AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION
Exhibit 10.21
AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION
THIS AGREEMENT REGARDING LEASEHOLD MORTGAGES AND LANDLORD’S PURCHASE OPTION (this
“Agreement”) is entered into as of the
1st day of November, 2006, between and among
FIGRYANH LLC, FIGRYANH-1 LLC, FIGRYANH-2 LLC, FIGRYANH-3 LLC, FIGRYANH-4 LLC, FIGRYANH-5 LLC,
FIGRYANH-6 LLC, FIGRYANH-7 LLC, FIGRYANH-8 LLC, FIGRYANH-9 LLC, FIGRYANH-10 LLC, FIGRYANH-11 LLC,
FIGRYANH-12 LLC, FIGRYANH-13 LLC, FIGRYANH-14 LLC, FIGRYANH-15 LLC, FIGRYANH-16 LLC, each a
Delaware limited liability company (collectively, the “Hold Landlord”), and FIGRYANF LLC,
a Delaware limited liability company (“FIGRYANF”), each with an office at x/x Xxxxxxxxxx
Xxxxxxx Xxxxxxxxxxxxx Xxxx XX, 0000 Avenues of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000
(collectively, “Landlord”), and CREDIT SUISSE, CAYMAN ISLANDS BRANCH, having an office at
00 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (collectively with its successors, assigns and
designees, “Leasehold Mortgagee”) as Collateral Agent for the Secured Parties (as such
terms are defined below), and solely for the purpose of Section 14 hereof, German American Capital
Corporation, a Maryland corporation (“Fee Mortgagee”), with reference to the following:
A. Hold Landlord and FIGRYANF have each entered into a separate Master Land and Building Lease
dated of even date herewith (collectively, the “Leases” and each individually a
“Lease”) with one or more of the following entities: Fire Mountain Restaurants, LLC, a
Delaware limited liability company, Ryan’s Restaurant Group, Inc., a South Carolina corporation,
Hometown Buffet, Inc., a Minnesota corporation, and OCB Restaurant Company, LLC, a Minnesota
limited liability company (individually and collectively, “Tenant”) pursuant to which
Landlord has leased to Tenant certain Demised Properties on which Tenant intends to operate certain
restaurant facilities as more particularly described therein. Any capitalized term used in this
Agreement but not defined in this Agreement has the collective meaning given to such term in the
Leases (except where this Agreement specifically refers to such term as it relates to a specific
Lease).
B. Reference is made to (i) the Credit Agreement dated as of even date hereof (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”), among
Buffets, Inc. (“Borrower”), Buffets Holdings, Inc. (“Holdings”), the lenders from
time to time party thereto (“Lenders”), including, inter alia, Credit Suisse as
administrative agent (“Administrative Agent”) for the Lenders, collateral agent
(“Collateral Agent”) for the Secured Parties, swingline lender (the “Swingline
Lender”) and an issuing bank (“Issuing Bank”) with respect to any letters of credit
(“Letters of Credit”) issued pursuant to the terms of the Credit Agreement and (ii) the
Guarantee and Collateral Agreement dated as of even date
hereof (as amended, supplemented or
otherwise modified from time to time, the “Guarantee and Collateral Agreement”) among Holdings, Borrower, the subsidiaries of
Borrower identified therein and Credit Suisse. As used in this Agreement, “Secured
Parties” has the meaning set forth in the Leasehold Mortgages (as defined below).
C. Tenant is a wholly owned subsidiary of Borrower and will derive substantial benefit from
the making of the loans and the issuance of the Letters of Credit under the Credit Agreement. In
order to induce the making of such loans and the issuance of such Letters of Credit, Tenant has
agreed to guarantee, among other things, the due and punctual payment and performance of all of the
Obligations (as defined in the Guarantee and Collateral Agreement) of Borrower under the Credit
Agreement, the Guarantee and Collateral Agreement and the other agreements entered into in
connection therewith.
D. The obligations of Lenders to make the loans under the Credit Agreement) and of Issuing
Bank to issue the Letters of Credit are conditioned upon, among other things, the execution and
delivery by Tenant of those certain instruments titled Leasehold Mortgage, Assignment of Leases and
Rents, Security Agreement and Financing Statement, dated of even date herewith (collectively,
“Leasehold Mortgages”) pledging Tenant’s interest in the leasehold estates created by the
Leases (each a “Leasehold Estate” and collectively, “Leasehold Estates”).
E. The Credit Agreement also requires the granting by Tenant of liens on and security
interests in certain personal property (“Personal Property”) of Tenant and certain other
parties, including, without limitation, the Restaurant Equipment, but not including, without
limitation, any real property.
F. Hold Landlord is financing the acquisition of certain Demised Properties in part with a
loan from Fee Mortgagee, pursuant to that certain Loan and Security Agreement, dated of even date
herewith, by and between Fee Mortgagee and Hold Landlord (“Loan Agreement”), and certain
other “Loan Documents” (as defined in the Loan Agreement), which loan is secured in part by Hold
Landlord’s interest in and to such Demised Properties.
G. In order to facilitate the transactions being entered into concurrently herewith between
and among Landlord, Fee Mortgagee, Tenant and Leasehold Mortgagee, the parties and other
signatories hereto desire to confirm their agreements in connection therewith.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and in consideration of the agreements herein contained, Landlord and
Leasehold Mortgagee hereby agree as follows:
1. Landlord’s Conditional Waiver of Lien. Subject to Landlord’s option to purchase
the Restaurant Equipment as described in Section 4, below, and the terms of the
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Leases, Landlord
hereby waives, for so long as there remain any Obligations
outstanding to any of the Secured Parties, any lien, interest, claim, right or title in the
Personal Property, which Landlord now has or may hereafter acquire, either by statute, agreement or
otherwise and agrees that the Personal Property shall not become part of the Demised Properties as
long as such Personal Property do not become fixtures pursuant to applicable law (unless the same
is Restaurant Equipment); provided, however, that (a) at the time that the Obligations are no
longer outstanding; or (b) the liens against the Personal Property under the Credit Agreement are
released by the applicable parties thereunder, such waiver by Landlord shall no longer be of any
force or effect.
2. Landlord’s Consent to Leasehold Mortgages. Leasehold Mortgagee shall not record
any Leasehold Mortgages against any Demised Properties except as provided in this Section.
Landlord hereby consents to Tenant’s granting, and Leasehold Mortgagee’s recording, the Leasehold
Mortgages, provided that such Leasehold Mortgages encumbering Demised Properties under the Lease
with Hold Landlord are and shall be recorded subsequent to the recording of any Fee Mortgage given
by Hold Landlord to Fee Mortgagee (provided that Tenant may grant to Leasehold Mortgagee, and
Leasehold Mortgagee may record, Leasehold Mortgages at any time following the twenty fifth
(25th) day after the date of this Agreement (even if Fee Mortgages have not yet been
recorded against the applicable Demised Properties), so long as all the Leasehold Mortgages contain
language of subordination to the Fee Mortgages reasonably acceptable to Hold Landlord and Fee
Mortgagee). Leasehold Mortgagee hereby agrees that it shall only have the right to maintain
Leasehold Mortgages on all, but not less than all, of the Leasehold Estates covered by a Lease, and
to pursue foreclosure or deed in lieu thereof regarding all, but not less than all, of the
Leasehold Estates covered by a Lease; provided that Leasehold Mortgagee shall not be deemed in
breach of the foregoing if Leasehold Mortgagee is diligently pursuing foreclosure regarding all
Leasehold Estates covered by a Lease simultaneously, but is prevented from actually taking title to
all such Leasehold Estates simultaneously because of variations in applicable state laws and
foreclosure processes; provided further that Leasehold Mortgagee shall be obligated to pay all Rent
under the applicable Lease from and after it takes title to any Leasehold Estate applicable to any
Demised Property under that Lease (and to perform any and all other covenants under such Lease
regarding any Demised Property as to which Leasehold Mortgagee does take title to the Leasehold
Estate applicable thereto). Leasehold Mortgagee agrees that if Leasehold Mortgagee takes title to
any Leasehold Estate, Leasehold Mortgagee will do so subject to the terms and conditions of the
applicable Lease and this Agreement. If Leasehold Mortgagee breaches its covenants contained in
this Section, then in addition to any other remedies of Landlord at law or in equity regarding such
breach, Landlord shall not be required to fulfill any of its obligations under this Agreement, all
such obligations being null and void, but Leasehold Mortgagee shall remain obligated in all
respects hereunder.
3. Leasehold Mortgagee Protections; New Lease.
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(a) Without limiting Landlord’s right to terminate any Lease upon an Event of Default (subject
to subsection 3(c), below), Landlord shall not agree to any mutual termination, accept any
surrender of any Lease (except upon the expiration of the applicable Lease Term) or enter into any
material amendment or material modification of any Lease, in each case without the prior written
consent of Leasehold Mortgagee, which shall not be unreasonably withheld, conditioned or delayed.
(b) Leasehold Mortgagee shall have the right, but not the obligation, at any time prior to
termination of any Lease, to pay any and all of the Rent due under such Lease, to provide any
insurance, to pay any fees, expenses, taxes and/or other payments due from Tenant under such Lease,
to make any repairs and improvements, do any other act or thing required of Tenant under such
Lease, and to do any act or thing which may be necessary and proper to be done in the performance
and observance of the covenants, conditions and agreements contained in such Lease to prevent the
termination of such Lease, in each case subject to the express terms and conditions of such Lease.
All payments so made and all things so done and performed by Leasehold Mortgagee shall be as
effective to prevent a termination of such Lease as the same would have been if made, done and
performed by Tenant instead of by Leasehold Mortgagee. In addition, subject to the terms and
conditions of the Leases, Leasehold Mortgagee shall have the right, but not the obligation, to
extend or to renew any Lease on behalf of Tenant for any extension or renewal term provided in such
Lease, subject to the terms and conditions contained in such Lease.
(c) Should any Event of Default occur other than an Event of Default resulting from the
failure of Tenant (or Leasehold Mortgagee) to pay all Rent as and when due under a Lease (a
“Nonmonetary EOD”), Landlord will not terminate such Lease as a result of such Nonmonetary
EOD if (i) Tenant or Leasehold Mortgagee fully pays all Rent as and when due under such Lease, (ii)
such Nonmonetary EOD would not reasonably be expected to materially impair the value, use,
operation, marketability or financeability of any Demised Property (as reasonably determined by
Landlord) under such Lease; (iii) Leasehold Mortgagee shall have commenced to fully remedy the
condition giving rise to such Nonmonetary EOD and shall be diligently and continuously prosecuting
any such remedy to completion, all in Landlord’s reasonable discretion, and (iv) Leasehold
Mortgagee shall have commenced the process necessary to secure the approvals required for it to
exercise its remedies and cause all Leasehold Estates under such Lease to be sold, foreclosure or
other appropriate proceedings in the nature thereof or in lieu thereof, and shall be diligently and
continuously prosecuting any such proceedings to completion, all in Landlord’s reasonable
discretion (and shall have delivered notice and information regarding any of the foregoing to
Landlord as described in the last sentence of Section 8). Upon any such transfer of the Leasehold
Estates pursuant to the Leasehold Mortgages, the transferee shall be obligated to promptly commence
and diligently pursue to completion the cure of any remaining
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defaults under such Lease which are susceptible of cure by any party other than the original
Tenant within the applicable cure periods set forth in such Lease (with such cure periods being
deemed to commence as to such transferee upon the date of such transfer, without any additional
notice from Landlord (whether or not notice is otherwise required under the Lease for such cure
periods to commence)) and any failure to do so shall be an Event of Default by such transferee
under such Lease. Subject to subsection 3(d), below, if the transfer of the Leasehold Estates
under such Lease pursuant to the Leasehold Mortgages has not occurred within two hundred seventy
(270) days after the occurrence of the applicable Nonmonetary EOD, then Landlord may terminate such
Lease at any time thereafter, up to the date when such transfer of the Leasehold Estate actually
occurs.
(d) If, as the result of any process, injunction or stay issued by any court of competent
jurisdiction, or by reason of any action by any court having jurisdiction of, or any automatic stay
resulting from, any bankruptcy, debtor rehabilitation or insolvency proceedings involving Tenant,
Leasehold Mortgagee is prohibited or prevented from commencing or prosecuting foreclosure or other
appropriate proceedings in the nature thereof, the times specified in subsection 3(c) above, for
commencing or prosecuting such foreclosure or other proceedings shall be extended for the period of
such prohibition; provided that such extension is expressly conditioned upon Tenant or Leasehold
Mortgagee fully paying all Rent as and when due under the applicable Lease within such time
periods, notwithstanding any such process, injunction, stay, action or bankruptcy, insolvency or
debtor rehabilitation proceedings.
(e) Should Landlord terminate any Lease by reason of any Event of Default by Tenant under such
Lease, Landlord shall deliver a written notice to Leasehold Mortgagee regarding same (the
“Termination Notice”). Leasehold Mortgagee may elect, at its sole option, by delivering
written notice (the “New Lease Notice”) to Landlord within thirty (30) days after delivery
of the Termination Notice to Leasehold Mortgagee, to enter into a new lease (“New Lease”)
of all, but not less than all, the Demised Properties under such Lease to any Qualified Entity
designated by Leasehold Mortgagee and reasonably consented to by Landlord and its lenders (the
“New Tenant”), for the remainder of the term of such Lease with the same covenants,
conditions and agreements as are contained in such Lease. As used herein, “Qualified
Entity” means an entity (x) with a Chief Executive Officer and Chief Operating Officer (and
other officers reasonably determined by Landlord to be directly involved in the management and
operation of the restaurants at the Demised Properties covered by such Lease) who each has not less
than ten (10) years’ experience in the management and operation of restaurants similar to those
operated at the Demised Properties covered by such Lease, including without limitation not less
than five (5) years’ experience with buffet-style restaurants, and (y) with a tangible net worth of
not less than $50,000,000. If Leasehold Mortgagee fails to deliver the New Lease Notice within
such thirty (30) day period, Leasehold Mortgagee shall be deemed to have waived its option to
enter into such New Lease.
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Within ten (10) days after delivery of the New Lease Notice, Landlord shall prepare the New
Lease and deliver it to Leasehold Mortgagee, and within ten (10) days after delivery of the New
Lease to Leasehold Mortgagee, both Leasehold Mortgagee and Landlord shall execute and deliver same;
provided however that Landlord’s execution and delivery of such New Lease shall be made without
representation or warranty of any kind or nature whatsoever, either express or implied, including,
without limitation, any representation or warranty regarding title to the Demised Properties
covered by the New Lease or any portion thereof, the priority of such New Lease, or any continuing
rights of Tenant under or regarding such Lease. If Leasehold Mortgagee fails to execute and
deliver the New Lease within such ten (10) day period, Leasehold Mortgagee shall be deemed to have
waived its option to enter into the New Lease. Upon execution and delivery of such New Lease, New
Tenant, at its sole cost and expense, shall be responsible for taking such action as shall be
necessary to cancel and discharge such Lease and to remove Tenant and any other occupant from the
applicable Demised Properties. Landlord’s obligation to enter into such New Lease of such Demised
Properties with New Tenant shall be conditioned upon all of the following: (i) Leasehold Mortgagee
or such New Tenant shall have paid in full all Rent then due and owing under such Lease, and shall
have remedied and cured or commenced and be diligently completing the cure of all nonmonetary
defaults of Tenant susceptible of cure by any party other than by the original Tenant and (ii)
Leasehold Mortgagee or New Tenant shall pay all costs and expenses of Landlord, including, without
limitation, reasonable attorneys’ fees, real property transfer taxes and any escrow fees and
recording charges, incurred in connection with the preparation and execution of such New Lease and
any conveyances related thereto. Upon the execution of any such New Lease, New Tenant and/or
subtenants shall be obligated to continue to diligently pursue to completion the cure of any
remaining defaults under the Lease which are susceptible of cure by any party other than the
original Tenant.
4. Landlord’s Purchase Option Regarding Restaurant Equipment. Subject to the terms of
this Section, and Tenant’s rights under the Leases, following any Event of Default or expiration of
a Lease (including, without limitation, the nonrenewal of a Lease), Landlord shall have the option
to purchase any or all the Restaurant Equipment covered by such Lease for Fair Market Value (as
hereinafter defined). Notwithstanding the foregoing, Landlord shall not have the right to exercise
such option if Leasehold Mortgagee has (x) commenced and is diligently pursuing foreclosure under
all the Leasehold Mortgages applicable to such Lease and/or has taken title to the Leasehold
Estates subject to such Lease, whether through foreclosure, deed in lieu thereof or otherwise, or
(y) entered into a New Lease with Landlord regarding the applicable Demised Properties; provided
that regardless of whether the events in clause (x) of this sentence have commenced and are
occurring, Landlord shall have the right to exercise such option at any time after receiving an
Entry Notice as described in Section 5. Leasehold Mortgagee shall cause all Restaurant Equipment
to be unencumbered by any security interest or other interest of Leasehold Mortgagee or any other
Secured Parties at the time it is delivered to
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Landlord. Landlord may exercise such option by delivering written notice thereof to Leasehold
Mortgagee (the date such notice is delivered is referred to herein as the “Notice Date”).
After the Notice Date, Landlord and Leasehold Mortgagee shall attempt for a ten (10) day period
(the “Discussion Period”) to agree on the fair market value of such Restaurant Equipment
(the “Fair Market Value”). If Landlord and Leasehold Mortgagee do not agree, in writing,
as to the Fair Market Value within the Discussion Period, Fair Market Value shall be determined by
the following procedure:
(a) Submission of Fair Market Value. Within fifteen (15) days after the last date of
the Discussion Period (the last day of such fifteen (15) day period is referred to herein as the
“Calculation Date”), each of Landlord and Leasehold Mortgagee shall deliver to the other
party its calculation of the Fair Market Value of such Restaurant Equipment. If either party (a
“Failing Party”) fails to deliver its calculation to the other party on or before the
Calculation Date, but the other party delivers its calculation to the Failing Party on or before
the Calculation Date, such other party’s calculation shall be binding on both parties and shall be
the price paid by Landlord to Leasehold Mortgagee in exchange for such Restaurant Equipment, and
the arbitration shall be deemed concluded.
(b) Appointment and Qualifications of Appraisers. Provided the arbitration is not
deemed concluded pursuant to subsection 4(a), within thirty (30) days after the Calculation Date,
Landlord and Leasehold Mortgagee shall each appoint one licensed equipment appraiser who has been
active over the previous ten-year (10-year) period in the appraisal of restaurant equipment (each
such appraiser chosen pursuant to this subsection 4(b), an “Appraiser”). Each of Landlord
and Leasehold Mortgagee shall notify the other party, in writing, of its Appraiser (and the
business address thereof) within two (2) business days after the appointment thereof (collectively,
the “Appraiser Appointment Notices”). Each of Landlord and Leasehold Mortgagee agree that
any Appraiser may be (but is not required to be) an appraiser who assisted either party in
determining such party’s calculation of the Fair Market Value of such Restaurant Equipment pursuant
to subsection 4(a), above.
(c) Appointment of Third Appraiser. If each party appoints an Appraiser and notifies
the other party in accordance with subsection 4(b), above, then the two (2) Appraisers shall,
within ten (10) days after delivery of the later of the two Appraiser Appointment Notices, agree on
and appoint a third Appraiser (who shall be a licensed real estate appraiser with all other
qualifications for the initial two Appraisers chosen by the parties as set forth in subsection
4(b), above) and provide prompt written notice to Landlord and Leasehold Mortgagee of such third
Appraiser and the business address thereof. If the two (2) Appraisers fail to agree on and appoint
a third Appraiser within such ten (10) day period, then either party may elect to have the third
Appraiser selected by the American Arbitration Association or any successor thereto (“AAA”)
by delivering written notice thereof to the other party. In such event, the electing party shall
petition the AAA (with a copy to the other party) to so determine the third Appraiser and the
parties shall cooperate reasonably with
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each other and the AAA (including, without limitation, by responding promptly to any requests
for information made by the AAA) in connection with such determination. The decision of the AAA
shall be final and conclusive as to the identity of the third Appraiser. If any fees of the third
Appraiser or the AAA are required to be paid in advance (prior to the completion of the arbitration
procedure described in this Section) in order for such Appraiser, or the AAA, as the case may be,
to commence or continue its work in connection with the arbitration described in this Section, each
party shall promptly pay one-half of such fees as and when due, and if either Landlord or Leasehold
Mortgagee fails to pay its one-half share of any such fees as and when due (such party, the
“Delinquent Party”), and the other party does pay its one-half share of any such fees as
and when due, then if the Delinquent Party fails to pay its one-half share of all such fees within
ten (10) days after written notice from the other party, such other party’s calculation of the Fair
Market Value described in subsection 4(a) shall be binding on both parties and shall be the price
paid by Landlord to Leasehold Mortgagee in exchange for such Restaurant Equipment, and the
arbitration shall be deemed concluded.
(d) Appraisers’ Decision. Provided the arbitration is not previously deemed concluded
pursuant to subsection 4(c), within thirty (30) days after the appointment of the third Appraiser,
each of the three (3) Appraisers shall decide whether the Fair Market Value of such Restaurant
Equipment as proposed by Landlord or Leasehold Mortgagee pursuant to subsection 4(a), above, is
closer to the Fair Market Value of such Restaurant Equipment as determined by each such Appraiser.
The decision of the majority of the three (3) Appraisers shall be binding on Landlord and Leasehold
Mortgagee (subject to subsection 4(e), below). The determination of each Appraiser shall be
limited to the sole issue of, and each Appraiser shall have neither the right nor the power to
determine any issue other than, whether the Fair Market Value of such Restaurant Equipment as
proposed by Landlord or Leasehold Mortgagee pursuant to subsection 4(a), above, is closer to the
actual Fair Market Value of such Restaurant Equipment as determined by each such Appraiser. The
Fair Market Value as proposed by Landlord or Leasehold Mortgagee that is determined by the majority
of the Appraisers to be closer to the actual Fair Market Value of such Restaurant Equipment shall
be the price paid by Landlord to Leasehold Mortgagee in exchange for such Restaurant Equipment.
(e) If Only One Appraiser Is Appointed. Provided the arbitration is not previously
deemed concluded pursuant to subsection 4(a) or subsection 4(c), if either Landlord or Leasehold
Mortgagee fails to appoint an Appraiser within thirty (30) days after the Calculation Date or fails
to deliver an Appraiser Appointment Notice in accordance with subsection 4(b), above, and the other
party does appoint an Appraiser within such thirty (30) day period and delivers an Appraiser
Appointment Notice in accordance with subsection 4(b), above, then the Appraiser timely appointed
by such other party shall reach a decision regarding whether the Fair Market Value of such
Restaurant Equipment as proposed by Landlord or Leasehold Mortgagee pursuant to subsection 4(a),
above, is closer to the actual Fair
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Market Value of such Restaurant Equipment as determined by each such Appraiser, and notify
Landlord and Leasehold Mortgagee of that decision within thirty (30) days after such Appraiser’s
appointment. In such event, such Appraiser’s decision shall be binding on Landlord and Leasehold
Mortgagee, and the Fair Market Value as proposed by Landlord or Leasehold Mortgagee that is
determined by such Appraiser to be closer to the actual Fair Market Value of such Restaurant
Equipment shall be the price paid by Landlord to Leasehold Mortgagee in exchange for such
Restaurant Equipment.
(f) Cost of Arbitration. If the Appraisers (or Appraiser, pursuant to subsection 4(e),
above) determine that Leasehold Mortgagee’s proposed Fair Market Value of such Restaurant Equipment
is closer to the actual Fair Market Value of such Restaurant Equipment, then Landlord shall be
deemed the “Losing Party” and Leasehold Mortgagee shall be deemed the “Prevailing Party.” If the
Appraisers (or Appraiser, pursuant to subsection 4(e), above) determine that Landlord’s proposed
Fair Market Value of such Restaurant Equipment is closer to the actual Fair Market Value of such
Restaurant Equipment, then Leasehold Mortgagee shall be deemed the “Losing Party” and Landlord
shall be deemed the “Prevailing Party.” In addition, in the event the arbitration is deemed
concluded due to a Failing Party not timely delivering its calculation of Fair Market Value as
described in subsection 4(a), or a Delinquent Party failing to pay its share of fees after written
notice as described in subsection 4(c), such Failing Party or Delinquent Party (as the case may be)
shall be deemed the “Losing Party” and the party that is not the Failing Party or Delinquent Party
shall be deemed the “Prevailing Party.” Each party shall initially pay the fees and expenses of
its legal counsel, appointed appraiser, appraisals, one-half of the fees of the third appraiser,
and one-half the fees of the AAA (if applicable), provided, however, that the Losing Party shall be
obligated to reimburse the Prevailing Party for all costs of the arbitration paid by the Prevailing
Party promptly upon the completion of the arbitration procedure described in this Section
(including without limitation fees and expenses of the Prevailing Party’s legal counsel, appointed
appraiser, appraisals, and its one-half share of the fees of the third appraiser, and the AAA (if
applicable)).
5. Entry Notice from Leasehold Mortgagee to Landlord. Subject to this Section,
without limiting Leasehold Mortgagee’s rights (x) to commence and diligently pursue foreclosure
under all the Leasehold Mortgages regarding any Lease and/or to take title to all the Leasehold
Estates subject to such Lease, whether through foreclosure, deed in lieu thereof, or otherwise, and
(y) enter into a New Lease with Landlord regarding the Demised Properties covered by a Lease as
provided herein, Leasehold Mortgagee hereby agrees that Leasehold Mortgagee shall not enter upon
any Demised Properties to remove any Personal Property therefrom unless: (a) Leasehold Mortgagee
delivers to Landlord a notice stating Leasehold Mortgagee’s intention to remove any Personal
Property and representing that Leasehold Mortgagee has the right to do so pursuant to a default
(after any applicable notice and cure periods) under the Credit Agreement and/or Guarantee
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and Collateral Agreement (such notice, the “Entry Notice”); (b) Leasehold Mortgagee’s
rights to enter upon the applicable Demised Properties as described above shall commence fifteen
(15) days after delivery to Landlord of the Entry Notice (the last day of such fifteen (15) day
period, the “Entry Commencement Date”) and shall expire forty-five (45) days after the
Entry Commencement Date (such forty-five (45) day period, the “Entry Period”); (c) any
entry by Leasehold Mortgagee upon any Demised Properties shall be in strict compliance with the
terms of the Credit Agreement, the Guarantee and Collateral Agreement, the Leasehold Mortgages, and
such Lease, as applicable; (d) Leasehold Mortgagee shall repair promptly, or cause to be repaired
promptly, any damage to the Demised Properties caused by any such removal of the Personal Property
(or any inspection thereof undertaken by Leasehold Mortgagee) and shall leave the applicable
Demised Properties in broom clean condition; (e) any Personal Property remaining at the Demised
Properties after the expiration of the Entry Period shall be deemed abandoned by Leasehold
Mortgagee (and all Secured Parties) and shall become the sole property of Landlord, free and clear
of any security interest or other interest of Leasehold Mortgagee or any Secured Party; and (f)
Leasehold Mortgagee shall pay to Landlord prior to any entry upon the Demised Properties all Rent
under the applicable Lease during the Entry Period (or, if such Lease has been terminated, all Rent
that would have been applicable under such Lease during such period if such Lease were still in
effect), including all Base Rent under such Lease and an amount of Additional Rent under such Lease
reasonably determined by Landlord to be applicable to the Entry Period. If Leasehold Mortgagee
timely delivers the Entry Notice and prior to the expiration of the Entry Period Tenant files, or
any creditor or other person shall file against Tenant, any petition in bankruptcy under the
Bankruptcy Code of the United States of America and a result of any such filing an order of stay is
issued with respect to Tenant, the Credit Agreement, the Guarantee and Collateral Agreement and/or
such Lease by the applicable bankruptcy court (a “Stay”), then provided that (i) Leasehold
Mortgagee diligently takes all reasonable steps to have the Stay lifted by the applicable court as
promptly as practicable, (ii) Leasehold Mortgagee has during any portion of the Entry Period
occurring prior to the Stay taken all reasonable and diligent action to remove the Personal
Property from the applicable Demised Properties; and (iii) Leasehold Mortgagee pays all Rent that
would have been applicable under such Lease during such period if such Lease were still in effect),
including all Base Rent under such Lease and an amount of Additional Rent under such Lease
reasonably determined by Landlord to be applicable to such period, then the Entry Period shall be
deemed tolled for the period the Stay is in effect (such that Leasehold Mortgagee shall have a
total of thirty (30) days to remove the Personal Property from the applicable Demised Properties
following delivery of the Entry Notice described above, not including any days where the Stay is in
effect). Notwithstanding the foregoing, Leasehold Mortgagee acknowledges that it shall have no
right to enter upon, or remain upon, any of the Demised Properties to remove any Personal Property
from and after (1) the Notice Date whereupon Landlord exercises its option to purchase certain
Restaurant Equipment under the applicable Lease as described in Section 4 (whether the Notice
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Date occurs before or during any Entry Period; provided that if Landlord exercises such option
during the Entry Period, Landlord shall refund to Leasehold Mortgagee an equitable portion of the
amounts prepaid by Leasehold Mortgagee to Landlord pursuant to subsections 5(f) and 5(iii), above);
or (2) from and after the delivery by Leasehold Mortgagee to Landlord of any Waiver Notice as
described in Section 7.
6. Notice from Landlord to Leasehold Mortgagee.
(a) Landlord shall have the right (but not the obligation), upon any Event of Default under a
Lease where (i) such Lease has been terminated, (ii) Leasehold Mortgagee has not elected to enter
into a New Lease as described in subsection 3(e), and (iii) Landlord has not exercised its option
to purchase the applicable Restaurant Equipment as described in Section 4, to deliver to Leasehold
Mortgagee a written notice requesting that Leasehold Mortgagee remove, or cause the removal of, all
Personal Property at the Demised Properties previously covered by such Lease (the “Request
Notice”).
(b) If within fifteen (15) days after delivery of the Request Notice (the “Removal Notice
Period”) Leasehold Mortgagee delivers a written notice to Landlord stating Leasehold
Mortgagee’s intention to remove, or cause the removal of, Personal Property from the applicable
Demised Properties (such notice, a “Removal Notice”), then Leasehold Mortgagee shall have
the right to enter upon such Demised Properties until the thirtieth (30th) day following
delivery of such notice to Landlord (such thirty (30) day period, the “Request Entry
Period”) to remove all Personal Property at such Demised Properties, provided that (i) any
entry by Leasehold Mortgagee upon any Demised Properties shall be in strict compliance with the
terms of the Credit Agreement, the Guarantee and Collateral Agreement, any Leasehold Mortgages, and
such Lease, as applicable; (ii) Leasehold Mortgagee shall repair promptly, or cause to be repaired
promptly, any damage to the Demised Properties caused by any such removal of the Personal Property
(or any inspection thereof undertaken by Leasehold Mortgagee) and shall leave the applicable
Demised Properties in broom clean condition; (iii) any Personal Property remaining at the Demised
Properties after the expiration of the Request Entry Period shall be deemed abandoned by Leasehold
Mortgagee (and all Secured Parties) and shall become the sole property of Landlord, free and clear
of any security interest or other interest of Leasehold Mortgagee or any Secured Party; and (iv)
Leasehold Mortgagee shall pay to Landlord prior to any entry upon such Demised Properties all Rent
that would have been applicable under the applicable Lease during such period if such Lease were
still in effect, including all Base Rent under such Lease and an amount of Additional Rent under
such Lease reasonably determined by Landlord to be applicable to the Request Entry Period. If
Leasehold Mortgagee timely delivers the Request Entry Notice and prior to the expiration of the
Request Entry Period Tenant files, or any creditor or other person shall file against Tenant, any
petition in bankruptcy under the Bankruptcy Code of the United States of America and a result of
any such filing a Stay is issued, then provided that (x) Leasehold Mortgagee diligently takes all
reasonable steps to have the Stay lifted by the applicable court as
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promptly as practicable, (y) Leasehold Mortgagee has during any portion of the Request Entry
Period occurring prior to the Stay taken all reasonable and diligent action to remove the Personal
Property from the applicable Demised Properties, and (z) Leasehold Mortgagee pays all Rent that
would have been applicable under such Lease during such period if such Lease were still in effect,
including all Base Rent under such Lease and an amount of Additional Rent under such Lease that
Landlord reasonably determines would have been applicable to such period if such Lease were still
in effect, then the Request Entry Period shall be deemed tolled for the period the Stay is in
effect (such that Leasehold Mortgagee shall have a total of thirty (30) days to remove the Personal
Property from the Demised Properties following delivery of the Request Entry Notice described
above, not including any days where the Stay is in effect). If Leasehold Mortgagee fails to
deliver any Removal Notice within the Removal Notice Period, then unless Leasehold Mortgagee has
elected to enter into a New Lease (whereupon Leasehold Mortgagee shall have no obligation to remove
any Personal Property from any Demised Properties pursuant to this Agreement), any Personal
Property remaining at such Demised Properties at the expiration of the Removal Notice Period shall
be deemed abandoned by Leasehold Mortgagee (and all Secured Parties) and shall, as between
Leasehold Mortgagee and Landlord, become the sole property of Landlord, free and clear of any
security interest or other interest of Leasehold Mortgagee and any Secured Party.
(c) Without limiting any other provision of this Agreement, Leasehold Mortgagee acknowledges
and agrees that all covenants of Leasehold Mortgagee set forth in this Section shall not be limited
due to the fact that a default or event of default may not exist under the Credit Agreement or
Guarantee and Collateral Agreement at the time a Request Notice is delivered to Leasehold
Mortgagee, or thereafter.
7. Waiver Notice; Partial Removal of Personal Property. If Leasehold Mortgagee at any
time delivers a notice to Landlord waiving the rights of Leasehold Mortgagee to remove the Personal
Property from the Demised Properties under any Lease (a “Waiver Notice”), then any Personal
Property remaining at such Demised Properties from and after the delivery of the Waiver Notice
shall be deemed abandoned by Leasehold Mortgagee (and all Secured Parties) and shall become the
sole property of Landlord, as between Leasehold Mortgagee and Landlord, free and clear of any
security interest or other interest of Leasehold Mortgagee and any Secured Party. Any Waiver
Notice shall be irrevocable. Notwithstanding the foregoing, if Leasehold Mortgagee at any time
enters upon any Demised Property under a Lease for the purpose of removing any Personal Property
(as described in Sections 5 and 6), Leasehold Mortgagee must remove all Personal Property from all
such Demised Properties (unless Landlord agrees, in writing, in its sole discretion, that some of
the Personal Property may remain at such Demised Properties), and any failure to do so by Leasehold
Mortgagee shall be a breach by Leasehold Mortgagee under this Agreement and the removal of any such
remaining Personal Property by Landlord thereafter shall be at Leasehold Mortgagee’s sole cost and
expense.
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8. Indemnity to Landlord Parties; Reasonable Cooperation Regarding Title; Delivery of
Information Regarding Remedies. Leasehold Mortgagee hereby agrees to release, indemnify,
protect, defend and hold harmless all Landlord Parties from and against any and all claims,
demands, damages, obligations, losses, liabilities, costs and expenses (including attorneys’,
accountants’, consultants’, and expert witness fees and expenses) (collectively,
“Liabilities”) directly or indirectly related to or arising out of or in connection with
any activities of Leasehold Mortgagee or its agents at or about the Demised Properties or in
connection with the exercise of Leasehold Mortgagee’s rights under the Credit Agreement or the
Guarantee and Collateral Agreement; provided, however, that the foregoing indemnity will not apply,
with respect to a Landlord Party, to any Liabilities to the extent they are found in a final,
non-appealable judgment of a court of competent jurisdiction to have resulted from the willful
misconduct or gross negligence of such Landlord Party. Each Landlord Party hereby agrees to
release, indemnify, protect, defend and hold harmless the Leasehold Mortgagee from and against any
and all Liabilities directly related to or arising out of or in connection with any activities of
such Landlord Party or its agents at or about any Demised Property provided such activities have
occurred prior to the earlier of (a) the date any New Lease covering such Demised Property is
entered into as described above, and (b) the date Leasehold Mortgagee takes title to the Leasehold
Estate regarding such Demised Property, through foreclosure or otherwise; provided, however, that
the foregoing indemnity will not apply to any Liabilities (y) to the extent they are found in a
final, non-appealable judgment of a court of competent jurisdiction to have resulted from the
willful misconduct or gross negligence of the Leasehold Mortgagee; or (z) directly or indirectly
related to or arising out of or in connection with any activities or omissions of Tenant or any
Default or Event of Default by Tenant under any Lease. At any time any Personal Property
(including without limitation any Restaurant Equipment) becomes the property of Landlord pursuant
to the terms of this Agreement, Leasehold Mortgagee agrees to cooperate reasonably with Landlord in
connection with evidencing Leasehold Mortgagee’s release of its interest in said Personal Property,
including without limitation by executing any reasonable instruments requested by Landlord
evidencing same. Without limiting Landlord’s rights under Section 4, at any time any Personal
Property (including without limitation any Restaurant Equipment) becomes the property of Leasehold
Mortgagee pursuant to the terms of the Credit Agreement, the Guarantee and Collateral Agreement,
and this Agreement, Landlord agrees to cooperate reasonably with Leasehold Mortgagee in connection
with evidencing Landlord’s release of its interest in said Personal Property, including without
limitation by executing any reasonable instruments requested by Leasehold Mortgagee. If at any
time Leasehold Mortgagee commences the process necessary to secure the approvals required for it to
exercise its remedies and cause Leasehold Estates under any Lease to be sold, foreclosure or other
proceedings in the nature thereof or in lieu thereof, then Leasehold Mortgagee shall deliver (y)
written notice thereof to Landlord within ten (10) days after any such commencement, and (z) such
reasonable information regarding any such process, foreclosure or other proceedings as Landlord may
request in writing from
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time to time, in each case within ten (10) days after any such written request from Landlord.
9. Notices. Whenever it is provided herein that notice, demand, request or other
communication shall or may be given to either of the parties by the other, it shall be in writing
and, any law or statute to the contrary notwithstanding, shall not be effective for any purpose
unless same shall be given or served as follows:
(a) If given or served by Landlord, (i) by hand delivery to Leasehold Mortgagee, (ii) by
mailing same to Leasehold Mortgagee by registered or certified mail, postage prepaid, return
receipt requested, or (iii) by delivery by overnight courier such as Federal Express, all delivered
and addressed to Leasehold Mortgagee at the following address:
Credit Suisse
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Agency Group
Facsimile: (000) 000-0000
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Agency Group
Facsimile: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XxXxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: XxXxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(b) If given or served by Leasehold Mortgagee, (i) by hand delivery to Landlord, (ii) by
mailing same to Landlord by registered or certified mail, postage prepaid, return receipt
requested, or (iii) by delivery by overnight courier such as Federal Express, all delivered and
addressed to Landlord at the following address:
FIGRYANH LLC
c/o Drawbridge Special Opportunities Fund LP
1345 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx, CCO
and Xxxxx X. Xxxxxxx, CFO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
c/o Drawbridge Special Opportunities Fund LP
1345 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx, CCO
and Xxxxx X. Xxxxxxx, CFO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
Fortress Investment Group
0000 X. X’Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
0000 X. X’Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Sidley Austin LLP
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
(c) All notices, demands, requests or other communications hereunder shall be deemed to have
been given or served: (i) if hand delivered, on the date received (or the date delivery is refused)
by the recipient party; (ii) if delivered by registered or certified mail, three (3) days after the
date of posting as marked on the U.S. postage receipt; and (iii) if by Federal Express or similar
overnight courier service, on the date of receipt (or the date delivery is refused) by the
recipient party.
(d) Either Landlord or Leasehold Mortgagee may from time to time change its address for
receiving notices under this Agreement by providing written notice to the other party in accordance
with this Section.
10. Individual Landlords. Landlord hereby agrees that so long as no Event of Default
is existing under a Lease, Landlord shall use commercially reasonable efforts to cause any assignee
of any Landlord’s interest under such Lease (including, without limitation, any landlord under any
Individual Lease Agreement under such Lease), concurrently with such assignment, to assume
Landlord’s obligations under this Agreement regarding any Demised Properties covered by such
assignment.
11. Miscellaneous. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to principles of conflicts of laws.
This Agreement may be executed in any number of separate counterparts and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of a
counterpart hereof by facsimile or other electronic transmission shall be effective as delivery of
a manually executed counterpart. Time is of the essence of every provision of this Agreement,
including without limitation Sections 2, 3, 4, 5 and 6.
12. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the heirs, successors and assigns of the parties hereto.
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13. No Recordation. The parties hereto agree that neither this Agreement, nor any
memorandum or short form hereof, may be recorded against any Demised Property without the prior
written consent of Landlord, which consent Landlord may withhold in its sole and absolute
discretion.
14. Intercreditor Agreements. Leasehold Mortgagee and Fee Mortgagee hereby agree that
(a) if Leasehold Mortgagee becomes the owner of the Leasehold Estates regarding the Lease with Hold
Landlord (whether pursuant to the exercise of remedies under the Credit Agreement or otherwise),
then without limiting any provisions of those certain instruments titled Subordination Agreement,
Acknowledgement of Lease, Assignment, Estoppel, Attornment and Non-Disturbance Agreement, dated as
of the date hereof, by and among Hold Landlord, Fee Mortgagee and Tenant (collectively with any
amendment or other modification thereof, the “SNDAs”), (i) Leasehold Mortgagee shall be
deemed a successor to Tenant’s interest under the SNDAs, (ii) Leasehold Mortgagee shall thereafter
be bound under the SNDAs (as successor to Tenant) subject to the terms thereof, and (iii) Fee
Mortgagee shall continue to be bound under the SNDAs subject to the terms thereof; and (b) if Fee
Mortgagee becomes the owner of any of the Demised Properties, whether pursuant to the exercise of
remedies under the Loan Agreement, the other “Loan Documents” (as defined in the Loan Agreement),
or otherwise, then without limiting any provisions of this Agreement, (i) Fee Mortgagee shall be
deemed a successor to Hold Landlord’s interest under this Agreement with respect to such Demised
Properties, (ii) Fee Mortgagee shall thereafter be bound under this Agreement (as successor to
Landlord) subject to the terms hereof, and (iii) Leasehold Mortgagee shall continue to be bound
under this Agreement subject to the terms thereof.
[Signatures Next Page]
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IN WITNESS WHEREOF, Landlord, Leasehold Mortgagee and Fee Mortgagee have executed this
Agreement as an instrument under seal as of the day and year first set forth above.
| LANDLORD: FIGRYANH LLC, a Delaware limited liability company, individually and on behalf of FIGRYANH-1 LLC, FIGRYANH-2 LLC, FIGRYANH-3 LLC, FIGRYANH-4 LLC, FIGRYANH-5 LLC, FIGRYANH-6 LLC, FIGRYANH-7 LLC, FIGRYANH-8 LLC, FIGRYANH-9 LLC, FIGRYANH-10 LLC, FIGRYANH-11 LLC, FIGRYANH-12 LLC, FIGRYANH-13 LLC, FIGRYANH-14 LLC, FIGRYANH-15 LLC, and FIGRYANH-16 LLC, each a Delaware limited liability company, as its sole member |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxxx | |||
| Xxxxxxxxxxx X. Xxxxxxxx, Vice President | ||||
| FIGRYANF LLC, a Delaware limited liability company |
||||
| By: | /s/ Xxxxxxxxxxx X. Xxxxxxxx | |||
| Xxxxxxxxxxx X. Xxxxxxxx, Vice President | ||||
Signatures Page - 1
| LEASEHOLD MORTGAGEE: CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as Collateral Agent for the Secured Parties |
||||
| By: | /s/ Xxxxxx Xxxx | |||
| Name: | Xxxxxx Xxxx | |||
| Title: | Managing Director | |||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Associate | |||
[Signatures Continue Next Page]
Signatures Page - 2
WITHOUT
LIMITING SECTION 12 OF THIS AGREEMENT, THE UNDERSIGNED HEREBY
AGREES THAT IT AND ITS ASSIGNEES AND DESIGNEES SHALL BE BOUND BY THE
TERMS OF THIS AGREEMENT UPON TAKING TITLE TO ANY OF THE DEMISED
PROPERTIES, INCLUDING WITHOUT LIMITATION AS A RESULT OF THE EXERCISE OF
APPLICABLE REMEDIES UNDER THE LOAN AGREEMENT AND ANY OTHER “LOAN
DOCUMENTS” (AS DEFINED IN THE LOAN AGREEMENT).
| FEE MORTGAGEE: GERMAN AMERICAN CAPITAL CORPORATION, a Maryland corporation |
||||
| By: | /s/ Xxxx X. Xxxxxxx | |||
| Name: | Xxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||
| Title: | Vice President | |||
[Signatures Continue Next Page]
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| ACKNOWLEDGED AND AGREED: TENANT: FIRE MOUNTAIN RESTAURANTS, LLC, a Delaware limited liability company |
||||
| By: | Ryan’s Restaurant Group, Inc., a South Carolina corporation its sole member |
|||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | VP & Asst. Secretary | |||
| RYAN’S RESTAURANT GROUP, INC., a South Carolina corporation |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | VP & Asst. Secretary | |||
| HOMETOWN BUFFET, INC., a Minnesota corporation |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | VP & Asst. Secretary | |||
| OCB RESTAURANT COMPANY, LLC, a Minnesota limited liability company |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | VP & Asst. Secretary | |||
Signatures Page - 4
