AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION
Exhibit 10.12
AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION
THIS AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION (this
“Agreement”) is entered into as of the
1st day of November, 2006, between and among Realty
Income Corporation, a Maryland corporation (“RIC”), with an office at 000 Xxxx Xxxxx
Xxxxxx, Xxxxxxxxx, XX 00000-0000, Realty Income Texas Properties, L.P., a Delaware limited
partnership (“Realty TX”), Realty Income Pennsylvania Properties Trust, a Maryland Business
Trust (“Realty PA”), and Crest Net Lease, Inc., a Delaware corporation (“Crest
Net”), each with an office at c/o Realty Income Corporation, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxxx,
XX 00000-0000 (RIC, Realty TX, Realty PA and Crest Net are collectively referred to herein
individually and collectively as “Landlord”), and CREDIT SUISSE, CAYMAN ISLANDS BRANCH,
having an office at 00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (collectively with its successors,
assigns and designees, “Leasehold Mortgagee”) as Collateral Agent for the Secured Parties
(as such terms are defined below), with reference to the following:
A. Each Landlord has entered into separate Land and Building Leases dated of even date
herewith (collectively, the “Leases” and each individually a “Lease”) with one or
more of the following entities: Fire Mountain Restaurants, LLC, a Delaware limited liability
company and Ryan’s Restaurant Group, Inc., a South Carolina corporation (individually and
collectively, “Tenant”) pursuant to which Landlord has leased to Tenant certain properties,
each called “Demised Property” in each applicable Lease (collectively, the “Demised
Properties”) on which Tenant intends to operate certain restaurant facilities as more
particularly described therein. Any capitalized term used in this Agreement but not defined in this
Agreement has the collective meaning given to such term in the Leases (except where this Agreement
specifically refers to such term as it relates to a specific Lease).
B. Reference is made to (i) the Credit Agreement dated as of even date hereof (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Buffets, Inc. (“Borrower”), Buffets Holdings, Inc. (“Holdings”), the lenders from
time to time party thereto (“Lenders”), including, inter alia, Credit Suisse as
administrative agent (“Administrative Agent”) for the Lenders, collateral agent
(“Collateral Agent”) for the Secured Parties, swingline lender (the “Swingline
Lender”) and an issuing bank (“Issuing Bank”) with respect to any letters of credit
(“Letters of Credit”) issued pursuant to the terms of the Credit Agreement and (ii) the
Guarantee and Collateral Agreement dated as of even date hereof (as amended, supplemented or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”) among
Holdings, Borrower, the subsidiaries
of Borrower identified therein and Credit Suisse. As used in
this Agreement, “Secured Parties” has the meaning set forth in the Leasehold Mortgages (as
defined below).
C. Tenant is a wholly owned subsidiary of Borrower and will derive substantial benefit from
the making of the loans and the issuance of the Letters of Credit under the Credit Agreement. In
order to induce the making of such loans and the issuance of such Letters of Credit, Tenant has
agreed to guarantee, among other things, the due and punctual payment and performance of all of the
Obligations (as defined in the Guarantee and Collateral Agreement) of Borrower under the Credit
Agreement, the Guarantee and Collateral Agreement and the other agreements entered into in
connection therewith.
D. The obligations of Lenders to make the loans under the Credit Agreement) and of Issuing
Bank to issue the Letters of Credit are conditioned upon, among other things, the execution and
delivery by Tenant of those certain instruments titled Leasehold Mortgage, Assignment of Leases and
Rents, Security Agreement and Financing Statement, dated of even date herewith (collectively,
“Leasehold Mortgages”) pledging Tenant’s interest in the leasehold estates created by the
Leases (each a “Leasehold Estate” and collectively, “Leasehold Estates”).
E. The Credit Agreement also requires the granting by Tenant of liens on and security
interests in certain personal property (“Personal Property”) of Tenant and certain other
parties, including, without limitation, the Restaurant Equipment, but not including, without
limitation, any real property.
F. In order to facilitate the transactions being entered into concurrently herewith between
and among Landlord, Tenant and Leasehold Mortgagee, the parties and other signatories hereto desire
to confirm their agreements in connection therewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in consideration of the agreements herein contained, Landlord and
Leasehold Mortgagee hereby agree as follows:
1. Landlord’s Conditional Waiver of Lien. Subject to Landlord’s option to purchase
the Restaurant Equipment as described in Section 4, below, and the terms of the Leases, Landlord
hereby waives, for so long as there remain any Obligations outstanding to any of the Secured
Parties, any lien, interest, claim, right or title in the Personal Property, which Landlord now has
or may hereafter acquire, either by statute, agreement or otherwise and agrees that the Personal
Property shall not become part of the Demised Properties as long as such Personal Property does not
become fixtures pursuant to applicable law (unless the same is Restaurant Equipment); provided,
however, that (a) at the time that the Obligations are no longer outstanding; or (b) the liens
against the Personal Property under the Credit
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Agreement are released by the applicable parties
thereunder, such waiver by Landlord shall no longer be of any force or effect.
2. Landlord’s Consent to Leasehold Mortgages. Leasehold Mortgagee shall not record
any Leasehold Mortgages against any Demised Properties except as provided in this Section.
Landlord hereby consents to Tenant’s granting, and Leasehold Mortgagee’s recording, the Leasehold
Mortgages. Leasehold Mortgagee shall be obligated to pay all Rent under any Lease from and after it
takes title to any Leasehold Estate applicable to the Demised Property under such Lease (and to
perform any and all other covenants under such Lease regarding any Demised Property as to which
Leasehold Mortgagee does take title to the Leasehold Estate applicable thereto). Leasehold
Mortgagee agrees that if Leasehold Mortgagee takes title to any Leasehold Estate, Leasehold
Mortgagee will do so subject to the terms and conditions of the applicable Lease and this
Agreement. If Leasehold Mortgagee breaches its covenants contained in this Section, then in
addition to any other remedies of Landlord at law or in equity regarding such breach, Landlord
shall not be required to fulfill any of its obligations under this Agreement, all such obligations
being null and void, but Leasehold Mortgagee shall remain obligated in all respects hereunder.
3. Leasehold Mortgagee Protections; New Lease.
(a) Without limiting Landlord’s right to terminate any Lease upon an Event of Default (subject
to subsection 3(c), below), Landlord shall not agree to any mutual termination, accept any
surrender of any Lease (except upon the expiration of the applicable Lease Term) or enter into any
material amendment or material modification of any Lease, in each case without the prior written
consent of Leasehold Mortgagee, which shall not be unreasonably withheld, conditioned or delayed.
(b) Leasehold Mortgagee shall have the right, but not the obligation, at any time prior to
termination of any Lease, to pay any and all of the Rent due under such Lease, to provide any
insurance, to pay any fees, expenses, taxes and/or other payments due from Tenant under such Lease,
to make any repairs and improvements, do any other act or thing required of Tenant under such
Lease, and to do any act or thing which may be necessary and proper to be done in the performance
and observance of the covenants, conditions and agreements contained in such Lease to prevent the
termination of such Lease, in each case subject to the express terms and conditions of such Lease.
All payments so made and all things so done and performed by Leasehold Mortgagee shall be as
effective to prevent a termination of such Lease as the same would have been if made, done and
performed by Tenant instead of by Leasehold Mortgagee. In addition, subject to the terms and
conditions of the Leases, Leasehold Mortgagee shall have the right, but not the obligation, to
extend or to renew any Lease on behalf of Tenant for any extension or renewal term provided in such
Lease, subject to the terms and conditions contained in such Lease.
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(c) Should any Event of Default occur other than an Event of Default resulting from the
failure of Tenant (or Leasehold Mortgagee) to pay all Rent
as and when due under a Lease (a “Nonmonetary EOD”), Landlord will not terminate such
Lease as a result of such Nonmonetary EOD if (i) Tenant or Leasehold Mortgagee fully pays all Rent
as and when due under such Lease, (ii) such Nonmonetary EOD would not reasonably be expected to
materially impair the value, use, operation, marketability or financeability of any Demised
Property (as reasonably determined by Landlord) under such Lease; (iii) Leasehold Mortgagee shall
have commenced to fully remedy the condition giving rise to such Nonmonetary EOD and shall be
diligently and continuously prosecuting any such remedy to completion, all in Landlord’s reasonable
discretion, and (iv) Leasehold Mortgagee shall have commenced the process necessary to secure the
approvals required for it to exercise its remedies and cause all Leasehold Estates under such Lease
to be sold, foreclosure or other appropriate proceedings in the nature thereof or in lieu thereof,
and shall be diligently and continuously prosecuting any such proceedings to completion, all in
Landlord’s reasonable discretion (and shall have delivered notice and information regarding any of
the foregoing to Landlord as described in the last sentence of Section 8). Upon any such transfer
of the Leasehold Estates pursuant to the Leasehold Mortgages, the transferee shall be obligated to
promptly commence and diligently pursue to completion the cure of any remaining defaults under such
Lease which are susceptible of cure by any party other than the original Tenant within the
applicable cure periods set forth in such Lease (with such cure periods being deemed to commence as
to such transferee upon the date of such transfer, without any additional notice from Landlord
(whether or not notice is otherwise required under the Lease for such cure periods to commence))
and any failure to do so shall be an Event of Default by such transferee under such Lease. Subject
to subsection 3(d), below, if the transfer of the Leasehold Estate under such Lease pursuant to the
applicable Leasehold Mortgage has not occurred within two hundred seventy (270) days after the
occurrence of the applicable Nonmonetary EOD, then Landlord may terminate such Lease at any time
thereafter, up to the date when such transfer of the Leasehold Estate actually occurs.
(d) If, as the result of any process, injunction or stay issued by any court of competent
jurisdiction, or by reason of any action by any court having jurisdiction of, or any automatic stay
resulting from, any bankruptcy, debtor rehabilitation or insolvency proceedings involving Tenant,
Leasehold Mortgagee is prohibited or prevented from commencing or prosecuting foreclosure or other
appropriate proceedings in the nature thereof, the times specified in subsection 3(c) above, for
commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of
such prohibition; provided that such extension is expressly conditioned upon Tenant or Leasehold
Mortgagee fully paying all Rent as and when due under the applicable Lease within such time
periods, notwithstanding any such process, injunction, stay, action or bankruptcy, insolvency or
debtor rehabilitation proceedings.
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(e) Should Landlord terminate any Lease by reason of any Event of Default by Tenant under such
Lease, Landlord shall deliver a written notice to
Leasehold Mortgagee regarding same (the “Termination Notice”). Leasehold Mortgagee
may elect, at its sole option, by delivering written notice (the “New Lease Notice”) to
Landlord within thirty (30) days after delivery of the Termination Notice to Leasehold Mortgagee,
to enter into a new lease (“New Lease”) of the Demised Property under such Lease to any
Qualified Entity designated by Leasehold Mortgagee and reasonably consented to by Landlord and its
lenders (the “New Tenant”), for the remainder of the term of such Lease with the same
covenants, conditions and agreements as are contained in such Lease. As used herein,
“Qualified Entity” means an entity (x) with a Chief Executive Officer and Chief Operating
Officer (and other officers reasonably determined by Landlord to be directly involved in the
management and operation of the restaurants at the Demised Properties covered by such Lease) who
each has not less than ten (10) years’ experience in the management and operation of restaurants
similar to those operated at the Demised Properties covered by such Lease, including without
limitation not less than five (5) years’ experience with buffet-style restaurants, and (y) with a
tangible net worth of not less than $50,000,000. If Leasehold Mortgagee fails to deliver the New
Lease Notice within such thirty (30) day period, Leasehold Mortgagee shall be deemed to have
waived its option to enter into such New Lease. Within ten (10) days after delivery of the New
Lease Notice, Landlord shall prepare the New Lease and deliver it to Leasehold Mortgagee, and
within ten (10) days after delivery of the New Lease to Leasehold Mortgagee, both Leasehold
Mortgagee and Landlord shall execute and deliver same; provided however that Landlord’s execution
and delivery of such New Lease shall be made without representation or warranty of any kind or
nature whatsoever, either express or implied, including, without limitation, any representation or
warranty regarding title to the Demised Property covered by the New Lease or any portion thereof,
the priority of such New Lease, or any continuing rights of Tenant under or regarding such Lease.
If Leasehold Mortgagee fails to execute and deliver the New Lease within such ten (10) day period,
Leasehold Mortgagee shall be deemed to have waived its option to enter into the New Lease. Upon
execution and delivery of such New Lease, New Tenant, at its sole cost and expense, shall be
responsible for taking such action as shall be necessary to cancel and discharge such Lease and to
remove Tenant and any other occupant from the applicable Demised Property. Landlord’s obligation
to enter into such New Lease of such Demised Property with New Tenant shall be conditioned upon all
of the following: (i) Leasehold Mortgagee or such New Tenant shall have paid in full all Rent then
due and owing under such Lease, and shall have remedied and cured or commenced and be diligently
completing the cure of all nonmonetary defaults of Tenant susceptible of cure by any party other
than by the original Tenant and (ii) Leasehold Mortgagee or New Tenant shall pay all costs and
expenses of Landlord, including, without limitation, reasonable attorneys’ fees, real property
transfer taxes and any escrow fees and recording charges, incurred in connection with the
preparation and execution of such New Lease and any conveyances related thereto. Upon the
execution of any such New Lease, New Tenant and/or subtenants
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shall be obligated to continue to
diligently pursue to completion the cure of any
remaining defaults under the Lease which are susceptible of cure by any party other than the
original Tenant.
4. Landlord’s Purchase Option Regarding Restaurant Equipment. Subject to the terms of
this Section, and Tenant’s rights under the Leases, following any Event of Default or expiration of
a Lease (including, without limitation, the nonrenewal of a Lease), Landlord shall have the option
to purchase any or all the Restaurant Equipment covered by such Lease for Fair Market Value (as
hereinafter defined). Notwithstanding the foregoing, Landlord shall not have the right to exercise
such option if Leasehold Mortgagee has (x) commenced and is diligently pursuing foreclosure under
all the Leasehold Mortgages applicable to such Lease and/or has taken title to the Leasehold Estate
subject to such Lease, whether through foreclosure, deed in lieu thereof or otherwise, or (y)
entered into a New Lease with Landlord regarding the applicable Demised Property; provided that
regardless of whether the events in clause (x) of this sentence have commenced and are occurring,
Landlord shall have the right to exercise such option at any time after receiving an Entry Notice
as described in Section 5. Leasehold Mortgagee shall cause all Restaurant Equipment to be
unencumbered by any security interest or other interest of Leasehold Mortgagee or any other Secured
Parties at the time it is delivered to Landlord. Landlord may exercise such option by delivering
written notice thereof to Leasehold Mortgagee (the date such notice is delivered is referred to
herein as the “Notice Date”). After the Notice Date, Landlord and Leasehold Mortgagee
shall attempt for a ten (10) day period (the “Discussion Period”) to agree on the fair
market value of such Restaurant Equipment (the “Fair Market Value”). If Landlord and
Leasehold Mortgagee do not agree, in writing, as to the Fair Market Value within the Discussion
Period, Fair Market Value shall be determined by the following procedure:
(a) Submission of Fair Market Value. Within fifteen (15) days after the last date of
the Discussion Period (the last day of such fifteen (15) day period is referred to herein as the
“Calculation Date”), each of Landlord and Leasehold Mortgagee shall deliver to the other
party its calculation of the Fair Market Value of such Restaurant Equipment. If either party (a
“Failing Party”) fails to deliver its calculation to the other party on or before the
Calculation Date, but the other party delivers its calculation to the Failing Party on or before
the Calculation Date, such other party’s calculation shall be binding on both parties and shall be
the price paid by Landlord to Leasehold Mortgagee in exchange for such Restaurant Equipment, and
the arbitration shall be deemed concluded.
(b) Appointment and Qualifications of Appraisers. Provided the arbitration is not
deemed concluded pursuant to subsection 4(a), within thirty (30) days after the Calculation Date,
Landlord and Leasehold Mortgagee shall each appoint one licensed equipment appraiser who has been
active over the previous ten-year (10-year) period in the appraisal of restaurant equipment (each
such appraiser
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chosen pursuant to this subsection 4(b), an “Appraiser”). Each of Landlord
and Leasehold Mortgagee shall notify the other party, in writing, of its Appraiser (and the
business address thereof) within two (2) business days after the appointment thereof (collectively,
the “Appraiser Appointment Notices”). Each of Landlord and Leasehold Mortgagee agree that
any Appraiser may be (but is not required to be) an appraiser who assisted either party in
determining such party’s calculation of the Fair Market Value of such Restaurant Equipment pursuant
to subsection 4(a), above.
(c) Appointment of Third Appraiser. If each party appoints an Appraiser and notifies
the other party in accordance with subsection 4(b), above, then the two (2) Appraisers shall,
within ten (10) days after delivery of the later of the two Appraiser Appointment Notices, agree on
and appoint a third Appraiser (who shall be a licensed real estate appraiser with all other
qualifications for the initial two Appraisers chosen by the parties as set forth in subsection
4(b), above) and provide prompt written notice to Landlord and Leasehold Mortgagee of such third
Appraiser and the business address thereof. If the two (2) Appraisers fail to agree on and appoint
a third Appraiser within such ten (10) day period, then either party may elect to have the third
Appraiser selected by the American Arbitration Association or any successor thereto (“AAA”)
by delivering written notice thereof to the other party. In such event, the electing party shall
petition the AAA (with a copy to the other party) to so determine the third Appraiser and the
parties shall cooperate reasonably with each other and the AAA (including, without limitation, by
responding promptly to any requests for information made by the AAA) in connection with such
determination. The decision of the AAA shall be final and conclusive as to the identity of the
third Appraiser. If any fees of the third Appraiser or the AAA are required to be paid in advance
(prior to the completion of the arbitration procedure described in this Section) in order for such
Appraiser, or the AAA, as the case may be, to commence or continue its work in connection with the
arbitration described in this Section, each party shall promptly pay one-half of such fees as and
when due, and if either Landlord or Leasehold Mortgagee fails to pay its one-half share of any such
fees as and when due (such party, the “Delinquent Party”), and the other party does pay its
one-half share of any such fees as and when due, then if the Delinquent Party fails to pay its
one-half share of all such fees within ten (10) days after written notice from the other party,
such other party’s calculation of the Fair Market Value described in subsection 4(a) shall be
binding on both parties and shall be the price paid by Landlord to Leasehold Mortgagee in exchange
for such Restaurant Equipment, and the arbitration shall be deemed concluded.
(d) Appraisers’ Decision. Provided the arbitration is not previously deemed concluded
pursuant to subsection 4(c), within thirty (30) days after the appointment of the third Appraiser,
each of the three (3) Appraisers shall decide whether the Fair Market Value of such Restaurant
Equipment as proposed by Landlord or Leasehold Mortgagee pursuant to subsection 4(a), above, is
closer to the Fair Market Value of such Restaurant Equipment as determined by each such Appraiser.
The decision of the majority of the three (3) Appraisers shall be binding
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on Landlord and Leasehold
Mortgagee (subject to subsection 4(e), below). The
determination of each Appraiser shall be limited to the sole issue of, and each Appraiser
shall have neither the right nor the power to determine any issue other than, whether the Fair
Market Value of such Restaurant Equipment as proposed by Landlord or Leasehold Mortgagee pursuant
to subsection 4(a), above, is closer to the actual Fair Market Value of such Restaurant Equipment
as determined by each such Appraiser. The Fair Market Value as proposed by Landlord or Leasehold
Mortgagee that is determined by the majority of the Appraisers to be closer to the actual Fair
Market Value of such Restaurant Equipment shall be the price paid by Landlord to Leasehold
Mortgagee in exchange for such Restaurant Equipment.
(e) If Only One Appraiser Is Appointed. Provided the arbitration is not previously
deemed concluded pursuant to subsection 4(a) or subsection 4(c), if either Landlord or Leasehold
Mortgagee fails to appoint an Appraiser within thirty (30) days after the Calculation Date or fails
to deliver an Appraiser Appointment Notice in accordance with subsection 4(b), above, and the other
party does appoint an Appraiser within such thirty (30) day period and delivers an Appraiser
Appointment Notice in accordance with subsection 4(b), above, then the Appraiser timely appointed
by such other party shall reach a decision regarding whether the Fair Market Value of such
Restaurant Equipment as proposed by Landlord or Leasehold Mortgagee pursuant to subsection 4(a),
above, is closer to the actual Fair Market Value of such Restaurant Equipment as determined by each
such Appraiser, and notify Landlord and Leasehold Mortgagee of that decision within thirty (30)
days after such Appraiser’s appointment. In such event, such Appraiser’s decision shall be binding
on Landlord and Leasehold Mortgagee, and the Fair Market Value as proposed by Landlord or Leasehold
Mortgagee that is determined by such Appraiser to be closer to the actual Fair Market Value of such
Restaurant Equipment shall be the price paid by Landlord to Leasehold Mortgagee in exchange for
such Restaurant Equipment.
(f) Cost of Arbitration. If the Appraisers (or Appraiser, pursuant to subsection 4(e),
above) determine that Leasehold Mortgagee’s proposed Fair Market Value of such Restaurant Equipment
is closer to the actual Fair Market Value of such Restaurant Equipment, then Landlord shall be
deemed the “Losing Party” and Leasehold Mortgagee shall be deemed the “Prevailing Party.” If the
Appraisers (or Appraiser, pursuant to subsection 4(e), above) determine that Landlord’s proposed
Fair Market Value of such Restaurant Equipment is closer to the actual Fair Market Value of such
Restaurant Equipment, then Leasehold Mortgagee shall be deemed the “Losing Party” and Landlord
shall be deemed the “Prevailing Party.” In addition, in the event the arbitration is deemed
concluded due to a Failing Party not timely delivering its calculation of Fair Market Value as
described in subsection 4(a), or a Delinquent Party failing to pay its share of fees after written
notice as described in subsection 4(c), such Failing Party or Delinquent Party (as the case may be)
shall be deemed the “Losing Party” and the party that is not the Failing Party or Delinquent Party
shall be deemed the “Prevailing Party.” Each party shall initially pay the fees
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and expenses of
its legal counsel, appointed appraiser, appraisals, one-half of the fees
of the third appraiser, and one-half the fees of the AAA (if applicable), provided, however,
that the Losing Party shall be obligated to reimburse the Prevailing Party for all costs of the
arbitration paid by the Prevailing Party promptly upon the completion of the arbitration procedure
described in this Section (including without limitation fees and expenses of the Prevailing Party’s
legal counsel, appointed appraiser, appraisals, and its one-half share of the fees of the third
appraiser, and the AAA (if applicable)).
5. Entry Notice from Leasehold Mortgagee to Landlord. Subject to this Section,
without limiting Leasehold Mortgagee’s rights (x) to commence and diligently pursue foreclosure
under the Leasehold Mortgages regarding any Lease and/or to take title to the Leasehold Estate
subject to such Lease, whether through foreclosure, deed in lieu thereof, or otherwise, and (y)
enter into a New Lease with Landlord regarding the Demised Property covered by a Lease as provided
herein, Leasehold Mortgagee hereby agrees that Leasehold Mortgagee shall not enter upon any
Demised Property to remove any Personal Property therefrom unless: (a) Leasehold Mortgagee delivers
to Landlord a notice stating Leasehold Mortgagee’s intention to remove any Personal Property and
representing that Leasehold Mortgagee has the right to do so pursuant to a default (after any
applicable notice and cure periods) under the Credit Agreement and/or Guarantee and Collateral
Agreement (such notice, the “Entry Notice”); (b) Leasehold Mortgagee’s rights to enter upon
the applicable Demised Property as described above shall commence fifteen (15) days after delivery
to Landlord of the Entry Notice (the last day of such fifteen (15) day period, the “Entry
Commencement Date”) and shall expire forty-five (45) days after the Entry Commencement Date
(such forty-five (45) day period, the “Entry Period”); (c) any entry by Leasehold Mortgagee
upon any Demised Property shall be in strict compliance with the terms of the Credit Agreement, the
Guarantee and Collateral Agreement, the Leasehold Mortgages, and such Lease, as applicable; (d)
Leasehold Mortgagee shall repair promptly, or cause to be repaired promptly, any damage to the
Demised Property caused by any such removal of the Personal Property (or any inspection thereof
undertaken by Leasehold Mortgagee) and shall leave the applicable Demised Property in broom clean
condition; (e) any Personal Property remaining at the Demised Property after the expiration of the
Entry Period shall be deemed abandoned by Leasehold Mortgagee (and all Secured Parties) and shall
become the sole property of Landlord, free and clear of any security interest or other interest of
Leasehold Mortgagee or any Secured Party; and (f) Leasehold Mortgagee shall pay to Landlord prior
to any entry upon the Demised Property all Rent under the applicable Lease during the Entry Period
(or, if any such Lease has been terminated, all Rent that would have been applicable under such
Lease during such period if such Lease were still in effect), including all Base Rent under such
Lease and an amount of Additional Rent under such Lease reasonably determined by Landlord to be
applicable to the Entry Period. If Leasehold Mortgagee timely delivers the Entry Notice and prior
to the expiration of the Entry Period Tenant files, or any creditor or other person shall file
against the applicable Tenant, any petition in
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bankruptcy under the Bankruptcy Code of the United
States of America and a result of any such filing
an order of stay is issued with respect to Tenant, the Credit Agreement, the Guarantee and
Collateral Agreement and/or such Lease by the applicable bankruptcy court (a “Stay”), then
provided that (i) Leasehold Mortgagee diligently takes all reasonable steps to have the Stay lifted
by the applicable court as promptly as practicable, (ii) Leasehold Mortgagee has during any portion
of the Entry Period occurring prior to the Stay taken all reasonable and diligent action to remove
the Personal Property from the applicable Demised Property; and (iii) Leasehold Mortgagee pays all
Rent that would have been applicable under such Lease during such period if such Lease were still
in effect), including all Base Rent under such Lease and an amount of Additional Rent under such
Lease reasonably determined by Landlord to be applicable to such period, then the Entry Period
shall be deemed tolled for the period the Stay is in effect (such that Leasehold Mortgagee shall
have a total of thirty (30) days to remove the Personal Property from the applicable Demised
Property following delivery of the Entry Notice described above, not including any days where the
Stay is in effect). Notwithstanding the foregoing, Leasehold Mortgagee acknowledges that it shall
have no right to enter upon, or remain upon, any of the Demised Property to remove any Personal
Property from and after (1) the Notice Date whereupon Landlord exercises its option to purchase
certain Restaurant Equipment under the applicable Lease as described in Section 4 (whether the
Notice Date occurs before or during any Entry Period; provided that if Landlord exercises such
option during the Entry Period, Landlord shall refund to Leasehold Mortgagee an equitable portion
of the amounts prepaid by Leasehold Mortgagee to Landlord pursuant to subsections 5(f) and 5(iii),
above); or (2) from and after the delivery by Leasehold Mortgagee to Landlord of any Waiver Notice
as described in Section 7.
6. Notice from Landlord to Leasehold Mortgagee.
(a) Landlord shall have the right (but not the obligation), upon any Event of Default under a
Lease where (i) such Lease has been terminated, (ii) Leasehold Mortgagee has not elected to enter
into a New Lease as described in subsection 3(e), and (iii) Landlord has not exercised its option
to purchase the applicable Restaurant Equipment as described in Section 4, to deliver to Leasehold
Mortgagee a written notice requesting that Leasehold Mortgagee remove, or cause the removal of, all
Personal Property at the Demised Property previously covered by such Lease (the “Request
Notice”).
(b) If within fifteen (15) days after delivery of the Request Notice (the “Removal Notice
Period”) Leasehold Mortgagee delivers a written notice to Landlord stating Leasehold
Mortgagee’s intention to remove, or cause the removal of, Personal Property from the applicable
Demised Property (such notice, a “Removal Notice”), then Leasehold Mortgagee shall have the
right to enter upon such Demised Property until the thirtieth (30th) day following
delivery of such notice to Landlord (such thirty (30) day period, the “Request Entry
Period”) to remove all
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Personal Property at such Demised Property, provided that (i) any entry
by Leasehold Mortgagee upon any Demised Property shall be in strict compliance with the terms of
the Credit Agreement, the Guarantee and Collateral Agreement, any Leasehold Mortgages, and
such Lease, as applicable; (ii) Leasehold Mortgagee shall repair promptly, or cause to be repaired
promptly, any damage to the Demised Property caused by any such removal of the Personal Property
(or any inspection thereof undertaken by Leasehold Mortgagee) and shall leave the applicable
Demised Property in broom clean condition; (iii) any Personal Property remaining at the Demised
Property after the expiration of the Request Entry Period shall be deemed abandoned by Leasehold
Mortgagee (and all Secured Parties) and shall become the sole property of Landlord, free and clear
of any security interest or other interest of Leasehold Mortgagee or any Secured Party; and (iv)
Leasehold Mortgagee shall pay to Landlord prior to any entry upon such Demised Property all Rent
that would have been applicable under the applicable Lease during such period if such Lease were
still in effect, including all Base Rent under such Lease and an amount of Additional Rent under
such Lease reasonably determined by Landlord to be applicable to the Request Entry Period. If
Leasehold Mortgagee timely delivers the Request Entry Notice and prior to the expiration of the
Request Entry Period Tenant files, or any creditor or other person shall file against the
applicable Tenant, any petition in bankruptcy under the Bankruptcy Code of the United States of
America and a result of any such filing a Stay is issued, then provided that (x) Leasehold
Mortgagee diligently takes all reasonable steps to have the Stay lifted by the applicable court as
promptly as practicable, (y) Leasehold Mortgagee has during any portion of the Request Entry Period
occurring prior to the Stay taken all reasonable and diligent action to remove the Personal
Property from the applicable Demised Property, and (z) Leasehold Mortgagee pays all Rent that would
have been applicable under such Lease during such period if such Lease were still in effect,
including all Base Rent under such Lease and an amount of Additional Rent under such Lease that
Landlord reasonably determines would have been applicable to such period if such Lease were still
in effect, then the Request Entry Period shall be deemed tolled for the period the Stay is in
effect (such that Leasehold Mortgagee shall have a total of thirty (30) days to remove the Personal
Property from the Demised Property following delivery of the Request Entry Notice described above,
not including any days where the Stay is in effect). If Leasehold Mortgagee fails to deliver any
Removal Notice within the Removal Notice Period, then unless Leasehold Mortgagee has elected to
enter into a New Lease (whereupon Leasehold Mortgagee shall have no obligation to remove any
Personal Property from any Demised Property pursuant to this Agreement), any Personal Property
remaining at such Demised Property at the expiration of the Removal Notice Period shall be deemed
abandoned by Leasehold Mortgagee (and all Secured Parties) and shall, as between Leasehold
Mortgagee and Landlord, become the sole property of Landlord, free and clear of any security
interest or other interest of Leasehold Mortgagee and any Secured Party.
(c) Without limiting any other provision of this Agreement, Leasehold Mortgagee acknowledges
and agrees that all covenants of Leasehold
11
Mortgagee set forth in this Section shall not be limited
due to the fact that a default or event of default may not exist under the Credit Agreement or
Guarantee and Collateral Agreement at the time a Request Notice is delivered to Leasehold Mortgagee, or
thereafter.
7. Waiver Notice; Partial Removal of Personal Property. If Leasehold Mortgagee at any
time delivers a notice to Landlord waiving the rights of Leasehold Mortgagee to remove the Personal
Property from the Demised Property under any Lease (a “Waiver Notice”), then any Personal
Property remaining at such Demised Property from and after the delivery of the Waiver Notice shall
be deemed abandoned by Leasehold Mortgagee (and all Secured Parties) and shall become the sole
property of Landlord, as between Leasehold Mortgagee and Landlord, free and clear of any security
interest or other interest of Leasehold Mortgagee and any Secured Party. Any Waiver Notice shall
be irrevocable. Notwithstanding the foregoing, if Leasehold Mortgagee at any time enters upon any
Demised Property under a Lease for the purpose of removing any Personal Property (as described in
Sections 5 and 6), Leasehold Mortgagee must remove all Personal Property from all such Demised
Property (unless Landlord agrees, in writing, in its sole discretion, that some of the Personal
Property may remain at such Demised Property), and any failure to do so by Leasehold Mortgagee
shall be a breach by Leasehold Mortgagee under this Agreement and the removal of any such remaining
Personal Property by Landlord thereafter shall be at Leasehold Mortgagee’s sole cost and expense.
8. Indemnity to Landlord Parties; Reasonable Cooperation Regarding Title; Delivery of
Information Regarding Remedies. Leasehold Mortgagee hereby agrees to release, indemnify,
protect, defend and hold harmless all Landlord Parties from and against any and all claims,
demands, damages, obligations, losses, liabilities, costs and expenses (including attorneys’,
accountants’, consultants’, and expert witness fees and expenses) (collectively,
“Liabilities”) directly or indirectly related to or arising out of or in connection with
any activities of Leasehold Mortgagee or its agents at or about the Demised Properties or in
connection with the exercise of Leasehold Mortgagee’s rights under the Credit Agreement or the
Guarantee and Collateral Agreement; provided, however, that the foregoing indemnity will not apply,
with respect to a Landlord Party, to any Liabilities to the extent they are found in a final,
non-appealable judgment of a court of competent jurisdiction to have resulted from the willful
misconduct or gross negligence of such Landlord Party. Each Landlord Party hereby agrees to
release, indemnify, protect, defend and hold harmless the Leasehold Mortgagee from and against any
and all Liabilities directly related to or arising out of or in connection with any activities of
such Landlord Party or its agents at or about any Demised Property provided such activities have
occurred prior to the earlier of (a) the date any New Lease covering such Demised Property is
entered into as described above, and (b) the date Leasehold Mortgagee takes title to the Leasehold
Estate regarding such Demised Property, through foreclosure or otherwise; provided, however, that
the foregoing indemnity will not apply to any Liabilities (y) to the extent they are found in a
final, non-
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appealable judgment of a court of competent jurisdiction to have resulted from the
willful misconduct or gross negligence of the Leasehold Mortgagee; or (z) directly or
indirectly related to or arising out of or in connection with any activities or omissions of
Tenant or any Default or Event of Default by Tenant under any Lease. At any time any Personal
Property (including without limitation any Restaurant Equipment) becomes the property of Landlord
pursuant to the terms of this Agreement, Leasehold Mortgagee agrees to cooperate reasonably with
Landlord in connection with evidencing Leasehold Mortgagee’s release of its interest in said
Personal Property, including without limitation by executing any reasonable instruments requested
by Landlord evidencing same. Without limiting Landlord’s rights under Section 4, at any time any
Personal Property (including without limitation any Restaurant Equipment) becomes the property of
Leasehold Mortgagee pursuant to the terms of the Credit Agreement, the Guarantee and Collateral
Agreement, and this Agreement, Landlord agrees to cooperate reasonably with Leasehold Mortgagee in
connection with evidencing Landlord’s release of its interest in said Personal Property, including
without limitation by executing any reasonable instruments requested by Leasehold Mortgagee. If at
any time Leasehold Mortgagee commences the process necessary to secure the approvals required for
it to exercise its remedies and cause Leasehold Estates under any Lease to be sold, foreclosure or
other proceedings in the nature thereof or in lieu thereof, then Leasehold Mortgagee shall deliver
(y) written notice thereof to Landlord within ten (10) days after any such commencement, and (z)
such reasonable information regarding any such process, foreclosure or other proceedings as
Landlord may request in writing from time to time, in each case within ten (10) days after any such
written request from Landlord.
9. Notices. Whenever it is provided herein that notice, demand, request or other
communication shall or may be given to either of the parties by the other, it shall be in writing
and, any law or statute to the contrary notwithstanding, shall not be effective for any purpose
unless same shall be given or served as follows:
(a) If given or served by Landlord, (i) by hand delivery to Leasehold Mortgagee, (ii) by
mailing same to Leasehold Mortgagee by registered or certified mail, postage prepaid, return
receipt requested, or (iii) by delivery by overnight courier such as Federal Express, all delivered
and addressed to Leasehold Mortgagee at the following address:
Credit Suisse
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Agency Group
Facsimile: (000) 000-0000
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Agency Group
Facsimile: (000) 000-0000
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with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XxXxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XxXxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If given or served by Leasehold Mortgagee, (i) by hand delivery to Landlord, (ii) by
mailing same to Landlord by registered or certified mail, postage prepaid, return receipt
requested, or (iii) by delivery by overnight courier such as Federal Express, all delivered and
addressed to Landlord at the following address:
Realty Income Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) All notices, demands, requests or other communications hereunder shall be deemed to have
been given or served: (i) if hand delivered, on the date received (or the date delivery is refused)
by the recipient party; (ii) if delivered by registered or certified mail, three (3) days after the
date of posting as marked on the U.S. postage receipt; and (iii) if by Federal Express or similar
overnight courier service, on the date of receipt (or the date delivery is refused) by the
recipient party.
(d) Either Landlord or Leasehold Mortgagee may from time to time change its address for
receiving notices under this Agreement by providing written notice to the other party in accordance
with this Section.
10. Individual Landlords. Landlord hereby agrees that so long as no Event of Default
is existing under a Lease, Landlord shall use commercially reasonable efforts to cause any assignee
of any Landlord’s interest under such Lease (including, without limitation, any landlord under any
Individual Lease Agreement under such Lease), concurrently with such assignment, to assume
Landlord’s obligations under this Agreement regarding any Demised Property covered by such
assignment.
11. Miscellaneous. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to principles of conflicts of laws.
This Agreement may be executed in any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of a
counterpart hereof by facsimile or other electronic transmission shall be effective as delivery of
a manually
14
executed counterpart. Time is of the essence of every provision of this Agreement,
including without limitation Sections 2, 3, 4, 5 and 6.
12. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the heirs, successors and assigns of the parties hereto.
13. No Recordation. The parties hereto agree that neither this Agreement, nor any
memorandum or short form hereof, may be recorded against any Demised Property without the prior
written consent of Landlord, which consent Landlord may withhold in its sole and absolute
discretion.
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IN WITNESS WHEREOF, Landlord and Leasehold Mortgagee have executed this Agreement as an
instrument under seal as of the day and year first set forth above.
| LANDLORD: | ||||
| REALTY INCOME CORPORATION, | ||||
| a Maryland corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Executive Vice President | |||
| General Counsel | ||||
| REALTY INCOME TEXAS PROPERTIES, L.P., | ||||||
| a Delaware limited partnership | ||||||
| By: | Realty Income Corporation, | |||||
| a Maryland corporation | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxxxx | |||||
| Title: | Executive Vice President | |||||
| General Counsel | ||||||
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Signature Page - 1
| REALTY INCOME PENNSYLVANIA PROPERTIES TRUST, | ||||
| a Maryland Business Trust | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Secretary | |||
| CREST NET LEASE, INC., | ||||
| a Delaware corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxx | |||
| Title: | Secretary | |||
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Signature Page - 2
| LEASEHOLD MORTGAGEE: | ||||
| CREDIT SUISSE, CAYMAN ISLANDS BRANCH, | ||||
| as Collateral Agent for the Secured Parties | ||||
| By: | /s/ Xxxxxx Xxxx | |||
| Name: | Xxxxxx Xxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Associate | |||
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ACKNOWLEDGED AND AGREED:
TENANT:
| FIRE MOUNTAIN RESTAURANTS, LLC, | ||||||||
| a Delaware limited liability company | ||||||||
| By: | Ryan’s Restaurant Group, Inc., | |||||||
| a South Carolina corporation | ||||||||
| its sole member | ||||||||
| By: | /s/ Xxxx X. Xxxxx Xx. | |||||||
| Name: | Xxxx X. Xxxxx Xx. | |||||||
| Title: | SVP of Finance | |||||||
| RYAN’S RESTAURANT GROUP, INC., | ||||||
| a South Carolina corporation | ||||||
| By: | /s/ Xxxx X. Xxxxx Xx. | |||||
| Name: | Xxxx X. Xxxxx Xx. | |||||
| Title: | SVP of Finance | |||||
| HOMETOWN BUFFET, INC., | ||||||
| a Minnesota corporation | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | Xxxxx Xxxxxx | |||||
| Title: | VP & Asst. Secretary | |||||
| OCB RESTAURANT COMPANY, LLC, | ||||||
| a Minnesota limited liability company | ||||||
| By: | /s/ Xxxxx Xxxxxx | |||||
| Name: | Xxxxx Xxxxxx | |||||
| Title: | VP & Asst. Secretary | |||||
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