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EXHIBIT 10.9
LEASE PURCHASE
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LESSEE: MCDERMOTT RESTAURANTS, INC.
LESSOR:
BANK OF AMERICA,
N.A.
7373 E. DOUBLETREE RANCH RD.
C/O AZ BUSINESS LOAN PROCESSING
SUITE 130
201 EAST WASHINGTON STREET
SCOTTSDALE, AZ 85058-2141
PHOENIX, AZ 85004
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DESCRIPTION OF COLLATERAL: PURCHASE MONEY SECURITY INTEREST IN
ALL
INVENTORY, CHATTEL PAPER, ACCOUNTS,
EQUIPMENT AND GENERAL INTANGIBLES; WHETHER
ANY OF THE FOREGOING IS OWNED NOW OR
ACQUIRED LATER; ALL ACCESSIONS, ADDITIONS,
REPLACEMENTS, AND SUBSTITUTIONS RELATING TO
ANY OF THE FOREGOING; ALL RECORDS OF
ANY KIND RELATING TO ANY OF THE FOREGOING;
ALL PROCEEDS RELATING TO ANY OF THE
FOREGOING (INCLUDING INSURANCE, GENERAL
INTANGIBLES AND OTHER ACCOUNTS PROCEEDS)
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TOTAL AMOUNT FINANCED:
$850,000.00
TERMS OF RENTAL PAYMENTS:
NUMBER OF PAYMENTS:
60
MONTHLY PAYMENT: $16,890,54
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FIRST MONTHLY PAYMENT IS PAYABLE ON NOVEMBER 27, 2001 AND
THEREAFTER ON
THE SAME DAY OF EACH CONSECUTIVE MONTH.
THIS LEASE PURCHASE (the "Lease") is
entered into between MCDERMOTT RESTAURANTS,
INC., (the "Lessee") and Bank of America,
N.A. (the "Lessor") dated as of the
date set forth below.
Lessee wishes to purchase certain equipment
and has requested that Lessor
provide the financing for such equipment
pursuant to the terms of this Lease. In
consideration of the foregoing and other
valuable consideration, Lessor and
Lessee agree as follows:
LEASE. Lessor and Lessee agree that Lessor
will finance pursuant to the
provisions of this Lease the equipment
described herein (the items of equipment
subject hereto, together with all
attachments, accessions, accessories, parts,
and additions to and all replacements of
and substitutions for such equipment,
whether now owned or hereafter acquired,
whether now existing or hereafter
arising, individually and collectively
called the "Equipment").
TERM. Subject to the conditions stated
herein, the term of this Lease (the
"Term") for the Equipment financed pursuant
to this Lease shall commence on the
later of (a) the date of this Lease, or (b)
the date of delivery of the
Equipment, but in no event later than the
date set forth above for first monthly
payment.
PAYMENTS. Lessee agrees to pay the total
amount of payments (the "Payments") for
the financing of the Equipment in the
amounts and at the times which are
indicated herein, plus such additional
amounts as may be provided herein.
Payments shall be made as indicated herein,
at the address of Lessor stated
above or as otherwise provided to Lessee in
writing. Lessee agrees
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that Lessor shall have the right to satisfy
any Payments due under this Lease by
directly charging any account of Lessee
with Lessor or with any affiliate bank
of Lessor.
NO ABATEMENT OF PAYMENTS. There will be no
abatement or reduction of Payments by
Lessee for any reason, including but not
limited to, any defense, recoupment,
setoff, counterclaim, or any claim arising
out of or related to any defects,
damages, malfunctions, breakdowns,
infirmities, losses or thefts of the
Equipment. Lessee assumes and shall bear
the entire risk of loss and damage to
the Equipment from any cause whatsoever, it
being the intention of the parties
that the Payments and any other sums
required to be paid to Lessor hereunder
shall be paid ,in all events unless the
obligation of Lessee to make Payments is
terminated as otherwise provided
herein.
PREPAYMENT. Lessee may pay without penalty
all or a portion of the amount owed
earlier than it is due. Early Payments will
not, unless agreed to by Lessor in
writing, relieve Lessee of Lessee's
obligation to continue to make Payments
under the payment schedule. Rather, they
will reduce the principal balance due
and may result in Lessee making fewer
Payments.
EARLY TERMINATION. Lessor reserves the
right, if requested by Lessee to remove
an item of Equipment from this Lease, to
require that all Payments due under the
Lease be paid in full (less such amount as
is attributable to the unearned
interest component of such Payments based
upon a simple interest accrual method,
and the rate implicit in the Payments, as
determined by Lessor in its
discretion) whereupon the Lessor will
release its interest in all of the
Equipment subject to this Lease. Should
Lessor consent to Lessee's request to
remove an item of Equipment from this Lease
and not require payment in full, and
provided that no Event of Default has
occurred, Lessee may do so upon payment of
the remaining Payments for such item of
Equipment less such amount as is
attributable to the unearned interest
component of such Payments based upon a
simple interest accrual method, and the
rate implicit in the Payments, as
determined by Lessor in its discretion.
Upon such payment, Lessor will release
its interest in the respective item of
Equipment and the item of Equipment shall
no longer be subject to this Lease.
LATE CHARGES. Should Lessee fail to pay any
part of the Payments or any other
sum required to be paid to Lessor
hereunder, within 15 DAYS AFTER THE DUE DATE
THEREOF, LESSEE SHALL PAY A LATE PAYMENT
CHARGE EQUAL TO 4.00% OF THE DELINQUENT
PAYMENT.
SECURITY INTEREST. Notwithstanding that this
instrument is referred to as a
"Lease", Lessee will at all times hold
title to the Equipment during the Term.
Lessor and Lessee acknowledge this
instrument is a lease intended as security
and is not intended to constitute a lease
for tax or accounting purposes. Use
of the term "Lease" in the title of this
instrument is solely for the
convenience of the parties hereto. Lessee
hereby grants to Lessor a security
interest in the Equipment, whether now or
hereafter covered by this Lease,
together with all of the following, whether
now owned or hereafter acquired,
whether now existing or hereafter arising,
and wherever located:
(a) The Equipment.
(b) All documents
covering the Equipment and all accounts, contract
rights, general intangibles, instruments,
rents, monies, payments, and all
other rights, arising out of a sale, lease,
or other disposition of the
Equipment.
(c) All proceeds
(including insurance proceeds) from the sale,
destruction, loss, or other disposition of
the Equipment.
(d) All records and
data relating to the Equipment, whether in the
form of a writing, photograph, microfilm,
microfiche, or electronic media,
together with all of Lessee's right, title,
and interest in and to all computer
software required to utilize, create,
maintain, and process any such records or
data on electronic media.
The security interest granted herein shall
secure all indebtedness and
obligations of Lessee to Lessor under this
Lease, whether for Payments in
respect of the same Equipment, Payments in
respect of other Equipment, costs or
expenses, or otherwise.
OBLIGATIONS OF LESSEE. Lessee warrants and covenants to
Lessor as follows:
ORGANIZATION. Lessee
is a corporation which is duly organized,
validly existing, and in good standing under the laws of the state
of
Lessee's organization. Lessee has its chief executive office at
the
address specified at the beginning of this Lease. Lessee will
notify
Lessor of any change in the location of Lessee's chief
executive
office.
PERFECTION OF SECURITY INTEREST. Lessee agrees to execute such
financing statements, notices of lien, and powers of attorney, and
to
take whatever other actions are requested by Lessor to perfect
and
continue Lessor's security interest in the Equipment, including
the
delivery to Lessor of all certificates of title (showing Lessor
as
legal owner or lienholder if required by law to perfect
Lessor's
security interest in the item of Equipment) or manufacturer's
certificates of origin. Lessee hereby irrevocably appoints Lessor
as
its attorney-in-fact for the purpose of executing any documents
necessary to perfect or to continue the security interest granted
in
this Lease or pursuant hereto, or to more specifically identify
the
Equipment so as to ensure the validity and perfection of such
security interest. Lessor may at any time, and without further
authorization from Lessee, file a carbon, photographic or other
reproduction of any financing statement or of this Lease for use as
a
financing statement.
Lessee will reimburse Lessor for all expenses for the perfection
and
the continuation of the perfection of Lessor's security interest
in
the Equipment. Lessee promptly will notify Lessor of any change
in
Lessee's name including any change to the assumed or fictitious
business names of Lessee.
REMOVAL OF EQUIPMENT.
Lessee shall keep the Equipment at Lessee's
address shown above, or at such other locations as are acceptable
to
Lessor. Lessee shall not remove the Equipment from its existing
locations without the prior written consent of Lessor. To the
extent
that the Equipment consists of vehicles, or other titled
property,
Lessee shall not take or permit any action which would require
application for certificates of title for any vehicle outside
the
State of Nevada, without the prior written consent of Lessor.
TRANSACTIONS INVOLVING EQUIPMENT. Lessee shall not sell, lease,
or
otherwise transfer or dispose of the Equipment. Lessee shall
not
pledge, assign, sublease, mortgage, encumber or otherwise permit
the
Equipment to be subject to any lien, security interest,
encumbrance,
or charge, other than the security interest provided for in
this
Lease, without the prior written consent of Lessor. This
includes
security interests even if junior in right to the security
interests
granted under
this Lease. Unless waived by Lessor, all proceeds from
any disposition of the Equipment (for whatever reason) shall be
held
in trust for Lessor and shall not be commingled with any other
funds;
provided however, this requirement shall not constitute consent
by
Lessor to any sale or other disposition. Upon receipt, Lessee
shall
immediately deliver any such proceeds to Lessor.
TITLE. Lessee
represents and warrants to Lessor that it holds good
and marketable title to the Equipment, free and clear of all
liens
and encumbrances except for the lien of this Lease. No
financing
statement covering any of the Equipment is on file in any
public
office other than
those which reflect the security interest created
by this Lease. Lessee agrees to protect and defend Lessor's rights
in
the Equipment against the claims and demands of all other
persons.
MAINTENANCE AND INSPECTION OF EQUIPMENT. Lessee shall maintain all
Equipment in good condition and repair. Lessee will not commit
or
permit damage to or destruction of the Equipment or any part of
the
Equipment. Lessor and its designated representatives and agents
shall
have the right at all times to examine, inspect, and audit the
Equipment wherever located. Lessee shall immediately notify Lessor
of
all cases involving the repossession, loss or damage of or to
any
Equipment; of any dispute arising with respect to the Equipment;
and
generally of all events affecting the Equipment or the value
thereof.
PERSONAL PROPERTY. The
Equipment is, and shall at all times be and
remain, personal
property notwithstanding that the Equipment or any
part thereof may now be, or hereafter become, in any manner affixed
or
attached to real property or any building thereon. Upon request
of
Lessor, Lessee shall obtain, as to any place where the Equipment
is
located, a waiver from the landlord and mortgagee thereof with
respect
to any rights they may have in and to the Equipment or the rights
of
levy or seizure thereon.
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TAXES, ASSESSMENTS AND LIENS. Lessee will pay when due all
taxes,
assessments and liens upon the Equipment, its use or operation, or
upon
this Lease. Lessee may withhold any such payment or may elect
to
contest any lien if Lessee is in good faith conducting an
appropriate
proceeding to contest the obligation to pay and so long as
Lessor's
interest in the Equipment is not, in Lessor's sole opinion,
thereby
jeopardized. If the Equipment is subjected to a lien which is
not
discharged within fifteen (15) days, Lessee shall deposit with
Lessor
cash, a sufficient corporate surety bond or other security
satisfactory
to Lessor in an amount adequate to provide for the discharge of
the
lien plus any interest, costs or other charges that could accrue as
a
result of foreclosure or sale of the Equipment. In any contest
Lessee
shall defend itself and Lessor and shall satisfy any final
adverse
judgment before enforcement against the Equipment. Lessee shall
name
Lessor as an additional obligee under any surety bond furnished in
the
contest proceedings.
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Lessee shall comply
promptly
with all laws, ordinances and regulations of all governmental
authorities applicable to the Equipment. Lessee may contest in
good
faith any such law, ordinance or regulation and withhold
compliance
during any proceeding, including appropriate appeals, so long
as
Lessor's interest in the Equipment, in Lessor's opinion, is not
jeopardized.
MAINTENANCE OF CASUALTY INSURANCE. Lessee shall procure and
maintain
all risks insurance, including without limitation fire, theft
and
liability coverage together with such other insurance as Lessor
may
require with respect to the Equipment, in form, amounts, coverages
and
basis reasonably acceptable to Lessor and issued by a company
or
companies reasonably acceptable to Lessor. Lessee, upon request
of
Lessor, will deliver to Lessor from time to time the policies
or
certificates of insurance in form satisfactory to Lessor,
including
stipulations that coverages will not be cancelled or diminished
without
at least thirty (30) days prior written notice to Lessor and
not
including any disclaimer of the insurer's liability for failure to
give
such a notice. In connection with all policies covering
Equipment
Lessee will provide Lessor with such loss payable or other
endorsements
as Lessor may require. If Lessee at any time fails to obtain or
maintain any insurance as required under this Lease, Lessor may
(but
shall not be obligated to) obtain such insurance as Lessor
deems
appropriate, including if it so chooses "single interest
insurance,"
which will cover only Lessor's interest in the Equipment.
APPLICATION OF INSURANCE PROCEEDS. Lessee shall promptly notify
Lessor
of any loss or damage to the Equipment. Lessor may present proof
of
loss to Lessee's insurer if Lessee fails to do so within fifteen
(15)
days of
the casualty. All proceeds of any insurance on the Equipment,
including accrued interest thereon, shall be held by Lessor as part
of
the security for the indebtedness. If Lessor consents to repair
or
replacement of the damaged or destroyed Equipment, Lessor shall,
upon
satisfactory proof of expenditure, pay or reimburse Lessee from
the
proceeds for the reasonable cost of repair or restoration. If
Lessor
does not consent to repair or replacement of the Equipment,
Lessor
shall retain a sufficient amount of the proceeds to pay the
remaining
Payments due under this Lease less such amount as is attributable
to
the unearned interest component of such Payments based upon a
simple
interest accrual method, and the rate implicit in the Payments,
as
determined by Lessor in its discretion, and shall pay the balance,
if
any, to Lessee. Any
3
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proceeds which have been disbursed within six (6) months after
their
receipt and which Lessee has not committed to the repair or
restoration
of the Equipment shall be used to pay the indebtedness.
INSURANCE REPORTS. Lessee, upon request of Lessor, shall furnish
to
Lessor reports on each existing policy of insurance showing
such
information as Lessor may reasonably request including the
following:
(a) the name of the insurer; (b) the risks insured; (c) the amount
of
the policy; (d) the property insured; (e) the then current value on
the
basis of which insurance has been obtained and the manner of
determining that value; and (f) the expiration date of the policy.
In
addition, Lessee shall at Lessee's cost and upon request by
Lessor
(however not more often than annually) have an independent
appraiser
satisfactory to Lessor determine, as applicable, the cash value
or
replacement cost of the Equipment.
BUSINESS PURPOSES. The Equipment will be used solely for business
or
commercial purposes.
SALE OF ASSETS. Lessee shall not convey, lease, sell, transfer
or
assign all or substantially all of its assets, and shall not
liquidate
or discontinue its normal operations with intent to liquidate,
without
the prior written consent of Lessor.
LESSEE'S RIGHT TO POSSESSION. Until an
Event of Default, Lessee may have
possession and beneficial use of all the
Equipment and may use it in any lawful
manner not inconsistent with this Lease. If
Lessor at any time has possession of
any Equipment, whether before or after an
Event of Default, Lessor shall be
deemed to have exercised reasonable care in
the custody and preservation of the
Equipment if Lessor takes such action for
that purpose as Lessee shall request
or as Lessor, in Lessor's sole discretion,
shall deem appropriate under the
circumstances, but failure to honor any
request by Lessee shall not of itself be
deemed to be a failure to exercise
reasonable care. Lessor shall not be req
