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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported)
April 21, 2000
UNI-MARTS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 1-11556 25-1311379
(State or other jurisdiction (Commission (IRS Employer
of incorporation or File Number) identification
organization) number)
477 East Beaver Avenue, State College, Pennsylvania 16801-5690
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (814) 234-6000
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This Document Contains 6 Pages.
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ITEM 2. ACQUISITION OF ASSETS
On April 21, 2000, pursuant to an asset purchase agreement, Uni
Marts, Inc., together with certain wholly owned affiliates (collectively, the
"Company") purchased the operating assets of a business operating a chain of
convenience stores and gasoline dispensing stations located in northeastern
Pennsylvania. The assets were purchased from Orloski Service Station, Inc. and
its owners (collectively "OSSI" or the "Sellers") for approximately $42.4
million in cash and assumption of debt.
The summary of certain provisions of the Asset Purchase
Agreement (the "Agreement") set forth in this Item 2 does not purport
to be complete and is qualified in its entirety by reference to the
Agreement, a copy of which is enclosed as an exhibit to this report.
OSSI was the operator of 43 convenience stores and gasoline
Dispensing stations in northeastern Pennsylvania and headquartered in
WilkesBarre, Pennsylvania. The assets purchased include 39 fee properties and
eight leased locations, one of which the Company intends to purchase within 30
days. The properties include two sites for future development and two sites
operated by gasoline dealers. Other assets acquired from OSSI include
inventories, furniture, fixtures, machinery, equipment, vehicles, prepaid
expenses, notes receivable and certain intangible assets.
The Agreement contains the usual and customary representations,
warranties and covenants by the Company and OSSI.
The purchase price for the OSSI assets was determined on the
basis of past operating results, merchandise and gasoline volumes,
projections of anticipated operating results, economies of scale
which might be realized as a result of the acquisition and
projections of anticipated sales and the purchasing leverage which
may result therefrom. The purchase price was the result of arms
length negotiations between the Company and the Sellers.
The acquisition will be recorded using the purchase method of
accounting effective as of April 21, 2000 with the purchase price
being allocated based upon the fair values of the individual OSSI
assets acquired. The results of operations from the acquired
convenience stores and gasoline dispensing stations will be included
in the Company's operations commencing with April 21, 2000. Prior to
the purchase, no relationship existed between the Company and OSSI or
any of their directors or officers, or any associate of any such
director or officer. The OSSI assets were used by OSSI in the
ordinary course of its convenience store and gasoline dispensing
station business and the Company intends to continue such use.
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The funds utilized by the Company to acquire the OSSI assets and
to pay expenses associated with the acquisition were provided by four loans
from affiliates of Franchise Financing Corporation of America ("FFCA")
aggregating $39.7 million, the Company's assumption of a $2.3 million OSSI loan
and from the Company's cash.
ITEM 5. OTHER EVENTS
The four FFCA loans discussed in the preceding paragraph also
closed on April 21, 2000. The loans consisted of the following:
(1) A floating-rate loan for $22,325,000 secured by mortgages on 27
fee properties acquired from OSSI.
(2) A fixed-rate loan for $6,900,000 secured by mortgages on nine fee
properties acquired from OSSI.
(3) A floating-rate loan for $9,375,000 secured by store equipment at
27 former OSSI sites and 49 Uni-Mart sites.
(4) A fixed-rate loan for $1,100,000 secured by store equipment at nine
former OSSI sites.
The mortgages will be amortized over 20 years and the equipment
loans will be amortized over ten years. Certain provisions of the FFCA loan
agreements require the Company's maintenance of minimum net worth of $20
million, a corporate fixed charge coverage ratio of 1.15:1 and a pooled-property
fixed charge coverage of 1.25 : 1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
7(a) and 7(b)
Pursuant to Item 7(a) and 7(b) of Form 8-K, the Company is
required to file financial statements and pro forma information with
respect to the acquisition described in Item 2. It is impractical to
provide these financial statements and pro forma information at the
time this report is filed. Therefore, in accordance with Item
7(a)(4) and 7(b)(2) of Form 8-K, the Company will file such financial
statements and pro forma financial information under cover of Form 8
as soon as practicable but not later than July 5, 2000.
(c) EXHIBITS
--------
Exhibit Number:
(2) Asset Purchase Agreement between the Company and
Sellers dated February 23, 2000 with Addendum dated April
2, 2000.
(20.1) Loan Agreement for $6,900,000 between FFCA Acquisition
Corporation and Uni Realty of Wilkes-Barre, L.P. dated
April 21, 2000.
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(20.2) Loan Agreement for $22,325,000 between FFCA Funding
Corporation and Uni Realty of Luzerne, L.P. dated April 21, 2000.
(20.3) Equipment Loan Agreement for $1,100,000 between FFCA
Acquisition Corporation and the Company dated April 21, 2000.
(20.4) Equipment Loan Agreement for $9,375,000 between FFCA
Funding Corporation and the Company dated April 21, 2000.
The Asset Purchase Agreement filed as Exhibit 2 above does not
include the following exhibits and schedules which will be furnished to the
Securities and Exchange Commission upon request:
Exhibits Omitted:
A Indemnity Escrow Agreement
B Bill of Sale
C Assignment and Assumption Agreement
D Non Competition Agreement
Schedules Omitted
1.1(a) Store Premises
1.1(b) Unimproved Premises
1.1(d) Personal Property
1.1(f) Lawsuits
1.1(k) Assumed Prepaid Items
1.1(n) Store Fund
1.2 Excluded Motor Vehicles, Office and Store Equipment
and Prepaid Items
1.4 Assumed Contracts
1.5 Inventory
2.3 Purchase Price Allocation Among the Selling Parties
2.5 Purchase Price Allocation Among the Assets
3.2 Prepaid Operating Expenses
4.1 Employee Accruals
6.2 Majority Shareholders
6.3 Subsidiaries
6.7 Required Approvals and Consents
6.9 Liabilities
6.12 Permits and Licenses
6.14 Environmental Matters
6.15(a) Real Property Encumbrance
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6.15(b) Real Property Encroachment
6.16 Personal Property Encumbrances
6.18 Material Contracts
6.19 Litigation
6.20 Insurance
6.21 Banking Arrangements
6.23 Employee Benefit Plans
6.24 Labor Matters
6.25 Interest in Competitors and Others
6.26 Suppliers and Vendors
6.27 Conditions Affecting the Company
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UNI-MARTS, INC.
(Registrant)
/S/ N. GREGORY PETRICK
DATE: May 8, 2000 By: ------------------------
N. Gregory Petrick
Senior Vice President and Chief
Financial Officer
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EXHIBIT 2
ASSET PURCHASE AGREEMENT
among
UNI-MARTS, INC.
AND
ORLOSKI SERVICE STATION, INC.,
GRACEDALE PROPERTIES, INC.,
BLAKESLEE CORNER, INC.,
AND
FRANK R. ORLOSKI AND ADELINE M. ORLOSKI
Dated as of February 23, 2000
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TABLE OF CONTENTS
ARTICLE I 1
PURCHASE AND SALE OF ASSETS 1
1.1. Purchase and Sale of Assets. 1
1.2. Excluded Assets. 3
1.3. Non-Assignable Assets. 4
1.4. Assumed Contracts. 4
1.5. Inventory Consideration. 4
ARTICLE II 6
PURCHASE PRICE 6
2.1. Purchase Price. 6
2.2. Adjustments to the Purchase Price. 7
2.3. Payment of Purchase Price. 7
2.4. Escrow Fund. 7
2.5. Allocation of Purchase Price; Tax Reporting. 8
ARTICLE III 8
NO ASSUMPTION OF THE SELLING PARTIES' LIABILITIES 8
3.1. No Assumption of Liabilities. 8
3.2. Proration of Certain Expenses. 10
3.3. Selling Parties Will Pay Its Other Liabilities. 10
3.4. Taxes, Fees and Expenses 10
ARTICLE IV 11
EMPLOYEES 11
4.1. Employees and Offers of Employment. 11
4.2. OSSI's Employee Benefit Plans. 11
4.3. Buyer Benefit Plans. 12
4.4. No Third Party Beneficiaries. 13
4.5. COBRA. 13
ARTICLE V 13
CLOSING 13
5.1. The Closing. 13
5.2. Action by the Selling Parties. 13
5.3. Action by the Buyer. 14
ARTICLE VI 14
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REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE SELLING PARTIES 14
6.1. Organization and Qualification. 14
6.2. Capitalization. 14
6.3. Subsidiaries. 14
6.4. Authorization of Agreement. 15
6.5. Corporate Power. 15
6.6. No Violation of Law or Default by Reason of Execution and
Performance of this Agreement. 15
6.7. Approvals and Consents. 15
6.8. Financial Statements. 15
6.9. No Undisclosed Liabilities. 16
6.10. No Material Changes. 16
6.11. Tax Returns, Audits and Tax Payments. 17
6.12. Permits and Licenses. 18
6.13. Compliance with Laws and Regulations. 18
6.14. Environmental Matters. 18
6.15. Title to and Condition of Real Property. 22
6.16. Marketable Title to Personal Property; Condition of Personal
Property. 22
6.17. Inventory. 23
6.18. Material Contracts. 23
6.19. Litigation. 24
6.20. Insurance. 24
6.21. Banking Arrangements. 24
6.22. Absence of Creditors' Arrangements and Bankruptcies. 24
6.23. Employee Benefit Plans. 24
6.24. Labor Matters. 25
6.25. Interest in Competitors and Others. 26
6.26. Supplies and Vendors. 26
6.27. Conditions Affecting OSSI. 26
6.28. Minute Books, Stock Records, Officers, Directors. 26
6.29. Brokers. 26
6.30. Full Disclosure. 27
ARTICLE VII 27
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER 27
7.1. Organization. 27
7.2. Authorization. 27
ARTICLE VIII 27
CONDUCT OF BUSINESS AND AFFAIRS OF OSSI PENDING CLOSING 27
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8.1. Conduct of Business Pending Closing. 27
8.2. Negotiations with Other Parties. 29
8.3. Best Efforts. 29
8.4. Access to Information and Employees. 29
8.5. Update of Disclosure. 30
8.6. Casualty, Risk of Loss. 31
8.7. Remediation. 31
ARTICLE IX 31
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER 31
9.1. Performance of Agreements. 31
9.2. Representations and Warranties. 31
9.3. Authorization Documents. 32
9.4. Good Standing Certificate. 32
9.5. No Material Adverse Change. 32
9.6. No Adverse Legal Proceedings. 32
9.7. Opinion of the Selling Parties' Counsel. 32
9.8. HSR Act Matters. 32
9.9. Title Insurance. 33
9.10. Survey. 33
9.11. Deeds. 33
9.12. Possession. 33
9.13. Inspection Reports and Surveys. 33
9.14. Financing. 33
9.15. Consents. 33
9.16. Assets Transferred at Closing. 34
9.17. Board of Directors Approval. 34
9.18. Due Diligence. 34
9.19. PA Bulk Sales Notices. 34
9.20. Tax Lien Certificates. 35
9.21. Tax Clearance Certificates. 35
9.22. Non Competition Agreement. 35
ARTICLE X 35
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING PARTIES 35
10.1. Performance of Agreements. 35
10.2. Representations and Warranties of the Buyer. 35
ARTICLE XI 36
INDEMNIFICATION REMEDIES 36
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11.1. Indemnification by the Selling Parties. 36
11.2. Indemnification by the Buyer. 36
11.3. Determination of Losses. 36
11.4. Procedures Relating to Indemnification for Third Party Claims
under Sections 11.1 and 11.2. 37
11.5. Nature and Survival of Representations 38
ARTICLE XII 39
CERTAIN POST-CLOSING MATTERS 39
12.1. Availability of Records. 39
12.2. Collection of Accounts Receivable. 39
ARTICLE XIII 40
TERMINATION OF AGREEMENT 40
13.1. Termination. 40
13.2. Effect of Termination. 40
ARTICLE XIV 41
MISCELLANEOUS 41
14.1. Governing Law 41
14.2. Parties in Interest 41
14.3. No Third Party Beneficiaries. 41
14.4. Entire Agreement. 41
14.5. Notices 41
14.6. Headings and Titles 42
14.7. Modification 42
14.8. Counterparts 43
ARTICLE XV 43
INDEMNIFICATION REMEDIES 43
15.1. Indemnification by the Selling Parties. 43
15.2. Determination of Environmental Losses. 44
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SCHEDULES AND EXHIBITS REFERRED TO IN AGREEMENT
List of Schedules Title
- --------------------- ------
Schedule 1.1(a) Store Premises
Schedule 1.1(b) Unimproved Premises
Schedule 1.1(d) Personal Property
Schedule 1.1(f) Lawsuits
Schedule 1.1(k) Assumed Prepaid Items
Schedule 1.1(n) Store Fund
Schedule 1.2 Excluded Motor Vehicles, Office and Store
Equipment and Prepaid Items
Schedule 1.4 Assumed Contracts
Schedule 1.5 Inventory
Schedule 2.3 Purchase Price Allocation Among the Selling
Parties
Schedule 2.5 Purchase Price Allocation Among the Assets
Schedule 3.2 Prepaid Operating Expenses
Schedule 4.1 Employee Accruals
Schedule 6.2 Majority Shareholders
Schedule 6.3 Subsidiaries
Schedule 6.7 Required Approvals and Consents
Schedule 6.9 Liabilities
Schedule 6.12 Permits and Licenses
Schedule 6.14 Environmental Matters
Schedule 6.15(a) Real Property Encumbrance
Schedule 6.15(b) Real Property Encroachment
Schedule 6.16 Personal Property Encumbrances
Schedule 6.18 Material Contracts
Schedule 6.19 Litigation
Schedule 6.20 Insurance
Schedule 6.21 Banking Arrangements
Schedule 6.23 Employee Benefit Plans
Schedule 6.24 Labor Matters
Schedule 6.25 Interest in Competitors and Others
Schedule 6.26 Suppliers and Vendors
Schedule 6.27 Conditions Affecting the Company
List of Exhibits Title
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A Indemnity Escrow Agreement
B Bill of Sale
C Assignment and Assumption Agreement
D Non Competition Agreement
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") dated February 23, 2000
is made among UNI-MARTS, INC., a Delaware corporation, or its assigns ("Buyer"),
ORLOSKI SERVICE STATION, INC., a Pennsylvania corporation ("OSSI"), GRACEDALE
PROPERTIES, INC., a Pennsylvania corporation ("Gracedale"), BLAKESLEE CORNER,
INC., a Pennsylvania corporation ("Blakeslee") (OSSI, Gracedale and Blakeslee
are collectively referred to herein as the "Orloski Entities"), FRANK R. ORLOSKI
and ADELINE M. ORLOSKI (collectively, the "Majority Shareholders") (the Orloski
Entities and the Majority Shareholders are collectively referred to herein as
the "Selling Parties").
BACKGROUND
A. OSSI is engaged in the business of operating gasoline
stations and related retail stores under the name "Orloski's Quik
Mart" ("OSSI's Business").
B. The Majority Shareholders, Gracedale and Blakeslee own
Certain parcels of real property and improvements which are used in
the operation of OSSI's Business.
C. The Majority Shareholders own a majority of the outstanding
Capital stock of OSSI and the children of the Majority Shareholders,
who will be parties to the Non-Competition Agreements described in
Section 9.22 hereof, own all of the outstanding capital stock of
Gracedale and Blakeslee.
D. The Selling Parties desire to sell to the Buyer, and Buyer
desires to purchase from the Selling Parties, all of the Assets
(defined in Section 1.1) pursuant to the terms of this Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS
---------------------------
1.1. Purchase and Sale of Assets.
---------------------------
Upon the terms and subject to the conditions of this Agreement, at
the Closing (defined in Section 5.1) the Selling Parties will sell and the Buyer
will purchase, free and clear of all claims, liabilities, encumbrances, liens
and security interests of any kind whatsoever, OSSI's Business as a going
concern and all of the following assets of the Selling Parties as existing at
the Closing (collectively, the "Assets"):
(a) The parcels of real property used for the locations of
OSSI's Business as more particularly described on Schedule
1.1(a) and all buildings and improvements thereon, and all
fixtures, rights, easements, privileges, hereditaments belonging
or appertaining thereto (including condemnation awards) or any
additions thereto (collectively, the "Store Premises");
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(b) The parcels of unimproved real property and all
fixtures, rights, easements, privileges, hereditaments belonging
or appertaining thereto (including condemnation awards) or any
additions thereto, as more particularly described on Schedule
1.1(b) (collectively, the "Unimproved Premises") and all
dealer locations where OSSI has an interest in the related
real property which are also described on Schedule 1.1(b)
(the "Dealer Locations") (the Store Premises, the Unimproved
Premises and the Dealer Locations are collectively referred to
herein as the "Real Property");
(c) All merchandise inventory, including petroleum product,
owned by OSSI and held for resale to customers and all parts and
supply inventory owned by OSSI, including bags and other
packaging items and janitorial supplies, in each case located
within or at any Store Premises as of the Inventory Date
(defined in Section 1.5(a)(i)) (the "Inventory");
(d) All of the furniture, fixtures, machinery, supplies,
equipment, parts and other items of personal property of OSSI,
wherever located, including but not limited to those items
listed on Schedule 1.1(d) (provided that the equipment and
machinery in the central corporate office and maintenance shed
to be transferred shall be that used in the normal course of
OSSI's Business), and all furniture, fixtures, machinery,
supplies, equipment, parts and other items of personal property,
wherever located, of the other Orloski Entities which are
described in Schedule 1.1(d) (collectively, the "Personal
Property"), and all service contracts and warranty and other
rights relating thereto;
(e) Subject to Sections 1.3 and 1.4, all rights and
interest of the Selling Parties in and to all Contracts (defined
in Section 6.18) listed on Schedule 1.4 which the Buyer has
agreed to assume;
(f) All claims and causes of action against others for
breach of contract, tort or otherwise and all lawsuits
(excluding Civil Action No. 5817-C of 1989, Frank and Adeline
Orloski and OSSI vs. The Commonwealth of Pennsylvania,
Department of Transportation) listed on Schedule 1.1(f);
(g) All governmental or other licenses, permits and
authorizations relating to the conduct of OSSI's Business or the
Assets which are listed on Schedule 6.12 (the "Permits");
(h) All books, records and accounts, correspondence,
production records, sales records, suppliers records, employment
records, drawings, plans, specifications and other records
relating to operating procedures, processes, inventions and know-
how of OSSI;
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(i) All of OSSI's records relating to OSSI's Business;
(j) All of OSSI's right, title and interest in the service
mark "Subs Now", and for a period of one (1) year after the
Closing Date (defined in Section 5.1), permission to the use of
the name "Orloski's" (provided that Buyer does not permit the
sale of certain magazines as agreed upon by Buyer and Selling
Parties in stores using the nane Orloski's during that one-year
period);
(k) certain prepaid cash items listed on Schedule 1.1(k);
(l) certain notes receivable due from dealers aggregating
approximately $270,000 and listed on Schedule 1.1(l);
(m) The goodwill associated with OSSI's Business; and
(n) The store fund (excluding lottery funds) as described
in Schedule 1.1(n) (the "Store Fund").
1.2. Excluded Assets.
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The Selling Parties will not sell and the Buyer will not purchase
pursuant to Section 1.1 the following assets of the Selling Parties existing at
the Closing (the "Excluded Assets"):
(a) The Selling Parties' cash, excluding the Store Fund;
(b) OSSI's trade accounts receivable existing at the Closing
and amounts earned but not yet billed for goods sold and
delivered before the Closing Date (the "Accounts Receivable");
(c) OSSI's receivables due from shareholders;
(d) OSSI's corporate seal, minute books and other records
relating exclusively to OSSI's corporate organization and
capitalization;
(e) Certain motor vehicles used by Orloski family members
or otherwise not used in the day-to-day operation of the OSSI
Business and listed on Schedule 1.2;
(f) Certain prepaid cash items listed on Schedule 1.2;
(g) The Non-Assignable Assets (defined in Section 1.3); and
(h) Certain store and office equipment not owned by the
Selling Parties listed on Schedule 1.2.
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1.3. Non-Assignable Assets.
---------------------
To the extent that any of the Assumed Contracts (defined in Section
1.4) or Permits is not capable of being transferred validly to the Buyer as
provided for in Section 1.1 without the consent or waiver of any Person (defined
in this Section 1.3) (including without limitation any governmental agency) or
if such a transfer or an attempt to effect such a transfer would constitute a
breach thereof or a violation of any law, nothing in this Agreement will
constitute a transfer or an attempted transfer of such Assumed Contract or
Permit (the "Non-Assignable Assets"). For purposes of this Agreement, "Person"
shall mean an individual, corporation, partnership, limited liability company,
association, trust or other entity or organization. The Selling Parties will
use their best efforts to obtain such consent or waiver of each such Person
whose consent or waiver is so required. If the Closing occurs and the Buyer
shall have waived the conditions of Section 9.15 relating to such consent or
waiver, then to the extent that any such consent or waiver shall not have been
obtained, after the Closing the Selling Parties will (a) use reasonable efforts
to obtain such consent or waiver and upon obtaining it will assign and transfer
such Assumed Contract or Permit to the Buyer, (b) cooperate with the Buyer by
entering into any reasonable arrangement designed to provide to the Buyer the
benefit of such Assumed Contract or Permit (without Selling Parties' incurring
any new or additional obligations to any Person other than the Buyer) and (c) at
the request and expense of the Buyer, enforce for the Buyer's account any rights
of the Selling Parties under or arising from any such Assumed Contract or Permit
(including without limitation the right to terminate such Assumed Contract or
Permit). In any such case, among the parties hereto, (i) the Selling Parties
will have no liabilities or obligations hereunder other than as set forth in
this Agreement with respect to such Assumed Contract or Permit, (ii) the failure
to obtain any such consent or waiver with respect to such Assumed Contract or
Permit will not be a breach of any obligation of the Selling Parties hereunder,
(iii) the Buyer will indemnify the Selling Parties with respect to such Assumed
Contract or Permit as provided in Section 11.2 and (iv) the Buyer will have no
obligation with respect to any such Assumed Contract or Permit except to the
extent provided in the arrangements respecting it referred to in the fourth
sentence of this Section.
1.4. Assumed Contracts.
-----------------
There is set forth on Schedule 1.4 a list of Contracts (defined in
Section 6.18) to be assigned to and assumed by Buyer (the "Assumed Contracts").
Selling Parties shall (subject to Section 1.3 ) at Closing be obligated to
assign all of their respective right, title and interest under such Assumed
Contracts to Buyer. Subject to Section 1.3, Buyer shall assume and be fully
liable for the obligations accruing on or after Closing under the Assumed
Contracts and Selling Parties shall not be responsible for any such obligations.
1.5. Inventory Consideration.
-----------------------
(a) For the purpose of this Agreement, the "Inventory
Purchase Price" shall be the sum of:
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(i) 70% of the sum of the Aggregate Retail Value (defined
in Section 1.5(b)(i)) of all Stores Premises for all
shelf merchandise Inventory owned by OSSI other than
petroleum product located within or at any of the
Store Premises as of the date which is within two (2)
days prior to the Closing Date, on which date a physical
inventory is conducted of the Inventory for each Store
Premises (the "Inventory Date"). The proceeds from the
sale of Inventory during the time the physical inventory
is being conducted shall be divided equally between
Buyer and Selling Parties. From the Inventory Date until
the Closing Date, Buyer shall be entitled to all
proceeds from the sale of Inventory; provided, however,
Selling Parties shall retain all liability and risk of
loss until the Closing has occurred; plus
(ii) OSSI's last net rack price on the day
prior to the Inventory Date, including all
applicable (as determined by Selling Parties'
and Buyer's counsel) federal, state and local
taxes plus freight costs, as of the Inventory
Date, for all petroleum product Inventory in
tanks at any of the Store Premises as of the
Inventory Date; plus
(iii) mutually agreed upon dollar amounts (i)
per Store Premises, (ii) for the office for
all of OSSI's office supplies located at
the Store Premises, and (iii) for OSSI's
office supplies located at the Office
Premises (as determined at the Inventory
Date by the Inventory Team) (as defined in
Section 1.5(b)) and supply Inventory owned
by OSSI located within or at any of the
Store Premises as of the Inventory Date;
plus
(iv) OSSI's net invoice cost for all cups and
ice bags located at the Store Premises.
The amount of Inventory transferred hereunder shall be determined in
accordance with Section 1.5(b) hereof.
(b) The inventory procedures used to determine the Aggregate
Retail Value for each Store Premises shall be as follows
(together with such additional procedures as shall be
mutually agreed upon):
(i) Buyer and Selling Parties, on the Inventory
Date, shall each have representatives
present at each Store Premises (the
"Inventory Counting Team")
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to conduct a physical inventory of the shelf
merchandise Inventory (other than petroleum
product Inventory) for each Store Premises,
based upon categories presently used by
Buyer for physical inventories. The
"Aggregate Retail Value" of such inventory
for each Store Premises shall be the
product of the retail price charged by OSSI
and the count as determined by the physical
inventory. In conducting such physical
inventory of the shelf merchandise Inventory
(other than the petroleum product Inventory,
cups, ice bags and supplies as described
above), all Inventory at each Store Premises
shall be deemed merchantable (excluding
damaged goods) and within code unless the
date stamped by the manufacturer has expired
on or before the Inventory Date.
(ii) The quantities of petroleum product
Inventory to be purchased and sold hereunder
shall be determined by measuring the
quantities of petroleum product by an
electronic monitoring system or by a
dipstick coated with "water paste" at the
Inventory Date with respect to each Store
Premises. Such measuring shall be done
jointly by Selling Parties and Buyer, and
the quantity of water determined shall be
subtracted from each dipstick reading.
(iii) The quantities of parts and supply Inventory,
including cups, ice bags and supplies as described
above to be purchased and sold hereunder shall be
determined by an itemized physical inventory at each
Store Premises conducted by the Inventory Counting
Team. Such physical inventory shall be conducted for
such Store Premises on the Inventory Date. Such
inventory counting may be observed jointly
by Selling Parties and Buyer.
A list of supply Inventory categories is attached hereto as
Schedule .5.
ARTICLE II
PURCHASE PRICE
--------------
2.1. Purchase Price.
--------------
The purchase price for the Assets (the "Purchase Price") shall be
Thirty-eight Million Eight Hundred Eighty Thousand Dollars ($38,880,000), as
adjusted pursuant to Sections 2.2 and 3.2 hereof.
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2.2. Adjustments to the Purchase Price.
---------------------------------
The Purchase Price shall be increased by (i) the Inventory Purchase
Price, (ii) the amount outstanding at Closing of the notes receivable listed on
Schedule 1.1(l), (iii) the amount of the Store Fund, and (iv) the amount of the
prepaid cash items listed on Schedule 1.1(k), decreased by Twenty-
five Thousand Dollars ($25,000), representing the previously
delivered nonrefundable deposit by Buyer (the "Deposit"), and
increased or decreased by the net prorations described in Section 3.2.
2.3. Payment of Purchase Price.
-------------------------
At the Closing the Buyer will pay (i) $1 million to the Escrow Agent
to be deposited into the Escrow Fund (defined in Section 2.4 hereof), and (ii)
to the Selling Parties the balance of the Purchase Price (other than the
Inventory Purchase Price) in cash by interbank wire transfer to such bank
account of the Selling Parties as the Selling Parties shall have designated to
Buyer at least two (2) business days before the Closing Date. Within ninety (90)
days after the Closing Date, Buyer shall pay the Selling Parties the Inventory
Purchase Price in the same manner as described above. The Purchase Price shall
be allocated to each of the Selling Parties as set forth in Schedule 2.3, which
will be mutually agreed upon by the parties and attached to this Agreement prior
to Closing.
2.4. Escrow Fund.
-----------
(a) At Closing, Buyer, on behalf of the Selling
Parties, shall pay One Million Dollars ($1,000,000) out of
the Purchase Price to a mutually acceptable escrow agent
("Escrow Agent"), to be held (the "Escrow Fund") and
disbursed by the Escrow Agent as described in this
Agreement and pursuant to a certain Indemnity Escrow
Agreement attached hereto as Exhibit A (the "Indemnity
Escrow Agreement"). For a period of one (1) year after the
Closing Date, Selling Parties' obligations to Buyer
pursuant to Sections 11.1 and 15.1 hereof shall be
satisfied first from the Escrow Fund to the extent that the
Escrow Fund has enough funds to pay Buyer's claims for
Losses and Environmental Losses (defined in Sections 11.1
and 15.2). After such one (1) year period or to the extent
the Escrow Fund has insufficient funds to cover Buyer's
Losses and Environmental Losses, Buyer may otherwise
proceed against the Selling Parties to enforce its rights
under Article XI hereof.
(b) Pursuant to the terms of the Escrow Agreement,
upon the first anniversary of the Closing Date, the Escrow
Agent shall release the Escrow Fund to the Selling Parties;
provided, however, that if there exist outstanding claims
by Buyer against Selling Parties pursuant to Sections 11.1
or 15.1 on such date, Escrow Agent shall only release such
portion of the Escrow Fund equal to the Escrow Fund less
the outstanding claims.
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<PAGE> 20
2.5. Allocation of Purchase Price; Tax Reporting.
-------------------------------------------
The Purchase Price will be allocated among the Assets pursuant to
Schedule 2.5, which will be mutually agreed upon by the parties and
attached to this Agreement prior to Closing. The Buyer will prepare for
filing all information returns and statements which may be required by Section
1060 of the Internal Revenue Code and any regulations issued thereunder (the
"Section 1060 Reports"). The Selling Parties will furnish to the Buyer all
information relating to the Selling Parties and the Assets needed by the Buyer
to prepare such Section 1060 Reports and the Selling Parties will execute and
file the Section 1060 Reports as requested by the Buyer. The parties hereto
will file all their respective tax returns and reports relating to the
transactions contemplated hereby on a basis consistent with the Section 1060
Reports.
ARTICLE III
NO ASSUMPTION OF THE SELLING PARTIES' LIABILITIES
-------------------------------------------------
3.1. No Assumption of Liabilities.
----------------------------
(a) Except as expressly provided herein, Buyer shall
not assume, nor in any way be liable or responsible for,
any claims, lawsuits, liabilities, obligations or debts of
Selling Parties, including without limitation:
(i) tort claims asserted against Selling
Parties, claims for breach of contract, or
any claims of any kind asserted by
customers, employees of Selling Parties or
any other party that are based on acts or
omissions occurring on or before the Closing
Date;
(ii) any accounts payable, employment or other
taxes, and any other obligation or liability
of Selling Parties to pay money whatsoever;
(iii) liabilities or obligations of the Selling
Parties, the existence of which constitutes
a breach of any of the Selling Parties'
representations, warranties or covenants
hereunder;
(iv) liabilities or obligations of the Selling
Parties to make distributions to its
shareholders as dividends in liquidation or
otherwise;
(v) liabilities or obligations of the Selling
Parties (other than the liabilities and
obligations referred to in Section 3.1(b))
under or in connection with any transaction
occurring after the Closing;
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<PAGE> 21
(vi) liabilities or obligations of the Selling
Parties incurred in connection with or
related to the transfer of the Assets and
OSSI's Business pursuant to this Agreement
or in connection with the Selling Parties'
liquidation and dissolution;
(vii) liabilities of the Selling Parties, if any,
for federal, state or other income taxes
arising out of, or resulting from, the
transactions contemplated by this Agreement;
and
(viii)liabilities of Selling Parties for any
severance or similar benefits to non-
Transferred Employees.
(b) Notwithstanding the provisions of the immediately
preceding Section 3.1(a), on the Closing Date, contingent
upon the consummation of the transactions contemplated
hereby, Buyer shall assume and thereafter in due course
fully satisfy the following liabilities of the Selling
Parties:
(i) those obligations arising under the Assumed
Contracts specified pursuant to Section 1.4
and assigned by Selling Parties to Buyer,
with respect to, and only with respect to,
performance that becomes due thereunder
subsequent to the Closing Date. Liabilities
and obligations under such Assumed Contracts
that have accrued, or the performance of
which is due, on or prior to the Closing
Date, and all liabilities and obligations
under all other Contracts not expressly
assumed by Buyer, shall remain the sole
responsibility of the Selling Parties;
(ii) the obligations and liabilities of the
Selling Parties to Amoco Oil Company
("Amoco") pursuant to an agreement with an
effective date of January 1, 1998 in
connection with Amoco's reimaging of certain
of the Store Premises, which obligation
shall be no greater than $2,340,000;
(iii) the obligations and liabilities of the Selling Parties
to Texaco pursuant to an agreement with an effective
date of July 1, 1998 in connection with
Texaco's reimaging of certain of the Store
Premises, which obligation shall be no
greater than $200,000; and
(iv) certain obligations and liabilities of the Selling
Parties to Amoco pursuant to an agreement dated
March 18, 1997 in connection with the purchase of
gasoline for the Store Premises, which obligation
shall be no greater than $3,000,000.
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<PAGE> 22
3.2. Proration of Certain Expenses.
-----------------------------
(a) Operating expenses such as telephone, utilities, rent and
wages for the month (or other billing or payment period) in which
the Closing occurs (the "Current Period"), which become payable
after the Closing will be paid by the Buyer when due, subject to
reimbursement or advance by the Selling Parties of the portion
thereof accrued or relating to a period prior to the Closing (the
"Selling Parties' Portion of Current Period Expenses").
The Buyer will pay the Selling Parties for the portion of any
operating expenses for the Current Period prepaid by the Selling
Parties for the portion thereof accruing or relating to a period on or
after the Closing Date which are listed on Schedule 3.2 (the "Buyer's
Portion of Current Period Expenses"). To the extent that the
Selling Parties' or the Buyer's Portion of Current Period Expenses
is ascertainable at the Closing Date, the Selling Parties and
the Buyer will pay such amount to the other at the Closing.
(b) Real property taxes and all other public or governmental
charges against the Real Property (including charges for sewer,
water, drainage or other services) shall be apportioned between
Selling Parties and Buyer as of the Closing Date and paid thereafter
by Buyer; provided, however, that any penalties or interest for late
payment or non-payment of such taxes or charges shall be paid solely
by Selling Parties.
3.3. Selling Parties Will Pay Its Other Liabilities.
----------------------------------------------
The Selling Parties will pay and satisfy when due, whether before or
after the Closing, all the Selling Parties' liabilities other than those
described in Section 3.1(b). Subject to completion of the Closing, the Selling
Parties will give the Buyer such evidence of such payment and satisfaction as
the Buyer may from time to time request.
3.4. Taxes, Fees and Expenses
------------------------
Buyer and the Selling Parties shall each pay one-half of all
transfer taxes payable in connection with the transfer and conveyances to be
made to the Buyer hereunder. Buyer shall pay all sales tax, if any, payable in
connection with the transfer and conveyances to be made to the Buyer hereunder.
Buyer shall also pay all required filing fees in connection with the filing of
the Notification and Report Form with the U.S. Department of Justice and Federal
Trade Commission pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (the "HSR Act"). After the Closing the Selling Parties will pay all their
other expenses incurred in connection with this Agreement and the transactions
contemplated hereby, including all related accounting and legal fees. No such
taxes, fees or expenses shall be regarded for the purposes of this Agreement as
having arisen in the ordinary course of business.
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<PAGE> 23
ARTICLE IV
EMPLOYEES
---------
4.1. Employees and Offers of Employment.
----------------------------------
(a) On or prior to the Closing Date, Buyer may, but
shall not be obligated to, offer employment to any or all
employees of OSSI. Any such offers shall be at such salary
or wage and benefit levels and on such other terms and
conditions as Buyer shall in its sole discretion deem
appropriate. The employees who accept and commence
employment with Buyer are hereinafter collectively referred
to as the "Transferred Employees." The Selling Parties
shall not take any action that would impede, hinder,
interfere or otherwise compete with Buyer's effort to hire
any Transferred Employees. Buyer shall not assume
responsibility for any Transferred Employee until such
employee commences employment with Buyer. OSSI shall use
its best efforts to retain certain employees of OSSI who
are not Transferred Employees to assist Buyer in transition
matters for a period of thirty (30) days after the Closing
Date. Such OSSI employees shall not be employees or agents
of Buyer and shall not be entitled to any of Buyer's
employee benefits. OSSI shall pay all costs and expenses
associated with such employee's services except that Buyer
shall pay a portion of such costs proportional to the
services rendered by such employees on behalf of Buyer
during such 30-day period. OSSI shall not pay such
employees any severance or similar benefits until after the
expiration of such thirty (30) day period.
(b) Selling Parties shall be solely responsible to pay
and shall hold Buyer harmless from the compensated absence
balance of all Transferred Employees as of the Closing
Date, including the amounts of accrued vacation and
vacation pay (if any), sick-pay days, attendance bonuses
and other bonuses or amounts payable in lieu of benefits
applicable to the period prior to the Closing Date payable
to the Transferred Employees, which amounts shall be paid
by Selling Parties within 30 days after the Closing Date.
4.2. OSSI's Employee Benefit Plans.
-----------------------------
(a) OSSI shall retain all obligations and liabilities
under the Plans (as defined in Section 6.24) in respect of
each employee or former employee of OSSI (including any
beneficiary thereof). Except as expressly set forth
herein, OSSI shall retain all
-11-
<PAGE> 24
liabilities and obligations in respect of benefits accrued
as of the Closing Date by the Transferred Employees under
the Plans, and neither Buyer nor any of its affiliates
shall have any liability with respect thereto. No assets
of any Plan shall be transferred to Buyer or any of its
affiliates or to any plan of Buyer or any of its
affiliates. Accrued benefits or account balances of
Transferred Employees under the Plans shall be fully vested
as of the Closing Date.
(b) With respect to the Transferred Employees
(including any beneficiary or dependent thereof), OSSI
shall retain (i) all liabilities and obligations arising
under any group life, accident, medical, dental or
disability plan or similar arrangement (whether or not
insured) to the extent that such liability or obligation
relates to contributions or premiums accrued (whether or
not payable), or to claims incurred (whether or not
reported), on or prior to the Closing Date, (ii) all
liabilities and obligations arising under any worker's
compensation arrangement to the extent such liability or
obligation relates to the period prior to the Closing Date,
including liability for any retroactive workman's
compensation premiums attributable to such period and (iii)
all other liabilities and obligations arising under the
Plans to the extent any such liability or obligation
relates to the period prior to the Closing Date.
(c) With respect to any Transferred Employee
(including any beneficiary or dependent thereof) who enters
a hospital or is on short-term disability under any Plan on
or prior to the Closing Date and continues in a hospital or
on short-term disability after the Closing Date, OSSI shall
be responsible for claims and expenses incurred both before
and after the Closing Date in connection with such
Transferred Employee, to the extent that such claims and
expenses are covered by a Plan, until such time, (if any)
that such Transferred Employee resumes full-time employment
with Buyer or one of its affiliates and, in the case of any
beneficiary or dependent of a Transferred Employee, such
person's hospitalization has terminated. With respect to
any Plan covering medical expenses and other costs relating
to pregnancies and maternity leave of Transferred
Employees, OSSI shall be responsible for all claims
(whether or not reported) and expenses incurred during the
period prior to and ending on the Closing Date, and Buyer
or one of its affiliates shall be responsible for such
benefit arrangements covering such pregnancies and
maternity leave for the period subsequent to the Closing
Date.
4.3. Buyer Benefit Plans.
-------------------
Buyer or one of its affiliates will recognize all service of the
Transferred Employees with OSSI, only for purposes of eligibility to participate
in and vesting in those employee benefit plans, within the meaning of Section
3(3) of ERISA, in which the Transferred Employees are enrolled by Buyer or one
of its affiliates immediately after the Closing Date.
-12-
<PAGE> 25
4.4. No Third Party Beneficiaries.
----------------------------
No provision of this Article IV shall create any third party
beneficiary or other rights in any employee or former employee (including any
beneficiary or dependent thereof) of OSSI in respect of continued employment (or
resumed employment) with either Buyer or any of its affiliates, and no provision
of this Article IV shall create any such rights in any such persons in respect
of any benefits that may be provided, directly or indirectly, under any Plan or
any plan or arrangement that may be established by Buyer or any of its
affiliates. No provision of this Agreement shall constitute a limitation on
rights to amend, modify or terminate after the Closing Date any such plans or
arrangements of Buyer or any of its affiliates.
4.5. COBRA.
-----
OSSI shall notify all of its employees in writing of their rights
with regard to any group health plan coverage, shall timely collect and remit
all premiums to the appropriate party, and perform all other actions mandated by
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
as codified in Section 4980B of the Code and that are required to be given,
collected, or otherwise performed as a result of the Closing under this
Agreement. Each of the Selling Parties and Buyer agree that Buyer is not
intended to be and is not a successor employer for COBRA purposes with respect
to any Plan subject to COBRA, and that no benefit plan or arrangement maintained
by Buyer shall be a successor plan for COBRA purposes to any Plan of OSSI.
ARTICLE V
CLOSING
-------
5.1. The Closing.
-----------
The Closing hereunder (the "Closing") will be held at such place as
the parties hereby mutually agree at 10:00 a.m. within ten (10) calendar days
(so long as the tenth day is a business day) after the complete satisfaction of
the conditions set forth in Articles IX and X hereof (the "Closing Date"). The
parties agree to use their mutual best efforts to cause the Closing to occur.
5.2. Action by the Selling Parties.
-----------------------------
At the Closing the Selling Parties will deliver to the Buyer such
instruments of transfer and related documents as shall in the opinion of counsel
for the Buyer be effective to vest in the Buyer good and marketable title to the
Assets, free and clear of all claims, liabilities, encumbrances, liens, charges
or security interests.
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<PAGE> 26
5.3. Action by the Buyer.
-------------------
At the Closing the Buyer will (i) pay the Purchase Price as provided
in Section 2.2 and (ii) deliver to the Selling Parties such instruments of
assumption to evidence the assumption by the Buyer pursuant to Section 3.1(b) of
the Assumed Contracts.
ARTICLE VI
REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE SELLING PARTIES
----------------------------------------------------------------
The Selling Parties, jointly and severally, represent, warrant and
covenant as follows:
6.1. Organization and Qualification.
------------------------------
The Orloski Entities are each (i) corporations duly
incorporated, validly existing and in good standing under the laws of
the state of their respective jurisdictions, (ii) duly qualified as
foreign corporations and are in good standing in the jurisdictions
where the conduct of their respective businesses and the ownership of the
Assets makes such qualification necessary, and (iii) have the corporate power,
and hold all licenses, permits and authority necessary to carry on their
respective businesses as such businesses are now being conducted. The copies
(certified by each of the Orloski Entities' Secretaries) of the Orloski
Entities' Certificate (or Articles) of Incorporation
and bylaws which have been delivered to the Buyer are true, correct and complete
as at the date of this Agreement.
6.2. Capitalization.
--------------
The authorized capital stock of OSSI consists of 10,000 shares of
common stock, $100.00 par value per share, of which 2,500 shares are issued and
outstanding. All of such shares are held of record and beneficially by the
shareholders listed on Schedule 6.2. None of such shares are held by OSSI in
its treasury. There are no outstanding options, warrants or other commitments
of any character obligating OSSI to issue any shares of its capital stock or
options or rights with respect thereto, and there are no existing or outstanding
securities of OSSI or any of its Subsidiaries (defined in Section 6.3) of any
kind convertible into or exchangeable for shares of OSSI's capital stock. There
are not outstanding any obligations or commitments of OSSI or any of its
Subsidiaries to purchase, redeem or otherwise acquire any outstanding shares of
OSSI.
6.3. Subsidiaries.
------------
The Selling Parties do not directly or indirectly control any
Person, except the subsidiaries listed on Schedule 6.3 (the "Subsidiaries").
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<PAGE> 27
6.4. Authorization of Agreement.
--------------------------
The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by each of the
Orloski Entities' respective boards of directors and shareholders. This
Agreement when executed and delivered by the Selling Parties shall be the legal,
valid and binding obligation of the Selling Parties, enforceable against each of
them in accordance with its terms.
6.5. Corporate Power.
---------------
The Orloski Entities have unrestricted corporate power to convey,
transfer, assign, and deliver to the Buyer all of the Assets owned by
them to be transferred hereunder.
6.6. No Violation of Law or Default by Reason of Execution and
---------------------------------------------------------
Performance of this Agreement.
-----------------------------
The execution, delivery and, subject to obtaining the approvals and
consents referred to in Section 6.7, the performance of this Agreement by the
Selling Parties will not violate any applicable law or constitute a default or
result in a right of acceleration, termination or similar right by any party (or
would, but for the passage of time or the giving of notice, constitute a default
or result in such a right of acceleration, termination or similar right) under
the respective Certificate (or Articles) of Incorporation or bylaws of the
Orloski Entities or any Contract nor will it result in the cancellation,
modification, revocation or suspension of any of the Permits.
6.7. Approvals and Consents.
----------------------
Except as set forth in Schedule 6.7, no approval, consent or
authorization of, or declaration or filing with, any governmental or judicial
authority or any other Person is required in connection with the execution and
delivery of this Agreement by the Selling Parties or the performance by any of
them of their obligations hereunder or the consummation by them of the
transactions contemplated hereby.
6.8. Financial Statements.
--------------------
OSSI has delivered to the Buyer the audited financial statements of
OSSI as at December 31, 1999 for the three (3) years then ended, and shall
deliver, at the Selling Parties' expense, within forty-five (45) days after the
Closing Date, such statements for the interim period from January 1, 2000
through the Closing Date, reviewed by Parente Randolph, PC, OSSI's independent
accountants. (The December 31, 1999 balance sheet is sometimes referred to
herein as the "December 31, 1999 Balance Sheet" and December 31, 1999 as the
"Balance Sheet Date.") All such financial statements are correct and complete,
fairly present the financial condition, assets and liabilities of OSSI as at
their respective dates and the results of its operations for such periods, and
have been prepared in accordance with generally accepted accounting principles
consistently applied and in accordance with OSSI's historical practices.
-15-
<PAGE> 28
6.9. No Undisclosed Liabilities.
--------------------------
To the best knowledge of the Selling Parties, as at the Balance
Sheet Date, OSSI had no liability or obligation of any nature, whether due or to
become due, absolute, contingent or otherwise, including no liabilities for
taxes (including any interest or penalties relating thereto) in respect of or
measured by the income of OSSI for any period prior to the Balance Sheet Date,
except to the extent reflected or reserved against in the December 31, 1999
Balance Sheet or as set forth in Schedule 6.9 or otherwise disclosed by this
Agreement (provided that the Selling Parties shall be obligated to indemnify and
hold Buyer harmless from any liability if this statement is not correct,
regardless of knowledge). None of the Selling Parties knows or has any
reasonable ground to know of any basis for the assertion against OSSI as of the
date hereof of any such liability reflected or reserved against in the December
31, 1999 Balance Sheet except for (i) liabilities arising since the Balance
Sheet Date in the ordinary course of business and (ii) other liabilities
disclosed in this Agreement.
6.10. No Material Changes.
-------------------
Since the Balance Sheet Date there has not been:
(a) any change in the financial or other condition,
assets, liabilities or business of OSSI, except changes in
the ordinary course of business, none of which individually
or in the aggregate has had a Material Adverse Effect on
OSSI's Business;
(b) any damage, destruction or loss of property of the
Selling Parties (whether or not covered by insurance)
involving an amount in excess of $50,000 or otherwise
having a Material Adverse Effect on OSSI's Business;
(c) any increase in the compensation payable or to
become payable by OSSI to any of its officers, employees or
agents (including without limitation any bonus or other
contingent arrangement), excepting any increase necessarily
incurred by OSSI by reason of any law or regulation
affecting minimum wages payable to employees thereof and an
approximately 3% average annual increase in salary to its
employees;
(d) any strike, lockout, labor trouble, or any similar
event or condition of any character involving employees of
OSSI having a Material Adverse Effect on OSSI's Business;
(e) any failure by any of the Selling Parties to
maintain in full force and effect all policies of insurance
then in effect or any renewals or replacements thereof, or
to give any notice or present any claim under any such
policy when due;
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<PAGE> 29
(f) any sale or transfer by the Selling Parties of any
of the Assets other than in the ordinary course of its
business;
(g) any mortgage, pledge, hypothecation or other
encumbrance of any of the Assets;
(h) any agreement or arrangement to which any of the
Selling Parties is a party granting to any Person any
rights to purchase any of the Assets other than in the
ordinary course of business;
(i) any capital expenditure commitment by any of the
Selling Parties in excess of $10,000 in any one case or
$50,000 in the aggregate or other than for ordinary repairs
and maintenance of the Assets;
(j) any other material expenditure or any commitment
by OSSI other than in the ordinary course of its business;
(k) any other material transaction by OSSI other than
in the ordinary course of its business;
(l) any failure or refusal by OSSI to pay any of its
obligations, including obligations to vendors and Persons
rendering services to it; or (m) any failure or refusal by
the Selling Parties to make, in a timely manner, all
filings and declarations with and notices to governmental
authorities required to be made in connection with the
conduct of its business.
"Material Adverse Effect" means a material adverse effect on (i)
the business, financial condition, results of operation or
prospects of OSSI or (ii) the ability of OSSI to perform
its obligations under this Agreement. Any event or
circumstance shall be deemed to have a Material Adverse
Effect if such event or circumstance, individually or
together with all other events and circumstances which have
occurred or come into existence at or prior to the date of
determination of such Material Adverse Effect, has or is
reasonably likely to have a Material Adverse Effect,
excluding events or circumstances which are recognized as
part of the normal, historical or seasonal trends of the
business.
6.11. Tax Returns, Audits and Tax Payments.
------------------------------------
OSSI has filed with the appropriate governmental agencies, domestic
and foreign, all tax returns required to be filed by it. The Internal Revenue
Service has not audited the federal income tax returns of OSSI except for its
current audit of OSSI's 1997 return. No waiver of statutes of limitation for
federal income or other tax liability has been executed by OSSI. OSSI has
not filed any consent or agreement under Section 341(f) of the Internal Revenue
Code. There are no proposed assessments of federal income or other taxes
-17-
<PAGE> 30
pending against OSSI. All such returns have been prepared in accordance with all
applicable laws and regulations. Any of the following due or payable by OSSI on
or before the Balance Sheet Date or relating to the operation of OSSI's Business
on or before such date has been paid or provided for in the December 31, 1999
Balance Sheet: contributions pursuant to unemployment insurance laws, sales and
use taxes and similar contributions and taxes arising under the law of any
jurisdiction. OSSI has withheld from each payment to each of its employees the
amount of all taxes (including but not limited to, federal income taxes, state
and municipal income taxes, Federal Insurance Contribution Act contributions and
all other employee taxes or contributions) legally required to be withheld
therefrom and has paid the same to the proper tax receiving or other officer,
except for such amounts withheld but not yet payable.
6.12. Permits and Licenses.
--------------------
There is set forth on Schedule 6.12 a complete list of the Permits,
issued or granted by any governmental authority, commercial enterprise or other
Person, held by OSSI. OSSI owns, possesses or has the legal right to use the
Permits, free and clear of all liens, pledges, claims or other encumbrances of
any nature whatsoever. OSSI is not in default under, nor has it received any
notice of any claim or default or any other claim or proceeding relating to, any
such Permit. To the best knowledge of the Selling Parties, the Permits
constitute all of the authorizations from federal, state, local or foreign
governments or governmental agencies, departments or bodies that are necessary
for the conduct of OSSI's Business and OSSI is, and at all times in the past has
been, in compliance with the Permits (provided that the Selling Parties shall be
obligated to indemnify and hold Buyer harmless from any liability relating to
the operation of the OSSI Business and the Assets prior to the Closing Date if
these statements are not correct, regardless of knowledge).
6.13. Compliance with Laws and Regulations.
------------------------------------
To the best knowledge of the Selling Parties, OSSI neither is nor
has been (by virtue of any action, omission, occurrence of any event, existence
of any circumstances or contract to which it is a party) in violation of any
law, ordinance, regulation, order or decree (including, without limitation, all
regulations of governmental agencies having jurisdiction or supervision over its
business or properties), provided that the Selling Parties shall be obligated to
indemnify and hold Buyer harmless from any liability relating to the operation
of the OSSI Business and the Assets prior to the Closing Date if this statement
is not correct, regardless of knowledge.
6.14. Environmental Matters.
---------------------
(a) Except as disclosed in Schedule 6.14:
(i) Neither the Selling Parties nor, to the best of the
Selling Parties' knowledge, any previous owner,
tenant, occupant, operator or user of any of the Real
Property or Former Real Property (as
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<PAGE> 31
defined below), has engaged in or permitted
any operation or activity at or upon, or any
use or occupancy of, any Real Property or
Former Real Property for the purpose of or
in any way involving the handling,
manufacture, treatment, storage, use,
generation, release, refining, reclaiming,
recycling, dumping or disposal of any
Hazardous Materials (as defined below), on,
under or in any Real Property or Former Real
Property. The Selling Parties have not
transported any Hazardous Materials to, from
or across any Real Property or Former Real
Property. No Hazardous Materials currently
are produced, incorporated in any
construction on, deposited, stored or
otherwise located on, under or in any Real
Property or Former Real Property. The
foregoing shall not be interpreted to apply
(a) to the handling, storage,
transportation, use or sale of petroleum
products to the extent such handling,
storage, transportation, use or sale is
consistent with the operation of those
petroleum dispensing locations that are
included as Assets, and (b) the handling,
storage, transportation, use or sale
of any substance in a manner that is
customarily incidental to the operation of
any retail store that is related to any such
petroleum dispensing locations.
(ii) No Hazardous Materials have migrated from
any Real Property or Former Real Property
to, upon, or beneath other properties, and,
to the best of Selling Parties' knowledge,
no Hazardous Materials have migrated or
threaten to migrate from other properties
to, upon, about or beneath any Real Property
or Former Real Property.
(iii) No underground improvement, including
without limitation treatment or storage tank
of water, gas or oil well, is, nor ever has
been, located on any Real Property or Former
Real Property, except for basements or as
disclosed in Schedule 6.14.
(iv) All Real Property and Former Real Property and all
activities conducted by the Selling Parties on the
Real Property, including without limitation the use,
maintenance and operation of the Real Property,
including the use, maintenance and operation of all
aboveground and underground storage tanks, currently
comply and, at all times have complied, with all
Environmental Requirements (as defined below).
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<PAGE> 32
(v) Neither the Selling Parties nor, to the
best of the Selling Parties' knowledge, any
current or prior owner or occupant of any
Real Property or Former Real Property, has
received any notice or other communication
concerning or has knowledge of (A) any
violation or alleged violation of
Environmental Requirements, whether or not
corrected or (B) any alleged liability for
Environmental Damages (as defined below) in
connection with any Real Property or Former
Real Property or material transported to,
from or across any Real Property or Former
Real Property. No writ, injunction, decree,
order or judgment relating to the foregoing
is outstanding. There is no lawsuit, claim,
proceeding, citation, directive, summons or
investigation pending or threatened against
any of the Selling Parties relating to any
alleged violation of or liability under any
applicable Environmental Requirements or
the presence of any Hazardous Materials.
(vi) To the best of the Selling Parties'
knowledge, there has been no spilling,
leaking, pumping, emitting, emptying,
discharging, escaping, leaching, dumping,
release, or disposing of any Hazardous
Materials into the environment, except as
set forth in Schedule 6.14.
(b) For the purposes of this Agreement:
(i) "Environmental Damages" means all claims, judgments,
damages, losses, penalties, fines, liabilities
(including strict liability), encumbrances, liens,
costs and expenses of defense of a claim (whether or
not such claim is ultimately defeated), good faith
settlements of judgment, and costs and expenses of
reporting, investigating, removing and/or remediating
Hazardous Materials, of whatever kind or nature,
contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including without
limitation reasonable attorneys' fees and disbursements
and consultants' fees, any of which arise out of or
relate to the existence of Hazardous Materials at,
upon, or beneath the Real Property or Former Real
Property, migrating or threatening to migrate from the
Real Property or Former Real Property or transported
to, from, or across any Real Property or Former Real
Property.
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<PAGE> 33
(ii) "Environment Requirements" means all
applicable statutes, regulations, rules,
ordinances, codes, policies, advisories,
actions, licenses, permits, orders,
approvals, plans, authorizations,
concessions, franchises and similar items of
all federal, state and local governmental
branches, agencies, departments,
commissions, boards, bureaus or
instrumentalities having jurisdiction and
all applicable judicial and administrative
and regulatory decrees, judgments and orders
and all covenants running with the land that
relate to the protection of health or the
environment, including without limitation
those that relate to the existence,
handling, manufacture, treatment, storage,
use, generation, release, discharge,
refining, recycling, reclaiming or disposal
of Hazardous Materials.
(iii) "Former Real Property" means any real
property in which the Selling Parties
heretofore held but no longer hold a fee,
leasehold or other legal, beneficial or
equitable interest.
(iv) "Hazardous Materials" means any substance:
(A) the presence of which requires
reporting, investigation, removal or
remediation under any Environmental
Requirement; (B) that is defined as a
"hazardous waste," "hazardous substance" or
"pollutant" or contaminate" under any
Environmental Requirement; (C) that is
toxic, explosive, corrosive, flammable,
ignitable, infectious, radioactive,
reactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated under
any Environmental Requirement; (D) the
presence of which on any Real Property or
Former Real Property causes a nuisance upon
any Real Property or Former Real Property or
to adjacent properties or poses a hazard to
the health or safety of persons on or about
any Real Property or Former Real Property;
(E) the presence of which on adjacent
properties constitutes a trespass by the
Selling Parties or the Company; (F) that
contains gasoline, diesel fuel or other
petroleum hydrocarbons; or (G) that contains
PCBs, asbestos or urea formaldehyde foam
insulation.
(c) The Selling Parties have complied in all material
respects with all Environmental Requirements.
(d) The Selling Parties have furnished the Buyer with
true and complete copies of all claims, complaints,
reports, assessments,
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<PAGE> 34
audits, investigations and other documents in the
possession of or obtainable by the Selling Parties made by,
on behalf of or against the Selling Parties during the past
five (5) years pertaining to Environmental Requirements or
Hazardous Materials.
(e) There is not and has not been, during any period
through and including the Closing Date any substance, the
presence of which on any Real Property or Former Real
Property causes or caused a nuisance upon any Real Property
or Former Real Property or to any other property or
properties.
(f) There is not and has not been during any period
through and including the Closing Date, any substance, the
presence of which on any other property or properties
constitutes or constituted a trespass by the Selling
Parties.
6.15. Title to and Condition of Real Property.
---------------------------------------
(a) Except for the mortgages and other liens listed
and described on Schedule 6.15(a), all of which will be
satisfied, terminated and/or discharged by Selling Parties
on or before the Closing Date, the Selling Parties have
good and marketable title to all of the Real Property
subject to no mortgage, security interest, pledge, lien,
lease, claim, encumbrance or charge, or restraint on
transfer whatsoever.
(b) The buildings, structures and equipment included
in the Real Property have no material defects, are in good
operating condition and repair and have been reasonably
maintained consistent with standards generally followed in
the industry (giving due account to the age and length of
use of same, and ordinary wear and tear), are suitable for
their present uses and, in the case of buildings and other
structures, such buildings and other structures (including
without limitation, the roofs thereof), are structurally
sound.
(c) The buildings and structures included in the Real
Property currently have access to water supply, storm and
sanitary sewer facilities, telephone, gas and electrical
connections, fire protection, drainage and other public
utilities, as is necessary for the conduct of OSSI's
Business.
6.16. Marketable Title to Personal Property; Condition of Personal
-----------------------------------------------------------
Property.
--------
(a) The Selling Parties have good and marketable title
to all of the Personal Property (except for Personal
Property which is described on Schedule 6.16 as being
leased), and, except as set forth in Schedule 6.16, the
Personal Property is subject to no mortgage, pledge, lien,
restriction, claim, encumbrance or security interest. All
encumbrances listed in Schedule 6.16 shall be
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<PAGE> 35
satisfied, discharged and removed prior to Closing unless
Buyer agrees otherwise.
(b) All of the Personal Property is in good operating
condition and repair, subject to normal wear and
maintenance, are useable in the regular and ordinary course
of business and conform to all applicable laws, ordinances,
codes, rules or regulations applicable to the Selling
Parties and relating to their construction, use and
operation.
6.17. Inventory.
---------
The Inventory of the Selling Parties reflected in the December 31,
1999 Balance Sheet consisted of, and such Inventory on hand as of the Closing
Date pursuant to Section 1.5 will consist of, items of a quality and quantity
usable or saleable in the ordinary course of its business and such Inventory has
been valued for purposes of such Balance Sheet, and will be valued on the OSSI's
books at the Closing Date, in accordance with generally accepted accounting
principles and pursuant to Section 1.5.
6.18. Material Contracts.
------------------
Except as set forth in Schedule 6.18, OSSI has no oral or written
(i) employment, severance or collective bargaining or similar agreement with or
relating to any employee or any consulting, brokerage or agency agreement not
terminable without cost on no more than 30 days' notice, (ii) agreement or
arrangement with any officer or director, (iii) agreement, plan or arrangement
providing for any bonus, stock option, stock ownership, stock purchase, stock
appreciation right, pension or retirement benefit, vacation, insurance or other
employee benefit, (iv) agreement, contract, indenture or other instrument
relating to the borrowing of money or the guarantee of any obligation for the
borrowing of money or to the grant of any mortgage, lien, security interest or
other encumbrance in or on any of its property, (v) lease of, or contract for
installment or other deferred purchase or sale of, any real or personal
property, (vi) license of any patent, copyright, trademark, trade secret or
other intellectual property, (vii) agreement or arrangement for the future
purchase or delivery of goods or rendition of service, including without
limitation any such agreement or arrangement with any customer of or supplier to
OSSI, (viii) franchise agreements, (ix) dealer agreements or (x) other contract,
arrangement or commitment which does or may have a material effect on the
business, assets, condition or prospects of OSSI. True copies of all written,
and complete summaries of all oral, agreements, arrangements, plans and other
things referred to in such Schedule (the "Contracts") have been made available
to the Buyer. OSSI is not a party to or bound by any presently existing
agreement or other arrangement which has had, or is anticipated by the Selling
Parties to have, a Material Adverse Effect on OSSI's Business. No event has
occurred which constitutes a default or may result in a right of acceleration,
termination or any similar right by any party (or would, but for the passage of
time or the giving of notice, constitute a default or result in such a right of
acceleration, termination or similar right) under any Contract.
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<PAGE> 36
6.19. Litigation.
----------
Except as set forth in Schedule 6.19, there are no
disputes, claims, actions, suits, litigation, proceedings,
arbitrations or investigations, either administrative or judicial,
pending, or to the best knowledge of the Selling Parties, threatened,
against or affecting the Selling Parties or any of the Assets to be
conveyed hereunder, whether or not fully covered by insurance, or
Selling Parties' ability to consummate the transactions hereunder, at
law or in equity or otherwise before any court or governmental agency
or body, domestic or foreign, or before any arbitrator of any kind.
6.20. Insurance.
---------
Set forth in Schedule 6.20 is a complete list of all insurance
policies (including without limitation fire, casualty, liability, worker's
compensation and product liability) currently held by the Selling Parties
related to the Assets or OSSI's Business and any claims pending by the Selling
Parties under each such policy. True copies of each insurance policy have been
made available to the Buyer. All such insurance policies are in full force and
effect in accordance with their terms, no notice of cancellation has been
received, and there is no existing default or event which, with or without the
giving of notice or lapse of time or both, would constitute a default
thereunder. Such policies are in amounts which are adequate in relation to
OSSI's Business and the Assets and all premiums to date have been paid in full.
The Selling Parties has not been refused any insurance, nor has its coverage
been limited, by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the past five years. The Selling
Parties has not been advised by any of its insurance carriers of any disputes
between the Selling Parties and any insurance carrier regarding coverage,
claims, settlements or premiums.
6.21. Banking Arrangements.
--------------------
Set forth in Schedule 6.21 is listing by Store Premises of the name
and address of each bank in which OSSI has an account.
6.22. Absence of Creditors' Arrangements and Bankruptcies.
---------------------------------------------------
OSSI has no arrangement with creditors not made in the ordinary
course of its business, nor has any involuntary or voluntary petition in
bankruptcy been filed by or against OSSI.
6.23. Employee Benefit Plans.
----------------------
(a) OSSI maintains a defined benefit pension plan
(the "Plan"). Neither OSSI, nor any member of a controlled
group, group of commonly controlled trades or businesses or
affiliated service group (within the meaning of Sections
414(b), (c) or (m) of the Internal Revenue Code) which
includes OSSI (the "Affiliated Companies"), maintains or
has maintained, or has any obligation to
-24-
<PAGE> 37
contribute to, any other employee pension benefit or
employee welfare benefit plan within the meaning of Section
3 of the Employee Retirement Income Security Act of 1974
("ERISA"). The contributions made or required (whether or
not waived) of OSSI for the most recently ended annual
accounting period of the Plan are as set forth on Schedule
6.23. All such contributions which currently are, or within
90 days of the date hereof will become, due from OSSI have
been paid, except as specifically noted on such Schedule.
(b) The Plan is in compliance with all requirements
of federal law. The Plan has no "Accumulated Funding
Deficiency" (within the meaning of Section 302(a)(2) of
ERISA and Section 412(a) of the Internal Revenue Code),
whether or not waived. No material liability to the
Pension Benefit Guaranty Corporation has been, or to the
knowledge of the Selling Parties is expected to be,
incurred with respect to the Plan by OSSI.
6.24. Labor Matters.
-------------
(a) OSSI is not a party to any contract or collective
bargaining agreement with any labor organization except as
disclosed on Schedule 6.24. To the best knowledge of
Selling Parties, no organization or representation question
is pending respecting the employees of OSSI, and no such
question has been raised within the preceding three (3)
years.
(b) All reasonably anticipated obligations of OSSI
whether arising by operation of law, contract, past custom
or otherwise, for unemployment compensation benefits,
pension benefits, salaries, wages, bonuses, sick leave,
vacation and other forms of compensation payable to the
officers, directors and other employees and independent
contractors of OSSI have been paid as of the Closing Date
or adequate accruals therefore have been made, other than
salary accrued in the ordinary course and vacation accrued
in the ordinary course.
(c) There is no controversy pending between OSSI and
any of its employees that individually or in the aggregate
materially affects or may materially affect the Assets,
OSSI or the business, financial condition or results of
operations of OSSI except for worker's compensation and
unemployment compensation claims, all of which are covered
by appropriate insurance coverage. Except as set forth on
Schedule 6.24, to the best knowledge of the Selling
Parties, there is no basis for any claim, grievance,
arbitration, negotiation, suit, action or charge of or by
any employee of OSSI and no complaint is pending against
OSSI before the National Labor Relations Board or any state
or local agency. OSSI has complied, in respect of its
employees, in all material respects with all applicable
statutes, regulations, orders and restrictions of the
United States of America, all states and other subdivisions
thereof, all foreign jurisdictions and all agencies and
instrumentalities of the foregoing.
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<PAGE> 38
(d) OSSI has furnished the Buyer with copies of all
claims, complaints, reports or other documents in such
entity's files concerning such entity or its employees made
by or against such entity during the past five years
pursuant to workers' compensation laws, Title VII of the
Civil Rights Act of 1964, the Occupational Safety and
Health Act of 1970, the National Labor Relations Act of
1935, or any other federal or state laws relating to the
employment of labor.
6.25. Interest in Competitors and Others.
----------------------------------
Except for ownership of less than 1% of the outstanding shares of
stock of any class of any corporation which are listed on the New York Stock
Exchange, the American Stock Exchange or quoted on NASDAQ or listed on Schedule
6.25, none of the Selling Parties has any interest in any Person which (i)
competes in any manner with OSSI or (ii) has an existing contractual
relationship with OSSI.
6.26. Supplies and Vendors.
--------------------
Except as set forth in Schedule 6.26, OSSI has satisfactory
relationships with its vendors, suppliers and contractors, and the Selling
Parties have no reason to believe there will be any adverse change in any of
such relationships, whether by reason of the acquisition of the Assets by the
Buyer or for any other reason.
6.27. Conditions Affecting OSSI.
-------------------------
OSSI has used its best efforts to keep available for Buyer the
services of the employees, agents, customers and suppliers of OSSI. The Selling
Parties do not have any reason to believe that any loss of any agent, customer
or supplier, or other advantageous arrangement, will result because of the
consummation of the transactions contemplated hereby.
6.28. Minute Books, Stock Records, Officers, Directors.
------------------------------------------------
Each of the Orloski Entities has made available for
inspection by the Buyer its minute books and capital stock records,
which contain all of such corporation's minutes and stock records.
Such minute books contain minutes of all meetings of the board of
directors, committees of the board of directors and the shareholders
of such corporation, and such minutes reflect all actions taken at
such meetings and contain references to all matters discussed at such
meetings that may have a Material Adverse Effect on the business of
the Selling Parties.
6.29. Brokers.
-------
The Selling Parties have not made any agreement or taken any action
which may cause anyone to become entitled to a commission as a result of the
transactions contemplated by this Agreement.
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<PAGE> 39
6.30. Full Disclosure.
---------------
No representation or warranty by the Selling Parties contained in
this Agreement and no statement contained in any certificate or other instrument
furnished or to be furnished to the Buyer pursuant hereto or in connection with
the transactions contemplated hereby, contains or at Closing will contain any
untrue statement of a material fact, or omits or will omit at Closing to
state a material fact necessary to provide the Buyer with proper
information as to the Selling Parties, the Assets and OSSI's Business.
ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER
------------------------------------------------------
The Buyer represents, warrants and covenants as follows:
7.1. Organization.
------------
The Buyer is a corporation duly incorporated, validly existing and
presently subsisting under the laws of the State of Delaware and has the
corporate power to engage in the transactions contemplated by this Agreement.
7.2. Authorization.
-------------
The Buyer has taken all such corporate action as may be necessary or
appropriate to enable it to perform its obligations hereunder. This Agreement
when executed and delivered by the Buyer shall be the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
ARTICLE VIII
CONDUCT OF BUSINESS AND AFFAIRS OF OSSI PENDING CLOSING
-------------------------------------------------------
8.1. Conduct of Business Pending Closing.
-----------------------------------
From and after the date hereof to and including the Closing Date,
except as the Buyer may otherwise agree in writing, the Selling Parties will:
(a) Conduct OSSI's Business only in the ordinary
course, including maintaining inventory and parts levels,
consistent with past practices and policies, and not make
any material change in the nature or character of or the
manner of conducting the business conducted by OSSI.
(b) Use their best efforts to preserve OSSI's
organization intact, to keep available to the Buyer the
services of OSSI's present officers and employees and to
preserve for the benefit of the Buyer the goodwill of
OSSI's customers, suppliers and others having business
relations with it.
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<PAGE> 40
(c) Not adopt any amendment to OSSI's Certificate (or
Articles) of Incorporation or its bylaws.
(d) Not transfer any of the Assets other than in the
ordinary course of business or as permitted by Section
8.1(k).
(e) Not permit any of the Assets to be subject to any
mortgage, lien, security interest or other encumbrance,
except for
the encumbrances set forth in Schedules 6.15 and 6.16.
(f) Not enter into any new employee benefit or welfare plan or
arrangement nor make any material modification to any such existing
Plans or arrangements.
(g) Not increase the compensation payable or to become payable
to any officer or to any employee.
(h) Not purchase, lease or otherwise acquire or transfer,
lease or otherwise dispose of any item of Real Property or Personal
Property included in the Assets other than in the ordinary course of
business.
(i) Not make any change in any of the banking and safe deposit
arrangements referred to in Section 6.22.
(j) Not waive any substantial claim or right or terminate any
material contract or commitment (except as specifically provided for
herein).
(k) Not do or omit to do any act nor permit any event to occur
or condition to exist which will result in or cause a breach of any
Contract of OSSI, the breach of which would have a Material Adverse
Effect on OSSI's Business.
(l) Duly comply with all applicable laws to complete validly
the transactions provided for in this Agreement, including without
limitation any law which might, on failure of compliance
therewith, impose any liability on the Buyer for any debts
or obligations of OSSI.
(m) Not take any action that would result in the inaccuracy or
breach at Closing of any of the representations, warranties or
covenants of the Selling Parties set forth in Article VI.
(n) Not (i) enter into any commitment to do any act which
would violate any provision of this Article VIII or (ii) enter into
any contract or commitment, the performance of which may extend
beyond the Closing, except those made in the ordinary course of
business the terms of which are consistent with OSSI's past practice
and reasonable in light of current conditions.
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<PAGE> 41
8.2. Negotiations with Other Parties.
-------------------------------
The Selling Parties will not, and the Majority Shareholders will not
cause or permit the Selling Parties to, cause, permit or authorize any officer,
director, employee or agent to (a) solicit, initiate or encourage submission of
proposals or offers from any Persons relating to any acquisition or purchase of
all or a material amount of the Assets, or any equity interest in, or any
merger, consolidation or business combination with OSSI, (b) participate in any
discussions regarding the foregoing or (c) except as may be required by law
furnish to any Person other than the Buyer or its representatives any
information with respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage any effort or attempt by any other
Person to do any of the foregoing. OSSI will promptly notify the Buyer if it
shall have knowledge of any such proposal or offer, or any expression of
interest in making any such proposal or offer. In determining whether the
conduct sought to be prohibited by this Section 8.2 is required by law, OSSI
shall have been advised by counsel reasonably satisfactory to the Buyer, that
the failure to take such action would, in the opinion of such counsel result in
a breach of fiduciary duty by any such director, officer or agent owed to OSSI
or the shareholders of OSSI. In that event, OSSI may take such actions as it is
advised by such counsel are necessary to avoid such breach of fiduciary duty.
8.3. Best Efforts.
------------
Subject to the terms and conditions of this Agreement, Selling
Parties will use their best efforts to take, or cause to be taken, all actions
to be taken by Selling Parties that are necessary, proper or desirable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including using its best efforts to
obtain promptly all necessary waivers, consents, licenses and approvals and
effecting all necessary registrations and filings.
8.4. Access to Information and Employees.
-----------------------------------
Prior to the Closing, OSSI shall give the Buyer and its authorized
representatives reasonable access to OSSI's employees and related employee files
in order to allow the Buyer's representatives to interview such employees for
the purposes of introducing them to the Buyer, offering them employment with the
Buyer and facilitating their transition from OSSI to the Buyer.
Prior to the Closing Date, Buyer may make, or cause to be made, such
investigation of the Assets and OSSI's financial and legal condition as Buyer
deems necessary or advisable to familiarize itself with the Assets and/or
matters relating to OSSI's Business, history or operation. The Selling Parties
shall permit Buyer and its authorized representatives (including legal counsel
and accountants) to have full access to the Assets and the Selling Parties'
books and records upon not less than twenty-four (24) hours advance notice,
provided such access will not unreasonably disrupt OSSI's Business. The Selling
Parties will furnish, or cause to be furnished, to Buyer such financial and
operating data and other information and copies of documents with respect to
OSSI's Business and the Assets, as Buyer shall from time to time request to
enable the Buyer and its representatives to investigate the affairs of the
elling Parties and the Assets and the accuracy of the representations and
warranties made in this Agreement.
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<PAGE> 42
8.5. Update of Disclosure.
--------------------
(a) Prior to Closing, the Selling Parties shall promptly
notify Buyer in writing of: (i) the discovery by any of the Selling
Parties of any event, condition, fact or circumstance that occurred
or existed on or prior to the date of this Agreement and that caused
or constitutes a material inaccuracy in any representation or
warranty made by the Selling Parties in this Agreement; (ii) any
event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that would cause or constitute
a material inaccuracy in any representation or warranty made by
the Selling Parties in this Agreement if (A) such representation or
warranty had been made as of the time of the occurrence, existence
or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or
existed on or prior to the date of this Agreement; (iii) any event,
condition, fact or circumstance hereafter arising which, if existing
or occurring at the date of this Agreement, would have been required
to be set forth or described in the Selling Parties' Schedules; (iv)
any material breach of any covenant or obligation of the Selling
Parties; and (v) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set
forth in Article IX impossible or unlikely or that has had or could
reasonably be expected to have a Material Adverse Effect on OSSI's
Business. No notification given to Buyer pursuant to this Section
8.5(a) shall limit or otherwise affect (i) any representations,
warranties, covenants or obligations of the Selling Parties
contained in this Agreement or (ii) any of Buyer's rights
with respect to any inaccuracy or breach of such representations,
warranties, covenants or obligations of the Selling Parties
contained in this Agreement.
(b) If any event, condition, fact or circumstance that
is required to be disclosed pursuant to Section 8.5(a)
requires any change in the Selling Parties' Schedules, or
if any such event, condition, fact or circumstance would
require such a change assuming the Selling Parties'
Schedule was dated as of the date of the occurrence,
existence or discovery of such event, condition, fact or
circumstance, then the Selling Parties shall promptly
deliver to Buyer an update to the Selling Parties'
Schedules specifying such change. No such update shall be
deemed to supplement or amend the Selling Parties'
Schedules for the purpose of (i) determining the accuracy
of any of the representations and warranties made by the
Selling Parties in this Agreement, or (ii) determining
whether any of the conditions set forth in Article IX has
be satisfied, nor shall such update affect any of Buyer's
rights with respect to any inaccuracy or breach of such
representations, warranties, covenants or obligations of
Selling Parties contained in this Agreement.
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<PAGE> 43
8.6. Casualty, Risk of Loss.
----------------------
The Selling Parties shall bear the risk of all loss or damage to the
Assets from all causes, until the Closing. If at any time prior to the Closing
any portion of the Assets is damaged or destroyed as a result of fire, other
casualty or for any reason whatsoever, or in the event condemnation or eminent
domain proceedings (or private purchase in lieu thereof) shall be commenced by
any public or quasi-public authority having jurisdiction against all or any part
of the Assets, the Selling Parties shall immediately give notice thereof to
Buyer. Buyer shall have the right, in its sole and absolute discretion, within
ten (10) days of receipt of such notice, to (1) elect not to proceed with the
Closing and terminate this Agreement or (2) proceed to Closing and consummate
the transactions contemplated hereby and receive any and all insurance proceeds
received or receivable by the Selling Parties on account of any such casualty.
8.7. Remediation.
-----------
The Selling Parties, at their expense, shall remediate the
contamination of the well at Bear Creek by either drilling a new well
or installing a filtration system acceptable to Buyer, which will be
completed prior to the Closing Date.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BUYER
------------------------------------------------
The obligations of the Buyer to complete the transactions
contemplated by this Agreement are subject to the fulfillment prior to or at
Closing of the following conditions (any of which conditions may, at its option,
be waived by the Buyer):
9.1. Performance of Agreements.
-------------------------
The Selling Parties shall have performed all agreements and complied
with all conditions required by this Agreement to be performed or complied with
by them at or prior to the Closing, and the Buyer shall have received a
certificate dated as of the Closing Date to that effect signed by the respective
Presidents of the Orloski Entities and by the Majority Shareholders.
9.2. Representations and Warranties.
------------------------------
The representations and warranties of the Selling Parties contained
in this Agreement shall be true and correct at and as of the date of this
Agreement and shall be true and correct at and as of the Closing
Date, and the Buyer shall have received a certificate dated as of the
Closing Date to that effect signed by the respective Presidents of
the Orloski Entities and by the Majority Shareholders.
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<PAGE> 44
9.3. Authorization Documents.
-----------------------
Buyer shall have received copies of the resolutions of each of the
Orloski Entities' respective boards of directors and shareholders authorizing
this Agreement and the transactions contemplated hereby, and Buyer shall have
received a certificate dated as of the Closing Date to that effect signed by the
respective Secretaries of the Orloski Entities.
9.4. Good Standing Certificate.
-------------------------
Buyer shall have received copies of the respective Articles of
Incorporation of each of the Orloski Entities certified by the Secretary of the
State of Pennsylvania and Good Standing Certificates of each of the Orloski
Entities dated within ten (10) days of the Closing Date issued by the Secretary
of the State of Pennsylvania.
9.5. No Material Adverse Change.
--------------------------
Since the Balance Sheet Date there shall not have occurred any
material adverse change in the financial or other condition, of the Assets, or
the business, properties, results of operations or prospects of OSSI, and the
Buyer shall have received a certificate dated as of the Closing Date to that
effect signed by the respective Presidents or any Vice Presidents and the chief
financial officers of the Orloski Entities and by the Majority Shareholders.
9.6. No Adverse Legal Proceedings.
----------------------------
No injunction, restraining order or other order issued by a court of
competent jurisdiction or governmental authority that prohibits the consummation
of any of the transactions contemplated by this Agreement shall be in effect,
and there shall not be pending any administrative, regulatory or judicial
proceeding which seeks to prohibit, restrain or invalidate the consummation of
any such transaction or to recover damages from any of the parties hereto by
reason thereof.
9.7. Opinion of the Selling Parties' Counsel.
---------------------------------------
The Selling Parties shall have delivered to the Buyer an opinion of
the Selling Parties' counsel, Mylotte, David & Fitzpatrick, dated the Closing
Date, as to those matters and in such form as shall be satisfactory to Buyer and
Buyer's counsel.
9.8. HSR Act Matters.
---------------
All applicable waiting periods under the HSR Act relating to the
transactions contemplated by this Agreement shall have expired or been
terminated without the imposition of any conditions.
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<PAGE> 45
9.9. Title Insurance.
---------------
Buyer, after requesting such, shall have obtained owner's title
policies (owner's ALTA Policy Form B, as amended 1992) with respect to the Real
Property from the title company selected by Buyer revealing no exceptions to
coverage except such exceptions as are acceptable to Buyer in its sole
discretion.
9.10. Survey.
------
Buyer shall have obtained a current as-built survey of each parcel
of Real Property, which shall be to ALTA standards and shall be certified to
Buyer, the title company insuring title and Buyer's lenders, and shall show no
defects or encroachments in the applicable Real Property.
9.11. Deeds.
-----
The Selling Parties shall have delivered the necessary recordable
special warranty deeds for the Real Property.
9.12. Possession.
----------
Possession of the Real Property shall be or shall have been
delivered to Buyer as provided in this Agreement, free and clear of any leases,
other than any lease which may be an Assumed Contract.
9.13. Inspection Reports and Surveys.
------------------------------
Buyer shall have received, prior to the scheduled Closing Date, all
inspection reports and surveys relating to the Real Property from each local,
state and federal authority which are available to the Selling Parties.
9.14. Financing.
---------
Buyer shall have obtained sufficient financing to complete the
transactions contemplated by this Agreement on terms satisfactory to Buyer in
its sole discretion (Buyer acknowledges that it has accepted a commitment letter
for financing prior to the execution of this Agreement).
9.15. Consents.
--------
The Buyer shall have received the consents of each of the Persons
listed on Schedule 6.7 to the consummation by the Buyer of the transactions
contemplated by this Agreement.
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<PAGE> 46
9.16. Assets Transferred at Closing.
-----------------------------
Selling Parties shall have delivered to Buyer possession of the
Assets, free and clear of all liens, security interests, encumbrances, claims
and other exceptions of any kind whatsoever, together with such instruments of
sale and transfer, including without limitation, a Bill of Sale and an
Assignment and Assumption Agreement in substantially the forms of Exhibits B and
C, respectively, attached hereto and made a part hereof.
9.17. Board of Directors Approval.
---------------------------
Buyer's board of directors shall have approved this
Agreement and the transactions contemplated hereby.
9.18. Due Diligence.
-------------
Buyer shall have satisfactorily completed, as determined in Buyer's
sole discretion, its due diligence review of OSSI, OSSI's Business and the
Assets as described in Section 8.4.
9.19. PA Bulk Sales Notices.
---------------------
The Orloski Entities shall have delivered, at least ten (10) days
prior to the Closing Date:
(a) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
Ann 7240 regarding the Orloski Entities' liability for
sales and use tax;
(b) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
Ann 7321.1 regarding the Orloski Entities' liability for
personal income tax withholding;
(c) to the Pennsylvania Department of Revenue, a
notice in accordance with the provisions of 72 Pa. Stat.
Ann 1403 regarding the Orloski Entities' liability for
corporate taxes; and
(d) to the Pennsylvania Department of Labor and
Industry, a notice in accordance with the provisions of 43
Pa. Stat. Ann. 788.3 regarding the Orloski Entities'
liability for unemployment compensation taxes.
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<PAGE> 47
9.20. Tax Lien Certificates.
---------------------
The Orloski Entities shall deliver to Buyer, at least five (5) days
prior to the Closing Date, tax lien certificates from the Pennsylvania
Department of Revenue showing no liens against any of the Orloski Entities.
9.21. Tax Clearance Certificates.
--------------------------
The Orloski Entities shall file with the Pennsylvania Department of
Revenue Applications For Tax Clearance Certificates within ten (10) days of the
Closing Date and shall deliver Tax Clearance Certificates from the Pennsylvania
Department of Revenue to Buyer upon issuance of such certificates.
9.22. Non Competition Agreement.
-------------------------
The Majority Shareholder and the other shareholders of the Orloski
Entities listed on Schedule 6.2 shall have executed and delivered a certain Non
Competition Agreement in substantially the form attached hereto as Exhibit D.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING PARTIES
----------------------------------------------------------
The obligations of the Selling Parties to complete the
Transactions contemplated by this Agreement are subject to the
fulfillment prior to or at Closing of the following conditions (any
of which conditions may, at its option, be waived by the Selling
Parties):
10.1. Performance of Agreements.
-------------------------
The Buyer shall have performed all agreements and complied with all
conditions required by this Agreement to be performed or complied with by it at
or prior to the Closing, and the Selling Parties shall have received a
certificate dated as of the Closing Date to that effect signed by an executive
officer of the Buyer.
10.2. Representations and Warranties of the Buyer.
-------------------------------------------
The representations and warranties of the Buyer contained in this
Agreement hereof shall be true and correct at and as of the date of this
Agreement and shall be true and correct at and as of the Closing Date, and the
Selling Parties shall have received a certificate dated as of the Closing Date
to that effect signed by an executive officer of Buyer.
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<PAGE> 48
ARTICLE XI
INDEMNIFICATION REMEDIES
------------------------
11.1. Indemnification by the Selling Parties.
--------------------------------------
The Selling Parties, jointly and severally, shall indemnify and hold
the Buyer harmless from and against any damage (including without limitation
incidental and consequential damages), deficiency, cost, expense or diminution
of value, whether or not involving a third-party claim (a "Loss") resulting from
(i) any misrepresentation, any breach of any representation or warranty of
Selling Parties contained herein or in any schedule or document delivered or to
be delivered pursuant to this Agreement or any failure to perform any covenant
or obligation of the Selling Parties contained herein or in any document
delivered or to be delivered pursuant to this Agreement; (ii) any liability or
alleged liability of Selling Parties that is not expressly assumed by Buyer
pursuant to the terms of this Agreement, including but not limited to, any Loss
related to the environmental conditions at the Hazelton Store Premises located
at 22nd and North Church Street, Hazelton, Pennsylvania 18201, any Loss related
to any outstanding litigation between OSSI and its present or future employees
and any Loss related to any benefits, severance or salary due to any OSSI
employees on or before the Closing Date; (iii) the failure to comply with any
applicable bulk sales law, including but not limited to, amounts of any kind or
character, determined due to local, state or federal taxing authorities; (iv)
any shortfall in payment of the notes receivable listed on Schedule 1.1(l); (v)
any Loss relating to the parking lot and driveway for the Midway store in
Wyoming, PA; or (vi) any claims, actions, judgments, costs and expenses incident
to the foregoing (including without limitation costs of investigation and
reasonable attorneys' fees). Notwithstanding the foregoing, this Paragraph 11.1
shall not apply to any breach of any representation or warranty set forth in
Section 6.14.
11.2. Indemnification by the Buyer.
----------------------------
The Buyer will indemnify and hold the Selling Parties harmless from
and against any Loss resulting from (i) any misrepresentation, any breach of any
representation or warranty of the Buyer contained herein or in any schedule or
document delivered or to be delivered pursuant to this Agreement or the failure
to perform any obligation of the Buyer contained herein or in document delivered
or to be delivered pursuant to this Agreement; (ii) any liability of OSSI with
respect to the Assumed Contracts for obligations accruing after Closing; or (ii)
any claims, actions, judgments, costs and expenses incident to the foregoing
(including without limitation costs of investigation and reasonable attorneys'
fees).
11.3. Determination of Losses.
-----------------------
Losses shall be determined taking into account the actual
amount of damage, deficiency, cost or expense incurred or suffered or the
diminution of value of any Asset by reason of the event or condition giving
rise to the obligation to indemnify. If Buyer suffers damage caused by any
inaccuracy or misstatement in the audited financial statements of OSSI as at
December 31, 1999
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<PAGE> 49
which adversely affects the sales, earnings or cash flow of Selling Parties or
the Assets, then the Loss shall be calculated as the amount of the liability
multiplied by seven (7). Notwithstanding the forgoing, this Paragraph 11.3
shall not apply to any breach of any representation or warranty set forth in
Section 6.14.
11.4. Procedures Relating to Indemnification for Third Party Claims under
-------------------------------------------------------------------
Sections 11.1 and 11.2.
----------------------
(a) A party seeking indemnification pursuant to
Sections 11.1 or 11.2 (an "Indemnified Party") with respect
to any claim or assessment, or the commencement of any
action, suit, audit or proceeding, by a third party in
respect of which indemnity may be sought hereunder
(collectively, a "Third Party Claim") shall give prompt
notice to the party from whom such indemnification is
sought (the "Indemnifying Party") of the assertion of such
Third Party Claims and will give the Indemnifying Party
such information with respect thereto as the Indemnifying
Party may reasonably request, but no failure to give such
notice shall relieve the Indemnifying Party of any
liability hereunder (except to the extent the Indemnifying
Party has suffered actual prejudice thereby). The
Indemnifying Party shall have the right, exercisable by
written notice to the Indemnified Party (which notice shall
state that the Indemnifying Party expressly agrees that, as
between the Indemnifying Party and the Indemnified Party,
the Indemnifying Party shall be solely obligated to satisfy
and discharge the Third Party Claim) within ten (10) days
of receipt of notice from the Indemnified Party of the
commencement of or assertion of any Third Party Claim, to
assume the defense of such Third Party Claim, using counsel
selected by the Indemnifying Party and reasonably
acceptable to the Indemnified Party; provided, that the
Indemnifying Party shall not have the right to assume a
Third Party Claim if (i) the named parties to any such
action (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and (ii) the
Indemnified Party shall have been advised by counsel in
writing that under applicable standards of professional
responsibility, a conflict will arise in the event both the
Indemnified Party and the Indemnifying Party are
represented by the same counsel with respect to the Third
Party Claim, in which case such Indemnified Party shall
have the right to participate in the defense of such Third
Party Claim and all Losses in connection therewith shall be
reimbursed by the Indemnifying Party. In addition, if the
Indemnifying Party fails to give the Indemnified Party the
notice complying with the provisions stated above within
the stated time period, the Indemnified Party shall have
the right to assume control of the defense of the Third
Party Claim and all Losses in connection therewith shall be
reimbursed by the Indemnifying Party upon demand of the Indemnified
Party.
(b) If at any time after the Indemnifying Party
assumes the defense of a Third Party Claim any of the
conditions set forth in clauses (i) or (ii) of Section
11.4(a) above come into existence,
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<PAGE> 50
the Indemnified Party shall have the same rights as set
forth above as if the Indemnifying Party never assumed the
defense of such claim.
(c) The Indemnifying Party or the Indemnified Party,
as the case may be, shall in any event have the right to
participate, at its own expense, in the defense of any
Third Party Claim which the other is defending.
(d) The Indemnifying Party, if it shall have assumed
the defense of any Third Party Claim in accordance with the
terms hereof, shall have the right, upon thirty (30) days
prior written notice to the Indemnified Party, to consent
to the entry of judgment with respect to, or otherwise
settle such Third Party Claim unless (i) the Third Party
Claim involves equitable or other non-monetary damages or
(ii) in the reasonable judgment of the Indemnified Party
such settlement would have a continuing Material Adverse
Effect on the Indemnified Party's business (including any
material impairment of its relationships with customers
and suppliers), in which case such settlement may be made
only with the written consent of the Indemnified Party,
which consent shall not be unreasonably withheld.
(e) Whether or not the Indemnifying Party chooses to
defend or prosecute any claim involving a third party, all
the parties hereto shall cooperate in the defense or
prosecution thereof and shall furnish such records,
information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals as may
be reasonably requested in connection therewith.
11.5. Nature and Survival of Representations
--------------------------------------
All statements contained in any certificate or other instrument
delivered by or on behalf of the Selling Parties pursuant to this Agreement or
in connection with the transactions contemplated hereby shall be deemed
representations and warranties by the Selling Parties hereunder, and all
statements contained in any certificate or other instrument delivered by or on
behalf of the Buyer pursuant to this Agreement shall be deemed representations
and warranties by the Buyer hereunder. Any claim for indemnification under this
Article XI must be asserted within two years following the Closing Date except
that the following representations and warranties shall survive and
indemnification claims may be asserted based upon breach of such representations
and warranties for the applicable statute of limitations periods: Sections 6.6
(No Violation of Law), 6.9 (No Undisclosed Liabilities), 6.11 (Tax
Payments), 6.14 (Environmental Matters), 6.15, subparagraph (a) only
(Title to Real Property), 6.16 (Marketable Title to Personal
Property), 6.19 (Litigation) and 6.23 (Employee Benefit Plans).
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<PAGE> 51
ARTICLE XII
CERTAIN POST-CLOSING MATTERS
----------------------------
12.1. Availability of Records.
-----------------------
For six (6) years after the Closing at the request and expense (for
storage and disposal) of the Selling Parties, the Buyer will make available to
the Selling Parties and their representatives the records relating to OSSI's
Business acquired by the Buyer pursuant hereto, for inspection and copying at
reasonable times for purposes (which shall be specified in the request therefor)
of preparation of tax returns or reports or responding to an audit thereof or
other reasonable business purpose. The Buyer will make available at no cost to
the Selling Parties such financial, accounting and other personnel employed by
the Buyer as may be reasonably necessary to enable the Selling Parties to
prepare such tax, accounting and financial reports as may be reasonably
requested by Selling Parties in connection with winding up its involvement in
the Seller's Business.
12.2. Collection of Accounts Receivable.
---------------------------------
(a) Buyer will use reasonable efforts to collect all
Accounts Receivable. In addition, Buyer shall assist OSSI
by allowing examination by OSSI's authorized
representatives of relevant documentation in Buyer's
possession after the Closing Date, and by transferring to
OSSI any payments Buyer may receive from any source
whatsoever concerning OSSI's recovery of Accounts
Receivable as provided below. Any payments received by
Buyer from any payors with respect to the Accounts
Receivable will be transferred to OSSI within ten (10) days
after receipt thereof by Buyer. Any payments made by such
payors and specified as applying to certain time periods
either preceding or following the Closing Date shall be
applied to accounts receivables relating to such time
periods.
(b) All OSSI employees who have previously been
involved in the collection of its Accounts Receivable and
who do not become Transferred Employees shall assist Buyer
in the collection of the Accounts Receivable for sixty (60)
days after the Closing Date. Such OSSI employees shall not
be employees or agents of Buyer and shall not be entitled
to any of Buyer's employee benefits. OSSI shall pay all
costs associated with such employees' services.
(c) Except as hereinabove provided, the collection of
any Accounts Receivable due OSSI that have not been
collected by Buyer or OSSI within sixty (60) days after the
Closing Date shall become the sole responsibility of OSSI,
and Buyer shall have no further obligation to assist OSSI
with respect to collection thereof.
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<PAGE> 52
ARTICLE XIII
TERMINATION OF AGREEMENT
------------------------
13.1. Termination.
-----------
This Agreement may be terminated and the transactions contemplated
hereby abandoned:
(a) by mutual consent of Buyer and the Selling Parties
at any time prior to the Closing for any reason;
(b) by written notice from Buyer to the Selling
Parties (i) if a breach by any of the Selling Parties of
any of their representations, warranties or agreements
contained in this Agreement occurs which is not cured
within ten (10) days after written notice of such breach is
given to the party committing such breach; or (ii) if the
conditions set forth in Article IX have not been satisfied
on or before May 31, 2000, unless expressly waived by
Buyer; provided, however, that the right to terminate this
Agreement under this Section 13.1(b)(ii) shall not be
available to Buyer if a breach by Buyer of any of its
representations, warranties or agreements contained in this
Agreement has been the cause of or resulted in the failure
of the Closing to occur on or before such date.
(c) by written notice from the Selling Parties to
Buyer (i) if a breach by any of Buyer of any of its
representations, warranties or agreements contained in this
Agreement occurs which is not cured within ten (10) days
after written notice of such breach is given to the party
committing such breach; or (ii) if the conditions set forth
in Article X have not been satisfied on or before May 31,
2000, unless expressly waived by the Selling Parties;
provided, however, that the right to terminate this
Agreement under this Section 13.1(c)(ii) shall not be
available to the Selling Parties if a breach by Selling
Parties of any of their representations, warranties or
agreements contained in this Agreement has been the cause
of or resulted in the failure of the Closing to occur on or
before such date.
13.2. Effect of Termination.
---------------------
In the event that (i) this Agreement is terminated by Selling
Parties for any reason other than pursuant to Section 13.1(c) hereof
or Selling Parties otherwise fail to consummate the transaction
contemplated hereunder, and (ii) within a one-year period following
termination of this Agreement, any of the Selling Parties enter into any letter
of intent or similar document or any agreement to sell, lease, exchange or
otherwise transfer more than 50% of the assets of Selling Parties , or a sale,
merger, consolidation, share exchange, business combination or other similar
transaction transferring beneficial or record ownership or control of more than
50% of the equity securities of Selling
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<PAGE> 53
Parties (excluding transfers among Orloski family members or family trusts),
then Selling Parties will pay Buyer, within one (1) business day following the
date of termination, a break-up fee in the amount of $2,500,000, such fee being
in the nature of liquidated damages as exclusive compensation to Buyer for any
and all claims and losses which Buyer has or may have incurred in connection
with this Agreement and the transactions contemplated hereby.
Selling Parties have agreed to this provision in order to induce
Buyer to enter into this Agreement and as a means of compensating
Buyer for the substantial direct and indirect monetary and other
costs incurred or to be incurred in connection with this Agreement
and the transactions contemplated hereby and for the loss of its
ability to pursue other advantageous transactions and the potential
adverse consequences if the transactions contemplated by this
Agreement are not completed.
ARTICLE XIV
MISCELLANEOUS
-------------
14.1. Governing Law
-------------
This Agreement will be governed by the laws of the Commonwealth of
Pennsylvania without regard to Pennsylvania's conflict of laws principles.
14.2. Parties in Interest
-------------------
This Agreement will be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors and assigns. Neither
party hereto may assign its interest under this Agreement to any other Person
without the prior written consent of the other party, except that Buyer may
assign its rights hereunder to an affiliate of Buyer.
14.3. No Third Party Beneficiaries.
----------------------------
Nothing in this Agreement is intended to create rights enforceable
against any party hereto by any so-called third party beneficiary, and it is
expressly intended that no covenant herein shall be enforceable by any employee
or former employee of the Selling Parties, any party to a contract (other than
this Agreement) or other arrangement with the Selling Parties or any creditor of
the Selling Parties.
14.4. Entire Agreement.
----------------
This Agreement contains the entire agreement among the parties
hereto with respect to the sale and purchase of the Assets and the other
transactions contemplated herein and supersedes any prior agreements or
understandings between or among any of the parties hereto relating to the
subject matter hereof.
14.5. Notices
-------
All notices and other communications hereunder or in connection
herewith shall be in writing and shall be deemed to have been duly given if
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<PAGE> 54
delivered (which may be by facsimile or other electronic transmission) or mailed
in the continental United States by registered or certified mail, return receipt
requested, to a party at the following address, or to such other address as such
party may hereafter specify by notice:
If to the Selling Parties to:
Orloski Service Station, Inc.
508 Blackman Street, Box 313
Wilkes-Barre, PA 18703
Attention: Frank R. Orloski, Chairman and CEO
With a copy to:
Robert J. Gillespie, Jr., Esquire
Mylotte, David & Fitzpatrick
Suite 200, 15 Public Square
Wilkes Barre, PA 18701
If to the Buyer to:
Uni-Marts, Inc.
477 East Beaver Avenue
State College, PA 16801
Attention: Henry D. Sahakian, Chairman and CEO
With a copy to:
David S. Antzis, Esquire
Saul, Ewing, Remick & Saul LLP
1055 Westlakes Drive, Suite 150 Berwyn, PA 19312
14.6. Headings and Titles
-------------------
The headings and titles of Articles, Sections and the like in this
Agreement are inserted for convenience of reference only, form no part of this
Agreement and shall not be considered for purposes of interpreting or construing
the text hereof.
14.7. Modification
------------
No amendment or modification of or supplement to this Agreement will
be effective unless it is in writing and duly executed by the party to be
charged thereunder.
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<PAGE> 55
14.8. Counterparts
------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
ARTICLE XV
ENVIRONMENTAL INDEMNIFICATION REMEDIES
--------------------------------------
15.1. Indemnification by the Selling Parties.
--------------------------------------
Subject to the limitations set forth in Paragraphs 15.1(a),
(b), and (c), the Selling Parties, jointly and severally,
shall indemnify and hold the Buyer harmless from and
against any Loss resulting from (i) any misrepresentation,
any breach of any representation or warranty of Selling
Parties contained in Section 6.14, or any failure to
perform any covenant or obligation of the Selling Parties
contained in Section 6.14, and (ii) any claims, actions,
judgments, costs and expenses incident to the foregoing
(including without limitation costs
of investigation and reasonable attorneys' fees). Losses
identified in this Paragraph shall be known as
"Environmental Losses."
(a) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent that Buyer (i) is
reimbursed for such Environmental Loss by the
Pennsylvania Underground Storage Tank Indemnification
Fund (the "Tank Fund") established pursuant to the
Storage Tank and Spill Prevention Act of 1989, 32 P.S.
6021.101 et seq., as amended (the "Act"), or (ii)
Buyer is not reimbursed for such Environmental Loss by
the Tank Fund because it does not remain in compliance
with the Act after Closing. Within fourteen (14) days
after receipt of notice from Buyer under Paragraph
15.3(a), Selling Parties shall notify Buyer as to
whether Selling Parties contend that the alleged
Environmental Loss is covered by the Tank Fund, and
Buyer shall thereafter diligently pursue recovery from
such Tank Fund with respect to such Environmental Loss. Selling
Parties shall not have an obligation to indemnify and hold
Buyer harmless with respect to such Environmental Loss
unless and to the extent that the Tank Fund formally
determines that Buyer is not entitled to
indemnification from the Tank Fund. If any such claim
by Buyer against the Tank Fund is denied in whole or
in part, Buyer shall share with Selling Parties all
reports submitted by Buyer and
written communications received from regulatory
authorities by Buyer in connection with such claim.
-43-
<PAGE> 56
(b) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent Selling Parties can
show that such Environmental Loss resulted from any
release of Hazardous Substances caused by Buyer.
Within fourteen (14) days after receipt of notice
from Buyer that a claim against the Tank Fund has been
denied in whole or in part, Selling Parties shall
notify Buyer as to whether Selling Parties contend
that the alleged Environmental Loss resulted from any
release of Hazardous Substances caused by Buyer, and
shall thereafter have the right to have an independent
arbitrator (that is selected by agreement between the
Selling Parties and Buyer) determine the extent to
which the Environmental Loss resulted from any release
of Hazardous Substances caused by Buyer. The
prevailing party in the arbitration shall pay the
reasonable attorneys' fees of the other party that are
incurred as part of the arbitration process. The
arbitration process shall be completed within ninety
(90) days from the date of notice from Selling Parties
to Buyer that Selling Parties contend that the
Environmental Loss resulted from a release of Hazardous
Substances caused by Buyer. Selling Parties shall comply with
their obligations under this Article with respect to any
Environmental Loss until and unless the arbitrator
rules in Selling Parties' favor.
(c) Selling Parties shall not be required to indemnify
and hold the Buyer harmless with respect to any
Environmental Loss to the extent tha
tsuchEnvironmental Loss exceeds the amount in the
Indemnity Escrow Fund.
15.2. Determination of Environmental Losses.
-------------------------------------
Environmental Losses shall be determined taking into account the
actual amount of damage, deficiency, cost or expense incurred or suffered.
-44-
<PAGE> 57
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
UNI-MARTS, INC.
/S/ HENRY D. SAHAKIAN
By:-------------------------------
Henry D. Sahakian
Chairman and CEO
ORLOSKI SERVICE STATION, INC.
/S/ FRANK R. ORLOSKI
By:-------------------------------
Frank R. Orloski
Chairman and CEO
GRACEDALE PROPERTIES, INC.
/S/ FRANK R. ORLOSKI
By:------------------------------
Frank R. Orloski
Chairman and CEO
BLAKESLEE CORNER, INC.
/S/ FRANK R. ORLOSKI
By:-------------------------------
Frank R. Orloski
Chairman and CEO
/S/ FRANK R. ORLOSKI
---------------------------------
Frank R. Orloski
/S/ ADELINE M. ORLOSKI
---------------------------------
Adeline M. Orloski
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<PAGE> 58
ADDENDUM TO ASSET PURCHASE AGREEMENT
Among
UNI-MARTS, INC.
AND
ORLOSKI SERVICES STATION, INC.,
GRACEDALE PROPERTIES, INC.,
BLAKESLEE CORNER, INC.,
AND
FRANK R. ORLOSKI AND ADELINE M. ORLOSKI
The Original Agreement dated as of February 23, 2000
This Addendum dated as of April 2, 2000
<PAGE> 59
THIS ADDENDUM TO AN ASSET PURCHASE AGREEMENT, dated February 23, 2000, is
made among UNI-MARTS, INC., a Delaware corporation, or its assigns ("Buyer"),
ORLOSKI SERVICE STATION, INC., a Pennsylvania Corporation ("OSSI"), GRACEDALE
PROPERTIES, INC., a Pennsylvania Corporation ("Gracedale"), BLAKESLEE
CORNER, INC., a Pennsylvania Corporation ("Blakeslee") (OSSI,
Gracedale and Blakeslee are collectively referred to herein as the
"Orloski Entities"), FRANK R. ORLOSKI AND ADELINE M. ORLOSKI
(collectively, the "Majority Shareholders") (the Orloski Entities and
Majority Shareholders are collectively referred to herein as the
"Selling Parties").
BACKGROUND
A. The Selling Parties entered into an Asset Purchase Agreement
dated February 23, 2000 ("Original Asset Purchase Agreement") to sell
certain parcels of real property and improvements as well as other
assets of OSSI to the Buyer.
B. One of the properties to be conveyed is a parcel of 1.84
acres located in Rice Township, Luzerne County, Pennsylvania, more
fully described as Uni-Mart Parcel "A", copy of the description thereof is
attached hereto and made a part hereof and marked Exhibit "A".
<PAGE> 60
C. That parcel is part of a larger parcel containing
approximately 16.73 acres of land, more or less, more fully described
in a Deed of Frank R. Orloski, Sr., and Adeline M. Orloski and Frank
R. Orloski, Sr., and Adeline M. Orloski of Wilkes-Barre, Luzerne County,
Pennsylvania and attached hereto as Exhibit "B".
D. A sub-division plan has been filed for that parcel and said
subdivision plan is expected to be signed and filed shortly after the
closing under the Asset Purchase Agreement.
NOW, THEREFORE, intending to be legally bound hereby, the
parties agree as follows:
1. The purchase price defined in Section 2.1 of the Original
Asset Purchase Agreement shall be reduced by the sum of
$1,454,600.00.
2. The Majority Shareholders shall enter into a Lease for the parcel
described in Exhibit "A" with the Buyer for a period of twenty (20) years in the
form attached hereto and made a part hereof and marked Exhibit "C".
<PAGE> 61
3. That promptly upon receipt of all approvals for the
subdivision and the expiration of any appeal period and, in no event,
later than five (5) months later than the closing on the Original Asset Purchase
Agreement, the Majority Shareholders shall convey to the Buyer, subject to all
of the covenants and conditions of the Original Asset Purchase Agreement, the
land described in Parcel "A" for the same purchase price under the Original
Asset Purchase Agreement was reduced.
4. If the Majority Shareholders are unable to so convey the
property within a period of five (5) months then, in that event, the
Lease shall remain in full force and effect and the Buyer shall have
the option to purchase Parcel "A" anytime during the next seven (7)
months for the purchase price hereintofore described at its option,
upon the same terms and conditions as set forth in the Original Asset
Purchase Agreement.
5. In all other respects the parties hereto confirm and affirm
the conditions and covenants of the Original Asset Purchase Agreement
dated February 23, 2000.
<PAGE> 62
IN WITNESS WHEREOF, the parties have executed this Addendum as
of the date first above written.
UNI-MARTS, INC.
/S/ HENRY D. SAHAKIAN
By: --------------------------------
Henry D. Sahakian
Chairman and CEO
ORLOSKI SERVICE STATION, INC.
/S/ FRANK R. ORLOSKI
By: --------------------------------
Frank R. Orloski
Chairman and CEO
GRACEDALE PROPERTIES, INC.
/S/ FRANK R. ORLOSKI
By: --------------------------------
Frank R. Orloski
Chairman and CEO
BLAKESLEE CORNER, INC.
/S/ FRANK R. ORLOSKI
By: --------------------------------
Frank R. Orloski Chairman
and CEO
/S/ FRANK R. ORLOSKI
------------------------------------
Frank R. Orloski
/S/ ADELINE M. ORLOSKI
-------------------------------------
Adeline M. Orloski
<PAGE> 97
EXHIBIT 20.2
LOAN AGREEMENT
(Funding)
THIS LOAN AGREEMENT (this "Agreement") is made as of April 21,
2000, by and between FFCA FUNDING CORPORATION, a Delaware orporation
("FFCA"), whose address is 17207 North Perimeter Drive, Scottsdale,
Arizona 85255, and UNI REALTY OF LUZERNE, L.P., a Delaware limited
partnership ("Debtor"), whose address is 477 East Beaver Avenue,
State College, Pennsylvania 168015690.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms
used in this Agreement shall have the meanings set forth in Section
1. Debtor has requested from FFCA, and applied for, the Loans to
provide long-term financing for the Premises, and for no other
purpose whatsoever. Each Loan will be evidenced by a Note and
secured by a first priority security interest in the corresponding
Premises pursuant to a Mortgage. FFCA has committed to make the
Loans pursuant to the terms and conditions of the Commitment, this
Agreement and the other Loan Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following
meanings for all purposes of this Agreement:
"Action" has the meaning set forth in Section 10.A(4).
"Affiliate" means any Person which directly or indirectly
controls, is under common control with, or is controlled by any other
Person. For purposes of this definition, "controls", "under common
control with" and "controlled by" means the possession, directly or
indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether
through ownership of voting securities or otherwise.
"Business Day" means any day on which FFCA is open for business
other than a Saturday, Sunday or a legal holiday, ending at 5:00 PM
Phoenix, Arizona time.
"Capital Lease" has the meaning set forth in Section 7.B.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec.
101 et seq., as amended.
<PAGE> 98
"Commitment" means that certain Commitment Letter dated February
4, 2000 (as amended February 28, 2000), between FFCA and Lessee, and
any amendments or supplements thereto.
"Counsel" means legal counsel to Debtor and Lessee, licensed in
the state(s) in which (i) the Premises are located, (ii) Debtor and
Lessee are incorporated or formed and (iii) Debtor and Lessee reside
or maintain their chief executive offices, as selected by Debtor and
approved by FFCA.
"Debt" has the meaning set forth in Section 7.B.
"Debtor Entities" means, collectively, Debtor and Lessee and any
Affiliate of Debtor and Lessee.
"Default Rate" has the meaning set forth in the Notes.
"Depreciation and Amortization" has the meaning set forth in
Section 7.B.
"Disclosures" has the meaning set forth in Section 14.P.
"Environmental Condition" means any condition with respect to
soil, surface waters, groundwatrs, land, stream sediments, surface or
subsurface strata, ambient air and any environmental medium
comprising or surrounding any of the Premises, whether or not yet
discovered, which could or does result in any damage, loss, cost,
expense, claim, demand, order or liability to or against Debtor,
Lessee or FFCA by any third party (including, without limitation, any
Governmental Authority), including, without limitation, any condition
resulting from the operation of Debtor's or Lessee's business at the
Premises and/or the operation of the business of any other property
owner or operator in the vicinity of the Premises and/or any activity
or operation formerly conducted by any person or entity on or off the
Premises.
"Environmental Indemnity Agreement" or "Environmental Indemnity
Agreements" means, as the context may require, the environmental
indemnity agreement dated as of the date of this Agreement to be
executed by Debtor for the benefit of the Indemnified Parties and
such other parties as are identified in such agreement with respect
to a Premises or the environmental indemnity agreements dated as of
the date of this Agreement to be executed by Debtor for the benefit
of the Indemnified Parties and such other parties as are identified
in such agreement with respect to all of the Premises, as the same
may be amended from time to time. An Environmental Indemnity
Agreement will be executed for each Premises.
"Environmental Insurer" means American International Specialty
Lines Insurance Company or such other environmental insurance company as
FFCA may select.
"Environmental Laws" means any present and future federal, state
and local laws, statutes, ordinances, rules, regulations and the like, as well
as common law, relating to Hazardous Materials, Regulated Substances or USTs
and/or the protection of human health or the environment by reason of a Release
or a Threatened Release of Hazardous Materials or Regulated Substances or
relating to liability for or costs of Remediation or prevention of Releases.
"Environmental Laws" includes, but is not limited to, the following statutes, as
amended, any
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<PAGE> 99
successor thereto, and any regulations, rulings, orders or decrees
promulgated pursuant thereto, and any state or local statutes, ordinances,
rules, regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act;
the Emergency Planning and Community Right-to-Know Act; the Hazardous
Materials Transportation Act; the Resource Conservation and Recovery
Act (including but not limited to Subtitle I relating to USTs); the
Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the
Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution
Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act;
and the River and Harbors Appropriation Act. "Environmental Laws"
also includes, but is not limited to, any present and future federal,
state and local laws, statutes, ordinances, rules, regulations and
the like, as well as common law: conditioning transfer of property
upon a negative declaration or other approval of a Governmental
Authority of the environmental condition of the property; requiring
notification or disclosure of Releases or other environmental
condition of the Premises to any Governmental Authority or other
person or entity, whether or not in connection with transfer of title
to or interest in property; imposing conditions or requirements
relating to Hazardous Materials, Regulated Substances or USTs in
connection with permits or other authorization for lawful activity;
relating to nuisance, trespass or other causes of action related to
Hazardous Materials, Regulated Substances or USTs; and relating to
wrongful death, personal injury, or property or other damage in
connection with the physical condition or use of the Premises by
reason of the presence of Hazardous Materials, Regulated Substances
or USTs in, on, under or above the Premises.
"Environmental Policies" means environmental insurance policies
issued by Environmental Insurer to FFCA with respect to the Premises, which
Environmental Policies shall be in form and substance satisfactory to FFCA in
its sole discretion.
"Equipment Payment Amount" has the meaning set forth in Section
7.B.
"Event of Default" has the meaning set forth in Section 10.
"FCCR Amount" has the meaning set forth in Section 10.A(6).
"Fee" means an underwriting, valuation, processing and
commitment fee equal to 1.0% of the sum of the Loan Amounts for all of the
Premises, which Fee shall be payable as set forth in Section 3.
"FFCA Payments" has the meaning set forth in Section 7.B.
"FFCA Entities" means, collectively, FFCA, Franchise Finance and
any Affiliate of FFCA or Franchise Finance.
"Fixed Charge Coverage Ratio" has the meaning set forth in
Section 7.B.
"Franchise Finance" means Franchise Finance Corporation of
America, a Delaware corporation, and its successors.
"GAAP" means generally accepted accounting principles
consistently applied.
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<PAGE> 100
"Governmental Authority" means any governmental authority,
agency, department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the state(s) where the
Premises are located or any political subdivision thereof.
"Gross Gas Profits" has the meaning set forth in Section 7.B.
"Gross Sales" has the meaning set forth in Section 7.B.
"Hazardous Materials" means (a) any toxic substance or hazardous
waste, substance, solid waste or related material, or any pollutant or
contaminant; (b) radon gas, asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
which contains dielectric fluid containing levels of polychlorinated biphenyls
in excess of federal, state or local safety guidelines, whichever are more
stringent, or any petroleum product; (c) any substance, gas, material or
chemical which is or may be defined as or included in the definition of
"hazardous substances," "toxic substances," "hazardous materials," "hazardous
wastes," "regulated substances" or words of similar import under any
Environmental Laws; and (d) any other chemical, material, gas or substance the
exposure to or release of which is or may be prohibited, limited or regulated by
any Governmental Authority that asserts or may assert jurisdiction over the
Premises or the operations or activity at the Premises, or any chemical,
material, gas or substance that does or may pose a hazard to the health and/or
safety of the occupants of the Premises or the owners and/or occupants of
property adjacent to or surrounding the Premises.
"Indemnified Parties" has the meaning set forth in Section 12.
"Interest Expense" has the meaning set forth in Section 7.B.
"Lessee" means Uni-Marts, Inc., a Delaware corporation, and its
successors and permitted assigns.
"Loan" or "Loans" means, as the context may require, the loan
for each Premises, or the loans for all of the Premises, described in Section
2.
"Loan Amount" or "Loan Amounts" means, as the context may
require, the aggregate amount set forth in Section 2 or, with respect to each
Premises, the individual amount set forth in Exhibit A.
"Loan Documents" means, collectively, this Agreement, the Notes,
the Mortgages, the Environmental Indemnity Agreements, the UCC-1
Financing Statements and all other documents, instruments and agreements
executed in connection therewith or contemplated thereby.
"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of
loans that are a part of such Securitization;
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<PAGE> 101
(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"Lost Note" has the meaning set forth in Section 7.C.
"Master Lease" means the lease between Debtor, as lessor, and
Lessee, as lessee, with respect to all of the Premises, as the same may be
amended from time to time.
"Material Adverse Effect" means a material adverse effect on (i)
the business, condition, worth or operations of Debtor, Lessee, or any or
all of the Premises, including, without limitation, the operation of any of the
Premises as a Uni-Mart Facility and/or the value of any or all of the Premises,
or (ii) Debtor's ability to perform the obligations under the Loan Documents.
"Memoranda" has the meaning set forth in Section 9.K.
"Modified FCCR Amount" has the meaning set forth in Section
10.A(6).
"Mortgage" or "Mortgages" means, as the context may require, the
deed of trust or mortgage dated as of the date of this Agreement to be
executed by Debtor for the benefit of FFCA with respect to a Premises or the
deeds of trust or mortgages dated as of the date of this Agreement to be
executed by Debtor for the benefit of FFCA with respect to all of the Premises,
as the same may be amended from time to time. A Mortgage will be executed for
each Premises.
"Net Income" has the meaning set forth in Section 7.B.
"Note" or "Notes" means, as the context may require, the
promissory note dated as of the date of this Agreement to be executed by Debtor
in favor of FFCA evidencing a Loan with respect to a Premises or the promissory
notes dated as of the date of this Agreement to be executed by Debtor in favor
of FFCA evidencing the Loans with respect to all of the Premises, as the same
may be amended, restated and/or substituted from time to time,
including, without limitation, as a result of the payment of the FCCR
Amount or the Modified FCCR Amount pursuant to Section 10. A Note
will be executed for each Premises in the Loan Amount corresponding
to such Premises.
"Operating Lease Expense" has the meaning set forth in Section
7.B.
"Other Agreements" means, collectively, all agreements and instruments
between, among or by (1) any of the Debtor Entities, and, or for the benefit of,
(2) any of the FFCA Entities, including, without limitation, promissory notes
and guaranties; provided, however, the term "Other Agreements" shall not include
the agreements and instruments defined as the Loan Documents.
"Participation" means one or more grants by FFCA or any of the other FFCA
Entities to a third party of a participating interest in notes evidencing
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<PAGE> 102
obligations to repay secured or unsecured loans owned by FFCA or any of the
other FFCA Entities or any or all servicing rights with respect thereto.
"Permitted Amounts" means, with respect to any given level of Hazardous
Materials or Regulated Substances, that level or quantity of Hazardous Materials
or Regulated Substances in any form or combination of forms the use, storage or
release of which does not constitute a violation of or require regulation under
any Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the states in which the Premises
are located.
"Permitted Exceptions" means those recorded easements,
restrictions, liens and encumbrances set forth as exceptions in the
title insurance policies issued by Title Company to FFCA and approved
by FFCA in connection with the Loans and the Third Party Leases.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority
or any other form of entity.
"Premises" means the parcel or parcels of real estate corresponding to the
FFCA File Numbers and addresses identified on Exhibit A attached
hereto, together with all rights, privileges and appurtenances
associated therewith and all buildings, fixtures and other
improvements now or hereafter located thereon. As used herein,
the term "Premises" shall mean either a singular property or all
of the properties collectively, as the context may require.
"Premises County" means Luzerne County, Pennsylvania.
"Questionnaires" means the environmental questionnaires completed by
Debtor or Lessee with respect to the Premises and submitted to Environmental
Insurer in connection with the issuance of the Environmental
Policies.
"Regulated Substances" means "petroleum" and "petroleum-based substances"
or any similar terms described or defined in any Environmental Laws and any
applicable federal, state, county or local laws applicable to or regulating
USTs.
"Release" means any presence, release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials, Regulated
Substances or USTs.
"Remediation" means any response, remedial, removal, or
corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Material, Regulated
Substances or USTs, any actions to prevent, cure or mitigate any
Release, any action to comply with any Environmental Laws or with any
permits issued pursuant thereto, any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing,
laboratory or other analysis, or any evaluation relating to any
Hazardous Materials, Regulated Substances or USTs.
"Securitization" means one or more sales, dispositions,
transfers or assignments by FFCA or any of the other FFCA Entities to
a special purpose corporation, trust or other entity identified by
FFCA or any of the other FFCA Entities of notes evidencing
obligations to repay secured or unsecured loans owned
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<PAGE> 103
by FFCA or any of the other FFCA Entities (and, to the extent applicable, the
subsequent sale, transfer or assignment of such notes to another special purpose
corporation, trust or other entity identified by FFCA or any of the other FFCA
Entities), and the issuance of bonds, certificates, notes or other instruments
evidencing interests in pools of such loans, whether in connection with a
permanent asset securitization or a sale of loans in anticipation of a permanent
asset securitization. Each Securitization shall be undertaken in accordance
with all requirements which may be imposed by the investors or the rating
agencies involved in each such sale, disposition, transfer or assignment or
which may be imposed by applicable securities, tax or other laws or regulations,
including, without limitation, laws relating to FFCA's status as a real estate
investment trust.
"Selected Premises" has the meaning set forth in Section
10.A(6).
"Subject Premises" has the meaning set forth in Section 10.A(6).
"Substitute Documents" has the meaning set forth in Section 13.
"Substitute Premises" means one or more parcels of real property
substituted for a Premises in accordance with the requirements of
Section 13, together with all rights, privileges and appurtenances
associated therewith, and all buildings, improvements and fixtures
located thereon. For purposes of clarity, where two or more parcels
of real property comprise a Substitute Premises, such parcels or
interests shall be aggregated and deemed to constitute the Substitute
Premises for all purposes of this Agreement.
"Substitute Premises Permitted Exceptions" has the meaning set
forth in Section 13 .
"Third Party Leases" means the leases for certain Premises set forth on
Exhibit A-1, attached hereto, and any replacement or renewal leases for the
space leased pursuant to the leases listed on Exhibit A-1.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwater, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding the Premises which
may result from such Release.
"Title Company" means the title insurance company described in
Section 4.
"Transfer" means one or more sales, transfers or assignments by FFCA or
any of the other FFCA Entities to a third party of notes evidencing obligations
to repay secured or unsecured loans owned by FFCA or any of the other FFCA
Entities or any or all servicing rights with respect thereto.
"UCC-1 Financing Statements" means such UCC-1 Financing
Statements as FFCA shall require to be executed and delivered by
Debtor with respect to the transactions contemplated by this
Agreement.
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<PAGE> 104
"Uni-Mart Facility" means a Uni-Mart or Orloski convenience
store with or without gasoline station, as noted on Exhibit A, and
such other ancillary uses permitted by Third Party Leases that are
not inconsistent with the operations of such facilities.
"USTs" means any one or combination of tanks and associated
piping systems used in connection with the storage, dispensing and
general use of Regulated Substances.
2. TRANSACTION. On the terms and subject to the conditions set forth
in the Loan Documents, FFCA shall make the Loans. The Loans will be evidenced
by the Notes and secured by the Mortgages. Debtor shall repay the outstanding
principal amount of the Loans together with interest thereon in the manner and
in accordance with the terms and conditions of the Notes and the other Loan
Documents. The aggregate Loan Amount shall be $22,325,000.00, allocated among
the Premises as set forth on the attached Exhibit A. The Loans shall be
advanced at the Closing in cash or otherwise immediately available funds subject
to any prorations and adjustments required by this Agreement. The Premises
shall be leased to the Lessee pursuant to the Master Lease and, at Closing,
Debtor shall assign the Master Lease to FFCA pursuant to the Mortgages.
3. UNDERWRITING, VALUATION, PROCESSING AND COMMITMENT FEE. Debtor paid
FFCA a portion of the Fee pursuant to the Commitment, and such portion was
deemed fully earned when received. The remainder of the Fee shall be paid at
the Closing and shall be deemed nonrefundable and fully earned upon the Closing.
The Fee constitutes FFCA's underwriting, valuation, processing and commitment
fee. The portion of the Fee paid and the balance due at Closing shall be
adjusted down (and returned or credited as appropriate) to reflect a Fee equal
to 1% of the actual Loan Amounts. In the event the transaction set forth in
this Agreement fails to close due to a breach or default by Debtor under this
Agreement, FFCA shall retain the portion of the Fee received by FFCA (without
affecting or limiting FFCA's remedies set forth in this Agreement).
4. CLOSING. (a) Each Loan shall be closed (the "Closing")
contemporaneously with the satisfaction of all of the terms and conditions
contained in this Agreement, but in no event shall the date of the Closing be
extended beyond April 20, 2000, unless such extension shall be approved by FFCA
in its sole discretion (the date on which the Closing shall occur is referred to
herein as the "Closing Date").
b) FFCA has ordered a title insurance commitment for each
Premises from Lawyers Title Insurance Corporation ("Title Company").
Prior to the Closing Date, the parties hereto shall deposit with
Title Company all documents and moneys necessary to comply with their
obligations under this Agreement. All
costs of such transaction shall be borne by Debtor, including,
without limitation, the cost of title insurance and all endorsements
required by FFCA, survey charges, UCC and litigation search charges,
the attorneys' fees of Debtor, attorneys' fees and expenses of FFCA,
the cost of Environmental Policies to be delivered pursuant to
Section 9.E, FFCA's in-house site inspection costs and fees, stamp
taxes, mortgage taxes, transfer fees, escrow and recording fees and
site inspection fees for the Premises. All real and personal
property and other applicable taxes and assessments and other charges
relating to the Premises which are due and payable on or prior to the
Closing Date as well as taxes and assessments due and payable
subsequent to the Closing Date but which Title Company requires to be
paid at
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<PAGE> 105
Closing as a condition to the issuance of the title insurance policy described
in Section 9.C, shall be paid by Debtor at or prior to the Closing. The Closing
documents shall be dated as of the Closing Date.
Debtor and FFCA hereby employ Title Company to act as escrow
agent in connection with the transaction described in this Agreement.
Title Company shall not cause the transaction to close unless and
until it has received written instructions from FFCA and Debtor to do
so. Debtor and FFCA will deliver to Title Company all documents, pay
to Title Company all sums and do or cause to be done all other things
necessary or required by this Agreement, in the reasonable judgment
of Title Company, to enable Title Company to comply herewith and to
enable any title insurance policy provided for herein to be issued. Title
Company is authorized to pay, from any funds held by it for FFCA's or Debtor's
respective credit all amounts necessary to procure the delivery of
such documents and to pay, on behalf of FFCA and Debtor, all charges
and obligations payable by them, respectively. Debtor will pay all
charges payable by it to Title Company. Title Company is authorized,
in the event any conflicting demand is made upon it concerning these
instructions or the escrow, at its election, to hold any documents
and/or funds deposited hereunder until an action shall be brought in
a court of competent jurisdiction to determine the rights of Debtor
and FFCA or to interplead such documents and/or funds in an action
brought in any such court. Deposit by Title Company of such
documents and funds, after deducting therefrom its charges and its
expenses and attorneys' fees incurred in connection with any such
court action, shall relieve Title Company of all further liability
and responsibility for such documents and funds. Title Company's
receipt of this Agreement and opening of an escrow pursuant to this
Agreement shall be deemed to constitute conclusive evidence of Title
Company's agreement to be bound by the terms and conditions of this
Agreement pertaining to Title Company. Disbursement of any funds
shall be made by wire transfer, as directed by FFCA and Debtor.
Title Company shall be under no obligation to disburse any funds
represented by check or draft, and no check or draft shall be payment
to Title Company in compliance with any of the requirements hereof,
until it is advised by the bank in which such check or draft is
deposited that such check or draft has been honored. Title Company
is authorized to act upon any statement furnished by the holder or
payee, or a collection agent for the holder or payee, of any lien on
or charge or assessment in connection with the Premises, concerning
the amount of such charge or assessment or the amount secured by such
lien, without liability or responsibility for the accuracy ofsuch
statement. The employment of Title Company as escrow agent shall not
affect any rights of subrogation under the terms of any title
insurance policy issued pursuant to the provisions thereof.
5. REPRESENTATIONS AND WARRANTIES OF FFCA. The representations and
warranties of FFCA contained in this Section are being made by FFCA as of the
date of this Agreement and the Closing Date to induce Debtor to enter into this
Agreement and consummate the transactions contemplated herein, and Debtor has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. FFCA represents and
warrants to Debtor as follows:
A. Organization of FFCA. FFCA has been duly formed, is validly
existing and has taken all necessary action to authorize the execution,
delivery and performance by FFCA of this Agreement.
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B. Authority of FFCA. The person who has executed this Agreement
on behalf of FFCA is duly authorized so to do.
C. Enforceability. Upon execution by FFCA, this Agreement shall
constitute the legal, valid and binding obligation of FFCA, enforceable
against FFCA in accordance with its terms.
All representations and warranties of FFCA made in this Agreement shall
survive the Closing.
6. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The representations and
warranties of Debtor contained in this Section are being made by Debtor as of
the date of this Agreement and the Closing Date to induce FFCA to enter into
this Agreement and consummate the transactions contemplated herein, and FFCA has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. Debtor represents
and warrants to FFCA as follows:
A. Information and Financial Statements. Debtor has delivered to
FFCA financial statements (either audited financial statements or, if
Debtor does not have audited financial statements, certified Financial
statements) and certain other information concerning itself and
Lessee, which financial statements and other information are true,
correct and complete in all material respects; and no material adverse
change has occurred with respect to any such financial
statements and other information provided to FFCA since the date
such financial statements and other information were prepared
or delivered to FFCA. Debtor understands that FFCA is relying
upon such financial statements and information and Debtor
represents that such reliance is reasonable. All such financial
statements were prepared in accordance with GAAP and accurately
reflect as of the date of this Agreement and the Closing Date,
the financial condition of each individual or entity to which
they pertain.
B. Organization and Authority. (1) Each of Debtor and
Lessee is duly organized or formed, validly existing and in good
standing under the laws of its state of incorporation or
formation, and qualified as a foreign corporation, partnership
or limited liability company, as applicable, to do business in
any jurisdiction where such qualification is required. All
necessary corporate, partnership or limited liability company
action has been taken to authorize the execution, delivery and
performance of this Agreement and the other Loan Documents.
(2) The person(s) who have executed this Agreement on behalf of
Debtor are duly authorized so to do.
C. Enforceability of Documents. Upon execution by Debtor
and Lessee this Agreement and the other Loan Documents shall
constitute the legal, valid and binding obligations of Debtor
and Lessee, respectively, enforceable against Debtor and Lessee in
accordance with their respective terms.
D. Litigation. There are no suits, actions, proceedings or
investigations pending or threatened against or involving Debtor, Lessee or
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the Premises before any arbitrator or Governmental Authority which might
reasonably result in any Material Adverse Effect.
E. Absence of Breaches or Defaults. Debtor and Lessee are not,
and the authorization, execution, delivery and performance of
this Agreement and the other Loan Documents will not result, in
any breach or default under any other document, instrument or
agreement to which Debtor or Lessee is a party or by which
Debtor, Lessee, the Premises or any of the
property of Debtor or Lessee is subject or bound. The
authorization, execution, delivery and performance of this
Agreement and the other Loan Documents will not violate any
applicable law, statute, regulation, rule, ordinance, code, rule
or order.
F. Utilities. The Premises are served by ample public
utilities to permit full utilization of the Premises for their
intended purpose and all utility connection fees and use charges will
have been paid in full.
G. Intended Use and Zoning; Compliance With Laws. Debtor
intends to use each of the Premises solely for the operation of
a Uni-Mart Facility, and related ingress, egress and parking,
and for no other purposes. Except as disclosed on Exhibit B,
attached hereto, each of the Premises is in compliance with all
applicable zoning requirements and the use of each of the
Premises as a Uni-Mart Facility does not constitute a
nonconforming use under applicable zoning requirements, except
where such noncompliance will not have a Material Adverse
Effect. Except as disclosed on Exhibit B, attached hereto, the
Premises comply with all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and
approvals of each Governmental Authority having jurisdiction
over the remises, including, without limitation, all health,
building, fire, safety and other codes, ordinances and
requirements, all applicable standards of the National Board of
Fire Underwriters and the Americans With Disabilities Act of
1990 and all policies or rules of common law, in each case, as
amended, and any judicial or administrative interpretation
thereof, ncluding any judicial order, consent, decree or
judgment applicable to Debtor or Lessee, except where such
noncompliance will not have a Material Adverse Effect.
H. Area Development; Wetlands. No condemnation or eminent
domain proceedings affecting the Premises have been commenced or, to
the best of Debtor's knowledge, are contemplated. To the best
of Debtor's knowledge, the areas where the Premises are located
have not been declared blighted by any Governmental Authority.
The Premises and/or the real property bordering the Premises are
not designated by any Governmental Authority as a wetlands.
I. Licenses and Permits; Access. Debtor or Lessee has all
Required licenses and permits, both governmental and private, to
use and operate each Premises as a Uni-Mart Facility, except to
the extent the failure to have such licenses or permits will not
have a Material Adverse Effect. There are adequate rights of
access to public roads and ways available to the Premises for
unrestricted ingress and egress and otherwise to permit full
utilization of the Premises for their intended purposes and all
such public roads and ways have been completed and dedicated to
public use.
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J. Condition of Premises. The Premises, including the equipment
located thereon, are of good workmanship and materials, fully equipped and
operational, in good condition and repair, free from structural defects,
clean, orderly and sanitary, safe, well-lit, landscaped, decorated,
attractive and well-maintained, except where the failure of the Premises
or equipment to be in such condition will not have a Material
Adverse Effect.
K. Environmental. Debtor is fully familiar with the
present use of the Premises, and, after due inquiry, Debtor has
becomegenerally familiar with the prior uses of the Premises. Except
as disclosed in the Questionnaires, no Hazardous Materials or Regulated
Substances have been used, handled, manufactured, generated, produced,
stored, treated, processed, transferred or disposed of at or on the
Premises, except in Permitted Amounts and in compliance with
Environmental Laws, except to the extent such Hazardous Materials or
Regulated Substances would not have a Material Adverse Effect, and
no Release or Threatened Release has occurred
at or on the Premises which would have a Material Adverse
Effect. Except as disclosed in the Questionnaires, the
activities, operations and business undertaken on, at or about
the Premises, including, but not limited to,
any past or ongoing alterations or improvements at the
Premises, are and have been at all times, in compliance with all
Environmental Laws except where such noncompliance would not
have a Material Adverse Effect. No further action is required
to remedy any Environmental Condition or violation of, or to be
in full compliance with, any Environmental Laws, and no lien has
been imposed on the Premises by any Governmental Authority in
connection with any Environmental Condition, the violation or
threatened violation of any Environmental Laws or the presence
of any Hazardous Materials, Regulated Substances or USTs on or
off the Premises.
Except as disclosed in the Questionnaires, there is no pending
or threatened litigation or proceeding before any Governmental
Authority in which any person or entity alleges the violation or
threatened violation of any Environmental Laws or the presence,
Release, Threatened Release or placement on or at the Premises
of any Hazardous Materials, Regulated Substances or USTs, or of
any facts which would give rise to any such action, nor has
Debtor except as disclosed in the Questionnaires (a) received
any notice (and Debtor has no actual knowledge) that any
Governmental Authority or any employee or agent thereof has
determined, threatens to determine or requires an investigation
to determine that there has been a violation of any
Environmental Laws at, on or inconnection with the Premises or
that there exists a presence, Release, Threatened Release or
placement of any Hazardous Materials, Regulated Substances or
USTs on or at the Premises, or the use, handling, manufacturing,
generation, production, storage, treatment, processing,
transportation or disposal of any Hazardous Materials, Regulated
Substances or USTs at or on the Premises; (b) received any
notice under the citizen suit provision of any Environmental Law
in connection with the Premises or any facilities, operations or
activities conducted thereon, or any business conducted in
connection therewith; or (c) received any request for
inspection, request for information, notice, demand,
administrative inquiry or any formal or informal complaint or
claim with respect to or in connection with the violation or
threatened violation of any Environmental Laws or existence of
Hazardous Materials, Regulated Substances or USTs relating to
the Premises or any facilities, operations or
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activities conducted thereon or any business conducted in
connection therewith.
FFCA has charged Debtor a fee for the Environmental Policies.
Debtor acknowledges that the Environmental Policies are for the sole
protection of FFCA and will not protect Debtor or provide Debtor with any
coverage thereunder.
To the best of Debtor's knowledge, the information and
disclosures in the Questionnaires is true, correct and complete
in all material respects, FFCA and Environmental Insurer may
rely on such information and disclosures, and the person or
persons executing the Questionnaires were duly authorized to do
so. Debtor acknowledges and agrees that Environmental Insurer
may rely on the environmental representations and warranties set
forth in the preceding subsection K, that Environmental Insurer
is an intended third-party beneficiary of such representations
and warranties and that Environmental Insurer shall have all
rights and remedies available at law or in equity as a result of
a breach of such representations and warranties, including, to
the extent applicable, the right of subrogation.
L. Title to Premises; First Priority Lien. Fee title to each of
the Premises is vested in Debtor, free and clear of all liens,
encumbrances, charges and security interests of any nature
whatsoever, except the Permitted Exceptions. Upon Closing, FFCA
shall have a first priority lien upon and security interest in
each of the Premises pursuant to the Mortgages and the UCC-1
Financing Statements.
M. No Other Agreements and Options. Neither Debtor, Lessee nor the
Premises are subject to any commitment, obligation, or agreement,
including, without limitation, any right of first refusal, option to
purchase or lease granted to a third party, which could or would prevent or
hinder FFCA in making the Loans or exercising any of its rights or
remedies under the Loan Documents or prevent or hinder Debtor
from fulfilling its obligations under this Agreement or the
other Loan Documents.
N. No Mechanics' Liens. There are no outstanding accounts
payable which if not paid timely would have a Material Adverse Effect,
nor are there any mechanics' liens, or rights to claim a
mechanics' lien in favor of any materialman, laborer, or any other person
or entity in connection with labor or materials furnished to or performed
on any portion of the Premises and no work has been performed or is
in progress nor have materials been supplied to the Premises or
agreements entered into for work to be performed or materials to
be supplied to the Premises prior to the date hereof, which will
not have been fully paid for on or before the Closing Date, or
which might provide the basis for the filing of such liens
against the Premises or any portion thereof, the existence,
nonpayment or filing of which would have a Material Adverse
Effect; Debtor shall be responsible for any and all claims for
mechanics' liens and accounts payable that have arisen or may
subsequently arise due to agreements entered into for and/or any
work performed on, or materials supplied to the Premises prior
to the Closing Date; Debtor has made no contract or arrangement
of any kind the performance of which by the other party thereto
would give rise to a lien on the Premises, the nonpayment of
which would have a Material Adverse Effect; and Debtor shall and
does hereby agree to defend, indemnify and forever hold
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FFCA and FFCA's designees harmless for, from and against any and all such
mechanics' lien claims, accounts payable or other commitments
relating to the Premises.
O. No Reliance. Debtor acknowledges that FFCA did not prepare or
assist in the preparation of any of the projected financial information
used by Debtor in analyzing the economic viability and feasibility of
the transaction contemplated by this Agreement. Furthermore,
Debtor acknowledges that it has not relied upon, nor may it
hereafter rely upon, the analysis undertaken by FFCA in
determining the Loan Amounts, and such analysis will not be made
available to Debtor.
P. Nonconsolidation. (1) Debtor maintains correct and
complete books and records of account separate from all other
Persons. Where necessary or appropriate, Debtor has disclosed
the nature of the transaction contemplated by the Loan Documents
and Debtor's independent status to its creditors. The Premises
represent all of the assets owned or leased by Debtor as of the
date hereof, and Debtor has not commingled its assets and its
liabilities with those of any other Person.
(2) Debtor maintains its own checking account or accounts
with commercial banking institutions separate from other
Persons.
(3) To the extent that Debtor shares the same employees
with other Persons, the salaries of and the expenses related to
providing benefits to such employees have been fairly and
nonarbitrarily allocated among such Persons, with the result
that each such Person bears its fair share of the salary and
benefit costs associated with all such common employees.
(4) To the extent that Debtor jointly contracts with other
Persons to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing are, and
at all times shall be, fairly and nonarbitrarily allocated among
such Persons, with the result that each such
Person bears its fair share of such costs. To the extent that
Debtor contracts or does business with vendors or service
providers where the goods or services provided are or shall be
partially for the benefit of other Persons, the costs incurred
in so doing are fairly and nonarbitrarily allocated to or among
such Persons for whose benefit the goods or services are
provided, with the result that each such Person bears its fair
share of such costs.
(5) To the extent that Debtor or other Persons have
offices in the same location, there is a fair, appropriate and
nonarbitrary allocation of overhead among them, with the result
that each such Person bears its fair share of such expenses.
(6) Debtor has not incurred any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent,
including, without limitation, liability for the debts of any
other Person (and Debtor has not held itself out as being liable
for the debts of any other Person), other than the Loans and
trade and operational debt incurred in the ordinary course of
business with trade creditors and in amounts as are normal and
reasonable under the circumstances. Debtor is not a guarantor
of any obligations.
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(7) Debtor is not presently a party to a pledge of its
assets for the benefit of other Persons. Debtor has not made
any loans or advances to any third party (including any
Affiliate or constituent party of Debtor).
(8) Debtor has conducted its affairs strictly in
accordance with its organizational documents including Debtor's
corporate general partner's organizational documents and has observed all
necessary, appropriate and customary formalities.
(9) Debtor does not hold itself out to the public or to
any of its individual creditors as being a unified entity with
assets and liabilities in common with any other Person.
(10) Debtor (i) is solvent, (ii) is able to pay its
obligations as they become due and (iii) is not and shall not be
engaged in any business or
transaction for which its remaining capital is or may be
unreasonably small.
(11) Debtor has no actual intent to hinder, delay or
defraud creditors in connection with any of the transactions
contemplated herein or intent to incur (or belief that it is
incurring) debts beyond its ability to pay the same as they
mature.
(12) Debtor has not, as to itself or as to other Persons,
(a) commenced any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with
respect to Debtor or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to Debtor or its debts
or other Persons or their debts or (b) sought appointment of a
receiver, trustee, custodian or other similar official for
Debtor or for all or any substantial part of its or other
Person's assets or made a general assignment for the benefit of
Debtor's creditors.
All representations and warranties of Debtor made in this
Agreement shall be and will remain true and complete in all respects
as of and subsequent to the Closing Date as if made and restated in
full as of such time and shall survive the Closing.
7. Covenants. Debtor covenants to FFCA from and after the
Closing Date
as follows:
A. Inspections. Debtor shall, at all reasonable times, (i) provide
FFCA and FFCA's officers, employees, agents, advisors,
attorneys, accountants, architects, and engineers with access to
the Premises, all drawings, plans, and specifications for the
Premises in possession of Debtor or Lessee, all engineering
reports relating to the Premises in the possession of Debtor or
Lessee, the files, correspondence and documents relating to the
Premises, and the financial books and records, including lists
of delinquencies, relating to the ownership, operation, and
maintenance of the Premises (including, without limitation, any
of the foregoing information stored in any computer files), (ii)
allow such persons to make such inspections, tests, copies, and
verifications as FFCA considers necessary without unreasonably
interrupting Debtor's business (to the extent reasonably
possible) and upon reasonable advance notice, and (iii) if
Debtor
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is in breach of the Fixed Charge Coverage Ratio requirement set forth in
the following Subsection B, pay expenses reasonably incurred by FFCA from
time to time in conducting such inspections, tests, copies and
verifications upon demand (such amounts to bear interest at the Default
Rate if not paid upon demand until paid).
B. Fixed Charge Coverage Ratio. Until such time as all of Debtor's
obligations under the Notes and the other Loan Documents are
paid, satisfied and discharged in full, Debtor shall cause to be
maintained an aggregate Fixed Charge Coverage Ratio at all of
the Premises of at least 1.25:1, as determined on the last day
of each fiscal year of Debtor (the "Date of Determination").
For purposes of this Section, the term "Fixed Charge Coverage
Ratio" shall mean with respect to the twelve month period of
time immediately preceding the Date of Determination (a "Period
of Determination"), the ratio calculated for such period of
time, determined in accordance with GAAP, of (a) the sum of Net
Income, Depreciation and Amortization, Interest Expense and
Operating Lease Expense, less a corporate overhead allocation
(which shall equal the sum of 3% of Gross Sales and 3% of Gross
Gas Profits), to (b) the sum of the FFCA Payments, Operating
Lease Expense and the Equipment Payment Amount. For purposes of
this Section, the following terms shall be defined as set forth
below:
"Capital Lease" shall mean any lease of any property (whether
real, personal or mixed) by Lessee with respect to one or more of
the Premises which lease would, in conformity with GAAP, be
required to be accounted for as a capital lease on the
balance sheet of Lessee. The term "Capital Lease" shall not include
any operating lease.
"Debt" shall mean as directly related to all of the Premises
and the Period of Determination (i) indebtedness for borrowed money,
(ii) obligations evidenced by bonds, indentures, notes or similar
instruments, (iii) obligations to pay the deferred purchase price of
property or services, (iv) obligations under leases which should be,
in accordance with GAAP, accounted for as Capital Leases, and (v)
obligations under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred
to in clauses (i) through (iv) above.
"Depreciation and Amortization" shall mean with respect to all
of the Premises the depreciation and amortization accruing during
any Period of Determination with respect to Debtor as determined in
accordance with GAAP.
"Equipment Payment Amount" shall mean for any Period of
Determination the sum of all amounts payable during such Period of
Determination under all (i) leases for equipment located at one or
more of the Premises and (ii) all loans secured by equipment located
at one or more of the Premises.
"FFCA Payments" shall mean with respect to the Period of
Determination, the sum of all amounts payable under the Notes
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excluding payment of any FCCR Amount or Modified FCCR Amount and any
other non-scheduled payment required or permitted hereunder.
"Gross Gas Profits" shall mean the difference between
(i) motor vehicle fuel sales or other income arising from
the sale of motor vehicle fuel at all of the Premises
during the Period of Determination, minus (ii) the sum of
sales tax and the actual costs paid by Debtor for the motor
vehicle fuel sold.
"Gross Sales" shall mean the difference between (i)
sales or other income arising from all business conducted
at all of the Premises (other than motor vehicle fuel sales
or other income arising from the sale of motor vehicle
fuel) by Lessee during the Period of Determination, minus
(ii) the sum of sales tax and any amounts received from not-
for-profit sales of all non-food items approved for use in
connection with promotional campaigns, if any, for all of
the Premises.
"Interest Expense" shall mean for any Period of
Determination, the sum of all interest accrued or which
should be accrued in respect of all Debt of Lessee
allocable to one or more of the Premises and all business
operations thereon during such period (including interest
attributable to Capital Leases), as determined in
accordance with GAAP.
"Net Income" shall mean with respect to the Period of
Determination, the aggregate net income or net loss of Lessee
allocable to all of the Premises. In determining the amount of
Net Income, (i) adjustments shall be made for nonrecurring gains
and losses allocable to the Period of Determination, (ii) deductions
shall be made for Depreciation and Amortization, Interest
Expense and Operating Lease Expense allocable to the Period
of Determination, and (iii) no deductions shall be made for
(x) income taxes or charges equivalent to income taxes
allocable to the Period of Determination, as determined in
accordance with GAAP, or (y) corporate overhead expense
allocable to the Period of Determination.
"Operating Lease Expense" shall mean the sum of all payments
and expenses incurred by Lessee under any operating leases with
respect to one or more of the Premises and the business operations
thereon during the Period of Determination, as determined in
accordance with GAAP.
Notwithstanding the foregoing, FFCA shall have the right to divide the
Loans (and the corresponding Loan Documents) into no more than three
(3) Loan Pools in connection with no more than three (3)
Securitizations, Participations or Transfers. If any Loan Pool
does not include all of the Loans, Debtor shall, upon notice
from FFCA, maintain with respect to the Loans in each Loan Pool
for which such notice is given an aggregate Fixed Charge
Coverage Ratio, as determined on the date set forth above, of at
least 1.25:1 for all of the Premises corresponding to the Loans
in such Loan Pool, which Fixed Charge Coverage Ratio requirement
shall be in addition to the requirement to maintain an aggregate
Fixed Charge Coverage Ratio of at least 1:25:1 for all of the
Premises as set forth above, and shall apply until such time as
all of the Debtor's obligations under the Notes and the other
Loan Documents corresponding to such Loans are paid, satisfied and
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discharged in full. To the extent that an aggregate Fixed Charge
Coverage Ratio requirement is imposed by FFCA with respect to
the Loans in any Loan Pool, for the purposes of determining
whether or not such Fixed Charge Coverage Ratio requirement has
been satisfied, the definitions relating to the Fixed Charge
Coverage Ratio shall be deemed to be modified as applicable to
provide for the calculation of the aggregate Fixed Charge
Coverage Ratio for all of the Premises corresponding to such
Loan Pool rather than a calculation of the aggregate Fixed
Charge Coverage Ratio for all of the Premises.
C. Lost Note. Debtor shall, if any Note is mutilated,
destroyed, lost or stolen (a "Lost Note"), promptly deliver to
FFCA, upon receipt of an affidavit from FFCA stipulating that
such Note has been mutilated, destroyed, lost or stolen, in
substitution therefor, a new promissory note containing the same
terms and conditions as such Lost Note with a notation thereon
of the unpaid principal and accrued and unpaid interest. Debtor
shall provide fifteen (15) days' prior notice to FFCA before
making any payments to third parties in connection with a Lost
Note. Except as a result of the gross negligence or intentional
misconduct of Debtor, FFCA shall indemnify Debtor for all
reasonable costs, expenses, damages, claims and liabilities
incurred by Debtor as a result of a Lost Note.
D. Lease Modification. The Master Lease shall not be
modified, amended, terminated, cancelled or surrendered without
FFCA's prior written consent.
E. Nonconsolidation. (1) Debtor shall at all times
maintain correct and complete books and records of account
separate from all other Persons. Where necessary or
appropriate, Debtor shall disclose the nature of the transaction
contemplated by the Loan Documents and Debtor's independent
status to its creditors. Debtor shall not own or lease any
assets other than the Premises, nor engage in any business other
than owning and leasing the Premises, including financing the
Premises with FFCA. Debtor shall not commingle its assets and
its liabilities with those of any other Person.
(2) Debtor shall maintain its own checking account or
accounts with commercial banking institutions separate from
other Persons.
(3) To the extent that Debtor shares the same employees
with other Persons, the salaries of and the expenses related to
providing benefits to such employees, at all times shall be,
fairly and nonarbitrarily allocated among such Persons, with the
result that each such Person shall bear its fair share of the
salary and benefit costs associated with all such common
employees.
(4) To the extent that Debtor jointly contracts with other
Persons to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing at all
times shall be, fairly and nonarbitrarily allocated among such
Persons, with the result that each such Person shall bear its
fair share of such costs. To the extent that Debtor contracts
or does business with vendors or service providers where the
goods or services provided are or shall be partially for the
benefit of other Persons, the costs incurred in so doing at all
times shall be, fairly and
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nonarbitrarily allocated to or among such Persons for whose
benefit the goods or services are provided, with the result that
each such Person shall bear its fair share of such costs. All
transactions between Debtor and other Persons shall be only on
an arm's-length basis.
(5) To the extent that Debtor or other Persons have
offices in the same location, there shall be a fair, appropriate
and nonarbitrary allocation of overhead among them, with the
result that each such Person shall bear its fair share of such
expenses.
(6) Debtor shall not incur any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation or assuming liability for the debts
of any other Person and Debtor will not hold itself out as being
liable for the debts of any other Person), other than the Loans
and trade and operational debt incurred in the ordinary course
of business with trade creditors and in amounts as are normal
and reasonable under the circumstances. No indebtedness other
than the Loans may be secured (subordinate or pari passu) by the
Premises or any portion thereof.
(7) Debtor shall not enter into any contract or agreement
with any Affiliate of Debtor, any constituent party of Debtor or
any Affiliate of any constituent party of Debtor except upon
terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an
armslength basis with third parties other than any such party.
(8) Except as contemplated by the Loan Documents, Debtor
shall not pledge, grant any security interest in, hypothecate or
otherwise encumber its assets for the benefit of any other
Persons.
(9) Debtor shall issue separate financial statements
prepared not less frequently than annually and prepared
according to GAAP.
(10) Debtor shall maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character
in light of its contemplated business operations.
(11) Debtor shall conduct its affairs strictly in accordance
with its organizational documents, including Debtor's corporate
general partner's organizational documents and shall observe all necessary,
appropriate and customary formalities. The books, records and accounts of
Debtor shall at all times be maintained in a manner permitting
the assets and liabilities of Debtor to be easily separated and
readily ascertained from those of any other Person and Debtor
shall file its own tax returns.
(12) Debtor shall not hold itself out to the public or to
any of its individual creditors as being a unified entity with
assets and liabilities in common with any other Person. Debtor
shall maintain and utilize separate stationery, invoices and
checks.
(13) Debtor shall not make any loans or advances to any
third party (including any Affiliate of Debtor or constituent
party of Debtor).
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(14) Debtor shall not, as to itself or as to other Persons,
(i) commence any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with
respect to Debtor or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to Debtor or its debts
or other Persons or their debts or (ii) seek appointment of a
receiver, trustee, custodian or other similar official for
Debtor or for all or any substantial part of its or other
Person's assets or make a general assignment for the benefit of
Debtor's creditors. Debtor shall not take any action in
furtherance of, or indicating its consents to, approval of or
acquiescence in, any of the acts set forth above. Debtor shall not be
unable to, or admit in writing its inability to, pay its debts.
F. Compliance with Third Party Leases. Debtor shall
comply with all terms, covenants and conditions set forth in
each of the Third Party Leases, timely. Debtor shall provide
FFCA with copies of all notices and demands delivered to Debtor
under any Third Party Leases that relate to the compliance of
Debtor with the Third Party Leases.
8. TRANSACTION CHARACTERIZATION. This Agreement is a contract to
extend a financial accommodation (as such term is used in the Code) for the
benefit of Debtor. It is the intent of the parties hereto that the business
relationship created by this Agreement, the Notes, the Mortgages and the other
Loan Documents is solely that of creditor and debtor and has been entered into
by both parties in reliance upon the economic and legal bargains contained in
the Loan Documents. None of the agreements contained in the Loan Documents is
intended, nor shall the same be deemed or construed, to create a partnership
(either de jure or de facto) between Debtor and FFCA, to make them joint
venturers, to make Debtor an agent, legal representative, partner, subsidiary or
employee of FFCA, nor to make FFCA in any way responsible for the debts,
obligations or losses of Debtor.
9. CONDITIONS OF CLOSING. The obligation of FFCA to
consummate the transaction contemplated by this Agreement is subject
to the fulfillment or waiver of each of the following conditions:
A. Title. Fee title to each of the Premises shall be
vested in Debtor, free of all liens, encumbrances, restrictions,
encroachments and easements, except the Permitted Exceptions and
the liens created by the Mortgages and the UCC-1 Financing
Statements. Upon Closing, FFCA will obtain a valid and perfected
first priority lien upon and security interest in each of the
Premises.
B. Condition of Premises. FFCA shall have inspected and
approved the Premises, the Premises shall be in good condition
and repair, free from structural defects, and of good workmanship and
materials, and the Premises shall be fully equipped and operational, clean,
orderly, sanitary, safe, well- lit, landscaped, decorated, attractive and
with a suitable layout, physical plant, traffic pattern and
location, all as determined by FFCA in its sole discretion,
except where the failure of the Premises to be in such condition
will not have a Material Adverse Effect.
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C. Evidence of Title. FFCA shall have received for each
of the Premises a preliminary title report and irrevocable
commitment to insure title in the amount of the Loan relating to
such Premises, by means of a mortgagee's, ALTA extended coverage
policy of title insurance (or its equivalent, in the event such
form is not issued in the jurisdiction where the Premises is
located) issued by Title Company showing good and marketable fee
title in such Premises in Debtor, committing to insure FFCA's
first priority lien upon and security interest in such Premises
subject only to Permitted Exceptions, and containing such
endorsements as FFCA may require.
D. Survey. FFCA shall have received a current ALTA
survey of each of the Premises, the form and substance of which
shall be satisfactory to FFCA in its sole discretion. Debtor
shall have provided FFCA with evidence satisfactory to FFCA that
the location of each of the Premises is not within the 100year
flood plain or identified as a special flood hazard area as
defined by the Federal Emergency Management Agency, or if any
Premises is in such a flood plain or special flood hazard area,
Debtor shall provide FFCA with evidence of flood insurance
maintained on such Premises in amounts and on terms and
conditions satisfactory to FFCA.
E. Environmental. At Debtor's expense, FFCA shall have
received an Environmental Policy with respect to each of the
Premises, as required by FFCA in its sole discretion.
F. Zoning. Debtor shall have provided FFCA with evidence
satisfactory to FFCA that each of the Premises is properly zoned
for use as a UniMart Facility and that such use constitutes a
legal, conforming use under applicable zoning requirements.
G. Compliance With Representations, Warranties and
Covenants. All obligations of Debtor under this Agreement shall
have been fully performed and complied with, and no event shall
have occurred or condition shall exist which would, upon the
Closing Date, or, upon the giving of notice and/or passage of
time, constitute a breach or default hereunder or under the Loan
Documents or any other agreement between or among FFCA, Debtor or, Lessee
pertaining to the subject matter hereof, and no event shall have
occurred or condition shall exist or information shall have been
disclosed by Debtor or discovered by FFCA which has had or would
have a material adverse effect on the Premises, Debtor, Lessee
or FFCA's willingness to consummate the transaction contemplated
by this Agreement, as determined by FFCA in its sole and
absolute discretion.
H. Proof of Insurance. Debtor shall have delivered to FFCA
certificates of insurance or copies of insurance policies
showing that all insurance required by the Loan Documents and
providing coverage and limits satisfactory to FFCA are in full
force and effect.
I. Opinion of Counsel to Debtor and Lessee. Debtor and Lessee
shall have caused Counsel to prepare and deliver an opinion to
FFCA in form and substance satisfactory to FFCA and its counsel.
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J. Availability of Funds. FFCA presently has sufficient funds to
Discharge its obligations under this Agreement. In the event
that the transaction contemplated by this Agreement does not
close on or before the date established for Closing under
Section 4(a) hereof, FFCA does not warrant that it will
thereafter have sufficient funds to consummate the transaction
contemplated by this Agreement.
K. Master Lease; Memoranda. Debtor and Lessee shall have executed
And delivered the Master Lease for all of the Premises and a
recordable memorandum of lease (collectively, the "Memoranda")
for each of the Premises.
L. Closing Documents. At or prior to the Closing Date, FFCA and/or
Debtor, as may be appropriate, shall execute and deliver or
cause to be executed and delivered to Title Company or FFCA, as
may be appropriate, all documents required to be delivered by
this Agreement, and such other documents, payments, instruments
and certificates, as FFCA may require in form acceptable to
FFCA, including, without limitation, the following:
(1) Notes;
(2) Mortgages;
(3) Proof of Insurance;
(4) Opinion of Counsel to Debtor and Lessee;
(5) Evidence of satisfactory zoning;
(6) UCC-1 Financing Statements;
(7) Environmental Indemnity Agreements;
(8) Master Lease and Memoranda;
(9) Certifications (Confession of Judgment); and
(10) Explanations and Waivers of Rights Regarding Confession of
Judgment.
Upon fulfillment or waiver of all of the above conditions, FFCA shall deposit
funds necessary to close this transaction with the Title Company and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
10. DEFAULT AND REMEDIES. A. Each of the following shall be
deemed an event of default by Debtor (each, an "Event of Default"):
(1) If any representation or warranty of Debtor or Lessee
set forth in any of the Loan Documents is false in any respect
and such falsity would result in a Material Adverse Effect, or
if Debtor or Lessee renders any false statement or account in
any material respect.
(2) If any principal, interest or other monetary sum due
under the Notes, the Mortgages or any other Loan Document is not
paid within five days after the date when due; provided,
however, notwithstanding the occurrence of such an Event of
Default, FFCA shall not be entitled to exercise its rights and
remedies set forth below unless and until FFCA shall have given
Debtor notice thereof and a period of five days from the
delivery of such notice shall have elapsed without such Event of
Default being cured.
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(3) If Debtor fails to observe or perform any of the other
covenants (except with respect to a breach of the Fixed Charge
Coverage Ratio, which breach is addressed in subitem (6) below),
conditions, or obligations of this Agreement; provided, however,
if any such failure does not involve the payment of any monetary
sum, is not willful or intentional, does not place any rights or
interest in collateral of FFCA in immediate jeopardy, and is
within the reasonable power of Debtor to promptly cure after
receipt of notice thereof, all as determined by FFCA in its
reasonable discretion, then such failure shall not constitute an
Event of Default hereunder, unless otherwise expressly provided
herein, unless and until FFCA shall have given Debtor notice
thereof and a period of 30 days shall have elapsed, during which
period Debtor may correct or cure such failure, upon failure of
which an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being
required. If such failure cannot reasonably be cured within
such 30day period, as determined by FFCA in its reasonable
discretion, and Debtor is diligently pursuing a cure of such
failure, then Debtor shall have a reasonable period to cure such
failure beyond such 30-day period, which shall not exceed 90
days after receiving notice of the failure from FFCA. If Debtor
shall fail to correct or cure such failure within such 90-day
period, an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being
required.
(4) If Debtor or Lessee becomes insolvent within the
meaning of the Code, files or notifies FFCA that it intends to
file a petition under the Code, initiates a proceeding under any
similar law or statute relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts (collectively,
an "Action"), becomes the subject of either a petition under the
Code or an Action, or is not generally paying its debts as the
same become due or if Debtor or Lessee becomes the subject of an
involuntary petition under the Code or other similar involuntary
Action (in which case Debtor shall be required to provide FFCA
with immediate notice of the commencement or filing of such
involuntary petition or Action), and any of the following shall
have occurred: (i) the involuntary petition or involuntary
Action shall not have been dismissed within 60 days of the date
on which it was filed or otherwise commenced, (ii) an order for
relief under the Code (or similar order) shall have been entered
by the court in the involuntary proceeding or involuntary
Action, or (iii) the court having jurisdiction over such
involuntary proceeding or involuntary Action (upon motion or other
request for relief by the party against whom the involuntary
petition or involuntary Action was filed or otherwise commenced)
shall not have granted FFCA full and final relief from the
automatic stay of Section 362 of the Code and from any stay
issued under Section 105 of the Code (or any similar stays or
injunctions) within 30 days of the filing or commencement of
such involuntary petition or involuntary Action so that FFCA is
thereafter free to exercise any and all of its rights and
remedies under the Loan Documents.
(5) If there is an "Event of Default" under any other Loan
Document or the Master Lease or a breach or default, after the
passage of all applicable notice and cure or grace periods,
under any of the Other Agreements.
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(6) If there is a breach of the Fixed Charge Coverage Ratio
requirement and FFCA shall have given Debtor notice thereof and
Debtor shall have failed within a period of 30 days from the
delivery of such notice (the "Cure Period") to either (i) pay to
FFCA the FCCR Amount (without premium or penalty) with respect
to such of the Premises (starting with the Premises with the
lowest Fixed Charge Coverage Ratio and proceeding in ascending
order to the Premises with the next lowest Fixed Charge Coverage
Ratio) as is necessary to cure the breach of the Fixed Charge
Coverage Ratio requirement and for which the then Fixed Charge
Coverage Ratio (with the definitions in Section 7.B being deemed
to be modified as applicable to provide for the calculation of
the Fixed Charge Coverage Ratio for each such Premises on an
individual basis rather than on an aggregate basis with the
other Premises) is below 1.25:1 (each, a "Subject Premises"), or (ii)
prepay the Note or Notes corresponding to the Subject Premises
in whole but not in part (without premium or penalty), or (iii)
notify FFCA of Debtor's election to substitute a Substitute
Premises for each Subject Premises in accordance with the terms
of Section 13 (the failure of Debtor to complete such
substitution within 60 days after FFCA shall have given the
notice discussed above shall be deemed to be an Event of Default
without further notice or demand of any kind being required).
For purposes of the preceding sentence, "FCCR Amount" means that
sum of money which, when subtracted from the outstanding
principal amount of the Note corresponding to a Subject Premises
(to the extent applicable), and assuming the resulting principal
balance is reamortized in equal monthly payments over the
remaining term of such Note at the rate of interest set forth
therein, will result in an adjusted aggregate Fixed Charge
Coverage Ratio for all of the Premises of at least 1.25:1 based
on the prior year's operations. Promptly after Debtor's payment
of the FCCR Amount, Debtor and FFCA shall execute an amendment
to each such Note in form and substance reasonably acceptable to
FFCA reducing the principal amount payable to FFCA under such
Note and reamortizing the principal amount of such Note in equal
monthly payments over the then remaining term of such Note at
the rate of interest set forth therein.
Notwithstanding the foregoing, to the extent that, in
accordance with the provisions of Section 7.B, FFCA shall have
imposed an aggregate Fixed Charge Coverage Ratio requirement
with respect to all of the Premises corresponding to the Loans
in any Loan Pool, then, in order to prevent an Event of Default
from occurring by reason of a breach of such aggregate Fixed
Charge Coverage Ratio requirement, Debtor, within the Cure
Period must either (i) pay to FFCA the Modified FCCR Amount
(without premium or penalty) within the aforesaid 30 day period
with respect to such of the Premises corresponding to the Loans
in such Loan Pool (starting with the Premises with the lowest
Fixed Charge Coverage Ratio and proceeding in ascending order to
the Premises with the next lowest Fixed Charge Coverage Ratio)
as is necessary to cure the breach of such aggregate Fixed
Charge Coverage Ratio requirement and for which the then Fixed
Charge Coverage Ratio (with the definitions relating to the
Fixed Charge Coverage Ratio being deemed to be modified as
applicable to provide for the calculation of the Fixed Charge
Coverage Ratio for each such Premises on an individual basis
rather than on an aggregate basis with the other Premises
corresponding to the Loans in such Loan Pool) is below 1.25:1
(each a "Selected Premises"), or (ii) prepay the Note or Notes
corresponding to the Selected Premises in whole but not in part
(without premium or penalty) within the Cure Period, or (iii)
notify FFCA of Debtor's election to substitute a Substitute
Premises for each
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Selected Premises in accordance with the terms of Section 13 (the failure
of Debtor to complete such substitution within 60 days after FFCA
shall have given Debtor the notice discussed above shall be
deemed to be an Event of Default without further notice or
demand of any kind being required). For purposes of the
preceding sentence, "Modified FCCR Amount" means that sum of
money which, when subtracted from the outstanding principal
amount of the Note corresponding to a Selected Premises (to the
extent applicable), and assuming the resulting principal balance
is reamortized in equal monthly payments over the remaining term
of such Note at the rate of interest set forth therein, will
result in an adjusted aggregate Fixed Charge Coverage Ratio for
all of the Premises corresponding to the Loans in such Loan Pool
of at least 1.25:1 based on the prior year's operations.
Promptly after Debtor's payment of the Modified FCCR Amount,
Debtor and FFCA shall execute an amendment to each such Note in
form and substance reasonably acceptable to FFCA reducing the
principal amount payable to FFCA under such Note and
reamortizing the principal amount of such Note in equal monthly
payments over the then remaining term of such Note at the rate
of interest set forth therein.
B. Upon and during the continuance of an Event of Default, subject to the
limitations set forth in subsection A, FFCA may declare all or any part of the
obligations of Debtor under the Notes, this Agreement and any other Loan
Document to be due and payable, and the same shall thereupon become due and
payable without any presentment, demand, protest or notice of any kind except as
otherwise expressly provided herein, and, except as otherwise provided herein or
prohibited by applicable law, Debtor hereby waives notice of intent to
accelerate the obligations secured by the Mortgages and notice of acceleration.
Thereafter, FFCA may exercise, at its option, concurrently, successively or in
any combination, all remedies available at law or in equity, including without
limitation any one or more of the remedies available under the Notes, the
Mortgages or any other Loan Document. Neither the acceptance of this Agreement
nor its enforcement shall prejudice or in any manner affect FFCA's right to
realize upon or enforce any other security now or hereafter held by FFCA, it
being agreed that FFCA shall be entitled to enforce this Agreement and any other
security now or hereafter held by FFCA in such order and manner as it may in its
absolute discretion determine. No remedy herein conferred upon or reserved to
FFCA is intended to be exclusive of any other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. Every power or remedy
given by any of the Loan Documents to FFCA, or to which FFCA may be otherwise
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by FFCA.
11. ASSIGNMENTS. A. FFCA may assign in whole or in part its rights under
this Agreement, including, without limitation, in connection with any Transfer,
Participation and/or Securitization. Upon any unconditional assignment of
FFCA's entire right and interest hereunder, FFCA shall automatically be
relieved, from and after the date of such assignment, of liability for the
performance of any obligation of FFCA contained herein.
B. Debtor shall not, without the prior written consent of
FFCA, sell, assign, transfer, mortgage, convey, encumber or grant any
easements or other rights or interests of any kind in the Premises,
except for Third Party Leases, any of Debtor's rights under this
Agreement or any interest in Debtor, whether voluntarily, involuntarily or by
operation of law or otherwise, including, without
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limitation, by merger, consolidation, dissolution or otherwise, except,
subsequent to the Closing, as expressly permitted by the Mortgages.
12. INDEMNITY. Debtor agrees to indemnify, hold harmless and
defend FFCA and its directors, officers, shareholders, employees, successors,
assigns, agents, contractors, subcontractors, experts, licensees, affiliates,
lessees, lenders, mortgagees, trustees and invitees, as applicable
(collectively, the "Indemnified Parties"), for, from and against any and all
losses, costs, claims, liabilities, damages and expenses, including,
without limitation, reasonable attorneys' fees
and court costs, arising as the result of an Environmental Condition
and/or a breach of any of the representations, warranties, covenants,
agreements or obligations of Debtor set forth in this Agreement or any other
Loan Document. Without limiting the generality of the foregoing, such indemnity
shall include, without limitation, any engineering, governmental inspection and
reasonable attorneys' fees and expenses that the Indemnified Parties may incur
by reason of any representation set forth in this Agreement being false, or by
reason of any investigation or claim of any Governmental Authority in connection
therewith.
13. SUBSTITUTION. Debtor shall have the right to obtain a release of a
Premises by substituting a Substitute Premises for such Premises if (a)
permitted by the terms of Section 10.A(6), (b) subject to thelimitation set
forth in subitem (xii) of this Section 13, Debtor concludes, in Debtor's
reasonable judgment, that it would be in Debtor's best interest to cease
business operations at such Premises based upon unacceptable and substandard
operating performance of such Premises, or (c) subject to the limitation set
forth in subitem (xii) of this Section 13, such Premises is damaged or destroyed
and Debtor concludes, in Debtor's reasonable judgment, that it would be in its
best interest not to repair or restore such Premises based upon unacceptable
performance of such Premises, in all cases subject to fulfillment of the
following conditions:
(i) With respect to a substitution permitted by the terms of
Section 10.A(6), Debtor shall provide FFCA with notice of its
intention to substitute a Substitute Premises within the
applicable time period contemplated by such section and the
closing of the substitution shall take place within the period
contemplated by such section. With respect to a substitution
pursuant to clauses (b) and (c), above, of this Section 13,
Debtor shall provide FFCA with notice of its intention to
substitute a Substitute Premises within 10 days after Debtor
decides to proceed with such substitution and the closing of
such substitution shall take place within the 30 day period
immediately following delivery of such notice.
(ii) Debtor must provide for the substitution of a
Substitute Premises, and the proposed Substitute Premises must:
(1) be a Uni-Mart Facility, in good
condition and repair, ordinary wear and tear excepted;
(2) have for the twelve month period
preceding the date of the closing of such substitution a Fixed
Charge Coverage Ratio (with the definitions of Section 7.B being
deemed to be modified if necessary and as applicable to provide
for a calculation of the Fixed Charge Coverage Ratio for each of
the Premises on an individual basis rather than on an aggregate
basis with the other Premises) at least equal to
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the Fixed Charge Coverage Ratio for the Premises being replaced and the
substitution must not cause a breach of any Fixed Charge Coverage Ratio
requirement otherwise set forth in this Agreement;
(3) be owned by and vested in Debtor, free
and clear of all liens and encumbrances, except such matters as
are acceptable to FFCA (the "Substitute Premises Permitted
Exceptions"); and
(4) have a fair market value no less than
the greater of the then fair market value of the Premises to be
replaced or the fair market value of such Premises as of the
Closing, all as reasonably determined by FFCA's in-house
inspectors and underwriters.
(iii) FFCA shall have inspected and approved the
Substitute Premises utilizing FFCA customary site inspection and
underwriting approval criteria. Debtor shall have reimbursed
FFCA for all of its costs and expenses incurred with respect to
such proposed substitution, including, without limitation,
FFCA's third-party and/or in-house site inspectors' costs and
expenses with respect to the proposed Substitute Premises.
Debtor shall be solely responsible for the payment of all costs
and expenses resulting from such proposed substitution,
including, without limitation, the cost of title insurance and
endorsements, survey charges, stamp taxes, mortgage taxes,
transfer fees, escrow and recording fees, the cost of
environmental reports and/or environmental insurance and the
attorneys' fees and expenses of counsel to Debtor and FFCA.
(iv) FFCA shall have received a preliminary title report and
irrevocable commitment to insure title by means of a mortgagee's
ALTA extended coverage policy of title insurance (or its
equivalent, in the event such form is not issued in the
jurisdiction where the proposed Substitute Premises is located)
for such proposed Substitute Premises issued by Title Company
showing good and marketable title in Debtor and committing to
insure FFCA's first priority lien upon and security interest in
the proposed Substitute Premises, subject only to the Substitute
Premises Permitted Exceptions and containing endorsements
substantially comparable to those required by FFCA at the
Closing
(v) FFCA shall have received a current ALTA survey of such
proposed Substitute Premises, the form of which shall be
comparable to those received by FFCA at the Closing and
sufficient to cause the standard survey exceptions set forth in
the title policy referred to in the preceding subsection to be
deleted.
(vi) FFCA shall have received an Environmental Policy with
respect to the Substitute Premises as is acceptable to FFCA in
its sole discretion.
(vii) Debtor shall deliver, or cause to be delivered,
with respect to Debtor and the Substitute Premises, opinions of
Counsel in form and substance comparable to those received at
Closing (but also addressing such matters unique to the
Substitute Premises as may be reasonably required by FFCA).
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(viii) No Event of Default (other than the breach of the
Fixed Charge Coverage Ratio covenant set forth in Section 7.B in
the case of a substitution pursuant to clause (a) above, of this
Section 13) shall have occurred under any of the Loan
Documents.
(ix) Debtor shall have executed such documents as are comparable
to the security documents executed and delivered at Closing, as
applicable (but with such revisions as may be reasonably
required by FFCA to address matters unique to the Substitute
Premises) or amendments to such documents, including, without
limitation, a Mortgage, amendment to the Master Lease,
Memorandum and UCC-1 Financing Statements (the "Substitute
Documents"), to provide FFCA with a first priority lien on the
proposed Substitute Premises, subject only to the Substitute
Premises Permitted Exceptions, and all other rights, remedies
and benefits with respect to the proposed Substitute Premises
which FFCA holds in the Premises to be replaced, all of which
documents shall be in form and substance reasonably satisfactory
to FFCA.
(x) The representations and warranties set forth in the
Substitute Documents and Section 6 of this Agreement applicable
to the proposed Substitute Premises shall be true and correct in
all material respects as of the date of substitution, and Debtor
shall have delivered to FFCA an officer's certificate certifying
to that effect.
(xi) Debtor shall have delivered to FFCA certificates of
insurance showing that insurance required by the Substitute
Documents is in full force and effect.
(xii) Debtor may not substitute Substitute Premises for more
than 5 Premises, in the aggregate, as a result of the exercise
by Debtor of its rights under clauses (b) and (c) above of this
Section 13.
Upon satisfaction of the foregoing conditions with respect to the
release of a
Premises:
(a) the proposed Substitute Premises shall be deemed
substituted for the Premises to be replaced;
(b) the Loan Amount for the Substitute Premises shall be
the same as for the replaced Premises;
(c) the Substitute Premises shall be referred to herein as
a "Premises" and included within the definition of "Premises"
and shall secure the same Obligations (as defined in the
Mortgages) as were secured by the Premises that were replaced;
(d) the Substitute Documents shall be dated as of the date
of the substitution; and
(e) FFCA will release, or cause to be released, the lien of
the Mortgage, UCC-1 Financing Statements and any other Loan
Documents encumbering the replaced Premises.
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If a Substitute Premises is not located in Premises County, the Loan Documents
corresponding to the Loan secured by such Substitute Premises shall not secure
the obligations of Debtor Entities contained in any other Loan Documents or
Other Agreements.
14. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Agreement
shall be in writing and given by (i) hand delivery, (ii) facsimile, (iii)
express overnight delivery service or (iv) certified or registered mail, return
receipt requested, and shall be deemed to have been delivered upon (a) receipt,
if hand delivered, (b) transmission, if delivered by facsimile, (c) the next
Business Day, if delivered by express overnight delivery service, or (d) the
third Business Day following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
If to Debtor: N. Gregory Petrick
Uni Realty of Luzerne, L.P.
477 East Beaver Avenue
State College, PA 16801-5690
Telephone: (814) 234-6000
Telecopy: (814) 234-3277
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President and General Counsel
FFCA Acquisition Corporation
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (480) 585-4500
Telecopy: (480) 585-2226
B. Brokerage Commission. FFCA and Debtor represent and warrant to
each other that they have dealt with no real estate or mortgage
broker, agent, finder or other intermediary in connection with the
transactions contemplated by this Agreement. FFCA and Debtor shall
indemnify and hold each other harmless from and against any costs, claims or
expenses, including attorneys' fees, arising out of the breach of their
respective representations and warranties contained within this Section.
C. Waiver and Amendment. No provisions of this Agreement shall be
Deemed waived or amended except by a written instrument unambiguously
setting forth the matter waived or amended and signed by the party
against which enforcement of such waiver or amendment is sought.
Waiver of any matter shall not be deemed a waiver of the same or any
other matter on any future occasion.
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D. Captions. Captions are used throughout this Agreement for
convenience of reference only and shall not be considered in any
manner in the construction or interpretation hereof.
E. Intentionally Omitted.
F. Severability. The provisions of this Agreement shall be deemed
severable. If any part of this Agreement shall be held unenforceable,
the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give
maximum legal effect to the intention of the parties as expressed
therein.
G. Construction Generally. This is an agreement between parties
who are experienced in sophisticated and complex matters similar to
the transaction contemplated by this Agreement and is entered into by
both parties in reliance upon the economic and legal bargains
contained herein and shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which
prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party. Debtor and FFCA were each
represented by legal counsel competent in advising them of their
obligations and liabilities hereunder.
H. Other Documents. Each of the parties agrees to sign such other
And further documents as may be appropriate to carry out the intentions
expressed in this Agreement.
I. Attorneys' Fees. In the event of any judicial or other adversarial
proceeding between the parties concerning this Agreement, the prevailing party
shall be entitled to recover its attorneys' fees and other costs in addition to
any other relief to which it may be entitled. References in this Agreement to
the attorneys' fees and/or costs of FFCA shall mean both the fees and costs of
independent outside counsel retained by FFCA with respect to this transaction
and the fees and costs of FFCA's in-house counsel incurred in connection with
this transaction.
J. Entire Agreement. This Agreement and the other Loan Documents,
together with any other certificates, instruments or agreements to be delivered
in connection therewith, constitute the entire agreement between the
parties with respect to the subject matter hereof, and there are no other
representations, warranties or agreements, written or oral, between Debtor
and FFCA with respect to the subject matter of this Agreement. Notwithstanding
anything in this Agreement to the contrary, upon the execution and delivery of
this Agreement by Debtor and FFCA, the Commitment shall be deemed null and void
and of no further force and effect and the terms and conditions of this
Agreement shall control notwithstanding that such terms may be inconsistent with
or vary from those set forth in the Commitment.
K. Forum Selection; Jurisdiction; Venue; Choice of Law.
Debtor acknowledges that this Agreement was substantially negotiated
in the State of Arizona, the Agreement was signed by FFCA in the
State of Arizona and executed and delivered by Debtor in the State of
Arizona, all payments under the Notes will be delivered in the State of Arizona
and there are substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of any action
or proceeding arising out of this Agreement, the parties hereto hereby
expressly submit to the jurisdiction of all federal and state courts located
in the State of Arizona and Debtor consents that it may be served with any
process or paper by registered mail or by personal service within or without the
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State of Arizona in accordance with applicable law. Furthermore, Debtor waives
and agrees not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. It is the intent of the parties hereto that all
provisions of this Agreement shall be governed by and construed under the laws
of the State of Arizona, without giving effect to its principles of conflicts of
law. To the extent that a court of competent jurisdiction finds Arizona law
inapplicable with respect to any provisions hereof, then, as to those provisions
only, the laws of the states where the Premises are located shall be deemed to
apply. Nothing in this Section shall limit or restrict the right of FFCA to
commence any proceeding in the federal or state courts located in the states in
which the Premises are located to the extent FFCA deems such proceeding
necessary or advisable to exercise remedies available under this Agreement or
the other Loan Documents.
L. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original.
M. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of Debtor and FFCA and their respective successors and permitted
assigns, including, without limitation, any United States trustee, any debtor in
possession or any trustee appointed from a private panel.
N. Survival. Except for the conditions of Closing set forth in
Section 9, which shall be satisfied or waived as of the Closing Date, all
representations, warranties, agreements, obligations and indemnities of Debtor
and FFCA set forth in this Agreement shall survive the Closing.
O. Waiver of Jury Trial and Punitive, Consequential, Special and Indirect
Damages. DEBTOR AND FFCA HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR AND FFCA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER AND ANY OF THE
OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS
WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY IT AGAINST THE OTHER OR ANY OF THE OTHER'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED
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HERETO. THE WAIVER BY DEBTOR AND FFCA OF ANY RIGHT THEY MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE
PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
P. Transfers, Participations and Securitizations. (1) A
material inducement to FFCA's willingness to complete the
transactions contemplated by the Loan Documents is Debtor's agreement
that FFCA may, at any time, complete a Transfer, Participation or
Securitization with respect to any Note, Mortgage and/or any of the
other Loan Documents or any or all servicing rights with respect
thereto.
(2) Debtor agrees to cooperate in good faith with FFCA in
connection with any such Transfer, Participation and/or
Securitization of any Note, Mortgage and/or any of the other Loan
Documents, or any or all servicing rights with respect thereto,
including, without limitation, (i) providing such documents,
financial and other data, and other information and materials (the
"Disclosures") which would typically be required with respect to
Debtor and Lessee by a purchaser, transferee, assignee, servicer,
participant, investor or rating agency involved with respect to such
Transfer, Participation and/or Securitization, as applicable; provided,
however, Debtor and Lessee shall not be required to make Disclosures of
any confidential information or any information which has not
previously been made public unless required by applicable federal or state
securities laws; and (ii) amending the terms of the transactions evidenced by
the Loan Documents to the extent necessary so as to satisfy the requirements of
purchasers, transferees, assignees, servicers, participants, investors or
selected rating agencies involved in any such Transfer, Participation
or Securitization, so long as such amendments would not have a material adverse
effect upon Debtor, Lessee or the transactions contemplated hereunder.
(3) Debtor consents to FFCA providing the Disclosures, as well s any other
information which FFCA may now have or hereafter acquire with respect to the
Premises or the financial condition of Debtor and Lessee to each purchaser,
transferee, assignee, servicer, participant, investor or rating agency involved
with respect to such Transfer, Participation and/or Securitization, as
applicable. FFCA and Debtor (and their respective Affiliates) shall each pay
their own attorneys fees and other out-of-pocket expenses incurred in connection
with the performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in this Agreement
or the other Loan Documents from and after the closing of a Securitization,
Participation or Transfer with respect to some or all of the Loans or any loan
evidenced by any Other Agreement:
(a) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document, Master Lease or Other Agreement which relates to a
loan or sale/leaseback transaction which has not been the
subject of a Securitization, Participation or Transfer shall not
constitute an Event of Default or a breach or default, as
applicable, under any Loan Document, Master Lease, or Other
Agreement which relates to a loan which has been the subject of
a Securitization, Participation or Transfer;
(b) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document, Master Lease or Other Agreement which relates to a
loan which is included in any Loan Pool shall
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not constitute an Event of Default or a breach or default, as
applicable, under any Loan Document, Master Lease, or Other
Agreement which relates to a loan which is included in any other
Loan Pool;
(c) the Loan Documents corresponding to the Notes in any
Loan Pool shall not secure the obligations of any of the Debtor
Entities contained in any Loan Document or Other Agreement which
does not correspond to a loan in such Loan Pool; and
(d) the Loan Documents and Other Agreements which do not
correspond to a loan in any Loan Pool shall not secure the
obligations of any of the Debtor Entities contained in any Loan
Document or Other Agreement which does correspond to a loan in
such Loan Pool.
IN WITNESS WHEREOF, Debtor and FFCA have entered into this
Agreement as of the date first above written.
FFCA:
FFCA FUNDING CORPORATION, a Delaware
corporation
By /S/ MARK E. WOOD
Printed Name: Mark E. Wood
Its: Vice President
DEBTOR:
UNI REALTY OF LUZERNE, L.P.,
a Delaware limited partnership
By: Uni Realty of Luzerne, Inc., a
Delaware corporation, its
general partner
By /S/ N. GREGORY PETRICK
N. Gregory Petrick
Senior Vice President
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EXHIBIT 20.1
LOAN AGREEMENT
(Acquisition)
THIS LOAN AGREEMENT (this "Agreement") is made as of April 21, 2000, by
and between FFCA ACQUISITION CORPORATION, a Delaware corporation ("FFCA"), whose
address is 17207 North Perimeter Drive, Scottsdale, Arizona 85255, and UNI
REALTY OF WILKES-BARRE, L.P., a Delaware limited partnership ("Debtor"), whose
address is 477 East Beaver Avenue, State College, Pennsylvania 16801-5690.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms
used in this Agreement shall have the meanings set forth in Section
1. Debtor has requested from FFCA, and applied for, the Loans to
provide long-term financing for the Premises, and for no other
purpose whatsoever. Each Loan will be evidenced by a Note and
secured by a first priority security interest in the corresponding
Premises pursuant to a Mortgage. FFCA has committed to make the Loans pursuant
to the terms and conditions of the Commitment, this Agreement and the other Loan
Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. Definitions. The following terms shall have the following
meanings for all purposes of this Agreement:
"Action" has the meaning set forth in Section 10.A(4).
"Affiliate" means any Person which directly or indirectly
controls, is under common control with, or is controlled by any other
Person. For purposes of this definition, "controls", "under common
control with" and "controlled by" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of
voting securities or otherwise.
"Business Day" means any day on which FFCA is open for business other than
a Saturday, Sunday or a legal holiday, ending at 5:00 PM Phoenix, Arizona time.
"Capital Lease" has the meaning set forth in Section 7.B.
"Closing" has the meaning set forth in Section 4.
"Closing Date" has the meaning set forth in Section 4.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
<PAGE> 64
"Commitment" means that certain Commitment Letter dated February 4, 2000
(as amended February 28, 2000), between FFCA and Lessee, and any amendments or
supplements thereto.
"Counsel" means legal counsel to Debtor and Lessee, licensed in the
state(s) in which (i) the Premises are located, (ii) Debtor is incorporated or
formed and (iii) Debtor and Lessee reside or maintain their chief executive
offices, as selected by Debtor and approved by FFCA.
"Debt" has the meaning set forth in Section 7.B.
"Debtor Entities" means, collectively, Debtor and Lessee and any Affiliate
of Debtor and Lessee.
"Default Rate" has the meaning set forth in the Notes.
"Depreciation and Amortization" has the meaning set forth in
Section 7.B.
"Disclosures" has the meaning set forth in Section 14.P.
"Environmental Condition" means any condition with respect to
soil, surface waters, groundwaters, land, stream sediments, surface or
subsurface strata, ambient air and any environmental medium comprising or
surrounding any of the Premises, whether or not yet discovered, which could
or does result in any damage, loss, cost, expense, claim, demand, order or
liability to or against Debtor, Lessee or FFCA by any third party (including,
without limitation, any Governmental Authority), including, without limitation,
any condition resulting from the operation of Debtor's or Lessee's business at
the Premises and/or the operation of the business of any other property owner or
operator in the vicinity of the Premises and/or any activity or operation
formerly conducted by any person or entity on or off the Premises.
"Environmental Indemnity Agreement" or "Environmental Indemnity
Agreements" means, as the context may require, the environmental indemnity
agreement dated as of the date of this Agreement to be executed by Debtor for
the benefit of the Indemnified Parties and such other parties as are identified
in such agreement with respect to a Premises or the environmental indemnity
agreements dated as of the date of this Agreement to be executed by Debtor for
the benefit of the Indemnified Parties and such other parties as are identified
in such agreement with respect to all of the Premises, as the same may be
amended from time to time. An Environmental Indemnity Agreement will be
executed for each Premises.
"Environmental Insurer" means American International Specialty Lines
Insurance Company or such other environmental insurance company as FFCA may
select.
"Environmental Laws" means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to Hazardous Materials, Regulated Substances or USTs and/or the
protection of human health or the environment by reason of a Release or a
Threatened Release of Hazardous Materials or Regulated Substances or relating to
liability for or costs of Remediation or prevention of Releases. "Environmental
Laws" includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations, rulings, orders or decrees promulgated
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pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to USTs); the Solid Waste Disposal Act; the Clean Water Act; the Clean
Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the
Occupational Safety and Health Act; the Federal Water Pollution Control Act; the
Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act;
the National Environmental Policy Act; and the River and Harbors Appropriation
Act. "Environmental Laws" also includes, but is not limited to, any present and
future federal, state and local laws, statutes, ordinances, rules, regulations
and the like, as well as common law: conditioning transfer of property upon a
negative declaration or other approval of a Governmental Authority of the
environmental condition of the property; requiring notification or
disclosure of Releases or other environmental condition of the
Premises to any Governmental Authority or other person or entity,
whether or not in connection with transfer of title to or interest in
property; imposing conditions or requirements relating to Hazardous
Materials, Regulated Substances or USTs in connection with permits or
other authorization for lawful activity; relating to nuisance,
trespass or other causes of action related to Hazardous Materials,
Regulated Substances or USTs; and relating to wrongful death,
personal injury, or property or other damage in connection with the
physical condition or use of the Premises by reason of the presence
of Hazardous Materials, Regulated Substances or USTs in, on, under or
above the Premises.
"Environmental Policies" means environmental insurance policies issued by
Environmental Insurer to FFCA with respect to the Premises, which Environmental
Policies shall be in form and substance satisfactory to FFCA in its sole
discretion.
"Equipment Loan Agreement" means that certain Equipment Loan
Agreement dated as of the date of this Agreement between FFCA and
Lessee, as the same may be amended from time to time.
"Equipment Note" has the meaning set forth in the Equipment Loan
Agreement.
"Equipment Payment Amount" has the meaning set forth in Section
7.B.
"Event of Default" has the meaning set forth in Section 10.
"FCCR Amount" has the meaning set forth in Section 10.A(6).
"Fee" means an underwriting, valuation, processing and
commitment fee equal to 1.0% of the sum of the Loan Amounts for all
of the Premises, which Fee shall be payable as set forth in Section
3.
"FFCA Payments" has the meaning set forth in Section 7.B.
"FFCA Entities" means, collectively, FFCA, Franchise Finance and any
Affiliate of FFCA or Franchise Finance.
"Fixed Charge Coverage Ratio" has the meaning set forth in
Section 7.B.
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"Franchise Finance" means Franchise Finance Corporation of
America, a Delaware corporation, and its successors.
"GAAP" means generally accepted accounting principles
consistently
applied.
"Governmental Authority" means any governmental authority,
agency, department, commission, bureau, board, instrumentality, court
or quasi-
governmental authority of the United States, the state(s) where the
Premises are
located or any political subdivision thereof.
"Gross Gas Profits" has the meaning set forth in Section 7.B.
"Gross Sales" has the meaning set forth in Section 7.B.
"Hazardous Materials" means (a) any toxic substance or hazardous
waste, substance, solid waste or related material, or any pollutant or
contaminant; (b) radon gas, asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
which contains dielectric fluid containing levels of polychlorinated biphenyls
in excess of federal, state or local safety guidelines, whichever are more
stringent, or any petroleum product; (c) any substance, gas, material or
chemical which is or may be defined as or included in the definition of
"hazardous substances," "toxic substances," "hazardous materials," "hazardous
wastes," "regulated substances" or words of similar import under any
Environmental Laws; and (d) any other chemical, material, gas or substance the
exposure to or release of which is or may be prohibited, limited or regulated
by any Governmental Authority that asserts or may assert jurisdiction over the
Premises or the operations or activity at the Premises, or any chemical,
material, gas or substance that does or may pose a hazard to the health and/or
safety of the occupants of the Premises or the owners and/or occupants of
property adjacent to or surrounding the Premises.
"Indemnified Parties" has the meaning set forth in Section 12.
"Interest Expense" has the meaning set forth in Section 7.B.
"Lessee" means Uni-Marts, Inc., a Delaware corporation, and its
successors and permitted assigns.
"Loan" or "Loans" means, as the context may require, the loan
for each Premises, or the loans for all of the Premises, described in
Section 2.
"Loan Amount" or "Loan Amounts" means, as the context may
require, the aggregate amount set forth in Section 2 or, with respect
to each Premises, the individual amount set forth in Exhibit A.
"Loan Documents" means, collectively, this Agreement, the Notes,
the Mortgages, the Environmental Indemnity Agreements, the UCC-1
Financing Statements and all other documents, instruments and agreements
executed in connection therewith or contemplated thereby.
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"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of
loans that are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to
which participating interests are granted to the same participant.
"Lost Note" has the meaning set forth in Section 7.C.
"Master Lease" means the lease between Debtor, as lessor, and
Lessee, as lessee, with respect to all of the Premises, as the same
may be amended from time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition, worth or operations of Debtor, Lessee, or any or all of the
Premises, including, without limitation, the operation of any of the Premises as
a Uni-Mart Facility and/or the value of any or all of the Premises, or (ii)
Debtor's ability to perform the obligations under the Loan Documents.
"Memoranda" has the meaning set forth in Section 9.L.
"Modified FCCR Amount" has the meaning set forth in Section
10.A(6).
"Mortgage" or "Mortgages" means, as the context may require, the deed of
trust or mortgage dated as of the date of this Agreement to be executed by
Debtor for the benefit of FFCA with respect to a Premises or the deeds of trust
or mortgages dated as of the date of this Agreement to be executed by Debtor for
the benefit of FFCA with respect to all of the Premises, as the same may be
amended from time to time. A Mortgage will be executed for each Premises.
"Net Income" has the meaning set forth in Section 7.B.
"Note" or "Notes" means, as the context may require, the
promissory note dated as of the date of this Agreement to be executed
by Debtor in favor of FFCA evidencing a Loan with respect to a
Premises or the promissory notes dated as of the date of this
Agreement to be executed by Debtor in favor of FFCA evidencing the
Loans with respect to all of the Premises, as the same may be
amended, restated and/or substituted from time to time, including,
without limitation, as a result of the payment of the FCCR Amount or
the Modified FCCR Amount pursuant to Section 10. A Note will be
executed for each Premises in the Loan Amount corresponding to such
Premises.
"Operating Lease Expense" has the meaning set forth in Section
7.B.
"Other Agreements" means, collectively, all agreements and
instruments between, among or by (1) any of the Debtor Entities, and,
or for the benefit of, (2) any of the FFCA Entities, including,
without limitation, promissory notes
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and guaranties; provided, however, the term "Other Agreements" shall not include
the agreements and instruments defined as the Loan Documents.
"Participation" means one or more grants by FFCA or any of the other FFCA
Entities to a third party of a participating interest in notes evidencing
obligations to repay secured or unsecured loans owned by FFCA or any of the
other FFCA Entities or any or all servicing rights with respect thereto.
"Permitted Amounts" means, with respect to any given level of
Hazardous Materials or Regulated Substances, that level or quantity
of Hazardous Materials or Regulated Substances in any form or
combination of forms the use, storage or release of which does not
constitute a violation of or require regulation under any
Environmental Laws and is customarily employed in the ordinary course
of, or associated with, similar businesses located in the states in
which the Premises are located.
"Permitted Exceptions" means those recorded easements,
restrictions, liens and encumbrances set forth as exceptions in the
title insurance policies issued by Title Company to FFCA and approved
by FFCA in connection with the Loans and the Third Party Leases.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"Premises" means the parcel or parcels of real estate
corresponding to the FFCA File Numbers and addresses identified on
Exhibit A attached hereto, together with all rights, privileges and
appurtenances associated therewith and all buildings, fixtures and
other improvements, equipment, trade fixtures, appliances and other
personal property now or hereafter located thereon (whether or not
affixed to such real estate). As used herein, the term "Premises"
shall mean either a singular property or all of the properties
collectively, as the context may require.
"Questionnaires" means the environmental questionnaires
completed by Debtor or Lessee with respect to the Premises and
submitted to Environmental Insurer in connection with the issuance of
the Environmental Policies.
"Regulated Substances" means "petroleum" and "petroleum-based
substances" or any similar terms described or defined in any
Environmental Laws and any applicable federal, state, county or local
laws applicable to or regulating USTs.
"Release" means any presence, release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials, Regulated
Substances or USTs.
"Remediation" means any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Material, Regulated Substances or USTs, any actions to prevent,
cure or mitigate any Release, any action to comply with any Environmental Laws
or with any permits issued pursuant thereto, any inspection, investigation,
study, monitoring, assessment, audit, sampling and testing, laboratory or other
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analysis, or any evaluation relating to any Hazardous Materials, Regulated
Substances or USTs.
"Securitization" means one or more sales, dispositions, transfers or
assignments by FFCA or any of the other FFCA Entities to a special
purpose corporation, trust or other entity identified by FFCA or any of the
other FFCA Entities of notes evidencing obligations to repay secured or
unsecured loans owned by FFCA or any of the other FFCA Entities (and, to the
extent applicable, the subsequent sale, transfer or assignment of such notes to
another special purpose corporation, trust or other entity identified by FFCA or
any of the other FFCA Entities), and the issuance of bonds, certificates, notes
or other instruments evidencing interests in pools of such loans, whether in
connection with a permanent asset securitization or a sale of loans in
anticipation of a permanent asset securitization. Each Securitization shall be
undertaken in accordance with all requirements which may be imposed by the
investors or the rating agencies involved in each such sale, disposition,
transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations, including, without limitation, laws relating to
FFCA's status as a real estate investment trust.
"Selected Premises" has the meaning set forth in Section
10.A(6).
"Subject Premises" has the meaning set forth in Section 10.A(6).
"Substitute Documents" has the meaning set forth in Section 13.
"Substitute Premises" means one or more parcels of real property
substituted for a Premises in accordance with the requirements of Section 13,
together with all rights, privileges and appurtenances associated therewith, and
all buildings, improvements and fixtures located thereon. For purposes of
clarity, where two or more parcels of real property comprise a Substitute
Premises, such parcels or interests shall be aggregated and deemed to constitute
the Substitute Premises for all purposes of this Agreement.
"Substitute Premises Permitted Exceptions" has the meaning set
forth in Section 13 .
"Third Party Leases" means the leases for certain of the
Premises set forth on Exhibit A-1, attached hereto, and any replacement or
renewal leases for the space leased pursuant to the leases listed on
Exhibit A-1.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient
air or any other environmental medium comprising or
surrounding the Premises which may result from such Release.
"Title Company" means the title insurance company described in
Section 4.
"Transfer" means one or more sales, transfers or assignments by FFCA or
any of the other FFCA Entities to a third party of notes evidencing obligations
to repay secured or unsecured loans owned by FFCA or any of the other FFCA
Entities or any or all servicing rights with respect thereto.
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"UCC-1 Financing Statements" means such UCC-1 Financing
Statements as FFCA shall require to be executed and delivered by
Debtor with respect to the
transactions contemplated by this Agreement.
"Uni-Mart Facility" means a Uni-Mart or Orloski convenience store with or
without a gasoline station, as noted on Exhibit A, and such other ancillary uses
permitted by the Third Party Leases, that are not inconsistent with the
operations of such facilities.
"USTs" means any one or combination of tanks and associated piping systems
used in connection with the storage, dispensing and general use of Regulated
Substances.
2. TRANSACTION. On the terms and subject to the conditions set forth
in the Loan Documents, FFCA shall make the Loans. The Loans will be evidenced
by the Notes and secured by the Mortgages. Debtor shall repay the outstanding
principal amount of the Loans together with interest thereon in the
manner and in accordance with the terms and conditions of the Notes and the
other Loan Documents. The aggregate Loan Amount shall be $6,900,000.00,
allocated among the Premises as set forth on the attached Exhibit A. The Loans
shall be advanced at the Closing in cash or otherwise immediately available
funds subject to any prorations and adjustments required by this Agreement. The
Premises shall be leased to the Lessee pursuant to the Master Lease and, at
Closing, Debtor shall assign the Master Lease to FFCA pursuant to the
Mortgages.
3. UNDERWRITING, VALUATION, PROCESSING AND COMMITMENT FEE.
Debtor paid FFCA a portion of the Fee pursuant to the Commitment, and such
portion was deemed fully earned when received. The remainder of the Fee shall
be paid at the Closing and shall be deemed nonrefundable and fully earned upon
the Closing. The Fee constitutes FFCA's underwriting, valuation, processing and
commitment fee. The portion of the Fee paid and the balance due at Closing
shall be adjusted down (and returned or credited as appropriate) to reflect a
Fee equal to 1% of the actual Loan Amounts. In the event the transaction set
forth in this Agreement fails to close due to a breach or default by Debtor
under this Agreement, FFCA shall retain the portion of the Fee received by FFCA
(without affecting or limiting FFCA's remedies set forth in this Agreement).
4. CLOSING. (a) Each Loan shall be closed (the "Closing")
contemporaneously with the satisfaction of all of the terms and
conditions contained in this Agreement, but in no event shall the date of the
Closing be extended beyond April 20, 2000, unless such extension shall be
approved by FFCA in its sole discretion (the date on which the Closing shall
occur is referred to herein as the "Closing Date").
b) FFCA has ordered a title insurance commitment for each
Premises from Lawyers Title Insurance Corporation ("Title Company").
Prior to the Closing Date, the parties hereto shall deposit with
Title Company all documents and moneys necessary to comply with their
obligations under this Agreement. All costs of such transaction shall be
borne by Debtor, including, without limitation, the cost of title insurance
and all endorsements required by FFCA, survey charges, UCC and litigation search
charges, the attorneys' fees of Debtor, attorneys' fees and expenses of FFCA,
the cost of Environmental Policies to be delivered pursuant to Section 9.E,
FFCA's in-house site inspection costs and fees, stamp taxes, mortgage taxes,
transfer fees, escrow and recording fees and site inspection fees for the
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Premises. All real and personal property and other applicable taxes
and assessments and other charges relating to the Premises which are due
and payable on or prior to the Closing Date as well as taxes and assessments due
and payable subsequent to the Closing Date but which Title Company requires to
be paid at Closing as a condition to the issuance of the title insurance policy
described in Section 9.C, shall be paid by Debtor at or prior to the Closing.
The Closing documents shall be dated as of the Closing Date.
Debtor and FFCA hereby employ Title Company to act as escrow
agent in connection with the transaction described in this Agreement.
Title Company shall not cause the transaction to close unless and
until it has received written instructions from FFCA and Debtor to do
so. Debtor and FFCA will deliver to Title Company all documents, pay
to Title Company all sums and do or cause to be done all other things
necessary or required by this Agreement, in the reasonable judgment
of Title Company, to enable Title Company to comply herewith and to
enable any title insurance policy provided for herein to be issued.
Title Company is authorized to pay, from any funds held by it for
FFCA's or Debtor's respective credit all amounts necessary to procure the
delivery of such documents and to pay, on behalf of FFCA and Debtor, all
charges and obligations payable by them, respectively. Debtor will pay all
charges payable by it to Title Company. Title Company is authorized, in the
event any conflicting demand is made upon it concerning these instructions or
the escrow, at its election, to hold any documents and/or funds deposited
hereunder until an action shall be brought in a court of competent
jurisdiction to determine the rights of Debtor and FFCA or to
interplead such documents and/or funds in an action brought in any
such court. Deposit by Title Company of such documents and funds, after
deducting therefrom its charges and its expenses and attorneys' fees incurred in
connection with any such court action, shall relieve Title Company of all
further liability and responsibility for such documents and funds. Title
Company's receipt of this Agreement and opening of an escrow pursuant to this
Agreement shall be deemed to constitute conclusive evidence of Title Company's
agreement to be bound by the terms and conditions of this Agreement pertaining
to Title Company. Disbursement of any funds shall be made by wire transfer, as
directed by FFCA and Debtor. Title Company shall be under no obligation to
disburse any funds represented by check or draft, and no check or draft shall be
payment to Title Company in compliance with any of the requirements hereof,
until it is advised by the bank in which such check or draft is deposited that
such check or draft has been honored. Title Company is authorized to act upon
any statement furnished by the holder or payee, or a collection agent for the
holder or payee, of any lien on or charge or assessment in connection with the
Premises, concerning the amount of such charge or assessment or the amount
secured by such lien, without liability or responsibility for the accuracy of
such statement. The employment of Title Company as escrow agent shall not
affect any rights of subrogation under the terms of any title insurance policy
issued pursuant to the provisions thereof.
5. REPRESENTATIONS AND WARRANTIES OF FFCA. The representations
and warranties of FFCA contained in this Section are being made by
FFCA as of the date of this Agreement and the Closing Date to induce
Debtor to enter into this Agreement and consummate the transactions
contemplated herein, and Debtor has relied, and will continue to
rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. FFCA
represents and warrants to Debtor as follows:
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A. Organization of FFCA. FFCA has been duly formed, is
validly existing and has taken all necessary action to authorize
the execution, delivery and performance by FFCA of this
Agreement.
B. Authority of FFCA. The person who has executed this
Agreement on behalf of FFCA is duly authorized so to do.
C. Enforceability. Upon execution by FFCA, this
Agreement shall constitute the legal, valid and binding
obligation of FFCA, enforceable against FFCA in accordance with
its terms.
All representations and warranties of FFCA made in this
Agreement shall survive the Closing.
6. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The
representations and warranties of Debtor contained in this Section are being
made by Debtor as of the date of this Agreement and the Closing Date to induce
FFCA to enter into this Agreement and consummate the transactions contemplated
herein, and FFCA has relied, and will continue to rely, upon such
representations and warranties from and after the execution of this Agreement
and the Closing. Debtor represents and warrants to FFCA as follows:
A. Information and Financial Statements. Debtor has
delivered to FFCA financial statements (either audited financial
statements or, if Debtor does not have audited financial
statements, certified financial statements) and certain other
information concerning itself and Lessee, which financial
statements and other information are true, correct and complete
in all material respects; and no material adverse change has
occurred with respect to any such financial statements and other
information provided to FFCA since the date such financial
statements and other information were prepared or delivered to
FFCA. Debtor understands that FFCA is relying upon such
financial statements and information and Debtor represents that
such reliance is reasonable. All such financial statements were
prepared in accordance with GAAP and accurately reflect as of
the date of this Agreement and the Closing Date, the financial
condition of each individual or entity to which they pertain.
B. Organization and Authority. (1) Each of Debtor and
Lessee is duly organized or formed, validly existing and in good
standing under the laws of its state of incorporation or
formation, and qualified as a foreign corporation, partnership
or limited liability company, as applicable, to do business in
any jurisdiction where such qualification is required. All
necessary corporate, partnership or limited liability company
action has been taken to authorize the execution, delivery and
performance of this Agreement and the other Loan Documents.
(2) The person(s) who have executed this Agreement on
behalf of Debtor are duly authorized so to do.
C. Enforceability of Documents. Upon execution by Debtor
and Lessee this Agreement and the other Loan Documents shall
constitute the
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legal, valid and binding obligations of Debtor and Lessee,
respectively, enforceable against Debtor and Lessee in accordance with
their respective terms.
D. Litigation. There are no suits, actions, proceedings
or investigations pending or threatened against or involving
Debtor, Lessee or the Premises before any arbitrator or
Governmental Authority which might reasonably result in any
Material Adverse Effect.
E. Absence of Breaches or Defaults. Debtor and Lessee
are not, and the authorization, execution, delivery and
performance of this Agreement and the other Loan Documents will
not result, in any breach or default under any other document,
instrument or agreement to which Debtor or Lessee is a party or
by which Debtor, Lessee, the Premises or any of the property of
Debtor or Lessee is subject or bound. The authorization,
execution, delivery and performance of this Agreement and the
other Loan Documents will not violate any applicable law,
statute, regulation, rule, ordinance, code, rule or order.
F. Utilities. The Premises are served by ample public
utilities to permit full utilization of the Premises for their
intended purpose and all utility connection fees and use charges
will have been paid in full.
G. Intended Use and Zoning; Compliance With Laws. Debtor
intends to use each of the Premises solely for the operation of
a Uni-Mart Facility, and related ingress, egress and parking,
and for no other purposes. Except as disclosed on Exhibit B,
attached hereto, each of the Premises is in compliance with all
applicable zoning requirements and the use of each of the
Premises as a Uni-Mart Facility does not constitute a
nonconforming use under applicable zoning requirements, except
where such noncompliance will not have a Material Adverse
Effect. Except as disclosed on Exhibit B, attached hereto, the
Premises comply with all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and
approvals of each Governmental Authority having jurisdiction
over the Premises, including, without limitation, all health,
building, fire, safety and other codes, ordinances and
requirements, all applicable standards of the National Board of
Fire Underwriters and the Americans With Disabilities Act of
1990 and all policies or rules of common law, in each case, as
amended, and any judicial or administrative interpretation
thereof, including any judicial order, consent, decree or
judgment applicable to Debtor or Lessee, except where such
noncompliance will not have a Material Adverse Effect.
H. Area Development; Wetlands. No condemnation or
eminent domain proceedings affecting the Premises have been
commenced or, to the best of Debtor's knowledge, are
contemplated. To the best of Debtor's knowledge, the areas
where the Premises are located have not been declared blighted
by any Governmental Authority. The Premises and/or the real
property bordering the Premises are not designated by any
Governmental Authority as a wetlands.
I. Licenses and Permits; Access. Debtor or Lessee has all
required licenses and permits, both governmental and private, to
use and operate each
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Premises as a Uni-Mart Facility, except to the extent the
failure to have such licenses or permits will not have a
Material Adverse Effect. There are adequate rights of access to
public roads and ways available to the Premises for unrestricted
ingress and egress and otherwise to permit full utilization of
the Premises for their intended purposes and all such public
roads and ways have been completed and dedicated to public use.
J. Condition of Premises. The Premises, including the
equipment located thereon, are of good workmanship and
materials, fully equipped and operational, in good condition and
repair, free from structural defects, clean, orderly and
sanitary, safe, well-lit, landscaped, decorated, attractive and
wellmaintained, except where the failure of the Premises or
equipment to be in such condition will not have a Material
Adverse Effect.
K. Environmental. Debtor is fully familiar with the
present use of the Premises, and, after due inquiry, Debtor has
become generally familiar with the prior uses of the Premises.
Except as disclosed in the Questionnaires, no Hazardous
Materials or Regulated Substances have been used, handled,
manufactured, generated, produced, stored, treated, processed,
transferred or disposed of at or on the Premises, except in
Permitted Amounts and in compliance with Environmental Laws,
except to the extent such Hazardous Materials or Regulated
Substances would not have a Material Adverse Effect, and no
Release or Threatened Release has occurred at or on the Premises
which would have a Material Adverse Effect. Except as disclosed
in the Questionnaires, the activities, operations and business
undertaken on, at or about the Premises, including, but not
limited to, any past or ongoing alterations or improvements at
the Premises, are and have been at all times, in compliance with
all Environmental Laws except where such noncompliance would not
have a Material Adverse Effect. No further action is required
to remedy any Environmental Condition or violation of, or to be
in full compliance with, any Environmental Laws, and no lien has
been imposed on the Premises by any Governmental Authority in
connection with any Environmental Condition, the violation or
threatened violation of any Environmental Laws or the presence
of any Hazardous Materials, Regulated Substances or USTs on or
off the Premises.
Except as disclosed in the Questionnaires, there is no
pending or threatened litigation or proceeding before any
Governmental Authority in which any person or entity alleges the
violation or threatened violation of any Environmental Laws or
the presence, Release, Threatened Release or placement on or at
the Premises of any Hazardous Materials, Regulated Substances or
USTs, or of any facts which would give rise to any such action,
nor has Debtor except as disclosed in the Questionnaires (a)
received any notice (and Debtor has no actual knowledge) that
any Governmental Authority or any employee or agent thereof has
determined, threatens to determine or requires an investigation
to determine that there has been a violation of any
Environmental Laws at, on or in connection with the Premises or
that there exists a presence, Release, Threatened Release or
placement of any Hazardous Materials, Regulated Substances or
USTs on or at the Premises, or the use, handling, manufacturing,
generation, production, storage, treatment, processing,
transportation or disposal of any Hazardous Materials, Regulated
Substances or USTs at or on the Premises; (b) received any
notice under the citizen suit provision of any Environmental Law
in connection with the Premises or any facilities, operations or
activities
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conducted thereon, or any business conducted in connection
therewith; or (c) received any request for inspection, request
for information, notice, demand, administrative inquiry or any
formal or informal complaint or claim with respect to or in
connection with the violation or threatened violation of any
Environmental Laws or existence of Hazardous Materials,
Regulated Substances or USTs relating to the Premises or any
facilities, operations or activities conducted thereon or any
business conducted in connection therewith. FFCA has charged
Debtor a fee for the Environmental Policies. Debtor
acknowledges that the Environmental Policies are for the sole
protection of FFCA and will not protect Debtor or provide Debtor
with any coverage thereunder. To the best of Debtor's
knowledge, the information and disclosures in the Questionnaires
is true, correct and complete in all material respects, FFCA and
Environmental Insurer may rely on such information and
disclosures, and the person or persons executing the
Questionnaires were duly authorized to do so. Debtor
acknowledges and agrees that Environmental Insurer may rely on
the environmental representations and warranties set forth in
the preceding subsection K, that Environmental Insurer is an
intended third-party beneficiary of such representations and
warranties and that Environmental Insurer shall have all rights
and remedies available at law or in equity as a result of a
breach of such representations and warranties, including, to the
extent applicable, the right of subrogation.
L. Title to Premises; First Priority Lien. Fee title to
each of the Premises is vested in Debtor, free and clear of all
liens, encumbrances, charges and security interests of any
nature whatsoever, except the Permitted Exceptions. Debtor or
Lessee is the owner of all equipment, trade fixtures, appliances
and other personal property located on or at each of the
Premises free and clear of all liens, encumbrances, charges and
security interests of any nature whatsoever. Upon Closing, FFCA
shall have a first priority lien upon and security interest in
each of the Premises pursuant to the Mortgages and the UCC- 1
Financing Statements.
M. No Other Agreements and Options. Neither Debtor,
Lessee nor the Premises are subject to any commitment,
obligation, or agreement, including, without limitation, any
right of first refusal, option to purchase or lease granted to a
third party, which could or would prevent or hinder FFCA in
making the Loans or exercising any of its rights or remedies
under the Loan Documents or prevent or hinder Debtor from
fulfilling its obligations under this Agreement or the other
Loan Documents.
N. No Mechanics' Liens. There are no outstanding
accounts payable which if not paid timely would have a Material
Adverse Effect, nor are there any mechanics' liens, or rights to
claim a mechanics' lien in favor of any materialman, laborer, or
any other person or entity in connection with labor or materials
furnished to or performed on any portion of the Premises and no
work has been performed or is in progress nor have materials
been supplied to the Premises or agreements entered into for
work to be performed or materials to be supplied to the Premises
prior to the date hereof, which will not have been fully paid
for on or before the Closing Date, or which might provide the
basis for the filing of such liens against the Premises or
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any portion thereof, the existence, nonpayment or filing of
which would have a Material Adverse Effect; Debtor shall be responsible
for any and all claims for mechanics' liens and accounts payable that have
arisen or may subsequently arise due to agreements entered into for and/or
any work performed on, or materials supplied to the Premises prior to the
Closing Date; Debtor has made no contract or arrangement of any kind the
performance of which by the other party thereto would give
rise to a lien on the Premises, the nonpayment of which would
have a Material Adverse Effect; and Debtor shall and does
hereby agree to defend, indemnify and forever hold FFCA and
FFCA's designees harmless for, from and against any and all such
mechanics' lien claims, accounts payable or other commitments
relating to the Premises.
O. No Reliance. Debtor acknowledges that FFCA did not prepare or
assist in the preparation of any of the projected financial
information used by Debtor in analyzing the economic viability
and feasibility of the transaction contemplated by this
Agreement. Furthermore, Debtor acknowledges that it has not
relied upon, nor may it hereafter rely upon, the analysis
undertaken by FFCA in determining the Loan Amounts, and such
analysis will not be made available to Debtor.
P. Nonconsolidation. (1) Debtor maintains correct and complete
books and records of account separate from all other Persons.
Where necessary or appropriate, Debtor has disclosed the nature
of the transaction contemplated by the Loan Documents and
Debtor's independent status to its creditors. The Premises and
all personal property and inventory located thereon represent
all of the assets owned or leased by Debtor as of the date
hereof, and Debtor has not commingled its assets and its
liabilities with those of any other Person.
(2) Debtor maintains its own checking account or accounts
with commercial banking institutions separate from other
Persons.
(3) To the extent that Debtor shares the same employees
with other Persons, the salaries of and the expenses related to
providing benefits to such employees have been fairly and
nonarbitrarily allocated among such Persons, with the result
that each such Person bears its fair share of the salary and
benefit costs associated with all such common employees.
(4) To the extent that Debtor jointly contracts with other
Persons to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing are, and
at all times shall be, fairly and nonarbitrarily allocated among
such Persons, with the result that each such Person bears its
fair share of such costs. To the extent that Debtor contracts
or does business with vendors or service providers where the
goods or services provided are or shall be partially for the
benefit of other Persons, the costs incurred in so doing are
fairly and nonarbitrarily allocated to or among such Persons for
whose benefit the goods or services are provided, with the
result that each such Person bears its fair share of such costs.
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(5) To the extent that Debtor or other Persons have
offices in the same location, there is a fair, appropriate and
nonarbitrary allocation of overhead among them, with the result
that each such Person bears its fair share of such expenses.
(6) Debtor has not incurred any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent,
including, without limitation, liability for the debts of any
other Person (and Debtor has not held itself out as being liable
for the debts of any other Person), other than the Loans and
trade and operational debt incurred in the ordinary course of
business with trade creditors and in amounts as are normal and
reasonable under the circumstances. Debtor is not a guarantor
of any obligations.
(7) Debtor is not presently a party to a pledge of its
assets for the benefit of other Persons. Debtor has not made
any loans or advances to any third party (including any
Affiliate or constituent party of Debtor).
(8) Debtor has conducted its affairs strictly in
accordance with its organizational documents including Debtor's
corporate general partner's organizational documents and has
observed all necessary, appropriate and customary formalities.
(9) Debtor does not hold itself out to the public or to
any of its individual creditors as being a unified entity with
assets and liabilities in common with any other Person.
(10) Debtor (i) is solvent, (ii) is able to pay its
obligations as they become due and (iii) is not and shall not be
engaged in any business or transaction for which its remaining
capital is or may be unreasonably small.
(11) Debtor has no actual intent to hinder, delay or
defraud creditors in connection with any of the transactions
contemplated herein or intent to incur (or belief that it is
incurring) debts beyond its ability to pay the same as they
mature.
(12) Debtor has not, as to itself or as to other Persons,
(a) commenced any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with
respect to Debtor or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to Debtor or its debts
or other Persons or their debts or (b) sought appointment of a
receiver, trustee, custodian or other similar official for
Debtor or for all or any substantial part of its or other
Person's assets or made a general assignment for the benefit of
Debtor's creditors.
All representations and warranties of Debtor made in this
Agreement shall be and will remain true and complete in all respects
as of and subsequent to the Closing Date as if made and restated in full as
of such time and shall survive the Closing.
7. Covenants. Debtor covenants to FFCA from and after the
Closing Date as follows:
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A. Inspections. Debtor shall, at all reasonable times,
(i) provide FFCA and FFCA's officers, employees, agents,
advisors, attorneys, accountants, architects, and engineers with
access to the Premises, all drawings, plans, and specifications
for the Premises in possession of Debtor or Lessee, all
engineering reports relating to the Premises in the possession
of Debtor or Lessee, the files, correspondence and documents
relating to the Premises, and the financial books and records,
including lists of delinquencies, relating to the ownership,
operation, and maintenance of the Premises (including, without
limitation, any of the foregoing information stored in any
computer files), (ii) allow such persons to make such
inspections, tests, copies, and verifications as FFCA considers
necessary without unreasonably interrupting Debtor's business
(to the extent reasonably possible) and upon reasonable advance
notice, and (iii) if Debtor is in breach of the Fixed Charge
Coverage Ratio requirement set forth in the following Subsection
B, pay expenses reasonably incurred by FFCA from time to time in
conducting such inspections, tests, copies and verifications
upon demand (such amounts to bear interest at the Default Rate
if not paid upon demand until paid).
B. Fixed Charge Coverage Ratio. Until such time as all
of Debtor's obligations under the Notes and the other Loan
Documents are paid, satisfied and discharged in full, Debtor
shall cause to be maintained an aggregate Fixed Charge Coverage
Ratio at all of the Premises of at least 1.25:1, as determined
on the last day of each fiscal year of Debtor (the "Date of
Determination"). For purposes of this Section, the term "Fixed
Charge Coverage Ratio" shall mean with respect to the twelve
month period of time immediately preceding the Date of
Determination (a "Period of Determination"), the ratio
calculated for such period of time, determined in accordance
with GAAP, of (a) the sum of Net Income, Depreciation and
Amortization, Interest Expense and Operating Lease Expense, less
a corporate overhead allocation (which shall equal the sum of 3%
of Gross Sales and 3% of Gross Gas Profits), to (b) the sum of
the FFCA Payments, Operating Lease Expense and the Equipment
Payment Amount.
For purposes of this Section, the following terms shall be
defined as set forth below:
"Capital Lease" shall mean any lease of any property
(whether real, personal or mixed) by Lessee with respect to
one or more of the Premises which lease would, in
conformity with GAAP, be required to be accounted for as a
capital lease on the balance sheet of Lessee. The term
"Capital Lease" shall not include any operating lease.
"Debt" shall mean as directly related to all of the
Premises and the Period of Determination (i) indebtedness
for borrowed money, (ii) obligations evidenced by bonds,
indentures, notes or similar instruments, (iii) obligations
to pay the deferred purchase price of property or services,
(iv) obligations under leases which should be, in
accordance with GAAP, accounted for as Capital Leases, and
(v) obligations under direct or indirect guarantees in
respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses
(i) through (iv) above.
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"Depreciation and Amortization" shall mean with
respect to all of the Premises the depreciation and
amortization accruing during any Period of Determination
with respect to Debtor as determined in accordance with
GAAP.
"Equipment Payment Amount" shall mean for any Period
of Determination the sum of all amounts payable during such
Period of Determination under all (i) leases for equipment
located at one or more of the Premises and (ii) all loans
secured by equipment located at one or more of the
Premises.
"FFCA Payments" shall mean with respect to the Period
of Determination, the sum of all amounts payable under the
Notes excluding payment of any FCCR Amount or Modified FCCR
Amount and any other non-scheduled payment required or
permitted hereunder.
"Gross Gas Profits" shall mean the difference between
(i) motor vehicle fuel sales or other income arising from
the sale of motor vehicle fuel at all of the Premises
during the Period of Determination, minus (ii) the sum of
sales tax and the actual costs paid by Debtor for the motor
vehicle fuel sold.
"Gross Sales" shall mean the difference between (i)
sales or other income arising from all business conducted
at all of the Premises (other than motor vehicle fuel sales
or other income arising from the sale of motor vehicle
fuel) by Lessee during the Period of Determination, minus
(ii) the sum of sales tax and any amounts received from not-
for-profit sales of all non-food items approved for use in
connection with promotional campaigns, if any, for all of
the Premises.
"Interest Expense" shall mean for any Period of
Determination, the sum of all interest accrued or which
should be accrued in respect of all Debt of Lessee
allocable to one or more of the Premises and all business
operations thereon during such period (including interest
attributable to Capital Leases), as determined in
accordance with GAAP.
"Net Income" shall mean with respect to the Period of
Determination, the aggregate net income or net loss of
Lessee allocable to all of the Premises. In determining
the amount of Net Income, (i) adjustments shall be made for
nonrecurring gains and losses allocable to the Period of
Determination, (ii) deductions shall be made for
Depreciation and Amortization, Interest Expense and
Operating Lease Expense allocable to the Period of
Determination, and (iii) no deductions shall be made for
(x) income taxes or charges equivalent to income taxes
allocable to the Period of Determination, as determined in
accordance with GAAP, or (y) corporate overhead expense
allocable to the Period of Determination. "Operating Lease
Expense" shall mean the sum of all payments and expenses
incurred by Lessee under any operating leases with respect
to one or more of the Premises and the business operations
thereon during the Period of Determination, as determined
in accordance with GAAP.
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Notwithstanding the foregoing, FFCA shall have the right to divide the
Loans (and the corresponding Loan Documents) into no more than three
(3) Loan Pools in connection with no more than three (3)
Securitizations, Participations or Transfers. If any Loan Pool
does not include all of the Loans, Debtor shall, upon notice
from FFCA, maintain with respect to the Loans in each Loan Pool
for which such notice is given an aggregate Fixed Charge
Coverage Ratio, as determined on the date set forth above, of at
least 1.25:1 for all of the Premises corresponding to the Loans
in such Loan Pool, which Fixed Charge Coverage Ratio requirement
shall be in addition to the requirement to maintain an aggregate
Fixed Charge Coverage Ratio of at least 1:25:1 for all of the
Premises as set forth above, and shall apply until such time as
all of the Debtor's obligations under the Notes and the other
Loan Documents corresponding to such Loans are paid, satisfied
and discharged in full. To the extent that an aggregate Fixed
Charge Coverage Ratio requirement is imposed by FFCA with
respect to the Loans in any Loan Pool, for the purposes of
determining whether or not such Fixed Charge Coverage Ratio
requirement has been satisfied, the definitions relating to the
Fixed Charge Coverage Ratio shall be deemed to be modified as
applicable to provide for the calculation of the aggregate Fixed
Charge Coverage Ratio for all of the Premises corresponding to
such Loan Pool rather than a calculation of the aggregate Fixed
Charge Coverage Ratio for all of the Premises.
C. Lost Note. Debtor shall, if any Note is mutilated,
destroyed, lost or stolen (a "Lost Note"), promptly deliver to
FFCA, upon receipt of an affidavit from FFCA stipulating that
such Note has been mutilated, destroyed, lost or stolen, in
substitution therefor, a new promissory note containing the same
terms and conditions as such Lost Note with a notation thereon
of the unpaid principal and accrued and unpaid interest. Debtor
shall provide fifteen (15) days' prior notice to FFCA before
making any payments to third parties in connection with a Lost
Note. Except as a result of the gross negligence or intentional
misconduct of Debtor, FFCA shall indemnify Debtor for all
reasonable costs, expenses, damages, claims and liabilities
incurred by Debtor as a result of a Lost Note.
D. Lease Modification. The Master Lease shall not be
modified, amended, terminated, cancelled or surrendered without
FFCA's prior written consent.
E. Nonconsolidation. (1) Debtor shall at all times
maintain correct and complete books and records of account
separate from all other Persons. Where necessary or
appropriate, Debtor shall disclose the nature of the transaction
contemplated by the Loan Documents and Debtor's independent
status to its creditors. Debtor shall not own or lease any
assets other than the Premises and the personal property and
inventory located thereon, nor engage in any business other than
owning and leasing the Premises, including financing the
Premises with FFCA. Debtor shall not commingle its assets and
its liabilities with those of any other Person.
(2) Debtor shall maintain its own checking account or
accounts with commercial banking institutions separate from
other Persons.
(3) To the extent that Debtor shares the same employees
with other Persons, the salaries of and the expenses related to
providing
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<PAGE> 81
benefits to such employees, at all times shall be, fairly and
nonarbitrarily allocated among such Persons, with the result that each
such Person shall bear its fair share of the salary and benefit costs
associated with all such common employees.
(4) To the extent that Debtor jointly contracts with other
Persons to do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing at all
times shall be, fairly and nonarbitrarily allocated among such
Persons, with the result that each such Person shall bear its
fair share of such costs. To the extent that Debtor contracts
or does business with vendors or service providers where the
goods or services provided are or shall be partially for the
benefit of other Persons, the costs incurred in so doing at all
times shall be, fairly and nonarbitrarily allocated to or among
such Persons for whose benefit the goods or services are
provided, with the result that each such Person shall bear its
fair share of such costs. All transactions between Debtor and
other Persons shall be only on an arm's-length basis.
(5) To the extent that Debtor or other Persons have
offices in the same location, there shall be a fair, appropriate
and nonarbitrary allocation of overhead among them, with the
result that each such Person shall bear its fair share of such
expenses.
(6) Debtor shall not incur any indebtedness, secured or
unsecured, direct or indirect, absolute or contingent (including
guaranteeing any obligation or assuming liability for the debts
of any other Person and Debtor will not hold itself out as being
liable for the debts of any other Person), other than the loans
and trade and operational debt incurred in the ordinary course
of business with trade creditors and in amounts as are normal
and reasonable under the circumstances. No indebtedness other
than the Loans may be secured (subordinate or pari passu) by the
Premises or any portion thereof.
(7) Debtor shall not enter into any contract or agreement
with any Affiliate of Debtor, any constituent party of Debtor or
any Affiliate of any constituent party of Debtor except upon
terms and conditions that are intrinsically fair and
substantially similar to those that would be available on an
armslength basis with third parties other than any such party.
(8) Except as contemplated by the Loan Documents, Debtor
shall not pledge, grant any security interest in, hypothecate or
otherwise encumber its assets for the benefit of any other
Persons.
(9) Debtor shall issue separate financial statements
prepared not less frequently than annually and prepared
according to GAAP.
(10) Debtor shall maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and
character in light of its contemplated business operations.
(11) Debtor shall conduct its affairs strictly in
accordance with its organizational documents, including Debtor's
corporate general partner's organizational documents and shall
observe all necessary, appropriate and customary formalities.
The books, records and accounts of Debtor shall at all times be
maintained in a manner
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permitting the assets and liabilities of Debtor to be easily
separated and readily ascertained from those of any other Person
and Debtor shall file its own tax returns.
(12) Debtor shall not hold itself out to the public or to
any of its individual creditors as being a unified entity with
assets and liabilities in common with any other Person. Debtor
shall maintain and utilize separate stationery, invoices and
checks.
(13) Debtor shall not make any loans or advances to any
third party (including any Affiliate of Debtor or constituent
party of Debtor).
(14) Debtor shall not, as to itself or as to other Persons,
(i) commence any case, proceeding or other action under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with
respect to Debtor or other Persons or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to Debtor or its debts
or other Persons or their debts or (ii) seek appointment of a
receiver, trustee, custodian or other similar official for
Debtor or for all or any substantial part of its or other
Person's assets or make a general assignment for the benefit of
Debtor's creditors. Debtor shall not take any action in
furtherance of, or indicating its consents to, approval of or
acquiescence in, any of the acts set forth above. Debtor shall
not be unable to, or admit in writing its inability to, pay its
debts.
F. Compliance with Third Party Leases. Debtor shall
comply with all terms, covenants and conditions set forth in
each of the Third Party Leases, timely. Debtor shall provide
FFCA with copies of all notices and demands delivered to Debtor
under any Third Party Leases that relate to the compliance of
Debtor with the Third Party Leases.
8. TRANSACTION CHARACTERIZATION. This Agreement is a contract to
extend a financial accommodation (as such term is used in the Code) for the
benefit of Debtor. It is the intent of the parties hereto that the business
relationship created by this Agreement, the Notes, the Mortgages and the other
Loan Documents is solely that of creditor and debtor and has been entered into
by both parties in reliance upon the economic and legal bargains contained in
the Loan Documents. None of the agreements contained in the Loan Documents is
intended, nor shall the same be deemed or construed, to create a partnership
(either de jure or de facto) between Debtor and FFCA, to make them joint
venturers, to make Debtor an agent, legal representative, partner, subsidiary or
employee of FFCA, nor to make FFCA in any way responsible for the debts,
obligations or losses of Debtor.
9. CONDITIONS OF CLOSING. The obligation of FFCA to
consummate the transaction contemplated by this Agreement is subject
to the fulfillment or waiver of each of the following conditions:
A. Title. Fee title to each of the Premises shall be
vested in Debtor, free of all liens, encumbrances, restrictions,
encroachments and easements, except the Permitted Exceptions and
the liens created by the Mortgages and the UCC-1 Financing
Statements. Debtor or Lessee shall be the owner of all of the
equipment, trade
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fixtures, appliances and other personal property located on or
at each of the Premises free and clear of all liens,
encumbrances, charges and security interests, except the liens
created by the Mortgages and the UCC-1 Financing Statements and
the interests created by the Master Lease. Upon Closing, FFCA
will obtain a valid and perfected first priority lien upon and
security interest in each of the Premises.
B. Condition of Premises. FFCA shall have inspected and
approved the Premises, the Premises shall be in good condition
and repair, free from structural defects, and of good
workmanship and materials, and the Premises shall be fully
equipped and operational, clean, orderly, sanitary, safe, well-
lit, landscaped, decorated, attractive and with a suitable
layout, physical plant, traffic pattern and location, all as
determined by FFCA in its sole discretion, except where the
failure of the Premises to be in such condition will not have a
Material Adverse Effect.
C. Evidence of Title. FFCA shall have received for each
of the Premises a preliminary title report and irrevocable
commitment to insure title in the amount of the Loan relating to
such Premises, by means of a mortgagee's, ALTA extended coverage
policy of title insurance (or its equivalent, in the event such
form is not issued in the jurisdiction where the Premises is
located) issued by Title Company showing good and marketable fee
title in such Premises in Debtor, committing to insure FFCA's
first priority lien upon and security interest in such Premises
subject only to Permitted Exceptions, and containing such
endorsements as FFCA may require. FFCA shall also have received
evidence reasonably satisfactory to FFCA that Debtor or Lessee
is the owner of all of the equipment, trade fixtures, appliances
and other personal property located on or at each of the
Premises free and clear of all liens, encumbrances, charges and
security interests, except the liens created by the Mortgages
and the UCC-1 Financing Statements.
D. Survey. FFCA shall have received a current ALTA
survey of each of the Premises, the form and substance of which
shall be satisfactory to FFCA in its sole discretion. Debtor
shall have provided FFCA with evidence satisfactory to FFCA that
the location of each of the Premises is not within the 100year
flood plain or identified as a special flood hazard area as
defined by the Federal Emergency Management Agency, or if any
Premises is in such a flood plain or special flood hazard area,
Debtor shall provide FFCA with evidence of flood insurance
maintained on such Premises in amounts and on terms and
conditions satisfactory to FFCA.
E. Environmental. At Debtor's expense, FFCA shall have
received an Environmental Policy with respect to each of the
Premises, as required by FFCA in its sole discretion.
F. Zoning. Debtor shall have provided FFCA with evidence
satisfactory to FFCA that each of the Premises is properly zoned
for use as a UniMart Facility and that such use constitutes a
legal, conforming use under applicable zoning requirements.
G. Compliance With Representations, Warranties and
Covenants. All obligations of Debtor under this Agreement shall
have been fully performed and complied with, and no event shall
have occurred or
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condition shall exist which would, upon the Closing Date, or,
upon the giving of notice and/or passage of time, constitute a
breach or default hereunder or under the Loan Documents or any
other agreement between or among FFCA, Debtor or, Lessee
pertaining to the subject matter hereof, and no event shall have
occurred or condition shall exist or information shall have been
disclosed by Debtor or discovered by FFCA which has had or would
have a material adverse effect on the Premises, Debtor, Lessee
or FFCA's willingness to consummate the transaction contemplated
by this Agreement, as determined by FFCA in its sole and
absolute discretion.
H. Proof of Insurance. Debtor shall have delivered to
FFCA certificates of insurance or copies of insurance policies
showing that all insurance required by the Loan Documents and
providing coverage and limits satisfactory to FFCA are in full
force and effect.
I. Opinion of Counsel to Debtor and Lessee. Debtor and
Lessee shall have caused Counsel to prepare and deliver an
opinion to FFCA in form and substance satisfactory to FFCA and
its counsel.
J. Availability of Funds. FFCA presently has sufficient
funds to discharge its obligations under this Agreement. In the
event that the transaction contemplated by this Agreement does
not close on or before the date established for Closing under
Section 4(a) hereof, FFCA does not warrant that it will
thereafter have sufficient funds to consummate the transaction
contemplated by this Agreement.
K. Closing of Equipment Loan Agreement. All of the
transactions described in the Equipment Loan Agreement shall
have closed prior to or concurrently with the Closing of the
transactions described in this Agreement.
L. Master Lease; Memoranda. Debtor and Lessee shall have executed
and delivered the Master Lease for all of the Premises and a
recordable memorandum of lease (collectively, the "Memoranda")
for each of the Premises.
M. Closing Documents. At or prior to the Closing Date, FFCA and/or
Debtor, as may be appropriate, shall execute and deliver or
cause to be executed and delivered to Title Company or FFCA, as
may be appropriate, all documents required to be delivered by
this Agreement, and such other documents, payments, instruments
and certificates, as FFCA may require in form acceptable to
FFCA, including, without limitation, the following:
(1) Notes;
(2) Mortgages;
(3) Proof of Insurance;
(4) Opinion of Counsel to Debtor and Lessee;
(5) Evidence of satisfactory zoning;
(6) UCC-1 Financing Statements;
(7) Environmental Indemnity Agreements;
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(8) Master Lease and Memoranda;
(9) Certifications (Confession of Judgment); and
(10) Explanations and Waiver of Rights Regarding
Confession of
Judgment.
Upon fulfillment or waiver of all of the above conditions, FFCA shall deposit
funds necessary to close this transaction with the Title Company and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
10. DEFAULT AND REMEDIES. A. Each of the following shall be deemed an
event of default by Debtor (each, an "Event of Default"):
(1) If any representation or warranty of Debtor or Lessee
set forth in any of the Loan Documents is false in any respect
and such falsity would result in a Material Adverse Effect, or
if Debtor or Lessee renders any false statement or account in
any material respect.
(2) If any principal, interest or other monetary sum due
under the Notes, the Mortgages or any other Loan Document is not
paid within five days after the date when due; provided,
however, notwithstanding the occurrence of such an Event of
Default, FFCA shall not be entitled to exercise its rights and
remedies set forth below unless and until FFCA shall have given
Debtor notice thereof and a period of five days from the
delivery of such notice shall have elapsed without such Event of
Default being cured.
(3) If Debtor fails to observe or perform any of the other
covenants (except with respect to a breach of the Fixed Charge
Coverage Ratio, which breach is addressed in subitem (6) below),
conditions, or obligations of this Agreement; provided, however,
if any such failure does not involve the payment of any monetary
sum, is not willful or intentional, does not place any rights or
interest in collateral of FFCA in immediate jeopardy, and is
within the reasonable power of Debtor to promptly cure after
receipt of notice thereof, all as determined by FFCA in its
reasonable discretion, then such failure shall not constitute an
Event of Default hereunder, unless otherwise expressly provided
herein, unless and until FFCA shall have given Debtor notice
thereof and a period of 30 days shall have elapsed, during which
period Debtor may correct or cure such failure, upon failure of
which an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being
required. If such failure cannot reasonably be cured within
such 30day period, as determined by FFCA in its reasonable
discretion, and Debtor is diligently pursuing a cure of such
failure, then Debtor shall have a reasonable period to cure such
failure beyond such 30-day period, which shall not exceed 90
days after receiving notice of the failure from FFCA. If Debtor
shall fail to correct or cure such failure within such 90-day
period, an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being
required.
(4) If Debtor or Lessee becomes insolvent within the
meaning of the Code, files or notifies FFCA that it intends to
file a petition under the Code, initiates a proceeding under any
similar law or statute relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts
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(collectively, an "Action"), becomes the subject of either a
petition under the Code or an Action, or is not generally paying
its debts as the same become due or if Debtor or Lessee becomes
the subject of an involuntary petition under the Code or other
similar involuntary Action (in which case Debtor shall be
required to provide FFCA with immediate notice of the
commencement or filing of such involuntary petition or Action),
and any of the following shall have occurred: (i) the
involuntary petition or involuntary Action shall not have been
dismissed within 60 days of the date on which it was filed or
otherwise commenced, (ii) an order for relief under the Code (or
similar order) shall have been entered by the court in the
involuntary proceeding or involuntary Action, or (iii) the court
having jurisdiction over such involuntary proceeding or
involuntary Action (upon motion or other request for relief by
the party against whom the involuntary petition or involuntary
Action was filed or otherwise commenced) shall not have granted
FFCA full and final relief from the automatic stay of Section
362 of the Code and from any stay issued under Section 105 of
the Code (or any similar stays or injunctions) within 30 days of
the filing or commencement of such involuntary petition or
involuntary Action so that FFCA is thereafter free to exercise
any and all of its rights and remedies under the Loan Documents.
(5) If there is an "Event of Default" under any other Loan
Document, the Master Lease or the Equipment Loan Agreement or a
breach or default, after the passage of all applicable notice
and cure or grace periods, under any of the Other Agreements.
(6) If there is a breach of the Fixed Charge Coverage
Ratio requirement and FFCA shall have given Debtor notice
thereof and Debtor shall have failed within a period of 30 days
from the delivery of such notice (the "Cure Period") to either
(i) pay to FFCA the FCCR Amount (without premium or penalty)
with respect to such of the Premises (starting with the Premises
with the lowest Fixed Charge Coverage Ratio and proceeding in
ascending order to the Premises with the next lowest Fixed
Charge Coverage Ratio) as is necessary to cure the breach of the
Fixed Charge Coverage Ratio requirement and for which the then
Fixed Charge Coverage Ratio (with the definitions in Section 7.B
being deemed to be modified as applicable to provide for the
calculation of the Fixed Charge Coverage Ratio for each such
Premises on an individual basis rather than on an aggregate
basis with the other Premises) is below 1.25:1 (each, a "Subject
Premises"), or (ii) prepay the Note or Notes corresponding to
the Subject Premises in whole but not in part (without premium
or penalty), or (iii) notify FFCA of Debtor's election to
substitute a Substitute Premises for each Subject Premises in
accordance with the terms of Section 13 (the failure of Debtor
to complete such substitution within 60 days after FFCA shall
have given the notice discussed above shall be deemed to be an
Event of Default without further notice or demand of any kind
being required). For purposes of the preceding sentence, "FCCR
Amount" means that sum of money which, when subtracted from the
outstanding principal amount of the Note and Equipment Note
corresponding to a Subject Premises (to the extent applicable),
and assuming the resulting principal balance is reamortized in
equal monthly payments over the remaining term of such Note and
Equipment Note at the rate of interest set forth therein, will
result in an adjusted aggregate Fixed Charge Coverage Ratio for
all of the Premises of at least 1.25:1 based on the prior year's
operations. Promptly after Debtor's payment of the FCCR Amount,
Debtor and
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FFCA shall execute an amendment to each such Note and Equipment
Note in form and substance reasonably acceptable to FFCA
reducing the principal amount payable to FFCA under such Note
and Equipment Note and reamortizing the principal amount of such
Note and Equipment Note in equal monthly payments over the then
remaining term of such Note and Equipment Note at the rate of
interest set forth therein. The FCCR Amount shall be allocated
proportionately between such Note and Equipment Note based on
the percentage that the then outstanding principal balance of
such Note or Equipment Note, as the case may be, bears to the
then outstanding principal balance of such Note and Equipment
Note in the aggregate.
Notwithstanding the foregoing, to the extent that, in
accordance with the provisions of Section 7.B, FFCA shall have
imposed an aggregate Fixed Charge Coverage Ratio requirement
with respect to all of the Premises corresponding to the Loans
in any Loan Pool, then, in order to prevent an Event of Default
from occurring by reason of a breach of such aggregate Fixed
Charge Coverage Ratio requirement, Debtor, within the Cure
Period must either (i) pay to FFCA the Modified FCCR Amount
(without premium or penalty) within the aforesaid 30 day period
with respect to such of the Premises corresponding to the Loans
in such Loan Pool (starting with the Premises with the lowest
Fixed Charge Coverage Ratio and proceeding in ascending order to
the Premises with the next lowest Fixed Charge Coverage Ratio)
as is necessary to cure the breach of such aggregate Fixed
Charge Coverage Ratio requirement and for which the then Fixed
Charge Coverage Ratio (with the definitions relating to the
Fixed Charge Coverage Ratio being deemed to be modified as
applicable to provide for the calculation of the Fixed Charge
Coverage Ratio for each such Premises on an individual basis
rather than on an aggregate basis with the other Premises
corresponding to the Loans in such Loan Pool) is below 1.25:1
(each a "Selected Premises"), or (ii) prepay the Note or Notes
corresponding to the Selected Premises in whole but not in part
(without premium or penalty) within the Cure Period, or (iii)
notify FFCA of Debtor's election to substitute a Substitute
Premises for each Selected Premises in accordance with the terms
of Section 13 (the failure of Debtor to complete such
substitution within 60 days after FFCA shall have given Debtor
the notice discussed above shall be deemed to be an Event of
Default without further notice or demand of any kind being
required). For purposes of the preceding sentence, "Modified
FCCR Amount" means that sum of money which, when subtracted from
the outstanding principal amount of the Note and Equipment Note
corresponding to a Selected Premises (to the extent applicable),
and assuming the resulting principal balance is reamortized in
equal monthly payments over the remaining term of such Note and
Equipment Note at the rate of interest set forth therein, will
result in an adjusted aggregate Fixed Charge Coverage Ratio for
all of the Premises corresponding to the Loans in such Loan Pool
of at least 1.25:1 based on the prior year's operations.
Promptly after Debtor's payment of the Modified FCCR Amount,
Debtor and FFCA shall execute an amendment to each such Note and
Equipment Note in form and substance reasonably acceptable to
FFCA reducing the principal amount payable to FFCA under such
Note and Equipment Note and reamortizing the principal amount of
such Note and Equipment Note in equal monthly payments over the
then remaining term of such Note and Equipment Note at the rate
of interest set forth therein. The Modified FCCR Amount
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shall be allocated proportionately between such Note and
Equipment Note based on the percentage that the then outstanding
principal balance of such Note or Equipment Note, as the case
may be, bears to the then outstanding principal balance of such
Note and Equipment Note in the aggregate.
B. Upon and during the continuance of an Event of Default,
subject to the limitations set forth in subsection A, FFCA may declare all or
any part of the obligations of Debtor under the Notes, this Agreement and any
other Loan Document to be due and payable, and the same shall thereupon become
due and payable without any presentment, demand, protest or notice of any
kind except as otherwise expressly provided herein, and, except as otherwise
provided herein or prohibited by applicable law, Debtor hereby waives notice of
intent to accelerate the obligations secured by the Mortgages and notice of
acceleration. Thereafter, FFCA may exercise, at its option, concurrently,
successively or in any combination, all remedies available at law or in equity,
including without limitation any one or more of the remedies available under the
Notes, the Mortgages or any other Loan Document. Neither the acceptance of this
Agreement nor its enforcement shall prejudice or in any manner affect FFCA's
right to realize upon or enforce any other security now or hereafter held by
FFCA, it being agreed that FFCA shall be entitled to enforce this Agreement
and any other security now or hereafter held by FFCA in such order and manner as
it may in its absolute discretion determine. No remedy herein conferred upon or
reserved to FFCA is intended to be exclusive of any other remedy given hereunder
or now or hereafter existing at law or in equity or by statute. Every power or
remedy given by any of the Loan Documents to FFCA, or to which FFCA may be
otherwise entitled, may be exercised, concurrently or independently, from time
to time and as often as may be deemed expedient by FFCA.
11. ASSIGNMENTS. A. FFCA may assign in whole or in part its
rights under this Agreement, including, without limitation, in connection
with any Transfer, Participation and/or Securitization. Upon any unconditional
assignment of FFCA's entire right and interest hereunder, FFCA shall
automatically be relieved, from and after the date of such assignment, of
liability for the performance of any obligation of FFCA contained herein.
B. Debtor shall not, without the prior written consent of
FFCA, sell, assign, transfer, mortgage, convey, encumber or grant any
easements or other rights or interests of any kind in the Premises,
except for Third Party Leases, any of Debtor's rights under this
Agreement or any interest in Debtor, whether voluntarily, involuntarily or
by operation of law or otherwise, including, without limitation, by merger,
consolidation, dissolution or otherwise, except, subsequent to the Closing,
as expressly permitted by the Mortgages.
12. INDEMNITY. Debtor agrees to indemnify, hold harmless and
defend FFCA and its directors, officers, shareholders, employees,
successors, assigns, agents, contractors, subcontractors, experts, licensees,
affiliates, lessees, lenders, mortgagees, trustees and invitees, as applicable
(collectively, the "Indemnified Parties"), for, from and against any and all
losses, costs, claims, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and court costs, arising as the result
of an Environmental Condition and/or a breach of any of the representations,
warranties, covenants, agreements or obligations of Debtor set forth in this
Agreement or any other Loan Document. Without limiting the generality of the
foregoing, such indemnity shall include, without limitation, any engineering,
governmental inspection and reasonable attorneys' fees and expenses that the
Indemnified Parties may incur by reason of
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any representation set forth in this Agreement being false, or by reason of any
investigation or claim of any Governmental Authority in connection therewith.
13. SUBSTITUTION. Debtor shall have the right to obtain a release of a
Premises by substituting a Substitute Premises for such Premises if (a)
permitted by the terms of Section 10.A(6), (b) subject to the limitation set
forth in subitem (xii) of this Section 13, Debtor concludes, in Debtor's
reasonable judgment, that it would be in Debtor's best interest to cease
business operations at such Premises based upon unacceptable and substandard
operating performance of such Premises, (c) subject to the limitation set forth
in subitem (xii) of this Section 13, such Premises is damaged or destroyed and
Debtor concludes, in Debtor's reasonable judgment, that it would be in its best
interest not to repair or restore such Premises based upon unacceptable
performance of such Premises or Lessee is permitted to Substitute a Substitute
Premises for a Premises pursuant to Section 59 of the Master Lease, in all cases
subject to fulfillment of the following conditions:
(i) With respect to a substitution permitted by the terms of
Section 10.A(6), Debtor shall provide FFCA with notice of its intention
to substitute a Substitute Premises within the applicable time
period contemplated by such section and the closing of the
substitution shall take place within the period contemplated by
such section. With respect to a substitution pursuant to
clauses (b) and (c), above, of this Section 13, Debtor shall
provide FFCA with notice of its intention to substitute a
Substitute Premises within 10 days after Debtor decides to
proceed with such substitution and the closing of such
substitution shall take place within the 30 day period
immediately following delivery of such notice. With respect to
a substitution pursuant to clause (d), above, of this Section
13, Debtor shall provide FFCA with notice of its intention to
substitute a Substitute Premises within 30 days after Debtor
decides to proceed with such substitution and the closing of
such substitution shall take place within the 60 day period
immediately following delivery of such notice.
(ii) Debtor must provide for the substitution of a
Substitute Premises, and the proposed Substitute Premises must:
(1) be a Uni-Mart Facility, in good condition
and repair, ordinary wear and tear excepted;
(2) have for the twelve month period preceding
the date of the closing of such substitution a Fixed Charge
Coverage Ratio (with the definitions of Section 7.B being
deemed to be modified if necessary and as applicable to
provide for a calculation of the Fixed Charge Coverage
Ratio for each of the Premises on an individual basis
rather than on an aggregate basis with the other Premises)
at least equal to the Fixed Charge Coverage Ratio for the
Premises being replaced and the substitution must not
cause a breach of any Fixed Charge Coverage Ratio
requirement otherwise set forth in this Agreement;
(3) be owned by and vested in Debtor, free and clear of all
liens and encumbrances, except such matters as are acceptable to
FFCA (the "Substitute Premises Permitted Exceptions"); and
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(4) have a fair market value no less than the greater of
the then fair market value of the Premises to be replaced or the fair
market value of such Premises as of the Closing, all as reasonably
determined by FFCA's inhouse inspectors and underwriters.
(iii) FFCA shall have inspected and approved the
Substitute Premises utilizing FFCA customary site inspection and
underwriting approval criteria. Debtor shall have reimbursed
FFCA for all of its costs and expenses incurred with respect to
such proposed substitution, including, without limitation,
FFCA's third-party and/or in-house site inspectors' costs and
expenses with respect to the proposed Substitute Premises.
Debtor shall be solely responsible for the payment of all costs
and expenses resulting from such proposed substitution,
including, without limitation, the cost of title insurance and
endorsements, survey charges, stamp taxes, mortgage taxes,
transfer fees, escrow and recording fees, the cost of
environmental reports and/or environmental insurance and the
attorneys' fees and expenses of counsel to Debtor and FFCA.
(iv) FFCA shall have received a preliminary title report
and irrevocable commitment to insure title by means of a
mortgagee's ALTA extended coverage policy of title insurance (or
its equivalent, in the event such form is not issued in the
jurisdiction where the proposed Substitute Premises is located)
for such proposed Substitute Premises issued by Title Company
showing good and marketable title in Debtor and committing to
insure FFCA's first priority lien upon and security interest in
the proposed Substitute Premises, subject only to the Substitute
Premises Permitted Exceptions and containing endorsements
substantially comparable to those required by FFCA at the
Closing
(v) FFCA shall have received a current ALTA survey of such
proposed Substitute Premises, the form of which shall be
comparable to those received by FFCA at the Closing and
sufficient to cause the standard survey exceptions set forth in
the title policy referred to in the preceding subsection to be
deleted.
(vi) FFCA shall have received an Environmental Policy with
respect to the Substitute Premises as is acceptable to FFCA in
its sole discretion.
(vii) Debtor shall deliver, or cause to be delivered,
with respect to Debtor and the Substitute Premises, opinions of
Counsel in form and substance comparable to those received at
Closing (but also addressing such matters unique to the
Substitute Premises as may be reasonably required by FFCA).
(viii) No Event of Default (other than the breach of the
Fixed Charge Coverage Ratio covenant set forth in Section 7.B in
the case of a substitution pursuant to clause (a) above, of this
Section 13) shall have occurred under any of the Loan
Documents.
(ix) Debtor shall have executed such documents as are
comparable to the security documents executed and delivered at
Closing, as applicable (but with such revisions as may be
reasonably required by FFCA to address matters unique to the
Substitute Premises) or amendments to such documents, including,
without limitation, a Mortgage, amendment to the Master Lease,
Memorandum and UCC-1 Financing Statements (the "Substitute
Documents"), to
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provide FFCA with a first priority lien on the proposed
Substitute Premises, subject only to the Substitute Premises
Permitted Exceptions, and all other rights, remedies and
benefits with respect to the proposed Substitute Premises which
FFCA holds in the Premises to be replaced, all of which
documents shall be in form and substance reasonably satisfactory
to FFCA.
(x) The representations and warranties set forth in the
Substitute Documents and Section 6 of this Agreement applicable
to the proposed Substitute Premises shall be true and correct in
all material respects as of the date of substitution, and Debtor
shall have delivered to FFCA an officer's certificate certifying
to that effect.
(xi) Debtor shall have delivered to FFCA certificates of
insurance showing that insurance required by the Substitute
Documents is in full force and effect.
(xii) Debtor may not substitute Substitute Premises for
more than 1 Premises, in the aggregate, as a result of the
exercise by Debtor of its rights under clauses (b) and (c) above
of this Section 13.
Upon satisfaction of the foregoing conditions with respect to the
release of a Premises:
(a) the proposed Substitute Premises shall be deemed
substituted for the Premises to be replaced;
(b) the Loan Amount for the Substitute Premises shall be the same as
for the replaced Premises;
(c) the Substitute Premises shall be referred to herein as
a "Premises" and included within the definition of "Premises"
and shall secure the same Obligations (as defined in the
Mortgages) as were secured by the Premises that were replaced;
(d) the Substitute Documents shall be dated as of the date
of the substitution; and
(e) FFCA will release, or cause to be released, the lien of the
Mortgage, UCC-1 Financing Statements and any other Loan Documents
encumbering the replaced Premises.
14. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other
instruments required or permitted to be given by either party
pursuant to this Agreement shall be in writing and given by (i)
hand delivery, (ii) facsimile, (iii) express overnight delivery
service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a)
receipt, if hand delivered, (b) transmission, if delivered by
facsimile, (c) the next Business Day, if delivered by express
overnight delivery service, or (d) the third Business Day
following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail,
return receipt requested. Notices shall be provided to the
parties and addresses (or facsimile numbers, as applicable)
specified below:
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If to Debtor: N. Gregory Petrick
Uni Realty of Wilkes-Barre, L.P.
477 East Beaver Avenue
State College, PA 16801-5690
Telephone: (814) 234-6000
Telecopy: (814) 234-3277
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President and General
Counsel
FFCA Acquisition Corporation
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (480) 585-4500
Telecopy: (480) 585-2226
B. Brokerage Commission. FFCA and Debtor represent and
warrant to each other that they have dealt with no real estate
or mortgage broker, agent, finder or other intermediary in
connection with the transactions contemplated by this Agreement.
FFCA and Debtor shall indemnify and hold each other harmless
from and against any costs, claims or expenses, including
attorneys' fees, arising out of the breach of their respective
representations and warranties contained within this Section.
C. Waiver and Amendment. No provisions of this Agreement
shall be deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or
amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion.
D. Captions. Captions are used throughout this Agreement
for convenience of reference only and shall not be considered in
any manner in the construction or interpretation hereof.
E. Intentionally Omitted.
F. Severability. The provisions of this Agreement shall
be deemed severable. If any part of this Agreement shall be
held unenforceable, the remainder shall remain in full force and
effect, and such unenforceable provision shall be reformed by
such court so as to give maximum legal effect to the intention
of the parties as expressed therein.
G. Construction Generally. This is an agreement between
parties who are experienced in sophisticated and complex matters
similar to the transaction contemplated by this Agreement and is
entered into by both parties in reliance upon the economic and
legal bargains contained herein and shall be interpreted and
construed in a fair and impartial manner without regard to such
factors as the party which prepared the instrument, the relative
bargaining powers of the parties or the domicile of any party.
Debtor and FFCA were each represented by legal counsel competent
in advising them of their obligations and liabilities hereunder.
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H. Other Documents. Each of the parties agrees to sign
such other and further documents as may be appropriate to carry
out the intentions expressed in this Agreement.
I. Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this
Agreement, the prevailing party shall be entitled to recover its
attorneys' fees and other costs in addition to any other relief
to which it may be entitled. References in this Agreement to
the attorneys' fees and/or costs of FFCA shall mean both the
fees and costs ofindependent outside counsel retained by FFCA
with respect to this transaction and the fees and costs of
FFCA's in-house counsel incurred in connection with this
transaction.
J. Entire Agreement. This Agreement and the other Loan
Documents, together with any other certificates, instruments or
agreements to be delivered in connection therewith, constitute
the entire agreement between the parties with respect to the
subject matter hereof, and there are no other representations,
warranties or agreements, written or oral, between Debtor and
FFCA with respect to the subject matter of this Agreement.
Notwithstanding anything in this Agreement to the contrary, upon
the execution and delivery of this Agreement by Debtor and FFCA,
the Commitment shall be deemed null and void and of no further
force and effect and the terms and conditions of this Agreement
shall control notwithstanding that such terms may be
inconsistent with or vary from those set forth in the
Commitment.
K. Forum Selection; Jurisdiction; Venue; Choice of Law.
Debtor acknowledges that this Agreement was substantially
negotiated in the State of Arizona, the Agreement was signed by
FFCA in the State of Arizona and executed and delivered by
Debtor in the State of Arizona, all payments under the Notes
will be delivered in the State of Arizona and there are
substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of
any action or proceeding arising out of this Agreement, the
parties hereto hereby expressly submit to the jurisdiction of
all federal and state courts located in the State of Arizona and
Debtor consents that it may be served with any process or paper
by registered mail or by personal service within or without the
State of Arizona in accordance with applicable law. Furthermore,
Debtor waives and agrees not to assert in any such action, suit
or proceeding that it is not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding
is brought in an inconvenient forum or that venue of the action,
suit or proceeding is improper. It is the intent of the parties
hereto that all provisions of this Agreement shall be governed
by and construed under the laws of the State of Arizona,
without giving effect to its principles of conflicts of law. To
the extent that a court of competent jurisdiction finds Arizona
law inapplicable with respect to any provisions hereof, then, as
to those provisions only, the laws of the states where the
Premises are located shall be deemed to apply. Nothing in this
Section shall limit or restrict the right of FFCA to commence
any proceeding in the federal or state courts located in the
states in which the Premises are located to the extent FFCA
deems such proceeding necessary or advisable to exercise
remedies available under this Agreement or the other Loan
Documents.
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L. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original.
M. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of Debtor and FFCA and their respective
successors and permitted assigns, including, without limitation,
any United States trustee, any debtor in possession or any
trustee appointed from a private panel.
N. Survival. Except for the conditions of Closing set
forth in Section 9, which shall be satisfied or waived as of the
Closing Date, all representations, warranties, agreements,
obligations and indemnities of Debtor and FFCA set forth in this
Agreement shall survive the Closing.
O. Waiver of Jury Trial and Punitive, Consequential,
Special and Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO
A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR AND FFCA HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES FROM THE OTHER AND ANY OF THE OTHER'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY IT AGAINST THE
OTHER OR ANY OF THE OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY
DEBTOR AND FFCA OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN.
P. Transfers, Participations and Securitizations. (1) A
material inducement to FFCA's willingness to complete the
transactions contemplated by the Loan Documents is Debtor's
agreement that FFCA may, at any time, complete a Transfer,
Participation or Securitization with respect to any Note,
Mortgage and/or any of the other Loan Documents or any or all
servicing rights with respect thereto.
(2) Debtor agrees to cooperate in good faith with FFCA in
connection with any such Transfer, Participation and/or
Securitization of any Note,
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Mortgage and/or any of the other Loan Documents, or any or all
servicing rights with respect thereto, including, without
limitation, (i) providing such documents, financial and other
data, and other information and materials (the "Disclosures")
which would typically be required with respect to Debtor and
Lessee by a purchaser, transferee, assignee, servicer,
participant, investor or rating agency involved with respect to
such Transfer, Participation and/or Securitization, as
applicable; provided, however, Debtor and Lessee shall not be
required to make Disclosures of any confidential information or
any information which has not previously been made public unless
required by applicable federal or state securities laws; and
(ii) amending the terms of the transactions evidenced by the
Loan Documents to the extent necessary so as to satisfy the
requirements of purchasers, transferees, assignees, servicers,
participants, investors or selected rating agencies involved in
any such Transfer, Participation or Securitization, so long as
such amendments would not have a material adverse effect upon
Debtor, Lessee or the transactions contemplated hereunder.
(3) Debtor consents to FFCA providing the Disclosures, as
well as any other information which FFCA may now have or
hereafter acquire with respect to the Premises or the financial
condition of Debtor and Lessee to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency
involved with respect to such Transfer, Participation and/or
Securitization, as applicable. FFCA and Debtor (and their
respective Affiliates) shall each pay their own attorneys fees
and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in
this Agreement or the other Loan Documents from and after the
closing of a Securitization, Participation or Transfer with
respect to some or all of the Loans or any loan evidenced by any
Other Agreement:
(a) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document, Master Lease or Other Agreement which relates to
a loan or sale/leaseback transaction which has not been the
subject of a Securitization, Participation or Transfer
shall not constitute an Event of Default or a breach or
default, as applicable, under any Loan Document, Master
Lease, or Other Agreement which relates to a loan which has
been the subject of a Securitization, Participation or
Transfer;
(b) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document, Master Lease or Other Agreement which relates to
a loan which is included in any Loan Pool shall not
constitute an Event of Default or a breach or default, as
applicable, under any Loan Document, Master Lease, or Other
Agreement which relates to a loan which is included in any
other Loan Pool;
(c) the Loan Documents corresponding to the Notes in
any Loan Pool shall not secure the obligations of any of
the Debtor Entities contained in any Loan Document or Other
Agreement which does not correspond to a loan in such Loan
Pool; and
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(d) the Loan Documents and Other Agreements which do
not correspond to a loan in any Loan Pool shall not secure
the obligations of any of the Debtor Entities contained in
any Loan Document or Other Agreement which does correspond
to a loan in such Loan Pool.
Q. Pennsylvania Non-Cross-Collateralization.
Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, the Loan Documents
corresponding to each Loan secured by Premises located in the
Commonwealth of Pennsylvania shall not secure the obligations of
Debtor and/or the Affiliates contained in any other Loan
Documents or Other Agreements.
IN WITNESS WHEREOF, Debtor and FFCA have entered into this
Agreement as of the date first above written.
FFCA:
FFCA ACQUISITION CORPORATION, a
Delaware corporation
By /S/ MARK E. WOOD
Printed Name Mark E. Wood
Its Vice President
DEBTOR:
UNI REALTY OF WILKES-BARRE, L.P., a
Delaware limited partnership
By Uni Realty of Wilkes-Barre, Inc., a
Delaware corporation, its general partner
By /S/ N. GREGORY PETRICK
N. Gregory Petrick
Senior Vice President
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EXHIBIT 20.3
EQUIPMENT LOAN AGREEMENT
(Acquisition)
THIS EQUIPMENT LOAN AGREEMENT (this "Agreement") is made as of April 21,
2000, by and between FFCA ACQUISITION CORPORATION, a Delaware corporation
("FFCA"), whose address is 17207 North Perimeter Drive, Scottsdale, Arizona
852550, and UNI-MARTS, INC., a Delaware corporation ("Debtor"), whose address is
477 East Beaver Avenue, State College, Pennsylvania 16801-5690.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms
used in this Agreement shall have the meanings set forth in Section
1. Debtor has requested from FFCA, and applied for the Equipment
Loans to provide long-term financing for the Equipment, and for no
other purpose whatsoever. Each Equipment Loan will be evidenced by
an Equipment Note and secured by a first priority security interest
in the Equipment pursuant to an Equipment Security Agreement and UCC-
1 Financing Statements. FFCA has committed to make the Equipment
Loans pursuant to the terms and conditions of the Commitment, this
Agreement and the other Loan Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following
meanings for all purposes of this Agreement:
"Action" has the meaning set forth in Section 10.A(4).
"Affiliate" means any Person which directly or indirectly
controls, is under common control with, or is controlled by any other
Person. For purposes of this definition, "controls", "under common
control with" and "controlled by" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through
ownership of voting securities or otherwise.
"Business Day" means any day on which FFCA is open for business
other than a Saturday, Sunday or a legal holiday, ending at 5:00 PM Phoenix,
Arizona time.
"Closing" shall have the meaning set forth in Section 4.
"Closing Date" shall have the meaning set forth in Section 4.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
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"Commitment" means that certain Commitment Letter dated February 4, 2000
(as amended February 18, 2000), between FFCA and Debtor with respect to the
transactions contemplated by this Agreement, and any amendments or supplements
thereto.
"Counsel" means legal counsel to Debtor, licensed in the
state(s) in which (i) the Equipment is located, (ii) Debtor is
incorporated or formed and (iii) Debtor resides or maintains its
chief executive offices, as selected by Debtor, and approved by FFCA.
"Debtor Entities" means, collectively, Debtor and any Affiliate
of Debtor.
"Disclosures" has the meaning set forth in Section 13.P.
"Equipment" means the furniture, equipment, trade fixtures,
appliances and other personal property defined in the Equipment
Security Agreement as the "Collateral."
"Equipment Loan" or "Equipment Loans" means, as the context may require,
the equipment loan to be made by FFCA to Debtor with respect to the Equipment
for a Premises in the Equipment Loan Amount, or all of the equipment loans to be
made by FFCA to Debtor with respect to the Equipment located at the Premises in
the Equipment Loan Amounts.
"Equipment Loan Amount" or "Equipment Loan Amounts" means, as
the context may require, the aggregate amount set forth in Section 2
or, with respect to each Premises, the individual amounts set forth
on Exhibit A.
"Equipment Note" or "Equipment Notes" means, as the context may require,
the equipment promissory note dated as of the date of this Agreement to be
executed by Debtor in favor of FFCA evidencing an Equipment Loan with respect to
a Premises or the equipment promissory notes dated as of the date of this
Agreement to be executed by Debtor in favor of FFCA evidencing the Equipment
Loans with respect to all of the Premises, as the same may be amended, restated
and/or substituted from time to time. An Equipment Note will be executed for
each Premises in the Equipment Loan Amount corresponding to such Premises.
"Equipment Security Agreement" or "Equipment Security Agreements" means,
as the context may require, the equipment security agreement dated as of the
date of this Agreement to be executed by Debtor for the benefit of FFCA with
respect to the Equipment at each Premises or the equipment security agreements
dated as of the date of this Agreement to be executed by Debtor for the benefit
of FFCA with respect to the Equipment at all of the Premises, as the same may be
amended from time to time. An equipment security agreement will be executed for
each of the Premises.
"Escrow Agent" means Lawyers Title Insurance Corporation, a
Virginia corporation.
"Event of Default" has the meaning set forth in Section 10.
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"Fee" means an underwriting, equipment assessment, valuation,
processing and commitment fee equal to 1% of the sum of the Equipment
Loan Amounts, which Fee shall be payable as set forth in Section 3.
"FFCA Entities" means, collectively, FFCA, Franchise Finance and any
Affiliate of FFCA or Franchise Finance.
"Franchise Finance" means Franchise Finance Corporation of
America, a Delaware corporation, and its successors.
"GAAP" means generally accepted accounting principles consistently
applied.
"Governmental Authority" means any governmental authority,
agency, department, commission, bureau, board, instrumentality, court or quasi-
governmental authority of the United States, the state where the Equipment is
located or any political subdivision thereof.
"Indemnified Parties" has the meaning set forth in Section 12.
"Loan Documents" means, collectively, this Agreement, the
Equipment Notes, the Equipment Security Agreements, the UCC-1
Financing Statements and all other documents executed in connection
therewith or contemplated thereby.
"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of loans
that are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"Lost Note" has the meaning set forth in Section 7.H.
"Master Lease" means the lease dated as of the date of this
Agreement between Debtor, as lessee, and Master Lessor, as lessor,
with respect to the Premises specified therein, as the same may be
amended from time to time.
"Master Lessor" means Uni Realty of Wilkes-Barre, L.P., a
Delaware limited partnership.
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition, worth or operations of Debtor, any or all of the Premises
or any or all of the Equipment, including, without limitation, the operation of
any of the Premises as a Uni-Mart Facility and/or the value of any or all of the
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Premises or Equipment, or (ii) Debtor's ability to perform the obligations under
the Loan Documents.
"Mortgage" or "Mortgages" has, as the context may require, the meanings
set forth in the Mortgage Loan Agreement.
"Mortgage Loan Agreement" means the loan agreement dated as of the date of
this Agreement between Master Lessor and FFCA with respect to mortgage loans to
be made by FFCA to Master Lessor, as the same may be amended from time to time.
"Mortgage Loan Documents" means the "Loan Documents" as defined in the
Mortgage Loan Agreement.
"Mortgage Note" or "Mortgage Notes" means, as the context may
require, the "Note" or "Notes" as defined in the Mortgage Loan
Agreement.
"Other Agreements" means, collectively, all agreements and
instruments between, among or by (1) any of the Debtor Entities, and,
or for the benefit of, (2) any of the FFCA Entities, including,
without limitation, promissory notes and guaranties; provided,
however, the term "Other Agreements" shall not include the agreements
and instruments defined as the Loan Documents.
"Participation" means one or more grants by FFCA or any of the other FFCA
Entities to a third party of a participating interest in notes evidencing
obligations to repay secured or unsecured loans owned by FFCA or any of the
other FFCA Entities or any or all servicing rights with respect thereto.
"Permitted Lien(s)" shall mean the right and interest of third party
lessors of certain Equipment incidental to the operation of each Uni Mart
Facility, including by way of example and without limitation, the right and
interest of the lessors of various coffee equipment, video security equipment,
certain gas dispensers and Slushy machines.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"Premises" means the parcels of real estate described in Exhibit A
attached hereto, all rights, privileges and appurtenances associated therewith,
and all buildings, fixtures and other improvements now or hereafter located
thereon (whether or not affixed to such real estate). As used herein, the term
"Premises" shall mean either a singular property or all of the properties
collectively, as the context may require.
"Securitization" means one or more sales, dispositions,
transfers or assignments by FFCA or any of the other FFCA Entities to
a special purpose corporation, trust or other entity identified by
FFCA or any of the other FFCA Entities of notes evidencing
obligations to repay secured or unsecured loans owned
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by FFCA or any of the other FFCA Entities (and, to the extent applicable, the
subsequent sale, transfer or assignment of such notes to another special purpose
corporation, trust or other entity identified by FFCA or any of the other FFCA
Entities), and the issuance of bonds, certificates, notes or other instruments
evidencing interests in pools of such loans, whether in connection with a
permanent asset securitization or a sale of loans in anticipation of a permanent
asset securitization. Each Securitization shall be undertaken in accordance
with all requirements which may be imposed by the investors or the rating
agencies involved in each such sale, disposition, transfer or assignment or
which may be imposed by applicable securities, tax or other laws or regulations,
including, without limitation, laws relating to FFCA's status as a real estate
investment trust.
"Substitute Documents" has the meaning set forth in Section 13.
"Substitute Equipment" means equipment, trade fixtures,
furniture, furnishings and appliances owned by Debtor, located at a
Substitute Premises and substituted for Equipment in accordance with
the requirements of Section 13.
"Substitute Premises" means one or more parcels of real property
substituted for a Premises in accordance with the requirements of Section 13 of
the Mortgage Loan Agreement, together with all rights, privileges and
appurtenances associated therewith, and all buildings, fixtures and other
improvements located thereon (whether or not affixed to such real estate).
Where two or more parcels of real property comprise a Substitute Premises, such
parcels shall be aggregated and deemed to constitute such Substitute
Premises for all purposes of this Agreement.
"Third Party Leases" means any leases of any Premises which are not
inconsistent with the operations of a Uni-Mart Facility on the Premises.
"Transfer" means one or more sales, transfers or assignments by FFCA or
any of the other FFCA Entities to a third party of notes evidencing obligations
to repay secured or unsecured loans owned by FFCA or any of the other FFCA
Entities or any or all servicing rights with respect thereto.
"Uni-Mart Facility" means a Uni-Mart or Orloski convenience
store with or without gasoline station as noted on Exhibit A, and
with such other ancillary uses permitted by the Third Party Leases
that are not inconsistent with the operations of such facilities.
"UCC-1 Financing Statements" means such UCC-1 Financing Statements as FFCA
shall require to be executed and delivered by Debtor with respect to the
Equipment.
2. TRANSACTION. On the terms and subject to the conditions
set forth in the Loan Documents, FFCA shall make the Equipment Loans
to Debtor to provide financing for the Equipment. The Equipment Loans will
be evidenced by the Equipment Notes and secured by the Equipment Security
Agreements and the UCC-1 Financing Statements. Debtor shall repay the
outstanding principal amount of the
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Equipment Loans together with interest thereon in the manner and in accordance
with the terms and conditions of the Equipment Notes and the other Loan
Documents. The aggregate Loan Amount shall be $1,100,000 allocated among the
Premises as set forth on Exhibit A. The Equipment Loans shall be advanced at
the Closing in cash or otherwise immediately available funds subject to any
prorations and adjustments required by this Agreement.
3. UNDERWRITING, VALUATION, PROCESSING AND COMMITMENT FEE.
Debtor paid FFCA a portion of the Fee pursuant to the Commitment, and
such portion was deemed fully earned when received. The remainder of the Fee
shall be paid at the Closing and shall be deemed nonrefundable and fully earned
upon the Closing. The Fee constitutes FFCA's underwriting, valuation,
processing and commitment fee. The portion of the Fee paid and the balance due
at Closing shall be adjusted down (and paid, returned or credited as
appropriate) to reflect a Fee equal to 1% of the actual Equipment Loan Amount.
In the event the transaction set forth in this Agreement fails to close due to a
breach or default by Debtor under this Agreement, FFCA shall retain the portion
of the Fee received by FFCA (without affecting or limiting FFCA's remedies set
forth in this Agreement).
4. CLOSING DATE. (a) The Equipment Loan shall be closed (the
"Closing") contemporaneously with the satisfaction of all of the terms and
conditions contained in this Agreement, but in no event shall the date of the
Closing be extended beyond April 20, 2000 unless such extension shall be
approved by FFCA in its sole discretion (the date on which the Closing shall
occur is referred to herein as the "Closing Date").
(b) Debtor and FFCA hereby engage Escrow Agent to act as escrow agent in
connection with the transactions described in this Agreement. Prior to the
Closing Date, the parties hereto shall deposit with Escrow Agent all documents
and moneys necessary to comply with their obligations under this Agreement. All
costs of such transaction shall be borne by Debtor, including, without
limitation, UCC search and litigation search charges, the reasonable
attorneys' fees of Debtor, attorneys' fees and expenses of FFCA,
FFCA's in-house equipment inspection costs and fees, stamp taxes,
transfer fees, and escrow, filing and recording fees. All personal
property and other applicable taxes and assessments and other charges
relating to the Equipment which are due and payable on or prior to the Closing
Date shall be paid by Debtor at or prior to the Closing. The Closing documents
shall be dated as of the Closing Date.
Escrow Agent shall not cause the transaction to close unless and until it
has received written instructions from FFCA and Debtor to do so. Debtor and
FFCA will deliver to Escrow Agent all documents, pay to Escrow Agent all sums
and do or cause to be done all other things necessary or required by this
Agreement to enable Escrow Agent to comply herewith. Escrow Agent is authorized
to pay, from any funds held by it for FFCA's or Debtor's respective credit all
amounts necessary to procure the delivery of such documents and to pay, on
behalf of FFCA and Debtor, all charges and obligations payable by them,
respectively. Debtor will pay all charges payable by it to Escrow Agent.
Escrow Agent is authorized, in the event any conflicting demand is made upon it
concerning these instructions or the escrow, at its election, to hold
any documents and/or funds deposited hereunder until an action shall
be brought in a court of competent jurisdiction to
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determine the rights of Debtor and FFCA or to interplead such documents and/or
funds in an action brought in any such court. Deposit by Escrow Agent of such
documents and funds, after deducting therefrom its charges and its expenses and
attorneys' fees incurred in connection with any such court action, shall relieve
Escrow Agent of all further liability and responsibility for such documents and
funds. Escrow Agent's receipt of this Agreement and opening of an escrow
pursuant to this Agreement shall be deemed to constitute conclusive evidence of
Escrow Agent's agreement to be bound by the terms and conditions of this
Agreement pertaining to Escrow Agent. Disbursement of any funds shall be made
by wire transfer, as directed by FFCA and Debtor. Escrow Agent shall be under
no obligation to disburse any funds represented by check or draft, and no check
or draft shall be payment to Escrow Agent in compliance with any of the
requirements hereof, until it is advised by the bank in which such check or
draft is deposited that such check or draft has been honored. Escrow Agent is
authorized to act upon any statement furnished by the holder or payee, or a
collection agent for the holder or payee, of any lien on or charge or assessment
in connection with the Equipment, concerning the amount of such charge or
assessment or the amount secured by such lien, without liability or
responsibility for the accuracy of such statement.
5. REPRESENTATIONS AND WARRANTIES OF FFCA. The
representations and warranties of FFCA contained in this Section are
being made by FFCA as of the date of this Agreement and the Closing
Date to induce Debtor to enter into this Agreement and consummate the
transactions contemplated herein, and Debtor has relied, and will
continue to rely, upon such representations and warranties from and
after the execution of this Agreement and the Closing. FFCA
represents and warrants to Debtor as follows:
A. Organization of FFCA. FFCA has been duly formed, is validly
existing and has taken all necessary action to authorize the execution,
delivery and performance by FFCA of this Agreement.
B. Authority of FFCA. The person who has executed this Agreement
on behalf of FFCA is duly authorized so to do.
C. Enforceability. Upon execution by FFCA, this Agreement shall
constitute the legal, valid and binding obligation of FFCA, enforceable
against FFCA in accordance with its terms.
All representations and warranties of FFCA made in this
Agreement shall survive the Closing.
6. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The representations and
warranties of Debtor contained in this Section are being made by Debtor as of
the date of this Agreement and the Closing Date to induce FFCA to enter into
this Agreement and consummate the transactions contemplated herein, and FFCA has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. Debtor represents
and warrants to FFCA as follows:
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A. Information and Financial Statements. Debtor has delivered to
FFCA financial statements (either audited financial statements or, if
Debtor does not have audited financial statements, certified financial
statements) and certain other information concerning itself, which
financial statements and other information are true, correct and complete
in all material respects; and no material adverse change has occurred with
respect to any such financial statements and other information provided to
FFCA since the date such financial statements and other information were
prepared or delivered to FFCA. Debtor understands that FFCA is relying upon
such financial statements and information and Debtor represents that
such reliance is reasonable. All such financial statements were
prepared in accordance with GAAP and accurately reflect as of the date of
this Agreement and the Closing Date, the financial condition of each
individual or entity to which they pertain.
B. Organization and Authority. (1) Debtor is duly organized or
formed, validly existing and in good standing under the laws of
its state of incorporation or formation, and qualified as a
foreign corporation, partnership or limited liability company,
as applicable, to do business in any jurisdiction where such
qualification is required. All necessary corporate, partnership
or limited liability company action has been taken to authorize
the execution, delivery and performance of this Agreement and
the other Loan Documents.
(2) The person(s) who have executed this Agreement on
behalf of Debtor are duly authorized so to do.
C. Enforceability of Documents. Upon execution by Debtor, this
Agreement and the other Loan Documents shall constitute the
legal, valid and binding obligations of Debtor, enforceable
against Debtor in accordance with their respective terms.
D. Litigation. There are no suits, actions, proceedings or
Investigations pending or threatened against or involving
Debtor, the Premises or the Equipment before any arbitrator or
Governmental Authority which might reasonably result in any
Material Adverse Effect.
E. Absence of Breaches or Defaults. Debtor is not, and the
authorization, execution, delivery and performance of this Agreement
and the other Loan Documents will not result, in any breach or
default under any other document, instrument or agreement to which
Debtor is a party or by which Debtor, the Premises, the Equipment or
any of the property of Debtor is subject or bound. The
authorization, execution, delivery and performance of this Agreement
and the other Loan Documents will not violate any applicable law,
statute, regulation, rule, ordinance, code, rule or order.
F. Intended Use; Compliance With Laws. Debtor intends to use the
Equipment solely in connection with the operation of a Uni-Mart
Facility, and for no other purposes. Such intended use will not
violate any zoning or other governmental requirement applicable
to the Equipment. The Equipment complies with all applicable
statutes, regulations, rules, ordinances, codes, licenses,
permits,
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orders and approvals of each Governmental Authority having
jurisdiction over the Equipment, including, without limitation,
all health, building, fire, safety and other codes, ordinances
and requirements, all applicable standards of the National Board
of Fire Underwriters and the Americans With Disabilities Act of
1990 and all policies or rules of common law, in each case, as
amended, and any judicial or administrative interpretation
thereof, including any judicial order, consent, decree or
judgment applicable to Debtor, except where such noncompliance
will not have a Material Adverse Effect.
G. Licenses and Permits. Debtor has all required
licenses and permits, both governmental and private, to use and
operate the Equipment in the intended manner, except to the
extent the failure to have such licenses and permits will not
have a Material Adverse Effect.
H. Condition of Equipment. The Equipment is of good
workmanship and materials, fully operational and in good condition and
repair, except to the extent the failure of the Equipment to be
in such condition will not have a Material Adverse Effect.
I. Title to Equipment; First Priority Lien. Title to the
Equipment is vested in Debtor, free and clear of all liens,
encumbrances, charges and security interests of any nature
whatsoever except for Permitted Liens. Upon Closing, FFCA shall
have a first priority lien on and security interest in the
Equipment pursuant to the Equipment Security Agreements and UCC-
1 Financing Statements.
J. No Other Agreements and Options. Neither Debtor nor the
Equipment are subject to any commitment, obligation, or
agreement, including, without limitation, any right of first
refusal, option to purchase or lease granted to a third party,
which could or would prevent or hinder FFCA in making the
Equipment Loans or exercising any of its rights or remedies
under the Loan Documents or prevent or hinder Debtor from
fulfilling its obligations under this Agreement or the other
Loan Documents except for Permitted Liens.
K. No Reliance. Debtor acknowledges that FFCA did not prepare
or assist in the preparation of any of the projected financial
information used by Debtor in analyzing the economic viability
and feasibility of the transaction contemplated by this
Agreement. Furthermore, Debtor acknowledges that it has not
relied upon, nor may it hereafter rely upon, the analysis
undertaken by FFCA in determining the Equipment Loan Amount, and
such analysis will not be made available to Debtor.
L. Mechanics Liens. There are no outstanding accounts
payable which if not paid timely would have a Material Adverse Effect,
nor are there any mechanics' liens, or rights to claim a
mechanics' lien in favor of any materialman, laborer, or any
other person or entity in connection with labor or materials
furnished to or performed on any portion of the Equipment and no
work has been performed or is in progress nor have materials
been supplied to the Premises or agreements entered into for
work to be performed or materials to be supplied to the Premises
prior to
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the date hereof, which will not have been fully paid for on or before the
Closing Date or which might provide the basis for the filing of such liens
against the Equipment or any portion thereof, the existence, nonpayment or
filing of which would have a Material Adverse Effect; and Debtor
shall and does hereby agree to defend, indemnify and forever
hold FFCA and FFCA's designees harmless from and against any and
all such mechanics' lien claims, accounts payable or other
commitments relating to the Equipment.
M. Master Lease. Debtor has delivered to FFCA a certified
true, correct and complete copy of the Master Lease. The Master
Lease has not been modified, amended, supplemented or otherwise
revised. The Master Lease is the only lease or agreement between
Master Lessor and Debtor with respect to the Premises. The
Master Lease is in full force and effect and constitutes the
legal, valid and binding obligations of Debtor, enforceable
against Debtor in accordance with its terms. Debtor has not
assigned, transferred, mortgaged, hypothecated or otherwise
encumbered the Master Lease or any interest therein, and Debtor
has not received any notice that Master Lessor has made any
assignment, pledge or hypothecation of all or any part of its
interests in the Master Lease. Debtor has not received a notice
of default from Master Lessor which has not been cured or given
any notice of default to Master Lessor which has not been cured.
No event has occurred and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute
a default by Master Lessor or Debtor under the Master Lease.
All representations and warranties of Debtor made in this
Agreement shall be and will remain true and complete as of and
subsequent to the Closing Date as if
made and restated in full as of such time and shall survive the
Closing.
7. COVENANTS. Debtor covenants to FFCA from and after the
Closing Date as
follows:
A. Inspections. Debtor shall, at all reasonable times,
(i) provide FFCA and FFCA's officers, employees, agents,
advisors, attorneys, accountants, architects, and engineers with
access to the Premises and the Equipment, all drawings, plans,
and specifications for the Premises and the Equipment in
possession of Debtor, all engineering reports relating to the
Premises and the Equipment in the possession of Debtor, the
files and correspondence relating to the Premises and the
Equipment, and the financial books and records, including lists
of delinquencies, relating to the ownership, operation, and
maintenance of the Premises and the Equipment, and (ii) allow
such persons to make such inspections, tests, copies, and
verifications as FFCA considers necessary without unreasonably
interrupting Debtor's business (to the extent reasonably
possible) and upon reasonable advance notice.
B. Removal of Equipment. Except for purposes of
replacement with like property of equal or greater value and
repair in the ordinary course of
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business, Debtor shall not remove or allow to be removed from
the Premises the Equipment, or any part thereof, without the
prior written consent of FFCA. Debtor shall promptly give
written notice to FFCA of any substantial change in the
character of the business conducted on any of the Premises and
of the cessation of all or any part thereof and of any loss or
damage by fire or other casualty to any substantial part of the
Equipment.
C. No Additional Encumbrances; Perfected Security
Interest. Except as expressly provided in Section 7.B above,
Debtor shall remain the owner of the Equipment (whether acquired
prior to or after the date hereof) free from any lien, security
interest or encumbrance except those in favor of FFCA, and
Debtor shall not execute or permit the filing of any other such
financing statement thereon other than the UCC-1 Financing
Statements. Debtor shall defend the Equipment against all
claims and demands of all persons. Debtor shall not permit any
action to be taken which would adversely affect the value of the
Equipment or which would encumber, dilute or cloud Debtor's
title or interest therein. FFCA at all times shall have a
perfected security interest in the Equipment that shall be prior
to any other interests therein. Debtor shall do all acts and
things, shall execute and file all instruments (including
security agreements, UCC financing statements, continuation
statements, etc.) requested by FFCA to establish, maintain and
continue the perfected security interest of FFCA in the
Equipment, and shall promptly on demand pay all costs and
expenses of (a) filing and recording, including the costs of any
searches deemed necessary by FFCA from time to time to establish
and determine the validity and the continuing priority of the
security interest of FFCA, and (b) all other claims and charges
that in the opinion of FFCA might prejudice, imperil or
otherwise affect the Equipment or security interest therein of
FFCA. Debtor agrees that a carbon, photographic or other
reproduction of a security agreement or financing statement
shall be sufficient as a financing statement. FFCA is hereby
irrevocably appointed Debtor's attorney-in-fact to take any of
the foregoing actions requested of Debtor by FFCA if Debtor
should fail to take such actions, which appointment shall be
deemed coupled with an interest.
D. Maintenance and Repair. Debtor shall at all times
keep and maintain the Equipment in good order, repair and
condition and will promptly replace any part thereof that from
time to time may become obsolete, badly worn or in a state of
disrepair or, if supplies, be consumed in the normal course of
Debtor's business operations. FFCA shall have a lien on and
security interest in all replacements and all replacements shall
be free of any other lien, security interest or encumbrance of
any nature, including any purchase money lien or security
interest. Debtor shall not transfer or permit any transfer of
any part of the Equipment to be made or any interest therein to
be created by way of a sale (except as permitted below), by way
of a grant of a security interest, or by way of a levy or other
judicial process. In addition thereto, Debtor may dispose of
Equipment which becomes obsolete without notice to FFCA provided
such disposition is in the ordinary course of its business and
consistent with its past practices, the fair market value of
such Equipment at the time of disposition does not exceed
$10,000 per Premises and such disposition does not otherwise
operate to diminish the security of FFCA in any material
fashion.
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E. Notices. Debtor shall promptly notify FFCA of any
levy, distraint or other seizure by legal process or otherwise
of any part of the Equipment and of any threatened or filed
claims or proceedings that might in any way affect or impair any
of the Equipment.
F. Insurance. Debtor shall obtain and maintain in force
insurance policies, naming FFCA as sole loss payee and as
additional insured, covering losses or damage to the Equipment
due to fire (with extended coverage), theft, physical damage and
other such risks at its full replacement cost from time to time.
FFCA is hereby irrevocably appointed Debtor's attorney-in-fact
to endorse any check or draft that may be payable to Debtor,
alone or jointly with other payees, so that FFCA may collect the
proceeds payable for any loss under such insurance, which
appointment shall be deemed coupled with an interest. The
proceeds of such insurance, less any costs and expenses incurred
or paid by FFCA in the collection thereof, shall be applied
toward the cost of repair or replacement of the items damaged or
destroyed if an Event of Default does not exist at the time of
such damage or destruction or if an Event of Default does exist,
then, at the option of FFCA, on account of any sums secured by
the Equipment Security Agreement, whether or not then due or
payable. As an alternative to maintaining all of the insurance
required under this section with third party insurers, Debtor
may elect to self-insure for a portion of the required coverages
pursuant to a self-insurance program, provided that (i) the
total amount of self-insurance provided by Debtor with respect
to each policy of insurance required to be maintained by Debtor
hereunder shall not exceed $400,000 for each Premises, and (ii)
Debtor maintains a Net Worth (as defined hereafter) equal to at
least $20,000,000.00; provided, that Debtor shall at all times
provide the remaining portion of the coverages set forth in this
section with third party insurers complying with the provisions
of this section. The amount of all deductibles with respect to
such third party policies shall not, however, exceed in the
aggregate, when added to the amount of selfinsurance, the policy
limitation on self-insurance provided in the preceding sentence.
For purposes hereof, the term "Net Worth" means the total equity
in Debtor, determined in accordance with GAAP.
G. Actions by FFCA. (i) Debtor agrees that FFCA may, at
its option, and without any obligation to do so, pay, perform,
and discharge any and all amounts, costs, expenses and
liabilities that are the responsibility of Debtor under the Loan
Documents if Debtor fails to timely pay, perform or discharge
the same and such failure shall continue for 5 days after
Debtor's receipt of written demand from FFCA (except in the case
of an emergency which may have a Material Adverse Effect), and
all amounts expended by FFCA in so doing or in respect of or in
connection with the Equipment shall become part of the
obligations secured by the Loan Documents and shall be
immediately due and payable by Debtor to FFCA upon demand
therefor and shall bear interest at the Default Rate (as defined
in the Equipment Notes).
(ii) Debtor agrees that the Loan Documents shall remain in
full effect, without waiver or surrender of any of FFCA's rights
thereunder, notwithstanding any one or more of the following:
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(1) Extension of the time of payment of the whole or any
part of any of the Equipment Notes;
(2) Any change in the terms and conditions of any of the
Equipment Notes;
(3) Substitution of any other evidence of indebtedness for
any of the
Equipment Notes;
(4) Acceptance by FFCA of any collateral or security of
any kind for the payment of any of the Equipment Notes;
(5) Surrender, release, exchange or alteration of any
Equipment, collateral or other security, either in whole or in
part; or
(6) Release, settlement, discharge, compromise, change or
amendment, in whole or in part, of any claim of FFCA against
Debtor or of any claim against any guarantor or other party
secondarily or additionally liable for the payment of any of the
Equipment Notes.
H. Lost Note. Debtor shall, if any Equipment Note is mutilated,
destroyed, lost or stolen (a "Lost Note"), promptly deliver to
FFCA, upon receipt of an affidavit from FFCA stipulating that
the Equipment Note has been mutilated, destroyed, lost or
stolen, in substitution therefor, a new promissory note
containing the same terms and conditions as such Lost Note with
a notation thereon of the unpaid principal and accrued and
unpaid interest. Debtor shall provide fifteen (15) days' prior
notice to FFCA before making any payments to third parties in
connection with a Lost Note. Except as a result of the gross
negligence or intentional misconduct of Debtor, FFCA shall
indemnify Debtor for all reasonable costs, expenses, damages,
claims and liabilities incurred by Debtor as a result of a Lost
Note.
J. Master Lease Modifications. The Master Lease shall
not be modified, amended, terminated, cancelled or surrendered
without FFCA's prior written consent.
8. TRANSACTION CHARACTERIZATION. This Agreement is a contract to
extend a financial accommodation (as such term is used in the Code)
for the benefit of Debtor. It is the intent of the parties hereto
that the business relationship created by this Agreement, the
Equipment Notes, the Equipment Security Agreements and the other Loan
Documents is solely that of creditor and debtor and has been entered
into by both parties in reliance upon the economic and legal bargains
contained in the Loan Documents. None of the agreements contained in
the Loan Documents is intended, nor shall the same be deemed or
construed, to create a partnership (either de jure or de facto)
between Debtor and FFCA, to make them joint venturers, to make Debtor
an agent, legal representative, partner, subsidiary or employee of
FFCA, nor to make FFCA in any way responsible for the debts,
obligations or losses of Debtor.
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9. CONDITIONS OF CLOSING. The obligation of FFCA to
consummate the transaction contemplated by this Agreement is subject
to the fulfillment or waiver of each of the following conditions:
A. Title. Title to the Equipment shall be vested in
Debtor, free of all liens, encumbrances, restrictions,
encroachments and easements, except the liens created by the
Equipment Security Agreement and the UCC-1 Financing Statements.
Upon Closing, FFCA will obtain a valid and perfected first
priority lien upon and security interest in the Equipment.
B. Condition of Equipment. FFCA shall have inspected and approved
the Equipment, and the Equipment shall be in good condition and repair and
of good workmanship and materials, all as determined by FFCA in
its sole discretion, except where the failure of the Equipment
to be in such condition will not have a Material Adverse Effect.
C. Compliance With Representations, Warranties and Covenants. All
obligations of Debtor under this Agreement shall have been fully
performed and complied with, and no event shall have occurred or
condition shall exist which would, upon the Closing Date, or, upon
the giving of notice and/or passage of time, constitute a breach or
default hereunder or under the Loan Documents or any other agreement
between FFCA and Debtor pertaining to the subject matter hereof, and
no event shall have occurred or condition shall exist or information
shall have been disclosed by Debtor or discovered by FFCA which has
had or would have a Material Adverse Effect on the Premises, the
Equipment, Debtor or FFCA's willingness to consummate the transaction
contemplated by this Agreement, as determined by FFCA in its sole and
absolute discretion.
D. Proof of Insurance. Debtor shall have delivered to
FFCA copies of insurance policies, showing that all insurance
required by the Loan Documents and providing coverage and limits
satisfactory to FFCA are in full force and effect.
E. Opinion of Counsel to Debtor. Debtor shall have caused Counsel
to prepare and deliver an opinion to FFCA in form and substance
satisfactory to FFCA and its counsel.
F. Availability of Funds. FFCA presently has sufficient funds to
Discharge its obligations under this Agreement. In the event
that the transaction contemplated by this Agreement does not
close on or before the Closing Date, FFCA does not warrant that
it will thereafter have sufficient funds to consummate the
transaction contemplated by this Agreement.
G. Evidence of Ownership. Debtor shall have provided FFCA with
Evidence reasonably satisfactory to FFCA that the Equipment is owned by
Debtor free and clear of all liens and encumbrances, which
evidence shall include, without limitation, certified UCC
financing statement searches, and to the extent requested by
FFCA and obtainable, bills of sale executed and delivered by the
vendors of the Equipment.
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G. Master Lease. The Master Lease shall be in full force and
effect and Debtor shall be entitled to occupy the Premises corresponding
thereto. FFCA shall have approved the Master Lease in its sole discretion.
I. Closing Documents. At or prior to the Closing Date, FFCA and/or
Debtor, as may be appropriate, shall execute and deliver or cause to be
executed and delivered to Escrow Agent or FFCA, as may be
appropriate, all documents required to be delivered by this
Agreement, and such other documents, payments, instruments and
certificates, as FFCA may require in form acceptable to FFCA,
including, without limitation, the following:
(1) Equipment Notes;
(2) Equipment Security Agreements;
(3) Proof of Insurance;
(4) Opinion of Counsel to Debtor;
(5) UCC-1 Financing Statements;
(6) Certifications (Confession of Judgment); and
(7) Explanations and Waiver of Rights Regarding Confession of
Judgment.
Upon fulfillment or waiver of all of the above conditions, FFCA shall deposit
funds necessary to close this transaction with the Escrow Agent and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
10. DEFAULT AND REMEDIES. A. Each of the following shall be deemed
an event of default by Debtor (each, an "Event of Default"):
(1) If any representation or warranty of Debtor set forth
in any of the Loan Documents is false in any respect and such
falsity would result in a Material Adverse Effect, or if Debtor
renders any false statement or account in any material respect.
(2) If any principal, interest or other monetary sum due
under the Equipment Note, the Equipment Security Agreement or
any other Loan Document is not paid within five days after the
date when due; provided, however, notwithstanding the occurrence
of such an Event of Default, FFCA shall not be entitled to
exercise its rights and remedies set forth below unless and
until FFCA shall have given Debtor notice thereof and a period
of five days from the delivery of such notice shall have elapsed
without such Event of Default being cured.
(3) If Debtor fails to observe or perform any of the other covenants,
conditions, or obligations of this Agreement; provided, however, if any
such failure does not involve the payment of any monetary sum, is not
willful or intentional, does not place any rights or property of FFCA in
immediate jeopardy, and is within the reasonable power of Debtor to
promptly cure after receipt of notice thereof, all as determined
by FFCA in its reasonable discretion, then such failure shall
not constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and
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until FFCA shall have given Debtor notice thereof and a period
of 30 days shall have elapsed, during which period Debtor may
correct or cure such failure, upon failure of which an Event of
Default shall be deemed to have occurred hereunder without
further notice or demand of any kind being required. If such
failure cannot reasonably be cured within such 30-day period, as
determined by FFCA in its reasonable discretion, and Debtor is
diligently pursuing a cure of such failure, then Debtor shall
have a reasonable period to cure such failure beyond such 30-day
period, which shall not exceed 90 days after receiving notice of
the failure from FFCA. If Debtor shall fail to correct or cure
such failure within such 90-day period, an Event of Default
shall be deemed to have occurred hereunder without further
notice or demand of any kind being required.
(4) If Debtor becomes insolvent within the meaning of the
Code, files or notifies FFCA that it intends to file a petition
under the Code, initiates a proceeding under any similar law or
statute relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts (collectively, an "Action"),
becomes the subject of either a petition under the Code or an
Action, or is not generally paying its debts as the same become
due or if Debtor becomes the subject of an involuntary petition
under the Code or other similar involuntary Action (in which
case Debtor shall be required to provide FFCA with immediate
notice of the commencement or filing of such involuntary
petition or Action), and any of the following shall have
occurred: (i) the involuntary petition or involuntary Action
shall not have been dismissed within 60 days of the date on
which it was filed or otherwise commenced, (ii) an order for
relief under the Code (or similar order) shall have been entered
by the court in the involuntary proceeding or involuntary
Action, or (iii) the court having jurisdiction over such
involuntary proceeding or involuntary Action (upon motion or
other request for relief by the party against whom the
involuntary petition or involuntary Action was filed or
otherwise commenced) shall not have granted FFCA full and final
relief from the automatic stay of Section 362 of the Code and
from any stay issued under Section 105 of the Code (or any
similar stays or injunctions) within 30 days of the filing or
commencement of such involuntary petition or involuntary Action
so that FFCA is thereafter free to exercise any and all of its
rights and remedies under the Loan Documents.
(5) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or
grace periods, under any other Loan Document, any Mortgage Loan
Document or any of the Other Agreements.
(6) If there is a breach or default, after the passage of
any applicable notice and grace period, under the Master Lease
or if the Master Lease terminates or expires prior to the
scheduled maturity date of the Equipment Note.
B. Upon the occurrence of an Event of Default, subject to the
limitations set forth in subsection A, FFCA may declare all or any
part of the obligations of Debtor under the Equipment Note, this Agreement and
any other Loan Document to be due and payable, and the same shall thereupon
become due and payable without any presentment, demand, protest or notice of
any kind, and Debtor hereby waives
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notice of intent to accelerate the obligations secured by the Equipment Security
Agreement and notice of acceleration. Thereafter, FFCA may exercise, at its
option, concurrently, successively or in any combination, all remedies available
at law or in equity, including without limitation any one or more of the
remedies available under the Equipment Notes, the Equipment Security Agreements
or any other Loan Document. Neither the acceptance of this Agreement nor its
enforcement shall prejudice or in any manner affect FFCA's right to realize upon
or enforce any other security now or hereafter held by FFCA, it being agreed
that FFCA shall be entitled to enforce this Agreement and any other security now
or hereafter held by FFCA in such order and manner as it may in its absolute
discretion determine. No remedy herein conferred upon or reserved to FFCA is
intended to be exclusive of any other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to FFCA, or to which FFCA may be otherwise entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by FFCA.
11. ASSIGNMENTS. A. FFCA may assign in whole or in part its
rights under this Agreement, including, without limitation, any Transfer,
Participation and/or Securitization. Upon any unconditional assignment of
FFCA's entire right and interest hereunder, FFCA shall automatically be
relieved, from and after the date of such assignment, of liability for the
performance of any obligation of FFCA contained herein.
B. Except as expressly permitted herein, Debtor shall not,
without the prior written consent of FFCA, sell, assign, transfer,
mortgage, convey, encumber or grant any easements or other rights or
interests of any kind in the Equipment, except for Permitted Liens, any of
Debtor's rights under this Agreement or any interest in Debtor, whether
voluntarily, involuntarily or by operation of law or otherwise, including,
without limitation, by merger, consolidation, dissolution or otherwise,
except, subsequent to the Closing, as expressly permitted by the Mortgages.
12. INDEMNITY. Debtor agrees to indemnify, hold harmless and
defend FFCA and its directors, officers, shareholders, employees,
successors, assigns, agents, contractors, subcontractors, experts,
licensees, affiliates, lessees, lenders, mortgagees, trustees and
invitees, as applicable (collectively, the "Indemnified Parties"),
for, from and against any and all losses, costs, claims, liabilities,
damages and expenses, including, without limitation, reasonable
attorneys' fees and court costs, arising as the result of a breach of
any of the representations, warranties, covenants, agreements or
obligations of Debtor set forth in this Agreement or any other Loan
Document. Without limiting the generality of the foregoing, such
indemnity shall include, without limitation, any engineering,
governmental inspection and reasonable attorneys' fees and expenses
that the Indemnified Parties may incur by reason of any
representation set forth in this Agreement being false, or by reason
of any investigation or claim of any governmental agency in
connection therewith.
13. SUBSTITUTION. If Master Lessor exercises its right to
substitute a Substitute Premises for the Premises pursuant to Section 13 of the
Mortgage Loan Agreement and the Equipment Loan for such Premises is
still outstanding, Debtor shall substitute Substitute Equipment
located at such Substitute Premises for the
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<PAGE> 147
Equipment located at the Premises, such substitution to occur simultaneously
with the closing of the substitution of such Substitute Premises and be
otherwise on the following conditions:
(i) The proposed Substitute Equipment must:
(1) be suitable for use in a Uni-Mart Facility and in
good condition and repair, ordinary wear and tear excepted;
(2) be owned by and vested in Debtor, free and clear
of all liens and encumbrances; and
(3) have a fair market value no less than the greater
of the then fair market value of the Equipment to be
replaced or the fair market value of such Equipment as of
the Closing, all as reasonably determined by FFCA's in-
house inspectors and underwriters;
(ii) FFCA shall have inspected and approved the Substitute
Equipment utilizing FFCA customary inspection and underwriting
approval criteria. Debtor shall have reimbursed FFCA for all of
its costs and expenses incurred with respect to such proposed
substitution, including, without limitation, FFCA's thirdparty
and/or in-house site inspectors' costs and expenses with respect
to the proposed Substitute Equipment. Debtor shall be solely
responsible for the payment of all costs and expenses resulting
from such proposed substitution, including, without limitation,
filing charges and expenses, the cost of stamp taxes and the
attorneys' fees and expenses of counsel to Debtor and FFCA;
(iii) FFCA shall have received UCC search results
indicating that the proposed Substitute Equipment is free and
clear of all liens, security interests and encumbrances;
(iv) Debtor shall deliver, or cause to be delivered, with
respect to Debtor and the Substitute Equipment, opinions of
Counsel in form and substance comparable to those received at
Closing (but also addressing such matters unique to the
Substitute Equipment as may be reasonably required by FFCA);
(v) no Event of Default, and no event, action or inaction
that, with the passage of time or the giving of notice, or both,
would constitute an Event of Default, shall have occurred and be
continuing under any Loan Document or any Other Agreement;
(vi) Debtor shall have executed such documents as are
comparable to the security documents executed and delivered at
Closing (but with such revisions as may be reasonably required
by FFCA to address matters unique to the Substitute Equipment)
or amendments to such documents, including, without limitation,
an Equipment Security Agreement and UCC-1 Financing Statements
(the "Substitute Documents"), to provide FFCA with a first
priority lien on and security interests in the proposed
Substitute Equipment and all other rights, remedies and benefits
with respect to the proposed
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Substitute Equipment which FFCA holds in the Equipment to be
replaced, all of which documents shall be in form and substance
reasonably satisfactory to FFCA;
(vii) the representations and warranties set forth in the
Substitute Documents and Section 6 of this Agreement applicable
to the proposed Substitute Equipment shall be true and correct
in all material respects as of the date of substitution, and
Debtor shall have delivered to FFCA an officer's certificate
certifying to that effect; and
(viii) Debtor shall have delivered to FFCA certificates of
insurance showing that insurance required by the Substitute
Documents is in full force and effect.
Upon satisfaction of the foregoing conditions with respect to the
release of the Equipment located at the Premises to be replaced:
(a) the proposed Substitute Equipment shall be deemed
substituted for the Equipment to be replaced, and the proposed
Substitute Premises shall be deemed substituted for the Premises
to be replaced;
(b) the Substitute Equipment shall be referred to as
"Equipment" and included within the definition of "Equipment,"
and the Substitute Premises shall be referred to as "Premises"
and included within the definition of "Premises";
(d) the Substitute Documents shall be dated as of the date
of the substitution and shall secure the same Obligations (as
defined in the Equipment Security Agreement) as were secured by
the Equipment; and
(e) FFCA will release, or cause to be released, the lien
and security interests of the Equipment Security Agreement, UCC-
1 Financing Statements and any other Loan Documents encumbering
the replaced Equipment.
14. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this
Agreement shall be in writing and given by (i) hand delivery, (ii)
facsimile, (iii) express overnight delivery service or (iv)
certified or registered mail, return receipt requested, and shall
be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) ransmission, if delivered by facsimile, (c) the
next business day, if delivered by express overnight delivery
service, or (d) the third business day following the day of
deposit of such notice with the United States Postal Service, if
sent by certified or registered mail, return receipt requested.
Notices shall be provided to the parties and addresses (or
facsimile numbers, as applicable) specified below:
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If to Debtor: N. Gregory Petrick
Senior Vice President Uni-Marts, Inc.
477 East Beaver Avenue
State College, PA 16801-5690 Telephone:
(814) 234-6000
Telecopy: (814) 234-3277
If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President, General
Counsel and Secretary
FFCA Acquisition Corporation 17207
North Perimeter Drive Scottsdale, AZ 85255
Telephone: (480) 585-4500
Telecopy: (480) 585-2226
B. Brokerage Commission. FFCA and Debtor represent and
warrant to each other that they have dealt with no broker,
agent, finder or other intermediary in connection with the
transactions contemplated by this Agreement. FFCA and Debtor
shall indemnify and hold each other harmless from and against
any costs, claims or expenses, including attorneys' fees,
arising out of the breach of their respective representations
and warranties contained within this Section.
C. Waiver and Amendment. No provisions of this Agreement
shall be deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or
amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion.
D. Captions. Captions are used throughout this Agreement
for convenience of reference only and shall not be considered in
any manner in the construction or interpretation hereof.
E. Intentionally Omitted.
F. Severability. The provisions of this Agreement shall
be deemed severable. If any part of this Agreement shall be
held unenforceable, the remainder shall remain in full force and
effect, and such unenforceable provision shall be reformed by
such court so as to give maximum legal effect to the intention
of the parties as expressed therein.
G. Construction Generally. This is an agreement between
parties who are experienced in sophisticated and complex matters
similar to the transaction contemplated by this Agreement and is
entered into by both parties in reliance upon the economic and
legal bargains contained herein and shall be interpreted and
construed in a fair and impartial manner
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without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the
domicile of any party. Debtor and FFCA were each represented by
legal counsel competent in advising them of their obligations
and liabilities hereunder.
H. Other Documents. Each of the parties agrees to sign
such other and further documents as may be appropriate to carry
out the intentions expressed in this Agreement.
I. Attorneys' Fees. In the event of any judicial or
other adversarial proceeding between the parties concerning this
Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and other costs in addition to any
other relief to which it may be entitled. References in this
Agreement to the attorneys' fees and/or costs of FFCA shall mean
both the fees and costs of independent outside counsel retained
by FFCA with respect to this transaction and the fees and costs
of FFCA's in-house counsel incurred in connection with this
transaction.
J. Entire Agreement. This Agreement and the other Loan
Documents, together with any other certificates, instruments or
agreements to be delivered in connection therewith, constitute
the entire agreement between the parties with respect to the
subject matter hereof, and there are no other representations,
warranties or agreements, written or oral, between Debtor and
FFCA with respect to the subject matter of this Agreement.
Notwithstanding anything in this Agreement to the contrary, upon
the execution and delivery of this Agreement by Debtor and FFCA,
the Commitment shall be null and void and of no further force
and effect and the terms and conditions of this Agreement shall
control notwithstanding that such terms and conditions may be
inconsistent with or vary from those set forth in the
Commitment.
K. Forum Selection; Jurisdiction; Venue; Choice of Law.
Debtor acknowledges that this Agreement was substantially
negotiated in the State of Arizona, the Agreement was signed by
FFCA in the State of Arizona and executed and delivered by
Debtor in the State of Arizona, all payments under the Equipment
Note will be delivered in the State of Arizona and there are
substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of
any action or proceeding arising out of this Agreement, the
parties hereto hereby expressly submit to the jurisdiction of
all federal and state courts located in the State of Arizona and
Debtor consents that it may be served with any process or paper
by registered mail or by personal service within or without the
State of Arizona in accordance with applicable law. Furthermore,
Debtor waives and agrees not to assert in any such action, suit
or proceeding that it is not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding
is brought in an inconvenient forum or that venue of the action,
suit or proceeding is improper. It is the intent of the parties
hereto that all provisions of this Agreement shall be governed
by and construed under the laws of the State of Arizona, without
giving effect to its principles of conflicts of law. To the
extent that a court of competent jurisdiction finds Arizona law
inapplicable with respect to any provisions
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<PAGE> 151
hereof, then, as to those provisions only, the laws of the state where the
Equipment is located shall be deemed to apply. Nothing in this
Section shall limit or restrict the right of FFCA to commence
any proceeding in the federal or state courts located in the
state in which the Equipment is located to the extent FFCA deems
such proceeding necessary or advisable to exercise remedies
available under this Agreement or the other Loan Documents.
L. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an
original.
M. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of Debtor and FFCA and their respective
successors and permitted assigns, including, without limitation,
any United States trustee, any debtor in possession or any
trustee appointed from a private panel.
N. Survival. Except for the conditions of Closing set
forth in Section 9, which shall be satisfied or waived as of the
Closing Date, all representations, warranties, agreements,
obligations and indemnities of Debtor and FFCA set forth in this
Agreement shall survive the Closing.
O. Waiver of Jury Trial and Punitive, Consequential,
Special and Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO
A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR AND FFCA HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES FROM THE OTHER AND ANY OF THE OTHER'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY IT AGAINST THE
OTHER OR ANY OF THE OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY
DEBTOR AND FFCA OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN.
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<PAGE> 152
P. Transfers, Participations and Securitizations. (1) A
material inducement to FFCA's willingness to complete the
transactions contemplated by the Loan Documents is Debtor's
agreement that FFCA may, at any time, complete a Transfer,
Participation or Securitization with respect to any Equipment
Note, any Equipment Security Agreement and/or any of the other
Loan Documents, or any or all servicing rights with respect
thereto.
(2) Debtor agrees to cooperate in good faith with FFCA in
connection with any such Transfer, Participation and/or
Securitization of any Equipment Note, any Equipment Security
Agreement and/or any of the other Loan Documents, or any or all
servicing rights with respect thereto, including, without
limitation (i) providing such documents, financial and other
data, and other information and materials (the "Disclosures")
which would typically be required with respect to Debtor by a
purchaser, transferee, assignee, servicer, participant, investor
or rating agency involved with respect to such Transfer,
Participation and/or Securitization, as applicable; provided,
however, Debtor shall not be required to make Disclosures of any
confidential information or any information which has not
previously been made public unless required by applicable
federal or state securities laws; and (ii) amending the terms of
the transactions evidenced by the Loan Documents to the extent
necessary so as to satisfy the requirements of purchasers,
transferees, assignees, servicers, participants, investors or
selected rating agencies involved in any such Transfer,
Participation and/or Securitization, so long as such amendments
would not have a material adverse effect upon Debtor or the
transactions contemplated hereunder.
(3) Debtor consents to FFCA providing the Disclosures, as
well as any other information which FFCA may now have or
hereafter acquire with respect to the Premises, the Equipment or
the financial condition of Debtor to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency
involved with respect to each Transfer, Participation and/or
Securitization, as applicable. FFCA and Debtor (and their
respective Affiliates) shall each pay their own attorneys fees
and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in
this Agreement, the other Loan Documents or any Other
Agreements:
(a) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan or
sale/leaseback transaction which has not been the subject
of a Securitization, Participation or Transfer shall not
constitute an Event of Default or a breach or default, as
applicable, under any Loan Document or Other Agreement
which relates to a loan which has been the subject of a
Securitization, Participation or Transfer;
(b) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan which
is included in any Loan Pool shall not constitute an Event
of Default or a breach or default, as
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<PAGE> 153
applicable, under any Loan Document or Other Agreement
which relates to a loan which is included in any other Loan
Pool;
(c) the Loan Documents corresponding to the Equipment
Note in any Loan Pool shall not secure the obligations of
any of the Debtor Entities contained in any Loan Document
or Other Agreement which does not correspond to a loan in
such Loan Pool; and
(d) the Loan Documents and Other Agreements which do
not correspond to a loan in any Loan Pool shall not secure
the obligations of any of the Debtor Entities contained in
any Loan Document or Other Agreement which does correspond
to a loan in such Loan Pool.
IN WITNESS WHEREOF, Debtor and FFCA have entered into this
Agreement as of the date first above written.
FFCA:
FFCA ACQUISITION CORPORATION, a
Delaware corporation
By /S/ MARK E. WOOD
Printed Name Mark E. Wood
Its Vice President
DEBTOR:
UNI-MARTS, INC., a Delaware corporation
By /S/ N. GREGORY PETRICK
N. Gregory Petrick
Senior Vice President
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<PAGE> 154
EXHIBIT 20.4
EQUIPMENT LOAN AGREEMENT
(Funding)
THIS EQUIPMENT LOAN AGREEMENT (this "Agreement") is made as of
April 21,2000, by and between FFCA FUNDING CORPORATION, a Delaware
corporation ("FFCA"), whose address is 17207 North Perimeter Drive,
Scottsdale, Arizona 852550, and UNI-MARTS, a Delaware corporation
("Debtor"), whose address is 477 East Beaver Avenue, State College,
Pennsylvania 16801-5690.
PRELIMINARY STATEMENT:
Unless otherwise expressly provided herein, all defined terms
used in this Agreement shall have the meanings set forth in Section
1. Debtor has requested from FFCA, and applied for the Equipment
Loan to provide long-term financing for the Equipment, and for no
other purpose whatsoever. The Equipment Loan will be evidenced by
the Equipment Note and secured by a first priority security interest
in the Equipment pursuant to an Equipment Security Agreement and UCC-
1 Financing Statements. FFCA has committed to make the Equipment
Loan pursuant to the terms and conditions of the Commitment, this
Agreement and the other Loan Documents.
AGREEMENT:
In consideration of the mutual covenants and provisions of this
Agreement, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following
meanings for all purposes of this Agreement:
"Action" has the meaning set forth in Section 10.A(4).
"Additional Collateral" means Debtor's leasehold interest and
fee simple title in the parcel of real estate described in Exhibit C
attached hereto, all rights, privileges and appurtenances associated
therewith, and all buildings, fixtures and other improvements now or
hereafter located thereon (whether or not affixed to the real
estate).
"Additional Collateral Lease" means that certain Lease on
Exhibit C attached hereto pursuant to which Debtor, as lessee, leases a portion
of the Additional Collateral.
"Additional Collateral Mortgage" means the Mortgage dated as of
the date of this Agreement to be executed by Debtor for the benefit of FFCA
with respect to the Additional Collateral.
"Affiliate" means any Person which directly or indirectly
controls, is under common control with, or is controlled by any other
Person. For purposes of this definition, "controls", "under common
control with" and "controlled by" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through
ownership of voting securities or otherwise.
<PAGE> 155
"Business Day" means any day on which FFCA is open for business
other than a Saturday, Sunday or a legal holiday, ending at 5:00 PM
Phoenix, Arizona time.
"Capital Lease" has the meaning set forth in Section 7.L.
"Closing" shall have the meaning set forth in Section 4.
"Closing Date" shall have the meaning set forth in Section 4.
"Code" means the United States Bankruptcy Code, 11 U.S.C.
Sec.101 et seq., as amended.
"Commitment" means that certain Commitment Letter dated February 4, 2000
(as amended February 18, 2000), between FFCA and Debtor with respect to the
transactions contemplated by this Agreement, and any amendments or supplements
thereto.
"Corporate Fixed Charge Coverage Ratio" has the meaning set
forth in Section 7.L.
"Counsel" means legal counsel to Debtor, licensed in the
state(s) in which (i) the Equipment is located, (ii) Debtor is
incorporated or formed and (iii) Debtor resides or maintains its
chief executive offices, as selected by Debtor, and approved by FFCA.
"Debt" has the meaning set forth in Section 7.L.
"Debtor Entities" means, collectively, Debtor and any Affiliate
of Debtor.
"Depreciation and Amortization" has the meaning set forth in
Section 7.L.
"Disclosures" has the meaning set forth in Section 13.P.
"Early Termination Lease" or "Early Termination Leases" have no
meanings set for in Section 6.M.
"Equipment" means the furniture, equipment, trade fixtures,
appliances and other personal property defined in the Equipment
Security Agreement as the "Collateral."
"Equipment Loan" means the equipment loan to be made by FFCA to
Debtor with respect to the Equipment at the Premises in the Equipment Loan
Amount.
"Equipment Loan Amount" means $9,375,000.00.
"Equipment Note" means the equipment promissory note dated as of the date
of this Agreement in the Equipment Loan Amount to be executed by Debtor in favor
of FFCA, as the same may be amended from time to time.
"Equipment Security Agreement" means the equipment security
agreement dated as of the date of this Agreement to be executed by
Debtor for the benefit of FFCA with respect to the Equipment, as the
same may be amended from time to time.
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<PAGE> 156
"Escrow Agent" means Lawyers Title Insurance Corporation, a Virginia
corporation.
"Event of Default" has the meaning set forth in Section 10.
"Fee" means an underwriting, equipment assessment, valuation,
processing and commitment fee equal to 1% of the sum of the Equipment
Loan Amount, which Fee shall be payable as set forth in Section 3.
"FFCA Entities" means, collectively, FFCA, Franchise Finance and
any Affiliate of FFCA or Franchise Finance.
"Franchise Finance" means Franchise Finance Corporation of
America, a Delaware corporation, and its successors.
"GAAP" means generally accepted accounting principles
consistently applied.
"Governmental Authority" means any governmental authority,
agency, department, commission, bureau, board, instrumentality, court
or quasi-governmental authority of the United States, the state where the
Equipment is located or any political subdivision thereof.
"Indemnified Parties" has the meaning set forth in Section 12.
"Interest Expense" has the meaning set forth in Section 7.L.
"Lease Estoppel Certificate and Consent" has the meaning set
forth in Section 9.I.
"Loan Documents" means, collectively, this Agreement, the
Equipment Note, the Equipment Security Agreement, the UCC-1 Financing
Statements, the Additional Collateral Mortgage and all other
documents executed in connection therewith or contemplated thereby.
"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of loans
that are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"Lost Note" has the meaning set forth in Section 7.H.
"Master Lease" means the lease dated as of the date of this Agreement
between Debtor, as lessee, and Master Lessor, as lessor, with respect to the
Premises specified therein, as the same may be amended from time to time.
"Master Lessor" means Uni Realty of Luzerne, L.P., a Delaware limited
partnership.
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<PAGE> 157
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition, worth or operations of Debtor, any or all of the Premises
or the Equipment, including, without limitation, the operation of any of the
Premises as a Uni-Mart Facility and/or the value of any or all of the Premises
or Equipment, or (ii) Debtor's ability to perform the obligations under the Loan
Documents.
"Mortgage" or "Mortgages" has, as the context may require, the meanings
set forth in the Mortgage Loan Agreement.
"Mortgage Loan Agreement" means the loan agreement dated as of the date of
this Agreement between Master Lessor and FFCA with respect to mortgage loans to
be made by FFCA to Master Lessor, as the same may be amended from time to time.
"Mortgage Loan Documents" means the "Loan Documents" as defined in the
Mortgage Loan Agreement.
"Net Income" has the meaning set forth in Section 7.L.
"Other Agreements" means, collectively, all agreements and
instruments between, among or by (1) any of the Debtor Entities, and,
or for the benefit of, (2) any of the FFCA Entities, including,
without limitation, promissory notes and guaranties; provided,
however, the term "Other Agreements" shall not include the agreements
and instruments defined as the Loan Documents.
"Participation" means one or more grants by FFCA or any of the other FFCA
Entities to a third party of a participating interest in notes evidencing
obligations to repay secured or unsecured loans owned by FFCA or any of the
other FFCA Entities or any or all servicing rights with respect thereto.
"Paydown Amount" means $125,000.00, plus any prepayment amount payable on
such amount pursuant to the Equipment Note.
"Permitted Exceptions" means those recorded easements,
restrictions, liens and encumbrances set forth as exceptions in the
title insurance policies issued by Lawyers Title Insurance Company to
FFCA and approved by FFCA in connection with the Additional
Collateral Mortgage.
"Permitted Lien(s)" shall mean the right and interest of third party
lessors of certain Equipment incidental to the operation of each Uni Mart
Facility, including by way of example and without limitation, the right and
interest of the lessors of various coffee equipment, video security equipment,
certain gas dispensers and Slushy machines.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
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<PAGE> 158
"Premises" means the parcels of real estate described in Exhibit A
attached hereto, all rights, privileges and appurtenances associated therewith,
and all buildings, fixtures and other improvements now or hereafter located
thereon (whether or not affixed to such real estate). As used herein, the term
"Premises" shall mean either a singular property or all of the properties
collectively, as the context may require.
"Premises Lease" and "Premises Leases" means, as the context may require,
the Master Lease or any other lease between Debtor, as lessee, and any Premises
Lessor, as lessor, with respect to a Premises, or the Master Lease and all other
leases between Debtor, as lessee, and Premises Lessors with respect to all of
the Premises, as the same may be amended from time to time.
"Premises Lessor" and "Premises Lessors" means, as the context may
require, a lessor under a Premises Lease, or all of the lessors under all of the
Premises Leases.
"Release Amount" means an amount equal to the lesser of $500,000 or the
fair market value of the Additional Collateral at the time of the release, plus
any prepayment amount payable on such amount pursuant to the Equipment Note.
"Securitization" means one or more sales, dispositions,
transfers or assignments by FFCA or any of the other FFCA Entities to
a special purpose corporation, trust or other entity identified by
FFCA or any of the other FFCA Entities of notes evidencing
obligations to repay secured or unsecured loans owned by FFCA or any of
the other FFCA Entities (and, to the extent applicable,
the subsequent sale, transfer or assignment of such notes to another
special purpose corporation, trust or other entity identified by FFCA or any
of the other FFCA Entities), and the issuance of bonds, certificates, notes
or other instruments evidencing interests in pools of such loans, whether in
connection with a permanent asset securitization or a sale of loans in
anticipation of a permanent asset securitization. Each Securitization shall be
undertaken in accordance with all requirements which may be imposed by the
investors or the rating agencies involved in each such sale, disposition,
transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations, including, without limitation, laws relating to
FFCA's status as a real estate investment trust.
"Substitute Documents" has the meaning set forth in Section 13.
"Substitute Equipment" means equipment, trade fixtures,
furniture, furnishings and appliances owned by Debtor, located at a
Substitute Premises and substituted for Equipment in accordance with
the requirements of Section 13.
"Substitute Premises" means one or more parcels of real property
substituted for a Premises in accordance with the requirements of
Section 13 of the Mortgage Loan Agreement, together with all rights,
privileges and appurtenances associated therewith, and all buildings,
fixtures and other improvements located thereon (whether or not
affixed to such real estate). Where two or more parcels of real
property comprise a Substitute Premises, such parcels shall be
aggregated and deemed to constitute such Substitute Premises for all
purposes of this Agreement.
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<PAGE> 159
"Third Party Leases" means any leases of the Premises which are not
inconsistent with the operations of a Uni-Mart Facility on the Premises.
"Transfer" means one or more sales, transfers or assignments by FFCA or any
of the other FFCA Entities to a third party of notes evidencing obligations to
repay secured or unsecured loans owned by FFCA or any of the other FFCA Entities
or any or all servicing rights with respect thereto.
"Uni-Mart Facility" means a Uni-Mart or Orloski convenience store with or
without a gasoline station, as noted on Exhibit A, and with such other ancillary
uses permitted by the Third Party Leases that are not inconsistent with the
operations of such facilities.
"UCC-1 Financing Statements" means such UCC-1 Financing
Statements as FFCA shall require to be executed and delivered by
Debtor with respect to the
Equipment.
2. TRANSACTION. On the terms and subject to the conditions set forth
in the Loan Documents, FFCA shall make the Equipment Loan to Debtor to provide
financing for the Equipment. The Equipment Loan will be evidenced by the
Equipment Note and secured by the Equipment Security Agreement and the UCC-1
Financing Statements. Debtor shall repay the outstanding principal amount of
the Equipment Loan together with interest thereon in the manner and in
accordance with the terms and conditions of the Equipment Note and the other
Loan Documents. The Equipment Loan shall be advanced at the Closing in cash or
otherwise immediately available funds subject to any prorations and adjustments
required by this Agreement.
3. UNDERWRITING, VALUATION, PROCESSING AND COMMITMENT FEE. Debtor paid
FFCA a portion of the Fee pursuant to the Commitment, and such portion was
deemed fully earned when received. The remainder of the Fee shall be paid at
the Closing and shall be deemed nonrefundable and fully earned upon the Closing.
The Fee constitutes FFCA's underwriting, valuation, processing and commitment
fee. The portion of the Fee paid and the balance due at Closing shall be
adjusted down (and paid, returned or credited as appropriate) to reflect a Fee
equal to 1% of the actual Equipment Loan Amount. In the event the transaction
set forth in this Agreement fails to close due to a breach or default by Debtor
under this Agreement, FFCA shall retain the portion of the Fee received by FFCA
(without affecting or limiting FFCA's remedies set forth in this Agreement).
4. CLOSING DATE. (a) The Equipment Loan shall be closed (the
"Closing") contemporaneously with the satisfaction of all of the
terms and conditions contained in this Agreement, but in no event
shall the date of the Closing be extended beyond April 20, 2000
unless such extension shall be approved by FFCA in its sole
discretion (the date on which the Closing shall occur is referred to
herein as the "Closing Date").
b) Debtor and FFCA hereby engage Escrow Agent to act as escrow agent in
connection with the transactions described in this Agreement. Prior to the
Closing Date, the parties hereto shall deposit with Escrow Agent all documents
and moneys necessary to comply with their obligations under this Agreement. All
costs of such transaction shall be borne by Debtor, including, without
limitation, UCC search and litigation search charges, the reasonable attorneys'
fees of Debtor,
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<PAGE> 160
attorneys' fees and expenses of FFCA, FFCA's in-house equipment inspection costs
and fees, stamp taxes, transfer fees, and escrow, filing and recording fees.
All personal property and other applicable taxes and assessments and other
charges relating to the Equipment which are due and payable on or prior to the
Closing Date shall be paid by Debtor at or prior to the Closing. The Closing
documents shall be dated as of the Closing Date.
Escrow Agent shall not cause the transaction to close unless and until it
has received written instructions from FFCA and Debtor to do so. Debtor and
FFCA will deliver to Escrow Agent all documents, pay to Escrow Agent all sums
and do or cause to be done all other things necessary or required by this
Agreement to enable Escrow Agent to comply herewith. Escrow Agent is authorized
to pay, from any funds held by it for FFCA's or Debtor's respective credit all
amounts necessary to procure the delivery of such documents and to pay, on
behalf of FFCA and Debtor, all charges and obligations payable by them,
respectively. Debtor will pay all charges payable by it to Escrow Agent.
Escrow Agent is authorized, in the event any conflicting demand is made upon it
concerning these instructions or the escrow, at its election, to hold any
documents and/or funds deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of Debtor and FFCA or to
interplead such documents and/or funds in an action brought in any such court.
Deposit by Escrow Agent of such documents and funds, after deducting therefrom
its charges and its expenses and attorneys' fees incurred in connection with any
such court action, shall relieve Escrow Agent of all further liability and
responsibility for such documents and funds. Escrow Agent's receipt of this
Agreement and opening of an escrow pursuant to this Agreement shall be deemed to
constitute conclusive evidence of Escrow Agent's agreement to be bound by the
terms and conditions of this Agreement pertaining to Escrow Agent. Disbursement
of any funds shall be made by wire transfer, as directed by FFCA and Debtor.
Escrow Agent shall be under no obligation to disburse any funds represented by
check or draft, and no check or draft shall be payment to Escrow Agent in
compliance with any of the requirements hereof, until it is advised by the bank
in which such check or draft is deposited that such check or draft has been
honored. Escrow Agent is authorized to act upon any statement furnished by the
holder or payee, or a collection agent for the holder or payee, of any lien on
or charge or assessment in connection with the Equipment, concerning the amount
of such charge or assessment or the amount secured by such lien, without
liability or responsibility for the accuracy of such statement.
5. REPRESENTATIONS AND WARRANTIES OF FFCA. The representations and
warranties of FFCA contained in this Section are being made by FFCA as of the
date of this Agreement and the Closing Date to induce Debtor to enter into this
Agreement and consummate the transactions contemplated herein, and Debtor has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. FFCA represents and
warrants to Debtor as follows:
A. Organization of FFCA. FFCA has been duly formed, is validly
existing and has taken all necessary action to authorize the execution,
delivery and performance by FFCA of this Agreement.
B. Authority of FFCA. The person who has executed this Agreement
on behalf of FFCA is duly authorized so to do.
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C. Enforceability. Upon execution by FFCA, this
Agreement shall constitute the legal, valid and binding obligation of FFCA,
Enforceable against FFCA in accordance with its terms.
All representations and warranties of FFCA made in this
Agreement shall survive the Closing.
6. REPRESENTATIONS AND WARRANTIES OF DEBTOR. The representations and
warranties of Debtor contained in this Section are being made by Debtor as of
the date of this Agreement and the Closing Date to induce FFCA to enter into
this Agreement and consummate the transactions contemplated herein, and FFCA has
relied, and will continue to rely, upon such representations and warranties from
and after the execution of this Agreement and the Closing. Debtor represents
and warrants to FFCA as follows:
A. Information and Financial Statements. Debtor has delivered
to FFCA financial statements (either audited financial statements
or, if Debtor does not have audited financial statements,
certified financial statements) and certain other information
concerning itself, which financial statements and other
information are true, correct and complete in all material
respects; and no material adverse change has occurred with
respect to any such financial statements and other
information provided to FFCA since the date such financial
statements and other information were prepared delivered to
FFCA. Debtor understands that FFCA is relying upon such
financial statements and information and Debtor represents that
such reliance is reasonable. All such financial statements were
prepared in accordance with GAAP and accurately reflect as of
the date of this Agreement and the Closing Date, the financial
condition of each individual or entity to which they pertain.
B. Organization and Authority. (1) Debtor is duly organized or
formed, validly existing and in good standing under the laws of its state
of incorporation or formation, and qualified as a foreign corporation,
partnership or limited liability company, as applicable, to do
business in any jurisdiction where such qualification is
required. All necessary corporate, partnership or limited
liability company action has been taken tauthorize the
execution, delivery and performance of this Agreement and the
other Loan Documents.
(2) The person(s) who have executed this Agreement on behalf of
Debtor are duly authorized so to do.
C. Enforceability of Documents. Upon execution by
Debtor, this Agreement and the other Loan Documents shall
constitute the legal, valid and binding obligations of Debtor,
enforceable against Debtor in accordance with their respective
terms.
D. Litigation. There are no suits, actions, proceedings
or investigations pending or threatened against or involving
Debtor, the Premises or the Equipment before any arbitrator or
Governmental Authority which might reasonably result in any Material
Adverse Effect.
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E. Absence of Breaches or Defaults. Debtor is not, and
the authorization, execution, delivery and performance of this Agreement
and the other Loan Documents will not result, in any breach or
default under any other document, instrument or agreement to
which Debtor is a party or by which Debtor, the Premises, the Equipment or
any of the property of Debtor is subject or bound. The authorization,
execution, delivery and performance of this Agreement and the other Loan
Documents will not violate any applicable law, statute, regulation, rule,
ordinance, code, rule or order.
F. Intended Use; Compliance With Laws. Debtor intends to use the
Equipment solely in connection with the operation of a Uni-Mart Facility,
and for no other purposes. Such intended use will not violate any zoning
or other governmental requirement applicable to the Equipment.
The Equipment complies with all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders and approvals of
each Governmental Authority having jurisdiction over the Equipment,
including, without limitation, all health, building, fire, safety and other
codes, ordinances and requirements, all applicable standards of
the National Board of Fire Underwriters and the Americans With
Disabilities Act of 1990 and all policies or rules of common law, in each
case, as amended, and any judicial or administrative interpretation
thereof, including any judicial order, consent, decree or judgment
applicable to Debtor, except where such noncompliance will not have a
Material Adverse Effect.
G. Licenses and Permits. Debtor has all required
licenses and permits, both governmental and private, to use and
operate the Equipment in the intended manner, except to the extent the
failure to have such licenses and permits will not have a Material Adverse
Effect.
H. Condition of Equipment. The Equipment is of good workmanship
and materials, fully operational and in good condition and repair, except
to the extent failure of the Equipment to be in such condition will
not have a Material Adverse Effect.
I. Title to Equipment; First Priority Lien. Title to the
Equipment is vested in Debtor, free and clear of all liens,
encumbrances, charges and security interests of any nature
whatsoever, except for Permitted Liens. Upon Closing, FFCA
shall have a first priority lien on and security interest in
the Equipment pursuant to the Equipment Security Agreement and
UCC-1 Financing Statements.
J. No Other Agreements and Options. Neither Debtor nor
the Equipment are subject to any commitment, obligation, or agreement,
including, without limitation, any right of first refusal, option to
purchase or lease granted to a third party, which could or would prevent
or hinder FFCA in making the Equipment Loan or exercising any of its rights
or remedies under the Loan Documents or prevent or hinder Debtor from
fulfilling its obligations under this Agreement or the other Loan
Documents, except for Permitted Liens.
K. No Reliance. Debtor acknowledges that FFCA did not prepare or
Assist in the preparation of any of the projected financial information
used by Debtor in analyzing the economic viability and feasibility of the
transaction contemplated by this Agreement. Furthermore, Debtor
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acknowledges that it has not relied upon, nor may it hereafter rely upon,
the analysis undertaken by FFCA in determining the Equipment
Loan Amount, and such analysis will not be made available to
Debtor.
L. Mechanics Liens. There are no outstanding accounts
Payable which if not paid timely would have a Material Adverse Effect,
nor are there any mechanics' liens, or rights to claim a mechanics'
lien in favor of any materialman, laborer, or any other person or entity in
connection with labor or materials furnished to or performed on any portion
of the Equipment and no work has been performed or is in progress nor
have materials been supplied to the Premises or agreements
entered into for work to be performed or materials to be
supplied to the Premises prior to the date hereof, which will
not have been fully paid for on or before the Closing Date or
which might provide the basis for the filing of such liens
against the Equipment or any portion thereof, the existence,
nonpayment or filing of which would have a Material Adverse Effect; and
Debtor shall and does hereby agree to defend, indemnify and forever hold
FFCA and FFCA's designees harmless from and against any and all such
mechanics' lien claims, accounts payable or other commitments
relating to the Equipment.
M. Premises Leases. Debtor has delivered to FFCA a certified true,
correct and complete copy of each of the Premises Leases and the
Additional Collateral Lease. The Premises Leases have not been
modified, amended, supplemented or otherwise revised. Except
for the Premises Leases set forth on Exhibit B, (each, an "Early
Termination Lease" and collectively, the "Early Termination
Leases"), each Premises Lease has a remaining term which will
not expire before the scheduled maturity date of the Equipment
Note. The Premises Leases are the only leases or agreements
between Premises Lessors and Debtor with respect to the
Premises. The Premises Leases and the Additional Collateral
Lease are in full force and effect and constitute the legal,
valid and binding obligations of Debtor, enforceable against
Debtor in accordance with their terms. Debtor has not assigned,
transferred, mortgaged, hypothecated or otherwise encumbered the
Premises Leases, the Additional Collateral Lease or any interest
therein, and Debtor has not received any notice that any of
Premises Lessors or the lessor under the Additional Collateral
Lease have made any assignment, pledge or hypothecation of all
or any part of their interests in the Premises Leases or
Additional Collateral Lease. Debtor has not received any notice
of default from Premises Lessors or the lessor under the
Additional Collateral Lease which has not been cured or given
any notice of default to Premises Lessors or the lessor under
the Additional Collateral Lease which has not been cured. No
event has occurred and no condition exists which, with the
giving of notice or the lapse of time or both, would constitute
a default by Premises Lessors or the lessor under the Additional
Collateral Lease or Debtor under any of the Premises Leases or
the Additional Collateral Lease.
All representations and warranties of Debtor made in this
Agreement shall be and will remain true and complete as of and
subsequent to the Closing Date as if made and restated in full as of
such time and shall survive the Closing.
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7. COVENANTS. Debtor covenants to FFCA from and after the
Closing Date as
follows:
A. Inspections. Debtor shall, at all reasonable times,
(i) provide FFCA and FFCA's officers, employees, agents,
advisors, attorneys, accountants, architects, and engineers with
access to the Premises and the Equipment, all drawings, plans,
and specifications for the Premises and the Equipment in
possession of Debtor, all engineering reports relating to the
Premises and the Equipment in the possession of Debtor, the
files and correspondence relating to the Premises and the
Equipment, and the financial books and records, including lists
of delinquencies, relating to the ownership, operation, and
maintenance of the Premises and the Equipment, and (ii) allow
such persons to make such inspections, tests, copies, and
verifications as FFCA considers necessary without unreasonably
interrupting Debtor's business (to the extent reasonably
possible) and upon reasonable advance notice.
B. Removal of Equipment. Except for purposes of
replacement with like property of equal or greater value and
repair in the ordinary course of business, Debtor shall not remove or
allow to be removed from the Premises the Equipment, or any part thereof,
without the prior written consent of FFCA. Debtor shall promptly give
written notice to FFCA of any substantial change in the
character of the business conducted on the Premises and of the
cessation of all or any part thereof and of any loss or damage
by fire or other casualty to any substantial part of the
Equipment.
C. No Additional Encumbrances; Perfected Security
Interest. Except as expressly provided in Section 7.B above,
Debtor shall remain the owner of the Equipment (whether acquired
prior to or after the date hereof) free from any lien, security
interest or encumbrance except those in favor of FFCA, and
Debtor shall not execute or permit the filing of any other such
financing statement thereon other than the UCC-1 Financing
Statements. Debtor shall defend the Equipment against all
claims and demands of all persons. Debtor shall not permit any
action to be taken which would adversely affect the value of the
Equipment or which would encumber, dilute or cloud Debtor's
title or interest therein. FFCA at all times shall have a
perfected security interest in the Equipment that shall be prior
to any other interests therein. Debtor shall do all acts and
things, shall execute and file all instruments (including
security agreements, UCC financing statements, continuation
statements, etc.) requested by FFCA to establish, maintain and
continue the perfected security interest of FFCA in the
Equipment, and shall promptly on demand pay all costs and
expenses of (a) filing and recording, including the costs of any
searches deemed necessary by FFCA from time to time to establish
and determine the validity and the continuing priority of the
security interest of FFCA, and (b) all other claims and charges
that in the opinion of FFCA might prejudice, imperil or
otherwise affect the Equipment or security interest therein of
FFCA. Debtor agrees that a carbon, photographic or other
reproduction of a security agreement or financing statement
shall be sufficient as a financing statement. FFCA is hereby
irrevocably appointed Debtor's attorney-in-fact to take any of
the foregoing actions requested of Debtor by FFCA if Debtor
should fail to take such actions, which appointment shall be
deemed coupled with an interest.
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D. Maintenance and Repair. Debtor shall at all times
keep and maintain the Equipment in good order, repair and
condition and will promptly replace any part thereof that from
time to time may become obsolete, badly worn or in a state of
disrepair or, if supplies, be consumed in the normal course of
Debtor's business operations. FFCA shall have a lien on and
security interest in all replacements and all replacements shall
be free of any other lien, security interest or encumbrance of
any nature, including any purchase money lien or security
interest. Debtor shall not transfer or permit any transfer of
any part of the Equipment to be made or any interest therein to
be created by way of a sale (except as permitted below), by way
of a grant of a security interest, or by way of a levy or other
judicial process. In addition thereto, Debtor may dispose of
Equipment which becomes obsolete without notice to FFCA provided
such disposition is in the ordinary course of its business and
consistent with its past practices, the fair market value of
such Equipment at the time of disposition does not exceed
$10,000 per Premises and such disposition does not otherwise
operate to diminish the security of FFCA in any material
fashion.
E. Notices. Debtor shall promptly notify FFCA of any
levy, distraint or other seizure by legal process or otherwise
of any part of the Equipment and of any threatened or filed
claims or proceedings that might in any way affect or impair any
of the Equipment.
F. Insurance. Debtor shall obtain and maintain in force
insurance policies, naming FFCA as sole loss payee and as
additional insured, covering losses or damage to the Equipment
due to fire (with extended coverage), theft, physical damage and
other such risks at its full replacement cost from time to time;
provided however, with respect to theft, vandalism and malicious
mischief coverage, Debtor may elect to self-insure such items,
provided that Debtor shall at all times provide the remaining
coverages set forth in this Section 7.F with third party
insurers complying with the provisions of this Section 7.F.
FFCA is hereby irrevocably appointed Debtor's attorney-in-fact
to endorse any check or draft that may be payable to Debtor,
alone or jointly with other payees, so that FFCA may collect the
proceeds payable for any loss under such insurance, which
appointment shall be deemed coupled with an interest. The
proceeds of such insurance, less any costs and expenses incurred
or paid by FFCA in the collection thereof, shall be applied
toward the cost of repair or replacement of the items damaged or
destroyed if an Event of Default does not exist at the time of
such damage or destruction or if an Event of Default does exist
then, at the option of FFCA, on account of any sums secured by
the Equipment Security Agreement, whether or not then due or
payable. As an alternative to maintaining all of the insurance
required under this section with third party insurers, Debtor
may elect to self-insure for a portion of the required coverages
pursuant to a self-insurance program, provided that (i) the
total amount of self-insurance provided by Debtor with respect
to each policy of insurance required to be maintained by Debtor
hereunder shall not exceed $400,000 for each Premises, and (ii)
Debtor maintains a Net Worth (as defined hereafter) equal to at
least $20,000,000.00; provided, that Debtor shall at all times
provide the remaining portion of the coverages set forth in this
section with third party insurers complying with the provisions
of this section. The amount of all deductibles with respect to
such third party policies shall not, however, exceed in the
aggregate, when added to the amount of self-insurance, the
policy limitation on self-insurance provided in the preceding
sentence. For purposes hereof, the term "Net Worth" means the
total equity in Debtor, determined in accordance with GAAP.
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G. Actions by FFCA. (i) Debtor agrees that FFCA may, at
its option, and without any obligation to do so, pay, perform,
and discharge any and all amounts, costs, expenses and
liabilities that are the responsibility of Debtor under the Loan
Documents if Debtor fails to timely pay, perform or discharge
the same and such failure shall continue for 5 days after
Debtor's receipt of written demand from FFCA (unless in the
event of an emergency which may have a Material Adverse Effect),
and all amounts expended by FFCA in so doing or in respect of or
in connection with the Equipment shall become part of the
obligations secured by the Loan Documents and shall be
immediately due and payable by Debtor to FFCA upon demand
therefor and shall bear interest at the Default Rate (as defined
in the Equipment Note).
(ii) Debtor agrees that the Loan Documents shall remain in
full effect, without waiver or surrender of any of FFCA's rights
thereunder, notwithstanding any one or more of the following:
(1) Extension of the time of payment of the whole or
any part of the Equipment Note;
(2) Any change in the terms and conditions of the
Equipment Note;
(3) Substitution of any other evidence of indebtedness
for the Equipment Note;
(4) Acceptance by FFCA of any collateral or security
of any kind for the payment of the Equipment Note;
(5) Surrender, release, exchange or alteration of any
Equipment, collateral or other security, either in whole or
in part; or
(6) Release, settlement, discharge, compromise, change
or amendment, in whole or in part, of any claim of FFCA
against Debtor or of any claim against any guarantor or
other party secondarily or additionally liable for the
payment of the Equipment Note.
H. Lost Note. Debtor shall, if the Equipment Note is mutilated,
destroyed, lost or stolen (a "Lost Note"), promptly deliver to
FFCA, upon receipt of an affidavit from FFCA stipulating that
the Equipment Note has been mutilated, destroyed, lost or
stolen, in substitution therefor, a new promissory note
containing the same terms and conditions as such Lost Note with
a notation thereon of the unpaid principal and accrued and
unpaid interest. Debtor shall provide fifteen (15) days' prior
notice to FFCA before making any payments to third parties in
connection with a Lost Note. Except as a result of the gross
negligence or intentional misconduct of Debtor, FFCA shall
indemnify Debtor for all reasonable costs, expenses, damages,
claims and liabilities incurred by Debtor as a result of a Lost
Note.
J. Premises Lease Modifications and Renewals. (i) None of the
Premises Leases or the Additional Collateral Lease shall be
modified, amended, terminated, cancelled or surrendered without
FFCA's prior written consent. Debtor shall timely extend all
renewal options under all Premises
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Leases and Additional Collateral Lease. Debtor shall fulfill, perform and
observe in all respects, each and every condition and covenant of Debtor
contained in the Premises Leases and Additional Collateral Lease
and give FFCA prompt notice of any claim or event of default
under any of the Premises Leases or Additional Collateral Lease
received by Debtor or given by Debtor to any Premises Lessor. IF
A PREMISES LEASE OR ADDITIONAL COLLATERAL LEASE REQUIRES DEBTOR
TO DELIVER A NOTICE TO THE PREMISES LESSOR OR THE LESSOR UNDER
THE ADDITIONAL COLLATERAL LEASE, AS APPLICABLE, EXTENDING THE
TERM OF SUCH PREMISES LEASE, AND DEBTOR FAILS TO DELIVER SUCH
NOTICE AT LEAST THIRTY DAYS BEFORE THE DATE BY WHICH THE
EXTENSION NOTICE MUST BE DELIVERED, OR IF NO SUCH DATE IS SET
FORTH IN SUCH PREMISES LEASE OR ADDITIONAL COLLATERAL LEASE, IF
DEBTOR FAILS TO DELIVER SUCH NOTICE AT LEAST THIRTY DAYS BEFORE
THE EXPIRATION OF THE THEN CURRENT TERM OF SUCH PREMISES LEASE
OR ADDITIONAL COLLATERAL LEASE, THEN, FFCA SHALL HAVE, AND IS
HEREBY GRANTED, A POWER OF ATTORNEY ON BEHALF OF DEBTOR TO
EXECUTE AND DELIVER SUCH EXTENSION NOTICE, IT BEING STIPULATED
THAT SUCH POWER OF ATTORNEY IS COUPLED WITH AN INTEREST AND
IRREVOCABLE. UPON THE REQUEST OF FFCA, DEBTOR SHALL EXECUTE ANY
DOCUMENTS OR INSTRUMENTS REASONABLY REQUIRED BY FFCA, ANY
PREMISES LESSOR OR THE LESSOR UNDER THE ADDITIONAL COLLATERAL
LEASE, AS APPLICABLE, IN ORDER TO CONFIRM THE EXISTENCE OF THE POWER
OF ATTORNEY SET FORTH IN THIS SUBSECTION (J), INCLUDING, WITHOUT
LIMITATION, SEPARATE POWERS OF ATTORNEY IN RECORDABLE FORM WITH RESPECT
TO THE MATTERS COVERED BY THIS SUBSECTION (J). FFCA SHALL FURTHER HAVE A
POWER OF ATTORNEY, IT BEING STIPULATED THAT SUCH POWER OF ATTORNEY IS
COUPLED WITH AN INTEREST AND IS IRREVOCABLE, TO EXECUTE ANY AND ALL OTHER
DOCUMENTS REQUIRED BY THIS AGREEMENT WITH RESPECT TO ALL PREMISES LEASES
AND TO PERFORM ANY AND ALL ACTS REQUIRED THEREBY, IF DEBTOR SHALL FAIL
TO DO SO WITHIN FIVE (5) DAYS AFTER DEMAND BY FFCA.
(ii) Prior to the expiration or termination date of
each of the Early Termination Leases, (each, an "Expiration
Date"), Debtor shall cause the lease term of each Early
Termination Lease to be extended pursuant to an agreement in
form and substance reasonably satisfactory to FFCA so that the
schedule expiration or termination date of each such Early
Termination Lease is subsequent to the schedule maturity date of
the Equipment Note ("the Extensions"). If Debtor, in the
exercise of good faith efforts, is unable to obtain any of the
Extensions, Debtor shall notify FFCA, at least 60 days prior to
the Expiration Date, that Debtor will pay to FFCA the Paydown
Amount with respect to the Early Termination Lease for which
Debtor has been unable to obtain an Extension. Debtor shall pay
the Paydown Amount to FFCA on or before the scheduled Expiration
Date of the applicable Early Termination Lease. If, prior to an
Expiration Date, Debtor does not obtain the Extension or pay the
Paydown Amount an Event of Default shall be deemed
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to have occurred under this Agreement and the other Loan Documents and FFCA
shall be entitled to exercise all rights and remedies contemplated by this
Agreement and the other Loan Documents. The Paydown Amount
shall be deemed a payment of principal and any required
prepayment amount and shall be applied in accordance with the
terms of the Equipment Note. Upon payment of the Paydown
Amount, FFCA shall release the applicable Equipment to the
Premises subject to the Early Termination Lease from the
security interest created by the Equipment Security Agreement.
K. Financial Statements. Within 45 days after the end of
each fiscal quarter and within 120 days after the end of each
fiscal year of Debtor, Debtor shall deliver to FFCA (i) complete
financial statements of Debtor including a balance sheet, profit
and loss statement, statement of cash flows and all other
related schedules for the fiscal period then ended; (ii) income
statements for the business at the Premises; and (iii) such
other financial information as FFCA may reasonably request in
order to establish the compliance of Debtor with the financial
covenants in the Loan Documents. All such financial statements
shall be prepared in accordance with GAAP and shall be certified
to be accurate and complete by Debtor (or the Treasurer or other
appropriate officer of Debtor). Debtor understands that FFCA is
relying upon such financial statements and Debtor represents
that such reliance is reasonable. In the event that Debtor's
property and business at the Premises is ordinarily consolidated
with other business for financial statement purposes, such
financial statements shall be prepared on a consolidated basis
showing separately the sales, profits and losses, assets and
liabilities pertaining to the Premises with the basis for
allocation of overhead of other charges being clearly set forth.
The financial statements delivered to FFCA need not be audited,
but Debtor shall deliver to FFCA copies of any audited financial
statements of Debtor which may be prepared, as soon as they are
available.
L. Corporate Fixed Charge Coverage Ratio. Until such
time as all of Debtor's obligations under the Note and the other
Loan Documents are paid, satisfied and discharged in full,
Debtor shall maintain a Corporate Fixed Charge Coverage Ratio of
at least 1.15:1, as determined on each the last day of each
fiscal year of Debtor. For purposes of this Section, the term
"Corporate Fixed Charge Coverage Ratio" shall mean with respect
to the twelve month period of time immediately preceding the
date of determination, the ratio calculated for such period of
time, each as determined in accordance with GAAP, of (a) the sum
of Net Income, Depreciation and Amortization, Interest Expense
and Operating Lease Expense, minus income taxes or charges
equivalent to income taxes allocable to the period of
determination, to (b) the sum of Operating Lease Expense,
scheduled principal payments of long term Debt, scheduled
maturities of all Capital Leases and Interest Expense (excluding
non-cash interest expense and amortization of non-cash financing
expenses).
For purposes of this Section, the following terms shall be
defined as set forth below:
"Capital Lease" shall mean all leases of any property,
whether real, personal or mixed, by Debtor or any of the other
Debtor Entities, as applicable, which lease would, in conformity
with GAAP, be required to be accounted for as a capital lease on
the balance sheet of Debtor. The term "Capital Lease" shall not
include any operating lease.
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"Debt" shall mean with respect to Debtor and the other
Debtor Entities, collectively, and for the period of
determination (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, indentures, notes or similar
instruments, (iii) obligations to pay the deferred purchase
price of property or services, (iv) obligations under leases
which should be, in accordance with GAAP, recorded as Capital
Leases, and (v) obligations under direct or indirect guarantees
in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor
against loss in respect of, indebtedness or obligations of
others of the kinds referred to in clauses (i) through (iv)
above.
"Depreciation and Amortization" shall mean the depreciation
and amortization accruing during any period of determination
with respect to Debtor and the other Debtor Entities,
collectively, as determined in accordance with GAAP.
"Interest Expense" shall mean for any period of
determination, the sum of all interest accrued or which should
be accrued in respect of all Debt of Debtor and the other Debtor
Entities, collectively, as determined in accordance with GAAP.
"Net Income" shall mean with respect to the period of
determination, the net income or net loss of Debtor and the
other Debtor Entities, collectively. In determining the amount
of Net Income, (i) adjustments shall be made for nonrecurring
gains and losses or non-cash items allocable to the period of
determination, (ii) deductions shall be made for, among other
things, Depreciation and Amortization, Interest Expense,
Operating Lease Expense and actual corporate overhead expense
allocable to the period of determination, and (iii) no
deductions shall be made for income taxes or charges equivalent
to income taxes allocable to the period of determination, as
determined in accordance with GAAP.
"Operating Lease Expense" shall mean the sum of all
payments and expenses incurred by Debtor and the other Debtor
Entities, collectively, under any operating leases during the
period of determination, including, without limitation, the
Premises Leases, as determined in accordance with GAAP.
M. Net Worth. At all times while the obligations of
Debtor to FFCA pursuant to the Loan Documents are outstanding,
Debtor shall maintain a net worth of at least $20 million, as
determined in accordance with GAAP.
8. TRANSACTION CHARACTERIZATION. This Agreement is a contract to
extend a financial accommodation (as such term is used in the Code) for the
benefit of Debtor. It is the intent of the parties hereto that the business
relationship created by this Agreement, the Equipment Note, the Equipment
Security Agreement and the other Loan Documents is solely that of creditor and
debtor and has been entered into by both parties in reliance upon the economic
and legal bargains contained in the Loan Documents. None of the agreements
contained in the Loan Documents is intended, nor shall the same be deemed or
construed, to create a partnership (either de jure or de facto) between Debtor
and FFCA, to make them joint venturers, to make Debtor an agent, legal
representative, partner, subsidiary or employee of FFCA, nor to make FFCA in any
way responsible for the debts, obligations or losses of Debtor.
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9. CONDITIONS OF CLOSING. The obligation of FFCA to
consummate the transaction contemplated by this Agreement is subject to the
fulfillment or waiver of each of the following conditions:
A. Title. Title to the Equipment shall be vested in
Debtor, free of all liens, encumbrances, restrictions,
encroachments and easements, except the liens created by the
Equipment Security Agreement and the UCC-1 Financing Statements.
Upon Closing, FFCA will obtain a valid and perfected first
priority lien upon and security interest in the Equipment.
B. Condition of Equipment. FFCA shall have inspected and
approved the Equipment, and the Equipment shall be in good
condition and repair and of good workmanship and materials, all
as determined by FFCA in its sole discretion, except where the
failure of the Equipment to be in such condition will not have a
Material Adverse Effect.
C. Compliance With Representations, Warranties and
Covenants. All obligations of Debtor under this Agreement shall
have been fully performed and complied with, and no event shall
have occurred or condition shall exist which would, upon the
Closing Date, or, upon the giving of notice and/or passage of
time, constitute a breach or default hereunder or under the Loan
Documents or any other agreement between FFCA and Debtor pertaining to
the subject matter hereof, and no event shall have occurred or
condition shall exist or information shall have been disclosed
by Debtor or discovered by FFCA which has had or would have a
Material Adverse Effect on the Premises, the Equipment, Debtor
or FFCA's willingness to consummate the transaction contemplated
by this Agreement, as determined by FFCA in its sole and
absolute discretion.
D. Proof of Insurance. Debtor shall have delivered to
FFCA copies of insurance policies, showing that all insurance
required by the Loan Documents and providing coverage and limits
satisfactory to FFCA are in full force and effect.
E. Opinion of Counsel to Debtor. Debtor shall have
caused Counsel to prepare and deliver an opinion to FFCA in form
and substance satisfactory to FFCA and its counsel.
F. Availability of Funds. FFCA presently has sufficient
funds to discharge its obligations under this Agreement. In the
event that the transaction contemplated by this Agreement does
not close on or before the Closing Date, FFCA does not warrant
that it will thereafter have sufficient funds to consummate the
transaction contemplated by this Agreement.
G. Evidence of Ownership. Debtor shall have provided
FFCA with evidence reasonably satisfactory to FFCA that the
Equipment is owned by Debtor free and clear of all liens and
encumbrances, which evidence shall include, without limitation,
certified UCC financing statement searches, and to the extent
requested by FFCA and obtainable, bills of sale executed and
delivered by the vendors of the Equipment.
H. Leases. Each of the Premises Leases and Additional
Collateral Lease shall be in full force and effect and Debtor
shall be entitled to occupy the Premises and Additional
Collateral corresponding thereto. FFCA shall have approved each
Premises Lease and Additional Collateral Lease in
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its sole discretion and Debtor shall have delivered to FFCA an estoppel
certificate and consent for each Premises Lease other than the
Master Lease from the corresponding Premises Lessor and
Additional Collateral Lease, the form and substance of which
shall be satisfactory to FFCA in its sole discretion (each, a
"Lease Estoppel Certificate and Consent").
I. Title. Fee title to the portion of the Additional
Collateral owned in fee title by Debtor shall be vested in
Debtor and the portion subject to the Additional Collateral
Lease shall be leased by Debtor, in both cases, free of all
liens, encumbrances, restrictions, encroachments and easements,
except the Permitted Exceptions and the liens created by the
Additional Collateral Mortgage. Upon Closing, FFCA will obtain
a valid and perfected first priority lien upon the Additional
Collateral.
J. Condition of Premises. FFCA shall have inspected and
approved the Additional Collateral, the Additional Collateral
shall be in good condition and repair, free from structural
defects, and of good workmanship and materials, and the
Additional Collateral shall be fully equipped and operational,
clean, orderly, sanitary, safe, well-lit, landscaped, decorated,
attractive and with a suitable layout, physical plant, traffic
pattern and location, all as determined by FFCA in its sole
discretion, except where the failure of the Additional
Collateral to be in such condition will not have a Material
Adverse Effect.
K. Evidence of Title. FFCA shall have received for the
Additional Collateral a preliminary title report and irrevocable
commitment to insure title in the amount approved by FFCA, by
means of a mortgagee's, ALTA extended coverage policy of title
insurance (or its equivalent, in the event such form is not
issued in the jurisdiction where the Premises is located) issued
by Lawyers Title Insurance Company showing good and marketable
fee and leasehold title, as applicable, in the Additional
Collateral in Debtor, committing to insure FFCA's first priority
lien upon and security interest in the Additional Collateral
subject only to Permitted Exceptions, and containing such
endorsements as FFCA may require.
L. Survey. FFCA shall have received a current ALTA
survey of the Additional Collateral, the form and substance of
which shall be satisfactory to FFCA in its sole discretion.
Debtor shall have provided FFCA with evidence satisfactory to
FFCA that the location of the Additional Collateral is not
within the 100-year flood plain or identified as a special flood
hazard area as defined by the Federal Emergency Management
Agency, or if the Additional Collateral is in such a flood plain
or special flood hazard area, Debtor shall provide FFCA with
evidence of flood insurance maintained on the Additional
Collateral in amounts and on terms and conditions satisfactory
to FFCA.
M. Environmental. At Debtor's expense, FFCA shall have
received an Environmental Policy with respect to the Additional
Collateral, as required by FFCA in its sole discretion.
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N. Zoning. Debtor shall have provided FFCA with evidence
satisfactory to FFCA that the Additional Collateral is properly
zoned for use as a Uni-Mart Facility and that such use
constitutes a legal, conforming use under applicable zoning
requirements.
O. Closing Documents. At or prior to the Closing Date,
FFCA and/or Debtor, as may be appropriate, shall execute and deliver or
cause to be executed and delivered to Escrow Agent or FFCA, as
may be appropriate, all documents required to be delivered by
this Agreement, and such other documents, payments, instruments
and certificates, as FFCA may require in form acceptable to
FFCA, including, without limitation, the following:
(1) Equipment Note;
(2) Equipment Security Agreement;
(3) Proof of Insurance;
(4) Opinion of Counsel to Debtor;
(5) Lease Estoppel Certificates and Consents;
(6) UCC-1 Financing Statements;
(7) Certification (Confession of Judgment);
(8) Explanation and Waiver of Rights Regarding Confession of
Judgment; and
(9) Additional Collateral Mortgage.
Upon fulfillment or waiver of all of the above conditions, FFCA shall deposit
funds necessary to close this transaction with the Escrow Agent and this
transaction shall close in accordance with the terms and conditions of this
Agreement.
10. DEFAULT AND REMEDIES. A. Each of the following shall be
deemed an event of default by Debtor (each, an "Event of Default"):
(1) If any representation or warranty of Debtor set forth
in any of the Loan Documents is false in any respect and such
falsity would result in a Material Adverse Effect, or if Debtor
renders any false statement or account in any material respect.
(2) If any principal, interest or other monetary sum due
under the Equipment Note, the Equipment Security Agreement or
any other Loan Document is not paid within five days after the
date when due; provided, however, notwithstanding the occurrence
of such an Event of Default, FFCA shall not be entitled to
exercise its rights and remedies set forth below unless and
until FFCA shall have given Debtor notice thereof and a period
of five days from the delivery of such notice shall have elapsed
without such Event of Default being cured.
(3) If Debtor fails to observe or perform any of the other covenants,
conditions, or obligations of this Agreement; provided, however, if any
such failure does not involve the payment of any monetary sum, is not
willful or intentional, does not place any rights or property of FFCA in
immediate jeopardy, and is within the reasonable power of Debtor to
promptly cure after receipt of notice thereof, all as determined
by FFCA in its reasonable discretion, then such failure shall
not constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and until FFCA shall have
given Debtor notice thereof and a period of 30 days
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shall have elapsed, during which period Debtor may correct or
cure such failure, upon failure of which an Event of Default
shall be deemed to have occurred hereunder without further
notice or demand of any kind being required. If such failure
cannot reasonably be cured within such 30-day period, as
determined by FFCA in its reasonable discretion, and Debtor is
diligently pursuing a cure of such failure, then Debtor shall
have a reasonable period to cure such failure beyond such 30-day
period, which shall not exceed 90 days after receiving notice of
the failure from FFCA. If Debtor shall fail to correct or cure
such failure within such 90-day period, an Event of Default
shall be deemed to have occurred hereunder without further
notice or demand of any kind being required.
(4) If Debtor becomes insolvent within the meaning of the
Code, files or notifies FFCA that it intends to file a petition
under the Code, initiates a proceeding under any similar law or
statute relating to bankruptcy, insolvency, reorganization,
winding up or adjustment of debts (collectively, an "Action"),
becomes the subject of either a petition under the Code or an
Action, or is not generally paying its debts as the same become
due or if Debtor becomes the subject of an involuntary petition
under the Code or other similar involuntary Action (in which
case Debtor shall be required to provide FFCA with immediate
notice of the commencement or filing of such involuntary
petition or Action), and any of the following shall have
occurred: (i) the involuntary petition or involuntary Action
shall not have been dismissed within 60 days of the date on
which it was filed or otherwise commenced, (ii) an order for
relief under the Code (or similar order) shall have been entered
by the court in the involuntary proceeding or involuntary
Action, or (iii) the court having jurisdiction over such
involuntary proceeding or involuntary Action (upon motion or
other request for relief by the party against whom the
involuntary petition or involuntary Action was filed or
otherwise commenced) shall not have granted FFCA full and final
relief from the automatic stay of Section 362 of the Code and
from any stay issued under Section 105 of the Code (or any
similar stays or injunctions) within 30 days of the filing or
commencement of such involuntary petition or involuntary Action
so that FFCA is thereafter free to exercise any and all of its
rights and remedies under the Loan Documents.
(5) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or
grace periods, under any other Loan Document, the Master Lease
or any of the Other Agreements.
(6) If there is a breach of the Corporate Fixed Charge
Coverage Ratio requirement.
(7) If there is a breach or default, after the passage of
any applicable notice and grace period, under any of the
Premises Leases or if any of the Premises Leases terminates or
expires prior to the scheduled maturity date of the Equipment
Note and, for any of the Early Termination Leases, Debtor has
not timely paid the Paydown Amount.
B. Upon the occurrence of an Event of Default, subject to the
limitations set forth in subsection A, FFCA may declare all or any
part of the obligations of Debtor under the Equipment Note, this Agreement and
any other Loan Document to be due and payable, and the same shall thereupon
become due and payable without any presentment, demand, protest or notice of any
kind, and Debtor hereby waives
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notice of intent to accelerate the obligations secured by the Equipment Security
Agreement and Additional Collateral Mortgage and notice of acceleration.
Thereafter, FFCA may exercise, at its option, concurrently, successively or in
any combination, all remedies available at law or in equity, including without
limitation any one or more of the remedies available under the Equipment Note,
the Equipment Security Agreement, Additional Collateral Mortgage or any other
Loan Document. Neither the acceptance of this Agreement nor its enforcement
shall prejudice or in any manner affect FFCA's right to realize upon or enforce
any other security now or hereafter held by FFCA, it being agreed that FFCA
shall be entitled to enforce this Agreement and any other security now or
hereafter held by FFCA in such order and manner as it may in its absolute
discretion determine. No remedy herein conferred upon or reserved to FFCA is
intended to be exclusive of any other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given by any
of the Loan Documents to FFCA, or to which FFCA may be otherwise entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by FFCA.
11. ASSIGNMENTS. A. FFCA may assign in whole or in part its
rights under this Agreement, including, without limitation, any Transfer,
Participation and/or Securitization. Upon any unconditional assignment of
FFCA's entire right and interest hereunder, FFCA shall automatically be
relieved, from and after the date of such assignment, of liability for the
performance of any obligation of FFCA contained herein.
B. Except as expressly provided herein, Debtor shall not, without the
prior written consent of FFCA, sell, assign, transfer, mortgage, convey,
encumber or grant any easements or other rights or interests of any kind in
the Equipment, except for Permitted Liens, any of Debtor's rights under this
Agreement or any interest in Debtor, whether voluntarily, involuntarily or by
operation of law or otherwise, including, without limitation, by merger,
consolidation, dissolution or otherwise, except, subsequent to the Closing, as
expressly permitted by the Mortgages.
12. INDEMNITY. Debtor agrees to indemnify, hold harmless and
defend FFCA and its directors, officers, shareholders, employees,
successors, assigns, agents, contractors, subcontractors, experts, licensees,
affiliates, lessees, lenders, mortgagees, trustees and invitees, as applicable
(collectively, the "Indemnified Parties"), for, from and against any and all
losses, costs, claims, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and court costs, arising as the result of
a breach of any of the representations, warranties, covenants, agreements or
obligations of Debtor set forth in this Agreement or any other Loan Document.
Without limiting the generality of the foregoing, such indemnity shall include,
without limitation, any engineering, governmental inspection and reasonable
attorneys' fees and expenses that the Indemnified Parties may incur by reason of
any representation set forth in this Agreement being false, or by reason of any
investigation or claim of any governmental agency in connection therewith.
13. SUBSTITUTION. If Master Lessor exercises its right to substitute a
Substitute Premises for a Premises pursuant to Section 13 of the Mortgage Loan
Agreement and the Equipment Loan is still outstanding, Debtor shall substitute
Substitute Equipment located at such Substitute Premises for the Equipment
located at the Premises, such substitution to occur simultaneously with the
closing of the substitution of such Substitute Premises and be otherwise on the
following conditions:
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(i) The proposed Substitute Equipment must:
(1) be suitable for use in a Uni-Mart Facility and in
good condition and repair, ordinary wear and tear excepted;
(2) be owned by and vested in Debtor, free and clear
of all liens and encumbrances; and
(3) have a fair market value no less than the greater
of the then fair market value of the Equipment to be
replaced or the fair market value of such Equipment as of
the Closing, all as reasonably determined by FFCA's in-
house inspectors and underwriters;
(ii) FFCA shall have inspected and approved the Substitute
Equipment utilizing FFCA customary inspection and underwriting
approval criteria. Debtor shall have reimbursed FFCA for all of
its costs and expenses incurred with respect to such proposed
substitution, including, without limitation, FFCA's thirdparty
and/or in-house site inspectors' costs and expenses with respect
to the proposed Substitute Equipment. Debtor shall be solely
responsible for the payment of all costs and expenses resulting
from such proposed substitution, including, without limitation,
filing charges and expenses, the cost of stamp taxes and the
attorneys' fees and expenses of counsel to Debtor and FFCA;
(iii) FFCA shall have received UCC search results indicating that
the proposed Substitute Equipment is free and clear of all liens,
security Interests and encumbrances;
(iv) Debtor shall deliver, or cause to be delivered, with
respect to Debtor and the Substitute Equipment, opinions of
Counsel in form and substance comparable to those received at
Closing (but also addressing such matters unique to the
Substitute Equipment as may be reasonably required by FFCA);
(v) no Event of Default, and no event, action or inaction
that, with the passage of time or the giving of notice, or both,
would constitute an Event of Default, shall have occurred and be
continuing under any Loan Document or any Other Agreement;
(vi) Debtor shall have executed such documents as are
comparable to the security documents executed and delivered at
Closing (but with such revisions as may be reasonably required
by FFCA to address matters unique to the Substitute Equipment)
or amendments to such documents, including, without limitation,
an Equipment Security Agreement and UCC-1 Financing Statements
(the "Substitute Documents"), to provide FFCA with a first
priority lien on and security interests in the proposed
Substitute Equipment and all other rights, remedies and benefits
with respect to the proposed Substitute Equipment which FFCA
holds in the Equipment to be replaced, all of which documents
shall be in form and substance reasonably satisfactory to FFCA;
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(vii) the representations and warranties set forth in
the Substitute Documents and Section 6 of this Agreement
applicable to the proposed Substitute Equipment shall be true
and correct in all material respects as of the date of
substitution, and Debtor shall have delivered to FFCA an
officer's certificate certifying to that effect; and
(viii) Debtor shall have delivered to FFCA certificates of insurance
showing that insurance required by the Substitute Documents is in
full force and effect.
Upon satisfaction of the foregoing conditions with respect to the
release of the Equipment located at the Premises to be replaced:
(a) the proposed Substitute Equipment shall be deemed
substituted for the Equipment to be replaced, and the proposed
Substitute Premises shall be deemed substituted for the Premises
to be replaced;
(b) the Substitute Equipment shall be referred to as
"Equipment" and included within the definition of "Equipment,"
and the Substitute Premises shall be referred to as "Premises"
and included within the definition of "Premises";
(d) the Substitute Documents shall be dated as of the date
of the substitution and shall secure the same Obligations (as
defined in the Equipment Security Agreement) as were secured by
the Equipment; and
(e) FFCA will release, or cause to be released, the lien and security
interests of the Equipment Security Agreement, UCC-1 Financing
Statements and any other Loan Documents encumbering the replaced
Equipment.
14. MISCELLANEOUS PROVISIONS.
A. Notices. All notices, consents, approvals or other
instruments required or permitted to be given by either party
pursuant to this Agreement shall be in writing and given by (i)
hand delivery, (ii) facsimile, (iii) express overnight delivery
service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a)
receipt, if hand delivered, (b) transmission, if delivered by
facsimile, (c) the next business day, if delivered by express
overnight delivery service, or (d) the third business day
following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail,
return receipt requested. Notices shall be provided to the
parties and addresses (or facsimile numbers, as applicable)
specified below:
If to Debtor: N. Gregory Petrick
Senior Vice President
Uni-Marts, Inc.
477 East Beaver Avenue
State College, PA 16801-5690
Telephone: 814-234-6000
Telecopy: 814-234-3277
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If to FFCA: Dennis L. Ruben, Esq.
Executive Vice President, General Counseland
Secretary
FFCA Funding Corporation
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (480) 585-4500
Telecopy: (480) 585-2226
B. Brokerage Commission. FFCA and Debtor represent and
warrant to each other that they have dealt with no broker,
agent, finder or other intermediary in connection with the
transactions contemplated by this Agreement. FFCA and Debtor
shall indemnify and hold each other harmless from and against
any costs, claims or expenses, including attorneys' fees,
arising out of the breach of their respective representations
and warranties contained within this Section.
C. Waiver and Amendment. No provisions of this Agreement shall be
Deemed waived or amended except by a written instrument
unambiguously setting forth the matter waived or amended and
signed by the party against which enforcement of such waiver or
amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion.
D. Captions. Captions are used throughout this Agreement for
convenience of reference only and shall not be considered in any
manner in the construction or interpretation hereof.
E. Intentionally Omitted.
F. Severability. The provisions of this Agreement shall
be deemed severable. If any part of this Agreement shall be held
unenforceable, the remainder shall remain in full force and
effect, and such unenforceable provision shall be reformed by
such court so as to give maximum legal effect to the intention
of the parties as expressed therein.
G. Construction Generally. This is an agreement between parties
who are experienced in sophisticated and complex matters similar
to the transaction contemplated by this Agreement and is entered
into by both parties in reliance upon the economic and legal
bargains contained herein and shall be interpreted and construed
in a fair and impartial manner without regard to such factors as
the party which prepared the instrument, the relative bargaining
powers of the parties or the domicile of any party. Debtor and
FFCA were each represented by legal counsel competent in
advising them of their obligations and liabilities hereunder.
H. Other Documents. Each of the parties agrees to sign such other
and further documents as may be appropriate to carry out the
intentions expressed in this Agreement.
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I. Attorneys' Fees. In the event of any judicial or other
adversarial proceeding between the parties concerning this
Agreement, the prevailing party shall be entitled to recover its
reasonable attorneys' fees and other costs in addition to any
other relief to which it may be entitled. References in this
Agreement to the attorneys' fees and/or costs of FFCA shall mean
both the fees and costs of independent outside counsel retained
by FFCA with respect to this transaction and the fees and costs
of FFCA's in-house counsel incurred in connection with this
transaction.
J. Entire Agreement. This Agreement and
the other Loan Documents, together with any other certificates,
instruments or agreements to be delivered in connection
therewith, constitute the entire agreement between the parties
with respect to the subject matter hereof, and there are no
other representations, warranties or agreements, written or
oral, between Debtor and FFCA with respect to the subject matter
of this Agreement. Notwithstanding anything in this Agreement
to the contrary, upon the execution and delivery of this
Agreement by Debtor and FFCA, the Commitment shall be null and
void and of no further force and effect and the terms and
conditions of this Agreement shall control notwithstanding that
such terms and conditions may be inconsistent with or vary from
those set forth in the Commitment.
K. Forum Selection; Jurisdiction; Venue; Choice of Law.
Debtor acknowledges that this Agreement was substantially
negotiated in the State of Arizona, the Agreement was signed by
FFCA in the State of Arizona and executed and delivered by
Debtor in the State of Arizona, all payments under the Equipment
Note will be delivered in the State of Arizona and there are
substantial contacts between the parties and the transactions
contemplated herein and the State of Arizona. For purposes of
any action or proceeding arising out of this Agreement, the
parties hereto hereby expressly submit to the jurisdiction of
all federal and state courts located in the State of Arizona and
Debtor consents that it may be served with any process or paper
by registered mail or by personal service within or without the
State of Arizona in accordance with applicable law. Furthermore,
Debtor waives and agrees not to assert in any such action, suit
or proceeding that it is not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding
is brought in an inconvenient forum or that venue of the action,
suit or proceeding is improper. It is the intent of the parties
hereto that all provisions of this Agreement shall be governed
by and construed under the laws of the State of Arizona, without
giving effect to its principles of conflicts of law. To the
extent that a court of competent jurisdiction finds Arizona law
inapplicable with respect to any provisions hereof, then, as to
those provisions only, the laws of the state where the Equipment
is located shall be deemed to apply. Nothing in this Section
shall limit or restrict the right of FFCA to commence any
proceeding in the federal or state courts located in the state
in which the Equipment is located to the extent FFCA deems such
proceeding necessary or advisable to exercise remedies available
under this Agreement or the other Loan Documents.
L. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original.
M. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of Debtor and FFCA and their respective
successors and permitted assigns, including, without limitation,
any United States trustee, any debtor in possession or any
trustee appointed from a private panel.
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<PAGE> 179
N. Survival. Except for the conditions of Closing set
forth in Section 9, which shall be satisfied or waived as of the
Closing Date, all representations, warranties, agreements,
obligations and indemnities of Debtor and FFCA set forth in this
Agreement shall survive the Closing.
O. Waiver of Jury Trial and Punitive, Consequential,
Special and Indirect Damages. DEBTOR AND FFCA HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO
A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN
ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER
OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO.
THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE
TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR AND FFCA HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES FROM THE OTHER AND ANY OF THE OTHER'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY IT AGAINST THE
OTHER OR ANY OF THE OTHER'S AFFILIATES, OFFICERS, DIRECTORS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY
DEBTOR AND FFCA OF ANY RIGHT THEY MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR
BARGAIN.
P. Transfers, Participations and Securitizations. (1) A
material inducement to FFCA's willingness to complete the
transactions contemplated by the Loan Documents is Debtor's
agreement that FFCA may, at any time, complete a Transfer,
Participation or Securitization with respect to the Equipment
Note, the Equipment Security Agreement and/or any of the other
Loan Documents, or any or all servicing rights with respect
thereto.
(2) Debtor agrees to cooperate in good faith with FFCA in
connection with any such Transfer, Participation and/or
Securitization of the Equipment Note, the Equipment Security
Agreement and/or any of the other Loan Documents, or any or all
servicing rights with respect thereto, including, without
limitation (i) providing such documents, financial and other
data, and other information and materials (the "Disclosures")
which would typically be required with respect to Debtor by a
purchaser, transferee, assignee, servicer, participant, investor
or rating agency involved with respect to such Transfer,
Participation and/or Securitization, as
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applicable; provided, however, Debtor shall not be required to
make Disclosures of any confidential information or any
information which has not previously been made public unless
required by applicable federal or state securities laws; and
(ii) amending the terms of the transactions evidenced by the
Loan Documents to the extent necessary so as to satisfy the
requirements of purchasers, transferees, assignees, servicers,
participants, investors or selected rating agencies involved in
any such Transfer, Participation and/or Securitization, so long
as such amendments would not have a material adverse effect upon
Debtor or the transactions contemplated hereunder.
(3) Debtor consents to FFCA providing the Disclosures, as
well as any other information which FFCA may now have or
hereafter acquire with respect to the Premises, the Equipment or
the financial condition of Debtor to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency
involved with respect to each Transfer, Participation and/or
Securitization, as applicable. FFCA and Debtor (and their
respective Affiliates) shall each pay their own attorneys fees
and other out-of-pocket expenses incurred in connection with the
performance of their respective obligations under this Section.
(4) Notwithstanding anything to the contrary contained in
this Agreement, the other Loan Documents or any Other
Agreements:
(a) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan or
sale/leaseback transaction which has not been the subject
of a Securitization, Participation or Transfer shall not
constitute an Event of Default or a breach or default, as
applicable, under any Loan Document or Other Agreement
which relates to a loan which has been the subject of a
ecuritization, Participation or Transfer;
(b) a breach or default, after the passage of all
applicable notice and cure or grace periods, under any Loan
Document or Other Agreement which relates to a loan which
is included in any Loan Pool shall not constitute an Event
of Default or a breach or default, as applicable, under any
Loan Document or Other Agreement which relates to a loan
which is included in any other Loan Pool;
(c) the Loan Documents corresponding to the Equipment
Note in any Loan Pool shall not secure the obligations of
any of the Debtor Entities contained in any Loan Document
or Other Agreement which does not correspond to a loan in
such Loan Pool; and (d) the Loan Documents and Other
Agreements which do not correspond to a loan in any Loan
Pool shall not secure the obligations of any of the Debtor
Entities contained in any Loan Document or Other Agreement
which does correspond to a loan in such Loan Pool.
Q. Release of Additional Collateral. Debtor upon: (i)
providing FFCA with at least 30 days prior written notice, and
(ii) payment of the Release Amount on a regularly scheduled
payment date under the Equipment
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Note, shall be entitled to obtain a release of the Additional
Collateral from the Additional Collateral Mortgage.
IN WITNESS WHEREOF, Debtor and FFCA have entered into this
Agreement as of the date first above written.
FFCA:
FFCA FUNDING CORPORATION, a
Delaware corporation
By /S/ MARK E. WOOD
Printed Name Mark E. Wood
Its Vice President
DEBTOR:
UNI-MARTS, a Delaware corporation
By /S/ N. GREGORY PETRICK
N. Gregory Petrick
Senior Vice President
POWER OF ATTORNEY
FFCA may act as attorney-in-fact or otherwise on behalf of
Debtor pursuant to Section 7.J of this Agreement. This power of
attorney is coupled with an interest, is durable and is not affected
by subsequent disability or incapacity of the principal or lapse of
time.
/S/ HARRY A. MARTIN /S/ N. GREGORY PETRICK
------------------------- --------------------------
Witness Debtor
WITNESS
In accordance with the requirements of Arizona Revised Statutes
Section 14-5506 and other applicable law, the undersigned has executed this
Agreement for the purpose of witnessing the grant of the powers of attorney by
Debtor to FFCA.
/S/ GEORGE J. CERMINARA
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