Exhibit 10.19
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MASTER LEASE AGREEMENT
Dated as of November 30, 2000
between
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG Equity, Limited Partnership),
as Lessor,
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.,
as Lessee
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TABLE OF CONTENTS
(Lease Agreement)
Page
ARTICLE I DEFINITIONS...................................................................................1
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ARTICLE II LEASE OF LEASED PROPERTY......................................................................1
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Section 2.1 Restatement of Bridge Lease; Acceptance and Lease of Property.................................1
Section 2.2 Acceptance Procedure..........................................................................2
ARTICLE III RENT..........................................................................................2
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Section 3.1 Basic Rent....................................................................................2
Section 3.2 Supplemental Rent.............................................................................2
Section 3.3 Method of Payment.............................................................................2
Section 3.4 Late Payment..................................................................................3
Section 3.5 Net Lease; No Setoff, Etc.....................................................................3
Section 3.6 Certain Taxes.................................................................................4
Section 3.7 Utility Charges...............................................................................5
ARTICLE IV WAIVERS.......................................................................................5
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ARTICLE V LIENS; EASEMENTS; PARTIAL CONVEYANCES.........................................................6
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ARTICLE VI MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND ADDITIONS..............................7
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Section 6.1 Maintenance and Repair; Compliance With Law...................................................7
Section 6.2 Improvements and Alterations..................................................................8
Section 6.3 Title to Alterations..........................................................................9
Section 6.4 Lessee's Personal Property...................................................................10
ARTICLE VII USE..........................................................................................10
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ARTICLE VIII INSURANCE....................................................................................10
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ARTICLE IX ASSIGNMENT AND SUBLEASING....................................................................12
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ARTICLE X LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE....................................................12
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Section 10.1 Event of Loss................................................................................12
Section 10.2 Event of Taking..............................................................................13
Section 10.3 Casualty.....................................................................................13
Section 10.4 Condemnation.................................................................................14
Section 10.5 Verification of Restoration and Rebuilding...................................................14
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Section 10.6 Application of Payments......................................................................14
Section 10.7 Prosecution of Awards........................................................................15
Section 10.8 Application of Certain Payments Not Relating to an Event of Taking...........................16
Section 10.9 Other Dispositions...........................................................................16
Section 10.10 No Rent Abatement............................................................................16
ARTICLE XI INTEREST CONVEYED TO LESSEE..................................................................16
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ARTICLE XII EVENTS OF DEFAULT............................................................................17
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ARTICLE XIII ENFORCEMENT..................................................................................22
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Section 13.1 Remedies.....................................................................................22
Section 13.2 Remedies Cumulative; No Waiver; Consents.....................................................24
Section 13.3 Purchase Upon an Event of Default............................................................25
ARTICLE XIV SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL........................................25
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Section 14.1 Lessee's Option to Purchase..................................................................25
Section 14.2 Conveyance to Lessee.........................................................................26
Section 14.3 Acceleration of Purchase Obligation..........................................................26
Section 14.4 Determination of Purchase Price..............................................................26
Section 14.5 Purchase Procedure...........................................................................26
Section 14.6 Option to Remarket...........................................................................27
Section 14.7 Rejection of Sale............................................................................29
Section 14.8 Return of Leased Property....................................................................30
Section 14.9 Renewal......................................................................................30
Section 14.10 Environmental Report.........................................................................31
ARTICLE XV LESSEE'S EQUIPMENT...........................................................................31
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ARTICLE XVI RIGHT TO PERFORM FOR LESSEE..................................................................32
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ARTICLE XVII MISCELLANEOUS................................................................................32
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Section 17.1 Reports......................................................................................32
Section 17.2 Binding Effect; Successors and Assigns.......................................................33
Section 17.3 Quiet Enjoyment..............................................................................33
Section 17.4 Notices......................................................................................33
Section 17.5 Severability.................................................................................34
Section 17.6 Amendment; Complete Agreements...............................................................34
Section 17.7 Construction.................................................................................34
Section 17.8 Headings.....................................................................................34
Section 17.9 Counterparts.................................................................................34
Section 17.10 GOVERNING LAW................................................................................34
Section 17.11 Reserved.....................................................................................35
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Section 17.12 Liability of the Lessor Limited..............................................................35
Section 17.13 Estoppel Certificates........................................................................35
Section 17.14 No Joint Venture.............................................................................36
Section 17.15 No Accord and Satisfaction...................................................................36
Section 17.16 No Merger....................................................................................36
Section 17.17 Survival.....................................................................................36
Section 17.18 Chattel Paper................................................................................36
Section 17.19 Time of Essence..............................................................................36
Section 17.20 Recordation of Lease.........................................................................36
Section 17.21 Investment of Security Funds.................................................................36
Section 17.22 Ground Leases................................................................................37
Section 17.23 Land and Building............................................................................37
EXHIBIT A Lease Supplement
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THIS MASTER LEASE AGREEMENT (as from time to time amended,
supplemented, or otherwise modified from time to time, this "Lease"), dated
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as of November 30, 2000, is among ATLANTIC FINANCIAL GROUP, LTD., a Texas
limited partnership (registered to do business in Arizona as AFG Equity,
Limited Partnership) (together with its successors and assigns hereunder,
"Lessor"), as Lessor, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P., a Missouri limited
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partnership (the "Lessee"), as Lessee.
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PRELIMINARY STATEMENT
A. Pursuant to the Bridge Lease, the Lessor acquired a leasehold
interest in the Land specified by the Construction Agent and is subleasing the
same to the Lessee, subject to the Ground Lease.
B. Pursuant to this Lease, the Lessor and the Lessee desire to
restate and amend the Bridge Lease, and the Lessor desires to lease to the
Lessee, and the Lessee desires to lease from the Lessor, the Land, as
described in the Lease Supplement.
C. The Construction Agent will construct, or cause to be
constructed, the Building on the Land, and the Building, as constructed,
will be the property of the Lessor and will become part of such property
subject to the terms of this Lease.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
Lessor and the Lessee hereby agree as follows:
ARTICLE I
DEFINITIONS
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Terms used herein and not otherwise defined shall have the meanings
assigned thereto in Appendix A hereto for all purposes hereof, and the rules
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of interpretation set forth in Appendix A shall apply to this Lease.
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ARTICLE II
LEASE OF LEASED PROPERTY
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Section 2.1 Restatement of Bridge Lease; Acceptance and Lease of
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Property. On the Closing Date, the Lessor, subject to the satisfaction or
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waiver of the conditions set forth in Article 3 of the Master Agreement, and
the Lessee hereby agree that the Bridge Lease is amended, restated and
replaced in its entirety by the terms, conditions and provisions of this
Lease, and the Lessor shall simultaneously sublease to the Lessee for the
Lease Term, the Lessor's interest in such Land, subject to the Ground Lease,
and Lease to the Lessee the Building and Equipment which thereafter may be
constructed and installed thereon pursuant to the Construction Agency
Agreement. The Lessee hereby agrees, expressly for the direct benefit of the
Lessor, commencing on the Closing Date, for the Lease Term, to sublease from
the Lessor the Lessor's interest in such Land, subject to the Ground Lease,
and to lease the Lessor's interest
in the Building and Equipment which thereafter may be constructed and
installed thereon pursuant to the Construction Agency Agreement.
Section 2.2 Acceptance Procedure. The Lessor hereby authorizes
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one or more employees of the Lessee, to be designated by the Lessee, as
the authorized representative or representatives of the Lessor to accept
delivery on behalf of the Lessor of the Leased Property. The Lessee hereby
agrees that such acceptance of delivery by such authorized representative or
representatives and the execution and delivery by the Lessee on the Closing
Date for property to be leased hereunder of the Lease Supplement in
substantially the form of Exhibit A hereto, appropriately completed (the
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"Lease Supplement"), shall, without further act, constitute the irrevocable
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acceptance by the Lessee of the Leased Property for all purposes of this
Lease and the other Operative Documents on the terms set forth therein and
herein, and that the Leased Property, together with the Building to be
constructed thereon pursuant to the Construction Agency Agreement, shall be
deemed to be included in the leasehold estate of this Lease and shall be
subject to the terms and conditions of this Lease as of the Closing Date.
The demise and lease of the Land and the Building pursuant to this
Section 2.2 shall include any additional right, title or interest in the
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Land and the Building which may at any time be acquired by the Lessor, the
intent being that all right, title and interest of the Lessor in and to the
Land and the Building shall at all times be demised and leased to the Lessee
hereunder.
ARTICLE III
RENT
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Section 3.1 Basic Rent. Beginning with and including the first
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Payment Date occurring after the Closing Date, the Lessee shall pay to
the Agent the Basic Rent for the Leased Property, in installments, payable
in arrears on each Payment Date during the Lease Term, subject to
Section 2.3(c) of the Master Agreement.
Section 3.2 Supplemental Rent. The Lessee shall pay to the Agent,
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or to whomever shall be entitled thereto as expressly provided herein or in
any other Operative Document, any and all Supplemental Rent on the date the
same shall become due and payable and in the event of any failure on the
part of the Lessee to pay any Supplemental Rent, the Agent shall have all
rights, powers and remedies provided for herein or by law or in equity or
otherwise in the case of nonpayment of Basic Rent. All Supplemental Rent to
be paid pursuant to this Section 3.2 shall be payable in the type of funds
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and in the manner set forth in Section 3.3.
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Section 3.3 Method of Payment. Basic Rent shall be paid to the
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Agent, and Supplemental Rent (including amounts due under Article XIV
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hereof) shall be paid to the Agent (or to such Person as may be entitled
thereto) or, in each case, to such Person as the Agent (or such other
Person) shall specify in writing to the Lessee, and at such place as the
Agent (or such other Person) shall specify in writing to the Lessee, which
specifications by the Agent shall be given by the Agent at least five (5)
Business Days prior to the due date therefor. Each payment of Rent
(including payments under Article XIV hereof) shall be made by the Lessee
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prior to
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12:00 p.m. (noon) Atlanta, Georgia time at the place of payment in funds
consisting of lawful currency of the United States of America which shall be
immediately available on the scheduled date when such payment shall be due,
unless such scheduled date shall not be a Business Day, in which case such
payment shall be made on the next succeeding Business Day.
Section 3.4 Late Payment. If any Basic Rent shall not be paid on
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the date when due, the Lessee shall pay to the Agent, as Supplemental Rent,
interest (to the maximum extent permitted by law) on such overdue amount
from and including the due date thereof to but excluding the Business Day of
payment thereof at the Overdue Rate.
Section 3.5 Net Lease; No Setoff, Etc. This Lease is a net lease
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and notwithstanding any other provision of this Lease, the Lessee shall pay
all Basic Rent and Supplemental Rent, and all costs, charges, taxes (other
than taxes covered by the exclusion described in Section 7.4(b) of the
Master Agreement), assessments and other expenses foreseen or unforeseen,
for which the Lessee or any Indemnitee is or shall become liable by reason
of the Lessee's or such Indemnitee's estate, right, title or interest in the
Leased Property, or that are connected with or arise out of the acquisition
(except the initial costs of purchase by the Lessor of its interest in the
Leased Property, which costs, subject to the terms of the Master Agreement,
shall be funded by the Funding Parties pursuant to the Master Agreement),
construction (except costs to be funded under the Construction Agency
Agreement), installation, possession, use, occupancy, maintenance,
ownership, leasing, repairs and rebuilding of, or addition to, the Leased
Property or any portion thereof, and any other amounts payable hereunder and
under the other Operative Documents without counterclaim, setoff, deduction
or defense and without abatement, suspension, deferment, diminution or
reduction, and the Lessee's obligation to pay all such amounts throughout
the Lease Term, including the Construction Term, is absolute and
unconditional. The obligations and liabilities of the Lessee hereunder shall
in no way be released, discharged or otherwise affected for any reason,
including without limitation: (a) any defect in the condition,
merchantability, design, quality or fitness for use of the Leased Property
or any part thereof, or the failure of the Leased Property to comply with
all Applicable Laws, including any inability to occupy or use the Leased
Property by reason of such non-compliance; (b) any damage to, removal,
abandonment, salvage, loss, contamination of or Release from, scrapping or
destruction of or any requisition or taking of the Leased Property or any
part thereof; (c) any restriction, prevention or curtailment of or
interference with any use of the Leased Property or any part thereof
including eviction; (d) any defect in title to or rights to the Leased
Property or any Lien on such title or rights or on the Leased Property;
(e) any change, waiver, extension, indulgence or other action or omission
or breach in respect of any obligation or liability of or by the Lessor,
the Agent or any Lender; (f) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceedings
relating to the Lessee, the Lessor, any Lender, the Agent or any other
Person, or any action taken with respect to this Lease by any trustee or
receiver of the Lessee, the Lessor, any Lender, the Agent or any other
Person, or by any court, in any such proceeding; (g) any claim that the
Lessee has or might have against any Person, including without limitation,
the Lessor, any vendor, manufacturer, contractor of or for the Leased
Property or any part thereof, the Agent, any
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Governmental Authority, or any Lender; (h) any failure on the part of the
Lessor to perform or comply with any of the terms of this Lease, any other
Operative Document or of any other agreement; (i) any invalidity or
unenforceability or illegality or disaffirmance of this Lease against or by
the Lessee or any provision hereof or any of the other Operative Documents
or any provision of any thereof whether or not related to the Transaction;
(j) the impossibility or illegality of performance by the Lessee, the Lessor
or both; (k) any action by any court, administrative agency or other
Governmental Authority; (l) any restriction, prevention or curtailment of or
interference with the Construction or any use of the Leased Property or any
part thereof; or (m) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not the Lessee shall have notice or
knowledge of any of the foregoing. Except as specifically set forth in
Articles X or XIV of this Lease, this Lease shall be noncancellable by the
Lessee in any circumstance whatsoever and the Lessee, to the extent
permitted by Applicable Law, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease, or to any
diminution, abatement or reduction of Rent payable by the Lessee hereunder.
Each payment of Rent made by the Lessee hereunder shall be final and the
Lessee shall not seek or have any right to recover all or any part of such
payment from the Lessor, the Agent, any Lender or any party to any
agreements related thereto for any reason whatsoever. The Lessee assumes the
sole responsibility for the condition, use, operation, maintenance, and
management of the Leased Property leased by it, and the Lessor shall have no
responsibility in respect thereof and shall have no liability for damage to
the property of either the Lessee or any subtenant of the Lessee on any
account or for any reason whatsoever, other than solely by reason of the
Lessor's willful misconduct or gross negligence.
Section 3.6 Certain Taxes. Without limiting the generality of
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Section 3.5, the Lessee agrees to pay when due all real estate taxes,
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personal property taxes, gross sales taxes, including any sales or lease tax
imposed upon the rental payments hereunder or under any sublease permitted
hereunder, occupational license taxes, water charges, sewer charges,
assessments of any nature and all other governmental impositions and charges
of every kind and nature whatsoever (the "tax(es)"), when the same shall be
due and payable without penalty or interest; provided, however, that this
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Section shall not apply to any of the taxes covered by the exclusion
described in Section 7.4(b) of the Master Agreement. It is the intention of
the parties hereto that, insofar as the same may lawfully be done, the
Lessor shall be, except as specifically provided for herein, free from all
expenses in any way related to the Leased Property and the use and occupancy
thereof. The Lessee covenants to furnish the Lessor and the Agent, upon the
Agent's written request, within thirty (30) days after the last date when
any tax must be paid by the Lessee as provided in this Section 3.6, official
receipts of the appropriate taxing, authority or other proof satisfactory to
the Lessor, evidencing the payment thereof.
So long as no Event of Default has occurred and is continuing, the
Lessee may defer payment of a tax so long as the validity or the amount
thereof is being contested by the Lessee with diligence and in good faith;
provided, however, that the Lessee shall furnish to the Lessor and the
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Agent, if requested in writing by either the Lessor or the Agent, a bond or
other adequate security in an amount and on terms reasonably satisfactory to
the Lessor and the Agent and shall
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pay the tax in sufficient time to prevent delivery of a tax deed. Such
contest shall be at the Lessee's sole cost and expense. The Lessee covenants
to indemnify and save harmless the Lessor, the Agent and each Lender from
any actual and reasonable costs or expenses incurred by the Lessor, the
Agent or any Lender as a result of such contest, which indemnification shall
survive the termination of this Lease.
Section 3.7 Utility Charges. The Lessee agrees to pay or cause to
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be paid as and when the same are due and payable all charges for gas, water,
sewer, electricity, lights, heat, power, telephone or other communication
service and all other utility services used, rendered or supplied to, upon
or in connection with the Leased Property.
ARTICLE IV
WAIVERS
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During the Lease Term, the Lessor's interest in the Leased
Property, including the Building (whether or not completed) and the Land, is
demised and let by the Lessor "AS IS" subject to (a) the rights of any
parties in possession thereof, (b) the state of the title thereto existing
at the time the Lessor acquired its interest in the Leased Property, (c) any
state of facts which an accurate survey or physical inspection might show
(including the survey delivered on the Closing Date), (d) all Applicable
Laws, and (e) any violations of Applicable Laws which may exist upon or
subsequent to the commencement of the Lease Term. THE LESSEE ACKNOWLEDGES
THAT, ALTHOUGH THE LESSOR WILL OWN AND HOLD LEASEHOLD TITLE TO THE LEASED
PROPERTY, THE LESSOR IS NOT RESPONSIBLE FOR THE DESIGN, DEVELOPMENT,
BUDGETING AND CONSTRUCTION OF THE BUILDING OR ANY ALTERATIONS. NEITHER THE
LESSOR, THE AGENT NOR ANY LENDER HAS MADE, OR SHALL BE DEEMED TO HAVE MADE,
ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, MERCHANTABILITY, TITLE,
HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF THE LEASED
PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED PROPERTY (OR ANY
PART THEREOF), ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED, AND NEITHER THE
LESSOR, THE AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREIN OR THE FAILURE OF THE LEASED PROPERTY, OR ANY PART
THEREOF, TO COMPLY WITH ANY APPLICABLE LAW, except that the Lessor hereby
represents and warrants that the Leased Property is and shall be free of the
Lessor Liens. As between the Lessor and the Lessee, each Lessee has been
afforded full opportunity to inspect the Leased Property, is satisfied with
the results of its inspections of the Leased Property and is entering into
this Lease solely on the basis of the results of its own inspections and all
risks incident to the matters discussed in the two preceding sentences, as
between the Lessor, the Agent or the Lenders on the one hand, and the
Lessee, on the other, are to be borne by the Lessee. The provisions of this
Article IV have been negotiated, and, except to the extent
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5
otherwise expressly stated, the foregoing provisions are intended to be a
complete exclusion and negation of any representations or warranties by the
Lessor, the Agent or the Lenders, express or implied, with respect to the
Leased Property, that may arise pursuant to any law now or hereafter in
effect, or otherwise.
ARTICLE V
LIENS; EASEMENTS; PARTIAL CONVEYANCES
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The Lessee shall not directly or indirectly create, incur or assume,
any Lien on or with respect to the Leased Property, the title thereto, or any
interest therein, including any Liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of the Leased Property or by
reason of labor or materials furnished or claimed to have been furnished to
the Lessee, or any of its contractors or agents or Alterations constructed by
the Lessee, except, in all cases, Permitted Encumbrances.
Notwithstanding the foregoing paragraph, at the request of the
Lessee, the Lessor shall, from time to time during the Lease Term and upon
reasonable advance written notice from the Lessee given in accordance with
Section 8.2 of the Master Agreement and receipt of the materials specified
in the next succeeding sentence, consent to and join in any (i) grant of
easements, licenses, rights of way and other rights in the nature of
easements, including, without limitation, utility easements to facilitate
the Lessee's use, development and construction of the Leased Property,
(ii) release or termination of easements, licenses, rights of way or other
rights in the nature of easements which are for the benefit of the Land or
the Building or any portion thereof, (iii) dedication or transfer of
portions of the Lessor's interest in the Land, not improved with the
Building, for road, highway or other public purposes, (iv) execution of
agreements for ingress and egress and amendments to any covenants and
restrictions affecting the Land or the Building or any portion thereof and
(v) request to any Governmental Authority for platting or subdivision or
replatting or resubdivision approval with respect to the Land or any portion
thereof or any parcel of land of which the Land or any portion thereof forms
a part or a request for rezoning or any variance from zoning or other
governmental requirements. The Lessor's obligations pursuant to the
preceding sentence shall be subject to the requirements that:
(a) any such action shall be at the sole cost and expense of the
Lessee, and the Lessee shall pay all actual and reasonable out-of-pocket
costs of the Lessor, the Agent and the Lenders in connection therewith
(including, without limitation, the reasonable fees of attorneys,
architects, engineers, planners, appraisers and other professionals
reasonably retained by the Lessor, the Agent or any Lender in connection
with any such action, and, when practicable, the Lessor will endeavor to
utilize the services of the same architect(s), engineer(s), planner(s) and
appraiser(s) used by the Agent and the Lenders, in connection with the
review of such requests),
(b) the requesting Lessee shall have delivered to the Lessor and
the Agent a certificate of a Responsible Officer of the Lessee stating that:
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(i) such action will not cause the Leased Property, the
Land or the Building or any portion thereof to fail to comply in any
material respect with the provisions of this Lease or any other Operative
Documents, or in any material respect with Applicable Laws; and
(ii) such action will not materially reduce the Fair Market
Sales Value, utility or useful life of the Leased Property, the Land or the
Building nor the Lessor's interest therein; and
(c) in the case of any release or conveyance, if the Lessor, the
Agent or any Lender so reasonably requests, the Lessee will cause to be
issued and delivered to the Lessor and the Agent by the Title Insurance
Company an endorsement to the Title Policy pursuant to which the Title
Insurance Company agrees that its liability for the payment of any loss or
damage under the terms and provisions of the Title Policy will not be
affected by reason of the fact that a portion of the real property referred
to in Schedule A of the Title Policy has been released or conveyed by the
Lessor.
ARTICLE VI
MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS
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Section 6.1 Maintenance and Repair; Compliance With Law. The
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Lessee, at its own expense, shall at all times (a) maintain the Leased
Property leased by it in good repair and condition (subject to ordinary wear
and tear), in accordance with prudent industry standards and, in any event,
in the same manner as other similar property owned or leased by the Lessee
or its Affiliates, (b) make all Alterations in accordance with, and maintain
(whether or not such maintenance requires structural modifications or
Alterations) and operate and otherwise keep the Leased Property in
compliance in all material respects with, all Applicable Laws and
requirements of the Lessee's underwriters, and (c) make all material
repairs, replacements and renewals of the Leased Property or any part
thereof which may be required to keep the Leased Property in the condition
required by the preceding clauses (a) and (b). The Lessee shall perform the
foregoing maintenance obligations regardless of whether the Leased Property
is occupied or unoccupied. The Lessee waives any right that it may now have
or hereafter acquire to (i) require the Lessor, the Agent or any Lender to
maintain, repair, replace, alter, remove or rebuild all or any part of the
Leased Property or (ii) make repairs at the expense of the Lessor, the Agent
or any Lender pursuant to any Applicable Law or other agreements or
otherwise. NEITHER THE LESSOR, THE AGENT NOR ANY LENDER SHALL BE LIABLE TO
THE LESSEE OR TO ANY CONTRACTORS, SUBCONTRACTORS, LABORERS, MATERIALMEN,
SUPPLIERS OR VENDORS FOR SERVICES PERFORMED OR MATERIAL PROVIDED ON OR IN
CONNECTION WITH THE LEASED PROPERTY OR ANY PART THEREOF. Neither the Lessor,
the Agent nor any Lender shall be required to maintain, alter, repair,
rebuild or replace the Leased Property in any way.
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Section 6.2 Improvements and Alterations.
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(a) In addition to the Lessee's obligations as Construction Agent
under the Construction Agency Agreement, on and after the completion of
Construction (i) the Lessee, at the Lessee's sole cost and expense, shall
make alterations, renovations, improvements and additions to the Leased
Property or any part thereof and substitutions and replacements therefor
(collectively, "Alterations") which are (A) necessary to repair or maintain
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the Leased Property in the condition required by this Lease and the other
Operative Documents; (B) necessary in order for the Leased Property to be in
compliance with Applicable Laws; or (C) necessary to restore the Leased
Property in all material respects to its condition existing prior to a
Casualty or Condemnation to the extent required pursuant to Article X; and
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(ii) so long as no Potential Event of Default or Event of Default has
occurred, the Lessee, at the Lessee's sole cost and expense, may undertake
Alterations to the Leased Property so long as such Alterations comply with
Applicable Laws and with Section 6.1 and subsection (b) of this Section 6.2.
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(b) The making of any Alterations must be in compliance with the
following requirements:
(i) No Structural Alterations or Alterations with a cost
exceeding Two Hundred Fifty Thousand Dollars ($250,000) shall be made or
undertaken without the prior written consent of the Lessor and the Agent
(which consent shall not be unreasonably withheld or delayed), except for
Alterations required by Applicable Laws (provided that except in the case of
an emergency, the Lessee shall give the Lessor and the Agent at least thirty
(30) days prior written notice of such Alterations). If the Lessee
reasonably expects the cost of any Alterations to exceed $250,000, the
Lessee shall deliver to the Lessor and the Agent a brief written narrative
of the work to be performed prior to undertaking any such Alteration.
(ii) No Alterations shall be undertaken in violation of the
terms of any restriction, easement, condition, covenant or other similar
agreement (including, without limitation, the Ground Lease) affecting title
to or binding on the Leased Property. The Lessee shall procure when required
and pay for, so far as the same may be required from time to time, all
permits and authorizations with regard to such Alterations from all
Governmental Authorities having jurisdiction. The Lessor, at the Lessee's
expense, and without any liability on the part of the Lessor, shall join in
the application for any such permit or authorization and execute and deliver
any document in connection therewith, whenever such joinder is necessary or
advisable.
(iii) The Alterations shall be completed in a good and
workmanlike manner and in compliance with all Applicable Laws then in effect
and the standards imposed by any insurance policies required to be
maintained hereunder or by any vendor, supplier or manufacturer in order to
maintain all warranties, and all Alterations must be located solely on the
Land or other property used in connection with the Leased Property as to
which the Lessor has an easement, license, lease, sublease or other right or
interest in real property reasonably satisfactory to Agent for a term not
less than the useful life of such Alterations.
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(iv) All Alterations shall, when completed, be of such a
character as to not adversely affect the Fair Market Sales Value, utility,
remaining economic useful life or residual value of the Leased Property from
the Fair Market Sales Value, utility, remaining economic useful life or
residual value thereof immediately prior to the making thereof or, in the
case of Alterations being made by virtue of a Casualty or Condemnation,
immediately prior to the occurrence of such Casualty or Condemnation. If
such Modifications have a cost exceeding Two Hundred Fifty Thousand Dollars
($250,000), the Lessor or the Agent may obtain a report from an independent
engineer or engage an appraiser of nationally recognized standing, at the
Lessee's sole cost and expense, to determine (by appraisal or other methods
satisfactory to the Agent) the projected Fair Market Sales Value of such
item of Leased Property as of the completion of the Alterations relating
thereto.
(v) The Lessee shall have made adequate arrangements for
payment of the cost of all Alterations when due so that the Leased Property
shall at all times be free of Liens for labor and materials supplied or
claimed to have been supplied to the Leased Property, other than Permitted
Liens.
Section 6.3 Title to Alterations. Title to the following described
--------------------
Alterations shall, without further act, vest in the Lessor and shall be
deemed to constitute a part of the Leased Property and be subject to this
Lease:
(a) Alterations that are in replacement of or in substitution
for a portion of any item of Leased Property;
(b) Alterations that are required to be made pursuant to the
terms of Section 6.2(a)(i) hereof; or
-----------------
(c) Alterations that, notwithstanding any repairs, replacements
or modifications by or on behalf of Lessee, are nonseverable or that cannot
be removed without damaging the Leased Property or any part thereof.
The Lessee, at the Lessor's reasonable request, shall
execute and deliver any deeds, bills of sale, assignments or other documents
of conveyance reasonably necessary to evidence the vesting of title in and
to such Alterations to the Lessor.
If such Alterations are not within any of the categories set
forth in clauses (a) through (c) of this Section 6.3, then title to such
----------- --- -----------
Alterations shall vest in the Lessee and such Alterations shall not be
deemed to be Alterations that are part of the Leased Property.
All Alterations to which the Lessee shall have title may be removed
at any time by the Lessee, so long as removal thereof shall not result in
the violation of any Applicable Laws or give rise to a Potential Event of
Default or an Event of Default, and no Potential Event of Default or Event
of Default then exists. The Lessee agrees to notify Lessor in writing at
least 30 days before it removes any such Alterations which individually or
in the aggregate had an original
9
cost exceeding Two Hundred Fifty Thousand Dollars ($250,000), and the Lessee
shall at its expense repair any damage to any item of Leased Property caused
by the removal of such Alterations. The Lessor (or the purchaser of the
Leased Property) may purchase from the Lessee any such Alterations (if not
already owned by the Lessor) that the Lessee intends to remove from the
Leased Property prior to the return of the Leased Property to the Lessor or
sale of the Leased Property, which purchase shall be at the Fair Market
Sales Value of such Alterations as determined by the Appraiser at the time
of such purchase. Title to any such Alterations shall vest in the Lessor (or
the purchaser of the applicable Leased Property) if not removed from the
Leased Property by the Lessee prior to the return of the Leased Property to
the Lessor or sale of the Leased Property. Severable Alterations, title to
which is vested in the Lessee, shall be made available to the Lessor or its
designee without cost during the Lease Term and thereafter if the Leased
Property is sold pursuant to the Remarketing Option and the use thereof is
necessary or useful for the operation of the Leased Property in the manner
and capacity operated at or prior to the expiration of the Lease Term.
Section 6.4 Lessee's Personal Property. During the Lease Term,
--------------------------
the Lessee may from time to time own or hold under lease or other arrangement
from Persons other than the Lessor the Lessee's Personal Property that is
not subject to this Lease and does not constitute a portion of the Leased
Property. The Lessor shall from time to time during the Lease Term, upon the
reasonable request, and at the cost and expense of the Lessee, acknowledge
in writing to the Lessee or other Persons that the Lessee's Personal
Property is the property of the Lessee or such other Person and is not part
of the Leased Property and that the Lessor has waived any present or future
landlord's or other ▇▇▇▇ ▇▇▇▇▇▇ may have thereon.
ARTICLE VII
USE
---
The Lessee may use the Leased Property leased by it or any part
thereof for any lawful purpose, and in a manner consistent with the
standards applicable to properties of a similar nature in the geographic
area in which the Leased Property is located, provided that such use does
--------
not materially adversely affect the Fair Market Sales Value, utility,
remaining useful life or residual value of the Leased Property, and does not
materially violate or conflict with, or constitute or result in a material
default under, any Applicable Law or any insurance policy required
hereunder. The Lessee shall not commit or permit any waste of the Leased
Property or any material part thereof.
ARTICLE VIII
INSURANCE
---------
(a) At any time during which any part of the Building or any
Alteration is under construction and as to any part of the Building or any
Alteration under construction, the Lessee
10
shall maintain, or cause to be maintained, at its sole cost and expense, as
a part of its blanket policies or otherwise, "all risk" non-reporting
completed value form of builder's risk insurance.
(b) During the Lease Term, the Lessee shall maintain, at its sole
cost and expense, as a part of its blanket policies or otherwise, insurance
against loss or damage to the Building by fire and other risks, including
comprehensive boiler and machinery coverage, on terms and in amounts no less
favorable than insurance covering other similar properties owned or leased
by the Lessee and that are in accordance with prudent industry practice, but
in no event less than the replacement cost of the Building from time to
time.
(c) During the Lease Term, the Lessee shall maintain, at its sole
cost and expense, commercial general liability insurance with respect to the
Leased Property, as is ordinarily procured by prudent Persons who own or
operate similar properties in the same geographic area. Such insurance shall
be on terms and in amounts that are no less favorable than insurance
maintained by the Lessee or its Affiliates with respect to similar
properties that it owns or leases and that are in accordance with prudent
industry practice. Such insurance policies shall also provide that the
Lessee's insurance shall be considered primary insurance. Nothing in this
Article VIII shall prohibit the Lessor, the Agent or any Lender from
------------
carrying at its own expense other insurance on or with respect to the Leased
Property, provided that any insurance carried by the Lessor, the Agent or
--------
any Lender shall not prevent the Lessee from carrying the insurance required
hereby.
(d) Each policy of insurance maintained by the Lessee pursuant to
clauses (a) and (b) of this Article VIII shall provide that all insurance
----------- --- ------------
proceeds in respect of any loss or occurrence shall be adjusted by the
Lessee, except if, and for so long as an Event of Default exists, all losses
shall be adjusted solely by, and all insurance proceeds shall be paid solely
to, the Agent (or the Lessor if the Loans have been fully paid) for
application pursuant to this Lease.
(e) On the Closing Date, on the Completion Date for the Leased
Property and on each anniversary of the Closing Date, the Lessee shall
furnish the Lessor with certificates showing the insurance required under
this Article VIII to be in effect and naming the Lessor, the Agent and the
------------
Lenders as additional insureds. Such certificates shall include a provision
for thirty (30) days' advance written notice by the insurer to the Lessor
and the Agent in the event of cancellation or expiration or nonpayment of
premium with respect to such insurance, and shall include a customary breach
of warranty clause. The Lessee shall provide evidence to the Lessor and the
Agent that each insurance policy required by this Article VIII has been
------------
renewed or replaced prior to the scheduled expiration date therefor.
(f) Each policy of insurance maintained by the Lessee pursuant to
this Article VIII shall (i) contain the waiver of any right of subrogation
------------
of the insurer against the Lessor, the Agent and the Lenders, and (ii)
provide that in respect of the interests of the Lessor, the Agent and the
Lenders, such policies shall not be invalidated by any fraud, action,
inaction or misrepresentation of the Lessee or any other Person acting on
behalf of the Lessee.
11
(g) All insurance policies carried in accordance with this
Article VIII shall be maintained with insurers rated at least "A" by A.M.
------------
Best & Company, and in all cases the insurer shall be qualified to insure
risks in the State where the Leased Property is located.
ARTICLE IX
ASSIGNMENT AND SUBLEASING
-------------------------
The Lessee may not assign any of its right, title or interest in,
to or under this Lease, except as set forth in the following sentence. The
Lessee may assign its right under this Lease or sublease all or any portion
of the Leased Property, provided that (a) all obligations of the Lessee
--------
shall continue in full effect as obligations of a principal and not of a
guarantor or surety, as though no assignment or sublease had been made; (b)
such assignment or sublease shall be expressly subject and subordinate to
this Lease, the Loan Agreement and the other Operative Documents; and (c)
each such assignment or sublease shall terminate on or before the Lease
Termination Date. The Lessee shall give the Agent and the Lessor prompt
written notice of any such assignment or sublease.
Except pursuant to an Operative Document, this Lease shall not be
mortgaged or pledged by the Lessee, nor shall the Lessee mortgage or pledge
any interest in the Leased Property or any portion thereof. Any such
mortgage or pledge shall be void.
ARTICLE X
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
-----------------------------------------
Section 10.1 Event of Loss. Any event (i) which would otherwise
-------------
constitute a Casualty during the Base Term, and (ii) which, in the good
faith judgment of the Lessee, renders repair and restoration of the Leased
Property impossible or impractical, or requires repairs to the Leased
Property that would cost in excess of fifty percent (50%) of the original
cost of the Leased Property, and (iii) as to which the Lessee, within sixty
(60) days after the occurrence of such event, delivers to the Lessor an
Officer's Certificate notifying the Lessor of such event and of such
judgment, shall constitute an "Event of Loss". In the case of any other
-------------
event which constitutes a Casualty, the Lessee shall restore the Leased
Property pursuant to Section 10.3. If an Event of Loss other than an Event
------------
of Taking shall occur, the Lessee shall pay to the Lessor on the later of
(i) the thirtieth day (30th) and (ii) the next Payment Date following
delivery of the Officer's Certificate pursuant to clause (iii) above an
amount equal to the Lease Balance. Upon the Lessor's receipt of the Lease
Balance on such date, the Lessor shall cause the Lessor's interest in the
Leased Property to be conveyed to the Lessee in accordance with and subject
to the provisions of Section 14.5 hereof; upon completion of such purchase,
------------
but not prior thereto, this Lease with respect to the Leased Property and
all obligations hereunder with respect to the Leased Property shall
terminate, except with respect to obligations and liabilities hereunder,
actual or contingent, that have arisen or relate to events occurring on or
prior to such date of purchase, or which are expressly stated herein to
survive termination of this Lease.
12
Upon the consummation of the purchase of the Leased Property
pursuant to this Section 10.1, any proceeds derived from insurance required
------------
to be maintained by the Lessee pursuant to this Lease for the Leased
Property remaining after payment of such purchase price shall be paid over
to, or retained by, the Lessee or as it may direct, and the Lessor shall
assign to the Lessee, without warranty, all of the Lessor's rights to and
interest in such insurance required to be maintained by the Lessee pursuant
to this Lease.
Section 10.2 Event of Taking. Any event (i) which constitutes a
---------------
Condemnation of all of, or substantially all of, the Leased Property, or
(ii) (A) which would otherwise constitute a Condemnation, (B) which, in the
good faith judgment of the Lessee, renders restoration and rebuilding of the
Leased Property impossible or impractical, or requires repairs to the Leased
Property that would cost in excess of fifty percent (50%) of the original
cost of the Leased Property, and (C) as to which the Lessee, within sixty
(60) days after the occurrence of such event, delivers to the Lessor an
Officer's Certificate notifying the Lessor of such event and of such
judgment, shall constitute an "Event of Taking". In the case of any other
---------------
event which constitutes a Condemnation, the Lessee shall restore and rebuild
the Leased Property pursuant to Section 10.4. If an Event of Taking shall
------------
occur, the Lessee shall pay to the Lessor (1) on the later of (A) the
thirtieth (30th) day and (B) the next Payment Date following the occurrence
of such Event of Taking, in the case of an Event of Taking described in
clause (i) above, or (2) on the later of (A) the thirtieth (30th) day and
(B) the next Payment Date following delivery of the Officer's Certificate
pursuant to clause (ii) above, in the case of an Event of Taking described
in clause (ii) above, an amount equal to the Lease Balance. Upon the
Lessor's receipt of the Lease Balance on such date, the Lessor shall cause
the Lessor's interest in the Leased Property to be conveyed to the Lessee in
accordance with and subject to the provisions of Section 14.5 hereof
------------
(provided that such conveyance shall be subject to all rights of the
condemning authority); upon completion of such purchase, but not prior
thereto, this Lease with respect to the Leased Property and all obligations
hereunder with respect to the Leased Property shall terminate, except with
respect to obligations and liabilities hereunder, actual or contingent, that
have arisen or relate to events occurring on or prior to such date of
purchase, or which are expressly stated herein to survive termination of
this Lease.
Upon the consummation of the purchase of the Leased Property
pursuant to this Section 10.2, all Awards received by the Lessor, after
------------
deducting any reasonable costs incurred by the Lessor in collecting such
Awards, received or payable on account of an Event of Taking with respect to
the Leased Property during the Lease Term shall be paid to the Lessee, and
all rights of the Lessor in Awards not then received shall be assigned to the
Lessee by the Lessor.
Section 10.3 Casualty. If a Casualty shall occur which is not an
--------
Event of Loss, the Lessee shall rebuild and restore the Leased Property in
accordance with the terms of this Lease and the other Operative Documents,
will complete the same prior to the Lease Termination Date, and will cause
the condition set forth in Section 3.5(c) of the Master Agreement to be
fulfilled with respect to such restoration and rebuilding prior to the Lease
Termination Date, regardless of whether insurance proceeds received as a
result of such Casualty are sufficient for such purpose.
13
Section 10.4 Condemnation. If a Condemnation shall occur which is
------------
not an Event of Taking, the Lessee shall rebuild and restore the Leased
Property in accordance with the terms of this Lease and the other Operative
Documents, will complete the same prior to the Lease Termination Date, and
will cause the condition set forth in Section 3.5(c) of the Master Agreement
to be fulfilled with respect to such restoration and rebuilding prior to the
Lease Termination Date.
Section 10.5 Verification of Restoration and Rebuilding. In the
------------------------------------------
event of Casualty or Condemnation, to verify the Lessee's compliance with
the foregoing Section 10.3 or 10.4, as appropriate, the Lessor, the Agent,
------------ ----
the Lenders and their respective authorized representatives may, upon five
(5) Business Days' notice to the Lessee, make inspections of the Leased
Property with respect to (i) the extent of the Casualty or Condemnation and
(ii) the restoration and rebuilding of the Building and the Land. All actual
and reasonable out-of-pocket costs of such inspections incurred by the
Lessor, the Agent or any Lender will be paid by the Lessee promptly after
written request. No such inspection shall unreasonably interfere with the
Lessee's operations or the operations of any other occupant of the Leased
Property. None of the inspecting parties shall have any duty to make any
such inspection or inquiry and none of the inspecting parties shall incur
any liability or obligation by reason of making or not making any such
inspection or inquiry.
Section 10.6 Application of Payments. All proceeds (except for
-----------------------
payments under insurance policies maintained other than pursuant to
Article VIII of this Lease) received at any time by the Lessor, the Lessee
------------
or the Agent from any Governmental Authority or other Person with respect to
any Condemnation or Casualty to the Leased Property or any part thereof or
with respect to an Event of Loss or an Event of Taking, plus the amount of
any payment that would have been due from an insurer but for the Lessee's
self-insurance or deductibles ("Loss Proceeds"), shall (except to the extent
-------------
Section 10.9 applies) be applied as follows:
------------
(a) In the event the Lessee purchases the Leased Property pursuant
to Section 10.1 or Section 10.2, such Loss Proceeds shall be applied as set
------------ ------------
forth in Section 10.1 or Section 10.2, as the case may be;
------------ ------------
(b) In the event of a Casualty at such time when no Potential Event
of Default or Event of Default has occurred and the Lessee is obligated to
repair and rebuild the Leased Property pursuant to Section 10.3, the Lessee
------------
may, in good faith and subsequent to the date of such Casualty, certify to
the Lessor, the Lenders and the Agent and to the applicable insurer that no
Potential Event of Default or Event of Default has occurred, in which event
the applicable insurer shall pay the Loss Proceeds to the Lessee, unless the
estimated cost of restoration exceeds the lesser of $250,000 and fifty
percent (50%) of the original cost of the Leased Property in which case the
Loss Proceeds shall be paid to the Agent (or the Lessor if the Loans have
been paid in full), and shall be promptly released to the Lessee upon
certification by the Lessee to the Lessor and the Agent that the Lessee has
incurred costs in the amount requested to be released for the repair and
rebuilding of the Leased Property and satisfaction of such other
requirements
14
as may be reasonably requested by the Lessor and the Agent (including,
without limitation, satisfaction of conditions to release of such funds to
the Lessee comparable to the conditions precedent to Advances under the
Operative Documents);
(c) In the event of a Condemnation at such time when no
Potential Event of Default or Event of Default has occurred and the Lessee
is obligated to repair and rebuild the Leased Property pursuant to
Section 10.4, the Lessee may, in good faith and subsequent to the date of such
------------
Condemnation, certify to the Lessor and the Agent that no Potential Event of
Default or Event of Default has occurred and shall satisfy such other
requirements as may be reasonably requested by the Lessor or the Agent, in
which event the applicable Award shall be paid over to the Lessee provided
that, if such Award exceeds the lesser of $250,000 and fifty percent (50%)
of the original cost of the Leased Property, such Award shall be paid to the
Agent (or the Lessor if the Loans have been paid in full), and shall be
promptly released to the Lessee upon receipt by the Lessor and the Agent of
a certification as described above and satisfaction of such other
requirements as may reasonably be requested by the Lessor and the Agent
(including, without limitation, satisfaction of conditions to release of
such funds to the Lessee comparable to the conditions precedent to Advances
under the Operative Documents); and
(d) As provided in Section 10.8, if such section is applicable.
------------
During any period of repair or rebuilding pursuant to this
Article X, this Lease will remain in full force and effect and Basic Rent
---------
shall continue to accrue and be payable without abatement or reduction. The
Lessee shall maintain records setting forth information relating to the
receipt and application of payments in accordance with this Section 10.6.
------------
Such records shall be kept on file by the Lessee at its offices and shall be
made available to the Lessor, the Lenders and the Agent upon request.
Section 10.7 Prosecution of Awards.
---------------------
(a) If any Condemnation shall occur, the party receiving the
notice of such Condemnation shall give to the other party and the Agent
promptly, but in any event within thirty (30) days after the occurrence
thereof, written notice of such occurrence and the date thereof, generally
describing the nature and extent of such Condemnation. With respect to any
Event of Taking or any Condemnation, the Lessee shall control the
negotiations with the relevant Governmental Authority as to any proceeding
in respect of which Awards are required, under Section 10.6, to be assigned
------------
or released to the Lessee, unless a Potential Event of Default or Event of
Default shall have occurred, in which case (i) the Agent (or the Lessor if
the Loans have been fully paid) shall control such negotiations; and (ii)
the Lessee hereby irrevocably assigns, transfers and sets over to the Agent
(or the Lessor if the loans have been fully paid) all rights of the Lessee
to any Award on account of any Event of Taking or any Condemnation and, if
there will not be separate Awards to the Lessor and the Lessee on account of
such Event of Taking or Condemnation, irrevocably authorizes and empowers
the Agent (or the Lessor if the Loans have been fully paid), with full power
of substitution, in the name of the Lessee or otherwise (but without
limiting the obligations of the Lessee under this Article X), to file and
---------
prosecute what
15
would otherwise be the Lessee's claim for any such Award and to collect,
receipt for and retain the same. In any event the Lessor and the Agent may
participate in such negotiations, and no settlement will be made without the
prior consent of the Agent (or the Lessor if the Loans have been fully
paid), not to be unreasonably withheld.
(b) Notwithstanding the foregoing, the Lessee may prosecute, and
the Lessor shall have no interest in, any claim with respect to the Lessee's
personal property and equipment not financed by or otherwise property of the
Lessor, business interruption or similar award and the Lessee's relocation
expenses.
Section 10.8 Application of Certain Payments Not Relating to an
--------------------------------------------------
Event of Taking. In case of a requisition for temporary use of all or a
---------------
portion of the Leased Property which is not an Event of Taking, this Lease
shall remain in full force and effect with respect to the Leased Property,
without any abatement or reduction of Basic Rent, and the Awards for the
Leased Property shall, unless a Potential Event of Default or Event of
Default has occurred, be paid to the Lessee.
Section 10.9 Other Dispositions. Notwithstanding the foregoing
------------------
provisions of this Article X, if a Potential Event of Default or an Event of
---------
Default shall have occurred, any amount that would otherwise be payable to
or for the account of, or that would otherwise be retained by, the Lessee
pursuant to this Article X shall be paid to the Agent (or the Lessor if the
---------
Loans have been fully paid) as security for the obligations of the Lessee
under this Lease and, at such time thereafter as no Potential Event of
Default or Event of Default shall be continuing, such amount shall be paid
promptly to the Lessee to the extent not previously applied by the Lessor or
the Agent in accordance with the terms of this Lease or the other Operative
Documents.
Section 10.10 No Rent Abatement. Rent shall not ▇▇▇▇▇ hereunder by
-----------------
reason of any Casualty, any Event of Loss, any Event of Taking or any
Condemnation of the Leased Property, and the Lessee shall continue to
perform and fulfill all of the Lessee's obligations, covenants and
agreements hereunder notwithstanding such Casualty, Event of Loss, Event of
Taking or Condemnation until the Lease Termination Date.
ARTICLE XI
INTEREST CONVEYED TO LESSEE
---------------------------
The Lessee and the Lessor intend that this Lease be treated, for
accounting purposes, as an operating lease. For all other purposes, the
Lessee and the Lessor intend that the transaction represented by this Lease
be treated as a financing transaction, and for such purposes, it is the
intention of the parties hereto (i) that this Lease be treated as a
mortgage, security deed or deed of trust (whichever is applicable in the
jurisdiction in which the Leased Property is located) and security
agreement, encumbering the Leased Property, and that the Lessee, as grantor,
hereby grants to the Lessor, as mortgagee or beneficiary and secured party,
or any successor thereto, a first and paramount Lien on the Leased Property
in which the Lessee has an interest, (ii) that the
16
Lessor shall have, as a result of such determination, all of the rights,
powers and remedies of a mortgagee, deed of trust beneficiary or secured
party available under Applicable Law to take possession of and sell (whether
by foreclosure or otherwise) the Leased Property, (iii) that the effective
date of such mortgage, security deed or deed of trust shall be the effective
date of this Lease, or the Lease Supplement, if later, (iv) that the
recording of this Lease or the Lease Supplement shall be deemed to be the
recording of such mortgage, security deed or deed of trust, and (v) that the
obligations secured by such mortgage, security deed or deed of trust shall
include the Funded Amount and all Basic Rent and Supplemental Rent hereunder
and all other obligations of and amounts due from the Lessee hereunder and
under the Operative Documents.
ARTICLE XII
EVENTS OF DEFAULT
-----------------
Each of the following events shall constitute an Event of Default
(whether any such event shall be voluntary or involuntary or come about or
be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of
any Governmental Authority):
(a) The Lessee shall fail to make any payment of Basic Rent when
due; or
(b) (i) The Lessee shall fail to make any payment of Rent (other
than Basic Rent and other than as set forth in clause (c) or any other
----------
amount payable hereunder or under any of the other Operative Documents
(other than Basic Rent and other than as set forth in clause (c)), and such
-----------
failure shall continue for a period of five (5) days after the same becomes
due; or (ii) the Lessee shall fail to pay the Funded Amount or Lease Balance
when due pursuant to Sections 10.1, 10.2, 14.1 or 14.2, or the Lessee shall
------------- ---- ---- ----
fail to pay the Recourse Deficiency Amount when required pursuant to
Article XIV or the Construction Agent shall fail to make any payment when
-----------
due under the Construction Agency Agreement; or
(c) The Lessee or JFC or any of their Subsidiaries fails to
perform or observe any term, covenant or agreement contained in
Section 5.1(p)(vii), (xi), (xii), (xv) or (xvi) or in Section 5.2 of
the Master Agreement; or
(d) The Lessee shall fail to maintain insurance as required by
Article VIII hereof, and such failure shall continue until the earlier of
------------
(i) fifteen (15) days after written notice thereof from the Lessor and (ii)
the day immediately preceding the date on which any applicable insurance
coverage would otherwise lapse or terminate; or
(e) The Lessee, JFC or any of their Subsidiaries shall default
in the due and punctual performance of or compliance with any covenant,
condition or agreement to be performed or observed by it under any provision
of Sections 5.1(g), (h), (j), (k) or (m), inclusive, of the Master Agreement
or shall use the proceeds of the Fundings for a purpose other than as stated
in Section 5.1(u) of the Master Agreement, and any such failure or use shall
continue unremedied for five
17
(5) days following the date on which such covenant, condition or agreement
shall have been required to be performed or observed, or such use of
proceeds shall have varied from that stated in Section 5.1(u) of the Master
Agreement; or
(f) The Lessee, JFC or any of their Subsidiaries shall default
in the due and punctual performance of or compliance with any covenant,
condition or agreement to be performed or observed by it under any provision
of Sections 5.1(c)-(f), inclusive, 5.1(i) or 5.1(n) of the Master Agreement
and any such failure shall continue unremedied for ten (10) days following
the date on which such covenant, condition or agreement shall have been
required to be performed or observed; or
(g) The Lessee, JFC or any of their Subsidiaries shall default
in the due and punctual performance of or compliance with any covenant,
condition or agreement to be performed or observed by it under any other
provision of this Lease or any of the other Operative Documents and any such
failure shall continue unremedied for thirty (30) days after the earlier of
(x) the date upon which any senior officer of the Lessee or JFC knew or
reasonably should have known of such default or (y) the date on which such
covenant, condition or agreement shall have been required to be performed or
observed; or
(h) Any representation or warranty of the Lessee or JFC made in
any of the Operative Documents or in any certificate, document or financial
or other statement or in connection with the Transaction or pursuant to the
Operative Documents shall have been false or inaccurate in any material
respect on the date as of which made or deemed made; or
(i) The Lessee, JFC, or any of their Subsidiaries (A) shall fail
to make when due or payable any payment required to be made by it in respect
of (x) any Indebtedness for Money Borrowed (other than pursuant to the
Operative Documents) whether or not subject to a Subordination Agreement, or
(y) any Indebtedness other than Indebtedness for Money Borrowed, whether or
not subject to a Subordination Agreement, if such failure extends beyond the
applicable grace period (if any) specified in the relevant document on the
date of such failure or (B) shall fail duly and punctually to perform or
observe any other covenant, condition, or agreement contained in, or any
other event shall occur or condition shall exist under, any evidence of
Indebtedness, or any agreement securing or relating to any Indebtedness, and
the effect of such failure is (x) to cause, or permit the holder of such
Indebtedness or a trustee to cause, such Indebtedness to become due or to be
required to be repurchased, prior to its scheduled maturity or such
Indebtedness to become payable or cash collateral in respect thereof to be
demanded or (y) to permit the holder of such Indebtedness or a trustee to
elect any Person to the Board of Directors of any Subsidiary; provided, that
--------
any Event of Default arising under clause (B) in respect of Indebtedness
----------
shall be determined without regard to any amendment to or waiver of any
provision of the document or instrument evidencing such indebtedness or any
related document or instrument entered into by the parties thereto in
anticipation of, concurrent with or subsequent to the occurrence of any such
event or circumstance, including, without limitation, the occurrence of any
event or condition that (x) results in any such Indebtedness
18
becoming due prior to its scheduled maturity or (y) enables or permits the
lenders under such Indebtedness (as amended, modified, supplemented or
replaced from time to time), or any agent on their behalf, to cause the
loans thereunder to become due or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; or
(j) A default shall occur under the provisions of any preferred
stock (or any agreement relating thereto) of any Subsidiary, and the effect
of the same shall be (i) to require, or permit the holders thereof to
require, the issuer thereof to redeem the same prior to any mandatory
redemption date or (ii) to permit the holders thereof to elect any Person to
the Board of Directors of such Subsidiary; or
(k) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate shall be rendered against the Lessee,
JFC and any Subsidiary (or any one or more of such Persons) and shall remain
in force undischarged and unstayed for a period of more than the longer of
(x) 60 days or (y) the shorter of (i) the period provided for requesting a
stay of such judgment or (ii) the period provided for filing an appeal from
such judgment, both as established for the jurisdiction in which such
judgment was rendered and without regard for any extension or renewal
periods applicable to either thereof; or
(l) The Lessee, JFC or any of their Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or any substantial part of its
assets, or the Lessee, JFC or any of their Subsidiaries shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Lessee, JFC or any of their Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which
----------
(A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of sixty (60) days; or (iii) there shall be commenced against the
Lessee, JFC or any of their Subsidiaries any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which
results in the entry of an order for any such relief which shall not have
been vacated, discharged, or stayed or bonded pending appeal within sixty
(60) days from the entry thereof; or (iv) the Lessee, JFC or any of their
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Lessee, JFC or any of their
---------- ---- -----
Subsidiaries shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due or there shall be
any receivership, insolvency, or liquidation pursuant to SIPA; or
19
(m) (i) An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Lessee, JFC or any ERISA Affiliate under Title IV
of ERISA to such Pension Plan or Multiemployer Plan or to the PBGC in an
aggregate amount for all such Pension Plans and Multiemployer Plans in
excess of $500,000, less any outstanding amounts under clauses (ii) and
(iii); (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans and Multiemployer Plans at any time exceeds $500,000, less any
outstanding amounts under clauses (i) and (iii) (determined, in respect of
Multiemployer Plans, by reference to the Unfunded Pension Liability for
which the Lessee, JFC or any ERISA Affiliate may be liable); or (iii) the
Lessee, JFC or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $500,000, less any
outstanding amounts under clauses (i) and (ii); or
(n) Intentionally Omitted.
(o) The Guarantor fails in any material respect to perform or
observe any term, covenant or agreement in the Guaranty, or the Guaranty is
for any reason partially (including with respect to future advances) or
wholly revoked or invalidated, or otherwise ceases to be in full force and
effect, or the Guarantor or any other Person contests in any manner the
validity or enforceability thereof or denies that it has any further
liability or obligation thereunder; or any event described at subsection (l)
--------------
of this Section occurs with respect to the Guarantor or the Guarantor shall
-------
repudiate or terminate the Guaranty, or the Guaranty shall at any time cease
to be in full force and effect or cease to be the legal, valid and binding
obligation of the Guarantor; or
(p) Any non-monetary judgment, order or decree is entered against
the Lessee or any Subsidiary which does or would reasonably be expected to
have a Material Adverse Effect, and there shall be any period of fifteen
(15) consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(q) There occurs any Change of Control; or
(r) Any Governmental Authority or any Business Association revokes
or fails to renew any material license, permit or franchise of the Lessee,
JFC or any Subsidiary, or the Lessee, JFC or any Subsidiary for any reason
loses any material license, permit or franchise, or the Lessee, JFC or any
Subsidiary suffers the imposition of any restraining order, escrow,
suspension or impound of funds in connection with any proceeding (judicial
or administrative) with respect to any material license, permit or franchise
which, in the case of any restraining order, escrow or impound of funds is
not dismissed or released within thirty (30) days after filing or
imposition; or
(s) The occurrence of a Construction Agency Event of Default; or
20
(t) There shall have been asserted against the Lessee or any of
its Subsidiaries an environmental claim that, in the reasonable judgment of
the Lenders, is reasonably likely to be determined adversely to the Lessee
or any of its Subsidiaries, and the amount thereof (either individually or
in the aggregate) is reasonably likely to have a Material Adverse Effect
(insofar as such amount is payable by the Lessee or any of its Subsidiaries
but after deducting any portion thereof that is reasonably expected to be
paid by other creditworthy Persons jointly and severally liable therefor);
or
(u) The Lessee, JFC or the Lessee's General Partner shall be
terminated, dissolved or liquidated (as a matter of law or otherwise) or
proceedings shall be commenced by any Person (including the Lessee, JFC or
the Lessee's General Partner) seeking the termination, dissolution or
liquidation of the Lessee, JFC or the Lessee's General Partner, as the case
may be, and such proceedings are not dismissed within twenty (20) days after
filing; or
(v) The Liens created by the Operative Documents shall at any
time not constitute a valid and perfected Lien on the collateral intended to
be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Agent, free and clear of all other Liens (other than Permitted Liens), or,
except for expiration in accordance with its terms, any of the Operative
Documents shall for whatever reason be terminated or cease to be in full
force and effect, or the enforceability thereof shall be contested by the
Lessee or any other obligor; or
(w) A court or other Governmental Authority or agency or Business
Association having jurisdiction shall enter a decree or order approving or
acknowledging as properly filed or commenced against the Lessee or any
Subsidiary a petition or proceedings for liquidation pursuant to SIPA or
otherwise, rehabilitation, readjustment or composition (or for any related
or similar purpose) under any law (other than the Bankruptcy Code) relating
to financially distressed debtors, their creditors or property, and any such
decree or order shall remain in force undischarged and unstayed for a period
of more than 30 days; or
(x) The Lessee, JFC or any of their Subsidiaries shall take
corporate action for the purpose or with the effect of authorizing,
acknowledging or confirming the taking or existence of any action or
condition specified in paragraph (l) above; or
(y) The Lessee shall fail to file any report or information
required pursuant to SIPA, or shall fail to pay when due all or any part of
an assessment made upon the Lessee pursuant to SIPA, and such failure shall
not have been cured, by the filing of such report or information or by the
making of such payment, together with interest thereon, within five days
after receipt by the Lessee, of written notice of such failure given by or
on behalf of SIPC pursuant to Section 10(a) of SIPA; or
(z) The making of an application by SIPC for a decree adjudicating
that customers of the Lessee are in need of protection under SIPA and the
failure of the Lessee to obtain the dismissal of such application within 30
days;
21
(aa) Aggregate Indebtedness of the Lessee shall exceed 1500% of its
Net Capital or, if the Lessee has elected to operate under paragraph
(a)(1)(ii) of Rule 15c3-1, its Net Capital computed in accordance therewith
shall be less than 2% of its aggregate debit items computed in accordance
with Exhibit A to Rule 15c3-3 or (if registered as a futures commission
merchant) its net capital (as defined in the CEA or the regulations then
existing thereunder) shall be less than 4% of the funds required to be
segregated pursuant to the CEA and the regulations thereunder and the
foreign futures or foreign options secured amounts (less the market value of
commodity options purchased by option customers on or subject to the rules
of a contract market or a foreign Board of Trade, each such deduction not to
exceed the amount of funds in the option customer's account and the foreign
futures or foreign options secured amounts), if greater (or, in either case,
such greater or lesser percentage as may be made applicable to the Lessee by
the self-regulatory or governmental agencies or bodies having appropriate
authority), throughout a period of not less than fifteen (15) consecutive
Business Days, commencing on the date the Lessee first determines and
notifies the Examining Authority or the Examining Authority or the SEC first
determines and notifies the Lessee of such fact; or
(bb) The SEC or any State Securities Commission shall revoke the
broker-dealer registration of the Lessee; or
(cc) The Examining Authority or any Business Association shall
suspend (and not reinstate within 10 days) or revoke the Lessee's membership
as a member of such Examining Authority or any Business Association.
ARTICLE XIII
ENFORCEMENT
-----------
Section 13.1 Remedies. Upon the occurrence and during the
--------
continuance of any Event of Default, the Lessor may do one or more of the
following as the Lessor in its sole discretion shall determine, without
limiting any other right or remedy the Lessor may have on account of such
Event of Default (including, without limitation, the obligation of the
Lessee to purchase the Leased Property as set forth in Section 14.3):
------------
(a) The Lessor may, by notice to the Lessee, rescind or
terminate this Lease as of the date specified in such notice; however, (i)
no reletting, reentry or taking of possession of the Leased Property by the
Lessor will be construed as an election on the Lessor's part to terminate
this Lease unless a written notice of such intention is given to the Lessee,
(ii) notwithstanding any reletting, reentry or taking of possession, the
Lessor may at any time thereafter elect to terminate this Lease for a
continuing Event of Default, and (iii) no act or thing done by the Lessor or
any of its agents, representatives or employees and no agreement accepting a
surrender of the Leased Property shall be valid unless the same be made in
writing and executed by the Lessor;
22
(b) The Lessor may (i) demand that the Lessee, and the Lessee
shall upon the written demand of the Lessor, return the Leased Property
promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Articles VI and XIV
----------- ---
hereof as if the Leased Property were being returned at the end of the Lease
Term, and the Lessor shall not be liable for the reimbursement of the Lessee
for any costs and expenses incurred by the Lessee in connection therewith
and (ii) without prejudice to any other remedy which the Lessor may have for
possession of the Leased Property, and to the extent and in the manner
permitted by Applicable Law, enter upon the Leased Property and take
immediate possession of the Leased Property or any part thereof (to the
exclusion of the Lessee) and expel or remove the Lessee and any other person
who may be occupying the Leased Property, by summary proceedings or
otherwise, all without liability to the Lessee for or by reason of such
entry or taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise and, in addition to the Lessor's
other damages, the Lessee shall be responsible for the actual and reasonable
costs and expenses of reletting, including brokers' fees and the reasonable
costs of any alterations or repairs made by the Lessor;
(c) The Lessor may (i) sell all or any part of the Leased
Property at public or private sale, as the Lessor 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 the Lessor
-----------
shall elect to exercise its rights thereunder) in which event the Lessee's
obligation to pay Basic Rent for the Leased Property hereunder for periods
commencing after the date of such sale shall be terminated or
proportionately reduced, as the case may be; and (ii) if the Lessor shall so
elect, demand that the Lessee pay to the Lessor, and the Lessee shall pay to
the Lessor, on the date of such sale, as liquidated damages for loss of a
bargain and not as a penalty (the parties agreeing that the Lessor's 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 Payment Date
coinciding with such date of sale (or, if the sale date is not a Payment
Date, the Payment Date next preceding the date of such sale)), an amount
equal to (a) the excess, if any, of (1) the sum of (A) all Rent due and
unpaid to and including such Payment Date and (B) the Funded Amount with
respect to the Leased Property, computed as of such date, over (2) the net
proceeds of such sale (that is, after deducting all costs and expenses
incurred by the Lessor, the Agent or any Lender incident to such conveyance
(including, without limitation, all costs, expenses, fees, premiums and
taxes described in Section 14.5); plus (b) interest at the Overdue Rate on
------------ ----
the foregoing amount from such Payment Date until the date of payment;
(d) The Lessor may, at its option, not terminate this Lease, and
continue to collect all Basic Rent, Supplemental Rent, and all other amounts
(including, without limitation, the Funded Amount) due to the Lessor
(together with all costs of collection) and enforce the Lessee's obligations
under this Lease as and when the same become due, or are to be performed,
and, at the option of the Lessor, upon any abandonment of the Leased
Property by the Lessee or re-entry of same by the Lessor, the Lessor may, in
its sole and absolute discretion, elect not to terminate
23
this Lease with respect thereto and may make such reasonable alterations and
necessary repairs in order to relet the Leased Property, and relet the
Leased Property or any part thereof for such term or terms (which may be for
a term extending beyond the term of this Lease) and at such rental or
rentals and upon such other terms and conditions as the Lessor in its
reasonable discretion may deem advisable, and upon each such reletting all
rentals actually received by the Lessor from such reletting shall be applied
to the Lessee's obligations hereunder in such order, proportion and priority
as the Lessor may elect in the Lessor's sole and absolute discretion. If
such rentals received from such reletting during any Rent Period are less
than the Rent to be paid during that Rent Period by the Lessee hereunder,
the Lessee shall pay any deficiency, as calculated by the Lessor, to the
Lessor on the Payment Date for such Rent Period;
(e) If the Leased Property has not been sold, the Lessor may,
whether or not the Lessor shall have exercised or shall thereafter at any
time exercise any of its rights under paragraphs (a), (b), (c) or (d) of
-------------- --- --- ---
this Article XIII with respect to the Leased Property, demand, by written
------------
notice to the Lessee specifying a date (the "Final Rent Payment Date") not
-----------------------
earlier than thirty (30) days after the date of such notice, that the Lessee
purchase, on the Final Rent Payment Date, the Leased Property in accordance
with the provisions of Sections 14.2, 14.4 and 14.5; provided, however, that
------------- ---- ---- -------- -------
(i) such purchase shall occur on the date set forth in such notice,
notwithstanding the provision in Section 14.2 calling for such purchase to
------------
occur on the Lease Termination Date, and (ii) the Lessor's obligations under
Section 14.5(a) shall be limited to delivery of a special warranty deed and
---------------
quit claim ▇▇▇▇ of sale of the Leased Property, without recourse or
warranty, but free and clear of Lessor Liens;
(f) The Lessor 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. Separate suits may be brought to collect any such damages
for any Rent Period(s), and such suits shall not in any manner prejudice the
Lessor's right to collect any such damages for any subsequent Rent
Period(s), or the Lessor may defer any such suit until after the expiration
of the Lease Term, in which event such suit shall be deemed not to have
accrued until the expiration of the Lease Term; or
(g) The Lessor may retain and apply against the Lessor's damages
(but only to the extent thereof) all sums which the Lessor would, absent
such Event of Default, be required to pay to, or turn over to, the Lessee
pursuant to the terms of this Lease.
Section 13.2 Remedies Cumulative; No Waiver; Consents. To the
----------------------------------------
extent permitted by, and subject to the mandatory requirements of,
Applicable Law, each and every right, power and remedy herein specifically
given to the Lessor or otherwise in this Lease shall be cumulative and shall
be in addition to every other right, power and remedy herein specifically
given or now or hereafter existing at law, in equity or by statute, and each
and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and as often and in
such order as may be deemed expedient by the Lessor, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to
be a waiver of the
24
right to exercise at the same time or thereafter any right, power or remedy.
No delay or omission by the Lessor in the exercise of any right, power or
remedy or in the pursuit of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of the
Lessee or to be an acquiescence therein. The Lessor's consent to any request
made by the Lessee shall not be deemed to constitute or preclude the
necessity for obtaining the Lessor's consent, in the future, to all similar
requests. No express or implied waiver by the Lessor of any Event of Default
shall in any way be, or be construed to be, a waiver of any future or
subsequent Potential Event of Default or Event of Default. To the extent
permitted by Applicable Law, the Lessee hereby waives any rights now or
hereafter conferred by statute or otherwise that may require the Lessor to
sell, lease or otherwise use the Leased Property or part thereof in
mitigation of the Lessor's damages upon the occurrence of any Potential
Event of Default or Event of Default or that may otherwise limit or modify
any of the Lessor's rights or remedies under this Article XIII.
------------
Section 13.3 Purchase Upon an Event of Default. Upon the
---------------------------------
occurrence of an Event of Default, until the date that is thirty (30) days
after the Lessee receives written notice of such Event of Default, the
Lessee may purchase all, but not less than all, of the Leased Property for
the Lease Balance, plus any amounts due pursuant to Section 7.5 of the
Master Agreement. Such purchase shall be made in accordance with Section
14.5 (except that the Lessor's obligations under Section 14.5(a) shall be
---------------
limited to delivery of a special warranty deed and quit claim ▇▇▇▇ of sale
of the Leased Property, without recourse or warranty (other than those
contained in such special warranty deed), but free and clear of Lessor
Liens), upon not less than five (5) Business Days' written notice (which
shall be irrevocable) to the Lessor, which notice shall set forth the date
of purchase (which shall be a date no later than ten (10) Business Days from
the date of such notice).
ARTICLE XIV
SALE, RETURN OR PURCHASE
OF LEASED PROPERTY; RENEWAL
---------------------------
Section 14.1 Lessee's Option to Purchase.
---------------------------
(a) Subject to the terms, conditions and provisions set forth in
this Article XIV, the Lessee shall have the option (the "Purchase Option"),
----------- ---------------
to be exercised as set forth below, to purchase from the Lessor, the
Lessor's interest in all of the Leased Property. Such option must be
exercised by written notice to the Lessor not later than six (6) months
prior to the Lease Termination Date which notice shall be irrevocable; such
notice shall specify the date that such purchase shall take place, which
date shall be a date occurring not less than thirty (30) days after such
notice or the Lease Termination Date (whichever is earlier). If the Purchase
Option is exercised pursuant to the foregoing, then, subject to the
provisions set forth in this Article XIV, on the applicable purchase date or
-----------
the Lease Termination Date, as the case may be, the Lessor shall convey to
the Lessee, without recourse or warranty (other than as set forth in the
special
25
warranty deed and as to the absence of Lessor Liens), and the Lessee shall
purchase from the Lessor, the Lessor's interest in the Leased Property leased
by the Lessee.
(b) [Reserved]
Section 14.2 Conveyance to Lessee. Unless (a) the Lessee shall have
--------------------
properly exercised the Purchase Option and purchased the Leased Property
pursuant to Section 14.1(a), or (b) the Lessee shall have properly exercised
---------------
the Remarketing Option and shall have fulfilled all of the conditions of
Section 14.6 hereof, then, subject to the terms, conditions and provisions
------------
set forth in this Article XIV, the Lessee shall purchase from the Lessor,
-----------
and the Lessor shall convey to the Lessee, on the Lease Termination Date all
of the Lessor's interest in the Leased Property leased to the Lessee. The
Lessee may designate, in a notice given to the Lessor not less than ten (10)
Business Days prior to the closing of such purchase, or any purchase
pursuant to Section 14.1(a), (time being of the essence), the transferee to
---------------
whom the conveyance shall be made (if other than to the Lessee), in which
case such conveyance shall (subject to the terms and conditions set forth
herein) be made to such designee; provided, however, that such designation
-------- -------
of a transferee shall not cause the Lessee to be released, fully or
partially, from any of its obligations under this Lease.
Section 14.3 Acceleration of Purchase Obligation. The Lessee shall
-----------------------------------
be obligated to purchase the Lessor's interest in the Leased Property
immediately, automatically and without notice upon the occurrence of any
Event of Default specified in clause (l) of Article XII, for the purchase
-----------
price set forth in Section 14.4. Upon the occurrence of any other Event of
------------
Default, the Lessee shall be obligated to purchase the Lessor's interest in
the Leased Property for the purchase price set forth in Section 14.4 upon
------------
notice of such obligation from the Lessor.
Section 14.4 Determination of Purchase Price. Upon the purchase by
-------------------------------
the Lessee of the Lessor's interest in the Leased Property upon the exercise
of the Purchase Option or pursuant to Section 14.2 or 14.3, the aggregate
------------ ----
purchase price for the Leased Property shall be an amount equal to the Lease
Balance as of the closing date for such purchase, plus any amount due
pursuant to Section 7.5(f) of the Master Agreement as a result of such
purchase.
Section 14.5 Purchase Procedure.
------------------
(a) If the Lessee shall purchase the Lessor's interest in the
Leased Property pursuant to any provision of this Lease, (i) the Lessee
shall accept from the Lessor, and the Lessor shall convey, the Leased
Property by a duly executed and acknowledged special warranty deed and quit
claim ▇▇▇▇ of sale of such the Leased Property in recordable form, and a
quitclaim ▇▇▇▇ of sale of such Leased Property, (ii) upon the date fixed for
any purchase of the Lessor's interest in the Leased Property hereunder, the
Lessee shall pay to the order of the Agent (or the Lessor if the Loans have
been paid in full) the Lease Balance, plus any amount due pursuant to
Section 7.5 of the Master Agreement as a result of such purchase, by wire
transfer of immediately available funds, (iii) the Lessor will execute and
deliver to the Lessee such other documents, including releases, affidavits,
termination agreements and termination statements, as may be legally
26
required or as may be reasonably requested by the Lessee in order to effect
such conveyance, free and clear of Lessor Liens and the Liens of the
Operative Documents and (iv) if reasonably requested by the Lessee, the
Lessor will execute and deliver to the Lessee an assignment or termination
of the Ground Lease (if the same is still in effect), in such form as may be
reasonably requested by the Lessee, and the Lessee shall pay any amounts due
with respect thereto under the Ground Lease.
(b) The Lessee shall, at the Lessee's sole cost and expense,
obtain all required governmental and regulatory approvals and consents and,
in connection therewith, shall make such filings as required by Applicable
Law. In the event that the Lessor is required by Applicable Law to take any
action in connection with such purchase and sale, the Lessee shall pay prior
to transfer all costs incurred by the Lessor in connection therewith.
Without limiting the foregoing, all costs incident to such conveyance,
including, without limitation, the Lessee's attorneys' fees, the Lessor's
attorneys' fees, commissions, the Lessee's and the Lessor's escrow fees,
recording fees, title insurance premiums and all applicable documentary
transfer or other transfer taxes and other taxes required to be paid in
order to record the transfer documents that might be imposed by reason of
such conveyance and the delivery of such deed shall be borne entirely by and
paid by the Lessee.
(c) Upon expiration or termination of this Lease resulting in
conveyance of the Lessor's interest in the title to the Leased Property to
the Lessee, there shall be no apportionment of rents (including, without
limitation, water rents and sewer rents), taxes, insurance, utility charges
or other charges payable with respect to the Leased Property, all of such
rents, taxes, insurance, utility or other charges due and payable with
respect to the Leased Property prior to termination being payable by the
Lessee hereunder and all due after such time being payable by the Lessee as
the then owner of the Leased Property.
Section 14.6 Option to Remarket. Subject to the fulfillment of
------------------
each of the conditions set forth in this Section 14.6, the Lessee shall have
------------
the option to market all of the Leased Property for the Lessor (the
"Remarketing Option"). The Lessee's effective exercise and consummation of
------------------
the Remarketing Option shall be subject to the due and timely fulfillment of
each of the following provisions, the failure of any of which, unless waived
in writing by the Lessor, the Agent and the Lenders, shall render the
Remarketing Option and the Lessee's exercise thereof null and void, in which
event, the Lessee shall be obligated to perform its obligations under
Section 14.2.
------------
(a) Not later than twelve (12) months prior to the Lease
Termination Date, the Lessee shall give to the Lessor and the Agent written
notice of the Lessee's exercise of the Remarketing Option.
(b) Not later than ten (10) Business Days prior to the Lease
Termination Date, the Lessee shall deliver to the Lessor and the Agent an
environmental assessment of the Leased Property leased by it dated not
earlier than forty-five (45) days prior to the Lease Termination Date. Such
environmental assessment shall be prepared by an environmental consultant
selected
27
by the Required Funding Parties, shall be in form, detail and substance
reasonably satisfactory to the Required Funding Parties and shall otherwise
indicate the environmental condition of the Leased Property to be the same
as described in the Environmental Audit.
(c) On the date of the Lessee's notice to the Lessor and the Agent
of the Lessee's exercise of the Remarketing Option, each of the Construction
Conditions shall have been timely satisfied and no Event of Default or
Potential Event of Default shall exist, and thereafter, no Event of Default
or Potential Event of Default shall exist under this Lease.
(d) The Lessee shall have completed all Alterations, restoration
and rebuilding of the Leased Property leased by it pursuant to Sections 6.1,
------------
6.2, 10.3 and 10.4 (as the case may be) and shall have fulfilled all of the
--- ---- ----
conditions and requirements in connection therewith pursuant to such
Sections or otherwise as required hereunder or under the other Operative
--------
Documents, in each case, by the date on which the Lessor and the Agent
receive the Lessee's notice of the Lessee's exercise of the Remarketing
Option (time being of the essence), regardless of whether the same shall be
within the Lessee's control. If any use of the Leased Property has
substantially changed the character of the Leased Property (without implying
any consent to such use by the Lessor or the Agent), the Lessee shall, if
requested by the Lessor or the Agent, restore the Leased Property to its
general character as of the commencement of this Lease, except for normal
wear and tear.
(e) The Lessee shall promptly provide any maintenance records
relating to the Leased Property leased by it to the Lessor, the Agent and
any potential purchaser upon request and shall otherwise do all things
necessary to deliver possession of the Leased Property to the potential
purchaser. The Lessee shall allow the Lessor, the Agent and any potential
purchaser access to the Leased Property for the purpose of inspecting the
same.
(f) On the Lease Termination Date, the Lessee shall surrender the
Leased Property leased by it in accordance with Section 14.8 hereof.
------------
(g) In connection with any such sale of the Leased Property, the
Lessee will provide to the purchaser all customary "seller's" indemnities
requested by the potential purchaser, representations and warranties
regarding title, absence of Liens (except Lessor Liens) and the condition of
the Leased Property, including, without limitation, a customary
environmental indemnity. The Lessee shall fulfill all of the requirements
set forth in clause (b) of Section 14.5, and such requirements are
---------- ------------
incorporated herein by reference. As to the Lessor, any such sale shall be
made on an "as is, with all faults" basis without representation or warranty
by the Lessor, other than the absence of Lessor Liens.
(h) In connection with any such sale of the Leased Property, the
Lessee shall pay directly, and not from the sale proceeds, all prorations,
credits, costs and expenses of the sale of the Leased Property leased by it,
whether incurred by the Lessor, any Lender, the Agent or the Lessee,
including without limitation, the cost of all title insurance, surveys,
environmental reports, appraisals, transfer taxes, the Lessor's and the
Agent's attorneys' fees, the Lessee's
28
attorneys' fees, commissions, escrow fees, recording fees and all applicable
documentary and other transfer taxes.
(i) The Lessee shall pay to the Agent on the Lease Termination
Date (or to such other Person as the Agent shall notify the Lessee in
writing, or in the case of Supplemental Rent, to the Person entitled
thereto) an amount equal to the Recourse Deficiency Amount, plus all accrued
----
and unpaid Basic Rent and Supplemental Rent, and all other amounts hereunder
which have accrued prior to or as of such date, in the type of funds
specified in Section 3.3 hereof.
-----------
If the Lessee has exercised the Remarketing Option, the following
additional provisions shall apply: During the period commencing on the date
twelve (12) months prior to the scheduled expiration of the Lease Term, the
Lessee shall, as nonexclusive agent for the Lessor, use commercially
reasonable efforts to sell the Lessor's interest in the Leased Property and
will attempt to obtain the highest purchase price therefor. All such
marketing of the Leased Property shall be at the Lessee's sole expense.
Lessee promptly shall submit all bids to the Lessor and the Agent, and the
Lessor and the Agent will have the right to review the same and the right to
submit any one or more bids. All bids shall be on an all-cash basis. In no
event shall such bidder be the Lessee or any Subsidiary or Affiliate of the
Lessee. The written offer must specify the Lease Termination Date as the
closing date. If, and only if, the aggregate selling price (net of closing
costs and prorations, as reasonably estimated by the Agent) is less than the
difference between the Lease Balance at such time minus the Recourse
Deficiency Amount, then the Lessor or the Agent may, in its sole and absolute
discretion, by notice to the Lessee, reject such offer to purchase, in which
event the parties will proceed according to the provisions of Section 14.7
------------
hereof. If neither the Lessor nor the Agent rejects such purchase offer as
provided above, the closing of such purchase of the Leased Property by such
purchaser shall occur on the Lease Termination Date, contemporaneously with
the Lessee's surrender of the Leased Property in accordance with Section 14.8
------------
hereof, and the gross proceeds of the sale (i.e., without deduction for any
marketing, closing or other costs, prorations or commissions) shall be paid
directly to the Agent (or the Lessor if the Funded Amount has been fully
paid); provided, however, that if the sum of the gross proceeds from such
-------- -------
sale plus the Recourse Deficiency Amount paid by the Lessee on the Lease
----
Termination Date pursuant to Section 14.6(i), minus any and all costs and
---------------
expenses (including broker fees, appraisal costs, legal fees and transfer
taxes) incurred by the Agent or the Lessor in connection with the marketing
of the Leased Property or the sale thereof exceeds the Lease Balance as of
such date, then the excess shall be paid to the Lessee on the Lease
Termination Date. The Lessee shall not have the right, power or authority to
bind the Lessor in connection with any proposed sale of the Leased Property.
Section 14.7 Rejection of Sale. Notwithstanding anything contained
-----------------
herein to the contrary, if the Lessor or the Agent rejects the purchase
offer for the Leased Property as provided in Section 14.6, then (a) the
------------
Lessee shall pay to the Agent the Recourse Deficiency Amount pursuant to
Section 14.6(i), (b) the Lessor shall retain title to the Leased Property,
---------------
and (c) in addition to the Lessee's other obligations hereunder, the Lessee
will reimburse the Lessor and the Agent, within ten (10) Business Days after
written request, for all reasonable costs and
29
expenses incurred by the Lessor or Agent during the period ending on the
first anniversary of the Lease Termination Date in connection with the
marketing, sale, closing or transfer of the Leased Property, which
obligation shall survive the Lease Termination Date and the termination or
expiration of this Lease.
Section 14.8 Return of Leased Property. If the Lessor retains title
-------------------------
to the Leased Property pursuant to Section 14.7 hereof, then the Lessee
------------
shall, on the Lease Termination Date, and at its own expense, return
possession of the Leased Property leased by it to the Lessor for retention
by the Lessor or, if the Lessee properly exercises the Remarketing Option
and fulfills all of the conditions of Section 14.6 hereof and neither the
------------
Lessor nor the Agent rejects such purchase offer pursuant to Section 14.6,
------------
then the Lessee shall, on such Lease Termination Date, and at its own cost,
transfer possession of the Leased Property leased by it to the independent
purchaser thereof, in each case by surrendering the same into the possession
of the Lessor or such purchaser, as the case may be, free and clear of all
Liens other than the Lessor Liens, in as good condition as it was on the
Completion Date therefor in the case of new Construction, or the Funding
Date (as modified by Alterations permitted by this Lease), ordinary wear and
tear excepted, and in compliance with all Applicable Laws and all other
requirements of this Lease and the other Operative Documents. The Lessee
shall, on and within a reasonable time before and after the Lease
Termination Date, cooperate with the Lessor and the independent purchaser of
the Leased Property leased by the Lessee in order to facilitate the
ownership and operation by such purchaser of the Leased Property after the
Lease Termination Date, which cooperation shall include the following, all
of which the Lessee shall do on or before the Lease Termination Date:
providing all books and records regarding the maintenance and ownership of
the Leased Property and all know-how, data and technical information
relating thereto, providing a copy of the Plans and Specifications, granting
or assigning all licenses necessary for the operation and maintenance of the
Leased Property and cooperating in seeking and obtaining all necessary
Governmental Actions. The Lessee shall have also paid the cost of all
Alterations commenced prior to the Lease Termination Date. The obligations
of the Lessee under this Article XIV shall survive the expiration or
-----------
termination of this Lease.
Section 14.9 Renewal.
-------
(a) Subject to the conditions set forth herein, the Lessee may by
written notice to the Lessor and the Agent given not later than ninety (90)
days prior to the Construction Term Expiration Date, request the renewal of
this Lease for a renewal period equal to the Construction Term, but in no
event in excess of twelve (12) months, commencing on the date following the
Lease Termination Date. No later than the date that is forty-five (45) days
after the date the request to renew has been delivered to each of the Lessor
and the Agent, the Agent will notify the Lessee whether or not the Lessor's
and the Lenders' consent (which consent, in the case of the Lessor and the
Lenders, may be granted or denied in their sole discretion) to such renewal
request (which renewal shall require the unanimous consent of the Lessor and
the Lenders and may be conditioned on such conditions precedent as may be
specified by the Lessor and the Lenders). If the Agent fails to respond
within such timeframe, such failure shall be a rejection of
30
such request. If the Agent notifies the Lessee of the Lessor's and the
Lenders' consent to such renewal, such renewal shall be effective as of the
Lease Termination Date.
(b) Subject to the conditions set forth herein, the Lessee may, by
written notice to the Lessor and the Agent given not later than twelve (12)
months and not earlier than sixteen (16) months prior to the then scheduled
Lease Termination Date, request the renewal of this Lease, for five (5)
years in the case of the first renewal term and up to five years in the case
of the second renewal term, provided that in no event shall the term of this
Lease exceed fifteen (15) years from the date of this Lease, in each case
commencing on the date following such Lease Termination Date. No later than
the date that is forty-five (45) days after the date the request to renew
has been delivered to each of the Lessor and the Agent, the Agent will
notify the Lessee whether or not the Lessor and the Lenders consent (such
consent, in the case of the Lessor and the Lenders, may be granted or denied
in their sole discretion) to such renewal request (which renewal shall
require the unanimous consent of the Lessor and the Lenders, and may be
conditioned on such conditions precedent as may be specified by the Lessor
and the Lenders). If the Agent fails to respond within such time frame, such
failure shall be deemed to be a rejection of such request. If the Agent
notifies the Lessee of the Lessor's and the Lenders' consent to such
renewal, such renewal shall be effective as of the then scheduled Lease
Termination Date. The Lessee, at its sole cost and expense, shall be
permitted to replace any Lender that rejects or is deemed to have rejected
such request, provided that such replacement Lender is an Eligible Assignee,
--------
the replacement complies with Section 6.2 of the Master Agreement and the
replacement occurs at least twelve (12) months prior to the then scheduled
Lease Termination Date; provided, however, that, in the event that the
-------- -------
Lessee shall have irrevocably elected to purchase the Leased Property
pursuant to the terms of this Lease if this Lease is not renewed as provided
for herein and written notice of such election shall have been delivered to
the Lessor and the Agent at least twelve (12) months prior to the then
scheduled Lease Termination Date, then such replacement shall occur at lease
six (6) months prior to the then scheduled Lease Termination Date.
Section 14.10 Environmental Report. Upon termination of this Lease,
--------------------
unless the Lessee have exercised the Remarketing Option and complied with
Section 14.6, the Lessee shall deliver, at the Lessee's expense, to the
------------
Lessor and the Agent an environmental assessment of the Leased Property
leased by it at any time during the Lease Term. Such environmental
assessment shall be prepared by an environmental consultant, and shall be in
a form, reasonably satisfactory to the Lessor and the Agent.
ARTICLE XV
LESSEE'S EQUIPMENT
------------------
After any repossession of the Leased Property (whether or not this
Lease has been terminated), the Lessee, at its sole cost and expense and so
long as such removal of such trade fixtures, personal property or equipment
shall not result in a violation of Applicable Law, shall, within a
reasonable time after such repossession or within sixty (60) days after the
Lessee's
31
receipt of the Lessor's written request (whichever shall first occur),
remove all of the Lessee's trade fixtures, personal property and equipment
from the Leased Property (to the extent that the same can be readily removed
from the Leased Property without causing material damage to the Leased
Property); provided, however, that the Lessee shall not remove any such
-------- -------
trade fixtures, personal property or equipment that has been financed by the
Lessor under the Operative Documents or otherwise constituting Leased
Property (or that constitutes a replacement of such property). Any of the
Lessee's trade fixtures, personal property and equipment not so removed by
the Lessee within such period shall be considered abandoned by the Lessee,
and title thereto shall without further act vest in the Lessor, and may be
appropriated, sold, destroyed or otherwise disposed of by the Lessor without
notice to the Lessee and without obligation to account therefor and the
Lessee will pay the Lessor, upon written demand, all reasonable costs and
expenses incurred by the Lessor in removing, storing or disposing of the
same and all costs and expenses incurred by the Lessor to repair any damage
to the Leased Property caused by such removal. The Lessee will immediately
repair at its expense all damage to the Leased Property caused by any such
removal (unless such removal is effected by the Lessor, in which event the
Lessee shall pay all reasonable costs and expenses incurred by the Lessor
for such repairs). The Lessor shall have no liability in exercising the
Lessor's rights under this Article XV, nor shall the Lessor be responsible
----------
for any loss of or damage to the Lessee's personal property and equipment.
ARTICLE XVI
RIGHT TO PERFORM FOR LESSEE
---------------------------
If the Lessee shall fail to perform or comply with any of its
agreements contained herein, the Lessor, upon ten (10) days' prior notice to
the Lessee (except in the case of an emergency), may perform or comply with
such agreement, and the Lessor shall not thereby be deemed to have waived
any default caused by such failure, and the amount of such payment and the
amount of the expenses of the Lessor (including actual and reasonable
attorneys' fees and expenses) incurred in connection with such payment or
the performance of or compliance with such agreement, as the case may be,
shall be deemed Supplemental Rent, payable by the Lessee to the Lessor
within ten (10) days after written demand therefor.
ARTICLE XVII
MISCELLANEOUS
-------------
Section 17.1 Reports. To the extent required under Applicable Law
-------
and to the extent it is reasonably practical for the Lessee to do so, the
Lessee shall prepare and file in timely fashion, or, where such filing is
required to be made by the Lessor or it is otherwise not reasonably
practical for the Lessee to make such filing, Lessee shall prepare and
deliver to the Lessor (with a copy to the Agent) within a reasonable time
prior to the date for filing and the Lessor shall file, any material reports
with respect to the condition or operation of the Leased Property that shall
be required to be filed with any Governmental Authority.
32
Section 17.2 Binding Effect; Successors and Assigns. The terms and
--------------------------------------
provisions of this Lease, and the respective rights and obligations
hereunder of the Lessor and the Lessee, shall be binding upon their
respective successors, legal representatives and assigns (including, in the
case of the Lessor, any Person to whom the Lessor may transfer the Leased
Property or any interest therein in accordance with the provisions of the
Operative Documents), and inure to the benefit of their respective permitted
successors and assigns, and the rights granted hereunder to the Agent and
the Lenders shall inure to the benefit of their respective permitted
successors and assigns. The Lessee hereby acknowledges that the Lessor has
assigned all of its right, title and interest to, in and under this Lease to
the Agent and the Lenders pursuant to the Loan Agreement and related
Operative Documents and that all of the Lessor's rights hereunder may be
exercised by the Agent and all notices, deliveries or communications to or
with the Lessor shall be provided to or be made with the Agent.
Section 17.3 Quiet Enjoyment. The Lessor covenants that it will
---------------
not interfere in the Lessee's or any of its permitted sublessees' quiet
enjoyment of the Leased Property in accordance with this Lease during the
Lease Term, so long as no Potential Event of Default or Event of Default has
occurred. Such right of quiet enjoyment is independent of, and shall not
affect, the Lessor's rights otherwise to initiate legal action to enforce
the obligations of the Lessee under this Lease.
Section 17.4 Notices. Unless otherwise specified herein, all
-------
notices, offers, acceptances, rejections, consents, requests, demands or
other communications to or upon the respective parties hereto shall be in
writing and shall be deemed to have been given as set forth in Section 8.2
of the Master Agreement. All such notices, offers, acceptances, rejections,
consents, requests, demands or other communications shall be addressed as
follows or to such other address as any of the parties hereto may designate
by written notice:
If to the Lessor: Atlantic Financial Group, Ltd.
c/o Grogan & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
If to the Lessee: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & Co., L.P.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Agent: SunTrust Bank
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
Mail Code 1928
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Dash
33
If to a Lender, to the address provided in the Master Agreement.
Section 17.5 Severability. Any provision of this Lease that shall
------------
be prohibited 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
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction,
and the Lessee shall remain liable to perform its obligations hereunder
except to the extent of such unenforceability. To the extent permitted by
Applicable Law, the Lessee hereby waives any provision of law that renders
any provision hereof prohibited or unenforceable in any respect.
Section 17.6 Amendment; Complete Agreements. Neither this Lease nor
------------------------------
any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, except by an instrument in writing signed by the Lessor and
the Lessee in accordance with the provisions of Section 8.4 of the Master
Agreement. This Lease, together with the Lease Supplement and the other
Operative Documents, is intended by the parties as a final expression of
their agreement and as a complete and exclusive statement of the terms
thereof, all negotiations, considerations and representations between the
parties having been incorporated herein and therein. No course of prior
dealings between the parties or their officers, employees, agents or
Affiliates shall be relevant or admissible to supplement, explain or vary
any of the terms of this Lease or any other Operative Document. Acceptance
of, or acquiescence in, a course of performance rendered under this or any
prior agreement between the parties or their Affiliates shall not be
relevant or admissible to determine the meaning of any of the terms of this
Lease or any other Operative Document. No representations, undertakings or
agreements have been made or relied upon in the making of this Lease other
than those specifically set forth in the Operative Documents.
Section 17.7 Construction. This Lease shall not be construed more
------------
strictly against any one party, it being recognized that both of the parties
hereto have contributed substantially and materially to the preparation and
negotiation of this Lease.
Section 17.8 Headings. The Table of Contents and headings of the
--------
various Articles and Sections of this Lease are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
hereof.
Section 17.9 Counterparts. This Lease may be executed by the
------------
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 17.10 GOVERNING LAW. THIS LEASE SHALL IN ALL RESPECTS BE
-------------
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE, EXCEPT AS TO MATTERS RELATING
34
TO THE CREATION OF THE LEASEHOLD OR MORTGAGE ESTATES HEREUNDER, AND THE
EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH
SUCH ESTATES ARE LOCATED.
Section 17.11 Reserved.
--------
Section 17.12 Liability of the Lessor Limited. Except as otherwise
-------------------------------
expressly provided below in this Section 17.12, it is expressly understood
-------------
and agreed by and between the Lessee, the Lessor and their respective
successors and assigns that nothing herein contained shall be construed as
creating any liability of the Lessor or any of its Affiliates or any of
their respective officers, directors, employees or agents, individually or
personally, for any failure to perform any covenant, either express or
implied, contained herein, all such liability (other than that resulting
from the Lessor's gross negligence or willful misconduct, except to the
extent imputed to the Lessor by virtue of the Lessee's action or failure to
act), if any, being expressly waived by the Lessee and by each and every
Person now or hereafter claiming by, through or under the Lessee, and that,
so far as the Lessor or any of its Affiliates or any of their respective
officers, directors, employees or agents, individually or personally, is
concerned, the Lessee and any Person claiming by, through or under the
Lessee shall look solely to the right, title and interest of the Lessor in
and to the Leased Property and any proceeds from the Lessor's sale or
encumbrance thereof (provided, however, that the Lessee shall not be
-------- -------
entitled to any double recovery) for the performance of any obligation under
this Lease and under the Operative Documents and the satisfaction of any
liability arising therefrom (other than that resulting from the Lessor's
gross negligence or willful misconduct, except to the extent imputed to the
Lessor by virtue of the Lessee's action or failure to act).
Section 17.13 Estoppel Certificates. Each party hereto agrees that
---------------------
at any time and from time to time during the Lease Term, it will promptly,
but in no event later than thirty (30) days after request by the other party
hereto, execute, acknowledge and deliver to such other party or to any
prospective purchaser (if such prospective purchaser has signed a commitment
or letter of intent to purchase the Leased Property or any part thereof or
any Note), assignee or mortgagee or third party designated by such other
party, a certificate stating (a) that this Lease is unmodified and in force
and effect (or if there have been modifications, that this Lease is in force
and effect as modified, and identifying the modification agreements); (b)
the date to which Basic Rent has been paid; (c) whether or not there is any
existing default by the Lessee in the payment of Basic Rent or any other sum
of money hereunder, and whether or not there is any other existing default
by either party with respect to which a notice of default has been served,
and, if there is any such default, specifying the nature and extent thereof;
(d) whether or not, to the knowledge of the signer after due inquiry and
investigation, there are any setoffs, defenses or counterclaims against
enforcement of the obligations to be performed hereunder existing in favor
of the party executing such certificate and (e) other items that may be
reasonably requested; provided that no such certificate may be requested
--------
unless the requesting party has a good faith reason for such request.
35
Section 17.14 No Joint Venture. Any intention to create a joint
----------------
venture, partnership or other fiduciary relationship between the Lessor and
the Lessee is hereby expressly disclaimed.
Section 17.15 No Accord and Satisfaction. The acceptance by the
--------------------------
Lessor of any sums from the Lessee (whether as Basic Rent or otherwise) in
amounts which are less than the amounts due and payable by the Lessee
hereunder is not intended, nor shall be construed, to constitute an accord
and satisfaction of any dispute between the Lessor and the Lessee regarding
sums due and payable by the Lessee hereunder, unless the Lessor specifically
deems it as such in writing.
Section 17.16 No Merger. In no event shall the leasehold interests,
---------
estates or rights of the Lessee hereunder, or of the holder of any Notes
secured by a security interest in this Lease, merge with any interests,
estates or rights of the Lessor in or to the Leased Property, it being
understood that such leasehold interests, estates and rights of the Lessee
hereunder, and of the holder of any Notes secured by a security interest in
this Lease, shall be deemed to be separate and distinct from the Lessor's
interests, estates and rights in or to the Leased Property, notwithstanding
that any such interests, estates or rights shall at any time or times be
held by or vested in the same person, corporation or other entity.
Section 17.17 Survival. The obligations of the Lessee to be
--------
performed under this Lease prior to the Lease Termination Date and the
obligations of Lessee pursuant to Articles III, IV, X, XI, XIII, Sections
------------ -- - -- ---- --------
6.3, 14.2, 14.3, 14.4, 14.5, 14.6(f), (g), (h), and (i), 14.7, 14.8, 14.10,
--- ---- ---- ---- ---- ------- --- --- --- ---- ---- -----
Articles XV and XVI, and Sections 17.1, 17.10 and 17.12 shall survive the
----------- --- ------------- ----- -----
expiration or termination of this Lease. The extension of any applicable
statute of limitations by the Lessor, the Lessee, the Agent or any
Indemnitee shall not affect such survival.
Section 17.18 Chattel Paper. To the extent that this Lease
-------------
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code in any applicable jurisdiction), no security interest in this Lease may
be created through the transfer or possession of any counterpart other than
the sole original counterpart, which shall be identified as the original
counterpart by the receipt of the Agent.
Section 17.19 Time of Essence. Time is of the essence of this Lease.
---------------
Section 17.20 Recordation of Lease. The Lessee will, at its
--------------------
expense, cause this Lease or a memorandum of lease in form and substance
reasonably satisfactory to the Lessor and the Lessee (if permitted by
Applicable Law) to be recorded in the proper office or offices in the
State(s) and the municipalities in which the Land is located.
Section 17.21 Investment of Security Funds. The parties hereto
----------------------------
agree that any amounts not payable to the Lessee pursuant to any provision
of Article VIII, X or XIV or this Section 17.21 shall be held by the Agent
------------ - --- -------------
(or the Lessor if the Loans have been fully paid) as security for the
obligations of the Lessee under this Lease and the Master Agreement and of
the Lessor under the Loan Agreement. At such time as such amounts are
payable to the Lessee, such
36
amounts, net of any amounts previously applied to the Lessee's obligations
hereunder or under the Master Agreement (which application is hereby agreed
to by the Lessee), shall be paid to the Lessee. Any such amounts which are
held by the Agent (or the Lessor if the Loans have been fully paid) pending
payment to the Lessee shall until paid to the Lessee, as provided hereunder
or until applied against the Lessee's obligations herein and under the
Master Agreement and the other Operative Documents and distributed as
provided in the Loan Agreement (or herein after the Loan Agreement is no
longer in effect) in connection with any exercise of remedies hereunder, be
invested by the Agent or the Lessor, as the case may be, as directed from
time to time in writing by the Lessee (provided, however, if a Potential
-------- -------
Event of Default or an Event of Default has occurred, it will be directed by
the Agent or, if the Loans have been fully paid, the Lessor) and at the
expense and risk of the Lessee, in investments permitted by the Required
Lenders. Any gain (including interest received) realized as the result of
any such investment (net of any fees, commissions and other expenses, if
any, incurred in connection with such investment) shall be applied in the
same manner as the principal invested. The Lessee upon demand shall pay to
the Agent or the Lessor, as appropriate, the amount of any loss incurred in
connection with all such investments and the liquidation thereof.
Section 17.22 Ground Leases. The Lessee will, at its expense,
-------------
timely perform all of the obligations of the Lessor, in its capacity as
ground lessee, under the Ground Lease and all obligations under any and all
documents, instruments and agreements related thereto, and, if requested by
the Lessor, shall provide satisfactory evidence to the Lessor of such
performance.
Section 17.23 Land and Building. If the Building and the Land on
-----------------
which the Building is located are subject to separate Lease Supplements, at
any time that the Lessee exercises an option to purchase the Lessor's
interest in the Building or the Land, or to renew this Lease with respect to
the Building or the Land, or is obligated to purchase the Lessor's interest
in the Building or the Land as a result of an Event of Loss, an Event of
Taking or an Event of Default, such purchase or renewal shall be made
simultaneously with respect to all of the Lessor's interest in the Building
and the Land.
[Signature page follows]
37
IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered and attested by their respective
officers thereunto duly authorized as of the day and year first above
written.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P., a Missouri
limited partnership, as the Lessee
By: EDJ Holdings Company, Inc.,
a Missouri corporation, its sole
general partner
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
S-1
MASTER LEASE AGREEMENT
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership
(registered to do business in Arizona
as AFG Equity, Limited Partnership),
as the Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
By:
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Name:
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Title:
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MASTER LEASE AGREEMENT
EXHIBIT A
LEASE SUPPLEMENT
This instrument prepared by and
when recorded return to:
McGuireWoods LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
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LEASE SUPPLEMENT, MEMORANDUM OF LEASE
AND DEED OF TRUST AND SECURITY AGREEMENT
Dated as of November 30, 2000
among
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG Equity, Limited Partnership),
as Lessor
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P.,
as Lessee,
and
OLD REPUBLIC TITLE INSURANCE AGENCY, INC., Trustee,
for the use and
benefit of Lessor
Tempe, Arizona
=============================================================================
THIS INSTRUMENT IS INTENDED ALSO TO BE A FIXTURE FILING TO BE FILED IN
THE REAL ESTATE RECORDS OF MARICOPA COUNTY, ARIZONA.
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS; INTERPRETATION..................................2
SECTION 2. THE SUBJECT PROPERTY.........................................2
SECTION 3. NATURE OF TRANSACTION; DEED OF TRUST.........................2
SECTION 4. RATIFICATION; INCORPORATION.................................10
SECTION 5. ORIGINAL LEASE SUPPLEMENT...................................10
SECTION 6. GOVERNING LAW...............................................10
SECTION 7. COUNTERPART EXECUTION.......................................10
EXHIBITS:
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EXHIBIT A - Description of Land
EXHIBIT B - Schedule of Equipment
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LEASE SUPPLEMENT, MEMORANDUM OF LEASE
AND DEED OF TRUST AND SECURITY AGREEMENT
----------------------------------------
THIS LEASE SUPPLEMENT, MEMORANDUM OF LEASE AND DEED OF TRUST AND
SECURITY AGREEMENT (this "Lease Supplement") dated as of November 30, 2000
----------------
between ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership
(registered to do business in Arizona as AFG Equity, Limited Partnership),
having an address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, as the lessor (the "Lessor"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P., a
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Missouri limited partnership, having an address of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, as lessee (the "Lessee") and OLD REPUBLIC
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TITLE INSURANCE AGENCY, INC., an Arizona corporation, as trustee (the
"Trustee"), having an address of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, for the benefit of the Lessor.
RECITALS:
The Lessor and the Lessee have entered into a Master Lease
Agreement, dated as of the date hereof (as restated, amended, supplemented
or otherwise modified from time to time, the "Lease"). The Lessor desires to
lease to the Lessee, and the Lessee desires to lease from the Lessor, (a)
the Lessor's leasehold interest in the land described on Exhibit A attached
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hereto and incorporated herein, created pursuant to the Ground Lease,
together with the following appurtenant rights (the "Appurtenant Rights"):
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(i) all agreements, easements, rights of way or use, rights of ingress or
egress, privileges, appurtenances, tenements, hereditaments, reversions,
remainders, water rights and other rights and benefits at any time belonging
or pertaining to the land or the improvements thereon, including, without
limitation, the use of any streets, ways, alleys, vaults or strips of land
adjoining, abutting, adjacent or contiguous to the land, (ii) all permits,
licenses and rights, whether or not of record, appurtenant to the land (such
land and Appurtenant Rights being referred to as the "Land") and (b) the
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buildings, structures and improvements located or to be located on the Land,
along with all fixtures used or useful in connection with the operation
thereof or of the Land, including, without limitation, all furnaces,
boilers, compressors, elevators, fittings, pipings, connectives, conduits,
ducts, partitions, equipment and apparatus of every kind and description now
or hereafter affixed or attached to the building and all Alterations
(including all restorations, repairs, replacements and rebuilding of such
buildings, improvements and structures) thereto (the "Building") and all of
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the following equipment (the "Equipment"): all fixtures, personal property,
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chattels, business machines, machinery, apparatus, equipment, furnishings,
fittings and all appurtenances and additions thereto and substitutions or
replacements thereof (together with, in each case, attachments, components,
parts and accessories) currently owned or subsequently acquired by the
Lessor or the Lessee and now or subsequently affixed or attached to, or
contained in or used or usable in any way in connection with any operation
or letting of the Land, Building or Equipment, including but without
limiting the generality of the foregoing, all personal property and
equipment described on Exhibit B attached hereto and made a part hereof, all
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signs, screens, awnings, shades, blinds, curtains, draperies, artwork,
carpets, rugs, storm doors and windows, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards, plumbing,
ventilating, air conditioning and air-cooling apparatus, furnaces, boilers,
compressors, elevators, refrigerating, and incinerating equipment,
escalators, refrigerators, display cases, shelving, racking, movable and
demountable partitions, elevators, loading and unloading
equipment and systems, stoves, ranges, laundry equipment, cleaning systems
(including window cleaning apparatus), snow removal and lawn maintenance
equipment, motorized vehicles, telephones, communication systems (including
satellite dishes and antennae), televisions, computers, sprinkler systems
and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks,
connectives, conduits, ducts, partitions, appliances, equipment, apparatus,
fittings and fixtures of every kind and description but excluding the
Lessee's inventory (the Land, and the Building and the Equipment being
referred to hereinafter as the "Subject Property").
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions; Interpretation. Capitalized terms not
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otherwise defined in this Lease Supplement shall have the respective
meanings assigned thereto in the Appendix A to the Master Agreement (as
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amended, supplemented or otherwise modified from time to time the "Master
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Agreement"), dated as of the date hereof among the Lessee, the Lessor,
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SunTrust Bank, as Agent, and the Lenders parties thereto (the "Lenders"),
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and the rules of interpretation set forth in Appendix A shall apply to this
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Lease Supplement. Copies of the Master Agreement, the Lease and the other
Operative Documents (as defined in the Master Agreement) are on file at the
office of the Agent.
SECTION 2. The Subject Property. Effective upon the execution and
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delivery of this Lease Supplement by the Lessor and the Lessee, the Subject
Property shall be subject to the terms and provisions of the Lease, and the
Lessor hereby leases the Subject Property to the Lessee, and the Lessee
hereby hires and leases the Subject Property from the Lessor. The term of
the Lease with respect to the Subject Property begins on the date hereof and
ends on November 30, 2005, subject to the right of the Lessee to extend the
Lease in accordance with the terms and conditions set forth in the Lease and
the other Operative Documents. The Lease contains certain purchase rights
and options during the term of the Lease pursuant to which the Lessee may
acquire the Subject Property, all as more fully set forth in the Lease.
SECTION 3. Nature of Transaction; Deed of Trust. The Lessor and the
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Lessee intend that the Lease and this Lease Supplement be treated, for
accounting purposes, as an operating lease. For federal, state and local tax
purposes and for bankruptcy, commercial and regulatory law and all other
purposes, the Lessee and the Lessor intend that the transaction represented
by the Lease and this Lease Supplement be treated as a financing
transaction. For such purposes, it is the intention of the parties hereto
(i) that the Lease and this Lease Supplement be treated as a deed of trust
and security agreement, encumbering the Subject Property, and that the
Lessee, as grantor, hereby grants to the Trustee, with power of sale, as
trustee for the benefit of the Lessor, as beneficiary and secured party, or
any successor thereto, the Subject Property and a first and paramount Lien
thereon, (ii) that the Lessor shall have, as a result of such determination,
all of the rights, powers and remedies of a mortgagee, deed of trust
beneficiary or secured party available under Applicable Law to take
possession of and sell (whether by foreclosure or otherwise) the Subject
Property, (iii) the Trustee shall have the customary powers of a trustee
under a leasehold deed of trust encumbering a leasehold interest in real
property, (iv) that the effective date of such deed of trust shall be the
effective date of this Lease Supplement, (v) that
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the recording of this Lease Supplement shall be deemed to be the recording
of such deed of trust, and (vi) that the obligations secured by such deed of
trust shall include the Funded Amounts and all Basic Rent and Supplemental
Rent hereunder and all other obligations of and all amounts due from the
Lessee hereunder and under the Operative Documents. In furtherance of the
foregoing, the Lessor (for the remainder of this Section called "Loan
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Party"), and the Lessee (for the remainder of this Section called "Grantor")
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agree as follows:
A. This instrument shall constitute a Deed of Trust and
Security Agreement dated as of November 30, 2000 (this "Deed of
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Trust"), made by the Lessee (the "Grantor"), having an address at
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, to Old
Republic Title Insurance Agency, Inc., having an address of ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, as trustee
("the Trustee"), for the benefit of Atlantic Financial Group, Ltd.,
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a Texas limited partnership, having an address of ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (the "Loan Party").
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B. TO SECURE PAYMENT OF ALL AMOUNTS OWING BY THE GRANTOR
UNDER THE LEASE AND THE OTHER OPERATIVE DOCUMENTS AND THE PAYMENT
AND PERFORMANCE OF ALL OTHER OBLIGATIONS UNDER THE OPERATIVE
DOCUMENTS, THE GRANTOR HEREBY CONVEYS TO THE TRUSTEE AND HEREBY
BARGAINS, SELLS, CONVEYS, CONFIRMS, GRANTS, ASSIGNS, TRANSFERS,
WARRANTS AND SETS OVER TO THE TRUSTEE, WITH POWER OF SALE, THE
SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND PROCEEDS THEREOF
(INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND OTHER LOSS
PROCEEDS), WITH GENERAL WARRANTY OF TITLE, IN TRUST FOR THE USE AND
BENEFIT OF THE LOAN PARTY, AND GRANTS THE LOAN PARTY A SECURITY
INTEREST IN THE SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND
PROCEEDS THEREOF (INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND
OTHER LOSS PROCEEDS), TO HAVE AND TO HOLD the Subject Property and
the rights and privileges hereby granted unto the Trustee, its
successors and assigns for the uses and purposes set forth, until
all amounts owed by and all other obligations to be paid or
performed by the Grantor under the Lease and the other Operative
Documents are indefeasibly paid and performed in full.
C. If an Event of Default has occurred and is continuing
under the Lease, at the direction of the Loan Party:
(i) The Loan Party or its agents may enter and
take possession of the Subject Property by actual physical
possession or by written notice served personally upon or sent by
registered or certified mail, postage prepaid, to the Grantor, and
the Grantor shall surrender possession upon request and the Loan
Party may take possession without further authorization required,
and may let the Subject Property and receive the rents, issues and
profits thereof, make repairs and apply said rentals and profits,
after payment of all necessary or proper charges and expenses, on
account of the amounts hereby secured.
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(ii) The Loan Party, shall, as a matter of contract
right, at the option of the Loan Party, be entitled to the
appointment of a receiver for the Subject Property, and the Grantor
hereby consents to such appointment without the posting of a bond
or undertaking without regard to the value of the Subject Property
and waives notice of any application therefor.
(iii) The Trustee may foreclose this Deed of Trust as a
mortgage pursuant to the applicable laws of the State of Arizona,
or the Trustee may proceed to sell the Subject Property at public
auction, as a whole or in such parcels, for cash or credit and, in
addition to the requirements imposed by state law, upon any terms
as the Trustee deems appropriate. Before such sale at public
auction is made, there shall first be such notice of default and
such notice or advertisement of the time, place and terms of sale
as required by Applicable Law. Such sale may be postponed for any
reason, from time to time, to the extent permitted by Applicable
Law. In the event the sale is postponed, the Trustee shall
advertise or give notice of any subsequent sale in the same manner
as the original advertisement or notice of sale provided for above
or otherwise as may be permitted by Applicable Law. The Trustee
shall execute and deliver to the purchaser its Trustee's deed
conveying that portion of the Subject Property so sold, but without
any covenant or warranty, express or implied. The recitals in the
Trustee's deed of any matters or facts shall be conclusive proof of
the truthfulness thereof. The Loan Party may become the purchaser
of the Subject Property so sold, and no purchaser shall be required
to see to the proper application of the purchase money. Unless
otherwise required by Applicable Law, the Trustee shall apply the
proceeds of sale as directed by the Loan Party. The Grantor agrees
to surrender possession of the Subject Property so sold to the
purchaser at the sale immediately after such sale.
D. The Grantor hereby waives the benefit of all
appraisement, valuation, stay, extension, reinstatement and
redemption laws (whether equitable or statutory) now or hereafter
in force and all rights of marshaling in the event of any sale of
the Subject Property or any interest therein.
E. The Trustee shall be entitled to enforce payment of
the indebtedness and performance of the Lessee's obligations and to
exercise all rights and powers under this instrument or under any
of the other Operative Documents or other agreement or any laws now
or hereafter in force, notwithstanding some or all of the Lessee's
obligations may now or hereafter be otherwise secured, whether by
deed of trust, deed to secure debt, mortgage, security agreement,
pledge, lien, assignment or otherwise. Neither the acceptance of
this instrument nor its enforcement, shall prejudice or in any
manner affect the Trustee's right to realize upon or enforce any
other security now or hereafter held by the Trustee, it being
agreed that the Trustee shall be entitled to enforce this
instrument and any other security now or hereafter held by the
Trustee in such order and manner as the Trustee or the Loan Party
may determine in its or their absolute discretion. No remedy herein
conferred upon or reserved to the Trustee or the Loan Party is
intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy
given by any of the Operative Documents to the Trustee or the Loan
Party or to which they may
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otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed
expedient by the Loan Party. In no event shall the Trustee, in the
exercise of the remedies provided in this instrument (including,
without limitation, the appointment of a receiver and the entry of
such receiver on to all or any part of the Subject Property), be
deemed a "mortgagee in possession," and the Trustee shall not in
any way be made liable for any act, either of commission or
omission, in connection with the exercise of such remedies.
F. The Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of any Subject Property in
its possession, under Section 9-207 of the UCC as in effect in the
state in which the Subject Property is located (the "UCC") or
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otherwise, shall be to deal with it in the same manner as the
Trustee deals with similar property for its own account. Neither
the Trustee, the Loan Party nor any of their respective directors,
officers, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Subject Property or for
any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Subject Property upon the request of the
Grantor or any other Person or to take any other action whatsoever
with regard to the Subject Property or any part thereof.
G. All powers, authorizations and agencies contained in
this Deed of Trust are coupled with an interest and are irrevocable
until this instrument is terminated and the lien created hereby is
released.
H. Pursuant to Section 9-402 of the UCC, the Grantor
authorizes the Trustee or the Loan Party to file financing
statements with respect to the Subject Property with the signature
of the Grantor in such form and in such filing offices as the
Trustee or the Loan Party reasonably determines appropriate to
perfect the security interests of the Trustee and the Loan Party
under this Deed of Trust. A carbon, photographic or other
reproduction of this Deed of Trust shall be sufficient as a
financing statement for filing in any jurisdiction.
I. It is the intention of the parties hereto that this
instrument shall constitute a Security Agreement within the meaning
of the UCC, and the Grantor hereby grants the Loan Party a security
interest in all Subject Property which is personal property,
including, without limitation, all proceeds, both cash and noncash,
of any of the foregoing (the "Personal Property"). If an Event of
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Default shall occur, then in addition to having any other right or
remedy available at law or in equity, the Trustee, at the direction
of the Loan Party, shall have the option of either (i) proceeding
under the UCC and exercising such rights and remedies as may be
provided to a secured party by the UCC with respect to all or any
portion of the Subject Property which is personal property
(including, without limitation, taking possession of and selling
such property) or (ii) treating such property as real property and
proceeding with respect to both the real and personal property
constituting the Subject Property in accordance with the Trustee's
rights, powers and remedies with respect to the real property (in
which event the default provisions of the UCC shall not apply). If
the Trustee, at the direction of the Loan Party, shall elect to
proceed under the UCC, then five (5) days' notice of sale of the
personal property shall be deemed reasonable notice and the
reasonable expenses of retaking,
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holding, preparing for sale, selling and the like incurred by the
Trustee or the Loan Party shall include, but not be limited to,
attorneys' fees and legal expenses. At the Trustee's request, the
Grantor shall assemble the personal property and make it available
to the Trustee and the Loan Party at a place designated by the
Trustee or the Loan Party which is reasonably convenient to both
parties. The Grantor stipulates and agrees that a sale of the
Personal Property in conjunction with the Subject Property is a
commercially reasonable manner of disposing of the Personal
Property. The Loan Party also may (x) require the Grantor to, and
the Grantor hereby agrees that the Grantor will at the Grantor's
expense and upon request of the Loan Party forthwith, assemble all
or part of the Personal Property as directed by the Loan Party and
make it available to the Loan Party at a place to be designated by
the Loan Party which is reasonably convenient to the parties, and
(y) sell the Personal Property or any part thereof in one or more
parcels at public or private sale for cash or credit or for future
delivery, and at such price or prices and upon such other terms as
the Loan Party may deem commercially reasonable. The Loan Party
shall not be obligated to make any sale of the Personal Property
regardless of notice of sale having been given. The Loan Party may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.
The Grantor, the Trustee and the Loan Party further agree,
to the extent permitted by law, that this instrument upon recording
or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing"
within the meaning of Sections 9-313 and 9-402 of the UCC.
The Grantor, upon request by the Trustee or the Loan Party
from time to time, shall execute, acknowledge and deliver to the
Trustee or the Loan Party one or more separate security agreements,
in form satisfactory to the Trustee and the Loan Party, covering all
or any part of the Subject Property and will further execute,
acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation
statement or certificate or other document as the Trustee or the
Loan Party may request in order to perfect, preserve, maintain,
continue or extend the security interest under and the priority of
this instrument. The Grantor further agrees to pay to the Trustee
and the Loan Party on demand all costs and expenses incurred by the
Trustee or the Loan Party in connection with the preparation,
execution, recording, filing and refiling of any such document and
all reasonable costs and expenses of any record searches for
financing statements the Trustee or the Loan Party shall reasonably
require. If the Grantor shall fail to furnish any financing or
continuation statement within ten (10) days after request by the
Trustee or the Loan Party, then pursuant to the provisions of the
UCC, the Grantor hereby authorizes the Trustee and the Loan Party,
without the signature of the Grantor, to execute and file any such
financing and continuation statements. The filing of any financing
or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing
the right of the Trustee to proceed against any personal property
encumbered by this Deed of Trust as real property, as set forth
above.
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J. The Grantor acknowledges that in connection with the
rights and responsibilities of the Trustee under this instrument
with respect to any action taken by the Trustee or the exercise or
non-exercise by the Trustee of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting
or arising out of this instrument, as between the Grantor and the
Loan Party, the Trustee shall be conclusively presumed to be acting
as agent for the Loan Party with full and valid authority so to act
or refrain from acting, and the Grantor shall be under no
obligation, or entitlement, to make any inquiry respecting such
authority.
K. Except as otherwise set forth herein, to the fullest
extent permitted by law, the Grantor waives the benefit of all laws
now existing or that may subsequently be enacted providing for (i)
any appraisement before sale of any portion of the Subject
Property, (ii) any extension of the time for the enforcement of the
collection of the indebtedness or the creation or extension of a
period of redemption from any sale made in collecting such debt and
(iii) exemption of the Subject Property from attachment, levy or
sale under execution or exemption from civil process. Except as
otherwise set forth herein, to the full extent the Grantor may do
so, the Grantor agrees that the Grantor will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement, valuation,
stay, exemption, extension, reinstatement or redemption, or
requiring foreclosure of this instrument before exercising any
other remedy granted hereunder, and the Grantor, for the Grantor
and its successors and assigns, and for any and all Persons ever
claiming any interest in the Subject Property, to the extent
permitted by law, hereby waives and releases all rights of
reinstatement, redemption, valuation, appraisement stay of
execution, notice of election to mature or declare due the whole of
the secured indebtedness and marshaling in the event of foreclosure
of the liens hereby created.
L. If (a) the Subject Property shall consist of one or
more parcels, whether or not contiguous and whether or not located
in the same city or county, or (b) in addition to this instrument,
the Trustee and the Loan Party shall now or hereafter hold one or
more additional mortgages, liens, deeds of trust or other security
(directly or indirectly) for the obligations secured hereby upon
other property in the state in which the Subject Property is
located (whether or not such property is owned by the Grantor or by
others) or (c) both the circumstances described in clauses (a) and
(b) shall be true, then to the fullest extent permitted by law, the
Trustee and the Loan Party may, in their discretion, commence or
consolidate in a single foreclosure action all foreclosure
proceedings against all such collateral securing the Obligations
(including the Subject Property), which action may be brought or
consolidated in the courts of any county in which any of such
collateral is located. The Grantor acknowledges that the right to
maintain a consolidated foreclosure action is a specific inducement
to the Loan Party to extend the Obligations, and the Grantor
expressly and irrevocably waives any objections to the commencement
or consolidation of the foreclosure proceedings in a single action
and any objections to the laying of venue or based on the grounds
of forum non conveniens which it may now or hereafter have.
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The Grantor further agrees that if the Trustee or the Loan Party
shall be prosecuting one or more foreclosure or other proceedings
against a portion of the Subject Property or against any collateral
other than the Subject Property, which collateral directly or
indirectly secures the Obligations, or if the Trustee or the Loan
Party shall
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have obtained a judgment of foreclosure and sale or similar
judgment against such collateral, then, whether or not such
proceedings are being maintained or judgments were obtained in or
outside the state in which the Subject Property is located, the
Trustee and the Loan Party may commence or continue foreclosure
proceedings and exercise its other remedies granted in this
instrument against all or any part of the Subject Property and the
Grantor waives any objections to the commencement or continuation
of a foreclosure of this instrument or exercise of any other
remedies hereunder based on such other proceedings or judgments and
waives any right to seek to dismiss, stay, remove, transfer or
consolidate either any action under this instrument or such other
proceedings on such basis. Neither the commencement nor
continuation of proceedings to foreclose this instrument nor the
exercise of any other rights hereunder nor the recovery of any
judgment by the Trustee and the Loan Party in any such proceedings
shall prejudice, limit or preclude the Trustee's and the Loan
Party's rights to commence or continue one or more foreclosure or
other proceedings or obtain a judgment against any other collateral
(either in or outside the state in which the Subject Property is
located) which directly or indirectly secures the obligations
secured hereby. The Grantor hereby waives (i) any objections to the
commencement or continuation of an action to foreclose this Deed of
Trust or exercise of any other remedies hereunder based on any
action being prosecuted or any judgment entered with respect to the
Obligations or any liens or security interests that secure payment
and performance of the Obligations and (ii) any objections to the
commencement of, continuation of, or entry of a judgment in any
such other action based on any action or judgment connected to this
Deed of Trust. The Grantor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other
proceedings or any action under this instrument based on any action
or judgment connected to this instrument. It is expressly
understood and agreed that to the fullest extent permitted by law,
the Trustee may, at its election, cause the sale of all collateral
which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take
such other measures as are appropriate in order to effect the
agreement of the parties to dispose of and administer all
collateral securing the obligations secured hereby (directly or
indirectly) in the most economical and least time-consuming manner.
In case of a foreclosure sale, the Trust Property may be sold, at
the Trustee's election, in one parcel or in more than one parcel
and the Trustee is specifically empowered (without being required
to do so, and in its sole and absolute discretion) to cause
successive sales of portions of the Subject Property to be held.
M. Except as expressly provided in the Operative
Documents, the Trustee and the Loan Party, with the express written
consent of the Grantor, may at any time or from time to time renew
or extend this instrument, or alter or modify the same in any way.
The Trustee may waive any of the terms, covenants or conditions
hereof in whole or in part and may release any portion of the
Subject Property or any other security, and grant such extensions
and indulgences in relation to the obligations secured hereby as
the Loan Party may determine without the consent of any other
Person (including, without limitation, the Grantor) and without any
obligation to give notice of any kind thereto and without in any
manner affecting the priority of the lien hereof on any part of the
Subject Property.
N. If Trustee shall be made a party to or shall intervene
in any action or proceeding, whether in court or before any
governmental agency, affecting the Subject
8
Property or the title thereto or the interest of Trustee under this
instrument, including, without limitation, any form of condemnation
or eminent domain proceeding, Trustee shall be reimbursed by the
Grantor upon demand for all costs, charges and reasonable
attorneys' fees incurred by it in any such case. All such sums
shall be secured hereby, are due and payable within ten (10) days
after demand, and if not paid within ten (10) days after demand,
shall bear interest at the Overdue Rate set forth in the Operative
Documents.
The Trustee shall be under no duty to take any action
hereunder except as expressly required, to perform any act which
would involve it in expense or liability, or to institute or defend
any suit in respect hereof, unless properly indemnified to its
satisfaction. All reasonable expenses, charges, counsel fees and
other disbursements incurred by Trustee from and after the
occurrence of an Event of Default in and about the administration
and execution of the trust created hereby, and the performance of
its duties and powers hereunder shall be secured by this instrument
prior to the indebtedness represented by the Lease and shall bear
interest at the Overdue Rate set forth in the Operative Documents.
The Loan Party, with or without cause, is hereby authorized and
empowered to substitute and appoint, at any time and from time to
time, by an instrument recorded wherever this instrument is
recorded, a trustee in the place of any Trustee hereunder.
The Grantor agrees to indemnify, defend and hold the
Trustee harmless from and against any and all liability, loss,
damage and expense, including reasonable attorneys' fees, which it
may incur by reason of this instrument or by reason of any action
taken by the Trustee hereunder, and from and against any and all
claims and demands whatsoever which may be asserted against the
Trustee by reason of any alleged obligation or undertaking on its
part to perform or discharge any of the terms, covenants or
conditions contained herein, unless caused by the gross negligence
or willful misconduct of the Trustee. Should the Trustee incur any
such liability, loss, damage or expense, the amount thereof,
together with interest thereon at the Overdue Rate set forth in the
Operative Documents, shall be secured by this instrument and shall
be payable by the Grantor to the Trustee within ten (10) days after
demand therefor.
O. Nothing in this instrument shall operate or be
construed to obligate the Trustee or the Loan Party to perform any
obligations of the Grantor contained in any lease of the Subject
Property. This instrument shall not operate to place upon the Loan
Party or the Trustee any responsibility for the operation, control,
care, management or repair of the Subject Property prior to the
Trustee or the Loan Party taking possession thereof, and the
execution of this Deed of Trust by the Grantor shall constitute
conclusive evidence that all responsibility for the operation,
control, care, management and repair of the Subject Property prior
to the Trustee or the Loan Party taking possession thereof is and
shall be that of Grantor.
P. This instrument is given to secure not only existing
indebtedness, but also future advances made pursuant to or as
provided in the Operative Documents, whether
9
such advances are obligatory or to be made at the option of the
Loan Party, or otherwise, to the same extent as if such future
advances were made on the date of execution of this instrument,
although there may be no advance made at the time of execution
hereof, and although there may be no indebtedness outstanding at
the time any advance is made. To the fullest extent permitted by
law, the lien of this instrument shall be valid as to all such
indebtedness, including all revolving credit and future advances,
from the time this instrument is recorded.
SECTION 4. Ratification; Incorporation. Except as specifically
---------------------------
modified hereby, the terms and provisions of the Lease are hereby ratified
and confirmed and remain in full force and effect. The terms of the Lease
(as amended by this Lease Supplement) are by this reference incorporated
herein and made a part hereof.
SECTION 5. Original Lease Supplement. The single executed
-------------------------
original of this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL
EXECUTED COUNTERPART" on the signature page thereof and containing the
receipt of the Agent therefor on or following the signature page thereof
shall be the original executed counterpart of this Lease Supplement (the
"Original Executed Counterpart"). To the extent that this Lease Supplement
-----------------------------
constitutes chattel paper, as such term is defined in the UCC as in effect
in any applicable jurisdiction, no security interest in this Lease
Supplement may be created through the transfer or possession of any
counterpart other than the Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED
-------------
BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA, BUT
EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES OF SUCH STATE,
EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATE
HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO,
WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE IN WHICH SUCH ESTATE IS LOCATED.
SECTION 7. Counterpart Execution. This Lease Supplement may be
---------------------
executed in any number of counterparts and by each of the parties hereto in
separate counterparts, all such counterparts together constituting but one
and the same instrument.
10
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of
the date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in
Arizona as AFG Equity, Limited
Partnership), as the Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
N-1
LEASE SUPPLEMENT
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P., as
the Lessee
By: EDJ Holding Company, Inc.,
a Missouri corporation,
its sole general partner
By:
-------------------------------
Name:
------------------------------
Title:
----------------------------
N-2
LEASE SUPPLEMENT
STATE OF
--------------------------- )
) ss.
COUNTY OF )
--------------------------
The foregoing instrument was acknowledged before me this day
------
of November , 2000, by , the
--------------- ---------------------------------
, of Atlantic Financial Managers, Inc., a
--------------------------------
Texas corporation, general partner of ATLANTIC FINANCIAL GROUP, LTD., a
Texas limited partnership, on behalf of the limited partnership.
---------------------------------
Notary Public
My Commission Expires:
---------------------
STATE OF
--------------------------- )
) ss.
COUNTY OF )
--------------------------
The foregoing instrument was acknowledged before me this day
------
of November , 2000, by , the
---------------- ---------------------------------
, of EDJ Holdings Company, Inc., a
------------------------------
Missouri corporation, general partner of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ & CO., L.P., a
Missouri limited partnership, on behalf of the limited partnership.
---------------------------------
Notary Public
My Commission Expires:
---------------------
N-1
LEASE SUPPLEMENT
Receipt of this original counterpart of the foregoing Lease Supplement is
hereby acknowledged as of the date hereof.
SUNTRUST BANK, as the Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
LEASE SUPPLEMENT
EXHIBIT A
Description of Land
-------------------
[TO BE ADDED]
EXHIBIT B
Schedule of Equipment
---------------------
None