10.12
Contract No. 8071
CAPTEC
Financial Group, Inc.
September 4, 1998
Roma Restaurant Holdings, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxx
Re: Commitment
Dear Mr. Short:
In reliance upon the representations and warranties made by
Romacorp, Inc., a Delaware corporation ("Lessee"), in Lessee's
application package and any other documents provided to Captec
Financial Group, Inc., a Michigan corporation ("Lessor"), Lessor
agrees to purchase and lease the Properties (described below) and
Lessee agrees to sell and leaseback the Properties, in accordance with
the following terms and conditions:
LESSEE: Romacorp, Inc.
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Phone Number (000) 000-0000
Facsimile Number: (000) 000-0000
PROPERTIES: Eleven (11) Xxxx Xxxx'x restaurants
("Improvements") to be located at sites to
be determined ("Real Estate"), together
with all beneficial easements and
appurtenances thereto (the Improvements and
Real Estate as to each site is referred to
as "Property"). The Property will be more
particularly described in the commitment to
issue an owner's policy of title insurance
as required by Section 2(b) of the attached
General Conditions.
PURCHASE PRICE: Not to exceed One Million Seven Hundred
Fifty Thousand and 00/100 Dollars
($1,750,000.00) per Property, or Nineteen
Million Two Hundred Fifty Thousand and
00/100 Dollars ($19,250,000.00) in
aggregate, but in no event will the
Purchase Price for a Property exceed the
lesser of (i) actual certified cost, or
(ii) the appraised value set forth in the
appraisal required by Section '(a) of the
attached General Conditions. Lessor will
make up to five (a) monthly disbursements
to reimburse Lessee for costs related to
the acquisition of the Real Estate and the
construction of the Improvements for the
Property. Disbursements will be made in
accordance with a Disbursement Agreement
satisfactory to Lessor and Lessee.
CLOSING DATE: On or before June 30, 2000. Lessee shall
complete construction of the Improvements
for all Properties on or before December
31, 2000.
LEASE: Lessee and Lessor will enter into Lessor's
standard form of Lease and Disbursement Agreement.
The Leases and Disbursement Agreements will
include the terms and provisions outlined below.
The Leases will be absolute, triple net leases.
LEASE TERM: The Interim Lease Term for a Property shall
commence on the Closing Date on which the Lessor
acquires the Real Estate and shall continue
through the last day of the month in which Lessee
shall complete construction the Improvements and
receive the final disbursement of funds for
construction costs related to the Improvements (in
accordance with the related Disbursement
Agreement); provided, however, in no event shall
the Interim Lease Term for the Lease extend beyond
five (5) months. The Lease Term for a Property
shall commence on the day following the expiration
of the Interim Lease Term, and shall continue for
fifteen (15) years with two (2) renewal options of
five (5) years each.
RENT: Minimum Annual Rent will be due and payable upon
commencement of the Lease Term and will equal ten
and 00/100 percent (10.00%) of the Purchase Price
of the Real Estate and the total of disbursements
by Lessor to Lessee for hard costs and soft costs
related to construction of the Improvements.
Minimum Annual Rent will be payable in monthly
installments on the first day of each month by
electronic funds transfer. Minimum Annual Rent
will be increased six and 00/100 percent (6.00%)
on the third anniversary date of the Lease Term
and six and 00/100 percent (6.00%) every three
years thereafter. Minimum Annual Rent for the
renewal option periods shall be set at fair market
value.
Interim Rent for the Interim Lease Term shall be
payable to Lessor monthly in an amount equal to
one and 3/4ths percent (1.75%) over the Prime Rate
in existence on the first day of that month
divided by 12 and multiplied by the average
monthly balance of the total advances made by
Lessor for the Purchase Price of the Real Estate
and disbursements for all costs related to
construction of the Improvements. Rent shall
accrue during the interim period and will be added
to the total purchase price advanced by Lessor.
The first monthly installment of Minimum Annual
Rent shall be due and payable upon commencement of
the Lease Term.
FEES AND EXPENSES A Commitment Fee of One Hundred Ninety Two
Thousand Five Hundred and 00/100 Dollars
($192,500.00) is due and payable to Lessor as
follows: (a) Seventy Thousand and 00/100 Dollars
($70,000.00), which will be applied to the first
eight (8) properties to be acquired and funded at
the rate of one half of one percent of the
property cost, is due and payable concurrent with
the return of this Commitment by Lessee; (b) the
balance of the fee (applicable to the first eight
(8) properties) due in the aggregate amount of
Seventy Thousand and 00/100 Dollars ($70,000.00)
is due and payable on a prorate basis (one half of
one percent) on the closing of each Property; (c)
provided that the initial minimum annual rent for
the final three properties has not been increased
or if increased, is acceptable to the Lessee, the
remaining balance of the Commitment Fee in the
amount of Fifty Two Thousand Five Hundred and
00/100 Dollars ($52,500.00) is due and payable on
a prorate basis on the closing of each Property.
In addition Lessor agrees that Lessee may fix the
initial minimum annual rent and interim rent for
a twelve (12) month period on the remaining three
(3) Leases (subject to fluctuation in market
capitalization rates) on or after the Commitment
and upon payment of one half of the applicable
unpaid Commitment Fee. No portion of the
Commitment Fee will be refunded or rebated to
Lessee by Lessor.
A Construction Funding Fee of Forty Eight Thousand
One Hundred Twenty Five and 00/100 Dollars
($48,125.00) is due and payable on a pro-rata
basis at the closing of each Property.
Upon expiration of the Commitment, any unpaid
balance of the Commitment Fee and/or Construction
Financing Fee shall be immediately due and payable
to Lender.
GENERAL CONDITIONS:
This Commitment is supplemented by and subject to
the attached Genera Conditions. The General
Conditions are incorporated into the terms and
provisions of this Commitment.
SPECIFIC CONDITIONS:
Lessor's obligation to close on the transactions
described in this Commitment is further
conditioned upon the following:
All agreements between Lessee (or its affiliates)
Lessor (or its affiliates), shall be cross-
collateralized and cross-defaulted.
During the term of this Commitment and throughout
the term of the Lease, Lessee and consolidated
affiliates shall provide Lessor with quarterly
management prepared and management certified
interim financial statements for the first three
quarters of each fiscal year of the Lessee. Such
financial statements are to be delivered to Lessor
within sixty (60) days of the close of each fiscal
quarter. Financial statements for the first
quarter ended June 30, 1998 are required prior to
closing the first Property.
During the term of this Commitment and throughout
the term of the Leases, Lessee and consolidated
affiliates shall provide Lessor with annual CPA
audited financial statements. Such financial
statements are to be delivered to Lessor within
one hundred twenty (120) days of the close of the
fiscal year end. The annual financial statements
of Lessee shall include unit level profit and loss
statements for the Property due within 120 days of
the close of the fiscal year end.
Subject to Lender's receipt and satisfactory
review of site information for each Property.
Lessor's obligation to close the transactions
described in this Commitment is subject to
Lessor's continual receipt and verification that
there has been no material adverse change in the
financial statements described above. During the
initial 18 months of the Commitment, the initial
minimum annual rent shall be fixed. but thereafter
may be increased to Lender's market rate for any
Lease not yet closed under this Commitment.
MISCELLANEOUS: This Commitment and the General Conditions
constitute a complete statement of the terms
and conditions of the described transaction. This
Commitment supersedes, in its entirety, Lessor's
previous Commitment to Lessee dated August 20,
1998. Any amendment to this Commitment will be
made in writing and must be signed by Lessee and
Lessor. This Commitment is not assignable by
Lessee.
If the foregoing meets with your approval, please acknowledge
your acceptance and agreement by executing and returning this
Commitment to Lessor, together with the portion of the Commitment Fee
currently due and payable, an amount equal to Seventy Thousand and
00/100 Dollars ($70,000.00), on or before September 12, 1998,
otherwise this Commitment will terminate and be of no force or effect.
CAPTEC FINANCIAL GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
Its Senior Vice
President, Administration
ACCEPTED AND AGREED TO:
ROMACORP, INC.
By: /S/ Xxxxxx X. Page
Its: President
Federal Tax I.D. No. 00-0000000
Date: September 10, 1998
cc: Xxxx Xxxxxx
Xxxx XxXxxxxxx
GENERAL CONDITIONS
1. Site Review. Lessor's obligation to close the transaction
described in the Commitment is subject to Lessor's site review and
inspection of the Property and the results of the site review and
inspection being satisfactory to Lessor in all respects.
2. Supporting Documents. Lessor's obligation to close the
transaction described in the Commitment is subject to Lessor's receipt
of the following, satisfactory to Lessor in all respects, at least
fifteen (15) days prior to the Closing Date:
A. MAI Appraisal. An MAI appraisal of the Property, prepared by an
appraiser satisfactory to Lessor, shall be completed and submitted to
Lessor not earlier than sixty (60) days prior to the Closing Date.
B. Title Commitment and Title Policy. A commitment to issue an
owner's policy of title insurance, in the most recent ALTA form,
without standard exceptions, naming Lessor as insured, in the amount
of the Purchase Price of the Property, issued by a title insurance
company acceptable to Lessor, and including title endorsements deemed
necessary by Lessor's counsel, including, without limit, a
comprehensive zoning endorsement. Title to the Property must be
subject to no exceptions, unless approved in writing by Lessor prior
to the Closing Date. The commitment to issue an owner's policy of
title insurance must include an itemization of all outstanding and
pending special assessments (or must state that there are none) and
must include an itemization of all taxes affecting the Property, and
must state whether the taxes are current. Copies of all instruments
creating exceptions to title to the Property must be attached to the
commitment to issue an owner's policy of title insurance. The owner's
policy of title insurance must be issued effective on the Closing
Date. The title company must enter into the Disbursement Agreement
providing, among other things, that upon disbursement of funds to
Lessee for construction costs of the Improvements, the title company
shall issue an endorsement to the title policy, as of the disbursement
date, insuring title to the Real Estate and Improvements, free and
clear of liens, defects and encumbrances, other than those previously
approved by Lessor and increasing the insured amount by the amount so
disbursed.
C. Survey. A current survey, from a surveyor satisfactory to
Lessor, in it's sole discretion, completed not earlier than one
hundred twenty (120) days prior to the Closing Date, certified to the
Lessor and to the title insurance company and such other parties as
Lessor shall designate, in conformity with the survey requirements set
forth on the attached Exhibit A.
D. Insurance Policies. Insurance policies issued by companies
acceptable to Lessor for the following types of insurance coverage,
with loss payable clauses in favor of Lessor, and such other parties
as may be designated by Lessor:
(i) Commercial general liability insurance (including contractual
liability) with minimum limits of $1,000,000 each occurrence
and $2,000,000 aggregate per location.
(ii) All risk property damage insurance on a replacement cost
basis with no coinsurance.
(iii) Flood insurance, in amounts acceptable to Lessor, unless
evidence is provided that the Property is not located in a
federally designated flood plain area.
(iv) Rent loss or business interruption insurance covering a
period of not less than twelve (12) months.
(v) During construction of the Improvements builder's risk
insurance insuring the Improvements for not less than 100% of
their full insurable replacement cost.
All policies of insurance must name Lessor as an additional
insured and any other party designated by Lessor. All general
liability and property damage policies shall be written as primary
policies. Each policy of insurance must provide that it will not be
modified, amended or canceled without thirty (30) days' prior written
notice to Lessor. All policies must include appropriate clauses
pursuant to which the insurance carriers waive all rights of
subrogation against the insured party and all additional insured
parties with respect to all losses payable under such policies. Lessee
must deliver evidence to Lessor, on the Closing Date, that all
insurance policies are paid in full and are in full force and effect
for not less than one (1) year from the Closing Date. All policies of
insurance must contain appropriate loss payee endorsement and a clause
that any loss otherwise payable under such policies will be payable
notwithstanding any act or negligence of Lessor or Lessee.
All insurance companies providing the coverage required under
this provision shall be selected by Lessee and shall be rated A minus
(A-) or better by Best's Insurance Rating Service, shall be licensed
to write insurance policies in the state in which the property is
located, and shall be acceptable to Lessor in Lessor's reasonable
discretion.
E. Governmental Approvals. of compliance with all laws,
ordinances, rules, regulations and restrictions affecting the
Property, the construction of the improvements located on the Property
and the consummation of the transaction described in the Commitment,
including, without limit, liquor licenses, if applicable, certificates
of occupancy related to the Property, the approvals of all public
health departments and/or fire departments having jurisdiction over
the Property, and the approval of the appropriate governmental officer
exercising land use control over the Property stating:
(i) The zoning classification affecting the Property.
(ii) That the Property and its use complies with the
applicable zoning code, city ordinances and building
regulations.
(iii) That there are no variances, conditional use permits
or special use permits required for the use of the
Property or, if such permits are required, specifying
the existence of the permits and attaching copies of
the permits to the governmental officer's's letter.
F. Franchise Documents. Lessee will provide Lessor with a
letter from [Franchisor's Name] ("Franchisor") approving the Real
Estate site and all plans and specifications for the Improvements and
acknowledging that the Lessee is authorized to proceed with
construction. Lessee will also provide Lessor with a copy of a fully
executed franchise or license agreement acceptable to Lessor or a
letter from Franchisor acknowledging that the franchise or license
agreement will be issued upon completion of the Improvements.
G. Utilities and Roads. Evidence of the availability of
all utilities and roads necessary for the construction and operation
of the Improvements.
H. Plans and Specifications. Plans and specifications for
the Property prepared by an architect/engineer satisfactory to Lessor.
I. Physical Inspection Report. A report as to the physical
condition of all improvements located on the Property from an
inspecting architect or engineer satisfactory to Lessor.
J. Environmental Report. An environmental site assessment
report in favor of Lessor and such other parties as Lessor may
designate, from a licensed professional satisfactory to Lessor,
containing evidence satisfactory to Lessor that the Property and all
improvements on the Property are in compliance with federal. state and
local environmental laws, rules and regulations.
K. Tax Bills. Copies of the most recent real estate tax
bills and personal property tax bills relating to the Property and
evidence that all such tax bills have been paid in full.
L. Entity Documentation. Certified copies of the
corporate articles of incorporation, as amended, good standing
certificate, qualification to conduct business as a foreign
corporation (if required), incumbency certificate/corporate
resolutions of the board of directors and any other documents the
Lessor may reasonably require to evidence the authority of the
person(s) executing documents on behalf of the corporation(s). All
documents submitted to the Lessor must be certified within thirty (30)
days of the closing date by the appropriate governmental official
and/or authorized person(s) on behalf of the Lessee and/or the
Guarantor(s).
M. Certified Cost Statement. A certified cost statement
showing the cost of the Real Estate, a certified budget for the
construction of the improvements, a schedule of values of construction
costs, together with any other documentation that Lessor may require
to support such cost statements.
N. Search Results. UCC, tax lien, and judgment lien
search results as to Lessee, Guarantors and any other person or entity
as Lessor may request, certified as of a date within thirty (30) days
of the Closing Date.
O. Automatic Payment Plan. Lessee shall deliver an
executed electronic funds transfer authorization in favor of Lessor.
P. Development Documents. Lessor shall review and
approve the architect, architect's agreement, general contractor,
general contractor's agreement, major subcontractors (i.e. contracts
in excess of $25,000.00) and the major subcontractors' agreements
(collectively "Development Documents").
Q. Equity. Lessee shall deliver evidence satisfactory to
Lessor that Lessee has sufficient funds available to Lessee to fully
perform all of its obligations under the Commitment, including,
without limit, sufficient funds, when combined with funds to be
disbursed by Lessor for the costs of the Improvements, to cause
completion of construction of the Improvements.
R. Additional Documents. Such other documents,
instruments, opinions and/or assurances as Lessor may reasonably
require.
3. Document Provisions. The Lease will be prepared on Lessor's
standard form and will contain, among other matters, the following
provisions:
A. Liens. Lessee will be required to keep the Property
free from all liens and/or encumbrances (other than those acceptable
to Lessor) throughout the term of the Leases.
B. Compliance with Law. Lessee will comply with all laws,
ordinances, orders, rules and regulations of any governmental
authority having jurisdiction over the Property.
C. Utilities. Lessee will pay all utility charges related
to the Property.
D. Taxes. Lessee will pay all real estate taxes,
assessments. ad valorem taxes or gross receipts taxes imposed by any
authority having, the power to tax the Property. Lessee will further
agree to pay all personal property taxes related to the Property.
E. Maintenance and Repair. Lessee will maintain the
Property in good repair, order and condition.
F. Alterations. All structural alterations and all non-structural alterations
to the Property in excess of $25,000 will only
be made upon Lessee's receipt of Lessor's prior written approval. The
cost of all alterations will be paid for by Lessee.
G. Assignment Subletting. Lessee will not be permitted to
assign the Lease or Lessee's interest in the Lease or the Property
without obtaining the prior written consent of Lessor, which shall not
be unreasonably withheld. No assignment or subletting shall release
Tenant or alter the primary liability of Tenant to pay rent and
perform all other obligations under the Lease.
H. Default. The occurrence of any one or more of the
following events, among others, will constitute an event of default:
(i) Failing to make, when due, any payments required under
any Lease;
(ii) Failing to observe or perform any of the other
covenants, conditions or provisions contained in any Lease, which
failure continues for fifteen (15) days after written notice to Lessee
from Lessor;
(iii) Lessee's filing for bankruptcy or other similar
relief: or
(v) Vacating or abandoning the Property.
1. Hazardous Materials. As to the Property, Lessee will make
certain representations and warranties for the benefit of Lessor
regarding hazardous materials and relevant environmental laws, and
will further agree to indemnify and hold harmless Lessor from any
loss, liability, damage or expense that Lessor may incur as a result
thereof.
4. Documents. On the Closing Date, Lessee must execute and/or
deliver to Lessor all documents, monies, instruments and other items
required by the Commitment or the General Conditions, including,
without limit, a warranty deed to the Property, the Lease, the
Disbursement Agreement, a guaranty from each Guarantor, a closing
statement, an affidavit as to non-foreign status of Lessee,
affidavit(s) of Lessee and Guarantor(s), and an opinion of counsel to
Lessee and Guarantor(s). Lessor's obligation to close the transaction
described in the Commitment is subject to the receipt and approval by
Lessor and Lessor's counsel, of all such documents, monies,
instruments, and other items.
5. Costs. Fees and Expenses. The transaction described in the
Commitment will be made without cost to Lessor. Lessee will pay all
reasonable and necessary costs, fees and expenses incidental to the
transaction described in the Commitment, including appraisal fees,
inspection fees, title company charges, search fees, survey fees and
reasonable and necessary attorneys fees and expenses. All fees, costs
and expenses will be paid by Lessee on demand.
6. Broker. By accepting the Commitment, Lessee warrants that
Lessee has not contracted with anyone requiring the payment of a
brokerage commission for the transaction described in the Commitment.
Brokerage commissions, if any, shall be payable by Lessee or
Guarantor(s), and the acceptance of the Commitment shall constitute an
undertaking on the part of Lessee and Guarantor(s) to indemnify Lessor
against claims of brokers arising in connection with Lessor s
agreement to enter into and/or consummate the transaction described in
the Commitment.
7. Fair Credit Reporting Act. By accepting the Commitment,
Lessee and Guarantor(s) warrant that all credit information submitted
to Lessor is true and correct and authorize Lessor to make credit
investigations and obtain credit reports and other financial
information, written or oral, respecting the credit and financial
position of Lessee and Guarantor(s).
8. Interpretation. The Commitment and the General
Conditions will be construed in accordance with the laws of
the State of Michigan.
9. Termination. The Commitment and Lessor's obligations
under the Commitment may be terminated prior to closing at
Lessor's option if:
A. Lessee fails to comply with any of the terms of the
Commitment or the General Conditions;
B. A default exists in any financial obligation of
Lessee or Guarantor(s) which results in the acceleration of
such indebtedness;
C. Any representation made in any material submitted to
Lessor proves to be untrue, false or misleading, in any
material respect;
D. There has been a material adverse change in the
financial condition of Lessee or Guarantor(s) or there shall
exist a material action, suit or proceeding pending or
threatened against Lessee or Guarantor(s);
E. Any bankruptcy, reorganizations, insolvency or
similar proceeding is instituted by or against Lessee or
Guarantor(s);
F. The improvements on the Property are damaged or
destroyed or any portion thereof are subject to a proceeding
for condemnation or eminent domain; or
G. Lessee or Guarantor(s) shall die or be declared
incompetent or be dissolved, liquidated or wound up.
10. Definitions. All defined terms in the General
Conditions have the same meaning as set forth in the
Commitment to which the General Conditions are attached,
unless the context clearly requires otherwise.
EXHIBIT A
SURVEY REQUIREMENTS
1. ALTA/As Built Survey.
The survey map must show:
a. The scale to which the map has been drawn and a north
directional arrow.
b. The identity of the local governmental units in which the
property is located (e.g., name of city, village or township
and county).
c. The location and dimensions by courses and distances of:
i. The property, proceeding by metes and bounds written on
the survey map from a fixed point of beginning around the
perimeter(s) of the plot(s) resuming to the fixed point.
(Unless the property is located in a recorded
subdivision, in which case the lot and block numbers,
subdivision name and recording information for the
subdivision should be given).
ii. The relationship of the point of beginning to the
monument by which it is referenced.
iii. The established building line(s) and setback line(s), if
any.
iv. The line of the street or streets abutting the property
and the names and widths of the streets.
v. The location of all utility lines (e.g., gas, water,
sewer, electricity, telephone), whether existing or
proposed, and the location of all existing and proposed
connections with the utility lines.
vi. All servient and beneficial easements, if any, and all
easements appurtenant to the property, if any, indicating
the identity, by fiber and page, if any, the origin
(e.g., Deed from A to B), if applicable, and nature
(e.g., ten foot sewer easement).
d. The location, nature (including character of construction and
number of stories), dimensions, distance from the property
lines on all sides, and occupant of the structures and
improvements on the property.
e. The location, dimensions and nature of:
i. All encroachments upon the property.
ii. All encroachments upon adjoining property. streets or
alleys by any buildings. structures or other improvements
upon the property.
iii. All party walls between, with or adjoining the properly,
and other property.
f. The location of all waterways, wet lands and established flood
plains, if any.
g. The means of ingress and egress to and from the property, if
other than by means of the abutting street(s). Identify
parking spaces, including handicapped.
h. If the property is described as being on a filed map, the
survey map should contain a legend relating the plot to the
map on which it is shown.
i. A legal description of the plot conforming to the standards of
Section 2, below.
j. A certificate in the form set forth in Section 3, below.
k. A certificate indicating the status of the property in terms
of the 100 year flood plain, as designated by the Army Corps
of Engineers.
2. Legal Description
The legal description must appear on the face of the survey map. The
legal description must conform entirely to the survey. Whatever form
is utilized, the precise legal description must be preceded by
identification of the appropriate street address, if one is
available. The acceptable forms of legal descriptions are the metes
and bounds description or the lot and block description.
3. Survey Certificate
All survey maps must display the following certificate, which
certificate must be executed by the surveyor:
CERTIFICATE
I, the undersigned, hereby certify to {CAPTEC ENTITY,
[CUSTOMER], and [TITLE COMPANY] that this print of survey is
based on a survey made by ______________________ Civil
Engineering/Registered Surveyor No. ____________, on
_________________, 199__, and that this print of survey
correctly shows the location of all buildings, structures and
other improvements situated on the premises herein described
and that except as shown hereon, there are no visible
easements or rights-of-way across said premises, or easements
or rights-of-way of which the undersigned has been advised,
or party walls or encroachments upon adjoining premises,
streets or alleys by any of said buildings, structures or
other improvements, or cemeteries or family burying grounds,
or encroachments of any nature upon the premises herein
described. I further certify that the property abuts an
accessible street or that there is ingress and egress to and
from the property.
Dated: __________
Civil Engineer/Registered Surveyor No.
