Exhibit 99.1
MASTER LEASE AGREEMENT
dated as of ________________ ("Agreement")
THIS AGREEMENT, is between General Electric Capital Corporation its successors
and assigns, if any ("Lessor") and Xxxxx & Wollensky of Boston, LLC, a Delaware
Limited Liability Company with a mailing address and chief place of business at
0000 0xx Xxxxxx, Xxx Xxxx, XX 00000, Houston S&W, L.P, a Texas Limited
Partnerships with a mailing address and chief place of business at 0000 0xx
Xxxxxx, Xxx Xxxx, XX 00000, and Dallas S & W, L.P., a Texas Limited Partnership
with a mailing address and chief place of business at 0000 0xx Xxxxxx, Xxx Xxxx,
XX 00000 (each of Xxxxx & Wollensky of Boston, LLC., Houston S&W, L.P. and
Dallas S&W, L.P., is referred to herein as "Lessee"). Lessor has an office at 0
Xxxxx Xxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000. This Agreement contains the
general terms that apply to the leasing of Equipment from Lessor to the Lessee
specified on a schedule executed pursuant hereto and incorporating the terms and
conditions hereof (each a "Schedule"). The schedules executed pursuant hereto
shall be deemed to be separate instruments of lease, shall incorporate the terms
and conditions hereof and shall be between Lessor and the Lessee specified
thereon. Each reference to the term "Lessee" herein shall be deemed to refer to
each Lessee; each covenant and undertaking on the part of Lessee shall be deemed
individually applicable with respect to each Lessee.
1. LEASING
(a) Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor,
the equipment ("Equipment") described in any Schedule signed by both parties.
(b) Lessor shall purchase Equipment from the manufacturer or supplier
("Supplier") and lease it to Lessee when Lessor receives (i) a Schedule for the
Equipment, (ii) evidence of insurance which complies with the requirements of
Section 9, and (iii) such other documents as Lessor may reasonably request. Each
of the documents required above must be in form and substance satisfactory to
Lessor. Lessor hereby appoints Lessee its agent for inspection and acceptance of
the Equipment from the Supplier. Once the Schedule is signed, the Lessee may not
cancel the Schedule.
2. TERM, RENT AND PAYMENT
(a) The rent payable for the Equipment and Lessee's right to use the Equipment
shall begin on the earlier of (i) the date when the Lessee signs the Schedule
and accepts the Equipment or (ii) when Lessee has accepted the Equipment under a
Certificate of Acceptance ("Lease Commencement Date"). The term of this
Agreement shall be the period specified in the applicable Schedule. The word
"term" shall include all basic and any renewal terms.
(b) Lessee shall pay rent to Lessor at its address stated above, except as
otherwise directed by Lessor. Rent payments shall be in the amount set forth in,
and due as stated in the applicable Schedule. If any Advance Rent (as stated in
the Schedule) is payable, it shall be due when the Lessee signs the Schedule.
Advance Rent shall be applied to the first rent payment and the balance, if any,
to the final rent payment(s) under such Schedule. In no event shall any Advance
Rent or any other rent payments be refunded to Lessee. If rent is not paid
within ten (10) days of its due date, Lessee agrees to pay a late charge of five
cents ($.05) per dollar on, and in addition to, the amount of such rent but not
exceeding the lawful maximum, if any.
(c) Lessor shall not disturb Lessee's quiet enjoyment of the Equipment during
the term of the Agreement unless a default has occurred and is continuing under
this Agreement.
3. RENT ADJUSTMENT
(a) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, ("Code")), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for calendar-year
taxpayers ("Effective Rate") is higher than thirty-five percent (35%) for any
year during the lease term, then Lessor shall have the right to increase such
rent payments by requiring payment of a single additional
sum. The additional sum shall be equal to the product of (i) the Effective Rate
(expressed as a decimal) for such year less .35 (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Termination Value (defined below), divided by (iii) the
difference between the new Effective Tax Rate (expressed as a decimal) and one
(1). The adjusted Termination Value shall be the Termination Value (calculated
as of the first rent due in the year for which the adjustment is being made)
minus the Tax Benefits that would be allowable under Section 168 of the Code (as
of the first day of the year for which such adjustment is being made and all
future years of the lease term). The Termination Values and Tax Benefits are
defined on the Schedule. Lessee shall pay to Lessor the full amount of the
additional rent payment on the later of (i) receipt of notice or (ii) the first
day of the year for which such adjustment is being made.
(b) Lessee's obligations under this Section 3 shall survive any expiration or
termination of this Agreement.
4. TAXES.
(a) If permitted by law, Lessee shall report and pay promptly all taxes,
fees and assessments due, imposed, assessed or levied against any Equipment (or
purchase, ownership, delivery, leasing, possession, use or operation thereof),
this Agreement (or any rents or receipts hereunder), any Schedule, Lessor or
Lessee by any governmental entity or taxing authority during or related to the
term of this Agreement, including, without limitation, all license and
registration fees, and all sales, use, personal property, excise, gross
receipts, franchise, stamp or other taxes, imposts, duties and charges, together
with any penalties, fines or interest thereon (collectively "Taxes"). Lessee
shall have no liability for Taxes imposed by the United States of America or any
state or political subdivision thereof which are on or measured by the net
income of Lessor or gross income in lieu of a tax on Lessor's net income or
business franchise, capital, minimum taxes or items of tax preference (to the
extent such taxes are not sales, use, personal property or similar taxes) except
as provided in Sections 3 and 14(c). Lessee shall promptly reimburse Lessor (on
an after tax basis and taking into account any tax benefit available to Lessor
with respect to such reimbursed taxes) for any Taxes charged to or assessed
against Lessor. Lessee shall show Lessor as the owner of the Equipment on all
tax reports or returns, and send Lessor a copy of each report or return and
evidence of Lessee's payment of Taxes upon request.
(b) Lessee's obligations, and Lessor's rights and privileges, contained in
this Section 4 shall survive the expiration or other termination of this
Agreement.
5. REPORTS
(a) If any tax or other lien shall attach to any Equipment, Lessee will notify
Lessor in writing, within ten (10) days after Lessee becomes aware of the tax or
lien. The notice shall include the full particulars of the tax or lien and the
location of such Equipment on the date of the notice.
(b) Lessee will deliver to Lessor, Lessee's complete financial statements,
certified by a recognized firm of certified public accountants within ninety
(90) days of the close of each fiscal year of Lessee. Lessee will deliver to
Lessor copies of Lessee's quarterly financial report certified by the chief
financial officer of Lessee, within ninety (90) days of the close of each fiscal
quarter of Lessee. Lessee will deliver to Lessor all Forms 10-K and 10-Q, if
any, filed with the Securities and Exchange Commission within thirty (30) days
after the date on which they are filed.
(c) Lessor may inspect any Equipment during normal business hours after giving
Lessee reasonable prior notice.
(d) Lessee will keep the Equipment at the Equipment Location (specified in the
applicable Schedule) and will give Lessor prior written notice of any relocation
of Equipment. If Lessor asks, Lessee will promptly notify Lessor in writing of
the location of any Equipment.
(e) If any Equipment is lost or damaged (where the estimated repair costs would
exceed the greater of ten percent (10%) of the original Equipment cost or ten
thousand and 00/100 dollars ($10,000)), or is otherwise involved in an accident
causing personal injury or property damage, Lessee will promptly and fully
report the event to Lessor in writing.
(f) Lessee will furnish a certificate of an authorized officer of Lessee stating
that he has reviewed the activities of Lessee and that, to the best of his
knowledge, there exists no default or event which with notice or lapse of time
(or both) would become such a default within thirty (30) days after any request
by Lessor.
6. DELIVERY, USE AND OPERATION
(a) All Equipment shall be shipped directly from the Supplier to Lessee.
(b) Lessee agrees that the Equipment will be used by Lessee solely in the
conduct of its business and in a manner complying with all applicable laws,
regulations and insurance policies and Lessee shall not discontinue use of the
Equipment.
(c) Lessee will not move any equipment from the location specified on the
Schedule, without the prior written consent of Lessor.
(d) Lessee will keep the Equipment free and clear of all liens and encumbrances
other than those which result from acts of Lessor.
7. MAINTENANCE
(a) Lessee will, at its sole expense, maintain each unit of Equipment in good
operating order and repair, normal wear and tear excepted. The Lessee shall also
maintain the Equipment in accordance with manufacturer's recommendations. Lessee
shall make all alterations or modifications required to comply with any
applicable law, rule or regulation during the term of this Agreement. If Lessor
requests, Lessee shall affix plates, tags or other identifying labels showing
ownership thereof by Lessor. The tags or labels shall be placed in a prominent
position on each unit of Equipment.
(b) Lessee will not attach or install anything on any Equipment that will impair
the originally intended function or use of such Equipment without the prior
consent of Lessor. All additions, parts, supplies, accessories, and equipment
("Additions") furnished or attached to any Equipment that are not readily
removable shall become the property of Lessor. All Additions shall be made only
in compliance with applicable law. Lessee will not attach or install any
Equipment to or in any other personal or real property without the prior written
consent of Lessor.
8. STIPULATED LOSS VALUE
If for any reason any unit of Equipment becomes worn out, lost, stolen,
destroyed, irreparably damaged or unusable ("Casualty Occurrences") Lessee shall
promptly and fully notify Lessor in writing. Lessee shall pay Lessor the sum of
(x) the Stipulated Loss Value (see Schedule) of the affected unit determined as
of the rent payment date prior to the Casualty Occurrence; and (y) all rent and
other amounts which are then due under this Agreement on the Payment Date
(defined below) for the affected unit. The Payment Date shall be the next rent
payment date after the Casualty Occurrence. Upon Payment of all sums due
hereunder, the term of this lease as to such unit shall terminate.
9. INSURANCE
(a) Lessee shall bear the entire risk of any loss, theft, damage to, or
destruction of, any unit of Equipment from any cause whatsoever from the time
the Equipment is shipped to Lessee.
(b) Lessee agrees, at its own expense, to keep all Equipment insured for such
amounts and against such hazards as Lessor may reasonably require. All such
policies shall be with companies, and on terms, reasonably satisfactory to
Lessor. The insurance shall include coverage for damage to or loss of the
Equipment, liability for personal injuries, death or property damage. Lessor
shall be named as additional insured with a loss payable clause in favor of
Lessor, as its interest may appear, irrespective of any breach of warranty or
other act or omission of Lessee. The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00)
total liability per occurrence, unless otherwise stated in any Schedule. The
casualty/property damage coverage shall be in an amount equal to the higher of
the Stipulated Loss Value or the full replacement cost of the Equipment. No
insurance shall be subject to any co-insurance clause. The insurance policies
may not be altered or canceled by the insurer until after thirty (30) days
written notice to Lessor. Lessee agrees to deliver to Lessor evidence of
insurance reasonably satisfactory to Lessor.
(c) Lessee hereby appoints Lessor as Lessee's attorney-in-fact to make proof of
loss and claim for insurance, and to make adjustments with insurers and to
receive payment of and execute or endorse all documents, checks or drafts in
connection with insurance payments. Lessor shall not act as Lessee's
attorney-in-fact unless Lessee is in default. Lessee shall pay any reasonable
expenses of Lessor in adjusting or collecting insurance. Lessee will not make
adjustments with insurers except with respect to claims for damage to any unit
of Equipment where the repair costs are less than the lesser of ten percent
(10%) of the original Equipment cost or ten thousand and 00/100 dollars
($10,000). Lessor may, at its option, apply proceeds of insurance, in whole or
in part, to (i) repair or replace Equipment or any portion thereof, or (ii)
satisfy any obligation of Lessee to Lessor under this Agreement.
10. RETURN OF EQUIPMENT
(a) At the expiration or termination of this Agreement or any Schedule, Lessee
shall perform any testing and repairs required to place the units of Equipment
in the same condition and appearance as when received by Lessee (reasonable wear
and tear excepted) and in good working order for the original intended purpose
of the Equipment. If required the units of Equipment shall be deinstalled,
disassembled and crated by an authorized manufacturer's representative or such
other service person as is reasonably satisfactory to Lessor. Lessee shall
remove installed markings that are not necessary for the operation, maintenance
or repair of the Equipment. All Equipment will be cleaned, cosmetically
acceptable, and in such condition as to be immediately installed into use in a
similar environment for which the Equipment was originally intended to be used.
All waste material and fluid must be removed from the Equipment and disposed of
in accordance with then current waste disposal laws. Lessee shall return the
units of Equipment to a location within the continental United States as Lessor
shall direct. Lessee shall obtain and pay for a policy of transit insurance for
the redelivery period in an amount equal to the replacement value of the
Equipment. The transit insurance must name Lessor as the loss payee. The Lessee
shall pay for all costs to comply with this section (a).
(b) Until Lessee has fully complied with the requirements of Section 10(a)
above, Lessee's rent payment obligation and all other obligations under this
Agreement shall continue from month to month notwithstanding any expiration or
termination of the lease term. Lessor may terminate the Lessee's right to use
the Equipment upon ten (10) days notice to Lessee.
(c) Lessee shall provide to Lessor a detailed inventory of all components of the
Equipment including model and serial numbers. Lessee shall also provide an
up-to-date copy of all other documentation pertaining to the Equipment. All
service manuals, blue prints, process flow diagrams, operating manuals,
inventory and maintenance records shall be given to Lessor at least ninety (90)
days and not more than one hundred twenty (120) days prior to lease termination.
(d) Lessee shall make the Equipment available for on-site operational
inspections by potential purchasers at least one hundred twenty (120) days prior
to and continuing up to lease termination. Lessor shall provide Lessee with
reasonable notice prior to any inspection. Lessee shall provide personnel, power
and other requirements necessary to demonstrate electrical, hydraulic and
mechanical systems for each item of Equipment.
11. DEFAULT AND REMEDIES
(a) Lessor may in writing declare this Agreement in default if: (i) Lessee
breaches its obligation to pay rent or any other sum when due and fails to cure
the breach within ten (10) days; (ii) Lessee breaches any of its insurance
obligations under Section 9; (iii) Lessee breaches any of its other obligations
and fails to cure that breach within thirty (30) days after written notice from
Lessor; (iv) any representation or warranty made by Lessee in connection with
this Agreement shall be false or misleading in any material respect; (v) Lessee
or any guarantor or other obligor of the Lessee's obligations hereunder
("Guarantor") becomes insolvent or ceases to do business as a going concern;
(vi) any Equipment is illegally used; (vii) a petition is filed by or against
Lessee or any Guarantor of Lessee's obligations to Lessor under any bankruptcy
or insolvency laws and in the event of an involuntary petition, the petition is
not dismissed within forty-five (45) days of the filing date; (viii) there is a
default in or a revocation or anticipatory repudiation of any guarantor's
obligations under any guaranty issued in connection with this Agreement; (ix)
Lessee or any Guarantor shall be in default under any obligation equal to or in
excess of $1,000,000.00 for borrowed money, for the deferred purchase price of
property or any lease agreement and the applicable grace period with respect
thereto shall have expired; (x) Lessee or any Guarantor shall have terminated
its existence, consolidated with, merged into or conveyed or leased
substantially all of its assets as an entirety to any person (such actions
being referred to as an "Event"), unless not less than sixty (60) days prior to
such Event: (x) such person is organized and existing under the laws of the
United States or any state, and executes and delivers to Lessor an agreement
containing an effective assumption by such person of the due and punctual
performance of this Lease or guaranty thereof, as the case may be, and (y)
Lessor is reasonably satisfied as to the credit worthiness, financial
condition, management and operations of such person; (xi) effective control of
Lessee's voting capital stock, issued and outstanding from time to time, is not
retained by The Xxxxx & Wollensky Restaurant Group, Inc. ("SWRG") (unless
Lessee shall have provided sixty (60) days' prior written notice to Lessor of
the proposed disposition of stock and Lessor shall have consented thereto in
writing); or (xii) as a result of or in connection with a material change in
the ownership of SWRG's capital stock, SWRG's debt-to-worth ratio equals or
exceeds twice SWRG's debt-to-worth ratio as of the date of this Lease (unless
Lessor shall have given its prior written consent thereto). As used herein,
"debt-to-worth ratio" shall mean the ratio of (x) total liabilities which, in
accordance with generally accepted accounting principles ("GAAP") would be
included in the liability side of a balance sheet, to (y) tangible net worth
including the sum of the par or stated value of all outstanding capital stock,
surplus and undivided profits, less any amounts attributable to goodwill,
patents, copyrights, mailing lists, catalogs, trademarks, bond discount and
underwriting expenses, organization expense and other intangibles, all
determined in accordance with GAAP. Any provision of this Agreement to the
contrary notwithstanding, Lessor may exercise all rights and remedies hereunder
independently with respect to each Schedule.
(b) After a default, at the request of Lessor, Lessee shall comply with the
provisions of Section 10(a). Lessee hereby authorizes Lessor to peacefully enter
any premises where any Equipment may be and take possession of the Equipment.
Lessee shall immediately pay to Lessor without further demand as liquidated
damages for loss of a bargain and not as a penalty, the Stipulated Loss Value of
the Equipment (calculated as of the rent date next preceding the declaration of
default), and all rents and other sums then due under this Agreement and all
Schedules. Lessor may terminate this Agreement as to any or all of the
Equipment. A termination shall occur only upon written notice by Lessor to
Lessee and only as to the units of Equipment specified in any such notice.
Lessor may, but shall not be required to, sell Equipment at private or public
sale, in bulk or in parcels, with or without notice, and without having the
Equipment present at the place of sale. Lessor may also, but shall not be
required to, lease, otherwise dispose of or keep idle all or part of the
Equipment. Lessor may use Lessee's premises for a reasonable period of time for
any or all of the purposes stated above without liability for rent, costs,
damages or otherwise. The proceeds of sale, lease or other disposition, if any,
shall be applied in the following order of priorities: (1) to pay all of
Lessor's costs, charges and expenses incurred in taking, removing, holding,
repairing and selling, leasing or otherwise disposing of Equipment; then, (2) to
the extent not previously paid by Lessee, to pay Lessor all sums due from Lessee
under this Agreement; then (3) to reimburse to Lessee any sums previously paid
by Lessee as liquidated damages; and (4) any surplus shall be retained by
Lessor. Lessee shall immediately pay any deficiency in (1) and (2) above.
(c) The foregoing remedies are cumulative, and any or all thereof may be
exercised instead of or in addition to each other or any remedies at law, in
equity, or under statute. Lessee waives notice of sale or other disposition (and
the time and place thereof), and the manner and place of any advertising. Lessee
shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement, assertion, defense or preservation of Lessor's rights and remedies
under this Agreement, or if prohibited by law, such lesser sum as may be
permitted. Waiver of any default shall not be a waiver of any other or
subsequent default.
(d) Any default under the terms of this or any other agreement between Lessor
and Lessee may be declared by Lessor a default under this and any such other
agreement.
12. ASSIGNMENT: LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET ANY
EQUIPMENT OR THE INTEREST OF LESSEE IN THE EQUIPMENT WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR. Lessor may, without the consent of Lessee, assign this
Agreement, any Schedule or the right to enter into a Schedule. Lessee agrees
that if Lessee receives written notice of an assignment from Lessor, Lessee will
pay all rent and all other amounts payable under any assigned Schedule to such
assignee or as instructed by Lessor. Lessee also agrees to confirm in writing
receipt of the notice of assignment as may be reasonably requested by assignee.
Lessee hereby waives and agrees not to assert against any such assignee any
defense, set-off, recoupment claim or counterclaim which Lessee has or may at
any time have against Lessor for any reason whatsoever.
13. NET LEASE: Lessee is unconditionally obligated to pay all rent and other
amounts due for the entire lease term no matter what happens, even if the
Equipment is damaged or destroyed, if it is defective or if Lessee no longer can
use it. Lessee is not entitled to reduce or set-off against rent or other
amounts due to Lessor or to anyone to whom Lessor assigns this Agreement or any
Schedule whether Lessee's claim arises out of this Agreement, any Schedule, any
statement by Lessor, Lessor's liability or any manufacturer's liability, strict
liability, negligence or otherwise.
14. INDEMNIFICATION
(a) Lessee hereby agrees to indemnify Lessor, its agents, employees, successors
and assigns (on an after tax basis and taking into account any tax benefit
available to Lessor with respect to such indemnified amounts) from and against
any and all losses, damages, penalties, injuries, claims, actions and suits,
including legal expenses, of whatsoever kind and nature arising out of or
relating to the Equipment or this Agreement, except to the extent the losses,
damages, penalties, injuries, claims, actions, suits or expenses result from
Lessor's gross negligence or willful misconduct ("Claims"). This indemnity shall
include, but is not limited to, Lessor's strict liability in tort and Claims,
arising out of (i) the selection, manufacture, purchase, acceptance or rejection
of Equipment, the ownership of Equipment during the term of this Agreement, and
the delivery, lease, possession, maintenance, uses, condition, return or
operation of Equipment (including, without limitation, latent and other defects,
whether or not discoverable by Lessor or Lessee and any claim for patent,
trademark or copyright infringement or environmental damage) or (ii) the
condition of Equipment sold or disposed of after use by Lessee, any sublessee or
employees of Lessee. Lessee shall, upon request, defend any actions based on, or
arising out of, any of the foregoing.
(b) Lessee hereby represents, warrants and covenants that (i) on the Lease
Commencement Date for any unit of Equipment, such unit will qualify for all of
the items of deduction and credit specified in Section C of the applicable
Schedule ("Tax Benefits") in the hands of Lessor, and (ii) at no time during the
term of this Agreement will Lessee take or omit to take, nor will it permit any
sublessee or assignee to take or omit to take, any action (whether or not such
act or omission is otherwise permitted by Lessor or by this Agreement), which
will result in the disqualification of any Equipment for, or recapture of, all
or any portion of such Tax Benefits.
(c) If as a result of a breach of any representation, warranty or covenant of
the Lessee contained in this Agreement or any Schedule (1) tax counsel of Lessor
shall determine that Lessor is not entitled to claim on its Federal income tax
return all or any portion of the Tax Benefits with respect to any Equipment, or
(2) any Tax Benefit claimed on the Federal income tax return of Lessor is
disallowed or adjusted by the Internal Revenue Service, or (3) any Tax Benefit
is recalculated or recaptured (any determination, disallowance, adjustment,
recalculation or recapture being a "Loss"), then Lessee shall pay to Lessor, as
an indemnity and as additional rent, an amount that shall, in the reasonable
opinion of Lessor, cause Lessor's after-tax economic yields and cash flows to
equal the Net Economic Return that would have been realized by Lessor if such
Loss had not occurred. Such amount shall be payable upon demand accompanied by a
statement describing in reasonable detail such Loss and the computation of such
amount. The economic yields and cash flows shall be computed on the same
assumptions, including tax rates as were used by Lessor in originally evaluating
the transaction ("Net Economic Return"). If an adjustment has been made under
Section 3 then the Effective Rate used in the next preceding adjustment shall be
substituted.
(d) All references to Lessor in this Section 14 include Lessor and the
consolidated taxpayer group of which Lessor is a member. All of Lessor's rights,
privileges and indemnities contained in this Section 14 shall survive the
expiration or other termination of this Agreement. The rights, privileges and
indemnities contained herein are expressly made for the benefit of, and shall be
enforceable by Lessor, its successors and assigns.
15. DISCLAIMER: LESSEE ACKNOWLEDGES THAT IT HAS SELECTED THE EQUIPMENT WITHOUT
ANY ASSISTANCE FROM LESSOR, ITS AGENTS OR EMPLOYEES. LESSOR DOES NOT MAKE, HAS
NOT MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT LEASED UNDER THIS AGREEMENT OR ANY COMPONENT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY OF MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All such risks, as between Lessor and Lessee, are to be borne by Lessee. Without
limiting the foregoing, Lessor shall have no responsibility or liability to
Lessee or any other person with respect to any of the following (1) any
liability, loss or damage caused or alleged to be caused directly or indirectly
by any Equipment, any inadequacy thereof, any deficiency or defect (latent or
otherwise) of the Equipment, or any other circumstance in connection with the
Equipment; (2) the use, operation or performance of any Equipment or any risks
relating to it; (3) any interruption of service, loss of business or anticipated
profits or consequential damages; or (4) the delivery, operation, servicing,
maintenance, repair, improvement or replacement of any Equipment. If, and so
long as, no default exists under this Lease, Lessee shall be, and hereby is,
authorized during the term of this Lease to assert and enforce whatever claims
and rights Lessor may have against any Supplier of the Equipment at Lessee's
sole cost and expense, in the name of and for the account of Lessor and/or
Lessee, as their interests may appear.
16. REPRESENTATIONS AND WARRANTIES OF LESSEE: Lessee makes each of the following
representations and warranties to Lessor on the date hereof and on the date of
execution of each Schedule.
(a) Lessee has adequate power and capacity to enter into, and perform under,
this Agreement and all related documents (together, the "Documents"). Lessee is
duly qualified to do business wherever necessary to carry on its present
business and operations, including the jurisdiction(s) where the Equipment is or
is to be located.
(b) The Documents have been duly authorized, executed and delivered by Lessee
and constitute valid, legal and binding agreements, enforceable in accordance
with their terms, except to the extent that the enforcement of remedies may be
limited under applicable bankruptcy and insolvency laws.
(c) No approval, consent or withholding of objections is required from any
governmental authority or entity with respect to the entry into or performance
by Lessee of the Documents except such as have already been obtained.
(d) The entry into and performance by Lessee of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessee or any
provision of Lessee's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessee is a party.
(e) There are no suits or proceedings pending or threatened in court or before
any commission, board or other administrative agency against or affecting
Lessee, which if decided against Lessee will have a material adverse effect on
the ability of Lessee to fulfill its obligations under this Agreement.
(f) The Equipment accepted under any Certificate of Acceptance is and will
remain tangible personal property.
(g) Each financial statement delivered to Lessor has been prepared in accordance
with generally accepted accounting principles consistently applied. Since the
date of the most recent financial statement, there has been no material adverse
change.
(h) Lessee's exact legal name is as set forth in the first sentence of this
Agreement and Lessee is and will be at all times validly existing and in good
standing under the laws of the State of its incorporation (specified in the
first sentence of this Agreement).
(i) The Equipment will at all times be used for commercial or business purposes.
(j) Lessee is and will remain in full compliance with all laws and regulations
applicable to it including, without limitation, (i) ensuring that no person who
owns a controlling interest in or otherwise controls Lessee is or shall be (Y)
listed on the Specially Designated Nationals and Blocked Person List maintained
by the Office of Foreign Assets Control ("OFAC"), Department of the Treasury,
and/or any other similar lists maintained by OFAC pursuant to any authorizing
statute, Executive Order or regulation or (Z) a person designated under Section
1(b), (c) or (d) of Executive Order No. 13224 (September 23, 2001), any related
enabling legislation or any other similar Executive Orders, and (ii) compliance
with all applicable Bank Secrecy Act ("BSA") laws, regulations and government
guidance on BSA compliance and on the prevention and detection of money
laundering violations.
REPRESENTATIONS AND WARRANTIES OF LESSOR: Lessor makes each of the following
representations and warranties to Lessee on the date hereof and on the date of
execution of each Schedule.
(a) Lessor has adequate power and capacity to enter into, and perform under,
this Agreement and all related Documents.
(b) The Documents have been duly authorized, executed and delivered by Lessor
and constitute valid, legal and binding agreements, enforceable against Lessor
in accordance with their terms, except to the extent that the enforcement of
remedies may be limited under applicable bankruptcy and insolvency laws.
(c) The entry into and performance by Lessor of the Documents will not: (i)
violate any judgment, order, law or regulation applicable to Lessor or any
provision of Lessor's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge, security interest or other encumbrance upon any Equipment pursuant to
any indenture, mortgage, deed of trust, bank loan or credit agreement or other
instrument (other than this Agreement) to which Lessor is a party.
(d) Lessor is validly existing and in good standing under the laws of the state
of its incorporation.
17. EARLY TERMINATION
(a) On or after the First Termination Date (specified in the applicable
Schedule), Lessee may, so long as no default exists hereunder, terminate this
Agreement as to all (but not less than all) of the Equipment on such Schedule as
of a rent payment date ("Termination Date"). Lessee must give Lessor at least
ninety (90) days prior written notice of the termination.
(b) Lessee shall, and Lessor may, solicit cash bids for the Equipment on an AS
IS, WHERE IS BASIS without recourse to or warranty from Lessor, express or
implied ("AS IS BASIS"). Prior to the Termination Date, Lessee shall (i) certify
to Lessor any bids received by Lessee and (ii) pay to Lessor (A) the Termination
Value (calculated as of the rent due on the Termination Date) for the Equipment,
and (B) all rent and other sums due and unpaid as of the Termination Date.
(c) If all amounts due hereunder have been paid on the Termination Date, Lessor
shall (i) sell the Equipment on an AS IS BASIS for cash to the highest bidder
and (ii) refund the proceeds of such sale (net of any related expenses) to
Lessee up to the amount of the Termination Value. If such sale is not
consummated, no termination shall occur and Lessor shall refund the Termination
Value (less any expenses incurred by Lessor) to Lessee.
(d) Notwithstanding the foregoing, Lessor may elect by written notice, at any
time prior to the Termination Date, not to sell the Equipment. In that event, on
the Termination Date Lessee shall (i) return the Equipment (in accordance with
Section 10) and (ii) pay to Lessor all amounts required under Section 17(b) less
the amount of the highest bid certified by Lessee to Lessor.
18. PURCHASE OPTION
(a) Lessee may at lease expiration purchase all (but not less than all) of the
Equipment in any Schedule on an AS IS BASIS for cash equal to its then Fair
Market Value (plus all applicable sales taxes). Lessee must notify Lessor of its
intent to purchase the Equipment in writing at least one hundred eighty (180)
days in advance. If Lessee is in default or if the Lease has already been
terminated Lessee may not purchase the Equipment.
(b) "Fair Market Value" shall mean the price that a willing buyer (who is
neither a lessee in possession nor a used equipment dealer) would pay for the
Equipment in an arm's-length transaction to a willing seller under no compulsion
to sell. In determining the Fair Market Value the Equipment shall be assumed to
be in the condition in which it is required to be maintained and returned under
this Agreement. If the Equipment is installed it shall be valued on an installed
basis. The costs of removal from current location shall not be a deduction from
the value of the Equipment. If Lessor and Lessee are unable to agree on the Fair
Market Value at least one hundred thirty-five (135) days before lease
expiration, Lessor shall appoint an independent appraiser (reasonably acceptable
to Lessee) to determine Fair Market Value. The independent appraiser's
determination shall be final, binding and conclusive. Lessee shall bear all
costs associated with any such appraisal.
(c) Lessee shall be deemed to have waived this option unless it provides Lessor
with written notice of its irrevocable election to exercise the same within
fifteen (15) days after Fair Market Value is told to Lessee.
19. MISCELLANEOUS
(a) LESSEE AND LESSOR UNCONDITIONALLY WAIVE THEIR RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE
RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR RELATING TO THE
SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT. THIS WAIVER IS IRREVOCABLE. THIS WAIVER MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING. THE WAIVER ALSO SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT,
ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS
TRANSACTION OR ANY RELATED TRANSACTION. THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
(b) The Equipment shall remain Lessor's property unless Lessee purchases the
Equipment from Lessor and until such time Lessee shall only have the right to
use the Equipment as a lessee. Any cancellation or termination by Lessor of this
Agreement, any Schedule, supplement or amendment hereto, or the lease of any
Equipment hereunder shall not release Lessee from any then outstanding
obligations to Lessor hereunder. All Equipment shall at all times remain
personal property of Lessor even though it may be attached to real property. The
Equipment shall not become part of any other property by reason of any
installation in, or attachment to, other real or personal property.
(c) Time is of the essence of this Agreement. Lessor's failure at any time to
require strict performance by Lessee of any of the provisions hereof shall not
waive or diminish Lessor's right at any other time to demand strict compliance
with this Agreement. Lessee agrees, upon Lessor's request, to execute any
instrument necessary or expedient for filing, recording or perfecting the
interest of Lessor. In addition, Lessee hereby authorizes Lessor to file a
financing statement and amendments thereto describing the Equipment described in
any and all Schedules now and hereafter executed pursuant hereto and adding any
other collateral described therein and containing any other information required
by the applicable Uniform Commercial Code. Lessee hereby ratifies its prior
authorization for Lessor to file financing statements and amendments thereto
describing the Equipment and containing any other information required by any
applicable law (including without limitation the Uniform Commercial Code) if
filed prior to the date hereof. Lessee irrevocably grants to Lessor the power to
sign Lessee's name and generally to act on behalf of Lessee to execute and file
financing statements and other documents pertaining to any or all of the
Equipment. All notices required to be given hereunder shall be deemed adequately
given if sent by registered or certified mail to the addressee at its address
stated herein, or at such other place as such addressee may have specified in
writing. This Agreement and any Schedule and Annexes thereto constitute the
entire agreement of the parties with respect to the
subject matter hereof. NO VARIATION OR MODIFICATION OF THIS AGREEMENT OR ANY
WAIVER OF ANY OF ITS PROVISIONS OR CONDITIONS, SHALL BE VALID UNLESS IN WRITING
AND SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE PARTIES HERETO.
(d) If Lessee does not comply with any provision of this Agreement, Lessor shall
have the right, but shall not be obligated, to effect such compliance, in whole
or in part. All reasonable amounts spent and obligations incurred or assumed by
Lessor in effecting such compliance shall constitute additional rent due to
Lessor. Lessee shall pay the additional rent within five days after the date
Lessor sends notice to Lessee requesting payment. Lessor's effecting such
compliance shall not be a waiver of Lessee's default.
(e) Any rent or other amount not paid to Lessor when due shall bear interest,
from the due date until paid, at the lesser of twelve percent (12%) per annum or
the maximum rate allowed by law. Any provisions in this Agreement and any
Schedule that are in conflict with any statute, law or applicable rule shall be
deemed omitted, modified or altered to conform thereto.
(f) Adjustment to Capitalized Lessor's Cost. Lessee hereby irrevocably
authorizes Lessor to adjust the Capitalized Lessor's Cost up or down by no more
than ten percent (10%) within each Schedule to account for equipment change
orders, equipment returns, invoicing errors, and similar matters. Lessee
acknowledges and agrees that the rent shall be adjusted as a result of the
change in the Capitalized Lessor's Cost. Lessor shall send Lessee a written
notice stating the final Capitalized Lessor's Cost, if it has changed.
(g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF SUCH STATE), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS OF THE LOCATION OF THE EQUIPMENT.
(h) Any cancellation or termination by Lessor, pursuant to the provision of this
Agreement, any Schedule, supplement or amendment hereto, of the lease of any
Equipment hereunder, shall not release Lessee from any then outstanding
obligations to Lessor hereunder.
(i) To the extent that any Schedule would constitute chattel paper, as such term
is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest therein may be created through the transfer
or possession of this Agreement in and of itself without the transfer or
possession of the original of a Schedule executed pursuant to this Agreement and
incorporating this Agreement by reference; and no security interest in this
Agreement and a Schedule may be created by the transfer or possession of any
counterpart of the Schedule other than the original thereof, which shall be
identified as the document marked "Original" and all other counterparts shall be
marked "Duplicate".
(j) Each party hereto agrees to keep confidential, the terms and provisions of
the Documents and the transactions contemplated hereby and thereby
(collectively, the "Transactions"). Notwithstanding the foregoing, the
obligations of confidentiality contained herein, as they relate to the
Transactions, shall not apply to the federal tax structure or federal tax
treatment of the Transactions, and each party hereto (and any employee,
representative, or agent of any party hereto) may disclose to any and all
persons, without limitation of any kind, the federal tax structure and federal
tax treatment of the Transactions. The preceding sentence is intended to cause
each Transaction to be treated as not having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the federal tax structure of the
Transactions or any federal tax matter or federal tax idea related to the
Transactions.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
General Electric Capital Corporation Xxxxx &Wollensky of Boston, LLC
By: The New York Restaurant
By:_________________________________ Group, Inc.
Name:_______________________________ Title: Managing Member
Title:______________________________ By:____________________________
Name:__________________________
Title:_________________________
LESSEE: LESSEE:
Houston S&W, L.P. Dallas S&W, L.P.
By: Xxxxx & Wollensky of Houston LLC By: S & W of Dallas LLC
Title: General Partner Title: General Partner
By:_________________________________ By:____________________________
Name:_______________________________ Name:__________________________
Title: Managing Member Title: Managing Member
EQUIPMENT SCHEDULE
SCHEDULE NO. SBC-1
DATED THIS ____________________
TO MASTER LEASE AGREEMENT
DATED AS OF ____________________
Lessor & Mailing Address: Lessee & Mailing Address:
--------------------------------------------------------------------------------
AMERITECH CREDIT CORPORATION, DBA XXXXX & WOLLENSKY OF BOSTON, LLC
SBC CAPITAL SERVICES ARMORY CASTLE
0000 X. XXX XXXXXX XXXXX 000 XXXXXXXXX XXXXXX
XXXXXXX XXXXXXX, XX 00000 XXXXXX, XX 00000
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. Equipment: Subject to the terms and conditions of the Lease, Lessor agrees to
Lease to Lessee the Equipment described below (the "Equipment").
Number Capitalized
of Units Lessor's Cost Manufacturer Serial Number Model and Type of Equipment
--------------------------------------------------------------------------------------------------
SEE ATTACHED ANNEX "A"
Equipment immediately listed above is located at: 000 Xxxxxxxxx Xxxxxx, Xxxxxx , Xxxxxx, XX 00000
B. Financial Terms
1. Advance Rent (if any): $ 12,660.98 5. Basic Term Commencement Date : December ____, 2004
2. Capitalized Lessor's Cost: $ 661,391.75 6. Lessee Federal Tax ID No.: 00-0000000
3. Basic Term (No. of Months): 60 Months. 7. Last Delivery Date: November 24, 2004
4. Basic Term Lease Rate Factor: .01914294 8. Daily Lease Rate Factor: .00063810
9. First Termination Date: Thirty-seven (37) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on NA.
11. Basic Term Rent. Commencing on December ___, 2004 and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic
Term, Lessee shall pay as rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
12. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on ____________________ (the "Renewal Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for the renewal period (as hereinafter defined),
Lessee shall pay as rent the Fair Market Rental Value (as defined
hereafter).
C. Tax Benefits Depreciation Deductions:
1. Depreciation method is the 200 % declining balance method, switching to
straight line method for the 1st taxable year for which using the
straight line method with respect to the adjusted basis as of the
beginning of such year will yield a larger allowance., taking into
account the 50% special depreciation allowance and basis adjustment under
Section 168(k)(1) of the Code, whichever is applicable.
2. Recovery Period: Five (5) Years.
3. Basis: 100 % of the Capitalized Lessor's Cost.
D. Property Tax
PROPERTY TAX NOT APPLICABLE ON EQUIPMENT LOCATED IN MA.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. Article 2A Notice
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES
THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A)
THE PERSON(S) SUPPLYING THE EQUIPMENT IS TRIMARK UNITED EAST (THE
"SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND WARRANTIES,
INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY SUPPLIER(S),
WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS PART OF THE
CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH RESPECT TO
SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND RECEIVE AN
ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND WARRANTIES, INCLUDING
ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF REMEDIES. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES ANY AND ALL RIGHTS AND
REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND ANY RIGHTS NOW OR
HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY LIMIT OR MODIFY ANY
OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND REMEDIES SECTION OF
THE AGREEMENT.
F. Stipulated Loss and Termination Value Table*
TERM VAL/% OF STIP LOSS/% OF # OF BASE TERM VAL/% OF STIP LOSS/% OF
# OF BASE PMTS COST COST PMTS COST COST
1 0 109.6543379 31 0 70.96617786
2 0 108.5219487 32 0 69.52775544
3 0 107.3798371 33 0 68.07867411
4 0 106.2279741 34 0 66.62187093
5 0 105.0637961 35 0 65.15731193
6 0 103.8872738 36 0 63.68199218
7 0 102.6983779 37 50.3343098 62.1988482
8 0 101.4970789 38 48.6293295 60.7078455
9 0 100.2858815 39 46.9134851 59.20597861
10 0 99.06222137 40 45.1867416 57.69321269
11 0 97.82606854 41 43.4520349 56.17248356
12 0 96.57992735 42 41.7093298 54.64375601
13 0 95.32123297 43 39.9585909 53.10699466
14 0 94.04995493 44 38.1997826 51.56216396
15 0 92.76859712 45 36.4298984 50.00625734
16 0 91.47712877 46 34.6518732 48.4422097
17 0 90.17642523 47 32.8656709 46.86998491
18 0 88.86645541 48 31.0682842 45.28657587
19 0 87.54718804 49 29.2626477 43.69491689
20 0 86.21859171 50 27.4487246 42.09497131
21 0 84.87972849 51 25.6235071 40.48373145
22 0 83.53147295 52 23.7869583 38.86116023
23 0 82.17379319 53 21.9534154 37.24159487
24 0 80.8057508 54 20.1188543 35.62101137
25 0 79.42821986 55 18.2748219 33.99095652
26 0 78.04116795 56 16.4212693 32.35138144
27 0 76.64365618 57 14.5581472 30.70223696
28 0 75.23565179 58 12.6854064 29.0434737
29 0 73.82009269 59 10.8029971 27.37504198
30 0 72.3969458 60 8.91086947 25.6968919
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. Modifications and Additions for This Schedule Only
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead:
b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or
prior to the earlier of the Lease Commencement Date or Last Delivery Date
therefor, of each of the following documents in form and substance
satisfactory to Lessor: (i) a Schedule for the Equipment (ii) evidence of
insurance which complies with the requirements of the INSURANCE Section of
the Lease, and (iii) such other documents as Lessor may reasonably
request. Once the Schedule is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease
shall be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.
3. RENT ADJUSTMENT:
(a) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition
to, the Internal Revenue Code of 1986, as amended, ("Code")), the maximum
effective corporate income tax rate (exclusive of any minimum tax rate) for
calendar-year taxpayers ("Effective Rate") is higher than thirty-five percent
(35%) for any year during the lease term, then Lessor shall have the right to
increase such rent payments by requiring payment of a single additional sum. The
additional sum shall be equal to the product of (i) the Effective Rate
(expressed as a decimal) for such year less .35 (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Termination Value (defined below), divided by (iii) the
difference between the new Effective Rate (expressed as a decimal) and one (1).
The adjusted Termination Value shall be the Termination Value (calculated as of
the first rent due in the year for which the adjustment is being made) minus the
Tax Benefits that would be allowable under Section 168 of the Code (as of the
first day of the year for which such adjustment is being made and all future
years of the lease term). The Termination Values and Tax Benefits are defined on
the Schedule. Lessee shall pay to Lessor the full amount of the additional rent
payment on the later of (i) receipt of notice or (ii) the first day of the year
for which such adjustment is being made.
(b) If, solely as a result of Congressional enactment of any law
(including, without limitation, any modification of, or amendment or addition
to, the Code, the Effective Rate is lower than thirty-five percent (35%) for any
year during the lease term, then Lessor shall upon request reduce such rent
payments by a single sum. The reduction shall be equal to the product of (i) the
Effective Rate (expressed as a decimal) for such year less .35 (or, in the event
that any adjustment has been made hereunder for any previous year, the Effective
Rate (expressed as a decimal) used in calculating the next previous adjustment)
times (ii) the adjusted Termination Value (defined below), divided by (iii) the
difference between the new Effective Tax Rate (expressed as a decimal) and one
(1). The adjusted Termination Value shall be the Termination Value (calculated
as of the first rent due in the year for which the adjustment is being made)
minus the Tax Benefits that would be allowable under Section 168 of the Code (as
of the first day of the year
for which such adjustment is being made and all future years of the lease term).
The Termination Values and Tax Benefits are defined on the Schedule. Lessor
shall pay to Lessee the full amount of the rent reduction on the later of (i)
receipt of notice or (ii) the first day of the year for which such adjustment is
being made.
(c) Lessee's obligations under this Section 3 shall survive any expiration
or termination of this Agreement.
4. XXXX OF SALE
Lessee, in consideration of the Lessor's payment of the amount set forth
in B 2. above, which includes any applicable sales taxes (which payment
Lessee acknowledges), hereby grants, sells, assigns, transfers and
delivers to Lessor the Equipment along with whatever claims and rights
Seller may have against the manufacturer and/or Supplier of the Equipment,
including but not limited to all warranties and representations. At
Lessors request Lessee will cause Supplier to deliver to Lessor a written
statement wherein the Supplier (i) consents to the assignment to Lessor of
whatever claims and rights Lessee may have against the Supplier, (ii)
agrees not to retain any security interest, lien or other encumbrance in
or upon the Equipment at any time, and to execute such documents as Lessor
may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final
purchase price of the Equipment (or a specified portion of such purchase
price) has been paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant to
the Lease. Lessee represents and warrants to Lessor that (i) Lessor will
acquire by the terms of this Xxxx of Sale good title to the Equipment free
from all liens and encumbrances whatsoever; (ii) Lessee has the right to
sell the Equipment; and (iii) the Equipment has been delivered to Lessee
in good order and condition, and conforms to the specifications,
requirements and standards applicable thereto; and (iv) the equipment has
been accurately labeled, consistent with the requirements of 40 CFR part
82 Subpart E, with respect to products manufactured with a controlled
(ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and
all federal, state, municipal and local license fees and taxes of any kind
or nature, including, without limiting the generality of the foregoing,
any and all excise, personal property, use and sales taxes, and from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions and suits resulting therefrom and imposed upon, incurred
by or asserted against Lessor as a consequence of the sale of the
Equipment to Lessor.
5. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above
has been delivered and installed (if applicable); (ii) Lessee has
inspected the Equipment, and all such testing as it deems necessary has
been performed by Lessee, Supplier or the manufacturer; and (iii) Lessee
accepts the Equipment for all purposes of the Lease, the purchase
documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made
by Lessee pursuant to or under the Lease are true and correct on the date
hereof and (iii) Lessee has reviewed and approves of the purchase
documents for the Equipment, if any.
6. EQUIPMENT SPECIFIC PROVISIONS
MAINTENANCE PROVISIONS: In addition to the provisions provided for in the
MAINTENANCE Section of the Lease, Lessee shall, at its expense:
(a) maintain the Equipment in a manner and frequency suggested by the
manufacturer.
(b) maintain the Equipment in an operable state and shall not discontinue
operation of the Equipment throughout the Lease term.
(c) maintain the Equipment to industry standards.
(d) maintain the Equipment in a similar manner and fashion as if the
Equipment were owned by the Lessee.
(e) maintain the Equipment under a preventive maintenance program by
qualified professionals who possess a working knowledge of the mechanical
operation of the Equipment including electrical systems, motors, drives,
controls, accessories, lubricants and all other items necessary to make the
machine operate to its original manufacturer's specifications.
(f) have the Equipment meet all local, state, and federal laws, regulations
and codes that regulate the use and operation of such Equipment and will not
contribute to or be used in any way as to directly or indirectly violate any
local, state or federal law including Food and Drug Administration and
Environmental Protection Agency.
(g) maintain a maintenance log on the Equipment showing all routine and
non-routine maintenance and repairs. Said log shall list in summary form
maintenance, repairs or modifications performed on the Equipment, the date
any and all of such service and by whom the service was performed. This log
shall be made available to the Lessor at its request during normal working
hours or the Lessee.
INSPECTION: The REPORTS Section subsection (c) of the Lease is deleted and
replaced with the following:
(c) Lessor at its sole discretion, may from time to time, inspect the
Equipment at the Lessors sole expense. If any discrepancies are found as
they pertain to the general condition of the Equipment as required
hereunder, the Lessor will, communicate these discrepancies to the Lessee in
writing. The Lessee shall have thirty (30) days to rectify these
discrepancies at his sole expense. The Lessee should pay all expenses for a
re-inspection by a Lessor appointed expert if corrective measures are
required.
RETURN PROVISIONS: In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that Lessee has elected not
to exercise its option to purchase the Equipment, Lessee shall, at its
expense:
(A) At least one hundred eighty (180) days, but not more than two hundred
forty (240) days, prior to Lease termination, provide to Lessor written
notification of intent to return all, but not less than all, of the
equipment covered under this Lease schedule;
(B) At least thirty (30) days, but not more than sixty (60) days, prior to
Lease termination:
(i) Ensure all Equipment has been properly maintained in accordance
with the manufacturers' recommended maintenance procedures and is
operating within manufacturers' specifications;
(ii) Cause manufacturers' representatives or other qualified
maintenance providers, acceptable to Lessor, to perform a physical
inspection and test of all the components and capabilities of the
Equipment and provide a full inspection report to Lessor. The Equipment
must be free of all large scratches, marks, gouges, dents,
discoloration or stains; all drawers, runners, and locks will be in
good working condition and include keys; all seat cushions shall be
free of cuts, tears, rips, scratches, xxxxx, stains or discoloration;
there shall be no evidence of extreme use or overloading, i.e. bowed or
sagging shelves or seats; there shall be no missing screws, bolts,
fasteners, etc. If during such inspection the Equipment is found not to
be in compliance with the above, then Lessee shall remedy all items not
in compliance and provide for a follow-up inspection to verify the
Equipment meets these return provisions;
(C) Upon Lease termination, Lessee shall have the manufacturers'
representatives, or other persons acceptable to Lessor, de-install all
Equipment, including all wire, cable, and mounting hardware and ensure:
(i) All kitchen related equipment is clean and free of dirt, grease,
rust, corrosion and must be in such condition so as to be immediately
capable of being installed and used in a similar working environment.
(ii) All fryers are drained of their cooking oil and properly cleaned;
(iii) The Equipment shall be packed properly and in accordance to the
manufacturers' recommendations;
(iv) All necessary permits and labor are obtained to perform the
required work;
(D) At Lessor's choice, either (1) allow Lessor, at Lessor's expense, and
provided Lessor has provided reasonable notice to Lessee, to arrange for an
on-site auction of the Equipment which will be conducted in a manner that
will not interfere with the Lessee's normal business operations, or (2)
Lessee shall provide free, safe storage and insurance for the Equipment for
a period not to exceed ninety (90) days from the Lease expiration at a
location satisfactory and accessible to Lessor;
(E) Lessee shall provide for the transportation of the Equipment in a
manner consistent with the manufacturers' recommendations and practices to
any location(s) within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such location(s). Lessee
shall be responsible for ensuring all necessary permits and labor are
obtained to deliver the Equipment to Lessor;
(F) Lessee shall obtain and pay for a policy of transit insurance for the
redelivery period in an amount equal to the replacement value of the
Equipment and Lessor shall be named as the loss payee on all such policies
of insurance.
7. LEASE TERM OPTIONS
Early Lease Term Options
The Lease is hereby amended by adding the following to the end thereof:
CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly provided that all
of the terms and conditions of this Provision are fulfilled, Lessee may cancel
the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of the Cancellation Date set forth below (the "Cancellation Date")
upon at least 90 days prior written notice (the "Notice Date") to Lessor (which
notice shall be irrevocable and shall be sent to the attention of Lessor's Asset
Management Organization, 0000 X. XXX Xxxxxx Xxxxx, Xxxxxxx Xxxxxxx, XX 60196).
Such notice shall state the Cancellation Date which shall apply. If all of the
terms and conditions of this Provision are not fulfilled, this Lease shall
continue in full force and effect and Lessee shall continue to be liable for all
obligations thereunder, including, without limitation, the obligation to
continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value (set
forth below for the Cancellation Date) for the Equipment, plus (B) all rent and
all other sums due and unpaid as of the Cancellation Date (including, but not
limited to, any Rent payment due and payable on the Cancellation Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified by
an independent appraiser selected by Lessor (reasonably acceptable to Lessee) to
determine that the Equipment is in such compliance, which determination shall be
final, binding and conclusive. Lessee shall bear all costs associated with such
appraiser's determination and such costs, if any, to cause the Equipment to be
in full compliance with the RETURN OF EQUIPMENT Section of the Lease on or prior
to the Cancellation Date.
(c) The Cancellation Date and the applicable Cancellation Value are as set
forth below: January , 2008 $ 233,008.31
(d) Lessee shall, from the applicable Notice Date through the Cancellation
Date,
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the Cancellation Date through the earlier of the
date the Equipment is sold by Lessor to a third party or 30 days following the
Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor and
Lessee shall have no interest in or any claim upon any of such proceeds.
The Lease is amended by adding the following thereto:
EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been earlier terminated and provided
further that Lessee is not in default under the Lease or any other agreement
between Lessor and Lessee, Lessee may, UPON AT LEAST 30 DAYS BUT NO MORE THAN
270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S IRREVOCABLE ELECTION TO
EXERCISE SUCH OPTION, purchase on an AS IS BASIS all (but not less than all) of
the Equipment listed and described in this Schedule on the rent payment date
(the "Early Purchase Date") which is 49 months from the Basic Term Commencement
Date for a price equal to twenty-seven percent (27%) of the Capitalized Lessor's
Cost (the "FMV Early Option Price"), plus all applicable sales taxes.
Lessor and Lessee agree that the FMV Early Option Price is a reasonable
prediction of the Fair Market Value (as such term is defined in the PURCHASE
OPTION Section subsection (b) of the Lease hereof) of the Equipment at the time
the option is exercisable. Lessor and Lessee agree that if Lessee makes any
non-severable improvement to the Equipment which increases the value of the
Equipment and is not required or permitted by the MAINTENANCE Section or the
RETURN OF EQUIPMENT Section of the Lease prior to lease expiration, then at the
time of such option being exercised, Lessor and Lessee shall adjust the purchase
price to reflect any addition to the price anticipated to result from such
improvement. (The purchase option granted by this subsection shall be referred
to herein as the "Early Purchase Option".)
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment leased hereunder, then on the Early Purchase Option Date, Lessee shall
pay to Lessor any Rent and other sums due and unpaid on the Early Purchase
Option Date and Lessee shall pay the FMV Early Option Price, plus all applicable
sales taxes, to Lessor in cash.
End of Basic Term Options
At the expiration of the Basic Term (the "Basic Term Expiration Date"), so
long as no default has occurred and is continuing hereunder and this
Agreement has not been earlier terminated, Lessee shall exercise one of the
following options:
(1) RENEWAL OPTION. (i) So long as no default exists hereunder and the
Lease has not been earlier terminated, Lessee may at expiration of the
Basic Term, upon at least 120 days but not more than 270 days prior written
notice to Lessor, extend the term of the Lease with respect to all (but not
less than all) of the Equipment in this Lease for a term to be agreed upon
by Lessee and Lessor (the "Renewal Period") for a scheduled monthly rental
equal to the monthly Fair Market Rental Value thereof determined as of the
end of the Renewal Term.
(ii) "Fair Market Rental Value" shall mean the price which a
willing lessee would pay for the rental of the Equipment in an arms-length
transaction to a willing lessor under no compulsion to lease for a time
period similar to the Renewal Period; provided, however, that in such
determination: (i) the Equipment shall be assumed to be in the condition in
which it is required to be maintained and returned under this Lease (ii) in
the case of any installed additions to the Equipment, same shall be valued
on an installed basis; and (iii) costs of removal of the Equipment from the
current location shall not be a deduction from such valuation. If Lessor
and Lessee are unable to agree on the Fair Market Rental Value at least 135
days before Lease expiration, Lessor shall appoint an independent appraiser
(reasonably acceptable to Lessee) to determine Fair Market Rental Value,
and that determination shall be final, binding and conclusive. Lessee shall
bear all costs associated with any such appraisal.
(iii) Lessee shall be deemed to have waived this option unless it
provides Lessor with written notice of its irrevocable election to exercise
the same within 15 days after Fair Market Rental Value is determined (by
agreement or appraisal).
(2) PURCHASE OPTION. Pursuant to the purchase option section of the
lease, upon at least one hundred eighty (180) but not more than two
hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date, Lessee may purchase all (but not less
than all) of the Equipment covered by this Schedule on an AS IS
BASIS for cash equal to the then Fair Market Value of the Equipment
(plus all applicable sales taxes).
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date (the "Notice Date"), Lessee may cancel the
Agreement (the "Cancellation Option") with respect to all (but not less than
all) of the Equipment on this Schedule. If all of the terms and conditions
of this Section are not fulfilled, this Lease shall continue in full force
and effect and Lessee shall continue to be liable for all obligations
thereunder, including, without limitation, the obligation to continue paying
rent. Lessee shall be deemed to have waived this option if it fails to
timely provide Lessor with the required written notice of its election to
exercise the same.
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent, three percent (3%) of the Capitalized
Lessor's Cost of the Equipment, plus all rent and all other sums due and
unpaid as of the Basic Term Expiration Date (including, but not limited to,
any rent payment due and payable on the Basic Term Expiration Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF EQUIPMENT
Section of the Lease, such compliance being independently verified by an
independent appraiser selected by Lessor (reasonably acceptable to Lessee)
to determine that the Equipment is in such compliance, which determination
shall be final, binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such costs, if any, to
cause the Equipment to be in full compliance with the RETURN OF EQUIPMENT
Section of the Lease on or prior to such Basic Term Expiration Date.
(b) From the applicable Notice Date through the Basic Term Expiration Date,
Lessee shall:
(i) continue to comply with all of the terms and conditions of the Lease,
including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to allow
Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to
potential purchasers or lessees from time to time, Lessee may still use the
Equipment until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiration Date through the earlier of
the date the Equipment is sold by Lessor to a third party or thirty (30)
days following the Basic Term Expiration Date, comply with the following
terms and conditions:
(i) continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) make the Equipment available to Lessor and/or allow Lessor to store the
Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor
and Lessee shall have no interest in nor any claim upon any of such
proceeds.
End of Secondary Term Options
So long as no default exists hereunder and the Lease has not been earlier
terminated, Lessee may at the expiration of the Renewal Period upon at least
one hundred eighty (180) days but not more than two hundred seventy (270)
days written notice to Lessor prior to the end of the Renewal Period,
purchase all (but not less than all) of the Equipment in this Schedule on an
AS IS, WHERE IS BASIS, without recourse to or warranty from Lessor, express
or implied ("AS IS BASIS") for cash equal to its then Fair Market Value
(plus all applicable sales taxes).
8. Exercise of early termination, early purchase option, cancellation option
and end of term options
Lessee hereby acknowledges and agrees that (i) Lessor is requiring that
each of Lessee, Xxxxx and Wollensky of Boston, LLC, a Delaware Limited Liability
Company, Houston S&W, L.P., a Texas Limited Partnership and Houston S&W, L.P., a
Texas Limited Partnership (collectively, the "S&W Lessees") be bound by the
terms of this Section G.7. as set forth in this Schedule and in each such
Schedule executed by an S&W Lessee that is designated as a Series SBC Schedule
(the "S&W Schedules") and (ii) without the S&W Lessees agreeing to be bound by
such Section G.7. Lessor would not enter into this Schedule or such other S&W
Schedules. Now, therefore, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Lessee hereby agrees that Lessee shall exercise the same early
Termination, Early Purchase Option, Cancellation Option or End of Term Option
(collectively, the "Options") that is exercised by any of the other S&W Lessees
under the S&W Schedules and in the event one of the other S&W Lessees exercises
any of the Options under any of
the other S&W Schedules Lessee shall automatically be deemed to exercise the
same Option with respect to this Schedule. Neither Lessee nor the S&W Lessees
may exercise a different Option under this Schedule or the S&W Schedules.
H. Payment Authorization
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
Company Name Address Amount
------------------------------------------------------------------------------
The Xxxxx & Wollensky Restaurant Group, Inc. 0000 0xx Xxx. $661,391.75
Fleet Bank Xxx Xxxx, XX 00000
ABA#000000000
Account #9405777935
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Pursuant to the provisions of the lease, as it relates to this Schedule, Lessee
hereby certifies and warrants that (i) all Equipment listed above has been
delivered and installed (if applicable) as of the date and stated above, and
copies of the Xxxx(s) of Lading or other documentation acceptable to Lessor
which show the date delivery are attached hereto; (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier, or the manufacturer; and (iii) Lessee accepts the Equipment
for all purposes of the Lease, the purchase documents and all attendant
documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the lease; (ii) the representation and warranties made by the
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
Lessee hereby authorizes Lessor to file a financing statement and amendments
thereto describing the Equipment described in this Schedule and adding any other
collateral described herein and containing any other information required by the
applicable Uniform Commercial Code. Further, Lessee is irrevocably grants to
Lessor the power to sign Lessee's name and generally to act on behalf of Lessee
to execute and file financing statements and other documents pertaining to any
or all of the Equipment.
Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the Agreement or Equipment until executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
AMERITECH CAPITAL CORPORATION, DBA XXXXX & WOLLENSKY OF BOSTON, LLC
SBC CAPITAL SERVICES
By:______________________________ By: THE XXXXX & WOLLENSKY
RESTAURANT GROUP, INC.
Name:____________________________
Title: Managing Member
Title:_____________________________
By:________________________
Name:______________________
Title:_____________________
EQUIPMENT SCHEDULE
SCHEDULE NO. SBC-2
DATED THIS ____________________
TO MASTER LEASE AGREEMENT
DATED AS OF ____________________
Lessor & Mailing Address: Lessee & Mailing Address:
--------------------------------------------------------------------------------
AMERITECH CREDIT CORPORATION, DBA HOUSTON S&W, L.P.
SBC CAPITAL SERVICES 0000 XXXXXXXXXX
0000 X. XXX XXXXXX XXXXX XXXXXXX, XX 00000
XXXXXXX XXXXXXX, XX 00000
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. Equipment: Subject to the terms and conditions of the Lease, Lessor agrees to
Lease to Lessee the Equipment described below (the "Equipment").
Number Capitalized
of Units Lessor's Cost Manufacturer Serial Number Model and Type of Equipment
--------------------------------------------------------------------------------------------------
SEE ATTACHED ANNEX "A"
Equipment immediately listed above is located at: 0000 Xxxxxxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
B. Financial Terms
1. Advance Rent (if any): $ 11,027.16 5. Basic Term Commencement Date : December ____, 2004
2. Capitalized Lessor's Cost: $ 576,043.03 6. Lessee Federal Tax ID No.: 00-0000000
3. Basic Term (No. of Months): 60 Months. 7. Last Delivery Date: November 24, 2004
4. Basic Term Lease Rate Factor: .01914294 8. Daily Lease Rate Factor: .00063810
9. First Termination Date: Thirty-seven (37) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on NA.
11. Basic Term Rent. Commencing on December _____, 2004 and on the same day
of each month thereafter (each, a "Rent Payment Date") during the Basic
Term, Lessee shall pay as rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
12. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on ____________________ (the "Renewal Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for the renewal period (as hereinafter defined),
Lessee shall pay as rent the Fair Market Rental Value (as defined
hereafter).
C. Tax Benefits Depreciation Deductions:
1. Depreciation method is the 200 % declining balance method, switching to
straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such
year will yield a larger allowance., taking into account the 50% special
depreciation allowance and basis adjustment under Section 168(k)(1) of the
Code, whichever is applicable.
2. Recovery Period: Five (5) Years.
3. Basis: 100 % of the Capitalized Lessor's Cost.
D. Property Tax
APPLICABLE TO EQUIPMENT LOCATED IN TEXAS: Lessee agrees that it will not list
any of such Equipment for property tax purposes or report any property tax
assessed against such Equipment until otherwise directed in writing by Lessor.
Upon receipt of any property tax xxxx pertaining to such Equipment from the
appropriate taxing authority, Lessor will pay such tax and will invoice Lessee
for the expense. Upon receipt of such invoice, Lessee will promptly reimburse
Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. Article 2A Notice
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES
THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A)
THE PERSON(S) SUPPLYING THE EQUIPMENT IS X. Xxxxxxxxxxx and Sons, Inc.
(THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND
WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY
SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS
PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH
RESPECT TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND
RECEIVE AN ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND
WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF
REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND
ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY
LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND
REMEDIES SECTION OF THE AGREEMENT.
F. Stipulated Loss and Termination Value Table*
TERM VAL/% OF STIP LOSS/% OF # OF BASE STIP LOSS/% OF
# OF BASE PMTS COST COST PMTS TERM VAL/% OF COST COST
1 0 109.6543394 31 0 70.96619108
2 0 108.5219511 32 0 69.52776861
3 0 107.3798402 33 0 68.0786872
4 0 106.227978 34 0 66.62188392
5 0 105.0638008 35 0 65.1573248
6 0 103.8872792 36 0 63.68200489
7 0 102.698384 37 50.33432232 62.19886072
8 0 101.4970856 38 48.62934185 60.70785781
9 0 100.2858889 39 46.91349715 59.20599068
10 0 99.06222932 40 45.18675339 57.69322448
11 0 97.82607703 41 43.45204638 56.17249504
12 0 96.57993636 42 41.70934094 54.64376716
13 0 95.32124247 43 39.95860167 53.10700547
14 0 94.04996487 44 38.19979303 51.56217439
15 0 92.76860748 45 36.42990843 50.00626736
16 0 91.47713951 46 34.65188278 48.44221928
17 0 90.17643633 47 32.86567996 46.86999403
18 0 88.86646685 48 31.06829285 45.28658448
19 0 87.54719979 49 29.26265578 43.69492498
20 0 86.21860373 50 27.44873208 42.09497885
21 0 84.87974076 51 25.62351405 40.48373838
22 0 83.53148545 52 23.78696464 38.86116654
23 0 82.17380589 53 21.95342131 37.24160077
24 0 80.80576366 54 20.11885961 35.62101665
25 0 79.42823285 55 18.27482655 33.99096115
26 0 78.04118105 56 16.42127321 32.35138538
27 0 76.64366935 57 14.55815046 30.70224019
28 0 75.23566501 58 12.68540887 29.04347617
29 0 73.82010593 59 10.80299881 27.37504367
30 0 72.39695904 60 8.91087034 25.69689278
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. Modifications and Additions for This Schedule Only
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead:
b) The obligation of Lessor to purchase the Equipment from Lessee and to
lease the same to Lessee shall be subject to receipt by Lessor, on or
prior to the earlier of the Lease Commencement Date or Last Delivery Date
therefore, of each of the following documents in form and substance
satisfactory to Lessor: (i) a Schedule for the Equipment (ii) evidence of
insurance which complies with the requirements of the INSURANCE Section of
the Lease, and (iii) such other documents as Lessor may reasonably
request. Once the Schedule is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease
shall be deleted and the following substituted in its stead:
The parties acknowledge that this is a sale/leaseback transaction and the
Equipment is in Lessee's possession as of the Lease Commencement Date.
3. RENT ADJUSTMENT:
(a) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, ("Code")), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for calendar-year
taxpayers ("Effective Rate") is higher than thirty-five percent (35%) for any
year during the lease term, then Lessor shall have the right to increase such
rent payments by requiring payment of a single additional sum. The additional
sum shall be equal to the product of (i) the Effective Rate (expressed as a
decimal) for such year less .35 (or, in the event that any adjustment has been
made hereunder for any previous year, the Effective Rate (expressed as a
decimal) used in calculating the next previous adjustment) times (ii) the
adjusted Termination Value (defined below), divided by (iii) the difference
between the new Effective Rate (expressed as a decimal) and one (1). The
adjusted Termination Value shall be the Termination Value (calculated as of the
first rent due in the year for which the adjustment is being made) minus the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all future years of
the lease term). The Termination Values and Tax Benefits are defined on the
Schedule. Lessee shall pay to Lessor the full amount of the additional rent
payment on the later of (i) receipt of notice or (ii) the first day of the year
for which such adjustment is being made.
(b) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the Code,
the Effective Rate is lower than thirty-five percent (35%) for any year during
the lease term, then Lessor shall upon request reduce such rent payments by a
single sum. The reduction shall be equal to the product of (i) the Effective
Rate (expressed as a decimal) for such year less .35 (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Termination Value (defined below), divided by (iii) the
difference between the new Effective Tax Rate (expressed as a decimal) and one
(1). The adjusted Termination Value shall be the Termination Value (calculated
as of the first rent due in the year for which the adjustment is being made)
minus the Tax Benefits that would be allowable under Section 168 of the Code (as
of the first day of the year for which such adjustment is being made and all
future years of the lease term). The Termination Values and Tax Benefits are
defined on the Schedule. Lessor shall pay to Lessee the full amount of the rent
reduction on the later of (i) receipt of notice or (ii) the first day of the
year for which such adjustment is being made.
(c) Lessee's obligations under this Section 3 shall survive any expiration or
termination of this Agreement.
4. XXXX OF SALE
Lessee, in consideration of the Lessor's payment of the amount set forth
in B 2. above, which includes any applicable sales taxes (which payment
Lessee acknowledges), hereby grants, sells, assigns, transfers and
delivers to Lessor the Equipment along with whatever claims and rights
Seller may have against the manufacturer and/or Supplier of the Equipment,
including but not limited to all warranties and representations. At
Lessors request Lessee will cause Supplier to deliver to Lessor a written
statement wherein the Supplier (i) consents to the assignment to Lessor of
whatever claims and rights Lessee may have against the Supplier, (ii)
agrees not to retain any security interest, lien or other encumbrance in
or upon the Equipment at any time, and to execute such documents as Lessor
may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final
purchase price of the Equipment (or a specified portion of such purchase
price) has been paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant to
the Lease. Lessee represents and warrants to Lessor that (i) Lessor will
acquire by the terms of this Xxxx of Sale good title to the Equipment free
from all liens and encumbrances whatsoever; (ii) Lessee has the right to
sell the Equipment; and (iii) the Equipment has been delivered to Lessee
in good order and condition, and conforms to the specifications,
requirements and standards applicable thereto; and (iv) the equipment has
been accurately labeled, consistent with the requirements of 40 CFR part
82 Subpart E, with respect to products manufactured with a controlled
(ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and
all federal, state, municipal and local license fees and taxes of any kind
or nature, including, without limiting the generality of the foregoing,
any and all excise, personal property, use and sales taxes, and from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions and suits resulting therefrom and imposed upon, incurred
by or asserted against Lessor as a consequence of the sale of the
Equipment to Lessor.
5. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this Schedule,
Lessee hereby certifies and warrants that (i) all Equipment listed above
has been delivered and installed (if applicable); (ii) Lessee has
inspected the Equipment, and all such testing as it deems necessary has
been performed by Lessee, Supplier or the manufacturer; and (iii) Lessee
accepts the Equipment for all purposes of the Lease, the purchase
documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is not
in default under the Lease; (ii) the representations and warranties made
by Lessee pursuant to or under the Lease are true and correct on the date
hereof and (iii) Lessee has reviewed and approves of the purchase
documents for the Equipment, if any.
6. EQUIPMENT SPECIFIC PROVISIONS
MAINTENANCE PROVISIONS: In addition to the provisions provided for in the
MAINTENANCE Section of the Lease, Lessee shall, at its expense:
(a) maintain the Equipment in a manner and frequency suggested by the
manufacturer.
(b) maintain the Equipment in an operable state and shall not discontinue
operation of the Equipment throughout the Lease term.
(c) maintain the Equipment to industry standards.
(d) maintain the Equipment in a similar manner and fashion as if the
Equipment were owned by the Lessee.
(e) maintain the Equipment under a preventive maintenance program by
qualified professionals who possess a working knowledge of the mechanical
operation of the Equipment including electrical systems, motors, drives,
controls, accessories, lubricants and all other items necessary to make the
machine operate to its original manufacturer's specifications.
(f) have the Equipment meet all local, state, and federal laws, regulations
and codes that regulate the use and operation of such Equipment and will not
contribute to or be used in any way as to directly or indirectly violate any
local, state or federal law including Food and Drug Administration and
Environmental Protection Agency.
(g) maintain a maintenance log on the Equipment showing all routine and
non-routine maintenance and repairs. Said log shall list in summary form
maintenance, repairs or modifications performed on the Equipment, the date
any and all of such service and by whom the service was performed. This log
shall be made available to the Lessor at its request during normal working
hours or the Lessee.
INSPECTION: The REPORTS Section subsection (c) of the Lease is deleted and
replaced with the following:
(c) Lessor at its sole discretion, may from time to time, inspect the
Equipment at the Lessors sole expense. If any discrepancies are found as
they pertain to the general condition of the Equipment as required
hereunder, the Lessor will, communicate these discrepancies to the Lessee in
writing. The Lessee shall have thirty (30) days to rectify these
discrepancies at his sole expense. The Lessee should pay all expenses for a
re-inspection by a Lessor appointed expert if corrective measures are
required.
RETURN PROVISIONS: In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that Lessee has elected not
to exercise its option to purchase the Equipment, Lessee shall, at its
expense:
(A) At least one hundred eighty (180) days, but not more than two hundred
forty (240) days, prior to Lease termination, provide to Lessor written
notification of intent to return all, but not less than all, of the
equipment covered under this Lease schedule;
(B) At least thirty (30) days, but not more than sixty (60) days, prior to
Lease termination:
(i) Ensure all Equipment has been properly maintained in accordance with
the manufacturers' recommended maintenance procedures and is operating
within manufacturers' specifications;
(ii) Cause manufacturers' representatives or other qualified maintenance
providers, acceptable to Lessor, to perform a physical inspection and test
of all the components and capabilities of the Equipment and provide a full
inspection report to Lessor. The Equipment must be free of all large
scratches, marks, gouges, dents, discoloration or stains; all drawers,
runners, and locks will be in good working condition and include keys; all
seat cushions shall be free of cuts, tears, rips,
scratches, xxxxx, stains or discoloration; there shall be no evidence of
extreme use or overloading, i.e. bowed or sagging shelves or seats; there
shall be no missing screws, bolts, fasteners, etc. If during such
inspection the Equipment is found not to be in compliance with the above,
then Lessee shall remedy all items not in compliance and provide for a
follow-up inspection to verify the Equipment meets these return provisions;
(C) Upon Lease termination, Lessee shall have the manufacturers'
representatives, or other persons acceptable to Lessor, de-install all
Equipment, including all wire, cable, and mounting hardware and ensure:
(i) All kitchen related equipment is clean and free of dirt, grease,
rust, corrosion and must be in such condition so as to be immediately
capable of being installed and used in a similar working environment.
(ii) All fryers are drained of their cooking oil and properly cleaned;
(iii) The Equipment shall be packed properly and in accordance to the
manufacturers' recommendations;
(iv) All necessary permits and labor are obtained to perform the
required work;
(D) At Lessor's choice, either (1) allow Lessor, at Lessor's expense, and
provided Lessor has provided reasonable notice to Lessee, to arrange for an
on-site auction of the Equipment which will be conducted in a manner that
will not interfere with the Lessee's normal business operations, or (2)
Lessee shall provide free, safe storage and insurance for the Equipment for
a period not to exceed ninety (90) days from the Lease expiration at a
location satisfactory and accessible to Lessor;
(E) Lessee shall provide for the transportation of the Equipment in a
manner consistent with the manufacturers' recommendations and practices to
any location(s) within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such location(s). Lessee
shall be responsible for ensuring all necessary permits and labor are
obtained to deliver the Equipment to Lessor;
(F) Lessee shall obtain and pay for a policy of transit insurance for the
redelivery period in an amount equal to the replacement value of the
Equipment and Lessor shall be named as the loss payee on all such policies
of insurance.
7. LEASE TERM OPTIONS
Early Lease Term Options
The Lease is hereby amended by adding the following to the end thereof:
CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly provided that all
of the terms and conditions of this Provision are fulfilled, Lessee may cancel
the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of the Cancellation Date set forth below (the "Cancellation Date")
upon at least 90 days prior written notice (the "Notice Date") to Lessor (which
notice shall be irrevocable and shall be sent to the attention of Lessor's Asset
Management Organization, 0000 X. XXX Xxxxxx Xxxxx Xxxxxxx Xxxxxxx, XX 60196).
Such notice shall state the Cancellation Date which shall apply. If all of the
terms and conditions of this Provision are not fulfilled, this Lease shall
continue in full force and effect and Lessee shall continue to be liable for all
obligations thereunder, including, without limitation, the obligation to
continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value (set
forth below for the Cancellation Date) for the Equipment, plus (B) all rent and
all other sums due and unpaid as of the Cancellation Date (including, but not
limited to, any Rent payment due and payable on the Cancellation Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified by
an independent appraiser selected by Lessor (reasonably acceptable to Lessee) to
determine that the Equipment is in such compliance, which determination shall be
final, binding and conclusive. Lessee shall bear all costs associated with such
appraiser's determination and such costs, if any, to cause the Equipment to be
in full compliance with the RETURN OF EQUIPMENT Section of the Lease on or prior
to the Cancellation Date.
(c) The Cancellation Date and the applicable Cancellation Value are as set
forth below: January _____, 2008_______________ $ 202,939.96
(d) Lessee shall, from the applicable Notice Date through the Cancellation
Date,
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the Cancellation Date through the earlier of the
date the Equipment is sold by Lessor to a third party or 30 days following the
Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor and
Lessee shall have no interest in or any claim upon any of such proceeds.
The Lease is amended by adding the following thereto:
EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been earlier terminated and provided
further that Lessee is not in default under the Lease or any other agreement
between Lessor and Lessee, Lessee may, UPON AT LEAST 30 DAYS BUT NO MORE THAN
270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S IRREVOCABLE ELECTION TO
EXERCISE SUCH OPTION, purchase on an AS IS BASIS all (but not less than all) of
the Equipment listed and described in this Schedule on the rent payment date
(the "Early Purchase Date") which is 49 months from the Basic Term Commencement
Date for a price equal to twenty-seven percent (27%) of the Capitalized Lessor's
Cost (the "FMV Early Option Price"), plus all applicable sales taxes.
Lessor and Lessee agree that the FMV Early Option Price is a reasonable
prediction of the Fair Market Value (as such term is defined in the PURCHASE
OPTION Section subsection (b) of the Lease hereof) of
the Equipment at the time the option is exercisable. Lessor and Lessee agree
that if Lessee makes any non-severable improvement to the Equipment which
increases the value of the Equipment and is not required or permitted by the
MAINTENANCE Section or the RETURN OF EQUIPMENT Section of the Lease prior to
lease expiration, then at the time of such option being exercised, Lessor and
Lessee shall adjust the purchase price to reflect any addition to the price
anticipated to result from such improvement. (The purchase option granted by
this subsection shall be referred to herein as the "Early Purchase Option".)
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment leased hereunder, then on the Early Purchase Option Date, Lessee shall
pay to Lessor any Rent and other sums due and unpaid on the Early Purchase
Option Date and Lessee shall pay the FMV Early Option Price, plus all applicable
sales taxes, to Lessor in cash.
End of Basic Term Options
At the expiration of the Basic Term (the "Basic Term Expiration Date"), so
long as no default has occurred and is continuing hereunder and this
Agreement has not been earlier terminated, Lessee shall exercise one of the
following options:
(1) RENEWAL OPTION. (i) So long as no default exists hereunder and the
Lease has not been earlier terminated, Lessee may at expiration of the
Basic Term, upon at least 120 days but not more than 270 days prior
written notice to Lessor, extend the term of the Lease with respect to
all (but not less than all) of the Equipment in this Lease for a term to
be agreed upon by Lessee and Lessor (the "Renewal Period") for a
scheduled monthly rental equal to the monthly Fair Market Rental Value
thereof determined as of the end of the Renewal Term.
(ii) "Fair Market Rental Value" shall mean the price which a willing
lessee would pay for the rental of the Equipment in an arms-length
transaction to a willing lessor under no compulsion to lease for a time
period similar to the Renewal Period; provided, however, that in such
determination: (i) the Equipment shall be assumed to be in the condition
in which it is required to be maintained and returned under this Lease
(ii) in the case of any installed additions to the Equipment, same shall
be valued on an installed basis; and (iii) costs of removal of the
Equipment from the current location shall not be a deduction from such
valuation. If Lessor and Lessee are unable to agree on the Fair Market
Rental Value at least 135 days before Lease expiration, Lessor shall
appoint an independent appraiser (reasonably acceptable to Lessee) to
determine Fair Market Rental Value, and that determination shall be
final, binding and conclusive. Lessee shall bear all costs associated
with any such appraisal.
(iii) Lessee shall be deemed to have waived this option unless it
provides Lessor with written notice of its irrevocable election to
exercise the same within 15 days after Fair Market Rental Value is
determined (by agreement or appraisal).
(2) PURCHASE OPTION. Pursuant to the purchase option section of the
lease, upon at least one hundred eighty (180) but not more than two
hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date, Lessee may purchase all (but not less
than all) of the Equipment covered by this Schedule on an AS IS
BASIS for cash equal to the then Fair Market Value of the Equipment
(plus all applicable sales taxes).
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date (the "Notice Date"), Lessee may cancel the
Agreement (the "Cancellation Option") with respect to all (but not less than
all) of the Equipment on this Schedule. If all of the terms and conditions
of this Section are not fulfilled, this Lease shall continue in full force
and effect and Lessee shall continue to be liable for all obligations
thereunder, including, without limitation, the obligation to continue paying
rent. Lessee shall be deemed to have waived this option if it fails to
timely provide Lessor with the required written notice of its election to
exercise the same.
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent, three percent (3%) of the Capitalized
Lessor's Cost of the Equipment, plus all rent and all other sums due and
unpaid as of the Basic Term Expiration Date (including, but not limited to,
any rent payment due and payable on the Basic Term Expiration Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF EQUIPMENT
Section of the Lease, such compliance being independently verified by an
independent appraiser selected by Lessor (reasonably acceptable to Lessee)
to determine that the Equipment is in such compliance, which determination
shall be final, binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such costs, if any, to
cause the Equipment to be in full compliance with the RETURN OF EQUIPMENT
Section of the Lease on or prior to such Basic Term Expiration Date.
(b) From the applicable Notice Date through the Basic Term Expiration Date,
Lessee shall:
(i) continue to comply with all of the terms and conditions of the Lease,
including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to allow
Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to
potential purchasers or lessees from time to time, Lessee may still use the
Equipment until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiration Date through the earlier of
the date the Equipment is sold by Lessor to a third party or thirty (30)
days following the Basic Term Expiration Date, comply with the following
terms and conditions:
(i) continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) make the Equipment available to Lessor and/or allow Lessor to store the
Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor
and Lessee shall have no interest in nor any claim upon any of such
proceeds.
End of Secondary Term Options
So long as no default exists hereunder and the Lease has not been
earlier terminated, Lessee may at the expiration of the Renewal Period upon
at least one hundred eighty (180) days but not more than two hundred seventy
(270) days written notice to Lessor prior to the end of the Renewal Period,
purchase all (but not less than all) of the Equipment in this Schedule on an
AS IS, WHERE IS BASIS, without recourse to or warranty from Lessor, express
or implied ("AS IS BASIS") for cash equal to its then Fair Market Value
(plus all applicable sales taxes).
8. Exercise of early termination, early purchase option, cancellation option
and end of term options
Lessee hereby acknowledges and agrees that (i) Lessor is requiring that
each of Lessee, Xxxxx and Wollensky of Boston, LLC, a Delaware Limited Liability
Company, Houston S&W, L.P., a Texas Limited Partnership and Houston S&W, L.P., a
Texas Limited Partnership (collectively, the "S&W Lessees") be bound by the
terms of this Section G.7. as set forth in this Schedule and in each such
Schedule executed by
an S&W Lessee that is designated as a Series SBC Schedule (the "S&W Schedules")
and (ii) without the S&W Lessees agreeing to be bound by such Section G.7.
Lessor would not enter into this Schedule or such other S&W Schedules. Now,
therefore, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Lessee hereby agrees that Lessee shall exercise the same early Termination,
Early Purchase Option, Cancellation Option or End of Term Option (collectively,
the "Options") that is exercised by any of the other S&W Lessees under the S&W
Schedules and in the event one of the other S&W Lessees exercises any of the
Options under any of the other S&W Schedules Lessee shall automatically be
deemed to exercise the same Option with respect to this Schedule. Neither Lessee
nor the S&W Lessees may exercise a different Option under this Schedule or the
S&W Schedules.
H. Payment Authorization
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
Company Name Address Amount
---------------------------------------------------------------------------
The Xxxxx & Wollensky Restaurant Group, Inc. 0000 0xx Xxx. $576,043.03
Xxx Xxxx, XX 00000
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Pursuant to the provisions of the lease, as it relates to this Schedule, Lessee
hereby certifies and warrants that (i) all Equipment listed above has been
delivered and installed (if applicable) as of the date and stated above, and
copies of the Xxxx(s) of Lading or other documentation acceptable to Lessor
which show the date delivery are attached hereto; (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier, or the manufacturer; and (iii) Lessee accepts the Equipment
for all purposes of the Lease, the purchase documents and all attendant
documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the lease; (ii) the representation and warranties made by the
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
Lessee hereby authorizes Lessor to file a financing statement and amendments
thereto describing the Equipment described in this Schedule and adding any other
collateral described herein and containing any other information required by the
applicable Uniform Commercial Code. Further, Lessee is irrevocably grants to
Lessor the power to sign Lessee's name and generally to act on behalf of Lessee
to execute and file financing statements and other documents pertaining to any
or all of the Equipment.
Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the Agreement or Equipment until executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
AMERITECH CAPITAL CORPORATION, DBA Houston S&W, L.P.
SBC CAPITAL SERVICES
By:_____________________________ By: Xxxxx & Wollensky of Houston LLC
Name: __________________________ Title: General Partner
Title: _________________________ By:_________________________________
Name:_______________________________
Title:______________________________
EQUIPMENT SCHEDULE
SCHEDULE NO. SBC-3
DATED THIS ____________________
TO MASTER LEASE AGREEMENT
DATED AS OF ____________________
Lessor & Mailing Address: Lessee & Mailing Address:
--------------------------------------------------------------------------------
AMERITECH CREDIT CORPORATION, DBA DALLAS S & W, L.P.
SBC CAPITAL SERVICES 00000 X. XXXXXX XXXXXXX
0000 X. XXX XXXXXX XXXXX XXXXXX, XX 00000
XXXXXXX XXXXXXX, XX 00000
This Schedule is executed pursuant to, and incorporates by reference the terms
and conditions of, and capitalized terms not defined herein shall have the
meanings assigned to them in, the Master Lease Agreement identified above
("Agreement" said Agreement and this Schedule being collectively referred to as
"Lease"). This Schedule, incorporating by reference the Agreement, constitutes a
separate instrument of lease.
A. Equipment: Subject to the terms and conditions of the Lease, Lessor agrees to
Lease to Lessee the Equipment described below (the "Equipment").
Number Capitalized
of Units Lessor's Cost Manufacturer Serial Number Model and Type of Equipment
------------------------------------------------------------------------------------------------------
SEE ATTACHED ANNEX "A"
Equipment immediately listed above is located at: 00000 X. Xxxxxx Xxxxxxx, Xxxxxx, Xxxxxx Xxxxxx, XX 00000
B. Financial Terms
1. Advance Rent (if any): $ 5,026.27 5. Basic Term Commencement Date : December ____, 2004
2. Capitalized Lessor's Cost: $ 262,565.22 6. Lessee Federal Tax ID No.: 00-0000000
3. Basic Term (No. of Months): 60 Months. 7. Last Delivery Date: November 24, 2004
4. Basic Term Lease Rate Factor: .0194292 8. Daily Lease Rate Factor: .00063810
9. First Termination Date: Thirty-seven (37) months after the Basic Term
Commencement Date.
10. Interim Rent: For the period from and including the Lease Commencement
Date to but not including the Basic Term Commencement Date ("Interim
Period"), Lessee shall pay as rent ("Interim Rent") for each unit of
Equipment, the product of the Daily Lease Rate Factor times the
Capitalized Lessor's Cost of such unit times the number of days in the
Interim Period. Interim Rent shall be due on NA.
11. Basic Term Rent. Commencing on December ____, 2004 and on the same day of
each month thereafter (each, a "Rent Payment Date") during the Basic
Term, Lessee shall pay as rent ("Basic Term Rent") the product of the
Basic Term Lease Rate Factor times the Capitalized Lessor's Cost of all
Equipment on this Schedule.
12. Secondary Term Rent. Unless the Schedule has been earlier terminated as
provided therein, commencing on ____________________ (the "Renewal Term
Commencement Date") and on the same day of each month thereafter (each, a
"Rent Payment Date") for the renewal period (as hereinafter defined),
Lessee shall pay as rent the Fair Market Rental Value (as defined
hereafter).
C. Tax Benefits Depreciation Deductions:
1. Depreciation method is the 200 % declining balance method, switching to
straight line method for the 1st taxable year for which using the straight
line method with respect to the adjusted basis as of the beginning of such
year will yield a larger allowance., taking into account the 50% special
depreciation allowance and basis adjustment under Section 168(k)(1) of the
Code, whichever is applicable.
2. Recovery Period: Five (5) Years.
3. Basis: 100 % of the Capitalized Lessor's Cost.
D. Property Tax
APPLICABLE TO EQUIPMENT LOCATED IN TEXAS: Lessee agrees that it will not list
any of such Equipment for property tax purposes or report any property tax
assessed against such Equipment until otherwise directed in writing by Lessor.
Upon receipt of any property tax xxxx pertaining to such Equipment from the
appropriate taxing authority, Lessor will pay such tax and will invoice Lessee
for the expense. Upon receipt of such invoice, Lessee will promptly reimburse
Lessor for such expense.
Lessor may notify Lessee (and Lessee agrees to follow such notification)
regarding any changes in property tax reporting and payment
responsibilities.
E. Article 2A Notice
IN ACCORDANCE WITH THE REQUIREMENTS OF ARTICLE 2A OF THE UNIFORM
COMMERCIAL CODE AS ADOPTED IN THE APPLICABLE STATE, LESSOR HEREBY MAKES
THE FOLLOWING DISCLOSURES TO LESSEE PRIOR TO EXECUTION OF THE LEASE, (A)
THE PERSON(S) SUPPLYING THE EQUIPMENT IS X. Xxxxxxxxxxx and Sons, Inc.
(THE "SUPPLIER(S)"), (B) LESSEE IS ENTITLED TO THE PROMISES AND
WARRANTIES, INCLUDING THOSE OF ANY THIRD PARTY, PROVIDED TO THE LESSOR BY
SUPPLIER(S), WHICH IS SUPPLYING THE EQUIPMENT IN CONNECTION WITH OR AS
PART OF THE CONTRACT BY WHICH LESSOR ACQUIRED THE EQUIPMENT AND (C) WITH
RESPECT TO SUCH EQUIPMENT, LESSEE MAY COMMUNICATE WITH SUPPLIER(S) AND
RECEIVE AN ACCURATE AND COMPLETE STATEMENT OF SUCH PROMISES AND
WARRANTIES, INCLUDING ANY DISCLAIMERS AND LIMITATIONS OF THEM OR OF
REMEDIES. TO THE EXTENT PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE IN ARTICLE 2A AND
ANY RIGHTS NOW OR HEREAFTER CONFERRED BY STATUTE OR OTHERWISE WHICH MAY
LIMIT OR MODIFY ANY OF LESSOR'S RIGHTS OR REMEDIES UNDER THE DEFAULT AND
REMEDIES SECTION OF THE AGREEMENT.
F. Stipulated Loss and Termination Value Table*
TERM VAL/% OF STIP LOSS/% OF # OF BASE TERM VAL/% OF STIP LOSS/% OF
# OF BASE PMTS COST COST PMTS COST COST
1 0 109.6543384 31 0 70.9661823
2 0 108.5219495 32 0 69.5277598
3 0 107.3798381 33 0 68.0786785
4 0 106.2279754 34 0 66.6218753
5 0 105.0637976 35 0 65.1573162
6 0 103.8872756 36 0 63.6819964
7 0 102.69838 37 50.334314 62.1988524
8 0 101.4970811 38 48.6293337 60.7078496
9 0 100.2858839 39 46.9134891 59.2059826
10 0 99.06222402 40 45.1867455 57.6932166
11 0 97.82607137 41 43.4520387 56.1724874
12 0 96.57993036 42 41.7093335 54.6437597
13 0 95.32123614 43 39.9585945 53.1069983
14 0 94.04995825 44 38.1997861 51.5621674
15 0 92.76860058 45 36.4299018 50.0062607
16 0 91.47713235 46 34.6518764 48.4422129
17 0 90.17642893 47 32.8656739 46.869988
18 0 88.86645923 48 31.0682871 45.2865787
19 0 87.54719196 49 29.2626504 43.6949196
20 0 86.21859572 50 27.4487271 42.0949738
21 0 84.87973258 51 25.6235094 40.4837338
22 0 83.53147712 52 23.7869604 38.8611623
23 0 82.17379743 53 21.9534174 37.2415968
24 0 80.80575509 54 20.1188561 35.6210131
25 0 79.4282242 55 18.2748235 33.9909581
26 0 78.04117232 56 16.4212706 32.3513828
27 0 76.64366057 57 14.5581483 30.702238
28 0 75.2356562 58 12.6854072 29.0434745
29 0 73.82009711 59 10.8029977 27.3750426
30 0 72.39695022 60 8.91086976 25.6968922
*The Stipulated Loss Value or Termination Value for any unit of Equipment
shall be the Capitalized Lessor's Cost of such unit multiplied by the
appropriate percentage derived from the above table. In the event that the
Lease is for any reason extended, then the last percentage figure shown
above shall control throughout any such extended term.
G. Modifications and Additions for This Schedule Only
For purposes of this Schedule only, the Agreement is amended as follows:
1. The LEASING Section subsection (b) of the Lease is hereby deleted in
its entirety and the following substituted in its stead: b) The obligation
of Lessor to purchase the Equipment from Lessee and to lease the same to
Lessee shall be subject to receipt by Lessor, on or prior to the earlier
of the Lease Commencement Date or Last Delivery Date therefor, of each of
the following documents in form and substance satisfactory to Lessor: (i)
a Schedule for the Equipment (ii) evidence of insurance which complies
with the requirements of the INSURANCE Section of the Lease, and (iii)
such other documents as Lessor may reasonably request. Once the Schedule
is signed, the Lessee may not cancel the Lease.
2. The DELIVERY, USE AND OPERATION Section subsection (a) of the Lease
shall be deleted and the following substituted in its stead: The parties
acknowledge that this is a sale/leaseback transaction and the Equipment is
in Lessee's possession as of the Lease Commencement Date.
3. RENT ADJUSTMENT:
(a) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the
Internal Revenue Code of 1986, as amended, ("Code")), the maximum effective
corporate income tax rate (exclusive of any minimum tax rate) for calendar-year
taxpayers ("Effective Rate") is higher than thirty-five percent (35%) for any
year during the lease term, then Lessor shall have the right to increase such
rent payments by requiring payment of a single additional sum. The additional
sum shall be equal to the product of (i) the Effective Rate (expressed as a
decimal) for such year less .35 (or, in the event that any adjustment has been
made hereunder for any previous year, the Effective Rate (expressed as a
decimal) used in calculating the next previous adjustment) times (ii) the
adjusted Termination Value (defined below), divided by (iii) the difference
between the new Effective Rate (expressed as a decimal) and one (1). The
adjusted Termination Value shall be the Termination Value (calculated as of the
first rent due in the year for which the adjustment is being made) minus the Tax
Benefits that would be allowable under Section 168 of the Code (as of the first
day of the year for which such adjustment is being made and all future years of
the lease term). The Termination Values and Tax Benefits are defined on the
Schedule. Lessee shall pay to Lessor the full amount of the additional rent
payment on the later of (i) receipt of notice or (ii) the first day of the year
for which such adjustment is being made.
(b) If, solely as a result of Congressional enactment of any law (including,
without limitation, any modification of, or amendment or addition to, the Code,
the Effective Rate is lower than thirty-five percent (35%) for any year during
the lease term, then Lessor shall upon request reduce such rent payments by a
single sum. The reduction shall be equal to the product of (i) the Effective
Rate (expressed as a decimal) for such year less .35 (or, in the event that any
adjustment has been made hereunder for any previous year, the Effective Rate
(expressed as a decimal) used in calculating the next previous adjustment) times
(ii) the adjusted Termination Value (defined below), divided by (iii) the
difference between the new Effective Tax Rate (expressed as a decimal) and one
(1). The adjusted Termination Value shall be the Termination Value (calculated
as of the first rent due in the year for which the adjustment is being made)
minus the Tax Benefits that would be allowable under Section 168 of the Code (as
of the first day of the year for which such adjustment is being made and all
future years of the lease term). The Termination Values and Tax Benefits are
defined on the Schedule. Lessor shall pay to Lessee the full amount of the rent
reduction on the later of (i) receipt of notice or (ii) the first day of the
year for which such adjustment is being made.
(c) Lessee's obligations under this Section 3 shall survive any expiration or
termination of this Agreement.
4. XXXX OF SALE
Lessee, in consideration of the Lessor's payment of the amount set
forth in B 2. above, which includes any applicable sales taxes (which
payment Lessee acknowledges), hereby grants, sells, assigns, transfers and
delivers to Lessor the Equipment along with whatever claims and rights
Seller may have against the manufacturer and/or Supplier of the Equipment,
including but not limited to all warranties and representations. At
Lessors request Lessee will cause Supplier to deliver to Lessor a written
statement wherein the Supplier (i) consents to the assignment to Lessor of
whatever claims and rights Lessee may have against the Supplier, (ii)
agrees not to retain any security interest, lien or other encumbrance in
or upon the Equipment at any time, and to execute such documents as Lessor
may request to evidence the release of any such encumbrance, and (iii)
represents and warrants to Lessor (x) that Supplier has previously
conveyed full title to the Equipment to Lessee, (y) that the Equipment was
delivered to Lessee and installation completed, and (z) that the final
purchase price of the Equipment (or a specified portion of such purchase
price) has been paid by Lessee.
Lessor is purchasing the Equipment for leasing back to Lessee pursuant
to the Lease. Lessee represents and warrants to Lessor that (i) Lessor
will acquire by the terms of this Xxxx of Sale good title to the Equipment
free from all liens and encumbrances whatsoever; (ii) Lessee has the right
to sell the Equipment; and (iii) the Equipment has been delivered to
Lessee in good order and condition, and conforms to the specifications,
requirements and standards applicable thereto; and (iv) the equipment has
been accurately labeled, consistent with the requirements of 40 CFR part
82 Subpart E, with respect to products manufactured with a controlled
(ozone-depleting) substance.
Lessee agrees to save and hold harmless Lessor from and against any and
all federal, state, municipal and local license fees and taxes of any kind
or nature, including, without limiting the generality of the foregoing,
any and all excise, personal property, use and sales taxes, and from and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions and suits resulting therefrom and imposed upon, incurred
by or asserted against Lessor as a consequence of the sale of the
Equipment to Lessor.
5. ACCEPTANCE
Pursuant to the provisions of the Lease, as it relates to this
Schedule, Lessee hereby certifies and warrants that (i) all Equipment
listed above has been delivered and installed (if applicable); (ii) Lessee
has inspected the Equipment, and all such testing as it deems necessary
has been performed by Lessee, Supplier or the manufacturer; and (iii)
Lessee accepts the Equipment for all purposes of the Lease, the purchase
documents and all attendant documents.
Lessee does further certify that as of the date hereof (i) Lessee is
not in default under the Lease; (ii) the representations and warranties
made by Lessee pursuant to or under the Lease are true and correct on the
date hereof and (iii) Lessee has reviewed and approves of the purchase
documents for the Equipment, if any.
6. EQUIPMENT SPECIFIC PROVISIONS
MAINTENANCE PROVISIONS: In addition to the provisions provided for in
the MAINTENANCE Section of the Lease, Lessee shall, at its expense:
(a) maintain the Equipment in a manner and frequency suggested by the
manufacturer.
(b) maintain the Equipment in an operable state and shall not discontinue
operation of the Equipment throughout the Lease term.
(c) maintain the Equipment to industry standards.
(d) maintain the Equipment in a similar manner and fashion as if the
Equipment were owned by the Lessee.
(e) maintain the Equipment under a preventive maintenance program by
qualified professionals who possess a working knowledge of the mechanical
operation of the Equipment including electrical systems, motors, drives,
controls, accessories, lubricants and all other items necessary to make the
machine operate to its original manufacturer's specifications.
(f) have the Equipment meet all local, state, and federal laws, regulations
and codes that regulate the use and operation of such Equipment and will not
contribute to or be used in any way as to directly or indirectly violate any
local, state or federal law including Food and Drug Administration and
Environmental Protection Agency.
(g) maintain a maintenance log on the Equipment showing all routine and
non-routine maintenance and repairs. Said log shall list in summary form
maintenance, repairs or modifications performed on the Equipment, the date
any and all of such service and by whom the service was performed. This log
shall be made available to the Lessor at its request during normal working
hours or the Lessee.
INSPECTION: The REPORTS Section subsection (c) of the Lease is deleted and
replaced with the following:
(c) Lessor at its sole discretion, may from time to time, inspect the
Equipment at the Lessors sole expense. If any discrepancies are found as
they pertain to the general condition of the Equipment as required
hereunder, the Lessor will, communicate these discrepancies to the Lessee in
writing. The Lessee shall have thirty (30) days to rectify these
discrepancies at his sole expense. The Lessee should pay all expenses for a
re-inspection by a Lessor appointed expert if corrective measures are
required.
RETURN PROVISIONS : In addition to the provisions provided for in the RETURN
OF EQUIPMENT Section of the Lease, and provided that Lessee has elected not
to exercise its option to purchase the Equipment, Lessee shall, at its
expense:
(A) At least one hundred eighty (180) days, but not more than two hundred
forty (240) days, prior to Lease termination, provide to Lessor written
notification of intent to return all, but not less than all, of the
equipment covered under this Lease schedule;
(B) At least thirty (30) days, but not more than sixty (60) days, prior to
Lease termination: (i) Ensure all Equipment has been properly
maintained in accordance with the manufacturers' recommended
maintenance procedures and is operating within manufacturers'
specifications; (ii) Cause manufacturers' representatives or other
qualified maintenance providers, acceptable to Lessor, to perform a
physical inspection and test of all the components and capabilities of
the Equipment and provide a full inspection report to Lessor. The
Equipment must be free of all large scratches, marks, gouges, dents,
discoloration or stains; all drawers, runners, and locks will be in
good working condition and include keys; all seat cushions shall be
free of cuts, tears, rips,
scratches, xxxxx, stains or discoloration; there shall be no evidence
of extreme use or overloading, i.e. bowed or sagging shelves or seats;
there shall be no missing screws, bolts, fasteners, etc. If during
such inspection the Equipment is found not to be in compliance with
the above, then Lessee shall remedy all items not in compliance and
provide for a follow-up inspection to verify the Equipment meets these
return provisions;
(C) Upon Lease termination, Lessee shall have the manufacturers'
representatives, or other persons acceptable to Lessor, de-install all
Equipment, including all wire, cable, and mounting hardware and ensure:
(i) All kitchen related equipment is clean and free of dirt, grease,
rust, corrosion and must be in such condition so as to be immediately
capable of being installed and used in a similar working environment.
(ii) All fryers are drained of their cooking oil and properly cleaned;
(iii) The Equipment shall be packed properly and in accordance to the
manufacturers' recommendations;
(iv) All necessary permits and labor are obtained to perform the
required work;
(D) At Lessor's choice, either (1) allow Lessor, at Lessor's expense, and
provided Lessor has provided reasonable notice to Lessee, to arrange for an
on-site auction of the Equipment which will be conducted in a manner that
will not interfere with the Lessee's normal business operations, or (2)
Lessee shall provide free, safe storage and insurance for the Equipment for
a period not to exceed ninety (90) days from the Lease expiration at a
location satisfactory and accessible to Lessor;
(E) Lessee shall provide for the transportation of the Equipment in a
manner consistent with the manufacturers' recommendations and practices to
any location(s) within the continental United States as Lessor shall
direct; and shall have the Equipment unloaded at such location(s). Lessee
shall be responsible for ensuring all necessary permits and labor are
obtained to deliver the Equipment to Lessor;
(F) Lessee shall obtain and pay for a policy of transit insurance for the
redelivery period in an amount equal to the replacement value of the
Equipment and Lessor shall be named as the loss payee on all such policies
of insurance.
7. LEASE TERM OPTIONS
Early Lease Term Options
The Lease is hereby amended by adding the following to the end thereof:
CANCELLATION OPTION:
(a) So long as no default exists hereunder and expressly provided that all
of the terms and conditions of this Provision are fulfilled, Lessee may cancel
the Agreement as to all (but not less than all) of the Equipment on this
Schedule as of the Cancellation Date set forth below (the "Cancellation Date")
upon at least 90 days prior written notice (the "Notice Date") to Lessor (which
notice shall be irrevocable and shall be sent to the attention of Lessor's Asset
Management Organization, 0000 X. XXX Xxxxxx Xxxxx Xxxxxxx Xxxxxxx, XX 60196).
Such notice shall state the Cancellation Date which shall apply. If all of the
terms and conditions of this Provision are not fulfilled, this Lease shall
continue in full force and effect and Lessee shall continue to be liable for all
obligations thereunder, including, without limitation, the obligation to
continue paying rent.
(b) Prior to the Cancellation Date, Lessee shall
(i) pay to Lessor, as additional rent, (A) the Cancellation Value (set
forth below for the Cancellation Date) for the Equipment, plus (B) all rent and
all other sums due and unpaid as of the Cancellation Date (including, but not
limited to, any Rent payment due and payable on the Cancellation Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF
EQUIPMENT Section of the Lease, such compliance being independently verified by
an independent appraiser selected by Lessor (reasonably acceptable to Lessee) to
determine that the Equipment is in such compliance, which determination shall be
final, binding and conclusive. Lessee shall bear all costs associated with such
appraiser's determination and such costs, if any, to cause the Equipment to be
in full compliance with the RETURN OF EQUIPMENT Section of the Lease on or prior
to the Cancellation Date.
(c) The Cancellation Date and the applicable Cancellation Value are as set
forth below: January , 2008 $ 92,501.73
(d) Lessee shall, from the applicable Notice Date through the Cancellation
Date,
(i) continue to comply with all of the terms and conditions of the
Lease, including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to
allow Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to potential
purchasers or lessees from time to time, Lessee may still use the Equipment
until the Cancellation Date.
(e) Lessee shall, from the Cancellation Date through the earlier of the
date the Equipment is sold by Lessor to a third party or 30 days following the
Cancellation Date, comply with the following terms and conditions:
(i) Continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) Make the Equipment available to Lessor and/or allow Lessor to
store the Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(f) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor and
Lessee shall have no interest in or any claim upon any of such proceeds.
The Lease is amended by adding the following thereto:
EARLY PURCHASE OPTION:
(a) Provided that the Lease has not been earlier terminated and provided
further that Lessee is not in default under the Lease or any other agreement
between Lessor and Lessee, Lessee may, UPON AT LEAST 30 DAYS BUT NO MORE THAN
270 DAYS PRIOR WRITTEN NOTICE TO LESSOR OF LESSEE'S IRREVOCABLE ELECTION TO
EXERCISE SUCH OPTION, purchase on an AS IS BASIS all (but not less than all) of
the Equipment listed and described in this Schedule on the rent payment date
(the "Early Purchase Date") which is 49 months from the Basic Term Commencement
Date for a price equal to twenty-seven percent (27%) of the Capitalized Lessor's
Cost (the "FMV Early Option Price"), plus all applicable sales taxes.
Lessor and Lessee agree that the FMV Early Option Price is a reasonable
prediction of the Fair Market Value (as such term is defined in the PURCHASE
OPTION Section subsection (b) of the Lease hereof) of the Equipment at the time
the option is exercisable. Lessor and Lessee agree that if Lessee makes any
non-
severable improvement to the Equipment which increases the value of the
Equipment and is not required or permitted by the MAINTENANCE Section or the
RETURN OF EQUIPMENT Section of the Lease prior to lease expiration, then at the
time of such option being exercised, Lessor and Lessee shall adjust the purchase
price to reflect any addition to the price anticipated to result from such
improvement. (The purchase option granted by this subsection shall be referred
to herein as the "Early Purchase Option".)
(b) If Lessee exercises its Early Purchase Option with respect to the
Equipment leased hereunder, then on the Early Purchase Option Date, Lessee shall
pay to Lessor any Rent and other sums due and unpaid on the Early Purchase
Option Date and Lessee shall pay the FMV Early Option Price, plus all applicable
sales taxes, to Lessor in cash.
End of Basic Term Options
At the expiration of the Basic Term (the "Basic Term Expiration Date"),
so long as no default has occurred and is continuing hereunder and this
Agreement has not been earlier terminated, Lessee shall exercise one of the
following options:
(1) RENEWAL OPTION. (i) So long as no default exists hereunder and the
Lease has not been earlier terminated, Lessee may at expiration of the
Basic Term, upon at least 120 days but not more than 270 days prior
written notice to Lessor, extend the term of the Lease with respect to
all (but not less than all) of the Equipment in this Lease for a term to
be agreed upon by Lessee and Lessor (the "Renewal Period") for a
scheduled monthly rental equal to the monthly Fair Market Rental Value
thereof determined as of the end of the Renewal Term.
(ii) "Fair Market Rental Value" shall mean the price which a
willing lessee would pay for the rental of the Equipment in an
arms-length transaction to a willing lessor under no compulsion to lease
for a time period similar to the Renewal Period; provided, however, that
in such determination: (i) the Equipment shall be assumed to be in the
condition in which it is required to be maintained and returned under
this Lease (ii) in the case of any installed additions to the Equipment,
same shall be valued on an installed basis; and (iii) costs of removal of
the Equipment from the current location shall not be a deduction from
such valuation. If Lessor and Lessee are unable to agree on the Fair
Market Rental Value at least 135 days before Lease expiration, Lessor
shall appoint an independent appraiser (reasonably acceptable to Lessee)
to determine Fair Market Rental Value, and that determination shall be
final, binding and conclusive. Lessee shall bear all costs associated
with any such appraisal.
(iii) Lessee shall be deemed to have waived this option unless it
provides Lessor with written notice of its irrevocable election to
exercise the same within 15 days after Fair Market Rental Value is
determined (by agreement or appraisal).
(2) PURCHASE OPTION. Pursuant to the purchase option section of the
lease, upon at least one hundred eighty (180) but not more than two
hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date, Lessee may purchase all (but not less
than all) of the Equipment covered by this Schedule on an AS IS
BASIS for cash equal to the then Fair Market Value of the Equipment
(plus all applicable sales taxes).
(3) CANCELLATION OPTION. Upon at least one hundred eighty (180) but not more
than two hundred seventy (270) days written notice to Lessor prior to the
Basic Term Expiration Date (the "Notice Date"), Lessee may cancel the
Agreement (the "Cancellation Option") with respect to all (but not less than
all) of the Equipment on this Schedule. If all of the terms and conditions
of this Section are not fulfilled, this Lease shall continue in full force
and effect and Lessee shall continue to be liable for all obligations
thereunder, including, without limitation, the obligation to continue paying
rent. Lessee shall be deemed to have waived this option if it fails to
timely provide Lessor with the required written notice of its election to
exercise the same.
(a) Prior to the Basic Term Expiration Date, Lessee shall
(i) pay to Lessor, as additional rent, three percent (3%) of the Capitalized
Lessor's Cost of the Equipment, plus all rent and all other sums due and
unpaid as of the Basic Term Expiration Date (including, but not limited to,
any rent payment due and payable on the Basic Term Expiration Date and any
sales taxes and property taxes); and
(ii) return the Equipment in full compliance with the RETURN OF EQUIPMENT
Section of the Lease, such compliance being independently verified by an
independent appraiser selected by Lessor (reasonably acceptable to Lessee)
to determine that the Equipment is in such compliance, which determination
shall be final, binding and conclusive. Lessee shall bear all costs
associated with such appraiser's determination and such costs, if any, to
cause the Equipment to be in full compliance with the RETURN OF EQUIPMENT
Section of the Lease on or prior to such Basic Term Expiration Date.
(b) From the applicable Notice Date through the Basic Term Expiration Date,
Lessee shall:
(i) continue to comply with all of the terms and conditions of the Lease,
including, but not limited to, Lessee's obligation to pay rent, and
(ii) make the Equipment available to Lessor in such a manner as to allow
Lessor to market and demonstrate the Equipment to potential purchasers or
lessees from such premises at no cost to Lessor; provided, however, that,
subject to Lessor's right to market and demonstrate the Equipment to
potential purchasers or lessees from time to time, Lessee may still use the
Equipment until the Basic Term Expiration Date.
(c) Lessee shall, from the Basic Term Expiration Date through the earlier of
the date the Equipment is sold by Lessor to a third party or thirty (30)
days following the Basic Term Expiration Date, comply with the following
terms and conditions:
(i) continue to provide insurance for the Equipment, at Lessee's own
expense, in compliance with the terms found in the INSURANCE Section of the
Lease, and
(ii) make the Equipment available to Lessor and/or allow Lessor to store the
Equipment at Lessee's premises, in such a manner as to allow Lessor to
market and demonstrate the Equipment to potential purchasers or lessees from
such premises at no cost to Lessor.
(d) The proceeds of any sale or re-lease of the Equipment after Lessee has
exercised its Cancellation Option shall be for the sole benefit of Lessor
and Lessee shall have no interest in nor any claim upon any of such
proceeds.
End of Secondary Term Options
So long as no default exists hereunder and the Lease has not been earlier
terminated, Lessee may at the expiration of the Renewal Period upon at least
one hundred eighty (180) days but not more than two hundred seventy (270)
days written notice to Lessor prior to the end of the Renewal Period,
purchase all (but not less than all) of the Equipment in this Schedule on an
AS IS, WHERE IS BASIS, without recourse to or warranty from Lessor, express
or implied ("AS IS BASIS") for cash equal to its then Fair Market Value
(plus all applicable sales taxes).
8. Exercise of early termination, early purchase option, cancellation option
and end of term options
Lessee hereby acknowledges and agrees that (i) Lessor is requiring that
each of Lessee, Xxxxx and Wollensky of Boston, LLC, a Delaware Limited Liability
Company, Houston S&W, L.P., a Texas Limited Partnership and Houston S&W, L.P., a
Texas Limited Partnership (collectively, the "S&W Lessees") be bound by the
terms of this Section G.7. as set forth in this Schedule and in each such
Schedule executed by an S&W Lessee that is designated as a Series SBC Schedule
(the "S&W Schedules") and (ii) without the S&W Lessees agreeing to be bound by
such Section G.7. Lessor would not enter into this Schedule or such
other S&W Schedules. Now, therefore, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Lessee hereby agrees that Lessee shall exercise the same early
Termination, Early Purchase Option, Cancellation Option or End of Term Option
(collectively, the "Options") that is exercised by any of the other S&W Lessees
under the S&W Schedules and in the event one of the other S&W Lessees exercises
any of the Options under any of the other S&W Schedules Lessee shall
automatically be deemed to exercise the same Option with respect to this
Schedule. Neither Lessee nor the S&W Lessees may exercise a different Option
under this Schedule or the S&W Schedules.
H. Payment Authorization
You are hereby irrevocably authorized and directed to deliver and apply
the proceeds due under this Schedule as follows:
Company Name Address Amount
---------------------------------------------------------------------------
The Xxxxx & Wollensky Restaurant Group, Inc. 0000 0xx Xxx. $262,565.22
Xxx Xxxx, XX 00000
This authorization and direction is given pursuant to the same authority
authorizing the above-mentioned financing.
Pursuant to the provisions of the lease, as it relates to this Schedule, Lessee
hereby certifies and warrants that (i) all Equipment listed above has been
delivered and installed (if applicable) as of the date and stated above, and
copies of the Xxxx(s) of Lading or other documentation acceptable to Lessor
which show the date delivery are attached hereto; (ii) Lessee has inspected the
Equipment, and all such testing as it deems necessary has been performed by
Lessee, Supplier, or the manufacturer; and (iii) Lessee accepts the Equipment
for all purposes of the Lease, the purchase documents and all attendant
documents.
Lessee does further certify that as of the date hereof (i) Lessee is not in
default under the lease; (ii) the representation and warranties made by the
Lessee pursuant to or under the Lease are true and correct on the date hereof
and (iii) Lessee has reviewed and approves of the purchase documents for the
Equipment, if any.
Lessee hereby authorizes Lessor to file a financing statement and amendments
thereto describing the Equipment described in this Schedule and adding any other
collateral described herein and containing any other information required by the
applicable Uniform Commercial Code. Further, Lessee is irrevocably grants to
Lessor the power to sign Lessee's name and generally to act on behalf of Lessee
to execute and file financing statements and other documents pertaining to any
or all of the Equipment.
Except as expressly modified hereby, all terms and provisions of the Agreement
shall remain in full force and effect. This Schedule is not binding or effective
with respect to the Agreement or Equipment until executed on behalf of Lessor
and Lessee by authorized representatives of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be executed
by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
AMERITECH CAPITAL CORPORATION, DBA DALLAS S&W, L.P.
SBC CAPITAL SERVICES
By:__________________________________ By: S & W OF Dallas LLC
Name: _______________________________ Title: General Partner
Title: ________________________________ By:________________________
Name:______________________
Title:_____________________
