MASTER LEASE
THIS MASTER LEASE (this "Lease") is made as of September 6, 2000 (the
"Effective Date"), by and between SHONEY'S PROPERTIES GROUP 1, LLC, a
Delaware limited liability company ("Lessor"), whose address is 1727 Elm Hill
Pike, Nashville, Tennessee 37219, and SHONEY'S, INC., a Tennessee corporation
("Lessee"), whose address is 1727 Elm Hill Pike, Nashville, Tennessee 37219.
W I T N E S S E T H:
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. CERTAIN DEFINED TERMS. The following terms shall have the
following meanings for all purposes of this Lease:
"ADA" has the meaning set forth in Section 16.C.
"ADDITIONAL RENTAL" has the meaning set forth in Section 5.B.
"AFFILIATE" means any Person which 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" 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 of voting securities or otherwise.
"APPLICABLE REGULATIONS" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over Lessee and/or any of the
Properties, 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 and the ADA, in each case, as
amended, and any judicial or administrative interpretation thereof, including
any judicial order, consent, decree or judgment applicable to Lessee.
"APPLICABLE RENT REDUCTION PERCENTAGE" means, with respect to any
Property, a fraction, the numerator of which shall be the original principal
balance of the Note corresponding to such Property, and the denominator of
which shall be the sum of all of the original principal balances of the Notes
corresponding to all of the Properties then subject to this Lease, including
such Property.
"AMENDED AND RESTATED MASTER LEASE" has the meaning set forth in
Section 24.
"BASE ANNUAL RENTAL" means ONE MILLION ONE HUNDRED NINETY-TWO
THOUSAND SEVEN HUNDRED NINETY-NINE AND 88/100 DOLLARS ($1,192,799.88).
"BASE MONTHLY RENTAL" means an amount equal to 1/12 of the applicable
Base Annual Rental.
"BUSINESS DAY" means any day on which national banks are not required
or authorized to remain closed.
"CASUALTY" has the meaning set forth in Section 21 of this Lease.
"CODE" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101
et seq., as amended.
"DE MINIMIS AMOUNTS" means, (i) with respect to any presence, Release
or Threatened Release of Hazardous Materials, those quantities of Hazardous
Materials in any form or combination of forms, which do not constitute a
violation requiring regulation or remediation under any Environmental Laws in
the State in which the affected Property is located, and (ii) with respect to
the use or storage of Hazardous Materials in or upon the Properties, those
quantities of Hazardous Materials customarily employed in the ordinary course
of, or associated with the operation of a Permitted Facility and used or
stored in compliance with Environmental Laws.
"DEFAULT RATE" means 18% per annum or the highest rate of interest
permitted by law, whichever is less.
"DISCLOSURES" has the meaning set forth in Section 8.B.
"EFFECTIVE DATE" has the meaning set forth in the Preamble.
"ENVIRONMENTAL CONDITION" means any condition with respect to soil,
surface waters, groundwaters, land, stream sediments, surface or subsurface
strata, ambient air and any environmental medium comprising or surrounding
any of the Properties, whether or not yet discovered, which could or does
result in any damage, loss, cost, expense, claim, demand, order or liability
to or against Lessor, Lessee or Lender by any third party (including, without
limitation, any Governmental Authority), including, without limitation, any
condition resulting from the operation of Lessor's or Lessee's business at
the Properties and/or the operation of the business of any other property
owner or operator in the vicinity of any of the Properties and/or any
activity or operation formerly conducted by any Person on or off the
Properties.
"ENVIRONMENTAL INSURER" means American International Specialty Lines
Insurance Company or such other environmental insurance company as Lessor may
select.
"ENVIRONMENTAL LAWS" means any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law, relating to Hazardous Materials and/or the protection of human
health or the environment, by reason of a Release or a Threatened Release of
Hazardous Materials or relating to liability for or costs of Remediation or
prevention of Releases. "Environmental Laws" includes, but is not limited
to, the following statutes, as amended, any successor thereto, and any
regulations, rulings, orders or decrees promulgated pursuant thereto, and any
state or local statutes, ordinances, rules, regulations and the like
addressing similar issues:
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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, as well as common law: 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
any of the Properties to any Governmental Authority or other Person, whether
or not in connection with transfer of title to or interest in property;
imposing conditions or requirements relating to Hazardous Materials in
connection with permits or other authorization for lawful activity; relating
to nuisance, trespass or other causes of action related to Hazardous
Materials; and relating to wrongful death, personal injury or property or
other damage in connection with the physical condition or use of any of the
Properties by reason of the presence of Hazardous Materials in, on, under or
above any of the Properties.
"ENVIRONMENTAL LIENS" has the meaning set forth in Section 16.D(ix).
"ENVIRONMENTAL POLICIES" means the environmental insurance policy or
policies, as applicable, issued by Environmental Insurer to Lessor with
respect to the Properties, if any, which Environmental Policies shall be in
form and substance satisfactory to Lessor in its sole discretion.
"EVENT OF DEFAULT" has the meaning set forth in Section 23.
"GAAP" means generally accepted accounting principles in the United
States, at the time at which the information affected by these principles was
prepared, consistently applied.
"GOVERNMENTAL AUTHORITY" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or quasi-
governmental authority of the United States, the States or any political
subdivision thereof.
"HAZARDOUS MATERIALS" means (i) any toxic substance or hazardous
waste, substance, solid waste 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 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," "regulated substances" or words of similar
import under any Environmental Laws; and (iv) any other chemical, material,
gas or substance the exposure to or release of which is or may be prohibited,
limited or regulated by any Governmental Authority that asserts or may assert
jurisdiction over any of the Properties or the operations or activity at any
of the Properties,
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or any chemical, material, gas or substance that does or may pose a hazard to
the health and/or safety of the occupants of any of the Properties or the
owners and/or occupants of property adjacent to or surrounding any of the
Properties.
"INDEMNIFIED PARTIES" means Lessor, Environmental Insurer and Lender
and their directors, officers, shareholders, trustees, beneficial owners,
partners, members, and any directors, officers, shareholders, trustees,
beneficial owners, partners, members of any beneficial owners, partners or
members of Lessor, Environmental Insurer or Lender, and all employees,
agents, servants, representatives, contractors, subcontractors, Affiliates,
subsidiaries, participants, successors and assigns of any of the foregoing,
including, without limitation, any successors by merger, consolidation or
acquisition of all or a substantial portion of the assets and business of
Lessor, Environmental Insurer or Lender, as applicable.
"LEASE TERM" shall have the meaning described in Section 4.
"LENDER" means FFCA FUNDING CORPORATION, a Delaware corporation, its
successors and assigns, any successor lender in connection with any loan
secured by Lessor's interest in any of the Properties, and any servicer of
any loan secured by Lessor's interest in any of the Properties, including,
without limitation, Franchise Finance Corporation of America, a Delaware
corporation.
"LESSEE ENTITIES" means, collectively, Lessee and all Affiliates of
Lessee.
"LESSEE LOAN AGREEMENT" means that certain loan agreement dated as
of the date of this Lease between FFCA Funding Corporation, a Delaware
corporation, and Lessee, as the same may be amended from time to time.
"LESSEE LOAN DOCUMENTS" means, collectively, the Lessee Loan
Agreement and all other agreements and instruments between or by Lessee and,
or for the benefit of, FFCA Funding Corporation, a Delaware corporation, and
executed pursuant to the Lessee Loan Agreement, as the same may be amended
from time to time.
"LESSOR ENTITIES" means, collectively, Lessor, Related Lessors and
all Affiliates of Lessor or any Related Lessor.
"LICENSE AGREEMENT" means the license agreement dated as of the date
of this Lease between Lessor and Lessee, pursuant to which Lessee will grant
Lessor a license to use the trade name and trademarks of Lessee and to
operate the Properties as Shoney's restaurants upon the terms and conditions
set forth therein, as the same may be amended from time to time.
"LOAN AGREEMENT" means the Loan Agreement dated as of the date of
this Lease between Lessor and Lender, as such Loan Agreement may be amended
from time to time and any and all replacements or substitutions thereof.
"LOAN DOCUMENTS" means, collectively, the Loan Agreement, the Notes,
the Mortgages and all other documents, instruments and agreements executed in
connection therewith, all as amended and supplemented and any and all
replacements or substitutions thereof.
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"LOAN POOL" means:
(i) in the context of a Securitization, any pool or
group of Loans that are a part of such Securitization;
(ii) in the context of a Transfer, all Loans which are
sold, transferred or assigned to the same transferee; and
(iii)in the context of a Participation, all Loans as to
which participating interests are granted to the same participant.
"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, reasonable attorneys' fees, court costs and other costs of
defense).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) any
Premises, including, without limitation, the operation of any of the Premises
as a Permitted Facility and/or the value of any of the Premises or (ii)
Lessee's ability to perform its obligations under this Lease or any of the
other Loan Documents.
"MEMORANDUM" means the memorandum of master lease dated as of the
date of this Lease between Lessor and Lessee with respect to the Properties.
A duplicate original Memorandum will be executed and recorded in the
applicable real property records for each Property. Each Memorandum will
contain exhibits with the addresses and store identification numbers for all
of the Properties and the legal description for the applicable Property.
"MORTGAGES" means, collectively, the mortgages, deeds of trust or
deeds to secure debt, assignments of rents and leases, security agreements
and fixture filings dated as of the date of this Lease executed by Lessor for
the benefit of Lender with respect to the Properties, as such instruments may
be amended, restated and/or supplemented from time to time and any and all
replacements or substitutions thereof.
"NOTES" means, collectively, the promissory notes dated as of the
date of this Lease executed by Lessor and payable to Lender evidencing a loan
with respect to the Properties, as such Notes may be amended, restated and/or
substituted from time to time.
"OTHER AGREEMENTS" means, collectively, all agreements and
instruments now or hereafter entered into between, among or by (1) any of the
Lessee Entities, and, or for the benefit of, (2) any of the Lessor Entities,
including without limitation, the Related Leases; provided, however, the term
Other Agreements shall not include this Lease.
"PARTICIPATION" means the granting of any participations in any
document evidencing loan obligations or any or all servicing rights with
respect thereto.
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"PERMITTED FACILITY" means a Shoney's restaurant; provided, however,
up to two (2) of all of the Properties may be operated as another nationally
or regionally recognized restaurant concept.
"PERSON" means any individual, corporation, partnership, limited
liability company, trust, unincorporated organization, Governmental Authority
or any other form of entity.
"PERSONALTY" means all machinery, appliances, furniture, equipment,
trade fixtures and other personal property now or hereafter located on the
Premises; provided, however, the term "Personalty" shall not include the
HVAC, walk-in coolers, walk-in freezers, supply fans, exhaust fans, air
ducts, hoods, vents, built-in sinks, built-in countertops, plumbing and
electrical fixtures, sign poles and lighting poles, all of which items are
intended to be fixtures as such term is used within the definition of
"Properties".
"PROPERTIES" means, collectively, the parcel or parcels of real
estate described by address, Lessor Number and Unit Number in Exhibit A
attached hereto and legally described in Exhibit A-1 attached hereto, all
rights, privileges and appurtenances associated therewith, and all buildings,
fixtures and other improvements now or hereafter located on such real estate
(whether or not affixed to such real estate).
"PROPERTY" means any one of the Properties.
"QUESTIONNAIRES" means the environmental questionnaires completed by
Lessee with respect to the properties and submitted to Environmental Insurer
in connection with the issuance of the Environmental Policies.
"RELATED LEASES" means, collectively, those certain master leases
dated as of the date of this Lease between any of the Related Lessors, as
lessor, and Lessee, as lessee.
"RELATED LESSORS" means, collectively, Shoney's Properties Group 2,
LLC, a Delaware limited liability company, Shoney's Properties Group 3, LLC,
a Delaware limited liability company, Shoney's Properties Group 4, LLC, a
Delaware limited liability company, Shoney's Properties Group 5, LLC, a
Delaware limited liability company and Shoney's Properties Group 6, LLC, a
Delaware limited liability company.
"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 other
than in De Minimis Amounts.
"REMEDIATION" means any response, remedial, removal, or corrective
action, any activity to cleanup, detoxify, decontaminate, contain or
otherwise remediate any Hazardous Materials, 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.
"SECTION 16.F ASSESSMENTS" has the meaning set forth in Section 16.F.
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"SECURITIZATION" means one or more sales, dispositions, transfers or
assignments by Lender or any Affiliate of Lender to a special purpose
corporation, trust or other entity identified by Lender or any Affiliate of
Lender of notes evidencing obligations to repay secured or unsecured loans
owned by Lender or any Affiliate of Lender (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
Affiliate of Lender), 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, including, without limitation, laws relating to
Lender's status as a real estate investment trust.
"SHONEY'S LOAN AGREEMENT" means that certain loan agreement dated as
of the date of this Agreement between FFCA Funding Corporation, a Delaware
corporation, and Lessee, as the same may be amended from time to time.
"SHONEY'S LOAN DOCUMENTS" means, collectively, the Shoney's Loan
Agreement, the Shoney's Notes and all other agreements and instruments
between or by Lessee and, or for the benefit of, FFCA Funding Corporation, a
Delaware corporation, and executed pursuant to the Shoney's Loan Agreement,
as the same may be amended from time to time.
"SHONEY'S NOTES" means, collectively, the promissory notes dated as
of the date of this Agreement executed by Lessee and payable to FFCA Funding
Corporation, a Delaware corporation, pursuant to the Shoney's Loan Agreement
and any amendments, extensions or modifications thereof.
"STATE" means a state in which any Property is located and "States"
means all such states.
"TAKING" has the meaning set forth in Section 21 of this Lease.
"THREATENED RELEASE" means a substantial likelihood of a Release
which requires action to prevent or mitigate damage to the soil, surface
waters, groundwaters, land, stream sediments, surface or subsurface strata,
ambient air or any other environmental medium comprising or surrounding any
of the Properties which may result from such Release.
"TITLE COMPANY" means Lawyers Title Insurance Corporation, or such
other nationally recognized title insurance company reasonably acceptable to
Lessor.
"TRANSFER" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
2. DEMISE OF PROPERTIES. In consideration of the rentals and
other sums to be paid by Lessee and of the other terms, covenants and
conditions on Lessee's part to be kept and performed, Lessor hereby leases to
Lessee, and Lessee hereby takes and hires, the Properties. The Properties
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are leased to Lessee "AS IS" and "WHERE IS" without representation or
warranty by Lessor and subject to the rights of parties in possession, to the
existing state of title, any state of facts which an accurate survey or
physical inspection might reveal, and all Applicable Regulations now or
hereafter in effect. Lessee has examined each of the Properties and title to
each of the Properties and has found all of the same satisfactory for all of
Lessee's purposes.
3. CHARACTERIZATION OF LEASE. A. Lessor and Lessee intend
that:
(i) this Lease constitutes a single master lease of all, but
not less than all, of the Properties and that Lessor and Lessee have
executed and delivered this Lease with the understanding that this
Lease constitutes a unitary, unseverable instrument pertaining to
all, but not less than all, of the Properties, and that neither this
Lease nor the duties, obligations or rights of Lessee may be
allocated or otherwise divided among the Properties by Lessee;
(ii) this Lease is a "true lease" and not a financing lease,
capital lease, mortgage, equitable mortgage, deed of trust, trust
agreement, security agreement or other financing or trust
arrangement, and the economic realities of this Lease are those of
a true lease; and
(iii) the business relationship created by this Lease and
any related documents is solely that of a long-term commercial lease
between landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained herein.
B. Lessor and Lessee acknowledge and agree that the Lease Term,
including any term extensions provided for in this Lease, is less than the
remaining economic life of each of the Properties.
C. Each of Lessee and Lessor waives any claim or defense based
upon the characterization of this Lease as anything other than a true lease
and irrevocably waives any claim or defense which asserts that this Lease is
anything other than a true lease. Each of Lessee and Lessor covenants and
agrees that it will not assert that this Lease is anything but a true lease.
Each of Lessee and Lessor further stipulates and agrees not to challenge the
validity, enforceability or characterization of the lease of the Properties
as a true lease and further stipulates and agrees that nothing contained in
this Lease creates or is intended to create a joint venture, partnership
(either de jure or de facto), equitable mortgage, trust, financing device or
arrangement, security interest or the like. Each of Lessee and Lessor shall
support the intent of the parties that the lease of the Properties pursuant
to this Lease is a true lease and does not create a joint venture,
partnership (either de jure or de facto), equitable mortgage, trust,
financing device or arrangement, security interest or the like, if, and to
the extent that, any challenge occurs.
D. Each of Lessee and Lessor waives any claim or defense based
upon the characterization of this Lease as anything other than a master lease
of all of the Properties and irrevocably waives any claim or defense which
asserts that this Lease is anything other than a master lease. Each of
Lessee and Lessor covenants and agrees that it will not assert that this
Lease is anything but a unitary, unseverable instrument pertaining to the
lease of all, but not less than all, of the Properties. Each of Lessee and
Lessor further stipulates and agrees not to challenge the
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validity, enforceability or characterization of the lease of the Properties
as a unitary, unseverable instrument pertaining to the lease of all, but not
less than all, of the Properties. Each of Lessee and Lessor shall support
the intent of the parties that this Lease is a unitary, unseverable
instrument pertaining to the lease of all, but not less than all, of the
Properties, if, and to the extent that, any challenge occurs.
E. Lessee represents and warrants to Lessor that (i) the Base
Annual Rental is the fair market value for the use of the Properties and was
agreed to by Lessor and Lessee on that basis, and (ii) the execution,
delivery and performance by Lessee of this Lease does not constitute a
transfer of all or any part of the Properties (except for the leasehold
estate in the Properties created and established by this Lease).
F. The expressions of intent, the waivers, the representations
and warranties, the covenants, the agreements and the stipulations set forth
in this Section 3 are a material inducement to Lessor entering into this
Lease.
4. LEASE TERM. The Lease Term for all of the Properties shall
commence as of the Effective Date and shall expire on April 1, 2021, unless
terminated sooner as provided in this Lease. The time period during which
this Lease shall actually be in effect is referred to herein as the "Lease
Term."
5. RENTAL AND OTHER PAYMENTS. A. If the Effective Date is a
date other than the first day of the month, Lessee shall pay Lessor on the
Effective Date the Base Monthly Rental prorated on the basis of the ratio
that the number of days from the Effective Date through the last day in the
month containing the Effective Date bears to the number of days in such
month. Thereafter, on or before the first day of each succeeding calendar
month, Lessee shall pay Lessor in advance the Base Monthly Rental.
B. All sums of money required to be paid by Lessee under this
Lease which are not specifically referred to as rent ("Additional Rental")
shall be considered rent although not specifically designated as such.
Lessor shall have the same remedies for nonpayment of Additional Rental as
those provided herein for the nonpayment of Base Annual Rental.
6. REPRESENTATIONS AND WARRANTIES OF LESSOR. The
representations and warranties of Lessor contained in this Section 6 are
being made to induce Lessee to enter into this Lease and Lessee has relied
and will continue to rely upon such representations and warranties. Lessor
represents and warrants to Lessee as of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSOR. (i)
Lessor has been duly organized, is validly existing and in good
standing under the laws of the State of Delaware and is qualified to
do business in any jurisdiction where any of the Properties are
located. All necessary limited liability company action has been
taken to authorize the execution, delivery and performance by Lessor
of this Lease, the License Agreement and of the other documents,
instruments and agreements provided for herein.
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(ii) The Person who has executed this Lease on behalf of
Lessor is duly authorized so to do.
B. ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligations of Lessor, enforceable against Lessor in accordance
with its terms, subject to general equitable principles and to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws from
time to time in effect affecting the enforcement of creditors' rights
generally.
7. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and
warranties of Lessee contained in this Section 7 are being made to induce
Lessor to enter into this Lease and Lessor has relied, and will continue to
rely, upon such representations and warranties. Lessee represents and
warrants to Lessor as of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSEE. (i)
Lessee has been duly organized or formed, is validly existing and in
good standing under the laws of the State of Tennessee and is
qualified to do business in any jurisdictions where any of the
Properties are located. All necessary corporate action has been taken
to authorize the execution, delivery and performance by Lessee of
this Lease, the License Agreement and of the other documents,
instruments and agreements provided for herein. Lessee is not a
"foreign corporation", "foreign partnership", "foreign trust",
"foreign limited liability company" or "foreign estate", as those
terms are defined in the Internal Revenue Code and the regulations
promulgated thereunder. Lessee's United States tax identification
number is correctly set forth on the signature page of this Lease.
(ii) The Person who has executed this Lease and the
License Agreement on behalf of Lessee is duly authorized to do so.
B. ENFORCEABILITY. This Lease and the License
Agreement constitute the legal, valid and binding obligation of
Lessee, enforceable against Lessee in accordance with their
respective terms, subject to general equitable principles and to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws from time to time in effect affecting the enforcement
of creditors' rights generally.
C. LITIGATION. There are no suits, actions,
proceedings or investigations pending, or, to the best of Lessee's
knowledge, threatened against or involving Lessee or any of the
Properties before any arbitrator or Governmental Authority which
could reasonably be expected to result in any Material Adverse
Effect.
D. ABSENCE OF BREACHES OR DEFAULTS. No default on the
part of Lessee exists under any document, instrument or agreement to
which Lessee is a party or by which Lessee or any of the Properties
is subject or bound that could reasonably be expected to result in
any Material Adverse Effect. The authorization, execution, delivery
and performance of this Lease, the License Agreement and the
documents, instruments and agreements provided for herein will not
result in any breach of or default under any document, instrument or
agreement to which Lessee is a party or by which Lessee or any of
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the Properties is subject or bound that could reasonably be expected
to result in any Material Adverse Effect. The authorization,
execution, delivery and performance of this Lease, the License
Agreement and the documents, instruments and agreements provided for
herein will not violate any applicable law, statute, regulation,
rule, ordinance, or code which could reasonably be expected to result
in any Material Adverse Effect.
E. LIABILITIES OF LESSOR. Lessee is not liable for any
indebtedness for money borrowed by Lessor and has not guaranteed any
of the debts or obligations of Lessor.
F. LICENSES AND PERMITS. Lessee has obtained all
required licenses and permits, both governmental and private, to use
and operate each of the Properties as a Permitted Facility, except
for any such licenses and permits the failure of which to obtain
could reasonably be expected to result in any Material Adverse
Effect.
G. CONDITION OF PROPERTIES. The Properties, including
the Personalty, are of good workmanship and materials, fully equipped
and operational, in good condition and repair, and, to the best of
Lessee's knowledge, free from structural defects.
H. UTILITIES. The Properties are served by public
utilities deemed adequate by Lessee to permit full utilization of the
Properties as Permitted Facilities.
I. DEVELOPMENT. No condemnation or eminent domain
proceedings affecting the Properties have been commenced or, to the
best of Lessee's knowledge, are contemplated. The Properties where
located have not been declared blighted by any Governmental
Authority. To the best of Lessee's knowledge, the real property
bordering any of the Properties are not designated by any
Governmental Authority as wetlands.
J. INFORMATION AND FINANCIAL STATEMENTS. Lessee has
delivered to Lessor copies of financial statements, as follows:
(1) Lessee's Form 10-Q for the quarters ended
February 20, 2000 and May 14, 2000 as filed with the United
States Securities and Exchange Commission ("SEC");
(2) Lessee's Form 10-K for the years ended
October 26, 1997, October 25, 1998 and October 31, 1999, as
filed with the SEC;
(3) Lessee's unaudited consolidated profit and
loss statement and balance sheet for the 28 week period
ended May 14, 2000; and
(4) Lessee's unaudited profit and loss
statements for each of the Premises for (i) the 52 week
period ended October 25, 1998 and the 53 week period ended
October 31, 1999; (ii) the 20 week periods ended March 14,
1999 and March 19, 2000; and (iii) the 28 week periods ended
May 9, 1999, and May 14, 2000 (collectively, the "Financial
Statements").
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The Financial Statements are true, correct and complete in
all material respects as of their respective dates, and there have
been no amendments to the Financial Statements since the date the
Financial Statements were prepared or delivered to Lessor or Lender,
and no material adverse change has occurred to any of the Financial
Statements not disclosed in writing to Lessor and Lender. Lessee
understands that Lessor and Lender are relying upon the Financial
Statements and Lessee represents that such reliance is reasonable.
All of the Financial Statements specified in paragraphs (1) and (2),
above, were prepared in accordance with GAAP and all of the Financial
Statements accurately reflect the financial condition of Lessee and
each of the Properties, as applicable, as of their respective dates.
8. COVENANTS. Lessee covenants to Lessor for so long as this
Lease is in effect as follows:
A. NONCONSOLIDATION COVENANTS. (i) The annual
financial statements of Lessee, including consolidated financial
statements, if any, shall contain notes stating that (a) all of
Lessor's assets are owned by Lessor and (b) Lessor is a separate
entity with its own separate creditors which will be entitled to be
satisfied out of Lessor's assets.
(ii) Lessee will not assume liability for any
indebtedness for money borrowed by Lessor and does not, and will not,
guarantee any of the debts or obligations of Lessor. Lessee will not
hold itself out as being liable for any obligations or indebtedness
of Lessor.
(iii)Lessee shall not, and shall use its best efforts to
cause its Affiliates not to, hold Lessor out to the public or to any
individual creditors as being a unified entity with assets and
liabilities in common with Lessee except that Lessor may be included
in Lessee's or its Affiliates' filings or reports under the
Securities Act of 1933, as amended, and the Securities Exchange Act
of 1934, as amended and in other filings required by law, and its and
their consolidated financial statements, as appropriate, provided
such statements adequately disclose the ownership by Lessor of the
Properties and that the Properties are available first to satisfy any
creditors of Lessor.
(iv) Lessee shall conduct its business so as not to
mislead others as to the separate identity of Lessor, and
particularly will avoid the appearance of conducting business on
behalf of Lessor. Without limiting the generality of the foregoing,
no oral and written communications of Lessee, including, without
limitation, letters, invoices, purchase orders, contracts, statements
and loan applications, will be made in the name of Lessor which to
the extent that to do otherwise would materially bear upon the
maintenance of Lessor's separate identity.
(v) Lessee will not act in Lessor's name except to the
extent the Lessee may serve as a member of the Lessor but only in
that capacity.
(vi) Where necessary and appropriate, Lessee shall
disclose the independent business status of Lessor to creditors of
Lessee, if any.
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(vii) The resolutions, agreements and other instruments of
Lessee, if any, underlying the transactions described in this Lease
will be maintained by Lessee.
(viii) All transactions between Lessee and Lessor will be
no less fair to each party than they could obtain on an arm's-length
basis.
(ix) The books, records and accounts of Lessee shall at
all times be maintained in a manner permitting the assets and
liabilities of Lessor to be easily separated and readily ascertained
from those of Lessee.
(x) Lessee will not direct, or otherwise control, the
ongoing business decisions of Lessor.
(xi) Lessee will not file or cause to be filed a
voluntary or involuntary petition in bankruptcy on behalf of or
against Lessor, nor seek substantive consolidation of the assets and
liabilities of Lessor and Lessee in any bankruptcy or insolvency
proceeding during the Lease Term and for a period of 91 days after
the Lease Term.
B. TRANSFER, PARTICIPATION AND/OR SECURITIZATION
COVENANTS. (i) Lessee agrees to cooperate in good faith with Lessor
and Lender in connection with any Transfer, Participation and/or
Securitization of any of the Notes, Mortgages and/or any of the Loan
Documents, or any or all servicing rights with respect thereto,
including, without limitation, (X) providing such documents,
financial and other data, and other information and materials (the
"Disclosures") which would typically be required with respect to
Lessee by a purchaser, transferee, assignee, servicer, participant,
investor or rating agency involved with respect to such Transfer,
Participation and/or Securitization, as applicable; provided,
however, Lessee 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 (Y) amending the terms of this Lease 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 change any
of the economic terms or provisions of this Lease or have a material
adverse effect upon Lessee or the transactions contemplated by this
Lease.
(ii) Lessee consents to Lessor and Lender providing the
Disclosures, as well as any other information which Lessor and Lender
may now have or hereafter acquire with respect to the Properties or
the financial condition of Lessee to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency involved
with respect to such Transfer, Participation and/or Securitization,
as applicable. Lessee shall pay its own attorney fees and other out-
of-pocket expenses incurred in connection with the performance of its
obligations under this Section 8.B; provided, however, Lessee shall
not be responsible for the preparation of any amendments contemplated
by clause (Y) of subsection (i) immediately above.
13
C. COMPLIANCE CERTIFICATE. Within 60 days after the
end of each fiscal year of Lessee, Lessee shall deliver to Lessor
such compliance certificates as Lessor may reasonably require in
order to establish that Lessee is in compliance in all material
respects with all of the obligations, duties and covenants imposed
on Lessee pursuant to this Lease.
9. RENTALS TO BE NET TO LESSOR. The Base Annual Rental payable
hereunder shall be net to Lessor, so that this Lease shall yield to Lessor
the rentals specified during the Lease Term, and that all costs, expenses and
obligations of every kind and nature whatsoever relating to the Properties
shall be performed and paid by Lessee.
10. TAXES AND ASSESSMENTS. Lessee shall pay, prior to the
earlier of delinquency or the accrual of interest on the unpaid balance, all
taxes and assessments of every type or nature assessed against, imposed upon
or arising with respect to Lessor, any of the Properties, this Lease, the
rental or other payments due under this Lease or Lessee during the Lease Term
which affect in any manner the net return realized by Lessor under this
Lease, including, without limitation, the following:
A. All taxes and assessments upon any of the Properties
or any part thereof and upon any Personalty, whether belonging to
Lessor or Lessee, or any tax or charge levied in lieu of such taxes
and assessments;
B. All taxes, charges, license fees and or similar fees
imposed by reason of the use of any of the Properties by Lessee; and
C. All excise, transaction, privilege, license, sales,
use and other taxes upon the rental or other payments due under this
Lease, the leasehold estate of either party or the activities of
either party pursuant to this Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay all taxes which are imposed on the rental or
other payments due under this Lease, in no event will Lessee be required to
pay any net income taxes (i.e., taxes which are determined taking into
account deductions for depreciation, interest, taxes and ordinary and
necessary business expenses) or franchise taxes (unless imposed in lieu of
other taxes that would otherwise be the obligation of Lessee under this
Lease, including, without limitation, any "gross receipts tax" or any similar
tax based upon gross income or receipts of Lessor which does not take into
account deductions from depreciation, interest, taxes and/or ordinary or
necessary business expenses) of Lessor, any transfer taxes of Lessor, or any
tax imposed with respect to the sale, exchange or other disposition by
Lessor, in whole or in part, of any of the Properties or Lessor's interest in
this Lease (other than transfer or recordation taxes imposed in connection
with the transfer of any of the Properties to Lessee or the termination of
this Lease pursuant to the provisions of this Lease).
All taxing authorities shall be instructed to send all tax and
assessment invoices to Lessee (or Lessee's agent) and, upon request, Lessee
shall promptly provide (or cause its agent to provide) Lessor and Lender with
copies of all tax and assessment invoices received by Lessee. Upon request,
Lessee shall also provide Lessor and Lender with evidence that such invoices
were paid in a timely fashion. Lessee may, at its own expense, contest or
cause to be contested (in the
14
case of any item involving more than $25,000.00, after prior written notice
to Lessor), by appropriate legal proceedings conducted in good faith and with
due diligence, the amount or validity or application, in whole or in part, of
any item specified in this Section 10 or lien therefor, provided, however,
(i) such proceeding shall suspend the collection thereof from the applicable
Properties or any interest therein, (ii) neither such Properties nor any
interest therein would be in any danger of being sold, forfeited or lost by
reason of such proceedings, (iii) no Event of Default has occurred and is
continuing, and (iv) Lessee shall have deposited with Lessor adequate
reserves for the payment of the taxes, together with all interest and
penalties thereon, unless paid in full under protest, or Lessee shall have
furnished the security as may be required in the proceeding or as may be
reasonably required by Lessor to ensure payment of any contested taxes.
11. UTILITIES. Lessee shall contract, in its own name, for and
pay when due all charges for the connection and use of water, gas,
electricity, telephone, garbage collection, sewer use and other utility
services supplied to the Properties during the Lease Term. Under no
circumstances shall Lessor be responsible for any interruption of any utility
service.
12. INSURANCE. Throughout the Lease Term, Lessee shall maintain
with respect to each of the Properties, at its sole expense, the following
types and amounts of insurance (which may be included under a blanket
insurance policy if all the other terms hereof are satisfied):
A. Insurance against loss, damage or destruction by a
Casualty, including theft, vandalism and malicious mischief, flood
(for each of the Properties which is in a location designated by the
Federal Emergency Management Administration as a Special Flood Hazard
Area), earthquake (for each of the Properties which is in an area
subject to destructive earthquakes within recorded history), boiler
explosion (for each of the Properties with a boiler), plate glass
breakage, sprinkler damage (for each of the Properties which has a
sprinkler system), all matters covered by a standard extended
coverage endorsement, all matters covered by a special coverage
endorsement commonly known as an "all-risk" endorsement and such
other risks as Lessor may reasonably require, insuring each of the
Properties for not less than 100% of their full insurable replacement
cost.
B. Commercial general liability and property damage
insurance, including a products liability clause, covering Lessor and
Lessee against bodily injury liability, property damage liability and
automobile bodily injury and property damage liability, including
without limitation any liability arising out of the ownership,
maintenance, repair, condition or operation of the Properties or
adjoining ways, streets or sidewalks and, if applicable, insurance
covering Lessor and Lessee against liability arising from the sale
of liquor, beer or wine on the Properties. Such insurance policy or
policies shall contain a broad form contractual liability endorsement
under which the insurer agrees to insure Lessee's obligations under
Section 19 to the extent insurable, and a "severability of interest"
clause or endorsement which precludes the insurer from denying the
claim of Lessee or Lessor because of the negligence or other acts of
the other, shall be in amounts of not less than $1,000,000.00 per
injury and occurrence with respect to any insured liability, whether
for personal injury or property damage, or such higher limits as
Lessor may reasonably require from time to time provided such higher
limits shall not have a material affect on the cost of such
insurance, and shall be of form and substance satisfactory to Lessor.
15
C. Business income insurance or rental interruption
insurance, as requested by Lessor, equal to 100% of the Base Annual
Rental for a period of not less than 12 months.
D. State Worker's compensation insurance in the
statutorily mandated limits, employer's liability insurance with
limits not less than $500,000 or such greater amount as Lessor may
from time to time require and such other insurance as may be
necessary to comply with applicable laws.
E. Such other insurance as may from time to time be
reasonably required by Lessor or Lender in order to protect their
respective interests with respect to the Properties.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the
insurer as to claims against Lessor, Lender and their
respective employees and agents;
(ii) Provide that any "no other insurance"
clause in the insurance policy shall exclude any policies of
insurance maintained by Lessor or Lender and that the
insurance policy shall not be brought into contribution with
insurance maintained by Lessor or Lender;
(iii) Contain a standard without contribution
mortgage clause endorsement in favor of Lender and any other
party designated by Lessor with an interest in the
Properties;
(iv) Provide that the policy of insurance shall
not be terminated, cancelled or substantially modified
without at least thirty (30) days' prior written notice to
Lessor, Lender and to any other party covered by any
standard mortgage clause endorsement;
(v) Provide that the insurer shall not have the
option to restore the applicable Properties if Lessor or
Lessee elects to terminate this Lease in accordance with the
terms hereof;
(vi) Be issued by insurance companies licensed
to do business in the States and which are rated A:VI or
better by Best's Insurance Guide or are otherwise approved
by Lessor; and
(vii) Provide that the insurer shall not deny a
claim nor shall the insurance be cancelled, invalidated or
suspended by (1) any action, inaction, conduct or negligence
of Lessor, Lender or any other party covered by any standard
mortgage clause endorsement, Lessee, anyone acting for
Lessee or any subtenant or other occupant of any of the
Properties, (2) occupancy or use of any of the Properties
for purposes more hazardous than permitted by such policies,
(3) any foreclosure or other proceedings relating to any of
the Properties or change in title to or ownership of any of
the Properties, or (4) any breach or violation by
16
Lessee or any other Person of any warranties, declarations
or conditions contained in such policies or the applications
for such policies.
It is expressly understood and agreed that the foregoing minimum
limits of insurance coverage shall not limit the liability of Lessee for its
acts or omissions as provided in this Lease. All insurance policies (with
the exception of worker's compensation insurance to the extent not available
under statutory law), shall designate Lessor and Lender as additional named
insureds as their interests may appear and shall be payable as set forth in
Section 21 hereof. All such policies shall be written as primary policies,
with deductibles not to exceed 10% of the amount of the aggregate coverage of
all such policies. Any other policies, including any policy now or hereafter
carried by Lessor or Lender, shall serve as excess coverage. Lessee shall
procure policies for all insurance for periods of not less than one year and
shall provide to Lessor and Lender certificates of insurance or, upon the
request of Lessor or Lender, duplicate originals of insurance policies
evidencing that insurance satisfying the requirements of this Lease is in
effect at all times. In the event of any transfer by Lessor of Lessor's
interest in any of the Properties or any financing or refinancing of Lessor's
interest in any of the Properties, Lessee shall, upon not less than ten (10)
days' prior written notice, deliver to Lessor or any Lender providing such
financing or refinancing, as the case may be, certificates of all insurance
required to be maintained by Lessee hereunder naming such transferee or such
Lender, as the case may be, as an additional named insured to the extent
required herein effective as of the date of such transfer, financing or
refinancing.
13. TAX AND INSURANCE IMPOUND. Upon the occurrence of an Event
of Default resulting from the failure of Lessee to perform any monetary
obligation due under the Lease, including, without limitation, the failure to
pay Base Monthly Rental, Additional Rental and/or taxes, assessments and/or
insurance premiums as contemplated by this Lease, Lessor may require Lessee
to pay to Lessor sums which will provide an impound account (which shall not
be deemed a trust fund) for paying up to the next one year of taxes,
assessments and/or insurance premiums for each of the Properties; provided,
however, that if the Event of Default resulted from the failure to pay taxes,
assessments and/or insurance premiums (the "Charges") on any Property, then
Lessor may require such impound account for such Property only; provided,
further, that in the event of a second occurrence of an Event of Default due
to the failure to pay the Charges on such Property or on any other Property,
then Lessor may require an impound account with respect to the Charges on all
of the Properties as set forth herein. Upon such requirement, Lessor will
estimate the amounts needed for such purposes and will notify Lessee to pay
the same to Lessor in equal monthly installments, as nearly as practicable,
in addition to all other sums due under this Lease. Should additional funds
be required at any time, Lessee shall pay the same to Lessor on demand.
Lessee shall advise Lessor of all taxes and insurance bills which are due and
shall cooperate fully with Lessor in assuring that the same are paid timely.
Lessor may deposit all impounded funds in accounts insured by any federal or
state agency and may commingle such funds with other funds and accounts of
Lessor. Interest or other gains from such funds, if any, shall be the sole
property of Lessor. In the event of any default by Lessee, Lessor may apply
all impounded funds against any sums due from Lessee to Lessor. Lessor shall
give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.
17
14. PAYMENT OF RENTAL AND OTHER SUMS. All rental and other sums
which Lessee is required to pay hereunder shall be the unconditional
obligation of Lessee and shall be payable in full when due without any
setoff, abatement, deferment, deduction or counterclaim whatsoever. Upon
execution of this Lease, Lessee shall establish arrangements whereby payments
of the Base Monthly Rental and impound payments, if any, are transferred by
Automated Clearing House Debit directly from Lessee's bank account to such
account as Lessor may designate; provided, however, upon notice from Lender
to Lessee and Lessor delivered in the manner set forth in Section 27, Lessee
shall deliver all payments of Base Monthly Rental as specified in such notice
from Lender. Any delinquent payment (that is, any payment not made within
five calendar days after the date when due) shall, in addition to any other
remedy of Lessor, incur a late charge of 5% (which late charge is intended to
compensate Lessor for the cost of handling and processing such delinquent
payment and should not be considered interest or a penalty) and bear interest
at the Default Rate, such interest to be computed from and including the date
such payment was due through and including the date of the payment; provided,
however, in no event shall Lessee be obligated to pay interest or any other
charges in amounts greater than the maximum legal limits permitted by
applicable law.
15. USE. Except as set forth below, each of the Properties shall
be used solely for the operation of a Permitted Facility in accordance with
the standards of operations then in effect on a system-wide basis, and for no
other purpose. Lessee shall occupy the Properties promptly following the
Effective Date and, except as set forth below and except during periods when
any of the Properties is untenantable by reason of a Casualty or a Taking
(provided, however, during all such periods while any of the Properties is
untenantable, Lessee shall strictly comply with the terms and conditions of
Section 21 of this Lease), Lessee shall at all times during the Lease Term
occupy each of the Properties and shall diligently conduct its business on
each of the Properties as a Permitted Facility. Lessee may cease diligent
operation of business at any of the Properties for a period not to exceed 120
days and may do so only once with respect to each Property within any three-
year period during the Lease Term. If Lessee does discontinue operation as
permitted by this Section 15, Lessee shall (i) give written notice to Lessor
within 10 Business Days after Lessee elects to cease operation, (ii) provide
adequate protection and maintenance of any such Properties during any period
of vacancy, (iii) comply with all Applicable Regulations and otherwise comply
with the terms and conditions of this Lease other than the continuous use
covenant set forth in this Section, and (iv) pay all costs necessary to
restore such Properties to their condition on the day operation of the
business ceased at such time as such Properties are reopened for Lessee's
business operations or other substituted use approved by Lessor as
contemplated below. Notwithstanding anything herein to the contrary, Lessee
shall pay the Base Monthly Rental on the first day of each month during any
period in which Lessee discontinues operation.
Lessee shall not, by itself or through any assignment, sublease or
other type of transfer, convert any of the Properties to a use other than a
Permitted Facility during the Lease Term without Lessor's consent, which
consent shall not be unreasonably withheld, delayed or conditioned. Lessor
may consider any or all of the following in determining whether to grant its
consent, without being deemed to be unreasonable: (i) whether the rental paid
to Lessor would be equal to or greater than the anticipated rental assuming
continued existing use, (ii) whether the proposed rental to be
18
paid to Lessor is reasonable considering the converted use of the Properties
and the customary rental prevailing in the community for such use, (iii)
whether the converted use will be consistent with the highest and best use of
the Properties, and (iv) whether the converted use will increase Lessor's
risks or decrease the value of the Properties.
16. COMPLIANCE WITH LAWS, RESTRICTIONS, COVENANTS AND
ENCUMBRANCES. A. Lessee's use and occupation of each of the Properties, and
the condition thereof, shall, at Lessee's sole cost and expense, comply fully
with all Applicable Regulations and all restrictions, covenants and
encumbrances of record with respect to each of the Properties, except for
such non-compliance as would not reasonably be expected to result in any
Material Adverse Effect. In addition to the other requirements of this
Section, Lessee shall, at all times throughout the Lease Term, comply with
all Applicable Regulations, including, without limitation, in connection with
any maintenance, repairs and replacements of the Properties undertaken by
Lessee as required by Section 17 of this Lease.
B. Lessee will not permit any act or condition to exist on or
about any of the Properties which will increase any insurance rate thereon,
except when such acts are required in the normal course of its business and
Lessee shall pay for such increase.
C. Without limiting the generality of the other provisions of
this Section, Lessee agrees that it shall be responsible for complying in all
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 Properties, except to the extent
that its failure to so comply could not reasonably be expected to result in
any Material Adverse Effect. Lessee agrees that it will defend, indemnify
and hold harmless the Indemnified Parties from and against any and all Losses
caused by, incurred or resulting from Lessee's failure to comply with its
obligations under this Section.
D. Except as set forth in the Questionnaires, Lessee represents
and warrants to Lessor:
(i) None of the Properties, nor Lessee with respect to
the Properties, are in violation of, or subject to, any pending or,
to the best of Lessee's knowledge, threatened investigation or
inquiry by any Governmental Authority or to any Remediation
obligations under any Environmental Laws, and this representation and
warranty would continue to be true and correct following disclosure
to the applicable Governmental Authorities of all relevant facts,
conditions and circumstances, if any, pertaining to the Properties.
(ii) All permits, licenses or similar authorizations to
construct, occupy, operate or use any buildings, improvements,
fixtures and equipment forming a part of any of the Properties by
reason of any Environmental Laws have been obtained except to the
extent that its failure to comply could not reasonably be expected
to result in any Material Adverse Effect.
(iii) No Hazardous Materials have been used, handled,
manufactured, generated, produced, stored, treated, processed,
transferred, disposed of or, to the best of Lessee's
19
knowledge, otherwise Released in, on, under, from or about any of the
Properties, other than in De Minimis Amounts.
(iv) The Properties do not contain Hazardous Materials,
other than in De Minimis Amounts, or, to the best of Lessee's
knowledge, underground storage tanks.
(v) To the best of Lessee's knowledge, there is no
threat of any Release migrating to any of the Properties.
(vi) There is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in
connection with any of the Properties that could reasonably be
expected to result in any Material Adverse Effect.
(vii) Lessee has not received any written notice from any
Person or entity (including, without limitation, a Governmental
Authority) relating to Hazardous Materials or Remediation thereof and
relating to any of the Properties, of possible liability of any
Person pursuant to any Environmental Law and relating to any of the
Properties, other Environmental Condition in connection with any of
the Properties, or any actual or potential administrative or judicial
proceedings in connection with any of the foregoing.
(viii) Lessee has truthfully and fully provided to Lessor,
in writing in the Questionnaires, any and all information relating
to an Environmental Condition in, on, under or from the Properties
that is known to Lessee and that is contained in Lessee's files and
records including, without limitation, any reports relating to
Hazardous Materials in, on, under or from any of the Properties.
(ix) All uses and operations on or of the Properties,
whether by Lessee or, to the best of Lessee's knowledge, any other
Person, have been in compliance with all Environmental Laws and
permits issued pursuant thereto; there have been no Releases in, on,
under or from any of the Properties, except in De Minimis Amounts;
there are no Hazardous Materials in, on, or under any of the
Properties, except in De Minimis Amounts; and the Properties have
been kept free and clear of all liens and other encumbrances imposed
pursuant to any Environmental Law (the "Environmental Liens").
Lessee has not allowed any tenant or other user of any of the
Properties to do any act that materially increased the dangers to
human health or the environment, posed an unreasonable risk of harm
to any Person (whether on or off the Properties), impaired the value
of any of the Properties, is contrary to any requirement of any
insurer, constituted a public or private nuisance, constituted waste,
or violated any covenant, condition, agreement or easement applicable
to any of the Properties which could reasonably be expected to result
in any Material Adverse Effect.
E. Lessee covenants to Lessor and Environmental Insurer during
the Lease Term that: (i) the Properties shall not be in violation of or
subject to any investigation or inquiry by any Governmental Authority or to
any remedial obligations under any Environmental Laws. If any such
investigation or inquiry is initiated, Lessee shall promptly notify Lessor;
(ii) all uses and operations on or of each of the Properties, whether by
Lessee or any other Person, shall be in
20
compliance with all Environmental Laws and permits issued pursuant thereto;
(iii) there shall be no Releases in, on, under or from any of the Properties,
except in De Minimis Amounts; (iv) there shall be no Hazardous Materials in,
on, or under any of the Properties, except in De Minimis Amounts; (v) Lessee
shall keep each of the Properties free and clear of all Environmental Liens,
whether due to any act or omission of Lessee or any other Person; (vi) Lessee
shall, at its sole cost and expense, fully and expeditiously cooperate in all
activities pursuant to subsection F below, including but not limited to
providing all relevant information and making knowledgeable persons available
for interviews; (vii) Lessee shall, at its sole cost and expense, perform any
environmental site assessment or other investigation of environmental
conditions in connection with any of the Properties as may be reasonably
requested by Lessor (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), and share with Lessor and
Environmental Insurer the reports and other results thereof, and Lessor,
Environmental Insurer and the other Indemnified Parties shall be entitled to
rely on such reports and other results thereof; (viii) Lessee shall, at its
sole cost and expense, comply with all reasonable written requests of Lessor
to (1) reasonably effectuate Remediation of any condition (including but not
limited to a Release) in, on, under or from any of the Properties; (2) comply
with any Environmental Law; (3) comply with any directive from any
Governmental Authority; and (4) take any other reasonable action necessary or
appropriate for protection of human health or the environment; (ix) Lessee
shall not do or allow any tenant or other user of any of the Properties to do
any act that materially increases the dangers to human health or the
environment, poses an unreasonable risk of harm to any Person (whether on or
off any of the Properties), impairs or may impair the value of any of the
Properties, is contrary to any requirement of any insurer, constitutes a
public or private nuisance, constitutes waste, or violates any covenant,
condition, agreement or easement applicable to any of the Properties which
could reasonably be expected to result in any Material Adverse Effect; and
(x) Lessee shall immediately notify Lessor in writing of (A) any presence of
Releases or Threatened Releases in, on, under, from or migrating towards any
of the Properties; (B) any non-compliance with any Environmental Laws related
in any way to any of the Properties; (C) any actual or potential
Environmental Lien; (D) any required or proposed Remediation of environmental
conditions relating to any of the Properties; and (E) any written or oral
notice or other communication of which Lessee becomes aware from any source
whatsoever (including but not limited to a Governmental Authority) relating
in any way to Hazardous Materials or Remediation thereof, possible liability
of any Person pursuant to any Environmental Law, other environmental
conditions in connection with any of the Properties, or any actual or
potential administrative or judicial proceedings in connection with anything
referred to in this Section.
F. Lessor, Lender, Environmental Insurer and any other Person
designated by Lessor, including but not limited to any receiver, any
representative of a Governmental Authority, and any environmental consultant,
shall have the right, but not the obligation, to enter upon the Properties at
all reasonable times (including, without limitation, in connection with any
Securitization, Participation or Transfer or in connection with a proposed
sale or conveyance of any of the Properties or a proposed financing or
refinancing secured by any of the Properties or in connection with the
exercise of any remedies set forth in this Lease, the Mortgages or the other
Loan Documents, as applicable) to assess any and all aspects of the
environmental condition of the Properties and its use, including but not
limited to conducting any environmental assessment
21
or audit (the scope of which shall be determined in the sole and absolute
discretion of the party conducting the assessment) and taking samples of
soil, groundwater or other water, air, or building materials, and conducting
other invasive testing, such assessments and investigations shall be defined
as "Section 16.F Assessments." Lessee shall cooperate with and provide
access to Lessor, Lender, Environmental Insurer and any other Person
designated by Lessor. Any Section 16.F Assessments shall be at Lessee's sole
cost and expense and Lessor shall defend, indemnify, and hold Lessee and its
employees, agents, or representatives harmless from any and all Losses
incurred solely and directly as a result of such Section 16.F Assessments.
G. Lessee 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 Losses (excluding Losses suffered by an
Indemnified Party solely and directly arising out of Section 16.F Assessments
and/or 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 the Lessor's interest in any of the Properties or
Lessor's failure to act in respect of matters which are or were the
obligation of Lessee under this Lease) 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: (i) any
presence of any Hazardous Materials in, on, above, or under any of the
Properties; (ii) any past or present Release or Threatened Release in, on,
above, under or from any of the Properties except as set forth in the
Questionnaires, other than in De Minimis Amounts; (iii) any activity by
Lessee, any Person affiliated with Lessee or any other tenant or other user
of any of the Properties 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 any of the Properties of any Hazardous Materials at any time
located in, under, on or above any of the Properties; (iv) any activity by
Lessee, any Person affiliated with Lessee or any other tenant or other user
of any of the Properties in connection with any actual or proposed
Remediation of any Hazardous Materials at any time located in, under, on or
above any of the Properties, 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; (v) any past, present or threatened
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with any of the Properties
or operations thereon, including but not limited to any failure by Lessee,
any Person affiliated with Lessee or any other tenant or other user of any of
the Properties to comply with any order of any Governmental Authority in
connection with any Environmental Laws; (vi) the imposition, recording or
filing or the threatened imposition, recording or filing of any Environmental
Lien encumbering any of the Properties; (vii) any administrative processes or
proceedings or judicial proceedings in any way connected with any matter
addressed in this Section; (viii) any past, present or threatened injury to,
destruction of or loss of natural resources in any way connected with any of
the Properties, including but not limited to costs to investigate and assess
such injury, destruction or loss; (ix) any acts of Lessee, any Person
affiliated with Lessee or any other tenant or user of any of the Properties
in arranging for disposal
22
or treatment, or arranging with a transporter for transport for disposal or
treatment, of Hazardous Materials owned or possessed by Lessee, any Person
affiliated with Lessee or any other tenant or user of any of the Properties,
at any facility or incineration vessel owned or operated by another Person
and containing such or similar Hazardous Materials; (x) any acts of Lessee,
any Person affiliated with Lessee or any other tenant or user of any of the
Properties, in accepting any Hazardous Materials for transport to disposal or
treatment facilities, incineration vessels or sites selected by Lessee, any
Person affiliated with Lessee or any other tenant or user of any of the
Properties, from which there is a Release, or a Threatened Release of any
Hazardous Materials which causes the incurrence of costs for Remediation;
(xi) 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 private or public nuisance or for
the conducting of an abnormally dangerous activity on or near any of the
Properties; and (xii) any misrepresentation or inaccuracy in any
representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to this Section.
H. The obligations of Lessee and the rights and remedies of
Lessor under the foregoing Section 16.D through 16.G shall survive the
termination, expiration and/or release of this Lease.
17. CONDITION OF PROPERTIES; MAINTENANCE. Lessee, at its own
expense, will maintain all parts of each of the Properties in good repair and
sound condition, except for ordinary wear and tear and damage from any
Casualty or any Taking, and will take all action and will make all structural
and non-structural, foreseen and unforeseen and ordinary and extraordinary
changes and repairs which may be required to keep all parts of each of the
Properties in good repair and sound condition. Lessee waives any right to
(i) require Lessor to maintain, repair or rebuild all or any part of any of
the Properties or (ii) make repairs at the expense of Lessor, pursuant to any
Applicable Regulations at any time in effect.
18. WASTE; ALTERATIONS AND IMPROVEMENTS. Lessee shall not commit
actual or constructive waste upon any of the Properties. Lessee shall not
alter the exterior, structural, plumbing or electrical elements of any of the
Properties in any manner without the consent of Lessor, which consent shall
not be unreasonably withheld or conditioned; provided, however, Lessee may
undertake nonstructural alterations to any of the Properties costing less
than $200,000.00 without Lessor's consent. If Lessor's consent is required
hereunder and Lessor consents to the making of any such alterations, the same
shall be made according to plans and specifications approved by Lessor and
subject to such other conditions as Lessor may reasonably require. All
alterations shall be made by Lessee at Lessee's sole expense by licensed
contractors and in accordance with all applicable laws governing such
alterations. Any work at any time commenced by Lessee on any of the
Properties shall be prosecuted diligently to completion, shall be of good
workmanship and materials and shall comply fully with all the terms of this
Lease. Upon completion of any alterations for which the consent of Lessor
was required, or upon the request of Lessor with respect to alterations for
which consent of Lessor was not required, Lessee shall promptly provide
Lessor with (i) evidence of full payment to all laborers and materialmen
contributing to the alterations, (ii) an architect's certificate certifying
the alterations to have been completed in conformity with the plans and
specifications, (iii) a certificate of occupancy (if the
23
alterations are of such a nature as would require the issuance of a
certificate of occupancy), and (iv) any other documents or information
reasonably requested by Lessor. Any addition to or alteration of any of the
Properties shall automatically be deemed a part of the Properties and belong
to Lessor, and Lessee shall execute and deliver to Lessor such instruments as
Lessor may require to evidence the ownership by Lessor of such addition or
alteration. Lessee shall execute and file or record, as appropriate, a
"Notice of Non-Responsibility," or any equivalent notice permitted under
applicable law in the States.
19. INDEMNIFICATION. Lessee shall indemnify, protect, defend and
hold harmless each of the Indemnified Parties from and against any and all
Losses (excluding Losses suffered by an Indemnified Party arising out of
Section 16.F Assessments or the gross negligence or willful misconduct of
such Indemnified Party; 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 the Lessor's interest in any of the
Properties or Lessor's failure to act in respect of matters which are or were
the obligation of Lessee under this Lease) caused by, incurred or resulting
from Lessee's operations of or relating in any manner to any of the
Properties, whether relating to their original design or construction, latent
defects, alteration, maintenance, use by Lessee or any Person thereon,
supervision or otherwise, or from any breach of, default under, or failure to
perform, any term or provision of this Lease by Lessee, its officers,
employees, agents or representatives, or to which any Indemnified Party is
subject because of Lessor's interest in any of the Properties, including,
without limitation, Losses arising from (1) any accident, injury to or death
of any Person or loss of or damage to property occurring in, on or about any
of the Properties or portion thereof or on the adjoining sidewalks, curbs,
parking areas, streets or ways, (2) any use, non-use or condition in, on or
about, or possession, alteration, repair, operation, maintenance or
management of, any of the Properties or any portion thereof or on the
adjoining sidewalks, curbs, parking areas, streets or ways, (3) any
representation or warranty made herein by Lessee, in any certificate
delivered in connection herewith or in any other agreement to which Lessee is
a party being false or misleading in any material respect as of the date of
such representation or warranty was made, (4) performance of any labor or
services or the furnishing of any materials or other property in respect to
any of the Properties or any portion thereof, (5) any taxes, assessments or
other charges which Lessee is required to pay under Section 10, (6) any lien,
encumbrance or claim arising on or against any of the Properties or any
portion thereof under any Applicable Regulation or otherwise which Lessee is
obligated hereunder to remove and discharge, or the failure to comply with
any Applicable Regulation, (7) the claims of any invitees, patrons, licensees
or subtenants of all or any portion of any of the Properties or any Person
acting through or under Lessee or otherwise acting under or as a consequence
of this Lease or any sublease of any of the Properties, (8) any act or
omission of Lessee or its agents, contractors, licensees, subtenants or
invitees, (9) any contest referred to in Section 10, and (10) the sale of
liquor, beer or wine on any of the Properties. It is expressly understood
and agreed that Lessee's obligations under this Section 19 shall survive the
expiration or earlier termination of this Lease for any reason.
20. QUIET ENJOYMENT. So long as Lessee shall pay the rental and
other sums herein provided and shall keep and perform all of the terms,
covenants and conditions on its part herein contained, and no Event of
Default shall be continuing hereunder, Lessee shall have, subject and
24
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Properties. Notwithstanding the foregoing, however, in no
event shall Lessee be entitled to bring any action against Lessor to enforce
its rights hereunder if an Event of Default shall have occurred and be
continuing.
21. CONDEMNATION OR DESTRUCTION. A. In the event of a taking
of all or any part of any of the Properties for any public or quasi-public
purpose by any lawful power or authority by exercise of the right of
condemnation or eminent domain or by agreement among Lessor, Lessee and those
authorized to exercise such right ("Taking") or the commencement of any
proceedings or negotiations which might result in a Taking or any damage to
or destruction of any of the Properties or any part thereof as a result of a
fire or other casualty ("Casualty"), Lessee will promptly give written notice
thereof to Lessor, generally describing the nature and extent of such Taking,
proceedings, negotiations or Casualty and including copies of any documents
or notices received in connection therewith. Thereafter, Lessee shall
promptly send Lessor copies of all correspondence and pleadings relating to
any such Taking, proceedings, negotiations or Casualty. During all periods
of time following a Casualty, Lessee shall ensure that the subject Property
is secure and does not pose any risk of harm to adjoining property owners or
occupants or third-parties.
B. In the event of a Taking of the whole of any of the
Properties, other than for temporary use ("Total Taking"), the obligations of
Lessee with respect to such Property only shall terminate as of the date of
the Total Taking, but this Lease shall otherwise continue in full force and
effect with respect to the remaining Properties. From and after the date of
a Total Taking, the Base Annual Rental shall be reduced by an amount equal to
the product of (i) the Applicable Rent Reduction Percentage for the Property
subject to the Total Taking, and (ii) the Base Annual Rental in effect as of
the date of such Total Taking (the "Adjustment"). If the date of such Total
Taking is other than the first day of a month, the Base Annual Rental payable
for the month in which such Total Taking occurs shall be apportioned based on
such Adjustment as of the date of the Total Taking. Lessee's obligations to
Lessor under Section 19 of this Lease with respect to such Property and
Lessee's obligation to pay all other sums of money under this Lease (whether
payable to Lessor or to a third-party) which accrue prior to the date of such
Total Taking shall survive the partial termination of this Lease with respect
to such Property. A Total Taking shall include a taking of that portion of
the Property which renders it no longer economically useable as a Permitted
Facility in the reasonable determination of Lessor. Lessor shall be entitled
to receive the entire award or payment in connection with a Total Taking
without deduction for any estate vested in Lessee by this Lease. Lessee
hereby expressly assigns to Lessor all of its right, title and interest in
and to every such award or payment and agrees that Lessee shall not be
entitled to any award or payment for the value of Lessee's leasehold interest
in this Lease. Lessee shall be entitled to claim and receive any award or
payment from the condemning authority expressly granted for the taking of
Personalty, the interruption of its business and moving expenses, but only if
such claim or award does not adversely affect or interfere with the
prosecution of Lessor's claim for the Total Taking or otherwise reduce the
amount recoverable by Lessor for the Total Taking.
C. In the event of a Taking of all or any part of any of the
Properties for a temporary use ("Temporary Taking"), this Lease shall remain
in full force and effect without any reduction
25
of Base Annual Rental, Additional Rental or any other sum payable hereunder.
Except as provided below and subject to the terms and provisions of the
Mortgages, Lessee shall be entitled to the entire award for a Temporary
Taking, whether paid by damages, rent or otherwise, unless the period of
occupation and use by the condemning authorities shall extend beyond the date
of expiration of this Lease, in which case the award made for such Taking
shall be apportioned between Lessor and Lessee as of the date of such
expiration. At the termination of any such Temporary Taking, Lessee will, at
its own cost and expense and pursuant to the terms of Section 18, promptly
commence and complete the restoration of the Property affected by such
Temporary Taking; provided, however, Lessee shall not be required to restore
such Property if the Lease Term shall expire prior to, or within one year
after, the date of termination of such Temporary Taking, and in such event
Lessor shall be entitled to recover all damages and awards arising out of the
failure of the condemning authority to repair and restore such Property at
the expiration of such Temporary Taking.
D. In the event of a Taking which is not a Total Taking or a
Temporary Taking ("Partial Taking") or of a Casualty, all awards,
compensation or damages shall be paid to Lessor, and Lessor shall have the
option to (i) terminate this Lease with respect to the Property affected,
provided that Lessor shall have obtained Lender's prior written consent, by
notifying Lessee within 60 days after Lessee gives Lessor notice of such
Casualty or after title has vested in the taking authority with respect to a
Partial Taking or (ii) continue this Lease in effect, which election may be
evidenced by either a written notice from Lessor to Lessee or Lessor's
failure to notify Lessee that Lessor has elected to terminate this Lease with
respect to such Property within such 60-day period. Lessee shall have a
period of 60 days after Lessor's notice that it has elected to terminate this
Lease with respect to such Property during which to elect to continue this
Lease with respect to such Property on the terms herein provided. If Lessor
elects to terminate this Lease with respect to such Property and Lessee does
not elect to continue this Lease with respect to such Property or shall fail
during such 60-day period to notify Lessor of Lessee's intent to continue
this Lease with respect to such Property, then this Lease shall terminate
with respect to such Property as of the last day of the month during which
such period expired. Lessee shall then immediately vacate and surrender such
Property, all obligations of either party hereunder with respect to such
Property shall cease as of the date of termination (provided, however,
Lessee's obligations to Lessor under any indemnification provisions of this
Lease with respect to such Property (including, without limitation, Sections
16 and 19) and Lessee's obligations to pay Base Annual Rental, Additional
Rental and all other sums (whether payable to Lessor or a third party)
accruing under this Lease with respect to such Property prior to the date of
termination shall survive such termination), the Base Annual Rental shall be
reduced by an amount equal to the product of (i) the Applicable Rent
Reduction Percentage for such Property and (ii) the Base Annual Rental in
effect as of the date of such Partial Taking or Casualty, and Lessor may
retain all such awards, compensation or damages. This Lease shall continue in
full force and effect with respect to all other Properties. If Lessor elects
not to terminate this Lease with respect to such Property, or if Lessor
elects to terminate this Lease with respect to such Property but Lessee
elects to continue this Lease with respect to such Property, then this Lease
shall continue in full force and effect on the following terms: (i) all Base
Annual Rental, Additional Rental and other sums and obligations due under
this Lease shall continue unabated, and (ii) Lessee shall promptly commence
and diligently prosecute restoration of such Property to the same condition,
26
as nearly as practicable, as prior to such Partial Taking or Casualty as
approved by Lessor. Subject to the terms and provisions of the Mortgages,
Lessor shall promptly make available in installments as restoration
progresses an amount up to but not exceeding the amount of any award,
compensation or damages received by Lessor after deducting all costs, fees
and expenses incident to the collection thereof, including all costs and
expenses incurred by Lessor and Lender in connection therewith (the "Net
Restoration Amount"), upon request of Lessee accompanied by evidence
reasonably satisfactory to Lessor that such amount has been paid or is due
and payable and is properly a part of such costs and that Lessee has complied
with the terms of Section 18 in connection with the restoration. Prior to
the disbursement of any portion of the Net Restoration Amount with respect to
a Casualty, Lessee shall provide evidence reasonably satisfactory to Lessor
of the payment of restoration expenses by Lessee up to the amount of the
insurance deductible applicable to such Casualty. Lessor shall be entitled
to keep any portion of the Net Restoration Amount which may be in excess of
the cost of restoration, and Lessee shall bear all additional costs, fees and
expenses of such restoration in excess of the Net Restoration Amount. If this
Lease is terminated with respect to any Property as a result of a Casualty,
simultaneously with such termination Lessee shall pay Lessor an amount equal
to the insurance deductible applicable to such Casualty.
E. Any loss under any property damage insurance required to be
maintained by Lessee shall be adjusted by Lessor and Lessee. Any award
relating to a Total Taking or a Partial Taking shall be adjusted by Lessor
or, at Lessor's election, Lessee. Notwithstanding the foregoing or any other
provisions of this Section 21 to the contrary, if at the time of any Taking
or any Casualty or at any time thereafter an Event of Default shall have
occurred and be continuing, Lessor is hereby authorized and empowered but
shall not be obligated, in the name and on behalf of Lessee and otherwise, to
file and prosecute Lessee's claim, if any, for an award on account of such
Taking or for insurance proceeds on account of such Casualty and to collect
such award or proceeds and apply the same, after deducting all costs, fees
and expenses incident to the collection thereof, to the curing of such Event
of Default and any other then existing Event of Default and/or to the payment
of any amounts owed by Lessee to Lessor under this Lease, in such order,
priority and proportions as Lessor in its discretion shall deem proper.
F. Notwithstanding the foregoing, nothing in this Section 21
shall be construed as limiting or otherwise adversely affecting the
representations, warranties, covenants and characterizations set forth in
Lease, including, without limitation, those provisions set forth in Section
3.
22. INSPECTION. Lessor and its authorized representatives shall
have the right, upon giving reasonable advance notice, to enter any of the
Properties or any part thereof at reasonable times in order to inspect the
same and make photographic or other evidence concerning Lessee's compliance
with the terms of this Lease or in order to show the Properties to
prospective purchasers and lenders. Lessee hereby waives any claim for
damages for any injury or inconvenience to or interference with Lessee's
business, any loss of occupancy or quiet enjoyment of any of the Properties
and any other loss occasioned by such entry so long as Lessor shall have used
reasonable efforts not to unreasonably interrupt Lessee's normal business
operations. Lessee shall keep and maintain at the Properties or Lessee's
corporate headquarters
27
full, complete and appropriate books of account and records of Lessee's
business relating to the Properties. Lessee's books and records shall at all
times be open for inspection by Lessor, Lender and their respective auditors
or other authorized representatives and shall show such information as is
reasonably necessary to determine compliance with Lessor's obligations under
the Loan Documents.
23. DEFAULT, REMEDIES AND MEASURE OF DAMAGES. A. Each of the
following shall be an event of default under this Lease (each, an "Event of
Default"):
(i) If any representation or warranty of Lessee set
forth in this Lease is false in any material respect, or if Lessee
renders any statement or account which is false in any material
respect;
(ii) If any rent or other monetary sum due under this
Lease is not paid within five days from the date when due; provided,
however, notwithstanding the occurrence of such an Event of Default,
Lessor shall not be entitled to exercise its remedies set forth below
unless and until Lessor shall have given Lessee notice thereof and
a period of five days from the delivery of such notice shall have
elapsed without such Event of Default being cured;
(iii) If Lessee fails to pay, prior to delinquency, any
taxes, assessments or other charges the failure of which to pay will
result in the imposition of a lien against any of the Properties
pursuant to Applicable Regulations unless the Lessee is contesting
the tax, assessment or other charge in good faith for such Property
through appropriate and timely proceedings which could not reasonably
be expected to result in any Material Adverse Effect;
(iv) If Lessee becomes insolvent within the meaning of
the Code, files or notifies Lessor 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, hereinafter, an "Action"),
becomes the subject of either an involuntary petition under the Code
or an involuntary Action which is not dismissed within 90 days after
the initiation of such involuntary petition or Action, or is not
generally paying its debts as the same become due;
(v) If Lessee vacates or abandons any of the Properties
other than in accordance with the provisions of Section 15;
(vi) If Lessee fails to observe or perform any of the
other covenants, conditions, or obligations of this Lease; 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 property of Lessor in immediate jeopardy, and is within the
reasonable power of Lessee to promptly cure after receipt of notice
thereof, all as determined by Lessor in its reasonable discretion,
then such failure shall not constitute an Event of Default hereunder,
unless otherwise expressly provided herein, unless and until Lessor
shall have given Lessee notice thereof and a period of 30 days shall
have elapsed, during which period Lessee may correct
28
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
corrected or cured within such 30-day period, as determined by Lessor
in its reasonable discretion, and Lessee is diligently pursuing a
correction or cure of such failure, then Lessee shall have a
reasonable period to correct or cure such failure beyond such 30-day
period, which shall in no event exceed 90 days after receiving notice
of such failure from Lessor except if such cure is for an
Environmental Condition and Lessee is diligently pursuing such cure
but in no event exceeding 180 days thereafter. If Lessee 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;
(vii) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or grace
periods, under any of the Related Leases, any of the Other
Agreements, or any of the Shoney's Loan Documents; provided,
however, that
(x) an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Related Lease or Other Agreement relating
to a property for which Lender or an Affiliate of Lender has
made a loan to any of the Lessor Entities which has not been
the subject of a Securitization, Participation or Transfer
shall not constitute an Event of Default under this Lease if
the loans secured by the Mortgages have been the subject of
a Securitization, Participation or Transfer, and
(y) an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Related Lease or Other Agreement relating
to a property for which Lender or an Affiliate of Lender has
made a loan to any of the Lessor Entities which has been
included in any Loan Pool shall not constitute an Event of
Default under this Lease if the loans secured by the
Mortgages have been included in any other Loan Pool;
(viii) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or grace
periods, under any of the Lessee Loan Documents; provided, however,
that
(x) an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Lessee Loan Document relating to a
property for which Lender or an Affiliate of Lender has made
a loan to Lessee which has not been the subject of a
Securitization, Participation or Transfer shall not
constitute an Event of Default under this Lease if the loans
secured by the Mortgages have been the subject of a
Securitization, Participation or Transfer, and
(y) an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace
periods, under any Lessee Loan Document relating to a
property for which Lender or an Affiliate of Lender has made
a loan to Lessee which has been included in any Loan Pool
shall not constitute an Event of
29
Default under this Lease if the loans secured by the
Mortgages have been included in any other Loan Pool; or
(ix) If a final, nonappealable judgment is rendered by a
court against Lessee which has any Material Adverse Effect or is in
the amount of $250,000.00 or more, and in either event is not
discharged or provision made for such discharge within 60 days from
the date of entry thereof.
B. Upon the occurrence and continuance of an Event of Default,
with or without notice or demand, except the notice prior to default required
under certain circumstances by Section 23.A above or such other notice as may
be required by statute and cannot be waived by Lessee (all other notices
being hereby waived), Lessor shall be entitled to 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
following as well as the applicable remedies set forth on the attached
Schedule I:
(i) To terminate this Lease, whereupon Lessee's right to
possession of the Properties shall cease and this Lease, except as
to Lessee's liability, shall be terminated.
(ii) To exercise Lessor's rights under the License
Agreement.
(iii) To reenter and take possession of any or all of the
Properties, any or all Personalty located on or at any or all of the
Properties in which Lessor shall have a landlord's lien and/or
security interest, and, to the extent permissible, all franchises,
licenses, area development agreements, permits and other rights or
privileges of Lessee pertaining to the use and operation of any or
all of the Properties and to expel Lessee and those claiming under
or through Lessee, without being deemed guilty in any manner of
trespass or becoming liable for any loss or damage resulting
therefrom, without resort to legal or judicial process, procedure or
action. No notice from Lessor hereunder or under a forcible entry
and detainer statute or similar law shall constitute an election by
Lessor to terminate this Lease unless such notice specifically so
states. If Lessee shall, after default, voluntarily give up
possession of any of the Properties to Lessor, deliver to Lessor or
its agents the keys to any of the Properties, or both, such actions
shall be deemed to be in compliance with Lessor's rights and the
acceptance thereof by Lessor or its agents shall not be deemed to
constitute a termination of this Lease. Lessor reserves the right
following any reentry and/or reletting to exercise its right to
terminate this Lease by giving Lessee written notice thereof, in
which event this Lease will terminate as specified in said notice.
(iv) To seize all Personalty located on or at any or all
of the Properties, in which Lessor shall have a landlord's lien
and/or security interest, and to dispose thereof in accordance with
the laws prevailing at the time and place of such seizure or to
remove all or any portion of such property and cause the same to be
stored in a public warehouse or elsewhere at Lessee's sole expense,
without becoming liable for any loss or damage resulting therefrom
and without resorting to legal or judicial process, procedure or
action.
30
(v) To relet any or all of the Properties or any part
thereof for such term or terms (including a term which extends beyond
the original Lease Term), at such rentals and upon such other terms
as Lessor, in its sole discretion, may determine, with all proceeds
received from such reletting being applied to the rental and other
sums due from Lessee in such order as Lessor may, in it sole
discretion, determine, which other sums include, without limitation,
all repossession costs, brokerage commissions, attorneys' fees and
expenses, employee expenses, alteration, remodeling and repair costs
and expenses of preparing for such reletting. Lessor reserves the
right following any reentry and/or reletting to exercise its right
to terminate this Lease by giving Lessee written notice thereof, in
which event this Lease will terminate as specified in said notice.
(vi) (x) To recover from Lessee all rent and other
monetary sums then due and owing under this Lease, and (y) to
accelerate and recover from Lessee all rent and other monetary sums
scheduled to become due and owing under this Lease after the date of
such breach for the entire original scheduled Lease Term.
(vii) To recover from Lessee all costs and expenses,
including reasonable attorneys' fees, court costs, expert witness
fees, costs of tests and analyses, travel and accommodation expenses,
deposition and trial transcripts, copies and other similar costs and
fees, paid or incurred by Lessor as a result of such breach,
regardless of whether or not legal proceedings are actually
commenced. Upon Lessee's request, Lessor shall provide Lessee with
supporting documentation for such costs and expenses.
(viii) To immediately or at any time thereafter, and with
or without notice, at Lessor's sole option but without any obligation
to do so, correct such breach or default and charge Lessee all costs
and expenses incurred by Lessor therein. Any sum or sums so paid by
Lessor, together with interest at the Default Rate shall be deemed
to be Additional Rental hereunder and shall be immediately due from
Lessee to Lessor. Any such acts by Lessor in correcting Lessee's
breaches or defaults hereunder shall not be deemed to cure said
breaches or defaults or constitute any waiver of Lessor's right to
exercise any or all remedies set forth herein.
(ix) To immediately or at any time thereafter, and with
or without notice, except as required herein, set off any money of
Lessee held by Lessor under this Lease against any sum owing by
Lessee hereunder.
(x) To seek any equitable relief available to Lessor,
including, without limitation, the right of specific performance.
All powers and remedies given by this Section 23.B to Lessor, subject
to applicable law, shall be cumulative and not exclusive of one another or of
any other right or remedy or of any other powers and remedies available to
Lessor under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained
in this Lease, and no delay or omission of Lessor to exercise any right or
power accruing upon the occurrence of any Event of Default shall impair any
other or subsequent Event of Default or impair any rights or remedies
consequent thereto. Every power and remedy given by this Section 23.B or
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by law to Lessor may be exercised from time to time, and as often as may be
deemed expedient, by Lessor, subject at all times to Lessor's right in its
sole judgment to discontinue any work commenced by Lessor or change any
course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations
under this Lease or in the event of an emergency, then, without waiving any
Event of Default which may result from such failure or emergency, Lessor may,
but without any obligation to do so, take all actions, including, without
limitation, entry upon any or all of the Properties to perform Lessee's
obligations, immediately and without notice in the case of an emergency and
upon five Business Days' prior written notice to Lessee in all other cases.
All expenses incurred by Lessor in connection with performing such
obligations, including, without limitation, reasonable attorneys' fees and
expenses, together with interest at the Default Rate from the date any such
expenses were incurred by Lessor until the date of payment by Lessee, shall
constitute Additional Rental and shall be paid by Lessee to Lessor upon
demand.
24. LIENS; MORTGAGES, SUBORDINATION AND ATTORNMENT. Lessor's
interest in this Lease and/or any of the Properties shall not be subordinate
to any liens or encumbrances placed upon any of the Properties by or
resulting from any act of Lessee, and nothing herein contained shall be
construed to require such subordination by Lessor. Lessee shall keep the
Properties free from any liens for work performed, materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT EXCEPT AS
PERMITTED BY THIS LEASE, LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, SECURITY
INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF ANY OF THE
PROPERTIES OR LESSEE'S LEASEHOLD INTEREST THEREIN OR THE PERSONALTY, AND ANY
SUCH PURPORTED TRANSACTION SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED
TRANSACTION EXCEPT AS PERMITTED BY THIS LEASE SHALL BE DEEMED A TORTIOUS
INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND LESSOR'S OWNERSHIP OF
THE PROPERTIES.
This Lease at all times shall automatically be subordinate to the
Mortgages and to the lien of any and all ground leases, mortgages, deeds to
secure debt and trust deeds now or hereafter placed upon any of the
Properties by Lessor, and Lessee covenants and agrees to execute and deliver,
upon demand, such further instruments subordinating this Lease to the lien of
the Mortgages and any or all such ground leases, mortgages, deeds to secure
debt or trust deeds as shall be desired by Lessor, or any present or proposed
mortgagees or lenders under deeds to secure debt or trust deeds, upon the
condition that (a) Lessee shall have the right to remain in possession of the
Properties under the terms of this Lease, notwithstanding any default in the
Mortgages or any or all such mortgages, deeds of trust or trust deeds or
after foreclosure of any or all such Mortgages, mortgages, deeds of trust or
trust deeds, so long as no Event of Default then exists and (b) the holders
of the Mortgages and any and all mortgages, deeds of trust or trust deeds now
or hereafter placed upon any of the Properties by lessor execute an agreement
substantially in the form attached to this Lease as Exhibit B in recordable
form wherein the holder(s) of said indebtedness agree not to disturb Lessee's
possession, deprive Lessee of any rights or increase Lessee's obligations
under this lease ("Non-Disturbance and Attornment
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Agreement"). The Non-Disturbance and Attornment Agreement shall provide that
the mortgagee, beneficiary or trustee named in such mortgage, deed of trust
or trust deed shall, subject to the terms of this Section 24, recognize this
Lease and acknowledge that, so long as no Event of Default then exists, a
foreclosure or acceptance of a deed in lieu of foreclosure or the exercise of
any other rights under such mortgage, deed of trust or trust deed shall not
extinguish or otherwise diminish or disturb the rights of Lessee as set forth
in this lease. If any mortgagee, receiver, Lender or other secured party
elects to have this lease and the interest of Lessee hereunder be superior to
any of the Mortgages or any such mortgage, deed of trust or trust deed and
evidences such election by notice given to Lessee, then this Lease and the
interest of Lessee hereunder shall be deemed superior to any such Mortgage,
mortgage, deed of trust or trust deed, whether this Lease was executed before
or after such Mortgage, mortgage, deed of trust or trust deed and in that
event such mortgagee, receiver, Lender or other secured party shall have the
same rights with respect to this Lease as if it had been executed and
delivered prior to the execution and delivery of such Mortgage, mortgage,
deed of trust or trust deed and had been assigned to such mortgagee,
receiver, Lender or other secured party.
Although the foregoing provisions shall be self-operative and no
future instrument of subordination shall be required, upon request by Lessor,
Lessee shall execute and deliver whatever instruments may be required for
such purposes, and in the event Lessee fails so to do within 10 Business Days
after demand, such failure shall be an Event of Default.
Lessee shall give written notice to any lender of Lessor having a
recorded lien upon any of the Properties or any part thereof of which Lessee
has been notified of any breach or default by Lessor of any of its
obligations under this Lease simultaneously with the giving of such notice to
Lessor, and Lessee shall give such lender at least 60 days beyond any notice
period to which Lessor might be entitled to cure such default before Lessee
may exercise any remedy with respect thereto. Upon request by Lessor, Lessee
shall also provide Lessee's most recent audited financial statements to
Lessor or any such lender and certify the continuing accuracy of such
financial statements in such manner as Lessor or such lender may request.
25. AMENDED AND RESTATED MASTER LEASE. At the request of Lessor,
Lessor and Lessee shall amend and restate this Lease and such of the other
Conversion Option Leases (as defined in the Loan Agreement) for which Lender
shall have exercised its Conversion Option (as defined in the Loan Agreement)
pursuant to an amended and restated master lease (the "Amended and Restated
Master Lease). The Amended and Restated Master Lease shall be executed
effective as of the date of the completion of the Conversion (as defined in
the Notes) and shall be substantially in the form of this Lease, except that
the "Base Annual Rental" payable under the Amended and Restated Master Lease
shall equal the sum of the Base Annual Rental payable under this Lease and
the "Base Annual Rental" payable under the other Conversion Option Leases.
Lessee agrees to take such additional actions and execute such additional
documents as Lessor may reasonably require with respect to the execution and
delivery of the Amended and Restated Master Lease.
26. ESTOPPEL CERTIFICATE. A. At any time, and from time to
time, Lessee shall, promptly and in no event later than 10 Business Days
after a request from Lessor or Lender, execute, acknowledge and deliver to
Lessor or Lender a certificate in the form supplied by
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Lessor, Lender or any present or proposed mortgagee or purchaser designated
by Lessor, certifying: (i) that Lessee has accepted the Properties (or, if
Lessee has not done so, that Lessee has not accepted the Properties, and
specifying the reasons therefor); (ii) that this Lease is in full force and
effect and has not been modified (or if modified, setting forth all
modifications), or, if this Lease is not in full force and effect, the
certificate shall so specify the reasons therefor; (iii) the commencement and
expiration dates of the Lease Term, including the terms of any extension
options of Lessee; (iv) the date to which the rentals have been paid under
this Lease and the amount thereof then payable; (v) whether there are then
any existing defaults by Lessor in the performance of its obligations under
this Lease, and, if there are any such defaults, specifying the nature and
extent thereof; (vi) that no notice has been received by Lessee of any
default under this Lease which has not been cured, except as to defaults
specified in the certificate; (vii) the capacity of the Person executing such
certificate, and that such Person is duly authorized to execute the same on
behalf of Lessee; (viii) that neither Lessor nor Lender has actual
involvement in the management or control of decision making related to the
operational aspects or the day-to-day operations of the Properties; and (ix)
any other information reasonably requested by Lessor, Lender or such present
or proposed mortgagee or purchaser. If Lessee shall fail or refuse to
sign a certificate in accordance with the provisions of this Section within
10 Business Days following a request by Lessor, such failure or refusal shall
be an Event of Default.
B. At any time, and from time to time, Lessor shall, promptly
and in no event later than 10 Business Days after a request from Lessee,
execute, acknowledge and deliver to Lessee a certificate in the form supplied
by Lessee certifying: (i) that this Lease is in full force and effect and has
not been modified (or if modified, setting forth all modifications), or, if
this Lease is not in full force and effect, the certificate shall so specify
the reasons therefor; (ii) the commencement and expiration dates of the Lease
Term, including the terms of any extension options of Lessee; (iii) the date
to which the rentals have been paid under this lease and the amount thereof
then payable; (iv) whether there are then any existing defaults by Lessee in
the performance of its obligations under this Lease, and, if there are any
such defaults, specifying the nature and extent thereof; (v) that no notice
has been received by Lessor of any default under this Lease which has not
been cured, except as to defaults specified in the certificate; (vi) the
capacity of the Person executing such certificate, and that such Person is
duly authorized to execute the same on behalf of Lessor; (vii) that Lessor
has no actual involvement in the management or control of decision making
related to the operational aspects or the day-to-day operations of the
Properties; and (viii) any other information reasonably requested by Lessee.
27. ASSIGNMENT. A. If Lender shall succeed to the rights of
Lessor as landlord under this Lease, whether through foreclosure of the liens
of the Mortgages, exercise of a power of sale, deeds-in-lieu of foreclosure
or otherwise, Lender, as lessor, shall have the right to sell or convey all,
but not less than all, of the Properties or to assign its right, title and
interest as Lessor under this Lease in whole, but not in part. In the event
of any such sale or assignment other than a security assignment, Lessee shall
attorn to such purchaser or assignee and Lessor shall be relieved, from and
after the date of such transfer or conveyance, of liability for the
performance of any obligation of Lessor contained herein, except for
obligations or liabilities accrued prior to such assignment or sale
(provided, however, nothing in this Section 26 shall impose liability on
Lender or such purchaser or assignee, as lessor, for the obligations of
Lessor accruing under this
34
Lease prior to the time Lender or such purchaser or assignee, as the case may
be, succeeds to Lessor's rights as lessor under this Lease). Otherwise, and
except as permitted pursuant to the Loan Documents, Lessor shall not have the
right to sell or convey the Properties or to assign its right, title and
interest as lessor under this Lease in whole or in part.
B. Lessee acknowledges that Lessor has relied both on the
business experience and creditworthiness of Lessee and upon the particular
purposes for which Lessee intends to use the Properties in entering into this
Lease. Without the prior written consent of Lessor:
(i) Lessee shall not assign, transfer, convey, pledge or
mortgage this Lease or any interest therein, whether by operation of
law or otherwise;
(ii) no interest in Lessee shall be assigned,
transferred, conveyed, pledged or mortgaged, whether by operation of
law or otherwise, including, without limitation, a dissolution of
Lessee, provided, however, the foregoing shall not apply to (x) any
transfer of stock traded publicly during such period of time that the
stock of Lessee is publicly traded or (y) any other transfer of stock
that does not result in a change of voting control in Lessee; and
(iii) except as provided in Sections 15 and 26.C, Lessee
shall not sublease all or any part of any of the Properties.
It is expressly agreed that Lessor may withhold or condition such
consent based upon such matters as Lessor may in its reasonable discretion
determine, including, without limitation, the experience and creditworthiness
of any assignee, the assumption by any assignee of all of Lessee's
obligations hereunder by undertakings enforceable by Lessor, payment to
Lessor of any rentals owing under a sublease which are in excess of the
rentals owing hereunder, the transfer to any assignee of all necessary
licenses and franchises to continue operating the Properties for the purposes
herein provided, receipt of such representations and warranties from any
assignee as Lessor may request, including such matters as its organization,
existence, good standing and finances and other matters, whether or not
similar in kind. At the time of any assignment of this Lease which is
approved by Lessor, the assignee shall assume all of the obligations of
Lessee under this Lease pursuant to Lessor's standard form of assumption
agreement. No such assignment nor any subleasing of any of the Properties
shall relieve Lessee of its obligations respecting this Lease. Any
assignment, transfer, conveyance, pledge or mortgage in violation of this
paragraph shall be voidable at the sole option of Lessor. Notwithstanding
the foregoing, a transaction under (i), (ii) or (iii) above shall not be
deemed to have occurred in a corporate reorganization in which Lessee becomes
a wholly-owned subsidiary of a new holding corporation having the same
shareholders as Lessee immediately before the reorganization (except for
changes as a result of ordinary market transactions or the exercise of any
dissenters' rights) and pursuant to which no Material Adverse Effect occurs
solely as a result of the reorganization.
C. Notwithstanding the foregoing, but subject to the conditions
set forth in the following sentence, Lessee shall have the right at any time
without the consent of Lessor or Lender to sublease an aggregate of four (4)
of the Properties to qualified franchisees of Lessee. Lessee's
35
right to sublease the Properties as contemplated by the preceding sentence
shall be subject to the following conditions:
(1) no Event of Default shall have occurred and be
continuing;
(2) any such sublease shall be subordinate to this Lease
and Lessee shall remain liable under this Lease notwithstanding such
sublease; and
(3) the Properties subject to such subleases shall be
used as Permitted Facilities and shall otherwise be operated and
maintained in accordance with the terms and conditions of this Lease.
Within 10 Business Days after the execution of each such sublease, Lessee
shall provide Lessor with a notice of such sublease and a true, correct and
complete copy of the fully executed sublease.
28. NOTICES. All notices, consents, approvals or other
instruments required or permitted to be given by either party pursuant to
this Lease 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 during the normal business hours of the recipient on a Business
Day, but, if not, on the next Business Day, (c) the next Business Day, if
delivered by express overnight delivery service, or (d) the fifth 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 Lessee: Shoney's, Inc.
1727 Elm Hill Pike
Nashville, Tennessee 37210
Attention: Richard D. Schafstall, Esq.
Senior Vice President and
General Counsel
Telephone: (615) 231-2000
Facsimile: (615) 231-2531
If to Lessor: Shoney's Properties Group 1, LLC
1727 Elm Hill Pike
Nashville, Tennessee 37210
Attention: Michael P. Donahoe
Vice President
Telephone: (615) 231-2000
Facsimile: (615) 231-2461
or to such other address or such other Person as either party may from time
to time hereafter specify to the other party in a notice delivered in the
manner provided above. No such notices, consents,
36
approvals or other communications shall be valid unless Lender receives a
duplicate original thereof at the following address:
Dennis L. Ruben, Esq.
Executive Vice President, General Counsel and
Secretary
FFCA Funding Corporation
17207 North Perimeter Drive
Scottsdale, AZ 85255
Telephone: (480) 585-4500
Facsimile: (480) 585-2226
or to such other address or such other Person as Lender may from time to time
specify to Lessor and Lessee in a notice delivered in the manner provided
above.
29. HOLDING OVER. If Lessee remains in possession of any of the
Properties after the expiration of the term hereof, Lessee, at Lessor's
option and within Lessor's sole discretion, may be deemed a tenant on a
month-to-month basis and shall continue to pay rentals and other sums in the
amounts herein provided, except that the Base Monthly Rental shall be
automatically doubled, and to comply with all the terms of this Lease;
provided, however, that nothing herein nor the acceptance of rent by Lessor
shall be deemed a consent to such holding over. Lessee shall defend,
indemnify, protect and hold the Indemnified Parties harmless from and against
any and all Losses resulting from Lessee's failure to surrender possession
upon the expiration of the Lease Term, including, without limitation, any
claims made by any succeeding lessee.
30. LANDLORD'S LIEN/SECURITY INTEREST. Lessee agrees that Lessor
shall have a landlord's lien, and additionally hereby separately grants to
Lessor a first and prior security interest, in, on and against all
Personalty, which lien and security interest shall secure the payment of all
rental and other charges payable by Lessee to Lessor under the terms hereof
and all other obligations of Lessee to Lessor under this Lease. Lessee
further agrees to execute and deliver to Lessor from time to time such
financing statements and other documents as Lessor may then deem reasonably
appropriate or necessary to perfect and maintain said lien and security
interest, and expressly acknowledges and agrees that, in addition to any and
all other rights and remedies of Lessor whether hereunder or at law or in
equity, Lessor shall have any and all rights and remedies granted a secured
party under the Uniform Commercial Code then in effect in the States during
the existence of an Event of Default. If Lessee shall fail for any reason to
execute any such financing statement or document within 10 Business Days
after Lessor's request therefor, then such failure shall be an Event of
Default. Lessee covenants to promptly notify Lessor of any changes in
Lessee's name and/or organizational structure which may necessitate the
execution and filing of additional financing statements (provided, however,
the foregoing shall not be construed as Lessor's consent to such changes).
31. REMOVAL OF PERSONALTY. At the expiration of the Lease Term,
and if Lessee is not then in breach hereof, Lessee may remove all Personalty
from the Properties. Lessee shall repair any damage caused by such removal
and shall leave the Properties broom clean and in good and working condition
and repair inside and out subject to ordinary wear and tear. Any property of
37
Lessee left on the Properties on the tenth day following the expiration of
the Lease Term shall, at Lessor's option, automatically and immediately
become the property of Lessor.
32. FINANCIAL STATEMENTS. Lessee shall provide Lessor and Lender
with copies of each quarterly report on Form 10-Q, Annual Report on Form 10-K
and current Report on Form 8-K of Lessee, promptly and in any event within 5
Business Days, after the filing of such reports (if any) with the United
States Securities and Exchange Commission. If Lessee ceases to be required
to file such reports, or if for any other reason such reports are not filed,
with the United States Securities and Exchange Commission, Lessee shall
provide Lessor and Lender with the following reports: (i) within 60 days
after the end of each of the first 3 fiscal quarters of each fiscal year of
Lessee, copies of the unaudited consolidated balance sheets of Lessee and its
consolidated subsidiaries as at the end of the fiscal quarter of Lessee and
the related unaudited statements of earnings and cash flows, in each case for
the fiscal quarter and for the period from the beginning of such fiscal year
through the end of such fiscal quarter of Lessee, prepared in accordance with
GAAP throughout the periods reflected therein and certified (subject to year
end adjustments and the omission of footnotes) by the chief financial officer
or chief accounting officer of Lessee, and (ii) as soon as possible and in
any event within 120 days after the end of each fiscal year of Lessee, a copy
of the audited consolidated balance sheet of Lessee and its consolidated
subsidiaries as at the end of that fiscal year and the related statements of
earnings, stockholders' equity and cash flows of Lessee and its consolidated
subsidiaries for that fiscal year, setting forth in each case, in comparative
form, the corresponding figures for the preceding fiscal year of Lessee and
prepared in accordance with GAAP throughout the periods reflected therein,
certified by a firm of independent certified public accountants selected by
Lessee. In the event that Lessee's property and business at the Properties
is ordinarily consolidated with other business for financial statement
purposes, separate non-GAAP statements shall be prepared showing the sales,
profits and losses, assets and liabilities pertaining to each of the
Properties with the basis for allocation of overhead or other charges being
clearly set forth.
33. FORCE MAJEURE. Any prevention, delay or stoppage due to
strikes, lockouts, acts of God, enemy or hostile governmental action, civil
commotion, or Casualty beyond the control of the party obligated to perform
shall excuse the performance by such party for a period equal to any such
prevention, delay or stoppage, except the obligations imposed with regard to
rental and other monies to be paid by Lessee pursuant to this Lease and any
indemnification obligations imposed under this Lease.
34. TIME IS OF THE ESSENCE. Time is of the essence with respect
to each and every provision of this Lease in which time is a factor.
35. LESSOR'S LIABILITY. Notwithstanding anything to the contrary
provided in this Lease, it is specifically understood and agreed, such
agreement being a primary consideration for the execution of this Lease by
Lessor, that (i) there shall be absolutely no personal liability on the part
of Lessor, its successors or assigns and the trustees, members, partners,
shareholders, officers, directors, employees and agents of Lessor and its
successors or assigns, to Lessee with respect to any of the terms, covenants
and conditions of this Lease, (ii) Lessee waives all claims, demands and
causes of action against the trustees, members, partners, shareholders,
officers, directors, employees and agents of Lessor and its successors or
assigns in the event of any breach by Lessor of any of the
38
terms, covenants and conditions of this Lease to be performed by Lessor, and
(iii) Lessee shall look solely to the Properties for the satisfaction of each
and every remedy of Lessee in the event of any breach by Lessor of any of the
terms, covenants and conditions of this Lease to be performed by Lessor, or
any other matter in connection with this Lease or the Properties, such
exculpation of liability to be absolute and without any exception whatsoever.
Subject to the "Carveouts" as hereinafter set forth, it is specifically
understood and agreed, such agreement being a primary consideration for the
execution of this Lease by Lessee, that (i) there shall be absolutely no
personal liability on the part of the trustees, members, partners,
shareholders, officers, directors, employees and agents of Lessee and its
successors or assigns, to Lessor with respect to any of the terms, covenants
and conditions of this Lease or the Other Agreements, and (ii) Lessor waives
all claims, demands and causes of action against the trustees, members,
partners, shareholders, officers, directors, employees and agents of Lessee
and its successors or assigns in the event of any breach by Lessee of any of
the terms, covenants and conditions of this Lease or the Other Agreements to
be performed by Lessee, such exculpation of liability and waiver of claims,
however, shall not be applicable and shall be of no force or effect upon the
occurrence of any one or more of the following specified circumstances (the
"Carveouts"):
(i) Any fraud or misrepresentation by Lessee under this Lease,
any of the other Loan Documents, or any of the Other Agreements;
(ii) Waste of any of the Properties (which shall be defined to
include damage, destruction or disrepair of the Properties caused by a
willful act or grossly negligent omission of the Lessee, but to exclude
ordinary wear and tear in the absence of gross negligence);
(iii) Misapplication of proceeds resulting from a Casualty or
Taking (each as defined in the Mortgages);
(iv) Failure of the Lessee to pay directly to Lender all rents,
incomes and profits, net of reasonable and customary operating expenses,
received in respect of any period when the Loan is in default; and
(v) The termination or amendment of this Lease or any Related
Lease in violation of the terms of this Lease or the Loan Documents.
36. CONSENT OF LESSOR. (A) Unless specified otherwise herein,
Lessor's consent to any request of Lessee may be conditioned or withheld in
Lessor's sole discretion. Lessor shall have no liability for damages
resulting from Lessor's failure to give any consent, approval or instruction
reserved to Lessor, Lessee's sole remedy in any such event being an action
for injunctive relief.
(B) It is understood and agreed that to the extent Lessor is
required to obtain the consent, approval, agreement or waiver of Lender with
respect to a matter for which Lessor's approval has been requested under this
Lease, Lessor shall in no event be deemed to have unreasonably withheld
Lessor's consent, approval, agreement or waiver thereof if Lender shall not
have given its approval if required.
39
37. WAIVER AND AMENDMENT. No provision of this Lease 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. No acceptance by Lessor of an amount less than the monthly rent
and other payments stipulated to be due under this Lease shall be deemed to
be other than a payment on account of the earliest such rent or other
payments then due or in arrears nor shall any endorsement or statement on any
check or letter accompanying any such payment be deemed a waiver of Lessor's
right to collect any unpaid amounts or an accord and satisfaction.
38. SUCCESSORS BOUND. Except as otherwise specifically provided
herein, the terms, covenants and conditions contained in this Lease shall
bind and inure to the benefit of the respective heirs, successors, executors,
administrators and assigns of each of the parties hereto.
39. NO MERGER. The voluntary or other surrender of this Lease
by Lessee, or a mutual cancellation thereof, shall not result in a merger of
Lessor's and Lessee's estates, and shall, at the option of Lessor, either
terminate any or all existing subleases or subtenancies, or operate as an
assignment to Lessor of any or all of such subleases or subtenancies.
40. CAPTIONS. Captions are used throughout this Lease for
convenience of reference only and shall not be considered in any manner in
the construction or interpretation hereof. References to a particular
"Section" herein shall mean such Section of this Lease unless specific
reference is also made to another instrument, agreement or document.
41. SEVERABILITY. The provisions of this Lease shall be deemed
severable. If any part of this Lease shall be held unenforceable by any
court of competent jurisdiction, the remainder shall remain in full force and
effect, and such unenforceable provision shall be reformed by such court so
as to give maximum legal effect to the intention of the parties as expressed
therein.
42. CHARACTERIZATION OF RELATIONSHIP OF PARTIES. A. It is the
intent of the parties hereto that the business relationship created by this
Lease and any related documents is solely that of a long-term commercial
lease between landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained herein. None of
the agreements contained herein, is intended, nor shall the same be deemed or
construed, to create a partnership between Lessor and Lessee, to make them
joint venturers, to make Lessee an agent, legal representative, partner,
subsidiary or employee of Lessor, nor to make Lessor in any way responsible
for the debts, obligations or losses of Lessee.
B. Lessor and Lessee acknowledge and warrant to each other that
each has been represented by independent counsel and has executed this Lease
after being fully advised by said counsel as to its effect and significance.
This Lease 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.
Whenever in this Lease any words of obligation or duty are used, such words
or expressions shall have the same force and effect as though made in the
form of a covenant.
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43. EASEMENTS. During the Lease Term, Lessor agrees to grant
such utility easements on, over, and above any of the Properties as Lessee
may reasonably request, provided that such easements will not materially
interfere with Lessor's ownership of such Properties.
44. BANKRUPTCY. A. As a material inducement to Lessor executing
this Lease, Lessee acknowledges and agrees that Lessor is relying upon (i)
the financial condition and specific operating experience of Lessee and
Lessee's obligation to use each of the Properties specifically in accordance
with system-wide requirements imposed from time to time on Permitted
Facilities, (ii) Lessee's timely performance of all of its obligations under
this Lease as to all Properties notwithstanding the entry of an order for
relief under the Code for Lessee and (iii) all defaults under this Lease as
to all Properties being cured promptly and this Lease being assumed within 60
days of any order for relief entered under the Code for Lessee, or this Lease
being rejected within such 60-day period and the Properties surrendered to
Lessor.
Accordingly, in consideration of the mutual covenants contained in
this Lease and for other good and valuable consideration, Lessee hereby
agrees that:
(i) All obligations that accrue under this Lease
(including the obligation to pay rent), from and after the date that
an Action is commenced shall be timely performed exactly as provided
in this Lease and any failure to so perform shall be harmful and
prejudicial to Lessor;
(ii) Any and all obligations under this Lease that become
due from and after the date that an Action is commenced and that are
not paid as required by this Lease shall, in the amount of such
rents, constitute administrative expense claims allowable under the
Code with priority of payment at least equal to that of any other
actual and necessary expenses incurred after the commencement of the
Action;
(iii) Any extension of the time period within which Lessee
may assume or reject this Lease without an obligation to cause all
obligations coming due under this Lease from and after the date that
an Action is commenced to be performed as and when required under
this Lease shall be harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within
which Lessee must cure all defaults and compensate Lessor for all
pecuniary losses which extends beyond the date of assumption of this
Lease shall be harmful and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all
terms and conditions of this Lease being assumed by the assignee
without alteration or amendment, and any assignment which results in
an amendment or alteration of the terms and conditions of this Lease
without the express written consent of Lessor shall be harmful and
prejudicial to Lessor;
(vi) Any proposed assignment of this Lease to an
assignee: (a) that will not use the Properties specifically in
accordance with a franchise, license and/or area development
agreement with the franchisor of Permitted Facilities, or (b) that
does not possess financial condition, operating performance and
experience characteristics equal to or better than the
41
financial condition, operating performance and experience of Lessee
as of the Effective Date, shall be harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease
for any reason whatsoever shall constitute cause for immediate relief
from the automatic stay provisions of the Code, and Lessee stipulates
that such automatic stay shall be lifted immediately and possession
of the Properties will be delivered to Lessor immediately without the
necessity of any further action by Lessor; and
(viii) This Lease shall at all times be treated as
consistent with the specific characterizations set forth in Section
3 of this Lease, and assumption or rejection of this Lease shall be
(a) in its entirety, (b) for all of the Properties, and (c) in strict
accordance with the specific terms and conditions of this Lease.
B. No provision of this Lease shall be deemed a waiver of
Lessor's rights or remedies under the Code or applicable law to oppose any
assumption and/or assignment of this Lease, to require timely performance of
Lessee's obligations under this Lease, or to regain possession of the
Properties as a result of the failure of Lessee to comply with the terms and
conditions of this Lease or the Code.
C. Notwithstanding anything in this Lease to the contrary, all
amounts payable by Lessee to or on behalf of Lessor under this Lease, whether
or not expressly denominated as such, shall constitute "rent" for the
purposes of the Code.
D. For purposes of this Section addressing the rights and
obligations of Lessor and Lessee in the event that an Action is commenced,
the term "Lessee" shall include Lessee's successor in bankruptcy, whether a
trustee, Lessee as debtor in possession or other responsible person.
45. NO OFFER. No contractual or other rights shall exist between
Lessor and Lessee with respect to the Properties until both have executed and
delivered this Lease, notwithstanding that deposits may have been received by
Lessor and notwithstanding that Lessor may have delivered to Lessee an
unexecuted copy of this Lease. The submission of this Lease to Lessee shall
be for examination purposes only, and does not and shall not constitute a
reservation of or an option for Lessee to lease or otherwise create any
interest on the part of Lessee in the Properties.
46. OTHER DOCUMENTS. Each of the parties agrees to sign such
other and further documents as may be necessary or appropriate to carry out
the intentions expressed in this Lease.
47. ATTORNEYS' FEES. In the event of any judicial or other
adversarial proceeding between the parties concerning this Lease, to the
extent permitted by law, the prevailing party shall be entitled to recover
all of its reasonable attorneys' fees and other costs in addition to any
other relief to which it may be entitled. In addition, Lessor shall, upon
demand, be entitled to all reasonable attorneys' fees and all other costs
incurred in the preparation and service of any notice or demand hereunder,
whether or not a legal action is subsequently commenced. References in this
Lease to attorneys' fees and/or costs shall mean both the fees and costs of
independent counsel
42
retained by a party with respect to the matter and the fees and costs of such
party's in-house counsel incurred in connection with the matter.
48. ENTIRE AGREEMENT. This Lease and any other instruments or
agreements referred to herein constitute the entire agreement between the
parties with respect to the subject matter hereof, and there are no other
representations, warranties or agreements except as herein provided. Without
limiting the foregoing, Lessee specifically acknowledges that neither Lessor
nor any agent, officer, employee or representative of Lessor has made any
representation or warranty regarding the projected profitability of the
business to be conducted on the Properties. Furthermore, Lessee acknowledges
that Lessor did not prepare or assist in the preparation of any of the
projected figures used by Lessee in analyzing the economic viability and
feasibility of the business to be conducted by Lessee at the Properties.
49. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. Lessee
acknowledges that this Lease was substantially negotiated in the State of
Arizona, this Lease was executed and delivered in the State of Arizona, all
payments under this Lease will be delivered in the State of Arizona (unless
otherwise directed by Lessor or its successors) 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 Lease, the parties hereto expressly submit to the non-exclusive
jurisdiction of all federal and state courts located in the State of Arizona.
Lessee and Lessor consent that they 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, Lessee and Lessor
waive and agree not to assert in any such action, suit or proceeding that
they are 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. The creation of this Lease
and the rights and remedies of Lessor with respect to the Properties, as
provided herein and by the laws of the States, as applicable, shall be
governed by and construed in accordance with the internal laws of the States,
as applicable, without regard to principles of conflicts of law. With
respect to other provisions of this Lease, this Lease shall be governed by
the internal laws of the State of Arizona, without regard to its principles
of conflicts of law. Nothing contained in this Section shall limit or
restrict the right of Lessor or Lessee to commence any proceeding in the
federal or state courts located in the states in which the Properties are
located to the extent Lessor or Lessee deems such proceeding necessary or
advisable to exercise remedies available under this Lease.
50. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original.
51. MEMORANDUM OF MASTER LEASE. Concurrently with the execution
of this Lease, Lessor and Lessee are executing the Memorandum to be recorded
in the applicable real property records with respect to each of the
Properties.
52. NO BROKERAGE. Lessor and Lessee represent and warrant to
each other that they have had no conversation or negotiations with any broker
concerning the leasing of the Properties except for Banc of America
Securities LLC which is the obligation of Lessee. Each of Lessor and Lessee
agrees to protect, indemnify, save and keep harmless the other, against and
from all
43
liabilities, claims, losses, costs, damages and expenses, including
attorneys' fees, arising out of, resulting from or in connection with their
breach of the foregoing warranty and representation.
53. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES. EACH OF LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES 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 LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE'S USE OR OCCUPANCY
OF ANY OF THE PROPERTIES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. 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, EACH OF LESSOR AND LESSEE
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE
TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE OTHER
PARTY AND ANY OF SUCH PARTY'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR
ANY OF THEIR RESPECTIVE SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ONE
PARTY AGAINST THE OTHER PARTY OR ANY OF SUCH OTHER PARTY'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO
ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER EACH OF LESSOR AND LESSEE
OF ANY RIGHT IT 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.
54. RELIANCE BY LENDER. Lessee acknowledges and agrees that
Lender may rely on all of the representations, warranties and covenants set
forth in this Lease, that Lender is an intended third-party beneficiary of
such representations, warranties and covenants and that Lender shall have all
rights and remedies available at law or in equity as a result of a breach of
such representations, warranties and covenants, including to the extent
applicable, the right of subrogation.
55. DOCUMENT REVIEW. In the event Lessee makes any request upon
Lessor requiring Lessor, Lender or the attorneys of Lessor or Lender to
review and/or prepare (or cause to be reviewed and/or prepared) any
documents, plans, specifications or other submissions in connection with or
arising out of this Lease, then Lessee shall reimburse Lessor or its designee
promptly upon Lessor's demand therefor for all out-of-pocket costs and
expenses incurred by Lessor in connection with such review and/or preparation
plus a reasonable processing and review fee.
44
56. STATE SPECIFIC PROVISIONS. The provisions and/or remedies
which are set forth on Schedule I shall be deemed a part of and included
within the terms and conditions of this Lease.
45
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease
as of the date first above written.
LESSOR:
SHONEY'S PROPERTIES GROUP 1, LLC, a
Delaware limited liability company
By: TPI Properties, Inc., a Tennessee
corporation, its managing member
By /s/ Michael P. Donahoe
---------------------------------------
Michael P. Donahoe, Vice President
LESSEE:
SHONEY'S, INC.,
a Tennessee corporation
By /s/ Michael P. Donahoe
---------------------------------------
Michael P. Donahoe, Vice President
Lessee's Tax Identification Number
62-0799798
STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Michael P. Donahoe, whose name as Vice
President of TPI Properties, Inc., a Tennessee corporation, managing member
of SHONEY'S PROPERTIES GROUP 1, LLC, a Delaware limited liability company, is
signed to the foregoing instrument, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the instrument,
he, as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation, acting in its capacity as such
managing member of said limited liability company.
Given under my hand and official seal this 1st day of September,
2000.
/s/
-----------------------------------
Notary Public
My Commission Expires:
STATE OF ARIZONA )
) SS.
COUNTY OF MARICOPA )
I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Michael P. Donahoe, whose name as Vice
President of SHONEY'S, INC., a Tennessee corporation, is signed to the
foregoing instrument, and who is known to me, acknowledged before me on this
day that, being informed of the contents of the instrument, he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation.
Given under my hand and official seal this 1st day of September,
2000.
/s/
-----------------------------------
Notary Public
My Commission Expires:
EXHIBITS AND SCHEDULES OMITTED DUE TO IMMATERIALITY.