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EXHIBIT I
Case 5:07-cv-04808-JF
Document 49-4
Filed 07/03/2008
Page 2 of 60
~. .. .. .. . 4~.~
Att:
Re:
bp
BP WEST COAST PRODUCTS, LLC
a f)elal' are limited liahility ("011 paii)'
II
May 25, 2006
STI ENTERPRISES, INC.
1313 N. Milpita Blvd. #1606 Milpita, CA 95035
Nazim Faquiran and Sayed Faquiran
Facilit #82461
.
631 San Felipe Rd., Hollister, CA 95035 (the "Real Propert'')
Dea Naz and Sayed:
BP WEST COAST PRODUCTS LLC, a Delaware limited liability company ("BPWCP"), is pleasd to consider the
request of S1T ENTERPRISES, INC., a California corpration ("Borrowet'), for a loan (the "Loan") in the
the ARCabraded retail motor fuel station and ampm Mini Maret selling beer and wine (collectively, the "Business")
amount of $475,00.00 (the "Maximum Loan Amount") to fiance the remodeling and refuishing of
loced at the Real Propert, and related improvements and personal propert (the "Improvements") owned by
Borrwer and situted on, or used in connection with, the Real Prpert (collectively, the "Propert").
A summar of the terms of the Loan is contained in Exhibit "A" enclosed with and incorpraed into this letter. Complete terms of the Loan wil be set fort in BPWCP's form of documents and agrements to be signed by
Borrower, which wil evidence and secure the Loan.
BPWCP's obligation to make and fud the Loan is contingent upon (i) BPWCP's receipt, review, and approval of
the items listed on Exhbit "B" enclosed with and made a par of this letter, (ii) the satisfaction of the conditions
listed on Exhibit "B," and (iii) BPWCP's:
a.
Receipt of Borrower's loan application and verification of the information contained in
Borrower's applicaton;
b.
Approval ofan appraisal of
the Propert prepared by an appraiser approved by BPWCP;
c.
cash flow fiom the Business to cover debt service, and economic feasibility of
Review and approval of the fiancial condition of Borrower, condition of title, suffciency of net the Business;
additional documents and inormation required by BPWCP; and
d.
e.
Recipt, review, and approval of
Final ap)1oval of
the Loan by BPWCP's appropriate credit offcers or committees.
Borrwer shall pay' all of BPWCP's costs in connection with the Loan, including, but not limited to, credit reports,
title inurce premiums, escrow fees, legal fees, reording fees, the loan processing fee of $ i 0,000 and other
expenses. BPWCP wil notify Borrower of its fial approval of terms and conditions of
the Loan by issuing loan documents containig the
the Loan as finally approved.
Time is of the essence in connection with any matter discussed in this letter. If you agree to the terms and
conditions contained in this letter, please indicate your acknowledgment and agreement by signing and datig the
enclosed copy of of this letter for your fies. If
this letter, initialing Exhibits "A" and "B", and retuing them to me. You may retain the original you do not sign and retu this letter and the initialed Exhibits to me on or before July,
10, 2006, or you do not provide the items or satisfy the conditions listed on Exhibit "B" on or before the time
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STT ENTERPRISES, INC.
~~ftl: ...
May 25, 2006
Page 2
deadlines set fort in Exhibit "B", ths letter wil become void, and BPWCP wil have no fuer obligations under
this letter.
Finally, please note that BPWCP is required by law to report the distbution of funds to the Internal Revenue Service. You should seek the advice of an accountat or ta attorney regarding the possible ta consequences of this
transaction before you sign the Loan documents.
If you have any questions regarding ths letter, please contact Ken Wickerham at 83 i -62-9 i 30.
Very trly your,
Jf//cary ~ 0
JMC/pjs
cc:
~ J1 (J
Regional Portolio Manager
Ken Wickerham
Enclosures
Acknowledgement of
Receipt of
Letter: Mev': ~ ,2006.
STTN ENTERPRISES, INC.,
A California corpration
By:'\2~rPrted Name: Naz Faauiran
Prted Title: CEO and President
By:
~ ~L/L
Prted Name: Saved Faauiran
Prted Title: Secreta and Treasurer
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STT ENTERPRISES, INC.
May 25, 200
Page 3
Agreed to this 3(:J day of M¿t/
STTN ENTERPRISES, INC., A Californa corpration
,2006.
By: ~j \."
Printed Name: Naz Faauiran
Prted Title: CEO and President
~- '-1 By: ~'Z-;?",,
Prted Name: Saved Faauiran
Prted Title: Secreta and Treasurer
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STT ENTERPRISES, INC.
May 25, 2006 Page 4
EXHIBIT" A"
SUMMARY OF LOAN TERMS
(Subject to Loan Documents and Final Loan Approval)
Maximum Loan Amount: $475,000.00
Base Loan Amount: $320,000.00 ($200,000.00 for loan attibutable to gasoline service station)
($120,00.00 for loan attbutable to ampm Mini Maret)
Additional Loan Amounts:
Additional Funds:
If the dat (the "Business Commencement Date") upon which Borrower completes constrction of the Improvements and opens the Business (which shall be defied as the completion and opening for business of all material components of the gas and store offerig as set fort more pacularly in the documents and agreements (collectively, the "Frachise Agreements") to be executed by Borrower in connection with acquisition of a frchise
under the Franchise Agreements) occur within the time periods provided below, and provided Borrower is not then
in default under any of the terms and conditions of the Loan Agreement, Loan Documents, or Frachise
Agreements, BPWCP may elect, but shall not be obligated to disbur additional funds ("Additional Funds") to or
on behalf of Borrower as follows:
If Business Commencement Date occur by the last day of the foureenth (14th) month
following Borrower's execution of ths Conditional Commitment Letter: 125% of Base
Loan Amount.
If Business Commencement Date occur between the fit day of the fifteenth (15th)
month followig Borrower's execution of this Conditional Commitment Letter, and the last day of the seventeenth (17~ month following Borrower's execution of this Conditional Commitment Letter: i 15% of Base Loan Amount.
Additional Funds shall be used by Borrower solely for reimbursement of costs and expenditures associated with improvements to and/or purchases of equipment for us at the Business, and for no other use or purse whatsoever. Borrower shall provide to BPWCP reasonable documentation evidencing such costs and expenditues as a conditon to BPWCP's disburement of the Additional Funds to Borrower.
Refiesh ~ Refuish Funds:
If as of the I i th anivers of the first disburement under the Loan, provided Borrower is not then in
default under any of the terms and conditions of the Loan Agrments, Loan Documents, or Franchise Agreements, BPWCP may elect, but shal not be obligated to disburse up to Seventy-Five Thousand and 00/100 Dollars
($75,00) (the "Reffsh & Refubish Funds") to or on behalf of Borrower to be used for non-stctul changes to
the Improvements; such as, updatig and retrofitting the interior of the Improvements to comply with BPWCP's
then-curent design and layout for its ampm mini markets, including, but not limited to, new paint, floorig,
& Refuish"). The Reffsh & Refuish Funds shall be used solely to finance the cost of the Refiesh & Refuish,
and for no other use or purse whatsover.
Interest Rate: 5.00% per year (subject to change prior to the closing of
signage, fixtues, equipment, and the like (collectively, the "Refiesh
the Loan).
Prepayment Fee: None.
Assumption: Not permitted.
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STT ENTERPRISES, INC.
May 25, 200
Page 5
Term: Twenty (20) yearAmortzation Schedule: I/2Ot of be payable on each anvers of the Loan amount comprised of
the Base Loan Amount and Additional Funds wil the ffrst day of the fit complete month in which the Business is open
for business.
Nonrefudable Loan Processing Fee: $10,000
A Ded of Trust with Assignent of Rents, Securty Agrment and Fixtue Filing recorded in the Offcial Records of the county where the Real Prope is situated. and encumberig the Real Propert in a lien position
approved by BPWCP as BPWCP, in its sole disretion, determines.
The Loan Agreement wil include provisions requirg: I) that constrction of
the Improvements must commence
no later than the last day of the eighteenth (18m) month following Borrower's execution of the Frachise Agreements; 2) that the Business Commencement Date must occur on or before the last day of the twenty-
four (24~ month following Borrower's execution of the Frachise Agrements; and (3) that if the
Business Commencement Date doe not occur by the last day of the twenty-four (24~ month following Borrower's execution of the Frahise Agreements, BPWCP may, at its option, declar the Loan to be in
default and immediately due and payable, and terminate the Loan Agreements.
A UCC-i Financing Statement in a lien position approved by BPWCP as BPWCP, in its sole discretion, determines, fied with the Secreta of State of the state of Borrower's incorpraion or organiztion (or, if Borrower is
an individual, in the state where Borrower's pricipal residence is locted), with respect to the personal
propert of
Borrower, including but not limited to, machinery, equipment, futu, fixs, and inventory
now or in the futue situated on, or usd in connection with the Business at, the Real Propert.
Personal Guarties acceptable to BPWCP, including but not limted to personal guarties fiom all pricipals in
Borrower and spouss of pricipals in Borrower.
Anual guaanteed gasoline volume: 2,800,00 gallons. Anual guateed ampm Min Market sales: $960,000.00.
Loan must be fully funded on or before the last day of the twenty-fourh (24~ month following Borrower's execution of the Frachise Agreements.
Other terms:
NONE
Borrwer's initials
~ ~--
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STI ENTERPRISES, INC.
May 25, 200
Page 6
EXHIBIT "B"
ITEMS REOUIRD TO COMPLETE LOAN APPLICATION AND CONDITIONS TO BE SATISFIED BEFORE LOAN FUING
ITEMS REOUIRED AT THE TIME THE LETTKR IS SIGNED BY BORROWER AND RETURNED TO BPWCP:
1.
Borrower must sign BPWCP's Contrct Dealer Gasoline Agreement for a term of
twenty (20) year.
2.
Borrwer must sign ampm Mini Market Agreement for a term of twenty (20) year and pay the Initial
Frachise Fee.
ITEMS REOUID ON OR BEFORE THE 180m DAY FOLLOWING BORROWER'S SIGNATURE OF THE FRCHISE AGREEMENTS DESCRIED IN ITEMS 1 AND 2 ABOVE:
3.
Credit report(s) of Borrower, aU pricipals in Borrower, aU spouss of pricipals in Borrower, and all
guntors.
4.
5.
BPWCP's loa application.
Borrower's organiztional documents.
6.
7.
Borrower's tapayer identification number.
Income ta retus of Borrower, all pricipals in Borrower, al spouses of pricipals in Borrower, and all
guartors.
8.
Ban and investment statements of Borrower, all pricipals in Borrower, all spuses of pricipals in
Borrwer, and aU guartors.
9.
10. 11. 12.
13.
Profit and loss statements for the proposed Business.
Strctue and Use Proceeds Form.
Senior Lien Holder's loan commitment letter.
Written autorition for BPWCP to contact and obtain inormation fiom Senior Lien Holder.
Either: a.
a certfied copy of a recorded grt deed showing Borrower's fee interest in the Real Propert; or
b.
a cerfied copy of signed escrow instrctions for Borower's purchase of the fee interest in the
Real Propert; or
c.
a signed grund lease between the owner of the Real Prpert and Borrower, containing
mortgagee protection provisions acceptable to BPWCP and its counsel, or alternatively, a signed
amendment to the ground lease acceptale to BPWCP and its counsel establishing certin
mortgagee protections in favor of
BPWCP.
14.
A preliminar title report fiom a BPWCP-approved title company for the Real Propert and a complete, legble copy of each document shown as an exception on the preliinar title report.
An AL T A surey of
15.
the Real Propert certfied to the BPWCP-approved title company.
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STT ENTERPRISES, INC.
May 25, 200
Page 7
16.
Environmenta reports and stdies enabling BPWCP to determine that the Propert is free fiom
coptaination by toxic or hazdous substaces, except those occurg in the normal coure of the
Business. ' . ,
on the "as will be" appraised value ofthe Propert.
BPWCP's approval of
17.
Borrower shall obtain BPWCP's prior approval for each architect and consultat to be retained by Borrower in connection with the permitting and constrction of the Real Propert and Improvements, both the architect or consultant and also with respect with respect to the competency, reliabilty and solvency of to the terms of the retention agreement.
18.
An appraisal report by an BPWCP-approved appraiser confiing that, after considerig the Loan and any thd par financing secured by the Propert, Borrower wil have at least 20"10 equity in the Propert, based
site and sign plans for the Real Propert and the Improvements.
19.
ITEMS REQUIRD ON OR BEFORE LOAN FUDING:
20.
Copies of all governental approvals, licenses, and permits required in connection with the constrction and operation of the Improvements and the Business (including but not limited to an alcohol sales permit
acceptable to BPWCP).
21.
A commitment fiom a BPWCP-approved title company to issue an ALTA lender's policy of insurng that the Deed of
title insurance Trut encumbers the Real Propert in the position approved by BPWCP, subject
to exceptions approved in wrting by BPWCP.
22.
Insurce naming BPWCP as an additional insured with a 438 BFU endorsement, as follows:
a.
"All risk" casualty insurce insurg the Improvements againt loss or damage by fie or other
casualty in an amount equal to i 00 percent of the replacement value of the Improvements, with a deductible not exceeding $10,000 pe occurence; and
b.
Liability insurce.
23.
Borrower shall obtain BPWCP's prior approval for the general contrctor to be retained by Borrower in connection with the permitting and constction of the Real Propert and Improvements, both wit respect
to the competency, reliabilty and solvency of the general contrctor and also with respect to the terms of
the retention ageement
24.
Senior Ilen holder's wrtt approval of the Deed of Trust and UCC-I Financing Statement securg the
Loan in a form acceptable to BPWCP.
25.
The project architect must submit a complete set of projec drwings on computer ZIP disk in a form acceptable to BPWCP, (curntly AutoCAD, version 14) upon completion of the Improvements and
issuace of aU necess governental approvals.
26.
Oter: NONE
BPWCP,:i~ls
~f ~/
Borrøwer's initials
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EXHIBIT J
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
LOAN AGREEMENT (am/pm Mini Market)
This LOAN AGREEMENT (this "Agreement") is made and entered into as of f"~A ia , , 2007 by and between BP WEST COAST PRODUCTS LLC, a Delaware limited liability company (hereinafter referred to as "Lender"), and STTN
ENTERPRISE, INe., 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 wil 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 Lènder 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 wil operate an ARCO gasoline station on the
Propert (the "CD Agreement").
B. Lender and Borrower desire to provide for the tenns and conditions upon which Lender wil make available to Borrower a loan to fund the costs associated with pre-approved modifications and/or equipment and improvements to the Store.
Agreement
follows: '
In consideration of the mutual promises contained herein, Lender and Borrower agree as
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 pennitted under ths Agreement.
Amortization Amount: The tenn "Amortization Amount" is defined in Section 1.5.
Annual Guaranteed Amount:
The term "Anual Guaranteed Amount" means
$960,000.00.
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
Architect: The term "Architect" is defined in Section 2.1 (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 Official 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 wilingness to
make the Loan to Borrower.
Contract Year: The 12 month period beginnng on the first day of the first complete month following the BUsiness Open Date and each 12 month period thereafer. 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.l(h).
Deed of Trust: The term "Deed of Trust" means that certain Deed of Trust with
Assignment of Rents, Securty 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 forth in the Note.
Disbursement: The term "Disbursement" means a disbursement of Loan proceeds made
by Lender to or for the benefit of Borrower.
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 tbe Deed of Trust.
Engineer: The term "Engineer" is defined in Section 2.l(h).
Environmental Indemnity: The term "Environmental Indemnty" means tbat certain
Environmental Indemnity dated as of even herewith, executed by Borrower in favor of Lender.
Event of Default: The term "Èvent of Default" is defined in Section 4.
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
F'ictitious Deed of Trust:- The tenn "Fictitious Deed of Trust" is defined in the Deed of
Trust.
First Anniversary Date: The tenn "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 tenn "Improvements" shall have the meanmg set fort in the
Trust.
Indemnifed Costs: The tenn "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 attbutable to the gross negligence or willful misconduct of the par seeking to be indemnified.
Indemnified Parties: The tenn "Indemnfied Paries" means, collectively, Lender, its parent, subsidiary and affiliated companes, 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 affiliates, and the offcers, directors, employees and agents of each of them.
Loan: The tenn "Loan" is defined in Section 1.1.
Loan Documents: The tenn "Loan Documents" means the documents described in Exhibit "c" attached hereto, as the same may be amended, renewed or extended from time to
time.
Maturity Date: The tenn "Matuty Date" is defined in Section 1.4.
Note: The tenn "Note" means that certain Secured Promissory Note (arpm Mini
Market) of even date herewith, executed by.BoITower to the order of Lender, which evidences
the Loan.
Obligations: The tenn "Obligations" is defined in Section 1.4.
Pay Voucher: The tenn "Pay Voucher" shall have the meanng set fort in the
Disbursement Agreement.
Plans: The tenn "Plans" mean detailed plans and specifications for the Alterations.
Propert: The tenn "Property" is defmed in Recital A above.
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
Senior Lender: Omn Financial'
Senior Loan: That certain loan from Omni Financial to Borrower in the amount of $1,925,000.00
Senior Loan Documents: Those certain documents and agreements executed by
Borrower in favor of Senior Lender evidencing and securing the Senior 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 instrument
number 2003-0022960 in the Office 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
$300,000.00 evidenced by dated as instruent
number and recorded in the Offce of the San Benito Recorder.
Store: The tenn "Store" is defined in Recital A above.
Title Company:
Company.
The tenn "Title Company" means Commonwealth Land Title
Title Policy: The tenn "Title Policy" is defined in Section 2.l( d).
Transfer: The tenn "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 tenns 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 & Refubish Funds:
If as of the 11 th aniversary of the first disbursement under the Loan,
provided Borrower is not then in default under any of the tenns and conditions of the Loan 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 00/1 00 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-structural changes to the Improvements, such as, updating and retrofitting the inteiior of the Improvements to comply with Lender's then-curent visual and design standards and layout for
its ampm mini markets (the "Refresh Requirements"), 'including, but not limited to, new paint, , flooring, signage, installation of new fixtues, equipment, and the like (collectively, the "Refresh, . & Refubish"). The Refresh & Refubish Funds shall be used solely to finance the cost of the
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Facility Number: 82461/SCDB65975 Customer Account Number: 0996439
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 & Refurbish 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 Refresh & Refurbish Funds, the following conditions have the first disbursement of
been satisfied:
(a)
Loan Documents;
Borrower shall be in full compliance with the terms and conditions of the
(b) Borrower shall be in full compliance with the terms and conditions of the
CD Store Agreement and the CD Agreement;
(c) Lender has reviewed and approved the financial condition and management capabilities of Borrower, determined that the net cash flow from the Store is
sufficient to cover debt service, and approved the economic feasibility of
the Store;
the Refresh & Refurbish Funds has been approved by (d) The disbursement of Lender's appropriately authorized credit officers or committees;
(e) Borrower has provided to Lender (i) copies of all governental
approvals, licenses and permits 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 construction 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 purose whatsoever.
...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 ("Matutv 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 ths Agreement.
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
- - 1.5 - Arörtizatibn and Interest
Payments. Beginnng on the last day of the -first
Contract Year ("First Anversar Date") and continuing on each aniversary 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 Aniversary Date (such anual amount shall be referred to herein as the "Amortization Amount"). Notwithstanding 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 aniversary of the First Anversar 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 the Note) for the prior twelve (12) month interest on the Loan (at the rate set fort in Section 2 of
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 Repayment Though Store Sales. Notwthstanding anything to the contrary
contained in Section 1.5 above, if during 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 durng 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 during 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 will 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 will 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 futue Contract
Year.
the Loan as set forth in Section 1.6 shall not operate as a waiver of its right to collect or demand repayment of.
1.7. No Waiver. Lender's deemed repayment of any portion of
the Obligations upon the occurence of an Event of Default.
be evidenced by the Note. Lender shall record and endorse on the schedule forming a par of
1.8 Promissory Note. The obligation of the Borrower to repay the Loan shall the
Note appropriate notations to evidence (i) the date and amount of any Disbursement made by
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Lender, (ii) the date and amount of each payment of principal by the Borrower, and (i-ii) the date
and amount of any deemed repayment of any portion of the Loan by Lender pursuant to
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. not affect the obligations of
1.9 Audit Rights. So long as there are outstanding Obligations, Lender may, upon reasonable notice to Borrower, audit Borrower's books and records pertaiing to Gross
Sales. Borrower agrees to cooperate fully with such audit and, if such audit reveals an overreporting 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 ths Agreement, all conditions to such Disbursement set fort 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 uness 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 makng any subsequent Disbursements.
2.1 Loan Closing and First Disbursement. Lender shall not be required to
make the first Disbursement uness 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 Commitment Letter, including without limitation (i) satisfaction of the conditions set fort in paragraphs (a) though (e) on Page 1 of the Conditional Commitment Letter, (ii) Lei;der'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 Commtment Letter.
(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 wrtten confnnation from, the Title
Company that (i) the Deed of Trust and the other Loan Documents which are in recordable fonn 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 FiI1àncìhg-Statement which perfects Lender's securty interest in aU- 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 naming Lender as an additional insured, on an "occurence" basis against claims for "personal injur" liability, including bodily injur, death or propert damage liability, with a limit of not less than One Million Dollars ($1,000,000.00). Such insurance shall name Lender as an additional insured and shall be primar and non-contrbutory with any other
insurance cared by Lender.
(f) If required by Lender, Borrower shall have obtained perfonnance
and labor and material payment bonds in dual obligee foan covering the perfonnance of the
Contractor and such principal subcontractors for the Alterations as Lender may designate. The
teans 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 infoanation set fort in Borrower's
completed Enviromnental Questionnaire. If Lender so requires, Lender shall also have received
a report prepared by a licensed or registered environmental engineer or other qualified par
satisfactory to Lender stating that there are no Hazardous Substances, as defined in Section 1.5 of the Enviromnental Indemnty, present in, on, under or around the Propert, and that there is no
condition or circumstance which warants fuher 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 Permtted Uses of Loan proceeds, and (ii) copies of building peanits.
, U) Lender shall have received and approved (i) all contracts entered in
by Borrower with the Architect, Engineer and Contractor, respectively, (ii) an assignent of
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each such contraCt referred to clause (i)iIl favor of Lender, in form and
substance satisfactory to
Lender, together with an assignment of the Plans, and (iii) consents to each such assignment executed by the Architect, Engineer and Contractor, respectively, in form and substance
satisfactory to Lender. '
guarantor, the Store or the Propert. '
financial statements and other (k) Lender shall have received such financial information as it may require regarding the financial condition of Borrower, any
the due formation and good standing of Borrower and any guarantor, including such organzational docurents (including
, (1) Lender shall have received evidence of
parnership agreements, operating agreements, aricles of organzation 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
(b) For any reason the Title Company fails or refuses at Lender's
request to issue a CL T A Form 122 endorsement or its equivalent; or
(c) The Improvements are materially damaged and not repaired, unless Lender receives funds from Borrower or insurance proceeds sufficient to pay for all repairs in a timely maner; or
(d) The Property or any interest in it is afected 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 DocUIents, a default or Event of Default
(as defined in that document) has occured 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 par, in which case Lender will notify Borrower and Borrower will make
disbursement requests to and submit documentation for disbursements to. the thrd 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 through the thrd par fuding company wiU
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redeem thevoÙchers for ¡Jayment. Except as otherwise provided in the Disbursement
Agreement, loan proceeds shall be available for disbursement as follows: one-four of the loan
amount at the time Borrower obtains permits for construction; one-fourth 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-fourt 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 expenditue of loan proceeds, releases of mechancs liens, and/or additional
securty for the Loan as Lender may determine in its sole discretion. The third pary 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 construction of the Alterations, obtain a certificate of completion or a certificate of occupancy from the appropriate governental authority, and open for business (as' the determined by Lender) by not later than July 11,2007. Borrower's failure to observe any of
deadlines set forth in ths 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 workmanike maner 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 permits, 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.
(a) Lender and its agents and representatives shall have the right at
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 construction of the Alterations. In each instance,
Lender shall give Borrower reasonable notice before entering the Property. Lender shall make reasonable efforts to avoid interfering 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-.Lenderts rights and interests. No site visit, observation or examination by Lender shall impose any liability 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 constrction is' free from defective materials or workmanship, or that the
constrction complies with any other applicable law.
3.4 Protection Against Lien Claims. Borrower shall promptly payor
otherwise discharge all claims and liens for labor done and materials and services fushed in connection with the construction 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 Payment of Expenses. Borrower shall pay Lender's costs and expenses
incured in connection with the makg, 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), filing, 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 ths
Section are not included in any loan or commitment fees for the Loan.
3.6 Financial Infonnation. Borrower shall keep tre 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 durng 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:
(a) Any litigation affecting Borrower or any guarantor, where the
amount claimed is Fifty Thousand Dollars ($50,000) or more;
(b) Any communication, whether wrtten or oral, that Borrower may
receive from any governental, judicial or legal authority, giving notice of any claim or assertion that the Store, the Propert or any Alterations fail in any respect to comply with any
applicable governental
law;
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(c) Any default by the ProJect Manger, 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 Perfonnance of Acts. Upon request by Lender, Borrower shall perfonn all acts which may be necessar or advisable to perfect any lien or securty interest provided for in the Loan Docwnents or to cary out the intent of the Loan Docwnents.
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 ths Agreement and the
Disbursement Agreement shall be issued by companes approved by Lender having a minimum
A.M. Best's rating of A:IX. The limits, coverage, fonns, deductibles, inception and expiration dates and cancellation prov,isions of all such policies shall be acceptable to Lender. In addition, each required property insurance policy shall contain a Lender's Loss Payable Fonn (Fonn 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 approyal by Lender is not, and shall not be deemed to be, a representation of the solvency of any insurer or the sufficiency 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
thirt (30) days' prior wrtten notice to Lender. When any required insurance policy expires,
Borrower shall fuish 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 furish Lender with evidence satisfactory to Lender that all premiwns for
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such policy have been paid Within thirt (30) days of renewahx issuane. 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 Trust
and which shall not be subject to deemed repayment in accordance With Section 1.6 above.
3.11 Processing Fee. Borrower shall pay to Lender upon execution of this Agreement by Borrower a processing fee in the amount of $1 0,000.
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 par without the prior wrtten consent of Lender: or
4.2 The Borrower assigns the CD Store Agreement to a thrd pary without the
prior wrtten consent of Lender; or
4.3 The Borrower fails to observe any of the deadlines set fort in Section 3.1
above or, afer 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
within five (5) business days after 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 thrt (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 ths Agreement, or
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in tOl1ection with the making of any Disbursement, shall.
prove to-have been incorrect, untrue or
misleading in any material respect when made;
4.10 A default or "Event of Default" shall have occured under any of the other Loan Documents; or
4.11 Loan Documents; or
There shall occur a default or event of default under any of the Senior
4.12 The Borrower shall fail to pay when due the principal of or interest on any
other indebtedness secured by the Property, or there shall occur any other event that would
pennit 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 assignent 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 trustee 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 tenninated.
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 par of the Obligations to be forthwith due and payable, without presentation,
demand, protest or notice of any kind, all of
which are hereby expressly waived by the Borrower;
or (ii) tenninate any obligation of Lender hereunder to make fuher 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 en,ter and take possessìon of the Propert, whether in person, by agent or by cour-
appointed receiver, and to take any and all actions which Lender in its sole discretion may
consider necessar to complete constrction of the Alterations, including makng changes in the
Plans, work or materials and entering into, modifying or tenninating any contractual.
arangements, all subject to Lender's right at any time to discontinue any work without liabilitY. ' '
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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 constrction of the Alterations, and Borrower expressly waives any such liability. If Lender exercises any of the rights or remedies provided in this subparagraph, that exercise shall not make Lender, or cause Lender to be deemed to be, a parner 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 purposes of detennining 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 though the last day of the calendar month
immediately preceding the occurrence of the Event of Default. For example if the CD Store Agreement is tenninated by Borrower on May 15,2005 and the current Contract Year expires
through April 30, 2005 and compare such total to the Anual Guaranteed Amount. If Sales durng such period equal 33% of balance of
December 31, 2005, Lender will calculate total Gross Sales durng the period Januar 1, 2005 total Gross
the Anual Guaranteed Amount, the outstanding principal
the anual principal reduction
the Loan will be reduced by an amount equal to 33% of
payment due for that Contract Year (detennined in accordance with Section 1.6 above).
6. Interest and Late' Charges. 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 will be extremely difficult to ascertain. Accordingly, if any payyent 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 amollt. 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 ths 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 nght to require consent to
futue or successive Transfers. 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 tle Loan
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and therein, and Lender may require that Borrower pay to Lender an assumption fee in the amount of five percent (5%)
Documents and agree to be bound by all provisions contained herein
of the remaining balance of the unamortized Loan. Such assumption shall not, however, release
Lender. As used herein, "Transfer" shall mean: '
(a) any sale, transfer, conveyance, hypothecation, encumbrance or lease of
Borrower or any guarantor from any liability to Lender without the prior wrtten consent of
the
Propert or any par thereof or interest therein to any person or entity, whether voluntar, involuntar, by operation of law, or otherwise (except for any deed of trust executed in favor of EGlin connection with the Citicorp Loan);
(b) any change of control in Borrower if, withn thirt (30) days after such
change of control, Borrower has not paid in full all Obligations mean the ability to direct the day to day management of
("control" as used herein shall
the affairs of 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 oflaw or otherwse); or
(d)
any sale, lease or other disposal of all or substantially all of Borrower's
assets.
8. Indemnitv Reeardine Construction and Other Risks. Borrower indemnifies,
defends and holds the Indemnfied 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
requirements of any laws, regulations, recorded covenants, maps, pennits or other entitlements
that apply or pertain to the Propert; or breach of any representation or waranty 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 Indemnfied Pary 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 pennitted 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 deliv~ry, addressed as follows:
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Facility Number: 824611SCDB65975 Customer Account Number: 0996439
(a)
If to the Borrower: - - ,
STTN Enterprises, Inc.
631 San Felipe Rd.
Hollister, CA 05035
Attention: Nazim Faquiryan
Sayed Faquiryan
Facsimile No.:
(b)
If to Lender:
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 confrmation of receipt), or (ii) three 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. Ths 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.
accordance with the laws of
9.4 Governing Law. This Agreement shall be governed by and construed in Californa. the State of
9.5 Severability. If any provision of ths Agreement is declared invalid, such
decision shall not affect ~e 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 Assignent. 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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the other Loan Documents. B6ITower 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 ths 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 par 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 othervise 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 ths Agreement on the date first
above wrtten.
STTN ENTERPRISES, INC.,
a California corporation
B~\
BP WEST COAST PRODUCTS LLC, a Delaware limited liabilty company
By
Name: Nazim S.M. Faquiryan
Title: CEO/President
Title: Vice President
BY~~
Name: Sayed M.N. Faquiryan
Title: Secretary rlteasurer
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EXHIBIT A.,
Loans may only be used for ampm store-related image and equipment-baseq improvements; the
types of qualifying expenditu