MASTER AGREEMENT
Dated as of October 11, 2000
among
RUBY TUESDAY, INC.,
as Lessee and Guarantor,
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
CERTAIN FINANCIAL INSTITUTIONS PARTY HERETO, as Lenders
and
SUNTRUST BANK, as Agent
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS; INTERPRETATION.........................1
SECTION 2 ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;NATURE
OF TRANSACTION....................................2
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease.....2
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs................................2
SECTION 2.3 Funded Amounts and Interest and Yield Thereon;
Unused Fee........................................4
SECTION 2.4 Lessee Owner for Tax Purposes.......................5
SECTION 2.5 Amounts Due Under Lease.............................6
SECTION 3 CONDITIONS PRECEDENT; DOCUMENTS.....................6
SECTION 3.1 Conditions to the Obligations of the Funding
Parties on each Closing Date......................6
SECTION 3.2 Additional Conditions for the Initial Closing Date.11
SECTION 3.3 Conditions to the Obligations of Lessee............12
SECTION 3.4 Conditions to the Obligations of the Funding Parties
on each Funding Date.............................13
SECTION 3.5 Completion Date Conditions.........................13
SECTION 4 REPRESENTATIONS....................................15
SECTION 4.1 Representations of Lessee..........................15
SECTION 4.2 Representations of the Lessor......................20
SECTION 4.3 Representations of each Lender.....................21
SECTION 5 COVENANTS OF THE LESSEE AND THE LESSOR.............22
SECTION 5.1 Financial Statements and Other Information.........22
SECTION 5.2 Notices of Material Events.........................23
SECTION 5.3 Existence; Conduct of Business.....................24
SECTION 5.4 Compliance with Laws, Etc..........................24
SECTION 5.5 Payment of Obligations.............................24
SECTION 5.6 Books and Records..................................24
SECTION 5.7 Visitation, Inspection, Etc........................24
SECTION 5.8 Maintenance of Properties; Insurance...............25
SECTION 5.9 Use of Proceeds and Letters of Credit..............25
SECTION 5.10 Additional Subsidiaries............................25
SECTION 5.11 Minimum Fixed Charge Coverage Ratio................25
SECTION 5.12 Maximum Adjusted Total Debt to EBITDAR Ratio.......25
SECTION 5.13 Maximum Adjusted Total Debt to Adjusted Total
Capital Ratio...................................26
SECTION 5.14 Indebtedness.......................................26
SECTION 5.15 Negative Pledge....................................27
SECTION 5.16 Fundamental Changes................................27
SECTION 5.17 Investments, Loans, Etc............................28
SECTION 5.18 Restricted Payments................................29
SECTION 5.19 Sale of Assets.....................................29
SECTION 5.20 Transactions with Affiliates.......................30
SECTION 5.21 Restrictive Agreements.............................30
SECTION 5.22 Sale and Leaseback Transactions....................31
SECTION 5.23 Hedging Agreements.................................31
SECTION 5.24 Amendment to Material Documents....................31
SECTION 5.25 Accounting Changes.................................31
SECTION 5.26 ERISA..............................................31
SECTION 5.27 Further Assurances.................................32
SECTION 5.28 Additional Required Appraisals.....................32
SECTION 5.29 Lessor's Covenants.................................32
SECTION 6 TRANSFERS BY LESSOR AND LENDERS....................33
SECTION 6.1 Lessor Transfers...................................33
SECTION 6.2 Lender Transfers...................................33
SECTION 7 INDEMNIFICATION....................................34
SECTION 7.1 General Indemnification............................34
SECTION 7.2 Environmental Indemnity............................36
SECTION 7.3 Proceedings in Respect of Claims...................37
SECTION 7.4 General Tax Indemnity..............................39
SECTION 7.5 Increased Costs, etc...............................44
SECTION 7.6 End of Term Indemnity..............................48
SECTION 8 MISCELLANEOUS......................................49
SECTION 8.1 Survival of Agreements.............................49
SECTION 8.2 Notices............................................49
SECTION 8.3 Counterparts.......................................49
SECTION 8.4 Amendments.........................................49
SECTION 8.5 Headings, etc......................................51
SECTION 8.6 Parties in Interest................................51
SECTION 8.7 GOVERNING LAW......................................51
SECTION 8.8 Expenses...........................................51
SECTION 8.9 Severability.......................................51
SECTION 8.10 Liabilities of the Funding Parties; Sharing of
Payments........................................51
SECTION 8.11 Submission to Jurisdiction; Waivers................52
SECTION 8.12 Liabilities of the Agent...........................53
<PAGE>
APPENDIX A Definitions and Interpretation
SCHEDULES
SCHEDULE 2.2 Commitments
SCHEDULE 4.1(n) Subsidiaries
SCHEDULE 5.14 Indebtedness
SCHEDULE 5.15 Liens
SCHEDULE 5.17 Investments
SCHEDULE 8.2 Notice Information
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Assignment of Lease and Rents
EXHIBIT C Form of Security Agreement and Assignment
EXHIBIT D Form of Mortgage
EXHIBIT E Form of Payment Date Notice
EXHIBIT F Form of Assignment and Assumption Agreement
EXHIBIT G Forms of Opinions of Counsel
EXHIBIT H Form of Lessee Certification of Construction
Completion
EXHIBIT I Form of Subsidiary Guaranty Agreement
EXHIBIT J Form of Indemnity, Subrogation and Contribution
Agreement
||
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MASTER AGREEMENT
THIS MASTER AGREEMENT, dated as of October 11, 2000 (as it may be
amended or modified from time to time in accordance with the provisions hereof,
this "Master Agreement"), is among RUBY TUESDAY, INC., a Georgia corporation
("Lessee"); ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
"Lessor"), certain financial institutions party hereto as lenders (together with
any other financial institution that becomes a party hereto as a lender,
collectively referred to as "Lenders" and individually as a "Lender"), and
SUNTRUST BANK, a Georgia banking corporation, as agent for the Lenders (in such
capacity, the "Agent").
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Master Agreement,
the Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring Land identified by the Lessee from time to time, and
leasing such Land to the Lessee, (ii) the Lessee, as Construction Agent for the
Lessor, wishes to construct Buildings on such Land for the Lessor and, when
completed, to lease such Buildings from the Lessor as part of the Leased
Properties under the Lease, (iii) the Lessee, as Construction Agent, wishes to
obtain, and the Lessor is willing to provide, funding for the acquisition of the
Land and the construction of Buildings, (iv) the Lessor wishes to obtain, and
Lenders are willing to provide, from time to time, financing of a portion of the
funding of the acquisition of the Land and the construction of the Buildings,
and (v) the Lessee is willing to provide its Guaranty Agreement to the Lenders
and the Lessor.
In consideration of the mutual agreements contained in this Master
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Master Agreement.
<PAGE>
SECTION 2
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease.
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(a) Land. Subject to the terms and conditions of this Master
Agreement, with respect to each parcel of Land identified by the Lessee, on the
related Closing Date (i) the Lessor agrees to acquire such interest in the
related Land from the applicable Seller as is transferred, sold, assigned and
conveyed to the Lessor pursuant to the applicable Purchase Agreement or to lease
such interest in the related Land from the applicable Ground Lessor as is leased
to the Lessor pursuant to the applicable Ground Lease, (ii) the Lessor hereby
agrees to lease, or sublease, as the case may be, such Land to the Lessee
pursuant to the Lease, and (iii) the Lessee hereby agrees to lease, or sublease,
as the case may be, such Land from the Lessor pursuant to the Lease.
(b) Building. With respect to each parcel of Land, subject to
the terms and conditions of this Master Agreement, from and after the Closing
Date relating to such Land (i) the Construction Agent agrees, pursuant to the
terms of the Construction Agency Agreement, to construct and install the
Building on such Land for the Lessor prior to the Scheduled Construction
Termination Date, (ii) the Lenders and the Lessor agree to fund all or a portion
of the costs of such construction and installation (and interest and yield
thereon during the applicable Construction Term), (iii) the Lessor shall lease,
or sublease, as the case may be, such Building as part of such Leased Property
to the Lessee pursuant to the Lease, and (iv) the Lessee shall lease, or
sublease, as the case may be, such Building from the Lessor pursuant to the
Lease.
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs.
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(a) Initial Funding and Payment of Purchase Price for Land and
Development Costs on Closing Date. Subject to the terms and conditions of this
Master Agreement, on the Closing Date for any Land, each Lender shall make
available to the Lessor its Loan with respect to such Land in an amount equal to
the product of such Lender's Commitment Percentage times the purchase price for
the Land, if applicable, and the development, transaction and closing costs
incurred by the Lessee through such Closing Date with respect to such Leased
Property, which funds the Lessor shall use, together with the Lessor's own funds
in an amount equal to the product of the Lessor's Commitment Percentage times
the purchase price, if applicable, for the related Land and the development,
transaction and closing costs incurred by the Lessee, as agent, through such
Closing Date with respect to such Leased Property, to purchase the Land from the
applicable Seller pursuant to the applicable Purchase Agreement or lease the
Land from the applicable Ground Lessor pursuant to the applicable Ground Lease
and to reimburse the Lessee for the amount of such development, transaction and
closing costs, and the Lessor shall lease, or sublease, as the case may be, such
Land to the Lessee pursuant to the Lease.
<PAGE>
(b) Subsequent Fundings and Payments of Construction Costs
during Construction Term. Subject to the terms and conditions of this Master
Agreement, on each Funding Date following the Closing Date for each parcel of
Land until the related Construction Term Expiration Date, (i) each Lender shall
make available to the Lessor a Loan in an amount equal to the product of such
Lender's Commitment Percentage times the amount of Funding requested by the
Lessee for such Funding Date, which funds the Lessor hereby directs the Lender
to pay over to the Lessee as set forth in paragraph (d), and (ii) the Lessor
shall pay over to the Lessee its own funds (which shall constitute a part of and
an increase in the Lessor's Invested Amount with respect to such Leased
Property) in an amount equal to the product of the Lessor's Commitment
Percentage times the amount of Funding requested by the Lessee for such Funding
Date.
(c) Aggregate Limits on Funded Amounts. The aggregate amount
that the Funding Parties shall be committed to provide as Funded Amounts under
this Master Agreement and the Loan Agreement shall not exceed (x) with respect
to each Leased Property the costs of purchase and construction of such Leased
Property and the related closing and financing costs, or (y) $52,500,000 in the
aggregate for all Leased Properties; provided, however, that in the event that
the Lessee exercises a Partial Purchase Option, the amount set forth in this
clause (y) shall be reinstated to the extent of the Funded Amounts paid by the
Lessee in connection with such Partial Purchase Option; and, provided, further,
that if any Lender increases its Commitment, or any new Lender is added to the
Master Agreement and the Loan Agreement, (i) the amount in clause (y) shall be
increased proportionately (but in no event in excess of $60,000,000) and the
Lessor's Commitment shall be increased to 3.5% of such amount, (ii) the Agent
shall send to the Lessee and the Funding Parties a replacement Schedule 2.2
hereto reflecting such increase and (iii) the Lessor shall execute and deliver
to the Agent a replacement A Note and B Note reflecting such increase. The
aggregate amount that any Funding Party shall be committed to fund under this
Master Agreement and the Loan Agreement shall not exceed the lesser of (i) such
Funding Party's Commitment and (ii) such Funding Party's Commitment Percentage
of the aggregate Fundings requested under this Master Agreement.
<PAGE>
(d) Notice, Time and Place of Fundings. With respect to each
Funding, the Lessee shall give the Lessor and the Agent an irrevocable prior
written notice not later than 11:00 a.m., Atlanta, Georgia time, three Business
Days prior to the proposed Closing Date or other Funding Date, as the case may
be, pursuant, in each case, to a funding request in the form of Exhibit A (a
"Funding Request"), specifying the Closing Date or subsequent Funding Date, as
the case may be, the amount of Funding requested, whether such Funding shall be
a LIBOR Advance, a Base Rate Advance or a combination thereof and the Rent
Period(s) therefor. The Agent shall notify the Lenders of a requested Funding on
the day the Agent receives the related Funding Request if the Agent receives
such Funding Request on or before 11:00 a.m., Atlanta, Georgia time; if the
Agent receives a Funding Request after such time, it shall promptly notify the
Lenders thereof, but in any event by close of business on the next Business Day.
All documents and instruments required to be delivered on such Closing Date
pursuant to this Master Agreement shall be delivered at the offices of Mayer,
Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603, or at such
other location as may be determined by the Lessor, the Lessee and the Agent.
Each Funding shall occur on a Business Day and shall be in an amount equal to
$500,000 or an integral multiple of $100,000 in excess thereof. All remittances
made by any Lender and the Lessor for any Funding shall be made in immediately
available funds by wire transfer to or, as is directed by, the Lessee, with
receipt by the Lessee not later than 12:00 noon, Atlanta, Georgia time, on the
applicable Funding Date, upon satisfaction or waiver of the conditions precedent
to such Funding set forth in Section 3; such funds shall (1) in the case of the
initial Funding on a Closing Date, be used to pay the purchase price to the
applicable Seller for the related Land and pay the Lessee development,
transaction and closing costs related to such Land, and (2) in the case of each
subsequent Funding be paid to the Lessee as the Construction Agent, for the
payment or reimbursement of Construction costs.
(e) Lessee's Deemed Representation for Each Funding. Each
Funding Request by the Lessee shall be deemed a reaffirmation of the Lessee's
indemnity obligations in favor of the Indemnitees under the Operative Documents
and a representation by the Lessee to the Lessor, the Agent, and the Lenders
that on the proposed Closing Date or Funding Date, as the case may be, (i) the
amount of Funding requested represents amounts owing in respect of the purchase
price of the related Land and development, transaction and closing costs in
respect of the Leased Property (in the case of the initial Funding on a Closing
Date) or amounts that are then due to third parties in respect of the
Construction, or amounts paid by the Lessee to third parties in respect of the
Construction for which the Lessee has not previously been reimbursed by a
Funding (in the case of any Funding), (ii) no Event of Default or Potential
Event of Default exists, and (iii) the representations of the Lessee set forth
in Section 4.1 are true and correct in all material respects as though made on
and as of such Funding Date, except to the extent such representations or
warranties relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct in all material respects on and
as of such earlier date.
(f) Not Joint Obligations. Notwithstanding anything to the
contrary set forth herein or in the other Operative Documents, each Lender's and
the Lessor's Commitments shall be several, and not joint. In no event shall any
Funding Party be obligated to fund an amount in excess of such Funding Party's
Commitment Percentage of any Funding, or to fund amounts in the aggregate in
excess of such Funding Party's Commitment.
(g) Non-Pro Rata Fundings. Notwithstanding anything to the
contrary set forth in this Master Agreement, at the Agent's option, Fundings may
be made by drawing on the Lessor's Commitment until such Commitment is fully
funded before drawing on the Lenders' Commitments. In such event, when the
Lessor's Commitment is fully funded, the Lenders will fund, on a pro rata basis
as among themselves, 100% of the amount of the Fundings thereafter. In no event
shall any Funding Party have any obligation to fund any amount hereunder in
excess of the amount of such Funding Party's Commitment.
SECTION 2.3 Funded Amounts and Interest and Yield Thereon; Unused
Fee.
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<PAGE>
(a) The Lessor's Invested Amount for any Leased Property
outstanding from time to time shall accrue yield ("Yield") at the Lessor Rate,
computed using the actual number of days elapsed and a 360 day year. If all or a
portion of the principal amount of or Yield on the Lessor's Invested Amounts
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, without limiting the rights of the Lessor
under the Lease, to the maximum extent permitted by law, accrue Yield at the
Overdue Rate, from the date of nonpayment until paid in full (both before and
after judgment).
(b) Each Lender's Funded Amount for any Leased Property
outstanding from time to time shall accrue interest as provided in the Loan
Agreement.
(c) During the Construction Term, in lieu of the payment of
accrued interest, on each Payment Date, each Lender's Funded Amount in respect
of a Construction Land Interest shall automatically be increased by the amount
of interest accrued and unpaid on the related Loans pursuant to the Loan
Agreement during the Rent Period ending immediately prior to such Payment Date.
Similarly, in lieu of the payment of accrued Yield, on each Payment Date, the
Lessor's Invested Amount in respect of such Construction Land Interest shall
automatically be increased by the amount of Yield accrued on the Lessor's
Invested Amount in respect of such Land during the Rent Period ending
immediately prior to such Payment Date. Such increases in Funded Amounts shall
occur without any disbursement of funds by the Funding Parties.
(d) Three Business Days prior to the last day of each Rent
Period, the Lessee shall deliver to the Lessor and the Agent a notice
substantially in the form of Exhibit E (each, a "Payment Date Notice"),
appropriately completed, specifying the allocation of the Funded Amounts related
to such Rent Period to LIBOR Advances and Base Rate Advances and the Rent
Periods therefor, provided that no such allocation shall be in an amount less
than $500,000. Each such Payment Date Notice shall be irrevocable. If no such
notice is given, the Funded Amounts shall be allocated to a LIBOR Advance with a
Rent Period of three (3) months.
(e) Lessor hereby agrees to pay to each Funding Party an
unused fee for each day from the date hereof until the Funding Termination Date
equal to (i) the Applicable Fee Margin per annum times (ii) the difference
between such Funding Party's Commitment and its outstanding Lessor's Invested
Amount or the principal of its outstanding Loans, as applicable, times (iii)
1/360. Such unused fee shall be payable with the proceeds of Advances in arrears
on each Quarterly Payment Date and on the Funding Termination Date; on each such
Quarterly Payment Date and on the Funding Termination Date, each Funding Party's
Funded Amount shall be automatically increased by its Commitment Percentage of
the aggregate unused fee due on such date pursuant to this Section 2.3(e).
(f) If the increase in the Funded Amounts to be effected
pursuant to Section 2.3(c) or (e) above would cause any Funding Party's Funded
Amount to exceed its Commitment, such increase shall not be made and Lessee may,
at its option, pay such amount. If Lessee does not choose to pay such amount,
such event shall constitute a Construction Agency Event of Default.
<PAGE>
SECTION 2.4 Lessee Owner for Tax Purposes. With respect to each Leased
Property, it is the intent of the Lessee and the Funding Parties that for
federal, state and local tax purposes (A) the Lessee owns such Leased Property
and will be entitled to all tax benefits ordinarily available to an owner of
property similar to such Leased Property, (B) the Lease will be treated as a
financing arrangement, and (C) the Lessor will be treated as a lender making
loans to the Lessee. Each of the Lessee and each Funding Party agrees to file
tax returns consistent with such intent. Nevertheless, the Lessee acknowledges
and agrees that no Funding Party or any other Person has made any
representations or warranties concerning the tax, financial, accounting or legal
characteristics or treatment of the Operative Documents and that the Lessee has
obtained and relied solely upon the advice of its own tax, accounting and legal
advisors concerning the Operative Documents and the accounting, tax, financial
and legal consequences of the transactions contemplated therein.
SECTION 2.5 Amounts Due Under Lease. Lessor hereby directs Lessee to,
and Lessee agrees to, pay all Basic Rent, Leased Property Balances, Lease
Balance, Recourse Deficiency Amount and all other amounts due to the Lessor
under the Lease and the Construction Agency Agreement to the Agent for
distribution pursuant to Section 3 of the Loan Agreement. With respect to each
Leased Property, anything else herein or elsewhere to the contrary
notwithstanding, it is the intention of the Lessee and the Funding Parties that:
(i) the amount and timing of Basic Rent due and payable from time to time from
the Lessee under the Lease shall be equal to the aggregate payments due and
payable with respect to interest on, and principal of, the Loans in respect of
such Leased Property and Yield on, and principal of, the Lessor's Invested
Amounts, if any, in respect of such Leased Property on each Payment Date; (ii)
if the Lessee elects the Purchase Option or the Partial Purchase Option with
respect to a Leased Property or becomes obligated to purchase such Leased
Property under the Lease or the Construction Agency Agreement, the Funded
Amounts in respect of such Leased Property, all interest and Yield thereon and
all other obligations of the Lessee owing to the Funding Parties in respect of
the Leased Property shall be paid in full by the Lessee, (iii) if the Lessee
properly elects the Remarketing Option, the principal amount of, and accrued
interest on, the A Loans in respect of such Leased Property, will be paid out of
the Recourse Deficiency Amount, and the Lessee shall only be required to pay to
the Lenders in respect of the principal amount of the B Loans in respect of such
Leased Property and to the Lessor in respect of the Lessor's Invested Amounts in
respect of such Leased Property, the proceeds of the sale of such Leased
Property; and (iv) upon an Event of Default resulting in an acceleration of the
Lessee's obligation to purchase such Leased Property under the Lease, the
amounts then due and payable by the Lessee under the Lease shall include all
amounts necessary to pay in full the Loans in respect of such Leased Property,
and accrued interest thereon, the Lessor's Invested Amounts in respect of such
Leased Property and accrued Yield thereon and all other obligations of the
Lessee owing to the Funding Parties in respect of such Leased Property.
SECTION 3
CONDITIONS PRECEDENT; DOCUMENTS
<PAGE>
SECTION 3.1 Conditions to the Obligations of the Funding Parties on
each Closing Date. The obligations of the Lessor and each Lender to carry out
their respective obligations under Section 2 of this Master Agreement to be
performed on the Closing Date with respect to any Leased Property shall be
subject to the fulfillment to the satisfaction of, or waiver by, each such party
hereto (acting directly or through its counsel) on or prior to such Closing Date
of the following conditions precedent, provided that the obligations of any
Funding Party shall not be subject to any conditions contained in this Section
3.1 which are required to be performed by such Funding Party:
(a) Documents. The following documents shall have been
executed and delivered by the respective parties thereto:
(i) Deed and Purchase Agreement; Ground Lease. The
related original Deed duly executed by the applicable Seller
and in recordable form, and copies of the related Purchase
Agreement, duly executed by such Seller and the Lessor, shall
each have been delivered to the Agent by the Lessee, with
copies thereof to each other Funding Party, or the related
Ground Lease duly executed by the Lessor and the related
Ground Lessor shall have been delivered to the Agent, with
copies thereof to each other Funding Party, as applicable (it
being understood, that each Purchase Agreement and each Ground
Lease shall be satisfactory in form and substance to the
Lessor and the Lenders).
(ii) Lease Supplement. The original of the
related Lease Supplement, duly executed
by the Lessee and the Lessor and in recordable form, shall
have been delivered to the Agent by the Lessee.
(iii) Mortgage and Assignment of Lease and Rents.
Counterparts of the Mortgage (substantially in the form of
Exhibit D attached hereto), duly executed by the Lessor and in
recordable form, shall have been delivered to the Agent (which
Mortgage shall secure all of the debt to the Agent unless such
mortgage is subject to a tax based on the amount of
indebtedness secured thereby, in which case the amount secured
will be limited to debt in an amount equal to 125% of the
projected cost of acquisition and construction of such Leased
Property); and the Assignment of Lease and Rents
(substantially in the form of Exhibit B attached hereto) in
recordable form, duly executed by the Lessor, shall have been
delivered to the Agent by the Lessor.
<PAGE>
(iv) Security Agreement and Assignment; Construction
Agency Supplement. Counterparts of the Security Agreement and
Assignment (substantially in the form of Exhibit C attached
hereto), duly executed by the Lessee, with an acknowledgment
and consent thereto satisfactory to the Lessor and the Agent
duly executed by the related General Contractor and the
related Architect, as applicable, and complete copies of the
related Construction Contract and the related Architect's
Agreement certified by the Lessee, shall have been delivered
to the Lessor and the Agent (it being understood and agreed
that if no related Construction Contract or Architect's
Agreement exists on such Closing Date, such delivery shall not
be a condition precedent to the Funding on such Closing Date,
and in lieu thereof the Lessee shall deliver complete copies
of such Security Agreement and Assignment and consents
concurrently with the Lessee's entering into such contracts).
Counterparts of the supplement to the Construction Agency
Agreement for such Leased Property, duly executed by the
Construction Agent and the Lessor, shall have been delivered
to the Agent.
(v) Survey. The Lessee shall have delivered, or shall
have caused to be delivered, to the Lessor and the Agent, at
the Lessee's expense, an accurate survey certified to the
Lessor and the Agent in a form reasonably satisfactory to the
Lessor and the Agent and showing no state of facts
unsatisfactory to the Lessor or the Agent and prepared within
ninety (90) days of the Closing Date by a Person reasonably
satisfactory to the Lessor and the Agent. Such survey shall
(1) be acceptable to the Title Insurance Company for the
purpose of providing extended coverage to the Lessor and a
lender's comprehensive endorsement to the Agent, (2) show no
encroachments on such Land by structures owned by others, and
no encroachments from any part of such Leased Property onto
any land owned by others, and (3) disclose no state of facts
reasonably objectionable to the Lessor, the Agent or the Title
Insurance Company, and be reasonably acceptable to each such
Person.
(vi) Title and Title Insurance. On such Closing Date,
the Lessor shall receive from a title insurance company
acceptable to the Lessor and the Agent an ALTA Owner's Policy
of Title Insurance issued by such title insurance company and
the Agent shall receive from such title insurance company an
ALTA Mortgagee's Policy of Title Insurance issued by such
title insurance company, in each case, in the amount of the
projected cost of acquisition and construction of such Leased
Property, reasonably acceptable in form and substance to the
Lessor and the Agent, respectively (collectively, the "Title
Policy"). The Title Policy shall be dated as of the Closing
Date, and, to the extent permitted under Applicable Law, shall
include a pending disbursements clause reasonably satisfactory
to the Lessor and the Agent and coverage over the creditors'
rights exclusion and the general exceptions to such policy,
and shall contain such affirmative endorsements as to
mechanic's liens, easements and rights-of-way, encroachments,
the non-violation of covenants and restrictions, survey
matters and other matters as the Lessor or the Agent shall
reasonably request.
<PAGE>
(vii) Appraisal. Unless the Lessee shall have
previously delivered to the Agent Appraisals with respect to
Leased Properties that are expected by the Lessee, based on
reasonable estimates, to have an aggregate Leased Property
Balance in excess of $15,000,000, each Funding Party shall
have received a report of the Appraiser (an "Appraisal"), paid
for by the Lessee, which shall meet the requirements of the
Financial Institutions Reform, Recovery and Enforcement Act of
1989, shall be satisfactory to such Funding Party and shall
state in a manner satisfactory to such Funding Party the
estimated "as vacant" value of such Land and the Building to
be constructed thereon. Such Appraisal must show that (1) the
estimated Fair Market Sales Value of the Leased Property
(determined as if the Building had already been completed in
accordance with the related Plans and Specifications and by
excluding from such value the amount of assessments on such
Leased Property) at the commencement of the Lease Term with
respect thereto is equal to the projected cost of acquisition
and construction of such Leased Property, and (2) the "as
vacant" value described above is at least 45% of the total
cost of the Leased Property, including the trade fixtures,
equipment and personal property utilized in connection with
the Leased Property and to be funded by the Funding Parties.
Upon request by the Lessee, the Funding Parties agree to waive
delivery on such Closing Date of an Appraisal, provided that
no subsequent Funding with respect to such Leased Property
shall occur until such Appraisal has been delivered.
(viii) Environmental Audit and related Reliance
Letter. The Lessor and the Agent shall have received an
Environmental Audit for such Leased Property, which shall not
include a recommendation for further investigation and is
otherwise satisfactory to the Lessor and the Agent; and the
firm that prepared the Environmental Audit for such Leased
Property shall have delivered to the Lessor and the Agent a
letter (substantially in the form of Exhibit F attached
hereto) stating that the Lessor, the Agent and the Lenders may
rely upon such firm's Environmental Audit of such Land, it
being understood that the Lessor's and the Agent's acceptance
of any such Environmental Audit shall not release or impair
the Lessee's obligations under the Operative Documents with
respect to any environmental liabilities relating to such
Leased Property.
(ix) Evidence of Insurance. The Lessor and the Agent
shall have received from the Lessee certificates of insurance
evidencing compliance with the provisions of Article VIII of
the Lease (including the naming of the Lessor, the Agent and
the Lenders as additional insured or loss payee with respect
to such insurance), in form and substance reasonably
satisfactory to the Lessor and the Agent.
(x) UCC Financing Statement; Recording Fees; Transfer
Taxes. Each Funding Party shall have received satisfactory
evidence of (i) the execution and delivery to Agent of a UCC-1
and, if required by applicable law, UCC-2 financing statement
to be filed with the Secretary of State of the applicable
State (or other appropriate filing office) and the county
where the related Land is located, respectively, and such
other Uniform Commercial Code financing statements as any
Funding Party deems necessary or desirable in order to perfect
such Funding Party's interests and (ii) the payment of all
recording and filing fees and taxes with respect to any
recordings or filings made of the related Deed, the Lease, the
related Lease Supplement, the related Mortgage and the related
Assignment of Lease and Rents.
<PAGE>
(xi) Opinions. The opinion of local counsel for the
Lessee qualified in the jurisdiction in which such Leased
Property is located, substantially in the form set forth in
Exhibit G-2 attached hereto, and containing such other matters
as the parties to whom they are addressed shall reasonably
request, shall have been delivered and addressed to each of
the Lessor, the Agent and the Lenders, and to the extent
requested by the Agent, opinions supplemental to those
delivered under Section 3.2(vii) and reasonably satisfactory
to the Agent shall have been delivered and addressed to each
of the Lessor, the Agent and the Lenders.
(xii) Good Standing Certificates. The Agent shall
have received good standing certificates for the Lessor and
the Lessee from the appropriate offices of the state where the
related Land is located.
(b) Litigation. No action or proceeding shall have been
instituted or threatened nor shall any governmental action, suit, proceeding or
investigation be instituted or threatened before any Governmental Authority, nor
shall any order, judgment or decree have been issued or proposed to be issued by
any Governmental Authority, to set aside, restrain, enjoin or prevent the
performance of this Master Agreement or any transaction contemplated hereby or
by any other Operative Document or which is reasonably likely to materially
adversely affect the Leased Property or any transaction contemplated by the
Operative Documents or which could reasonably be expected to result in a
Material Adverse Effect.
(c) Legality. In the opinion of such Funding Party or its
counsel, the transactions contemplated by the Operative Documents shall not
violate any Applicable Law, and no change shall have occurred or been proposed
in Applicable Law that would make it illegal for such Funding Party to
participate in any of the transactions contemplated by the Operative Documents.
(d) No Events. (i) No Event of Default, Potential Event of
Default, Event of Loss or Event of Taking relating to such Leased Property shall
have occurred and be continuing, (ii) no action shall be pending or threatened
by a Governmental Authority to initiate a Condemnation or an Event of Taking,
and (iii) there shall not have occurred any event that could reasonably be
expected to have a Material Adverse Effect since June 4, 2000.
(e) Representations. Each representation and warranty of the
parties hereto or to any other Operative Document contained herein or in any
other Operative Document shall be true and correct in all material respects as
though made on and as of the Closing Date, except to the extent such
representations or warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(f) Cutoff Date. No Closing Date shall occur after the
Funding Termination Date.
(g) Rejection. The Agent shall not have rejected such
Leased Property for inclusion in the Transaction by written notice to the Lease.
<PAGE>
SECTION 3.2 Additional Conditions for the Initial Closing Date. The
obligations of the Lessor and each Lender to carry out their respective
obligations under Section 2 of this Master Agreement to be performed on the
initial Closing Date shall be subject to the satisfaction of, or waiver by, each
such party hereto (acting directly or through its counsel) on or prior to the
initial Closing Date of the following conditions precedent in addition to those
set forth in Section 3.1, provided that the obligations of any Funding Party
shall not be subject to any conditions contained in this Section 3.2 which are
required to be performed by such Funding Party:
(i) Guaranty; Subsidiary Guaranty Agreement.
Counterparts of the Guaranty Agreement, duly executed by the
Lessee, shall have been delivered to each Funding Party.
Counterparts of the Subsidiary Guaranty Agreement and
Indemnity, Subrogation and Contribution Agreement duly
executed by the Subsidiary Guarantors, shall have been
delivered to each Funding Party.
(ii) Loan Agreement; Notes. Counterparts of the Loan
Agreement, duly executed by the Lessor, the Agent and each
Lender shall have been delivered to each of the Lessor and the
Agent. An A Note and a B Note, duly executed by the Lessor,
shall have been delivered to the Agent.
(iii) Master Agreement. Counterparts of this
Master Agreement, duly executed by the parties hereto,
shall have been delivered to each of the parties hereto.
(iv) Construction Agency Agreement.
Counterparts of the Construction Agency Agreement, duly
executed by the parties thereto shall have been delivered
to each of the parties hereto.
(v) Lease. Counterparts of the Lease, duly executed
by the Lessee and the Lessor, shall have been delivered to
each Funding Party and the original, chattel paper copy of the
Lease shall have been delivered to the Agent.
(vi) Lessee's Resolutions and Incumbency Certificate,
etc. Each of the Agent and the Lessor shall have received (x)
a certificate of the Secretary or an Assistant Secretary of
the Lessee and each other Obligor, attaching and certifying as
to (i) the Board of Directors' (or appropriate committee's)
resolution duly authorizing the execution, delivery and
performance by it of each Operative Document to which it is or
will be a party, (ii) the incumbency and signatures of persons
authorized to execute and deliver such documents on its
behalf, (iii) its articles or certificate of incorporation or
certificate of formation, certified as of a recent date by the
Secretary of State of the state of its incorporation and (iv)
its by-laws, and (y) good standing certificates for the Lessee
or such other Obligor from the appropriate offices of the
States of such Person's incorporation or organization and
principal place of business.
<PAGE>
(vii) Opinions of Counsel. The opinion of Powell
Goldstein Frazer & Murphy LLP and of in-house counsel to
Lessee and the other Obligors, each dated the initial Closing
Date, substantially in the forms set forth in Exhibit G-1
attached hereto, and containing such other matters as the
parties to whom it is addressed shall reasonably request,
shall have been delivered and addressed to each of the Lessor,
the Agent and the Lenders. The opinion of Brown McCarroll &
Oakes Hartline, LLP, counsel to Lessor, dated the initial
Closing Date, substantially in the form set forth in Exhibit
G-3 attached hereto, and containing such other matters as the
parties to whom it is addressed shall reasonably request,
shall have been delivered to each of the Agent and the
Lenders.
(viii) Good Standing Certificate. The Agent shall
have received a good standing certificate for the Lessor and
the General Partner from the appropriate offices of the State
of Texas.
(ix) Lessor's Consents and Incumbency Certificate,
etc. The Agent shall have received a certificate of the
Secretary or an Assistant Secretary of the General Partner of
the Lessor attaching and certifying as to (i) the consents of
the partners of the Lessor duly authorizing the execution,
delivery and performance by it of each Operative Document to
which it is or will be a party, (ii) the incumbency and
signatures of persons authorized to execute and deliver such
documents on its behalf, and (iii) the Partnership Agreement.
SECTION 3.3 Conditions to the Obligations of Lessee. The obligations of
the Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the related Closing Date to the satisfaction of, or waiver by,
the Lessee, of the following conditions precedent:
(a) General Conditions. The conditions set forth in Sections
3.1 and 3.2 that require fulfillment by the Lessor or the Lenders shall have
been satisfied, including the delivery of good standing certificates by the
Lessor pursuant to Sections 3.1(a)(xiv) and 3.2(b)(viii) and the delivery of an
opinion of counsel for the Lessor pursuant to Section 3.2(b)(vii).
(b) Legality. In the opinion of the Lessee or its counsel, the
transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in Applicable
Law that would make it illegal for the Lessee to participate in any of the
transactions contemplated by the Operative Documents.
(c) Purchase Agreement; Ground Lease. The Purchase
-----------------------------------
Agreement and, if applicable, the Ground Lease with respect to such Leased
Property shall be reasonably satisfactory to the Lessee.
SECTION 3.4 Conditions to the Obligations of the Funding Parties on
each Funding Date. The obligations of the Lessor and each Lender to carry out
their respective obligations under Section 2 of this Master Agreement to be
performed on each Funding Date shall be subject to the fulfillment to the
satisfaction of, or waiver by, each such party hereto (acting directly or
through their respective counsel) on or prior to each such Funding Date of the
following conditions precedent, provided that the obligations of any Funding
Party shall not be subject to any conditions contained in this Section 3.4 which
are required to be performed by such Funding Party:
<PAGE>
(a) Funding Request. The Lessor and the Agent shall
----------------
have received from the Lessee the Funding Request therefor pursuant to
Section 2.2(d).
--------------
(b) Condition Fulfilled. As of such Funding Date, the
--------------------
condition set forth in Section 3.1(d)(i) shall have been satisfied.
----------------
(c) Representations. As of such Funding Date, both before and
after giving effect to the Funding requested by the Lessee on such date, the
representations and warranties that the Lessee is deemed to make pursuant to
Section 2.2(e) shall be true and correct in all material respects on and as of
such Funding Date as though made on and as of such Funding Date, except to the
extent such representations or warranties relate solely to an earlier date, in
which case such representations and warranties shall have been true and correct
in all material respects on and as of such earlier date.
(d) No Bonded Stop Notice or Filed Mechanics Lien. As of each
Funding Date, and as to any Funded Amount requested for any Leased Property on
each such Funding Date, (i) neither the Lessor, the Agent nor any Lender has
received (with respect to such Leased Property) a bonded notice to withhold Loan
funds that has not been discharged by the Lessee, and (ii) no mechanic's liens
or materialman's liens have been filed against such Leased Property that have
not been discharged by the Lessee, bonded over in a manner reasonably
satisfactory to the Agent or insured over by the Title Insurance Company.
(e) Lease Supplement. If the Funding relates to a Building
that will be leased under a Lease Supplement separate from the Lease Supplement
for the related Land, the original of such separate Lease Supplement, duly
executed by the Lessee and the Lessor and in recordable form, shall have been
delivered to the Agent.
SECTION 3.5 Completion Date Conditions. The occurrence of the
Completion Date with respect to any Leased Property shall be subject to the
fulfillment to the satisfaction of, or waiver by, each party hereto (acting
directly or through its counsel) of the following conditions precedent:
(a) Title Policy Endorsements. The Construction Agent shall
have furnished to each Funding Party the following endorsements to the related
Title Policy (each of which shall be subject to no exceptions other than those
reasonably acceptable to the Agent): a date-down endorsement (redating and
confirming the coverage provided under the Title Policy and each endorsement
thereto) and a "Form 9" endorsement (if available in the applicable
jurisdiction), in each case, effective as of a date not earlier than the date of
completion of the Construction. The Construction Agent shall also deliver to the
Agent true and complete copies of a certificate or certificates of occupancy for
such Leased Property or other legally equivalent permission to occupy such
Leased Property.
<PAGE>
(b) Construction Completion. The related Construction shall
have been completed substantially in accordance with the related Plans and
Specifications, the related Deed and all Applicable Laws, and such Leased
Property shall be ready for occupancy and operation. All fixtures, equipment and
other property contemplated under the Plans and Specifications to be
incorporated into or installed in such Leased Property shall have been
substantially incorporated or installed, free and clear of all Liens except for
Permitted Liens.
(c) Lessee Certification. The Construction Agent shall
---------------------
have furnished the Lessor, the Agent and each Lender with a certification of the
Construction Agent (substantially in the form of Exhibit H) that:
(i) all amounts owing to third parties for the
related Construction have been paid in full (other than contingent
obligations for which the Construction Agent has made adequate
reserves), and no litigation or proceedings are pending, or to the best
of the Construction Agent's knowledge, are threatened, against such
Leased Property or the Construction Agent which could reasonably be
expected to have a Material Adverse Effect;
(ii) all material consents, licenses and permits and
other governmental authorizations or approvals required for such
Construction and operation of such Leased Property have been obtained
and are in full force and effect;
(iii) such Leased Property has available all services
of public facilities and other utilities necessary for use and
operation of such Leased Property for its intended purposes including,
without limitation, adequate water, gas and electrical supply, storm
and sanitary sewerage facilities, telephone, other required public
utilities and means of access between the related Building and public
highways for pedestrians and motor vehicles;
(iv) all material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use
and operation of such Leased Property as the Lessee intends to use the
Leased Property under the Lease and which are necessary to permit the
lawful intended use and operation of all then intended utilities,
driveways, roads and other means of egress and ingress to and from the
same have been obtained and are in full force and effect and the
Construction Agent has no knowledge of any pending modification or
cancellation of any of the same; and the use of such Leased Property
does not depend on any variance, special exception or other municipal
approval, permit or consent that has not been obtained and is in full
force and effect for its continuing legal use;
(v) all of the requirements and conditions set forth
in Section 3.5(b) hereof have been completed and fulfilled with respect
to such Leased Property and the related Construction; and
(vi) such Leased Property is in compliance in
all material respects with all applicable zoning laws and regulations.
<PAGE>
SECTION 4
REPRESENTATIONS
SECTION 4.1 Representations of Lessee. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, the
Lessee represents and warrants to each of the other parties hereto as follows:
(a) Existence; Powers. Each of the Lessee and each of its
Subsidiaries (i) is duly organized, validly existing and in good standing as a
corporation or limited liability company under the laws of the jurisdiction of
its organization, (ii) has all requisite power and authority to carry on its
business as now conducted and (iii) is duly qualified to do business, and is in
good standing in each jurisdiction (A) where a Leased Property is located, in
the case of the Lessee, and (B) where such qualification is required, except
where a failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect
(b) Organizational Power; Authorization. The execution,
delivery and performance by each Obligor of the Operative Documents to which it
is a party are within such Obligor's organizational powers and have been duly
authorized by all necessary organizational, and if required, shareholder action.
This Master Agreement and each other Operative Document to which the Lessee is a
party has been duly executed and delivered by the Lessee, and constitutes, and
each other Operative Document to which any Obligor is a party, when executed and
delivered by such Obligor, will constitute, valid and binding obligations of the
Lessee or such Obligor (as the case may be), enforceable against it in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting
the enforcement of creditors' rights generally and by general principles of
equity.
(c) Governmental Approvals; No Conflicts. The execution,
delivery and performance by the Lessee of this Master Agreement and each other
Operative Document to which it is a party, and by each Obligor of the other
Operative Documents to which it is a party (a) do not require any consent or
approval of, registration or filing with, or any action by, any Governmental
Authority, except those as have been obtained or made and are in full force and
effect, (b) will not violate any applicable law, rule or regulation or the
charter, bylaws or other organizational documents of the Lessee or any of its
Subsidiaries or any judgment, order or ruling of any Governmental Authority, (c)
will not violate or result in a default under any indenture, material agreement
or other material instrument binding on the Lessee or any of its Subsidiaries or
any of its assets or give rise to a right thereunder to require any payment to
be made by the Lessee or any of its Subsidiaries and (d) will not result in the
creation or imposition of any Lien on any asset of the Lessee or any of its
Subsidiaries, except Liens created under the Operative Documents.
<PAGE>
(d) Financial Statements. The Lessee has furnished to the
Agent and each Funding Party the audited consolidated balance sheet of the
Lessee and its Subsidiaries as of June 4, 2000 and the related consolidated
statements of income, shareholders' equity and cash flows for the fiscal year
then ended prepared by KPMG L.L.P. Such financial statements fairly present the
consolidated financial condition of the Lessee and its Subsidiaries as of such
dates and the consolidated results of operations for such periods in conformity
with GAAP consistently applied. Since June 4, 2000, there have been no changes
with respect to the Lessee and its Subsidiaries which have had or could
reasonably be expected to have, singly or in the aggregate, a Material Adverse
Effect.
(e) Litigation and Environmental Matters.
------------------------------------
(i) No litigation, investigation or proceeding of or
before any arbitrators or Governmental Authorities is pending against
or, to the knowledge of the Lessee, threatened against or affecting the
Lessee or any of its Subsidiaries (A) as to which there is a reasonable
possibility of an adverse determination that could reasonably be
expected to have, either individually or in the aggregate, a Material
Adverse Effect or (B) which in any manner draws into question the
validity or enforceability of this Master Agreement or any other
Operative Document.
(ii) Neither the Lessee nor any of its Subsidiaries
(A) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required
under any Environmental Law, (B) has become subject to any
Environmental Liability, (C) has received notice of any claim with
respect to any Environmental Liability or (D) knows of any basis for
any Environmental Liability, except for any failure or Environmental
Liability that would not have a Material Adverse Effect.
(fi Compliance with Laws and Agreements. The Lessee and each
Subsidiary is in compliance with (i) all applicable laws, rules, regulations,
judgments, orders and rulings of any Governmental Authority, and (ii) all
indentures, agreements or other instruments binding upon it or its properties,
except in either case where non-compliance, either singly or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
(gi Investment Company Act, Etc. Neither the Lessee nor any of
its Subsidiaries is (i) an "investment company", or is "controlled" by an
"investment company", as such terms are defined in, or subject to regulation
under, the Investment Company Act of 1940, as amended, (ii) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935, as amended or (iii) otherwise subject to any other
regulatory scheme limiting its ability to incur debt.
<PAGE>
(hi Taxes. The Lessee and its Subsidiaries and each other
Person for whose taxes the Lessee or any Subsidiary could become liable have
timely filed or caused to be filed all Federal income tax returns and all other
material tax returns that are required to be filed by them, and have paid all
taxes shown to be due and payable on such returns or on any assessments made
against it or its property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority, except (i) to the
extent the failure to do so would not have a Material Adverse Effect or (ii)
where the same are currently being contested in good faith by appropriate
proceedings and for which the Lessee or such Subsidiary, as the case may be, has
set aside on its books adequate reserves in accordance with GAAP. As of the
Initial Closing Date, the charges, accruals and reserves on the books of the
Lessee and its Subsidiaries in respect of such taxes are adequate, and no tax
liabilities that could be materially in excess of the amount so provided are
anticipated.
(ii Margin Regulations. None of the proceeds of any Advance
will be used for "purchasing" or "carrying" any "margin stock" with the
respective meanings of each of such terms under Regulation U as now and from
time to time hereafter in effect or for any purpose that violates the provisions
of the applicable Margin Regulations.
(ji ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of all such underfunded Plans.
(ki Ownership of Property.
---------------------
(i0 As of the Initial Closing Date, each of the
Lessee and its Subsidiaries has good title to, or valid leasehold or
other appropriate legal interests in, all of its real and personal
property material to the operation of its business, free and clear of
any Liens except General Permitted Liens.
(ii0 Each of the Lessee and its Subsidiaries owns, or
is licensed, or otherwise has the right, to use, all patents,
trademarks, service marks, trade names, copyrights, franchises,
licenses, and other intellectual property material to its business, and
the use thereof by the Lessee and its Subsidiaries does not infringe on
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, would not have a Material Adverse
Effect.
<PAGE>
(li Disclosure. The Lessee has disclosed to the Agent and the
Funding Parties all agreements, instruments, and corporate or other restrictions
to which the Lessee or any of its Subsidiaries is subject, and all other matters
known to any of them, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. None of the reports
(including without limitation all reports that the Lessee is required to file
with the Securities and Exchange Commission), financial statements, certificates
or other information furnished by or on behalf of the Lessee to the Agent or any
Funding Party, or anyone on their behalf, in connection with the negotiation or
syndication of this Master Agreement or any other Operative Document or
delivered hereunder or thereunder (as modified or supplemented by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, taken as a
whole, in light of the circumstances under which they were made, not misleading.
(mi Labor Relations. There are no strikes, lockouts or other
material labor disputes, or grievances against the Lessee or any of its
Subsidiaries, or, to the Lessee's knowledge, threatened against or affecting the
Lessee or any of its Subsidiaries, and no significant unfair labor practice,
charges or grievances are pending against the Lessee or any of its Subsidiaries,
or to the Lessee's knowledge, threatened against any of them before any
Governmental Authority. All payments due from the Lessee or any of its
Subsidiaries pursuant to the provisions of any collective bargaining agreement
have been paid or accrued as a liability on the books of the Lessee or any such
Subsidiary, except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.
(ni Subsidiaries. As of the Initial Closing Date, Schedule
4.1(n) sets forth the name of, the ownership interest of the Lessee in, the
jurisdiction of incorporation or organization of, and the type of, each
Subsidiary and identifies each Material Subsidiary that is a Subsidiary
Guarantor.
(oi Rights in Respect of the Leased Property. The Lessee is
not a party to any contract or agreement to sell any interest in any Leased
Property or any part thereof, other than pursuant to the Operative Documents.
(pi Hazardous Materials. (i) To the best knowledge of the
Lessee, except as described in the related Environmental Audit, on the
Closing Date for each Leased Property, there are no Hazardous Materials
present at, upon, under or within such Leased Property or released or
transported to or from such Leased Property (except in compliance in
all material respects with all Applicable Law).
(ii0 On the related Closing Date, no Governmental
Actions have been taken or, to the best knowledge of the Lessee, are in
process or have been threatened, which could reasonably be expected to
subject such Leased Property, any Lender or the Lessor with respect to
such Leased Property to any Claims or Liens under any Environmental Law
which would have a Material Adverse Effect, or would have a materially
adverse effect on the Lessor or any Lender.
(iii0 The Lessee has, or will obtain on or before the
date required by Applicable Law, all Environmental Permits necessary to
operate such Leased Property in accordance with Environmental Laws and
is complying with and has at all times complied with all such
Environmental Permits, except to the extent the failure to obtain such
Environmental Permits or to so comply would not have a Material Adverse
Effect.
<PAGE>
(iv0 Except as set forth in the related Environmental
Audit or in any notice subsequently furnished by the Lessee to the
Agent and approved by the Agent in writing prior to the respective
times that the representations and warranties contained herein are made
or deemed made hereunder, no notice, notification, demand, request for
information, citations, summons, complaint or order has been issued or
filed to or with respect to the Lessee, no penalty has been assessed on
the Lessee and no investigation or review is pending or, to its best
knowledge, threatened by any Governmental Authority or other Person in
each case relating to the Leased Property with respect to any alleged
material violation or liability of the Lessee under any Environmental
Law. To the best knowledge of the Lessee, no material notice,
notification, demand, request for information, citations, summons,
complaint or order has been issued or filed to or with respect to any
other Person, no material penalty has been assessed on any other Person
and no investigation or review is pending or threatened by any
Governmental Authority or other Person relating to such Leased Property
with respect to any alleged material violation or liability under any
Environmental Law by any other Person.
(v0 Such Leased Property and each portion thereof are
presently in compliance in all material respects with all Environmental
Laws, and, to the best knowledge of the Lessee, there are no present or
past facts, circumstances, activities, events, conditions or
occurrences regarding such Leased Property (including without
limitation the release or presence of Hazardous Materials) that could
reasonably be anticipated to (A) form the basis of a material Claim
against such Leased Property, any Funding Party or the Lessee, (B)
cause such Leased Property to be subject to any material restrictions
on ownership, occupancy, use or transferability under any Environmental
Law, (C) require the filing or recording of any notice or restriction
relating to the presence of Hazardous Materials in the real estate
records in the county or other appropriate municipality in which such
Leased Property is located, or (D) prevent or materially interfere with
the continued operation and maintenance of such Leased Property as
contemplated by the Operative Documents.
(qi Leased Property. The present condition and use of such
Leased Property conforms in all material respects with all conditions or
requirements of all existing material permits and approvals issued with respect
to such Leased Property, and the present use of such Leased Property and the
Lessee's future intended use of such Leased Property under the Lease does not,
in any material respect, violate any Applicable Law. To the best knowledge of
the Lessee, no material notices, complaints or orders of violation or
non-compliance have been issued or threatened or contemplated by any
Governmental Authority with respect to such Leased Property or any present or
intended future use thereof. All material agreements, easements and other
rights, public or private, which are necessary to permit the lawful use and
operation of such Leased Property as the Lessee intends to use such Leased
Property under the Lease and which are necessary to permit the lawful intended
use and operation of all presently intended utilities, driveways, roads and
other means of egress and ingress to and from the same have been, or to the
Lessee's best knowledge will be, obtained and are or will be in full force and
effect, and the Lessee has no knowledge of any pending material modification or
cancellation of any of the same.
<PAGE>
SECTION 4.2 Representations of the Lessor. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, in each
case, with respect to each of the Leased Properties, the Lessor represents and
warrants to the Agent, the Lenders and the Lessee as follows:
(ai Securities Act. The interest being acquired or to be
acquired by the Lessor in such Leased Property is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
provided that the Lessor shall be entitled to assign, convey or transfer its
interest in accordance with Section 6.1.
(bi Due Organization, etc. The Lessor is a limited partnership
duly organized and validly existing in good standing under the laws of Texas and
each state in which a Leased Property is located and has full power, authority
and legal right to execute, deliver and perform its obligations under the Lease,
this Master Agreement and each other Operative Document to which it is or will
be a party.
(ci Due Authorization; Enforceability, etc. This Master
Agreement and each other Operative Document to which the Lessor is or will be a
party have been or will be duly authorized, executed and delivered by or on
behalf of the Lessor and are, or upon execution and delivery will be, legal,
valid and binding obligations of the Lessor enforceable against it in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by general equitable principles.
(di No Conflict. The execution and delivery by the Lessor of
the Lease, this Master Agreement and each other Operative Document to which the
Lessor is or will be a party, are not or will not be, and the performance by the
Lessor of its obligations under each will not be, inconsistent with its
Partnership Agreement, do not and will not contravene any Applicable Law and do
not and will not contravene any provision of, or constitute a default under, any
Contractual Obligation of Lessor, do not and will not require the consent or
approval of, the giving of notice to, the registration with or taking of any
action in respect of or by, any Governmental Authority, except such as have been
obtained, given or accomplished, and the Lessor possesses all requisite
regulatory authority to undertake and perform its obligations under the
Operative Documents.
(ei Litigation. There are no pending or, to the knowledge of
the Lessor, threatened actions or proceedings against the Lessor before any
Governmental Authority with respect to any Operative Document or that would have
a material adverse effect upon the ability of the Lessor to perform its
obligations under this Master Agreement or any other Operative Documents to
which it is or will be a party.
(fi Lessor Liens. No Lessor Liens exist on the Closing Date on
the Leased Property, or any portion thereof, and the execution, delivery and
performance by the Lessor of this Master Agreement or any other Operative
Document to which it is or will be a party will not subject the Leased Property,
or any portion thereof, to any Lessor Liens.
<PAGE>
(gi Employee Benefit Plans. The Lessor is not and will not be
making its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
(hi General Partner. The sole general partner of the
----------------
Lessor is Atlantic Financial Managers, Inc.
(ii Financial Information. (A) The unaudited balance sheet of
the Lessor as of December 31, 1999 and the related statements of income,
partners' capital and cash flows for the year then ended, copies of which have
been delivered to the Agent and each Lender, fairly present, in conformity with
sound accounting principles, the financial condition of the Lessor as of such
dates and the results of operations and cash flows for such periods.
(B) Since December 31, 1999, there has been no event, act,
condition or occurrence having a material adverse effect upon the financial
condition, operations, performance or properties of the Lessor, or the ability
of the Lessor to perform in any material respect under the Operative Documents.
(ji No Offering. The Lessor has not offered the Notes
------------
to any Person in any manner that would subject the issuance thereof to
registration under the Securities Act.
SECTION 4.3 Representations of each Lender. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each
Lender represents and warrants to the Lessor and to the Lessee as follows:
(ai Securities Act. The interest being acquired or to be
acquired by such Lender in the Funded Amounts is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
provided that such Lender shall be entitled to assign, convey or transfer its
interest in accordance with Section 6.2. Such Lender is an accredited investor
as that term is defined in Rule 501(a) under the Securities Act.
(bi Employee Benefit Plans. Such Lender is not and will not be
making its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
SECTION 5
COVENANTS OF THE LESSEE AND THE LESSOR
SECTION 5.1 Financial Statements and Other Information. The Lessee will
deliver to the Agent and each Funding Party:
<PAGE>
(ai as soon as available and in any event within 90 days after
the end of each fiscal year of Lessee, a copy of the annual audited report for
such fiscal year for the Lessee and its Subsidiaries, containing consolidated
balance sheets of the Lessee and its Subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, stockholders' equity and
cash flows (together with all footnotes thereto) of the Lessee and its
Subsidiaries for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail and
reported on by KPMG L.L.P. or other independent public accountants of nationally
recognized standing (without a "going concern" or like qualification, exception
or explanation and without any qualification or exception as to scope of such
audit) to the effect that such financial statements present fairly in all
material respects the financial condition and the results of operations of the
Lessee and its Subsidiaries for such fiscal year on a consolidated basis in
accordance with GAAP and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance with
generally accepted auditing standards;
(bi as soon as available and in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of the
Lessee, an unaudited consolidated balance sheet of the Lessee and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
consolidated statements of income and cash flows of the Lessee and its
Subsidiaries for such fiscal quarter and the then elapsed portion of such fiscal
year, setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Lessee's previous fiscal
year, all certified by the chief financial officer or treasurer of the Lessee as
presenting fairly in all material respects the financial condition and results
of operations of the Lessee and its Subsidiaries on a consolidated basis in
accordance with GAAP, subject to normal year-end audit adjustments and the
absence of footnotes;
(ci concurrently with the delivery of the financial statements
referred to in clauses (a) and (b) above, a certificate of the chief financial
officer or treasurer, (i) certifying as to whether there exists a Default or
Event of Default on the date of such certificate, and if a Default or an Event
of Default then exists, specifying the details thereof and the action which the
Lessee has taken or proposes to take with respect thereto, (ii) setting forth in
reasonable detail calculations demonstrating compliance with Sections 5.11, 5.12
and 5.13, (iii) setting forth whether the Lessee is in compliance with Section
5.10(b) and (iv) stating whether any change in GAAP or the application thereof
has occurred since the date of the Lessee's audited financial statements
referred to in Section 4.1(d) or which have been previously delivered hereunder
and, if any change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(di concurrently with the delivery of the financial statements
referred to in clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained any
knowledge during the course of their examination of such financial statements of
any Default or Event of Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
<PAGE>
(ei promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials filed
with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all functions of said Commission, or with any national
securities exchange, or distributed by the Lessee to its shareholders generally,
as the case may be; and
(fi promptly following any request therefor, such other
information regarding the results of operations, business affairs and financial
condition of the Lessee or any Subsidiary as the Agent or any Funding Party may
reasonably request.
SECTION 5.2 Notices of Material Events. The Lessee will furnish to the
Agent and each Funding Party prompt written notice of the following:
(ai the occurrence of any Default or Event of Default;
(bi the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority against or, to
the knowledge of the Lessee, affecting the Lessee or any Subsidiary which, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect;
(ci the occurrence of any event or any other development by
which the Lessee or any of its Subsidiaries (i) fails to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) becomes subject to any
Environmental Liability, (iii) receives notice of any claim with respect to any
Environmental Liability, or (iv) becomes aware of any basis for any
Environmental Liability, and in each of the preceding clauses, which
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect;
(di the occurrence of any ERISA Event that alone, or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Lessee and its Subsidiaries in an aggregate amount
exceeding $2,500,000; and
(ei any other development that results in, or could
reasonably be expected to result in, a Material Adverse Effect.
(fi Each notice delivered under this Section shall be
accompanied by a written statement of a Responsible Officer setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
<PAGE>
SECTION 5.3 Existence; Conduct of Business. The Lessee will, and will
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and maintain in full force and effect its legal existence and
its respective rights, licenses, permits, privileges, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business
and will continue to engage in the same business as presently conducted or such
other businesses that are reasonably related thereto; provided, however, that
nothing in this Section shall prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 5.16.
SECTION 5.4 Compliance with Laws, Etc. The Lessee will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and
requirements of any Governmental Authority applicable to its business and
properties, including without limitation, all Environmental Laws, ERISA and
OSHA, except where the failure to do so, either individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.5 Payment of Obligations. The Lessee will, and will cause
each of its Subsidiaries to, pay and discharge at or before maturity, all of its
obligations and liabilities (including without limitation all tax liabilities
and claims that could result in a statutory Lien) before the same shall become
delinquent or in default, except where (i) (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings and (b) the Lessee or
such Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP or (ii) the failure to make payment thereof,
when aggregated with all other such unpaid obligations and liabilities, could
not reasonably be expected to result in a Material Adverse Effect or (iii) the
failure to make payment thereof could not result in a statutory Lien.
SECTION 5.6 Books and Records. The Lessee will, and will cause each of
its Subsidiaries to, keep proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities to the extent necessary to prepare the
consolidated financial statements of Lessee in conformity with GAAP.
SECTION 5.7 Visitation, Inspection, Etc. The Lessee will, and will
cause each of its Subsidiaries to, permit any representative of the Agent or any
Funding Party, to visit and inspect its properties, to examine its books and
records and to make copies and take extracts therefrom, and to discuss its
affairs, finances and accounts with any of its officers and with its independent
certified public accountants, all at such reasonable times and as often as the
Agent or any Funding Party may reasonably request after reasonable prior notice
to the Lessee; provided, however, if an Event of Default has occurred and is
continuing, no prior notice shall be required.
SECTION 5.8 Maintenance of Properties; Insurance. The Lessee will, and
will cause each of its Subsidiaries to, (a) keep and maintain good and
marketable title to all property subject to no Liens except General Permitted
Liens and keep and maintain all property material to the conduct of its business
in good working order and condition, ordinary wear and tear except where the
failure to do so, either individually or it the aggregate, could not reasonably
be expected to result in a Material Adverse Effect and (b) maintain with
financially sound and reputable insurance companies, insurance with respect to
its properties and business, and the properties and business of its
Subsidiaries, against loss or damage of the kinds customarily insured against by
companies in the same or similar businesses operating in the same or similar
locations.
<PAGE>
SECTION 5.9 Use of Proceeds. The Lessee will use the proceeds of all
Advances for the purchase and construction of the Leased Properties, and for
transaction and closing costs related thereto. No part of the proceeds of any
Advance will be used, whether directly or indirectly, for any purpose that would
violate any rule or regulation of the Board of Governors of the Federal Reserve
System, including Regulations T, U or X.
SECTION 5.10 Additional Subsidiaries; Additional Guaranties.
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(ai If any additional Material Subsidiary is acquired or
formed after the Initial Closing Date, the Lessee will, within thirty (30) days
after such Material Subsidiary is acquired or formed, notify the Agent and the
Funding Parties thereof and will cause such Material Subsidiary to become a
Subsidiary Guarantor by executing agreements in the form of Annex I to Exhibit I
and Annex I to Exhibit J in form and substance satisfactory to the Agent and the
Required Funding Parties and will cause such Material Subsidiary to deliver
simultaneously therewith similar documents applicable to such Material
Subsidiary required under Section 3.2 as reasonably requested by the Agent.
(bi If at the end of any fiscal quarter of the Lessee:
(i0 the total assets of Subsidiaries that are not
Subsidiary Guarantors constitute more than ten percent (10%) of the
total assets of the Consolidated Companies, or
(ii0 the Consolidated Net Income of Subsidiaries that
are not Subsidiary Guarantors constitute more than ten percent (10%) of
the Consolidated Net Income of the Consolidated Companies,
then the Lessee shall (A) notify the Agent thereof in the certificate delivered
pursuant to Section 5.1(c) for such fiscal quarter and (B) within 15 days
thereafter, cause the appropriate number of Subsidiaries to become Subsidiary
Guarantors (by execution of a joinder agreement to the Subsidiary Guaranty in
form and substance satisfactory to the Agent) such that the statements set forth
in clauses (i) and (ii) above are not true.
SECTION 5.11 Minimum Fixed Charge Coverage Ratio. The Consolidated
Companies will maintain, as of the last day of each Fiscal Quarter, through and
including the Fiscal Quarter ending June 3, 2001, a Fixed Charge Coverage Ratio
of not less than 2.00:1.00, and for each Fiscal Quarter thereafter, a Fixed
Charge Coverage Ratio of not less than 2.50:1.00.
SECTION 5.12 Maximum Adjusted Total Debt to EBITDAR Ratio. The
Consolidated Companies will maintain, as of the end of each Fiscal Quarter, an
Adjusted Total Debt to EBITDAR Ratio of not greater than 3.00:1.00.
SECTION 5.13 Maximum Adjusted Total Debt to Adjusted Total Capital
Ratio. The Consolidated Companies will maintain, as of the end of each Fiscal
Quarter, an Adjusted Total Debt to Adjusted Total Capital Ratio of not greater
than 0.60:1.00.
<PAGE>
SECTION 5.14 Indebtedness. The Lessee will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:
(ai Indebtedness created pursuant to the Operative
Documents and the Credit Agreement;
(bi Indebtedness existing on the date hereof and set forth on
Schedule 5.14 and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof (immediately prior
to giving effect to such extension, renewal or replacement) or shorten the
maturity or the weighted average life thereof;
(ci Indebtedness of the Lessee or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets secured by a Lien on any such
assets prior to the acquisition thereof; provided, that such Indebtedness is
incurred prior to or within 180 days after such acquisition or the completion of
such construction or improvements or extensions, renewals, and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof (immediately prior to giving effect to such extension, renewal or
replacement) or shorten the maturity or the weighted average life thereof;
provided, further, that the aggregate principal amount of such Indebtedness does
not exceed $5,000,000;
(di Indebtedness of the Lessee owing to any Subsidiary and of
any Subsidiary owing to the Lessee or any other Subsidiary; provided, however,
that any such Indebtedness that is owed to a Subsidiary that is not a Subsidiary
Obligor shall be subject to Section 5.17;
(ei Guaranties by the Lessee of Indebtedness of any Subsidiary
and by any Subsidiary of Indebtedness of the Lessee or any other Subsidiary;
provided, however, that Guaranties by any Obligor of Indebtedness of any
Subsidiary that is not a Subsidiary Obligor shall be subject to Section 5.17;
(fi Subordinated Debt of the Lessee (but not Subsidiaries
of the Lessee);
(gi Indebtedness in respect of obligations under Hedging
Agreements permitted by Section 5.23;
(hi Synthetic Lease Obligations so long as no Default or Event
of Default has occurred and is continuing or would result after giving pro forma
effect to the incurrence of such Synthetic Lease Obligation, including without
limitation under the covenants set forth in Sections 5.11, 5.12 and 5.13; and
<PAGE>
(ii other unsecured Indebtedness of the Lessee and its
Subsidiaries in an aggregate principal amount at any time outstanding not to
exceed 10% of Consolidated Net Worth of the Lessee as calculated on the last day
of Fiscal Quarter for which the Lessee has delivered, or is required to have
delivered, financial statements to the Funding Parties pursuant to this Master
Agreement.
SECTION 5.15 Negative Pledge. The Lessee will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien on
any of its assets or property now owned or hereafter acquired or, except:
(ai Permitted Encumbrances;
(bi any Liens on any property or asset of the Lessee or any
Subsidiary existing on the Initial Closing Date set forth on Schedule 5.15;
provided, that such Lien shall not apply to any other property or asset of the
Lessee or any Subsidiary;
(ci purchase money Liens upon or in any fixed or capital
assets to secure the purchase price or the cost of construction or improvement
of such fixed or capital assets or to secure Indebtedness incurred solely for
the purpose of financing the acquisition, construction or improvement of such
fixed or capital assets (including Liens securing any Capital Lease
Obligations); provided, however, that (i) such Lien secures Indebtedness
permitted by Section 5.14(c), (ii) such Lien attaches to such asset concurrently
or within 180 days after the acquisition, improvement or completion of the
construction thereof; (iii) such Lien does not extend to any other asset; and
(iv) the Indebtedness secured thereby does not exceed the cost of acquiring,
constructing or improving such fixed or capital assets;
(di any Lien (i) existing on any asset of any Person at the
time such Person becomes a Subsidiary of the Lessee, (ii) existing on any asset
of any Person at the time such Person is merged with or into the Lessee or any
Subsidiary of the Lessee or (iii) existing on any asset prior to the acquisition
thereof by the Lessee or any Subsidiary of the Lessee; provided, however, that
any such Lien was not created in the contemplation of any of the foregoing and
any such Lien secures only those obligations which it secures on the date that
such Person becomes a Subsidiary or the date of such merger or the date of such
acquisition; and
(ei extensions, renewals, or replacements of any Lien referred
to in paragraphs (a) through (d) of this Section; provided, however, that the
principal amount of the Indebtedness secured thereby is not increased and that
any such extension, renewal or replacement is limited to the assets originally
encumbered thereby.
SECTION 5.16 Fundamental Changes.
<PAGE>
(ai Except as permitted in Section 5.19, the Lessee will not,
and will not permit any Subsidiary to, merge into or consolidate into any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, lease, transfer or otherwise dispose of (in a single transaction or a
series of transactions) all or substantially all of its assets (in each case,
whether now owned or hereafter acquired) or all or substantially all of the
stock of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired) or liquidate or dissolve; provided, however, that if at the time
thereof and immediately after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing (i) the Lessee or any Subsidiary
may merge with a Person if the Lessee (or such Subsidiary if the Lessee is not a
party to such merger) is the surviving Person, (ii) any Subsidiary may merge
into another Subsidiary; provided, however, that if any party to such merger is
a Subsidiary Guarantor, the Subsidiary Guarantor shall be the surviving Person,
(iii) any Subsidiary may sell, transfer, lease or otherwise dispose of all or
substantially all of its assets to the Lessee or to a Subsidiary Guarantor and
(iv) any Subsidiary may liquidate or dissolve into a Subsidiary Guarantor or
into the Lessee if the Lessee determines in good faith that such liquidation or
dissolution is in the best interests of the Lessee and is not materially
disadvantageous to the Funding Parties; provided, however, that any such merger
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 5.17.
(bi The Lessee will not, and will not permit any of its
Subsidiaries to, engage in any business other than businesses of the type
conducted by the Lessee and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
SECTION 5.17 Investments, Loans, Etc. The Lessee will not, and will not
permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Subsidiary prior to
such merger), any common stock, evidence of indebtedness or other securities
(including any option, warrant, or other right to acquire any of the foregoing)
of, make or permit to exist any loans or advances to, Guaranty any obligations
of, or make or permit to exist any investment or any other interest in, any
other Person (all of the foregoing being collectively called "Investments"), or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person that constitute a business unit, or create or
form any Subsidiary, except:
(ai Investments (other than Permitted Investments)
existing on the date hereof and set forth on Schedule 5.17 (including
Investments in Subsidiaries);
(bi Permitted Investments;
(ci Guaranties constituting Indebtedness permitted by
Section 5.14;
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(di Investments made by any Obligor in or to any other
Obligor;
(ei loans or advances to employees, officers or
directors of the Lessee or any Subsidiary
in the ordinary course of business for travel, relocation and related expenses;
(fi Hedging Agreements permitted by Section 5.23;
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(gi promissory notes issued to the Lessee as a part of
the purchase price in connection
with the sale, if any, of American Cafe, Tia's or L&N Seafood;
<PAGE>
(hi Investments in franchise operators through the
Franchise Partner Program;
(ii Investments received in settlement of Indebtedness
created in the ordinary course of business;
(ji Investments in the stock or other assets of any other
Person that is engaged in a business permitted by Section 5.16(b) that, as a
result of such Investment, becomes a Subsidiary of Lessee (other than Hostile
Acquisitions); provided, however, that the aggregate purchase price of
Investments made pursuant to this subsection (j) shall not exceed at any time
ten percent (10%) of the Consolidated Net Worth of the Lessee as calculated on
the last day of Fiscal Quarter for which the Lessee has delivered, or is
required to have delivered, financial statements to the Funding Parties pursuant
to this Master Agreement; and
(ki Investments in common stock of the Lessee to the
extent permitted under Section 5.18.
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SECTION 5.18 Restricted Payments. The Lessee will not, and will not
permit its Subsidiaries to, (x) declare or make, or agree to pay or make,
directly or indirectly, any dividend on any class of its stock, or (y) make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, retirement, defeasance or other acquisition of,
any shares of common stock or Indebtedness subordinated to the Obligations of
the Lessee or any options, warrants, or other rights to purchase such common
stock or such Indebtedness, whether now or hereafter outstanding (each, a
"Restricted Payment"), except for (i) dividends payable by the Lessee solely in
shares of any class of its common stock, (ii) Restricted Payments made by any
Subsidiary to the Lessee or to another Obligor and (iii) cash dividends paid on,
and cash redemptions of, the common stock of the Lessee; provided, however, that
no Event of Default has occurred and is continuing before or after giving effect
to the payment of such dividend or redemption.
SECTION 5.19 Sale of Assets. The Lessee will not, and will not permit
any of its Subsidiaries to, convey, sell, lease, assign, transfer or otherwise
dispose of, any of its assets, business or property, whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares
of such Subsidiary's common stock to any Person other than the Lessee or any
wholly owned Subsidiary of the Lessee or a Subsidiary Obligor (or to qualify
directors if required by applicable law), except:
(ai the sale or other disposition for fair market value of
obsolete or worn out property or other property not necessary for operations,
disposed of in the ordinary course of business;
(bi the sale of inventory and Permitted Investments in
the ordinary course of business;
<PAGE>
(ci the sale, lease or transfer of assets of any
Subsidiary to the Lessee or any other Obligor;
(di the sale of any assets of American Cafe, Tia's or L&N;
(ei the sale of any assets pertaining to Ruby Tuesday
units pursuant to the Lessee's Franchise Partner Program; and
(fi any other sale of the Lessee's assets with an aggregate
book value, when aggregated with all other such sales since the Initial Closing
Date, not exceeding 7.5% of the aggregate book value of all of the Lessee's
assets on the date of such transfer; provided, however, that no Default or Event
of Default has occurred and is continuing or would occur as a result of such
transaction.
SECTION 5.20 Transactions with Affiliates. The Lessee will not, and
will not permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Lessee or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among the Lessee and its wholly owned Subsidiaries not involving any
other Affiliates and (c) any Restricted Payment permitted by Section 5.18.
SECTION 5.21 Restrictive Agreements. The Lessee will not, and will not
permit any Subsidiary to, directly or indirectly, enter into, incur or permit to
exist any agreement that prohibits, restricts or imposes any condition upon (a)
the ability of the Lessee or any Subsidiary to create, incur or permit any Lien
upon any of its assets or properties, whether now owned or hereafter acquired,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to its common stock, to make or repay loans or advances to the
Lessee or any other Subsidiary, to Guaranty Indebtedness of the Lessee or any
other Subsidiary or to transfer any of its property or assets to the Lessee or
any Subsidiary of the Lessee; provided, however, that (i) the foregoing shall
not apply to restrictions or conditions imposed by law or by this Master
Agreement or any other Operative Document, (ii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is sold and such sale is permitted
hereunder, and (iii) clause (a) shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted under
Section 5.14(c) of this Master Agreement if such restrictions and conditions
apply only to the property or assets securing such Indebtedness.
<PAGE>
SECTION 5.22 Sale and Leaseback Transactions. The Lessee will not, and
will not permit any of the Subsidiaries to, enter into any arrangement, directly
or indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred (such arrangement referred to as a "Sale Leaseback").
Notwithstanding the preceding limitation, the Lessee may enter into a Sale
Leaseback, provided the aggregate amount of such transactions does not exceed
$50,000,000.
SECTION 5.23 Hedging Agreements. The Lessee will not, and will not
permit any of the Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Lessee or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities. Solely for the avoidance
of doubt, the Lessee acknowledges that a Hedging Agreement entered into for
speculative purposes or of a speculative nature (which shall be deemed to
include any Hedging Agreement under which the Lessee or any of the Subsidiaries
is or may become obliged to make any payment (i) in connection with the purchase
by any third party of any common stock or any Indebtedness or (ii) as a result
of changes in the market value of any common stock or any Indebtedness) is not a
Hedging Agreement entered into in the ordinary course of business to hedge or
mitigate risks.
SECTION 5.24 Amendment to Material Documents. The Lessee will not, and
will not permit any Subsidiary to, amend, modify or waive any of its rights in a
manner materially adverse to the Lessee's or any Subsidiary's duties or the
Funding Parties' rights under this Master Agreement or any other Operative
Document under (a) its certificate of incorporation, bylaws or other
organizational documents or (b) any contract, agreement, document, or instrument
to which the Lessee or any Subsidiary is a party.
SECTION 5.25 Accounting Changes. The Lessee will not, and will not
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP or approved by the Lessee's
independent accountants, or change the fiscal year of the Lessee or of any
Subsidiary, except to change the fiscal year of a Subsidiary to conform its
fiscal year to that of the Lessee and except that Lessee or any Subsidiary may
change its fiscal year end from the first Sunday following May 30 to the first
Tuesday or Wednesday following May 30.
SECTION 5.26 ERISA. The Lessee will not, and will not permit any
Subsidiary to engage in any transaction in connection with which the Lessee or
such Subsidiary could reasonably be expected to be subject to a civil penalty
assessed pursuant to ERISA which would have a Material Adverse Effect on the
Lessee or such Subsidiary.
SECTION 5.27 Further Assurances. Upon the written request of the Lessor
or the Agent, the Lessee, at its own cost and expense, will cause all financing
statements (including precautionary financing statements), fixture filings and
other similar documents, to be recorded or filed at such places and times in
such manner, as may be necessary to preserve, protect and perfect the interest
of the Lessor, the Agent and the Lenders in the related Leased Property as
contemplated by the Operative Documents.
<PAGE>
SECTION 5.28 Additional Required Appraisals. If, as a result of any
change in Applicable Law after the date hereof, an appraisal of all or any of
the Leased Property is required during the Lease Term under Applicable Law with
respect to any Funding Party's interest therein, such Funding Party's Funded
Amount with respect thereto or the Operative Documents, then the Lessee shall
pay the reasonable cost of such appraisal.
SECTION 5.29 Lessor's Covenants. The Lessor covenants and agrees that,
unless the Agent and the Lenders shall have otherwise consented in writing:
(a) it shall not amend its Partnership Agreement,
except to admit limited partners in
connection with lease transactions similar to the Transactions;
(b) it shall not incur any indebtedness or other monetary
obligation or liability, other than (i) non-recourse indebtedness incurred in
connection with the Transactions or similar transactions and (ii) operating
expenses incurred in the ordinary course of business that are not delinquent;
(c) the proceeds of the Loans received from the Lenders will
be used by the Lessor solely to acquire the Leased Property and to pay the
Lessee for certain closing and transaction costs associated therewith and for
the costs of Construction. No portion of the proceeds of the Loans will be used
by the Lessor (i) in connection with, whether directly or indirectly, any tender
offer for, or other acquisition of, stock of any corporation with a view towards
obtaining control of such other corporation, (ii) directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock, or (iii) for any purpose in violation of any
Applicable Law;
(d) it shall not engage in any business or activity, or invest
in any Person, except for activities similar to its activities conducted on the
date hereof, the Transactions and lease transactions similar to the
Transactions;
(e) it will maintain tangible net worth in an amount no less
than the sum of (i) $100,000 plus (ii) 3% of its total assets (calculated
assuming no reduction in the value of any leased property from its original cost
to the Lessor);
(f) it will deliver to the Agent, as soon as available and in
any event within 90 days after the end of each fiscal year, a balance sheet of
the Lessor as of the end of such fiscal year and the related statements of
income, partners' capital and cash flows for such fiscal year, setting forth in
each case in comparative form the figures for the previous fiscal year, together
with copies of its tax returns, all certified by an officer of the general
partner (and if the Lessor ever prepares audited financial statements, it shall
deliver copies thereto the Agent);
<PAGE>
(g) it will permit the Agent and its representatives to
examine, and make copies from, the Lessor's books and records, and to visit the
offices and properties of the Lessor for the purpose of examining such
materials, and to discuss the Lessor's performance hereunder with any of its, or
its general partner's, officers and employees;
(h) it shall not consent to or suffer or permit any Lien
against the Leased Property,
other than as expressly contemplated pursuant to the Operative Documents;
(i) it shall not consent to or suffer or permit the creation
of any easement or other restriction against the Leased Property other than as
permitted pursuant to Article VI of the Lease; and
(j) it shall promptly discharge each Lessor Lien and shall
indemnify the Lenders and the Lessee for any diminution in value of any Leased
Property resulting from such Lessor Liens.
SECTION 6
TRANSFERS BY LESSOR AND LENDERS
SECTION 6.1 Lessor Transfers. The Lessor shall not assign, convey or
otherwise transfer all or any portion of its right, title or interest in, to or
under any Leased Property or any of the Operative Documents without the prior
written consent of the Lenders and, unless an Event of Default has occurred and
is continuing, the Lessee. Any proposed transferee of the Lessor shall make the
representation set forth in Section 4.2(b) to the other parties hereto.
<PAGE>
SECTION 6.2 Lender Transfers. (a) Any Lender may assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Master Agreement and the Loan Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment of the entire remaining amount of the assigning
Lender's Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Agent) shall not be less
than $1,000,000, unless each of the Agent and, so long as no Event of Default
has occurred and is continuing, the Lessee otherwise consent (each such consent
not to be unreasonably withheld or delayed), (ii) each partial assignment shall
be made as an assignment of a proportionate part of all the assigning Lender's
rights and obligations under this Master Agreement and the Loan Agreement with
respect to the Loan or the Commitment assigned, except that this clause (ii)
shall not prohibit any Lender from assigning all or a portion of its rights and
obligations among separate Commitments on a non-pro rata basis, and (iii) the
parties to each assignment shall execute and deliver to the Agent an Assignment
and Acceptance, together with a processing and recordation fee of $1,000, and
the Eligible Assignee, if it shall not be a Lender, shall deliver to the Agent
an administrative questionnaire. Each assignment by a Lender shall be of a pro
rata portion of such Lender's A Loans and B Loans. Subject to acceptance and
recording thereof by the Agent pursuant to paragraph (b) of this Section, from
and after the effective date specified in each Assignment and Acceptance, the
Eligible Assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Master Agreement and the Loan Agreement, and
the assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Master Agreement and the Loan Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Master Agreement and the Loan Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Section 7. Any
assignment or transfer by a Lender of rights or obligations under this Master
Agreement and the Loan Agreement that does not comply with this paragraph shall
be treated for purposes of this Master Agreement and the Loan Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
(b) The Agent, acting solely for this purpose as an agent of
the Lessee, shall maintain at one of its offices in Atlanta, Georgia a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Lessee, the Agent, the Lessor and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Master Agreement and the Loan
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Lessee, the Lessor and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
<PAGE>
(c) Any Lender may, without the consent of, or notice to, the
Lessee, the Agent or the Lessor sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's rights
and/or obligations under this Master Agreement and the Loan Agreement (including
all or a portion of its Commitment and/or the Loans owing to it); provided that
(i) such Lender's obligations under this Master Agreement and the Loan Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Lessee, the Agent, the Lessor and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Master Agreement and the Loan Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Master Agreement
and the Loan Agreement and to approve any amendment, modification or waiver of
any provision of this Master Agreement and the Loan Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver with
respect to the following to the extent affecting such Participant: (i) increase
the Commitment of any Lender without the written consent of such Lender, (ii)
reduce the principal amount of any Loan or reduce the rate of interest thereon,
or reduce any fees payable hereunder, without the written consent of each Lender
affected thereby, (iii) postpone the date fixed for any payment of any principal
of, or interest on, any Loan or interest thereon or any fees hereunder or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
for the termination or reduction of any Commitment, without the written consent
of each Lender affected thereby, (iv) change Section 3 of the Loan Agreement in
a manner that would alter the pro rata sharing of payments required thereby ,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders which are required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the consent of each Lender; (vi) release any
guarantor or limit the liability of any such guarantor under any guaranty
agreement without the written consent of each Lender except to the extent such
release is expressly provided under the terms of the Guaranty Agreement or the
Subsidiary Guaranty; or (vii) release all or substantially all collateral (if
any) securing any of the Obligations. Subject to paragraph (d) of this Section,
the Lessee agrees that each Participant shall be entitled to the benefits of
Section 7, to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (a) of this Section.
(d) A Participant shall not be entitled to receive any greater
payment under Section 7.5 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Lessee's prior
written consent.
(e) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Master Agreement and the
Loan Agreement to secure obligations of such Lender, including without
limitation any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment of a security interest shall
release a Lender from any of its obligations hereunder or under the Loan
Agreement or substitute any such pledgee or assignee for such Lender as a party
hereto.
SECTION 7
INDEMNIFICATION
SECTION 7.1 General Indemnification. The Lessee agrees, whether or not
any of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and hold harmless each
Indemnitee, on an After-Tax Basis, from and against, any and all Claims that may
be imposed on, incurred by or asserted, or threatened to be asserted, against
such Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to any
such Claim by any other Person and whether or not such Claim arises or accrues
prior to any Closing Date or after the Lease Termination Date, in any way
relating to or arising out of:
(a) any of the Operative Documents or any of the
transactions contemplated thereby, and
any amendment, modification or waiver in respect thereof; or
(b) any Land, any Building or any part thereof or i
nterest therein, including any Ground Lease;
<PAGE>
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition, substitution, storage, transfer of title, redelivery, use,
financing, refinancing, disposition, operation, condition, sale
(including, without limitation, any sale pursuant to the Lease), return
or other disposition of all or any part of any interest in any Leased
Property or the imposition of any Lien, other than a Lessor Lien (or
incurring of any liability to refund or pay over any amount as a result
of any Lien, other than a Lessor Lien) thereon, including, without
limitation: (1) Claims or penalties arising from any violation or
alleged violation of law or in tort (strict liability or otherwise),
(2) latent or other defects, whether or not discoverable, (3) any Claim
based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting
title to any Leased Property or any part thereof, (4) the making of any
Alterations in violation of any standards imposed by any insurance
policies required to be maintained by the Lessee pursuant to the Lease
which are in effect at any time with respect to any Leased Property or
any part thereof, (5) any Claim for patent, trademark or copyright
infringement, (6) Claims arising from any public improvements with
respect to any Leased Property resulting in any charge or special
assessments being levied against any Leased Property or any Claim for
utility "tap-in" fees, and (7) Claims for personal injury or real or
personal property damage occurring, or allegedly occurring, on any
Land, Building or Leased Property;
(d) the offer, issuance, sale or delivery of the Notes by
the Lessor;
(e) the breach or alleged breach by the Lessee of any
representation or warranty made by it or deemed made by it in any
Operative Document or any certificate required to be delivered by
any Operative Document;
(f) the retaining or employment of any broker, finder or
financial advisor by the Lessee to act on its behalf in connection with
this Master Agreement or the Transaction, or the incurring of any fees
or commissions to which the Lessor, the Agent or any Lender might be
subjected by virtue of their entering into the transactions
contemplated by this Master Agreement (other than fees or commissions
due to any broker, finder or financial advisor retained by the Lessor,
the Agent or any Lender);
(g) the existence of any Lien on or with respect to any Leased
Property, the Construction, any Basic Rent or Supplemental Rent, title
to any Leased Property, or any interest therein, including any Liens
which arise out of the possession, use, occupancy, construction, repair
or rebuilding of any Leased Property or by reason of labor or materials
furnished or claimed to have been furnished to the Lessee, or any of
its contractors or agents or by reason of the financing of any
personalty or equipment purchased or leased by the Lessee or
Alterations constructed by the Lessee, except in all cases the Liens
listed as items (a) and (b) in the definition of Permitted Liens;
<PAGE>
(h) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction described
in Section 4975(c) of the Code; or
(i) any act or omission by the Lessee under any Purchase
Agreement or any other Operative Document, and any breach of any
requirement, condition, restriction or limitation in any Deed, Purchase
Agreement or Ground Lease;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 7.1 for any of the following: (1) any Claim to the extent
that such Claim results from the willful misconduct or gross negligence of such
Indemnitee, or (2) any Claim resulting from Lessor Liens which the Lessor is
responsible for discharging under the Operative Documents, in each case, as
determined by a court of competent jurisdiction in a final and nonappealable
judgment, and, provided, further, that with respect to each Construction Land
Interest, the Lessee's indemnity obligations with respect to such Leased
Property, shall be governed by Section 3.4 of the Construction Agency Agreement
during the Construction Term therefor. It is expressly understood and agreed
that the indemnity provided for herein shall survive the expiration or
termination of, and shall be separate and independent from any other remedy
under this Master Agreement, the Lease or any other Operative Document. All
amounts payable by the Lessee pursuant to this Section 7.1 shall be Supplemental
Rent.
SECTION 7.2 Environmental Indemnity. In addition to and without
limitation of Section 7.1 or Section 3.4 of the Construction Agency Agreement,
the Lessee agrees to indemnify, hold harmless and defend each Indemnitee from
and against any and all claims (including without limitation third party claims
for personal injury or real or personal property damage), losses (including but
not limited to any loss of value of any Leased Property), damages, liabilities,
fines, penalties, charges, suits, settlements, demands, administrative and
judicial proceedings (including informal proceedings) and orders, judgments,
remedial action, requirements, enforcement actions of any kind, and all
reasonable costs and expenses actually incurred in connection therewith
(including, but not limited to, reasonable attorneys' and/or paralegals' fees
and expenses), including, but not limited to, all costs incurred in connection
with any investigation or monitoring of site conditions or any clean-up,
remedial, removal or restoration work by any federal, state or local government
agency, arising directly or indirectly, in whole or in part, out of
(i) the presence on or under any Land of any Hazardous
Materials, or any releases or
discharges of any Hazardous Materials on, under, from or onto any Land,
(ii) any activity, including, without limitation,
construction, carried on or undertaken on or off any Land, and whether
by the Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of the Lessee or any predecessor in
title, or any other Person, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of
any Hazardous Materials that at any time are located or present on or
under or that at any time migrate, flow, percolate, diffuse or in any
way move onto or under any Land,
<PAGE>
(iii) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource damages),
or death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Environmental Laws, in
each case to the extent related to any Leased Property,
(iv) any claim concerning any Leased Property's lack of
compliance with Environmental Laws, or any act or omission causing an
environmental condition on or with respect to any Leased Property that
requires remediation or would allow any governmental agency to record a
lien or encumbrance on the land records, or
(v) any residual contamination on or under any Land, or
affecting any natural resources on any Land, and to any contamination
of any property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Materials on or from any Leased Property; in each case
irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations, codes and
ordinances;
in any case with respect to the matters described in the foregoing clauses (i)
through (v) that arise or occur
(w) prior to or during the Lease Term,
(x) at any time during which the Lessee or any Affiliate
thereof owns any interest in or otherwise occupies or possesses any
Leased Property or any portion thereof,
(y) during any period after and during the continuance of any
Event of Default or
(z) during any period of three years following the date
an Indemnitee takes possession of any Leased Property;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 7.2 for any Claim to the extent that such Claim results from
the willful misconduct or gross negligence of such Indemnitee, as determined by
a court of competent jurisdiction in a final and nonappealable judgment. It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of and shall be separate and independent
from any other remedy under this Master Agreement, the Lease or any other
Operative Document. All amounts payable by the Lessee pursuant to this Section
7.2 shall be Supplemental Rent.
<PAGE>
SECTION 7.3 Proceedings in Respect of Claims. With respect to any
amount that the Lessee is requested by an Indemnitee to pay by reason of Section
7.1 or 7.2, such Indemnitee shall, if so requested by the Lessee and prior to
any payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of, or under the control of,
such Indemnitee to substantiate properly the requested payment. In case any
action, suit or proceeding shall be brought against any Indemnitee, such
Indemnitee promptly shall notify the Lessee of the commencement thereof
(provided that the failure of such Indemnitee to promptly notify the Lessee
shall not affect the Lessee's obligation to indemnify hereunder except to the
extent that the Lessee's ability to contest is materially prejudiced by such
failure), and the Lessee shall be entitled, at its expense, to participate in,
and, to the extent that the Lessee desires to, assume and control the defense
thereof with counsel reasonably satisfactory to such Indemnitee; provided,
however, that such Indemnitee may pursue a motion to dismiss such Indemnitee
from such action, suit or proceeding with counsel of such Indemnitee's choice at
the Lessee's expense; and provided further that the Lessee may assume and
control the defense of such proceeding only if the Lessee shall have
acknowledged in writing its obligations to fully indemnify such Indemnitee in
respect of such action, suit or proceeding, the Lessee shall pay all reasonable
costs and expenses related to such action, suit or proceeding as and when
incurred and the Lessee shall keep such Indemnitee fully apprised of the status
of such action suit or proceeding and shall provide such Indemnitee with all
information with respect to such action suit or proceeding as such Indemnitee
shall reasonably request; and, provided further, that the Lessee shall not be
entitled to assume and control the defense of any such action, suit or
proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any possibility of
imposition of criminal liability or any material risk of material civil
liability on such Indemnitee or (y) such action, suit or proceeding will involve
a material risk of the sale, forfeiture or loss of, or the creation of any Lien
(other than a Permitted Lien) on any Leased Property or any part thereof unless
the Lessee shall have posted a bond or other security satisfactory to the
relevant Indemnitees in respect to such risk or (z) the control of such action,
suit or proceeding would involve an actual or potential conflict of interest,
(B) such proceeding involves Claims not fully indemnified by the Lessee which
the Lessee and the Indemnitee have been unable to sever from the indemnified
claim(s), or (C) an Event of Default has occurred and is continuing. The
Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by the Lessee in accordance with the
foregoing.
If the Lessee fails to fulfill the conditions to the Lessee's assuming
the defense of any claim after receiving notice thereof on or prior to the date
that is 15 days prior to the date that an answer or response is required, the
Indemnitee may undertake such defense, at the Lessee's expense. The Lessee shall
not enter into any settlement or other compromise with respect to any Claim in
excess of $1,000,000 which is entitled to be indemnified under Section 7.1 or
7.2 without the prior written consent of the related Indemnitee, which consent
shall not be unreasonably withheld. Unless an Event of Default shall have
occurred and be continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any claim which is entitled to be indemnified
under Section 7.1 or 7.2 without the prior written consent of the Lessee, which
consent shall not be unreasonably withheld, unless such Indemnitee waives its
right to be indemnified under Section 7.1 or 7.2 with respect to such Claim.
<PAGE>
Upon payment in full of any Claim by the Lessee pursuant to Section 7.1
or 7.2 to or on behalf of an Indemnitee, the Lessee, without any further action,
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessee and give
such further assurances as are reasonably necessary or advisable to enable the
Lessee vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 7.1 or 7.2
shall be paid to such Indemnitee promptly upon, but in no event later than 30
days after, receipt of a written demand therefor from such Indemnitee,
accompanied by a written statement describing in reasonable detail the basis for
such indemnity and the computation of the amount so payable.
If for any reason the indemnification provided for in Section 7.1 or
7.2 is unavailable to an Indemnitee or is insufficient to hold an Indemnitee
harmless, then the Lessee agrees to contribute to the amount paid or payable by
such Indemnitee as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect not only the relative benefits received
by such Indemnitee on the one hand and by the Lessee on the other hand but also
the relative fault of such Indemnitee as well as any other relevant equitable
considerations. It is expressly understood and agreed that the right to
contribution provided for herein shall survive the expiration or termination of
and shall be separate and independent from any other remedy under this Master
Agreement, the Lease or any other Operative Document.
<PAGE>
SECTION 7.4 General Tax Indemnity. (a) Tax Indemnity. Except as
otherwise provided in this Section 7.4, the Lessee shall pay on an After-Tax
Basis, and on written demand shall indemnify and hold each Tax Indemnitee
harmless from and against, any and all fees (including, without limitation,
documentation, recording, license and registration fees), taxes (including,
without limitation, income, gross receipts, sales, rental, use, turnover,
value-added, property, excise and stamp taxes), levies, imposts, duties,
charges, assessments or withholdings of any nature whatsoever, together with any
penalties, fines or interest thereon or additions thereto (any of the foregoing
being referred to herein as "Taxes" and individually as a "Tax" (for the
purposes of this Section 7.4, the definition of "Taxes" includes amounts imposed
on, incurred by, or asserted against each Tax Indemnitee as the result of any
prohibited transaction, within the meaning of Section 406 or 407 of ERISA or
Section 4975(c) of the Code, arising out of the transactions contemplated hereby
or by any other Operative Document)) imposed on or with respect to any Tax
Indemnitee, the Lessee, any Leased Property or any portion thereof or any Land,
or any sublessee or user thereof, by the United States or by any state or local
government or other taxing authority in the United States in connection with or
in any way relating to (i) the acquisition, financing, mortgaging, construction,
preparation, installation, inspection, delivery, non-delivery, acceptance,
rejection, purchase, ownership, possession, rental, lease, sublease,
maintenance, repair, storage, transfer of title, redelivery, use, operation,
condition, sale, return or other application or disposition of all or any part
of any Leased Property or the imposition of any Lien (or incurrence of any
liability to refund or pay over any amount as a result of any Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or earnings arising from or
received with respect to any Leased Property or any part thereof, or any
interest therein or any applications or dispositions thereof, (iii) any other
amount paid or payable pursuant to the Notes, or any other Operative Documents,
(iv) any Leased Property, any Land or any part thereof or any interest therein
(including, without limitation, all assessments payable in respect thereof,
including, without limitation, all assessments noted on the related Title
Policy), (v) all or any of the Operative Documents, any other documents
contemplated thereby, any amendments and supplements thereto, and (vi) otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents.
(b) Exclusions from General Tax Indemnity. Section 7.4(a)
------------------------------------- --------------
shall not apply to:
(i) Taxes on, based on, or measured by or with
respect to net income of the Lessor, the Agent and the Lenders
(including, without limitation, minimum Taxes, capital gains Taxes,
Taxes on or measured by items of tax preference or alternative minimum
Taxes) other than (A) any such Taxes that are, or are in the nature of,
sales, use, license, rental or property Taxes, and (B) withholding
Taxes imposed by the United States or any state in which Leased
Property is located (i) on payments with respect to the Notes, to the
extent imposed by reason of a change in Applicable Law occurring after
the date on which the holder of such Note became the holder of such
Note or (ii) on Rent, to the extent the net payment of Rent after
deduction of such withholding Taxes would be less than amounts
currently payable with respect to the Funded Amounts;
(ii) Taxes on, based on, or in the nature of or
measured by Taxes on doing business, business privilege, franchise,
capital, capital stock, net worth, or mercantile license or similar
taxes other than (A) any increase in such Taxes imposed on such Tax
Indemnitee by any state in which Leased Property is located, net of any
decrease in such taxes realized by such Tax Indemnitee, to the extent
that such tax increase would not have occurred if on each Funding Date
the Lessor and the Lenders had advanced funds to the Lessee in the form
of loans secured by the Leased Property in an amount equal to the
Funded Amounts funded on such Funding Date, with debt service for such
loans equal to the Basic Rent payable on each Payment Date and a
principal balance at the maturity of such loans in a total amount equal
to the Funded Amounts at the end of the Lease Term, or (B) any Taxes
that are or are in the nature of sales, use, rental, license or
property Taxes relating to any Leased Property;
(iii) Taxes that are based on, or measured by, the
fees or other compensation received by a Person acting as Agent (in its
individual capacities) or any Affiliate of any thereof for acting as
trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or
omission, or are attributable to any period of time, that occurs after
the earliest of (A) the expiration of the Lease Term with respect to
any Leased Property and, if such Leased Property is required to be
returned to the Lessor in accordance with the Lease, such return and
(B) the discharge in full of the Lessee's obligations to pay the Lease
Balance, or any amount determined by reference thereto, with respect to
any Leased Property and all other amounts due under the Lease, unless
such Taxes relate to acts, events or matters occurring prior to the
earliest of such times or are imposed on or with respect to any
payments due under the Operative Documents after such expiration or
discharge;
<PAGE>
(v) Taxes imposed on a Tax Indemnitee that result
from any voluntary sale, assignment, transfer or other disposition or
bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of any
interest in any Leased Property or any part thereof, or any interest
therein or any interest or obligation arising under the Operative
Documents, or from any sale, assignment, transfer or other disposition
of any interest in such Tax Indemnitee or any related Tax Indemnitee,
it being understood that each of the following shall not be considered
a voluntary sale: (A) any substitution, replacement or removal of any
of the Leased Property by the Lessee, (B) any sale or transfer
resulting from the exercise by the Lessee of any termination option,
any purchase option or sale option, (C) any sale or transfer while an
Event of Default shall have occurred and be continuing under the Lease,
and (D) any sale or transfer resulting from the Lessor's exercise of
remedies under the Lease;
(vi) any Tax which is being contested in
accordance with the provisions of
Section 7.4(c), during the pendency of such contest;
--------------
(vii) any Tax that is imposed on a Tax Indemnitee as
a result of such Tax Indemnitee's gross negligence or willful
misconduct (other than gross negligence or willful misconduct imputed
to such Tax Indemnitee solely by reason of its interest in any Leased
Property);
(viii) any Tax that results from a Tax Indemnitee
engaging, with respect to any Leased Property, in transactions other
than those permitted by the Operative Documents;
(ix) to the extent any interest, penalties or
additions to tax result in whole or in part from the failure of a Tax
Indemnitee to file a return or pay a Tax that it is required to file or
pay in a proper and timely manner, unless such failure (A) results from
the transactions contemplated by the Operative Documents in
circumstances where the Lessee did not give timely notice to such Tax
Indemnitee (and such Tax Indemnitee otherwise had no actual knowledge)
of such filing or payment requirement that would have permitted a
proper and timely filing of such return or payment of such Tax, as the
case may be, or (B) results from the failure of the Lessee to supply
information necessary for the proper and timely filing of such return
or payment of such Tax, as the case may be, that was not in the
possession of such Tax Indemnitee; and
(x) any Tax that results from the breach by the
Lessor of its representation and warranty made in Section 4.2(b) or the
breach of any Lender of its representation and warranty made in Section
4.3(b).
<PAGE>
(c) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee
(including a written notice of such proceeding) for any Taxes as to which the
Lessee may have an indemnity obligation pursuant to Section 7.4, or if any Tax
Indemnitee shall determine that any Taxes as to which the Lessee may have an
indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee
shall promptly notify the Lessee. The Lessee shall be entitled, at its expense,
to participate in, and, to the extent that the Lessee desires to, assume and
control the defense thereof; provided, however, that the Lessee shall have
acknowledged in writing its obligation to fully indemnify such Tax Indemnitee in
respect of such action if requested to do so by the Lessee, suit or proceeding
if the contest is unsuccessful; and, provided further, that the Lessee shall not
be entitled to assume and control the defense of any such action, suit or
proceeding (but the Tax Indemnitee shall then contest, at the sole cost and
expense of the Lessee, on behalf of the Lessee with representatives reasonably
satisfactory to the Lessee) if and to the extent that, (A) in the reasonable
opinion of such Tax Indemnitee, such action, suit or proceeding (x) involves any
meaningful risk of imposition of criminal liability or any material risk of
material civil liability on such Tax Indemnitee or (y) will involve a material
risk of the sale, forfeiture or loss of, or the creation of any Lien (other than
a Permitted Lien) on any Leased Property or any part thereof unless the Lessee
shall have posted a bond or other security satisfactory to the relevant Tax
Indemnitees in respect to such risk, (B) such proceeding involves claims not
fully indemnified by the Lessee which the Lessee and the Tax Indemnitee have
been unable to sever from the indemnified claim(s), (C) an Event of Default has
occurred and is continuing, (D) such action, suit or proceeding involves matters
which extend beyond or are unrelated to the Transaction and if determined
adversely could be materially detrimental to the interests of such Tax
Indemnitee notwithstanding indemnification by the Lessee or (E) such action,
suit or proceeding involves the federal or any state income tax liability of the
Tax Indemnitee. With respect to any contests controlled by a Tax Indemnitee, (i)
if such contest relates to the federal or any state income tax liability of such
Tax Indemnitee, such Tax Indemnitee shall be required to conduct such contest
only if the Lessee shall have provided to such Tax Indemnitee an opinion of
independent tax counsel selected by the Tax Indemnitee and reasonably
satisfactory to the Lessee stating that a reasonable basis exists to contest
such claim or (ii) in the case of an appeal of an adverse determination of any
contest relating to any Taxes, an opinion of such counsel to the effect that
such appeal is more likely than not to be successful, provided, however, such
Tax Indemnitee shall in no event be required to appeal an adverse determination
to the United States Supreme Court. The Tax Indemnitee may participate in a
reasonable manner at its own expense and with its own counsel in any proceeding
conducted by the Lessee in accordance with the foregoing.
Each Tax Indemnitee shall at the Lessee's expense supply the Lessee
with such information and documents in such Tax Indemnitee's possession
reasonably requested by the Lessee as are necessary or advisable for the Lessee
to participate in any action, suit or proceeding to the extent permitted by this
Section 7.4. Unless an Event of Default shall have occurred and be continuing,
no Tax Indemnitee shall enter into any settlement or other compromise with
respect to any claim which is entitled to be indemnified under this Section 7.4
without the prior written consent of the Lessee, which consent shall not be
unreasonably withheld, unless such Tax Indemnitee waives its right to be
indemnified under this Section 7.4 with respect to such claim.
<PAGE>
Notwithstanding anything contained herein to the contrary, (a) a Tax
Indemnitee will not be required to contest (and the Lessee shall not be
permitted to contest) a claim with respect to the imposition of any Tax if such
Tax Indemnitee shall waive its right to indemnification under this Section 7.4
with respect to such claim (and any related claim with respect to other taxable
years the contest of which is precluded as a result of such waiver) and (b) no
Tax Indemnitee shall be required to contest any claim if the subject matter
thereof shall be of a continuing nature and shall have previously been decided
adversely, unless there has been a change in law which in the opinion of Tax
Indemnitee's counsel creates substantial authority for the success of such
contest. Each Tax Indemnitee and the Lessee shall consult in good faith with
each other regarding the conduct of such contest controlled by either.
(d) Reimbursement for Tax Savings. If (x) a Tax Indemnitee
shall obtain a credit or refund of any Taxes paid by the Lessee pursuant to this
Section 7.4 or (y) by reason of the incurrence or imposition of any Tax for
which a Tax Indemnitee is indemnified hereunder or any payment made to or for
the account of such Tax Indemnitee by the Lessee pursuant to this Section 7.4,
such Tax Indemnitee at any time realizes a reduction in any Taxes for which the
Lessee is not required to indemnify such Tax Indemnitee pursuant to this Section
7.4, which reduction in Taxes was not taken into account in computing such
payment by the Lessee to or for the account of such Tax Indemnitee, then such
Tax Indemnitee shall promptly pay to the Lessee (xx) the amount of such credit
or refund, together with the amount of any interest received by such Tax
Indemnitee on account of such credit or refund or (yy) an amount equal to such
reduction in Taxes, as the case may be; provided that no such payment shall be
made so long as an Event of Default shall have occurred and be continuing and,
provided, further, that the amount payable to the Lessee by any Tax Indemnitee
pursuant to this Section 7.4(d) shall not at any time exceed the aggregate
amount of all indemnity payments made by the Lessee under this Section 7.4 to
such Tax Indemnitee with respect to the Taxes which gave rise to the credit or
refund or with respect to the Tax which gave rise to the reduction in Taxes less
the amount of all prior payments made to the Lessee by such Tax Indemnitee under
this Section 7.4(d). Each Tax Indemnitee agrees to act in good faith to claim
such refunds and other available Tax benefits, and take such other actions as
may be reasonable to minimize any payment due from the Lessee pursuant to this
Section 7.4. The disallowance or reduction of any credit, refund or other tax
savings with respect to which a Tax Indemnitee has made a payment to the Lessee
under this Section 7.4(d) shall be treated as a Tax for which the Lessee are
obligated to indemnify such Tax Indemnitee hereunder without regard to Section
7.4(b) hereof.
(e) Payments. Any Tax indemnifiable under this Section 7.4
shall be paid by the Lessee directly when due to the applicable taxing authority
if direct payment is practicable and permitted. If direct payment to the
applicable taxing authority is not permitted or is otherwise not made, any
amount payable to a Tax Indemnitee pursuant to Section 7.4 shall be paid within
thirty (30) days after receipt of a written demand therefor from such Tax
Indemnitee accompanied by a written statement describing in reasonable detail
the amount so payable, but not before the date that the relevant Taxes are due.
Any payments made pursuant to Section 7.4 shall be made to the Tax Indemnitee
entitled thereto or the Lessee, as the case may be, in immediately available
funds at such bank or to such account as specified by the payee in written
directions to the payor, or, if no such direction shall have been given, by
check of the payor payable to the order of the payee by certified mail, postage
prepaid at its address as set forth in this Master Agreement. Upon the request
of any Tax Indemnitee with respect to a Tax that the Lessee is required to pay,
the Lessee shall furnish to such Tax Indemnitee the original or a certified copy
of a receipt for the Lessee's payment of such Tax or such other evidence of
payment as is reasonably acceptable to such Tax Indemnitee.
<PAGE>
(f) Reports. If the Lessee knows of any report, return or
statement required to be filed with respect to any Taxes that are subject to
indemnification under this Section 7.4, the Lessee shall, if the Lessee is
permitted by Applicable Law, timely file such report, return or statement (and,
to the extent permitted by law, show ownership of the applicable Leased Property
in the Lessee); provided, however, that if the Lessee is not permitted by
Applicable Law or does not have access to the information required to file any
such report, return or statement, the Lessee will promptly so notify the
appropriate Tax Indemnitee, in which case Tax Indemnitee will file such report.
In any case in which the Tax Indemnitee will file any such report, return or
statement, the Lessee shall, upon written request of such Tax Indemnitee,
prepare such report, return or statement for filing by such Tax Indemnitee or,
if such Tax Indemnitee so requests, provide such Tax Indemnitee with such
information as is reasonably available to the Lessee.
(g) Verification. At the Lessee's request, the amount of any
indemnity payment by the Lessee or any payment by a Tax Indemnitee to the Lessee
pursuant to this Section 7.4 shall be verified and certified by an independent
public accounting firm selected by the Lessee and reasonably acceptable to the
Tax Indemnitee. Unless such verification shall disclose an error in the Lessee's
favor of 5% or more of the related indemnity payment, the costs of such
verification shall be borne by the Lessee. In no event shall the Lessee have the
right to review the Tax Indemnitee's tax returns or receive any other
confidential information from the Tax Indemnitee in connection with such
verification. The Tax Indemnitee agrees to cooperate with the independent public
accounting firm performing the verification and to supply such firm with all
information reasonably necessary to permit it to accomplish such verification,
provided that the information provided to such firm by such Tax Indemnitee shall
be for its confidential use. The parties agree that the sole responsibility of
the independent public accounting firm shall be to verify the amount of a
payment pursuant to this Master Agreement and that matters of interpretation of
this Master Agreement are not within the scope of the independent accounting
firm's responsibilities.
SECTION 7.5 Increased Costs, etc.
(a) Interest Rate Not Ascertainable, etc. In the event that
the Agent shall have determined (which determination shall be made in good faith
and, absent manifest error, shall be final, conclusive and binding upon all
parties) that on any date for determining the Adjusted LIBOR Rate for any Rent
Period, by reason of any changes arising after the date of this Master Agreement
affecting the London interbank market, or the Agent's position in such market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Adjusted LIBOR Rate, then,
and in any such event, the Agent shall forthwith give notice (by telephone
confirmed in writing) to Lessee and to the Funding Parties, of such
determination and a summary of the basis for such determination. Until the Agent
notifies Lessee that the circumstances giving rise to the suspension described
herein no longer exist, the obligations of the Funding Parties to make or permit
portions of the Loans to remain outstanding past the last day of the then
current Rent Periods as LIBOR Advances shall be suspended, and such affected
Advances shall bear the same interest as Base Rate Advances.
<PAGE>
(b) Illegality.
----------
(i) In the event that any Funding Party shall have
determined (which determination shall be made in good faith and, absent
manifest error, shall be final, conclusive and binding upon all
parties) at any time that the making or continuance of any LIBOR
Advance has become unlawful by compliance by such Funding Party in good
faith with any Applicable Law, governmental rule, regulation, guideline
or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such
event, the Funding Party shall give prompt notice (by telephone
confirmed in writing) to Lessee and to the Agent of such determination
and a summary of the basis for such determination (which notice the
Agent shall promptly transmit to the other Funding Parties).
(ii) Upon the giving of the notice to Lessee referred
to in subsection (i) above, (A) Lessee's right to request and such
Funding Party's obligation to make LIBOR Advances shall be immediately
suspended, and such Funding Party shall make an Advance as part of the
requested Funding of LIBOR Advances as a Base Rate Advance, which Base
Rate Advance shall, for all other purposes, be considered part of such
Advance, and (B) if the affected LIBOR Advance or Advances are then
outstanding, Lessee shall immediately, or if permitted by Applicable
Law, no later than the date permitted thereby, upon at least one
Business Day's written notice to the Agent and the affected Funding
Party, convert each such Advance into a Base Rate Advance or Advances,
provided that if more than one Funding Party is affected at any time,
then all affected Funding Parties must be treated the same pursuant to
this Section 7.5(b).
(c) Increased Costs. If, by reason of (x) after the date
hereof, the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (y) the compliance with any
guideline or request from any central bank or other Governmental Authority or
quasi-governmental authority exercising control over banks or financial
institutions generally made after the date hereof (whether or not having the
force of law):
(i) any Funding Party (or its applicable Lending
Office) shall be subject to any tax, duty or other charge with
respect to its LIBOR Advances or its obligation to make LIBOR
Advances or the basis of taxation of payments to any Funding
Party of the principal of or interest on its LIBOR Advances or
its obligation to make LIBOR Advances shall have changed
(except for changes in the tax on the overall net income of
such Funding Party or its applicable Lending Office imposed by
the jurisdiction in which such Funding Party's principal
executive office or applicable Lending Office is located); or
<PAGE>
(ii) any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve
System), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended
by, any Funding Party's applicable Lending Office shall be
imposed or deemed applicable or any other condition affecting
its LIBOR Advances or its obligation to make LIBOR Advances
shall be imposed on any Funding Party or its applicable
Lending Office or the London interbank market;
and as a result thereof there shall be any increase in the cost to such Funding
Party of agreeing to make or making, funding or maintaining LIBOR Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBOR Rate for LIBOR Advances) or its obligation to make LIBOR
Advances, or there shall be a reduction in the amount received or receivable by
such Lender or its applicable Lending Office, then Lessee shall from time to
time, upon written notice from and demand by such Lender on Lessee (with a copy
of such notice and demand to the Agent), pay to the Agent for the account of
such Funding Party within five Business Days after the date of such notice and
demand, additional amounts sufficient to indemnify such Funding Party against
such increased cost. A certificate as to the amount of such increased cost,
submitted to Lessee and the Agent by such Funding Party in good faith and
accompanied by a statement prepared by such Funding Party describing in
reasonable detail the basis for and calculation of such increased cost, shall,
except for manifest error, be final, conclusive and binding for all purposes.
(d) Conversion to Base Rate Advances. If any Funding Party
shall advise the Agent that at any time, because of the circumstances described
in clause (x) or (y) in Section 7.5(c) or any other circumstances beyond such
Funding Party's reasonable control arising after the date of this Master
Agreement affecting such Funding Party or the London interbank market or such
Lender's position in such market, the Adjusted LIBOR Rate as determined by the
Agent will not adequately and fairly reflect the cost to such Lender of funding
its LIBOR Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by
telephone confirmed in writing) to
Lessee and to the other Funding Parties of such advice;
(ii) Lessee's right to request and such Funding
Party's obligation to make or permit portions of the Advances
to remain outstanding past the last day of the then current
Rent Periods as LIBOR Advances shall be immediately suspended;
and
(iii) such Funding Party shall make an Advance as
part of the requested Funding of LIBOR Advances as a Base Rate
Advance, which such Base Rate Advance shall, for all other
purposes, be considered part of such Funding.
<PAGE>
(e) Alternative Lending Office. Each Funding Party agrees
that, if requested by Lessee, it will use reasonable efforts (subject to overall
policy considerations of such Funding Party) to designate an alternate Lending
Office with respect to any of its LIBOR Advances affected by the matters or
circumstances described in paragraphs (a), (b), (c) or (d) above to reduce the
liability of Lessee or avoid the results provided thereunder, so long as such
designation is not disadvantageous to such Funding Party as reasonably
determined by such Funding Party, which determination shall be conclusive and
binding on all parties hereto. Nothing in this Section 7.5(e) shall affect or
postpone any of the obligations of Lessee or any right of any Funding Party
provided hereunder.
(f) Funding Losses. Lessee shall compensate each Funding
Party, upon its written request to Lessee (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and, absent manifest error, shall be final, conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any interest paid by such Funding
Party to lenders of funds borrowed by it to make or carry its LIBOR Advances to
the extent not recovered by such Lender in connection with the re-employment of
such funds and including loss of anticipated profits), which the Funding Party
may sustain: (i) if for any reason (other than a default by such Lender) a
borrowing of, or conversion to or continuation of, LIBOR Advances to Lessee does
not occur on the date specified therefor in a Funding Request or Payment Date
Notice (whether or not withdrawn), (ii) if any repayment (including any
conversions pursuant to this Section 7.5) of any LIBOR Advances to Lessee occurs
on a date which is not the last day of a Rent Period applicable thereto, or
(iii), if, for any reason, Lessee defaults in its obligation to repay the Funded
Amounts when required by the terms of the Lease.
(g) Assumptions Concerning Funding of LIBOR Advances.
Calculation of all amounts payable to a Funding Party under this Section 7.5
shall be made as though such Funding Party had actually funded its relevant
LIBOR Advances through the purchase of deposits in the relevant market bearing
interest at the rate applicable to such LIBOR Advances in an amount equal to the
amount of the LIBOR Advances and having a maturity comparable to the relevant
Rent Period and through the transfer of such LIBOR Advances from an offshore
office of that Funding Party to a domestic office of that Funding Party in the
United States of America; provided, however, that each Funding Party may fund
each of its LIBOR Advances in any manner it sees fit and the foregoing
assumption shall be used only for calculation of amounts payable under this
Section 7.5.
<PAGE>
(h) Capital Adequacy. Without limiting any other provision of
this Master Agreement, in the event that any Funding Party shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy not currently in effect or fully
applicable as of the Initial Closing Date, or any change therein or in the
interpretation or application thereof, or compliance by such Lender with any
request or directive regarding capital adequacy not currently in effect or fully
applicable as of the Initial Closing Date (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) from a
central bank or governmental authority or body having jurisdiction, does or
shall have the effect of reducing the rate of return on such Funding Party's
capital as a consequence of its obligations hereunder to a level below that
which such Funding Party could have achieved but for such law, treaty, rule,
regulation, guideline or order, or such change or compliance (taking into
consideration such Funding Party's policies with respect to capital adequacy) by
an amount deemed by such Funding Party to be material, then within ten (10)
Business Days after written notice and demand by such Funding Party (with copies
thereof to the Agent), Lessee shall from time to time pay to such Funding Party
additional amounts sufficient to compensate such Funding Party for such
reduction (but, in the case of outstanding Base Rate Advances, without
duplication of any amounts already recovered by such Funding Party by reason of
an adjustment in the applicable Base Rate), provided that the Lessee shall not
be obligated to pay such compensation with respect to reductions incurred by
such Lender more than 120 days prior to the date that such Lender had actual
knowledge thereof. Each certificate as to the amount payable under this Section
7.5(h) (which certificate shall set forth the basis for requesting such amounts
in reasonable detail), submitted to Lessee by any Funding Party in good faith,
shall, absent manifest error, be final, conclusive and binding for all purposes.
(i) Replacement of Lender. In the event that any Lender makes
a claim for increased costs, or is subject to a circumstance making LIBOR
Advances unavailable, pursuant to this Section 7.5, the Lessee shall have the
right to replace such Lender with another financial institution that is
reasonably acceptable to the Agent. In the event that the Lessee identifies such
a replacement financial institution, and the Agent consents thereto, the Lender
that is to be replaced shall assign its Loans and its Commitment to such
replacement lender pursuant to an assignment and assumption agreement in
substantially the form set forth as Exhibit J hereto upon payment to it of the
outstanding principal, and accrued interest on, its outstanding Loans, plus all
other amounts then due to it pursuant to the Operative Documents.
(j) Construction Land Interests. Notwithstanding anything to
the contrary set forth in this Section 7.5, any amounts due pursuant to this
Section 7.5 with respect to any Construction Land Interest during the
Construction Term therefor shall be payable by the Lessor from the proceeds of
Advances (and Construction Agent shall provide a Funding Request for such
Advances upon notice from the Lessor or the Agent).
SECTION 7.6 End of Term Indemnity. In the event that at the end of the
Lease Term for a Leased Property: (i) the Lessee elects the option set forth in
Section 14.6 of the Lease, and (ii) after the Lessor receives the sales proceeds
from such Leased Property under Section 14.6 or 14.7 of the Lease, together with
the Lessee's payment of the Recourse Deficiency Amount, the Lessor shall not
have received the entire Lease Balance, then, within 90 days after the end of
the Lease Term, the Lessor or the Agent may obtain, at the Lessee's sole cost
and expense, a report from the Appraiser (or, if the Appraiser is not available,
another appraiser reasonably satisfactory to the Lessor or the Agent, as the
case may be, and approved by the Lessee, such approval not to be unreasonably
withheld) in form and substance satisfactory to the Lessor and the Agent (the
"Report") to establish the reason for any decline in value of such Leased
Property from the Lease Balance. The Lessee shall promptly reimburse the Lessor
(which amount shall be distributed pursuant to Section 3 of the Loan Agreement)
for the amount equal to such decline in value to the extent that the Report
indicates that such decline was due to
(w) extraordinary use, failure to maintain, to repair, to
restore, to rebuild or to replace, failure to comply with all
Applicable Laws, failure to use good workmanship, method of
installation or removal or maintenance, repair, rebuilding or
replacement, or any other cause or condition within the power of the
Lessee to control or effect resulting in the Building failing to be a
restaurant unit of the type and quality contemplated by the Appraisal
(excepting in each case ordinary wear and tear), or
<PAGE>
(x) any Alteration made to, or any rebuilding of, the
Leased Property or any part thereof
by the Lessee, or
(y) any restoration or rebuilding carried out by the
Lessee or any condemnation of any
portion of the Leased Property pursuant to Article X of the Lease, or
(z) any use of such Leased Property or any part thereof by the
Lessee other than as permitted by the Lease, or any act or omission
constituting a breach of any requirement, condition, restriction or
limitation set forth in the related Deed or the related Purchase
Agreement.
SECTION 8
MISCELLANEOUS
SECTION 8.1 Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Master Agreement and any of the Operative Documents, the transfer of any
Land to the Lessor as provided herein (and shall not be merged into any Deed),
any disposition of any interest of the Lessor in any Leased Property, the
purchase and sale of the Notes, payment therefor and any disposition thereof and
shall be and continue in effect notwithstanding any investigation made by any
party hereto or to any of the other Operative Documents and the fact that any
such party may waive compliance with any of the other terms, provisions or
conditions of any of the Operative Documents.
SECTION 8.2 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be addressed to such parties at the addresses therefor as set forth
in Schedule 8.2, or such other address as any such party shall specify to the
other parties hereto, and shall be deemed to have been given (i) the Business
Day after being sent, if sent by overnight courier service; (ii) the Business
Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and
confirmed electronically or otherwise during business hours of a Business Day
(or on the next Business Day if otherwise sent by facsimile and confirmed
electronically or otherwise); or (iv) three Business Days after being sent, if
sent by registered or certified mail, postage prepaid.
SECTION 8.3 Counterparts. This Master Agreement may be executed by the
parties hereto in separate counterparts (including by facsimile), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
<PAGE>
SECTION 8.4 Amendments. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified with
respect to the Lessee or any Funding Party, except (a) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Lessee, with the written agreement or consent of the Lessee, and (b) in the case
of a termination, amendment, supplement, waiver or modification to be binding on
the Funding Parties, with the written agreement or consent of the Required
Funding Parties; provided, however, that
(x) notwithstanding the foregoing provisions of this Section
8.4, the consent of each Funding Party affected thereby shall be required for
any amendment, modification or waiver directly:
(i) modifying any of the provisions of this Section 8.4,
-----------
changing the definition of "Required Funding Parties" or "Required
------------------------- -------
Lenders", or increasing the Commitment of such Funding Party;
---------
(ii) amending, modifying, waiving or supplementing any of the
provisions of Section 3 of the Loan Agreement or the representations of
such Funding Party in Section 4.2 or 4.3 or the covenants of such
Funding Party in Section 6 of this Master Agreement;
(iii) reducing any amount payable to such Funding Party under
the Operative Documents or extending the time for payment of any such
amount, including, without limitation, any Rent, any Funded Amount, any
fees, any indemnity, the Leased Property Balance, the Lease Balance,
any Funding Party Balance, Recourse Deficiency Amount, interest or
Yield; or
(iv) consenting to any assignment of the Lease, releasing any
of the collateral assigned to the Agent and the Lenders pursuant to any
Mortgage and any Assignment of Lease and Rents (but excluding a release
of any rights that the Lenders may have in any Leased Property, or the
proceeds thereof as contemplated in the definition of "Release Date"),
releasing the Lessee from its obligations in respect of the payments of
Rent and the Lease Balance, releasing any Obligor from its obligations
under the Guaranty Agreement, the Subsidiary Guaranty or the other
Operative Documents or changing the absolute and unconditional
character of any such obligation; and
(y) no such termination, amendment, supplement, waiver
or modification shall, without the written agreement or consent of the Lessor
and the Lenders, be made to the Lease; and
(z) subject to the foregoing clauses (x) and (y), so long as
no Event of Default has occurred and is continuing, the Lessor, the Agent and
the Lenders may not amend, supplement, waive or modify any terms of the Loan
Agreement, the Notes, the Mortgages and the Assignments of Lease and Rents
without the consent of the Lessee (such consent not to be unreasonably withheld
or delayed); provided that in no event may the Loan Agreement or the Notes be
amended so as to increase the amount of Basic Rent payable by the Lessee without
the consent of the Lessee; the Lessor and the Lessee may not amend, supplement,
waive or modify any terms of the Lease or any Security Agreement and Assignment
without the consent of the Agent and the Lenders.
<PAGE>
SECTION 8.5 Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Master Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 8.6 Parties in Interest. Except as expressly provided herein,
none of the provisions of this Master Agreement is intended for the benefit of
any Person except the parties hereto and their respective successors and
permitted assigns.
SECTION 8.7 GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN,
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 8.8 Expenses. Whether or not the transactions herein
contemplated are consummated, the Lessee agrees to pay, as Supplemental Rent,
all actual, reasonable and documented out-of-pocket costs and expenses of the
Lessor, the Agent and the Lenders in connection with the preparation, execution
and delivery of the Operative Documents and the documents and instruments
referred to therein and any amendment, waiver or consent relating thereto
(including, without limitation, the reasonable fees and disbursements of Mayer,
Brown & Platt, but not including any fees and disbursements for any other
outside counsel representing any Lender) and of the Lessor, the Agent and the
Lenders in connection with the enforcement of the Operative Documents and the
documents and instruments referred to therein (including, without limitation,
the reasonable fees actually incurred and disbursements of counsel for the
Lessor, the Agent and the Lenders). All references in the Operative Documents to
"attorneys' fees" or "reasonable attorneys fees" shall mean reasonable
attorneys' fees actually incurred, without regard to any statutory definition
thereof. Notwithstanding the foregoing, any amounts due pursuant to this Section
8.8 with respect to any Construction Land Interest during the Construction Term
therefor shall be payable by the Lessor from the proceeds of Advances (and the
Construction Agent shall provide a Funding Request for such Advances upon notice
from the Lessor or the Agent).
SECTION 8.9 Severability. Any provision of this Master Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 8.10 Liabilities of the Funding Parties; Sharing of Payments.
<PAGE>
(a) No Funding Party shall have any obligation to any other
Funding Party or to the Lessee with respect to the transactions contemplated by
the Operative Documents except those obligations of such Funding Party expressly
set forth in the Operative Documents or except as set forth in the instruments
delivered in connection therewith, and no Funding Party shall be liable for
performance by any other party hereto of such other party's obligations under
the Operative Documents except as otherwise so set forth. No Lender shall have
any obligation or duty to the Lessee, any other Funding Parties or any other
Person with respect to the transactions contemplated hereby except to the extent
of the obligations and duties expressly set forth in this Master Agreement or
the Loan Agreement.
(b) If any Funding Party shall obtain any payment (whether
voluntary or involuntary, or through the exercise of any right of set-off or
otherwise) on account of the Advances made by it in excess of its ratable share
of payments on account of the Advances obtained by all the Funding Parties, such
Funding Parties shall forthwith purchase from the other Funding Parties such
participations in the Advances owed to them as shall be necessary to cause such
purchasing Funding Party to share the excess payment ratably with each of them,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Funding Party, such purchase from each
Funding Party shall be rescinded and such Funding Party shall repay to the
purchasing Funding Party the purchase price to the extent of such Funding
Party's ratable share (according to the proportion of (i) the amount of the
participation purchased from such Funding Party as a result of such excess
payment to (ii) the total amount of such excess payment) of such recovery
together with an amount equal to such Funding Party's ratable share (according
to the proportion of (i) the amount of such Funding Party's required repayment
to (ii) the total amount so recovered from the purchasing Funding Party) of any
interest or other amount paid or payable by the purchasing Funding Party in
respect of the total amount so recovered. Each Funding Party agrees that any
Funding Party so purchasing a participation from another Funding Party pursuant
to this Section 8.10 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Funding Party were the direct creditor of such
Funding Party in the amount of such participation.
SECTION 8.11 Submission to Jurisdiction; Waivers. Each party
----------------------------------------
hereto hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Master Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the
State of Georgia sitting in Fulton County, Georgia, the courts of the
United States of America for the Northern District of Georgia, and
appellate courts from any thereof;
(ii) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same;
<PAGE>
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in Schedule 8.2 or at
such other address of which the other parties hereto shall have been
notified pursuant to Section 8.2; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS MASTER
AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.12 Liabilities of the Agent. The Agent shall have no duty,
liability or obligation to any party to this Master Agreement with respect to
the transactions contemplated hereby except those duties, liabilities or
obligations expressly set forth in this Master Agreement or the Loan Agreement,
and any such duty, liability or obligations of the Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be.
<PAGE>
MASTER
S-8
AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Master
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
RUBY TUESDAY, INC., as the Lessee
By:
Name Printed:
Title:
<PAGE>
ATLANTIC FINANCIAL GROUP, LTD., as Lessor
By: Atlantic Financial Managers, Inc., its General
Partner
By:
Name Printed:
Title:
<PAGE>
SUNTRUST BANK, as Agent and as a Lender
By:
Name Printed:
Title:
<PAGE>
BANK OF AMERICA, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
FLEET NATIONAL BANK, as a Lender
By:
Name Printed:
Title:
<PAGE>
FIRSTAR BANK, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
AMSOUTH BANK, as a Lender
By:
Name Printed:
Title:
<PAGE>
WACHOVIA BANK, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
APPENDIX A
to
Master Agreement, Lease,
Loan Agreement and Construction Agency Agreement
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear contrary
--------------
intention appears:
1. the singular number includes the plural number and
vice versa;
---- -----
2. reference to any Person includes such Person's
successors and assigns but, if applicable, only if such
successors and assigns are permitted by the Operative
Documents;
3. reference to any gender includes each other gender;
4. reference to any agreement (including any Operative
Document), document or instrument means such agreement,
document or instrument as amended, supplemented or
modified and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms of
the other Operative Documents and reference to any
promissory note includes any promissory note which is an
extension or renewal thereof or a substitute or
replacement therefor;
5. reference to any Applicable Law means such Applicable
Law as amended, modified, codified, replaced or reenacted,
in whole or in part, and in effect from time to time,
including rules and regulations promulgated thereunder and
reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law
from time to time in effect and constituting the
substantive amendment, modification, codification,
replacement or reenactment of such section or other
provision;
6. reference in any Operative Document to any Article,
-------
Section, Appendix, Schedule or Exhibit means such Article
------- -------- -------- ------- --------
or Section thereof or Appendix, Schedule or Exhibit
------- ------- ------- --------
thereto;
7. "hereunder", "hereof", "hereto" and
words of similar import shall be
deemed references to an Operative Document as a whole and
not to any particular Article, Section,
------- -------
paragraph or other provision of such Operative Document;
8. "including" (and with correlative meaning "include")
means including without limiting the generality of any
description preceding such term;
9. "or" is not exclusive; and
10. relative to the determination of any period of time,
"from" means "from
and including" and "to" means "to but excluding".
B. Accounting Terms. In each Operative Document, unless expressly otherwise
----------------
provided, accounting terms shall be construed and interpreted, and accounting
determinations and computations shall be made, in accordance with GAAP.
C. Conflict in Operative Documents. If there is any conflict between any
Operative Documents, each such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Master Agreement shall
prevail and control.
D. Legal Representation of the Parties. The Operative Documents were negotiated
by the parties with the benefit of legal representation and any rule of
construction or interpretation otherwise requiring any Operative Document to be
construed or interpreted against any party shall not apply to any construction
or interpretation hereof or thereof.
E. Defined Terms. Unless a clear contrary intention appears, terms defined
-------------
herein have the respective indicated meanings when used in each Operative
Document.
"A Loan" means the A Percentage of Fundings made pursuant to the Loan
Agreement and the Master Agreement.
"A Note" is defined in Section 2.2 of the Loan Agreement.
"A Percentage" means 85%.
"Address" means with respect to any Person, its address set forth in
Schedule 8.2 to the Master Agreement or such other address as it shall have
identified to the parties to the Master Agreement in writing in the manner
provided for the giving of notices thereunder.
"Adjusted LIBO Rate" shall mean, with respect to each Rent Period for a
LIBOR Advance, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined pursuant to the following formula:
Adjusted LIBO Rate = LIBOR
1.00 - LIBOR Reserve Percentage
As used herein, LIBOR Reserve Percentage shall mean, for any Rent Period for a
LIBOR Advance, the aggregate of the maximum reserve percentages (including,
without limitation, any emergency, supplemental, special or other marginal
reserves) expressed as a decimal (rounded upwards to the next 1/100th of 1%) in
effect on any day to which the Agent is subject with respect to the Adjusted
LIBO Rate pursuant to regulations issued by the Board of Governors of the
Federal Reserve System (or any Governmental Authority succeeding to any of its
principal functions) with respect to eurocurrency funding (currently referred to
as "eurocurrency liabilities" under Regulation D). LIBOR Advances shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Funding Party under Regulation D.
The LIBOR Reserve Percentage shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"Adjusted Total Capital" shall mean, as of any date of determination, the
sum of (i) Adjusted Total Debt as of such date and (ii) Consolidated Net Worth
as of such date.
"Adjusted Total Debt" shall mean, as of any date of determination, (i) all
Indebtedness of the Lessee and its Subsidiaries on a consolidated basis,
including without limitation all Loans and LC Exposure (as defined in the Credit
Agreement), but excluding all Indebtedness of the type described in subsection
(xi) of the definition of Indebtedness and excluding any Synthetic Lease
Obligations to the extent that such Synthetic Lease Obligations are included in
clause (ii) below, plus (ii) to the extent not included in clause (i), the
present value of all lease obligations arising under operating leases of Lessee
and its Subsidiaries as determined in accordance with GAAP, applying a discount
rate of ten percent (10%).
"Adjusted Total Debt to Adjusted Total Capital Ratio" shall mean, as of any
date of determination, the ratio of (i) Adjusted Total Debt as of such date to
(ii) Adjusted Total Capital as of such date.
"Adjusted Total Debt to EBITDAR Ratio" shall mean, as of any date of
determination, the ratio of (i) Adjusted Total Debt as of such date to (ii)
Consolidated EBITDAR as of such date, measured for the four Fiscal Quarter
period ending on such date.
"Advance" means a LIBOR Advance or a Base Rate Advance.
"Affiliate" shall mean as to any Person, any other Person that directly or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
common Control with, such Person.
"After-Tax Basis" means (a) with respect to any payment to be received by an
Indemnitee (which, for purposes of this definition, shall include any Tax
Indemnitee), the amount of such payment supplemented by a further payment or
payments so that, after deducting from such payments the amount of all Taxes
(net of any current credits, deductions or other Tax benefits arising from the
payment by the Indemnitee of any amount, including Taxes, for which the payment
to be received is made) imposed currently on the Indemnitee by any Governmental
Authority or taxing authority with respect to such payments, the balance of such
payments shall be equal to the original payment to be received and (b) with
respect to any payment to be made by any Indemnitee, the amount of such payment
supplemented by a further payment or payments so that, after increasing such
payment by the amount of any current credits or other Tax benefits realized by
the Indemnitee under the laws of any Governmental Authority or taxing authority
resulting from the making of such payments, the sum of such payments (net of
such credits or benefits) shall be equal to the original payment to be made;
provided, however, for the purposes of this definition, and for purposes of any
payment to be made to either the Lessee or an Indemnitee on an after-tax basis,
it shall be assumed that (i) federal, state and local taxes are payable at the
highest combined marginal federal and state statutory income tax rate (taking
into account the deductibility of state income taxes for federal income tax
purposes) applicable to corporations from time to time and (ii) such Indemnitee
or the Lessee has sufficient income to utilize any deductions, credits (other
than foreign tax credits, the use of which shall be determined on an actual
basis) and other Tax benefits arising from any payments described in clause (b)
of this definition.
"Agent" means SunTrust Bank, a Georgia banking corporation, in its capacity
as agent under the Master Agreement and the Loan Agreement.
"Alterations" means, with respect to any Leased Property, fixtures,
alterations, improvements, modifications and additions to such Leased Property.
"American Cafe" shall mean "American Cafe", "Silverspoon" or Mozzarella's
American Cafe", an operating concept of the Lessee.
"Applicable Fee Margin" shall mean, as of any date, the percentage per annum
determined by reference to the applicable Adjusted Total Debt to EBITDAR Ratio
in effect on such date as set forth on Schedule 1.1 attached hereto; provided,
that a change in the Applicable Fee Margin resulting from a change in the
Adjusted Total Debt to EBITDAR Ratio shall be effective on the second Business
Day after the date the Lessee is required to deliver the financial statements
required by Section 5.1(a) or (b) of the Master Agreement and the compliance
certificate required by Section 5.1 (c) of the Master Agreement; provided,
further, that if at any time the Lessee shall have failed to deliver such
financial statements and such certificate, the Applicable Fee Margin shall be at
Level V until such time as such financial statements and certificate are
delivered, at which time the Applicable Fee Margin shall be determined as
provided above. Notwithstanding the foregoing, the Applicable Fee Margin from
the date of the Master Agreement until the first financial statement and
compliance certificate are required to be delivered shall be at Level IV.
"Applicable Law" means all existing and future applicable laws (including
Environmental Laws and zoning laws), rules, regulations (including proposed,
temporary and final income tax regulations and the Margin Regulations),
statutes, treaties, codes, ordinances, permits, certificates, orders and
licenses of and interpretations by, any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction (including those pertaining to health, safety
or the environment (including, without limitation, wetlands) and those
pertaining to the construction, use or occupancy of any Leased Property).
"Applicable Margin" shall mean, as of any date, the percentage per annum
determined by reference to the applicable Adjusted Total Debt to EBITDAR Ratio
in effect on such date as set forth on Schedule 1.1 attached hereto; provided,
that a change in the Applicable Margin resulting from a change in such ratio
shall be effective on the second Business Day after the date the Lessee is
required to deliver the financial statements required by Section 5.1(a) or (b)
and the compliance certificate required by Section 5.1 (c) of the Master
Agreement; provided, further, that if at any time the Lessee shall have failed
to deliver such financial statements and such certificate, the Applicable Margin
shall be at Level V until such time as such financial statements and certificate
are delivered, at which time the Applicable Margin shall be determined as
provided above. Notwithstanding the foregoing, the Applicable Margin from the
date of the Master Agreement until the first financial statement and compliance
certificate are required to be delivered shall be at Level IV.
"Appraisal" is defined in Section 3.1 of the Master Agreement.
"Appraiser" means an MAI appraiser reasonably satisfactory to the Agent.
"Approved Fund" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) a Lender, (b) an Affiliate
of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
"Architect" means with respect to any Leased Property the architect engaged
in connection with the construction of the related Building, if any, who may be
an employee of the General Contractor for such Leased Property.
"Architect's Agreement" means, with respect to any Leased Property, the
architectural services agreement, if any, between the Lessee and the related
Architect.
"Assignment of Lease and Rents" means, with respect to any Leased Property,
the Assignment of Lease and Rents, dated as of the related Closing Date, from
the Lessor to the Agent, substantially in the form of Exhibit B to the Master
Agreement.
"Award" means any award or payment received by or payable to the Lessor or
the Lessee on account of any Condemnation or Event of Taking (less the actual
costs, fees and expenses, including reasonable attorneys' fees, incurred in the
collection thereof, for which the Person incurring the same shall be reimbursed
from such award or payment).
"B Loan" means the B Percentage of Fundings made pursuant to the Loan
Agreement and the Master Agreement. "B Note" is defined in Section 2.2 of
the Loan Agreement.
"B Percentage" means 11.5%.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended.
"Base Rate" means the higher of (i) the rate which the Agent publicly
announces from time to time as its prime lending rate, as in effect from time to
time, and (ii) the Federal Funds Rate, as in effect from time to time, plus
one-half of one percent (0.50%) per annum. The Agent's prime lending rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to customers; the Agent may make commercial loans or other
loans at rates of interest at, above or below the Agent's prime lending rate.
Each change in the Agent's prime lending rate or the Federal Funds Rate shall be
effective from and including the date such change is publicly announced as being
effective and without notice to the Lessee.
"Base Term" means, with respect to any Leased Property, (a) the period
commencing on the Initial Closing Date and ending on October 11, 2005 or (b)
such shorter period as may result from earlier termination of the Lease as
provided therein.
"Base Rate Advance" means that portion of the Funded Amount bearing interest
at the Base Rate.
"Basic Rent" means, for any Lease Term, the rent payable pursuant to Section
3.1 of the Lease, determined in accordance with the following: each installment
of Basic Rent payable on any Payment Date shall be in an amount equal to the sum
of (A) the aggregate amount of Lender Basic Rent payable on such Payment Date,
plus (B) the aggregate amount of Lessor Basic Rent payable on such Payment Date,
in each case for the Leased Property or Properties that are then subject to the
Lease.
"Board of Directors", with respect to a corporation, means either the Board
of Directors or any duly authorized committee of that Board which pursuant to
the by-laws of such corporation has the same authority as that Board as to the
matter at issue.
"Building" means, with respect to any Leased Property, the buildings,
structures and improvements located or to be located on the related Land, along
with all fixtures used or useful in connection with the operation of such Leased
Property, including, without limitation, all furnaces, boilers, compressors,
elevators, fittings, pipings, connectives, conduits, ducts, partitions,
equipment and apparatus of every kind and description now or hereafter affixed
or attached or used or useful in connection with the Building, all equipment
financed by the Lessor and/or the Lenders and all Alterations (including all
restorations, repairs, replacements and rebuilding of such buildings,
improvements and structures) thereto (but in each case excluding trade fixtures
financed other than by the Lessor or the Lenders).
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks are required or authorized by law to be closed for business in
Atlanta, Georgia and, if the applicable Business Day relates to a LIBOR Advance,
on which trading is not carried on by and between banks in the London interbank
market.
"Capital Expenditures" shall mean for any period, without duplication, (a)
the additions to property, plant and equipment and other capital expenditures of
the Lessee and its Subsidiaries that are (or would be) set forth on a
consolidated statement of cash flows of the Lessee for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Lessee
and its Subsidiaries during such period.
"Capital Lease Obligations" of any Person shall mean all obligations of such
Person to pay rent or other amounts under any lease (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" shall mean the occurrence of one or more of the
following events: (a) any sale, lease, exchange or other transfer (in a single
transaction or a series of related transactions) of all or substantially all of
the assets of the Lessee to any Person or "group" (within the meaning of the
Securities Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder in effect on the date hereof), (b) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
"group" (within the meaning of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof) of 30% or more of the outstanding shares of the voting stock of the
Lessee; or (c) occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Lessee by Persons who were neither (i)
nominated by the current board of directors or (ii) appointed by directors so
nominated.
"Casualty" means an event of damage or casualty relating to all or part of
any Leased Property that does not constitute an Event of Loss.
"Claims" means liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, proceedings, settlements,
utility charges, costs, expenses and disbursements (including, without
limitation, reasonable legal fees and expenses) of any kind and nature
whatsoever.
"Closing Date" means, with respect to each parcel of Land, the date on which
such Land is acquired by the Lessor pursuant to a Purchase Agreement or such
Land is leased to the Lessor pursuant to a Ground Lease and the initial Funding
occurs with respect to such Land under the Master Agreement.
"Code" or "Tax Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means as to each Funding Party, its obligation to make Fundings
as investments in each Leased Property, or to make Loans to the Lessor, in an
aggregate amount not to exceed at any one time outstanding the amount set forth
for such Funding Party on Schedule 2.2 to the Master Agreement (as it may be
adjusted from time to time pursuant to Section 6 of the Master Agreement).
"Commitment Percentage" means as to any Funding Party, at a particular time,
the percentage of the aggregate Commitments in effect at such time represented
by such Funding Party's Commitment, as such percentage is shown for such Funding
Party on Schedule 2.2 to the Master Agreement (as it may be adjusted from time
to time pursuant to Section 6 of the Master Agreement).
"Completion Date" with respect to any Leased Property means the Business Day
on which the conditions specified in Section 3.5 of the Master Agreement have
been satisfied or waived with respect to such Leased Property.
"Condemnation" means any condemnation, requisition, confiscation, seizure or
other taking or sale of the use, occupancy or title to any Leased Property or
any part thereof in, by or on account of any actual eminent domain proceeding or
other action by any Governmental Authority or other Person under the power of
eminent domain or any transfer in lieu of or in anticipation thereof, which in
any case does not constitute an Event of Taking. A Condemnation shall be deemed
to have "occurred" on the earliest of the dates that use is prevented or
occupancy or title is taken.
"Consolidated Companies" shall mean, collectively, the Lessee and any of its
Subsidiaries, and "Consolidated Company" shall mean, individually, the Lessee or
any of its Subsidiaries.
"Consolidated EBITDA" shall mean, for the Lessee and its Subsidiaries for
any period, an amount equal to the sum of (a) Consolidated Net Income for such
period plus (b) to the extent deducted in determining Consolidated Net Income
for such period, (i) Consolidated Interest Expense, (ii) income tax expense
determined on a consolidated basis in accordance with GAAP, (iii) depreciation
and amortization determined on a consolidated basis in accordance with GAAP and
(iv) all other non-cash charges determined on a consolidated basis in accordance
with GAAP, in each case for such period.
"Consolidated EBITDAR" shall mean, for the Lessee and its Subsidiaries for
any period, an amount equal to the sum of (a) Consolidated EBITDA plus (b)
Consolidated Lease Expense, in each case for such period.
"Consolidated EBITR" shall mean, for the Lessee and its Subsidiaries for any
period, an amount equal to the sum of (a) Consolidated Net Income for such
period plus (b) to the extent deducted in determining Consolidated Net Income
for such period, (i) Consolidated Interest Expense, (ii) income tax expense
determined on a consolidated basis in accordance with GAAP, (iii) all other
non-cash charges, determined on a consolidated basis in accordance with GAAP,
and (iv) Consolidated Lease Expense, in each case for such period.
"Consolidated Fixed Charges" shall mean, for the Lessee and its Subsidiaries
for any period, the sum (without duplication) of (a) Consolidated Interest
Expense for such period and (d) Consolidated Lease Expense for such period.
"Consolidated Interest Expense" shall mean, for the Lessee and its
Subsidiaries for any period determined on a consolidated basis in accordance
with GAAP, the sum of (i) total interest expense, including without limitation
the interest component of any payments in respect of Capital Leases Obligations
capitalized or expensed during such period (whether or not actually paid during
such period) plus (ii) the net amount payable (or minus the net amount
receivable) under Hedging Agreements during such period (whether or not actually
paid or received during such period).
"Consolidated Lease Expense" shall mean, for any period, the aggregate
amount of fixed and contingent rental and operating lease expense payable by the
Lessee and its Subsidiaries with respect to leases of real and personal property
(excluding Capital Lease Obligations) determined on a consolidated basis in
accordance with GAAP for such period.
"Consolidated Net Income" shall mean, for any period, the net income (or
loss) of the Lessee and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, but excluding therefrom (to the
extent otherwise included therein) (i) any extraordinary gains or losses, (ii)
any gains attributable to write-ups of assets, (iii) any equity interest of the
Lessee or any Subsidiary of the Lessee in the unremitted earnings of any Person
that is not a Subsidiary and (iv) any income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary or is merged into or consolidated with
the Lessee or any Subsidiary on the date that such Person's assets are acquired
by the Lessee or any Subsidiary.
"Consolidated Net Worth" shall mean, as of any date, (i) the total assets of
the Lessee and its Subsidiaries that would be reflected on the Lessee's
consolidated balance sheet as of such date prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority interests, if
any, in the stock and surplus of Subsidiaries, minus the sum of (i) the total
liabilities of the Lessee and its Subsidiaries that would be reflected on the
Lessee's consolidated balance sheet as of such date prepared in accordance with
GAAP and (ii) the amount of any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the cost of
such assets acquired reflected on the consolidated balance sheet of the Lessee
as of such date prepared in accordance with GAAP.
"Control" shall mean the power, directly or indirectly, either to (i) vote
5% or more of securities having ordinary voting power for the election of
directors (or persons performing similar functions) of a Person or (ii) direct
or cause the direction of the management and policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. The
terms "Controlling", "Controlled by", and "under common Control with" have
meanings correlative thereto.
"Construction" means, with respect to any parcel of Land, the construction
and development of the related Building pursuant to the related Plans and
Specifications.
"Construction Agency Agreement" means the Construction Agency Agreement,
dated as of October 11, 2000, between the Lessee and the Lessor.
"Construction Agent" means the Lessee in its capacity as construction agent
pursuant to the Construction Agency Agreement.
"Construction Budget" is defined in Section 2.4 of the Construction Agency
Agreement.
"Construction Commencement Date" is defined in Section 2.3 of the
------------------------------
Construction Agency Agreement.
"Construction Conditions" means the conditions set forth in Section 3.5 of
the Master Agreement.
"Construction Contract" means, with respect to any Leased Property, that
certain construction contract, if any, between the Lessee and a General
Contractor for the Construction of the related Building, provided that such
contract shall be assigned by the Lessee to the Lessor, and such assignment
shall be consented to by such General Contractor, pursuant to an assignment of
such construction contract substantially in the form of the Security Agreement
and Assignment set forth as Exhibit D to the Master Agreement.
"Construction Documents" is defined in Section 2.6 of the Construction
Agency Agreement.
"Construction Failure Payment" with respect to any Leased Property means the
amount equal to the sum of (i) 89.9% of the acquisition cost of the related
Land, if the cost of the related Land is less than 25% of the total expected
cost of such Leased Property or 100% of the acquisition cost of the related
Land, if the cost of the related Land is equal to or more than 25% of the total
expected cost of such Leased Property, plus (ii) 89.9% of the Construction costs
(including development and transaction costs) related to such Leased Property
that have been incurred through the date of payment that are or would be
considered project costs in accordance with GAAP, plus (iii) any amounts owed
with respect to such Leased Property pursuant to Section 3.4 of the Construction
Agency Agreement or Section 7.2 of the Master Agreement, plus (iv) the cost of
tenant improvements not paid by the Construction Agent that were not part of the
Construction Budget for such Leased Property.
"Construction Force Majeure Event" means, with respect to any Leased
--------------------------------
Property:
(a) an act of God arising after the related Closing Date, or
(b) any change in any Applicable Law arising after such Closing Date and
relating to the use of the Land or the construction of a Building on
the Land, or
(c) strikes, lockouts, labor troubles, unavailability of materials, riots,
insurrections or other causes beyond the Lessee's control
which prevents the Construction Agent from completing the Construction prior to
the Scheduled Construction Termination Date and which could not have been
avoided or which cannot be remedied by the Construction Agent through the
exercise of all commercially reasonable efforts or the expenditure of funds and,
in the case of (b) above, the existence or potentiality of which was not known
to and could not have been discovered prior to such Closing Date through the
exercise of reasonable due diligence by the Construction Agent.
"Construction Land Interest" means each parcel of Land for which the
Completion Date has not yet occurred.
"Construction Term" means, with respect to any Leased Property, the period
commencing on the related Closing Date and ending on the related Construction
Term Expiration Date, or such shorter period as may result from earlier
termination of the Lease as provided therein.
"Construction Term Expiration Date" means, with respect to any Leased
Property, the earliest of the following:
(a) the related Completion Date,
(b) the date on which the aggregate Funded Amounts equal
the Commitments, and
(c) the related Scheduled Construction Termination Date.
"Contractual Obligation", as applied to any Person, means any provision of
any Securities issued by that Person or any indenture, mortgage, deed of trust,
contract, undertaking, agreement, instrument or other document to which that
Person is a party or by which it or any of its properties is bound or to which
it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting any of the properties of such Person).
"Credit Agreement" means the Revolving Credit Agreement, dated as of October
11, 2000, among the Lessee, the lenders listed therein and SunTrust Bank, as
administrative agent, issuing bank and swingline lender.
"Deed" means, with respect to any Land, a General Warranty Deed (or, if the
related Title Policy is acceptable to the Lessee and the Agent, a Special or
Limited Warranty Deed), dated the applicable Closing Date, from the applicable
Seller to the Lessor, conveying such Land.
"Default" means any event, condition or failure which, with notice or lapse
of time or both, would become an Event of Default.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
any other Person (other than a natural Person) approved by the Agent and unless
an Event of Default has occurred and is continuing, the Lessee (each such
approval not to be unreasonably withheld or delayed). If the consent of the
Lessee to an assignment or to an Eligible Assignee is required under the Master
Agreement (including a consent to an assignment which does not meet the minimum
assignment thresholds specified in paragraph (a)(i) of Section 6.2 of the Master
Agreement), the Lessee shall be deemed to have given its consent five Business
Days after the date notice thereof has actually been delivered by the assigning
Lender (through the Agent) to the Lessee, unless such consent is expressly
refused by the Lessee prior to such fifth Business Day.
"Environmental Audit" means, with respect to each parcel of Land, a Phase I
Environmental Assessment, dated no more than 60 days prior to the related
Closing Date, by an environmental services firm satisfactory to the Funding
Parties.
"Environmental Laws" means and include the Resource Conservation and
Recovery Act of 1976, (RCRA) 42 U.S.C. ss.ss. 6901-6987, as amended by the
Hazardous and Solid Waste Amendments of 1984, the Comprehensive Environmental
Response, Compensation and Liability Act, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. ss.ss. 9601-9657, (CERCLA), the
Hazardous Materials Transportation Act of 1975, 49 U.S.C. ss.ss. 1801-1812, the
Toxic Substances Control Act, 15 U.S.C. ss.ss. 2601-2671, the Clean Air Act, 42
U.S.C. ss.ss. 7401 et seq., the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C. ss.ss. 136 et seq., and all similar federal, state and local
environmental laws, ordinances, rules, orders, statutes, decrees, judgments,
injunctions, codes and regulations, and any other federal, state or local laws,
ordinances, rules, codes and regulations, and any other federal, state or local
laws, ordinances, rules, codes and regulations relating to the environment,
human health or natural resources or the regulation or control of or imposing
liability or standards of conduct concerning human health, the environment,
Hazardous Materials or the clean-up or other remediation of any Leased Property,
or any part thereof, as any of the foregoing may have been from time to time
amended, supplemented or supplanted.
"Environmental Permits" means all permits, licenses, authorizations,
certificates and approvals of Governmental Authorities required by Environmental
Laws.
"Environmental Liability" shall mean any liability, contingent or otherwise
(including any liability for damages, costs of environmental investigation and
remediation, costs of administrative oversight, fines, natural resource damages,
penalties or indemnities), of the Lessee or any Subsidiary directly or
indirectly resulting from or based upon (a) any actual or alleged violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) any actual or
alleged exposure to any Hazardous Materials, (d) the Release or threatened
Release of any Hazardous Materials or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor federal statute.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated), which, together with the Lessee, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for the purposes of Section
302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Lessee or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Lessee or any ERISA Affiliate from the PBGC or a plan
administrator appointed by the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Lessee or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Lessee or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Lessee or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Event of Default" means any event or condition designated as an "Event of
Default" in Article XII of the Lease.
"Event of Loss" is defined in Section 10.1 of the Lease.
"Event of Taking" is defined in Section 10.2 of the Lease.
"Executive Officer" means with respect to any Person, the President, Vice
Presidents, Chief Financial Officer, Treasurer, Secretary and any Person holding
comparable offices or duties.
"Fair Market Rental Value" means, with respect to any Leased Property, the
fair market rent as determined by an independent appraiser chosen by the Lessor,
with the consent of the Lessee, not to be unreasonably withheld or delayed
(unless an Event of Default has occurred and is continuing, in which case, no
consent shall be required) that would be obtained in an arm's-length lease
between an informed and willing lessee and an informed and willing lessor, in
either case under no compulsion to lease, and neither of which is related to or
affiliated with the Lessor or Lessee for the lease of such Leased Property on
the terms (other than the amount of Basic Rent) set forth, or referred to, in
the Lease. Such fair market rent shall be calculated as the value for the use of
such Leased Property to be leased in place at the Land, assuming, in the
determination of such fair market rental value, that such Leased Property is in
the condition and repair required to be maintained by the terms of the related
Lease (unless such fair market rental value is being determined for the purposes
of Section 13.1 of the Lease and except as otherwise specifically provided in
the Lease, in which case this assumption shall not be made).
"Fair Market Sales Value" means, with respect to any Leased Property or any
portion thereof, the fair market sales value as determined by an independent
appraiser chosen by the Lessor or, so long as the Funded Amounts are
outstanding, the Agent, with the consent of the Lessee, not to be unreasonably
withheld or delayed (unless an Event of Default has occurred and is continuing,
in which case, no consent shall be required) that would be obtained in an
arm's-length transaction between an informed and willing buyer (other than a
lessee currently in possession) and an informed and willing seller, under no
compulsion, respectively, to buy or sell and neither of which is related to the
Lessor or Lessee, for the purchase of such Leased Property. Such fair market
sales value shall be calculated as the value for such Leased Property, assuming,
in the determination of such fair market sales value, that such Leased Property
is in the condition and repair required to be maintained by the terms of the
Lease (unless such fair market sales value is being determined for purposes of
Section 13.1 of the Lease and except as otherwise specifically provided in the
Lease or the Master Agreement, in which case this assumption shall not be made).
"Federal Funds Rate" means for any day, the rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with member banks of the Federal
Reserve System arranged by Federal funds brokers, as published by the Federal
Reserve Bank of New York on the next succeeding Business Day or if such rate is
not so published for any Business Day, the Federal Funds Rate for such day shall
be the average rounded upwards, if necessary, to the next 1/100th of 1% of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
"Final Rent Payment Date" with respect to any Leased Property is defined in
Section 13.1(e) of the Lease.
"Fiscal Quarter" shall mean any fiscal quarter of the Lessee or the
Consolidated Companies, as applicable.
"Fixed Charge Coverage Ratio" shall mean, as of any date of determination,
the ratio of (a) Consolidated EBITR to (b) Consolidated Fixed Charges, in each
case measured for the four Fiscal Quarter period ending on such date.
"Foreign Subsidiary" shall mean any Subsidiary that is organized under the
laws of a jurisdiction other than one of the fifty states of the United States
or the District of Columbia.
"Franchise Partner Program" shall mean the optional financing and business
structuring program offered by the Lessee to a limited number of qualified
restaurant operators, such operators to be determined by the Lessee in its sole
discretion, which provided such restaurant operators a business structure for
organizing, owning and funding the establishment and operation of restaurants
doing business under operating concepts owned by the Lessee.
"Funded Amount" means, as to the Lessor, the Lessor's Invested Amounts, and,
as to each Lender, the outstanding principal amount of such Lender's Loans.
"Funding" means any funding by the Funding Parties pursuant to Section 2.2
of the Master Agreement.
"Funding Date" means each Closing Date and each other date during the
Construction Term on which a Funding occurs under Section 2 of the Master
Agreement.
"Funding Parties" means the Lessor, the Agent and the Lenders, collectively.
"Funding Party Balance" means, with respect to any Leased Property, (i) for
the Lessor as of any date of determination, an amount equal to the sum of the
outstanding related Lessor's Invested Amount, all accrued and unpaid Yield on
such outstanding related Lessor's Invested Amount, all unpaid related fees owing
to the Lessor under the Operative Documents, and all other related amounts owing
to the Lessor by the Lessee under the Operative Documents, and (ii) for any
Lender as of any date of determination, an amount equal to the sum of the
outstanding related Loans of such Lender, all accrued and unpaid interest
thereon, all unpaid related fees owing to such Lender under the Operative
Documents, and all other related amounts owing to such Lender by the Lessee
under the Operative Documents.
"Funding Request" is defined in Section 2.2 of the Master Agreement.
"Funding Termination Date" means the earlier of (i) April 1, 2002 and (ii)
the termination of the Lenders' Commitments pursuant to Section 5.2 of the Loan
Agreement.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"General Contractor" means with respect to any Leased Property the general
contractor under the related Construction Contract as may be selected by the
Lessee.
"General Partner" means Atlantic Financial Managers, Inc., a Texas
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corporation.
"General Permitted Liens" mean Liens permitted pursuant to Section 5.15 of
the Master Agreement.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, decrees,
licenses, exemptions, publications, filings, notices to and declarations of or
with, or required by, any Governmental Authority, or required by any Applicable
Law and shall include, without limitation, all citings, environmental and
operating permits and licenses that are required for the use, occupancy, zoning
and operation of any Leased Property.
"Governmental Authority" means any foreign or domestic federal, state,
county, municipal or other governmental or regulatory authority, agency, board,
body, commission, instrumentality, court or any political subdivision thereof.
"Ground Lease" means, with respect to any Land, the ground lease between the
related Ground Lessor and the Lessor pursuant to which a leasehold estate is
conveyed in the Land to the Lessor.
"Ground Lessor" means, as to any Land, the ground lessor of such Land.
"Guarantor" means the Lessee, in its capacity as guarantor under the
Guaranty Agreement.
"Guaranty" of or by any Person (the "guarantor") shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of Guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly and
including any obligation, direct or indirect, of the guarantor (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued in support of such Indebtedness or
obligation; provided, that the term "Guaranty" shall not include endorsements
for collection or deposits in the ordinary course of business. The amount of any
Guaranty shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which Guaranty is made or, if not
so stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith. The term "Guaranty" used as a verb has
a corresponding meaning.
"Guaranty Agreement" means the Guaranty, dated as of October 11, 2000 by the
Guarantor in favor of the Funding Parties.
"Hazardous Material" means any substance, waste or material which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous, including petroleum, crude oil or any fraction
thereof, petroleum derivatives, by products and other hydrocarbons, or which is
or becomes regulated under any Environmental Law by any Governmental Authority,
including any agency, department, commission, board or instrumentality of the
United States, any jurisdiction in which a Leased Property is located or any
political subdivision thereof and also including, without limitation, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls ("PCBs") and radon
gas.
"Hedging Agreements" shall mean interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap agreements,
currency future or option contracts, commodity agreements and other similar
agreements or arrangements designed to protect against fluctuations in interest
rates, currency values or commodity values, in each case to which any Lessee or
any Subsidiary is a party.
"Hostile Acquisition" shall mean any Investment resulting in control of a
Person involving a tender offer or proxy contest that has not been recommended
or approved by the board of directors of the Person that is the subject of the
Investment prior to the first public announcement or disclosure relating to such
Investment.
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of the deferred purchase price of
property or services (other than trade payables incurred in the ordinary course
of business; provided, that for purposes of Article XII(e) of the Lease, trade
payables overdue by more than 120 days shall be included in this definition
except to the extent that any of such trade payables are being disputed in good
faith and by appropriate measures), (iv) all obligations of such Person under
any conditional sale or other title retention agreement(s) relating to property
acquired by such Person, (v) all Capital Lease Obligations of such Person, (vi)
all obligations, contingent or otherwise, of such Person in respect of letters
of credit, acceptances or similar extensions of credit, (vii) all Guarantees of
such Person of the type of Indebtedness described in clauses (i) through (vi)
above, (viii) all Indebtedness of a third party secured by any Lien on property
owned by such Person, whether or not such Indebtedness has been assumed by such
Person, (ix) all obligations of such Person, contingent or otherwise, to
purchase, redeem, retire or otherwise acquire for value any common stock of such
Person, (x) Off-Balance Sheet Liabilities and (xi) all obligations under Hedging
Agreements. The Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor.
"Indemnitee" means the Agent (in its individual capacity and in its capacity
as Agent), each Lender, and the Lessor, and their respective Affiliates,
successors, permitted assigns, permitted transferees, employees, officers,
directors and agents; provided, however, that in no event shall the Lessee be an
Indemnitee.
"Indemnitee Group" means the respective Affiliates, employees, officers,
directors and agents of the Agent (in its individual capacity), each Lender or
the Lessor, as applicable; provided, however, that in no event shall the Lessee
be a member of the Indemnitee Group.
"Indemnity and Contribution Agreement" shall mean the Indemnity, Subrogation
and Contribution Agreement substantially in the form of Exhibit J to the Master
Agreement, among the Lessee, the Subsidiary Guarantors and the Agent.
"Initial Closing Date" means the Closing Date for the first Leased Property
acquired by the Lessor.
"Investment" means, when used with respect to any Person, any direct or
indirect advance, loan or other extension of credit (other than the creation of
receivables in the ordinary course of business) or capital contribution by such
Person (by means of transfers of property to others or payments for property or
services for the account or use of others, or otherwise) to any Person, or any
direct or indirect purchase or other acquisition by such Person of, or of a
beneficial interest in, capital stock, partnership interests, bonds, notes,
debentures or other securities issued by any other Person.
"Issuing Bank" shall mean SunTrust Bank or any other lender under the Credit
Agreement in its capacity as an issuer of Letters of Credit thereunder.
"L&N" shall mean "L&N Seafood" or L&N Seafood Grill", which are operating
concepts of Lessee.
"Land" means the land described in Appendix B to the related Lease
Supplement.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, treaties or decrees of any Governmental Authority, or of any
court or similar entity established by any thereof.
"LC Disbursement" shall mean a payment made by the Issuing Bank pursuant to
a Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (i) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (ii) the
aggregate amount of all LC Disbursements that have not been reimbursed by or on
behalf of the Lessee at such time.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.22 of the Credit Agreement by the Issuing Bank for the account of the
Lessee.
"Lease" means the Lease Agreement, dated as of October 11, 2000, together
with each Lease Supplement thereto, between the Lessee and the Lessor, with such
modifications as are satisfactory to the Lessor and the Agent in conformity with
Applicable Law to assure customary remedies in favor of the Funding Parties in
the jurisdiction where the Leased Property is located.
"Lease Balance" means, with respect to the Leased Properties, as of any date
of determination, an amount equal to the aggregate sum of the outstanding Funded
Amounts of all Funding Parties, all accrued and unpaid interest on the Loans,
all accrued and unpaid Yield on the Lessor's Invested Amounts, all unpaid fees
owing to the Funding Parties under the Operative Documents, including all other
amounts owing to the Funding Parties by the Lessee under the Operative
Documents.
"Lease Supplement" is defined in Section 2.1 of the Lease.
"Lease Term" with respect to the Lease means (a) the Base Term, as it may be
renewed pursuant to Section 14.9 of the Lease or (b) such shorter period as may
result from earlier termination of the Lease as provided therein.
"Lease Termination Date" means the last day of the Lease Term.
"Leased Property" means Land and the related Building(s). For purposes of
the Lease, "Leased Property" means the Land identified in a Lease Supplement and
the Buildings related thereto, unless the context provides otherwise.
"Leased Property Balance" means, with respect to any Leased Property, as of
any date of determination, an amount equal to the aggregate sum of the
outstanding related Funded Amounts of all Funding Parties, all accrued and
unpaid interest on the related Loans, all accrued and unpaid Yield on the
related Lease Lessor Invested Amounts, all related unpaid fees owing to the
Funding Parties under the Operative Documents, including all other amounts owing
to the Funding Parties by the Lessee under the Operative Documents.
"Lender Basic Rent" means, for any Rent Period under the Lease, the
aggregate amount of interest accrued on the Loans related to the Leased Property
subject to the Lease pursuant to Section 2.5 of the Loan Agreement during such
Rent Period.
"Lenders" means such financial institutions as are, or who may hereafter
become, parties to the Loan Agreement as Lenders to the Lessor.
"Lending Office" for each Lender means the office such Lender designates in
writing from time to time to Lessee and the Agent.
"Lessee" is defined in the preamble to the Master Agreement.
"Lessor" is defined in the preamble to the Master Agreement.
"Lessor Basic Rent" means, for any Rent Period under the Lease, the
aggregate amount of Yield accrued and unpaid on the Lessor's Invested Amounts
under the Lease under Section 2.3(a) of the Master Agreement during such Rent
Period.
"Lessor Liens" means Liens on or against any Leased Property, the Lease, any
other Operative Document or any payment of Rent (a) which result from any act or
omission of, or any Claim against, the Lessor unrelated to the Transactions or
from Lessor's failure to perform as required under the Operative Documents or
(b) which result from any Tax owed by the Lessor, except any Tax for which the
Lessee is obligated to indemnify (including, without limitation, in the
foregoing exception, any assessments with respect to any Leased Property noted
on the related Title Policy or assessed in connection with any construction or
development by the Lessee).
"Lessor Rate" is defined in the Lessor Side Letter.
-----------
"Lessor Side Letter" means the letter agreement, dated as of October11,
2000, between Lessee and the Lessor.
"Lessor's Invested Amount" means the amounts funded by the Lessor pursuant
to Section 2 of the Master Agreement that are not proceeds of Loans by a Lender,
as such amount may be increased during the related Construction Term pursuant to
Section 2.3(c) of the Master Agreement.
"LIBOR" means, for any Rent Period, with respect to LIBOR Advances the
British Bankers' Association Interest Settlement Rate per annum for deposits in
Dollars for a period equal to such Rent Period appearing on the display
designated as Page 3750 on the Dow Jones Markets Service (or such other page on
that service or such other service designated by the British Bankers'
Association for the display of such Association's Interest Settlement Rates for
Dollar Deposits) as of 11:00 a.m. (London, England time) on the day that is two
Business Days prior to the first day of the Rent Period or if such page 3750 is
unavailable for any reason at such time, the rate which appears on the Reuters
Screen ISDA Page as of such date and such time; provided, that if the Agent
determines that the relevant foregoing sources are unavailable for the relevant
Rent Period, LIBOR shall mean the rate of interest determined by the Agent to be
the average (rounded upward, if necessary, to the nearest 1/100th of 1%) of the
rates per annum at which deposits in Dollars are offered to the Agent two (2)
Business Days preceding the first day of such Rent Period by leading banks in
the London interbank market as of 10:00 a.m. for delivery on the first day of
such Rent Period, for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Advance of the Agent.
"LIBOR Advance" means that portion of the Funded Amount bearing interest at
a rate based on the Adjusted LIBO Rate.
"Lien" means any mortgage, deed of trust, security deed, pledge, security
interest, encumbrance, lien, easement, servitude or charge of any kind,
including, without limitation, any irrevocable license, conditional sale or
other title retention agreement, any lease in the nature thereof, or any other
right of or arrangement with any creditor to have its claim satisfied out of any
specified property or asset with the proceeds therefrom prior to the
satisfaction of the claims of the general creditors of the owner thereof,
whether or not filed or recorded, or the filing of, or agreement to execute as
"debtor", any financing or continuation statement under the Uniform Commercial
Code of any jurisdiction or any federal, state or local lien imposed pursuant to
any Environmental Law.
"Loan" shall have the meaning specified in Section 2.1 of the Loan
Agreement.
"Loan Agreement" means the Loan Agreement, dated as of October 11, 2000,
among the Lessor, the Agent and the Lenders.
"Loan Documents" means the Loan Agreement, the Notes, the Assignments of
Lease and Rents, the Mortgages and all documents and instruments executed and
delivered in connection with each of the foregoing.
"Loan Event of Default" means any of the events specified in Section 5.1 of
the Loan Agreement, provided that any requirement for the giving of notice, the
lapse of time, or both, or any other condition, event or act has been satisfied.
"Loan Potential Event of Default" means any event, condition or failure
which, with notice or lapse of time or both, would become a Loan Event of
Default.
"Loss Proceeds" is defined in Section 10.6 of the Lease.
"Margin Regulations" means Regulations T, U and X of the Board of Governors
of the Federal Reserve System, as the same may be in effect from time to time.
"Master Agreement" means the Master Agreement, dated as of October 11, 2000,
among the Lessee, the Lessor, the Agent and the Lenders.
"Material Adverse Effect" means, with respect to any event, act, condition
or occurrence of whatever nature (including any adverse determination in any
litigation, arbitration or governmental investigation or proceeding), whether
singularly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect on, (i) the business,
results of operations, financial condition, assets, liabilities or prospects of
the Lessee and its Subsidiaries, taken as a whole, or (ii) the ability of the
Lessee or any other Obligor to perform in any material respect under the
Operative Documents or (iii) the value, utility or useful life of any Leased
Property, or (iv) the validity, enforceability or legality of any of the
Operative Documents, or the rights or remedies of the Agent or any Funding Party
thereunder, or (v) the priority, perfection or status of any Funding Party's
interest in any Leased Property.
"Material Indebtedness" shall mean Indebtedness or obligations in respect of
one or more Hedging Agreements, of any one or more of the Lessee and the
Subsidiaries in an aggregate principal amount exceeding $2,500,000. For purposes
of determining Material Indebtedness, the "principal amount" of the obligations
of the Lessee or any Subsidiary in respect to any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that the Lessee or such Subsidiary would be required to pay if such Hedging
Agreement were terminated at such time.
"Material Subsidiary" shall mean (i) each Obligor other than the Lessee, and
(ii) each other Subsidiary of the Lessee, now existing or hereafter established
or acquired, that at any time prior to the Lease Termination Date, has or
acquires total assets in excess of $5,000,000, or that accounted for or produced
more than 5% of the Consolidated Net Income (Loss) of the Lessee on a
consolidated basis during any of the three most recently completed Fiscal Years
of the Lessee, or that is otherwise material to the operations or business of
the Lessee or another Material Subsidiary.
"Moody's" means Moody's Investor Service, Inc.
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"Mortgage" means, with respect to any Leased Property, that certain
mortgage, deed of trust or security deed, dated as of the related Closing Date,
by the Lessor to the Agent, in the form of Exhibit D attached to the Master
Agreement, with such modifications as are satisfactory to the Lessor and the
Agent in conformity with Applicable Law to assure customary remedies in favor of
the Agent in the jurisdiction where the Leased Property is located.
"Multiemployer Plan" shall have the meaning set forth in Section 4001(a)(3)
of ERISA.
"Net Proceeds" means, with respect to any equity offering or issuance of
Subordinated Debt, (i) all cash received with respect thereto, whether by way of
deferred payment pursuant to a promissory note, a receivable or otherwise (and
interest paid thereon), plus (ii) the higher of the book value or the fair
market value of any assets (including any stock) received with respect thereto,
in each case, net of reasonable and customary sale expenses, fees and
commissions incurred and taxes paid or expected to be payable within the next
twelve months in connection therewith.
"Notes" means each A Note and each B Note issued by the Lessor under the
Loan Agreement, and any and all notes issued in replacement or exchange therefor
in accordance with the provisions thereof.
"Obligations" means all amounts owed by, and obligations of, the Lessor to
the Lenders or the Agent under the Loan Agreement, Notes and other Operative
Documents.
"Obligor" means the Lessee and each Subsidiary Guarantor.
"Off-Balance Sheet Liabilities" of any Person shall mean (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability of such Person under any sale
and leaseback transactions which do not create a liability on the balance sheet
of such Person, (iii) any Synthetic Lease Obligation or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the balance sheet of such Person in accordance with GAAP.
"Officer's Certificate" of a Person means a certificate signed by the
Chairman of the Board or the President or any Executive Vice President or any
Senior Vice President or any other Vice President of such Person signing with
the Treasurer or any Assistant Treasurer or the Controller or any Assistant
Controller or the Secretary or any Assistant Secretary of the such Person, or by
any Vice President who is also Controller or Treasurer signing alone.
"Operative Documents" means the Master Agreement, the Guaranty Agreement,
the Purchase Agreements, the Deeds, the Lease, the Security Agreement and
Assignment, the Notes, the Loan Agreement, the Construction Agency Agreement,
the Assignments of Lease and Rents, the Mortgages, the Ground Leases and the
other documents delivered in connection with the transactions contemplated by
the Master Agreement.
"OSHA" shall mean the Occupational Safety and Health Act of 1970, as amended
from time to time, and any successor statute.
"Overdue Rate" means the lesser of (a) the highest interest rate permitted
by Applicable Law and (b) an interest rate per annum (calculated on the basis of
a 365-day (or 366-day, if appropriate) year equal to 2.0% above the Base Rate in
effect from time to time or, in the case of Yield, 2% above the Lessor Rate.
"Partial Purchase Option" is defined in Section 14.1(b) of the Lease.
"Participant" is defined in Section 6.2(c) of the Master Agreement.
"Partnership Agreement" means the Agreement of Limited Partnership of AFG,
dated as of February 28, 1996, among the General Partner and the persons listed
on Schedule A thereto as limited partners.
"Payment Date" means the last day of each Rent Period (and if such Rent
Period is longer than three months, the day that is 90 days after the first day
of such Rent Period) or, if such day is not a Business Day, the next Business
Day.
"Payment Date Notice" is defined in Section 2.3(e) of the Master Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA, and any successor entity performing similar functions.
"Permitted Encumbrances" shall mean
(i) Liens imposed by law for taxes not
yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate
reserves are being maintained in accordance with GAAP;
(ii)statutory Liens of landlords and
Liens of carriers, warehousemen, mechanics, materialmen
and other Liens imposed by law created in the ordinary
course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being
maintained in accordance with GAAP;
(iii) pledges and deposits made in the
ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social
security laws or regulations;
(iv)deposits to secure the performance
of bids, trade contracts, leases, statutory obligations,
surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary
course of business;
(v) judgment and attachment liens not
giving rise to an Event of Default or Liens created by or
existing from any litigation or legal proceeding that are
currently being contested in good faith by appropriate
proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP; and
(vi)easements, zoning restrictions,
rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of
business that do not secure any monetary obligations and
do not materially detract from the value of the affected
property or materially interfere with the ordinary conduct
of business of the Lessee and its Subsidiaries taken as a
whole;
provided, that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" shall mean:
(i) direct obligations of, or
obligations the principal of and interest on which are
unconditionally Guaranteed by, the United States (or by
any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States),
in each case maturing within one year from the date of
acquisition thereof;
(ii)commercial paper having the highest
rating, at the time of acquisition thereof, of S&P or
Moody's and in either case maturing within six months from
the date of acquisition thereof;
(iii) certificates of deposit, bankers'
acceptances and time deposits maturing within 180 days of
the date of acquisition thereof issued or Guaranteed by or
placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank
organized under the laws of the United States or any state
thereof which has a combined capital and surplus and
undivided profits of not less than $500,000,000;
(iv)fully collateralized repurchase
agreements with a term of not more than 30 days for
securities described in clause (i) above and entered into
with a financial institution satisfying the criteria
described in clause (iii) above; and
(v) mutual funds investing solely in any
one or more of the Permitted Investments described in
clauses (i) through (iv) above.
"Permitted Liens" means the following with respect to any Leased Property:
(a) the respective rights and interests of the Lessee, the Lessor, the Agent and
any Lender, as provided in the Operative Documents, (b) Liens for Taxes either
not yet due or being contested in good faith and by appropriate proceedings, so
long as enforcement thereof is stayed pending such proceedings, (c)
materialmen's, mechanics', workers', repairmen's, employees' or other like Liens
arising after the related Closing Date in the ordinary course of business for
amounts either not yet due or being contested in good faith and by appropriate
proceedings, so long as enforcement thereof is stayed pending such proceedings,
(d) Liens arising after such Closing Date out of judgments or awards with
respect to which at the time an appeal or proceeding for review is being
prosecuted in good faith, so long as the enforcement thereof has been stayed
pending such appeal or review, (e) easements, rights of way, reservations,
servitudes and rights of others against the Land which do not materially and
adversely affect the value or the utility of such Leased Property, (f) other
Liens incidental to the conduct of Lessee's business which were not incurred in
connection with the borrowing of money or the obtaining of advances or credit
and which do not in the aggregate materially detract from the value of such
Leased Property or materially impair the use thereof, and (g) assignments,
leases and subleases expressly permitted by the Operative Documents.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, nonincorporated
organization or government or any agency or political subdivision thereof.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Lessee or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Plans and Specifications" means with respect to any Building the final
plans and specifications for such Building prepared by the Architect, and, if
applicable, referred to by the Appraiser in the Appraisal, as such Plans and
Specifications may be hereafter amended, supplemented or otherwise modified from
time to time.
"Potential Event of Default" means any event, condition or failure which,
with notice or lapse of time or both, would become an Event of Default.
"Purchase Agreement" means with respect to any Land, the purchase agreement
with the Seller for the conveyance of such Land to the Lessor.
"Purchase Option" is defined in Section 14.1(a) of the Lease.
"Quarterly Payment Date" means the last Business Day of each March, June,
September and December of each year.
"Recourse Deficiency Amount" means, as of any date of determination thereof,
the sum of (i) the aggregate principal amount of the A Loans then outstanding,
plus (ii) all accrued and unpaid interest on the A Loans.
"Register" is defined in Section 6.2(b) of the Master Agreement.
"Regulations" means the income tax regulations promulgated from time to time
under and pursuant to the Code.
"Release" means the release, deposit, disposal or leak of any Hazardous
Material into or upon or under any land or water or air, or otherwise into the
environment, including, without limitation, by means of burial, disposal,
discharge, emission, injection, spillage, leakage, seepage, leaching, dumping,
pumping, pouring, escaping, emptying, placement and the like.
"Release Date" means, with respect to any Leased Property, the earlier of
(i) the date that the Lease Balance has been paid in full, and (ii) the date on
which the Agent gives notice to the Lessor that the Lenders release any and all
interest they may have in such Leased Property, and all proceeds thereof, and
any rights to direct, consent or deny consent to any action by the Lessor with
respect to such Leased Property.
"Remarketing Option" is defined in Section 14.6 of the Lease.
"Rent" means Basic Rent and Supplemental Rent, collectively.
----
"Rent Period" means (x) in the case of Base Rate Advances, means the period
from, and including, a Quarterly Payment Date to, but excluding, the next
succeeding Quarterly Payment Date and (y) in the case of LIBOR Advances, either
a 1, 2, 3 or 6 month period; provided that:
(a) The initial Rent Period for any
Funding shall commence on the Funding Date of such Funding
and each Rent Period occurring thereafter in respect of
such Funding shall commence on the day on which the next
preceding Rent Period expires;
(b) If any Rent Period would otherwise
expire on a day which is not a Business Day, such Rent
Period shall expire on the next succeeding Business Day,
provided that if any Rent Period in respect of LIBOR
Advances would otherwise expire on a day that is not a
Business Day but is a day of the month after which no
further Business Day occurs in such month, such Rent
Period shall expire on the next preceding Business Day;
(c) Any Rent Period in respect of LIBOR
Advances which begins on a day for which there is no
numerically corresponding day in the calendar month at the
end of such Rent Period shall, subject to paragraph (d)
below, expire on the last Business Day of such calendar
month; and
(d) No Rent Period shall extend beyond
the Lease Termination Date.
"Report" is defined in Section 7.6 of the Master Agreement.
"Required Lenders" means, at any time, Lenders holding at least 51% of the
aggregate Commitments of the Lenders, or, if the Commitments are no longer in
effect, Lenders holding at least 51% of the aggregate outstanding principal
amount of the Loans.
"Required Funding Parties" means, at any time, Funding Parties holding at
least 51% of the Commitments of the Funding Parties, or, if the Commitments are
no longer in effect, Funding Parties holding at least 51% of the aggregate
outstanding principal amount of the Funded Amounts.
"Requirements of Law" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, permit, approval, authorization, license or variance, order or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject, including, without
limitation, the Securities Act, the Securities Exchange Act, Regulations T, U
and X of the Board of Governors of the Federal Reserve System, and any building,
environmental or land use requirement or permit or occupational safety or health
law, rule or regulation.
"Responsible Officer" means the president, the chief executive officer, the
chief operating officer, the chief financial officer, the treasurer or a vice
president of the Lessee or such other representative of the Lessee as may be
designated in writing by one of the foregoing with the consent of the Agent;
and, with respect to the financial covenants only, the chief financial officer
or treasurer of the Lessee.
"Restricted Payment" shall have the meaning set forth in Section 5.19 of the
Master Agreement.
"Scheduled Construction Termination Date" means with respect to any Building
the earlier of (i) the Funding Termination Date and (ii) one year after the
commencement of the Construction Commencement Date.
"SEC" means the United States Securities and Exchange Commission.
---
"Securities" means any stock, shares, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Agreement and Assignment" means, with respect to any Leased
Property, the Security Agreement and Assignment (Construction Contract,
Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans,
Specifications and Drawings) from the Lessee to the Lessor, substantially in the
form of Exhibit C to the Master Agreement.
"Seller" means as to any Leased Property, the seller thereof to the Lessor
on the related Closing Date.
"Subordinated Debt" shall mean all Indebtedness of Lessee subordinated to
all Obligations incurred or assumed on terms and conditions satisfactory in all
respects to the Agent and the Required Lenders, including without limitation,
with respect to interest rates, payment terms, maturities, amortization
schedules, covenants, defaults, remedies, and subordination provisions, as
evidenced by the written approval of the Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person (the "parent"), any
corporation, partnership, joint venture, limited liability company, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, partnership, joint venture, limited liability company,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power, or in the case of a partnership, more than 50% of the general partnership
interests are, as of such date, are directly or indirectly owned, controlled
(intentionally lowercase) or held by the parent. Unless otherwise indicated, all
references to "Subsidiary" hereunder shall mean a Subsidiary of the Lessee.
"Subsidiary Guaranty Agreement" shall mean the Subsidiary Guaranty Agreement
substantially in the form of Exhibit I to the Master Agreement, made by the
Subsidiary Guarantors in favor of the Agent for the benefit of the Funding
Parties.
"Subsidiary Guarantor" shall mean any Material Subsidiary that is not a
Foreign Subsidiary.
"SunTrust Bank" means SunTrust Bank, a Georgia banking corporation.
"Supplemental Rent" means any and all amounts, liabilities and obligations
other than Basic Rent which the Lessee assumes or agrees or is otherwise
obligated to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to the Lessor, the Agent, any Lender or any
other party, including, without limitation, amounts under Article XVI of the
Lease, and indemnities and damages for breach of any covenants, representations,
warranties or agreements, and all overdue or late payment charges in respect of
any Funded Amount.
"Synthetic Lease" means a lease transaction under which the parties intend
that (i) the lease will be treated as an "operating lease" by the lessee
pursuant to Statement of Financial Accounting Standards No. 13, as amended and
(ii) the lessee will be entitled to various tax and other benefits ordinarily
available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" shall mean, with respect to any Person, the
sum of (i) all remaining rental obligations of such Person as lessee under
Synthetic Leases which are attributable to principal and, without duplication,
(ii) all rental and purchase price payment obligations of such Person under such
Synthetic Leases assuming such Person exercises the option to purchase the lease
property at the end of the lease term.
"Tax" or "Taxes" is defined in Section 7.4 of the Master Agreement.
"Tax Indemnitee" means the Lessor, the Agent, any Lender and their
respective Affiliates, successors, permitted assigns, permitted transferees,
employees, officers, directors and agents thereof, provided, however, that in no
event shall the Lessee be a Tax Indemnitee; provided, further, that with respect
to indemnities payable pursuant to Section 7.4 of the Master Agreement related
to Construction Land Interests during the Construction Term, only the Lessor
shall be a Tax Indemnitee.
"Telerate" shall mean, when used in connection with any designated page and
LIBOR, the display page so designated on the Dow Jones Telerate Service (or such
other page as may replace that page on that service for the purpose of
displaying rates comparable to LIBOR).
"Tia's" shall mean Tia's Mexican Restaurants", an operating concept of
Tia's, LLC, a Delaware limited liability company, a wholly owned subsidiary of
Lessee.
"Title Insurance Company" means the company that has or will issue the title
policies with respect to a Leased Property, which company shall be reasonably
acceptable to the Funding Parties.
"Title Policy" is defined in Section 3.1 of the Master Agreement.
"Transaction" means all the transactions and activities referred to in or
contemplated by the Operative Documents.
"UCC" means the Uniform Commercial Code of Georgia, as in effect from time
to time.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Yield" is defined in Section 2.3 of the Master Agreement.
<PAGE>
After recordation, this instrument should be returned to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Rex Palmer
8850269.5 101300 938C 99539306
<PAGE>
LEASE AGREEMENT
Dated as of October 11, 2000
between
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
and
RUBY TUESDAY, INC., as Lessee
-------------------------------------------
<PAGE>
TABLE OF CONTENTS
(Lease Agreement)
Page
ARTICLE I......................................DEFINITIONS 1
ARTICLE II........................LEASE OF LEASED PROPERTY 1
2.1 Acceptance and Lease of Property................................1
2.2 Acceptance Procedure............................................2
ARTICLE III...........................................RENT 2
3.1 Basic Rent......................................................2
3.2 Supplemental Rent...............................................3
3.3 Method of Payment...............................................3
3.4 Late Payment....................................................3
3.5 Net Lease; No Setoff, Etc.......................................3
3.6 Certain Taxes...................................................5
3.7 Utility Charges.................................................6
ARTICLE IV.........................................WAIVERS 6
ARTICLE V............LIENS; EASEMENTS; PARTIAL CONVEYANCES 7
ARTICLE VI. MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS................9
6.1 Maintenance and Repair; Compliance With Law....................9
6.2 Alterations...................................................10
6.3 Title to Alterations..........................................10
ARTICLE VII............................................USE 10
ARTICLE VIII.....................................INSURANCE 11
ARTICLE IX.......................ASSIGNMENT AND SUBLEASING 12
ARTICLE X........LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE 13
10.1 Event of Loss................................................13
10.2 Event of Taking..............................................14
10.3 Casualty.....................................................15
10.4 Condemnation.................................................15
10.5 Verification of Restoration and Rebuilding...................15
10.6 Application of Payments......................................15
10.7 Prosecution of Awards........................................16
10.8 Application of Certain Payments
Not Relating to an Event of Taking...........................17
10.9 Other Dispositions...........................................17
10.10 No Rent Abatement............................................18
ARTICLE XI.....................INTEREST CONVEYED TO LESSEE 18
ARTICLE XII..............................EVENTS OF DEFAULT 18
ARTICLE XIII...................................ENFORCEMENT 22
13.1 Remedies.....................................................22
13.2 Remedies Cumulative; No Waiver; Consents.....................25
13.3.....Certain Limitations 25
ARTICLE XIV. SALE, RETURN OR PURCHASE OF
LEASED PROPERTY; RENEWAL ..............26
14.1 Lessee's Option to Purchase..................................26
14.2 Conveyance to Lessee.........................................27
14.3 Acceleration of Purchase Obligation..........................27
14.4 Determination of Purchase Price..............................27
14.5 Purchase Procedure...........................................28
14.6 Option to Remarket...........................................29
14.7 Rejection of Sale............................................32
14.8 Return of Leased Property....................................32
14.9 Renewal......................................................33
ARTICLE XV..............................LESSEE'S EQUIPMENT 34
ARTICLE XVI....................RIGHT TO PERFORM FOR LESSEE 35
ARTICLE XVII.................................MISCELLANEOUS 35
17.1 Reports......................................................35
17.2 Binding Effect; Successors and Assigns; Survival.............35
17.3 Quiet Enjoyment..............................................36
17.4 Notices......................................................36
17.5 Severability.................................................37
17.6 Amendment; Complete Agreements...............................37
17.7 Construction.................................................38
17.8 Headings.....................................................38
17.9 Counterparts.................................................38
17.10 GOVERNING LAW................................................38
17.11 Discharge of Lessee's Obligations by its Affiliates..........38
17.12 Liability of Lessor Limited..................................38
17.13 Estoppel Certificates........................................39
17.14 No Joint Venture.............................................40
17.15 No Accord and Satisfaction...................................40
17.16 No Merger....................................................40
17.17 Survival.....................................................40
17.18 Chattel Paper................................................40
17.19 Time of Essence..............................................41
17.20 Recordation of Lease.........................................41
17.21 Investment of Security Funds.................................41
17.22 Ground Leases................................................41
17.23 Land and Building............................................42
APPENDICES AND EXHIBITS
APPENDIX A Defined Terms
EXHIBIT A Lease Supplement
<PAGE>
THIS LEASE AGREEMENT (as from time to time amended or supplemented,
this "Lease"), dated as of October 11, 2000, is between ATLANTIC FINANCIAL
GROUP, LTD., a Texas limited partnership (together with its successors and
assigns hereunder, the "Lessor"), as Lessor, and RUBY TUESDAY, INC., a Georgia
corporation (together with its successors and permitted assigns hereunder, the
"Lessee"), as Lessee.
PRELIMINARY STATEMENT
A. Lessor will purchase, or acquire a leasehold interest in, from one
or more third parties designated by Lessee, on each Closing Date, certain
parcels of real property to be specified by Lessee, together with any
improvements thereon.
B. Lessor desires to lease to Lessee, and Lessee desires to lease from
Lessor, each such property.
C. Lessee will construct certain improvements on such parcels of real
property which as constructed will be the property of Lessor and will become
part of such property subject to the terms of this Lease.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, Lessor
and Lessee hereby agree as follows:
I. ARTICLE
DEFINITIONS
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in Appendix A hereto for all purposes hereof.
III. ARTICLE
LEASE OF LEASED PROPERTY
Section Acceptance and Lease of Property. On each Closing Date, Lessor,
subject to the satisfaction or waiver of the conditions set forth in Section 3
of the Master Agreement, hereby agrees to accept delivery on such Closing Date
of the Land designated by Lessee to be delivered on such Closing Date pursuant
to the terms of the Master Agreement, together with any improvements thereon and
simultaneously to lease to Lessee hereunder for the Lease Term, Lessor's
interest in such Land and in such improvements, together with any Building which
thereafter may be constructed thereon pursuant to the Construction Agency
Agreement, and Lessee hereby agrees, expressly for the direct benefit of Lessor,
commencing on such Closing Date for the Lease Term, to lease from Lessor
Lessor's interest in such Land to be delivered on such Closing Date together
with Lessor's interest in any Building and other improvements thereon or which
thereafter may be constructed thereon pursuant to the Construction Agency
Agreement.
Section Acceptance Procedure. Lessor hereby authorizes one or more
employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery on behalf of
Lessor of that Leased Property identified on the applicable Funding Request,
subject to the satisfaction of the conditions in Section 3 of the Master
Agreement. Lessee hereby agrees that such acceptance of delivery by such
authorized representative or representatives and the execution and delivery by
Lessee on each Closing Date of a Lease Supplement in substantially the form of
Exhibit A hereto (appropriately completed) shall, without further act,
constitute the irrevocable acceptance by Lessee of that Leased Property which is
the subject thereof for all purposes of this Lease and the other Operative
Documents on the terms set forth therein and herein, and that such Leased
Property, together with any improvements constructed thereon pursuant to the
Construction Agency Agreement, shall be deemed to be included in the leasehold
estate of this Lease and shall be subject to the terms and conditions of this
Lease as of such Closing Date. The demise and lease of each Building pursuant to
this Section 2.2 shall include any additional right, title or interest in such
Building which may at any time be acquired by Lessor, the intent being that all
right, title and interest of Lessor in and to such Building shall at all times
be demised and leased to Lessee hereunder.
V. ARTICLE
RENT
Section Basic Rent. Beginning with and including the first Payment Date
occurring after the Closing Date, Lessee shall pay to the Agent (as assignee of
Lessor) the Basic Rent for the Leased Properties, in installments, payable in
arrears on each Payment Date during the Lease Term, it being understood that,
pursuant to Section 2.3(c) of the Master Agreement, no Basic Rent shall be
payable with respect to Construction Land Interests during the Construction Term
therefor.
Section Supplemental Rent. Lessee shall pay to the Agent, or to
whomever shall be entitled thereto as expressly provided herein or in any other
Operative Document, any and all Supplemental Rent within five (5) Business Days
of the date the same shall become due and payable and in the event of any
failure on the part of Lessee to pay any Supplemental Rent, the Agent shall have
all rights, powers and remedies provided for herein or by law or in equity or
otherwise in the case of nonpayment of Basic Rent. All Supplemental Rent to be
paid pursuant to this Section 3.2 shall be payable in the type of funds and in
the manner set forth in Section 3.3.
Section Method of Payment. Basic Rent shall be paid to the Agent, and
Supplemental Rent (including amounts due under Article XIV hereof) shall be paid
to the Agent (or to such Person as may be entitled thereto) or, in each case, to
such Person as the Agent (or such other Person) shall specify in writing to
Lessee, and at such place as the Agent (or such other Person) shall specify in
writing to Lessee, which specifications by the Agent (or such other Person)
shall be given by the Agent at least five (5) Business Days prior to the due
date therefor. Each payment of Rent (including payments under Article XIV
hereof) shall be made by Lessee prior to 12:00 p.m. (noon) Atlanta, Georgia time
at the place of payment in funds consisting of lawful currency of the United
States of America which shall be immediately available on the scheduled date
when such payment shall be due, unless such scheduled date shall not be a
Business Day, in which case such payment shall be made on the next succeeding
Business Day.
Section Late Payment. If any Basic Rent shall not be paid on the date
when due, Lessee shall pay to the Agent, as Supplemental Rent, interest (to the
maximum extent permitted by law) on such overdue amount from and including the
due date thereof to but excluding the Business Day of payment thereof at the
Overdue Rate.
Section Net Lease; No Setoff, Etc. This Lease is a net lease and
notwithstanding any other provision of this Lease, Lessee shall pay all Basic
Rent and Supplemental Rent, and all costs, charges, Taxes (other than Taxes
covered by the exclusion described in Section 7.4(b) of the Master Agreement),
assessments and other expenses foreseen or unforeseen, for which Lessee or any
Indemnitee is or shall become liable by reason of Lessee's or such Indemnitee's
estate, right, title or interest in the Leased Properties, or that are connected
with or arise out of the acquisition (except the initial costs of purchase by
Lessor of its interest in any Leased Property, which costs, subject to the terms
of the Master Agreement, shall be funded by the Funding Parties pursuant to the
Master Agreement), installation, possession, use, occupancy, maintenance,
ownership, leasing, repairs and rebuilding of, or addition to, the Leased
Properties or any portion thereof, and any other amounts payable hereunder and
under the other Operative Documents without counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction,
and Lessee's obligation to pay all such amounts throughout the Lease Term,
including the Construction Term, is absolute and unconditional. The obligations
and liabilities of Lessee hereunder shall in no way be released, discharged or
otherwise affected for any reason, including without limitation: (a) any defect
in the condition, merchantability, design, quality or fitness for use of any
Leased Property or any part thereof, or the failure of any Leased Property to
comply with all Applicable Law, including any inability to occupy or use any
Leased Property by reason of such non-compliance; (b) any damage to, removal,
abandonment, salvage, loss, contamination of or Release from, scrapping or
destruction of or any requisition or taking of any Leased Property or any part
thereof; (c) any restriction, prevention or curtailment of or interference with
any use of any Leased Property or any part thereof including eviction; (d) any
defect in title to or rights to any Leased Property or any Lien on such title or
rights or on any Leased Property; (e) any change, waiver, extension, indulgence
or other action or omission or breach in respect of any obligation or liability
of or by Lessor, the Agent or any Lender; (f) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to Lessee, Lessor, any Lender, the Agent or any other
Person, or any action taken with respect to this Lease by any trustee or
receiver of Lessee, Lessor, any Lender, the Agent, any Ground Lessor or any
other Person, or by any court, in any such proceeding; (g) any claim that Lessee
has or might have against any Person, including without limitation, Lessor, any
vendor, manufacturer, contractor of or for any Building or any part thereof, the
Agent, any Ground Lessor or any Lender; (h) any failure on the part of Lessor to
perform or comply with any of the terms of this Lease, any other Operative
Document or of any other agreement; (i) any invalidity or unenforceability or
illegality or disaffirmance of this Lease against or by Lessee or any provision
hereof or any of the other Operative Documents or any provision of any thereof
whether or not related to the Transaction; (j) the impossibility or illegality
of performance by Lessee, Lessor or both; (k) any action by any court,
administrative agency or other Governmental Authority; (l) any restriction,
prevention or curtailment of or interference with the Construction or any use of
any Leased Property or any part thereof; or (m) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Lessee shall have
notice or knowledge of any of the foregoing. Except as specifically set forth in
Article XIV or X of this Lease, this Lease shall be noncancellable by Lessee in
any circumstance whatsoever and Lessee, to the extent permitted by Applicable
Law, waives all rights now or hereafter conferred by statute or otherwise to
quit, terminate or surrender this Lease, or to any diminution, abatement or
reduction of Rent payable by Lessee hereunder. Each payment of Rent made by
Lessee hereunder shall be final and Lessee shall not seek or have any right to
recover all or any part of such payment from Lessor, the Agent, any Lender or
any party to any agreements related thereto for any reason whatsoever. Lessee
assumes the sole responsibility for the condition, use, operation, maintenance,
and management of the Leased Properties and Lessor shall have no responsibility
in respect thereof and shall have no liability for damage to the property of
either Lessee or any subtenant of Lessee on any account or for any reason
whatsoever, other than solely by reason of Lessor's willful misconduct or gross
negligence.
Section Certain Taxes. Without limiting the generality of Section 3.5,
Lessee agrees to pay when due all real estate taxes, personal property taxes,
gross sales taxes, including any sales or lease tax imposed upon the rental
payments hereunder or under a sublease, occupational license taxes, water
charges, sewer charges, assessments of any nature and all other governmental
impositions and charges of every kind and nature whatsoever (the "tax(es)"),
when the same shall be due and payable without penalty or interest; provided,
however, that this Section shall not apply to any of the taxes covered by the
exclusion described in Section 7.4(b) of the Master Agreement. It is the
intention of the parties hereto that, insofar as the same may lawfully be done,
Lessor shall be, except as specifically provided for herein, free from all
expenses in any way related to the Leased Properties and the use and occupancy
thereof. Any tax relating to a fiscal period of any taxing authority falling
partially within and partially outside the Lease Term, shall be apportioned and
adjusted between Lessor and Lessee. Lessee covenants to furnish Lessor and the
Agent, upon the Agent's request, within forty-five (45) days after the last date
when any tax must be paid by Lessee as provided in this Section 3.6, official
receipts of the appropriate taxing, authority or other proof satisfactory to
Lessor, evidencing the payment thereof.
So long as no Event of Default has occurred and is continuing, Lessee
may defer payment of a tax so long as the validity or the amount thereof is
contested by Lessee with diligence and in good faith; provided, however, that
Lessee shall furnish to Lessor and the Agent a bond or other adequate security
in an amount and on terms reasonably satisfactory to Lessor and the Agent and
shall pay the tax in sufficient time to prevent delivery of a tax deed. Such
contest shall be at Lessee's sole cost and expense. Lessee covenants to
indemnify and save harmless Lessor, the Agent and each Lender from any actual
and reasonable costs or expenses incurred by Lessor, the Agent or any Lender as
a result of such contest.
Section Utility Charges. Lessee agrees to pay or cause to be paid as
and when the same are due and payable all charges for gas, water, sewer,
electricity, lights, heat, power, telephone or other communication service and
all other utility services used, rendered or supplied to, upon or in connection
with the Leased Properties.
VII. ARTICLE
WAIVERS
During the Lease Term, Lessor's interest in the Building(s) (whether or
not completed) and the Land is demised and let by Lessor "AS IS" subject to (a)
the rights of any parties in possession thereof, (b) the state of the title
thereto existing at the time Lessor acquired its interest in the Leased
Properties, (c) any state of facts which an accurate survey or physical
inspection might show (including the survey delivered on the Closing Date), (d)
all Applicable Law, and (e) any violations of Applicable Law which may exist
upon or subsequent to the commencement of the Lease Term. LESSEE ACKNOWLEDGES
THAT, ALTHOUGH LESSOR WILL OWN AND HOLD TITLE TO THE LEASED PROPERTIES, LESSOR
IS NOT RESPONSIBLE FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF
THE BUILDING(S) OR ANY ALTERATIONS. NEITHER LESSOR, THE AGENT NOR ANY LENDER HAS
MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE,
MERCHANTABILITY, TITLE, HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS
FOR USE OF THE LEASED PROPERTIES (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LEASED PROPERTIES (OR ANY PART THEREOF), ALL SUCH WARRANTIES BEING HEREBY
DISCLAIMED, AND NEITHER LESSOR, THE AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF ANY LEASED PROPERTY,
OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAW, except that Lessor
hereby represents and warrants that each Leased Property is and shall be free of
Lessor Liens. As between Lessor and Lessee, Lessee has been afforded full
opportunity to inspect each Leased Property, is satisfied with the results of
its inspections of such Leased Property and is entering into this Lease solely
on the basis of the results of its own inspections and all risks incident to the
matters discussed in the two preceding sentences, as between Lessor, the Agent
or the Lenders on the one hand, and Lessee, on the other, are to be borne by
Lessee. The provisions of this Article IV have been negotiated, and, except to
the extent otherwise expressly stated, the foregoing provisions are intended to
be a complete exclusion and negation of any representations or warranties by
Lessor, the Agent or the Lenders, express or implied, with respect to the Leased
Properties, that may arise pursuant to any law now or hereafter in effect, or
otherwise.
IX. ARTICLE
LIENS; EASEMENTS; PARTIAL CONVEYANCES
Lessee shall not directly or indirectly create, incur or assume, any
Lien on or with respect to any Leased Property, the title thereto, or any
interest therein, including any Liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of any Leased Property or by
reason of labor or materials furnished or claimed to have been furnished to
Lessee, or any of its contractors or agents or Alterations constructed by
Lessee, except, in all cases, Permitted Liens.
Notwithstanding the foregoing paragraph, at the request of Lessee,
Lessor shall, from time to time during the Lease Term and upon reasonable
advance written notice from Lessee, and receipt of the materials specified in
the next succeeding sentence, consent to and join in any (i) grant of easements,
licenses, rights of way and other rights in the nature of easements, including,
without limitation, utility easements to facilitate Lessee's use, development
and construction of the Leased Properties, (ii) release or termination of
easements, licenses, rights of way or other rights in the nature of easements
which are for the benefit of the Land or the Building(s) or any portion thereof,
(iii) dedication or transfer of portions of the Land, not improved with a
Building, for road, highway or other public purposes, (iv) execution of
agreements for ingress and egress and amendments to any covenants and
restrictions affecting the Land or the Building(s) or any portion thereof and
(v) request to any Governmental Authority for platting or subdivision or
replatting or resubdivision approval with respect to the Land or any portion
thereof or any parcel of land of which the Land or any portion thereof forms a
part or a request for any variance from zoning or other governmental
requirements. Lessor's obligations pursuant to the preceding sentence shall be
subject to the requirements that:
1. any such action shall be at the sole cost and expense of Lessee and Lessee
shall pay all actual and reasonable out-of-pocket costs of Lessor, the Agent and
any Lender in connection therewith (including, without limitation, the
reasonable fees of attorneys, architects, engineers, planners, appraisers and
other professionals reasonably retained by Lessor, the Agent or any Lender in
connection with any such action),
2.Lessee shall have delivered to Lessor and Agent a certificate of a Responsible
Officer of Lessee stating that
a. such action will not cause any Leased Property, the
Land or any
Building or any portion thereof to fail to comply in any
material respect with the
provisions of the Lease or any other Operative Documents,
or in any material respect with
Applicable Law; and
b. such action will not materially reduce the Fair Market
Sales Value, utility
or useful life of any Leased Property, the Land or any
Building nor Lessor's interest
therein; and
(c) in the case of any release or conveyance, if Lessor, the
Agent or any Lender so reasonably requests, Lessee will cause to be issued and
delivered to Lessor and the Agent by the Title Insurance Company an endorsement
to the Title Policy pursuant to which the Title Insurance Company agrees that
its liability for the payment of any loss or damage under the terms and
provisions of the Title Policy will not be affected by reason of the fact that a
portion of the real property referred to in Schedule A of the Title Policy has
been released or conveyed by Lessor.
XI. ARTICLE
MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section Maintenance and Repair; Compliance With Law. Lessee, at its own
expense, shall at all times (a) maintain each Leased Property in good repair and
condition, and in good and efficient working order (subject to ordinary wear and
tear), in accordance with prudent industry standards and, in any event, in no
less a manner as other similar restaurant units owned or leased by Lessee or its
Affiliates, (b) make all Alterations in accordance with, and maintain (whether
or not such maintenance requires structural modifications or Alterations) and
operate and otherwise keep each Leased Property in compliance in all material
respects with, all Applicable Laws and insurance requirements, and (c) make all
material repairs, replacements and renewals of each Leased Property or any part
thereof which may be required to keep such Leased Property in the condition
required by the preceding clauses (a) and (b). Lessee shall perform the
foregoing maintenance obligations regardless of whether any Leased Property is
occupied or unoccupied. Lessee waives any right that it may now have or
hereafter acquire to (i) require Lessor, the Agent or any Lender to maintain,
repair, replace, alter, remove or rebuild all or any part of any Leased Property
or (ii) make repairs at the expense of Lessor, the Agent or any Lender pursuant
to any Applicable Law or other agreements or otherwise. NEITHER LESSOR, THE
AGENT NOR ANY LENDER SHALL BE LIABLE TO LESSEE OR TO ANY CONTRACTORS,
SUBCONTRACTORS, LABORERS, MATERIALMEN, SUPPLIERS OR VENDORS FOR SERVICES
PERFORMED OR MATERIAL PROVIDED ON OR IN CONNECTION WITH ANY LEASED PROPERTY OR
ANY PART THEREOF. Neither Lessor, the Agent nor any Lender shall be required to
maintain, alter, repair, rebuild or replace any Leased Property in any way.
Section Alterations. Lessee may, without the consent of Lessor, at
Lessee's own cost and expense, make Alterations which do not materially diminish
the Fair Market Sales Value, utility or useful life of any Leased Property.
Section Title to Alterations. Title to all Alterations shall without
further act vest in Lessor (subject to Lessee's right to remove trade fixtures,
personal property and equipment which do not constitute Alterations and which
were not acquired with funds advanced by Lessor or any Lender) and shall be
deemed to constitute a part of the Leased Properties and be subject to this
Lease.
XIII. ARTICLE
USE
Lessee may use each Leased Property or any part thereof for any lawful
purpose, and in a manner consistent with the standards applicable to properties
of a similar nature in the geographic area in which such Leased Property is
located, provided that such use does not materially adversely affect the Fair
Market Sales Value, utility, remaining useful life or residual value of such
Leased Property, and does not materially violate or conflict with, or constitute
or result in a material default under, any Applicable Law or any insurance
policy required hereunder. In the event Lessee's use substantially changes the
character of any Building in a manner or to an extent that, in Lessor's or the
Lenders' reasonable opinion, adversely affects the Fair Market Sales Value
and/or marketability of such Building, Lessee shall, immediately prior to the
termination or expiration of this Lease, at Lessor's request, restore such
Leased Property to its general character at the Completion Date (ordinary wear
and tear excepted). Lessee shall not commit or permit any waste of any Leased
Property or any material part thereof.
XV. ARTICLE
INSURANCE
1. At any time during which any part of any Building or any Alteration is under
construction and as to any part of any Building or any Alteration under
construction, Lessee shall maintain, or cause to be maintained, at its sole cost
and expense, as a part of its blanket policies or otherwise, "all risks"
non-reporting completed value form of builder's risk insurance.
2. During the Lease Term, Lessee shall maintain, at its sole cost and expense,
as a part of its blanket policies or otherwise, insurance against loss or damage
to any Leased Property by fire and other risks, including comprehensive boiler
and machinery coverage, on terms and in amounts no less favorable than insurance
covering other similar properties owned or leased by Lessee and that are in
accordance with normal industry practice, but in no event less than the
replacement cost of such Leased Property from time to time.
3. During the Lease Term, Lessee shall maintain, at its sole cost and expense,
commercial general liability insurance with respect to the Leased Properties, as
is ordinarily procured by Persons who own or operate similar properties in the
same geographic area. Such insurance shall be on terms and in amounts that are
no less favorable than insurance maintained by Lessee or its Affiliates with
respect to similar properties that it owns or leases and that are in accordance
with normal industry practice, but in no event less than $1,000,000 per
occurrence. Such insurance policies shall also provide that Lessee's insurance
shall be considered primary insurance. Nothing in this Article VIII shall
prohibit Lessor, the Agent or any Lender from carrying at its own expense other
insurance on or with respect to the Leased Properties, provided that any
insurance carried by Lessor, the Agent or any Lender shall not prevent Lessee
from carrying the insurance required hereby.
4. Each policy of insurance maintained by Lessee pursuant to clauses (a) and (b)
of this Article VIII shall provide that all insurance proceeds in respect of any
loss or occurrence shall be adjusted by Lessee, except if, and for so long as an
Event of Default exists, all losses shall be adjusted solely by, and all
insurance proceeds shall be paid solely to, the Agent (or Lessor if the Loans
have been fully paid) for application pursuant to this Lease.
5. On the Closing Date for each Leased Property, on the Completion Date and on
each anniversary of the Initial Closing Date, Lessee shall furnish Lessor with
certificates showing the insurance required under this Article VIII to be in
effect and naming Lessor, the Agent and the Lenders as additional insureds or
loss payee, as the case may be. Such certificates shall include a provision for
thirty (30) days' advance written notice by the insurer to Lessor and the Agent
in the event of cancellation or expiration or nonpayment of premium with respect
to such insurance, and shall include a customary breach of warranty clause.
6. Each policy of insurance maintained by Lessee pursuant to this Article VIII
shall (1) contain the waiver of any right of subrogation of the insurer against
Lessor, the Agent and the Lenders, and (2) provide that in respect of the
interests of Lessor, the Agent and the Lenders, such policies shall not be
invalidated by any fraud, action, inaction or misrepresentation of Lessee or any
other Person acting on behalf of Lessee.
7. All insurance policies carried in accordance with this Article VIII shall be
maintained with insurers rated at least A by A.M. Best & Company, and in all
cases the insurer shall be qualified to insure risks in the State where such
Leased Property is located.
XVII. ARTICLE
ASSIGNMENT AND SUBLEASING
Lessee may not assign any of its right, title or interest in, to or
under this Lease, except as set forth in the following sentence. Lessee may (i)
assign this Lease as it relates to all or any portion of any Leased Property to
any Affiliate of Lessee so long as Lessee's guaranty pursuant to the Guaranty
Agreement continues in full force and effect and (ii) sublease all or any
portion of any Leased Property, provided that (a) all obligations of Lessee
shall continue in full effect as obligations of a principal and not of a
guarantor or surety, as though no sublease had been made; (b) such sublease
shall be expressly subject and subordinate to this Lease, the Loan Agreement and
the other Operative Documents; and (c) each such sublease shall terminate on or
before the Lease Termination Date. Lessee shall give the Agent and Lessor
written notice of any such assignment or sublease.
Except pursuant to an Operative Document, this Lease shall not be
mortgaged or pledged by Lessee, nor shall Lessee mortgage or pledge any interest
in any Leased Property or any portion thereof. Any such mortgage or pledge shall
be void.
XIX. ARTICLE
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
Section Event of Loss. Any event (i) which would otherwise constitute a
Casualty during the Base Term, and (ii) which, in the good-faith judgment of
Lessee, renders repair and restoration of a Leased Property impractical or
uneconomical, and (iii) as to which Lessee, within sixty (60) days after the
occurrence of such event, delivers to Lessor an Officer's Certificate notifying
Lessor of such event and of such judgment, shall constitute an "Event of Loss".
In the case of any other event which constitutes a Casualty, Lessee shall
restore such Leased Property pursuant to Section 10.3. If an Event of Loss other
than an Event of Taking shall occur, Lessee shall pay to Lessor on the next
Payment Date following delivery of the Officer's Certificate pursuant to clause
(iii) above an amount equal to the related Leased Property Balance. Upon
Lessor's receipt of such Leased Property Balance on such date, Lessor shall
cause Lessor's interest in such Leased Property to be conveyed to Lessee in
accordance with and subject to the provisions of Section 14.5 hereof; upon
completion of such purchase, but not prior thereto, this Lease and all
obligations hereunder with respect to such Leased Property shall terminate,
except with respect to obligations and liabilities hereunder and under the other
Operative Documents, actual or contingent, that have arisen or relate to events
occurring on or prior to such date of purchase, or which are expressly stated
herein to survive termination of this Lease.
Upon the consummation of the purchase of any Leased Property pursuant
to this Section 10.1, any proceeds derived from insurance required to be
maintained by Lessee pursuant to this Lease for such Leased Property remaining
after payment of such purchase price, and all costs and expenses incurred by
Lessor or the Agent in connection with such Event of Loss, shall be paid over
to, or retained by, Lessee or as it may direct, and Lessor shall assign to
Lessee, without warranty, all of Lessor's rights to and interest in insurance
required to be maintained by Lessee pursuant to this Lease with respect to such
Leased Property.
Section Event of Taking. Any event (i) which constitutes a Condemnation
of all of, or substantially all of, a Leased Property, or (ii) (A) which would
otherwise constitute a Condemnation, (B) which, in the good-faith judgment of
Lessee, renders restoration and rebuilding of a Leased Property impossible,
impractical or uneconomical, and (C) as to which Lessee, within sixty (60) days
after the occurrence of such event, delivers to Lessor an Officer's Certificate
notifying Lessor of such event and of such judgment, shall constitute an "Event
of Taking". In the case of any other event which constitutes a Condemnation,
Lessee shall restore and rebuild such Leased Property pursuant to Section 10.4.
If an Event of Taking shall occur, Lessee shall pay to Lessor (1) on the next
Payment Date following the occurrence of such Event of Taking, in the case of an
Event of Taking described in clause (i) above, or (2) on the next Payment Date
following delivery of the Officer's Certificate pursuant to clause (ii) above,
in the case of an Event of Taking described in clause (ii) above, an amount
equal to the related Leased Property Balance. Upon Lessor's receipt of such
Leased Property Balance on such date, Lessor shall cause Lessor's interest in
such Leased Property to be conveyed to Lessee in accordance with and subject to
the provisions of Section 14.5 hereof (provided that such conveyance shall be
subject to all rights of the condemning authority); upon completion of such
purchase, but not prior thereto, this Lease and all obligations hereunder with
respect to such Leased Property shall terminate, except with respect to
obligations and liabilities hereunder and under the other Operative Documents,
actual or contingent, that have arisen or relate to events occurring on or prior
to such date of purchase, or which are expressly stated herein to survive
termination of this Lease.
Upon the consummation of the purchase of a Leased Property pursuant to
this Section 10.2, all Awards received by Lessor, after deducting any reasonable
costs incurred by Lessor in collecting such Awards, received or payable on
account of an Event of Taking with respect to such Leased Property during the
related Lease Term shall be paid to Lessee, and all rights of Lessor in Awards
related to such Leased Property not then received shall be assigned to Lessee by
Lessor.
Section Casualty. If a Casualty shall occur, Lessee shall rebuild and
restore the affected Leased Property, will complete the same prior to the Lease
Termination Date, and will cause the condition set forth in Section 3.5 (c) of
the Master Agreement to be fulfilled with respect to such restoration and
rebuilding prior to the Lease Termination Date, regardless of whether insurance
proceeds received as a result of such Casualty are sufficient for such purpose.
Section Condemnation. If a Condemnation shall occur, Lessee shall
rebuild and restore the affected Leased Property, will complete the same prior
to the Lease Termination Date, and will cause the condition set forth in Section
3.5 (c) of the Master Agreement to be fulfilled with respect to such restoration
and rebuilding prior to the Lease Termination Date, regardless of whether the
Awards received as a result of such Condemnation are sufficient for such
purpose.
Section Verification of Restoration and Rebuilding. In the event of
Casualty or Condemnation, to verify Lessee's compliance with the foregoing
Sections 10.3 and 10.4, Lessor, the Agent, the Lenders and their respective
authorized representatives may, upon five (5) Business Days' notice to Lessee,
make inspections of the affected Leased Property with respect to (i) the extent
of the Casualty or Condemnation and (ii) the restoration and rebuilding of the
related Building and the Land. All actual and reasonable out-of-pocket costs of
such inspections incurred by Lessor, the Agent or any Lender will be paid by
Lessee promptly after written request. No such inspection shall unreasonably
interfere with Lessee's operations or the operations of any other occupant of
such Leased Property. None of the inspecting parties shall have any duty to make
any such inspection or inquiry and none of the inspecting parties shall incur
any liability or obligation by reason of making or not making any such
inspection or inquiry. Section Application of Payments. All proceeds (except for
payments under insurance policies maintained other than pursuant to Article VIII
of this Lease) received at any time by Lessor, Lessee or the Agent from any
Governmental Authority or other Person with respect to any Condemnation or
Casualty to any Leased Property or any part thereof or with respect to an Event
of Loss or an Event of Taking, plus the amount of any payment that would have
been due from an insurer but for Lessee's self-insurance or deductibles ("Loss
Proceeds"), shall (except to the extent Section 10.9 applies) be applied as
follows:
1. In the event Lessee purchases such Leased Property
pursuant to Section 10.1 or Section 10.2, such Loss
Proceeds shall be applied as set forth in Section 10.1 or
Section 10.2, as the case may be;
2. In the event of a Casualty at such time when no Event
of Default has occurred and is continuing and Lessee is
obligated to repair and rebuild such Leased Property
pursuant to Section 10.3, Lessee may, in good faith and
subsequent to the date of such Casualty, certify to Lessor
and to the applicable insurer that no Event of Default has
occurred and is continuing, in which event the applicable
insurer shall pay the Loss Proceeds to Lessee;
3. In the event of a Condemnation at such time when no
Event of Default has occurred and is continuing and Lessee
is obligated to repair and rebuild such Leased Property
pursuant to Section 10.4, Lessor shall upon Lessee's
request assign to Lessee Lessor's interest in any
applicable Awards; and
4. As provided in Section 10.8, if such section is
applicable.
During any period of repair or rebuilding pursuant to this Article X,
this Lease will remain in full force and effect and Basic Rent shall continue to
accrue and be payable without abatement or reduction. Lessee shall maintain
records setting forth information relating to the receipt and application of
payments in accordance with this Section 10.6. Such records shall be kept on
file by Lessee at its offices and shall be made available to Lessor, the Lenders
and the Agent upon request.
a. Section Prosecution of Awards. If, during the continuance of any Event of
Default, any Condemnation shall occur, Lessee shall give to Lessor and the Agent
promptly, but in any event within thirty (30) days after the occurrence thereof,
written notice of such occurrence and the date thereof, generally describing the
nature and extent of such Condemnation. With respect to any Event of Taking or
any Condemnation, Lessee shall control the negotiations with the relevant
Governmental Authority as to any proceeding in respect of which Awards are
required, under Section 10.6, to be assigned or released to Lessee, unless an
Event of Default shall have occurred and be continuing, in which case the Agent
(or Lessor if the Loans have been fully paid) shall control such negotiations;
and Lessee hereby irrevocably assigns, transfers and sets over to Lessor all
rights of Lessee to any Award made during the continuance of an Event of Default
on account of any Event of Taking or any Condemnation and, if there will not be
separate Awards to Lessor and Lessee on account of such Event of Taking or
Condemnation, irrevocably authorizes and empowers the Agent (or Lessor if the
Loans have been fully paid) during the continuance of an Event of Default, with
full power of substitution, in the name of Lessee or otherwise (but without
limiting the obligations of Lessee under this Article X), to file and prosecute
what would otherwise be Lessee's claim for any such Award and to collect,
receipt for and retain the same; provided, however, that in any event Lessor and
the Agent may participate in such negotiations, and no settlement will be made
without the prior consent of the Agent (or Lessor if the Loans have been fully
paid), not to be unreasonably withheld.
5. Notwithstanding the foregoing, Lessee may prosecute, and Lessor shall have no
interest in, any claim with respect to Lessee's personal property and equipment
not financed by Lessor and Lessee's relocation expenses.
Section Application of Certain Payments Not Relating to an Event of
Taking. In case of a requisition for temporary use of all or a portion of any
Leased Property which is not an Event of Taking, this Lease shall remain in full
force and effect with respect to such Leased Property, without any abatement or
reduction of Basic Rent, and the Awards for such Leased Property shall, unless
an Event of Default has occurred and is continuing, be paid to Lessee.
Section Other Dispositions. Notwithstanding the foregoing provisions of
this Article X, so long as an Event of Default shall have occurred and be
continuing, any amount that would otherwise be payable to or for the account of,
or that would otherwise be retained by, Lessee pursuant to this Article X shall
be paid to the Agent (or Lessor if the Loans have been fully paid) as security
for the obligations of Lessee under this Lease and, at such time thereafter as
no Event of Default shall be continuing, such amount shall be paid promptly to
Lessee to the extent not previously applied by Lessor or the Agent in accordance
with the terms of this Lease or the other Operative Documents.
Section No Rent Abatement. Rent shall not abate hereunder by reason of
any Casualty, any Event of Loss, any Event of Taking or any Condemnation of any
Leased Property, and Lessee shall continue to perform and fulfill all of
Lessee's obligations, covenants and agreements hereunder notwithstanding such
Casualty, Event of Loss, Event of Taking or Condemnation until the Lease
Termination Date.
XXI. ARTICLE
INTEREST CONVEYED TO LESSEE
Lessor and Lessee intend that this Lease be treated, for accounting
purposes, as an operating lease. For tax and bankruptcy purposes, Lessee and
Lessor intend that the transaction represented by this Lease be treated as a
financing transaction; for such purposes, it is the intention of the parties
hereto (i) that this Lease be treated as a mortgage or deed of trust (whichever
is applicable in the jurisdictions in which the Leased Properties are located)
and security agreement, encumbering the Leased Property, and that Lessee, as
grantor, hereby grants to Lessor, as mortgagee or beneficiary and secured party,
or any successor thereto, a first and paramount Lien on each Leased Property,
(ii) that Lessor shall have, as a result of such determination, all of the
rights, powers and remedies of a mortgagee, deed of trust beneficiary or secured
party available under Applicable Law to take possession of and sell (whether by
foreclosure or otherwise) any Leased Property, (iii) that the effective date of
such mortgage, security deed or deed of trust shall be the effective date of
this Lease, (iv) that the recording of this Lease (or memorandum thereof) or a
Lease Supplement (or memorandum thereof) shall be deemed to be the recording of
such mortgage, security deed or deed of trust, and (v) that the obligations
secured by such mortgage, security deed or deed of trust shall include the
Funded Amounts and all Basic Rent and Supplemental Rent hereunder and all other
obligations of and amounts due from Lessee hereunder and under the Operative
Documents.
XXIII. ARTICLE
EVENTS OF DEFAULT
The following events shall constitute Events of Default (whether any
such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or any order, rule or regulation of any administrative or
governmental body):
1. Lessee shall fail to make any payment of Basic Rent when due, and such
failure shall continue for three (3) or more Business Days;
2. Lessee shall fail to make any payment of Supplemental Rent or any other
amount payable hereunder or under any of the other Operative Documents (other
than Basic Rent and other than as set forth in clause (c)), and such failure
shall continue for a period of ten (10) days;
3. Lessee shall fail to pay the Funded Amount or Lease Balance when due pursuant
to Sections 10.1, 10.2, 14.1 or 14.2, or Lessee shall fail to pay the Recourse
Deficiency Amount when required pursuant to Article XIV or Lessee shall fail to
make any payment when due under the Construction Agency Agreement;
4. Lessee shall fail to maintain insurance as required by Article VIII hereof,
and such failure shall continue until the earlier of (i) 15 days after written
notice thereof from Lessor and (ii) the day immediately preceding the date on
which any applicable insurance coverage would otherwise lapse or terminate;
5. the Lessee or any Subsidiary (whether as primary obligor or as guarantor or
other surety) shall fail to pay any principal of or premium or interest on any
Material Indebtedness that is outstanding, when and as the same shall become due
and payable (whether at scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument evidencing such
Material Indebtedness; or any other event shall occur or condition shall exist
under any agreement or instrument relating to such Material Indebtedness and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or permit the acceleration of, the maturity of such Material
Indebtedness; or any such Material Indebtedness shall be declared to be due and
payable; or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased, or any
offer to prepay, redeem, purchase or defease such Material Indebtedness shall be
required to be made, in each case prior to the stated maturity thereof; or
6. the Lessee or any Material Subsidiary shall (i) commence a voluntary case or
other proceeding or file any petition seeking liquidation, reorganization or
other relief under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
custodian, trustee, receiver, liquidator or other similar official of it or any
substantial part of its property, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition described
in clause (i) of this Section, (iii) apply for or consent to the appointment of
a custodian, trustee, receiver, liquidator or other similar official for the
Lessee or any such Material Subsidiary or for a substantial part of its assets,
(iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit
of creditors, or (vi) take any action for the purpose of effecting any of the
foregoing; or
7. an involuntary proceeding shall be commenced or an involuntary petition shall
be filed seeking (i) liquidation, reorganization or other relief in respect of
the Lessee or any Material Subsidiary or its debts, or any substantial part of
its assets, under any federal, state or foreign bankruptcy, insolvency or other
similar law now or hereafter in effect or (ii) the appointment of a custodian,
trustee, receiver, liquidator or other similar official for the Lessee or any
Material Subsidiary or for a substantial part of its assets, and in any such
case, such proceeding or petition shall remain undismissed for a period of 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
8. the Lessee or any Material Subsidiary shall become unable to pay, shall admi
in writing its
inability to pay, or shall fail to pay, its debts as they become due; or
9. an ERISA Event shall have occurred that, in the opinion of the Required
Lenders, when taken together with other ERISA Events that have occurred, could
reasonably be expected to result in liability to the Lessee and the Subsidiaries
in an aggregate amount exceeding $2,500,000; or
10. any judgment or order for the payment of money in excess of $2,500,000 in
the aggregate shall be rendered against the Lessee or any Subsidiary, and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be a period of 30 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
11. any nonmonetary judgment or order shall be rendered against the Lessee or
any Subsidiary that could reasonably be expected to have a Material Adverse
Effect, and there shall be a period of 30 consecutive days during which a stay
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
12. a Change in Control shall occur or exist; or
13. any provision of any Subsidiary Guaranty Agreement shall for any reason
cease to be valid and binding on, or enforceable against, any Subsidiary
Guarantor, or any Subsidiary Guarantor shall so state in writing, or any
Subsidiary Guarantor shall seek to terminate its Subsidiary Guaranty Agreement
(except to the extent that Tia's is automatically released from the Subsidiary
Guaranty Agreement pursuant to the terms thereof);
14. any representation or warranty by Lessee in any Operative Document or in an
certificate or
document delivered to Lessor, the Agent or any Lender pursuant to any Operative
Document shall have been
incorrect in any material respect when made;
15. Lessee shall repudiate or terminate the Guaranty Agreement, or the Guaranty
Agreement shall at any time cease to be in full force and effect or cease to be
the legal, valid and binding obligation of Lessee;
16. Lessee shall fail to observe or perform any covenant or agreement contained
in Section 5.1, 5.2, 5.3 (with respect to Lessee's existence), 5.7, 5.9 or
Section 5.10 through 5.26 of the Master Agreement;
17. Lessee shall fail in any material respect to timely, perform or observe any
covenant, condition or agreement (not included in any other clause of this
Article XII) to be performed or observed by it hereunder or under any other
Operative Document and such failure shall continue for a period of 30 days after
Lessee's receipt of written notice thereof from Lessor, the Agent or any Lender;
or
18. An event of default occurs under the Lease Agreement, dated as of May 30,
1997, between Lessor and Lessee, as amended or supplemented from time to time,
or under the Lease Agreement, dated as of June 3, 1999, between Lessor and
Lessee, as amended or supplemented from time to time.
XXV. ARTICLE
ENFORCEMENT
Section Remedies. Upon the occurrence and during the continuance of any
Event of Default, Lessor may do one or more of the following as Lessor in its
sole discretion shall determine, without limiting any other right or remedy
Lessor may have on account of such Event of Default (including, without
limitation, the obligation of Lessee to purchase the Leased Properties as set
forth in Section 14.3): 1. Lessor may, by notice to Lessee, rescind or terminate
this Lease as of the date specified in such notice; however, (A) no reletting,
reentry or taking of possession of any Leased Property by Lessor will be
construed as an election on Lessor's part to terminate this Lease unless a
written notice of such intention is given to Lessee, (B) notwithstanding any
reletting, reentry or taking of possession, Lessor may at any time thereafter
elect to terminate this Lease for a continuing Event of Default, and (C) no act
or thing done by Lessor or any of its agents, representatives or employees and
no agreement accepting a surrender of any Leased Property shall be valid unless
the same be made in writing and executed by Lessor;
2. Lessor may (i) demand that Lessee, and Lessee shall upon the written demand
of Lessor, return the Leased Properties promptly to Lessor in the manner and
condition required by, and otherwise in accordance with all of the provisions
of, Articles VI and XIV hereof as if the Leased Properties were being returned
at the end of the Lease Term, and Lessor shall not be liable for the
reimbursement of Lessee for any costs and expenses incurred by Lessee in
connection therewith and (ii) without prejudice to any other remedy which Lessor
may have for possession of the Leased Properties, and to the extent and in the
manner permitted by Applicable Law, enter upon any Leased Property and take
immediate possession of (to the exclusion of Lessee) any Leased Property or any
part thereof and expel or remove Lessee and any other person who may be
occupying such Leased Property, by summary proceedings or otherwise, all without
liability to Lessee for or by reason of such entry or taking of possession,
whether for the restoration of damage to property caused by such taking or
otherwise and, in addition to Lessor's other damages, Lessee shall be
responsible for the actual and reasonable costs and expenses of reletting,
including brokers' fees and the reasonable costs of any alterations or repairs
made by Lessor;
3. Lessor may (i) sell all or any part of any Leased Property at public or
private sale, as Lessor may determine, free and clear of any rights of Lessee
and without any duty to account to Lessee with respect to such action or
inaction or any proceeds with respect thereto (except to the extent required by
clause (ii) below if Lessor shall elect to exercise its rights thereunder) in
which event Lessee's obligation to pay Basic Rent hereunder for periods
commencing after the date of such sale shall be terminated or proportionately
reduced, as the case may be; and (ii) if Lessor shall so elect, demand that
Lessee pay to Lessor, and Lessee shall pay to Lessor, on the date of such sale,
as liquidated damages for loss of a bargain and not as a penalty (the parties
agreeing that Lessor's actual damages would be difficult to predict, but the
aforementioned liquidated damages represent a reasonable approximation of such
amount) (in lieu of Basic Rent due for periods commencing on or after the
Payment Date coinciding with such date of sale (or, if the sale date is not a
Payment Date, the Payment Date next preceding the date of such sale)), an amount
equal to (a) the excess, if any, of (1) the sum of (A) all Rent due and unpaid
to and including such Payment Date and (B) the Lease Balance, computed as of
such date, over (2) the net proceeds of such sale (that is, after deducting all
costs and expenses incurred by Lessor, the Agent or any Lender incident to such
conveyance (including, without limitation, all costs, expenses, fees, premiums
and taxes described in Section 14.5(b))); plus (b) interest at the Overdue Rate
on the foregoing amount from such Payment Date until the date of payment;
4. Lessor may, at its option, not terminate this Lease, and continue to collect
all Basic Rent, Supplemental Rent, and all other amounts (including, without
limitation, the Funded Amount) due Lessor (together with all costs of
collection) and enforce Lessee's obligations under this Lease as and when the
same become due, or are to be performed, and at the option of Lessor, upon any
abandonment of any Leased Property by Lessee or re-entry of same by Lessor,
Lessor may, in its sole and absolute discretion, elect not to terminate this
Lease with respect thereto and may make such reasonable alterations and
necessary repairs, at Lessee's expense, in order to relet such Leased Property,
and relet such Leased Property or any part thereof for such term or terms (which
may be for a term extending beyond the term of this Lease) and at such rental or
rentals and upon such other terms and conditions as Lessor in its reasonable
discretion may deem advisable; and upon each such reletting all rentals actually
received by Lessor from such reletting shall be applied to Lessee's obligations
hereunder in such order, proportion and priority as Lessor may elect in Lessor's
sole and absolute discretion; it being agreed that under no circumstances shall
Lessee benefit from its default from any increase in market rents. If such
rentals received from such reletting during any Rent Period are less than the
Rent to be paid during that Rent Period by Lessee hereunder, Lessee shall pay
any deficiency, as calculated by Lessor, to Lessor on the Payment Date for such
Rent Period;
5. Lessor may, whether or not Lessor shall have exercised or shall thereafter at
any time exercise any of its rights under paragraph (b), (c) or (d) of this
Article XIII with respect to such Leased Property, demand, by written notice to
Lessee specifying a date (the "Final Rent Payment Date") not earlier than 30
days after the date of such notice, that Lessee purchase, on the Final Rent
Payment Date, any or all of the Leased Properties in accordance with the
provisions of Sections 14.2, 14.4 and 14.5; provided, however, that (1) such
purchase shall occur on the date set forth in such notice, notwithstanding the
provision in Section 14.2 calling for such purchase to occur on the Lease
Termination Date; and (2) Lessor's obligations under Section 14.5(a) shall be
limited to delivery of a special or limited warranty deed and quitclaim bill of
sale of such Leased Property, without recourse or warranty, but free and clear
of Lessor Liens;
6. Lessor may exercise any other right or remedy that may be available to it
under Applicable Law, or proceed by appropriate court action (legal or
equitable) to enforce the terms hereof or to recover damages for the breach
hereof. Separate suits may be brought to collect any such damages for any Rent
Period(s), and such suits shall not in any manner prejudice Lessor's right to
collect any such damages for any subsequent Rent Period(s), or Lessor may defer
any such suit until after the expiration of the Lease Term, in which event such
suit shall be deemed not to have accrued until the expiration of the Lease Term;
or
7. Lessor may retain and apply against Lessor's damages all sums which Lessor
would, absent such Event of Default, be required to pay to, or turn over to,
Lessee pursuant to the terms of this Lease.
Section Remedies Cumulative; No Waiver; Consents. To the extent
permitted by, and subject to the mandatory requirements of, Applicable Law, each
and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be cumulative and shall be in addition to every
other right, power and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
Lessor, and the exercise or the beginning of the exercise of any power or remedy
shall not be construed to be a waiver of the right to exercise at the same time
or thereafter any right, power or remedy. No delay or omission by Lessor in the
exercise of any right, power or remedy or in the pursuit of any remedy shall
impair any such right, power or remedy or be construed to be a waiver of any
default on the part of Lessee or to be an acquiescence therein. Lessor's consent
to any request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Event of Default shall
in any way be, or be construed to be, a waiver of any future or subsequent
Potential Event of Default or Event of Default. To the extent permitted by
Applicable Law, Lessee hereby waives any rights now or hereafter conferred by
statute or otherwise that may require Lessor to sell, lease or otherwise use any
Leased Property or part thereof in mitigation of Lessor's damages upon the
occurrence of an Event of Default or that may otherwise limit or modify any of
Lessor's rights or remedies under this Article XIII.
Section Certain Limitations. Notwithstanding the foregoing in this
Article XIII, if Lessor declares an Event of Default based on an event described
in paragraph (e) of Article XII that arose solely by virtue of an event that
permits the acceleration of Material Indebtedness, which event is the occurrence
of a "material adverse effect" that is subjectively determined, then Lessee
shall either, at its option (i) purchase all of the Leased Properties for the
Lease Balance on a date not more than ten (10) Business Days after such
declaration by Lessor or (ii) pay to Lessor the sum of all accrued and unpaid
Rent, plus the Recourse Deficiency Amount on the date that is ten (10) Business
Days after such declaration and either, as directed in writing by Lessor and (A)
remarket the Leased Properties as if Lessee had exercised the Remarketing Option
pursuant to Section 14.6 (without giving effect to paragraph (a) thereof) or (B)
return the Leased Properties to Lessor pursuant to Section 14.8.
XXVII. ARTICLE
SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL
Section Lessee's Option to Purchase. (a) Subject to the terms,
conditions and provisions set forth in this Article XIV, Lessee shall have the
option (the "Purchase Option"), to be exercised as set forth below, to purchase
from Lessor, Lessor's interest in all of the Leased Properties for the purchase
price referred to in Section 14.4; provided that, except as set forth in
paragraph (b) below, such option must be exercised with respect to all, but not
less than all, of the Leased Properties. Such option must be exercised by
written notice to Lessor not later than twelve months prior to the Lease
Termination Date which notice shall be irrevocable; such notice shall specify
the date that such purchase shall take place, which date shall be a Payment Date
occurring not less than thirty (30) days after such notice or the Lease
Termination Date (whichever is earlier). If the Purchase Option is exercised
pursuant to the foregoing, then, subject to the provisions set forth in this
Article XIV, on the applicable purchase date or the Lease Termination Date, as
the case may be, Lessor shall convey to Lessee, without recourse or warranty
(other than as to the absence of Lessor Liens) and Lessee shall purchase from
Lessor, Lessor's interest in the Leased Properties.
(b) Subject to the terms, conditions and provisions set forth in this
Article XIV, Lessee shall have the option (the "Partial Purchase Option"), to be
exercised as set forth below, to purchase from Lessor Lessor's interest in any
Leased Property for the purchase price referred to in Section 14.4; provided
that such option may be exercised only if, after giving effect thereto, there
are at least 15 Leased Properties subject to this Lease, unless it is exercised
with respect to all Leased Properties as set forth in paragraph (a) above. Such
option must be exercised by written notice to Lessor not later than twelve
months prior to the Lease Termination Date, which notice shall be irrevocable;
such notice shall specify the Leased Property to be purchased and the date that
such purchase shall take place, which date shall be a Payment Date occurring not
less than thirty (30) days after such notice or the Lease Termination Date
(whichever is earlier). If a Partial Purchase Option is exercised pursuant to
the foregoing, subject to the provisions set forth in this Article XIV, on the
applicable purchase date or the Lease Termination Date, as the case may be,
Lessor shall convey to Lessee, without recourse or warranty (other than as to
the absence of Lessor Liens) and Lessee shall purchase from Lessor, Lessor's
interest in the Leased Property that is the subject of such Partial Purchase
Option.
Section Conveyance to Lessee. Unless (a) Lessee shall have properly
exercised the Purchase Option and purchased the Leased Properties pursuant to
Section 14.1(a) hereof, or (b) Lessee shall have properly exercised the
Remarketing Option and shall have fulfilled all of the conditions of Section
14.6 hereof, then, subject to the terms, conditions and provisions set forth in
this Article XIV, Lessee shall purchase from Lessor, and Lessor shall convey to
Lessee, on the Lease Termination Date all of Lessor's interest in the Leased
Properties. Lessee may designate, in a notice given to Lessor not less than ten
(10) Business Days prior to the closing of such purchase (time being of the
essence), the transferee to whom the conveyance shall be made (if other than to
Lessee), in which case such conveyance shall (subject to the terms and
conditions set forth herein) be made to such designee; provided, however, that
such designation of a transferee shall not cause Lessee to be released, fully or
partially, from any of its obligations under this Lease.
Section Acceleration of Purchase Obligation. Lessee shall be obligated
to purchase Lessor's interest in the Leased Properties immediately,
automatically and without notice upon the occurrence of any Event of Default
specified in clause (f) or (g) of Article XII, for the purchase price set forth
in Section 14.4. Upon the occurrence and during the continuance of any other
Event of Default, Lessee shall be obligated to purchase Lessor's interest in the
Leased Properties for the purchase price set forth in Section 14.4 upon notice
of such obligation from Lessor.
Section Determination of Purchase Price. Upon the purchase by Lessee of
Lessor's interest in the Leased Properties pursuant to Section 14.1(a), 14.2 or
14.3, the aggregate purchase price for all of the Leased Properties shall be an
amount equal to the Lease Balance as of the closing date for such purchase, plus
any amount due pursuant to Section 7.5(f) of the Master Agreement as a result of
such purchase. Upon the purchase by Lessee of Lessor's interest in a Leased
Property upon the exercise of a Partial Purchase Option, the purchase price for
such Leased Property shall be an amount equal to the Leased Property Balance for
such Leased Property as of the closing date for such purchase, plus any amount
due pursuant to Section 7.5(f) of the Master Agreement as a result of such
purchase.
1. Section Purchase Procedure. If Lessee shall purchase Lessor's interest in a
Leased Property pursuant to any provision of this Lease, (i) Lessee shall accept
from Lessor and Lessor shall convey such Leased Property by a duly executed and
acknowledged special or limited warranty deed and quitclaim bill of sale of such
Leased Property in recordable form, (ii) upon the date fixed for any purchase of
Lessor's interest in Leased Property hereunder, Lessee shall pay to the order of
the Agent (or Lessor if the Loans have been paid in full) the Lease Balance or
Leased Property Balance, as applicable, plus any amount due pursuant to Section
7.5(f) of the Master Agreement as a result of such purchase by wire transfer of
immediately available funds, and (iii) Lessor will execute and deliver to Lessee
such other documents, including releases, termination agreements and termination
statements, as may be legally required or as may be reasonably requested by
Lessee in order to effect such conveyance, free and clear of Lessor Liens and
the Liens of the Operative Documents, as they related to such Leased Property.
2. Lessee shall, at Lessee's sole cost and expense, obtain all required
governmental and regulatory approval and consents and in connection therewith
shall make such filings as required by Applicable Law; in the event that Lessor
is required by Applicable Law to take any action in connection with such
purchase and sale, Lessee shall pay all costs incurred by Lessor in connection
therewith. In addition, all costs incident to such conveyance, including,
without limitation, Lessee's attorneys' fees, Lessor's attorneys' fees,
commissions, Lessee's and Lessor's escrow fees, recording fees, title insurance
premiums and all applicable documentary transfer or other transfer taxes and
other taxes required to be paid in order to record the transfer documents that
might be imposed by reason of such conveyance and the delivery of such deed
shall be borne entirely by and paid by Lessee.
3. Upon expiration or termination of this Lease resulting in conveyance of
Lessor's interest in the title to the Leased Properties to Lessee, there shall
be no apportionment of rents (including, without limitation, water rents and
sewer rents), taxes, insurance, utility charges or other charges payable with
respect to the Leased Properties, all of such rents, taxes, insurance, utility
or other charges due and payable with respect to the Leased Properties prior to
termination being payable by Lessee hereunder and all due after such time being
payable by Lessee as the then owner of the Leased Properties.
Section Option to Remarket Subject to the fulfillment of each of the
conditions set forth in this Section 14.6, Lessee shall have the option to
market all of, but not less than all of, the Leased Properties for Lessor (the
"Remarketing Option").
Lessee's effective exercise and consummation of the Remarketing Option
shall be subject to the due and timely fulfillment of each of the following
provisions, the failure of any of which, unless waived in writing by Lessor and
the Lenders, shall render the Remarketing Option and Lessee's exercise thereof
null and void, in which event, Lessee shall be obligated to perform its
obligations under Section 14.2.
1. Not later than twelve months prior to the Lease
Termination Date, Lessee shall give to Lessor and the
Agent written notice of Lessee's exercise of the
Remarketing Option, which exercise shall be irrevocable.
2. Not later than ten (10) Business Days prior to the
Lease Termination Date, Lessee shall deliver to Lessor and
the Agent an environmental assessment of each Leased
Property dated not later than forty-five (45) days prior
to the Lease Termination Date. Such environmental
assessment shall be prepared by an environmental
consultant selected by the Required Funding Parties, shall
be in form, detail and substance reasonably satisfactory
to the Required Funding Parties, and shall otherwise
indicate the environmental condition of each Leased
Property to be the same as described in the related
Environmental Audit.
3. On the date of Lessee's notice to Lessor and the Agent
of Lessee's exercise of the Remarketing Option each of the
Construction Conditions shall have been timely satisfied
and no Event of Default or Potential Event of Default
shall exist, and thereafter, no Event of Default or
Potential Event of Default shall exist under this Lease.
4. Lessee shall have completed all Alterations,
restoration and rebuilding of the Leased Properties
pursuant to Sections 6.1, 6.2, 10.3 and 10.4 (as the case
may be) and shall have fulfilled all of the conditions and
requirements in connection therewith pursuant to said
Sections, in each case by the date on which Lessor and the
Agent receive Lessee's notice of Lessee's exercise of the
Remarketing Option (time being of the essence), regardless
of whether the same shall be within Lessee's control.
5. Lessee shall promptly provide any maintenance records
relating to each Leased Property to Lessor, the Agent and
any potential purchaser upon request, and shall otherwise
do all things necessary to deliver possession of such
Leased Property to the potential purchaser. Lessee shall
allow Lessor, the Agent and any potential purchaser access
to any Leased Property for the purpose of inspecting the
same.
6. On the Lease Termination Date, Lessee shall surrender the
Leased Properties in accordance
with Section 14.8 hereof.
------------
7. In connection with any such sale of the Leased
Properties, Lessee will provide to the purchaser all
customary "seller's" indemnities, representations and
warranties regarding title, absence of Liens (except
Lessor Liens) and the condition of the Leased Properties,
including, without limitation, an environmental indemnity.
Lessee shall fulfill all of the requirements set forth in
clause (b) of Section 14.5, and such requirements are
incorporated herein by reference. As to Lessor, any such
sale shall be made on an "as is, with all faults" basis
without representation or warranty by Lessor, other than
the absence of Lessor Liens.
8. Lessee shall pay to the Agent on the Lease Termination
Date (or to such other Person as Agent shall notify Lessee
in writing, or in the case of Supplemental Rent, to the
Person entitled thereto) an amount equal to the Recourse
Deficiency Amount, plus all accrued and unpaid Basic Rent
and Supplemental Rent, and all other amounts hereunder
which have accrued prior to or as of such date, in the
type of funds specified in Section 3.3 hereof.
If Lessee has exercised the Remarketing Option, the following additional
provisions shall apply: During the period commencing on the date twelve months
prior to the scheduled expiration of the Lease Term, Lessee shall, as
nonexclusive agent for Lessor, use commercially reasonable efforts to sell
Lessor's interest in the Leased Properties and will attempt to obtain the
highest purchase price therefor. Lessee shall submit all bids to Lessor and the
Agent and Lessor and the Agent will have the right to review the same and the
right to submit any one or more bids. All bids shall be on an all-cash basis. In
no event shall such bidder be Lessee or any Subsidiary or Affiliate of Lessee.
The written offer must specify the Lease Termination Date as the closing date.
If, and only if, the selling price (net of closing costs and prorations, as
reasonably estimated by the Agent) is less than the difference between the Lease
Balance at such time minus the Recourse Deficiency Amount, then Lessor or the
Agent may, in its sole and absolute discretion, by notice to Lessee, reject such
offer to purchase, in which event the parties will proceed according to the
provisions of Section 14.7 hereof. If neither Lessor nor the Agent rejects such
purchase offer as provided above, the closing of such purchase of the Leased
Properties by such purchaser shall occur on the Lease Termination Date,
contemporaneously with Lessee's surrender of the Leased Properties in accordance
with Section 14.8 hereof, and the net proceeds of the sale (i.e., after
deduction for any reasonable marketing, closing or other costs, prorations or
commissions) shall be paid directly to the Agent to be distributed in accordance
with Section 3 of the Loan Agreement; provided, however, that if the sum of the
gross proceeds from such sale, plus the Recourse Deficiency Amount paid by
Lessee on the Lease Termination Date pursuant to Section 14.6(i), minus any and
all costs and expenses (including broker fees, appraisal costs, legal fees,
closing costs, prorations, commissions and transfer taxes) incurred in
connection with the marketing of the Leased Properties or the sale thereof
exceeds the Lease Balance as of such date, then the excess shall be paid to
Lessee on the Lease Termination Date. If there are no offers to purchase, the
provisions of Section 14.7 shall apply. Lessee shall have no right, power or
authority to bind Lessor in connection with any proposed sale of the Leased
Properties.
Section Rejection of Sale. Notwithstanding anything contained herein to
the contrary, if Lessor or the Agent rejects the purchase offer for the Leased
Properties as provided in Section 14.6 or there are no offers to purchase the
Leased Properties, then (a) Lessee shall pay to the Agent all accrued and unpaid
Rent, plus the Recourse Deficiency Amount pursuant to Section 14.6(i), and (b)
Lessor shall retain title to the Leased Properties.
Section Return of Leased Property. If Lessor retains title to any
Leased Property pursuant to Section 14.7 hereof, then Lessee shall, on the Lease
Termination Date, and at its own expense, return possession of such Leased
Property to Lessor for retention by Lessor or, if Lessee properly exercises the
Remarketing Option and fulfills all of the conditions of Section 14.6 hereof,
there is a purchase offer with respect to the Leased Properties and neither
Lessor nor the Agent rejects such purchase offer pursuant to Section 14.6, then
Lessee shall, on such Lease Termination Date, and at its own cost, transfer
possession of the Leased Property to the independent purchaser thereof, in each
case by surrendering the same into the possession of Lessor or such purchaser,
as the case may be, free and clear of all Liens other than Lessor Liens, in as
good condition as it was on the Completion Date (as modified by Alterations
permitted by this Lease), ordinary wear and tear excepted, and in compliance in
all material respects with Applicable Law. Lessee shall, on and within a
reasonable time before and after the Lease Termination Date, cooperate with
Lessor and the independent purchaser of such Leased Property in order to
facilitate the ownership and operation by such purchaser of such Leased Property
after the Lease Termination Date, which cooperation shall include the following,
all of which Lessee shall do on or before the Lease Termination Date or as soon
thereafter as is reasonably practicable: providing all books and records
regarding the maintenance and ownership of such Leased Property and all
know-how, data and technical information relating thereto, providing a copy of
the Plans and Specifications, granting or assigning all licenses (to the extent
assignable) necessary for the operation and maintenance of such Leased Property,
and cooperating in seeking and obtaining all necessary Governmental Action.
Lessee shall have also paid the cost of all Alterations commenced prior to the
Lease Termination Date. The obligations of Lessee under this Article XIV shall
survive the expiration or termination of this Lease.
Section Renewal. Subject to the conditions set forth herein, Lessee
may, by written notice to Lessor and the Agent given not later than twelve
months and not earlier than sixteen months, prior to the Lease Termination Date,
renew this Lease, for up to five years commencing on the date following the
Lease Termination Date, provided that in no event shall the term of this Lease
exceed fifteen (15) years. No later than the date that is 45 days after the date
the request to renew has been delivered to each of Lessor and the Agent, the
Agent will notify Lessee whether or not Lessor and the Lenders consent to such
renewal request (which consent, in the case of Lessor and the Lenders, may be
granted or denied in their sole discretion, and may be conditioned on such
conditions precedent as may be specified by Lessor and the Lenders). If the
Agent fails to respond within such time frame, such failure shall be deemed to
be a rejection of such request. If the Agent notifies Lessee of Lessor's and the
Lenders' consent to such renewal, such renewal shall be effective.
XXIX. ARTICLE
LESSEE'S EQUIPMENT
After any repossession of any Leased Property (whether or not this
Lease has been terminated), Lessee, at its expense and so long as such removal
of such trade fixture, personal property or equipment shall not result in a
violation of Applicable Law, shall, within a reasonable time after such
repossession or within sixty (60) days after Lessee's receipt of Lessor's
written request (whichever shall first occur), remove all of Lessee's trade
fixtures, personal property and equipment from such Leased Property (to the
extent that the same can be readily removed from such Leased Property without
causing material damage to such Leased Property); provided, however, that Lessee
shall not remove any such trade fixtures, personal property or equipment that
(i) has been financed by Lessor under the Operative Documents or otherwise
constituting Leased Property (or that constitutes a replacement of such
property) or (ii) with respect to which Lessor notifies Lessee that it is
exercising the purchase option with respect thereto, which purchase option
Lessee hereby grants to Lessor (in which case, Lessor shall pay to Lessee the
fair market value of such trade fixture, personal property or equipment on such
date of repossession (as determined by mutual agreement of Lessor and Lessee or,
if no mutual agreement is promptly achieved, by an appraiser reasonably
acceptable to Lessor and Lessee) and Lessee shall execute and deliver a bill of
sale therefor to Lessor), provided that the purchase option set forth in this
clause (ii) shall not apply to Lessee's inventory or to any personal property of
Lessee not used or useful in connection with the Leased Property. Any of
Lessee's trade fixtures, personal property and equipment not so removed by
Lessee within such period shall be considered abandoned by Lessee, and title
thereto shall without further act vest in Lessor, and may be appropriated, sold,
destroyed or otherwise disposed of by Lessor without notice to Lessee and
without obligation to account therefor and Lessee will pay Lessor, upon written
demand, all reasonable costs and expenses incurred by Lessor in removing,
storing or disposing of the same and all costs and expenses incurred by Lessor
to repair any damage to such Leased Property caused by such removal. Lessee will
immediately repair at its expense all damage to such Leased Property caused by
any such removal (unless such removal is effected by Lessor, in which event
Lessee shall pay all reasonable costs and expenses incurred by Lessor for such
repairs). Lessor shall have no liability in exercising Lessor's rights under
this Article XV except as set forth in clause (ii) of the first sentence hereof,
nor shall Lessor be responsible for any loss of or damage to Lessee's personal
property and equipment.
XXXI. ARTICLE
RIGHT TO PERFORM FOR LESSEE
If Lessee shall fail to perform or comply with any of its agreements
contained herein, Lessor, upon notice to Lessee, may perform or comply with such
agreement, and Lessor shall not thereby be deemed to have waived any default
caused by such failure, and the amount of such payment and the amount of the
expenses of Lessor (including actual and reasonable attorneys' fees and
expenses) incurred in connection with such payment or the performance of or
compliance with such agreement, as the case may be, shall be deemed Supplemental
Rent, payable by Lessee to Lessor within thirty (30) days after written demand
therefor.
XXXIII. ARTICLE
MISCELLANEOUS
Section Reports. To the extent required under Applicable Law and to the
extent it is reasonably practical for Lessee to do so, Lessee shall prepare and
file in timely fashion, or, where such filing is required to be made by Lessor
or it is otherwise not reasonably practical for Lessee to make such filing,
Lessee shall prepare and deliver to Lessor (with a copy to the Agent) within a
reasonable time prior to the date for filing and Lessor shall file, any material
reports with respect to the condition or operation of such Leased Property that
shall be required to be filed with any Governmental Authority.
Section Binding Effect; Successors and Assigns; Survival. The terms and
provisions of this Lease, and the respective rights and obligations hereunder of
Lessor and Lessee, shall be binding upon their respective successors, legal
representatives and assigns (including, in the case of Lessor, any Person to
whom Lessor may transfer any Leased Property or any interest therein in
accordance with the provisions of the Operative Documents), and inure to the
benefit of their respective permitted successors and assigns, and the rights
hereunder of the Agent and the Lenders shall inure (subject to such conditions
as are contained herein) to the benefit of their respective permitted successors
and assigns. Lessee hereby acknowledges that Lessor has assigned all of its
right, title and interest to, in and under this Lease to the Agent and the
Lenders, and that all of Lessor's rights hereunder may be exercised by the
Agent.
Section Quiet Enjoyment. Lessor covenants that it will not interfere in
Lessee's or any of its permitted sublessees' quiet enjoyment of the Leased
Properties in accordance with this Lease during the Lease Term, so long as no
Event of Default has occurred and is continuing. Such right of quiet enjoyment
is independent of, and shall not affect, Lessor's rights otherwise to initiate
legal action to enforce the obligations of Lessee under this Lease.
Section Notices. Unless otherwise specified herein, all notices,
offers, acceptances, rejections, consents, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
shall be deemed to have been given as set forth in Section 8.2 of the Master
Agreement. All such notices, offers, acceptances, rejections, consents,
requests, demands or other communications shall be addressed as follows or to
such other address as any of the parties hereto may designate by written notice:
If to Lessor: Atlantic Financial Group, Ltd.
1000 Ballpark Way, Suite 304
Arlington, Texas 76011
Attn: Stephen Brookshire
If to Lessee: Ruby Tuesday, Inc.
150 West Church Avenue
Maryville, Tennessee 37801
Attn: J. Russell Mothershed
Ruby Tuesday, Inc.
4721 Morrison Drive
Mobile, Alabama 36609-3350
Attn: J. Russell Mothershed
with a copy to: General Counsel at same address
If to Agent: SunTrust Bank
303 Peachtree Street, 2nd Floor
MC1921
Atlanta, Georgia 30308
Attn: Center 120/Corporate
Banking South
If to a Lender, to the address provided in the Master
Agreement.
Section Severability. Any provision of this Lease that shall be
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability. To the extent permitted by Applicable Law, Lessee hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section Amendment; Complete Agreements. Neither this Lease nor any of
the terms hereof may be terminated, amended, supplemented, waived or modified
orally, except by an instrument in writing signed by Lessor and Lessee in
accordance with the provisions of Section 8.4 of the Master Agreement. This
Lease, together with the other Operative Documents, is intended by the parties
as a final expression of their lease agreement and as a complete and exclusive
statement of the terms thereof, all negotiations, considerations and
representations between the parties having been incorporated herein and therein.
No course of prior dealings between the parties or their officers, employees,
agents or Affiliates shall be relevant or admissible to supplement, explain, or
vary any of the terms of this Lease or any other Operative Document. Acceptance
of, or acquiescence in, a course of performance rendered under this or any prior
agreement between the parties or their Affiliates shall not be relevant or
admissible to determine the meaning of any of the terms of this Lease or any
other Operative Document. No representations, undertakings, or agreements have
been made or relied upon in the making of this Lease other than those
specifically set forth in the Operative Documents.
Section Construction. This Lease shall not be construed more strictly
against any one party, it being recognized that both of the parties hereto have
contributed substantially and materially to the preparation and negotiation of
this Lease.
Section Headings. The Table of Contents and headings of the various
Articles and Sections of this Lease are for convenience of reference only and
shall not modify, define or limit any of the terms or provisions hereof.
Section Counterparts. This Lease may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
Section GOVERNING LAW. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO
MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATES HEREUNDER, AND THE
EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE
LOCATED.
Section Discharge of Lessee's Obligations by its Affiliates. Lessor
agrees that performance of any of Lessee's obligations hereunder by one or more
of Lessee's Affiliates or one or more of Lessee's sublessees of the Leased
Properties or any part thereof shall constitute performance by Lessee of such
obligations to the same extent and with the same effect hereunder as if such
obligations were performed by Lessee, but no such performance shall excuse
Lessee from any obligation not performed by it or on its behalf under the
Operative Documents.
Section Liability of Lessor Limited. Except as otherwise expressly
provided below in this Section 17.12, it is expressly understood and agreed by
and between Lessee, Lessor and their respective successors and assigns that
nothing herein contained shall be construed as creating any liability of Lessor
or any of its Affiliates or any of their respective officers, directors,
employees or agents, individually or personally, to perform any covenant, either
express or implied, contained herein, all such liability (other than that
resulting from Lessor's gross negligence or willful misconduct, except to the
extent imputed to Lessor by virtue of Lessee's action or failure to act), if
any, being expressly waived by Lessee and by each and every Person now or
hereafter claiming by, through or under Lessee, and that, so far as Lessor or
any of its Affiliates or any of their respective officers, directors, employees
or agents, individually or personally, is concerned, Lessee and any Person
claiming by, through or under Lessee shall look solely to the right, title and
interest of Lessor in the Leased Properties and any proceeds from Lessor's sale
or encumbrance thereof (provided, however, that Lessee shall not be entitled to
any double recovery) for the performance of any obligation under this Lease and
under the Operative Documents and the satisfaction of any liability arising
therefrom (other than that resulting from Lessor's gross negligence or willful
misconduct, except to the extent imputed to Lessor by virtue of Lessee's action
or failure to act).
Section Estoppel Certificates. Each party hereto agrees that at any
time and from time to time during the Lease Term, it will promptly, but in no
event later than thirty (30) days after request by the other party hereto,
execute, acknowledge and deliver to such other party or to any prospective
purchaser (if such prospective purchaser has signed a commitment or letter of
intent to purchase any Leased Property or any part thereof or any Note),
assignee or mortgagee or third party designated by such other party, a
certificate stating (a) that this Lease is unmodified and in force and effect
(or if there have been modifications, that this Lease is in force and effect as
modified, and identifying the modification agreements); (b) the date to which
Basic Rent has been paid; (c) whether or not there is any existing default by
Lessee in the payment of Basic Rent or any other sum of money hereunder, and
whether or not there is any other existing default by either party with respect
to which a notice of default has been served, and, if there is any such default,
specifying the nature and extent thereof; (d) whether or not, to the knowledge
of the signer after due inquiry and investigation, there are any setoffs,
defenses or counterclaims against enforcement of the obligations to be performed
hereunder existing in favor of the party executing such certificate and (e)
other items that may be reasonably requested; provided that no such certificate
may be requested unless the requesting party has a good faith reason for such
request.
Section No Joint Venture. Any intention to create a joint venture,
partnership or other fiduciary relationship between Lessor and Lessee is hereby
expressly disclaimed.
Section No Accord and Satisfaction. The acceptance by Lessor of any
sums from Lessee (whether as Basic Rent or otherwise) in amounts which are less
than the amounts due and payable by Lessee hereunder is not intended, nor shall
be construed, to constitute an accord and satisfaction of any dispute between
Lessor and Lessee regarding sums due and payable by Lessee hereunder, unless
Lessor specifically deems it as such in writing.
Section No Merger. In no event shall the leasehold interests, estates
or rights of Lessee hereunder, or of the holder of any Notes secured by a
security interest in this Lease, merge with any interests, estates or rights of
Lessor in or to the Leased Properties, it being understood that such leasehold
interests, estates and rights of Lessee hereunder, and of the holder of any
Notes secured by a security interest in this Lease, shall be deemed to be
separate and distinct from Lessor's interests, estates and rights in or to the
Leased Properties, notwithstanding that any such interests, estates or rights
shall at any time or times be held by or vested in the same person, corporation
or other entity.
Section Survival. The obligations of Lessee to be performed under this
Lease prior to the Lease Termination Date and the obligations of Lessee pursuant
to Article III, Articles X, XI, XIII, Articles XIV, XV, and XVI, and Sections
17.10 and 17.12 shall survive the expiration or termination of this Lease. The
extension of any applicable statute of limitations by Lessor, Lessee, the Agent
or any Indemnitee shall not affect such survival.
Section Chattel Paper. To the extent that this Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code in any
applicable jurisdiction), no security interest in this Lease may be created
through the transfer or possession of any counterpart other than the sole
original counterpart, which shall be identified as the original counterpart by
the receipt of the Agent.
Section Time of Essence. Time is of the essence of this Lease.
---------------
Section Recordation of Lease. Lessee will, at its expense, cause this
Lease, or the applicable Lease Supplement or a memorandum of lease in form and
substance reasonably satisfactory to Lessor and Lessee (if permitted by
Applicable Law) to be recorded in the proper office or offices in the States and
the municipalities in which such parcel of Land is located.
Section Investment of Security Funds. Any amounts not payable to Lessee
pursuant to any provision of Article VIII, X or XIV or this Section 17.21 solely
because an Event of Default shall have occurred and be continuing shall be held
by the Agent (or Lessor if the Loans have been fully paid) as security for the
obligations of Lessee under this Lease and the Master Agreement. At such time as
no Event of Default shall be continuing, such amounts, net of any amounts
previously applied to Lessee's obligations hereunder or under the Master
Agreement, shall be paid to Lessee. Any such amounts which are held by the Agent
(or Lessor if the Loans have been fully paid) pending payment to Lessee shall
until paid to Lessee, as provided hereunder or, as long as the Loan Agreement is
in effect, until applied against Lessee's obligations herein and under the
Master Agreement and distributed as provided in the Loan Agreement or herein
(after the Loan Agreement is no longer in effect) in connection with any
exercise of remedies hereunder, be invested by the Agent or Lessor, as the case
may be as directed from time to time in writing by Lessee (provided, however, if
an Event of Default has occurred and is continuing it will be directed by the
Agent or, if the Loans have been fully paid, Lessor) and at the expense and risk
of Lessee, in Permitted Investments. Any gain (including interest received)
realized as the result of any such investment (net of any fees, commissions and
other expenses, if any, incurred in connection with such investment) shall be
applied in the same manner as the principal invested. In no event shall Lessor
or the Agent be responsible for any losses as the result of any such investment.
Section Ground Leases. Lessee will, at its expense, timely perform all
of the obligations of Lessor, in its capacity as ground lessee, under each
Ground Lease and, if requested by Lessor shall provide satisfactory evidence to
Lessor of such performance.
Section Land and Building. If the cost of the Land related to any
Leased Property exceeds 25% of the projected Leased Property Balance for such
Leased Property, the Land and the Building related to such Leased Property shall
be leased under separate Lease Supplements. If any Building and the Land on
which such Building is located are subject to separate Lease Supplements, at any
time that Lessee exercises an option to purchase such Building or such Land, or
to renew this Lease with respect to such Building or such Land, or is obligated
to purchase such Building or such Land as a result of an Event of Loss, an Event
of Taking or an Event of Default, such purchase or renewal shall be made
simultaneously with respect to all of such Building and such Land.
[Signature page follows]
<PAGE>
IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered and attested by their respective
officers thereunto duly authorized as of the day and year first above written.
RUBY TUESDAY, INC.
as Lessee
By____________________________
Name:
Title:
<PAGE>
ATLANTIC FINANCIAL GROUP, LTD.,
as Lessor
By: Atlantic Financial Managers,
Inc., its General Partner
By____________________________
Name:
Title:
<PAGE>
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease was acknowledged before me, the undersigned Notary
Public, in the County of ______________, ____ ____, this _____ day of
__________, _______________, by _____________________, as ____________________
of Atlantic Financial Group, Ltd., on behalf of such partnership.
[Notarial Seal] ___________________________
Notary Public
My commission expires: _____________
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease was acknowledged before me, the undersigned Notary
Public, in the County of ______________, ___ ____, this _____ day of __________,
__________, by ___________, as _____________, of Ruby Tuesday, Inc., a Georgia
corporation, on behalf of the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires: ______________
<PAGE>
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date thereof.
SUNTRUST BANK, as the Agent
By____________________________
Name:
Title:
<PAGE>
Recording requested by EXHIBIT A TO
and when recorded mail to: THE LEASE
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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LEASE SUPPLEMENT NO. __ AND MEMORANDUM OF LEASE
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of [
----------------
], between ATLANTIC FINANCIAL GROUP, LTD., as the lessor (the "Lessor"), and
------
RUBY TUESDAY, INC., a Georgia corporation, as lessee (the "Lessee").
------
WHEREAS Lessor is the owner of the Land described on Schedule I hereto
and wishes to lease the Land together with any Building and other improvements
thereon or which thereafter may be constructed thereon pursuant to the Lease to
Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions; Interpretation. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Lease Agreement, dated
as of October 11, 2000, between Lessee and Lessor; and the rules of
interpretation set forth in Appendix A to the Lease shall apply to this Lease
Supplement.
SECTION 2. The Properties. Attached hereto as Schedule I is the
description of certain Land (the "Subject Property"). Effective upon the
execution and delivery of this Lease Supplement by Lessor and Lessee, such Land,
together with any Building and other improvements thereon or which thereafter
may be constructed thereon pursuant to the Lease shall be subject to the terms
and provisions of the Lease and Lessor hereby grants, conveys, transfers and
assigns to Lessee those interests, rights, titles, estates, powers and
privileges provided for in the Lease with respect to the Subject Property.
SECTION 3. Amendments to Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Lease Supplement by Lessor and
Lessee, the following terms and provisions shall apply to the Lease with respect
to the Subject Property:
[Insert Applicable Sections per Local Law
as contemplated by the Master Agreement]
SECTION 4. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Lease are hereby ratified and confirmed
and remain in full force and effect. The terms of the Lease (as amended by this
Lease Supplement) are by this reference incorporated herein and made a part
hereof.
SECTION 5. Original Lease Supplement. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA, BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES OF SUCH STATE, EXCEPT AS TO
MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE HEREUNDER, AND THE
EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH SUCH ESTATE IS
LOCATED.
SECTION 7. Counterpart Execution. This Lease Supplement may be
---------------------
executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one
and the same instrument.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.,
as the Lessor
By: Atlantic Financial Managers,
Inc., its General Partner
By____________________________
Name:
Title:
RUBY TUESDAY, INC., as the Lessee
By____________________________
Name:
Title:
<PAGE>
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ______________, ____ ____, this
_____ day of __________, _______________, by _____________________, as
____________________ of Atlantic Financial Group, Ltd., on behalf of such
partnership.
[Notarial Seal] ___________________________
Notary Public
My commission expires: _____________
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ______________, ___ ____, this _____
day of __________, __________, by ___________, as _____________, of Ruby
Tuesday, Inc., a Georgia corporation, on behalf of the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires: ______________
<PAGE>
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as of the date hereof.
SUNTRUST BANK, as the Agent
By___________________________
Name:
Title:
<PAGE>
GUARANTY
from
RUBY TUESDAY, INC.
Dated as of October 11, 2000
<PAGE>
|| TABLE OF CONTENTS
Page
SECTION 1. ..................................................Guaranty 2
SECTION 2. ................................................Bankruptcy 3
SECTION 3. ..........................................Right of Set-Off 3
SECTION 4. .......................................Continuing Guaranty 3
SECTION 5. .............................................Reinstatement 3
SECTION 6. ...........................................Certain Actions 4
SECTION 7. ...............................................Application 4
SECTION 8. ....................................................Waiver 5
SECTION 9. ................................................Assignment 5
SECTION 10. ............................................Miscellaneous 5
<PAGE>
GUARANTY
THIS GUARANTY, dated as of October 11, 2000 (as amended from time to time,
this "Guaranty"), is made by Ruby Tuesday, Inc., a Georgia corporation ("Ruby
Tuesday" or the "Guarantor").
W I T N E S S E T H:
-------------------
WHEREAS, Ruby Tuesday, as Lessee and Guarantor, Atlantic Financial Group,
Ltd., as Lessor, the financial institutions party thereto, as Lenders, and
SunTrust Bank, as Agent, have entered into that certain Master Agreement, dated
as of October 11, 2000 (as it may be modified, amended or restated from time to
time as and to the extent permitted thereby, the "Master Agreement"; and, unless
otherwise defined herein, terms which are defined or defined by reference in the
Master Agreement (including Appendix A thereto) shall have the same meanings
when used herein as such terms have therein); and
WHEREAS, it is a condition precedent to the Funding Parties consummating the
transactions to be consummated on each Closing Date that the Guarantor execute
and deliver this Guaranty; and
WHEREAS, it is in the best interests of the Guarantor that the transactions
contemplated by the Master Agreement be consummated on each Closing Date; and
WHEREAS, this Guaranty, and the execution, delivery and performance hereof,
have been duly authorized by all necessary corporate action of the Guarantor;
and
WHEREAS, this Guaranty is offered by the Guarantor as an inducement to the
Funding Parties to consummate the transactions contemplated in the Master
Agreement, which transactions, if consummated, will be of benefit to the
Guarantor;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the Guarantor, the Guarantor hereby agrees as follows:
I.
<PAGE>
SECTION Guaranty. The Guarantor hereby unconditionally guarantees the
full and prompt payment when due, whether by acceleration or otherwise, and at
all times thereafter, and the full and prompt performance, of all of the
Liabilities (as hereinafter defined), including interest and earnings on any
such Liabilities whether accruing before or after any bankruptcy or insolvency
case or proceeding involving Guarantor, or any other Person and, if interest or
earnings on any portion of such obligations ceases to accrue by operation of law
by reason of the commencement of such case or proceeding, including such
interest and earnings as would have accrued on any such portion of such
obligations if such case or proceeding had not commenced, and further agrees to
pay all reasonable expenses (including reasonable attorneys' fees and legal
expenses) actually paid or incurred by each of the Funding Parties in
endeavoring to collect the Liabilities, or any part thereof, and in enforcing
this Guaranty. The term "Liabilities", as used herein, shall mean all of the
following, in each case howsoever created, arising or evidenced, whether direct
or indirect, joint or several, absolute or contingent, or now or hereafter
existing, or due or to become due: (i) all amounts payable by the Lessee under
the Lease (including, without limitation, Basic Rent, Supplemental Rent and
Recourse Deficiency Amounts), the Master Agreement (including the unused fee),
the Construction Agency Agreement or any other Operative Document, and (ii) all
principal of the Notes and interest accrued thereon, the Lessor's Invested
Amount and accrued Yield thereon and all additional amounts and other sums at
any time due and owing, and required to be paid, to the Funding Parties under
the terms of the Master Agreement, the Loan Agreement, the Assignment of Leases
and Rents, the Mortgages, the Notes or any other Operative Document; provided,
however, that, notwithstanding anything to the contrary contained herein, the
Guarantor will not be obligated under any circumstances to pay under this
Guaranty, and the term "Liabilities" shall not include, any amounts greater than
that which the Lessee would have had to pay, under the Lease, the Master
Agreement, the Construction Agency Agreement and the other Operative Documents
assuming that such documents were enforced in accordance with their terms (and
without giving effect to any discharge or limitation thereon resulting or
arising by reason of the bankruptcy or insolvency of the Lessee), plus all
reasonable costs actually incurred of enforcing this Guaranty; and provided,
further that with respect to indemnities that arise pursuant to Section 7.1 of
the Master Agreement with respect to any Construction Land Interest during the
Construction Term therefor, only the Lessor may make a claim under this
Guaranty.
By way of extension and not in limitation of any of its other
obligations hereunder, but subject to the immediately preceding sentence, the
Guarantor stipulates and agrees that in the event any foreclosure proceedings
are commenced and result in the entering of a foreclosure judgment, any such
foreclosure judgment, to the extent related to the Liabilities, shall be treated
as part of the Liabilities, and the Guarantor unconditionally guarantees the
full and prompt payment of such judgment.
SECTION Bankruptcy. The Guarantor agrees that, in the event of the
dissolution, bankruptcy or insolvency of the Guarantor, or the inability or
failure of the Guarantor generally to pay debts as they become due, or an
assignment by the Guarantor for the benefit of creditors, or the commencement of
any case or proceeding in respect of the Guarantor under any bankruptcy,
insolvency or similar laws, which event occurs at a time when any of the
Liabilities are not then be due and payable, the Guarantor will pay to the
Funding Parties forthwith the full amount which would be payable hereunder by
the Guarantor if all Liabilities were then due and payable.
SECTION Right of Set-Off. To secure all obligations of the Guarantor
hereunder, each Funding Party shall have a right to set-off, without demand or
notice of any kind, at any time and from time to time when any amount shall be
due and payable by the Guarantor hereunder against any and all balances,
credits, deposits, accounts or moneys of or in the Guarantor's name now or
hereafter, for any reason or purpose whatsoever, in the possession or control
of, or in transit to, any Funding Party or any agent or bailee for any Funding
Party, and apply any such amounts toward the payment of the Liabilities then due
in such order as in accordance with the Operative Documents. Each Funding Party
promptly shall notify the Guarantor of the exercise by such Funding Party of any
setoff; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
SECTION Continuing Guaranty. This Guaranty shall in all respects be a
continuing, absolute and unconditional guaranty of prompt and, subject to the
limitations contained herein, complete payment and performance (and not merely
of collection), and shall remain in full force and effect (notwithstanding,
without limitation, the dissolution of the Guarantor) until the termination of
the Commitments and the full and final payment of all of the Liabilities. The
Guarantor shall pay all amounts due hereunder without counterclaim, set-off,
deduction or abatement.
SECTION Reinstatement. The Guarantor further agrees that, if at any
time all or any part of any payment theretofore applied to any of the
Liabilities is or must be rescinded or returned for any reason whatsoever
(including, without limitation, the insolvency, bankruptcy or reorganization of
the Guarantor), such Liabilities shall, for the purposes of this Guaranty, to
the extent that such payment is or must be rescinded or returned, be deemed to
have continued in existence, notwithstanding such application, and this Guaranty
shall continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application had not been made.
SECTION Certain Actions. The Funding Parties may, from time to time at
their discretion and, except as expressly provided for under the Operative
Documents, without notice to the Guarantor, take any or all of the following
actions: (a) retain or obtain (i) a security interest in the Lessee's interests
in the Lease and (ii) a lien or a security interest hereafter granted by any
Person upon or in any property, in each case to secure any of the Liabilities or
any obligation hereunder; (b) retain or obtain the primary or secondary
obligation of any obligor or obligors, in addition to the Guarantor, with
respect to any of the Liabilities; (c) extend or renew for one or more periods
(regardless of whether longer than the original period), or release or
compromise any obligation of the Guarantor hereunder or any obligation of any
nature of any other obligor (including, without limitation, the Lessor) with
respect to any of the Liabilities; (d) release or fail to perfect its Lien upon
or security interest in, or impair, surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Liabilities or any obligation hereunder, or extend or renew for one or more
periods (regardless of whether longer than the original period) or release or
compromise any obligations of any nature of any obligor with respect to any such
property; and (e) resort to the Guarantor for payment of any of the Liabilities,
regardless of whether the Agent or any other Person shall have resorted to any
property securing any of the Liabilities or any obligation hereunder or shall
have proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Liabilities (all of the actions referred to in this clause
(e) being hereby expressly waived by the Guarantor to the extent permitted by
law).
SECTION Application. Any amounts received by any Funding Party from
whatever source on account of the Liabilities shall be applied by it toward the
payment of such of the Liabilities, and in such order of application, as is set
forth in Section 3 of the Loan Agreement.
SECTION Waiver. Subject in each event to the notice, if any, otherwise
expressly required under the Operative Documents, the Guarantor hereby expressly
waives: (a) notice of the acceptance of this Guaranty; (b) notice of the
existence or creation or non-payment of all or any of the Liabilities; (c)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever; and (d) except as provided to the contrary in the Operative
Documents, all diligence in collection or protection of or realization upon the
Liabilities or any thereof, any obligation hereunder, or any security for or
guaranty of any of the foregoing.
SECTION Assignment. Subject to Section 6 of the Master Agreement, each
Funding Party may, from time to time, at its sole discretion and without notice
to the Guarantor, assign or transfer any or all of its portion of the
Liabilities or any interest therein; and, notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Liabilities
shall be and remain Liabilities for the purposes of this Guaranty, and each and
every such immediate and successive assignee or transferee of any of the
Liabilities or of any interest therein shall, to the extent of such assignee's
or transferee's interest in the Liabilities, be entitled to the benefits of this
Guaranty to the same extent as if such assignee or transferee were such Funding
Party.
SECTION Miscellaneous. No delay in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise of any
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy; nor shall any modification or waiver of any of the
provisions of this Guaranty be binding upon any Funding Party except as
expressly set forth in a writing duly signed and delivered on its behalf. No
action permitted hereunder shall in any way affect or impair any Funding Party's
rights or the Guarantor's obligations under this Guaranty. For the purposes of
this Guaranty, Liabilities shall include all of the obligations described in the
definition thereof, notwithstanding any right or power of the Lessee or the
Lessor or anyone else to assert any claim or defense (other than final payment)
as to the invalidity or unenforceability of any such obligation, and no such
claim or defense shall affect or impair the obligations of the Guarantor
hereunder. The Guarantor's obligations under this Guaranty shall be absolute and
unconditional irrespective of any circumstance whatsoever which might constitute
a legal or equitable discharge or defense of the Guarantor. The Guarantor hereby
acknowledges that there are no conditions to the effectiveness of this Guaranty
which have not been satisfied as of the date hereof.
This Guaranty shall be binding upon the Guarantor and upon the
Guarantor's successors and permitted assigns; and all references herein to the
Guarantor shall be deemed to include any successor or successors, whether
immediate or remote, to such Person; provided that the Guarantor shall not
assign, other than by operation of law, its obligations hereunder without the
prior written consent of the Funding Parties.
Wherever possible each provision of this Guaranty shall be interpreted
in such manner as to be effective and valid under Applicable Law, but if any
provision of this Guaranty shall be prohibited by or invalid thereunder, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
The Guarantor: (a) submits for itself and its property in any legal
action or proceeding relating to this Guaranty, or for recognition and
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of Georgia sitting in Fulton County,
Georgia, the courts of the United States of America for the Northern District of
Georgia, and appellate courts from any thereof; (b) consents that any such
action or proceedings may be brought to such courts, and waives any objection
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same; (c) agrees that
service of process in any such action or proceeding may be effected by
delivering a copy thereof to it at its address set forth below or at such other
address of which the other parties to the Master Agreement shall have been
notified pursuant to Section 8.2 of the Master Agreement; and (d) agrees that
nothing herein shall affect the right to effect service of process in any other
manner permitted by law or shall limit the right of the Funding Parties to sue
in any other jurisdiction.
All notices, demands, declarations, consents, directions, approvals,
instructions, requests and other communications required or permitted by this
Guaranty shall be in writing and shall be deemed to have been duly given when
addressed to the appropriate Person and delivered in the manner specified in
Section 8.2 of the Master Agreement.
THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES. THE
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY TRANSACTION
CONTEMPLATED HEREBY.
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
RUBY TUESDAY, INC.
By:
Name Printed:
Title:
<PAGE>
LOAN AGREEMENT
Dated as of October 11, 2000
among
ATLANTIC FINANCIAL GROUP, LTD.
as Lessor and Borrower,
the financial institutions party hereto,
as Lenders
and
SUNTRUST BANK,
as Agent
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 ..................................DEFINITIONS; INTERPRETATION 1
SECTION 2 AMOUNT AND TERMS OF COMMITMENTS;PAYMENT AND PREPAYMENT OF LOANS..1
SECTION 2.1.....................................................Commitment 1
SECTION 2.2..........................................................Notes 1
SECTION 2.3..................................Scheduled Principal Repayment 2
SECTION 2.4.......................................................Interest 2
SECTION 2.5.......................Allocation of Loans to Leased Properties 3
SECTION 2.6.....................................................Prepayment 3
SECTION 3 RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN PAYMENTS
........................IN RESPECT OF LEASE AND LEASED PROPERTY..3
SECTION 3.1..................Distribution and Application of Rent Payments..3
SECTION 3.2...............Distribution and Application of Purchase Payment 3
SECTION 3.3 Distribution and Application to Funding Party Balances of Lessee
Payment of Recourse Deficiency Amount Upon Exercise
of Remarketing Option..4
SECTION 3.4 Distribution and Application to Funding Party Balance of
...................................Remarketing Proceeds of Leased Property..4
SECTION 3.5 Distribution and Application of Payments Received
When an Event of Default Exists or Has Ceased to Exist
............................................Following Rejection of a Lease..5
SECTION 3.6.................................Distribution of Other Payments 6
SECTION 3.7..................................Timing of Agent Distributions 6
SECTION 4 THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE AND GUARANTY..6
SECTION 4.1.............................................Covenant of Lessor 6
SECTION 4.2 Lessor Obligations Nonrecourse; Payment from Certain Lease and
Guaranty Obligations and Certain Proceeds of Leased Property Only.7
SECTION 4.3..................Exercise of Remedies Under Lease and Guaranty 7
SECTION 4.4............................................Indemnity by Lessor 8
SECTION 5 ...............................LOAN EVENTS OF DEFAULT; REMEDIES 8
SECTION 5.1.........................................Loan Events of Default 8
SECTION 5.2.......................................................Remedies 9
SECTION 6 .....................................................THE AGENT 10
SECTION 6.1...................................................Appointment 10
SECTION 6.2..........................................Delegation of Duties 11
SECTION 6.3........................................Exculpatory Provisions 11
SECTION 6.4.............................................Reliance by Agent 11
SECTION 6.5.............................................Notice of Default 11
SECTION 6.6.......................Non-Reliance on Agent and Other Lenders 12
SECTION 6.7...............................................Indemnification 12
SECTION 6.8..............................Agent in Its Individual Capacity 13
SECTION 6.9...............................................Successor Agent 13
SECTION 7 .................................................MISCELLANEOUS 13
SECTION 7.1........................................Amendments and Waivers 13
SECTION 7.2.......................................................Notices 13
SECTION 7.3................................No Waiver; Cumulative Remedies 14
SECTION 7.4........................................Successors and Assigns 14
SECTION 7.5..................................................Counterparts 14
SECTION 7.6.................................................GOVERNING LAW 14
SECTION 7.7.........................Survival and Termination of Agreement 14
SECTION 7.8..............................................Entire Agreement 14
SECTION 7.9..................................................Severability 14
APPENDIX A Definitions and Interpretation
EXHIBITS
EXHIBIT A-1 Form of A Note
EXHIBIT A-2 Form of B Note
<PAGE>
THIS LOAN AGREEMENT (as it may be amended or modified from time to time
in accordance with the provisions hereof, this "Loan Agreement") dated as of
October 11, 2000 is among ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership, as Lessor and Borrower (the "Lessor"); the financial institutions
which may from time to time become party hereto as lenders (the "Lenders") and
SUNTRUST BANK, a Georgia banking corporation, as agent for the Lenders (in such
capacity, the "Agent").
PRELIMINARY STATEMENT
In accordance with the terms and provisions of the Master Agreement,
the Lease, this Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring the Leased Properties and leasing the Leased Properties
to the Lessee, (ii) the Lessee, as Construction Agent for the Lessor, wishes to
construct Buildings on the Land for the Lessor and, when completed, to lease the
Buildings from the Lessor as part of the Leased Property under the Lease, (iii)
the Lessee wishes to obtain, and the Lessor is willing to provide, funding for
the acquisition of the Land and the construction of the Buildings, (iv) the
Lessor wishes to obtain, and the Lenders are willing to provide, financing of a
portion of the funding for the acquisition of the Land and the construction of
the Buildings, and (v) the Lessee is willing to provide its Guaranty Agreement
to the Funding Parties.
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
I. SECTION DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Loan Agreement.
II. SECTION AMOUNT AND TERMS OF COMMITMENTS; REPAYMENT AND PREPAYMENT OF LOANS
1. SECTION Commitment. Subject to the terms and conditions hereof and of the
Master Agreement, each Lender agrees to make term loans to the Lessor ("Loans")
from time to time during the period from and including the Initial Closing Date
through the Funding Termination Date, on each Closing Date and on each
subsequent Funding Date, in the amounts required under Section 2.2 of the Master
Agreement. Each such Loan shall consist of an A Loan in the amount of such
Lender's pro rata share of the A Percentage of the aggregate amount to be funded
by the Funding Parties on such date and a B Loan in the amount of such Lender's
pro rata share of the B Percentage of such the aggregate amount to be funded by
the Funding Parties on such date.
B. SECTION Notes. The A Loans made by each Lender to the Lessor shall be
evidenced by a note of the Lessor (an "A Note"), substantially in the form of
Exhibit A-1 with appropriate insertions, and the B Loans made by each Lender to
the Lessor shall be evidenced by a note of the Lessor (a "B Note") substantially
in the form of Exhibit A-2 with appropriate insertions, each duly executed by
the Lessor and payable to the order of the Agent, for the benefit of the
Lenders, and in a principal amount equal to the A Percentage of the aggregate
Commitments and the B Percentage of the aggregate Commitments, respectively (or,
if less, the aggregate unpaid principal amount of all A Loans or B Loans, as the
case may be, made by the Lenders to the Lessor). The Notes shall be dated the
Initial Closing Date and delivered to the Agent in accordance with Section 3.2
of the Master Agreement. The Agent is hereby authorized to record the date and
amount of each Loan made by the Lenders to the Lessor on the Notes, but the
failure by the Agent to so record such Loan shall not affect or impair any
obligations with respect thereto. Each Note shall (i) be stated to mature no
later than the final Lease Termination Date and (ii) bear interest on the unpaid
principal amount thereof from time to time outstanding at the applicable
interest rate per annum determined as provided in, and payable as specified in,
Section 2.4. Upon the occurrence of an Event of Default under clauses (f) or (g)
of Article XII of the Lease, or upon Acceleration as described in Section 4.3(b)
hereof, each Note shall automatically become due and payable in full.
C. SECTION Scheduled Principal Repayment. On the Lease Termination Date, the
Lessor shall pay the aggregate unpaid principal amount of all Loans as of
such date.
1. SECTION Interest. Each Loan related to a LIBOR Advance shall bear interest
during each Rent Period at a rate equal to the sum of (i) the Adjusted LIBO Rate
for such Rent Period, computed using the actual number of days elapsed and a 360
day year, plus (ii) the Applicable Margin per annum; each Loan related to a Base
Rate Advance shall bear interest at a rate equal to the Base Rate, computed
using the actual number of days elapsed and a 360 day year.
2. If all or a portion of the principal amount of or interest on the Loans shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, without limiting the rights of the
Lenders under Section 5, bear interest at the Overdue Rate, in each case from
the date of nonpayment until paid in full (as well after as before judgment).
3. Interest accruing on each Loan with respect to any Leased Property during the
Construction Term of such Leased Property shall, subject to the limitations set
forth in Section 2.3(c) of the Master Agreement, be added to the outstanding
principal amount of such Loan from time to time. Following the date each Loan is
made (or in the case of Loans with respect to a Construction Land Interest, the
Construction Term Expiration Date), interest on such Loan shall be payable in
arrears on each Payment Date with respect thereto.
4. Any change in the interest rate on the Loans resulting from a change in the
Base Rate shall become effective as of the opening of business on the day on
which such Base Rate changes as provided in the definition thereof.
D. SECTION Allocation of Loans to Leased Properties. Pursuant to each Funding
Request, each Loan shall be allocated to the Leased Property, the cost of
acquisition or construction of which the proceeds of such Loan are used to pay.
For purposes of the Operative Documents, the "related Loans" with respect to any
Leased Property or Loans "related to" any Leased Property shall mean those Loans
allocated to such Leased Property as set forth in the foregoing sentence.
E. SECTION Prepayment. Except in conjunction with a payment by the Lessee of the
Lease Balance or a Leased Property Balance pursuant to the terms of the Lease or
the Leased Property Balance or Construction Failure Payment pursuant to the
Construction Agency Agreement, the Lessor shall have no right to prepay the
Loans.
III. SECTION RECEIPT, DISTRIBUTION AND APPLICATION OF CERTAIN PAYMENTS IN
RESPECT OF LEASE AND LEASED PROPERTY
A. SECTION Distribution and Application of Rent Payments.
---------------------------------------------
1. Basic Rent. Each payment of Basic Rent with respect to any Leased Property
(and any payment of interest on overdue installments of Basic Rent) received by
the Agent shall be distributed first, pro rata to the Lenders to be applied to
the amounts of accrued and unpaid interest (including overdue interest) on the
Loans and second, to the Lessor to be applied to accrued and unpaid Yield
(including overdue Yield) on the Lessor's Invested Amounts related to such
Leased Property.
2. Supplemental Rent. Each payment of Supplemental Rent
received by the Agent shall be paid to or upon the
order of the Person owed the same in accordance with the Operative Documents.
B. SECTION Distribution and Application of Purchase Payment.
With respect to any Leased Property, the payment by the
Lessee of:
(a) the purchase price for a consummated sale of such Leased Property
received by the Agent in connection with the Lessee's exercise of the Purchase
Option or Partial Purchase Option under Section 14.1(a) or (b) of the Lease, or
the Lessee's exercise of its option to purchase such Leased Property under
Section 5.3 of the Construction Agency Agreement, or
(b) the purchase price paid as a result of the Lessee's compliance with
its obligation to purchase the Leased Property in accordance with Section 14.2
or 14.3 of the Lease, or
(c) a Leased Property Balance for a Leased Property in accordance with
Section 10.1 or Section 10.2 of the Lease,
shall be distributed by Agent as promptly as possible first, to the Lenders pro
rata in accordance with, and for application to, their respective Funding Party
Balances in respect of such Leased Property and second, to the Lessor for
application to its Funding Party Balance in respect of such Leased Property.
C. SECTION Distribution and Application to Funding Party Balances of Lessee
Payment of Recourse Deficiency Amount Upon Exercise of Remarketing Option. The
payment by the Lessee of the Recourse Deficiency Amount to the Agent on the
Lease Termination Date in accordance with Section 14.6 or Section 14.7 of the
Lease upon the Lessee's exercise of the Remarketing Option, shall be distributed
by the Agent to the Lenders, pro rata, for application to the accrued and unpaid
interest on, and the outstanding principal of, the A Loans. With respect to any
Leased Property, the payment by the Lessee of the Construction Failure Payment
with respect thereto pursuant to the Construction Agency Agreement shall be
distributed by the Agent first, to the Lenders, pro rata, for application to the
accrued and unpaid interest on, and the outstanding principal of, the A Loans in
respect of such Leased Property, second, to the Lenders, pro rata, for
application to the accrued and unpaid interest on, and outstanding principal of,
the B Loans related to such Leased Property and third, to the Lessor for
application to the accrued and unpaid Yield on, and outstanding Lessor Invested
Amount related to such Leased Property.
D. SECTION Distribution and Application to Funding Party Balance
of Remarketing Proceeds of Leased Property.
1. Any payments received by the Agent as proceeds from the sale of the Leased
Properties sold pursuant to the Lessee's exercise of the Remarketing Option
pursuant to Section 14.6 of the Lease or Lessor's sale of the Leased Properties,
shall be distributed by the Agent as promptly as possible (it being understood
that any such payment received by the Agent on a timely basis and in accordance
with the provisions of the Lease shall be distributed on the date received in
the funds so received) in the following order of priority:
first, to the Lenders pro rata for application to their remaining
Funding Party Balances in respect of all the Leased Properties, an amount equal
to their Funding Party Balances in respect of all the Leased Properties;
second, to the Lessor for application to its Funding Party Balance in
respect of all the Leased Properties; and
third, (i) if sold by the Lessee pursuant to Section 14.6 of the Lease,
the excess, if any, to the Lessee, and (ii) otherwise, the excess, if any, to
the Lessor.
2. Any payments received by the Agent as proceeds from the sale of any Leased
Property after a return to the Lessor pursuant to the Construction Agency
Agreement shall be distributed by the Lessor as promptly as possible (it being
understood that any such payment received by the Agent on a timely basis and in
accordance with the provisions of the Lease shall be distributed on the date
received in the funds so received) in the following order of priority:
first, to the Lenders pro rata for application to their remaining
Funding Party Balances in respect of such Leased Property (including both that
portion of the A Loans and that portion of the B Loans allocated to such Leased
Property), an amount equal to such Funding Party Balances in respect of such
Leased Property;
second, to Lessor for application to its Funding Party Balance in
respect of such Leased Property; and
third, the excess to Lessor.
E. SECTION Distribution and Application of Payments Received
When an Event of Default Exists or Has Ceased to Exist
Following Rejection of a Lease.
1. Proceeds of Leased Property. Any payments received by the
Lessor or the Agent when an Event of Default exists (or
has ceased to exist by reason of a rejection of the Lease in a proceeding with
respect to the Lessee described in Article XII(f) or (g) of the Lease), as
(i) proceeds from the sale of any or all of the Leased Property sold
pursuant to the exercise of the Lessor's remedies pursuant to Article XIII of
the Lease, or
(ii) proceeds of any amounts from any insurer or any Governmental
Authority in connection with an Event of Loss or Event of Taking
shall if received by the Lessor be paid to the Agent as promptly as possible,
and shall be distributed or applied by the Agent in the following order of
priority prior to the Release Date:
first, to the Agent for any amounts expended by it in connection with
any Leased Property or the Operative Documents and not
previously reimbursed to it;
second, to the Lenders pro rata for application to their Funding Party
Balances in respect of all the Leased Properties (first to accrued and unpaid
interest, second to outstanding principal and third to outstanding fees and
expenses), an amount equal to the outstanding principal, and accrued interest
on, the Loans;
third, to the Lessor for application to its Funding Party Balances in
respect of all the Leased Properties;
fourth, to the Indemnified Parties, on a pro rata basis, for any other
amounts due to them under the Operative Documents; and
fifth, to the Lessee or the Person or Persons otherwise legally
entitled thereto, the excess, if any; and
on and after such Release Date such amounts shall be paid over to the Lessor and
shall be distributed or applied by the Lessor, first to the Lessor for
application to any amounts owed to it in respect of such Leased Property, and
second to the Lessee or the Person or Persons otherwise legally entitled
thereto, the excess, if any.
2. Proceeds of Recoveries from Lessee and Guarantor. Any
payments received by any Funding Party when an Event of
Default exists (or has ceased to exist by reason of a
rejection of the Lease in a proceeding with respect to the
Lessee described in Article XII(f) or (g) of the Lease),from
(i) the Lessee as a payment in accordance with such Lease, or
(ii) the Guarantor as a payment in accordance with the Guaranty
Agreement, including, without limitation, any payment made by the Guarantor in
satisfaction of the guaranty of payment of the Notes pursuant to the Guaranty
Agreement,
shall be paid to the Agent as promptly as possible, and shall then be
distributed or applied by the Agent as promptly as possible in the order of
priority set forth in paragraph (a) above.
F. SECTION Distribution of Other Payments. All payments under Section 7.6 of the
Master Agreement shall be made first, to the Lenders, pro rata, until their
Funding Party Balances have been paid in full, and second, to the Lessor who
shall be entitled to retain all such remaining amounts. Except as otherwise
provided in this Section 3, any payment received by the Lessor which is to be
paid to Agent pursuant hereto or for which provision as to the application
thereof is made in an Operative Document but not elsewhere in this Section 3
shall, if received by the Lessor, be paid forthwith to the Agent and when
received shall be distributed forthwith by the Agent to the Person and for the
purpose for which such payment was made in accordance with the terms of such
Operative Document.
G. SECTION Timing of Agent Distributions. Payments received by the Agent in
immediately available funds before 12:00 p.m. (noon), Atlanta, Georgia time, on
any Business Day shall be distributed to the Funding Parties in accordance with
and to the extent provided in this Section 3 on such Business Day. Payments
received by the Agent in immediately available funds after 12:00 p.m. (noon),
Atlanta, Georgia time shall be distributed to the Funding Parties in accordance
with and to the extent provided in this Section 3 on the next Business Day.
IV. SECTION THE LESSOR; EXERCISE OF REMEDIES UNDER LEASE AND GUARANTY
A. SECTION Covenant of Lessor. So long as any Lender's Commitment remains in
effect, any Loan remains outstanding and unpaid or any other amount is owing to
any Lender with respect to its Funding Party Balances, subject to Section 4.2,
the Lessor will promptly pay all amounts payable by it under this Loan Agreement
and the Notes issued by it in accordance with the terms hereof and thereof and
shall duly perform each of its obligations under this Loan Agreement, the Notes
and the other Operative Documents to which it is a party. The Lessor agrees to
provide to the Agent a copy of each estoppel certificate that the Lessor
proposes to deliver pursuant to Section 17.13 of the Lease at least five (5)
days prior to such delivery and to make any corrections thereto reasonably
requested by the Agent prior to such delivery. The Lessor shall keep each Leased
Property owned by it free and clear of all Lessor Liens. The Lessor shall not
reject any sale of any Leased Property pursuant to Section 14.6 of the Lease
unless all of the related Loans have been paid in full or all of the Lenders
consent to such rejection. In the event that all of the Lenders reject any sale
of any Leased Property pursuant to Section 14.6 of the Lease or the Lessee
returns any Leased Property pursuant to the Construction Agency Agreement, the
Lessor agrees to take such action as the Required Lenders reasonably request to
effect a sale or other disposition of such Leased Property, provided that the
Lessor shall not be required to expend its own funds in connection with such
sale or disposition.
B. SECTION Lessor Obligations Nonrecourse; Payment from Certain Lease and
Guaranty Obligations and Certain Proceeds of Leased Property Only. All payments
to be made by the Lessor in respect of the Loans, the Notes and this Loan
Agreement shall be made only from certain payments received under the Lease, the
Construction Agency Agreement and the Guaranty Agreement and certain proceeds of
the Leased Properties and only to the extent that the Lessor or the Agent shall
have received sufficient payments from such sources to make payments in respect
of the Loans in accordance with Section 3. Each Lender agrees that it will look
solely to such sources of payments to the extent available for distribution to
such Lender as herein provided and that neither the Lessor nor the Agent is or
shall be personally liable to any Lender for any amount payable hereunder or
under any Note. Nothing in this Loan Agreement, the Notes or any other Operative
Document shall be construed as creating any liability (other than for willful
misconduct, gross negligence, misrepresentation or breach of contract (other
than the failure to make payments in respect of the Loans if it has not received
the funds available therefor)) of the Lessor individually to pay any sum or to
perform any covenant, either express or implied, in this Loan Agreement, the
Notes or any other Operative Documents (all such liability, if any, being
expressly waived by each Lender) and that each Lender, on behalf of itself and
its successors and assigns, agrees in the case of any liability of the Lessor
hereunder or thereunder (except for such liability attributable to its willful
misconduct, gross negligence, misrepresentation, fraud or breach of contract
(other than the failure to make payments in respect of the Loans)) that it will
look solely to those certain payments received under the Lease, the Construction
Agency Agreement and the Guaranty Agreement and those certain proceeds of the
Leased Properties, provided, however, that the Lessor in its individual capacity
shall in any event be liable with respect to (i) the removal of Lessor's Liens
or involving its gross negligence, willful misconduct, misrepresentation, fraud
or breach of contract (other than the failure to make payments in respect of the
Loans) or (ii) failure to turn over payments the Lessor has received in
accordance with Section 3; and provided further that the foregoing exculpation
of the Lessor shall not be deemed to be exculpations of the Lessee, the
Guarantor or any other Person.
C. SECTION Exercise of Remedies Under Lease and Guaranty.
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1. Event of Default. With respect to any Potential Event of Default as to which
notice thereof by the Lessor to the Lessee is a requirement to cause such
Potential Event of Default to become an Event of Default, the Lessor may at any
time in its discretion give or withhold such notice, provided that the Lessor
agrees to give such notice to such Lessee promptly upon receipt of a written
request by any Lender or the Agent.
2. Acceleration of Lease Balance. When an Event of Default exists, the Lessor,
upon the direction of the Required Funding Parties, shall exercise remedies
under Article XIII of the Lease and under the Guaranty Agreement to demand
payment in full of the Lease Balance by the Lessee or the Guarantor (the
"Acceleration"). Following the Acceleration, the Lessor shall consult with the
Lenders regarding actions to be taken in response to such Event of Default. The
Lessor (1) shall not, without the prior written consent of Required Funding
Parties and (2) shall (subject to the provisions of this Section), if so
directed by Required Funding Parties, do any of the following: commence eviction
or foreclosure proceedings, or make a demand under the Guaranty Agreement, or
file a lawsuit against the Lessee under the Lease, or file a lawsuit against the
Guarantor under the Guaranty Agreement, or sell the Leased Property, or exercise
other remedies against the Lessee or the Guarantor under the Operative Documents
in respect of such Event of Default; provided, however, that any payments
received by the Lessor shall be distributed in accordance with Section 3.
Notwithstanding any such consent, direction or approval by the Required Funding
Parties of any such action or omission, the Lessor shall not have any obligation
to follow such direction if the same would, in the Lessor's reasonable judgment,
require the Lessor to expend its own funds or expose the Lessor to liability,
expense, loss or damages unless and until the Lenders advance to the Lessor an
amount which is sufficient, in the Lessor's reasonable judgment, to cover such
liability, expense, loss or damage (excluding the Lessor's pro rata share
thereof, if any). Notwithstanding the foregoing, on and after the related
Release Date, the Lenders shall have no rights to the related Leased Property or
any proceeds thereof, the Lenders shall have no rights to direct or give consent
to any actions with respect to such Leased Property and the proceeds thereof,
the Lessor shall have absolute discretion (but in all events subject to the
terms of the Operative Documents) with respect to such exercise of remedies with
respect to such Leased Property, and the proceeds thereof, including, without
limitation, any foreclosure or sale of such Leased Property, and the Lessor
shall have no liability to the Lenders with respect to the Lessor's actions or
failure to take any action with respect to such Leased Property.
SECTION 4.4 Indemnity by Lessor. During the Construction Term for any
Leased Property, Lessor hereby indemnifies each Lender and its Affiliates,
successors, permitted assigns, permitted transferees, employees, officers,
directors and agents from and against any and all Claims that may be imposed on,
incurred by or asserted or threatened to be asserted against, any such Person,
arising out of or related to such Leased Property, or the leasing or financing
thereof; it being understood that the foregoing provision is subject to Section
4.2.
V. SECTION LOAN EVENTS OF DEFAULT; REMEDIES
A. SECTION Loan Events of Default. Each of the following events shall constitute
a Loan Event of Default (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of law or pursuant to or
in compliance with any judgment, decree or order of any court or any order, rule
or regulation of any Governmental Authority) and each such Loan Event of Default
shall continue so long as, but only as long as, it shall not have been remedied:
1. Lessor shall fail to distribute in accordance with the provisions of Section
3 any amount received by the Lessor pursuant to the Lease, the Guaranty
Agreement, the Construction Agency Agreement or the Master Agreement within two
(2) Business Days of receipt thereof if and to the extent that the Agent or the
Lenders are entitled to such amount or a portion thereof; or
2. the Lessor shall fail to pay to the Agent, within two (2) Business Days of
the Lessor's receipt thereof, any amount which the Lessee or the Guarantor is
required, pursuant to the Operative Documents, to pay to the Agent but
erroneously pays to the Lessor; or
3. failure by the Lessor to perform in any material respect any other covenant
or condition herein or in any other Operative Document to which the Lessor is a
party, which failure shall continue unremedied for thirty (30) days after
receipt by the Lessor of written notice thereof from the Agent or any Lender; or
4. any representation or warranty of the Lessor contained in any Operative
Document or in any certificate required to be delivered thereunder shall prove
to have been incorrect in a material respect when made and shall not have been
cured within thirty (30) days of receipt by the Lessor of written notice thereof
from the Agent or any Lender; or
5. the Lessor or the General Partner shall become bankrupt or make an assignment
for the benefit of creditors or consent to the appointment of a trustee or
receiver; or a trustee or a receiver shall be appointed for the Lessor or the
General Partner or for substantially all of its property without its consent and
shall not be dismissed or stayed within a period of sixty (60) days; or
bankruptcy, reorganization or insolvency proceedings shall be instituted by or
against the Lessor or the General Partner and, if instituted against the Lessor
or the General Partner, shall not be dismissed or stayed for a period of sixty
(60) days; or
6. any Event of Default shall occur and be continuing.
B. SECTION Remedies.
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1. Upon the occurrence of a Loan Event of Default hereunder, (i) if such event
is a Loan Event of Default specified in clause (e) of Section 5.1 with respect
to the Lessor or the General Partner, automatically the Lenders' Commitments
shall terminate and the outstanding principal of, and accrued interest on, the
Loans shall be immediately due and payable, and (ii) if such event is any other
Loan Event of Default, upon written request of the Required Lenders, the Agent
shall, by notice of default to the Lessor, declare the Commitments of the
Lenders to be terminated forthwith and the outstanding principal of, and accrued
interest on, the Loans to be immediately due and payable, whereupon the
Commitments of the Lenders shall immediately terminate and the outstanding
principal of, and accrued interest on, the Loans shall become immediately due
and payable.
2. When a Loan Event of Default exists, the Agent may, and upon the written
instructions of the Required Funding Parties shall, exercise any or all of the
rights and powers and pursue any and all of the remedies available to it
hereunder, under the Notes, the Mortgages and the Assignments of Lease and Rents
and shall have and may exercise any and all rights and remedies available under
the Uniform Commercial Code or any provision of law. When a Loan Event of
Default exists, the Agent may, and upon the written instructions of the Required
Funding Parties shall, have the right to exercise all rights of the Lessor under
the Lease pursuant to the terms and in the manner provided for in the Mortgages
and the Assignments of Lease and Rents.
3. Except as expressly provided above, no remedy under this Section 5.2 is
intended to be exclusive, but each shall be cumulative and in addition to any
other remedy provided under this Section 5.2 or under the other Operative
Documents or otherwise available at law or in equity. The exercise by the Agent
or any Lender of any one or more of such remedies shall not preclude the
simultaneous or later exercise of any other remedy or remedies. No express or
implied waiver by the Agent or any Lender of any Loan Event of Default shall in
any way be, or be construed to be, a waiver of any future or subsequent Loan
Event of Default. The failure or delay of the Agent or any Lender in exercising
any rights granted it hereunder upon any occurrence of any of the contingencies
set forth herein shall not constitute a waiver of any such right upon the
continuation or recurrence of any such contingencies or similar contingencies
and any single or partial exercise of any particular right by the Agent or any
Lender shall not exhaust the same or constitute a waiver of any other right
provided herein.
VI. SECTION THE AGENT
A. SECTION Appointment. Each Lender hereby irrevocably designates and appoints
the Agent as the agent of such Lender under this Loan Agreement and the other
Operative Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Loan Agreement and the other Operative Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of this
Loan Agreement and the other Operative Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Loan Agreement, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Loan Agreement or any other Operative Document or otherwise exist against the
Agent.
B. SECTION Delegation of Duties. The Agent may execute any of its duties under
this Loan Agreement and the other Operative Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
C. SECTION Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates shall be (a)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with this Loan Agreement or any other Operative Document
(except for its or such Person's own gross negligence or willful misconduct) or
(b) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Lessor, the Guarantor or
the Lessee or any officer thereof contained in this Loan Agreement or any other
Operative Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Loan Agreement or any other Operative Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this Loan
Agreement or any other Operative Document or for any failure of the Lessor, the
Guarantor or the Lessee to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to any Lender to ascertain or to inquire
as to the observance or performance of any of the agreements contained in, or
conditions of, this Loan Agreement or any other Operative Document, or to
inspect the properties, books or records of the Lessor, the Guarantor or the
Lessee.
D. SECTION Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation, counsel
to the Lessor, the Guarantor or the Lessee), independent accountants and other
experts selected by the Agent. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Loan Agreement or any other Operative Document unless it shall
first receive such advice or concurrence of the Required Funding Parties as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Funding Parties against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Loan Agreement and the other Operative Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
E. SECTION Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Loan Potential Event of Default or Loan Event of
Default hereunder unless the Agent has received notice from a Lender referring
to this Loan Agreement, describing such Loan Potential Event of Default or Loan
Event of Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give notice thereof
to the Lenders. The Agent shall take such action with respect to such Loan
Potential Event of Default or Loan Event of Default as shall be reasonably
directed by the Required Lenders; provided that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such Loan
Potential Event of Default or Loan Event of Default as it shall deem advisable
in the best interests of the Lenders.
F. SECTION Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Lessor, the Guarantor or the Lessee, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Lessor, the Guarantor and the Lessee and
made its own decision to make its Loans hereunder and enter into this Loan
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Loan Agreement and the other Operative Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Lessor, the Guarantor and the Lessee. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Lessor, the Guarantor or the Lessee which may come into the possession of
the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
G. SECTION Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Lessee or Guarantor and
without limiting the obligation of the Lessee or Guarantor to do so), ratably
according to the percentage each Lender's Commitment bears to the total
commitments of all of the Lenders on the date on which indemnification is sought
under this Section 6.7 (or, if indemnification is sought after the date upon
which the Lenders Commitments shall have terminated and the Loans shall have
been paid in full, ratably in accordance with the percentage that each Lender's
Commitment bears to the Commitments of all of the Lenders immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of, the
Commitments, this Loan Agreement, any of the other Operative Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Agent's gross negligence or willful misconduct.
The agreements in this Section 6.7 shall survive the payment of the Notes and
all other amounts payable hereunder.
H. SECTION Agent in Its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Lessor, the Guarantor or the Lessee as though the Agent were not the
Agent hereunder and under the other Operative Documents. With respect to Loans
made or renewed by it and any Note issued to it, the Agent shall have the same
rights and powers under this Loan Agreement and the other Operative Documents as
any Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual capacity.
Each Lender acknowledges that the Agent in its individual capacity has had and
continues to have other business relations and transactions with the Lessee and
the Lessor.
I. SECTION Successor Agent. The Agent may resign as Agent upon 20 days' notice
to the Lenders. If the Agent shall resign as Agent under this Loan Agreement and
the other Operative Documents, then the Required Funding Parties shall appoint a
successor agent for the Lenders, which successor agent shall be a commercial
bank organized under the laws of the United States of America or any State
thereof or under the laws of another country which is doing business in the
United States of America and having a combined capital, surplus and undivided
profits of at least $100,000,000, whereupon such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent effective upon such appointment and approval, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Loan Agreement or any holders of the Notes. After any retiring
Agent's resignation as Agent, all of the provisions of this Section 6 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Loan Agreement and the other Operative Documents.
VII. SECTION MISCELLANEOUS
A. SECTION Amendments and Waivers. Neither this Loan Agreement,
any Note, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the
provisions of Section 8.4 of the Master Agreement.
B. SECTION Notices. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon
the respective parties hereto shall be given in accordance
with Section 8.2 of the Master Agreement.
C. SECTION No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
D. SECTION Successors and Assigns. This Loan Agreement shall be
binding upon and inure to the benefit of the Lessor, the
Agent, the Lenders, all future holders of the Notes and their
respective successors and permitted assigns.
E. SECTION Counterparts. This Loan Agreement may be executed by one or more of
the parties to this Loan Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same agreement. A set of the counterparts of this Loan Agreement signed by
all the parties hereto shall be lodged with the Lessor and the Agent.
F. SECTION GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
LOAN AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF GEORGIA.
G. SECTION Survival and Termination of Agreement. All covenants, agreements,
representations and warranties made herein and in any certificate, document or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Loan Agreement, and the Notes and shall continue
in full force and effect so long as any Note or any amount payable to any Lender
under or in connection with this Loan Agreement or the Notes is unpaid, at which
time this Loan Agreement shall terminate.
H. SECTION Entire Agreement. This Loan Agreement and the other
Operative Documents set forth the entire agreement of the
parties hereto with respect to its subject matter, and
supersedes all previous understandings, written or oral, with
respect thereto.
I. SECTION Severability. Any provision of this Loan Agreement or of the Notes
which is prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or thereof or affecting the validity, enforceability or
legality of any such provision in any other jurisdiction.
J. SECTION WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
TO THIS LOAN AGREEMENT, THE NOTES, ANY OTHER OPERATIVE DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
<PAGE>
IN WITNESS THEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
SUNTRUST BANK, as Agent
By:
Name Printed:
Title:
<PAGE>
ATLANTIC FINANCIAL GROUP, LTD., as Lessor and Borrower
By: Atlantic Financial Managers, Inc.,
its General Partner
By:
Name Printed:
Title:
<PAGE>
SUNTRUST BANK, as a Lender
By:
Name Printed:
Title:
<PAGE>
BANK OF AMERICA, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
FLEET NATIONAL BANK, as a Lender
By:
Name Printed:
Title:
<PAGE>
FIRSTAR BANK, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
AMSOUTH BANK, as a Lender
By:
Name Printed:
Title:
<PAGE>
WACHOVIA BANK, N.A., as a Lender
By:
Name Printed:
Title:
<PAGE>
CONSTRUCTION AGENCY AGREEMENT
dated as of October 11, 2000
among
ATLANTIC FINANCIAL GROUP, LTD.
and
RUBY TUESDAY, INC.
as Construction Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................2
1.1. Defined Terms..........................................................2
ARTICLE II APPOINTMENT OF CONSTRUCTION AGENT.................................2
2.1. Appointment............................................................2
2.2. Acceptance; Construction...............................................2
2.3. Commencement of Construction...........................................2
2.4. Supplements to this Agreement..........................................3
2.5. Term...................................................................3
2.6. Identification of Properties; Construction Documents...................4
2.7. Scope of Authority.....................................................4
2.8. Covenants of the Construction Agent....................................5
ARTICLE III THE BUILDINGS....................................................7
3.1. Construction...........................................................7
3.2. Amendments; Modifications..............................................7
3.3. Casualty and Condemnation..............................................7
3.4. Indemnity..............................................................8
ARTICLE IV PAYMENT OF FUNDS..................................................9
4.1. Funding of Property Acquisition Costs and Property Buildings Costs.....9
ARTICLE V CONSTRUCTION AGENCY EVENTS OF DEFAULT..............................9
5.1. Construction Agency Events of Default..................................9
5.2. Damages...............................................................11
5.3. Remedies; Remedies Cumulative.........................................11
ARTICLE VI NO CONSTRUCTION AGENCY FEE.......................................12
6.1. Lease as Fulfillment of Lessor's Obligations..........................12
ARTICLE VII LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS....................13
7.1. Exercise of the Lessor's Rights.......................................13
7.2. Lessor's Right to Cure Construction Agent's Defaults..................13
ARTICLE VIII MISCELLANEOUS..................................................13
8.1. Notices...............................................................13
8.2. Successors and Assigns................................................13
8.3. GOVERNING LAW.........................................................13
8.4. Amendments and Waivers................................................14
8.5. Counterparts..........................................................14
8.6. Severability..........................................................14
8.7. Headings and Table of Contents........................................14
8.8. Jurisdiction; Waivers.................................................14
EXHIBITS
Exhibit A Form of Supplement to Construction Agency Agreement
<PAGE>
CONSTRUCTION AGENCY AGREEMENT
CONSTRUCTION AGENCY AGREEMENT, dated as of October 11, 2000 (as
amended, supplemented or otherwise modified from time to time, this
"Agreement"), between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership, (the "Lessor"), and RUBY TUESDAY, INC., a Georgia corporation
("RTI", and in its capacity as construction agent, the "Construction Agent").
PRELIMINARY STATEMENT
A. Ruby Tuesday, Inc., as lessee (the "Lessee"), and Lessor, as lessor,
are parties to that certain Lease Agreement, dated as of October 11, 2000 (as
amended, supplemented or otherwise modified from time to time pursuant thereto,
the "Lease"), pursuant to which the Lessee has agreed to lease from Lessor, and
Lessor has agreed to lease to Lessee, Lessor's interests in certain Leased
Properties.
B. Lessor, the Lessee, the Lenders signatory thereto and SunTrust Bank,
as agent for such Lenders (in such capacity, the "Agent") are parties to that
certain Master Agreement, dated as of October 11, 2000 (as amended, supplemented
or otherwise modified from time to time pursuant thereto, the "Master
Agreement").
C. Subject to the terms and conditions hereof, (i) the Lessor desires
to appoint RTI as the Construction Agent to act as its sole and exclusive agent
for the identification and acquisition of the Land pursuant to the Master
Agreement and construction of the Buildings in accordance with the Plans and
Specifications and pursuant to the Master Agreement, and (ii) the Construction
Agent desires, for the benefit of the Lessor, to cause the Buildings to be
constructed in accordance with the Plans and Specifications and pursuant to the
Master Agreement and this Agreement, in each case in accordance with the terms
herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
I. ARTICLE
DEFINITIONS
Defined Terms. Capitalized terms used but not otherwise defined in
-------------
this Agreement shall have the meanings set forth in Appendix A to the Master
Agreement.
III. ARTICLE
APPOINTMENT OF CONSTRUCTION AGENT
Appointment. Pursuant to and subject to the terms and conditions set
forth herein and in the Master Agreement and the other Operative Documents, the
Lessor hereby irrevocably designates and appoints RTI as the Construction Agent
to act as its exclusive agent for (i) the identification and acquisition from
time to time of Land to be acquired or leased by the Lessor and leased or
subleased to RTI and (ii) the construction of the Buildings in accordance with
the Plans and Specifications on such Land.
Acceptance; Construction. RTI hereby unconditionally accepts the
designation and appointment as Construction Agent. The Construction Agent will
cause the Buildings to be constructed on the Land substantially in accordance
with the Plans and Specifications and, in accordance with the Operative
Documents, to be equipped in substantial compliance in all material respects
with all Applicable Law and insurance requirements.
Commencement of Construction. Subject to Construction Force Majeure
Events, the Construction Agent hereby agrees, unconditionally and for the
benefit of the Lessor, to cause Construction of a Building to commence on each
parcel of Land as soon as is reasonably practicable, in its reasonable judgment,
after the Closing Date in respect of such Land. For purposes hereof,
Construction of a Building shall be deemed to commence on the date (the
"Construction Commencement Date") on which excavation for the foundation for
such Building commences. Without limiting the foregoing, no phase of such
Construction shall be undertaken until all permits required for such phase have
been issued therefor.
Supplements to this Agreement. On the Closing Date of each parcel of
Land, the Lessor and the Construction Agent shall each execute and deliver to
the Agent a supplement to this Agreement in the form of Exhibit A to this
Agreement, appropriately completed, pursuant to which the Lessor and the
Construction Agent shall, among other things, each acknowledge and agree that
the Construction of such parcel of Land will be governed by the terms of this
Agreement. Following the execution and delivery of a supplement to this
Agreement as provided above, such supplement and all supplements previously
delivered under this Agreement shall constitute a part of this Agreement. On or
prior to the Closing Date of each parcel of Land, the Construction Agent shall
prepare and deliver to the Lessor and the Agent a construction budget (the
"Construction Budget") for the related Leased Property, setting forth in
reasonable detail the budget for the Construction of the proposed Building on
such Land in accordance with the Plans and Specifications therefor, and all
related costs including the capitalized interest and Yield expected to accrue
during the related Construction Term; such Construction Budget shall include a
line item for the amount of self-insurance applicable to such Leased Property.
Term. This Agreement shall commence on the date hereof and shall
----
terminate with respect to any given Leased Property upon the first to occur of:
a. payment by the Lessee of the Leased Property
Balance and termination of the Lease with respect to such
Leased Property in accordance with the Lease;
b. the expiration or earlier termination of the Lease;
c. termination of this Agreement pursuant to Article V
---------
hereof;
d. the Completion Date for such Leased Property and
the completion of all punch list items as set forth in
Section 2.8(d); and
e. the payment by the Construction Agent of the Leased
Property Balance or the Construction Failure Payment with
respect to such Leased Property pursuant to this Agreement.
Identification of Properties; Construction Documents. The
Construction Agent may execute any of its duties and obligations under this
Agreement by or through agents, contractors, developers, Affiliates, employees
or attorneys-in-fact, and the Construction Agent shall enter into such
agreements with architects and contractors as the Construction Agent deems
necessary or desirable for the construction of the Buildings pursuant hereto
(the "Construction Documents"); provided, however, that no such delegation shall
limit or reduce in any way the Construction Agent's duties and obligations under
this Agreement; provided, further, that contemporaneously with the execution and
delivery of a Construction Document, the Construction Agent will execute and
deliver to the Lessor the Security Agreement and Assignment, pursuant to which
the Construction Agent assigns to the Lessor, among other things, all of the
Construction Agent's rights under and interests in such Construction Documents.
Each construction contract shall be with a reputable general contractor with
experience in constructing projects that are similar in scope and type to the
proposed Building, and shall provide for a guaranteed maximum project cost and
at least 10% retainage.
a. Scope of Authority. Subject to the terms, conditions, restrictions and
limitations set forth in the Operative Documents, the Lessor hereby expressly
authorizes the Construction Agent, or any agent or contractor of the
Construction Agent, and the Construction Agent unconditionally agrees, for the
benefit of the Lessor, to take all action necessary or desirable for the
performance and satisfaction of all of the Construction Agent's obligations
hereunder with respect to the Leased Properties acquired or leased by the
Lessor, including, without limitation:
(1) the identification and assistance with the
acquisition or lease of Land in accordance with the terms
and conditions of the Master Agreement;
(2) all design and supervisory functions relating to
the construction of the Buildings and performing all
engineering work related to the construction of the
Buildings;
(3) negotiating and entering into all contracts or
arrangements to procure the equipment and services
necessary to construct the Buildings on such terms and
conditions as are customary and reasonable in light of
local standards and practices;
(4) obtaining all necessary permits, licenses, consents,
approvals and other authorizations, including those
required under Applicable Law, from all Governmental
Authorities in connection with the construction and the
development of the Leased Property on the Land in
accordance with the Plans and Specifications;
(5) maintaining all books and records with respect to
the construction, operation and management of the
Leased Properties; and
(6) performing any other acts necessary or appropriate in
connection with the identification, and acquisition (or
leasing) and development of the Land and construction of
the Buildings in accordance with the Plans and
Specifications, and all other functions typically
undertaken for the construction and development of similar
properties.
b. Neither the Construction Agent nor any of its Affiliates or agents shall
enter into any contract which would, directly or indirectly, impose any
liability or obligation on the Lessor unless such contract expressly contains an
acknowledgment by the other party or parties thereto that the obligations of the
Lessor are non-recourse, and that the Lessor shall have no personal liability
with respect to such obligations. Any contract entered into by the Construction
Agent or any of its Affiliates or agents not meeting the requirements of the
foregoing sentence shall be ineffective. Subject to the foregoing, the Lessor
shall execute such documents and take such other actions as the Construction
Agent shall reasonably request, at the Construction Agent's expense, to permit
the Construction Agent to perform its duties hereunder.
c. Subject to the terms and conditions of this Agreement and the other Operative
Documents, the Construction Agent shall have sole management and control over
the means, methods, sequences and procedures with respect to the Construction.
Covenants of the Construction Agent. The Construction Agent hereby
-----------------------------------
covenants and agrees that it will:
a. following the Construction Commencement Date for each
parcel of Land, cause construction of a Building on such
Land to be prosecuted diligently and without undue
interruption substantially in accordance with the Plans
and Specifications for such Land, in accordance with the
Construction Budget for such Leased Property and in
compliance in all material respects with all Applicable
Law and insurance requirements;
b. notify the Lessor and the Agent in writing not less
than five (5) Business Days after the occurrence of
each Construction Force Majeure Event;
c. take all reasonable and practical steps to cause the
Completion Date for such Leased Property to occur on or
prior to the Scheduled Construction Termination Date for
such Leased Property, and cause all Liens (including,
without limitation, Liens or claims for materials supplied
or labor or services performed in connection with the
construction of the Buildings), other than Permitted Liens
and Lessor Liens, to be discharged;
d. following the Completion Date for each Leased
Property, cause all outstanding punch list items with
respect to the Buildings on such Leased Property to be
completed within sixty (60) days after said Completion
Date;
e. at all times during Construction, cause all title to
all personalty financed by the Lessor on or within such
Leased Property to be and remain vested in the Lessor and
cause to be on file with the applicable filing office or
offices all necessary documents under Article 9 of the
Uniform Commercial Code to perfect such title free of all
Liens other than Permitted Liens, it being understood and
acknowledged that such Lessor's rights, title and interest
in and to said personalty have been assigned to the Agent
pursuant to the Operative Documents; and
f. not enter into any agreements or arrangements with any
Person (other than the Funding Parties pursuant to the
Operative Documents) that would result in any claim
against, or liability of, the Agent or any Funding Party
resulting from the fact that any Leased Property is not
completed on or prior to the Scheduled Construction
Termination Date therefor.
V. ARTICLE
THE BUILDINGS
Construction. The Construction Agent shall cause the Buildings to be
constructed and equipped (as provided in the Plans and Specifications) in
compliance in all material respects with all Applicable Law and insurance
requirements.
Amendments; Modifications. The Construction Agent may, subject to the
conditions, restrictions and limitations set forth herein and in the Operative
Documents (but not otherwise), at any time during the term hereof revise, amend
or modify the Plans and Specifications and the related Construction Documents
without the consent of the Lessor; provided, however, that the Lessor's prior
written consent will be required in the following instances: (x) such revision,
amendment or modification by its terms would result in the Completion Date of
the Buildings occurring after the Scheduled Construction Termination Date, or
(y) such revision, amendment or modification would result in the cost for such
Leased Property exceeding the then remaining Commitments or increase the
Construction Budget therefor, or (z) the aggregate effect of such revision,
amendment or modification, when taken together with any previous or
contemporaneous revision, amendment or modification to the Plans and
Specifications for such Leased Property, would be to reduce the Fair Market
Sales Value of such Leased Property in a material respect when completed.
Casualty and Condemnation. If at any time prior to the Completion
Date with respect to any Building there occurs a Casualty or the Lessor or the
Construction Agent receives notice of a Condemnation, then, in each case the
Construction Agent shall promptly and diligently take all commercially
reasonable and practical steps to cause the Construction of the related Building
to be completed substantially in accordance with the Plans and Specifications
and with the terms hereof, and cause the Completion Date to occur on or prior to
the Scheduled Construction Termination Date. The Construction Agent shall use
all insurance proceeds or Awards received by it with respect to such Casualty or
Condemnation, as the case may be, to pay the construction costs incurred in
connection with such rebuilding or restoration. The Lessor shall make all
insurance proceeds or Awards received with respect to such Casualty or
Condemnation available to the Construction Agent to reimburse the Construction
Agent for, or to pay, all construction costs incurred in connection with such
rebuilding or restoration. To the extent that such insurance proceeds are
insufficient to pay such construction costs, such construction costs shall be
paid with the proceeds of Advances made pursuant to the Master Agreement. In the
event that Lessor does not make such insurance proceeds or Advances available,
then the provisions of Section 5.3 shall apply to the related Leased Property.
Indemnity. During the Construction Term for each Leased Property, the
Construction Agent agrees to assume liability for, and to indemnify, protect,
defend, save and hold harmless the Lessor on an After-Tax Basis, from and
against, any and all Claims that may be imposed on, incurred by or asserted or
threatened to be asserted, against the Lessor, whether or not the Lessor shall
also be indemnified as to any such Claim by any other Person, in any way
relating to or arising out of (i) any event, condition or circumstance within
the Construction Agent's control,(ii) fraud, misapplication of funds, illegal
acts or willful misconduct on the part of the Construction Agent, or (iii) any
event described in paragraph (f), (g) or (h) of Article XII of the Lease with
respect to the Construction Agent. As used in clause (i) of the foregoing
sentence, the term "within the Construction Agent's control" shall mean caused
by or arising from any failure by any Obligor to comply with any of its
obligations under the Operative Documents (including its insurance obligations),
any representation by any Obligor in any of the Operative Documents not being
true, any negligence or wilful misconduct of any Obligor, or any claim by any
third party against the Lessor based upon the action or inaction of or by any
Obligor; provided, however, that if such Claim is related to an inability or the
failure to complete the construction of a Leased Property on or prior to
Scheduled Construction Termination Date therefor and such Claim does not arise
out of or result from events or circumstances described in the foregoing clause
(ii) or (iii), the Construction Agent's liability shall be limited to an amount
equal to the Construction Failure Payment. Any Claims that are incurred by any
Indemnified Party for which the Construction Agent is not obligated to indemnify
pursuant to this Section 3.4 or the Master Agreement shall, if requested by the
Agent by written notice to Lessor be capitalized, and result in an increase to
the Funded Amounts related to the relevant Leased Property. The foregoing
indemnities are in addition to, and not in limitation of, the indemnities with
respect to environmental claims set forth in Section 7.2 of the Master
Agreement. The provisions of Section 7.3 of the Master Agreement shall apply to
any amounts that the Construction Agent is requested to pay pursuant to this
Section 3.4.
VII. ARTICLE
PAYMENT OF FUNDS
a. Funding of Property Acquisition Costs and Property Buildings Costs. In
connection with the acquisition or lease of any Land and during the course of
the construction of the Buildings on any Land, the Construction Agent may
request that the Lessor advance funds for the payment of acquisition,
transaction and closing costs or property improvement costs, and the Lessor will
comply with such request to the extent provided for under, and subject to the
conditions, restrictions and limitations contained in, the Master Agreement and
the other Operative Documents.
b. The proceeds of any funds made available to the Lessor to pay acquisition,
transaction and closing costs or improvement costs shall be made available to
the Construction Agent in accordance with the Funding Request relating thereto
and the terms of the Master Agreement. The Construction Agent will use such
proceeds only to pay the acquisition, transaction and closing costs or
improvement costs for Leased Properties set forth in the Funding Request
relating to such funds.
IX. ARTICLE
CONSTRUCTION AGENCY EVENTS OF DEFAULT
Construction Agency Events of Default. If any one or more of the
following events (each a "Construction Agency Event of Default") shall occur and
be continuing:
a. the Construction Agent fails to apply any funds paid
by, or on behalf of, the Lessor to the Construction Agent
for the acquisition or lease of the Land and the
construction of the Buildings to the payment of
acquisition, transaction and closing costs or improvements
costs for such Leased Property; b. subject to Construction
Force Majeure Events, the Construction Commencement Date
with respect to any Leased Property shall fail to occur
for any reason on or prior to the date that is one year
after the Closing Date with respect to such Leased
Property;
c. the Completion Date with respect to any Leased
Property shall fail to occur for any reason on or prior to
the earlier of the Funding Termination Date and the
Scheduled Construction Termination Date for such Leased
Property;
d. any Event of Default shall have occurred and be
continuing; or
e. the Construction Agent shall fail to observe or perform
in any material respect any term, covenant or condition of
this Agreement (except those specified in clauses (a)
through (d) above), and such failure shall remain uncured
for a period of thirty (30) days after notice thereof to
the Construction Agent; provided, however, no Construction
Agency Event of Default shall be deemed to occur if such
failure or breach cannot reasonably be cured within such
period, so long as the Construction Agent shall have
promptly commenced the cure thereof and continues to act
with diligence to cure such failure or breach and such
failure or breach is cured within one hundred eighty (180)
days after notice thereof to the Construction Agent;
then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Article, immediately terminate this Agreement as
to any Leased Property or Properties or all of the Leased Properties,
separately, successively or concurrently (all in Lessor's sole discretion) by
giving the Construction Agent written notice of such termination, and upon the
giving of such notice, this Agreement shall terminate as to such Leased Property
or Properties or all of the Leased Properties (as the case may be) and all
rights of the Construction Agent and, subject to the terms of the Operative
Documents, all obligations of the Lessor under this Agreement with respect to
such Leased Property or Properties or all of the Leased Properties (as the case
may be) shall cease. The Construction Agent shall pay upon demand all reasonable
costs, expenses, losses, expenditures and damages (including, without
limitation, attorneys' fees and disbursements) actually incurred by or on behalf
of the Lessor in connection with any Construction Agency Event of Default.
Damages. The termination of this Agreement pursuant to Section 5.1
shall in no event relieve the Construction Agent of its liability and
obligations hereunder, all of which shall survive any such termination. a.
Remedies; Remedies Cumulative. If a Construction Agency Event of Default shall
have occurred and be continuing, the Lessor shall have all rights and remedies
available under the Operative Documents or available at law, equity or
otherwise. Notwithstanding the foregoing, if a Construction Agency Event of
Default hereunder relates only to a specific Leased Property or specific Leased
Properties but not all Leased Properties (but in any event excluding any Event
of Default), the Construction Agent shall have the right to cure such
Construction Agency Event of Default by purchasing such Leased Property or
Properties for the Leased Property Balance(s) therefor from the Lessor in
accordance with the terms and subject to the conditions, restrictions and
limitations of Section 14.5 of the Lease. In the event that the Construction
Agent does not exercise its option to purchase such Leased Property or
Properties, the Construction Agent shall pay to the Lessor the Construction
Failure Payment(s) therefor within five (5) Business Days of the demand therefor
by the Lessor, and shall surrender and return such Leased Property or Properties
to the Lessor or its designee in accordance with the terms of Section 14.8 of
the Lease (provided that the obligation to surrender the Leased Property in as
good condition as it was on the Completion Date, ordinary wear and tear
excepted, shall not apply). In the event that the Construction Agent returns any
Leased Property to the Lessor pursuant to the previous or the next sentence, the
Construction Agent shall take such action as the Lessor may reasonably request
in order to transfer to the Lessor (or its designee) all of the Construction
Agent's rights and claims in, to and under the related Construction Contract(s),
Architect's Agreement(s), all other Construction Documents, all agreements,
security deposits, guaranties and surety bonds related thereto and all
governmental permits related to such Construction, and the Construction Agent
shall provide to the Lessor copies of all books, records and documentation with
respect to the foregoing. In addition, the Construction Agent shall provide such
assistance as the Lessor may request in order to remarket the Leased Property.
Notwithstanding the foregoing, (A) if a Construction Agency Event of Default
pursuant to Section 5.1(c) occurs solely as a result of a Construction Force
Majeure Event, if the Construction Agent does not exercise its option to
purchase Leased Property, the Construction Agent shall surrender and return such
Leased Property to Lessor or its designee in accordance with the terms of
Section 14.8 of the Lease and (B) if a Construction Agency Event of Default
occurs due to the fraud, misapplication of funds, illegal acts or wilful
misconduct on the part of the Construction Agent or any event described in
paragraph (f), (g) or (h) of Article XII of the Lease, the Construction Agent
shall be obligated to purchase all of the Leased Properties for the Lease
Balance within five (5) Business Days of demand by Lessor.
b. No failure to exercise and no delay in exercising, on the part of the Lessor,
any right, remedy, power or privilege under this Agreement or under the other
Operative Documents shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
XI. ARTICLE
NO CONSTRUCTION AGENCY FEE
Lease as Fulfillment of Lessor's Obligations. All obligations, duties
and requirements imposed upon or allocated to the Construction Agent shall be
performed by the Construction Agent at the Construction's Agent's sole cost and
expense, and the Construction Agent will not be entitled to, and the Lessor
shall not have any obligation to pay, any agency fee or other fee or
compensation, and the Construction Agent shall not be entitled to, and the
Lessor shall not have any obligation to make or pay, any reimbursement therefor,
it being understood that this Agreement is being entered into as consideration
for and as an inducement to the Lessor entering into the Lease and the other
Operative Documents.
XIII. ARTICLE
LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS
Exercise of the Lessor's Rights. The Construction Agent hereby
acknowledges and agrees that the rights and powers of the Lessor under this
Agreement have been assigned to, and may be exercised by, the Agent.
Lessor's Right to Cure Construction Agent's Defaults. The Lessor,
without waiving or releasing any obligation or Construction Agency Event of
Default, may, upon prior written notice to the Construction Agent (but shall be
under no obligation to), remedy any Construction Agency Event of Default for the
account of and at the sole cost and expense of the Construction Agent. All
reasonable out of pocket costs and expenses so incurred (including actual and
reasonable fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by the
Lessor, shall be paid by the Construction Agent to the Lessor on demand.
XV. ARTICLE
MISCELLANEOUS
Notices. All notices, consents, directions, approvals, instructions,
requests, demands and other communications required or permitted by the terms
hereof to be given to any Person shall be given in writing in the manner
provided in, shall be sent to the respective addresses set forth in, and the
effectiveness thereof shall be governed by the provisions of, Section 8.2 of the
Master Agreement.
Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor, the Construction Agent and their respective
legal representatives, successors and permitted assigns. The Construction Agent
shall not assign its rights or obligations hereunder without the prior written
consent of the Lessor and the Agent.
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
Amendments and Waivers. Subject to Section 8.4 of the Master
Agreement, the Lessor and the Construction Agent may from time to time, enter
into written amendments, supplements or modifications hereto.
Counterparts. This Agreement may be executed on any number of
------------
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same agreement.
Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Headings and Table of Contents. The headings and table of contents
contained in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
Jurisdiction; Waivers. The Lessor and the Construction Agent hereby
---------------------
acknowledge that the terms of Section 8.11 of the Master Agreement apply to this
Agreement.
<PAGE>
1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
RUBY TUESDAY, INC.
By
Name:
Title:
ATLANTIC FINANCIAL GROUP, LTD.
By: Atlantic Financial Managers, Inc., its General Partner
By
Name:
Title:
<PAGE>
EXHIBIT A
Supplement to Construction Agency Agreement
SUPPLEMENT to Construction Agency Agreement, dated as of
______________, 200_, between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership (the "Lessor"), and RUBY TUESDAY, INC., a Georgia corporation (in
its capacity as construction agent, the "Construction Agent"). Capitalized terms
used but not otherwise defined herein shall have the meanings given them in the
Construction Agency Agreement.
The Lessor and the Construction Agent are parties to that certain
Construction Agency Agreement, dated as of October 11, 2000 (as amended,
supplemented or otherwise modified, the "Construction Agency Agreement"),
pursuant to which (i) the Lessor has appointed the Construction Agent as its
sole and exclusive agent in connection with the identification and acquisition
of Land and construction of the Buildings in accordance with the Plans and
Specifications, and (ii) the Construction Agent has agreed, for the benefit of
the Lessor, to cause the construction of the Buildings to be completed in
accordance with the Plans and Specifications.
Subject to the terms and conditions of the Construction Agency
Agreement, the Lessor and the Construction Agent desire that the terms of the
Construction Agency Agreement apply to the Land described in Schedule 1 and wish
to execute this Supplement to provide therefor.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. The Construction Agent agrees to act as Construction Agent and to
perform its obligations under the Construction Agency Agreement in connection
with the completion of construction of the Building on the Land described in
Schedule 1 in accordance with the Plans and Specifications for such Land. The
Construction Agent hereby represents and warrants to Lessor that the
Construction Agent has heretofore delivered to Lessor a true, correct and
complete copy of the Plans and Specifications for the Building on the Land
described in Schedule 1 or, if not available on the date hereof, will deliver
such Plans and Specifications as soon as available.
2. Each of the Lessor and the Construction Agent acknowledges and
agrees that the development of the Land described in Schedule 1 and the
construction of the Buildings thereon shall be governed by the terms of the
Construction Agency Agreement.
3. The anticipated construction budget relating to the construction and
development of the Building on the Land described in Schedule 1 is $__________.
The acquisition cost of the Land described in Schedule 1 is $___________.
4. This Supplement shall, upon its execution and delivery, constitute
a part of the Construction Agency Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
RUBY TUESDAY, INC.
By
Name:
Title:
ATLANTIC FINANCIAL GROUP, LTD.
By: Atlantic Financial Managers, Inc., its General Partner
By
Name:
Title:
