EXHIBIT 4-D
INTERCREDITOR AGREEMENT
TABLE OF CONTENTS
1.REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE FRANCHISEE AND GUARANTORS
2.REPRESENTATIONS, WARRANTIES AND COVENANTS OF BKC
3.REPRESENTATIONS, WARRANTIES AND COVENANTS OF LENDER
4. DEFAULT UNDER THE LOAN AGREEMENTS
4.1 Notice to BKC of Default
4.2 Notice to BKC of Intent to Foreclose
5. REMEDIES UNDER LOAN DOCUMENTS
5.1 Limits on Security Interest and Collateral Assignment
(a) Security Interest
(b) Collateral Assignment
5.2 Review Meeting
5.3 Pre-Conditions to Exercise of Remedies
(a) Control and Dominion
(b) Right of First Refusal; Right of Approval
(c) Payment of Amounts Past Due to BKC
(d) Payment of Other Amounts Due to BKC
5.4 Management of Restaurants
(a) BKC Management
(b) Continued Operation by Franchisees or Another BKC Licensee
(c) Election
5.5 Disposition of Restaurants
(a)Sale Within Twelve Months
(b) Terms of Sale; Bundling of Collateral
(c) BKC Approval of Buyer
(d) Consent of New BKL Landlord
(e) No Other Sale
(f) Termination of Affected Franchise Agreements
(g) Lender's Rights
6. BKL LEASES
6.1 Assignment
7. DEFAULT UNDER FRANCHISE AGREEMENTS AND BKL LEASES
7.1 Notice to Lender of Default
7.2 Lender's Opportunity to Cure Monetary Default
7.3 Lender's Opportunity to Cure Non-Monetary Default
7.4 BKC Right to Close
8. ASSIGNMENT
9. BREACH OF CONTRACT; EQUITABLE REMEDIES
10. TERM OF AGREEMENT
11. CONSENT AND ACKNOWLEDGMENT OF COMMERCIALLY REASONABLE TERMS
11.1 Acknowledgments
11.2 Consent to Terms of Sale
12. GENERAL RELEASE
13. RIGHTOF AUDIT
14. CAPTION HEADINGS
15. NOTICES
16. CHOICE OF LAW; JURISDICTION AND VENUE
17. NO AMENDMENTS
17.1 This Agreement
17.2 Franchise Agreements
18. INTEGRATION
19. BINDING EFFECT
20. TITLES
21. SEVERABILITY
22. CONSTRUCTION OF AGREEMENT
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT
("Agreement") dated as
of the ________ day of
July, 1999, and effective
as of May 11, 1999, by
and among BURGER KING
CORPORATION ("BKC"), the
individual, individuals,
entity and/or entities
set forth on Schedule A
hereto (individually, a
"Franchisee" and collectively, the
"Franchisees"), and the
individual, individuals,
entity and/or entities
set forth on Schedule B
hereto ("Guarantor"), and
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as
Administrative Agent for
the Banks, as defined in the Third
Amended and Restated
Revolving Credit Agreement, NBD BANK, N.A.,
as Documentation Agent for
the Banks, and NATIONSBANK, N.A. (SOUTH)
in its capacity as Co
Agent for the Banks, and
the Banks (collectively, the "Lender").
WHEREAS, certain Burger King(R) restaurants
identified by BKC store number and address on
Schedule C hereto (individually, a
"Restaurant" and collectively, the
"Restaurants") are operated by the
Franchisees pursuant to franchise agreements
(individually, a "Franchise Agreement" and
collectively, the "Franchise Agreements")
issued by BKC;
WHEREAS, certain of the Restaurants are located
on real property (individually, a "BKL
Property" and collectively, the "BKL
Properties") currently leased to the Franchisees
pursuant to certain lease/sublease agreements
with BKC, as lessor (individually, a "BKL
Lease" and collectively, the "BKL Leases");
WHEREAS, the Guarantor is the owner of all of
the outstanding equity interests in the
Franchisee (the "Equity Interests");
WHEREAS, the Guarantor has guaranteed payment and
performance of all of the Franchisees' debts and
obligations to BKC pursuant to certain
agreements of guaranty (the "Guaranties") as
detailed on Schedule C hereto;
WHEREAS, the Guarantor has contemporaneously
herewith entered into a loan agreement and
certain related documents (collectively, the "Loan
Documents"), including one or more promissory
notes payable to the Lender in the original
principal amount of __________________________
______ ($__________).
WHEREAS, the Franchisees and Guarantor have
requested that BKC consent to, among other
things, a security interest in the
Franchise Agreements, all as provided in the Loan
Documents; and
WHEREAS, BKC has agreed to consent to this request
subject to and in consideration of the
covenants, terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the
mutual covenants and conditions contained
herein, the parties hereto agree as follows:
1. REPRESENTATIONS, WARRANTIES AND COVENANTS
OF THE FRANCHISEE AND GUARANTOR.
1.1 Each Franchisee and Guarantor represents
and warrants that (i) each of the Franchise
Agreements and BKL Leases are in full force and
effect; (ii) to the best of their knowledge, there
are no material defaults by BKC under any of the
Franchise Agreements or BKL Leases and no event
has occurred which, with the passage of time or
the giving of notice, would constitute a
material default by BKC under any of the
Franchise Agreements or BKL Leases; (iii) they
will continue to perform all obligations
under those agreements; and (iv) the obligations
of the Guarantor under the Guaranties are unaffected
by this Agreement.
1.2 Except as
expressly provided herein, each
Franchisee represents and
warrants to BKC that it
shall continue to comply
with the terms and
conditions of the
Franchise Agreements, BKL
Leases, and any other
agreement with BKC,
including the limitation
that it shall not sell,
assign, pledge, encumber,
or otherwise transfer any
interest in such
agreements.
1.3 Each Guarantor
represents and warrants
that it shall not sell,
assign, pledge, encumber
or otherwise transfer any
legal or beneficial interest in its
Equity Interests in the
Franchisees in violation
of the terms of the
Franchise Agreements or
any other agreement with BKC.
1.4 In the event that
Guarantor is an entity
(an "Entity") whose equity
is wholly or partially
owned by another
Guarantor (an "Owner"),
each such Owner hereby
agrees and reaffirms that
he shall not sell, assign,
pledge, encumber or
otherwise transfer any
legal or beneficial
interest in the Entity in
violation of the terms of the
Franchise Agreements or
any other agreement
with BKC.
1.5 Franchisees and
Guarantor each acknowledge and agree
that this Agreement and
the consent contained
herein shall not apply
to the Equity Interests
or BKL Leases.
Franchisees and Guarantor
each warrant and
represent to BKC that no
interest of the Guarantor
in the Equity Interests
or BKL Leases shall
be collateralized, pledged
or otherwise subjected to
the terms and conditions
of the Loan Documents.
2. REPRESENTATIONS, WARRANTIES AND
COVENANTS OF BKC BKC hereby represents
and warrants as follows:
2.1 That the guaranteed
minimum annual rent as defined in the BKL Leases
are paid in full as oF July 1, 1999, with the
exception of the outstanding amounts
reflected on the attached Schedule D.
2.2 That the royalty and advertising charges
as defined under the Franchise Agreements are
paid in full as of June 30, 1999.
2.3 Within the thirty (30) days prior to the
date of this Agreement, BKC has not sent
Franchisees a written notice of default under
the Franchise Agreements or BKL Leases.
2.4 BKC makes no warranties or
representations except as
expressly set forth above.
Without limiting the foregoing, BKC has
made no investigation as to any defaults or
breaches of the Franchise Agreements or BKL Leases
nor inspection of any of the Restaurants except as
expressly set forth above.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LENDER.
Lender hereby represents and warrants as follows:
3.1 Lender's rights under the Loan
Documents to realize on the collateral described in
Section 5 of this Agreement shall be and
are hereby expressly made, subject to the
covenants, conditions and restrictions contained in
this Agreement.
3.2 Except as expressly provided herein, Lender
has and will acquire no right, title, security
interest, pledge or other right in, to or
against any BKL Lease, any BKL Property, or the
Equity Interests by virtue of the Loan Documents,
this Agreement, or any other agreement.
4. DEFAULT UNDER THE LOAN DOCUMENTS
4.1 Notice to BKC of Default.
In the event Lender delivers a notice of default or
demand for payment under any of the Loan Documents,
Lender shall also give simultaneous written
notice of such default or demand to BKC (a "Loan
Default Notice"). The Loan Default Notice shall
specify the exact default(s) and any
applicable grace period. In the event that such
default(s) are cured within any applicable
grace period, Lender shall also deliver written notice to
BKC that the default(s) are cured.
4.2 Notice to BKC of Intent to Foreclose.
In the event Franchisees fail to timely and properly
cure the default(s) set forth in the Loan Default
Notice, Lender shall deliver fourteen (14) days
prior written notice to BKC and the Franchisees as
a condition precedent to the exercise of its
rights and remedies under the Loan Documents and
this Agreement (the "Foreclosure Notice").
5. REMEDIES UNDER LOAN DOCUMENTS.
The Lender's rights and
remedies under the Loan
Documents shall be limited
in the following manner.
5.1 Limits on Security Interest and Collateral Assignment.
(a) Security Interest.
Notwithstanding anything
in the Loan Documents to
the contrary, the parties
to this Agreement agree
that: (i) no security
interest granted to the
Lender shall apply to
the Equity Interests, and
(ii) any security
interest in the
Franchise Agreements shall
be limited to a security
interest in the proceeds
of a private sale of the
Franchisees' rights under
the Franchise Agreements
pursuant to the terms and
conditions of Section 9-
504 of the Uniform
Commercial Code as in
effect from time to time
in the State in which
the individual Restaurant
is located (the "UCC"),
and the Lender shall have
no right to conduct a
public sale or retain
the Franchisees' rights
under any Franchise
Agreement in satisfaction of the loan
as contemplated by Section
9-505 of the UCC.
(b) Collateral Assignment.
Notwithstanding anything
in the Loan Documents to
the contrary, the parties
to this Agreement agree
that the Franchisees'
tenancy rights under any
BKL Lease may not be
collaterally assigned to
the Lender.
5.2 Review Meeting.
Upon receipt by BKC of a
Foreclosure Notice, Lender
and BKC shall exercise
their best efforts to
meet within fourteen (14)
days at a mutually
agreed site, for the
purpose of reviewing
the Restaurants and the
desirability of the
application of this
Agreement to each such
Restaurant (the "Review
Meeting"). At the time of
the Review Meeting, upon
the mutual agreement of
BKC and Lender, any
Restaurant may be
excluded from the
provisions of this
Agreement and, thereafter,
the Lender shall
immediately release its
security interest in the
Franchise Agreement for
each such Restaurant.
Thereafter, BKC shall be
free to exercise its
rights and remedies under
the Franchise Agreement
and BKL Lease, if any, for each such
Restaurant as provided therein
and the Lender shall be free to
exercise its rights against any
remaining collateral at the
relevant Restaurant site without
reference to this Agreement. All
Restaurants which shall continue to
be subject to the provisions of
this Agreement after the Review
Meeting shall be referred to
hereinafter individually as an
"Affected Restaurant" and
collectively as the "Affected
Restaurants." The Franchise Agreements relating
to such Affected Restaurants shall
be referred to hereinafter
individually as an "Affected
Franchise Agreement" and
collectively as the "Affected
Franchise Agreements." The BKL
Leases relating to such Affected
Restaurants shall be referred to
hereinafter individually as an
"Affected BKL Lease" and
collectively as the "Affected BKL
Leases." If the Review Meeting does
not take place, then all of the
Restaurants shall be deemed
Affected Restaurants.
5.3 Pre-Conditions to Exercise of
Remedies. The exercise by the
Lender of its right to force an
assignment or sale of the
Franchisees' rights and
obligations under the Affected Franchise Agreements
shall be subject to the following
terms and conditions precedent:
(a) Control and Dominion. The
Lender must take possession of
and acquire control and
dominion over substantially all of
the tangible real and personal
property of the Franchisees
delivered as collateral under the
Loan Documents, whether by
exercise of the Lender's rights
under the Loan Documents or by
agreement with the Franchisees.
(b) Right of First Refusal;
Right of Approval. Any transfer
of the Affected Franchise
Agreements must be made subject
to and in accordance with BKC's
rights under the Affected Franchise
Agreements, including, but not
limited to, (i) BKC's right of
first refusal to purchase any or
all of the Affected Restaurants and
the real property and furniture,
fixtures and equipment associated
therewith and located therein, and
(ii) BKC's right to approve the
sale, transfer and proposed
transferee of the Affected
Franchise Agreements and Affected
Restaurants.
(c) Payment of Amounts Past Due
to BKC. Lender's timely payment
to BKC pursuant to Section 7.2 hereof
of all sums past due and owing to BKC
under each of the Affected Franchise
Agreements and any Affected BKL
Lease covering the premises of any
Affected Restaurants, as well as
those past due sums related to
products or supplies sold by BKC for use in
the Affected Restaurants, including
without limitation, any pre and
post-petition amounts due from any
Franchisee who is the subject of
a proceeding under the United
States Bankruptcy Code or any
similar law affecting the rights
of creditors generally.
(d) Payment of Other Amounts Due
to BKC. Lender's timely payment to
BKC when due of (i) all sums which
become due to BKC under the
Affected Franchise Agreements and
Affected BKL Leases in connection
with operation of the Affected
Restaurants during the term of this
Agreement, and (ii) all sums
which become due to BKC in
connection with products or
supplies sold by BKC during the
term of this Agreement for use in
the Affected Restaurants. Without limiting the
foregoing, it is expressly
understood that Lender must pay
all post-petition amounts due from
a Franchisee which is the subject
of a proceeding under the United
States Bankruptcy Code, or any
similar law affecting the rights
of creditors generally, when due
under the terms of the
Affected Franchise Agreement or
Affected BKL Lease, without
reference to any right of such
Franchisee to defer such payment pending
assumption of those agreements or
for any other reason.
5.4 Management of Restaurants.
After receipt by BKC of a Foreclosure Notice and the
satisfaction by the Lender of the requirements of
Section 5.3(a) above (the "Realization
Date"), the Affected Restaurants
shall be managed and operated in
the following manner:
(a) BKC Management. BKC shall
have the initial right, but not
the obligation, to assume the
operation of some or all of
the Affected Restaurants under
a management agreement (a
"Management Agreement") in form
and content reasonably acceptable to
counsel for BKC and Lender for a
period of time up to (i) the date on
which any such Affected Restaurant
is sold by Lender to a third party
or to BKC pursuant to this Agreement,
(ii) the expiration date of the Affected Franchise
Agreements and Affected BKL
Leases, or (iii) expiration of the Sale
Period (as defined below),
whichever is earlier (the
"Management Period"). In return for
operating the Affected Restaurants,
the Management Agreement shall
include, at a minimum and in
addition to such other terms as
BKC may require pursuant to the
preceding sentence, all of the
following:
(1) A management fee in an amount
equal to a percentage of monthly
Gross Sales (as defined in the
Franchise Agreements) generated at
each Affected Restaurant operated by
BKC, which percentage figure shall
be the greater of ten percent (10%)
or the then current percentage rate
charged for comparable management
services in a similar factual
situation, if any (factors
to be considered in determining
the applicable percentage rate to be
charged are the number, location
and size of the Restaurants
to be operated by BKC);
(2) The option of expending two
and one-half percent (2.5%) of
monthly Gross Sales generated at
each such Restaurant for local
marketing, in addition to the
four percent (4%) advertising
contribution to be paid under the
Affected Franchise Agreement for
each Affected Restaurant;
(3) The option of expending, out of
the Gross Sales for each Affected
Restaurant, up to $25,000.00 per
year for (i) repairs and
maintenance and/or (ii)
alterations necessary to conform the
Affected Restaurant to the
then current image for Burger
Kingr restaurants; and
(4) The right to replace or add
additional signs and/or equipment
to each Affected Restaurant as it
becomes necessary to conform with
menu or operational changes
required by BKC to be implemented
at such time. The cost for any such replacement
or additional equipment will be paid
out of the Gross Sales generated
at all of the Affected Restaurants.
(b) Continued Operation By Franchisees or Another BKC Licensee.
In the event that BKC elects not to manage
the Affected Restaurants as provided above, BKC
shall, in its sole discretion,
either: (a) approve Franchisees to
continue to operate any or
all of the Affected Restaurants
during the Management Period or (b)
approve one or more multi-unit
BKC licensees reasonably
acceptable to BKC and Lender to
supervise the operation of any or
all of the Affected Restaurants during
such period, pursuant to a management agreement
reasonably acceptable to such
licensee, BKC and Lender. BKC will,
as a courtesy only, assist the
Lender in identifying any such BKC
licensees, but shall owe no legal
obligation or duty to the Lender
in this regard and shall have no
liability to the Lender for any
failure to so assist the
Lender. If Franchisee and/or an
approved BKC licensee(s), if any,
are approved to operate
the Affected Restaurants during
such period, such Restaurants
shall be operated pursuant to the terms
of the corresponding Affected
Franchise Agreements.
(c) Election. BKC shall exercise
its option to operate the Affected
Restaurants pursuant to Section
5.4(a) above or designate the
Franchisee or another entity to
operate the Affected
Restaurants pursuant to Section
5.4(b) above, by delivering
written notice thereof to the
Lender within fourteen (14)
days following the Realization Date
(the "Management Election Notice").
If BKC does not deliver a
Management Election Notice, BKC
shall be deemed to have elected to have
the Franchisees continue to operate
the Affected Restaurants pursuant
to Section 5.4(b).
5.5 Disposition of Restaurants.
Any sale, transfer or assignment of
the Affected Franchise Agreements
or Affected BKL Leases by the
Lender shall be subject to the
provisions of Section 5.3 and the
following conditions. (a) Sale Within
Twelve Months. At any time after its
receipt of the Foreclosure Notice, BKC
may deliver written notice (the "Notice to
Sell") to the Lender dictating that
the Lender shall have twelve (12)
months from receipt of the Notice
to Sell to sell and transfer by
private sale one or more of the
Affected Restaurants and Affected
Franchise Agreements, together with
all of the real and personal
property associated therewith,
pursuant to the terms of this
Agreement and the Affected
Franchise Agreement. Provided,
however, that if Lender is
utilizing its best efforts to lift
or remove any stay or
judicial or statutory impediment
imposed on the sale of an
Affected Restaurant, the twelve (12)
month period shall not commence, or
if it has commenced it shall be
tolled, during any period when
Lender is prevented from selling
such Affected Restaurant or Affected
Agreement by reason of the filing
by Franchisees of a petition for
relief under the United States
Bankruptcy Code or by reason of any
federal, state or local law or any
other order of a court of
competent jurisdiction
preventing the sale of any such
Restaurant. This twelve (12) month
period, together with any extension
(as provided above), is herein
referred to as the "Sale Period."
(b) Terms of Sale; Bundling ofCollateral.
During the Sale Period, the Lender shall "bundle"
the real property interest (whether a fee
or leasehold) and the personal
property used in connection with
the operation of each Affected
Restaurant, together with the
Affected Franchise Agreement, in
order to require that any proposed
asset sale by Lender of such
Affected Restaurant include the
Affected Franchise Agreements and
real property interest, furniture,
fixtures, equipment and other
personalty necessary to maintain
the operational integrity of each
Affected Restaurant. While each
Affected Restaurant must be sold
in this manner, the Lender is free
to sell each Affected Restaurant
separately or in groups, subject
only to its obligation (as limited
by the provisions of Section 11
below) to act in a commercially
reasonable manner.
(c) BKC Approval of Buyer.
Any purchaser(s) must be acceptable to
BKC and satisfy BKC's then current standards for
receiving approval to acquire an
interest in a Burger Kingr
restaurant. Lender, Franchisee,
and Guarantor acknowledge, agree,
and understand that (i) the
requirements defining acceptable
purchasers and for approving
prospective BKC franchisees or the
requests for existing franchisees
to develop, operate or acquire an
interest in additional Burger Kingr
restaurants are subject to change by
BKC, in its sole discretion, and
(ii) any disapproval by BKC due to
the failure of any prospective
purchaser or franchisee to meet
such requirements shall be deemed
a reasonable action by BKC unless BKC has
applied its criteria in a bad faith
effort to harm the financial
interests of the Lender. BKC agrees
to cooperate with Lender in the
latter's efforts to find an
acceptable purchaser(s) for the
Affected Restaurants, but has no
obligation to locate buyer(s).
Lender agrees to sell or assign the
Affected Restaurants and Affected
Franchise Agreements by private sale
only, and not by public sale or
auction.
(d) Consent of New BKL Landlord.
In the event that BKC sells,
transfers, assigns, mortgages, or
pledges its interest in a BKL
Property or BKL Lease to a third
party (a "New Landlord") as
provided in Section 6.1(c) below,
Lender shall, in addition to
satisfying all of the other
conditions set forth in this Section
5.5, obtain the prior written
consent (a "Landlord Consent") of
the New Landlord before transferring
the Franchisees' rights under an
Affected Franchise Agreement to a
third party.
(e) No Other Sale.
Any transfer, sale, conveyance or
assignment made in violation of the
terms of Section 5.5 above shall
constitute a material breach of
this Agreement by Lender and BKC
shall be entitled to any and all
remedies permitted by law or
equity, including injunctive
reliefto enjoin any
such unauthorized sale, transfer,
conveyance or assignment.
(f) Termination of Affected Franchise Agreements and BKL Leases.
(i) Subject to the provisions of
Sections 6.1(c) and 7 of this
Agreement, BKC agrees to not
terminate any of the Affected
Franchise Agreements or Affected
BKL Leases during the Sale
Period if Lender complies with
the terms and conditions of
this Agreement and each and every one of the
Affected Franchise Agreements and Affected
BKL Leases, including, but not limited to, operational
standards and all payment obligations for
royalties, advertising and rent.
(ii) In the event the Affected
Restaurants and related Affected
Franchise Agreements and Affected
BKL Leases are not sold and
transferred within the Sale Period
applicable to each of them, BKC
shall have the subsequent right to
terminate the unsold and
untransferred Affected Franchise
Agreements and Affected BKL Leases
upon delivery of thirty (30) days
prior written notice to Lender and
the Franchisees. (iii)In the event
that the Lender or the Franchisees fail to
meet any other condition or
obligation under this Agreement
or any of the Affected Franchise
Agreements or Affected BKL Leases,
including without limitation the
obligation to pay when due all
amounts payable under the Affected
Franchise Agreements and Affected
BKL Leases as a group for the full
term of this Agreement, BKC shall have the
subsequent right to terminate any
then unsold and untransferred
Affected Franchise Agreement and
Affected BKL Lease upon delivery
of thirty (30) days prior written
notice to Lender and the Franchisees.
(iv) Upon termination of any or all
of the Affected Franchise
Agreements or Affected BKL Leases,
(x) Lender's security interest in
the relevant Affected Franchise Agreement
shall automatically terminate and
be of no further force and
effect, (y) Lender shall execute
and file relevant termination
statements as required by law or
requested by the Franchisees or BKC,
and (z) Lender shall comply with
all post termination covenant
contained in such Franchise
Agreements and BKL Leases,
including, but not limited to,
making at its own expense such
removals or changes in signs and
the Restaurant buildings and
premises as BKC shall request
so as to effectively distinguish
the Restaurant buildings and premises
from their former appearance and
from any other Burger Kingr
restaurant. It is expressly
understood, however, that nothing in
this Agreement shall obligate the
Lender to compensate BKC for
amounts due to BKC which have
not yet accrued at the time of
termination. (g) Lender's Rights.
Upon termination of the Lender's
security interest in any of the
Franchise Agreements, whether
pursuant to the provisions of
Sections 5.2 or 5.5(f)
hereof, or otherwise, the Lender
shall be free to exercise its
rights against its remaining
collateral relating to the
corresponding Restaurant pursuant to
the terms of the Loan Documents
and without reference to this
Agreement.
6. BKL LEASES
6.1 Assignment. For so long as
BKC remains the owner or lessee of
the BKL Property subject to any BKL
Lease, BKC agrees as follows:
(a) In the event that the
Lender (i) acquires control and
dominion over the tangible personal
property used in connection with the
operation of the Restaurant which is subject to
the BKL Lease, (ii) such Restaurant
is designated as an Affected
Restaurant, (iii) all obligations
due under the BKL Lease are paid and
performed in full when due, and
(iv) the Lender meets all of its
obligations under Section 5.3
hereof, then BKC agrees that the
manager appointed pursuant to the
terms of Section 5.4 shall have
the right to occupy the BKL Property on the same
terms and conditions as the
Franchisees, and that BKC shall not
terminate the BKL Lease until
expiration of the relevant Sale
Period.
(b) In the event that
(i) all of the conditions set forth
in Section 6.1(a) are met
and (ii) BKC approves an
assignment of the Affected
Franchise Agreement relating to
the Affected Restaurant operated on
the BKL Property, then BKC shall
also consent to the assignment of
the Affected BKL Lease to the same
assignee.
(c) Notwithstanding anything in
this Agreement to the contrary,
it is expressly understood that
BKC remains free to sell any BKL
Property and assign its
rights under any BKL Lease at any
time, and the terms of this
Agreement and this Section 6
shall not apply to, restrict, or
obligate any such buyer or assignee.
7.DEFAULT UNDER FRANCHISE AGREEMENTS AND BKL LEASES
7.1 Notice to Lender of Default.
In the event BKC delivers a notice of
default under any of the Franchise
Agreements or BKL Leases (a
"Contract Default Notice") , BKC
shall simultaneously deliver a
copy of the Contract Default
Notice to Lender. In the event the
default(s) set forth in the Contract
Default Notice are subject to an
applicable grace period, BKC shall
also deliver notice in writing
to Lender that such default(s)
have or have not been cured within
such cure period (the "Cure Notice").
7.2 Lender's Opportunity to Cure Monetary Default.
(a) In the event Franchisees fail
to cure a monetary default under any
Franchise Agreement or BKL Lease
(a "Payment Default") within any
applicable grace period, BKC agrees
that Lender shall have the right to
cure the Payment Default within
five (5) calendar days
after Lender receives its copy
of the Cure Notice. In the event Lender
elects not to cure any such Payment Default, then
BKC may immediately terminate the
related Franchise Agreement and BKL
Lease, if any, without further
notice or opportunity to cure and
pursue any and all remedies
permitted thereunder and by law.
(b) Notwithstanding the foregoing,
if (i) Lender should exercise the
right to cure Payment Defaults three
(3) consecutive calendar months, or
to cure Payment Defaults in an
aggregate of six (6) calendar
months, and (ii) Lender fails to
contemporaneously after such last default
contemplated above deliver a
Foreclosure Notice and file and
diligently pursue an action to
foreclose on assets pledged to it
under the Loan Documents, then
BKC may terminate the related
Franchise Agreement and BKL Lease,
if any.
7.3 Lender's Opportunity To Cure NonMonetary Default.
(a) In the event Franchisees fail
to cure a non monetary default under
any Franchise Agreement or BKL Lease
(a "Non-Monetary Default") within
any applicable cure period, Lender
shall have thirty (30) days after
receipt of the Cure Notice to
deliver a Foreclosure Notice.
This thirty (30) day period is
hereinafter be referred to as the
"Election Period."
(b) In the event of the occurrence
of a non curable, Non-Monetary
Default, the Election Period shall
commence on Lender's receipt of the
Contract Default Notice.
(c) Franchisees, Guarantor, and
Lender agree that during the
Election Period BKC shall have the
right, but not the obligation,
in its sole discretion, to: (i) take such
necessary actions to abate and cure
the Non-Monetary Default(s) under
the Franchise Agreements which
actions shall include, but not
be limited to, temporarily closing any of the
Restaurants affected by such
default(s) due to health reasons
or other emergencies (as provided
in Section 7.4 below herein);
removing from such Restaurants
those products, signs, equipment
or other materials which are not
approved by BKC; and taking such
other actions which BKC deems necessary in
order to mitigate damage to BKC
and its trademarks and/or (ii)
supervise the operation of such
Restaurants pursuant to a
temporary Management Agreement which
shall include the terms set forth
in Section 5.4(a) herein.
Franchisees, Guarantor, and Lender
acknowledge and agree that monetary
damages will be inadequate to remedy
the damage caused to BKC in the
event a material Non Monetary
Default under any of the
Franchise Agreements remains
uncured. Accordingly,
BKC shall be entitled to injunctive
relief, including, but not limited
to, a temporary restraining order,
issued by a court of competent
jurisdiction in order to enforce
its rights specified in this
Section 7.3(c).
(d) In the event Lender fails to
notify BKC of its election within
the Election Period pursuant to
said Section 7.3(a) or
fails to diligently pursue its
remedies against the relevant
Affected Franchise Agreement or
Affected BKL Lease, then BKC may
immediately terminate the relevant
Franchise Agreement and BKL Lease
affected by the defaults without
further notice or opportunity to
cure and pursue any and all
remedies permitted thereunder and
by law without further notice to Lender.
7.4 BKC Right to Close.
Notwithstanding the foregoing
provisions of Section 7.3, BKC
shall have the right to immediately
close, without prior notice or any
opportunity to cure, any of the
Restaurants which BKC deems, in its
sole discretion, necessary due to
reasons of public health and safety
or due to an emergency.
8. ASSIGNMENT
8.1 Franchisees may not assign
or transfer its interest in this
Agreement without the written
consent of the other parties
hereto. BKC or Lender may assign
their respective interests herein
without the consent of any party
hereto.
9. BREACH OF CONTRACT; EQUITABLE REMEDIES
9.1 In the event any party shall
breach the terms of this
Agreement, any other party hereto
may declare a breach and pursue
any remedy available at law or in
equity. It is expressly understood and agreed
that monetary damages may be
inadequate to remedy a material
breach of this Agreement and that
injunctive relief may be granted
by a court of competent
jurisdiction. Further, in light of
the nature of this Agreement and
the potential need for BKC to take
prompt action to abate a dangerous condition
and/or mitigate the damage to its
trademarks and service marks, in the
event of default by any of the
parties hereunder or by Franchisees
under the Franchise Agreements, if a
court orders BKC to post a bond as
a condition to the entry of an
order for injunctive relief, the
parties jointly and severally agree
that such bond shall be in
a nominal amount of money not to
exceed FIVE THOUSAND AND NO/100
DOLLARS ($5,000.00).
10. TERM OF AGREEMENT
10.1 This Agreement shall commence
on the date first written above and
shall continue until payment in
full of all obligations under the
Loan Documents or until the
expiration or earlier termination of
all of the Franchise Agreements
and BKL Leases, whichever is
earlier, at which time this
Agreement shall expire and become of
no further force and effect.
10.2 Upon or within a reasonable
time after such expiration or termination
the parties agree to sign any
reasonable documents requested by
any party in order to confirm such
expiration or termination.
11. CONSENT AND ACKNOWLEDGMENT
11.1 Acknowledgments.
Franchisees and Guarantor
acknowledge and understand the
provisions of this Agreement and
the procedures set forth herein
relating to the requirements that,
in the event of an exercise by the
Lender of its rights and remedies
under the Loan Documents and this
Agreement, such exercise shall be
subject to the terms of Section 5
hereof.
11.2 Consent To Terms of Sale. In
consideration of BKC and Lender
executing this Agreement, each
Franchisee and Guarantor, for
themselves and any person or entity
claiming by, through or under them,
represent, covenant and agree as
follows:
(a) This Agreement and the Loan
Documents are not entered into with any
actual intent to hinder, delay or
defraud any of their creditors; that
Franchisees and Guarantor do not
intend to incur debts beyond
their ability to pay in
connection with the Loan
Documents; and that Franchisees
and Guarantor do not have assets
unreasonably small in relation to
their businesses as a result of
the Loan Documents or this
Agreement.
(b) This Agreement and the
procedures set forth in
Section 5 with respect to a
sale and transfer of the Affected
Restaurants, the Affected Franchise Agreements, the
Affected BKL Leases, and the real
and personal property associated
therewith, constitute a
commercially reasonable procedure
for disposing of the
Lender's collateral, there being no
nationally recognized market
therefor, and it being acknowledged
that it is designed to generate a
fair and reasonable equivalent
value.
(c) Franchisees and Guarantor shall
not seek to challenge or enjoin the
consummation of any sale of an
Affected Restaurant, Affected
Franchise Agreement or real or
personal property associated
therewith on the grounds that the
procedures set forth in Section 5 are not
commercially reasonable, and agree
that their only remedy shall be to
challenge and seek monetary damages
from the Lender for any unreasonable
decision by the Lender in
determining whether to sell the
Restaurants as a group or individually.
12.GENERAL RELEASE
12.1 In consideration of BKC
executing this Agreement and in
consideration of BKC consenting to
the grant to Lender of the
security interest in the
Franchise Agreements and
the right to transfer the BKL
Leases subject to the terms of this
Agreement, each Franchisee and
Guarantor for himself/herself
and his/her respective heirs,
successors, assigns, personal
representatives, affiliates,
subsidiaries and parent company
(the "Releasing Parties") hereby
release and forever discharge BKC
and its respective successors,
assigns, affiliates, parent
company, directors, officers, employees,
agents and representatives (the
"Released Parties") as to any and
all claims, damages, liabilities
and causes of action whatsoever,
whether known or unknown, which the
Releasing Parties have now or may
have in the future by reason of
any matter, cause of thing
whatsoever arising out of or
relating to the Franchise
Agreements, BKL Leases, or any
other agreement between BKC and any
of the Releasing Parties, the
relationship and/or course of
dealing between the Releasing
Parties and the Released Parties,
and any other matters which existed
prior to the date of this
Agreement.
13. RIGHT OF AUDIT
13.1 Each Franchisee agrees
that BKC or its representatives,
at BKC expense, shall at all
reasonable times, have the right to
examine or audit the books,
records, federal or state tax
returns, accounts of, and any
other information or records
necessary to trace or
account for loan funds hereunder, as
well as to verify the accuracy of the
representations made by each
Franchisee hereunder. In the event
an audit discloses a violation of
the terms and conditions of this
Agreement, Franchisees shall be
liable for all costs and expenses
associated with the audit
including, but not limited to, the
costs of accounting fees, travel,
lodging and wages reasonably
incurred including wages paid
to BKC employees. Franchisees and
Lender mutually consent to the
release to BKC of all information
relating to loan funding,
disbursements or withdrawals under
the Loan Documents.
14. CAPTION HEADINGS
14.1 The caption headings are used
in this Agreement only as a matter
of convenience and for reference
and do not define, limit or
describe the scope of this
Agreement nor the intent of any provision
contained herein.
15.NOTICES
15.1 All notices required or
permitted hereunder shall be in
writing and shall be deemed properly
delivered when received if sent by
(i) U.S. Mail return receipt
requested, (ii) nationally
recognized overnight courier
service, or (iii) telex or telecopy
and if sent to the following
addresses:
If to BKC:
Burger King Corporation
17777 Old Cutler Road Miami, FL
33157 ATTENTION: General Counsel,
Senior Vice President
If to Franchisees and/or Guarantor:
Bravokilo, Inc. and Quality Dining,Inc.
4220 Edison Lakes Parkway Mishawaka,
Indiana 46545
ATTENTION: Daniel B.Fitzpatrick,
Managing Owner
If to Lender:
Chase Bank of Texas, National
Association
712 Main Street
Houston, Texas 77002-8059
ATTENTION:
Manager, Franchise Systems Finance
or to such persons
or places as BKC, Franchisees,
Guarantor, or Lender may direct by
written notice to all of the
other parties hereto. Notices or
other communications hereunder shall
be deemed delivered and received on
the date of actual delivery.
16. CHOICE OF LAW;
JURISDICTION AND VENUE 16.1 This
Agreement shall be governed by and
construed in accordance with the
laws of the State of Florida. The parties
hereto acknowledge and agree that
the United States District Court
for the Southern District of
Florida, or if such court lacks
jurisdiction, the 11th Judicial
Court (or its successor) in and
for MiamiDade County, Florida,
shall be the venue and exclusive
proper forum in which to
adjudicate any case or
controversy arising, either
directly or indirectly, under or
in connection with this Agreement or
related documentation and the
parties further agree that, in the
event of litigation arising out of
or in connection with this
Agreement in these courts, they
will not contest or challenge the
jurisdiction or venue of these
courts.
17. AMENDMENTS
17.1 This Agreement. Except as
expressly provided herein, nothing
in this Agreement shall be construed
to modify or amend any of the terms
and conditions of the Franchise
Agreements or BKL Leases and the
Franchise Agreements and BKL Leases
shall be controlling in the event
of any ambiguity between this
Agreement and the Franchise
Agreements or BKL Leases.
17.2 Franchise Agreements. BKC
and the Franchisees shall not
materially amend or terminate by
mutual agreement any of the
Franchise Agreements without the
prior consent of the Lender, which
consent shall not be unreasonably
withheld.
18. INTEGRATION
18.1 This Agreement and the
other documents being executed and
delivered pursuant hereto
incorporate all prior discussions
and negotiations among the parties
and constitute the full and
entire agreement and understanding
between the parties hereto with
respect to the subject matter
hereof. No amendment hereto shall
be effective unless it is in writing
and signed by all of the parties
hereto.
19. BINDING EFFECT
19.1 Except as otherwise expressly
provided herein, the provisions of
this Agreement shall inure to the
benefit of, and be binding upon,
the parties hereto and their
respective heirs, successors, assigns,
executors, personal representatives
and administrators. 20. TITLES
20.1 The titles of the provisions of
this Agreement are for convenience or
reference only and are not to be
considered in construing this Agreement.
21. SEVERABILITY
21.1 If one or more of the
provisions contained in this
Agreement or in any document
contemplated hereby, or any
application thereof, shall be
invalid, illegal or unenforceable,
in any respect under the laws of
any jurisdiction, the validity,
legality and enforceability
of the remaining provisions
contained herein and therein, and any application
thereof, shall not in any way be affected or
impaired thereby or under the laws
of any other jurisdiction.
22. CONSTRUCTION OF AGREEMENT
22.1 This Agreement has been
prepared after negotiations between
the parties hereto, and if any
ambiguity is contained herein then
in resolving such ambiguity no
weight shall be given in favor of
or against either party solely on account of
its drafting this Agreement.
[THIS SPACE INTENTIONALLY LEFT
BLANK]
IN WITNESS WHEREOF, the parties
have executed this Agreement on the
date of first written above:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Administrative Agent
for the Banks
By:__________________________
Its:_________________________
Attest:______________________
Its:_________________________
NBD, BANK, N.A., as Documentation
Agent for the Banks
By:__________________________________
Its:________________________________
Attest:_____________________________
Its:________________________________
NATIONSBANK, N.A. (SOUTH),
Co-Agent for the Banks
By:_________________________________
Its:________________________________
Attest:_____________________________
Its:________________________________
LENDER
BURGER KING CORPORATION
By:_________________________________
Assistant Secretary
BKC BRAVOKILO, INC.
By:_________________________________
Print
Name:_______________________________
Title:______________________________
Attest:_____________________________
Print
Name:_______________________________
Title:______________________________
FRANCHISEE
WITNESSES: QUALITY DINING, INC.
By:
____________________________________
Print Name:
Title:
___________________________________
Attest:_____________________________
Print Name:
_____________________________
Title:
___________________________________
GUARANTOR
SCHEDULE A TO INTERCREDITOR AGREEMENT
FRANCHISEE:
Bravokilo, Inc., an Indiana corporation
SCHEDULE B TO INTERCREDITOR AGREEMENT
GUARANTOR:
Quality Dining, Inc.
SCHEDULE C TO INTERCREDITOR AGREEMENT
List of Franchisee's Restaurants
Date of Date of Date of
BK Rest Address Franchise Lease(if Guaranty
# Agreeement any) (if any)
____ _______________ ___________ _______ ________
300 1436 Apple Avenue 2/28/94 N/A 2/28/94
Muskegon, MI 49442
328 2035 M-139 2/28/94 N/A 2/28/94
Benton Harbor, MI 49022
458 3436 Henry Street 2/28/94 N/A 2/28/94
North Shores, MI 49444
467 3956 South Franklin 3/31/99 N/A 3/31/99
Michigan City, IN 46360
509 32704 Grand River 8/28/95 N/A 8/28/95
Avenue Farmington, MI
48024
519 823 East Michigan 8/28/95 5/31/79 8/28/95
Avenue
Ypsilanti, MI 48198
527 20905 Ecorse Road 8/28/95 8/29/80 8/28/95
Taylor, MI 48180
637 28333 Ford Road 8/28/95 11/05/82 8/28/95
Garden City, MI 48135
764 25538 South Woodward 8/28/95 9/26/92 8/28/95
Avenue
Royal Oak, MI 48067
810 9525 Telegraph Road 2/28/94 N/A 2/28/94
Taylor, MI 48180
889 2170 Rawsonville Road 8/28/95 4/14/99 8/28/95
Belleville, MI 48111
988 8489 West Grand River 2/28/94 N/A 2/28/94
Avenue
Brighton, MI 48116
1606 2051 Washington Avenue 2/28/94 N/A 2/28/94
St. Joseph, MI 49085
2624 18737 West Road 2/28/94 N/A 2/28/94
Woodhaven, MI 48183
2689 27517 Telegraph Road 2/28/94 10/22/82 2/28/94
Flat Rock, MI 48134
3172 1945 Pipestone Road 2/28/94 N/A 2/28/94
Benton Harbor, MI 49022
3260 14808 Michigan Avenue 8/28/95 11/27/81 8/28/95
Dearborn, MI 48126
3722 121 West La Salle 2/28/94 N/A 2/28/94
Avenue
South Bend, IN 46601
4102 2775 E. Highland Road 2/28/94 N/A 2/28/94
Highland, MI 48356
4124 2021 North Michigan 2/28/94 N/A 2/28/94
Street
Plymouth, IN 46563
4216 530 West McKinley 2/28/94 N/A 2/28/94
Avenue
Mishawaka, IN 46545
4276 1709 Elkhart Road 2/28/94 N/A 2/28/94
Goshen, IN 46526
4435 1012 W. State Road 2 2/28/94 N/A 2/28/94
West
La Porte, IN 46350-8057
4505 5809 Grape Road 2/28/94 N/A 2/28/94
Mishawaka, IN 46545
4814 11550 Belleville Road 8/28/95 N/A 8/28/95
Belleville, MI 48111
5118 10382 Highland Road 2/28/94 N/A 2/28/94
Hartland, MI 48029
5188 928 Terrace Street 2/28/94 N/A 2/28/94
Muskegon, MI 49443
5193 4626 Red Arrow Highway 2/28/94 N/A 2/28/94
Stevensville, MI 49127
5250 232 East Pettit Avenue 2/28/94 N/A 2/28/94
Ft. Wayne, IN 46806
5298 2801 East Lincolnway 2/28/94 N/A 2/28/94
East
Mishawaka, IN 46544
5323 7616 Lincolnway East 2/28/94 N/A 2/28/94
Fort Wayne, IN 46803
5397 2920 Frontage Road 2/28/94 N/A 2/28/94
Warsaw, IN 46580
5398 52803 U.S. 33 North 2/28/94 N/A 2/28/94
South Bend, IN 46637
5413 1918 North Jefferson 2/28/94 N/A 2/28/94
Street
Huntington, IN 46750
5603 2184 East Grand River 2/28/94 N/A 2/28/94
Road
Howell, MI 48843
5753 3710 East State Street 2/28/94 N/A 2/28/94
Ft. Wayne, IN 46805
5790 6402 West Jefferson 2/28/94 N/A 2/28/94
Street
Ft. Wayne, IN 46804
5987 752 Lagrange 2/28/94 N/A 2/28/94
South Haven, MI 49090
5988 1255 West Main Street 2/28/94 N/A 2/28/94
Fremont, MI 49412
6389 499 North Main Street 2/28/94 N/A 2/28/94
Columbia City, IN 46725
6485 1804 N. Wayne Street 2/28/94 N/A 2/28/94
Angola, IN 46703
6509 39601 Grand River 2/28/94 9/18/92 2/28/94
Novi, MI 48375
6574 4852 Western Avenue 2/28/94 N/A 2/28/94
South Bend, IN 46619
6622 1113 Ireland Road 2/28/94 N/A 2/28/94
South Bend, IN 46614
6843 3123 Holton-Whitehall 2/28/94 N/A 2/28/94
Road
Whitehall, MI 49461
7014 657 North Main Street 2/28/94 N/A 2/28/94
Bluffton, IN 46714
7055 2171 South Bend Avenue 2/28/94 N/A 2/28/94
South Bend, IN 46637
7060 618 Fairview Boulevard 2/28/94 N/A 2/28/94
Kendallville, IN 46755
7113 903 Spruce Street 2/28/94 N/A 2/28/94
Dowagiac, MI 49047
7433 1911 Lincoln Way East 2/28/94 N/A 2/28/94
Goshen, IN 46526
8203 6225 Lima Road 6/08/94 N/A 6/08/94
Ft. Wayne, IN 46818
8448 3403 Portage Avenue 5/26/94 N/A 5/26/94
South Bend, IN 46628
8664 1205 East Market Street 10/04/94 N/A 10/04/94
Naponee, IN 46550
8665 1436 West Plymouth 10/17/94 N/A 10/17/94
Street
Bremen, IN 46506
9012 1105 West 7th Street 5/10/95 N/A 5/10/95
Auburn, IN 46706
9028 8180 Mason Street 5/14/95 N/A 5/14/95
Newaygo, MI 49337
9157 334 North 13th Street 8/01/95 N/A 8/01/95
Decatur, IN 46733
9349 2037 U.S. 31 9/30/95 N/A 9/30/95
Plymouth, IN 46563
9352 111 S. St. Joseph 8/25/95 N/A 8/25/95
Street
South Bend, IN 46601
9461 3733 North M-140 12/05/95 N/A 12/05/95
Watervliet, MI 49098
9506 12757 State Road 23 11/27/95 N/A 11/27/95
Granger, IN 46530
9640 2190 Holton Road 2/12/96 N/A 2/12/96
North Muskegon, MI
49445
9713 1610 North Meridian 4/18/96 N/A 4/18/96
Portland, IN 47371
10436 324 East Jefferson 1/24/97 N/A 1/24/97
Street
Fort Wayne, IN 46802
10440 608 West Talmer 12/04/96 N/A 12/04/96
North Judson, IN 46366
10568 Market Centre Shopping 2/20/97 N/A 2/20/97
Center
Goshen, IN 46526
11248 151 South Zeeb Road 6/25/98 N/A 6/25/98
Ann Arbor, MI 48103
11347 5822 Telegraph Road 12/30/97 N/A 12/30/97
Taylor, MI 48180
11365 413 East Dupont Road 5/21/98 N/A 5/21/98
Ft. Wayne, IN 46845
11739 5202 East 1200 North 8/10/98 N/A 8/10/98
Syracuse, IN 46567
12551 806 South Heaton Street 6/15/99 N/A 6/15/99
Knox, IN 46534
SCHEDULE D TO INTERCREDITOR AGREEMENT
Statement of Account dated July 22,1999