Exhibit 4.15


 


LOAN AGREEMENT


THIS LOAN AGREEMENT (this “Agreement”) is made as of
December 30, 2005 (the “Closing Date”), by and between GE CAPITAL FRANCHISE
FINANCE CORPORATION, a Delaware corporation (“Lender”), and FRIENDLY’S REALTY
I, LLC, a Delaware limited liability company (“Borrower”).


AGREEMENT:


In consideration of the mutual covenants and
provisions of this Agreement, the parties agree as follows:


1.         Definitions. The following terms shall have the
following meanings for all purposes of this Agreement:


“ADA” means the Americans with Disabilities Act
of 1990, as such act may be amended from time to time.


“Affiliate” means any Person that directly or
indirectly controls, is under common control with, or is controlled by any
other Person. For purposes of this definition, “controls”, “under common
control with” and “controlled by” mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through ownership of voting securities or otherwise.


“Anti-Money
Laundering Laws” means
all applicable laws, regulations and government guidance on the prevention and
detection of money laundering, including 18 U.S.C. § § 1956 and 1957, and the
BSA.


“Applicable
Regulations” means all
applicable statutes, regulations, rules, ordinances, codes, licenses, permits,
orders and approvals of each Governmental Authority having jurisdiction over
the Premises, including, without limitation, all health, building, fire, safety
and other codes, ordinances and requirements, all applicable standards of the
National Board of Fire Underwriters and the ADA and all policies or rules of
common law, in each case, as amended, and any judicial or administrative
interpretation thereof, including any judicial order, consent, decree or
judgment applicable to any of the Borrower Parties or any of the Lessee
Parties.


“Borrower Parties” means, collectively, Borrower and any
guarantors of the Loan (including, in each case, any predecessors-in-interest).


“BSA”
means the Bank Secrecy Act (31 U.S.C. §§5311 et. seq.), and its implementing
regulations, Title 31 Part 103 of the U.S. Code of Federal Regulations.


“Business Day” means any day on which Lender is open for
business other than a Saturday, Sunday or a legal holiday, ending at 5:00 P.M.
Phoenix, Arizona time.


“Closing” means the disbursement of the Loan Amount
by Title Company as contemplated by this Agreement.


“Code” means Title 11 of the United States Code,
11 U.S.C. Sec. 101 et seq., as
amended.


“Corporate Fixed Charge
Coverage  Ratio” has the meaning set forth in Section 6.J.


“Default Rate” has the meaning set forth in the Note.


 


1

















 


“Entity” means any entity that is not a
natural person.


“Environmental
Indemnity Agreement” means the environmental indemnity agreement
dated as of the date of this Agreement executed by Borrower for the benefit of
the Indemnified Parties and such other parties as are identified in such
agreement with respect to the Premises, as the same may be amended from time to
time.


“Event of Default” has
the meaning set forth in Section 9.


“Fee” means an
underwriting, site assessment, valuation, processing and commitment fee equal
to 1.0% of the Loan Amount.


“GAAP” means
generally accepted accounting principles consistently applied.


“Governmental Authority” means
any governmental authority, agency, department, commission, bureau, board,
instrumentality, court or quasi-governmental authority having jurisdiction or
supervisory or regulatory authority over the Premises or any of the Borrower
Parties.


“Indemnified Parties” means
Lender, the trustees under the Mortgage, if applicable, and any person or
entity who is or will have been involved in the origination of the Loan, any
person or entity who is or will have been involved in the servicing of the
Loan, any person or entity in whose name the encumbrance created by the
Mortgage is or will have been recorded, persons and entities who may hold or
acquire or will have held a full or partial interest in the Loan (including,
but not limited to, investors or prospective investors in any Securitization,
Participation or Transfer, as well as custodians, trustees and other
fiduciaries who hold or have held a full or partial interest in the Loan for
the benefits of third parties), as well as the respective directors, officers,
shareholders, partners, members, employees, lenders, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assigns of any and all of the foregoing
(including, but not limited to, any other person or entity who holds or
acquires or will have held a participation or other full or partial interest in
the Loan or the Premises, whether during the term of the Loan or as a part of
or following a foreclosure of the Loan and including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of Lender’s assets and business).


“Indemnity Agreements” means
all indemnity agreements executed for the benefit of any of the Borrower
Parties, Lessee Parties or any prior owner, lessee or occupant of the Premises
in connection with Hazardous Materials, including, without limitation, the
right to receive payments under such indemnity agreements.


“Lease” means
the lease between Borrower, as lessor, and Lessee, as lessee, with respect to
the Premises together with all amendments, modifications and supplements
thereto.


“Lender Entities” means,
collectively, Lender (including any predecessor-in-interest to Lender) and any
Affiliate of Lender (including any Affiliate of any predecessor-in-interest to
Lender).


“Lessee” means
Friendly Ice Cream Corporation, a Massachusetts corporation, and its
successors.


“Lessee Parties” means,
collectively, Lessee and any guarantors of the Lease (including, in each case,
any predecessors in interest).


“Loan” means
the loan for the Premises described in Section 2.


“Loan Amount” means
$930,000.00.


 


2

















 


“Loan Documents” means, collectively, this Agreement, the Note, the
Mortgage, the Environmental Indemnity Agreement, the Subordination Agreement,
the UCC-1 Financing Statements, the Authorization Regarding Information form
previously delivered on behalf of the Borrower Parties to Lender and all other
documents, instruments and agreements executed in connection therewith or
contemplated thereby, as the same may be amended from time to time.


“Loan Pool” means: (a) in the context of a
Securitization, any pool or group of loans that are a part of such
Securitization; (b) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and (c) in the context of a
Participation, all loans as to which participating interests are granted to the
same participant.


“Material Adverse
Effect” means a
material adverse effect on (a) the Premises, including, without limitation, the
operation of the Premises as a Permitted Concept, or (b) Borrower’s ability to
perform its obligations under the Loan Documents.


“Mortgage” means the deed of trust, deed to secure
debt or mortgage dated as of the date of this Agreement executed by Borrower
for the benefit of Lender with respect to the Premises, as the same may be
amended from time to time.


“Note” means the promissory note dated as of the
date of this Agreement executed by Borrower in favor of Lender evidencing the
Loan, as the same may be amended, restated or substituted from time to time.


“Obligations”
has the meaning set forth in the Mortgage.


“OFAC Laws and
Regulations” means
Executive Order 13224 issued by the President of the United States of America,
the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of
Federal Regulations), the Terrorism List Governments Sanctions Regulations
(Title 31 Part 596 of the U.S. Code of Federal Regulations), the Foreign
Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S.
Code of Federal Regulations), and the Cuban Assets Control Regulations (Title
31 Part 515 of the U.S. Code of Federal Regulations), and all other present and
future federal, state and local laws, ordinances, regulations, policies, lists
(including, without limitation, the Specially Designated Nationals and Blocked
Persons List) and any other requirements of any Governmental Authority
(including, without limitation, the United States Department of the Treasury
Office of Foreign Assets Control) addressing, relating to, or attempting to
eliminate, terrorist acts and acts of war, each as hereafter supplemented,
amended or modified from time to time, and the present and future rules,
regulations and guidance documents promulgated under any of the foregoing, or
under similar laws, ordinances, regulations, policies or requirements of other
states or localities.


“Other Agreements” means, collectively, all agreements and
instruments between, among or by (a) any of the Borrower Parties or any
Affiliate of any of the Borrower Parties (including any Affiliate of any
predecessor-in-interest to any of the Borrower Parties), and, or for the
benefit of, (b) any of the Lender Entities, including, without limitation,
promissory notes and guaranties; provided, however, the term “Other Agreements”
shall not include the agreements and instruments defined as the Loan Documents.


“Participation” means one or more grants by Lender or any
of the other Lender Entities to a third party of a participating interest in
notes evidencing obligations to repay secured or unsecured loans owned by
Lender or any of the other Lender Entities or any or all servicing rights with
respect thereto.


“Permitted Concept” means a Friendly’s restaurant.


 


3

















 


“Permitted Exceptions” means those recorded easements,
restrictions, liens and encumbrances set forth as exceptions in the title
insurance policy issued by Title Company to Lender and approved by Lender in
its sole discretion in connection with the closing of the Loan.


“Person” means any individual, corporation,
partnership, limited liability company, trust, unincorporated organization, Governmental
Authority or any other form of entity.


“Personal Property” has the meaning set forth in the
Mortgage.


“Premises” means the parcel or parcels of real
estate legally described on Exhibit A attached hereto, together with all
rights, privileges and appurtenances associated therewith and all buildings,
fixtures and other improvements now or hereafter located thereon (whether or
not affixed to such real estate) and the Personal Property.


“Restoration” has the meaning set forth in the
Mortgage.


“Securitization” means one or more sales, dispositions,
transfers or assignments by Lender or any of the other Lender Entities to a
special purpose corporation, trust or other entity identified by Lender or any
of the other Lender Entities of notes evidencing obligations to repay secured
or unsecured loans owned by Lender or any of the other Lender Entities (and, to
the extent applicable, the subsequent sale, transfer or assignment of such
notes to another special purpose corporation, trust or other entity identified
by Lender or any of the other Lender Entities), and the issuance of bonds,
certificates, notes or other instruments evidencing interests in pools of such
loans, whether in connection with a permanent asset securitization or a sale of
loans in anticipation of a permanent asset securitization. Each Securitization
shall be undertaken in accordance with all requirements which may be imposed by
the investors or the rating agencies involved in each such sale, disposition,
transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations.


“Subordination
Agreement” means the
subordination and attornment agreement dated as of the date of this Agreement
executed by Borrower, Lessee and Lender with respect to the Lease as the same
may be amended from time to time.


“Title Company” means Lawyers Title Insurance
Corporation.


“Transfer” means one or more sales, transfers or
assignments by Lender or any of the other Lender Entities to a third party of
notes evidencing obligations to repay secured or unsecured loans owned by
Lender or any of the other Lender Entities or any or all servicing rights with
respect thereto.


“UCC-1 Financing
Statements” means such
UCC-1 Financing Statements as Lender shall file with respect to the transactions
contemplated by this Agreement.


“UCC” has the meaning set forth in the
Mortgage.


“U.S.
Publicly-Traded Entity” is
an Entity whose securities are listed on a national securities exchange or
quoted on an automated quotation system in the U.S. or a wholly-owned
subsidiary of such an Entity.


2.         Transaction.
On the terms and subject to the conditions set forth in the Loan
Documents, Lender shall make the Loan. The Loan will be evidenced by the Note
and secured by the Mortgage. Borrower shall repay the outstanding principal
amount of the Loan together with interest thereon in the manner and in
accordance with the terms and conditions of the Note and the other Loan
Documents. The Premises shall be leased to the Lessee pursuant to the Lease
and, at Closing, Borrower shall assign the Lease to Lender pursuant to the
Mortgage. The Loan shall be advanced at the


 


4

















 


Closing in cash or otherwise immediately available
funds subject to any prorations and adjustments required by this Agreement.


3.         Escrow Agent; Closing Costs.
Borrower and Lender hereby employ Title Company to act as escrow agent in
connection with the transactions described in this Agreement. Borrower and
Lender will deliver to Title Company all documents, pay to Title Company all
reasonable sums for the services rendered by the Title Company in connection
with this transaction, and do or cause to be done all other things necessary or
required by this Agreement, in the reasonable judgment of Title Company, to
enable Title Company to comply herewith and to enable any title insurance
policy provided for herein to be issued. Title Company shall not cause the
transaction to close unless and until it has received written instructions from
Lender and Borrower to do so. Title Company is authorized to pay, from any
funds held by it for Lender’s or Borrower’s respective credit all amounts
necessary to procure the delivery of such documents and to pay, on behalf of
Lender and Borrower, all charges and obligations payable by them, respectively.
Borrower will pay all charges payable by it to Title Company. Title Company is
authorized, in the event any conflicting demand is made upon it concerning
these instructions or the escrow, at its election, to hold any documents or funds
deposited hereunder until an action shall be brought in a court of competent
jurisdiction to determine the rights of Borrower and Lender or to interplead
such documents or funds in an action brought in any such court. Deposit by
Title Company of such documents and funds, after deducting therefrom its
charges and its expenses and attorneys’ fees incurred in connection with any
such court action, shall relieve Title Company of all further liability and
responsibility for such documents and funds. Title Company’s receipt of this
Agreement and opening of an escrow pursuant to this Agreement shall be deemed
to constitute conclusive evidence of Title Company’s agreement to be bound by
the terms and conditions of this Agreement pertaining to Title Company. Disbursement
of any funds shall be made by check, certified check or wire transfer, as
directed by Borrower and Lender. Title Company shall be under no obligation to
disburse any funds represented by check or draft, and no check or draft shall
be payment to Title Company in compliance with any of the requirements hereof,
until it is advised by the bank in which such check or draft is deposited that
such check or draft has been honored. Title Company is authorized to act upon
any statement furnished by the holder or payee, or a collection agent for the
holder or payee, of any lien on or charge or assessment in connection with the
Premises, concerning the amount of such charge or assessment or the amount
secured by such lien, without liability or responsibility for the accuracy of
such statement. The employment of Title Company as escrow agent shall not
affect any rights of subrogation under the terms of any title insurance policy
issued pursuant to the provisions thereof.


4.        Closing
Conditions.  The obligation of Lender to consummate
the transaction contemplated by this Agreement is subject to the fulfillment or
waiver of each of the following conditions:


A.       Title Insurance Commitments. Lender shall
have received for the Premises a preliminary title report and irrevocable
commitment to insure title in the amount of the Loan, by means of a
mortgagee’s, ALTA extended coverage policy of title insurance (or its
equivalent, in the event such form is not issued in the jurisdiction where the
Premises is located) issued by Title Company showing Borrower vested with good
and marketable fee title in the real property comprising such Premises,
committing to insure Lender’s first priority lien upon and security interest in
such real property subject only to Permitted Exceptions, and containing such
endorsements as Lender may require.


B.        Survey. Lender shall have received a
current ALTA survey of the Premises or its equivalent, the form and substance
of which shall be satisfactory to Lender in its reasonable discretion. Lender
shall have obtained a flood certificate indicating that the location of the
Premises is not within the 100-year flood plain or identified as a special
flood hazard area as defined by the Federal Emergency Management Agency, or if
the Premises is in such a flood plain or special flood hazard area, Borrower
shall have provided Lender with evidence of flood insurance maintained on the
Premises in an amount and on terms and conditions reasonably satisfactory to
Lender.


 


5

















 


C.        Environmental. Lender
shall have completed such environmental due diligence of the Premises as it
deems necessary or advisable in its sole discretion, and Lender shall have
approved the environmental condition of the Premises in its sole discretion.


D.        Compliance With Representations, Warranties and
Covenants. All of the representations and warranties set forth in
Section 5 shall be true, correct and complete as of the Closing Date, and
Borrower shall be in compliance with each of the covenants set forth in Section
6 as of the Closing Date. No event shall have occurred or condition shall exist
or information shall have been disclosed by Borrower or discovered by Lender
which has had or would be reasonably likely to have a Material Adverse Effect on
the Premises, any of the Borrower Parties or Lessee Parties or Lender’s
willingness to consummate the transaction contemplated by this Agreement, as
determined by Lender in its sole and absolute discretion.


E.        Proof of Insurance. Borrower shall have
delivered to Lender certificates of insurance and copies of insurance policies
showing that all insurance required by the Loan Documents and providing
coverage and limits satisfactory to Lender are in full force and effect.


F.        Legal Opinions. Borrower shall have
delivered to Lender such legal opinions as Lender may reasonably require all in
form and substance reasonably satisfactory to Lender and its counsel.


G.        Fee and Closing Costs. Borrower shall have
paid the Fee to Lender and shall have paid all costs of the transactions
described in this Agreement, including, without limitation, the cost of title
insurance premiums and all endorsements required by Lender, survey charges, UCC
and litigation search charges, the attorneys’ fees of Borrower, reasonable
attorneys’ fees and expenses of Lender, the cost of the environmental due
diligence undertaken pursuant to Section 4.C, Lender’s site inspection costs
and fees, stamp taxes, mortgage taxes, transfer fees, escrow, filing and
recording fees and UCC filing and recording fees (including preparation, filing
and recording fees for UCC continuation statements). Borrower shall have also
paid all real and personal property and other applicable taxes and assessments
and other charges relating to the Premises which are due and payable on or
prior to the Closing Date as well as taxes and assessments due and payable
subsequent to the Closing Date but which Title Company requires to be paid at
Closing as a condition to the issuance of the title insurance policy described
in Section 4.A.


H.        Lease, Memorandum and Subordination Agreement. Borrower
and Lessee shall have executed and delivered the Lease, and a memorandum of
lease in recordable form for the Premises and the Subordination Agreement. The
Lease, and the Memorandum and the Subordination Agreement shall be in form and
substance reasonably satisfactory to Lender.


I.         Closing Documents. At or prior to the
Closing Date, Lender or the Borrower Parties, as may be appropriate, shall have
executed and delivered or shall have caused to be executed and delivered to
Lender, or as Lender may otherwise direct, the Loan Documents and such other
documents, payments, instruments and certificates, as Lender may require in
form acceptable to Lender.


Upon fulfillment or waiver of all of the above
conditions, Lender shall deposit funds necessary to close this transaction with
the Title Company and this transaction shall close in accordance with the terms
and conditions of this Agreement.


5.         Representations and Warranties of
Borrower. The
representations and warranties of Borrower contained in this Section are being
made by Borrower as of the Closing Date to induce Lender to enter into this
Agreement and consummate the transactions contemplated herein and shall survive
the Closing. Borrower represents and warrants to Lender as follows:


 


6

















 


A.       Financial Information. Borrower
has delivered to Lender certain financial statements and other information
concerning the Borrower Parties in connection with the transaction described in
this Agreement (collectively, the “Financial Information”). The Financial
Information is true, correct and complete in all material respects; there have
been no amendments to the Financial Information since the date such Financial Information
was prepared or delivered to Lender. Borrower understands that Lender is
relying upon the Financial Information and Borrower represents that such
reliance is reasonable. All financial statements included in the Financial Information
were prepared in accordance with GAAP and fairly present as of the date of such
financial statements the financial condition of each individual or entity to
which they pertain. No change has occurred with respect to the financial
condition of any of the Borrower Parties or the Premises as reflected in the
Financial Information, which has not been disclosed in writing to Lender or has
had, or could reasonably be expected to result in, a Material Adverse Effect.


B.        Organization and Authority. Each of the
Borrower Parties (other than individuals), as applicable, is duly organized or
formed, validly existing and in good standing under the laws of its state of
incorporation or formation. Borrower is qualified as a foreign corporation,
partnership or limited liability company, as applicable, to do business in each
state where the Premises is located, and each of the Borrower Parties is
qualified as a foreign corporation, partnership or limited liability company,
as applicable, to do business in any other jurisdiction where the failure to be
qualified would reasonably be expected to result in a Material Adverse Effect.
All necessary action has been taken to authorize the execution, delivery and
performance by the Borrower Parties of this Agreement and the other Loan
Documents. The person(s) who have executed this Agreement on behalf of Borrower
are duly authorized so to do. Borrower is not a “foreign corporation”, “foreign
partnership”, “foreign trust”, “foreign estate” or “foreign person” (as those
terms are defined by the Internal Revenue Code of 1986, as amended). Borrower’s
U.S. Federal Tax Identification number, Organization Identification number and
principal place of business are correctly set forth on the signature page of
this Agreement. None of the Borrower Parties, and no individual or entity
owning directly or indirectly any interest in any of the Borrower Parties, is
an individual or entity whose property or interests are subject to being
blocked under any of the OFAC Laws and Regulations or is otherwise in violation
of any of the OFAC Laws and Regulations; provided, however, the representation
contained in this sentence shall not apply to any Person to the extent such
Person’s interest is in or through a U.S. Publicly-Traded Entity.


C.        Enforceability of Documents. Upon execution
by the Borrower Parties, this Agreement and the other Loan Documents shall
constitute the legal, valid and binding obligations of the Borrower Parties,
respectively, enforceable against the Borrower Parties in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, liquidation, reorganization and other laws affecting
the rights of creditors generally and general principles of equity.


D.        Litigation. There are no suits, actions,
proceedings or investigations pending, or to the best of its knowledge,
threatened against or involving the Borrower Parties or the Premises before any
arbitrator or Governmental Authority, except for such suits, actions,
proceedings or investigations which, individually or in the aggregate, have not
had, and would not reasonably be expected to result in, a Material Adverse
Effect.


E.        Absence of Breaches or Defaults. The
Borrower Parties are not, and the authorization, execution, delivery and
performance of this Agreement and the other Loan Documents will not result, in
any breach or default under any other document, instrument or agreement to
which any of the Borrower Parties is a party or by which any of the Borrower
Parties, the Premises or any of the property of any of the Borrower Parties is
subject or bound, except for such breaches or defaults which, individually or
in the aggregate, have not had, and would not reasonably be expected to result
in, a Material Adverse Effect. The authorization, execution, delivery and
performance of this Agreement and the other Loan Documents will not violate any
applicable law, statute, regulation, rule, ordinance, code, rule or order. The
Premises is not subject to any right of first refusal, right of first offer or
option to purchase or lease granted to a third party (other than the Lease).


 


7

















 


F.        Utilities. Adequate
public utilities are available at the Premises to permit utilization of the
Premises as a Permitted Concept and all utility connection fees and use charges
will have been paid in full prior to delinquency.


G.        Zoning; Compliance With Laws. The Premises
is in compliance with all applicable zoning requirements, and the use of the
Premises as a Permitted Concept does not constitute a nonconforming use under
applicable zoning requirements. The Borrower Parties and the Premises are in
compliance with all Applicable Regulations except for such noncompliance which
has not had, and would not reasonably be expected to result in, a Material
Adverse Effect.


H.        Area Development; Wetlands. No
condemnation or eminent domain proceedings affecting the Premises have been
commenced or, to the best of Borrower’s knowledge without having made any
independent investigations, are contemplated. Neither the Premises, nor to the
best of Borrower’s knowledge, the real property bordering the Premises, are
designated by any Governmental Authority as a wetlands.


I.         Licenses and Permits; Access. All required
licenses and permits, both governmental and private, to use and operate the
Premises as a Permitted Concept are in full force and effect, except for such
licenses and permits the failure of which to obtain has not had, and would not
reasonably be expected to result in, a Material Adverse Effect. Adequate rights
of access to public roads and ways are available to the Premises for
unrestricted ingress and egress and otherwise to permit utilization of the
Premises for their intended purposes, and all such public roads and ways have
been completed and dedicated to public use.


J.         Condition of Premises. The Premises,
including the Personal Property, is in good condition and repair and well
maintained, ordinary wear and tear excepted, fully equipped and operational,
free from structural defects, safe and properly lighted.


K.        Environmental. The representations and
warranties of Borrower set forth in Section 2 of the Environmental Indemnity
Agreement, together with the corresponding definitions, are incorporated by
reference into this Agreement as if stated in full in this Agreement.


L.        Title to Premises; First Priority Lien. Fee
title to the real property comprising the Premises is vested in Borrower, free
and clear of all liens, encumbrances, charges and security interests of any
nature whatsoever, except the Permitted Exceptions. Borrower is owner of all
Personal Property, except for certain leased equipment identified in Schedule 1
attached hereto, free and clear of all liens, encumbrances, charges and
security interests of any nature whatsoever, and no Affiliate of Borrower owns
any of the Personal Property. Upon Closing, Lender shall have a first priority
lien upon and security interest in Borrower’s right, title and interest in and
to the Premises pursuant to the Mortgage and the UCC-1 Financing Statements.


M.       No Mechanics’ Liens. There are no delinquent
accounts payable or mechanics’ liens in favor of any materialman, laborer, or
any other person or entity in connection with labor or materials furnished to
or performed on any portion of the Premises; and no work has been performed or
is in progress nor have materials been supplied to the Premises or agreements
entered into for work to be performed or materials to be supplied to the
Premises prior to the date hereof, which will be delinquent on or before the
Closing Date.


N.        Lease. Borrower has delivered to Lender a
true, correct and complete copy of the Lease. The Lease is the only lease with
respect to the Premises, and is in full force and effect, and constitutes the
legal, valid and binding obligation of the parties thereto, enforceable against
such parties in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, liquidation, reorganization and
other laws affecting the rights of creditors generally and


 


8

















 


general principles of equity. Borrower has not
assigned, transferred, mortgaged, hypothecated or otherwise encumbered the
Lease or any rights thereunder or any interest therein, and Borrower has not received
any notice that the Lessee has made any assignment, pledge or hypothecation of
all or any part of its rights or interests in the Lease. Borrower has not
received any notice of default from the Lessee which has not been cured or
given any notice of default to the Lessee which has not been cured. No event
has occurred and no condition exists which, with the giving of notice or the
lapse of time or both, would constitute a default by the Lessee or Borrower
under the Lease.


O.        Money Laundering. (1) Borrower has taken
all reasonable measures, in accordance with all applicable Anti-Money
Laundering Laws, with respect to each holder of a direct or indirect interest
in the Borrower Parties, to assure that funds invested by such holders in the
Borrower Parties are derived from legal sources; provided, however, none of the
foregoing shall apply to any Person to the extent that such Person’s interest
is in or through a U.S. Publicly-Traded Entity.


(2)       To
Borrower’s knowledge after making due inquiry, neither any of the Borrower
Parties nor any holder of a direct or indirect interest in the Borrower Parties
(a) is under investigation by any Governmental Authority for, or has been
charged with, or convicted of, any violation of any Anti-Money Laundering Laws,
or drug trafficking, terrorist-related activities or other money laundering
predicated crimes or a violation of the BSA, (b) has been assessed civil
penalties under these or related laws, or (c) has had any of its funds seized
or forfeited in an action under these or related laws; provided, however, none
of the foregoing shall apply to any Person to the extent that such Person’s
interest is in or through a U.S. Publicly-Traded Entity.


(3)       Borrower
has taken reasonable steps, consistent with industry practice for comparable
organizations and in any event as required by law, to ensure that the Borrower
Parties are and shall be in compliance with all (a) Anti-Money Laundering Laws
and (b) OFAC Laws and Regulations.


6.         Covenants. Borrower covenants to Lender from and after the Closing Date and
until all of the Obligations are
satisfied in full, as follows:


A.       Payment of the Note. Borrower shall
punctually pay, or cause to be paid, the principal, interest and all other sums
to become due in respect of the Note and the other Loan Documents in accordance
with the Note and the other Loan Documents. Borrower shall authorize Lender to
establish arrangements whereby all scheduled payments made in respect of the
Obligations are transferred by Automated Clearing House Debit initiated by
Lender directly from an account at a U.S. bank in the name of Borrower to such
account as Lender may designate or as Lender may otherwise designate.


B.        Title. Borrower shall maintain good and
marketable fee simple title to the real property comprising the Premises, and
title to the Personal Property except the leased personal property described on
Schedule 1 attached hereto, and the remainder of the Premises, free and clear
of all liens, encumbrances, charges and other exceptions to title, except the
Permitted Exceptions. Lender shall have valid first liens upon and security
interests in the Premises, including the Personal Property, pursuant to the
Mortgage and the UCC-1 Financing Statements.


C.        Organization and Status of Borrower; Preservation of
Existence. Each of the Borrower Parties (other than individuals), as
applicable, shall be validly existing and in good standing under the laws of
its state of incorporation or formation. Borrower shall be qualified as a
foreign corporation, partnership or limited liability company to do business in
each state where the Premises is located, and each of the Borrower Parties
shall be qualified as a foreign corporation, partnership or limited liability
company in any other jurisdiction where the failure to be qualified would
reasonably be expected to result in a Material Adverse Effect. Borrower shall
preserve its current form of organization and shall not change its legal name,
its state of formation, nor, in one transaction or a series of related
transactions, merge with or into, or consolidate with, any other entity without
providing, in each case, Lender with 30


 


9

















 


days’ prior written notice and obtaining Lender’s
prior written consent (to the extent such consent is required under Section 7
of this Agreement). In addition, Borrower shall require, and shall take
reasonable measures to comply with the requirement, that no individual or
entity owning directly or indirectly any interest in any of the Borrower Parties
is an individual or entity whose property or interests are subject to being
blocked under any of the OFAC Laws and Regulations or is otherwise in violation
of any of the OFAC Laws and Regulations; provided, however, the covenant
contained in this sentence shall not apply to any Person to the extent that
such Person’s interest is in or through a U.S. Publicly-Traded Entity.


D.        Licenses and Permits. All required
licenses and permits, both governmental and private, to use and operate the
Premises as a Permitted Concept shall be maintained in full force and effect.


E.        Compliance With Laws Generally. The use
and occupation of the Premises, and the condition thereof, including, without
limitation, any Restoration, shall comply with all Applicable Regulations now
or hereafter in effect, including, without limitation, the OFAC Laws and
Regulations and Anti-Money Laundering Laws. In addition, the Borrower Parties
shall comply with all Applicable Regulations now or hereafter in effect.
Without limiting the generality of the other provisions of this Section,
Borrower shall comply with the ADA, and all regulations promulgated thereunder,
as it affects the Premises.


F.        Compliance With Environmental Provisions. The
covenants, obligations and agreements of Borrower set forth in Sections 3
through 7 of the Environmental Indemnity Agreement, together with the
corresponding definitions, are incorporated by reference into this Agreement as
if stated in full in this Agreement.


G.        Financial Statements. Within 45 days after
the end of each fiscal quarter and within 120 days after the end of each fiscal
year of Borrower, Borrower shall deliver to Lender (1) complete financial
statements of the Borrower Parties including a balance sheet, profit and loss
statement, statement of cash flows and all other related schedules for the
fiscal period then ended; (2) income statements for the business at the
Premises; and (3) such other financial information as Lender may reasonably
request in order to establish compliance with the financial covenants in the
Loan Documents, including, without limitation, Section 6.J of this Agreement.
All such financial statements shall be prepared in accordance with GAAP from
period to period, and shall be certified to be accurate and complete by
Borrower (or the Treasurer or other appropriate officer of Borrower). In the
event the property and business at the Premises is ordinarily consolidated with
other business for financial statement purposes, such financial statements
shall be prepared on a consolidated basis showing separately the sales, profits
and losses, assets and liabilities pertaining to the Premises with the basis
for allocation of overhead of other charges being clearly set forth. The
financial statements delivered to Lender need not be audited, but Borrower
shall deliver to Lender copies of any audited financial statements of Borrower
which may be prepared, as soon as they are available. Borrower shall also cause
to be delivered to Lender copies of any financial statements required to be
delivered to Borrower by any tenants of the Premises.


H.        Lost Note. Borrower shall, if the Note is
mutilated, destroyed, lost or stolen (a “Lost Note”), promptly deliver to
Lender, upon receipt from Lender of an affidavit and indemnity in a form
reasonably acceptable to Lender and Borrower stipulating that the Note has been
mutilated, destroyed, lost or stolen, in substitution therefor, a new
promissory note containing the same terms and conditions as the Lost Note with
a notation thereon of the unpaid principal and accrued and unpaid interest.
Borrower shall provide fifteen (15) days’ prior notice to Lender before making
any payments to third parties in connection with the Lost Note.


I.         Inspections. Borrower shall, during normal
business hours (or at any time in the event of an emergency), (1) provide
Lender and Lender’s officers, employees, agents, advisors, attorneys,
accountants, architects, and engineers with access to the Premises, all
drawings, plans, and


 


10

















 


specifications for the Premises in possession of any
of the Borrower Parties, all engineering reports relating to the Premises in
the possession of any of the Borrower Parties, the files, correspondence and
documents relating to the Premises, and the financial books and records,
including lists of delinquencies, relating to the ownership, operation, and
maintenance of the Premises (including, without limitation, any of the
foregoing information stored in any computer files), (2) allow such persons to
make such inspections, tests, copies, and verifications as Lender considers
necessary, and (3) if Borrower is in breach of the Corporate Fixed Charge
Coverage Ratio requirement set forth in the following subsection J, pay
expenses reasonably incurred by Lender from time to time in conducting such
inspections, tests, copies and verifications upon demand (such amounts to bear
interest at the Default Rate if not paid upon demand until paid).


J.         Corporate Fixed Charge Coverage Ratio. Borrower
shall maintain a Corporate Fixed Charge Coverage Ratio of at least 1.20:1, as
determined as of Borrower’s fiscal year end. For purposes of this Section, the
term “Corporate Fixed Charge Coverage Ratio” shall mean with respect to the
twelve month period of time immediately preceding the date of determination,
the ratio calculated for such period of time, each as determined in accordance
with GAAP, of (1) the sum of Net Income, Depreciation and Amortization,
Interest Expense, income taxes, and Operating Lease Expense, plus or minus other
non-cash adjustments or non-recurring items (as allowed by Lender), plus or
minus changes in officer or shareholders loans and dividends or distributions
not otherwise expensed on the Borrower’s income statement to (2) the sum of
Operating Lease Expense, principal payments of long term Debt, maturities of
all Capital Leases and Interest Expense (excluding non-cash interest expense
and amortization of non-cash financing expenses).


For purposes of this Section, the following terms
shall be defined as set forth below:


“Capital
Lease” shall mean all leases of any properly, whether real,
personal or mixed, by Borrower or any of the other Borrower Parties, as
applicable, which lease would, in conformity with GAAP, be required to be
accounted for as a capital lease on the balance sheet of Borrower. The term
“Capital Lease” shall not include any operating lease.


“Debt” shall
mean with respect to Borrower and the other Borrower Parties, collectively, and
for the period of determination (a) indebtedness for borrowed money, (b)
obligations evidenced by bonds, indentures, notes or similar instruments, (c)
obligations to pay the deferred purchase price of property or services, (d)
obligations under leases which should be, in accordance with GAAP, recorded as
Capital Leases, and (e) obligations under direct or indirect guarantees in
respect of, and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in clauses (a)
through (d) above.


“Depreciation
and Amortization” shall mean the depreciation and
amortization accruing during any period of determination with respect to
Borrower and the other Borrower Parties, collectively, as determined in
accordance with GAAP.


“Interest
Expense” shall mean for any period of determination, the sum
of all interest accrued or which should be accrued in respect of all Debt of
Borrower and the other Borrower Parties, collectively, as determined in accordance
with GAAP.


“Net
Income” shall mean with respect to the period of
determination, the net income or net loss of Borrower and the other Borrower
Parties, collectively. In determining the amount of Net Income, (a) adjustments
shall be made for nonrecurring gains and losses or non-cash items allocable to
the period of determination, (b) deductions shall be made for, among other
things, Depreciation and Amortization, Interest Expense, Operating Lease
Expense and actual corporate overhead expense allocable to the period of
determination, and (c) no deductions shall be made


 


11

















 


for income taxes or charges equivalent to income taxes
allocable to the period of determination, as determined in accordance with
GAAP.


“Operating
Lease Expense” shall mean the sum of all payments and
expenses incurred by Borrower and the other Borrower Parties, collectively,
under any operating leases during the period of determination as determined in
accordance with GAAP.


K.        Affiliate Transactions. Unless otherwise
approved by Lender, all transactions between Borrower and any of its Affiliates
shall be on terms substantially as advantageous to Borrower as those which
could be obtained by Borrower in a comparable arm’s length transaction with a
non-Affiliate of Borrower.


L.        Compliance Certificates. Within 60 days
after the end of each fiscal year of Borrower, Borrower shall deliver a
compliance certificate to Lender in a form to be provided by Lender in order to
establish that Borrower is in compliance in all material respects with all of
its obligations, duties and covenants under the Loan Documents.


M.       OFAC Laws and Regulations. Borrower shall
promptly notify Lender in writing after Borrower has received notice if any
individual or entity owning directly or indirectly any interest in any of the
Borrower Parties or any director, officer, member, manager or partner of any of
such holders is an individual or entity whose property or interests are subject
to being blocked under any of the OFAC Laws and Regulations or is otherwise in
violation of any of the OFAC Laws and Regulations, or is under investigation by
any governmental entity for, or has been charged with, or convicted of, drug
trafficking, terrorist-related activities or any violation of Anti-Money
Laundering Laws, has been assessed civil penalties under these or related laws,
or has had funds seized or forfeited in an action under these or related laws;
provided, however, the covenant contained in this sentence shall not apply to
any Person to the extent that such Person’s interest is in or through a U.S.
Publicly-Traded Entity.


7.         Sales, Transfers, Assignments and
Pledges. A.
Without limiting the terms and conditions of Section 3.09 of the Mortgage,
Borrower agrees that Borrower shall not, without the prior written consent of
Lender not to be unreasonably withheld, sell, convey, mortgage, grant, bargain,
encumber, pledge, assign, or otherwise transfer the Premises or any part
thereof or permit the Premises or any part thereof to be sold, conveyed,
mortgaged, granted, bargained, encumbered, pledged, assigned, or otherwise
transferred, other than sales from inventory in the ordinary course of business
and the replacement of obsolete Personal Property. A sale, conveyance,
mortgage, grant, bargain, encumbrance, pledge, assignment, or transfer within
the meaning of this Section shall be deemed to include, but not limited to, (a)
an installment sales agreement wherein Borrower agrees to sell the Premises or
any part thereof for a price to be paid in installments; (b) an agreement by
Borrower leasing all or any part of the Premises or a sale, assignment or other
transfer of, or the grant of a security interest in, Borrower’s right, title
and interest in and to any Lease or any Rents (as defined in the Mortgage); (c)
any merger by or with any of the Borrower Parties or any equity owner of any of
the Borrower Parties or any entity directly or indirectly controlling in any
manner such equity owner or any of the Borrower Parties (collectively, “Borrower
Equity Owners”) or any pledge, encumbrance, hypothecation or collateral
assignment of the equity ownership of any of the Borrower Parties or any of the
Borrower Equity Owners; (d) if any of the Borrower Parties or the Borrower
Equity Owners is not a natural person, the voluntary or involuntary sale,
conveyance or transfer of such entity’s equity interests, or the creation or
issuance of new equity interests which in one or a series of transactions
results in more than 49% of the equity interests of such entity being held by
any party or parties who are not, as of the date of this Agreement, equity
owners of any of the Borrower Parties or the Borrower Equity Owners; (e) if any
of the Borrower Parties or the Borrower Equity Owners is a limited or general partnership
or limited liability company, the change, removal or resignation of any general
partner or managing member, as applicable; and (f) if any of the Borrower
Entities or any Borrower Equity Owners is a corporation, limited liability
company governed by a board of managers or trust, the change, removal or
resignation, other than by death or incapacity, in one or a series of
transactions of a majority of the board of directors, board of managers or


 


12

















 


trustees, as applicable. In addition, no interest in
any of the Borrower Parties, or in any individual or person owning directly or
indirectly any interest in any of the Borrower Parties, shall be transferred,
assigned or conveyed to any individual or person whose property or interests
are subject to being blocked under any of the OFAC Laws and Regulations or who
is in violation of any of the OFAC Laws and Regulations, and any such transfer,
assignment or conveyance shall not be effective until the transferee has
provided written certification to Borrower and Lender that (x) the transferee
or any person who owns directly or indirectly any interest in transferee, is
not an individual or entity whose property or interests are subject to being
blocked under any of the OFAC Laws and Regulations or is otherwise in violation
of the OFAC Laws and Regulations, and (y) the transferee has taken reasonable
measures to assure than any individual or entity who owns directly or
indirectly any interest in transferee, is not an individual or entity whose
property or interests are subject to being blocked under any of the OFAC Laws
and Regulations or is otherwise in violation of the OFAC Laws and Regulations;
provided, however, the covenant contained in this sentence shall not apply to
any Person to the extent that such Person’s interest is in or through a U.S.
Publicly-Traded Entity.


Notwithstanding the foregoing, a transfer by devise or
descent or by operation of law upon the death
of a member, partner or stockholder of any of the Borrower Parties or any
general or limited partner or member thereof shall not be deemed to be a sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer within the meaning of this Section.


B. Lender’s consent to any matter contemplated by this
Section shall be subject to the satisfaction of such conditions as Lender shall
determine in its sole but reasonable discretion, including, without limitation,
(1) the execution and delivery of such modifications to the terms of the Loan
Documents as Lender shall request, and (2) the proposed transferee having
agreed to comply with all of the terms and conditions of the Loan Documents
(including any modifications requested by Lender pursuant to clause (1) above).
In addition, any such consent shall be conditioned upon payment by Borrower to
Lender of (a) a fee equal to one percent (1%) of the then outstanding principal
balance of the Note and (b) all reasonable out-of-pocket costs and expenses
incurred by Lender in connection with such consent, including, without
limitation, reasonable attorneys’ fees. Lender shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Obligations immediately due and payable
upon Borrower’s sale, conveyance, mortgage, grant, bargain, encumbrance,
pledge, assignment, or transfer as contemplated by this Section. The provisions
of this Section shall apply to every such sale, conveyance, mortgage, grant,
bargain, encumbrance, pledge, assignment, or transfer regardless of whether
voluntary or not, or whether or not Lender has consented to any previous sale,
conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, or
transfer pursuant to this Section.


8.         Transaction Characterization. A. It is the intent of the parties hereto
that this Agreement and the other Loan Documents are a contract to extend a
financial accommodation (as such term is used in the Code) for the benefit of
Borrower and that the Loan Documents evidence one unitary, unseverable
transaction pertaining to the Premises.


B.        It is
the intent of the parties hereto that the business relationship created by the
Loan Documents is solely that of creditor and debtor and has been entered into
by both parties in reliance upon the economic and legal bargains contained in
the Loan Documents. None of the agreements contained in the Loan Documents is
intended, nor shall the same be deemed or construed, to create a partnership
(either de jure or de facto) between Borrower and Lender, to make them joint
venturers, to make Borrower an agent, legal representative, partner, subsidiary
or employee of Lender, nor to make Lender in any way responsible for the debts,
obligations or losses of Borrower.


9.         Default and Remedies. A. Each of the following shall be deemed
an event of default by Borrower (each, an “Event of Default”);


 


13

















 


(1)       If any representation or warranty of any
of the Borrower Parties set forth in any of the Loan Documents is false in any
material respect when made, or if any of the Borrower Parties renders any
statement or account which is false in any material respect.


(2)       If any
principal, interest or other monetary sum due under the Note, the Mortgage or
any other Loan Document is not paid within ten (1) days after the date when
due; provided, however, notwithstanding the occurrence of such an Event of
Default, Lender shall not be entitled to exercise its rights and remedies set
forth below unless and until Lender shall have given Borrower notice thereof
and a period of ten (10) days from the delivery of such notice shall have
elapsed without such Event of Default being cured.


(3)       If
Borrower fails to observe or perform any of the other covenants, conditions, or
obligations of this Agreement; provided, however, if any such failure does not
involve the payment of any monetary sum, is not willful or intentional, does
not place any rights or interest in collateral of Lender in immediate jeopardy,
and is within the reasonable power of Borrower to promptly cure after receipt
of notice thereof, all as determined by Lender in its reasonable discretion,
then such failure shall not constitute an Event of Default hereunder, unless
otherwise expressly provided herein, unless and until Lender shall have given
Borrower notice thereof and a period of 30 days shall have elapsed, during
which period Borrower may correct or cure such failure, upon failure of which
an Event of Default shall be deemed to have occurred hereunder without further
notice or demand of any kind being required. If such failure cannot reasonably
be cured within such 30-day period, as determined by Lender in its reasonable
discretion, and Borrower is diligently pursuing a cure of such failure, then
Borrower shall have a reasonable period to cure such failure beyond such 30-day
period, which shall not exceed 90 days after receiving notice of the failure
from Lender. If Borrower shall fail to correct or cure such failure within such
90-day period, an Event of Default shall be deemed to have occurred hereunder
without further notice or demand of any kind being required.


(4)       If any
of the Borrower Parties or Friendly Ice Cream Corporation becomes insolvent
within the meaning of the Code, files or notifies Lender that it intends to
file a petition under the Code, initiates a proceeding under any similar law or
statute relating to bankruptcy, insolvency, reorganization, winding up or
adjustment of debts (collectively, an “Action”), becomes the subject of either
a petition under the Code or an Action, or is not generally paying its debts as
the same become due.


(5)       If
there is an “Event of Default” or a breach or default by Borrower, after the
passage of all applicable notice and cure or grace periods, under the Lease,
any of the Other Agreements, or any other Loan Document.


(6)       If a
final, nonappealable judgment is rendered by a court against any of the
Borrower Parties which (a) has a Material Adverse Effect on the operation of
the Premises as a Permitted Concept, or (b) is in an amount greater than
$100,000.00 and not covered by insurance, and, in either case, is not
discharged or provision made for such discharge within 60 days from the date of
entry of such judgment.


B.        Upon
the occurrence and during the continuance of an Event of Default, subject to
the limitations set forth in subsection A, Lender may declare all or any part
of the obligations of Borrower under the Note, this Agreement and any other
Loan Document to be due and payable, and the same shall thereupon become due
and payable without any presentment, demand, protest or notice of any kind
except as otherwise expressly provided herein, and Borrower hereby waives
notice of intent to accelerate the obligations secured by the Mortgage and
notice of acceleration. Thereafter, Lender may exercise, at its option,
concurrently, successively or in any combination, all remedies available at law
or in equity, including without limitation any one or more of the remedies
available under the Note, the Mortgage or any other Loan Document. Neither the
acceptance of this Agreement nor its enforcement shall prejudice or in any
manner affect Lender’s right to realize upon or enforce any other security now
or hereafter held by Lender, it being agreed that Lender shall be entitled to enforce
this Agreement and any other security now or hereafter held by Lender in such order and manner as it may in
its absolute discretion determine.


 


14

















 


No remedy herein conferred upon or reserved to Lender
is intended to be exclusive of any other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. Every power or remedy
given by any of the Loan Documents to Lender, or to which Lender may be
otherwise entitled, may be exercised, concurrently or independently, from time
to time and as often as may be deemed expedient by Lender.


10.       Indemnity; Release. A. Initially capitalized terms in this
Section that are not otherwise defined in this Agreement shall have the
meanings set forth in the Environmental Indemnity Agreement. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold
harmless each of the Indemnified Parties for, from and against any and all
claims, suits, liabilities (including, without limitation, strict liabilities),
actions, proceedings, obligations, debts, damages, losses, costs, expenses,
diminutions in value, fines, penalties, charges, fees, expenses, judgments,
awards, amounts paid in settlement and damages of whatever kind or nature
(including, without limitation, attorneys’ fees, court costs and other costs of
defense) (collectively, “Losses”) (excluding Losses suffered by an Indemnified
Party directly arising out of such Indemnified Party’s gross negligence or
willful misconduct; provided, however, that the term “gross negligence” shall
not include gross negligence imputed as a matter of law to any of the
Indemnified Parties solely by reason of Borrower’s interest in the Premises or
Borrower’s failure to act in respect of matters which are or were the
obligation of Borrower under the Loan Documents), and costs of Remediation
(whether or not performed voluntarily), engineers’ fees, environmental
consultants’ fees, and costs of investigation (including but not limited to
sampling, testing, and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas) imposed upon or
incurred by or asserted against any Indemnified Parties, and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (1) any presence of any Hazardous Materials in, on, above, or under
the Premises; (2) any past, present or Threatened Release in, on, above, under
or from the Premises; (3) any activity by Borrower, any person or entity
affiliated with Borrower or any tenant or other user of the Premises in
connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from the Premises of any Hazardous
Materials at any time located in, under, on or above the Premises; (4) any
activity by Borrower, any person or entity affiliated with Borrower or any
tenant or other user of the Premises in connection with any actual or proposed
Remediation of any Hazardous Materials at any time located in, under, on or
above the Premises, whether or not such Remediation is voluntary or pursuant to
court or administrative order, including but not limited to any removal,
remedial or corrective action; (5) any past, present or threatened
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with the Premises or
operations thereon, including but not limited to any failure by Borrower, any
person or entity affiliated with Borrower or any tenant or other user of the
Premises to comply with any order of any Governmental Authority in connection
with any Environmental Laws; (6) the imposition, recording or filing or the
threatened imposition, recording or filing of any Environmental Lien
encumbering the Premises; (7) any administrative processes or proceedings or
judicial proceedings in any way connected with any matter addressed in this
Agreement; (8) any past, present or threatened injury to, destruction of or
loss of natural resources in any way connected with the Premises, including but
not limited to costs to investigate and assess such injury, destruction or
loss; (9) any acts of Borrower, any person or entity affiliated with Borrower
or any tenant or other user of the Premises in arranging for disposal or
treatment, or arranging with a transporter for transport for disposal or treatment,
of Hazardous Materials owned or possessed by Borrower, any person or entity
affiliated with Borrower or any tenant or other user, at any facility or
incineration vessel owned or operated by another person or entity and
containing such or similar Hazardous Materials; (10) any acts of Borrower, any
person or entity affiliated with Borrower or any tenant or other user of the
Premises, in accepting any Hazardous Materials for transport to disposal or
treatment facilities, incineration vessels or sites selected by Borrower, any
person or entity affiliated with Borrower or any tenant or other user of the
Premises, from which there is a Release, or a Threatened Release of any
Hazardous Materials which causes the incurrence of costs for Remediation; (11)
any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory, including but not limited to
damages assessed for the maintenance of a


 


15

















 


private or public nuisance or for the conducting of an
abnormally dangerous activity on or near the Premises; (12) any disclosures of
information, financial or otherwise, (x) made by Lender or Lender’s employees,
officers, agents and designees to any third party as contemplated by Section
11.R of this Agreement, or (y) obtained from any credit reporting agency with
respect to Borrower, any guarantor of the Loan, any Affiliate of Borrower, any
of the other Borrower Parties or any operator or lessee of the Premises; or
(13) any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to this Agreement.


B.        Borrower
fully and completely releases, waives and covenants not to assert any claims,
liabilities, actions, defenses, challenges, contests or other opposition
against Lender, however characterized, known or unknown, foreseen or
unforeseen, now existing or arising in the future, relating to this Agreement
and any Hazardous Materials, Releases or Remediation on, at or affecting the
Premises.


11.       Miscellaneous
Provisions.


A.       Notices. All notices, consents, approvals
or other instruments required or permitted to be given by either party pursuant
to this Agreement or any of the other Loan Documents shall be in writing and
given by (i) hand delivery, (ii) facsimile, (iii) express overnight delivery
service or (iv) certified or registered mail, return receipt requested, and
shall be deemed to have been delivered upon (a) receipt, if hand delivered, (b)
transmission, if delivered by facsimile, (c) the next Business Day, if
delivered by express overnight delivery service, or (d) the third Business Day
following the day of deposit of such notice with the United States Postal
Service, if sent by certified or registered mail, return receipt requested.
Notices shall be provided to the parties and addresses (or facsimile numbers,
as applicable) specified below. If to Borrower: Friendly’s Realty I, LLC, 1855
Boston Road, Wiibraham, Massachusetts 01095, Attention: General Counsel,
Telephone: (413) 731-4000, Telecopy: (413) 543-0049; and if to Lender: GE
Capital Franchise Finance Corporation, 17207 North Perimeter Drive, Scottsdale,
AZ 85255, Attention: Collateral Management, Telephone: 480-585-4500, Telecopy:
480-585-2225.


B.        Real Estate Commission. Lender and
Borrower represent and warrant to each other that they have dealt with no real
estate or mortgage broker, agent, finder or other intermediary in connection
with the transactions contemplated by this Agreement or the other Loan
Documents. Lender and Borrower shall indemnify and hold each other harmless
from and against any costs, claims or expenses, including attorneys’ fees,
arising out of the breach of their respective representations and warranties contained
within this Section.


C.        Waiver and Amendment; Document Review. (1)
No provisions of this Agreement or the other Loan Documents shall be deemed
waived or amended except by a written instrument unambiguously setting forth
the matter waived or amended and signed by the party against which enforcement
of such waiver or amendment is sought. Waiver of any matter shall not be deemed
a waiver of the same or any other matter on any future occasion.


(2)       In the
event Borrower makes any request upon Lender requiring Lender or Lender’s
attorneys to review or prepare (or cause to be reviewed or prepared) any
documents, plans, specifications or other submissions in connection with or
arising out of this Agreement or any of the other Loan Documents, then Borrower
shall (a) reimburse Lender promptly upon Lender’s demand for all out-of-pocket
costs and expenses incurred by Lender in connection with such review or
preparation, including, without limitation, reasonable attorneys’ fees, and (b)
pay Lender a reasonable processing and review fee.


D.        Captions. Captions are used throughout
this Agreement and the other Loan Documents for convenience of reference only
and shall not be considered in any manner in the construction or interpretation
hereof.


 


16

















 


E.        Lender’s Liability. Notwithstanding
anything to the contrary provided in this Agreement or the other Loan
Documents, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Agreement and the other Loan
Documents by Lender, that (1) there shall be absolutely no personal liability
on the part of any shareholder, director, officer or employee of Lender, with
respect to any of the terms, covenants and conditions of this Agreement or the
other Loan Documents, (2) Borrower waives all claims, demands and causes of
action against Lender’s officers, directors, employees and agents in the event
of any breach by Lender of any of the terms, covenants and conditions of this
Agreement or the other Loan Documents to be performed by Lender and (3)
Borrower shall look solely to the assets of Lender for the satisfaction of each
and every remedy of Borrower in the event of any breach by Lender of any of the
terms, covenants and conditions of this Agreement or the other Loan Documents
to be performed by Lender, such exculpation of liability to be absolute and
without any exception whatsoever.


F.        Severability. The provisions of this
Agreement and the other Loan Documents shall be deemed severable. If any part
of this Agreement or the other Loan Documents shall be held invalid, illegal or
unenforceable, the remainder shall remain in full force and effect, and such
invalid, illegal or unenforceable provision shall be reformed by such court; so
as to give maximum legal effect to the intention of the parties as expressed
therein.


G.        Construction Generally. This Agreement and
the other Loan Documents have been entered into by parties who are experienced
in sophisticated and complex matters similar to the transaction contemplated by
this Agreement and the other Loan Documents and are entered into by both
parties in reliance upon the economic and legal bargains contained therein and
shall be interpreted and construed in a fair and impartial manner without
regard to such factors as the party which prepared the instrument, the relative
bargaining powers of the parties or the domicile of any party. Borrower and
Lender were each represented by legal counsel competent in advising them of
their obligations and liabilities hereunder.


H.        Further Assurances. Borrower will, at its
sole cost and expense, do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged and delivered all such further acts, documents,
conveyances, notes, mortgages, deeds of trust, assignments, security
agreements, financing statements and assurances as Lender shall from time to
time reasonably require or deem advisable to carry into effect the purposes of
this Agreement and the other Loan Documents, to perfect any lien or security
interest granted in any of the Loan Documents and for the better assuring and
confirming of all of Lender’s rights, powers and remedies under the Loan
Documents.


I.         Attorneys’ Fees. In the event of any
judicial or other adversarial proceeding between the parties concerning this
Agreement or the other Loan Documents, the prevailing party shall be entitled
to recover its attorneys’ fees and other costs in addition to any other relief
to which it may be entitled.


J.         Entire Agreement. This Agreement and the
other Loan Documents, together with any other certificates, instruments or
agreements to be delivered in connection therewith, constitute the entire
agreement between the parties with respect to the subject matter hereof, and
there are no other representations, warranties or agreements, written or oral,
between Borrower and Lender with respect to the subject matter of this
Agreement and the other Loan Documents. Notwithstanding anything in this
Agreement and the other Loan Documents to the contrary, with respect to the
Premises, upon the execution and delivery of this Agreement by Borrower and
Lender, any bid proposals or loan commitments with respect to the transactions
contemplated by this Agreement shall be deemed null and void and of no further
force and effect and the terms and conditions of this Agreement shall control
notwithstanding that such terms and conditions may be inconsistent with or vary
from those set forth in such bid proposals or loan commitments.


K.        Forum Selection; Jurisdiction; Venue; Choice of Law. Borrower
acknowledges that this Agreement and the other Loan Documents were
substantially negotiated in the State of Arizona, this


 


17

















 


Agreement and the
other Loan Documents were executed by Lender in the State of Arizona and
delivered by Borrower in the State of Arizona, all payments under the Note will
be delivered in the State of Arizona and there are substantial contacts between
the parties and the transactions contemplated herein and the State of Arizona.
For purposes of any action or proceeding arising out of this Agreement or any
of the other Loan Documents, the parties hereto hereby expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona
and Borrower consents that it may be served with any process or paper by
registered mail or by personal service within or without the State of Arizona
in accordance with applicable law. Furthermore, Borrower waives and agrees not
to assert in any such action, suit or proceeding that it is not personally
subject to the jurisdiction of such courts, that the action, suit or proceeding
is brought in an inconvenient forum or that venue of the action, suit or
proceeding is improper. It is the intent of the parties hereto that all
provisions of this Agreement and the Note shall be governed by and construed
under the laws of the State of Arizona, without giving effect to its principles
of conflicts of law. To the extent that a court of competent jurisdiction finds
Arizona law inapplicable with respect to any provisions of this Agreement or
the Note, then, as to those provisions only, the laws of the state where the
Premises is located shall be deemed to apply. Nothing in this Section shall
limit or restrict the right of Lender to commence any proceeding in the federal
or state courts located in the state in which the Premises is located to the
extent Lender deems such proceeding necessary or advisable to exercise remedies
available under this Agreement or the other Loan Documents.


L.        Counterparts. This Agreement and the other
Loan Documents may be executed in one or more counterparts, each of which shall
be deemed an original.


M.       Assignments by Lender; Binding Effect. Lender
may assign in whole or in part its rights under this Agreement, including,
without limitation, in connection with any Transfer, Participation or
Securitization. Upon any unconditional assignment of Lender’s entire right and
interest hereunder, Lender shall automatically be relieved, from and after the
date of such assignment, of liability for the performance of any obligation of
Lender contained herein. This Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and permitted assigns, including, without limitation, any
United States trustee, any debtor in possession or any trustee appointed from a
private panel.


N.        Survival. Except for the conditions of
Closing set forth in Section 4, which shall be satisfied or waived as of the
Closing Date, all representations, warranties, agreements, obligations and
indemnities of Borrower and Lender set forth in this Agreement and the other
Loan Documents shall survive the Closing.


O.        Waiver of Jury Trial and Punitive, Consequential,
Special and Indirect Damages. BORROWER AND LENDER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING,
CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER
OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN
ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, BORROWER AND LENDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO
SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER AND
ANY OF THE OTHER’S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE OTHER OR
ANY OF THE OTHER’S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY DOCUMENT CONTEMPLATED HEREIN
OR RELATED HERETO. THE WAIVER BY


 


18

















 


BORROWER AND LENDER OF ANY RIGHT THEY MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY
THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.


P.        Transfers, Participations and Securitizations.
(1) A material inducement to Lender’s willingness to complete the transactions
contemplated by the Loan Documents is Borrower’s agreement that Lender may, at
any time, complete a Transfer, Participation or Securitization with respect to
the Note, Mortgage or any of the other Loan Documents or any or all servicing
rights with respect thereto.


(2)       Borrower
agrees to cooperate in good faith with Lender in connection with any such
Transfer, Participation or Securitization of the Note, Mortgage or any of the
other Loan Documents, or any or all servicing rights with respect thereto,
including, without limitation (a) providing such documents, financial and other
data, and other information and materials (the “Disclosures”) which would
typically be required with respect to the Borrower Parties and the Lessee
Parties by a purchaser, transferee, assignee, servicer, participant, investor
or rating agency involved with respect to such Transfer, Participation or
Securitization, as applicable; provided, however, the Borrower Parties, the
Lessee Parties shall not be required to make Disclosures of any confidential
information or any information which has not previously been made public unless
required by applicable federal or state securities laws; and (b) amending the
terms of the transactions evidenced by the Loan Documents to the extent
necessary so as to satisfy the requirements of purchasers, transferees,
assignees, servicers, participants, investors or selected rating agencies
involved in any such Transfer, Participation or Securitization, so long as such
amendments would not have a Material Adverse Effect upon the Borrower Parties,
the Lessee Parties or the transactions contemplated hereunder. Lender shall be
responsible for preparing at its expense any documents evidencing the
amendments referred to in the preceding subitem (b).


(3)       Borrower
consents to Lender providing the Disclosures, as well as any other information
which Lender may now have or hereafter acquire with respect to the Premises or
the financial condition of the Borrower Parties or the Lessee Parties to each
purchaser, transferee, assignee, servicer, participant, investor or rating
agency involved with respect to each Transfer, Participation or Securitization,
as applicable. Lender and Borrower (and their respective Affiliates) shall each
pay their own attorneys’ fees and other out-of-pocket expenses incurred in
connection with the performance of their respective obligations under this
Section.


(4)       Notwithstanding
anything to the contrary contained in this Agreement or the other Loan
Documents: (a) an Event of Default or a breach or default, after the passage of
all applicable notice and cure or grace periods, under any Loan Document or
Other Agreement which relates to a loan or sale/leaseback transaction which has
not been the subject of a Securitization, Participation or Transfer shall not
constitute an Event of Default or a breach or default, as applicable, under any
Loan Document or Other Agreement which relates to a loan which has been the
subject of a Securitization, Participation or Transfer; (b) an Event of Default
or a breach or default, after the passage of all applicable notice and cure or
grace periods, under any Loan Document or Other Agreement which relates to a
loan which is included in any Loan Pool shall not constitute an Event of
Default or a breach or default, as applicable, under any Loan Document or Other
Agreement which relates to a loan which is included in any other Loan Pool; (c)
the Loan Documents and Other Agreement corresponding to the loans in any Loan
Pool shall not secure the obligations of any of the Borrower Parties contained
in any Loan Document or Other Agreement which does not correspond to a loan in
such Loan Pool; and (d) the Loan Documents and Other Agreement which do not
correspond to a loan in any Loan Pool shall not secure the obligations of any
of the Borrower Parties contained in any Loan Document or Other Agreement which
does correspond to a loan in such Loan Pool.


Q.        Estoppel Certificate. At any time, and
from time to time, each party agrees, promptly and in no event later than
fifteen (15) days after a request from the other party, to execute, acknowledge
and deliver to the other party a certificate in the form supplied by the other
party, certifying: (a) to its knowledge, whether there are then any existing
defaults by it or the other party in the performance of their


 


19

















 


respective obligations under this Agreement or any of
the other Loan Documents, and, if there are any such defaults, specifying the
nature and extent thereof; (b) that no notice of default has been given or
received by it under this Agreement or any of the other Loan Documents which
has not been cured, except as to defaults specified in the certificate; (c) the
capacity of the person executing such certificate, and that such person is duly
authorized to execute the same on behalf of it; and (d) any other information
reasonably requested by the other party in connection with this Agreement and
the other Loan Documents.


R.        Borrower
authorizes Lender and its employees, officers, agents, representatives and
designees to:


(1)       distribute
to, or publish for the use by, any third-parties for statistical analysis
purposes the unit-level or corporate level operating results for the Premises,
Borrower, any guarantor of the Loan, any Affiliate of Borrower, any of the
other Borrower Parties or any operator or lessee of the Premises prepared by
Lender from financial statements obtained from Borrower, provided however, that
such results shall not be identified as relating to Borrower or any of the
other Borrower Parties or Lessee Parties; and


(2)       obtain
personal credit reports, business credit reports or asset reports, as
applicable, with respect to Borrower, any guarantor of the Loan, any Affiliate
of Borrower, any of the other Borrower Parties or any operator or lessee of the
Premises.


 


20

















 


IN WITNESS WHEREOF,
Borrower and Lender have entered into this Agreement as of the date first above
written.


 


	
   

  	
   

  	
  LENDER:

  	
   

  
	
  



  	
   

  	
  GE CAPITAL FRANCHISE FINANCE

  
	
   

  	
   

  	
  CORPORATION, a Delaware corporation

  



 


	
   

  	
   

  	
  By

  	
  /s/ Michelle Underwood

  
	
   

  	
   

  	
  Printed Name:

  	
  Michelle Underwood

  
	
   

  	
   

  	
  Its:

  	
  Closing Manager

  
					



 


	
   

  	
   

  	
  BORROWER:

  	
   

  
	
  



  	
   

  	
  FRIENDLY’S REALTY I, LLC,

  
	
   

  	
   

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/
  Paul V. Hoagland

  
	
   

  	
   

  	
   

  	
  Paul V. Hoagland, Vice President and
  Treasurer

  
					



 


21

















 


 


	
  STATE
  OF ARIZONA

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  SS.

  	
   

  
	
  COUNTY
  OF MARICOPA

  	
  )

  	
   

  	
   

  
						



 


The foregoing instrument was acknowledged before me on
December 30, 2005 by Michelle Underwood, Closing Manager of GE Capital Franchise Finance Corporation,
a Delaware corporation, on behalf
of the corporation.


 


	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Nicole R. Nelson

  
	
   

  	
   

  	
  Notary Public

  



 


	
   

  	
   

  	
   

  	
   

  
	
  

  My Commission Expires:

  	
   

  	
   

  	
  OFFICIAL SEAL

  NICOLE R. NELSON

  NOTARY PUBLIC - STATE OF ARIZONA

  MARICOPA COUNTRY

  My Comm. Expires July 31, 2009

  
	
  7-31-09

  	
   

  	
   

  	
   

  	
   

  
					



 


	
  COMMONWEALTH
  OF MASSACHUSETTS

  	
  )

  	
   

  	
   

  
	
   

  	
  )

  	
  SS.

  	
   

  
	
  COUNTY
  OF HAMPDEN

  	
  )

  	
   

  	
   

  
						



 


On this 29th day of December, 2005, before me, the
undersigned notary public, personally appeared Paul V. Hoagland, as Vice
President and Treasurer of Friendly’s Realty I, LLC, a Delaware limited
liability company, and provided to me through satisfactory evidence of
identification, which was personal knowledge to be the person whose name is
signed on the preceding or attached document, and acknowledged to me that he signed voluntarily for its
stated purpose.


 


	
   

  	
   

  	
   

  	
   

  
	
  



  	
   

  	
   

  	
  

  /s/ Robert N. Fratar

  
	
   

  	
   

  	
   

  	
  Notary
  Public Robert N. Fratar

  



 


	
  My Commission Expires:

  	
   

  	
   

  	
   

  
	
  January 29, 2010

  	
   

  	
   

  	
   

  	
   

  
					



 


	
   

  	
   

  	
   

  	
  ROBERT N. FRATAR

  NOTARY PUBLIC

  COMMONWEALTH OF MASSACHUSETTS
My Commission Expires Jan, 29, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  
					



 


22

















 


SCHEDULE 1


 


NONE