTS
Lockbox Account Bank: First Union National Bank
Lockbox: P.O. Box Number 930191 in Atlanta, Georgia, zip code 31193
Lockbox Account: Checking Account #2000007802872
[Schedule 5 to the Agreement]
LICENSES AND PERMITS OF BORROWER AND SERVICER APPLIED FOR
BUT NOT YET OBTAINED
NONE.
[Schedule 6 to the Agreement]
TRADE NAMES AND FORMER NAMES
NONE.
[Schedule 7 to the Agreement]
ADDRESSES FOR NOTICES/UCC LOCATIONS
CNL APF PARTNERS, LP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
CNL FINANCIAL SERVICES, LP
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
NEPTUNE FUNDING CORPORATION c/o Global Securitization Services, LLC ▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
NEPTUNE FUNDING CORPORATION
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ Branch
as Administrator
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK, B.A., "RABOBANK
INTERNATIONAL", NEW YORK BRANCH
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation No.: (▇▇▇) ▇▇▇-▇▇▇▇
[Exhibit A to the Agreement]
FORM OF BORROWER NOTICE - Funding Request
[Insert Date]
Neptune Funding Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Deal Agent
Attention:
Re:......Franchise Receivable Funding and Servicing Agreement,
dated as of October 14, 1999
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of the
Franchise Receivable Funding and Servicing Agreement, dated as of October 14,
1999, (the "Agreement"), among CNL APF Partners, LP (the "Borrower"), Neptune
Funding Corporation (the "Lender"), CNL Financial Services, LP (the "Servicer"),
and Rabobank (the "Deal Agent"). Capitalized terms used but not defined in this
notice have the meanings ascribed to such terms in the Agreement.
The Borrower hereby requests that the Lender make an Advance
to the Borrower on _______________, 199__ pursuant to Section 2.2(b) of the
Agreement in the amount of $_______________ to be disbursed to the Borrower in
accordance with Section 2.2(b) of the Agreement. The Borrower hereby confirms
that the conditions set forth in Section 3.2 of the Agreement for the making of
such Advance have been met.
Attached to this notice pursuant to Section 2.2(e) of the
Agreement is a report prepared by the Servicer containing the information
prescribed in such Section 2.2(e).
Very truly yours,
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: __________________________________
Name:
Title:
FORM OF BORROWER NOTICE - Repayment of Advance
[Insert Date]
Neptune Funding Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Deal Agent
Attention:
Re:......Franchise Receivable Funding and Servicing Agreement,
dated as of October 14, 1999
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of the
Franchise Receivable Funding and Servicing Agreement, dated as of October 14,
1999 (the "Agreement"), among CNL APF Partners, LP (the "Borrower"), Neptune
Funding Corporation (the "Lender"), CNL Financial Services, LP (the "Servicer")
and Rabobank (the "Deal Agent"). Capitalized terms used but not defined in this
notice have the meanings ascribed to such terms in the Agreement.
The Borrower hereby notifies the Lender and the Deal Agent
that on ___________________, 19__ (which is a Business Day) the Borrower intends
to repay $_______________ of Advances currently outstanding to the Borrower
pursuant to Section 2.6 of the Agreement, including (i) all Note Interest
accrued on the principal amount of Advances being repaid through the date of
repayment, and (ii) any and all Breakage Costs payable under Section 2.11 of the
Agreement.
Very truly yours,
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: __________________________________
Name:
Title:
FORM OF BORROWER NOTICE - Reduction of Program Amount
[Insert Date]
Neptune Funding Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Deal Agent
Attention:
Re:......Franchise Receivable Funding and Servicing Agreement,
dated as of October 14, 1999
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of the
Franchise Receivable Funding and Servicing Agreement, dated as of October 14,
1999 (the "Agreement"), among CNL AFP Partners, LP (the "Borrower"), Neptune
Funding Corporation (the "Lender"), CNL Financial Services, LP (the "Servicer")
and Rabobank (the "Deal Agent"). Capitalized terms used but not defined in this
notice have the meanings ascribed to such terms in the Agreement.
The Borrower hereby irrevocably notifies the Lender and the
Deal Agent pursuant to Section 2.3 of the Agreement that on __________________,
199_ (which is a Business Day at least thirty (30) days after the date this
notice is given) the Program Amount shall be reduced to $______________. After
such reduction, the Program Amount will not be less than the aggregate
outstanding principal balance of the Advances after giving effect to, and
conditioned upon, the repayment of Advances set forth in the attached notice.
Very truly yours,
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: __________________________________
Name:
Title:
FORM OF BORROWER NOTICE - Termination of Program Amount
[Insert Date]
Neptune Funding Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Deal Agent
Attention:
Re:......Franchise Receivable Funding and Servicing Agreement,
dated as of October 14, 1999
Ladies and Gentlemen:
This notice is given pursuant to Section 2.2(a) of the
Franchise Receivable Funding and Servicing Agreement, dated as of October 14,
1999 (the "Agreement"), among CNL APF Partners, LP (the "Borrower"), Neptune
Funding Corporation (the "Lender"), CNL Financial Services, LP (the "Servicer")
and Rabobank (the "Deal Agent"). Capitalized terms used but not defined in this
notice have the meanings ascribed to such terms in the Agreement.
The Borrower hereby irrevocably notifies the Lender and the
Deal Agent pursuant to Section 2.3 of the Agreement that on _________________,
199_ (which is a Business Day at least five (5) days after the date this notice
is given) the Program Amount shall be reduced to zero and the Commitment
terminated.
Very truly yours,
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: __________________________________
Name:
Title:
Exhibit A-1
Form of FINAL Transaction Summary
[Attached]
Exhibit B to Agreement
SETTLEMENT AGENT'S LETTER
[Attached]
[Exhibit C to Agreement]
FORM OF NOTE
$147,000,000.00 [Insert Date]
FOR VALUE RECEIVED, CNL APF Partners, LP, a Delaware limited
partnership (the "Borrower"), promises to pay to Neptune Funding Corporation
(the "Lender"), or registered assigns, the principal sum of ONE HUNDRED
FORTY-SEVEN MILLION DOLLARS ($147,000,000.00) or, if less, the unpaid principal
amount of the aggregate loans ("Advances") made by the Lender to the Borrower
pursuant to the Agreement (as defined below), as set forth on the attached
Schedule, on the dates specified in Section 2.6 of the Agreement, and to pay the
Note Interest (as defined in the Agreement) on the unpaid principal amount of
this Note on each day that such unpaid principal amount is outstanding on the
dates specified in Section 2.7 of the Agreement.
This Note is issued pursuant to Section 2.5 of the Franchise
Receivable Funding and Servicing Agreement, dated as of October 14, 1999 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Agreement"), among the Borrower, CNL Financial Services, LP, as Servicer,
Neptune Funding Corporation, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A. "Rabobank International", New York Branch.
Capitalized terms used but not defined in this Note are used with the meanings
ascribed to them in the Agreement.
Notwithstanding any other provisions contained in this Note,
if at any time the Note Interest payable by the Borrower under this Note, when
combined with any and all other charges provided for in this Note, in the
Agreement or in any other document (to the extent such other charges would
constitute interest for the purpose of any applicable law limiting interest that
may be charged on this Note), exceeds the highest rate of interest permissible
under applicable law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be exceeded the rate of interest under this Note shall be
equal to the Maximum Lawful Rate. If at any time thereafter the rate of interest
payable under this Note is less than the Maximum Lawful Rate, the Borrower shall
continue to pay interest under this Note at the Maximum Lawful Rate until such
time as the total interest paid by the Borrower is equal to the total interest
that would have been paid had applicable law not limited the interest rate
payable under this Note. In no event shall the total interest received by the
Lender under this Note exceed the amount which the Lender could lawfully have
received had the interest due under this Note been calculated since the date of
this Note at the Maximum Lawful Rate.
Payments of the principal of, premium, if any, and Note
Interest on this Note shall be made by the Borrower to the holder hereof by wire
transfer of immediately available funds by 11:00 a.m. (New York City time), in
the manner and at the address specified for such purpose as provided in Section
2.9 of the Agreement, or in such manner or at such other address as the holder
of this Note shall have specified in writing by the Borrower for such purpose,
without the presentation or surrender of this Note or the making of any notation
on this Note.
If any payment under this Note falls due on a day which is not
a Business Day, then such due date shall be extended to the next succeeding
Business Day and Note Interest shall be payable on any principal so extended.
The Borrower expressly waives presentment, demand, diligence,
protest and all notices of any kind whatsoever with respect to this Note.
This Note is secured by the security interests granted to the
Collateral Agent pursuant to the Agreement, the holder of this Note is entitled
to the benefits of the Agreement and may enforce the agreements of the Borrower
contained in the Agreement and exercise the remedies provided for by, or
otherwise available in respect of, the Agreement, all in accordance with the
terms of the Agreement. If a Termination Event shall occur and be continuing,
the unpaid balance of the principal of this Note, together with accrued Note
Interest, may be declared and become due and payable in the manner and with the
effect provided in the Agreement.
The liability of the Borrower under this Note is limited as
set forth in Section 8.5 of the Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (WITHOUT APPLICATION OF ITS CONFLICT OF LAWS PROVISIONS)
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
signed and delivered by its duly authorized officer as of the date set forth
above.
CNL APF PARTNERS, LP
By: CNL APF GP Corp., its general partner
By: _____________________________________
Name:
Title:
Schedule to Note
------------------------------- ---------------------------- ---------------------------- ============================
Date of Principal Principal Outstanding Principal
Advance or Amount of Amount of Amount
Repayment Advance** Repayment
------------------------------- ---------------------------- ---------------------------- ============================
[Exhibit D to Agreement]
LIST OF LITIGATION MATTERS
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, d/b/a ▇▇▇▇▇▇▇▇▇▇▇ Electric vs. CNL APF Partners, L.P.
Iowa District Court, ▇▇▇▇▇▇▇ County, Case No. LA CV 306796
[Exhibit E to Agreement]
FORM OF OFFICER'S CERTIFICATE AS TO INSOLVENCY
I........After reasonable investigation, and consultation with
all necessary parties, a review of the relevant Basic Documents, to which the
Company is a party, and additional relevant documents and records, the
undersigned hereby certifies, warrants and represents that:
II.......The undersigned is the ________ of CNL APF GP Corp.,
the general partner of CNL APF Partners, LP (the "Company"). The undersigned is
authorized to make the hereinafter stated representations, warranties, and
certifications on behalf of the Company.
III......The Company will borrow sums under the Agreement (as
defined below) and, to secure repayment of such sums and the other Borrower
Secured Obligations, the Company will grant a Security interest to the
Collateral Agent in that Collateral.
IV.......In connection with its borrowings under the Agreement
the Company will enter into certain Hedging Instruments.
V........The Company has the legal power and authority to act
under the Basic Documents.
VI.......The Company has the requisite power and authority to
own and operate its property, to enter into the Basic Documents and Hedging
Instruments, and to carry out the transactions contemplated thereby.
VII......The execution, delivery, and performance of the Basic
Documents and Hedging Instruments, payment of the Loan and amounts due under the
Hedging Instruments, and the granting of the security interests provided for in
the Basic Documents have been duly authorized by all necessary action on the
part of the Company.
VIII.....The execution, delivery, and performance of the Basic
Documents and the Hedging Instruments, the granting of the security interests
provided for in the Basic Documents and the Hedging Instruments, and the
consummation of the transactions contemplated by the Agreement, the other Basic
Documents and the Hedging Instruments do not violate any provision of the
certificate of limited partnership or partnership agreement of the Company, or
any order, judgment or decree of any Governmental Authority binding on the
Company.
IX.......The Basic Documents and the Hedging Instruments
constitute valid and legally binding obligations of the Company and are
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
X........The Company is not currently in bankruptcy, and has
no present intent to file a voluntary petition (or consent to the filing of an
involuntary petition) under the Bankruptcy Code or commence any other proceeding
under any applicable bankruptcy, insolvency or other similar law.
XI.......The Company is in sound financial condition, has
adequate capital to conduct its business, is paying its debts as they come due,
and does not anticipate any difficulty in continuing to pay its debts.
XII......The Company is not insolvent, and will not be
rendered insolvent as a result of any contemplated transaction. The Company was
not engaged in, is not engaged in, nor is it about to enter into, a business or
transaction for which the property remaining in its hands after the transaction
is or will be unreasonably small in relation to its business or transactions.
XIII.....The Company did not and does not intend to incur
debts beyond its ability to pay such debts as they mature, and has not entered
into any transaction with the actual intent to hinder, delay or defraud either
present or future creditors or any other Person.
XIV......The Company has made no assignment of accounts which
does not alone or in conjunction with other assignments to the same assignee
transfer a significant part of the outstanding accounts of the Company, and the
Company has made no assignment for the benefit of all the creditors of the
Company.
XV.......There are no judgment liens, executions, tax liens or
levies, ERISA liens, other nonconsensual liens in the Company's assets, or
security interests against the Collateral, other than those granted pursuant to
the Agreement.
Capitalized terms used but not defined in this Certificate
have the meanings ascribed to such terms in the Franchise Receivable Funding and
Servicing Agreement, dated as of October 14, 1999, among the Company, Neptune
Funding Corporation, CNL Financial Services, LP and Cooperatieve Centrale
Raiffeisen-Boerenleenbank, B.A., "Rabobank International", New York Branch.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate as of _______, 1999.
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: _____________________________________
Name:
Title:
[Exhibit F to Agreement]
FORM OF MONTHLY REPORT
[Attached]
[Exhibit G to Agreement]
COPY OF SERVICER'S CREDIT AND COLLECTION POLICIES
[On File with Sidley & Austin]
[Exhibit H to Agreement]
FORM OF ESTOPPEL LETTER
TENANT'S ESTOPPEL CERTIFICATE
THIS TENANT'S ESTOPPEL CERTIFICATE ("Certificate") is given
this _____ day of ________________________, 1999 by [TENANT] ("Tenant") in favor
of CNL APF Partners, LP, a Delaware limited partnership, with a principal office
and place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer ("Landlord").
R E C I T A L S:
A........Pursuant to the terms and conditions of that certain
Lease Agreement ("Lease") dated [LEASE DATE], Landlord leased to Tenant certain
real property in [COUNTY] County, [STATE] ("Leased Premises"), which Leased
Premises are more particularly described in the Lease, and are also identified
as [CONCEPT] [UNIT #], [CITY], [STATE], having a street address of [STREET
ADDRESS], and more particularly described on Exhibit "A" attached hereto.
B........Subject and pursuant to the terms and conditions of
the Lease, the Landlord intends to mortgage the Leased Premises to Cooperatieve
Centrale Raffeisen-Boerenleenbank, B.A. ("Rabobank") and to assign all of its
right, title and interest in the Lease and the rents received thereby to
Rabobank as security for said mortgage.
C........As a condition precedent to accepting a mortgage to
the Leased Premises and accepting an assignment of the Lease, Rabobank has
requested that the Tenant execute and deliver this Certificate with respect to
the Lease.
NOW, THEREFORE, in consideration of the above premises, the
Tenant hereby makes the following statements for the benefit of Rabobank:
1........The Lease is in full force and effect as of the date
hereof.
2........The Lease has not been modified or amended (except as
shown on Exhibit "B" attached hereto, if applicable).
3........All rents and other charges due the Landlord have
been paid up to and including the date of __________________, 1999.
4........The Tenant has no knowledge of any default by the
Landlord, nor does the Tenant have any claim against the Landlord (except as
shown on Exhibit "C" attached hereto, if applicable).
5._______The Tenant understands and acknowledges that Rabobank is
relying upon the representations set forth in this Certificate, and may rely
thereon in connection with the transactions described herein.
IN TESTIMONY WHEREOF, witness the signature of the Tenant as
of the day and year first set forth above.
SECTION 12.12.....Signed, sealed and delivered in the
presence of the following witnesses: [TENANT]
By:
Name:
Title:
STATE OF _________
COUNTY OF ________
The foregoing instrument was acknowledged before me this ____day of
_______, 1999 by ____________________, as __________________ of
____________________, a __________________________, on behalf of the
_______________. He/she is personally known to me or has produced ____________
as identification and did not take an oath.
Printed Name:
Notary Public, State of
Commission #:
My commission expires:
(NOTARY SEAL)
EXHIBIT "A"
[Legal Description of Leased Premises]
EXHIBIT "B"
[Modifications/Amendments to Lease Agreement]
EXHIBIT "C"
[Defaults under Lease Agreement]
[Exhibit I to Agreement]
SUCCESSOR SERVICER
1........The Servicer shall not resign from the obligations
and duties hereby imposed on it except upon a determination by it that (a) the
performance of its duties hereunder has become impermissible under applicable
law, and (b) there is no reasonable action which the Servicer could take to make
the performance of its duties hereunder permissible under applicable law. Any
such determination permitting the resignation of the Servicer shall be evidenced
as to clause (a) above by an opinion of counsel to such effect delivered to the
Deal Agent. No such resignation shall become effective until a successor
servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with subsection (b) of this Exhibit I.
2........In connection with the termination of the Servicer's
responsibilities under this Agreement pursuant to Section 9.2 or subsection (a)
of this Exhibit I, the Deal Agent shall appoint a successor Servicer to the
Servicer which shall succeed to all rights and assume all of the
responsibilities, duties and liabilities of the Servicer under this Agreement
(such successor Servicer being referred to as the "Successor Servicer");
provided, that the Successor Servicer shall have no responsibility for any
actions of the Servicer prior to the date of its appointment as Successor
Servicer. In selecting a Successor Servicer, the Deal Agent may obtain bids from
any potential Successor Servicer and may agree to any bid it deems appropriate
in its commercially reasonable judgment. The Successor Servicer shall accept its
appointment by executing, acknowledging and delivering to the Deal Agent an
instrument in form and substance acceptable to the Deal Agent.
3........At any time following the appointment of a Successor
Servicer:
(A) The Servicer agrees that it will terminate its
activities as Servicer hereunder in a manner acceptable to the
Deal Agent so as to facilitate the transfer of servicing to
the Successor Servicer including, without limitation, timely
delivery (x) to the Collateral Agent of any funds that were
required to be remitted to the Collateral Agent for deposit in
the Collection Account, and (y) to the Successor Servicer, at
a place selected by the Successor Servicer, of all Servicing
Records and other information with respect to the Pledged
Receivables. The Servicer shall account for all funds and
shall execute and deliver such instruments and do such other
things as may reasonably be required to more fully and
definitely vest and confirm in the Successor Servicer all
rights, powers, duties, responsibilities, obligations and
liabilities of the Servicer.
(B) The Servicer shall terminate each Sub-Servicing
Agreement that may have been entered into and the Successor
Servicer shall not be deemed to have assumed any of the
Servicer's interest therein or to have replaced the Servicer
as a party to any such Sub-Servicing Agreement.
4........Any termination or resignation of the Servicer under
this Agreement shall not affect any claims that the Borrower, the Collateral
Agent, the Lender, any Hedge Counterparty or the Deal Agent may have against the
Servicer for events or actions taken or not taken by the Servicer arising prior
to any such termination or resignation.
[Exhibit J to Agreement]
THE DEAL AGENT
1........The Lender hereby designates and appoints Rabobank as
Deal Agent hereunder, and authorizes the Deal Agent to take such actions as
agent on its behalf and to exercise such powers as are delegated to the Deal
Agent by the terms of this Agreement together with such powers as are reasonably
incidental thereto. The Deal Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with the Lender or any Hedge Counterparty, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Deal Agent shall be read into this Agreement or otherwise exist
for the Deal Agent. In performing its functions and duties hereunder, the Deal
Agent shall act solely as agent for the Lender and the Hedge Counterparties and
does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Borrower or any of its
successors or assigns. The Deal Agent shall not be required to take any action
that exposes the Deal Agent to personal liability or that is contrary to this
Agreement or applicable law. The appointment and authority of the Deal Agent
hereunder shall terminate at the indefeasible payment in full of the Aggregate
Unpaids.
2........The Deal Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Deal
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
3........Neither the Deal Agent nor any of its directors,
officers, agents or employees shall be (i) liable for any action lawfully taken
or omitted to be taken by it or them under or in connection with this Agreement
(except for its, their or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Lender or Hedge
Counterparties for any recitals, statements, representations or warranties made
by the Borrower contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received under or
in connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document furnished in connection herewith, or for any failure of the Borrower to
perform its obligations hereunder, or for the satisfaction of any condition
specified in Article III. The Deal Agent shall not be under any obligation to
the Lender or Hedge Counterparty to ascertain or to inquire as to the observance
or performance of any of the agreements or covenants contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower. The Deal Agent shall not be deemed to have knowledge of any
Termination Event unless the Deal Agent has received notice from the Borrower or
the Lender.
4........The Deal Agent shall in all cases be entitled to
rely, and shall be fully protected in relying, upon any document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Deal Agent. The Deal Agent shall
in all cases be fully justified in failing or refusing to take any action under
this Agreement or any other document furnished in connection herewith unless it
shall first receive such advice or concurrence of Neptune or all of the Hedge
Counterparties, as applicable, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lender, provided that unless and until
the Deal Agent shall have received such advice, the Deal Agent may take or
refrain from taking any action, as the Deal Agent shall deem advisable and in
the best interests of the Lender and the Hedge Counterparties. The Deal Agent
shall in all cases be fully protected in acting, or in refraining from acting,
in accordance with a request of Neptune or all of the Hedge Counterparties, as
applicable, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Lender.
5........The Lender and each Hedge Counterparty expressly
acknowledges that none of the Deal Agent, or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates has made any representations
or warranties to it and that no act by the Deal Agent hereafter taken,
including, without limitation, any review of the affairs of the Borrower, shall
be deemed to constitute any representation or warranty by the Deal Agent. The
Lender and each Hedge Counterparty represents and warrants to the Deal Agent
that it has and will, independently and without reliance upon the Deal Agent or
the Hedge Counterparties and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of the Borrower and made its own decision to enter into this
Agreement.
6........The Deal Agent and its Affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower or any Affiliate of the Borrower as though the Deal Agent was not the
Deal Agent hereunder. With respect to the making of Advances pursuant to this
Agreement, the Deal Agent and its Affiliates shall have the same rights and
powers under this Agreement as the Lender and may exercise the same as though it
were not the Deal Agent, and the terms "Lender", "Lender's" and "Hedge
Counterparties" shall include the Deal Agent in its individual capacity.
7........The Deal Agent may, upon five (5) days' notice to the
Borrower, the Lender, the Hedge Counterparties, and the Deal Agent will, upon
the direction of the Lender (other than the Deal Agent, in its individual
capacity) and the Hedge Counterparties resign as Deal Agent. If the Deal Agent
shall resign, then the Lender during such 5-day period shall appoint a successor
agent. If for any reason no successor Deal Agent is appointed during such 5-day
period, then effective upon the termination of such five day period, the Lender
shall perform all of the duties of the Deal Agent hereunder and the Borrower
shall make all payments thereafter due and payable in respect of the Aggregate
Unpaids or under the Fee Letter directly to the Lender and for all purposes
shall deal directly with the Lender. After any retiring Deal Agent's resignation
hereunder as Deal Agent, the provisions of Articles VII and VIII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Deal Agent under this Agreement.
[THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY]
[Exhibit L to Agreement]
REQUIRED LEASE PROVISIONS
(References to "Borrower" below shall include the Transferring
Affiliate as applicable.)
1........Term: The initial term of the lease shall not be less
than 15 years.
2........Payment of Taxes: The tenant must be responsible for
the payment of ad valorem real estate taxes and assessments which may be levied
upon or assessed against the real property and the improvements situated
thereon, or arising from the use, occupancy or possession thereof.
3........Alterations: In the case where a tenant is to
construct a new restaurant facility or repair an existing facility and Borrower
is to provide funds for such construction or repair, the lease must provide that
(i) tenant's construction will comply with all applicable laws, rules and
regulations, and (ii) tenant shall be responsible for the payment and discharge
of all mechanic's and materialmen's liens which are filed against the property.
4........Maintenance. The tenant must be responsible to
maintain the real property and improvements subject to the lease. The lease must
provide that Borrower, as landlord, has no duty to repair the restaurant and
tenant may not offset rent due under the lease for maintenance and repair costs.
5........Permitted Use: Tenant must be required to operate the
restaurant at all times in compliance with the terms of the lease and all
applicable laws.
6........Operating Expenses: Borrower, as landlord, must have
no obligation to pay operating expenses of the restaurant, and must not guaranty
the payment of such expenses to franchisor or any other third party. Landlord
must not be liable for any interruption of services as a result of tenant's
failure to pay such costs, and tenant must be prohibited from offsetting rent
under the lease as a result of any such interruption in services or its
business.
7........Casualty/Destruction: The lease must provide that
tenant is responsible to rebuild the restaurant and improvements in the event of
a casualty, except if the casualty occurs during a period near the conclusion of
the initial term of the lease (as set forth in the lease) or at such other time
after the initial term as is set forth in the lease. The lease must provide that
if tenant is obligated to restore a damaged or destroyed restaurant, tenant
shall promptly restore the restaurant in a manner and with materials of
comparable quality to the original construction (unless applicable law requires
otherwise) from insurance proceeds, and if insurance proceeds are insufficient
to cover restoration costs, tenant must be obligated to pay the difference.
8........Insurance: The tenant must be responsible to insure
the Real Property and improvements thereon which are the property of Borrower,
at its expense, with hazard insurance and public liability insurance in amounts
determined by Borrower, and with deductibles and other coverages as determined
by Borrower. Borrower may approve self-insurance for any coverages.
9........Condemnation: In the event of a partial condemnation
which does not cause a termination of the lease, net awards may be paid to
tenant to the extent necessary to repair/restore its restaurant, or as otherwise
provided in the lease. In the event of a partial taking which does not terminate
the lease, the rent payable by tenant for the balance of the lease term may be
adjusted accordingly. Borrower must be entitled to receive any excess net award
without further obligation under the lease to account for such proceeds after
payment of restoration costs.
10.......Encumbrances: The lease may provide that tenant may
encumber tenant's leasehold interest with a leasehold mortgage only if such
leasehold mortgage is subordinate to Borrower's interest as landlord.
11.......Events of Default: The lease shall contain default
provisions stating that the following events are events of default: (i)
non-payment, (ii) breach of representations, covenants or agreements set forth
in the lease, and (iii) tenant's voluntary or involuntary bankruptcy, and
curative periods may be included for any events of default.
12.......Remedies: The lease must grant the Borrower the
following remedies for events of default: (i) the right to terminate the lease,
(ii) the right to reenter and repossess the restaurant facility, (iii) the right
to re-let the restaurant facility, and (iv) the right to collect Borrower's
costs of enforcing its remedies.
13.......Landlord Representations/Liability: Borrower, as
landlord, must make no representation in the lease as to the condition of the
property or, if applicable, compliance of any existing restaurant facility with
applicable laws and franchisor standards. Borrower, as landlord, must not be
liable for any damages suffered by the tenant's negligence or willful
misconduct.
14.......Indemnification: The lease shall contain
indemnification provisions regarding the tenant's indemnification of Borrower,
as landlord, against all claims related to: (i) the construction of the
restaurant facility (if applicable), (ii) operation of the restaurant facility,
(iii) violations of environmental and hazardous waste laws resulting from
tenant's operations at the property, and (iv) third party claims of personal
injury or property damage relating to the tenant's operations at the property.
15.......Tenant's Option to Purchase: In the event the tenant
is given an option to purchase the Real Property and improvements which are
subject to a lease, the purchase price will be the greater of the fair market
value thereof, or not less than 115% of the lease Rent Cost Basis, except that
with respect to Franchise Leases representing not more than 20% of the Aggregate
Eligible Loan Value and approved by the Deal Agent, such requirement shall not
apply.
16.......Termination of the Lease: Other than as a result of
destruction of the improvements during the periods described in paragraph 7
above, or as a result of condemnation, the tenant must not be permitted to
terminate the lease.
[Exhibit M to Agreement]
APPROVED ENVIRONMENTAL ASSESSMENT FIRMS
1. AGRA Earth & Environmental, Inc.
2. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Engineers Inc.
3. American Environmental Corporation
4. Ardaman & Associates, Inc.
5. ASTEC, Environmental Services Division
6. ATC Associates, Inc.
7. Atlanta Testing & Engineering
8. BHE Environmental, Inc.
9. California Environmental
10. CTE Environmental
11. EE&G
12. Empire Environmental
13. Environmental Consultants and
14. Earth Sciences Consultants, Inc.
15. Environmental System Design, Inc.
16. Environmental Management Group, Inc.
17. ESA (Environmental Site Assessments, Inc.)
18. ▇▇▇▇▇▇▇ Consulting
19. FGS, Inc.
20. Geotechnical and Environmental
21. Geotechnical Services, Inc.
22. Gallet & Associates
23. GeoSystems Engineering, Inc.
24. ▇▇▇▇▇ Engineering Associates, Inc.
25. GME Consulting Services, Inc.
26. Gulf of Maine Research Center, Inc.
27. GZA GeoEnvironmental, Inc.
28. KU Resources, Inc.
29. LAW Engineering & Environmental, Inc.
30. ▇▇▇▇ Environmental Company, Inc.
31. ▇▇▇▇▇▇▇▇▇▇▇, Inc.
32. MAK Environmental, Inc.
33. ▇▇▇▇▇▇-▇▇▇▇▇ & Associates, P.C.
34. Ninyo & ▇▇▇▇▇
35. Nova Consulting Group, Inc.
36. ▇▇▇▇▇▇▇ Environmental of Florida, Inc.
37. Petroleum Environmental Services, Inc.
38. Polyengineering, Inc.
39. Quality Environmental Solutions, Inc.
40. ▇▇▇▇▇-▇▇▇▇▇-Associates, Inc.
41. ▇▇▇▇▇▇▇ & Associates
42. RMA - ▇▇▇▇▇-▇▇▇▇▇▇ Associates, Inc.
43. ▇▇▇▇▇▇▇ Environmental Services
44. Soil and Environmental
45. Speedie & Associates
46. Streamline Environmental
47. Superior Environmental Corp.
48. ▇▇▇▇▇▇▇▇
▇▇. TVG Environmental Inc.
50. Underground Environmental
51. Universal Engineering Sciences
52. ▇▇▇▇▇▇-▇▇▇▇▇▇ Engineers, Inc.
[Exhibit N to Agreement]
[Reserved]
[Exhibit O to Agreement]
[FORM OF LOCAL COUNSEL OPINION]
---------, ----
Rabobank International, as Collateral Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: CNL APF Partners, LP -- Franchise Receivables Funding Facility
Ladies and Gentlemen:
We have acted as special counsel to the Borrower (as
hereinafter defined) in the State of __________ (the "State") in connection with
the making of certain loans (collectively, the "Loan") pursuant to that certain
Franchise Receivable Funding and Servicing Agreement dated as of October 14,
1999 (the "Loan Agreement"), by and among CNL APF Partners, LP, a Delaware
limited partnership (the "Borrower"), Neptune Funding Corporation, as lender
(the "Lender"), CNL Financial Services, LP, as Servicer, and Rabobank
International, as Deal Agent.
In connection with this opinion, we have examined drafts of
the loan documents ("Loan Documents") we deemed necessary to examine in order to
render this opinion, namely the following:
(a)......Loan Agreement;
(b)......each Mortgage, Security Agreement and Assignment of
Rents (the "Mortgage"), covering the premises in the State referred to on
Exhibit A attached hereto (the "Premises"); and
(c)......Promissory Note ("Note") from the Borrower to Lender
in the amount of $_________.
Terms used herein which are defined in the Loan Agreement
shall have the respective meanings set forth in the Loan Agreement, unless
otherwise defined herein.
This opinion is being delivered in connection with Section
3.1(l) of the Loan Agreement.
Based upon the foregoing, we are of the opinion that:
1........(a) Borrower is duly qualified to do business,
including the business of leasing the Premises and owning and operating the
Premises described in each Mortgage, and is in good standing as a foreign
corporation under the laws of the State.
(b)......CNL APF GP Corp. is duly qualified to act as the
general partner of the Borrower, and if required by the laws of the State, is in
good standing as a foreign corporation under the laws of the State.
2........The Mortgage is the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, subject to the qualifications set forth below.
3........The Mortgage is in proper form:
(a)......to create a lien against the collateral described in
the Mortgage (the "Mortgage Collateral"); and
(b)......for recording in the real property records of the
Clerk's Office in the respective counties where the Premises described in the
Mortgage are located in the State (the "Recording Offices"), and the Recording
Offices are the proper offices in the State for recording such instruments to
perfect a lien against real property.
4........The Mortgage contains the terms and provisions
necessary to enable the Lender, following a default under any of the Loan
Documents, to exercise the remedies which are customarily available to a real
estate lienholder under the laws of the State.
5........No recording, filing, privilege or other tax must be
paid in the State in connection with the making of the Loan or the execution,
delivery, recordation or enforcement of the Mortgage, other than [describe
taxes, if any].
6........[The priority of the lien of the Mortgage related to
all advances made by the Lender under the Loan Agreement on or before the date
on which the Mortgage is recorded in the Recording Office, will be determined by
the date of such recording.] The priority of the lien of the Mortgage related to
each advance made by the Lender under the Loan Agreement after the date the
Mortgage is so recorded will be determined by **[the date the Mortgage is
recorded] [or] [the date such advance is made]**.
7........The duly conducted foreclosure of the Mortgage will
not in any manner restrict, affect or impair the Borrower's liability with
respect to the indebtedness secured thereby or the Lender's rights or remedies
with respect to the foreclosure or enforcement of any other security interests
or liens securing such indebtedness, to the extent any deficiency remains unpaid
after application of the proceeds of the foreclosure of the Mortgage.
8........The law (statutory or otherwise) of the State does
not require a lienholder to make an election of remedies where such lienholder
holds security interests and liens on both the real and the personal property of
a debtor or to take recourse first or solely against its collateral. A Lender
may be compelled by principles of equity, such as the doctrine of marshaling, to
proceed against certain collateral before resort may be had to other collateral.
9........The Loan Documents provide that in any action to
enforce the lien of the Mortgage, the law of the State will govern the
enforceability of the lien. If the law of the State were to apply, the interest
and other obligations secured by the Mortgage would not be usurious under the
laws of the State, provided that the rate of interest reserved or collected does
not exceed ____%.
10.......The Borrower **[does] [does not]** have a right of
redemption under the laws of the State.
13.......The Lender is not required, solely because of its
role as Lender under the Loan Agreement (including, without limitation, the
making of the Loan) and as a secured party under the Mortgage, or because of
taking such actions as enforcement of the Loan Agreement, maintaining or
defending any action relating to the Loan, or taking mere title to the property
by judicial foreclosure or deed in lieu of foreclosure, to (a) qualify to
transact business in the State; (b) obtain a license, certificate or other form
of permission or consent from any State agency; (c) file a designation for
service of process or any other similar type of filing in the State; or (d) pay
any state or local tax (whether income, franchise or other) in the State, other
than taxes paid in the nature of documentary, mortgage and intangible taxes.
Very truly yours,
EXHIBIT A
THE PREMISES
[Exhibit P-1 to Agreement]
Form of Franchise Receivable Assignment - Loan
PREPARED BY AND RETURN TO:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Lowndes, Drosdick, Doster,
▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
P. O. Box 2804
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
SPACE ABOVE THIS LINE FOR RECORDER'S USE
---------------------------------------------------- ---------------------------------------------------------------
ARTICLE XIIIWARRANTY DEED
THIS WARRANTY DEED, made and executed as of the _____ day of
__________,1999, by CNL AMERICAN PROPERTIES FUND, INC., a Maryland corporation,
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Grantor") to CNL APF PARTNERS, LP, a Delaware
limited partnership, whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Grantee");
Grantor, for and in consideration of the sum of TEN DOLLARS ($10.00) to
Grantor in hand paid by Grantee, the receipt of which is acknowledged, has
granted, bargained, and sold to Grantee, and Grantee's heirs and assigns forever
that certain piece, parcel or tract of land situated in _______________ County,
Florida more particularly described on Exhibit "A" (the "Property") together
with all of Grantor's right, title and interest as landlord or lessor in and to
any leases or rental agreements pertaining to the Property, and all of the
rights, benefits and privileges of the landlord or lessor thereunder, including
without limitation all of Grantor's right, title and interest in and to all
security deposits and rentals thereunder. And Grantor does fully warrant the
title to the land conveyed, and will defend the same against the lawful claims
of all persons whomever.
[Signatures on Next Page]
IN WITNESS OF THE ABOVE, Grantor has executed this deed on the date
first written above.
Signed, sealed and delivered in the presence of:
CNL AMERICAN PROPERTIES FUND, INC., a Maryland
corporation
By: _____________________________
[insert name ], [insert title]
Name:
------------------------------------------------
Name:
-----------------------------------------------
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me on the _______ day
of ______________, 1999, by [insert name], as [title] of CNL AMERICAN PROPERTIES
FUND, INC., a Maryland corporation, on behalf of the corporation. He is
personally known to me and did not take an oath.
Notary Signature
Printed Name
Notary Public, State of Florida
Commission Number:
My Commission Expires:
[Exhibit P-2 to Agreement]
Form of Franchise Receivable Assignment - Lease
PREPARED BY AND RETURN TO:
▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Lowndes, Drosdick, Doster,
▇▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
P. O. Box 2804
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
SPACE ABOVE THIS LINE FOR RECORDER'S USE
---------------------------------------------------- ---------------------------------------------------------------
ARTICLE XIVWARRANTY DEED
THIS WARRANTY DEED, made and executed as of the _____ day of
__________,1999, by CNL AMERICAN PROPERTIES FUND, INC., a Maryland corporation,
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Grantor") to CNL APF PARTNERS, LP, a Delaware
limited partnership, whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Grantee");
Grantor, for and in consideration of the sum of TEN DOLLARS ($10.00) to
Grantor in hand paid by Grantee, the receipt of which is acknowledged, has
granted, bargained, and sold to Grantee, and Grantee's heirs and assigns forever
that certain piece, parcel or tract of land situated in _______________ County,
Florida more particularly described on Exhibit "A" (the "Property") together
with all of Grantor's right, title and interest as landlord or lessor in and to
any leases or rental agreements pertaining to the Property, and all of the
rights, benefits and privileges of the landlord or lessor thereunder, including
without limitation all of Grantor's right, title and interest in and to all
security deposits and rentals thereunder. And Grantor does fully warrant the
title to the land conveyed, and will defend the same against the lawful claims
of all persons whomever.
[Signatures on Next Page]
IN WITNESS OF THE ABOVE, Grantor has executed this deed on the date
first written above.
Signed, sealed and delivered in the presence of:
CNL AMERICAN PROPERTIES FUND, INC., a Maryland
corporation
By: ___________________________________
Name: [insert name ], [insert title]
------------------------------------------------
Name:
------------------------------------------------
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was acknowledged before me on the _______ day
of ______________, 1999, by [insert name], as [title] of CNL AMERICAN PROPERTIES
FUND, INC., a Maryland corporation, on behalf of the corporation. He is
personally known to me and did not take an oath.
Notary Signature
Printed Name
Notary Public, State of Florida
Commission Number:
My Commission Expires:
135210v1
[Exhibit Q to Agreement]
FORM OF PLEDGED RECEIVABLE SUPPLEMENT
[Insert Date]
Neptune Funding Corporation
Attention:
Cooperatieve Centrale Raiffeisen-Boerenleenbank, B.A.,
"Rabobank International", New York Branch ("Rabobank"),
as Deal Agent
Attention:
Re:......Franchise Receivable Funding and Servicing Agreement,
dated as of October 14, 1999
Ladies and Gentlemen:
Reference is made to the Franchise Receivable Funding and
Servicing Agreement, dated as of October 14, 1999 (as amended or otherwise
modified from time to time, the "Agreement"), among CNL APF Partners, LP (the
"Borrower"), Neptune Funding Corporation (the "Lender"), CNL Financial Services,
LP (the "Servicer") and Rabobank (the "Deal Agent"). Capitalized terms used but
not defined in this notice have the meanings ascribed to such terms in the
Agreement.
Pursuant to Section 2.2(g) of the Agreement, the Borrower
hereby adds the Franchise Receivables identified on Schedule 1 (each a "New
Pledged Receivable") to the Pledged Receivables. As security for the prompt
payment or performance in full when due, whether at stated maturity, by
acceleration or otherwise, of all Borrower Secured Obligations, the Borrower
hereby assigns and pledges to the Collateral Agent and grants to the Collateral
Agent a security interest in and lien upon, all of the Borrower's right, title
and interest in and to the New Pledged Receivables and all related Collateral,
in each case whether now or hereafter existing or in which Borrower now has or
hereafter acquires an interest and wherever the same may be located.
Very truly yours,
CNL APF PARTNERS, LP
By: CNL APF GP CORP., its general partner
By: __________________________________
Name:
Title:
** The aggregate principal amount of all Advances may not exceed the Program
Amount.