EXHIBIT 10.4
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CONSTRUCTION AGENCY AGREEMENT
dated as of August 29, 2001
among
ATLANTIC FINANCIAL GROUP, LTD.
and
CHOICEPOINT INC.
as Construction Agent
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...............................................................................1
1.1. Defined Terms.............................................................................1
ARTICLE II APPOINTMENT OF CONSTRUCTION AGENT.........................................................1
2.1. Appointment...............................................................................2
2.2. Acceptance; Construction..................................................................2
2.3. Commencement of Construction..............................................................2
2.4. Supplements to this Agreement.............................................................2
2.5. Term......................................................................................3
2.6. Identification of Properties; Construction Documents......................................3
2.7. Scope of Authority........................................................................3
2.8. Covenants of the Construction Agent.......................................................5
2.9. Insurance.................................................................................5
ARTICLE III THE BUILDINGS............................................................................12
3.1. Amendments; Modifications................................................................12
3.2. Casualty and Condemnation................................................................12
3.3. Indemnity................................................................................13
3.4. Construction Force Majeure Events........................................................13
ARTICLE IV PAYMENT OF FUNDS.........................................................................15
4.1. Funding of Property Acquisition Costs and Property Buildings Costs.......................15
ARTICLE V CONSTRUCTION AGENCY EVENTS OF DEFAULT....................................................15
5.1. Construction Agency Events of Default....................................................15
5.2. Damages..................................................................................16
5.3. Remedies; Remedies Cumulative............................................................16
5.4. Limitation on Construction Agent's Recourse Liability....................................18
5.5. Construction Agent's Right to Purchase...................................................19
5.6. Construction Return Procedures...........................................................19
5.7. Option to Remarket.......................................................................20
5.8. Rejection of Sale........................................................................23
5.9. Return of Leased Property................................................................23
ARTICLE VI NO CONSTRUCTION AGENCY FEE...............................................................24
6.1. Lease as Fulfillment of Lessor's Obligations.............................................24
ARTICLE VII LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS.............................................24
7.1. Exercise of the Lessor's Rights..........................................................24
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7.2. Lessor's Right to Cure Construction Agent's Defaults.....................................24
ARTICLE VIII MISCELLANEOUS............................................................................25
8.1. Documentary Conventions..................................................................25
8.2. Successors and Assigns...................................................................25
EXHIBITS
Exhibit A Form of Supplement to Construction Agency Agreement
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CONSTRUCTION AGENCY AGREEMENT
CONSTRUCTION AGENCY AGREEMENT, dated as of August 29, 2001 (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), between
ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, (the "Lessor"), and
CHOICEPOINT INC., a Georgia corporation ("ChoicePoint", and in its capacity as
construction agent, the "Construction Agent").
PRELIMINARY STATEMENT
A. Lessor, ChoicePoint, certain subsidiaries of ChoicePoint that
may become signatories thereto, the Lenders signatory thereto and SunTrust Bank,
as agent for such Lenders (in such capacity, the "Agent") are parties to that
certain Master Agreement, dated as of August 29, 2001 (as amended, supplemented
or otherwise modified from time to time pursuant thereto, the "Master
Agreement").
B. Subject to the terms and conditions hereof, (i) the Lessor
desires to appoint ChoicePoint as the Construction Agent to act as its sole and
exclusive agent for the identification and acquisition of the Land pursuant to
the Master Agreement and construction of the Buildings in accordance with the
Plans and Specifications and pursuant to the Master Agreement, and (ii) the
Construction Agent desires, for the benefit of the Lessor, to cause the
Buildings to be constructed in accordance with the Plans and Specifications and
pursuant to the Master Agreement and this Agreement, in each case in accordance
with the terms herein set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
1.1. Defined Terms. Capitalized terms used but not otherwise
defined in this Agreement shall have the meanings set forth in Appendix A to the
Master Agreement.
ARTICLE II
APPOINTMENT OF CONSTRUCTION AGENT
2.1. Appointment. Pursuant to and subject to the terms and
conditions set forth herein and in the Master Agreement and the other Operative
Documents, the Lessor hereby irrevocably designates and appoints ChoicePoint as
the Construction Agent to act as its exclusive agent for (i) the identification
and acquisition from time to time of Land to be acquired or leased by the Lessor
and leased or subleased to ChoicePoint and (ii) the construction of the
Buildings in accordance with the Plans and Specifications on such Land.
2.2. Acceptance; Construction. ChoicePoint hereby unconditionally
accepts the designation and appointment as Construction Agent. The Construction
Agent will cause the Buildings to be constructed on the Land substantially in
accordance with the Plans and Specifications and, in accordance with the
Operative Documents, to be equipped in all material respects with all Applicable
Law and insurance requirements, but using funds advanced by the Funding Parties
(or its own funds, subject to reimbursement from Advances), insurance proceeds,
condemnation awards and any Additional Amounts advanced by the Funding Parties
(collectively, the "Funding Sources"). If a Leased Property will be leased by a
Lessee other than ChoicePoint, ChoicePoint may appoint such Lessee as its
sub-construction agent with respect to such Leased Property, provided that such
appointment shall not affect ChoicePoint's obligations hereunder, which
obligations shall be primary and shall remain in full force and effect.
2.3. Commencement of Construction. Subject to Construction Force
Majeure Events, the Construction Agent hereby agrees, unconditionally and for
the benefit of the Lessor, to cause Construction of a Building to commence on
each parcel of Land as soon as is reasonably practicable, in its reasonable
judgment, after the Closing Date in respect of such Land. For purposes hereof,
Construction of a Building shall be deemed to commence on the date after the
Closing Date for the related Leased Property (the "Construction Commencement
Date") on which excavation for the foundation for such Building or any other
Construction of such Building commences. Without limiting the foregoing, no
phase of such Construction shall be undertaken until all permits required for
such phase have been issued therefor.
2.4. Supplements to this Agreement. On the Closing Date of each
parcel of Land, the Lessor and the Construction Agent shall each execute and
deliver to the Agent a supplement to this Agreement in the form of Exhibit A to
this Agreement, appropriately completed, pursuant to which the Lessor and the
Construction Agent shall, among other things, each acknowledge and agree that
the Construction of such parcel of Land will be governed by the terms of this
Agreement. Following the execution and delivery of a supplement to this
Agreement as provided above, such supplement and all supplements previously
delivered under this Agreement shall constitute a part of this Agreement. On or
prior to the Closing Date of each parcel of Land, the Construction Agent shall
prepare and deliver to the Lessor and the Agent a construction budget (the
"Construction Budget") for the related Leased Property, setting forth in
reasonable detail the budget for the Construction of the proposed Building on
such Land in accordance with the Plans and Specifications therefor, and all
related costs including the capitalized interest and Yield expected to accrue
during the related Construction Term; such Construction Budget shall
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include a line item for the amount of self-insurance or deductibles applicable
to such Leased Property.
2.5. Term. This Agreement shall commence on the date hereof and
shall terminate with respect to any given Leased Property upon the first to
occur of:
(a) payment by the Lessee of the Leased Property Balance
and termination of the Lease with respect to such Leased Property in
accordance with the Lease;
(b) the expiration or earlier termination of the Lease;
(c) termination of this Agreement pursuant to Article V
hereof;
(d) the Completion Date for such Leased Property and the
completion of all punch list items as set forth in Section 2.8(d); and
(e) the payment by the Construction Agent of the Leased
Property Balance or the Construction Failure Payment with respect to
such Leased Property pursuant to this Agreement.
2.6. Identification of Properties; Construction Documents. The
Construction Agent may execute any of its duties and obligations under this
Agreement by or through agents, contractors, developers, Affiliates, employees
or attorneys-in-fact, and the Construction Agent shall enter into such
agreements with architects and contractors as the Construction Agent deems
necessary or desirable for the construction of the Buildings pursuant hereto
(the "Construction Documents"); provided, however, that no such delegation shall
limit or reduce in any way the Construction Agent's duties and obligations under
this Agreement; provided, further, that contemporaneously with the execution and
delivery of a Construction Document, the Construction Agent will execute and
deliver to the Lessor the Security Agreement and Assignment, pursuant to which
the Construction Agent assigns to the Lessor, among other things, all of the
Construction Agent's rights under and interests in such Construction Documents.
Each construction contract shall be with a reputable general contractor with
experience in constructing projects that are similar in scope and type to the
proposed Building, and shall provide for a guaranteed maximum project cost, at
least 10% retainage and, except for the Leased Property located in ▇▇▇▇▇▇
County, Georgia, the delivery of a performance bond.
2.7. Scope of Authority. (a) Subject to the terms, conditions,
restrictions and limitations set forth in the Operative Documents, the Lessor
hereby expressly authorizes the Construction Agent, or any agent or contractor
of the Construction Agent, and the Construction Agent unconditionally agrees,
for the benefit of the Lessor, to take all action necessary or desirable for the
performance and satisfaction of all of the Construction Agent's obligations
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hereunder with respect to the Leased Properties acquired or leased by the
Lessor, including, without limitation:
(i) the identification and assistance with the
acquisition or lease of Land in accordance with the terms and
conditions of the Master Agreement;
(ii) all design and supervisory functions relating to the
construction of the Buildings and performing all engineering work
related to the construction of the Buildings;
(iii) negotiating and entering into all contracts or
arrangements to procure the equipment and services necessary to
construct the Buildings on such terms and conditions as are customary
and reasonable in light of local standards and practices;
(iv) obtaining all necessary permits, licenses, consents,
approvals and other authorizations, including those required under
Applicable Law, from all Governmental Authorities in connection with
the construction and the development of the Leased Property on the Land
in accordance with the Plans and Specifications;
(v) maintaining all books and records with respect to the
construction, operation and management of the Leased Properties; and
(vi) performing any other acts necessary or appropriate in
connection with the identification, and acquisition (or leasing) and
development of the Land and construction of the Buildings in accordance
with the Plans and Specifications, and all other functions typically
undertaken for the construction and development of similar properties.
(b) Neither the Construction Agent nor any of its Affiliates or
agents shall enter into any contract which would, directly or indirectly, impose
any liability or obligation on the Lessor unless such contract expressly
contains an acknowledgment by the other party or parties thereto that the
obligations of the Lessor are non-recourse, and that the Lessor shall have no
personal liability with respect to such obligations. Any contract entered into
by the Construction Agent or any of its Affiliates or agents not meeting the
requirements of the foregoing sentence shall be ineffective. Subject to the
foregoing, the Lessor shall execute such documents and take such other actions
as the Construction Agent shall reasonably request, at the Construction Agent's
expense, to permit the Construction Agent to perform its duties hereunder.
(c) Subject to the terms and conditions of this Agreement and the
other Operative Documents, the Construction Agent shall have sole management and
control over the means, methods, sequences and procedures with respect to the
Construction. The parties agree that the Construction Agent shall be in
possession and control of each Leased Property during the Construction Term
therefor.
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2.8. Covenants of the Construction Agent. The Construction Agent
hereby covenants and agrees that it will, using the Funding Sources:
(a) following the Construction Commencement Date for each
parcel of Land, cause construction of a Building on such Land to be
prosecuted diligently and without undue interruption substantially in
accordance with the Plans and Specifications for such Land, in
accordance with the Construction Budget for such Leased Property and in
compliance in all material respects with all Applicable Law and
insurance requirements;
(b) notify the Lessor and the Agent in writing not less
than five (5) Business Days after the occurrence of each Construction
Force Majeure Event;
(c) take all reasonable and practical steps to cause the
Completion Date for such Leased Property to occur on or prior to the
Scheduled Construction Termination Date for such Leased Property, and
cause all Liens (including, without limitation, Liens or claims for
materials supplied or labor or services performed in connection with
the construction of the Buildings), other than Permitted Liens and
Lessor Liens, to be discharged;
(d) following the Completion Date for each Leased
Property, cause all outstanding punch list items with respect to the
Buildings on such Leased Property to be completed within sixty (60)
days after said Completion Date;
(e) at all times during Construction, cause all title to
all personalty financed by the Lessor on or within such Leased Property
to be and remain vested in the Lessor and cause to be on file with the
applicable filing office or offices all necessary documents under
Article 9 of the Uniform Commercial Code to perfect such title free of
all Liens other than Permitted Liens, it being understood and
acknowledged that such Lessor's rights, title and interest in and to
said personalty have been assigned to the Agent pursuant to the
Operative Documents;
(f) not enter into any agreements or arrangements with
any Person (other than the Funding Parties pursuant to the Operative
Documents) that would result in any claim against, or liability of, the
Agent or any Funding Party resulting from the fact that any Leased
Property is not completed on or prior to the Scheduled Construction
Termination Date therefor; and
(g) take all reasonable and practical steps to minimize
the disruption of the construction process arising from Construction
Force Majeure Events.
2.9. Insurance.
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(a) Insurance by the Construction Agent: The Construction Agent
shall cause to be procured with proceeds of Advances pursuant to, and subject to
the terms and conditions of, the Operative Documents and maintain in full force
and effect during the Construction Term insurance policies with insurance
companies authorized to do business in each jurisdiction in which the Leased
Properties under Construction are located with a Best Insurance Reports rating
of "A" or better and a financial size category of "VIII" or higher, or that are
pre-approved by the Lessor, with limits and coverage provisions as set forth
below.
(i) General Liability Insurance. Liability insurance on
an occurrence basis for the Construction Agent's and Lessor's liability
arising out of claims for personal injury (including bodily injury and
death) and property damage. Such insurance shall provide coverage for
products-completed operations, contractual and personal injury
liability with a $1,000,000 limit per occurrence for combined bodily
injury and property damage with policy aggregates of $2,000,000 (other
than products-completed operations) and $1,000,000 for
products-completed operations. A maximum deductible or self- insured
retention of $5,000 per occurrence shall be allowed with respect to
such insurance to the extent relating to the Leased Properties.
(ii) Automobile Liability Insurance. Automobile liability
insurance for the Construction Agent's and Lessor's liability arising
out of claims for bodily injury and property damage covering all
leased, non-owned and hired vehicles used in the performance of the
Construction Agent's obligations under this Agreement with a $1,000,000
limit per accident for combined bodily injury and property damage and
containing appropriate no-fault insurance provisions wherever
applicable. A maximum deductible or self-insured retention of $5,000
per occurrence shall be allowed with respect to such insurance to the
extent relating to the Leased Properties.
(iii) Excess Liability Insurance. Liability insurance in
excess of the insurance coverage required in clauses (i) and (ii) above
with a limit of $5,000,000 per occurrence and in the aggregate.
(iv) Builder's Risk Insurance. Property damage insurance
on an "all risk" basis insuring the Construction Agent and Lessor, as
their interests may appear, including coverage against loss or damage
from the perils of earth movement (including but not limited to
earthquake, landslide, subsidence and volcanic eruption), flood,
strike, riot and civil commotion.
a. Property Covered. The builder's risk
insurance shall provide coverage for (i) the Buildings,
structures, machinery, equipment, facilities, fixtures,
supplies and other property constituting a part of the Leased
Property under Construction, (ii) property of others in the
care, custody or control of the Construction Agent in
connection with the Leased Property, but not contractor's
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tools, machinery, plant and equipment including spare parts
and accessories not destined to become a permanent part of the
Leased Property, (iii) all preliminary works, temporary works
and interconnection works and (iv) foundations and other
property below the surface of the ground.
b. Additional Coverages. The builder's risk
policy shall insure (i) the cost (including labor) of
preventive measures to reduce or prevent further loss, (ii)
inland transit with sublimits sufficient to insure the largest
single shipment to or from the Leased Property site from
anywhere within North America, (iii) attorney's fees,
engineering and other consulting costs, and permit fees
directly incurred in order to repair or replace damaged
insured property in the amount of $2,500, (iv) expediting
expenses (defined as reasonable extra costs incurred after an
insured loss to make temporary repairs and expedite the
permanent repair of the damaged property) with a sublimit in
the amount of $25,000, (v) off-site storage to insure the full
replacement value of any property or equipment not stored on
the Leased Property site with a sublimit of $150,000, and (vi)
demolition expenses, removal of undamaged portion, and
increased cost of construction due to operation of laws or
codes with a sublimit of twenty-five percent (25%) of the
amount of the physical loss or damage.
c. Special Clauses. The builder's risk policy
shall include (i) a 72 hour flood/windstorm/earthquake clause,
(ii)unintentional errors and omissions clause, (iii) a
requirement that the insurer pay losses within 60 days after
receipt of an acceptable proof of loss, and (iv) an extension
clause allowing the policy period to be extended up to 60 days
without modification to the terms and conditions of the policy
and payment of the premium on a pro-rata basis.
d. Prohibited Exclusions. The builder's risk
policy shall not contain any (i) coinsurance provisions, (ii)
exclusion for ensuing direct physical loss or damage resulting
from freezing, (iii) exclusion for physical loss or damage
covered under any guarantee or warranty arising out of an
insured peril, or (iv) exclusion for resultant physical loss
or damage caused by ordinary wear and tear, gradual
deterioration, faulty workmanship, [design] or materials.
e. Sum Insured. The builder's risk policy shall
(i) be on a completed value form, (ii) insure 100% of the
completed insurable value of the Building(s), (iii) value
losses at replacement cost, without deduction for physical
depreciation or obsolescence including custom duties, taxes
and fees and (iv) insure loss or damage from earth movement
and flood with separate sublimits of $15,000,000.
f. Deductible. The builder's risk insurance may
have a deductible not in excess of $5,000.
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(v) Delayed Startup Insurance. Delayed startup coverage
insuring the Lessor and covering the Lessor's accrued and capitalized
interest and Yield for a six month period as a result of loss or damage
insured by the builder's risk insurance resulting in a delay in
completion of the Building(s) beyond their anticipated date of
completion.
Such insurance shall (a) have a deductible of not greater than 10 days
per occurrence during the Construction Term, (b) have an indemnity
period not less than six months, (c) cover loss sustained when access
to the Leased Property site is prevented due to an insured peril at
premises in the vicinity of the Leased Property site with a sublimit of
$27,500, (d) cover loss sustained due to the action of a public
authority preventing access to the Leased Property site due to imminent
or actual loss or destruction arising from an insured peril at premises
in the vicinity of the Leased Property site with a sublimit of $27,500,
and (e) not contain any form of a coinsurance provision or include a
waiver of such provisions.
(vi) Endorsements. All policies of insurance required to
be maintained by the Construction Agent shall be endorsed as follows.
a. To name the Lessor as the loss payee with
respect to all property insurance;
b. To name the Lessor, the Lenders and the
Agent as additional insureds with respect to all liability
policies;
c. To provide a severability of interests and
cross liability clause;
d. That the insurance shall be primary and not
excess to or contributing with any insurance or self-insurance
maintained by the Lessor or the additional insureds.
e. That in respect of the interests of the
Lessor, the Lenders and the Agent, such policies shall not be
invalidated by any fraud, action, inaction or
misrepresentation of the Construction Agent or any other
Person, and shall insure each of the Lessor, the Lenders and
the Agent regardless of any breach of any terms, conditions or
warranty contained in any policy by the Construction Agent or
any other Person.
(vii) Waiver of Subrogation. The Construction Agent hereby
waives any and every claim for recovery from the Lessor, the Lenders
and the Agent for any and all loss or damage covered by any of the
insurance policies to be maintained under this Agreement to the extent
that such loss or damage is recovered under any such policy. If the
foregoing waiver will preclude the assignment of any such claim to the
extent of such
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recovery, by subrogation (or otherwise), to an insurance company (or
other person), the Construction Agent (or other appropriate party)
shall give written notice of the terms of such waiver to each insurance
company which has issued, or which may issue in the future, any such
policy of insurance (if such notice is required by the insurance
policy) and shall cause each such insurance policy to be properly
endorsed by the issuer thereof to, or to otherwise contain one or more
provisions that, prevent the invalidation of the insurance coverage
provided thereby by reason of such waiver.
(b) Conditions.
(i) Adjustment of Losses. Losses, if any, with respect to
any Leased Property under any damage policies required to be carried
under this Section 2.9 shall be adjusted with the insurance companies,
including the filing of appropriate proceedings, as follows: (x) so
long as no Construction Agency Event of Default shall have occurred and
be continuing, and provided that the Construction Agent is required, or
has agreed, to repair the damage or if the purchase option has been
exercised, such losses will be adjusted by the Construction Agent, (y)
if any Construction Agency Event of Default shall have occurred and be
continuing or Construction Force Majeure Event declared, or if the
Construction Agent is not required to, and has not agreed to, repair
the damage, such losses shall be adjusted by the Lessor with the
consent of the Construction Agent (which consent shall not be
unreasonably withheld or delayed). The party which shall be entitled to
adjust losses may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or
insurance payment on account of any Casualty at such party's reasonable
request, and the other party shall participate in any such proceeding,
action, negotiation, prosecution or adjustment. The Construction Agent
may incur no expenses with respect to loss adjustment without the prior
consent, not to be unreasonably withheld, of the Lessor. Adjustment
expenses shall be funded through Advances. The parties hereto agree
that this Agreement shall control the rights of the parties hereto in
and to any such award, compensation or insurance payment relating to
any Casualty affecting a Construction Land Interest.
(ii) Application of Insurance Proceeds. All proceeds of
insurance maintained pursuant to this Section 2.9 on account of any
damage or destruction of any Leased Property (or part thereof) subject
to Construction shall be paid to Lessor, provided that (i) if no
Construction Agency Event of Default shall have occurred and (ii)
subject to Section 3.4, the Construction Agent has undertaken to repair
the damage and has demonstrated to the reasonable satisfaction of the
Lessor that the application of such insurance proceeds (including,
without limitation, delay in start up coverage), together with the
remaining Commitment and any increase to the Commitments effected
pursuant to Section 3.2, are sufficient to cause the construction to be
completed on or prior to the Scheduled Construction Termination Date,
such funds shall be held by Lessor in a segregated account and
disbursed to the Construction Agent to pay costs incurred by the
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Construction Agent to effect the repair of the Leased Property. If the
Construction cannot be completed on or prior to the Scheduled
Construction Termination Date, the parties agree to discuss the issue
of disbursement of insurance proceeds to the Construction Agent in good
faith and after such discussion the Lessor shall make a determination
in the exercise of its sole discretion. Any proceeds of insurance paid
to Lessor pursuant in this Section 2.9, not used to repair the Leased
Property and held by Lessor shall be applied to the account of
Construction Agent to reduce the Lease Balance.
(iii) Additional Insurance. Any additional insurance
obtained by the Construction Agent or the Lessor shall provide that it
shall not interfere with or in any way limit the insurance described in
this Section 2.9 or increase the amount of any premium payable with
respect to any insurance described in such Section. The proceeds of any
such additional insurance will be for the account of the party
maintaining such additional insurance.
(iv) Payment of Premiums. The Construction Agent shall
cause to be paid (including, in the case of insurance required under
this Section 2.9, with the proceeds of Advances and capitalized as part
of Permitted Lease Balance), all premiums for the insurance required
hereunder. The Construction Agent shall renew or replace, or cause to
be renewed or replaced, each insurance policy required hereunder prior
to the expiration date thereof for the duration of the Construction
Term.
(v) Policy Cancellation and Change. All policies of
insurance required to be maintained pursuant to this Section 2.9 shall
be endorsed so that if at any time they are cancelled, or their
coverage is reduced (by any party including the insured) so as to
affect the interests of the Lessor, such cancellation or reduction
shall not be effective as to the Lessor for 30 days, except for
non-payment of premium which shall be for 10 days, after receipt by the
Lessor of written notice from such insurer of such cancellation or
reduction.
(vi) Miscellaneous Policy Provisions. All property damage
and delayed startup insurance policies, (i) shall not include any
annual or term aggregate limits of liability or clause requiring the
payment of additional premium to reinstate the limits after loss except
for insurance covering the perils of flood, earth movement, sabotage
and terrorism, (ii) shall include the Lessor as a named insured as its
interest may appear, and (iii) shall include a clause requiring the
insurer to make final payment on any claim within 60 days after the
submission of proof of loss and its acceptance by the insurer.
(vii) Separation of Interests. All policies shall insure
the interests of the Lessor regardless of any breach or violation by
the Construction Agent or any other Person of warranties, declarations
or conditions contained in such policies, any action or inaction of
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the Construction Agent or others, or any foreclosure relating to the
Leased Property or any change in ownership of all or any portion of the
Leased Property.
(viii) Acceptable Policy Terms and Conditions. All policies
of insurance required to be maintained pursuant to this Section 2.9
shall contain terms and conditions reasonably acceptable to the Lessor.
(c) Evidence of Insurance. On the related Construction
Commencement Date and on an annual basis at least 10 days prior to each policy
anniversary, the Construction Agent shall furnish, or shall cause to be
furnished, the Lessor with (1) certificates of insurance or binders, in a form
acceptable to the Lessor, evidencing all of the insurance required by the
provisions of this Section 2.9. Such certificates of insurance/binders shall be
executed by each insurer or by an authorized representative of each insurer.
Such certificates of insurance/binders shall identify underwriters, the type of
insurance, the insurance limits and the policy term and shall specifically list
the special provisions enumerated for such insurance required by this Section
2.9. Upon request, the Construction Agent will promptly furnish the Lessor with
copies of all insurance policies, binders and cover notes or other evidence of
such insurance relating to the insurance required to be maintained hereunder.
(d) Reports. Concurrently with the furnishing of the certification
referred to in paragraph (c), the Construction Agent shall furnish, or cause to
be furnished, the Lessor with a report of an independent broker, signed by an
officer of the broker, stating that in the opinion of such broker, the insurance
then carried or to be renewed is in accordance with the terms of this Section
2.9. In addition the Construction Agent will advise the Lessor in writing
promptly of any default in the payment of any premium and of any other act or
omission on the part of the Construction Agent which may invalidate or render
unenforceable, in whole or in part, any insurance being maintained by the
Construction Agent pursuant to this Section 2.9.
(e) No Duty of Lessor to Verify or Review. No provision of this
Section 2.9 or any provision of this Agreement or the other Operative Documents
shall impose on the Lessor any duty or obligation to verify the existence or
adequacy of the insurance coverage maintained by the Construction Agent, nor
shall the Lessor be responsible for any representations or warranties made by or
on behalf of the Construction Agent to any insurance company or underwriter. Any
failure on the part of the Lessor to pursue or obtain the evidence of the
insurance required by this Agreement from the Construction Agent and/or failure
of the Lessor to point out any non- compliance of such evidence of insurance
shall not constitute a waiver of any of the insurance requirements in this
Agreement.
Notwithstanding anything herein to the contrary, the Construction Agent shall
not be responsible for the payment of any insurance deductible amounts.
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ARTICLE III
THE BUILDINGS
3.1. Amendments; Modifications. The Construction Agent may, subject
to the conditions, restrictions and limitations set forth herein and in the
Operative Documents (but not otherwise), at any time during the term hereof
revise, amend or modify the Plans and Specifications and the related
Construction Documents without the consent of the Lessor; provided, however,
that the Lessor's prior written consent will be required in the following
instances: (x) such revision, amendment or modification by its terms would
result in the Completion Date of the Buildings occurring after the Scheduled
Construction Termination Date, or (y) such revision, amendment or modification
would result in the cost for such Leased Property exceeding the then remaining
Commitments, minus the then remaining costs for completing each other Leased
Property for which the Completion Date has not occurred, or increase the
Construction Budget therefor, or (z) the aggregate effect of such revision,
amendment or modification, when taken together with any previous or
contemporaneous revision, amendment or modification to the Plans and
Specifications for such Leased Property, would be to reduce the Fair Market
Sales Value of such Leased Property in a material respect when completed.
3.2. Casualty and Condemnation. If at any time prior to the
Completion Date with respect to any Building there occurs a Casualty or the
Lessor or the Construction Agent receives notice of a Condemnation, then, in
each case the Construction Agent shall promptly and diligently take all
commercially reasonable and practical steps to cause the Construction of the
related Building to be completed substantially in accordance with the Plans and
Specifications and with the terms hereof, and cause the Completion Date to occur
on or prior to the Scheduled Construction Termination Date. The Construction
Agent shall use all insurance proceeds or Awards received by it with respect to
such Casualty or Condemnation, as the case may be, to pay the construction costs
incurred in connection with such rebuilding or restoration. The Lessor shall
make all insurance proceeds or Awards received with respect to such Casualty or
Condemnation available to the Construction Agent to reimburse the Construction
Agent for, or to pay, all construction costs incurred in connection with such
rebuilding or restoration. To the extent that such insurance proceeds are
insufficient to pay such construction costs, such construction costs shall be
paid with the proceeds of Advances made pursuant to the Master Agreement. In the
event that the insurance proceeds or Awards, plus the remaining Commitments are
insufficient to cover the costs of such rebuilding, then the Funding Parties
shall be obligated to increase their Commitments (on a pro rata basis) in an
aggregate amount equal to such deficiency, (any Advances made pursuant to such
increase, called the "Additional Amounts") provided that (i) the unused fee on
such increased Commitments and the interest rate and Lessor Rate on such
Additional Amounts shall be at such rate as the Funding Parties and ChoicePoint
mutually agree, (ii) the Construction Agent delivers an appraisal of the related
Leased Property from the Appraiser that is satisfactory to the Agents and the
Funding Parties, in
12
their sole discretion and (iii) each Funding Party has received all necessary
credit approvals for such increase. In the event that Lessor does not make such
insurance proceeds or Advances available, or the Commitments are not increased
as set forth in the previous sentence, then notwithstanding any other provision
of this Agreement, the Construction Agent may elect to return the affected
Leased Property (including all insurance proceeds and condemnation awards with
respect thereto) to the Lessor in accordance with Section 5.6 by delivering
written notice of such election to the Agent within thirty (30) days of the
related Casualty or Condemnation, in which event the Construction Agent shall
not have any obligation to pay the Construction Failure Payment with respect to
such Leased Property.
3.3. Indemnity. During the Construction Term for each Leased
Property, the Construction Agent agrees to assume liability for, and to
indemnify, protect, defend, save and hold harmless the Lessor on an After-Tax
Basis, from and against, any and all Claims that may be imposed on, incurred by
or asserted or threatened to be asserted, against the Lessor, whether or not the
Lessor shall also be indemnified as to any such Claim by any other Person, in
any way relating to or arising out of (i) any event, condition or circumstance
within the Construction Agent's control,(ii) fraud, misapplication of funds,
illegal acts or willful misconduct on the part of the Construction Agent, (iii)
any event described in paragraph (f) of Article XII of the Lease with respect to
the Construction Agent. As used in clause (i) of the foregoing sentence, the
term "within the Construction Agent's control" shall mean caused by or arising
from any failure by any Obligor to comply with any of its obligations under the
Operative Documents (including its insurance obligations), any representation or
warranty by any Obligor in any of the Operative Documents being inaccurate, any
negligence or wilful misconduct of any Obligor, or any claim by any third party
against the Lessor based upon the action or inaction of or by any Obligor;
provided, however, that if such Claim is related to an inability or the failure
to complete the construction of a Leased Property on or prior to Scheduled
Construction Termination Date therefor and such Claim does not arise out of or
result from events or circumstances described in the foregoing clause (ii) or
(iii), the Construction Agent's liability shall be limited to an amount equal to
the Construction Failure Payment. Any Claims that are incurred by any
Indemnified Party for which the Construction Agent is not obligated to indemnify
pursuant to this Section 3.3 or the Master Agreement shall, if requested by the
Agent by written notice to Lessor be capitalized, and result in an increase to
the Funded Amounts related to the relevant Leased Property (it being understood
that any such increase shall be treated as an Additional Amount for the purposes
of calculating Lessor Basic Rent and Lender Basic Rent). The foregoing
indemnities are in addition to, and not in limitation of, the indemnities with
respect to environmental claims set forth in Section 7.2 of the Master
Agreement. The provisions of Section 7.3 of the Master Agreement shall apply to
any amounts that the Construction Agent is requested to pay pursuant to this
Section 3.3.
3.4. Construction Force Majeure Events. If a Construction Force
Majeure Event that results in, or could reasonably be expected to result in, a
Force Majeure Loss (including any losses that result from a Construction Force
Majeure Event that prevents, or could reasonably be
13
expected to prevent, the Construction Agent from completing Construction prior
to the Scheduled Construction Termination Date) occurs, the Construction Agent
shall promptly provide the Lessor with written notice thereof within ten (10)
Business Days of the Construction Agent's knowledge of the occurrence thereof
(the "Construction Force Majeure Declaration"). Upon receipt of the Construction
Force Majeure Declaration, Lessor and the Construction Agent shall consult with
each other as to what steps, if any, are to be taken to remediate such
Construction Force Majeure Event, including consulting as to the appropriateness
of an extension of the Scheduled Construction Termination Date. The Construction
Agent shall take all reasonable and practical steps to minimize the disruption
of the construction process and all steps reasonably necessary to prevent
further damage arising from such Construction Force Majeure Event. The
Construction Agent shall be entitled to reimbursement from Lessor for any costs
directly related to minimizing the disruption and to preventing further damage
of such Construction Force Majeure Event through the proceeds of Fundings
pursuant to, and subject to the terms and conditions of, the Master Agreement.
The Construction Agent shall, within thirty (30) days of the delivery of the
Construction Force Majeure Declaration, submit to the Lessor a budget detailing
the costs that would be incurred in remediating such Construction Force Majeure
Event and a schedule for effecting the same. The Construction Agent will
commence such remediation only upon receipt of written authorization from the
Lessor to do so, which authorization (or denial thereof) shall be given by
written notice to Construction Agent not later than fifteen (15) Business Days
after Lessor's receipt of the budget referred to in the preceding sentence. The
Lessor in its sole discretion may elect to continue Construction and make
Advances for such remediation or terminate this Agreement with respect to the
affected Leased Property. If the Lessor elects to terminate this Agreement with
respect to the affected Leased Property, subject to Construction Agent's right
to purchase such Leased Property in accordance with Section 5.5 hereof, the
Construction Agent shall within thirty (30) days of receipt of written notice of
termination return the affected Leased Property to the Lessor in accordance with
the procedures set forth in Section 5.6 and pay to the Lessor the Construction
Failure Payment (subject to the last sentence of Section 3.2), in which event,
Section 5.6 shall be applicable, or, if the Construction Agent exercises the
Construction Default Remarketing Option, Section 5.7 shall be applicable.
In the event the Lessor elects to continue Construction after receipt
of a Construction Force Majeure Declaration, the Lessor shall make available to
the Construction Agent, so long as no Construction Agency Event of Default shall
have occurred and be continuing, all insurance proceeds payable to the Lessor
with respect to such event to the extent necessary to remediate such event.
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ARTICLE IV
PAYMENT OF FUNDS
4.1. Funding of Property Acquisition Costs and Property Buildings
Costs. (a) In connection with the acquisition or lease of any Land and during
the course of the construction of the Buildings on any Land, the Construction
Agent may request that the Lessor advance funds for the payment of Construction
Costs, and the Lessor will comply with such request to the extent provided for
under, and subject to the conditions, restrictions and limitations contained in,
the Master Agreement and the other Operative Documents.
(b) The proceeds of any funds made available to the Lessor to pay
Construction Costs shall be made available to the Construction Agent in
accordance with the Funding Request relating thereto and the terms of the Master
Agreement. The Construction Agent will use such proceeds only to pay the
acquisition, transaction and closing costs or improvement costs for Leased
Properties set forth in the Funding Request relating to such funds.
ARTICLE V
CONSTRUCTION AGENCY EVENTS OF DEFAULT
5.1. Construction Agency Events of Default. If any one or more of
the following events (each a "Construction Agency Event of Default") shall occur
and be continuing:
(a) the Construction Agent fails to apply any funds paid
by, or on behalf of, the Lessor to the Construction Agent for
Construction Costs to the payment of Construction Costs or improvements
costs for such Leased Property;
(b) subject to Construction Force Majeure Events, the
Construction Commencement Date with respect to any Leased Property
shall fail to occur for any reason on or prior to the date that is one
year after the Closing Date with respect to such Leased Property;
(c) the Completion Date with respect to any Leased
Property shall fail to occur for any reason on or prior to the earlier
of the Funding Termination Date and the Scheduled Construction
Termination Date for such Leased Property;
(d) any Event of Default shall have occurred and be
continuing; or
(e) the Construction Agent shall fail to observe or
perform in any material respect any term, covenant or condition of this
Agreement (except those specified in clauses (a) through (d) above),
and such failure shall remain uncured for a period of thirty
15
(30) days after notice thereof to the Construction Agent, except that
such thirty (30) day period shall be automatically extended for such
additional period of time as is reasonably necessary to cure such
default, if such default is capable of being cured but cannot, with
reasonable diligence, be cured within such thirty (30) day period,
provided that (i) the Construction Agent is in the process of
diligently curing such default and (ii) such period shall not be
extended for more than 90 days;
then, in any such event, the Lessor may, in addition to the other rights and
remedies provided for in this Article (but subject to the last sentence of
Section 3.2), immediately terminate this Agreement as to any Leased Property or
Properties or all of the Leased Properties, separately, successively or
concurrently (all in Lessor's sole discretion) by giving the Construction Agent
written notice of such termination, and upon the giving of such notice, this
Agreement shall terminate as to such Leased Property or Properties or all of the
Leased Properties (as the case may be) and all rights of the Construction Agent
and, subject to the terms of the Operative Documents, all obligations of the
Lessor under this Agreement with respect to such Leased Property or Properties
or all of the Leased Properties (as the case may be) shall cease. The
Construction Agent shall pay upon demand all reasonable costs, expenses, losses,
expenditures and damages (including, without limitation, attorneys' fees and
disbursements) actually incurred by or on behalf of the Lessor in connection
with any Construction Agency Event of Default.
5.2. Damages. The termination of this Agreement pursuant to Section
5.1 shall in no event relieve the Construction Agent of its liability and
obligations hereunder, all of which shall survive any such termination.
5.3. Remedies; Remedies Cumulative. (a) If a Construction Agency
Event of Default shall have occurred and be continuing under Section 5.1(b),
5.1(c), 5.1(d) (other than an Event of Default under paragraph (f) or (g) of
Article XII of the Lease or an Event of Default under paragraph (l) of Article
XII of the Lease if such event occurs as a result of a hostile takeover) or
5.1(e) (other than as a result of Construction Agent's fraudulent or illegal
acts, misapplication of funds or willful misconduct), then, in each case, the
Lessor shall have all rights and remedies available under the Operative
Documents or available at law, equity or otherwise. Lessor shall have the right
to terminate this Agreement by giving Construction Agent written notice of such
termination, and upon the giving of such notice, all rights and all obligations
of the Construction Agent under this Agreement shall cease, except for such
rights and obligations as by their terms are to continue beyond such
termination, including Section 5.6(f) hereof and Lessor shall have the right to
require Construction Agent to pay immediately upon receipt of notice from Lessor
the Construction Failure Payment for all of the Construction Land Interests;
provided that the Construction Agent has the option to purchase the Leased
Property in accordance with Section 5.5 hereof and the Construction Agent shall
have the option to cause the Leased Property to be remarketed in accordance with
Section 5.7 hereof.
16
In the event Construction Agent does not purchase the Leased Property
pursuant to the terms hereof or the Construction Agent does not cause the Leased
Property to be remarketed in accordance with Section 5.7 hereof, the related
Lessee(s) shall return the Leased Property to Lessor within ten (10) Business
Days in accordance with Section 5.6 hereof and, subject to the last sentence of
Section 3.2, Lessor shall have the right to sell the Leased Property to an
unaffiliated third party and to require Construction Agent to pay to Lessor,
immediately upon receipt of the termination notice, cash in an amount equal to
the Construction Failure Payment for all of the Construction Land Interests. The
proceeds derived from any such sale, net of all sale costs, closing costs and
carrying costs (including, without limitation, amounts expended by the Agent or
any Funding Party to insure, protect, maintain or operate the Leased Property,
sales, transfer and real property taxes, brokers' fees, legal fees, the
insurance costs, interest and Yield, and survey costs), shall be distributed
first, to Lessor in the amount of the difference between the Permitted Lease
Balance and the Construction Failure Payment, if any, received by the Lessor,
second, to the extent the Construction Agent has paid to the Lessor the
Construction Failure Payment, to the Construction Agent to reimburse it to the
extent of its payment of the Construction Failure Payment, and third, to the
Lessor.
(b) If a Construction Agency Event of Default shall have occurred
and be continuing under Sections 5.1(a), 5.1(d) (as the result of an Event of
Default under paragraph (f) of Article XII of the Lease) or 5.1(e) (as a result
of the Construction Agent's fraudulent or illegal acts, misapplication of funds
or willful misconduct), Lessor shall have the right to terminate this Agreement
by giving Construction Agent written notice of such termination, and upon the
giving of such notice, all rights and all obligations of the Construction Agent
under this Agreement shall cease, except for such rights and obligations as by
their terms are to continue beyond such termination, including Section 5.6(f)
hereof and Lessor shall have the right to require Construction Agent to pay
immediately upon receipt of notice from Lessor the sum of (i) the Permitted
Lease Balance then outstanding and (ii) an amount equal to all insurance
proceeds paid to Construction Agent following the occurrence of any Construction
Force Majeure Event which were not applied by the Construction Agent or are not
required to reimburse the Construction Agent for Construction Costs incurred in
connection with such Construction Force Majeure Event, to uses permitted by this
Agreement (and which are not otherwise included in clause (i) of this sentence).
In addition, but subject to the Construction Agent's purchase right under
Section 5.5 and the Construction Agent's right to remarket pursuant to Section
5.7, the Lessor may satisfy the foregoing obligation by a sale of the Leased
Property and the proceeds derived from any such sale, net of all sale costs,
closing costs and carrying costs (including, without limitation, amounts
expended by the Agent or any Funding Party to insure, protect, maintain or
operate the Leased Property, sales, transfer and real property taxes, brokers'
fees, legal fees, the insurance costs, interest and Yield, and survey costs),
shall be distributed first, to Lessor in the amount of the Permitted Lease
Balance to the extent not previously paid by the Construction Agent, second, to
the extent the Construction Agent has paid to the Lessor the Permitted Lease
Balance, to the Construction Agent to reimburse it to the extent of its payment
of the Permitted Lease Balance, but if no such payment was made, to the Lessor,
and third to the Lessor. The Lessor shall have
17
all the rights and remedies afforded Lessor by Applicable Law and the Operative
Documents. Upon payment to Lessor of the Lease Balance and any other amounts
owing hereunder, Lessor shall convey the Leased Property to Construction Agent
as though Construction Agent had exercised the purchase option under Section 5.5
hereof. If the Construction Agent does not purchase the Property or exercise the
Construction Default Remarketing Option pursuant to Section 5.7, it shall return
the Leased Property to the Lessor within ten (10) Business Days of the
declaration of the Construction Agency Event of Default in accordance with
Section 5.6 hereof.
(c) If a Construction Agency Event of Default shall have occurred
and be continuing under Section 5.1(d) (as the result of an Event of Default
under paragraph (l) of Article VII of the Lease if such event occurs as a result
of a hostile takeover), then the Lessor shall have the right to terminate this
Agreement by giving the Construction Agent written notice of such termination,
and upon the giving of such notice, all rights and all obligations of the
Construction Agent under this Agreement shall cease, except for such rights and
obligations as by their terms are to continue beyond such termination, including
Section 5.6(f) hereof, and Lessor shall have the right to require Construction
Agent to return the Leased Property in accordance with Section 5.6 hereof,
provided that the Construction Agent shall have no obligation to pay the
Construction Failure Payment.
(d) No failure to exercise and no delay in exercising, on the part
of the Lessor any right, remedy, power or privilege under this Agreement or
under the other Operative Documents shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege under
this Agreement preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided in this Agreement and in the other Operative Documents are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
5.4. Limitation on Construction Agent's Recourse Liability. Subject
to the last sentence of this Section 5.4 and the last sentence of Section 3.2,
notwithstanding anything contained herein or in any other Operative Document to
the contrary, upon the occurrence and during the continuance of a Construction
Agency Event of Default with respect to any Leased Property described in Section
5.1(b), 5.1(c), 5.1(d) (other than an Event of Default under paragraph (f) or
(g) of Article XII of the Lease) or 5.1(e), the aggregate maximum recourse
liability of the Construction Agent with respect to such default to the Lessor
or any Person claiming by, through or under the Lessor under the Operative
Documents, shall be limited to the Construction Failure Payment for such Leased
Property. The Construction Agent nonetheless acknowledges and agrees that (i)
the Lessor shall be entitled to recover from the applicable Leased Property
(including through any reletting and/or sale of such Leased Property or any
portion thereof) the entire outstanding Permitted Lease Balance of such Leased
Property (and, to the extent sales proceeds exceed the Permitted Lease Balance,
amounts in excess of the Permitted Lease Balance as provided in Section 5.3(a)
and (b) and Section 5.7(g)), all accrued and unpaid
18
interest, accrued Yield and other amounts then due and owing to the Lessor under
the Operative Documents and all other costs and expenses of the Lessor incurred
in connection with such Leased Property (including without limitation, any costs
incurred in connection with the construction of the Building(s) and other
improvements and/or any reletting or sale of such Leased Property or any portion
thereof) from and after the date of such return and (ii) the foregoing recourse
limitations are exclusive of any amounts due and owing under Article III hereof.
If a Construction Agency Event of Default occurs due to the fraud,
misapplication of funds, illegal acts or wilful misconduct on the part of the
Construction Agent or any event described in paragraph (f) or (g) of Article XII
of the Lease, the Construction Agent shall be obligated to pay the Permitted
Lease Balance as set forth herein.
5.5. Construction Agent's Right to Purchase. If a Construction
Agency Event of Default hereunder relates only to a specific Leased Property or
specific Leased Properties but not all Leased Properties, the Construction Agent
shall have the right, at its option, to cure such Construction Agency Event of
Default by purchasing (a "Construction Purchase") such affected Leased Property
or Properties for the Leased Property Balance(s) therefor from the Lessor within
five (5) Business Days of the delivery of the notice of termination referred to
in Section 5.3 (a) or (b) in accordance with the terms and subject to the
conditions, restrictions and limitations of Section 14.5 of the Lease, in which
case no Construction Agency Event of Default shall be deemed to have occurred
hereunder for the purposes of the other Operative Documents.
5.6. Construction Return Procedures. In the case of any return of
any Leased Property to the Lessor pursuant to Section 3.4 or Article V hereof
(other than returns pursuant to Section 5.7 hereof)(a "Construction Return"),
the Construction Agent shall, at its cost and expense, do each of the following
on or prior to the return date specified by the Lessor in a written notice to
the Construction Agent given at least ten (10) Business Days prior thereto:
(a) the Construction Agent shall, on or prior to the return date,
execute and deliver to the Lessor (or to the Lessor's designee): (i) a deed with
respect to all of the interest of the Lessee and the Construction Agent in the
Leased Property containing representations and covenants of grantor to the
Lessor (or such other Person) solely regarding the absence of Liens (other than
Lessor Liens and the Liens of the Operative Documents (other than Liens in favor
of the Lessee)), (ii) an agreement granting easements and rights of way to such
Leased Property as reasonably deemed necessary by the Lessor, (iii) a ▇▇▇▇ of
sale without warranty (except as to the absence of liens other than Lessor
Liens) with respect to all of the interest of the Lessee and the Construction
Agent in all personalty and equipment financed by the Funding Parties and (iv)
an assignment of such Construction Agent's entire interest in such Leased
Property (which shall include an assignment of all such Construction Agent's
right, title and interest in and to all awards, compensation and insurance
proceeds payable in connection with any Casualty, Condemnation or Construction
Force Majeure Event affecting such Leased Property and an assignment of leases
of such Leased Property), in the case of the documents referred to in clauses
19
(i), (ii) and (iv) in recordable form and otherwise in conformity with local
custom and free and clear of any Liens other than Lessor Liens.
(b) the Construction Agent shall, on the construction return date,
pay over to the Agent (as assignee of the Lessor) any awards, compensation and
insurance previously received by the Construction Agent in connection with such
Leased Property which have not been applied in connection with the Construction,
repair or maintenance of the Leased Property except such amounts as may be
necessary to reimburse the Construction Agent for expenditures incurred in
connection with such Construction, repair or maintenance during the Construction
Term which have not been reimbursed;
(c) the Construction Agent shall execute and deliver to the Lessor
a statement of termination of this Agreement and each of the other Operative
Documents with respect to the affected Leased Property to be executed by the
Funding Parties and delivered to the Construction Agent;
(d) the Construction Agent shall, on or prior to the return date,
vacate the Leased Property and transfer possession of such Leased Property to
the Lessor or any Person designated by the Lessor, in each case by surrendering
the same into the possession of the Lessor or such Person, as the case may be,
free and clear of all Liens (other than Lessor Liens and the liens of the
Operative Documents) in compliance with all Applicable Law (including
Environmental Laws);
(e) on or prior to the return date, the Construction Agent shall
deliver to the Lessor or any Person designated by the Lessor copies of all
Construction Documents, permits, licenses, books and records regarding the
maintenance of such Leased Property and the Construction Agent's interest in
such Leased Property, and a current copy of the Plans and Specifications; and
(f) the Construction Agent shall take all actions reasonably
requested by the Lessor to fully assign to the Lessor all of its rights and
claims in, to and under, all of the Construction Documents, and all permits and
other governmental authorizations related to such Leased Property or the
Construction.
5.7. Option to Remarket. Notwithstanding any provisions of this
Agreement and the Operative Documents to the contrary and subject to the
fulfillment of each of the conditions set forth in this Section 5.7, the
Construction Agent shall have the option to remarket the Leased Property with
respect to which a Construction Agency Event of Default has occurred for the
Lessor or with respect to which the Lessee shall be required to pay the
Construction Failure Payment pursuant to Section 3.4 (the "Construction Default
Remarketing Option"). The Construction Agent's effective exercise and
consummation of the Construction Default Remarketing Option shall be subject to
the due and timely fulfillment of each of the following provisions, the failure
of any of which, unless waived in writing by the Lessor and the Lenders,
20
shall render the Construction Default Remarketing Option and the Construction
Agent's exercise thereof null and void, in which event, the Construction Agent
shall not have any rights under this Section 5.7.
(a) Not later than five Business Days after Lessor's service of
the notice of termination referred to in Section 5.3(a) or (b) or the Lessor's
denial of authorization to remediate any Construction Force Majeure Event under
Section 3.4, the Construction Agent shall give to the Lessor and the Agent
written notice of the Construction Agent's exercise of the Construction Default
Remarketing Option. The date of such notice shall be the "CDRO Notice Date";
(b) Not later than thirty (30) days after Lessor's service of the
notice of termination referred to in Section 5.3(a) or (b) or the Lessor's
denial of authorization to remediate any Construction Force Majeure Event under
Section 3.4, the Construction Agent shall deliver to the Lessor and the Agent an
environmental assessment of such Leased Property dated not earlier than
forty-five (45) days prior to the date of delivery thereof. Such environmental
assessment shall be prepared by an environmental consultant selected by the
Required Funding Parties, shall be in form, detail and substance reasonably
satisfactory to the Required Funding Parties, and shall otherwise indicate the
environmental condition of such Leased Property to be the same as described in
the related Environmental Audit.
(c) The Construction Agent shall promptly provide any maintenance
records relating to such Leased Property to the Lessor, the Agent and any
potential purchaser upon request, and shall otherwise do all things necessary to
deliver possession of such Leased Property to the potential purchaser. The
Construction Agent shall allow the Lessor, the Agent and any potential purchaser
access to any Leased Property for the purpose of inspecting the same.
(d) On the ninetieth (90th) day (such date, or such later date as
the Lessor may specify in writing, being the "CDRO Closing Date") after Lessor's
service of the notice of termination referred to in Section 5.3(a) or (b) or the
Lessor's denial of authorization to remediate any Construction Force Majeure
Event under Section 3.4, the Construction Agent shall surrender such Leased
Property in accordance with Section 5.9 hereof.
(e) In connection with any such sale of the Leased Property, the
Construction Agent shall provide to the purchaser all customary "seller's"
indemnities (taking into account the location and nature of the Leased
Property), representations and warranties regarding title, absence of Liens
(except Lessor Liens) and the condition of the Leased Property, including,
without limitation, an environmental indemnity. The Construction Agent shall
fulfill all of the requirements set forth in clause (b) of Section 14.5 of the
Lease (mutatis mutandis, as if Construction Agent were a Lessee, purchasing the
Leased Property in accordance with the provisions of Section 14.1 of the Lease),
and such requirements are incorporated herein by
21
reference. As to the Lessor, any such sale shall be made on an "as is, with all
faults" basis without representation or warranty by the Lessor, other than the
absence of Lessor Liens.
(f) In connection with any such sale of such Leased Property, the
Construction Agent shall pay from the proceeds of remarketing, all prorations,
credits, costs and expenses of the sale of the Leased Property, whether incurred
by the Lessor, any Lender, the Agent or the Construction Agent, including
without limitation, the cost of all title insurance, survey, environmental
report, appraisal, transfer taxes, the Lessor's and the Agent's attorneys' fees,
the Construction Agent's attorneys' fees, commissions, escrow fees, recording
fees, and all applicable documentary and other transfer taxes.
(g) Subject to the last sentence of Section 3.2, the Construction
Agent shall pay to the Agent immediately following the delivery of the
termination notice pursuant to Section 5.3(a) or (b) or the Lessor's denial of
authorization to remediate any Construction Force Majeure Event under Section
3.4, (or to such other Person as Agent shall notify Construction Agent in
writing, or in the case of Supplemental Rent, to the Person entitled thereto) an
amount equal to (i) in the case of the exercise of remedies under Section 5.3(a)
or a payment due under Section 3.4, the Construction Failure Payment, or (ii) in
the case of the exercise of remedies under Section 5.3(b), the Permitted Lease
Balance, in the type of funds specified in Section 3.3 of the Lease. If the
Construction Agent has exercised the Construction Default Remarketing Option,
the following additional provisions shall apply: During the period commencing on
the CDRO Notice Date, the Construction Agent shall, as nonexclusive agent for
the Lessor, use commercially reasonable efforts to sell the Lessor's interest in
the Leased Property and will attempt to obtain the highest purchase price
therefor. All such marketing of the Leased Property shall be paid from the
proceeds of remarketing. The Construction Agent promptly shall submit all bids
to the Lessor and the Agent and the Lessor and the Agent will have the right to
review the same and the right to submit any one or more bids. All bids shall be
on an all-cash basis. In no event shall such bidder be the Construction Agent or
any Subsidiary or Affiliate of the Construction Agent. The written offer must
specify the CDRO Closing Date as the closing date. If, and only if, the selling
price (net of closing costs and prorations, as reasonably estimated by the
Agent)(the "Construction Offer Price") is less than the Lease Balance at such
time, then the Lessor or the Agent may, in its sole and absolute discretion, by
notice to the Construction Agent, reject such offer to purchase, in which event
the parties will proceed according to the provisions of Section 5.8 hereof. If
neither the Lessor nor the Agent rejects such purchase offer as provided above,
the closing of such purchase of the Leased Property by such purchaser shall
occur on the CDRO Closing Date, contemporaneously with the Construction Agent's
surrender of the Leased Property in accordance with Section 5.9 hereof, and the
gross proceeds of the sale (after deduction, however, for any marketing, closing
or other costs, prorations or commissions) shall be paid directly to the Agent
(or the Lessor if the Funded Amounts have been fully paid). The Agent shall
distribute the proceeds derived from any such sale first, to the Lessor in an
amount of the difference between (i) the Permitted Lease Balance and (ii) the
amount, if any, received by the Agent pursuant to clause (i) of the first
sentence of this Section 5.7(g), second, to the extent
22
the Construction Agent has paid the amount due to the Agent in pursuant to
clause (i) of the first sentence of this Section 5.7(g), to the Construction
Agent to reimburse it to the extent of its payment of such amount, and third, to
the Lessor. The Construction Agent shall not have the right, power or authority
to bind the Lessor in connection with any proposed sale of the Leased Property.
5.8. Rejection of Sale. Notwithstanding anything contained herein
to the contrary, if the Lessor or the Agent rejects the purchase offer for any
Leased Property as provided in Section 5.7, then the Agent shall have an
appraisal done of the Leased Property by an independent third party appraiser
selected by the Agent, which appraiser shall determine the Fair Market Sales
Value of the Leased Property in the condition in which such Leased Property
exists at such time (the "Construction Appraised Value"). If (A) the
Construction Appraised Value shall be less than the Construction Offer Price or
(B) if the Construction Appraised Value shall be equal to or greater than the
Construction Offer Price, and the Lessor in its sole discretion so elects, the
Leased Property shall be sold pursuant to Section 5.7(g), and the proceeds of
such sale shall be distributed, in accordance with Section 5.7. If the
Construction Appraised Value shall be equal to or greater than the Construction
Offer Price and the Lessor shall not have elected to sell the Leased Property
pursuant to Section 5.7(g), (a) the Lessor shall refund to the Lessee the amount
by which (i) the amount paid pursuant to clause(i) of the first sentence of
Section 5.7(g) exceeds (ii) the amount by which (A) the Permitted Lease Balance
exceeds (B) the Construction Appraised Value, and (b) the Lessor shall retain
title to the Leased Property and shall retain all proceeds with respect to the
Leased Property, free and clear of all claims of the Lessee and the Construction
Agent.
5.9. Return of Leased Property. If the Lessor retains title to any
Leased Property pursuant to Section 5.8 hereof, then the Construction Agent
shall, on the CDRO Closing Date for such Leased Property (or such later date on
which the Lessor shall elect not to sell the Leased Property pursuant to Section
5.7), and at its own expense, return possession of such Leased Property to the
Lessor for retention by the Lessor and shall do all things required under
Section 5.6 or, if the Construction Agent properly exercises the Construction
Default Remarketing Option and fulfills all of the conditions of Section 5.7
hereof and neither the Lessor nor the Agent rejects such purchase offer pursuant
to Section 5.7, then the Construction Agent shall, on such CDRO Closing Date,
and at its own cost, transfer possession of the Leased Property to the
independent purchaser thereof, in each case by surrendering the same into the
possession of the Lessor or such purchaser, as the case may be, free and clear
of all Liens other than Lessor Liens, in as good condition as it was on the CDRO
Notice Date, and in compliance in all material respects with Applicable Law and
deliver to the independent purchaser thereof the documents described in clauses
(i) through (iii) of Section 5.6(a). In the case of a sale under Section 5.7,
the Construction Agent shall, on and within a reasonable time before and after
the CDRO Closing Date, cooperate with the Lessor and the independent purchaser
of such Leased Property in order to facilitate the ownership and operation by
such purchaser of such Leased Property after the CDRO Closing Date, which
cooperation shall include the following, all of which the
23
Construction Agent shall do on or before the CDRO Closing Date or as soon
thereafter as is reasonably practicable: providing all books and records,
including copies of all Construction Documents, regarding the construction,
maintenance and ownership of such Leased Property and all know-how, data and
technical information relating thereto, providing a copy of the Plans and
Specifications, granting or assigning all permits and licenses (to the extent
assignable) necessary for the construction, operation and maintenance of such
Leased Property, and cooperating in seeking and obtaining all necessary
Governmental Action and taking all action necessary to fully assign and transfer
all of its rights, claims and causes of action under all of the Construction
Documents (including, without limitation, obtaining all necessary consents to
such assignments). The obligations of the Construction Agent under this Section
5.9 shall survive the expiration or termination of this Agreement.
ARTICLE VI
NO CONSTRUCTION AGENCY FEE
6.1. Lease as Fulfillment of Lessor's Obligations. All obligations,
duties and requirements imposed upon or allocated to the Construction Agent
shall be performed by the Construction Agent at the Construction's Agent's sole
cost and expense, and the Construction Agent will not be entitled to, and the
Lessor shall not have any obligation to pay, any agency fee or other fee or
compensation, and the Construction Agent shall not be entitled to, and the
Lessor shall not have any obligation to make or pay, any reimbursement therefor,
it being understood that this Agreement is being entered into as consideration
for and as an inducement to the Lessor entering into the Lease and the other
Operative Documents.
ARTICLE VII
LESSOR'S RIGHTS; CONSTRUCTION AGENT'S RIGHTS
7.1. Exercise of the Lessor's Rights. The Construction Agent hereby
acknowledges and agrees that the rights and powers of the Lessor under this
Agreement have been assigned to, and may be exercised by, the Agent.
7.2. Lessor's Right to Cure Construction Agent's Defaults. The
Lessor, without waiving or releasing any obligation or Construction Agency Event
of Default, may, upon prior written notice to the Construction Agent (but shall
be under no obligation to), remedy any Construction Agency Event of Default for
the account of and at the sole cost and expense of the Construction Agent. All
reasonable out of pocket costs and expenses so incurred (including actual and
reasonable fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by the
Lessor, shall be paid by the Construction Agent to the Lessor on demand.
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ARTICLE VIII
MISCELLANEOUS
8.1. Documentary Conventions. The Documentary Conventions shall
apply to this Agreement.
8.2. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Lessor, the Construction Agent and their
respective legal representatives, successors and permitted assigns. The
Construction Agent shall not assign its rights or obligations hereunder without
the prior written consent of the Lessor and the Agent.
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
CHOICEPOINT INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Treasurer
---------------------------------
S-1
ATLANTIC FINANCIAL GROUP, LTD.
By: Atlantic Financial Managers,
Inc., its General Partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Title: President
---------------------------------
S-2
EXHIBIT A
Supplement to Construction Agency Agreement
SUPPLEMENT to Construction Agency Agreement, dated as of
______________, 200_, between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership (the "Lessor"), and CHOICEPOINT INC., a Georgia corporation (in its
capacity as construction agent, the "Construction Agent"). Capitalized terms
used but not otherwise defined herein shall have the meanings given them in the
Construction Agency Agreement.
The Lessor and the Construction Agent are parties to that certain
Construction Agency Agreement, dated as of August 29, 2001 (as amended,
supplemented or otherwise modified, the "Construction Agency Agreement"),
pursuant to which (i) the Lessor has appointed the Construction Agent as its
sole and exclusive agent in connection with the identification and acquisition
of Land and construction of the Buildings in accordance with the Plans and
Specifications, and (ii) the Construction Agent has agreed, for the benefit of
the Lessor, to cause the construction of the Buildings to be completed in
accordance with the Plans and Specifications.
Subject to the terms and conditions of the Construction Agency
Agreement, the Lessor and the Construction Agent desire that the terms of the
Construction Agency Agreement apply to the Land described in Schedule 1 and wish
to execute this Supplement to provide therefor.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:
1. The Construction Agent agrees to act as Construction Agent and
to perform its obligations under the Construction Agency Agreement in connection
with the completion of construction of the Building on the Land described in
Schedule 1 in accordance with the Plans and Specifications for such Land. The
Construction Agent hereby represents and warrants to Lessor that the
Construction Agent has heretofore delivered to Lessor a true, correct and
complete copy of the Plans and Specifications for the Building on the Land
described in Schedule 1 or, if not available on the date hereof, will deliver
such Plans and Specifications as soon as available.
2. Each of the Lessor and the Construction Agent acknowledges and
agrees that the development of the Land described in Schedule 1 and the
construction of the Buildings thereon shall be governed by the terms of the
Construction Agency Agreement.
A-1
3. The anticipated construction budget relating to the
construction and development of the Building on the Land described in Schedule 1
is $__________. The acquisition cost of the Land described in Schedule 1 is
$___________.
4. This Supplement shall, upon its execution and delivery,
constitute a part of the Construction Agency Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
CHOICEPOINT INC.
By
---------------------------------------
Name:
Title:
ATLANTIC FINANCIAL GROUP, LTD.
By: Atlantic Financial Managers,
Inc., its General Partner
By
---------------------------------------
Name:
Title:
A-2
Schedule 1 to Supplement
Description of Land Interest