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EXHIBIT D TO FIRST AMENDED COMPLAINT
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Facilty Number: 824611SCDB65975 Customer Account Number: 0996439
LOAN AGREEMENT (am/pm Mini Market)
This LOAN AGREEMENT (this "Agreement") is made and enten:d into as of F'p. ia , 2007 by and between BP WEST COAST PRODUCTS LLC, a Delaware limited liability company (hereinafter referred to as "Lender"), and STTN
ENTERPRISE, INC., a California corporation (the "Borrower").
Recitals
A. Borrower and Lender have entered into that certain ampm Mini Market
Agreement dated July 11, 2006 (hereinafter referred to as the "CD Store Agreement") which
provides the terms and conditions under which Borrower operates or will operate an ampm Mini Market located at 631 San Felipe Road, Hollister, CA 95035 (the "Store"). The Store comprises a par of certain real propert owned by Borrower as more paricularly described in Exhibit "A"
to the Deed of Trust ("Property"). Borrower and Lender have also entered into that certain
Contract Dealer Gasoline Agreement dated July 11, 2006 which provides the terms and
conditions under which Borrower operates or will operate an ARCO gasoline station on the
Property (the "CD Agreement").
B. Lender and Borrower desire to provide for the terms and conditions upon which Lender wil make available to Borrower a loan to fud the costs associated with pre-approved
modifications and/or equipment and improvements to the Store.
Agreement
In consideration of the mutual promises contained herein, Lender and Borrower agree as
follows:
DEFINITIONS:
Additional Loan Amounts: The term Additional Loan Amounts means any Additional
Funds which may be disbursed to Borrower or for Borrower's benefit as defined and provided in Section 1.2.
Alterations: The term "Alterations" means alterations or improvements to the Store
which are permitted under ths Agreement.
Amortization Amount: The term "Amortization Amount" is defined in Section 1.5.
Annual Guaranteed Amount:
The term "Anual Guaranteed Amount" means
$960,000.00.
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Architect: The term "Architect" is defined in Section 2.l(h).
Base Loan Amount:
The term "Base Loan Amount" is defined in Section 1.1.
Business Open Date: The term "Business Open Date" means the first day on which the
Store is open for business of all material components of the gas and store offering as set fort more paricularly in the CD Agreement and the CD Store Agreement, as determined by Lender.
CD Store Agreement: The term "CD Store Agreement" is defined in Recital A above.
Closing Date: The term "Closing Date" means the date of recordation of the Deed of
Trust in the Offcial Records of the county in which the Property is located.
Conditional Commitment Letter: The letter dated May 25, 2006 from Lender to
Borrower outlining the terms and conditions upon which Lender expressed its willingness to
make the Loan to Borrower.
Contract Year: The 12 month period beginning on the first day of the first complete month following the Business Open Date and each 12 month period thereafter. If the Business Open Date occurs on the first day of a calendar month, the Contract Year shall commence on
such date.
Contractor: The term "Contractor" is defined in Section 2.1
(h).
Deed of Trust: The term "Deed of Trust" mean that certain Deed of Trust with Assignment of Rents, Security Agreement and Fixtue Filing dated as of even date herewith,
executed by Borrower in favor of Lender.
Default Rate: The term "Default Rate" shall have the meaning set fort in the Note.
Disbursement: The term "Disbursement" means a disbursement of Loan proceeds made Borrower.
by Lender to or for the benefit of
Disbursement Agreement: The term "Disbursement Agreement" means that certain Disbursement Agreement Owner and Contractor in the form of Exhibit D attached hereto and
made a par hereof, to be executed by Borrower and Lender substantially concurrently with the. recordation of the Deed of Trust.
Engineer: The term "Engineer" is derined in Section 2.l(h).
Environmental Indemnity: The term "Environmental Indemnity" means that certain
Environmental Indemnity dated as of even herewith, executed by Borrower in favor of Lender.
Event of Default: The term "Event of
Default" is defined in Section 4.
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Fictitious Deed of Trust: The term "Fictitious Deed of Trust" is defined in the Deed of
Trust.
First Anniversary Date: The term "First Anniversar Date" is defined in Section 1.5.
Gross Sales: All Store sales as included in the definition of "Gross Sales" in Aricle the CD Store Agreement.
7.02(b) of
Improvements:
Fictitious Deed of
The term "Improvements" shall have the meaning set forth in the
Trust.
Indemnified Costs: The term "Indemnfied Costs" means all actual or threatened
liabilities, claims, actions, causes of action, judgments, orders, damages (including foreseeable and unforeseeable consequential damages), costs, expenses, fines, penalties and losses (including
sums paid in settlement of claims and all consultant, expert and legal fees and expenses of Lender's counsel), but excluding such costs as may be attributable to the gross negligence or
wilful misconduct of
the pary seekig to be indemnified.
Indemnified Parties: The term "Indemnified Paries" means, collectively, Lender, its parent, subsidiary and affiiated companies, assignees of any of Lender's interest in the Loan or the Loan Documents, owners of paricipation, syndication or other interests in the Loan or the Loan Documents, any purchasers of the Propert at any foreclosure sale or from Lender or any of its affliates, and the offcers, directors, employees and agents of each of them.
Loan: The term "Loan" is defined in Section 1.1.
Loan Documents: The term "Loan Documents" means the documents described in Exhbit "C" attached hereto, as the same may be amended, renewed or extended from time to
time.
Maturity Date: The term "Matuity Date" is defined in Section 1 A.
Note: The term "Note" means that certain Secured Promissory Note (arpm Mini
Market) of even date herewith, executed by Borrower to the order of Lender, which evidences
the Loan.
Obligations: The term "Obligations" is defined in Section 1.4.
Pay Voucher: The term "Pay Voucher" shall have the meaning set fort in the
Disbursement Agreement.
Plans: The term "Plans" means detailed plans and specifications for the Alterations.
Propert: The term "Property" is defined in Recital A above.
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Facilty Number: 824611SCDB65975 Customer Account Number: 0996439
Senior Lender: Omn Financial
Senior Loan: That certain loan from Omni Financial to Borrower in the amount of $l,925,000.00
Senior Loan Documents: Those certain documents and agreements executed by
Borrower in favor of Senior Lender evidencing and securing the Sehior Loan, including that promissory note in the original principal amount of $1,625,000.00 (the "Senior Note") and that certain deed of trust dated August 12, 2003 and recorded on November 7, 2003 as instrment number 2003-0022960 in the Offce of the San Benito Recorder (the "Senior Deed of Trust"). The Senior Note and the Senior Deed of Trust are modified to include the principal amount of
number and recorded in the Offce of the San Benito Recorder.
Store: The term "Store" is defined in Recital A above.
$300,000.00 evidenced by dated as instrument
Title Company:
Company.
The term "Title Company" means Commonwealth Land Title
Title Policy: The term "Title Policy" is defined in Section 2.1 (d).
Transfer: The term "Transfer" is defined in Section 8.
Trustor: AVA Global Enterprise, Inc., a California corporation
1.
Amount and Terms of the Loan.
1.1 Amount of Loan. Lender agrees to make available to the Borrower, upon the terms and conditions set fort in this Agreement, a loan (the "Loan") in the principal amount
of$150,000.00 (the "Base Loan Amount.
1.2
Refresh & Refurbish Funds:
If as of the 11 th aniversar of the first disbursement under the Loan,
provided Borrower is not then in default under any of
the terms and conditions of
Agreements, Loan Documents, or Franchise Agreements, BPWCP may elect, in its sole and absolute discretion, but shall not be obligated to, disburse up to Seventy-Five Thousand and 00/100 Dollars ($75,000) (the "Refresh & Refubish Funds") to or on behalf of Borrower to enable Borrower to comply with Section 5.05 of the CD Store Agreement, and to be used for non-strctural changes to the Improvements, such as, updating and retrofitting the interior of the Improvements to comply with Lender's then-current visual and design standards and layout for its arpm mini markets (the "Refresh Requirements"), including, but not limited to, new paint, flooring, signage, installation of new fixtures, equipment, and the like (collectively, the "Refresh
& Refubish"). The Refresh & Refubish Funds shall be used solely to finance the cost of
the Loan
the
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Refresh & Refurbish and to otherwse comply with the Refurbish Requirements, and for no other use or purose whatsoever. If Lender elects to advance the Refresh & Refubish Funds, Lender's disbursement of the Refresh & Refurbish Funds to or on behalf of Borrower shall be conditioned upon the satisfaction, as determined by Lender in its sole discretion, that as of the date of the first disbursement of the Refresh & Refurbish Funds, the following conditions have been satisfied:
(a)
Loan Documents;
Borrower shall be in full compliance with the terms and conditions of the
CD Store Agreement and the CD Agreement;
(b) Borrower shall be in full compliance with the terms and conditions of the
management capabilities of Borrower, determined that the net cash flow from the Store is
suffcient to cover debt service, and approved the economic feasibility of
(c) Lender has reviewed and approved the financial condition and
the Store;
(d) The disbursement of the Refresh & Refurbish Funds has been approved by
Lender's appropriately authorized credit officers or committees;
(e) Borrower has provided to Lender (i) copies of all governental
approvals, licenses and permts required in connection with the Refresh Requirements, and (ii) all equipment rental agreements; and
(f) Lender shall have approved the competency, reliability and solvency of
the general contractor proposed to be retained by Borrower, and the proposed agreement between
Borrower and the proposed general contractor pertaining to the permitting and constrction of
the Refresh Requirements.
. 1.3 Purose of the Loan. The proceeds of the Loan, including without
limitation the Additional Funds disbursed as provided above in Section 1.2, shall be used
exclusively to fud (i) costs and expenditues associated with improvements to and/or purchases
of equipment for use at the Store as described in Exhbit A attached hereto, and (ii) at the
election of Lender, payment of the processing fee set fort in Section 3.11 below (collectively, the "Permitted Uses"), and for no other use or purpose whatsoever.
1.4 Term of Loan. If not sooner repaid, the outstanding principal amount of the Loan (less amounts deemed repaid pursuant to Section 1.6 below) and all other amounts owing under the Loan Documents (collectively, the "Obligations") shall be due and payable on the date which is twenty (20) years following the Business Open Date ("Matuty Date"). Lender
shall determine and confirm to Borrower in wrting the Business Open Date. Borrower may
prepay the Obligations in whole or in par without penalty, at any time. Lender may accept parial payments, whether or not marked "paid in full", without waiving its rights or remedies
under this Agreement.
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1.5 Amortization and Interest Payments. Beginning on the last day of the first
Contract Year ("First Anversary Date") and continuing on each aniversar of the First Anversar Date, Borrower shall make anual principal payments in the amount equal to five percent (5%) of the then outstanding principal balance of the Loan as of the First Anversar Date (such anual amount shall be referred to herein as the "Amortization Amount"). Notwithtanding the immediately preceding sentence, in the event Lender disburses all or any portion of the Loan after the First Aniversar Date, Lender shall adjust the amount of anual
principal reduction payments due on each ensuing aniversar of the First Aniversar Date so
as to fully amortize the principal balance of the Loan by the Matuty Date. In addition to
making anual payments of the Amortization Amount, Borrower shall pay to Lender on the First
Aniversar Date and on each anversar of the First Aniversary Date all accrued and unpaid interest on the Loan (at the rate set fort in Section 2 of the Note) for the prior twelve (12) month
period, as determned by Lender. The amounts due pursuant to this Section 1.5 shall be paid by
Borrower to Lender no later than sixty (60) days after the end of each Contract Year.
1.6 Repavrent Though Store Sales. Notwithstanding anything to the contrar contained in Section 1.5 above, if durng a given Contract Year Borrower has Gross Sales with respect to its Store of at least the Anual Guaranteed Amount, then the Loan shall be deemed to be repaid by Borrower as of the last day of such Contract Year (i) five percent (5%) of the then outstanding principal balance of the Loan (subject to adjustment as provided in Section 1.5), and
(ii) all interest which accrued under the Note during such Contract Year. Durng the first Contract Year only, solely for puroses of determining whether Borrower has met the Anual
Guaranteed Amount for such Contract Year, the actual Gross Sales with respect to Borrower's Store durng such Contract Year shall be grossed up by an amount equal. to one-twelft of the Anual Guaranteed Amount. Borrower acknowledges and agrees that it has itself paricipated in the determination of the Anual Guaranteed Amount, that such sales goal is reasonable and that
Borrower's failure to achieve Gross Sales of at least the Anual Guaranteed Amount each Contract Year wil result in repayment obligations. Borrower fuer acknowledges and agrees
that such deemed repayment of debt will result in taxable income to Borrower and that Lender
wil be delivering to Borrower an IRS Form 1099 reflecting such income. Borrower fuher acknowledges and agrees that any deemed repayment shall be calculated based only on the
register sales made by Borrower for the applicable Contract Year, and that if durng any Contract Year, Borrower's register sales exceed the Anual Guaranteed Volume of the Products for such Contract Year, such excess register sales canot be applied to any previous or future Contract Year.
1.7. No Waiver. Lender's deemed repayment of any portion of the Loan as set fort in Section 1.6 shall not operate as a waiver of its right to collect or demand repayment of
the Obligations upon the occurence of an Event of Default.
the Borrower to repay the Loan shall the Note appropriate notations to evidence (i) the date and amount of any Disbursement made by
1.8 Promissory Note. The obligation of be evidenced by the Note. Lender shall record and endorse on the schedule forming a part of
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Lender, (ii) the date and amount of each payment of principal by the Borrower, and (iii) the date
and amount of any deemed repayment of any portion of the Loan by Lender pursuant to
not affect the obligations of
Section 1.6; provided, however, that Lender's failure to record or endorse any such amount shall the Borrower under ths Agreement or the other Loan Documents.
1.9 Audit Rights. . So long as there are outstanding Obligations, Lender may,
upon reasonable notice to Borrower, audit Borrower's books and records pertaining to Gross
Sales. Borrower agrees to cooperate fully with such audit and, if such audit reveals an over-
reporting of Gross Sales, Borrower shall immediately pay to Lender any amounts then owing to Lender on account of such over-reporting plus interest at the Default Rate. In addition, if Gross
Sales have been overstated by more than five percent (5%), Borrower shall reimburse Lender
upon demand for Lender's actual out of
pocket audit costs.
2. Conditions to Disbursement. Before Lender becomes obligated to make any
Disbursement under this Agreement, all conditions to such Disbursement set forth below shall have been satisfied at Borrower's sole cost and expense in a maner acceptable to Lender in the exercise of its reasonable judgment. Borrower acknowledges that delays in Disbursements may result from the time necessar for Lender to verify satisfactory fulfillment of any and all conditions to a given Disbursement. Borrower consents to all such delays. No waiver of any condition to Disbursement shall be effective unless it is expressly made by Lender in wrting. If
Lender makes a Disbursement before fulfillment of one or more required conditions, that Disbursement alone shall not be a waiver of such conditions, and Lender reserves the right to require their fulfillment before making any subsequent Disbursements.
2.1 Loan Closing and First Disbursement. Lender shall not be required to make the first Disbursement unless all of the following conditions are satisfied on or before
Januar 7, 2007.
(a) Borrower shall have complied with all conditions or requirements
of Lender as set forth in the Conditional Commtment Letter, including without limitation (i)
satisfaction of the conditions set forth in pargrphs (a) though (e) on Page 1 of
Commitment Letter, (ii) Lender's receipt of reimbursement from Borrower for all costs incurred by Lender in connection with the Loan, and (iii) Lender's receipt of all of the items set fort in Exhibit "B" to the Commitment Letter.
the Conditional
(b) All Loan Documents shall have been duly executed by Borrower
and any guarantor and received by Lender, including appropriate resolutions or certificates of authority.
(c) Lender shall have received written confirmation from the Title
Company that (i) the Deed of Trust and the other Loan Documents which are in recordable form shall have been duly recorded in the offcial records of the county where the Property is located, and (ii) Title Company shall be in a position to deliver for filing with the Californa Secretar of
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State a UCC-L Financing Statement which perfects Lender's securty interest in all personal
property and fixtures covered by the Deed of Trust.
(d) The Title Company shall have issued or commtted to issue an LP-
10 AL T A Lender's extended coverage loan policy of title insurance in a liability amount satisfactory to Lender ("Title Policy"). The Title Policy shall insure the Deed of Trust as a
second-priority lien on Borrower's fee estate in the Property, subject only to exceptions
consented to by Lender in wrting, and shall contain such endorsements as Lender may require.
No title matter may be insured over by the Title Company without the express wrtten consent of Lender.
(e) Borrower shall have provided to Lender evidence of commercial
general liability insurance namng Lender as an additional insured, on an "occurence" basis
against claims for "personal injur" liability, including bodily injury, death or property damage liability, with a limit of not less than One Milion Dollars ($1,000,000.00). Such insurance shall name Lender as an additional insured and shall be primar and non-contributory with any other insurance cared by Lender.
(f) If required by Lender, Borrower shall have obtained performance
and labor and material payment bonds in dual obligee form covering the performance of the Contractor and such principal subcontractors for the Alterations as Lender may designate. The terms of the bonds and the bonding company shall be acceptable to Lender, and all required
bonds and the contracts which they cover shall have been duly recorded or fied in accordance with applicable Californa law.
(g) Lender shall have approved the information set forth in Borrower's
completed Environmental Questionnaire. If Lender so requires, Lender shall also have received
a report prepared by a licensed or registered environmenta engineer or other qualified par
satisfactory to Lender stating that there are no Hazardous Substances, as defined in Section 1.5 of the Environmenta Indemnity, present in, on, under or around the Propert, and that there is no condition or circumstance which warants fuer investigation or analysis in the opinion of the preparer of the report.
(h) Lender shall have approved the architect ("Architect"), engineer
("Engineer"), general contractor ("Contractor") and principal subcontractors to be used in connection with the Alterations.
(i) Lender shall have received and approved the Plans, together with
(i) a detailed budget for the Alterations and the other Permitted Uses of Loan proceeds, and (ii) copies of building permits.
. u) Lender shall have received and approved (i) all contracts entered in
by Borrower with the Architect, Engineer and Contrctor, respectively, (ii) an assignment of
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each such contract referred to clause (i) in favor of Lender, in form and substance satisfactory to Lender, together with an assignment of the Plans, and (iii) consents to each such assignent
executed by the Architect, Engineer and Contractor, respectively, in form and substance
satisfactory to Lender.
rinancial information as it may require regarding the financial condition of Borrower, any
guarantor, the Store or the Property.
(I) Lender shall have received evidence of the due formation and good standing of Borrower and any guarantor, including such organzational documents (including
(k) Lender shall have received such financial statements and other
parnership agreements, operating agreements, aricles of organization or aricles of
incorporation) and certificates of status as Lender may require.
2.2 Disbursement if:
Any Disbursement. In no event shall Lender be required to make any
(a) Borrower fails to observe any condition or term set fort in the
Disbursement Agreement; or
request to issue a CL T A Form 122 endorsement or its equivalent; or
(b) For any reason the Title Company fails or refuses at Lender's
(c) The Improvements are materially damaged and not repaired, uness Lender receives funds from Borrower or insurance proceeds suffcient to pay for all repairs in a timely manner; or
(d) The Property or any interest in it is affected by eminent domain or
condemnation proceedings; or
(e) Lender receives a bonded or unbonded stop notice, uness
Borrower fies a release bond satisfactory to Lender in its reasonable judgment; or
(f) Under any of the Loan Documents, a default or Event of Default
(as derined in that document) has occurred and is continuing, or an event has occured that with notice or the passage of time could become a default or Event of Default.
2.3 Disbursement Procedures. Disbursements for Alterations shall be made in
accordance with the procedures set forth in the Disbursement Agreement, the terms of which are incorporated herein by this reference. Lender may delegate the disbursal and verification duties
to a third pary, in which case Lender wil notify Borrower and Borrower will make
disbursement requests to and submit documentation for disbursements to the third pary.
Disbursements of the Loan shall be made in the form of vouchers from Borrower to contractors
and/or suppliers. The contractors and/or suppliers though the third pary fuding company wil
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redeem the vouchers for payment. Except as otherwse provided in the Disbursement
Agreement, loan proceeds shall be available for disbursement as follows: one-fourth of the loan
amount at the time Borrower obtains permits for constrction; one-fourh of the loan amount when Lender verifies that the improvements are 25% complete; one-fourt of the loan amount
when Lender verifies that the improvements are 50% complete and one-four of the loan
amount after Lender verifies that the improvements are 75% complete. The Additional Funds, if
any, shall be available for disbursement in accordance with the terms of Section 1.2 above. Lender reserves the right, prior to making any disbursement, to require original paid invoices
supporting the expenditure of loan proceeds, releases of mechancs liens, and/or additional securty for the Loan as Lender may determine in its sole discretion. The third party fund control company fee, if any, will be paid by Lender.
3. Covenants of the Borrower. Borrower promises to keep each of
the covenants
set forth below, unless Lender has waived compliance in wrting.
3.1 Commencement and Completion of Improvements. Borrower shall obtain building permits and commence constrction of the Alterations no later than Januar 11,2007. Borrower shall complete the constrction of the Alterations, obtain a certificate of completion or a certificate of occupancy from the appropriate governental authority, and open for business (as .
determned by Lender) by not later than July 11,2007. Borrower's failure to observe any of
the deadlines set forth in this Section 3.1 shall be an Event of Default and shall not be subject to the cure period set forth in Section 4.9 below.
3.2 Permits, Licenses and Approvals. Borrower shall construct the
Alterations in a good and workmanlike marer in accordance with sound building practices as well as the Plans and all applicable laws pertaining to such constrction. Borrower shall properly obtain, comply with and keep in effect all permts, licenses and approvals which are
required to be obtained from governental bodies in order to construct and occupy the
Alterations and operate the Store.
3.3
Site Visits.
any reasonable time to enter and visit the Propert for the puroses of performing an appraisal, observing the work of constrction, examining all materials and determining whether such work conforms with the Plans approved by Lender. Lender shall also have the right to examine, copy and audit the books, records, accounting data and other documents of Borrower and its
contractors which relate to the Propert or constrction of the Alterations. In each instance,
(a) Lender and its agents and representatives shall have the right at
Lender shall give Borrower reasonable notice before entering the Propert. Lender shall make
reasonable efforts to avoid interferig with Borrower's Store operations.
(b) Lender is under no duty to visit the Propert or to supervise or
observe constrction or to examine any books or records. Any site visit, observation or
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examination by Lender shall be solely for the purpose of protecting Lender's rights and interests. No site visit, observation or examination by Lender shall impose any liabilty on Lender or result
in a waiver of any default of Borrower. In no event shall any site visit, observation or
examination by Lender be a representation that there has been or shall be compliance with the Plans, that the construction is free from defective materials or workmanship, or that the
constrction complies with any other applicable law.
3.4 Protection Agaist Lien Claims. Borrower shall promptly payor
otherwse discharge all claims and liens for labor done and materials and services fushed in connection with the constrction of the Alterations. Borrower shall have the right to contest in good faith any claim or lien, provided that it does so diligently and without prejudice to Lender
or delay in completing the Alterations.
3.5 Pavrent of Expenses. Borrower shall pay Lender's costs and expenses
incured in connection with the making, disbursement and administration of the Loan, as well as any revisions, extensions, renewals or "workouts" of the Loan, and in the exercise of any of Lender's rights or remedies under this Agreement. Such costs and expenses include charges for title insurance (including endorsements), fiing, recording and escrow charges, fees for appraisal,
architectural and engineering review, constrction services and environmental services,
mortgage taxes, legal fees and expenses of Lender's counsel and any other reasonable fees and costs for services, regardless of whether such services are furnished by Lender's employees or agents or independent contractors. Borrower acknowledges that amounts payable under this Section are not included in any loan or commitment fees for the Loan.
3.6 Financial Information. Borrower shall keep true and correct financial
books and records on a cash basis pertaining to Gross Sales and to the constrction of any Alterations. Upon request of Lender from time to time, Borrower shall deliver balance sheets
and income statements to Lender for itself and the Store, together with a statement showig all changes in the financial condition of Borrower and the Store which occured durg the preceding Contract Year. These financial statements may be Borrower prepared. Borrower
shall also fush to Lender upon request signed copies of any tax retus and such other
information as Lender may reasonably request concernng its affairs and properties.
3.7
Notices. Borrower shall promptly notify Lender in wrting of:
amount claimed is Fifty Thousand Dollar ($50,000) or more;
(a) Any litigation affecting Borrower or any guarantor, where the
(b) Any communication, whether wrtten or oral, that Borrower may receive from any governental, judicial or legal authority, giving notice of any clai or
assertion that the Store, the Property or any Alterations fail in any respect to comply with any applicable governental law;
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(c) Any default by the Project Manager, Contractor or any
subcontractor, material supplier or surety; and
Property (including any damage suffered as a result of earquakes or floods), or in Borrower's
prospects.
(d) Any material adverse change in the physical condition of the
or any guarantor's business condition (financial or otherwise), operations, properties or
3.8 Indebtedness. Except for the Senior Loan and except as otherwise
provided under the Loan Documents, Borrower will not create, incur or assume any
indebtedness, commitment or other obligation for borrowed money without the express prior
wrtten consent of Lender.
3.9 Performance of Acts. Upon request by Lender, Borrower shall perform all acts which may be necessar or advisable to perfect any lien or securty interest provided for in
the Loan Documents or to car out the intent of
the Loan Documents.
3.10
Insurance.
(a) Borrower shall provide, maintain and keep in force at all times
prior to repayment of the Loan, the insurance required by Section 2.1 above and by the
Disbursement Agreement. Also at all such times, Borrower shall provide, maintain and keep in force any and all additional insurance that Lender in its reasonable judgment may from time to time require, against insurable hazards which at the time are commonly insured against in the case of property similarly situated. Such additional insurance may include flood insurance as
required by federal
law and earquake insurance as required by Lender. At Lender's request, Borrower shall supply Lender with an original of any policy or a certificate of coverage.
(b) All policies of insurance required under this Agreement and the
Disbursement Agreement shall be issued by companies approved by Lender having a minmum A.M. Best's rating of A:IX. The limits, coverage, forms, deductibles, inception and expiration dates and cancellation provisions of all such policies shall be acceptable to Lender. In addition, each required property insurance policy shall contain a Lender's Loss Payable Form (Form 438 BFU or equivalent) in favor of Lender, and shall provide that all proceeds be payable to Lender
to the extent of its interest. An approval by Lender is not, and shall not be deemed to be, a
representation of the solvency of any insurer or the suffciency of any amount of insurance.
(c) Each policy of insurance required hereunder and under the
Disbursement Agreement shall provide that it may not be modified or cancelled without at least thirty (30) days' prior wrtten notice to Lender. When any required insurance policy expires, Borrower shall furnish Lender with proof acceptable to Lender that the policy has been reinstated or a new policy issued, continuing in force the insurance covered by the policy which expired. Borrower shall also furnish Lender with evidence satisfactory to Lender that all premiums for
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such policy have been paid within thrt (30) days of renewal or issuance. If Lender fails to receive such proof and evidence, Lender shall have the right, but not the obligation, to obtain
curent coverage and advance fuds to pay the premiums for it. Borrower shall repay Lender immediately on demand for any advance for such premiums, which shall be considered to be an
additional loan to Borrower bearng interest at the Default Rate and secured by the Deed of
and which shall not be subject to deemed repayment in accordance with Section 1.6 above.
Trust
3.11 Processing Fee. Borrower shall pay to Lender upon execution of this Agreement by Borrower a processing fee in the amount of$10,000.
4.
Events of Default.
The occurrence of any of the following events shall constitute an "Event of
Default" hereunder:
4.1 The Borrower assigns this Agreement or any of the other Loan Documents
to a third pary without the prior wrtten consent of Lender: or
4.2 The Borrower assigns the CD Store Agreement to a third par without the
prior wrtten consent of Lender; or
4.3 The Borrower fails to observe any of the deadlines set forth in Section 3.1 above or, after commencing operations, there occurs a cessation of operations at the Store for
thirt (30) consecutive days; or
4.4
wrtten consent; or
There shall occur a "Transfer" (defined below) without Lender's prior
4.5 The CD Store Agreement is terminated by either Lender or Borrower prior to the end of its stated term; or
4.6 There shall occur a default or "Event of Default" under any contract
entered into by Borrower with the Architect, Engineer or Contractor; or
4.7 Borrower fails to make any payment due under the Loan Documents
withn five (5) business days afer the date when due; or
4.8 Borrower fails to comply with any provision contained in this Agreement other than those provisions elsewhere referred to in this Section 4, and does not cure that failure within thrty (30) days after wrtten notice from Lender; or
4.9 Any representation or warranty made by Borrower in the Loan Documents
or in any Pay Voucher, financial statement or document delivered pursuant to this Agreement, or
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in connection with the makng of any Disbursement, shall prove to have been incorrect, untre or misleading in any material respect when ipade;
4.10 A default or "Event of Default" shall have occured under any of the other Loan Documents; or
4.11
There shall occur a default or event of default under any of the Senior
Loan Documents; or
4.12 The Borrower shall fail to pay when due the principal of or interest on any
other indebtedness secured by the Propert, or there shall occur any other event that would
permit the holder of such indebtedness to accelerate the matuty thereof; or
4.13 The Borrower shall become insolvent, or admit in wrting its inability to pay its debts as they mature, or make an assigrent for the benefit of creditors, or apply for or
consent to the appointment of a receiver or trstee for it or a substantial par of its property or
business, or such a receiver or trstee otherwse shall be appointed and shall not be discharged
within 30 days after such appointment, or there shall be instituted by or against Borrower a
banptcy, insolvency, reorganization or liquidation proceeding and such proceeding shall not
be dismissed within 30 days ("Insolvency Proceeding"), or any order, judgment or decree shall
be entered against the Borrower decreeing its dissolution, or the Borrower's existence shall otherwise be termnated.
5.
Remedies.
5.1 Upon the occurrence of any Event of Default, Lender may, at its option,
exercise all remedies and rights available to it under ths Agreement, the other Loan Documents
and under applicable law or in equity or by statute, including without limitation, the right to (i) declare all or any part of the Obligations to be fortwith due and payable, without presentation, demand, protest or notice of any kind, all of which are hereby expressly waived by the Borrower;
or (ii) terminate any obligation of Lender hereunder to make furher Disbursements. All of
Lender's rights and remedies shall be cumulative. No delay or failure of Lender in the exercise of any right or remedy provided for hereunder shall be deemed a waiver of that right by Lender, and no exercise or parial exercise or waiver of any right or remedy shall be deemed a waiver of any furter exercise of such right or remedy or of any other right or remedy that Lender may have.
5.2 Also upon any Event of Default, Lender shall have the right in its sole
discretion to enter and take possession of the Propert, whether in person, by agent or by courappointed receiver, and to take any and all actions which Lender in its sole discretion may consider necessar to complete constrction of the Alterations, including making changes in the
Plans, work or materials and entering into, modifying or terminating any contractual
arrangements, all subject to Lender's right at any time to discontinue any work without liabilty.
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
If Lender chooses to complete the Alterations, it shall not assume any liability to Borrower or any other person for completing the Alterations or for the maner or quality of construction of the Alterations, and Borrower expressly waives any such liabilty. If Lender exercises any of the rights or remedies provided in ths subparagraph, that exercise shall not make Lender, or cause Lender to be deemed to be, a parer or joint venturer of Borrower. Lender in its sole discretion may choose to complete construction in its own name. All sums which are expended by Lender in completing constrction shall be considered to be an additional loan to Borrower bearng
interest at the Default Rate, secured by the Deed of Trust and not be subject to deemed
repayment in accordance with Section 1.6.
5.3 For puroses of determining the outstanding balance of the Loan at the
time an Event of Default occurs hereunder, deemed repayment of principal and interest by Lender pursuant to Section 1.6 shall be calculated based upon the percentage of the Anual Guaranteed Amount achieved by Borrower through the last day of the calendar month immediately preceding the occurrence of the Event of Default. For example if the CD Store Agreement is terminated by Borrower on May 15, 2005 and the current Contract Year expires December 31, 2005, Lender wil calculate total Gross Sales durng the period Januar 1, 2005
through April 30, 2005 and compare such total to the Anual Guaranteed Amount. If Sales during such period equal 33% of balance of
total Gross the Anual Guaranteed Amount, the outstanding principal
the arual principal reduction
the Loan will be reduced by an amount equal to 33% of
payment due for that Contract Year (determined in accordance with Section 1.6 above).
6. Interest and Late' Char2es. Borrower hereby acknowledges that late payment
by Borrower to Lender of the payments due under ths Agreement will cause Lender to incur
costs not contemplated by ths Agreement, the exact amount of which wil be extremely diffcult
to ascertain. Accordingly, if any payment due from Borrower under ths Agreement is not
received within five (5) business days afer the date on which such payment is due and payable, then without any requirement for notice to Borrower, Borrower shall pay Lender a late charge equal to five percent (5%) of such overdue amount. Borrower and Lender hereby agree that such late charge represents a fair and reasonable estimate of the costs Lender will incur by reason of late payment by Borrower. Acceptance of such late charge by Lender shall in no event constitute a waiver of Borrower's default with respect to such overdue amount, or prevent Lender from exercising any of the rights and remedies granted hereunder. In addition to the foregoing,
Borrower agrees to pay interest at the Default Rate on any and all sums due under this
Agreement from the payment due date until the date fully paid by Borrower.
7. Transfers. Borrower agrees that, in the event of any "Transfer" (as defined
below) without the prior wrtten consent of Lender, Lender shall have the absolute right, at its option, without prior demand or notice, to declare the Obligations immediately due and payable.
Consent to one such Transfer shall not be deemed to be a waiver of
the right to require consent to
future or successive Trasfers. Lender may grant or deny such consent in its sole discretion and,
if consent should be given, any such Transfer shall be subject to all obligations of Borrower
under the Loan Documents, such transferee shall assume all obligations under the Loan
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
Documents and agree to be bound by all provisions contained herein and therein, and Lender may require that Borrower pay to Lender an assumption fee in the amount of five percent (5%) of the remaining balance of the unamortized Loan. Such assumption shall not, however, release
Borrower or any guarantor from any liability to Lender without the prior wrtten consent of
Lender. As used herein, "Transfer" shall mean:
(a) any sale, transfer, conveyance, hypothecation, encumbrance or lease of the Propert or any par thereof or interest therein to any person or entity, whether voluntar, involuntar, by operation oflaw, or otherwise (except for any deed of
trst executed in favor of
EGI in connection with the Citicorp Loan);
change of control, Borrower has not paid in full all Obligations ("control" as used herein shall
mean the ability to direct the day to day management of the affairs of
(b) any change of control in Borrower if, within thirt (30) days after such
Borrower);
(c) any sale or transfer of greater than ten percent (10%) of the direct or
indirect ownership interests in Borrower or any consolidation or merger of Borrower (whether
voluntarly, involuntarly, by operation of law or otherwise); or
(d)
any sale, lease or other disposal of all or substantially all of Borrower's
assets.
8. Indemnity Ree:ardine: Construction and Other Risks. Borrower indemnfies,
defends and holds the Indemnified Paries harless from and against any and all Indemnfied
Costs directly or indirectly arsing out of or resulting from constrction of any improvements on the Property, including any defective workmanship or materials; or any failure to satisfy any requiements of any laws, regulations, recorded covenants, maps, permits or other entitlements that apply or pertain to the Propert; or breach of any representation or warty made or given by Borrower to any of the Indemnfied Paries or to any prospective or actual buyer, tenant or other occupant of all or any portion of the Propert; or any claim or cause of action of any kid by any pary that any Indemnified Par is liable for any act or omission of Borrower or any other person or entity in connection with the ownership, sale, operation or development of the
Propert. This indemnity shall surive repayment in full of
the Obligations.
9.
Miscellaneous.
9.1 Amendments. This Agreement may only be amended by a wrtten
instruent duly executed by Lender and Borrower.
9.2 Notices. Any notice required or permitted to be given to any pary under
this Agreement shall be in wrting and shall be given by (i) facsimile transmission, (ii) certified
mail retur receipt requested, or (iii) hand delivery, addressed as follows:
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Facilty Number: 824611SCDB65975 Customer Account Number: 0996439
(a)
If to the Borrower:
STTN Enterprises, Inc.
631 San Felipe Rd.
Hollster, CA 05035
Attention: Nazim Faquiryan
Sayed Faquiryan Facsimile No.: If to Lender:
(b)
BP West Coast Products LLC P. O. Box 5077 Buena Park, California 90622-5077 Attention: Contract Dealer Loan Administration Facsimile No.: 714-670-5178
Such notices shall be deemed received (i) upon delivery, if delivered by hand or by facsimile transmission (with confirmation of receipt), or (ii) thee days after having been deposited in the U.S. mail, postage prepaid, if mailed. Any pary may change its address for notice hereunder by notice given as provided above.
9.3 Counterpars. This Agreement may be executed in two or more
counterpars, each of which shall be deemed an original, and all of which together shall constitute but one agreement.
9.4 Governng Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of
California.
9.5 Severability. If any provision of this Agreement is declared invalid, such
decision shall not affect the validity of any remaining portion, which remaining portion shall
remain in force and effect as if ths Agreement had been executed with the invalid portion
thereof eliminated.
9.6 Assignment, Binding Effect. The Loan is not assumable. Borrower may
not assign this Agreement, nor delegate any of its duties hereunder, without the prior wrtten consent of Lender, which consent may be granted or denied in Lender's sole and absolute discretion. Lender may assign all or any par of its rights and interests hereunder. Subject to the
foregoing, this Agreement shall be binding upon and shall inure to the benefit of the paries hereto and their respective successors and assigns.
9.7 Tax Consequences. Lender makes no representation regarding and
assumes no responsibility for the tax consequences to Borrower of any term of this Agreement or
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
the other Loan Documents. Borrower represents and warants to Lender that it has had an
opportunity to consult with tax counsel prior to executing the Loan Documents.
9.8 Entire Agreement. This Agreement and the other Loan Documents
contain all of the agreements and understandings between the paries with respect to the subject
matter of this Agreement. All prior oral or written promises, representations, agreements or
understandings, express or implied, in connection with the subject matter of this Agreement are expressly merged herein and superseded hereby.
9.9 Attorney's Fees. If any lawsuit, reference or arbitration is commenced
which arises out of or relates to this Agreement, the Note, the other Loan Documents or the Loan, the prevailing pary shall be entitled to recover from the other pary such sums as the cour, referee or arbitrator may adjudge to be reasonable attorneys' fees in such action, in addition to costs and expenses otherwse allowed by law. In all other situations, including any Insolvency Proceeding, Borrower agrees to pay all of Lender's costs and expenses, including attorneys' fees, which may be incurred in enforcing or protecting Lender's rights or interests. From the time(s) incurred until paid in full to Lender, all such sums shall bear interest at the
Default Rate.
IN WITNESS WHEREOF, the paries have executed this Agreement on the date first
above wrtten.
STTN ENTERPRISES, INC., a California corporation
By~\
Name: Nazim S.M. Faquiryan
Title: CEO/President
BP WEST COAST PRODUCTS LLC, a Delaware limited liabilty company
By
Title: ' Vice President
By :I~~
Name: Sayed M.N. Faquiryan
Title: Secretary/Treasurer
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
EXHIBIT A
Loans may only be used for ampm store-related image and equipment-basea improvements; the types of qualifying expenditues and the maximum amount permitted to be loaned are noted below:
Description
Coolers/Freezers Gondolas/Sales
(fast track)
Counters and Cabinets
Maximum Amount
$32,500
Modules
$15,000
$50,000
$ 12,000
Interior Lighting
Store Front System
HVAC
$ 20,000
$35,000 $20,000
Floor and tiling
Plumbing
Electrical
Video Equipment
$35,000 $50,000
Sureilance
$25,000
Prices vary up to 20%, dependent on geographic location
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Exhibit A
1
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
EXHIBIT B
SECURD PROMISSORY NOTE
(Attached)
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Exhibit B
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SECURED PROMISSORY NOTE (am/pm Mini Market)
FOR VALUE RECEIVED, STf ENTERPRISE, INC., a California corporation, (hereinafter referred to as
"Borrower") hereby promises to pay to BP WEST COAST PRODUCTS LLC, a Delaware limited liability company
(hereinafter referred to as "Lender"), or order, on or before . , the pricipal sum of Two Hundred
Twenty Five and No/100 Dollars ($225,000.00) (the "Maximum Loan Amount"), or so much of that sum as may be advanced under this promissory note ("Note"), plus interest as specified below. This Note evidences a loan ("Loan")
úom Lender to Borrower.
i. This Note is secured by a Deed of Trust with Assignment of Rents, Security Agreement and Fixture
Filing ("Deed of Trust") covering certain real and personal propert, as therein described (the "Propert"). It may also
be secured by other collateraL. This Note and the Deed of Trust are two of several Loan Documents, as defied and
designated in that certin Loan Agreement ("Loan Agreement") between Lender and Borrower. Some or all of
Documents, including the Loan Agreement, contain provisions for the acceleration of the maturity of this Note.
herein
the Loan
Capitalized terms used herein have the meanings assigned to them in the Loan Agreement, unless otherwise defined
2. The unpaid pricipal balance of this Note fÌom day to day outstanding, which is not past due, shall
bear interest at a fixed rate of
interest equal to Five percent (4.75 %) per aaum.i Interest will be payable in arears on an
aaual basis beginning on the First Anniversar Date and on each successive anniversary of such date during the term of
the Loan. Borrower shall also make aaual pricipal reduction payments as provided in the Loan Agreement. Principal
and interest are subject to aaual forgiveness in accordance with the terms and conditions set fonh in the Loan Agreement.
3. All payments of this Note shall be made in lawful money of the United States of America in
immediately available funds at Lender's offces at 4 Centerpointe Drive, Suite 300, La Palma, California 90623-1066, Attention: Contract Dealer Loan Administration, or at such other place or to such account as the holder hereof shall have designated to Borrower in writing.
4. All principal and all accrued and unpaid interest shall be due and payable no later than the date which
is twenty (20) years following the Business Open Date ("Maturity Date").
5. Lender shall not be required to make any advance if that would cause the outstanding principal of
Note to exceed the Maximum Loan Amount.
6.
this
Borrower may prepay the principal balance of this Note, in whole or in par, at any time without
penalty.
7. If Lender has not received the full amount of any payment, other than the final principal payment, by
the end of five (5) business days afer the date when due, Borrower shall pay a late charge to Lender in the amount of
five percent (5%) of
the overdue payment. In addition to the foregoing, Borrower agrees to pay interest on any and all
sums due under this Note fÌom the payment due date until the date fully paid by Borrower, such interest to accrue at a rate of interest equal to the "prime rate" (as reported by the Wall Street Joural) plus two percent (2%) per annum but in
no event greater than the maximum amount permitted by law (the "Default Rate").
8. From and after matuity of
this Note (whether upon the Maturity Date, by acceleration or otherwise),
all sums then due and payable under this Note, including all unpaid pricipal, accrued interest and any other sums outstanding hereunder, shall bear interest until paid in full at the Default Rate. Compounding of interest may result if
outstanding interest hereunder accrues interest at the Default Rate.
1 The interest rate currently approved for CD Loans is 4.75 % per annum but is subject to change. The BP tax
departent should be consulted prior to each loan closing to verify the current interest rate approved for BPWCP CD
loans.
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9. Ifany of
the following "Events of
Default" occur, any obligation of
the holder to make advances under
this Note shall terminate, and at the holder's option, exercisable in its sole discretion, aU. sums of principal and interest
under this Note shall become immediately due and payable without notice of default, presentment or demand for
payment, protest or notice of nonpayment or dishonor, or other notices or demands of any kind or character:
(a) Borrower fails to perform any obligation under this Note to pay principal, interest or other amounts due, and does not cure that failure within five (5) business days after the date when due; or
(b) document) occurs.
Under any of the Loan Documents, a default or "Event of Default" (as defined in that
(c)
Borrower becomes the subject of any proceeding arising under 11 V.S.C. ("Insolvency
Proceeding").
10. If any lawsuit, reference or arbitration is commenced which arises out of or relates to this Note, the
Loan Documents or the Loan, the prevailing par shall be entitled to recover 1Tom each other par such sums as the court, referee or arbitrator may adjudge to be reasonable attomeys' fees in such action, in addition to costs and expenses otherwise allowed by law. In all other situations, including any Insolvency Proceeding, Borrower agrees to pay all of
Lender's costs and expenses, including attorneys' fees, which may be incurred in enforcing or protecting Lender's rights or interests. From the time(s) incured until paid in full to Lender, all such sums shall bear interest at the Default Rate.
II.
of that State.
This Note is governed by the laws of the State of California, without regard to the choice of law rules
12. Borrower agrees that the holder of this Note may accept additional or substitute security for this Note, or release any security or any par liable for this Note, or extend or renew this Note, all without notice to Borrower and without affecting the liability of
Borrower.
13. If Lender delays in exercising or fails to exercise any of its rights under this Note, that delay or failure shall not constitute a waiver of any of Lender's rights, or of any breach, default or failure of condition of or under this Note. No waiver by Lender of any of its rights, or of any such breach, default or failure of condition shall be effective,
unless the waiver is expressly stated in a writing signed by Lender. All of Lender's remedies in connection with this
Note or under applicable law shall be cumulative, and Lender's exercise of anyone or more of those remedies shall not constitute an election ofremedies.
14. This Note inures to and binds the heirs, legal representatives, successors and assigns of Borrower and
Lender; provided, however, that Borrower may not assign this Note or any Loan funds, or assign or delegate any of its rights or obligations under the Loan Documents, without the prior written consent of Lender in each instance. Lender in
its sole and absolute discretion may, at any time, sell, transfer, or assign this Note, the Deed of
Documents.
Trust and the other Loan
15. If more than one person or entity are signing this Note as Borrower, their obligations under this Note
shall be joint and severaL.
IN WITNESS WHEREOF, this Note has been duly executed and delivered by Borrower as of
above.
the date set fort
See signatures on the next page
2
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STTN ENTERPRISE, INC.,
BY~'~
Name: Nazim S.M. FaquiryanV
Title: CEO and President
a California corporation
By - ..=~--r;'-~-Name: Sayed M:Ñ. Faquiryan
Title: Secretary and Treasurer
3
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Facilty Number: 824611SÇDB65975 Customer Account Number: 0996439
EXHIBIT C
SCHEDULE OF LOAN DOCUMENTS
1.
Loan Agreements (Gasoline and arpm Mini Market)
Secured Promissory Note
Deed of Trust with Assignent of
2.
3.
Rents, Security Agreement and Fixture Filing
4.
5.
6.
UCC-L Financing Statement
Environmental Indemnty
Environmental Questionnaire
Senior Lender's Consent to Encumbrance and Request for Notice of
7.
8.
Default
Guaranty executed by Nazim S.M. Faquiryan
Guaranty executed by Sayed M.N. Faquiryan and Mahgul Faquiryan
9.
10. CD Store Agreement
11. Memorandum of Gasoline Agreement for Dealer Owned and Franchise Operated Facility
12.
13.
14.
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Exhibit C
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
EXHIBIT D
FORM OF DISBURSEMENT AGREEMENT
(Attached)
Exhibit D
1
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