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EXHIBIT 10.4
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AGREEMENT FOR FACILITIES LEASE
between
BRAZOS AUTOMOTIVE PROPERTIES, L.P.
and
MONRO LEASING, LLC
Dated as of September 15, 1998
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THIS AGREEMENT FOR FACILITIES LEASE HAS BEEN ASSIGNED
AS SECURITY FOR INDEBTEDNESS
OF BRAZOS AUTOMOTIVE PROPERTIES. L.P.
SEE SECTION 11.12.
This Agreement for Facilities Lease has been manually executed in 10
counterparts, numbered consecutively from 1 through 10, of which this is No. .
To the extent, if any, that this Agreement for Facilities Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect in any jurisdiction), no security interest
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in this Agreement for Facilities Lease may be created or perfected through the
transfer or possession of any counterpart other than the original counterpart
which shall be the counterpart identified as counterpart No. 1.
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TABLE OF CONTENTS
AGREEMENT FOR FACILITIES LEASE
Page
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ARTICLE I DEFINITIONS..........................................................................................1
Section 1.1. Defined Terms..............................................................................1
Section 1.2. Forms......................................................................................6
Section 1.3. Recitals, Table of Contents, Titles, and Headings..........................................6
Section 1.4. Interpretation.............................................................................6
ARTICLE II APPOINTMENT OF LESSEE.................................................................................7
Section 2.1. Appointment and Duties.....................................................................7
Section 2.2. Termination of Appointment and Duties......................................................7
Section 2.3. Lease of Facilities........................................................................7
Section 2.4. Powers of Lessee...........................................................................8
ARTICLE III ADVANCES.............................................................................................9
Section 3.1. Agreement to Make Advances.................................................................9
Section 3.2. Procedure for Advances.....................................................................9
Section 3.3. Determination of Amounts of Advances.......................................................9
Section 3.4. Partial Advances..........................................................................10
Section 3.5. Use of Proceeds...........................................................................10
Section 3.6. No Obligation to Advance..................................................................10
Section 3.7. Brazos Equity.............................................................................10
Section 3.8. Brazos Covenants..........................................................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LESSEE.............................................................10
Section 4.1. Corporate Matters.........................................................................11
Section 4.2. Authorization; Binding Agreement..........................................................11
Section 4.3. Power and Authority.......................................................................11
Section 4.4. Consents, Approvals and Authorizations....................................................11
Section 4.5. Financial Statements......................................................................11
Section 4.6. Changes...................................................................................11
Section 4.7. Litigation................................................................................12
Section 4.8. No Default................................................................................12
Section 4.9. Facility and FF&E Liens...................................................................12
Section 4.10. Availability of Utilities................................................................12
Section 4.11. Brokerage................................................................................12
Section 4.12. Suitability of Facility and FF&E.........................................................12
Section 4.13. Acquired Facilities Lease................................................................12
Section 4.14. Accuracy of Value........................................................................12
(i)
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ARTICLE V AFFIRMATIVE COVENANTS.................................................................................13
Section 5.1. Construction..............................................................................13
Section 5.2. Performance under Other Agreements........................................................13
Section 5.3. Expenses..................................................................................13
Section 5.4. Certificates; Other Information...........................................................14
Section 5.5. Conduct of Business and Maintenance of Existence..........................................14
Section 5.6. Notices...................................................................................14
Section 5.7. Legal Requirements. ......................................................................15
Section 5.8. Leasing of Facilities.....................................................................15
Section 5.9. Filings...................................................................................15
Section 5.10. Changes in Plans.........................................................................15
Section 5.11. Notification of Development of Facilities................................................15
ARTICLE VI CONDITIONS PRECEDENT TO THE INITIAL ADVANCE OR
ADDITIONAL ADVANCE WITH RESPECT TO A
FACILITY OR FF&E OR ADDITIONAL IMPROVEMENTS.................................................16
Section 6.1. Acquisition Documents.....................................................................16
Section 6.2. No Event of Default.......................................................................17
Section 6.3. Continuing Representations................................................................17
Section 6.4. Additional Matters........................................................................18
Section 6.5. Facilities Acquired in Brazos' Name.......................................................18
ARTICLE VII CONDITIONS PRECEDENT TO THE RECONCILIATION ADVANCE
WITH RESPECT TO A FACILITY OR FF&E.............................................................18
Section 7.1. Reconciliation Advance....................................................................18
ARTICLE VIII EVENTS OF DEFAULT..................................................................................18
Section 8.1. Events of Default.........................................................................18
Section 8.2. Rights Upon Default.......................................................................20
ARTICLE IX INDEMNITIES..........................................................................................21
Section 9.1. Indemnified Persons.......................................................................21
Section 9.2. Payments..................................................................................21
Section 9.3. Continuing Indemnification................................................................21
Section 9.4. Limitations...............................................................................22
Section 9.5. Litigation................................................................................22
ARTICLE X PERMITTED CONTESTS....................................................................................22
(ii)
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ARTICLE XI MISCELLANEOUS........................................................................................23
Section 11.1. Survival.................................................................................23
Section 11.2. Entire Agreement.........................................................................23
Section 11.3. Modifications............................................................................23
Section 11.4. GOVERNING LAW............................................................................23
Section 11.5. No Offsets...............................................................................23
Section 11.6. Non-Recourse.............................................................................25
Section 11.7. Notices..................................................................................25
Section 11.8. Fundamental Changes......................................................................26
Section 11.9. Usury....................................................................................26
Section 11.10. No Waivers..............................................................................27
Section 11.11. Brazos and Assignee Sole Beneficiaries..................................................27
Section 11.12. Sale or Assignment by Brazos............................................................27
Section 11.13. Rights Cumulative.......................................................................28
Section 11.14. Reassignment............................................................................28
Section 11.15. Severability............................................................................28
Section 11.16. Execution in Counterparts...............................................................28
Section 11.17. Confidentiality.........................................................................28
Section 11.18. Execution by Lessee.....................................................................28
(iii)
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(iv)
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Signature Page...................................................................................................29
LIST OF EXHIBITS
Exhibit A Form of Facilities Lease Agreement
Exhibit B Form of Initial Advance Certificate
Exhibit C Form of Reconciliation Certificate
Exhibit D Form of Additional Advance Certificate
Exhibit E Form of Local Counsel Opinion
Exhibit F Form of Request for Initial Advance
Schedule 4.13 List of Acquired Facilities Leases
(v)
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AGREEMENT FOR FACILITIES LEASE
THIS AGREEMENT FOR FACILITIES LEASE (this "AGREEMENT") is made and
entered into as of September 15, 1998, by and between BRAZOS AUTOMOTIVE
PROPERTIES, L.P., a Delaware Limited Partnership ("Brazos"), and MONRO LEASING,
LLC, a Delaware limited liability company ("LESSEE").
W I T N E S S E T H:
WHEREAS, Brazos may hereafter purchase or lease certain equipment and
construct or acquire fee or leasehold interests in certain equipment and/or
facilities; and
WHEREAS, on or after the date of this Agreement Brazos and Lessee
propose to enter into a Facilities Lease Agreement, providing for the lease or
sublease by Lessee of such equipment and facilities as may be acquired by Brazos
for lease or sublease to Lessee; and
WHEREAS, Brazos desires to appoint Lessee to act as agent for Brazos in
connection with the acquisition of equipment and with the acquisition and
construction of such facilities and in connection with all matters related to
such acquisition and construction, and Lessee wishes to accept such appointment.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Brazos and Lessee hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINED TERMS. For the purposes of this Agreement each of
the following terms shall have the meaning specified with respect thereto:
"ACQUIRED FACILITY LEASE" means each lease entered into by Brazos under
which a leasehold interest in a Facility or FF&E is being leased to Brazos by
the owner of such Facility or FF&E, including, without limitation, the leases
set forth on SCHEDULE 4.13 hereto.
"ACQUISITION COST" means, for any Facility or FF&E, the sum of (a) the
Initial Advance, (b) the Reconciliation Advance, if any, and (c) the Additional
Advance, if any, made pursuant to this Agreement with respect to such Facility
or FF&E.
"ADDITIONAL ADVANCE" means, with respect to any Additional
Improvements, the advance made by Brazos upon satisfaction of the applicable
conditions of ARTICLE VI hereof.
"ADDITIONAL ADVANCE CERTIFICATE" means the written certification of
Lessee to be delivered to Brazos and Agent which contains the information and
representations of Lessee as required by SECTION 6.1, and which is substantially
in the form of EXHIBIT "D" attached hereto.
"ADDITIONAL IMPROVEMENTS" means each capital improvement or other
addition or alteration to a Facility which is described in an Additional Advance
Certificate and each improvement, replacement or addition to FF&E, for the
purpose of making such improvement, addition, replacement or alteration part of
the Facility or FF&E which is approved by Agent.
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"AFFILIATE" means any other Person controlling, controlled by or under
direct or indirect common control with any Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract, or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"AGENT" means The Chase Manhattan Bank, a national banking association.
"AGREEMENT" means this Agreement for Facilities Lease, as the same may
be amended, restated, supplemented or otherwise modified in accordance with the
terms hereof from time to time.
"AGREEMENT FOR GROUND LEASE" means the Agreement for Ground Lease,
dated of even date herewith, between Brazos and Lessee, as the same may be
amended, restated, supplemented or otherwise modified in accordance with the
terms thereof.
"ASSIGNEE" means any lender or agent for a lender under the Credit
Agreement and each person, firm, corporation or other entity to which any part
of Brazos' interest under this Agreement or the Facilities Lease shall at the
time have been assigned, conditionally or otherwise, by Brazos, in accordance
with SECTION 11.12 of this Agreement.
"AVAILABLE COMMITMENT" means at any particular time, an amount equal to
the aggregate available commitment for the benefit of Brazos under the Credit
Agreement for the acquisition of equipment and for the construction and
acquisition of all Facilities and FF&E pursuant to this Agreement and for the
acquisition of Property pursuant to the Agreement for Ground Lease.
"BANKS" means a "Bank", as defined in the Credit Agreement.
"BASIC PLAN" means the architectural plans for the construction of a
Facility that are submitted by Lessee to Brazos and Agent in connection with the
development of a Facility and which are approved by Agent.
"BRAZOS" means Brazos Automotive Properties, L.P. or any successor or
successors to all of its rights and obligations hereunder.
"BUDGET" means the budget submitted by Lessee to Brazos and Agent in
connection with advances to be made under this Agreement and which is approved
by Agent.
"BUSINESS DAY" means a day other than a Saturday, Sunday, or other day
on which commercial banks in New York, New York, are authorized or required by
law to close.
"CHASE CREDIT AGREEMENT" means that certain Credit Agreement dated as
of September 15, 1998 executed among Guarantor, Agent, and the other financial
institutions from time to time party thereto, as the same may have been amended
and in effect on the date hereof.
"CONSTRUCTION AGREEMENT" means the Construction Agreement(s), if any,
to be entered into from time to time, between Lessee, acting on behalf of
Brazos, and General Contractor, providing for the construction or renovation of
the Facilities, as the same may be amended, supplemented, or modified from time
to time.
"CONSTRUCTION DOCUMENTS" means the collective reference to the
Construction Agreement(s), the Facility Plans, the lists of FF&E, the Permits
and all other agreements entered into by Lessee with respect to the
construction, equipping, furnishing and decorating of each of the Facilities.
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"CONSULTING PROFESSIONAL" means such architectural or engineering
consultant, if any, as Brazos or Agent may engage, at Lessee's reasonable
expense, to examine the FF&E, Facility Plans, changes in the Facility Plans and
cost breakdowns and estimates, and to make inspections of the substantially
completed construction.
"CONTRACTUAL OBLIGATIONS" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"CORPORATE CREDIT AGREEMENT" means the Chase Credit Agreement as the
same may hereafter be amended, amended and restated, renewed, extended or
otherwise modified or supplemented from time to time, together with any credit
agreement or similar instrument, agreement or document executed from time to
time in respect of any financing arrangement entered into to replace, or which
is in substitution for, the financing arrangement evidenced by the Chase Credit
Agreement.
"CREDIT AGREEMENT" means the Credit Agreement, dated of even date
herewith, by and among Brazos, the Agent and the Banks named therein for the
financing of the acquisition of Facilities and FF&E by Brazos in connection with
this Agreement as it may be amended, restated, modified or supplemented, from
time to time.
"CORPORATE CREDIT DOCUMENTS" means any and all notes, guarantees and
other loan documents executed pursuant to the Corporate Credit Agreement and any
document, instrument or other agreement entered in replacement or substitution
of such document or instrument.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.1 hereof.
"FACILITIES LEASE" means the Facilities Lease Agreement, dated of even
date herewith, by and between Brazos, as lessor, and Lessee, as lessee, as it
may be further amended, restated, modified or supplemented from time to time, in
accordance with the terms thereof, originally in the form of EXHIBIT "A"
attached hereto.
"FACILITY" means all improvements of whatever kind or character now or
hereafter located on, in or under or affixed to an individual Property, with the
prior approval of Agent, including, without limitation, any utilities, paving,
signage or lighting and all additions, replacements and subsequent replacements
thereof (including any Additional Improvements), together with the FF&E
installed in such Facility or other building, in which a fee or leasehold
interest has been or will be acquired by Brazos for the purpose of entering into
the Facilities Lease, but excluding all parcels of land on which such Facility
sits. Any reference to a particular Facility shall refer collectively to such
Facility and the Additional Improvements, if any, made to such Facility.
"FF&E" means the equipment and list of specific items to be acquired or
leased by Brazos with the prior approval of Agent with the proceeds of an
Initial Advance or an Additional Advance hereunder which will be installed in a
particular Facility or, with the prior written approval of the Agent, which may
be acquired for lease to Lessee without regard to its use in connection with a
specific Facility or Property, to be itemized and described in the respective
Initial Advance Certificate or Additional Advance Certificate and including all
additions, replacements and subsequent replacements of such items (including any
Additional Improvements).
"FACILITY COMPLETION DATE" means, with respect to any Facility, a date
no later than twenty four (24) months after Lessee leases the Property on which
such Facility is to be built.
"FACILITY LEASING RECORD" means an instrument evidencing the lease or
sublease of a Facility or FF&E under the Facilities Lease, as prepared and
executed by Brazos, as lessor or sublessor, and accepted and executed by Lessee,
as lessee or sublessee, substantially in the form of Exhibit B to the Facilities
Lease.
"FACILITY PLANS" means the particular Basic Plan selected by Lessee and
approved by Agent as the plans and specifications for the construction of a
particular Facility adapted to the particular Property so as to include plans
and
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specifications for the configuration and installation of driveways, curbs,
sidewalks, landscaping, signs, utility connections (whether on or off the
Property) and all fixtures and equipment necessary for construction, operation
and occupancy of that Facility, including such amendments, modifications and
supplements thereto as may from time to time be made by Lessee; provided that
any material deviation from the Basic Plan selected for that Facility shall be
made only with Agent's prior written consent, which consent shall not be
unreasonably withheld or delayed.
"FORCE MAJEURE DELAY" means any delay caused by conditions beyond the
reasonable control of Lessee, including, without limitation, acts of God or the
elements, fire, strikes, labor disputes, delays in delivery of or unavailability
of material and disruption of shipping; provided that no such delay shall have
the effect of extending the respective Facility Completion Date beyond one
hundred eighty (180) days.
"GENERAL CONTRACTOR" means Lessee, or, if other than Lessee, such other
contractor or contractors as may be engaged by Lessee from time to time, with
notice to Brazos.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government having jurisdiction over Agent, Brazos, Guarantor or Lessee, or
any of their respective properties.
"GUARANTOR" means Monro Muffler Brake, Inc., a New York corporation.
"GUARANTY" means the Guaranty, dated of even date herewith, by and
between Guarantor and Brazos, as it may be further amended, restated, modified
or supplemented, from time to time, in accordance with the terms thereof.
"INDEBTEDNESS" means, with respect to any Person, (a) indebtedness of
such Person for borrowed money; (b) obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (c) obligations of such
Person to pay the deferred purchase price of property or services; (d)
obligations of such Person as lessee under Capitalized Leases; (e) reimbursement
obligations in respect of bonds or letters of credit; (f) obligations of such
Person under direct or indirect guaranties in respect of, and obligations
(contingent or otherwise) of such Person to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness of
others of the kinds referred to in clauses (a) through (e) above; and (g)
indebtedness of others of the kinds referred to in clauses (a) through (f)
secured by any Lien on or in respect of any Property of such Person whether or
not assumed by such Person; provided, however, that all trade accounts payable
and accrued expenses incurred in the ordinary course of business of such Person
and not overdue shall be excluded from the foregoing.
"INDEMNIFIED PERSON" means any Person as defined in SECTION 9.1.
"INITIAL ADVANCE" means, with respect to any Facility or FF&E, the
advance made by Brazos upon satisfaction of the applicable conditions set forth
in ARTICLE VI hereof.
"INITIAL ADVANCE CERTIFICATE" means the written certification of Lessee
to be delivered to Brazos and Agent in connection with each purchase of a fee
interest, reimbursement of the advance of funds by Lessee for a fee interest or
each acquisition of a leasehold interest in a Facility or FF&E by Brazos through
Lessee, which contains the information and representations of Lessee as required
by SECTION 6.1, and which is substantially in the form of EXHIBIT "B" attached
hereto.
"LEGAL REQUIREMENTS" means all laws, judgments, decrees, ordinances and
regulations and any other governmental rules, orders and determinations and all
requirements having the force of law, now or hereafter enacted, made or issued,
whether or not presently contemplated, and all agreements, covenants, conditions
and restrictions, applicable to each Facility and FF&E and/or the ownership,
operation, or use thereof, including, without limitation, all requirements of
the Americans With Disabilities Act (P.L. 101-335) and environmental statutes,
compliance with which is required at any time from the date hereof until the
date such Facility and FF&E becomes subject to the terms and provisions of the
Facilities Lease, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to any Facility and FF&E, or the operation,
occupancy or use thereof.
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"LESSEE" means Monro Leasing, LLC, a Delaware limited liability
company.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same economic
effect as any of the foregoing).
"LIEN OF RECORD" means, with the exception of the Lien of a lender or a
lender's agent under a Credit Agreement and Permitted Exceptions, (i) any
mechanics' or materialmen's lien for which Lessee does not hold retainage or
trapped funds in amounts required by applicable law, (ii) any lien securing the
payment of taxes, assessments, or governmental charges and levies which are due,
payable and delinquent, (iii) any judgment lien, or (iv) any other filed,
recorded, or docketed matter (whether or not the same shall constitute a
Permitted Exception or be the subject of a Permitted Contest) which in the case
of any of the foregoing (a) is reasonably likely to result in a sale for
satisfaction of same, a loss, forfeiture, reversion of title, or right of
reentry with respect to any Facility, or (b) whether or not valid, is reasonably
likely to interfere with the due and timely payment of any sum payable or the
exercise of any rights or the performance of any of the duties or
responsibilities of Lessee under this Agreement.
"MAXIMUM RATE" means the rate specified in SECTION 11.9 hereof.
"MORTGAGEABLE FACILITIES LEASE" means a facilities lease presented by
Lessee for Brazos' execution which shall include the terms set forth herein or
if lacking any of the terms set forth below, shall have such terms and
characteristics as shall be required by Brazos and Agent, which terms and
characteristics shall include, without limitation, the following: (a) the
lessee's interest therein must be freely assignable, (b) have a remaining term
of at least twenty (20) years, (c) contain no provisions for percentage or
variable rent, (d) permit any lawful use, (e) have no provision for a security
deposit, (f) provide for the delivery to Brazos and Agent of copies of all
notices delivered under or pursuant to such facilities lease, (g) provide Brazos
and Agent written notice and the right to cure any defaults (whether monetary or
non-monetary in nature) within thirty (30) days after receipt of such notice
under such facilities lease, (h) prohibit any mortgages or other Liens on the
underlying fee unless an appropriate Subordination, Non-Disturbance Agreement is
obtained, (i) permit Brazos or Agent the right to invalidate any termination of
such facilities lease within thirty (30) days of the effective date of such
termination by notice given to the lessor thereunder of intention to cure, or to
foreclose and cure, all curable defects, and, in the event of any termination of
such facilities lease, the right to receive a new lease on the same provisions
and with the same expiration date of the original facilities lease, (j) provide
that insurance proceeds for damage to improvements and condemnation proceeds for
damage to leasehold interests or improvements shall be within the control of the
lessee under such facilities lease, and (k) be delivered with such estoppel
certificates from the lessor, recognition and attornment agreements, or
confirmation of customary mortgagee protection as are acceptable to Brazos and
Agent.
"PERMITS" means all consents, licenses and building permits required
for construction, completion, and operation of an individual Facility in
accordance with all Legal Requirements affecting the particular Facility,
including without limitation all Environmental Permits.
"PERMITTED CONTEST" means any good-faith contest permitted by and in
accordance with the terms of ARTICLE X.
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"PERMITTED EXCEPTIONS" means the following Liens and other matters
affecting the title of any Facility or FF&E, (a) Liens securing the payment of
taxes, assessments and governmental charges or levies, either not delinquent or
being contested by Lessee as a Permitted Contest; (b) zoning and planning
restrictions, subdivision and platting restrictions, easements, rights-of-way,
licenses, reservations, covenants, conditions, waivers, restrictions on the use
of the Facilities, minor encroachments or minor irregularities of title none of
which materially impairs or may materially impair the intended use of the
Facilities or FF&E by Lessee; (c) the lien created pursuant to the Credit
Agreement contemporaneously with each Initial Advance; (d) any mechanics' or
materialmen's lien for which Lessee holds retainage or trapped funds in amounts
required by and in accordance with applicable law; (e) outstanding mineral
interests; (f) Liens constituting Permitted Encumbrances under the Facilities
Lease; and (g) any other matters; provided that such other or additional matters
shall be approved in writing by Brazos and Agent, whose approvals shall not be
unreasonably withheld or delayed.
"PERSON" means an individual, partnership, corporation, business trust,
joint venture, joint stock company, trust, unincorporated association,
Governmental Authority or other entity of whatever nature.
"POTENTIAL DEFAULT" means any event which, but for the lapse of time,
or giving of notice, or both, would constitute an Event of Default.
"PROPERTY" means each individual parcel of land in which either a fee
interest has been or will be acquired by Brazos or a leasehold interest has been
or will be acquired by Brazos pursuant to a ground lease, in each case for the
operation of a Facility thereon, and the respective easements, rights and
appurtenances relating to such parcel of land, but excluding all improvements
thereon and all structures, equipment and materials affixed thereon or located
thereon, therein or thereunder.
"RECONCILIATION ADVANCE" means, with respect to any Facility or FF&E,
the advance made by Brazos pursuant to SECTION 7.1 upon reconciliation of the
Initial Advance or the Additional Advance made with respect to such Facility or
FF&E.
"RECONCILIATION CERTIFICATE" means the written certification of Lessee
to be delivered to Brazos and Agent which contains the information and
representations of Lessee as required by SECTION 7.1, and which is substantially
in the form of EXHIBIT "C" attached hereto.
"REQUEST FOR ADVANCE" means the document referred to in SECTIONS 6.1(B)
and 7.1(E) which shall be substantially in the form of attached EXHIBIT F.
"RESPONSIBLE OFFICER" means any President, Treasurer, Executive Vice
President or Senior Vice President of Guarantor or Lessee.
"REVISED FACILITY LEASING RECORD" means a Facility Leasing Record
delivered in connection with a Reconciliation Advance or Additional Advance.
"SPECIAL FLOOD HAZARD AREA" has the meaning given such term in the
Flood Disaster Protection Act of 1973, as amended by the National Flood
Insurance Reform Act of 1994.
"SUBSIDIARY" means with respect to any Person, any corporation of which
voting control or more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether at such time capital stock of any
other class or classes of such corporation shall or might have voting power upon
the occurrence of any contingency) is at the time directly or indirectly owned
by such Person.
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"SUBSTANTIAL COMPLETION" means, with respect to a Facility, when such
Facility (including all interior finish work, but exclusive of punch list items)
shall have been completed in all material respects and FF&E for that Facility
shall have been installed in all material respects in accordance with the
Facility Plans.
"VALUE" means with respect to a Facility or FF&E, the value as
determined by Lessee as set forth in a certificate or as set forth in a
statement of cost and benefit by Lessee.
Section 1.2. FORMS. All forms specified by the text hereof or by
reference to exhibits attached hereto shall be substantially as set forth
herein, subject to such changes by Brazos and Lessee by mutual consent that do
not alter the substantive rights of the parties hereto or of the Assignees or as
may be required by applicable laws hereafter enacted.
Section 1.3. RECITALS, TABLE OF CONTENTS, TITLES, AND HEADINGS. The
terms and phrases used in the recitals of this Agreement have been included for
convenience of reference only and the meaning, construction, and interpretation
of such words and phrases for purposes of this Agreement shall be determined
solely by reference to SECTION 1.1 hereof. The table of contents, titles, and
headings of the Articles and Sections of this Agreement have been inserted for
convenience of reference only and are not to be considered a part hereof and
shall not in any way modify or restrict any of the terms or provisions hereof
and shall not be considered or given any effect in construing this Agreement or
any provision hereof or in ascertaining intent, if any question of intent should
arise.
Section 1.4. INTERPRETATION. Unless the context requires otherwise,
words of the masculine gender shall be construed to include correlative words of
the feminine and neuter genders and vice versa, and words of the singular number
shall be construed to include correlative words of the plural number and vice
versa. This Agreement, and all the terms and provisions hereof, shall be
liberally construed to effect the purposes set forth herein and to sustain the
validity of this Agreement.
ARTICLE II
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APPOINTMENT OF LESSEE
Section 2.1. APPOINTMENT AND DUTIES. Brazos hereby appoints and
empowers Lessee as its agent, subject to approval by the Agent of the Basic Plan
for a Facility and to approval by the Agent of the Budget, for the designing,
furnishing, constructing, installing and equipping of the Facilities on each
Property and, with respect to existing Facilities, to negotiate and contract for
the acquisition and purchase of fee interests in such Facilities or leasehold
estates under Acquired Facilities Leases, and to purchase Facilities and FF&E in
the name of Brazos to the extent provided in SECTION 2.4(C) hereof.
Notwithstanding the foregoing, Brazos and Agent reserve the right to accept or
reject any Facility, FF&E or Additional Improvements proposed by Lessee in their
sole discretion. Lessee agrees that each Facility shall be built in accordance
with the Facility Plans developed therefor and that any material deviations from
the Facility Plans after the Initial Advance shall require the prior approval of
Brazos whose approval shall not be unreasonably withheld or delayed. Lessee
agrees to exercise its best business judgment to contract for the good and
workmanlike completion of each Facility, suitable for its intended use. Each
Facility shall be of substantially equal quality with respect to design,
materials, and workmanship as currently existing, newly constructed Facilities
built by Lessee for its own use and actually owned by Lessee. Lessee will also
enter into all other contracts, including replacement construction contracts and
subcontracts, as will become necessary for the completion of the Facilities.
Section 2.2. TERMINATION OF APPOINTMENT AND DUTIES. Lessee may
terminate its appointment and duties under this Agreement at any time, upon
thirty (30) days advance written notice to Brazos. Any such termination by
Lessee shall be deemed a termination of this Agreement, however such termination
shall not affect any outstanding request for an advance under ARTICLE III
hereof.
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Section 2.3. LEASE OF FACILITIES.
(a) Upon delivery to Brazos and Agent of the Initial Advance
Certificate with respect to a Facility or FF&E, Lessee shall request the Initial
Advance with respect to such Facility or FF&E which shall be within the
Available Commitment and within the Budget submitted by Lessee and approved by
Agent, and which, subject to SECTION 3.3(A), shall be sufficient to provide for
payment of all or any portion of identified costs of all FF&E and of designing,
furnishing, constructing, installing and equipping the Facility, and may include
Lessee overhead costs comprising not more than five (5%) percent of the Initial
Advance. By delivery of the Initial Advance Certificate and acceptance of the
Initial Advance with respect to a Facility or FF&E, Lessee (i) evidences its
acceptance of such Facility or FF&E for lease under the Facilities Lease, (ii)
acknowledges that such Facility or FF&E has been delivered to Lessee in good
condition and has been accepted for lease by Lessee as of the date of the
Initial Advance, (iii) acknowledges that such Facility or FF&E is subject to all
of the covenants, terms and conditions of the Facilities Lease, and (iv)
certifies that the representations and warranties contained in Article II of the
Facilities Lease are true and correct in all material respects on and as of the
date of the Initial Advance as though made on and as of such date and that there
exists on such date no (1) Event of Default under this Agreement or Event of
Default (as defined in the Facilities Lease) or (2) Potential Default under this
Agreement or Potential Default (as defined in the Facilities Lease). Upon making
the Initial Advance with respect to such Facility or FF&E, Brazos shall prepare
and deliver to Lessee a Facility Leasing Record for such Facility or FF&E and
Lessee shall promptly execute the Facility Leasing Record and return it to
Brazos. Each Facility Leasing Record shall give a full description of the
Facility or FF&E covered thereby, the Acquisition Cost of such Facility or FF&E,
the Lease Term (as such term is defined in the Facilities Lease) for such
Facility or FF&E, its location, the specific items of FF&E, if any, actually
installed in such Facility, and such other details as Brazos, as lessor, and
Lessee, as lessee, may from time to time agree.
(b) Upon delivery to Brazos and Agent of the Reconciliation Certificate
with respect to a Facility or FF&E, Lessee shall request the Reconciliation
Advance with respect to such Facility or FF&E which shall be within the
Available Commitment and within the Budget submitted by Lessee and approved by
Agent, and which, subject to SECTION 3.3(B), shall be sufficient to pay in full
the amount by which the costs of designing, furnishing, constructing, installing
and equipping the Facility or acquisition and installation of the FF&E exceeds
the Acquisition Cost of such Facility or FF&E as reflected in the Facility
Leasing Record, and may include Lessee overhead costs comprising not more than
five (5%) percent of the Reconciliation Advance. By delivery of the
Reconciliation Certificate and acceptance of the Reconciliation Advance, Lessee
(i) acknowledges that such Facility or FF&E is subject to all of the covenants,
terms and conditions of the Facilities Lease, and (ii) certifies that the
representations and warranties contained in Article II of the Facilities Lease
are true and correct in all material respects on and as of the date of the
Reconciliation Advance as though made on and as of such date and that there
exists on such date no (1) Event of Default under this Agreement or Event of
Default (as defined in the Facilities Lease) or (2) Potential Default under this
Agreement or Potential Default (as defined in the Facilities Lease). Upon making
the Reconciliation Advance with respect to such Facility or FF&E, Brazos shall
prepare and deliver to Lessee a Revised Facility Leasing Record for such
Facility or FF&E and Lessee shall promptly execute the Revised Facility Leasing
Record and return it to Brazos.
(c) Upon delivery to Brazos and Agent of the Additional Advance
Certificate with respect to Additional Improvements, Lessee shall request the
Additional Advance with respect to such Additional Improvements which shall be
within the Available Commitment and within the Budget submitted by Lessee and
approved by Agent, and which, subject to SECTION 3.3(C) hereof, shall be
sufficient to provide for payment of all costs of designing, furnishing,
constructing, installing and equipping the Additional Improvements, and may
include Lessee overhead costs comprising not more than five (5%) percent of the
Additional Advance. By delivery of the Additional Advance Certificate and
acceptance of the Additional Advance with respect to Additional Improvements,
Lessee (i) evidences its acceptance of such Additional Improvements for lease
under the Facilities Lease, (ii) acknowledges that such Additional Improvements
have been delivered to Lessee in good condition and have been accepted for lease
by Lessee as of the date of the Additional Advance, (iii) acknowledges that such
Additional Improvements are subject to all of the covenants, terms and
conditions of the Facilities Lease, and (iv) certifies that the representations
and warranties contained in Article II of the Facilities Lease are true and
correct in all material respects on and as of the date of the Additional Advance
as though made on and as of such date and that there exists on such date no (1)
Event of Default under this Agreement or Event of Default (as defined in the
Facilities
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Lease) or (2) Potential Default under this Agreement or Potential Default (as
defined in the Facilities Lease). Upon making the Additional Advance with
respect to such Additional Improvements, Brazos shall prepare and deliver to
Lessee a Revised Facility Leasing Record for the Facility or FF&E to which such
Additional Improvements were made and Lessee shall promptly execute the Revised
Facility Leasing Record and return it to Brazos. Each Revised Facility Leasing
Record shall give a full description of the Additional Improvements covered
thereby, the Acquisition Cost of such Additional Improvements, the Lease Term
(as such term is defined in the Facilities Lease) for such Additional
Improvements, and such other details as Brazos, as lessor, and Lessee, as
lessee, may from time to time agree.
Section 2.4. POWERS OF LESSEE.
(a) Subject to SECTION 8.2(B) and the right retained by Brazos and the
Agent to accept or reject any Facility, FF&E or Additional Improvements, Lessee
in its capacity as agent for Brazos shall have the right and obligation to act
for Brazos and on Brazos' behalf with full and complete authority to select
potential facilities and equipment for purchase or future lease pursuant to a
Mortgageable Facilities Lease, negotiate and contract for purchase or lease of
such facilities or equipment as Facilities or FF&E, appear before each
applicable Governmental Authority on behalf of Brazos for the purpose of
resolving issues related to the platting, zoning, installation of utilities, and
use of the Facility and for the purpose of obtaining all Permits, to appoint,
employ and deal with the architects, engineers, consultants and contractors, to
purchase existing Facilities and to purchase and arrange for delivery of all
materials, supplies, fixtures, and equipment, and to approve all related
vouchers, invoices and statements. Brazos agrees to cooperate with Lessee in
connection with any such activities and to sign any agreements, documents, plats
or other instruments necessary to carry out the intent of this Agreement and
Brazos will use its best efforts to obtain any necessary approvals or consents
under the Credit Agreement. No payment shall be made for any property or
services of such architects, engineers, consultants, or contractors relating to
the designing, furnishing, constructing, installing and equipping of a Facility
without the prior approval of Lessee, and each amount so approved and paid shall
be part of the Acquisition Cost of that Facility and must be in compliance with
the Budget for such Facility. If Lessee has unreasonably delayed or withheld
giving the approvals required to make such payments in violation of any
contract, Brazos may make payments to any architects, engineers, consultants,
contractors, vendors or suppliers which are properly due and payable in
accordance with the contracts with said parties and the Budget approved by the
Agent, and any such payment so made shall be and become a part of the
Acquisition Cost of that Facility; provided, however, that Brazos shall not make
any such payment if it is subject to a Permitted Contest and, in any event,
Brazos shall give two (2) Business Days notice to Lessee prior to making any
such payment.
(b) Notwithstanding anything herein contained, Lessee shall have no
authority to, and shall not attempt to, enter into any Acquired Facility Lease
on behalf of and in the name of Brazos or to acquire any Facility or FF&E in the
name of Brazos without the advance written consent of Brazos.
(c) Lessee may, with the advance written consent of Brazos and Agent,
acquire a Facility or FF&E in the name of Brazos by advancing Lessee's own funds
at the closing of such Facility or FF&E for the purchase price of the Facility
or FF&E and any closing costs. In the event Lessee advances its own funds for
such purpose, Lessee shall submit an Initial Advance Certificate to Brazos
within thirty (30) days, or such other period of time as may be agreed upon by
Brazos and Lessee, of the closing of such purchase pursuant to SECTION 2.3(A)
above. The funding of such Initial Advance to reimburse Lessee shall be subject
to the terms and conditions hereof to the same extent as an Initial Advance in
connection with the acquisition of a Facility or FF&E by Brazos with its own
funds from an Initial Advance. Lessee acknowledges that any Facility or FF&E so
acquired is still subject to approval by Brazos and Agent in their sole
discretion. Any Facility or FF&E which is acquired by Lessee in the name of
Brazos and which is not the subject of an Initial Advance, Reconciliation
Advance or Additional Advance under this Agreement shall be reassigned by Brazos
to Lessee pursuant to SECTION 11.14 hereof.
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ARTICLE III
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ADVANCES
Section 3.1. AGREEMENT TO MAKE ADVANCES. Subject to the conditions and
upon the terms herein provided, including, without limitation, that the
Available Commitment not be exceeded and that all advances be within the Budget
for a Facility, Brazos agrees to make available to Lessee advances for each
Facility or FF&E up to an aggregate principal amount determined with respect to
that Facility or FF&E in accordance with SECTION 3.3 hereof. Subject to the
terms of this Agreement, Brazos agrees to make (a) an Initial Advance in
accordance with the Initial Advance Certificate at the time (i) Brazos' fee
interest in a Facility or FF&E is acquired or Brazos approves and executes a
Mortgageable Facilities Lease or an Acquired Facilities Lease included in
SCHEDULE 4.13 attached hereto or as otherwise approved by Brazos for a Facility
or FF&E, or within thirty (30) days, or such other period of time as may be
agreed upon by Brazos and Lessee, of the advance of funds by Lessee for the
purchase of a Facility or FF&E in the name of Brazos to the extent permitted by
SECTION 2.4(C) and (ii) the conditions in ARTICLE VI are satisfied, (b) a
Reconciliation Advance in accordance with the Reconciliation Certificate at the
time the conditions in ARTICLE VII are satisfied and (c) an Additional Advance
in accordance with the Additional Advance Certificate at the time (i) Brazos'
fee interest in Additional Improvements is acquired or Brazos approves and
executes a Mortgageable Facilities Lease for Additional Improvements and (ii)
the conditions in ARTICLE VI are satisfied.
Section 3.2. PROCEDURE FOR ADVANCES. Lessee shall give Brazos and Agent
at least five (5) Business Days' notice of its irrevocable request for an
advance pursuant to this Agreement, specifying a Business Day on which such
advance is to be made and the amount of the advance. Not later than 11:00 a.m.
Dallas, Texas time on the date for the advance specified in such notice;
provided the conditions set forth in SECTION 2.3 and ARTICLE VI, with respect to
the Initial Advance or Additional Advance, or ARTICLE VII, with respect to a
Reconciliation Advance, have been satisfied, and subject to SECTION 3.6, Brazos
shall provide to Lessee, in immediately available funds, the amount of the
advance then requested.
Section 3.3. DETERMINATION OF AMOUNTS OF ADVANCES.
(a) INITIAL ADVANCE. With respect to any Facility or FF&E, the amount
of the Initial Advance shall be made in accordance with the Initial Advance
Certificate, and shall be sufficient to pay in full all costs of designing,
furnishing, constructing, installing and equipping the Facility, free of all
Liens, or if purchased, the Value thereof, and shall not duplicate any amounts
advanced under the Agreement for Ground Lease. All such costs for which the
Initial Advance is requested shall be specifically set forth in the Initial
Advance Certificate and the request for the Initial Advance, and Brazos shall
have no obligation to advance any funds in the Initial Advance which are not for
costs so specifically set forth in such documents and actually incurred, or in
the case of punch list items, to be incurred, in the Lien-free (except for
Permitted Exceptions) construction and equipping of such Facility. Lessee shall
submit to Brazos and Agent at least two weeks before the delivery of an Initial
Advance Certificate with respect to a Facility, the Facility Plans and the
Budget for the development and construction of the Facility which must be
approved (such approval not to be unreasonably withheld) by Agent and which will
govern all advances made with respect to that Facility.
(b) RECONCILIATION ADVANCE. With respect to any reconciliation of an
Initial Advance or Additional Advance, the amount of the Reconciliation Advance
shall be made in accordance with the Reconciliation Certificate, and shall be
sufficient to pay in full the amount by which the costs of acquiring the FF&E or
acquiring, designing, furnishing, constructing, installing and equipping the
Facility exceeds the Acquisition Cost of such Facility as reflected in the
Facility Leasing Record subject to the Budget. All such costs for which the
Reconciliation Advance is requested shall be specifically set forth in the
Reconciliation Certificate and the request for the Reconciliation Advance, and
Brazos shall have no obligation to advance any funds in the Reconciliation
Advance which are not so specifically set forth in such documents.
(c) ADDITIONAL ADVANCE. With respect to any Additional Improvements,
the amount of the Additional Advance shall be made in accordance with the
Additional Advance Certificate, and shall be sufficient to pay in full all costs
of acquiring, designing, furnishing, constructing, installing and equipping the
Additional Improvements, free of all Liens
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subject to the Budget. All such costs for which the Additional Advance is
requested shall be specifically set forth in the Additional Advance Certificate
and the request for the Additional Advance, and Brazos shall have no obligation
to advance any funds in the Additional Advance which are not for costs so
specifically set forth in such documents and actually incurred, or in the case
of punch list items, to be incurred, in the Lien-free (except for Permitted
Exceptions) construction and equipping of such Additional Improvements.
Section 3.4. PARTIAL ADVANCES. If any or all conditions precedent to
either an Initial Advance, a Reconciliation Advance or an Additional Advance
have not been satisfied on the applicable date for a requested advance, Brazos,
in its sole discretion, may, but shall have no obligation to, disburse a part of
the requested advance.
Section 3.5. USE OF PROCEEDS. The proceeds of each advance with respect
to a Facility or FF&E shall be used by Lessee for payment or reimbursement of
costs specified in the applicable request for the advance.
Section 3.6. NO OBLIGATION TO ADVANCE. Notwithstanding anything
contained herein to the contrary, Brazos shall have no obligation (a) to make
any advance hereunder which would exceed the Available Commitment, or (b) to
make any advance hereunder if the funds therefor are not made available to
Brazos under the Credit Agreement for any reason; provided, however, this
SECTION 3.6 shall not be interpreted to relieve any Bank under the Credit
Agreement from the obligation to provide funds to Brazos in accordance with the
terms of the Credit Agreement.
Section 3.7. BRAZOS EQUITY. Brazos agrees that it will advance its
equity from its own funds in connection with each advance made hereunder upon
approval by Agent so that the maximum amount of debt advanced under the Credit
Agreement for any Facility or FF&E will not exceed ninety-seven percent (97%) of
the Acquisition Cost of such Facility or FF&E; provided that the equity advanced
by Brazos shall not exceed 3% of such Acquisition Cost without the prior written
approval of Agent. Brazos agrees that it will not withdraw its equity advanced
hereunder for a Facility or FF&E except upon approval by Agent or the
termination of the Facilities Lease for such Facility or FF&E.
Section 3.8. BRAZOS COVENANTS. In the absence of an Event of Default
which is continuing, Brazos agrees that it will not engage any broker in
connection with the purchase or sale of any Facility or FF&E without Lessee's
prior written consent. Within one hundred and twenty (120) days after the end of
Brazos' fiscal year, Brazos will provide to Lessee Brazos' unaudited balance
sheet dated as of the end of its fiscal year prepared in accordance with GAAP,
certified by an officer of the General Partner of Brazos.
ARTICLE IV
----------
REPRESENTATIONS AND WARRANTIES OF LESSEE
In order to induce Brazos to enter into this Agreement and the Credit
Agreement and to agree to make advances, Lessee hereby represents and warrants
to Brazos on the date of each advance (it being understood that all
representations and warranties in this ARTICLE IV with respect to any Facility
or FF&E shall refer to the Facility or FF&E for which each such advance is
requested) that:
Section 4.1. CORPORATE MATTERS. Lessee (a) has been duly incorporated
and is validly existing as a corporation in good standing under the laws of the
state of its organization, (b) has full corporate power and authority to own and
operate its properties and to conduct its business as presently conducted and
full corporate power, authority and legal right to execute, deliver and perform
its obligations under the Facilities Lease, this Agreement and the Construction
Documents and (c) is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction, including, without limitation each state or
other jurisdiction in which a Facility or FF&E is located, in which its
ownership or leasing of properties or the conduct of its business requires such
qualification and where nonqualification, singly or in the aggregate, would
materially adversely affect the financial condition or creditworthiness of
Lessee, or would impair the ability of Lessee to perform its obligations under
the Facilities Lease, this Agreement or any of the Construction Documents.
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Section 4.2. AUTHORIZATION; BINDING AGREEMENT. This Agreement has been,
and each of the Construction Documents, when executed and delivered, will be,
duly authorized, executed and delivered by Lessee, and, assuming the due
authorization, execution and delivery of this Agreement by Brazos and the
Construction Documents by the parties thereto other than Lessee, this Agreement
is, and each of the Construction Documents when executed and delivered will be,
a legal, valid and binding obligation of Lessee, enforceable according to its
terms, subject, as to enforceability, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
Section 4.3. POWER AND AUTHORITY. The consummation of the transactions
herein contemplated and the performance and observance of Lessee's obligations
under this Agreement have been, and the Construction Documents have been or will
be, duly authorized by all necessary corporate action on the part of Lessee. The
execution, delivery and performance by Lessee of this Agreement and the
Construction Documents will not result in any violation of any term of the
certificate of incorporation or the by-laws of Lessee, do not require approval
of the board of directors or shareholders of Lessee or the approval or consent
of any trustee or holders of Indebtedness of Lessee except such as have been
obtained prior to the date hereof and will not conflict with or result in a
breach of any terms or provisions of, or constitute a default under, or result
in the creation or imposition of any Lien (other than a Lien on any Facility or
FF&E as may be contemplated herein) upon any property or assets of Lessee under,
any indenture, mortgage or other agreement or instrument to which Lessee is a
party or by which it or any of its property is bound where breach or default,
singly or in the aggregate, could materially adversely affect the financial
condition or creditworthiness of Lessee, or any existing applicable law, rule,
regulation, license, judgment, order or decree of any Governmental Authority or
court having jurisdiction over Lessee or any of its activities or properties.
Section 4.4. CONSENTS, APPROVALS AND AUTHORIZATIONS. There are no
consents, licenses, orders, authorizations or approvals of, or notices to or
registrations with, any Governmental Authority which are required in connection
with the valid execution, delivery and performance of this Agreement and the
Construction Documents that have not been obtained or made, except (i) such
permits and licenses as Lessee will be required to obtain for the construction,
installation, occupancy, use or operation of a Facility or FF&E and which, in
the ordinary course of business, are not obtained until just prior to the
commencement of such construction, installation, occupancy, use or operation,
and (ii) any such consents, licenses, orders, authorizations, approvals, notices
and registrations, the failure of which to obtain would not reasonably be
expected to cause a Material Adverse Change. Any such consents, licenses,
orders, authorizations, approvals, notices and registrations that have been
obtained or made are in full force and effect.
Section 4.5. FINANCIAL STATEMENTS. Lessee has caused to be furnished to
Brazos and Agent copies of the most recent financial information and
certificates required to be furnished pursuant to the Corporate Credit
Documents, since March 31, 1998, which fairly present the financial position,
results of operations and cash flows with respect to Guarantor and its
consolidated subsidiaries, as of the dates and for the periods indicated therein
and comply with all applicable requirements.
Section 4.6. CHANGES. Since the date of the most recent financial
statements delivered pursuant to SECTION 4.5, there has been no adverse change
in the financial condition or business of any Guarantor or Lessee which would
materially impair the ability of such Guarantor or Lessee to perform their
respective obligations under this Agreement or the Facilities Lease or which
would materially impair the ability of Guarantor to perform its obligations
under the Guaranty.
Section 4.7. LITIGATION. Except as disclosed to Brazos, there is no
action, suit, proceeding or investigation at law or in equity by or before any
court, governmental body, agency, commission or other tribunal now pending or,
to the best knowledge of Lessee after due inquiry, threatened against in writing
or affecting Lessee or Guarantor or any property or rights of Lessee or
Guarantor, or, to the best of Lessee's knowledge, which affects any Facility or
FF&E, as to which there is a significant possibility of an adverse
determination, and which if adversely determined, could reasonably be expected
to have a material adverse impact on the financial condition or business of
Lessee or Guarantor or which, if adversely determined, could reasonably be
expected to materially impair the ability of Lessee or Guarantor to perform its
obligations hereunder or of Guarantor to perform its obligations under the
Guaranty, or which, if adversely determined,
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could reasonably be expected to have a material adverse impact on the Value or
intended use of a Facility or FF&E (it being agreed that a potential adverse
impact reasonably likely to be less than $500,000 in the aggregate with respect
to all Facilities or FF&E shall be deemed not to be material), and there is no
action, suit, proceeding or investigation at law or in equity by or before any
court, governmental body, agency, commission or other tribunal now pending or,
to the best knowledge of Lessee or Guarantor after due inquiry, threatened which
questions or would question the validity of this Agreement.
Section 4.8. NO DEFAULT. Neither Lessee nor Guarantor is in default,
after the expiration of all applicable grace periods, under or with respect to
any Contractual Obligation in any respect which could be materially adverse to
the business, operations, property or financial or other condition of Lessee or
Guarantor, or which could materially adversely affect the ability of Lessee or
Guarantor to perform its obligations under this Agreement, the Facilities Lease
or any of the Construction Documents.
Section 4.9. FACILITY AND FF&E LIENS. Except as specifically disclosed
by Lessee in writing to Brazos, to Lessee's actual knowledge no Facility or FF&E
is subject to a Lien of Record, and, to the best of Lessee's actual knowledge,
no Facility or FF&E is subject to any other Lien, except for Permitted
Exceptions previously disclosed in writing to Brazos.
Section 4.10. AVAILABILITY OF UTILITIES. To the best of Lessee's actual
knowledge all utility services and facilities (including, without limitation,
gas, electrical, water and sewage services and facilities) that are necessary
for the intended use of the Facility under the Facilities Lease without
impediment or unreasonable delay are or will be on a timely basis available at
the Facility.
Section 4.11. BROKERAGE. Except as may be contemplated by the
Facilities Lease, no brokerage or other fee, commission or compensation is to be
paid by Brazos in connection with this Agreement, and Lessee hereby indemnifies
Brazos against any claims for brokerage fees or commissions and agrees to pay
all reasonable expenses incurred by Brazos in connection with the defense of any
action or proceeding brought to collect any such brokerage fees or commissions;
provided such claim is made through or under Lessee.
Section 4.12. SUITABILITY OF FACILITY AND FF&E. Each Facility or FF&E
is suitable in material respects (including, without limitation, ground
conditions, utilities, and condition of title) for the intended use of the
Facility or FF&E under the Facilities Lease.
Section 4.13. ACQUIRED FACILITIES LEASE. Each Acquired Facilities Lease
is a Mortgageable Facilities Lease except to the extent agreed to in writing by
Brazos and Agent, and to the best of Lessee's actual knowledge is in full force
and effect and has not been amended, restated, modified or changed in any manner
that has not been disclosed in writing to Brazos and Agent, nor to the best of
Lessee's actual knowledge is there any material default under any Acquired
Facilities Lease nor the occurrence of any event which, with the giving of
notice or the passage of time or both, would constitute a default under such
Acquired Facilities Lease, nor to the best of Lessee's actual knowledge has any
party under any Acquired Facilities Lease commenced any action or given or
received any notice for the purpose of terminating any Acquired Facilities
Lease, and to the best of Lessee's actual knowledge all rents, additional rents
and other sums due and payable under the Acquired Facilities Lease have been
paid in full.
Section 4.14. ACCURACY OF VALUE. Lessee has no knowledge or reason to
believe that the Value contained in any certificate or statement furnished to
Brazos or Agent by Lessee with respect to any Facility or FF&E is not accurate
and complete in all material respects.
ARTICLE V
---------
AFFIRMATIVE COVENANTS
Lessee hereby agrees that, so long as this Agreement remains in effect,
Lessee shall keep and perform fully each and all of the following covenants:
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Section 5.1. CONSTRUCTION. With respect to each Facility which is to be
constructed, Lessee, on behalf of Brazos, shall commence construction of such
Facility no later than fifteen (15) months after Brazos' acquisition of an
interest in the respective Property, or as soon as practicable if weather
conditions do not reasonably permit commencement of construction within such
fifteen (15) month period (which commencement obligation shall be satisfied by
site clearance and preparation work), and shall achieve Substantial Completion
of the Facility with due diligence on or before the Facility Completion Date,
subject to Force Majeure Delay and in accordance with the Facility Plans and
this Agreement. Each Facility shall be constructed, equipped and furnished in
material compliance with any Legal Requirements affecting the Facility;
provided, that Lessee shall not be required to comply with any Legal
Requirements if, (a) in the case of Legal Requirements with respect to laws
affecting the environment, Lessee acts diligently to cure such non-compliance
upon becoming aware of it, and (b) in every case such non-compliance,
individually or in the aggregate, (i) shall not involve any material danger that
any Facility or FF&E would be subject to sale, forfeiture or loss, as a result
of failure to comply therewith, (ii) could not reasonably be expected to cause
either Brazos or any Assignee to incur (x) civil liability which, in the sole
judgment of Brazos or any Assignee, is not adequately indemnified (Lessee's
obligations under ARTICLE IX of this Agreement shall be deemed to be adequate
indemnification if no Event of Default or Potential Default exists and if such
civil liability is reasonably likely to be less than $100,000 per Facility and
$1,000,000 in the aggregate) or (y) any criminal liability as a result of
failure to comply therewith, (iii) is permitted under the provisions of the
Acquired Facility Lease, if any, on such Facility or FF&E, and (iv) is
consistent with business practices normal within the industry of Lessee, or the
practices of Lessee with respect to properties or equipment owned by Lessee.
Section 5.2. PERFORMANCE UNDER OTHER AGREEMENTS. Lessee shall duly
perform and observe all of the covenants, agreements and conditions on its part
to be performed and observed hereunder and shall duly perform and observe all of
the covenants, agreements and conditions on its part which it is obligated to
perform or observe under the Facilities Lease, Construction Documents and all
other agreements related to any Facility or FF&E.
Section 5.3. EXPENSES. Lessee shall pay upon demand all obligations,
reasonable costs and expenses incurred by Brazos (or its limited partners, if
payable to any such limited partner as Additional Rent under the Facilities
Lease or if incurred in connection with the closing (as opposed to on-going
administrative expenses)) with respect to any and all transactions contemplated
herein and the preparation of any document reasonably required hereunder,
including (without limiting the generality of the foregoing) and without
duplication all amounts required to reimburse Brazos or its Affiliate for its
interest costs, obligations, costs, fees and expenses arising in connection with
any Credit Agreement or the termination thereof (whether as a result of a
default thereunder or otherwise), title and conveyancing charges, rent under
each Acquired Facilities Lease, mortgage taxes, intangible personal property
taxes, escrow fees, filing fees, revenue and tax stamp expenses, insurance
premiums (including title insurance premiums), brokerage commissions, finders'
fees, placement fees, court costs, surveyors', photographers', appraisers',
architects', engineers', Consulting Professionals', rating agencies',
accountants' and reasonable attorneys' fees and disbursements (including,
without limitation, the preparation of any tax return or report relating to a
Facility or FF&E), and will reimburse to Brazos all expenses paid by Brazos of
the nature described in this SECTION 5.3 which have been or may be incurred by
Brazos with respect to any and all of the transactions contemplated herein. If
Lessee or Guarantor shall fail to reimburse Brazos within twenty (20) days after
presentation of a ▇▇▇▇ and demand for payment therefor, Brazos may pay or
deduct, from the advances to be made under the Credit Agreement, any of such
expenses; provided the same are within the Budget, and any proceeds so applied
shall be deemed advances under this Agreement, and deducted from the total funds
available for the Facility or FF&E. Notwithstanding anything to the contrary
contained in the foregoing, neither Lessee nor the Guarantor shall be required
to reimburse Brazos for any of the foregoing obligations, costs and expenses
which constitute properly capitalized costs and which Brazos has agreed to
capitalize and to include as an element of the Acquisition Cost of a particular
Facility or FF&E or which are included in the calculation of Basic Rent (as
defined in the Facilities Lease). Expenses incurred by Brazos in financing
obligations, costs and expenses pending allocation as a capitalized cost to a
Facility or FF&E shall be payable by Lessee or the Guarantor hereunder, if not
capitalized by Brazos.
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Section 5.4. CERTIFICATES; OTHER INFORMATION. Lessee shall furnish to
Brazos:
(a) concurrently with the delivery of the annual financial
statements referred to in SECTION 5.4(B), the Compliance Certificate
(as defined in the Guaranty) required to be provided by Guarantor
pursuant to Section 7(b) of the Guaranty, and a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, Lessee during such period has observed or
performed all of its covenants and other agreements, and satisfied
every condition contained in this Agreement and in the Construction
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Event of Default
or Potential Default, except as specified in such certificate; and
(b) from time to time, (i) promptly upon request, copies of the
quarterly financial statements required to be delivered under Section
8.1(b) of the Corporate Credit Documents, together with each
certificate required to be delivered under Section 8.1 of the Corporate
Credit Documents, and within one hundred (100) days after the end of
Guarantor's fiscal year, copies of the annual financial statements
required to be delivered under Section 8.1(a) of the Corporate Credit
Documents, together with each certificate required to be delivered
under Section 8.1 of the Corporate Credit Documents, (ii) promptly upon
request, such other information with respect to Guarantor or Lessee or
Guarantor's or Lessee's operations, business, property, assets or
financial condition as Brazos or Agent shall reasonably request, (iii)
promptly after a Responsible Officer obtains knowledge of any Event of
Default or Potential Default, a certificate of a Responsible Officer
specifying the nature and period of existence of such Event of Default
or Potential Default, and what action, if any, Lessee has taken, is
taking, or proposes to take with respect thereto, (iv) promptly after a
Responsible Officer obtains knowledge of any material adverse change in
the financial condition or business of Guarantor or Lessee or of any
litigation of the type described in SECTION 4.7, a certificate of a
Responsible Officer describing such change or litigation as the case
may be, and (v) promptly after Lessee obtains knowledge of any and all
Liens other than Permitted Exceptions on any Facility or FF&E or other
matter which may materially adversely affect the value or intended use
of a Facility or FF&E, a detailed statement describing each such Lien
or other matter.
Section 5.5. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Lessee
shall preserve, renew and keep in full force and effect its corporate existence
(except as otherwise permitted herein), and take all reasonable action to
maintain all rights, privileges and franchises material to the conduct of its
business; and comply with all of its material Contractual Obligations; provided,
however, that nothing contained in this SECTION 5.5 shall prevent Lessee from
ceasing or omitting to exercise any rights, privileges or franchises which in
the reasonable judgment of Lessee can no longer be profitably exercised or
prevent Lessee from selling, abandoning or otherwise disposing of any property,
the retention of which in the reasonable judgment of Lessee is inadvisable to
the business of Lessee, or prevent any liquidation of any subsidiary of Lessee,
or any merger, consolidation or sale, permitted by the provisions of SECTION
11.8.
Section 5.6. NOTICES. Each party hereto shall give notice or copies, as
applicable, to the other party promptly upon the occurrence (or becoming aware
of or receiving notice) of:
(a) any litigation or proceedings affecting any Facility or
FF&E in which the amount involved (individually or collectively) is
$100,000 or more and not covered by insurance or in which injunctive or
similar relief is sought;
(b) any notices given to or received from the lessor under any
Acquired Facilities Lease;
(c) any notice given pursuant to any of the Construction
Documents that a default has occurred thereunder;
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(d) any condition which results or is reasonably likely to
result in a Force Majeure Delay in completion of any Improvements; and
(e) the imposition of any Lien, other than Permitted
Exceptions, or Lien of Record of which Lessee has knowledge.
Each notice given by Lessee pursuant to this Section shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action Lessee proposes to take with respect
thereto.
Section 5.7. LEGAL REQUIREMENTS. Lessee shall comply in all material
respects with all Legal Requirements affecting the execution, delivery and
performance of this Agreement and the Construction Documents, and Lessee will
not do or permit any act or thing which is contrary in any material respect to
any Legal Requirements, or which might impair in any material respect, other
than in the normal use thereof, the value or usefulness of any Facility or FF&E;
provided, in each case, that Lessee shall not be required to comply with any
Legal Requirements if (a) in the case of any Legal Requirements with respect to
laws affecting the environment, Lessee acts diligently to cure such
non-compliance upon becoming aware of it and (b) in every case, such
non-compliance, individually or in the aggregate, (i) shall not involve any
material danger that any Facility would be subject to sale, forfeiture, or loss
as a result of failure to comply therewith; (ii) could not reasonably be
expected to cause either Brazos or any Assignee to incur (x) civil liability
which, in the sole judgment of Brazos or any Assignee, is not adequately
indemnified (Lessee's obligations under ARTICLE IX of this Agreement shall be
deemed to be adequate indemnification if no Event of Default or Potential
Default exists and if such civil liability is reasonably likely to be less than
$100,000 per Property and $500,000 in the aggregate) or (y) any criminal
liability as a result of failure to comply therewith; (iii) is permitted under
the provision of the Acquired Facilities Lease, if any, on such Facility, and
(iv) is consistent with business practices normal within the industry of Lessee
or the practices of Lessee with respect to properties owned by Lessee.
Section 5.8. LEASING OF FACILITIES. Lessee shall lease (or in the case
of a Facility or FF&E under an Acquired Facilities Lease, shall sublease) such
Facility or FF&E from Brazos pursuant to the Facilities Lease in accordance with
the procedures of SECTION 2.3 hereof. Upon acquisition of a Facility or FF&E by
purchase or lease, such Facility or FF&E shall cease to be governed by the
terms, provisions, and conditions of this Agreement, and shall be governed by
the terms, provisions, and conditions of the Facilities Lease; provided that
nothing contained herein shall be deemed to relieve Brazos from its obligation
to make the Reconciliation Advance or Additional Advance if the conditions
hereof for such Reconciliation Advance or Additional Advance shall be satisfied
by Lessee or to relieve Lessee from the obligation of satisfaction of all Liens
with respect to any Facility or FF&E, it being expressly agreed that such
obligation shall survive the making of the Initial Advance and the date of the
Facility Leasing Record.
Section 5.9. FILINGS. Lessee shall promptly and duly execute, deliver,
file, and record, at Lessee's expense, all such documents, statements, filings,
and registrations, and take such further action as Brazos or Assignee shall from
time to time reasonably request in order to establish, perfect and maintain
Brazos' title to and interest in the Facilities or FF&E and any Assignee's
interest in this Agreement or any Facility or FF&E as against Lessee or any
third party in any applicable jurisdiction.
Section 5.10. CHANGES IN PLANS. Lessee will submit any material changes
in the Facility Plans to Brazos and Agent and Lessee must receive the approval
of Agent prior to implementing them, such approval not to be unreasonably
withheld or delayed.
Section 5.11. NOTIFICATION OF DEVELOPMENT OF FACILITIES. Lessee shall
not commence the development and construction of any Facility prior to the
delivery to Brazos and Agent of the Basic Plan for such Facility and approval of
such Basic Plan by Agent, such approval not to be unreasonably withheld or
delayed.
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ARTICLE VI
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CONDITIONS PRECEDENT TO THE INITIAL ADVANCE OR ADDITIONAL ADVANCE
WITH RESPECT TO A FACILITY OR FF&E OR ADDITIONAL IMPROVEMENTS
Brazos shall not be obligated to make the Initial Advance with respect
to a Facility or FF&E or n Additional Advance with respect to Additional
Improvements, or if no advance is being made pursuant to Brazos acquiring a
leasehold estate in a Mortgageable Facilities Lease Brazos shall not be required
to acquire such leasehold estate, until all of the conditions set forth in this
ARTICLE VI shall have been satisfied.
Section 6.1. ACQUISITION DOCUMENTS. In connection with the acquisition
of any Facility or FF&E with the proceeds of an Initial Advance, except as may
otherwise be agreed by Brazos and Agent, Brazos and Agent shall have received at
least five (5) Business Days prior to any advance, in each case in form and
substance satisfactory to Brazos and Agent, the following:
(a) FACILITIES LEASE. A fully executed copy of the Facilities
Lease. The delivery of the Facilities Lease to satisfy this condition
precedent with respect to the first Facility or FF&E shall serve to
satisfy this condition precedent for each subsequent Facility or FF&E.
(b) REQUEST FOR ADVANCE. A Request for Advance, executed by
Lessee, which shall set out the total amount of the Initial Advance or
Additional Advance requested, the date on which the advance is to be
paid, the name and address of the escrow or closing agent to which the
Initial Advance or Additional Advance is to be tendered, and an
itemization of the various costs constituting the amount of the Initial
Advance or Additional Advance in such detail as will be necessary to
provide disbursement instructions to the escrow or closing agent.
(c) INITIAL ADVANCE CERTIFICATE OR ADDITIONAL ADVANCE
CERTIFICATE. The Initial Advance Certificate or the Additional Advance
Certificate, as applicable, containing, among other things, a
certification by Lessee that the proposed cost of such Facility or FF&E
contained in such certificate is within the Budget approved by Agent
and is true, complete, correct, and accurately represents all expected
costs of the Facility or FF&E, and that the Facility or FF&E is not
encumbered by any Liens of Record created by Lessee or, to the best
knowledge of Lessee, by any other Liens of Record.
(d) SPECIAL WARRANTY DEED AND ▇▇▇▇ OF SALE. Where fee title is
to be acquired by Brazos, a photocopy of the Special Warranty Deed and
▇▇▇▇ of Sale to be executed and delivered at the closing of the
acquisition of each Facility or FF&E, conveying indefeasible title to
Brazos, subject only to Permitted Exceptions, but not subject to any
Liens of Record. For purposes of the Initial Advance and Additional
Advance, Permitted Exceptions shall not include any Liens of Record
(whether or not the subject of a Permitted Contest).
(e) ACQUIRED FACILITY LEASE. Where Brazos is acquiring an
Acquired Facility Lease listed on SCHEDULE 4.13 attached hereto or
otherwise approved by Brazos, an assignment of such Acquired Facility
Lease. Where Brazos is acquiring a leasehold estate in a Facility or
FF&E pursuant to a Mortgageable Facility Lease, an original or
certified copy of the Mortgageable Facilities Lease to be executed and
delivered at the closing of the acquisition of Brazos' leasehold
estate, certified by Lessee as complying in all respects with this
Agreement and with Article XVI of the Facilities Lease, and subject
only to Permitted Exceptions but not subject to any Liens of Record
which are not Permitted Exceptions (other than a lien of a lender to a
landlord which is subordinate to the Acquired Facility Lease or for
which a nondisturbance agreement has been obtained), along with any
estoppel certificates deemed necessary by Brazos or Agent (as, for
example, when Lessee's interest in an existing Acquired Facilities
Lease is being assigned to Brazos), recognition and attornment
agreements deemed necessary by Brazos or Agent, and other confirmations
required by legal counsel to Brazos and Agent that such Acquired
Facilities Lease is a Mortgageable Facilities Lease. For purposes of
the Initial Advance and Additional Advance, Permitted Exceptions shall
NOT include any Liens of Record (whether or not the subject of a
Permitted Contest).
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(f) TAXES. Evidence that all past and current taxes and
assessments (excluding those which are due and payable but not yet
delinquent) applicable to the Facility or FF&E for which the Initial
Advance or Additional Advance, respectively, is requested have been
paid in full.
(g) AVAILABILITY OF UTILITIES. With respect to each Facility,
evidence satisfactory to Brazos and Agent that all utility services and
facilities (including, without limitation, gas, electrical, water and
sewage services and facilities) that are necessary for the intended use
of the Facility under the Facilities Lease without impediment or delay
are available to the Facility.
(h) FLOOD INSURANCE. Either (i) a policy of flood insurance in
an amount equal to the Acquisition Cost for such Facility, or (ii) a
certification by the surveyor that the Facility is not located in a
Special Flood Hazard Area.
(i) PERMITS. Evidence reasonably satisfactory to Brazos and
Agent that all Permits for the operation and construction of the
Facility have been issued.
(j) OPINION OF LOCAL COUNSEL. With respect to (i) any proposed
acquisition by Brazos of a fee interest in a Facility or FF&E in a
state or jurisdiction in which no Facility or FF&E has previously been
acquired under this Agreement and (ii) any proposed acquisition by
Brazos of a Facility or FF&E under an Acquired Facilities Lease, an
opinion of local counsel, in each case in form and substance reasonably
satisfactory to Brazos and Agent and generally to the same effect as
EXHIBIT "E" attached hereto.
(k) CERTIFICATES OF INSURANCE. Certificates of insurance or
other evidence reasonably acceptable to Brazos and Agent certifying
that the insurance then carried or maintained on each Facility or FF&E
complies with the terms of the Facilities Lease.
(l) MEMORANDUM OF LEASE. A memorandum of lease for the Facility
or FF&E in recordable form, executed by Lessee and Brazos, reciting
therein that the Facility or FF&E covered thereby is subject to the
terms and conditions of the Facilities Lease.
(m) OTHER DOCUMENTS. All other documents or certificates
reasonably requested by Brazos and Agent including, but not limited to,
financing statements executed by Lessee and any of the items referenced
in Section 6.1 of the Agreement for Ground Lease, including an
appraisal of the Facility or FF&E, all in form and substance acceptable
to Brazos and Agent; provided however, Brazos and Agent reserve the
right to require Lessee to provide, at its sole cost and expense, and
appraisal of the Property if required by any Governmental Authority or
by the auditors of the Agent.
(n) OPINION OF COUNSEL FOR GUARANTOR. With respect to the first
proposed acquisition by Brazos of a fee or leasehold interest in a
Facility or FF&E, an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, counsel for
Guarantor, in form and substance reasonably satisfactory to Brazos and
Agent.
Section 6.2. NO EVENT OF DEFAULT. No Event of Default or Potential
Default shall have occurred and be continuing on the date of the Initial Advance
or Additional Advance or after giving effect to the advance to be made on such
date.
Section 6.3. CONTINUING REPRESENTATIONS. All representations and
warranties made in this Agreement, in the Facilities Lease, and in connection
with the Initial Advance or Additional Advance or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection herewith shall be true and correct as of the date they
are made or are deemed to be made.
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Section 6.4. ADDITIONAL MATTERS. All other documents and legal matters
in connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to Brazos and Agent, the Facility
or FF&E must be approved by the Agent and the amount of each advance to be made
in connection with such Facility or FF&E must be within the Budget approved by
the Agent.
Section 6.5. FACILITIES ACQUIRED IN BRAZOS' NAME. In connection with an
Initial Advance for a Facility or FF&E acquired by Lessee in Brazos' name with
Lessee's own funds, except as may otherwise be agreed by Brazos and Agent,
Brazos and Agent shall have received at least five (5) Business Days prior to
any advance, in each case in form and substance satisfactory to Brazos and
Agent, such of the documents and instruments referenced in SECTION 6.1 as may be
required for funding under the Credit Agreement.
ARTICLE VII
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CONDITIONS PRECEDENT TO THE RECONCILIATION ADVANCE
WITH RESPECT TO A FACILITY OR FF&E
Section 7.1. RECONCILIATION ADVANCE. Brazos' obligation to make the
Reconciliation Advance with respect to a Facility or FF&E shall be subject to
the satisfaction of the following conditions:
(a) RECONCILIATION CERTIFICATE. A fully executed copy of the
Reconciliation Certificate shall have been delivered to Brazos and
Agent.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made herein or which are contained in any certificate,
document or financial or other statement furnished at any time under or
in connection herewith, shall be correct on and as of the date for such
advance as if made on and as of such date.
(c) NO EVENT OF DEFAULT. No Event of Default or Potential
Default shall have occurred and be continuing on such date or after
giving effect to the advance to be made on such date.
(d) EVIDENCE OF COMPLIANCE. Brazos and Agent shall have been
furnished with such documents, reports, certificates, affidavits and
other information, in form and substance satisfactory to Brazos or
Agent in their reasonable judgment, as Brazos or Agent may require to
evidence compliance by Lessee with all of the provisions of this
Agreement.
(e) REQUEST FOR ADVANCE. Brazos and Agent shall have received a
Request for Advance, executed by Lessee, and stating the total amount
of the Reconciliation Advance requested, the date on which such
Reconciliation Advance is to be made, and a specific breakdown of items
and costs for which the Reconciliation Advance is being made all of
which must be within the amounts specified for same in the Budget
approved by the Agent.
(f) SATISFACTORY TITLE. There shall have been no changes in the
state of title and no additional survey exceptions or Liens, except for
Permitted Exceptions. Brazos and Agent shall have received a list of
all Liens of Record and of all other Liens known to Lessee against the
Facility or FF&E and the amounts thereof and, in the case of an
Acquired Facilities Lease, an estoppel certificate from the lessor
confirming that there are no defaults under the Acquired Facilities
Lease and such other information satisfactory to Brazos and Agent.
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ARTICLE VIII
------------
EVENTS OF DEFAULT
Section 8.1. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an Event of Default:
(a) FAILURE TO MAKE PAYMENTS. Failure of Lessee to pay any
amount hereunder within five (5) Business Days from written demand for
such payment.
(b) OTHER DEFAULTS. Lessee shall default in the performance or
observance of any other term, covenant, condition or obligation
contained in this Agreement and such default shall (i) continue for
thirty (30) days after written notice shall have been given to Lessee
by Brazos or any Assignee specifying such default and requiring such
default to be remedied or (ii) if such default is of a nature that it
is not capable of being cured within such 30-day period, Lessee shall
not have diligently commenced curing such default, proceeded diligently
and in good faith thereafter to complete curing such default, or cured
such default within sixty (60) days from the date of written notice.
(c) BANKRUPTCY. (i) The entry of a decree or order for relief
in respect of Lessee or Guarantor by a court having jurisdiction in the
premises in an involuntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Lessee or Guarantor or of any substantial part of Lessee's
or Guarantor's property, or ordering the winding up or liquidation of
Lessee's or Guarantor's affairs, and the continuance of any such decree
or order unstayed and in effect for a period of sixty (60) consecutive
days; or (ii) the general suspension or discontinuance of Lessee's or
Guarantor's business operations, its insolvency (however evidenced) or
its admission of insolvency or bankruptcy, or the commencement by
Lessee or Guarantor of a voluntary case under the Federal bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal
or state bankruptcy, insolvency or other similar law, or the consent by
it to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of Lessee or Guarantor of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the failure of Lessee or Guarantor generally to pay its
debts as such debts become due, or the taking of corporate action by
Lessee or Guarantor in furtherance of any such action.
(d) PAYMENT OF OBLIGATIONS. A default or event of default,
which results in the holder or holders of any Indebtedness of Lessee or
of Guarantor, or a trustee or agent on behalf of such holder or
holders, accelerating such Indebtedness prior to its stated maturity
under the provisions of any instrument evidencing Indebtedness in
excess of $1,000,000 of Lessee or Guarantor (or under the provisions of
any agreement pursuant to which such instrument was issued) or the
occurrence of a default as specified in Section 7.1(d)(iii) of the
Credit Agreement.
(e) MISREPRESENTATIONS. Any representation or warranty made by
Lessee herein or which is contained in any certificate, document or
financial or other statement furnished under or in connection with this
Agreement proves to be false or misleading in any material respect when
made or deemed made.
(f) DEFAULT UNDER LEASE DOCUMENTS. An Event of Default (as
defined in the Facilities Lease, the Agreement for Ground Lease or the
Ground Lease) shall occur and be continuing under the Facilities Lease,
the Agreement for Ground Lease or the Ground Lease, respectively.
(g) GUARANTY. An Event of Default under the Guaranty shall
occur and be continuing or any representation or warranty made by
Guarantor in the Guaranty, any Consent (as defined in the Facilities
Lease) or any document contemplated hereby or thereby proves to be
false or misleading in any material respect when made or deemed made or
the Guarantor defaults in the performance of any term, covenant,
condition or
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obligation contained in the Guaranty or any Consent, and such default
shall not have been cured within any applicable grace or cure period
and such default shall be continuing or any provision of the Guaranty
shall for any reason be terminated or cease to be in full force and
effect and a valid and binding obligation of the Guarantor, or the
Guarantor shall challenge or repudiate in writing its liability
thereunder.
(h) OTHER AGREEMENTS. Any Lessee or the Guarantor shall default
in any material respect in the performance or observance of any term,
covenant, condition or obligation contained in any other written
agreement between Lessee and Brazos or any Consent to which any Lessee
or Guarantor is a party and such default shall not have been cured
within any applicable grace or cure period.
(i) UNAUTHORIZED ASSIGNMENTS. Any assignment by Lessee of any
interest in this Agreement or any advance to be made hereunder other
than in accordance with the terms of this Agreement.
(j) CONSTRUCTION DOCUMENTS. Lessee shall default in any
material respects in the performance or observance of any term,
covenant, condition or obligation contained in any other written
agreement between Lessee and Brazos or any of the Construction
Documents, and such default shall not have been cured within any
applicable grace or cure period and such default shall be continuing.
(k) DEFAULT UNDER CORPORATE CREDIT DOCUMENTS. The occurrence
of any Default under any of the Corporate Credit Documents.
Section 8.2. RIGHTS UPON DEFAULT. Upon the occurrence and continuation
of any Event of Default, Brazos may in its discretion declare, in a writing
delivered to Lessee, this Agreement to be in default and do any one or more of
the following:
(a) Terminate this Agreement and/or Brazos' obligations to
make Initial Advances, Reconciliation Advances and Additional Advances
hereunder by giving written notice to that effect to Lessee;
(b) Terminate or suspend Lessee's right to act as agent of
Brazos under SECTION 2.4 by giving written notice to that effect to
Lessee;
(c) Recover from Lessee any sums due hereunder; and
(d) Exercise any other right or remedy which may be available
under applicable law and in general proceed by appropriate judicial
proceedings, either at law or in equity, to enforce the terms hereof or
to recover damages for the breach hereof.
Suit or suits for the recovery of any default in the payment of any sum
due hereunder or for damages may be brought by Brazos from time to time at
Brazos' election, and nothing herein contained shall be deemed to require Brazos
to await the date whereon this Agreement or the term hereof would have expired
by limitation had there been no such default by Lessee or no such termination or
cancellation.
The receipt of any payments under this Agreement by Brazos with
knowledge of any breach of this Agreement by Lessee or of any default by Lessee
in the performance of any of the terms, covenants or conditions of this
Agreement, shall not be deemed to be a waiver of any provision of this
Agreement.
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No receipt of moneys by Brazos from Lessee after the termination or
cancellation hereof in any lawful manner shall reinstate or continue this
Agreement or operate as a waiver of the right to receive any and all amounts
owing by Lessee to or on behalf of Brazos hereunder; it being agreed that, after
the service of notice to terminate or cancel this Agreement, and the expiration
of the time therein specified, if the default has not been cured in the
meantime, or after the commencement of suit, action or summary proceedings or of
any other remedy, or after a final order, warrant or judgment for the possession
of the Facility or FF&E, Brazos may demand, receive and collect any moneys
payable hereunder, without in any manner affecting such notice, proceedings,
suit, action, order, warrant or judgment; and any and all such moneys so
collected shall be deemed to be payments on account of Lessee's liability
hereunder.
Lessee shall be liable to Brazos for Brazos' obligations, costs, and
expenses reasonably incurred in connection with its obligations hereunder,
including, without limitation, all losses, damages and expenses (including,
without limitation, attorneys' fees and expenses) sustained by Brazos by reason
of such Event of Default and the exercise of Brazos' remedies with respect
thereto.
No remedy referred to in this SECTION 8.2 is intended to be exclusive,
but each shall be cumulative and in addition to any other remedy referred to
above or otherwise available to Brazos at law or in equity, and the exercise in
whole or in part by Brazos of any one or more of such remedies shall not
preclude the simultaneous or later exercise by Brazos of any or all such other
remedies. No waiver by Brazos of any Event of Default hereunder shall in any way
be, or be construed to be, a waiver of any future or subsequent Event of
Default.
Lessee hereby waives any and all rights to reinstate this Agreement as
permitted or provided by or under any statute, law or decision now or hereafter
in force and effect.
ARTICLE IX
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INDEMNITIES
Section 9.1. INDEMNIFIED PERSONS. Lessee shall indemnify and hold
harmless Brazos, each general and limited partner of Brazos, any Assignee, any
successor or successors and any Affiliate of each of them, and their respective
officers, directors, incorporators, shareholders, partners (general and limited,
including, without limitation, the general and limited partners of Brazos),
employees, agents and servants (each of the foregoing an "INDEMNIFIED PERSON")
from and against all liabilities, taxes, losses, obligations, claims, damages,
penalties, causes of action, suits, costs and expenses (including, without
limitation, reasonable attorneys' and accountants' fees and expenses) or
judgments of any nature, except to the extent resulting from gross negligence or
willful misconduct of such Indemnified Person, relating to or in any way arising
out of:
(a) The ordering, delivery, acquisition, construction, title on
acquisition, rejection, installation, possession, titling, retitling,
registration, reregistration, custody by Lessee of title and registration
documents, ownership, use, non-use, misuse, lease, operation, transportation,
repair, control or disposition of any Facility or FF&E;
(b) The assertion of any claim or demand based upon any infringement or
alleged infringement of any patent or other right, by or in respect of any
Facility or FF&E; provided, however, that upon request of Lessee, Brazos will
make available to Lessee Brazos' rights under any similar indemnification
arising from any manufacturer's or vendor's warranties or undertakings with
respect to any Facility or FF&E; or
(c) Any violation or alleged violation (other than an alleged violation
by Brazos) by Lessee of this Agreement or of any contracts or agreements to
which Lessee is a party or by which it is bound, or any laws, rules,
regulations, orders, writs, injunctions, decrees, consents, approvals,
exemptions, authorizations, licenses and withholdings of objection, of any
governmental or public body or authority and any other Legal Requirements,
including, without limitation, any Legal Requirements with respect to the
environment or the regulation of hazardous materials or substances, or any
breach of a representation or warranty by Lessee under this Agreement.
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Section 9.2. PAYMENTS. Lessee shall forthwith upon demand reimburse any
Indemnified Person for any sum or sums expended with respect to any of the items
set forth in SECTION 9.1 or, upon request from any Indemnified Person, shall pay
such amounts directly. Any payment made to or on behalf of any Indemnified
Person pursuant to this ARTICLE IX shall be increased to such amount as will,
after taking into account all taxes imposed with respect to the accrual or
receipt of such payment (as the same may be increased pursuant to this
sentence), equal the amount of the payment, reduced by the amount of any savings
in such taxes actually realized by the Indemnified Person as a result of the
payment or accrual of the amounts in respect of which the payment to or on
behalf of the Indemnified Person hereunder is made. Any Indemnified Person
seeking indemnification under this ARTICLE IX shall give Lessee written evidence
supporting the amount demanded, and such written evidence shall be deemed to be
conclusive, absent manifest error. To the extent that Lessee in fact indemnifies
any Indemnified Person under the indemnity provisions of this Agreement, Lessee
shall be subrogated to such Indemnified Person's rights in the affected
transaction and shall have a right to determine the settlement of claims
therein.
Section 9.3. CONTINUING INDEMNIFICATION. The indemnities contained in
this ARTICLE IX shall not be affected by and shall survive any termination of
this Agreement as a whole or in respect of any Facility or FF&E, or any failure
or refusal of Lessee to accept any Facility or FF&E constructed, acquired or
ordered pursuant to the terms hereof.
Section 9.4. LIMITATIONS.
(a) Brazos and Lessee agree that the activities of Lessee under the
Agreement for Facilities Lease relating to the preparation or approval of any
maps, drawings, opinions, reports, surveys, change orders, designs, or
specifications relating to any Facility is being done by Lessee in its capacity
as the prospective lessee of the Facility and not as the agent or employee of
Brazos. Lessee and Brazos agree that to the greatest extent possible without
causing any indemnification provision of the Agreement for Facilities Lease to
be void and unenforceable under the laws of any state, it is the intention of
the parties to the Agreement for Facilities Lease for Lessee to bear all
responsibility for and to indemnify Brazos against, except to the extent
resulting from the gross negligence or willful misconduct of Brazos, any
liability, claims, damages, losses or expenses, including attorneys fees,
arising out of the preparation or approval of any maps, drawings, opinions,
reports, surveys, change orders, designs, or specifications relating to the
Facility.
(b) Brazos and Lessee agree that the terms of any state law or the laws
of other jurisdictions which may affect the rights of any Indemnified Person or
Lessee under this ARTICLE IX may be set forth in the Memorandum of Facilities
Lease for the affected Facility or FF&E and shall apply as though set forth in
this Agreement.
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Section 9.5. LITIGATION. If any claim, action, proceeding or suit is
brought against an Indemnified Person with respect to which Lessee would be
required to indemnify such Indemnified Person, Lessee shall have the right to
assume the defense thereof, including the employment at its expense of counsel;
provided that Lessee shall not have such right, to the extent that such
Indemnified Person shall deliver to Lessee a written notice waiving the benefits
of the indemnification of such Indemnified Person provided by this ARTICLE IX in
connection with such claim, action, proceeding or suit. Notwithstanding the
foregoing, if (i) any claim, action, proceeding or suit is brought against an
Indemnified Person who is an individual, (ii) the action threatens to restrain
or adversely affect the conduct of the business of the Indemnified Person, but
not the business of Brazos' ownership of the Facilities or FF&E under this
Agreement, (iii) the claim, action, proceeding or suit seeks damages of more
than $1,000,000, or (iv) independent counsel to an Indemnified Person shall
conclude that there may be defenses available to the Indemnified Person which
may conflict with those available to Lessee, Lessee shall not have the right to
assume the defense of any such action on behalf of the Indemnified Person if
such Indemnified Person chooses to defend such action (with counsel reasonably
acceptable to Lessee), and all reasonable costs, expenses and attorneys' fees
incurred by the Indemnified Person in defending such action shall be borne by
Lessee. Notwithstanding the assumption of its defense by Lessee pursuant to this
paragraph, any Indemnified Person shall have the right to employ separate
counsel and to participate in its defense, but the fees and expenses of such
counsel shall be borne by the Indemnified Person. In addition, Lessee will not
be liable for any settlement of any claim, action, proceeding or suit unless
Lessee has consented thereto in writing. Any decision by an Indemnified Person
to employ its own counsel rather than counsel selected by Lessee (whether or not
at Lessee's expense) shall in no way affect any rights of such Indemnified
Person otherwise arising under this ARTICLE IX.
ARTICLE X
---------
PERMITTED CONTESTS
(a) Lessee shall not be required, nor shall Brazos have the right, to
pay, discharge or remove any tax, assessment, levy, fee, rent, charge, Lien or
encumbrance, or to comply or cause any Facility or FF&E to comply with any Legal
Requirements applicable to any Facility or FF&E or the occupancy, use or
operation thereof, so long as no Event of Default exists under this Agreement or
the Facilities Lease, and, in the opinion of Lessee's counsel, Lessee shall have
reasonable grounds to contest, and shall be diligently contesting, the
existence, amount, applicability or validity thereof by appropriate proceedings,
which proceedings in the reasonable judgment of Brazos, (i) shall not involve
any material danger that any Facility or FF&E would be subject to sale,
forfeiture or loss, as a result of failure to comply therewith, (ii) could not
result in any criminal liability from a failure to comply therewith, and could
not reasonably be expected to cause either Brazos or any Assignee to incur civil
liability which, in the sole judgment of Brazos or any Assignee, is not
adequately indemnified (Lessee's obligations under ARTICLE IX of this Agreement
shall be deemed to be adequate indemnification if no Event of Default or
Potential Default exists and if such civil liability is reasonably likely to be
less than $100,000 per Facility or FF&E and $1,000,000 in the aggregate), (iii)
shall be permitted under the provisions of the Acquired Facilities Lease, if
any, on such Facility or FF&E, (iv) if involving taxes, shall suspend the
collection of such taxes and (v) shall be permitted under and be conducted in
accordance with the provisions of any other instrument to which Lessee or the
Facility or FF&E is subject and shall not constitute a default thereunder.
Lessee shall conduct all such contests in good faith and with due diligence and
shall promptly after the final determination (including appeals) of such
contest, pay and discharge all amounts which shall be determined to be payable
therein.
(b) At least ten (10) days prior to the commencement thereof, Lessee
shall notify Brazos in writing of any such proceeding in which the amount in
contest exceeds $100,000, and shall describe such proceeding in reasonable
detail. If a taxing authority or subdivision thereof proposes an additional
assessment or levy of any tax for which Lessee is obligated to reimburse Brazos
under this Agreement, or if Brazos is notified of the commencement of an audit
or similar proceeding which could result in such an additional assessment, then
Brazos shall in a timely manner notify Lessee in writing of such proposed levy
or proceeding.
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ARTICLE XI
----------
MISCELLANEOUS
Section 11.1. SURVIVAL. All agreements, indemnities, representations,
and warranties shall survive the expiration or other termination hereof.
Section 11.2. ENTIRE AGREEMENT. This Agreement and the instruments,
documents or agreements referred to herein constitute the entire agreement
between the parties and no representations, warranties, promises, guarantees or
agreements, oral or written, express or implied, have been made by any party
hereto with respect to this Agreement or the Facilities, except as provided
herein or therein.
Section 11.3. MODIFICATIONS. This Agreement may not be amended,
modified or terminated, nor may any obligation hereunder be waived orally, and
no such amendment, modification, termination or waiver shall be effective for
any purpose unless it is in writing, signed by the party against whom
enforcement thereof is sought. A waiver on one occasion shall not be construed
to be a waiver with respect to any other occasion.
Section 11.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
ANY PROVISION OF THIS AGREEMENT WHICH IS PROHIBITED BY LAW OR UNENFORCEABLE IN
ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF
SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT INVALIDATING THE REMAINING
PROVISIONS HEREOF, AND THE PARTIES HERETO SHALL NEGOTIATE IN GOOD FAITH
APPROPRIATE MODIFICATIONS TO REFLECT SUCH CHANGES AS MAY BE REQUIRED BY LAW,
AND, AS NEARLY AS POSSIBLE, TO PRODUCE THE SAME ECONOMIC EFFECTS AS THE
PROVISION WHICH IS PROHIBITED OR UNENFORCEABLE; AND ANY SUCH PROHIBITION OR
UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER
UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION. TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BRAZOS AND LESSEE HEREBY WAIVE ANY PROVISION OF LAW WHICH
RENDERS ANY PROVISION HEREOF PROHIBITED OR UNENFORCEABLE IN ANY RESPECT.
Section 11.5. NO OFFSETS. The obligations of Lessee to pay all amounts
payable pursuant to this Agreement shall be absolute and unconditional under any
and all circumstances of any character, and such amounts shall be paid without
notice, demand, defense, setoff, deduction or counterclaim and without
abatement, suspension, deferment, diminution or reduction of any kind
whatsoever, except as herein expressly otherwise provided.
LESSEE HAS SELECTED AND SHALL SELECT ALL FACILITIES AND FF&E
CONSTRUCTED, ACQUIRED OR ORDERED ON THE BASIS OF ITS OWN JUDGMENT. NEITHER
BRAZOS NOR ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR ANYONE ACTING ON BEHALF
OF ANY OF THEM, MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, AS TO THE SAFETY, TITLE,
CONDITION, QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, ENVIRONMENTAL CONDITION (INCLUDING THE PRESENCE OR ABSENCE OF
HAZARDOUS MATERIALS), OR ANY OTHER CHARACTERISTIC, OF ANY FACILITY OR FF&E, OR
AS TO WHETHER ANY FACILITY OR FF&E OR THE OWNERSHIP, USE, OCCUPANCY OR
POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES, REGULATIONS OR REQUIREMENTS OF
ANY KIND.
AS BETWEEN BRAZOS AND LESSEE, ANY ASSIGNEE OR ANY INDEMNIFIED PERSON,
AND TO THE EXTENT ALLOWED BY LAW AND EXCEPT AS OTHERWISE PROVIDED HEREIN, LESSEE
ASSUMES ALL RISKS AND WAIVES ANY AND ALL DEFENSES, SET-OFFS, DEDUCTIONS,
COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR FUTURE, TO ITS OBLIGATION TO PAY
ALL AMOUNTS PAYABLE HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY RELATING TO:
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(a) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY FACILITY OR FF&E, LATENT OR NOT;
(b) ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT, DEFENSE OR OTHER
RIGHT WHICH LESSEE MAY HAVE AGAINST BRAZOS, ANY ASSIGNEE, OR ANY INDEMNIFIED
PERSON FOR ANY REASON WHATSOEVER ARISING OUT OF THIS OR ANY OTHER TRANSACTION OR
MATTER;
(c) ANY DEFECT IN TITLE OR OWNERSHIP OF ANY FACILITY OR FF&E OR ANY
TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE FACILITIES OR
FF&E;
(d) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT OR DESTRUCTION
OF, OR DAMAGE TO, ANY FACILITY OR FF&E IN WHOLE OR IN PART, OR CESSATION OF THE
USE OR POSSESSION OF ANY FACILITY OR FF&E BY LESSEE FOR ANY REASON WHATSOEVER
AND OF WHATEVER DURATION, OR ANY CONDEMNATION, CONFISCATION, REQUISITION,
SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY FACILITY OR FF&E, IN WHOLE OR IN
PART;
(e) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE, OWNERSHIP,
OCCUPANCY OR POSSESSION OF THE FACILITIES OR FF&E BY LESSEE;
(f) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR PROCEEDING BY
OR AGAINST LESSEE, GUARANTOR OR BRAZOS;
(g) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS;
(h) THE INVALIDITY OR UNENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER
INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF BRAZOS OR LESSEE TO ENTER
INTO THIS AGREEMENT; OR
(i) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER, WHETHER OR NOT
SIMILAR TO ANY OF THE FOREGOING.
LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE
CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE, CANCEL, QUIT, RESCIND
OR SURRENDER THIS AGREEMENT EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS HEREOF.
NOTHING CONTAINED IN THIS SECTION 11.5 SHALL BE DEEMED TO BENEFIT ANY THIRD
PARTY OR TO CONSTITUTE A WAIVER OR LIMITATION OF ANY RIGHT THAT LESSEE MAY HAVE
AGAINST ANY OTHER PERSON, INCLUDING, WITHOUT LIMITATION, ANY LESSOR OF AN
ACQUIRED FACILITIES LEASE (OTHER THAN BRAZOS) OR ANY PRIOR OWNER OF ANY
FACILITY.
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Section 11.6. NON-RECOURSE. Brazos' obligations hereunder are intended
to be the limited obligations of the limited partnership and of the corporation
which is the general partner thereof. Notwithstanding any other provision of
this Agreement, Lessee agrees that, except for a breach by Brazos of SECTION
11.12 or SECTION 11.14, the personal liability of Brazos and the limited
partners of Brazos shall be strictly and absolutely limited to the Facilities
and FF&E and no recourse for the payment of any amount due under this Agreement
or the Construction Documents, or for any claim based thereon or otherwise in
respect thereof, shall be had against any other assets of the limited
partnership or of the general or of any limited partner of Brazos or of any
incorporator, shareholder, officer, director or Affiliate (past, present or
future) of such general partner or limited partner of Brazos or of any Affiliate
of either, or of any successor corporation to any corporate general partner or
any corporate limited partner of Brazos, it being understood that Brazos is a
limited partnership entering into the transactions involved in and relating to
this Agreement, the Facilities Lease and the Construction Documents on the
express understanding aforesaid.
Section 11.7. NOTICES.
(a) Any notice or request which by any provision of this Agreement is
required or permitted to be given by either party to the other shall be deemed
to have been given when delivered by hand (including, delivery by courier),
three (3) Business Days after being deposited in the mail, postage prepaid, by
certified or registered mail or, if promptly confirmed by mail or by
hand-delivery, as provided above, when sent by telex, or other written
telecommunication, addressed to the following specified addresses or to such
other addresses as Brazos or Lessee may specify by written notice to the other
party:
If to Brazos:
Brazos Automotive Properties, L.P.
c/o Brazos Automotive Properties Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ Financial, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Equipment Finance Division,
Portfolio Manager
If to Agent or Assignee:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lessee:
Monro Leasing, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, Senior Vice-President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ ▇ ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to any Assignee at such other address as such Assignee may specify
by written notice to Brazos and Lessee.
(b) Brazos shall within five (5) Business Days give to Lessee a copy of
all notices received by Brazos pursuant to any Credit Agreement or any Acquired
Facility Lease and any other notices received with respect to any Property.
Section 11.8. FUNDAMENTAL CHANGES. Lessee shall not consolidate with or
merge into any other corporation which is not a Subsidiary or sell all or
substantially all of its assets to any Person which is not a Subsidiary, except
that Lessee may consolidate with or merge into any other corporation, or sell
all or substantially all of its assets to any Person; provided that, (i) no
default or event of default occurs under the Corporate Credit Documents and (ii)
the surviving corporation or transferee Person shall assume, by execution and
delivery of instruments satisfactory to Brazos and Agent, the obligations of
Lessee hereunder and become successor to Lessee, but Lessee, if it is a
surviving corporation, shall not thereby be released, without the consent of
Brazos, such consent not to be unreasonably withheld or delayed, from its
obligations hereunder and, provided further, that such surviving corporation or
transferee Person will, on a pro forma basis, immediately after such
consolidation, merger or sale, possess a consolidated net worth greater than or
equal to that of Lessee immediately prior to such consolidation, merger or sale
and provided further that each Guarantor shall reaffirm its obligations under
the Guaranty by execution and delivery of instruments satisfactory to Brazos and
Agent and no Event of Default shall have occurred or result therefrom. Lessee
may assign its rights and obligations under this Agreement with respect to any
Facility or FF&E to a Subsidiary of Lessee; provided that Lessee shall, in
connection with any such assignment, continue to be liable hereunder without
regard to such assignment and Lessee shall guaranty the performance of all
obligations of such assignee.
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Section 11.9. USURY. No provision of this Agreement or any other
instrument relating to this Agreement, shall require the payment or permit the
collection of interest in excess of the maximum nonusurious interest rate under
applicable law (the "MAXIMUM RATE"). If any excess interest in such respect is
so provided for, or shall be adjudicated to be so provided for, the provisions
of this SECTION 11.9 shall govern, and neither Lessee nor its successors or
assigns shall be obligated to pay the amount of such interest to the extent it
is in excess of the Maximum Rate. In determining the Maximum Rate, any interest
shall be spread over the term of this Agreement to the extent permitted by
applicable U.S. Federal or state law, notwithstanding the actual time for the
payment of any rent or other amounts hereunder. It is expressly stipulated and
agreed to be the intent of Brazos and Lessee at all times to comply with
applicable state law governing the Maximum Rate or the amount of interest
payable pursuant to this Agreement (or applicable U.S. Federal law to the extent
that it permits Brazos to contract for, charge, take, reserve or receive a
greater amount of interest than under state law). If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under this
Agreement, the Agreement or any of the other documents relating to this
Agreement or any amount contracted for, charged, taken, reserved or received
with respect to this Agreement, or if Brazos' exercise of any option herein or
in any other document contained to accelerate the payment of amounts required
hereunder results in Lessee having paid any interest in excess of that permitted
by applicable law, then it is Brazos' and Lessee's intent that all excess
amounts theretofore collected by Brazos be credited on the remaining balance of
payments due hereunder (or, if all amounts due hereunder have been or would
thereby be paid in full, refunded to Lessee) and the provisions of this
Agreement shall immediately be deemed reformed in the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and under any
other document relating hereto. If at any time the amount of any interest for a
year, would, but for this SECTION 11.9 exceed the amount of interest that would
have been accrued during such year if the Maximum Rate had from time to time
been in effect, the total interest payable for such year shall be limited to the
amount that would have been accrued if the Maximum Rate had from time to time
been in effect, and to the fullest extent permitted by applicable law, such
excess shall be (i) spread and allocated to the preceding periods in which the
interest paid was less than the interest that would have been accrued at the
Maximum Rate or (ii) spread and allocated to subsequent periods in which the
total payments on account of interest are less than the interest that would have
accrued at the Maximum Rate.
Section 11.10. NO WAIVERS. No advance hereunder shall constitute a
waiver of any of the conditions of Brazos' obligation to make further advances
nor, if Lessee is unable to satisfy any such condition, shall any waiver of such
condition have the effect of precluding Brazos from thereafter declaring such
inability to be an Event of Default as herein provided. Any advance made by
Brazos and any sums expended by Brazos pursuant to this Agreement shall be
deemed to have been made pursuant to this Agreement, notwithstanding the
existence of an uncured Event of Default. No advance at a time when an Event of
Default exists shall constitute a waiver of any right or remedy of Brazos
existing by reason of such Event of Default, including, without limitation, the
right to refuse to make further advances.
Section 11.11. BRAZOS AND ASSIGNEE SOLE BENEFICIARIES. All conditions
of the obligation of Brazos to make advances hereunder are imposed solely and
exclusively for the benefit of Brazos and Assignee and their assigns and no
other person shall have standing to require satisfaction of such conditions in
accordance with their terms or be entitled to assume that Brazos will refuse to
make advances in the absence of strict compliance with any or all thereof and no
other person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Brazos, with the consent of Agent, at any time if in its sole discretion it
deems it advisable to do so. Inspections and approvals of Facility Plans,
Facilities and FF&E and the workmanship and materials used therein impose no
responsibility or liability of any nature whatsoever on Brazos or Assignee, and
no person shall, under any circumstances, be entitled to rely upon such
inspections and approvals by Brazos or Agent for any reason. Brazos' sole
obligation hereunder is to make the advances if and to the extent required by
this Agreement.
Section 11.12. SALE OR ASSIGNMENT BY BRAZOS.
(a) Brazos shall not sell mortgage or encumber or assign its right,
title, interest or obligations in a Facility or FF&E or under this Agreement,
except that Brazos shall have the right to finance the acquisition and ownership
of the
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Facilities by selling, assigning or granting a security interest in its right,
title and interest in this Agreement as provided in the Credit Agreement and any
or all amounts due from Lessee or any third party under this Agreement as
provided in the Credit Agreement; provided that any such sale, assignment or
grant of a security interest shall be subject to the rights and interests of
Lessee under this Agreement and the Facilities Lease.
(b) Upon the occurrence of an event of default under the Credit
Agreement, any Assignee shall, except as otherwise agreed by Brazos and
Assignee, have all the rights, powers, privileges and remedies of Brazos
hereunder, and Lessee's obligations as between itself and such Assignee
hereunder shall not be subject to any claims or defense that Lessee may have
against Brazos. Upon written notice to Lessee of any such assignment, Lessee
shall attorn to any Assignee, and Lessee shall thereafter make payments of any
and all sums due hereunder to Assignee, to the extent specified in such notice,
and such payments shall discharge the obligation of Lessee to Brazos hereunder
to the extent of such payments. Anything contained herein to the contrary
notwithstanding, no Assignee shall be obligated to perform any duty, covenant or
condition required to be performed by Brazos hereunder, and any such duty,
covenant or condition shall be and remain the sole obligation of Brazos except
as set forth in the Subordination, Non-Disturbance and Attornment Agreement (as
defined in the Credit Agreement) for each Facility or FF&E.
Section 11.13. RIGHTS CUMULATIVE. All rights, powers and remedies
herein given to Brazos are cumulative and not alternative, and are in addition
to all statutes or rules of law; any forbearance or delay by Brazos in
exercising the same shall not be deemed to be a waiver thereof, and the exercise
of any right or partial exercise thereof shall not preclude the further exercise
thereof, and the same shall continue in full force and effect until specifically
waived by an instrument in writing executed by Brazos. All representations and
covenants by Lessee shall survive the making of the advances, and the provisions
hereof shall be binding upon and inure to the benefit of the respective
successors and permitted assigns, if any, of the parties hereto. Lessee may not,
however, assign its rights or obligations as agent hereunder other than in
accordance with the terms of this Agreement.
Section 11.14. REASSIGNMENT. In the event that Lessee advances its own
funds for the acquisition of any Facility or FF&E in the name of Brazos and an
Initial Advance for such Facility or FF&E is not made under this Agreement for
any reason, including a default on the part of Lessee, Brazos hereby agrees to
execute all instruments of assignment and transfer with respect to such Facility
or FF&E, without warranty (except for special warranties against the actions of
Brazos), or recourse to Brazos except to the extent of any applicable title
insurance, which may be necessary to transfer all of Brazos' right, title and
interest in and to such Facility or FF&E to Lessee. Any Facility or FF&E which
is assigned and transferred by Brazos to Lessee pursuant to this Section shall
not thereafter be acquired by Brazos or by Lessee on behalf of Brazos under this
Agreement. All agreements, indemnities, warranties and representations of Lessee
pertaining to such Facility or FF&E shall survive any transfer by Brazos to
Lessee pursuant to this SECTION 11.14. The obligations of Brazos under this
SECTION 11.14 shall survive any termination of this Agreement.
Section 11.15. SEVERABILITY. In case one or more provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected or impaired thereby.
Section 11.16. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 11.17. CONFIDENTIALITY. Brazos shall keep confidential all
information of a confidential nature received by it from Lessee pursuant to this
Agreement; provided, however, that such information may be disclosed where
necessary: (i) to directors, officers, employees, agents, representatives or
outside counsel of Brazos or of the Agent or any Bank or any Affiliate of any
Bank under any Credit Agreement; (ii) to any auditor, government official or
examiner; (iii) pursuant to any subpoena or other court order or otherwise as
may be required by applicable law; or (iv) to any assignee of or participant in,
or prospective assignee of or participant in, any Bank's Advances or its
Commitment or any part thereof under any Credit Agreement who, in each case,
agrees in writing to be bound by the terms of this Section; and provided
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further, that no confidentiality obligation shall attach to any information
which (1) is or becomes publicly known, through no wrongful act on the part of
any Person who shall have received such information, (2) is rightfully received
by such Person from a third party, (3) is independently developed by such
Person, or (4) is explicitly approved for release by Lessee.
Section 11.18. EXECUTION BY LESSEE. By execution of the Memorandum of
Lease for a Facility or FF&E, Lessee agrees to all of the terms and conditions
of this Agreement and is deemed to have executed this Agreement as of the date
of the request for advance with respect to such Facility or FF&E.
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IN WITNESS WHEREOF, Brazos and Lessee have caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first above written.
BRAZOS AUTOMOTIVE PROPERTIES, L.P.,
a Delaware limited partnership
By: BRAZOS AUTOMOTIVE PROPERTIES MANAGEMENT,
INC., a Delaware corporation, its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
MONRO LEASING, LLC,
a Delaware limited liability company
By: MONRO MUFFLER BRAKE, INC., its Sole Member
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇'▇▇▇▇▇, Senior Vice President
and Chief Financial Officer
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THE STATE OF NEW YORK }
}
COUNTY OF NEW YORK }
On the 15th day of September 1998, before me personally came ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, who, being by me duly sworn, did depose and say that he is the
Executive Vice President of BRAZOS AUTOMOTIVE PROPERTIES MANAGEMENT, INC., a
Delaware corporation, the General Partner of BRAZOS AUTOMOTIVE PROPERTIES, L.P.,
a Delaware limited partnership, and as said officer executed the foregoing
instrument.
--------------------------------------------
NOTARY PUBLIC IN AND FOR THE
STATE OF NEW YORK
[SEAL]
THE STATE OF NEW YORK }
}
COUNTY OF NEW YORK }
On the 15th day of September 1998, before me personally came ▇▇▇▇▇▇▇▇▇
▇'▇▇▇▇▇ who, being by me duly sworn, did depose and say that she is the Senior
Vice President and Chief Financial Officer of MONRO MUFFLER BRAKE, INC., a New
York corporation, the Sole Member of MONRO LEASING, LLC, a Delaware limited
liability company, and as said officer executed the foregoing instrument.
--------------------------------------------
NOTARY PUBLIC IN AND FOR THE
STATE OF NEW YORK
[SEAL]
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EXHIBIT A
FORM OF FACILITIES LEASE AGREEMENT
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Facility or FF&E No.______________
EXHIBIT "B"
INITIAL ADVANCE CERTIFICATE
MONRO LEASING, LLC ("LESSEE"), the Lessee under a certain Agreement for
Facilities Lease (the "AGREEMENT FOR FACILITIES LEASE") dated as of September
15, 1998, between BRAZOS AUTOMOTIVE PROPERTIES, L.P. ("OWNER") and Lessee,
delivers this Initial Advance Certificate as a part of Lessee's Request for
Initial Advance made with respect to the above noted Facility or FF&E. All
capitalized terms used in this Certificate shall have the meanings given to such
terms in the Agreement for Facilities Lease. Lessee hereby certifies, warrants
and represents to Owner as follows:
1. LEGAL DESCRIPTION. Accompanying this Certificate is a copy of
the form of ▇▇▇▇ of Sale by which the Facility or FF&E will be
conveyed to Owner.
2. ITEMIZATION OF COSTS. Accompanying this Certificate is a true,
complete, and correct Statement of Expenditures incurred to
date or to be incurred in connection with the closing of the
acquisition of Owner's interest in the Facility or FF&E. Each
item in the Statement of Expenditures is for the Facility or
FF&E described herein and is within the Budget approved by
Agent.
3. TITLE. To the best of Lessee's knowledge, after due inquiry, no
mechanics' or materialmen's liens have been filed in connection
with the Facility or FF&E, and, with respect to a Facility,
with the exception of the Deed of Trust, Security Agreement,
Assignment of Rents and Fixture Filing granted by Owner in
connection with the acquisition of the Property, there are no
recorded mechanics' or materialmen's liens or other Liens of
Record affecting the title to the Facility or FF&E.
All matters affecting title to the Facility or FF&E as to which
Lessee has any knowledge, recorded or unrecorded, are disclosed
to Owner in writing as reflected in the documents constituting
this Request for Initial Advance with respect to such Facility
or FF&E, and all such matters are Permitted Exceptions.
4. TAXES. Taxes have not yet been levied on the subject Facility
or FF&E. When taxes are levied they will be paid by Lessee.
5. REPRESENTATIONS. Lessee represents to Owner that (a) all costs
and expenses which are the subject of the Initial Advance
requested hereby have been or will be paid in full out of the
proceeds of this Initial Advance; (b) all representations,
covenants, and warranties of Lessee contained in the Agreement
for Facilities Lease and in the Facilities Lease are true and
correct in all material respects as of the date hereof; (c) all
additional matters required by Section 6.1 of the Agreement for
Facilities Lease are enclosed herewith; and (d) no Event of
Default exists under the Agreement for Facilities Lease, and
none will arise after giving effect to the Initial Advance to
be made hereunder.
6. INSURANCE. Lessee maintains the insurance coverage required by
the Facilities Lease as indicated by the certificates of
insurance previously delivered to Owner or to be delivered on
or after closing to Owner. Such insurance will be effective as
to the subject Facility or FF&E upon acquisition thereof by
Owner.
Dated as of ______________.
MONRO LEASING, LLC
By: MONRO MUFFLER BRAKE, INC., its Sole Member
By:________________________________
Name:______________________________
Title:_____________________________
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Facility or FF&E No.______________
EXHIBIT "C"
RECONCILIATION CERTIFICATE
MONRO LEASING, LLC ("LESSEE"), the Lessee under a certain Agreement for
Facilities Lease (the "AGREEMENT FOR FACILITIES LEASE") dated as of September
15, 1998, between BRAZOS AUTOMOTIVE PROPERTIES, L.P. ("OWNER") and Lessee,
delivers this Reconciliation Certificate as part of Lessee's Request for
Reconciliation Advance made with respect to the above noted Facility or FF&E.
All capitalized terms used in this Certificate shall have the meanings given to
such terms in the Agreement for Facilities Lease. Lessee hereby certifies,
warrants and represents to Owner as follows:
1. COMPLETION OF ACQUISITION. The completion of the acquisition
or construction of the Facility or FF&E has occurred.
2. STATEMENT OF EXPENDITURES. Attached hereto is a true,
complete, and correct Statement of Expenditures actually
incurred in connection with the acquisition or construction of
the Facility or FF&E and for which the Reconciliation Advance
is being made. The Initial Advance was $________. With the
Reconciliation Advance, the total expenditures will be
$_________. Each item in the Statement of Expenditures is for
the Facility or FF&E described herein and is within the Budget
approved by Agent.
3. TITLE. After matters affecting title to the Facility or FF&E
as to which Lessee has any knowledge, recorded or unrecorded,
are described in an Exhibit attached hereto or were disclosed
to Owner in writing as reflected in the documents constituting
the Request for Initial Advance with respect to such Facility
or FF&E, and all such matters are Permitted Exceptions. To the
best of Lessee's knowledge, since the Initial Advance there
has been no change in the state of title of the Facility or
FF&E.
4. REPRESENTATIONS. Lessee represents to Owner that (a) all costs
and expenses which are the subject of the Reconciliation
Advance requested hereby are amounts which have been paid by
Lessee and all such amounts have been paid in connection with
the acquisition or construction of the Facility or FF&E, (b)
all representations, covenants and warranties of Lessee
contained in the Agreement for Facilities Lease and in the
Facilities Lease are true and correct in all material respects
as of the date hereof, (c) all additional matters required by
Section 7.1 of the Agreement for Facilities Lease are enclosed
herewith, and (d) no Event of Default exists under the
Agreement for Facilities Lease, and none will arise after
giving effect to the Reconciliation Advance to be made
hereunder.
5. INSURANCE. Lessee maintains the insurance coverage required by
the Facilities Lease as indicated by the certificate of
insurance delivered to Owner or to be delivered on or after
closing to Owner. Such insurance is effective with respect to
the Facility or FF&E and complies with the terms of the
Facilities Lease.
Dated as of ______________.
MONRO LEASING, LLC
By: MONRO MUFFLER BRAKE, INC., its Sole Member
By:________________________________
Name:______________________________
Title:_____________________________
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Facility or FF&E No.______________
EXHIBIT "D"
ADDITIONAL ADVANCE CERTIFICATE
MONRO LEASING, LLC ("LESSEE"), the Lessee under a certain Agreement for
Facilities Lease (the "AGREEMENT FOR FACILITIES LEASE") dated as of September
15, 1998, between BRAZOS AUTOMOTIVE PROPERTIES, L. P. ("OWNER") and Lessee,
delivers this Additional Advance Certificate as part of Lessee's Request for
Additional Advance made with respect to Additional Improvements to the above
noted Facility or FF&E. All capitalized terms used in this Certificate shall
have the meanings given to such terms in the Agreement for Facilities Lease.
Lessee hereby certifies, warrants and represents to Owner as follows:
1. LEGAL DESCRIPTION. Accompanying this Certificate is a copy of
the form of Deed and ▇▇▇▇ of Sale by which the Additional
Improvements will be conveyed to Owner, which sets forth a
true and complete legal description for the Additional
Improvements.
2. ITEMIZATION OF COSTS. Accompanying this Certificate is a true,
complete, and correct Statement of Expenditures incurred to
date or to be incurred in connection with the closing of the
acquisition of Owner's interest in the Additional
Improvements. Each item in the Statement of Expenditures is
for the Facility or FF&E described herein and is within the
Budget approved by Agent.
3. TITLE. To the best of Lessee's knowledge, after due inquiry,
no mechanics' or materialmen's liens have been filed in
connection with the Additional Improvements, and with the
exception of the Deed of Trust, Security Agreement, Assignment
of Rents and Fixture Filing granted by Owner in connection
with the acquisition of the Additional Improvements, there are
no recorded mechanics' or materialmen's liens or other Liens
of Record affecting the title to the Additional Improvements.
All matters affecting title to the Additional Improvements as
to which Lessee has any knowledge, recorded or unrecorded, are
disclosed to Owner in writing as reflected in the documents
constituting this Request for Additional Advance with respect
to such Additional Improvements, and all such matters are
Permitted Exceptions.
4. TAXES. Taxes levied on the subject Additional Improvements for
years prior to ___________ have been paid in full.
5. REPRESENTATIONS. Lessee represents to Owner that (a) all costs
and expenses which are the subject of the Additional Advance
requested hereby have been or will be paid in full out of the
proceeds of this Additional Advance, (b) all representations,
covenants, and warranties of Lessee contained in the Agreement
for Facilities Lease and in the Facilities Lease are true and
correct in all material respects as of the date hereof, (c)
all additional matters required by Section 6.1 of the
Agreement for Facilities Lease are enclosed herewith, and (d)
no Event of Default exists under the Agreement for Facilities
Lease or Facilities Lease Agreement, and none will arise after
giving effect to the Additional Advance to be made hereunder.
6 . INSURANCE. Lessee maintains the insurance coverage required by
the Facilities Lease as indicated by the certificates of
insurance previously delivered to Owner or to be delivered on
or after closing to Owner. Such insurance will be effective as
to the Additional Improvements upon acquisition thereof by
Owner.
Dated as of __________________. MONRO LEASING, LLC
By: MONRO MUFFLER BRAKE, INC., its Sole Member
By:______________________________________________
Name:____________________________________________
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Title:___________________________________________
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EXHIBIT "E"
FORM OF LOCAL COUNSEL OPINION
1. The form of the Deed of Trust and Assignment of Leases and Rents to
be filed in _____________ is in proper form under applicable law to (a) be
accepted for recording in the office of the [Recorder of Deeds] in and for any
county in ________________; (b) create and constitute a valid mortgage lien on
or security interest in the [Trust Estate (as defined in such Deed of Trust and
Assignment of Leases and Rents)]; and (c) be enforceable against the Borrower,
in accordance with its terms.
2. The recording of the Deed of Trust to be filed in ________________
with the office of the [Recorder of Deeds] in the county where the real property
to be encumbered is located is the only recording or filing necessary to publish
notice to perfect the liens and security interests created by the Deed of Trust
and Assignment of Leases and Rents to the extent such liens and security
interests may be perfected under the laws of _________________.
3. Except for the payment of recording or filing fees with respect to
UCC-1 Financing Statements and any Deed of Trust to be filed in
___________________ no other taxes and governmental fees and charges are
required by any applicable Governmental Authority in connection with (a) the
creation, perfection, or the recording of the liens purported to be created by
the Security Documents, (b) the execution and delivery of the Credit Documents,
or (c) the obtaining of credit under the Credit Agreement.
4. Upon the filing of appropriate UCC-1 Financing Statements with the
_____________ Secretary of State, the security interests of the Banks in the
Collateral created by the Security Agreement will constitute perfected security
interests under the Uniform Commercial Code as in effect to the extent that a
security interest in the Collateral may be perfected by filing with the
_______________
5. The Lease Documents are in acceptable legal form and constitute
legal, valid, and binding obligations of the respective parties thereto
enforceable against them under __________________ law in accordance with the
terms of such documents.
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EXHIBIT "F"
FORM OF REQUEST FOR INITIAL ADVANCE
September 15, 1998
Brazos Automotive Properties, L.P.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Re: Request for Initial Advance for Facility No. ___________,
located at ________________________________
Dear ▇▇. ▇▇▇▇▇▇:
This Request for Initial Advance is delivered pursuant to the Lease
Documents dated as of September 15, 1998, between Brazos Automotive Properties,
L.P. ("BRAZOS") and Monro Leasing, LLC ("MONRO"). The complete Request for
Initial Advance consists of this statement and the various documents provided
herewith, and the complete Request for Initial Advance is being provided to
legal counsel for Brazos and The Chase Manhattan Bank, respectively. All
documents provided herewith, including the Initial Advance Certificate, are true
and correct. All capitalized terms used herein shall have the meanings given to
such terms in either the Agreement for Ground Lease or the Agreement for
Facilities Lease, whichever is applicable.
It is contemplated that the Effective Date of the Facility, as will be
evidenced by a Facility Leasing Record, will be September 15, 1998 and you are
requested to pay on that date the sum of $____________ (comprised of a ground
advance of $________________ and a facility advance of $_____________) by wire
transfer of immediately available funds to CHICAGO TITLE INSURANCE COMPANY. The
representative of MONRO to contact with regard to the wire transfer is ▇▇▇▇▇▇▇▇▇
▇'▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇.
MONRO LEASING, LLC,
a Delaware limited liability company
By: MONRO MUFFLER BRAKE, INC.,
a New York corporation, its Sole Member
By:_______________________________________
Name:_____________________________________
Title:____________________________________
Enclosures
cc: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Gardere ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE 4.13
LIST OF ACQUIRED FACILITIES LEASES
-NONE-
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