Mortgage

FORM OF MORTGAGE


THIS MORTGAGE, containing an Assignment of Rents and Leases, Security Agreement and Fixture Filing ("Mortgage"), is made as of , 1997, by and between SYBRA, INC., a Michigan corporation ("Debtor"), whose address is 8300 Dunwoody Place, Suite 300, Atlanta, Georgia 30350-1296, and FFCA ACQUISITION CORPORATION, a Delaware corporation ("Mortgagee"), whose address is 17207 North Perimeter Drive, Scottsdale, Arizona 85255.


PRELIMINARY STATEMENT:


The capitalized terms used in this Mortgage, if not elsewhere defined herein, have the meanings set forth in Article I. Debtor holds a fee simple interest in the Premises, subject to Permitted Exceptions. Debtor is executing this Mortgage for the purpose of granting the interest of Debtor in and to the Mortgaged Property (as defined in the Granting Clauses below) as security for the payment of the Obligations. The Mortgaged Property shall be and remain subject to the lien of this Mortgage and shall constitute security for the Obligations so long as the Obligations shall remain outstanding.


GRANTING CLAUSES:


Debtor, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, by these presents does hereby create a security interest in, mortgage, grant, bargain, sell, assign, pledge, give, transfer, set over and convey unto Mortgagee and to its successors and assigns WITH POWER OF SALE, for the benefit of Mortgagee, all of Debtor's estate, right, title and interest in, to and under any and all of the following property (the "Mortgaged Property"), subject only to Permitted Exceptions:


Premises, Rents and Derivative Interests


The Premises; all rents, issues, profits, royalties, income and other benefits derived from the Premises (collectively the "Rents"); all estate, right, title and interest of Debtor in and to all leases or subleases covering the Premises or any portion thereof now or hereafter existing or entered into, including, without limitation, all cash or security deposits, advance rentals and deposits or payments of similar nature; all right, title and interest of Debtor in and to all options to purchase or lease the Premises or any portion thereof or interest therein, and any greater estate in the Premises owned or hereafter acquired; all interests, estate or other claims, both in law and in equity, which Debtor now has or may hereafter acquire in the Premises; all easements, rights-of-way and rights used in connection therewith or as a means of access thereto, and all tenements, hereditaments and appurtenances thereof and thereto, and all water rights and shares of stock evidencing the same; all right, title and interest of Debtor, now owned or hereafter acquired,


in and to any land lying within the right-of-way of any street, open or proposed, adjoining the Premises and any and all sidewalks, alleys and strips and gores of land adjacent to or used in connection with the Premises;


Personal Property


All right, title and interest of Debtor in and to all tangible personal property now owned or hereafter acquired by Debtor and now or at any time hereafter located on or at the Premises or used in connection therewith, including, without limitation, all goods, machinery, tools, equipment, lobby and all other indoor and outdoor furniture, copies of books, copies of records, manuals, computer systems (other than license rights and agreements owned by third parties relating to the software programs used in connection with such computer systems), furnishings, inventory, rugs, and maintenance and other supplies (the "Personal Property");


Intangibles


All of Debtor's interest in all existing and future accounts, contract rights, general intangibles, copies of files, copies of books of account, agreements, permits, licenses (other than franchise, license or area development agreements with Licensor) and certificates necessary or desirable in connection with the acquisition, ownership, leasing, construction, operation, servicing or management of the Mortgaged Property, whether now existing or entered into or obtained after the date hereof, and all existing and future telephone numbers and listings, advertising and marketing materials and good will in any way relating to the Mortgaged Property or any portion thereof; and


Claims and Awards


All the estate, interest, right, title, other claim or demand, including claims or demands with respect to the proceeds of insurance in effect with respect thereto, which Debtor now has or may hereafter acquire in the Mortgaged Property, and any and all awards made for the taking by eminent domain, or by any proceeding or purchase in lieu thereof, of the whole or any part of the Mortgaged Property, including, without limitation, any awards resulting from a change of grade of streets and awards for severance damages, and Debtor hereby authorizes, directs and empowers Mortgagee, at its option, on Debtor's behalf, or on behalf of the successors or assigns of Debtor, to adjust, compromise, claim, collect and receive such proceeds and to give proper receipts and acquittances therefor, subject to the terms hereof.


TO HAVE AND TO HOLD the Mortgaged Property hereby granted or mortgaged or intended to be granted or mortgaged, unto Mortgagee, and its successors, heirs and assigns, upon the terms, provisions and conditions set forth herein.


THIS MORTGAGE SHALL SECURE THE FOLLOWING INDEBTEDNESS AND OBLIGATIONS (the "Obligations"):


(i) Payment of indebtedness evidenced by the Note together with all
extensions, renewals, amendments and modifications thereof;


(ii) Payment of all other indebtedness and performance of all other
obligations and covenants of Debtor contained in any Loan Document,
together with any other instrument given to evidence or further secure the
payment and performance of any obligation secured hereby or thereby;


(iii) Payment of all indebtedness and performance of all other
obligations and covenants under any other agreement or instrument,
including, without limitation, promissory notes and guaranties, between,
among or by (1) Debtor (the "Debtor Entities"), and, or for the benefit
of, (2) Mortgagee or any corporation, partnership, joint venture, limited
liability company, association or other form of entity affiliated with
Mortgagee (the "Mortgagee Entities"); provided, however, Obligations shall
not include the payment of the indebtedness and the performance of the
other obligations of Debtor pursuant to the Equipment Loan Agreement; and


(iv) Payment of all other sums, with interest thereon, which may
hereafter be owed by Debtor or its successors or assigns pursuant to the
Loan Documents to Mortgagee or its successors or assigns.


This Mortgage is a "Future Advance Mortgage" under Act No. 348 of Public Acts of Michigan 1990. It is the intention of the parties hereto that the Mortgaged Property shall secure all of the Obligations presently or hereafter owed, and that the priority of the security interest created by this Mortgage for all such Obligations shall be controlled by the time of proper recording of this Mortgage. In addition, this Mortgage shall also secure unpaid balances of advances made with respect to the Mortgaged Property for the payment of taxes, assessments, insurance premiums, costs or any other advances incurred for the protection of the Mortgaged Property, together with interest thereon until paid at the rate provided for in Section 2.15 hereof, all as contemplated in this Mortgage, all of which shall constitute a part of the Obligations. This paragraph shall serve as notice to all persons who may seek or obtain a lien on the Mortgaged Property subsequent to the date of recording of this Mortgage, that until this Mortgage is released, any debt owed Mortgagee by Debtor, including advances made subsequent to the recording of this Mortgage, shall be secured with the priority afforded this Mortgage as recorded.


IT IS HEREBY COVENANTED, DECLARED AND AGREED that the Note and the other Loan Documents are to be executed, delivered and secured and that the Mortgaged Property is to be held and disposed of by Mortgagee, upon and subject to the provisions of this Mortgage.


ARTICLE I


DEFINED TERMS


Unless the context otherwise specifies or requires, the following terms shall have the meanings specified (such definitions to be applicable equally to singular and plural nouns and verbs of any tense):


"Affiliate" means any Person controlling, controlled by or under common control with any other Person. For purposes of this definition, "control" (including "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership or voting securities or otherwise.


"Code" means the United States Bankruptcy Code, 11 U.S.C. ss.ss. 101 et seq., as amended.


"De Minimis Amounts" shall mean quantities of chemicals and products containing Hazardous Materials in quantities customary and necessary for the intended use of the Premises including but not limited to cleaning supplies, insecticides, paints, paint removers, toner for copiers, etc.) provided such use, storage or handling of such DeMinimis Amounts of Hazardous Materials are in compliance with Environmental Laws.


"Environmental Condition" means any condition with respect to soil, surface waters, groundwaters, Premises, stream sediments, surface or subsurface strata, ambient air and any environmental medium comprising or surrounding the Premises, whether or not yet discovered, which could or does result in any damage, loss, cost, expense, claim, demand, order or liability to or against Debtor or FFCA by any third party (including, without limitation, any government entity), including, without limitation, any condition resulting from the operation of Debtor's business and/or the operation of the business of any other property owner or operator in the vicinity of the Premises and/or any activity or operation formerly conducted by any person or entity on or off the Premises.


"Environmental Indemnity Agreement" means that certain Environmental Indemnity Agreement dated as of the date of this Mortgage executed by Debtor for the benefit of Mortgagee with respect to the Premises.


"Environmental Laws" means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, relating to protection of human health or the environment, relating to Hazardous Materials, relating to liability for or costs of Remediation or prevention of Releases or relating to liability for or costs of other actual or threatened danger to human health or the environment. "Environmental Laws" includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar


issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. "Environmental Laws" also includes, but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like: conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the property; requiring notification or disclosure of Releases or other environmental condition of the Mortgaged Property to any governmental authority or other person or entity, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity.


"Equipment Loan Agreement" means that certain Equipment Loan Agreement dated as of the date of this Mortgage between Debtor and Mortgagee.


"Hazardous Materials" means (i) any toxic substance or hazardous waste, substance or related material, or any pollutant or contaminant; (ii) radon gas, asbestos in any form which is or could become friable, urea formaldehyde foam insulation, transformers or other equipment which contains dielectric fluid containing levels of polychlorinated biphenyls in excess of federal, state or local safety guidelines, whichever are more stringent, or any petroleum product; (iii) any other substance, gas, material or chemical which is or may be defined as or included in the definition of "hazardous substances," "toxic substances," "hazardous materials," hazardous wastes" or words of similar import under any Environmental Laws.


"Indemnified Parties" means Mortgagee and any person or entity who is or will have been involved in the origination of the loan evidenced by the Note (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 this 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 in the securities contemplated by Section 5.18, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties), as well as the respective directors, officers, shareholders, partners, members, employees, 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 Mortgaged Property, 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 Mortgagee's assets and business).


"Licensor" means Arby's, Inc., a Delaware corporation, or its successors.


"Loan Agreement" means the Loan Agreement dated as of even date herewith between Debtor and Mortgagee.


"Loan Documents" means this Mortgage, the Note, the Loan Agreement, the Environmental Indemnity Agreement and such other notes, deeds of trust or mortgages and other documents or instruments contemplated thereby, all as amended and supplemented.


"Losses" means 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 and other costs of defense).


"Note" means the promissory note dated as of even date herewith in the amount of $803,019.00 executed by Debtor and payable to Mortgagee which is secured by this Mortgage and any amendments, extensions or modifications thereof.


"Permitted Exceptions" shall have the meaning set forth in the Loan Agreement, subject to the terms and provisions of Section 2.12 hereof.


"Person" or "Persons" means, as the context requires, any individual, corporation, trust, partnership, limited liability company, unincorporated organization, governmental authority or any other form of entity.


"Premises" means the parcel or parcels of real estate legally described on Exhibit A attached hereto, and all buildings, fixtures and other improvements now or hereafter located on the Land (whether or not affixed to the real estate).


"Release" means any presence, release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Materials.


"Remediation" means any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate any Hazardous Material, any actions to prevent, cure or mitigate any Release, any action to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or any evaluation relating to any Hazardous Materials.


"Restoration" means the restoration, replacement or rebuilding of the Premises, or any part thereof, as nearly as possible to its value, condition and character immediately prior to any damage, destruction or Taking (as defined in Section 3.01 hereof).


"State" means the State of Michigan.


ARTICLE II


REPRESENTATIONS, WARRANTIES AND
COVENANTS OF DEBTOR


Debtor hereby represents, warrants, covenants and agrees as follows until this Mortgage has been discharged:


Section 2.01. Payment of the Note. Debtor 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 Loan Documents in accordance with the Note and the Loan Documents.


Section 2.02. Title to the Mortgaged Property. Debtor has good and marketable fee simple title to the Mortgaged Property, free and clear of all liens, encumbrances, charges and other exceptions to title, except Permitted Exceptions. Debtor has and shall have full power and lawful authority to grant the Mortgaged Property to Mortgagee in the manner and form herein done or intended, preserve its title to its interest in the Mortgaged Property, subject only to Permitted Exceptions, and forever warrant and defend the same to Mortgagee against the claims of all persons. This Mortgage constitutes a valid first lien upon and security interest in the Mortgaged Property.


Section 2.03. Organization and Status of Debtor; Enforceability. (a) Debtor has been duly incorporated, is validly existing and in good standing under the laws of its state of incorporation and is qualified as a foreign corporation to do business in any jurisdiction where such qualification is required. Debtor is not a "foreign corporation", "foreign partnership", "foreign trust" or "foreign estate", as those terms are defined in the Internal Revenue Code and the regulations promulgated thereunder. Debtor's United States tax identification number is correctly set forth on the signature page of this Mortgage. The persons who have executed this Mortgage on behalf of Debtor are duly authorized to do so.


(b) This Mortgage constitutes the legal, valid and binding obligation of Debtor, enforceable against Debtor in accordance with its terms.


Section 2.04. Litigation; Absence of Breaches or Defaults. (a) There are no suits, actions, proceedings or investigations pending, or to Debtor's knowledge, threatened against or involving Debtor before any court, arbitrator, or administrative or governmental body which might reasonably result in any material adverse change in the contemplated business, condition, worth or operations of Debtor or the Mortgaged Property.


(b) Debtor is not, and the execution, delivery and performance of this Mortgage and the documents, instruments and agreements provided for herein will not result, in any breach of or default under any other document, instrument or agreement to which Debtor is a party or by which


Debtor, the Mortgaged Property or any of Debtor's property is subject or bound.


Section 2.05. Licensor Provisions; Licenses and Permits. (a) Debtor has entered into a franchise or license agreement with Licensor for conduct of the business at the Mortgaged Property. Such franchise or license agreement is valid, binding and in full force and effect, permits Debtor to operate a Licensor's restaurant on the Mortgaged Property and has a term which will not expire prior to the scheduled maturity date of the Note.


(b) Debtor has obtained all required licenses and permits, both governmental and private, to use and operate the Mortgaged Property in the intended manner.


Section 2.06. Financial Condition; Information Provided to Mortgagee. The financial statements, all financial data and all other documents and information heretofore delivered to Mortgagee by or with respect to Debtor and/or the Mortgaged Property in connection with this Mortgage and/or relating to Debtor and/or the Mortgaged Property are true, correct and complete in all material respects, and there have been no amendments to such financial statements, financial data and other documents and information since the date such financial statements, financial data, documents and other information were prepared or delivered to Mortgagee, and no material adverse change has occurred to any such financial statements, financial data, documents and other information not disclosed in writing to Mortgagee.


Section 2.07. Recording. Debtor shall, upon the execution and delivery hereof and thereafter from time to time, take such actions as Mortgagee may reasonably request to cause this Mortgage, each supplement and amendment to such instrument and financing statements with respect thereto and each instrument of further assurance (collectively, the "Recordable Documents") to be filed, registered and recorded as may be required by law to publish notice and maintain the first security interest hereof upon the Mortgaged Property and to publish notice of and protect the validity of the Recordable Documents. Debtor shall, from time to time, perform or cause to be performed any other act and shall execute or cause to be executed any and all further instruments (including financing statements, continuation statements and similar statements with respect to any of said documents) requested by Mortgagee for carrying out the intention of, or facilitating the performance of, this Mortgage. If Debtor shall fail to comply with this Section, Mortgagee shall be and is hereby irrevocably appointed the agent and attorney-in-fact of Debtor to comply therewith (including the execution, delivery and filing of such financing statements and other instruments), which appointment is coupled with an interest, but this sentence shall not prevent any default in the observance of this Section from constituting an Event of Default. To the extent permitted by law, Debtor shall pay or cause to be paid recording taxes and fees incident thereto and all expenses, taxes and other governmental charges incident to or in connection with the preparation, execution, delivery or acknowledgment of the Recordable Documents, any instruments of further assurance and the Note.


Section 2.08. Use; Maintenance and Repair. (a) Except as otherwise may be permitted by the terms of Subsection 2.16.C below, Debtor shall use the Mortgaged Property solely for the operation of a restaurant in accordance with a license agreement with Licensor and for no other


purpose. Except as set forth below, Debtor shall at all times while this Mortgage is in effect occupy the Mortgaged Property and diligently operate its business on the Mortgaged Property. Debtor may cease diligent operation of business for a period not to exceed 90 days and may do so only once within any five-year period while this Mortgage is in effect. If Debtor does discontinue operation pursuant to this Section, Debtor shall (i) give written notice to Mortgagee 60 days prior to the day Debtor ceases operation, (ii) provide adequate protection and maintenance of the Mortgaged Property during any period of vacancy and (iii) pay all costs necessary to restore the Mortgaged Property to their condition on the day operation of the business ceased at such time as the Mortgaged Property is reopened for Debtor's business operations or other substituted use. Notwithstanding anything herein to the contrary, Debtor shall pay monthly the principal and interest due under the Note during any period in which Debtor discontinues operation.


Debtor shall not, by itself or through any lease or other type of transfer, convert the Premises to an alternative use while this Mortgage is in effect without Mortgagee's consent, which consent shall not be unreasonably withheld or delayed. Mortgagee may consider any or all of the following in determining whether to grant its consent, without being deemed to be unreasonable: (i) whether the converted use will be consistent with the highest and best use of the Mortgaged Property, and (ii) whether the converted use will increase Mortgagee's risks or decrease the value of the Mortgaged Property.


(b) Debtor shall (i) maintain the Mortgaged Property in good condition and repair, subject to reasonable and ordinary wear and tear, free from actual or constructive waste, (ii) operate, remodel, update and modernize the Mortgaged Property in accordance with those standards adopted from time to time by Licensor on a system-wide basis for Licensor restaurants, with such remodeling and modernizing being undertaken in accordance with Licensor's system-wide timing schedules for such activities, and (iii) pay all operating costs of the Premises in the ordinary course of business.


Section 2.09. Compliance With Laws. (a) Debtor's use and occupation of the Mortgaged Property, and the condition thereof, including, without limitation, any Restoration, shall, at Debtor's sole cost and expense, comply in all material respects with all applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders and approvals of any governmental agencies, departments, commissions, bureaus, boards or instrumentalities of the United States, the State and all political subdivisions thereof, including, without limitation, all health, building, fire, safety and other codes, ordinances and requirements and all applicable standards of the National Board of Fire Underwriters ("Applicable Regulations"), where the failure to so comply might reasonably be expected to result in a material adverse effect on the Mortgaged Property or the business, operations, assets or financial condition of Debtor.


(b) Without limiting the generality of the other provisions of this Section, Debtor agrees that it shall be responsible for complying in all material respects with the Americans with Disabilities Act of 1990, as such act may be amended from time to time, and all regulations promulgated thereunder (collectively, the "ADA"), as it affects the Mortgaged Property, including, without limitation, making required "readily achievable" changes to remove any architectural or


communications barriers, and providing auxiliary aides and services within the Mortgaged Property, where the failure to so comply might reasonably be expected to result in a material adverse effect on the Mortgaged Property or the business, operations, assets or financial condition of Debtor. Debtor further agrees that any and all alterations made to the Mortgaged Property while this Mortgage is in effect will comply in all material respects with the requirements of the ADA, where the failure to so comply might reasonably be expected to result in a material adverse effect on the Mortgaged Property or the business, operations, assets or financial condition of Debtor. All plans for alterations which must be submitted to Mortgagee under the provisions of Section 2.10 must include a statement from a licensed Architect or Engineer certifying that they have reviewed the plans, and that the plans comply in all material respects with all applicable provisions of the ADA. Any subsequent approval or consent to the plans by the Mortgagee shall not be deemed to be a representation on Mortgagee's part th ...