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EXHIBIT 10(iii)A
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MASTER LEASE AND DEVELOPMENT AGREEMENT
Dated as of April 3, 1998
between
ASSET XVI HOLDINGS COMPANY, L.L.C., as Lessor
and
EAGLE USA AIRFREIGHT, INC., as Lessee
-----------------------------------------------
Lease Financing
for Eagle USA Airfreight, Inc.
Corporate Real Estate Program
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TABLE OF CONTENTS
(Master Lease and Development Agreement)
Page
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PRELIMINARY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS; INTERPRETATION . . . . . . . . . . . . . . . 1
ARTICLE II LEASE OF LEASED PROPERTY . . . . . . . . . . . . . . . . . 1
SECTION 2.1 Lease of the Land . . . . . . . . . . . . . . . . 1
SECTION 2.2 Lease of Improvements . . . . . . . . . . . . . . 2
SECTION 2.3 Other Property . . . . . . . . . . . . . . . . . 2
SECTION 2.4 Nature of Transaction . . . . . . . . . . . . . . 3
ARTICLE III CONSTRUCTION AND EQUIPPING OF THE IMPROVEMENTS . . . . . . 3
SECTION 3.1 Construction of Improvements . . . . . . . . . . 3
SECTION 3.2 Completion of Construction . . . . . . . . . . . 3
SECTION 3.3 Permits; Approvals; Storage. . . . . . . . . . . 4
SECTION 3.4 Inspection. . . . . . . . . . . . . . . . . . . . 4
ARTICLE IV RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 4.1 Basic Rent . . . . . . . . . . . . . . . . . . . 4
SECTION 4.2 Supplemental Rent. . . . . . . . . . . . . . . . 6
SECTION 4.3 Method of Payment . . . . . . . . . . . . . . . . 6
SECTION 4.4 Late Payment . . . . . . . . . . . . . . . . . . 7
SECTION 4.5 Net Lease; No Setoff, Etc . . . . . . . . . . . . 7
SECTION 4.6 Lessee to Cooperate with Lessor . . . . . . . . . 8
ARTICLE V CONDITION AND USE OF LEASED PROPERTY . . . . . . . . . . . 8
ARTICLE VI LIENS; EASEMENTS; PARTIAL CONVEYANCES . . . . . . . . . . . . . 9
SECTION 6.1 No Liens . . . . . . . . . . . . . . . . . . . . 9
SECTION 6.2 Easements and Related Conveyances . . . . . . . . 9
ARTICLE VII MAINTENANCE AND REPAIR; ALTERATIONS;
MODIFICATIONS AND ADDITIONS . . . . . . . . . . . . . . . . . . . 10
SECTION 7.1 Maintenance and Repair; Compliance With Law . . . 10
SECTION 7.2 Alterations . . . . . . . . . . . . . . . . . . . 11
SECTION 7.3 Title to Alterations. . . . . . . . . . . . . . . 12
ARTICLE VIII USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE IX INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 9.1 Insurance Coverages . . . . . . . . . . . . . . . 12
SECTION 9.2 Liability Insurance . . . . . . . . . . . . . . . 13
SECTION 9.3 Policies . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.4 Loss Payee Provisions . . . . . . . . . . . . . . 14
SECTION 9.5 Other Insurance . . . . . . . . . . . . . . . . . 14
SECTION 9.6 Loss Deductibles . . . . . . . . . . . . . . . . 14
ARTICLE X ASSIGNMENT AND SUBLEASING . . . . . . . . . . . . . . . . 15
ARTICLE XI LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE . . . . . . . . . . . 15
SECTION 11.1 Event of Loss . . . . . . . . . . . . . . . . . . 15
SECTION 11.2 Event of Taking . . . . . . . . . . . . . . . . . 16
SECTION 11.3 Casualty . . . . . . . . . . . . . . . . . . . . 17
SECTION 11.4 Condemnation . . . . . . . . . . . . . . . . . . 17
SECTION 11.5 Verification of Restoration and Rebuilding . . . 18
SECTION 11.6 Application of Payments . . . . . . . . . . . . . 18
SECTION 11.7 Prosecution of Awards . . . . . . . . . . . . . . 19
SECTION 11.8 Application of Certain Payments
Not Relating to an Event of Taking . . . . . . . 19
SECTION 11.9 Other Dispositions . . . . . . . . . . . . . . . 19
SECTION 11.10 No Rent Abatement . . . . . . . . . . . . . . . . 20
ARTICLE XII INTEREST CONVEYED TO LESSEE . . . . . . . . . . . . . . . . . . 20
ARTICLE XIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XIV ENFORCEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 14.1 Remedies . . . . . . . . . . . . . . . . . . . . 22
SECTION 14.2 Remedies Cumulative; No Waiver; Consents . . . . 24
ARTICLE XV SALE, RETURN OR PURCHASE OF LEASED PROPERTY . . . . . . . . . . 25
SECTION 15.1 Lessee's Option to Purchase . . . . . . . . . . . 25
SECTION 15.2 Purchase Obligation . . . . . . . . . . . . . . . 25
SECTION 15.3 Acceleration of Purchase Obligation . . . . . . . 26
SECTION 15.4 Determination of Purchase Price . . . . . . . . . 26
SECTION 15.5 Purchase Procedure . . . . . . . . . . . . . . . 26
SECTION 15.6 Option to Remarket . . . . . . . . . . . . . . . 27
SECTION 15.7 Rejection of Sale . . . . . . . . . . . . . . . . 30
SECTION 15.8 Return of Leased Property . . . . . . . . . . . . 31
SECTION 15.9 Effect of Conveyance to Lessee . . . . . . . . . 32
ARTICLE XVI LESSEE'S EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . 32
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ARTICLE XVII RIGHT TO PERFORM FOR LESSEE . . . . . . . . . . . . . . . . . 33
ARTICLE XVIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 18.1 Reports . . . . . . . . . . . . . . . . . . . . . 33
SECTION 18.2 Binding Effect; Successors and Assigns . . . . . 33
SECTION 18.3 Quiet Enjoyment . . . . . . . . . . . . . . . . . 33
SECTION 18.4 Notices . . . . . . . . . . . . . . . . . . . . . 34
SECTION 18.5 Severability . . . . . . . . . . . . . . . . . . 34
SECTION 18.6 Amendment; Complete Agreements . . . . . . . . . 34
SECTION 18.7 Construction. . . . . . . . . . . . . . . . . . . 34
SECTION 18.8 Headings . . . . . . . . . . . . . . . . . . . . 34
SECTION 18.9 Counterparts . . . . . . . . . . . . . . . . . . 34
SECTION 18.10 Governing Law . . . . . . . . . . . . . . . . . . 35
SECTION 18.11 Discharge of Lessee's Obligations
by its Affiliates . . . . . . . . . . . . . . . . 35
SECTION 18.12 Liability of Lessor Limited . . . . . . . . . . . 35
SECTION 18.13 Estoppel Certificates . . . . . . . . . . . . . . 35
SECTION 18.14 No Joint Venture . . . . . . . . . . . . . . . . 36
SECTION 18.15 No Accord and Satisfaction . . . . . . . . . . . 36
SECTION 18.16 No Merger . . . . . . . . . . . . . . . . . . . . 36
SECTION 18.17 Survival . . . . . . . . . . . . . . . . . . . . 36
SECTION 18.18 Chattel Paper . . . . . . . . . . . . . . . . . . 36
SECTION 18.19 Time of Essence . . . . . . . . . . . . . . . . . 37
SECTION 18.20 Recordation of Lease . . . . . . . . . . . . . . 37
SECTION 18.21 Investment of Security Funds . . . . . . . . . . 37
SECTION 18.22 No Illegal Interest to be Charged . . . . . . . . 37
APPENDIX I Definitions and Interpretation
APPENDIX II Form of Parcel Lease Supplement
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MASTER LEASE AND DEVELOPMENT AGREEMENT
THIS MASTER LEASE AND DEVELOPMENT AGREEMENT (this "Lease"), dated as
of April 3, 1998, is between ASSET XVI HOLDINGS COMPANY, L.L.C., a
Massachusetts limited liability company, as Lessor, and EAGLE USA AIRFREIGHT,
INC., a Texas corporation, as Lessee.
PRELIMINARY STATEMENT
In accordance with and subject to the terms and provisions of this
Lease and the other Operative Documents, (i) the Lessor has agreed to acquire
Parcels of the Land pursuant to Parcel Lease Supplements as hereinafter
provided, (ii) the Lessor has agreed to lease Parcels of the Land to the
Lessee, (iii) to the extent not otherwise improved to meet the Lessee's needs,
the Lessee has agreed to develop and construct Improvements thereon, (iv) the
Lessor has agreed to lease and demise the Improvements to the Lessee and the
Lessee has agreed to rent and hire the Improvements from the Lessor as part of
the Leased Property, (v) the Lessor and the Lessee wish to obtain, and the
Lender has agreed to provide, a Loan in an amount up to the Loan Commitment for
the payment of Property Costs in connection with the acquisition of the Land
and the Construction of the Improvements, and (vi) Lessor has agreed to make
Contribution Advances from its own equity resources in an amount up to the
Equity Commitment to pay a portion of the Property Costs in connection with the
construction of the Improvements.
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Lease and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix I
hereto for all purposes hereof and the rules of interpretation set forth in
Appendix I hereto shall apply to this Lease.
ARTICLE II
LEASE OF LEASED PROPERTY
SECTION 2.1 Lease of the Land. Prior to the Completion Deadline,
Lessee, as agent for the Lessor, shall identify, purchase and acquire on behalf
and in the name of Lessor, title in fee simple, or by leasehold estate, in and
to one or more Parcels of the Land, subject only to Permitted Liens, as
follows:
(a) Lessee shall prepare and submit to the Lessor and the Lender
counterparts of an appropriately completed Parcel Lease Supplement
substantially in the form of Appendix II hereto,
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with all blanks appropriately completed, for each such Parcel of the Land, and
counterparts of the related Operative Documents or supplemental Operative
Documents for each such Parcel the execution and delivery of which are required
to satisfy the Parcel Conditions with respect to such Parcel, each duly signed
and acknowledged, where appropriate, by the Lessee, ready for execution.
(b) Lessee shall simultaneously deliver to the Lessor and the
Lender evidence of the satisfaction of the Parcel Conditions for such Parcel in
Section 3.2 of the Participation Agreement.
(c) Lessor and the Lender, respectively, shall thereupon cause the
Parcel Lease Supplement and the related Operative Documents and supplemental
Operative Documents for such Parcel to which the Lessor or the Lender,
respectively, are a party, to be signed by their respective duly authorized
officers and, where requested by the Lessee, to cause such documents to be
acknowledged, signed by subscribing witnesses, or otherwise executed with the
formalities necessary for such documents to be duly recorded in the appropriate
land records of the County or other municipality where such Parcel is located.
(d) Not less than three Business Days prior to the related Parcel
Closing Date, Lessee shall submit a Funding Requisition in the amount of the
purchase price and other costs of acquisition of such Parcel, including without
limitation, the cost of recording, in the name and on behalf of Lessor the Deed
therefor.
(e) Pursuant to each Parcel Lease Supplement, the Lessor shall and
hereby does demise and lease its interest in and to each such Parcel of the
Land to the Lessee, and the Lessee shall, and hereby does, rent and lease such
Parcel of the Land from the Lessor, upon and subject to the terms and
conditions of this Lease, the Participation Agreement and each of the Operative
Documents, including the supplements thereto.
SECTION 2.2 Lease of Improvements. Lessor hereby demises and
leases Lessor's interest in the Improvements (whether or not the Construction
thereof has been completed) to Lessee, and Lessee hereby rents and leases
Lessor's interest in the Improvements (whether or not the Construction thereof
has been completed) from Lessor, for the Lease Term. The demise and lease of
the Improvements pursuant to this Section shall include any additional right,
title or interest in the Improvements which may at any time be acquired by
Lessor, whether in connection with the Construction of such Improvement on an
additional Parcel of the Land, as the result of an Alteration, or otherwise,
the intent being that all right, title and interest of Lessor in and to all of
the Improvements whenever constructed, and wherever located, shall at all times
be demised and leased hereunder.
SECTION 2.3 Other Property. Lessee may from time to time own or
hold under lease from Persons other than Lessor, furniture, trade fixtures and
equipment located on or about the Leased Property which is not subject to this
Lease.
SECTION 2.4 Nature of Transaction. It is the intent of the
parties hereto that: (a) for Federal, State and local income tax purposes, this
Lease shall be treated as the repayment and
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security provisions of a loan by Lessor to Lessee, and that Lessee shall be
treated as the legal and beneficial owner entitled to any and all benefits of
ownership of the Leased Property or any part thereof; and that all payments of
Basic Rent during the Lease Term shall be treated as payments of interest and
principal, as the case may be, in respect of such loan; (b) if a bankruptcy
court or other court of competent jurisdiction shall at any time determine that
the transactions represented by this Lease and the other Operative Documents
either (i) do not constitute a true leasing transaction or (ii) shall be
treated as a financing or other transaction, then in any such event, this Lease
shall be treated as a deed of trust and security agreement, mortgage and
security agreement or other similar instrument with a power of sale from
Lessee, as mortgagor to Lessor for the benefit of the Lender, as mortgagee,
encumbering the Leased Property, and the payment by Lessee of the Basic Rent
(other than Scheduled Rent) shall be treated as payments of interest and the
payment of Lessee of Scheduled Rent and any other amounts in respect of the
Lease Balance shall be treated as repayments of principal (all such payments
are obligatory and shall, to the fullest extent permitted by law, have priority
over any and all mechanics' liens and other liens and encumbrances arising
after the respective Memorandum of Lease is recorded); and (c) the Mortgages
upon each Parcel, and the Assignment of Lease and Rents will create a lien and
security interest in the Collateral (as defined in the Mortgages) and this
Lease, subject to certain limited exceptions.
ARTICLE III
CONSTRUCTION AND EQUIPPING OF THE IMPROVEMENTS
SECTION 3.1 Construction of Improvements. In the event that a
Parcel Lease Supplement provides for Improvements to be constructed by Lessee
for the account of the Lessor on the related Parcel, Lessee shall, for the
benefit of Lessor, cause the Construction of the Improvements to be commenced
on such Parcel following the Parcel Closing Date, and to cause such
Construction to be performed and completed by the General Contractor therefor
in general conformance with and pursuant to the Construction Contract therefor.
Until the Construction is completed, the portions of the Improvements under
construction shall, and upon completion of Construction the completed
Improvements shall, be a part of the Leased Property.
SECTION 3.2 Completion of Construction. Lessee shall endeavor to
achieve satisfactory performance from each General Contractor under each
Construction Contract. Lessee shall cause the Construction of all Improvements
to occur on or prior to the related Completion Deadline. Lessee may make
changes to the Plans and Specifications, shall review requests for changes,
shall negotiate proposals for changes made by the General Contractor and shall
prepare and sign change orders. Lessee shall develop and implement procedures
for the review and processing of applications by the General Contractor,
subcontractors, materialmen and other Persons involved in the Construction for
progress and final payments, and shall provide to Lessor such certifications
for payment as are required under the Participation Agreement. Lessee's
obligations under this Section shall not be diminished or affected by any
insufficiency of the proceeds of the Loan, or the amount of the Contribution,
or as the result of the costs of acquisition of the Land or the Construction of
the Improvements or any part thereof exceeding amounts received as Loan
Advances or Contribution Advances from the Lender or the Lessor. In the event
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that Property Costs which are due and payable exceed the aggregate amount of
Loan Advances and Contribution Advances, such excess shall be paid by Lessee
from Lessee's own funds.
SECTION 3.3 Permits; Approvals; Storage. Lessee shall be
responsible for obtaining or causing each General Contractor to obtain all
applicable zoning, wetlands, subdivision, building and other permits for the
Construction, and shall also be responsible for obtaining or causing each
General Contractor to obtain all other approvals from authorities having
jurisdiction over the Construction, the Land or the Improvements. Lessee shall
monitor the progress of the Construction. Lessee shall arrange for the
delivery and storage, protection and security of materials, systems and
equipment which are to be incorporated into the Improvements until such items
are incorporated into the Improvements.
SECTION 3.4 Inspection. At any time upon three (3) Business Days
prior notice to Lessee, Lessor, the Lender and their authorized
representatives, at their sole risk, may inspect the Leased Property and the
books and records of Lessee relating to the Leased Property and make copies and
abstracts therefrom. All reasonable and documented out-of-pocket costs of such
inspection incurred by Lessor or Lender shall be paid by Lessee promptly after
receipt by Lessee of a written request for such payment. No inspection shall
unreasonably interfere with 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 not making any such
inspection or inquiry. None of the inspecting parties shall incur any
liability or obligation by reason of making any such inspection or inquiry
unless and to the extent such inspecting party, during the course of such
inspection, causes damage to either the Leased Property, any property of Lessee
or any property of any other Person or injury to a Person, whereupon, provided
that the Lessee shall not have been negligent or acted intentionally or with
gross recklessness, such inspecting party shall be liable for any such damage
or injury, as may be applicable, shall indemnify and hold Lessee harmless from
and against all claims, losses and liability as to such damage or injury.
ARTICLE IV
RENT
SECTION 4.1 (a) Basic Rent. The first Rent Payment Date for
each Property shall be the first Loan Payment Date which next follows the
earlier to occur of the Parcel Completion Date for such Property or the related
Completion Deadline, as the case may be, and beginning on that date, Lessee
shall commence making payments of Basic Rent with respect to such Property to
Lessor in installments payable in arrears on each Rent Payment Date and on any
date (if not a Rent Payment Date) which is the Lease Termination Date.
Notwithstanding the foregoing, the Lessee shall pay no Basic Rent with respect
to any Property for the period from the related Parcel Closing Date to and
including the earlier to occur of the related Parcel Completion Date or the
related Completion Deadline. On each Rent Payment Date, Lessee shall pay the
installment of Basic Rent then due and payable pursuant to this Lease and all
Parcel Lease Supplements then in force. Basic Rent shall equal the sum of all
installments of the Facility Rent, the Index Rent and the Scheduled Rent
payable with respect to each Property and shall be payable in the respective
amounts set forth
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below and in each Parcel Lease Supplement. In addition, Basic Rent shall be
payable on the related Parcel Completion Date in certain circumstances as set
forth below.
(b) Facility Rent. On each Rent Payment Date, the Lessee
shall, until (i) the total Lease Balance shall be paid in full on the Lease
Termination Date, or (ii) the payment by Lessee of the Recourse Deficiency
Amount on the Scheduled Termination Date and the fulfillment of the provisions
of clauses (i) through (xiii) of Section 15.6, pay installments of Facility
Rent in respect of each Property in arrears with respect to the period elapsed
since, in the case of the first Rent Payment Date for such Property, the
related Parcel Completion Date, and in the case of each subsequent Rent Payment
Date, the immediately preceding Rent Payment Date, and each such installment
shall be in an amount which equals the Contribution Return accrued and unpaid
in respect of the Parcel Contribution Tranche for such Property. In addition,
the Lessee agrees to pay as Facility Rent (i) on the Final Completion Date, all
accrued and unpaid Contribution Return, if any, which shall not have been added
to the balance of the Contribution in accordance with Section 2.2(d) of the
Participation Agreement as the result of the total funding of the Equity
Commitment, and (ii) an amount equal to the Lessor's Breakage Costs in the
event of the imposition of such Lessor's Breakage Costs.
(c) Index Rent. On the Final Completion Date, the Lessee
shall pay as Index Rent an amount equal to the sum of all interest accrued and
unpaid on the Loan for which a Loan Advance shall not have been made pursuant
to Section 2.2(c) of the Participation Agreement on or prior to such date as
the result of the prior total funding of the Loan Commitment. On each Rent
Payment Date on which Basic Rent is payable, the Lessee shall pay as Index Rent
for each Property an amount equal to the sum of all interest accrued and unpaid
with respect to the Parcel Tranche for such Property.
(d) Scheduled Rent. On each Rent Payment Date, Lessee
shall pay the installment of Scheduled Rent for each Property, if any, then due
and payable. There shall be attached to each Parcel Lease Supplement as
Appendix II a schedule of the respective installments of Scheduled Rent due and
payable on each Rent Payment Date with respect to the related Property. It is
the intention of the parties hereto and the Lender that the respective
installments of Scheduled Rent set forth on all such schedules of Scheduled
Rent shall be in an aggregate amount sufficient (but not in excess) to pay
required payments of principal on the Loan and the Note, and the proceeds of
each such installment shall be applied by the Lender in reduction of the Parcel
Tranche for the related Property; provided, however, that the Lessee, in order
to avoid Breakage Costs, hereby directs the Lender to deposit payments of
Scheduled Rent in the Reinvestment Account maintained pursuant to Section 3.7
of the Loan Agreement for payment of principal on the Rent Payment Date at the
end of the Interest Period; provided, further, that until amounts in the
Reinvestment Account shall be applied to pay the Loan, interest will continue
to accrue with respect to 100% of the principal balance of the Loan without any
setoff or deduction relating to the amounts so deposited. The parties hereto
agree to adjust the schedule of Scheduled Rent set forth in each such Appendix
II to the extent necessary to reflect the actual outstanding principal amount
of the Loan, in the event of (i) a partial prepayment of the Loan, or (ii) that
the aggregate total of the Loan Advances made under the Loan as of the
Completion Deadline equals less than the Loan Commitment. Any such
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adjustment shall be made (i) in the case of a partial prepayment, by
multiplying the remaining unpaid installments of Scheduled Rent on by a
fraction, the numerator of which is the aggregate total of Loan Advances made
under the Loan less the amount of principal prepaid on the Loan, and the
denominator of which is the amount of the Loan Commitment, and (ii) in the
event that the aggregate total of Loan Advances equals less than the Loan
Commitment as of the Completion Date, by multiplying each of the installments
of Scheduled Rent as set forth on each such Appendix II by a fraction, the
numerator of which is the aggregate total of Loan Advances under the Loan, and
the denominator of which is the Loan Commitment. Notwithstanding the
foregoing, on the Scheduled Termination Date, the Lessee shall pay an amount
equal to the Recourse Deficiency Amount or the Lease Balance, as the case may
be, in accordance with the provisions of Article XV hereof, in addition to the
installment of Scheduled Rent due hereunder.
SECTION 4.2 Supplemental Rent. Lessee shall pay to Lessor, or to
whomever shall be entitled thereto as expressly provided herein or in any other
Operative Document or in the Facilitation Agreement dated the date hereof
between the Lessee, the Lessor and JH Management Corporation (the "Facilitation
Agreement"), any and all Supplemental Rent promptly as the same shall become
due and payable. In particular, the Lessee agrees to pay to the Lessor or its
designee as Supplemental Rent (i) on the Closing Date and on July 1st of each
succeeding year during the Lease Term, the annual Facilitation Fee in the sum
of $__________, (ii) amounts necessary to reimburse Lessor for reasonable legal
fees and expenses in connection with the transaction contemplated by the
Operative Documents; and (iii) such other amounts as Lessor and Lessee shall
mutually agree upon. In the event of any failure on the part of Lessee to pay
any Supplemental Rent, which failure constitutes an Event of Default, Lessor
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 shall be payable in the type of funds
and in the manner set forth in Section 4.3.
SECTION 4.3 Method of Payment. All Basic Rent shall be paid by
the Lessee directly to the Lender. Supplemental Rent (including amounts due
under Article XV hereof) shall be paid to Lessor (or to such Person as may be
entitled thereto) or, in each case, to such Person as Lessor (or such other
Person) shall specify in writing to Lessee, and at such place as Lessor (or
such other Person) shall specify in writing to Lessee, which specifications by
Lessor shall be given by Lessor at least ten Business Days prior to the due
date therefor. Each payment of Rent (including all payments under Article XV
hereof) shall be made by Lessee prior to 10:00 a.m. Houston, Texas time on the
date due, 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 4.4 Late Payment. If any Rent (other than Supplemental
Rent payable by reason of this Section) shall not be paid when due, Lessee
shall pay to Lessor, 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.
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SECTION 4.5 Net Lease; No Setoff, Etc. This Lease is a net lease
and, notwithstanding any other provision of this Lease, Lessee shall pay all
Basic Rent and Supplemental Rent, and all costs, charges, taxes, assessments
and other expenses (foreseen or unforeseen) for which Lessee or any Indemnitee
is or shall become liable by reason of 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, installation, possession, use, occupancy,
maintenance, ownership, leasing, repairs and rebuilding of, or addition to, the
Leased Property or any portion thereof, including, without limitation, the
Construction or the financing of the Construction and any other amounts payable
hereunder shall be paid, without counterclaim, setoff, deduction or defense and
without abatement, suspension, deferment, diminution or reduction, and Lessee's
obligation to pay all such amounts throughout the Lease Term is absolute and
unconditional. The obligations and liabilities of Lessee hereunder shall in no
way be released, discharged or otherwise affected for any reason, including
without limitation (i) 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 Law, including any
inability to occupy or use the Leased Property by reason of such
non-compliance, (ii) 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, (iii) any
restriction, prevention or curtailment of or interference with any use of the
Leased Property or any part thereof including eviction, (iv) any defect in
title to or rights to the Leased Property or any Lien on such title or rights
or on the Leased Property, (v) any change, waiver, extension, indulgence or
other action or omission or breach in respect of any obligation or liability of
any Person requested or consented to by Lessee, (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation
or other like proceedings relating to Lessee, Lessor, the Lender or any other
Person, or any action taken with respect to this Lease by any trustee or
receiver of Lessee, Lessor, the Lender or any other Person, or by any court, in
any such proceeding, (vii) 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 where such failure was caused by Lessee's failure to
perform its obligations under the Operative Documents, (viii) any disaffirmance
of this Lease or any provision hereof or any of the other Operative Documents
or any provision of any thereof by Lessee, (ix) any action by any court,
administrative agency or other Governmental Authority, (x) any restriction,
prevention or curtailment of or interference with the Construction or any use
of the Leased Property or any part thereof or (xi) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing, whether or not
either Lessee shall have notice or knowledge of any of the foregoing. Except
as specifically set forth in Articles XV or XI of this Lease, this Lease shall
be noncancellable by Lessee for any reason whatsoever and 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 Lessee hereunder. Lessee
assumes the sole responsibility for the condition, use, operation, maintenance,
and management of the Leased Property and Lessor shall have no responsibility
in respect thereof and shall have no liability for damage to the property of
either Lessee or any subtenant of Lessee on any account or for any reason
whatsoever other than by reason of Lessor's willful misconduct or breach of any
of its express obligations under any Operative Document.
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SECTION 4.6 Lessee to Cooperate with Lessor. The Lessee hereby
agrees to use its best efforts to supply Lessor with all such information
necessary in order for Lessor to maintain its books and accounts and prepare
all required federal, state and local tax returns.
ARTICLE V
CONDITION AND USE OF LEASED PROPERTY
During the Lease Term, Lessor's interest in the Improvements (whether
or not completed) and the Land is demised and let by Lessor "AS IS" and that
Lessor's interest is subject to, among other things, (i) the rights of any
parties in possession thereof, (ii) the state of the title thereto existing at
the time Lessor acquired its interest in the Leased Property, (iii) any state
of facts which an accurate survey or physical inspection might show (including
each survey delivered on each Parcel Closing Date), (iv) all Applicable Law and
(v) any violations of Applicable Law which may exist upon or subsequent to the
commencement of the Lease Term. LESSEE ACKNOWLEDGES THAT, ALTHOUGH LESSOR WILL
OWN AND HOLD TITLE TO THE LEASED PROPERTY, LESSEE IS SOLELY RESPONSIBLE FOR THE
DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE IMPROVEMENTS AND ANY
ALTERATIONS. NEITHER LESSOR NOR THE LENDER HAVE 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 LESSOR
NOR THE 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 Lessor hereby represents and warrants that the
Leased Property shall at all times remain free of Lessor Liens. As between
Lessor and Lessee, Lessee shall be afforded full opportunity to inspect the
related Parcel prior to each Parcel Closing Date, and shall enter into each
Parcel Lease Supplement 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 Lessor or the Lender, on the one hand, and
Lessee, on the other, are to be borne by Lessee. The provisions of this
Article have been negotiated and, except to the extent otherwise expressly
stated, the foregoing provisions are intended to be a complete exclusion and
negation of any representations or warranties by Lessor or the Lender, express
or implied, with respect to the Leased Property that may arise pursuant to any
law now or hereafter in effect or otherwise.
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ARTICLE VI
LIENS; EASEMENTS; PARTIAL CONVEYANCES
SECTION 6.1 No Liens. Commencing on each Parcel Completion Date
and thereafter, Lessee shall not directly or indirectly create, incur or
assume, any Lien on or with respect to the related Parcel of the Leased
Property, the Construction, 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 Lessee, or any of its
contractors or agents or by reason of the financing of any personalty or
equipment purchased or leased by Lessee or Alterations constructed by Lessee,
except in all cases Permitted Liens.
SECTION 6.2 Easements and Related Conveyances. Notwithstanding
Section 6.1, at the request of Lessee, Lessor shall, from time to time during
the Lease Term and upon reasonable advance written notice from Lessee 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 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, the Improvements or any portion thereof, (iii) dedication or transfer of
portions of the Land, not improved with a 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, the
Improvements 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 any variance from
zoning or other governmental requirements. 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 Lessee, and Lessee shall pay all reasonable and documented out-of-pocket
costs of Lessor in connection therewith (including, without limitation, the
reasonable and documented fees of attorneys, architects, engineers, planners,
appraisers and other professionals reasonably retained by Lessor in connection
with any such action);
(b) Lessee shall have delivered to Lessor a certificate
of a Responsible Officer of Lessee stating that (1) such action will not cause
the Land, the Improvements or any portion thereof to fail to comply in any
respect with the provisions of this Lease or any other Operative Documents or
in any respect with Applicable Law and (2) such action will not materially
reduce the Fair Market Sales Value of the Land or the Improvements nor Lessor's
interest therein;
(c) all consideration received in connection with such
action (net of all reasonable out-of-pocket expenses incurred by Lessee in
connection therewith) shall be paid to Lender within thirty (30) Business Days
following receipt thereof and shall constitute a Qualified Payment (to the
extent consistent with the definition thereof) and be applied to reduce the
Loan; and
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(d) in the case of any release or conveyance, if Lessor
so requests and to the extent available without undue expense, Lessee will
cause to be issued and delivered to Lessor by the Title Insurance Company an
indorsement to the related 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 related 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 related Title Policy has been released or conveyed by Lessor.
ARTICLE VII
MAINTENANCE AND REPAIR;
ALTERATIONS; MODIFICATIONS AND ADDITIONS
SECTION 7.1 Maintenance and Repair; Compliance With Law. Lessee,
at its own expense, shall after each Parcel Closing Date with respect to each
Parcel (i) maintain the Leased Property in good repair and condition (subject
to ordinary wear and tear), in accordance with prudent industry standards and,
in any event, in no less a manner as other similar facilities owned or leased
by Lessee, (ii) 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 with, all
Applicable Laws and (iii) 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 (i) and
(ii). Lessee shall perform the foregoing maintenance obligations regardless of
whether the Leased Property is occupied or unoccupied. Lessee waives any right
that it may now have or hereafter acquire to (i) require Lessor to maintain,
repair, replace, alter, remove or rebuild all or any part of the Leased
Property or (ii) make repairs at the expense of Lessor pursuant to any
Applicable Law or other agreements or otherwise. Lessor shall not be liable to
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. Lessor shall not be required to
maintain, alter, repair, rebuild or replace the Leased Property in any way.
SECTION 7.2 Alterations. The Lessee shall have the right, at any
time and from time to time, to make such Alterations, structural or otherwise,
to the Leased Property as the Lessee shall deem necessary or desirable, subject
to the following conditions:
(a) No Alterations shall be undertaken until the Lessee
shall have procured and paid for, so far as the same may be required
from time to time, all required municipal and other governmental
permits and authorizations of the various municipal departments and
governmental subdivisions having jurisdiction, and the Lessor, at the
Lessee's expense, shall join in the application for such permits or
authorizations whenever such action is necessary;
(b) Any structural Alterations, or any Alterations
undertaken as a single project and involving an estimated cost
aggregating more than $200,000,
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shall, if requested by the Lender, be conducted under the supervision
of an architect or engineer licensed as such in the State; selected by
the Lessee and reasonably acceptable to the Lender, and no such work
shall be undertaken until preliminary plans and outline specifications
and budget estimates therefor, prepared and approved in writing by
such architect or engineer, stating that the same comply with the
provisions of this Article, shall have been submitted to and approved
by the Lessor and the Lender, which approval shall be deemed to have
been given if no notice of disapproval of the same is given by either
of Lessor or Lender within ten (10) Business Days after receipt of the
foregoing items for approval in accordance with Section 7.2(b);
(c) All Alterations will comply in all respects with the
provisions of the Operative Documents and shall be of such a character
that, when completed, the Fair Market Sales Value of the Improvements
shall be not less than the Fair Market Sales Value of the Improvements
immediately before any such Alterations.
(d) All work done in connection with any Alterations
shall be done in a good and workmanlike manner and in compliance with
applicable building and zoning laws and with all other Applicable
Laws; the cost of any such Alterations shall be paid in cash or its
equivalent, so that the Leased Property shall at all times be free of
Liens for labor and materials supplied or claimed to have been
supplied (other than inchoate liens or liens bonded off in accordance
with Applicable Law and with Lender's consent); and the work of any
Alterations shall be prosecuted with reasonable dispatch, unavoidable
delays excepted;
(e) Worker's compensation insurance covering all persons
employed in connection therewith and with respect to whom death or
bodily injury claims could be asserted against the Lessor, the Lender
or the Lessee or the Leased Property and general liability and
property damage insurance (which may be effected by indorsement, if
obtainable, on the insurance required to be carried pursuant to
Section 9.2) for the mutual benefit of the Lessor, the Lender or the
Lessee with limits of not less than those required to be carried
pursuant to said Section 9.2 shall be maintained by the Lessee at all
times when any work is in process in connection with any Alterations.
SECTION 7.3 Title to Alterations. Title to all Alterations shall
without further act vest in Lessor (subject to Lessee's right to remove trade
fixtures, personal property and equipment which were not acquired with funds
advanced by Lessor or Lender) and shall be deemed to constitute a part of the
Leased Property and be subject to this Lease.
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ARTICLE VIII
USE
Lessee shall use the Leased Property or any part thereof only for the
purpose of warehouse and distribution purposes and related office uses, and
such other uses that may be available under the zoning applicable to the Land
or any applicable part thereof from time to time.
ARTICLE IX
INSURANCE
SECTION 9.1 Insurance Coverages. At all times (except as
otherwise indicated) the Lessee, at its sole cost and expense, shall keep the
Improvements insured for the mutual benefit of the Lender, Lessor and Lessee
against:
(a) loss or damage by fire, and such other risks as may
be included in the so-called "All Risk" form of insurance providing
coverage against all risks of physical loss, in an amount satisfactory
to Lender, but in any event not less than the then Full Replacement
Cost of the Improvements;
(b) loss or damage from leakage of sprinkler systems now
or hereafter installed in the Improvements, in such amount as Lender
may reasonably require;
(c) loss of rental from the Improvements, under a rental
value insurance policy indorsement or policy provision 9.2 covering
risk of loss due to any of the hazards described in clauses (a) and (b)
of this Section 9.1 in an amount not less than the aggregate
requirements for the period of 12 months following the occurrence of
the insured casualty for Basic Rent and Supplemental Rent;
(d) loss or damage by explosion of high pressure steam
boilers, air conditioning equipment, pressure vessels, motors or
similar apparatus, now or hereafter installed in the Improvements in
such limits with respect to any one accident as may reasonably be
required by Lender from time to time, but not less than $100,000;
(e) flood hazard coverage, if available under any
applicable federal flood insurance program, in an amount reasonably
satisfactory to Lender;
(f) during the Construction and at any time during which
any part of the Improvements or any Alteration are under construction,
and as to any part of the Improvements or any Alteration under
construction, builder's risk coverage under a so-called "all risk"
non- reporting completed value form of policy; and
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(g) such other hazards and in such amounts as Lender may
reasonably require provided that such insurance is then customarily
maintained with respect to similar properties in the State in which
such Improvements are located.
The term "Full Replacement Cost" shall mean the actual replacement cost of the
Improvements (excluding foundation and excavation costs) without physical
depreciation. Full Replacement Cost shall be determined at the request of
Lender by an architect, appraiser, appraisal company or one of the insurers,
selected and paid by the Lessee and reasonably acceptable to Lender, but such
determination shall not be required to be made more frequently than once every
24 months.
SECTION 9.2 Liability Insurance. The Lessee shall also maintain
insurance for the mutual benefit of the Lessor, the Lender, each other
Indemnitee, and the Lessee against claims for bodily injury or property damage,
under a policy of commercial general liability insurance, with such limits as
may reasonably be required by the Lessor or the Lender from time to time, but
not less than $1,000,000 per occurrence, with excess umbrella liability
coverage of not less than $5,000,000 per occurrence.
SECTION 9.3 Policies. All insurance provided for under this
Lease shall be effected under valid enforceable policies issued by insurers of
recognized responsibility and acceptable to the Lessor and the Lender. Upon
the execution of this Lease, the Lessee shall deliver to the Lender and the
Lessor original certificates of such insurance and copies of such policies in
form reasonably satisfactory to the Lender. At least 30 days prior to the
expiration date of any policy, a copy of the renewal policy for such insurance
shall be delivered by the Lessee to the Lessor and the Lender, and certificates
thereof in form reasonably satisfactory to the Lender shall be delivered as
aforesaid, together with satisfactory evidence of payment of the premium
thereon. All policies referred to in Section 9.1 shall contain agreements by
the insurers that (i) any loss shall be payable to the Lessor and the Lender,
notwithstanding any act or negligence of the Lessee which might otherwise
result in forfeiture of said insurance, (ii) such policies shall not be
canceled except upon 30 days' prior written notice to each named insured and
loss payee, (iii) the coverage afforded thereby shall not be affected by the
performance of any work in or about the Leased Property and (iv) waiving all
rights of subrogation against the Lessor, Lender, Lessee and their respective
officers, employees, directors, incorporates, shareholders and agents.
SECTION 9.4 Loss Payee Provisions. The rental value policy
referred to in Section 9.1 (c) shall name Lender as the loss-payee thereunder.
Upon the receipt of same, the Lender shall apply the proceeds of such rental
value insurance paid to it first to the payment of Basic Rent and then to the
payment of taxes, insurance premiums and other items of Supplemental Rent
becoming due during the rebuilding and restoration of the Leased Property, and
any balance of such proceeds after the completion of such rebuilding and
restoration shall be paid to Lessee. Except as provided above in this Section
9.4, all policies of insurance required herein shall name the Lender, Lessor,
and Lessee as the insureds as their respective interests may appear. Subject
to the provisions and limitations of this Section, all policies referred to in
Section 9.1 shall also provide for any loss to be payable to Lender as its
interest may appear, pursuant to a standard mortgagee clause or indorsement.
The loss, if any, under the policies referred to in Section 9.1 shall be
adjusted with the
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insurance companies by the Lessee except that no loss shall be adjusted without
the prior written approval of the Lender. The loss, if any, under all policies
referred to in Section 9.1 shall be payable to the Lender. All such policies
shall expressly provide that loss thereunder shall be adjusted and paid as
provided in this Section. Any loss paid to the Lessee under any insurance
policy referred to in Section 9.1 shall be held by the Lessee in trust for
application to the cost of restoring, repairing, replacing or rebuilding the
Improvements. Any loss paid to the Lender shall be disbursed by it in
accordance with the provisions of Section 11.6 of this Lease.
SECTION 9.5 Other Insurance. Nothing in this Article shall
prevent the Lessee from taking out insurance of the kind and in the amounts
provided for under Section 9.1 and 9.2 under a blanket insurance policy or
policies which can cover other properties owned or operated by the Lessee as
well as the Leased Property; provided, however, that any such policy of
insurance provided for under Section 9.1 shall (a) specify therein, or the
Lessee shall furnish the Lessor and the Lender with a written statement from
the insurers under such policies specifying, the amount of the total insurance
allocated to the Improvements, which amount shall be not less than the amount
required by said Section 9.1 to be carried, and (b) not contain any clause
which would result in the insured thereunder being required to carry insurance
with respect to the property covered thereby in an amount equal to a minimum
specific percentage of the value of such property in order to prevent the
insured therein named from becoming a co-insurer of any loss with the insurer
under such policy. The Lessee shall furnish to the Lessor and the Lender,
within 30 days after the filing thereof with any insurance rate-making body,
copies of the schedule or make-up of all property covered by every such policy
of blanket insurance.
SECTION 9.6 Loss Deductibles. All insurance provided for under
this Agreement may contain loss deductible clauses in such commercially
reasonable maximum amounts as the Lender shall approve from time to time.
ARTICLE X
ASSIGNMENT AND SUBLEASING
Except as provided in the next following sentence, Lessee may not
assign any of its right, title or interest in, to or under this Lease. Lessee
may assign or sublease all or any portion of the Leased Property; provided,
however, that (i) all obligations of Lessee (or, in the case of a merger,
consolidation or sale of all or substantially all of Lessee's assets, Lessee's
successor if (A) such successor has a net worth, determined in accordance with
GAAP, at least equal to that of Lessee as of the end of the most recent fiscal
quarter of Lessee, (B) such successor assumes in writing all of Lessee's
obligations under the Operative Documents without qualification or reservation
and (C) immediately after giving effect to such merger, consolidation or sale,
no Event of Default exists) 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, (ii) any such sublease shall be expressly subject and
subordinate to this Lease, the Loan Agreement, the Mortgages and the other
Operative Documents except to the extent the Lease remains effective under the
applicable Non-Disturbance and Attornment Agreement and (iii) each such
sublease shall terminate on or before the Lease Termination Date.
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ARTICLE XI
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
SECTION 11.1 Event of Loss. Any event (i) which would otherwise
constitute a Casualty during the Lease Term, (ii) which, in the good-faith
judgement of Lessee, renders repair and restoration of any Property impractical
or uneconomical and (iii) as to which Lessee, within thirty (30) days after the
occurrence of such event, delivers to Lessor and the Lender an Officer's
Certificate notifying Lessor and the Lender of such event and of such
judgement, shall constitute an "Event of Loss". In the case of any other event
which constitutes a Casualty, Lessee shall restore and rebuild the affected
Property pursuant to Section 11.3. If an Event of Loss other than an Event of
Taking shall occur, Lessee shall pay to Lessor on the next Rent Payment Date
following delivery of the Officer's Certificate pursuant to clause (iii) of the
preceding sentence, in addition to all Basic Rent and Supplement Rent otherwise
due on such date, an amount equal to the Lease Balance of the affected Property
as of such date. Upon Lessor's receipt of such Lease Balance on such date,
Lessor shall cause Lessor's interest in the Leased Property to be conveyed to
Lessee in accordance with and subject to the provisions of Section 15.5
("Purchase Procedure") hereof, provided, however, that (A) such conveyance may
be by special warranty deed, but free and clear of Lessor's Liens and the lien
of the related Mortgage, (B) Lessor shall have no obligation to remove title
defects other than Lessor Liens and the lien of the related Mortgage affecting
such Property and (C) Lessee's ability to obtain a title insurance policy shall
not affect Lessee's obligation to purchase Lessor's interest in the affected
Property. Upon completion of such purchase, but not prior thereto, the
affected Property shall be deemed released from this Lease and all obligations
of the Lessee and Lessor with respect to such Property (including the
obligation to make further payments of Basic Rent) 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 affected Property pursuant to this
Section, any proceeds derived from insurance required to be maintained by
Lessee pursuant to this Lease for Leased Property remaining after payment of
such purchase price shall be paid over to, or retained by, Lessee or as it may
direct, and Lessor shall assign to Lessee, without warranty, all of Lessor's
rights to and interest in insurance required to be maintained by Lessee
pursuant to this Lease.
SECTION 11.2 Event of Taking. Any event (a) which constitutes a
taking of title to any Property or (b) (i) which would otherwise constitute a
Condemnation, (ii) which, in the good-faith judgement of Lessee, renders
restoration and rebuilding of such Property impossible, impractical or
uneconomical and (iii) as to which Lessee, within thirty (30) days after the
occurrence of such event, delivers to Lessor and Lender an Officer's
Certificate notifying Lessor and the Lender of such event, of such judgement
and of the date (or Lessee's best estimate thereof) on which Lessee shall be
required to relinquish possession of the affected Property (or the affected
portion thereof), shall constitute an "Event of Taking". In the case of any
other event which constitutes a Condemnation Lessee shall restore and rebuild
the affected Property pursuant to Section 11.4. If an Event of Taking shall
occur, Lessee shall pay to the Lender for the account of the Lessor (i) on the
next Rent Payment Date following the occurrence of such Event of Taking, in the
case of an Event
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of Taking described in clause (a) of the second preceding sentence or (ii) on
the Rent Payment Date next preceding the date on which Lessee is required to
relinquish possession of the Leased Property (or the affected portion thereof),
in the case of an Event of Taking described in clause (b) of the second
preceding sentence, in addition to all Basic Rent and Supplemental Rent
otherwise due on such date, an amount equal to the Lease Balance of the
affected Property. Upon the Lender's receipt of such amount on such date, the
Lessor shall cause the Lessor's interest in the affected Property to be
conveyed to Lessee in accordance with and subject to the provisions of Section
15.5 ("Purchase Procedure") hereof; provided, however, that (A) such conveyance
may be by special warranty deed, but free and clear of Lessor's Liens and the
lien of the related Mortgage, (B) such conveyance shall be subject to all
rights of the condemning authority, (C) Lessor shall have no obligation to
remove title defects other than Lessor Liens and the lien of the related
Mortgage affecting such Property and (D) Lessee's ability to obtain a title
insurance policy shall not affect Lessee's obligation to purchase Lessor's
interest in the affected Property. Upon completion of such purchase, but not
prior thereto, the affected Property shall be deemed released from this Lease
and all obligations of the Lessee and the Lessor under this Lease with respect
to such Property (including the obligation to make further payments of Basic
Rent) 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 the date of such purchase, or which are expressly stated herein
to survive termination of this Lease. Upon the consummation of the purchase of
the affected Property pursuant to this Section, all Awards received by Lessor,
after deducting any reasonable and documented costs incurred by Lessor in
collecting such Awards, received or payable on account of an Event of Taking
during the Lease Term shall be paid to Lessee, and all rights of Lessor in
Awards not then received shall be assigned to Lessee by Lessor. If no Event of
Default has occurred and is then continuing, Lessee shall have the right to
negotiate with the condemning authority and receive all Awards, subject to the
terms of this Lease.
SECTION 11.3 Casualty. If a Casualty shall occur, Lessee shall
rebuild and restore the affected Property, will complete the same prior to the
Lease Termination Date (provided that sufficient time to do so exists at the
time such Casualty occurs) and will cause the conditions set forth in Section
3.3 of the Participation Agreement to be fulfilled with respect to such
restoration and rebuilding prior to the Lease Termination Date; provided,
however, that with respect to any such Casualty occurring after the original
satisfaction of the Construction Conditions, such restoration and rebuilding
will be performed, and the Improvements, as applicable, will be restored and
rebuilt, in accordance with the Plans and Specifications as in existence on the
date on which the certificate of occupancy for the affected Improvements was
issued, as such Plans and Specifications may have been modified in respect of
Alterations completed prior to the occurrence of such Casualty pursuant to
Section 7.2, with such additional modifications to such Plans and
Specifications as Lessor shall consent to in writing, which consent shall not
be unreasonably withheld or delayed.
SECTION 11.4 Condemnation. If a Condemnation shall occur, Lessee
shall rebuild and restore the affected Property to the extent practicable, will
complete the same prior to the Lease Termination Date (provided that sufficient
time to do so exists at the time such Condemnation occurs), and will cause the
conditions set forth in Section 3.3 of the Participation Agreement to be
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fulfilled with respect to such restoration and rebuilding prior to the Lease
Termination Date; provided, however, that within sixty (60) days after Lessee's
receipt of any Awards with respect to such Condemnation, Lessee shall pay to
the Lender, which amounts shall be applied as a Qualified Payment to the
prepayment of the Note, (a) the portion, if any, of such Awards which are
identified, by the condemner, as being allocable to the Land or (b) if no such
identification is made by the condemner, the portion, if any, of such Awards
which are, in Lessee's good-faith and reasonable judgment, allocable to the
Land; and provided, further, that with respect to any such Condemnation
occurring after the original satisfaction of the Construction Conditions, such
restoration and rebuilding will be performed, and the Improvements, as
applicable, will be restored and rebuilt, in accordance with the Plans and
Specifications as in existence on the date on which the certificate of
occupancy for the affected Improvements, as applicable, was issued, as such
Plans and Specifications may have been modified in respect of Alterations
completed prior to the occurrence of such Condemnation pursuant to Section 7.2
or modified to adjust for a Casualty of the Leased Property pursuant to Section
11.3, with such additional modifications to such Plans and Specifications as
Lessor shall consent to in writing, which consent shall not be unreasonably
withheld or delayed.
SECTION 11.5 Verification of Restoration and Rebuilding. Lessee
will promptly notify Lender and Lessor of the completion of the restoration or
rebuilding of the Improvements, as applicable, after a Casualty or
Condemnation. After completion of such restoration and rebuilding and in order
to verify Lessee's compliance with the foregoing Sections 11.3 and 11.4,
Lessor, the Lender and their authorized representatives may, at their own risk
and upon three (3) Business Days' notice to Lessee, inspect the Leased Property
and the completion of the restoration and rebuilding of the Improvements, as
applicable. All reasonable and documented out-of-pocket costs of such
inspection incurred by Lessor and the Lender will be paid by Lessee promptly
after written request. No such inspection shall unreasonably interfere with
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 not making any such inspection or inquiry.
None of the inspecting parties shall incur any liability or obligation by
reason of making any such inspection or inquiry unless and to the extent such
inspecting party causes damage to the Leased Property or any property of Lessee
or any other Person during the course of such inspection, whereupon, provided
that the Lessee shall not have been negligent or acted intentionally or with
gross recklessness, such inspecting party shall be liable for any such damage
or injury, as may be applicable, shall indemnify and hold Lessee harmless from
and against all claims, losses and liability as to such damage or injury.
SECTION 11.6 Application of Payments. (a) All proceeds (except
for payments under insurance policies maintained other than pursuant to Article
IX of this Lease) received at any time by Lessor, Lessee or the Lender 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 Lessee's self-insurance or deductibles ("Loss
Proceeds"), shall (except to the extent Section 11.9 applies) be applied as
follows:
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(i) In the event Lessee purchases the affected Property
pursuant to Section 11.1 or Section 11.2, such Loss Proceeds shall be
applied as set forth in Section 11.1 or Section 11.2, as the case may
be;
(ii) In the event of a Casualty at such time when an Event
of Default has occurred and is continuing and Lessee is obligated to
repair and rebuild the Leased Property pursuant to Section 11.3,
Lessee may, in good faith and subsequent to the date of such Casualty,
certify to the Lender and to the applicable insurer that no Default or
Event of Default has occurred, in which event the applicable insurer
shall pay the Loss Proceeds to Lessee and, if requested by Lessee, the
Lender and Lessor shall so direct the insurer;
(iii) In the event of a Condemnation at such time when an
Event of Default has occurred and is continuing and Lessee is
obligated to repair and rebuild the Leased Property pursuant to
Section 11.4, Lessor and Lender (if required) shall upon Lessee's
request assign to Lessee Lessor's and the Lender's (if applicable)
interest in any applicable Awards except for Awards (or portions
thereof) described in Section 11.4(a) or (b); and
(iv) As provided in Section 11.8 if such Section is
applicable.
(b) During any period of repair or rebuilding pursuant to this
Article, this Lease will remain in full force and effect and Basic Rent shall
continue to accrue and be payable without abatement or reduction. Lessee shall
maintain records setting forth information relating to the receipt and
application of payments in accordance with this Section. Such records shall be
kept on file by Lessee at its offices and shall be made available to Lessor and
the Lender upon request.
SECTION 11.7 Prosecution of Awards. (a) If, during the
continuance of any Event of Default, any Condemnation shall occur, Lessee shall
give to Lessor and the Lender promptly, but in any event within sixty (60) days
after the occurrence of such Condemnation, 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, Lessee
shall control the negotiations with the relevant Governmental Authority as to
any proceeding in respect of which Awards are required, under Section 11.6, to
be assigned or released to Lessee; provided, however, that if an Event of
Default shall have occurred and be continuing Lessor shall control such
negotiations. Lessee hereby irrevocably assigns, transfers and sets over to
Lessor all rights of Lessee to any Award made during the continuance of an
Event of Default 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
Lessor during the continuance of an Event of Default, with full power of
substitution in the name of Lessee or otherwise (but without limiting the
obligations of Lessee under this Article), to file and prosecute what would
otherwise be Lessee's claim for any such Award and, in the case of Lessor, to
collect, receipt for and retain the same; provided, however, that in any event
Lessor may participate
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in any such negotiations, and no settlement will be made without Lessor's prior
consent, not to be unreasonably withheld or delayed.
(b) Notwithstanding the foregoing, Lessee may prosecute, and
Lessor shall have no interest in, any claim with respect to Lessee's trade
fixtures, other personal property and equipment and Lessee's relocation
expenses.
SECTION 11.8 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, without any abatement or reduction of
Basic Rent, and the Awards for the Leased Property shall, unless an Event of
Default has occurred and is continuing, be paid to Lessee.
SECTION 11.9 Other Dispositions. Notwithstanding the foregoing
provisions of this Article, so long as an Event of Default shall have occurred
and be continuing, any amount that would otherwise be payable to or for the
account of, or that would otherwise be retained by, Lessee pursuant to this
Article shall be paid to Lessor as security for the obligations of Lessee under
this Lease and, at such time thereafter as no Event of Default shall be
continuing, such amount shall be paid promptly to Lessee to the extent not
previously applied by Lessor in accordance with the terms of this Lease or the
other Operative Documents.
SECTION 11.10 No Rent Abatement. Rent shall not xxxxx hereunder by
reason of any Casualty, any Event of Loss, any Event of Taking or any
Condemnation of the Leased Property, and Lessee shall continue to perform and
fulfill all of Lessee's obligations, covenants and agreements hereunder
notwithstanding such Casualty, Event of Loss, Event of Taking or Condemnation
until the Lease Termination Date. The foregoing notwithstanding, if and to the
extent that, pursuant to the provisions of this Lease and the other Operative
Documents, Loss Proceeds or Awards are paid over to and permanently retained by
the Lender or Lessor, Lessee shall receive as a credit against its obligation
to pay Basic Rent or, as applicable, the Lease Balance, in the amount of any
such Loss Proceeds or Awards.
ARTICLE XII
INTEREST CONVEYED TO LESSEE
If a bankruptcy court or other court of competent jurisdiction
determines that the transaction represented by this Lease will not be enforced
as a true lease, or will be treated as a financing or other transaction, then
in such event it is the intention of the parties hereto (i) that this Lease be
treated as a mortgage and security agreement, deed of trust and security
agreement, or other similar instrument encumbering the Leased Property, (ii)
that Lessor shall have, as a result of such determination, all of the rights,
powers and remedies of a mortgagee or trustee under a deed of trust available
under Applicable Law to take possession of and sell upon the occurrence of an
Event of Default (whether by foreclosure or otherwise) the Leased Property,
(iii) that the effective date of such mortgage and security agreement, deed of
trust and security agreement, or other similar instrument shall be the
effective date of this Lease, (iv) that the recording of this Lease, each
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Memorandum of Lease, or any other instrument referencing this provision shall
be deemed to be the recording of such mortgage and security agreement, deed of
trust and security agreement, or other similar instrument and (v) that the
obligations secured by such mortgage and security agreement, deed of trust and
security agreement, or other similar instrument shall include the payment of
all Basic Rent and Supplemental Rent, the Lease Balance and all other
obligations of and amounts due from Lessee hereunder and under the Operative
Documents but without duplication.
ARTICLE XIII
EVENTS OF DEFAULT
The following events shall constitute Events 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 administrative or
governmental body):
(a) Lessee shall fail to make any payment of Basic Rent when due
and such failure shall continue for a period of three (3) days after such
failure;
(b) Lessee shall fail to make any payment of Supplemental Rent
when due and such failure shall continue for a period of ten (10) days after
Lessee's receipt of written notice of such failure from Lessor;
(c) Lessee shall fail to pay (i) the amount required for purchase
of the affected Property when due pursuant to Sections 11.1, or 11.2 or when
due in connection with the exercise of the Purchase Option pursuant to Section
15.1, or (ii) the Total Lease Balance when due for the purchase of the Leased
Property pursuant to Section 15.2, or (iii) the Recourse Deficiency Amount when
required pursuant to Article XV;
(d) Lessee shall fail to maintain insurance as required by Article
IX hereof;
(e) The occurrence of any breach of the financial covenants set
forth in Section 5.4 of the Participation Agreement;
(f) Lessee shall fail to satisfy the conditions set forth in
Section 3.3 of the Participation Agreement on or before the Completion
Deadline;
(g) The filing by Lessee of any petition for dissolution or
liquidation of Lessee, or the commencement by Lessee of a voluntary case under
any applicable bankruptcy, insolvency or other similar law for the relief of
debtors, foreign or domestic, now or hereafter in effect, or Lessee shall have
consented to the entry of an order for relief in an involuntary case under any
such law, or the appointment of or taking possession by a receiver, custodian
or trustee (or other similar official) for Lessee or any substantial part of
its property, or a general assignment by Lessee for the benefit of its
creditors, or Lessee shall have taken any corporate action in furtherance of
any of the foregoing; or the filing against Lessee of an involuntary petition
in bankruptcy which results in an order for relief
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being entered or, notwithstanding that an order for relief has not been
entered, the petition is not dismissed within ninety (90) days of the date of
the filing of the petition, or the filing under any law relating to bankruptcy,
insolvency or relief of debtors of any petition against Lessee which either (i)
results in a finding or adjudication of insolvency of Lessee or (ii) is not
dismissed within ninety (90) days of the date of the filing of such petition;
(h) A "Default", "Event of Default", or other similar occurrence
shall have occurred and be continuing under the Lease and Development Agreement
dated as of January 10, 1997 between Lessee and Asset XI Holdings Company,
L.L.C., a Massachusetts limited liability company affecting property located in
Xxxxxx County, Texas, or under any of the Operative Documents, as defined
therein.
(i) A "default", "event of default" or other similar occurrence
shall have occurred and be continuing under any other loan agreement, credit
agreement, revolving credit agreement, mortgage, security agreement, lease
agreement, participation agreement or other agreement between Lessee, or any
Affiliate of Lessee, and Lender or between Lessee, or any Affiliate of Lessee,
and Lessor, or any Affiliate of Lessor, evidencing or securing any Indebtedness
of Lessee exceeding $5,000,000;
(j) Any representation or warranty by Lessee in any Operative
Document or in any certificate or document delivered to Lessor pursuant to any
Operative Document shall have been incorrect in any material respect when made
and has resulted in a Material Adverse Effect on Lessee; or
(k) Lessee shall fail in any material respect to timely perform or
observe any covenant, condition or agreement (not included in clause (a), (b),
(c), (d), (e), (f), (g), (h), (i) or (j) of this Article) to be performed or
observed by it hereunder or under the other Operative Documents and such
failure shall continue for a period of 30 days after the earlier to occur of a
Responsible Officer becoming aware of such failure or the Lessee's receipt of
written notice thereof from Lessor (provided, however, if such failure is other
than the payment of money and is of such nature that it can be corrected but
not within the applicable period, then that failure shall not constitute an
Event of Default so long as Lessee institutes curative action within the
applicable period and diligently pursues that action to completion).
ARTICLE XIV
ENFORCEMENT
SECTION 14.1 Remedies. Upon the occurrence of any Event of
Default and at any time thereafter, Lessor may, so long as such Event of
Default is continuing, do one or more of the following as Lessor in its sole
discretion shall determine, without limiting any other right or remedy Lessor
may have on account of such Event of Default (including, without limitation,
the obligation of Lessee to purchase the Leased Property as set forth in
Sections 15.2 and 15.3):
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(a) Lessor may, by notice to Lessee, rescind or terminate this
Lease as of the date specified in such notice; provided, however, that (i) no
reletting, reentry or taking of possession of the Leased Property by Lessor
will be construed as an election on Lessor's part to terminate this Lease
unless written notice of such intention is given to Lessee, (ii)
notwithstanding any reletting, reentry or taking of possession, Lessor may at
any time thereafter elect to terminate this Lease for a continuing Event of
Default, (iii) Lessor shall be under no obligation whatsoever to mitigate its
damages hereunder but shall be entitled to maintain an action for the payment
in full of all amounts due hereunder (including but not limited to payment of
the Recourse Deficiency Amount, but subject to the terms and provisions of this
Section 14.1) and (iv) no act or thing done by 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 Lessor.
(b) Lessor may (i) demand that Lessee, and Lessee shall upon the
written demand of Lessor, return the Leased Property promptly to Lessor in the
manner and condition required by, and otherwise in accordance with all of the
provisions of, Articles VII and XV hereof as if the Leased Property were being
returned at the end of the Lease Term, and Lessor shall not be liable for the
reimbursement of Lessee for any costs and expenses incurred by Lessee in
connection therewith and (ii) without prejudice to any other remedy which
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 (to the exclusion of Lessee) the Leased Property or any
part thereof and expel or remove Lessee and any other Person who may be
occupying the Leased Property, by summary proceedings or otherwise, all without
liability to 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 Lessor's other damages, Lessee shall be
responsible for the reasonable and documented costs and expenses of reletting,
including brokers fees and the reasonable and documented costs of any
alterations or repairs made by Lessor.
(c) Lessor may (i) sell all or any part of the Leased Property at
public or private sale, as Lessor may determine, free and clear of any rights
of Lessee and without any duty to account to Lessee with respect to such action
or inaction or any proceeds with respect thereto (except to the extent required
by clause (ii) of this subsection if Lessor shall elect to exercise its rights
thereunder) in which event Lessee's obligation to pay Basic Rent hereunder for
periods commencing after the date of such sale shall be terminated or
proportionately reduced, as the case may be and (ii) if Lessor shall so elect,
demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the date
of such sale, as liquidated damages for loss of a bargain and not as a penalty
(the parties agreeing that 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 Rent Payment Date coinciding with such date of sale (or, if the
sale date is not a Rent Payment Date, the Rent Payment Date next preceding the
date of such sale)), an amount equal to (A) the excess, if any, of (1) the sum
of all Rent due and unpaid to and including such Rent Payment Date plus an
amount equal to the Total Lease Balance as of the date of sale (or, if the
Event of Default occurs prior to the Completion Date, an amount equal to the
sum of the principal of and all interest accrued on, and Breakage Costs, if
any, in respect of, the Note plus an amount equal to the outstanding balance of
the Contribution plus all accrued and unpaid
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Contribution Returns) over (2) the net proceeds of such sale (that is, after
deducting all costs and expenses incurred by Lessor incident to such conveyance
(including, without limitation, all costs, expenses, fees, premiums and taxes
described in Section 15.5(b)), plus (B) interest at the Overdue Rate on the
foregoing amount from such Rent Payment Date until the date of payment. Any
amounts so collected pursuant to this subsection shall be applied (after first
deducting amounts expended by Lessor in connection with the Leased Property and
the Operative Documents and not then reimbursed) to reduce the Total Lease
Balance. Lessor agrees, upon Lessee's written request and at Lessee's sole
expense, to provide Lessee with an accounting showing in reasonable detail the
application of amounts collected pursuant to this subsection.
(d) Lessor may, at its option, elect not to terminate the Lease,
and continue to collect all Basic Rent, Supplemental Rent and all other amounts
due Lessor (together with all costs of collection) and enforce Lessee's
obligations under this Lease as and when the same become due, or are to be
performed, and at the option of Lessor, upon any abandonment of the Leased
Property by Lessee and re-entry of same by Lessor, Lessor may, in its sole and
absolute discretion, elect not to terminate this Lease 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 long term extending beyond the term of this Lease)
and at such rental or rentals and upon such other terms and conditions as
Lessor in its reasonable discretion may deem advisable. Upon each such
reletting all rentals actually received by Lessor from such reletting shall be
applied to Lessee's obligations hereunder in such order, proportion and
priority as Lessor may elect in Lessor's sole and absolute discretion, and if
such rentals received from such reletting during any Rent Period are less than
the Rent to be paid during that Rent Period by Lessee hereunder, Lessee shall
pay any deficiency, as calculated by Lessor, to Lessor on the Rent Payment Date
in 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 paragraph (b), (c) or (d) of this Section with
respect to the Leased Property, demand, by written notice to the Lessee
specifying a date (the "Final Rent Payment Date") not earlier than ten (10)
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
15.2, 15.4 and 15.5; provided, however, that (i) such purchase shall occur on
the date set forth in such notice, notwithstanding the provision in Section
15.3 calling for such purchase to occur on the Lease Termination Date and (ii)
the Lessor's obligations under Section 15.5(a) shall be limited to delivery of
a deed without warranty and xxxx of sale without warranty of the Leased
Property, without recourse or warranty, but free and clear of the Lessor's
Liens.
(f) To the extent not inconsistent with subsection (e), 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 Lessor's right to collect any such damages
for any subsequent
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Rent Period(s), or 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.
(g) Lessor may retain and apply against Lessor's damages all sums
which Lessor would, absent such Event of Default, be required to pay, or turn
over, to Lessee pursuant to the terms of this Lease.
SECTION 14.2 Remedies Cumulative; No Waiver; Consents. To the
extent permitted by, and subject to the mandatory requirements of, Applicable
Law (subject in all events to Section 14.1(e) hereof), each and every right,
power and remedy herein specifically given to 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 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 right to exercise at the same time or thereafter any
right, power or remedy. No delay or omission by 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 Lessee or to be an acquiescence therein. Lessor's consent to any
request made by Lessee shall not be deemed to constitute or preclude the
necessity for obtaining Lessor's consent, in the future, to all similar
requests. No express or implied waiver by Lessor of any Event of Default shall
in any way be, or be construed to be, a waiver of any future Event of Default.
To the extent permitted by Applicable Law, Lessee hereby waives any rights now
or hereafter conferred by statute or otherwise that may require Lessor to sell,
lease or otherwise use the Leased Property or part thereof in mitigation of
Lessor's damages upon the occurrence of an Event of Default or that may
otherwise limit or modify any of Lessor's rights or remedies under this
Article.
ARTICLE XV
SALE, RETURN OR PURCHASE OF LEASED PROPERTY
SECTION 15.1 Lessee's Option to Purchase. Subject to the terms
and conditions and provisions set forth in this Article, Lessee shall have the
option (the "Purchase Option"), exercisable at any time during the Lease Term
on or prior to the tenth Business Day next preceding the Lease Termination
Date, to purchase from Lessor, Lessor's entire interest in all, but not less
than all, of any Property at the purchase price equal to the Purchase Option
Price for such Property. Such option must be exercised by written notice to
the Lessor and the Lender, which exercise shall be irrevocable, and such notice
shall specify the closing date for Lessee's purchase of such Property, which
date shall be (i) not less than ten (10) Business Days or more than 90 calendar
days following the Lessor's receipt of such notice and (ii) in any event not
later the Lease Termination Date. If the Purchase Option is exercised pursuant
to the foregoing, then, subject to the provisions set forth in this Article, on
such closing date, Lessor shall convey to Lessee, and Lessee shall purchase
from Lessor, Lessor's interest in all, but not less than all, of such Property.
If Lessee fails to exercise the Purchase Option in a timely manner, then the
Purchase Option shall thereupon automatically
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terminate without any further action of Lessor, and the Purchase Option shall
thereafter be of no force or effect. The Purchase Option granted to Lessee
pursuant to this Section is exclusive of the purchase option provided to Lessee
pursuant to Section 14.1(e).
SECTION 15.2 Purchase Obligation. Unless (i) the Lessee and the
Lessor shall have extended the Lease Term pursuant to a supplement to this
Lease containing conditions and terms mutually agreeable to the Lessee and the
Lessor and approved by the Lender, (ii) Lessee shall have properly exercised
the Purchase Option and purchased all of the Leased Property pursuant thereto,
(iii) Lessee shall have properly exercised the Remarketing Option and shall
have fulfilled the conditions of Section 15.6 hereof and Lessor shall have sold
its entire interest in the Leased Property pursuant thereto or (iv) Lessee
shall have properly exercised the Remarketing Option and shall have fulfilled
the conditions of Section 15.6 hereof but the Lessor shall have rejected such
sale pursuant to Section 15.6(xi) and Lessee shall then have timely fulfilled
all of its obligations under Section 15.7 and 15.8 hereof, then, subject to the
terms, conditions and provisions set forth in this Article, Lessee shall
purchase from Lessor, and Lessor shall convey to Lessee, on the Lease
Termination Date Lessor's entire interest in all, but not less than all, of the
Leased Property. Lessee may designate, in a notice given to Lessor not less
than ten (10) Business Days prior to the closing of such purchase (time being
of the essence), the transferee to whom the conveyance shall be made (if other
than to 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 Lessee to be released, fully
or partially, from any of its obligations under this Lease.
SECTION 15.3 Acceleration of Purchase Obligation. Lessee shall be
obligated to purchase Lessor's entire interest in all, but not less than all,
of the Leased Property immediately, automatically and without notice upon the
occurrence of any Event of Default specified in clause (g) of Article XIII;
provided, however, that (without affecting any of Lessee's obligations under
Section 15.5 or otherwise) Lessor's obligations under Section 15.5 (a) shall be
limited to delivery of a quit claim deed of the Leased Property.
SECTION 15.4 Determination of Purchase Price. Upon the purchase
by Lessee of the Leased Property pursuant to Sections 15.2 or 15.3, the
purchase price therefor shall be an amount equal to the Total Lease Balance as
of the closing date therefor.
SECTION 15.5 Purchase Procedure.
(a) If Lessee shall purchase Lessor's interest in the Leased
Property pursuant to any provision of this Lease (other than as provided in
Section 15.3), (i) Lessee shall accept from Lessor, and Lessor shall convey to
Lessee, such Leased Property by one or more duly executed and acknowledged
special warranty deeds of such Leased Property in recordable form, (ii) upon
the date fixed for any purchase of Lessor's interest in such Leased Property
hereunder, Lessee shall pay to the order of Lessor the Total Lease Balance by
wire transfer of federal funds and (iii) Lessor shall convey to Lessee Lessor's
entire interest in all of the Leased Property via the special warranty deed or
deeds described above and Lessor will execute and deliver to Lessee such other
documents as may be legally required in order to effect such conveyance, and
such other documents as may be
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required by any escrow agent in order to close escrow in connection with such
conveyance and issue to Lessee an ALTA owner's title policy subject only to (A)
the exceptions set forth on Schedule B of the Title Policy for each Property
other than the Mortgage therefor and the Assignment of Lease and Rents, (B)
such exceptions created or caused by Lessee, or otherwise resulting from any
act or failure to act by Lessee, or consented to by Lessee and (C) taxes and
assessments not yet due and payable. Notwithstanding the foregoing, the
procedures set forth in this Section 15.5(a) shall apply to transfers of one or
more Parcels constituting less than Lessor's entire interest in the Leased
Property, but only to the extent that such Parcels are affected by an Event of
Loss, pursuant to Section 11.1 hereof, or to an Event of Taking, pursuant to
Section 11.2 hereof.
(b) In the event that Lessee exercises the Remarketing Option
pursuant to Section 15.6 and fulfills all of the conditions set forth in
clauses (i) through (xiii) thereof, and if Lessor does not reject the purchase
offer for the Leased Property as provided in Section 15.6 (xi), then upon
payment of the purchase price and the satisfaction by such purchaser of all of
the applicable closing conditions, Lessor shall convey to such purchaser
Lessor's interest in the Leased Property by a duly executed special warranty
deed or deeds in recordable form, and Lessor will execute and deliver to such
purchaser (or the Lessee, as appropriate) such other documents as may be
legally required in order to effect such conveyance, and such other documents
as may be required by such purchaser's title insurance company in order to
issue to such purchaser an ALTA owner's title insurance policy subject only to
(i) the exceptions set forth on Schedule B of the Title Policy, other than the
Mortgage therefor and the Assignment of Lease and Rents, (ii) such exceptions
created or caused by Lessee, or otherwise resulting from any act or failure to
act by the Lessee, or consented to by the Lessee and (iii) taxes and
assessments not yet due and payable.
(c) Lessee shall, at Lessee's sole cost and expense, obtain all
required governmental and regulatory approval and consents and shall make such
filings as required by Applicable Law. In the event that Lessor is required by
Applicable Law to take any action in connection with such purchase and sale,
Lessee shall pay all costs incurred by Lessor in connection therewith. In
addition, all charges incident to such conveyance, including, without
limitation, Lessee's attorneys' fees, Lessor's reasonable attorneys' fees,
commissions, Lessee's and 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 and paid by Lessee.
(d) Upon expiration or termination of this Lease resulting in
conveyance of Lessor's interest in the title to the Leased Property to Lessee,
there shall be no apportionment of taxes, insurance, utility charges or other
charges payable with respect to the Leased Property, all of such taxes,
insurance, utility or other charges due and payable with respect to the Leased
Property prior to termination being payable by Lessee hereunder and all due
after such time being payable by Lessee as the then owner of the Leased
Property.
SECTION 15.6 Option to Remarket. Subject to the fulfillment of
each of the conditions set forth in this Section, Lessee shall have the option
(the "Remarketing Option") to market all, but not less than all, of the Leased
Property and to procure a purchaser therefor. Lessee's effective
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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 shall render the Remarketing Option and Lessee's exercise thereof null
and void, in which event, Lessee shall remain obligated to perform all of its
obligations under Section 15.2 ("Purchase Obligation"):
(i) Not earlier than six months before the Scheduled
Termination Date, Lessee shall give to Lessor written notice of
Lessee's exercise of the Remarketing Option, which exercise shall be
irrevocable unless otherwise agreed in writing by the Lender.
(ii) Not later than thirty (30) Business Days prior to the
Scheduled Termination Date, Lessee shall deliver to Lessor an
environmental assessment of each Parcel of the Leased Property dated
not later than forty-five (45) days prior to the Scheduled Termination
Date. Each such environmental assessment shall be prepared by an
environmental consultant selected by Lessee and reasonably acceptable
to Lessor and the Lender, shall be in form, detail and substance
reasonably acceptable to Lessor and the Lender, and shall otherwise
indicate the environmental condition of the Leased Property to be the
same as described in the Environmental Audit delivered pursuant to
Section 3.2 of the Participation Agreement.
(iii) On the date of Lessee's notice to Lessor of Lessee's
exercise of the Remarketing Option, each of the Construction
Conditions shall have been timely satisfied and no Event of Default
shall exist, and thereafter, no Event of Default shall exist under
this Lease.
(iv) Lessee shall have completed all Alterations,
restoration and rebuilding of the Leased Property pursuant to Sections
7.2, 11.3 and 11.4 (as the case may be) and shall have fulfilled all
of the conditions and requirements in connection therewith pursuant to
said Sections, in each case by the date on which Lessor receives
Lessee's notice of Lessee's exercise of the Remarketing Option (time
being of the essence), regardless of whether the same shall be within
Lessee's control.
(v) Once Lessee has exercised the Remarketing Option as
provided in clause (i) hereof, Lessee shall, as nonexclusive agent for
Lessor, use commercially reasonable efforts to sell Lessor's interest
in each Parcel of the Leased Property and will attempt to obtain the
highest purchase price therefor. Lessee will be responsible for
hiring brokers and making the Leased Property available for inspection
by prospective purchasers. Lessee shall promptly provide any
maintenance records relating to each Parcel of the Leased Property to
Lessor and any potential purchaser thereof upon request, and shall
otherwise do all things necessary to sell and deliver possession of
each Parcel of the Leased Property to the purchaser thereof. All such
marketing of the Leased Property shall be at Lessee's sole expense.
Lessee shall allow Lessor, the Lender and any potential qualified
purchaser access to each Parcel of the Leased Property for the purpose
of inspecting the same.
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(vi) Lessee shall submit all bids to Lessor and the Lender
and Lessor and the Lender 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 (at least up to the Total Lease Balance amount).
Lessee shall procure bids from one or more bona fide prospective
purchasers of any Parcel of the Leased Property and shall deliver to
Lessor and the Lender not less than ninety (90) days prior to the
Lease Termination Date a binding written irrevocable offer by such
purchaser offering (subject to customary conditions which do not
violate the provisions of clause viii, below) the highest "all-cash"
bid to purchase the Leased Property. Such purchaser shall not be
Lessee or any Subsidiary or Affiliate of Lessee. The written offer
must specify the Lease Termination Date as the closing date.
(vii) On the Lease Termination Date, Lessee shall surrender
the Leased Property in accordance with Section 15.8 hereof.
(viii) In connection with any such sale of the Leased
Property, Lessee may provide to the purchaser any such customary
"seller's" indemnities, representations and warranties regarding
title, absence of Liens (except Lessor's Liens) and the condition of
the Leased Property, including, without limitation, an environmental
indemnity, as Lessee may determine to provide in the exercise of its
business judgment and sole discretion, provided, however, that no such
indemnities, representations or warranties shall be binding on Lessor,
nor shall they create liabilities, charges, offsets or Claims,
contingent or otherwise, which could diminish, offset or impose a lien
upon the amount of the cash proceeds payable to Lessor under such
purchase offer, nor shall Lessor be under any obligation to join in or
become obligated for the same, except that Lessor shall fulfill all of
the requirements set forth in clause (b) of Section 15.5, and such
requirements are incorporated herein by reference. As to Lessor, any
such sale shall be made on an "as is, with all faults" basis without
representation or warranty by Lessor other than the absence of
Lessor's Liens.
(ix) Lessor shall pay from the sale proceeds, all
prorations, credits, costs and expenses of the sale of the Leased
Property, including without limitation the cost of all title
insurance, surveys, environmental reports, appraisals, transfer taxes,
Lessor's reasonable attorneys' fees, commissions, escrow fees,
recording fees, and all applicable documentary and other transfer
taxes.
(x) Lessee shall pay to the Lender on the Lease
Termination Date (or to such other Person as Lessor shall notify
Lessee in writing or, in the case of Supplemental Rent, to the Person
entitled thereto) an amount equal to the Recourse Deficiency Amount in
the type of funds specified in Section 4.3 hereof.
(xi) If the aggregate selling price (net of closing costs
and prorations and other amounts payable by Lessor under clause (ix)
above, as reasonably estimated by Lessor) for all Parcels plus the
Recourse Deficiency Amount is less than the Total Lease Balance, then
Lessor may, by notice to Lessee and in Lessor's sole and absolute
discretion, reject such
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offer to purchase, in which event the parties will proceed according
to the provisions of Section 15.7 "Rejection of Sale" hereof.
(xii) If Lessor does not reject such purchase offer as
provided above, the closing of such purchase of the Leased Property by
such purchaser must occur on or immediately before the Lease
Termination Date, contemporaneously with Lessee's surrender of the
Leased Property in accordance with Section 15.8 hereof.
(xiii) If Lessor does not reject the purchase offer as
provided above, then the purchase shall be consummated on the Lease
Termination Date 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 Lessor; provided, however, that
if the sum of the gross proceeds from such sale plus the Recourse
Deficiency Amount exceeds the Total Lease Balance, as of such date,
then the excess shall be paid to Lessee on the Lease Termination Date.
If one or more of the foregoing provisions shall not be fulfilled as of the
Lease Termination Date or if the Leased Property is not purchased as aforesaid
for any other reason whatsoever other than solely due to rejection by Lessor of
such sale pursuant to subsection (xi) above, then Lessor may, at Lessor's
option and in Lessor's sole discretion, (i) declare by written notice to Lessee
the Remarketing Option to be null and void (whether or not it has been
theretofore exercised by Lessee), in which event all of Lessee's rights under
this Section shall immediately terminate and Lessee shall be obligated to
purchase the Leased Property pursuant to Section 15.2 on the Lease Termination
Date or (ii) permit and require Lessee on behalf of Lessor to consummate the
sale of the Leased Property to such purchaser, in which event the gross
proceeds shall be paid as set forth in Section 15.6(xiii) above and all of
Lessor's rights and remedies set forth herein, in the other Operative
Documents, at law or in equity or otherwise shall be preserved as set forth in
Section 14.2 hereof. If the prospective purchaser breaches its offer to
purchase, then Lessor may, in Lessor's sole discretion, declare the Remarketing
Option to be null and void, in which event all of Lessee's rights under this
Section shall immediately terminate and Lessee shall be obligated to purchase
the Leased Property pursuant to Section 15.2. The Lessee shall have no right,
power or authority to bind the Lessor in connection with any proposed sale of
the Leased Property.
SECTION 15.7 Rejection of Sale. (a) Notwithstanding anything
contained herein to the contrary, if Lessor rejects the purchase offer(s) for
the Leased Property as provided in Section 15.6(a)(xi) then (i) Lessee shall
pay to the Lender (or to such other person as Lessor shall direct) the Recourse
Deficiency Amount pursuant to Section 15.6(xi), (ii) Lessor shall retain title
to the Leased Property and (iii) in addition to Lessee's other obligations
hereunder, Lessee will reimburse Lessor within ten (10) Business Days after
written request, for all reasonable costs and expenses incurred by Lessor,
during the period ending on the first anniversary of the Remarketing Date in
connection with the marketing, sale, closing or transfer of such Series of
Properties, which obligation shall survive the Lease Termination Date and the
termination or expiration of this Lease with respect thereto.
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(b) Following any rejection by the Lessor of the purchase
offer(s) for the Leased Property pursuant to the provisions of Section
15.6(xi), subject to the condition that Lessee shall have:
(i) timely paid the Recourse Deficiency Amount to
Lessor on or before the Lease Termination Date,
(ii) duly and timely fulfilled each of the other
provisions of clauses (i) through (xiii) of Section 15.6 on or
before the Lease Termination Date, and
(iii) on and after the Lease Termination Date, timely
fulfilled each and every obligation of the Lessee under the
Lease, the Participation Agreement and the other Operative
Documents on its part to be performed, and no Event of Default
shall have occurred,
then,
upon the subsequent sale of all, but not less than all, of the Leased Property
by Lessor to one or more third parties, Lessor shall pay to Lessee an amount
equal to the Lessor's gain (if any) on the sales, computed taking into account
Lessor's total investment in the Leased Property (including, without
limitation, the unpaid balance of the Loan, if any, and the unrecovered balance
of the Contribution) plus all of Lessor's unreimbursed costs and expenses
(capital or otherwise) relating to the Leased Property, plus an annual return
thereon for up to 12 months following the Lease Termination Date (but not
thereafter) computed at the Overdue Rate, less the net avails of any reletting
of such Leased Property or any part thereof. To the extent that Lessor shall
receive payment in the form of purchase-money indebtedness in connection with
any such sale, Lessor's duty to account to Lessee pursuant to this Section
15.7(b) shall be suspended until such time as Lessor receives payment thereon.
SECTION 15.8 Return of Leased Property. If Lessor retains title
to the Leased Property pursuant to Section 15.7 hereof, then Lessee shall, on
the Lease Termination Date, and at its own expense, return possession of the
Leased Property to Lessor for retention by Lessor. If Lessee properly
exercises the Remarketing Option and fulfills all of the conditions of Section
15.6 hereof and the Lessor does not reject such purchase offers pursuant to
Section 15.6(xi), then Lessee shall (unless by agreement with the purchaser
Lessee is to remain in possession of the Leased Property), on the Lease
Termination Date and at its own cost, transfer possession of the Leased
Property to the independent purchaser thereof, in each case by surrendering the
same into the possession of Lessor or such purchaser, as the case may be, free
and clear of all Liens other than Lessor Liens, Liens for Taxes not yet payable
and Liens described in clause (vi) of the definition of Permitted Liens, in as
good condition as it was on the Completion Date (as modified by Alterations
permitted by this Lease), ordinary wear and tear excepted, and in compliance
with Applicable Law. Lessee shall, on and within a reasonable time before and
after the Lease Termination Date, cooperate with Lessor and the independent
purchaser of the Leased Property in order to facilitate the ownership and
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operation by such purchaser of the Leased Property after the Lease Termination
Date, which cooperation shall include the following, all of which Lessee shall
do on or before the Lease Termination Date or as soon thereafter as is
reasonably practicable: providing all books and records regarding the
maintenance and ownership of the Leased Property and all know-how, data and
technical information relating thereto to the extent in Lessee's possession,
providing a current copy of the Plans and Specifications for the Leased
Property, assigning all licenses necessary for the operation and maintenance of
the Leased Property to the extent Lessee has the legal right to do so and
cooperating in seeking and obtaining all necessary Governmental Action relating
to occupancy but not special use by the purchaser thereof. Lessee shall have
also paid the cost of all Alterations with respect to the Leased Property
commenced prior to the Lease Termination Date. The obligation of Lessee under
this Article shall survive the expiration or termination of this Lease.
SECTION 15.9 Effect of Conveyance to Lessee. Upon conveyance of
the Leased Property after the exercise by Lessee of any of its rights to
purchase the Leased Property, including its rights under Section 14.1(e), or
after exercise of the Remarketing Option and the fulfillment of the applicable
conditions of clauses (i) through (x) of Section 15.6, this Lease shall
automatically terminate unless Lessee otherwise elects in writing.
ARTICLE XVI
LESSEE'S EQUIPMENT
After any repossession of the Leased Property (whether or not this
Lease has been terminated), Lessee, at its expense and so long as such removal
of such Alteration shall not result in a violation of Applicable Law, shall,
within a reasonable time after such repossession or within sixty (60) days
after Lessee's receipt of Lessor's written request (whichever shall first
occur), remove all of 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 or materially
impairing the value of the Leased Property); provided, however, that Lessee
shall not remove any fixture, equipment or personal property which constitutes
part of the Leased Property. Any of Lessee's trade fixtures, personal property
and equipment not so removed by Lessee within such period shall be considered
abandoned by Lessee, and title thereto shall without further act vest to
Lessor, and may be appropriated, sold, destroyed or otherwise disposed of by
Lessor without notice to Lessee and without obligation to account therefor and
Lessee will pay Lessor, upon written demand, all reasonable and documented
costs and expenses incurred by Lessor in removing, storing or disposing of the
same and all costs and expenses incurred by Lessor to repair any damage to the
Leased Property caused by such removal. Lessee will immediately repair at its
expense all damage to the Leased Property caused by any such removal (unless
such removal is effected by Lessor, in which event Lessee shall pay all
reasonable costs and expenses incurred by Lessor for such repairs). Lessor
shall have no liability in exercising Lessor's rights under this Article, nor
shall Lessor be responsible for any loss of or damage to Lessee's personal
property and equipment in connection therewith.
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ARTICLE XVII
RIGHT TO PERFORM FOR LESSEE
If Lessee shall fail to perform or comply with any of its agreements
contained herein Lessor may, on thirty (30) days' prior notice (or such lesser
period afforded by Applicable Law or any third party, except that no notice
shall be required in the case of a default in the observance of the obligations
to maintain insurance pursuant to Article IX, or in the event of emergency) to
Lessee, perform or comply with such agreement, and 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 Lessor (including reasonable
attorney's 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 Lessee to Lessor within ten (10) days'
after written demand therefor.
ARTICLE XVIII
MISCELLANEOUS
SECTION 18.1 Reports. To the extent required under Applicable Law
and to the extent it is reasonably practical for Lessee to do so, Lessee shall
prepare and file in timely fashion, or, where such filing is required to be
made by Lessor or it is otherwise not reasonably practical for Lessee to make
such filing, Lessee shall prepare and deliver to Lessor (with a copy to the
Lender) within a reasonable time prior to the date for filing and 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.
SECTION 18.2 Binding Effect; Successors and Assigns; Survival.
The terms and provisions of this Lease, and the respective rights and
obligations hereunder of Lessor and Lessee, shall be binding upon their
respective successors, legal representatives and assigns (including, in the
case of Lessor, any Person to whom 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 hereunder of the Lender shall inure (subject to
such conditions as are contained herein) to the benefit of the Lender's
permitted successors and assigns.
SECTION 18.3 Quiet Enjoyment. Lessor covenants that, so long as
no Event of Default has occurred and is continuing, it will not interfere in
Lessee's or any of its sublessees' quiet enjoyment of the Leased Property in
accordance with this Lease during the Lease Term.
SECTION 18.4 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 accordance
with Section 8.2 of the Participation Agreement.
SECTION 18.5 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
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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 Lessee shall remain liable to perform its obligations
hereunder except to the extent of such unenforceability. To the extent
permitted by Applicable Law, the parties hereby waive any provision of law that
renders any provision hereof prohibited or unenforceable in any respect.
SECTION 18.6 Amendment; Complete Agreements. Neither this Lease
nor any of the terms hereof may be terminated, amended, supplemented, waived or
modified orally, except pursuant to Parcel Lease Supplements executed and
delivered pursuant to the provisions of the Operative Documents, or by other
instrument in writing signed by Lessor and the Lessee in accordance with the
provisions of Section 8.4 of the Participation Agreement. This Lease, together
with the other Operative Documents, is intended by the parties as a final
expression of their lease 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 18.7 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 18.8 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 18.9 Counterparts. This Lease may be executed in any
number of counterparts as may be convenient or necessary, and it shall not be
necessary that the signatures of all parties hereto or thereto be contained on
any one counterpart hereof or thereof. Additionally, the parties hereto agree
that for purposes of facilitating the execution of this lease, (a) the
signature pages taken from the separate individually executed counterparts of
this lease may be combined to form multiple fully executed counterparts and (b)
a facsimile transmission shall be deemed to be an original signature for all
purposes. All executed counterparts of this Lease shall be deemed to be
originals, but all such counterparts taken together or collectively, as the
case may be, shall constitute one and the same agreement.
SECTION 18.10 Governing Law. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF TEXAS EXCEPT, WITH RESPECT TO LEASED PROPERTY LOCATED
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IN ANY STATE OTHER THAN TEXAS, FOR ISSUES WHICH ARE MANDATORILY SUBJECT TO THE
LAWS OF THE STATE IN WHICH ANY PART THE LEASED PROPERTY IS LOCATED, WHICH
ISSUES SHALL BE INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE IN WHICH SUCH PART OF THE LEASED PROPERTY IS LOCATED.
SECTION 18.11 Discharge of Lessee's Obligations by its Affiliates.
Lessor agrees that performance of any of Lessee's obligations hereunder by one
or more of Lessee's Affiliates or one or more of Lessee's sublessees of the
Leased Property or any part thereof shall constitute performance by Lessee of
such obligations to the same extent and with the same effect hereunder as if
such obligations were performed by Lessee, but no such performance shall excuse
Lessee from any obligation not performed by it or on its behalf under the
Operative Documents.
SECTION 18.12 Liability of Lessor Limited. Except as otherwise
expressly provided in this Lease or below in this Section, it is expressly
understood and agreed by and between Lessee, Lessor and their respective
successors and assigns that nothing herein contained shall be construed as
creating any personal liability of Lessor (other than for its intentional
misrepresentations of willful misconduct) or any of its constituent members or
other Affiliates, or JH Management Corporation, or any of their respective
incorporators, stockholders, officers, directors, employees or agents,
individually or personally, to perform any covenant, either express or implied,
contained herein, all such personal liability, if any, being expressly waived
by Lessee and by each and every Person now or hereafter claiming by, through or
under Lessee, and that, so far as Lessor or any of its constituent members or
other Affiliates, or JH Management Corporation, or any of their respective
incorporators, stockholders, officers, directors, employees or agents,
individually or personally, is concerned, Lessee and any Person claiming by,
through or under Lessee shall look solely to, and the liability of Lessor
hereunder shall be limited to, the right, title and interest of Lessor in the
Leased Property, any proceeds from Lessor's sale or encumbrance thereof, and
any Awards or Loss Proceeds (provided, however, that 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.
SECTION 18.13 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 the Lender,
any prospective purchaser (if such prospective purchaser has signed a
commitment or letter of intent to purchase the Leased Property or any part
thereof), assignee or mortgagee or third party designated by such other party,
a certificate stating (i) 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), (ii) the date to which
Basic Rent has been paid, (iii) whether or not there is any existing default by
Lessee in the payment of Basic Rent or any Supplemental Rent, 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, (iv) whether or not, to the knowledge
of the signer, there are any setoffs, defenses or counterclaims against
enforcement of the obligations to be performed hereunder
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existing in favor of the party executing such certificate and (v) other matters
concerning the status of this Lease and of any of the Operative Documents to
which the Lessee is a party that may be reasonably requested; provided,
however, that no such certificate may be requested unless the requesting party
has a good faith reason for such request.
SECTION 18.14 No Joint Venture. Any intention to create a joint
venture or partnership relation between Lessor and Lessee is hereby expressly
disclaimed.
SECTION 18.15 No Accord and Satisfaction. The acceptance by Lessor
of any sums from Lessee (whether as Basic Rent or otherwise) in amounts which
are less than the amounts due and payable by Lessee hereunder is not intended,
nor shall any such acceptance be construed, to constitute an accord and
satisfaction of any dispute between Lessor and Lessee regarding sums due and
payable by Lessee hereunder, unless Lessor specifically deems it as such in
writing.
SECTION 18.16 No Merger. In no event shall the leasehold
interests, estates or rights of Lessee hereunder merge with any interests,
estates or rights of Lessor in or to the Leased Property, it being understood
that such leasehold interests, estates and rights of Lessee hereunder shall be
deemed to be separate and distinct from 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 18.17 Survival. The obligations of Lessee to be performed
under this Lease prior to the Lease Termination Date and the obligations of
Lessee pursuant to Articles IV, XI, XII, XIV, Sections 15.2, 15.3, 15.4, 15.5
and 15.8, Articles XVI, XVII, and Sections 18.09 and 18.11 shall survive the
expiration or termination of this Lease. The extension of any applicable
statute of limitations by Lessor, Lessee, the Lender or any Indemnitee shall
not affect such survival.
SECTION 18.18 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
original counterpart, which shall be identified as the original counterpart by
the receipt of Lessor on its signature page.
SECTION 18.19 Time of Essence. Time is of the essence of this
Lease.
SECTION 18.20 Recordation of Lease. Lessee will, at its expense,
cause either the Lease or each Memorandum of Lease to be recorded in the proper
office or offices in the State and the municipality in which the Land is
located.
SECTION 18.21 Investment of Security Funds. Any amounts not
payable to Lessee (which amounts shall be paid to or retained by Lessor),
pursuant to any provision of Article IX, XI or XV or this Section solely
because an Event of Default shall have occurred and be continuing, shall be
held by the Lender, on behalf of Lessee, as security for the obligations of
Lessee under this Lease and the Participation Agreement. At such time as no
Event of Default shall be continuing,
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such amounts, net of any amounts previously applied to Lessee's obligations
hereunder or under the Participation Agreement, shall be paid to Lessee or such
sublessee or transferee, as the case may be. Any such amounts which are held
by the Lender pending payment to Lessee or such sublessee or transferee, as the
case may be, shall until paid to Lessee or such sublessee or transferee, as the
case may be, as provided hereunder or, as long as the Loan Agreement is in
effect, until applied against Lessee's obligations herein and under the
Participation Agreement and distributed as provided in Section 3 of the Loan
Agreement or (after the Loan Agreement is no longer in effect) in connection
with any exercise of remedies hereunder, be invested by the Lender as directed
from time to time in writing by Lessee (provided, however, if an Event of
Default has occurred and is continuing such investment will be directed by
Lessor) and at the expense and risk of Lessee, in investments reasonably
approved by the Lender. 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.
SECTION 18.22 No Illegal Interest to be Charged. All agreements
between the Lessee and the Lessee under this Lease or the Participation
Agreement are expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid to the Lessor or its successors or
assigns for the use, forbearance or detention of the money to be advanced to
the Lessee exceed the highest rate permissible under law applicable thereto by
a court of competent jurisdiction. If, from any circumstances whatever,
fulfillment of any provisions of this Lease or any of the Operative Documents
at the time performance of such provision shall be due, shall involve payment
of interest at a rate that exceeds the highest lawful rate as so determined,
then ipso facto the obligation to be fulfilled shall be reduced to such highest
lawful rate. If from any circumstances whatsoever, the Lessor or its
successors or assigns shall ever receive interest, the amount of which would
exceed such highest lawful rate, the portion thereof that would be excessive
interest shall be applied to the reduction of the unpaid Scheduled Rent;
provided, however, that nothing contained herein, in the Participation
Agreement, this Lease or any of the Operative Documents shall be deemed to
create a defense, contractual or otherwise, to any sums due or to become due or
coming due under this Lease, the Participation Agreement or any of the
Operative Documents where no such defense exists at law, as for example, where
corporations are barred from asserting the defense of usury or in a case
wherein no limit exists upon the rate of interest that may be charged.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Lease and
Development Agreement to be executed by their respective duly authorized
officers as of the day and year first above written.
WITNESSES: ASSET XVI HOLDINGS COMPANY, L.L.C., as Lessor
By: Asset Holdings Corporation I, as
Managing Member
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Name:
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Print Name: Title:
----------------------------------------- ---------------------------
EAGLE USA AIRFREIGHT, INC., as Lessee
---------------------------------------------------- By:
Print Name: -----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
----------------------------------------------------
Print Name:
-37-
42
COMMONWEALTH OF MASSACHUSETTS )
) ss:
COUNTY OF SUFFOLK )
The foregoing instrument was acknowledged before me this _____ day of
_______________, 1998, by ____________________________, the
______________________ of Asset Holdings Corporation I, a Delaware corporation,
on behalf of Asset XVI Holdings Company, L.L.C., as such person's and its free
act and deed.
(SEAL)
-----------------------------
Notary Public
My commission expires:
----------------------------------
STATE OF OHIO )
) ss:
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this _____ day of
_______________, 1998, by _______________________, the __________________, of
Eagle USA Airfreight, Inc., a Texas corporation, on behalf of the corporation,
as each such person's and its free act and deed.
---------------------------
(SEAL) Notary Public
My commission expires:
-38-
43
APPENDIX I
TO
MASTER PARTICIPATION AGREEMENT, MASTER LEASE AND
DEVELOPMENT AGREEMENT AND MASTER TRUST INDENTURE
DEFINITIONS AND INTERPRETATION
44
[See separate text]
APPENDIX II
Form of Parcel Lease Supplement
PARCEL ______ LEASE SUPPLEMENT
THIS PARCEL _____ LEASE SUPPLEMENT dated as of __________________,
199__ (this "Parcel Lease Supplement"), between ASSET XVI HOLDINGS COMPANY,
L.L.C., a Massachusetts limited liability company, as Lessor, and EAGLE USA
AIRFREIGHT, INC., a Texas corporation, as Lessee. Unless the context shall
otherwise require, capitalized terms used and not defined herein shall have the
meanings assigned thereto in the Lease (defined below) for all purposes hereof
and the rules of interpretation set forth in Appendix I to the Lease shall
apply to this Parcel Lease Supplement.
Preliminary Statement
In accordance with and subject to the terms and provisions of that
certain Master Lease and Development Agreement, dated as of April 3, 1998, (i)
the Lessor agreed, inter alia, to acquire Parcels of Land, (ii) the Lessor has
agreed to lease such Parcels of Land to the Lessee pursuant to the Lease and
Parcel Lease Supplements, (iii) the Lessee has agreed to construct Improvements
thereon for the Lessor, (iv) Lessor has agreed to lease and demise the same to
Lessee and Lessee has agreed to rent and hire the same from the Lessor as part
of the Leased Property, (v) the Lessor and the Lessee wish to obtain, and the
Lender has agreed to provide, in accordance with the Loan Agreement, funding
pursuant to a loan in the amount of up to $19,000,000 for a portion of the
costs of the acquisition of the Land and the development and construction of
the Improvements, (vi) Lessor has agreed to make Contribution Advances from its
own equity resources in an aggregate sum not to exceed $1,000,000 to pay a
portion of the cost of acquisition of the Land and the development and
construction of the Improvements; and (vii) the Lessee has identified, on
behalf of the Lessor, Parcel __ of the Land [upon which Improvements may be
constructed and] which the parties hereto desire to become part of the Leased
Property.
NOW, THEREFORE, in consideration of the mutual agreements contained in
this Parcel Lease Supplement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions. As used herein:
"Lease" means that certain Master Lease and Development Agreement,
dated as of April 3, 1998, between the Lessor and the Lessee, as amended by
[previous Lease Supplements and] this Parcel Lease Supplement, which may be
further amended, supplemented or restated from time to time.
45
"Lease Term" means, with respect to Property ________, the period
commencing on the date hereof and ending on the Scheduled Termination Date.
"Parcel______" means the Parcel located in ______________, a
description of which is attached hereto as Appendix I.
"Parcel _____ Completion Date" means the Parcel Completion Date for
Parcel ____.
"Parcel ______ Improvements" means those Improvements located,
installed and constructed, [and to be located, installed and constructed] on
the Parcel.
"Property ______" means, together, Parcel ______ and the Parcel ____
Improvements.
SECTION 2. Lease of Parcel _______. In accordance with and subject to
the terms and provisions of this Parcel Lease Supplement, of the Lease (in
particular Section 2.3 thereof), of the Participation Agreement (in particular
Section 3.24 thereof) and the other Operative Documents, Lessor does hereby
demise and lease Lessor's interest in Parcel ____ to Lessee, and Lessee hereby
rents and leases Lessor's interest in Parcel ___ from Lessor, for the Lease
Term.
SECTION 3. Lease of Parcel _______ Improvements. Lessor hereby
demises and leases Lessor's interest in the Parcel _______ Improvements
(whether or not the Construction thereof has been completed) to Lessee and
Lessee hereby rents and leases Lessor's interest in the Parcel _______
Improvements (whether or not the Construction thereof has been completed) from
Lessor, for the Lease Term. The demise and lease of the Parcel _______
Improvements pursuant to this Section 3 shall include any additional right,
title and interest in the Parcel _______ Improvements which may at any time may
be acquired by Lessor, whether in connection with the Construction of such
Improvements on an additional Parcel of the Land, as the result of an
Alteration, or otherwise, the intent being that all right, title and interest
of Lessor in and to all of the Parcel _____ Improvements, whenever constructed,
and wherever located, shall at all times be demised and leased hereunder.
SECTION 4. Construction of Parcel _______ Improvements. (a) Lessee
shall, for the benefit of Lessor, cause the Construction of the Parcel _______
Improvements, if any, to be commenced with reasonable diligence and to cause
such Construction to be performed and completed in accordance with the Plans
and Specifications pursuant to the provisions of subsection (b) below. Until
such Construction is completed, the portions of the Parcel ________
Improvements under Construction, and upon completion of Construction the
completed Parcel _______ Improvements, shall be a part of the Leased Property
(and in particular Property _______).
(b) Lessee shall cause the Construction of the Parcel _______
Improvements to occur on or prior to the Completion Deadline, subject to
extension as provided in the Lease. Lessee's obligations under this Section 4
shall not be diminished or affected by any insufficiency of the proceeds of
Loan, or as the result of the costs of acquisition of the Land or the
Construction of the Improvements or any part thereof exceeding amounts received
from the sale of the Note. In the event that the cost of acquisition of the
Land and the Construction of the Improvements, or any part thereof, exceeds the
proceeds of the Loan, such excess shall be paid by Lessee from Lessee's own
funds.
46
SECTION 5 Payment of Rent.
5.1 Basic Rent. Lessee shall pay Basic Rent in accordance with the
Lease. Lessee shall pay Index Rent and Facility Rent with respect to the
Property (subject to Section 4.1(b) of the Lease) beginning on [IN THE EVENT
CONSTRUCTION IS CONTEMPLATED: BEGINNING WITH THE FIRST RENT PAYMENT DATE
FOLLOWING THE PARCEL ___ COMPLETION DATE] [IN THE EVENT NO CONSTRUCTION IS
CONTEMPLATED: BEGINNING WITH THE FIRST RENT PAYMENT DATE FOLLOWING THE DATE
HEREOF]. Lessee shall pay installments of Scheduled Rent with respect to the
Property on the dates and in the respective amounts set forth on Appendix II
hereof.
5.2 Supplemental Rent. Lessee shall pay Supplemental Rent in
accordance with the provisions of Section 4.2 of the Lease.
SECTION 6. Condition of Parcel ________. Lessee acknowledges that
(as of the Commencement Date), Parcel ______ is [vacant and unimproved and no
part of the [parcel] Improvements has been constructed thereon, nor has such
Construction commenced.] [IMPROVED] During the Lease Term, Lessor's interest
in the Parcel _______ Improvements (whether or not completed) and Parcel _____
is demised and let by Lessor "AS IS" subject to (i) the rights of any parties
in possession thereof, (ii) the state of the title thereto existing at the time
Lessor acquired its interest in Parcel ______, (iii) any state of facts which
an accurate survey or physical inspection might show (including the survey
delivered on the Commencement Date), (iv) all applicable law and (v) any
violations of Applicable Law which may exist upon or subsequent to the
commencement of the Lease Term. LESSEE ACKNOWLEDGES THAT, ALTHOUGH LESSOR WILL
OWN AND HOLD TITLE TO PARCEL _______ PROPERTY, LESSEE IS SOLELY RESPONSIBLE FOR
THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE IMPROVEMENTS AND ANY
ALTERATIONS. NEITHER LESSOR NOR THE TRUSTEE HAVE 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
PROPERTY _______ (OR ANY PART THEREOF) OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO PROPERTY _______ (OR ANY PART
THEREOF), ALL SUCH WARRANTIES BEING HEREBY DISCLAIMED, AND NEITHER LESSOR NOR
THE TRUSTEE SHALL BE LIABLE FOR ANY LATENT, HIDDEN OR PATENT DEFECT THEREIN OR
THE FAILURE OF PROPERTY ________, OR ANY PART THEREOF, TO COMPLY WITH ANY
APPLICABLE LAW except that Lessor hereby represents and warrants Property
________ is and shall at all times remain free of Lessor Liens. As between
Lessor and Lessee, Lessee has been afforded full opportunity to inspect Parcel
_____, is satisfied with the results of its inspections of Parcel _____ and is
entering into this Parcel Lease Supplement 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 Lessor, on the one hand, and Lessee, on the
other, are to be borne by Lessee. The provisions of this Section 6 have been
negotiated and, except to the extent otherwise expressly stated, the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by Lessor or the Trustee, express or implied,
with respect to Property ________ that may arise pursuant to any law now or
hereafter in effect or otherwise.
47
SECTION 7. Relationship of Lease and Parcel Lease Supplement. This
Parcel Lease Supplement shall form a part of the Lease. All terms and
conditions contained in this Parcel Lease Supplement shall be deemed to be a
part of the terms and conditions of the Lease for any and all purposes.
Property _______ shall be deemed to be demised and leased under and subject to
the burdens and benefits of the Lease.
SECTION 8. Binding Effect. This Parcel Lease Supplement shall inure
to the benefit of and shall be binding upon the Lessor and Lessee and their
respective successors and assigns, subject, however to the limitations set
forth in the Lease and other Operative Documents.
SECTION 9. Counterparts. This Parcel Lease Supplement may be
executed in any number of counterparts as may be convenient or necessary, and
it shall not be necessary that the signatures of all parties hereto or thereto
be contained on any one counterpart hereof or thereof. Additionally, the
parties hereto agree that for purposes of facilitating the execution of this
Parcel Lease Supplement, (a) the signature pages taken from the separate
individually executed counterparts of this Parcel Lease Supplement may be
combined to form multiple fully executed counterparts and (b) a facsimile
transmission shall be deemed to be an original signature for all purposes. All
executed counterparts of this Parcel Lease Supplement shall be deemed to be
originals, but all such counterparts taken together or collectively, as the
case may be, shall constitute one and the same Parcel Lease Supplement.
SECTION 10. Severability. Any provision of this Parcel Lease
Supplement 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 Lessee
shall remain liable to perform its obligations hereunder except to the extent
of such unenforceability. To the extent permitted by Applicable Law, the
parties hereby waive any provision of law that renders any provision hereof
prohibited or unenforceable in any respect.
SECTION 11. Amendment; Complete Agreements. Neither this Parcel
Lease Supplement nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified orally, except by an instrument in writing
signed by Lessor and Lessee in accordance with the provisions of Section 8.4 of
the Participation Agreement. This Parcel Lease Supplement, together with the
other Operative Documents, is intended by the parties as a final expression of
their lease agreement in respect of Property _________ 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 the 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 Parcel Lease
Supplement other than those specifically set forth in the Operative Documents.
48
SECTION 12. Governing Law. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF TEXAS, EXCEPT, WITH RESPECT TO LEASED PROPERTY LOCATED IN ANY OTHER STATE
THAN TEXAS, FOR ISSUES THAT ARE MANDATORILY SUBJECT TO THE LAWS OF THE STATE IN
WHICH ANY PART OF THE LEASED PROPERTY IS LOCATED, WHICH ISSUES SHALL BE
INTERPRETED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE IN
WHICH SUCH PART OF THE LEASED PROPERTY IS LOCATED.
SECTION 13. Memorandum of Lease. A Memorandum of Lease
(substantially in the form of Exhibit ____ of the Participation Agreement)
relating to this Parcel Lease Supplement shall be recorded in the office of the
___________________ of ___________ County, ______________.
SECTION 14. Recourse Deficiency Amount. From and after the
Parcel __ Closing Date, the Recourse Deficiency Amount shall be
$___________________, subject to adjustment in accordance with the terms and
provisions of Appendix I to the Lease.
[THIS SPACE INTENTIONALLY LEFT BLANK]
49
IN WITNESS WHEREOF, the parties hereto have caused this Parcel _____
Lease Supplement to be executed by their respective duly authorized officers as
of the day and year first above written.
WITNESSES: ASSET XVI HOLDINGS COMPANY, L.L.C., as Lessor
By: Asset Holdings Corporation I, as Managing
Member
---------------------------------------------------
Print Name:
----------------------------------------
By:
------------------------------------------------
Name:
--------------------------------------------------- ----------------------------------------------
Print Name: Title:
---------------------------------------- ---------------------------------------------
EAGLE USA AIRFREIGHT, INC., as Lessee
--------------------------------------------------- By:
Print Name: ------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
---------------------------------------------------
Print Name:
00
XXXXXXXXXXXX XX XXXXXXXXXXXXX )
) ss:
COUNTY OF SUFFOLK )
The foregoing instrument was acknowledged before me this _____ day of
____________, 199__, by ______________, the Secretary of Asset Holdings
Corporation I, a Delaware corporation, on behalf of Asset XVI Holdings Company,
L.L.C., as such person's and its free act and deed.
(SEAL)
-----------------------------
Notary Public
My commission expires:
----------------------------------
STATE OF TEXAS )
) ss:
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this _____ day of
_______________, 19___, by _______________________, the __________________, of
Eagle USA Airfreight, Inc., a Texas corporation, on behalf of the corporation,
as each such person's and its free act and deed.
-----------------------------
(SEAL) Notary Public
My commission expires:
51
APPENDIX I
DESCRIPTION OF PARCEL________
Appendix II-1
52
APPENDIX II
SCHEDULE OF SCHEDULED RENT FOR PARCEL _______
Appendix II-1
