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EXHIBIT 10.7
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GROUND LEASE AGREEMENT
between
BRAZOS AUTOMOTIVE PROPERTIES, L.P.
and
MONRO LEASING, LLC
Dated as of September 15, 1998
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THIS GROUND LEASE AGREEMENT HAS BEEN ASSIGNED AS
SECURITY FOR INDEBTEDNESS OF BRAZOS AUTOMOTIVE PROPERTIES, L.P.
SEE SECTION 18.10
This Ground Lease Agreement has been manually executed in 6 counterparts,
numbered consecutively from 1 through 10, of which this is No. . To the extent,
if any, that this Ground Lease Agreement constitutes chattel paper (as such term
is defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction) no security interest in this Ground Lease Agreement may be created
or perfected through the transfer or possession of any counterpart other than
the original executed counterpart which shall be the counterpart identified as
counterpart No. 1.
2
TABLE OF CONTENTS
GROUND LEASE AGREEMENT
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ARTICLE I DEFINITIONS............................................................................................1
Section 1.1. Defined Terms..............................................................................1
Section 1.2. Forms......................................................................................7
Section 1.3. Recitals, Table of Contents, Titles, and Headings..........................................7
Section 1.4. Interpretation.............................................................................7
ARTICLE II REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE..................................................7
Section 2.1. Corporate Matters..........................................................................7
Section 2.2. Authorization; Binding Agreement...........................................................7
Section 2.3. Power and Authority........................................................................8
Section 2.4. Consents, Approvals, Authorizations........................................................8
Section 2.5. Financial Statements.......................................................................8
Section 2.6. Changes....................................................................................8
Section 2.7. Litigation.................................................................................8
Section 2.8. Delivery of Information....................................................................9
Section 2.9. Compliance with Legal Requirements and Insurance Requirements..............................9
Section 2.10. Agreement for Ground Lease................................................................9
Section 2.11. Property Liens...........................................................................10
Section 2.12. Brokerage................................................................................10
Section 2.13. Suitability of Property..................................................................10
ARTICLE III LEASE OF PROPERTY...................................................................................10
Section 3.1. Lease.....................................................................................10
Section 3.2. Property Leasing Record...................................................................10
Section 3.3. Ownership of Property.....................................................................11
Section 3.4. Brazos Covenants..........................................................................12
Section 3.5. Security..................................................................................12
ARTICLE IV DELIVERY AND ACCEPTANCE..............................................................................12
Section 4.1. Acceptance................................................................................12
Section 4.2. Payments Final............................................................................12
Section 4.3. No Warranties or Representations. ........................................................12
Section 4.4. Quiet Enjoyment...........................................................................13
Section 4.5. Indemnity to Title Insurance..............................................................13
Section 4.6. Other Financing Requirements..............................................................13
ARTICLE V LEASE TERM............................................................................................13
Section 5.1. Lease Term................................................................................13
Section 5.2. Termination...............................................................................13
(i)
3
ARTICLE VI RENT AND OTHER PAYMENTS..............................................................................13
Section 6.1. Basic Rent................................................................................13
Section 6.2. Other Amounts.............................................................................13
Section 6.3. Additional Rent...........................................................................14
Section 6.4. Payment in Advance........................................................................14
Section 6.5. Credit Agreement Losses...................................................................14
ARTICLE VII RESTRICTED USE; COMPLIANCE WITH LAWS................................................................14
Section 7.1. Insurance Requirement and Legal Requirement...............................................14
Section 7.2. Filings...................................................................................14
Section 7.3. Compliance with Other Requirements........................................................15
Section 7.4. Inspection................................................................................15
Section 7.5. No Liens..................................................................................15
Section 7.6. Interference..............................................................................15
Section 7.7. Delivery of Information...................................................................16
ARTICLE VIII MAINTENANCE OF PROPERTY............................................................................16
Section 8.1. Warranties................................................................................16
Section 8.2. Costs and Expenses........................................................................16
Section 8.3. Payment of Taxes..........................................................................16
Section 8.4. Environmental Report......................................................................17
ARTICLE IX INSURANCE............................................................................................17
Section 9.1. Liability and Property Damage.............................................................17
Section 9.2. Additional Insureds; Notice...............................................................18
Section 9.3. Application of Proceeds of Loss or Substantial Taking.....................................18
Section 9.4. Application of Proceeds of other than Loss or Substantial Taking..........................18
Section 9.5. Investment................................................................................18
Section 9.6. Application in Default....................................................................19
Section 9.7. Certificates..............................................................................19
Section 9.8. Covenant to Keep Insurance in Force.......................................................19
ARTICLE X INDEMNITIES...........................................................................................19
Section 10.1. Indemnified Persons......................................................................19
Section 10.2. Payments.................................................................................20
Section 10.3. Continuing Indemnification...............................................................20
Section 10.4. Limitations..............................................................................20
Section 10.5. Litigation...............................................................................21
ARTICLE XI RENEWAL AND TERMINATION..............................................................................21
Section 11.1. Lessee's Right to Terminate..............................................................21
Section 11.2. Brazos' Right to Terminate...............................................................21
Section 11.3. Renewal..................................................................................22
Section 11.4. Sales to Third Parties...................................................................22
(ii)
4
Section 11.5. Additional Payments......................................................................23
Section 11.6. Termination of Ground Lease..............................................................23
Section 11.7. Surrender of Property....................................................................23
ARTICLE XII ECONOMIC DISCONTINUANCE.............................................................................23
Section 12.1. Uneconomic Property......................................................................23
Section 12.2. Payment..................................................................................24
Section 12.3. No Right to Use..........................................................................24
ARTICLE XIII EVENTS OF DEFAULT..................................................................................24
Section 13.1. Events of Default........................................................................24
Section 13.2. Rights Upon Default......................................................................25
Section 13.3. Events of Property Termination...........................................................28
Section 13.4. Brazos' Right Upon Event of Property Termination.........................................29
ARTICLE XIV LOSS OF OR DAMAGE TO PROPERTY.......................................................................29
Section 14.1. Lessee's Risk............................................................................29
Section 14.2. Repair...................................................................................30
Section 14.3. Property Damaged Beyond Repair...........................................................30
ARTICLE XV CONDEMNATION OF PROPERTY.............................................................................30
Section 15.1. Taking of Substantially all of a Property................................................30
Section 15.2. Taking of Less than Substantially all of a Property......................................30
Section 15.3. Grant of Minor Easements.................................................................30
ARTICLE XVI LEASEHOLD INTERESTS.................................................................................31
ARTICLE XVII PERMITTED CONTESTS.................................................................................32
(iii)
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ARTICLE XVIII MISCELLANEOUS.....................................................................................33
Section 18.1. Survival.................................................................................33
Section 18.2. Entire Agreement.........................................................................33
Section 18.3. Modifications............................................................................33
Section 18.4. GOVERNING LAW............................................................................33
Section 18.5. No Offsets...............................................................................33
Section 18.6. Non-Recourse.............................................................................35
Section 18.7. Notices..................................................................................35
Section 18.8. Usury....................................................................................36
Section 18.9. No Merger................................................................................37
Section 18.10. Sale or Assignment by Brazos............................................................37
Section 18.11. Income Taxes............................................................................37
Section 18.12. Transfer on As-Is Basis.................................................................38
Section 18.13. Right to Perform for Lessee.............................................................38
Section 18.14. Merger, Consolidation or Sale of Assets.................................................38
Section 18.15. Expenses................................................................................38
Section 18.16. Payment of Taxes........................................................................39
Section 18.17. Rule Against Perpetuities...............................................................39
Section 18.18. Reexecution.............................................................................39
Section 18.19. Purchase or Sale of Facility............................................................39
Section 18.20. Severability............................................................................39
Section 18.21. Independent Obligations.................................................................39
Section 18.22. Execution in Counterparts...............................................................39
Section 18.23. Confidentiality.........................................................................39
Section 18.24. Execution by Lessee.....................................................................39
(iv)
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(v)
7
(vi)
8
LIST OF EXHIBITS
Exhibit A Schedule of Insurance
(vii)
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GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT (this "GROUND LEASE") is made and entered
into as of September 15, 1998, by and between BRAZOS AUTOMOTIVE PROPERTIES, 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 acquire fee or leasehold interests in
certain parcels of real property; and
WHEREAS, on or about the date of this Ground Lease, Brazos and Lessee
entered into an Agreement for Ground Lease, providing for the acquisition by
Brazos of the fee or leasehold interests in such parcels of real property from
time to time; and
WHEREAS, Lessee wishes to lease or sublease such property under the
terms and conditions set forth herein.
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 Ground Lease each
of the following terms shall have the meaning specified with respect thereto:
"ACQUIRED GROUND LEASE" means each ground lease entered into by Brazos
under which a leasehold interest in a Property is being leased to Brazos by the
owner of such Property.
"ACQUISITION COST" means, without duplication, for any Property, the
sum of (a) the outstanding amount of the advances under the Credit Agreement and
Article III of the Agreement for Ground Lease with respect to such Property, and
(b) the outstanding advances of all capital contributions made by the limited
partners of Brazos to Brazos with respect to such Property.
"ADDITIONAL PROPERTY" means each parcel of land which is contiguous to
Property already under the Ground Lease in which either a fee interest has been
acquired by Brazos or a leasehold interest has been acquired by Brazos pursuant
to an Acquired Ground Lease, in each case for the purpose of making such parcel
of land part of the Property and which is approved by Agent.
"ADDITIONAL RENT" has the meaning set forth in SECTION 6.3 hereof.
"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.
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"AGENT" means The Chase Manhattan Bank, a national banking association.
"AGREEMENT FOR GROUND LEASE" means the Agreement for Ground Lease,
dated of even date herewith, between Brazos and Lessee providing for the
acquisition or lease of each Property, as it may be further amended, restated,
modified or supplemented, from time to time, 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 Ground Lease or in any Property shall at the time
have been assigned, conditionally or otherwise, by Brazos in accordance with
SECTION 18.10 of this Ground Lease.
"ASSIGNMENT" means each assignment or security agreement referred to in
SECTION 18.10 hereof between Brazos and a third party, pursuant to which Brazos
assigns or grants a security interest in any of its rights under this Ground
Lease to such third party, as from time to time amended.
"BANK" means a "Bank" as defined in the Credit Agreement.
"BASIC RENT" means, so long as any borrowings are outstanding under the
Credit Agreement, with respect to any Property, for each calendar month the
amount computed by multiplying the following:
(i) the Acquisition Cost of such Property as of the Effective
Date with respect to the initial Basic Rent Payment Date
and thereafter, the Acquisition Cost of such Property
outstanding on the preceding Basic Rent Payment Date plus
(calculated on a daily basis from the date of any advance
since that date), any advances added to the Acquisition
Cost since said preceding Basic Rent Payment Date, by
(ii) the sum of (1) the Brazos Margin (calculated as a monthly
factor and with respect to advances during a month, a
daily factor) for the period plus (2) the interest rate
factor for interest accrued under the Credit Agreement
during such period with respect to outstanding advances
made in previous months and advances made during such
month under (without duplication) the Agreement for
Ground Lease and the Credit Agreement towards such
Acquisition Cost,
and adding to such amount the Preferred Return times the capital contribution of
the limited partners of Brazos (described under SUBPARAGRAPH (b) in the
definition of "ACQUISITION COST").
In the event no borrowings are outstanding under the Credit Agreement, the Basic
Rent shall be computed on a monthly basis and shall equal the Acquisition Cost
multiplied by a factor specified by Agent which shall equal the interest rate
factor which would be applicable if the Credit Agreement was still in effect.
"BASIC RENT PAYMENT DATE" means the first day of any calendar month
during the Lease Term or Renewal Term of any Property or, if such day is not a
Business Day, the next succeeding Business Day.
"BRAZOS" means Brazos Automotive Properties, L.P. or any successor or
successors to all of its rights and obligations hereunder and, for purposes of
SECTION 10.1(c), shall include any corporation, trust, individual, partnership
or other person or entity which computes its liability for income or other taxes
on a consolidated basis with Brazos or the income of which for purposes of such
taxes is determined or affected directly or indirectly by the income of Brazos
or its successor or successors.
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"▇▇▇▇▇▇ ▇▇▇▇▇▇" means the margin specified and calculated in accordance
with the letter from Brazos to Lessee dated as of September 15, 1998.
"BRAZOS PARTNERSHIP AGREEMENT" means that certain First Amended and
Restated Limited Partnership Agreement of Brazos dated as of September 15, 1998.
"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.
"CAPITALIZED LEASES" means, as applied to any Person, any lease of any
property by such Person as lessee which would, in accordance with GAAP, be
required to be classified and accounted for as a capital lease on the balance
sheet of such Person.
"CHARGE" has the meaning set forth in SECTION 8.3.
"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.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CONSENT" means each consent of Lessee or Guarantor to an Assignment,
pursuant to which, among other things, Lessee or Guarantor, as the case may be,
consents to the terms of such Assignment insofar as they relate to this Ground
Lease, as from time to time amended.
"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.
"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.
"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 Properties by Brazos in connection with the
Agreement for Ground Lease, as it may be amended, restated, modified or
supplemented, from time to time.
"EFFECTIVE DATE" means with respect to any Property, the date on which
such Property is leased hereunder by Brazos to Lessee, pursuant to SECTION 3.1,
which date shall be set forth in the Property Leasing Record.
"ENVIRONMENTAL CLAIM" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including material claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law relating to any Property.
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"ENVIRONMENTAL LAW" means all Legal Requirements arising from, relating
to, or in connection with the Environment (as defined in 43 U.S.C. Section
9601(8) (1988)), health, or safety, including without limitation (i) the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, and (ii) Legal Requirements relating to (a) pollution,
contamination, injury, destruction, loss, protection, cleanup, reclamation or
restoration of the air, surface water, groundwater, land surface or subsurface
strata, or other natural resources; (b) solid, gaseous or liquid waste
generation, treatment, processing, recycling, reclamation, cleanup, storage,
disposal or transportation; (c) exposure to pollutants, contaminants, hazardous
materials or wastes; (d) the safety or health of employees; or (e) the
manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, medical, infectious, or toxic
substances, materials or waste.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations, rules, rulings, and
interpretations promulgated or adopted by the Internal Revenue Service or the
United States Department of Labor thereunder.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 13.1.
"EVENT OF PROPERTY TERMINATION" means any of the events specified in
SECTION 13.3.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and all regulations promulgated by the Securities and Exchange Commission
thereunder.
"FACILITY" means all improvements of whatever kind or character now or
hereafter located on, in or under or affixed to an individual Property
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.
"FACILITIES LEASE" means, with respect to any Facility or FF&E, the
facilities lease by and between Brazos, as lessor, and Lessee, as lessee.
"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 Brazos, Agent, any Assignee or Lessee, or
any of their respective properties..
"GROUND LEASE" means this Ground Lease Agreement and each Property
Leasing Record.
"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,
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or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (e) above;
and (g) indebtedness or obligations 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" has the meaning set forth in SECTION 10.1 hereof.
"INSURANCE REQUIREMENTS" means all requirements of this Ground Lease
with respect to insurance, all terms of any insurance policy covering or
applicable to any Property, all requirements of the issuer of any such policy,
all statutory requirements and all orders, rules, regulations and other
requirements of any governmental body related to insurance applicable to any
Property.
"LEASE TERM" has the meaning set forth in SECTION 5.1 hereof.
"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 hereinafter enacted, made or
issued, whether or not presently contemplated, and all agreements, covenants,
conditions and restrictions, applicable to each Property 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 during the Lease Term and any
Renewal Term, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to any Property or the operation, occupancy
or use thereof.
"LESSEE" means Monro Leasing, LLC, a Delaware limited liability
company.
"LESSOR PERSON" has the meaning set forth in SECTION 8.3.
"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, (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
Encumbrance 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 Property, 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 of the rights or the performance of any of the duties or responsibilities of
Lessee under this Ground Lease.
"MAXIMUM RATE" has the meaning set forth in SECTION 18.8 hereof.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, to which the Guarantor, Lessee, or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the preceding
three (3) calendar years, has made, or been obligated to make, contributions.
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"PERMITTED CONTEST" means any good-faith contest permitted by and in
accordance with the terms of ARTICLE XVII.
"PERMITTED ENCUMBRANCES" means the following Liens and other matters
affecting the title or leasehold interest of any Property: (a) subject to the
terms of SECTION 7.5, mechanics' and materialmen's liens incurred in good faith
in the ordinary course of business and securing obligations that are junior to
any Liens of Assignee not exceeding $100,000 for any Property and $1,000,000 in
the aggregate which are not yet due or which are subject to a Permitted Contest;
(b) Liens securing the payment of taxes, assessments and governmental charges or
levies, either not delinquent or subject to a Permitted Contest; (c) zoning and
planning restrictions, subdivision and platting restrictions, easements,
rights-of-way, licenses, reservations, covenants, conditions, waivers,
restrictions on the use of property, minor encroachments or minor irregularities
of title which do not materially impair (i) the intended use of the Property by
Lessee or (ii) the value of any Property; (d) the lien created contemporaneously
with the acquisition of such Property pursuant to, and securing the obligations
under, the Credit Agreement; (e) any mechanics' or materialmen's lien for which
Lessee holds retainage or trapped funds in amounts required by and in accordance
with applicable law; (f) outstanding mineral interests; and (g) any other
matters; provided that such other or additional matters shall be approved in
writing by Brazos and Agent, whose approval shall not be unreasonably withheld
or delayed.
"PERSON" means an individual, partnership, corporation, business trust,
joint venture, joint stock company, trust, unincorporated association or
Governmental Authority or other entity of whatever nature.
"PLAN" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Guarantor or any Subsidiary and covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code.
"POTENTIAL DEFAULT" means any event which, but for the lapse of time,
or giving of notice, or both, would constitute an Event of Default.
"POTENTIAL PROPERTY TERMINATION" means any event which, but for the
lapse of time, or giving of notice, or both, would constitute an Event of
Property Termination.
"PREFERRED RETURN" means the preferred return on the capital
contribution of the limited partners calculated in accordance with the terms of
the Brazos Partnership Agreement and payable to the limited partners of Brazos
which is added to the interest rate factor under the Credit Agreement in
computing the Limited Partner Preferred Return under the Brazos Partnership
Agreement.
"PREPAYMENT PREMIUMS" has the meaning set forth in the Brazos
Partnership Agreement.
"PROPERTY" means any and all parcels of land leased or to be leased
hereunder and when leased, evidenced by Property Leasing Records and the
respective easements, rights and appurtenances relating to such parcels of land,
but excluding all Facilities.
"PROPERTY LEASING RECORD" means an instrument evidencing the ground
lease or sublease of a Property under this Ground Lease, as prepared and
executed by Brazos, as lessor or sublessor, and accepted and executed by Lessee,
as lessee or sublessee.
"RENEWAL TERM" has the meaning set forth in SECTION 11.3(a) hereof.
"REPORTS" has the meaning set forth in SECTION 8.4 hereof.
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"RESPONSIBLE OFFICER" means any officer of any President, Treasurer,
Executive Vice President or Senior Vice President of the Guarantor or Lessee.
"REVISED PROPERTY LEASING RECORD" means a Property Leasing Record
executed under the terms of SECTION 3.2(b) hereof.
"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.
"TAKING" has the meaning set forth in SECTION 15.1.
"UNECONOMIC NOTICE" has the meaning set forth in SECTION 12.1.
"UNECONOMIC PROPERTY" has the meaning set forth in SECTION 12.1.
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 Ground Lease have been included
for convenience of reference only and the meaning, construction, and
interpretation of such words and phrases for purposes of this Ground Lease 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 Ground Lease 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 Ground Lease 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 Ground Lease, 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 Ground Lease.
ARTICLE II
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REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF LESSEE
Lessee represents and warrants to Brazos and agrees on the date of this
Ground Lease and as of the date the relevant Property is leased pursuant to this
Ground Lease (it being understood that all representations and warranties in
this ARTICLE II with respect to a Property shall refer to the Property then
being leased pursuant to the terms of this Ground Lease) the following:
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Section 2.1. CORPORATION 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 this Ground Lease, the Agreement for Ground Lease and any
Consent, 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 Property is located, in which its ownership or
leasing of properties or the conduct of its business requires such qualification
and where non-qualification, 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 this Ground Lease
or under the Agreement for Ground Lease.
Section 2.2. AUTHORIZATION; BINDING AGREEMENT. This Ground Lease has
been duly authorized, executed and delivered by Lessee and, assuming the due
authorization, execution and delivery of this Ground Lease by Brazos, this
Ground Lease is a legal, valid and binding obligation of Lessee, enforceable
against Lessee, 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 2.3. POWER AND AUTHORITY. The consummation of the transactions
herein contemplated and the performance and observance of Lessee's obligations
under this Ground Lease and any Consent have been duly authorized by all
necessary corporate action on the part of Lessee. The execution, delivery and
performance by Lessee of this Ground Lease and any Consent 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 Property 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, would materially adversely affect
(i) the financial condition or creditworthiness of Lessee or (ii) the ability of
Lessee to perform its obligations under the Agreement for Ground Lease, this
Ground Lease, the Facilities Lease or the Agreement for Facilities Lease
referred to in the Facilities Lease or the Consent executed by Lessee of even
date herewith, 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 2.4. CONSENTS, APPROVALS, AUTHORIZATIONS. There are no
consents, licenses, orders, authorizations or approvals of, or notices to or
registrations with, any Governmental Authority which are required for the valid
execution, delivery and performance of this Ground Lease that have not been
obtained or made, except (i) such permits and licenses as Lessee will be
required to obtain for the occupancy, use or operation of a Property and which,
in the ordinary course of business, are not obtained until just prior to the
commencement of such occupancy, use or operation, and (ii) any such consents,
licenses, orders, authorizations, approvals, notices and registrations, the
failure of which to obtain would not 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 2.5. FINANCIAL STATEMENTS. Lessee has caused to be furnished to
Brazos and Agent copies of Guarantor's 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.
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Section 2.6. CHANGES. Since the date of the most recent financial
statements delivered pursuant to SECTION 2.5, 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 Ground Lease.
Section 2.7. LITIGATION. Except as disclosed to Lessor, 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
against in writing or affecting Lessee or any property or rights of Lessee or,
to the best knowledge of Lessee, or Guarantor, which affects any Property, 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 to perform its obligations hereunder or Guarantor under the
Guaranty, or which, if adversely determined, could reasonably be expected to
have a material adverse impact on the value or intended use of a Property (it
being agreed that a potential adverse impact reasonably likely to be less than
$500,000 in the aggregate for all Properties shall be deemed to be not 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 Ground Lease.
Section 2.8. DELIVERY OF INFORMATION. Lessee shall cause to be
delivered to Brazos from time to time, (a) 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, (b) 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, (c) promptly after an
officer of Lessee obtains knowledge of any Event of Default or Event of Property
Termination hereunder or of any Potential Default or Potential Property
Termination, a certificate of an officer of Lessee specifying the nature and
period of existence of such Event of Default, Event of Property Termination,
Potential Default or Potential Property Termination, and what action, if any,
Lessee has taken, is taking, or proposes to take with respect thereto, (d)
promptly after an officer of Lessee 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 2.7, a certificate of an officer of
Lessee describing such change or litigation as the case may be, (e) promptly
after Lessee obtains knowledge of any and all Liens, other than Permitted
Encumbrances, on, or other matters, including any litigation affecting a
Property, which may materially adversely affect the value or intended use of,
any Property, a detailed statement describing each such Lien or other matter and
(f) promptly after Lessee obtains knowledge of any Environmental Claim, a
detailed statement describing such Environmental Claim and what action, if any,
Lessee has taken, is taking, or proposes to take with respect thereto.
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Section 2.9. COMPLIANCE WITH LEGAL REQUIREMENTS AND INSURANCE
REQUIREMENTS. The operation, use and physical condition of the Property comply
in all material respects with the Insurance Requirements and Lessee will not do
or knowingly permit any act or thing which is contrary in any material respect
to any Legal Requirements, or which would impair in any material respect, other
than in the normal use thereof, the value or usefulness of any Property;
provided, in each case, 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 Property 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 for which Brazos and
any Assignee are not adequately indemnified (Lessee's obligations under ARTICLE
X of this Ground Lease shall be deemed to be adequate indemnification if no
Event of Default, Event of Property Termination, Potential Default or Potential
Property Termination exists and if such civil liability is reasonably likely to
be less than $100,000 per Property 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 Ground Lease, if any, on such
Property, and (iv) is consistent with business practices normal in the industry
of Lessee or the practices of Lessee with respect to properties owned by Lessee.
Section 2.10. AGREEMENT FOR GROUND LEASE. Each Property leased pursuant
to the Agreement for Ground Lease was acquired and leased in accordance with the
terms of the Agreement for Ground Lease. The representations and warranties of
Lessee in the Agreement for Ground Lease are true and correct in all material
respects on and as of the date made.
Section 2.11. PROPERTY LIENS. Except as specifically disclosed by
Lessee in writing to Brazos, to the best of Lessee's knowledge, no Property is
subject to a Lien of Record, and, to the best of Lessee's knowledge, after due
inquiry, no Property is subject to any other Lien, except for Permitted
Encumbrances previously disclosed in writing to Brazos.
Section 2.12. BROKERAGE. Except as may be contemplated by the Ground
Lease, no brokerage or other fee, commission or compensation is to be paid by
Brazos in connection with this Ground Lease, 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 2.13. SUITABILITY OF PROPERTY. To the best of Lessee's
knowledge, each Property is suitable in all material respects (including,
without limitation, ground conditions, utilities, and condition of title) for
the intended use of the Property under the Ground Lease.
ARTICLE III
-----------
LEASE OF PROPERTY
Section 3.1. LEASE. Subject to the terms and conditions hereof, Brazos
hereby leases to Lessee, and Lessee hereby leases from Brazos pursuant to this
Ground Lease, or subleases in the case of an Acquired Ground Lease, any
Property, when Brazos makes an advance under the Agreement for Ground Lease with
respect to such Property and such Property is acquired under the Agreement for
Ground Lease, or if no advance is made with respect to a Property under an
Acquired Ground Lease, when Brazos enters into or acquires by assignment such
Acquired Ground Lease.
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The Effective Date of the lease or sublease of each Property shall be the date
of the initial advance with respect to such Property under the Agreement for
Ground Lease or the Effective Date of any Acquired Ground Lease.
Section 3.2. PROPERTY LEASING RECORD
(a) The lease of each Property shall be evidenced by a Property Leasing
Record, or if the terms of (b) or (c) below apply, a Revised Property Leasing
Record. Each Property Leasing Record shall give a full legal description of the
Property covered thereby, the Acquisition Cost of such Property, the Lease Term
for such Property, the location of such Property and such other details as
Brazos, Lessee and any Assignee may from time to time agree. Lessee shall
provide to Brazos the information necessary to describe in the Property Leasing
Record the Property, except that Brazos shall provide, pursuant to the terms
hereof, the Acquisition Cost and the Lease Term. Execution and delivery by
Lessee of a Property Leasing Record shall constitute (i) acknowledgment by
Lessee that the Property specified in such Property Leasing Record has been
delivered to Lessee in good condition and has been accepted for lease hereunder
by Lessee as of the Effective Date of the Property Leasing Record, (ii)
acknowledgment by Lessee that the Property specified in such Property Leasing
Record is subject to all of the covenants, terms and conditions of this Ground
Lease, and (iii) certification by Lessee that the representations and warranties
contained in ARTICLE II of this Ground Lease are true and correct in all
material respects on and as of the Effective Date of the Property Leasing Record
as though made on and as of such date and that there exists on such date no
Event of Default, Event of Property Termination, Potential Default or Potential
Property Termination.
(b) Upon the making of a Reconciliation Advance or Additional Advance
(as such terms are defined in the Agreement for Ground Lease) for a Property,
Brazos and Lessee shall execute a Revised Property Leasing Record to reflect the
change in Acquisition Cost for such Property caused by such advance.
(c) Upon the release or disposition of a Property or any portion
thereof and the application of proceeds therefrom in accordance with the Credit
Agreement, Brazos and Lessee shall execute a Revised Property Leasing Record to
reflect the change in Acquisition Cost for such Property caused by such release
or disposition.
Section 3.3. OWNERSHIP OF PROPERTY
(a) It is the intent of the parties hereto that: (i) this Ground Lease
constitutes an "operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, for purposes of Lessee's financial reporting, and
(ii) for purposes of federal, state and local income or franchise taxes and for
any other tax imposed on or measured by income, the transaction contemplated
hereby is a financing arrangement and preserves ownership in the Property to the
Lessee. Nevertheless, the Lessee acknowledges and agrees that neither the Agent,
Brazos nor any Assignee has made any representations or warranties to the Lessee
concerning the tax, accounting or legal characteristics of the Credit Agreement
and Lease Documents (as defined in the Credit Agreement) and that the Lessee has
obtained and relied upon such tax, accounting and legal advice concerning the
Credit Agreement and Lease Documents (as defined in the Credit Agreement) as it
deems appropriate.
(b) Anything to the contrary notwithstanding, Brazos and the Lessee
intend and agree that with respect to the nature of the transactions evidenced
by this Ground Lease in the context of the exercise of remedies under the Credit
Agreement and Lease Documents (as defined in the Credit Agreement), including,
without limitation, in the case of any insolvency or receivership proceedings or
a petition under the United States bankruptcy laws or any other applicable
insolvency laws or statute of the United States of America or any state or
commonwealth thereof affecting the Lessee, Brazos, or any Assignee or any
enforcement or collection actions, (i) the transactions evidenced by this Ground
Lease are loans made by Brazos and the Agent as unrelated third party lenders to
the Lessee secured by the Property, (ii) the obligations of the Lessee under
this Ground Lease to pay Basic Rent and Additional Rent or
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other amounts in connection with a purchase of the Property pursuant to this
Ground Lease shall be treated as payments of interest on and principal of,
respectively, loans from Brazos and the Assignees to the Lessee, and (iii) this
Ground Lease grants a security interest and mortgage or deed of trust or lien,
as the case may be, in the Property to Brazos and the Assignees to secure the
Lessee's performance under and payment of all amounts under this Ground Lease
and the Credit Agreement and Lease Documents (as defined in the Credit
Agreement).
(c) Specifically, without limiting the generality of SUBSECTION (b)
of this Section, Brazos and the Lessee further intend and agree that, for the
purpose of securing the Lessee's obligations for the repayment of the
above-described loans from Brazos and the Agent to the Lessee, (i) this Lease
shall also be deemed to be a security agreement and financing statement within
the meaning of Article 9 of the Uniform Commercial Code (and specifically, a
construction mortgage, as said term is defined in Section 9-313(1)(c) of the
Uniform Commercial Code) and a real property mortgage or deed of trust; (ii) the
conveyance provided for in ARTICLE III shall be deemed to be a grant by the
Lessee to Brazos and the Assignees of a mortgage lien and security interest in
all of the Lessee's right, title and interest in and to the Property and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, investments, securities or other property (it being understood that Lessee
hereby mortgages and grants a security interest in the Property to Brazos and
the Assignees to secure such loans); (iii) the possession by Brazos or any of
its agents of notes and such other items of property as constitute instruments,
money, negotiable documents or chattel paper shall be deemed to be "possession
by the secured party" for purposes of perfecting the security interest pursuant
to Section 9-305 of the Uniform Commercial Code; and (iv) notifications to
Persons holding such property, and acknowledgments, receipts or confirmations
from financial intermediaries, bankers or agents (as applicable) of the Lessee
shall be deemed to have been given for the purpose of perfecting such security
interest under applicable law. Brazos and the Lessee shall, to the extent
consistent with this Ground Lease, take such actions and execute, deliver, file
and record such other documents, financing statements, mortgages and deeds of
trust as may be necessary to ensure that, if this Ground Lease were deemed to
create a security interest in the Property in accordance with this Section, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of this Ground Lease or any renewal hereof as provided in SECTION 5.1.
Section 3.4. 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 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 its 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. Brazos will not take
any position on any tax return, report or form relating to income or franchise
taxes that is inconsistent with SECTION 3.3(c).
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Section 3.5. SECURITY. It is the intent of the parties that, under
applicable state and federal law, (i) the transaction evidenced by the Credit
Agreement constitutes a secured financing transaction between the banks named
therein and Lessor, (ii) the transaction evidenced by this Ground Lease
constitutes an operating lease transaction between Lessor and Lessee, (iii)
Lessor is the owner of the Properties, and (iv) Lessee's interest in the
Properties is a leasehold interest pursuant to the terms set forth herein. If,
however, notwithstanding the foregoing and the provisions of such documents, the
transactions contemplated by such documents are determined by a court of
competent jurisdiction to constitute a secured financing between all or any
combination of Agent, such banks and Lessor, on the one hand, and Lessee, on the
other, such that Lessee is determined to be the owner of any Property, (i) this
Ground Lease shall constitute a mortgage and a security agreement under
applicable state law with respect to such Property, and (ii) Lessee hereby
grants and conveys to Agent and Lessor a lien on and security interest in all of
Lessee's right, title and interest in and to each such Property, on behalf of
the Banks, as collateral security for the obligations, without duplication, with
mortgage covenants, upon statutory conditions and statutory power of sale, of
Lessee under this Ground Lease and (iii) Lessor hereby grants and conveys to
Agent, on behalf of the Banks, a lien on and security interest in all of
Lessor's right, title and interest in and to each such Property, as collateral
security for the Credit Agreement. It is the intention of the parties to this
Ground Lease that the security interest and mortgage or deed of trust or lien,
as the case may be, for each Property between Lessor and the Agent dated
September 15, 1998, and recorded as of even date herewith, be prior to this
Ground Lease.
ARTICLE IV
DELIVERY AND ACCEPTANCE
Section 4.1. ACCEPTANCE. Lessee shall accept Property acquired by
purchase or lease pursuant to and in accordance with the Agreement for Ground
Lease. Brazos shall not be liable to Lessee for any failure to obtain, or delay
in obtaining, any Property or any delay in the delivery of title or possession
thereof to Lessee.
Section 4.2. PAYMENTS FINAL. Each payment of Basic Rent, Additional
Rent and any other amount due hereunder made by Lessee shall be final, and
Lessee, without waiving any other remedies it may have, will not seek or have
any right to recover all or any part of such payment from Brazos or any Assignee
for any reason whatsoever. The making of payments under this Ground Lease by
Lessee (including payments pursuant to ARTICLE X) shall not be deemed to be a
waiver of any claim or claims that Lessee may assert against Brazos or any other
person. Brazos agrees to repay Lessee amounts paid to Brazos to the extent such
payments were in error and are not required by the various terms and provisions
of this Ground Lease.
Section 4.3. NO WARRANTIES OR REPRESENTATIONS. Notwithstanding any
other provision contained in this Ground Lease, it is specifically understood
and agreed that neither Brazos nor any Assignee nor any Affiliate of either, nor
anyone acting on behalf of any of them makes any warranties or representations
or has any responsibility to disclose any relevant information, or has any other
responsibility or duty, nor, except as set forth in SECTIONS 3.3, 3.4 and 18.11
of this Ground Lease, has Brazos or any Assignee or any Affiliate of either, or
anyone acting on behalf of any of them made any covenants or undertakings, as to
the accounting treatment to be accorded Lessee or as to the U.S. Federal or any
state income or any other tax consequences, if any, to Lessee as a result of or
by virtue of the transactions contemplated by this Ground Lease.
Section 4.4. QUIET ENJOYMENT. During the Lease Term or Renewal Term, if
any, of any Property hereunder and so long as no Event of Default, Event of
Property Termination, Potential Default or Potential Property Termination shall
have occurred and be continuing, Brazos covenants that as between Brazos and
Lessee, Lessee shall have the right to quiet enjoyment of the Property on the
terms and conditions provided in this Ground Lease without
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any interference from Brazos or any Person claiming by, through, under or in the
name of Brazos. Lessee agrees to attorn to any Assignee in the event such
Assignee succeeds to Brazos' interest in the Property, and Lessee will not hold
the Assignee responsible for Brazos' obligations incurred in the period prior to
the succession of the Assignee to Brazos' interest.
Section 4.5. INDEMNITY TO TITLE INSURANCE. In the event the title
insurance policy insuring Brazos' and Assignee's interest in any Property would
not, in the absence of special assurance by Lessee, become effective until the
date of recordation of the deed or assignment of the Acquired Ground Lease, as
applicable, then Lessee shall furnish such indemnity to the title insurance
company as it shall require in order to insure Brazos' interest in such
Property, effective as of the date of the Effective Date.
Section 4.6. OTHER FINANCING REQUIREMENTS. If Brazos is required by the
Agent pursuant to the terms of the Credit Agreement in effect on the date hereof
or modified hereafter with the prior written consent of Lessee to provide an
appraisal or other evidence of the value of a Property to the Agent under the
Credit Agreement, Lessee agrees to provide such appraisal or other evidence to
Brazos at Lessee's sole cost and expense.
ARTICLE V
LEASE TERM
Section 5.1. LEASE TERM. The "LEASE TERM" with respect to any Property
leased hereunder shall commence on the Effective Date for such Property and
shall end on September 15, 2003. The lease of any Property may be renewed for
one five (5) year renewal term and thirty (30) renewal terms of one year each,
pursuant to, and in accordance with, SECTION 11.3. The Lease Term or any Renewal
Term may be terminated earlier pursuant to ARTICLES XI, XII, XIII, XIV or XV
hereof or otherwise pursuant to operation of any Legal Requirements.
Section 5.2. TERMINATION. Notwithstanding anything contained in this
ARTICLE V or ARTICLE XI, this Ground Lease shall terminate on September 15,
2038, unless earlier terminated.
ARTICLE VI
RENT AND OTHER PAYMENTS
Section 6.1. BASIC RENT. Lessee hereby agrees to pay Brazos on each
Basic Rent Payment Date, Basic Rent for the calendar month in which such Basic
Rent Payment Date falls with respect to each Property leased prior to the last
two (2) Business Days of the preceding calendar month. Brazos shall notify
Lessee in writing at least two Business Days prior to each Basic Rent Payment
Date of the amount of the Basic Rent due with respect to each Property on such
Basic Rent Payment Date.
Section 6.2. OTHER AMOUNTS. Except as otherwise specifically provided
in this Ground Lease, Lessee hereby agrees to pay within twenty (20) days after
written demand all amounts (other than Basic Rent and amounts which are payable
on demand or pursuant to ARTICLES X-XV) due hereunder, including, without
limitation, all amounts payable to any Indemnified Person pursuant to ARTICLE X
hereof.
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Section 6.3. ADDITIONAL RENT. Lessee shall pay to Brazos from time to
time, on demand, as additional rent ("ADDITIONAL RENT") (i) amounts required to
reimburse Brazos for its obligations, costs and expenses (not previously
included in Basic Rent) incurred in acquiring, financing and leasing the
Property, including, without limitation, reasonable auditor's fees, if any, and
all amounts payable by Brazos under Sections 2.3, 2.6, 2.8, 2.9, 2.11, 5.5, 9.4
and 9.7 of the Credit Agreement, in effect on the date hereof or modified with
the prior written consent of Lessee or, at such time as no borrowing is
outstanding under the Credit Agreement (all such payments to be made at the time
specified in the Credit Agreement), all such amounts which are otherwise
provided for under the Credit Agreement, (ii) to the extent legally enforceable,
interest on each overdue amount not paid by Lessee to Brazos as provided in this
Ground Lease from the date such overdue amount was due until paid at the per
annum rate of interest equal to the most recent rate of interest calculated
pursuant to the Credit Agreement or established by Agent in the absence of any
borrowing under the Credit Agreement, plus two percent (2%), (iii) the amount of
all Prepayment Premiums payable to the limited partner of Brazos under the
Brazos Partnership Agreement, and (iv) all reasonable costs and expenses
incurred by the limited partner of Brazos (1) in connection with the occurrence
and during the continuance of a default under the Lease Documents or (2) in
connection with the review and execution of any amendment requested by Lessee or
Guarantor (whether or not such amendment is executed) to the Lease Documents (as
defined in the Guaranty), the Guaranty, any security agreement entered into in
connection with the Guaranty, or any consent requested by or on behalf of Lessee
in connection with the Lease Documents or the Brazos Partnership Agreement
whether or not said request is granted. Lessee shall also pay to Brazos on
demand an amount equal to any reasonable expenses and attorneys' fees incurred
by Brazos in collecting such unpaid sums and enforcing the obligations for such
unpaid sums.
Section 6.4. PAYMENT IN ADVANCE. Basic Rent and Additional Rent and any
other amount payable by Lessee to Brazos shall be paid sufficiently in advance
of the date due to assure that immediately available funds in the full amount
due are available on the date due, to such account of Brazos at such bank, or to
such account of such other person at such bank, or otherwise as Brazos may from
time to time designate in writing.
Section 6.5 CREDIT AGREEMENT LOSSES. In addition to all other payment
obligations hereunder, if the lease for any Property is terminated for any
reason prior to the end of the Lease Term or, if applicable, Renewal Term, then
Lessee shall pay to Brazos within three Business Days after receipt of the
billing statement referred to below an additional amount compensating Brazos for
all penalties, costs and expenses (including reasonable out-of-pocket costs and
expenses) as are incurred by Brazos under the Credit Agreement in connection
with such termination and as are set forth in a billing statement sent by Brazos
to Lessee containing the calculation thereof in reasonable detail.
ARTICLE VII
-----------
RESTRICTED USE; COMPLIANCE WITH LAWS
Section 7.1. INSURANCE REQUIREMENT AND LEGAL REQUIREMENT. So long as no
Event of Default or Event of Property Termination shall have occurred and be
continuing, Lessee may use the Property in the regular course of its business
for any lawful purpose. Lessee will not do or permit any act or thing which is
contrary in any material respect to any Insurance Requirement or which is
contary to any Legal Requirement or which would impair, other than in the normal
use thereof, the value or usefulness of any Property; provided, that Lessee
shall not be required to comply with any Legal Requirements to the extent
provided in SECTION 2.9.
Section 7.2. 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 any Assignee shall
from time to time reasonably request in order to establish, perfect and maintain
Brazos' or such Assignee's title to and interest in the Property and any
Assignee's interest in this Ground Lease or any Property as against Lessee or
any third party in any applicable jurisdiction.
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Section 7.3. COMPLIANCE WITH OTHER REQUIREMENTS. Lessee shall use every
precaution which is commercially reasonable and which is usually employed by
corporations engaged in a business which involves owning or operating similar
property to prevent loss or damage to Property and to prevent injury to third
persons or property of third persons. Lessee and Brazos shall cooperate fully
with each other and with all insurance companies providing insurance pursuant to
ARTICLE IX hereof in the investigation and defense of any claims or suits
arising from the ownership, use, or occupancy of the Property; provided that
nothing contained in this SECTION 7.3 shall be construed as imposing on Brazos
any duty to investigate or defend any such claims or suits. Lessee shall comply
and shall use commercially reasonable efforts to cause all persons using or
occupying Property to materially comply with all Insurance Requirements and
Legal Requirements regarding acquiring, titling, registering, leasing, insuring,
using, occupying, operating and disposing of Property, and, if applicable, the
licensing of operators thereof; provided, that Lessee shall not be required to
comply with any Legal Requirements to the extent provided in SECTION 2.9 of this
Ground Lease.
Section 7.4. INSPECTION. Brazos or any Assignee or any authorized
representative of either may, upon five (5) days advance notice, during
reasonable business hours from time to time inspect Property and deeds,
registration certificates, certificates of title and related documents covering
Property wherever the same may be located, but neither Brazos nor any Assignee
shall have any duty to make any such inspection.
Section 7.5. NO LIENS. Lessee shall not permit or suffer to exist on
any Property any Lien, other than Liens which are the subject of a Permitted
Contest, Permitted Encumbrances and Liens placed thereon by, or arising from,
Brazos' own actions or omissions or those of any Assignee or Affiliate of Brazos
and in all such cases, approved by Lessee (provided, that any Liens of Record,
other than Liens placed thereon by, or arising from, Brazos' own actions or
those of any Assignee or Affiliate of Brazos and in all such cases, approved by
Lessee, may not exceed an aggregate amount of $1,000,000 with respect to the
aggregate of the Properties and Facilities, and an aggregate amount of $100,000
with respect to each Property and related Facility), nor may it assign any right
or interest herein or in any Property except as provided in SECTION 18.14(a) of
this Ground Lease. Lessee shall not without the prior written consent of Brazos
and Assignee sublease or otherwise relinquish possession of any Property, except
that, Lessee may sublease any Property to a Subsidiary or Guarantor, may
sublease up to twenty percent (20%) of the Properties to any party for any legal
use and may otherwise relinquish possession of Property to any contractor for
use in performing work for Lessee; provided that such relinquishment of
possession shall in no way affect the obligations of Lessee or the rights of
Brazos hereunder and with respect to the Property. Any sublease by Lessee shall
be expressly subordinate to this Ground Lease. Brazos and Assignee shall have
the present and continuing right to collect and enjoy all rents and other sums
of money payable under any such sublease, and Lessee hereby irrevocably assigns
such rents and other sums to Brazos and Assignee for the benefit and protection
of Brazos and Assignee for all amounts due to Brazos and Assignee under this
Ground Lease; provided that unless an Event of Default or Event of Property
Termination shall have occurred and be continuing hereunder, Lessee shall be
entitled to collect and enjoy such rents and other sums. Lessee shall, within
thirty (30) days after the execution of any such sublease, deliver a conformed
copy thereof to Brazos and Agent. Nothing contained in this Ground Lease shall
be construed as constituting the consent or request of Brazos, express or
implied, to or for the performance by any contractor, laborer, materialman or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to any Property
or any part thereof. Notice is hereby given that Brazos and Agent will not be
liable for any labor, services or materials furnished or to be furnished to
Lessee, or to anyone holding any Property or any part thereof through or under
Lessee, and that no mechanics' or other liens for any such labor, services or
materials shall attach to or affect the interest of Brazos or Assignee in and to
the Property.
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Section 7.6. INTERFERENCE. If any Lien or charge of any kind or any
judgment, decree or order of any court or other governmental authority
(including, without limitation, any state or local tax lien affecting the
Property), whether or not valid, shall be asserted or entered which is
reasonably likely to interfere with the due and timely payment of any sum
payable or the exercise of any of the rights or the performance of any of the
duties or responsibilities under this Ground Lease, Lessee shall, upon obtaining
knowledge thereof or upon receipt of notice to that effect from Brazos or Agent,
promptly take such action as may be necessary to prevent or terminate such
interference.
Section 7.7. DELIVERY OF INFORMATION. Lessee shall deliver to Brazos
and Agent (i) 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, and (ii) promptly after Lessee obtains
knowledge of any and all Liens other than Permitted Encumbrances on any Property
or other matter which may materially adversely affect the value or intended use
of a Property, a detailed statement describing each such Lien or other matter.
ARTICLE VIII
------------
MAINTENANCE OF PROPERTY
Section 8.1. WARRANTIES. Brazos, so long as no Event of Default or
Event of Property Termination shall have occurred and be continuing, hereby
assigns and agrees to make available to Lessee any and all rights Brazos may
have under any vendor's or manufacturer's warranties or undertakings with
respect to the Property. If any Event of Default or Event of Property
Termination shall have occurred and be continuing, the assignment of such rights
from Brazos to Lessee shall be deemed to be terminated, except to the extent
that such Event of Default or Event of Property Termination is the result of a
breach of any vendor's warranties or undertakings, in which case the foregoing
assignment will remain in full force and effect and Lessee will be allowed a
reasonable period of time to pursue such vendor and to cure the Event of Default
or Event of Property Termination.
Section 8.2. COSTS AND EXPENSES. Lessee shall pay all costs, expenses,
fees and charges incurred in connection with the ownership, use or occupancy of
any Property during the Lease Term and Renewal Term, if any, thereof, including,
without limitation, any rent and other charges under an Acquired Ground Lease.
Except as otherwise provided in ARTICLE XII hereof and, in the case of an
Acquired Ground Lease, in no event less than to the extent required thereunder,
Lessee shall at all times, at its own expense, and subject to reasonable wear
and tear, keep the Property in good operating order, repair, condition and
appearance. The foregoing undertaking to maintain Property in good repair shall
apply regardless of the cause necessitating repair, regardless of the
availability or adequacy of insurance or condemnation proceeds and regardless of
whether Lessee has possession of the Property, and as between Brazos and Lessee
all risks of damage to the Property are assumed by Lessee. With respect to any
Property, the undertaking to maintain in good repair shall include, without
limitation, all common area maintenance including, without limitation, removal
of dirt, snow, ice, rubbish and other obstructions and maintenance of sidewalks
and landscaping. Lessee hereby agrees to indemnify and hold Brazos and any
Assignee harmless from and against all costs, expenses, claims, losses, damages,
fines or penalties, including reasonable counsel fees, arising out of or due to
Lessee's failure to fulfill its obligations under this SECTION 8.2.
Section 8.3. PAYMENT OF TAXES. With respect to any Property, Lessee
shall make all required reports to the appropriate taxing authorities and shall
pay prior to delinquency: (i) all taxes, assessments, (which may be amortized
over the maximum period permitted by Law) levies, fees, water and sewer rents
and charges, and all other governmental, quasi-governmental and non-governmental
charges, general and special (which may be amortized over
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the maximum period permitted by Law), ordinary and extraordinary, foreseen and
unforeseen, which are, at any time during the Lease Term or any Renewal Term
hereof, imposed or levied upon or assessed against (A) the Property, (B) any
Basic Rent, any Additional Rent or other sum payable hereunder or (C) this
Ground Lease, the leasehold estate hereby created, or which arises in respect of
the ownership, operation, occupancy, possession or use of the Property, (ii) all
gross receipts or similar taxes (i.e., taxes based upon gross income which fail
to take into account all customary deductions (e.g., depreciation and interest)
relating to the Property) imposed or levied upon, assessed against or measured
by any Basic Rent, or any Additional Rent or other sum payable hereunder, (iii)
all sales, value added, use and similar taxes at any time levied, assessed or
payable on account of the acquisition, leasing or use of the Property, and (iv)
all charges of utilities and communications services serving the Property (a
"CHARGE"); provided, however, that Lessee shall not have any obligation to pay
(A) any tax on, based on or measured by the net income or net receipts of
Brazos, any tax on, based on or measured by the net income or net receipts,
capital or net worth of any Assignee or any Affiliate of Brazos or Assignee
(each, a "LESSOR PERSON"), (B) any tax to the extent the amount of such tax is
increased as a result of any Lessor Person engaging in activities in the
jurisdiction imposing such tax other than those contemplated by this Ground
Lease, (C) any tax imposed upon or in connection with any voluntary or
involuntary transfer by a Lessor Person of any interest in any Property or any
part thereof or interest therein or any interest arising under this Ground Lease
or any other document contemplated thereby unless such transfer results from an
Event of Default, (D) any tax or Charge imposed as a result of the gross
negligence or wilful misconduct of any Lessor Person, (E) any tax or Charge
arising from any act, event or omission that occurs after termination of this
Ground Lease, subject to SECTION 13.2 hereof, and (F) any tax to the extent of
the excess of such tax over the amount of such tax that would have been imposed
in the absence of a sale, transfer, or other disposition by a Lessor Person of
any interest in any Property or any part of either thereof, this Ground Lease or
any interest arising under this Ground Lease or any document contemplated
hereby. Lessee shall not be required to pay any estate, inheritance, transfer,
federal income or similar tax of Brazos (other than any tax referred to in
clause (ii) above) unless such tax is imposed, levied or assessed in
substitution for any other tax, assessment, charge or levy which Lessee is
required to pay pursuant to this SECTION 8.3; provided, however, that if at any
time during the term of this Ground Lease, the method of taxation shall be such
that there shall be levied, assessed or imposed on Brazos a capital levy or
other tax directly on the rents received therefrom, or upon the value of any
Property or any present or any future improvement or improvements on any
Property, then all such taxes, assessments, levies, or charges, or the part
thereof so measured or based, shall be payable by Lessee, but only to the extent
that such taxes would be payable if the Property affected were the only property
of Brazos, and Lessee shall pay and discharge the same as herein provided.
Lessee will furnish to Brazos, promptly after demand therefor, proof of payment
of all items referred to above, the payment of which is the responsibility of
Lessee. If any such assessments may legally be paid in installments, Lessee may
pay such assessment in installments. So long as, in the reasonable opinion of
Lessee's counsel, Lessee shall have reasonable grounds to contest the existence,
amount, applicability or validity of any tax Lessee is required to pay pursuant
to this Ground Lease, Lessee may contest such tax subject to the provisions of
ARTICLE XVII of this Ground Lease so long as adequate reserves therefor are
maintained by Lessee.
Section 8.4. ENVIRONMENTAL REPORTs. Upon reasonable notice, Lessee
shall furnish Brazos reports (the "REPORTS") prepared by a qualified independent
consultant, at the expense of Lessee, concerning the condition and status of any
Property in respect of any Environmental Laws; provided that Brazos, Agent, or
Assignee has demonstrable evidence that such Property may be affected by a
hazardous substance, a hazardous waste or an Environmental Claim not adequately
addressed in any environmental assessment previously delivered to Brazos or any
Assignee in connection with such Property.
ARTICLE IX
----------
INSURANCE
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Section 9.1. LIABILITY AND PROPERTY DAMAGE. Lessee shall, at its sole
cost and expense, including through self-insurance, maintain such liability and
property damage insurance with respect to all Property and insurance against
loss or damage to all Property of the types usually carried by corporations
engaged in the same or a similar business, of similar size as Lessee, and owning
similar property and which cover risks of the kind customarily insured against
by such corporations and such other insurance as may be required by law or as
may be reasonably requested by Brazos for purposes of assuring compliance with
this ARTICLE IX, including, without limitation, the insurance described on the
Schedule of Insurance attached hereto as EXHIBIT "A". Such insurance shall be
written by financially sound and reputable companies which are legally qualified
to issue such insurance and which are approved by Agent. Lessee may, at its cost
and expense, prosecute any claim against any insurer or contest any settlement
proposed by any insurer, and Lessee may bring any such prosecution or contest in
the name of Brazos, Lessee, or both, and Brazos will join therein at Lessee's
request; provided that Lessee shall indemnify Brazos against any losses, costs
or expenses (including reasonable attorneys' fees) which Brazos may incur in
connection with such prosecution or contest. Notwithstanding the foregoing,
Lessee at its sole option, may choose to self-insure for any liabilities or
damages which are otherwise to be covered by insurance as described herein.
Section 9.2. ADDITIONAL INSUREDS; NOTICE. Any policies of insurance
other than Workers' Compensation and Employer's Liability Insurance, carried in
accordance with this ARTICLE IX and any policies taken out in substitution or
replacement for any such policies (i) shall name Brazos and Assignee as
additional insureds, as their respective interests may appear (but without
imposing upon any such person any obligation imposed on the insured, including,
without limitation, the liability to pay the premium for any such policy), (ii)
shall have attached to the All Risk direct physical damage policy, a lender's
loss payable endorsement for the benefit of Brazos and Assignee as loss payees
and (iii) shall provide that as against Brazos and Assignee the insurers shall
waive any rights of subrogation. Lessee shall request the insurers to give
thirty (30) days advance written notice to Brazos and its assigns of any
cancellation of any insurance to be maintained under this Article. Lessee shall
give a copy to Brazos and any Assignee of any notice received by Lessee
regarding the cancellation or other termination of the insurance included in the
Schedule of Insurance attached hereto as EXHIBIT "A". Each liability policy (A)
shall be primary without right of contribution from any other insurance which is
carried by Brazos with respect to its interest as such in the Property and (B)
shall expressly provide that all of the provisions thereof, except the limits of
liability, shall operate in the same manner as if there were a separate policy
covering each insured.
Section 9.3. APPLICATION OF PROCEEDS OF LOSS OR SUBSTANTIAL TAKING. Any
insurance or condemnation proceeds received as the result of the occurrence of
(i) any event of loss described in SECTION 14.3 hereof or (ii) any event of
substantial Taking described in SECTION 15.1 shall be paid to Brazos, and
disposed of as contemplated by SECTION 14.3 hereof.
Section 9.4. APPLICATION OF PROCEEDS OF OTHER THAN LOSS OR SUBSTANTIAL
TAKING. As between Lessee and Brazos, if any insurance or condemnation proceeds
received as a result of any loss or Taking, other than a loss described in
SECTION 14.3 or an event of substantial Taking described in SECTION 15.1, is
less than $100,000, it is agreed that such proceeds will be paid to Lessee to be
used for repairs, replacement, reconstruction or restoration in accordance with
the terms of SECTIONS 14.2 and 15.2 hereof. If the proceeds equal or exceed
$100,000, then the proceeds shall be deposited in a special purpose account held
by Assignee, to be used only for the purpose set forth in this paragraph, and
Lessee shall be entitled (i) to receive the amounts so deposited against
certificates, invoices or bills in form reasonably satisfactory to Brazos and
Agent, delivered to Brazos and Assignee from time to time as such work or repair
progresses, and (ii) to direct the investment of the amounts so deposited as
provided in SECTION 9.5. Any moneys remaining in the aforesaid account after
final payment for repairs has been made shall be paid to Lessee.
Section 9.5. INVESTMENT. Agent, at Lessee's instruction, shall invest
the amounts deposited with Agent pursuant to SECTION 9.4 in the following:
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(i) direct obligations of the United States Government;
(ii) interest-bearing time deposits at, or obligations of, any
Assignee;
(iii) commercial paper supported by a letter of credit issued by any
Assignee; or
(iv) money market mutual funds that invest only in government
obligations or repurchase agreements secured by government
obligations.
Such investments shall mature in such amounts and on such dates so as to provide
that amounts shall be available on the draw dates sufficient to pay the amounts
requested by and due to Lessee. Any interest earned on investments of such funds
shall be paid to Lessee. Brazos and Agent shall not be liable for any loss
resulting from the liquidation of each and every such investment and Lessee
shall be liable for such loss, if any.
Section 9.6. APPLICATION IN DEFAULT. Any amount referred to in SECTIONS
9.3 or 9.4 which is payable to Lessee shall not be paid to Lessee or, if it has
been previously paid to Lessee and not applied by Lessee as provided in SECTION
9.3 or 9.4, shall not be retained by Lessee, if an Event of Default or Event of
Property Termination shall have occurred and be continuing. In such event, all
such amounts shall be paid to and held by Brazos as security for the obligations
of Lessee hereunder or, at Brazos' option, applied by Brazos toward payment of
any of such obligations of Lessee at the time due hereunder as Brazos may elect.
At such time as there shall not be continuing any Event of Default or Event of
Property Termination, all such amounts at the time held by Brazos in excess of
the amount, if any, which Brazos shall have elected to apply as above provided
shall be applied as provided in SECTIONS 9.3 or 9.4.
Section 9.7. CERTIFICATES. Subject to Lessee's right to self-insure as
set forth hereinabove, on or before the execution of this Ground Lease, and
annually on or before the anniversary of the date of this Ground Lease, Lessee
will furnish to Brazos and Agent certificates or other evidence reasonably
acceptable to Brazos and Agent certifying that the insurance then carried and
maintained on each Property complies with the terms hereof.
Section 9.8. COVENANT TO KEEP INSURANCE IN FORCE. Lessee covenants that
it will not use or occupy any Property or permit the use or occupancy of any
Property at a time when the insurance required by this ARTICLE IX is not in
force with respect to such Property.
ARTICLE X
---------
INDEMNITIES
Section 10.1. 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 (except mortgage 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 relating to or in any way arising
out of:
(a) The acquisition, title on acquisition, rejection, possession,
titling, retitling, registration, reregistration, custody by Lessee of title and
registration documents, ownership, use, non-use, misuse, lease, operation,
repair, control or disposition of any Property leased or subleased or to be
leased or subleased hereunder, (i) except to
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the extent that such costs are included in the Acquisition Cost of such Property
and (ii) except for any general administrative expenses of Brazos;
(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
Property; 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 Property;
(c) Subject to SECTION 8.3, all U.S. Federal, state, county,
municipal, foreign or other fees and taxes of whatsoever nature arising from or
relating to ownership of the Property, including but not limited to license,
qualification, franchise, sales, use, gross income, gross receipts, ad valorem,
business, personal property, real estate, value added, excise, motor vehicle,
occupation fees and stamp or other taxes or tolls of any nature whatsoever, and
penalties and interest thereon, whether assessed, levied against or payable by
Brazos or otherwise, with respect to any Property or the acquisition, purchase,
sale, rental, use, operation, control, ownership or disposition of any Property
(including without limitation any claim by any governmental authority for
transfer tax, transfer gains tax, filing or other similar taxes or fees in
connection with the acquisition of any Property by Brazos or otherwise in
connection with this Ground Lease) or measured in any way by the value thereof
or by the business of, investment in, or ownership by Brazos with respect
thereto; provided that this indemnity shall not apply to (i) net income taxes
imposed by any state or local taxing authority, (ii) U.S. Federal net income,
alternative minimum taxes, or capital gains taxes or (iii) state and local net
income or capital gains taxes which are imposed by a state or locality because
of a relationship between Brazos and such state or locality unrelated to
ownership of the Property or to this Ground Lease; and provided further, that to
the extent Lessee's obligations hereunder include indemnifying Brazos for net
income taxes imposed by a state or local taxing authority, such obligations
shall be limited to indemnifying Brazos for the inability, disallowance or other
loss of deductions relating to ownership of the Property customarily allowed in
computing net income (e.g., interest expense, depreciation, financing,
administrative and other fees and expenses);
(d) Any violation or alleged violation (other than an alleged
violation alleged by Brazos) by Lessee of this Ground Lease 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 all 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 Ground Lease;
(e) Any Environmental Claim or requirement of Environmental Law
concerning or relating to any Property, or the operations or business in respect
of any Property; or
(f) Any claim against Brazos' title or Assignee's interest in any
Property to the extent such claim is not fully paid by title insurance.
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Section 10.2. 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 10.1 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 X 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 X 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 Ground Lease,
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 10.3. CONTINUING INDEMNIFICATION. The indemnities contained in
this ARTICLE X shall not be affected by and shall survive any termination of
this Ground Lease as a whole or in respect of any Property leased hereunder or
any failure or refusal of Lessee to accept any Property acquired or ordered
pursuant to the Agreement for Ground Lease.
Section 10.4. LIMITATIONS. Brazos and Lessee agree that the terms of
any state Law which may affect the rights of Brazos and Lessee under this
ARTICLE X may be set forth in the Memorandum of Ground Lease for the affected
Property and shall apply as though set forth in full in this Ground Lease.
Section 10.5. 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 X 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 Property under this Ground Lease,
(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 X.
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ARTICLE XI
----------
RENEWAL AND TERMINATION
Section 11.1. LESSEE'S RIGHT TO TERMINATE. So long as no Potential
Default, Potential Property Termination, Event of Default or Event of Property
Termination has occurred and is continuing and, with respect to all Properties,,
Lessee shall have the right, at any time during the Lease Term or any Renewal
Term, upon not less than thirty (30) days' written notice to Brazos and
Assignee, to terminate on the Basic Rent Payment Date specified in such notice
this Ground Lease with respect to all Properties and either (i) purchase all
Properties for cash at their respective Acquisition Cost or (ii) with the
consent of Brazos and Agent, arrange, at its own cost and expense, for all
Properties to be sold for cash pursuant to SECTION 11.4 and with the
consequences therein provided, except that such sale must occur on the Basic
Rent Payment Date stipulated in the written notice contemplated by this SECTION
11.1, and Lessee shall have such right only if (a) indemnity payments to Brazos
pursuant to SECTION 10.1(c) shall have been required and can reasonably be
expected to occur subsequently and such payments are or would be in the
aggregate (taking into account the recurring nature of the payments) sufficient
in the reasonable judgment of Lessee to render this Ground Lease uneconomic with
respect to all Properties, (b) due to a change in accounting rules or treatment,
this Ground Lease is no longer treated as an operating lease for accounting
purposes or (c) there exists an event of default under the Credit Agreement and
the payment obligations of Brazos thereunder are declared to be immediately due
and payable.
Section 11.2. BRAZOS' RIGHT TO TERMINATE. Brazos shall have the right
upon thirty (30) days' prior written notice to Lessee, to terminate the Ground
Lease of all Properties as of a Basic Rent Payment Date stipulated in such
notice if at any time: (1) by reason of a nexus between a state or local taxing
jurisdiction and any Property or the activities of any user (other than Brazos)
of the Property, Brazos incurs, or, in its reasonable judgment, in the future
would incur, a state or local tax which, in its sole but reasonable judgment,
renders the Ground Lease uneconomic; or (2) the Agreement for Ground Lease or
any other instrument relating to this Ground Lease shall be deemed to require
the payment or deemed to permit the collection of interest in excess of the
Maximum Rate and any such interest in excess of such Maximum Rate cannot be
spread and allocated either to the preceding or subsequent periods in which such
excess interest is to be paid or collected pursuant to SECTION 18.8 of this
Ground Lease. In the event of a termination of this Ground Lease with respect to
all Properties pursuant to this SECTION 11.2, Lessee shall either (i) purchase,
on the Basic Rent Payment Date stipulated in the written notice contemplated by
this SECTION 11.2, all Properties for cash at their respective Acquisition Cost
or (ii) with the consent of Brazos and Agent, arrange, at its own cost and
expense, for all Properties to be sold for cash pursuant to SECTION 11.4 and
with the consequences therein provided, except that such sale must occur on the
Basic Rent Payment Date stipulated in the written notice contemplated by this
SECTION 11.2.
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Section 11.3. RENEWAL.
(a) Not later than twelve months prior to the end of the Lease Term or
any Renewal Term, if any, as applicable, Brazos, with the consent of Agent if it
is electing to renew, shall give notice to Lessee as to whether it desires to
renew the lease with respect to all Properties and the terms and conditions
(including the rental amounts) of any such renewal. Not later than nine months
prior to the end of the Lease Term or Renewal Term, as applicable, Lessee shall
give notice to Brazos as to whether it will renew or not renew the lease.
Failure of Lessee to give such notice shall be deemed an election not to renew
the lease. If the parties elect to renew the Lease Term as set forth above,
Brazos will use commercially reasonable efforts to obtain financing, on terms
and conditions consistent with the Credit Agreement and partnership agreement of
Brazos or otherwise acceptable to Brazos and Lessee, for the Renewal Term. So
long as (i) no Event of Default or Event of Property Termination has occurred
and is continuing, and (ii) Brazos shall have received a commitment for
financing through the last day of the Renewal Term (as defined below) from the
Agent under the Credit Agreement, the lease shall be renewed for a term (the
"RENEWAL TERM") equal to five (5) years in the case of the initial Renewal Term
and one (1) year in the case of subsequent Renewal Terms commencing on the first
day of the calendar month following the last day of the Lease Term or Renewal
Term, as applicable, thereof; provided, however, the Lease Term or Renewal Term,
as applicable, shall not be renewed if on the first day of the new Renewal Term
the lender(s) fails to fund under its commitment pursuant to the terms of such
commitment for any reason. Lessee may give advance notice of its intention to
renew this Ground Lease with respect to all Properties for successive Renewal
Terms. Upon acceptance by Brazos and Agent of such successive Renewal Terms,
Lessee shall be bound by such renewals for the entire period of successive
Renewal Terms.
(b) If this Ground Lease is not being renewed, Lessee shall, at its
option, either (i) purchase all Properties for cash at its Acquisition Cost
during the period from one (1) month before the end of the Lease Term or Renewal
Term, as applicable, to five (5) Business Days before the end of the Lease Term
or Renewal Term, as applicable or (ii) arrange, at its own cost and expense, for
all Properties to be sold for cash pursuant to SECTION 11.4 and with the
consequences therein provided during the period from six (6) months before the
end of the Lease Term or Renewal Term, as applicable, to one (1) month before
the end of the Lease Term or Renewal Term, as applicable. Not later than eight
months prior to the end of the Lease Term or Renewal Term, as applicable, Lessee
shall give notice to Brazos of its election to either purchase or arrange for
the sale of all of the Property to a third party. Any notice given by Lessee
pursuant to the preceding sentence shall be irrevocable, except that Lessee may
revoke the election to have a Property sold to a third party if Lessee purchases
such Property.
Section 11.4. SALES TO THIRD PARTIES.
(a) If Lessee exercises its right to arrange for a sale of a Property
to a third party pursuant to SECTION 11.1, 11.2 or 11.3, Brazos shall receive
the proceeds of sale and:
(i) if the proceeds of sale are greater than the Acquisition
Cost of the Property sold, Brazos shall pay to Lessee the
amount by which such proceeds exceed such Acquisition Cost;
and
(ii) if the proceeds of sale are equal to or less than the
Acquisition Cost of the Property sold, Lessee shall pay to
Brazos an amount equal to (A) such Acquisition Cost less (B)
the proceeds of such sale.
For purposes of this SECTION 11.4, in connection with the sale of a Property
"PROCEEDS OF SALE" shall mean the aggregate proceeds from the sale of such
Property without reduction for any amounts paid by Lessee.
(b) All payments and credits referred to in PARAGRAPH (A) above shall
be made on the date of the sale of such Property, and the parties shall account
to each other for such payments and credits. In consideration for
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the receipt by Brazos of the proceeds of sale and all other amounts then due and
owing hereunder, Brazos shall transfer title to such Property to the purchaser
at the sale designated by Lessee pursuant to a special warranty deed. In the
event of a sale pursuant to this SECTION 11.4, neither Lessee nor any Affiliate
of Lessee shall purchase the Property. Any Property sold to a third party
pursuant to this PARAGRAPH (b) shall, unless SECTION 11.4 (a)(i) applies, be
free of any Liens at the time of sale, including Liens which would otherwise be
Permitted Encumbrances if such Liens would reduce the Value to the purchaser of
such Property; provided however, Lessee shall have the option to obtain
affirmative title insurance, if available, to insure over such Lien or to make
other arrangements acceptable to such purchaser.
(c) If a Property and all Facilities thereon are sold to the same
third party, the proceeds of sale shall be allocated prorata between such
Property and Facility based on the Acquisition Cost of such Property and the
Acquisition Cost (as defined in the Facilities Lease) of such Facility.
Section 11.5. ADDITIONAL PAYMENTS. In connection with any purchase or
sale of a Property under this ARTICLE XI, on or before the date such purchase or
sale occurs, Lessee shall pay to Brazos, in addition to any purchase price
payable, all Basic Rent payable, any Additional Rent, all amounts owing under
SECTION 11.4, and other amounts owing hereunder.
Section 11.6. TERMINATION OF GROUND LEASE. Upon receipt by Brazos of
the purchase price payable in connection with any sale or purchase of any
Property under this ARTICLE XI, together with all additional payments required
under SECTION 11.5 with respect to such Property, this Ground Lease shall
terminate with respect to such Property.
Section 11.7. SURRENDER OF PROPERTY. Subject to the provisions of this
ARTICLE XI and ARTICLES XII, XIII, XIV and XV hereof, upon termination of the
lease of any Property hereunder, Lessee shall surrender such Property to Brazos.
In connection with the sale of any Property by Brazos, in consideration of the
receipt of the purchase price and all other amounts which may be owing to Brazos
under SECTION 11.5, Brazos shall execute and deliver all instruments of transfer
necessary to convey Brazos' interest to the purchaser of such Property.
ARTICLE XII
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ECONOMIC DISCONTINUANCE
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Section 12.1. UNECONOMIC PROPERTY. In addition to Lessee's right to
terminate under SECTION 11 hereof, if, at any time after the end of its Lease
Term, in the good faith judgment of Lessee, any Property shall have become
uneconomic for continued use and occupancy by Lessee (such Property hereinafter
sometimes called an "UNECONOMIC PROPERTY"), then Lessee shall deliver to Brazos
and Assignee a written notice (an "UNECONOMIC NOTICE") containing (i) notice of
Lessee's intention to terminate the Ground Lease as to such Uneconomic Property
as of a Basic Rent Payment Date specified in such notice, which Basic Rent
Payment Date shall be within sixty (60) days of such notice, and (ii) a
certificate of an officer of Lessee stating that Lessee has determined that such
Property has become uneconomic for continued use and occupancy by Lessee;
provided that Lessee may not deliver an Uneconomic Notice to Brazos under the
terms of this ARTICLE XII for one (1) or more Properties, the aggregate
Acquisition Costs of which exceed ten percent (10%) of the aggregate Acquisition
Costs of all Properties; and provided, further, that if at the end of the Lease
Term the aggregate Acquisition Costs of Properties for which Lessee has given
Brazos an Uneconomic Notice exceeds ten percent (10%) of the aggregate
Acquisition Costs of all Properties, Lessee shall not have the right to sell any
Properties to a third party pursuant to SECTION 11.4. Lessee shall terminate
this Ground Lease with respect to such Uneconomic Property and shall either
purchase the Uneconomic Property for cash at its Acquisition Cost on the Basic
Rent Payment Date specified in such notice or sell such Uneconomic Property on
such date; provided, that if the proceeds of the sale of the Uneconomic Property
are less than the Acquisition Cost of such Uneconomic Property, then in addition
to the purchase price Lessee shall pay to Brazos an amount equal to such
Acquisition Cost less the proceeds of such sale and if such proceeds of sale
exceed the Acquisition Cost, Brazos will pay any excess to Lessee.
Section 12.2. PAYMENT. In connection with any purchase or sale pursuant
to this ARTICLE XII, on the Basic Rent Payment Date upon which such purchase or
sale occurs, Lessee shall pay or cause the purchaser to pay to Brazos the
purchase price, and Lessee shall pay all Basic Rent payable and any Additional
Rent and other amounts owing hereunder.
Section 12.3. NO RIGHT TO USE. If Lessee terminates this Ground Lease
with respect to any Property pursuant to this ARTICLE XII, neither Lessee nor
any Affiliate of Lessee shall have the right for one year following the date of
such termination to use, and shall not use, such Property in connection with the
development of a Facility.
ARTICLE XIII
------------
EVENTS OF DEFAULT
Section 13.1. EVENTS OF DEFAULT. Any of the following events of default
shall constitute an "EVENT OF DEFAULT" and shall give rise to the rights on the
part of Brazos described in SECTION 13.2 hereof:
(a) FAILURE TO MAKE PAYMENTS. Failure of Lessee to pay amounts due
to Brazos at the time of any scheduled sale of a Property hereunder, failure of
Lessee to pay any payment due hereunder, including without limitation, Basic
Rent or Additional Rent for more than five (5) Business Days after such payment
is due pursuant to ARTICLE VI hereof.
(b) FAILURE TO MAINTAIN INSURANCE. Failure of Lessee to maintain the
insurance required by ARTICLE IX hereof, or default in the performance of the
covenant contained in SECTION 9.4 hereof.
(c) OTHER DEFAULTS. Lessee shall default in the performance or
observance of any other term, covenant, condition or obligation contained in
this Ground Lease or any Consent 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
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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.
(d) 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 or 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.
(e) PAYMENT OF OBLIGATIONS. A default or event of default, the effect
of which results in the holder or holders of any Indebtedness of Lessee or
Guarantor, or a trustee or agent on behalf of such holder or holders,
accelerating 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).
(f) MISREPRESENTATIONS. Any representation or warranty made by Lessee
in this Ground Lease or any Consent or which is contained in any certificate,
document or financial or other statement furnished under or in connection with
this Ground Lease proves to be false or misleading in any material respect when
made or deemed made.
(g) DEFAULT UNDER LEASE DOCUMENTS. An Event of Default (as defined in
the Agreement for Ground Lease, Agreement for Facilities Lease or Facilities
Lease) shall occur and be continuing under the Agreement for Ground Lease,
Agreement for Facilities Lease or Facilities Lease, respectively.
(h) OTHER AGREEMENTS. Lessee shall default in any material respect in
the performance or observance of any term, covenant, condition or obligation
contained in any other material written agreement executed by Lessee with or for
the benefit of Brazos or Agent and such default shall not have been cured within
any applicable grace or cure period and shall be continuing.
(i) UNAUTHORIZED ASSIGNMENT. Any assignment by Lessee of any interest
in this Ground Lease other than in accordance with the terms of this Ground
Lease.
(j) 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 or any document contemplated hereby or thereby proves to
be false or misleading in any material respect when made or deemed made, or
Guarantor defaults in the performance of any term, condition, covenant or
obligation contained in the Guaranty or any Consent, or any default or event of
default occurs thereunder and such default shall not have been cured within any
applicable grace or cure period and shall be continuing or any provision of any
Guaranty shall for any reason be terminated or
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challenged 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.
(k) EVENT OF PROPERTY TERMINATION. The occurrence of any Event of
Property Termination.
(l) DEFAULT UNDER CORPORATE CREDIT DOCUMENTS. The occurrence and
continuation of any Default under any of the Corporate Credit Documents.
Section 13.2. RIGHTS UPON DEFAULT. Upon the occurrence and continuation
of any Event of Default Brazos or any Assignee may in its discretion declare
this Ground Lease to be in default and do, to the extent permitted by applicable
law, any one or more of the following:
(a) Terminate this Ground Lease as to any or all Properties leased
hereunder;
(b) Whether or not this Ground Lease as to any Property is
terminated, sell any Property or Brazos' interest in any Acquired Ground Lease
(with or without the concurrence or request of Lessee);
(c) Hold, use, occupy, lease or keep idle any or all Property as
Brazos in its sole discretion may determine, without any duty to account to
Lessee with respect to any such action or inaction or for any proceeds thereof;
(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; and
(e) Declare an Event of Property Termination as to any or all
Properties leased hereunder.
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 Ground Lease 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 Ground Lease by Brazos with
knowledge of any breach of this Ground Lease by Lessee or of any default by
Lessee in the performance of any of the terms, covenants or conditions of this
Ground Lease, shall not be deemed to be a waiver of any provision of this Ground
Lease.
No receipt of moneys by Brazos from Lessee after the termination or
cancellation hereof in any lawful manner shall reinstate, continue or extend the
Lease Term or any Renewal Term, or affect any notice theretofore given to
Lessee, or operate as a waiver of the right of Brazos to enforce the payment of
Basic Rent or Additional Rent or other charges payable hereunder, or operate as
a waiver of the right of Brazos to recover possession of any Property by proper
suit, action, proceedings or remedy; it being agreed that, after the service of
notice to terminate or cancel this Ground Lease, 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 Property,
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 for the use, operation and occupation of the Property, or at
the election of Brazos, on account of Lessee's liability hereunder. Acceptance
of the keys to any
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Property, or any similar act, by Brazos, or any agent or employee, during the
term hereof, shall not be deemed to be an acceptance of a surrender of any
Property unless Brazos shall consent thereto in writing.
If, after an Event of Default shall have occurred, Lessee fails to
surrender promptly after written request by Brazos or converts or destroys any
Property, Lessee shall be liable to Brazos for all Basic Rent and Additional
Rent then due and payable with respect to such Property, all other amounts
payable under this Ground Lease, the Acquisition Cost of such Property as of the
date of such request, conversion or destruction and 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.
If, after an Event of Default Brazos repossesses any Property,
notwithstanding any termination of this Ground Lease, Lessee shall be liable for
and Brazos may recover from Lessee all Basic Rent accrued and any Additional
Rent owing with respect to such Property to the date of such repossession, all
other amounts payable under this Ground Lease, and all losses, damages and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) sustained by Brazos by reason of such Event of Default and the
exercise of Brazos' remedies with respect thereto. In addition, Brazos may sell
Brazos' interest in any Property upon any terms that Brazos deems satisfactory,
free of any rights of Lessee or any person claiming through or under Lessee. In
the event of such sale, in addition to the amounts payable under the first
sentence of this paragraph, Brazos shall be entitled to recover from Lessee, as
liquidated damages, and not as a penalty, an amount equal to the Acquisition
Cost of any Property so sold, minus the net proceeds of such sale (deducting
from the gross proceeds of such sale any reasonable legal expenses, commissions,
sales taxes or other costs or expenses associated with such sale) received by
Brazos; provided, however, if the proceeds of such sale are in excess of the
amount payable to Brazos pursuant hereto, such excess shall be the property of
Lessee. In lieu of such sale, in addition to the amounts payable under the first
sentence of this paragraph, Brazos may cause Lessee to pay to Brazos, and Lessee
shall pay to Brazos, as liquidated damages, and not as a penalty, an amount
equal to the Acquisition Cost of any or all of the Property, and upon payment in
full of all such amounts Brazos shall transfer all of Brazos' right, title and
interest in and to the Property to Lessee.
Brazos may (i) sell all or any part of the Property at public or
private sale, as Brazos may determine, free and clear of any rights of the
Lessee and without any duty to account to the Lessee with respect to such action
or inaction or any proceeds with respect thereto (except to the extent required
by clause (ii) below if Brazos shall elect to exercise its rights thereunder) in
which event the Lessee's obligation to pay Basic Rent hereunder for periods
commencing after the date of such sale shall be terminated or proportionately
reduced, as the case may be; and (ii) if Brazos shall so elect, demand that the
Lessee pay to Brazos, and the Lessee shall pay to Brazos, on the date of such
sale, as liquidated damages for loss of a bargain and not as a penalty (the
parties agreeing that Brazos' actual damages would be difficult to predict, but
the aforementioned liquidated damages represent a reasonable approximation of
such amount) (in lieu of Basic Rent due for periods commencing on or after the
Basic Rent Payment Date coinciding with such date of sale (or, if the sale date
is not a Basic Rent Payment Date, the Basic Rent Payment Date next preceding the
date of such sale)), an amount equal to (A) the excess, if any, of (1) the
Acquisition Cost calculated as of such Basic Rent Payment Date (including all
Rent due and unpaid to and including such Basic Rent Payment Date), over (2) the
net proceeds of such sale, if any (that is, after deducting all reasonable costs
and expenses incurred by Brazos, the Agent and the Assignees incident to such
conveyance, including, without limitation, repossession costs, brokerage
commissions, prorations, transfer taxes, fees and expenses for counsel, title
insurance fees, survey costs, recording fees, and any repair or alteration
costs); plus (B) all damages, reasonable costs and expense of Brazos under the
Ground Lease; plus (C) interest at the overdue rate provided in SECTION 6.3
hereof on the foregoing amount from such Basic Rent Payment Date until the date
of payment.
Brazos may exercise any other right or remedy that may be available to
it under applicable law, or proceed by appropriate court action (legal or
equitable) to enforce the terms hereof or to recover damages for the breach
hereof.
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Separate suits may be brought to collect any such damages for any period(s), and
such suits shall not in any manner prejudice Brazos' right to collect any such
damages for any subsequent period(s), or Brazos may defer any such suit until
after the expiration of the Term, in which event such suit shall be deemed not
to have accrued until the expiration of the Lease Term.
In the event that a court of competent jurisdiction rules that this
Ground Lease constitutes a mortgage, deed of trust or other secured financing as
is the intent of the parties pursuant to SECTION 3.3, and subject to the
availability of such remedy under applicable law, then Brazos and the Lessee
agree that the Lessee hereby grants, bargains, sells, transfers, assigns and
conveys unto the trustee named as such in the Lien granted by Brazos to Agent,
as trustee and herein referred to as "trustee", and its successors (Brazos
hereby reserving the right to from time to time, with or without cause and at
Brazos' sole discretion, by instrument in writing, substitute a successor or
successors to trustee, which instrument, executed by Brazos duly acknowledged
and recorded in the office of the recorder of the county or counties where the
Property is situated, shall be conclusive proof of proper substitution of such
successor, who shall, without conveyance from trustee or any successor trustee
to trustee, succeed to all his title, estate, rights, powers and duties), in
trust a lien and security interest against the Property, to have and to hold the
Property, together with all and singularly the rights, hereditaments, and
appurtenances in any way appertaining or belonging thereto, unto such trustee
and such trustee's successor or substitute in such trust, and such trustee's and
its or his successors and assigns, in trust, and that, upon the occurrence and
during the continuance of any Event of Default such trustee, at the direction of
Brazos, may proceed with foreclosure, and in such event such trustee, at the
direction of Brazos, is hereby authorized and empowered, and it shall be such
trustee's special duty, upon such request of Brazos, acting upon a request from
the Agent or Assignees, to sell the Property, or any part thereof, to the
highest bidder or bidders for cash or credit, as directed by Brazos, acting upon
a request from the Agent or Assignees, at the location at the county courthouse
specified by the commissioner's court in the county in the state wherein the
Property then subject to the lien hereof is situated or, if no such location is
specified by the commissioner's court, then at the location specified in such
trustee's notice of such sale to the Lessee; provided, that if the Property is
situated in more than one county, then such sale of the Property, or part
thereof, may be made in any county in the state wherein any part of the Property
then subject to the lien hereof is situated. Any such sale shall be made at
public outcry between the hours of ten o'clock (10:00) A.M. and four o'clock
(4:00) P.M. on the first (1st) Tuesday in any month. Written or printed notice
of such sale shall be posted at the courthouse door in the county, or if more
than one, then in each of the counties, wherein the Property then subject to the
lien hereof is situated. Such notice shall designate the county where the
Property, or part thereof, will be sold and the earliest time at which the sale
will occur, and such notice shall be posted at least twenty-one (21) days prior
to the date of sale. Such notice shall also be filed with the county clerk in
the county, or if more than one, then in each of the counties wherein the
Property is located. Trustee shall, at least twenty-one (21) days preceding the
date of sale, serve written notice of the proposed sale by certified mail on
Lessee and each other debtor obligated to pay the Acquisition Cost and other
obligations secured hereby according to the records of the Agent and Assignees.
After such sale, Brazos shall make to the purchaser or purchasers thereunder
good and sufficient assignments, deed, bills of sale, and other instruments, in
the name of Brazos, conveying the Property, or part thereof, so sold to the
purchaser or purchasers with general warranty of title by Brazos. The sale of a
part of the Property shall not exhaust the power of sale, but sales may be made
from time to time until the Acquisition Cost and other obligations secured
hereby are paid and performed in full. It shall not be necessary to have present
or to exhibit at any such sale any of the personal property. Upon the occurrence
and during the continuation of a Lease Event of Default, Brazos, in lieu of or
in addition to exercising any power of sale hereinabove given, may proceed by a
suit or suits in equity or at law, whether for a foreclosure hereunder, or for
the sale of the Property, or against the Lessee on a recourse basis for the
Acquisition Cost, or the specific performance of any covenant or agreement
herein contained or in aid of the execution of any power herein granted, or for
the appointment of a receiver pending any foreclosure hereunder or the sale of
the Property, or for the enforcement of any other appropriate legal or equitable
remedy.
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No remedy referred to in this SECTION 13.2 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.
With respect to the termination of this Ground Lease as to any Property
as a result of an Event of Default, Lessee hereby waives service of any notice
of intention to re-enter. Lessee hereby waives any and all rights to recover or
regain possession of any Property or to reinstate this Ground Lease as permitted
or provided by or under any statute, law or decision now or hereafter in force
and effect.
Section 13.3. EVENTS OF PROPERTY TERMINATION. The occurrence of any of
the following shall constitute an Event of Property Termination with respect to
a Property:
(a) UNSATISFACTORY TITLE. If at any time title to any Property
is not satisfactory to Brazos or Assignee by reason of any Lien or other defect
not disclosed in writing at the time of any advance (even though the same may
have existed at the time of any such advance), except the Permitted
Encumbrances, and such Lien, encumbrance or other defect would have a material
adverse effect on the Property and is not corrected to the satisfaction of
Brazos and Assignee within one hundred eighty (180) days after written notice to
Lessee unless such defect whether material or not would cause a loss or
forfeiture of title to a Property or the loss of priority of any Lien for the
benefit of Assignee, in which case such defect shall be cured immediately and
prior to any such loss of title or priority.
(b) NON-COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. If Lessee
fails to materially comply with any requirement of any Governmental Authority
with respect to such Property and such non-compliance results in a material
adverse effect on the value of the Property or to contest such requirement by
means of a Permitted Contest under ARTICLE XVII (i) within thirty (30) days
after notice in writing of such requirement shall have been given to Lessee by
such Governmental Authority or by Brazos or Assignee, or (ii) if such
requirement is of a nature that it cannot be complied with within such 30-day
period, if Lessee shall fail after such notice either diligently to commence
complying with such requirement or to proceed thereafter with reasonable
diligence and in good faith to comply with such requirement; provided, however,
that (i) Lessee shall in any event comply with such requirement prior to the
date on which such Property may be seized or sold as a result of such
non-compliance, and (ii) a potential adverse impact reasonably likely to be less
than $500,000 in the aggregate with respect to all Properties shall be deemed to
be not material.
(c) DEFAULT UNDER ACQUIRED GROUND LEASE. Lessee shall default
after the expiration of all applicable cure periods under such Acquired Ground
Lease or as may be allowed under local Law in the observance or performance of
any term, covenant or condition of the Acquired Ground Lease relating to such
Property on the part of Brazos, as tenant thereunder, to be observed or
performed, unless any such observance or performance shall have been waived or
not required by the landlord under the Acquired Ground Lease, or if any one or
more of the events referred to in the Acquired Ground Lease shall occur which
would cause the Acquired Ground Lease to terminate without notice or action by
the landlord thereunder or which would entitle the landlord under the Acquired
Ground Lease to terminate the Acquired Ground Lease and the term thereof by the
giving of notice to Brazos, as tenant thereunder, or if the Acquired Ground
Lease shall be terminated or canceled for any reason or under any circumstance
whatsoever, or if any of the terms, covenants or conditions of the Acquired
Ground Lease shall in any manner be modified, changed, supplemented, altered or
amended in any material respect without the consent of Brazos.
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Section 13.4. BRAZOS' RIGHT UPON EVENT OF PROPERTY TERMINATION. If any
Event of Property Termination with respect to a Property shall occur, Brazos
may, with Agent's approval, as liquidated damages and not as a penalty, require
Lessee to purchase such Property on the next Basic Rent Payment Date at a price
equal to the Acquisition Cost for such Property by giving written notice of such
required purchase or assume all obligations of Brazos under an Acquired Ground
Lease. In connection with any such purchase under this SECTION 13.4, on the
Basic Rent Payment Date upon which such purchase shall occur, Lessee shall pay
to Brazos, in addition to any purchase price payable, all Basic Rent then due
and payable and any Additional Rent and other amounts owing hereunder with
respect to such Property. At the time of such sale, Lessee shall be required to
pay to Brazos the obligations, costs, losses, damages, and expenses (including,
without limitation, reasonable attorneys' fees and expenses) sustained by Brazos
by reason of such Event of Property Termination and exercise of Brazos' rights
under this SECTION 13.4.
ARTICLE XIV
-----------
LOSS OF OR DAMAGE TO PROPERTY
Section 14.1. LESSEE'S RISK. Lessee hereby assumes all risk of loss of
or damage to Property, however caused. No loss of or damage to any Property
shall impair any obligation of Lessee under this Ground Lease, which shall
continue in full force and effect with respect to any lost or damaged Property.
Section 14.2. REPAIR. In the event of damage of any kind whatsoever to
any Property (unless the same is determined by Lessee to be damaged beyond
repair as provided in SECTION 14.3 hereof) Lessee, at its own cost and expense,
shall place the same in good operating order, repair, condition and appearance.
Section 14.3. PROPERTY DAMAGED BEYOND REPAIR. If a material part of a
Property is unusable for sixty (60) days or more, or if the cost of repair
exceeds fifty percent (50%) of the Acquisition Cost, or if any Property is
seized, confiscated, rendered unfit for use or if any improvements thereon are
destroyed or damaged beyond repair (in the reasonable judgment of Lessee), or if
the use of the Property by Lessee or the use of any improvement by the party
entitled thereto in the ordinary course of business is prevented by the act of
any third person or persons or governmental instrumentality for a period
exceeding ninety (90) days (other than an act which is a Taking which is
substantial as described in SECTION 15.1 of this Ground Lease), or if the
Acquired Ground Lease applicable to such Property is terminated due to casualty,
or if such Property is attached (other than on a claim against Brazos as to
which Lessee is not obligated to indemnify Brazos) and the attachment is not
removed within ninety (90) days, or if a Taking which is substantial as
described in SECTION 15.1 shall occur, then in any such event, (i) Lessee shall
promptly notify Brazos and Assignee in writing of such event, (ii) on the Basic
Rent Payment Date following such event, unless such Basic Rent Payment Date
occurs within ten (10) days of such event, in which case on the next Basic Rent
Payment Date, Lessee shall pay to Brazos an amount equal to the Acquisition Cost
of such Property (after deducting any insurance proceeds received by Brazos in
respect of such event or the net amount after Brazos' expenses of proceeds to
Brazos from any award or sale made in connection with a Taking); provided that
insurance or net Taking proceeds, if any, received by Brazos in excess of the
Acquisition Cost of the affected Property shall be paid by Brazos to Lessee,
(iii) the Lease Term or Renewal Term of such Property shall continue until the
Basic Rent Payment Date on which Brazos receives payment from Lessee of the
amount payable pursuant to this SECTION 14.3 and the Basic Rent and any
Additional Rent and other amounts owing hereunder, and shall thereupon terminate
and (iv) Brazos shall on such Basic Rent Payment Date transfer title to such
Property to Lessee, and Lessee shall be subrogated to Brazos' rights in the
affected transaction.
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ARTICLE XV
----------
CONDEMNATION OF PROPERTY
Section 15.1. TAKING OF SUBSTANTIALLY ALL OF A PROPERTY. If Lessee or
Brazos shall receive notice that the use, occupancy or title to all or
substantially all of a Property is to be taken, requisitioned or sold in, by or
on account of eminent domain proceedings or other action by any person or
authority having the power of eminent domain (such events collectively referred
to as a "TAKING"), and such Taking is substantial, then the Lease Term or
Renewal Term shall terminate as provided in SECTION 14.3. A Taking shall be
deemed substantial if the remainder of the Property is unusable for Lessee's
ordinary business purposes or the Acquired Ground Lease applicable to such
Property is terminated as a result of such Taking.
Section 15.2. TAKING OF LESS THAN SUBSTANTIALLY ALL OF A PROPERTY. If
less than substantially all of a Property is subject to a Taking, then this
Ground Lease shall continue in effect as to the portion of the Property not
taken and Lessee, at its own cost and expense, shall place the same in good
operating order, repair, condition and appearance. Brazos and Lessee each hereby
waives any statutory or common law right allowing either of them to petition any
court to terminate this Ground Lease in the event of a Taking of less than
substantially all of the Property.
Section 15.3. GRANT OF MINOR EASEMENTS. So long as no Event of Default
or Event of Property Termination hereunder has occurred and is continuing,
Lessee shall have the right (i) to ▇▇▇▇▇ ▇▇▇▇▇ easements and dedications for the
benefit of any Property or which are deemed reasonably necessary for Lessee's
use of the Property; (ii) voluntarily to dedicate or convey, as required,
portions of any Property for road, highway and other public purposes as required
in the good faith judgment of Lessee in order to obtain or maintain the use of
all or part of a Property for the purposes intended by Lessee; and (iii)
voluntarily to execute petitions to have any Property or a portion thereof
annexed to any municipality or included within any utility, highway or other
improvement or service district; provided that no more than minor restoration is
required. If Lessee receives any monetary consideration for such easement or
dedication, Lessee shall promptly deliver such consideration to Brazos. Lessee
shall exercise the above power to grant without the joinder of Brazos, except
that Brazos will cooperate, at Lessee's expense, as necessary and join in the
execution of any appropriate instrument. As a condition precedent to Lessee's
exercise of any of Lessee's powers under this Article, Lessee shall give Brazos
ten (10) days' prior written notice of the proposed action. Upon the giving of
such notice, Lessee shall be deemed to have certified that such action will not
materially adversely affect either the market value of such Property or the use
of such Property for its intended purpose, will not affect Brazos' or any
Assignee's ability to exercise its rights and remedies under this Ground Lease
and that Lessee undertakes to remain obligated under this Ground Lease to the
same extent as if Lessee had not exercised its powers under this Article and
Lessee will perform all obligations under such instrument and shall prepare all
required documents and provide all other instruments and certificates as Brazos
may reasonably request.
ARTICLE XVI
-----------
LEASEHOLD INTERESTS
The following provisions relate to each lease (an "ACQUIRED GROUND
LEASE") under which a leasehold interest in a Property is being subleased to
Lessee hereunder:
(a) This Ground Lease is subject and subordinate to all of the terms,
covenants, provisions, conditions and agreements contained in each Acquired
Ground Lease and the matters to which the Acquired Ground Lease is subject and
subordinate.
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(b) Lessee hereunder covenants and agrees to perform and to observe all
of the terms, covenants, provisions, conditions and agreements of the underlying
Acquired Ground Lease on Brazos' part as lessee thereunder to be performed and
observed including, without limitation, payment of all rent, additional rent and
other amounts payable by Brazos as lessee under the Acquired Ground Lease, to
the end that all things shall be done which are necessary to keep unimpaired the
rights of Brazos as lessee under the Acquired Ground Lease. Each of the parties
hereto agree to promptly provide the other with copies of any notices or other
information received in writing from any landlord under an Acquired Ground
Lease. If in the reasonable judgment of Lessee, the lessor under any Acquired
Ground Lease shall default in any of its obligations to Brazos with respect to
the Property demised by such Acquired Ground Lease, Lessee shall have the right,
after giving Brazos prior written notice of its intention to act and of the
nature of the action proposed to be taken by Lessee, to take such action in its
own name in order to enforce the rights of the lessee in respect of the
Property demised; provided, however, Lessee agrees to indemnify, defend and hold
Brazos harmless from and against all liability, damage or expense which Brazos
shall suffer or incur by reason of such action.
(c) Lessee covenants and agrees that it will not do or cause to be done
or suffer or permit any act or thing to be done which would cause such Acquired
Ground Lease or the rights of Brazos as lessee thereunder to be canceled,
terminated or forfeited or which would make Lessee or Brazos liable for any
losses, costs, liabilities, damages, claims, penalties or other expenses. Brazos
covenants and agrees, subject to any limitations on its rights and obligations
hereunder, that it will not do or cause to be done or knowingly suffer or
knowingly permit any act or thing to be done without notice to Lessee which
would or might cause such Acquired Ground Lease or the rights of Brazos as
lessee thereunder to be canceled, terminated or forfeited or which would make
Lessee or Brazos liable for any losses, costs, liabilities, damages, claims,
penalties or other expenses.
(d) Lessee covenants and agrees pursuant to ARTICLE X hereof to
indemnify and hold harmless Brazos and any Assignee from and against any and all
liability, loss, damage, suits, penalties, claims and demands of every kind and
nature (including, without limitation, reasonable attorneys' fees and expenses)
by reason of Lessee's failure to comply with any Acquired Ground Lease or the
provisions of this ARTICLE XVI.
(e) Brazos and Lessee agree that any services which are required to be
provided or repairs or restorations which are required to be made in accordance
with the provisions of such Acquired Ground Lease by the lessor thereunder will
be provided and made by such lessor, and Brazos shall have no obligation to
provide any such services or to make any such repairs or restorations. Brazos
shall in no event be liable to Lessee nor shall the obligations of Lessee
hereunder be impaired or the performance thereof excused because of any failure
or delay on the part of the lessor under the Acquired Ground Lease in providing
such services or making such restorations or repairs and such failure or delay
shall not constitute a basis for any claim against Brazos or any offset against
any amount payable to Brazos under this Ground Lease.
(f) If Brazos' interest under any Acquired Ground Lease shall expire,
terminate or otherwise be extinguished, the Ground Lease of the Property to
which such Acquired Ground Lease relates shall thereupon terminate as provided
in this paragraph. Upon such expiration, termination or extinguishment (i) on
the Basic Rent Payment Date next succeeding such event, Lessee shall pay to
Brazos an amount equal to the Acquisition Cost of such Property and (ii) the
Lease Term or Renewal Term of such Property shall continue until the date on
which Brazos receives payment from Lessee of the amount payable pursuant to this
paragraph (f) and of all Basic Rent payable and any Additional Rent and other
amounts owing hereunder, and shall then terminate upon the payment of such
amounts.
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ARTICLE XVII
------------
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 Property to comply with any Legal
Requirements applicable to any Property or the occupancy, use or operation
thereof, so long as no Event of Default or Event of Property Termination exists
under this Ground Lease with respect to any Property, 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 Property or any Basic
Rent or any Additional Rent would be subject to sale, forfeiture or loss, as a
result of failure to comply therewith, (ii) shall not affect the payment of any
Basic Rent or any Additional Rent or other sums due and payable hereunder, (iii)
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 X of this Ground
Lease shall be deemed to be adequate indemnification if no Event of Default,
Event of Property Termination, Potential Default or Potential Property
Termination exists and if such civil liability is reasonably likely to be less
than $100,000 per Property and $1,000,000 in the aggregate for all Properties),
(iv) shall be permitted under the provisions of the Acquired Ground Lease, if
any, on such Property, (v) if involving taxes, shall suspend the collection of
such taxes, and (vi) shall be permitted under and be conducted in accordance
with the provisions of any other instrument to which Lessee or the Property 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. Notwithstanding
anything in this paragraph (a) to the contrary, Lessee shall not be obligated to
actively contest any mechanics' or materialmens' Lien or claim which does not
exceed $500,000; provided that the failure to so contest does not violate
clauses (i)- (iv) or (vi) above; provided further, that such Lien is junior to
any Lien of an Assignee on such Property, and provided further, that Lessee
shall in any event diligently contest and defend against the enforcement of any
such Lien or claim 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 and Agent 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 Ground Lease, 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.
ARTICLE XVIII
-------------
MISCELLANEOUS
Section 18.1. SURVIVAL. All agreements, indemnities, representations
and warranties, and the obligation to pay Additional Rent contained in this
Ground Lease shall survive the expiration or other termination hereof.
Section 18.2. ENTIRE AGREEMENT. This Ground Lease and the Property
Leasing Records covering Property leased pursuant hereto 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,
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express or implied, have been made by any party hereto with respect to this
Ground Lease or the Property, except as provided herein or therein.
Section 18.3. MODIFICATIONS. This Ground Lease 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 and is 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 18.4. GOVERNING LAW. THIS GROUND LEASE SHALL WITH RESPECT TO
EACH PROPERTY IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE IN WHICH SUCH PROPERTY IS LOCATED,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. ANY PROVISION
OF THIS GROUND LEASE 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, LESSEE AND BRAZOS HEREBY WAIVE ANY PROVISION OF LAW WHICH
RENDERS ANY PROVISION HEREOF PROHIBITED OR UNENFORCEABLE IN ANY RESPECT.
Section 18.5. NO OFFSETS. The obligations of Lessee to pay all amounts
payable pursuant to this Ground Lease (including specifically and without
limitation amounts payable due under ARTICLES VI and X hereof) 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.
The obligation of Lessee to lease and pay Basic Rent, Additional Rent or any
other amounts for any and all Property is without any warranty or
representation, express or implied, as to any matter whatsoever on the part of
Brazos or any Assignee or any Affiliate of either, or anyone acting on behalf of
any of them.
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 PROPERTY,
OR AS TO WHETHER ANY PROPERTY 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
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BASIC RENT, ADDITIONAL RENT AND ALL OTHER AMOUNTS PAYABLE HEREUNDER, INCLUDING,
WITHOUT LIMITATION, ANY RELATING TO:
(a) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY PROPERTY, 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 PROPERTY OR ANY TITLE
ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY;
(d) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS OR DESTRUCTION OF, OR
DAMAGE TO, ANY PROPERTY, IN WHOLE OR IN PART, OR CESSATION OF THE USE OR
POSSESSION OF ANY PROPERTY BY LESSEE FOR ANY REASON WHATSOEVER AND OF WHATEVER
DURATION, OR ANY CONDEMNATION, CONFISCATION, REQUISITION, SEIZURE, PURCHASE,
TAKING OR FORFEITURE OF ANY PROPERTY, IN WHOLE OR IN PART;
(e) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE, OWNERSHIP,
OCCUPANCY OR POSSESSION OF THE PROPERTY 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 GROUND LEASE OR ANY
OTHER INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF BRAZOS OR LESSEE TO
ENTER INTO THIS GROUND LEASE; 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 GROUND LEASE EXCEPT IN ACCORDANCE WITH THE EXPRESS TERMS
HEREOF. NOTHING CONTAINED IN THIS SECTION 18.5 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 GROUND LEASE (OTHER THAN BRAZOS) OR ANY PRIOR OWNER OF ANY PROPERTY.
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Section 18.6. 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 Ground Lease, Lessee agrees that the personal liability of Brazos and the
limited partners of Brazos shall be strictly and absolutely limited to the
Properties and no recourse for the payment of any amount due under this Ground
Lease or any other agreement contemplated hereby, 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 any
incorporator, shareholder, officer, director or Affiliate (past, present or
future) of such general partner or limited partner, 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 Ground Lease on the express understanding aforesaid.
Section 18.7. NOTICES.
(a) Any notice or request which by any provision of this Ground Lease
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) 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 Ground Lease and any other notices received with respect to any
Property.
Section 18.8. USURY. No provision of this Ground Lease, the Agreement
for Ground Lease or any other instrument relating to this Ground Lease, shall
require the payment or permit the collection of interest in excess of the
maximum non- usurious 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 18.8 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 the Ground Lease 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 Ground Lease (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 the Ground Lease, the Agreement for Ground
Lease or any of the other documents relating to this Ground Lease or any amount
contracted for, charged, taken, reserved or received with respect to this Ground
Lease, or if Brazos' exercise of any option contained herein or in any other
document 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 Ground Lease shall
immediately be deemed reformed and 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 18.8, exceed the amount of interest that would have been accrued
during such year if the Maximum Rate had from time to time
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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 18.9. NO MERGER. There shall be no merger of this Ground Lease
or of the leasehold estate hereby created with the fee estate in any Property by
reason of the fact that the same person acquires or holds, directly or
indirectly, this Ground Lease or the leasehold estate hereby created or any
interest herein or in such leasehold estate as well as the fee estate in any
Property or any interest in such fee estate.
Section 18.10. SALE OR ASSIGNMENT BY BRAZOS.
(a) So long as no Event of Default shall be continuing, Brazos shall
not sell, mortgage or encumber or assign its right, title, interest or
obligations in a Property or under this Ground Lease, except that Brazos shall
have the right to finance the acquisition and ownership of the Property by
selling, assigning or granting a security interest in its right, title and
interest in this Ground Lease as provided in the Credit Agreement and any or all
amounts due from Lessee or any third party under this Ground Lease 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 Ground 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 or any prior Assignee. Upon written notice to Lessee of any such
assignment, Lessee shall attorn to any Assignee, and Lessee shall thereafter
make payments of Basic Rent, Additional Rent and other 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 and Attornment Agreement for each Property.
Section 18.11. INCOME TAXES. Brazos agrees that it will not file any
Federal, state or local income tax returns with respect to any Property that are
inconsistent with the treatment of Lessee as owner of such Property for Federal,
state and local income tax purposes during the Lease Term or any Renewal Term.
Section 18.12. TRANSFER ON AS-IS BASIS. In connection with any sale of
Property pursuant to this Ground Lease, when Brazos transfers title, such
transfer shall be on an as-is, non-installment sale basis, without warranty by,
or recourse to, Brazos, but free of the Lien created by a Credit Agreement and
any Lien created by Brazos contrary to the terms of this Ground Lease.
Section 18.13. RIGHT TO PERFORM FOR LESSEE.
(a) If Lessee fails to perform or comply with any of its covenants or
agreements contained in this Ground Lease, Brazos may, upon notice to Lessee but
without waiving or releasing any obligations or default, itself perform or
comply with such covenant or agreement, and the amount of the reasonable
expenses of Brazos incurred in connection with such performance or compliance,
shall be payable by Lessee, not later than ten (10) days after written notice by
Brazos.
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(b) Without in any way limiting the obligations of Lessee hereunder,
Lessee hereby irrevocably appoints Brazos as its agent and attorney at the time
at which Lessee is obligated to deliver possession of any Property to Brazos, to
demand and take possession of such Property in the name and on behalf of Lessee
from whomsoever shall be at the time in possession thereof.
Section 18.14. MERGER, CONSOLIDATION OR SALE OF ASSETS.
(a) 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 the
surviving corporation, shall not thereby be released, without the consent of
Brazos and Agent, 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 no Event of Default or Event of Property
Termination shall have occurred or result therefrom.
(b) Brazos may not consolidate with or merge into any other
corporation or sell all or substantially all of its assets to any Person, except
that Brazos may consolidate with or merge into any other corporation, or sell
all or substantially all of its assets to any Person; provided that, the
surviving corporation or transferee Person shall assume, by execution and
delivery of instruments satisfactory to Lessee and Agent, the obligations of
Brazos hereunder and become successor to Brazos, but Brazos shall not thereby be
released without the consent of Lessee and Agent 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 Brazos
immediately prior to such consolidation, merger or sale.
(c) The terms and provisions of this Ground Lease shall be binding
upon and inure to the benefit of Brazos and Lessee and their respective
successors and assigns.
Section 18.15. EXPENSES. Lessee shall pay all of the out-of-pocket
costs and expenses incurred by Brazos and any Assignee in connection with this
Ground Lease as set forth on an invoice showing the basis for such costs and
expenses, including without limitation the reasonable fees and disbursements of
counsel to Brazos and counsel to any Assignee.
Section 18.16. PAYMENT OF TAXES. In connection with the sale or
purchase of any Property pursuant to this Ground Lease, Lessee shall pay or
shall cause the purchaser of such Property to pay in addition to the purchase
price, all transfer taxes, transfer gains taxes, if any, recording and filing
fees and all other similar taxes (except mortgage taxes), fees, expenses and
closing costs (including reasonable attorneys' fees) in connection with the
conveyance of such Property to Lessee or any purchaser; provided that Lessee or
any purchaser shall not be required to pay U.S. Federal net income or capital
gains taxes.
Section 18.17. RULE AGAINST PERPETUITIES. The parties hereto do not
intend any interest created by this Ground Lease to be a perpetuity or to be
subject to invalidation under the perpetuities rule, however, if the rule is to
be applied, then the perpetuities period shall be twenty-one (21) years after
the last to die of the currently living great-grandchildren and/or grandchildren
of ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇.
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50
Section 18.18. REEXECUTION. The parties hereto shall reexecute this
Ground Lease to the extent necessary to make this Ground Lease enforceable under
the laws of any State in which a Property is located.
Section 18.19. PURCHASE OR SALE OF FACILITY. Notwithstanding anything
to the contrary herein, Lessee shall not have the right to purchase any Property
or arrange for the sale of any Property to a third party unless simultaneous
with such purchase or sale any Facility located on such Property is purchased by
Lessee or sold to a third party.
Section 18.20. SEVERABILITY. In case one or more provisions of this
Ground Lease 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 18.21. INDEPENDENT OBLIGATIONS. Lessee hereby affirms and
agrees with Brazos that its obligations under SECTIONS 9.3 and 13.4 and under
ARTICLES X, XI, XII, XIV, XV and XVI are obligations of Lessee independent of
this Ground Lease and are intended to be fully enforceable as contractual
obligations of Lessee and its permitted assignees hereunder without regard to
the enforceability or continuation of this Ground Lease or Lessee's continued
use or occupancy of the Property. Lessee acknowledges that Brazos has obtained
commitments for financing of Properties and Assignees have entered into the
Credit Agreement in reliance on these independent obligations of Lessee.
Section 18.22. EXECUTION IN COUNTERPARTS. This Ground Lease 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 18.23. CONFIDENTIALITY. Brazos shall keep confidential all
information of a confidential nature received by it from Lessee pursuant to this
Ground Lease; 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 the 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 the Credit Agreement who, in each case,
agrees in writing to be bound by the terms of this Section; and provided
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 18.24. EXECUTION BY LESSEE. By execution of the Memorandum of
Lease for a Property, Lessee agrees to all of the terms and conditions of this
Ground Lease and is deemed to have executed this Ground Lease as of the date of
the request for advance with respect to such Property.
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IN WITNESS WHEREOF, Brazos and Lessee have caused this Ground Lease 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, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice
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
Page ▇-▇
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)
COUNTY OF NEW YORK )
On the 14th 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]
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
On the 14th 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
SCHEDULE OF INSURANCE
---------------------
1. All risk direct physical damage insurance for the Property and all
improvements, equipment and structures located thereon in the amounts and
subject to the deductibles and self-insurance provisions that are applicable
under like insurance coverage maintained by Lessee for similar property and
equipment owned, leased or held by Lessee and which are approved by Agent.
2. Commercial general liability insurance, including, without
limitation, coverage for legal liability against claims for bodily injury, death
or property damage, occurring on, in or about each Property and the
improvements, equipment and structures located thereon, in the minimum amount of
$1,000,000 combined single limit per occurrence for bodily injury and property
damage, $2,000,000 annual aggregate. Liability coverage may be subject to such
deductibles as may be usual and customary for Lessee to carry in its normal
course of business. However, in no event shall a deductible be applied as
respects Lessee's interest.
3. Workers' compensation and employers' liability insurance covering
Lessee's employees in such amount as is required by law, or if permissible under
state law, any legally appropriate alternative providing substantially similar
compensation for injured workers.
Page S-3