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EXHIBIT 10.6(a)
LOAN AGREEMENT
THIS LOAN
AGREEMENT (this "Agreement") is made as of May 19, 2003 (the
"Closing Date"), by and between GE CAPITAL
FRANCHISE FINANCE CORPORATION, a
Delaware corporation ("Lender"), and KONA
GRILL KANSAS CITY, INC., a Delaware
corporation ("Borrower").
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:
"ADA"
means the Americans with Disabilities Act of 1990, as such act
may
be amended from time to time.
"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.
"Anti-Money Laundering Laws" means all applicable laws, regulations
and
government guidance on the prevention and
detection of money laundering,
including 18 U.S.C. Sections 1956 and 1957,
and the BSA.
"Applicable Regulations" means 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 ADA 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 any of the
Borrower Parties.
"Borrower
Parties" means, collectively, Borrower and any guarantors of
the
Loan (including, in each case, any
predecessors-in-interest).
"BSA"
means the Bank Secrecy Act (31 U.S.C. Sections 5311 et. seq.),
and
its implementing regulations, Title 31 Part
103 of the U.S. Code of Federal
Regulations.
"Business
Day" means any day on which Lender is open for business other
than a Saturday, Sunday or a legal holiday,
ending at 5:00 P.M. Phoenix, Arizona
time.
"Change of
Control" means a change in control of any of the Borrower
Parties, including, without limitation, a
change in control resulting from
direct or indirect transfers of voting
stock or partnership, membership or other
ownership interests, whether in one or a
series of transactions. For purposes of
this definition, "control" means the
possession, directly or indirectly, of the
power to direct or cause the direction of
the management and policies of any of
the Borrower Parties, as applicable, and a
Change of Control will occur if any
of the following occur: (i) any merger or
consolidation by any of the Borrower
Parties, as applicable, with or into any
other entity; or (ii) if any "Person"
as defined in Section 3(a)(9) of the
Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), and as used
in Section 13(d) and 14(d) thereof,
including a "group" as defined in Section
13(d) of the Exchange Act, who,
subsequent to the Closing, becomes the
"beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), of
securities of any of the Borrower Parties, as
applicable, representing 50% or more of the
combined voting power of Borrower's
then outstanding securities (other than
indirectly as a result of the redemption
by any of the Borrower Parties, as
applicable, of its securities).
"Closing"
means the disbursement of the Loan Amount by Title Company as
contemplated by this Agreement.
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"Code"
means Title 11 of the United States Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"Default
Rate" has the meaning set forth in the Note.
"Entity"
means any entity that is not a natural person.
"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 the
Premises, whether or not yet discovered,
which would reasonably be expected to
or does result in any damage, loss, cost,
expense, claim, demand, order or
liability to or against any of the Borrower
Parties or Lender by any third party
(including, without limitation, any
Governmental Authority), including, without
limitation, any condition resulting from
the operation of 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" means the environmental
indemnity
agreement dated as of the date of this
Agreement executed by Borrower for the
benefit of the Indemnified Parties and such
other parties as are identified in
such agreement with respect to the
Premises, as the same may be amended from
time to time.
"Environmental Insurer" means American International Specialty
Lines
Insurance Company, or such other
environmental insurance company as Lender may
select, and its successors and assigns.
"Environmental Laws" means any present and future federal, state
and local
laws, statutes, ordinances, rules,
regulations, orders, injunctions and decrees
of Governmental Authorities and common law,
relating to Hazardous Materials
and/or the protection of human health or
the environment by reason of a Release
or a Threatened Release of Hazardous
Materials 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 pursuant
thereto, and any state or local statutes,
ordinances, rules, regulations,
orders, injunctions and decrees of
Governmental Authorities: the Comprehensive
Environmental Response, Compensation and
Liability Act, 42 U.S.C. Sections 9601
et seq.; the Emergency Planning and
Community Right-to-Know Act, 42 U.S.C.
Sections 11001 et seq.; the Hazardous
Materials Transportation Act, 49 U.S.C.
Sections 5101 et seq.; the Resource
Conservation and Recovery Act (including but
not limited to Subtitle I relating to
underground storage tank systems), 42
U.S.C. Sections 6901 et seq.; the Clean
Water Act, 33 U.S.C. Sections 1251 et
seq.; the Clean Air Act, 42 U.S.C. Sections
7401 et seq.; the Toxic Substances
Control Act, 15 U.S.C. Sections 2601 et
seq.; the Safe Drinking Water Act, 42
U.S.C. Sections 7401 et seq.; the
Occupational Safety and Health Act, 29 U.S.C.
Section 651 et seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. Sections 136 et seq.; the Endangered
Species Act, 16 U.S.C. Sections 1531
et seq. and the National Environmental
Policy Act, 42 U.S.C. Sections 4321 et
seq. "Environmental Laws" also includes,
but is not limited to, any present and
future federal, state and local laws,
statutes, ordinances, rules, regulations,
orders, injunctions and decrees of
Governmental Authorities and 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 in
connection with permits or other
authorizations required by Governmental
Authorities; relating to the handling and
disposal of Hazardous Materials;
relating to nuisance, trespass or other
causes of action related to Hazardous
Materials; 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 in, on, under or above the
Premises.
"Environmental Liens" has the
meaning set forth in Section 5.K(9).
"Environmental Policy" means the environmental insurance policy
issued by
Environmental Insurer to Lender with
respect to the Premises, which
Environmental Policy shall be in form and
substance satisfactory to Lender in
its sole discretion.
"Event of
Default" has the meaning set forth in Section 9.
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"FCCR
Amount" has the meaning set forth in Section 9.A(7).
"Fee"
means an underwriting, site assessment, valuation, processing
and
commitment fee equal to 1% of the Loan
Amount.
"Fixed
Charge Coverage Ratio" has the meaning set forth in Section
6.J.
"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 having
jurisdiction or supervisory or regulatory
authority over the Premises or any of the
Borrower Parties.
"Guaranty"
means the unconditional guaranty of payment and performance
dated as of the date of this Agreement
executed by Michael McDermott for the
benefit of Lender with respect to the
Loan.
"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 containing
dielectric fluid having levels of
polychlorinated biphenyls in excess of
applicable standards established by any
Governmental Authority, any petroleum
product or additive, any petroleum-based
substances or any similar terms
described or defined in any Environmental
Laws applicable to or regulating below
or above ground tanks and associated piping
systems used in connection with the
storage, dispensing and general use of
petroleum and petroleum-based substances,
or any Toxic Mold; (c) any substance, gas,
material or chemical which is now or
hereafter 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 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 is
reasonably likely to 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" means Lender, Environmental Insurer, the
trustees
under the Mortgage, if applicable, and any
person or entity who is or will have
been involved in the origination of the
Loan, any person or entity who is or
will have been involved in the servicing of
the Loan, any person or entity in
whose name the encumbrance created by the
Mortgage is or will have been
recorded, persons and entities who may hold
or acquire or will have held a full
or partial interest in the Loan (including,
but not limited to, investors or
prospective investors in any
Securitization, Participation or Transfer, as well
as custodians, trustees and other
fiduciaries who hold or have held a full or
partial interest in the Loan for the
benefits of third parties), as well as the
respective directors, officers,
shareholders, partners, members, employees,
lenders, agents, servants, representatives,
contractors, subcontractors,
affiliates, subsidiaries, participants,
successors and assigns of any and all of
the foregoing (including, but not limited
to, any other person or entity who
holds or acquires or will have held a
participation or other full or partial
interest in the Loan or the Premises,
whether during the term of the Loan or as
a part of or following a foreclosure of the
Loan and including, but not limited
to, any successors by merger, consolidation
or acquisition of all or a
substantial portion of Lender's assets and
business).
"Indemnity
Agreements" means all indemnity agreements executed for the
benefit of any of the Borrower Parties, any
current lessee or occupant or any
prior owner, lessee or occupant of the
Premises in connection with Hazardous
Materials, including, without limitation,
the right to receive payments under
such indemnity agreements.
"Lease
Estoppel Certificate and Consent" has the meaning set forth in
Section 4.H.
"Lender
Entities" means, collectively, Lender (including any
predecessor-in-interest to Lender) and any
Affiliate of Lender (including any
Affiliate of any predecessor-in-interest to
Lender).
"Loan"
means the loan for the Premises, described in Section 2.
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"Loan
Amount" means $993,544.00 or 50% of acceptable documented
costs,
whichever is less.
"Loan
Documents" means, collectively, this Agreement, the Note, the
Mortgage, the Environmental Indemnity
Agreement, the Subordination Agreement,
the UCC-1 Financing Statements, the
Guaranty and all other documents,
instruments and agreements executed in
connection therewith or contemplated
thereby, as the same may be amended from
time to time.
"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.
"Material
Adverse Effect" means a material adverse effect on (i) the
Premises, including, without limitation,
the operation of the Premises as a
Permitted Concept, or (ii) Borrower's
ability to perform its obligations under
the Loan Documents.
"Mortgage"
means the deed of trust or mortgage dated as of the date of
this Agreement executed by Borrower for the
benefit of Lender with respect to
the Premises.
"Note"
means the promissory note dated as of the date of this Agreement
in
the Loan Amount evidencing the Loan, 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 pursuant to
Section 9.
"Obligations" has the meaning set forth in the Mortgage.
"OFAC Laws
and Regulations" means Executive Order 13224 issued by the
President of the United States of America,
the Terrorism Sanctions Regulations
(Title 31 Part 595 of the U.S. Code of
Federal Regulations), the Terrorism List
Governments Sanctions Regulations (Title 31
Part 596 of the U.S. Code of Federal
Regulations), the Foreign Terrorist
Organizations Sanctions Regulations (Title
31 Part 597 of the U.S. Code of Federal
Regulations), and the Cuban Assets
Control Regulations (Title 31 Part 515 of
the U.S. Code of Federal Regulations),
and all other present and future federal,
state and local laws, ordinances,
regulations, policies, lists (including,
without limitation, the Specially
Designated Nationals and Blocked Persons
List) and any other requirements of any
Governmental Authority (including, without
limitation, the United States
Department of the Treasury Office of
Foreign Assets Control) addressing,
relating to, or attempting to eliminate,
terrorist acts and acts of war, each as
hereafter supplemented, amended or modified
from time to time, and the present
and future rules, regulations and guidance
documents promulgated under any of
the foregoing, or under similar laws,
ordinances, regulations, policies or
requirements of other states or
localities.
"Other
Agreements" means, collectively, all agreements and instruments
between, among or by (1) any of the
Borrower Parties and/or any Affiliate of any
of the Borrower Parties (including any
Affiliate of any predecessor-in-interest
to any of the Borrower Parties), and, or
for the benefit of, (2) any of the
Lender 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 Lender or any of the
other
Lender Entities to a third party of a
participating interest in notes evidencing
obligations to repay secured or unsecured
loans owned by Lender or any of the
other Lender Entities or any or all
servicing rights with respect thereto.
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"Permitted
Amounts" means, with respect to any given level of Hazardous
Materials, that level or quantity of
Hazardous Materials in any form or
combination of forms the presence, use,
storage, release or handling of which
does not constitute a violation of any
Environmental Laws and is customarily
employed in the ordinary course of, or
associated with, similar businesses
located in the state in which the Premises
is located.
"Permitted
Concept" means a Kona Grill restaurant or such other nationally
or regionally recognized restaurant concept
as Lender may approve, which
approval shall not be unreasonably
withheld.
"Permitted
Exceptions" means those recorded easements, restrictions, liens
and encumbrances set forth as exceptions in
the title insurance policy issued by
Title Company to Lender and approved by
Lender in its sole discretion in
connection with the closing of the
Loan.
"Permitted
Lease" means, the lease relating to the Premises and all
modifications, amendments and supplements
thereto disclosed in the Lease
Estoppel Certificate and Consent delivered
with respect thereto, and all
modifications, amendments and supplements
consented to by Lender pursuant to the
terms of the Mortgage.
"Person"
means any individual, corporation, partnership, limited
liability
company, trust, unincorporated
organization, Governmental Authority or any other
form of entity.
"Personal
Property" has the meaning set forth in the Mortgage.
"Premises"
means the parcel or parcels of real estate described 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 (whether or not
affixed to such real estate) and the
Personal Property.
"Questionnaire" means the environmental questionnaire completed on
behalf
of the Borrower Parties with respect to the
Premises and submitted to
Environmental Insurer in connection with
the issuance of the Environmental
Policy.
"Related
Premises" means those properties (other than the Premises)
which
are the subject of mortgage loans from any
of the Lender Entities to any of the
Borrower Parties.
"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.
"Remediation" means any response, remedial, removal, or corrective
action,
any activity to clean up, detoxify,
decontaminate, contain or otherwise
remediate any Hazardous Materials required
by any Environmental Law or any
Governmental Authority, 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,
including, without limitation, all acts
necessary to clean and disinfect any
portions of the Premises affected by Toxic
Mold and to eliminate the sources of Toxic
Mold in or on the Premises,
including, without limitation, providing
any necessary moisture and control
systems at the Premises.
"Restoration" has the meaning set forth in the Mortgage.
"Securitization" means one or more sales, dispositions, transfers
or
assignments by Lender or any of the other
Lender Entities to a special purpose
corporation, trust or other entity
identified by Lender or any of the other
Lender Entities of notes evidencing
obligations to repay secured or unsecured
loans owned by Lender or any of the other
Lender 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 Lender or any
of the other Lender 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
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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.
"Subordination Agreements" means the subordination agreements dated
as of
the date of this Agreement executed by
Borrower and certain shareholders of
Borrower with respect to the Subordinate
Debt.
"Subordinate Debt" means the debt of Borrower to certain
shareholders of
Borrower described in the Subordination
Agreements.
"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 Lawyers Title Insurance Corporation.
"Toxic
Mold" means any toxic mold or fungus of a type which would pose
a
risk to human health or the environment or
would negatively impact the value of
the Premises.
"Transfer" means one or more
sales, transfers or assignments by Lender or
any of the other Lender Entities to a third
party of notes evidencing
obligations to repay secured or unsecured
loans owned by Lender or any of the
other Lender Entities or any or all
servicing rights with respect thereto.
"UCC-1
Financing Statements" means such UCC-1 Financing Statements as
Lender shall file with respect to the
transactions contemplated by this
Agreement.
"U.S.
Publicly-Traded Entity" is an Entity whose securities are listed
on
a national securities exchange or quoted on
an automated quotation system in the
U.S. or a wholly-owned subsidiary of such
an Entity.
2.
TRANSACTION. On the terms and subject to the conditions set forth
in
the Loan Documents, Lender shall make the
Loan. The Loan will be evidenced by
the Note and secured by the Mortgage.
Borrower shall repay the outstanding
principal amount of the Loan together with
interest thereon in the manner and in
accordance with the terms and conditions of
the Note and the other Loan
Documents. The 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. ESCROW
AGENT. Borrower and Lender hereby employ Title Company to act
as
escrow agent in connection with the
transaction described in this Agreement.
Borrower and Lender 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 shall not cause the transaction
to close unless and until it has received
written instructions from Lender and
Borrower to do so. Title Company is
authorized to pay, from any funds held by it
for Lender's or Borrower's respective
credit all amounts necessary to procure
the delivery of such documents and to pay,
on behalf of Lender and Borrower, all
charges and obligations payable by them,
respectively. Borrower 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 Borrower and
Lender 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 check, certified check or wire
transfer, as directed by Borrower and
Lender. 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
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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.
4. CLOSING
CONDITIONS. The obligation of Lender to consummate the
transaction contemplated by this Agreement
is subject to the fulfillment or
waiver of each of the following
conditions:
A. Title
Insurance Commitments. Lender shall have received for the
Premises a preliminary title report and
irrevocable commitment to insure title
in the amount of the Loan, 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 Borrower vested with good
and marketable fee or leasehold title,
as the case may be, in the real property
comprising the Premises, committing to
insure Lender's first priority lien upon
and security interest in such real
property subject only to Permitted
Exceptions, and containing such endorsements
as Lender may require.
B. Survey.
Lender shall have received a current ALTA survey of the
Premises or its equivalent, the form and
substance of which shall be
satisfactory to Lender in its reasonable
discretion. Lender shall have obtained
a flood certificate indicating that the
location of the Premises 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 Premises is in such a
flood plain or special flood hazard area,
Borrower shall have provided Lender
with evidence of flood insurance maintained
on the Premises in an amount and on
terms and conditions reasonably
satisfactory to Lender.
C.
Environmental. Lender shall have completed such environmental
due
diligence of the Premises as it deems
necessary or advisable in its sole
discretion, including, without limitation,
receiving an Environmental Policy
with respect to the Premises, and Lender
shall have approved the environmental
condition of the Premises in its sole
discretion.
D.
Compliance With Representations, Warranties and Covenants. All of
the
representations and warranties set forth in
Section 5 shall be true, correct and
complete as of the Closing Date, and
Borrower shall be in compliance with each
of the covenants set forth in Section 6 as
of the Closing Date. No event shall
have occurred or condition shall exist or
information shall have been disclosed
by Borrower or discovered by Lender which
has had or would be reasonably likely
to have a material adverse effect on the
Premises, any of the Borrower Parties
or Lender's willingness to consummate the
transaction contemplated by this
Agreement, as determined by Lender in its
sole and absolute discretion.
E. Proof
of Insurance. Borrower shall have delivered to Lender
certificates of insurance and copies of
insurance policies showing that all
insurance required by the Loan Documents
and providing coverage and limits
satisfactory to Lender are in full force
and effect.
F. Legal
Opinions. Borrower shall have delivered to Lender such legal
opinions as Lender may reasonably require
all in form and substance reasonably
satisfactory to Lender and its counsel.
G. Fee and
Closing Costs. Borrower shall have paid the Fee to Lender and
shall have paid all costs of the
transactions described in this Agreement,
including, without limitation, the cost of
title insurance premiums and all
endorsements required by Lender, survey
charges, UCC and litigation search
charges, the attorneys' fees of Borrower,
reasonable attorneys' fees and
expenses of Lender, the cost of the
environmental due diligence undertaken
pursuant to Section 4.C, including, without
limitation, the cost of the
Environmental Policy, Lender's site
inspection costs and fees, stamp taxes,
mortgage taxes, transfer fees, escrow,
filing and recording fees and UCC filing
and recording fees (including preparation,
filing and recording fees for UCC
continuation statements). Borrower shall
have also paid 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
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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
4.A.
H.
Permitted Lease. The Permitted Lease shall be in full force and
effect
and Borrower shall be entitled to occupy
the Premises. Lender shall have
approved the Permitted Lease in its sole
discretion and Borrower shall have
delivered to Lender an estoppel certificate
and consent from the Permitted
Lessor, the form and substance of which
shall be satisfactory to Lender in its
sole discretion (the "Permitted Lease
Estoppel Certificate and Consent").
Borrower shall have provided Lender with a
recorded copy (or executed original
in recordable form) of a memorandum of
lease for the Premises. If any mortgages
or deeds of trust (or other similar
security agreements) encumber fee simple
title to the Premises, the holders of such
instruments shall have delivered
nondisturbance agreements to Borrower and
Lender with respect to the Permitted
Lease in form and substance acceptable to
Lender in its reasonable discretion.
I. Closing
Documents. At or prior to the Closing Date, Lender and/or the
Borrower Parties, as may be appropriate,
shall have executed and delivered or
shall have caused to be executed and
delivered to Lender, or as Lender may
otherwise direct, the Loan Documents and
such other documents, payments,
instruments and certificates, as Lender may
require in form acceptable to
Lender.
J.
Subordination Agreements. Borrower shall have delivered to Lender
the
Subordination Agreements which shall be in
form and substance acceptable to
lender and which shall subordinate the
Subordinate Debt to the Loan.
Upon
fulfillment or waiver of all of the above conditions, Lender
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.
5.
REPRESENTATIONS AND WARRANTIES OF BORROWER. The representations
and
warranties of Borrower contained in this
Section are being made by Borrower as
of the Closing Date to induce Lender to
enter into this Agreement and consummate
the transactions contemplated herein and
shall survive the Closing. Borrower
represents and warrants to Lender (and
Environmental Insurer solely with respect
to Section 5.K) as follows:
A.
Financial Information. Borrower has delivered to Lender certain
financial statements and other information
concerning the Borrower Parties in
connection with the transaction described
in this Agreement (collectively, the
"Financial Information"). The Financial
Information is true, correct and
complete in all material respects; there
have been no amendments to the
Financial Information since the date such
Financial Information was prepared or
delivered to Lender. Borrower understands
that Lender is relying upon the
Financial Information and Borrower
represents that such reliance is reasonable.
All financial statements included in the
Financial Information were prepared in
accordance with GAAP and fairly present as
of the date of such financial
statements the financial condition of each
individual or entity to which they
pertain. No change has occurred with
respect to the financial condition of any
of the Borrower Parties and/or the Premises
as reflected in the Financial
Information which has not been disclosed in
writing to Lender or has had, or
could reasonably be expected to result in,
a Material Adverse Effect.
B.
Organization and Authority. Each of the Borrower Parties (other
than
individuals), as applicable, is duly
organized or formed, validly existing and
in good standing under the laws of its
state of incorporation or formation.
Borrower is qualified as a foreign
corporation, partnership or limited liability
company, as applicable, to do business in
the state where the Premises is
located and each of the Borrower Parties is
qualified as a foreign corporation,
partnership or limited liability company,
as applicable, to do business in any
other jurisdiction where the failure to be
qualified would reasonably be
expected to result in a Material Adverse
Effect. All necessary action has been
taken to authorize the execution, delivery
and performance by the Borrower
Parties of this Agreement and the other
Loan Documents. The person(s) who have
executed this Agreement on behalf of
Borrower are duly authorized so to do.
Borrower is not a "foreign corporation",
"foreign partnership", "foreign trust",
"foreign estate" or "foreign person" (as
those terms are defined by the Internal
Revenue Code of 1986, as amended).
Borrower's U.S. Federal Tax Identification
number, Organization Identification number
and principal place of business are
correctly set forth on the signature page
of this Agreement. None of the
Borrower Parties, and no individual or
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entity owning directly or indirectly any
interest in any of the Borrower
Parties, is an individual or entity whose
property or interests are subject to
being blocked under any of the OFAC Laws
and Regulations or is otherwise in
violation of any of the OFAC Laws and
Regulations; provided, however, the
representation contained in this sentence
shall not apply to any Person to the
extent such Person's interest is in or
through a U.S. Publicly-Traded Entity.
C.
Enforceability of Documents. Upon execution by the Borrower
Parties,
this Agreement and the other Loan Documents
shall constitute the legal, valid
and binding obligations of the Borrower
Parties, enforceable against the
Borrower Parties in accordance with their
respective terms, except as such
enforceability may be limited by applicable
bankruptcy, insolvency, liquidation,
reorganization and other laws affecting the
rights of creditors generally and
general principles of equity.
D.
Litigation. There are no suits, actions, proceedings or
investigations
pending, or to the best of its knowledge,
threatened against or involving the
Borrower Parties or the Premises before any
arbitrator or Governmental
Authority, except for such suits, actions,
proceedings or investigations which,
individually or in the aggregate, have not
had, and would not reasonably be
expected to result in, a Material Adverse
Effect.
E. Absence
of Breaches or Defaults. The Borrower Parties 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
any of the Borrower Parties is a
party or by which any of the Borrower
Parties, the Premises or any of the
property of any of the Borrower Parties is
subject or bound, except for such
breaches or defaults which, individually or
in the aggregate, have not had, and
would not reasonably be expected to result
in, a Material Adverse Effect. 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. The
Premises is not subject to any right
of first refusal, right of first offer or
option to purchase or lease granted to
a third party.
F.
Utilities. Adequate public utilities are available at the Premises
to
permit utilization of the Premises as a
Permitted Concept and all utility
connection fees and use charges will have
been paid in full prior to
delinquency.
G. Zoning;
Compliance With Laws. The Premises is in compliance with all
applicable zoning requirements, and the use
of the Premises as a Permitted
Concept does not constitute a nonconforming
use under applicable zoning
requirements. The Borrower Parties and the
Premises are in compliance with all
Applicable Regulations except for such
noncompliance, which has not had, and
would not reasonably be expected to result
in, 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
Borrower's knowledge, are contemplated.
Neither the Premises nor, to the best of
Borrower's knowledge, the real property
bordering the Premises are designated by
any Governmental Authority as a
wetlands.
I.
Licenses and Permits; Access. All required licenses and permits,
both
governmental and private, to use and
operate the Premises as a Permitted Concept
are in full force and effect, except for
such licenses and permits the failure
of which to obtain has not had, and would
not reasonably be expected to result
in, a Material Adverse Effect. Adequate
rights of access to public roads and
ways are available to the Premises for
unrestricted ingress and egress and
otherwise to permit 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 Personal
Property,
is in good condition and repair and
well-maintained, ordinary wear and tear
excepted, fully equipped and operational,
free from structural defects, safe and
properly lighted.
K.
Environmental. Except as disclosed in the Questionnaire:
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(1) Neither the Premises nor any of the Borrower Parties are in
violation
of, or subject to, any pending or, to Borrower's actual
knowledge,
threatened investigation or inquiry by any Governmental
Authority
or to any remedial obligations under any Environmental Laws,
and
this
representation and warranty would continue to be true and
correct
following
disclosure to the applicable Governmental Authorities of all
relevant
facts, conditions and circumstances, if any, pertaining to the
Premises;
(2) All permits, licenses or similar authorizations required to
construct,
occupy, operate or use any buildings, improvements, fixtures
and equipment
forming a part of the Premises by reason of any
Environmental Laws have been obtained;
(3) No Hazardous Materials have been used, handled,
manufactured,
generated,
produced, stored, treated, processed, transferred, disposed of
or
otherwise Released in, on, under, from or about the Premises,
except in
Permitted
Amounts;
(4) The Premises does not contain Hazardous Materials, except
in
Permitted
Amounts;
(5) There is no threat of any Release migrating to the Premises
in
excess of
Permitted Amounts;
(6) There is no past or present non-compliance with
Environmental
Laws, or
with permits issued pursuant thereto, in connection with the
Premises;
(7) None of the Borrower Parties has received any written or
oral
notice or
other communication from any person or entity (including but
not
limited to
a Governmental Authority) relating to Hazardous Materials or
Remediation thereof in excess of Permitted Amounts, of possible
liability
of any
person or entity pursuant to any Environmental Law, other
environmental conditions in connection with the Premises, or any
actual or
potential
administrative or judicial proceedings in connection with any
of
the
foregoing;
(8) All information known to any of the Borrower Parties or
contained
in the files of any of the Borrower Parties relating t
