EXHIBIT 10.9
LEASE PURCHASE
--------------------------------------------------------------------------------
LESSEE: XXXXXXXXX RESTAURANTS, INC. LESSOR: BANK OF AMERICA, N.A.
0000 X. XXXXXXXXXX XXXXX XX. X/X XX BUSINESS LOAN PROCESSING
SUITE 130 201 EAST WASHINGTON STREET
SCOTTSDALE, AZ 85058-2141 XXXXXXX, XX 00000
--------------------------------------------------------------------------------
DESCRIPTION OF COLLATERAL: PURCHASE MONEY SECURITY INTEREST IN ALL
INVENTORY, CHATTEL PAPER, ACCOUNTS, EQUIPMENT AND GENERAL INTANGIBLES; WHETHER
ANY OF THE FOREGOING IS OWNED NOW OR ACQUIRED LATER; ALL ACCESSIONS, ADDITIONS,
REPLACEMENTS, AND SUBSTITUTIONS RELATING TO ANY OF THE FOREGOING; ALL RECORDS OF
ANY KIND RELATING TO ANY OF THE FOREGOING; ALL PROCEEDS RELATING TO ANY OF THE
FOREGOING (INCLUDING INSURANCE, GENERAL INTANGIBLES AND OTHER ACCOUNTS PROCEEDS)
TOTAL AMOUNT FINANCED: $850,000.00
TERMS OF RENTAL PAYMENTS: NUMBER OF PAYMENTS: 60
MONTHLY PAYMENT: $16,890,54
FIRST MONTHLY PAYMENT IS PAYABLE ON NOVEMBER 27, 2001 AND THEREAFTER ON
THE SAME DAY OF EACH CONSECUTIVE MONTH.
THIS LEASE PURCHASE (the "Lease") is entered into between XXXXXXXXX RESTAURANTS,
INC., (the "Lessee") and Bank of America, N.A. (the "Lessor") dated as of the
date set forth below.
Lessee wishes to purchase certain equipment and has requested that Lessor
provide the financing for such equipment pursuant to the terms of this Lease. In
consideration of the foregoing and other valuable consideration, Lessor and
Lessee agree as follows:
LEASE. Lessor and Lessee agree that Lessor will finance pursuant to the
provisions of this Lease the equipment described herein (the items of equipment
subject hereto, together with all attachments, accessions, accessories, parts,
and additions to and all replacements of and substitutions for such equipment,
whether now owned or hereafter acquired, whether now existing or hereafter
arising, individually and collectively called the "Equipment").
TERM. Subject to the conditions stated herein, the term of this Lease (the
"Term") for the Equipment financed pursuant to this Lease shall commence on the
later of (a) the date of this Lease, or (b) the date of delivery of the
Equipment, but in no event later than the date set forth above for first monthly
payment.
PAYMENTS. Lessee agrees to pay the total amount of payments (the "Payments") for
the financing of the Equipment in the amounts and at the times which are
indicated herein, plus such additional amounts as may be provided herein.
Payments shall be made as indicated herein, at the address of Lessor stated
above or as otherwise provided to Lessee in writing. Lessee agrees
that Lessor shall have the right to satisfy any Payments due under this Lease by
directly charging any account of Lessee with Lessor or with any affiliate bank
of Lessor.
NO ABATEMENT OF PAYMENTS. There will be no abatement or reduction of Payments by
Lessee for any reason, including but not limited to, any defense, recoupment,
setoff, counterclaim, or any claim arising out of or related to any defects,
damages, malfunctions, breakdowns, infirmities, losses or thefts of the
Equipment. Lessee assumes and shall bear the entire risk of loss and damage to
the Equipment from any cause whatsoever, it being the intention of the parties
that the Payments and any other sums required to be paid to Lessor hereunder
shall be paid ,in all events unless the obligation of Lessee to make Payments is
terminated as otherwise provided herein.
PREPAYMENT. Lessee may pay without penalty all or a portion of the amount owed
earlier than it is due. Early Payments will not, unless agreed to by Lessor in
writing, relieve Lessee of Lessee's obligation to continue to make Payments
under the payment schedule. Rather, they will reduce the principal balance due
and may result in Lessee making fewer Payments.
EARLY TERMINATION. Lessor reserves the right, if requested by Lessee to remove
an item of Equipment from this Lease, to require that all Payments due under the
Lease be paid in full (less such amount as is attributable to the unearned
interest component of such Payments based upon a simple interest accrual method,
and the rate implicit in the Payments, as determined by Lessor in its
discretion) whereupon the Lessor will release its interest in all of the
Equipment subject to this Lease. Should Lessor consent to Lessee's request to
remove an item of Equipment from this Lease and not require payment in full, and
provided that no Event of Default has occurred, Lessee may do so upon payment of
the remaining Payments for such item of Equipment less such amount as is
attributable to the unearned interest component of such Payments based upon a
simple interest accrual method, and the rate implicit in the Payments, as
determined by Lessor in its discretion. Upon such payment, Lessor will release
its interest in the respective item of Equipment and the item of Equipment shall
no longer be subject to this Lease.
LATE CHARGES. Should Lessee fail to pay any part of the Payments or any other
sum required to be paid to Lessor hereunder, within 15 DAYS AFTER THE DUE DATE
THEREOF, LESSEE SHALL PAY A LATE PAYMENT CHARGE EQUAL TO 4.00% OF THE DELINQUENT
PAYMENT.
SECURITY INTEREST. Notwithstanding that this instrument is referred to as a
"Lease", Lessee will at all times hold title to the Equipment during the Term.
Lessor and Lessee acknowledge this instrument is a lease intended as security
and is not intended to constitute a lease for tax or accounting purposes. Use
of the term "Lease" in the title of this instrument is solely for the
convenience of the parties hereto. Lessee hereby grants to Lessor a security
interest in the Equipment, whether now or hereafter covered by this Lease,
together with all of the following, whether now owned or hereafter acquired,
whether now existing or hereafter arising, and wherever located:
(a) The Equipment.
(b) All documents covering the Equipment and all accounts, contract
rights, general intangibles, instruments, rents, monies, payments, and all
other rights, arising out of a sale, lease, or other disposition of the
Equipment.
(c) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of the Equipment.
(d) All records and data relating to the Equipment, whether in the
form of a writing, photograph, microfilm, microfiche, or electronic media,
together with all of Lessee's right, title, and interest in and to all computer
software required to utilize, create, maintain, and process any such records or
data on electronic media.
The security interest granted herein shall secure all indebtedness and
obligations of Lessee to Lessor under this Lease, whether for Payments in
respect of the same Equipment, Payments in respect of other Equipment, costs or
expenses, or otherwise.
OBLIGATIONS OF LESSEE. Lessee warrants and covenants to Lessor as follows:
ORGANIZATION. Lessee is a corporation which is duly organized,
validly existing, and in good standing under the laws of the state of
Lessee's organization. Lessee has its chief executive office at the
address specified at the beginning of this Lease. Lessee will notify
Lessor of any change in the location of Lessee's chief executive
office.
PERFECTION OF SECURITY INTEREST. Lessee agrees to execute such
financing statements, notices of lien, and powers of attorney, and to
take whatever other actions are requested by Lessor to perfect and
continue Lessor's security interest in the Equipment, including the
delivery to Lessor of all certificates of title (showing Lessor as
legal owner or lienholder if required by law to perfect Lessor's
security interest in the item of Equipment) or manufacturer's
certificates of origin. Lessee hereby irrevocably appoints Lessor as
its attorney-in-fact for the purpose of executing any documents
necessary to perfect or to continue the security interest granted in
this Lease or pursuant hereto, or to more specifically identify the
Equipment so as to ensure the validity and perfection of such
security interest. Lessor may at any time, and without further
authorization from Lessee, file a carbon, photographic or other
reproduction of any financing statement or of this Lease for use as a
financing statement.
Lessee will reimburse Lessor for all expenses for the perfection and
the continuation of the perfection of Lessor's security interest in
the Equipment. Lessee promptly will notify Lessor of any change in
Lessee's name including any change to the assumed or fictitious
business names of Lessee.
REMOVAL OF EQUIPMENT. Lessee shall keep the Equipment at Lessee's
address shown above, or at such other locations as are acceptable to
Lessor. Lessee shall not remove the Equipment from its existing
locations without the prior written consent of Lessor. To the extent
that the Equipment consists of vehicles, or other titled property,
Lessee shall not take or permit any action which would require
application for certificates of title for any vehicle outside the
State of Nevada, without the prior written consent of Lessor.
TRANSACTIONS INVOLVING EQUIPMENT. Lessee shall not sell, lease, or
otherwise transfer or dispose of the Equipment. Lessee shall not
pledge, assign, sublease, mortgage, encumber or otherwise permit the
Equipment to be subject to any lien, security interest, encumbrance,
or charge, other than the security interest provided for in this
Lease, without the prior written consent of Lessor. This includes
security interests even if junior in right to the security interests
granted under this Lease. Unless waived by Lessor, all proceeds from
any disposition of the Equipment (for whatever reason) shall be held
in trust for Lessor and shall not be commingled with any other funds;
provided however, this requirement shall not constitute consent by
Lessor to any sale or other disposition. Upon receipt, Lessee shall
immediately deliver any such proceeds to Lessor.
TITLE. Lessee represents and warrants to Lessor that it holds good
and marketable title to the Equipment, free and clear of all liens
and encumbrances except for the lien of this Lease. No financing
statement covering any of the Equipment is on file in any public
office other than those which reflect the security interest created
by this Lease. Lessee agrees to protect and defend Lessor's rights in
the Equipment against the claims and demands of all other persons.
MAINTENANCE AND INSPECTION OF EQUIPMENT. Lessee shall maintain all
Equipment in good condition and repair. Lessee will not commit or
permit damage to or destruction of the Equipment or any part of the
Equipment. Lessor and its designated representatives and agents shall
have the right at all times to examine, inspect, and audit the
Equipment wherever located. Lessee shall immediately notify Lessor of
all cases involving the repossession, loss or damage of or to any
Equipment; of any dispute arising with respect to the Equipment; and
generally of all events affecting the Equipment or the value thereof.
PERSONAL PROPERTY. The Equipment is, and shall at all times be and
remain, personal property notwithstanding that the Equipment or any
part thereof may now be, or hereafter become, in any manner affixed or
attached to real property or any building thereon. Upon request of
Lessor, Lessee shall obtain, as to any place where the Equipment is
located, a waiver from the landlord and mortgagee thereof with respect
to any rights they may have in and to the Equipment or the rights of
levy or seizure thereon.
2
TAXES, ASSESSMENTS AND LIENS. Lessee will pay when due all taxes,
assessments and liens upon the Equipment, its use or operation, or upon
this Lease. Lessee may withhold any such payment or may elect to
contest any lien if Lessee is in good faith conducting an appropriate
proceeding to contest the obligation to pay and so long as Lessor's
interest in the Equipment is not, in Lessor's sole opinion, thereby
jeopardized. If the Equipment is subjected to a lien which is not
discharged within fifteen (15) days, Lessee shall deposit with Lessor
cash, a sufficient corporate surety bond or other security satisfactory
to Lessor in an amount adequate to provide for the discharge of the
lien plus any interest, costs or other charges that could accrue as a
result of foreclosure or sale of the Equipment. In any contest Lessee
shall defend itself and Lessor and shall satisfy any final adverse
judgment before enforcement against the Equipment. Lessee shall name
Lessor as an additional obligee under any surety bond furnished in the
contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Lessee shall comply promptly
with all laws, ordinances and regulations of all governmental
authorities applicable to the Equipment. Lessee may contest in good
faith any such law, ordinance or regulation and withhold compliance
during any proceeding, including appropriate appeals, so long as
Lessor's interest in the Equipment, in Lessor's opinion, is not
jeopardized.
MAINTENANCE OF CASUALTY INSURANCE. Lessee shall procure and maintain
all risks insurance, including without limitation fire, theft and
liability coverage together with such other insurance as Lessor may
require with respect to the Equipment, in form, amounts, coverages and
basis reasonably acceptable to Lessor and issued by a company or
companies reasonably acceptable to Lessor. Lessee, upon request of
Lessor, will deliver to Lessor from time to time the policies or
certificates of insurance in form satisfactory to Lessor, including
stipulations that coverages will not be cancelled or diminished without
at least thirty (30) days prior written notice to Lessor and not
including any disclaimer of the insurer's liability for failure to give
such a notice. In connection with all policies covering Equipment
Lessee will provide Lessor with such loss payable or other endorsements
as Lessor may require. If Lessee at any time fails to obtain or
maintain any insurance as required under this Lease, Lessor may (but
shall not be obligated to) obtain such insurance as Lessor deems
appropriate, including if it so chooses "single interest insurance,"
which will cover only Lessor's interest in the Equipment.
APPLICATION OF INSURANCE PROCEEDS. Lessee shall promptly notify Lessor
of any loss or damage to the Equipment. Lessor may present proof of
loss to Lessee's insurer if Lessee fails to do so within fifteen (15)
days of the casualty. All proceeds of any insurance on the Equipment,
including accrued interest thereon, shall be held by Lessor as part of
the security for the indebtedness. If Lessor consents to repair or
replacement of the damaged or destroyed Equipment, Lessor shall, upon
satisfactory proof of expenditure, pay or reimburse Lessee from the
proceeds for the reasonable cost of repair or restoration. If Lessor
does not consent to repair or replacement of the Equipment, Lessor
shall retain a sufficient amount of the proceeds to pay the remaining
Payments due under this Lease less such amount as is attributable to
the unearned interest component of such Payments based upon a simple
interest accrual method, and the rate implicit in the Payments, as
determined by Lessor in its discretion, and shall pay the balance, if
any, to Lessee. Any
3
proceeds which have been disbursed within six (6) months after their
receipt and which Lessee has not committed to the repair or restoration
of the Equipment shall be used to pay the indebtedness.
INSURANCE REPORTS. Lessee, upon request of Lessor, shall furnish to
Lessor reports on each existing policy of insurance showing such
information as Lessor may reasonably request including the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the property insured; (e) the then current value on the
basis of which insurance has been obtained and the manner of
determining that value; and (f) the expiration date of the policy. In
addition, Lessee shall at Lessee's cost and upon request by Lessor
(however not more often than annually) have an independent appraiser
satisfactory to Lessor determine, as applicable, the cash value or
replacement cost of the Equipment.
BUSINESS PURPOSES. The Equipment will be used solely for business or
commercial purposes.
SALE OF ASSETS. Lessee shall not convey, lease, sell, transfer or
assign all or substantially all of its assets, and shall not liquidate
or discontinue its normal operations with intent to liquidate, without
the prior written consent of Lessor.
LESSEE'S RIGHT TO POSSESSION. Until an Event of Default, Lessee may have
possession and beneficial use of all the Equipment and may use it in any lawful
manner not inconsistent with this Lease. If Lessor at any time has possession of
any Equipment, whether before or after an Event of Default, Lessor shall be
deemed to have exercised reasonable care in the custody and preservation of the
Equipment if Lessor takes such action for that purpose as Lessee shall request
or as Lessor, in Lessor's sole discretion, shall deem appropriate under the
circumstances, but failure to honor any request by Lessee shall not of itself be
deemed to be a failure to exercise reasonable care. Lessor shall not be required
to take any steps necessary to preserve any rights in the Equipment against
prior parties, nor to protect, preserve or maintain any security interest given
to secure the Equipment.
EXPENDITURES BY LESSOR. If not discharged or paid when due, Lessor may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Lessee under this Lease, including without limitation all
taxes, liens, security interests, encumbrances, and other claims, at any time
levied or placed on the Equipment. Lessor also may (but shall not be obligated
to) pay all costs for insuring, maintaining and preserving the Equipment. All
such expenditures incurred or paid by Lessor for such purposes will then bear
interest from the date incurred or paid by Lessor to the date of repayment by
Lessee at a rate equal to 1.5% per month, or the highest rate permitted by
applicable law, if less.
All such expenses shall become a part of the indebtedness hereunder and, at
Lessor's option, will (a) be payable on demand, (b) be apportioned among and be
payable with any Payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining Term of the Payments or (c) be
treated as a balloon payment which will be due and payable with the respective
final Payments. The security interests granted pursuant to this Lease also will
4
secure payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lessor may be entitled upon the occurrence of an
Event of Default.
RIGHT OF SETOFF. Lessee grants to Lessor a contractual possessory security
interest in, and hereby assigns, conveys; delivers, pledges, and transfers to
Lessor all Lessee's right, title and interest in and to, Lessee's accounts with
Lessor (whether checking, savings, or some other account), including without
limitation all accounts held jointly with someone else and all accounts Lessee
may open in the future, excluding however all XXX, Xxxxx, and trust accounts.
Lessee authorizes Lessor, to the extent permitted by applicable law, to charge
or setoff all sums owing on the indebtedness against any and all such accounts.
EVENTS OF DEFAULT. Each of the following shall constitute an event of default
(an "Event of Default") under this Lease:
DEFAULT ON INDEBTEDNESS. Failure of Lessee to make any Payment when
due.
OTHER INDEBTEDNESS. Failure of Lessee to make any payment when due of
any other indebtedness of Lessee to Lessor or to any affiliate of
Lessor.
OTHER DEFAULTS. Failure of Lessee to comply with or to perform any
other term, obligation, covenant or condition contained in this Lease
or in any other agreement between Lessor, or any affiliate of Lessor,
and Lessee, or Lessee dies or becomes incompetent.
FALSE STATEMENTS. Any warranty, representation, statement or report
made or furnished to Lessor by or on behalf of Lessee under this Lease
is false or misleading in any material respect, either now or at the
time made or furnished.
DEFECTIVE LEASE. This Lease ceases to be in full force and effect
(including failure to create a valid, first perfected security interest
or lien) at any time and for any reason.
INSOLVENCY. The dissolution or termination of Lessee's existence as a
going business, the insolvency of Lessee, the appointment of a receiver
for any part of Lessee's property, any assignment for the benefit of
creditors, or the commencement of any proceeding under any bankruptcy
or insolvency laws by or against Lessee.
CREDITOR PROCEEDINGS. Commencement of foreclosure proceedings, whether
by judicial proceeding, self-help, repossession or any other method, by
any creditor of Lessee or by any governmental agency against the
Equipment or any other collateral securing the indebtedness. This
includes a garnishment of any of Lessee's deposit accounts with Lessor.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any guarantor of any of the Payments or other indebtedness
hereunder or such guarantor dies or becomes incompetent.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Lease,
to the extent permitted by law, interest shall accrue on amounts owed hereunder
at such interest
5
rate as Lessor shall determine in its sole discretion, up to the maximum
interest rate allowed by law, or if none, 18% per annum. Also, if an Event of
Default occurs, at any time thereafter, Lessor shall have all the rights of a
secured party under the State of Uniform Commercial Code. In addition and
without limitation, Lessor may exercise any one or more of the following rights
and remedies:
ACCELERATE INDEBTEDNESS. Lessor may declare all Payments (less such
amount as is attributable to the unearned interest component of such
Payments based upon a simple interest accrual method, and the rate
implicit in the Payments, as determined by Lessor in its discretion),
and other indebtedness hereunder immediately due and payable, without
notice.
ASSEMBLE EQUIPMENT. Lessor may require Lessee to deliver to Lessor all
or any portion of the Equipment and any and all certificates of title
and other documents relating to the Equipment. Lessor may require
Lessee to assemble the Equipment and make it available to Lessor at a
place to be designated by Lessor. Lessor also shall have full power to
enter upon the property of Lessee to take possession of and remove the
Equipment. If the Equipment contains other goods not covered by this
Lease at the time of repossession, Lessee agrees Lessor may take such
other goods, provided that Lessor makes reasonable efforts to return
them to Lessee after repossession.
SELL THE EQUIPMENT. Lessor shall have the full power to sell, lease,
transfer, or otherwise deal with the Equipment or proceeds thereof in
its own name or that of Lessee. Lessor may sell the Equipment at public
auction or private sale. Unless the Equipment threatens to decline
speedily in value or is of a type customarily sold on a recognized
market, Lessor will give Lessee reasonable notice of the time after
which any private sale or any other intended disposition of the
Equipment is to be made. The requirements of reasonable notice shall be
met if such notice is given at least ten (10) days before the time of
the sale or disposition. All expenses relating to the disposition of
the Equipment, including without limitation the expenses of retaking,
holding, insuring, preparing for sale and selling the Equipment, shall
become a part of the indebtedness secured by this security interest
granted pursuant to this Lease and shall be payable on demand, with
such interest rate as Lessor shall determine in its sole discretion, up
to the maximum amount allowed by law, or if none, 18% per annum.
APPOINT RECEIVER. To the extent permitted by applicable law, Lessor
shall have the following rights and remedies regarding the appointment
of a receiver: (a) Lessor may have a receiver appointed as a matter of
right, (b) the receiver may be an employee of Lessor and may serve
without bond, and (c) all fees of the receiver shall become part of the
indebtedness secured by the security interest granted pursuant to the
Lease and shall be payable on demand, with such interest rate as Lessor
shall determine in its sole discretion, up to the maximum amount
allowed by law, or if none, 18% per annum.
OBTAIN DEFICIENCY. If Lessor chooses to sell any or all of the
Equipment, Lessor may obtain a judgment against Lessee and/or any
guarantor for any deficiency remaining on the indebtedness due to
Lessor after application of all amounts received from the exercise of
the rights provided in this Lease.
6
OTHER RIGHTS AND REMEDIES. Lessor shall have all the rights and
remedies of a secured creditor under the provisions of the Uniform
Commercial Code, as amended from time to time. In addition, Lessor
shall have and may exercise any or all other rights and remedies it may
have available at law, in equity, or otherwise.
CUMULATIVE REMEDIES. All of Lessor's rights and remedies, whether
evidenced by this Lease or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lessor to
pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an
obligation of Lessee, after Lessee's failure to perform, shall not
affect Lessor's right to declare an Event of Default and to exercise
its remedies.
INDEMNIFICATION. Lessee hereby agrees to indemnify, protect and save Lessor or
its assigns harmless from any and all liabilities, liens, obligations, losses,
claims, damages, actions, suits, proceedings, costs and expenses, including
attorneys' fees, imposed or incurred by or asserted against Lessor or its
assigns, arising out of, connected with, or resulting directly or indirectly
from the Equipment, including without limitation, the manufacture, purchase,
lease, possession, Operation, condition (including all defects whether or not
discoverable by either party hereto), delivery, selection, use, or return of the
Equipment, including but not limited to any of the foregoing giving rise to or
causing personal injury, environmental liability, property damage, or death, or
by operation of law. Lessee shall give Lessor or its assigns prompt written
notice of any matter hereby indemnified against and agrees that upon notice by
Lessor or its assigns of the assertion of such a claim, action, damage,
obligation, liability or lien, Lessee shall assume full responsibility for the
defense thereof. All of Lessor's rights and privileges arising from the
indemnities contained in this Lease shall survive the expiration or earlier
termination of this Lease, and such indemnities are expressly made for the
benefit of, and shall be enforceable by Lessor, its successors and assigns.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Lease.
AMENDMENTS. This Lease, together with any related documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Lease. No alteration of or amendment to
this Lease shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the alteration or
amendment.
APPLICABLE LAW. This Lease has been delivered to Lessor and accepted by
Lessor in the State of Nevada. This Lease shall be governed by and
construed in accordance with the laws of the State of Nevada.
CAPTION HEADINGS. Caption headings in this Lease are for convenience
purposes only and are not to be used to interpret or define the
provisions of this Lease.
COSTS AND EXPENSES. Lessee agrees to pay upon demand all of Lessor's
out-of-pocket expenses, including reasonable attorneys' fees, incurred
in connection with the preparation, execution, enforcement and
collection of this Lease or in connection with the
7
financing pursuant to this Lease. Lessor may pay someone else to help
collect the indebtedness and to enforce this Lease, and Lessee will pay
that amount. This includes, subject to any limits under applicable law,
Lessor's reasonable attorneys' fees and Lessor's legal expenses,
whether or not there is a lawsuit or an arbitration proceeding,
including reasonable attorneys' fees for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. Lessee also will pay any court costs, in addition to all
other sums provided by law.
NOTICES. All notices required to be given under this Lease shall be
given in writing, may be sent by telefacsimile (unless otherwise
required by law) and shall be effective when actually delivered or when
deposited with a nationally recognized overnight courier or deposited
in the United States mail, first class, postage prepaid, addressed to
the party to whom the notice is to be given at the address shown above.
Any party may change its address for notices under this Lease by giving
formal written notice to the other parties, specifying that the purpose
of the notice is to change the party's address. To the extent permitted
by applicable law, if there is more than one Lessee, notice to any
Lessee will constitute notice to all Lessees. For notice purposes,
Lessee agrees to keep Lessor informed at all times of Lessee's current
address(es).
POWER OF ATTORNEY. Lessee hereby appoints Lessor as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do
the following: (a) to demand, collect, receive, receipt for, xxx and
recover all sums of money or other property which may now or hereafter
become due, owing or payable from the Equipment or its proceeds; (b) to
execute, sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in respect of the Equipment or its
proceeds; (c) to settle or compromise any and all claims arising under
the Equipment, and, in the place and stead of Lessee, to execute and
deliver its release and settlement for the claim; and (d) to file any
claim or claims or to take any action or institute or take part in any
proceedings, either in its own name or in the name of Lessee, or
otherwise, which in the discretion of Lessor may seem to be necessary
or advisable. This power is given as security for the indebtedness, and
the authority hereby conferred is and shall be irrevocable and shall
remain in full force and effect until renounced by Lessor.
NO USURY. Notwithstanding anything to the contrary contained herein, in
no event shall Lessee be required to pay an amount that violates any
applicable usury or other law, and if any such limit is exceeded the
amount due shall be reduced to the maximum amount permitted by law.
SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Lease to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified, or it
shall be stricken and all other provisions of this Lease in all other
respects shall remain valid and enforceable.
8
SUCCESSOR INTERESTS. Subject to the limitations set forth above On
transfer of the Equipment, this Lease shall be binding upon and inure
to the benefit of the parties, their successors and assigns. Lessee
shall not, however, have the right to assign its rights or duties under
this Lease, or any other interest herein, without the prior written
consent of Lessor. Lessor may assign its rights under this Lease
without notice to or consent by Lessee.
TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Lease.
WAIVER. Lessor shall not be deemed to have waived any rights under this
Lease unless such waiver is given in writing and signed by Lessor. No
delay or omission on the part of Lessor in exercising any right shall
operate as a waiver of such right or any other right. A waiver by
Lessor of a provision of this Lease shall not prejudice or constitute a
waiver of Lessor's right otherwise to demand strict compliance with
that provision or any other provision of this Lease. No prior waiver by
Lessor, nor any course of dealing between Lessor and Lessee, shall
constitute a waiver of any of Lessor's rights or of any of Lessee's
obligations as to any future transactions.
DISCLAIMER OF WARRANTIES. Lessee acknowledges and agrees that it has
selected each item, type, quality, quantity and supplier of the
Equipment based upon its own judgment and disclaims any reliance upon
any statements or representations made by Lessor, and agrees that the
Equipment is of a design, size, quality, and capacity required by
Lessee and is suitable for its purpose. Lessee acknowledges that Lessor
is neither the manufacturer, distributor, seller, or owner of the
Equipment, and that Lessor has no knowledge or familiarity with it.
Lessee agrees to settle all claims, defenses, setoffs, and
counterclaims it may have with any manufacturer, distributor, seller,
or owner of the Equipment, and will not assert any thereof against
Lessor. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, AS TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OF THE EQUIPMENT OR ANY OTHER REPRESENTATION
OR WARRANTY WITH RESPECT TO THE EQUIPMENT, AND, AS TO LESSOR, LESSEE
LEASES THE EQUIPMENT AS IS.
NO FINANCE LEASE. Lessor and Lessee agree that this Lease is not a
"finance lease" under the Article of the Uniform Commercial Code that
governs personal property leases. Lessee waives any right (a) to cancel
or repudiate this Lease, (b) to reject or revoke acceptance of any item
of Equipment, and (c) to recover from Lessor any general or
consequential damages, for any reason whatsoever.
DISCLAIMER OF TAX TREATMENT. LESSEE ACKNOWLEDGES AND AGREES THAT THE
SOLE RESPONSIBILITY FOR DETERMINING THE PROPER TREATMENT OF THIS LEASE
FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES RESTS WITH THE LESSEE.
LESSOR MAKES NO REPRESENTATION AS TO THE PROPER TREATMENT OF THIS LEASE
FOR SUCH PURPOSES. LESSEE IS ADVISED TO CONSULT WITH ITS TAX ADVISOR
REGARDING SUCH TREATMENT.
9
JURISDICTION. Lessee and Lessor consent to jurisdiction and venue in
the state or federal courts in any county where Lessor maintains an
office.
ADDITIONAL PROVISION:
PRESENTATION OF ANNUAL TAX RETURNS OF BORROWER WITHIN 120 DAYS OF YEAR END.
ARBITRATION AND WAIVER OF JURY TRIAL. ANY CLAIM OR CONTROVERSY
("CLAIM") BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT OR TORT OR
BY STATUTE INCLUDING, BUT NOT LIMITED TO, CLAIMS RESULTING FROM OR
RELATING TO THIS LEASE SHALL, UPON THE REQUEST OF EITHER PARTY, BE
RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(TITLE 9, US CODE). ARBITRATION PROCEEDINGS WILL BE CONDUCTED IN
ACCORDANCE WITH THE RULES FOR ARBITRATION OF FINANCIAL SERVICES
DISPUTES OF J.A.M.S./ENDISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
ANY STATE WHERE REAL PROPERTY COLLATERAL FOR THIS LEASE OR THE BANK
OFFICE ORIGINATING THE CREDIT IS LOCATED. THE ARBITRATION HEARING SHALL
COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN
90 DAYS OF COMMENCEMENT, AND ANY AWARD WHICH MAY INCLUDE LEGAL FEES
SHALL BE ISSUED (WITH A BRIEF WRITTEN STATEMENT OF THE REASONS
THEREFOR) WITHIN 30 DAYS OF THE CLOSE OF HEARING. ANY DISPUTE
CONCERNING WHETHER A CLAIM IS ARBITRABLE OR BARRED BY THE STATUTE OF
LIMITATIONS SHALL BE DETERMINED BY THE ARBITRATOR. THIS ARBITRATION
PROVISION IS NOT INTENDED TO LIMIT THE RIGHT OF ANY PARTY TO EXERCISE
SELF-HELP REMEDIES, TO SEEK AND OBTAIN INTERIM OR PROVISIONAL RELIEF OF
ANY KIND OR TO INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST
ANY REAL OR PERSONAL PROPERTY COLLATERAL. IF FOR ANY REASON A CLAIM IS
NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY AGREE TO WAIVE
ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM.
10
LESSEE ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LEASE, AND LESSEE
AGREES TO ITS TERMS. THIS LEASE IS DATED DECEMBER 26, 2001.
LESSEE:
XXXXXXXXX RESTAURANTS, INC.
BY: /S/ XXXXXXX X. XXXXXXXXX
----------------------------------
NAME: XXXXXXX X. XXXXXXXXX
TITLE: PRESIDENT/CEO
LESSOR:
BANK OF AMERICA, N.A.
BY: /S/ XXX XXXXXX
----------------------------------
XXX XXXXXX
GUARANTY
GUARANTY. Each of the undersigned individuals (each, a "Guarantor"),
for good and valuable consideration, jointly and severally and unconditionally
and irrevocably guarantees to the above Lessor, and its successors and assigns,
the payment and performance, when due, of all of the above Lessee's obligations
(collectively, the "Obligations") under the above Lease. Each Guarantor further
agrees to pay, jointly and severally, all fees and costs (including, without
limitation, attorneys' fees) that Lessor, or its assigns, may incur in
collecting the amounts due. Each Guarantor agrees that from time to time Lessor
may, without notice to Guarantors and without affecting their liability: (i)
release any person liable for the Obligations; (ii) extend, renew, or modify the
terms of or accelerate the Obligations, in whole or in part; (iii) modify the
Lease; or (iv) waive or fail to enforce any of its rights under the Lease.
GENERAL WAIVERS. Except as prohibited by applicable law, each Guarantor
waives any right to require Lessor: (i) to continue providing services to
Lessee; (ii) to make any presentment, protest, demand or notice of any kind;
(iii) to proceed directly against any person, including Lessee, or any other
Guarantor; (iv) to proceed directly against or exhaust any collateral held by
Lessor from Lessee, any Guarantor or any other person; or (v) to pursue any
other remedy within Lessor's power. Each Guarantor also waives any and all
rights, claims and defenses arising by reason of: (i) any law which may prevent
Lessor from bringing any action, including a claim for
11
deficiency, against any Guarantor, before or after Lessor's commencement or
completion of any foreclosure action; (ii) any election of remedies by Lessor
that may adversely affect any Guarantor's subrogation or reimbursement rights;
(iii) any other defense of Lessee, any Guarantor or any other person; (iv) any
right to claim discharge of the Obligations on the basis of unjustified
impairment of any collateral for the Obligations; (v) any statute of
limitations; or (vi) any defenses given to Guarantors at law or in equity other
than actual payment and performance of the Obligations. Each Guarantor further
waives any deductions to the amount guaranteed by virtue of any right of setoff,
counterclaim, subrogation, counter demand, recoupment or similar right, whether
asserted by Lessee or any Guarantor, until final payment of all the Obligations.
WAIVERS OF SUBROGATION AND OTHER RIGHTS AND DEFENSES. Until final
payment of all the Obligations, each Guarantor waives (i) any right of
subrogation, reimbursement, indemnification, and contribution (contractual,
statutory, or otherwise) arising from the existence or performance of this
Guaranty, (ii) any right to enforce any remedy which Lessor now or may hereafter
have against Lessee, and (iii) any benefit of, and any right to participate in,
any of Lessor's collateral for the Obligations.
INFORMATION REGARDING LESSEE. Each Guarantor acknowledges and agrees
that it has the sole responsibility for, and has adequate means of, obtaining
from Lessee such information concerning Lessee's financial condition and
business operations as such Guarantor requires. Each Guarantor further
acknowledges and agrees that Lessor has no duty, and such Guarantor is not
relying on Lessor, at any time to disclose to such Guarantor any information
relating to Lessee's financial condition and business operations.
SETOFF. Each Guarantor grants to Lessor a security interest in all
deposits and other accounts now or hereafter maintained by such Guarantor with
Lessor (or any direct or indirect parent; subsidiary or affiliate of Lessor)
including, without limitation, all accounts held jointly with another person or
entity (except accounts in which a security interest is prohibited by law). Each
Guarantor authorizes Lessor (and each such parent, subsidiary and affiliate) to:
(i) charge or setoff any Obligations against deposits and accounts; and (ii)
administratively freeze all deposits and accounts.
MISCELLANEOUS. If any of the Obligations are paid at any time and
Lessor is required to remit such payment to Lessee's trustee in bankruptcy (or
similar person) under any federal or state bankruptcy or insolvency law, the
Obligations shall be considered unpaid for the purpose of enforcement of this
Guaranty. No formal acceptance of this Guaranty is necessary to make it
effective. This Guaranty shall be continuing. The failure of any Guarantor to
sign this Guaranty shall not discharge or impair the liability of any Guarantor
who signs this Guaranty. This Guaranty shall be governed by, and interpreted in
accordance with, the laws of the State of Nevada.
JURISDICTION. The parties consent to jurisdiction and venue in the
state or federal courts in any county where Lessor maintains an office.
12
ADDITIONAL PROVISIONS:
PRESENTATION OF ANNUAL TAX RETURNS OF GUARANTOR WITHIN 120 DAYS OF YEAR END.
ARBITRATION AND WAIVER OF JURY TRIAL. ANY CLAIM OR CONTROVERSY
("CLAIM") BETWEEN THE PARTIES, WHETHER ARISING IN CONTRACT OR TORT OR
BY STATUTE INCLUDING, BUT NOT LIMITED TO, CLAIMS RESULTING FROM OR
RELATING TO THIS GUARANTY SHALL, UPON THE REQUEST OF EITHER PARTY, BE
RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT
(TITLE 9, US CODE). ARBITRATION PROCEEDINGS WILL BE CONDUCTED IN
ACCORDANCE WITH THE RULES FOR ARBITRATION OF FINANCIAL SERVICES
DISPUTES OF J.A.M.S./ENDISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
ANY STATE WHERE REAL PROPERTY COLLATERAL FOR THIS GUARANTY OR THE BANK
OFFICE ORIGINATING THE CREDIT IS LOCATED. THE ARBITRATION HEARING SHALL
COMMENCE WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION AND CLOSE WITHIN
90 DAYS OF COMMENCEMENT, AND ANY AWARD WHICH MAY INCLUDE LEGAL FEES
SHALL BE ISSUED (WITH A BRIEF WRITTEN STATEMENT OF THE REASONS
THEREFORE) WITHIN 30 DAYS OF THE CLOSE OF HEARING. ANY DISPUTE
CONCERNING WHETHER A CLAIM IS ARBITRABLE OR BARRED BY THE STATUTE OF
LIMITATIONS SHALL BE DETERMINED BY THE ARBITRATOR. THIS ARBITRATION
PROVISION IS NOT INTENDED TO LIMIT THE RIGHT OF ANY PARTY TO EXERCISE
SELF-HELP REMEDIES, TO SEEK AND OBTAIN INTERIM OR PROVISIONAL RELIEF OF
ANY KIND OR TO INITIATE JUDICIAL OR NON-JUDICIAL FORECLOSURE AGAINST
ANY REAL OR PERSONAL PROPERTY COLLATERAL. IF FOR ANY REASON A CLAIM IS
NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY AGREE TO WAIVE
ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM.
GUARANTOR:
NAME: /S/ XXXXXXX X. XXXXXXXXX
------------------------
XXXXXXX X. XXXXXXXXX
13
