MASTER AGREEMENT
THIS MASTER AGREEMENT (this "Agreement") is entered into effective as of
August 4, 2000 (the "Effective Date"), among LASALLE BANK NATIONAL ASSOCIATION,
f/k/a LaSalle National Bank, Trustee for the registered holders of FFCA Secured
Franchise Loan Trust 1999-2 Secured Franchise Loan-Backed Bonds pursuant to that
certain Indenture dated as of September 1, 1999 ("Mortgagee"), FFCA ACQUISITION
CORPORATION, a Delaware corporation ("FFCA"), PRECISION AUTO CARE HOLDINGS, LLC,
a Delaware limited liability company ("Precision Holdings") and PRECISION AUTO
CARE, INC., a Virginia corporation ("PAC").
PRELIMINARY STATEMENTS
FFCA made certain mortgage loans to PAC described on the attached Schedule
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I (collectively, the "Loans"), which Loans are evidenced by separate promissory
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notes (collectively, the "Notes") and which are secured by first priority liens
on and security interests in certain real property and fixtures (collectively,
the "Premises") pursuant to deeds of trust or mortgages, as applicable
(collectively, the "Mortgages").
The Notes, Mortgages, and other agreements, instruments and documents
executed by PAC for the benefit of FFCA in connection with the Loans are
referred to collectively as the "Loan Documents." The obligations of PAC under
the Loan Documents are referred to collectively as the "Loan Obligations."
FFCA assigned the Loans and the corresponding Loan Documents securing such
Loans, to Mortgagee.
PAC is in default of its obligations under each of the Mortgages and PAC
has no defenses, off-sets or counterclaims with respect to such defaults.
Pursuant to the Mortgages and applicable law, Mortgagee has the right to
foreclose (the "Foreclosure") the liens created and evidenced by the Mortgages.
PAC acknowledges and agrees that the Foreclosure would foreclose all of its
interests in the Premises.
PAC has requested that Mortgagee waive its rights and remedies in
connection with the known defaults existing under the Loan Documents. Mortgagee
has agreed to waive its rights and remedies in connection with the following
known existing defaults (the "Waiver"): (1) PAC's failure to pay, as the same
became due and payable, real and personal property taxes assessed against the
Premises and the personal property located thereon and (2) PAC's violation of
the Fixed Charge Coverage Ratio covenant set forth in the Loan Documents
(collectively, the "Known Defaults"). In connection with the Waiver, as set
forth in this Agreement, Mortgagee has agreed to make certain significant and
valuable concessions to PAC. PAC has also agreed to make certain valuable
concessions separately to Mortgagee in consideration for the Waiver.
Specifically, without limitation, through this Agreement:
A. PAC and Precision Holdings, in consideration for the Waiver, have
agreed that: (i) PAC shall sell the properties identified on the attached
Schedule II (the "Denver Premises") along with all machinery, appliances,
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equipment and other tangible personal property (the "Personalty") located at the
Denver Premises, to Xxxxx Property Holdings, LLLP, a Colorado limited liability
limited partnership ("Xxxxx"), or to Xxxxx'x permitted successors and/or
assigns, and apply the proceeds of such sale as described below, (ii) PAC shall
enter into a sale-leaseback agreement and Master Lease with Precision Holdings
in form and substance satisfactory to Mortgagee (the "Master Lease") regarding
the properties identified on the attached Schedule III (the "Operating
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Premises"), along with all Personalty located at the Operating Premises; and
(iii) Precision Holdings shall assume all debts, liabilities and obligations of
PAC arising and accruing under the Loan Documents corresponding to the Operating
Premises pursuant to an assignment and assumption agreement in form and
substance satisfactory to Mortgagee.
B. Mortgagee, in consideration for (i) PAC's agreement to convey,
transfer and assign all of its right, title and interest in the Denver Premises
and all Personalty located at such Denver Premises to Xxxxx, (ii) PAC's
agreement to convey, transfer and assign all of its right, title and interest in
the Operating Premises and all Personalty located at such Operating Premises to
Precision Holdings, and (iii) Precision Holdings' agreement to
assume all debts, liabilities and obligations of PAC under the Loan Documents
corresponding to the Operating Premises, has, except as otherwise provided in
this Agreement, agreed to (i) release PAC from its obligation to perform under
the Loan Documents corresponding to the Premises, (ii) reduce the applicable
prepayment premium due under the Notes for a period of 90 days from the
Effective Date and (iii) waive its rights and remedies as to the Known Defaults.
Notwithstanding the foregoing, nothing in this Agreement shall be construed,
considered or adjudged to be a waiver by FFCA and/or Mortgagee of any rights or
remedies either may have under the Loan Documents as to any existing, but
unknown, defaults or future defaults.
For good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties agree as follows:
AGREEMENT
Section 1. Transactions; Conditions Precedent. (a) PAC, Precision
Holdings and Mortgagee agree to take such actions as may be reasonably required
to cause the following transactions to occur on or before the Effective Date
(the "Transactions"); provided, however, the obligation of Mortgagee to take
such actions is subject to the satisfaction of the conditions precedent set
forth in Section 1(b) below:
(i) Conveyance of Denver Premises and Related Personalty to
Xxxxx; Release of PAC. PAC shall convey each of the Denver Premises listed
on the attached Schedule II to Xxxxx and PAC shall convey the Personalty
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located at each Denver Premises to Xxxxx pursuant to the terms and
conditions of the Purchase Agreement between PAC and Xxxxx dated June 29,
2000, as amended by the First Amendment to Purchase Agreement dated July
21, 2000, and by the Second Amendment to Purchase Agreement dated July 27,
2000, attached to this Agreement as Exhibit A. Pursuant to this Agreement
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and as a condition of such sale:
(W) PAC agrees that proceeds from the sale of the Denver
Premises and Personalty to Xxxxx in the amount of $3,687,264.94 will
be withheld by Lawyers Title Insurance Corporation, as escrow agent,
and disbursed to Mortgagee to discharge PAC's Loan Obligations
applicable to the Denver Premises. Upon such disbursement to
Mortgagee, Mortgagee and FFCA will release and discharge PAC from all
liabilities and obligations of PAC arising and accruing under the Loan
Documents corresponding to the Denver Premises, except for such
liabilities or obligations that specifically survive the repayment of
the Loans under the Environmental Indemnity Agreement or other
indemnity provisions of the Loan Documents.
(X) PAC further agrees that proceeds from the sale of the Denver
Premises and Personalty to Xxxxx in the amount of $695,314,76 will be
withheld by Lawyers Title Insurance Corporation, as escrow agent, and
disbursed to Mortgagee to discharge PAC's Loan Obligations applicable
to the Operating Premises located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, (the "Stratford Operating Premises")
and the Operating Premises located at 3940 North High School Road,
Indianapolis, Xxxxxx County, Indiana (the "North Indianapolis
Operating Premises"). Upon such disbursement to Mortgagee, Mortgagee
will release and discharge PAC from all liabilities and obligations of
PAC arising and accruing under the Notes corresponding to the
Stratford Operating Premises and the North Indianapolis Operating
Premises. All other Loan Obligations of PAC arising and accruing
under the Loan Documents corresponding to the Stratford Operating
Premises and the North Indianapolis Operating Premises and all liens
described in the Loan Documents corresponding to the Stratford
Operating Premises and the North Indianapolis Operating Premises shall
remain in full force and effect.
(Y) PAC additionally and further agrees that proceeds from the
sale of the Denver Premises and Personalty to Xxxxx in the amount of
$121,955.19 will be withheld by Lawyers Title Insurance Corporation,
as escrow agent, and disbursed to Mortgagee to partially discharge
PAC's Loan Obligations applicable to the Operating Premises located at
0000 Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx (the "Lawrence
Operating Premises"). Upon such disbursement to Mortgagee, Mortgagee
and PAC will amend and restate the Note corresponding to the Xxxxxxxx
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Operating Premises pursuant to an Amended and Restated Promissory Note
in the form attached to this Agreement as Exhibit B.
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(Z) All other Loan Obligations of PAC arising and accruing under
the Loan Documents corresponding to the Operating Premises shall
remain in full force and effect, except as set forth in subparagraph
(X) above.
(ii) Conveyance of Operating Premises and Related Personalty to
Precision Holdings. PAC shall convey each of the Operating Premises listed
on the attached Schedule III to Precision Holdings pursuant to special or
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limited warranty deeds in form and substance reasonably satisfactory to
Mortgagee, and PAC shall convey the Personalty located at each Operating
Premises to Precision Holdings pursuant to bills of sale in form and
substance reasonably satisfactory to Mortgagee. Simultaneously with such
conveyances:
(X) Precision Holdings shall assume all of PAC's Loan
Obligations under the Loan Documents corresponding to the Operating
Premises pursuant to an assignment, assumption, release and consent
agreement in the form attached to this Agreement as Exhibit C (the
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"Assignment and Assumption").
(Y) Precision Holdings shall lease each Operating Premises
and the Personalty located at such Operating Premises to PAC pursuant
to a Master Lease in the form attached to this Agreement as Exhibit D
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(the "Master Lease");
(Z) Precision Holdings and PAC shall execute and deliver a
memorandum or notice of lease, as applicable, for each Operating
Premises substantially in the form attached to this Agreement as
Exhibit E (the "Memorandum").
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PAC shall be responsible for the payment of real and personal property
taxes for the Operating Premises accruing prior to the Effective Date in
the amount of $91,746.70. PAC shall additionally be obligated to pay to
Mortgagee the August 1, 2000 payment of principal and interest due under
the Notes corresponding to the Operating Premises.
(b) Mortgagee and FFCA consent to the Transactions, subject to the
execution and delivery by PAC and Precision Holdings, on or before the date of
the execution of this Agreement, of the documents to which they are a party as
contemplated by the preceding subsection (a) and the satisfaction, on or before
the date of the execution of this Agreement, of each of the following conditions
precedent:
(i) Confirmation. To the extent required, Mortgagee or FFCA
shall have received the confirmation of the rating agencies which assigned
ratings to the securitization of the Loans that such ratings will not be
downgraded, modified or withdrawn as a result of the consummation of the
Transactions;
(ii) Endorsements. Mortgagee or FFCA, as applicable shall have
received endorsements to each of the loan policies of title insurance
issued with respect to the Loans corresponding to the Operating Premises,
which endorsements shall date down the effective date of each such policy
through the Effective Date and insure the continued first priority of the
liens granted in favor of FFCA or Mortgagee, as applicable, pursuant to the
corresponding Loan Documents without exception for any matters not shown in
such policies at the time of the granting of the applicable Mortgages;
(iii) UCC Searches. FFCA or Mortgagee shall have received UCC
search results reasonably satisfactory to them evidencing the continued first
priority of the liens in favor of FFCA and Mortgagee in certain personal
property pursuant to the Loan Documents corresponding to the Operating Premises;
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(iv) Representations and Warranties. The representations and
warranties of PAC and Precision Holdings contained in this Agreement and
any document or instrument expressly contemplated in this Agreement shall
be true and correct in all respects as of the Effective Date;
(v) Additional Documents. FFCA and Mortgagee shall have received
from, or on behalf of, the other parties to this Agreement, such other
documents and instruments as FFCA and Mortgagee shall reasonably require,
including, without limitation, legal opinions, all in form and substance
reasonably satisfactory to FFCA and Mortgagee.
(c) Immediately after the consummation of the Transactions, FFCA and/or
Mortgagee, as applicable, shall release the liens created by the Mortgages
corresponding to the Denver Premises, including, without limitation, the
termination of all UCC-1 Financing Statements filed with respect to the Denver
Premises. Except as otherwise provided for in this Agreement, including, without
limitation, the provisions of Section 6 of this Agreement, FFCA and Mortgagee
release and discharge PAC from all liabilities and obligations of PAC (i)
arising or accruing under the Loan Documents evidencing the Loans corresponding
to the Denver Premises subsequent to the Effective Date, except for such
liabilities and obligations that specifically survive the repayment of the Loans
under the Environmental Indemnity Agreement or other indemnity provisions of the
Loan Documents and (ii) with respect to the Known Defaults.
(d) The documents required to be executed by the parties pursuant to the
terms of this Agreement are hereinafter referred to as the "Operative
Documents."
Section 2. Escrow Agent. On or prior to the date of the execution of this
Agreement, the parties hereto shall deposit with Lawyers Title Insurance
Corporation ("Escrow Agent") all documents and moneys necessary to comply with
their obligations under this Agreement. Escrow Agent shall not cause the
delivery of the Operative Documents unless and until it has received written
instructions from FFCA, Mortgagee, PAC and Precision Holdings to do so. FFCA,
Mortgagee, PAC and Precision Holdings hereby engage Escrow Agent to act as
escrow agent in connection with the documents to be delivered pursuant to this
Agreement. FFCA, Mortgagee, PAC and Precision Holdings will deliver to Escrow
Agent all documents, pay to Escrow Agent all sums and do or cause to be done all
other things necessary or required by this Agreement, in the reasonable judgment
of Escrow Agent, to enable Escrow Agent to comply herewith and to enable any
title insurance policy and/or endorsements provided for herein to be issued.
Escrow Agent is authorized, in the event any conflicting demand is made upon it
concerning these instructions or the escrow, at its election, to hold any
documents and/or funds deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of FFCA, Mortgagee, PAC
and Precision Holdings or to interplead such documents and/or funds in an action
brought in any such court. Deposit by Escrow Agent of such documents and funds,
after deducting therefrom its charges and its expenses and attorneys' fees
incurred in connection with any such court action, shall relieve Escrow Agent of
all further liability and responsibility for such documents and funds. Escrow
Agent's receipt of this Agreement and opening of an escrow pursuant to this
Agreement shall be deemed to constitute conclusive evidence of Escrow Agent's
agreement to be bound by the terms and conditions of this Agreement pertaining
to Escrow Agent. Disbursement of any funds shall be made by check, certified
check or wire transfer, as directed by FFCA, Mortgagee, PAC and Precision
Holdings. Escrow Agent shall be under no obligation to disburse any funds
represented by check or draft, and no check or draft shall be payment to Escrow
Agent in compliance with any of the requirements hereof, until it is advised by
the bank in which such check or draft is deposited that such check or draft has
been honored. Escrow Agent is authorized to act upon any statement furnished by
the holder or payee, or a collection agent for the holder or payee, of any lien
on or charge or assessment in connection with the Properties, concerning the
amount of such charge or assessment or the amount secured by such lien without
liability or responsibility for the accuracy of such statement.
Section 3. Representations and Warranties of FFCA and Mortgagee. Each of
FFCA and Mortgagee represents and warrants to the other parties hereto that:
(a) it is a corporation or national association duly organized,
validly existing and in good standing under the laws of its jurisdiction of
formation, with all corporate power and authority necessary to own, lease
and operate its properties and carry on its business as now conducted and
to execute, deliver and perform this Agreement and the Operative Documents
to which it is a party;
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(b) all necessary corporate action has been taken on its part to
authorize the execution, delivery and performance of this Agreement and the
Operative Documents to which it is a party, and this Agreement has been
duly executed and delivered by it;
(c) the authorization, execution, delivery and performance of this
Agreement and the Operative Documents to which it is a party will not
result in any breach or default under any other document, instrument or
agreement to which it is a party or by which it is subject or bound; and
(d) this Agreement and, upon execution, the Operative Documents to
which it is a party constitute its legal, valid and binding obligations
enforceable against it in accordance with its terms.
All representations and warranties of FFCA and Mortgagee in this Agreement
and the Operative Documents to which they are a party shall survive the
execution and delivery of this Agreement and such Operative Documents.
Section 4. Representations and Warranties of PAC. PAC represents and
warrants to FFCA and Mortgagee as follows:
(a) it is a corporation, duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, with all power
and authority necessary to own, lease and operate its properties and carry
on its business as now conducted and execute, deliver and perform this
Agreement and the Operative Documents to which it is a party;
(b) all necessary organizational action has been taken by it to
authorize the execution, delivery and performance of this Agreement and the
Operative Documents to which it is a party and this Agreement has been duly
executed and delivered by it;
(c) there are no suits, actions, proceedings or investigations
pending or, to the best of its knowledge, threatened against or involving
it before any court, arbitrator or administrative or governmental body
which might reasonably result in a material adverse change in the
contemplated business, condition, worth or operations of PAC;
(d) the authorization, execution, delivery and performance of this
Agreement and the Operative Documents to which it is a party will not
result in any breach or default under any other document, instrument or
agreement to which it is a party or by which it is subject or bound;
(e) the authorization, execution, delivery and performance of this
Agreement and the Operative Documents to which it is a party will not
violate any applicable law, statute, regulation, rule, ordinance, code or
order;
(f) this Agreement and, upon execution, the Operative Documents to
which it is a party constitute the legal, valid and binding obligation of
such entity, enforceable against such entity in accordance with its terms;
(g) no consent, license, permit, approval or authorization of any
person, entity or governmental authority, is required in connection with
its execution, delivery or performance of this Agreement and the Operative
Documents to which it is a party and the consummation of the Transactions,
except for the consent of First Union National Bank, which consent PAC
obtained on or prior to the Effective Date; and
(h) each of PAC and the officer signing below in his capacity as an
officer of PAC certify that to the best of their knowledge, information and
belief, the aggregate fair market value of the Premises is not greater than
the aggregate amount owing under the Notes.
All representations and warranties of PAC made in this Agreement and the
Operative Documents to which it is a party shall survive the execution and
delivery of this Agreement and such Operative Documents.
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Section 5. Representations and Warranties of Precision Holdings.
Precision Holdings represents and warrants to FFCA and Mortgagee as follows:
(a) it is a limited liability company, duly formed, validly existing
and in good standing under the laws of its jurisdiction of formation, with
all power and authority necessary to own, lease and operate its properties
and carry on its business as now conducted and execute, deliver and perform
this Agreement and the Operative Documents to which it is a party;
(b) all necessary organizational action has been taken by it to
authorize the execution, delivery and performance of this Agreement and the
Operative Documents to which it is a party and this Agreement has been duly
executed and delivered by it;
(c) there are no suits, actions, proceedings or investigations
pending or, to the best of its knowledge, threatened against or involving
it before any court, arbitrator or administrative or governmental body
which might reasonably result in a material adverse change in the
contemplated business, condition, worth or operations of Precision
Holdings;
(d) the authorization, execution, delivery and performance of this
Agreement and the Operative Documents to which it is a party will not
result in any breach or default under any other document, instrument or
agreement to which it is a party or by which it is subject or bound;
(e) the authorization, execution, delivery and performance of this
Agreement and the Operative Documents to which it is a party will not
violate any applicable law, statute, regulation, rule, ordinance, code or
order;
(f) this Agreement and, upon execution, the Operative Documents to
which it is a party constitute the legal, valid and binding obligation of
such entity, enforceable against such entity in accordance with its terms;
and
(g) no consent, license, permit, approval or authorization of any
person, entity or governmental authority, is required in connection with
its execution, delivery or performance of this Agreement and the Operative
Documents to which it is a party and the consummation of the Transactions.
All representations and warranties of Precision Holdings made in this
Agreement and the Operative Documents to which it is a party shall survive the
execution and delivery of this Agreement and such Operative Documents.
Section 6. Rescission. In the event that:
(a) any of the Transactions, including, without limitation, any
transfer or conveyance made pursuant to this Agreement or the Master Lease,
is:
(i) rendered void, set aside or rescinded by operation of
law or by order of any state or federal court of competent
jurisdiction, or
(ii) recharacterized by order of any state or federal
court of competent jurisdiction, or
(b) the Master Lease is rejected or deemed rejected by order of any
federal court of competent jurisdiction or passage of time or is the
subject of a motion for rejection filed by PAC in any federal court of
competent jurisdiction, or
(c) Precision Holdings is the subject of a motion, complaint or order
of substantive consolidation with PAC in any receivership, bankruptcy or
similar proceeding,
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(each, an "Avoidance Action"), then all agreements to waive any rights or
remedies, reduce the applicable prepayment premium, release claims, waive
defaults or consent to actions in violation of the Loan Documents effected under
this Agreement shall be rescinded unless FFCA and Mortgagee, in their sole
discretion, elect in writing to permit such forbearance agreements, claim
releases, default waivers and/or consents to survive notwithstanding the
Avoidance Action.
Section 7. Closing Costs. All costs and expenses of the Transactions
shall be paid by FFCA and Mortgagee (other than the attorneys' fees and expenses
of PAC and Precision Holdings, which shall be paid by PAC and Precision
Holdings), including, without limitation, the attorneys' fees and expenses of
FFCA and Mortgagee, transfer and mortgage taxes, recording and filing fees,
title insurance premiums and escrow fees, whether or not the Transactions are
consummated; provided, however, PAC and Precision Holdings acknowledge and agree
that a portion of the proceeds of the sale of the Denver Premises in the amount
of $43,284.38 shall be retained by FFCA and Mortgagee to be applied toward the
payment of such costs and expenses.
Section 8. Conveyance of Operating Premises to Third-Parties. Following
the consummation of the Transactions, Precision Holdings agrees to negotiate in
good faith to sell the Operating Premises to third-party purchasers and to use
reasonable efforts to consummate such sales prior to February 1, 2001.
Precision Holdings agrees that such sales shall be made subject to the condition
that the Note and all other Loan Obligations corresponding to any Operating
Premises that is sold shall be paid and discharged in full by Precision
Holdings. Precision Holdings agrees to execute such documents, and to take such
actions, as may be reasonably required by FFCA and Mortgagee to consummate such
conveyances. FFCA and Mortgagee agree that, on or before the second business
day prior to the date of closing designated by Precision Holdings for any
conveyance of one or more Operating Premises, they will deliver to the title
company designated by Precision Holdings a payoff letter which will contain a
firm commitment to release all Mortgages, Notes and personal property security
interests covering the Operating Premises to be conveyed (the "Marketed
Premises") upon (i) receipt of the net proceeds of any such conveyance and (ii)
the satisfaction and discharge in full of all Loan Obligations corresponding to
the Marketed Premises. Notwithstanding the foregoing, neither FFCA nor
Mortgagee shall have any obligation to release a Mortgage, Note or personal
property security interest that serves as cross-collateral for the Marketed
Premises. Upon receipt of the net proceeds of any such conveyance and upon the
satisfaction and discharge in full of all Loan Obligations corresponding to the
Marketed Premises, FFCA and Mortgagee will deliver executed releases of all
Mortgages, Notes and personal property security interests principally
corresponding to the Marketed Premises to the title company designated by
Precision Holdings. In the event the net proceeds of any such conveyance exceed
the amount necessary to satisfy and discharge in full all Loan Obligations
corresponding to the Marketed Premises, the balance of said proceeds shall be
applied toward the Loan Obligations of the remaining Operating Premises as FFCA
and Mortgagee, in their sole discretion, shall determine. As used in this
Section 8, the term "net proceeds" shall mean the total proceeds from the sale
of the Marketed Premises less closing costs of a similar nature as agreed upon
in connection with the sale of the Denver Premises and personalty associated
therewith.
In the event any such sale of one or more Operating Premises is consummated
within 90 days of the Effective Date of this Agreement, notwithstanding any
provision to the contrary in the Note corresponding to such Operating Premises,
Precision Holdings shall pay, in addition to the then outstanding principal
balance and accrued interest due under each such Note, a prepayment premium
equal to 4.75% of the then outstanding principal balance and accrued interest of
each such Note in lieu of the prepayment premium presently provided for therein.
In the event an Operating Premises is sold more than 90 days after the Effective
Date of this Agreement, the prepayment provisions in the Note corresponding to
such Operating Premises shall control.
Section 9. Indemnity. (a) PAC agrees to indemnify, hold harmless and
defend FFCA, Mortgagee, Precision Holdings and their respective directors,
officers, shareholders, members, employees, successors, assigns, agents,
beneficiaries and affiliates, as applicable, for, from and against any and all
losses, costs, claims, liabilities, damages and expenses, including, without
limitation, reasonable attorneys' fees and court costs, incurred by such
indemnified parties and arising as the result of the Transactions (collectively,
"Losses"), the actions of FFCA, Mortgagee and Precision Holdings pursuant to
this Agreement, the enforcement by FFCA or Mortgagee of their rights under this
Agreement, and/or a breach of any of the representations, warranties, covenants,
agreements or obligations of PAC set forth in this Agreement or any other
Operative Document (excluding Losses suffered by any such indemnified party
arising out of such indemnified party's gross negligence or willful misconduct).
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(b) Precision Holdings agrees to indemnify, hold harmless and defend FFCA,
Mortgagee, PAC and their respective directors, officers, shareholders,
employees, successors, assigns, agents, beneficiaries and affiliates, as
applicable, for, from and against any and all Losses incurred by such
indemnified parties and arising as the result of the Transactions, the actions
of FFCA, Mortgagee and PAC pursuant to this Agreement, the enforcement by FFCA
or Mortgagee of their rights under this Agreement, and/or a breach of any of the
representations, warranties, covenants, agreements or obligations of Precision
Holdings set forth in this Agreement or any other Operative Document (excluding
Losses suffered by any such indemnified party arising out of such indemnified
party's gross negligence or willful misconduct).
Section 10. Default. A breach or default by PAC or Precision Holdings in
their respective obligations under this Agreement shall be a default under each
of the Loan Documents.
Section 11. Miscellaneous.
(a) Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this
Agreement shall be in writing and given by (i) hand delivery, (ii)
facsimile, (iii) express overnight delivery service or (iv) certified or
registered mail, return receipt requested, and shall be deemed to have been
delivered upon (a) receipt, if hand delivered, (b) transmission, if
delivered by facsimile, (c) the next business day, if delivered by express
overnight delivery service, or (d) the third business day following the day
of deposit of such notice with the United States Postal Service, if sent by
certified or registered mail, return receipt requested. Notices shall be
provided to the parties and addresses (or facsimile numbers, as applicable)
specified below:
If to PAC: Xx. Xxxxxxx Xxxxxx
Chief Executive Officer and President
Precision Auto Care, Inc.
000 Xxxxxx Xxxxx, XX
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Precision Holdings: Precision Auto Care Holdings, LLC
000 Xxxxxx Xxxxx, XX
Xxxxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Mortgagee
or FFCA: Xxxxxx X. Xxxxx, Esq.
Executive Vice President, General Counsel and
Secretary
Franchise Finance Corporation of America
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above.
(b) Severability. The provisions of this Agreement shall be deemed
severable. If any part of this Agreement shall be held unenforceable, the
remainder shall remain in full force and effect, and such unenforceable
provision shall be reformed by such court so as to give maximum legal
effect to the intention of the parties as expressed therein.
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(c) Further Assurances. Each of the parties agrees to sign such other
and further documents, and to take such other actions, as may be reasonably
appropriate to carry out the intentions expressed in this Agreement.
(d) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
(e) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their successors and permitted assigns,
including, without limitation, any United States trustee, any debtor-in-
possession or any trustee appointed from a private panel.
(f) No Brokers. FFCA, Mortgagee, PAC and Precision Holdings warrant
and represent to each other that they have not employed or retained the
services of any broker, finder or other intermediary in connection with the
Transactions, other than Xxxxxxx X. Xxxxxx of MJS Properties, Inc., and
FFCA, Mortgagee, PAC and Precision Holdings, as applicable, agree to
indemnify and hold each other harmless from and against a breach of such
warranty and representation.
(g) Forum Selection; Jurisdiction; Venue; Choice of Law. PAC and
Precision Holdings acknowledge that this Agreement was substantially
negotiated in the State of Arizona, this Agreement was delivered in the
State of Arizona, all payments under the Loan Documents are being delivered
in the State of Arizona and there are substantial contacts between the
parties and the transactions contemplated herein and the State of Arizona.
For purposes of any action or proceeding arising out of this Agreement, the
parties hereto expressly submit to the jurisdiction of all federal and
state courts located in the State of Arizona. Each of PAC and Precision
Holdings consents that it may be served with any process or paper by
registered mail or by personal service within or without the State of
Arizona in accordance with applicable law. Furthermore, each of PAC and
Precision Holdings waives and agrees not to assert in any such action, suit
or proceeding that it is not personally subject to the jurisdiction of such
courts, that the action, suit or proceeding is brought in an inconvenient
forum or that venue of the action, suit or proceeding is improper. This
Agreement shall be governed by the internal laws of the State of Arizona
without regard to its principles of conflicts of law.
(h) Waiver of Jury Trial and Punitive, Consequential, Special and
Indirect Damages. FFCA, MORTGAGEE, PAC AND PRECISION HOLDINGS HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY
HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES
HERETO AGAINST ANY OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, THE RELATIONSHIP OF
FFCA, MORTGAGEE, PAC AND PRECISION HOLDINGS, AND/OR ANY CLAIM FOR INJURY OR
DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES
HERETO OF ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED
AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, PAC AND PRECISION
HOLDINGS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT
THEY MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES
FROM FFCA AND MORTGAGEE WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY PAC OR PRECISION
HOLDINGS AGAINST FFCA ACQUISITION OR SERVICER OR ANY SUCCESSORS OF FFCA OR
MORTGAGEE WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE
WAIVER BY PAC AND PRECISION HOLDINGS OF ANY RIGHT THEY MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED
BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
(i) Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, the Loan Documents and the other Operative Documents and
instruments referred to herein, constitute the entire agreement
9
among the parties with respect to the subject matter hereof and supersede
all prior agreements and understandings, both written and oral, of the
parties or any of them with respect to the subject matter hereof, if any.
This Agreement shall not constitute a waiver of any rights or remedies in
respect of the Loan Documents except as specifically provided herein, and,
except to the extent of the (1) modifications to the Loan Documents
specifically referenced in this Agreement, and (2) waivers and consents
expressly provided for in this Agreement, the Loan Documents are ratified
and reaffirmed in all respects and are and shall remain in full force and
effect.
(j) Additional Representations and Agreements. (i) The parties
represent and warrant to each other that they clearly understand the terms
and conditions of this Agreement and have each been advised by counsel of
their own selection with respect to the terms and conditions of this
Agreement and the Transactions.
(ii) The parties stipulate and agree not to challenge the
validity, enforceability or characterization of any of the
Transactions.
(iii) Precision Holdings and PAC acknowledge the receipt
of actual, adequate, new and contemporaneous consideration in
connection with entering into this Agreement and consummating the
Transactions.
(iv) The expressions of intent set forth in this
subsection are a material inducement to FFCA and Mortgagee entering
into this Agreement. Specifically, without limitation, it is the
intent of the parties that the conveyance of the Denver Premises from
PAC to Xxxxx and the conveyance of the Operating Premises from PAC to
Precision Holdings be an absolute conveyance in effect as well as
form, and the instruments of conveyance to be delivered at the time of
the consummation of the Transactions are not intended to serve or
operate as a mortgage, equitable mortgage, deed of trust, security
agreement, trust conveyance or financing or trust arrangement of any
kind, nor as a preference or fraudulent conveyance against any
creditors of PAC or Precision Holdings. After the execution and
delivery of the warranty deeds and bills of sale for the Denver
Premises and the Operating Premises described in Section 1 above, PAC
will not have any legal or equitable interest or any other claim or
interest in the Denver Premises or the Operating Premises other than
as set forth in the Master Lease. Furthermore, the parties intend for
the Master Lease to be a true lease and not a transaction creating a
financing lease, capital lease, equitable mortgage, mortgage, deed of
trust, security interest or other financing arrangement, and the
economic realities of the Master Lease are those of a true lease.
Notwithstanding the existence of the Master Lease, neither party shall
contest the validity, enforceability or characterization of the sale
and purchase of the Denver Premises or the Operating Premises pursuant
to this Agreement as an absolute conveyance, and the parties shall
support the intent expressed herein that the purchase of the Denver
Premises by Xxxxx and the Operating Premises by Precision Holdings
pursuant to this Agreement provides for an absolute conveyance and
does not create a joint venture, partnership, equitable mortgage,
trust, financing device or arrangement, security interest or the like,
if, and to the extent that, any challenge occurs. Nothing in this
Agreement shall operate to restrict the right of Precision Holdings to
convey one or more Operating Premises if the Loan Obligations
corresponding to such Operating Premises have been fully satisfied or
will be fully satisfied from the proceeds of the contemplated
conveyance.
(v) This Agreement and the consummation of the
Transactions shall not render PAC insolvent.
(vi) The parties acknowledge and agree that as a result
of entering into this Agreement and consummating the Transactions no
party shall receive more than they would if PAC were liquidated under
Chapter 7 of the Bankruptcy Code.
10
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as
of the date first above written.
LASALLE BANK NATIONAL ASSOCIATION, f/k/a LaSalle
National Bank, Trustee for the registered holders
of FFCA Secured Franchise Loan Trust 1999-2
Secured Franchise Loan-Backed Bonds pursuant to
that certain Indenture dated as of September 1,
1999
By: FRANCHISE FINANCE CORPORATION OF AMERICA,
a Delaware corporation, as Attorney-in-Fact
and Master Servicer pursuant to that certain
Servicing Agreement dated as of September 1,
1999
By /S/ Xxxx X. Xxxxxxx
-------------------
Name: Xxxx X. Xxxxxxx
Its Vice President
FFCA ACQUISITION CORPORATION,
a Delaware corporation
By /S/ Xxxx X. Xxxxxxx
Printed Name Xxxx X. Xxxxxxx
Its Vice President
PRECISION AUTO CARE, INC.,
a Virginia corporation
By /S/ Xxxxxxx X. Xxxxx
Printed Name Xxxxxxx X. Xxxxx
Its Vice President & Secretary
PRECISION AUTO CARE HOLDINGS, L.L.C., a
Delaware limited liability company
By PRECISION AUTO CARE, INC.,
a Virginia Corporation
its managing member
By /S/ Xxxxxxx X. Xxxxx
Printed Name Xxxxxxx X. Xxxxx
Its Vice President & Secretary
SCHEDULE I
THE LOANS
------------------------------------------------------------------------------------------------------------------------------------
FFCA N0 Contract No. Store/Unit No. Policy No. Loan Amount Property Address City, ST
------------------------------------------------------------------------------------------------------------------------------------
8000-8808 2445 6 82-03-148623 $ 450,000.00 0000 00xx Xxxxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8809 2446 9 82-03-181834 $ 600,000.00 0000 Xxxxx Xxxxxxx Xxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8810 2447 2 82-03-148622 $ 400,000.00 00000 Xxxx Xxxxxxxxx Xxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8811 2448 30 82-02-127640 $ 170,000.00 0000 Xxxx 00xx Xxxxxx Xxxxxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8812 2449 31 82-02-127639 $ 772,000.00 0000 Xxxxxxxxx Xxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8813 2450 1 82-03-150594 $ 550,000.00 0000 Xxxxx Xxxxx Xxxxxx Xxxxxxx Xxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8814 2451 16 82-02-557195 $ 205,000.00 0000 Xxxx Xxxxxxxxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8815 2452 4 82-03-148624 $ 425,000.00 0000 Xxxxxxxxx Xxxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8816 2453 36 82-02-557196 $ 500,000.00 000 Xxxxx Xxxxx Xxxxxx Xxxxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8817 2454 8 82-03-148621 $ 564,000.00 0000 Xxxxxx Xxxxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8818 2455 3 82-03-181836 $ 341,000.00 0000 Xxxxx Xxxxxxxx Xxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8819 2456 32 82-02-557197 $ 425,000.00 000 Xxxx 0xx Xxxxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8820 2457 33 82-02-557198 $ 125,000.00 0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8821 2458 34 82-02-557194 $ 217,000.00 0000 Xxxxx Xxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8823 2460 N/A 000-00-000000 $ 450,00.00 0000 Xxxxxx Xxxxxx Xxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8824 2461 7 82-03-148620 $ 282,000.00 0000 Xxxxx Xxxxxxxx Xxxxxxxxx Xxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8825 2462 40 82-02-127638 $ 233,000.00 0000 X. Xxxx Xxxxxx Xxxx Xxxxxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8826 2463 29 82-02-127637 $ 420,000.00 0000 X. Xxxxxxx Xxxxxx Xxxxxxxxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
8000-8827 2464 5 82-03-18137 $ 75,000.00 0000 Xxxxxxxx Xxxxxx Xxxxxx, XX
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
$7,204,000.00
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE II
THE DENVER PREMISES
FFCA No. Unit No. Address
8000-8808 6 8070 00/xx/ Xxxxxx; Xxxxxx, Xxxxxxxx
0000-0000 9 0000 Xxxxx Xxxxxxx Xxxx; Xxxxxx, Xxxxxxxx
0000-0000 2 00000 Xxxx Xxxxxxxxx; Xxxxxxxxx, Xxxxxxxx
0000-0000 1 0000 Xxxxx Xxxxx Xxxxxx; Xxxxxxx Xxxxxxx, Xxxxxxxx
*0000-0000 4 0000 Xxxxxxxxx Xxxxx; Xxxxxx, Xxxxxxxx
0000-0000 8 0000 Xxxxxx Xxxxxx; Xxxxxx, Xxxxxxxx
0000-0000 3 0000 Xxxxx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx
0000-0000 7 0000 Xxxxx Xxxxxxxx Xxxxxxxxx; Xxxxxxxx, Xxxxxxxx
0000-0000 5 0000 Xxxxxxxx Xxxxxx; Xxxxxx, Xxxxxxxx
* Ground Lease site. Xxxxx will assume all lease obligations of PAC under the
ground lease.
SCHEDULE III
THE OPERATING PREMISES
XXXX Xx. Xxxx Xx. Xxxxxxx
0000-0000 30 0000 Xxxx 00/xx/ Xxxxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 31 0000 Xxxxxxxxx Xxxx; Xxxxxxxx, Xxxxxxx
0000-0000 16 0000 Xxxx Xxxxxxxxxx; Xxxxxxxx, Xxxx
0000-0000 36 000 Xxxxx Xxxxx Xxxxxx; Xxxxxxxxxxx, Xxxx
0000-0000 32 000 Xxxx 0/xx/ Xxxxxx; Xxxxxxxx, Xxxx
0000-0000 33 0000 Xxxxx Xxxxxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 34 0000 Xxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 N/A 0000 Xxxxxx Xxxxxx; Xxxxxxxxx, Xxxxxxxxxxx
0000-0000 40 0000 X. Xxxx Xxxxxx Xxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 29 0000 X. Xxxxxxx Xxxxxx; Xxxxxxxxxxxx, Xxxxxxx
EXHIBIT A
PURCHASE AGREEMENT FIRST AMENDMENT TO PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT (this "Amendment") is made
as of July 21, 2000, by and between XXXXX PROPERTY HOLDING COMPANY, LLLP, a
Colorado limited liability partnership (the "Original Buyer"), XXXXX PROPERTY
HOLDINGS, LLLP, a Colorado limited liability limited partnership (the "New
Buyer"), and PRECISION AUTO CARE, INC., a Virginia corporation (the "Seller").
RECITALS
--------
WHEREAS, the Original Buyer and the Seller are parties to a Purchase
Agreement dated June 29, 2000, pursuant to which certain identified Real
Property and related personal property are to be sold by the Seller to the
Original Buyer;
WHEREAS, the Purchase Agreement provides that the Original Buyer may
assign all right, title and interest and obligations in and to the Purchase
Agreement to a party to which it is related by common ownership;
WHEREAS, the Original Buyer desires to assign and transfer to the New
Buyer all right, title and interest and obligations in and under the Purchase
Agreement, and the New Buyer desires to assume all right, title and interest and
obligations in and under the Purchase Agreement;
WHEREAS, the Original Buyer, the New Buyer and the Seller have agreed
to extend the Closing Date contemplated by the Purchase Agreement from July 21,
2000 to July 31, 2000; and
WHEREAS, the Original Buyer, the New Buyer and the Seller desire to
supplement certain Schedules attached to the executed Purchase Agreement.
AGREEMENTS
----------
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, the parties hereto, intending
to be legally bound, agree as follows:
1. Extension of Closing Date. For all purposes of the Purchase
-------------------------
Agreement, the Closing Date shall be extended from July 21, 2000 to July 31,
2000. Accordingly, the deadline for the Buyer to deliver the allocation of the
purchase price pursuant to Section 1.04 of the Purchase Agreement and to
complete Buyer's review of the title commitments, surveys, environmental studies
and other due diligence materials relating to the Real Property pursuant to
Section 6.02 of the Purchase Agreement is hereby extended from July 18, 2000 to
July 26, 2000.
2. Assignment and Assumption of Buyers Rights and Obligations under
----------------------------------------------------------------
the Purchase Agreement. The Original Buyer hereby assigns and transfers all
----------------------
right, title and interest and obligations in and under the Purchase Agreement to
the New Buyer. The New Buyer hereby
accepts the assumption of all right, title and interest and obligations in and
under the Purchase Agreement. The Seller hereby consents to the foregoing
assignment. The New Buyer shall hereafter constitute the Buyer for all purposes
of the Agreement.
3. Schedules. The attached Schedule 1.01 and Schedule 4.11, which
---------
were inadvertently omitted from the executed Purchase Agreement, are hereby
added as supplements to existing Schedule 1.01 and as Schedule 4.11 to the
Purchase Agreement, respectively.
4. All other Agreements remain in Full Force and Effect. All other
----------------------------------------------------
representations, warranties, covenants and agreements of the Buyer and the
Seller contained in the Purchase Agreement remain in full force and effect.
IN WITNESS WHEREOF, the parties have duly executed this Amendment as
of the day and year first above written.
SELLER:
PRECISION AUTO CARE, INC.
By: /S/ Xxxxxxx X. Xxxxxx
---------------------
Xxxxxxx X. Xxxxxx, President
ORIGINAL BUYER:
XXXXX PROPERTY HOLDING COMPANY, LLLP
By: /S/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx, General Partner
NEW BUYER:
XXXXX PROPERTY HOLDINGS, LLLP
By: /S/ Xxxx X. Xxxxx
-----------------
Xxxx X. Xxxxx, General Partner
-2-
Schedule 1.01
The Real Property referred to in the Purchase Agreement to which this
supplement to Schedule 1.01 is attached is located at the following addresses:
1. 0000 Xxxx 00/xx/ Xxxxxx
Xxxxxx, Xxxxxxxx 00000
2. 0000 X. Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
3. 00000 Xxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
4. 0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
5. 0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
6. 0000 Xxxxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
7. 0000 Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
8. 0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
9. 0000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
-3-
Schedule 4.11
Contracts
NONE
-4-
PURCHASE AGREEMENT
By and Between
PRECISION AUTO CARE, INC.,
as Seller,
and
XXXXX PROPERTY HOLDING COMPANY, LLLP,
as Buyer
Dated as of June 29, 2000
-5-
PURCHASE AGREEMENT
------------------
THIS PURCHASE AGREEMENT ("Agreement") is made as of June 29, 2000, by and
between XXXXX PROPERTY HOLDING COMPANY, LLLP, a Colorado limited liability
limited partnership ("Buyer"), and PRECISION AUTO CARE, INC., a Virginia
corporation ("Seller").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller operates a car wash business in the Denver metropolitan
area at nine locations wherein Seller either owns the fee title to the real
property or has a leasehold interest to occupy the real property;
WHEREAS, Seller desires to sell to Buyer and Buyer desires to purchase from
Seller the real property listed on Schedule 1.01 and specific tangible and
-------------
intangible assets used in or held for use in connection with the operation of
the nine car washes listed on Schedule 1.01 attached hereto (the "Business").
-------------
Because Seller does not own the fee title to the real property at the corner of
Leetsdale and Xxxxx location but, rather, a leasehold interest (the "Leetsdale
Lease"), Seller desires to assign to Buyer and Buyer desires to assume from
Seller the leasehold interest to the Leetsdale Lease; and
WHEREAS, Seller and Buyer desire to enter into this Agreement to effect the
purchase and sale of such real property and assets free and clear of all liens
and encumbrances pursuant to the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I.
PURCHASE AND SALE OF REAL PROPERTY AND ASSETS
Section 1.01. Purchase and Sale of Real Property and Assets on the Closing
------------------------------------------------------------
Date. Subject to the terms and conditions hereof, on the Closing Date (as
----
defined in Section 2.01(a) hereof), Seller shall (i) transfer, sell, convey and
deliver to Buyer those certain tracts of real property together with all
interests of Seller in any vacated streets or alleys adjacent thereto, all
easements and other appurtenances and benefits thereto, all improvements thereon
and all attached fixtures, more particularly described on Schedule 1.01 attached
-------------
hereto (collectively, the "Real Property"), which Real Property shall be free
and clear of all liens, liabilities, claims, mortgages, obligations, taxes,
assessments or other encumbrances of any kind or nature, except for use
restrictions imposed by zoning regulations, easements conveyed to public
utilities and access easements which do not materially affect the value of the
Real Property ("Liens"), and (ii) assign, transfer, sell, convey and deliver
-1-
to Buyer all of Seller's right, title and interest in and to specific tangible
and intangible assets of Seller necessary for the normal course of business
operation of the Business, as they shall exist on the Closing Date (the
"Purchased Assets"), free and clear of all Liens, including but not limited to
the following:
(a) the tangible and intangible personal property used by Seller
currently and customarily used in the course of the Business, including all
working inventory, tools, equipment, spare parts, vehicles, machinery, stock,
supplies, changer coinage and tokens, licenses of software currently used in the
operation of the Business, electronic copies of all documentation, checklists
and forms used in the operation of the business, and other items listed on
Schedule 1.01 (to be provided by Seller prior to the Closing Date) and attached
-------------
hereto;
(b) copies of all books, files, and records in Seller's possession
concerning the operation of the Business and all other files necessary to
conduct and operate the Business and copies of all title commitments and title
policies, surveys, engineering studies and reports, environmental studies and
reports and related documents in Seller's possession concerning the Real
Property;
(c) all rights and benefits of Seller in, to and under the Leetsdale
Lease; and
(d) all goodwill of the Seller related to the Business.
The Real Property together with the Purchased Assets shall be collectively
referred to as the "Property".
Section 1.02. Purchase Price. The Purchase Price shall consist of cash
--------------
paid by Buyer to Seller in the amount of $4,900,000.
Section 1.03. Manner of Payment.
-----------------
(a) Pursuant to the terms of the Xxxxxxx Money Escrow Agreement,
Buyer has deposited xxxxxxx money in the amount of $100,000 with the Title
Company (as defined in Section 6.01(c) hereof), to be held in trust in an
interest bearing account accruing to the benefit of Buyer and to be applied to
the Purchase Price on the Closing Date or returned to the Buyer in accordance
with this Agreement; and
(b) On the Closing Date, Buyer shall deliver to the Title Company, in
the form of a certified check, cashier's check or wire transfer, the sum of
$4,800,000 (the "Closing Payment"), subject to Section 1.06.
Section 1.04. Allocation of Purchase Price. The Purchase Price shall be
----------------------------
allocated, by Buyer, as set forth on Schedule 1.04, which shall be delivered to
-------------
Seller by Buyer, no later than July 18, 2000, and subject to Seller's approval,
which approval shall not be unreasonably withheld, delayed or conditioned. The
approved Schedule 1.04 shall be attached hereto in final form on the Closing
Date. The parties hereby agree that the
-2-
allocation of the Purchase Price shall be controlling for tax purposes and shall
be utilized in preparing Internal Revenue Service ("IRS") Form 8594.
Section 1.05. No Assumption of Liabilities. Buyer shall not assume or be
----------------------------
liable for or obligated to pay any debts, liabilities or obligations of any kind
related to Seller, the Business or the Property arising prior to the Closing
Date (collectively, "Seller's Liabilities"), including, without limitation, any:
(i) accounts payable or liabilities or obligations of any kind to creditors or
employees (including any obligations under any employment agreements, profit
sharing or other benefit plans) of Seller; (ii) any other liabilities or
obligations of Seller related to transactions or occurrences prior to the
Closing Date; or (iii) Liens or other existing or contingent obligations related
to the Real Property, Purchased Assets or to the Business, the liability for
which arose prior to the Closing Date. Seller shall be liable for any state,
transfer and other taxes (exclusive of transfer taxes related to the deed for
the Real Property) arising from the consummation of the transactions
contemplated herein.
Section 1.06. Escrow. At Closing, Seller shall deposit with the Title
------
Company, to hold in escrow ("Escrow"), the amount of $25,000 ("Escrowed Funds").
Such Escrowed Funds shall be used to satisfy any matters with respect to which
Seller has indemnified Buyer pursuant to the terms of this Agreement. If, and
in the event, after Closing, Buyer receives written notice of a claim sought
against Seller for any matters with respect to which Seller has indemnified
Buyer pursuant to the terms of this Agreement, Buyer shall promptly provide
Seller written notification of such a claim. Seller shall have a period of ten
(10) days to assume, discharge, or undertake in good faith the assumption or
discharge, including the commencement of an appropriate action to dispute the
validity of such claim. In the event Seller fails to so assume, discharge,
undertake or dispute the claim within the referenced time period, Buyer may
elect to satisfy the obligation with the Escrowed Funds. In the event Buyer
elects to so satisfy such a claim, Buyer shall provided written notification to
the Title Company directing the Title Company to directly pay such claim. This
Escrow has been created as an accommodation to Buyer, to facilitate the smooth
transition of the Purchased Assets, and is in no way meant to imply the
assumption of any liabilities by Buyer, the assumption of any obligation of
Seller to Buyer or by Buyer to satisfy trade payables arising out of the
operation of the Business prior to the Closing Date or the release of Seller's
obligations with respect to any and all of its debts and liabilities. Sixty
(60) days from the Closing Date, Buyer shall direct, in writing, the Title
Company to release the remaining balance, if any, of the Escrowed Funds to the
Seller.
ARTICLE II.
CLOSING
Section 2.01. Closing. The payment to Seller of the Purchase Price, the
-------
delivery of documents set forth in Section 2.02, and the sale of the Property to
Buyer, as contemplated herein (the "Closing"), shall take place at 10:00 a.m. on
July 21, 2000 at the offices of Hall & Xxxxx, L.L.C., 0000 00xx Xxxxxx, Xxxxx
0000, Xxxxxx Xxxxxxxx or such other place and date as may be agreed upon between
the parties (the "Closing Date").
-3-
Section 2.02. Deliveries on Closing Date.
----------------------------
(a) Seller's Obligations. On the Closing Date, Seller shall
--------------------
deliver to Buyer each of the following documents in form and substance
satisfactory to Buyer:
(1) one or more special warranty deeds conveying to Buyer
each of the properties comprising the Real Property, free and
clear of any and all Liens, in proper form for recording, duly
executed, witnessed and acknowledged, so as to convey to Buyer
the fee simple title to the Real Property;
(2) one or more bills of sale conveying to Buyer all of the
Purchased Assets, free and clear of all liens and encumbrances;
(3) one or more trademark/technology licensing agreement
for the use of the "Precision Wash" trademark and the wash
technology software currently used by Seller in connection with
the Business;
(4) DELETED
(5) a good standing certificate for Seller from the
Secretary of State of the Commonwealth of Virginia and a
certificate of qualification to do business for Seller from the
Secretary of State of the State of Colorado;
(6) an opinion of Seller's counsel in the form of Exhibit A
attached hereto;
(7) a certificate of the President of Seller that all of
the representations and warranties of Seller contained herein are
true and correct in all material respects as of the Closing Date
(except to the extent that any such representation or warranty
relates by its express terms solely to a prior date, in which
event such representation or warranty was true and correct as of
such date) and that Seller shall have, or have caused to be,
performed all covenants, agreements and conditions contained
herein to be performed and observed by Seller on or before the
Closing Date;
(8) a certificate of the Secretary of Seller certifying
resolutions duly adopted by Seller's Board of Directors and
shareholders authorizing the execution, delivery and performance
of this Agreement by Seller and certifying that such resolutions
are remain in full force and effect;
(9) copies of all files and records described in Section
1.01(b) hereof;
(10) a commitment for the issuance of the Title Policy (as
defined in Section 6.01(c) hereof);
(11) assignment and assumption agreement for the Leetsdale
Lease;
-4-
(12) obtain free and clear title to the property leased from
the Xxxxxx Leasing Company and the Young Electric Sign Company or
provide Buyer with a Purchase Price adjustment for the value of
the leased property; and
(13) such other documents, assignments, deeds, bills of
sale, instruments of conveyance, and certificates of officers as
reasonably may be required by Buyer or the Title Company to
consummate this Agreement and the transactions contemplated
herein.
(b) Buyer's Obligations. On the Closing Date, Buyer shall
-------------------
deliver to Seller each of the following documents in form and substance
satisfactory to Seller:
(1) a certificate executed by Buyer that all of the
representations and warranties of Buyer contained herein are true
and correct in all material respects as of the Closing Date
(except to the extent that any such representation or warranty
relates by its express terms solely to a prior date, in which
event such representation or warranty was true and correct as of
such date) and that Buyer shall have, or have caused to be,
performed all covenants, agreements and conditions contained
herein to be performed and observed by Buyer at or before the
Closing Date; and
(2) such other documents as reasonably may be required by
Seller to consummate this Agreement and the transactions
contemplated herein.
(c) Payments. On the Closing Date, Buyer shall pay to Seller the
--------
payments provided for in 1.03 hereof.
Section 2.03 Closing Costs.
-------------
(a) Seller shall pay:
(1) The costs of the owner's Title Policy, including the
costs of any endorsements to the title insurance policy necessary
to deliver extended coverage of title insurance;
(2) The costs, if any, of any survey and environmental
reports, previously obtained by Seller and to be provided to
Buyer prior to the Closing Date;
(3) The costs, if any, of curing title defects and
recording any curative title documents, if Seller has elected to
cure;
(4) The costs of satisfying any consensual liens made by
Seller on the Property;
-5-
(5) The consulting fee payable to Xxxxxxx X. Xxxxxx (including
any co-consulting fees payable by Xxxxxxx X. Xxxxxx to other
consultants) incurred in connection with the sale of the Property and
Business to Buyer, if and when this transaction closes, in accordance
with a separate agreement between Xxxxxxx X. Xxxxxx and Seller;
(6) One-half of the Title Company's escrow agent's fees;
(7) Seller's consultant and attorneys' fees relating to the sale
of the Property; and
(8) The costs of any transfer fees, loan prepayment fees or
penalties and document assignment expenses necessary to consummate the
transaction contemplated hereby.
(b) Buyer shall pay:
(1) The costs of Buyer's due diligence investigations;
(2) The costs of any supplemental survey(s) or environmental
site assessment(s) to be obtained by Buyer, if any;
(3) One-half of the Title Company's escrow agent's fees;
(4) The costs of the lender's Title Policy;
(5) Documentary fee relating to the deed(s);
(6) The costs of recording the deed(s);
(7) Transfer taxes on the deed(s), if any; and
(8) Buyer's attorneys' fees.
ARTICLE III.
COVENANTS
Section 3.01. Covenants of Seller.
--------------------
(a) Conduct of Business by Seller. Between the date hereof and the
-----------------------------
Closing Date, Seller agrees that it will (1) conduct the Business diligently, in
the ordinary course and in a prudent and businesslike manner, any extraordinary
transactions shall require Buyer's written consent; (2) use its best efforts to
preserve intact its present business organization, good will and advantageous
relationships with all persons having business dealings with Seller; (3) not
take any action that could reasonably be expected to adversely affect the
transaction contemplated
-6-
herein, or the Business; and (4) use its best efforts to preserve and maintain
in force all of its licenses, permits, registration, contracts and other similar
rights.
(b) Access to Information. Upon reasonable notice to Seller, Buyer
---------------------
shall have access, during normal business hours, to Seller's books, records, and
files related to the Business or the Property, and shall be furnished such
information related to the purchase as Buyer may reasonably request for purposes
incident to this Agreement; provided, however, that (1) such access shall not
unreasonably interfere with Seller's business operations; and (2) in the event
the transactions contemplated by this Agreement are not consummated for any
reason, Buyer shall promptly return to Seller any and all documents, theretofore
furnished by Seller to Buyer. To the extent not previously provided to Buyer,
as soon as practical following execution of this Agreement, Seller shall provide
to Buyer or give Buyer access to the following documentation:
(1) Copies of all documents of title to titled property,
including exceptions thereto, of any kind or description relating to
the Real Property, Purchased Assets and Business;
(2) Copies of all Permits and contracts;
(3) Such other documents as are deemed reasonably necessary by
Buyer to carry out its due diligence investigation prior to the
Closing Date.
Until the Closing Date, Buyer and its principals will retain all such
information regarding the Business in confidence, will not disclose such
information to any third party other than to authorized agents, attorneys,
accountants, Buyer's banks and other necessary parties without the prior written
permission of Seller, and will use such information only for the purposes of
completing the transactions contemplated by this Agreement. In addition, any
information regarding the Seller and its subsidiaries beyond the scope of the
Business being conveyed by Seller to Buyer, shall not be divulged or
communicated by Buyer or any of its principals to any other person.
(c) Consents and Approvals. Seller shall use its best efforts at its
----------------------
sole expense to acquire all consents and approvals identified as being required
on Schedule 4.03 attached hereto by reason of its execution, delivery and
-------------
performance of this Agreement.
(d) Prohibited Transactions. Between the date hereof and the Closing
-----------------------
Date, Seller agrees that it will not, without the prior written consent of
Buyer, (1) sell, transfer, lease, mortgage, pledge or otherwise encumber or
dispose of any of the Real Property or any of the Purchased Assets except in the
ordinary course of its business or as specifically contemplated herein; (2) make
any change in its articles of incorporation or bylaws; (3) liquidate or
dissolve; (4) merge or consolidate with or into any other corporation, or (5)
modify, amend, cancel or terminate any contracts relating to the Business.
(e) Tax Returns and Tax Clearances. Seller will prepare or cause to
------------------------------
be prepared all income, franchise, sales and other tax returns or reports
required by law and
-7-
promptly make all tax payments which are required through the Closing Date.
Seller will cooperate with Buyer's counsel in the submission of any required tax
clearance requests to the various state taxing authorities to which Seller is
subject and will cooperate with such authorities to facilitate the issuance of
all such required tax clearances.
(f) Non-Solicitation. So long as Buyer continues to use its best
----------------
efforts to conclude the transactions contemplated herein, neither Seller nor any
of its representatives or agents shall directly or indirectly solicit or engage
in discussions or negotiations with, or provide any non-public information to or
otherwise cooperate with, any other person or entity which seeks to acquire, or
expresses an interest in acquiring, all or any substantial part of the Business,
nor will Seller directly or indirectly enter into any agreement with or grant
any option to any third person or entity in connection with a transaction
inconsistent with Buyer's acquisition of the Business; provided, however, that
nothing herein will limit Seller's right to engage in any activity, including
the disposition of any asset, in the ordinary course of business consistent with
past practice.
(g) Non-Competition. Seller hereby covenants with Buyer for a period
---------------
of two (2) years from and after the Closing Date that Seller, shall not directly
or indirectly, own, manage, operate, join, control, engage or participate in the
ownership, management, conduct, operation or control of any corporation,
partnership or other business or enterprise ("entity") which operates a car wash
within a one mile radius of any of the nine car washes acquired as provided
herein. Buyer and Seller agree that the remedy at law for a breach of the
foregoing will be inadequate and that Buyer shall be entitled to the injunctive
relief restraining Seller or such entity from any breach or anticipated breach
hereof, which relief shall be cumulative to other remedies and relief ordinarily
available under such circumstances and shall not be construed as an exclusive
remedy or relief.
(h) Employees. Seller hereby covenants and agrees to make available
---------
the services of Xxxxxxx X. Klum, for a period of up to thirty (30) days, and at
no cost to Buyer, for purposes of ensuring a smooth transition of the Business.
In addition, in the event Buyer desires to hire Xxxxxxx X. Klum, or any other
employee of the Business, Seller hereby covenants and agrees to release Xxxxxxx
X. Klum or any other employee of the Business from any employment or non-
competition agreement the Company may currently have with Xxxxxxx X. Klum or any
other employee of the Business. Furthermore, Seller agrees not to interfere with
any negotiations Buyer may have with any employees of the Business, prior to the
Closing Date, related to continued employment with Buyer; however, Buyer agrees
not to solicit Xxxxxx Xxxxxxx for employment.
(h) Telephone Services. Seller hereby covenants and agrees, for a
------------------
period of sixty (60) days after the Closing Date, at no additional cost to
Buyer, to maintain all telephone lines currently used in connection with the
Business and to forward such lines to telephone numbers designated by Buyer.
Section 3.02. Mutual Covenants. Each of Buyer and Seller will use its
----------------
best efforts to (a) fulfill and satisfy or cause to be fulfilled and satisfied
all of the conditions required to be fulfilled and satisfied by Buyer or Seller,
respectively, at or prior
-8-
to the Closing Date, (b) perform or cause to be performed all of the matters
required of Buyer at or prior to the Closing Date, and (c) take such steps and
do such acts as may be necessary to make all of its representations and
warranties contained in this Agreement true and correct as of the Closing Date,
with the same effect as if the same had been made, and this Agreement had been
dated, as of such closing date.
-9-
ARTICLE IV.
SELLER'S REPRESENTATIONS AND WARRANTIES
As a material inducement for Buyer to enter into and perform its
obligations under this Agreement, Seller represents and warrants to Buyer as
follows:
Section 4.01. Corporate Authority. Seller is a corporation duly organized
-------------------
and validly existing and in good standing under the laws of the Commonwealth of
Virginia. Seller is duly qualified to transact business as a foreign corporation
in the State of Colorado. Seller has all requisite corporate power and authority
to own its properties and to conduct its businesses as currently conducted, and
to enter into and perform its obligations under this Agreement and all
agreements contemplated hereby. The execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Seller. This Agreement has been duly executed and delivered by Seller
and constitutes the valid and binding obligation of Seller enforceable in
accordance with its terms.
Section 4.02. No Adverse Proceedings. There are no court actions,
----------------------
arbitrations or regulatory proceedings pending or, to the best of Seller's
knowledge, threatened in which the transfer of the Property or the operation of
the Business is sought to be restrained in any way or by which the Business
would be adversely affected thereby.
Section 4.03. No Restrictions Against Performance. The execution and
-----------------------------------
delivery of this Agreement by Seller and the performance by Seller of the
transactions contemplated herein will not violate or conflict with, or
constitute a breach or default under, or result in the creation or imposition of
any Lien under, (a) the articles of incorporation or bylaws of Seller, (b) any
applicable statute, law, regulation or rule, or (c) any contract, instrument,
agreement, lease, mortgage, judgment, order, decree or other restriction to
which Seller is a party or by which Seller is bound, except that prior written
consent to the transaction contemplated herein, must be obtained from the
parties listed on the attached Schedule 4.03, Seller hereby agrees to use its
best efforts to obtain such consents. No filing with or approval or
authorization of any Governmental Authority is required for Seller to enter into
and to perform its obligations under this Agreement.
Section 4.04. Title; No Liens. Set forth on Schedule 1.01 attached hereto
--------------- -------------
is a true and complete list of all tangible personal property necessary to
operate the Business. Seller has good and marketable title to all the Property
and as of the Closing Date will own the Property to be transferred at such
closing free and clear of all Liens, rights of first refusal, restrictions or
other adverse legal or equitable interests of any kind or nature, except for use
restrictions imposed by zoning regulations and easements conveyed to public
utilities. All of the Real Property together with the Purchased Assets are in
good operating condition and repair with respect to industry standards and are
in compliance in all respects with all applicable laws, regulations, orders and
ordinances. None of the Property is subject to any pending or, to the best
-10-
of Seller's knowledge, threatened, adverse change, judicial or regulatory order,
ordinance or zoning restriction.
Section 4.05. Environmental Matters. Seller has used no Hazardous Material
---------------------
on the Real Property or in connection with the Purchased Assets in violation of
any Environmental Law nor has Seller knowingly permitted any other person to do
so and, further, Seller is not aware of the presence of any Hazardous Material
affecting the Real Property or the Purchased Assets in violation of any
Environmental Law. "Environmental Law" means any current legal requirement in
effect at the Closing Date pertaining to (a) the protection of health, safety,
and the indoor or outdoor environment, (b) the conservation, management,
protection or use of natural resources and wildlife, (c) the protection or use
of source water and groundwater, (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling of, or
exposure to, any Hazardous Material or (e) pollution (including any release to
air, land, surface water, and groundwater); and includes, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
USC 9601 et seq., Solid Waste Disposal Act, as amended by the Resource
Conservation Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
USC 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean
Water Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42
USC 7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49 USC App. 1801, Occupational Safety
and Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of
1990, 33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of
1986, 42 USC App. 11001 et seq., National Environmental Policy Act of 1969, 42
USC 4321 et seq., Safe Drinking Water Act of 1974, as amended by 42 USC 300(f)
et seq., and any similar, implementing or successor law, any amendment, rule,
regulation, order or directive, issued thereunder. "Hazardous Material" means
any hazardous or toxic substance as defined in or regulated by any Environmental
Law in effect at the pertinent date or dates.
Section 4.06. Personal Property. All tangible personal property comprising
-----------------
the Purchased Assets is usable or saleable in the ordinary course of business,
has been adequately maintained, is in good condition consistent with industry
standards, and is functionally adequate for its intended use.
Section 4.07. No Other Options. No person or entity other than Buyer has
----------------
any right or option to purchase Seller's interest in the Property or the
Business, except for Xxxxxxx X. Klum to whom the business must be re-offered if
the Closing Date does not occur before July 31, 2000. There is no other person
or entity that has any right, interest or option to the real property subject to
the Leetsdale Lease.
Section 4.08. Taxes. All federal, state and other tax returns and reports
-----
required to be filed in connection with the Property or the Business have been
duly filed by Seller and all taxes and other assessments and levies (including
all interest and penalties) including, without limitation, income, franchise,
real estate, sales, gross receipts, use and telecommunications excise and
service taxes and employee withholding taxes, owed in
-11-
connection with the Property or the operation of the Business have been paid by
Seller. Seller has not waived any statute of limitation with respect to any tax
or other assessment or levy applicable to Seller or the Property and all such
taxes and other assessments and levies which Seller is required by law to
withhold or to collect have been duly withheld and collected and have been paid
over to the proper Governmental Authorities or segregated and set aside for such
payment and, if so segregated and set aside, shall be so paid by Seller as
required by law. Neither the IRS nor any other taxing authority is now asserting
or, to the best of Seller's knowledge, is threatening to assert against Seller
any deficiency or claim for additional taxes or interest thereon or penalties in
connection therewith.
Section 4.09. No Misstatements or Omissions. None of the information or
-----------------------------
documents furnished or to be furnished by or on behalf of Seller to Buyer or to
any of Buyer's representatives pursuant to this Agreement, including all
Exhibits and Schedules hereto, is or will be false or misleading as to any
material fact or omits or will omit to state a material fact required to be
stated therein or necessary in order to make any of the statements made therein,
in light of the circumstances under which they were made, not misleading.
Section 4.10. Insurance. Seller maintains policies of fire, casualty,
---------
liability and other forms of insurance in such amounts and against such risks
and losses as are reasonable and adequate for the Property and the Business. All
of the Property is insured under such insurance policies in an amount not less
than the actual replacement value thereof against all risks usually insured
against by persons operating similar businesses.
Section 4.11. Contracts. Attached hereto as Schedule 4.11 is a true and
--------- -------------
complete list (or summaries in the case of oral agreements) of all agreements
related to the Business or the Property (other than contracts described on other
schedules to this Agreement). Each of such contracts has been entered into in
the ordinary course of business and is a valid and binding agreement of the
parties thereto enforceable against the parties thereto in accordance with its
terms. Neither Seller nor, to the best of Seller's knowledge, any other party to
any such contract is in default under the terms of any such contract, nor has
any event occurred, which, with the passage of time or giving of notice, would
constitute such a default of Seller or any such other party.
Section 4.12. Undisclosed Liabilities. There is no claim or liability of
-----------------------
any nature whatsoever, whether absolute, accrued, contingent or otherwise, which
could have an adverse effect upon the Property or the Business.
Section 4.13. Absence of Certain Changes. Since December 31, 1999, there
--------------------------
has not been (a) any adverse change in the Business; (b) any damage, destruction
or loss to any of the Property, whether or not covered by insurance, which
adversely affected or impaired, or which does or may adversely affect or impair
the Property or the Business; or (c) any other transaction, event or condition
of any character which has or may have an adverse effect upon the Property or
the operation of the Business after the Closing Date.
-12-
Section 4.14. No Violation. Seller has no knowledge of any facts or
------------
circumstances which would indicate that it is in default or violation of any of
the terms, conditions or provisions of any loan or mortgage affecting the
Property or Business, contract, the Leetsdale Lease, or order, rule or
regulation of any Governmental Authority having jurisdiction over the Property
or the Business, except for a cash flow coverage ratio default under the
Seller's loan agreement with FFCA Acquisition Corporation which will be cured by
the application of the proceeds of the sale of the Business on the Closing Date.
Section 4.15. Employees. Buyer has no obligation to employ or hire any
---------
person presently or formerly employed by Seller and Seller shall indemnify and
hold Buyer harmless from and against any and all claims whatsoever by any such
employee.
Section 4.16. Broker's Fees. Neither Seller nor anyone acting on its
-------------
behalf has retained any broker, finder or agent or agreed to pay any brokerage
fee, finder's fee or commission with respect to the transactions contemplated by
this Agreement, except for the consulting fee payable to Xxxxxxx X. Xxxxxx, by
Seller.
Section 4.17. Prepayments. Except for the "frequent wash program" and
-----------
"wash tokens," Seller has no customer prepayments for any undelivered and unused
goods or services as of the date of Closing or held on deposit by Seller for the
benefit of the Company's customers, whether by agreement or contract, oral or
written. In the event Seller has any customer prepayments for any undelivered
and unused goods or services as of the date of Closing, in excess of $250.00
related to the "frequent wash program" and "wash tokens," Seller hereby agrees
that Buyer may charge any amounts, in excess of $250.00, against the Escrow as
provided in Section 1.06; provided, however, that Buyer agrees that Seller shall
have no obligation to reimburse Buyer for customer prepayments in the form of
the "frequent wash program" and "wash tokens" beyond the expiration of the sixty
(60) day period after the Closing Date during which the Escrow will be
maintained. Buyer acknowledges that Buyer need not continue to honor the
"frequent wash program" or the "wash tokens" issued by Seller prior to the
Closing Date, and Seller is agreeing to reimburse Buyer for such expenses during
the sixty (60) day period after the Closing Date to facilitate the transition of
the Business.
Section 4.18. Permits. Seller has not been issued any licenses, permits,
-------
authorizations, certificates, approvals, variances, waivers or consents, or
applications for any of the foregoing by the United States, state or local
governmental entity or municipality or subdivision thereof or any authority,
department, commission, board, agency, court or instrumentality thereof
(collectively, the "Governmental Authorities") which are necessary for the
operation of the Business or otherwise effect the Purchased Assets or the Real
Property, except for boiler permits and inspection certificates.
Section 4.19. Financial Data. The financial data provided by Seller to
--------------
Buyer is true, complete and correct and has been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods indicated. The financial data fairly presents the financial condition
of the Business and assets and liabilities, whether accrued, absolute,
contingent or otherwise, as of the dates indicated and the results of operation
of Seller and for the Business, for the periods then ended.
-13-
ARTICLE V.
BUYER'S REPRESENTATIONS AND WARRANTIES
As a material inducement for Seller to enter into and perform its
obligations under this Agreement, Buyer represents and warrants to Seller as
follows:
Section 5.01. Authority. This Agreement has been duly executed and
---------
delivered by Buyer and constitutes the valid and binding obligation of Buyer
enforceable in accordance with its terms.
Section 5.02. No Adverse Proceedings. There are no court actions,
----------------------
arbitrations or regulatory proceedings pending or, to the best of Buyer's
knowledge, threatened in which Buyer's acquisition of the Property is or is
likely to be contested; in which the transfer of the Property is sought to be
restrained in any way; or which otherwise affects or could affect Buyer's
performance under this Agreement.
Section 5.03. No Restrictions Against Performance. The execution and
-----------------------------------
delivery of this Agreement by Buyer and the performance by Buyer of the
transactions contemplated herein will not violate or conflict with, or
constitute a breach or default under, or result in the creation or imposition of
any Lien under, (a) any applicable statute, law, regulation or rule, or (b) any
contract, instrument, agreement, lease, mortgage, judgment, order, decree or
other restriction to which Buyer is a party or by which Buyer is bound.
Section 5.04. Broker's Fees. Neither Buyer nor anyone acting on Buyer's
-------------
behalf has retained any broker, finder or agent or agreed to pay any brokerage
fee, finder's fee or commission with respect to the transactions contemplated by
this Agreement.
ARTICLE VI.
CONDITIONS PRECEDENT TO CLOSING
Section 6.01. Conditions to Obligations of Seller on the Closing Date.
-------------------------------------------------------
This Agreement and the obligations of Seller to consummate the transactions to
be consummated on the Closing Date shall be subject to the satisfaction of or
waiver by Seller in writing of the following conditions at or prior to the
Closing Date:
(a) Deliveries. Buyer shall have delivered to Seller each of the
----------
documents specified in Section 2.02(b) hereof and the payments specified in
Section 2.02(c) hereof.
-14-
(b) Litigation. No action or proceeding shall have been instituted or
----------
threatened by third parties against Seller or Buyer to restrain or prohibit or
to obtain damages in respect of the transactions contemplated by this Agreement
Section 6.02. Conditions to Obligations of Buyer on the Closing Date.
------------------------------------------------------
This Agreement and the obligations of Buyer to consummate the transactions to be
consummated on the Closing Date shall be subject to the satisfaction of or
waiver by Buyer in writing of the following conditions at or prior to the
Closing Date:
(a) Third Party Consents. Seller shall have obtained and delivered to
--------------------
Buyer, at least five (5) days prior to the Closing Date, such consents and
approvals of third parties, listed on Schedule 4.03 attached hereto.
-------------
(b) UCC Searches. Seller shall have obtained and delivered to Buyer,
------------
at least five (5) days prior to the Closing date, UCC (including fixture
filings) and state and federal tax and judgment lien searches against the
Seller, all dated within thirty (30) days of the Closing Date.
(c) No Adverse Change. Between December 31, 1999, and the Closing
-----------------
Date, the Property shall have no adverse change and the operation of the
Business shall not have been stopped or threatened for any cause whatsoever, and
there shall not have been:
(1) any adverse change in the Property or the Business or
prospects of the Business;
(2) any damage, destruction or loss, whether or not covered by
insurance, which affects the Property or the operations of the
Business; or
(3) any other event or condition of any character which
adversely affects the Property or the Business.
(d) Due Diligence; Review of Title Commitment; Environmental Studies.
----------------------------------------------------------------
Favorable completion, by July 18, 2000, to Buyer's satisfaction, of Buyer's due
diligence investigation, regarding the title commitments delivered by the Title
Company (together with copies of all instruments which are exceptions noted
therein or conditions to be satisfied), surveys, environmental studies and tests
as Buyer may require relating to the Property. Buyer shall have competed its
due diligence review with respect to financial issues prior to the execution of
this Agreement
(e) Title Insurance Policy. Seller shall deliver to Buyer an ALTA
----------------------
Form B owner's and lender's policy of extended coverage title insurance (or
comparable owner's form) in the amount of the Purchase Price, insuring
marketable fee simple title in Buyer (the "Title Policy"), issued by Title
Services Inc. (the "Title Company").
-15-
(f) Deliveries. Seller shall have delivered to Buyer each of the
----------
documents specified in Section 2.02(a) hereof.
(g) Litigation. No action or proceeding shall have been instituted or
----------
threatened by third parties against Seller or Buyer to restrain or prohibit or
to obtain damages in respect of the transactions contemplated by this Agreement.
(h) Leetsdale Lease. The Leetsdale Lease shall be assigned to Buyer
---------------
and extended for an additional term of sixteen (16) years beyond its current
expiration date upon substantially the same terms and conditions currently set
forth in the Leetsdale Lease.
(i) Financing. Buyer shall have obtained financing from Bank One, in
---------
an adequate amount to close the transaction contemplated herein, and upon such
terms and conditions that are acceptable to Buyer.
ARTICLE VII.
INDEMNITIES
Section 7.01. Indemnity by Seller. For a period of two (2) years from the
-------------------
Closing Date, Seller shall indemnify and hold Buyer harmless from and against
any and all claims, losses, damages, penalties, fines and expenses of every kind
and nature (including attorneys' fees) incurred by Buyer, directly or
indirectly, arising out of or resulting from (1) any misrepresentation or breach
of any warranty, representation or agreement of Seller under this Agreement, or
(2) any and all of Seller's Liabilities (as defined in Section 1.05 hereof);
provided however, there shall be no such limitations period in the event Buyer
suffers damages as a result of the fraudulent acts of Seller and/or its
directors or as a result of tax liabilities, environmental issues, human
resource issues or title issues not covered by title insurance, for which the
applicable statute of limitations shall apply. In the event of a claim arising
on account of a misrepresentation or breach of any warranty, representation or
agreement of Seller under this Agreement, Seller shall cure any default, within
ten (10) days of receiving such notice of default from Buyer.
Section 7.02. Indemnity by Buyer. For a period of two (2) years from the
------------------
Closing Date, Buyer shall indemnify and hold Seller harmless from and against
any and all claims, losses, damages, penalties, fines and expenses of every kind
and nature (including attorneys' fees) incurred by Seller, directly or
indirectly, arising out of or resulting from any misrepresentation or breach of
any warranty, representation, or agreement of Buyer under this Agreement.
Section 7.03. Indemnity Conditions. Each party shall promptly notify the
--------------------
other party in writing upon learning of any matter with respect to which the
other party is obligated to defend, indemnify or hold harmless under this
Agreement. The indemnifying party shall respond in writing within fifteen (15)
days of receipt of such notice stating whether or not it intends to defend or
contest such matter. If the indemnifying party elects to defend or contest such
matter, it shall pay all costs and expenses of every kind related
-16-
thereto, including any damages, losses, or amounts paid in settlement. Such
defense or contest shall be conducted by the indemnifying party's counsel,
although the other party shall have the right to participate in any proceedings
at its own cost and expense. If the indemnifying party declines to defend or
contest such matter, or fails or refuses to notify the other party of its
intention to do so, the other party shall have the right to defend or contest
such matter by its counsel, in which event the indemnifying party shall be bound
by the results of such proceedings, including settlement, and shall pay, or
reimburse the other party, at the other party's election, all costs and expenses
of every kind related thereto, including any damages, losses and amounts paid in
settlement. The party seeking indemnification shall fully cooperate with the
indemnifying party in the defense or settlement of any such matter.
ARTICLE VIII.
MISCELLANEOUS
Section 8.01. Risk of Loss. Seller shall bear all risk of loss of, or
------------
damage to, the Property on and prior to the Closing Date. Buyer shall bear all
risk of loss of or damage to the Property after the Closing Date.
Section 8.02. Cooperation.
-----------
(a) On the Closing Date and from time to time thereafter upon
request, each party shall execute and deliver to the other such additional
instruments as may be necessary to complete or carry out the transactions
contemplated herein or as may otherwise be reasonably required in connection
with the transactions provided for in this Agreement.
(b) In the event Buyer determines within three (3) years after the
Closing Date that an audit of the affairs or transactions that occurred prior to
the Closing Date related to the Property is necessary because of positions taken
by Buyer's independent accountants or by any governmental agency, Seller agrees
to permit and reasonably assist in such audit, which shall be conducted at the
sole expense of Buyer.
Section 8.03. Expenses. Each party shall bear and pay all expenses
--------
incurred by such party in connection with the preparation, negotiation and
execution of this Agreement and the consummation of the transactions
contemplated hereby, including without limitation, the charges of its respective
consultants, engineers, counsel, advisors, brokers and finders.
Section 8.04. Termination.
-----------
(a) Anything herein to the contrary notwithstanding, this Agreement
may be terminated at any time before the date of the Closing Date as follows:
(1) By mutual written consent of Seller and Buyer.
-17-
(2) By Buyer, by delivery of written notice of such termination
to Seller, if Buyer in good faith determines that any condition set
forth in Section 6.02 hereof is incapable of being met, after Buyer
has given Seller written notice of its intent to terminate this
Agreement and fifteen (15) calendar days in which to satisfy the
relevant condition.
(3) By either party hereto, by delivery of written notice of
such termination to the other party, if, prior to the Closing Date,
the other party defaults in any respect in the observance or in the
due and timely performance of any of its covenants or agreements
herein contained or if any representation or warranty of the other
party is not, or on the Closing Date will not be, true and correct in
all respects, and such default or untrue representation shall not have
been cured within ten (10) days of the date of notice thereof served
by the party claiming such default or untrue representation; or
(4) By either party hereto, by delivery of written notice of
such termination to the other party, if any action or proceeding shall
have been instituted or threatened by third parties against Seller or
Buyer to restrain or to prohibit or to obtain damages in respect of
the transactions contemplated by this Agreement.
(b) Except for the confidentiality obligations contained in Section
3.01(b) hereof, which shall survive any termination of this Agreement, upon the
termination of this Agreement pursuant to this Section 8.05, the parties shall
be released and discharged from any further obligation hereunder; provided,
however, that the termination of this Agreement under this Section 8.05 shall
not relieve any party of any liability for breach of this Agreement prior to the
date of termination.
Section 8.05. Survival. The representations and warranties in this
--------
Agreement and in any document delivered pursuant to this Agreement shall survive
the consummation of the transactions contemplated hereby for a period of two (2)
years following the Closing Date, and all inspections, examinations or audits
made by or on behalf of either party hereto, but only as expressly set forth
herein; provided however, there shall be no such limitations period in the event
Buyer suffers damages as a result of the fraudulent acts of Seller and/or its
directors or as a result of tax liabilities, environmental issues, human
resource issues or title issues not covered by title insurance, for which the
applicable statute of limitations shall apply.
Section 8.06. Waiver. Either party may waive or modify any term or
------
condition of this Agreement, the performance of which by the other party would
have been to its benefit, but any such waiver shall be in writing and duly
delivered to the other party. No failure or omission to act shall be deemed a
waiver of either party's right to insist upon full and complete performance of
this Agreement by the other party.
Section 8.07. Notices. Any notice required or desired to be given
-------
hereunder shall be in writing and shall be considered effective when delivered,
if by personal
-18-
delivery, upon receipt, if sent by FAX, which FAX has been telephonically
confirmed, before 5:00 p.m. local time of the recipient on a business day, upon
delivery, or if not, at 9:00 a.m., local time on the next business day, or upon
first attempted delivery after mailing by certified mail, return receipt
requested, postage prepaid, addressed as follows:
-19-
To Seller:
PRECISION AUTO CARE, INC.
Attn: Xxxxxxx X. Xxxxxx, President
000 Xxxxxx Xxxxx, X.X.
Xxxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With Copy To:
(which shall not constitute notice)
Miles & Stockbridge P.C.
Attn: Xxxxxxx X. Xxxxxx
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To Buyer:
XXXXX PROPERTY HOLDING COMPANY, LLLP
Attn: Xxxx X. Xxxxx
000 Xxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
With Copy To:
(which shall not constitute notice)
Hall & Xxxxx
Attention: X. Xxxxxxxx Lippit
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Section 8.08. Deleted
Section 8.9. Independent Contractors. The parties to this Agreement are
-----------------------
independent contractors, and neither party nor any officer, employee, agent,
servant or independent contractor of either party or either party's parent,
subsidiary or affiliate shall at any time be deemed to be an employee or agent
of the other party for any purpose whatsoever.
-20-
Section 8.10. Performance Not Contrary to Law. Nothing herein shall be
-------------------------------
construed to require the performance by either party of any act contrary to law;
and, in the event of conflict between any provision hereof and any law or
governmental regulation, the latter shall prevail; and in such event, the
affected portions of this Agreement shall be deemed amended to the extent
necessary to conform to the requirements of such law or governmental regulation.
Section 8.11. Headings. The headings used herein are for convenience only
--------
and shall not limit or affect in any way the meaning or interpretation of this
Agreement.
Section 8.12. Governing Law. This Agreement shall be governed by and
-------------
interpreted in accordance with the substantive laws of the State of Colorado
without regard to its provisions on conflict of laws.
Section 8.13. Schedules and Exhibits. The schedules and exhibits are a
----------------------
part of this Agreement and are incorporated herein by this reference.
Section 8.14. Attorneys' Fees. In the event any proceeding is brought by
---------------
one party against the other to enforce or for the breach of any of the
provisions of this Agreement, the prevailing party, as determined by the dispute
resolution authority, shall be entitled in such proceeding and in any appeal
therefrom to recover reasonable attorneys' fees, together with the costs of such
proceeding therein incurred.
Section 8.15. Entire Agreement. This Agreement and the schedules, exhibits
----------------
and documents delivered hereunder contain the entire agreement between the
parties with respect to the subject matter covered herein and therein, and
supersede all prior agreements (oral or written), negotiations and discussions
between the parties relating thereto.
Section 8.16. Execution in Counterparts. This Agreement may be executed in
-------------------------
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
Section 8.17. Default. Time is of the essence in this Agreement. Failure
-------
by either party to perform any covenant or condition of this Agreement, other
than those having a specified time for performance, within thirty (30) days
after the giving of written notice of said default by the non-defaulting party
shall constitute a default. In the event the default is of such a nature that it
cannot be completely remedied within a thirty (30) day period, the defaulting
party shall not be considered to be in default if the defaulting party begins
correcting the claimed default within the thirty (30) day period and thereafter
proceeds with reasonable diligence and in good faith to effect the remedy as
soon as practicable.
(a) Buyer Default - Liquidated Damages. If Buyer is in default,
----------------------------------
Seller may elect to treat this Agreement as cancelled, in which case all
payments and things of value received hereunder shall be returned and
Seller may recover such damages as may be proper, or Seller may elect to
treat this Contract as being in full force and effect and Seller
-21-
shall have the right to specific performance or damages, or both.
(b) Seller Default - Specific Performance. If Seller is in default,
-------------------------------------
Buyer may elect to treat this Agreement as cancelled, in which case all
payments and things of value received hereunder shall be returned and Buyer
may recover such damages as may be proper, or Buyer may elect to treat this
Contract as being in full force and effect and Buyer shall have the right
to specific performance or damages, or both.
Section 8.18. Third-Party Beneficiary. This Agreement is solely for the
-----------------------
benefit of the parties and their respective successors and permitted assigns,
and no other person has any right, benefit, priority or interest under, or
because of the existence of, this Agreement.
Section 8.19. Assignments. The rights and obligations of the parties
-----------
hereto shall not be assignable, without the parties prior written consent. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.
Section 8.20. Notice of Assignment. Buyer shall give Seller ten (10) days
--------------------
prior written notice of any assignment or designation of its rights or
obligations hereunder to an entity controlled by Xxxx X. Xxxxx, provided that
Seller's consent shall be required prior to any assignment of this Agreement to
any other person.
Section 8.21. Approvals and Consents. If any provision hereof requires the
----------------------
approval or consent of any party to any act or omission, such approval or
consent is not to be unreasonably withheld or delayed except as set forth
herein.
Section 8.22. Construction. Unless the context of this Agreement clearly
------------
requires otherwise: references to the plural include the singular and vice
versa; references to any person include such person's successors and assigns
but, if applicable, only if such successors and assigns are permitted by this
Agreement; references to one gender include all genders; "including" is not
limiting; "or" has the inclusive meaning represented by the phrase "and/or"; the
words "hereof," "herein," "hereby," "hereunder" and similar terms in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement; article, section, subsection, Exhibit and Schedule references
are to this Agreement unless otherwise specified; and reference to any agreement
(including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof.
Section 8.23. Counterpart Facsimile Execution. For purposes of executing
-------------------------------
this Agreement, a document signed and transmitted by facsimile machine or
telecopier is to be treated as an original document. The signature of any party
thereon, for purposes hereof, is to be considered as an original signature, and
the document transmitted is to be considered to have the same binding effect as
an original signature on an original document. At the request of any party, any
facsimile or telecopy document is to be re-
-22-
executed in original form by the parties who executed the facsimile or telecopy
document. No party may raise the use of a facsimile machine or telecopier or the
fact that any
-23-
signature was transmitted through the use of a facsimile or telecopier machine
as a defense to the enforcement of this Agreement or any amendment or other
document executed in compliance with this Section.
Section 8.24. Failure or Delay. No failure on the part of any party to
----------------
exercise, and no delay in exercising, any right, power or privilege hereunder
operates as a waiver thereof; nor does any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. No notice to or
demand on any party in any case entitles such party to any other or further
notice or demand in similar or other circumstances.
Section 8.25. Further Assurances. The parties will execute and deliver
------------------
such further instruments and do such further acts and things as may be required
to carry out the intent and purpose of this Agreement.
Section 8.26. Remedies Cumulative. Each and every right granted hereunder
-------------------
and the remedies provided for under this Agreement are cumulative and are not
exclusive of any remedies or rights that may be available to any party at law,
in equity, or otherwise.
Section 8.27. Submission to Jurisdiction. ANY LEGAL ACTION OR PROCEEDING
--------------------------
WITH RESPECT TO THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO MAY BE BROUGHT IN
THE COURTS OF THE STATE OF COLORADO OR ANY COURT OF THE UNITED STATES OF AMERICA
FOR THE DISTRICT OF COLORADO AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT,
EACH PARTY HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF SUCH COURTS. THE PARTIES IRREVOCABLY
WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH ANY OF THEM MAY NOW OR HEREAFTER HAVE
TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS.
[Remainder of Page Intentionally Left Blank]
-24-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
SELLER:
PRECISION AUTO CARE, INC.
By
XXXXXXX X. XXXXXX, President
BUYER:
XXXXX PROPERTY HOLDING COMPANY, LLLP
By
XXXX X. XXXXX, its General Partner
-25-
EXHIBIT A
Seller's Legal Opinion
1. Opinion of Seller's general counsel.
2. Opinion of Seller's Colorado counsel.
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
SCHEDULE 1.01
Real Property and Tangible and Intangible Assets
See Attached.
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Pike
Mortgage Loan (Fixed Rate)
2
SCHEDULE 1.04
Allocation of Purchase Price
See Attached (to be provided no later than July 18, 2000)
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
3
SCHEDULE 4.03
Seller's Consents and Approvals
3. Consent of First Union National Bank.
4. Consent of FFCA Acquisition Corporation.
5. Consent of Landlord of Leetsdale Lease.
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Pike
Mortgage Loan (Fixed Rate)
4
SCHEDULE 4.11
Contracts
1. Xxxxxx Leasing Company
2. Young Electric Sign Company
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
5
EXHIBIT B
FORM OF AMENDED AND RESTATED PROMISSORY NOTE
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Pike
Mortgage Loan (Fixed Rate)
6
AMENDED AND RESTATED PROMISSORY NOTE
Dated as of August_____, 2000
$___________________ Scottsdale, Arizona
THIS AMENDED AND RESTATED PROMISSORY NOTE (this "Note") executed by
PRECISION AUTO CARE, INC., a Virginia corporation ("Debtor"), amends and
restates that certain Promissory Note dated as of May 17, 1999 in the principal
amount of $772,000.00, which was originally payable to FFCA ACQUISITION
CORPORATION, a Delaware corporation ("FFCA"), and which was assigned to LASALLE
BANK NATIONAL ASSOCIATION, f/k/a LaSalle National Bank, as trustee pursuant to
that certain Indenture dated as of September 1, 1999 ("LaSalle").
Debtor, for value received, hereby promises to pay to LaSalle, whose
address is c/o Franchise Finance Corporation of America, 00000 Xxxxx Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, or order, on or before June 1, 2014 (the
"Maturity Date"), as herein provided, the principal sum of _____ HUNDRED
__________ THOUSAND ______ HUNDRED _________________ AND __/100 DOLLARS
($___________), and to pay interest on the unpaid principal amount of this Note
from the date hereof to the Maturity Date at the rate of 9.90% per annum on the
basis of a 360-day year of twelve 30-day months, such principal and interest to
be paid in immediately available funds and in lawful money of the United States.
Initially capitalized terms which are not otherwise defined in this Note
shall have the meanings set forth in that certain Loan Agreement dated as of May
17, 1999, between Debtor and FFCA, as such agreement may be amended, restated
and/or supplemented from time to time (the "Loan Agreement").
Principal and interest shall be payable in consecutive monthly installments
of _______ THOUSAND ______ HUNDRED ____________ AND __/100 DOLLARS ($_________)
commencing on September 1, 2000, and continuing on the first day of each month
thereafter until the Maturity Date, at which time the outstanding principal and
unpaid accrued interest shall be due and payable.
Debtor may prepay this Note in full, but not in part (except as otherwise
set forth below), including all accrued but unpaid interest hereunder and all
sums advanced by FFCA pursuant to the Loan Documents and any Other Agreements,
provided that (i) no Event of Default has occurred under this Note or any of the
other Loan Documents or any Other Agreements, (ii) any such prepayment shall
only be made on a regularly scheduled payment date upon not less than 30 days
prior written notice from Debtor to LaSalle, and (iii) except as otherwise set
forth below, any such prepayment shall be made together with payment of the
Yield Maintenance Amount.
The term "Yield Maintenance Amount" means an amount equal to the difference
between (i) the present value computed at the Reinvestment Rate of the stream of
monthly principal and interest payments due under this Note from the date of
such prepayment through the scheduled
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
7
Maturity Date, and (ii) the unpaid principal amount of this Note; provided,
however, if such difference is a negative number, the Yield Maintenance Amount
shall be zero.
The term "Reinvestment Rate" means an interest rate equal to the then
current yield of U.S. Treasury securities having a weighted average life to
maturity closest to the scheduled Maturity Date of this Note.
The foregoing Yield Maintenance Amount shall be due and payable regardless
of whether such prepayment is the result of a voluntary prepayment by Debtor or
as a result of LaSalle declaring the unpaid principal balance of this Note,
accrued interest and all other sums due under this Note, the Mortgage
encumbering the Premises corresponding to this Note, the other Loan Documents
and any Other Agreements, due and payable as contemplated below (the
"Acceleration"); provided, however, the prohibition on prepayment and such Yield
Maintenance Amount shall not be applicable with respect to a prepayment of this
Note in connection with an application of condemnation or insurance proceeds as
contemplated by the Mortgage encumbering the Premises corresponding to this Note
or as contemplated by the Loan Agreement as a result of a breach and subsequent
cure by Debtor of the Fixed Charge Coverage Ratio required by the Loan
Agreement.
Upon execution of this Note, Debtor shall establish arrangements whereby
all payments of principal and interest hereunder shall be transferred by wire or
other means directly from Debtor's bank account to such account as LaSalle may
designate or as LaSalle may otherwise designate. Each payment of principal and
interest hereunder shall be applied first toward any past due payments under
this Note (including payment of all Costs (as herein defined)), then to accrued
interest, and the balance, after the payment of such accrued interest, if any,
shall be applied to the unpaid principal balance of this Note; provided,
however, each payment hereunder after an Event of Default has occurred under
this Note shall be applied as LaSalle in its sole discretion may determine.
This Note is secured by the Mortgages. An "Event of Default" shall be
deemed to have occurred under this Note if (a) any principal, interest or other
monetary sum due under this Note is not paid within five days after the date
when due; provided, however, notwithstanding the occurrence of such an Event of
Default, LaSalle shall not be entitled to exercise its rights and remedies under
the Loan Documents unless and until LaSalle shall have given Debtor notice
thereof and a period of five days from the delivery of such notice shall have
elapsed without such past-due sum being paid, or (b) an Event of Default or a
breach or default, after the passage of all applicable notice and cure or grace
periods, shall occur under any of the Loan Documents or the Other Agreements.
Upon the occurrence of an Event of Default under this Note, subject to the
limitation set forth in subitem (a) of the preceding paragraph, then, time being
of the essence hereof, LaSalle may declare the entire unpaid principal balance
of this Note, accrued interest, if any, and all other sums due under this Note
and any Loan Documents or Other Agreements due and payable at once without
notice to Debtor.
All past-due principal and/or interest shall bear interest from the due
date to the date of
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
8
actual payment at the lesser of the highest rate for which the undersigned may
legally contract or the rate of 18% per annum (the "Default Rate"), and such
Default Rate shall continue to apply following a judgment in favor of LaSalle
under this Note. If Debtor fails to make any payment or installment due under
this Note within five days of its due date, Debtor shall pay to LaSalle in
addition to any other sum due LaSalle under this Note or any other Loan Document
a late charge equal to 10% of such past-due payment or installment.
All payments of principal and interest due hereunder shall be made (i)
without deduction of any present and future taxes, levies, imposts, deductions,
charges or withholdings, which amounts shall be paid by Debtor, and (ii) without
any other right of abatement, reduction, setoff, defense, counterclaim,
interruption, deferment or recoupment for any reason whatsoever. Debtor will pay
the amounts necessary such that the gross amount of the principal and interest
received by LaSalle is not less than that required by this Note.
No delay or omission on the part of LaSalle in exercising any remedy, right
or option under this Note shall operate as a waiver of such remedy, right or
option. In any event, a waiver on any one occasion shall not be construed as a
waiver or bar to any such remedy, right or option on a future occasion.
Debtor hereby waives presentment, demand for payment, notice of dishonor,
notice of protest, and protest, notice of intent to accelerate, notice of
acceleration and all other notices or demands in connection with delivery,
acceptance, performance, default or endorsement of this Note.
All notices, consents, approvals or other instruments required or permitted
to be given by either party pursuant to this Note shall be in writing and given
by (i) hand delivery, (ii) facsimile, (iii) express overnight delivery service
or (iv) certified or registered mail, return receipt requested, and shall be
deemed to have been delivered upon (a) receipt, if hand delivered, (b) machine
confirmation, if delivered by facsimile, (c) the next Business Day, if delivered
by express overnight delivery service, or (d) the third Business Day following
the day of deposit of such notice with the United States Postal Service, if sent
by certified or registered mail, return receipt requested. Notices shall be
provided to the parties and addresses (or facsimile numbers, as applicable)
specified below:
If to Debtor: Xx. Xxxxxxx Xxxxxx
Chief Executive Officer and President
Precision Auto Care, Inc.
000 Xxxxxx Xxxxx, XX
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
9
If to LaSalle: Xxxxxx X. Xxxxx, Esq.
Executive Vice President, General Counsel
and Secretary
Franchise Finance Corporation of America
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above.
Should any indebtedness represented by this Note be collected at law or in
equity, or in bankruptcy or other proceedings, or should this Note be placed in
the hands of attorneys for collection after default, Debtor shall pay, in
addition to the principal and interest due and payable hereon, all costs of
collecting or attempting to collect this Note (the "Costs"), including
reasonable attorneys' fees and expenses of LaSalle (including those fees and
expenses incurred in connection with any appeal and those of LaSalle's in-house
counsel) and court costs whether or not a judicial action is commenced by
LaSalle.
This Note may not be amended or modified except by a written agreement duly
executed by the party against whom enforcement of this Note is sought. In the
event that any one or more of the provisions contained in this Note shall be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Note, and this Note shall be construed as if such provision had never been
contained herein or therein.
Notwithstanding anything to the contrary contained in any of the Loan
Documents, the obligations of Debtor to LaSalle under this Note and any other
Loan Documents are subject to the limitation that payments of interest and late
charges to LaSalle shall not be required to the extent that receipt of any such
payment by LaSalle would be contrary to provisions of applicable law limiting
the maximum rate of interest that may be charged or collected by LaSalle. The
portion of any such payment received by LaSalle that is in excess of the maximum
interest permitted by such provisions of law shall be credited to the principal
balance of this Note or if such excess portion exceeds the outstanding principal
balance of this Note, then such excess portion shall be refunded to Debtor. All
interest paid or agreed to be paid to LaSalle shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and/or spread throughout the
full term of this Note (including, without limitation, the period of any renewal
or extension thereof) so that interest for such full term shall not exceed the
maximum amount permitted by applicable law.
It is the intent of the parties hereto that the business relationship
created by this Note and the other Loan Documents is solely that of creditor and
debtor and has been entered into by both parties in reliance upon the economic
and legal bargains contained in the Loan Documents. None of the agreements
contained in the Loan Documents is intended, nor shall the same be
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
deemed or construed, to create a partnership between LaSalle and Debtor, to make
them joint venturers, to make Debtor an agent, legal representative, partner,
subsidiary or employee of LaSalle, nor to make LaSalle in any way responsible
for the debts, obligations or losses of Debtor.
LaSalle, by accepting this Note, and Debtor acknowledge and warrant to each
other that each has been represented by independent counsel and Debtor has
executed this Note after being fully advised by said counsel as to its effect
and significance. This Note shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the domicile of any
party.
Time is of the essence in the performance of each and every obligation
under this Note.
Debtor acknowledges that this Note was substantially negotiated in the
State of Arizona, this Note was delivered in the State of Arizona, all payments
under this Note will be delivered in the State of Arizona and there are
substantial contacts between the parties and the transactions contemplated
herein and the State of Arizona. For purposes of any action or proceeding
arising out of this Note, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona.
Debtor consents that it may be served with any process or paper by registered
mail or by personal service within or without the State of Arizona in accordance
with applicable law. Furthermore, Debtor waives and agrees not to assert in any
such action, suit or proceeding that it is not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding is brought in
an inconvenient forum or that venue of the action, suit or proceeding is
improper. It is the intent of Debtor and LaSalle that all provisions of this
Note shall be governed by and construed under the laws of the State of Arizona,
without regard to its conflict of laws principles. Nothing contained in this
paragraph shall limit or restrict the right of LaSalle to commence any
proceeding in the federal or state courts located in the state in which the
Premises corresponding to this Note is located to the extent LaSalle deems such
proceeding necessary or advisable to exercise remedies available under the Loan
Documents.
LASALLE, BY ACCEPTING THIS NOTE, AND DEBTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH
RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
NOTE, THE RELATIONSHIP OF LASALLE AND DEBTOR, DEBTOR'S USE OR OCCUPANCY OF THE
PREMISES CORRESPONDING TO THIS NOTE, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR
ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, DEBTOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL AND INDIRECT DAMAGES FROM LASALLE AND ANY
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Xxxx
Mortgage Loan (Fixed Rate)
11
OF LASALLE'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY DEBTOR AGAINST LASALLE OR ANY OF
LASALLE'S AFFILIATES, OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR
SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
NOTE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED HERETO. THE WAIVER BY DEBTOR
OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF
THEIR BARGAIN.
This obligation shall bind Debtor and its successors and assigns, and the
benefits hereof shall inure to LaSalle and its successors and assigns. LaSalle
may assign its rights under this Note as set forth in the Loan Agreement.
05-60310.04
FFCA Xx. 0000-0000
Xxxx Xx. 00
0000 Xxxxxxxxx Pike
Mortgage Loan (Fixed Rate)
12
IN WITNESS WHEREOF, Debtor has executed and delivered this Note effective
as of the date first set forth above.
DEBTOR:
PRECISION AUTO CARE, INC.,
a Virginia corporation
By_______________________________
Printed Name_____________________
Its______________________________
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
2
When recorded return to:
Ms. Xxxxxxxx XxXxxxxx
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
_______________________________________________________________________________
SPACE ABOVE LINE FOR RECORDER'S USE
ASSIGNMENT, ASSUMPTION, RELEASE AND CONSENT AGREEMENT
THIS ASSIGNMENT, ASSUMPTION, RELEASE AND CONSENT AGREEMENT (this
"Assignment") is made and entered into effective as of _____________, 2000 (the
"Effective Date"), by and among LASALLE BANK NATIONAL ASSOCIATION, f/k/a LaSalle
National Bank, as Trustee for the registered holders of FFCA Secured Franchise
Loan Trust 1999-2 Secured Franchise Loan-Backed Bonds pursuant to that certain
Indenture dated as of September 1, 1999 ("Mortgagee"), whose address is c/o
Franchise Finance Corporation of America, 00000 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, PRECISION AUTO CARE, INC., a Virginia corporation
("Assignor"), whose address is 000 Xxxxxx Xxxxx, XX, Xxxxxxxx, Xxxxxxxx 00000,
and PRECISION AUTO CARE HOLDINGS, LLC, a Delaware limited liability company
("Assignee"), whose address is 000 Xxxxxx Xxxxx, XX, Xxxxxxxx, Xxxxxxxx 00000.
PRELIMINARY STATEMENT
Pursuant to that certain Loan Agreement described on the attached Schedule
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I by and between FFCA Acquisition Corporation, a Delaware corporation ("FFCA"),
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and Assignor (the "Loan Agreement"), FFCA advanced to Assignor a loan (the
"Mortgage Loan") which is evidenced by the promissory note described on Schedule
--------
I (the "Note") and is secured by a first priority lien upon and security
-
interest in the property legally described on the attached Exhibit A (the
---------
"Premises") pursuant to a deed of trust, deed to secure debt or mortgage (the
"Mortgage") described on Schedule I. Initially capitalized terms not otherwise
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defined in this Assignment shall have the meanings set forth in the Loan
Agreement.
Effective as of September 1, 1999, the Note, the Mortgage and the other
documents described on the attached Schedule I (collectively, the "Loan
----------
Documents") were assigned and conveyed by FFCA to Mortgagee in connection with a
securitization of assets.
Assignor has agreed to convey, and Assignee has agreed to acquire, the
Premises and all personal property of Assignor located thereon (the
"Conveyance"). Simultaneously with the Conveyance, and pursuant to the terms and
conditions of this Assignment, Assignor and Assignee desire that Assignee assume
all obligations of Assignor arising and accruing under the Loan Documents and
Mortgagee is willing to consent to all of the foregoing on the terms and
conditions set forth herein.
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Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
3
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Assignment and Assumption. Assignee hereby assumes and agrees to be
fully responsible for, and to pay when due and to promptly and strictly perform,
all debts, liabilities and obligations of Assignor arising and accruing under
the Loan Documents, as amended pursuant to this Assignment, whether arising or
accruing on or after the Effective Date, and Assignee agrees to keep, observe
and perform duly and punctually all of the terms, covenants, provisions and
conditions of Assignor arising or accruing under the Loan Documents, as amended
pursuant to this Assignment, whether arising or accruing on or after the
Effective Date. Notwithstanding the foregoing, Assignor hereby agrees that it
shall remain fully responsible for, and shall pay when due, and shall promptly
and strictly perform, all debts, liabilities and obligations arising and
accruing under the Loan Documents, as amended pursuant to this Assignment, which
arose or accrued before the Effective Date, and Assignor agrees to keep, observe
and perform duly and punctually all of the terms, covenants, provisions and
conditions arising or accruing under the Loan Documents, as amended pursuant to
this Assignment, which arose or accrued before the Effective Date. Assuming that
the August 1, 2000 payment due under the Note was made by PAC with good funds,
the principal amount outstanding under the Note as of the Effective Date is
$___________.
2. Consent. Effective as of the Effective Date, Mortgagee consents to the
assumption by Assignee of the debts, liabilities and obligations of Assignor
arising and accruing under the Loan Documents. Notwithstanding anything
contained in this Assignment, such assignment and assumption shall not (a)
impair or diminish in any way any security interest granted in any of the Loan
Documents to FFCA or Mortgagee or (b) be deemed a consent to any future
assignment or assumption or a waiver of any other matter on any future occasion.
3. Release. (a) Assignor hereby releases and discharges FFCA and
Mortgagee from their obligations to observe the terms and conditions of the Loan
Documents. Assignor hereby releases and discharges FFCA and Mortgagee and their
employees, officers, directors (both past and present), shareholders, partners,
agents, affiliates, heirs, successors, assigns and personal representatives from
all claims and demands whatsoever, whether known or unknown, which Assignor may
have or hereafter have or claim to have against FFCA or Mortgagee by reason of
any act or matter arising and accruing in connection with the Loan Documents or
the Premises, whether arising or accruing before, on or after the Effective
Date. Assignor hereby agrees and covenants not to xxx Mortgagee or FFCA for any
act or matter arising and accruing in connection with the Loan Documents or the
Premises, whether arising or accruing before, on or after the Effective Date.
(b) Mortgagee hereby releases and discharges Assignor from all liabilities
and obligations of Assignor arising and accruing under the Loan Documents from
and after the Effective Date; provided, however, in the event that the
Conveyance is rendered void or rescinded by operation of law, or by order of any
state or federal court of competent jurisdiction (each, an "Avoidance Action"),
then the release set forth in this subsection (b) shall be rescinded
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FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
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unless Mortgagee, in its sole discretion, elects in writing to permit such
release notwithstanding the Avoidance Action.
4. Representations and Warranties. (a) Assignor represents and warrants
to Mortgagee and Assignee as of the Effective Date as follows:
(i) it is a corporation, duly organized or formed, as applicable,
validly existing and in good standing under the laws of Virginia, with all
power and authority necessary to own, lease and operate its properties and
carry on its business as now conducted and execute, deliver and perform
this Assignment and the other documents and instruments executed between or
among Assignor, Assignee and Mortgagee, as applicable, in connection with
this Assignment (the "Operative Documents");
(ii) all necessary corporate action has been taken by it to authorize
the execution, delivery and performance of this Assignment and the
Operative Documents to which it is a party and this Assignment has been
duly executed and delivered by it;
(iii) the authorization, execution, delivery and performance of this
Assignment and the Operative Documents to which it is a party will not
result in any breach or default under any other document, instrument or
agreement to which it is a party or by which it is subject or bound nor
violate any applicable law, statute, regulation, ordinance, code, rule or
order;
(iv) this Assignment and the Operative Documents to which it is a
party constitute the legal, valid and binding obligations of such entity,
enforceable against such entity in accordance with their respective terms;
and
(v) no consent, license, permit, approval or authorization of any
person, entity or governmental authority, is required in connection with
its execution, delivery or performance of this Assignment and the Operative
Documents to which it is a party and the consummation of the Conveyance,
except for the consent of First Union National Bank, which consent Assignor
obtained on or prior to the Effective Date.
(b) Assignee represents and warrants to Mortgagee and Assignor as of the
Effective Date as follows:
(i) it is a limited liability company, duly organized or formed, as
applicable, validly existing and in good standing under the laws of
Delaware, with all power and authority necessary to own, lease and operate
its properties and carry on its business as now conducted and execute,
deliver and perform this Assignment and the Operative Documents to which it
is a party;
(ii) all necessary organizational action has been taken by it to
authorize the execution, delivery and performance of this Assignment and
the Operative Documents to which it is a party and this Assignment has been
duly executed and delivered by it;
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FFCA No. 8000-8811
Unit No. 30
9160 East 38th Street
Indianapolis, IN
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(iii) the authorization, execution, delivery and performance of this
Assignment and the Operative Documents to which it is a party will not
result in any breach or default under any other document, instrument or
agreement to which it is a party or by which it is subject or bound nor
violate any applicable law, statute, regulation, ordinance, code, rule or
order;
(iv) this Assignment and the Operative Documents to which it is a
party constitute the legal, valid and binding obligations of such entity,
enforceable against such entity in accordance with their respective terms;
and
(v) no consent, license, permit, approval or authorization of any
person, entity or governmental authority is required in connection with its
execution, delivery or performance of this Assignment and the Operative
Documents to which it is a party and the consummation of the Conveyance.
(c) All representations and warranties made in this Assignment and the
Operative Documents shall survive the execution and delivery of this Assignment
and the Operative Documents.
5. Amendments. The Loan Documents are amended effective as of the
Effective Date as follows:
(i) The term "Debtor" as set forth in the Loan Documents shall mean
Assignee.
(ii) The following definitions are added to the definition provisions
of the Loan Agreement and the Mortgage:
(a) "Lessee" means Precision Auto Care, Inc., a Virginia
corporation.
(b) "Lessor" means Precision Auto Care Holdings, LLC, a Delaware
limited liability company.
(c) "Master Lease" means that certain Master Lease Agreement
dated as of the date of this Assignment, between Lessor, as lessor,
and Lessee, as lessee.
(iii) Section 5.01 of the Mortgage is amended by inserting the
following subsection 5.01(viii):
(viii) If the Master Lease terminates or expires prior to
December 31, 2014, unless the Loan Obligations have been paid and
satisfied in full prior to such date.
(iv) Section 10 of the Loan Agreement is amended by inserting the
following subsection 10.A.(8):
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Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
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(8) If the Master Lease terminates or expires prior to December
31, 2014, unless the Loan Obligations have been paid and satisfied in
full prior to such date.
(v) The Loan Documents are further amended as set forth in that
certain Master Agreement dated as of the date of this Assignment among
Assignor, Assignee, and Mortgagee.
5. Notices. From and after the date of this Assignment, all notices,
demands, and other communications under the Loan Documents to be delivered to
Assignee shall be sent to Assignee in the manner set forth in the Loan Documents
at the address set forth for Assignor in the Loan Documents.
6. Further Assurances. The parties hereto agree to execute all other
documentation reasonably required by any of the parties to this Assignment to
carry out the intentions expressed in this Assignment.
7. Counterparts. This Assignment may be executed in one or more
counterparts, each of which shall be deemed an original.
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FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
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IN WITNESS WHEREOF, this Assignment h as been executed as of the date of
the first above written.
LASALLE BANK NATIONAL ASSOCIATION, f/k/a LaSalle
National Bank, Trustee for the registered
holders of FFCA Secured Franchise Loan Trust
1999-2 Secured Franchise Loan-Backed Bonds
pursuant to that certain Indenture dated as of
September 1, 1999
By: Franchise Finance Corporation of America,
as Attorney-in-Fact and Master Servicer
pursuant to that certain Servicing
Agreement dated as of September 1, 1999
By ____________________________________
Printed Name __________________________
Its ___________________________________
PRECISION AUTO CARE HOLDINGS, LLC,
a Delaware limited liability company
By: Precision Auto Care, Inc.,
a Virginia corporation
its managing member
By ____________________________________
Printed Name __________________________
Its ___________________________________
PRECISION AUTO CARE, INC.,
a Virginia corporation
By ____________________________________
Printed Name __________________________
Its ___________________________________
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
This Instrument was prepared by:
Xxxxx X. Xxxxx, Esq.
Xxxxx Xxxx LLP
Suite 300
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
(000) 000-0000
RECORDING REQUESTED BY,
AND WHEN RECORDED
RETURN TO:
Ms. Xxxxxxxx XxXxxxxx
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
STATE OF _______________ )
) SS.
COUNTY OF ______________ )
Before me, a Notary Public in and for said County and State, personally
appeared _________________________________, ___________________________ of
Franchise Finance Corporation of America, a Delaware corporation, Attorney-in-
Fact and Master Servicer pursuant to that certain Servicing Agreement dated as
of September 1, 1999, on behalf of LaSalle Bank National Association, f/k/a
LaSalle National Bank, Trustee pursuant to that certain Indenture dated as of
September 1, 1999, and acknowledged the execution of the foregoing instrument as
such officer acting for and on behalf of said corporation.
Witness my hand and Notarial Seal this ______ day of _____________________,
2000.
___________________________________
(signature)
___________________________________
My Commission Expires: (printed name) Notary Public
_________________________________ Resident of________________ County
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
STATE OF__________________ )
) SS.
COUNTY OF_________________ )
Before me, a Notary Public in and for said County and State, personally
appeared _______________________________, ___________________________of
Precision Auto Care, Inc., a Virginia corporation, managing member of Precision
Auto Care Holdings, LLC, a Delaware limited liability company, and acknowledged
the execution of the foregoing instrument as such officer acting for and on
behalf of the corporation and limited liability company.
Witness my hand and Notarial Seal this ______ day of _____________________,
2000.
___________________________________
(signature)
___________________________________
My Commission Expires: (printed name) Notary Public
______________________________ Resident of______________ County
STATE OF__________________ )
) SS.
COUNTY OF_________________ )
Before me, a Notary Public in and for said County and State, personally
appeared
___________________________________, _____________________________________ of
PRECISION AUTO CARE, INC., a Virginia corporation, and acknowledged the
execution of the foregoing instrument as such officer acting for and on behalf
of said corporation.
Witness my hand and Notarial Seal this ______ day of _____________________,
2000.
__________________________________
(signature)
__________________________________
My Commission Expires: (printed name) Notary Public
Resident of________________County
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
EXHIBIT A
LEGAL DESCRIPTION
05-60440.03
FFCA No. 8000-8811
Unit No. 30
0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX
SCHEDULE I
LOAN DOCUMENTS
1. Loan Agreement dated as of May 17, 1999, between FFCA Acquisition
Corporation and Precision Auto Care, Inc.
2. Promissory Note dated as of May 17, 1999, in the original principal amount
of $170,000.00 executed by Precision Auto Care, Inc., and payable to FFCA
Acquisition Corporation.
3. Mortgage, Assignment of Rents and Leases, Security Agreement and Fixture
Filing dated as of May 17, 1999, recorded in Xxxxxx County, Indiana as
Instrument No. 1999-0101276 on May 24, 1999, and assigned in that Assignment of
Mortgage dated as of September 1, 1999, and recorded in Xxxxxx County, Indiana
as Instrument No. 2000-95334 on June 16, 2000.
4. UCC-1 Financing Statement (with respect to the Mortgage Loan) filed with the
Indiana Secretary of State as Instrument No. __________ on __________, 1999, and
assigned in that UCC-3 Assignment of Financing Statement by FFCA Acquisition
Corporation to LaSalle Bank National Association, which has not yet been filed.
5. UCC-1 Financing Statement (with respect to the Mortgage Loan) recorded in
Xxxxxx County, Indiana as Instrument No. 3741 on May 24, 1999, and assigned in
that UCC-3 Assignment of Financing Statement by FFCA Acquisition Corporation to
LaSalle Bank National Association, which has not yet been recorded.
6. Environmental Indemnity Agreement between FFCA Acquisition Corporation and
Precision Auto Care, Inc. dated as of May 17, 1999.
EXHIBIT D
FORM OF MASTER LEASE
2
MASTER LEASE
THIS MASTER LEASE (this "Lease") is made as of ________________, 2000 (the
"Effective Date"), by and between PRECISION AUTO CARE HOLDINGS, LLC, a Delaware
limited liability company ("Lessor"), whose address is 000 Xxxxxx Xxxxx, XX,
Xxxxxxxx, Xxxxxxxx 00000, and PRECISION AUTO CARE, INC., a Virginia corporation
("Lessee"), whose address is 000 Xxxxxx Xxxxx, XX, Xxxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. Certain Defined Terms. The following terms shall have the following
meanings for all purposes of this Lease:
"ADA" has the meaning set forth in Section 16.C.
"Additional Rental" has the meaning set forth in Section 5.
"Affiliate" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes
of this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"Applicable Regulations" means all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders and approvals of each Governmental
Authority having jurisdiction over Lessee and/or any of the Properties,
including, without limitation, all health, building, fire, safety and other
codes, ordinances and requirements and all applicable standards of the National
Board of Fire Underwriters and the ADA, in each case, as amended, and any
judicial or administrative interpretation thereof, including any judicial order,
consent, decree or judgment applicable to Lessee.
"Applicable Rent Reduction Percentage" means, with respect to any Property,
a fraction, the numerator of which shall be the original principal balance of
the Note corresponding to such Property, and the denominator of which shall be
the sum of all of the original principal balances of the Notes corresponding to
all of the Properties then subject to this Lease, including such Property.
"Base Annual Rental" means $___________________.
"Base Monthly Rental" means an amount equal to 1/12 of the applicable Base
Annual Rental.
"Business Day" means a day on which banks located in Phoenix, Arizona are
not required or authorized to remain closed.
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"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et seq.,
as amended.
"De Minimis Amounts" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms, the use, storage or release of which does not
constitute a violation of, or require regulation or remediation under, any
Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the States.
"Default Rate" means 18% per annum or the highest rate permitted by law,
whichever is less.
"Disclosures" has the meaning set forth in Section 8.B.
"Effective Date" has the meaning set forth in the Preamble.
"Environmental Insurer" means American International Specialty Lines
Insurance Company or such other environmental insurance company as Lessor may
select.
"Environmental Laws" means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to Hazardous Materials and/or the protection of human health or
the environment, by reason of a Release or a Threatened Release of Hazardous
Materials or relating to liability for or costs of Remediation or prevention of
Releases. "Environmental Laws" includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations, rulings,
orders or decrees promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous Materials
Transportation Act; the Resource Conservation and Recovery Act (including but
not limited to Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide
and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; and the River and Harbors Appropriation Act. "Environmental Laws"
also includes, but is not limited to, any present and future federal, state and
local laws, statutes, ordinances, rules, regulations and the like, as well as
common law: conditioning transfer of property upon a negative declaration or
other approval of a Governmental Authority of the environmental condition of the
property; requiring notification or disclosure of Releases or other
environmental condition of any of the Properties to any Governmental Authority
or other person or entity, whether or not in connection with transfer of title
to or interest in property; imposing conditions or requirements relating to
Hazardous Materials in connection with permits or other authorization for lawful
activity; relating to nuisance, trespass or other causes of action related to
Hazardous Materials; and relating to wrongful death, personal injury, or
property or other damage in connection with the physical condition or use of any
of the Properties by reason of the presence of Hazardous Materials in, on, under
or above any of the Properties.
"Environmental Liens" has the meaning set forth in Section 16.D(ix).
4
"Environmental Policies" means the environmental insurance policy or
policies, as applicable, issued by Environmental Insurer to Lessor with respect
to the Properties, which Environmental Policies shall be in form and substance
satisfactory to Lessor in its sole discretion.
"Event of Default" has the meaning set forth in Section 24.
"GAAP" means generally accepted accounting principles consistently applied.
"Governmental Authority" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or quasi-
governmental authority of the United States, the States or any political
subdivision thereof.
"Hazardous Materials" means (i) any toxic substance or hazardous waste,
substance, solid waste, or related material, or any pollutant or contaminant;
(ii) radon gas, asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contains
dielectric fluid containing levels of polychlorinated biphenyls in excess of
federal, state or local safety guidelines, whichever are more stringent, or any
petroleum product; (iii) any substance, gas, material or chemical which is or
may be defined as or included in the definition of "hazardous substances,"
"toxic substances," "hazardous materials," "hazardous wastes," "regulated
substances" or words of similar import under any Environmental Laws; and (iv)
any other chemical, material, gas or substance the exposure to or release of
which is or may be prohibited, limited or regulated by any Governmental
Authority that asserts or may assert jurisdiction over any of the Properties or
the operations or activity at any of the Properties, or any chemical, material,
gas or substance that does or may pose a hazard to the health and/or safety of
the occupants of any of the Properties or the owners and/or occupants of
property adjacent to or surrounding any of the Properties.
"Indemnified Parties" means Lessor, Environmental Insurer and Lender and
their directors, officers, shareholders, trustees, beneficial owners, partners,
members, and any directors, officers, shareholders, trustees, beneficial owners,
partners, members of any beneficial owners, partners or members of Lessor,
Environmental Insurer or Lender, and all employees, agents, servants,
representatives, contractors, subcontractors, affiliates, subsidiaries,
participants, successors and assigns of any of the foregoing, including, but not
limited to, any successors by merger, consolidation or acquisition of all or a
substantial portion of the assets and business of Lessor, Environmental Insurer
or Lender, as applicable.
"Lease Term" shall have the meaning described in Section 4.
"Lease Year" means the 12-month period commencing on the first day of the
calendar year or any other 12-month period as may be approved in writing by
Lessor after the commencement of the Lease Term and each successive 12-month
period thereafter.
"Lender" means FFCA Acquisition Corporation, a Delaware corporation, its
successors and assigns, any successor lender in connection with any loan secured
by Lessor's interest in any of the Properties (including, without limitation,
LaSalle Bank National Association, Trustee for the registered holders of FFCA
Secured Franchise Loan Trust 1999-2 Secured Franchise Loan-Backed Bonds pursuant
to that certain Indenture dated as of September 1, 1999), and any servicer of
any
5
loan secured by Lessor's interest in any of the Properties, including, without
limitation, Franchise Finance Corporation of America, a Delaware corporation.
"Lessee Entities" means, collectively, Lessee and all Affiliates of Lessee.
"Lessor Entities" means, collectively, Lessor and all Affiliates of Lessor.
"Loan Agreement" means the Loan Agreement dated as of May 17, 1999 between
Original Borrower and Lender, as such agreement may be amended from time to time
and any and all replacements or substitutions thereof, which Loan Agreement has
been assumed by Lessor.
"Loan Documents" means, collectively, the Loan Agreement, the Notes, the
Mortgages and all other documents, instruments and agreements executed in
connection therewith or contemplated thereby, all as amended and supplemented
and any and all replacements or substitutions thereof.
"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of loans
that are a part of such Securitization;
(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"Losses" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"Memorandum" means the memorandum or notice of master lease, as applicable,
dated as of the date of this Lease between Lessor and Lessee with respect to the
Properties. A duplicate original Memorandum will be executed and recorded in
the applicable real property records for each Property. Each Memorandum will
contain exhibits with the addresses and store identification numbers for all of
the Properties and the legal description for the applicable Property.
"Mortgages" means, collectively, the mortgages, deeds of trust or deeds to
secure debt, assignments of rents and leases, security agreements and fixture
filings dated as of the date of the Loan Agreement executed by Original Borrower
for the benefit of Lender with respect to the Properties, as such instruments
may be amended, restated and/or supplemented from time to time and any and all
replacements or substitutions thereof, which Mortgages have been assumed by
Lessor.
"Notes" means, collectively, the promissory notes dated as of the date of
the Loan Agreement executed by Original Borrower and payable to Lender with
respect to the Properties, as
6
such notes may be amended, restated and/or substituted from time to time, which
Notes have been assumed by Lessor.
"Original Borrower" means Precision Auto Care, Inc., a Virginia
corporation.
"Other Agreements" means, collectively, all agreements and instruments now
or hereafter entered into between, among or by (1) any of the Lessee Entities,
and, or for the benefit of, (2) any of the Lessor Entities; provided, however,
the term Other Agreements shall not include this Lease.
"Participation" means the granting of any participations in any document
evidencing loan obligations or any or all servicing rights with respect thereto.
"Permitted Facility" means, with respect to all of the Premises, other that
the Premises located in Stratford, Connecticut (FFCA No. 8000-8823), a Precision
Auto Wash facility, and with respect to the Premises located in Stratford,
Connecticut (FFCA No. 8000-8823), a Precision Tune Auto Care facility.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"Personalty" means all machinery, appliances, furniture, equipment, trade
fixtures and other personal property of Lessee from time to time situated on or
used in connection with the Properties; provided, however, the term "Personalty"
shall not include the HVAC, supply fans, exhaust fans, air ducts, hoods, vents,
built-in sinks, built-in countertops, plumbing and electrical fixtures, sign
poles and lighting poles, all of which items are intended to be fixtures as such
term is used within the definition of "Properties".
"Properties" means, collectively, the parcels of real estate described by
Lender Number, Unit Number and address in Exhibit A attached hereto and legally
---------
described in Exhibit A-1 attached hereto, all rights, privileges and
-----------
appurtenances associated therewith, and all buildings, fixtures, other
improvements and personal property of Lessor now or hereafter located on such
real estate (whether or not affixed to such real estate).
"Property" means any one of the Properties.
"Release" means any presence, release, deposit, discharge, emission,
leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Materials.
"Remediation" means any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Materials, any actions to prevent, cure or mitigate any Release,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or any evaluation
relating to any Hazardous Materials.
"Securitization" means one or more sales, dispositions, transfers or
assignments by Lender or any Affiliate of Lender to a special purpose
corporation, trust or other entity identified
7
by Lender or any Affiliate of Lender of notes evidencing obligations to repay
secured or unsecured loans owned by Lender or any Affiliate of Lender (and, to
the extent applicable, the subsequent sale, transfer or assignment of such notes
to another special purpose corporation, trust or other entity identified by
Lender or any Affiliate of Lender), and the issuance of bonds, certificates,
notes or other instruments evidencing interests in pools of such loans, whether
in connection with a permanent asset securitization or a sale of loans in
anticipation of a permanent asset securitization. Each Securitization shall be
undertaken in accordance with all requirements which may be imposed by the
investors or the rating agencies involved in each such sale, disposition,
transfer or assignment or which may be imposed by applicable securities, tax or
other laws or regulations, including, without limitation, laws relating to
Lender's status as a real estate investment trust.
"States" means the states in which the Properties are located.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding any of the
Properties which may result from such Release.
"Title Company" means Lawyers Title Insurance Corporation, or such other
nationally recognized title insurance company reasonably acceptable to Lessor.
"Transfer" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
2. Demise of Properties. In consideration of the rentals and other sums
to be paid by Lessee and of the other terms, covenants and conditions on
Lessee's part to be kept and performed, Lessor hereby leases to Lessee, and
Lessee hereby takes and hires, the Properties. The Properties are leased to
Lessee "AS IS" and "WHERE IS" without representation or warranty by Lessor and
subject to the rights of parties in possession, to the existing state of title,
any state of facts which an accurate survey or physical inspection might reveal,
and all Applicable Regulations now or hereafter in effect. Lessee has examined
each of the Properties and title to each of the Properties and has found all of
the same satisfactory for all of Lessee's purposes.
3. Characterization of Lease. A. Lessor and Lessee intend that:
(i) this Lease constitutes a single master lease of all, but not
less than all, of the Properties and that Lessor and Lessee have
executed and delivered this Lease with the understanding that this
Lease constitutes a unitary, unseverable instrument pertaining to all,
but not less than all, of the Properties, and that neither this Lease
nor the duties, obligations or rights of Lessee may be allocated or
otherwise divided among the Properties by Lessee;
(ii) this Lease is a "true lease" and not a financing lease,
capital lease, mortgage, equitable mortgage, deed of trust, trust
agreement, security agreement or other financing or trust arrangement,
and the economic realities of this Lease are those of a true lease;
and
8
(iii) the business relationship created by this Lease and any
related documents is solely that of a long-term commercial lease
between landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained herein.
X. Xxxxxx and Lessee acknowledge and agree that the Lease Term,
including any term extensions provided for in this Lease, is less than the
remaining economic life of each of the Properties.
C. Lessee waives any claim or defense based upon the characterization
of this Lease as anything other than a true lease and irrevocably waives
any claim or defense which asserts that this Lease is anything other than a
true lease. Lessee covenants and agrees that it will not assert that this
Lease is anything but a true lease. Lessee stipulates and agrees not to
challenge the validity, enforceability or characterization of the lease of
the Properties as a true lease and further stipulates and agrees that
nothing contained in this Lease creates or is intended to create a joint
venture, partnership (either de jure or de facto), equitable mortgage,
trust, financing device or arrangement, security interest or the like.
Lessee shall support the intent of the parties that the lease of the
Properties pursuant to this Lease is a true lease and does not create a
joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the
like, if, and to the extent that, any challenge occurs.
D. Lessee waives any claim or defense based upon the characterization
of this Lease as anything other than a master lease of all of the
Properties and irrevocably waives any claim or defense which asserts that
this Lease is anything other than a master lease. Lessee covenants and
agrees that it will not assert that this Lease is anything but a unitary,
unseverable instrument pertaining to the lease of all, but not less than
all, of the Properties. Lessee stipulates and agrees not to challenge the
validity, enforceability or characterization of the lease of the Properties
as a unitary, unseverable instrument pertaining to the lease of all, but
not less than all, of the Properties. Lessee shall support the intent of
the parties that this Lease is a unitary, unseverable instrument pertaining
to the lease of all, but not less than all, of the Properties, if, and to
the extent that, any challenge occurs.
E. Lessee represents and warrants to Lessor that (i) the Base Annual
Rental is the fair market value for the use of the Properties and was
agreed to by Lessor and Lessee on that basis, and (ii) the execution,
delivery and performance by Lessee of this Lease does not constitute a
transfer of all or any part of the Properties.
F. The expressions of intent, the waivers, the representations and
warranties, the covenants, the agreements and the stipulations set forth in
this Section are a material inducement to Lessor entering into this Lease.
4. Lease Term. The Lease Term for all of the Properties shall commence as
of the Effective Date and shall expire on December 31, 2014, unless terminated
sooner as provided in this Lease. The time period during which this Lease shall
actually be in effect is referred to herein as the "Lease Term."
9
5. Rental and Other Payments. If the Effective Date is a date other than
the first day of the month, no Base Monthly Rental shall be due from Lessee to
Lessor for the month in which the Effective Date falls. Thereafter, on or
before the first day of each succeeding calendar month, Lessee shall pay Lessor
in advance the Base Monthly Rental.
All sums of money required to be paid by Lessee under this Lease which are
not specifically referred to as rent ("Additional Rental") shall be considered
rent although not specifically designated as such. Lessor shall have the same
remedies for nonpayment of Additional Rental as those provided herein for the
nonpayment of Base Annual Rental.
6. Representations and Warranties of Lessor. The representations and
warranties of Lessor contained in this Section are being made to induce Lessee
to enter into this Lease and Lessee has relied and will continue to rely upon
such representations and warranties. Lessor represents and warrants to Lessee
as of the Effective Date as follows:
A. Organization, Authority and Status of Lessor. (i) Lessor has been
duly organized and is validly existing and in good standing under the laws
of the State of Delaware. All necessary action has been taken to authorize
the execution, delivery and performance by Lessor of this Lease and the
other documents, instruments and agreements provided for herein.
(ii) The person who has executed this Lease on behalf of Lessor is
duly authorized so to do.
B. Enforceability. This Lease constitutes the legal, valid and
binding obligation of Lessor, enforceable against Lessor in accordance with
its terms.
7. Representations and Warranties of Lessee. The representations and
warranties of Lessee contained in this Section are being made to induce Lessor
to enter into this Lease and Lessor has relied, and will continue to rely, upon
such representations and warranties. Lessee represents and warrants to Lessor
as of the Effective Date as follows:
A. Organization, Authority and Status of Lessee. (i) Lessee has been
duly organized or formed, is validly existing and in good standing under
the laws of the State of Virginia and is qualified to do business in any
jurisdiction where such qualification is required. All necessary action
has been taken to authorize the execution, delivery and performance by
Lessee of this Lease and of the other documents, instruments and agreements
provided for herein. Lessee is not a "foreign corporation", "foreign
partnership", "foreign trust", "foreign limited liability company" or
"foreign estate", as those terms are defined in the Internal Revenue Code
and the regulations promulgated thereunder. Lessee's United States tax
identification number is correctly set forth on the signature page of this
Lease.
(ii) The person who has executed this Lease on behalf of Lessee
is duly authorized to do so.
B. Enforceability. This Lease constitutes the legal, valid and
binding
10
obligation of Lessee, enforceable against Lessee in accordance with its
terms.
C. Litigation. There are no suits, actions, proceedings or
investigations pending, or, to the best of its knowledge, threatened
against or involving Lessee or any of the Properties before any arbitrator
or Governmental Authority which might reasonably result in any material
adverse change in the contemplated business, condition, worth or operations
of Lessee or any of the Properties.
D. Absence of Breaches or Defaults. Lessee is not in default under
any document, instrument or agreement to which Lessee is a party or by
which Lessee, any of the Properties or any of Lessee's property is subject
or bound. The authorization, execution, delivery and performance of this
Lease and the documents, instruments and agreements provided for herein
will not result in any breach of or default under any document, instrument
or agreement to which Lessee is a party or by which Lessee, any of the
Properties or any of Lessee's property is subject or bound. The
authorization, execution, delivery and performance of this Lease and the
documents, instruments and agreements provided for herein will not violate
any applicable law, statute, regulation, rule, ordinance, code, rule or
order.
E. Liabilities of Lessor. Lessee is not liable for any indebtedness
for money borrowed by Lessor and has not guaranteed any of the debts or
obligations of Lessor.
F. Licenses and Permits. Lessee has obtained all required licenses
and permits, both governmental and private, to use and operate each of the
Properties in the intended manner.
G. Condition of Properties. The Properties, including the equipment
located thereon, are of good workmanship and materials, fully equipped and
operational, in good condition and repair, free from structural defects,
clean, orderly and sanitary, safe, well-lit, landscaped, decorated,
attractive and well-maintained.
H. Utilities. The Properties are served by ample public utilities to
permit full utilization of the Properties for their intended purpose.
I. Area Development; Wetlands. No condemnation or eminent domain
proceedings affecting the Properties have been commenced or, to the best of
Lessee's knowledge, are contemplated. To the best of Lessee's knowledge,
the areas where the Properties are located have not been declared blighted
by any Governmental Authority. To the best of Lessee's knowledge, the
Properties and/or the real property bordering the Properties are not
designated by any governmental authority as a wetlands.
J. Financial Condition; Information Provided to Lessor. The
financial statements, all financial data and all other documents and
information heretofore delivered to Lessor by or with respect to Lessee
and/or the Properties in connection with this Lease and/or relating to
Lessee and/or the Properties are true, correct and complete in all material
respects, and there have been no amendments to such financial statements,
financial data and other documents and information since the date such
financial statements, financial data,
11
documents and other information were prepared or delivered to Lessor or
Lender, and no material adverse change has occurred to any such financial
statements, financial data, documents and other information not disclosed
in writing to Lessor and Lender.
8. Covenants. Lessee covenants to Lessor for so long as this Lease
is in effect as follows:
A. Nonconsolidation Covenants. (i) The annual financial statements
of Lessee, including consolidated financial statements, if any, shall not
contain any note or explanatory information, or otherwise support or
suggest an inference, that is inconsistent with the fact that (a) all of
Lessor's assets are owned by Lessor and (b) Lessor is a separate entity
with its own separate creditors which will be entitled to be satisfied out
of Lessor's assets.
(ii) Lessee will not assume liability for any indebtedness for
money borrowed by Lessor and does not, and will not, guarantee any of
the debts or obligations of Lessor. Lessee will not hold itself out
as being liable for any obligations or indebtedness of Lessor.
(iii) Lessee shall not and shall use its best efforts to cause
its affiliates not to hold Lessor out to the public or to any
individual creditors as being a unified entity with assets and
liabilities in common with Lessee except that Lessor may be included
in Lessee's or its affiliates' reports under the Securities Exchange
Act of 1934, as amended, and its and their consolidated financial
statements, as appropriate, provided such financial statements do not
contain any note or explanatory information, or otherwise support or
suggest an inference, that is inconsistent with the ownership by
Lessor of the Properties or that the Properties are available first to
satisfy any creditors of Lessor.
(iv) Lessee shall conduct its business so as not to mislead
others as to the separate identity of Lessor, and particularly will
avoid the appearance of conducting business on behalf of Lessor.
Without limiting the generality of the foregoing, no oral and written
communications of Lessee, including, without limitation, letters,
invoices, purchase orders, contracts, statements and loan
applications, will be made in the name of Lessor which to the extent
that to do otherwise would materially bear upon the maintenance of
Lessor's separate identity.
(v) Lessee will not act in Lessor's name.
(vi) Where necessary and appropriate, Lessee shall disclose the
independent business status of Lessor to creditors of Lessee, if any.
(vii) The resolutions, agreements and other instruments of
Lessee, if any, underlying the transactions described in this Lease
will be maintained by Lessee.
12
(viii) All transactions between Lessee and Lessor will be no
less fair to each party than they could obtain on an arm's-length
basis.
(ix) The books, records and accounts of Lessee shall at all
times be maintained in a manner permitting the assets and liabilities
of Lessor to be easily separated and readily ascertained from those of
Lessee.
(x) Lessee will not file or cause to be filed a voluntary or
involuntary petition in bankruptcy on behalf of or against Lessor, nor
seek substantive consolidation of the assets and liabilities of Lessor
and Lessee in any bankruptcy or insolvency proceeding during the Lease
Term and for a period of 91 days after the Lease Term.
B. Transfer, Participation and/or Securitization Covenants. (i)
Lessee agrees to cooperate in good faith with Lessor and Lender in
connection with any Transfer, Participation and/or Securitization of any of
the Notes, Mortgages and/or any of the Loan Documents, or any or all
servicing rights with respect thereto, including, without limitation, (X)
providing such documents, financial and other data, and other information
and materials (the "Disclosures") which would typically be required with
respect to Lessee by a purchaser, transferee, assignee, servicer,
participant, investor or rating agency involved with respect to such
Transfer, Participation and/or Securitization, as applicable; provided,
however, Lessee shall not be required to make Disclosures of any
confidential information or any information which has not previously been
made public unless required by applicable federal or state securities laws;
and (Y) amending the terms of this Lease to the extent necessary so as to
satisfy the requirements of purchasers, transferees, assignees, servicers,
participants, investors or selected rating agencies involved in any such
Transfer, Participation or Securitization, so long as such amendments would
not have a material adverse effect upon Lessee or the transactions
contemplated by this Lease.
(ii) Lessee consents to Lessor and Lender providing the
Disclosures, as well as any other information which Lessor and Lender
may now have or hereafter acquire with respect to the Properties or
the financial condition of Lessee to each purchaser, transferee,
assignee, servicer, participant, investor or rating agency involved
with respect to such Transfer, Participation and/or Securitization, as
applicable. Lessee shall pay its own attorney fees and other out-of-
pocket expenses incurred in connection with the performance of its
obligations under this Section 8.B.
C. Compliance Certificate. Within 60 days after the end of each
fiscal year of Lessee, Lessee shall deliver to Lessor such compliance
certificates as Lessor may reasonably require in order to establish that
Lessee is in compliance in all material respects with all of the
obligations, duties and covenants imposed on Lessee pursuant to this Lease.
9. Rentals To Be Net to Lessor. The Base Annual Rental payable hereunder
shall be net to Lessor, so that this Lease shall yield to Lessor the rentals
specified during the Lease Term,
13
and that all costs, expenses and obligations of every kind and nature whatsoever
relating to the Properties shall be performed and paid by Lessee.
10. Taxes and Assessments. Lessee shall pay, prior to the earlier of
delinquency or the accrual of interest on the unpaid balance, all taxes and
assessments of every type or nature assessed against, imposed upon or arising
with respect to Lessor, any of the Properties, this Lease, the rental or other
payments due under this Lease or Lessee during the Lease Term which affect in
any manner the net return realized by Lessor under this Lease, including,
without limitation, the following:
A. All taxes and assessments upon any of the Properties or any part
thereof and upon any Personalty, whether belonging to Lessor or Lessee, or
any tax or charge levied in lieu of such taxes and assessments;
B. All taxes, charges, license fees and or similar fees imposed by
reason of the use of any of the Properties by Lessee; and
C. All excise, transaction, privilege, license, sales, use and other
taxes upon the rental or other payments due under this Lease, the leasehold
estate of either party or the activities of either party pursuant to this
Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay all taxes which are imposed on the rental or other
payments due under this Lease, in no event will Lessee be required to pay any
net income taxes (i.e., taxes which are determined taking into account
deductions for depreciation, interest, taxes and ordinary and necessary business
expenses) or franchise taxes (unless imposed in lieu of other taxes that would
otherwise be the obligation of Lessee under this Lease, including, without
limitation, any "gross receipts tax" or any similar tax based upon gross income
or receipts of Lessor which does not take into account deductions from
depreciation, interest, taxes and/or ordinary or necessary business expenses) of
Lessor, any transfer taxes of Lessor, or any tax imposed with respect to the
sale, exchange or other disposition by Lessor, in whole or in part, of any of
the Properties or Lessor's interest in this Lease (other than transfer or
recordation taxes imposed in connection with the transfer of any of the
Properties to Lessee or the termination of this Lease pursuant to the provisions
of this Lease).
All taxing authorities shall be instructed to send all tax and assessment
invoices to Lessee and Lessee shall promptly provide Lessor and Lender with
copies of all tax and assessment invoices received by Lessee. Upon request,
Lessee shall also provide Lessor and Lender with evidence that such invoices
were paid in a timely fashion. Lessee may, at its own expense, contest or cause
to be contested (in the case of any item involving more than $1,000.00, after
prior written notice to Lessor), by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any item specified in this Section or lien therefor,
provided that (i) such proceeding shall suspend the collection thereof from the
applicable Properties or any interest therein, (ii) neither such Properties nor
any interest therein would be in any danger of being sold, forfeited or lost by
reason of such proceedings, (iii) no Event of Default has occurred, and (iv)
Lessee shall have deposited with Lessor adequate reserves for the payment of the
taxes, together with all interest and penalties thereon, unless paid in full
under protest, or Lessee shall have furnished the security as may be required in
the proceeding or as may
14
be required by Lessor to insure payment of any contested taxes.
11. Utilities. Lessee shall contract, in its own name, for and pay when
due all charges for the connection and use of water, gas, electricity,
telephone, garbage collection, sewer use and other utility services supplied to
the Properties during the Lease Term. Under no circumstances shall Lessor be
responsible for any interruption of any utility service.
12. Insurance. Throughout the Lease Term, Lessee shall maintain with
respect to each of the Properties, at its sole expense, the following types and
amounts of insurance (which may be included under a blanket insurance policy if
all the other terms hereof are satisfied):
A. Insurance against loss, damage or destruction by fire and other
casualty, including theft, vandalism and malicious mischief, flood (for
each of the Properties which is in a location designated by the Federal
Emergency Management Administration as a Special Flood Hazard Area),
earthquake (for each of the Properties which is in an area subject to
destructive earthquakes within recorded history), boiler explosion (for
each of the Properties with a boiler), plate glass breakage, sprinkler
damage (for each of the Properties which has a sprinkler system), all
matters covered by a standard extended coverage endorsement, all matters
covered by a special coverage endorsement commonly known as an "all-risk"
endorsement and such other risks as Lessor may reasonably require, insuring
each of the Properties for not less than 100% of their full insurable
replacement cost.
B. Commercial general liability and property damage insurance,
including a products liability clause, covering Lessor and Lessee against
bodily injury liability, property damage liability and automobile bodily
injury and property damage liability, including without limitation any
liability arising out of the ownership, maintenance, repair, condition or
operation of the Properties or adjoining ways, streets or sidewalks and, if
applicable, insurance covering Lessor and Lessee against liability arising
from the sale of liquor, beer or wine on the Properties. Such insurance
policy or policies shall contain a broad form contractual liability
endorsement under which the insurer agrees to insure Lessee's obligations
under Section 19 hereof to the extent insurable, and a "severability of
interest" clause or endorsement which precludes the insurer from denying
the claim of Lessee or Lessor because of the negligence or other acts of
the other, shall be in amounts of not less than $1,000,000.00 per injury
and occurrence with respect to any insured liability, whether for personal
injury or property damage, or such higher limits as Lessor may reasonably
require from time to time, and shall be of form and substance satisfactory
to Lessor.
C. Business income insurance or rental interruption insurance, as
requested by Lessor, equal to 100% of the Base Annual Rental for a period
of not less than 12 months.
D. State Worker's compensation insurance in the statutorily mandated
limits, employer's liability insurance with limits not less than $500,000
or such greater amount as Lessor may from time to time require and such
other insurance as may be necessary to comply with applicable laws.
E. Such other insurance as may from time to time be reasonably
required by
15
Lessor or Lender in order to protect their respective interests with
respect to the Properties.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the insurer as to
claims against Lessor, Lender and their respective employees and
agents;
(ii) Provide that any "no other insurance" clause in the
insurance policy shall exclude any policies of insurance maintained by
Lessor or Lender and that the insurance policy shall not be brought
into contribution with insurance maintained by Lessor or Lender;
(iii) Contain a standard without contribution mortgage clause
endorsement in favor of Lender and any other party designated by
Lessor;
(iv) Provide that the policy of insurance shall not be
terminated, cancelled or substantially modified without at least
thirty (30) days' prior written notice to Lessor, Lender and to any
other party covered by any standard mortgage clause endorsement;
(v) Provide that the insurer shall not have the option to
restore the applicable Properties if Lessor or Lessee elects to
terminate this Lease in accordance with the terms hereof;
(vi) Be issued by insurance companies licensed to do business in
the states in which the Properties are located and which are rated
A:VI or better by Best's Insurance Guide or are otherwise approved by
Lessor; and
(vii) Provide that the insurer shall not deny a claim nor shall
the insurance be cancelled, invalidated or suspended by (1) any
action, inaction, conduct or negligence of Lessor, Lender or any other
party covered by any standard mortgage clause endorsement, Lessee,
anyone acting for Lessee or any subtenant or other occupant of any of
the Properties, (2) occupancy or use of any of the Properties for
purposes more hazardous than permitted by such policies, (3) any
foreclosure or other proceedings relating to any of the Properties or
change in title to or ownership of any of the Properties, or (4) any
breach or violation by Lessee or any other person of any warranties,
declarations or conditions contained in such policies or the
applications for such policies.
It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Lessee for its acts or
omissions as provided in this Lease. All insurance policies (with the exception
of worker's compensation insurance to the extent not available under statutory
law), shall designate Lessor and Lender as additional named insureds as their
interests may appear and shall be payable as set forth in Section 21 hereof.
All such policies shall be written as primary policies, with deductibles not to
exceed 10% of the amount of coverage. Any other policies, including any policy
now or hereafter carried by Lessor or Lender, shall serve as
16
excess coverage. Lessee shall procure policies for all insurance for periods of
not less than one year and shall provide to Lessor and Lender certificates of
insurance or, upon the request of Lessor or Lender, duplicate originals of
insurance policies evidencing that insurance satisfying the requirements of this
Lease is in effect at all times. In the event of any transfer by Lessor of
Lessor's interest in any of the Properties or any financing or refinancing of
Lessor's interest in any of the Properties, Lessee shall, upon not less than ten
(10) days' prior written notice, deliver to Lessor or any Lender providing such
financing or refinancing, as the case may be, certificates of all insurance
required to be maintained by Lessee hereunder naming such transferee or such
Lender, as the case may be, as an additional named insured to the extent
required herein effective as of the date of such transfer, financing or
refinancing.
13. Tax and Insurance Impound. Upon the occurrence of an Event of Default,
Lessor may require Lessee to pay to Lessor sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to the next one
year of taxes, assessments and/or insurance premiums for each of the Properties.
Upon such requirement, Lessor will estimate the amounts needed for such purposes
and will notify Lessee to pay the same to Lessor in equal monthly installments,
as nearly as practicable, in addition to all other sums due under this Lease.
Should additional funds be required at any time, Lessee shall pay the same to
Lessor on demand. Lessee shall advise Lessor of all taxes and insurance bills
which are due and shall cooperate fully with Lessor in assuring that the same
are paid timely. Lessor may deposit all impounded funds in accounts insured by
any federal or state agency and may commingle such funds with other funds and
accounts of Lessor. Interest or other gains from such funds, if any, shall be
the sole property of Lessor. In the event of any default by Lessee, Lessor may
apply all impounded funds against any sums due from Lessee to Lessor. Lessor
shall give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.
14. Payment of Rental and Other Sums. All rental and other sums which
Lessee is required to pay hereunder shall be the unconditional obligation of
Lessee and shall be payable in full when due without any setoff, abatement,
deferment, deduction or counterclaim whatsoever. Upon execution of this Lease,
Lessee shall establish arrangements whereby payments of the Base Monthly Rental
and impound payments, if any, are transferred by wire or other means directly
from Lessee's bank account to such account as Lessor may designate; provided,
however, upon notice from Lender to Lessee and Lessor delivered in the manner
set forth in Section 29, Lessee shall deliver all payments of Base Monthly
Rental as specified in such notice from Lender. Any delinquent payment (that is,
any payment not made within five calendar days after the date when due) shall,
in addition to any other remedy of Lessor, incur a late charge of 10% (which
late charge is intended to compensate Lessor for the cost of handling and
processing such delinquent payment and should not be considered interest) and
bear interest at the Default Rate, such interest to be computed from and
including the date such payment was due through and including the date of the
payment; provided, however, in no event shall Lessee be obligated to pay a sum
of late charge and interest higher than the maximum legal rate then in effect.
15. Use. Except as set forth below, each of the Properties shall be used
solely for the operation of a Permitted Facility in accordance with the
standards of operations then in effect on a system-wide basis, and for no other
purpose. Lessee shall occupy the Properties promptly following the Effective
Date and, except as set forth below and except during periods when any
17
of the Properties is untenantable by reason of fire or other casualty or
condemnation (provided, however, during all such periods while any of the
Properties is untenantable, Lessee shall strictly comply with the terms and
conditions of Section 21 of this Lease), Lessee shall at all times during the
Lease Term occupy each of the Properties and shall diligently conduct its
business on each of the Properties as a Permitted Facility. Lessee may cease
diligent operation of business at any of the Properties for a period not to
exceed 90 days and may do so only once with respect to each Property within any
five-year period during the Lease Term. If Lessee does discontinue operation as
permitted by this Section, Lessee shall (i) give written notice to Lessor within
10 days after Lessee elects to cease operation, (ii) provide adequate protection
and maintenance of any such Properties during any period of vacancy, (iii)
comply with all Applicable Regulations and otherwise comply with the terms and
conditions of this Lease other than the continuous use covenant set forth in
this Section, and (iv) pay all costs necessary to restore such Properties to
their condition on the day operation of the business ceased at such time as such
Properties are reopened for Lessee's business operations or other substituted
use approved by Lessor as contemplated below. Notwithstanding anything herein to
the contrary, Lessee shall pay the Base Monthly Rental on the first day of each
month during any period in which Lessee discontinues operation.
Lessee shall not, by itself or through any assignment, sublease or other
type of transfer, convert any of the Properties to an alternative use during the
Lease Term without Lessor's consent, which consent shall not be unreasonably
withheld or delayed. Lessor may consider any or all of the following in
determining whether to grant its consent, without being deemed to be
unreasonable: (i) whether the rental paid to Lessor would be equal to or greater
than the anticipated rental assuming continued existing use, (ii) whether the
proposed rental to be paid to Lessor is reasonable considering the converted use
of the Properties and the customary rental prevailing in the community for such
use, (iii) whether the converted use will be consistent with the highest and
best use of the Properties, and (iv) whether the converted use will increase
Lessor's risks or decrease the value of the Properties.
16. Compliance with Laws, Restrictions, Covenants and Encumbrances.
A. Lessee's use and occupation of each of the Properties, and the
condition thereof, shall, at Lessee's sole cost and expense, comply fully
with all Applicable Regulations and all restrictions, covenants and
encumbrances of record with respect to each of the Properties. In addition
to the other requirements of this Section, Lessee shall, at all times
throughout the Lease Term, comply with all Applicable Regulations,
including, without limitation, in connection with any maintenance, repairs
and replacements of the Properties undertaken by Lessee as required by
Section 17 of this Lease.
B. Lessee will not permit any act or condition to exist on or about
any of the Properties which will increase any insurance rate thereon,
except when such acts are required in the normal course of its business and
Lessee shall pay for such increase.
C. Without limiting the generality of the other provisions of this
Section, Lessee agrees that it shall be responsible for complying in all
respects with the Americans with Disabilities Act of 1990, as such act may
be amended from time to time, and all regulations promulgated thereunder
(collectively, the "ADA"), as it affects the Properties.
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Lessee agrees that it will defend, indemnify and hold harmless the
Indemnified Parties from and against any and all Losses caused by, incurred
or resulting from Lessee's failure to comply with its obligations under
this Section.
D. Lessee represents and warrants to Lessor and Environmental Insurer
as follows:
(i) None of the Properties nor Lessee are in violation of, or
subject to, any pending or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any
Environmental Laws, and this representation and warranty would
continue to be true and correct following disclosure to the applicable
Governmental Authorities of all relevant facts, conditions and
circumstances, if any, pertaining to the Properties.
(ii) No permits, licenses or similar authorizations to
construct, occupy, operate or use any buildings, improvements,
fixtures and equipment forming a part of any of the Properties by
reason of any Environmental Laws have been obtained or are required to
be obtained.
(iii) No Hazardous Materials have been used, handled,
manufactured, generated, produced, stored, treated, processed,
transferred, disposed of or otherwise Released in, on, under, from or
about any of the Properties, except in De Minimis Amounts.
(iv) The Properties do not contain Hazardous Materials, other
than in De Minimis Amounts, or underground storage tanks.
(v) There is no threat of any Release migrating to any of the
Properties.
(vi) There is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in
connection with any of the Properties.
(vii) Lessee has not received any written or oral notice or
other communication from any person or entity (including but not
limited to a Governmental Authority) relating to Hazardous Materials
or Remediation thereof, of possible liability of any person or entity
pursuant to any Environmental Law, other environmental conditions in
connection with any of the Properties, or any actual or potential
administrative or judicial proceedings in connection with any of the
foregoing.
(viii) Lessee has truthfully and fully provided to Lessor, in
writing, any and all information relating to environmental conditions
in, on, under or from the Properties that is known to Lessee and that
is contained in Lessee's files and records, including but not limited
to any reports relating to Hazardous Materials in, on, under or from
any of the Properties.
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(ix) All uses and operations on or of the Properties, whether by
Lessee or any other person or entity, have been in compliance with all
Environmental Laws and permits issued pursuant thereto; there have
been no Releases in, on, under or from any of the Properties, except
in De Minimis Amounts; there are no Hazardous Materials in, on, or
under any of the Properties, except in De Minimis Amounts; and the
Properties have been kept free and clear of all liens and other
encumbrances imposed pursuant to any Environmental Law (the
"Environmental Liens"). Lessee has not allowed any tenant or other
user of any of the Properties to do any act that materially increased
the dangers to human health or the environment, posed an unreasonable
risk of harm to any person or entity (whether on or off the
Properties), impaired the value of any of the Properties, is contrary
to any requirement of any insurer, constituted a public or private
nuisance, constituted waste, or violated any covenant, condition,
agreement or easement applicable to any of the Properties.
E. Lessee covenants to Lessor and Environmental Insurer during the
Lease Term that: (i) the Properties shall not be in violation of or subject
to any investigation or inquiry by any Governmental Authority or to any
remedial obligations under any Environmental Laws. If any such
investigation or inquiry is initiated, Lessee shall promptly notify Lessor;
(ii) all uses and operations on or of each of the Properties, whether by
Lessee or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (iii) there shall
be no Releases in, on, under or from any of the Properties, except in De
Minimis Amounts; (iv) there shall be no Hazardous Materials in, on, or
under any of the Properties, except in De Minimis Amounts; (v) Lessee shall
keep each of the Properties free and clear of all Environmental Liens,
whether due to any act or omission of Lessee or any other person or entity;
(vi) Lessee shall, at its sole cost and expense, fully and expeditiously
cooperate in all activities pursuant to subsection F below, including but
not limited to providing all relevant information and making knowledgeable
persons available for interviews; (vii) Lessee shall, at its sole cost and
expense, perform any environmental site assessment or other investigation
of environmental conditions in connection with any of the Properties as may
be reasonably requested by Lessor (including but not limited to sampling,
testing and analysis of soil, water, air, building materials and other
materials and substances whether solid, liquid or gas), and share with
Lessor and Environmental Insurer the reports and other results thereof, and
Lessor, Environmental Insurer and the other Indemnified Parties shall be
entitled to rely on such reports and other results thereof; (viii) Lessee
shall, at its sole cost and expense, comply with all reasonable written
requests of Lessor to (1) reasonably effectuate Remediation of any
condition (including but not limited to a Release) in, on, under or from
any of the Properties; (2) comply with any Environmental Law; (3) comply
with any directive from any Governmental Authority; and (4) take any other
reasonable action necessary or appropriate for protection of human health
or the environment; (ix) Lessee shall not do or allow any tenant or other
user of any of the Properties to do any act that materially increases the
dangers to human health or the environment, poses an unreasonable risk of
harm to any person or entity (whether on or off any of the Properties),
impairs or may impair the value of any of the Properties, is contrary to
any requirement of any insurer, constitutes a public or private nuisance,
constitutes waste, or violates any covenant, condition, agreement or
20
easement applicable to any of the Properties; and (x) Lessee shall
immediately notify Lessor in writing of (A) any presence of Releases or
Threatened Releases in, on, under, from or migrating towards any of the
Properties; (B) any non-compliance with any Environmental Laws related in
any way to any of the Properties; (C) any actual or potential Environmental
Lien; (D) any required or proposed Remediation of environmental conditions
relating to any of the Properties; and (E) any written or oral notice or
other communication of which Lessee becomes aware from any source
whatsoever (including but not limited to a Governmental Authority) relating
in any way to Hazardous Materials or Remediation thereof, possible
liability of any person or entity pursuant to any Environmental Law, other
environmental conditions in connection with any of the Properties, or any
actual or potential administrative or judicial proceedings in connection
with anything referred to in this Section.
X. Xxxxxx, Lender, Environmental Insurer and any other person or
entity designated by Lessor, including but not limited to any receiver, any
representative of a Governmental Authority, and any environmental
consultant, shall have the right, but not the obligation, to enter upon the
Properties at all reasonable times (including, without limitation, in
connection with any Securitization, Participation or Transfer or in
connection with a proposed sale or conveyance of any of the Properties or a
proposed financing or refinancing secured by any of the Properties or in
connection with the exercise of any remedies set forth in this Lease, the
Mortgages or the other Loan Documents, as applicable) to assess any and all
aspects of the environmental condition of the Properties and its use,
including but not limited to conducting any environmental assessment or
audit (the scope of which shall be determined in the sole and absolute
discretion of the party conducting the assessment) and taking samples of
soil, groundwater or other water, air, or building materials, and
conducting other invasive testing. Lessee shall cooperate with and provide
access to Lessor, Lender, Environmental Insurer and any other person or
entity designated by Lessor. Any such assessment and investigation shall
be at Lessee's sole cost and expense.
G. Lessee shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless each of the Indemnified Parties for,
from and against any and all Losses (excluding Losses suffered by an
Indemnified Party directly arising out of such Indemnified Party's gross
negligence or willful misconduct; provided, however, that the term "gross
negligence" shall not include gross negligence imputed as a matter of law
to any of the Indemnified Parties solely by reason of the Lessor's interest
in any of the Properties or Lessor's failure to act in respect of matters
which are or were the obligation of Lessee under this Lease) and costs of
Remediation (whether or not performed voluntarily), engineers' fees,
environmental consultants' fees, and costs of investigation (including but
not limited to sampling, testing, and analysis of soil, water, air,
building materials and other materials and substances whether solid, liquid
or gas) imposed upon or incurred by or asserted against any Indemnified
Parties, and directly or indirectly arising out of or in any way relating
to any one or more of the following: (i) any presence of any Hazardous
Materials in, on, above, or under any of the Properties; (ii) any past or
present Release or Threatened Release in, on, above, under or from any of
the Properties; (iii) any activity by Lessee, any person or entity
affiliated with Lessee or any other tenant or other user of any of the
Properties in connection with any actual, proposed or threatened use,
treatment, storage,
21
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement,
removal, handling, transfer or transportation to or from any of the
Properties of any Hazardous Materials at any time located in, under, on or
above any of the Properties; (iv) any activity by Lessee, any person or
entity affiliated with Lessee or any other tenant or other user of any of
the Properties in connection with any actual or proposed Remediation of any
Hazardous Materials at any time located in, under, on or above any of the
Properties, whether or not such Remediation is voluntary or pursuant to
court or administrative order, including but not limited to any removal,
remedial or corrective action; (v) any past, present or threatened non-
compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in connection with any of the Properties
or operations thereon, including but not limited to any failure by Lessee,
any person or entity affiliated with Lessee or any other tenant or other
user of any of the Properties to comply with any order of any Governmental
Authority in connection with any Environmental Laws; (vi) the imposition,
recording or filing or the threatened imposition, recording or filing of
any Environmental Lien encumbering any of the Properties; (vii) any
administrative processes or proceedings or judicial proceedings in any way
connected with any matter addressed in this Section; (viii) any past,
present or threatened injury to, destruction of or loss of natural
resources in any way connected with any of the Properties, including but
not limited to costs to investigate and assess such injury, destruction or
loss; (ix) any acts of Lessee, any person or entity affiliated with Lessee
or any other tenant or user of any of the Properties in arranging for
disposal or treatment, or arranging with a transporter for transport for
disposal or treatment, of Hazardous Materials owned or possessed by Lessee,
any person or entity affiliated with Lessee or any other tenant or user of
any of the Properties, at any facility or incineration vessel owned or
operated by another person or entity and containing such or similar
Hazardous Materials; (x) any acts of Lessee, any person or entity
affiliated with Lessee or any other tenant or user of any of the
Properties, in accepting any Hazardous Materials for transport to disposal
or treatment facilities, incineration vessels or sites selected by Lessee,
any person or entity affiliated with Lessee or any other tenant or user of
any of the Properties, from which there is a Release, or a Threatened
Release of any Hazardous Materials which causes the incurrence of costs for
Remediation; (xi) any personal injury, wrongful death, or property damage
arising under any statutory or common law or tort law theory, including but
not limited to damages assessed for the maintenance of a private or public
nuisance or for the conducting of an abnormally dangerous activity on or
near any of the Properties; and (xii) any misrepresentation or inaccuracy
in any representation or warranty or material breach or failure to perform
any covenants or other obligations pursuant to this Section.
H. The obligations of Lessee and the rights and remedies of Lessor
under the foregoing subsections D through G shall survive the termination,
expiration and/or release of this Lease.
17. Condition of Properties; Maintenance. Lessee, at its own expense, will
maintain all parts of each of the Properties in good repair and sound condition,
except for ordinary wear and tear, and will take all action and will make all
structural and non-structural, foreseen and unforeseen and ordinary and
extraordinary changes and repairs which may be required to keep
22
all parts of each of the Properties in good repair and sound condition. Lessee
waives any right to (i) require Lessor to maintain, repair or rebuild all or any
part of any of the Properties or (ii) make repairs at the expense of Lessor,
pursuant to any Applicable Regulations at any time in effect.
18. Waste; Alterations and Improvements. Lessee shall not commit actual or
constructive waste upon any of the Properties. Lessee shall not alter the
exterior, structural, plumbing or electrical elements of any of the Properties
in any manner without the consent of Lessor, which consent shall not be
unreasonably withheld or conditioned; provided, however, Lessee may undertake
nonstructural alterations to any of the Properties costing less than $50,000.00
without Lessor's consent. If Lessor's consent is required hereunder and Lessor
consents to the making of any such alterations, the same shall be made according
to plans and specifications approved by Lessor and subject to such other
conditions as Lessor shall require. All alterations shall be made by Lessee at
Lessee's sole expense by licensed contractors and in accordance with all
applicable laws governing such alterations. Any work at any time commenced by
Lessee on any of the Properties shall be prosecuted diligently to completion,
shall be of good workmanship and materials and shall comply fully with all the
terms of this Lease. Upon completion of any alterations, Lessee shall promptly
provide Lessor with (i) evidence of full payment to all laborers and materialmen
contributing to the alterations, (ii) an architect's certificate certifying the
alterations to have been completed in conformity with the plans and
specifications, (iii) a certificate of occupancy (if the alterations are of such
a nature as would require the issuance of a certificate of occupancy), and (iv)
any other documents or information reasonably requested by Lessor. Any addition
to or alteration of any of the Properties shall automatically be deemed a part
of the Properties and belong to Lessor, and Lessee shall execute and deliver to
Lessor such instruments as Lessor may require to evidence the ownership by
Lessor of such addition or alteration. Lessee shall execute and file or record,
as appropriate, a "Notice of Non-Responsibility," or any equivalent notice
permitted under applicable law in the states where the applicable Properties are
located.
19. Indemnification. Lessee shall indemnify, protect, defend and hold
harmless each of the Indemnified Parties from and against any and all Losses
(excluding Losses suffered by an Indemnified Party arising out of the gross
negligence or willful misconduct of such Indemnified Party; provided, however,
that the term "gross negligence" shall not include gross negligence imputed as a
matter of law to any of the Indemnified Parties solely by reason of the Lessor's
interest in any of the Properties or Lessor's failure to act in respect of
matters which are or were the obligation of Lessee under this Lease) caused by,
incurred or resulting from Lessee's operations of or relating in any manner to
any of the Properties, whether relating to their original design or
construction, latent defects, alteration, maintenance, use by Lessee or any
person thereon, supervision or otherwise, or from any breach of, default under,
or failure to perform, any term or provision of this Lease by Lessee, its
officers, employees, agents or other persons, or to which any Indemnified Party
is subject because of Lessor's interest in any of the Properties, including,
without limitation, Losses arising from (1) any accident, injury to or death of
any person or loss of or damage to property occurring in, on or about any of the
Properties or portion thereof or on the adjoining sidewalks, curbs, parking
areas,
23
streets or ways, (2) any use, non-use or condition in, on or about, or
possession, alteration, repair, operation, maintenance or management of, any of
the Properties or any portion thereof or on the adjoining sidewalks, curbs,
parking areas, streets or ways, (3) any representation or warranty made herein
by Lessee, in any certificate delivered in connection herewith or in any other
agreement to which Lessee is a party or pursuant thereto being false or
misleading in any material respect as of the date of such representation or
warranty was made, (4) performance of any labor or services or the furnishing of
any materials or other property in respect to any of the Properties or any
portion thereof, (5) any taxes, assessments or other charges which Lessee is
required to pay under Section 10, (6) any lien, encumbrance or claim arising on
or against any of the Properties or any portion thereof under any Applicable
Regulation or otherwise which Lessee is obligated hereunder to remove and
discharge, or the failure to comply with any Applicable Regulation, (7) the
claims of any invitees, patrons, licensees or subtenants of all or any portion
of any of the Properties or any Person acting through or under Lessee or
otherwise acting under or as a consequence of this Lease or any sublease, (8)
any act or omission of Lessee or its agents, contractors, licensees, subtenants
or invitees, (9) any contest referred to in Section 10, and (10) the sale of
liquor, beer or wine on any of the Properties. It is expressly understood and
agreed that Lessee's obligations under this Section shall survive the expiration
or earlier termination of this Lease for any reason.
20. Quiet Enjoyment. So long as Lessee shall pay the rental and other sums
herein provided and shall keep and perform all of the terms, covenants and
conditions on its part herein contained, Lessee shall have, subject and
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Properties. Notwithstanding the foregoing, however, in no event
shall Lessee be entitled to bring any action against Lessor to enforce its
rights hereunder if an Event of Default shall have occurred and be continuing.
21. Condemnation or Destruction. A. In the event of a taking of all or any
part of any of the Properties for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of condemnation or eminent
domain or by agreement between Lessor, Lessee and those authorized to exercise
such right ("Taking") or the commencement of any proceedings or negotiations
which might result in a Taking or any damage to or destruction of any of the
Properties or any part thereof ("Casualty"), Lessee will promptly give written
notice thereof to Lessor, generally describing the nature and extent of such
Taking, proceedings, negotiations or Casualty and including copies of any
documents or notices received in connection therewith. Thereafter, Lessee shall
promptly send Lessor copies of all correspondence and pleadings relating to any
such Taking, proceedings, negotiations or Casualty. During all periods of time
following a Casualty, Lessee shall ensure that the subject Property is secure
and does not pose any risk of harm to adjoining property owners or occupants or
third-parties.
B. In the event of a Taking of the whole of any of the Properties,
other than for temporary use ("Total Taking"), the obligations of Lessee
with respect to such Property only shall terminate as of the date of the
Total Taking, but this Lease shall otherwise continue in full force and
effect with respect to the remaining Properties. From and after the date
of a Total Taking, the Base Annual Rental shall be reduced by an amount
equal to the product of (i) the Applicable Rent Reduction Percentage for
the Property subject to the Total Taking, and (ii) the Base Annual Rental
in effect as of the date of such Total Taking (the "Adjustment"). If the
date of such Total Taking is other than the first day of a month, the Base
Annual Rental payable for the month in which such Total Taking occurs shall
be apportioned based on such Adjustment as of the date of the Total Taking.
Lessee's
24
obligations to Lessor under Section 19 of this Lease with respect to such
Property and Lessee's obligation to pay all other sums of money under this
Lease (whether payable to Lessor or to a third-party) which accrue prior to
the date of such Total Taking shall survive the partial termination of this
Lease with respect to such Property. A Total Taking shall include a taking
of substantially all of any Property if, in the sole determination of
Lessor, the remainder of such Property is not useable and cannot be made
useable for a Permitted Facility. Lessor shall be entitled to receive the
entire award or payment in connection with a Total Taking without deduction
for any estate vested in Lessee by this Lease. Lessee hereby expressly
assigns to Lessor all of its right, title and interest in and to every such
award or payment and agrees that Lessee shall not be entitled to any award
or payment for the value of Lessee's leasehold interest in this Lease.
Lessee shall be entitled to claim and receive any award or payment from the
condemning authority expressly granted for the taking of Personalty, the
interruption of its business and moving expenses, but only if such claim or
award does not adversely affect or interfere with the prosecution of
Lessor's claim for the Total Taking or otherwise reduce the amount
recoverable by Lessor for the Total Taking.
C. In the event of a Taking of all or any part of any of the
Properties for a temporary use ("Temporary Taking"), this Lease shall
remain in full force and effect without any reduction of Base Annual
Rental, Additional Rental or any other sum payable hereunder. Except as
provided below and subject to the terms and provisions of the Mortgages,
Lessee shall be entitled to the entire award for a Temporary Taking,
whether paid by damages, rent or otherwise, unless the period of occupation
and use by the condemning authorities shall extend beyond the date of
expiration of this Lease, in which case the award made for such Taking
shall be apportioned between Lessor and Lessee as of the date of such
expiration. At the termination of any such Temporary Taking, Lessee will,
at its own cost and expense and pursuant to the terms of Section 18 above,
promptly commence and complete the restoration of the Property affected by
such Temporary Taking; provided, however, Lessee shall not be required to
restore such Property if the Lease Term shall expire prior to, or within
one year after, the date of termination of such Temporary Taking, and in
such event Lessor shall be entitled to recover all damages and awards
arising out of the failure of the condemning authority to repair and
restore such Property at the expiration of such Temporary Taking.
D. In the event of a Taking which is not a Total Taking or a
Temporary Taking ("Partial Taking") or of a Casualty, all awards,
compensation or damages shall be paid to Lessor, and Lessor shall have the
option to (i) terminate this Lease with respect to the Property affected,
provided that Lessor shall have obtained Lender's prior written consent, by
notifying Lessee within 60 days after Lessee gives Lessor notice of such
Casualty or that title has vested in the taking authority or (ii) continue
this Lease in effect, which election may be evidenced by either a notice
from Lessor to Lessee or Lessor's failure to notify Lessee that Lessor has
elected to terminate this Lease with respect to such Property within such
60-day period. Lessee shall have a period of 60 days after Lessor's notice
that it has elected to terminate this Lease with respect to such Property
during which to elect to continue this Lease with respect to such Property
on the terms herein provided. If Lessor elects to terminate this Lease with
respect to such Property and Lessee does not elect to continue this Lease
with respect to such Property or shall fail
25
during such 60-day period to notify Lessor of Lessee's intent to continue
this Lease with respect to such Property, then this Lease shall terminate
with respect to such Property as of the last day of the month during which
such period expired. Lessee shall then immediately vacate and surrender
such Property, all obligations of either party hereunder with respect to
such Property shall cease as of the date of termination (provided, however,
Lessee's obligations to Lessor under any indemnification provisions of this
Lease with respect to such Property (including, without limitation,
Sections 16 and 19) and Lessee's obligations to pay Base Annual Rental,
Additional Rental and all other sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior to the
date of termination shall survive such termination), the Base Annual Rental
shall be reduced by an amount equal to the product of (i) the Applicable
Rent Reduction Percentage for such Property and (ii) the Base Annual Rental
in effect as of the date of such Partial Taking or Casualty, and Lessor may
retain all such awards, compensation or damages. This Lease shall continue
in full force and effect with respect to all other Properties. If Lessor
elects not to terminate this Lease with respect to such Property, or if
Lessor elects to terminate this Lease with respect to such Property but
Lessee elects to continue this Lease with respect to such Property, then
this Lease shall continue in full force and effect on the following terms:
(i) all Base Annual Rental, Additional Rental and other sums and
obligations due under this Lease shall continue unabated, and (ii) Lessee
shall promptly commence and diligently prosecute restoration of such
Property to the same condition, as nearly as practicable, as prior to such
Partial Taking or Casualty as approved by Lessor. Subject to the terms and
provisions of the Mortgages, Lessor shall promptly make available in
installments as restoration progresses an amount up to but not exceeding
the amount of any award, compensation or damages received by Lessor after
deducting all costs, fees and expenses incident to the collection thereof,
including all costs and expenses incurred by Lessor and Lender in
connection therewith (the "Net Restoration Amount"), upon request of Lessee
accompanied by evidence reasonably satisfactory to Lessor that such amount
has been paid or is due and payable and is properly a part of such costs
and that Lessee has complied with the terms of Section 18 above in
connection with the restoration. Prior to the disbursement of any portion
of the Net Restoration Amount with respect to a Casualty, Lessee shall
provide evidence reasonably satisfactory to Lessor of the payment of
restoration expenses by Lessee up to the amount of the insurance deductible
applicable to such Casualty. Lessor shall be entitled to keep any portion
of the Net Restoration Amount which may be in excess of the cost of
restoration, and Lessee shall bear all additional costs, fees and expenses
of such restoration in excess of the Net Restoration Amount. If this Lease
is terminated with respect to any Property as a result of a Casualty,
simultaneously with such termination Lessee shall pay Lessor an amount
equal to the insurance deductible applicable to such Casualty.
E. Any loss under any property damage insurance required to be
maintained by Lessee shall be adjusted by Lessor and Lessee. Any award
relating to a Total Taking or a Partial Taking shall be adjusted by Lessor
or, at Lessor's election, Lessee. Notwithstanding the foregoing or any
other provisions of this Section to the contrary, if at the time of any
Taking or any Casualty or at any time thereafter Lessee shall be in default
under this Lease and such default shall be continuing, Lessor is hereby
authorized and
26
empowered but shall not be obligated, in the name and on behalf of Lessee
and otherwise, to file and prosecute Lessee's claim, if any, for an award
on account of such Taking or for insurance proceeds on account of such
Casualty and to collect such award or proceeds and apply the same, after
deducting all costs, fees and expenses incident to the collection thereof,
to the curing of such default and any other then existing default under
this Lease and/or to the payment of any amounts owed by Lessee to Lessor
under this Lease, in such order, priority and proportions as Lessor in its
discretion shall deem proper.
F. Notwithstanding the foregoing, nothing in this Section 21 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease, including,
without limitation, those provisions set forth in Section 3 of this Lease.
22. Inspection. Lessor and its authorized representatives shall have the
right, upon giving reasonable advance notice, to enter any of the Properties or
any part thereof at reasonable times in order to inspect the same and make
photographic or other evidence concerning Lessee's compliance with the terms of
this Lease or in order to show the Properties to prospective purchasers and
lenders. Lessee hereby waives any claim for damages for any injury or
inconvenience to or interference with Lessee's business, any loss of occupancy
or quiet enjoyment of any of the Properties and any other loss occasioned by
such entry so long as Lessor shall have used reasonable efforts not to
unreasonably interrupt Lessee's normal business operations. Lessee shall keep
and maintain at the Properties or Lessee's corporate headquarters full, complete
and appropriate books of account and records of Lessee's business relating to
the Properties in accordance with GAAP. Lessee's books and records shall at all
times be open for inspection by Lessor, Lender and their respective auditors or
other authorized representatives and shall show such information as is
reasonably necessary to determine compliance with Lessor's obligations under the
Loan Documents.
23. Intentionally Omitted.
24. Default, Remedies and Measure of Damages. A. Each of the following
shall be an event of default under this Lease (each, an "Event of Default"):
(i) If any representation or warranty of Lessee set forth in
this Lease is false in any material respect, or if Lessee renders any
false statement or account;
(ii) If any rent or other monetary sum due under this Lease is
not paid within five days from the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lessor
shall not be entitled to exercise its remedies set forth below unless
and until Lessor shall have given Lessee notice thereof and a period
of five days from the delivery of such notice shall have elapsed
without such Event of Default being cured;
(iii) If Lessee fails to pay, prior to delinquency, any taxes,
assessments or other charges the failure of which to pay will result
in the imposition of a lien against any of the Properties pursuant to
Applicable Regulations;
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(iv) If Lessee becomes insolvent within the meaning of the
Code, files or notifies Lessor that it intends to file a petition
under the Code, initiates a proceeding under any similar law or
statute relating to bankruptcy, insolvency, reorganization, winding up
or adjustment of debts (collectively, hereinafter, an "Action"),
becomes the subject of either a petition under the Code or an Action,
or is not generally paying its debts as the same become due;
(v) If Lessee vacates or abandons any of the Properties other
than in accordance with the provisions of Section 15 of this Lease;
(vi) If Lessee fails to observe or perform any of the other
covenants, conditions, or obligations of this Lease; provided,
however, if any such failure does not involve the payment of any
monetary sum, is not willful or intentional, does not place any rights
or property of Lessor in immediate jeopardy, and is within the
reasonable power of Lessee to promptly cure after receipt of notice
thereof, all as determined by Lessor in its reasonable discretion,
then such failure shall not constitute an Event of Default hereunder,
unless otherwise expressly provided herein, unless and until Lessor
shall have given Lessee notice thereof and a period of 30 days shall
have elapsed, during which period Lessee may correct or cure such
failure, upon failure of which an Event of Default shall be deemed to
have occurred hereunder without further notice or demand of any kind
being required. If such failure cannot reasonably be cured within
such 30-day period, as determined by Lessor in its reasonable
discretion, and Lessee is diligently pursuing a cure of such failure,
then Lessee shall have a reasonable period to cure such failure beyond
such 30-day period, which shall in no event exceed 90 days after
receiving notice of such failure from Lessor. If Lessee shall fail to
correct or cure such failure within such 90-day period, an Event of
Default shall be deemed to have occurred hereunder without further
notice or demand of any kind being required;
(vii) If there is an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace periods,
under any of the Other Agreements; or
(viii) If a final, nonappealable judgment is rendered by a court
against Lessee which has a material adverse effect on either the
ability to conduct business at any of the Properties for its intended
use or Lessee's ability to perform its obligations under this Lease,
or is in the amount of $100,000.00 or more, and in either event is not
discharged or provision made for such discharge within 60 days from
the date of entry thereof.
B. Upon the occurrence of an Event of Default, with or without
notice or demand, except the notice prior to default required under certain
circumstances by subsection A. above or such other notice as may be
required by statute and cannot be waived by Lessee (all other notices being
hereby waived), Lessor shall be entitled to exercise, at its option,
concurrently, successively, or in any combination, all remedies available
at law or in equity, including without limitation, any one or more of the
following as well as the applicable remedies set forth on the attached
Schedule I:
----------
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(i) To terminate this Lease, whereupon Lessee's right to
possession of the Properties shall cease and this Lease, except as to
Lessee's liability, shall be terminated.
(ii) To reenter and take possession of any or all of the
Properties, any or all Personalty located on or at any or all of the
Properties in which Lessor shall have a landlord's lien and/or
security interest, and, to the extent permissible, all franchises,
licenses, area development agreements, permits and other rights or
privileges of Lessee pertaining to the use and operation of any or all
of the Properties and to expel Lessee and those claiming under or
through Lessee, without being deemed guilty in any manner of trespass
or becoming liable for any loss or damage resulting therefrom, without
resort to legal or judicial process, procedure or action. No notice
from Lessor hereunder or under a forcible entry and detainer statute
or similar law shall constitute an election by Lessor to terminate
this Lease unless such notice specifically so states. If Lessee shall,
after default, voluntarily give up possession of any of the Properties
to Lessor, deliver to Lessor or its agents the keys to any of the
Properties, or both, such actions shall be deemed to be in compliance
with Lessor's rights and the acceptance thereof by Lessor or its
agents shall not be deemed to constitute a termination of this Lease.
Lessor reserves the right following any reentry and/or reletting to
exercise its right to terminate this Lease by giving Lessee written
notice thereof, in which event this Lease will terminate as specified
in said notice.
(iii) To seize all Personalty located on or at any or all of the
Properties, in which Lessor shall have a landlord's lien and/or
security interest, and to dispose thereof in accordance with the laws
prevailing at the time and place of such seizure or to remove all or
any portion of such property and cause the same to be stored in a
public warehouse or elsewhere at Lessee's sole expense, without
becoming liable for any loss or damage resulting therefrom and without
resorting to legal or judicial process, procedure or action.
(iv) To bring an action against Lessee for any damages
sustained by Lessor or any equitable relief available to Lessor.
(v) To relet any or all of the Properties or any part thereof
for such term or terms (including a term which extends beyond the
original Lease Term), at such rentals and upon such other terms as
Lessor, in its sole discretion, may determine, with all proceeds
received from such reletting being applied to the rental and other
sums due from Lessee in such order as Lessor may, in it sole
discretion, determine, which other sums include, without limitation,
all repossession costs, brokerage commissions, attorneys' fees and
expenses, employee expenses, alteration, remodeling and repair costs
and expenses of preparing for such reletting. Except to the extent
required by applicable law, Lessor shall have no obligation to relet
any of the Properties or any part thereof and shall in no event be
liable for refusal or failure to relet any of the Properties or any
part thereof, or, in the event of any such reletting, for refusal or
failure to collect any rent due upon such reletting, and no such
refusal or failure shall
29
operate to relieve Lessee of any liability under this Lease or
otherwise to affect any such liability. Lessor reserves the right
following any reentry and/or reletting to exercise its right to
terminate this Lease by giving Lessee written notice thereof, in which
event this Lease will terminate as specified in said notice.
(vi) (x) To recover from Lessee all rent and other monetary
sums then due and owing under this Lease and (y) to accelerate and
recover from Lessee all rent and other monetary sums scheduled to
become due and owing under this Lease after the date of such breach
for the entire original scheduled Lease Term.
(vii) To recover from Lessee all costs and expenses, including
attorneys' fees, court costs, expert witness fees, costs of tests and
analyses, travel and accommodation expenses, deposition and trial
transcripts, copies and other similar costs and fees, paid or incurred
by Lessor as a result of such breach, regardless of whether or not
legal proceedings are actually commenced.
(viii) To immediately or at any time thereafter, and with or
without notice, at Lessor's sole option but without any obligation to
do so, correct such breach or default and charge Lessee all costs and
expenses incurred by Lessor therein. Any sum or sums so paid by
Lessor, together with interest at the then existing maximum legal
rate, but not higher than 18% per annum, shall be deemed to be
Additional Rental hereunder and shall be immediately due from Lessee
to Lessor. Any such acts by Lessor in correcting Lessee's breaches or
defaults hereunder shall not be deemed to cure said breaches or
defaults or constitute any waiver of Lessor's right to exercise any or
all remedies set forth herein.
(ix) To immediately or at any time thereafter, and with or
without notice, except as required herein, set off any money of Lessee
held by Lessor under this Lease against any sum owing by Lessee
hereunder.
(x) To seek any equitable relief available to Lessor,
including, without limitation, the right of specific performance.
All powers and remedies given by this Section to Lessor, subject to
applicable law, shall be cumulative and not exclusive of one another or of any
other right or remedy or of any other powers and remedies available to Lessor
under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained in
this Lease, and no delay or omission of Lessor to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto.
Every power and remedy given by this Section or by law to Lessor may be
exercised from time to time, and as often as may be deemed expedient, by Lessor,
subject at all times to Lessor's right in its sole judgment to discontinue any
work commenced by Lessor or change any course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations under
this Lease or in the event of an emergency, then, without waiving any Event of
Default which may result from such
30
failure or emergency, Lessor may, but without any obligation to do so, take all
actions, including, without limitation, entry upon any or all of the Properties
to perform Lessee's obligations, immediately and without notice in the case of
an emergency and upon five days written notice to Lessee in all other cases. All
expenses incurred by Lessor in connection with performing such obligations,
including, without limitation, reasonable attorneys' fees and expenses, together
with interest at the Default Rate from the date any such expenses were incurred
by Lessor until the date of payment by Lessee, shall constitute Additional
Rental and shall be paid by Lessee to Lessor upon demand.
25. Liens; Mortgages, Subordination and Attornment. Lessor's interest in
this Lease and/or any of the Properties shall not be subordinate to any liens or
encumbrances placed upon any of the Properties by or resulting from any act of
Lessee, and nothing herein contained shall be construed to require such
subordination by Lessor. Lessee shall keep the Properties free from any liens
for work performed, materials furnished or obligations incurred by Lessee.
NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT AUTHORIZED TO PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, DEED TO SECURE DEBT, SECURITY INTEREST
OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF ANY OF THE PROPERTIES OR
LESSEE'S LEASEHOLD INTEREST THEREIN OR THE PERSONALTY, AND ANY SUCH PURPORTED
TRANSACTION SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE
DEEMED A TORTIOUS INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND
LESSOR'S OWNERSHIP OF THE PROPERTIES.
This Lease at all times shall automatically be subordinate to the Mortgages
and to the lien of any and all ground leases, mortgages, deeds to secure debt
and trust deeds now or hereafter placed upon any of the Properties by Lessor,
and Lessee covenants and agrees to execute and deliver, upon demand, such
further instruments subordinating this Lease to the lien of the Mortgages and
any or all such ground leases, mortgages, deeds to secure debt or trust deeds as
shall be desired by Lessor, or any present or proposed mortgagees or lenders
under deeds to secure debt or trust deeds.
If any landlord, mortgagee, receiver, Lender or other secured party elects
to have this Lease and the interest of Lessee hereunder be superior to any of
the Mortgages or any such ground lease, mortgage, deed to secure debt or trust
deed and evidences such election by notice given to Lessee, then this Lease and
the interest of Lessee hereunder shall be deemed superior to any such Mortgage,
ground lease, mortgage, deed to secure debt or trust deed, whether this Lease
was executed before or after such Mortgage, ground lease, mortgage, deed to
secure debt or trust deed and in that event such mortgagee, receiver, Lender or
other secured party shall have the same rights with respect to this Lease as if
it had been executed and delivered prior to the execution and delivery of such
Mortgage, ground lease, mortgage, deed to secure debt or trust deed and had been
assigned to such mortgagee, receiver, Lender or other secured party.
Although the foregoing provisions shall be self-operative and no future
instrument of subordination shall be required, upon request by Lessor, Lessee
shall execute and deliver whatever instruments may be required for such
purposes, and in the event Lessee fails so to do within 10 days after demand,
Lessee does hereby make, constitute and irrevocably appoint Lessor as its agent
and attorney-in-fact and in its name, place and stead so to do, which
31
appointment shall be deemed coupled with an interest.
In the event any purchaser or assignee of Lender at a foreclosure sale
acquires title to any of the Properties, or in the event Lender or any assignee
otherwise succeeds to the rights of Lessor as landlord under this Lease, Lessee
shall attorn to Lender or such purchaser or assignee, as the case may be (a
"Successor Lessor"), and recognize the Successor Lessor as lessor under this
Lease, and, if the Successor Lessor in its sole discretion elects to recognize
Lessee's tenancy under this Lease, this Lease shall continue in full force and
effect as a direct lease between the Successor Lessor and Lessee, provided that
the Successor Lessor shall only be liable for any obligations of the lessor
under this Lease which accrue after the date that such Successor Lessor acquires
title. The foregoing provision shall be self operative and effective without the
execution of any further instruments.
Lessee shall give written notice to any lender of Lessor having a recorded
lien upon any of the Properties or any part thereof of which Lessee has been
notified of any breach or default by Lessor of any of its obligations under this
Lease simultaneously with the giving of such notice to Lessor, and Lessee shall
give such lender at least 60 days beyond any notice period to which Lessor might
be entitled to cure such default before Lessee may exercise any remedy with
respect thereto. Upon request by Lessor, Lessee shall also provide Lessee's most
recent audited financial statements to Lessor or any such lender and certify the
continuing accuracy of such financial statements in such manner as Lessor or
such lender may request.
26. Estoppel Certificate. A. At any time, and from time to time, Lessee
shall, promptly and in no event later than 10 days after a request from Lessor
or Lender, execute, acknowledge and deliver to Lessor or Lender a certificate in
the form supplied by Lessor, Lender or any present or proposed mortgagee or
purchaser designated by Lessor, certifying: (i) that Lessee has accepted the
Properties (or, if Lessee has not done so, that Lessee has not accepted the
Properties, and specifying the reasons therefor); (ii) that this Lease is in
full force and effect and has not been modified (or if modified, setting forth
all modifications), or, if this Lease is not in full force and effect, the
certificate shall so specify the reasons therefor; (iii) the commencement and
expiration dates of the Lease Term, including the terms of any extension options
of Lessee; (iv) the date to which the rentals have been paid under this Lease
and the amount thereof then payable; (v) whether there are then any existing
defaults by Lessor in the performance of its obligations under this Lease, and,
if there are any such defaults, specifying the nature and extent thereof; (vi)
that no notice has been received by Lessee of any default under this Lease which
has not been cured, except as to defaults specified in the certificate; (vii)
the capacity of the person executing such certificate, and that such person is
duly authorized to execute the same on behalf of Lessee; (viii) that neither
Lessor nor Lender has actual involvement in the management or control of
decision making related to the operational aspects or the day-to-day operations
of the Properties; and (ix) any other information reasonably requested by
Lessor, Lender or such present or proposed mortgagee or purchaser.
B. If Lessee shall fail or refuse to sign a certificate in
accordance with the provisions of this Section within 10 days following a
request by Lessor, Lessee irrevocably constitutes and appoints Lessor as
its attorney-in-fact to execute and deliver the certificate to any such
third party, it being stipulated that such power of attorney is coupled
with an interest and is irrevocable and binding; provided, however, that
Lessor's
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execution and delivery of such certificate on behalf of Lessee shall not
cure any default arising by reason of Lessee's failure to execute and
deliver such certificate.
27. Assignment. A. If Lender shall succeed to the rights of Lessor as
landlord under this Lease, whether through foreclosure of the liens of the
Mortgages, deeds-in-lieu of foreclosure or otherwise, Lender, as lessor, shall
have the right to sell or convey all, but not less than all, of the Properties
or to assign its right, title and interest as Lessor under this Lease in whole,
but not in part. In the event of any such sale or assignment other than a
security assignment, Lessee shall attorn to such purchaser or assignee and
Lessor shall be relieved, from and after the date of such transfer or
conveyance, of liability for the performance of any obligation of Lessor
contained herein, except for obligations or liabilities accrued prior to such
assignment or sale (provided, however, nothing in this Section 27 shall impose
liability on Lender or such purchaser or assignee, as lessor, for the
obligations of Lessor accruing under this Lease prior to the time Lender or such
purchaser or assignee, as the case may be, succeeds to Lessor's rights as lessor
under this Lease). Otherwise, and except as permitted pursuant to the Loan
Documents, Lessor shall not have the right to sell or convey the Properties or
to assign its right, title and interest as lessor under this Lease in whole or
in part.
B. Lessee acknowledges that Lessor has relied both on the business
experience and creditworthiness of Lessee and upon the particular purposes
for which Lessee intends to use the Properties in entering into this Lease.
Without the prior written consent of Lessor: (i) Lessee shall not assign,
transfer, convey, pledge or mortgage this Lease or any interest therein,
whether by operation of law or otherwise; (ii) no interest in Lessee shall
be assigned, transferred, conveyed, pledged or mortgaged, whether by
operation of law or otherwise, including, without limitation, a dissolution
of Lessee or a transfer of any of the voting stock of Lessee, provided,
however, the foregoing shall not apply to (x) any transfer of stock traded
publicly during such period of time that Lessee is a publicly traded
company or (y) any other transfer of stock that does not represent voting
control of 50.1% or more of the voting shares of Lessee resulting from one
or more transfers; and (iii) Lessee shall not sublet all or any part of any
of the Properties. It is expressly agreed that Lessor may withhold or
condition such consent based upon such matters as Lessor may in its
reasonable discretion determine, including, without limitation, the
experience and creditworthiness of any assignee, the assumption by any
assignee of all of Lessee's obligations hereunder by undertakings
enforceable by Lessor, payment to Lessor of any rentals owing under a
sublease which are in excess of the rentals owing hereunder, the transfer
to any assignee of all necessary licenses and franchises to continue
operating the Properties for the purposes herein provided, receipt of such
representations and warranties from any assignee as Lessor may request,
including such matters as its organization, existence, good standing and
finances and other matters, whether or not similar in kind. At the time of
any assignment of this Lease which is approved by Lessor, the assignee
shall assume all of the obligations of Lessee under this Lease pursuant to
Lessor's standard form of assumption agreement. No such assignment nor any
subletting of any of the Properties shall relieve Lessee of its obligations
respecting this Lease. Any assignment, transfer, conveyance, pledge or
mortgage in violation of this paragraph shall be voidable at the sole
option of Lessor.
28. Intentionally Omitted.
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29. Notices. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Lease shall
be in writing and given by (i) hand delivery, (ii) facsimile, (iii) express
overnight delivery service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) transmission, if delivered by facsimile, (c) the next Business
Day, if delivered by express overnight delivery service, or (d) the third
Business Day following the day of deposit of such notice with the United States
Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
If to Lessor Precision Auto Care Holdings, LLC
000 Xxxxxx Xxxxx, XX
Xxxxxxxx, XX 00000
Attention Xx. Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Lessee: Xx. Xxxxxxx Xxxxxx
Chief Executive Officer and President
Precision Auto Care, Inc.
000 Xxxxxx Xxxxx, XX
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as either party may from
time to time hereafter specify to the other party in a notice
delivered in the manner provided above. Unless all obligations under
the Loan Documents have been satisfied in full, no such notices,
consents, approvals or other communications shall be valid unless
Lender receives a duplicate original thereof at the following address:
Xxxxxx X. Xxxxx, Esq.
Executive Vice President, General Counsel and
Secretary
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as Lender may from time to time
specify to Lessor and Lessee in a notice delivered in the manner provided above.
30. Holding Over. If Lessee remains in possession of any of the
Properties after the expiration of the term hereof, Lessee, at Lessor's option
and within Lessor's sole discretion, may be deemed a tenant on a month-to-month
basis and shall continue to pay rentals and other sums
34
in the amounts herein provided, except that the Base Monthly Rental shall be
automatically doubled, and to comply with all the terms of this Lease; provided
that nothing herein nor the acceptance of rent by Lessor shall be deemed a
consent to such holding over. Lessee shall defend, indemnify, protect and hold
the Indemnified Parties harmless from and against any and all Losses resulting
from Lessee's failure to surrender possession upon the expiration of the Lease
Term, including, without limitation, any claims made by any succeeding lessee.
31. Landlord's Lien/Security Interest. Lessee agrees that Lessor shall
have a landlord's lien, and additionally hereby separately grants to Lessor a
first and prior security interest, in, on and against all Personalty, which lien
and security interest shall secure the payment of all rental and other charges
payable by Lessee to Lessor under the terms hereof and all other obligations of
Lessee to Lessor under this Lease. Lessee further agrees to execute and deliver
to Lessor from time to time such financing statements and other documents as
Lessor may then deem appropriate or necessary to perfect and maintain said lien
and security interest, and expressly acknowledges and agrees that, in addition
to any and all other rights and remedies of Lessor whether hereunder or at law
or in equity, in the event of any default of Lessee hereunder, Lessor shall have
any and all rights and remedies granted a secured party under the Uniform
Commercial Code then in effect in the states in which the Properties are
located. If Lessee shall fail for any reason to execute any such financing
statement or document within 10 days after Lessor's request therefor, Lessor
shall have the right to execute the same as attorney-in-fact of Lessee, coupled
with an interest, for, and on behalf, and in the name of Lessee. Lessee
covenants to promptly notify Lessor of any changes in Lessee's name and/or
organizational structure which may necessitate the execution and filing of
additional financing statements (provided, however, the foregoing shall not be
construed as Lessor's consent to such changes).
32. Removal of Personalty. At the expiration of the Lease Term, and if
Lessee is not then in breach hereof, Lessee may remove all Personalty from the
Properties. Lessee shall repair any damage caused by such removal and shall
leave the Properties broom clean and in good and working condition and repair
inside and out. Any property of Lessee left on the Properties on the tenth day
following the expiration of the Lease Term shall, at Lessor's option,
automatically and immediately become the property of Lessor.
33. Financial Statements. Within 45 days after the end of each fiscal
quarter and within 120 days after the end of each fiscal year of Lessee, Lessee
shall deliver to Lessor and Lender (i) complete financial statements of Lessee
including a balance sheet, profit and loss statement, statement of cash flows
and all other related schedules for the fiscal period then ended; and (ii)
income statements for the business at each of the Properties. All such financial
statements shall be prepared in accordance with GAAP and shall be certified to
be accurate and complete by Lessee (or the Treasurer or other appropriate
officer of Lessee). Lessee understands that Lessor and Lender will rely upon
such financial statements and Lessee represents that such reliance is
reasonable. In the event that Lessee's property and business at the Properties
is ordinarily consolidated with other business for financial statement purposes,
such financial statements shall be prepared on a consolidated basis showing
separately the sales, profits and losses, assets and liabilities pertaining to
each of the Properties with the basis for allocation of overhead of other
charges being clearly set forth. The financial statements delivered to Lessor
and Lender need not be audited, but Lessee shall deliver to Lessor and Lender
copies of any
35
audited financial statements of Lessee which may be prepared, as soon as they
are available.
34. Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fire or other casualty beyond the control of the party obligated to perform
shall excuse the performance by such party for a period equal to any such
prevention, delay or stoppage, except the obligations imposed with regard to
rental and other monies to be paid by Lessee pursuant to this Lease and any
indemnification obligations imposed upon Lessee under this Lease.
35. Time is of the Essence. Time is of the essence with respect to each
and every provision of this Lease in which time is a factor.
36. Lessor's Liability. Notwithstanding anything to the contrary provided
in this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that (i) there
shall be absolutely no personal liability on the part of Lessor, its successors
or assigns and the trustees, members, partners, shareholders, officers,
directors, employees and agents of Lessor and its successors or assigns, to
Lessee with respect to any of the terms, covenants and conditions of this Lease,
(ii) Lessee waives all claims, demands and causes of action against the
trustees, members, partners, shareholders, officers, directors, employees and
agents of Lessor and its successors or assigns in the event of any breach by
Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, and (iii) Lessee shall look solely to the Properties for
the satisfaction of each and every remedy of Lessee in the event of any breach
by Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, or any other matter in connection with this Lease or the
Properties, such exculpation of liability to be absolute and without any
exception whatsoever.
37. Consent of Lessor. A. Unless specified otherwise herein, Lessor's
consent to any request of Lessee may be conditioned or withheld in Lessor's sole
discretion. Lessor shall have no liability for damages resulting from Lessor's
failure to give any consent, approval or instruction reserved to Lessor,
Lessee's sole remedy in any such event being an action for injunctive relief.
B. It is understood and agreed that to the extent Lessor is required
to obtain the consent, approval, agreement or waiver of Lender under the
Loan Documents with respect to a matter for which Lessor's approval has
been requested under this Lease, Lessor shall in no event be deemed to have
unreasonably withheld Lessor's consent, approval, agreement or waiver
thereof if Lender shall not have given its approval if required.
38. Waiver and Amendment. No provision of this Lease shall be deemed
waived or amended except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion. No acceptance by
Lessor of an amount less than the monthly rent and other payments stipulated to
be due under this Lease shall be deemed to be other than a payment on account of
the earliest such rent or other payments then due or in arrears nor shall any
endorsement or statement on any check or letter accompanying any such payment be
deemed a waiver of Lessor's right to collect any unpaid amounts or an accord and
satisfaction.
39. Successors Bound. Except as otherwise specifically provided herein,
the terms, covenants and conditions contained in this Lease shall bind and inure
to the benefit of the respective heirs, successors, executors, administrators
and assigns of each of the parties hereto.
40. No Merger. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, shall not result in a merger of Lessor's and
Lessee's estates, and shall, at the option of Lessor, either terminate any or
all existing subleases or subtenancies, or operate as an assignment to Lessor of
any or all of such subleases or subtenancies.
41. Captions. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
42. Severability. The provisions of this Lease shall be deemed severable.
If any part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
43. Characterization. A. It is the intent of the parties hereto that the
business relationship created by this Lease and any related documents is solely
that of a long-term commercial lease between landlord and tenant and has been
entered into by both parties in reliance upon the economic and legal bargains
contained herein. None of the agreements contained herein, is intended, nor
shall the same be deemed or construed, to create a partnership between Lessor
and Lessee, to make them joint venturers, to make Lessee an agent, legal
representative, partner, subsidiary or employee of Lessor, nor to make Lessor in
any way responsible for the debts, obligations or losses of Lessee.
X. Xxxxxx and Lessee acknowledge and warrant to each other that each has
had the opportunity to be represented by independent counsel and has executed
this Lease after being fully advised by counsel as to its effect and
significance. This Lease shall be interpreted and construed in a fair and
impartial manner without regard to such factors as the party which prepared the
instrument, the relative bargaining powers of the parties or the domicile of any
party. Whenever in this Lease any words of obligation or duty are used, such
words or expressions shall have the same force and effect as though made in the
form of a covenant.
44. Easements. During the Lease Term Lessor shall have the right to grant
utility easements on, over, under and above any of the Properties without the
prior consent of Lessee, provided that such easements will not materially
interfere with Lessee's long-term use of such Properties.
45. Bankruptcy. A. As a material inducement to Lessor executing this
Lease, Lessee acknowledges and agrees that Lessor is relying upon (i) the
financial condition and specific operating experience of Lessee and Lessee's
obligation to use each of the Properties specifically in accordance with system-
wide requirements imposed from time to time on Permitted Facilities, (ii)
Lessee's timely performance of all of its obligations under this Lease as to all
Properties notwithstanding the entry of an order for relief under the Code for
Lessee and (iii) all defaults under this Lease as to all Properties being cured
promptly and this Lease being assumed within 60 days of any order for relief
entered under the Code for Lessee, or this Lease being rejected
37
within such 60 day period and the Properties surrendered to Lessor.
Accordingly, in consideration of the mutual covenants contained in this
Lease and for other good and valuable consideration, Lessee hereby agrees that:
(i) All obligations that accrue under this Lease (including
the obligation to pay rent), from and after the date that an Action is
commenced shall be timely performed exactly as provided in this Lease
and any failure to so perform shall be harmful and prejudicial to
Lessor;
(ii) Any and all obligations under this Lease that become due
from and after the date that an Action is commenced and that are not
paid as required by this Lease shall, in the amount of such rents,
constitute administrative expense claims allowable under the Code with
priority of payment at least equal to that of any other actual and
necessary expenses incurred after the commencement of the Action;
(iii) Any extension of the time period within which Lessee may
assume or reject this Lease without an obligation to cause all
obligations coming due under this Lease from and after the date that
an Action is commenced to be performed as and when required under this
Lease shall be harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within which
Lessee must cure all defaults and compensate Lessor for all pecuniary
losses which extends beyond the date of assumption of this Lease shall
be harmful and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all terms and
conditions of this Lease being assumed by the assignee without
alteration or amendment, and any assignment which results in an
amendment or alteration of the terms and conditions of this Lease
without the express written consent of Lessor shall be harmful and
prejudicial to Lessor;
(vi) Any proposed assignment of this Lease to an assignee: (a)
that will not use the Properties specifically in accordance with a
franchise, license and/or area development agreement with the
franchisor of Permitted Facilities, or (b) that does not possess
financial condition, operating performance and experience
characteristics equal to or better than the financial condition,
operating performance and experience of Lessee as of the Effective
Date, shall be harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease for any
reason whatsoever shall constitute cause for immediate relief from the
automatic stay provisions of the Code, and Lessee stipulates that such
automatic stay shall be lifted immediately and possession of the
Properties will be delivered to Lessor immediately without the
necessity of any further action by Lessor; and
(viii) This Lease shall at all times be treated as consistent
with the specific
38
characterizations set forth in Section 3 of this Lease, and assumption
or rejection of this Lease shall be (a) in its entirety, (b) for all
of the Properties, and (c) in strict accordance with the specific
terms and conditions of this Lease.
B. No provision of this Lease shall be deemed a waiver of Lessor's
rights or remedies under the Code or applicable law to oppose any
assumption and/or assignment of this Lease, to require timely performance
of Lessee's obligations under this Lease, or to regain possession of the
Properties as a result of the failure of Lessee to comply with the terms
and conditions of this Lease or the Code.
C. Notwithstanding anything in this Lease to the contrary, all
amounts payable by Lessee to or on behalf of Lessor under this Lease,
whether or not expressly denominated as such, shall constitute "rent" for
the purposes of the Code.
D. For purposes of this Section addressing the rights and
obligations of Lessor and Lessee in the event that an Action is commenced,
the term "Lessee" shall include Lessee's successor in bankruptcy, whether a
trustee, Lessee as debtor in possession or other responsible person.
46. No Offer. No contractual or other rights shall exist between Lessor
and Lessee with respect to the Properties until both have executed and delivered
this Lease, notwithstanding that deposits may have been received by Lessor and
notwithstanding that Lessor may have delivered to Lessee an unexecuted copy of
this Lease. The submission of this Lease to Lessee shall be for examination
purposes only, and does not and shall not constitute a reservation of or an
option for Lessee to lease or otherwise create any interest on the part of
Lessee in the Properties.
47. Other Documents. Each of the parties agrees to sign such other and
further documents as may be necessary or appropriate to carry out the intentions
expressed in this Lease.
48. Attorneys' Fees. In the event of any judicial or other adversarial
proceeding between the parties concerning this Lease, to the extent permitted by
law, the prevailing party shall be entitled to recover all of its reasonable
attorneys' fees and other costs in addition to any other relief to which it may
be entitled. In addition, Lessor shall, upon demand, be entitled to all
attorneys' fees and all other costs incurred in the preparation and service of
any notice or demand hereunder, whether or not a legal action is subsequently
commenced. References in this Lease to Lessor's attorneys' fees and/or costs
shall mean both the fees and costs of independent counsel retained by Lessor
with respect to the matter and the fees and costs of Lessor's in-house counsel
incurred in connection with the matter.
49. Entire Agreement. This Lease and any other instruments or agreements
referred to herein constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreements except as herein provided. Without limiting the
foregoing, Lessee specifically acknowledges that neither Lessor nor any agent,
officer, employee or representative of Lessor has made any representation or
warranty regarding the projected profitability of the business to be conducted
on the Properties. Furthermore, Lessee acknowledges that Lessor did not prepare
or assist in the preparation of any of the projected figures used by Lessee in
analyzing the economic viability and feasibility of the business to be conducted
39
by Lessee at the Properties.
50. Forum Selection; Jurisdiction; Venue; Choice of Law. Lessee
acknowledges that this Lease was substantially negotiated in the State of
Arizona, the executed Lease was delivered in the State of Arizona, all payments
under this Lease will be delivered in the State of Arizona (unless otherwise
directed by Lessor or its successors) and there are substantial contacts between
the parties and the transactions contemplated herein and the State of Arizona.
For purposes of any action or proceeding arising out of this Lease, the parties
hereto expressly submit to the jurisdiction of all federal and state courts
located in the State of Arizona. Lessee and Lessor consent that they may be
served with any process or paper by registered mail or by personal service
within or without the State of Arizona in accordance with applicable law.
Furthermore, Lessee and Lessor waive and agree not to assert in any such action,
suit or proceeding that they are not personally subject to the jurisdiction of
such courts, that the action, suit or proceeding is brought in an inconvenient
forum or that venue of the action, suit or proceeding is improper. The creation
of this Lease and the rights and remedies of Lessor with respect to the
Properties, as provided herein and by the laws of the states in which the
Properties are located, as applicable, shall be governed by and construed in
accordance with the internal laws of the states in which the Properties are
located, as applicable, without regard to principles of conflicts of law. With
respect to other provisions of this Lease, this Lease shall be governed by the
internal laws of the State of Arizona, without regard to its principles of
conflicts of law. Nothing contained in this Section shall limit or restrict the
right of Lessor or Lessee to commence any proceeding in the federal or state
courts located in the states in which the Properties are located to the extent
Lessor or Lessee deems such proceeding necessary or advisable to exercise
remedies available under this Lease.
51. Counterparts. This Lease may be executed in one or more counterparts,
each of which shall be deemed an original.
52. Memorandum of Master Lease. Concurrently with the execution of this
Lease, Lessor and Lessee are executing the Memorandum to be recorded in the
applicable real property records with respect to each of the Properties.
Further, upon Lessor's request, Lessee agrees to execute and acknowledge a
termination of lease and/or quit claim deed in recordable form with respect to
each of the Properties to be held by Lessor until the expiration or sooner
termination of the Lease Term.
53. No Brokerage. Lessor and Lessee represent and warrant to each other
that they have had no conversation or negotiations with any broker concerning
the leasing of the Properties. Each of Lessor and Lessee agrees to protect,
indemnify, save and keep harmless the other, against and from all liabilities,
claims, losses, costs, damages and expenses, including attorneys' fees, arising
out of, resulting from or in connection with their breach of the foregoing
warranty and representation.
54. Waiver of Jury Trial and Punitive, Consequential, Special and Indirect
Damages. LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE
40
OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LESSOR AND LESSEE, LESSEE'S USE
OR OCCUPANCY OF ANY OF THE PROPERTIES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR
ANY EMERGENCY OR STATUTORY REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY
RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN. FURTHERMORE, LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL,
SPECIAL AND INDIRECT DAMAGES FROM LESSOR AND ANY OF LESSOR'S AFFILIATES,
OFFICERS, DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY
AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY LESSEE AGAINST LESSOR OR ANY OF LESSOR'S AFFILIATES, OFFICERS,
DIRECTORS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER
ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED
HEREIN OR RELATED HERETO. THE WAIVER BY LESSEE OF ANY RIGHT IT MAY HAVE TO SEEK
PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE
PARTIES HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
55. Reliance By Environmental Insurer and Lender. A. Lessee acknowledges
and agrees that Environmental Insurer may rely on the representations,
warranties and covenants set forth in Section 16 of this Lease, that
Environmental Insurer is an intended third-party beneficiary of such
representations, warranties and covenants and that Environmental Insurer shall
have all rights and remedies available at law or in equity as a result of a
breach of such representations, warranties and covenants, including to the
extent applicable, the right of subrogation.
B. Lessee acknowledges and agrees that Lender may rely on all of the
representations, warranties and covenants set forth in this Lease, that
Lender is an intended third-party beneficiary of such representations,
warranties and covenants and that Lender shall have all rights and remedies
available at law or in equity as a result of a breach of such
representations, warranties and covenants, including to the extent
applicable, the right of subrogation.
56. Document Review. In the event Lessee makes any request upon Lessor
requiring Lessor, Lender or the attorneys of Lessor or Lender to review and/or
prepare (or cause to be reviewed and/or prepared) any documents, plans,
specifications or other submissions in connection with or arising out of this
Lease, then Lessee shall reimburse Lessor or its designee promptly upon Lessor's
demand therefor for all out-of-pocket costs and expenses incurred by Lessor in
connection with such review and/or preparation plus a reasonable processing and
review fee.
57. State Specific Provisions. The provisions and/or remedies which are
set forth on Schedule I shall be deemed a part of and included within the terms
----------
and conditions of this Lease.
41
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written.
LESSOR:
PRECISION AUTO CARE HOLDINGS, LLC,
a Delaware limited liability company
By: Precision Auto Care, Inc.,
a Virginia corporation
its managing member
By ________________________________
Printed Name ______________________
Its _______________________________
LESSEE:
PRECISION AUTO CARE, INC.,
a Virginia corporation
By ________________________________
Printed Name ______________________
Its _______________________________
Lessee's Tax Identification Number
___________________________________
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me on ______________, 2000
by _____________________, _____________________________ of Precision Auto Care,
Inc., a Virginia corporation, managing member of Precision Auto Care Holdings,
LLC, a Delaware limited liability company, on behalf of the corporation and
limited liability company.
___________________________________
Notary Public
My Commission Expires:
___________________________________
STATE OF )
) SS.
COUNTY OF )
The foregoing instrument was acknowledged before me on ______________, 2000
by _____________________, _____________________________ of Precision Auto Care,
Inc., a Virginia corporation, on behalf of the corporation.
___________________________________
Notary Public
My Commission Expires:
___________________________________
EXHIBIT A
PROPERTIES
XXXX Xx. Xxxx Xx. Xxxxxxx
0000-0000 30 0000 Xxxx 00/xx/ Xxxxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 31 0000 Xxxxxxxxx Xxxx; Xxxxxxxx, Xxxxxxx
0000-0000 16 0000 Xxxx Xxxxxxxxxx; Xxxxxxxx, Xxxx
0000-0000 36 000 Xxxxx Xxxxx Xxxxxx; Xxxxxxxxxxx, Xxxx
0000-0000 32 000 Xxxx 0/xx/ Xxxxxx; Xxxxxxxx, Xxxx
0000-0000 33 0000 Xxxxx Xxxxxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 34 0000 Xxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 N/A 0000 Xxxxxx Xxxxxx; Xxxxxxxxx, Xxxxxxxxxxx
0000-0000 40 0000 X. Xxxx Xxxxxx Xxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 29 0000 X. Xxxxxxx Xxxxxx; Xxxxxxxxxxxx, Xxxxxxx
EXHIBIT A-1
LEGAL DESCRIPTIONS OF PROPERTIES
SCHEDULE I
STATE SPECIFIC PROVISIONS
PROVISIONS APPLICABLE TO CONNECTICUT SITE ONLY
LESSEE ACKNOWLEDGES THAT THE TRANSACTION CONTEMPLATED HEREIN IS A COMMERCIAL
TRANSACTION WITHIN THE MEANING OF SECTION 52-278a OF THE CONNECTICUT GENERAL
STATUTES, AND THAT IN ANY ACTION UPON THIS TRANSACTION, LESSOR MAY AVAIL ITSELF
OF AND PURSUE ITS RIGHTS TO OBTAIN A PREJUDGMENT REMEDY IN ACCORDANCE WITH
SECTION 52-278f OF THE CONNECTICUT GENERAL STATUTES. LESSEE HAS BEEN ADVISED
MEMORANDUM OF MASTER LEASE
THIS MEMORANDUM OF MASTER LEASE (this "Memorandum") is executed effective
as of __________________, 2000 (the "Effective Date"), by and between PRECISION
AUTO CARE HOLDINGS, LLC, a Delaware limited liability company ("Lessor"), whose
address is 000 Xxxxxx Xxxxx, XX, Xxxxxxxx, Xxxxxxxx 00000, and PRECISION AUTO
CARE, INC., a Virginia corporation ("Lessee"), whose address is 000 Xxxxxx
Xxxxx, XX, Xxxxxxxx, Xxxxxxxx 00000.
PRELIMINARY STATEMENT:
Lessor and Lessee entered into that certain master lease (the "Master
Lease") dated as of the Effective Date, the terms, provisions and conditions of
which are incorporated herein by this reference to the same extent as if recited
in their entirety herein. Pursuant to the terms, provisions and conditions of
the Master Lease, Mortgagee has leased to Lessee, and Lessee has rented and
leased from Lessor, the properties described by FFCA Number, Unit Number and
address in Exhibit A attached hereto (collectively, the "Properties"),
---------
including, without limitation, the real property or properties, together with
all buildings, fixtures and other improvements now or hereafter located thereon,
described more particularly in the legal description or descriptions attached
hereto as Exhibit A-1 and incorporated herein by this reference. LaSalle Bank
-----------
National Association, as trustee pursuant to that certain Indenture dated as of
September 1, 1999 ("Mortgagee"), is the holder of certain Notes evidencing loans
which have been assumed by Lessor and which are secured by mortgages, deeds of
trust or deeds to secure debt, assignments of rents and leases, security
agreements and fixture filings encumbering the Properties (collectively, the
"Mortgages"), which have been recorded prior to the recording of this
Memorandum. The Properties will at all times be owned by Lessor, and Lessee's
sole interest in the Properties shall be its leasehold interest pursuant to the
Master Lease. Unless otherwise expressly provided herein, all defined terms
used in this Memorandum shall have the same meanings as are ascribed to such
terms in the Master Lease.
NOW, THEREFORE, Lessor and Lessee hereby make specific reference to the
following
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0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
terms, provisions and conditions of the Master Lease:
1. In consideration of the rentals and other sums to be paid by
Lessee and of the other terms, covenants and conditions on Lessee's part to
be kept and performed pursuant to the Master Lease, Lessor leases to
Lessee, and Lessee takes and hires, the Properties. The Master Lease term
commences as of the Effective Date and expires on December 31, 2014, unless
terminated sooner as provided in the Master Lease. The time period during
which the Master Lease shall actually be in effect is referred to herein as
the "Lease Term."
2. (a) In the event Mortgagee shall succeed to the rights of Lessor
as landlord under the Master Lease, whether through foreclosure of the
liens of the Mortgages, deeds-in-lieu of foreclosure of the Mortgages, or
otherwise, Mortgagee, as lessor under the Master Lease, shall have the
right to sell or convey all, but not less than all, of the Properties or to
assign its right, title and interest as lessor under the Master Lease in
whole, but not in part. In the event of any such sale or assignment other
than a security assignment, Lessee shall attorn to such purchaser or
assignee and Lessor shall be relieved, from and after the date of such
transfer or conveyance, of liability for the performance of any obligation
of Lessor contained in the Master Lease, except for obligations or
liabilities accrued prior to such assignment or sale (provided, however,
nothing in this subsection shall impose liability on Mortgagee or such
purchaser or assignee, as lessor, for the obligations of Lessor accruing
under the Master Lease prior to the time Mortgagee or such purchaser or
assignee, as the case may be, succeeds to Lessor's rights as lessor under
the Master Lease).
(b) Without the prior written consent of Lessor:
(i) Lessee shall not assign, transfer, convey, pledge or
mortgage the Master Lease or any interest therein, whether by
operation of law or otherwise;
(ii) no interest in Lessee shall be assigned, transferred,
conveyed, pledged or mortgaged, whether by operation of law or
otherwise, including, without limitation, a dissolution of Lessee,
provided, however, the foregoing shall not apply to (x) any transfer
of stock traded publicly during such period of time that Lessee is a
publicly traded company or (y) any other transfer of stock that does
not represent voting control of 50.1% or more of the voting shares of
Lessee resulting from one or more transfers; and
(iii) except as expressly provided in the Master Lease, Lessee
shall not sublet all or any part of any of the Properties.
ANY SUCH PURPORTED TRANSACTION WHICH IS NOT PERMITTED BY THE MASTER LEASE
OR OTHERWISE APPROVED BY LESSOR SHALL BE VOIDABLE AT THE SOLE OPTION OF
LESSOR.
3. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT AUTHORIZED
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
2
TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, DEED TO
SECURE DEBT, SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY
PART OF ANY OF THE PROPERTIES OR LESSEE'S LEASEHOLD INTEREST THEREIN OR THE
PERSONALTY (AS HEREINAFTER DEFINED), AND ANY SUCH PURPORTED TRANSACTION
SHALL BE VOID. FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE DEEMED
A TORTIOUS INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND LESSOR'S
OWNERSHIP OF THE PROPERTIES.
4. Any addition to or alteration of any of the Properties shall
automatically be deemed part of the Properties and belong to Lessor.
5. The Master Lease at all times shall automatically be subordinate
to the Mortgages and to the lien of any ground leases, mortgages, deeds to
secure debt and trust deeds now or hereafter placed upon any of the
Properties by Lessor, unless the landlord, mortgagee or trustee under any
such Mortgages, ground lease, mortgage, deed to secure debt or trust deed,
as applicable, elects otherwise by notice given to Lessee.
6. A. Lessor and Lessee intend that:
(i) the Master Lease constitutes a single master lease of all,
but not less than all, of the Properties and that Lessor and Lessee
have executed and delivered the Master Lease with the understanding
that the Master Lease constitutes a unitary, unseverable instrument
pertaining to all, but not less than all, of the Properties, and that
neither the Master Lease nor the duties, obligations or rights of
Lessee may be allocated or otherwise divided among the Properties by
Lessee;
(ii) the Master Lease is a "true lease" and not a financing
lease, capital lease, mortgage, equitable mortgage, deed of trust,
trust agreement, security agreement or other financing or trust
arrangement, and the economic realities of the Master Lease are those
of a true lease; and
(iii) the business relationship created by the Master Lease and
any related documents is solely that of a long-term commercial lease
between landlord and tenant and has been entered into by both parties
in reliance upon the economic and legal bargains contained therein.
X. Xxxxxx and Lessee acknowledge and agree that the Lease Term is
less than the remaining economic life of each of the Properties.
C. Lessee waives any claim or defense based upon the
characterization of the Master Lease as anything other than a true lease
and irrevocably waives any claim or defense which asserts that the Master
Lease is anything other than a true lease. Lessee covenants and agrees that
it will not assert that the Master Lease is anything but a true lease.
Lessee stipulates and agrees not to challenge the validity, enforceability
or characterization
05-60325.04
FFCA No. 8000-8814
Unit No. 16
2110 East Xxxxxxxxxx
Columbus, OH
3
of the lease of the Properties as a true lease and further stipulates and
agrees that nothing contained in the Master Lease creates or is intended to
create a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the
like. Lessee shall support the intent of the parties that the lease of the
Properties pursuant to the Master Lease is a true lease and does not create
a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the
like, if, and to the extent that, any challenge occurs.
D. Lessee waives any claim or defense based upon the
characterization of the Master Lease as anything other than a master lease
of all of the Properties and irrevocably waives any claim or defense which
asserts that the Master Lease is anything other than a master lease. Lessee
covenants and agrees that it will not assert that the Master Lease is
anything but a unitary, unseverable instrument pertaining to the lease of
all, but not less than all, of the Properties. Lessee stipulates and agrees
not to challenge the validity, enforceability or characterization of the
lease of the Properties as a unitary, unseverable instrument pertaining to
the lease of all, but not less than all, of the Properties. Lessee shall
support the intent of the parties that the Master Lease is a unitary,
unseverable instrument pertaining to the lease of all, but not less than
all, of the Properties, if, and to the extent that, any challenge occurs.
E. Lessee represents and warrants to Lessor that (i) the Base Annual
Rental is the fair market value for the use of the Properties and was
agreed to by Lessor and Lessee on that basis, and (ii) the execution,
delivery and performance by Lessee of the Master Lease does not constitute
a transfer of all or any part of the Properties.
F. The expressions of intent, the waivers, the representations and
warranties, the covenants, the agreements and the stipulations set forth in
this Section are a material inducement to Lessor entering into the Master
Lease.
7. Original copies of the Master Lease are in the possession of
Lessor and Lessee. The Master Lease contains other terms not herein set
forth but which are incorporated by reference herein for all purposes, and
this Memorandum is executed for the purpose of placing parties dealing with
the Properties on notice of the existence of the Master Lease and, where
appropriate, its contents, and shall ratify and confirm all other terms of
the Master Lease as fully as if the same had been set forth herein.
Additional information concerning the terms of the Master Lease can be
obtained from Lessor or Lessee at the addresses set forth above.
8. This Memorandum is intended for recording purposes only, and does
not modify, supersede, diminish, add to or change all or any of the terms
of the Master Lease in any respect. The terms and conditions of the Master
Lease shall control notwithstanding that the terms and conditions of the
Master Lease may be inconsistent or vary from those set forth in this
Memorandum.
05-60325.04
FFCA No. 8000-8814
Unit No. 16
2110 East Xxxxxxxxxx
Columbus, OH
4
9. Lessee agrees that Lessor shall have a landlord's lien, and
additionally hereby separately grants to Lessor a first priority lien and
security interest in, on and against all machinery, appliances, furniture,
equipment, trade fixtures and other personal property of Lessee from time
to time situated on or used in connection with the Properties
(collectively, the "Personalty"), which lien and security interest shall
secure the payment of all rental and other charges payable by Lessee to
Lessor under the terms of the Master Lease and all other obligations of
Lessee to Lessor under the Master Lease.
10. This Memorandum may be executed in one or more counterparts, each
of which shall be deemed an original.
05-60325.04
FFCA No. 8000-8814
Unit No. 16
2110 East Xxxxxxxxxx
Columbus, OH
5
IN WITNESS WHEREOF, the parties hereto have caused this Memorandum to be
duly executed as of the Effective Date.
Signed and acknowledged in the LESSOR:
presence of:
PRECISION AUTO CARE HOLDINGS, LLC,
_________________________________ a Delaware limited liability company
_________________________________ By: Precision Auto Care, Inc.,
Printed Name a Delaware corporation
its managing member
_________________________________ By ______________________________
Printed Name ____________________
_________________________________ Its _____________________________
Printed Name
Signed and acknowledged in the LESSEE:
presence of:
PRECISION AUTO CARE, INC.,
_________________________________ a Virginia corporation
_________________________________
Printed Name By ______________________________
Printed Name ____________________
_________________________________ Its _____________________________
_________________________________
Printed Name
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
STATE OF __________________ )
) SS.
COUNTY OF _________________ )
Before me, a notary public in and for said county and state, appeared
____________________, __________________________ of Precision Auto Care, Inc., a
Virginia corporation, managing member of Precision Auto Care Holdings, LLC, a
Delaware limited liability company, who acknowledged to me that [he][she] did
execute the foregoing instrument and the same is [his][her] free act and deed,
personally and on behalf of said limited liability company.
In testimony whereof, I have hereunto subscribed my name, and affixed my
official seal at ___________, ____________, this ____ day of ______________,
2000.
_______________________________________
Notary Public
My Commission Expires:
_____________________________
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
STATE OF _________________ )
) SS.
COUNTY OF ________________ )
Before me, a notary public in and for said county and state, appeared
____________________, ____________________ of Precision Auto Care, Inc., a
Virginia corporation, who acknowledged to me that [he][she] did execute the
foregoing instrument and the same is [his][her] free act and deed, personally
and on behalf of said corporation.
In testimony whereof, I have hereunto subscribed my name, and affixed my
official seal at ______________________, ____________, this ____ day of
____________, 2000.
____________________________________
Notary Public
My Commission Expires:
_________________________________
This Instrument Prepared By:
Xxxxx X. Xxxxx, Esq.
Xxxxx Xxxx LLP
Suite 300
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
When recorded return to:
Ms. Xxxxxxxx XxXxxxxx
FFCA Acquisition Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
EXHIBIT A
PROPERTIES
XXXX Xx. Xxxx Xx. Xxxxxxx
0000-0000 30 0000 Xxxx 00/xx/ Xxxxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 31 0000 Xxxxxxxxx Xxxx; Xxxxxxxx, Xxxxxxx
0000-0000 16 0000 Xxxx Xxxxxxxxxx; Xxxxxxxx, Xxxx
0000-0000 36 000 Xxxxx Xxxxx Xxxxxx; Xxxxxxxxxxx, Xxxx
0000-0000 32 000 Xxxx 0/xx/ Xxxxxx; Xxxxxxxx, Xxxx
0000-0000 33 0000 Xxxxx Xxxxxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 34 0000 Xxxxx Xxxx; Xxxxxxxx, Xxxx
0000-0000 N/A 0000 Xxxxxx Xxxxxx; Xxxxxxxxx, Xxxxxxxxxxx
0000-0000 40 0000 X. Xxxx Xxxxxx Xxxx; Xxxxxxxxxxxx, Xxxxxxx
0000-0000 29 0000 X. Xxxxxxx Xxxxxx; Indianapolis, Indiana
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
EXHIBIT A-1
LEGAL DESCRIPTION
BY COUNSEL OF ITS RIGHTS WITH RESPECT TO PREJUDGMENT REMEDIES UNDER CHAPTER
903a OF THE CONNECTICUT GENERAL STATUTES, AS AMENDED, INCLUDING SECTION 52-278a
TO 52-278g. LESSEE HEREBY KNOWINGLY AND WILLINGLY WAIVES TO THE FULLEST EXTENT
PERMITTED BY LAW ALL RIGHTS OF NOTICE, JUDICIAL HEARING OR PRIOR COURT ORDER IN
CONNECTION WITH THE OBTAINING BY LESSOR OF ANY PREJUDGMENT REMEDY WITH RESPECT
TO THIS LEASE, OR PURSUANT TO ANY OTHER DOCUMENT EXECUTED BY LESSEE IN
CONNECTION WITH THIS TRANSACTION, INCLUDING ANY AMENDMENTS OR EXTENSIONS HEREOF
OR THEREOF. FURTHER, LESSEE WAIVES ANY REQUIREMENT OF LESSOR TO POST A BOND OR
ANY OTHER SECURITY, OR TO SHOW SOME EXIGENCY, IN CONNECTION WITH THE OBTAINING
BY LESSOR OF ANY SUCH PREJUDGMENT REMEDY.
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
EXHIBIT E
FORM OF MEMORANDUM OF LEASE
05-60325.04
FFCA No. 8000-8814
Unit No. 16
2110 East Xxxxxxxxxx
Columbus, OH
05-60325.04
FFCA No. 8000-8814
Unit No. 16
0000 Xxxx Xxxxxxxxxx
Xxxxxxxx, XX
