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EXHIBIT 10.105
EQUIPMENT LEASE
THIS EQUIPMENT LEASE (this "Lease") is made as of July _____, 1996 (the
"Effective Date"), by and between LH LEASING COMPANY, INC., an Arizona
corporation ("Lessor"), whose address is 7373 North Scottsdale Road, Scottsdale,
Arizona 85253, and DENAMERICA CORP., a Georgia corporation ("Lessee"), whose
address is 7373 North Scottsdale Road, Scottsdale, Arizona 85253.
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:
"Equipment" means all fixtures, furniture, appliances, equipment and
other personal property owned by Lessor which are located on the Premises.
"FFCA" means FFCA Acquisition Corporation, a Delaware corporation, or
its corporate successors and assigns and any successor in interest to FFCA as
holder of the Note.
"Franchisor" means Black-eyed Pea U.S.A., Inc., a Texas corporation, or
its successor.
"Lease Term" shall have the meaning described in Section 3.
"Lease Year" means the 12-month period commencing on the first day of
the calendar year or any other 12-month period as may be approved in writing by
Lessor after the commencement of the Lease Term and each successive 12-month
period thereafter.
"Loan Agreement" means the Loan Agreement dated as of the date hereof
between Lessor, as borrower, and FFCA, as lender, relative to a loan made by
FFCA to Lessor.
"Loan Operative Documents" shall have the meaning set forth in Section
1 of the Loan Agreement.
"Material Adverse Effect" means a material adverse effect on the
business, operations, assets or financial condition of Lessee.
"Monthly Rental" means $316,983.38.
"Note" means the promissory note dated as of the date of this Lease
executed by Lessor in the original principal amount of $14,250,000.00 and made
payable to FFCA.
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"Premises" means, as the context requires, the parcel or parcels of
real property on which Black-eyed Pea restaurants are located, together with all
buildings, structures, fixtures and improvements located thereon, the addresses
of which are shown in Exhibit A attached hereto.
"Sublease" or "Subleases" means, as the context requires, a sublease
agreement, in form and substance reasonably acceptable to FFCA, between Lessee,
as sublessor, and a Sublessee relative to the subleasing of the Equipment, as
provided in Section 23.
"Sublessee" means, one or more partnerships, corporations, limited
liability companies or other entities which are wholly owned, directly or
indirectly, by Lessee.
2. DEMISE OF EQUIPMENT. 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 Equipment.
3. LEASE TERM. The Lease Term shall commence as of the Effective Date
and shall expire on August 1, 2001, unless terminated sooner as provided in this
Lease.
4. RENTAL AND OTHER PAYMENTS. If the Effective Date is a date other
than the first day of the month, Lessee shall pay Lessor on the Effective Date
the 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 applicable Monthly Rental.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR. Lessor
represents and warrants to Lessee and covenants as follows:
A. Organization, Authority and Status of Lessor. (i) Lessor
has been duly organized and is validly existing and in good standing
under the laws of the state of its incorporation. All necessary
corporate action has been taken by Lessor to authorize the execution,
delivery and performance by Lessor of this Lease and the other
documents, instruments and agreements provided for herein to which
Lessor is a party.
(ii) The person who has executed this Lease on behalf of
Lessor is duly authorized so to do.
B. Enforceability. Upon the execution hereof by Lessor, this
Lease constitutes the legal, valid and binding obligation of Lessor,
enforceable against Lessor in accordance with its terms; subject to
bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws relating to or affecting the rights of creditors
generally, and general principles of equity.
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C. Title to Equipment. As of the date of this Lease title to
the Equipment is vested in Lessor free and clear of all liens,
encumbrances, charges and security interests.
D. No Lessor Indebtedness. Until all of the obligations
evidenced by the Note are paid and satisfied in full, Lessor shall
incur no indebtedness of any nature during the term of this Lease,
other than the indebtedness evidenced by the Note.
E. No Encumbrance. Until all of the obligations evidenced by
the Note are paid and satisfied in full, Lessor shall not encumber or
pledge, or permit to be encumbered or pledged, the Equipment, or any
portion thereof, without the prior written consent of FFCA.
F. No Transfer. Until all of the obligations evidenced by the
Note are paid and satisfied in full, and except as otherwise expressly
permitted under Section 23, Lessor shall not transfer, sell or convey
the Equipment, or any portion thereof.
G. No Amendment. Until all of the obligations evidenced by the
Note are paid and satisfied in full, Lessor shall not amend, modify or
terminate, or permit to be amended, modified or terminated, this Lease
without the prior written consent of FFCA.
6. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and
warranties of Lessee contained in this Section are being made to induce Lessor
to enter into this Lease and Lessor has relied upon such representations and
warranties. Lessee represents and warrants to Lessor as follows:
A. Organization, Authority and Status of Lessee. (i) Lessee
has been duly organized, is validly existing and in good standing under
the laws of its state of incorporation, and is qualified as a foreign
corporation to do business in any jurisdiction where such qualification
is required, where such failure to so qualify might reasonably be
expected to result in a Material Adverse Effect. All necessary
corporate action has been taken by Lessee to authorize the execution,
delivery and performance by Lessee of this Lease and of the other
documents, instruments and agreements provided for herein to which
Lessee is a party.
(ii) The persons who have executed this Lease on behalf of
Lessee are duly authorized to do so.
B. Enforceability. Upon the execution hereof by Lessee, this
Lease constitutes the legal, valid and binding obligation of Lessee,
enforceable against Lessee in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws relating to or affecting the rights of creditors
generally, and general principles of equity.
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C. Litigation. Except as set forth on Exhibit B attached
hereto, there are no suits, actions, proceedings or investigations
pending, or to the best of Lessee's knowledge, threatened against or
involving Lessee before any court, arbitrator, or administrative or
governmental body which might, if adversely determined, reasonably be
expected to result in any Material Adverse Effect.
D. Absence of Breaches or Defaults. Lessee is not, and the
execution, delivery and performance of this Lease and the documents,
instruments and agreements provided for herein to which Lessee is a
party will not result, in any breach of or default under any other
document, instrument or agreement to which Lessee is a party or by
which Lessee is subject or bound, where such breach or default might
reasonably be expected to result in a Material Adverse Effect.
E. Intended Use. Lessee intends to use, or to permit a
Sublessee pursuant to a Sublease to use, the Equipment solely in
connection with the operation of Black-eyed Pea restaurants at the
Premises. Such intended use will not violate any governmental
requirement applicable to the Equipment or the Premises.
F. Licenses and Permits. Lessee has obtained all required
licenses and permits, both governmental and private, to use and operate
the Equipment in the intended manner, where the failure to so obtain
such licenses and permits might reasonably be expected to result in a
Material Adverse Effect.
G. True Lease. Lessor and Lessee intend for this Lease to be a
"true lease" and not a financing lease, capital lease, security
agreement or other financing or trust arrangement, and the economic
realities of this Lease are those of a true lease. The term of this
Lease, including any term extensions provided for in this Lease, is
less than the remaining economic life of the Equipment. Lessee waives
any claim or defense based upon the characterization of this Lease as
anything other than a true lease, and Lessee stipulates and agrees not
to challenge the validity, enforceability or characterization of the
lease of the Equipment 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, trust, financing device or
arrangement, security interest or the like. Lessee shall support the
intent of the parties that the lease of the Equipment pursuant to this
Lease is a true lease and does not create a joint venture, partnership,
trust, financing device or arrangement, security interest or the like,
if, and to the extent that, any challenge occurs.
7. NO WARRANTIES. LESSOR HAS PROVIDED THE EQUIPMENT FOR THE BENEFIT OF
LESSEE, AND LESSOR, NOT BEING THE MANUFACTURER OF THE EQUIPMENT NOR THE
MANUFACTURER'S AGENT, MAKES NO EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS
OF ANY KIND AS TO ANY MATTER WHATSOEVER, INCLUDING, BUT NOT LIMITED TO THE
CONDITION, DESIGN, QUALITY OR CAPACITY OF ANY EQUIPMENT, THE MERCHANTABILITY OF
ANY EQUIPMENT OR ITS FITNESS FOR ANY PARTICULAR PURPOSE, THE
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WORKMANSHIP OF THE EQUIPMENT, COMPLIANCE OF THE EQUIPMENT WITH THE REQUIREMENTS
OF ANY LAW, RULE, SPECIFICATION OR CONTRACT PERTAINING THERETO, PATENT
INFRINGEMENT OR LATENT DEFECTS. IN NO EVENT SHALL ANY DEFECT IN OR UNFITNESS OF
ANY EQUIPMENT RELIEVE LESSEE OF THE OBLIGATION TO PAY RENTAL OR TO MAKE ANY
OTHER PAYMENTS REQUIRED HEREUNDER OR OF ANY OTHER OBLIGATION HEREUNDER. WITHOUT
LIMITING THE FOREGOING, LESSOR SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM ANY DEFECT IN THE EQUIPMENT, INCLUDING LOSS
OF USE OF ANY OF THE EQUIPMENT OR FOR ANY INTERRUPTION IN LESSEE'S BUSINESS
OCCASIONED BY LESSEE'S INABILITY TO USE ANY OF THE EQUIPMENT FOR ANY REASON, OR
OTHERWISE, NOR SHALL ANY SUCH DEFECT PERMIT LESSEE TO TERMINATE THIS Lease OR TO
EXERCISE ANY OTHER REMEDY AGAINST LESSOR. Lessor hereby assigns to Lessee for
the Lease Term any warranty which has been extended to Lessor by the
manufacturer and/or vendor of such Equipment or any predecessor in interest of
Lessor and which Lessor has the right to so assign. All proceeds of any such
warranty recovery from the manufacturer or vendor of the Equipment or any
predecessor in interest of Lessor shall be used to repair the affected Equipment
or, if an event of default has occurred and is continuing, paid to Lessor, at
Lessor's option, and any excess proceeds shall be the property of Lessor and
shall be paid to FFCA and applied to the indebtedness evidenced by the Note in
the order provided in the Note.
No mortgage or other security interest which now or hereafter may cover
or affect any property or interest of Lessee, shall attach to the Equipment or
affect or become prior to Lessor's right, title and interest in the Equipment.
Lessee shall, if requested by Lessor, permanently affix or attach to
the Equipment throughout the Lease Term a tag provided by Lessor to disclose
Lessor's ownership of the Equipment. Lessee need not affix any such notice to
any item of Equipment in a place which would detract from the attractiveness of
such Equipment. Lessee will not allow any other name to be placed on any
Equipment as a designation or claim of ownership.
8. RENTALS TO BE NET TO LESSOR. The Monthly 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 Equipment shall be paid by
Lessee.
9. TAXES AND ASSESSMENTS. Lessee shall pay, as the same become due and
prior to delinquency, all taxes and assessments which accrue during the Lease
Term and would affect in any manner the net return realized by Lessor under this
Lease, including without limitation the following:
(a) All taxes and assessments upon the Equipment which are
assessed or come due during the Lease Term or any tax or charge levied
in lieu of such taxes and assessments;
(b) All taxes, charges, license fees or similar fees imposed
by reason of the use of the Equipment by Lessee; and
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(c) All excise, transaction, privilege, license, sales, use
and other taxes upon the rental or other payments hereunder, the
interest of either party or the activities of either party pursuant to
this Lease, except for any tax upon or measured by the net income and
profits of Lessor generally.
Within 30 days after each tax payment by Lessee, Lessee shall provide
Lessor with evidence reasonably satisfactory to Lessor that such tax payment was
made in a timely fashion. Lessee may contest any tax levied or assessed on the
Equipment and may seek a refund, rebate or abatement of any tax levied or
assessed on the Equipment, but only if arrangements for paying such tax prior to
it becoming a lien on the Equipment, together with all interest and penalties,
are made to the written reasonable satisfaction of Lessor.
10. INSURANCE. Throughout the Lease Term Lessee shall maintain at its
own 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),
in addition to such other insurance as Lessor may reasonably require from time
to time:
(a) All risks property insurance against loss, damage or
destruction by fire and other casualty, including theft, vandalism and
malicious mischief, flood (if and to the extent any of the Premises is
in a location designated by the Federal Secretary of Housing and Urban
Development as a flood hazard area), earthquake (if and to the extent
any of the Premises is in an area subject to destructive earthquakes
within recorded history), boiler explosion (if there is any boiler upon
the Premises), sprinkler damage (if and to the extent any of the
Premises has a sprinkler system), all matters covered by a standard
extended coverage endorsement and such other risks as Lessor may
reasonably require, insuring the Equipment for not less than 100% of
its full insurable replacement cost. Any insurance policy or policies
shall designate Lessor and Lessee as the named insureds as their
interest may appear.
(b) Comprehensive general liability and property damage
insurance, including a products liability clause, covering Lessor and
Lessee against bodily injury liability, property damage liability,
including without limitation any liability arising out of the
ownership, maintenance, repair, condition or operation of the
Equipment. Such insurance policy or policies shall contain a broad form
contractual liability endorsement under which the insurer agrees to
insure Lessee's indemnification obligations hereunder to the extent
insurable and a "severability of interest" clause or endorsement which
precludes the insurer from denying the claim of either Lessee or Lessor
because of the negligence or other acts of the other, shall be in
amounts of not less than $1,000,000 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, and shall be of form and substance reasonably
satisfactory to Lessor.
(c) State Worker's Compensation insurance in the statutorily
mandated limits, employer's liability insurance with limits not less
than $500,000 or such
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greater amount as Lessor may from time to time reasonably require and
such other insurance as may be necessary to comply with applicable
laws, except for the State of Texas were Lessee may self insure for the
first $150,000.00 of State Worker's Compensation; provided, however,
that Lessee shall obtain insurance coverage for all incidents and
matters in excess of $150,000.00 per injury and occurrence in the State
of Texas.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the
insurer as to claims against Lessor, its employees and agents;
(ii) Provide that such insurance cannot be
unreasonably canceled, invalidated or suspended on account of
the conduct of Lessee, its officers, directors, employees or
agents;
(iii) Provide that any "no other insurance" clause in
the insurance policy shall exclude any policies of insurance
maintained by Lessor and that the insurance policy shall not
be brought into contribution with insurance maintained by
Lessor;
(iv) Contain a standard without contribution mortgage
clause endorsement, or its reasonable equivalent, in favor of
any lender designated by Lessor;
(v) Provide that the policy of insurance shall not be
terminated, canceled or substantially modified without at
least 30 days' prior written notice to Lessor;
(vi) Provide that the insurer shall not have the
option to restore or replace the Equipment if Lessor elects to
terminate this Lease in accordance with the terms hereof; and
(vii) Be issued by insurance companies licensed to do
business in the state in which the Premises is located and
which are rated A:VI or better by Best's Insurance Guide or
are otherwise approved by Lessor.
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 as an additional insured as its interests may appear
and shall be payable as set forth in Section 18 hereof. All such policies shall
be written as primary policies, with deductibles not to exceed 10% of the amount
of coverage. Any other policies, including any policy now or hereafter carried
by Lessor, 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
certificates of insurance or, upon Lessor's request, duplicate originals of
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insurance policies evidencing that insurance satisfying the requirements of this
Lease is in effect at all times.
11. TAX AND INSURANCE IMPOUND. Upon the occurrence of any default under
this Lease by Lessee, Lessor may, at any time in its sole discretion, upon
written notice to Lessee 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 relative to the
Equipment. Upon such requirement, Lessor will reasonably estimate the amounts
needed for such purposes and will notify Lessee in writing 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 upon written demand to Lessee. 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. 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.
During the continuance of an event of 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.
12. 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 set off, abatement,
deferment, deduction or counterclaim whatsoever. Upon execution of this Lease,
Lessee shall establish arrangements whereby payments of the Monthly Rental and
impound payments, if any, are transferred by wire or other means directly from
Lessee's bank account to such account as Lessor may designate. Any delinquent
payment (that is, any payment not made within the period specified in Section
20) 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) and
bear interest at the rate of 15% per annum, which interest shall accrue from the
date such payment was due, but in no event shall Lessee be obligated to pay a
sum of late charge and interest higher than the maximum legal rate then in
effect.
13. USE. Lessee shall use the Equipment solely in connection with its
operation of Black-eyed Pea restaurants in all material respects in accordance
with the standards of Black- eyed Pea operations then in effect which are
imposed by Franchisor upon its franchisees on a system wide basis and for no
other purposes. Except as set forth below, Lessee will at all times during the
Lease Term keep the Equipment on the Premises in which it is now located. Lessee
shall not move the Equipment to an alternative location during the Lease Term
without Lessor's prior written consent which consent shall not be unreasonably
withheld.
14. COMPLIANCE WITH LAWS.
A. Lessee's use of the Equipment, and the condition thereof,
shall, at Lessee's sole cost and expense, comply in all material
respects with all applicable statutes, regulations, rules, ordinances,
codes, licenses, permits, orders and
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approvals of any governmental agencies, departments, commissions,
bureaus, boards or instrumentalities of the United States, the state in
which the Premises at or on which the Equipment is located are located
and all political subdivisions thereof.
B. Lessee will not permit any act or condition to exist with
respect to the Equipment which will materially increase any insurance
rate thereon, except when such acts are required or reasonable in the
normal course of its business and Lessee shall pay for such increase.
D. Without limiting the generality of the other provisions of
this Section, Lessee shall (i) comply with all Environmental Laws (as
defined below) applicable to the operation or use of the Equipment,
(ii) cause all other persons using the Equipment over whom Lessee has
control or the ability to control, to comply with all such
Environmental Laws, and (iii) obtain and renew all governmental
permits, licenses and authorizations required under any Environmental
Law, where the failure to so obtain and renew might reasonably be
expected to result in (a) a Material Adverse Effect, or (b) a material
adverse effect on the use operation or physical condition of the
Equipment located on or at any one or more of the parcels constituting
the Premises if such effect could reasonably be expected to materially
impair the ability of Lessee or Sublessee to conduct business
activities on or at any one or more of the parcels constituting the
Premises with respect to the operation of Black-eyed Pea restaurants.
Lessee covenants and agrees not to use, generate, release, manage,
treat, manufacture, store, or dispose of, on, under or about, or
transport to or from (any of the foregoing hereinafter a "Use") the
Premises any Hazardous Materials, other than De Minimis Amounts (as
such term is defined below). In the event Lessee breaches any of the
foregoing covenants, in addition to any and all other rights and
remedies of Lessor, Lessor at its option may either (i) require Lessee
to reasonably and as required by any applicable Environment Laws upon
demand analyze, remove, abate and/or otherwise remedy all such
Hazardous Materials using licensed contractors reasonably approved by
Lessor or (ii) after reasonable notice to Lessee, perform or cause to
be performed such analysis, removal, abatement and/or remedial work as
required by any applicable Environment Laws for and at the sole expense
of Lessee, except to the extent such matter was caused, by the gross
negligence or wilful misconduct of Lessor. For purposes of this
Section, (1) the term "Hazardous Materials" shall include but not be
limited to asbestos, urea formaldehyde, polychlorinated biphenyls, oil
petroleum products, pesticides, radioactive materials, hazardous
wastes, toxic substances and any other related or dangerous, toxic or
hazardous chemical, material or substance in a quantity or at a level
regulated by and defined as hazardous or as a pollutant or contaminant
in, or the use of or exposure to which is prohibited, limited, governed
or regulated by, any Environmental Law; (2) the term "De Minimis
Amounts" shall mean, with respect to any given level of Hazardous
Materials, that level or quantity of Hazardous Materials in any form or
combination of forms which (i) does not constitute a violation of any
Environmental Law and (ii) is customarily employed in, or associated
with,
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similar businesses located in the county in which the applicable
Premises is located, and (3) the term "Environmental Laws" shall mean
any federal, state or local statute, law, rule, regulation, ordinance,
code, policy or permit now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or Hazardous
Materials.
E. In addition to the other requirements of this Section,
Lessee shall, at all times throughout the Lease Term, comply with all
federal, state or local statutes, laws, rules, regulations, ordinances,
codes, now or hereafter in effect and in each case, as amended, and any
judicial order, consent, decree or judgment, applicable to (i) Lessee,
where the failure to so comply might reasonably be expected to result
in a Material Adverse Effect, and (ii) the Equipment, where the failure
to so comply might reasonably be expected to have a material adverse
effect on the use, operation or physical condition of the Equipment if
such effect could reasonably be expected to materially impair the
ability of Lessee or Sublessee to conduct business activities on or at
any one or more of the parcels constituting the Premises with respect
to the operation of Black-eyed Pea restaurants.
15. CONDITION OF EQUIPMENT; MAINTENANCE. Lessee hereby accepts the
Equipment "AS IS" and "WHERE IS," with no representation or warranty of Lessor
as to the condition thereof. The Equipment shall be kept in good, clean,
sanitary and working condition; and Lessee shall at all times at its own expense
(except as otherwise specifically provided in Subsection 18(d)(2)) maintain,
repair and replace, as necessary, the Equipment including all portions of the
Equipment.
16. WASTE; ALTERATIONS. Lessee shall not commit or permit any actual or
constructive waste with respect to the Equipment. Any repairs, alterations or
other work at any time commenced by Lessee on the Equipment shall be prosecuted
diligently to completion, shall be of good workmanship and materials and shall
comply fully with all the terms of this Lease. Any addition to or alteration of
the Equipment shall be deemed a part of the Equipment and belong to Lessor at
the expiration of the Lease Term. Any equipment substituted for the Equipment
during the Lease Term shall be deemed a part of the Equipment and belong to
Lessor at the expiration of the Lease Term.
17. INDEMNIFICATION. Except for the gross negligence or willful
misconduct of Lessor and Lessor's shareholders, directors, officers, agents,
attorneys and employees, Lessee shall defend (with legal counsel reasonably
acceptable to Lessor), indemnify and hold harmless Lessor and Lessor's
shareholders, directors, officers, agents, attorneys and employees, from and
against any and all claims, demands, causes of action, suits, proceedings,
liabilities, damages (including consequential and punitive damages), losses,
costs and expenses, including attorneys' fees, caused by, incurred or resulting
from the use or operation of the Equipment by Lessee or its respective Sublessee
relating in any manner to the Equipment, whether relating to its 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
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any term or provision of this agreement by Lessee, its officers, employees,
agents or other persons, including, without limitation, Lessee's failure to
comply with its obligations under Section 14. It is expressly understood that
Lessee's obligations under this paragraph shall survive the expiration or
earlier termination of this Lease for any reason.
18. CONDEMNATION OR DESTRUCTION.
(a) In case of a taking of all or any part of the Equipment
located on or at any one or more of the parcels constituting the
Premises or the commencement of any proceedings or negotiations which
might result in a taking, 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 between Lessor, Lessee and those
authorized to exercise such right ("Taking"), Lessee will promptly give
written notice thereof to Lessor, generally describing the nature and
extent of such Taking and including copies of any lawsuits or notice
received in connection therewith.
(b) In case of a Taking of the whole of the Equipment located
upon any parcel described in Exhibit A attached hereto, with regard to
such parcel, other than temporary use ("Total Taking"), this Lease
shall terminate as of the date of such Total Taking as to the Equipment
located on or at that particular parcel, but this Lease shall remain in
force and effect relative to the remaining parcels constituting the
Premises, Lessor shall be entitled to the entire award for such Total
Taking and all rental and other sum or sums of money and other charges
provided to be paid by Lessee shall be paid, without any reduction of
rent or any other sum payable hereunder, and Lessor shall pay the
entire award in accordance with subsection 18(f). Total Taking with
regard to such parcel shall include a taking of substantially all the
Equipment if, in the reasonable determination of Lessor, the remainder
of the Equipment located on such parcel is not useable and cannot be
made useable for the purposes provided herein.
(c) In case of a temporary use of the whole or any part of the
Equipment located on or at any one or more of the parcels constituting
the Premises by a Taking, this Lease with regard to such parcel or
parcels shall remain in full force and effect without any reduction of
rent or any other sum payable hereunder. Lessee shall be entitled to
the entire award for such 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 use or occupation of the Equipment, Lessee
will, at its own cost and expense, promptly commence and complete the
restoration of the Equipment. Lessee shall not be required to make the
restoration if the term of this Lease shall expire prior to, or within
one year after, the date of termination of the temporary use so taken,
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 the Equipment at the expiration of such temporary taking.
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(d) (1) In the event of a Taking of less than all of the
Equipment with regard to any parcel described in Exhibit A attached
hereto, other than a temporary use ("Partial Taking") or of damage or
destruction to all or any part of the Equipment with regard to such
parcel, all awards, compensation or damages shall be paid to Lessor,
Lessor shall pay the awards, compensation or damages in accordance with
subsection 18(f), and Lessor shall have the option to terminate this
Lease with regard to such parcel by notifying Lessee in writing within
60 days after Lessee gives Lessor notice of such damage or destruction
or that title has vested in the taking authority, provided that this
Lease shall remain in force and effect as to the Equipment located on
or at the remaining parcels constituting the Premises. Lessee shall
thereupon have a period of 60 days in which to elect in writing to
continue this Lease with regard to such parcel on the terms herein
provided. If Lessee does not elect to continue this Lease with regard
to such parcel or shall fail during such 60-day period to elect to
continue this Lease with respect to such parcel, then this Lease shall
terminate with regard to such parcel as of the last day of the month
during which such period expired, but shall remain in force and effect
as to the Equipment located on or at the remaining parcels constituting
the Premises. Lessee shall then immediately deliver the Equipment to
Lessor, all obligations of either party hereunder with regard to such
parcel shall cease as of the date of termination and Lessor may retain
all such awards, compensation or damages, without any reduction of rent
or any other sum payable hereunder and all such awards, compensation
and damages shall be paid in accordance with subsection 18(f). If
Lessor does not elect to so terminate this Lease, or if Lessor so
elects but Lessee elects to continue this Lease, then this Lease shall
continue on the following terms: Rental and other sums due under this
Lease shall continue unabated, and Lessee shall promptly commence and
diligently prosecute restoration of the Equipment to the same
condition, as nearly as practicable, as prior to such partial
condemnation, damage or destruction as approved by Lessor in its sole
discretion.
(2) Lessor shall promptly make available in
installments as restoration progresses an amount equal to any award,
compensation or damages received by Lessor, upon written 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 there are no mechanics' or similar liens for
labor and materials theretofore supplied in connection with the
restoration. Lessor shall be entitled to keep any portion of such
award, compensation or damages which may be in excess of the cost of
restoration, and all such awards, compensation and damages shall be
paid in accordance with subsection 18(f), and Lessee shall bear all
additional costs, fees and expenses of such restoration in excess of
the amount of any such award, compensation or damages.
(e) Notwithstanding the foregoing, if at the time of any
Taking or at any time thereafter Lessee shall be in default under this
Lease and such default shall 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
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Lessee's claim, if any, for an award on account of any Taking and to
collect such award and apply the same, after deducting all costs, fees
and expenses incident to the collection thereof, to the curing of such
default and any other then existing default under this Lease.
(f) If Lessor receives any damages, destruction or
condemnation awards pursuant to this Section relating to the damage,
destruction or taking of any of the Equipment located on or at any one
or more of the parcels constituting the Premises, Lessor shall
immediately pay all of such award and proceeds to FFCA to reduce the
outstanding principal balance of the Note, without any reamortization
of the Note, provided that if any default shall have occurred under any
of the Loan Operative Documents, all such awards and proceeds shall be
applied to the obligations evidenced by the Note and the other Loan
Operative Documents as FFCA shall determine.
19. INSPECTION. Lessor and its authorized representatives shall have
the right, upon giving reasonable notice, to enter the Premises, or any portion
thereof, and inspect the Equipment and make photographic or other evidence
concerning Lessee's compliance with the terms of this Lease.
20. DEFAULT AND REMEDIES. A. Each of the following shall be deemed a
breach of this Lease and a default by Lessee:
(i) If any material representation or warranty of
Lessee herein was false when made, or in the event that any
such representation or warranty is continuing and becomes
false at any time, or if Lessee renders any false statement or
account;
(ii) If any rent or other monetary sums due hereunder
remain unpaid for 10 calendar days after written notice
thereof to Lessee;
(iii) 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 a petition under the Code or an Action (or if
involuntary, such petition is not dismissed within 120 days
thereafter, or is not generally paying its debts as the same
become due;
(iv) If Lessee fails to observe or perform any of the
covenants, conditions or obligations of this Lease.
B. If any default occurs pursuant to subsection A.(ii) above
and such default is not cured within the 10-day period after notice of
such default is given
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as required by subsection A.(ii), then such default shall constitute a
default hereunder and Lessor shall be entitled to exercise its remedies
set forth in subsection D. below.
C. If any such breach or default does not involve the payment
of any rental or other monetary sum, does not place any rights or
property of Lessor in immediate jeopardy, and is within the reasonable
power of Lessee to cure within 30 days after receipt of notice thereof,
all as determined by Lessor in its reasonable discretion, then such
event shall not constitute a default hereunder, 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 or cure such
event, upon failure of which a default shall be deemed to have occurred
hereunder without further notice or demand of any kind. If such breach
or default cannot reasonably be cured within the 30-day period, as
determined by Lessor in its reasonable discretion, and Lessee is
diligently pursuing a cure of such breach or default, then the event
giving rise to such default shall not constitute a default hereunder
unless and until a reasonable period of time (not to exceed 120 days
after Lessor's notice to Lessee described above in this subsection C.)
shall have elapsed without such default being cured.
D. As a material inducement to Lessor executing this Lease, in
the event of any breach or default, and with or without any notice or
demand except the notice prior to default required under certain
circumstances by subsections B. and C. above or such other notice as
may be required by law 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:
(i) To terminate this Lease whereupon Lessee's right
to possession of the Equipment shall cease and this Lease,
except as to Lessee's liability, shall be terminated;
(ii) To enter the Premises (or any parcel
constituting the Premises) and take possession of the
Equipment or any part thereof (which repossession shall not
operate to terminate this Lease unless Lessor expressly so
elects) and to dispose thereof in accordance with laws
prevailing at the time and place of such seizure or to remove
all or any portion of the Equipment and cause the same to be
stored in a public warehouse or elsewhere at the cost of
Lessee;
(iii) To relet the Equipment or any part thereof for
such term or terms (including a term which extends beyond the
original term of this Lease), at such rentals and upon such
other terms as Lessor, in is sole discretion, may determine,
with all proceeds received from such reletting being applied
to the rentals and other sums due from Lessee in such order as
Lessor may, in its sole
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discretion, determine, with Lessee remaining liable for any
deficiency;
(iv) To recover from Lessee an amount equal to the
difference between the rentals and such other sums (including
all sums required to be paid by Lessee, such as taxes and
insurance) to be received from the date of such breach to the
expiration of the original term hereof and the reasonable long
term rental value of the Equipment for the same period;
(v) To recover from Lessee all expenses, including
attorneys' fees, court costs, expert witness fees, costs of
tests and analysis, 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 whether or not legal proceedings are actually
commenced;
(vi) To accelerate and recover from Lessee all rent
and other monetary sums due and owing and scheduled to become
due and owing under this Lease both before and after the date
of such breach for the entire original scheduled term of this
Lease taking into account the present value thereof based upon
a discount rate as may be determined to be reasonable by a
court of competent jurisdiction, provided that Lessor agrees
to use good faith efforts to mitigate Lessor's damages;
(vii) To immediately or at any time thereafter, and
without notice, except as required herein, correct such breach
or default without, however, curing the same for the account
and at the expense of the Lessee. Any sum or sums so paid by
Lessor, together with interest at the then existing maximum
legal rate, but not higher than 15% per annum, and all costs
and damages, shall be deemed to be additional rent 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;
(viii) 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; and/or
(ix) To enforce, and Lessee does hereby consent to
such enforcement, notwithstanding the laws of the State to the
contrary, all of Lessor's self-help remedies available at law
or in equity
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without Lessor resorting to any legal or judicial process,
procedure or action.
Upon the occurrence of a default hereunder by Lessee, Lessee shall, upon request
by Lessor, assemble all of the Equipment and, at Lessee's sole cost, deliver all
such Equipment to Lessor at a place and location selected by Lessor or make the
Equipment available to Lessor and its designees. Lessee shall cooperate with
Lessor in all manners in assembling, delivering and making the Equipment
available to Lessor and shall bear the risk of damage, destruction, theft or
vandalism with respect to the Equipment.
21. SUBORDINATION. Lessor's interest in this Lease and the Equipment
shall not be subordinate to any liens or encumbrances placed upon the Equipment
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
Equipment free from any liens for work performed, materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, CHATTEL MORTGAGE, SECURITY
INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF THE EQUIPMENT OR
LESSEE'S LEASEHOLD INTEREST THEREIN (EXCEPT THAT LESSEE MAY GRANT TO BANQUE
PARIBAS, AS AGENT, A SECURITY INTEREST, IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO LESSOR AND FFCA, AGAINST LESSEE'S INTEREST UNDER THIS LEASE,
INCLUDING THE OPTION TO PURCHASE GRANTED PURSUANT TO SECTION 39), AND ANY SUCH
PURPORTED TRANSACTION SHALL BE VOID.
This Lease at all times shall automatically be subordinate to the lien
of any and all security agreements now or hereafter placed upon the Equipment by
Lessor, and Lessee covenants and agrees to execute and deliver, upon demand,
such further instruments subordinating this Lease to the lien of any or all such
security agreements as shall reasonably be desired by Lessor, or any present or
proposed mortgagees or upon the condition that Lessee shall have the right to
remain in possession of the Equipment under the terms of this Lease,
notwithstanding any default in any or all such security agreements, or after
foreclosure thereof, so long as Lessee is not in default under any of the
covenants, conditions and agreements contained in this Lease.
If the holder of any security interest in the Equipment elects to have
this Lease and the interest of Lessee hereunder be superior to any such interest
or right 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
chattel mortgage, security agreement, or security interest, whether this Lease
was executed before or after such chattel mortgage, security agreement, or
security interest, and in that event such chattel mortgagee, receiver 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 the chattel
mortgage or security agreement and has been assigned to such chattel mortgagee
or 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 reasonably required for
such purposes, and in the event Lessee
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fails so to do within 10 days after demand, Lessee does hereby make, constitute
and irrevocably appoint Lessor as its agent and attorney-in-fact and in its
name, place and stead so to do, which appointment shall be deemed coupled with
an interest.
In the event the holder of any security interest or purchaser at a
foreclosure sale acquires title to the Equipment pursuant to the exercise of any
remedy provided for in the security agreement or otherwise, Lessee shall attorn
to such purchaser and recognize such purchaser as Lessor under this Lease, which
shall continue in full force and effect as a direct lease between such purchaser
and Lessee. The foregoing provision shall be self-operative and effective
without the execution of any further instruments.
Lessee shall give written notice to any lender of Lessor having a
properly perfected security interest in the Equipment of any breach or default
by Lessor of any of its obligations under this Lease and 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 reasonably request.
22. ESTOPPEL CERTIFICATE. At any time, and from time to time, Lessee
and Lessor agree to promptly and in no event later than 10 days after a request
in writing from the other, execute, acknowledge and deliver to the other a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that the same is in full force
and effect as modified and stating the modifications) and the dates to which the
rental and other charges have been paid.
23. ASSIGNMENT AND SUCCESSORS. Lessor shall not sell or convey the
Equipment subject to this Lease or to assign its right, title and interest as
Lessor under this Lease in whole or in part without the prior written consent of
FFCA, and provided such sale is carried out in a commercially reasonable manner
for full and fair value. In the event of any such sale or assignment, Lessee
shall attorn to each purchaser or assignee and Lessor shall be relieved, from
and after the date of such transfer or conveyances of liability for the
performance of any obligation of Lessor contained herein, except for obligations
or liabilities accrued prior to such assignment or sale. All proceeds received
by Lessor from a sale of the Equipment shall either (a) be paid by Lessor to
FFCA to reduce the outstanding obligations under the Note, or (b) be used by
Lessor to purchase Equipment which replaces that which was sold. All proceeds
from the sale of Lessor's interest in this Lease shall be paid to reduce the
outstanding obligations under the Note. If FFCA succeeds to the rights of Lessor
under this Lease, whether by assignment of this Lease, acquisition of the stock
of Lessor or by merger, FFCA shall have no liability for any breach of Lessor's
representations or warranties hereunder or for any covenants or actions of
Lessor undertaken or given prior to the date that FFCA succeeds to the rights of
Lessor pursuant to or in connection with this Lease Agreement.
Lessee shall not assign, transfer, convey, pledge or encumber this
Lease or any interest therein, whether by operation of law or otherwise, or
assign transfer, convey, pledge or encumber any interest in Lessee, whether by
operation of law or otherwise or sublet all or any part of the Equipment without
the prior written consent of Lessor which, consent shall not be
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unreasonably withheld, provided that Lessee shall have the right to sublet all
or a portion of the Equipment to Sublessee pursuant to the Subleases. Lessor may
withhold or condition such consent upon such matters as Lessor may in its
reasonable discretion determine, including without limitation the experience and
creditworthiness of the assignee, the assumption by the assignee of all of
Lessee's obligations hereunder by undertakings enforceable by Lessor, the
payment to Lessor of any rentals owing under a sublease which are in excess of
the rentals owing hereunder, the transfer to such assignee of all necessary
licenses and franchises to continue use of the Equipment for the purposes herein
provided, receipt of such representations and warranties from such 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. No such
assignment or subletting shall relieve the original Lessee, any prior assignee
or any guarantor of their obligations respecting this Lease. Any purported
transfer, conveyance or pledge in violation of this paragraph shall be voidable
at the sole option of Lessor.
24. 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, (c) the next business
day, if delivered by express overnight delivery service, or (d) the third
business day following the day of deposit of such notice with the United States
Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
If to Lessee: Mr. Todd S. Brown
DenAmerica Corp.
7373 North Scottsdale Road
Scottsdale, Arizona 85253
Telephone: (602) 483-7055
Telecopy: (602) 483-9592
With a copy to: Jeffrey H. Verbin, Esq.
O'Connor Cavanagh
One East Camelback Road
Suite 1100
Phoenix, Arizona 85012
Telephone: (602) 263-2728
Telecopy: (602) 263-2900
If to Lessor: Mr. William J. Howard
LH Leasing Company, Inc.
7373 North Scottsdale Road
Scottsdale, Arizona 85253
Telephone: (602) 483-7055
Telecopy: (602) 483-9592
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With a copy to: Dennis L. Ruben, Esq.
Senior Vice President and General Counsel
FFCA Acquisition Corporation
17207 North Perimeter Drive
Scottsdale, Arizona 85255
Telephone: (602) 585-4500
Telecopy: (602) 585-2226
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.
25. HOLDING OVER. If Lessee fails to deliver the Equipment to Lessor
after the expiration of the term hereof, Lessee, at Lessor's option and within
Lessor's sole discretion, may be deemed a Lessee on a month-to-month basis and
shall continue to pay rentals and other sums in the amounts herein provided,
except that the Monthly Rental shall be automatically increased to one-hundred
and twenty-five percent (125%) of the Monthly Rental then in effect and to
comply with all the terms of this Lease; provided 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 Lessor harmless from and
against any and all claims, losses and liabilities from damages resulting from
Lessee's failure to deliver the Equipment to Lessor upon the expiration of the
Lease Term, including, without limitation, any clams made by any succeeding
lessee.
26. 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.
27. NO JOINT VENTURE OR PARTNERSHIP. No provision of this Lease shall
be deemed or construed to create a partnership between Lessor and Lessee to make
them joint venturers, or to make Lessor in any way responsible for the debts or
losses of Lessee.
28. 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.
29. 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.
30. CHARACTERIZATION. This Lease is a commercial lease between
entrepreneurs which has been entered into by both parties in reliance upon the
economic and legal bargains contained herein. 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. Lessee hereby acknowledges that this Lease
is a
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"true lease" and is not a financing lease, equitable chattel mortgage, chattel
mortgage, security interest or other financing arrangement and Lessee waives any
claim or defense based upon the characterization of this Lease as anything other
than a true lease.
31. OTHER DOCUMENTS. Each of the parties agrees to sign such other and
further documents as may be appropriate to carry out the intentions expressed in
this Lease.
32. 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. References in this Lease to attorneys' fees and/or costs shall mean
the fees and costs of independent counsel retained with respect to the matter.
33. 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.
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. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fore or other 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.
36. 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.
37. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original.
38. FFCA AS THIRD PARTY BENEFICIARY. Lessor and Lessee expressly intend
for FFCA to be an intended third party beneficiary of this Lease.
39. OPTION TO PURCHASE EQUIPMENT. After such time as all of the
obligations evidenced by the Note and the other Loan Operative Documents shall
have been paid and satisfied in full, Lessee shall have the option to purchase
the Equipment for its fair market value, which fair market value shall be
determined in the manner set forth below, at the expiration of the Lease Term.
Lessee shall notify Lessor in writing no later than 45 days prior to the
expiration of the Lease Term of Lessee's exercise of the option to purchase. The
consummation of the purchase of the Equipment by Lessee must occur no later than
the last day of the Lease Term (the "Purchase Period"). After Lessee notifies
Lessor of Lessee's election to purchase the Equipment, Lessor shall, at Lessee's
sole expense, retain an independent appraiser to prepare
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an appraisal of the fair market value of the Equipment. At or before the
consummation of the purchase of the Equipment, Lessor shall deliver to Lessee
its special warranty bill of sale transferring to Lessee all of Lessor's right,
title and interest in the Equipment free and clear of all liens and encumbrances
except liens for taxes and assessments and any liens which are attached to the
Equipment during the Lease Term through Lessee's action or inaction, and any
liens which have been granted by Lessor in lieu of a taking by the power of
eminent domain or the like, or which have been approved by Lessee. In the event
Lessor is unable to transfer title as required, Lessee shall have the right to
accept such title as Lessor can convey or elect not to consummate its exercise
of the option, in which case the option for such time period shall lapse and
this Lease shall terminate; provided, however, that Lessor shall remove any
monetary lien or encumbrance against the Equipment created by Lessor. Both
Lessor and Lessee agree to execute a purchase agreement and such other
instruments as may be necessary or appropriate to consummate the sale of the
Equipment in the manner herein provided. All cost of exercise of the option,
including, but not limited to, filing or recording costs or fees, reasonable
attorneys' fees (including those of Lessor), appraisal fees, stamp taxes and
transfer fees shall be borne by Lessee. Lessee shall continue to pay and perform
all of its obligations under this Lease until the consummation of the purchase
of the Equipment which in no event shall occur after the date of the expiration
of the Lease Term. The purchase price paid by Lessee in exercising this option
shall be paid to Lessor or to such person or entity as Lessor may direct at the
time of Lessor's delivery of the special warranty bill of sale in immediately
available funds.
In the event Lessor fails to perform its duties and obligations under
this Section within thirty (30) days after receiving notice from Lessee to so
perform, and provided Lessee shall have performed its duties and obligations
hereunder, Lessee shall be entitled to exercise any remedies available to Lessee
at law or in equity against Lessor arising out of Lessor's failure to so
perform, including the right to seek specific performance of Lessor's
obligations under this Section. The consummation of the purchase of the
Equipment shall close within the Purchase Period, but may be extended for a
reasonable period of time to permit Lessor to cure title defects or to permit
either party to cure any other defects or defaults provided each party is
diligently seeking to cure such defect or default and Lessee continues to
perform its obligation hereunder.
Except as otherwise specifically provided in Section 21, Lessee may not
sell, assign, transfer, hypothecate or otherwise dispose of the option granted
herein or any interest therein, except in conjunction with a permitted
assignment of Lessee's entire interest herein and then only to the assignee
thereof. Any attempted assignment of this option which is contrary to the terms
of this paragraph shall be deemed to be a default under this Lease and the
option granted herein shall be void. Notwithstanding the foregoing, Lessee shall
have the right to designate the person or entity to whom title to the Equipment
will be transferred pursuant to Lessor's special warranty bill of sale.
40. 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, Lessee shall have the right to the
quiet use and enjoyment of the Equipment.
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IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as
of the date first above written.
LESSOR:
LH LEASING COMPANY, INC., an Arizona
corporation
By:_________________________________________
Printed Name:_______________________________
Its:________________________________________
LESSEE:
DENAMERICA CORP., a Georgia corporation
By:_________________________________________
Printed Name: Todd S. Brown
Its: Vice President
Witness
In accordance with the requirements of Arizona Revised Statutes Section
14-5503, the undersigned has executed this Lease solely for the purpose of
witnessing the grant of the powers of attorney by Lessee to Lessor, as described
in this Lease.
___________________________
Printed Name of Witness
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STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July ___, 1996,
by _____________________________________, the ______________________________ of
LH LEASING COMPANY, INC., an Arizona corporation, on behalf of the corporation.
___________________________
Notary Public
My commission expires:
STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on July ___, 1996,
by TODD S. BROWN, the Vice President of DENAMERICA CORP., a Georgia corporation,
on behalf of the corporation.
___________________________
Notary Public
My commission expires:
_______________________
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