Exhibit 10.1

 

EXECUTION VERSION

 

SECOND AMENDED AND RESTATED
MASTER LOAN AND SECURITY AGREEMENT

 

By and Among

 

IPIC-GOLD CLASS ENTERTAINMENT, LLC,
as Borrower

 

IPIC GOLD CLASS HOLDINGS LLC,
as Holdings,

 

Each Borrower Subsidiary from time to time party hereto,

 

and

 

THE EMPLOYEES’ RETIREMENT SYSTEM OF ALABAMA
and
THE TEACHERS’ RETIREMENT SYSTEM OF ALABAMA,
as Lenders

 

February 1, 2018

 

 

 

 

Table of Contents

 

      Page         ARTICLE I. DEFINITIONS, ACCOUNTING PRINCIPLES, UCC TERMS. 2  
1.1 Definitions 2         ARTICLE II. THE LOAN AND COLLATERAL 19   2.1 The Loan
19   2.2 Security for the Loan. 20   2.3 Interest Rate. 20   2.4 Repayment of
Loan. 21   2.5 Late Charges On Overdue Installments; Default Rate; Collection
Costs. 24   2.6 Expiration/Termination of Lenders’ Commitment to Lend. 24   2.7
Cross-Collateralization and Cross-Default. 25   2.8 Grant of Lien and Security
Interest. 25   2.9 Maintenance of Lien. 25   2.10 Village Note Payoff Advance 26
        ARTICLE III. CONDITIONS TO THE LOAN 26   3.1 Conditions Precedent to
this Agreement 26   3.2 Project Approval: Advances For Project Costs 27   3.3
Project Development Budget Review and Revision: Reallocation of Committed
Amount. 29         ARTICLE IV. ADVANCES OF THE LOAN FOR EACH PROJECT 30   4.1
Disbursement Procedure. 30   4.2 Direct Advances. 34   4.3 Delivery of Funds 35
  4.4 Required Borrower Funds. 35   4.5 Deposit Accounts. 36         ARTICLE V.
BORROWER’S REPRESENTATIONS AND WARRANTIES, 38   5.1 Existence, Power and
Qualification. 38   5.2 Intentionally Omitted. 39   5.3 Authority to Borrow
Hereunder 39   5.4 Due Execution and Enforceability 39   5.5 No Conflict 39  
5.6 No Claims or Litigation 39   5.7 Solvency and Accuracy of Financial
Information 40   5.8 No Defaults or Restrictions 40   5.9 Payment of Taxes 40  
5.10 Necessary Permits, Etc 41   5.11 ERISA 41   5.12 Regulation U 41   5.13
Controlled Companies 41   5.14 Title to Assets 41

 

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  5.15 Places of Business 41   5.16 Compliance with Applicable Environmental
Laws 41   5.17 Disclosure 42   5.18 Condemnation 42   5.19 Roads and Utilities
42   5.20 Construction 42   5.21 Priority of Mortgages and Financing Statements
42   5.22 Borrower’s Expertise 42   5.23 Anti-Terrorism Laws 42   5.24 Holdings
and Borrower Subsidiaries 43         ARTICLE VI. AFFIRMATIVE COVENANTS 43   6.1
Payment and Performance of Obligations 43   6.2 Maintenance of Existence 43  
6.3 Compliance with Laws 44   6.4 Accrual and Payment of Taxes 44   6.5 Payment
of Claims 44   6.6 Maintenance of Properties 44   6.7 Other Indebtedness 44  
6.8 Examination of Records and Visitation By Lenders 44   6.9 Access 45   6.10
Intentionally Omitted. 45   6.11 Accounting Records 45   6.12 Maintenance of
Permits, Etc 45   6.13 Conduct of Business 45   6.14 Correction of Defects 45  
6.15 Further Assurances 45   6.16 Quarterly Reporting Requirements 45   6.17
Annual Reporting Requirements 46   6.18 Project Financial Statements and
Reconciliations 47   6.19 Employee Plan Reports and Notices 47   6.20 Other
Reports and Notices 47   6.21 Payment of Fees; Indemnity 48   6.22 Deficiencies
48   6.23 Construct Improvements and Complete the Projects 48   6.24 Use of
Proceeds 49   6.25 Insurance 49   6.26 Ownership of Personalty 53   6.27
Discharge Liens 53   6.28 General Operating Budgets 54   6.29 The Borrower’s
Commitment to the Projects 54   6.30 EBITDA Requirement 54   6.31 Holdings and
Borrower Subsidiaries 54   6.32 Web-cam 54         ARTICLE VII. NEGATIVE
COVENANTS 55   7.1 No Liens 55   7.2 Merger, Consolidation, Change in Ownership
56

 

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  7.3 Disposition of Assets 56   7.4 Loan and Investments 56   7.5 Indebtedness
57   7.6 Distributions and Redemptions 58   7.7 Change in Business 58   7.8
Places of Business 58   7.9 Changes in Fiscal Year or Accounting 59   7.10 ERISA
Funding and Termination 59   7.11 Transactions with Affiliates 59   7.12 Sale
and Lease-Back 59   7.13 Assignment or Conveyance 59   7.14 Change of Use 59  
7.15 Acquisition of Other Assets 60   7.16 No Fees 60   7.17 No Change to LLC
Agreement 60   7.18 Third Party Fees 60   7.19 Holdings and Borrower
Subsidiaries 60         ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES, 61   8.1
Events of Default 61   8.2 General Remedies 63   8.3 Lenders’ Additional Rights
and Remedies 63   8.4 No Limitation on Rights and Remedies 66   8.5 Repossession
of the Collateral Care and Custody of the Collateral, Etc. 67   8.6 Application
of Proceeds 67   8.7 Attorney-in-Fact 68   8.8 Default Costs 69         ARTICLE
IX. MISCELLANEOUS. 69   9.1 Waiver 69   9.2 Costs and Expenses 70   9.3
Performance of Lenders 70   9.4 Headings 70   9.5 Survival of Covenants 70   9.6
Agent Lender 70   9.7 Notices, etc. 71   9.8 Register; Participant Register 72  
9.9 Borrower Subsidiaries 72   9.10 Ground Leases Involving Borrower Building
Construction 73   9.11 Inspections and Reviews 73   9.12 Benefits 73   9.13
Supersedes Prior Agreements; Counterparts 73   9.14 Controlling Law 74   9.15
Confidentiality 74   9.16 Waiver of Jury Trial 74   9.17 Consent 75   9.18 No
Oral Agreements/Notice 75   9.19 Amendment and Restatement; No Novation 75  
9.20 Video Rights 75

 

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SECOND AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDED AND RESTATED MASTER LOAN AND SECURITY AGREEMENT (this
“Agreement”) is made as of this 1st day of February, 2018 by and among IPIC-GOLD
CLASS ENTERTAINMENT, LLC, a Delaware limited liability company (the “Borrower”),
IPIC GOLD CLASS HOLDINGS LLC, a Delaware limited liability company (“Holdings”),
IPIC TEXAS, LLC, a Texas limited liability company (“IPIC Texas”), IPIC MEDIA,
LLC, a Florida limited liability company (“IPIC Media”), DELRAY BEACH HOLDINGS,
LLC, a Florida limited liability company (“DB Holdings”), BAY COLONY REALTY,
LLC, a Florida limited liability company (“Bay Colony” and, together with IPIC
Texas, IPIC Media, DB Holdings and each other Person which the Borrower owns
and/or controls one hundred percent (100%) of the Equity Interest of such
Person, collectively, the “Borrower Subsidiaries” and each individually a
“Borrower Subsidiary”) TEACHERS’ RETIREMENT SYSTEM OF ALABAMA, a body corporate
of the State of Alabama created under Section 16-25-1 et. seq., Code of Alabama
(1975), as amended (“TRS”) and THE EMPLOYEES’ RETIREMENT SYSTEM OF ALABAMA, a
body corporate of the State of Alabama created under Section 36-27-I et. seq.,
Code of Alabama (1975), as amended (“ERS” and, together with TRS, the “Lenders”
and each individually a “Lender”).

 

RECITALS:

 

WHEREAS, pursuant to a Master Loan and Security Agreement dated May 25, 2007 (as
amended, the “Original Loan Agreement”), Lenders agreed to make a loan to
Village Roadshow Gold Class Cinemas LLC, a Delaware limited liability company
(“VRGCC”) in the stated principal amount of One Hundred Twenty Million Dollars
($120,000,000.00) (the “Original Loan”);

 

WHEREAS, on or about September 10, 2010, (x) the Borrower and IPIC Texas
acquired substantially all of the assets of VRGCC and VRGCC Texas LLC, a Texas
limited liability company (“VRGCC Texas”), and assumed a portion of the Original
Loan equal to the “Tranche 1 Committed Amount” (as hereinafter defined), as more
particularly set forth in the Assumption Agreement and (y) the Borrower, IPIC
Texas and the Lenders entered into that certain Amended and Restated Master Loan
and Security Agreement (as amended pursuant to (i) the Amendment to Amended and
Restated Master Loan and Security Agreement, dated as of May 31, 2011, (ii) the
Second Amendment to Amended and Restated Master Loan and Security Agreement,
dated as of November 22, 2011, (iii) the Third Amendment to Amended and Restated
Master Loan and Security Agreement, dated as of May 15, 2012, (iv) the Fourth
Amendment to Master Loan and Security Agreement, dated as of June 10, 2013, (v)
the Modification Agreement, dated as of December 2, 2013 (the “Modification
Agreement”), (vi) the Second Modification Agreement, dated as of September 30,
2014, (vii) the Third Modification Agreement, dated as of February 23, 2016,
(viii) the Fourth Modification Agreement, dated as of October 9, 2017 (the
“Fourth Modification Agreement”), and (ix) the Fifth Modification Agreement,
dated as of November 27, 2017, and as otherwise amended, modified or
supplemented prior to the date hereof, the “Existing Loan Agreement”).

 

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WHEREAS, in connection with the consummation of the Parent IPO (as defined
below), the Borrower has requested from the Lenders certain modifications to the
Existing Loan Agreement;

 

WHEREAS, to effect such modifications, and subject to the satisfaction of the
conditions set forth in Section 3.1 hereof, the Existing Loan Agreement shall be
amended and restated in its entirety as set forth herein;

 

NOW, THEREFORE, in consideration of the Recitals above and other good and
valuable consideration, it is hereby agreed as follows:

 

ARTICLE I.
DEFINITIONS, ACCOUNTING PRINCIPLES, UCC TERMS.

 

1.1       Definitions. As used in this Agreement, the following words and terms
shall have the meanings specified below unless the context hereof shall
otherwise indicate:

 

“Advances” means the advances of the Loan to be made by the Lenders in
accordance with the provisions of Article IV hereof.

 

“Affiliate” means, when used with respect to any Person, any other Person (1)
which directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with the Person specified, (2) which
beneficially owns or holds 5% or more of any class of the voting Equity
Interests of such Person, (3) 5% or more of the voting Equity Interests of which
is beneficially owned or held by such Person or a subsidiary of such Person, or
(4) who is any director or executive officer or manager of such Person. For
purposes of the foregoing, no Lender shall be deemed an Affiliate of Holdings,
the Borrower or any Borrower Subsidiary and the term “control” (including the
terms “controlling,” “controlled by” and “under common control with”) shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

 

“Agent Lender” means TRS, or such successor Agent Lender as may be chosen by
Lenders with notice to Borrower, which shall serve as the agent (including, as
collateral agent) for the Lenders with respect to the Loan for the purposes set
forth herein and for any other such purposes as may be determined by the Lenders
from time to time.

 

“Amortization Expense” means the amortization expense for the applicable period
(to the extent included in the computation of Net Income), according to GAAP.

 

“Applicable Environmental Law” shall mean any applicable federal, state or local
laws, rules or regulations pertaining to health or the environment, or petroleum
products, or radon radiation, or oil or hazardous substances, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (“CERCLA”), the Resource Conservation and Recovery Act
of 1976, as amended (“RCRA”) and the Federal Emergency Planning and Community
Right-To-Know Act of 1986, as amended. The terms “hazardous substance” and
“release” shall have the meanings specified in CERCLA, and the terms “solid
waste,” disposal,” “dispose,” and “disposed” shall have the meanings specified
in RCRA, except that if such acts are amended to broaden the meanings thereof,
the broader meaning shall apply herein prospectively from and after the date of
such amendments; notwithstanding the foregoing, provided, to the extent that the
laws of the state in which the Property is located establish a meaning for
“hazardous substance” or “release” which is broader than that specified in
CERCLA, as CERCLA may be amended from time to time, or a meaning for “solid
waste,” “disposal,” and “disposed” which is broader than specified in RCRA, as
RCRA may be amended from time to time, such broader meanings under said state
law shall apply in all matters relating to the laws of such State.

 

 2 

 

 

“Approved Project” shall mean each Existing Project, each Planned Project,
together with any other Future Project which meets the definition of “Approved
Project” as defined in Section 3.2(b) hereof.

 

“Architect” means the architect of any Project that has been retained by the
Borrower or any Borrower Subsidiary to prepare the Plans and Specifications and
provide other architectural services for any Project.

 

“Assignment of Contracts” means, collectively, the separate Assignment of
Contract Documents from the Borrower and each Borrower Subsidiary to Agent
Lender, assigning to Agent Lender, and granting to the Agent Lender a first
priority security interest in, all rights of the Borrower and each Borrower
Subsidiary in and to the construction contracts, architectural contracts,
engineering contracts, management agreements, and such other contracts and
agreements relating to each of the Projects as may be required by the Agent
Lender. The form of the Assignment of Contracts to be executed in connection
with each Project is attached hereto as Exhibit A.

 

“Assignments of Accounts” means, collectively, that certain Assignment of
Deposit Accounts from Borrower and each Borrower Subsidiary to Agent Lender,
together with one or more Assignment(s) of Deposit Account to be provided by
Borrower and each Borrower Subsidiary to Agent Lender upon establishing each of
the Lessor Contribution Account(s) and Operating Account(s), pledging the
Disbursement Account, Excess Cash Flow Account, Lessor Contribution Account(s)
and Operating Account(s) as additional Collateral for the Loan Obligations, as
the same may be amended.

 

“Assignment and Assumption Documents” means the Assumption Agreement; those
certain Assumptions Of Leasehold Deed Of Trust, Assignment Of Rents, Security
Agreement And Fixture Filing with respect to each Mortgage encumbering each
Existing Project located in the States of Texas and California, those certain
Assumptions Of Leasehold Mortgage, Assignment Of Rents, Security Agreement And
Fixture Filing with respect to each Mortgage encumbering each Existing Project
located in the State of Illinois and that certain Assumption Of Commercial Deed
Of Trust, Security Agreement with Assignment Of Rents And Fixture Filing with
respect to the Mortgage encumbering the Existing Project located in the State of
Washington, together with any and all other documents and instruments evidencing
the assignment and assumption of the Original Loan Agreement and other “Loan
Documents” (as defined in the Original Loan Agreement) from VRGCC and VRGCC
Texas to Borrower and IPIC Texas, respectively.

 

 3 

 

 

“Assumption Agreement” means that certain Assignment and Assumption of Master
Loan and Security Agreement dated as of the Existing Loan Agreement Effective
Date and other Loan Documents of the same date by and among VRGCC, VRGCC Texas,
Lenders, Borrower and Borrower Subsidiaries.

 

“Authorized Representatives” shall have the meaning assigned to such term in
Section 4.1(d) hereof.

 

“Available Committed Amount” shall mean the Tranche 3 Committed Amount less the
sum of (a) the Village Note Payoff Advance, (b) the Operating Expense Advance,
(c) the stated amount of all Project Tranches for all Existing Projects, Planned
Projects and Future Projects previously incurred under the Tranche 3 Committed
Amount and (d) any sums not identified in any Project Development Budget for any
Existing Project, Planned Project or Future Project but which are reasonably
identified by Agent Lender as amounts required to complete the development of
any Existing Project, Planned Project or Future Project (i.e., any “overrun”
amounts), as such amount may be adjusted from time to time by Agent Lender to
account for changes to Project Development Budgets for Existing Projects,
Planned Projects and Future Projects, cost-savings or cost-overruns in any
Project Development Budgets for an Existing Project, Planned Project or Future
Project, or the availability of Lessor Contributions for Project development or
operating costs, all as more particularly provided herein.

 

“Bankruptcy Code” means Title 1 I of the United States Code, as amended from
time to time.

 

“Borrower LLC Agreement” means the Third Amended and Restated Limited Liability
Company Agreement of even date herewith, as such may be amended in accordance
with the provisions thereof, as well as the provisions set forth herein.

 

“Borrower Subsidiaries” shall have the meaning given to such term in the
recitals.

 

“Business Day” means a day, other than Saturday or Sunday and legal holidays,
when the Agent Lender is open for ordinary business.

 

“Capital Expenditures” means all expenditures made by a Person, directly or
indirectly for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
a balance sheet of such Person or which have a useful life of more than one
year.

 

“Capitalized Lease” means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.

 

 4 

 

 

“Cash Equivalents” means, as to any Person, (a) securities issued, or directly,
unconditionally and fully guaranteed or insured, by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition by such Person; (b) time deposits and
certificates of deposit of any lender or any commercial bank (or which is the
principal banking subsidiary of a bank holding company organized under the laws
of the United States, any state thereof or the District of Columbia) having
capital and surplus aggregating in excess of $500 million and a rating of “A”
(or such other similar equivalent rating) or higher by at least one nationally
recognized statistical rating organization (as defined in Rule 436 under the
Securities Act) with maturities of not more than one year from the date of
acquisition by such Person; (c) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (a)
above entered into with any bank meeting the qualifications specified in clause
(b) above, which repurchase obligations are secured by a valid perfected
security interest in the underlying securities; (d) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by Standard & Poor’s Rating Service or at least P-1 or the
equivalent thereof by Moody’s Investors Service Inc., and in each case maturing
not more than one year after the date of acquisition by such Person; (e)
investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (a) through (d) above;
and (f) demand Deposit Accounts maintained in the ordinary course of business.

 

“Change in Control” means Parent shall no longer hold 100% of the power,
directly or indirectly, to direct the management, operation and policies of
Holdings, the Borrower or any Borrower Subsidiary, whether through ownership of
voting securities, ownership interests, by contract or otherwise; (b) the sale
or disposition of all or substantially all of the assets of Holdings, Borrower,
any Borrower Subsidiary or Parent, whether in one transaction or in a series of
transactions, or (c) the consolidation of Borrower, Borrower Subsidiary or
Parent with, or merger of any such Person into, another Person, or the merger or
consolidation of another Person with or into such Person which results in an
event described under (a) or (b) above.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Collateral” means:

 

(a)       All Borrower and each Borrower Subsidiary’s right, title and interest
in and to the Projects and including the following assets of every kind, nature
and description, wherever located, whether now or hereafter existing and whether
now owned or hereafter acquired:

 

(1)       The Mortgaged Property;

 

(2)       All of the Borrower and each Borrower Subsidiary’s assets which are or
may be subject to Article 9 of the UCC, together with all replacements therefor,
additions and accessions thereto, and proceeds (including, but without
limitation, insurance proceeds) and products thereof, including, without
limitation, the following (as more particularly set forth in Section 1.3 below,
capitalized terms used in this subsection without definition set forth in this
Agreement shall have the meanings ascribed to such terms in the UCC):

 

(i)       Accounts;

 

(ii)       Chattel Paper;

 

(iii)       Commercial Tort Claims;

 

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(iv)       Deposit Accounts and Lockbox Accounts;

 

(v)       Documents;

 

(vi)       Equipment;

 

(vii)       General Intangibles;

 

(viii)       Goods;

 

(ix)       Instruments;

 

(x)       Inventory;

 

(xi)       Investment Property;

 

(xii)       Letter-of-Credit Rights;

 

(xiii)       Permits;

 

(xiv)       Payment Intangibles;

 

(xv)       Intellectual Property;

 

(xvi)       Software; and

 

(xvii)       Supporting Obligations;

 

(3)       All existing and future Leases and use agreements of real or personal
property entered into by the Borrower or any Borrower Subsidiary as lessor with
other Persons as lessees, including without limitation the right to receive and
collect all rentals and other monies, including security deposits, at any time
payable under such Leases and agreements;

 

(4)       Any existing and future Leases and use agreements of real or personal
property entered into by the Borrower or any Borrower Subsidiary as lessee with
other Persons as lessors, including without limitation the leasehold interest of
the Borrower and each Borrower Subsidiary in such property, and all options to
purchase such property or to extend any such Lease or agreement;

 

(5)       All Fixtures (as defined by the UCC) of the Borrower and each Borrower
Subsidiary (including, but not limited to, any Fixtures located on any Mortgaged
Property);

 

(b)       All Records pertaining to any of the Collateral;

 

(c)       Any and all other assets of the Borrower and each Borrower Subsidiary
of any kind, nature, or description and which are intended to serve as
collateral for the Loans under any one or more of the Loan Documents;

 

 6 

 

 

(d)       All Equity Interests of the Borrower now or hereafter owned by
Holdings;

 

(e)       All Equity Interests of any Borrower Subsidiary now or hereafter owned
by the Borrower;

 

(f)       All Equity Interests of any other Person now or hereafter owned by
Borrower; and

 

(g)       All interest, dividends, Proceeds (as defined by the UCC), accessions,
products, rents, royalties, issues and profits of any of the property described
above, including, without limitation, all monies due and to become due with
respect to such property, together with all rights to receive the same.

 

Notwithstanding the foregoing, the following shall be excluded from the
definition of “Collateral”: (a) any permit or license issued by a governmental
authority to the Borrower or any Borrower Subsidiary or any agreement to which
the Borrower or any Borrower Subsidiary is a party, in each case, only to the
extent and for so long as the terms of such permit, license or agreement or any
requirement of law applicable thereto, prohibit the creation by the Borrower or
any Borrower Subsidiary of a security interest in such permit, license or
agreement in favor of the Lenders (after giving effect to Sections 9-406(d),
9-407(a), 9-408(a) or 9-409 of the UCC (or any successor provision or
provisions) or any other applicable law (including the Bankruptcy Code) or
principles of equity), (b) Equipment owned by the Borrower or any Borrower
Subsidiary on the date hereof or hereafter acquired that is subject to a Lien
securing a purchase money obligation or capital lease obligation permitted to be
incurred pursuant to the provisions of this Agreement if the contract or other
agreement in which such Lien is granted (or the documentation providing for such
purchase money obligation or capital lease obligation) validly prohibits the
creation of any other Lien on such Equipment; (c) any Equity Interests in
partnerships, joint ventures and subsidiaries (other than Borrower Subsidiaries)
that would require the consent of any Person who owns Equity Interests in such
partnership, joint venture or subsidiary which consent has not been obtained,
(d) any Equity Interests in any foreign subsidiary (or any domestic subsidiary
substantially all of the assets of which consist directly or indirectly of
Equity Interests in any foreign subsidiary) that are in excess of 65% of the
Equity Interests of such foreign subsidiary entitled to vote; (e) any
“intent-to-use” application for registration of a Trademark filed pursuant to
Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, prior to the filing and
acceptance of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or
an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with
respect thereto; (f) to the extent used exclusively to hold funds in trust for
the benefit of third parties, (A) payroll, health and other employee wage and
benefit accounts, (B) tax accounts, including, without limitation, sales tax
accounts, (C) escrow, defeasance and redemption accounts and (D) fiduciary or
trust accounts and, in the case of clauses (A) through (D), the funds or other
property held or maintained in such account; (g) except with respect to Loan
Obligations relating to the Pasadena Project, the Pasadena Project; and (h)
except with respect to Loan Obligations relating to the Westwood Project, the
Westwood Project.

 

“Commitment Period” shall mean the period during which the Lenders are committed
to make Advances, as more particularly set forth in Section 4.1(j) hereof.

 

 7 

 

 

“Committed Amount” means Two Hundred Twenty-Five Million Eight Hundred
Twenty-Eight Thousand One Hundred Sixty-Nine and 12/100 Dollars
($225,828,169.12) being the sum of the Tranche 1 Committed Amount, the Tranche 2
Committed Amount and the Tranche 3 Committed Amount.

 

“Default” means the occurrence or existence of any event which, but for the
giving of notice or expiration of time or both, would constitute an Event of
Default.

 

“Default Rate” means a fixed per annum rate equal to twelve and 50/100 percent
(12.5%).

 

“Deposit Accounts” shall mean the Excess Cash Flow Account, the Lessor
Contribution Accounts and the Operating Accounts, and any other “Deposit
Account” of Borrower or any Borrower Subsidiary as such term is defined in the
UCC.

 

“Depreciation Expense” means depreciation expense for an applicable period (to
the extent included in the computation of Net Income), according to GAAP.

 

“Disbursement Account” shall have the meaning given to such term in Section 4.3
hereof.

 

“EBITDA” means Net Income for an applicable period equal to the 12 full calendar
months preceding the date of calculation, plus the sum of (without duplication)
Interest Expense, Income Tax Expense, Amortization Expense and Depreciation
Expense, all determined in accordance with Generally Accepted Accounting
Principles.

 

“EBITDA Requirement” shall have the meaning ascribed to such term in section
6.30 hereof.

 

“Employee Plan” means an “employee pension benefit plan” as defined in ERISA §
3(2) that is subject to the funding requirements of Title IV of ERISA or Section
412 of the Code and which has been established, maintained or contributed to by
the Borrower or any Borrower Subsidiary or any other Person which, together with
the Borrower or any Borrower Subsidiary, constitute elements of either a
controlled group of corporations (within the meaning of Section 414(b) of the
Code), a group of trades or businesses under common control (within the meaning
of Section 414(c) of the Code), or Section 4001 of ERISA, an affiliated service
group (within the meaning of Section 414(m) of the Code), or another arrangement
covered by Section 414(o) of the Code.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

“Equity Interests” means, with respect to any Person, all of the shares,
interests, rights, participations or other equivalents (however designated) of
capital stock of (or other ownership or profit interests in or units in) such
Person and all of the warrants, options or other rights for the purchase,
acquisition or exchange from such Person of any of the foregoing (including
through convertible securities).

 

“ERS” shall have the meaning set forth in the recitals.

 

 8 

 

 

“ERS Percentage” shall mean 33%, being ERS’s undivided interest in the Loan.

 

“Event of Default” means any “Event of Default” as set forth in Section 8.1
hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Excess Cash Flow” means, the difference, if any, of (a) the sum, without
duplication, of (i) the Net Income (calculated on a consolidated basis for the
Borrower and any Borrower Subsidiary in accordance with GAAP) of the Borrower
and all Borrower Subsidiaries from all sources (i.e., generally including
interest income and income from all Projects but excluding, for the avoidance of
doubt, proceeds of any capital-raising transaction (including the Parent IPO,
subsequent equity raises and proceeds of any debt issuance)) during such
applicable period, adjusted by adding thereto, in each case only to the extent
(and in the same proportion) deducted in determining such Net Income and without
duplication: (A) Amortization Expense for such period calculated in accordance
with GAAP, (B) Depreciation Expense for such period calculated in accordance
with GAAP, (C) all other non-cash charges reducing Net Income for such period
calculated in accordance with GAAP and, (D) Excess Cash on Hand, MINUS (b)
without duplication, the aggregate amount actually paid by the Borrower in cash
during the fiscal year on account of (i) Capital Expenditures (minus the
principal amount of Indebtedness incurred in connection with such expenditures),
but after providing for appropriate reserves reasonably necessary for each
Project, including Capital Expenditures committed but not yet paid and the
operation of the Borrower or any Borrower Subsidiary to the extent reasonably
approved by the Lenders and (ii) Restricted Payments pursuant to Sections
7.6(b), (c), (d) and (g) hereof. In calculating Excess Cash Flow, expenses shall
not include the following without the prior written approval of Agent Lender:
(i) fees payable to Borrower or any Affiliate of Borrower (including, without
limitation, development fees or property management fees) which are outside the
ordinary course of business and not specifically reflected in an approved
Project Development Budget or General Operating Budget as an Affiliate payment,
or (ii) any amounts payable to employees of Borrower or any Affiliate of
Borrower which are outside the ordinary course of business or not specifically
reflected in an approved Project Development Budget or General Operating Budget
as an Affiliate payment. Calculations of Excess Cash Flow must be supported by
the Financial Statements provided by Borrower or any Borrower Subsidiary from
time to time pursuant to this Agreement.

 

“Excess Cash Flow Account” shall have the meaning given to such term in Section
4.5 hereof.

 

“Excess Cash on Hand” as of a given date, shall mean the amount by which
Borrower’s primary operating cash account balance (as determined on a book
balance basis after adjusting for unpresented checks and uncleared funds)
exceeds $5,000,000.

 

“Excess Cash Sweep Threshold” shall have the meaning given to such term in
Section 4.5(h).

 

“Exhibit” means an Exhibit to this Agreement, unless the context refers to
another document, and each such Exhibit shall be deemed a part of this Agreement
to the same extent as if it were set forth in its entirety wherever reference is
made thereto.

 

 9 

 

 

“Existing Loan Agreement” shall have the meaning set forth in the recitals.

 

“Existing Loan Agreement Effective Date” means September 30, 2010.

 

“Existing Project” shall mean each Project described on the attached Exhibit N.

 

“Existing Subordinated Notes” refers to each of the Subordinated Notes described
on Exhibit Q hereto.

 

“Expense Reimbursement Agreement” means that certain Expense Reimbursement
Agreement, dated as of the date hereof, between the Borrower and Parent.

 

“Financial Statements” shall have the meaning assigned to such term in Section
5.7 hereof.

 

“Financing Statements” shall have the meaning assigned to such term in Section
2.2 hereof.

 

“Future Projects” shall mean each Approved Project (other than the Existing
Projects and the Planned Projects) approved after the Existing Loan Agreement
Effective Date in accordance with the terms and conditions of Section 3.2
hereof.

 

“GAAP” means, as in effect from time to time, generally accepted accounting
principles consistently applied as accepted by the American Institute of
Certified Public Accountants.

 

“General Contractor” means the general contractor for any Project.

 

“General Operating Budget” means a detailed estimation of any operating costs
and expenses of Borrower or any Borrower Subsidiary which is not otherwise set
forth in a Project Development Budget, as the same shall be prepared by Borrower
or any Borrower Subsidiary from time to time pursuant to this Agreement.

 

“General Project Parameters” means the general Project parameters as outlined in
Exhibit B attached hereto and made a part hereof.

 

“Holdings” has the meaning given to such term in the recitals.

 

“Holdings LLC Agreement” means the Limited Liability Company Agreement of
Holdings of even date herewith, in which a membership interest in Holdings is
given to the Lenders, as such may be amended in accordance with the provisions
thereof, as well as the provisions set forth herein.

 

“Improvements” means all buildings, structures, fixtures and improvements of
every nature acquired or paid for with the proceeds of the Loan and/or funds
advanced by the Borrower or any Borrower Subsidiary pursuant to this Agreement,
including, but not limited to, all site work, mechanical systems, electrical
systems, landscaping, gas and electric fixtures, radiators, heaters, engines and
machinery, boilers, ranges, elevators and motors, plumbing and heating fixtures,
carpeting and other floor coverings, water heaters, awnings and storm sashes,
and cleaning apparatus which are or shall be attached to the Properties or said
buildings, structures or improvements, together with all items acquired in
substitution therefor or as a renewal or replacement thereof.

 

 10 

 

 

“Income Tax Expense” means the income tax expense for the applicable period (to
the extent included in the computation of Net Income), determined in accordance
with GAAP.

 

“Indebtedness” means any (i) obligations for borrowed money (including
obligations under financing leases), (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in the ordinary
course of the business of Holdings, the Borrower or any Borrower Subsidiary,
(iii) obligations, whether or not assumed, secured by Liens on property now or
hereafter owned or acquired, and (iv) guarantee or otherwise undertaking to pay,
whether voluntarily or involuntarily, any Indebtedness or other obligation of
any other Person, whether directly or indirectly.

 

“Initial Estimated Advance Schedule” shall have the meaning ascribed to such
term in Section 3.2(e) hereof.

 

“Intellectual Property” All of Borrower and each Borrower Subsidiary’s right,
title and interest in and to any trademarks, trade names, patents, trade
secrets, licenses, copyrights and other intellectual property and rights of
every description.

 

“Interest Expense” means the interest expense for the applicable period (to the
extent included in the computation of Net Income), determined in accordance with
GAAP.

 

“IPIC Texas” shall have the meaning set forth in the recitals.

 

“Leases” means, collectively, the leases or occupancy agreements between the
Borrower or any Borrower Subsidiary and any occupant of any Project, the leases
or operating agreements between the Borrower or any Borrower Subsidiary and its
landlords, and all other leases with respect to any space in the Projects.

 

“Lessor Contributions” means any amounts of cash incentives, rebates or tenant
improvement contributions payable by any Project lessor to Borrower or any
Borrower Subsidiary pursuant to a Project Lease or otherwise in connection with
Project development.

 

“Lessor Contribution Accounts” shall have the meaning given to such term in
Section 4.5 hereof.

 

“Lessor Estoppel Agreement” means, collectively, the separate Lessor Recognition
and Estoppel Agreements from each of Borrower or any Borrower Subsidiary’s
Project lessors. The form of the Lessor Estoppel Agreement to be executed prior
to the initial Advance for any Project is attached hereto as Exhibit K.

 

“Lien” means any voluntary or involuntary mortgage, security deed, deed of
trust, lien, pledge, assignment, security interest, title retention agreement,
financing lease, levy, execution, seizure, judgment, attachment, garnishment,
charge, or other encumbrance of any kind, including those contemplated by or
permitted in this Agreement and the other Loan Documents.

 

 11 

 

 

“Loan” the loan from the Lenders to the Borrower to be made pursuant to this
Agreement in the maximum stated principal amount of up to Two Hundred
Twenty-Five Million Eight Hundred Twenty-Eight Thousand One Hundred Sixty-Nine
and 12/100 Dollars ($225,828,169.12) and consisting of three components as
follows: (i) the Tranche 1 Committed Amount, (ii) the Tranche 2 Committed
Amount, and (iii) the Tranche 3 Committed Amount.

 

“Loan Documents” means, collectively, this Agreement, the Note, the Mortgages,
the Financing Statements, the Pledge of Membership Interest, the Assignments of
Contracts, the Assignments of Accounts, the Pasadena Documents, the Texas
Documents, the Westwood Documents, the Assignment and Assumption Documents, the
Pre-Opening Funding Agreement, together with any and all other documents
executed by the Borrower, Holdings or any Borrower Subsidiary, or others,
evidencing, securing or otherwise relating to the Loan and/or any Project as
they may from time to time be supplemented, modified, or amended by one or more
instruments entered into pursuant to the applicable provisions hereof.

 

“Loan Obligations” means the aggregate of all principal and interest owing from
time to time under the Note and this Agreement and all expenses, charges and
other amounts from time to time owing under the Note, this Agreement, and the
other Loan Documents and all covenants, agreements and other obligations from
time to time owing to, or for the benefit of, the Lenders pursuant to the Loan
Documents.

 

“Major Subcontractor” shall have the meaning ascribed to such term in section
4.1(c)(1)(ii) hereof.

 

“Material Adverse Effect” means that which reasonably could be deemed to be or
reasonably be expected to result in (a) a material impairment of the ability of
the Borrower, Holdings or any Borrower Subsidiary to fully and timely perform
any of its Loan Obligations; or (b) a material adverse effect on the Collateral
or the Liens in favor of the Lenders on the Collateral or the priority of such
Liens.

 

“Material Condemnation” means any condemnation or deed in lieu of condemnation
affecting any portion of the Improvements, any access from the Improvements to
public roads, or any portion of the parking area of any Project which materially
and adversely affects such Project, including, but not limited to, a failure to
satisfy code parking requirements.

 

“Maturity Date” means, September 29, 2023.

 

“Milwaukee Project” means that certain Project described on the attached Exhibit
O.

 

“Modification Agreement” shall have the meaning given to such term in the
recitals.

 

“Mortgaged Property” means, collectively, the real and personal property more
particularly described in the Mortgages now or hereafter executed by the
Borrower or any Borrower Subsidiary in favor of the Lenders.

 

 12 

 

 

“Mortgages” means, collectively, the separate Mortgage/Deed of Trust, Leasehold
Mortgage/Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filings from the Borrower or any Borrower Subsidiary in favor of the
Agent Lender, encumbering the Borrower or any Borrower Subsidiary’s interest in
each of the Projects, including, without limitation, those Mortgages listed on
the attached Exhibit N for each Existing Project, as assumed by Borrower or any
Borrower Subsidiary (as to the Texas Documents), and also including the Borrower
and each Borrower Subsidiary’s interest in each of the Properties, granting to
the Agent Lender, among other things, a first priority Lien on the Borrower and
each Borrower Subsidiary’s interest in each of the Properties and the
Improvements and a first priority security interest in certain Collateral and
assigning the Borrower and each Borrower Subsidiary’s interest in all Rents and
Leases. The form of the Mortgage/Deed of Trust (as applicable), Leasehold
Mortgage/Deed of Trust, Assignment of Rents and Leases, Security Agreement and
Fixture Filings to be executed prior to the initial Advance for any Project is
attached hereto as Exhibit D. Each Mortgage for a Project shall be in an amount
equal to no less than one hundred twenty percent (120%) of the Project Tranche
for such Project, unless otherwise agreed by Agent Lender; provided, however,
for all Existing Projects, the amount set forth in the Mortgage for such
Existing Project shall not be modified except as acceptable to Lender in
Lender’s sole discretion.

 

“Net Income” means the net income for the applicable period as determined in
accordance with GAAP (but excluding for purposes of determining any financial
ratios or EBITDA requirements (but not Excess Cash Flow) under this Agreement,
all extraordinary receipts and any Income Tax Expense on such extraordinary
receipts and any tax deductions or credits on account of such extraordinary
receipts).

 

“Note” means, collectively, (i) that certain Master Promissory Note dated
September 30, 2010 in the stated principal amount of $70,904,873.43, payable by
the Borrower to the order of TRS, as modified by the Modification Agreement to
increase the stated principal amount payable to the amount of $151,304,873.31
(the “TRS Note”) (ii) that certain Master Promissory Note September 30, 2010 in
the stated principal amount of $34,923,295.69, payable by the Borrower to the
order of ERS, as modified by the Modification Agreement to increase the stated
principal amount payable to the amount of $74,523,295.81 (the “ERS Note”),
evidencing the Borrower’s obligation to repay the aggregate outstanding
principal balance of the Loan to the Lenders. As used herein, the term “Note”
shall also mean, to the extent applicable, any Project specific note executed by
Borrower or any Borrower Subsidiary to Lenders evidencing a Project Tranche,
including, but not limited to, the Pasadena Note and the Westwood Note.

 

“Original Loan Agreement” shall have the meaning given to such term in the
recitals.

 

“Operating Account” shall have the meaning given to such term in Section 4.5
hereof.

 

“Operating Expense Advance” shall mean an Advance in the aggregate principal
amount of $4,000,000 disbursed in accordance with and subject to the terms and
conditions of the Fourth Modification Agreement.

 

“Parent” means iPic Entertainment Inc., a Delaware corporation.

 

“Parent Financials Test” means, as of the date of any particular financial
statement, (a) Parent does not have any material assets or liabilities other
than Equity Interests in the Borrower, and (b) for purposes of preparing
financial statements of Parent, the entire financial condition and all of the
financial operations of the Borrower and its subsidiaries will, in accordance
with GAAP, be consolidated into the financial condition and financial operations
of Parent.

 

 13 

 

 

“Parent IPO” means an initial public offering of the class A common stock of
Parent.

 

“Pasadena Documents” means the Pasadena Note and any and all other documents
and/or instruments executed by the Borrower to evidence and/or secure the
indebtedness evidenced by the Pasadena Note.

 

“Pasadena Note” means (i) that certain Promissory Note dated June 29, 2009 in
the stated principal amount of $3,176,482.06 from Borrower to TRS (the “TRS
Pasadena Note”) and (ii) that certain Promissory Note of even date herewith in
the stated principal amount of $1,564,535.94 from Borrower to ERS (the “ERS
Pasadena Note”) in the collective amount of the Project Tranche for the Pasadena
Project, evidencing the Borrower’s obligation to pay the aggregate outstanding
principal balance of the Project Tranche for the Pasadena Project to the
Lenders, together with interest thereon, as the same may be amended from time to
time. The Amount of the Pasadena Note may be modified, as determined by Lender
in Lender’s sole discretion, to reflect changes to the Pasadena Project Tranche.

 

“Pasadena Project” means the Project located at the One Colorado Shopping Center
located in Pasadena, California.

 

“Permits” means all licenses, permits and certificates of the Borrower and each
Borrower Subsidiary and any of its Affiliates used or useful in connection with
the ownership, operation, use or occupancy of the Properties or the Projects,
including, without limitation, business licenses, state health department
licenses, food service licenses, alcoholic beverage licenses, licenses to
conduct business and all other permits, licenses and rights, obtained from any
governmental, quasi-governmental or private person or entity whatsoever
concerning ownership, operation, use or occupancy of the Properties or the
Projects.

 

“Permitted Force Majeure Delays” means delays in the construction of a Project
or in connection with the ability to obtain a temporary certificate of occupancy
for a Project (or any portion thereof) caused by any of the following: strikes
or other labor disputes, lock-outs, acts of God, shortage of or inability to
obtain labor, materials or tools, lawsuits brought by plaintiffs unaffiliated
with the Borrower, restrictions imposed or mandated by governmental or
quasi-governmental entities in issuing requisite approvals or consents, enemy
action, civil commotion, riots, fire, flood, earthquake, severe or inclement
weather, each of which events or circumstances must be beyond the reasonable
control of the Borrower or any Borrower Subsidiary.

 

“Permitted Holder” means each Person that holds Equity Interests of the Borrower
on the Second Restatement Effective Date, together with their Affiliates.

 

“Person” means any person, firm, company, corporation, partnership, joint
venture, limited liability company, trust, association, or government or any
agency or political subdivision thereof.

 

 14 

 

 

“Planned Project” shall mean each Project described on the attached Exhibit P.
Borrower shall have the right to substitute another Planned Project in lieu of
the Coral Springs Project, upon Lender’s consent, which consent shall not be
unreasonably withheld.

 

“Plans and Specifications” means the Plans and Specifications for each of the
Projects as prepared by the Architect for such Project.

 

“Pledge of Membership Interest” means, collectively, the Assignment and Pledge
of Membership Interest of even date with this Agreement among Holdings and Agent
Lender, pursuant to which Holdings pledges and grants to the Agent Lender a
first priority security interest in its membership interests in the Borrower as
security for the Loan Obligations, and the Amended and Restated Assignment and
Pledges of Membership Interests dated January 4, 2018 among the Borrower and the
Agent Lender, pursuant to which the Borrower pledges and grants to the Agent
Lender a first priority security interest in its membership interests in each of
Borrower Subsidiaries a party to this Agreement as security for the Loan
Obligations.

 

“Pre-Opening Funding Agreement” means that certain Agreement to Fund
Non-Approved Construction and Operation Costs, dated as of November 4, 2016,
among the Borrower, IPIC Texas and the Lenders.

 

“Project Development Budget” means a detailed estimation of the cost to
reconfigure (as to Existing Projects), acquire, construct, furnish, improve,
equip, stock and otherwise complete and establish a Project, which estimation
may include soft costs approved by Agent Lender in accordance with the terms and
conditions of Section 3.3 of this Agreement.

 

“Project Specific Due Diligence” means the due diligence items for a Project
required by Section 3.2(d) to be provided by Borrower for review and approval by
Agent Lender, as more particularly set forth in such Section, prior to Advances
of Loan proceeds or the use of Lessor Contributions to finance any Project
costs.

 

“Project Tranche” means the maximum amount available for Advances as proceeds
from the Loan with respect to each Existing Project, Planned Project or Future
Project, said Project Tranche being the lesser of (i) eighty percent (80%) of
the total remaining cost to develop such Project as set forth in the Project
Development Budget approved by the Agent Lender for such Project, or (ii) the
Available Committed Amount calculated at the time such Project and Project
Development Budget are approved by the Agent Lender for such Project; provided,
however, that the Project Tranche may be adjusted by Agent Lender from time to
time for changes in the Project Development Budget, overruns, cost-savings, or
for verified availability of Lessor Contributions, as provided herein. Without
limiting the foregoing, the Project Tranche for any Existing Project shall not
include previously incurred costs to acquire, construct or equip such Existing
Project, and such Project Tranche shall only include the remaining costs to
reconfigure such Existing Project.

 

 15 

 

 

“Projects” means, collectively, the Existing Projects, the Planned Projects, the
Milwaukee Project and Future Projects, being upscale “IPIC” cinema projects to
be constructed (as to Future Projects and Planned Projects) and/or renovated (as
to Existing Projects) and maintained (as to all Projects) on each of the
Properties, together with food preparation and dining areas, theatre seating,
concession areas, indoor common areas, outdoor common areas, and related
parking, landscaping and site improvements, all to be constructed and/or
renovated and maintained, as applicable, in accordance with the Plans and
Specifications, together with all Collateral used or useful in connection
therewith. Each Project shall be a cinema committed to a first class quality
experience to include film, food, wine and liquor, and service for customers
with core features including 40 to 52 seat auditoriums, (full recline) seating,
and food and beverage offering available before, during and/or after film
screenings, a bowling alley containing 10 to 24 lanes, and up to a 200 seat
restaurant.

 

“Properties” means the real estate upon which the Projects are located.

 

“Public Company Costs” means (a) costs, expenses and disbursements associated
with, related to or incurred in anticipation of, or preparation for compliance
with (x) the requirements of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith, (y) the provisions of the
Securities Act and the Exchange Act, as applicable to companies with
publicly-traded equity or debt securities, and (z) the rules of the national
securities exchange on which its equity or debt securities are traded, and (b)
costs and expenses associated with investor relations, shareholder meetings and
reports to shareholders or debtholders and listing fees.

 

“Records” means correspondence, memoranda, tapes, discs, microfilm, microfiche,
papers, books and other documents, or transcribed information of any type,
whether expressed in ordinary or machine language, and all filing cabinets and
other containers in which any of the foregoing is stored or maintained.

 

“Rents” means all rent and other payments of whatever nature from time to time
payable to Borrower or any Borrower Subsidiary pursuant to the Leases and any
other operating agreements, leases, subleases or other agreements for occupancy
of any portion of the Projects, or for retail space or other space at the
Projects.

 

“Required Borrower Funds” shall have the meaning assigned to such term in
Section 4.4(a) hereof.

 

“Scheduled Completion Date” means, as to each Projects (other than Existing
Projects, which are complete as of the date of this Agreement), the date by
which such Project is to be completed and open for business, and shall be no
later than fifteen (15) months after the initial Advance for such Project,
subject to reasonable extensions for Permitted Force Majeure Delays, with such
date to be certified by Borrower and Agent Lender upon the initial advance for
each Project other than the first Project by execution of the form attached
hereto as Exhibit E.

 

“Scheduled Interest Payment Date” means each January 1 and July 1; provided,
however, that if such date is not a Business Day, such payment date shall
automatically be deemed extended to the next Business Day.

 

“Scheduled Principal Payment Date” means each January 1; provided, however, that
if such date is not a Business Day, such payment date shall automatically be
deemed extended to the next Business Day.

 

 16 

 

 

“Second Restatement Effective Date” means the date on which the conditions
precedent in Section 3.1 hereof shall have been satisfied or waived.

 

“Subsidiary Sublease” shall have the meaning assigned, to such term in Section
7.14 hereof.

 

“Sweep Date” shall have the meaning assigned to such term in Section 4.5(d)
hereof.

 

“Texas Documents” means the any and all documents and/or instruments executed by
IPIC Texas to evidence and/or secure the indebtedness evidenced by the Note.

 

“Title Company” means any title insurance company approved by Agent Lender and
who insures any Mortgage.

 

“Title Policies” means, collectively, each of the mortgagee title insurance
policies issued by a Title Company for a Project in standard ALTA form insuring
(i) the Borrower or any Borrower Subsidiary’s leasehold interest in an amount
equal to the total amount of the Project Development Budget for such Project,
and (ii) the Lien on the leasehold interest of the Borrower or any Borrower
Subsidiary created by the Mortgage, in form reasonably satisfactory to Agent
Lender and in an amount equal to 120% of the Project Tranche for such Project;
provided, however, the Title Policy for each Existing Project shall not be less
than the amount of the Project Tranche identified in the Original Loan
Agreement.

 

“Total Approved Project Costs To Date” shall have the meaning ascribed to such
in section 4.1(m)(1) hereof.

 

“Tranche 1 Applicable Rate” shall have the meaning ascribed to such term in
Section 2.3(a).

 

“Tranche 1 Committed Amount” means a portion of the principal indebtedness of
the Loan in the maximum principal amount of $15,828,169.12, and any interest
accruing thereon. As of the Second Restatement Effective Date, the Tranche 1
Committed Amount has been fully Advanced.

 

“Tranche 2 Committed Amount” means a portion of the principal indebtedness of
the Loan in the maximum principal amount of $24,000,000.00, and any interest
accruing thereon. As of the Second Restatement Effective Date, the Tranche 2
Committed Amount has been fully Advanced.

 

“Tranche 3 Committed Amount” means a portion of the principal indebtedness of
the Loan in the maximum principal amount of One Hundred Eighty-Six Million and
No/100 Dollars ($186,000,000.00), and any interest accruing thereon. As of the
Second Restatement Effective Date, $120,774,812.18 of the Tranche 3 Committed
Amount has been Advanced.

 

“TRS” shall have the meaning set forth in the recitals.

 

“TRS Percentage” shall mean 67%, being TRS’s undivided interest in the Loan.
“UCC” shall have the meaning assigned to such term in Section 1.3 hereof.

 

 17 

 

 

“Village” means Village Roadshow Attractions USA Inc., a Delaware corporation.

 

“Village Note Payoff Advance” has the meaning set forth in Section 2.10.

 

“Village Subordinated Notes” means, collectively, (i) that certain Subordinated
Note, dated July 1, 2016, issued by the Borrower to Village in an aggregate
principal amount of $8,000,000.00 and (ii) that certain Subordinated Note, dated
September 30, 2016, issued by the Borrower to Village in an aggregate principal
amount of $7,000,000.

 

“VRGCC” shall have the meaning set forth in the recitals.

 

“VRGCC Texas” shall have the meaning set forth in the recitals.

 

“Westwood Documents” means the Westwood Note and any and all other documents
and/or instruments executed by the Borrower to evidence and/or secure the
indebtedness evidenced by the Westwood Note.

 

“Westwood Note” means, collectively, the Project specific notes executed by
Borrower in favor of the ERS and TRS in the collective amount of the Project
Tranche for the Westwood Project, evidencing the Borrower’s obligation to pay
the aggregate outstanding principal balance of the Project Tranche for the
Westwood Project to the Lenders, together with interest thereon, as the same may
be amended from time to time. The amount of the Westwood Note may be modified,
as determined by Lender in Lender’s sole discretion, to reflect changes to the
Westwood Project Tranche.

 

“Westwood Project” means the Project located at the Avco Center located in Los
Angeles, California.

 

1.2       Singular terms shall include the plural forms and vice versa, as
applicable, of the terms defined.

 

1.3       Terms contained in this Agreement shall, unless otherwise defined
herein or unless the context otherwise indicates, have the meanings, if any,
assigned to them by Uniform Commercial Code in effect in the State of Alabama
from time to time (the “UCC”).

 

1.4       All accounting terms used in this Agreement shall be construed in
accordance with GAAP, except as otherwise defined or expressly set forth herein.

 

1.5       All references to any Loan Documents or instruments shall be deemed to
refer to such documents or instruments as they may hereafter be extended,
renewed, modified, or amended and all replacements and substitutions therefor.

 

1.6       All references to Exhibits and Schedules shall mean Exhibits and
Schedules to this Agreement, unless the context refers to another document, and
each such Exhibit and Schedule shall be deemed a part of this Agreement to the
same extent as if it were set forth in its entirety wherever reference is made
thereto.

 

 18 

 

 

ARTICLE II.
THE LOAN AND COLLATERAL

 

2.1       The Loan The Lenders severally and not jointly agree, subject to the
terms of this Agreement and the other Loan Documents, to make Advances of the
Loan to the Borrower during the Commitment Period as provided herein. Borrower,
Holdings and Borrower Subsidiaries have made the covenants, representations and
warranties herein and in the other Loan Documents as a material inducement to
the Lenders to make the Loan and enter this Agreement. The maximum aggregate
principal amount of the Loan to be made by the Lenders hereunder shall be the
sum of (i) the Tranche 1 Committed Amount; (ii) the Tranche 2 Committed Amount
and (iii) the Tranche 3 Committed Amount and of such amount, TRS agrees to make
Advances to the Borrower in an aggregate principal amount not to exceed the TRS
Percentage and ERS agrees to make Advances to the Borrower in an aggregate
principal amount not to exceed the ERS Percentage. On each occasion when
Advances are to be made hereunder, each Lender shall concurrently make an
Advance in an amount in proportion to such Lender’s percentage.

 

Advances of the Loan by ERS shall be evidenced by the ERS Note and Advances of
the Loan by TRS shall be evidenced by the TRS Note; provided, however, that
Advances of the Loan relating to the Pasadena Project shall be evidenced by the
Pasadena Note and Advances of the Loan relating to the Westwood Project shall be
evidenced by the Westwood Note. Such Advances will bear interest and will be
payable in accordance with the terms and conditions set forth in this Agreement
and in the ERS Note as to Advances by ERS and the TRS Note as to Advances by
TRS, except in the case of the Pasadena Project and the Westwood Project, where
the terms and conditions of this Agreement and in the Pasadena Note or the
Westwood Note shall apply. The forms of all documents to be executed to evidence
and/or secure the Loan shall be subject to the Agent Lender’s approval. Unless
otherwise expressly set forth herein, any references to “Note” shall mean the
ERS Note and the TRS Note, collectively, as well as, to the extent applicable
and relating to the Pasadena Project, the Pasadena Note and, to the extent
applicable and as relating to the Westwood Project, the Westwood Note.
Notwithstanding the execution by Borrower of the Pasadena Note, the Westwood
Note or any Future Project-specific promissory notes as may be required by
Lender, in no event shall Lender be obligated to make Advances collectively
exceeding the Committed Amount. In connection with the foregoing, upon the
execution of the Pasadena Note, the Westwood Note and any Future
Project-specific promissory note(s) as may be required by Lenders, the stated
maximum principal amount of the ERS Note shall automatically be reduced by an
amount equal to the maximum principal amount of the applicable Project-specific
promissory notes made in favor of the ERS, and the stated maximum principal
amount of the TRS Note shall automatically be reduced by an amount equal to the
maximum principal amount of the applicable Project-specific promissory notes
made in favor of the TRS.

 

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2.2       Security for the Loan.

 

The Loan will be secured by a first mortgage lien against and first priority
security interest in the Collateral; except that the Pasadena Project shall only
secure the Loan Obligations relating to the Pasadena Project and the Westwood
Project shall only secure the Loan Obligations relating to the Westwood Project.
All of the Collateral shall stand as one general, continuing security for all of
the Loan Obligations until all of the Loan Obligations have been paid and
satisfied in full; except that the Pasadena Project shall only stand as a
general, continuing security for the Loan Obligations relating to the Pasadena
Project and the Westwood Project shall only stand as a general, continuing
security agreement for the Loan Obligations relating to the Westwood Project. In
connection with the security interest granted to the Lenders as provided for
herein and in the other Loan Documents, Lender may file such financing
statements (including amendments thereto and continuation statements thereof) as
the Agent Lender may from time to time require (the “Financing Statements”),
with Borrower to be responsible for all fees and expenses associated with the
same. The Borrower shall also cause Holdings to pledge to the Lenders all of its
membership interests in the Borrower as security for the Loan by execution of
the Pledge of Membership Interest, and such pledge shall be a first priority
security interest.

 

2.3       Interest Rate.

 

(a)       Tranche 1 Committed Amount:

 

(1)       Except during any period of time in which an Event of Default then
exists, interest shall accrue on the unpaid principal balance of all Advances
under the Tranche 1 Committed Amount at the Tranche 1 Applicable Rate. Upon the
occurrence of an Event of Default, interest shall thereafter accrue on the
unpaid principal balance of all Advances under the Loan at the Default Rate in
accordance with Section 2.5(b). As used herein, “Tranche 1 Applicable Rate”
shall mean the following amounts for the following periods:

 

(i)       from the Existing Loan Agreement Effective Date through and including
September 30, 2011, a per annum rate of five percent (5.0%) fixed;

 

(ii)       from October 1, 2011 through and including September 30, 2012, a per
annum rate of five and 50/100 percent (5.5%) fixed;

 

(iii)       from October 1, 2012 through and including September 30, 2013, a per
annum rate of six percent (6.0%) fixed;

 

(iv)       from October 1, 2013 through and including September 30, 2014, a per
annum rate of six and 50/100 percent (6.5%);

 

(v)       from October 1, 2014 through and including September 30, 2015, a per
annum rate of seven percent (7.0%) fixed;

 

(vi)       from October 1, 2015 through and including September 30, 2016, a per
annum rate of seven and 50/100 percent (7.5%) fixed;

 

(vii)       from October 1, 2016 through and including the date all Obligations
are paid in full, a per annum rate of eight percent (8.0%) fixed;

 

(2)       All interest will be calculated on the basis of a 360 day year
comprised of twelve (12) consecutive thirty (30) day months.

 

 20 

 

 

(3)       Interest will accrue on each Advance of the Loan until repaid in full;
however, accrued interest will be due and payable as more particularly set forth
in Section 2.4 below.

 

(b)       Tranche 2 Committed Amount:

 

(1)       Except during any period of time in which an Event of Default then
exists, interest shall accrue on the unpaid principal balance of all Advances
under the Tranche 2 Committed Amount at the Tranche 1 Applicable Rate then in
effect, which shall be subject to scheduled annual interest rate increases as
provided for in Section 2.3(a). Upon the occurrence of an Event of Default,
interest shall thereafter accrue on the unpaid principal balance of all Advances
under the Loan at the Default Rate in accordance with Section 2.5(b).

 

(2)       All interest will be calculated on the basis of a 360 day year
comprised of twelve (12) consecutive thirty (30) day months.

 

(3)       Interest will accrue on each Advance of the Loan until repaid in full;
however, accrued interest will be due and payable on a Project Tranche by
Project Tranche basis as more particularly set forth in Section 2.4 below.

 

(c)       Tranche 3 Committed Amount:

 

(1)       Except during any period of time in which an Event of Default then
exists, interest shall accrue on the unpaid principal balance of all Advances
under the Tranche 3 Committed Amount at the per annum rate of ten and 50/100
percent (10.5%) fixed. Upon the occurrence of an Event of Default, interest
shall thereafter accrue on the unpaid principal balance of all Advances under
the Loan at the Default Rate in accordance with Section 2.5(b).

 

(2)       All interest will be calculated on the basis of a 360 day year
comprised of twelve (12) consecutive thirty (30) day months.

 

(3)       Interest will accrue on each Advance of the Loan until repaid in full;
however, accrued interest will be due and payable on a Project Tranche by
Project Tranche basis as more particularly set forth in Section 2.4 below.

 

2.4       Repayment of Loan.

 

(a)       Payment/Wire Instructions. Each payment of the Loan Obligations shall
be paid directly to the Agent Lender, for the account of ERS and TRS, in lawful
money of the

 

United States of America, in immediately available funds by wire transfer as set
forth below, or to such other place or account as the Agent Lender shall
designate in writing to the Borrower at least three (3) Business Days prior to
the due date of the first payment to which such change is to apply:

 

If for the account of TRS:

 

  Bank: State Street Bank & Trust   ABA #: 011000028   Account #: 00042549  
Beneficiary: RSA     201 S.  Union Street, Montgomery, Alabama 36130  
Attention: Jen Healey Reference: Acct# BDMO(TRS)

 

 21 

 

 

If for the account of ERS:

 

  Bank: State Street Bank & Trust   ABA #: 011000028   Account #: 00042663  
Beneficiary: RSA     201 S.  Union Street, Montgomery, Alabama 36130  
Attention: Jen Healey   Reference: Acct# BDLO(ERS)

 

In each case, not later than 3:00 p.m., Montgomery, Alabama time on the date on
which such payment shall become due.

 

(b)       Payment of Interest. Interest under the Loan shall be repaid as
follows:

 

(1)       Tranche 1 Committed Amount. With respect to the Tranche 1 Committed
Amount, being that portion of the Advanced and outstanding principal balance of
the Loan assumed by Borrower on the Existing Loan Agreement Effective Date,
commencing on January 1, 2011, and on each Scheduled Interest Payment Date
thereafter through and including the Scheduled Interest Payment Date immediately
preceding the Maturity Date, all accrued but unpaid interest on the outstanding
principal balance of the Tranche 1 Committed Amount shall be due and payable.

 

(2)       Tranche 2 Committed Amount. With respect to the Tranche 2 Committed
Amount, being that portion of the outstanding principal balance of the Loan to
be Advanced to Borrower in connection with the Existing Projects and Planned
Projects, commencing on January 1, 2011, and on each Scheduled Interest Payment
Date thereafter through and including the Scheduled Interest Payment Date
immediately preceding the Maturity Date, all accrued but unpaid interest on the
outstanding principal balance of all Advances of the Tranche 2 Committed Amount
shall be due and payable.

 

(3)       Tranche 3 Committed Amount. Interest shall be paid on Advances of the
Tranche 3 Committed Amount as follows:

 

(i)       With respect to that portion of the Tranche 3 Committed Amount
Advanced to Borrower in connection with the Existing Projects and Planned
Projects, commencing on January 1, 2012, and on each Scheduled Interest Payment
Date thereafter through and including the Scheduled Interest Payment Date
immediately preceding the Maturity Date, all accrued but unpaid interest on the
outstanding principal balance of all Advances of the Tranche 3 Committed Amount
Advanced in connection with the Existing Projects and Planned Projects shall be
due and payable.

 

 22 

 

 

(ii)       With respect to the Tranche 3 Committed Amount, being that portion of
the outstanding principal balance of the Loan to be Advanced to Borrower in
connection with a Future Project, interest shall be payable on Advances of such
Tranche 3 Committed Amount on a Project Tranche by Project Tranche basis as
follows: on the first Scheduled Interest Payment Date following the earlier to
occur of (1) the date which is six (6) months following the opening of a Future
Project funded by any proceeds of the Project Tranche designated for such Future
Project, or (2) the date which is twenty-one (21) months following the initial
Advance of the Project Tranche designated for such Future Project, and on each
Scheduled Interest Payment Date thereafter through and including the Scheduled
Interest Payment Date immediately preceding the Maturity Date, all accrued but
unpaid interest on the outstanding principal balance of all Advances of the
Project Tranche designated for such Future Project shall be due and payable.

 

(iii)       With respect to the Tranche 3 Committed Amount, being that portion
of the outstanding principal balance of the Loan Advanced on the Second
Restatement Effective Date in connection with the Village Note Payoff Advance,
interest shall be payable commencing on the first Scheduled Interest Payment
Date following the Second Restatement Effective Date, and on each Scheduled
Interest Payment Date thereafter through and including the Scheduled Interest
Payment Date immediately preceding the Maturity Date.

 

(iv)       With respect to the Tranche 3 Committed Amount, being that portion of
the outstanding principal balance of the Loan Advanced in connection with the
Operating Expense Advance, interest on Advances of the Operating Expense Advance
shall be payable commencing on the first Scheduled Interest Payment Date
following the initial Advance of the Operating Expense Advance, and on each
Scheduled Interest Payment Date thereafter through and including the Scheduled
Interest Payment Date immediately preceding the Maturity Date.

 

(4)       On the Maturity Date, all accrued and unpaid interest on the Loan,
including any interest accrued under (1)-(3) above, together with the
outstanding principal amount of the Loan and all other sums owing to the Lenders
under this Agreement and the other Loan Documents shall be due and payable in
full to the Agent Lender.

 

(c)       Payment of Principal. Principal under the Loan shall be repaid as and
when required by section 4.5(h) hereof. On the Maturity Date, the outstanding
principal balance of the Loan, together with all accrued and unpaid interest on
the Loan and all other sums owing to the Lenders under this Agreement and the
other Loan Documents shall be due and payable in full to the Agent Lender,

 

(d)       All payments hereunder shall be made to Agent Lender. Agent Lender
shall coordinate all allocations of payments between the Lenders.

 

(e)       Principal repayments and prepayments may not be reborrowed.

 

 23 

 

 

(f)       If any Advance would otherwise constitute an “applicable high-yield
discount obligation” within the meaning of Section 163(i) of the Code, or any
successor provisions (an “AHYDO”), then, at the end of each “accrual period” (as
defined in Section 1272(a)(5) of the Code) ending after the fifth anniversary of
the making of such Advance, the Borrower shall prepay for cash a portion of such
Advance equal to the Mandatory Principal Prepayment Amount. The “Mandatory
Principal Prepayment Amount” will equal the portion of the Advance required to
be prepaid to prevent the Advance from being treated as an AHYDO within the
meaning of Section 163(i)(l) of the Code. The redemption price for the portion
of the Advance prepaid will be 100% of the principal amount thereof, plus any
accrued interest thereon to the date of prepayment. This provision is intended
to cause each of the Advances not to be treated as an AHYDO and shall be
interpreted consistently therewith.

 

2.5       Late Charges On Overdue Installments; Default Rate; Collection Costs.

 

(a)       If any scheduled payment of principal or interest or other agreed
charge is not paid within two (2) Business Days of the due date thereof,
Borrower agrees to pay to Lenders a late charge equal to five percent (5%) of
the amount of the payment or charge which is late.

 

(b)       Upon the occurrence of any Event of Default, the Borrower agrees to
pay interest to the Lenders at the Default Rate on the aggregate outstanding
Loan Obligations (including accrued interest) until the earlier of (i) payment
in full of all Loan Obligations or (ii) Lender agrees, in its sole and absolute
discretion, to permit Borrower to cure such Event of Default. Such interest
shall continue to be due and payable when required by this Agreement (whether on
a payment date for interest only, on a payment date for payment of interest and
principal, on the Maturity Date, or upon an acceleration by Lenders pursuant to
the terms of this Agreement).

 

(c)       The Borrower will also pay to the Lenders, in addition to amounts
otherwise due as provided above, all reasonable costs actually incurred by
Lenders in the course of collecting, securing, or attempting to collect or
secure the Note or otherwise in connection with the Loan, this Agreement and the
other Loan Documents, including, without limitation, court costs and reasonable
attorneys’ fees, including reasonable attorneys’ fees related to any
Project-specific Loan Documents, due diligence reviews or closings or related to
any appellate and bankruptcy proceedings. Except as otherwise required herein
with respect to Project-specific closings, such amounts shall be due and payable
within thirty (30) days of Agent Lender’s written request for the same. Payment
of such amounts shall be required regardless of the availability of Excess Cash
Flow. Amounts of such costs and expenses related to Project-specific closings
and development (as opposed to costs of collection and enforcement) may be
included in Project Development Budgets.

 

2.6       Expiration/Termination of Lenders’ Commitment to Lend. Notwithstanding
any other provision of this Agreement, the Lenders shall have the right to
terminate their commitment to make any Advance hereunder (i) at any time after
the expiration of the Commitment Period without further notice to the Borrower;
provided, however, Advances shall continue to be available to complete a Project
if the initial Advance for such Project was made prior to the expiration of the
Commitment Period and the Borrower is diligently pursuing completion of such
Project in a manner reasonably expected to achieve completion on or prior to
such Project’s Scheduled Completion Date, or (ii) upon the occurrence and
continuance of an Event of Default.

 

 24 

 

 

2.7       Cross-Collateralization and Cross-Default. The Loan and all Advances
thereunder shall be secured by the Collateral, including all Projects (but
excluding the Pasadena Mortgaged Property and the Westwood Mortgaged Property
which shall secure only that portion of the Loan and those Advances that relate
solely to the Pasadena Project and the Westwood Project, as applicable; as
evidenced by the Pasadena Note and the Westwood Note respectively), and
Holdings, the Borrower and each Borrower Subsidiary agree that the Collateral
described in each of the respective Loan Documents, excluding the Pasadena
Mortgaged Property and the Westwood Mortgaged Property, shall secure, in
addition to the Project Tranche designated for such Project and other Loan
Obligations described therein, and on a pari passu basis with each of the other
Project Tranches, the Tranche 1 Committed Amount, the Tranche 2 Committed Amount
and the Tranche 3 Committed Amount, the Loan Obligations under each of the other
Loan Documents, as the same may hereafter be renewed, modified, amended or
extended. The Loan Documents also are hereby cross-defaulted with one another
and Holdings, the Borrower and each Borrower Subsidiary agree that the
occurrence of a Default or an Event of Default pursuant to any of the Loan
Documents shall constitute an immediate Default Or Event of Default (without
need of notice or the expiration of any additional cure period other than as may
be specified in such Loan. Documents) under all other Loan Documents.

 

2.8       Grant of Lien and Security Interest.

 

(a)       As security for the prompt satisfaction of all Loan Obligations,
Holdings, the Borrower and each Borrower Subsidiary hereby assigns, transfers,
and sets over to the Agent Lender, for the benefit of both Lenders, all of
Holdings, the Borrower’s and each Borrower Subsidiary’s right, title and
interest of whatever kind, nature or description in and to, and grants the Agent
Lender, for the benefit of both Lenders, a lien on and security interest in the
Collateral; provided, however, that the Pasadena Project and the Westwood
Project shall only serve as security for the prompt satisfaction of all Loan
Obligations relating to the Pasadena Project and the Westwood Project,
respectively.

 

(b)       No submission by Holdings, the Borrower or any Borrower Subsidiary of
a schedule or other particular identification of Collateral shall be necessary
to vest in the Lenders security title to and a security interest in each and
every item of Collateral now existing or hereafter created and acquired, but
rather such title and security interest shall vest in the Lenders immediately
upon the creation or acquisition of any item of Collateral hereafter created or
acquired, without the necessity for any other or further action by Holdings, the
Borrower or any Borrower Subsidiary.

 

2.9       Maintenance of Lien.

 

(a)       Holdings, the Borrower and each Borrower Subsidiary authorize the
Agent Lender to file one or more Financing Statements (including initial
financial statements and continuation and amendment statements) to perfect the
Lenders’ lien on and security interest in the Collateral pursuant to the UCC,
such Financing Statements to be in form and substance as required by the Agent
Lender.

 

 25 

 

 

(b)       Holdings, the Borrower and each Borrower Subsidiary hereby appoints
the Lenders as its attorney-in-fact (without requiring the Lenders to act as
such) to perform, upon the occurrence and continuance of an Event of Default,
all acts that the Agent Lender deems appropriate to perfect and continue the
Lenders’ lien on and security interest in the Collateral and to protect and
preserve the Collateral.

 

(c)       In connection with the Agent Lender’s lien on and security interest in
the Collateral, Holdings, the Borrower and each Borrower Subsidiary will;

 

(1)       Execute and deliver, and cause to be executed and delivered, such
documents and instruments, including amendments to the Loan Documents and
Financing Statements (including amendments thereto and continuation statements
thereof) in form satisfactory to the Agent Lender, from time to time, as the
Agent Lender may specify, and pay, or reimburse the Agent Lender upon demand for
payment, all costs and taxes of filing or recording the same in such
jurisdictions as the Agent Lender may designate; and

 

(2)       Take such other steps as the Agent Lender, from time to time, may
reasonably direct to protect, perfect, and maintain the Lenders’ lien on and
security interest in the Collateral.

 

2.10       Village Note Payoff Advance. The Lenders severally agree to make an
Advance on the Second Restatement Effective Date under the Tranche 3 Committed
Amount in an aggregate principal amount equal to $18,000,000 (the “Village Note
Payoff Advance”), the proceeds of which shall be used on the Second Restatement
Effective Date to repay in full the outstanding principal and interest under the
Village Subordinated Notes; provided that, not less than five Business Days
prior to the Second Restatement Effective Date (or such shorter period as may be
agreed by the Agent Lender in its sole discretion) the Borrower shall have
delivered to the Agent Lender a request for an Advance substantially in the form
of Exhibit H (but without including any Project-related information and with
such other modifications as may be reasonably acceptable to Agent Lender).

 

ARTICLE III.
CONDITIONS TO THE LOAN

 

The Lenders’ obligation to enter into this Agreement, and to make any Advance
under the Loan shall be effective only upon fulfillment of the following
conditions, and the conditions stated elsewhere in this Agreement and in the
other Loan Documents, each of which shall be fulfilled in a manner reasonably
satisfactory to the Agent Lender.

 

3.1       Conditions Precedent to this Agreement. The obligation of the Lenders
to enter into this Agreement is subject to the following conditions precedent:

 

(a)       Organizational Documents. Receipt and approval by the Agent Lender of
a certificate by the Borrower, dated on or about the date hereof, attaching (i)
certified copies of the Articles of Organization and the organizational
documents of Holdings, the Borrower and each Borrower Subsidiary and all
amendments thereto, (ii) resolutions evidencing the limited liability company
action or corporate action (as applicable) taken by Holdings, the Borrower and
each Borrower Subsidiary authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents and the consummation of the
transactions contemplated hereby and thereby, and (iii) certifying as to the
incumbency and signatures of the officers signing this Agreement and each other
document to be delivered pursuant hereto.

 

 26 

 

 

(b)       Payment of Fees. Payment by the Borrower of all out-of-pocket costs,
fees and reasonable expenses required by this Agreement, including, without
limitation, the Lenders’ reasonable attorneys’ fees and the recording costs.

 

(c)       Execution and Delivery of Loan Documents. Receipt and approval by the
Agent Lender of original executed counterparts of this Agreement, the Pledge of
Membership Interests, and, if required by the Agent Lender, recording or filing
of documents evidencing or securing this Agreement and all such other documents
(including Financing Statements), all in form and content satisfactory to the
Agent Lender.

 

(d)       Legal Opinion. An opinion of counsel for Holdings, the Borrower and
each Borrower Subsidiary, dated as of the date hereof, in form and content
satisfactory to the Agent Lender, together with any other local counsel opinions
as may be required as a result of issues of applicable law or Project locations.

 

(e)       Certificate of Existence. A certificate of good standing dated no
earlier than thirty (30) days prior to the date of this Agreement, to evidence
that Borrower, each Borrower Subsidiary and Holdings is validly existing and in
good standing (where such concept is applicable) in its jurisdiction of
organization.

 

(f)       Consummation of Transactions. The Parent IPO shall be consummated
substantially simultaneously with the entering into of this Agreement.

 

(g)       Cancellation of Subordinated Notes. The Lenders shall have received
satisfactory evidence that the Existing Subordinated Notes shall have been
cancelled (or, in the case of the Village Subordinated Notes, repaid).

 

3.2       Project Approval: Advances For Project Costs

 

(a)       Multiple Projects. The parties hereto acknowledge and agree that
proceeds from the Loan (other than the Village Note Payoff Advance and Operating
Expense Advance) (and under certain conditions as herein provided, Lessor
Contributions) are to be used for purposes of financing all costs and/or
expenses incurred in connection with leasing, acquiring, developing, opening,
and operating the Projects described herein. Generally, the parties contemplate
that in addition to the Existing Projects and Planned Projects, up to
approximately twenty (20) different Projects may be approved and developed by
the Borrower, some of which will be developed simultaneously, at an estimated
cost of approximately $5,000,000 per Project site. The parties, however,
acknowledge, that the cost per Project will differ and will be more accurately
estimated in each Project Development Budget and that the number of Projects may
exceed twenty (20) depending on availability of Advances hereunder,
identification and approval of acceptable Project sites, and satisfaction of
funding requirements pursuant to this Agreement and the Loan Documents.

 

 27 

 

 

(b)       General Project Parameters. Each Project (whether Borrower is
initially requesting Advances of the Loan therefor or for which Borrower is
proposing to initially invest Lessor Contributions in accordance with Section
4.5) must either (i) satisfy all General Project Parameters or (ii) be
separately approved by the Agent Lender (each such Project qualifying under (i)
or (ii) being herein referenced as an “Approved Project”). No Advances or Lessor
Contributions shall be used by Borrower or any Borrower Subsidiary for Projects
not qualifying as an Approved Project.

 

(c)       Alabama Project. Borrower hereby agrees to investigate and in good
faith strongly consider a potential Project site in the Birmingham, Alabama
metropolitan area; provided, however, that notwithstanding any commercially
reasonable determination by the Borrower after such investigation that
Birmingham, Alabama is not a viable option for a Project location, Borrower
shall continue to consider other suitable Project sites in the State of Alabama
as the same may be presented to Borrower.

 

(d)       Initial Advance or Investment for each Project/Project Specific Due
Diligence.

 

(1)       Assuming a Project has qualified as an Approved Project, prior to
making the initial Advance of Loan Proceeds therefor or prior to the Borrower
using any Lessor Contributions to pay for costs and/or expenses incurred in
connection with such Project, the Agent Lender must first have received,
reviewed and approved those items set forth on the attached Exhibit F (the
“Project Specific Due Diligence”) relating to such Project. By separate
agreement, Borrower and Agent Lender may document agreements regarding funding
limitations for a Project based upon the timing or availability of any Project
due diligence items. As indicated in Exhibit F, certain Project Specific Due
Diligence involves Project-specific loan documentation and collateral due
diligence which must be in place prior to Project commencement; therefore, as to
such items, Lenders reserve full reasonable review and approval rights to the
same (the “Priority Project Due Diligence”). As to all other Project Specific
Due Diligence, Lenders agree that their review and comments shall primarily
focus on issues which the Lenders believe in good faith reasonably impact the
development or value of the proposed Project or Collateral or issues otherwise
specifically addressed by this Agreement. Notwithstanding the foregoing,
acknowledging the difficulty in exactly establishing the standard of review for
non-Priority Project Due Diligence and the importance to Lenders in having a
complete and accurate set of Project Specific Due Diligence for every Project,
Borrower and each Borrower Subsidiary agrees to reasonably cooperate with Agent
Lender in responding to comments and questions regarding the Project Specific
Due Diligence.

 

 28 

 

 

(2)       The review and approval of Project-Specific Due Diligence for a new
Project will require a Project-specific closing process involving Agent Lender’s
and Lender’s legal counsel’s review of Project-specific due diligence as well as
the drafting, execution, and recording or filing, as applicable, of
Project-specific Loan Documents, including, without limitation, a Project
Mortgage, Financing Statements, Assignment of Contracts, and Lessor Estoppel
Agreement. Borrower shall be responsible for payment of Lenders’ expenses and
costs associated with such Project-specific closings at such closing, including,
without limitation, any recording or filing fees and reasonable attorneys’ fees
and expenses, but such costs and expenses may be included in Project Development
Budgets. Lenders’ attorneys’ fees for Project-specific closings shall not exceed
$20,000 for each Project, exclusive of any third party expenses incurred by
Lenders (e.g., title searches, UCC searches, Secretary of State certifications,
etc.). Notwithstanding the foregoing, such cap on Lenders’ attorneys’ fees (i)
shall not apply in the event additional attorneys’ fees are incurred as a result
of a lack of good faith cooperation by the Borrower or any Borrower Subsidiary
or Borrower or any Borrower Subsidiary’s legal counsel in connection with the
providing of due diligence required by this Agreement for new Projects, (ii)
shall not apply in the event additional attorneys’ fees are incurred as a result
of unforeseen legal issues or other circumstances relating to a specific
Project, and (iii) shall not apply to any enforcement or collection efforts or
any other legal fees and expenses for which Borrower or any Borrower Subsidiary
is otherwise responsible pursuant to this Agreement or any other Loan Document.

 

(e)       Estimated Advance Schedule. As part of the Project Specific Due
Diligence for each Project, Borrower shall submit an estimated Advance schedule
for the applicable Project substantially in the form of estimated Advance
schedule attached hereto as Exhibit G (the “Initial Estimated Advance
Schedule”).

 

3.3       Project Development Budget Review and Revision: Reallocation of
Committed Amount.

 

(a)       Each Project Development Budget shall be subject to the initial review
and approval of Agent Lender, such review not to be unreasonably withheld or
delayed. Borrower agrees to cooperate with Agent Lender in providing such
additional information needed by Agent Lender to review and evaluate the
accuracy and completeness of each Project Development Budget.

 

(b)       In the event the Project Development Budget for any proposed Project
site proposes to pay for all or a portion of such development costs and/or
expenses with proceeds from the Loan, the total amount of Loan proceeds required
by such Project Development Budget may not exceed the lesser of (i) the
Available Committed Amount or (ii) eighty percent (80%) of the total costs to
develop the Project and do all things necessary for the opening of such Project,
as set forth in the Project Development Budget.

 

(c)       Once a Project Development Budget for an Approved Project is approved
by Agent Lender, an amount equal to eighty percent (80%) of the total remaining
costs to develop the Project as shown on such Project Development Budget shall
constitute the “Project Tranche” applicable thereto. The parties anticipate that
changes to Project Development Budgets may be desired by Borrower in the course
of developing a Project through reallocations among line items, cost-savings or
cost overruns. Such changes to Project Development Budgets may be made by
Borrower with prior notice to Agent Lender, but without Agent Lender approval or
consent as provided in Section 4.1(f) hereof. Notwithstanding the foregoing, any
changes to the amount of a Project Tranche (either increases or decreases) shall
be subject to Agent Lender’s prior written consent, which consent shall not be
unreasonably withheld as long as such changes will not result in a negative
Available Committed Amount and Agent Lender reasonably believes the new proposed
Project Tranche for the Project remains sufficient to permit the completion of
the Project. In the event the Agent Lender consents to any modification to a
Project Tranche amount, the Available Committed Amount will be adjusted upward
or downward accordingly. To the extent that Project Development Budget changes
by Borrower result in increased Project costs for which there is no Available
Committed Amount sufficient to permit such an increase in the Project Tranche,
Borrower shall be responsible for paying the full amount of such Deficiency, as
hereinafter provided. To the extent an approved modification to an existing
Project Tranche amount results in (i) an increase to the Available Committed
Amount with respect to Advances for an Existing Project or Planned Project, the
amount of such increase shall then be available for other Existing Projects or
Planned Projects, subject, however, to appropriate and acceptable adjustments to
the Project Development Budgets for such other Existing Projects or Planned
Projects or (ii) an increase to the Available Committed Amount with respect to
Advances for a Future Project, the amount of such increase shall then be
available for other Future Projects, subject, however, to appropriate and
acceptable adjustments to the Project Development Budgets for such other Future
Projects.

 

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(d)       Intentionally Omitted.

 

In the event the Lenders, at their option, elect to make one or more Advances
prior to receipt and approval of all items required by this Article III, such
election shall not obligate the Lenders to make any subsequent Advance until the
applicable conditions are timely satisfied.

 

ARTICLE IV.
ADVANCES OF THE LOAN FOR EACH PROJECT

 

4.1       Disbursement Procedure.

 

(a)       Tranche 1 Committed Amount and Tranche 2 Committed Amount; Milwaukee
Project. Borrower acknowledges and agrees that the Tranche 1 Committed Amount
and the Tranche 2 Committed Amount are each fully Advanced as of the date of
this Agreement. Borrower further acknowledges and agrees that no further
Advances shall be permitted with respect to the Milwaukee Project.

 

(b)       Tranche 3 Committed Amounts. With respect to Advances of the Tranche 3
Committed Amount (other than in respect of the Village Note Payoff Advance
(which shall be Advanced in accordance with Section 2.10 hereof) and the
Operating Expense Advance (which has been fully Advanced as of the date hereof
and no further Advances are available related thereto)), upon the Agent Lender’s
receipt and approval, as and to the extent required by this Agreement, of
Project Specific Due Diligence for a Project (including, without limitation, the
Project Development Budget), the Lenders agree, on the terms and conditions and
relying on the representations set forth herein, to lend to the Borrower an
amount not to exceed:

 

(1)       as to each Project, an amount equal to the Project Tranche for such
Project calculated pursuant to Section 3.3(c) above; and

 

(2)       as to all Projects in the aggregate, the lesser of (i) the Tranche 3
Committed Amount less any Tranche 3 Committed Amount previously advanced for any
Existing Project, Planned Project, Future Project, the Village Note Payoff
Advance and Operating Expense Advance and (ii) the aggregate principal amount of
all established Project Tranches for Existing Projects, Planned Projects and
Future Projects, as the same may be adjusted from time to time pursuant to
Section 3.3(c) above, less any sums not identified in any Project Development
Budget (as the same may be amended as permitted herein) but which are reasonably
identified by the Agent Lender as amounts required to complete the development
of any Existing Projects and Planned Projects (i.e., any “overrun” amounts),
however, an Advance for any overrun amount is subject to the Agent Lender’s
approval, in its sole discretion.

 

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(c)       Subject to compliance by Holdings, the Borrower and each Borrower
Subsidiary with all of the provisions of this Agreement and so long as no
Default or Event of Default then exists, Loan proceeds applicable to each
Project shall be disbursed by the Lenders making Advances in accordance with the
following procedures:

 

(1)       Not less than five (5) Business Days before the date on which the
Borrower desires an Advance for a Project, the Borrower shall submit to the
Agent Lender a request for an Advance in the form attached hereto as Exhibit H.
A separate Advance request must be completed for each Project for which an
Advance is requested. While Advances may be made simultaneously to finance costs
of more than one Project, Advances shall be made not more than once each
calendar month, and the Borrower hereby acknowledges and agrees that it must
coordinate requests for multiple Projects such that the Lenders are not required
to Advance more than once per month. Notwithstanding anything to the contrary
herein provided, no Advances shall be made during the last five (5) Business
Days in September of any year. Each request for an Advance shall identify the
Project for which such Advance is made with specificity, must be signed by an
Authorized Representative, must be submitted in compliance with the provisions
of Section 9.7 herein (with an e-mail transmission notification to each of
hunter.harrell@rsa-al.gov, rachel.daniels@rsa-al.gov. and steve.timms@rsa-al.gov
(or such other e-mail addresses provided to Borrower by the Agent Lender) as to
the incoming Advance request), and must be accompanied by the following:

 

(i)       a copy of the Project Development Budget for such Project, together
with a cost breakdown by line item showing the cost of Improvements and any
budgeted soft costs spent to the date of the requisition and showing the
percentage of completion, certified by the Borrower as correct;

 

(ii)       AIA Documents G702 and G703 and conditional lien waivers from the
General Contractor and any Major Subcontractor (as hereinafter defined) and
invoices supporting all nonconstruction costs. As used herein “Major
Subcontractor” means any subcontractor or supplier of materials entering into
contracts for services and/or supply of materials for the Project in an amount
greater than $50,000;

 

(iii)       unless not available in a Project jurisdiction or otherwise waived
by Agent Lender for a Project, an endorsement to the Title Policy which brings
the effective date of the Title Policy insuring the Mortgage forward to the date
of such Advance, which shows no unapproved title exceptions, which evidences to
the Lenders’ satisfaction that there has been no change in the status of the
title to the Property or the Borrower’s interest therein or creation of any new
encumbrances thereon, or occurrence of any event that could in Lenders’ opinion
impair the priority of the Lien of the Mortgage as of the time of each advance,
and which increases the amount of title insurance thereunder, and otherwise is
in form and content acceptable to the Lenders;

 

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(iv)       evidence in form satisfactory to the Agent Lender that the Borrower
has injected the Required Borrower Funds as to the Advance made the basis of
such request in the manner described in Section 4.4 below;

 

(v)       a certificate of Borrower, Holdings and Borrower Subsidiaries to the
effect that (1) the representations and warranties made by the Borrower,
Holdings and Borrower Subsidiaries in this Agreement and all other Loan
Documents are true and correct on and as of the date of the making of such
request for an Advance with the same force and effect as if made on and as of
such date, (2) no Default or Event of Default has occurred and is continuing,
(3) all completed construction is substantially in accordance with the Plans and
Specifications for such Project, (4) all construction and nonconstruction costs
for the payment of which the Lenders have previously made Advances (including
Advances for the Project made the basis of the request and all prior Advances
for any other Project) have in fact been paid (except to the extent reasonable
reserves have been established with respect to amounts due or to become due),
(5) as of the date of such Advance, to its knowledge, none of Holdings, Borrower
or any Borrower Subsidiaries has any defenses, equities or setoffs with respect
to the Loan Obligations, (6) that the Project Development Budgets (as the same
may have been amended to the extent permitted herein and including any
amendments thereto of which Borrower is then providing the required notice to
Agent Lender) for all other Approved Projects remain true, accurate and complete
in all material respects and include all costs required to develop and open the
Projects to which they pertain; and (7) including such other certifications,
representations and warranties as Agent Lender may reasonably request; and

 

(vi)       such other items related to (i), (ii), (iii) and (iv) above as may be
reasonably required by the Agent Lender in connection with any such request for
an Advance.

 

(d)       Borrower appoints Hamid Hashemi and Paul Westra jointly and each of
them severally if more than one, as its agents to make requests for Advances and
to act as the Borrower’s authorized representatives (“Authorized
Representatives”) for purposes of this Agreement and the other Loan Documents.
Such Authorized Representatives may act by the joint and concurrent action of
all agents named above (if more than one), or by the sole and exclusive action
of any of the agents named above, acting alone. The Borrower may hereafter by
written notice to the Agent Lender appoint one or more other Authorized
Representatives or change Authorized Representatives to make such requests,
provided any such notice is not effective until actually received by the Agent
Lender.

 

(e)       From time to time, at Agent Lender’s option, the progress of the
development and construction of each of the Projects may be reviewed by the
Agent Lender. Borrower agrees to pay the reasonable expenses of Agent Lender
incurred in conducting such inspections, but no more than twice per each fifteen
(15) month period per Project in the absence of an Event of Default, which such
amounts can be included can be included in Project Development Budgets.
Notwithstanding the foregoing, Borrower shall reimburse Agent Lender for all
expenses for inspections conducted during the continuance of an Event of
Default. Agent Lender reserves the right to utilize third party professionals of
its choosing to review the status of Project development; provided, however,
Borrower shall be responsible for fees and expenses related to such third party
professionals only during the continuance of an Event of Default.

 

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(f)       Advances shall be made for costs on each line item shown on the
Project Development Budget only up to the amount budgeted on the Project
Development Budget for such line item. A reallocation among line items by
Borrower may be made only with prior written notice and explanation to Agent
Lender, provided, however, Agent Lender’s consent and approval shall not be
required as long as such reallocation does not involve or result in a need to
change a Project Tranche amount, all as more particularly set forth in Section
3.3(c).

 

(g)       On the date of each Advance for a Project, (1) such Project shall not
have been materially damaged by fire, wind, flood, vandalism or other casualty
or, in the alternative, the Lenders must have determined that sufficient
proceeds from insurance or other non-Loan sources exist to repair and/or restore
such damage prior to the termination of the Commitment Period, and (2) such
Project shall not be subject to condemnation proceedings or negotiations for
sale in lieu thereof or, in the alternative, the Lenders must have determined
that such condemnation proceedings and/or sale in lieu thereof will not have a
material adverse effect on the Project made the basis of such proceeding and/or
that the proceeds from such proceeding will be available to the Lenders for
purposes of paying down the Loan in such amount as the Lenders may reasonably
determine.

 

(h)       The Lenders reserve the right to limit the total amount advanced for
any Project at any time to an amount which, when deducted from the Project
Tranche designated and supported by the related Project Development Budget,
leaves a balance equal to eighty percent (80%) of the sum of the cost of
completion of all Improvements for such Project plus remaining nonconstruction
expenses for such Project necessary for completion, as reasonably determined by
the Agent Lender from time to time.

 

(i)       On the date of each Advance for a Project, the Agent Lender must be
reasonably satisfied that Project work is completed and Permits have been
obtained to an extent appropriate for the amount of the Project Tranche for such
Project advanced through such date and that all documents submitted to the Agent
Lender are in good order and comply with the terms and conditions of the Loan
Documents.

 

(j)       Advances of Loan proceeds for any Project will be limited to the
Project Tranche related thereto and, except as otherwise expressly set forth
herein in Section 2.6, will be available until the earlier of (i) the Scheduled
Completion Date for such Project, (ii) completion of the applicable Project
(which shall be evidenced by the delivery of a certificate of the Borrower
certifying as to the completion of the Project and a certificate of substantial
completion from the Architect of the applicable Project and the issuance of
certificates of occupancy, Permits, and other governmental approvals necessary
to commence operation of the applicable Project), (iii) the occurrence of a
Default or an Event of Default relating to any Project Tranche or Project
(unless such Default or Event of Default is cured during the applicable cure
period (if any)), at which time the Lenders’ obligations to make Advances shall
be terminated. Notwithstanding the foregoing, no Advances of the Tranche 3
Committed Amount may be requested after September 29, 2021 (all subject to the
penultimate sentence in section 4.1(c)(1)).

 

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(k)       The provisions of this Section 4.1 are solely for the benefit of the
Lenders. The Lenders may make one or more Advances to the Borrower upon written
or oral disbursement requests not complying with the requirements of this
Section 4.1, and such Advances will be conclusively deemed to be Advances to the
Borrower hereunder.

 

(l)       In the event any Project Development Budget includes a line item
designated to pay a hard cost or soft cost contingency, such amounts may be
disbursed upon requests therefor by Borrower in accordance with the terms of
this Agreement; provided, however, any material reallocation from any such
contingency line item shall be subject to prior written notice and explanation
to Agent Lender. Interest will be payable by the Borrower to the Lenders on that
portion of the contingency reserves actually disbursed by the Lenders. The
contingency reserves will be included in the computation of the undisbursed
portion of the Project Tranche designated for such Project for purposes of
determining whether the undisbursed portion of the Project Tranche will be
sufficient to complete the construction of the Project made the basis of such
Project Development Budget.

 

(m)       As to each Project, and except as otherwise expressly adjusted as set
forth herein, the maximum allowable Advance to be made by the Lenders following
approval of a request pursuant to this Section 4.1 will equal an amount
calculated as:

 

(1)       the total of all soft and hard costs incurred for the Project to date
or expected to be incurred and paid within the next thirty (30) days, as shown
on the Project Development Budget for such Project, less any applicable
adjustments to be made pursuant to this Article IV (collectively, the “Total
Approved Project Costs To Date”);

 

less

 

(2)       the sum of all Advances previously made to pay Total Approved Project
Costs To Date, plus any Lessor Contributions previously used to pay Total
Approved Project Costs To Date, plus, any Required Borrower Funds injected by
Borrower to date or required to be injected by Borrower to pay Total Approved
Project Costs To Date.

 

(n)       Without limiting any of the foregoing, Borrower hereby acknowledges
and agrees that any request for an Advance of the Tranche 3 Committed Amount
shall be deemed a certification from Borrower that it has satisfied the “EBITDA
Requirement” as more particularly set forth in section 6.30. Lenders shall be
entitled to withhold any and all Advances of the Tranche 3 Committed Amount in
the event Agent Lender determines in its sole discretion that Borrower has
failed to satisfy and maintain the EBITDA Requirement, regardless of any
certification by Borrower to the contrary. In making its determination, Agent.
Lender shall be entitled to rely on Borrower’s certification, Lenders’ review of
such information as may be provided by Borrowers and such other information as
Lenders may reasonably request; provided, however, Borrower agrees to provide
any such information within five (5) days of Lenders’ request therefor.

 

4.2       Direct Advances. After the occurrence of an Event of Default, the
Lenders may from time to time make Advances for any other costs on the Project
Development Budget, regardless of whether the Borrower has submitted a
requisition therefor. Such Advances may be made directly to parties to whom such
amounts are due or to the Lenders to reimburse the Lenders for sums due to them.
All such Advances to parties other than the Borrower shall be deemed Advances to
the Borrower hereunder and shall be secured by the Collateral to the same extent
as if they were made directly to the Borrower.

 

 34 

 

 

4.3       Delivery of Funds. The Lenders will make Advances by depositing the
same to a disbursement account created by Borrower for such purpose, as
instructed by Borrower from time to time (the “Disbursement Account”). The
Disbursement Account shall be maintained at a nationally recognized bank
reasonably acceptable to Agent Lender (JPMorgan Bank being hereby approved).
Separate Deposit Account shall be established for the purpose of holding Excess
Cash Flows, Lessor Contributions and Borrower’s general operating purposes (as
provided in Section 4.5 hereof), including for completed Projects, and the funds
in such Deposit Account shall not be commingled with funds in the development
disbursement account. Pursuant to the Assignment of Accounts, Borrower has
pledged and assigned to Agent Lender a security interest in the Disbursement
Account as additional collateral for the Loan Obligations. Borrower will assist
Agent Lender in obtaining an executed account control agreement from the
depository bank holding the Disbursement Account for purposes of perfecting
Lenders’ security interest in the Disbursement Account. Such a control agreement
must be in place before any Advances of the Loan are made into the Disbursement
Account. After the occurrence and during continuation of any Event of Default,
the Lenders may, in their discretion, make Advances through a disbursing agent
appointed by the Agent Lender at the Borrower’s expense, and any Advance to such
agent will be deemed to be an Advance to the Borrower. The making of an Advance
by the Lenders shall not constitute the Lenders’ approval or acceptance of the
construction theretofore completed. The Lenders’ inspection and approval of the
Plans and Specifications, the construction of the Improvements, or the
workmanship and materials used therein, shall impose no liability or fiduciary
duty of any kind on the Lenders, the sole obligation of the Lenders as the
result of such inspection and approval being to make the Advances if, and to the
extent, required by this Agreement. The Lenders have not undertaken and hereby
disclaim any duty or responsibility to inspect the construction progress or to
monitor the proper application by the General Contractor or others of funds
disbursed pursuant hereto, on behalf of the Borrower, and the Borrower
acknowledges and agrees that it must satisfy itself as to the status of
construction, the workmanship and materials used therein, and the application of
moneys by the General Contractor or others.

 

4.4       Required Borrower Funds.

 

(a)       The parties acknowledge and agree that, as a condition to any Advance
for a particular Project by the Lenders, the Borrower must (i) inject, whether
through equity contributions (Lenders shall have no obligation to make any
equity contributions to Borrower in their capacity as members of Borrower and,
in any event, any such equity contributions made by Lender shall be excluded
when calculating Required Borrower Funds), cash on hand or otherwise, cash in an
amount equal to no less than twenty-five percent (25.0%) of the Advance of the
Loan requested, (ii) have previously injected, whether through equity
contributions (Lenders shall have no obligation to make any equity contributions
to Borrower in their capacity as members of Borrower and, in any event, any such
equity contributions made by Lender shall be excluded when calculating Required
Borrower Funds), cash on hand or otherwise, an amount in cash in excess of the
amount required pursuant to subsection (i) above for prior Advances such that
Borrower is carrying forward a credit for Borrower’s funds injected in an amount
equal to no less than twenty-five percent (25.0%) of the Advance of the Loan
requested, or (iii) satisfy the twenty-five percent (25.0%) requirement through
a combination of (i) or (ii) above (in any of the foregoing cases, the “Required
Borrower Funds”), and the Agent Lender shall be entitled to receive such
evidence as the Agent Lender may reasonably require to substantiate the prior
injection of such Required Borrower Funds or the contemporaneous funding of
Required Borrower Funds with the Advance related thereto.

 

 35 

 

 

(b)       Intentionally Omitted.

 

(c)       Intentionally Omitted.

 

(d)       Notwithstanding anything to the contrary herein provided, Borrower’s
use of Lessor Contributions for Projects to the extent permitted herein, shall
not count towards satisfaction of Required Borrower Funds.

 

4.5       Deposit Accounts.

 

(a)       Disbursement Account. The Disbursement Account shall be governed by
section 4.3 above.

 

(b) Excess Cash Flow Account. Excess Cash Flow shall be maintained by Borrower
in a separate Deposit Account of Borrower maintained at a nationally recognized
bank reasonably acceptable to Agent Lender (JP Morgan/Chase being hereby
approved) (the “Excess Cash Flow Account”) until used for a purpose permitted in
this Agreement. Borrower hereby assigns and pledges Lenders a security interest
in the Excess Cash Flow Account and agrees to, upon request of Agent Lender,
provide additional documentation evidencing Lenders’ security interest in the
Excess Cash Flow Account, including, without limitation, the Assignment of
Excess Cash Flow Account. Borrower shall be restricted from obtaining access to
any funds held in the Excess Cash Flow Account without Agent Lenders prior
written consent and will also assist Agent Lender in obtaining an executed
account control agreement from the depository bank holding the Excess Cash Flow
Account for purposes of Lenders perfecting their security interest in the Excess
Cash Flow Account. Such a control agreement must be in place before any deposits
of any Excess Cash Flow are made into the Excess Cash Flow Account and prior to
any use of Excess Cash Flow for the purposes permitted herein.

 

(c)       Lessor Contribution Account. Lessor Contributions shall be maintained
by Borrower in one or more separate Deposit Accounts of Borrower maintained at a
nationally recognized bank reasonably acceptable to Agent Lender (JP
Morgan/Chase being hereby approved) (the “Lessor Contribution Accounts”) until
used for a purpose permitted in this Agreement. Borrower hereby assigns and
pledges Lenders a security interest in the Lessor Contribution Accounts and
agrees to, upon request of Agent Lender, provide additional documentation
evidencing Lenders’ security interest in the Lessor Contribution Accounts,
including, without limitation, the Assignment of Lessor Contribution Accounts.
Borrower will also assist Agent Lender in obtaining an executed account control
agreement from the depository bank holding the Lessor Contribution Accounts for
purposes of Lenders perfecting their security interest in the Lessor
Contribution Accounts. Such a control agreement must be in place before any
deposits of any Lessor Contributions are made into the Lessor Contribution
Accounts and prior to any use of Lessor Contributions for the purposes permitted
herein.

 

 36 

 

 

(d)       Operating Accounts. All other Deposit Accounts of Borrower or any
Borrower Subsidiary shall be maintained by Borrower or any Borrower Subsidiary
in one or more separate Deposit Accounts of Borrower or any Borrower Subsidiary
maintained at a nationally recognized bank reasonably acceptable to Agent Lender
(JP Morgan/Chase being hereby approved) (the “Operating Accounts”) until used
for a purpose permitted in this Agreement. Borrower and each Borrower Subsidiary
hereby agrees to transfer from the Operating Accounts within forty-five (45)
days after each Scheduled Principal Payment Date (each, a “Sweep Date”) all
Excess Cash Flows calculated for the twelve month period ended as of such
Scheduled Principal Payment Date to the Excess Cash Flow Account; provided,
however, that Borrower must provide Agent Lender a full accounting of any uses
of funds held in one or more of its Operating Accounts on each Sweep Date.
Borrower and each Borrower Subsidiary hereby assigns and pledges Lenders a
security interest in the Operating Accounts and agrees to, upon request of Agent
Lender, provide additional documentation evidencing Lenders’ security interest
in the Operating Accounts, including, without limitation, the Assignment of
Operating Accounts. Borrower and each Borrower Subsidiary will also assist Agent
Lender in obtaining an executed account control agreement from the depository
bank holding the Operating Accounts for purposes of Lenders perfecting their
security interest in the Operating Accounts. Such a control agreement must be in
place before any deposits are made into the Operating Accounts and prior to any
use of any funds for the purposes permitted herein.

 

(e)       Borrower may elect during the Commitment Period and so long as no
Default or Event of Default then exists to apply any Lessor Contributions toward
the payment of Total Approved Project Costs To Date (as defined in Section
4.1(m)(1) herein). Notwithstanding that such use of Lessor Contributions may be
applied in lieu of Required Borrower Funds and Advances of the Loan to pay Total
Approved Project Costs To Date, nothing herein shall be deemed to limit or
modify the Borrower’s obligation to the Lenders to comply with all obligations
to provide Project Specific Due Diligence for the Project to be financed with
such Lessor Contributions as set forth in Section 3.2(d), including but not
limited to confirmation that the Lenders’ lien on and security interest in such
Project and related Collateral has attached and is perfected on a first priority
basis.

 

(f)       Intentionally omitted

 

(g)       Any Lessor Contributions not applied to Project development costs in
the manner permitted by subsection (e) above shall, upon completion of the
Project in accordance with section 6.23 hereof, be transferred to the Excess
Cash Flow Account for application in the same manner and for the same purposes
as Excess Cash Flows.

 

(h)       Notwithstanding anything in this Section 4.5 to the contrary, so long
as no Default exists, to the extent accrued and unused Excess Cash Flow, in the
aggregate, as of each Sweep Date exceeds $5,000,000 (the “Excess Cash Sweep
Threshold”), eighty-percent of such excess shall be swept by Agent Lender to be
applied to the Loan Obligations in such order and priority as the Lenders shall
determine; provided, however, any payment to principal shall be applied first to
reduce any outstanding Advances of the Tranche 3 Committed Amount prior to
application to either the Tranche 1 Committed Amount or the Tranche 2 Committed
Amount.

 

 37 

 

 

Notwithstanding the foregoing, the parties agree that the $5,000,000 Excess Cash
Sweep Threshold may be revised from time to time in Lenders’ discretion based on
the performance of the Projects, the status and anticipated costs of development
of Future Projects, and Borrower’s compliance with the terms of the loan
documentation; provided however, Excess Cash Sweep Threshold shall not exceed
$10 million.

 

An example of the Excess Cash Flow calculation is set forth on Exhibit M
attached hereto Excess Cash Flow calculations and reporting pursuant to this
Agreement shall be consistent with the form Exhibit M hereto. Borrower shall
also include in its required financial reporting to Agent Lender an accounting
of Lessor Contributions received for each Project.

 

ARTICLE V.
BORROWER’S REPRESENTATIONS AND WARRANTIES,

 

In order to induce the Lenders to enter into this Agreement, and to make the
Loan and Advances to the Borrower from time to time in accordance with the Loan
Documents, the Borrower hereby makes to the Lenders the representations and
warranties set forth in this Article V. All representations and warranties made
herein or in any other Loan Document shall be deemed to have been relied upon by
the Lenders notwithstanding any independent investigation of the facts or
circumstances heretofore or hereafter made by or on behalf of the Lenders. All
representations and warranties made herein are made as of the date hereof, but
are continuing in nature and shall likewise be deemed to be made as of the date
of this Agreement and as of each Advance of Loan proceeds to the Borrower, it
being agreed that each request for an Advance by the Borrower shall constitute a
reaffirmation of such representations and warranties unless, concurrently with
such request and prior to such disbursement, the Borrower shall have disclosed
to the Agent Lender in writing any variation from such representation or
warranty. To the extent that any of the representations or warranties set forth
herein pertain to specific aspects of a Project not yet in existence, the same
shall be prospectively applicable to each and every Project hereafter commenced
by the Borrower. Accordingly, the Borrower hereby represents and warrants to the
Lenders that:

 

5.1       Existence, Power and Qualification.

 

(a)       Borrower and Holdings. Each of the Borrower and Holdings (a) is a duly
organized and validly existing Delaware limited liability company and is in good
standing under the laws of the State of Delaware, and (b) has the full power and
authority and the legal right to own its property and to conduct its business in
the manner in which it is now conducted or hereafter contemplates conducting its
business. The ownership of the membership interests of the Borrower and Holdings
as of the Second Restatement Effective Date is correctly set forth in Exhibit I
attached hereto. Holdings hereby acknowledges and agrees that, as of the Second
Restatement Effective Date, the Lenders hold an aggregate of 2,801,433 units of
Equity Interests of Holdings; provided, however, Holdings hereby further agrees
that the ownership by the Lenders of such interests shall not result in any
fiduciary duty to Holdings (or any of its subsidiaries) being imposed on the
Lenders in their capacity as Lenders Holdings hereby expressly disclaims any
such duty in its favor.

 

 38 

 

 

(b)       Borrower Subsidiaries. The Borrower Subsidiaries (a) are duly
organized and validly existing limited liability companies and are in good
standing under the laws of the State of their organization, and (b) have the
full power and authority and the legal right to own their property and to
conduct their business in the manner in which it is now conducted or hereafter
contemplates conducting its business. The ownership of the membership interests
of those Borrower Subsidiaries currently in existence are correctly set forth in
Exhibit I attached hereto.

 

5.2       Intentionally Omitted.

 

5.3       Authority to Borrow Hereunder. The Borrower has the full power and
authority and the legal right to make, deliver and perform each of the Loan
Documents to which it is a party, and to incur the Loan Obligations thereunder.
The Borrower has taken all necessary action on its part to authorize the
execution, delivery and performance of each of the Loan Documents to which it is
a party, and the borrowing and other transactions contemplated thereby. No
consent or authorization of, or filing with, any federal, state, county or
municipal government, or any department or agency of any such government, is
required of the Borrower in connection with the execution, delivery,
performance, validity or enforceability of each of the Loan Documents to which
it is a party, or the borrowing and other transactions contemplated thereby.

 

5.4       Due Execution and Enforceability. Each of the Loan Documents to which
the Borrower is a party has been duly executed and delivered on behalf of the
Borrower, and such Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditor’s rights generally, and general principles of equity
which may limit the availability of equitable remedies.

 

5.5       No Conflict. The execution, delivery and performance of each of the
Loan Documents to which the Borrower is a party, and the consummation of the
transactions therein contemplated, will not conflict with or be in contravention
of any law, regulation, rule, order or judgment applicable to the Borrower, the
organizational documents of the Borrower, or any material agreement, instrument,
mortgage, deed of trust, Lien, lease, judgment, decree or order to which the
Borrower is a party or is subject or by which the Borrower or any of its
properties or any of the Projects is or may be bound or affected.

 

5.6       No Claims or Litigation. Except in each case or in the aggregate as
would not reasonably be expected to have a Material Adverse Effect, there is no
litigation, claim, lawsuit, investigation, action or other proceeding pending
or, to the best of the Borrower’s knowledge, threatened against the Borrower or
any of the Projects before any court, agency, arbitrator or other tribunal which
involve any of the transactions contemplated in the Loan Documents; and the
Borrower is not in default with respect to any judgment, injunction, decree,
rule or regulation of any court or federal, state, municipal or other
governmental department, commission, board, agency or instrumentality.

 

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5.7       Solvency and Accuracy of Financial Information. The Borrower is
solvent within the meanings of both 11 U.S.C. § 548 and GAAP, and the
consummation of the transactions contemplated hereby will not render the
Borrower insolvent within the meanings of 11 U.S.C. § 548 or GAAP. All financial
statements, balance sheets, operating statements, cash flow statements and other
financial information of the Borrower delivered to the Lenders (the “Financial
Statements”), were prepared in accordance with GAAP consistently applied
throughout the period involved and are correct and complete and fairly present
the financial condition and results of operations of the Borrower for such
period, except that quarterly Financial Statements remain subject to year end
adjustments and may lack footnotes required by GAAP and internally prepared
management reports are not prepared in accordance with GAAP). Without limiting
the generality of the foregoing, the Borrower does not know of any material
liabilities, contingent or otherwise, of the Borrower that are not reflected in
the Financial Statements. Prior to the date of this Agreement, there has been
no:

 

(a)       Materially adverse change in the financial condition or prospects of
the Borrower (and, at any time after the development of any one or more
Projects, such adverse change is evidenced by an inability of the Projects in
the aggregate to generate revenue necessary for the continued operation of the
Projects);

 

(b)       Damage, destruction or loss, whether covered by insurance or not so
covered, which would have a material adverse effect on the properties or
business of the Borrower;

 

(c)       Declaration, setting aside or payment of any distribution or
withdrawal of capital in respect of the membership interests in the Borrower
except as permitted hereunder or otherwise approved by the Lenders in writing;

 

(d)       Direct or indirect redemption, purchase or other acquisition of any of
the membership interests in the Borrower except as permitted hereunder or
otherwise approved by the Lenders in writing; or

 

(e)       Other event or condition of any character which would have a Material
Adverse Effect.

 

5.8       No Defaults or Restrictions. There is no outstanding default under any
agreement or instrument to which the Borrower is a party or by which it or its
properties is or may be bound, nor does there exist any restriction under the
organizational documents of the Borrower which could cause a material adverse
effect on the business, properties, operations or condition, financial or
otherwise, of the Borrower.

 

5.9       Payment of Taxes. The Borrower has filed all federal, state and local
tax returns which are required to be filed and has paid, or made adequate
provision for the payment of, all taxes which have or may become due pursuant to
said returns or with respect to any assessments received or anticipated by the
Borrower, except to the extent being contested in good faith by proper
proceedings which effectively stay the imposition of any penalty, fine or Lien
resulting from the nonpayment thereof and with respect to which adequate
reserves have been set aside for the payment thereof.

 

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5.10       Necessary Permits, Etc. Borrower possesses all franchises,
trademarks, Permits, licenses, consents, agreements and governmental approvals
that are necessary or required by any authority in order to carry on its current
business and to construct and operate each Project to the extent appropriate for
the present stage of construction and operation. Except as would not reasonably
be expected to have a Material Adverse Effect, Borrower has not received any
notice of default or termination of any such Permit, license, consent, approval
or agreement, or any notice of noncompliance therewith.

 

5.11       ERISA. Borrower is in compliance with all applicable provisions of
ERISA.

 

5.12       Regulation U. The Borrower is not engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each
of the quoted terms is defined or used in Regulation U), and no part of the Loan
proceeds will be used for so “purchasing” or “carrying” “margin stock” or for
any purpose which violates the provisions of Regulation U. If requested by the
Agent Lender, the Borrower will furnish to the Agent Lender a statement in
conformity with the requirements of Regulation U to the foregoing effect.

 

5.13       Controlled Companies. The Borrower is not an “investment company”
within the meaning of the Investment Company Act of 1940, as amended, or is
subject to regulation under the Public Utility Holding Act of 1935, the Federal
Power Act, the Interstate Commerce Act, or any other law or regulation which
relates to the incurring of debt, including, but not limited to, laws and
regulations regulating common or contract carriers or the sale of electricity,
gas, steam, water or other public utility services.

 

5.14       Title to Assets. The Borrower has good and marketable title to all of
its properties and assets, including, without limitation, the Collateral. The
Collateral is free and clear of mortgage, pledges, Liens, charges and other
encumbrances except as otherwise permitted or required by the Loan Documents.

 

5.15       Places of Business. The address of the principal place of business of
the Borrower is set forth in Section 9.7 hereof.

 

5.16       Compliance with Applicable Environmental Laws. Except as would not
reasonably be expected to have a Material Adverse Effect, neither the Collateral
nor the Borrower, or any other real estate owned or leased by the Borrower, is
in violation of or subject to any existing, pending, or to the best of the
Borrower’s knowledge, threatened investigation or inquiry by any governmental
authority or any remedial obligations under any Applicable Environmental Law,
and there are no facts, conditions or circumstances known to the Borrower which
would result in any such investigation or inquiry if such facts, conditions or
circumstances, if any, were fully disclosed to the applicable governmental
authority. The Borrower has obtained, or will properly obtain, all permits,
licenses, or similar authorizations required under Applicable Environmental Laws
in order to construct, occupy, operate and use the Projects and all other
Collateral, except as would not reasonably be expected to have a Material
Adverse Effect.

 

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5.17       Disclosure. Neither this Agreement nor any other document, Financial
Statement, credit information, certificate or written statement required herein
to be furnished to the Lenders by the Borrower in connection with this Agreement
or the other Loan Documents contains any untrue, incorrect or misleading
statement of material fact.

 

5.18       Condemnation. There are no proceedings pending, or, to the best of
the Borrower’s knowledge, threatened, to acquire by power of condemnation or
eminent domain any portion of any Collateral, or any interest therein, or to
enjoin or similarly prevent the construction and/or use of any of the Collateral
which would constitute a Material Condemnation.

 

5.19       Roads and Utilities. All utility and sanitary sewage services
necessary for the construction and use of the Projects are or will be available
to the Properties upon which the Improvements are to be constructed prior to
commencement of construction, or the necessary rights-of-way or easements
therefor have been or will be acquired or dedicated, and all necessary steps
have been or will be taken to insure the completion thereof prior to the date of
termination of the Lenders’ obligations to make Advances on each applicable
Project, and the Borrower has or will receive permission to make such use
thereof as is necessary for construction and to make permanent connections
thereto upon completion of such Improvements.

 

5.20       Construction. Each of the Projects will be constructed by the General
Contractor substantially in accordance with the Plans and Specifications. Agent
Lender shall be furnished with fully executed counterparts of all contracts in
regard to the Projects during construction and thereafter. The Projects, when
completed, will comply with all applicable building codes and standards and
other applicable governmental requirements.

 

5.21       Priority of Mortgages and Financing Statements. Each of the Mortgages
and each security interest granted herein or in any other Loan Document, when
duly executed, delivered, and recorded or for which a Financing Statement is
filed (as applicable), will constitute a first-priority Lien against the
Property therein described, prior to all other Liens and encumbrances, including
those which may hereafter accrue, except for such matters as shall have been
approved by the Agent Lender and set forth in the Mortgages or herein as a
“Permitted Encumbrance.”

 

5.22       Borrower’s Expertise. The Borrower is sophisticated and experienced
in the business to which the Projects relate, and the Borrower has been and will
be represented by competent counsel of its choice with regard to the Loan and
the Loan Documents.

 

5.23       Anti-Terrorism Laws.

 

(a)       General. Neither the Borrower, to its knowledge, nor any Affiliate of
the Borrower is in violation of any laws relating to terrorism or money
laundering, including Executive Order No. 13224 and the USA Patriot Act
(“Anti-Terrorism Law”) or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

(b)       Executive Order No. 13224.

 

(1)       Neither the Borrower nor, to its knowledge, any Affiliate of the
Borrower is any of the following (each a “Blocked Person”):

 

(i)       A Person that is listed in the annex to, or is otherwise subject to
the provisions of, Executive Order No. 13224;

 

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(ii)       A Person owned or controlled by, or acting for or on behalf of, any
Person that is listed in the annex to, or is otherwise subject to the provisions
of, Executive Order No. 13224;

 

(iii)       A Person with which any bank or other financial institution is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

 

(iv)       A Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in Executive Order No. 13224;

 

(v)       A Person that is named as a “specially designated national” on the
most current list published by the U.S. Treasury Department Office of Foreign
Assets Control at its official website or any replacement website or other
replacement official publication of such list; or

 

(vi)       A Person who is Affiliated with a Person listed above.

 

(2)       neither the Borrower nor, to its knowledge, any Affiliate of the
Borrower (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order No.
13224.

 

5.24       Holdings and Borrower Subsidiaries. Each of the representations and
warranties set forth above as 5.3 through 5.23 are and remain true, accurate and
complete in all material respects with respect to the Holdings and each of the
Borrower Subsidiaries (with Holdings or such Borrower Subsidiary being
substituted for the “Borrower” in each such representations and warranties) and
the Loan Documents to which Holdings or such Borrower Subsidiaries are a party
(with such Loan Documents being substituted for the “Loan Documents” in each
such representations and warranties) and any Project owned by it.

 

ARTICLE VI.
AFFIRMATIVE COVENANTS

 

The Borrower hereby covenants and agrees that, until the Loan Obligations have
been fully and indefeasibly paid and satisfied, and the Lenders have no further
obligation to make additional Advances to the Borrower, the Borrower shall:

 

6.1       Payment and Performance of Obligations. Duly and punctually pay and
perform the Loan Obligations as and when specified under the Loan Documents.

 

6.2       Maintenance of Existence. Maintain its existence as a limited
liability company under the laws of its jurisdiction of organization and
maintain all necessary registrations or qualifications in good standing.

 

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6.3       Compliance with Laws. Comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include,
without limitation, compliance with ERISA and with all Applicable Environmental
Laws.

 

6.4       Accrual and Payment of Taxes. Accrue all current tax liabilities of
all kinds, any required withholdings of income taxes of employees, all required
old age and unemployment contributions, and all other assessments and
governmental charges or levies imposed upon the Borrower or upon its income,
profits or properties, and pay the same when due and prior to the delinquency
thereof or the imposition of any penalties or interest with respect thereto,
except to the extent contested in good faith by proper proceedings which
effectively stay the imposition of any. penalty, fine or Lien resulting from the
nonpayment thereof and with respect to which adequate reserves have been set
aside for payment thereof.

 

6.5       Payment of Claims. Pay all lawful claims which, if unpaid, would
reasonably be expected to become a Lien upon any of the Collateral, except to
the extent contested in good faith by proper proceedings which effectively stay
the imposition of any penalty, fine or Lien resulting from the nonpayment
thereof and with respect to which adequate reserves have been set aside for
payment thereof.

 

6.6       Maintenance of Properties. Keep the Collateral and assets in
reasonably good repair, working order and condition, reasonable wear and tear
excepted, and damage from casualty excepted provided repairs are promptly
commenced to the extent required by Section 6.24 hereof, and from time to time
make all needed and proper repairs, renewals, replacements, additions, and
improvements thereto, and comply in all material respects with the provisions of
all leases to which the Borrower is a party or under which it rents or occupies
any property so as to prevent any loss or forfeiture thereof or thereunder. The
Borrower shall not be deemed in default due to any alleged breach of this
Section 6.6 so long as, upon receiving notice of such alleged breach from the
Lenders, or any other party, the Borrower takes immediate action to correct such
alleged breach and institutes reasonable procedures to avoid future similar
occurrences.

 

6.7       Other Indebtedness. Duly and punctually pay or cause to be paid all
principal and interest of any Indebtedness of the Borrower owing to other
creditors, comply with and perform all conditions, terms and obligations of the
notes or other instruments evidencing such Indebtedness and the mortgages, deeds
of trust, security agreements and other instruments evidencing security for such
Indebtedness, all only to the extent such Indebtedness is permitted under this
Agreement.

 

6.8       Examination of Records and Visitation By Lenders. Upon reasonable
written notice to the Borrower, at any time and from time to time during normal
business hours, permit the Lenders and their representatives to examine and make
copies and abstracts from all Records and books of account of the Borrower, to
discuss the affairs, finances and accounts of the Borrower with any of its
members, directors, managers, Authorized Representatives or employees, and to
demand and receive from the Borrower, the General Contractor and the Borrower’s
agents, Authorized Representatives and employees any information regarding the
Projects and the finances connected therewith.

 

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6.9       Access. To permit the Lenders and their agents to have access to the
Property and Improvements at all reasonable times.

 

6.10       Intentionally Omitted.

 

6.11       Accounting Records. Keep adequate Records and books of account, with
complete entries made in accordance with GAAP consistently applied, reflecting
all of its financial transactions and the operation of the Projects.

 

6.12       Maintenance of Permits, Etc. Obtain, maintain and do all things
necessary to preserve in full force and effect all Permits, licenses,
authorizations, approvals, franchises, certificates and accreditations which are
necessary for the proper conduct of its businesses and/or the use and operation
of the Projects, except to the extent it would not reasonably be expected to
have a Material Adverse Effect.

 

6.13       Conduct of Business. Continuously and diligently conduct its business
and each Project as contemplated hereby in accordance with reasonable standards
of quality and performance.

 

6.14       Correction of Defects. At the request of the Agent Lender, promptly
correct any defect, error or omission which may be discovered in the contents of
the Loan Documents, or in the execution thereof.

 

6.15       Further Assurances. Execute and deliver such further instruments and
do such further acts as may be necessary or as may be reasonably requested by
the Agent Lender to carry out more effectively the purposes of this Agreement,
or to create, perfect or continue any Lien against the Collateral in favor of
the Lenders, or to insure the priority thereof.

 

6.16       Quarterly Reporting Requirements. Furnish or cause to be furnished to
the Agent Lender as soon as available, and in any event within the later of (x)
sixty (60) days after the end of the first three fiscal quarters of each fiscal
year of Borrower and (y) the date on which Parent is required to file (or, if
earlier, files) a Form 10-Q under the Exchange Act, the following:

 

(a)       unaudited consolidated balance sheet and related statements of
operations of Holdings and its subsidiaries, prepared in accordance with GAAP
(subject to year-end adjustments and the absence of footnotes), and duly
certified by the Borrower as (i) fairly presenting the financial condition of
the Borrower as of the end of such quarter and the results of the operations of
Holdings for such period, and (ii) having been prepared in accordance with GAAP
(subject to year-end adjustments and the absence of footnotes);

 

(b)       a certificate of the Borrower certifying that no Default or Event of
Default has occurred and is outstanding, or if an Event of Default or Default
has occurred and is continuing, statements as to the nature of each such Event
of Default or Default and the action which the Borrower proposes to take with
respect thereto; and

 

(c)       a current monthly management report, including statement of Excess
Cash Flows in the form of Exhibit M hereto and other such information as may be
reasonably requested by the Agent Lender, duly certified by the Borrower.

 

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6.17       Annual Reporting Requirements.

 

(a)       Furnish or cause to be furnished to the Agent Lender as soon as
available, and in any event within the later of (x) one hundred twenty (120)
days after the end of each fiscal year of Borrower and (y) the date on which
Parent is required to file (or, if earlier, files) a Form 10-K under the
Exchange Act, the following:

 

(1)       Parent Audited Statements. If the Parent Financials Test is satisfied,
each of the following:

 

(i)       the audited consolidated balance sheet and related statements of
operations of Parent and its subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by independent public accountants of national
standing or otherwise reasonably acceptable to the Agent Lender and certified by
the Borrower to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of Parent and its subsidiaries on a consolidated basis in accordance
with GAAP consistently applied,

 

(ii)       the unaudited consolidated balance sheet and related statements of
operations of Holdings and its subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all certified by the Borrower as presenting fairly in all material
respects the financial condition and results of operations of Holdings and its
subsidiaries on a consolidated basis in accordance with GAAP, and

 

(iii)       an explanation, in reasonable detail, of any differences between the
financial statements of Parent and its subsidiaries described in the foregoing
clause (i), on the one hand, and the information relating to Holdings and its
subsidiaries described in the foregoing clause (ii), on the other hand; or

 

(2)       Borrower Audited Statements. If the Parent Financials Test is not
satisfied, the audited consolidated balance sheet and related statements of
operations of Holdings and its subsidiaries as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by independent public accountants of national
standing or otherwise reasonably acceptable to the Agent Lender and certified by
the Borrower to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of Holdings, the Borrower and the Borrower Subsidiaries on a
consolidated and consolidating basis in accordance with GAAP consistently
applied.

 

(3)       a certificate of the Borrower certifying that no Event of Default or
Default has occurred and is outstanding, or if an Event of Default or Default
has occurred and is continuing, statements as to the nature of each such Event
of Default or Default and the action which the Borrower proposes to take with
respect thereto; and

 

(4)       any such other information as may be reasonably requested by the Agent
Lender for each completed Project, duly certified by the Borrower.

 

 46 

 

 

(b)       Furnish or cause to be furnished to the Agent Lender, as soon as
available, and in any event prior to the commencement of each fiscal year of
Borrower, (1) projections of Borrower’s financial performance and conditions,
including calculations of Borrower’s projected EBITDA for each quarter during
such fiscal year, which projections shall be subject to Lenders’ review and
approval (“EBITDA Projections”) and (2) operating and capital expenditure
budgets for such fiscal year.

 

If at any time, any audit or subsequent Financial Statements reveal that the
Excess Cash Flow reported by Borrower during the applicable fiscal year is lower
than Borrower’s actual Excess Cash Flow for such year, the Agent Lender shall
notify the Borrower of such deficiency, and the Borrower shall pay such
deficiency within ten (10) Business Days after the Borrower’s receipt of Agent
Lender’s notice thereof as a principal payment under the Loan.

 

6.18       Project Financial Statements and Reconciliations. To the extent not
otherwise provided by Section 6.16 or 6.17 above, the Borrower shall also
provide to the Agent Lender:

 

(a)       monthly internally prepared management reports of Holdings, the
Borrower and any Borrower Subsidiaries within forty-five (45) days after the end
of each calendar month;

 

(b)       monthly internally prepared financial statements for each Project
within forty-five (45) days after the end of each calendar month, to the extent
not included in (a) above; and

 

(c)       annual internally prepared financial statements for each Project
within ninety (90) days after the end of each fiscal year.

 

All financial statements required by this Section 6.18 shall include a balance
sheet, income statement, statement of cash flows, statement of Excess Cash Flow
in the form of Exhibit M hereto, and such other information as may be reasonably
requested by the Agent Lender; provided, however that in no event and
notwithstanding anything in this Section 6.18 to the contrary, shall Borrower be
required to deliver monthly balance sheets to Agent Lender.

 

6.19       Employee Plan Reports and Notices. Promptly furnish to the Agent
Lender after the filing or receipt thereof copies of all reports and notices, if
any, which the Borrower files under the Code or ERISA with the Internal Revenue
Service, the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor, or which the Borrower receives from any such agency, other than any
routine or periodic filings or notices, in respect to any Employee Plan
hereafter commenced, if any of the information therein would reasonably be
expected to form the basis of, or any dispute referred to therein, if determined
adversely to the Borrower, would reasonably be expected to constitute or give
rise to, an Event of Default.

 

6.20       Other Reports and Notices. Furnish promptly to the Agent Lender such
information as the Agent Lender may reasonably require concerning costs,
progress of construction, marketing, operation, and such other factors as the
Agent Lender may reasonably require; notify the Agent Lender promptly of any
litigation, to its knowledge, instituted or threatened against the Borrower
which, if adversely determined, could reasonably be expected to individually or
in the aggregate have a Material Adverse Effect; notify the Agent Lender
promptly of any deficiencies asserted or Liens filed by the Internal Revenue
Service against the Borrower or any part of the Projects; notify the Agent
Lender promptly of any audits of any Federal or State tax returns of the
Borrower, and the results of any such audit; notify the Agent Lender promptly of
any material condemnation or similar proceedings with respect to any of the
Projects, any proceeding seeking to enjoin the intended use of any of the
Projects, and of all changes in governmental requirements pertaining to any of
the Projects, utility availability, anticipated costs of completion, and any
other matters which would reasonably be expected have a Material Adverse Effect
on any Project.

 

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6.21       Payment of Fees; Indemnity. Pay all expenses involved in perfecting
the lien status or priority of the Lenders’ Lien upon the Collateral and all
other reasonable out of pocket expenses of the Lenders related to the Loan or
the protection and preservation of the Projects or the enforcement of any
provision of the Loan Documents, including, without limitation, recording fees
and taxes, tax, title and lien search charges, title insurance charges,
architects’, engineers’ and reasonable attorneys’ fees (including reasonable
attorneys’ fees at trial and in any appellate or bankruptcy proceedings), real
property taxes and insurance premiums, and to indemnify against, and hold the
Lenders harmless from, any loss, or liability on account of any claim by any
party arising out of the Loan or the Lenders’ interest in or Lien upon the
Projects and the other Collateral.

 

6.22       Deficiencies. Pay the difference between the undisbursed Loan funds
with respect to any Project Tranche, and the amount necessary fully to complete
the acquisition, construction, equipping and installation of the corresponding
Project free of all Liens, including direct and indirect costs and work
performed but for which payment has not been made, and the Lenders shall be
under no obligation to make any further Advances until any amount so demanded is
so paid by the Borrower. All materials, supplies and other property so acquired,
constructed or installed for or as a part of the Projects shall become a part of
the Projects, subject to the Lien of the Lenders and the provisions of this
Agreement and the other Loan Documents.

 

6.23       Construct Improvements and Complete the Projects. Commence
construction, reconfiguration and/or renovation, as applicable, of each of the
Existing Projects, Planned Projects and Future Projects within sixty (60) days
following the initial Advance of the corresponding Project Tranche, but in any
event to commence construction of each of the Projects no later than the
expiration of the Commitment Period; cause each set of Improvements to be
constructed substantially in accordance with the Plans and Specifications
therefor, and in compliance with all applicable restrictive covenants, zoning
ordinances, setback requirements, building codes and governmental regulations,
and so as not to encroach upon or overhang into any easement or right-of-way;
cause such construction to proceed continuously and permit no cessation of work;
and complete each of the Projects and obtain all required Permits and a
certificate of occupancy or other final governmental approval of such
Improvements for their intended use on or before the Scheduled Completion Date
therefor, time being of the essence.

 

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The completion of each of the Projects and the payment of all costs and expenses
incidental thereto shall be evidenced by the Borrower’s delivery to the Agent
Lender of a certificate signed by the Borrower stating that:

 

(1)       the acquisition, construction, installation and equipping of such
Project has been completed in all material respects substantially in accordance
with the Plans and Specifications;

 

(2)       the Borrower shall have received and made all Permits, approvals,
consents, licenses (including environmental permits) and authorizations of, and
registrations, filings and recordings with, and declarations to, and other
actions by governmental authorities, the lack of which if not issued, granted or
otherwise in existence, would materially impair commencement of operation of the
Project;

 

(3)       all amounts due for labor, materials, supplies and other costs
incurred in connection with the acquisition, construction, installation and
equipping of the Project have been paid except for amounts which the Borrower is
entitled to retain pursuant to its respective purchase orders or for amounts
being disputed by the Borrower in good faith as being due and payable, which
amounts shall be set forth in the certificate and held in the disbursement
account established for such Project until payment is due.

 

6.24       Use of Proceeds. Use the Advances under the Loan and the Required
Borrower Funds (other than (i) the Village Note Payoff Advance, which shall be
used for the purposes described in Section 2.10 and (ii) the Operating Expense
Advance, which was used solely for the purposes set forth in the Fourth
Modification) solely and exclusively for the purposes set forth in the approved
Project Development Budgets with respect to the corresponding Project, and to
pay such fees, closing costs, and other nonconstruction expenses relating to
such Project or the construction of the Improvements or operation of Projects,
as the Lenders have approved or may from time to time approve in writing. The
Borrower shall not commingle any of the Advances or any of the funds of the
Borrower which are to be invested in the Projects with the funds of any other
entity or Person or use any of the Advances or Required Borrower Funds for any
uses except as permitted by this Agreement. The Lenders reserve the right, at
any time, to require satisfactory proof as to the disposition made of any of the
proceeds of the Loan and the Required Borrower Funds. Nothing contained herein,
however, shall be construed to require the Lenders to follow the disposition, or
to monitor the proper application; of any funds advanced by the Lenders.
Borrower shall also use Excess Cash Flow and Lessor Contributions only for such
purposes as permitted herein.

 

6.25       Insurance. At all times while the Borrower is indebted to the
Lenders, to maintain the following forms of insurance coverage to be provided by
a financially sound and reputable insurance company reasonably acceptable to the
Agent Lender.

 

(a)       Builders Risk. The Borrower shall maintain or cause the General
Contractor to maintain for the full course of construction and until the date of
final acceptance Insurance Blanket Builders Risk coverage for the full
replacement cost with respect to each Project. The policy shall be written on an
“all risk” basis including but not limited to flood, earthquake, and extra
expense (soft cost). The Agent Lender shall be named as loss payee and provided
waiver of subrogation on its behalf. The policy shall include the interest of
Lenders, the Borrower, General Contractor, and subcontractors as their interests
may appear.

 

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(b)       General Liability, The Borrower shall provide, and shall cause all
General Contractors and any other contractors, and any Major Subcontractors (as
hereinabove defined in Section.4.1) to provide, during construction and for a
period of at least 2 years after the date of final acceptance, Commercial
General Liability insurance with available limits of at least $1,000,000 per
occurrence and $2,000,000 annual aggregate; such insurance shall comply with and
include the following:

 

●    Occurrence Form - Claims made not acceptable.

 

●    Bodily Injury including but not limited to bodily injury, mental injury,
mental anguish, sickness or disease..

 

●    Property Damage, broad form type including all loss of use and “x”, “c” and
“u” coverage.

 

●    Personal Injury

 

●    Premises or Operations.

 

●    Products and Completed Operations.

 

●    Subcontracted Operations (Owners and Contractors Protective).

 

●    Contractual - Including, without limitation, defense costs and the
indemnity requirements of Section 6.21.

 

●    Fellow Employee Coverage.

 

●    Injury to Leased Workers.

 

●    Amendment to Aggregate Limits, per Project CG25031185 and per location
CG25041185.

 

●    Mobile Equipment.

 

(c)       Comprehensive Automobile Liability. The Borrower shall provide, and
shall require all General Contractors and any other contractors, the
subcontractors (each tier) and others involved with each of the Projects to
provide, Combined Single Limit of not less than $1,000,000 for bodily injury and
property damage covering all owned, non-owned, or hired motor vehicles,
trailers, or semi-trailers designed for travel on public roads, whether licensed
or not (including any machinery or apparatus attached thereto) according to the
1986 ISO definitions. Coverage shall include protection for fellow employee
suits.

 

(d)       Workers Compensation and Employers Liability. The Borrower shall
maintain, and shall require all General Contractors and any other contractors,
the subcontractors (each tier) and others involved with each of the Projects to
maintain, coverage including Employers Liability limits of not less than
$1,000,000 for each accident, $1,000,000 occupational disease per employee.
Coverage shall be in accordance with applicable statutory requirements.

 

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(e)       Umbrella Liability. The minimum limits established for General
Liability (including Products/Completed Operations), Automobile Liability and
Employers Liability shall be as follows:

 

  Borrower  $10,000,000                 General Contractor  $10,000,000        
        All subcontractors (any tier)  $2,000,000                 All other
contracts  $2,000,000   

 

 

An Umbrella policy may be provided as excess coverage over the underlying limits
in order to satisfy the minimum limits and/or coverage set forth above. All such
Umbrella policies shall be written with a self-insured retention not to exceed
$25,000. All Umbrella/Excess policies shall be on a “following form” basis.

 

(f)       Property Insurance. After the completion of construction or occupancy
of each of the Projects (whichever first occurs), “all risk” coverage on the
Improvements and Equipment comprising the same in an amount not less than the
replacement cost thereof, insuring against such potential causes of loss as
shall be required by the Agent Lender, including but not limited to, loss or
damage from wind, fire, ice, subsidence and if requested by the Agent Lender,
earthquake and flood.

 

(g)       Business Interruption Insurance. After completion of construction of
each Project, business interruption insurance with respect thereto equal to not
less than twelve (12) months’ estimated gross revenues of such Project, less
those expenses not ordinarily incurred during a period of business interruption.
Business Interruption policy shall include the same insured perils as set forth
above.

 

Each of the property policies described above shall name the Agent Lender as
mortgagee and loss payee under a standard non-contributory mortgagee and lender
loss payable clause satisfactory to the Agent Lender, and shall provide that the
Agent Lender shall receive not less than thirty (30) days written notice prior
to cancellation or termination of any such policy.

 

(h)       Proceeds. The proceeds of any of the policies described above in (f)
and (g) above shall be payable by check to the Agent Lender and delivered to the
Agent Lender to be used as follows: (i) during the continuance of an Event of
Default, to the full or partial payment or prepayment of the Loan Obligations in
such manner as Agent Lender shall elect, (ii) in the absence of an Event of
Default in a situation in which Borrower plans to restore the damaged or
destroyed Collateral, to Borrower for the repair and/or restoration of the
damaged or destroyed Collateral, subject to the conditions set forth below, or
(iii) in the absence of an Event of Default in a situation in which Borrower
does not plan to restore the damaged or destroyed Collateral, to the full or
partial payment or prepayment of the Loan Obligations in such manner as Agent
Lender shall elect. In the event net proceeds of insurance or condemnation are
Made available to the Borrower for the Borrower’s repair, restoration and
replacement of Collateral, the same shall be subject to the following terms and
Borrower’s satisfaction of the following conditions:

 

(1)       at the time of such loss or damage and at all times thereafter while
the Lenders are holding any portion of such proceeds, there shall exist no
Default or Event of Default;

 

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(2)       the Improvements and Equipment for which loss or damage has resulted
shall be capable of being restored to their pre-existing condition and utility
in all material respects with the value equal to or greater than prior to such
loss or damage and shall be capable of being completed prior to the earlier of
(A) the Maturity Date of the Loan, or (B) the date which is twelve (12) months
after the date of casualty;

 

(3)       within thirty (30) days from the date of such loss or damage or
required notice timelines contained in the lease regarding reconstruction,
whichever is later, the Borrower shall have given the Agent Lender a written
notice electing to have the proceeds applied for such purpose;

 

(4)       within one hundred eighty (180) days following the date of notice
under the preceding subparagraph (3) and prior to any proceeds being disbursed
to the Borrower, the Borrower shall have provided to the Agent Lender all of the
following:

 

(i)       complete plans and specifications for restoration, repair and
replacement of the Improvements and Equipment damaged to the preexisting
condition, utility and value required by (2),

 

(ii)       builders’ risk insurance and other insurance required in this
Agreement for the full cost of construction with the Lenders’ named under a
standard mortgagee loss-payable clause,

 

(iii)       such additional funds as in the Lenders’ reasonable opinion are
necessary to complete the repair, restoration and replacement, and

 

(iv)       copies of all permits and licenses necessary to complete the work in
accordance with the plans and specifications;

 

(5)       no portion of such proceeds shall be made available by the Lenders for
architectural reviews or for any other purposes which are not directly
attributable to the cost of repairing, restoring or replacing the Improvements
and Equipment for which a loss or damage has occurred unless the same are
recoverable by such insurance;

 

(6)       the Borrower shall commence such work within the timeframes set forth
therefor in the lease and shall diligently pursue such work to completion;

 

(7)       each disbursement by the Lenders of such proceeds and deposits shall
be funded subject to conditions and in accordance with Section 4.1 hereof;

 

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(8)       the Lenders shall have the first Lien and security interests in all
building materials and completed repair and restoration work and in all
Improvements and Equipment acquired with such proceeds, and the Borrower shall
execute and deliver such Loan Documents and other instruments as the Lender
shall request to create, evidence or perfect such Lien and security interests;
and

 

(9)       in the event and to the extent such proceeds are not required or used
for the repair, restoration and replacement of the Improvements and Equipment
for which a loss or damage has occurred, or in the event the Borrower fails
timely to make such election or having made such election fails timely to comply
with the terms and conditions set forth herein, the Lenders shall be entitled
without notice to or consent from the Borrower to apply such proceeds, or the
balance thereof, at the Agent Lender’s option either (1) to the full or partial
payment or prepayment of the Loan Obligations in the manner aforesaid, or (2) to
the repair, restoration and/or replacement of all or any part of such
Improvements and Equipment for which a loss or damage has occurred.

 

(10)       Notwithstanding the foregoing provisions, in the event of a casualty
or loss to a Project with regard to which the repairs or replacement will not
exceed $100,000 in cost, the Borrower shall be allowed to utilized the insurance
proceeds paid with respect to such casualty or loss subject only to compliance
with subparagraphs (h)(1) and (h)(2) above.

 

(i)       Attorney-in-Fact. The Borrower appoints the Agent Lender as the
Borrower’s attorney-in-fact, which power shall be coupled with an interest and
irrevocable, to cause the issuance of or an endorsement to any policy to bring
the Borrower into compliance herewith and, at the Agent Lender’s sole option, to
make any claim for, receive payment for, and execute and endorse any documents,
checks or other instruments in payment for loss, theft, or damage covered under
any such insurance policy; provided, however, that in no event will the Lenders
be liable for failure to collect any amounts payable under any insurance policy.

 

(j)       Insurance Policies. All insurance shall be obtained through a
financially sound and reputable insurance company acceptable to the Agent
Lender. All policies shall name the Agent Lender as additional insured and/or
mortgagee, as applicable, and shall include waivers of subrogation in favor of
the Agent Lender.

 

6.26       Ownership of Personalty. Furnish to the Agent Lender, if the Agent so
requests, the contracts, bills of sale, receipted vouchers, and agreements, or
any of them, under which the Borrower claims title to any of the Collateral with
a value exceeding $100,000.

 

6.27       Discharge Liens. Discharge immediately, or make other arrangements
acceptable to the Agent Lender (including, without limitation, bonding off or
insuring over any such Lien) with respect to, any mechanic’s, materialman’s or
other Lien filed against any Project, or any other Lien against any Collateral,
within thirty (30) days after the date the Borrower receives notice of such
Lien.

 

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6.28       General Operating Budgets. Deliver to the Agent Lender no later than
January 31 of each year an updated General Operating Budget for such year
containing such detail as the Agent Lender (or 30 days after the end of
Borrower’s fiscal year, if such fiscal year ends on a date other than December
31) may reasonably request and deliver to the Agent Lender any revised General
Operating Budgets prepared by Borrower at any time.

 

6.29       The Borrower’s Commitment to the Projects. The Borrower acknowledges
that the Lenders’ agreements and commitments hereunder are predicated upon the
Borrower’s commitment to construct, develop, operate and manage the Projects,
furnishing all required administration (including all senior management),
expending of all funds necessary to complete the Projects in accordance with the
Plans and Specifications, Project Development Budgets and any General Operating
Budgets approved as herein provided and paying such fees and expenses as are
incurred by the Borrower in connection with the negotiation and execution of
this Agreement and the other Loan Documents, except to the extent this
Agreement, or any budget or other approved item contemplated hereby contemplates
or provides for the funding of such fees and expenses from the Loan by the
Lenders, it being acknowledged by the parties that the Lenders’ only function
hereunder shall be that of a lender to the Borrower with respect to the Projects
as herein provided.

 

6.30       EBITDA Requirement. From and after the date Borrower requests any
Advance of the Tranche 3 Committed Amount, Borrower shall satisfy and maintain a
minimum EBITDA (the “EBITDA Requirement”) equal to 75% of the EBITDA projected
by Borrower pursuant to the EBITDA Projections provided by Borrower pursuant to
section 6.17 for the EBITDA Projections reflecting a positive number, and 100%
of the EBITDA projected by Borrower pursuant to EBITDA Projections provided by
Borrower pursuant to section 6.17 for EBITDA Projections reflecting zero or a
negative number, for the trailing twelve month period ending on the last day of
the fiscal quarter immediately preceding the Advance request for which financial
statements are available. Borrower shall provide Lender with an EBITDA
Compliance Certificate in such form as mutually agreed upon by Borrower and
Lender, together with such Advance request.

 

6.31       Holdings and Borrower Subsidiaries. Holdings and each Borrower
Subsidiary hereby agrees to each of the affirmative covenants set forth above as
6.1 through 6.29 (with Holdings or such Borrower Subsidiary, as applicable,
being substituted for the “Borrower” in each such affirmative covenant) and the
Loan Documents to which Holdings or such Borrower Subsidiaries are a party with
such Loan Documents being substituted for the “Loan Documents” in each such
affirmative covenant) and the Project owned by it.

 

6.32       Web-cam. Borrower, at its sole cost and expense, shall take such
steps as are commercially reasonable to retain a construction monitoring company
approved by Lenders, in Lenders’ reasonable discretion, to install video and/or
web-cam equipment at each Project during the construction phase of said Project
for the purpose of verifying and providing to Lenders evidence of construction
progress and the completion status of each such Project. Borrower acknowledges
and agrees that Lenders shall have the right to communicate directly with any
such monitoring company retained pursuant to the foregoing.

 

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ARTICLE VII.
NEGATIVE COVENANTS

 

The Borrower hereby covenants and agrees that, until the Loan Obligations have
been fully and indefeasibly paid and satisfied, and the Lenders have no further
obligation to make additional advances of the Loan to the Borrower, the Borrower
shall not:

 

7.1       No Liens. Create, incur, assume or suffer to exist any Lien upon or
with respect to the Projects or the other Collateral or any of the Borrower’s
other properties, rights, income or assets, whether now owned or hereafter
acquired, other than:

 

(a)       Liens at any time existing in favor of the Lenders;

 

(b)       Inchoate Liens arising by operation of law to secure claims for the
purchase of labor, services, materials, equipment or supplies to the extent that
payment thereof shall not at the time be delinquent;

 

(c)       Liens incurred in the ordinary course of business in connection with
workers’ compensation, unemployment insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory
obligations, and contracts (other than for money borrowed or for credit received
in respect of property acquired) entered into in the ordinary course of business
as presently conducted or to secure obligations for surety or appeal bonds,
excluding, however, in any such case any Lien arising in favor of the Pension
Benefit Guaranty Corporation;

 

(d)       Liens for taxes, assessments or governmental charges or levies if
payment thereof shall not at the time be delinquent, or are being contested in
good faith and by proper proceedings and adequate reserves for the payment
thereof are being maintained on the Borrower’s books in the event of a
determination adverse to the Borrower;

 

(e)       Liens arising out of judgments, attachments or awards not resulting in
an Event of Default and in respect of which the Borrower shall in good faith be
prosecuting an appeal or proceedings for review in respect of which there shall
be secured a subsisting stay of execution pending such appeal or proceedings;

 

(f)       Leases of the properties of the Borrower entered into in the ordinary
course of the Borrower’s business so long as such Leases are subordinate in all
respects to the Liens granted and evidenced by the Loan Documents;

 

(g)       Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into by the Borrower or any
Borrower Subsidiary in the ordinary course of business in accordance with the
past practices;

 

(h)       Liens securing Indebtedness incurred pursuant to Sections 7.5(e) and
(g);

 

(i)       Customary bankers’ Liens, rights of setoff and other similar Liens
existing solely with respect to cash and cash equivalents on deposit in one or
more accounts maintained by the Borrower, in each case granted in the ordinary
course of business in favor of the bank or banks with which such accounts are
maintained, securing amounts owing to such bank with respect to cash management
and operating account arrangements, including those involving pooled accounts
and netting arrangements, subject, however to the terms of any account control
agreement in favor of Lenders;

 

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(j)       The filing of UCC financing statements solely as a precautionary
measure in connection with operating leases or consignment of goods;

 

(k)       Liens on insurance policies and the proceeds thereof securing the
financing of the premiums or reimbursement obligations with respect thereto and
Liens arising out of deposits of cash and Cash Equivalents at any time securing
deductibles, self-insurance, co-payment, co-insurance, indemnification
obligations, reimbursement, retentions and similar obligations to providers of
insurance in the ordinary course of business;

 

(l)       Liens incurred in the ordinary course of business of the Borrower with
respect to obligations that do not in the aggregate for all Projects exceed
$2,000,000 at any time outstanding or exceed $500,000 in the aggregate for any
single Project at any time outstanding, so long as such Liens, to the extent
covering any Collateral, are junior to the Liens granted pursuant to the Loan
Documents.

 

7.2       Merger, Consolidation, Change in Ownership. Allow the dissolution,
liquidation or termination of Borrower or enter into or permit any merger,
consolidation or similar transaction, or permit the transfer, sale or other
disposition of all or substantially all of the assets of the Borrower or any
Borrower Subsidiary at any time while the Loan Obligations remain outstanding,
except that, if no Event of Default shall have occurred and be continuing, (i)
any Borrower Subsidiary may merge into the Borrower in a transaction in which
the Borrower is the surviving entity, (ii) any Borrower Subsidiary may merge
into any other Borrower Subsidiary and (iii) any unprofitable and immaterial
Borrower Subsidiary may liquidate or dissolve in the ordinary course of
business.

 

7.3       Disposition of Assets. Sell, lease, transfer or otherwise dispose of
any of its assets or of the assets of any Project other than in the ordinary
course of business, including the disposition of obsolete or surplus equipment,
inventory and property, and any permitted investment activities.

 

7.4       Loan and Investments. Make loans or advances to any Person, or
purchase or acquire the obligations or stock of, or any other interest in, any
Person except (i) the Borrower may (a) acquire and hold accounts receivables
owing to it if created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary terms, (b) invest in,
acquire and hold cash and Cash Equivalents, (c) endorse negotiable instruments
held for collection in the ordinary course of business, or (d) make lease,
utility and other similar deposits in the ordinary course of business; (ii)
investments in securities of trade creditors or customers in the ordinary course
of business received upon foreclosure or pursuant to any plan of reorganization
or liquidation or similar arrangement upon the bankruptcy or insolvency of such
trade creditors or customers; (iii) investments in cash or Cash Equivalents made
by the Borrower or any Borrower Subsidiary as a result of consideration received
in connection with any disposition of assets made in compliance with Section
7.3; (iv) investments in any Borrower Subsidiary which is established by
Borrower in the ordinary course of Borrower’s business of developing and
operating the Projects and operating the general business of Borrower related
thereto; (v) investments in lieu of Restricted Payments to the extent permitted
under Section 7.6; (vi) investments in joint ventures (provided that such
investments shall not be made with proceeds of any Loans hereunder); and (vii)
other investments in an aggregate amount not to exceed $500,000 at any one time
outstanding.

 

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7.5       Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness or other obligation for money borrowed, guaranteed or endorsed, or
otherwise be or become contingently liable in connection with the obligations of
any Person, except:

 

(a)       Indebtedness for taxes and assessments not at the time due and payable
or which are being contested in good faith by appropriate proceedings and
against which reserves deemed adequate by the Agent Lender have been
established;

 

(b)       Contingent liabilities arising out of the endorsement of negotiable
instruments in the ordinary course of collection, or similar transactions in the
ordinary course of business;

 

(c)       Indebtedness, other than for borrowed money, incurred in the ordinary
course of business, in an aggregate amount equal or less than $100,000;

 

(d)       the Loan Obligations;

 

(e)       Indebtedness in respect of bid, performance or surety bonds, workers’
compensation claims, self-insurance obligations and bankers acceptances issued
for the account of the Borrower in the ordinary course of business, including
guarantees or obligations of the Borrower with respect to letters of credit
supporting such bid, performance or surety bonds, workers’ compensation claims,
self-insurance obligations and bankers acceptances (in each case other than for
an obligation for money borrowed);

 

(f)       Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument inadvertently (except in the
case of daylight overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is extinguished
within five (5) Business Days of incurrence;

 

(g)       Indebtedness in respect of purchase money obligations and capital
lease obligations, and refinancings or renewals thereof, in an aggregate amount
for all Projects not to exceed $2,000,000 at any time outstanding, or exceed
$500,000 in the aggregate for any single Project at any time outstanding;

 

(h)       Guaranties by Borrower of Borrower Subsidiaries; provided, that in
such case, such underlying guaranteed obligations of Borrower Subsidiaries are
not for borrowed money and are obligations otherwise permitted pursuant to this
Agreement or any of the other Loan Documents;

 

(i)       Unsecured Indebtedness, including revolving line(s) of credit,
incurred for the sole purpose of funding working capital including revolving
line(s) of credit, incurred for the sole purpose of funding working capital
requirements of the Projects in an amount(s) of up to $7,500,000 in the
aggregate; and

 

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(j)       Indebtedness incurred in the ordinary course of business in connection
with the financing of insurance premiums.

 

7.6       Distributions and Redemptions. Unless the prior written consent of the
Agent Lender has first been obtained, declare or pay any distributions,
purchase, redeem, retire, or otherwise acquire for value any of its membership
interests now or hereafter outstanding, return any capital to its members as
such, or make any distribution of profits or assets to its members as such
(collectively, “Restricted Payments”), except:

 

(a)       Restricted Payments with respect to its Equity Interests payable
solely in additional shares or units of such Equity Interests;

 

(b)       Restricted Payments the proceeds of which shall be used by Holdings to
make distributions in accordance with the terms of Section 4.01(b) of the
Holdings LLC Agreement;

 

(c)       Restricted Payments, the proceeds of which shall be used by Holdings
to pay operating expenses incurred in the ordinary course of business and other
corporate overhead costs and expenses (including, without limitation,
administrative, legal, accounting and similar expenses provided by third
parties), which are reasonable and customary and incurred in the ordinary course
of business plus (y) any reasonable and customary compensation, expense
reimbursements and indemnification claims made by directors or officers of
Holdings attributable to the ownership or operations of the Borrower and its
subsidiaries;

 

(d)       Restricted Payments, the proceeds of which shall be used by Holdings
to pay franchise taxes and other fees, taxes and expenses required to maintain
the corporate existence of Holdings or otherwise imposed on Holdings as an
entity;

 

(e)       Restricted Payments from the Borrower Subsidiaries to Borrower; and

 

(f)       Restricted Payments, the proceeds of which are used to redeem units in
accordance with Article XI of the Holdings LLC Agreement; and

 

(g)       Restricted Payments, the proceeds of which are used by Holdings (x) to
make payments pursuant to the Expense Reimbursement Agreement or (y) to make
indemnification payments pursuant to Section 7.04 of the Holdings LLC Agreement.

 

7.7       Change in Business. Engage in any business other than constructing and
operating the Projects or other business directly related to the constructing
and operating of the Projects.

 

7.8       Places of Business. Change the principal place of its business or,
without the prior written consent of the Agent Lender (such consent not to be
unreasonably withheld), cease doing business at any locations or commence doing
business at any location not disclosed to the Agent Lender.

 

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7.9       Changes in Fiscal Year or Accounting. Change its fiscal year to a
fiscal year other than that which is set forth in the Holdings LLC Agreement, or
change its method of accounting, unless such change in its method of accounting
is permitted by GAAP and provided such change in its method of accounting does
not have the effect of curing or preventing what would otherwise be an Event of
Default or change the calculation of Excess Cash Flow had such change in its
method of accounting not taken place.

 

7.10       ERISA Funding and Termination. Permit the funding requirements of
ERISA with respect to any Employee Plan ever to be less than the minimum
required by ERISA or, any Employee Plan ever to be subject to involuntary
termination proceedings.

 

7.11       Transactions with Affiliates. Enter into any transaction with an
Affiliate of the Borrower other than (i) transactions among Holdings, the
Borrower and the Borrower Subsidiaries (except to the extent otherwise
prohibited hereunder), (ii) any Restricted Payment permitted by Section 7.6,
(iii) director, manager, officer, employee and consultant compensation, benefit,
reimbursement and indemnification agreements, plans and arrangements entered
into by the Holdings, the Borrower or any Borrower Subsidiary in the ordinary
course of business, (iv) transactions pursuant to the Expense Reimbursement
Agreement and (v) transactions entered into in the ordinary course of business
and on fair and reasonable terms no less favorable to the Borrower than those
that might have been obtained in a comparable arms-length transaction with a
Person not an Affiliate, and in any event in the case of clause (v) above, only
if only if written consent of the Lenders is first obtained, which consent shall
not be unreasonably withheld. The transactions listed on Exhibit L hereto are
hereby approved by Agent Lender.

 

7.12       Sale and Lease-Back. Enter into any arrangement whereby it shall sell
or transfer all or any material part of its property then owned by it and shall
thereupon within one year thereafter rent or lease the property so sold or
transferred, other than in connection with any Indebtedness otherwise permitted
under Section 7.5 hereof.

 

7.13       Assignment or Conveyance. Except as otherwise permitted herein
(including, without limitation, any sale of inventory in the ordinary course of
business), permit any conveyance, Lease, mortgage, Lien or any other alienation
or encumbrance of the Collateral or any portion thereof.

 

7.14       Change of Use. Terminate, alter or change the use of any Project or
enter into any sublease or management agreement for any Project, unless the
Borrower first notifies the Agent Lender and provides the Agent Lender with a
copy of the proposed sublease or management agreement, obtains the Agent
Lender’s written consent thereto and obtains and provides the Agent Lender with
a subordination agreement in form satisfactory to the Agent Lender from such
sublessee or manager subordinating to all rights of the Lenders. Notwithstanding
the foregoing, it is understood that Borrower may utilize assignments or
subleases to Borrower Subsidiaries in certain jurisdictions where required or
desired in connection with applicable local laws and licensure issues (herein, a
“Subsidiary Sublease”). Agent Lender must receive prior notice of any proposed
Subsidiary Sublease and must receive draft documentation therefor for Agent
Lender’s approval. Lender’s approval of Subsidiary Subleases shall not be
unreasonably withheld so long as (i) such Subsidiary Sublease does not
constitute a default under the Project Lease or Borrower has obtained its
landlord’s written consent for the same; (ii) Borrower will remain fully
obligated under the Project lease, notwithstanding the Subsidiary Sublease;
(iii) the Subsidiary Sublease in no way affects the liabilities and
responsibilities of Borrower under this Agreement and the Loan Documents; (iv)
the Subsidiary Sublease and any and all Collateral related thereto shall remain
at all times subject to the Lien of Lenders pursuant to this Agreement and the
Loan Documents in all respects and the same must be expressly set forth in the
Subsidiary Sublease; (v) Borrower shall assign and pledge to Agent Lender as
additional Collateral for the Loan Obligations all ownership interests in such
Borrower Subsidiary, and (vi) Borrower and any Borrower Subsidiary which is
party to such Subsidiary Sublease shall provide any other documentation or
agreements relating to the Subsidiary Sublease reasonably required by Agent
Lender consistent with these requirements.

 

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7.15       Acquisition of Other Assets. Acquire any assets other than the
Projects or assets directly related thereto or related to the operation of the
business of the Borrower generally, except as otherwise expressly permitted in
this Agreement or the other Loan Documents and as provided in a General
Operating Budget.

 

7.16       No Fees. Pay from the operations of the Projects, accrue or include
within the operating expenses, or utilize in determining Excess Cash Flow any
fees to the Borrower or any Affiliate of the Borrower (including, without
limitation, development fees or property management fees), or any amounts to
employees of the Borrower or any Affiliate of the Borrower other than employees
of the Borrower or any of its Affiliates who are exclusively employed full-time
at one or more of the Projects and are being paid reasonable rates of
compensation, based on the scope of employment and region in which the Project
is located, and as set forth in submitted and approved Project Development
Budgets and/or General Operating Budgets or otherwise approved by the Agent
Lender (such consent not to be unreasonably withheld or delayed).

 

7.17       No Change to LLC Agreement or Expense Reimbursement Agreement.
Without the prior written consent of the Agent Lender, amend, restate,
supplement or otherwise modify (i) the Holdings LLC Agreement or the Borrower
LLC Agreement in any manner that would adversely affect the Lenders hereunder or
(ii) the Expense Reimbursement Agreement.

 

7.18       Third Party Fees. Enter into any transaction with a third party or
incur any third party fees in excess of $100,000 except for transactions in the
ordinary course of Borrower’s business.

 

7.19       Holdings and Borrower Subsidiaries. Holdings and each Borrower
Subsidiary hereby agree to each of the negative covenants set forth above as 7.1
through 7.18 above with respect to Holdings and such Borrower Subsidiary (with
Holdings or each Borrower Subsidiary, as applicable, being substituted for the
“Borrower” in each such negative covenants) and the Loan Documents to which
Holdings or such Borrower Subsidiary is a party (with such Loan Documents being
substituted for the “Loan Documents” in each such negative covenants) and the
Project owned by it.

 

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ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES,

 

8.1       Events of Default. The occurrence of any of the events listed in this
Section 8.1 shall constitute an “Event of Default” under this Agreement:

 

(a)       Failure of the Borrower to make any payment of interest or principal
or any other monetary Loan Obligations due, when and as due, whether by
acceleration or otherwise, under the terms of the Note, this Agreement, or any
other Loan Document, subject to any applicable notice or grace period provided
in such documents; provided that the same remains unremedied for three (3) or
more Business Days.

 

(b)       Except as expressly permitted in this Agreement, the assignment or
attempted assignment by the Borrower of this Agreement, or any obligations
hereunder;

 

(c)       The filing by Holdings, the Borrower or any Borrower Subsidiary of a
voluntary petition in bankruptcy or Holdings, the Borrower or any Borrower
Subsidiary’s adjudication as a bankrupt or insolvent, or the filing by the
Borrower or any Borrower Subsidiary of any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors, or Holdings, the Borrower’s,
any Borrower Subsidiary’s seeking or consenting to or acquiescence in the
appointment of any trustee, receiver or liquidator of Holdings, the Borrower or
any Borrower Subsidiary or of all or any substantial part its property or of any
or all of the rents, revenues, issues, earnings, profits or income thereof, or
the making of any general assignment for the benefit of creditors or the
admission in writing by Holdings, the Borrower or any Borrower Subsidiary of its
inability to pay its debts generally as they become due;

 

(d)       The entry by a court of competent jurisdiction of an order, judgment,
or decree approving a petition filed against Holdings, the Borrower or any
Borrower Subsidiary seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency, or other relief for debtors, which order, judgment or
decree remains unvacated and unstayed for an aggregate of ninety (90) days
(whether or not consecutive) from the date of entry thereof, or the appointment
of any trustee, receiver or liquidator of Holdings, the Borrower or any Borrower
Subsidiary or of all or any substantial part of its property or of any or all of
the rents, revenues; issues, earnings, profits or income thereof which
appointment shall remain unvacated and unstayed for an aggregate of ninety (90)
days (whether or not consecutive);

 

(e)       Except as otherwise permitted herein, the transfer or further
encumbrance of any portion of or interest in any Collateral or the occurrence of
a Change in Control;

 

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(f)       If any certificate, statement, representation, warranty or audit
heretofore or hereafter furnished by or on behalf of Holdings, the Borrower or
any Borrower Subsidiary pursuant to or in connection with this Agreement or
otherwise or as an inducement to the Lenders to extend any credit to or to enter
into this or any other agreement with Holdings, the Borrower or any Borrower
Subsidiary proves to have been untrue in any respect at the time as of which the
facts therein set forth were stated or certified or to have omitted any
substantial contingent or unliquidated liability or claim against the Holdings,
the Borrower or any Borrower Subsidiary, in each case which such falsities or
omissions relate to facts or circumstances which would individually or in the
aggregate reasonably be expected to have a Material Adverse Effect, or if on the
date of execution of this Agreement there shall have been any change in any of
the facts previously disclosed by any such certificate, statement,
representation, warranty or audit, which change shall not have been disclosed to
the Lenders at or prior to the time of such execution which would individually
or in the aggregate reasonably be expected to have a Material Adverse Effect;

 

(g)       Any materially adverse change in the financial condition or prospects
of Holdings, the Borrower or any Borrower Subsidiary as evidenced by an
inability of the Projects in the aggregate to generate revenue necessary for the
continued operation of the Projects;

 

(h)       Final non-appealable judgments in excess of $1,000,000 in the
aggregate for all Projects or in excess of $250,000 in the aggregate for any
single Project shall be rendered by a court of law or equity against Holdings,
the Borrower, any Borrower Subsidiary and the same shall remain undischarged for
a period of thirty (30) days, unless such judgment is either (i) substantially
covered by collectible insurance and such insurer has within such period
acknowledged such coverage in writing, or (ii) although not fully covered by
insurance, enforcement of such judgment has been effectively stayed, such
judgment is being contested or appealed by appropriate proceedings and Holdings,
the Borrower or any Borrower Subsidiary as the case may be, has established
reserves adequate for payment in the event such party is ultimately unsuccessful
in such contest or appeal and evidence thereof is provided to the Agent Lender;

 

(i)       Intentionally Deleted;

 

(j)       The termination of any Project Lease or any default or breach by the
Borrower or any Borrower Subsidiary under any Project Lease which would
reasonably be expected to have a Material Adverse Effect;

 

(k)       Any “Event of Default” pursuant to (and as defined in) any of the Loan
Documents; or

 

(l)       Failure by Holdings, the Borrower or any Borrower Subsidiary to
perform or observe any other term, condition or covenant herein which failure is
not cured within thirty (30) days after written notice thereof from the Agent
Lender to Holdings, the Borrower or any Borrower Subsidiary or within such
longer period of time, not to exceed sixty (60) days, as may be reasonably
necessary to cure such non-performance if Holdings, the Borrower or any Borrower
Subsidiary is diligently and with continuity of effort pursuing such cure and
the failure is susceptible of cure within such additional sixty (60) day period.

 

Notwithstanding anything to the contrary in this Section, all requirements of
notice shall be deemed eliminated if the Lenders are prevented from giving such
notice by bankruptcy or other applicable law. Unless otherwise specifically
specified herein, the cure period, if any, shall then run from the occurrence of
the Event of Default or condition of Default rather than from the date of
notice.

 

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8.2       General Remedies. Upon the occurrence of any Event of Default, the
Lenders shall have, in addition to the rights and remedies given them by this
Agreement and the other Loan Documents, all those allowed by all applicable
laws, including but without limitation, the Uniform Commercial Code as enacted
in any State in which any Collateral may be located. Without limiting the
generality of the foregoing, the Lenders may in accordance with the Loan
Documents and the requirements of applicable law, sell at public or private sale
or otherwise realize upon, the whole or, from time to time, any part of the
Collateral, or any interest which Holdings, the Borrower or any Borrower
Subsidiary may have therein.

 

8.3       Lenders’ Additional Rights and Remedies. Upon the occurrence of any
Event of Default and except as may otherwise be prohibited or expressly provided
for to the contrary under applicable law, in addition to any rights or remedies
the Lenders may otherwise have under this Agreement, any other Loan Documents,
or under applicable laws, without notice, the Lenders shall have the right to
take any or all of the following actions at the same or different times:

 

(a)       To cancel the Lenders’ obligations arising under this Agreement;

 

(b)       To institute appropriate proceedings to specifically enforce
performance of the terms and conditions of this Agreement;

 

(c)       To take immediate possession of the Collateral;

 

(d)       To take immediate possession of all other property to which title is
held by Holdings, the Borrower or any Borrower Subsidiary as is necessary to
fully complete all onsite and offsite Improvements to the Project(s) and
complete the construction and equipping of the Project(s) and do anything in its
sole judgment to fulfill the obligations of Holdings, Holdings, the Borrower or
any Borrower Subsidiary hereunder or under any other agreement with respect to
the Project(s), including availing itself of and procuring performance of
existing contracts, amending the same, or entering into new contracts with the
same contractors or others and employment of watchmen to protect the Project(s)
from injury. Without restricting the generality of the foregoing and for the
purposes aforesaid, Holdings, the Borrower and each Borrower Subsidiary hereby
appoints and constitutes the Lenders its lawful attorney in fact with full power
of substitution in the premises to take all actions as Lenders may deem
necessary or appropriate to complete the Project(s); to pay all expenses and
costs relating to the Project(s) and to add the amounts of any such payments to
the Loan Obligations; to execute change orders and make/execute such other
changes in the General Contractors or other contracts to which Holdings, the
Borrower or any Borrower Subsidiary is a party which shall be necessary or
desirable to complete any Project; to retain or employ new contractors,
subcontractors, architects, engineers and inspectors as shall be required for
said purposes; to pay, settle, or compromise all bills and claims, which may be
incurred in connection with constructing and equipping any Project; to purchase
any fixtures, equipment, machinery, furniture or any other personal property as
may be necessary or desirable for the completion of the construction and
equipping of any Project or for the clearance of title; to execute all
applications and certificates in the name of Holdings, the Borrower or any
Borrower Subsidiary which may be required; to prosecute and defend all actions
or proceedings in connection with any Project; and to do any act which Holdings,
the Borrower or any Borrower Subsidiary might do in its own behalf relating to
any Project, it being understood and agreed that this power of attorney shall be
a power coupled with an interest and cannot be revoked;

 

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(e)       To appoint or seek appointment of a receiver, without notice and
without regard to the solvency of Holdings, the Borrower or any Borrower
Subsidiary or the adequacy of the security, for the purpose of preserving the
Collateral, preventing waste, and to protect all rights accruing to the Lenders
by virtue of this Agreement and the other Loan Documents. All expenses incurred
in connection with the appointment of such receiver, or in protecting,
preserving, or improving the Collateral, shall be charged against the Borrower
and shall be secured by the Lenders’ lien;

 

(f)       To proceed to perform any and all of the duties and obligations and
exercise all the rights and remedies of Holdings, the Borrower or any Borrower
Subsidiary contained in any agreements assigned to the Lenders under the Loan
Documents as fully as the Borrower could itself;

 

(g)       To take possession of the Mortgaged Property and any Rents and have,
hold, manage, lease and operate the Mortgaged Property on such terms and for
such period of time as the Lenders may in their discretion deem proper, and,
either with or without taking possession of the Mortgaged Property, in the
Lenders’ own names:

 

(1)       Make any payment or perform any act which Holdings, the Borrower or
any Borrower Subsidiary has failed to make or perform, in such manner and to
such extent as the Lenders may deem necessary to protect the security provided
for in this Agreement, or otherwise, including without limitation, the right to
appear in and defend any action or proceeding purporting to affect the security
provided for in this Agreement, or the rights or powers of the Lenders;

 

(2)       Lease the Mortgaged Property or any portion thereof in such manner and
for such Rents as the Lenders shall determine in its discretion; or

 

(3)       Demand, sue for, or otherwise collect and receive from all Persons all
Rents, including those past due and unpaid, with full power to make from time to
time all alterations, renovations, repairs or replacements of and to the
Mortgaged Property (or any part thereof) as may seem proper to the Lenders and
to apply the Rents to the payment of (in such order of priority as the Lenders,
in their discretion, may determine):

 

(i)       All expenses of managing the Mortgaged Property, including, without
limitation, the salaries, fees and wages of a manager the Lenders and such other
employees as the Lenders may deem necessary or desirable;

 

(ii)       All taxes, charges, claims, assessments, water rents, sewer rents,
and any other liens, and premiums for all insurance which the Lenders may deem
necessary or desirable, and the cost of all alterations, renovations, repairs,
or replacements, and all expenses incidental to taking and retaining possession
of the Mortgaged Property;

 

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(iii)       All or any portion of the Loan; and/or

 

(iv)       All costs and attorneys’ fees incurred in connection therewith.

 

In connection with the foregoing, the Borrower hereby authorizes and directs
each party to any Loan Document (other than Borrower), upon receipt from the
Agent Lender of written notice to the effect that an Event of Default exists, to
perform all of its obligations under the Loan Document as directed by the Agent
Lender, and to continue to do as so directed until otherwise notified by the
Agent Lender.

 

(h)       To enforce payment of any Accounts, to prosecute any action or
proceeding with respect to Accounts, to extend the time of payment of any and
all Accounts, to make allowances and adjustments with respect thereto and to
issue credits in the name of the Lenders or the Borrower;

 

(i)       To settle, compromise, extend, renew, release, terminate or discharge,
in whole or in part, any Account or deal with the same as the Lenders may deem
advisable;

 

(j)       To charge, set-off and otherwise apply all or any part of the Loan
Obligations against any funds of Holdings, the Borrower or any Borrower
Subsidiary held by or controlled by the Lenders, including any Deposit Accounts,
or any part thereof;

 

(k)       To exercise any and all rights and remedies of Holdings, the Borrower
or any Borrower Subsidiary under or in connection with any agreement assigned to
the Lenders as Collateral or otherwise in respect of the Collateral, including,
without limitation, any and all rights of Holdings, the Borrower or any Borrower
Subsidiary to demand or otherwise require payment of any amount under, or
performance of any provision of, any agreement assigned to the Lenders as
Collateral;

 

(l)       To enter upon the premises of Holdings, the Borrower or any Borrower
Subsidiary or any other place or places where the Collateral is located and
kept, and through self-help and without judicial process, without first
obtaining a final judgment or giving Holdings, the Borrower or any Borrower
Subsidiary notice and opportunity for a hearing on the validity of the Lenders’
claim, without any pre-seizure hearing as a condition to repossession through
court action and without any obligation to pay rent to Holdings, the Borrower or
any Borrower Subsidiary, to remove the Collateral therefrom to the premises of
the Lenders or of any the lenders of the Lenders, for such time as the Lenders
may desire, in order effectively to collect or liquidate the Collateral;

 

(m)       To require Holdings, the Borrower or any Borrower Subsidiary, upon the
request of the Agent Lender, to assemble the Inventory, Equipment and any other
property included in the Collateral and make it available to the Lenders at
places which the Lenders shall select, whether at Holdings, the Borrower or any
Borrower Subsidiary’s premises or elsewhere, and to make available to the
Lenders all of Holdings, the Borrower and each Borrower Subsidiary’s premises
and facilities for the purpose of the Lenders taking possession of, removing or
putting the Inventory and such other goods in salable form;

 

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(n)       To collect, receive, appropriate, repossess and realize upon the
Collateral, or any part thereof, and to sell, lease, assign, give option or
options to purchase, or sell or otherwise dispose of and deliver the Collateral
(or contract to do so), or any part thereof, in one or more parcels, at public
or private sale or sales, at any exchange broker’s board or at any of the
Lenders’ offices or elsewhere, at such prices as the Lenders nay deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Lenders shall have the right upon any such public sale or sales, and to the
extent permitted by law, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption, which equity of redemption
Holdings, the Borrower and each Borrower Subsidiary hereby releases, and
Holdings, the Borrower and each Borrower Subsidiary waive all claims, damages
and demands against the Lenders arising out of the repossession, retention or
sale of the Collateral;

 

(o)       To use, and to permit any purchaser of any of the Collateral from the
Lenders to use without charge, Holdings, the Borrower and each Borrower
Subsidiary’s labels, General Intangibles, and advertising matter or any property
of a similar nature, as it pertains to, or is included in, any of the
Collateral, in advertising for sale, preparing for sale and selling any
Collateral, and finishing the manufacture, processing, fabrication, packaging
and delivery of the Inventory, and Holdings, the Borrower and each Borrower
Subsidiary’s rights under all licenses and all franchise agreements shall inure
to the Lenders’ benefit;

 

(p)       To send any written notice to Holdings, the Borrower or any Borrower
Subsidiary required by law or this Agreement in the manner set forth in this
Agreement; and any notice sent by the Lenders in such manner at least ten (10)
Business Days (counting the date of sending) prior to the date of a proposed
disposition of the Collateral shall be deemed to be reasonable notice (provided,
however, that nothing contained herein shall be deemed to require ten (10)
Business Days’ notice if, under the applicable circumstances, a shorter period
of time would be allowed under applicable law); and

 

(q)       To exercise, in addition to all other rights which it has under this
Agreement or other applicable law, all of the rights and remedies of a secured
party upon default under the UCC or other applicable law.

 

8.4       No Limitation on Rights and Remedies. The enumeration of the powers,
rights and remedies in this Article shall not be construed to limit the exercise
thereof to such time as an Event of Default occurs if, under applicable law or
any other provision of this Agreement or any other Loan Document, the Lenders
have any of such powers, rights and remedies regardless of whether an Event of
Default has occurred, and any limitation contained herein or in any of the other
Loan Documents as to the Lenders’ exercise of any power, right or remedy for a
period of time only during the continuance of an Event of Default shall only be
applicable at such time as the Lenders shall have actual knowledge that such
Event of Default is no longer continuing and for a reasonable time thereafter as
may be necessary for the Lenders to cease the exercise of such powers, rights
and remedies (it being expressly understood and agreed that until such time as
the Lenders shall obtain such knowledge and after the expiration of such
reasonable time, the Lenders shall have no liability whatsoever for the
commencement of or continuing exercise of any such power, right or remedy).

 

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8.5       Repossession of the Collateral Care and Custody of the Collateral,
Etc. Holdings, the Borrower and each Borrower Subsidiary agree to give the Agent
Lender notice in the manner set forth in this Agreement within twenty-four (24)
hours of the time of repossession of the Collateral, or any part thereof, by the
Lenders as to any other property of Holdings, the Borrower or any Borrower
Subsidiary alleged to have been left on, upon or in the repossessed Collateral
at the time of repossession; and such notice shall be an express condition
precedent to any action or suit for loss or damages in connection therewith.
Holdings, the Borrower and each Borrower Subsidiary agree that the Lenders may
hold any such property of Holdings, the Borrower or any Borrower Subsidiary
without liability for a reasonable time after any such notice is received, and
that the Lenders will have a reasonable time to notify Holdings, the Borrower or
any Borrower Subsidiary as to where Holdings, the Borrower or any Borrower
Subsidiary can collect such property. Holdings, the Borrower and each Borrower
Subsidiary agree that if the Lenders shall repossess the Collateral, or any part
thereof, at a time when no Event of Default shall have occurred hereunder, and
the repossessed Collateral is thereafter returned to the Borrower or any
Borrower Subsidiary, the damages therefor, if any, shall not exceed the fair
rental value of the repossessed Collateral for the time it was in the Lenders’
possession. Holdings, the Borrower and each Borrower Subsidiary hereby expressly
and irrevocably consents to, and to the extent that the Borrower and each
Borrower Subsidiary may lawfully do so, invites the Lenders and its lenders to
come upon any premises on which the Collateral, or any part thereof, is now or
hereafter located for any and all purposes related to the Collateral including
without limitation repossession of the Collateral, or any part thereof. To the
extent that the Holdings, the Borrower and each Borrower Subsidiary may lawfully
do so, Holdings, the Borrower and each Borrower Subsidiary further covenant and
warrant that (a) any entry by the Lenders and its lenders upon such premises for
the purpose of repossessing the Collateral, or any part thereof, shall not be
trespass upon such premises, and (b) any such repossession shall not constitute
conversion of the Collateral, or any part thereof, and Holdings, the Borrower
and each Borrower Subsidiary further agree to indemnify and hold the Lenders
harmless against, and hereby releases the

 

Lenders from any actions, costs, obligations or expenses arising directly,
indirectly or remotely from any attempt to enter such premises and repossess the
Collateral, or any part thereof. The Lenders shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if it takes such reasonable actions for that purpose as the Borrower
shall request in writing, but the Lenders shall have sole power to determine
whether such actions are reasonable. Any omission to do any act not requested by
Holdings, the Borrower or any Borrower Subsidiary shall not be deemed a failure
to exercise reasonable care. Holdings, the Borrower shall at all times be
responsible for the preservation of the Collateral and shall be liable for any
failure to realize upon, or to exercise any right or power with respect to, the
Collateral, or for any delay in so doing, whether or not the Collateral is in
Holdings, the Borrower or any Borrower Subsidiary’s possession.

 

8.6       Application of Proceeds. Except as otherwise expressly required to the
contrary by applicable law or any Loan Document, the net cash proceeds resulting
from the exercise of any of the rights and remedies of the Lenders under this
Agreement, after deducting all reasonable charges, expenses, costs and
attorneys’ fees relating thereto, shall be applied by the Lenders to Loan
Obligations in such order and priority as Lenders shall determine in their sole
discretion, and the Borrowers shall remain liable to the Lenders for any
deficiency.

 

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8.7       Attorney-in-Fact. Holdings, the Borrower and each Borrower Subsidiary
hereby constitute and appoint the Lenders, or any other Person whom the Lenders
may designate, as Holdings, the Borrower and each Borrower Subsidiary’s
attorney-in-fact (such appointment being coupled with an interest and being
irrevocable until the Lenders’ lien shall have been terminated in writing as set
forth in this Agreement), at the Borrower’s sole cost and expense, to exercise
any one or more of the following rights and powers at any time after the
occurrence and during the continuance of an Event of Default (and all acts of
such attorney-in-fact or designee taken pursuant to this Section are hereby
ratified and approved by Holdings, the Borrower and each Borrower Subsidiary,
and said attorney or designee shall not be liable for any acts or omissions nor
for any error of judgment or mistake of fact or law):

 

(a)       To take or to bring, in the name of the Lenders or in the name of
Holdings, the Borrower or any Borrower Subsidiary, all steps, action, suits or
proceeding deemed by the Lenders necessary or desirable to effect collection of
the Accounts;

 

(b)       To settle, adjust, compromise, extend, renew, discharge, terminate or
release the Accounts in whole or in part;

 

(c)       To settle, adjust or compromise any legal proceedings brought to
collect the Accounts;

 

(d)       To notify Purchasers to make payments on the Accounts directly to the
Lenders or to a lockbox designated by the Lenders;

 

(e)       To transmit to Purchasers notice of the Lenders’ interest in the
Accounts and to demand and receive from such Purchasers at any time, in the name
of the Lenders or of Holdings, the Borrower or any Borrower Subsidiary or of the
designee of the Lenders, information concerning the Accounts and the amounts
owing thereon;

 

(f)       To use Holdings, the Borrower or any Borrower Subsidiary’s stationery
and sign the name of Holdings, the Borrower or any Borrower Subsidiary to
verifications of the Accounts and notices thereof to Purchasers;

 

(g)       To sell or assign any of the Collateral upon such terms, for such
amounts and at such time or times as Lenders deems advisable, and to execute any
bills of sale or assignments in the name of Holdings, the Borrower or any
Borrower Subsidiary in relation thereto;

 

(h)       To take control, in any manner, of any item of payment on, or proceeds
of, Collateral;

 

(i)       To prepare, file and sign Holdings, the Borrower or any Borrower
Subsidiary’s name on any proof of claim in bankruptcy or similar document
against any Purchaser;

 

(j)       To prepare, file and sign Holdings, the Borrower or any Borrower
Subsidiary’s name on any notice of lien, assignment or satisfaction of lien or
similar document in connection with the Collateral;

 

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(k)       To sign or endorse the name of Holdings, the Borrower or any Borrower
Subsidiary upon any Chattel Paper, Document, Instrument, invoice, freight bill,
bill of lading, warehouse receipt or similar document or agreement relating to
the Collateral;

 

(l)       To use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Collateral to which
Holdings, the Borrower or any Borrower Subsidiary has access;

 

(m)       To receive, take, endorse, assign and deliver in the Lenders’ name or
in the name of Holdings, the Borrower or any Borrower Subsidiary any and all
checks, notes, drafts and other instruments;

 

(n)       To receive, open and dispose of all mail addressed to Holdings, the
Borrower or any Borrower Subsidiary and to notify postal authorities to change
the address for the delivery thereof to such address as the Lenders may
designate; and

 

(o)       To do all acts and things necessary, in the Lenders’ discretion, to
fulfill Holdings, the Borrower or any Borrower Subsidiary’s obligations under
this Agreement and to otherwise carry out the purposes of this Agreement.

 

8.8       Default Costs. Holdings, the Borrower and each Borrower Subsidiary
hereby agree to pay to each Lender upon demand all default costs incurred by
such Lender, which agreement shall be a continuing agreement and shall survive
payment of the Loans and termination of this Agreement.

 

ARTICLE IX.
MISCELLANEOUS.

 

9.1       Waiver. No remedy conferred upon, or reserved to, the Lenders in this
Agreement or any of the other Loan Documents is intended to be exclusive of any
other remedy or remedies, and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing in law or in equity. Exercise or omission to exercise any right of the
Lenders shall not affect any subsequent right of the Lenders to exercise the
same. No course of dealing between Holdings, the Borrower or any Borrower
Subsidiary and the Lenders or any delay on the Lenders’ part in exercising any
rights shall operate as a waiver of any of the Lenders’ rights. No waiver of any
Default or Event of Default under this Agreement or any of the other Loan
Documents shall extend to or shall affect any subsequent or other then existing
Default or Event of Default or shall impair any rights, remedies or powers of
the Lenders,

 

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9.2       Costs and Expenses. The Borrower will bear all taxes, reasonable fees
and expenses (including reasonable attorneys’ fees and expenses of counsel for
the Lenders) incurred in connection with the Loan, the Note, the preparation of
this Agreement and the other Loan Documents (including any amendments hereafter
made), and in connection with any modifications thereto and the recording of any
of the Loan Documents, other than any income or franchise tax or financial
institutions tax which may be due and payable by the Lenders as a result of the
Loan. If, at any time, a Default or Event of Default occurs or the Lenders
become a party to any suit or proceeding in order to protect their interests or
priority in any Collateral for any of the Loan Obligations or their rights under
this Agreement or any of the other Loan Documents, or if the Lenders are made a
party to any suit or proceeding by virtue of the Loan, the Loan Documents or any
Collateral for any Loan Obligations and as a result of any of the foregoing, the
Lenders employ counsel to advise or provide other representation with respect to
the Loan Documents, or to collect the balance of the Loan Obligations, or to
take any action in or with respect to any suit or proceeding relating to this
Agreement, any of the other Loan Documents, any Collateral for any of the Loan
Obligations, Holdings, the Borrower or any Borrower Subsidiary or to protect,
collect, or liquidate any of the security for the Loan Obligations, or attempt
to enforce any security interest or Lien granted to the Lenders by any of the
Loan Documents, then in any such events, all of the reasonable attorneys’ fees
incurred from such services, including fees on appeal and in any bankruptcy
proceedings, and any reasonable expenses, costs and charges relating thereto
shall constitute additional obligations of Holdings, the Borrower or any
Borrower Subsidiary to the Lenders payable on demand of the Lenders. Without
limiting the foregoing, Holdings, the Borrower and each Borrower Subsidiary have
undertaken the obligation for payment of, and shall pay, all recording and
filing fees, revenue or documentary stamps or taxes, intangibles taxes, and
other taxes, expenses and charges payable in connection with this Agreement,
each of the Loan Documents, the Loan Obligations, and the filing of any
financing statements or other instruments required to effectuate the purposes of
this Agreement, and should Holdings, the Borrower or any Borrower Subsidiary
fail to do so, the Borrower agrees to reimburse the Lenders for the amounts paid
by the Lenders, together with penalties or interest, if any, incurred by the
Lenders as a result of underpayment or nonpayment. This Section shall survive
repayment of the Loan Obligations.

 

9.3       Performance of Lenders. At its option, upon Holdings, the Borrower or
any Borrower Subsidiary’s failure to do so, the Lenders, after giving reasonable
notice to the Borrower under the circumstances but not required to exceed five
(5) days, may make any payment or do any act on Holdings, the Borrower or any
Borrower Subsidiary’s behalf that Holdings, the Borrower or any Borrower
Subsidiary or others are required to do to remain in compliance with this
Agreement or any of the other Loan Documents in connection with the protection
and preservation of the Collateral, and the Borrower agrees to reimburse the
Lenders, on demand, for any reasonable payment made or expense incurred by the
Lenders pursuant to the foregoing authorization, including, without limitation,
reasonable attorneys’ fees actually incurred, and until so repaid any sums
advanced by the Lenders shall bear interest at the Default Rate from the date
advanced until repaid.

 

9.4       Headings. The headings of the Sections of this Agreement are for
convenience of reference only, are not to be considered a part hereof, and shall
not limit or otherwise affect any of the terms hereof.

 

9.5       Survival of Covenants. All covenants, agreements, representations and
warranties made herein and in certificates or reports delivered pursuant hereto
shall be deemed to have been material and relied on by the Lenders,
notwithstanding any investigation made by or on behalf of the Lenders, and shall
survive the execution and delivery of the Note, this Agreement and the other
Loan Documents to the Lenders.

 

9.6       Agent Lender. The Lenders have selected TRS as the initial Agent
Lender for the Loans.

 

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9.7       Notices, etc. Any notice or other communication required or permitted
to be given by this Agreement or the other Loan Documents or by applicable law
shall be in writing and shall be deemed received (a) on the date delivered, if
sent by hand delivery (to the person or department if one is specified below),
(b) three (3) days following the date deposited in U.S. mail, certified or
registered, with return receipt requested, or (c) one (1) day following the date
deposited with FedEx or other national overnight carrier, and in each case
addressed as follows:

 

If to the Borrower

 

Ipic-Gold Class Entertainment, LLC
433 Plaza Real
Suite 335
Boca Raton, FL 33432
Attention: Hamid Hashemi
Facsimile: (561) 886-3258

 

With a copy to:

 

Paul Safran, General Counsel
433 Plaza Real
Suite 335
Boca Raton, FL 33432
Facsimile: (561) 886-3258

 

If to the Lenders to Agent Lender:

 

The Teachers’ Retirement System of Alabama
201 South Union Street
Montgomery, Alabama 36130
Attention: Private Placement Dept.

 

With a copy to:

 

Donald M. Warren, Esq.
Burr & Forman LLP
420 North 20th Street
Suite 3400
Birmingham, Alabama 35203

 

Either party may change its address to another single address by notice given as
herein provided, except any change of address notice must be actually received
in order to be effective. Notwithstanding the foregoing, for Borrower’s
convenience in sending notices to Agent Lender, Borrower may precede any written
notice otherwise sent in accordance with this Section 9.7 with email
communications to hunter.harrell@rsa-al.gov, rachel.daniels@rsa-al.gov. and
steve.timins@rsa-al.gov; provided however, any such email communications must be
followed by written notice delivered by hand delivery, U.S. Mail, or by national
overnight carrier as required above.

 

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9.8       Register; Participant Register. The Agent Lender, acting solely for
this purpose as an agent of the Borrower, shall maintain a register, in
accordance with its current practice as of the Restatement Effective Date, for
the recordation of the names and addresses of the Lenders, and the commitments
of, and principal amounts (and stated interest) of the Advances owing to, each
Lender pursuant to the terms hereof from time to time (the “Register”). The
entries in the Register shall be conclusive absent manifest error and the
Borrower, the Agent Lender and the Lenders shall treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower and any Lender, at any reasonable time and from time to time
upon reasonable prior notice. In the event that a Lender sells a participation
in all or a portion of such Lender’s rights and/or obligations under this
Agreement, such Lender shall, acting solely for this purposes as a non-fiduciary
agent of the Borrower, maintain a register on which it enters the name and
address of each participant and the principal amounts (and stated interest) of
each participant’s interest in the Advances or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any participant or any information relating to a participant’s
interest in any commitments, loans or other obligations under any Loan Document)
to any Person except to the extent that such disclosure is necessary to
establish that such commitment, loan or other obligation is in registered form
under Section 5f.103-1(c) of the United States Treasury Regulations. The entries
in the Participant Register shall be conclusive absent manifest error, and such
Lender shall treat each Person whose name is recorded in the Participant
Register as the owner of such participation for all purposes of this Agreement,
notwithstanding any notice to the contrary. For the avoidance of doubt, the
Agent Lender (in its capacity as such) shall have no responsibility for
maintaining a Participant Register.

 

9.9       Borrower Subsidiaries. To the extent permitted by this Agreement, it
is anticipated that Borrower may create and invest in Borrower Subsidiaries for
the purpose of developing and operating certain of the Projects and otherwise
conducting the ordinary course of business of Borrower and the Projects,
including, but not limited to the herein named Borrower Subsidiaries. Borrower,
each Borrower Subsidiary and Lender agree that each Borrower Subsidiary shall be
subject to and restricted by all the terms and conditions of this Agreement and
the other Loan Documents to the same extent as Borrower, including restrictions
relating to the establishment of Deposit Accounts, Lenders’ interests therein
and control thereof. Additionally, Borrower, each Borrower Subsidiary and Lender
agree that all of Borrower Subsidiary’s interest (other than the interest of any
Borrower Subsidiary that is a foreign subsidiary (or any domestic subsidiary
substantially all of the assets of which consist directly or indirectly of
Equity Interests in any foreign subsidiary)) in any Collateral shall be subject
to the Lender lien on and security interest therein and upon the creation of any
other Borrower Subsidiary, Borrower shall assign and pledge to Agent Lender all
Borrower’s ownership interests in such Borrower Subsidiary by executing a
document substantially in the same form as the Pledge of Membership Interest and
such other documentation as reasonably required by Agent Lender.

 

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9.10       Ground Leases Involving Borrower Building Construction. As provided
in the last paragraph of the General Project Parameters set forth in Exhibit B
hereto, Borrower may develop a Project utilizing a ground lease structure
whereby Borrower would hold fee title to and be responsible for constructing the
actual building-shell Improvements as opposed to leasing such building from an
un-affiliated owner/lessor. Notwithstanding the foregoing, Borrower anticipates
most Projects will involve leasing building Improvements; and therefore, this
Agreement primarily addresses such situations. In the event Borrower desires to
utilize a ground lease structure for a Project, Agent Lender reserves the right
to require additional Project- Specific Due Diligence not otherwise required by
this Agreement prior to Advances for such Project, such additional
Project-Specific Due Diligence being due diligence as might reasonably be
expected to be required by construction lenders in making construction loans
similar in size and scope to that of the proposed Project. Such additional
Project-Specific Due Diligence may include, without limitation, environmental
phase I site assessment reports, ALTA surveys, geotechnical reports, and typical
construction due diligence related to the building Improvements.

 

9.11       Inspections and Reviews. The review of surveys, title commitments or
reports, construction plans and specifications, construction inspection reports,
environmental reports, property condition reports or any other documents or
matters relating to the Property or Improvements, including, without limitation,
matters relating to the construction (collectively, the “Project Documents and
Matters”) by the Lenders or any third party consultants retained by the Lenders
(the “Consultants”) is solely for the use and benefit of the Lenders and
Consultants in connection with the Lenders’ decision to make the Loan or
advances thereof and shall not result in any obligation or liability of any kind
upon the Lenders or any of the Consultants. Such reviews are not intended to
supplement or replace a diligent review of Project Documents and Matters or
similar reports by the Borrower or professionals retained by the Borrower, and
the Borrower shall not be entitled to rely upon such reviews by the Lenders or
the Consultants even though Borrower may have agreed to reimburse the Lenders
for the costs thereof. None of the Consultants shall be considered an agent,
employee or contractor of or for the Borrower, and the Borrower is not an
intended beneficiary of their work or their contracts with the Lenders. Neither
the Lenders nor the Consultants shall have any duty to disclose to the Borrower
the results or conclusions of any such reviews. Neither the Lenders nor the
Consultants will be responsible for the condition, quality or safety of any
Improvements.

 

9.12       Benefits. All of the terms and provisions of this Agreement shall
bind and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Borrower shall have no right to assign
its rights under this Agreement or the other Loan Documents without the Agent
Lender’s prior written consent, which consent may be withheld in the Agent
Lender’s sole discretion, and any such attempted assignment shall be void and of
no force and effect. No Person other than the Borrower or the Lenders shall be
entitled to rely upon this Agreement or be entitled to the benefits of this
Agreement.

 

9.13       Supersedes Prior Agreements; Counterparts. This Agreement and the
instruments referred to herein supersede and incorporate all representations,
promises, and statements, oral or written, made by the Lenders in connection
with the Loan. This Agreement may not be varied, altered, or amended except by a
written instrument executed by an authorized officer of the Lenders and the
Borrower. This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be an original, but such counterparts
shall together constitute one and the same instrument.

 

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9.14       Controlling Law. The validity, interpretation, enforcement and effect
of this Agreement shall be governed by, and construed in accordance with, the
laws of the State of Alabama. The Lenders’ principal place of business is
located in Montgomery County in the State of Alabama, and Holdings, the Borrower
and each Borrower Subsidiary agree that this Agreement shall be delivered to and
held by the Lenders at such principal place of business, and the holding of this
Agreement by the Lenders thereat shall constitute sufficient minimum contacts of
Holdings, the Borrower and each Borrower Subsidiary with Montgomery County and
the State of Alabama for the purpose of conferring jurisdiction upon the federal
and state courts presiding in such county and state. Holdings, the Borrower and
each Borrower Subsidiary consent that any legal action or proceeding arising
hereunder may be brought in the circuit court of the State of Alabama,
Montgomery County, Alabama or the United States District Court for the Middle
District of Alabama and each assents and submits to the personal jurisdiction of
any such court in any action or proceeding involving this Agreement. Nothing
herein shall limit the jurisdiction of any other court.

 

9.15       Confidentiality. Except to the extent required by law, any publicity,
press releases, or similar disclosures relating to this Agreement or the
transactions contemplated hereby may be made only with the prior written consent
of Borrower and Agent Lender (such consent not to be unreasonably withheld).
Upon the sale or refinance of the Projects resulting in payment in full of all
Loan Obligations and the sale of Lenders’ interest as a member of Borrower, no
further reference shall be made to Lenders’ association with the development of
the Projects.

 

9.16       Waiver of Jury Trial. HOLDINGS, THE BORROWER AND EACH BORROWER
SUBSIDIARY AND LENDERS HEREBY WAIVE ANY RIGHT THAT ANY OF THEM MAY HAVE TO A
TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF
ACTION (A) ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS, OR THE LOAN, OR (B) IN ANY WAY CONNECTED WITH OR PERTAINING OR
RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE LENDERS AND HOLDINGS, THE
BORROWER AND EACH BORROWER SUBSIDIARY WITH RESPECT TO THE LOAN DOCUMENTS OR IN
CONNECTION WITH THIS AGREEMENT OR THE EXERCISE OF ANY PARTY’S RIGHTS AND
REMEDIES UNDER THIS AGREEMENT, OR OTHERWISE, OR THE CONDUCT OR THE RELATIONSHIP
OF THE PARTIES HERETO, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. HOLDINGS,
THE BORROWER AND EACH BORROWER SUBSIDIARY AND LENDERS AGREE THAT ANY OF THEM MAY
FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY, AND BARGAINED AGREEMENT OF HOLDINGS, THE BORROWER AND EACH BORROWER
SUBSIDIARY AND LENDERS IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY AS AN
INDUCEMENT OF THE PARTIES TO ENTER INTO THIS AGREEMENT, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER (WHETHER OR
NOT MODIFIED HEREIN) BETWEEN HOLDINGS, THE BORROWER AND EACH BORROWER SUBSIDIARY
AND THE LENDERS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A
JUDGE SITTING WITHOUT A JURY.

 

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9.17       Consent. Except as otherwise specifically provided in this Agreement,
whenever the consent or approval of the Lenders or Agent Lender is required as
to any matter described herein, such consent or approval may be given or
withheld in the sole and absolute discretion of the Lenders or Agent Lender, as
applicable. The consent or approval by the

 

Lenders as to any matter described herein shall not bind the Lenders as to
subsequent matters required to be submitted to the Lenders or limit or impair
the Lenders’ right to grant or withhold their consent or approval in their sole
and absolute discretion as to any other matter described herein.

 

9.18       No Oral Agreements/Notice. THIS WRITTEN LOAN AGREEMENT AND THE LOAN
DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

9.19       Amendment and Restatement; No Novation. This agreement constitutes
and amendment and restatement of the Existing Loan Agreement and does not
extinguish the obligations for the payment of money under the Existing Loan
Agreement or discharge or release the Loan Obligations under, and as defined in,
the Existing Loan Agreement or the Lien or priority of any mortgage, pledge,
security agreement or any other security therefore. Nothing contained herein
shall be construed as a substitution or novation of the Loan Obligations
outstanding under, and as defined in, the Existing Loan Agreement or instruments
securing the same, which shall remain in full force and effect, except as
modified hereby or by instruments or documents executed concurrently herewith.
Holdings, the Borrower and each Borrower Subsidiary hereby (a) confirms and
agrees that each Loan Document to which it is a party is, and shall continue to
be, in full force and effect, as modified by this Agreement and instruments or
documents executed concurrently herewith, and is hereby ratified and confirmed
in all respects except that on and after the Effective Date all references in
any such Loan Document to the "Financing Agreement," "thereto," "thereof,"
"thereunder" or words of like import referring to the Existing Loan Agreement
shall mean the Existing Loan Agreement as amended and restated by this Agreement
and (b) confirms and agrees that to the extent any such Loan Document purports
to assign or pledge to the Agent Lender a security interest in or Lien on, any
collateral as security for the obligations of the Borrower and Borrower
Subsidiaries from time to time existing in respect of the Existing Loan
Agreement and the Loan Documents, such pledge, assignment and/or grant of the
security interest or Lien is hereby ratified and confirmed in all respects.

 

9.20       Video Rights. Lenders, so long as the Loan Obligations remain
outstanding, shall have the right to designate a video with Alabama-related
content of up to one minute (or longer by mutual agreement) with such content as
shall have been approved in writing by the Borrower and Agent Lender to be
played prior to each showing of a feature film to a paying audience at each
theater owned by Holdings, the Borrower or any Borrower Subsidiary. All costs
associated with such videos including, without limitation, graphics, materials
and installation, shall be borne by Borrower up to $1,000,000.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
all as of the date first above written.

 

  BORROWER:       IPIC-GOLD CLASS ENTERTAINMENT, LLC         By: /s/ Hamid
Hashemi   Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of IPIC-GOLD CLASS ENTERTAINMENT LLC, a Delaware limited liability
company, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said limited liability company, on the day the
same bears date.

 

Given under my hand and seal this 30th day of January, 2018.

 

  /s/Joseph Meland   Notary Public   My commission expires: November 20, 2018

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
all as of the date first above written.

 

  HOLDINGS:       IPIC GOLD CLASS HOLDINGS LLC         By: /s/ Hamid Hashemi  
Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of IPIC-GOLD CLASS ENTERTAINMENT LLC, a Delaware limited liability
company, is signed to the foregoing instrument, and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said limited liability company, on the day the
same bears date.

 

Given under my hand and seal this 30th day of January, 2018.

 

  /s/ Joseph Meland   Notary Public   My commission expires:  November 20, 2018

 

 

 

 

  BORROWER SUBSIDIARY:       IPIC TEXAS, LLC         By: /s/ Hamid Hashemi  
Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of IPIC TEXAS, LLC, a Texas limited liability company, is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this day
that, being informed of the contents of the instrument, he, as such officer and
with full authority, executed the same voluntarily for and as the act of said
limited liability company, on the day the same bears date.

 

Given under my hand and seal this 30th day of January, 2018.

 

  /s/ Joseph Meland   Notary Public   My commission expires: November 20, 2018

 

 

 

 

  BORROWER SUBSIDIARY:       IPIC MEDIA, LLC         By: /s/ Hamid Hashemi  
Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of IPIC MEDIA, LLC, a Florida limited liability company, is signed to
the foregoing instrument, and who is known to me, acknowledged before me on this
day that, being informed of the contents of the instrument, he, as such officer
and with full authority, executed the same voluntarily for and as the act of
said limited liability company, on the day the same bears date.

 

Given under my hand and seal this 30th day of January, 2018.

 

  /s/ Joseph Meland   Notary Public   My commission expires: November 20, 2018

 

 

 

 

  BORROWER SUBSIDIARY:       DELRAY BEACH HOLDINGS, LLC         By: /s/ Hamid
Hashemi   Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of DELRAY BEACH HOLDINGS, LLC, a Florida limited liability company, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the instrument, he, as
such officer and with full authority, executed the same voluntarily for and as
the act of said limited liability company, on the day the same bears date.

 

Given under my hand and seal this 30th day of January, 2018.

 

  /s/ Joseph Meland   Notary Public   My commission expires: November 20, 2018

 

 

 

 

  BORROWER SUBSIDIARY:       BAY COLONY REALTY, LLC         By: /s/ Hamid
Hashemi   Name: Hamid Hashemi   Title: President and Chief Executive Officer

 

STATE OF New York

COUNTY OF New York

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that Hamid Hashemi, whose name as President and Chief Executive
Officer of BAY COLONY REALTY, LLC, a Florida limited liability company, is
signed to the foregoing instrument, and who is known to me, acknowledged before
me on this day that, being informed of the contents of the instrument, he, as
such officer and with full authority, executed the same voluntarily for and as
the act of said limited liability company, on the day the same bears date.

 

Given under my hand and seal this 30th day of January 2018.

 

  /s/ Joseph Meland   Notary Public   My commission expires: November 20, 2018 

 

 

 

 

  LENDERS:       THE TEACHERS’ RETIREMENT SYSTEM OF ALABAMA    
                                      BY: /s/ David G. Bronner   Its: CEO

 

STATE OF Alabama

COUNTY OF Elmore

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that David G. Bronner, whose name as CEO of Teachers’ Retirement
System of Alabama is signed to the foregoing Agreement, and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
Agreement, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said body corporate of the State of Alabama
acting in its capacity as aforesaid.

 

Given under my hand and official seal this 24th day of January, 2018.

 

  /s/ Heather Haun   Notary Public   My commission expires: 3/28/18

 

 

 

 

  THE EMPLOYEES’ RETIREMENT SYSTEM OF ALABAMA    
                                      BY: /s/ David G. Bronner   Its: CEO

 

STATE OF Alabama

COUNTY OF Elmore

 

I, the undersigned, a Notary Public in and for said County, in said State,
hereby certify that David G. Bronner, whose name as CEO of Teachers’ Retirement
System of Alabama is signed to the foregoing Agreement, and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
Agreement, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said body corporate of the State of Alabama
acting in its capacity as aforesaid.

 

Given under my hand and official seal this 24th day of January, 2018.

 

  Heather Haun   Notary Public   My commission expires: 3/28/18