GUARANTY AGREEMENT
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THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of April 15, 1997
(this "Guaranty"), is made by FFCA Acquisition Corporation, a Delaware
corporation, FFCA Institutional Advisors, Inc., a Delaware corporation, and FFCA
Mortgage Corporation, a Delaware corporation (collectively, the "Guarantors"),
of the obligations of Franchise Finance Corporation of America, a Delaware
corporation ("Company"), under the Credit Agreement (defined below) among the
Company, NationsBank of Texas, N.A. as Administrative Agent ("Administrative
Agent"), Bank of Montreal, Chicago Branch, Commerzbank Aktiengesellschaft, Los
Angeles Branch, The Long-Term Credit Bank of Japan, Ltd. and Union Bank of
Switzerland (New York Branch), as Co-Agents, and the lenders parties to the
Credit Agreement (singly, a "Lender" and collectively, the "Lenders").
BACKGROUND
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1. The Company, the Administrative Agent, the Co-Agents, and the
Lenders have entered into a Amended and Restated Credit Agreement, dated as of
April 15, 1997 (said Amended and Restated Credit Agreement, as it may hereafter
be amended or otherwise modified from time to time, being the "Credit
Agreement"). The capitalized terms not otherwise defined herein have the
meanings specified in the Credit Agreement.
2. Pursuant to the Credit Agreement, the Company may, subject to the
terms of the Credit Agreement and the other Loan Papers, request that the
Lenders make Advances.
3. It is a condition precedent to the obligation of the Lenders to make
such Advances that each Guarantor guarantee repayment thereof upon the terms and
conditions set forth herein.
4. Each of the Guarantors is a Subsidiary of the Company, and the
Company and each of the Guarantors are members of the same consolidated group of
companies and are engaged in related businesses.
5. The Board of Directors of each Guarantor has determined that (i) the
execution, delivery, and performance of this Guaranty is necessary and
convenient to the conduct, promotion, and attainment of each Guarantor's
business and (ii) the Advances may reasonably be expected to benefit, directly
or indirectly, each Guarantor.
6. The Guarantors desire to induce the Lenders to make such Advances.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, the Guarantors hereby
agree as follows:
1. Guaranty.
(a) Each Guarantor, jointly and severally, hereby
unconditionally guarantees the full and punctual payment of, and
promises to pay, when due, whether at stated maturity, by mandatory
prepayment, by acceleration or otherwise, the Obligations, and agrees
to pay any and all reasonable expenses (including reasonable counsel
fees and expenses) incurred in enforcement or collection of all or any
part thereof, whether such obligations, indebtedness and liabilities
are direct, indirect, fixed, contingent, joint, several or joint and
several, and any rights under this Guaranty.
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of title 11 of the
United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Guarantor in
respect of intercompany indebtedness to the Company or other Affiliates
of the Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder) and
treating as assets, subject to Paragraph 4(a) hereof, to the value (as
determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation or contribution of such Guarantor
pursuant to (i) Applicable Law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the
Company of obligations arising under guaranties by such parties.
2. Guaranty Absolute. The Guarantors guarantee that the Obligations
will be paid strictly in accordance with the terms of the Credit Agreement, the
Notes, and the other Loan Papers, regardless of any Applicable Law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Lender with respect thereto; provided, however,
nothing contained in this Guaranty shall require the Guarantors to make any
payment under this Guaranty in violation of any Applicable Law, regulation or
order now or hereafter in effect. The obligations and liabilities of each
Guarantor hereunder are independent of the obligations of the Company under the
Credit Agreement and any Applicable Law. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional irrespective of:
(a) the taking or accepting of any other security or guaranty
for any or all of the Obligations, including any reduction or
termination of the Commitment;
(b) any increase, reduction or payment in full at any time or
from time to time of any part of the Obligations;
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(c) any lack of validity or enforceability of the
Credit Agreement, the Notes, or any other Loan Paper or other agreement
or instrument relating thereto, including but not limited by the
unenforceability of all or any part of the Obligations by reason of the
fact that (i) the Obligations, and/or the interest paid or payable with
respect thereto, exceeds the amount permitted by Applicable Law, (ii)
the act of creating the Obligations, or any part thereof, is ultra
▇▇▇▇▇, (iii) the officers creating same acted in excess of their
authority, or (iv) for any other reason;
(d) any lack of corporate power of the Company or any other
Person at any time liable for the payment of any or all of the
Obligations;
(e) any Debtor Relief Laws involving the Company, any
Guarantor or any other Person obligated on any of the Obligations;
(f) any renewal, compromise, extension, acceleration or other
change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations; any adjustment, indulgence,
forbearance, or compromise that may be granted or given by any Lender
or the Administrative Agent to the Company, any Guarantor, or any
Person at any time liable for the payment of any or all of the
Obligations; or any other modification, amendment, or waiver of or any
consent to departure from the Credit Agreement, the Notes, or any other
Loan Paper and other agreement or instrument relating thereto without
notification of any Guarantor (the right to such notification being
herein specifically waived by Guarantors);
(g) any exchange, release, sale, subordination, or
non-perfection of any collateral or Lien therein or any lack of
validity or enforceability or change in priority, destruction,
reduction, or loss or impairment of value of any collateral or Lien
therein;
(h) any release or amendment or waiver of or consent to
departure from any other guaranty for all or any of the Obligations;
(i) the failure by any Lender or the Administrative Agent to
make any demand upon or to bring any legal, equitable, or other action
against the Company or any other Person (including without limitation
any other Guarantor), or the failure or delay by any Lender or the
Administrative Agent to, or the manner in which any Lender or the
Administrative Agent shall, proceed to exhaust rights against any
direct or indirect security for the Obligations;
(j) the existence of any claim, defense, set-off, or other
rights which the Company or any Guarantor may have at any time against
the Company, the Lenders, or any
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Guarantor, or any other Person, whether in connection with this
Guaranty, the other Loan Papers, the transactions contemplated thereby,
or any other transaction;
(k) any failure of any Lender or the Administrative Agent to
notify any Guarantor of any renewal, extension, or assignment of the
Obligations or any part thereof, or the release of any security, or of
any other action taken or refrained from being taken by any Lender or
the Administrative Agent, it being understood that the Lenders and the
Administrative Agent shall not be required to give any Guarantor any
notice of any kind under any circumstances whatsoever with respect to
or in connection with the Obligations;
(l) any payment by the Company to the Lenders or the
Administrative Agent is held to constitute a preference under any
Debtor Relief Law or if for any other reason the Lenders or the
Administrative Agent is required to refund such payment or pay the
amount thereof to another Person; or
(m) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Company, any Guarantor,
any other guarantor or other Person liable on the Obligations,
including without limitation any defense by reason of any disability or
other defense of the Company, or the cessation from any cause
whatsoever of the liability of the Company, or any claim that the
Guarantors' obligations hereunder exceed or are more burdensome than
those of the Company.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Company, any Guarantor or otherwise, all as
though such payment had not been made.
3. Waiver. To the extent not prohibited by Applicable Law, each
Guarantor hereby waives: (a) promptness, protests, diligence, presentments,
acceptance, performance, demands for performance, notices of nonperformance,
notices of protests, notices of dishonor, notices of acceptance of this Guaranty
and of the existence, creation or incurrence of new or additional indebtedness,
and any of the events described in Section 2 and of any other occurrence or
matter with respect to any of the Obligations, this Guaranty or any of the other
Loan Papers; (b) any requirement that the Administrative Agent or any Lender
protect, secure, perfect, or insure any Lien or security interest or any
property subject thereto or exhaust any right or take any action against the
Company or any other Person or any collateral or pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever; (c) any right to assert
against the Administrative Agent or any Lender as a counterclaim, set-off or
cross-claim, any counterclaim, set-off or claim which it may now or hereafter
have against the Company or other Person liable on the Obligations; (d) any
right to seek or enforce any remedy or right that the Administrative Agent or
any Lender now has or may hereafter have against the Company (to the extent
permitted by Applicable Law); (e) any right to
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participate in any collateral or any right benefiting the Administrative Agent
or the Lenders in respect of the Obligations; and (f) any right by which it
might be entitled to require suit on an accrued right of action in respect of
any of the Obligations or require suit against the Company or any other Person,
whether arising pursuant to Section 34.02 of the Texas Business and Commerce
Code, as amended, Section 17.001 of the Texas Civil Practice and Remedies Code,
as amended, Rule 31 of the Texas Rules of Civil Procedure, as amended, or
otherwise.
4. Subrogation and Subordination. Notwithstanding any reference to
subrogation contained herein to the contrary, each Guarantor hereby irrevocably
waives any claim or other rights which it may have or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of such Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of any Lender
against the Company or any collateral which any Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statutes or common law, including without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Obligations shall not have been paid
in full, such amount shall be deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Lenders, and shall
forthwith be paid to the Administrative Agent to be credited and applied upon
the Obligations, whether matured or unmatured, in accordance with the terms of
the Credit Agreement. Each Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Paragraph 4 is knowingly made in
contemplation of such benefits.
5. Representations and Warranties. Each Guarantor hereby represents and
warrants that all representations and warranties as they apply to such Guarantor
only set forth in Article IV of the Credit Agreement (each of which is hereby
incorporated by reference) is true and correct.
6. Covenants. Each Guarantor hereby expressly assumes, confirms, and
agrees to perform, observe, and be bound by all conditions and covenants set
forth in the Credit Agreement, to the extent applicable to it, as if it were a
signatory thereto. Each Guarantor further covenants and agrees (a) punctually
and properly to perform all of such Guarantor's covenants and duties under any
other Loan Papers; (b) from time to time promptly to furnish the Administrative
Agent with any information or writings which the Administrative Agent may
reasonably request concerning this Guaranty; and (c) promptly to notify the
Administrative Agent of any claim, action, or proceeding affecting this
Guaranty.
7. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by the Lenders
as required pursuant to Section 9.1 of the Credit
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Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
8. Addresses for Notices. Unless otherwise provided herein, all
notices, requests, consents and demands shall be in writing and shall be
delivered by hand or overnight courier service, mailed or sent by telecopy to
the respective addresses specified herein and to the attention of the
individuals listed thereunder, or, as to any party, to such other addresses as
may be designated by it in written notice to all other parties. All notices,
requests, consents and demands hereunder shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or if mailed, effective on the earlier of actual receipt or three (3)
days after being mailed by certified mail, return receipt requested, postage
prepaid, addressed as aforesaid.
9. No Waiver; Remedies. No failure on the part of the Administrative
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any of the other Loan Papers shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder or under any of the
other Loan Papers preclude any other or further exercise thereof or the exercise
of any other right. Neither the Administrative Agent nor any Lender shall be
required to (a) prosecute collection or seek to enforce or resort to any
remedies against the Company or any other Person liable on any of the
Obligations, (b) join the Company or any other Person liable on any of the
Obligations in any action in which Lender prosecutes collection or seeks to
enforce or resort to any remedies against the Company or other Person liable on
any of the Obligations, or (c) seek to enforce or resort to any remedies with
respect to any Liens granted to (or benefiting, directly or indirectly) the
Administrative Agent or any Lender by the Company or any other Person liable on
any of the Obligations. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure or insure any of the Liens or the
properties or interests in properties subject thereto. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Applicable
Law.
10. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Guarantor against any and all of the obligations of
any Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not such Lender shall have made any demand under this Guaranty. Each
Lender agrees promptly to notify such Guarantor after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 10 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
11. Continuing Guaranty; Transfer of Notes. This Guaranty is an
irrevocable continuing
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guaranty of payment and shall (a) remain in full force and effect until
termination of the Commitment and final payment in full (after the Maturity
Date) of the Obligations and all other amounts payable under this Guaranty, (b)
be binding upon each Guarantor, its successors and assigns, and (c) inure to the
benefit of and be enforceable by each Lender and its successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), to the
extent permitted by Section 9.4 of the Credit Agreement, each Lender may assign
or otherwise transfer its rights under the Credit Agreement, the Notes or any of
the other Loan Papers or any interest therein to any other Person, and such
other Person shall thereupon become vested with all the rights or any interest
therein, as appropriate, in respect thereof granted to the Lender herein or
otherwise.
12. Information. Each Guarantor acknowledges and agrees that it shall
have the sole responsibility for obtaining from the Company such information
concerning the Company's financial condition or business operations as such
Guarantor may require, and that neither the Administrative Agent nor any Lender
has any duty at any time to disclose to any Guarantor any information relating
to the business operations or financial conditions of the Company.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA.
WITHOUT EXCLUDING ANY OTHER JURISDICTION, EACH GUARANTOR AGREES THAT THE STATE
AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION
OVER PROCEEDINGS IN CONNECTION HEREWITH.
14. WAIVER OF JURY TRIAL. EACH GUARANTOR, THE ADMINISTRATIVE AGENT, AND
THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
OF THE LOAN PAPERS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THE CREDIT AGREEMENT.
15. Ratable Benefit. This Guaranty is for the ratable benefit of the
Lenders, each of which shall share any proceeds of this Guaranty pursuant to the
terms of the Credit Agreement.
16. Guarantor Insolvency. Should any Guarantor become insolvent, fail
to pay its debts generally as they become due, voluntarily seek, consent to, or
acquiesce in the benefits of any Debtor Relief Law or become a party to or be
made the subject of any proceeding provided for by any Debtor Relief Law (other
than as a creditor or claimant) that could suspend or otherwise adversely affect
the rights of any Lender granted hereunder, then, the obligations of such
Guarantor under this Guaranty shall be, as between such Guarantor and such
Lender, a fully-matured, due, and payable
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obligation of such Guarantor to such Lender (without regard to whether there is
a Default or Event of Default under the Credit Agreement or whether any part of
the Obligations is then due and owing by the Company to such Lender), payable in
full by such Guarantor to such Lender upon demand, which shall be the estimated
amount owing in respect of the contingent claim created hereunder.
17. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE SUBJECT
MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
FFCA ACQUISITION CORPORATION
Address for each Guarantor:
c/o Franchise Finance Corporation of America
The Perimeter Center
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ----------------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Executive Vice President and Chief
Financial Officer
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
FFCA INSTITUTIONAL ADVISORS,INC.
with a copy to:
Franchise Finance Corporation of America
The Perimeter Center By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ----------------------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Executive Vice President and Chief
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇ Financial Officer
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Executive Vice President
and General Counsel
FFCA MORTGAGE CORPORATION
Address for Administrative Agent:
NationsBank of Texas, N.A. By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, 67th Floor ----------------------------------
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Executive Vice President and Chief
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ Financial Officer
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Senior Vice President
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