United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001 Commission file number 0-16633
THE JONES FINANCIAL COMPANIES, L.L.L.P.
MISSOURI 43-1450818
-----------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
12555 Manchester Road
Des Peres, Missouri 63131
-----------------------------------------------------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (314) 515-2000
------------------
|
Securities registered pursuant to Section 12(b) of the act:
Name of each exchange
Title of each class on which registered
---------------------- -----------------------
NONE NONE
------------------------------------ -------------------------------------
|
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES / X / NO / /
As of March 19, 2002 there were no voting securities held by non-affiliates of the registrant.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
ITEM 1. BUSINESS
The Jones Financial Companies, L.L.L.P. (the "Registrant" and also referred to herein as the "Partnership") is organized under the Revised Uniform Limited Partnership Act of the State of Missouri. The terms "Registrant" and "Partnership" used throughout, refer to The Jones Financial Companies, L.L.L.P. and any or all of its consolidated subsidiaries. The Partnership is the successor to Whitaker & Co., which was established in 1871 and dissolved on October 1, 1943, said date representing the organization date of Edward D. Jones & Co., L.P. ("EDJ"), the Partnership's principal subsidiary. EDJ was reorganized on August 28, 1987, which date represents the organization date of The Jones Financial Companies, L.L.L.P.
The Partnership's principal operating subsidiary, EDJ, is a registered broker/dealer primarily serving individual investors. EDJ derives its revenues from the sale of listed and unlisted securities and insurance products, investment banking, principal transactions and is a distributor of mutual fund shares. EDJ conducts business throughout the United States, Canada and the United Kingdom with its customers, various brokers and dealers, clearing organizations, depositories and banks.
The Partnership is a member firm of the New York, American, Chicago, Toronto, Montreal and London exchanges, and is a registered broker/dealer with the National Association of Securities Dealers, Inc. ("NASD").
As of January 25, 2002, the Partnership was comprised of 210 general partners, 5,401 limited partners and 127 subordinated limited partners.
At December 31, 2001, the Partnership is organized as follows: The Partnership owns 100% of the outstanding common stock of EDJ Holding Company, Inc., a Missouri corporation and 100% of the outstanding common stock of LHC, Inc. ("LHC"), a Missouri corporation. The Partnership also holds all of the partnership equity of Edward D. Jones & Co., L.P., a Missouri limited partnership and EDJ Leasing Co., L.P., a Missouri limited partnership. EDJ Holding Company, Inc. and LHC, Inc. are the general partners of Edward D. Jones & Co., L.P. and EDJ Leasing Co., L.P., respectively. In addition, the Partnership owns 100% of the outstanding common stock of Conestoga Securities, Inc., a Missouri corporation and also owns, as a limited partner, 49.5% of Passport Research Ltd., a Pennsylvania limited partnership, which acts as an investment advisor to a money market mutual fund. The Partnership owns 100% of the partnership equity of Edward Jones, an Ontario, Canada limited partnership and all of the common stock of Edward D. Jones & Co. Canada Holding Co., Inc., an Ontario, Canada corporation, its general partner. Through its Canadian entities, the Partnership owns all of the partnership equity of Edward Jones Insurance Agency, an Ontario, Canada limited partnership, and all of the common stock of Edward D. Jones & Co. Agency Holding Co., Inc., an Ontario, Canada corporation, its general partner. The Partnership also owns 100% of the equity of Edward Jones Limited, a U.K. private limited company, which owns 100% of the equity of Edward Jones Nominees Limited, Edward Jones Nominees PEP Limited, and Edward Jones Nominees ISA Limited. The Partnership owns 100% of the equity of Boone National Savings and Loan Association, F.A., ("Association"), a federally chartered stock savings and loan association. The Partnership also owns 100% of the equity of EJ Mortgage L.L.C., a Missouri limited liability company. EJ Mortgage L.L.C. owns 50% of Edward Jones Mortgage, a joint venture. The Partnership holds all of the partnership equity in a Missouri limited partnership, EDJ Ventures, Ltd. Conestoga Securities, Inc., is the general partner of EDJ Ventures, Ltd.
The Partnership is the sole member of Edward Jones Insurance Agency Holding, L.L.C., a Missouri limited liability company; California Agency Holding, L.L.C., a California limited liability company and Edward Jones Insurance Agency of Nevada, Inc., a Nevada limited liability company and Edward Jones Insurance Agency of New Mexico, L.L.C., a New Mexico limited liability company. Edward Jones
PART I
Insurance Agency Holding, L.L.C. is the sole member of Edward Jones Insurance Agency of Wyoming, L.L.C., a Wyoming limited liability company and Edward Jones Insurance Agency of Michigan, L.L.C., a Michigan limited liability company. The Partnership and Edward Jones Insurance Agency Holding, L.L.C. are multi-members of Edward Jones Insurance Agency of Massachusetts, L.L.C., a Massachusetts limited liability company; Edward Jones Insurance Agency of Alabama, L.L.C., an Alabama limited liability company; Edward Jones Insurance Agency of Montana, L.L.C., a Montana limited liability company; and EJ Insurance Agency of Ohio, an Ohio limited liability company. Edward Jones Insurance Agency Holding, L.L.C. and California Agency Holding, L.L.C. are multi-members of Edward Jones Insurance Agency of California, L.L.C., a California limited liability company. The Partnership is an affiliate of EDJ Insurance Agency of Texas, Inc. All of the insurance agencies engage in general insurance brokerage activities.
The Partnership holds all of the partnership equity of Unison Investment Trusts, L.P., d/b/a Unison Investment Trusts, Ltd., a Missouri limited partnership, which has sponsored unit investment trusts. The general partner of Unison Investment Trusts, L.P., Unison Capital Corp., Inc., a Missouri corporation, is wholly owned by LHC. EDJ owns 100% of the outstanding common stock of Cornerstone Mortgage Investment Group II, Inc., a Delaware limited purpose corporation which has structured and sold secured mortgage bonds. EDJ also owns 50% of issued common stock of S-J Capital Corp., a Missouri corporation. Conestoga owns 100% of the outstanding stock of CIP Management, Inc., which is the managing general partner of CIP Management, L.P. CIP Management, L.P. is the managing general partner of Community Investment Partners II, L.P., Community Investment Partners III, L.P., L.L.L.P., and Community Investment Partners IV, L.P., L.L.L.P., business development companies.
During 2001, the Partnership affiliates Patronus, Inc. and EDJ Investment Advisory Services were dissolved. Neither had conducted active businesses.
Within the past five years, the Registrant has added several new legal entities. In 1997, Edward Jones Limited, a U.K. private limited company, was organized. During 1998, the Registrant began brokerage operations in the United Kingdom under this entity. During 1998, EJ Mortgage L.L.C. was established. EJ Mortgage L.L.C., a wholly owned subsidiary of EDJ, owns 50% of Edward Jones Mortgage, a joint venture offering residential mortgage lending services to EDJ's customers. Due to state laws and regulations, certain states require separate legal entities to transact insurance business. During 1998, changes were made to certain insurance entities as a result of changes in state laws and regulations. The following entity was added: Edward Jones Insurance Agency of Michigan, L.L.C., a limited liability company. During 2000, Edward Jones Nominees Limited, Edward Jones Nominees PEP Limited, and Edward Jones Nominee ISA Limited, all three which are U.K. private limited companies, were organized. United Kingdom regulations require separate companies for the holding of client investments in firm name.
PART I
REVENUES BY SOURCE. The following table sets forth, for the past three years, the sources of the Partnership's revenues by dollar amounts (all amounts in thousands):
2001 2000 1999
Commissions
Listed $ 219,359 $ 272,260 $ 190,313
Mutual Funds 740,209 749,144 583,444
O-T-C 77,618 170,058 168,177
Insurance 216,009 222,175 205,801
Other 667 837 551
Principal Transactions 370,327 264,361 270,830
Investment Banking 24,676 29,545 20,953
Interest and Dividends 176,277 224,497 149,041
Sub-Transfer Agent Revenue 95,022 69,874 34,254
Mutual Fund & Insurance Revenue 79,107 89,993 64,564
Money Market Revenue 73,594 60,604 52,897
IRA Custodial Service Fees 38,554 30,591 21,965
Other Revenue 30,578 28,021 24,044
----------- ----------- -----------
Total Revenue $ 2,141,997 $ 2,211,960 $ 1,786,834
===========================================================================================================
|
Because of the interdependence of the activities and departments of the Partnership's investment business and the arbitrary assumptions involved in allocating overhead, it is impractical to identify and specify expenses applicable to each aspect of the Partnership's operations. Furthermore, the net income of firms principally engaged in the securities business, including the Partnership's, is affected by interest savings as a result of customer and other credit balances and interest earned on customer margin accounts.
LISTED BROKERAGE TRANSACTIONS. A portion of the Partnership's revenue is derived from customer transactions in which the Partnership acts as agent in the purchase and sale of listed corporate securities. These securities include common and preferred stocks and corporate debt securities traded on and off the securities exchanges. Revenue from brokerage transactions is highly influenced by the volume of business and securities prices.
Customer transactions in securities are effected on either a cash or a margin basis. In a margin account, the Partnership lends the customer a portion of the purchase price up to the limits imposed by the margin regulations of the Federal Reserve Board ("Regulation T"), New York Stock Exchange ("NYSE") margin requirements, or the Partnership's internal policies, which may be more stringent than the regulatory minimum requirements. Such loans are secured by the securities held in customer margin accounts. These loans provide a source of income to the Partnership since it is able to lend to customers at rates which are higher than the rates at which it is able to borrow on a secured basis. The Partnership is permitted to use as collateral for the borrowings, securities owned by margin customers having an
PART I
aggregate market value generally up to 140% of the debit balance in margin accounts. The Partnership may also use funds provided by free credit balances in customer accounts to finance customer margin account borrowings.
In permitting customers to purchase securities on margin, the Partnership assumes the risk of a market decline which could reduce the value of its collateral below a customer's indebtedness before the collateral is sold. Under the NYSE rules, the Partnership is required in the event of a decline in the market value of the securities in a margin account to require the customer to deposit additional securities or cash so that at all times the loan to the customer is no greater than 75% of the value of the securities in the account (or to sell a sufficient amount of securities in order to maintain this percentage). The Partnership, however, imposes a more stringent maintenance requirement.
Variations in revenues from listed brokerage commissions between periods is largely a function of market conditions; however, some portion of the overall increases in 2000 and 1999 were due to the growth in the number of investment representatives over these periods.
MUTUAL FUNDS. The Partnership distributes mutual fund shares in continuous offerings and new underwritings. As a dealer in mutual fund shares, the Partnership receives a dealers' discount which generally ranges from 1% to 5 3/4% of the purchase price of the shares, depending on the terms of the dealer agreement and the amount of the purchase. The Partnership also earns service fees which are generally based on 15 to 25 basis points of its customer assets which are held by the mutual funds. The Partnership does not manage any mutual fund, although it is a limited partner of Passport Research, Ltd., an advisor to a money market mutual fund.
OVER-THE-COUNTER TRANSACTIONS. Partnership activities in unlisted (over-the-counter) transactions are essentially similar to its activities as a broker in listed securities. In connection with customer orders to buy or sell securities, the Partnership charges a commission for both principal and agency transactions.
INSURANCE. The Partnership has executed agency agreements with various national insurance companies. EDJ is able to offer life insurance, long term care insurance, and fixed and variable annuities to its customers through substantially all of its investment representatives who hold insurance sales licenses. As an agent for the insurance company, the Partnership receives commission on the purchase price of the policy. The Partnership also earns service fees which are generally based on its customer assets held by the insurance companies.
PRINCIPAL TRANSACTIONS. The Partnership makes a market in over-the-counter corporate securities, municipal obligations, U.S. Government obligations, including general obligations and revenue bonds, unit investment trusts and mortgage-backed securities. The Partnership's market-making activities are conducted with other dealers in the "wholesale" market and "retail" market wherein the Partnership acts as a dealer buying from and selling to its customers. In making markets in principal and over-the-counter securities, the Partnership exposes its capital to the risk of fluctuation in the market value of its security positions. It is the Partnership's policy not to trade for its own account.
As in the case of listed brokerage transactions, revenue from over-the-counter and principal transactions is highly influenced by the volume of business and securities prices, as well as by the increasing number of investment representatives employed by the Partnership over the periods indicated.
INVESTMENT BANKING. The Partnership's investment banking activities are performed by its Syndicate and Underwriting Departments. The principal service which the Partnership renders as an investment banker is the underwriting and distribution of securities either in a primary distribution on behalf of the issuer of such securities, or in a secondary distribution on behalf of a holder of such securities. The distributions of
PART I
corporate and municipal securities are, in most cases, underwritten by a group or syndicate of underwriters. Each underwriter has a participation in the offering.
Unlike many larger firms against which the Partnership competes, the Partnership does not presently engage in other investment banking activities such as assisting in mergers and acquisitions, arranging private placement of securities issues with institutions or providing consulting and financial advisory services to corporations.
The Syndicate and Underwriting Departments are responsible for the largest portion of the Partnership's investment banking business. In the case of an underwritten offering managed by the Partnership, these departments may form underwriting syndicates and work closely with the branch office system for sales of the Partnership's own participation and with other members of the syndicate in the pricing and negotiation of other terms. In offerings managed by others in which the Partnership participates as a syndicate member, these departments serve as active coordinators between the managing underwriter and the Partnership's branch office system.
The underwriting activity of the Partnership involves substantial risks. An underwriter may incur losses if it is unable to resell the securities it is committed to purchase or if it is forced to liquidate all or part of its commitment at less than the agreed upon purchase price. Furthermore, the commitment of capital to an underwriting may adversely affect the Partnership's capital position and, as such, its participation in an underwriting may be limited by the requirement that it must at all times be in compliance with the Securities and Exchange Commission's uniform Net Capital Rule.
The Securities Act of 1933 and other applicable laws and regulations impose substantial potential liabilities on underwriters for material misstatements or omissions in the prospectus used to describe the offered securities. In addition, there exists a potential for possible conflict of interest between an underwriter's desire to sell its securities and its obligation to its customers not to recommend unsuitable securities. In recent years there has been an increasing incidence of litigation in these areas. These lawsuits are frequently brought for the benefit of large classes of purchasers of underwritten securities. Such lawsuits often name underwriters as defendants and typically seek substantial amounts in damages.
INTEREST AND DIVIDENDS. Interest and dividend income is earned primarily on margin account balances, investment securities, and securities held. Interest is also earned by the Association on its loan portfolio.
MONEY MARKET FEES, IRA CUSTODIAL SERVICE FEES AND OTHER REVENUES. Other revenue sources include money market management fees, IRA custodial services fees, sub-transfer agent accounting services, revenue sharing, gains from sales of certain assets, and other product and service fees.
The Partnership charges a fee to certain mutual funds which it distributes, for sub-accounting services it performs for accounts registered in firm name. Additionally, under certain agreements, non-commission revenue is received from companies whose mutual funds and insurance products the Partnership distributes. The Partnership has an interest in the investment advisor to its money market fund, Daily Passport Cash Trust. Revenue from this source has increased over the periods due to growth in the fund, both in dollars invested and number of accounts. EDJ is also the custodian for its IRA accounts and charges customers an annual fee for its services.
The Partnership has registered an investment advisory program with the Securities and Exchange Commission ("SEC") under the Investment Advisors Act of 1940. This service is offered firmwide and involves income and estate tax planning and analysis for clients. Revenues from this source are insignificant and are included under "Other Revenues."
PART I
The Partnership also offers trust services to its customers through the Edward Jones Trust Company, a division of the Association. The Partnership offers a co-branded credit card with a major credit card company and receives revenue from this service. In 1998, the Partnership began offering mortgage loans to its customers through a joint venture.
RESEARCH DEPARTMENT. The Partnership maintains a Research Department to provide specific investment recommendations and market information for retail customers. The Department supplements its own research with the services of various independent research services. The Partnership competes with many other securities firms with substantially larger research staffs in its research activities.
CUSTOMER ACCOUNT ADMINISTRATION AND OPERATIONS. Operations associates are responsible for activities relating to customer securities and the processing of transactions with other broker/dealers. These activities include receipt, identification, and delivery of funds and securities, internal financial controls, accounting and personnel functions, office services, storage of customer securities and the handling of margin accounts. The Partnership processes substantially all of its own transactions. It is important that the Partnership maintain current and accurate books and records from both a profit viewpoint as well as for regulatory compliance. To expedite the processing of orders, the Partnership's branch office system is linked to the St. Louis headquarters office through an extensive communications network. Orders for all securities are captured at the branch electronically, routed to St. Louis and forwarded to the appropriate market for execution. The Partnership's processing of paperwork following the execution of a security transaction is automated, and operations are generally on a current basis.
There is considerable fluctuation during any one year and from year to year in the volume of transactions the Partnership processes. The Partnership records transactions and posts its books on a daily basis. Operations personnel monitor day-to-day operations to determine compliance with applicable laws, rules and regulations. Failure to keep current and accurate books and records can render the Partnership liable to disciplinary action by governmental and self-regulatory organizations.
The Partnership has a computerized branch office communication system which is principally utilized for entry of security orders, quotations, messages between offices, research of various customer account information, and cash and security receipts functions.
The Partnership clears and settles virtually all of its listed transactions through the National Securities Clearing Corporation ("NSCC"), New York, New York. NSCC effects clearing of securities on the New York, American and Chicago Stock Exchanges.
In conjunction with clearing and settling transactions with NSCC, the Partnership holds customer securities on deposit with the Depository Trust Company ("DTC") in lieu of maintaining physical custody of the certificates. The Partnership also uses Participant Trust Company for custody of Government National Mortgage Association ("GNMA") securities and a major bank for custody of treasury securities.
The Partnership's United Kingdom operation clears and settles virtually all of its listed transactions through CREST. CREST effects clearing of securities on the London Stock Exchange. In conjunction with clearing and settling transactions with CREST, the Partnership's United Kingdom operation holds customer securities on deposit with CREST in lieu of maintaining physical custody of the certificates. The Partnership's United Kingdom operation also uses DTC for custody of United States securities, a major independent brokerage firm for custody of non-United Kingdom and non-United States securities, and individual unit trust vendors for custody of unit trust holdings.
The Partnership is substantially dependent upon the operational capacity and ability of NSCC/DTC/CREST. Any serious delays in the processing of securities transactions encountered by
PART I
NSCC/DTC/CREST may result in delays of delivery of cash or securities to the Partnership's customers. These services are performed for the Partnership under contracts which may be changed or terminated at will by either party.
Automated Data Processing, Inc., ("ADP") and National Bank of Canada provide automated data processing services for customer account activity and related records for the United States and Canada, respectively.
In Canada, the Partnership has entered into an introducing/carrying arrangement with National Bank of Canada. As the carrying broker, National Bank of Canada handles the routing and settlement of customer transactions. Transactions are settled through the Canadian Depository for Securities ("CDS"), of which National Bank of Canada is a member. CDS effects clearing of securities on the Toronto, Montreal, and CDNX stock exchanges. Customer securities on deposit are also held with CDS.
The Partnership does not employ its own floor broker for transactions on exchanges. The Partnership has arrangements with other brokers to execute the Partnership's transactions in return for a commission based on the size and type of trade. If, for any reason, any of the Partnership's clearing, settling or executing agents were to fail, the Partnership and its customers would be subject to possible loss. Customers are protected by the Securities Investors Protection Corporation ("SIPC") in the United States, Investors Compensation Scheme ("ICS") in the United Kingdom, and Canadian Investor Protection Fund ("CIPF") in Canada, and through excess insurance coverage maintained by the Partnership in The United States and the United Kingdom. In Canada, excess insurance coverage is maintained by National Bank of Canada. The coverage provided by SIPC, ICS and CIPF, and protection in excess limits thereof, would be available to customers of the Partnership. To the extent that the Partnership would not be able to meet the obligations of the customers, such customers might experience delays in obtaining the protections afforded them. The Partnership believes that its internal controls and safeguards concerning the risks of securities thefts are adequate. Although the possibility of securities thefts is a risk of the industry, the Partnership has not had, to date, a significant problem with such thefts. The Partnership maintains fidelity bonding insurance which, in the opinion of management, provides adequate coverage.
EMPLOYEES. Including its 210 general partners, the Partnership has approximately 26,460 full and part-time employees. This includes 8,526 registered salespeople as of January 25, 2002. The Partnership's salespersons are compensated on a commission basis and may, in addition, be entitled to bonus compensation based on their respective branch office profitability and the profitability of the Partnership. The Partnership has no formal bonus plan for its non-registered employees. The Partnership has, however, in the past paid bonuses to its non-registered employees on an informal basis, but there can be no assurance that such bonuses will be paid for any given period or will be within any specific range of amounts.
Employees of the Partnership are bonded under a blanket policy as required by NYSE rules. The annual aggregate amount of coverage is $50,000,000 subject to a $2,000,000 deductible provision, per occurrence.
The Partnership maintains a training program for prospective salespeople which includes nine weeks of concentrated instruction and on-the-job training in a branch office. During the first phase the trainee spends 60 days studying Series 7 examination materials and taking the examination. Also during this study period, the trainees spend up to 20 hours a week in a branch office to learn the mechanics of running a branch office. After passing the examination, trainees spend one week in a comprehensive training program in St. Louis followed by three weeks at a designated location to conduct market research and prepare for opening the office. The trainee then spends three weeks of on-the-job training in a branch location reviewing investments, office procedures and sales techniques. Next, the trainee returns to his
PART I
or her designated location for one week to continue building a prospect base. One final week is then spent in a central location to complete the initial training program. Two and four months later, the investment representative attends additional training classes in St. Louis, and subsequently, EDJ offers periodic continuing training to its experienced sales force. EDJ's basic brokerage payout is similar to its competitors.
The Partnership considers its employee relations to be good and believes that its compensation and employee benefits which include medical, life, disability insurance plans, profit sharing and deferred compensation retirement plans, are competitive with those offered by other firms principally engaged in the securities business.
BRANCH OFFICE NETWORK. The Partnership operates 8,127 branch offices as of January 25, 2002, primarily staffed by a single investment representative. The Partnership operates 7,507 offices in the United States located in all 50 states, predominantly in communities with populations of under 50,000 and metropolitan suburbs. The Partnership also operates in Canada (through 518 offices as of January 25, 2002) and the United Kingdom (through 102 offices as of January 25, 2002).
COMPETITION. The Partnership is subject to intensive competition in all phases of its business from other securities firms, many of which are substantially larger than the Partnership in terms of capital, brokerage volume and underwriting activities. In addition, the Partnership encounters competition from other organizations such as banks, insurance companies, and others offering financial services and advice. The Partnership also competes with a number of firms offering discount brokerage services, usually with lower levels of service to individual customers. In recent periods, many regulatory requirements prohibiting non-securities firms from engaging in certain aspects of brokerage firms' business have been eliminated and further removal of such prohibitions is anticipated. With minor exceptions, customers are free to transfer their business to competing organizations at any time. There is intense competition among securities firms for salespeople with good sales production records. In recent periods, the Partnership has experienced increasing efforts by competing firms to hire away its registered representatives although the Partnership believes that its rate of turnover of investment representatives is not higher than that of other firms comparable to the Partnership.
REGULATION. The securities industry in the United States is subject to extensive regulation under both federal and state laws. The SEC is the federal agency responsible for the administration of the federal securities laws. The Partnership's principal subsidiary is registered as a broker-dealer and investment advisor with the SEC. Much of the regulation of broker-dealers has been delegated to self-regulatory organizations, principally the NASD and national securities exchanges such as the NYSE, which has been designated by the SEC as the Partnership's primary regulator. These self-regulatory organizations adopt rules (which are subject to approval by the SEC) that govern the industry and conduct periodic examinations of the Partnership's operations. Securities firms are also subject to regulation by state securities administrators in those states in which they conduct business. EDJ or an affiliate is registered as a broker-dealer in 50 states, Puerto Rico, Canada and the United Kingdom.
Broker-dealers are subject to regulations which cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of customer funds and securities, capital structure of securities firms, record-keeping and the conduct of directors, officers and employees. Additional legislation, changes in rules promulgated by the SEC and self-regulatory organizations, or changes in the interpretation or enforcement of existing laws and rules, may directly affect the mode of operation and profitability of broker-dealers. The SEC, self-regulatory organizations and state securities commissions may conduct administrative proceedings which can result in censure, fine, suspension or expulsion of a broker-dealer, its officers or employees. The principal purpose of regulation and discipline of broker-dealers is the protection of customers and the securities markets, rather than protection of the
PART I
creditors and stockholders of broker-dealers. In addition, EDJ conducts business in Canada, through a subsidiary partnership which is regulated by the Investment Dealers Association of Canada and in the United Kingdom which is regulated by The Financial Services Authority. As a federally chartered savings and loan, the Association is subject to regulation by the Office of Thrift Supervision ("OTS").
UNIFORM NET CAPITAL RULE. As a broker-dealer and a member firm of the NYSE, the Partnership is subject to the Uniform Net Capital Rule ("Rule") promulgated by the SEC. The Rule is designed to measure the general financial integrity and liquidity of a broker-dealer and the minimum Net Capital deemed necessary to meet the broker-dealer's continuing commitments to its customers. The Rule provides for two methods of computing Net Capital and the Partnership has adopted what is generally referred to as the alternative method. Minimum required Net Capital under the alternative method is equal to 2% of the customer debit balances, as defined. The Rule prohibits withdrawal of equity capital whether by payment of dividends, repurchase of stock or other means, if Net Capital would thereafter be less than 5% of customer debit balances. Additionally, certain withdrawals require the consent of the SEC to the extent they exceed defined levels even though such withdrawals would not cause Net Capital to be less than 5% of aggregate debit items. In computing Net Capital, various adjustments are made to exclude assets which are not readily convertible into cash and to provide a conservative statement of other assets such as a company's inventories. Failure to maintain the required Net Capital may subject a firm to suspension or expulsion by the NYSE, the SEC and other regulatory bodies and may ultimately require its liquidation. The Partnership has, at all times, been in compliance with the Net Capital Rule.
The firm has other operating subsidiaries, including the Association and broker/dealer subsidiaries in Canada and the United Kingdom. These wholly owned subsidiaries are required to maintain specified levels of liquidity and capital standards. Each subsidiary is in compliance with the applicable regulations as of December 31, 2001.
ITEM 2. PROPERTIES
The Partnership conducts its headquarters operations from three locations in St. Louis County, Missouri, and one location in Tempe, Arizona, comprising twenty-three separate buildings. Nineteen buildings are owned by the Partnership and four buildings are leased through long-term operating leases. In addition, the Partnership leases its Canadian headquarters facility in Mississauga, Ontario through an operating lease and has a long-term operating lease for its United Kingdom headquarters located in London, England. The Partnership also maintains facilities in 8,127 branch locations (as of January 25, 2002) which are located in the United States, Canada and the United Kingdom and are rented under predominantly cancelable leases. The Partnership believes that its properties are both suitable and adequate to meet the current and future growth projections of the organization.
ITEM 3. LEGAL PROCEEDINGS
In recent years there has been an increasing incidence of litigation involving the securities industry. Such suits often seek to benefit large classes of industry customers; many name securities dealers as defendants along with exchanges in which they hold membership and seek large sums as damages under federal and state securities laws, anti-trust laws, and common law.
Various legal actions are pending against the Partnership, with certain cases claiming substantial damages. These actions are in various stages and the results of such actions cannot be predicted with certainty. In the opinion of management, after consultation with legal counsel, the ultimate resolution of these actions is not expected to have a material adverse impact on the Partnership's operations or financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Limited or Subordinated Limited Partnership interests and their assignment is prohibited.
ITEM 6. SELECTED FINANCIAL DATA
The following information sets forth, for the past five years, selected financial data. (All amounts in thousands, except per unit information.)
Summary Income Statement Data:
2001 2000 1999 1998* 1997
Revenue $ 2,141,997 $ 2,211,960 $ 1,786,834 $ 1,449,963 $ 1,135,279
Net income $ 149,186 $ 229,823 $ 187,331 $ 199,209 $ 114,184
Net income per
weighted average
$1,000 equivalent
limited partnership
unit outstanding $ 96.89 $ 179.21 $ 173.81 $ 274.30 $ 176.06
Weighted average
$1,000 equivalent
limited partnership
units outstanding 236,696 175,436 150,670 103,747 93,962
Net income per
weighted average
$1,000 equivalent
subordinated limited
partnership unit
outstanding $ 181.70 $ 333.92 $ 325.21 $ 448.17 $ 320.61
Weighted average
$1,000 equivalent
subordinated limited
partnership units
outstanding 82,273 63,770 51,741 44,026 37,332
-----------------------------------------------------------------------------------------------------------------
|
PART II
Item 6. Selected Financial Data
Summary Balance Sheet Data:
2001 2000 1999 1998* 1997
Total assets $ 3,158,408 $ 3,170,385 $ 2,693,241 $ 2,118,844 $ 1,554,798
=========== =========== =========== =========== ===========
Long-term debt $ 46,285 $ 29,618 $ 34,540 $ 41,825 $ 53,350
Other liabilities,
exclusive of
subordinated
liabilities 2,231,807 2,252,961 1,908,117 1,434,020 979,797
Subordinated liabilities 205,600 232,325 259,050 200,275 216,500
Total partnership capital 674,716 655,481 491,534 442,724 305,151
Total liabilities and
partnership capital $ 3,158,408 $ 3,170,385 $ 2,693,241 $ 2,118,844 $ 1,554,798
=========== =========== =========== =========== ===========
* Net income for 1998 included a $41.0 million gain on investment in
Federated Investors. The Partnership acquired a small interest in Federated
in 1989 for $1.0 million as a strategic investment. During 1998, the
Partnership sold a significant portion of its investment in Federated's
initial public offering.
|
PART II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table summarizes the increase (decrease) in major categories of revenues and expenses for the last two years (dollar amounts in thousands).
2001 vs. 2000 2000 vs. 1999
-------------------------- -------------------------
Amount Percentage Amount Percentage
Net Revenue:
Commissions $ (160,612) (11)% $ 266,188 23%
Principal transactions 105,966 40 (6,469) (2)
Investment banking (4,869) (16) 8,592 41
Interest and dividends (48,220) (21) 75,456 51
Other 37,772 14 81,359 41
---------- ---------
Total revenue (69,963) (3) 425,126 24
Interest expense (21,194) (24) 29,227 50
---------- ---------
Net revenue (48,769) (2) 395,899 23
---------- ---------
Operating Expenses:
Compensation and benefits (37,233) (3) 213,135 21
Communications and data
processing 21,969 10 34,312 19
Occupancy and equipment 28,726 16 48,159 36
Payroll and other taxes 6,584 10 13,175 24
Floor brokerage and
clearance fees (3,208) (18) 5,093 41
Other operating expenses 15,030 8 39,533 29
---------- ---------
Total operating expenses 31,868 2 353,407 23
---------- ---------
Net Income $ (80,637) (35)% $ 42,492 23%
============================================================================================================
|
PART II
RESULTS OF OPERATIONS (2001 VERSUS 2000)
The Partnership's net revenue and net income for the year ended December 31, 2001 decreased from the prior year due primarily to the impact of market conditions which resulted in lower customer activity, lower customer asset values and lower net interest income. Net revenue decreased 2% ($48.8 million) to $2.076 billion and net income decreased 35% ($80.6 million) to $149.2 million.
The Partnership classifies its revenues as trade revenue (revenue from buy or sell transactions on securities) and net fee revenue (sources other than trade revenues, net of interest expense). Trade revenue of $1.372 billion and $1.418 billion comprised 66% and 67% of net revenue for 2001 and 2000. Conversely, net fee revenue sources, such as service fees, management fees, IRA fees and net interest income, of $703.7 million and $706.6 million were 34% and 33% of net revenue for 2001 and 2000.
Trade revenue decreased 3% ($45.8 million) during 2001 due primarily to a decrease in customer dollars invested. Total customer dollars underlying buy or sell transactions were $50.8 billion during 2001, a 17% ($10.5 billion) decrease from 2000. The impact of lower customer activity was partially offset by an increase in the margin earned on each $1,000 invested, to $26.30 in 2001 from $22.60 in 2000. Year over year, the composition of the product mix, based on customer dollars invested, has shifted from individual equities and CDs, which have lower margins, to higher margin fixed income, mutual funds, and insurance products. Individual equities decreased to 28% from 44%, and CD's decreased to 6% from 11%. Fixed income increased to 33% from 18%, mutual funds increased to 26% from 22%, and insurance increased to 7% from 5%. The Partnership added 1,082 IRs since December 31, 2000, ending 2001 with 8,516 IRs in the United States, Canada and the United Kingdom, an increase of 15%. The increase in IRs partially mitigated the impact of the market downturn on trade revenues.
Net fee revenues (fee revenues less interest expense), which include service fees, sub-transfer agent accounting services, revenue sharing agreements with mutual funds and insurance companies, money market management fees, net interest income, IRA custodial fees and other fees, decreased $3.0 million during 2001. Net interest income decreased 20% ($27.0 million) in 2001 due primarily to the impact of rate reductions in the current year narrowing the interest margins combined with a small decrease in customer loans outstanding. Customer loans were $1.9 billion at December 31, 2001 compared to $2.0 billion at December 31, 2000. Service fees decreased 4% ($11.9 million) during 2001 as the underlying value of customer assets was impacted by market conditions. The average of the aggregate customer assets related to service fees decreased from $117.6 billion at December 31, 2000, to $114.6 billion at December 31, 20001. Other fee revenue sources increased 13% ($35.9 million) for 2001 due primarily to growth in revenue from sub-transfer agent accounting services, money market fees, and IRA fees.
Focusing on changes in major revenue categories, commissions revenue, including service fees, decreased 11% ($160.6 million) during 2001. Listed and over-the-counter (OTC) agency commissions decreased 33% ($145.3 million), due to the shift in product mix away from individual equities. Mutual fund commissions decreased 1% ($8.9 million) due to the impact of market conditions on service fees. Mutual
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
fund commissions decreased, even though customer dollars invested in mutual funds increased as a percentage of the product mix.
Principal transactions revenue increased 40% ($106.0 million) during 2001. The increase is primarily attributable to an increase in corporate, US government and municipal bonds, and mortgage-backed securities, offset by a decrease in CD sales.
Other revenue, comprised of various fee revenue sources, increased 14% ($37.8 million) for 2001. Revenue received from money market and subtransfer agent services increased 13% ($26.7 million). Additionally, the number of IRA accounts increased, resulting in custodial fee revenue growth of 26% ($8.0 million).
Interest expense decreased 24% ($21.2 million) during 2001, due to a decrease in bank loans outstanding and lower interest rates. The average of the aggregate short-term bank loans outstanding was $272,000 during 2001, compared to $413,000 during 2000.
Operating expenses increased 2% ($31.9 million) to $1.9 billion during 2001. Occupancy and equipment expenses increased 16% ($28.7 million) and communications and data processing expenses increased 10% ($22.0 million) during 2001. The Partnership continues to expand its headquarters, branch locations and communications systems to enable it to continue to increase its number of IRs, locations and customers.
Compensation costs decreased 3% ($37.2 million). Variable compensation, including bonuses and profit sharing paid to investment representatives, branch office assistants and headquarters associates, which expands and contracts in relation to revenues, net income and profit margin, decreased 54% ($105.9 million) due to the lower revenue and earning levels. Sales compensation decreased 1% ($6.5 million) due to the decrease in trade revenue and service fees. Offsetting these decreases in compensation expense was a 21% ($81.4 million) increase in compensation expense for existing personnel and additional support personnel at both the headquarters and in the branches due to growth in the sales force. On a full time equivalent basis, the firm had 3,748 headquarters associates and 8,632 branch staff as of December 31, 2001, compared to 3,547 headquarters associates and 7,625 branch staff as of December 31, 2000.
RESULTS OF OPERATIONS (2000 VERSUS 1999)
The Partnership attained record levels of net revenue and net income for the year ended December 31, 2000 due primarily to active securities markets and growth in its sales force. Net revenues increased 23% ($395.9 million) to $2.124 billion and net income increased 23% ($42.5 million) to $229.8 million.
The partnership classifies its revenues as trade revenue (revenue from buy or sell transactions on securities) and net fee revenue (sources other than trade revenues). Trade revenue comprised 67% of net revenue for 2000, down from 70% in 1999. Conversely, net fee revenue sources, such as service fees, management fees, IRA fees and net interest income, were 33% of net revenue for 2000, up from 30% in 1999.
Trade revenue increased 17% ($202.5 million) during 2000. Trade revenue increased due to an increase in the number of investment representatives (IRs) and customer dollars invested. The Partnership added 1,495 IRs since December 31, 1999 (25%), ending 2000 with 7,434 IRs in the United States, Canada and the United Kingdom. Total customer dollars invested were $61.3 billion during 2000, representing a 15% ($8.1 billion) increase over 1999. The firm experienced record levels of customer activity, net revenue and net income in the first quarter of 2000. Beginning in the second quarter of 2000, the securities
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
markets began to move lower and customer activity slowed. The firm's revenues and net income slowed in the second, third and fourth quarters even though the Partnership continued to expand its sales force.
Net fee revenues, which include service fees, revenue sharing agreements with mutual fund and insurance companies, net interest income, IRA custodial fees, subtransfer agent fees and other fees, increased 38% ($193.4 million) during 2000. Underlying net fee revenue is the value of customer assets. Total customer assets increased 7% ($17.1 billion) year over year to $245.7 billion due to market fluctuations and growth in the number of customers served by the Partnership. Additionally, the Partnership's continued expansion in recent years of its product and service offerings has had a positive impact on net fee revenue sources.
Focusing on changes in major revenue categories, commissions revenue, including service fees, increased 23% ($266.2 million) during 2000. Mutual fund commissions increased 28% ($165.7 million) during 2000. Listed commissions increased 43% ($81.9 million). The firm experienced growth in commissions due to the highly active securities markets and growth in the number of IRs.
Principal transactions revenue decreased 2% ($6.5 million) during 2000. The decrease is due primarily to a shift away from fixed income products and towards equities and mutual funds.
Investment banking revenues increased 41% ($8.6 million), due primarily to an increased number of corporate debt underwritings ($7.0 million or 80%).
Interest and dividend revenues increased 51% ($75.5 million) during 2000. Interest from customer loans increased 60% ($74.4 million) as the Partnership's customer loan balances increased 22% ($363.9 million) year over year to $2.0 billion at December 31, 2000. The average of customer loan balances was $1.9 billion during 2000, compared to $1.4 billion during 1999. Interest expense increased 50% ($29.2 million) during 2000, due primarily to an increase in bank loans outstanding to fund customer loan balances. The average of the aggregate short-term bank loans outstanding was $413,000 during 2000, compared to $148,000 during 1999.
Other revenue, comprised of various fee revenue sources, increased 41% ($81.4 million) during 2000. Fee revenue received from money market, mutual fund and insurance products increased 49% ($69.6 million). Additionally, the number of IRA accounts increased, resulting in custodial fee revenue growth of 39% ($8.6 million) during the year.
Operating expenses increased 23% ($353.4 million) to $1.9 billion during 2000. Compensation costs represent 60% ($213.1 million) of the total expense growth for the year. Sales compensation increased 17% ($103.3 million) due to increased revenue and an increased number of IRs. Variable compensation, including bonuses and profit sharing paid to IRs, branch office assistants (BOAs) and headquarters associates, which expands and contracts in relation to revenues, net income and the firm's profit margin, increased 16% ($26.7 million) due to the increase in the Partnership's revenue and earnings levels. Remaining increases in compensation expense are primarily attributable to increased payroll for existing personnel and additional personnel at both the headquarters and in the branches as the firm grows its sales force.
Occupancy and equipment expenses increased 36% ($48.2 million), comprising 14% of the total operating expense increase. Additionally, communications and data processing expenses increased 19% ($34.3 million), accounting for 10% of the total operating expense growth for the year. The Partnership continues to expand its headquarters, branch locations and communications systems to enable it to continue to increase the number of IRs, locations and customers.
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's equity capital at December 31, 2001, excluding the reserve for anticipated withdrawals, was $638.9 million, compared to $603.1 million at December 31, 2000. Equity capital has increased primarily due to retention of General Partner earnings ($30.7 million) and to an increase in Subordinated Limited Partner capital ($12.0 million), offset by redemption of Limited Partner interests ($6.9 million).
At December 31, 2001, the Partnership had $196.5 million in cash and cash equivalents. Lines of credit are in place aggregating $1.195 billion ($1.145 billion of which is through uncommitted lines of credit). Actual borrowing availability is based on securities owned and customers' margin securities which serve as collateral for the loans. No amounts were outstanding under these lines at December 31, 2001. The Association had loans from The Federal Home Loan Bank of $13.7 million as of December 31, 2001, which are secured by mortgage loans. The Partnership also participates in securities loaned transactions, under which it receives collateral in the form of cash or other collateral in an amount in excess of the market value of securities loaned. Securities loaned outstanding were $132.2 million at December 31, 2001, for which the Partnership received cash collateral.
A substantial portion of the Partnerships' assets are primarily liquid, consisting mainly of cash and assets readily convertible into cash. These assets are financed primarily by customer credit balances, equity capital, bank lines of credit, securities loaned and other payables. The Partnership has $180.7 million in U.S. agency and treasury securities (Investment Securities) which can be sold to meet liquidity needs. The Partnership believes that the liquidity provided by existing cash balances, borrowing arrangements, and investment securities will be sufficient to meet the Partnership's capital and liquidity requirements.
In October 2001 the Partnership borrowed $25.0 million in long-term debt, interest paid quarterly at a variable rate (3.67% at December 31, 2001) based on LIBOR plus applicable margin, due in annual installments ranging from $4.0 million to $6.0 million, with a final installment on September 1, 2006. Proceeds were used to fund equipment for the Partnership's regional headquarters and data center in Tempe, Arizona.
The Partnership's growth in recent years has been financed through sales of limited partnership interests to its employees, retention of earnings, private placements of subordinated debt, long-term secured debt and operating leases under which the firm rents facilities, furniture, fixtures, computers and communication equipment.
Included in the Partnership's operating lease commitments and contingent residual payments are synthetic leasing agreements for two buildings, one in Tempe, Arizona, and one being constructed in St. Louis, Missouri. The lessor of the buildings, along with a group of financial institutions, has committed to fund the construction of the facilities. The total cost of the facilities covered by these leases is estimated to be $62.4 million, of which $52.7 million has been incurred by the lessor as of December 31, 2001. The synthetic leases have initial terms of five years, with renewal options for two additional terms of up to five years by either the lessor or the Partnership, subject to the approval of the other party. The Partnership may, at its option, purchase the buildings during or at the end of the terms of the leases at approximately the amount expended to construct the facilities. If the Partnership does not exercise the purchase option by or at the end of the lease, the Partnership may be obligated to pay up to $27.5 million of the building's cost as determined at the lease inception date for the Tempe, Arizona, facility. Additionally, should the Partnership terminate its obligation during the construction phase of the St. Louis, Missouri, facility, it has a commitment to pay up to $18.2 million of the construction costs incurred as of December 31, 2001.
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
The following table summarizes the Partnership's financing commitments and obligations, excluding customer accounts due on demand.
Payments Due by Period
----------------------
Total 2002 2003-2006 Thereafter
-------------- -------------- -------------- --------------
Bank loans $ 13,679 $ - $ 2,100 $ 11,579
Securities loaned 132,231 132,231 - -
Long-term debt 46,285 9,776 32,609 3,900
Liabilities subordinated to claims
of general creditors 205,600 26,725 130,375 48,500
Rental commitments 437,900 115,800 181,400 140,700
Contingent residual payments 45,700 18,200 27,500 -
---------- ---------- ---------- ----------
Total financing commitments
and obligations $ 881,395 $ 302,732 $ 373,984 $ 204,679
========== ========== ========== ==========
|
For the year ended December 31, 2001, cash and cash equivalents increased $20.2 million. Cash provided by operating activities was $287.2 million. Sources include net income ($149.2 million) and net receivable from customers ($348.1 million). These sources were partially offset by a decrease in bank loans ($204.6 million). Cash used in investing activities consisted of $127.0 million in capital expenditures primarily attributable to the firm's expansion of its headquarters and branch facilities due to growth in the sales force, and to investment in information technology hardware and software. Cash used in financing activities was $140.0 million, primarily for partnership withdrawals ($135.1 million) and repayment of subordinated debt ($26.7 million), partially offset by issuance of long-term secured debt ($25.0 million) and issuance of Subordinated Limited Partner interests ($12.5 million).
For the year ended December 31, 2000, cash and cash equivalents increased $33.8 million. Cash provided by operating activities was $221.5 million. Sources include net income ($229.8 million), increased bank loans ($108.4 million) and securities loaned ($94.4 million) and proceeds from disposition of securities purchased under agreements to resell ($75.0 million). These sources were partially offset by a decrease in securities sold under agreements to repurchase ($163.9 million), and an increase in net receivable from customers ($120.0 million) due primarily to increased customer loan balances. Cash used for investing activities consisted of $90.1 million in capital expenditures primarily attributable to the Partnership's expansion of its headquarters and branch facilities required as the Partnership grows its sales force. Cash used in financing activities was $97.5 million consisting of partnership withdrawals and distributions ($175.0 million) and repayment of subordinated debt ($26.7 million), partially offset by the issuance of Limited Partner and Subordinated Limited Partner interests ($114.0 million).
For the year ended December 31, 1999, cash and cash equivalents decreased $1.2 million. Cash flows from operating activities provided $168.1 million. Net income adjusted for depreciation provided $246.7 million, securities sold under agreements to repurchase provided $188.9 million, and borrowings under the Firm's bank lines of credit provided $102.9 million. Receivable from customers, net payables to customers, used $386.3 million. Investing activities used $82.2 million for the purchase of fixed assets. Cash flows from financing activities used $87.0 million for withdrawals and distributions of partnership capital, net of issuance of subordinated limited partnership interests and $75.0 million in subordinated debt.
As a result of its activities as a broker/dealer, EDJ, the Partnership's principal subsidiary, is subject to the Net Capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934 and the capital rules of the
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
New York Stock Exchange. Under the alternative method permitted by the rules, EDJ must maintain minimum Net Capital, as defined, equal to the greater of $250 or 2% of aggregate debit items arising from customer transactions. The Net Capital rule also provides that partnership capital may not be withdrawn if resulting Net Capital would be less than 5% of aggregate debit items. Additionally, certain withdrawals require the consent of the SEC to the extent they exceed defined levels even though such withdrawals would not cause Net Capital to be less than 5% of aggregate debit items. At December 31, 2001, EDJ's Net Capital of $395.0 million was 21% of aggregate debit items and its Net Capital in excess of the minimum required was $358.2 million. Net Capital as a percentage of aggregate debits after anticipated withdrawals was 21%. Net capital and the related capital percentage may fluctuate on a daily basis.
CRITICAL ACCOUNTING POLICIES
The Partnership's financial statements are prepared in accordance with the accounting principles generally accepted in the United States, which may require judgement and involve estimation processes to determine its net assets and which affect its results of operations. Included in management's discussion and analysis of financial condition and results of operations, and in the quantitative and qualitative disclosures about market risk, and in the notes to the financial statements (See Note 1 to the consolidated financial statements), are discussions of the Partnership's critical accounting policies.
There were no material changes in the Partnership's overall financial condition during the year ended December 31, 2001, compared with the year ended December 31, 2000. The Partnership's consolidated statement of financial condition is comprised primarily of cash and assets readily convertible into cash. Securities inventories are carried at market value and are readily marketable. Customer margin accounts are collateralized by marketable securities. Other customer receivables and receivables and payables with other broker/dealers normally settle on a current basis. Liabilities, including amounts payable to customers, checks and accounts payable and accrued expenses are sources of funds to the Partnership. These liabilities, to the extent not utilized to finance assets, are available to meet liquidity needs and provide funds for short-term investments, which favorably impacts profitability.
THE EFFECTS OF INFLATION
The Partnership's net assets are primarily monetary, consisting of cash, securities inventories and receivables less liabilities. Monetary net assets are primarily liquid in nature and would not be significantly affected by inflation. Inflation and future expectations of inflation influence securities prices, as well as activity levels in the securities markets. As a result, profitability and capital may be impacted by inflation and inflationary expectations. Additionally, inflation's impact on the Partnership's operating expenses may affect profitability to the extent that additional costs are not recoverable through increased prices of services offered by the Partnership.
NEW ACCOUNTING STANDARDS
The Financial Accounting Standards Board ("FASB") has issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"), effective for the Partnership in 2002. SFAS 142 addresses how goodwill and other intangible assets should be accounted for in the financial statements. The Partnership does not expect SFAS 142 to have a significant effect on its consolidated financial position, results of operations or cash flows.
Also, the FASB has issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" ("SFAS 144"), effective for the Partnership in 2002. SFAS 144 addresses financial accounting and reporting for the impairment of long-lived assets and for
PART II
Item 7. Management's Discussion And Analysis of Financial Condition and Results of Operations
long-lived assets to be disposed of. The Partnership does not expect SFAS 144 to have a significant effect on its consolidated financial position, results of operations or cash flows.
FORWARD-LOOKING STATEMENTS
The Management's Financial Discussion contains forward-looking statements within the meaning of federal securities laws. Actual results are subject to risks and uncertainties, including both those specific to the Partnership and those specific to the industry which could cause results to differ materially from those contemplated. The risks and uncertainties include, but are not limited to, general economic conditions, actions of competitors, regulatory actions, changes in legislation and technology changes. Undue reliance should not be placed on the forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. The Partnership does not undertake any obligation to publicly update any forward-looking statements.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The SEC issued market risk disclosure requirements to enhance disclosures of accounting policies for derivatives and other financial instruments and to provide quantitative and qualitative disclosures about market risk inherent in derivatives and other financial instruments. Various levels of management within the Partnership manage the firm's risk exposure. Position limits in trading and inventory accounts are established and monitored on an ongoing basis. Credit risk related to various financing activities is reduced by the industry practice of obtaining and maintaining collateral. The Partnership monitors its exposure to counterparty risk through the use of credit exposure information, the monitoring of collateral values and the establishment of credit limits.
The Partnership maintains receivables from customers, and payable to customers, as described in Note 2 to the Consolidated Financial Statements, and inventory securities as detailed in Note 5 to the Consolidated Financial Statements. The Partnership earns interest on customer margin account balances, and pays interest on certain credit balances in customer accounts. At December 31, 2001, amounts receivable from customers were $1.881 billion, amounts payable to customers were $1.603 billion, and the fair value of inventory securities was $118.9 million in long positions and $35.3 million in short positions. The Partnership performed an analysis of its financial instruments and assessed the related interest rate risk and materiality in accordance with the rules. Based on this analysis, in the opinion of management, the risk associated with the Partnership's financial instruments at December 31, 2001 will not have a material adverse effect on the consolidated financial position or results of operations of the Partnership.
PART II
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements Included in this Item
Page No.
Report of Independent Public Accountants...................................... 22
Consolidated Statements of Financial Condition as of
December 31, 2001 and 2000.................................................... 23
Consolidated Statements of Income for the years ended
December 31, 2001, 2000 and 1999.............................................. 25
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999.............................................. 26
Consolidated Statements of Changes in Partnership Capital
for the years ended December 31, 2001, 2000 and 1999.......................... 27
Notes to Consolidated Financial Statements.................................... 28
|
PART II
Item 8. Financial Statements And Supplementary Data
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Jones Financial Companies, L.L.L.P.
We have audited the accompanying consolidated statements of financial condition of The Jones Financial Companies, L.L.L.P. (a Missouri Limited Liability Limited Partnership) and subsidiaries as of December 31, 2001 and 2000, and the related consolidated statements of income, cash flows and changes in partnership capital for each of the three years in the period ended December 31, 2001. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Jones Financial Companies, L.L.L.P. and subsidiaries as of December 31, 2001 and 2000, and the results of their operations, cash flows and the changes in their partnership capital for each of the three years in the period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
February 22, 2002
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
ASSETS
December 31, December 31,
(Amounts in thousands) 2001 2000
Cash and cash equivalents $ 196,508 $ 176,356
Securities purchased under agreements to resell 80,000 -
Receivable from:
Customers 1,881,021 2,008,469
Brokers, dealers and clearing organizations 80,088 80,626
Mortgages and loans 100,782 98,946
Securities owned, at market value
Inventory securities 118,872 118,260
Investment securities 180,719 203,741
Equipment, property and improvements 298,072 248,290
Other assets 222,346 235,697
----------- -----------
TOTAL ASSETS $ 3,158,408 $ 3,170,385
=========== ===========
The accompanying notes are an integral part of these statements.
|
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
LIABILITIES AND PARTNERSHIP CAPITAL
December 31, December 31,
(Amounts in thousands) 2001 2000
Bank loans $ 13,679 $ 218,314
Securities sold under agreements to repurchase - 24,969
Securities loaned 132,231 140,596
Payable to:
Customers 1,602,726 1,382,088
Brokers, dealers and clearing organizations 41,990 22,268
Depositors 103,950 87,550
Securities sold, not yet purchased,
at market value 35,251 18,064
Accounts payable and accrued expenses 121,558 126,119
Accrued compensation and employee benefits 180,422 232,993
Long-term debt 46,285 29,618
----------- -----------
2,278,092 2,282,579
----------- -----------
Liabilities subordinated to claims
of general creditors 205,600 232,325
----------- -----------
Partnership capital:
Limited partners 233,228 240,144
Subordinated limited partners 82,455 70,405
General partners 323,261 292,541
----------- -----------
638,944 603,090
Partnership capital reserved for anticipated withdrawals 35,772 52,391
----------- -----------
TOTAL PARTNERSHIP CAPITAL 674,716 655,481
----------- -----------
TOTAL LIABILITIES AND CAPITAL $ 3,158,408 $ 3,170,385
=========== ===========
The accompanying notes are an integral part of these statements.
|
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
CONSOLIDATED STATEMENTS OF INCOME
Years Ended
-------------------------------------------
(Amounts in thousands, December 31, December 31, December 31,
except per unit information) 2001 2000 1999
Net revenue:
Commissions $ 1,253,862 $ 1,414,474 $ 1,148,286
Principal transactions 370,327 264,361 270,830
Investment banking 24,676 29,545 20,953
Interest and dividends 176,277 224,497 149,041
Other 316,855 279,083 197,724
----------- ----------- -----------
Total revenue 2,141,997 2,211,960 1,786,834
Interest expense 66,468 87,662 58,435
----------- ----------- -----------
Net revenue 2,075,529 2,124,298 1,728,399
----------- ----------- -----------
Operating expenses:
Compensation and benefits 1,200,225 1,237,458 1,024,323
Communications and data processing 233,224 211,255 176,943
Occupancy and equipment 211,387 182,661 134,502
Payroll and other taxes 74,105 67,521 54,346
Floor brokerage and clearance fees 14,376 17,584 12,491
Other operating expenses 193,026 177,996 138,463
----------- ----------- -----------
Total operating expenses 1,926,343 1,894,475 1,541,068
----------- ----------- -----------
Net income $ 149,186 $ 229,823 $ 187,331
=========== =========== ===========
Net income allocated to:
Limited partners $ 22,935 $ 31,440 $ 26,189
Subordinated limited partners 14,949 21,294 16,827
General partners 111,302 177,089 144,315
----------- ----------- -----------
$ 149,186 $ 229,823 $ 187,331
=========== =========== ===========
Net income per weighted average $1,000 equivalent
partnership unit outstanding:
Limited partners $ 96.89 $ 179.21 $ 173.81
=========== =========== ===========
Subordinated limited partners $ 181.70 $ 333.92 $ 325.21
=========== =========== ===========
Weighted average $1,000 equivalent partnership
units outstanding:
Limited partners 236,696 175,436 150,670
=========== =========== ===========
Subordinated limited partners 82,273 63,770 51,741
=========== =========== ===========
The accompanying notes are an integral part of these statements.
|
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended
-------------------------------------------
December 31, December 31, December 31,
(Amounts in thousands) 2001 2000 1999
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 149,186 $ 229,823 $ 187,331
Adjustments to reconcile net income to net
cash provided by operating activities -
Depreciation and amortization 77,237 66,643 59,356
Changes in assets and liabilities:
Securities purchased under agreements to resell (80,000) 75,000 40,000
Securities sold under agreements to repurchase (24,969) (163,911) 188,880
Net receivable from customers 348,086 (120,008) (386,330)
Net receivable from brokers, dealers and
clearing organizations 20,260 (43,848) 8,236
Receivable from mortgages and loans (1,836) (16,222) (13,902)
Securities owned, net 39,597 9,985 (55,099)
Other assets 13,351 (87,879) (36,194)
Bank loans (204,635) 108,417 102,930
Securities loaned (8,365) 94,385 2,560
Payable to depositors 16,400 10,298 3,100
Accounts payable and other accrued expenses (57,132) 58,792 67,210
---------- ---------- ----------
Net cash provided by operating activities 287,180 221,475 168,078
---------- ---------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of equipment, property and improvements (127,019) (90,141) (82,247)
---------- ---------- ----------
Net cash used in investing activities (127,019) (90,141) (82,247)
---------- ---------- ----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Issuance of long-term debt 25,000 - -
Repayment of long-term debt (8,333) (4,922) (7,285)
Issuance of subordinated liabilities - - 75,000
Repayment of subordinated liabilities (26,725) (26,725) (16,225)
Issuance of partnership interests 12,450 114,014 8,297
Redemption of partnership interests (7,316) (4,937) (4,453)
Withdrawals and distributions from partnership capital (135,085) (174,953) (142,365)
---------- ---------- ----------
Net cash used in financing activities (140,009) (97,523) (87,031)
---------- ---------- ----------
Net increase (decrease) in cash and cash equivalents 20,152 33,811 (1,200)
CASH AND CASH EQUIVALENTS,
Beginning of year 176,356 142,545 143,745
End of year $ 196,508 $ 176,356 $ 142,545
========== ========== ==========
Cash paid for interest $ 67,523 $ 87,479 $ 55,795
The accompanying notes are an integral part of these statements.
|
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL
YEARS ENDED DECEMBER 31, 2001, 2000 AND 1999
Subordinated
Limited Limited General
Partnership Partnership Partnership
(Amounts in thousands) Capital Capital Capital Total
Balance, December 31, 1998 $ 152,732 $ 44,896 $ 204,734 $ 402,362
Issuance of partnership interests - 8,297 - 8,297
Redemption of partnership interests (3,723) (730) - (4,453)
Net income 26,189 16,827 144,315 187,331
Withdrawals and distributions (10,278) (11,805) (79,920) (102,003)
Reserved for anticipated withdrawals (15,911) (5,022) (25,464) (46,397)
---------- ---------- ---------- -----------
Balance, December 31, 1999 149,009 52,463 243,665 445,137
Issuance of partnership interests 95,572 18,442 - 114,014
Redemption of partnership interests (4,437) (500) - (4,937)
Net Income 31,440 21,294 177,089 229,823
Withdrawals and distributions (10,867) (15,496) (102,193) (128,556)
Reserved for anticipated withdrawals (20,573) (5,798) (26,020) (52,391)
---------- ---------- ---------- -----------
Balance, December 31, 2000 240,144 70,405 292,541 603,090
Issuance of partnership interests - 12,450 - 12,450
Redemption of partnership interests (6,916) (400) - (7,316)
Net Income 22,935 14,949 111,302 149,186
Withdrawals and distributions (8,445) (10,750) (63,499) (82,694)
Reserved for anticipated withdrawals (14,490) (4,199) (17,083) (35,772)
---------- ---------- ---------- -----------
Balance, December 31, 2001 $ 233,228 $ 82,455 $ 323,261 $ 638,944
========== ========== ========== ===========
The accompanying notes are an integral part of these statements.
|
PART II
Item 8. Financial Statements And Supplementary Data
THE JONES FINANCIAL COMPANIES, L.L.L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except per unit information)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE PARTNERSHIP'S BUSINESS AND BASIS OF ACCOUNTING. The accompanying consolidated financial statements include the accounts of The Jones Financial Companies, L.L.L.P. and all wholly owned subsidiaries (the "Partnership"). All material intercompany balances and transactions have been eliminated. Investments in nonconsolidated companies which are at least 20% owned are accounted for under the equity method.
The Partnership's principal operating subsidiary, Edward D. Jones & Co., L.P. ("EDJ"), is engaged in business as a registered broker/dealer primarily serving individual investors. The Partnership derives its revenues from the sale of listed and unlisted securities, and insurance products, investment banking, principal transactions, and is a distributor of mutual fund shares. The Partnership conducts business throughout the United States, Canada and the United Kingdom with its customers, various brokers, dealers, clearing organizations, depositories and banks.
The financial statements have been prepared using the accrual basis of accounting which requires the use of certain estimates by management in determining the Partnership's assets, liabilities, revenues and expenses.
TRANSACTIONS. The Partnership's securities activities involve execution, settlement and financing of various securities transactions for customers. The related revenue and expenses are recorded on a trade date basis. The Partnership may be exposed to risk of loss in the event customers, other brokers and dealers, banks, depositories or clearing organizations are unable to fulfill contractual obligations. For transactions in which it extends credit to customers, the Partnership seeks to control the risks associated with these activities by requiring customers to maintain margin collateral in compliance with various regulatory and internal guidelines. Boone National Savings and Loan Association, F.A. (the "Association"), a wholly owned subsidiary of the Partnership, makes commercial, real estate, and other loans to individuals primarily to customers in Central Missouri. Additionally, the Association offers trust services to EDJ customers through its division, the Edward Jones Trust Co.
SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE. The Partnership participates in short-term resale agreements and repurchase agreements collateralized by U.S. government and agency securities. The market value of the underlying collateral as determined daily, plus accrued interest thereon, must equal or exceed 102% of the carrying amount of the transaction. It is the Partnership's policy to have such underlying collateral deposited in its accounts at its custodian banks. Repurchase transactions require the Partnership to deposit collateral with the lender. Resale and repurchase agreements are carried at the amount at which the securities will be subsequently resold/repurchased as specified in the agreements.
SECURITIES-LENDING ACTIVITIES. Securities borrowed and securities loaned transactions are reported as collateralized financings. Securities borrowed transactions require the Partnership to deposit cash or other collateral with the lender. With respect to securities loaned, the Partnership receives collateral in the form of cash or other collateral in an amount in excess of the market value of securities loaned. The
PART II
Item 8. Financial Statements And Supplementary Data
Partnership monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as necessary.
COLLATERAL. The Partnership continues to report as assets collateral it has pledged in secured borrowings and other arrangements when the secured party cannot sell or repledge the assets or the Partnership can substitute collateral or otherwise redeem it on short notice. The Partnership does not report as an asset collateral it has received in secured lending and other arrangements because the debtor typically has the right to redeem or substitute the collateral on short notice.
SECURITIES OWNED. Securities owned are valued at current market prices.
EQUIPMENT, PROPERTY AND IMPROVEMENTS. Equipment, including furniture and fixtures, is recorded at cost and depreciated using straight-line and accelerated methods over estimated useful lives of five to seven years. Buildings are depreciated using the straight-line method over their useful lives, which are estimated at thirty years. Property improvements are amortized based on the remaining life of the property or economic useful life of the improvement, whichever is less. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts, and any resulting gain or loss is reflected in income for the period. The cost of maintenance and repairs is charged against income as incurred, whereas significant enhancements are capitalized. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be fully recoverable. If impairment is indicated, the asset value is written down to its fair market value.
SEGREGATED CASH. Cash of $51 was segregated in a special reserve bank account for the benefit of customers as of December 31, 2001 and 2000, under rule 15c3-3 of the Securities and Exchange Commission.
INCOME TAXES. Income taxes have not been provided for in the consolidated financial statements since The Jones Financial Companies, L.L.L.P. is organized as a partnership, and each partner is liable for their own tax payments.
NOTE 2 - RECEIVABLE FROM AND PAYABLE TO CUSTOMERS
Accounts receivable from and payable to customers include margin balances and amounts due on uncompleted transactions. The value of securities owned by customers and held as collateral for these receivables is not reflected in the financial statements. Substantially all amounts payable to customers are subject to withdrawal upon customer request. The Partnership pays interest on certain credit balances in customer accounts.
PART II
Item 8. Financial Statements And Supplementary Data
NOTE 3 - RECEIVABLE FROM AND PAYABLE TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS
The components of receivable from and payable to brokers, dealers and clearing organizations are as follows:
2001 2000
--------- ---------
Receivable from clearing organizations $ 50,849 $ 27,070
Securities failed to deliver 17,385 11,921
Dividends receivable 7,843 40,026
Deposits paid for securities borrowed 2,331 235
Other 1,680 1,374
--------- ---------
Total receivable from brokers, dealers
and clearing organizations $ 80,088 $ 80,626
========= =========
Securities failed to receive $ 32,071 $ 17,467
Other 9,919 4,801
--------- ---------
Total payable to brokers, dealers and
clearing organizations $ 41,990 $ 22,268
========= =========
|
Receivable from clearing organizations represents balances and deposits with United States clearing organizations and the Partnership's Canadian carrying broker. "Fails" represent the contract value of securities which have not been received or delivered by settlement date.
NOTE 4 - RECEIVABLE FROM MORTGAGES AND LOANS
Receivable from mortgages and loans is comprised of the Association's primarily adjustable rate mortgage loans, commercial and other loans, net of discounts, deferred origination fees and the allowance for loan losses. The carrying amounts of the receivables approximate their fair values.
PART II
Item 8. Financial Statements And Supplementary Data
NOTE 5 - SECURITIES OWNED
Securities owned are summarized as follows (at market value):
2001 2000
-------------------------- --------------------------
Securities Securities
Sold, Sold,
Securities not yet Securities not yet
Owned Purchased Owned Purchased
----------- ----------- ----------- -----------
Inventory Securities:
Certificates of deposit $ 4,515 $ 1,553 $ 6,607 $ 3,927
U.S. and Canadian government
and U.S. agency obligations 16,849 866 15,561 1,858
State and municipal obligations 58,935 24,577 62,174 233
Corporate bonds and notes 24,540 2,308 27,310 8,829
Equities 2,833 2,810 2,660 1,879
Collateralized Mortgage Obligations 7,368 - 704 -
Other 3,832 3,137 3,244 1,338
----------- ----------- ----------- -----------
$ 118,872 $ 35,251 $ 118,260 $ 18,064
=========== =========== =========== ===========
Investment Securities:
U.S. government and agency
obligations $ 180,719 $ 203,741
=========== ===========
|
The Partnership attempts to reduce its exposure to market price fluctuations of its inventory securities through the sale of U.S. government securities and, to a limited extent, the sale of fixed income futures contracts. The amount of the securities purchased or sold will fluctuate on a daily basis due to changes in inventory securities owned, interest rates and market conditions. The futures contracts are settled daily, and any gain or loss is recognized in principal transactions revenue. The notional amount of futures contracts sold was $12,000 and $16,000 at December 31, 2001 and 2000, respectively.
PART II
Item 8. Financial Statements And Supplementary Data
NOTE 6 - EQUIPMENT, PROPERTY AND IMPROVEMENTS
Equipment, property and improvements are summarized as follows:
2001 2000
------------ -----------
Land $ 12,749 $ 13,599
Buildings and improvements 211,522 170,059
Equipment, furniture and fixtures 487,957 401,985
------------ -----------
Total equipment, property and improvements 712,228 585,643
Accumulated depreciation and amortization (414,156) (337,353)
------------ -----------
Equipment, property and improvements, net $ 298,072 $ 248,290
============ ===========
|
PART II
Item 8. Financial Statements And Supplementary Data
NOTE 7 - BANK LOANS
The Partnership borrows from banks on a short-term basis primarily to finance customer margin balances and inventory securities. As of December 31, 2001, the Partnership had bank lines of credit aggregating $1,195,000 of which $1,145,000 were through uncommitted facilities. Actual borrowing availability is primarily based on the value of securities owned and customers' margin securities. At December 31, 2001, collateral with a market value of $1,487,000 was available to support secured bank loans of EDJ. Total bank loans outstanding under these lines were $0 and $204,000 as of December 31, 2001 and 2000, respectively. Additionally, the Association had loans from The Federal Home Loan Bank of $13,679 and $14,314 as of December 31, 2001 and 2000, respectively, which are secured by mortgage loans. Bank loans outstanding approximate their fair value.
Interest is at a fluctuating rate (weighted average rate of 5.8% and 7.1% at December 31, 2001 and 2000, respectively) based on short-term lending rates. The average of the aggregate short-term bank loans outstanding was $272,000, $413,000 and $148,000 and the average interest rate was 4.6%, 7.0%, and 5.9% for the years ended December 31, 2001, 2000 and 1999, respectively.
NOTE 8 - PAYABLE TO DEPOSITORS
Amounts payable to depositors are comprised of the Association's various savings instruments offered to its customers, which include transaction accounts and certificates of deposit with maturities ranging from 90 days to 72 months. The carrying amounts of the deposits approximate their fair values.
NOTE 9 - LONG-TERM DEBT
Long-term debt is comprised of the following:
2001 2000
--------- ---------
Note payable, interest paid quarterly at a variable rate (3.67% at
December 31, 2001) based on LIBOR plus applicable margin, due in
annual installments ranging from $4,000 to $6,000, with a final
installment on September 1, 2006. $ 25,000 $ -
Note payable, secured by equipment, interest paid monthly at a variable rate
(8.22% at December 31, 2000) based on LIBOR plus applicable margin,
with a final installment on July 30, 2001. - 3,000
Notes payable, secured by real estate, fixed rates of 8.23% and 6.82%,
principal and interest due in monthly installments,
with a final installment on April 5, 2008. 15,461 17,296
Notes payable, secured by real estate, fixed rates of 8.72% and 6.52%,
principal and interest due in monthly installments,
with a final installment on June 5, 2003. 5,824 9,322
--------- ---------
$ 46,285 $ 29,618
========= =========
|
PART II
Item 8. Financial Statements And Supplementary Data
Scheduled annual principal payments, as of December 31, 2001, are as follows:
Principal
Year Payment
---------- -----------
2002 $ 9,776
2003 9,154
2004 7,299
2005 7,480
2006 8,676
Thereafter 3,900
-----------
$ 46,285
===========
|
The real estate debt of $21,285 at December 31, 2001 is collateralized by land and buildings with a carrying value of $35,000 at December 31, 2001. Certain agreements contain restrictions that among other things, require maintenance of a fixed charge coverage ratio and minimum net capital. The carrying amounts of the long-term debt approximate their fair value as of December 31, 2001 and 2000.
NOTE 10 - LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS
Liabilities subordinated to the claims of general creditors consist of:
2001 2000
----------- -----------
Capital notes, 8.18%, due in annual installments of $10,500,
with a final installment on September 1, 2008. $ 73,500 $ 84,000
Capital notes, 7.95%, due in annual installments of $10,225,
with a final installment of $10,200 on April 15, 2006. 51,100 61,325
Capital notes, 8.96%, due in annual installments of $6,000,
with a final installment on May 1, 2002. 6,000 12,000
Capital notes, with rates ranging from 7.51% to 7.79%, due in annual
installments ranging from $3,700 to $25,000, commencing on August 15,
2005, with a final installment of $3,700 on August 15, 2011. 75,000 75,000
----------- -----------
$ 205,600 $ 232,325
=========== ===========
|
PART II
Item 8. Financial Statements And Supplementary Data
Required annual principal payments, as of December 31, 2001, are as follows:
Principal
Year Payment
---------- -----------
2002 $ 26,725
2003 20,725
2004 20,725
2005 43,225
2006 45,700
Thereafter 48,500
-----------
$ 205,600
===========
|
The capital note agreements contain restrictions that among other things, require maintenance of certain financial ratios, restrict encumbrance of assets and creation of indebtedness and limit the withdrawal of partnership capital. As of December 31, 2001, the Partnership was required, under the note agreements, to maintain minimum partnership capital of $300,000 and Net Capital as computed in accordance with the uniform Net Capital rule of 5% of aggregate debit items "as defined," or $91,922 (see Note 12).
The subordinated liabilities are subject to cash subordination agreements approved by the New York Stock Exchange and, therefore, are included in the Partnership's computation of Net Capital under the Securities and Exchange Commission's uniform Net Capital rule. The Partnership has estimated the fair value of the subordinated capital notes to be approximately $213,000 and $247,000 as of December 31, 2001 and 2000, respectively.
NOTE 11 - PARTNERSHIP CAPITAL
The limited partnership capital, consisting of 233,228 and 240,144 $1,000 units at December 31, 2001 and 2000, respectively, is held by current and former employees and general partners of the Partnership. Each limited partner receives interest at seven and one-half percent on the principal amount of capital contributed and a varying percentage of the net income of the Partnership. Interest expense includes $17,754, $13,423 and $11,300, for the years ended December 31, 2001, 2000 and 1999, respectively, paid to limited partners on capital contributed.
The subordinated limited partnership capital, consisting of 82,455 and 70,405 $1,000 units at December 31, 2001 and 2000, respectively, is held by current and former general partners of the Partnership. Each subordinated limited partner receives a varying percentage of the net income of the Partnership. The subordinated limited partner capital is subordinated to the limited partnership capital.
Under the Partnership agreement, a withdrawing limited partner's capital is payable in three equal annual installments; a withdrawing subordinated limited or general partner's capital is payable in four equal annual installments. The repayments of withdrawing limited, subordinated limited and general partners' capital commence at their withdrawal dates.
NOTE 12 - NET CAPITAL REQUIREMENTS
As a result of its activities as a broker/dealer, EDJ is subject to the Net Capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934 and the capital rules of the New York Stock Exchange. Under the alternative method permitted by the rules, EDJ must maintain minimum Net Capital, as defined, equal to
PART II
Item 8. Financial Statements And Supplementary Data
the greater of $250 or 2% of aggregate debit items arising from customer transactions. The Net Capital rule also provides that partnership capital may not be withdrawn if resulting Net Capital would be less than 5% of aggregate debit items. Additionally, certain withdrawals require the consent of the SEC to the extent they exceed defined levels even though such withdrawals would not cause Net Capital to be less than 5% of aggregate debit items.
At December 31, 2001, EDJ's Net Capital of $395,001 was 21% of aggregate debit items and its Net Capital in excess of the minimum required was $358,232. Net Capital as a percentage of aggregate debits after anticipated withdrawals was also 21%. Net Capital and the related capital percentage may fluctuate on a daily basis.
The firm has other operating subsidiaries, including the Association and broker/dealer subsidiaries in Canada and the United Kingdom. These wholly owned subsidiaries are required to maintain specified levels of liquidity and capital standards. Each subsidiary is in compliance with the applicable regulations as of December 31, 2001.
NOTE 13 - EMPLOYEE BENEFIT PLAN
The Partnership maintains a profit sharing plan covering all eligible employees. Contributions to the plan are at the discretion of the Partnership. Additionally, participants may contribute on a voluntary basis. Approximately $36,000, $58,000 and $47,000 were provided by the Partnership for its contributions to the plan for the years ended December 31, 2001, 2000 and 1999, respectively.
NOTE 14 - COMMITMENTS
The Partnership leases headquarters office space, furniture, computers and communication equipment under various operating leases. Additionally, branch offices are leased generally for terms of three to five years. Rent expense was $162,200, $136,500 and $105,300 for the years ended December 31, 2001, 2000 and 1999, respectively.
The Partnership's noncancelable lease commitments greater than one year, and its contingent residual payments, as of December 31, 2001, are summarized below:
Contingent
Rental Residual
Year Commitments Payments
---------- ------------- -------------
2002 $ 115,800 $ 18,200
2003 73,500 -
2004 54,500 -
2005 34,200 -
2006 19,200 27,500
Thereafter 140,700 -
|
Included in the Partnership's operating lease commitments and contingent residual payments are synthetic lease agreements for two buildings, one in Tempe, Arizona, and one building being constructed in St. Louis, Missouri. The lessor of the buildings, along with a group of financial institutions, has committed to fund the construction of the facilities. The total cost of the facilities covered by these leases is estimated to be $62,400, of which $52,700 has been incurred by the lessor as of December 31, 2001. The synthetic leases have initial terms of five years, with renewal options for two additional terms of up to
PART II
Item 8. Financial Statements And Supplementary Data
five years by either the lessor or the Partnership, subject to the approval of the other party. The Partnership may, at its option, purchase the buildings during or at the end of the terms of the leases at approximately the amount expended to construct the facilities. If the Partnership does not exercise the purchase option by or at the end of the lease, the Partnership may be obligated to pay up to $27,500 of the building's cost as determined at the lease inception date for the Tempe, Arizona, facility ("contingent residual payment"). Additionally, should the Partnership terminate its obligation during the construction phase of the St. Louis, Missouri, facility, it has a commitment to pay up to $18,200 of construction costs incurred as of December 31, 2001.
EDJ has an equipment acquisition agreement with a financial institution. Under terms of the agreement, equipment is purchased by the lessor and the financial institution is obligated to lease the equipment to EDJ. The amount outstanding under the agreement at December 31, 2001, is $10,500, which is not included in the operating lease commitment table above.
NOTE 15 - CONTINGENCIES
Various legal actions are pending against the Partnership with certain cases claiming substantial damages. These actions are in various stages and the results of such actions cannot be predicted with certainty. In the opinion of management, after consultation with legal counsel, the ultimate resolution of these actions is not expected to have a material adverse impact on the Partnership's results of operations or financial condition.
NOTE 16 - QUARTERLY INFORMATION
(Unaudited)
Quarters Ended
-----------------------------------------------------------------
March 31, June 30, September 29, December 31,
----------- -------- ------------- ------------
2000
Total revenue $ 577,879 $ 566,932 $ 531,864 $ 535,285
Net income 68,537 63,228 50,591 47,467
Net income per weighted average
$1,000 equivalent partnership
unit outstanding:
Limited partners $ 53.39 $ 49.28 $ 39.61 $ 36.93
Subordinated limited partners 108.51 95.22 70.20 59.99
March 30, June 29, September 28, December 31,
----------- -------- ------------- ------------
2001
Total revenue $ 529,032 $ 538,817 $ 528,467 $ 545,681
Net income 37,786 40,703 33,938 36,759
Net income per weighted average
$1,000 equivalent partnership
unit outstanding:
Limited partners $ 24.54 $ 26.44 $ 22.04 $ 23.87
Subordinated limited partners 47.51 50.03 40.79 43.37
|
ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Jones Financial Companies, L.L.L.P., organized as a partnership, does not have individuals associated with it designated as officers or directors. As of January 25, 2002, the Partnership was comprised of 210 general partners, 5,401 limited partners and 127 subordinated limited partners. Under the terms of the Partnership Agreement, John W. Bachmann is designated Managing Partner and in said capacity has primary responsibility for administering the Partnership's business, determining its policies, controlling the management and conduct of the Partnership's business and has the power to appoint and dismiss general partners of the Partnership and to fix the proportion of their respective interests in the Partnership. Subject to the foregoing, the Partnership is managed by its 210 general partners.
The Executive Committee of the Partnership is comprised of John W. Bachmann, Douglas E. Hill, Michael R. Holmes, Richie L. Malone, Steven Novik, Darryl L. Pope and Robert Virgil, Jr. The purpose of the Executive Committee is to provide counsel and advice to the Managing Partner in discharging his functions. Furthermore, in the event the position of Managing Partner is vacant, the Executive Committee shall succeed to all of the powers and duties of the Managing Partner.
None of the general partners are appointed for any specific term nor are there any special arrangements or understandings pursuant to their appointment other than as contained in the Partnership Agreement.
No general partner is or has been individually, nor in association with any prior business, the subject of any action under any insolvency law or criminal proceeding or has ever been enjoined temporarily or permanently from engaging in any business or business practice.
Following is a listing of the names of the Executive Committee, ages, dates of becoming a general partner and area of responsibility for each as of January 25, 2002:
Name Age Partner Area of Responsibility John W. Bachmann 63 1970 Managing Partner Douglas E. Hill 57 1974 Product & Sales Division Michael R. Holmes 43 1996 Human Resources Richie L. Malone 53 1979 Information Systems Steven Novik 52 1983 Finance & Accounting Darryl L. Pope 62 1971 Service Division Robert Virgil, Jr. 67 1993 Headquarters Administration |
Each member of the Executive Committee has been a general partner of the Partnership for more than five preceding years, except for Robert Virgil, Jr. As of December 31, 2000, Robert Virgil, Jr. was no longer a general partner. He is a subordinated limited partner and is still a member of the Executive Committee.
John W. Bachmann is a director of AMR Corporation, Fort Worth, Texas. Robert Virgil, Jr. is a director of CPI Corp., St. Louis, Missouri.
PART III
ITEM 11. EXECUTIVE COMPENSATION
The following table identifies the compensation of the firm's Managing Partner and the four highest compensated individuals of the Partnership during the three most recent years (including respective shares of profit participation).
(1) (2) (3)
Net Income
Deferred Allocated
Compen- to General Total
Year Salaries sation Partners (1) (2) (3)
John W. Bachmann 2001 $200,000 $5,202 $1,014,482 $1,219,684
2000 200,000 8,789 2,192,317 2,401,106
1999 200,000 8,400 2,213,756 2,422,156
Douglas E. Hill 2001 175,000 5,202 2,168,380 2,348,582
2000 175,000 8,789 3,861,752 4,045,541
1999 160,000 8,400 3,372,481 3,540,881
Richie L. Malone 2001 160,000 5,202 2,096,701 2,261,903
2000 160,000 8,789 3,576,640 3,745,429
1999 160,000 8,400 3,137,883 3,306,283
Gary D. Reamey 2001 135,000 5,202 2,078,682 2,218,884
2000 135,000 8,789 3,307,308 3,451,097
1999 135,000 8,400 2,580,572 2,723,972
James D. Weddle 2001 160,000 5,202 1,935,325 2,100,527
2000 160,000 8,789 3,259,964 3,428,753
1999 160,000 8,400 2,860,236 3,028,636
(1) Each non-selling general partner receives a salary generally ranging
from $90,000 - $200,000 annually. Selling general partners do not
receive a specified salary, rather, they receive the net sales
commissions earned by them (none of the five individuals listed above
earned any such commissions). Additionally, general partners who are
principally engaged in sales are entitled to office bonuses based on
the profitability of their respective branch office, on the same
basis as the office bonus program established for all investment
representative employees.
(2) Each general partner is a participant in the Partnership's profit
sharing plan which covers all eligible employees. Contributions to
the plan, which are within the discretion of the Partnership, are
made annually and have historically been determined based on
approximately twenty-four percent of the Partnership's net income.
Allocation of the Partnership's contribution among participants is
39
|
PART III
determined by each participant's relative level of eligible earnings,
including in the case of general partners, their net income
participation.
(3) Each general partner is entitled to participate in the annual net
income of the Partnership based upon the respective percentage
interest in the Partnership of each partner. Interests in the
Partnership held by each general partner ranged from 0.03% to 3.1% in
2001, 0.05% to 3.4% in 2000, and 0.05% to 3.8% in 1999. At the
discretion of the Managing Partner, the partnership agreement
provides that, generally, the first eight percent of net income
allocable to general partners be distributed on the basis of
individual merit or otherwise as determined by the Managing Partner.
Thereafter, the remaining net income allocable to general partners is
distributed based upon each individual's percentage interest in the
Partnership. Amounts herein exclude profits retained as capital. Net
income allocated to general partners excludes income required to be
reinvested under the Partnership Agreement.
Net income allocable to general partners is the amount remaining
after payment of interest and earnings on capital invested to limited
partners and subordinated limited partners.
|
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Being organized as a limited partnership, management is vested in the general partners thereof and there are no other outstanding "voting" or "equity" securities. It is the opinion of the Partnership that the general partnership interests are not securities within the meaning of federal and state securities laws primarily because each of the general partners participates in the management and conduct of the business.
In connection with outstanding limited and subordinated limited partnership interests (non-voting securities), 159 of the general partners also own limited partnership interests and 51 of the general partners also own subordinated limited partnership interests, as noted in the table below.
As of January 25, 2002:
Name of Amount of
Beneficial Beneficial % of
Title of Class Owner Ownership Class
Limited Partnership All General
Interests Partners as
a Group $ 20,523,800 9%
Subordinated All General
Limited Partnership Partners as
Interests a Group $ 49,224,397 52%
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In the ordinary course of its business the Partnership has extended credit to certain of its partners and employees in connection with their purchase of securities. Such extensions of credit have been made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for
PART III
comparable transactions with non-affiliated persons, and did not involve more than the normal risk of collectibility or present other unfavorable features. The Partnership also, from time to time and in the ordinary course of business, enters into transactions involving the purchase or sale of securities from or to partners or employees and members of their immediate families, as principal. Such purchases and sales of securities on a principal basis are effected on substantially the same terms as similar transactions with unaffiliated third parties.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Page No.
INDEX
(a) (1) The following financial statements are included in Part II, Item 8:
Report of Independent Public Accountants..................................................22
Consolidated Statements of Financial Condition as of
December 31, 2001 and 2000................................................................23
Consolidated Statements of Income for the years ended
December 31, 2001, 2000 and 1999..........................................................25
Consolidated Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999..........................................................26
Consolidated Statements of Changes in Partnership Capital
for the years ended December 31, 2001, 2000 and 1999......................................27
Notes to Consolidated Financial Statements ...............................................28
(2) The following financial statements are included in Schedule I:
Parent Company Only Condensed Statements of Financial Condition as
of December 31, 2001 and 2000.............................................................47
Parent Company Only Condensed Statements of Income for the years
ended December 31, 2001, 2000 and 1999....................................................48
Parent Company Only Condensed Statements of Cash Flows for the
years ended December 31, 2001, 2000 and 1999..............................................49
Report of Independent Public Accountants..................................................50
Schedules are omitted because they are not required,
inapplicable, or the information is otherwise shown in the
consolidated financial statements or notes thereto.
(b) Report on Form 8-K
No reports on Form 8-K were filed in the fourth quarter of 2001.
(c) Exhibits
Reference is made to the Exhibit Index hereinafter contained.
|
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized:
(Registrant) THE JONES FINANCIAL COMPANIES, L.L.L.P.
---------------------------------------------
By (Signature and Title) /s/ John W. Bachmann
---------------------------------------------
John W. Bachmann, Managing Partner
Date March 19, 2002
---------------------------------------------
|
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.
By (Signature and Title) /s/ John W. Bachmann
---------------------------------------------
John W. Bachmann, Managing Partner
Date March 19, 2002
---------------------------------------------
By (Signature and Title) /s/ Steven Novik
---------------------------------------------
Steven Novik, Chief Financial Officer
Date March 19, 2002
---------------------------------------------
|
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO
SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES
PURSUANT TO SECTION 12 OF THE ACT.
There have been no annual reports sent to security holders covering the registrant's last fiscal year nor have there been any proxy statements, form of proxy or other proxy soliciting material sent to any of registrant's security holders.
EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2001
Exhibit
Number Page Description
3.1 Twelfth Amended and Restated Agreement of Registered Limited
Liability Limited Partnership of The Jones Financial Companies,
L.L.L.P., dated as of June 15, 2001.
3.2 * Form of Limited Partnership Agreement of Edward D. Jones & Co., L.P.
10.1 * Form of Cash Subordination Agreement between the Registrant and
Edward D. Jones & Co., incorporated herein by reference to Exhibit 10.1
to the Company's registration statement of Form S-1 (Reg. No. 33-14955).
10.2 * Agreements of Lease between EDJ Leasing Company and Edward D. Jones &
Co., L.P., dated August 1, 1991, incorporated herein by reference to
Exhibit 10.18 to the Company's Annual Report or Form 10-K for the year
ended September 27, 1991.
10.3 * Edward D. Jones & Co., L.P. Note Purchase Agreement dated as of
May 8, 1992, incorporated herein by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 26,
1992.
10.4 * Purchase and Sale Agreement by and between EDJ Leasing Co., L.P. and
the Resolution Trust Corporation incorporated herein by reference to
Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1992.
10.5 * Master Lease Agreement between EDJ Leasing Company and Edward D.
Jones & Co., L.P., dated March 9, 1993, and First Amendment to Lease
dated March 9, 1994, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 25, 1994.
10.6 * Mortgage Note and Amendment to Deed of Trust between EDJ Leasing Co.,
L.P. and Nationwide Insurance Company dated March 9, 1994,
incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 25, 1994.
44
|
10.7 * Mortgage Note; Deed of Trust and Security Agreement; Assignment of
Leases, Rents and Profits; and Subordination and Attornment Agreement
between EDJ Leasing Co., L.P. and Nationwide Insurance Company dated
April 6, 1994, incorporated by reference to exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended March 25,
1994.
10.8 * Note Purchase Agreement by Edward D. Jones & Co., L.P., for
$92,000,000 aggregate principal amount of 7.95% subordinated capital notes
due April 15, 2006, incorporated herein by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 24,
1994.
10.9 * Master Lease Agreement and Addendum by and between Edward D. Jones &
Co., L.P. and General Electric Capital Corporated dated April 21, 1994,
incorporated herein by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 24, 1994.
10.10 * Equipment Lease by and between Edward D. Jones & Co., L.P., and EDJ
Leasing Co., L.P. dated April 1, 1994, incorporated herein by reference
to the Company's Quarterly Report on Form 10-Q for the quarter ended
June 24, 1994.
10.11 * Agreement and Plan of Acquisition between The Jones Financial
Companies and Boone National Savings and Loan Association, F.A.,
incorporated herein by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1994.
10.12 * Loan Agreement between Edward D. Jones & Co., L.P. and Boatmen's Bank
dated April 28, 1995, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 25, 1995.
10.13 * Mortgage Note; South Second Deed of Trust and Security Agreement
between EDJ Leasing Co., L.P. and Nationwide Life Insurance Company
dated August 31, 1995, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 29, 1995.
10.14 * Mortgage Note; North Second Deed of Trust and Security Agreement
between EDJ Leasing Co., L.P. and Nationwide Life Insurance Company dated
August 31, 1995, incorporated herein by reference to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 29, 1995.
10.15 * Note Purchase Agreement by Edward D. Jones & Co., L.P. for $94,500,000
aggregate principal amount of 8.18% subordinated capital notes due
September 1, 2008, incorporated herein by
45
|
reference to the Company's Quarterly Report on Form 10-Q for the quarter
ended September 27, 1996.
10.16 * Note Purchase Agreement by Edward D. Jones & Co., L.P. for
$75,000,000 aggregate principal amount of subordinated capital notes
with rates ranging from 7.51% to 7.79% due September 15, 2011,
incorporated herein by reference to the Company's Quarterly Report on
Form 10-Q for the quarter ended September 24, 1999.
10.17 Lease between Eckelkamp Office Center South, L.L.C., a Missouri
Limited Liability Company, as Landlord and Edward D. Jones & Co., L.P.,
a Missouri Limited Partnership, as Tenant, dated February 3, 2000.
10.18 Master Agreement dated as of November 30, 2000 among Edward D. Jones
& Co., L.P., as Lessee, Construction Agent and Guarantor, Atlantic
Financial Group, Ltd., (registered to do business in Arizona as AFG
Equity, Limited Partnership) as Lessor, Suntrust Bank and Certain
Financial Institutions Parties Hereto, as Lenders, and Suntrust Bank as
agent, and joined in by the The Jones Financial Companies, L.L.L.P.
10.19 Master Lease Agreement dated as of November 30, 2000 between Atlantic
Financial Group, Ltd. (registered to do business in Arizona as AFG
Equity, Limited Partnership), as Lessor, and Edward D. Jones & Co.,
L.P., as Lessee.
10.20 Master Lease Agreement between Edward D. Jones & Co., L.P. and Fleet
Capital Corporation dated as of August 22, 2001.
10.21 Credit Agreement dated as of August 27, 2001 between EDJ Leasing Co., L.P.
and Soust Bank.
10.22 Master Lease Agreement between EDJ Leasing Co., L.P. and Edward D.
Jones & Co., L.P. dated August 27, 2001.
10.23 Master Agreement dated as of September 18, 2001 among Edward D. Jones
& Co., L.P., as Lessee, Construction Agent and Guarantor, Atlantic
Financial Group, Ltd., (registered to do business in Missouri as
Atlantic Financial Group, L.P.) as Lessor, Suntrust Bank and Certain
Financial Institutions Parties Hereto, as Lenders, and Suntrust Bank, as
Agent and joined in by The Jones Financial Companies, L.L.L.P.
10.24 Master Lease Agreement dated as of September 18, 2001 between
Atlantic Financial Group, Ltd. (registered to do business in Missouri as
Atlantic Financial Group, L.P.), as Lessor, and Edward D. Jones & Co.,
L.P., as Lessee.
23.1 Consent of Independent Public Accountants, filed herewith.
25 * Delegation of Power of Attorney to Managing Partner contained within
Exhibit 3.1
* Incorporated by reference to previously filed exhibits.
|
Schedule I
THE JONES FINANCIAL COMPANIES, L.L.L.P.
(PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF FINANCIAL CONDITION
December 31, December 31,
(Amounts in thousands) 2001 2000
ASSETS:
Cash and cash equivalents $ 3,678 $ 137
Investment in subsidiaries 667,352 654,592
Other assets 5,256 6,030
----------- -----------
TOTAL ASSETS $ 676,286 $ 660,759
=========== ===========
LIABILITIES AND PARTNERSHIP CAPITAL:
Payable to limited partners, accounts payable
and accrued expenses $ 1,570 $ 5,278
----------- -----------
TOTAL LIABILITIES $ 1,570 5,278
TOTAL PARTNERSHIP CAPITAL 674,716 655,481
----------- -----------
TOTAL LIABILITIES AND CAPITAL $ 676,286 $ 660,759
=========== ===========
|
These financial statements should be read in conjunction with the notes to the consolidated financial statements of The Jones Financial Companies, L.L.L.P.
Schedule I (continued)
THE JONES FINANCIAL COMPANIES, L.L.L.P.
(PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF INCOME
Years Ended
---------------------------------------------
December 31, December 31, December 31,
(Amounts in thousands) 2001 2000 1999
NET REVENUE:
Subsidiary earnings $ 147,835 $ 226,225 $ 185,598
Management fee income 32,876 27,905 24,028
Other 495 2,032 351
----------- ----------- -----------
Total revenue 181,206 256,162 209,977
----------- ----------- -----------
Interest expense 17,800 13,501 11,414
----------- ----------- -----------
Net revenue 163,406 242,661 198,563
----------- ----------- -----------
OPERATING EXPENSES:
Compensation and benefits 14,099 12,584 11,057
Payroll and other taxes 73 84 123
Other operating expenses 48 170 52
----------- ----------- -----------
Total operating expenses 14,220 12,838 11,232
----------- ----------- -----------
NET INCOME $ 149,186 $ 229,823 $ 187,331
=========== =========== ===========
|
These financial statements should be read in conjunction with the notes to the consolidated financial statements of The Jones Financial Companies, L.L.L.P.
Schedule I (continued)
THE JONES FINANCIAL COMPANIES, L.L.L.P.
(PARENT COMPANY ONLY)
CONDENSED STATEMENTS OF CASH FLOWS
Years Ended
---------------------------------------------
December 31, December 31, December 31,
(Amounts in thousands) 2001 2000 1999
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 149,186 $ 229,823 $ 187,331
Adjustments to reconcile net income to net cash
provided by operating activities -
Increase in investment in subsidiaries (12,760) (168,753) (49,109)
(Increase) decrease in other assets and
liabilities, net (2,934) 4,356 1,803
----------- ----------- ------------
Net cash provided by operating activities 133,492 65,426 140,025
----------- ----------- ------------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repayment of long-term debt - - (1,493)
Issuance of partnership interests 12,450 114,014 8,297
Redemption of partnership interests (7,316) (4,937) (4,453)
Withdrawals and distributions from
partnership capital (135,085) (174,953) (142,365)
----------- ----------- ------------
Net cash used in financing activities (129,951) (65,876) (140,014)
------------ ----------- ------------
Net increase (decrease) in cash and
cash equivalents 3,541 (450) 11
CASH AND CASH EQUIVALENTS,
Beginning of year 137 587 576
------------ ----------- ------------
End of year $ 3,678 $ 137 $ 587
=========== =========== ===========
|
These financial statements should be read in conjunction with the notes to the consolidated financial statements of The Jones Financial Companies, L.L.L.P.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Jones Financial Companies, L.L.L.P.
We have audited in accordance with auditing standards generally accepted in the United States, the financial statements included in The Jones Financial Companies, L.L.L.P. Form 10-K for the year ended December 31, 2001, and have issued our report thereon dated February 22, 2002. Our audit was made for the purpose of forming an opinion on those statements taken as a whole. Schedule I listed in the index to Item 14 on Form 10-K for the year ended December 31, 2001, is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic financial statements. Schedule I has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
St. Louis, Missouri,
February 22, 2002
THE JONES FINANCIAL COMPANIES, L.L.L.P.
TWELFTH
AMENDED AND RESTATED
AGREEMENT OF REGISTERED
LIMITED LIABILITY LIMITED PARTNERSHIP
Dated as of June 15, 2001
INDEX
-----
ARTICLE ONE DEFINED TERMS.........................................................................................3
ARTICLE TWO CONTINUATION, NAME AND OFFICE, PURPOSES, TERM AND DISSOLUTION,
REGISTERED AGENT, PARTNER LIST...........................................................................8
2.1 Continuation.........................................................................................8
2.2 Name, Place of Business and Office...................................................................8
2.3 Purposes.............................................................................................8
2.4 Term and Dissolution.................................................................................9
2.5 Registered Office and Agent..........................................................................9
2.6 Amendment to Certificate of Limited Partnership......................................................9
ARTICLE THREE PARTNERS AND CAPITAL................................................................................9
3.1 General Partners.....................................................................................9
3.2 Admission of Additional General Partners............................................................10
3.3 Limiteds and Contained Payments to Limited Partners.................................................10
3.4 Admission of Limiteds...............................................................................10
3.5 Partnership Capital.................................................................................11
3.6 Liability of Limiteds...............................................................................11
3.7 Participation in Partnership Business by Limiteds...................................................11
3.8 Priority Among Limiteds.............................................................................11
ARTICLE FOUR RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNERS...................................................11
4.1 Authorized Acts; Management and Control.............................................................11
4.2 Restrictions on Authority of the Managing Partner and Executive Committee...........................13
4.3 Removal or Dismissal of Certain Partners............................................................13
4.4 Executive Committee.................................................................................13
4.5 Guaranteed Draw; Time and Effort; Independent Activities............................................15
4.6 Duties and Obligations of the Managing Partner......................................................16
4.7 Liability for Acts and Omissions; Indemnification...................................................16
4.8 Dealing with an Affiliate...........................................................................17
4.9 General Partners' Responsibility....................................................................17
4.10 Responsibilities of Partnership Leaders............................................................17
ARTICLE FIVE MEETINGS AND VOTING OF PARTNERS.....................................................................18
5.1 Meetings of General Partners; Voting at Such Meetings...............................................18
5.2 Percentage of Voting Power for Partnership Decisions................................................18
5.3 Robert's Rules to Govern............................................................................18
5.4 Consent of General Partners in Lieu of a Meeting....................................................18
ARTICLE SIX EVENT OF WITHDRAWAL OF A PARTNER AND CONVERSION OF CLASS II SUBORDINATED LIMITED
PARTNER CAPITAL TO CLASS I SUBORDINATED LIMITED PARTNER CAPITAL.........................................20
6.1 Voluntary Event of Withdrawal.......................................................................20
6.2 Withdrawal Upon Request.............................................................................20
i
|
6.3 Return of Capital and Purchase of Interest..........................................................20
6.4 Death of a Limited..................................................................................22
6.5 Death or Disability of a General Partner............................................................22
6.6 General Partner Interest - 56th Birthday............................................................24
6.7 Restriction on Capital Contribution Return..........................................................24
6.8 Liability of a Withdrawn General Partner............................................................25
6.9 Effect of Event of Withdrawal.......................................................................25
6.10 Conversion from Class II to Class I Subordinated Limited Partner...................................25
ARTICLE SEVEN TRANSFERABILITY OF PARTNER INTERESTS...............................................................26
7.1 Restrictions on Transfer............................................................................26
7.2 Substituted Limited Partners........................................................................26
ARTICLE EIGHT DISTRIBUTIONS AND ALLOCATIONS; LIABILITY OF GENERAL PARTNERS.......................................27
8.1 Distribution of Net Income..........................................................................27
8.2 Distributions Upon Dissolution......................................................................29
8.3 Distribution of Frozen Appreciation Amount..........................................................29
8.4 Sale of Assets to Third Party.......................................................................30
8.5 Other Sales or Dispositions to Third Party..........................................................31
8.6 Allocation of Profits and Losses for Tax Purposes...................................................31
8.7 Liability of General Partners.......................................................................33
ARTICLE NINE BOOKS, RECORDS AND REPORTS, ACCOUNTING, TAX ELECTIONS, ETC..........................................33
9.1 Books, Records and Reports..........................................................................33
9.2 Bank Accounts.......................................................................................34
9.3 Depreciation and Elections..........................................................................34
9.4 Fiscal Year.........................................................................................34
ARTICLE TEN MEDIATION/ARBITRATION................................................................................35
10.1 Mediation/Arbitration..............................................................................35
10.2 Forum Selection....................................................................................36
10.3 Statute of Limitations.............................................................................37
10.4 Other Agreements...................................................................................37
ARTICLE ELEVEN GENERAL PROVISIONS................................................................................37
11.1 Appointment of Attorneys-in-Fact...................................................................37
11.2 Word Meanings......................................................................................38
11.3 Binding Provisions.................................................................................38
11.4 Applicable Law.....................................................................................39
11.5 Counterparts.......................................................................................39
11.6 Entire Agreement...................................................................................39
11.7 Separability of Provisions.........................................................................39
11.8 Representations....................................................................................39
11.9 Section Titles.....................................................................................39
11.10 Partition.........................................................................................39
ii
|
11.11 No Third Party Beneficiaries......................................................................40
11.12 Amendments........................................................................................40
11.13 Revocable Trusts..................................................................................40
|
THE JONES FINANCIAL COMPANIES, L.L.L.P.
(a Missouri Registered Limited Liability Limited Partnership)
TWELFTH
AMENDED AND RESTATED
AGREEMENT OF REGISTERED
LIMITED LIABILITY LIMITED PARTNERSHIP
THIS TWELFTH AMENDED AND RESTATED AGREEMENT OF REGISTERED LIMITED LIABILITY LIMITED PARTNERSHIP of The Jones Financial Companies, L.L.L.P. entered into as of this 15th day of June, 2001, by and among John W. Bachmann as General Partner, and John W. Bachmann as the Attorney-In-Fact for all of the other General Partners, all of the Limited Partners, all of the Class I Subordinated Limited Partners (none at the date of this Agreement) and all of the Class II Subordinated Limited Partners (formerly referred to as the "Subordinated Limited Partners").
W I T N E S S E T H:
WHEREAS, the Partnership was formed as a limited partnership under the Missouri Revised Uniform Limited Partnership Act pursuant to an Agreement and Certificate of Limited Partnership dated June 5, 1987;
WHEREAS, the Partnership filed on July 15, 1987 its Amended and Restated Agreement and Certificate of Limited Partnership dated July 15, 1987 (the "Restated Agreement");
WHEREAS, the Partnership filed on August 28, 1987, November 16, 1987, August 5, 1988, August 29, 1988, January 31, 1989, March 21, 1989 and August 10, 1989 its Amendments No. 1, 2, 3, 4, 5, 6 and 7 respectively, to its Restated Agreement;
WHEREAS, the Partnership filed on June 22, 1989 its Partner List as of May 31, 1989;
WHEREAS, the Restated Agreement as amended is hereinafter referred to as the "First Restated Agreement";
WHEREAS, the First Restated Agreement was amended and restated in its entirety pursuant to a Second Amended and Restated Agreement and Certificate of Limited Partnership dated as of January 31, 1990 (the "Second Restated Agreement");
WHEREAS, the Missouri Revised Uniform Limited Partnership Act was amended in August of 1990 and no longer requires certain information in certificates of limited partnership (filed with the Secretary of State) and now requires corresponding amendments to be made to agreements of limited partnership;
WHEREAS, the Partnership desired that the aforesaid Second Restated Agreement become two separate documents, namely a Third Amended and Restated Agreement of Limited Partnership (the "Third Restated Agreement") and a separate restated Certificate of Limited Partnership;
WHEREAS, the Second Restated Agreement was amended and restated in its entirety pursuant to said Third Restated Agreement dated as of January 31, 1991;
WHEREAS, the Third Restated Agreement was amended and restated in its entirety pursuant to the Fourth Amended and Restated Agreement of Limited Partnership (the "Fourth Restated Agreement") dated as of January 1, 1993;
WHEREAS, the Fourth Restated Agreement was amended and restated in its entirety pursuant to the Fifth Amended and Restated Agreement of Limited Partnership (the "Fifth Restated Agreement") dated as of May 24, 1993;
WHEREAS, the Fifth Restated Agreement was amended and restated in its entirety pursuant to the Sixth Amended and Restated Agreement of Limited Partnership (the "Sixth Restated Agreement") dated as of October 1, 1993;
WHEREAS, the Sixth Restated Agreement was amended and restated in its entirety pursuant to the Seventh Amended and Restated Agreement of Limited Partnership (the "Seventh Restated Agreement") dated as of August 31, 1996;
WHEREAS, the Seventh Restated Agreement was amended and restated in its entirety to register the Partnership as a registered limited liability partnership pursuant to the Eighth Amended and Restated Agreement of Limited Partnership (the "Eighth Restated Agreement") dated as of November 1, 1996;
WHEREAS, the Partnership filed as of February 26, 1998 an Amendment to the Certificate of Limited Partnership changing the Partnership's name from The Jones Financial Companies, L.P., LLP to The Jones Financial Companies, L.L.L.P.;
WHEREAS, the Eighth Restated Agreement was amended and restated in its entirety pursuant to the Ninth Amended and Restated Agreement of Registered Limited Liability Limited Partnership (the "Ninth Restated Agreement") dated as of April 1, 1998; and
WHEREAS, the Ninth Restated Agreement was amended and restated in its entirety pursuant to the Tenth Amended and Restated Agreement of Registered Limited Liability Limited Partnership (the "Tenth Restated Agreement") dated as of February 25, 1999; and
WHEREAS, the Tenth Restated Agreement was amended and restated in its entirety pursuant to the Eleventh Amended and Restated Agreement of Registered Limited Liability Limited Partnership (the "Eleventh Restated Agreement") dated as of May 23, 2000; and
WHEREAS, the parties now desire to amend and restate said Eleventh Restated Agreement in its entirety pursuant to this Twelfth Amended and Restated Agreement of Registered Limited Liability Limited Partnership.
NOW, THEREFORE, pursuant to the terms, covenants and conditions set forth herein and the mutual promises contained herein, the parties hereto agree as follows:
The defined terms used in this Agreement shall have the meanings specified below:
(i) the amount of the Partner's Capital Contributions; and
(ii) the amount of Partnership income (including income exempt from federal income tax) and gain (or items thereof) allocated to the Partner pursuant to Article Eight hereof;
and which shall be debited by:
(iii) the amount of Partnership losses and deductions (or items thereof) allocated to the Partner pursuant to Article Eight hereof;
(iv) the amount of Partnership expenditures described in Treasury Regulations Section 1.704-1(b)(2)(iv)(i) allocable to the Partner in the same proportion as that in which the Partner bears the economic burden of those expenditures; and
(v) the amount of all distributions to the Partner pursuant to Article Eight hereof.
In addition, the Capital Account of each Partner shall be adjusted as necessary to comply with Treasury Regulations Section 1.704-1(b)(2)(iv). In the event the Managing Partner shall determine that it is prudent to modify the manner in which the Capital Accounts or any debits or credits thereto are completed in order to comply with such regulations, the Managing Partner may amend this Agreement to reflect such modification, provided that it is not likely to have a material effect on the amounts distributable to the Partners pursuant to Article Eight upon dissolution of the Partnership.
If any Partner would otherwise have a negative balance in his Capital Account, the amount of any such negative balance shall be reduced (but not in excess of such negative balance) by the amount of such Partner's share of Partnership Minimum Gain (determined in accordance with Treasury Regulations Section 1.704-1(b)(4)(iv)(f)) after taking into account all increases and decreases to such Partnership Minimum Gain during the taxable year.
In the event that the Partnership is deemed to be terminated for federal income tax purposes due to the sale or exchange of fifty percent (50%) or more of the Partnership interests within a twelve (12) month period, appropriate adjustment shall be made to the Capital Accounts to reflect such termination as required by the Internal Revenue Code and applicable Treasury Regulations.
In the event that interests in the Partnership are sold, exchanged or otherwise transferred, and the transfer is recognized under Article Six or Article Seven hereof, or by operation of law, the Capital Account of the transferee will equal the Capital Account of the transferor immediately before the transfer. However, if such a sale or exchange, either alone or in combination with other sales or exchanges within a twelve-month period results in a transfer of fifty percent (50%) or more of the Partnership interests causing a termination of the Partnership for federal income tax purposes, the adjustment required by the immediately preceding paragraph shall be made.
The parties hereto hereby continue the Partnership as a registered limited liability limited partnership pursuant to the provisions of the Missouri Limited Partnership Act and the Missouri Partnership Act.
The Partnership shall be conducted under the name of "The Jones Financial Companies, L.L.L.P.". The principal office and place of business shall be 12555 Manchester Road, Des Peres, Missouri 63131. The General Partners may at any time change the location of such principal office. Notice of any such change shall be given to the Partners on or before the date of any such change.
The purposes of the Partnership shall be to act as a limited partner in Edward D. Jones & Co., L.P., ("EDJ") to act as a general partner, limited partner, guarantor, stockholder or holding partnership for any other limited partnership, general partnership, limited liability partnership, limited liability limited partnership, limited liability company, corporation or other entity and to engage in such other activities as may be approved by the General Partners.
A. The Partnership shall continue in full force and effect until December 31, 2199, or until dissolution prior thereto upon the happening of any of the following events:
(i) The sale of all of the assets of the Partnership;
(ii) An Event of Withdrawal of a General Partner if no General Partner remains; or
(iii) The dissolution of the Partnership by the General Partners.
B. Upon dissolution of the Partnership, the General Partners shall cause the cancellation of the Partnership's Certificate of Limited Partnership, liquidate the Partnership's assets and apply and distribute the proceeds thereof in accordance with Section 8.2 hereof.
The name and address of the Registered Agent and Registered Office for service of process on the Partnership are as set forth in the Certificate of Limited Partnership.
The Certificate of Limited Partnership shall be amended within thirty days of the admission or withdrawal of a General Partner.
A. The name, last known mailing address and current Capital Contribution of each General Partner are reflected in the books and records of the Partnership.
B. Any General Partner, in addition to being a General
Partner, may also become a Limited by complying with the provisions of
Section 3.4 hereof. In such event, said General Partner shall have all the
rights and powers and be subject to all the restrictions of a General
Partner, except that, in respect to his Capital Contribution as a Limited,
he shall have the rights against the other Partners which he would have had
if he were not also a General Partner.
C. From time to time, the Managing Partner may allow one or more General Partners to increase their Capital Contributions. Such increased Capital Contributions shall be made in such amount and manner and at such time as determined by the Managing Partner and the General Partner's Percentages shall be appropriately adjusted and transferred. All such changes shall be reflected in the books and records of the Partnership.
A. The Managing Partner may at any time designate additional General Partners with such interest in the Partnership as the Managing Partner and such additional General Partners may agree upon. The additional General Partner shall make his Capital Contribution to the Partnership in such manner and at such time as determined by the Managing Partner and the General Partner Percentages shall be appropriately adjusted and transferred. All such changes shall be reflected in the books and records of the Partnership. The Managing Partner may admit additional General Partners to the Partnership at any time without the consent of any current General Partner or Limited.
B. Each additional General Partner shall agree, as a condition to becoming an additional General Partner, to be bound by the terms and provisions of this Agreement and any other agreement (including cash subordination agreements) as deemed appropriate by the Managing Partner.
A. There shall be three classes of Limiteds, namely, Limited Partners, Class I Subordinated Limited Partners and Class II Subordinated Limited Partners. The name, last known mailing address and current Capital Contribution of each Limited Partner, Class I Subordinated Limited Partner and Class II Subordinated Limited Partner are reflected in the books and records of the Partnership.
B. Each Limited Partner shall be paid 7-1/2% per annum, on the principal amount of his Capital Contribution. Such payments shall be made yearly or more frequently, as determined by the Managing Partner. All such payments shall be treated as guaranteed payments.
A. The Managing Partner is authorized to admit to the Partnership Limiteds who may be admitted as Limited Partners, Class I Subordinated Limited Partners or as Class II Subordinated Limited Partners, at the discretion of the Managing Partner.
B. The Capital Contributions of the Limiteds shall be made in such manner and at such time as determined by the Managing Partner. All such changes shall be reflected in the books and records of the Partnership.
C. Each Limited shall agree, as a condition to becoming a Limited, to be bound by the terms and provisions of this Agreement and any other agreements (including cash subordination agreements) as deemed appropriate by the Managing Partner.
A. The total capital of the Partnership shall be the aggregate amount of the Capital Contributions of the Partners as provided for herein.
B. Except as provided herein, or as otherwise determined by the Managing Partner, no Partner shall be paid interest on any Capital Contribution to the Partnership.
C. Except as otherwise provided herein, prior to dissolution of the Partnership, no Partner shall have the right to demand the return of his Capital Contribution. No Partner shall have the right to demand and receive property other than cash in return for his Capital Contribution.
D. The General Partners shall have no personal liability for the repayment of the Capital Contribution of any Limited.
A Limited shall only be liable to make the payment of his Capital Contribution. Except as provided in the Missouri Limited Partnership Act, no Limited shall be liable for any obligations of the Partnership. After his Capital Contributions shall be paid to the Partnership, no Limited shall be required to make any further Capital Contribution or lend any funds to the Partnership, except as otherwise expressly provided in this Agreement.
No Limited (except one who may also be a General Partner, and then only in his capacity as a General Partner) shall participate in or have any control over the Partnership business (except as required by law) or shall have any authority or right to act for or bind the partnership. The Limiteds hereby consent to the exercise by the Managing Partner and the General Partners of the powers conferred on them by this Agreement.
Priorities as between classes of Limiteds as to distributions are set forth in Article Eight hereof.
A. Subject to the other provisions set forth below, the General Partners have the exclusive right to manage the business of the Partnership and are hereby authorized to take any action (including, but not limited to, the acts authorized by Section 4.1C below) of any kind and to do anything and everything in accordance with the provisions of this Agreement.
B. John W. Bachmann is hereby designated by the General
Partners as the Managing Partner of the Partnership. As the Managing Partner
he shall serve as Chairman of the Executive Committee. As Managing Partner,
he shall have the absolute right (subject to Section 4.4C hereof) to manage
the business of the Partnership on behalf of the General Partners and is
hereby authorized to take on behalf of the Partnership and the General
Partners any action (including, but not limited to, the acts authorized by
Section 4.1C below) of any kind and to do anything and everything in
accordance with the provisions of this Agreement. The Managing Partner shall
have all the rights, powers and duties usually vested in the managing
partner of a partnership including the administration of this Partnership's
business and the determination of its business policies and he shall control
the management and conduct of all of the business transacted by the
Partnership. In particular, but not in limitation of the foregoing, the
Managing Partner for, in the name and on behalf of, the Partnership and the
General Partners is hereby specifically authorized (i) to admit to the
Partnership any General Partner or Limited; (ii) to dismiss (in accordance
with Section 6.2 hereof) from the Partnership any General Partner or
Limited; (iii) to determine the General Partner's Adjusted Capital
Contribution (and the related General Partner Percentage) that each General
Partner (including the Managing Partner) shall be entitled to maintain;
(iv) to determine the guaranteed draw (described in Section 4.5A hereof) to
be paid to each General Partner (which guaranteed draw shall be set forth on
a list to be maintained in the Managing Partner's office which list shall be
available for inspection by the General Partners); (v) to determine the
amount, if any, of bonus compensation (in addition to the funds provided for
in Section 8.1A(iv) to be paid to one or more Partners to assist such
Partner(s) in maintaining or making initial or additional Capital
Contributions to the Partnership, provided, however, such aggregate bonus
compensation in any calendar year shall not exceed $1,500,000; (vi) to
determine the amount, if any, of the Capital Contribution that each General
Partner or Limited shall be entitled to maintain; (vii) to determine all
amounts, if any, to be distributed to the Limiteds pursuant to Section 8.5
hereof; (viii) to convey title to any assets of the Partnership; and (ix) to
execute all documents (including, but not limited to, any loan documents or
guarantees) on behalf of the Partnership and (x) to sign on behalf of the
Partnership and each of its Partners, all documents and forms required by
(A) any domestic or foreign jurisdiction where the Partnership is engaged in
business so as to qualify as a registered limited liability limited
partnership or comparable entity and (B) any governmental agency requiring
the Partnership to appoint a registered agent and/or office for service of
process in such jurisdictions.
C. The General Partners for, in the name and on behalf of, the
Partnership are hereby authorized to take any and all actions, and to engage
in any kind of activity and to perform and carry out all functions of any
kind necessary to, or in connection with, the business of the Partnership
(including but not limited to): (i) executing any instruments on behalf of
the Partnership; (ii) acquiring or selling assets of the Partnership;
(iii) entering into loans, guarantees in connection with the business of the
Partnership; (iv) acting as a partner or shareholder of, or adviser to, any
other organization; (v) contributing capital, as a limited partner or as a
general partner, or purchasing other securities in or otherwise investing in
EDJ or any other limited partnership, general partnership, corporation or
other entity and taking all actions required as a partner, shareholder or
investor in any such entity.
D. The special authority granted herein to the Managing Partner shall not be construed to restrict the authority of any General Partner to act as the agent of the Partnership and
to execute instruments in the Partnership name for the purpose of carrying on the ordinary business of the Partnership.
E. The Managing Partner may delegate to any General Partner the authority from time to time to execute documents or otherwise exercise the authority of the Managing Partner, but such authority shall not include the authority to increase the capital or change the business policies of the Partnership unless such authority is expressly and specifically granted in writing to such General Partner.
F. Whenever authority is herein conferred upon the Managing Partner or the General Partners, any person, other than a General Partner, dealing with the Partnership may rely conclusively upon the authority and signature of the Managing Partner or any one other General Partner to exercise such authority without determining that such Managing Partner or such General Partner is acting with the approval of the other General Partners. In addition, third parties dealing with the Partnership may rely upon the certification of the Managing Partner or any other General Partner as to the continued existence of the Partnership, the identity of its current Partners and the authority of any Partner to execute any document.
In the event that a meeting of General Partners is called by the General Partners in accordance with Section 5.1 hereof to vote upon the removal of the Managing Partner or an Executive Committee member, neither the Managing Partner nor the Executive Committee shall from the time of notice of such meeting until after adjournment thereof: (i) change the General Partner Percentage of any General Partner or (ii) admit or dismiss any General Partner as a Partner.
The Managing Partner may be removed from such office and any
General Partner may be dismissed as a General Partner (in accordance with
Section 6.2 hereof) by a vote of General Partners holding a majority of the
General Partner Percentages in the Partnership.
A. An Executive Committee is hereby created consisting of the Managing Partner and five (5) to nine (9) additional General Partners, the number thereof to be determined from time to time by the Managing Partner. There shall be maintained in the office of the General Counsel of the Partnership a list, certified by the Managing Partner as being true and correct, of the General Partners, who in addition to the Managing Partner, constitute the current Executive Committee of the Partnership. Among the purposes of the Executive Committee is to provide counsel and advice to the Managing Partner in discharging his functions.
B. Each member of the Executive Committee shall have one vote.
C. Upon the majority vote of the Executive Committee, the Executive Committee may override any determination made by the Managing Partner as to (i) the General Partner's Adjusted Capital Contribution (and the related General Partner Percentage) that each General Partner (including the Managing Partner) shall be entitled to maintain, (ii) the admission of a new General Partner and (iii) the dismissal of a General Partner.
D. Upon the majority vote of the Executive Committee, the Managing Partner may be removed from his office as the Managing Partner.
E. At any time during which there is no Managing Partner the Executive Committee shall succeed to all of the powers and duties of the Managing Partner.
F. Upon the majority vote of the Executive Committee, a new Managing Partner shall be elected whenever the office of the Managing Partner is vacant. Such vote shall be taken within two (2) weeks after such office becomes vacant.
G. If the Executive Committee believes that the office of the Managing Partner may become vacant, for any reason whatsoever, including, but not limited, to retirement or resignation of the current Managing Partner, then the Executive Committee may establish procedures (as it shall determine appropriate, in its sole discretion) to review potential candidates and then to choose from such candidates the person to be the new Managing Partner when the office of the Managing Partner becomes vacant.
H. The Managing Partner shall have the right to appoint and dismiss any member of the Executive Committee; provided however that the Managing Partner shall not have the right to dismiss any member of the Executive Committee or increase or decrease the number of General Partners on the Executive Committee from the time Notice is given of a meeting of the Executive Committee until the adjournment thereof if the purpose of such meeting is to vote upon one or more of the matters set forth in Sections 4.4C or 4.4D hereof.
I. By a vote of the General Partners holding a majority of the General Partner Percentages in the Partnership, the General Partners may remove any Executive Committee member from his position as an Executive Committee member and elect in his place a new Executive Committee member.
J. If the General Partners remove any Executive Committee member from his position as an Executive Committee member, the Managing Partner may not appoint such removed Executive Committee member to the Executive Committee for a period of six (6) months thereafter. Any Executive Committee member elected to the Executive Committee by a vote of the General Partners may not be dismissed as an Executive Committee member by the Managing Partner.
K. A meeting of the Executive Committee shall be held (i) at any time on call of the Managing Partner after one (1) day's Notice has been delivered to the Executive
Committee members or (ii) on at least ten (10) day's Notice in advance to the Executive Committee members, jointly signed by any two (2) Executive Committee members, specifying the date, place, hour and purpose of the meeting.
A. Each General Partner shall receive a guaranteed draw for his services as determined by the Managing Partner in his sole discretion. Such guaranteed draw shall be treated by the Partnership as a guaranteed payment. Such guaranteed draw shall be reduced by any net commissions earned by any such General Partner (and paid to such General Partner by EDJ) who is principally engaged in the sale of securities to the public. If any such General Partner who is principally engaged in the sale of securities to the public at EDJ incurs any reasonable expenses through usual and ordinary means of generating the sales upon which such General Partner is entitled to receive commissions from EDJ, then such General Partner must personally and individually pay, without reimbursement from the Partnership or from EDJ, such expense but such General Partner shall be entitled to deduct such expenses on his personal income tax return, all as permitted by the Internal Revenue Code.
B. Each General Partner shall devote his entire time, energy, skill and ability to the duties of operating the Partnership and the entities it owns. General Partners shall not engage in outside business activities without the prior written consent of the Managing Partner. Each General Partner agrees not to use the name or property of the Partnership or any entity it owns for his own private business, nor for any purpose whatsoever except those that may be incidental to the conduct and management of the Partnership, nor shall any General Partner use the name of the Partnership or any entity it owns for the use or accommodation of any other person. No General Partner shall incur any obligation in the name of the Partnership or transfer Partnership property except in connection with Partnership business.
C. Each General Partner agrees that he will not, without the written consent of the Managing Partner (i) become a guarantor or surety for any person, firm or corporation; (ii) in the name of the Partnership or any entity it owns or in his own name buy or sell stocks, securities or commodities on margin, either for the account of the Partnership or for his own account; or (iii) pledge or hypothecate any of the property of the Partnership or any entity it owns for any purpose whatsoever.
D. Each General Partner shall submit, upon request by the Managing Partner, a copy of any of his current personal income tax returns (for any time period during which such Partner was a Partner of the Partnership) for inspection by independent accountants selected by the Managing Partner. In addition, each General Partner agrees, if requested by the Managing Partner, to have such General Partner's income tax returns prepared by an entity (which could be the Partnership itself or independent accountants) selected by such General Partner and acceptable to the Managing Partner.
E. Each Partner is expected, and it is regarded as such Partner's duty, to supplement expenses reimbursable to such Partner by the Partnership by additional expenditures of such Partner's personal funds in the furtherance of the Partnership's business which expenditures such Partner shall be entitled to deduct on his personal income tax return, all as
permitted by the Internal Revenue Code. In this connection, as deemed
appropriate under the circumstances, such additional expenditures have
included in the past and shall include in the future, but shall not
be limited to (a) subscribing to professional and business journals,
(b) maintaining active memberships in professional associations, other
associations, luncheon clubs and other clubs where the Partner will have an
opportunity to further the development of, and to maintain the Partnership's
relationship with, its customers, (c) providing space, facilities and
telephone equipment in the Partner's home in order that the Partner may work
on the Partnership's business while at home, (d) purchasing necessary
supplies, books, furniture, computers, fax machines, car telephones
and other items, (e) providing for transportation to customers' offices,
(f) entertaining customers and prospective customers and (g) continuing the
Partner's business-related education, including attendance at seminars and
obtaining advanced educational degrees.
F. In the event any Partner becomes a party in any lawsuit, arbitration or other similar proceeding, such Partner agrees to notify promptly the Managing Partner of such event.
A. The Managing Partner shall prepare (or cause to be prepared) and file such amendments to this Agreement or any certificate of limited partnership or any certificate of limited liability partnership as are required by law or as he deems necessary to cause this Agreement or any certificate of limited partnership or any certificate of limited liability partnership to reflect accurately the agreement of the Partners, the identity of the Limiteds or the General Partners and the amounts of their respective Capital Contributions.
B. The Managing Partner shall prepare (or cause to be prepared) and file such tax returns and other documents, as are required by law or as he deems necessary, for the operation of the Partnership. In addition, in his discretion, the Managing Partner may prepare (or cause to be prepared) and file composite tax returns in various states for all electing non-resident partners (otherwise not required to file a state income tax return in such state) of those states and cause to be paid out of their draw accounts (or any other of their funds being held by the Partnership) the amount of tax attributable to each such non-resident partner and/or to withhold from distributions of profits, if necessary, all such tax amounts for current and former partners of the Partnership and if reimbursement for such taxes to the Partnership is needed from a former Partner, then each Partner hereby agrees that he will if he is then a former Partner reimburse the Partnership for such tax expense and/or if the Partnership currently then holds any funds belonging to such former Partner, then such tax expense may be offset against such funds being held by the Partnership.
Neither the Managing Partner nor any General Partner shall be liable, responsible or accountable in damages or otherwise to any of the Partners for, and the Partnership shall indemnify and save harmless the Managing Partner and any General Partner from any loss or damage incurred by reason of, any act or omission performed or omitted by him in good faith on
behalf of the Partnership and in a manner reasonably believed by him to be within the scope of the authority granted to him by this Agreement and in the best interests of the Partnership, provided that the Managing Partner or the General Partner shall not have been guilty of gross negligence or gross misconduct with respect to such acts or omissions and, further, provided that the satisfaction of any indemnification and any saving harmless shall be paid out of and limited to Partnership assets and no Partner shall have any personal liability on account thereof.
The Managing Partner may for, in the name of and on behalf of, the Partnership enter into such agreements, contracts or the like with any Affiliate of any General Partner or with any General Partner, in an independent capacity, as distinguished from his capacity (if any) as a Partner, to undertake and carry out the business of the Partnership as if such Affiliate or General Partner were an independent contractor; and the Managing Partner may obligate the Partnership to pay reasonable compensation for and on account of any such services.
Each General Partner shall be responsible and accountable to the
Partnership's customers and clients for the rendering of such General
Partner's services. No other General Partner, regardless of title or
position with the Partnership shall (a) be responsible, liable or
accountable to the Partnership's customers and clients for any other
Partner's rendering of services to the Partnership's customers or clients or
(b) have the right or obligation of direct supervision and control (except
as otherwise mandated by the Securities Exchange Act of 1934, as amended,
the rules and regulations promulgated thereunder and comparable state
securities laws) of another Partner while such other Partner is rendering
services on behalf of the Partnership.
The Partnership's officers and committees, including, but not limited to, the Managing Partner, any member of the Executive Committee (or any other member of any other committee of the Partnership), any chairperson, any departmental manager, and any other departmental or Partnership leader (regardless of title), and the Executive Committee (taken as a whole), shall not have, solely by reason of being such an officer or committee or acting (or omitting to act) in such capacity, (a) any responsibility, liability or accountability for any Partner's rendering of services to the Partnership's customers and clients or (b) the right or obligation of direct supervision and control of a Partner while such Partner is rendering services on behalf of the Partnership.
A. A meeting of General Partners shall be held (i) on the call of the Managing Partner after five (5) days Notice thereof has been delivered to the General Partners, or (ii) on at least 10 days Notice in advance to the General Partners, jointly signed by any five (5) General Partners, specifying the date, place, hour and purposes of the meeting.
B. Except as otherwise expressly provided, at any meeting of the General Partners, each General Partner shall have voting power equal to his General Partner Percentage at the time of the meeting. A quorum for any purpose at any meeting of the General Partners shall exist if General Partners then holding more than 50% of the voting power of all General Partners are present or voting by proxy. Any General Partner may vote on any matter if not present in person, by general or specific written proxy given to another General Partner. No proxy shall be valid after two (2) months from the date of its execution. General Partners may participate in any meeting by means of conference telephone or similar communications equipment whereby all persons participating in such meeting can hear each other. Participation in a meeting in this manner shall constitute presence in person at the meeting.
C. Unless otherwise permitted by the Managing Partner, the only matters to be voted upon by the General Partners at any meeting of the General Partners shall be those matters set forth in Sections 4.3 and 4.4 hereof.
A. Except as otherwise specifically provided in this Agreement, the affirmative vote of more than 50% of the voting power of all General Partners shall determine all issues at any meeting of the General Partners.
B. Any percentage of voting power of the General Partners required by this Agreement shall relate to the percentage of the total voting power of all General Partners entitled to vote on the issue and not to a percentage of the voting power of the General Partners present at a meeting.
Except as otherwise specifically provided in this Agreement, all matters of parliamentary procedure at meetings of the General Partners shall be governed by Robert's Rule of order Revised. The Managing Partner may appoint a parliamentarian.
A. Notwithstanding anything to the contrary contained in this Agreement, any action required or permitted by this Agreement to be taken at any meeting of the General Partners may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by Partners having not less than the minimum voting power that would be necessary to authorize or take such action at a meeting of the Partners.
B. Prompt Notice of the taking of any action pursuant to this
Section 5.4 by less than unanimous written consent of the General Partners
shall be given to those General Partners who have not consented in writing.
A. Any General Partner shall have the right to retire or voluntarily withdraw from the Partnership upon 30 days prior written notice to the Managing Partner. In the event that there is only one General Partner, he shall give notice to the Limiteds of his intent to withdraw from the Partnership at least 30 days prior to the date of withdrawal.
B. Any Limited shall have the right to retire or voluntarily withdraw from the Partnership effective immediately upon written notice to the Managing Partner (a "Limited Partner Voluntary Withdrawal Notice").
The Managing Partner or any number of General Partners holding in the aggregate a majority of the General Partner Percentages, may request in writing that any Partner withdraw from the Partnership (a "Mandatory Withdrawal Notice"), and each Partner agrees that he will so withdraw within 30 days of the receipt of such request.
A. In the event of any withdrawal by a General Partner from the Partnership pursuant to Section 6.1 or 6.2 hereof or in the event a General Partner wishes to withdraw some of his Capital Contribution as a General Partner, the Managing Partner may designate all or some of the remaining General Partners, to purchase the General Partner Interest (including Frozen Appreciation Amount) of the withdrawing General Partner, subject to the approval of the Managing Partner. Such purchases shall be consummated (retroactively as of the actual date of his withdrawal) within 60 days after the actual date of such withdrawal. The price (the "Price") of the General Partner Interest of the withdrawing General Partner shall be the value (as shown on the books of the Partnership) of his Frozen Appreciation Amount plus the value of such General Partner's Adjusted Capital Contribution, calculated as of the previous Valuation Date if such withdrawal takes place on or prior to the 15th day of a month or calculated as of the next Valuation Date if such withdrawal takes place on or after the 16th day of a month. Goodwill, if any, and the Partnership name shall not be deemed assets or as having any property value in making the foregoing calculation.
B. Unless otherwise determined by the Managing Partner, the Price to be received by the withdrawing General Partner shall be delivered by the withdrawing General Partner to the Partnership and shall (retroactively as of the actual date of his withdrawal) be the Capital Contribution of such former General Partner as that of a Class II Subordinated Limited Partner and such General Partner shall thereupon become or continue to remain a Class II Subordinated Limited Partner as to such Capital Contribution.
C. Unless otherwise determined by the Managing Partner, any General Partner Interest (including Frozen Appreciation Amount) not purchased by the remaining General Partners within such 60 day period shall be converted (retroactively as of the actual date of his withdrawal) so as to become the Capital Contribution of such former General Partner as that of a Class II Subordinated Limited Partner and such General Partner shall thereupon become or continue to remain a Class II Subordinated Limited Partner as to such Capital Contribution.
D. A withdrawing General Partner shall have no right to become a Limited or to require the conversion of his General Partner Interest (or Price, if applicable) to the Capital Contribution of a Class II Subordinated Limited Partner. The Managing Partner may determine to have the Partnership redeem such General Partner's Interest. In addition the Managing Partner has the right to cause the Partnership to redeem the Capital Contribution of a Class II Subordinated Limited Partner at any time.
E. Upon the withdrawal of a General Partner, the General Partner Percentages of the remaining General Partners shall be recalculated (as of the actual date of withdrawal) on the same relative basis so as to aggregate 100% (and the related General Partner Adjusted Capital Contributions shall also be appropriately adjusted).
F. In addition, any withdrawing General Partner shall receive (within 75 days after the actual date of his withdrawal) his pro rata share of any cash distributions to which he is entitled as set forth in Section 8.1 hereof, calculated as of the previous Valuation Date if such withdrawal takes place on or prior to the 15th day of a month or calculated as of the next Valuation Date if such withdrawal takes place on or after the 16th day of a month.
G. In the event a Class II Subordinated Limited Partner desires to withdraw all or any part of such Class II Subordinated Limited Partner's Capital Contribution, then such Class II Subordinated Limited Partner shall give written notice ("Withdrawal Notice") to the Managing Partner of the amount of Capital Contribution that such Class II Subordinated Limited Partner wishes to withdraw from the Partnership (the "Requested Withdrawal Amount"). The Requested Withdrawal Amount shall be paid (subject to the provisions of Section 6.7 hereof) to such Class II Subordinated Limited Partner in four (4) equal installments with the first installment being paid on the last business day of the month following the month in which the Managing Partner receives the Withdrawal Notice, with the balance of the Requested Withdrawal Amount being paid in three (3) equal installments on the 12th, 24th and 36th month anniversary of the first installment payment. Until the Requested Withdrawal Amount has been fully paid to such Class II Subordinated Limited Partner the unreturned portion thereof shall continue for all purposes to be subject to all provisions of this Agreement including, without limitation, Article Eight and Section 6.7. The Managing Partner, in his sole discretion, may cause the Partnership to accelerate the return of the Requested Withdrawal Amount with respect to the entire Requested Withdrawal Amount or accelerate the payment of any or all installments thereof with respect to any Class II Subordinated Limited Partner.
H. In the event of any withdrawal by a Limited Partner from the Partnership, pursuant to Sections 6.1 or 6.2 hereof, the Limited Partner's Capital Contribution (subject to the
provisions of Section 6.7 hereof) shall be paid in three (3) equal installments with the first installment being paid on the last business day of the month following the month in which (a) the Managing Partner receives the Limited Partner Voluntary Withdrawal Notice, or (b) the Limited Partner receives a Mandatory Withdrawal Notice, with the balance of the Capital Contribution being paid in two equal installments on the 1st and 2nd anniversary of the first installment payment. In addition, such Limited Partner shall receive (within 75 days after the actual date of his withdrawal) his pro rata share of any cash distributions to which he was entitled as set forth in Section 8.1 hereof, calculated as of the previous Valuation Date if such withdrawal takes place on or prior to the 15th day of a month or calculated as of the next Valuation Date if such withdrawal takes place on or after the 16th day of a month. Until a Limited Partner's Capital Contribution is fully returned to him, the unreturned portion thereof shall continue for all purposes to be subject to all provisions of this Agreement, including without limitation, Article Eight and Section 6.7 and such Limited Partner shall continue to receive all sums due him pursuant to Section 3.3B hereof. The Managing Partner, in his sole discretion, may cause the Partnership to accelerate the return of a Limited Partner's Capital Contribution or accelerate the payment of any or all installments thereof.
In the event of the death of any Limited, the Capital Contribution
of such deceased Limited shall be returned (subject to the provisions of
Section 6.7 hereof) to his estate within six (6) months after the actual
date of death of the Limited. The provisions of Section 6.3G shall not be
applicable to the Capital Contribution of a deceased Class II Subordinated
Limited Partner or to the Capital Contribution of a deceased Class I
Subordinated Limited Partner and Section 6.3H shall not be applicable to the
Capital Contribution of a deceased Limited Partner. In addition such
Limited's estate shall receive (within 75 days after the actual date of
death of the Limited) the Limited's pro rata share of any cash distributions
to which such deceased Limited was entitled as set forth in Section 8.1
hereof, calculated as of the previous Valuation Date if such withdrawal
takes place on or prior to the 15th day of a month or calculated as of the
next Valuation Date if such withdrawal takes place on or after the 16th day
of a month. Until a deceased Limited's Capital Contribution is returned to
his estate, his estate shall continue to receive all sums which would have
been due to such Limited pursuant to Section 3.3B hereof. As stated herein,
all such payments shall be made to the estate of the deceased Limited unless
the Partnership has received evidence, satisfactory to the Partnership, in
its sole discretion, that such payments should be made to some other entity
or person.
A. In the event of the death of a General Partner, the interest of the deceased General Partner in the Partnership shall terminate as of such date. The Managing Partner may designate all or some of the remaining General Partners to purchase the General Partner Interest (including Frozen Appreciation Amount) of the deceased General Partner, subject to the approval of the Managing Partner. Such purchases shall be consummated within 60 days after the date of death of such General Partner. The price of the General Partner Interest of the deceased General Partner shall be the value (as shown on the books of the Partnership) of his Frozen Appreciation Amount plus the value of such General Partner's Adjusted Capital Contribution, calculated as of
the previous Valuation Date if such death took place on or prior to the
15th day of a month or calculated as of the next Valuation Date if such
death took place on or after the 16th day of a month. Goodwill, if any,
and the Partnership name shall not be deemed assets or as having any
property value in making the foregoing calculation. In addition, the
deceased General Partner shall receive (within 75 days after the date of his
death) his pro rata share of any cash distributions to which he is entitled
as set forth in Section 8.1 hereof, calculated as of the previous Valuation
Date if such death took place on or prior to the 15th day of a month or
calculated as of the next Valuation Date if such death took place on or
after the 16th day of a month. Any General Partner Interest (including
Frozen Appreciation Amount) not purchased by the remaining General Partners
within such 60 day period shall be converted (as of the date of his death)
to the Capital Contribution of a Class II Subordinated Limited Partner and
shall be redeemed (subject to the provisions of Section 6.7 hereof) by the
Partnership within six (6) months thereafter, the specific date to be
determined by the Managing Partner. The provisions of Section 6.3G shall not
be applicable to the Capital Contribution of such deceased Class II
Subordinated Limited Partner. Upon the conversion of a General Partner's
Interest to that of a Class II Subordinated Limited Partner, the General
Partner Percentages of the remaining General Partners shall be recalculated
(as of the actual date of withdrawal) on the same relative basis so as to
aggregate 100% (and the related General Partner Adjusted Capital
Contributions shall also be adjusted). All payments made pursuant to this
Section 6.5A shall be made to the estate of the deceased General Partner,
unless the Partnership has received evidence, satisfactory to the
Partnership, in its sole discretion, that such payments should be made to
some other entity or person.
B. In the event of full or partial disability (as determined in the absolute discretion of the Managing Partner) of a General Partner under age 65 due to illness, accident, or injury, such General Partner shall be entitled to receive his normal share of Partnership Net Income notwithstanding his inability to perform his normal work functions, for a period of up to six (6) full months following the date he suffered the disability. If the disability continues for a period greater than six (6) months but less than one (1) year, then during such period of time the disabled General Partner shall be entitled to receive one-half (1/2) of his normal share of Partnership Net Income. If the disability continues for a period greater than one (1) year in length, then the disabled General Partner must terminate his status as a General Partner, unless otherwise directed by the Managing Partner. In event of termination, the General Partner Interest (including his Frozen Appreciation Amount) of the disabled General Partner shall be treated in the same manner as that of a deceased General Partner pursuant to Section 6.5A hereof, provided that all such payments required by this Section 6.5B shall be made to the disabled General Partner.
A General Partner shall not acquire any additional General Partner Interest after he reaches his 56th birthday. His General Partner Interest (including his Frozen Appreciation Amount) as it exists on his 56th birthday is his "Retiring Interest." On the first business day of the calendar year following the year in which a General Partner's 56th birthday falls and on the first business day of each subsequent calendar year, the General Partner shall sell 1/10th of this Retiring Interest to all or some of the other General Partners, as designated by the Managing Partner, who have not attained 56 years of age and who are willing to purchase such additional interest. The sale price of the Retiring Interest shall be determined in the same manner as set forth in Section 6.5A hereof, with the Valuation Date being the first business day of the appropriate calendar year. Upon payment of the sales price to the selling General Partner by the purchasing General Partner, the books of the Partnership shall be adjusted as of the effective date of sale to show the appropriate reductions and increases in the General Partner Adjusted Capital Contributions (and related General Partner Percentages) of the selling and purchasing General Partners. A General Partner can request that such purchased portion be converted (retroactively as of the first calendar day of the appropriate year) so as to become the Capital Contribution of a Class II Subordinated Limited Partner and if such request is approved by the Managing Partner, then such portion of the retiring interest be so converted. If any portion of a Retiring Interest is not purchased by the other General Partners, then such General Partner can request that such unpurchased portion be converted (retroactively as the first calendar day of the appropriate year) so as to become the Capital Contribution of a Class II Subordinated Limited Partner and if such request is approved by the Managing Partner, then such portion of the Retiring Interest shall be so converted, otherwise such portion of the Retiring Interest shall be redeemed by the Partnership, subject to Section 6.7 hereof. Notwithstanding any other provisions of this Section to the contrary, the Managing Partner may exempt any General Partner from the application of this Section or modify the terms of the sale of any Retiring Interest as he deems advisable.
It is understood and agreed that the Capital Contributions of the
Partners to the Partnership will be used, in part, by the Partnership as
part of the Partnership's capital contribution to EDJ, a brokerage firm
(which is regulated by the Securities and Exchange Commission and the New
York Stock Exchange and other regulatory agencies), and that in order for
the Partnership to return to any Partner his Capital Contribution (or any
part thereof), the Partnership will have to obtain such funds from EDJ.
Therefore, notwithstanding any other provision contained in this Agreement
to the contrary, without the written consent of the Managing Partner, no
Partner shall have returned to him (under any provision of this Agreement)
his Capital Contribution or his General Partner's Adjusted Capital
Contribution, if after giving effect thereto, the Partnership or any
Affiliate thereof (including, but not limited to, EDJ) would, if such
payment had been made directly by EDJ, be in violation of (i) any rule of
the New York Stock Exchange Inc., (ii) any rule issued under the Securities
Exchange Act of 1934, any agreement (cash subordination or otherwise) which
has been entered into by the Partnership or any Affiliate thereof
(including, but not limited to, EDJ), (iii) any agreement (including, but
not limited to, loan agreements) which has been entered into by the
Partnership or any Affiliate thereof (including, but not limited to, EDJ) or
(iv) any other law, rule or regulation to which the
Partnership or any Affiliate thereof (including, but not limited to, EDJ) is subject. In the event there is returned to any Partner all or any portion of his Capital Contribution or his General Partner's Adjusted Capital Contribution and because of such return the Partnership or any Affiliate thereof (including, but not limited to, EDJ) violated any of the aforementioned rules, agreements or regulations, then such Partner hereby irrevocably agrees (whether or not such Partner had any knowledge or notice of such facts at the time of such return) to repay to the Partnership, its successors or assigns, the sum so returned to such Partner to be held by the Partnership pursuant to the provisions hereof as if such return had never been made; provided, however, that any suit for the recovery of any such return must be commenced within two years of the date of such return.
If on the Event of Withdrawal of a General Partner the business of the Partnership shall continue, the General Partner who shall have withdrawn shall be and remain liable for all obligations and liabilities incurred by him as General Partner prior to such Event of Withdrawal, but he shall be free of any obligation or liability incurred on account of the activities of the Partnership from and after the time of such Event of Withdrawal.
Upon the withdrawal (by reason of death or otherwise) of a Partner the Partnership shall not dissolve and the business of the Partnership shall be continued by the remaining General Partners.
A. In the event a Class II Subordinated Limited Partner has exercised his right pursuant to Section 6.3G, then such Class II Subordinated Limited Partner may request, in writing to the Managing Partner (subject to the other provisions of this Section 6.10), that his Requested Withdrawal Amount be converted to the Capital Contribution of Class I Subordinated Limited Partner and thereafter such Class II Subordinated Limited Partner shall, with respect to such converted amount, be a Class I Subordinated Limited Partner.
B. No such conversion shall be permitted unless the Partnership has had Net Income for each of the three (3) proceeding calendar months (for which the Partnership has prepared financial statements) prior to such written request. If a conversion is requested but is not permitted due to the preceding sentence, then such request will be honored (unless withdrawn) as soon as the conditions set forth in the preceding sentence are met by the Partnership.
C. The Requested Withdraw Amount of a Class I Subordinated
Limited shall be paid to such Class I Subordinated Limited Partner in
accordance with the time-table, procedures and restrictions set forth in
Section 6.3G which applied to such Requested Withdrawal Amount prior to the
conversion referred to in this Section 6.10A.
D. On and after the date of conversion of the Requested Withdrawal Amount to the Capital Contribution of a Class I Subordinated Limited Partner, such Requested Withdrawal Amount shall receive Net Income from the Partnership in accordance with Section 8.1A(ii) hereof.
E. A Class I Subordinated Limited Partner shall have no right to request the reconversion of his Class I Capital Contribution to the Capital Contribution of a Class II Subordinated Partner.
A. Each Partner agrees that he will not sell, pledge, exchange, transfer or assign his interest in the Partnership to any Person without the express written consent of the Managing Partner.
B. Each Partner agrees that he will not sell or exchange any of his interest in the Partnership if the interest sought to be sold or exchanged, when added to the total of all other Partner interests sold or exchanged within the period of 12 consecutive months prior thereto, would, in the opinion of counsel for the Partnership, result in the Partnership being considered to have been terminated within the meaning of Section 708 of the Internal Revenue Code (or any successor statute).
C. Each Limited agrees that he will not sell, exchange, transfer or assign any of his interest in the Partnership unless, if required by the Partnership, the Partnership has received an opinion of counsel, satisfactory to the Partnership, that such transfer or assignment may be effected without registration of the Limited's interest under the Securities Act of 1933 or under any applicable state securities law.
D. Except as otherwise expressly provided in this Agreement, the death or withdrawal of a Partner shall terminate (as of such date) all his interest in the Partnership and neither the estate of a deceased Partner nor any other third party shall become or have any rights as a Partner.
E. Any sale, exchange, assignment or other transfer in contravention of any of the provisions of this Section 7.1 shall be void and ineffectual and shall not bind or be recognized by the Partnership.
No Limited shall have a power to grant the right to become a substituted Limited to an assignee of any part of such Limited's Partnership Interest.
A. All Net Income, if any, of the Partnership for each calendar year shall be distributed in the following order of priority:
(i) Each Limited Partner shall be paid at least
annually (with respect to such Limited Partner's Capital
Contribution), from time to time, a total amount of cash equal to
the product of Net Income times a percentage, calculated annually,
which shall equal the product of the following three factors:
(a) one-fourth of one percent (.0025) multiplied by (b) the quotient
of $1,900,000 divided by the sum of the General Partners' Adjusted
Capital Contributions multiplied by (c) the quotient of the total
Capital Contribution of the respective Limited Partner divided by
$25,000. This calculation of percentage of participation shall be
made at the end of each calendar year and used in distributing
Net Income earned during the following year. Notwithstanding the
foregoing, for the year 1987 each Limited Partner shall be paid
(with respect to such Limited Partner's Capital Contribution) a
total amount of cash equal to the product of Net Income times a
percentage which shall equal the product of the following three
factors: (a) one-fourth of one percent (.0025) multiplied by
(b) the quotient of $1,900,000 divided by $24,251,182 multiplied
by (c) the quotient of the total Capital Contribution of the
respective Limited Partner divided by $25,000.
(ii) Each Class I Subordinated Limited Partner shall be paid within 30 days after the end of each calendar quarter (on a non-cumulative basis) an amount of cash equal to 25% of the product of (a) the one year Constant Maturity Treasury Rate as currently disclosed in the Federal Reserve Statistical Released H.15 (the "Treasury Rate") plus 150 basis points times (b) the current Capital Contribution of the Class I Subordinated Limited Partner. The applicable Treasury Bill Rate shall be the Treasury Bill Rate as stated for the week ended just prior to or on the last business day of the preceding calendar year; provided however that no such payment shall be made to any Class I Subordinated Limited Partner if for the prior calendar quarter the Partnership did not have Net Income sufficient to pay the full amount due all Class I Subordinated Limited Partners pursuant to this Section 8.1A(ii). If any payment is not made, as herein above provided, the Partnership shall never be required to make such missed payment in the future. No payment made pursuant to this Section 8.1A(ii) shall be considered a guaranteed payment.
(iii) Each Class II Subordinated Limited Partner shall be paid, from time to time, a total amount of cash in each year equal to the product of (a) the then remaining Net Income times (b) a percentage derived by the following formula: (x) 50% of the Capital Contribution of the Class II Subordinated
Limited Partner (excluding any undistributed Net Income allocated to the Class II Subordinated Limited Partner) divided by (y) the sum of (aa) 50% of the Capital Contributions of all the Class II Subordinated Limited Partners plus (bb) the Adjusted Capital Contributions of the General Partners (less any Net Income allocated to the General Partners which is not scheduled to be retained by the Partnership). In the event the Capital Contribution of a Class II Subordinated Limited Partner has been reduced by the operation of Section 8.1B hereof (the "Reduced Amount"), then each Class II Subordinated Limited Partner shall have right to make additional cash Capital Contributions to the Partnership from any cash to be distributed to such Class II Subordinated Limited Partner pursuant to this Section 8.1A(ii) up to the Reduced Amount.
(iv) There shall be set apart up to 8% of the remaining Net Income. Of such 8%, if any is set apart, there shall be distributed 62.5% thereof among the General Partners on the basis of individual merit as determined by the Managing Partner. Of such 8%, if any is set apart, there shall be distributed 37.5% thereof among the General Partners on the basis of individual need as determined by the Managing Partner.
(v) It is intended that a sum equal to 30% of the remaining Net Income will be retained by the Partnership as capital and shall be credited monthly to the Adjusted Capital Contributions of the General Partners in a proportion equal to their then respective General Partner Percentages. Such amount shall not be withdrawn by the General Partners. Notwithstanding the foregoing, the decision of whether to make this retention of capital in accordance with this Section or whether to vary the amount of capital to be retained in any given year, is vested in the Managing Partner, and it is agreed that his decision in this matter shall be final.
(vi) The balance of the Net Income remaining, if any, shall be distributed among the General Partners in proportions to their General Partner Percentages.
B. In any year in which there is a Net Loss and the Partnership is not dissolved and liquidated in accordance with Section 8.2 hereof, such Net Loss, on the books of the Partnership, shall be borne by the Class II Subordinated Limited Partners to the extent as set forth in the formula described in Section 8.1A(iii) hereof and the balance shall be borne by the General Partners in proportion to their respective General Partner Percentages. Any such Net Losses borne by the Class II Subordinated Limited Partners shall only be applied against and reduce their respective Capital Contributions. The total amount of all such Net Losses to be borne by the Class II Subordinated Limited Partners may never exceed the total amount of the Capital Contributions of the Class II Subordinated Limited Partners as shown on the books of the Partnership.
C. Notwithstanding the foregoing, where losses are caused by the willful neglect or default, the gross negligent conduct, or the intentional negligent conduct of any Partner, those losses shall be borne solely and made good by the Partner so causing the loss. This Section 8.1C is for the benefit of the Partners and no other person shall have any rights hereunder.
D. Notwithstanding any other provision of this Agreement to the contrary, the aggregate interest of the General Partners in each material item of Partnership income, gain, loss,
deduction, preference or credit shall be equal to at least one percent (1%) of each such item at all times during the existence of the Partnership.
A. Upon the dissolution of the Partnership as a result of the occurrence of any of the events set forth in Section 2.4 hereof, the Managing Partner shall proceed to liquidate the Partnership, and the proceeds of liquidation (the "Proceeds of Liquidation") shall be applied and distributed in the following order of priority:
(i) To the payment of debts and liabilities of the Partnership, including the expenses of liquidation, but expressly excluding all Capital Contributions of all Partners (General Partners, Class I Subordinated Limited Partners, Class II Subordinated Limited Partners and Limited Partners), the return of all of such Capital Contributions are provided for below and all of which is equity capital of the Partnership.
(ii) To the payment of any accrued but unpaid amounts due under
Section 8.1 hereof.
(iii) To the repayment of the Capital Contributions of the Limited Partners.
(iv) To the repayment of the Capital Contributions of the Class I Subordinated Limited Partners
(v) To the repayment of the Capital Contributions of the Class II Subordinated Limited Partners.
(vi) To the repayment of the General Partners' Adjusted Capital Contributions.
(vii) The balance of the Proceeds of Liquidation, if any, shall be distributed to the General Partners in proportion to their respective General Partner Percentages.
B. Notwithstanding the foregoing, in the event the Managing Partner shall determine that an immediate sale of part or all of the Partnership assets would cause undue loss to the Partners, the Managing Partner, in order to avoid such loss, may, after having given Notice to all the Limiteds, either defer liquidation of, and withhold from distribution for a reasonable time, any assets of the Partnership except those necessary to satisfy the Partnership debts and obligations, or distribute the assets to the Partners in kind.
C. Net Income generated by transactions in connection with the dissolution and liquidation of the Partnership shall be distributed in accordance with Section 8.1A hereof.
Notwithstanding the provisions of Section 8.1 or 8.2 hereof, in the event any tract of Real Estate or any Exchange Seat or Edward D. Jones & Co., L.P. or EDJ Leasing Co., L.P. is
sold, then there shall be distributed from the net proceeds of such sale (prior to making any distributions pursuant to the provisions of Section 8.1 or 8.2 hereof) to each General Partner an amount equal to his Frozen Appreciation Amount with respect to such tract of Real Estate or Exchange Seat. The balance of any proceeds resulting from any such sale shall then be distributed in accordance with Sections 8.1 or 8.2 hereof or shall otherwise be used or retained by the Partnership as provided herein.
A. In the event the Partnership shall sell or otherwise
dispose of, at one time, all, or substantially all, of its assets (a "Sale")
to any one Person or to any one Person and its Affiliates and the
Partnership is thereafter liquidated within 180 days, then the provisions of
Section 8.3 and this Section 8.4 shall be applicable with respect to the
order of priority of distribution of the Proceeds of Liquidation.
B. For the purposes of this Section 8.4 the term "substantially all" shall be deemed to mean assets of the Partnership or of any of its significant subsidiaries representing 80% or more of the net book value of all of the Partnership's assets (or such significant subsidiary's assets) determined as of the end of the most recently completed fiscal year.
C. Prior to making any payments to the General Partners pursuant to Section 8.2A(vii) hereof (but after making all other payments required by Section 8.2A and all payments required by Section 8.3 hereof) the Partnership shall distribute: (i) to the Limited Partners a percentage of the Premium (as hereinafter defined) equal to the same percentage of the Net Income of the Partnership which the Limited Partners shall receive (pursuant to Section 8.1A hereof) from the Partnership for the current fiscal year of the Partnership; and (ii) to the Class II Subordinated Limited Partners an amount equal to the product of the Premium (remaining after the payment required by Section 8.4C(i) hereof) times a fraction the numerator of which is the total Capital Contributions of the Class II Subordinated Limited Partners (on the date of the Sale) and the denominator of which is (X) the total Capital Contributions of the Class II Subordinated Limited Partners (on the date of the Sale) plus (Y) the total of the Adjusted Capital Contributions of the General Partners (on the date of the Sale). No payments shall be made or are intended to be made to Class I Subordinated Limited Partners pursuant to this Section 8.4C.
D. "Premium" means the Proceeds of Liquidation remaining
after the payment of the items set forth in Sections 8.2A(i), (ii), (iii),
(iv), (v) and (vi) hereof.
E. Any amounts payable to the Limited Partners and the Class II Subordinated Limited Partners pursuant to this Section 8.4 shall be disbursed pro-rata to the Limited Partners and the Class II Subordinated Limited Partners based on their Capital Contributions on the date of the Sale.
F. Neither the Partnership nor the General Partners shall have any obligation to cause a Sale to occur.
In the event the Partnership or any of its significant
subsidiaries, in a transaction (dealing with all or substantially all of the
business of the Partnership or such significant subsidiary) not covered by
Section 8.4 hereof (but similar in scope to such a transaction), sells
assets, merges or has a public offering, it is hereby stated that it is the
intention of the General Partners that the Limited Partners and the Class II
Subordinated Limited Partners shall share in any "profit" or "premium"
recognized from such transaction. Because it is impossible at this time to
foresee all possible factual situations that may occur with respect to a
given transaction, it is equally impossible to determine a fair, just and
equitable formula at this time to distribute a portion of such "profit" or
"premium" to the Limited Partners and the Class II Subordinated Limited
Partners. It is stated, however, at this time, as a matter of policy of the
Partnership that it is the intention of the General Partners to allow the
Limited Partners and the Class II Subordinated Limited Partners to share a
portion of such "profit" or "premium" (assuming any "profit" or "premium" is
also actually distributed to the General Partners) in a fair, just and
equitable manner in such amount, if any, as determined in the sole and
absolute discretion of the Managing Partner at the time of such transaction.
In making such determination of such amount, if any, the Managing Partner
shall not be bound by the formula set forth in Section 8.4 hereof. Neither
the Partnership nor the General Partners shall have any obligation, however,
to cause such transaction to occur and no Limited Partners and the Class II
Subordinated Limited Partners shall have any right to bring any cause of
action against the Partnership or its General Partners by reason of any
statement made in this Section 8.5. No payments shall be made or are
intended to be made to Class I Subordinated Limited Partners pursuant to
this Section 8.5.
A. Except as provided in Sections 8.6B, C or D hereof, all Profits And Losses For Tax Purposes of the Partnership shall be allocated as follows:
(i) In any calendar year in which the Partnership has a net profit for tax purposes, to the Partners with each Partner sharing therein in the proportion that Net Income distributed to the Partner and/or credited to the Adjusted Capital Contribution of the Partner bears to all Net Income of the Partnership for the calendar year.
(ii) In any calendar year in which the Partnership has a
net loss for tax purposes, first to the Class II Subordinated Limited
Partners with each Class II Subordinated Limited Partner bearing an
amount of loss to the extent set forth in the formula described in
Section 8.1A(ii) hereof; provided, however, that the total amount of
losses allocated to a Class II Subordinated Limited Partner shall not
reduce such Partner's Capital Account below zero (determined after
taking into account all prior or contemporaneous cash distributions
and all prior or contemporaneous allocations of income, gain, loss,
deduction or credit and as determined at the close of the taxable year
in respect of which such loss or deduction is to be allocated); and
any remaining losses shall be allocated to the General Partners in
proportion to their respective General Partner percentages.
B. The Managing Partner is authorized to allocate Profits
and Losses For Tax Purposes arising in any calendar year differently than
otherwise provided for in this Section 8.6 to the extent that the Managing
Partner determines, in his discretion, that such modifications are
appropriate to cause the allocations to comply with the principles of
Section 704 of the Internal Revenue Code and such modifications are in the
overall best interests of the Partners. Any allocation made pursuant to this
Section 8.6B shall be deemed to be a complete substitute for any allocation
otherwise provided for in this Article Eight and no amendment of this
Agreement or approval of any Partner shall be required.
C. Notwithstanding any other provisions of this Agreement to the contrary, if the amount of any Partnership Minimum Gain at the end of any taxable year is less than the amount of such Partnership Minimum Gain at the beginning of such taxable year, there shall be allocated to any Partner having a negative Capital Account at the end of such taxable year (determined after taking into account any adjustments, allocations and distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) gross income and gain (in respect of the current taxable year and any future taxable year) in an amount sufficient to eliminate such negative Capital Account in compliance with Treasury Regulations Section 1.704-1(b)(4)(iv)(e). Such allocation of gross income and gain shall be made prior to any other allocation of profits and losses for tax purposes. Any such allocation of gross income or gain pursuant to this Section 8.6C shall be in proportion with such negative Capital Accounts of the Partners and such allocations of gross income and gain shall be taken into account, to the extent feasible, in computing subsequent allocations of Profits and Losses For Tax Purposes of the Partnership so that the net amount of all items allocated pursuant to each Partner pursuant to this Article Eight shall, to the extent possible, be equal to the net amount that would have been allocated to each such Partner pursuant to the provisions of this Article Eight if the allocations made pursuant to the first sentence of this Section 8.6C had not occurred.
D. Notwithstanding any other provisions of this Agreement to
the contrary, except as provided in Section 8.6C hereof, if any Limited
Partner or Class I Subordinated Limited Partner or Class II Subordinated
Limited Partner receives any adjustment, allocations, or distributions
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6) that reduces such Partner's Capital Account below zero or increases the
negative balance in such Partner's Capital Account, gross income and gain
shall be allocated to such Partner in an amount and manner sufficient to
eliminate any negative balance in his Capital Account created by such
adjustments, allocations, or distributions as quickly as possible in
accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d). Any such
allocation of gross income or gain pursuant to this Section 8.6D shall be in
proportion with such negative Capital Accounts of such Partners. Any
allocations of items of gross income or gain pursuant to this Section 8.6D
shall (i) not duplicate any allocations of gross income or gain made
pursuant to Section 8.6C hereof, and (ii) be taken into account, to the
extent feasible, in computing subsequent allocations of Profits and Losses
For Tax Purposes of the Partnership, so that the net amount of all items
allocated to each Limited Partner, Class I Subordinated Limited Partner and
Class II Subordinated Limited Partner pursuant to this Article Eight shall,
to the extent possible, be equal to the net amount that would have been
allocated to each such Partner pursuant to the provisions of this Article
Eight if such adjustments, allocations or distributions had not occurred.
E. If and to the extent upon dissolution of the Partnership pursuant to Section 2.4 hereof the allocations under Section 8.6A are inconsistent with the following provision, then such allocations shall be adjusted to conform to the following provision: income and gain (whether ordinary income, gain under Section 1231 of the Internal Revenue Code, or capital gain) from disposition of all remaining Partnership assets shall be allocated among the Partners so that the positive balance of each Partner's Capital Account is equal to the cash to be distributed to such Partner pursuant to Article 8.2 determined after all Capital Accounts have been adjusted to reflect the allocations of Profits and Losses For Tax Purposes of the Partnership and cash distributions made pursuant to Section 8.1 hereof.
No General Partner shall be liable or accountable, directly or indirectly (including by way of indemnification, contribution, assessment or otherwise), for any debts, obligations or liabilities of, or chargeable to, the Partnership or each other, whether arising in tort, contract, or otherwise, which are created, incurred or assumed by the Partnership (or owing to creditors or Partners during liquidation of the Partnership) while the Partnership is a registered limited liability limited partnership.
A. Proper and complete records and books of account shall be kept (or caused to be kept) by the Managing Partner in which shall be entered all transactions and other matters relative to the Partnership's business. The Partnership's books and records shall be prepared in accordance with generally accepted accounting principles, consistently applied. The books and records shall at all times be maintained at the principal office of the Partnership and shall be open for examination and inspection by the Partners or by their duly authorized representatives during reasonable business hours. In particular, the following books and records shall be kept:
(i) a current list and a past list of the full name and last known mailing address of each Partner, specifying the General Partners and the Limited Partners, the Class I Subordinated Limited Partners and the Class II Subordinated Limited Partners, in alphabetical order, including the date of admission or withdrawal of each Partner. To the extent provided by the Missouri Limited Partnership Act, these lists shall be provided to the Secretary of State of Missouri, without cost, upon his written request;
(ii) a copy of the Certificate of Limited Partnership and all Certificates of Amendment thereto, together with executed copies of any Powers of Attorney pursuant to which any Certificate has been executed;
(iii) copies of the Partnership's federal, state and local income tax returns and reports, if any, for the three most recent fiscal years; and
(iv) copies of any written Partnership Agreements in effect and any financial statements of the Partnership for the three most recent years.
B. The Managing Partner shall have prepared at least annually, at the Partnership's expense, financial statements (balance sheet, statement of income or loss, partners' equity, and changes in financial position) prepared in accordance with generally accepted accounting principles which shall fairly reflect the Partnership's financial position at the date shown and its results of operations for the period indicated. Copies of such statements and report shall be made available to the Partners annually.
C. The Managing Partner shall have prepared at least annually, at the Partnership's expense, a report containing Partnership information necessary in the preparation of the Partners' federal income tax returns. Copies of such report shall be distributed to each Partner as promptly as possible.
The bank accounts of the Partnership shall be maintained in such banking institutions as the Managing Partner shall determine, and withdrawals shall be made only in the regular course of Partnership business on such signature or signatures as the Managing Partner may determine.
A. All elections required or permitted to be made by the Partnership under the Internal Revenue Code shall be made by the Managing Partner.
B. Notwithstanding anything to the contrary in this
Section 9.3, the Managing Partner shall not be responsible for initiating
any change in accounting methods from the methods initially chosen.
C. The Managing Partner is hereby designated as the "Tax Matters Partner" under Section 6231(a)(7) of the Internal Revenue Code.
The fiscal year of the Partnership shall be the calendar year for tax purposes.
THIS AGREEMENT CONTAINS THE FOLLOWING
BINDING ARBITRATION PROVISIONS WHICH MAY BE ENFORCED
BY THE PARTNERSHIP AND THE PARTNERS
B. If any Party has a Dispute with any other Party, then (if discussions among the Parties have failed) such Party and the other Party may have the Dispute mediated by one person chosen by agreement of such Parties. The mediator, after consultation with the Parties, will determine the mediation procedures to be followed. The fees and expenses of the mediator shall be paid by the Partnership. If no mutual agreement can be reached to mediate or upon the identity of the mediator, then the Dispute will be settled by binding arbitration under the procedures set forth below.
C. All Disputes that cannot be resolved by mediation will be settled by binding arbitration under the procedures set forth below.
D. Any Party may, if mediation has failed to resolve the Dispute (or if the Parties fail to agree on a mediator), commence arbitration by written notice to the other Party. Thereafter, arbitration shall be conducted in the manner described in Section 10.1F.
E. Except as provided in Section 10.1B arbitration, under the Arbitration Code of the National Association of Securities Dealers, Inc. (the "NASD"), shall be the exclusive remedy for any Dispute. Any Party may apply to the Exclusive Venues (as defined in Section 10.2) for injunctive, specific enforcement or other relief in aid of the arbitration proceedings or to enforce judgment of the award in such arbitration proceeding, but not otherwise. Any award issued by the arbitrators pursuant to these provisions may be entered and enforced in the Exclusive Venues and any other appropriate jurisdiction.
F. The Parties agree among themselves that the arbitration proceedings shall be conducted as follows:
(i) All proceedings conducted shall be deemed private and confidential and shall not be disclosed to the public by either the arbitrators or the Parties to the arbitration. The Parties acknowledge that the Partnership's administrative offices and the books and records (including accounting data) of the Partnership are all located in the St. Louis, Missouri metropolitan area, and, accordingly, the Parties agree to request that the arbitration proceedings and hearings shall be held in the St. Louis, Missouri metropolitan area (unless otherwise agreed by the Parties or decided by the arbitrators).
(ii) The exclusive award for any Dispute shall be recovery of compensatory damages (that is, damages which compensate a party for actual damages suffered), and each Partner hereby waives any and all other forms of damages including multiple, punitive or exemplary damages, damages for emotional distress, mental anguish or suffering and consequential damages.
(iii) The applicable substantive law of Missouri or the United States (notwithstanding that a Party to a Dispute may be a resident of another state or country), as the case may be, shall be used in rendering any award. Such award shall be final and binding on all Parties and may be entered as a judgment, under seal, and enforced in the appropriate jurisdiction.
If any court or tribunal of competent jurisdiction shall refuse to enforce Section 10.1 or determine a matter is not a Dispute, then, and only then, shall the alternative provisions of this Section 10.2 be applicable. The Partners acknowledge that the Partnership's administrative offices and the books and records (including accounting data) of the Partnership are all located in the St. Louis, Missouri metropolitan area and, accordingly, the Partners agree that it would be more convenient for, and in the best mutual joint interest of, the Partners and the
Partnership that, in the event of a Dispute, venue for litigation shall be laid exclusively in the Circuit Court of the County of St. Louis, Missouri or in the United States District Court for the Eastern District of Missouri. Such Circuit Court and United States District Court are together referred to as the "Exclusive Venues" for litigation. The Partnership and each Partner agree not to institute any litigation except in the Exclusive Venues and further agree that specific enforcement of this covenant with respect to Exclusive Venues may be awarded to the Partnership and each Partner by means of all available legal or equitable remedies, including, without limitation, a temporary restraining order. The Partnership and each Partner hereby submit to the personal jurisdiction of the Exclusive Venues and waive any requirement for setting bond for a temporary restraining order. The Firm and each Partner hereby waive any right it or such Partner may have to a jury trial in any litigation brought in accordance with this Agreement.
The statute of limitations of the State of Missouri applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except no defenses shall be available based upon the passage of time during any mediation conducted pursuant to this Article Ten.
Notwithstanding anything to the contrary contained in any other document or agreement requiring arbitration, including, but not limited to, Form U-4, signed by any Party, the Parties agree that if the matter in controversy is, in whole or in part, a Dispute, then the provisions of this Article shall control such arbitration.
A. Each Partner, by the execution hereof, hereby irrevocably constitutes and appoints John W. Bachmann, Lawrence R. Sobol, and the then Managing Partner (at any time the Managing Partner is not John W. Bachmann), his true and lawful attorney-in-fact, and each of them, with full power and authority in his name, place and stead, to execute or acknowledge (on behalf of such Partner and/or the Partnership) under oath, deliver, file and record at the appropriate public offices such documents as may be necessary or appropriate to carry out the provisions of this Agreement including:
(i) All certificates and other instruments (including this Agreement or any certificate of limited partnership or certificate of limited liability partnership and any amendment thereof) which the Managing Partner deems appropriate to qualify or continue the Partnership as a registered limited liability limited partnership under the Missouri Limited Partnership Act and the Missouri Partnership Act (or a partnership in
which the Partners will have limited liability comparable to that provided by the Missouri Limited Partnership Act and the Missouri Partnership Act) or under the laws of any other jurisdiction in which the Partnership may conduct business;
(ii) All amendments to this Agreement or any certificate of limited partnership or any certificate of limited liability partnership which are required to be filed or which the Managing Partner deems to be advisable to file;
(iii) All instruments which the Managing Partner deems appropriate to reflect a change or modification of the Partnership in accordance with the terms of this Agreement;
(iv) All conveyances and other instruments which the Managing Partner deems appropriate to reflect the dissolution and termination of the Partnership; and
(v) All other instruments, documents or contracts (including, without limiting the foregoing, any deed, lease, mortgage, note, bill of sale, contract, trust agreement, guarantee, partnership agreement, indenture, underwriting agreement or any instrument or documentation which may be required to be filed (or which the Managing Partner deems advisable to file) by the Partnership under the laws of any state or by any governmental agency) requisite to carrying out the intent and purpose of this Agreement and the business of the Partnership and its Affiliates.
B. The appointment by all Limited Partners of John W. Bachmann, Lawrence R. Sobol, and the then Managing Partner (at any time the Managing Partner is not John W. Bachmann), as attorney-in-fact, and each of them, shall be deemed to be a power coupled with an interest in recognition of the fact that each of the Partners under this Agreement will be relying upon the power of John W. Bachmann, Lawrence R. Sobol, and the then Managing Partner (at any time the Managing Partner is not John W. Bachmann), and each of them, to act as contemplated by this Agreement in any filing and other action by them on behalf of the Partnership. The foregoing power of attorney shall survive the death, disability or incompetency of a Partner or the assignment by any Partner of the whole or any part of its interest hereunder.
The covenants and agreements contained herein shall be binding upon, and inure to the benefit of the heirs, executors, administrators, successors and assigns of the respective parties hereto.
This Agreement shall be construed and enforced in accordance with the laws of the State of Missouri.
This Agreement may be executed in several counterparts, all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties have not signed the same counterpart, except that no counterpart shall be binding unless signed by the Managing Partner.
This Agreement contains the entire agreement between the parties and supersedes all prior writings or representations.
Each provision of this Agreement shall be considered separable and if for any reason any provision or provisions hereby are determined to be invalid or unenforceable such validity or unenforceability shall not impair the operation of or affect any other portion of this Agreement and this Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted.
Each person who becomes a Limited hereunder does hereby represent and warrant by the signing of a counterpart of this Agreement or an amendment to this Agreement that the Partnership interest acquired by him was acquired for his own account, for investment only, not for the interest of any other person and not for resale to other persons or for further distribution. The Managing Partner has not made and hereby makes no warranties or representations other than those specifically set forth in this Agreement.
Paragraph titles are for descriptive purposes only and shall not control or alter the meaning of this Agreement as set forth in the text.
The Partners agree that the Partnership's assets are not and will not be suitable for partition. Accordingly, each of the Partners hereby irrevocably waives any and all right he may have to maintain any action for partition of any of the Partnership's assets.
This Agreement is made solely and specifically for the benefit of the Partners and their respective successors and permitted assigns, and no other person whatsoever shall have any rights, interests or claims hereunder or be entitled to any benefits hereunder or on account of this Agreement as a third party beneficiary or otherwise.
In addition to the amendments otherwise authorized herein, this Agreement may be amended, from time to time, without the consent or approval of (and without prior notice to) any Limited, by the Managing Partner or by the affirmative vote of General Partners holding an aggregate of at least a majority of the total General Partner Percentages. In particular, but without limiting the foregoing, the interests of the Limited Partners and the Class II Subordinated Limited Partners in the Net Income or the Proceeds of Liquidation of the Partnership or in any other allocation or distribution to be received by them from the Partnership pursuant to Article Eight hereof or otherwise may be reduced or increased or otherwise modified in accordance with this Section 11.12 without the consent or approval of (and without prior notice to) any Limited.
Notwithstanding anything to the contrary herein contained, it is recognized that certain of the Partners are not persons but are revocable trusts ("Trusts"), the grantors of which ("Grantors"), except for the transfer of their partnership interests to (or the designation of) such Trusts created by them, would be the Partners. Thus, when used herein the phrases "General Partner", "Limited Partner", "Limited", "Partner", "Class I Subordinated Limited Partner" or "Class II Subordinated Limited Partner" shall be deemed, when the context hereof so requires (such as, without limiting the generality of the foregoing, death, disability or withdrawal of a Partner, gross negligent conduct of a General Partner, a General Partner receiving a guaranteed draw for services rendered, General Partner required submission of tax returns, sale by a General Partner of Retiring Interests after his 56th birthday) to be a reference to the Grantor of such Trust. In addition, to the extent that any General Partner has obligations or liabilities imposed upon such General Partner pursuant to this Agreement, then, if such General Partner is a Trust, such General Partner, by such General Partner's signature hereto (and the Grantor of such Trust by such Grantor's signature hereto), hereby agrees that said obligations and liabilities are also obligations and liabilities of such Grantor.
IN WITNESS WHEREOF, the undersigned has executed this Twelfth Amended and Restated Agreement of Registered Limited Liability Limited Partnership effective as of the day and year first above written.
THIS AGREEMENT CONTAINS THE FOLLOWING
BINDING ARBITRATION PROVISIONS WHICH MAY BE ENFORCED
BY THE PARTNERSHIP AND THE PARTNERS
GENERAL PARTNER:
GENERAL PARTNERS AS SHOWN IN
THE BOOKS AND RECORDS OF THE
PARTNERSHIP*
LIMITED PARTNERS AS SHOWN IN THE
BOOKS AND RECORDS OF THE PARTNERSHIP*
CLASS II SUBORDINATED LIMITED PARTNERS
AS SHOWN IN THE BOOKS AND RECORDS OF
THE PARTNERSHIP*
Attorney-In-Fact
Note: At the time of the signing of this Agreement there are no Class I Subordinated Limited Partners.
LEASE
BETWEEN
ECKELKAMP OFFICE CENTER SOUTH, L.L.C.,
A MISSOURI LIMITED LIABILITY COMPANY,
AS LANDLORD
AND
EDWARD D. JONES & CO., L.P.,
A MISSOURI LIMITED PARTNERSHIP,
AS TENANT
(BUILDING III)
(LOT 1)
LEASE
THIS LEASE AGREEMENT (the "Lease") is made and entered into on the 3rd day of February, 2000, between Eckelkamp Office Center South, L.L.C., a Missouri limited liability company ("Landlord"), and Edward D. Jones & Co., L.P., a Missouri limited partnership ("Tenant").
1. DEFINITIONS.
1.3. "ADA" shall mean the Americans with Disabilities Act.
1.6. "Adjacent Property" shall mean Lot II and Lot III of the Office Center.
1.7. "Adjacent Property Owner" shall mean the owner or owners from time to time of the Adjacent Property.
1.9. "Approved Subcontractors" shall be as defined in Paragraph 6(a) of Exhibit A attached hereto and incorporated herein.
-------------- ---------
1.10. "Arbitration" shall be as defined under Section 47
----------
hereof.
1.11. "Architect" shall be as defined in Paragraph 6(a)
--------------
|
1.14. "Building" or "Building III" shall mean the office building to be constructed as Building III on Lot I of the Office Center, which is calculated to contain 218,057 RSF and to contain 228,000 construction gross square feet.
1.15. "Building I" shall mean that certain office building located on the Adjacent Property known as Building I.
1.16. "Building II" shall mean that certain office building located on the Adjacent Property known as Building II.
1.18. "Building Grade" shall mean the type, brand and/or quality of materials Landlord designates from time to time to be the minimum quality to be used in the Building or the exclusive type, grade or quality of material to be used in the Building.
1.22. "Construction Period" shall mean that period beginning on the date of execution of this Lease and continuing through 11:59 p.m. on the day immediately prior to the Commencement Date.
1.27. "CPI Index" shall mean the Consumer Price Index for All Urban Consumers, as revised for U.S. City Average, issued by the Bureau of Labor Statistics of the United States Department of Labor or any successor agency, or any other measure hereafter employed by that Bureau or any successor agency in lieu of such CPI Index that measures the cost of living in the United States. If the CPI Index is hereafter converted to a different standard reference base or otherwise revised, the determination of the percentage increase shall be made either with the use of such conversion factor, formula or table converting the CPI Index as may be published by the Bureau or any successor agency, or if no such conversion factor, formula or table is published, then by using such other index as is then generally recognized and accepted for similar determinations of purchasing power in Landlord's reasonable discretion.
1.28. "Cybertel" shall mean Cybertel Cellular Telephone Company, a Missouri partnership.
1.29. "Cybertel Lease" shall mean that certain Lease dated November 30, 1990, executed by Cybertel and Manchester 270 Partnership, as amended by First Amendment to Lease Agreement dated as of July 15, 1996, Second Amendment to Lease Agreement dated as of January 15, 2000 and as it may be later amended.
1.31. "Delay Expenses" shall mean any excess construction period interest, loan related costs, delay in the payment of any Rent, Taxes, additional insurance premiums, utilities, similar costs or other Operating Expenses.
1.37. "Excusable Construction Delay" shall mean any delay in the then current Construction Schedule for the Premises as a result of Force Majeure, changes in Core and Shell Plans or Tenant Work Plans requested by the Tenant which results in a delay of the construction of the Premises, or any act or omission of the Tenant which results in a delay in the construction of the Premises.
1.38. "Execution Date" shall be the date by which both
(a) this Lease has been executed by the Tenant and the Landlord and (b) a
copy signed by the Tenant has been received by the Landlord.
1.47. "Initial Term" shall mean a term of at least twenty (20) years, but less than two hundred forty-one (241) months, beginning on the Commencement Date and ending on the last day of the month in which the twentieth anniversary of the day before the Commencement Date occurs.
1.55. "Lease Year" shall mean a consecutive period of twelve (12) months provided the first Lease Year shall begin on the Commencement Date and end on the last day of the twelfth (12th) full calendar month following thereafter and each subsequent Lease Year shall be twelve (12) full calendar months.
1.57. "Lender" shall mean the holder of any mortgage or deed of trust lien upon the Premises from time to time.
1.62. "Management Fee" shall mean the following sums:
Lease Years 1-5 $ .75 per RSF of the Building Lease Years 6-10 $ .83 per RSF of the Building Lease Years 11-15 $ .93 per RSF of the Building Lease Years 16-20 $1.02 per RSF of the Building Lease Years 21-25 $1.12 per RSF of the Building Lease Years 26-30 $1.23 per RSF of the Building Lease Years 31-35 $1.35 per RSF of the Building |
1.63. "Monetary Default" shall mean an Event of Default by the Tenant hereunder resulting from the failure to pay Rent which has been outstanding for a period of thirty (30) days or more.
1.72. "Plan Modifications" shall be as defined in Paragraph 1(b) of Exhibit A, attached hereto and incorporated herein.
-------------- ---------
1.73. "Position Paper" shall be as defined in Section 47.5
------------
hereof.
1.74. "Premises" shall mean Lot I and the improvements
|
to be constructed on Lot I pursuant to this Lease, including the Parking Garage and surface parking provided for in the Core and Shell Plans.
1.75. "Prime Rate" shall mean the from time to time publicly announced prime rate of interest of Bank of America (or any successor bank).
1.78. "RSF" shall mean a rentable square foot of the Building as calculated using the definition of ANSI/BOMA Z65.1-1996, STANDARD METHOD FOR MEASURING FLOOR AREA IN OFFICE BUILDINGS, dated: June 7, 1996 and published by the Building Owners and Managers Association International (BOMA), 1201 New York Avenue, N.W., Suite 300, Washington, D.C. 20005.
1.82. "Substantially Completed" or "Substantial Completion" shall mean the date upon which the Tenant Architect and the Architect have confirmed in writing to the Landlord and Tenant that the Premises are "substantially completed," as such phrase is defined
under AIA Form 704 prepared by the American Institute of Architects, in accordance with the Tenant Work Plans and the Core and Shell Plans.
1.83. "Substantial Completion Date" shall mean December 31, 2001.
1.92. "Term" shall mean the Initial Term and any Option Term which may be exercised by Tenant pursuant to this Lease.
2. LEASE TERM AND TENANT OPTION ALLOWANCES.
2.1. The Landlord hereby leases to the Tenant the Premises subject to the terms, conditions and covenants of this Lease, and the Tenant hereby accepts the leasing of the Premises subject to the terms, conditions and covenants of this Lease. This Lease shall continue in force during a period beginning on the date hereof and continuing until the expiration of the Initial Term, unless this Lease is sooner terminated or extended to a later date under an Option Term or under any other term or provision of this Lease.
2.2. (a) The Landlord shall use good faith efforts to deliver initial occupancy of the Premises to the Tenant on or before the Substantial Completion Date pursuant to the Work Letter, subject to Excusable Construction Delays.
(b) If the completion of all or any portion of the Premises is delayed due to the failure of Tenant to comply with its obligations hereunder, all obligations of the Tenant under this Lease shall commence, including, without limitation, the obligation to pay Rent at the time the Premises would have been completed, but for Tenant's failure, but in no event earlier than the Substantial Completion Date. If the Tenant's failure results in a delay in Substantial Completion of the Premises, the Commencement Date shall be the date the Commencement Date would have occurred, but for Tenant's failure hereunder, but in no event earlier than the Substantial Completion Date.
2.3. (a) If, however, the Premises are not Substantially Completed (for reasons other than an Excusable Construction Delay) by the Substantial Completion Date, then as Tenant's sole remedy for the delay in Tenant's occupancy of the Premises:
(i) The Commencement Date shall be delayed;
(ii) Rent hereunder shall not commence until Substantial Completion of the Premises; and
(iii) The Landlord shall pay to Tenant an
amount equal to Five Thousand and 00/100 Dollars
($5,000.00) for each of the first thirty (30) days
that the Commencement Date is delayed, beyond
January 31, 2002 and Ten Thousand and 00/100 Dollars
($10,000.00) for each day of the second thirty (30)
days thereafter that the Commencement Date is
delayed, but in no event shall such payments exceed
Four Hundred Fifty Thousand and 00/100 Dollars
($450,000.00) ("Late Delivery Payment"). The Late
Delivery Payment shall be paid upon the
Commencement Date. In the event of an Excusable
Construction Delay, the number of days between
January 31, 2002 and the Commencement Date used in
calculating the Late Delivery Payment shall be
reduced by the number of days of Excusable
Construction Delay. The amount of such Late Delivery
Payment has been determined by Landlord and Tenant
to be reasonable and adequate to compensate Tenant
for Landlord's failure to deliver possession of the
Premises on the date so provided herein, and shall
not be construed as a penalty, it being impossible
to ascertain exactly the damages which such
failure to deliver may entail.
(b) In the event that the Substantial Completion Date has not occurred prior to December 31, 2002, the Tenant may, at any time thereafter (prior to the Substantial Completion Date occurring), terminate this Lease by written notice to the Landlord.
2.4. There shall be no other remedies against or to Landlord for failure to complete the Premises or deliver possession thereof prior to the Substantial Completion Date. In the event of any Excusable Construction Delay, the Substantial Completion Date shall be automatically extended by the number of days of such Excusable Construction Delay.
2.5. The Landlord shall take reasonable efforts to permit the Tenant to have the right and privilege to enter onto the Premises to complete interior decoration work (i.e. the installation of fixtures, furniture and equipment that is not included within the Tenant Work) and prepare the Premises for occupancy ("Advance Occupancy"), subject to the following terms and conditions:
(a) Tenant's Advance Occupancy shall not in any way interfere with or delay the completion of construction of the Core and Shell or the Tenant Work;
(b) The Tenant and all contractors employed by the Tenant shall comply with all rules and regulations promulgated by the Landlord and the Contractor;
(c) The Tenant and all of its contractors shall maintain and provide evidence to the Landlord of liability insurance in form and amount acceptable to the Landlord;
(d) If any of the Tenant's contractors use non-union employees and such employees create any work stoppage or other disruption of construction of the Premises by the Landlord, the Tenant shall immediately terminate the use of such contractor;
(e) The Tenant shall be responsible for any additional security costs and any costs of clean-up of trash or rubbish as a result of the Advance Occupancy. In the event that Advance Occupancy results in any delay of the Commencement Date, the Tenant shall indemnify and hold the Landlord harmless from any and all Delay Expenses incurred by the Landlord or the Contractor;
(f) The Landlord shall have no responsibility or liability whatsoever for any loss or damage to any of Tenant's leasehold improvements, fixtures, equipment or any other materials installed or left within the Premises, except as a result of the Landlord's gross negligence or willful misconduct;
(g) Except as expressly provided herein, no Rent shall be payable or accrue to the Landlord during the period of Tenant's Advance Occupancy; and
2.6. (a) So long as no Monetary Default is outstanding, Tenant shall have three (3) options of five (5) years each to extend the then effective Term of this Lease ("Option Terms") upon written notice to Landlord as provided below. The terms and provisions of this Lease shall apply to any such Option Term.
(b) Landlord agrees to give the Tenant eighteen
(18) months prior written notice of the expiration of the Initial Term and
each of the first two Option Terms that such Term ("Option Notice") shall
expire within eighteen (18) months, unless the Tenant exercises its Option
Term (and, in the case of the Initial Term, its option to purchase the
Premises under the Building III Option) upon the later of:
(i) six (6) months after receipt of the Option Notice; or
(ii) the first day of the last Lease Year.
(c) If the Landlord fails to provide an Option Notice to the Tenant at least eighteen (18) months prior to the expiration of the then current Term:
(i) the Tenant's six (6) month period within which to exercise the next Option Term (and the Purchase Option during the Initial Term) shall be extended to the date which is six (6) months from the date of receipt of the Option Notice; and
(ii) If the Tenant responds to the Option Notice by written notice to the Landlord declining to exercise the Purchase Option and declining to exercise an Option Term ("Declining Response") on a date upon which there are less than twelve (12) months remaining on the then current Term, such Term shall be extended to a date twelve (12) months from the date of the Declining Response.
(d) In the event that the Landlord has failed to provide an Option Notice to the Tenant during the period from the date eighteen (18) months from the end of the then current Term through the date which is six (6) months from the end of the then current Term, the Tenant may, during such period, terminate this Lease by written notice to the Landlord with such termination to be effective upon the end of such current Term.
(e) In the event that the Landlord has failed to provide an Option Notice to the Tenant as of the date six (6) months before the end of the current Term, at any time thereafter prior to the receipt of an Option Notice, the Tenant may terminate this Lease by written notice to the Landlord specifying a termination date which is six (6) months from the date of such notice.
2.7. In the event that the Tenant exercises any of the Option Terms, the Landlord shall provide to the Tenant the following tenant improvement allowances ("Option TI Allowances"). The Option TI Allowances shall be in the following amounts for each option period:
$5.00 per RSF of the Building for the First Option Term $5.50 per RSF of the Building for the Second Option Term $6.05 per RSF of the Building for the Third Option Term
(a) The Option TI Allowances shall be paid by the Landlord to the Tenant so long as the following conditions are satisfied:
(i) There is no outstanding Event of Default hereunder;
(ii) Tenant shall provide to the Landlord a cost breakdown for Option TI Allowances improvements ("Option TI Improvements");
(iv) The Tenant shall submit to the Landlord copies of paid receipts and mechanics lien waivers from all contractors and subcontractors for work previously paid for in conjunction with any request for reimbursement by the Tenant sent to the Landlord; and
(v) The Tenant shall provide for a certificate from the Tenant Architect confirming that the work for which payment is requested has been completed.
3. RENT.
3.1. Tenant shall, commencing on the Commencement Date, pay to Landlord as Base Rent, in legal tender, at Landlord's office at 200 West Main Street, P.O. Box 269, Washington, Missouri 63090, or as directed from time to time by Landlord's notice, the annual sum specified below, payable in the equal monthly payments specified below (subject to adjustment upon final determination of RSF) on the first day of every calendar month of the Term, without demand, the same being hereby waived, and without any set-off or deduction whatsoever. Notwithstanding the above, in the event the Commencement Date occurs on a date other than the first day of the calendar month, the Tenant shall make a Rent payment on the Commencement Date prorated from the Commencement Date through the end of the calendar month.
Annually: Lease Years 1-5 $21.25 per RSF of the Building Lease Years 6-10 $23.38 per RSF of the Building Lease Years 11-15 $25.72 per RSF of the Building Lease Years 16-20 $28.29 per RSF of the Building Lease Years 21-25 $31.12 per RSF of the Building Lease Years 26-30 $34.23 per RSF of the Building Lease Years 31-35 $37.65 per RSF of the Building Annually: Lease Years 1-5 $4,633,711.25 Lease Years 6-10 $5,098,172.66 Lease Years 11-15 $5,608,426.04 Lease Years 16-20 $6,168,832.53 Lease Years 21-25 $6,785,933.84 Lease Years 26-30 $7,464,091.11 Lease Years 31-35 $8,209,846.05 Monthly: Lease Years 1-5 $386,142.60 Lease Years 6-10 $424,847.72 Lease Years 11-15 $467,368.84 Lease Years 16-20 $514,069.38 Lease Years 21-25 $565,494.49 Lease Years 26-30 $622,007.59 Lease Years 31-35 $684,153.84 |
The foregoing payments are based on the Building containing 218,057 RSF.
Tenant shall pay a per diem charge calculated at the rate of one and one-half percent (1 1/2%) per month (with interest beginning to accrue as of the sixth (6th) day of the month) of any overdue Rent payment not made by the fifth (5th) day of the calendar month until such overdue Rent is paid in full. In the event any installment of Rent is paid more than five (5) days after the date due, the Tenant shall pay the Landlord a late charge of two and one-half percent (2 1/2%) of the delinquent installment ("Late Charge"). Notwithstanding the above, the two and one-half percent (2 1/2%) Late Charge shall be waived by the Landlord for the first delinquent Rent payment made in any twelve (12) month period, provided the Tenant makes such delinquent payment within five (5) days after receipt of written notice from the Landlord of such delinquency. In the event any subsequent Rent payment is not made by the fifth (5th) day of the calendar month within twelve (12) months after a prior delinquent payment, the two and one-half percent (2 1/2%) Late Charge shall apply with or without notice from the Landlord. Provided, further, in the event of any delinquent Rent payment, the one and one-half percent (1 1/2%) per month interest shall not begin to accrue until the date upon which a Late Charge has become due and payable.
3.2. Within thirty (30) days following the Commencement Date, the RSF shall be calculated by the Architect and certified to the Tenant and Tenant Architect. If the Tenant Architect disagrees with such calculation, within fifteen (15) days after receipt of such calculation, the Tenant shall notify the Landlord and the parties shall work together in order to promptly resolve any differences concerning RSF. In the event that the parties finally conclude that RSF is either greater or less than 218,057 RSF, the annual and monthly Base Rent shall be adjusted and any overpayments or underpayments prior to the date of such calculation shall be adjusted equitably by the parties. Until such time as the parties have concluded that the RSF for the Building is greater or less than 218,057, Base Rent shall be payable assuming that the RSF is 218,057.
3.3. The parties agree that prior to the construction of the Building, the Core and Shell Plans indicate that the Building shall contain not less than 218,057 RSF. In the event that in designing the Tenant Work, the Tenant Work results in a reduction of the RSF of the Building, utilizing the BOMA standards for such items, as a result of changes to such items as interior stairwells, vertical ventilation of the cafeteria and similar items, the final calculation of the RSF of the Building shall ignore any reductions resulting from the Tenant Work.
4. OPERATING EXPENSES.
4.1. For the purposes of this Section, the following definitions and provisions apply:
(i) Any amounts incurred for labor, materials or services that are not employed or used in the performance of Landlord's obligations hereunder;
(ii) Any cost or expense for which the Landlord is reimbursed by a third party;
(iv) Costs or expenses resulting from the Landlord's negligence or breach of its obligations under this Lease;
(v) Interest, principal payments and other costs of any indebtedness encumbering the Premises;
(vi) Legal fees, architectural fees, engineering fees, real estate commissions and marketing and advertising expenses incurred in connection with the development, leasing, design and construction of the Core and Shell, and Tenant Work. To the extent the Tenant is obligated to reimburse the Landlord for such items under this Lease, such reimbursement shall not be deemed to be Operating Expenses;
(vii) Costs of selling, syndicating, financing, mortgaging or hypothecating any of Landlord's interest in the Premises;
(viii) Wages of employees who do not devote the majority of their time to the performance of the Landlord's obligations hereunder;
provided, however, the costs associated with such employees who do not devote the majority of their time to the Landlord's obligations hereunder may be prorated and an equitable amount shall be included as an Operating Expense to the extent such employees devote their time to the performance of the Landlord's obligations hereunder;
(ix) The cost of utility installation and tap-in charges;
(x) Any cost or expense arising from or relating to Hazardous Materials existing in, on or under the Premises prior to the Commencement Date or at any time introduced to the Premises by an act or omission of the Landlord;
(xi) Any cost or expense to the extent that such cost or expense exceeds the prevailing market rate for such product or service; and
(xii) Any fee or mark-up of an Operating Expense for overhead or administrative costs (it being understood that such services are included in the payment of the Management Fee).
(b) "Expense Statement" means a statement from the Landlord setting forth the Operating Expenses for the prior calendar year.
(c) The Landlord agrees that during the Term, it will take diligent efforts (including pursuing litigation if it is prudent to do so) to require the Contractor or all subcontractors to undertake any repairs, maintenance or replacements covered by warranties obtained during the construction for the Core and Shell and Tenant Work and to the extent Landlord is able to do so, the costs thereof shall not be deemed to be Operating Expenses. In the event that the Landlord brings litigation to pursue any warranty claims for the Core and Shell or Tenant Work, all attorneys' fees and expenses incurred by the Landlord shall be paid for by the Landlord and shall not be Operating Expenses hereunder. Recovery of any funds by the Landlord (other than any portion of a judgment specifically designated as attorneys fees), either in settlement of a claim or as a result of obtaining a judgment against any party providing a warranty, will be credited to the Tenant against future Operating Expenses promptly after the recovery.
4.2. Prior to the Commencement Date, for the period from the Commencement Date through the first December 31 ("Initial Period") of the Term hereof, and on or before November 1 of each subsequent calendar year, Landlord shall deliver to Tenant an estimate of Operating Expenses for such upcoming calendar year, based in part on the Expense Statement for the prior calendar year. Tenant shall have the right to review and approve such estimate, such approval not to be unreasonably withheld, conditioned or delayed. Beginning on the Commencement Date and on January 1 of each subsequent calendar year, Tenant shall pay to Landlord by the first day of each month such estimated amount as amortized over the number of
months in such Initial Period or the calendar year (or portion thereof during the last calendar year of the Term).
4.3. If Tenant's obligations for Operating Expenses for a prior calendar year as shown on the Expense Statement is greater than the estimated payments made by the Tenant for that year, then within thirty (30) days following receipt by Tenant of the Expense Statement, Tenant shall pay in full an amount equal to such excess. If Tenant's obligations for Operating Expenses are less than the estimated payments made by Tenant for that year, then Tenant shall receive a cash refund in the amount of such overpayment.
4.4. Landlord may, but only in the month of June each year, send to Tenant a revised estimate of Operating Expenses to be incurred for the then current calendar year, which shall be subject to Tenant's approval, such approval not to be unreasonably withheld, conditioned or delayed. Upon receipt of such revised estimate of Operating Expenses, the amount thereof shall be divided into twelve (12) equal monthly installments, and Tenant shall pay Landlord, at the same time that the next regular monthly Rent payment is due, the sum necessary to bring the Tenant current for the then current calendar year. Subsequent installments shall be payable at the adjusted rate together with the regular Base Rent payments for the balance of such calendar year and shall continue until further adjusted based on the estimate for Operating Expenses for the next year.
4.5. If this Lease terminates before the end of a calendar year, payment of Operating Expenses by the Tenant will be based on the portion of the year prior to the termination of the Term.
4.6. Tenant (or its designated agent), at its expense, shall have the right each calendar year, following prior written notice to Landlord, to audit Landlord's books and records relating to Operating Expenses in St. Louis, Missouri, within twelve (12) months after receipt of the Expense Statement. In the event Operating Expenses for any calendar year are incorrect, appropriate adjustments shall be made promptly by the parties. If such adjustment results in the Landlord reimbursing the Tenant for more than two percent (2%) of the year's Operating Expenses, the Landlord shall pay the reasonable costs of such audit.
4.7. (a) Notwithstanding the above, the payment of Taxes, utilities and insurance premiums for the Premises shall not be included within Operating Expenses nor included in the regular monthly estimated payments of Operating Expenses to be paid by the Tenant. Bills for Taxes, insurance premiums and utilities for the Premises shall be sent to the Tenant at the following address:
Edward D. Jones & Co., L.P.
201 Progress Parkway
Maryland Heights, Missouri 63043-3042
Attention: Wendy L. Monso
The bills for the Taxes shall be paid by the Tenant to the taxing authority on or before December 15 of each calendar year based on tax bills forwarded to the Tenant by the Landlord. In the event that the Landlord does not deliver the bills for the Taxes on or before December 1 of each year, the Tenant agrees that it shall pay such Tax bills within fifteen (15) days after receipt thereof, provided that the Landlord shall be responsible for any penalties or late charges attributable to the Landlord's delay in delivery the Tax bills to the Tenant. Insurance premiums shall be paid by the Tenant at least fifteen (15) days prior to the date such premiums are due and payable, and copies of paid invoices therefor shall be provided by the Tenant to the Landlord. The parties agree to prorate any and all real estate and personal property tax and assessment bills or payments in lieu of taxes from the Commencement Date to the end of the first calendar year of the Term and from January 1 of the last calendar year of this Lease through the termination date of this Lease. Prior to the termination date of this Lease, the Tenant shall pay to the Landlord the prorata share of all real and personal property taxes and assessments or payments in lieu of taxes (collectively, the "Tax" or "Taxes") for the portion of the last calendar year of the Term hereof.
(b) The Tenant shall pay all utility bills to the utility company providing utility service to the Premises from and after the Commencement Date, prior to the date delinquent. Prior to the Commencement Date, the parties shall work together to have utility meters read and/or utility service billing transferred to the Tenant as of the Commencement Date. In the event the utility company cannot transfer the billing or read the meter appropriately, the parties shall equitably prorate utility charges. Any utility bills that are received by the Landlord shall immediately be forwarded to the Tenant upon receipt. The Tenant shall have the right to select and change utility service providers and to enter into contracts regarding said service, provided that all such contracts may be terminated by Landlord in the event that this Lease is terminated.
(c) Tenant shall be responsible for any interest or penalties incurred as a result of late payment of Taxes and shall defend, indemnify and hold Landlord harmless from and against any and all damage and liability to Landlord arising out of late payment or failure to pay Taxes. Tenant shall deliver to Landlord within ten (10) days after payment of such Taxes, a copy of the paid receipt for such Taxes, unless such receipt is sent directly to the Landlord, in which case, the Landlord shall deliver to the Tenant a copy of said receipt within five (5) days following the Landlord's receipt thereof.
(d) The Tenant shall be permitted to contest any
assessment for Taxes and the Landlord agrees to provide assistance in such
contest provided (i) the Landlord does not incur any expense; (ii) the
Tenant pays any and all expenses as a result of such contest; (iii) all
bills for Taxes are paid in a manner and time so as to avoid any delinquency
or the imposition of any lien against the Premises as a result of such Tax
bills; and (iv) the Tenant shall keep the Landlord informed of the status of
Tenant's contest. Notwithstanding the above, in the event the Tenant desires
to contest any assessment for Taxes at a time when there are less than two
(2) years remaining on the then current Term of this Lease, the Tenant shall
first obtain the prior
written consent of the Landlord, which Landlord may withhold in the event the Landlord reasonably believes that an appeal of the assessment may result in an increase in the Tax bill.
(e) All costs and expenses which Tenant assumes or agrees to pay to Landlord pursuant to this Lease shall be deemed Additional Rent and, in the event of non-payment thereof, Landlord shall have all the rights and remedies hereinafter provided for in case of non-payment of Rent.
4.8. Landlord shall be responsible at its sole cost and expense for the following items which are referred to herein as the "Landlord Expenses":
(a) the replacement of the roof of the Building to the extent necessary (however, Tenant shall be responsible for the cost and expense of ordinary roof repairs and maintenance);
(b) maintenance, repair, and replacement of the foundation, structure, glass and granite walls of the Building and the foundation, structure, floors and walls of the Parking Garage (however, ordinary repair and maintenance of the expansion joints, caulking and glazing of the curtain walls of the Building and Parking Garage and repair and maintenance of the Parking Garage floors, including treatment and coatings for salt damage, shall be Operating Expenses);
(c) replacement of the HVAC system (except that Tenant shall be responsible for the cost and expense for maintenance and repair of the HVAC system and replacement of HVAC compressors and fan motors); and
(d) any other repair or replacement of portions of the Premises costing in excess of One Hundred Thousand and 00/100 Dollars ($100,000.00) which are required primarily as a result of Landlord's failure to maintain the Premises, consistent with its obligations under this Lease.
4.9. (a) Notwithstanding the above, the Landlord agrees that it shall not expend in excess of One Hundred Thousand and 00/100 Dollars ($100,000.00) for any single maintenance or repair item with respect to the Premises during the last five (5) years of the Initial Term or during any of the Option Terms ("Major Expenditure") without obtaining the approval of the Tenant as to such Major Expenditure. The Tenant agrees that it shall not unreasonably withhold or delay such approval of any such Major Expenditure and that the Tenant shall grant its approval if such Major Expenditure is reasonably necessary in order to maintain the Premises as a first-class office facility. In granting the Tenant's approval of any Major Expenditure, the parties shall negotiate, in good faith, to determine whether the useful life of the Major Expenditure will extend beyond the then current Term. If the useful life of a Major Expenditure will extend beyond the then current Term, the cost thereof shall be amortized at the Prime Rate as an Operating Expense for that portion of the useful life allocable to the remainder of the Term (including any Option Terms that may be exercised).
4.10. The Landlord agrees that it shall enter into and maintain service contracts for the maintenance of the elevators, HVAC system and major mechanical and electrical components within the Premises. In the event that the Landlord is unwilling or unable to enter into such service contracts, the Landlord shall notify the Tenant thirty (30) days prior to the cancellation of any such service contract and the Tenant may, at its option and expense, enter into a substitute service contract directly. The cost of any service contract obtained by the Landlord shall be deemed to be an Operating Expense hereunder.
5. SERVICES TO BE FURNISHED BY LANDLORD AT TENANT'S COST.
5.1. (a) The parties acknowledge and agree that all costs and expenses of owning, maintaining, repairing, replacing and operating the Premises subsequent to the Commencement Date that are neither Landlord Expenses, nor Excluded Costs, shall be deemed to be Operating Expenses hereunder and shall be subject to the reimbursement by the Tenant to the Landlord consistent with the terms hereof and paid without offset or deduction.
(i) Hot and cold water for lavatory and ordinary office purposes and for any private restrooms (and showers) and kitchens;
(ii) Central heat, ventilation and air conditioning ("HVAC") services twenty-four hours per day, seven days per week. Tenant shall have the right to install at its expense auxiliary air-conditioning units within the Premises and, at its sole discretion, to operate such units whenever it so desires at Tenant's sole cost and expense;
(iii) Routine maintenance and repair service as specified herein;
(iv) Nightly janitorial service and cleaning service for the Premises and day porter service if warranted and requested by Tenant (to include vacuuming and waxing of floors, trash removal and window washing (3 times per year)); provided, however, if Tenant's floor
coverings or other improvements require special treatment, Tenant shall request such special treatment in writing;
(v) All fluorescent and incandescent bulb, transformer, ballast and starter replacements in the Premises;
(vi) Electricity for office lighting and use, but not limited to fluorescent and incandescent lighting (including tasks and task ambient lighting systems); office equipment including, but not limited to, duplicating machines, computers, terminals, minicomputers, communications, audiovisual equipment, vending machines, or kitchen equipment;
(viii) Maintenance, repairs and replacements of underground utility lines and facilities;
(ix) Removal of rubbish, snow and ice on the exterior portions of the Premises and the Parking Garage; and
(x) Automatic elevator service within the Building.
5.2. The failure by Landlord to any extent to furnish, or the interruption or termination of the required services in whole or in part, resulting from Landlord's negligent acts or omissions or causes beyond the reasonable control of Landlord shall not render Landlord liable in any respect nor be construed as an eviction (constructive or otherwise) of Tenant, nor cause an offset or abatement of Rent, nor relieve Tenant from the obligation to fulfill any covenant or agreement of this Lease; provided, however, in the event of any interruption or termination of services, the Landlord shall undertake diligent efforts to promptly restore such services and the Tenant may pursue claims against the Landlord resulting from the Landlord's negligence, but such claims shall be solely limited to the amount payable under the Liability Policy. The foregoing to the contrary notwithstanding:
(a) Tenant, at its option and expense, shall have the right to install an uninterrupted power source and/or back-up generators within the Premises at a location reasonably acceptable to the Landlord. Further, the Tenant shall have the right to restore utility services if the Landlord is unable to do so within twenty-four (24) hours after written or telephonic notice from the Tenant. Telephonic notice shall be given to the Building Manager followed promptly by written facsimile notice to the Building Manager.
5.3. Should any of the equipment or machinery used in the provision by Landlord of the foregoing services for any reason, cease to function properly, Tenant shall have no claim for offset or abatement of Rent or damages on account of an interruption in service occasioned thereby or resulting therefrom. In the event of any failure of any equipment or machinery to operate, the Landlord shall undertake diligent efforts to restore such operation.
5.4. Except as otherwise expressly provided in this Lease, Landlord shall not be required to perform any maintenance on or make any repairs to the Premises.
(a) The Food Service Contractor shall furnish property and liability insurance, with coverage amounts reasonably acceptable to the Landlord, for the food service operations within the Cafeteria;
(b) The Food Service Contractor shall follow such reasonable rules and regulations as may be promulgated by the Landlord hereunder;
(c) The Cafeteria shall be maintained in an orderly and hygienic condition and in compliance with all applicable county, state and municipal laws and ordinances;
(d) All dumpsters and grease traps in the Cafeteria or used by the Food Service Contractor shall be maintained in good and sanitary condition; and
(e) Any outdoor patios that are utilized for food service and all tables and chairs located thereon shall be maintained in sightly and orderly condition, and all paper and other trash shall be promptly disposed of in proper receptacles.
6. REPAIRS AND ALTERATIONS.
6.2. In the event that the Tenant desires to have any modifications or alterations completed within the Premises subsequent to the Commencement Date, the Tenant shall undertake such improvements or alterations ("Additional Work"), all at its cost and expense and using its own architect and contractor, subject to the following conditions:
(a) The Tenant shall not make any exterior or structural changes to the Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld or delayed;
(b) The Tenant shall provide to the Landlord three
(3) copies of plans and specifications for any Additional Work for exterior
or structural changes to the Premises before undertaking the Additional
Work;
(c) Tenant shall provide to the Landlord two (2) copies of as-built plans and specifications within sixty (60) days after completion of any Additional Work;
(d) All Additional Work shall be done in full compliance with all applicable building codes, regulations, laws, statutes and ordinances;
(e) The Landlord shall not unreasonably withhold its approval (if prior written approval is required) of any Additional Work requested by the Tenant, provided,
however that such proposed Additional Work does not reduce the value of the Premises and so long as the Landlord can obtain the consent of its Lender for such Additional Work, to the extent such consent is required;
(f) Prior to commencing such structural or exterior Additional Work, notice shall be given to Landlord and the Landlord's structural engineer whose address is EQE International, 1848 Lackland Hills Parkway, St. Louis, Missouri 63146-3572, Attention: John P. Miller (or such substitute structural engineer as may be designated by the Landlord in written notice to the Tenant), specifying the work to be done and the area of the Premises affected by such work;
(g) Tenant shall obtain all necessary governmental permits prior to commencing such Additional Work;
(h) The Tenant shall provide the Landlord a list of the contractors and subcontractors performing the Additional Work and shall provide the Landlord with reasonable assurances that such contractors and subcontractors carry liability and workers compensation insurance reasonably satisfactory to the Landlord;
(j) The parties shall obtain the written consent of Landlord's Lender to any exterior or structural Additional Work, if so required by the Lender; and
(k) Tenant shall pay any out-of-pocket expenses incurred by the Landlord to professionals or to its Lender in reviewing and approving any request for any exterior or structural Additional Work. The out-of-pocket expenses shall be based on reasonable rates for customary services provided by such professionals. The Landlord shall endeavor to use the same professionals used by its Lender for reviewing any proposed exterior or structural Additional Work to the extent the Lender's approval is required therefor.
6.3. Any and all alterations or Additional Work to the Premises shall become the property of Landlord upon termination of this Lease (except trade fixtures, equipment or furniture owned by Tenant).
7. QUIET ENJOYMENT. So long as Tenant observes and performs the covenants and agreements binding on it hereunder, Tenant shall at all times during the term hereof granted, peacefully and quietly have and enjoy possession of the Premises without any encumbrance or hindrance.
8. CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights:
8.1. To constantly have pass keys to the Premises.
8.2. With twenty-four (24) hours notice to the Tenant to exhibit the Premises during business hours to prospective tenants during the last twelve (12) months of the Term, and to any prospective purchaser, mortgagee, or assignee of any mortgage on the Premises and others having a legitimate interest at any time during the Term, along with a representative of the Tenant.
8.3. At any time in the event of an emergency, and otherwise on twenty-four (24) hours notice to the Tenant during business hours with a representative of the Tenant, to take any and all measures, including inspections, repairs, alterations, additions and improvements to the Premises as may be necessary or desirable for the safety, protection or preservation of the Premises or Landlord's interests, or as may be necessary or desirable in the operation or improvement of the Premises or in order to comply with all laws, orders and requirements of governmental or other authority.
9. INDEMNIFICATION AND WAIVER OF CERTAIN CLAIMS.
9.2. Landlord, to the extent permitted by law, waives all claims it may have against the Tenant and against Tenant's agents and employees for damages to person or property sustained by Landlord or by any occupant of the Premises, or by any other person, resulting from
9.3. Landlord shall not be liable for any damage or loss to fixtures, equipment, merchandise or other personal property of Tenant located anywhere in or on the Premises caused by theft, fire, water, explosion, sewer backup or any other hazards, regardless of the cause thereof, and Tenant does hereby expressly release Landlord of and from any and all liability for such damage or loss. Landlord shall not be liable for any damage or loss resulting from business interruption at the Premises and Tenant does hereby expressly release Landlord of and from any and all liability for such damage or loss.
9.4. So long as the Tenant maintains in effect all insurance policies required to be maintained under this Lease in the form and with the coverage required hereunder, the Tenant shall not be liable for any damages to the Premises or any part thereof caused by fire or other insurable hazards resulting from the negligent acts or omissions of the Tenant, and the Landlord shall be deemed to expressly release the Tenant of and from any and all liability for such damage or loss.
9.5. The Landlord and the Tenant agree that so long as it is permitted under any insurance policies carried hereunder, such policies shall contain a waiver of subrogation provision with respect to the liabilities of the other party hereunder.
10. PROPERTY AND LIABILITY INSURANCE.
policies shall at all times provide the required insurance coverage and such coverage will not be reduced by claims unrelated to the Premises.
10.3. Tenant shall, at Landlord's request from time to time, provide Landlord with copies of insurance policies necessary to evidence Tenant's compliance with this Section.
10.4. Tenant shall obtain the agreement of Tenant's insurers for Tenant's insurers to notify Landlord at least thirty (30) days prior to cancellation or renewal of any such insurance coverage provided by Tenant.
10.5. Tenant may, in its discretion, maintain insurance against theft or damage to its personal property, fixtures and equipment located within the Premises, provided if the Tenant chooses not to carry such insurance, the Tenant shall hold the Landlord harmless from any and all costs, claims or expenses related to any loss of personal property, fixtures or equipment within the Premises.
11. HOLDING OVER. Unless otherwise agreed to in writing by Landlord and Tenant, if Tenant retains possession of the Premises or any part thereof after the expiration or termination of the Term, Tenant shall pay Landlord Rent at one hundred fifty percent (150%) of the monthly rate in effect immediately prior to the expiration or termination of the Term for the time Tenant remains in possession after the expiration or termination of the Term and, in addition thereto, Tenant shall pay Landlord for all damages, consequential as well as direct, sustained by Landlord by reason of Tenant's retention of possession. The provisions of this Section do not exclude Landlord's rights of re-entry or any other right hereunder. No such holding over shall be deemed to constitute a renewal or extension of the Term hereof.
12. ASSIGNMENT AND SUBLETTING.
12.1. (a) Tenant shall have the right to assign this Lease or to sublet all or any portion of the Premises to any party which will use the Premises in accordance with the terms of this Lease, with the prior written consent of the Landlord which shall not be unreasonably withheld, delayed or conditioned upon payment of additional Rent or other sums. In the event that the Landlord does not respond to Tenant's request within fifteen (15) days following Landlord's receipt of a request for consent, the Landlord shall be deemed to have
consented to such request. No commissions or fees shall be due to Landlord or the Building Manager on account of any assignment or subletting. Any such assignment of this Lease or sublease of the Premises shall be and remain subject to all of the terms and conditions of this Lease. No sublease or assignment, in any event, shall release the Tenant from any liability hereunder.
(b) In the event of any assignment or subletting of all or a portion of the Premises, the Tenant shall provide written notice to the Landlord of the name of the assignee or subtenant and the portion of the Premises which such assignee or subtenant shall be occupying at least fifteen (15) days prior to the date the subtenant or assignee takes possession of the Premises.
(c) If this Lease is assigned or if the Premises or any part thereof is sublet or occupied by anybody other than Tenant, Landlord may, after default by Tenant, collect rent from the assignee, subtenant or occupant, and apply the net amount collected to the Rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any of Tenant's covenants contained in this Lease or the acceptance of such assignee, subtenant or occupant as Tenant, or a release of Tenant from further performance by Tenant of covenants on the part of Tenant herein contained.
(d) Tenant may, without the Landlord's consent, assign this Lease or sublease the Premises or portions thereof to entities controlled, controlling or affiliated with the Tenant, provided Tenant shall, within thirty (30) days following such assignment or subletting, give the Landlord written notice thereof. No such sublease or assignment in any event shall release the Tenant from any liability hereunder.
12.2. Landlord's rights to assign this Lease are and shall remain unqualified. Upon any sale of the Premises, Landlord shall thereupon be entirely freed of all obligations of Landlord hereunder and shall not be subject to any liability from any act, omission or event occurring after such conveyance.
13. CONDITION OF PREMISES. At the expiration or termination of this Lease, Tenant shall return the Premises broom-clean and in such condition as premises of comparable age and construction would normally be, ordinary wear and loss by fire or other casualty and Additional Work approved by the Landlord excepted, failing which Landlord may restore the Premises to such condition and Tenant shall pay the cost thereof on demand. The Tenant shall have no responsibility for removing Additional Work and restoring the Premises so long as the Additional Work which does not materially adversely affect the value or utility of the Premises for future use.
14. USE OF PREMISES. Tenant agrees to comply with the following provisions:
14.1. The Premises may be used by the Tenant for any purpose, provided at all times such use shall be lawful and in compliance with all applicable governmental statutes,
ordinances, laws and regulations and all conditions, restrictions and other documents recorded in the Office of the Recorder of St. Louis County, Missouri.
14.2. Tenant will not make or permit to be made any use of the Premises or any part thereof which would violate any of the covenants, agreements, provisions or conditions of this Lease, or which directly or indirectly is forbidden by public law, ordinance or governmental regulation, or which may be dangerous to life, limb or property, or which may invalidate any policy of insurance carried on the Building or covering its operation, or which will suffer or permit the Premises or any part thereof to be used in any manner or anything to be brought into or kept therein which shall in any way impair or tend to impair the character, reputation or appearance of the Premises as a high quality office building, or which will impair or interfere with any of the services performed by Landlord for the Premises.
14.3. Tenant shall not overload any floor.
14.4. Tenant shall not use the Premises for any illegal or immoral purpose.
15. CASUALTY DAMAGE.
15.1. If the Premises or any part thereof shall be damaged by fire or other casualty, Tenant shall give prompt written notice thereof to Landlord.
15.2. If the improvements within the Premises shall be damaged:
(a) (i) such that substantial alteration or reconstruction of the Premises shall take more than six (6) months to restore after the expiration of the Evaluation Period, in Landlord's reasonable estimate, and (ii) within the last three (3) years of the then current Term hereof (plus any Option Terms previously exercised by the Tenant); or
(c) such that Landlord's Lender should require that the insurance proceeds payable as a result of a casualty be applied to the payment of the mortgage debt; or
15.3. (a) The Landlord agrees that it shall endeavor to negotiate provisions in its loan documents with its Lender to permit the use of insurance proceeds for restoration of the Premises in the event of a casualty to the Premises. In the event that any Lender does not permit the Landlord to use insurance proceeds for restoration of the Premises, the Landlord shall seek reasonable alternative financing if Landlord does not have sufficient funds to utilize for a restoration in lieu of the insurance proceeds applied by its Lender toward the Lender's mortgage debt. In the event that the Lender retains all or a portion of the insurance proceeds to be applied toward its loan and the Landlord is unable to secure reasonable alternative financing and as a result thereof, the Landlord does not fully restore the Premises after a casualty, the parties shall provide for an equitable reduction in the Rent payable hereunder to reflect the extent to which the Premises were not fully restored directly as a result of the Lender's retention of a portion of the insurance proceeds. If the parties are unable to agree upon an equitable reduction in Rent, then the Landlord may elect to terminate this Lease by written notice to the Tenant.
15.4. If there is an occurrence of a Major Casualty, Tenant shall have the right to terminate this Lease upon delivery to Landlord of written notice of such termination within ninety (90) days after such Major Casualty.
15.5. After a casualty to the Premises, the Landlord shall proceed with reasonable diligence to complete consultations with its insurer, to make arrangements for the payment of funds to be used for reconstruction, and to consult with its Lenders, contractors, architects and engineers to evaluate the feasibility of such reconstruction, but in any event within ninety (90) days (such period to be known as the "Evaluation Period").
15.6. If after initial negotiations by the Landlord with the insurance company providing property insurance for any casualty, the Landlord believes that it will be unable to obtain sufficient funds to restore the Premises without bringing a lawsuit against such insurer, the Landlord shall notify the Tenant in writing as to the status of such negotiations, and within twenty (20) days thereafter, the Tenant shall notify the Landlord in writing that it desires to exercise one of the following three options:
(a) Have the Landlord accept such reduced amount from the insurance company and proceed with restoration, acknowledging that the Landlord is unlikely to be able to fully complete restoration of the Premises;
(b) Provide to the Landlord sufficient funds to restore the Premises to a manner acceptable to the Tenant and have the Landlord assign any claim it may have against the insurance company; or
(c) Have the Landlord delay the restoration of the Premises and permit the Tenant to pursue settlement discussions and, if necessary, litigation against the insurance company in order to obtain a satisfactory payment from the insurance company.
15.8. If neither Landlord nor Tenant has the right to or does not elect to terminate this Lease as set forth above, Landlord shall promptly commence and proceed with reasonable diligence after the expiration of the Evaluation Period to restore the Premises to substantially the same condition in which they were immediately prior to the happening of the casualty, except that Landlord's obligation to restore shall not include any personal property of the Tenant, unless and to the extent the Tenant makes funds available to the Landlord for such work, nor shall Landlord be required to spend for such work an amount in excess of the net insurance proceeds (deducting any costs of collection) actually received by Landlord as a result of the casualty.
during such periods), the Tenant shall pay such deficiency to the Landlord on the dates upon which such Rent payments are due.
16. CONDEMNATION.
16.1. If the whole of the Premises should be taken for any public or quasi-public use, by right of eminent domain or otherwise, or if it should be sold in lieu of condemnation, then this Lease shall terminate as of the date when physical possession of the Premises is taken by the condemning authority.
16.2. (a) If less than the whole of the Premises is thus taken or sold, but if such portion taken or sold is so substantial that Landlord determines in its reasonable opinion that the reconstruction of the remaining portions is not reasonably practicable (a "Major Taking"), Landlord may terminate this Lease by giving written notice thereof to Tenant, in which event this Lease shall terminate as of the date when physical possession of such portion of the Premises is taken by the condemning authority.
(b) If less than the whole of the Premises is taken or sold, and the proposed restoration by the Landlord will render the Premises, in the reasonable business judgment of the Tenant, materially impaired for the continuation of the Tenant's business within the Premises, the Landlord and the Tenant shall work together in good faith to attempt to reach an agreement as to the appropriate restoration. If after sixty (60) days of discussions, in the Tenant's reasonable opinion, the Landlord is still unwilling to agree to a suitable restoration, the Tenant may notify the Landlord within thirty (30) days thereafter that it desires to terminate this Lease effective as of the date of the Major Taking.
16.3. If this Lease is not so terminated upon any such taking or sale, the Base Rent payable hereunder shall be diminished on an equitable basis and the Landlord shall restore the Premises to substantially their former condition to the extent practicable, provided in no event shall Landlord be required to spend for such work an amount in excess of the net amount received by Landlord (deducting any costs of collection) as compensation for such damage.
16.5. Tenant shall be entitled to claim independently against the condemning authority any damages expressly referable to Tenant's business, such as relocation expenses, as the same may be permitted by law, provided that such claim shall not reduce any award payable to Landlord.
16.6. In the event of a condemnation which results in termination of this Lease, the Tenant shall be entitled to receive a portion of any condemnation award paid by the
(a) Any out-of-pocket costs incurred by the Tenant and paid to the Landlord for any Tenant Work, multiplied by the number of Lease Years remaining on the Initial Term as of the date of such taking, divided by twenty (20); plus
(b) Any out-of-pocket costs incurred by the Tenant for Additional Work within the Premises, multiplied by the number of Lease Years remaining on the Initial Term as of the date of such taking, divided by twenty (20); and
16.7. Neither the Landlord nor any entity affiliated with the Landlord or its members shall directly or indirectly initiate or procure any rights or actions which could result in the condemnation of the Premises or this Lease, including without limitation, redevelopment rights under Chapters 99, 100 and/or 353 RSMo.
17. PARKING.
17.1. During the Term of this Lease, Tenant shall have the exclusive use, along with its guests and invitees, of the automobile parking areas situated in the Parking Garage, together with the surface parking within the Premises, driveways, and footways, subject to the Landlord's access rights for permitted purposes hereunder and any rights of Cybertel under the Cybertel Lease. The Landlord agrees that it shall not make any amendments to the Cybertel Lease that would substantive or materially adversely affect the Tenant's use of the Premises without the prior written consent of the Tenant.
17.2. Landlord shall deliver as part of the improvements on the Premises, nine hundred twenty-three (923) parking spaces for cars within the Parking Garage and fourteen (14) surface parking spaces for cars.
17.3. The Parking Garage shall have a security system and access shall be restricted with gated entrance and exit with the use of a card system paid for and supervised by the Tenant. The Building Manager shall be responsible for removal of any unauthorized vehicles within the Parking Garage upon receipt of notice from the Tenant thereof.
18. REASONABLENESS STANDARD. Whenever and wherever in this Lease, one party must consent or approve of a request of the other party, such consent or approval shall in all instances be reasonable and promptly given and shall not be conditioned on other matters or
the payment of Additional Rent, fees, expenses or other consideration, unless such payments or other conditions are expressly provided for in this Lease as to such matter.
19. DAMAGES FROM CERTAIN CAUSES.
19.1. Landlord shall not be liable to Tenant for any loss or damage to any property or person occasioned by theft, Force Majeure or by any other cause beyond the control of Landlord, including but not limited to delays from the foregoing, nor shall Landlord be liable for any damage or inconvenience which may arise through repair or alterations of any part of the Premises, provided the Landlord undertakes commercially reasonable efforts to restore such damage or reduce such inconvenience.
20. NO IMPLIED WAIVER.
20.1. The failure of either party to insist at any time upon the strict performance of any covenant or agreement or to exercise any option, right, power or remedy contained in this Lease shall not be construed as a waiver or a relinquishment thereof for the future.
20.2. Tenant's failure to pay or Landlord's receipt of a lesser amount than the monthly installment of Rent due under this Lease shall not be deemed to be other than on account of the earliest Rent due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such Rent or pursue any other remedy provided in this Lease.
20.3. No payment by Landlord or receipt by Tenant of a sum less than the amount due from the Landlord to the Tenant shall be deemed to be other than on account of the sum due, nor shall any endorsement or statement on any check or any letter accompanying any check from Landlord to the Tenant be deemed an accord and satisfaction, and Tenant may accept such check or payment without prejudice to Tenant's right to recover the balance of such sum or pursue any other remedy provided in this Lease.
21. PERSONAL LIABILITY.
21.1. The liability of Landlord to Tenant for any default by Landlord under this Lease shall be limited to the interest of Landlord in the Premises and Tenant agrees to look solely to Landlord's interest in the Premises for the recovery of any judgment from the Landlord, it being intended that neither Landlord nor any member of Landlord shall be personally liable for any judgment or deficiency.
22. RELATIONSHIP TO PARTIES.
22.1. Nothing contained in this Lease shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of
partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of Rent, nor any other provision contained herein, nor any acts of the parties herein, shall be deemed to create any relationship between the parties hereto other than the relationship of Landlord and Tenant.
23.1. If:
(b) Tenant defaults in the prompt and full performance of any provision of this Lease, other than the payment of Rent, and such default continues for thirty (30) days after notice, provided that if such default cannot reasonably be cured within such thirty (30) day period and so long as the Tenant commences to cure such default within such thirty (30) day period and diligently pursues completion of such cure, Tenant shall not be in default hereunder,
(c) the leasehold interest of Tenant is levied upon under execution or is attached by process of law,
(d) Tenant shall apply for or consent to the appointment of a receiver, trustee or liquidator of Tenant or of all or a substantial part of its assets,
(e) Tenant shall file a voluntary petition in bankruptcy,
(f) Tenant shall make a general assignment for the benefit of creditors,
(g) Tenant shall file a petition or an answer seeking reorganization or arrangement with creditors or to take advantage of any insolvency law,
(h) Tenant shall file an answer admitting the material allegations of a petition filed against Tenant in any bankruptcy, reorganization or insolvency proceeding, or if an order, judgment or decree shall be entered by any court of competent jurisdiction adjudicating Tenant bankrupt or insolvent, which is not dismissed within ninety (90) days, or approving a petition seeking reorganization of Tenant or appointing a receiver, trustee or liquidator of Tenant or of all or a substantial part of its assets, or
(i) Tenant or any affiliate of Tenant shall default (after the expiration of any applicable cure period) under any other lease between the Tenant or any affiliate of the Tenant and the Landlord or an affiliate of Landlord, for space leased by Tenant or any affiliate of the Tenant in Building I or Building II of the Office Center, then and in any such event Landlord may, at its election, either terminate this Lease and Tenant's right to possession of the Premises or, exercise Landlord's rights hereunder without terminating this Lease or relieving Tenant of any obligation, including the obligation to pay Rent.
23.2. The Landlord agrees that it shall provide to the
Tenant notice, not more than once in any twelve (12) month period, of any
delinquent Rent payment and the Tenant shall have five (5) days after the
receipt of such delinquency notice to pay the delinquent Rent and avoid the
occurrence of an Event of Default hereunder. The parties further agree that
if:
(a) The Landlord alleges that a default (other than
one involving the payment of Rent) has occurred; and
(b) Tenant in good faith contests the Landlord's claim of an alleged default; and
(c) the Landlord or Tenant have instituted an Arbitration proceeding regarding such alleged default,
an Event of Default shall not be deemed to have occurred against the Tenant if the arbitrator rules in favor of the Landlord and against the Tenant so long as within thirty (30) days after such ruling, the Tenant has either cured such breach or commences to cure such breach and diligently pursues such cure to completion.
23.3. Upon any termination of this Lease, Tenant shall surrender possession and vacate the Premises immediately, and deliver possession thereof to Landlord, and Tenant hereby grants to Landlord full and free license to enter into and upon the Premises in such event with or without process of law and to repossess the Premises and to expel or remove Tenant and any others who may be occupying or within the Premises and to remove any and all property therefrom, using such force as may be necessary, without being deemed in any manner guilty of trespass, eviction or forcible entry or detainer, and without relinquishing Landlord's right to Rent or any other right given to Landlord hereunder or by operation of law.
23.4. If Landlord elects, without terminating this Lease, to endeavor to relet the Premises, then Landlord may, at Landlord's option, enter into the Premises, remove Tenant's signs and other evidence of tenancy, and take and hold possession thereof as provided herein, without such entry and possession terminating this Lease or releasing Tenant, in whole or in part, from Tenant's obligation to pay the Rent hereunder for the full term as hereinafter provided. Upon and after entry into possession without termination of this Lease, Landlord may relet the Premises or any part thereof for the account of Tenant to any person, firm or corporation other
than Tenant for such Rent, for such time and upon such terms as Landlord shall determine to be reasonable. In any such case, Landlord may make repairs, alterations and additions in or to the Premises, and redecorate the same to the extent deemed necessary or desirable by Landlord, and Tenant shall, upon demand, pay the cost thereof, together with Landlord's expenses of the reletting. If the consideration collected by Landlord upon any such reletting for Tenant's account is not sufficient to pay monthly the full amount of the Rent reserved in this Lease, together with the cost of repairs, alterations, additions, redecorating and Landlord expenses, Tenant shall pay to Landlord the amount of each monthly deficiency upon demand, and if the consideration so collected from any such reletting is more than sufficient to pay the full amount of the Rent reserved herein, together with the costs and expenses of Landlord, Landlord, at the end of the stated Term of this Lease, shall account to Tenant.
23.5. Upon the occurrence of an Event of Default, the Landlord may pursue any remedies available to the Landlord under Missouri law.
23.6. Any and all property which may be removed from the Premises by Landlord pursuant to the authority of this Lease or of law, to which Tenant is or may be entitled, may be handled, removed or stored by Landlord at the risk, cost and expense of Tenant and Landlord shall in no event be responsible for the value, preservation or safekeeping thereof. Tenant shall pay to Landlord, upon demand, any and all expenses incurred in such removal and all storage charges against such property so long as the same shall be in Landlord's possession or under Landlord's control. Any such property of Tenant not removed from the Premises or retaken from storage by Tenant within thirty (30) days after the end of the Term or of Tenant's right to possession of the Premises, however terminated, shall be conclusively deemed to have been forever abandoned by Tenant and either may be retained by Landlord as its property or may be disposed of in such manner as Landlord may see fit.
23.7. Tenant agrees that if it shall at any time fail to make any payment or perform any other act on its part to be made or performed under this Lease, Landlord may, but shall not be obligated to, and after reasonable notice or demand and without waiving or releasing Tenant from any obligation under this Lease, make such payment or perform such other act to the extent Landlord may deem desirable, and in connection therewith to pay expenses and employ counsel. Tenant agrees to pay a reasonable attorneys' fee if legal action is required to enforce performance by Tenant of any condition, obligation or requirement hereunder. All sums so paid by Landlord and all expenses in connection therewith, together with interest thereon at the Prime Rate from the date payment was due, shall be deemed Additional Rent hereunder and payable at the time of any installment of Rent thereafter becoming due and Landlord shall have the same rights and remedies for the nonpayment thereof or of any other Additional Rent, as in the case of default in the payment of Rent.
23.8. (a) The Tenant shall be entitled to restrain by injunction the violation or threatened violation of any of the Landlord's covenants, agreements or conditions of this Lease.
(c) In the event of a Landlord Default under this Lease, Tenant may, at its option:
(i) Upon written notice to Landlord, make payment or take such action as is necessary to cure the Landlord Default and in connection therewith, pay expenses and employ legal counsel and other professionals. Upon so doing, the costs and expenses so incurred by Tenant (including a reasonable attorneys' fee) shall be immediately due and payable together with interest thereon at the Prime Rate from time to time incurred until paid.
(ii) Institute an Arbitration proceeding and secure an award for the damages (including, without limitation, consequential and incidental damages) sustained as a result of the Landlord default, which award shall include Tenant's reasonable attorneys' fees and accrue interest at the Prime Rate from the date of the award until paid.
(iii) If the Landlord has not paid the sum due to Tenant, within thirty (30) days following the issuance of a final nonappealable award or judgment against the Landlord as a result of a Landlord Default, the Tenant may offset the sum of any final nonappealable judgment or award against the next installments of Rent due hereunder, provided that no such offset shall exceed an amount equal to twelve percent (12%) of the amount payable as Base Rent for each such month.
(iv) Exercise such remedies as are available at law or in equity to the Tenant.
24. SUBORDINATION OF LEASE.
24.1. So long as Tenant's rights hereunder are not disturbed, this Lease shall be subject and subordinate only to deeds of trust (otherwise for the purpose of this Lease known as a "Mortgage"), whether presently existing or hereafter arising upon the Premises or upon the Building, and to any renewals, modifications, refinancings or extensions thereof, but Tenant agrees that any such Lender shall have the right to subordinate such Mortgage to this Lease on such terms and subject to such conditions as such Lender may deem appropriate in its discretion. Any Lender whose Mortgage lien is superior to this Lease shall agree to execute a subordination, non-disturbance and attornment agreement ("SNDA") containing commercially reasonable terms for the benefit of the Tenant and such Lender, and which agreement shall provide for non-disturbance of Tenant by Lender or any successor or assign of Lender so long as Tenant is in compliance with the terms and provisions of this Lease. The first SNDA shall be executed and delivered by the parties thereto in conjunction with the closing of the Landlord's construction loan which will provide a portion of the funds for construction of the Premises.
24.2. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any Mortgage, now existing or hereafter placed upon the Premises or the Building as a whole provided such party recognizes this Lease and agrees to be bound by the obligations of Landlord hereunder arising from and after the date title transfers, and Tenant agrees upon demand to execute such further instruments subordinating this Lease or attorning to any such Lender as Landlord may reasonably request, on the condition that any such Lender shall execute a non-disturbance agreement in favor of Tenant.
24.3. Tenant shall, within twenty (20) days after written request of Landlord, execute, acknowledge and deliver to Landlord or to Landlord's mortgagee, proposed mortgagee, or proposed purchaser of the Premises or any part thereof, any estoppel certificates reasonably requested by Landlord from time to time, which estoppel certificates shall show whether this Lease is in full force and effect and whether any changes may have been made to the original Lease; whether the Term of this Lease has commenced and full Rent is accruing; whether there are any known defaults by Landlord and, if so, the nature of such defaults; whether possession has been assumed and all improvements to be provided by Landlord have been completed; whether Rent has been paid more than thirty (30) days in advance; and that there are no known liens, charges, or offsets against rental due or to become due; and that the address shown on such estoppel certificate is accurate, and such other statements as may be reasonably requested by the Landlord.
24.4. Tenant agrees that within twenty (20) days after the receipt of any proposed form of SNDA or tenant estoppel provided by the Landlord to the Tenant, the Tenant shall review such form and provide any comments to the Landlord. The Tenant further agrees to review promptly any further revisions of the SNDA or tenant estoppel and to cooperate with the Landlord and the Lender to finalize and execute an SNDA and tenant estoppel in form reasonably acceptable to the Lender so as not to delay the closing of any loan or sale. In the
event that the Tenant requests that Landlord execute an estoppel, the Landlord shall promptly review any revisions and cooperate with the Tenant to expedite the execution thereof.
24.5. Tenant shall, in the event of the sale or assignment of Landlord's interest in the Premises or in the event of any proceedings brought for the foreclosure of, or in the event of exercise of the power of sale under, or taking by deed in lieu of foreclosure of, any mortgage made by Landlord covering the Premises, give full and complete attornment to the purchaser and recognize the purchaser as Landlord under this Lease for the balance of the Term of this Lease, including any Option Term, provided such purchaser agrees to assume the obligations of Landlord under this Lease arising from and after the date of such purchaser's acquisition of the Premises.
26. NOTICES AND CONSENTS. The Tenant shall pay the Rent and forward all notices to Landlord at the following address (or at such other place as Landlord may hereafter designate in writing):
Eckelkamp Office Center South, L.L.C.
200 West Main Street
Washington, MO 63090
Attn: L. B. Eckelkamp, Jr.
with a copy of notices to:
Kelley Real Estate Advisors, Inc.
12444 Powerscourt Drive, Suite 150
St. Louis, MO 63131
Attention: Joseph J. Kelley, Jr.
Sonnenschein Nath & Rosenthal
One Metropolitan Square
Suite 3000
St. Louis, MO 63102
Attention: Daniel R. Wofsey
26.1. The Landlord shall forward all notices to Tenant at the following address (or at such other place as Tenant may hereafter designate in writing):
Edward D. Jones & Co., L.P.
201 Progress Parkway
Maryland Heights, MO 63043-3042
Attention: Wendy L. Monso
Edward D. Jones & Co., L.P.
12555 Manchester Road
Des Peres, MO 63131
Attention: Lawrence R. Sobol, General Counsel
Greensfelder, Hemker & Gale
2000 Equitable Building
10 South Broadway
St. Louis, MO 63102-1774
Attention: Thomas L. Story
26.2. Any notice provided for in this Lease must, unless otherwise expressly provided herein, be in writing, and may, unless otherwise expressly provided herein, be given or served by depositing the same in the United States mail, postage pre-paid and certified, and addressed to the party to be notified with return receipt requested, by overnight courier which provides a record of receipt, by courier which provides a record of receipt, or by delivering the same in person to an officer of such party.
26.3. Notice deposited in the mail in the manner hereinabove shall be effective upon receipt, unless such mail is unclaimed, in which event notice shall be effective five (5) days after the date of mailing.
26.4. Notices by Tenant shall also be forwarded to the Lender at the address provided by Landlord to Tenant at such time as the Lender has been determined.
Except as specifically provided in this Lease, Tenant hereby expressly waives the service of intention to terminate this Lease or re-enter the Premises, of any demand for payment of Rent or possession, and of any other notice or demand prescribed by any statute or other law.
27. CONTINGENCIES.
27.1. This Lease and Tenant's rights and obligations hereunder are contingent upon the following matters which the Landlord shall diligently pursue:
(a) The Landlord shall secure a construction loan commitment in an amount which, along with Landlord's equity, is sufficient for the construction of the Premises (other than for Tenant Work to be paid for by the Tenant), which commitment shall contain no provisions which cannot reasonably be expected to be complied with, and provide a copy of such commitment to Tenant on or before sixty (60) days after the Execution Date;
(c) The Landlord shall have entered into a construction contract for construction of the Premises (including an allowance for the Base TI Allowance portion of the Tenant Work) consistent with the obligations of the Landlord hereunder and a copy of such contract is provided to the Tenant within seventy-five (75) days after the Execution Date; and
(d) The Landlord shall commence construction of the Premises on or before June 1, 2000.
27.2. In the event the Landlord has not satisfied the foregoing provisions on or before the dates noted (or any extension thereof to which Tenant agrees not to unreasonably withhold its consent therefor), the Tenant may at any time thereafter by written notice to the Landlord terminate this Lease.
28. INVALIDITY OF PARTICULAR PROVISIONS. If any clause or provision of this Lease is or becomes illegal, invalid, or unenforceable because of present or later laws or any rule, decision, or regulation of any governmental body or entity, the intention of the parties hereto is that the remaining parts of this Lease shall not be affected thereby.
29. COMMISSIONS. Landlord hereby represents and warrants to Tenant that it has not retained any broker or agent concerning this Lease other than Kelley Real Estate Advisors, Inc. ("Kelley") and Landlord shall pay any and all broker's fees or commission owed to Kelley because of this Lease or any of the transactions described herein. Tenant hereby represents and warrants to Landlord that it has retained no broker or agent concerning this Lease other than Grubb & Ellis/Krombach Partners, Inc. and Landlord shall pay any and all broker's fees or commissions owed to Grubb & Ellis/Krombach Partners, Inc. because of this Lease or any of the transactions described herein, pursuant to the Listing Agreement executed by Landlord, Tenant, Kelley, Grubb & Ellis/Krombach Partners, Inc., Kelley Real Estate, Inc. and the Adjacent Property Owner. Landlord and Tenant hereby indemnify and agree to defend and hold each other harmless against any loss, claim, expense or liability with respect to any other commissions or broker's fees claimed on account of the execution and/or renewal of this Lease due to any action of the indemnifying party.
30. SPECIAL STIPULATIONS.
30.1. No receipt of money by Landlord from Tenant after the expiration or termination of this Lease, the service of any notice, the commencement of any suit, or final judgment for possession of the Premises shall reinstate, continue, or extend the Term of this
Lease or affect any such notice, demand, or suit or imply consent for any action for which Landlord's consent is required.
30.2. No waiver of any default of Tenant hereunder shall be implied from any failure by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and such express waiver shall be only for the time and to the extent therein stated.
30.3. The Premises are located in unincorporated St. Louis County.
30.4. All of the covenants of Tenant and Landlord in this Lease shall be deemed and construed to be "conditions" as well as "covenants", as though the words specifically expressing or importing conditions and covenants were used in each instance.
30.5. This Lease shall not be recorded by either party without the consent of the other.
30.6. Neither party has made any representations or promises, except as contained in this Lease, or in some additional writing signed by the party making such representation or promise.
30.7. Each provision hereof shall extend to and shall, as the case may require, bind and inure to the benefit of Landlord and Tenant and their respective heirs, legal representatives, successors and assigns.
30.8. It is understood and agreed that this Lease shall not be binding until and unless all parties have signed it.
31. MECHANICS LIENS.
31.1. If, because of any act or omission of Tenant, its employees, agents, contractors, or subcontractors, any mechanic's lien, other lien, charge or order for the payment of money shall be filed against Landlord or against all or any portion of the Premises, Tenant shall, at its own cost and expense, cause the same to be discharged of record, within thirty (30) days after the filing thereof, and Tenant shall protect, defend, indemnify and hold harmless Landlord against and from all costs, liabilities, suits, penalties, claims and demands, including reasonable attorney's fees resulting therefrom; provided, however, the Tenant shall be permitted to contest any such mechanic's lien, provided that the Tenant provides a bond or other security reasonably satisfactory to the Landlord and to the Landlord's Lender against any such mechanic's lien and provided further that the Tenant promptly pay any judgment related to the mechanic's lien if the Tenant's contest thereof shall fail. Notwithstanding the foregoing, nothing contained herein shall deem Tenant a partner or agent of Landlord, and Tenant shall not, by reason hereof or otherwise, have the right to bind Landlord or the Premises to the payment of any such money.
31.2. The Landlord agrees that in the event any mechanic's lien is filed against the Premises as a result of work contracted for by the Landlord, the Landlord shall take reasonable commercial efforts either to settle the lien or to actively contest it so as to ensure that the Tenant's occupancy and enjoyment of the Premises is not adversely affected by the filing of such lien. In the event that any mechanic's lien is filed as a result of the Landlord's action, and if Landlord is not successful in obtaining a release of such lien within thirty (30) days of the date of filing of such lien, then Landlord shall, within ten (10) days thereafter, provide a bond, title insurance or other reasonable security to the Tenant providing protection to the Tenant for its leasehold estate hereunder.
32. ATTORNEY'S FEES.
32.1. If any person not a party to this Lease shall institute an action against Tenant in which Landlord shall be made a party, arising out of any alleged act or omission of the Tenant or its employees or agents, Tenant shall indemnify and hold Landlord harmless from all liability by reason thereof, and all costs incurred by Landlord in such action, including reasonable attorneys' fees.
32.2. If any person not a party to this Lease shall institute an action against the Landlord in which the Tenant shall be made a party, arising out of any alleged act or omission of the Landlord or its employees or agents, the Landlord shall indemnify and hold the Tenant harmless from all liability by reason thereof, and all costs incurred by the Tenant in such action, including such reasonable attorneys' fees.
32.3. In the event of litigation between the parties hereto, declaratory or otherwise, for the enforcement of any covenants, terms or conditions of this Lease, the nonprevailing party shall pay the costs and expenses, including, without limitation, fees or costs of experts, whether or not used in any proceeding and attorneys' fees actually incurred by the
prevailing party, which shall be determined and fixed by the Court as part
of the judgment. The parties covenant and agree that they intend by this
Section to compensate, for attorney's fees actually incurred by the
prevailing party, the particular attorneys involved at such attorneys' then
normal hourly rate. This Section shall constitute an instruction to the
Court that such rate or rates shall be deemed reasonable.
33. CONSTRUCTION OF LEASE. The language in all parts of this Lease shall in all cases be construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant. Time is of the essence of this Lease and of every term, covenant and condition hereof. The words "Landlord" and "Tenant", as used herein, shall include the plural as well as the singular. The neuter gender includes the masculine and feminine. If there is more than one tenant, then the obligations to be performed shall be joint and several.
34. ENTIRE AGREEMENT. This Lease, together with any attached exhibits and any written addenda contains the entire agreement between the parties.
35. INTERPRETATION AND ENFORCEMENT. This Lease shall be interpreted, governed and enforced in all respects under the laws of the State of Missouri.
36. FORCE MAJEURE.
36.1. Whenever a period of time is herein prescribed for the taking of any action by Landlord, Landlord shall not be liable or responsible for, and there shall be excluded from the computation of such period of time, any delays due to strikes, work stoppages, riots, acts of God, natural disasters, weather, governmental imposition of priorities or controls, shortages of labor, materials or fuels, war, governmental laws, regulations or restrictions, or any other cause whatsoever beyond the control of Landlord. All such items in the previous sentence are referred to herein as "Force Majeure." Notwithstanding the above, subsequent to the Commencement Date, unavailability or scarcity of materials shall not constitute a basis for Force Majeure, except in the case of restoration in the event of a fire or other casualty affecting the Premises.
36.2. Whenever a period of time is hereby prescribed by the taking of any action by the Tenant (other than the payment of Rent) subsequent to the Commencement Date, Tenant shall not be liable or responsible for, and there shall be excluded from the computation of such period of time, any delays due to Force Majeure. Notwithstanding anything above, in no event shall any Force Majeure limitations excuse the Tenant from the obligation to promptly pay Rent as and when due hereunder.
37. HAZARDOUS MATERIALS.
37.1. Tenant shall not at any time use or permit the use of any portion of the Premises, or the land beneath any of them, for use in violation of any governmental laws, ordinances, regulations, or orders concerning Hazardous Materials and other environmental conditions, including, but not limited to, asbestos, soil, and ground water conditions. Tenant
shall not allow the storage or use of such Hazardous Materials in any manner
not sanctioned by law or by the highest standards prevailing in the industry
for the storage and use of such Hazardous Materials, nor allow to be brought
onto the Premises any such Hazardous Materials except to use in the ordinary
course of Tenant's business, to include ordinary household cleaning and
maintenance products which are used with due care and in accordance with
applicable laws and the instruction of the manufacturer of such products in
the reasonable and prudent conduct of Tenant's business. In addition, Tenant
shall execute affidavits, representations, and the like from time to time at
Landlord's request concerning Tenant's best knowledge and belief regarding
the presence of Hazardous Materials on the Premises. Tenant shall defend,
indemnify and hold Landlord and Landlord's Lender harmless from and against
any and all violations by Tenant or its agents, employees or contractors of
the foregoing provisions (including reasonable attorney's fees) or arising
from any violation of the foregoing covenant and/or existence of Hazardous
Materials that hereinafter become located in, on, or under the Premises,
including, but not limited, to the cost to remediate any such violation and
abate any such Hazardous Materials and any reasonable costs incurred by the
Landlord or Lender for environmental testing, but excluding any such
violation, condition or Hazardous Materials to the extent caused by Landlord
or any third party which is not an employee, agent, contractor, customer or
otherwise affiliated with the Tenant. The foregoing indemnification by
Tenant shall survive the expiration or earlier termination of this Lease.
"Hazardous Materials" shall include, but not be limited to, substances
requiring investigation, removal or remediation under any federal, state or
local statute, regulation ordinance or policy including substances defined
as "hazardous substances" or "toxic substances" in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended,
42 U.S.C., Section 1802, the Resource Conservation Recovery Act, 42 U.S.C.,
Section 6901, et seq. or those substances defined as "hazardous waste" in
applicable codes of Missouri and in the regulations adopted and publications
promulgated for such codes.
37.2. Landlord represents and warrants to the Tenant that to the best of Landlord's knowledge, there are no Hazardous Materials in, on or under the Premises in violation of applicable law. The Landlord has not and shall not use the Premises in violation of any governmental laws, ordinances, regulations or orders concerning Hazardous Materials and other environmental conditions. The Landlord shall defend and hold Tenant, its officers, employees, agents, contractors and lenders harmless from and against any and all violations or breaches of the foregoing warranty and covenant (including reasonable attorneys' fees) and the existence of Hazardous Materials that hereafter become located in, on or under the Premises as a result of the action of the Landlord or its agents or employees, including, but not limited to, the cost to remedy any such violations and abate any such Hazardous Materials, but excluding any such violation or condition or Hazardous Materials to the extent caused by Tenant or any other third party which is not an agent, contractor, employee, customer or otherwise affiliated with the Landlord. The foregoing indemnification by the Landlord shall survive the expiration or earlier termination of this Lease.
37.3. In the event that any third party, which is not an employee, agent, contractor or otherwise affiliated with either the Tenant or the Landlord, causes any release of
Hazardous Materials onto the Premises subsequent to the Commencement Date, the Landlord shall be responsible for promptly resolving such release, which may include in Landlord's reasonable discretion, a clean-up of such release and/or the pursuit of legal action against such third party which would cause such third party to promptly remediate such release. The parties agree that a rider or endorsement shall be added to the Liability Policy providing for insurance coverage with respect to any clean-up of the Premises as a result of the release of Hazardous Materials within the Premises protecting the interests of the Landlord, the Tenant and all Lenders.
38. EFFECT OF DELIVERY OF THIS LEASE. Landlord has delivered a copy of this Lease to Tenant for Tenant's review only, and the delivery hereof does not constitute an offer to Tenant or an option to Lease. This Lease shall not be effective until a copy executed by both Landlord and Tenant is delivered to and accepted by Landlord.
39. SECTION HEADINGS. The section or subsection headings are used for convenience of reference only and do not define, limit or expand the scope or intent of the sections.
Exhibit Number Description -------------- ----------- Exhibit A Work Letter --------- Exhibit A-1 Core and Shell Plans ----------- Exhibit A-2 Core and Shell Plan Modifications ----------- Exhibit A-3 Tenant Work Allocation ----------- Exhibit A-4 Construction Schedule ----------- Exhibit A-5 Exterior Signs ----------- Exhibit A-6 Intentionally Deleted ----------- Exhibit A-7 Tenant Work Schedule ----------- Exhibit B Legal Description of Office Center --------- Exhibit B-1 Site Plan of Lot 1 ----------- Exhibit C Declaration of Lease Commencement --------- Exhibit D Insurance Standards --------- |
42. VENDING RIGHTS. The Tenant shall retain exclusive rights to provide all vending services within the Premises provided that upon written request of the Landlord, from time to time, the Tenant shall notify the Landlord of any person or entity providing vending services to the Premises.
43. NAMING OF BUILDING. The Tenant shall have the right to name the Building after itself.
44. OPTION TO PURCHASE. Simultaneous with the execution of this Lease, the Landlord and Tenant have entered into an Option and First Offer Agreement ("Building III Option") pursuant to which the Landlord has granted to the Tenant the option to purchase the Premises, as well as a right of first offer to purchase the Premises, as more particularly set forth therein.
45. OPTION TO PURCHASE, RIGHT OF FIRST OFFER AND LEASE OPTION FOR BUILDINGS I AND II.
45.1. Simultaneous with the execution of this Lease, the Tenant and the Adjacent Property Owner have entered into an Option and First Offer Agreement pursuant to which the Adjacent Property Owner grants to the Tenant certain option and first offer rights with respect to Buildings I and II, as more particularly set forth therein.
45.2. Simultaneous with the execution of this Agreement, the Adjacent Property Owner and the Tenant have executed an Option to Lease Agreement for Buildings I and II, pursuant to which the Adjacent Property Owner has granted to the Tenant certain rights to lease portions of Buildings I and II as more particularly set forth therein.
46. NO ESTATE IN LAND. This Lease shall create the relationship of landlord and tenant between Landlord and Tenant and no estate (other than this leasehold) shall pass out of Landlord.
47. ARBITRATION. All disputes between Landlord and Tenant relating to or arising under this Lease shall be resolved by the submission of such disputes to binding arbitration as provided herein ("Arbitration").
47.1. All Arbitrations shall be conducted in St. Louis County, Missouri, or at another location mutually approved by the parties in writing, pursuant to the Commercial Arbitration Rules of the American Arbitration Association ("AAA"), except as may be herein provided. All Arbitration proceedings shall be undertaken pursuant to the Federal Arbitration Act, 9 U.S.C. Sections 1-16, where applicable, and the award of the arbitrator(s) shall be conformable and enforceable in any court of competent and final jurisdiction. All parties expressly agree to waive their respective rights to appeal from an award of the arbitrator(s) or seek redress in any other court, except as to those grounds set forth in 9 U.S.C. Sections 10, 11 and 16.
47.2. In any dispute where a party seeks $200,000.00 or more in damages or if the dispute involves whether the Landlord or Tenant may terminate the Lease, three (3) arbitrators shall be employed to arbitrate the dispute. In the event the dispute involves less than $200,000.00 or if the dispute does not involve Lease termination issues, there shall be one (1) arbitrator. In the event of any Arbitration or other legal proceeding brought by any party against
the other with regard to any matter arising out of or related to this Lease, each party expressly agrees that the final award rendered by the arbitrator(s) shall also provide for an allocation and division between or among parties to the Arbitration, on a basis which the arbitrator(s) deem just and equitable under the circumstances, of all costs and expenses of the dispute, including, but not limited to, court costs, arbitrator's fees and expenses, AAA fees and expenses, reasonable attorneys' fees and expenses, accountants' and expert witness' fees and expenses, stenographic or reporter expenses, and rental expenses for the premises where the Arbitration is held.
47.3. All disputes shall be determined by the arbitrator(s) in accordance with the substantive law of the State of Missouri, except that the parties expressly agree that the Federal Arbitration Act is applicable and takes precedence over Missouri's Uniform Arbitration Act, Chapter 435, Revised Statutes of the State of Missouri.
47.4. The party desiring Arbitration ("First Party") shall give written notice to that effect to the other party ("Second Party"), and shall also apply to the AAA for the appointment of arbitrator(s) in accordance with the appointment procedures of the Commercial Arbitration Rules of the AAA, and the parties shall proceed in accordance with such rules to designate arbitrator(s). A demand for Arbitration is to be made within a reasonable time after the claim or controversy has arisen, but in no event later than the date when institution of legal or equitable proceedings based on such claim or controversy would be barred under the applicable statute of limitations under Missouri law.
47.5. Within twenty (20) days after the arbitrator(s) shall have been designated, each party shall submit a written statement stating and explaining such party's position to the other party and to the arbitrator(s) with respect to the subject matter of the Arbitration, together with its arguments in support of its position ("Position Paper").
47.6. The arbitrator(s) shall resolve any discovery disputes by prehearing conferences as may be needed. The parties agree that the arbitrator(s) and any counsel of record to the proceeding shall have power of the subpoena process in aid of Arbitration, as provided by law.
47.7. The arbitrator(s) are directed by this Lease to conduct the Arbitration hearing no later than six (6) months from the service of the statement of claim and demand for Arbitration, unless good cause is shown establishing that the hearing cannot fairly and practically be so conducted.
47.8. Notwithstanding any provision regarding Arbitration as provided herein, the Tenant shall not be permitted to submit any issue to Arbitration regarding the payment of Rent and pursue such issue hereunder unless prior to the submission of such issue to Arbitration, the Tenant first pays to the Landlord all amounts of Rent as are alleged by the Landlord to be then due and owing by the Tenant and continue to pay Rent in such amounts during the entire period of Arbitration, until a final decision is rendered.
48. FINANCING BY TENANT. The Landlord hereby releases any statutory lien that it may have on the furniture, fixtures and equipment owned by the Tenant which may be located from time to time within the Premises and which the Tenant is permitted to remove at the end of the Term of this Lease under the terms hereof. The Tenant may, at its option, grant a security interest in such furniture, fixtures and equipment. The Tenant may also, at its option, grant a deed of trust in its interest as Tenant under this Lease ("Leasehold Deed of Trust"). Upon the written request of the Tenant, the Landlord shall agree to provide written notice of any default hereunder to the beneficiary under any Leasehold Deed of Trust.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease in the County of St. Louis, State of Missouri, the day and year first above written.
THIS LEASE CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
LANDLORD: TENANT:
ECKELKAMP OFFICE CENTER SOUTH, EDWARD D. JONES & CO., L.P.,
L.L.C., A MISSOURI LIMITED LIABILITY A MISSOURI LIMITED PARTNERSHIP
COMPANY
By: Eckelkamp Office Center, Inc., By:
Managing Member ----------------------------------
Name:
--------------------------------
Title:
-------------------------------
By:
-----------------------------
L.B. Eckelkamp, Jr.,
President
|
1. CONSTRUCTION OF PREMISES.
2. APPROVAL RIGHTS AND REVIEW PROCESS.
a. It is the intention of the parties to work together in an expeditious, efficient and good faith manner to satisfy the preparation and approval procedures set
forth herein or to be agreed upon by the parties during the construction phase of the Premises. In any circumstance in which the Landlord or the Tenant is required to review and approve any plans, changes to plans, construction completion or other items or issues in conjunction with the design and completion of construction of the Premises pursuant to this Work Letter, the party whose approval is sought shall not unreasonably withhold, delay or condition its consent to any such request, unless the terms of this Work Letter explicitly impose a different standard of review; provided, however, such approval shall not be required to be given in the event that the approval requested shall require the party whose approval is sought to incur material expense or result in material delay in the performance of the obligations of the parties hereunder.
b. In the event that any party declines a request for approval related to the Premises design or construction, the declining party shall provide written notice to the other party of the reason for such objection and in the event the requesting party disagrees with such reason, the parties shall promptly seek to remedy such objection to the reasonable satisfaction of the Landlord and Tenant. If appropriate, the parties shall engage the services of an architect, contractor or engineer to resolve any disputes involving the Premises construction, design or suitability.
4. CORE AND SHELL CONSTRUCTION. The Landlord agrees that the Core and Shell shall be constructed in accordance with all applicable laws, codes, rules and regulations, including, but not limited to, the local building code, fire and life safety requirements, the ADA and good practices consistent with national standards and all other local laws of St. Louis County in the State of Missouri.
5. IDENTITY/SIGNAGE.
b. Tenant shall be permitted to request installation of architecturally compatible signage on the walls of elevator lobbies and on entrance doors as Tenant Work. The Landlord shall provide for an allowance for interior signage in the Premises of $20,000 (which shall be in addition to the Base TI Allowance). All acquisition and installation costs for initial interior signage above $20,000 shall be paid for from the Base TI Allowance at Tenant's expense. Maintenance, repair, replacement and restoration of such signage shall be included as an Operating Expense under this Lease.
c. The Tenant may, upon the approval of the Landlord, transfer its rights to utilize signs to any assignee or subtenant that is comparable in stature and prestige to those having signage rights in comparable buildings owned by the Landlord or affiliates of the Landlord, or comparable buildings owned by other landlords.
6. DESIGN TEAM AND SUBCONTRACTORS.
a. Landlord and Tenant agree that the design team ("Design Team") for the Tenant Work ("Design Work") shall include:
(1) Arcturis, Inc., as Tenant's architect ("Tenant Architect") to prepare drawings and specifications for the Tenant Work through the customary AIA design development phase;
(2) Sverdrup/CRSS ("Tenant Engineer") to produce engineering and working drawings for each subcontractor;
(3) Bauer Pankey Architects, Inc. ("Architect") to provide assistance and coordination to be sure that the Tenant Work is coordinated with the construction work for the Core and Shell;
The Design Team shall also prepare construction drawings and specifications (to be jointly issued) for bid packages that will be complete and suitable for obtaining competitive open-market bids from Kaiser Electric, Inc., Kyhl Plumbing, Inc., Charles E. Jarrell Contracting, Inc., and Fire Assurance, Inc., and from at least three additional reputable, qualified trade subcontractors who customarily bid and perform such categories of Tenant Work in the St. Louis metropolitan area. The foregoing subcontractors ("Approved Subcontractors") allowed to bid shall be mutually identified and agreed to in advance by Landlord, Tenant and Contractor. The Tenant reserves the right to utilize a subcontractor other than the lowest bidder. The Tenant Architect and the Tenant Engineer shall be engaged under contract with Tenant and paid for from the Base TI Allowance, as an expense of the Tenant Work. The expenses of the Architect with respect to the Tenant Work, shall be paid for by the Landlord.
7. TENANT WORK.
a. The Landlord and Tenant acknowledge and agree that the Landlord shall complete the Core and Shell of the Premises in accordance with the Core and Shell Plans. In addition, the Landlord shall undertake the Tenant Work within the Building as requested by the Tenant in accordance with the procedures set forth below. The Landlord shall provide to the Tenant an allowance of Twenty-Five and 00/100 Dollars ($25.00) per RSF of the Building toward Tenant Work, plus an additional allowance of One and 00/100 Dollars ($1.00) per RSF of the Building for architectural and mechanical review of the construction of the Premises by the Tenant Engineer and the Tenant Architect
("Base TI Allowance"). In the event that the cost of the Tenant Work, as requested by the Tenant, exceeds the Base TI Allowance, the Tenant shall be responsible for payment of such excess sum ("Excess TI Costs").
b. The parties agree that the Tenant may utilize the Base TI Allowance for tenant finish, including, but not limited to, installation of ceiling pads and lighting, furniture (including, but not limited to, work stations), fixtures and equipment and for architects, engineers and other consultants and service providers hired by Tenant in connection with the relocation of Tenant's business to the Premises ("Tenant Work"). Any furniture or trade fixtures purchased by or for Tenant utilizing the Base TI Allowance shall remain the Tenant's property and the Tenant shall have the right to retain and remove such items throughout the Lease Term, so long as no Event of Default is outstanding hereunder.
e. Any private restrooms (including showers) and kitchens included within Tenant Work shall be paid for out of the Base TI Allowance, other restrooms in the Building shall be included in the Core and Shell, as provided in the Core and Shell Plans.
f. The Core and Shell Plans shall include a card reader at six (6) perimeter entrances and exits of the Building. The cost of such card readers shall not be included within the Base TI Allowance provided the cost of any additional security system shall be charged against the Base TI Allowance. The cost of maintaining, operating or replacing the security system within the Premises shall be deemed to be an Operating Expense paid by Tenant under the Lease.
g. The Landlord shall undertake its best efforts to provide that Cybertel will only utilize the roof of the Parking Garage as a "Cell Site" in a manner which will be architecturally harmonious with the design of the Parking Garage (with antenna panels next to the wall surface of the Parking Garage and of the same color as the Parking Garage, if reasonably possible). If Cybertel does utilize a portion of the Parking Garage as a Cell Site under the Cybertel Lease, the Landlord and Tenant shall work together to minimize the interference of the
use and enjoyment of the Premises (including, without limitation, no loss of parking spaces) by and as a result of Cybertel's Cell Site.
h. The Tenant shall have the exclusive right to use the Building roof, shafts, risers, or conduits for the installation and maintenance of conduits, cables, ducts, flues, pipes and other devices for communications, data processing devices, supplementary HVAC, kitchen air supply and exhaust requirements and other facilities consistent with Tenant's use of the Premises. Any such uses shall be subject to the Landlord's prior approval, not to be unreasonably withheld, conditioned or delayed, and applicable codes, ordinances and laws.
i. The Tenant shall have the right to install within the Premises, communications, wiring and cable to provide direct communications with the building currently owned by the Tenant at 12555 Manchester Road, Des Peres, Missouri or other facilities owned or leased by the Tenant. The Tenant shall have the right to install an additional generator or generators, at the Tenant's sole cost and expense, near the location of the life/safety generator located near the Premises as reflected on the Site Plan, provided the installation of such additional generators shall be subject to the consent of the Landlord, which consent shall not be unreasonably withheld.
8. TENANT WORK PLANS.
After establishing the bid process, the modifications to be made to the Construction Contract and a final Construction Schedule for the Tenant Work, the Landlord and Tenant agree that:
(2) Any third party contractor or subcontractor engaged by the Tenant in conjunction with the Tenant Work shall be a member of and/or affiliated with the AFL/CIO Construction Trades.
which will extend the Tenant Work Construction Schedule beyond that reasonably contemplated by the parties and cannot, in the reasonable opinion of the Contractor, be completed within seven (7) months, the Contractor shall promptly notify the Landlord and the Tenant, providing specific reasons why such schedule cannot be met. The Landlord, the Tenant and the Contractor shall promptly meet in order to attempt to reduce the Tenant Work completion time to seven (7) months, or if not, provide for commencement of the Tenant Work and, if required, the Tenant Work Plans (or "Design Work") at an earlier date. If the Tenant desires to implement Tenant Work costing substantially in excess of Fifty and 00/100 Dollars ($50.00) per RSF or unusual items that cannot be completed in the reasonable opinion of the Contractor on a schedule coinciding with the Substantial Completion Date, prior to agreeing to the scope of the Tenant Work, the Landlord and the Tenant shall modify this Lease in order to provide that the Tenant will pay to the Landlord any and all Delay Expenses that may be incurred by the Landlord or the Contractor as a result of such extended Tenant Work completion schedule. This Lease shall also be amended to adjust the Construction Schedule, the proposed Commencement Date, and the dates used for calculation of any Late Delivery Payment, provided, however, that the Tenant shall have no liability to pay for costs or expenses related to extended performance costs not previously agreed to in writing in conjunction with a revised Construction Schedule if the Contractor fails to conform to the new schedule for Tenant Work, after the Contractor has agreed in writing to do so.
9. TENANT WORK CONSTRUCTION AND CHANGE ORDERS.
a. At such time as the Landlord and the Tenant have agreed on the scope of the Tenant Work, the parties shall execute an amendment of this Lease incorporating the Tenant Work Plans into this Lease and confirming the dollar amount of the Excess TI Costs which shall be paid by the Tenant. The Landlord shall also amend its construction contract with the Contractor to provide for the Tenant Work. The Tenant shall pay the Tenant Excess TI Costs (less retained holdbacks provided herein) in periodic installments to the title insurance company or construction Lender disbursing the construction funds in conjunction with the payment of draw requests to the Contractor for the Tenant Work, after such time as the Landlord has disbursed the Base TI Allowance to the Contractor (less the retained holdback share). At such time as Landlord and Tenant have agreed upon the scope of the Tenant Work and subcontractors have been chosen to undertake such work, the Landlord shall diligently pursue to completion the Tenant Work in accordance with the Construction Schedule. The Landlord and the Tenant shall insure that all goods and services contracted to be purchased by the Landlord and/or the Tenant to be included within the scope of the Tenant Work shall be invoiced separately from all the Core and Shell construction costs. The Landlord and
the Tenant shall communicate with each other on a regular basis as to the status of the Tenant Work and the calculation of expenses related thereto. The Landlord and the Tenant shall cooperate and communicate with one another not less than once per month to provide estimates for the costs of the Tenant Work. In conjunction with the design of the Tenant Work, the Landlord shall prepare a budget for the Tenant Work showing the estimated Tenant Work budget and identifying those items that will be paid for directly by the Landlord and those items which will be paid for directly by the Tenant. The Tenant Work budget shall be updated monthly by the Landlord.
b. In the event that the Tenant desires any change order ("Tenant Change Order") to the Core and Shell Plans or the Tenant Work Plans, the Tenant or the Tenant Architect shall notify the Landlord, the Contractor and the Architect in writing describing the desired Tenant Change Order. The Contractor, the Architect and the Tenant Architect shall promptly provide to the Landlord and the Tenant information regarding:
(1) the cost of implementing such Tenant Change Order, if any;
(2) the effect such Tenant Change Order shall have on the Construction Schedule, if any; and
(3) any questions or suggestions regarding implementation or clarification of the Tenant Change Order.
If the Tenant desires to pursue the Tenant Change
Order, Tenant shall promptly notify the Landlord and
the Landlord shall seek approval of its Lender for
such Tenant Change Order, to the extent required by
such Lender. If the Landlord obtains the approval of
its Lender for such Tenant Change Order (if such
approval is required), the Landlord shall promptly
notify the Contractor, the Architect, the Tenant
Architect and the Tenant and the construction contract
shall be modified to effect the Tenant Change Order.
The Tenant agrees that the estimated cost of the
Tenant Change Order shall be paid by the Tenant to the
Landlord or the Landlord's title company within ten
(10) business days, to be utilized for payment for the
costs of such Tenant Change Order ("Tenant Change
Order Cost") or at Tenant's option, said amount shall
be charged against the Base TI Allowance, if not
already expended. The Landlord agrees to provide the
Tenant with copies of any invoices or other materials
reasonably necessary to permit the Tenant to evaluate
the cost of any Tenant Change Order. In the event that
any proposed Tenant Change Order will adversely affect
the Construction Schedule, the Landlord shall notify
the Tenant as to the Delay Expenses anticipated to be
incurred by the Landlord and Contractor, as a result
of such Tenant Change Order with respect to the
construction of the Premises and the Tenant shall also
deposit such sum with the Landlord at the time of the
payment of the
Tenant Change Order Cost, to the extent that such Tenant Change Order Cost will cause the cost of the Tenant Work to exceed the sum of the Base TI Allowance. The parties agree to cooperate with one another in order to implement any and all Tenant Change Orders, but in no event shall any Tenant Change Order result in any increased cost or financial loss to the Landlord.
C. (i) In the event that the Landlord desires to make any change order to the Core and Shell Plans ("Landlord Change Order"), the Landlord shall notify the Tenant in writing (which may include communication by facsimile) describing the desired Landlord Change Order the Tenant agrees to notify the Landlord by telephone and/or facsimile giving the Tenant's approval or stating Tenant's objections, in the event that the Tenant objects to any requested Landlord Change Order because it will unacceptably (x) alter the exterior appearance of the Building, or (y) change the RSF or floor plate of the Building, no later than three (3) business days after receipt of such proposed Landlord Change Order. In the event that the Landlord notifies the Tenant that such Change Order must be approved on an expedited basis, the Tenant agrees to undertake its best efforts to review such proposed Landlord Change Order as soon as possible and respond to the Landlord by telephone and/or facsimile confirming whether or not said proposed Change Order is approved.
(ii) In the event that the Tenant has not responded to the Landlord within three (3) business days after receipt of a non-expedited Landlord Change Order, the Tenant shall be deemed to have waived its right to object. In the event that the Tenant objects to any proposed Landlord Change Order, the parties shall immediately enter into discussions with the Contractor and the Architect to review the requested Landlord Change Order and determine what, if any, modification can be made to the Landlord Change Order to remedy Tenant's objection and so as not to delay the Substantial Completion of any portion of the Premises.
10. CONSTRUCTION SCHEDULE. The Landlord and Tenant shall endeavor to perform their obligations under the Construction Schedule to avoid any delay in the completion of the Tenant Work or the Core and Shell. In the event that the Tenant fails to meet its obligations under this Construction Schedule for the design of the Tenant Work, the Tenant shall reimburse the Landlord for any and all costs and expenses incurred as a result of such failure. The parties acknowledge and agree that it is critical for each of the parties to endeavor to perform their obligations in a timely manner so that the Construction Schedule for the Premises can be met.
11. REIMBURSEMENT FOR TENANT WORK.
b. Upon the completion of the Tenant Work and the payment of all outstanding invoices therefor, but in no event later than ninety (90) days after the Commencement Date, the Landlord shall provide to the Tenant a full accounting of all of the costs and expenses incurred by the Landlord and the Tenant for the Tenant Work ("Accounting"). In the event that the sum paid by the Landlord for the Tenant Work (less any sums previously reimbursed by the Tenant to the Landlord) exceeds the Base TI Allowance, plus Excess TI Costs paid by the Tenant, the Tenant shall pay such sum to the Landlord within thirty (30) days after receipt of the Accounting. In the event that the sum paid by the Landlord for the Tenant Work (less any sums previously reimbursed by Tenant to the Landlord) is less than the Base TI Allowance, plus Excess TI Costs paid by the Tenant, the Landlord shall forward payment of such difference to the Tenant along with the Accounting. In the event that the Tenant disputes any portions of the Accounting, the Landlord and the Tenant agree to negotiate in good faith to resolve any disputes and make any appropriate adjustments in the payments. In the event that the Tenant seeks credit or reimbursement for costs or expenses incurred directly by the Tenant toward the Base TI Allowance, the Tenant shall provide to the Landlord a
written description of the expense reimbursement requested, a copy of the invoice from the contractor or supplier to whom such cost was paid, and evidence of payment within thirty (30) days after the Commencement Date.
c. The Tenant agrees to indemnify and hold the Landlord harmless from any and all costs and expenses incurred by the Landlord as a result of any Tenant Work undertaken by the Tenant for which Tenant is liable for payment. In the event that any mechanic's lien is filed against the Landlord or the Premises as a result of Tenant Work undertaken by the Tenant, the Tenant shall provide reasonable assurances to the Landlord, Landlord's Lender and the Landlord's title insurance company so that the title insurance company will provide title insurance coverage to the Landlord and the Lender over such mechanic's lien.
12. ADDITIONAL PAYMENTS BY TENANT. All sums for Tenant Work to be paid by the Tenant to the Landlord hereunder shall be deemed to be Additional Rent hereunder.
13. ACCESS TO AND INSPECTION OF THE PREMISES. The Tenant, the Tenant Architect and the Tenant's consultants shall have access to the Premises for the purposes of inspecting the construction of the Premises, during the construction of the Core and Shell and Tenant Work, subject to coordinating with the Contractor, and the Landlord, abiding by all appropriate safety rules and regulations established by the Landlord and Contractor, and so as not to unreasonably delay or interfere with construction. The Tenant shall provide to the Landlord certificates of insurance for any third party consultants of the Tenant naming the Landlord and Landlord's Lender as additional insureds on the liability policies, prior to entering upon the Premises. In the event that the Tenant identifies any portion of the construction which the Tenant believes is not substantially in compliance with the approved Core and Shell Plans or Tenant Work Plans, the Tenant shall promptly notify the Landlord of such objection and the parties shall work in good faith to promptly resolve such noncompliant work. The Landlord acknowledges and agrees that the Tenant Architect shall have the primary inspection role with respect to the Tenant Work.
14. COMPLETION OF TENANT WORK. Thirty (30) days prior to the anticipated date of the completion of Tenant Work for each floor of the Building, the Landlord shall notify the Tenant and establish a procedure for review and inspection of the Tenant Work on such floor. The Landlord and the Tenant shall establish inspection procedures pursuant to which the Tenant shall review the status of the Tenant Work on such floor and the parties shall prepare a Punch-List for the Tenant Work, for the items to be finished after the Architect and the Tenant Architect certify that a floor is Substantially Completed ("Punch-List"). The Landlord and the Tenant shall coordinate the completion of any Tenant Work on each floor of the Building in a manner to expedite the Substantial Completion of the Building. Subsequent to the preparation of the Punch-List, the Landlord and the Contractor shall diligently pursue the completion of all Punch-List items to the reasonable satisfaction of the Tenant. A floor of the Building, or the Premises as a whole, shall be "Substantially Complete" on such date as the Architect and the Tenant Architect have delivered to the Landlord and the Tenant a certificate
confirming that such floor is, or the Premises as a whole, are Substantially Complete in accordance with the Core and Shell Plans and Tenant Work Plans and are suitable for occupancy by the Tenant (subject to Punch-List items). The foregoing, to the contrary, notwithstanding, the Tenant may elect initially to complete Tenant Work only on certain selected floors of the Building, in which event when all of the floors so selected by the Tenant for Tenant Work have been Substantially Completed, and whatever Tenant Work is, at a minimum, required for the other floors of the Building to meet building and fire code requirements so as to enable the Tenant to occupy said selected floors is completed, then the Commencement Date shall occur as contemplated by this Lease. Notwithstanding anything else herein contained to the contrary, the Landlord acknowledges that it shall not be permitted to require the Tenant to pay partial Rent based on the Substantial Completion of merely a portion of the floors of the Building.
15. MOVE IN. In the event that the Tenant obtains access to the Premises to make them ready for its occupancy pursuant to the Advance Occupancy provisions of this Lease, the Tenant acknowledges that if it utilizes contractors or movers not affiliated with the AFL/CIO, such use may result in strikes or other work stoppages. The Tenant agrees to work closely with the Contractor and the Landlord to avoid any such strike or work stoppage, provided that if any strike or work stoppage does occur because of the Tenant's use of non-AFL/CIO contractors or movers, the Tenant agrees to indemnify and reimburse the Landlord and the Contractor for any and all costs and expenses resulting from any such strike or work stoppage, including, but not limited to, costs related to delays in the Construction Schedule, increased costs of construction of the Premises, construction period interest or related loan costs, Taxes, utilities, loss or delay of Rent payments and similar costs.
17. SETTLEMENT AGREEMENT. The Landlord agrees that the Premises, as initially constructed, shall be in compliance with the settlement agreement dated November 9, 1987 and recorded in Book 8238, page 974 in the Office of the Recorder of Deeds for the County of St. Louis.
CORE AND SHELL PLANS
A1-1
CORE AND SHELL PLAN MODIFICATIONS
A2-1
TENANT WORK ALLOCATION
ITEM SHELL T-I
ARCHITECTURAL
-------------
Core wall drywall (taped and sanded) on tenant side X
Shaft wall drywall (taped and sanded) on tenant side X
Column drywall taped and sanded X
Straight through ceiling grid @ 9'-0" (Grid upgrade = T.I.) X X
Preselected ceiling pads on floor (Ceiling upgrade = T.I.) X X
Inside face drywall at perimeter walls, except at rated columns X
Bathroom ceiling, floors and walls (w/material selections) X
Exit and Feature stairs (w/material selections) X
Elevator cabs (w/material selections) X
Elevator lobby ceiling, floors and walls (w/material selections) X
Entry lobby floors, walls and ceilings X
2nd floor Atrium walls X
2nd floor balcony rail X
Lower level exit corridors, lobby and garage tunnel link X
Lower level mechanical, electrical, life safety, generator and fire pump X
Lower level receiving, housekeeping and maintenance X
Lower level offices, dining, kitchen, mail and supply rooms X
Core signage (in owner soft cost budget, see lease) X
Building signage (in owner soft cost, shown on civil plans, see lease) X
Window blinds X
Electrical room with sleeves for telephone/cable and janitor closet X
Tenant drywall partitions X
Tenant doors, building standard, full height, solid core, frames and hardware X
HVAC
----
Main supply trunk lines in plenum X
Final Supply diffuser location X
Thermostat zone controls (Per shell drawings) X
Additional zones and controls X
Tenant specific HVAC for computer rooms X
ELECTRICAL
----------
Service to the building X
Distribution from the main service to the floors X
Floor distribution to tenant areas X
A3-1
|
ITEM SHELL T-I 2x4 parabolic fixtures @ 1/80 sf stored in warehouse (upgrade-=T.I.) X X 2x4 parabolic fixtures beyond 1/80 sf and installation of all X Exit signs, emergency lighting and strobes, core areas only X Emergency generator for life safety only (BOCA 1996) X Emergency power for tenant X PLUMBING -------- Wet columns as shown on Kyhl Co. plumbing plans X Tenant lunch rooms, private toilets and showers X Kitchen plumbing including grease trap and fixture hookup X FIRE PROTECTION --------------- Water service, fire pump, sprinkler mains and branches in plenum X Open area head distribution X Sprinkler heads moved to non-open area tenant plan locations X Fire hydrants, fire dept connections, fire alarm system (BOCA 1996) X SECURITY -------- Card readers (6 perimeter exterior doors) X Sleeves in the core from the main service to the floors X Service and equipment to the building and/or garage, with floor distribution X |
A3-2
CONSTRUCTION SCHEDULE
A4-1
TO FOLLOW
A6-1
TENANT WORK DESIGN AND SCHEDULE
Tenant Work Design shall consist of three items:
1. SCHEMATIC DESIGN DRAWINGS
a. CADD drawings depicting the following items:
1. Blocking and stacking layouts of departments within
the building.
2. Blocking and stacking layouts of departments on each
floor.
3. Floor plan layouts of all walls, rooms and doors.
4. Workstation standards and layout.
5. Notation and labeling of all areas.
2. DESIGN DEVELOPMENT DRAWINGS (refinement of Schematic Design Drawings)
a. CADD drawings depicting the following items:
1. Refined floor plan layouts of walls, rooms and doors.
2. Reflected ceiling plans of all floors.
3. Detailed room requirements (lighting, power, HVAC,
plumbing, data, security, office equipment,
built-ins, other custom items).
4. Kitchen/Cafeteria layout and detailed requirements
(per #3 above).
5. Material specifications, color selections and
schedules.
3. CONSTRUCTION DRAWINGS
a. CADD drawings depicting the following items:
1. Code review information
2. Construction details, schedules and specifications
3. Mechanical, electrical, plumbing and fire protection
drawings
4. All final material and equipment selections
SCHEDULE
ITEM COMPLETION DATE
a. Preparation of Schematic Design Drawings by Tenant June 1, 2000
Architect per Item #1.
b. Architect review of Schematic Design Drawings and June 15, 2000 feedback to Tenant.
A7-1
c. Completion of Design Development Drawings by Tenant August 1, 2000 Architect per Item #2.
d. Architect review of Design Development Drawings and August 15, 2000 feedback to Tenant.
e. Tenant Architect and Design Team completion of October 1, 2000 Construction Drawings.
f. Architect's review of Tenant Architect's Construction October 15, 2000 Drawings prior to final bid issue. Architect to provide Tenant Architect with specific corrections in writing.
g. Tenant Architect and Design Team completion of November 30, 2000 Construction Drawings incorporating Architect's comments from Item f.
h. Landlord and Contractor bid the Tenant Construction January 15, 2001 Drawings.
i. Tenant and Landlord review and approve final plans and February 28, 2001 pricing based on results of item h.
j. Obtain permits from St. Louis County and West County May 15, 2001 EMS for Tenant Work to be undertaken by Contractor and Landlord.
k. Commence construction of Tenant Work by Contractor June 1, 2001 promptly after obtaining permits pursuant to Item j.
A7-2
The land upon which the Office Center is situated is described as Manchester/270 Office Center, according to the plat thereof recorded in Plat Book 281, page 35 of the St. Louis County Records.
B1-1
WHEREAS, Landlord and Tenant wish to confirm the Commencement Date and the expiration date of the Initial Term of the Lease, and the date upon which the payments of full Rent for the Lease and use of the Premises shall commence;
All other terms and conditions of said Lease and any modifications thereof shall remain unchanged.
IN WITNESS WHEREOF, the parties hereto have set their hands to this instrument as of the day and date first above written.
LANDLORD: TENANT:
ECKELKAMP OFFICE CENTER SOUTH, EDWARD D. JONES & CO., L.P.,
L.L.C., A MISSOURI LIMITED LIABILITY A MISSOURI LIMITED PARTNERSHIP
COMPANY
By: Eckelkamp Office Center, Inc., By:
Managing Member ---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
------------------------------
L.B. Eckelkamp, Jr.,
President
|
I. PROPERTY INSURANCE* - All Risk, including Flood (backup of sewers and
drains) and Earthquake (subsidence and
earth movement)
A. Building Limit** $37,500,000.
------------
B. Rents Limit*** $ 6,258,711.($4,633,711 Base rental yr.1+$1,625,000 OE)
------------
C. Extra Expense $ -0-
|
1. Property Deductible/Rents
2. Flood Deductible
3. Earthquake Deductible
II. GENERAL LIABILITY:*
General Aggregate Limit: $1,000,000.
-----------
Products/Completed operations
Aggregate Limit: $1,000,000.
-----------
Each Occurrence Limit: $1,000,000.
-----------
Personal & Advertising
Injury Limit: $1,000,000.
-----------
Medical Expense: $ 10,000.
-----------
|
*Form should include a Commercial General Liability Form similar coverages outlined in the Kemper Broadening Liability Endorsement
III. UMBRELLA:*
Limit of Liability $50,000,000. Each Occurrence
------------
$50,000,000. General Aggregate
------------
$50,000,000. Products/Completed
------------ Operations Aggregate
|
*See Sec.10.2
*See Sec.37
V. INSURANCE CARRIERS REQUIREMENTS:
All carriers must have a rating of "A-" or better for claims paying
ability assigned by Standard & Poor's Rating Group, or a general
rating of "A-" or better; with a financial class VIII, or greater,
assigned by A.M. Best Company, Inc. meeting the following criteria:
The limit in any one risk is acceptable in an amount up to 10% of the latest Best's Reported Policyholder's Surplus (e.g. if the policyholder's surplus is $200,000,000 only $20,000,000 can be accepted). If coverage is more than the 10% surplus, the policy must be endorsed by a Reinsurance Endorsement by a company meeting these same requirements.
MASTER AGREEMENT
Dated as of November 30, 2000
among
EDWARD D. JONES & CO., L.P.,
as Lessee, Construction Agent and Guarantor,
ATLANTIC FINANCIAL GROUP, LTD.,
(registered to do business in Arizona as AFG Equity, Limited Partnership)
as Lessor,
SUNTRUST BANK AND
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders,
and
SUNTRUST BANK,
as Agent
and joined in by
THE JONES FINANCIAL COMPANIES, L.L.L.P.
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I DEFINITIONS; INTERPRETATION.......................................................................1
ARTICLE II ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS; NATURE OF TRANSACTION.............................2
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease..............................................2
SECTION 2.2 Fundings of Purchase Price, Development Costs and Construction Costs.........................2
SECTION 2.3 Funded Amounts and Interest and Yield Thereon; Facility Fee..................................5
SECTION 2.4 Nature of Transaction........................................................................6
SECTION 2.5 Amounts Due Under Lease......................................................................6
ARTICLE III CONDITIONS PRECEDENT; DOCUMENTS.................................................................7
SECTION 3.1 Conditions to the Obligations of the Funding Parties on the Closing Date.....................7
SECTION 3.2 Additional Conditions for the Closing Date..................................................11
SECTION 3.3 Conditions to the Obligations of Lessee.....................................................14
SECTION 3.4 Conditions to the Obligations of the Funding Parties on each Funding Date...................14
SECTION 3.5 Completion Date Conditions..................................................................15
ARTICLE IV REPRESENTATIONS.................................................................................17
SECTION 4.1 Representations of Lessee...................................................................17
SECTION 4.2 Survival of Representations and Effect of Fundings..........................................31
SECTION 4.3 Representations of the Lessor...............................................................31
SECTION 4.4 Representations of each Lender..............................................................33
ARTICLE V COVENANTS OF LESSEE, JFC AND LESSOR..............................................................34
SECTION 5.1 Affirmative Covenants.......................................................................34
SECTION 5.2 Additional Covenants........................................................................45
SECTION 5.3 Further Assurances..........................................................................53
SECTION 5.4 Additional Required Appraisals..............................................................54
SECTION 5.5 Lessor's Covenants..........................................................................54
ARTICLE VI TRANSFERS BY LESSOR AND LENDERS.................................................................55
SECTION 6.1 Lessor Transfers............................................................................55
SECTION 6.2 Lender Transfers............................................................................55
ARTICLE VII INDEMNIFICATION................................................................................57
SECTION 7.1 General Indemnification.....................................................................57
SECTION 7.2 Environmental Indemnity.....................................................................59
|
SECTION 7.3 Proceedings in Respect of Claims............................................................60
SECTION 7.4 General Tax Indemnity.......................................................................62
SECTION 7.5 Increased Costs, etc........................................................................68
SECTION 7.6 End of Term Indemnity.......................................................................72
ARTICLE VIII MISCELLANEOUS.................................................................................73
SECTION 8.1 Survival of Agreements.....................................................................73
SECTION 8.2 Notices....................................................................................74
SECTION 8.3 Counterparts...............................................................................74
SECTION 8.4 Amendments.................................................................................74
SECTION 8.5 Headings, etc..............................................................................75
SECTION 8.6 Parties in Interest........................................................................75
SECTION 8.7 GOVERNING LAW..............................................................................76
SECTION 8.8 Expenses...................................................................................76
SECTION 8.9 Severability...............................................................................76
SECTION 8.10 Liabilities of the Funding Parties.........................................................76
SECTION 8.11 Submission to Jurisdiction; Waivers........................................................76
SECTION 8.12 Liabilities of the Agent...................................................................77
SECTION 8.13 Role of SunTrust Equitable Securities Corporation..........................................77
APPENDIX A Definitions and Interpretation
SCHEDULES
SCHEDULE 2.2 Amount of Each Funding Party's Commitment
SCHEDULE 4.1(a)(i) Indebtedness of Lessee
SCHEDULE 4.1(a)(ii) Subsidiaries
SCHEDULE 4.1(d)(v) Pending Investigations or Inquiries
SCHEDULE 4.1(m) Environmental Matters
SCHEDULE 4.1(u)(i) Leases
SCHEDULE 5.2(a)(i) Existing Permitted Liens
SCHEDULE 5.2(a)(xiv) Existing Options, Etc.
SCHEDULE 5.2(d) Contingent Obligations
SCHEDULE 8.2 Addresses for Notices
EXHIBITS
EXHIBIT A Form of Funding Request
-ii-
|
EXHIBIT B Form of Assignment of Lease and Rents EXHIBIT C Form of Security Agreement and Assignment EXHIBIT D-1 Form of Mortgage EXHIBIT D-2 Form of Deed of Trust EXHIBIT E [Reserved] EXHIBIT F Form of Assignment and Acceptance Agreement EXHIBIT G-1 Form of Opinion of Counsel to Lessee and Guarantor EXHIBIT G-2 Form of Opinion of Local Counsel EXHIBIT G-3 Form of Opinion of Counsel to Lessor EXHIBIT H Form of Certification of Construction Completion EXHIBIT I Form of Payment Date Notice EXHIBIT J Form of Compliance Certificate |
MASTER AGREEMENT
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Master
Agreement, the Lease, the Loan Agreement and the other Operative Documents,
(i) the Lessor has acquired a leasehold interest in the Land identified by
the Lessee pursuant to the Bridge Lease and is leasing such Land to the
Lessee, (ii) the Lessor and the Lessee desire to restate and amend the
Bridge Lease pursuant to which the Lessee will lease the Leased Property
from the Lessor, (iii) the Lessee, as Construction Agent for the Lessor,
wishes to construct and equip the Building on the Land for the Lessor and,
when completed, the Lessee wishes to lease such Buildings from the Lessor as
part of the Leased Property under the Lease, (iv) the Lessee, as agent,
wishes to obtain, and the Lessor is willing to provide, funding to finance
the construction and equipping of the Building, and (v) the Lessor wishes to
obtain, and the Lenders are willing to provide, from time to time, financing
of the construction and equipping of the Building.
In consideration of the mutual agreements contained in this Master Agreement 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
ARTICLE II
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
(b) Each Lender's Funded Amount outstanding from time to time shall accrue interest as provided in the Loan Agreement.
(c) During the Construction Term, in lieu of the payment of accrued interest, on each Payment Date, each Lender's Funded Amount in respect of the Construction Land Interest shall automatically be increased by the amount of interest accrued and unpaid on the Loans pursuant to the Loan Agreement during the Rent Period ending immediately prior to such Payment Date (except to the extent that at any time such increase would cause such Lender's Funded Amount to exceed such Lender's Commitment, in which event the Lessee shall pay such excess amount to such Lender in immediately available funds on such Payment Date). Similarly, in lieu of the payment of accrued Yield, on each Payment Date, the Lessor's Invested Amount in respect of the Construction Land Interest shall automatically be increased by the amount of Yield accrued on the Lessor's Invested Amount in respect of the Leased Property during the Rent Period ending immediately prior to such Payment Date (except to the extent that at any time such increase would cause the Lessor's Invested Amount to exceed the Lessor's Commitment, in which event the Lessee shall pay such excess amount to the Lessor in immediately available funds on such Payment Date). Such increases in Funded Amounts shall occur without any disbursement of funds by the Funding Parties.
(e) The Lessee hereby agrees to pay to each Funding Party a facility fee for each day from the Closing Date until the Lease Termination Date equal to (i) 0.125% per annum
times (ii) the amount of such Funding Party's Commitment on such day, times
(iii) 1/360. Such facility fee shall be payable in arrears on each Quarterly
Payment Date.
ARTICLE III
CONDITIONS PRECEDENT; DOCUMENTS
"Vendor"), as applicable, and complete copies of the Construction Contract, the Architect's Agreement, any agreement related to the acquisition and/or installation of the Equipment certified by the Construction Agent and all other Construction Documents and payment and performance bonds, shall have been delivered to the Lessor and the Agent.
thereon. Such Appraisal must show that the "as vacant" value of the Leased Property determined as if the Building had already been completed and Equipment installed in accordance with the Plans and Specifications and by excluding from such value the amount of assessments on the Leased Property) is at least 45% of the total cost of the Leased Property, including the trade fixtures, equipment and personal property utilized in connection with the Leased Property and all other costs to be funded by the Funding Parties.
effect with respect to it; and (D) no event that could reasonably be expected to have a Material Adverse Effect has occurred since June 30, 2000.
within thirty (30) days prior to the Closing Date by the Secretary
of State of the state of its incorporation and (D) its by-laws; and
(z) good standing certificates for the Lessee's General Partner
dated within thirty (30) days prior to the Closing Date from the
appropriate offices of the State of incorporation and principal
place of business of the Lessee's General Partner. Each of the
Agent and the Lessor shall have received (w) a certificate of JFC's
Managing Partner attaching and certifying as of the Closing Date,
as to (A) the resolution or consent of the limited partners of JFC,
if and to the extent (if any) required by JFC's Partnership
Agreement, duly authorizing the execution, delivery and performance
by JFC of each Operative Document to which it is or will be a
party, (B) JFC's Partnership Agreement as in effect as of the
Closing Date (which includes all amendments thereto) and (C) JFC's
partnership certificate, as in effect as of the Closing Date (which
includes all amendments thereto), certified within thirty (30) days
prior to the Closing Date by the Secretary of State of the state of
its organization; (x) good standing certificates for JFC dated
within thirty (30) days prior to the Closing Date from the
appropriate offices of the State of JFC's organization and
principal place of business; (y) a certificate of the Managing
Partner of JFC, attaching and certifying as of the Closing Date as
to the incumbency and signatures of persons authorized to execute
and deliver such documents on its behalf.
performance by Lessor of each Operative Document to which it is or will be a party, (B) the Lessor's Partnership Agreement and all amendments thereto, (C) the Lessor's partnership certificate and all amendments thereto, certified as of a recent date by the Secretary of State of the state of its organization, (x) good standing certificates for the Lessor on the Closing Date from the appropriate offices of the State of the Lessor's organization and principal place of business, (y) a certificate of the Secretary or an Assistant Secretary of the Lessor's General Partner on the Closing Date, attaching and certifying as to (A) the Board of Directors' (or appropriate committee's) resolution duly authorizing the execution, delivery and performance by it, as general partner of the Lessor, of each Operative Document to which the Lessor is or will be a party, (B) the incumbency and signatures of persons authorized to execute and deliver such documents on its behalf, (C) its articles or certificate of incorporation, certified as of a recent date by the Secretary of State of the state of its incorporation and (D) its by-laws, and (z) good standing certificates for the Lessor's General Partner on the Closing Date from the appropriate offices of the State of incorporation and principal place of business of the Lessor's General Partner.
the Leased Property is ready for occupancy, (ii) such Plans and Specifications comply in all material respects with all Applicable Laws in effect at such time, and (iii) to the best of the Architect's knowledge, the Leased Property, as so completed, complies in all material respects with all Applicable Laws in effect at such time. The Construction Agent shall also deliver to the Agent true and complete copies of: (A) an "as built" or "record" set of the Plans and Specifications, (B) a plat of survey of the Leased Property "as built" to a standard reasonably acceptable to the Agent showing all easements, paving, driveways, fences and exterior improvements, and (C) copies of a certificate or certificates of occupancy for the Leased Property or other legally equivalent permission to occupy the Leased Property.
(i) all amounts owing to third parties for the Construction have been paid in full (other than contingent obligations for which the Construction Agent has made adequate reserves), and no litigation or proceedings are pending, or, to the best of the Construction Agent's knowledge, are threatened, against the Leased Property, the Construction Agent or the Lessee which could reasonably be expected to have a Material Adverse Effect;
(ii) all material consents, licenses and permits and other governmental authorizations or approvals required for such Construction and operation of the Leased Property have been obtained and are in full force and effect;
(iii) the Leased Property has available all services of public facilities and other utilities necessary for the use and operation of the Leased Property for its intended purposes including, without limitation, adequate water, gas and electrical supply, storm and sanitary sewerage facilities, telephone, other required public utilities and means of access between the Building and public highways for pedestrians and motor vehicles;
(iv) all material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of the Leased
Property as the Lessee intends to use the Leased Property under the Lease and which are necessary to permit the lawful intended use and operation of all then intended utilities, driveways, roads and other means of egress and ingress to and from the same have been obtained and are in full force and effect and neither the Construction Agent nor the Lessee has any knowledge of any pending modification or cancellation of any of the same, and the use of the Leased Property does not depend on any variance, special exception or other municipal approval, permit or consent that has not been obtained and is in full force and effect for its continuing legal use;
(vi) to the best of the Construction Agent's knowledge, the Leased Property is in compliance in all material respects with all applicable zoning laws and regulations.
ARTICLE IV
REPRESENTATIONS
governmental licenses, authorizations, consents and approvals, to own and operate its assets and property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged or proposes to be engaged, and (z) is duly qualified as a foreign corporation or partnership and in good standing (A) in the jurisdiction in which the Leased Property is located and (B) under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business or nature of its activities requires such qualification. All of the issued and outstanding general or limited partnership interests, or capital stock, as the case may be, of the Lessee, the Lessee's General Partner and each Subsidiary is validly issued and outstanding, is fully paid and nonassessable and is owned, beneficially and of record, in the case of stock, by the Lessee or another Subsidiary, and in the case of general or limited partnership interests in the Lessee, by the Lessee's General Partner and the limited partners of the Lessee, free of any Lien, option, claim, warrant or rights of others. All of the issued and outstanding are partnership interests of JFC are validly issued and outstanding, are fully paid and nonassessable and are owned beneficially and of record, by JFC's partners, free of any Lien, option, claim, warrant or rights of others.
(i) There are no actions, suits, proceedings, claims or disputes pending or, to the best knowledge of the Lessee and JFC (after due inquiry), threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, arbitrator or Business Association, against the Lessee, JFC or its or their Subsidiaries or any of their respective properties, individually or in the aggregate:
(x) which purport to affect or pertain to this Master Agreement or any other Operative Document, or any of the transactions contemplated hereby or thereby; or
(y) as to which there exists a reasonable possibility of an adverse determination against any of them or, which determination could reasonably be expected to have a Material Adverse Effect.
(ii) No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Master Agreement or any other Operative Document, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.
(iii) Any liability that may result from any action at law, suit in equity or other proceeding or investigation (whether or not purportedly on behalf of the Lessee, JFC or any of its or their Subsidiaries) in any court or by or before any other Governmental Authority or any arbitrator, or before any Business Association, against or affecting, or that (to the best knowledge of the Lessee and JFC) is threatened against, the Lessee, JFC or any of its or their Subsidiaries or any of their respective properties is adequately reserved against on the books of the Lessee, JFC or such Subsidiary, as the case may be.
(iv) Neither the Lessee, JFC nor any of its or their Subsidiaries is in default in any respect which could individually or in the aggregate have a Material Adverse Effect on the Lessee or JFC with respect to any order, writ, injunction, judgment or decree of any court or other Governmental Authority, or with respect to the award of any arbitrator, or with respect to the order or direction of any Business Association.
upon the Lessee, JFC or any of its or their Subsidiaries or upon any of their respective properties or assets that are due and payable have been paid. No extensions of time for the assessment of deficiencies have been granted by the Lessee, JFC or any of its or their Subsidiaries. There are no Liens on any properties or assets of the Lessee, JFC or any of its or their Subsidiaries imposed or arising as a result of the delinquent payment or nonpayment of any such tax, assessment, fee or other governmental charge. All Federal income tax returns of each of the Lessee and JFC filed for periods ended on or prior to December 31, 1996 have been accepted by the IRS as filed. No Federal income tax and information returns filed by any of the Lessee, JFC or the Subsidiaries of the Lessee or JFC have ever been materially adjusted upon examination by the IRS. The Lessee, JFC and its or their Subsidiaries which are partnerships have filed information returns in those states and local jurisdictions in which they are required to do so, and the Subsidiaries of the Lessee or JFC that are corporations have filed tax returns with respect to state income taxes or state taxes measured by income in those states and local jurisdictions in which they are required to do so. No state information or tax return filed by the Lessee, JFC or any of its or their Subsidiaries has ever been materially adjusted upon examination by any state agency. The charges, accruals and reserves, if any, on the books of the Lessee, JFC and its or their Subsidiaries in respect of Federal and state income taxes for all fiscal periods to date are adequate and neither the Lessee nor JFC knows of any unpaid assessments for additional Federal or state income taxes for any such fiscal period or of any basis therefor. There are no applicable taxes, fees or other governmental charges payable in connection with the execution and delivery of this Master Agreement, the Transaction or any of the other Operative Documents.
(i) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and, to the best knowledge of the Lessee and JFC, nothing has occurred which would cause the loss of such qualification. The Lessee, JFC and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.
(ii) There are no pending or, to the best knowledge of the Lessee and JFC, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect or that would subject the Lessee, JFC or any of its or their Subsidiaries to a tax or penalty on Prohibited Transactions. Neither the Lessee, JFC nor any of its or their Subsidiaries has contributed to any employee pension benefit plan to which an employer other than the Lessee, JFC or one of their Subsidiaries contributed.
(iii) No ERISA Event has occurred or is reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the Lessee, JFC nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability to the PBGC under Title IV of ERISA with respect to any Pension Plan (other than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither the Lessee, JFC nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred which, with the giving of notice under Section 4219 of ERISA, would result in such liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the Lessee, JFC nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Act, any state public utilities code, or any other Federal or state statute or regulation limiting its ability to incur Indebtedness, other than the Net Capital requirements of Section 15 of the Exchange Act. The Lessee and its Subsidiaries are in compliance with the requirements of Rule 206(4)-2 promulgated pursuant to the Investment Advisors Act of 1940.
to, and does, enjoy peaceful and undisturbed possession under all leases to which it is a party or under which it is leasing property. All such leases are valid, subsisting and in full force and effect, none of such leases is in default and no event has occurred and is continuing, and no condition exists, that, after notice or the passage of time or both, could become a default under any such lease.
(i) The on-going operations of the Lessee, JFC and each of their Subsidiaries comply in all material respects with all Environmental Laws.
(iii) None of the Lessee, JFC any of their Subsidiaries or any of their respective present properties or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to (x) any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material or (y) to the extent that it could reasonably be expected to have a Material Adverse Effect, any claim, proceeding or written notice from any Person regarding any Environmental Law, Environmental Claim or Hazardous Material.
(iv) There are no Hazardous Materials or other conditions or circumstances existing with respect to any properties of the Lessee, JFC or any of their Subsidiaries, or arising from operations prior to the Closing Date, of the Lessee, JFC or any of their Subsidiaries that would reasonably be expected to give rise to Environmental Claims which would have a Material Adverse Effect, and there are no Hazardous Materials or other conditions or circumstances existing with respect to the Leased Property that would reasonably be expected to give rise to Environmental Claims. In addition, (A) neither the Lessee, JFC nor any of their Subsidiaries has any underground storage tanks (x) that are not properly registered or permitted under applicable Environmental Laws, (y) that are leaking or disposing of Hazardous Materials off-site, or (z) with respect to the Leased Property, for which the Lessee, JFC or any of their Subsidiaries has not met applicable federal and state financial responsibility requirements, and (B) the Lessee, JFC and their Subsidiaries have met all material notification requirements under applicable Environmental Laws.
no significant unfair labor practice complaint is pending against the Lessee, JFC or any of their Subsidiaries or, to the best knowledge of the Lessee and JFC, threatened against any of them before any Governmental Authority.
(ii) Any and all liabilities of the Lessee and JFC that
could reasonably be expected to arise out of, or in relation to,
the Lessee's or JFC's ownership, directly or indirectly, of any
interest or interests in limited partnerships or other entities
(including any Affiliates or Subsidiaries of the Lessee or JFC)
under any circumstances, in the aggregate, would not exceed
$15,000,000. All such interests owned by the Lessee or JFC in such
entities are owned indirectly by it, through a series of affiliated
entities, including at least one corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, which corporation is adequately
capitalized and as to which all corporate formalities have been
observed. The corporate integrity of any such corporation has never
been questioned or threatened, nor does there exist any basis for
such a question or threat. Neither the Lessee, JFC nor any
Affiliate of either of them (other than the General Partner,
Conestoga Securities, Inc., a Missouri corporation, LHC, Inc., a
Missouri corporation, Unison Capital Corporation, a Missouri
corporation, Patronus, Inc., a Missouri corporation, CIP
Management, Inc., a Missouri corporation, and Edward D. Jones & Co.
Canada Holding Co., Inc., a corporation formed under the law of the
Province of Ontario, Canada) is a general partner of any general or
limited partnership.
performance of this Master Agreement and the other Operative Documents and the consummation of the transactions contemplated hereby and thereby.
(i) To the best knowledge of the Lessee, except as described in the Environmental Audit, on the Closing Date, there are no Hazardous Materials present at, upon, under or within such Leased Property or released or transported to or from such Leased Property (except in compliance in all material respects with all Applicable Law).
(ii) On the Closing Date, no Governmental Actions have been taken or, to the best knowledge of the Lessee, are in process or have been threatened, which could reasonably be expected to subject such Leased Property, any Lender or the Lessor to any Claims or Liens with respect to such Leased Property under any Environmental Law which would have a material adverse effect, or would have a Material Adverse Effect on the Lessor or any Lender.
(iii) The Lessee has, or will obtain on or before the date required by Applicable Law, all Environmental Permits necessary to operate the Leased Property, if any, in accordance with Environmental Laws and is complying with and has at all times complied with all such Environmental Permits, except to the extent the failure to obtain such Environmental Permits or to so comply would not have a Material Adverse Effect.
(iv) Except as set forth in the Environmental Audit or in any notice subsequently furnished by the Lessee to the Agent and approved by the Agent in writing prior to the respective times that the representations and warranties contained herein are made or deemed made hereunder, no notice, notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to the Lessee, no penalty has been assessed on the Lessee and no investigation or review is pending or, to its best knowledge, threatened by any Governmental Authority or other Person in each case relating to the Leased Property with respect to any alleged material violation or liability of the Lessee under any Environmental Law. To the best knowledge of the Lessee, no material notice, notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to any other Person, no material penalty has been assessed on any other Person and no investigation or review is pending or threatened by any Governmental Authority or other Person relating to the Leased Property with respect to any alleged material violation or liability under any Environmental Law by any other Person.
(v) The Leased Property and each portion thereof are presently in compliance in all material respects with all Environmental Laws, and, to the best knowledge of the Lessee, there are no present or past facts, circumstances, activities, events, conditions or occurrences regarding the Leased Property (including without limitation the release or presence of Hazardous Materials) that could reasonably be anticipated to (A) form the basis of a material Claim against the Leased Property, any Funding Party or the Lessee, (B) cause the Leased Property to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law, (C) require the filing or recording of any notice or restriction relating to the presence of Hazardous Materials in the real estate records in the county or other appropriate municipality in which the Leased Property is located, or (D) prevent or materially interfere with the continued operation and maintenance of the Leased Property as contemplated by the Operative Documents.
lawful use and operation of the Leased Property as the Lessee intends to use such Leased Property under the Lease and which are necessary to permit the lawful intended use and operation of all presently intended utilities, driveways, roads and other means of egress and ingress to and from the same have been, or to the Lessee's best knowledge will be, obtained and are or will be in full force and effect, and the Lessee has no knowledge of any pending material modification or cancellation of any of the same.
delivery will be, legal, valid and binding obligations of the Lessor enforceable against it in accordance with their respective terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting creditors' rights generally and by general equitable principles.
(A) The unaudited balance sheet of the Lessor as of December 31, 1999 and the related statements of income, partners' capital and cash flows for the year then ended, copies of which have been delivered to the Agent and the Lessee, fairly present, in
conformity with sound accounting principles, the financial condition of the Lessor as of such date and the results of operations and cash flows for such period.
(B) Since December 31, 1999, there has been no event, act, condition or occurrence having a material adverse effect upon the financial condition, operations, performance or properties of the Lessor, or the ability of the Lessor to perform in any material respect its obligations under the Operative Documents.
(C) The Lessor has no recourse indebtedness, and the Lessor has not entered into any other transactions, purchases, leases or other agreements, other than immaterial transactions, purchases, leases and other agreements entered into by the Lessor in the ordinary course of its business, in which the Lessor has any liability to the other parties to such transactions, purchases, leases or other agreements that is in excess of the Lessor's ownership or other interest in the property subject to such transactions, purchases, leases or other agreements other than liability for required fundings, breach of contract, misrepresentation, gross negligence, willful misconduct, fraud, failure to turn over funds and similar exceptions to limitations on recourse.
ARTICLE V
COVENANTS OF LESSEE, JFC AND LESSOR
(i) engage in any Prohibited Transaction;
(ii) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA, whether or not waived; or
(iii) terminate under circumstances which could result in the imposition of a Lien on any property of the Lessee, JFC or any of their Subsidiaries pursuant to Section 4068 of ERISA.
The Lessee and JFC shall, and shall cause each of their ERISA Affiliates to: (x) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (y) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (z) make all required contributions to any Plan subject to Section 412 of the Code.
privileges as a partnership in good standing and the existence, franchises, permits, licenses, rights and privileges as a partnership or a corporation, as the case may be, in good standing, of each of their Subsidiaries, will preserve or renew all of its patents, trademarks, trade names and service marks and goodwill and will not liquidate or dissolve, or permit any of their Subsidiaries to liquidate or dissolve, unless in the case of a Subsidiary its liquidation or dissolution would not have a Material Adverse Effect, and shall take and fulfill, or cause to be taken and fulfilled, all actions and conditions necessary to qualify, and to preserve and keep in full force and effect its qualification, and that of each of their Subsidiaries, to do business as a foreign partnership or corporation in each jurisdiction in which the character of the properties owned (or held under lease) by the Lessee or JFC or any of their Subsidiaries, respectively, or the nature of their respective activities makes such qualification necessary.
(i) maintain its property in good condition and repair and make all needful and proper renewals, repairs, replacements, additions, betterments and improvements thereof and thereto, so that the business carried on in connection therewith may be conducted properly and efficiently at all times;
(iii) keep proper books of record and accounts with respect to all of its business transactions in accordance with GAAP in effect in the United States, which books of record and accounts shall, in all material respects, be true, correct and complete;
(iv) set aside on its books from its earnings for each fiscal year, in reasonably adequate amounts, all proper accruals and reserves that, in accordance with GAAP, should be set aside from such earnings in connection with its business, including reserves for litigation, depreciation, obsolescence and/or amortization, and accruals for taxes based on or measured by income or profits and for all other taxes; and
(v) at all times maintain and keep in full force and effect its rights and franchises material to its business and its memberships in such Business Associations as are necessary to enable it to engage (in the case of those entities presently so engaged) in the business of a securities broker, dealer or underwriter, or financial services institution and take all actions necessary to comply with the rules and regulations, as in effect from time to time, of such Business Associations and each other association, corporation or governmental authority to which it is subject.
Net Capital requirements of Section 15 of the Exchange Act and the rules and regulations promulgated thereunder) or any rules and regulations of any Business Association to which it is or may become subject, or (ii) fail to obtain or maintain any patents, trademarks, service marks, trade names, copyrights, design patents, licenses, permits, franchises or other governmental authorizations necessary to the operation and ownership of its property or to the conduct of its business, if the violation or failure with respect to clause (i) or (ii) of this Section 5.1(e) could reasonably be expected to have a Material Adverse Effect.
(i) Each of the Lessee, JFC and each of their Subsidiaries will pay and discharge promptly:
(x) all taxes, assessments and governmental charges and levies imposed upon it, its income or profits or any of its properties, before the same shall become delinquent, and
discretion only in accordance with the directions of, or restrictions imposed by, the Required Lenders, and such subsequent directions or restrictions as the Required Lenders may impose.
(i) as soon as available and, in any case, within 90 days after the close of each fiscal year, two copies of the respective consolidated statements of financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries setting forth the financial condition of such entities as of the end of such fiscal year, together with consolidated statements of income, cash flows, changes in partnership capital and changes in liabilities of the Lessee and JFC, respectively, for such fiscal year, in each case setting forth, in comparative form, the figures for the preceding fiscal year, all in reasonable detail, such financial statements to be accompanied by an opinion with respect thereto of Arthur Andersen LLP or another Independent Certified Public Accountant, which opinion shall state that (x) the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and, accordingly, included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances, and (y) such financial statements present fairly the financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries, respectively, at such date and the results of operations thereof for such period and have been prepared in accordance with generally accepted accounting principles consistently applied, except for noted changes in application in which such accountants concur;
(ii) as soon as practicable and, in any case, within 45 days after the end of each of the first, second and third quarterly accounting periods in each fiscal year, two copies of (x) the respective unaudited consolidated statements of financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries
as of the end of such accounting period, and (y) the respective unaudited consolidated statements of income of the Lessee and its Subsidiaries and JFC and its Subsidiaries for the quarterly accounting period and for the fiscal year to date, setting forth in each case in comparative form the figures for the corresponding periods a year earlier, prepared and certified by the principal financial officer of the Lessee and JFC, respectively, as complete and correct, as having been prepared in accordance with GAAP consistently applied and as presenting fairly such financial condition and results of operations, subject, in each case, to changes resulting from year-end audit adjustments;
(iii) promptly upon receipt thereof, two copies of each report other than those referred to in paragraph (i) hereof (including, without limitation, the auditors' comment letter to management) submitted to JFC, the Lessee or any Subsidiary by independent certified public accountants in connection with any annual, interim or special audit;
(iv) promptly upon distribution thereof, copies of all such financial or other statements (including proxy statements) and reports as JFC, the Lessee or any Subsidiary shall send to any class of its partners or shareholders, as the case may be, its bank lenders or holders of any issue of its debt securities;
(v) promptly after filing thereof, copies of all reports, proxy statements and registration statements that JFC, the Lessee or any Subsidiary shall file with any securities exchange or the SEC, or any governmental or public authority or agency substituted therefor, or any Business Association, including, without limitation, all Focus Reports (provided that such Focus Reports may be provided on a quarterly basis) and all amendments to any of the foregoing filed by or with respect to the Lessee or any Subsidiary, and promptly after filing of any Form BD, Form ADV or CRD report or any amendment thereto that reflects any material disciplinary action, liability or change in financial position, an Officer's Certificate specifying the nature thereof and what action the Lessee is taking or proposes to take with respect thereto;
(vi) promptly upon receipt thereof, copies of all notices received from United States, Canadian or any other Permitted Nation or any state, provincial or local governmental or public authorities or agencies or any Business Association relating to any order, ruling, statute, regulation or other law or directive that might materially adversely affect the financial condition or business of the Lessee or any Subsidiary;
(vii) immediately after the occurrence or institution thereof, an Officer's Certificate specifying any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including, to the extent so applicable: (w) any breach or non-performance of, or any default under, a Contractual Obligation of the Lessee, JFC or any of their Subsidiaries; (x) any dispute, litigation, investigation, proceeding or suspension between the Lessee, JFC or any of their Subsidiaries and any Governmental Authority; (y) the commencement of, or any material development in, any litigation or proceeding affecting the Lessee, JFC or any of their Subsidiaries, including pursuant to any applicable Environmental Laws; or (z) any other Environmental Claims, which certificate shall describe what action the Lessee is taking or proposes to take with respect thereto;
(x) immediately upon any partner or officer of the Lessee obtaining knowledge of any new designation of an Examining Authority, an Officer's Certificate specifying such new Examining Authority;
(xi) immediately upon any partner or officer of the Lessee obtaining knowledge of any condition or event which constitutes or which, after notice or lapse of time or both, would constitute an Event of Default or Potential Event of Default, an Officer's Certificate, specifying the nature and period of existence thereof and what action the Lessee has taken or is taking or proposes to take with respect thereto;
(xii) immediately upon becoming aware of the occurrence of any of the following events affecting the Lessee, JFC or any ERISA Affiliate (but in no event more than 10 days after such event), and deliver to the Agent and each Funding Party a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Lessee, JFC or any ERISA Affiliate with respect to such event:
(w) an ERISA Event;
(x) a material increase in the Unfunded Pension Liability of any Pension Plan;
(y) the adoption of, or the commencement of contributions to, any Plan subject to Section 412 of the Code by the Lessee or any ERISA Affiliate; or
(z) the adoption of any amendment to a Plan subject to Section 412 of the Code, if such amendment results in a material increase in contributions or Unfunded Pension Liability;
(xiii) at the time of release thereof, copies of all press releases of the Lessee, JFC or any of their Subsidiaries concerning any event or condition material to the business, prospects, earnings, properties or condition, financial or other, of any of them;
(xiv) promptly after the execution thereof, a copy of each amendment to the partnership agreement of the Lessee or JFC, other than an amendment made solely to reflect additional capital contributions to the Lessee or JFC, as the case may be, by a partner;
(xv) of any material change in accounting policies or financial reporting practices by the Lessee, JFC or any of their Subsidiaries;
(xvi) upon, but in no event later than 15 days after, any officer of the Lessee, JFC or any of their Subsidiaries becoming aware of (x) any and all enforcement, investigation, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the Lessee, JFC or any of the Subsidiaries or any of their respective properties pursuant to any applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect, (y) all other material Environmental Claims, and (z) any environmental or similar condition on any real property adjoining or in the vicinity of the property of the Lessee or any Subsidiary that could reasonably be anticipated to cause such property of the Lessee or such Subsidiary or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws; and
default. Each such Officer's Certificate shall also specify the percentage of Partnership Capital invested in assets which were used in its business in countries other than Permitted Nations as of the date of the balance sheet included in the accompanying financial statements.
(i) The Lessee shall, and shall cause each Subsidiary to, conduct its operations and keep and maintain its property and develop the Leased Property in compliance with all Environmental Laws.
(iii) The Lessee shall, and cause each Subsidiary to, maintain the Leased Property free from any Release.
(ii) any Lien created under any Operative Document;
(iv) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(v) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(viii) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businesses of the Lessee and its Subsidiaries;
(xiii) Liens securing other obligations of the Lessee and its Subsidiaries not to exceed in the aggregate at any one time outstanding ten percent (10%) of the total tangible assets of JFC and its Consolidated Subsidiaries, as would be shown in the consolidated financial statements of JFC and its Consolidated
Subsidiaries as at the end of the fiscal quarter next preceding the date on which such determination is made;
(xvi) Leases of property entered into with third party lessors in the ordinary course of business by the Lessee or any Subsidiary, as lessee, which are treated as operating leases under GAAP.
(i) endorsements for collection or deposit in the ordinary course of business;
(ii) Permitted Swap Obligations;
(v) other Contingent Obligations not exceeding at any time ten percent (10%) of the Lessee's Partnership Capital.
(i) Indebtedness evidenced by the notes issued pursuant to the Subordinated Debt Agreement, the 1992 Notes, the 1994 Notes and the 1996 Notes;
(ii) Additional Subordinated Debt, if immediately after the occurrence thereof, and giving effect thereto, total Subordinated Debt would not exceed 50% of Total Capitalization;
(vi) Other Indebtedness incurred by Lessee or any Subsidiary from time to time, provided however, the aggregate Indebtedness permitted by this paragraph (vi) shall not exceed $50,000,000 or 20% of Lessee's Net Capital, whichever is greater.
incorporation and is at all times adequately capitalized and as to which all corporate formalities are at all times observed.
The Lessee shall not be a general partner in any general or limited partnership.
(i) dispositions of inventory, or used, worn-out or surplus equipment, all in the ordinary course of business;
(ii) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are reasonably promptly applied to the purchase price of such replacement equipment; and
(a) The Lessee shall ensure that all written information, exhibits and reports furnished to the Agent or the Funding Parties do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Agent and the Funding Parties and correct any defect or error that may be discovered therein or in any Operative Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Funding Parties, the Lessee shall (and shall cause any of its Subsidiaries to) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register, any and all such further acts, certificates, assurances and other instruments the Agent or such Lenders, as the case may be, may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Operative Document, and (ii) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Agent and Lenders the rights granted or now or hereafter intended to be granted to the Lenders under any Loan Document or under any other document executed in connection therewith.
(c) Upon the written request of the Lessor or the Agent, the Lessee, at its own cost and expense, will cause all financing statements (including precautionary financing
statements), fixture filings and other similar documents, to be recorded or filed at such places and times in such manner, as may be necessary to preserve, protect and perfect the interest of the Lessor, the Agent and the Lenders in the Leased Property as contemplated by the Operative Documents.
(a) the proceeds of the Loans received from the Lenders will be used by the Lessor solely to acquire the Leased Property and to pay the Construction Agent or the Lessee for certain closing, development and transaction costs associated therewith and for the costs of Construction. No portion of the proceeds of the Loans will be used by the Lessor (i) in connection with, whether directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation or (ii) directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock;
(b) it shall not engage in any business or activity, or invest in any Person, except for activities similar to its activities conducted on the date hereof, the Transaction and lease transactions similar to the Transaction;
(d) it will deliver to the Agent and the Lessee, as soon as available and in any event within 90 days after the end of each fiscal year, a balance sheet of the Lessor as of the end of such fiscal year and the related statements of income, partners' capital and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, together with copies of its tax returns, all certified by an officer of the Lessor's General Partner (and if the Lessor ever prepares audited financial statements, it shall deliver copies thereof to the Agent and the Lessee);
(e) it will permit the Agent, the Lessee and their respective representatives to examine, and make copies from, the Lessor's books and records, and to visit the offices and properties of the Lessor for the purpose of examining such materials, and to discuss the Lessor's performance hereunder with any of its, or its general partner's, officers and employees;
(f) it shall not consent to the creation of any easement or other restriction against any Leased Property other than as permitted pursuant to Article V of the Lease;
(g) it shall promptly discharge each Lessor Lien and shall indemnify the Lenders and the Lessee for any diminution in value of the Leased Property resulting from such Lessor Liens;
(h) it shall not enter into any other transactions, leases, purchases or other agreements, other than immaterial transactions, purchases, leases and other agreements entered into by the Lessor in the ordinary course of its business, in which the other parties to said transactions, leases, purchases or other agreements will have any recourse against Lessor which is in addition to Lessor's ownership or other interest in the property subject to such transactions, purchases, leases or other agreements, other than liability for required fundings, breach of contract, misrepresentation, gross negligence, willful misconduct, fraud, failure to turn over funds and similar exceptions to limitations on recourse;
(i) it shall not guaranty the liabilities of any other Person; and
(j) it shall pay its debts as such debts become due unless such debts are the subject of a bona fide dispute.
ARTICLE VI
TRANSFERS BY LESSOR AND LENDERS
(a) Any Lender may make, carry or transfer Loans at, to or for the account of, any of its branch offices or the office of an Affiliate of such Lender.
(b) Each Lender may assign all or a portion of its interests,
rights and obligations under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitment and the Loans at the time
owing to it) to any Eligible Assignee; provided, however, that (i) the Agent
and, unless a Potential Event of Default or Event of Default shall have
occurred, the Lessee must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed) unless such
assignment is to another Lender or to an Affiliate of the assigning Lender,
(ii) unless such Lender is assigning all of its Commitment, after giving
effect to such assignment, the Commitment of both the assignor and the
assignee is at least $1,000,000 and (iii) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and
Acceptance, and, unless such assignment is to another Lender or to an
Affiliate of such Lender, a processing and recordation fee of $3,000. Any
such assignment of the Loans shall include both the A Loans and the B Loans,
on a pro rata basis. The Lessee shall not be responsible for such processing
and recordation fee or any costs or expenses incurred by any Lender or the
Agent in connection with such assignment. From and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, the assignee
thereunder shall be a party hereto and to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations
of a Lender under this Master Agreement and the Loan Agreement.
assignee or participant or proposed assignee or participant any information relating to the Lessee or its Subsidiaries or Affiliates furnished to such Lender by or on behalf of the Lessee. With respect to any disclosure of confidential, non-public, proprietary information, such proposed assignee or participant shall agree to use the information only for the purpose of making any necessary credit judgments with respect to this facility and not to use the information in any manner prohibited by any law, including without limitation, the securities laws of the United States. The proposed participant or assignee shall agree not to disclose any of such information except as permitted by this Master Agreement. The proposed participant or assignee shall further agree to return all documents or other written material and copies thereof received from any Lender, the Agent or the Lessee relating to such confidential information unless otherwise properly disposed of by such entity.
ARTICLE VII
INDEMNIFICATION
(a) any of the Operative Documents or any of the transactions contemplated thereby, and any amendment, modification or waiver in respect thereof; or
(b) the Land, the Building or any part thereof or interest therein, including any Ground Lease;
(c) the purchase, design, construction, preparation, installation, inspection, delivery, non-delivery, acceptance, rejection, ownership, management, possession, operation, rental, lease, sublease, repossession, maintenance, repair, alteration, modification, addition, substitution, storage, transfer of title, redelivery, use, financing, refinancing, disposition, operation, condition, sale (including, without limitation, any sale pursuant to the Lease), return or other disposition of all or any part of any interest in the Leased Property or the imposition of any Lien, other than a Lessor Lien (or incurring of any liability to refund or pay over any amount as a
result of any Lien, other than a Lessor Lien) thereon, including, without limitation: (i) Claims or penalties arising from any violation or alleged violation of law or in tort (strict liability or otherwise), (ii) latent or other defects, whether or not discoverable, (iii) any Claim based upon a violation or alleged violation of the terms of any restriction, easement, condition or covenant or other matter affecting title to the Leased Property or any part thereof, (iv) the making of any Alterations in violation of any standards imposed by any insurance policies required to be maintained by the Lessee pursuant to the Lease which are in effect at any time with respect to the Leased Property or any part thereof, (v) any Claim for patent, trademark or copyright infringement, (vi) Claims arising from any public improvements with respect to the Leased Property resulting in any charge or special assessments being levied against the Leased Property or any Claim for utility "tap-in" fees, and (vii) Claims for personal injury or real or personal property damage occurring, or allegedly occurring, on the Land, the Building or otherwise on or with respect to the Leased Property;
(d) the breach or alleged breach by the Lessee of any representation or warranty made by it or deemed made by it in any Operative Document or any certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or financial advisor by the Lessee to act on its behalf in connection with this Master Agreement, or the incurring of any fees or commissions to which the Lessor, the Agent or any Lender might be subjected by virtue of their entering into the transactions contemplated by this Master Agreement (other than fees or commissions due to any broker, finder or financial advisor retained by the Lessor, the Agent or any Lender);
(f) the existence of any Lien on or with respect to the Leased Property, the Construction, any Basic Rent or Supplemental Rent, title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Leased Property or by reason of labor or materials furnished or claimed to have been furnished to the Construction Agent, the Lessee, or any of its contractors or agents or by reason of the financing of any personalty or equipment purchased or leased by the Lessee or Alterations constructed by the Lessee;
(g) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of
Subtitle B of Title I of ERISA and any prohibited transaction described in
Section 4975(c) of the Code; or
(h) any act or omission by the Lessee under the Ground Lease or any other Operative Document, and any breach of any requirement, condition, restriction or limitation in the Ground Lease or any other Operative Document;
(i) the presence on or under the Land of any Hazardous Materials, or any releases or discharges of any Hazardous Materials on, under, from or onto the Land,
(ii) any activity, including, without limitation, construction, carried on or undertaken on or off the Land, and whether by the Lessee or any predecessor in title or any employees, agents, contractors or subcontractors of the Lessee or any predecessor in title, or any other Person, in connection with the handling, treatment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Materials that at any time are located or present on or under or that at any time migrate, flow, percolate, diffuse or in any way move onto or under the Land,
(iii) loss of or damage to any property or the environment (including, without limitation, clean-up costs, response costs, remediation and removal costs, cost of corrective action, costs of financial assurance, fines and penalties and
natural resource damages), or death or injury to any Person, and all expenses associated with the protection of wildlife, aquatic species, vegetation, flora and fauna, and any mitigative action required by or under Environmental Laws, in each case to the extent related to the Leased Property,
(iv) any claim concerning the Leased Property's lack of compliance with Environmental Laws, or any act or omission causing an environmental condition on or with respect to the Leased Property that requires remediation or would allow any governmental agency to record a lien or encumbrance on the land records, or
(v) any residual contamination on or under the Land, or affecting any natural resources on the Land, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials on or from the Leased Property; in each case irrespective of whether any of such activities were or will be undertaken in accordance with applicable laws, regulations, codes and ordinances;
--- ---
(w) prior to or during the Lease Term,
(x) at any time during which the Lessee or any Affiliate thereof
|
owns any interest in or otherwise occupies or possesses the Leased Property or any portion thereof, or
(y) during any period after and during the continuance of any Event of Default;
Tax Indemnitee, the Lessee, the Leased Property or any portion thereof, or
any sublessee or user thereof, by the United States or by any state or local
government or other taxing authority in the United States or any state,
local or foreign authority, in connection with or in any way relating to (i)
the acquisition, financing, mortgaging, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
purchase, ownership, possession, rental, lease, sublease, maintenance,
repair, storage, transfer of title, redelivery, use, operation, condition,
sale, return or other application or disposition of all or any part of the
Leased Property or the imposition of any Lien (or incurrence of any
liability to refund or pay over any amount as a result of any Lien) thereon,
(ii) the Notes or other indebtedness with respect to the Leased Property or
any part thereof or interest therein, (iii) Basic Rent or Supplemental Rent
or the receipts or earnings arising from or received with respect to the
Leased Property or any part thereof, or any interest therein or any
applications or dispositions thereof, (iv) any other amount paid or payable
pursuant to the Notes or any other Operative Documents, (v) the Leased
Property or any part thereof or any interest therein (including, without
limitation, all assessments payable in respect thereof, including, without
limitation, all assessments noted on the related Title Policy), (vi) all or
any of the Operative Documents, any other documents contemplated thereby,
any amendments and supplements thereto, and (vii) otherwise with respect to
or in connection with the transactions contemplated by the Operative
Documents.
(i) Taxes on, based on, or measured by or with respect to
net income of the Lessor, the Agent and the Lenders (including
minimum Taxes, capital gains Taxes, Taxes on or measured by items
of tax preference or alternative minimum Taxes) other than (A) any
such Taxes that are, or are in the nature of, sales, use, license,
rental or property Taxes, and (B) withholding Taxes imposed by the
United States or any state in which the Leased Property is located
(i) on payments with respect to the Notes, to the extent imposed by
reason of a change in Applicable Law occurring after the date on
which the holder of such Note became the holder of such Note or
(ii) on Rent, to the extent the net payment of Rent after deduction
of such withholding Taxes would be less than amounts currently
payable with respect to the Funded Amounts provided that this
clause (i) shall not prevent a payment from being made on an
After-Tax Basis if such payment is otherwise required to be so
made;
(ii) Taxes on, based on, or in the nature of or measured by Taxes on doing business, business privilege, franchise, capital, capital stock, net worth, or mercantile license or similar taxes other than any Taxes that are or are in the nature of sales, use, rental, license or property Taxes relating to the Leased
Property provided that this clause (ii) shall not prevent a payment from being made on an After-Tax Basis if such payment is otherwise required to be so made;
(iii) Taxes that are based on, or measured by, the fees or other compensation received by a Person acting as Agent (in its individual capacities) or any Affiliate of any thereof for acting as trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or omission, or are attributable to any period of time, that occurs after the earlier of (A) the expiration of the Lease Term with respect to the Leased Property and, if the Leased Property is required to be returned to the Lessor in accordance with the Lease, such return and (B) the discharge in full of the Lessee's obligations to pay the Lease Balance, or any amount determined by reference thereto, with respect to the Leased Property and all other amounts due under the Lease, unless such Taxes relate to acts, events or matters occurring prior to the earlier of such times or are imposed on or with respect to any payments due under the Operative Documents after such expiration or discharge;
(v) Taxes imposed on a Tax Indemnitee that result from any voluntary sale, assignment, transfer or other disposition or bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of any interest in any Leased Property or any part thereof, or any interest therein or any interest or obligation arising under the Operative Documents, or from any sale, assignment, transfer or other disposition of any interest in such Tax Indemnitee or any related Tax Indemnitee, it being understood that each of the following shall not be considered a voluntary sale: (A) any assignment, sublease, substitution, replacement or removal of any of the Leased Property by the Lessee, (B) any sale or transfer resulting from the exercise by any Lessee of any termination option, any purchase option or sale option, (C) any sale or transfer while an Event of Default shall have occurred and be continuing under the Lease, (D) a Casualty or Condemnation affecting the Leased Property or any part thereof, and (E) any sale or transfer resulting from the Lessor's exercise of remedies under the Lease;
(vii) any Tax that is imposed on a Tax Indemnitee as a result of such Tax Indemnitee's gross negligence or willful misconduct (other than gross negligence or willful misconduct imputed to such Tax Indemnitee solely by reason of its interest in the Leased Property);
(viii) any Tax that results from a Tax Indemnitee engaging, with respect to any Leased Property, in transactions other than those permitted by the Operative Documents;
(ix) to the extent any interest, penalties or additions to tax result in whole or in part from the failure of a Tax Indemnitee to file a return or pay a Tax that it is required to file or pay in a proper and timely manner, unless such failure (A) results from the transactions contemplated by the Operative Documents in circumstances where Lessee did not give timely notice to such Tax Indemnitee of such filing or payment requirement that would have permitted a proper and timely filing of such return or payment of such Tax, as the case may be, or (B) results from the failure of the Lessee to supply information necessary for the proper and timely filing of such return or payment of such Tax, as the case may be, that was not in the possession of such Tax Indemnitee;
Notwithstanding the foregoing, the exclusions provided for in clauses (i), (ii) and (v) of this Subsection 7.4(b) shall not apply (but the other exclusions shall apply) to any Taxes or any increase in Taxes imposed on any Tax Indemnitee net of any decrease in Taxes realized by such Tax Indemnitee to the extent that any such Tax increase or decrease would not have occurred if on the date of each Advance the Lessor and the Lenders had advanced funds directly to the Lessee in the form of a loan by such Lessor or Lender secured by the Leased Property in an amount equal to the amounts funded by the Lessor and the Lenders on each such date and a principal balance at the maturity of such loan in an amount equal to the Funded Amounts at the end of the Lease Term.
Notwithstanding anything contained herein to the contrary, (I) a Tax Indemnitee will not be required to contest (and the Lessee shall not be permitted to contest except on its own behalf
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Funding Party which is not otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Funding Party any other condition;
and the result of any of the foregoing is to increase the cost to such Funding Party, by an amount which such Funding Party deems to be material, of making, converting into, continuing or maintaining LIBOR Advances or to reduce any amount receivable hereunder in respect thereof then, in any such case, the Lessee shall promptly pay such Funding Party, upon its demand, any additional amounts necessary to compensate such Funding Party on an After-Tax Basis for such increased cost or reduced amount receivable. If any Funding Party becomes entitled to claim any
additional amounts pursuant to this subsection, it shall promptly notify the Lessee, through the Agent, of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection submitted by such Funding Party, through the Agent, to the Lessee in good faith and setting forth in reasonable detail the calculation of such amounts shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Master Agreement and the payment of the Notes and all other amounts payable under the Operative Documents.
with this Master Agreement, (iii) default by the Lessee in making a borrowing of, conversion into or continuation of LIBOR Advances after or the Construction Agent or the Lessee has given a notice requesting the same in accordance with the provisions of this Master Agreement, (iv) default by the Lessee in making any prepayment of LIBOR Advances after the Lessee has given a notice thereof in accordance with the provisions of the Operative Documents or (v) the making of a prepayment, payment or conversion, of LIBOR Advances on a day which is not the last day of a Rent Period with respect thereto, including, without limitation, in each case, any such loss (other than non-receipt of the Applicable Margin or, without duplication, anticipated profits) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained (it being understood that any such calculation will be made on notional amounts as the Funding Parties are not required to show that they matched deposits specifically). A certificate as to any additional amounts payable pursuant to this subsection submitted by such Funding Party, through the Agent, to the Lessee in good faith shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable under the Operative Documents.
(w) extraordinary use, failure to maintain, to repair, to restore, to rebuild or to replace, failure to comply with all Applicable Laws, failure to use, workmanship, method of installation or removal or maintenance, repair, rebuilding or replacement, or any other cause or condition within the power of the Lessee to control or effect resulting in the Building failing to be of the type and quality contemplated by the Appraisal (excepting in each case ordinary wear and tear), or
(x) any Alteration made to, or any rebuilding of, the Leased Property or any part thereof by the Lessee, or
(y) any restoration or rebuilding carried out by the Lessee or any condemnation of any portion of the Leased Property pursuant to Article X of the Lease, or
(z) any use of the Leased Property or any part thereof by the Lessee other than as permitted by the Lease, or any act or omission constituting a breach of any requirement, condition, restriction or limitation set forth in the Deed or the Purchase Agreement.
ARTICLE VIII
MISCELLANEOUS
(iii) reducing any amount payable to such Funding Party under the Operative Documents or extending the time for payment of any such amount, including, without limitation, any Rent, any Funded Amount, any fees, any indemnity, the Lease Balance, any Funding Party Balance, the Recourse Deficiency Amount, interest or Yield; or
(iv) consenting to any assignment of the Lease or the extension of the Lease Term, releasing any of the collateral assigned to the Agent and the Lenders pursuant to any Mortgage and any Assignment of Lease and Rents (but excluding a release of any rights that the Lenders may have in the Leased Property, or the proceeds thereof as contemplated in the definition of "Release Date"), releasing the Lessee from its obligations in respect of the payments of Rent and the Lease Balance, releasing any Lessee from its obligations under the Operative Documents or changing the absolute and unconditional character of any such obligation; and
(y) no such termination, amendment, supplement, waiver or modification shall, without the written agreement or consent of the Lessor, the Agent and the Required Lenders, be made to the Lease or the Security Agreement and Assignment; and
(a) submits for itself and its property in any legal action or proceeding relating to this Master Agreement or any other Operative Document, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of Georgia sitting in Fulton County, the courts of the United States of America for the Northern District of Georgia, and appellate courts from any thereof;
(b) consents that any such action or proceedings may be brought to such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.
Documents in its capacity as "arranger". The parties further agree that
Section 2.4, 8.4, 8.8, 8.10 and this Section 8.13 are for the express
benefit of SESC, and SESC shall be entitled to rely thereon as if it were a
party hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
EDWARD D. JONES & CO., L.P., as Lessee,
Construction Agent and Guarantor
By: EDJ Holding Company, Inc., its General
Partner
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG
Equity, Limited Partnership), as Lessor
By: Atlantic Financial Managers, Inc., its
General Partner
SUNTRUST BANK, as Agent
SUNTRUST BANK, as Lender
BANK OF NEW YORK, as Lender
FIRSTAR BANK, N.A., as Lender
The Jones Financial Companies, L.L.L.P. ("JFC") joins in the foregoing Master Agreement for the purpose of acknowledging the terms, conditions and provisions thereof and hereby covenants and agrees to observe, perform and comply with all of the obligations of JFC thereunder.
THE JONES FINANCIAL COMPANIES, L.L.L.P.
MASTER AGREEMENT
SCHEDULE 2.2
Amount of Each Funding Party's Commitment
Lessor Commitment Percentage: 3.5%
Lessor Commitment $1,085,000.00
Lender Commitment Percentages:
SunTrust Bank 28.76%
Firstar Bank, N.A. 41.94%
Bank of New York 25.81%
Lender Commitments: $29,915,000.00
SunTrust Bank $8,915,000.00
Firstar Bank, N.A. $13,000,000.00
Bank of New York $8,000,000.00
|
SCHEDULE 4.1(a)(i)
Indebtedness of Lessee
BANK LOANS:
The Lessee borrows from banks on a short-term basis primarily to finance customer margin balances and inventory securities. As of June 30, 2000, the Lessee had bank lines of credit aggregating $1,045,000 of which $995,000 was through uncommitted facilities. Actual borrowing availability is primarily based on the value of securities owned and customers' margin securities. At June 30, 2000, collateral, with a market value of $1,654,237, was available to support secured bank loans. Bank loans outstanding approximate their fair value.
LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS:
Liabilities subordinated to the claims of general creditors consist of:
June 30, 2000
-------------
Capital notes, 8.18%, due in annual installments of $10,500
commencing on September 1, 2000, with a final
installment on September 1, 2008. $ 94,500
Capital notes, 7.95%, due in annual installments of $10,225
with a final installment of $10,200 on April 15, 2006. 61,325
Capital notes, 8.96%, due in annual installments of $6,000
with a final installment on May 1, 2002. 12,000
Capital notes, with rates ranging from 7.51% to 7.79% due
in annual installments commencing on August 15, 2005
with a final installment on August 15, 2011. 75,000
--------
$242,825
========
|
Required annual principal payments, as of June 30, 2000, are as follows:
Year Ending Principal
Last Friday of June Payment
------------------- -------
2001 $ 26,725
2002 26,725
2003 20,725
2004 20,725
2005 20,725
Thereafter 127,200
--------
$242,825
========
|
SCHEDULE 4.1(a)(ii)
Subsidiaries
[TO BE ATTACHED]
SCHEDULE 4.1(d)(v)
Pending Investigations or Inquiries
SCHEDULE 4.1(m)
Environmental Matters
None, except as otherwise set forth in that certain Phase One Environmental Site Assessment and Limited Phase Two Assessment report prepared by Liesch Companies dated March 31, 2000.
SCHEDULE 4.1(u)(i)
Leases
[TO BE ADDED]
SCHEDULE 5.2(a)(i)
Existing Permitted Liens
[TO BE ATTACHED]
SCHEDULE 5.2(a)(xiv) Existing Options, Etc.
JFC and Subsidiaries has the right to purchase the building at 1245 Kelley Memorial Drive, St. Louis, MO 63131, in the 20th year of the lease, or if the building is offered for sale during the lease term which commenced January 1, 2002. Additionally, JFC and Subsidiaries has the option to purchase the adjacent buildings at 12444 Powerscourt Drive and 12412 Powerscourt Drive if and when the space is offered.
JFC and Subsidiaries has the right to purchase the building at 700 Maryville Centre, St. Louis, MO 63141, between the 25th month and 31st month of the lease which commenced March 1, 2000.
SCHEDULE 5.2(d)
Contingent Obligations
CONTINGENCIES:
Lessee's guarantee of Edward Jones Limited (UK) GBP 1,000,000 credit facility with the Royal Bank of Scotland.
Lessee's guarantee of Edward Jones Limited (UK) $500,000 USD foreign exchange line with Wells Fargo Bank, N.A., currently under negotiation.
Various legal actions are pending against the Lessee with certain cases claiming substantial damages. These actions are in various stages and the results of such actions cannot be predicted with certainty. In the opinion of management, after consultation with legal counsel, the ultimate resolution of these actions is not expected to have a material adverse impact on the Lessee's results of operations or financial condition.
SCHEDULE 8.2
Addresses for Notices
Lessee: Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Kenneth E. Schutte
Lessor: Atlantic Financial Group, Ltd.
2305 Cedar Springs Road
Suite 415
Dallas, Texas 75201
Attn: Stephen S. Brookshire
Agent for Lender: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attn: Linda L. Dash
JFC: The Jones Financial Companies, L.L.L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Lawrence R. Sobol
|
EXHIBIT A
TO MASTER AGREEMENT
FORM OF FUNDING REQUEST
TO: The Lessor, the Agent and each Lender (as defined in the Master Agreement
referred to below)
Reference is hereby made to the Master Agreement dated as of November ,
--
2000 (as heretofore amended, the "Master Agreement") among Edward D.
-----------------
Jones & Co., L.P., as Lessee, Guarantor and Construction Agent, Atlantic
Financial Group, Ltd., as Lessor, SunTrust Bank and certain financial
institutions parties thereto, as Lenders, and SunTrust Bank, as Agent, and
joined in by The Jones Financial Companies, L.L.L.P. Capitalized terms not
otherwise defined are used herein as defined in the Master Agreement.
The undersigned, as Construction Agent, hereby notifies you that it
requests a Funding in the amount of $ on [INSERT REQUESTED
---------------
FUNDING DATE] in respect of the Leased Property [owing in respect of the
Land, if applicable, and development, hard and/or soft transaction and
closing costs in respect of the Leased Property or in respect of the
purchase of personal property to be used in connection with the Leased
Property (collectively, "Project Costs")] [amounts that are due or will
-------------
become due within 30 days from the date hereof to third parties in respect
of the Construction, or amounts paid by the Construction Agent to third
parties in respect of the Construction for which the Construction Agent has
not been previously reimbursed]. The undersigned, as Construction Agent,
requests that the Funding be [a LIBOR Advance with a Rent Period of
----
months] [a Base Rate Advance] [allocated as follows: $ to a LIBOR
-----------
Advance with a Rent Period of months and $ to a Base Rate
--- ---------------
Advance].
|
In connection with such requested Funding, the undersigned, hereby represents and warrants to you as follows:
1. on the requested Funding Date the representations and warranties of the Lessee contained in Section 4.1 of the Master Agreement shall be true and correct in all material respects on and as of such Funding Date as though made on and as of such Funding Date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date;
2. there shall not have occurred any Event of Default or Potential Event of Default;
4. the amount expended by the Construction Agent to date for the construction of the Building does not exceed the amount budgeted to be expended for the percentage of construction completed to date and, in the good faith judgment of the undersigned, the construction of the Building will be completed within the Construction Budget;
6. no Event of Default, Potential Event of Default, Event of Loss, or Event of Taking has occurred, and no action is pending or, to the knowledge of the undersigned, threatened by a Governmental Authority to initiate a Condemnation or an Event of Taking with respect to the Leased Property; and
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc., its sole
general partner
SCHEDULE 1
TO FUNDING REQUEST
EXHIBIT B
TO MASTER AGREEMENT
FORM OF ASSIGNMENT OF LEASE AND RENTS
This instrument was prepared by
and upon recordation should be
returned to:
McGuireWoods LLP
One James Center
Richmond, Virginia 23219
Attention: Edmund S. Pittman, Esq.
ASSIGNMENT OF LEASE
AND RENTS
Dated as of November 30, 2000
between
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG Equity, Limited Partnership), as Lessor and Assignor
and
SUNTRUST BANK,
as Agent and Assignee
Tempe, Arizona
TABLE OF CONTENTS
Page
----
Section 1 Collateral Assignment of Lease and Guaranty Agreement..........2
Section 2 Assignment as Collateral Security..............................3
Section 3 Payments Under Lease...........................................3
Section 4 Power of Attorney in Respect of Lease..........................4
Section 5 Assignee Designated Recipient..................................4
Section 6 Allocation Pursuant to Loan Agreement..........................4
Section 7 Irrevocability; Supplemental Instruments.......................5
Section 8 Amendments or Termination of Lease.............................5
Section 9 Lessee's Consent and Agreement.................................5
Section 10 Remedies Cumulative............................................5
Section 11 Miscellaneous..................................................5
Consents and Agreement of Lessee
EXHIBITS
--------
EXHIBIT A - Description of Land
|
RECITALS:
The Lessor has entered into the Master Agreement with the Assignee, the Lessee, the Lenders and the Assignee providing, among other things, for the commitment of the Lenders to assist in financing or refinancing, as applicable, the Lessor's acquisition of the Land and the construction of the Building thereon, and the acquisition and installation of the Equipment, by making Loans to be evidenced by the respective Notes. Such Loans as evidenced by the Notes
NOW, THEREFORE, the Lessor hereby agrees for the benefit of Assignee as follows:
TOGETHER WITH the right to inspect the Leased Property and all records relating thereto and to enforce performance or observance by the Lessee of any of such rights by the exercise of the right to proceed by appropriate court action or actions, either at law or in equity,
to enforce performance by the Lessee of the applicable covenants and terms or to recover damages for the breach thereof.
TO HAVE AND TO HOLD the same unto the Assignee, for the benefit of the Lenders, and its successors and assigns forever.
the Lessee has received from the Assignee written notice of the termination of such assignment, make any other assignment, designation or direction inconsistent therewith, and that any assignment, designation or direction inconsistent therewith shall be void. The Lessor will from time to time, upon request of the Assignee, execute all instruments of further assurance and all such supplemental instruments as the Assignee may reasonably specify.
(b) This Assignment Agreement shall be binding upon, inure to the benefit of and be enforceable by, the respective successors and assigns of the parties hereto. The headings to the various paragraphs of this Assignment Agreement have been inserted for convenience reference only and shall not modify, define, limit or expand the express provisions of this Assignment Agreement. Neither this Assignment Agreement nor any provision hereof may be amended, modified, waived, discharged or terminated orally, but only by an instrument signed by the parties hereto. If any provision of this Assignment Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Assignment Agreement and any other application of such provision shall not be affected thereby.
(c) This Assignment Agreement may be executed in counterparts, each of which shall be deemed an original, and such counterparts shall together constitute but one and the same
Assignment Agreement. It shall not be necessary in making proof of this Assignment Agreement to produce or account for more than one such counterpart signed by the party against which enforcement of this Assignment Agreement is sought.
(d) THIS ASSIGNMENT AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LIEN HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE LAND IS LOCATED.
(e) Upon payment in full of all indebtedness secured by this Assignment Agreement and the Loan Agreement and performance of all other obligations secured hereby and thereby, this Assignment Agreement and the Lien created hereby shall terminate and be of no further force or effect. The Assignee shall, at the Lessee's expense, do, execute, acknowledge and deliver each and every deed, conveyance, transfer and release necessary or proper to evidence the release of record of this Assignment Agreement.
(f) Notwithstanding anything to the contrary set forth herein, in the event of any conflict between any provision of this Assignment Agreement and the Loan Agreement, the terms and provisions of the Loan Agreement shall control.
(g) All amounts paid by the Lessee to the Assignee hereunder shall be fully credited against amounts payable by the Lessee to the Lessor under the Lease.
IN WITNESS WHEREOF, the Lessor and the Assignee have each caused this Assignment Agreement to be duly executed and delivered, in its respective name and behalf, all as of the date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership (registered to do
business in Arizona as AFG Equity, Limited
Partnership), as Lessor and Assignor
By: Atlantic Financial Managers, Inc.,
a Texas corporation.
its general partner
STATE OF
------------------ )
COUNTY OF ) ss.
---------------- )
|
My Commission Expires:
SUNTRUST BANK, a Georgia banking corporation, as Agent and Assignee
STATE OF
------------------ )
COUNTY OF ) ss.
---------------- )
|
My Commission Expires:
CONSENT AND AGREEMENT
OF LESSEE
2. Notwithstanding (i) the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceeding affecting the Lessor under the Lease, (ii) any action with respect to the Lease which may be taken by any trustee or receiver of the Lessor, or by any court in such proceeding, and (iii) the exercise by the Agent or the Lenders of any rights and remedies under the Assignment Agreement, the Lessee agrees that it will remain obligated under the Lease in accordance with its terms and that it will not take any action to terminate (other than pursuant to its express rights under the Lease and the Master Agreement to do so), rescind or avoid the Lease.
3. To the extent that the Lessee may acquire any indebtedness of the Lessor or any other party to the Master Agreement, or any claim against the Lessor or any other party to the Master Agreement, by way of subrogation or otherwise, all such indebtedness and claims are hereby subordinated and made fully subject in right of payment thereof to the prior payment in full of the Notes.
4. In addition to (and not in limitation of) all of the Lessee's reimbursement and indemnity obligations set forth in the Operative Documents, the Lessee agrees to pay promptly all reasonable and documented costs and expenses incurred by the Lessor, pursuant to the Assignment Agreement, for the release of the Assignment Agreement.
IN WITNESS WHEREOF, the Lessee has caused this Consent and Agreement to be duly executed and delivered, in its name and behalf, all as of the date and year first above written.
EDWARD D. JONES & CO., L.P., a Missouri limited partnership, as Lessee
By: EDJ Holding Company, Inc., a Missouri corporation, its sole general partner
STATE OF
------------------ )
COUNTY OF ) ss.
---------------- )
|
My Commission Expires:
ASSIGNMENT OF LEASE AND RENTS
[TO BE ADDED]
ASSIGNMENT OF LEASE AND RENTS
EXHIBIT C
TO MASTER AGREEMENT
FORM OF SECURITY AGREEMENT AND ASSIGNMENT
SECURITY AGREEMENT AND ASSIGNMENT
(Construction Contract, Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans, Specifications and Drawings)
3. all other Construction Documents, including contracts and agreements relating to the acquisition and installation of the Equipment;
5. all building and other permits, licenses and governmental approvals that are necessary or useful to the commencement and completion of the Construction, or that otherwise relate in any way to the Construction or the occupancy of the Building, or the acquisition, installation and use of the Equipment, heretofore or hereafter obtained or applied for by or on behalf of the Assignor or the Contractor or the Architect or any of the architects, engineers,
For purposes of completing the Construction following the occurrence of an Event of Default or a Construction Agency Event of Default, the Secured Party may, at its option, further assign its right, title and interest in the Collateral without the consent of the Assignor, the Contractor, the Architect or any other contractor or vendor, but shall promptly thereupon notify the Contractor and the Architect, and upon exercise by such assignee of its rights to complete the Construction pursuant hereto, only such assignee, and not the Secured Party, shall become liable to pay or perform the Secured Party's obligations under the Construction Contract, the Architect's Agreement and the other Construction Documents.
This assignment is a present, perfected and absolute assignment, provided that the Secured Party shall not have the right to undertake completion of the Construction or directly to enforce the provisions of the Construction Contract or the Architect's Agreement until an Event of Default shall occur under the Lease or a Construction Agency Event of Default shall occur under the Lease or a Construction Agency Event of Default shall occur under the Construction Agency Agreement or until the Leased Property is returned to the Secured Party pursuant to the
Construction Agency Agreement. Following the occurrence of any such Event of Default or Construction Agency Event of Default, the Secured Party may, without affecting any other right or remedy available to it, exercise its rights under this assignment as provided herein in any manner permitted by law. If any notice to the Assignor is required by law, such notice shall be deemed commercially reasonable if given at least ten (10) days prior to the date of intended action. If the Assignor returns the Leased Property to the Secured Party pursuant to the Construction Agency Agreement, the Secured Party may (subject to any necessary third party consents) exercise all of the Assignor's rights, and assert all of the Assignor's claims, under and with respect to the Construction Contract, the Architect's Agreement, the other Construction Documents and the other Collateral.
This assignment may be effectively waived, modified, amended or terminated only by a written instrument executed by the Secured Party. Any waiver by the Secured Party shall be effective only with respect to the specific instance described therein. Delay or course of conduct shall not constitute a waiver of any right or remedy of the Secured Party.
THIS ASSIGNMENT HAS BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
All terms capitalized herein and not specifically defined herein which are capitalized and defined in the Lease shall have the same respective meanings for purposes hereof as for purposes of the Lease.
IN WITNESS WHEREOF, the undersigned have executed and delivered this assignment as of November 30, 2000, pursuant to proper authority duly granted.
EDWARD D. JONES & CO., L.P., a
Missouri limited partnership
By: EDJ Holding Company, Inc., a
Missouri corporation, its sole
general partner
Atlantic Financial Group, Ltd., (registered to do business in Arizona as AFG Equity, Limited Partnership)being the Secured Party as described in the foregoing Security Agreement and Assignment, hereby acknowledges receipt of the foregoing instrument as of this 30th day of November, 2000, and hereby assigns all of its rights under such agreement to SunTrust Bank, as Agent.
ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (registered to do business in Arizona as AFG Equity, Limited Partnership)
By: Atlantic Financial Managers, Inc., a Texas corporation, its General Partner
SCHEDULE 1
The undersigned hereby acknowledges receipt of a counterpart original of, and consents to, the foregoing Security Agreement and Assignment.
2. The undersigned agrees to look solely to the Assignor for the
performance of all of the obligations of the Assignor under the Construction
Contract, and not to look to Secured Party for such performance, except only
as provided below. However, if the Secured Party exercises, with respect to
the Construction Contract, the rights and privileges conferred upon it by
the Security Agreement and Assignment and asserts (by written election as
specified in the immediately succeeding two sentences) the present right to
have the benefits of the Construction Contract and to enforce the same
against the undersigned in the place and stead of the Assignor, the
undersigned agrees to perform for, and for the benefit of, the Secured Party
all of the undersigned's obligations under and pursuant to the Construction
Contract if the balance due under the Construction Contract (being the
portion of the total price which is then or thereafter due and payable as
provided therein, less the total of all portions thereof theretofore paid to
or for the benefit of the Contractor) has been paid or is then paid (or for
portions thereof not then due under the Construction Contract, such amounts
are paid as and when due under the Construction Contract). Prior to the
Secured Party's express written election (if any) to succeed to the
Assignor's rights and to assume the Assignor's obligations (to the extent
provided in the immediately succeeding sentence) under the Construction
Contract, the Contractor agrees that the Secured Party shall have no
personal obligations or liabilities of any kind under the Construction
Contract, the Security Agreement and Assignment, or otherwise. In the event
that the Secured Party shall so expressly elect in writing to succeed to the
Assignor's rights and to assume the Assignor's obligations under the
Construction Contract, the sole obligations that the Secured Party shall
assume and be liable for are (i) obligations to pay the Contractor the
amounts due under the Construction Contract as provided in the second
sentence of this paragraph (whether due before or after such election), and
(ii) other obligations of the Assignor under the Construction Contract first
accruing after such election by the Secured Party, and the Secured Party
shall not be liable or obligated for any other obligations.
3. The Contractor hereby agrees to send to the Secured Party copies of all notices of any pending or threatened default, nonperformance or termination to the Assignor under the Construction Contract by courier or certified mail, return receipt requested, to the following address (or at such other address as the Secured Party shall, from time to time, notify the undersigned in writing):
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Such notices of any pending or threatened default, nonperformance or termination shall be sent at the same time as any such notices are sent to the Assignor.
5. Notices to the Contractor hereunder shall be sent by courier or certified mail, return receipt requested, to the following:
Ryan Companies U.S., Inc.
3131 East Camelback Road, Suite 220
Phoenix, Arizona 85016
Attention: Steve Kingery
6. In the event the Construction Contract is terminated, the Secured Party shall be entitled to use, as required for the Construction (as defined in the Lease), without any additional cost or fee, any and all Permits and all Plans and Specifications and final plans, drawings and specifications ("Plans Permits") developed in connection therewith for the Construction, but in no event will such Plans and Permits be used for any project other than the current project.
The foregoing is furnished for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the undersigned, and the undersigned understands and intends that the Secured Party will rely on the foregoing and that the undersigned will be legally bound by the foregoing. This Consent and Acknowledgment shall inure to the benefit of the Secured Party and its successors and assigns.
The Contractor hereby acknowledges that the Secured Party will assign all of its rights hereunder to SunTrust Bank, as Agent for the benefit of the Lenders, and agrees that the Agent may exercise all rights of the Secured Party hereunder.
All capitalized terms used herein and not otherwise specifically defined shall have the meanings provided therefor in the Security Agreement and Assignment.
RYAN COMPANIES U.S., INC.
Attach copy of Construction Contract
The undersigned hereby acknowledges receipt of a counterpart original of, and consents to, the foregoing Security Agreement and Assignment.
2. The undersigned agrees to look solely to the Assignor for the performance of all of the obligations of the Assignor under the Architect's Agreement, and not to look to Secured Party for such performance. However, if the Secured Party exercises, with respect to the Architect's Agreement, the rights and privileges conferred upon it by the Security Agreement and Assignment and asserts (by written election as specified in the immediately succeeding two sentences) the present right to have the benefits of the Architect's Agreement and to enforce the same against the undersigned in the place and stead of the Assignor, the undersigned agrees to perform for, and for the benefit of, the Secured Party all of the undersigned's obligations under and pursuant to the Architect's Agreement if the balance due under the Architect's Agreement (being the portion of the total price which is then or thereafter due and payable as provided therein, less the total of all portions thereof theretofore paid to or for the benefit of the Architect) has been paid or is then paid (or for portions thereof not then due under the Architect's Agreement, such amounts are paid as and when due under the Architect's Agreement). Prior to the Secured Party's express written election (if any) to succeed to the Assignor's rights and to assume the Assignor's obligations (to the extent provided in the immediately succeeding sentence) under the Architect's Agreement, the Architect agrees that the Secured Party shall have no personal obligations or liabilities of any kind under the Architect's Agreement, the Security Agreement and Assignment or otherwise. In the event that the Secured Party shall so expressly elect in writing to succeed to the Assignor's rights and to assume the Assignor's obligations under the Architect Agreement, the sole obligations which the Secured Party shall assume and be liable for are (i) obligations to pay the Architect the amounts due under the Architect's Agreement as provided in the second sentence of this paragraph (whether due before or after such election), and (ii) other obligations of the Assignor under the Architect's Agreement first accruing after such election by the Secured Party, and the Secured Party shall not be liable or obligated for any other obligations.
3. The Architect hereby agrees to send to the Secured Party copies of all notices to the Assignor under the Architect's Agreement by courier or certified mail, return receipt requested, to the following address (or at such other address as the Secured Party shall, from time to time, notify the undersigned in writing):
D-1-1
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Such notices shall be sent at the same time as any notices to the Assignor.
5. The Architect agrees to deliver to the Secured Party, upon completion of the Construction (as defined in the Lease), a certificate of the Architect, in form and substance reasonably satisfactory to the Secured Party, and stating, if such be the case, that (i) the Building has been completed substantially in accordance with the Plans and Specifications therefor, and the Leased Property is ready for occupancy, (ii) such Plans and Specifications comply in all material respects with all Applicable Laws in effect at such time, and (iii) to the best of the Architect's knowledge, the Leased Property, as so completed, complies in all material respects with all Applicable Laws in effect at such time (capitalized terms in this sentence having the meanings set forth in the Lease). If the Architect cannot deliver such certificate because the facts do not support the foregoing requested certification, the Architect agrees that it will deliver a modified certificate or other written notice to the Secured Party specifying the reason(s) the certificate cannot be given as requested.
6. Notices to the Architect hereunder shall be sent by courier or certified mail, return receipt requested, to the following:
7. In the event the Architect's Agreement is terminated, the Secured Party shall be entitled to use, as required for the Construction (as defined in the Lease), without any additional cost or fee, any and all Permits and all Plans and Specifications and final plans, drawings and specifications developed in connection therewith for the Construction.
The foregoing is furnished for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the undersigned, and the undersigned
D-1-2
understands and intends that Secured Party will rely on the foregoing and that the undersigned will be legally bound by the foregoing. This Consent and Acknowledgment shall inure to the benefit of the Secured Party and its successors and assigns. The Architect hereby acknowledges that the Secured Party will assign all of its rights hereunder to SunTrust Bank, as Agent for the benefit of the Lenders, and agrees that the Agent may exercise all rights of the Secured Party hereunder.
All capitalized terms used herein and not otherwise specifically defined shall have the meanings provided therefor in the Security Agreement and Assignment.
[NAME OF ARCHITECT]
D-1-3
Attach copy of Architect's Agreement
D-1-4
EXHIBIT D-2
TO MASTER AGREEMENT
FORM OF DEED OF TRUST
This instrument prepared by and
when recorded return to:
McGuireWoods LLP
One James Center
Richmond, Virginia 23219
Attention: Edmund S. Pittman, Esq.
DEED OF TRUST AND SECURITY AGREEMENT
(INCLUDES FIXTURE FILING UNDER THE
UNIFORM COMMERCIAL CODE)
ATLANTIC FINANCIAL GROUP, LTD.,
as Grantor
to
SUNTRUST BANK,
as Agent
Tempe, Arizona
THIS INSTRUMENT IS INTENDED ALSO TO BE A FIXTURE FILING TO BE FILED IN
THE REAL ESTATE RECORDS OF MARICOPA COUNTY, ARIZONA.
TABLE OF CONTENTS
Page
----
1. Definitions................................................................4
2. Payment of Obligations.....................................................4
3. Other Covenants............................................................4
4. Default: Remedies..........................................................4
5. Remedies Not Exclusive.....................................................5
6. Perforance by the Trustee or the Agent of the Grantor's Obligations........6
7. Duty of the Trustee........................................................6
8. Powers Coupled with an Interest............................................6
9. Execution of Financing Statements..........................................7
10. Security Agreement Under Uniform Commercial Code...........................7
11. Notices....................................................................8
12. Severability...............................................................8
13. Amendments in Writing; No Wavier; Cumulative Remedies......................8
14. Section Headings...........................................................8
15. Successors and Assigns.....................................................9
16. Grantor's Waiver of Rights.................................................9
17. GOVERNING LAW..............................................................9
18. Partial Release; Full Release..............................................9
19. Miscellaneous..............................................................9
20. Future Advances; Revolving Credit.........................................11
EXHIBITS:
---------
EXHIBIT A - Description of Land
EXHIBIT B - Schedule of Equipment
|
It is a condition, among others, to the obligation of the Lenders to make the Loans to the Grantor under the Loan Agreement that the Grantor shall have executed and delivered this Deed of Trust to the Trustee for the benefit of the Agent on behalf of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the Lenders to make the Loans under the Loan Agreement, the Grantor hereby agrees with the Trustee and the Agent, for the benefit of the Lenders, as follows:
TO SECURE PAYMENT OF ALL THE AMOUNTS ADVANCED UNDER THE LOAN AGREEMENT AND THE NOTES AND THE OTHER OPERATIVE DOCUMENTS AND PAYMENT AND PERFORMANCE OF ALL OF THE OTHER OBLIGATIONS UNDER THE OPERATIVE DOCUMENTS, THE GRANTOR HEREBY CONVEYS TO THE TRUSTEE AND HEREBY BARGAINS, SELLS, CONVEYS, CONFIRMS, GRANTS, ASSIGNS, TRANSFERS, WARRANTS AND SETS OVER TO THE TRUSTEE, WITH POWER OF SALE, IN TRUST FOR THE USE AND BENEFIT OF THE AGENT, FOR THE BENEFIT OF THE LENDERS, AND GRANTS THE AGENT, FOR THE BENEFIT OF THE LENDERS, A SECURITY INTEREST IN:
D-2-1
(B) all the estate, right, title, claim or demand whatsoever of the Grantor, in possession or expectancy, in and to the Property or any part thereof;
D-2-2
(E) all right, title and interest of the Grantor in and to all substitutes and replacements of, and all additions and improvements to, the Improvements and the Fixtures and Equipment, subsequently acquired by the Grantor or constructed, assembled or placed by the Grantor on the Land, immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Property or offsite, and, in each such case, without any further conveyance, mortgage, assignment or other act by the Grantor;
(F) all right, title and interest of the Grantor in, to and under all trade names, trade marks, logos, copyrights, good will and books and records relating to or used in connection with the Property or any part thereof or the operation thereof and all general intangibles related to the operation of the Improvements now existing or hereafter arising;
(G) all right, title and interest of the Grantor in and to all unearned premiums under insurance policies now or subsequently obtained by the Lessee or Grantor relating to the Property or any part thereof and the Grantor's interest in and to all proceeds of any such insurance policies (including title insurance policies) including the right to collect and receive such proceeds and all awards and other compensation, including the interest payable thereon and the right to collect and receive the same, made to the present or any subsequent owner of the Property for the taking by eminent domain, condemnation or otherwise, of all or any part of the Property or the use thereof or any easement or other right therein;
(H) all right, title and interest of the Grantor in and to (i) all
consents, licenses, building permits, certificates of occupancy and other
governmental approvals relating to construction, completion, occupancy, use
or operation of the Property or any part thereof, (ii) all Plans and
Specifications relating to the Property, (iii) the Construction Contract,
(iv) the Architect's Agreement, (v) all contracts and agreements relating to
the acquisition and installation of the Equipment and (vi) the Construction
Agency Agreement;
(J) all right, title and interest of the Grantor under completion bonds, performance bonds payment bonds and other similar bonds and surety agreements and arrangements related to the Property or any party thereof; and
(K) all proceeds, both cash and noncash, of the foregoing;
D-2-3
(B) The Agent or its agents may enter and take possession of the Trust Property by actual physical possession or by written notice served personally upon or sent by registered or certified mail, postage prepaid, to the Grantor, and the Grantor shall surrender possession upon request, and the Agent may take possession without further authorization required and may let the Trust Property and sue for and otherwise collect and receive the rents, issues and profits thereof, make repairs and apply said rentals and profits, after payment of all necessary or proper charges and expenses, on account of the amounts hereby secured.
(C) The Agent shall, as a matter of contract right, at the option of the Agent, be entitled to the appointment of a receiver for the Trust Property, and the Grantor hereby
D-2-4
consents to such appointment without the posting of a bond or undertaking without regard to the value of the Trust Property and waives notice of any application therefor.
(D) The Trustee may foreclose this Deed of Trust as a mortgage pursuant to the applicable laws of the State of Arizona, or the Trustee, at the direction of the Agent, and without demand on the Grantor, may sell the Trust Property at public auction, as a whole or in such parcels, for cash or credit and, in addition to the requirements imposed by state law, upon any terms as the Trustee deems appropriate. Before such sale at public auction is made, there shall first be such notice of default and such notice or advertisement of the time, place and terms of sale as required by Applicable Law. Such sale may be postponed for any reason, from time to time, to the extent permitted by Applicable Law. In the event the sale is postponed, the Trustee shall advertise or give notice of any subsequent sale in the same manner as the original advertisement or notice of the sale provided above or otherwise as may be permitted by Applicable Law. The Trustee shall execute and deliver to the purchaser its Trustee's deed conveying that portion of the Trust Property so sold, but without any covenant or warranty, express or implied. The recitals in the Trustee's deed of any matters or facts shall be conclusive proof of the truthfulness thereof. The Agent or any Lender may become the purchaser of the Trust Property so sold, and no purchaser shall be required to see to the proper application of the purchase money. Unless otherwise required by Applicable Law, the Trustee shall apply the proceeds of sale as directed by the Agent. The Grantor agrees to surrender possession of the Trust Property so sold to the purchaser at the sale immediately after such sale.
(a) The Grantor hereby waives the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws (whether equitable or statutory) now or hereafter in force and all rights of marshaling in the event of any sale of the Trust Property or any interest therein.
(b) In the event of a trustee's or other foreclosure sale hereunder and if at the time of such sale the Grantor or any other party (other than a tenant under the Lease to the extent the Agent shall have expressly subordinated the lien of this Deed of Trust or a tenant with whom the Agent has entered into a written covenant of nondisturbance to the extent provided in such covenant) occupies the portion of the Trust Property so sold or any part thereof, such occupant shall immediately become the tenant of the purchaser at such sale, which tenancy shall be a tenancy from day to day, terminable at the will of such purchaser, at a reasonable rental per day based upon the value of the portion of the Trust Property so occupied (but not less than any rental theretofore paid by such tenant, computed on a daily basis). An action of forcible detainer shall lie if any such tenant holds over after a demand in writing for possession of such portion of the Trust Property.
D-2-5
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement, shall prejudice or in any manner affect the Trustee's right to realize upon or enforce any other security now or hereafter held by the Trustee, it being agreed that the Trustee shall be entitled to enforce this Deed of Trust and any other security now or hereafter held by the Trustee in such order and manner as the Trustee or the Agent may determine in its or their absolute discretion. No remedy herein conferred upon or reserved to the Trustee or the Agent is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Operative Documents to the Trustee or the Agent or to which they may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Agent. In no event shall the Trustee, in the exercise of the remedies provided in this Deed of Trust (including, without limitation, in connection with the assignment of Rent to the Agent, or the appointment of a receiver and the entry of such receiver on to all or any part of the Trust Property), be deemed a "mortgagee in possession," and the Trustee shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.
D-2-6
the Trustee or the Agent reasonably determines appropriate to perfect the security interests of the Trustee and the Agent under this Deed of Trust. A carbon, photographic or other reproduction of this Deed of Trust shall be sufficient as a financing statement for filing in any jurisdiction.
(c) The Grantor, the Trustee and the Agent agree, to the extent permitted by law, that this Deed of Trust upon recording or registration in the real estate records of the proper office shall constitute a financing statement filed as a "fixture filing" within the meaning of Sections 9-313 and 9-402 of the UCC.
D-2-7
(a) None of the terms or provisions of this Deed of Trust may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Grantor, the Trustee and the Agent in accordance with the terms of the Loan Agreement.
(b) No failure to exercise, nor any delay in exercising, on the part of the Trustee or the Agent, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Agent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which the Trustee or the Agent would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
D-2-8
(a) If (a) the Trust Property shall consist of one or more parcels, whether or not contiguous and whether or not located in the same city or county, or (b) in addition to this instrument, the Trustee and the Agent shall now or hereafter hold one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the obligations secured hereby upon other property in the state in which the Trust Property is located (whether or not such property is owned by the Grantor or by others) or (c) both the circumstances described
D-2-9
D-2-10
(b) Except as expressly provided in the Operative Documents, the Agent and the Trustee, with the express written consent of the Grantor, may at any time or from time to time renew or extend this Deed of Trust, or alter or modify the same in any way. The Agent may waive any of the terms, covenants or conditions hereof in whole or in part and may release any portion of the Trust Property or any other security, and grant such extensions and indulgences in relation to the Obligations secured hereby as the Agent may determine without the consent of any other Person (including, without limitation, the Grantor) and without any obligation to give notice of any kind thereto and without in any manner affecting the priority of the lien hereof on any part of the Trust Property.
(c) The Trustee shall be under no duty to take any action hereunder except as expressly required, to perform any act which would involve it in expense or liability, or to institute or defend any suit in respect hereof, unless properly indemnified to its satisfaction. All reasonable expenses, charges, counsel fees and other disbursements incurred by Trustee from and after the occurrence of a Loan Event of Default in and about the administration and execution of the trust created hereby, and the performance of its duties and powers hereunder shall be secured by this Deed of Trust prior to the indebtedness represented by the Notes and shall bear interest at the Overdue Rate set forth in the Operative Documents. The Agent, with or without cause, is hereby authorized and empowered to substitute and appoint, at any time and from time to time, by an instrument recorded wherever this Deed of Trust is recorded, a trustee in the place of any Trustee hereunder.
(d) Reserved.
(e) The Grantor agrees to indemnify, defend and hold the Trustee harmless from and against any and all liability, loss, damage and expense, including reasonable attorneys' fees, which it may incur by reason of this Deed of Trust or by reason of any action taken by the Trustee hereunder, and from and against any and all claims and demands whatsoever which may be asserted against the Trustee by reason of any alleged obligation or undertaking on its part to perform or discharge any of the terms, covenants or conditions contained herein, unless caused by the gross negligence or willful misconduct of the Trustee. Should the Trustee incur any such liability, loss, damage or expense, the amount thereof, together with interest thereon at the Overdue Rate set forth in the Operative Documents, shall be secured by this Deed of Trust and shall be payable by the Grantor to the Trustee within ten (10) days after demand therefor.
(f) Nothing contained in this Deed of Trust shall operate or be construed to obligate the Trustee, the Agent or any Lender to perform any of the terms, covenants or conditions contained in any lease of the Trust Property or otherwise to impose any obligation upon the Trustee, the Agent or any Lender with respect to any such lease. This Deed of Trust shall not operate to place upon the Trustee, the Agent or any Lender any responsibility for the operation, control, care, management or repair of the Trust Property prior to the Trustee, the Agent or any Lender taking possession thereof, and the execution of this Deed of Trust by the Grantor shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Trust Property prior to the Trustee, the Agent or any such Lender taking possession thereof is and shall be that of the Grantor.
D-2-11
D-2-12
IN WITNESS WHEREOF, the undersigned has caused this Deed of Trust to be duly executed and delivered as of the date first above written.
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership (registered to do
business in Arizona as AFG Equity, Limited
Partnership), as Grantor
By: Atlantic Financial Managers, Inc., a Texas
corporation, its General Partner
STATE OF
-------------------- )
COUNTY OF ) ss.
------------------- )
The foregoing instrument was acknowledged before me this day
-----
of November, 2000, by , the
---------------------------------
, of Atlantic Financial Managers, Inc., a
---------------------------------
|
Texas corporation, general partner of ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, on behalf of the limited partnership.
My Commission Expires:
D-2-N-1
EXHIBIT A
[TO BE ADDED]
EXHIBIT B
[TO BE ADDED]
D-2-1
EXHIBIT F
TO MASTER AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
To: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Ladies and Gentlemen:
(the "Assignee") of % of (i) its Commitment and (ii) the
--------------- -------- ----
A Loans and B Loans of (the "Assignor") outstanding
-------------------- --------
|
[Add paragraph dealing with accrued interest and fees with respect to Loans assigned.]
The Assignee hereby acknowledges and confirms that it is an Eligible Assignee and that it has received a copy of each of the Operative Documents. The Assignee further confirms and agrees that in becoming a Lender and in making its Loans under the Loan Agreement, such actions have and will be made without recourse to, or representation or warranty by, the Agent, the Assignor or the Lessor.
Except as otherwise provided in the Master Agreement, effective as of the date of acceptance hereof by the Agent and the Lessee:
(i) shall be deemed automatically to have become a party to the Master Agreement and the Loan Agreement, have all the rights and obligations of a "Lender" under the Master Agreement, the Loan Agreement and the other Operative Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set forth in the Master Agreement, the Loan Agreement and the other Operative Documents that are applicable to a Lender, and makes the representations and warranties of a Lender therein, as if it were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under the Master Agreement, the Loan Agreement and the other Operative Documents to the extent of the interest assigned hereby as specified in the second paragraph hereof; provided, that the Assignor shall not be relieved of any such obligation arising prior to the date specified in the second paragraph hereof.
The Assignee hereby advises you of the following administrative details with respect to the assigned Loans and requests the Agent to acknowledge receipt of this document:
A. Address for Notices:
Institution Name:
Attention:
Telephone:
Facsimile:
B. Payment Instructions:
This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Adjusted Commitment Percentage [ASSIGNOR]
------------------------------
% By:
------- -----------------------------
Title:
--------------------------
Commitment Percentage % [ASSIGNEE]
-------
By:
-----------------------------
Name Printed:
---------------
Title:
----------------------
|
SUNTRUST BANK,
as Agent
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc.,
its sole general partner
EXHIBIT H
TO MASTER AGREEMENT
FORM OF COMPLETION DATE CERTIFICATE
TO: Lessor, Agent and each Lender (as defined in the Master Agreement referred to below)
3. All amounts owing to third parties for the Construction have been paid in full (other than contingent obligations for which the Construction Agent has made adequate reserves), and no litigation or proceedings are pending, or to the best of the Construction Agent's knowledge, are threatened, against the Leased Property, the Construction Agent or the Lessee which could reasonably be expected to have a Material Adverse Effect.
4. All material consents, licenses and permits and other governmental authorizations or approvals required for the Construction and operation of the Leased Property have been obtained and are in full force and effect.
5. The Leased Property has available all services of public facilities and other utilities necessary for the use and operation of the Leased Property for its intended purposes, including, without limitation, adequate water, gas and electrical supply, storm and sanitary sewerage facilities, telephone, other required public utilities and means of access between the Building and public highways for pedestrians and motor vehicles.
6. All material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of the Leased Property as the Lessee intends to use the Leased Property under the Lease and which are necessary to permit the lawful intended use and operation of all then intended utilities, driveways, roads and other means of egress and ingress to and from the same have been obtained and are in full force and effect and neither the Construction Agent nor the Lessee has any knowledge of any pending modification or cancellation of any of the same, and the use of the Leased Property does not depend on any
variance, special exception or other municipal approval, permit or consent that has not been obtained and is in full force and effect for its continuing legal use.
8. To the best of the Construction Agent's knowledge, the Leased Property is in compliance in all material respects with all applicable zoning laws and regulations.
The Construction Agent has caused this Completion Date Certificate to be executed and delivered by its duly authorized officer this
, .
-------------- -----
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc., its sole
general partner
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
|
EXHIBIT I
TO MASTER AGREEMENT
PAYMENT DATE NOTICE
Atlantic Financial Group, Ltd.
2305 Cedar Springs Road
Suite 415
Dallas, Texas 75201
Attention: Stephen S. Brookshire
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Ladies and Gentlemen:
Edward D. Jones & Co., L.P., as Construction Agent, hereby
requests that on :
-----------
1. $ of the presently outstanding Funded Amounts
-----------
originally made on , [and $ of the
------------ --- ----- -------------
presently outstanding Funded Amounts originally made on ,
---------------
],
-----
2. and all presently being maintained as (1)[LIBOR Advances] [Base
Rate Advances],
|
3. be [converted into] [continued as],
4. (2)[LIBOR Advances having a Rent Period of _____ months] [Base Rate Advances].
Edward D. Jones & Co., L.P., as Lessee, Guarantor and Construction Agent, hereby certifies and warrants that no Potential Event of Default or Event of Default has occurred and is continuing.
By: EDJ Holding Company, its sole
general partner
MASTER LEASE AGREEMENT
Dated as of November 30, 2000
between
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG Equity, Limited Partnership), as Lessor,
and
EDWARD D. JONES & CO., L.P.,
as Lessee
TABLE OF CONTENTS
(Lease Agreement)
Page
ARTICLE I DEFINITIONS...................................................................................1
-----------
ARTICLE II LEASE OF LEASED PROPERTY......................................................................1
------------------------
Section 2.1 Restatement of Bridge Lease; Acceptance and Lease of Property.................................1
Section 2.2 Acceptance Procedure..........................................................................2
ARTICLE III RENT..........................................................................................2
----
Section 3.1 Basic Rent....................................................................................2
Section 3.2 Supplemental Rent.............................................................................2
Section 3.3 Method of Payment.............................................................................2
Section 3.4 Late Payment..................................................................................3
Section 3.5 Net Lease; No Setoff, Etc.....................................................................3
Section 3.6 Certain Taxes.................................................................................4
Section 3.7 Utility Charges...............................................................................5
ARTICLE IV WAIVERS.......................................................................................5
-------
ARTICLE V LIENS; EASEMENTS; PARTIAL CONVEYANCES.........................................................6
-------------------------------------
ARTICLE VI MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND ADDITIONS..............................7
----------------------------------------------------------------
Section 6.1 Maintenance and Repair; Compliance With Law...................................................7
Section 6.2 Improvements and Alterations..................................................................8
Section 6.3 Title to Alterations..........................................................................9
Section 6.4 Lessee's Personal Property...................................................................10
ARTICLE VII USE..........................................................................................10
---
ARTICLE VIII INSURANCE....................................................................................10
---------
ARTICLE IX ASSIGNMENT AND SUBLEASING....................................................................12
-------------------------
ARTICLE X LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE....................................................12
-----------------------------------------
Section 10.1 Event of Loss................................................................................12
Section 10.2 Event of Taking..............................................................................13
Section 10.3 Casualty.....................................................................................13
Section 10.4 Condemnation.................................................................................14
Section 10.5 Verification of Restoration and Rebuilding...................................................14
i
|
Section 10.6 Application of Payments......................................................................14
Section 10.7 Prosecution of Awards........................................................................15
Section 10.8 Application of Certain Payments Not Relating to an Event of Taking...........................16
Section 10.9 Other Dispositions...........................................................................16
Section 10.10 No Rent Abatement............................................................................16
ARTICLE XI INTEREST CONVEYED TO LESSEE..................................................................16
---------------------------
ARTICLE XII EVENTS OF DEFAULT............................................................................17
-----------------
ARTICLE XIII ENFORCEMENT..................................................................................22
-----------
Section 13.1 Remedies.....................................................................................22
Section 13.2 Remedies Cumulative; No Waiver; Consents.....................................................24
Section 13.3 Purchase Upon an Event of Default............................................................25
ARTICLE XIV SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL........................................25
-----------------------------------------------------
Section 14.1 Lessee's Option to Purchase..................................................................25
Section 14.2 Conveyance to Lessee.........................................................................26
Section 14.3 Acceleration of Purchase Obligation..........................................................26
Section 14.4 Determination of Purchase Price..............................................................26
Section 14.5 Purchase Procedure...........................................................................26
Section 14.6 Option to Remarket...........................................................................27
Section 14.7 Rejection of Sale............................................................................29
Section 14.8 Return of Leased Property....................................................................30
Section 14.9 Renewal......................................................................................30
Section 14.10 Environmental Report.........................................................................31
ARTICLE XV LESSEE'S EQUIPMENT...........................................................................31
------------------
ARTICLE XVI RIGHT TO PERFORM FOR LESSEE..................................................................32
---------------------------
ARTICLE XVII MISCELLANEOUS................................................................................32
-------------
Section 17.1 Reports......................................................................................32
Section 17.2 Binding Effect; Successors and Assigns.......................................................33
Section 17.3 Quiet Enjoyment..............................................................................33
Section 17.4 Notices......................................................................................33
Section 17.5 Severability.................................................................................34
Section 17.6 Amendment; Complete Agreements...............................................................34
Section 17.7 Construction.................................................................................34
Section 17.8 Headings.....................................................................................34
Section 17.9 Counterparts.................................................................................34
Section 17.10 GOVERNING LAW................................................................................34
Section 17.11 Reserved.....................................................................................35
ii
|
Section 17.12 Liability of the Lessor Limited..............................................................35 Section 17.13 Estoppel Certificates........................................................................35 Section 17.14 No Joint Venture.............................................................................36 Section 17.15 No Accord and Satisfaction...................................................................36 Section 17.16 No Merger....................................................................................36 Section 17.17 Survival.....................................................................................36 Section 17.18 Chattel Paper................................................................................36 Section 17.19 Time of Essence..............................................................................36 Section 17.20 Recordation of Lease.........................................................................36 Section 17.21 Investment of Security Funds.................................................................36 Section 17.22 Ground Leases................................................................................37 Section 17.23 Land and Building............................................................................37 EXHIBIT A Lease Supplement |
A. Pursuant to the Bridge Lease, the Lessor acquired a leasehold interest in the Land specified by the Construction Agent and is subleasing the same to the Lessee, subject to the Ground Lease.
B. Pursuant to this Lease, the Lessor and the Lessee desire to restate and amend the Bridge Lease, and the Lessor desires to lease to the Lessee, and the Lessee desires to lease from the Lessor, the Land, as described in the Lease Supplement.
C. The Construction Agent will construct, or cause to be constructed, the Building on the Land, and the Building, as constructed, will be the property of the Lessor and will become part of such property subject to the terms of this Lease.
In consideration of the mutual agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the Lessor and the Lessee hereby agree as follows:
in the Building and Equipment which thereafter may be constructed and installed thereon pursuant to the Construction Agency Agreement.
12:00 p.m. (noon) Atlanta, Georgia time at the place of payment in funds consisting of lawful currency of the United States of America which shall be immediately available on the scheduled date when such payment shall be due, unless such scheduled date shall not be a Business Day, in which case such payment shall be made on the next succeeding Business Day.
Governmental Authority, or any Lender; (h) any failure on the part of the
Lessor to perform or comply with any of the terms of this Lease, any other
Operative Document or of any other agreement; (i) any invalidity or
unenforceability or illegality or disaffirmance of this Lease against or by
the Lessee or any provision hereof or any of the other Operative Documents
or any provision of any thereof whether or not related to the Transaction;
(j) the impossibility or illegality of performance by the Lessee, the Lessor
or both; (k) any action by any court, administrative agency or other
Governmental Authority; (l) any restriction, prevention or curtailment of or
interference with the Construction or any use of the Leased Property or any
part thereof; or (m) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not the Lessee shall have notice or
knowledge of any of the foregoing. Except as specifically set forth in
Articles X or XIV of this Lease, this Lease shall be noncancellable by the
Lessee in any circumstance whatsoever and the Lessee, to the extent
permitted by Applicable Law, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease, or to any
diminution, abatement or reduction of Rent payable by the Lessee hereunder.
Each payment of Rent made by the Lessee hereunder shall be final and the
Lessee shall not seek or have any right to recover all or any part of such
payment from the Lessor, the Agent, any Lender or any party to any
agreements related thereto for any reason whatsoever. The Lessee assumes the
sole responsibility for the condition, use, operation, maintenance, and
management of the Leased Property leased by it, and the Lessor shall have no
responsibility in respect thereof and shall have no liability for damage to
the property of either the Lessee or any subtenant of the Lessee on any
account or for any reason whatsoever, other than solely by reason of the
Lessor's willful misconduct or gross negligence.
pay the tax in sufficient time to prevent delivery of a tax deed. Such contest shall be at the Lessee's sole cost and expense. The Lessee covenants to indemnify and save harmless the Lessor, the Agent and each Lender from any actual and reasonable costs or expenses incurred by the Lessor, the Agent or any Lender as a result of such contest, which indemnification shall survive the termination of this Lease.
otherwise expressly stated, the foregoing provisions are intended to be a complete exclusion and negation of any representations or warranties by the Lessor, the Agent or the Lenders, express or implied, with respect to the Leased Property, that may arise pursuant to any law now or hereafter in effect, or otherwise.
The Lessee shall not directly or indirectly create, incur or assume, any Lien on or with respect to the Leased Property, the title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Leased Property or by reason of labor or materials furnished or claimed to have been furnished to the Lessee, or any of its contractors or agents or Alterations constructed by the Lessee, except, in all cases, Permitted Encumbrances.
Notwithstanding the foregoing paragraph, at the request of the
Lessee, the Lessor shall, from time to time during the Lease Term and upon
reasonable advance written notice from the Lessee given in accordance with
Section 8.2 of the Master Agreement and receipt of the materials specified
in the next succeeding sentence, consent to and join in any (i) grant of
easements, licenses, rights of way and other rights in the nature of
easements, including, without limitation, utility easements to facilitate
the Lessee's use, development and construction of the Leased Property,
(ii) release or termination of easements, licenses, rights of way or other
rights in the nature of easements which are for the benefit of the Land or
the Building or any portion thereof, (iii) dedication or transfer of
portions of the Lessor's interest in the Land, not improved with the
Building, for road, highway or other public purposes, (iv) execution of
agreements for ingress and egress and amendments to any covenants and
restrictions affecting the Land or the Building or any portion thereof and
(v) request to any Governmental Authority for platting or subdivision or
replatting or resubdivision approval with respect to the Land or any portion
thereof or any parcel of land of which the Land or any portion thereof forms
a part or a request for rezoning or any variance from zoning or other
governmental requirements. The Lessor's obligations pursuant to the
preceding sentence shall be subject to the requirements that:
(a) any such action shall be at the sole cost and expense of the Lessee, and the Lessee shall pay all actual and reasonable out-of-pocket costs of the Lessor, the Agent and the Lenders in connection therewith (including, without limitation, the reasonable fees of attorneys, architects, engineers, planners, appraisers and other professionals reasonably retained by the Lessor, the Agent or any Lender in connection with any such action, and, when practicable, the Lessor will endeavor to utilize the services of the same architect(s), engineer(s), planner(s) and appraiser(s) used by the Agent and the Lenders, in connection with the review of such requests),
(b) the requesting Lessee shall have delivered to the Lessor and the Agent a certificate of a Responsible Officer of the Lessee stating that:
(i) such action will not cause the Leased Property, the Land or the Building or any portion thereof to fail to comply in any material respect with the provisions of this Lease or any other Operative Documents, or in any material respect with Applicable Laws; and
(ii) such action will not materially reduce the Fair Market Sales Value, utility or useful life of the Leased Property, the Land or the Building nor the Lessor's interest therein; and
(c) in the case of any release or conveyance, if the Lessor, the Agent or any Lender so reasonably requests, the Lessee will cause to be issued and delivered to the Lessor and the Agent by the Title Insurance Company an endorsement to the Title Policy pursuant to which the Title Insurance Company agrees that its liability for the payment of any loss or damage under the terms and provisions of the Title Policy will not be affected by reason of the fact that a portion of the real property referred to in Schedule A of the Title Policy has been released or conveyed by the Lessor.
(b) The making of any Alterations must be in compliance with the following requirements:
(i) No Structural Alterations or Alterations with a cost
exceeding Two Hundred Fifty Thousand Dollars ($250,000) shall be made or
undertaken without the prior written consent of the Lessor and the Agent
(which consent shall not be unreasonably withheld or delayed), except for
Alterations required by Applicable Laws (provided that except in the case of
an emergency, the Lessee shall give the Lessor and the Agent at least thirty
(30) days prior written notice of such Alterations). If the Lessee
reasonably expects the cost of any Alterations to exceed $250,000, the
Lessee shall deliver to the Lessor and the Agent a brief written narrative
of the work to be performed prior to undertaking any such Alteration.
(ii) No Alterations shall be undertaken in violation of the terms of any restriction, easement, condition, covenant or other similar agreement (including, without limitation, the Ground Lease) affecting title to or binding on the Leased Property. The Lessee shall procure when required and pay for, so far as the same may be required from time to time, all permits and authorizations with regard to such Alterations from all Governmental Authorities having jurisdiction. The Lessor, at the Lessee's expense, and without any liability on the part of the Lessor, shall join in the application for any such permit or authorization and execute and deliver any document in connection therewith, whenever such joinder is necessary or advisable.
(iii) The Alterations shall be completed in a good and workmanlike manner and in compliance with all Applicable Laws then in effect and the standards imposed by any insurance policies required to be maintained hereunder or by any vendor, supplier or manufacturer in order to maintain all warranties, and all Alterations must be located solely on the Land or other property used in connection with the Leased Property as to which the Lessor has an easement, license, lease, sublease or other right or interest in real property reasonably satisfactory to Agent for a term not less than the useful life of such Alterations.
(iv) All Alterations shall, when completed, be of such a character as to not adversely affect the Fair Market Sales Value, utility, remaining economic useful life or residual value of the Leased Property from the Fair Market Sales Value, utility, remaining economic useful life or residual value thereof immediately prior to the making thereof or, in the case of Alterations being made by virtue of a Casualty or Condemnation, immediately prior to the occurrence of such Casualty or Condemnation. If such Modifications have a cost exceeding Two Hundred Fifty Thousand Dollars ($250,000), the Lessor or the Agent may obtain a report from an independent engineer or engage an appraiser of nationally recognized standing, at the Lessee's sole cost and expense, to determine (by appraisal or other methods satisfactory to the Agent) the projected Fair Market Sales Value of such item of Leased Property as of the completion of the Alterations relating thereto.
(v) The Lessee shall have made adequate arrangements for payment of the cost of all Alterations when due so that the Leased Property shall at all times be free of Liens for labor and materials supplied or claimed to have been supplied to the Leased Property, other than Permitted Liens.
(a) Alterations that are in replacement of or in substitution for a portion of any item of Leased Property;
(c) Alterations that, notwithstanding any repairs, replacements or modifications by or on behalf of Lessee, are nonseverable or that cannot be removed without damaging the Leased Property or any part thereof.
The Lessee, at the Lessor's reasonable request, shall execute and deliver any deeds, bills of sale, assignments or other documents of conveyance reasonably necessary to evidence the vesting of title in and to such Alterations to the Lessor.
All Alterations to which the Lessee shall have title may be removed at any time by the Lessee, so long as removal thereof shall not result in the violation of any Applicable Laws or give rise to a Potential Event of Default or an Event of Default, and no Potential Event of Default or Event of Default then exists. The Lessee agrees to notify Lessor in writing at least 30 days before it removes any such Alterations which individually or in the aggregate had an original
cost exceeding Two Hundred Fifty Thousand Dollars ($250,000), and the Lessee shall at its expense repair any damage to any item of Leased Property caused by the removal of such Alterations. The Lessor (or the purchaser of the Leased Property) may purchase from the Lessee any such Alterations (if not already owned by the Lessor) that the Lessee intends to remove from the Leased Property prior to the return of the Leased Property to the Lessor or sale of the Leased Property, which purchase shall be at the Fair Market Sales Value of such Alterations as determined by the Appraiser at the time of such purchase. Title to any such Alterations shall vest in the Lessor (or the purchaser of the applicable Leased Property) if not removed from the Leased Property by the Lessee prior to the return of the Leased Property to the Lessor or sale of the Leased Property. Severable Alterations, title to which is vested in the Lessee, shall be made available to the Lessor or its designee without cost during the Lease Term and thereafter if the Leased Property is sold pursuant to the Remarketing Option and the use thereof is necessary or useful for the operation of the Leased Property in the manner and capacity operated at or prior to the expiration of the Lease Term.
(a) At any time during which any part of the Building or any Alteration is under construction and as to any part of the Building or any Alteration under construction, the Lessee
shall maintain, or cause to be maintained, at its sole cost and expense, as a part of its blanket policies or otherwise, "all risk" non-reporting completed value form of builder's risk insurance.
(b) During the Lease Term, the Lessee shall maintain, at its sole cost and expense, as a part of its blanket policies or otherwise, insurance against loss or damage to the Building by fire and other risks, including comprehensive boiler and machinery coverage, on terms and in amounts no less favorable than insurance covering other similar properties owned or leased by the Lessee and that are in accordance with prudent industry practice, but in no event less than the replacement cost of the Building from time to time.
Except pursuant to an Operative Document, this Lease shall not be mortgaged or pledged by the Lessee, nor shall the Lessee mortgage or pledge any interest in the Leased Property or any portion thereof. Any such mortgage or pledge shall be void.
as may be reasonably requested by the Lessor and the Agent (including, without limitation, satisfaction of conditions to release of such funds to the Lessee comparable to the conditions precedent to Advances under the Operative Documents);
would otherwise be the Lessee's claim for any such Award and to collect, receipt for and retain the same. In any event the Lessor and the Agent may participate in such negotiations, and no settlement will be made without the prior consent of the Agent (or the Lessor if the Loans have been fully paid), not to be unreasonably withheld.
(b) Notwithstanding the foregoing, the Lessee may prosecute, and the Lessor shall have no interest in, any claim with respect to the Lessee's personal property and equipment not financed by or otherwise property of the Lessor, business interruption or similar award and the Lessee's relocation expenses.
The Lessee and the Lessor intend that this Lease be treated, for accounting purposes, as an operating lease. For all other purposes, the Lessee and the Lessor intend that the transaction represented by this Lease be treated as a financing transaction, and for such purposes, it is the intention of the parties hereto (i) that this Lease be treated as a mortgage, security deed or deed of trust (whichever is applicable in the jurisdiction in which the Leased Property is located) and security agreement, encumbering the Leased Property, and that the Lessee, as grantor, hereby grants to the Lessor, as mortgagee or beneficiary and secured party, or any successor thereto, a first and paramount Lien on the Leased Property in which the Lessee has an interest, (ii) that the
Lessor shall have, as a result of such determination, all of the rights, powers and remedies of a mortgagee, deed of trust beneficiary or secured party available under Applicable Law to take possession of and sell (whether by foreclosure or otherwise) the Leased Property, (iii) that the effective date of such mortgage, security deed or deed of trust shall be the effective date of this Lease, or the Lease Supplement, if later, (iv) that the recording of this Lease or the Lease Supplement shall be deemed to be the recording of such mortgage, security deed or deed of trust, and (v) that the obligations secured by such mortgage, security deed or deed of trust shall include the Funded Amount and all Basic Rent and Supplemental Rent hereunder and all other obligations of and amounts due from the Lessee hereunder and under the Operative Documents.
Each of the following events shall constitute an Event of Default (whether any such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority):
(a) The Lessee shall fail to make any payment of Basic Rent when due; or
(c) The Lessee or JFC or any of their Subsidiaries fails to
perform or observe any term, covenant or agreement contained in
Section 5.1(p)(vii), (xi), (xii), (xv) or (xvi) or in Section 5.2 of
the Master Agreement; or
(e) The Lessee, JFC or any of their Subsidiaries shall default in the due and punctual performance of or compliance with any covenant, condition or agreement to be performed or observed by it under any provision of Sections 5.1(g), (h), (j), (k) or (m), inclusive, of the Master Agreement or shall use the proceeds of the Fundings for a purpose other than as stated in Section 5.1(u) of the Master Agreement, and any such failure or use shall continue unremedied for five
(5) days following the date on which such covenant, condition or agreement shall have been required to be performed or observed, or such use of proceeds shall have varied from that stated in Section 5.1(u) of the Master Agreement; or
(f) The Lessee, JFC or any of their Subsidiaries shall default in the due and punctual performance of or compliance with any covenant, condition or agreement to be performed or observed by it under any provision of Sections 5.1(c)-(f), inclusive, 5.1(i) or 5.1(n) of the Master Agreement and any such failure shall continue unremedied for ten (10) days following the date on which such covenant, condition or agreement shall have been required to be performed or observed; or
(g) The Lessee, JFC or any of their Subsidiaries shall default
in the due and punctual performance of or compliance with any covenant,
condition or agreement to be performed or observed by it under any other
provision of this Lease or any of the other Operative Documents and any such
failure shall continue unremedied for thirty (30) days after the earlier of
(x) the date upon which any senior officer of the Lessee or JFC knew or
reasonably should have known of such default or (y) the date on which such
covenant, condition or agreement shall have been required to be performed or
observed; or
(h) Any representation or warranty of the Lessee or JFC made in any of the Operative Documents or in any certificate, document or financial or other statement or in connection with the Transaction or pursuant to the Operative Documents shall have been false or inaccurate in any material respect on the date as of which made or deemed made; or
becoming due prior to its scheduled maturity or (y) enables or permits the lenders under such Indebtedness (as amended, modified, supplemented or replaced from time to time), or any agent on their behalf, to cause the loans thereunder to become due or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; or
(j) A default shall occur under the provisions of any preferred stock (or any agreement relating thereto) of any Subsidiary, and the effect of the same shall be (i) to require, or permit the holders thereof to require, the issuer thereof to redeem the same prior to any mandatory redemption date or (ii) to permit the holders thereof to elect any Person to the Board of Directors of such Subsidiary; or
(k) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate shall be rendered against the Lessee,
JFC and any Subsidiary (or any one or more of such Persons) and shall remain
in force undischarged and unstayed for a period of more than the longer of
(x) 60 days or (y) the shorter of (i) the period provided for requesting a
stay of such judgment or (ii) the period provided for filing an appeal from
such judgment, both as established for the jurisdiction in which such
judgment was rendered and without regard for any extension or renewal
periods applicable to either thereof; or
(m) (i) An ERISA Event shall occur with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Lessee, JFC or any ERISA Affiliate under Title IV
of ERISA to such Pension Plan or Multiemployer Plan or to the PBGC in an
aggregate amount for all such Pension Plans and Multiemployer Plans in
excess of $500,000, less any outstanding amounts under clauses (ii) and
(iii); (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans and Multiemployer Plans at any time exceeds $500,000, less any
outstanding amounts under clauses (i) and (iii) (determined, in respect of
Multiemployer Plans, by reference to the Unfunded Pension Liability for
which the Lessee, JFC or any ERISA Affiliate may be liable); or (iii) the
Lessee, JFC or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $500,000, less any
outstanding amounts under clauses (i) and (ii); or
(n) Intentionally Omitted.
(p) Any non-monetary judgment, order or decree is entered against
the Lessee or any Subsidiary which does or would reasonably be expected to
have a Material Adverse Effect, and there shall be any period of fifteen
(15) consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(q) There occurs any Change of Control; or
(r) Any Governmental Authority or any Business Association revokes or fails to renew any material license, permit or franchise of the Lessee, JFC or any Subsidiary, or the Lessee, JFC or any Subsidiary for any reason loses any material license, permit or franchise, or the Lessee, JFC or any Subsidiary suffers the imposition of any restraining order, escrow, suspension or impound of funds in connection with any proceeding (judicial or administrative) with respect to any material license, permit or franchise which, in the case of any restraining order, escrow or impound of funds is not dismissed or released within thirty (30) days after filing or imposition; or
(s) The occurrence of a Construction Agency Event of Default; or
(t) There shall have been asserted against the Lessee or any of its Subsidiaries an environmental claim that, in the reasonable judgment of the Lenders, is reasonably likely to be determined adversely to the Lessee or any of its Subsidiaries, and the amount thereof (either individually or in the aggregate) is reasonably likely to have a Material Adverse Effect (insofar as such amount is payable by the Lessee or any of its Subsidiaries but after deducting any portion thereof that is reasonably expected to be paid by other creditworthy Persons jointly and severally liable therefor); or
(u) The Lessee, JFC or the Lessee's General Partner shall be terminated, dissolved or liquidated (as a matter of law or otherwise) or proceedings shall be commenced by any Person (including the Lessee, JFC or the Lessee's General Partner) seeking the termination, dissolution or liquidation of the Lessee, JFC or the Lessee's General Partner, as the case may be, and such proceedings are not dismissed within twenty (20) days after filing; or
(v) The Liens created by the Operative Documents shall at any time not constitute a valid and perfected Lien on the collateral intended to be covered thereby (to the extent perfection by filing, registration, recordation or possession is required herein or therein) in favor of the Agent, free and clear of all other Liens (other than Permitted Liens), or, except for expiration in accordance with its terms, any of the Operative Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by the Lessee or any other obligor; or
(w) A court or other Governmental Authority or agency or Business Association having jurisdiction shall enter a decree or order approving or acknowledging as properly filed or commenced against the Lessee or any Subsidiary a petition or proceedings for liquidation pursuant to SIPA or otherwise, rehabilitation, readjustment or composition (or for any related or similar purpose) under any law (other than the Bankruptcy Code) relating to financially distressed debtors, their creditors or property, and any such decree or order shall remain in force undischarged and unstayed for a period of more than 30 days; or
(x) The Lessee, JFC or any of their Subsidiaries shall take corporate action for the purpose or with the effect of authorizing, acknowledging or confirming the taking or existence of any action or condition specified in paragraph (l) above; or
(y) The Lessee shall fail to file any report or information required pursuant to SIPA, or shall fail to pay when due all or any part of an assessment made upon the Lessee pursuant to SIPA, and such failure shall not have been cured, by the filing of such report or information or by the making of such payment, together with interest thereon, within five days after receipt by the Lessee, of written notice of such failure given by or on behalf of SIPC pursuant to Section 10(a) of SIPA; or
(z) The making of an application by SIPC for a decree adjudicating that customers of the Lessee are in need of protection under SIPA and the failure of the Lessee to obtain the dismissal of such application within 30 days;
(aa) Aggregate Indebtedness of the Lessee shall exceed 1500% of its
Net Capital or, if the Lessee has elected to operate under paragraph
(a)(1)(ii) of Rule 15c3-1, its Net Capital computed in accordance therewith
shall be less than 2% of its aggregate debit items computed in accordance
with Exhibit A to Rule 15c3-3 or (if registered as a futures commission
merchant) its net capital (as defined in the CEA or the regulations then
existing thereunder) shall be less than 4% of the funds required to be
segregated pursuant to the CEA and the regulations thereunder and the
foreign futures or foreign options secured amounts (less the market value of
commodity options purchased by option customers on or subject to the rules
of a contract market or a foreign Board of Trade, each such deduction not to
exceed the amount of funds in the option customer's account and the foreign
futures or foreign options secured amounts), if greater (or, in either case,
such greater or lesser percentage as may be made applicable to the Lessee by
the self-regulatory or governmental agencies or bodies having appropriate
authority), throughout a period of not less than fifteen (15) consecutive
Business Days, commencing on the date the Lessee first determines and
notifies the Examining Authority or the Examining Authority or the SEC first
determines and notifies the Lessee of such fact; or
(bb) The SEC or any State Securities Commission shall revoke the broker-dealer registration of the Lessee; or
(cc) The Examining Authority or any Business Association shall suspend (and not reinstate within 10 days) or revoke the Lessee's membership as a member of such Examining Authority or any Business Association.
(a) The Lessor may, by notice to the Lessee, rescind or
terminate this Lease as of the date specified in such notice; however, (i)
no reletting, reentry or taking of possession of the Leased Property by the
Lessor will be construed as an election on the Lessor's part to terminate
this Lease unless a written notice of such intention is given to the Lessee,
(ii) notwithstanding any reletting, reentry or taking of possession, the
Lessor may at any time thereafter elect to terminate this Lease for a
continuing Event of Default, and (iii) no act or thing done by the Lessor or
any of its agents, representatives or employees and no agreement accepting a
surrender of the Leased Property shall be valid unless the same be made in
writing and executed by the Lessor;
(d) The Lessor may, at its option, not terminate this Lease, and continue to collect all Basic Rent, Supplemental Rent, and all other amounts (including, without limitation, the Funded Amount) due to the Lessor (together with all costs of collection) and enforce the Lessee's obligations under this Lease as and when the same become due, or are to be performed, and, at the option of the Lessor, upon any abandonment of the Leased Property by the Lessee or re-entry of same by the Lessor, the Lessor may, in its sole and absolute discretion, elect not to terminate
this Lease with respect thereto and may make such reasonable alterations and necessary repairs in order to relet the Leased Property, and relet the Leased Property or any part thereof for such term or terms (which may be for a term extending beyond the term of this Lease) and at such rental or rentals and upon such other terms and conditions as the Lessor in its reasonable discretion may deem advisable, and upon each such reletting all rentals actually received by the Lessor from such reletting shall be applied to the Lessee's obligations hereunder in such order, proportion and priority as the Lessor may elect in the Lessor's sole and absolute discretion. If such rentals received from such reletting during any Rent Period are less than the Rent to be paid during that Rent Period by the Lessee hereunder, the Lessee shall pay any deficiency, as calculated by the Lessor, to the Lessor on the Payment Date for such Rent Period;
(f) The Lessor may exercise any other right or remedy that may be available to it under Applicable Law, or proceed by appropriate court action (legal or equitable) to enforce the terms hereof or to recover damages for the breach hereof. Separate suits may be brought to collect any such damages for any Rent Period(s), and such suits shall not in any manner prejudice the Lessor's right to collect any such damages for any subsequent Rent Period(s), or the Lessor may defer any such suit until after the expiration of the Lease Term, in which event such suit shall be deemed not to have accrued until the expiration of the Lease Term; or
(g) The Lessor may retain and apply against the Lessor's damages (but only to the extent thereof) all sums which the Lessor would, absent such Event of Default, be required to pay to, or turn over to, the Lessee pursuant to the terms of this Lease.
warranty deed and as to the absence of Lessor Liens), and the Lessee shall purchase from the Lessor, the Lessor's interest in the Leased Property leased by the Lessee.
(b) [Reserved]
(a) If the Lessee shall purchase the Lessor's interest in the
Leased Property pursuant to any provision of this Lease, (i) the Lessee
shall accept from the Lessor, and the Lessor shall convey, the Leased
Property by a duly executed and acknowledged special warranty deed and quit
claim bill of sale of such the Leased Property in recordable form, and a
quitclaim bill of sale of such Leased Property, (ii) upon the date fixed for
any purchase of the Lessor's interest in the Leased Property hereunder, the
Lessee shall pay to the order of the Agent (or the Lessor if the Loans have
been paid in full) the Lease Balance, plus any amount due pursuant to
Section 7.5 of the Master Agreement as a result of such purchase, by wire
transfer of immediately available funds, (iii) the Lessor will execute and
deliver to the Lessee such other documents, including releases, affidavits,
termination agreements and termination statements, as may be legally
required or as may be reasonably requested by the Lessee in order to effect such conveyance, free and clear of Lessor Liens and the Liens of the Operative Documents and (iv) if reasonably requested by the Lessee, the Lessor will execute and deliver to the Lessee an assignment or termination of the Ground Lease (if the same is still in effect), in such form as may be reasonably requested by the Lessee, and the Lessee shall pay any amounts due with respect thereto under the Ground Lease.
(b) The Lessee shall, at the Lessee's sole cost and expense, obtain all required governmental and regulatory approvals and consents and, in connection therewith, shall make such filings as required by Applicable Law. In the event that the Lessor is required by Applicable Law to take any action in connection with such purchase and sale, the Lessee shall pay prior to transfer all costs incurred by the Lessor in connection therewith. Without limiting the foregoing, all costs incident to such conveyance, including, without limitation, the Lessee's attorneys' fees, the Lessor's attorneys' fees, commissions, the Lessee's and the Lessor's escrow fees, recording fees, title insurance premiums and all applicable documentary transfer or other transfer taxes and other taxes required to be paid in order to record the transfer documents that might be imposed by reason of such conveyance and the delivery of such deed shall be borne entirely by and paid by the Lessee.
(c) Upon expiration or termination of this Lease resulting in conveyance of the Lessor's interest in the title to the Leased Property to the Lessee, there shall be no apportionment of rents (including, without limitation, water rents and sewer rents), taxes, insurance, utility charges or other charges payable with respect to the Leased Property, all of such rents, taxes, insurance, utility or other charges due and payable with respect to the Leased Property prior to termination being payable by the Lessee hereunder and all due after such time being payable by the Lessee as the then owner of the Leased Property.
(a) Not later than twelve (12) months prior to the Lease Termination Date, the Lessee shall give to the Lessor and the Agent written notice of the Lessee's exercise of the Remarketing Option.
(b) Not later than ten (10) Business Days prior to the Lease Termination Date, the Lessee shall deliver to the Lessor and the Agent an environmental assessment of the Leased Property leased by it dated not earlier than forty-five (45) days prior to the Lease Termination Date. Such environmental assessment shall be prepared by an environmental consultant selected
by the Required Funding Parties, shall be in form, detail and substance reasonably satisfactory to the Required Funding Parties and shall otherwise indicate the environmental condition of the Leased Property to be the same as described in the Environmental Audit.
(c) On the date of the Lessee's notice to the Lessor and the Agent of the Lessee's exercise of the Remarketing Option, each of the Construction Conditions shall have been timely satisfied and no Event of Default or Potential Event of Default shall exist, and thereafter, no Event of Default or Potential Event of Default shall exist under this Lease.
(e) The Lessee shall promptly provide any maintenance records relating to the Leased Property leased by it to the Lessor, the Agent and any potential purchaser upon request and shall otherwise do all things necessary to deliver possession of the Leased Property to the potential purchaser. The Lessee shall allow the Lessor, the Agent and any potential purchaser access to the Leased Property for the purpose of inspecting the same.
(h) In connection with any such sale of the Leased Property, the Lessee shall pay directly, and not from the sale proceeds, all prorations, credits, costs and expenses of the sale of the Leased Property leased by it, whether incurred by the Lessor, any Lender, the Agent or the Lessee, including without limitation, the cost of all title insurance, surveys, environmental reports, appraisals, transfer taxes, the Lessor's and the Agent's attorneys' fees, the Lessee's
attorneys' fees, commissions, escrow fees, recording fees and all applicable documentary and other transfer taxes.
expenses incurred by the Lessor or Agent during the period ending on the first anniversary of the Lease Termination Date in connection with the marketing, sale, closing or transfer of the Leased Property, which obligation shall survive the Lease Termination Date and the termination or expiration of this Lease.
(a) Subject to the conditions set forth herein, the Lessee may by written notice to the Lessor and the Agent given not later than ninety (90) days prior to the Construction Term Expiration Date, request the renewal of this Lease for a renewal period equal to the Construction Term, but in no event in excess of twelve (12) months, commencing on the date following the Lease Termination Date. No later than the date that is forty-five (45) days after the date the request to renew has been delivered to each of the Lessor and the Agent, the Agent will notify the Lessee whether or not the Lessor's and the Lenders' consent (which consent, in the case of the Lessor and the Lenders, may be granted or denied in their sole discretion) to such renewal request (which renewal shall require the unanimous consent of the Lessor and the Lenders and may be conditioned on such conditions precedent as may be specified by the Lessor and the Lenders). If the Agent fails to respond within such timeframe, such failure shall be a rejection of
such request. If the Agent notifies the Lessee of the Lessor's and the Lenders' consent to such renewal, such renewal shall be effective as of the Lease Termination Date.
After any repossession of the Leased Property (whether or not this Lease has been terminated), the Lessee, at its sole cost and expense and so long as such removal of such trade fixtures, personal property or equipment shall not result in a violation of Applicable Law, shall, within a reasonable time after such repossession or within sixty (60) days after the Lessee's
If the Lessee shall fail to perform or comply with any of its agreements contained herein, the Lessor, upon ten (10) days' prior notice to the Lessee (except in the case of an emergency), may perform or comply with such agreement, and the Lessor shall not thereby be deemed to have waived any default caused by such failure, and the amount of such payment and the amount of the expenses of the Lessor (including actual and reasonable attorneys' fees and expenses) incurred in connection with such payment or the performance of or compliance with such agreement, as the case may be, shall be deemed Supplemental Rent, payable by the Lessee to the Lessor within ten (10) days after written demand therefor.
If to the Lessor: Atlantic Financial Group, Ltd.
c/o Grogan & Brawner
2305 Cedar Springs Road, Suite 415
Dallas, Texas 75201
Attn: Stephen S. Brookshire
If to the Lessee: Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Kenneth E. Schutte
If to the Agent: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attn: Linda L. Dash
|
If to a Lender, to the address provided in the Master Agreement.
TO THE CREATION OF THE LEASEHOLD OR MORTGAGE ESTATES HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have each caused this Lease Agreement to be duly executed and delivered and attested by their respective officers thereunto duly authorized as of the day and year first above written.
EDWARD D. JONES & CO., L.P., a Missouri limited partnership, as the Lessee
By: EDJ Holdings Company, Inc., a Missouri corporation, its sole general partner
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership
(registered to do business in Arizona
as AFG Equity, Limited Partnership),
as the Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
EXHIBIT A
LEASE SUPPLEMENT
This instrument prepared by and
when recorded return to:
McGuireWoods LLP
One James Center
Richmond, Virginia 23219
Attention: Edmund S. Pittman, Esq.
LEASE SUPPLEMENT, MEMORANDUM OF LEASE
AND DEED OF TRUST AND SECURITY AGREEMENT
Dated as of November 30, 2000
among
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Arizona as AFG Equity, Limited Partnership), as Lessor
EDWARD D. JONES & CO., L.P.,
as Lessee,
and
OLD REPUBLIC TITLE INSURANCE AGENCY, INC., Trustee,
for the use and
benefit of Lessor
Tempe, Arizona
THIS INSTRUMENT IS INTENDED ALSO TO BE A FIXTURE FILING TO BE FILED IN
THE REAL ESTATE RECORDS OF MARICOPA COUNTY, ARIZONA.
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS; INTERPRETATION..................................2
SECTION 2. THE SUBJECT PROPERTY.........................................2
SECTION 3. NATURE OF TRANSACTION; DEED OF TRUST.........................2
SECTION 4. RATIFICATION; INCORPORATION.................................10
SECTION 5. ORIGINAL LEASE SUPPLEMENT...................................10
SECTION 6. GOVERNING LAW...............................................10
SECTION 7. COUNTERPART EXECUTION.......................................10
EXHIBITS:
---------
EXHIBIT A - Description of Land
EXHIBIT B - Schedule of Equipment
|
RECITALS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
B. TO SECURE PAYMENT OF ALL AMOUNTS OWING BY THE GRANTOR UNDER THE LEASE AND THE OTHER OPERATIVE DOCUMENTS AND THE PAYMENT AND PERFORMANCE OF ALL OTHER OBLIGATIONS UNDER THE OPERATIVE DOCUMENTS, THE GRANTOR HEREBY CONVEYS TO THE TRUSTEE AND HEREBY BARGAINS, SELLS, CONVEYS, CONFIRMS, GRANTS, ASSIGNS, TRANSFERS, WARRANTS AND SETS OVER TO THE TRUSTEE, WITH POWER OF SALE, THE SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND PROCEEDS THEREOF (INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND OTHER LOSS PROCEEDS), WITH GENERAL WARRANTY OF TITLE, IN TRUST FOR THE USE AND BENEFIT OF THE LOAN PARTY, AND GRANTS THE LOAN PARTY A SECURITY INTEREST IN THE SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND PROCEEDS THEREOF (INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND OTHER LOSS PROCEEDS), TO HAVE AND TO HOLD the Subject Property and the rights and privileges hereby granted unto the Trustee, its successors and assigns for the uses and purposes set forth, until all amounts owed by and all other obligations to be paid or performed by the Grantor under the Lease and the other Operative Documents are indefeasibly paid and performed in full.
C. If an Event of Default has occurred and is continuing under the Lease, at the direction of the Loan Party:
(i) The Loan Party or its agents may enter and take possession of the Subject Property by actual physical possession or by written notice served personally upon or sent by registered or certified mail, postage prepaid, to the Grantor, and the Grantor shall surrender possession upon request and the Loan Party may take possession without further authorization required, and may let the Subject Property and receive the rents, issues and profits thereof, make repairs and apply said rentals and profits, after payment of all necessary or proper charges and expenses, on account of the amounts hereby secured.
(ii) The Loan Party, shall, as a matter of contract right, at the option of the Loan Party, be entitled to the appointment of a receiver for the Subject Property, and the Grantor hereby consents to such appointment without the posting of a bond or undertaking without regard to the value of the Subject Property and waives notice of any application therefor.
(iii) The Trustee may foreclose this Deed of Trust as a mortgage pursuant to the applicable laws of the State of Arizona, or the Trustee may proceed to sell the Subject Property at public auction, as a whole or in such parcels, for cash or credit and, in addition to the requirements imposed by state law, upon any terms as the Trustee deems appropriate. Before such sale at public auction is made, there shall first be such notice of default and such notice or advertisement of the time, place and terms of sale as required by Applicable Law. Such sale may be postponed for any reason, from time to time, to the extent permitted by Applicable Law. In the event the sale is postponed, the Trustee shall advertise or give notice of any subsequent sale in the same manner as the original advertisement or notice of sale provided for above or otherwise as may be permitted by Applicable Law. The Trustee shall execute and deliver to the purchaser its Trustee's deed conveying that portion of the Subject Property so sold, but without any covenant or warranty, express or implied. The recitals in the Trustee's deed of any matters or facts shall be conclusive proof of the truthfulness thereof. The Loan Party may become the purchaser of the Subject Property so sold, and no purchaser shall be required to see to the proper application of the purchase money. Unless otherwise required by Applicable Law, the Trustee shall apply the proceeds of sale as directed by the Loan Party. The Grantor agrees to surrender possession of the Subject Property so sold to the purchaser at the sale immediately after such sale.
D. The Grantor hereby waives the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws (whether equitable or statutory) now or hereafter in force and all rights of marshaling in the event of any sale of the Subject Property or any interest therein.
E. The Trustee shall be entitled to enforce payment of the indebtedness and performance of the Lessee's obligations and to exercise all rights and powers under this instrument or under any of the other Operative Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the Lessee's obligations may now or hereafter be otherwise secured, whether by deed of trust, deed to secure debt, mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this instrument nor its enforcement, shall prejudice or in any manner affect the Trustee's right to realize upon or enforce any other security now or hereafter held by the Trustee, it being agreed that the Trustee shall be entitled to enforce this instrument and any other security now or hereafter held by the Trustee in such order and manner as the Trustee or the Loan Party may determine in its or their absolute discretion. No remedy herein conferred upon or reserved to the Trustee or the Loan Party is intended to be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Operative Documents to the Trustee or the Loan Party or to which they may
otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Loan Party. In no event shall the Trustee, in the exercise of the remedies provided in this instrument (including, without limitation, the appointment of a receiver and the entry of such receiver on to all or any part of the Subject Property), be deemed a "mortgagee in possession," and the Trustee shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.
G. All powers, authorizations and agencies contained in this Deed of Trust are coupled with an interest and are irrevocable until this instrument is terminated and the lien created hereby is released.
H. Pursuant to Section 9-402 of the UCC, the Grantor authorizes the Trustee or the Loan Party to file financing statements with respect to the Subject Property with the signature of the Grantor in such form and in such filing offices as the Trustee or the Loan Party reasonably determines appropriate to perfect the security interests of the Trustee and the Loan Party under this Deed of Trust. A carbon, photographic or other reproduction of this Deed of Trust shall be sufficient as a financing statement for filing in any jurisdiction.
holding, preparing for sale, selling and the like incurred by the
Trustee or the Loan Party shall include, but not be limited to,
attorneys' fees and legal expenses. At the Trustee's request, the
Grantor shall assemble the personal property and make it available
to the Trustee and the Loan Party at a place designated by the
Trustee or the Loan Party which is reasonably convenient to both
parties. The Grantor stipulates and agrees that a sale of the
Personal Property in conjunction with the Subject Property is a
commercially reasonable manner of disposing of the Personal
Property. The Loan Party also may (x) require the Grantor to, and
the Grantor hereby agrees that the Grantor will at the Grantor's
expense and upon request of the Loan Party forthwith, assemble all
or part of the Personal Property as directed by the Loan Party and
make it available to the Loan Party at a place to be designated by
the Loan Party which is reasonably convenient to the parties, and
(y) sell the Personal Property or any part thereof in one or more
parcels at public or private sale for cash or credit or for future
delivery, and at such price or prices and upon such other terms as
the Loan Party may deem commercially reasonable. The Loan Party
shall not be obligated to make any sale of the Personal Property
regardless of notice of sale having been given. The Loan Party may
adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which
it was so adjourned.
The Grantor, the Trustee and the Loan Party further agree, to the extent permitted by law, that this instrument upon recording or registration in the real estate records of the proper office shall constitute a financing statement filed as a "fixture filing" within the meaning of Sections 9-313 and 9-402 of the UCC.
The Grantor, upon request by the Trustee or the Loan Party from time to time, shall execute, acknowledge and deliver to the Trustee or the Loan Party one or more separate security agreements, in form satisfactory to the Trustee and the Loan Party, covering all or any part of the Subject Property and will further execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any financing statement, affidavit, continuation statement or certificate or other document as the Trustee or the Loan Party may request in order to perfect, preserve, maintain, continue or extend the security interest under and the priority of this instrument. The Grantor further agrees to pay to the Trustee and the Loan Party on demand all costs and expenses incurred by the Trustee or the Loan Party in connection with the preparation, execution, recording, filing and refiling of any such document and all reasonable costs and expenses of any record searches for financing statements the Trustee or the Loan Party shall reasonably require. If the Grantor shall fail to furnish any financing or continuation statement within ten (10) days after request by the Trustee or the Loan Party, then pursuant to the provisions of the UCC, the Grantor hereby authorizes the Trustee and the Loan Party, without the signature of the Grantor, to execute and file any such financing and continuation statements. The filing of any financing or continuation statements in the records relating to personal property or chattels shall not be construed as in any way impairing the right of the Trustee to proceed against any personal property encumbered by this Deed of Trust as real property, as set forth above.
J. The Grantor acknowledges that in connection with the rights and responsibilities of the Trustee under this instrument with respect to any action taken by the Trustee or the exercise or non-exercise by the Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this instrument, as between the Grantor and the Loan Party, the Trustee shall be conclusively presumed to be acting as agent for the Loan Party with full and valid authority so to act or refrain from acting, and the Grantor shall be under no obligation, or entitlement, to make any inquiry respecting such authority.
K. Except as otherwise set forth herein, to the fullest
extent permitted by law, the Grantor waives the benefit of all laws
now existing or that may subsequently be enacted providing for (i)
any appraisement before sale of any portion of the Subject
Property, (ii) any extension of the time for the enforcement of the
collection of the indebtedness or the creation or extension of a
period of redemption from any sale made in collecting such debt and
(iii) exemption of the Subject Property from attachment, levy or
sale under execution or exemption from civil process. Except as
otherwise set forth herein, to the full extent the Grantor may do
so, the Grantor agrees that the Grantor will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now
or hereafter in force providing for any appraisement, valuation,
stay, exemption, extension, reinstatement or redemption, or
requiring foreclosure of this instrument before exercising any
other remedy granted hereunder, and the Grantor, for the Grantor
and its successors and assigns, and for any and all Persons ever
claiming any interest in the Subject Property, to the extent
permitted by law, hereby waives and releases all rights of
reinstatement, redemption, valuation, appraisement stay of
execution, notice of election to mature or declare due the whole of
the secured indebtedness and marshaling in the event of foreclosure
of the liens hereby created.
have obtained a judgment of foreclosure and sale or similar judgment against such collateral, then, whether or not such proceedings are being maintained or judgments were obtained in or outside the state in which the Subject Property is located, the Trustee and the Loan Party may commence or continue foreclosure proceedings and exercise its other remedies granted in this instrument against all or any part of the Subject Property and the Grantor waives any objections to the commencement or continuation of a foreclosure of this instrument or exercise of any other remedies hereunder based on such other proceedings or judgments and waives any right to seek to dismiss, stay, remove, transfer or consolidate either any action under this instrument or such other proceedings on such basis. Neither the commencement nor continuation of proceedings to foreclose this instrument nor the exercise of any other rights hereunder nor the recovery of any judgment by the Trustee and the Loan Party in any such proceedings shall prejudice, limit or preclude the Trustee's and the Loan Party's rights to commence or continue one or more foreclosure or other proceedings or obtain a judgment against any other collateral (either in or outside the state in which the Subject Property is located) which directly or indirectly secures the obligations secured hereby. The Grantor hereby waives (i) any objections to the commencement or continuation of an action to foreclose this Deed of Trust or exercise of any other remedies hereunder based on any action being prosecuted or any judgment entered with respect to the Obligations or any liens or security interests that secure payment and performance of the Obligations and (ii) any objections to the commencement of, continuation of, or entry of a judgment in any such other action based on any action or judgment connected to this Deed of Trust. The Grantor also waives any right to seek to dismiss, stay, remove, transfer or consolidate either such other proceedings or any action under this instrument based on any action or judgment connected to this instrument. It is expressly understood and agreed that to the fullest extent permitted by law, the Trustee may, at its election, cause the sale of all collateral which is the subject of a single foreclosure action at either a single sale or at multiple sales conducted simultaneously and take such other measures as are appropriate in order to effect the agreement of the parties to dispose of and administer all collateral securing the obligations secured hereby (directly or indirectly) in the most economical and least time-consuming manner. In case of a foreclosure sale, the Trust Property may be sold, at the Trustee's election, in one parcel or in more than one parcel and the Trustee is specifically empowered (without being required to do so, and in its sole and absolute discretion) to cause successive sales of portions of the Subject Property to be held.
M. Except as expressly provided in the Operative Documents, the Trustee and the Loan Party, with the express written consent of the Grantor, may at any time or from time to time renew or extend this instrument, or alter or modify the same in any way. The Trustee may waive any of the terms, covenants or conditions hereof in whole or in part and may release any portion of the Subject Property or any other security, and grant such extensions and indulgences in relation to the obligations secured hereby as the Loan Party may determine without the consent of any other Person (including, without limitation, the Grantor) and without any obligation to give notice of any kind thereto and without in any manner affecting the priority of the lien hereof on any part of the Subject Property.
N. If Trustee shall be made a party to or shall intervene in any action or proceeding, whether in court or before any governmental agency, affecting the Subject
Property or the title thereto or the interest of Trustee under this instrument, including, without limitation, any form of condemnation or eminent domain proceeding, Trustee shall be reimbursed by the Grantor upon demand for all costs, charges and reasonable attorneys' fees incurred by it in any such case. All such sums shall be secured hereby, are due and payable within ten (10) days after demand, and if not paid within ten (10) days after demand, shall bear interest at the Overdue Rate set forth in the Operative Documents.
The Trustee shall be under no duty to take any action hereunder except as expressly required, to perform any act which would involve it in expense or liability, or to institute or defend any suit in respect hereof, unless properly indemnified to its satisfaction. All reasonable expenses, charges, counsel fees and other disbursements incurred by Trustee from and after the occurrence of an Event of Default in and about the administration and execution of the trust created hereby, and the performance of its duties and powers hereunder shall be secured by this instrument prior to the indebtedness represented by the Lease and shall bear interest at the Overdue Rate set forth in the Operative Documents. The Loan Party, with or without cause, is hereby authorized and empowered to substitute and appoint, at any time and from time to time, by an instrument recorded wherever this instrument is recorded, a trustee in the place of any Trustee hereunder.
The Grantor agrees to indemnify, defend and hold the Trustee harmless from and against any and all liability, loss, damage and expense, including reasonable attorneys' fees, which it may incur by reason of this instrument or by reason of any action taken by the Trustee hereunder, and from and against any and all claims and demands whatsoever which may be asserted against the Trustee by reason of any alleged obligation or undertaking on its part to perform or discharge any of the terms, covenants or conditions contained herein, unless caused by the gross negligence or willful misconduct of the Trustee. Should the Trustee incur any such liability, loss, damage or expense, the amount thereof, together with interest thereon at the Overdue Rate set forth in the Operative Documents, shall be secured by this instrument and shall be payable by the Grantor to the Trustee within ten (10) days after demand therefor.
O. Nothing in this instrument shall operate or be construed to obligate the Trustee or the Loan Party to perform any obligations of the Grantor contained in any lease of the Subject Property. This instrument shall not operate to place upon the Loan Party or the Trustee any responsibility for the operation, control, care, management or repair of the Subject Property prior to the Trustee or the Loan Party taking possession thereof, and the execution of this Deed of Trust by the Grantor shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Subject Property prior to the Trustee or the Loan Party taking possession thereof is and shall be that of Grantor.
P. This instrument is given to secure not only existing indebtedness, but also future advances made pursuant to or as provided in the Operative Documents, whether
such advances are obligatory or to be made at the option of the Loan Party, or otherwise, to the same extent as if such future advances were made on the date of execution of this instrument, although there may be no advance made at the time of execution hereof, and although there may be no indebtedness outstanding at the time any advance is made. To the fullest extent permitted by law, the lien of this instrument shall be valid as to all such indebtedness, including all revolving credit and future advances, from the time this instrument is recorded.
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease Supplement to be duly executed by an officer thereunto duly authorized as of the date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in
Arizona as AFG Equity, Limited
Partnership), as the Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
EDWARD D. JONES & CO., L.P., as
the Lessee
By: EDJ Holding Company, Inc.,
a Missouri corporation,
its sole general partner
LEASE SUPPLEMENT
STATE OF
--------------------------- )
) ss.
COUNTY OF )
--------------------------
The foregoing instrument was acknowledged before me this day
------
of November , 2000, by , the
--------------- ---------------------------------
, of Atlantic Financial Managers, Inc., a
--------------------------------
|
Texas corporation, general partner of ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership, on behalf of the limited partnership.
My Commission Expires:
STATE OF
--------------------------- )
) ss.
COUNTY OF )
--------------------------
The foregoing instrument was acknowledged before me this day
------
of November , 2000, by , the
---------------- ---------------------------------
|
My Commission Expires:
Receipt of this original counterpart of the foregoing Lease Supplement is hereby acknowledged as of the date hereof.
SUNTRUST BANK, as the Agent
LEASE SUPPLEMENT
EXHIBIT A
[TO BE ADDED]
EXHIBIT B
None
LESSOR: FLEET CAPITAL CORPORATION LESSEE: EDWARD D. JONES & CO., L.P.
a Rhode Island corporation a Missouri Limited Partnership
ADDRESS: One Financial Plaza ADDRESS: 12555 Manchester Road
Providence, Rhode Island St. Louis, MO
02903-2448 63131
|
1. LEASE OF EQUIPMENT Subject to the terms and conditions set forth herein (the "MASTER LEASE") and in any Lease Schedule incorporating the terms of this Master Lease (each, a "LEASE SCHEDULE"), Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, the items and units of personal property described in each such Lease Schedule, together with all replacements, parts, additions, accessories and substitutions therefor (collectively, the "EQUIPMENT"). As used in this Lease, the term "ITEM OF EQUIPMENT" shall mean each functionally integrated and separately marketable group or unit of Equipment subject to this Lease. Each Lease Schedule shall constitute a separate, distinct and independent lease of Equipment and contractual obligation of Lessee. References to "THE LEASE," "THIS LEASE" or "ANY LEASE" shall mean and refer to any Lease Schedule which incorporates the terms of this Master Lease, together with all exhibits, addenda, schedules, certificates, riders and other documents and instruments executed and delivered in connection with such Lease Schedule or this Master Lease, all as the same may be amended or modified from time to time. The Equipment is to be delivered and installed at the location specified or referred to in the applicable Lease Schedule. The Equipment shall be deemed to have been accepted by Lessee for all purposes under this Lease upon Lessor's receipt of an Acceptance Certificate with respect to such Equipment, executed by Lessee after receipt of all other documentation required by Lessor with respect to such Equipment. Lessor shall not be liable or responsible for any failure or delay in the delivery of the Equipment to Lessee for whatever reason. As used in this Lease, "ACQUISITION COST" shall mean (a) with respect to all Equipment subject to a Lease Schedule, the amount set forth as the Acquisition Cost in the Lease Schedule and the Acceptance Certificate applicable to such Equipment; and (b) with respect to any item of Equipment, the total amount of all vendor or seller invoices (including Lessee invoices, if any) for such item of Equipment, together with all acquisition fees and costs of delivery, installation, testing and related services, accessories, supplies or attachments procured or financed by Lessor from vendors or suppliers thereof (including items provided by Lessee) relating or allocable to such item of Equipment ("RELATED EXPENSES"). Provided no event of Default has occurred and remains uncured hereunder and upon the satisfaction of all preconditions deemed necessary by Lessor, Lessor shall satisfy the obligation to pay the Acquisition Cost within thirty (30) days of the Lease Term Commencement Date. As used in this Lease with respect to any Equipment, the terms "ACCEPTANCE DATE," "RENTAL PAYMENT(S)," "RENTAL PAYMENT DATE(S)," "RENTAL PAYMENT NUMBERS," "RENTAL PAYMENT COMMENCEMENT DATE," "LEASE TERM" and "LEASE TERM COMMENCEMENT DATE" shall have the meanings and values assigned to them in the Lease Schedule and the Acceptance Certificate applicable to such Equipment.
2. TERM AND RENT The Lease Term for any Equipment shall be as specified in the applicable Lease Schedule. Rental Payments shall be in the amounts and shall be due and payable as set forth in the applicable Lease Schedule. Lessee shall, in addition, pay interim rent to Lessor as provided in the Lease Schedule from the Acceptance Date to the Lease Term Commencement Date set forth in the applicable Acceptance Certificate, payable on such Lease Term Commencement Date. If any rent or other amount payable hereunder shall not be paid within 10 days of the date when due, Lessee shall pay as an administrative and late charge overdue interest on any delinquent payment or other amounts due under the Lease (by reason of acceleration or otherwise) from the due date until paid at the rate of 1 1/2% per month or the maximum amount permitted by applicable law, whichever is lower. All payments to be made to Lessor shall be made to Lessor in immediately available funds at the address shown above or at such other place, as Lessor shall specify in writing. THIS IS A NON-CANCELABLE, NON-TERMINABLE LEASE OF EQUIPMENT FOR THE ENTIRE LEASE TERM PROVIDED IN EACH LEASE SCHEDULE HERETO.
3. POSSESSION; PERSONAL PROPERTY No right, title or interest in the Equipment shall pass to Lessee other than the right to maintain possession and use of the Equipment for the Lease Term (provided no Event of Default has occurred) free from interference by any person claiming by, through, or under Lessor. The Equipment shall always remain personal property even though the Equipment may hereafter become attached or affixed to real property. Lessee agrees to give and record such notices and to take such other action at its own expense as may be necessary to prevent any third party (other than an assignee of Lessor) from acquiring or having the right under any circumstances to acquire any interest in the Equipment or this Lease. Provided no Event of Default has occurred and remains uncured hereunder, Lessor warrants that neither Lessor nor persons or entities claiming through Lessor shall interfere with Lessee's quiet use and possession of the Equipment in accordance with the terms of this Lease.
4. DISCLAIMER OF WARRANTIES LESSOR IS NOT THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, NOR THE AGENT THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY MATTER WHATSOEVER, INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY OF THE EQUIPMENT, ITS FITNESS FOR A PARTICULAR PURPOSE, ITS DESIGN OR CONDITION, ITS CAPACITY OR DURABILITY, THE QUALITY OF THE MATERIAL OR WORKMANSHIP IN THE MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT, OR THE CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS AND SPECIFICATIONS OF ANY PURCHASE ORDER RELATING THERETO, OR PATENT INFRINGEMENTS, AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSOR IS NOT RESPONSIBLE FOR ANY REPAIRS OR SERVICE TO THE EQUIPMENT, DEFECTS THEREIN OR FAILURES IN THE OPERATION THEREOF. Lessee has made the selection of each item of Equipment and the manufacturer and/or supplier thereof based on its own judgment and expressly disclaims any reliance upon any statements or representations made by Lessor.
For so long as no Event of Default (or event or condition which, with the passage of time or giving of notice, or both, would become such an Event of Default) has occurred and is continuing, Lessee shall be the beneficiary of, and shall be entitled to, all rights under any applicable manufacturer's or vendor's warranties with respect to the Equipment, to the extent permitted by law.
If the Equipment is not delivered, is not properly installed, does not operate as warranted, becomes obsolete, or is unsatisfactory for any reason whatsoever, Lessee shall make all claims on account thereof solely against the manufacturer or supplier and not against Lessor, and Lessee shall nevertheless pay all rentals and other sums payable hereunder. Lessee acknowledges that neither the manufacturer or supplier of the Equipment, nor any sales representative or agent thereof, is an agent of Lessor, and no agreement or representation as to the Equipment or any other matter by any such sales representative or agent of the manufacturer or supplier shall in any way affect Lessee's obligations hereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS Lessee represents and warrants to and covenants with Lessor that:
(a) Lessee has the form of business organization indicated above and
is duly organized and existing in good standing under the laws of the state
listed in the caption of this Master Lease and is duly qualified to do
business wherever necessary to carry on its present business and operations
and to own its property; (b) this Lease has been duly authorized by all
necessary action on the part of Lessee consistent with its form of
organization, does not require any further shareholder or partner approval,
does not require the approval of, or the giving notice to, any federal,
state, local or foreign governmental authority and does not contravene any
law binding on Lessee or contravene any certificate or articles of
incorporation or by-laws or partnership certificate or agreement, or any
agreement, indenture, or other instrument to which Lessee is a party or by
which it may be bound; (c) this Lease has been duly executed and delivered
by authorized officers or partners of Lessee and constitutes a legal, valid
and binding obligation of Lessee enforceable in accordance with its terms;
(d) Lessee has not and will not, directly or indirectly, create, incur or
permit to exist any lien, encumbrance, mortgage, pledge, attachment or
security interest on or with respect to the Equipment or this Lease (except
those of persons claiming by, through or under Lessor); (e) the Equipment
will be used solely in the conduct of Lessee's business and will remain in
the location shown on the applicable Lease Schedule unless Lessee provides
Lessor with prior written notice of its intention to relocate the Equipment
and has completed all other notifications, filings, recordings and other
actions in such new location as Lessor may reasonably request to protect
Lessor's interest in the Equipment; (f) there are no pending or threatened
actions or proceedings before any court or administrative agency which
materially adversely affect Lessee's financial condition or operations, and
all credit, financial and other information provided by Lessee or at Lessee's
direction is, and all such information hereafter furnished will be, true,
correct and complete in all material respects; (g) Lessor has not selected,
manufactured or supplied the Equipment to Lessee and has acquired any
Equipment subject hereto solely in connection with this Lease and Lessee has
received and approved the terms of any purchase order or agreement with
respect to the Equipment; (h) until all obligations of Lessee under all
Leases hereunder shall have been paid and/or performed in full, Lessee
covenants and agrees to provide to Lessor a copy of Lessee's FOCUS Report (or
successor applicable form) as of the end of each calendar quarter as soon as
such FOCUS Report is available, but in no case later than thirty (30)
from the end of such calendar quarter; and (i) Lessee shall maintain a
Required Capital Ratio as of the end of each calendar quarter of not less than
3.75 to 1.00. "Required Capital Ratio" means, at any date with respect to the
Lessee, the ratio of (i) its Net Capital to (ii) its Minimum Net Capital
Requirement. "Net Capital" means, at any date, the net capital of Lessee
as (i) computed from time to time in accordance with paragraph (c) of
Rule 15c3-1 and reported on line 3750 of Lessee's FOCUS Report (or successor
applicable form) as of such date or (ii) in the event Lessee's Net Capital is
no longer reported in its FOCUS Report (or successor applicable form),
computed in a manner consistent with the methodology used to calculate Net
Capital for Lessee's last available FOCUS Report and as otherwise acceptable
to Lessor and Lessee and certified as true and correct by Lessee's Chief
Financial Officer on a quarterly basis ("Compliance Certificate"). "Minimum
Net Capital Requirement" means, at any date, the minimum Net Capital required
for Lessee and its affiliates (i) computed in accordance with, and reported on
line 3760 of Lessee's FOCUS Report (or successor applicable form) as of such
date or (ii) in the event Lessee's Minimum Net Capital Requirement is no
longer reported in Lessee's FOCUS Report (or successor applicable form),
computed in a manner consistent with the methodology used to calculate Minimum
Net Capital Requirement for Lessee's last available FOCUS Report and as
otherwise acceptable to Lessor and Lessee and as certified as true and
correct by Lessee's Chief Financial Officer on a quarterly basis in the
Compliance Certificate.
6. INDEMNITY
Lessee assumes the risk of liability for, and hereby agrees to indemnify
and hold safe and harmless on an after tax basis, and covenants to defend,
Lessor, its employees, servants and agents from and against: (a) any and all
liabilities, losses, damages, claims and expenses (including legal expenses
of every kind and nature) arising out of the manufacture, purchase, shipment
and delivery of the Equipment to Lessee, acceptance or rejection, ownership,
titling, registration, leasing, possession, operation, use, return or other
disposition of the Equipment, including, without limitation, any liabilities
that may arise from patent or latent defects in the Equipment (whether or not
discoverable by Lessee), any claims based on absolute tort liability or
warranty and any claims based on patent, trademark or copyright infringement;
(b) any and all loss or damage of or to the Equipment; and (c) any obligation
or liability to the manufacturer or any supplier of the Equipment arising
under any purchase orders issued by or assigned to Lessor.
7. TAXES AND OTHER CHARGES Lessee agrees to comply with all laws, regulations and governmental orders related to this Lease and to the Equipment and its use or possession, and to pay when due, and to defend and indemnify Lessor against liability for all license fees, assessments, and sales, use, property, excise, privilege and other taxes (including any related interest or penalties) or other charges or fees now or hereafter imposed by any governmental body or agency upon any Equipment, or with respect to the manufacturing, ordering, shipment, purchase, ownership, delivery, installation, leasing, operation, possession, use, return, or other disposition thereof or the rentals hereunder (other than taxes on or measured solely by the net income of Lessor). Any fees, taxes or other lawful charges paid by Lessor upon failure of Lessee to make such payments shall at Lessor's option become immediately due from Lessee to Lessor. Provided no Event of Default has occurred and remains uncured, Lessee shall prepare, pay and file all personal property tax returns with respect to the Equipment on or before the due date therefor and shall indemnify and hold Lessor harmless from and against any and all claims, costs, penalties, interest arising as a result of Lessee assuming responsibility for such property taxes.
8. DEFAULT Lessee shall be in default of this Lease upon the occurrence of any one or more of the following events (each an "EVENT OF DEFAULT"):
(a) Lessee shall fail to make any payment, of rent or otherwise, under any Lease within 10 days of the date when due (provided Lessor is not restricted under applicable law in its ability to provide notice to Lessee, Lessor shall provide notice to Lessee of the failure to pay an amount when due hereunder prior to declaring an Event of Default); or (b) Lessee shall fail to obtain or maintain any of the insurance required under any Lease;
or (c) Lessee shall fail to perform or observe any covenant, condition or agreement under any Lease, and such failure continued for 30 days after notice thereof to Lessee; or (d) Lessee shall default in the payment or performance of any indebtedness or obligation to Lessor having a principal balance of $5,000,000 or more under any loan, note, security agreement, lease, guaranty, title retention or conditional sales agreement or any other instrument or agreement evidencing such indebtedness with Lessor; or (e) any representation or warranty made by Lessee herein or in any certificate, agreement, statement or document hereto or hereafter furnished to Lessor in connection herewith, including without limitation, any financial information disclosed to Lessor, shall prove to be false or incorrect in any material respect; or (f) death or judicial declaration of incompetence of Lessee, if an individual; the commencement of any bankruptcy, insolvency, arrangement, reorganization, receivership, liquidation or other similar proceeding by Lessee or any of its properties or businesses, or the appointment of a trustee, receiver, liquidator or custodian for Lessee or any of its properties of business, or if Lessee suffers the entry of an order for relief under Title 11 of the United States Code; or the making by Lessee of a general assignment or deed of trust for the benefit of creditors; or the commencement of any bankruptcy, insolvency, arrangement, reorganization, receivership, liquidation or other similar proceeding against Lessee or any of its properties or businesses, or the appointment of a trustee, receiver, liquidator or custodian for Lessee or any of its properties of business, or if Lessee suffers the entry of an order for relief under Title 11 of the United States Code and in each case such involuntary proceeding is not dismissed with sixty (60) days of the filing thereof; or (g) Lessee shall default in any payment or other obligation under a material agreement (original principal amount of $5,000,000 or more) and any applicable grace or cure period with respect thereto has expired; or (h) Lessee shall terminate its existence by merger, consolidation, sale of substantially all of its assets or otherwise, unless otherwise consented to by Lessor, such consent not to be unreasonably withheld or delayed; or (i) if Lessee is a privately held entity, and during any rolling twelve month period more than 50% of Lessee's voting capital stock or other equivalent ownership interest, or effective control of such stock or interest in Lessee, issued and outstanding from time to time, is not retained by the holders of such stock or interest as of the beginning of such rolling twelve month period, unless otherwise consented to by Lessor, such consent not to be unreasonably withheld or delayed; or (j) if Lessee is a publicly held corporation, there shall be a change in the ownership of Lessee's stock such that Lessee is no longer subject to the reporting requirements of the Securities Exchange Act of 1934, or no longer has a class of equity securities registered under Section 12 of the Securities Act of 1933, unless otherwise consented to by Lessor, such consent not to be unreasonably withheld or delayed; or (k) any event or condition set forth in subsections (b) through (k) of this Section 8 shall occur with respect to any guarantor or other person responsible, in whole or in part, for payment or performance of this Lease; or (l) any event or condition set forth in subsections (d) through (j) shall occur with respect to any affiliated firm or entity controlling, controlled by or under common control with Lessee. Lessee shall promptly notify Lessor of the occurrence of any Event of Default or the occurrence or existence of any event or condition, which, upon the giving of notice of lapse of time, or both, may become an Event of Default.
9. REMEDIES; MANDATORY PREPAYMENT Upon the occurrence of any Event of Default, Lessor may, at its sole option and discretion, exercise one or more of the following remedies with respect to any or all of the Equipment: (a) cause Lessee to promptly return, at Lessee's expense, any or all Equipment to such location as Lessor may designate in accordance with the terms of Section 18 of this Master Lease, or Lessor, at its option, may enter upon the premises where the Equipment is located and take immediate possession of and remove the same by summary proceedings or otherwise and at all times in compliance with applicable law, all without liability to Lessor for or by reason of damage to property or such entry or taking possession except for Lessor's gross negligence or willful misconduct; (b) sell any or all Equipment at public or private sale or otherwise dispose of, hold, use, operate, lease to others or keep idle the Equipment, all as Lessor in its sole discretion may determine and all free and clear of any rights of Lessee and otherwise in compliance with applicable law; (c) remedy such default, including making repairs or modifications to the Equipment, for the account and expense of Lessee, and Lessee agrees to reimburse Lessor for all of Lessor's costs and expenses; (d) by written notice to Lessee, cancel the Lease with respect to any or all Lease Schedules and the Equipment subject thereto, as such notice shall specify, and, with respect to such cancelled Lease Schedules and Equipment, declare immediately due and payable and recover from Lessee, as liquidated damages for loss of Lessor's bargain and not as a penalty, an amount equal to the Stipulated Loss Value, calculated as of the next following Rental Payment Date; (e) apply any deposit or other cash collateral or sale or remarketing proceeds of the Equipment at any time to reduce any amounts due to Lessor, and (f) exercise any other right or remedy which may be available to Lessor under applicable law, or proceed by appropriate court action to enforce the terms hereof or to recover damages for the breach hereof, including reasonable attorneys' fees and court costs. Notice of Lessor's intention to accelerate, notice of acceleration, notice of nonpayment, presentment, protest, notice of dishonor, or any other notice whatsoever are hereby waived by Lessee and any endorser, guarantor, surety or other party liable in any capacity for any of the Lessee's obligations under or in respect of the Lease. No remedy referred to in this Section 9 shall be exclusive, but each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at law or in equity.
The exercise or pursuit by Lessor of any one or more of such remedies
shall not preclude the simultaneous or later exercise or pursuit by Lessor of
any or all such other remedies, and all remedies hereunder shall survive
termination of this Lease. At any sale of the Equipment pursuant to this
Section 9, Lessor may bid for the Equipment. Notice required, if any, of any
sale or other disposition hereunder by Lessor shall be satisfied by the
mailing of such notice to Lessee at least seven (7) days prior to such sale
or other disposition. In the event Lessor takes possession and disposes of
the Equipment, the proceeds of any such disposition shall be applied in the
following order: (1) to all of Lessor's costs, charges and expenses incurred
in taking, removing, holding, repairing and selling or leasing the Equipment;
(2) to the extent not previously paid by Lessee, to pay Lessor for any
damages then remaining unpaid hereunder; (3) to reimburse Lessee for any sums
previously paid by Lessee as damages hereunder; and (4) the balance, if any,
shall be retained by Lessor. A cancellation shall occur only upon written
notice by Lessor and only with respect to such Equipment, as Lessor shall
specify in such notice. Cancellation under this Section 9 shall not affect
Lessee's duty to perform Lessee's obligations hereunder to Lessor in full.
Lessee agrees to reimburse Lessor on demand for any and all costs and
expenses incurred by Lessor in enforcing its rights and remedies hereunder
following the occurrence of an Event of Default, including, without
limitation, reasonable attorney's fees, and the costs of repossession,
storage, insuring, reletting, selling and disposing of any and all Equipment.
and in use), all discounted to net present value at a discount rate equal to the 1-year Treasury Constant Maturity rate as published in the Selected Interest Rates table of the Federal Reserve statistical release H.15(519) for the week ending immediately prior to the original Acceptance Date for such Equipment, plus fifty basis points.
Lessee is or may become indebted under or in respect of one or more leases, loans, notes, credit agreements, reimbursement agreements, security agreements, title retention or conditional sales agreements, or other documents, instruments or agreements, whether now existing or hereafter arising, evidencing Lessee's obligations for the payment of borrowed money or other financial accommodations ("OBLIGATIONS") owing to FCC, or to one or more affiliated persons, firms or entities controlling, controlled by or under common control with Lessor ("AFFILIATES"). If Lessee pays or prepays all or substantially all of its Obligations owing to any Affiliate, whether or not such payment or prepayment is voluntarily or involuntarily made by Lessee before or after any default or acceleration of such Obligations, then Lessee shall pay, at Lessor's option and immediately upon notice from Lessor, all or any part of Lessee's Obligations owing to Lessor, including but not limited to Lessee's payment of Stipulated Loss Value for all or any Lease Schedules as set forth in such notice from Lessor.
10. ADDITIONAL SECURITY For so long as any obligations of Lessee shall remain outstanding under any Lease, Lessee hereby grants to Lessor a security interest in all of Lessee's rights in and to Equipment subject to such Lease from time to time, to secure the prompt payment and performance when due (by reason of acceleration or otherwise) of each and every indebtedness, obligation or liability of Lessee, or any affiliated person, firm, or entity controlling, controlled by, or under common control with Lessee, owing to Lessor, whether now existing or hereafter arising, including but not limited to all of such obligations under or in respect of any Lease. The extent to which Lessor shall have a purchase money security interest in any item of Equipment under a Lease which is deemed to create a security interest under Section 1-201(37) of the Uniform Commercial Code shall be determined by reference to the Acquisition Cost of such item financed by Lessor. In order to more fully secure its rental payments and all other obligations to Lessor hereunder, Lessee hereby grants to Lessor a security interest in any deposit of Lessee to Lessor under Section 3(d) of any Lease Schedule hereto. Such security deposit shall not bear interest, may be commingled with other funds of Lessor and shall be immediately restored by Lessee if applied under Section 9. Upon expiration of the Lease Term of this Lease and satisfaction of all of Lessee's obligations, the security deposit shall be returned to Lessee. The term "LESSOR" as used in this Section 10 shall include any affiliated person, firm or entity controlling, controlled by or under common control with Lessor.
11. NOTICES Any notices or demands required or permitted to be given under this Lease shall be given in writing and by regular mail and shall become effective when deposited in the United States mail with postage prepaid to Lessor to the attention of Customer Accounts, and to Lessee at the address set forth above and to the attention Steve Novik, or to such other address as the party to receive notice hereafter designates by such written notice.
Lessee hereby assumes all risk of loss, damage or destruction for
whatever reason to the Equipment from and after the earlier of the date
(i) on which the Equipment is ordered or (ii) Lessor pays the purchase price
of the Equipment, and continuing until the Equipment has been returned to,
and accepted by, Lessor in the condition required by Section 18 hereof upon
the expiration of the Lease Term. If during the Lease Term all or
any portion of an item of Equipment shall become lost, stolen, destroyed, damaged beyond repair or rendered permanently unfit for use for any reason, or in the event of any condemnation, confiscation, theft or seizure or requisition of title to or use of such item, Lessee shall immediately pay to Lessor an amount equal to the Stipulated Loss Value of such item of Equipment, as of the next following Rental Payment Date.
13. INSURANCE
Lessee shall procure and maintain insurance in such amounts and upon
such terms and with such companies as Lessor may approve, such approval not
to be unreasonably withheld or delayed, during the entire Lease Term and
until the Equipment has been returned to, and accepted by, Lessor in the
condition required by Section 18 hereof, at Lessee's expense, provided that
in no event shall such insurance be less than the following coverages and
amounts: (a) Worker's Compensation and Employer's Liability Insurance, in the
full statutory amounts provided by law; (b) Comprehensive General Liability
Insurance including product/completed operations and contractual liability
coverage, with minimum limits of $1,000,000 each occurrence, and Combined
Single Limit Body Injury and Property Damage, $1,000,000 aggregate, where
applicable; and (c) All Risk Physical Damage Insurance, including earthquake
and flood, on each item of Equipment, in an amount not less than the greater
of the Stipulated Loss Value of the Equipment or (if available) its full
replacement value. Lessor will be included as an additional insured and loss
payee as its interest may appear. Such policies shall be endorsed to provide
that the coverage afforded to Lessor shall not be rescinded, impaired or
invalidated by any act or neglect of Lessee. Lessee agrees to waive Lessee's
right and its insurance carrier's rights of subrogation against Lessor for
any and all loss or damage. Provided no Event of Default has occurred
and remains uncured hereunder, Lessee may, except as set forth below,
self-insure for the risk of loss and/or damage to the Equipment described in
Section 13(c) above, to the extent it self insures similar equipment which
it owns or leases against loss and damage, and provided further that such
self-insurance program (i) is consistent with prudent industry practice with
respect to equipment similar to the Equipment, (ii) is primary, without right
of contribution from any insurance carried by Lessor and (iii) Lessee
guarantees payment to Lessor for any loss or damage to any item of Equipment.
Lessee agrees that if items of Equipment having an original cost of $1,000,000
are located in one facility at any time ("Equipment Concentration"), Lessee
shall procure the risk of loss insurance coverage described in (c) above for
such Equipment Concentration through an insurance provider acceptable to
Lessor and shall provide Lessor with evidence of such insurance coverage.
14. LIMITATION OF LIABILITY Lessor shall have no liability in connection with or arising out of the ownership, leasing, furnishing, performance or use of the Equipment (except to the extent directly caused by Lessor's gross negligence or willful misconduct) or any special, indirect, incidental or consequential damages of any character, including, without limitation, loss of use of production facilities or equipment, loss of profits, property damage or lost production, whether suffered by Lessee or any third party.
15. FURTHER ASSURANCES Lessee shall promptly execute and deliver to Lessor such further documents and take such further action as Lessor may require in order to more effectively carry out the intent and purpose of this Lease. Lessee shall provide to Lessor, within 120 days after the close of each of Lessee's fiscal years, and, upon Lessor's request, within 45 days of the end of each quarter of Lessee's fiscal year, a copy of its financial statements prepared in accordance with generally accepted accounting principles and, in the case of annual financial statements, audited by independent certified public accountants, and in the case of quarterly financial statements certified by Lessee's chief financial officer. Lessee shall execute and deliver to Lessor upon Lessor's request any and all schedules, forms and other reports and information as Lessor may deem necessary or appropriate to respond to requirements or regulations imposed by any governmental authorities. Lessee shall execute and deliver to Lessor upon Lessor's request such further and additional documents, instruments and assurances as Lessor reasonably deems necessary (a) to acknowledge and confirm, for the benefit of Lessor or any assignee or transferee of any of Lessor's rights, title and interests hereunder (an "ASSIGNEE"), all of the terms and conditions of all or any part of this Lease and Lessor's or Assignee's rights with respect thereto, and Lessee's compliance with all of the terms and provisions hereof and (b) to preserve, protect and perfect Lessor's or Assignee's right, title or interest hereunder and in any Equipment, including, without limitation, such UCC financing statements or amendments, corporate resolutions, certificates of compliance, notices of assignment or transfers of interests, and restatements and reaffirmations of Lessee's obligations and its representations and warranties with respect thereto as of the dates requested by Lessor from time to time. In furtherance thereof, Lessor may file or record this Lease or a memorandum or a photocopy hereof (which for the purposes hereof shall be effective as a financing statement) so as to give notice to third parties, and Lessee hereby appoints Lessor as its attorney-in-fact to execute, sign, file and record UCC financing statements and other lien recordation documents with respect to the Equipment where Lessee fails or refuses to do so after Lessor's written request, and Lessee agrees to pay or reimburse Lessor for any filing, recording or stamp fees or taxes arising from any such filings. Lessor may file or record a memorandum of this Lease so as to give notice to third parties.
16. ASSIGNMENT This Lease and all rights of Lessor hereunder shall be assignable by Lessor absolutely or as security, without notice to Lessee, subject to the rights of Lessee hereunder for the use and possession of the Equipment for so long as no Event of Default has occurred and is continuing hereunder. Any such assignment shall not relieve Lessor of its obligations hereunder unless specifically assumed by the assignee, and LESSEE AGREES IT SHALL NOT ASSERT ANY DEFENSE, RIGHTS OF SET-OFF OR COUNTERCLAIM AGAINST ANY ASSIGNEE TO WHICH LESSOR SHALL HAVE ASSIGNED ITS RIGHTS AND INTERESTS HEREUNDER, NOR HOLD OR ATTEMPT TO HOLD SUCH ASSIGNEE LIABLE FOR ANY OF LESSOR'S OBLIGATIONS HEREUNDER. No such assignment shall materially increase Lessee's obligations hereunder. LESSEE SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS RIGHTS OR OBLIGATIONS UNDER THIS LEASE OR ENTER INTO ANY SUBLEASE WITH RESPECT TO ANY OF THE EQUIPMENT WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF LESSOR WHICH WILL NOT BE UNREASONABLY WITHHELD OR DELAYED.
17. LESSEE'S OBLIGATION UNCONDITIONAL This Lease is a net lease and Lessee hereby agrees that it shall not be entitled to any abatement of rents or of any other amounts payable hereunder by Lessee, and that its obligation to pay all rent and any other amounts owing hereunder shall be absolute and unconditional under all circumstances, including, without limitation, the following circumstances: (i) any claim by Lessee to any right of set-off, counterclaim, recoupment, defense or other right which Lessee may have against Lessor, any seller or manufacturer of any Equipment or anyone else for any reason whatsoever; (ii) the existence of any liens, encumbrances or rights of others whatsoever with respect to any Equipment, whether or not resulting from claims against Lessor not related to the ownership of such Equipment; or (iii) any other event or circumstances whatsoever. Each Rental Payment or other amount paid by Lessee hereunder shall be final and Lessee will not seek to recover all or any part of such payment from Lessor for any reason whatsoever.
20. TAX INDEMNIFICATION
20.1 This Lease has been entered into by Lessor and Lessee under the assumption that Lessor or its affiliated group ("Affiliated Group"), as defined in Section 1504 of the Internal Revenue Code of 1986, as amended, (the "Code") will be treated as the owner of the Equipment and will be entitled to such deductions and other benefits that are provided by the Code including, without limitation, deductions for the recovery of the Acquisition Cost of the Equipment, over the recovery period ("Recovery Period") set forth on the applicable Equipment Schedule, using the Modified Accelerated Cost Recovery System as provided by Section 168 of the Code ("MACRS Deductions"). Notwithstanding such assumption, Lessee shall not be liable to Lessor in the event that such assumption (or any part thereof) is determined to be incorrect, except as provided in Section 20.3(a) hereof.
20.2 Lessee represents, covenants and warrants the following: (a)
Neither Lessee, nor any affiliate of Lessee, nor any other party since the
Lease Term Commencement Date (i) has claimed or will claim any MACRS
Deductions, or any other deductions in the nature of cost recovery or
depreciation with respect to the Equipment, or (ii) has made or will make
any election under the Code regarding the method or the period for cost
recovery or deductions for personal property which will be binding upon
Lessor and which will adversely affect the assumptions set forth in Section
20.1 above with respect to the Equipment or (iii) shall, at any time, take
any action or file any returns or other documents inconsistent with the
assumptions set forth in Section 20.1 above, provided that entering into
this Lease shall not be construed as an inconsistent action within the
meaning of this Subsection (iii). (b) In the event the Equipment has been
sold to Lessor by Lessee and leased back from Lessor by Lessee, such
Equipment does not constitute property placed in service in a churning
transaction within the meaning of Section 168(f)(5) of the Code. (c) The
Equipment has not been manufactured or produced in any foreign country which
is subject to an Executive Order of the President of the United States that
would deny the availability of MACRS Deductions to Lessor. (d) The
Acquisition Cost of the Equipment does not exceed the fair market value of
the Equipment. (e) When delivered and accepted under the Lease, the
Equipment will not require any improvements, modifications, or additions
(other than ancillary or incidental items of removable equipment) in order
to be rendered complete for its intended use by Lessee. (f) At the time the
Equipment is accepted under the Lease, Lessee and, if applicable, any member
of its Affiliated Group shall have been fully reimbursed for any portion of
the Acquisition Cost of the Equipment which it may have furnished;
furthermore, on the applicable Lease Term Commencement Date and during the
Lease Term, neither Lessee nor any member of its Affiliated Group shall have
any investment in the Equipment. (g) The Equipment will be placed in service
on the applicable Lease Term Commencement Date and will be used in a trade
or business or will be held for the production of income within the meaning
of Section 167 of the Code. (h) From the applicable Lease Term Commencement
Date and during the Lease Term, the Equipment will constitute and will be
treated as (i) "recovery property" within the meaning of Section 168 of the
Code, and (ii) property with the Recovery Period set forth in the applicable
Equipment Schedule determined in accordance with Section 168(c) of the Code.
(i) From the applicable Lease Term Commencement Date and during the Lease
Term, the Equipment will not constitute, or be treated as, (i) "tax exempt
use property" within the meaning of Section 168(h) of the Code which would
cause Lessor to fail to realize, lose, or suffer diminution, deferral, or
recapture of any of the MACRS Deductions described in Section 18.1 above, or
(ii) "limited use property" within the meaning of Rev. Proc. 2001-26,
2001-19 I.R.B. (j) During the Lease Term, the Equipment will not be used
"predominantly
outside the United States" within the meaning of Section 168(g)(4) of the Code. (k) During the Lease Term, Lessor shall not be required to include in its gross income for Federal income tax purposes any amount derived from the cost of any alteration, addition, improvement, modification, replacement, or substitution of the Equipment (unless such alteration, addition, improvement, modification, replacement or substitution is required by the provisions of this Lease) or from any refund or credit from the manufacturer or supplier of the Equipment.
20.3 A tax loss ("Tax Loss") shall be deemed to have occurred under
this Section 18 if Lessor or its Affiliated Group, for Federal income tax
purposes, shall not be entitled to, shall not be allowed, shall suffer
recapture of or shall lose any of the MACRS Deductions, as a result of:
(a) Lessee's breach of, or its failure to comply with, any representation,
covenant, or warranty set forth in Section 20.2 above, or the inaccuracy of
any such representation; (b) the occurrence of an Event of Default as defined
in Section 8 of the Master Lease; (c) the replacement, substitution, loss,
seizure, condemnation, destruction or governmental requisitioning of the
Equipment; or (d) any act (whether or not permitted or required under this
Master Lease) or any omission of Lessee, any affiliate of Lessee, any
sublessee or assignee of Lessee, or any entity, other than Lessor, having
possession control or use of the Equipment (whether or not such possession,
control or use may be authorized or unauthorized).
20.4 (a) Except as provided in Sections 20.4(b), if a Tax Loss occurs,
then Lessee shall pay to Lessor, upon demand a sum to be computed by Lessor
in the following manner. Such sum, after deduction of all Federal, state and
local income taxes payable by Lessor as a result of the receipt of such
sum, shall be sufficient to restore Lessor or its Affiliated Group to
substantially the same position, on an after-tax basis, as it would have
been in but for the loss of such MACRS Deductions. In making its computation,
Lessor or its Affiliated Group shall consider, but shall not be limited to,
the following factors: (i) the amounts and timing of any net loss of tax
benefits resulting from any such lack of entitlement to or loss, recapture,
or disallowance of MACRS Deductions but offset by any tax benefits derived
from any depreciation or other capital recovery deductions or exclusions
from income allowed to Lessor or its Affiliated Group with respect to the
same Equipment; (ii) penalties, interest or other charges imposed;
(iii) difference in tax years involved; and (iv) the time value of money at
a reasonable rate determined, in `good faith', by Lessor. For purposes of
computation only, the amount of indemnification payments hereunder shall be
calculated on the assumption that Lessor and its Affiliated Group have or
will have, in all tax years involved, sufficient taxable income and tax
liability to realize all tax benefits and incur all losses of tax benefits at
the highest marginal Federal corporate income tax rate in each year. Upon
request, Lessor shall provide Lessee with the methods of computation used
in determining any sum that may be due and payable by Lessee under this
Section 20. (b) If Lessor shall suffer a Tax Loss with respect to the
Equipment, Lessee shall not be required to make any indemnity payment to
Lessor provided for in this Section 20 unless Lessor shall have received
either (i) written advice from the Internal Revenue Service of a proposed
disallowance or adjustment which gives rise to an indemnity obligation under
this Section 20 and, in the event Lessee has requested Lessor to contest such
disallowance or adjustment pursuant to Section 20.5 and except for any
provisional payment required thereunder, the expiration or abandonment of any
such contest shall have occurred, or (ii) an opinion of independent tax counsel
selected by Lessor and reasonably acceptable to Lessee which opinion provides
that there is no reasonable basis to claim such MACRS Deductions, or to avoid
reporting such recapture income. In the case of a Tax Loss arising by reason
of any refund or credit described in Section 20.2(k), Lessor agrees, on the
date on which a tax adjustment is made, to adjust the Monthly Rent payable
by Lessee under this Lease to reflect the decreased Acquisition Cost resulting
from such credit or refund (including any refund due on prior rents paid by
Lessee hereunder).
20.5(a) Upon receipt by Lessor of written advice from the Internal
Revenue Service of a proposed disallowance or adjustment which gives rise to
an indemnity obligation under this Section 18 (the "Claim"), Lessor will
notify Lessee in writing. Upon the written request of Lessee which must be
received by Lessor within 45 days of such notice, Lessor shall contest the
Claim provided that (i) an Event of Default under Section 8 of this Master
Lease has not occurred and is continuing, (ii) Lessee has furnished Lessor
with a written opinion of independent tax counsel acceptable to Lessor to
the effect that there is a meritorious defense to the Claim, and (iii)
Lessee shall have agreed, in writing, to pay Lessor, on demand and
regardless of the outcome, all expenses which Lessor may incur in contesting
the Claim including, without limitation, legal and accounting fees. Lessor
shall, thereupon, contest the Claim in any permissible forum selected by
Lessor either by resisting payment of the Claim or by making payment of the
Claim and suing for a refund. If Lessor determines to pay the Claim and sue
for a refund, Lessee shall, within 10 days of Lessor's written request, pay
to Lessor an amount equal to the sum, on an after-tax basis, of the Claim
which the Internal Revenue Service requires to be paid. During any
proceedings in connection with the Claim, Lessor shall control all
negotiations and litigation but shall, from time to time, consult with
Lessee or its counsel. Upon any adverse decision on the Claim in the forum
chosen by Lessor, Lessor shall institute an appeal if requested to do so by
Lessee provided that independent tax counsel acceptable to Lessor furnishes
Lessor with a written opinion to the effect that there is a meritorious
basis for an appeal. Notwithstanding the foregoing, Lessor shall not be
obligated to appeal any such adverse decision beyond the United States
District Courts or the United States Tax Court. (b) A "Final Determination"
of the Claim means a final decision of the Internal Revenue Service or a
court of competent jurisdiction after all contests or appeals requested by
Lessee pursuant to Section 20.5(a) have been either exhausted or terminated
as may be agreed upon by Lessor and Lessee. If the Final Determination of
the Claim is all or partly adverse to Lessor, the liability, of Lessee to
indemnify Lessor shall be fixed and payable as provided in Section 20.4
provided, however, that Lessor shall credit Lessee with any amounts
previously paid by Lessee under Section 20.5(a) above. If the Final
Determination of the Claim is all or partly in favor of Lessor, then Lessor,
upon receipt of any refund from the Internal Revenue Service, shall
reimburse Lessee the portion of such refund which exceeds the indemnity
obligation of Lessee under this Section 20 with respect to any portion of
the Claim not resolved in favor of Lessor. (c) Notwithstanding the
provisions of this Section 20.5, Lessor may decline to contest all or any
portion of the Claim upon written notice to Lessee and Lessee shall
thereupon be relieved of its obligation to indemnify Lessor under this
Section 20 with respect to the portion of the Claim described in the notice.
(d) Nothing in this Section 20.5 shall be construed as granting any right to
Lessee to request a contest of any lack of entitlement to, or any loss,
disallowance or recapture of MACRS Deductions arising in connection with
events described in the second paragraph of Section 12 of the Master Lease,
or from a sale or other disposition of the Equipment upon an Event of
Default as set forth in Section 8 of the Master Lease.
20.6 The representations, obligations and indemnities of Lessee under this Section 20 shall continue in full force and effect, notwithstanding the expiration or other termination of this Lease.
21. MISCELLANEOUS; ENFORCEABILITY AND GOVERNING LAW The term "LESSEE" as used in the Lease shall mean and include any and all Lessees who sign below, each of whom shall be jointly and severally liable under the Lease. This Master Lease will not be binding on Lessor until accepted and executed by Lessor, notice of which is hereby waived by Lessee. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given. Time is of the essence in the payment and performance of all of Lessee's obligations under the Lease. The captions in this Lease are for convenience only and shall not define or limit any of the terms hereof.
Any provisions of this Lease which are unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions hereof, and any such unenforceability in any jurisdiction shall not render unenforceable such provisions in any other jurisdiction. To the extent permitted by applicable law, Lessee hereby waives; (a) any provisions of law which render any provision hereof unenforceable in any respect; (b) all rights and remedies under Rhode Island General Laws Sections 6A-2.1-508 through 522 or corresponding provisions of the Uniform Commercial Code article or division pertaining to personal property leasing in any jurisdiction in which enforcement of this Lease is sought.
THIS LEASE AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF RHODE ISLAND, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. LESSEE HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF RHODE ISLAND AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ITS OBLIGATIONS HEREUNDER, AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT MAY HAVE TO THE VENUE OF SUCH COURTS. LESSEE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS LEASE. Any action by Lessee against Lessor for any cause of action relating to this Lease shall be brought within one year after any such cause of action first arises.
THIS LEASE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES CONCERNING
THE LEASE OF THE EQUIPMENT AND CONSTITUTES THE ENTIRE AGREEMENT BETWEEN
THE PARTIES SUPERSEDING ANY AND ALL CONFLICTING TERMS OR PROVISIONS OF ANY
PRIOR PROPOSALS, COMMITMENT LETTERS, TERM SHEETS OR OTHER AGREEMENTS OR
UNDERSTANDINGS BETWEEN THE PARTIES. THIS LEASE MAY NOT BE CONTRADICTED BY
EVIDENCE OF (i) ANY PRIOR WRITTEN OR ORAL AGREEMENTS OR UNDERSTANDINGS, OR
(ii) ANY CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS
BETWEEN THE PARTIES, AND LESSEE ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL
OR WRITTEN AGREEMENTS OR UNDERSTANDINGS EXIST AS OF THE DATE OF THIS LEASE.
THIS LEASE MAY NOT BE AMENDED, NOR MAY ANY RIGHTS UNDER THE LEASE BE WAIVED,
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY CHARGED WITH SUCH
AMENDMENT OR WAIVER.
Executed and delivered by duly authorized representatives of the parties hereto as of the date set forth below.
FLEET CAPITAL CORPORATION EDWARD D. JONES & CO., L.P.
By: /s/ Michael Kelleher By: /s/ Steven Novik
----------------------------- -----------------------------
Name: Michael Kelleher Name: Steven Novik
----------------------------- -----------------------------
Title: Vice-President Title: Principal
----------------------------- -----------------------------
|
DATED AS OF AUGUST 27, 2001
EDJ LEASING CO., L.P.
and
SOUTHTRUST BANK
TABLE OF CONTENTS
ARTICLE PAGE
------- ----
ARTICLE I 1
1. DEFINITIONS 1
1.1 Defined Terms 1
-------------
1.2 Accounting Terms 13
----------------
1.3 Construction of Terms 13
---------------------
1.4 Computation of Time Periods 13
---------------------------
ARTICLE II 14
2. THE LOAN 14
2.1 General Terms 14
-------------
2.2 Disbursement of the Loan 14
------------------------
2.3 The Note 14
--------
2.4 Interest Rate 14
-------------
2.5 Payments of Principal and Interest 15
----------------------------------
2.6 Use of Proceeds of Loan 15
-----------------------
ARTICLE III 15
3. PAYMENTS, ADDITIONAL COSTS, ETC. 15
3.1 Payment to Bank 15
---------------
3.2 Late Payments 16
-------------
3.3 Prepayment 16
----------
3.4 Default Rate 16
------------
3.5 No Setoff or Deduction 16
----------------------
3.6 Payment on Non-Business Day; Payment Computations 17
-------------------------------------------------
3.7 Indemnification 17
---------------
3.8 360-Day Year 17
------------
3.9 No Requirement to Actually Obtain Funds 17
---------------------------------------
3.10 Usury Limitation 17
----------------
ARTICLE IV 18
4. CONDITIONS PRECEDENT 18
4.1 Documents Required for the Closing 18
----------------------------------
4.2 Certain Events Required for Closing and for all Advances 19
--------------------------------------------------------
4.3 Legal Matters 20
-------------
4.4 Election to Make Advances Prior to
----------------------------------
Satisfaction of Conditions Precedent 20
------------------------------------
ARTICLE V 20
5. COLLATERAL SECURITY 20
5.1 Grant of Lien and Security Interest 20
-----------------------------------
5.2 Maintenance of Lien 20
-------------------
ii
|
ARTICLE VI 21
6. REPRESENTATIONS AND WARRANTIES 21
6.1 Borrower's Existence 21
--------------------
6.2 Borrower's Authority 21
--------------------
6.3 Borrower's General Partner 21
--------------------------
6.4 Borrower's Name 22
---------------
6.5 Consents or Approvals 22
---------------------
6.6 Violations or Actions Pending 22
-----------------------------
6.7 Existing Indebtedness 22
---------------------
6.8 Tax Returns 22
-----------
6.9 Financial Statements 22
--------------------
6.10 Good and Marketable Title 23
-------------------------
6.11 Solvency 23
--------
6.12 Priority of Liens 23
-----------------
6.13 Accuracy of Documents 23
---------------------
6.14 Environmental Matters 23
---------------------
6.15 EDJ Lease 23
---------
6.16 Continuing Effectiveness 23
------------------------
ARTICLE VII 23
7. BORROWER'S COVENANTS 23
7.1 Affirmative Covenants 24
---------------------
7.2 Negative Covenants 26
------------------
7.3 Financial Covenants 26
-------------------
7.4 Insurance Covenants 27
-------------------
7.5 EDJ Lease Covenants 27
-------------------
7.6 Borrower's General Covenants and Agreements
-------------------------------------------
Pertaining to the Collateral 27
----------------------------
7.7 Visitation 28
----------
7.8 Filing Fees and Taxes 28
---------------------
7.9 Further Assurances 28
------------------
ARTICLE VIII 29
8. DEFAULT 29
8.1 Events of Default 29
-----------------
8.2 No Advances After Default 30
-------------------------
8.3 Acceleration 30
------------
8.4 General Remedies 31
----------------
8.5 Bank's Additional Rights and Remedies 31
-------------------------------------
8.6 Right of Set-Off 31
----------------
8.7 No Limitation on Rights and Remedies 32
------------------------------------
8.8 Application of Proceeds 32
-----------------------
8.9 Attorney-in-Fact 32
----------------
ARTICLE IX 33
9. MISCELLANEOUS 33
iii
|
9.1 Termination of Bank's Lien 33
--------------------------
9.2 Construction 33
------------
9.3 Further Assurance 33
-----------------
9.4 Indemnity 33
---------
9.5 Bank's Consent 34
--------------
9.6 Enforcement and Waiver by Bank 34
------------------------------
9.7 No Representation, Assumption, or Duty 34
--------------------------------------
9.8 Expenses of Bank 35
----------------
9.9 Attorneys' Fees 35
---------------
9.10 Exclusiveness 35
-------------
9.11 Waiver and Release by Borrower 35
------------------------------
9.12 Limitation on Waiver of Notice, Etc. 35
------------------------------------
9.13 Additional Costs 35
----------------
9.14 Illegality and Impossibility 36
----------------------------
9.15 Participation 36
-------------
9.16 Binding Effect, Assignment 37
--------------------------
9.17 Entire Agreement, Amendments 37
----------------------------
9.18 Severability 37
------------
9.19 Headings 37
--------
9.20 Counterparts 37
------------
9.21 Seal 37
----
ARTICLE X 37
10. SUBMISSION TO JURISDICTION, GOVERNING LAW AND NOTICES 37
10.1 Notices 37
-------
10.2 Governing Law 38
-------------
10.3 SUBMISSION TO JURISDICTION;
---------------------------
WAIVER OF JURY TRIAL, ETC. 39
--------------------------
SCHEDULE 6.4 LIST OF NAMES USED BY BORROWER IN LAST SIX YEARS
SCHEDULE 7.6 BORROWER'S PRINCIPAL PLACE OF BUSINESS/
LOCATION OF RECORDS
|
WHEREAS, Borrower has requested that Bank extend credit to Borrower and Bank is willing to do so on the condition that, among other things, Borrower enters into this Agreement, and Bank has agreed to extend a certain line of credit loan of up to Twenty-Five Million and 00/100 Dollars ($25,000,000.00).
NOW THEREFORE, in consideration of the promises herein contained, and each intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I.
1. DEFINITIONS.
(A) All of Borrower's Interest in and to the EDJ Lease, including without limitation the right to receive and collect the Rents, and any and all other amounts payable with respect to the Leased Equipment (including any purchase price payable by EDJ with respect thereto) and all proceeds, products, rents, royalties, issues and profits thereof;
(B) All Records pertaining to any of the Collateral; and
(C) any and all other assets of Borrower of any kind, nature, or description and which are intended to serve as collateral for the Loan under any one or more of the Security Documents.
(A) The par or stated value of all outstanding Equity Interests;
(B) Capital surplus; and
(C) Retained earnings.
applicable date plus the interest, lease and rental expenses for the 12-month period preceding the applicable date;
provided, however, that (a) for the Quarter ending September 30, 2001, the
Fixed Charge Coverage Requirement shall not be applicable; and (b) for the
Quarter-End (i) December 31, 2001, the foregoing computation shall be made
by annualizing the net income and interest, lease and rental expenses for
such Quarter (viz., the amount for the Quarter-End December 31, 2001
multiplied by 4); (ii) March 31, 2002, the foregoing computation shall be
made by annualizing the net income and interest, lease and rental expenses
for such Quarter and the immediately preceding Quarter (viz., the amount for
the period October 1, 2001 through March 31, 2002 multiplied by 2); and
(iii) June 30, 2002, the foregoing computation shall be made by annualizing
the net income and interest, lease and rental expenses for such Quarter and
the immediately preceding two Quarters (viz., the amount for the period
October 1, 2001 through June 30, 2002 multiplied by 1.333).
(A) All indebtedness guaranteed, directly or indirectly, in any manner, or endorsed (other than for collection or deposit in the Ordinary Course of Business) or discounted with recourse;
(B) All indebtedness in effect guaranteed, directly or indirectly, through agreements, contingent or otherwise:
(1) to purchase such indebtedness; or
(2) to purchase, sell or lease (as lessee or lessor) property, products, materials or supplies or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such indebtedness or to assure the owner of the indebtedness against loss; or
(3) to supply funds to or in any other manner invest in the debtor;
(C) All indebtedness secured by (or which the holder of such indebtedness has a right, contingent or otherwise, to be secured by) any Lien upon property owned or acquired subject thereto, whether or not the liabilities secured thereby have been assumed; and
(D) All indebtedness incurred as the lessee of goods or services under leases that, in accordance with Generally Accepted Accounting Principles, should not be reflected on the lessee's balance sheet.
(A) To pay the principal of and interest on the Note in accordance with the terms hereof and thereof, including any and all extensions, modifications, and renewals thereof and substitutions therefor;
(B) To repay to Bank all amounts advanced by Bank hereunder, under any of the Loan Documents or otherwise, including, but without limitation, advances for principal or interest payments to prior secured parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, or repairs to or maintenance or storage of, any of the Collateral; and
(C) To reimburse Bank, on demand, for all of Bank's expenses and costs, including the reasonable fees and expenses of its counsel, in connection with the preparation, administration, amendment, modification, or enforcement of this Agreement and the documents required hereunder, including, without limitation, any proceeding brought or threatened to enforce payment of any of the obligations referred to in the foregoing paragraphs (A) and (B).
(A) Such action is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;
(B) Such action is not required to be authorized by the Governing Body of such Person; and
(C) Such action is similar in nature and magnitude to actions customarily taken, without any authorization by any Governing Body, in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.
(A) Any surplus resulting from any write-up of assets subsequent to the date of Closing (other than any write-up of assets made on account of changes in and consistent with Generally Accepted Accounting Principles);
(B) Goodwill, including any amounts, however designated on a balance sheet of Borrower, representing the excess of the purchase price paid for assets or stock acquired over the value assigned thereto on the books of Borrower;
(C) Patents, trademarks, trade names and copyrights;
(D) Any amount at which shares of capital stock of Borrower appear as an asset on Borrower's balance sheet;
(E) Loans and advances by Borrower to Affiliates, stockholders, directors, officers or employees;
(F) Deferred expenses;
(G) Equity Investment(s) by Borrower in Affiliates of any nature; and
(H) Any other amount in respect of an intangible that, in accordance with Generally Accepted Accounting Principles, should be classified as an asset on a balance sheet of Borrower.
to bear interest at the applicable 30-Day Adjusted LIBOR Rate for a 30-Day LIBOR Rate Interest Period, such notice to be given at least two (2) Business Days prior to and specifying the date of the commencement of the applicable 30-Day LIBOR Rate Interest Period; provided, however, that, except as may be waived by Bank in Bank's discretion, in no event may any 30-Day LIBOR Rate Interest Period begin until the expiration of any current LIBOR Rate Interest Period and in no event may a 30-Day Adjusted LIBOR Rate be elected at any time when the corresponding 30-Day LIBOR Rate Interest Period would extend beyond the Maturity Date, and if any such 30-Day LIBOR Rate Notice is not timely received or is otherwise not properly made, such 30-Day LIBOR Rate Notice, at Bank's election, shall not be effective.
Telerate (or such other source as Bank may select if such a rate index is not available from Telerate), by (B) 1.00 minus any Reserve Requirement for the 90-Day LIBOR Rate Interest Period (expressed as a decimal).
ARTICLE II.
2. THE LOAN
(A) Bank will credit or pay the proceeds of each Advance of the Loan to Borrower's deposit account with Bank, or in such other manner as Borrower and Bank may agree.
(B) In order to obtain an Advance under the Loan, a Borrower's
Representative shall notify Bank not later than 1:00 p.m. (Birmingham,
Alabama time) on the day three (3) Business Days prior to the day such
Advance is sought, specifying: (i) the date on which such Advance is sought;
(ii) the requested amount of the Advance; (iii) if required by Bank, a copy
of an invoice and cost breakdown showing the cost for which the Advance is
requested; (iv) if requested by Bank, evidence as may be required by Bank
reflecting that Borrower is or will be the owner of all the Leased Equipment
being purchased with the proceeds of the Advance, and a copy of any schedule
to be attached to the EDJ Lease pertaining to the Leased Equipment being
purchased or such other evidence as may be required by Bank that such
property shall be leased by Borrower to EDJ pursuant to the EDJ Lease; and
(v) if required by Bank, an Estoppel Certificate. Notwithstanding anything
contained herein to the contrary, Bank shall not be required to make
advancements more than once each calendar month, and Borrower shall not be
entitled to receive, and Bank shall not be required to disburse, any Advance
of the Loan after the Advancement Termination Date, or upon the occurrence
and during the continuance of a Default.
(A) During the entire term of the Note, except during any applicable 30-Day LIBOR Rate Interest Period, 60-Day LIBOR Rate Interest Period, or 90-Day LIBOR Rate Interest Period, the outstanding principal balance of the Note shall bear interest at the Base Rate.
(B) A Borrower's Representative may from time to time deliver to Bank (i) a 30-Day LIBOR Rate Notice, in which case the outstanding principal balance of the Note shall bear interest at the 30-Day Adjusted LIBOR Rate during the applicable 30-Day LIBOR Rate Interest Period, (ii) a 60-Day LIBOR Rate Notice, in which case the outstanding principal balance of the Note shall bear interest at the 60-Day Adjusted LIBOR Rate during the applicable 60-Day LIBOR Rate Interest Period, and (iii) a 90-Day LIBOR Rate Notice, in which case the outstanding principal balance of the Note shall bear interest at the 90-Day Adjusted LIBOR Rate during the applicable 90-Day LIBOR Rate Interest Period. Following the expiration of any applicable LIBOR Rate Interest Period, if a Borrower's Representative shall not have timely and properly delivered a LIBOR Rate Notice for a LIBOR Rate Interest Period to commence as of the expiration of the applicable expiring LIBOR Rate Interest Period, then the outstanding principal balance of the Note shall automatically bear interest at the Base Rate until the commencement of the next LIBOR Rate Interest Period, if any.
(A) On the first Interest Payment Due Date following the date of the Note, on each successive Interest Payment Due Date thereafter during the Interest-Only Period, and on the last day of the Interest-Only Period, Borrower shall pay to Bank all accrued and unpaid interest on the outstanding principal balance of the Note.
(B) On the first Interest Payment Due Date during the Term Period, and on each successive Interest Payment Due Date thereafter, Borrower shall pay to Bank all accrued and unpaid interest on the outstanding principal balance of the Note.
(C) On the first Principal Payment Due Date, and on each successive Principal Payment Due Date thereafter, Borrower shall pay to Bank a principal payment in an amount of (i) on the first Principal Payment Due Date, $4,000,000.00, and (ii) thereafter, $5,000,000.00.
(D) In addition, promptly upon the receipt thereof, Borrower shall pay to Bank as a prepayment of principal all monies received with respect to the Collateral and/or the Leased Equipment, other than monthly rents received under the EDJ Lease.
(E) If not earlier demanded pursuant to Section 8.3 hereof, the outstanding principal balance of the Loan, together with all accrued and unpaid interest thereon, shall be due and payable to Bank on the Maturity Date.
ARTICLE III.
3. PAYMENTS, ADDITIONAL COSTS, ETC.
(A) All monies payable to Bank under this Agreement or under the Note shall be paid directly to Bank in immediately available funds at the Place for Payment. If Bank shall send Borrower statements of amounts due hereunder, such statements shall be considered correct and conclusively binding on Borrower in absence of manifest error. Alternatively, at its discretion, Bank may charge against any deposit account of Borrower all or any part of any amount owed by Borrower hereunder.
(B) All payments to be made by Borrower hereunder will be made to Bank not later than 1:00 p.m. at the Place for Payment. Payments received after 1:00 p.m. at the Place for Payment shall be deemed to be payments made prior to 1:00 p.m. at the Place for Payment on the next succeeding Business Day. Borrower hereby authorizes Bank to charge its accounts with Bank in order to cause timely payment of amounts due hereunder to be made.
(C) At the time of making each such payment, Borrower shall, subject to the other terms and conditions of this Agreement, specify to Bank the Loan or other obligations of Borrower hereunder to which such payment is to be applied. In the event that Borrower fails to so specify the
relevant Loan or if an Event of Default shall have occurred and be continuing, Bank shall apply such payments first to any expenses or fees then owing, then to interest then owing, and then to principal of the Loan.
ARTICLE IV.
4. CONDITIONS PRECEDENT
The obligation of Bank to make the Loan and any Advance hereunder is subject to the following conditions precedent:
(A) This Agreement;
(B) The Note;
(C) The Guaranty;
(D) The Borrower's Closing Affidavit;
(E) The Guarantor's Closing Affidavit;
(F) The Financing Statements, together with evidence that the Financing Statements have been duly recorded in all filing or recording offices that Bank may deem necessary or desirable in order to create a valid Lien on the Collateral described therein, and that all filing and recording taxes and fees have been paid;
(G) With respect to each Borrower Party (other than a Borrower Party that is an individual), a certificate of an officer or other representative acceptable to Bank dated as of the date of this Agreement, certifying as to the incumbency and signatures of the representative(s) of such Borrower Party signing, as applicable, this Agreement and each of the other Loan Documents, and each other document to be delivered pursuant hereto, together with the following documents attached thereto:
(1) A copy of the resolutions of such applicable Person's Governing Body authorizing the execution, delivery and performance of this Agreement, each of the Loan Documents, and each other document to be delivered pursuant hereto, as applicable;
(2) A copy, certified as of the most recent date practicable by the secretary of state (or similar Governmental Authority) of the state, province, or other Jurisdiction where such Person is organized, of such Person's Organizational Documents filed with such secretary of state (or similar Governmental Authority);
(3) A copy of such Person's other Organizational Documents;
(H) A certificate, as of the most recent date practicable, of the secretary of state (or similar appropriate Governmental Authority) and department of revenue or taxation (or similar appropriate Governmental Authority) of each Jurisdiction in which each Borrower Party (other than a Borrower Party that is an individual) is organized as to the existence and good standing of each such Person within such Jurisdiction, and a certificate, as of the most recent date practicable, of the secretary of state (or similar appropriate Governmental Authority) of each state where any of the Collateral is located as to the qualification and good standing of each Borrower Party (other than a Borrower Party that is an individual) as a foreign entity doing business in each such state;
(I) A written opinion of counsel to the Borrower Parties, dated as of the date of Closing and addressed to Bank, in form and substance acceptable to Bank;
(J) The Financial Statements;
(K) Letters and certificates, in form and substance satisfactory to Bank, attesting to the Solvency of Borrower after giving effect to the transactions contemplated hereby, from the chief financial officer of Borrower;
(L) UCC-11 reports showing no Liens superior to the Liens granted by Borrower under the Security Documents;
(M) An Estoppel Certificate;
(N) The EDJ Lease, in form and substance satisfactory to Bank; and
(O) Receipt and approval by Bank of all items otherwise reasonably required to be provided to Bank, and not otherwise set forth above.
(A) No Default shall have occurred and be continuing;
(B) No Material Adverse Change shall have occurred;
(C) All of the Loan Documents shall have remained in full force and effect;
(D) Borrower shall have paid all fees, expenses, costs, and other amounts then owing to Bank, including but not limited to the Unused Fee;
(E) All Indebtedness to be prepaid, redeemed or defeased with the proceeds of any Advance shall have been satisfied and extinguished;
(F) There shall exist no action, suit, investigation, litigation or proceeding affecting any Borrower Party pending or threatened before any court, governmental agency or arbitrator that (i) could give rise to a Material Adverse Change or (ii) purports to affect the legality, validity or enforceability of this Agreement or any other Loan Document or the consummation of the transactions contemplated hereby;
(G) All Governmental Approvals necessary in connection with the Loan Documents and the transactions contemplated hereby and thereby shall have been obtained (without the imposition of any conditions that are not acceptable to Bank) and shall remain in effect; all applicable waiting periods shall have expired without any action being taken by any competent authority; and no Law shall be applicable that restrains, prevents or imposes materially adverse conditions upon the Loan Documents and the transactions contemplated hereby and thereby; and
(H) Insurance required under the EDJ Lease is in full force and effect.
items required by this Article, such election shall not constitute any commitment or agreement of Bank to make any subsequent Advance until all items required by this Article have been delivered.
ARTICLE V.
5. COLLATERAL SECURITY
(A) To secure all the Obligations, including the compliance by Borrower with Borrower's obligations under this Agreement, Borrower hereby assigns, transfers and sets over to Bank all of Borrower's Interest in and to, and grants Bank a Lien upon, on and in the Collateral.
(B) No submission by Borrower to Bank of a schedule or other particular identification of Collateral shall be necessary to vest in Bank security title to and a security interest in each and every item of Collateral now existing or hereafter created and acquired, but rather such title and security interest shall vest in Bank immediately upon the creation or acquisition or any item of Collateral hereafter created or acquired, without the necessity for any other or further action by Borrower or by Bank.
(A) In connection with any Lien granted to Bank as provided for herein or in any Security Document, Borrower will:
(1) Execute such documents and instruments, including
amendments to the Security Documents and Financing Statements
(including amendments thereto and continuation statements thereof)
in form reasonably satisfactory to Bank as Bank, from time to
time, may specify, and pay, or reimburse Bank upon demand for
paying, all costs and taxes of filing or recording the same in such
Jurisdictions as Bank may reasonably designate; and
(2) Take such other steps as Bank, from time to time, may reasonably direct to protect, perfect, and maintain Bank's Lien on the Collateral; and
(B) In addition to the foregoing, and not in limitation thereof, Borrower agrees that:
(1) A carbon, photographic, or other reproduction of this Agreement shall be sufficient as a Financing Statement and may be filed in any appropriate office in lieu thereof; and
(2) Borrower hereby appoints Bank as its attorney-in-fact (without requiring Bank to act as such) to execute any Financing Statement in the name of Borrower, and to perform all other acts that Bank reasonably deems appropriate to perfect and continue its Lien upon, on and in, and to protect and preserve, the Collateral; provided, however, that
Bank agrees not to perform any such act unless Borrower has failed to perform such act within fifteen (15) days of Bank's written demand therefor.
ARTICLE VI.
6. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Bank, knowing that Bank will rely on such representations and warranties as an inducement to make the Loan, that:
Adverse Change, and Borrower is not in violation of any order, judgment, or decree of any court, or any statute or governmental regulation to which Borrower is subject. The execution and performance of this Agreement by Borrower will not result in any breach of any mortgage, lease, credit or loan agreement or any other instrument which may bind or affect Borrower.
(A) Borrower is the sole owner and holder of Borrower's Interest in the EDJ Lease and the Rents, and Borrower has not transferred or otherwise assigned Borrower's Interest in the EDJ Lease and/or the Rents.
(B) The EDJ Lease is valid and enforceable and in full force and effect, and has not been altered, modified or amended in any manner whatsoever except as permitted in this Agreement.
ARTICLE VII.
7. BORROWER'S COVENANTS
Borrower does hereby covenant and agree with Bank that, so long as any of the Obligations remain unsatisfied or any commitments hereunder remain outstanding, Borrower at all times will comply or cause to be complied with the following covenants:
(A) Borrower will duly and promptly pay and perform all of Borrower's Obligations to Bank according to the terms of this Agreement and the other Loan Documents, and will cause each other Borrower Party to perform such other Borrower Party's Obligations to Bank according to the terms of this Agreement and the other Loan Documents.
(B) Borrower will use the proceeds of the Loan only for the purposes set forth in Section 2.6, and Borrower will furnish Bank such evidence as it may reasonably require with respect to such uses.
(C) Borrower will furnish or cause to be furnished to Bank:
(1) Within forty-five (45) days after each Quarter-End, an unaudited (management-prepared) balance sheet and consolidated statements of income and cash flow of the Borrower Parties for such Quarter, all in reasonable detail with Bank having full access to all supporting schedules and comments, and certified by Borrower's president or principal financial officer to have been prepared in accordance with Generally Accepted Accounting Principles consistently applied by Borrower, except for any inconsistencies explained in such certificate;
(2) Within ninety (90) days after each Fiscal Year-End (a) a statement of Equity Owners' Equity and a statement of cash flows of Borrower for such Fiscal Year, (b) an income statement of each Borrower Party for such Fiscal Year, and (c) a balance sheet
of each Borrower Party as of the end of such Fiscal Year, all in reasonable detail, including all supporting schedules and comments; the statements and balance sheets of Borrower to be audited by an independent certified public accountant selected by Borrower, and certified by such accountants to have been prepared in accordance with Generally Accepted Accounting Principles consistently applied by Borrower, except for any inconsistencies explained in such certificate.
(3) Contemporaneously with each quarterly and year-end financial report required by the foregoing paragraphs, a certificate of the president or principal financial officer of Borrower stating that he or she has individually reviewed the provisions of this Agreement and that a review of the activities of Borrower during such year or monthly period, as the case may be, has been made by or under the supervision of the signers of such certificate with a view to determining whether Borrower has kept, observed, performed and fulfilled all of its obligations under this Agreement, and that, to the best of his or her knowledge, Borrower has observed and performed each and every undertaking contained in this Agreement and is not at the time in default in the observance or performance of any of the terms and conditions hereof or, if Borrower shall be so in default, specifying all such defaults and events of which he or she may have knowledge and setting forth financial data and computation evidencing Borrower's compliance with the financial covenants set forth in this Agreement; and
(4) Promptly after sending or making available or filing of the same, copies of all reports, proxy statements and financial statements that Borrower sends or makes available to its Equity Owners and all registration statements and reports that Borrower file with the Securities and Exchange Commission (or any other similar Governmental Authority) or any successor Person.
(5) Within forty-five (45) days of each Quarter-End, an Estoppel Certificate.
(D) Borrower will duly and promptly perform all of Borrower's obligations under the EDJ Lease according to the terms thereof.
(E) Borrower will furnish to Bank, if Bank so requests, the contracts, bills of sale, receipted vouchers, and agreements, or any of them, under which Borrower claims title to the Leased Equipment.
(F) Borrower will certify to Bank upon request by Bank that:
(1) Borrower has complied with and is in compliance with all terms, covenants and conditions of this Agreement which are binding upon it in all material respects;
(2) there exists no Default; or, if such is not the case, that one or more specified Defaults have occurred; and
(3) the representations and warranties contained in this Agreement are true with the same effect as though made on the date of such certificate.
(G) Borrower will, when requested so to do, make available for inspection and audit by duly authorized representatives of Bank any of its Records pertaining to the Collateral, and will furnish Bank any information regarding its business affairs and financial condition as reasonably requested by Bank and within a reasonable time after written request therefor. Borrower shall reimburse Bank for all costs associated with such audit if the audit reveals a material discrepancy in any financial report, statement or other document provided to Bank pursuant to this Agreement.
(H) Borrower will keep accurate and complete Records, consistent with sound business practices.
(I) Within ten (10) days of Bank's request therefor, Borrower will furnish or cause to be furnished to Bank copies of income tax returns filed by any Borrower.
(J) Borrower will pay when due (or within applicable grace periods) all Indebtedness due Third Persons, unless the failure so to pay such Indebtedness would not give rise to a Material Adverse Change.
(K) Borrower will notify Bank thirty (30) days in advance of any change in the location of any place of business or the chief executive office of Borrower or of the establishment of any new place of business or new chief executive office, the discontinuance of any existing place of business or chief executive office, or the state of organization of Borrower.
(L) Borrower will notify Bank immediately if it becomes aware of the occurrence of any Default, or if it becomes aware of any Material Adverse Change or the occurrence of any event that might give rise to a Material Adverse Change.
(A) Borrower will not, without Bank's prior written consent (which consent Bank agrees shall not be unreasonably withheld or delayed), change its name, enter into any merger, consolidation, liquidation, reorganization or recapitalization, or dissolve.
(B) Except as provided under the EDJ Lease, Borrower will not, without Bank's prior written consent, sell, transfer, lease or otherwise dispose of, or enter into any agreement to sell, lease, transfer, assign or otherwise dispose of, the Collateral and/or the Leased Equipment.
(C) Borrower will not permit any changes to the EDJ Lease, unless there is first obtained the prior written approval of Bank, such approval not to be unreasonably withheld.
(D) Borrower will not furnish Bank any certificate or other document that will contain any untrue statement of material fact or that will omit to state a material fact necessary to make it not misleading in light of the circumstances under which it was furnished.
(E) Borrower will not directly or indirectly apply any part of the proceeds of the Loan to the purchasing or carrying of any "margin stock" within the meaning of Regulation G, Regulation T, Regulation U, or Regulation X, or any regulations, interpretations or rulings thereunder.
(A) Borrower will maintain or cause to be maintained:
(1) A Fixed Charge Coverage of not less than 1.0 to 1.0; provided that if the Fixed Charge Coverage is less than 1.0 to 1.0 at any Quarter-End, an additional calculation shall be made including the amount of Borrower's cash on hand and United States Government securities, valued at the lower of cost or market, in the numerator of the ratio in determining Fixed Charge Coverage for such Quarter and, if such additional calculation results in a ratio of not less than 1.0 to 1.0, Borrower shall not be deemed in violation of this covenant; and
(2) Tangible Net Worth of, at minimum, $14,000,000.00.
(B) Borrower will not declare or pay any dividends, or make any other payment or distribution on account of its Equity Interests in an amount such that such payment or other distribution shall cause the violation of any other covenant or agreement of Borrower set forth herein.
(A) Except as may be agreed to by Bank in writing or otherwise be expressly provided for in this Agreement, including the immediately following paragraph, Borrower shall (a) observe and perform all the obligations imposed upon Borrower under the EDJ Lease; (b) not do, or permit to be done, anything to impair the security of the EDJ Lease; (c) promptly send to Bank copies of each notice of default which Borrower shall send or receive under the EDJ Lease; (d) enforce the performance and observance of the provisions of the EDJ Lease; (e) not collect any amounts under the EDJ Lease unless such amounts are immediately paid to Bank as a prepayment of principal; (f) not grant any rights or Liens with respect to the EDJ Lease and/or the Leased Equipment, or permit, consent, or agree to the same; (g) not alter, modify or change the terms of the EDJ Lease, nor give any consent to exercise any option required or permitted by such terms; (h) not cancel or terminate the EDJ Lease, or accept a surrender of the EDJ Lease; (i) not convey or transfer, and shall not suffer or permit a conveyance or transfer of, the Leased Equipment, or of any interest in the Leased Equipment, except as permitted by the EDJ Lease; and (j) execute and deliver, at the request of Bank, all other further assurances, confirmations and assignments in the EDJ Lease as Bank shall, from time to time, reasonably require in order to evidence or secure the rights of Bank hereunder.
(B) Notwithstanding the provisions of the immediately preceding paragraph, so long as there shall not exist any Event of Default, then Borrower shall have the right to continue to exercise all its rights and perform its obligations under the EDJ Lease, including the right to collect each payment of monthly Rents as provided in the EDJ Lease and retain such payments for its own use.
(B) Bank may correct any and all patent errors in this Agreement or any financing statements or other documents executed in connection herewith.
(C) Borrower shall furnish to Bank from time to time statements and schedules and such other reports in connection with the Collateral and/or the Leased Equipment as Bank may reasonably request.
(D) Borrower shall keep and maintain at its own cost and expense satisfactory and complete Records of the Collateral and the Leased Equipment at its principal place of business, including without limitation, a record of all payments received and all other dealings with the Collateral. After the occurrence of and during the continuance of any Event of Default, Borrower shall deliver and turn over to Bank any such Records at any time on demand of Bank.
(E) Promptly after Borrower's learning thereof, Borrower shall inform Bank in writing of any material delay or default in Borrower's or EDJ's performance of any of their respective obligations under the EDJ Lease, if such delay or default may give rise to any Material Adverse Change.
and delivery to Bank of this Agreement and the other Loan Documents, and the recording, filing, satisfaction, continuation and release of any financing statements or other instruments filed or recorded in connection herewith or therewith.
ARTICLE VIII.
8. DEFAULT
(A) Borrower shall fail to pay any installment of principal or interest or fee payable hereunder or under the Note within five (5) days of the due date thereof.
(B) Any Borrower Party shall fail to observe or perform any other obligations to be observed or performed by it hereunder or under any of the Loan Documents, and such failure shall continue for ten (10) days after:
(1) Written notice of such failure from Bank; or
(2) Bank is notified of such failure or should have been so notified pursuant to Section 7.1(K), 7.1(L), 7.6(A), or 7.6(E), whichever is earlier.
(C) Failure by any Borrower Party to perform any other term, condition or covenant contained in this Agreement or any other Loan Document, which failure is not cured after the giving of any required notice set forth in such document and the expiration of any applicable cure period.
(D) There shall occur any Event of Default as defined and provided under any other Loan Document.
(E) The validity or enforceability of this Agreement, the Note, or any of the other Loan Documents shall be contested by any Borrower Party, and/or any Borrower Party shall deny that it has any or further liability or obligation hereunder or thereunder.
(F) The validity or enforceability of the EDJ Lease shall be contested by EDJ, and/or EDJ shall deny that it has any or further liability or obligation thereunder.
(G) At Bank's election and upon ten (10) days' prior written notice from Bank to Borrower, the occurrence of any default (after any applicable grace and cure period) under the EDJ Lease (as provided for therein) and/or the termination of the EDJ Lease.
(H) Assignment or attempted assignment by any Borrower Party of this Agreement, any rights hereunder, or any Advance to be made hereunder, or the conveyance, lease, mortgage, or any other alienation or encumbrance of the Collateral or any interest therein without the prior written consent of Bank, except for transfers permitted hereunder or under any other Loan Document.
(I) The institution of a foreclosure or other possessory action against the Collateral, the Leased Equipment, or any part thereof.
(J) Any financial statement, representation, warranty or certificate made or furnished by any Borrower Party to Bank in connection with this Agreement, or as inducement to Bank to enter into this Agreement, or in any separate statement or document to be delivered hereunder to Bank, shall be materially false, incorrect, or incomplete when made.
(K) Any Material Adverse Change arising under paragraph (A) or (B) of the definition thereof.
(L) Any Borrower Party or EDJ shall admit its inability to pay its debts as they mature, or shall make an assignment for the benefit of itself or any of its creditors.
(M) The dissolution of any Borrower Party or EDJ.
(N) Proceedings in Bankruptcy, or for reorganization of any Borrower Party or EDJ, or for the readjustment of any of their debts, under the Bankruptcy Code, as amended, or any part thereof, or under any other Laws, whether state or federal, for the relief of debtors, now or hereafter existing, shall be commenced by any Borrower Party or EDJ, or shall be commenced against any Borrower Party or EDJ and shall not be discharged within sixty (60) days of commencement.
(O) A receiver or trustee shall be appointed for any Borrower Party or EDJ, or for any substantial part of their respective assets, or any proceedings shall be instituted for the dissolution or the full or partial liquidation of any Borrower Party or EDJ, and such receiver or trustee shall not be discharged within thirty (30) days of his appointment, or such proceedings shall not be discharged within sixty (60) days of its commencement, or any Borrower Party or EDJ shall discontinue business or materially change the nature of its business.
(P) A judgment creditor shall obtain possession of any of the Collateral or the Leased Equipment by any means, including, without limitation, levy, distraint, replevin or self-help.
Provided that with respect to any of the foregoing, such Event of Default will be deemed to have occurred upon the occurrence of such event Without Notice if Bank is prevented from giving notice by Bankruptcy or other applicable Law.
(A) To cancel Bank's obligations arising under this Agreement;
(B) To institute appropriate proceedings to specifically enforce performance of the terms and conditions of this Agreement;
(C) To proceed to perform any and all of the duties and obligations and exercise all the rights and remedies of Borrower contained in the EDJ Lease as fully as Borrower could itself;
(D) To collect the Rents and have, hold, manage, lease and operate the Leased Equipment pursuant to the EDJ Lease as if Bank were the lessor thereunder and an original party thereto. In connection with the foregoing, Borrower hereby authorizes EDJ, upon receipt from Bank of written notice to the effect that an Event of Default exists, to perform all of its obligations under the EDJ Lease as directed by Bank, and to continue to do as so directed until otherwise notified by Bank.
(E) To send any written notice to Borrower required by Law or this Agreement in the manner set forth in Section 10.1 of this Agreement; and any notice sent by Bank in such manner at least five (5) Business Days (counting the date of sending) prior to the date of a proposed disposition of the Collateral shall be deemed to be reasonable notice (provided, however, that nothing contained herein shall be deemed to require 10 days' notice if, under the applicable circumstances, a shorter period of time would be allowed under applicable Law); and
(F) To exercise, in addition to all other rights which it has under this Agreement or other applicable Law, all of the rights and remedies of a secured party upon default under the Uniform Commercial Code or other applicable Law.
in Bank's reasonable discretion, to fulfill Borrower's obligations under this Agreement and the EDJ Lease, and to otherwise carry out the purposes of this Agreement and the EDJ Lease; provided, however, that Bank agrees not to exercise such rights and powers until the occurrence of an Event of Default.
ARTICLE IX.
9. MISCELLANEOUS
(A) Borrower hereby agrees to indemnify Bank and its officers, directors, agents, and attorneys against, and to hold Bank and all such other Persons harmless from all Indemnified Losses resulting from any representation or warranty made by any Borrower Party or on Borrower's behalf pursuant to this Agreement having been false when made, or resulting from Borrower's breach of any of the covenants set forth in this Agreement, which indemnification is in addition to, and not in derogation of, any statutory, equitable, or common law right or remedy Bank may have for breach of representation, warranty, statement or covenant or otherwise may have under any of the Loan Documents. This agreement of indemnity shall be a continuing agreement and shall survive payment of the Loan and termination of this Agreement.
(B) With respect to any claim for indemnification under paragraph (A) or any matter with respect to which a claim may arise, if such claim or matter involves a claim of any Person other than Borrower and Bank (a "Third Party Claim"), then Borrower shall have the right, at its sole cost and expense, and through counsel of its choice (which counsel shall be reasonably satisfactory to Bank), to litigate, defend, settle or otherwise attempt to resolve such Third Party Claim; provided, however, that if in Bank's reasonable judgment a conflict of interest may exist between Bank and Borrower with respect to such Third Party Claim, then Bank shall be entitled to select counsel of its own choosing, reasonably satisfactory to Borrower, in which event Borrower shall be obligated to pay the fees and expenses of such counsel. If Borrower fails or refuses to provide a defense to any Third Party Claim, then Bank shall have the right to undertake the defense, compromise or settlement of such Third Party Claim, through counsel of its choice, on behalf of and for the account and at the risk of Borrower, and Borrower shall be obligated to pay the costs, expenses and attorney's fees incurred by Bank in connection with such Third Party Claim. In any event, Borrower and Bank shall fully cooperate with each other and their respective counsel in connection with any such litigation, defense, settlement or other attempted resolution.
Bank shall be for Bank's protection only, and shall not constitute any assumption of responsibility by Bank with respect thereto or relieve Borrower of any of Borrower's obligations.
Borrower reserves the right, by written notice to Bank within such 30-day period, to disapprove any such participation if such participation is with any financial institution then extending credit to Borrower, and (ii) unless Borrower agrees to the contrary, Borrower will only be required to continue to deal with Bank and not any Participant.
ARTICLE X.
10. SUBMISSION TO JURISDICTION, GOVERNING LAW AND NOTICES
EDJ Leasing Co., L.P.
201 Progress Parkway
St. Louis, Missouri 63043-3042
Attention: Mr. Ken Schutte Facsimile #(314) 515-4969
M. Spencer Garland, Esq.
Greensfelder, Hemker & Gale, P.C.
2000 Equitable Building, 10 South Broadway
St. Louis, Missouri 63102
Facsimile #(314) 421-0831
The Jones Financial Companies, L.L.L.P.
201 Progress Parkway
St. Louis, Missouri 63043-3042
Attention: Mr. Ken Schutte Facsimile #(314) 515-4969
M. Spencer Garland, Esq.
Greensfelder, Hemker & Gale, P.C.
2000 Equitable Building, 10 South Broadway
St. Louis, Missouri 63102
Facsimile #(314) 421-0831
SouthTrust Bank
230 Fourth Avenue North
Nashville, Tennessee 37219
Attention: Regional Corporate Banking Department
Facsimile #(615) 880-4004
Ray D. Gibbons, Esq.
Gordon, Silberman, Wiggins & Childs, P.C.
1400 South Trust Tower
Birmingham, Alabama 35203
Facsimile #(205) 254-1500
Bank's remedies with respect to the Collateral, be governed by the Laws of such other state or Jurisdiction.
(A) TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(1) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF ALABAMA, THE COURTS OF THE UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF ALABAMA, AND APPELLATE COURTS FROM ANY THEREOF;
(2) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS, AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;
(3) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS SET FORTH IN THIS AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH BANK SHALL HAVE BEEN NOTIFIED PURSUANT THERETO; AND
(4) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.
(B) TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, BORROWER AND
BANK HEREBY:
(1) IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING OR COUNTERCLAIM OF ANY TYPE AS TO ANY MATTER ARISING DIRECTLY OR INDIRECTLY OUT OF OR WITH RESPECT TO THIS AGREEMENT, THE NOTE, ANY OF THE OTHER LOAN DOCUMENTS OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH; AND
(2) AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING,
VOLUNTARY AND BARGAINED FOR AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY, AND THAT ANY DISPUTE OR CONTROVERSY OF ANY KIND WHATSOEVER BETWEEN THEM SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the day and year first above written.
BORROWER:
EDJ LEASING CO., L.P.,
a Missouri limited partnership
By: LHC, INC., a Missouri corporation,
its General Partner
By: /s/ Steven Novik
---------------------------------
Its: Treasurer
--------------------------------
|
BANK:
SOUTHTRUST BANK
By: /s/ Marcy A. Harris
--------------------------------------
Its: Vice President
-------------------------------------
|
/s/ Valerie E. Evans (SEAL)
----------------------
Notary Public
My Commission Expires: March 3, 2004
--------------------
|
/s/ Phyllis Michael (SEAL)
----------------------
Notary Public
My Commission Expires: 5/29/05
-------------------
|
SCHEDULE 6.4
LIST OF NAMES USED BY BORROWER IN LAST SIX YEARS
EDJ Leasing Co., L.P.
SCHEDULE 7.6
BORROWER'S PRINCIPAL PLACE OF BUSINESS/LOCATION OF RECORDS
EDJ Leasing Co., L.P.
201 Progress Parkway
St. Louis, Missouri 63043
MASTER LEASE NUMBER: __________
WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease from Lessor, certain equipment pursuant to the provisions hereof and applicable lease schedules ("Lease Schedules") which shall be executed by the parties from time to time in the form attached hereto as Exhibit A, and which shall be made a part hereof.
NOW, THEREFORE, in consideration of the premises, the parties, intending to be legally bound, agree as follows:
1. LEASE. Lessor hereby agrees to lease to Lessee, and Lessee hereby agrees to lease from Lessor, the equipment ("Equipment") described in Lease Schedules which shall be executed between the parties from time to time, and which shall be attached to and become a part of this Master Lease. The provisions of this Master Lease and the Lease Schedules shall constitute the entire agreement between the parties with regard to the subject matter hereof and shall supersede all prior negotiations, agreements, and understandings, whether oral or written, unless specifically incorporated by reference. The lease of Equipment described in each particular Lease Schedule shall be considered a separate Lease pursuant to the terms of the Master Lease and each Lease Schedule the same as if a single lease containing such terms had been executed covering such items; except that, any provision of any Lease Schedule shall supersede any conflicting provision of this Master Lease.
2. TERM. The term of the lease with respect to the Equipment listed on a Lease Schedule shall begin on the date such Equipment is accepted by Lessee and shall continue for the number of consecutive months from the "Rent Commencement Date" shown in the related Lease Schedule (the "Initial Term") unless earlier terminated as provided herein. Any advance rentals shall not be refundable if this Master Lease with respect to any or all Lease Schedules is duly terminated by Lessor.
3. RENT. Lessee shall pay as rent for the initial term of this Master Lease as to each Lease Schedule, the amount reflected in each Lease Schedule as Base Rent. Base Rent installments shall be payable monthly in arrears, the first such payment being due on the Rent Commencement Date, or such later date as Lessor designates in writing, and subsequent payments due on the same day of each successive month thereafter during the term hereof.
(a) TAXES. As additional rent, Lessee shall pay all sales, use, excise, personal property, stamp, documentary and ad valorem taxes, license and registration fees, assessments, fines, penalties and similar charges imposed on the ownership, possession or use of the Equipment during the term of this Master Lease as to any Lease Schedule as and when due, and
shall pay all taxes (except Lessor's Federal or State net income taxes) imposed on Lessor or Lessee with respect to the rental payments hereunder. Lessee shall reimburse Lessor upon demand for all taxes paid by or advanced by Lessor. Lessee shall file all returns required therefor and furnish copies to Lessor.
(b) ADJUSTMENTS IN RENT. Base Rent reflected in all Lease Schedules shall increase or decrease with changes in the Initial Index Rate in the manner described in the applicable Lease Schedule.
(c) NET LEASE. This Master Lease is a net lease and all payments of Base Rent and additional rent hereunder are net to Lessor.
4. DISCLAIMER OF WARRANTIES AND WAIVER OF DEFENSES.
(a) NO WARRANTIES BY LESSOR. LESSOR, BEING NEITHER THE MANUFACTURER, NOR SUPPLIER, NOR A DEALER IN THE EQUIPMENT, MAKES NO WARRANTY AND HEREBY DISCLAIMS ANY WARRANTY, EXPRESS OR IMPLIED, TO ANYONE, AS TO THE FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, DESIGN, CONDITION, CAPACITY, PERFORMANCE OR ANY OTHER ASPECT OF THE EQUIPMENT OR ITS MATERIAL OR WORKMANSHIP. Lessor further disclaims any liability for loss, damages, or injury to Lessee or third parties as a result of any defects, latent or otherwise, in the Equipment whether arising from Lessor's negligence or application of the laws of strict liability. As to Lessor, Lessee leases the Equipment "as is." Lessee has selected the supplier of the Equipment and acknowledges that Lessor has not recommended the supplier. Lessor shall have no obligation to install, maintain, erect, test, adjust, or service the Equipment. Lessee agrees to install, maintain, and service the Equipment or cause the same to be performed by qualified third parties. If the Equipment is unsatisfactory for any reason, Lessee shall make claim on account thereof solely against the supplier, and any of the supplier's vendors, and shall nevertheless pay Lessor all rent payable under the Lease.
(b) ASSIGNMENT FOR BREACH OF WARRANTY. Lessor hereby assigns to Lessee, solely for the purpose of prosecuting such a claim, all of the rights which Lessor may have against any supplier and any of the suppliers' vendors for breach of warranty or other representations respecting the Equipment.
(c) LESSOR'S ASSIGNMENT, WAIVER OF DEFENSES. Lessee acknowledges Lessor's intent to assign or pledge this Master Lease and/or the rentals due hereunder and Lessee agrees that no assignee or pledgee of Lessor shall be bound to perform any duty, covenant or condition, or warranty (express or implied) attributable to Lessor and Lessee further agrees not to raise any claim or defense arising out of this Master Lease or otherwise against Lessor as a defense, counterclaim, or offset to any action by any assignee or pledgee for the unpaid balance of rentals due under the Master Lease or for possession of the Equipment.
(d) WAIVER OF INDIRECT DAMAGES. Regardless of cause, Lessee shall not assert and Lessor shall not be responsible for any claim whatsoever against Lessor for loss of anticipatory profits or any other indirect, special, punitive or consequential damages, nor shall
Lessor be responsible for any damages or costs which may be assessed against Lessee in any action for infringement of any intellectual property rights of third parties. Lessor makes no warranty as to the treatment of this Master Lease, for tax or accounting purposes.
(e) AGENCY DISCLAIMER. Notwithstanding any fees that may be paid by Lessor to a supplier or any agent of a supplier, Lessee acknowledges that no supplier or any agent of a supplier is or shall be deemed an agent of Lessor or is authorized to waive or alter any term or condition of this Master Lease.
5. NONCANCELLABLE LEASE. NEITHER THIS MASTER LEASE NOR ANY LEASE SCHEDULE CAN BE CANCELLED BY LESSEE DURING THE TERM PROVIDED IN THIS MASTER LEASE. LESSEE'S OBLIGATION TO PAY BASE RENT AND ADDITIONAL RENT ARE ABSOLUTE.
6. TITLE, PERSONAL PROPERTY. The Equipment is, and shall at all times remain, Lessor's property, and Lessee shall have no right, title, or interest therein, except as herein set forth. If Lessor supplies Lessee with labels indicating that the Equipment is owned by Lessor, Lessee shall affix such labels to and keep them in a prominent place on the Equipment. Lessee shall at its expense protect and defend Lessor's title against all persons claiming against or through Lessee, at all times keeping the Equipment free from any legal process or encumbrance whatsoever including but not limited to liens, attachments, levies and executions, and shall give Lessor immediate written notice thereof and shall indemnify Lessor from any loss caused thereby. Lessee shall execute and deliver to Lessor, upon Lessor's request, such further instruments and assurances as Lessor deems necessary or advisable for the confirmation or perfection of Lessor's rights hereunder.
The Equipment is, and shall at all times be and remain, personal property notwithstanding that the Equipment or any part thereof may now be, or hereafter become, in any manner affixed or attached to real property or any improvements thereon.
7. CARE, USE AND LOCATION. Lessee, at its own cost and expense, shall maintain and keep the Equipment in good repair, condition and working order, and shall use the Equipment lawfully. At all times during the term of any Lease Schedule or extensions thereof, the Equipment shall be located at any one or more of the locations listed on Exhibit B attached hereto; provided, however, Lessee shall have the right, at any time and from time to time, upon at least forty (40) days advance written notice, to move any item of Equipment to any of Lessee's various locations. Lessor shall have the right to inspect the Equipment where it is located at any reasonable time.
8. REDELIVERY. Upon expiration or earlier termination of this Master Lease as to any Lease Schedule, Lessee shall return the Equipment listed in that Lease Schedule, freight prepaid, to Lessor in good repair, condition, and working order, ordinary wear and tear resulting from proper use thereof only excepted, in a manner and to a location reasonably designated by Lessor. If, upon expiration or termination of this Master Lease as to any Lease Schedule the Lessee does not immediately return the Equipment listed in that Lease Schedule to the Lessor, it shall continue to be held and leased hereunder, and this Master Lease shall thereupon be extended indefinitely as to term at the same monthly rental provided in that Lease Schedule, subject to the
right of either party to terminate the Master Lease as to that Lease Schedule upon 90 days' written notice, whereupon the Lessee shall forthwith deliver the Equipment to the Lessor as set forth in this paragraph.
9. OPTION TO PURCHASE. At the expiration of the term set forth in each applicable Lease Schedule, notwithstanding the Redelivery provision set forth in paragraph 8 hereof, Lessor hereby grants to Lessee the option to purchase all, but not less than all, Equipment listed on such Lease Schedule. To exercise such option as to Equipment listed in an applicable Lease Schedule, Lessee, at least thirty (30) days prior to the expiration of this Master Lease in respect of such Lease Schedule, shall advise Lessor in writing of its intent to purchase all, but not less than all, of the Equipment listed therein. Lessee shall pay, as the purchase price for such Equipment ("Purchase Price"), cash in an amount equal to the then fair market value of the Equipment, which value Lessor and Lessee agree will not be less than the Minimum Option Percentage times the Acquisition Value, nor more than the Maximum Option Percentage time the Acquisition Value, as such terms are defined in the applicable Lease Schedule and the products of which are reflected as the Minimum Option Value and Maximum Value on the applicable Lease Schedule. Fair market value shall be determined by Lessor in good faith. In the event Lessee does not agree with the Lessor's calculation of fair market value, Lessee may, within five (5) days of Lessor's determination, request, in writing, that the fair market value be determined as Lessee's cost by a qualified independent appraiser who is not the manufacturer of the Equipment and is chosen by Lessee. The decision of the appraiser shall be binding on both parties; provided, however, Lessee shall not be required to pay greater than the Maximum Option Value nor permitted to pay less than the Minimum Option Value.
Such purchase shall be closed within thirty (30) days of the date of final determination of the Equipment's fair market value at Lessor's office or as otherwise agreed by the parties. At closing, Lessee shall pay, in cash, the Purchase Price, any sales, use or other taxes payable in respect of such purchase and all accrued and unpaid Base Rent or additional rent. Upon such payment, the Equipment listed in the applied Lease Schedule shall be deemed transferred to Lessee at its then location.
10. RISK OF LOSS. Lessee shall bear all risks of loss of and damage to the Equipment from any cause; occurrence of such loss or damage shall not relieve Lessee of any obligation hereunder. In the event of loss or damage, Lessee, at Lessor's option, shall: (a) place the damaged Equipment in good repair, condition and working order; or (b) replace lost or damaged Equipment with like Equipment in good repair, condition and working order with documentation creating clear title thereto in Lessor; or (c) pay to Lessor the then unpaid balances of the aggregate rent reserved under the Master Lease and applicable Lease Schedule plus the value of Lessor's residual interest in the Equipment (based on the Minimum Option Value). Upon Lessor's receipt of such payment, Lessee and/or Lessee's insurer shall be entitled to Lessor's interest in said item for salvage purposes, in its then condition and location, as is, without warranty, express or implied.
11. INSURANCE. Lessee shall keep the Equipment insured against all risks of loss or damage from every cause whatsoever for not less than the full replacement value thereof, and shall carry public liability and property damage insurance covering the Equipment and its use. All such insurance shall be in form and amount reasonably acceptable to Lessor and consistent
with any requirements imposed on Lessor to by its lenders. The foregoing notwithstanding, Lessee may elect to self-insure in accordance with its customary business practices in lieu of obtaining the insurance required hereunder. If Lessee self-insures, Lessee shall so notify Lessor, and, in any event, Lessor shall be deemed an additional insured. Insurance or self-insurance proceeds shall be applied toward the replacement, restoration or repair of the Equipment.
12. INDEMNITY. Lessee shall indemnify and hold Lessor harmless against, any and all claims, actions, suits, proceedings costs, expenses, damages, and liabilities, including attorney's fees, arising out of, connected with, or resulting from the Equipment or the Master Lease, including without limitation, the manufacture, selection, delivery, possession, use, operation, or return of the Equipment.
13. DEFAULT AND REMEDIES. If Lessee ceases doing business as a going concern, of if a petition in bankruptcy, arrangement, insolvency, or reorganization is filed by or against Lessee and is not dismissed within sixty (60) days, or if Lessee makes an assignment for the benefit of creditors, or if on or prior to the expiration of thirty (30) days after written notice to Lessee from Lessor of any other breach of this Master Lease (whether monetary or non-monetary) Lessee fails to cure said breach, Lessor may exercise any one or more of the following remedies:
(a) To declare the entire balance of rent hereunder discounted to present value at the Index Rate then in effect immediately due and payable as to any or all Lease Schedules of Equipment covered hereby.
(b) To sue for and recover all rents, and other movies due, with respect to any or all items of Equipment listed on any or all Lease Schedules to the extent permitted by law.
(c) To require Lessee to assemble all Equipment at Lessee's expense, at a place reasonably designated by Lessor.
(d) Pursuant to applicable law and after demand, to remove any physical obstructions for removal of the Equipment from the place where the Equipment is located and take possession of any or all items of Equipment wherever same may be located, disconnecting, and separating all such Equipment from any other property. Lessor may, at its option, use, ship, store, repair, or lease all Equipment so removed and sell or otherwise dispose of any such Equipment at a private or public sale.
Lessor may exhibit and resell the Equipment at Lessee's premises at reasonable business hours without being required to remove the Equipment. If Lessor takes possession of the Equipment, Lessor shall give Lessee credit for any sums received by Lessor from the sale or rental of the Equipment after deduction of the expenses of sale or rental and Lessor's residual interest in the Equipment. Lessee shall also be liable for and shall pay to Lessor all expenses incurred by Lessor in connection with the enforcement of any of Lessor's remedies, including all expenses of repossessing, storing, shipping, repairing, and selling the Equipment. Lessor and Lessee acknowledge the difficulty in establishing a value for the unexpired Lease term and owing to such difficulty agree that the provisions of this paragraph represent an agreed measure of damages and are not to be deemed a forfeiture or penalty.
If any payment is not made by Lessee within fifteen (15) days of the date due provided in any Lease Schedule, Lessee shall pay to Lessor, not later than one month thereafter, an amount calculated at the rate of five cents per one dollar of each such delayed payment, but only to the extent allowed by law. Such amount shall be payable in addition to all amounts payable by Lessee as a result of exercise of any of the remedies herein provided.
All of Lessor's remedies hereunder are cumulative, are in addition to any other remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. No failure on the part of the Lessor to exercise and no delay in exercising any right or remedy shall operate as a waiver thereof or modify the terms of this Lease.
14. PERFORMANCE BY LESSOR OF LESSEE'S OBLIGATIONS. If Lessee fails to
comply with any provision of this Master Lease with respect to any Lease
Schedule, Lessor may effect such compliance on behalf of Lessee upon fifteen
(15) days' prior written notice to Lessee. In such event, all movies
expended by, and all expenses of Lessor in effecting such compliance shall
be deemed to be additional rental, and shall be paid by Lessee to Lessor at
the time of the next monthly payment of rent set forth in such Schedule.
15. LESSEE'S ASSIGNMENT; QUIET ENJOYMENT. Without Lessor's prior written consent which consent shall not be unreasonably withheld or delayed, Lessee shall not assign, transfer, pledge, hypothecate, or otherwise dispose of the Equipment or any interest therein. Notwithstanding any assignment by Lessor, providing Lessee is not in default hereunder, Lessee shall quietly enjoy use of the Equipment, subject to the terms and conditions of this Master Lease and all Lease Schedules.
16. NOTICES. Service of all notices under this Master Lease shall be sufficient if given personally or mailed by first class U.S. mail postage prepaid to the party involved, Attention: General Counsel, at its respective address set forth herein, or at such other address as said party may provide in writing from time to time. Any such notice mailed to said address shall be effective when deposited in the United States mail, duly addressed and with postage prepaid, or personally delivered.
17. CAPTIONS. Captions are used in this Master Lease for convenience only, and are not intended to be used in construction or interpretation of this Master Lease.
18. TIME OF ESSENCE. Time is of the essence in this Master Lease.
19. ENTIRE AGREEMENT; MODIFICATION. This Master Lease, together with any Lease Schedules executed by the parties and Exhibits A and B, contains the entire agreement between the Lessor and Lessee. No modification of this Master Lease, or any Lease Schedule, shall be effective unless in writing and executed by an executive officer of the Lessor.
20. NON-WAIVER. No delay or failure by the Lessor or Lessee to exercise any right under this Master Lease, and no partial or single exercise of that right, shall constitute a waiver
of that or any other right, unless otherwise expressly provided herein. A waiver of default shall not be a waiver of any other or subsequent default.
21. GOVERNING LAW. This Master Lease shall be construed in accordance with and governed by the laws of the State of Missouri.
22. COUNTERPARTS. This Master Lease may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
23. BINDING EFFECT. The provisions of this Master Lease shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legatees, personal representatives, successors, and assigns.
IN WITNESS WHEREOF, this Master Lease has been executed as of the day and year first above written.
LESSOR: LESSEE:
EDJ LEASING CO., L.P. EDWARD D. JONES & CO., L.P.
BY: LHC, INC., BY: EDJ HOLDING COMPANY, INC.
GENERAL PARTNER GENERAL PARTNER
By: /s/ Steven Novik By: /s/ Lawrence R. Sobol
-------------------------- ---------------------------------
Name: Steven Novik Name: Lawrence R. Sobol
------------------------ -------------------------------
Title: Treasurer Title: General Counsel
----------------------- ------------------------------
|
MASTER AGREEMENT
Dated as of September 18, 2001
among
EDWARD D. JONES & CO., L.P.,
as Lessee, Construction Agent and Guarantor,
ATLANTIC FINANCIAL GROUP, LTD.,
(registered to do business in Missouri as Atlantic Financial Group, L.P.)
as Lessor,
SUNTRUST BANK AND
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders,
and
SUNTRUST BANK,
as Agent
and joined in by
THE JONES FINANCIAL COMPANIES, L.L.L.P.
PAGE
----
ARTICLE I DEFINITIONS; INTERPRETATION ....................................... 1
ARTICLE II ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS; NATURE OF
TRANSACTION ............................................................ 2
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease ............... 2
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs ........................................................ 2
SECTION 2.3 Funded Amounts and Interest and Yield Thereon; Facility
Fee; Additional Fees; Bond Trustee's Fee .................................. 4
SECTION 2.4 Nature of Transaction ......................................... 6
SECTION 2.5 Amounts Due Under Lease ....................................... 6
ARTICLE III CONDITIONS PRECEDENT; DOCUMENTS ................................. 7
SECTION 3.1 Conditions to the Obligations of the Funding Parties on
the Closing Date .......................................................... 7
SECTION 3.2 Additional Conditions for the Closing Date ................... 12
SECTION 3.3 Conditions to the Obligations of Lessee ...................... 14
SECTION 3.4 Conditions to the Obligations of the Funding Parties on each
Funding Date ............................................................. 14
SECTION 3.5 Completion Date Conditions ................................... 15
ARTICLE IV REPRESENTATIONS ................................................. 17
SECTION 4.1 Representations of Lessee .................................... 17
SECTION 4.2 Survival of Representations and Effect of Fundings ........... 30
SECTION 4.3 Representations of the Lessor ................................ 31
SECTION 4.4 Representations of each Lender ............................... 33
ARTICLE V COVENANTS OF LESSEE, JFC AND LESSOR .............................. 33
SECTION 5.1 Affirmative Covenants ........................................ 33
SECTION 5.2 Additional Covenants ......................................... 45
SECTION 5.3 Further Assurances ........................................... 52
SECTION 5.4 Additional Required Appraisals ............................... 53
SECTION 5.5 Lessor's Covenants ........................................... 53
ARTICLE VI TRANSFERS BY LESSOR AND LENDERS ................................. 55
SECTION 6.1 Lessor Transfers ............................................. 55
SECTION 6.2 Lender Transfers ............................................. 55
ARTICLE VII INDEMNIFICATION ................................................ 56
SECTION 7.1 General Indemnification ...................................... 56
|
SECTION 7.2 Environmental Indemnity ...................................... 58 SECTION 7.3 Proceedings in Respect of Claims ............................. 60 SECTION 7.4 General Tax Indemnity ........................................ 61 SECTION 7.5 Increased Costs, etc. ........................................ 67 SECTION 7.6 End of Term Indemnity ........................................ 71 ARTICLE VIII MISCELLANEOUS ................................................. 72 SECTION 8.1 Survival of Agreements ....................................... 72 SECTION 8.2 Notices ...................................................... 72 SECTION 8.3 Counterparts ................................................. 73 SECTION 8.4 Amendments ................................................... 73 SECTION 8.5 Headings, etc. ............................................... 74 SECTION 8.6 Parties in Interest .......................................... 74 SECTION 8.7 GOVERNING LAW ................................................ 74 SECTION 8.8 Expenses ..................................................... 74 SECTION 8.9 Severability ................................................. 75 SECTION 8.10 Liabilities of the Funding Parties .......................... 75 SECTION 8.11 Submission to Jurisdiction; Waivers ......................... 75 SECTION 8.12 Liabilities of the Agent .................................... 76 SECTION 8.13 Role of SunTrust Equitable Securities Corporation ........... 76 APPENDIX A Definitions and Interpretation |
SCHEDULES
SCHEDULE 2.2 Amount of Each Funding Party's Commitment SCHEDULE 4.1(a)(i) Indebtedness of Lessee SCHEDULE 4.1(a)(ii) Subsidiaries SCHEDULE 4.1(d)(v) Pending Investigations or Inquiries SCHEDULE 4.1(m) Environmental Matters SCHEDULE 4.1(u)(i) Leases SCHEDULE 5.2(a)(i) Existing Permitted Liens SCHEDULE 5.2(a)(xiv) Existing Options, Etc. SCHEDULE 5.2(d) Contingent Obligations SCHEDULE 8.2 Addresses for Notices |
EXHIBITS
EXHIBIT A Form of Funding Request EXHIBIT B Form of Assignment of Lease and Rents EXHIBIT C Form of Security Agreement and Assignment |
EXHIBIT D-1 Form of Mortgage
EXHIBIT D-2 Form of Deed of Trust
EXHIBIT E [Reserved]
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G-1 Form of Opinion of Counsel to Lessee and Guarantor
EXHIBIT G-2 Form of Opinion of Counsel to Lessor
EXHIBIT H Form of Certification of Construction Completion EXHIBIT I Form of Payment Date Notice EXHIBIT J Form of Compliance Certificate |
MASTER AGREEMENT
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Master Agreement, the Lease, the Loan Agreement and the other Operative Documents, (i) pursuant to the Bond Lease, the Lessor has acquired a leasehold interest in the Leased Property identified by the Lessee pursuant to the Bridge Lease and is subleasing such Leased Property to the Lessee, (ii) the Lessor and the Lessee desire to restate and amend the Bridge Lease pursuant to which the Lessee will sublease the Leased Property from the Lessor, (iii) the Lessee, as Construction Agent for the Lessor, wishes to construct and equip the Building on the Land for the Lessor and, when completed, such Building shall be part of the Leased Property under the Lease, (iv) the Lessee, as agent, wishes to obtain, and the Lessor is willing to provide, funding to finance the construction and equipping of the Building, and (v) the Lessor wishes to obtain, and the Lenders are willing to provide, from time to time, financing of the construction and equipping of the Building.
In consideration of the mutual agreements contained in this Master Agreement 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
ARTICLE II
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
transaction and closing costs related to such Land (to the extent permitted to be paid with Advances hereunder), and (2) in the case of each subsequent Funding, be paid to the Construction Agent for the payment or reimbursement of Construction costs incurred through such Funding Date and not previously paid or reimbursed.
overdue amount shall, without limiting the rights of the Lessor under the Lease, to the maximum extent permitted by law, accrue yield at the Overdue Rate, from the date of nonpayment until paid in full (both before and after judgment).
(b) Each Lender's Funded Amount outstanding from time to time shall accrue interest as provided in the Loan Agreement.
(c) During the Construction Term, in lieu of the payment of accrued interest, on each Payment Date, each Lender's Funded Amount in respect of the Construction Land Interest shall automatically be increased by the amount of interest accrued and unpaid on the Loans pursuant to the Loan Agreement during the Rent Period ending immediately prior to such Payment Date (except to the extent that at any time such increase would cause such Lender's Funded Amount to exceed such Lender's Commitment, in which event the Lessee shall pay such excess amount to such Lender in immediately available funds on such Payment Date). Similarly, in lieu of the payment of accrued Yield, on each Payment Date, the Lessor's Invested Amount in respect of the Construction Land Interest shall automatically be increased by the amount of Yield accrued on the Lessor's Invested Amount in respect of the Leased Property during the Rent Period ending immediately prior to such Payment Date (except to the extent that at any time such increase would cause the Lessor's Invested Amount to exceed the Lessor's Commitment, in which event the Lessee shall pay such excess amount to the Lessor in immediately available funds on such Payment Date). Such increases in Funded Amounts shall occur without any disbursement of funds by the Funding Parties.
(e) The Lessee hereby agrees to pay to each Funding Party a facility fee for each day from the Closing Date until the Lease Termination Date equal to (i) 0.125% per annum times (ii) the amount of such Funding Party's Commitment on such day, times (iii) 1/360. Such facility fee shall be payable in arrears on each Quarterly Payment Date. During the Construction Term, in lieu of payment of the facility fee on each Quarterly Payment Date, each Lender's Funded Amount shall automatically be increased by the amount of the facility fee accrued during the three months immediately prior to such Quarterly Payment Date.
(f) In addition to the facility fee referenced in subparagraph (e) above, the Lessee hereby agrees to pay on the Closing Date the structuring fee and the Lender up-front fees set forth in the Term Sheet. The Lessee hereby further agrees to pay on the Closing Date and
annually thereafter until the Lease Termination Date the Agent's fees and the Lessor's fees set forth in the Term Sheet (the structuring fee, the Lender up-front fees, the Agent's fees and the Lessor's fees, as set forth in the Term Sheet, being hereinafter collectively referred to as the "Additional Fees"). During the Construction Term, the proceeds of Advances may be used to pay the Additional Fees (which fees shall be included in the Construction Budget); thereafter, all such fees shall be payable by the Lessee.
(g) In accordance with that certain letter agreement by and between the Lessee and the Bond Trustee dated June 26, 2001, the Lessee hereby agrees to pay to the Bond Trustee an annual trustee's fee in an amount not to exceed $4,000.00, commencing on the Closing Date and continuing thereafter on each anniversary of the Closing Date until the Lease Termination Date.
Lessee's obligation to purchase the Leased Property under the Lease, the amounts then due and payable by the Lessee under the Lease shall include all amounts necessary to pay in full the Loans, and accrued interest thereon, the Lessor's Invested Amounts and accrued Yield thereon and all other obligations of the Lessee owing to the Funding Parties pursuant to the Operative Documents.
ARTICLE III
CONDITIONS PRECEDENT; DOCUMENTS
reasonably objectionable to the Lessor, the Agent or the Title Insurance Company, and be reasonably acceptable to each such Person.
Operative Document to which the Lessor is a party is in full force and effect with respect to it; and (D) no event that could have a Material Adverse Effect has occurred since the date of the most recent financial statements of the Lessor to be delivered or required to the Agent.
the Secretary or an Assistant Secretary of the Lessee's General
Partner, attaching and certifying as of the Closing Date as to (A)
the Board of Directors' (or appropriate committee's) resolution
duly authorizing the execution, delivery and performance by it, as
general partner of the Lessee, of each Operative Document to which
the Lessee is or will be a party, (B) the incumbency and signatures
of persons authorized to execute and deliver such documents on its
behalf, (C) the articles or certificate of incorporation of the
Lessee's General Partner, certified within thirty (30) days prior
to the Closing Date by the Secretary of State of the state of its
incorporation and (D) its by-laws; and (z) good standing
certificates for the Lessee's General Partner dated within thirty
(30) days prior to the Closing Date from the appropriate offices of
the State of incorporation and principal place of business of the
Lessee's General Partner. Each of the Agent and the Lessor shall
have received (w) a certificate of JFC's Managing Partner attaching
and certifying as of the Closing Date, as to (A) the resolution or
consent of the limited partners of JFC, if and to the extent (if
any) required by JFC's Partnership Agreement, duly authorizing the
execution, delivery and performance by JFC of each Operative
Document to which it is or will be a party, (B) JFC's Partnership
Agreement as in effect as of the Closing Date (which includes all
amendments thereto) and (C) JFC's partnership certificate, as in
effect as of the Closing Date (which includes all amendments
thereto), certified within thirty (30) days prior to the Closing
Date by the Secretary of State of the state of its organization;
(x) good standing certificates for JFC dated within thirty (30)
days prior to the Closing Date from the appropriate offices of the
State of JFC's organization and principal place of business; (y) a
certificate of the Managing Partner of JFC, attaching and
certifying as of the Closing Date as to the incumbency and
signatures of persons authorized to execute and deliver such
documents on its behalf.
has been completed substantially in accordance with the Plans and
Specifications therefor, and the Leased Property is ready for occupancy,
(ii) such Plans and Specifications comply in all material respects with all
Applicable Laws in effect at such time, and (iii) to the best of the
Architect's knowledge, the Leased Property, as so completed, complies in all
material respects with all Applicable Laws in effect at such time. The
Construction Agent shall also deliver to the Agent true and complete copies
of: (A) an "as built" or "record" set of the Plans and Specifications, (B) a
plat of survey of the Leased Property "as built" to a standard reasonably
acceptable to the Agent showing all easements, paving, driveways, fences and
exterior improvements, and (C) copies of a certificate or certificates of
occupancy for the Leased Property or other legally equivalent permission to
occupy the Leased Property.
(i) all amounts owing to third parties for the Construction have been paid in full (other than contingent obligations for which the Construction Agent has made adequate reserves), and no litigation or proceedings are pending, or, to the best of the Construction Agent's knowledge, are threatened, against the Leased Property, the Construction Agent or the Lessee which could reasonably be expected to have a Material Adverse Effect;
(ii) all material consents, licenses and permits and other governmental authorizations or approvals required for such Construction and operation of the Leased Property have been obtained and are in full force and effect;
(iii) the Leased Property has available all services of public facilities and other utilities necessary for the use and operation of the Leased Property for its intended purposes including, without limitation, adequate water, gas and electrical supply, storm and sanitary sewerage facilities, telephone, other required public utilities and means of access between the Building and public highways for pedestrians and motor vehicles;
(iv) all material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of the Leased Property as the Lessee intends to use the Leased Property under the Lease and
which are necessary to permit the lawful intended use and operation of all then intended utilities, driveways, roads and other means of egress and ingress to and from the same have been obtained and are in full force and effect and neither the Construction Agent nor the Lessee has any knowledge of any pending modification or cancellation of any of the same, and the use of the Leased Property does not depend on any variance, special exception or other municipal approval, permit or consent that has not been obtained and is in full force and effect for its continuing legal use;
(vi) to the best of the Construction Agent's knowledge, the Leased Property is in compliance in all material respects with all applicable zoning laws and regulations.
ARTICLE IV
REPRESENTATIONS
organized, validly existing and in good standing under the laws of the jurisdiction of its organization, (y) has the power and authority, and the legal right, and all governmental licenses, authorizations, consents and approvals, to own and operate its assets and property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged or proposes to be engaged, and (z) is duly qualified as a foreign corporation or partnership and in good standing (A) in the jurisdiction in which the Leased Property is located and (B) under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business or nature of its activities requires such qualification. All of the issued and outstanding general or limited partnership interests, or capital stock, as the case may be, of the Lessee, the Lessee's General Partner and each Subsidiary is validly issued and outstanding, is fully paid and nonassessable and is owned, beneficially and of record, in the case of stock, by the Lessee or another Subsidiary, and in the case of general or limited partnership interests in the Lessee, by the Lessee's General Partner and the limited partners of the Lessee, free of any Lien, option, claim, warrant or rights of others. All of the issued and outstanding are partnership interests of JFC are validly issued and outstanding, are fully paid and nonassessable and are owned beneficially and of record, by JFC's partners, free of any Lien, option, claim, warrant or rights of others.
(i) There are no actions, suits, proceedings, claims or disputes pending or, to the best knowledge of the Lessee and JFC (after due inquiry), threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, arbitrator or Business Association, against the Lessee, JFC or its or their Subsidiaries or any of their respective properties, individually or in the aggregate:
(x) which purport to affect or pertain to this Master Agreement or any other Operative Document, or any of the transactions contemplated hereby or thereby; or
(y) as to which there exists a reasonable possibility of an adverse determination against any of them or, which determination could reasonably be expected to have a Material Adverse Effect.
(ii) No injunction, writ, temporary restraining order or any order of any nature has been issued by any court or other Governmental Authority purporting to enjoin or restrain the execution, delivery or performance of this Master Agreement or any other Operative Document, or directing that the transactions provided for herein or therein not be consummated as herein or therein provided.
(iii) Any liability that may result from any action at law, suit in equity or other proceeding or investigation (whether or not purportedly on behalf of the Lessee, JFC or any of its or their Subsidiaries) in any court or by or before any other Governmental Authority or any arbitrator, or before any Business Association, against or affecting, or that (to the best knowledge of the Lessee and JFC) is threatened against, the Lessee, JFC or any of its or their Subsidiaries or any of their respective properties is adequately reserved against on the books of the Lessee, JFC or such Subsidiary, as the case may be.
(iv) Neither the Lessee, JFC nor any of its or their Subsidiaries is in default in any respect which could individually or in the aggregate have a Material Adverse Effect on the Lessee or JFC with respect to any order, writ, injunction, judgment or decree of any court or other Governmental Authority, or with respect to the award of any arbitrator, or with respect to the order or direction of any Business Association.
deficiencies have been granted by the Lessee, JFC or any of its or their Subsidiaries. There are no Liens on any properties or assets of the Lessee, JFC or any of its or their Subsidiaries imposed or arising as a result of the delinquent payment or nonpayment of any such tax, assessment, fee or other governmental charge. All Federal income tax returns of each of the Lessee and JFC filed for periods ended on or prior to December 31, 1996 have been accepted by the IRS as filed. No Federal income tax and information returns filed by any of the Lessee, JFC or the Subsidiaries of the Lessee or JFC have ever been materially adjusted upon examination by the IRS. The Lessee, JFC and its or their Subsidiaries which are partnerships have filed information returns in those states and local jurisdictions in which they are required to do so, and the Subsidiaries of the Lessee or JFC that are corporations have filed tax returns with respect to state income taxes or state taxes measured by income in those states and local jurisdictions in which they are required to do so. No state information or tax return filed by the Lessee, JFC or any of its or their Subsidiaries has ever been materially adjusted upon examination by any state agency. The charges, accruals and reserves, if any, on the books of the Lessee, JFC and its or their Subsidiaries in respect of Federal and state income taxes for all fiscal periods to date are adequate and neither the Lessee nor JFC knows of any unpaid assessments for additional Federal or state income taxes for any such fiscal period or of any basis therefor. There are no applicable taxes, fees or other governmental charges payable in connection with the execution and delivery of this Master Agreement, the Transaction or any of the other Operative Documents.
(i) Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law. Each Plan which is intended to qualify under Section 401(a) of the Code has received a favorable determination letter from the IRS and, to the best knowledge of the Lessee and JFC, nothing has occurred which would cause the loss of such qualification. The Lessee, JFC and each ERISA Affiliate has made all required contributions to any Plan subject to Section 412 of the Code, and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Code has been made with respect to any Plan.
(ii) There are no pending or, to the best knowledge of the Lessee and JFC, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan which has resulted or could reasonably be expected to result in a Material Adverse Effect or that would subject the Lessee, JFC or any of its or their Subsidiaries to a tax or penalty on Prohibited Transactions. Neither the Lessee, JFC nor any of its or their Subsidiaries has contributed to any employee pension benefit plan to which an employer other than the Lessee, JFC or one of their Subsidiaries contributed.
(iii) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability;
(iii) neither the Lessee, JFC nor any ERISA Affiliate has incurred,
or reasonably expects to incur, any liability to the PBGC under
Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Lessee, JFC nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of
ERISA, would result in such liability) under Section 4201 or 4243
of ERISA with respect to a Multiemployer Plan; and (v) neither the
Lessee, JFC nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
(i) The on-going operations of the Lessee, JFC and each of their Subsidiaries comply in all material respects with all Environmental Laws.
ordinary course operations, all such Environmental Permits are in good standing, and the Lessee, JFC and each of their Subsidiaries are in compliance with all material terms and conditions of such Environmental Permits.
(iii) None of the Lessee, JFC any of their Subsidiaries or any of their respective present properties or operations, is subject to any outstanding written order from or agreement with any Governmental Authority, nor subject to (x) any judicial or docketed administrative proceeding, respecting any Environmental Law, Environmental Claim or Hazardous Material or (y) to the extent that it could reasonably be expected to have a Material Adverse Effect, any claim, proceeding or written notice from any Person regarding any Environmental Law, Environmental Claim or Hazardous Material.
(iv) There are no Hazardous Materials or other conditions or circumstances existing with respect to any properties of the Lessee, JFC or any of their Subsidiaries, or arising from operations prior to the Closing Date, of the Lessee, JFC or any of their Subsidiaries that would reasonably be expected to give rise to Environmental Claims which would have a Material Adverse Effect, and there are no Hazardous Materials or other conditions or circumstances existing with respect to the Leased Property that would reasonably be expected to give rise to Environmental Claims. In addition, (A) neither the Lessee, JFC nor any of their Subsidiaries has any underground storage tanks (x) that are not properly registered or permitted under applicable Environmental Laws, (y) that are leaking or disposing of Hazardous Materials off-site, or (z) with respect to the Leased Property, for which the Lessee, JFC or any of their Subsidiaries has not met applicable federal and state financial responsibility requirements, and (B) the Lessee, JFC and their Subsidiaries have met all material notification requirements under applicable Environmental Laws.
(i) The SEC Reports referred to in Section 4.1(l) hereof contain an accurate general description of the business of the Lessee, JFC and their
(ii) Any and all liabilities of the Lessee and JFC that could
reasonably be expected to arise out of, or in relation to, the
Lessee's or JFC's ownership, directly or indirectly, of any
interest or interests in limited partnerships or other entities
(including any Affiliates or Subsidiaries of the Lessee or JFC)
under any circumstances, in the aggregate, would not exceed
$15,000,000. All such interests owned by the Lessee or JFC in such
entities are owned indirectly by it, through a series of affiliated
entities, including at least one corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, which corporation is adequately
capitalized and as to which all corporate formalities have been
observed. The corporate integrity of any such corporation has never
been questioned or threatened, nor does there exist any basis for
such a question or threat. Neither the Lessee, JFC nor any
Affiliate of either of them (other than the General Partner,
Conestoga Securities, Inc., a Missouri corporation, LHC, Inc., a
Missouri corporation, Unison Capital Corporation, a Missouri
corporation, Patronus, Inc., a Missouri corporation, CIP
Management, Inc., a Missouri corporation, and Edward D. Jones & Co.
Canada Holding Co., Inc., a corporation formed under the law of the
Province of Ontario, Canada) is a general partner of any general or
limited partnership.
(i) To the best knowledge of the Lessee, except as described in the Environmental Audit, on the Closing Date, there are no Hazardous Materials present at, upon, under or within such Leased Property or released or transported to or from such Leased Property (except in compliance in all material respects with all Applicable Law).
(ii) On the Closing Date, no Governmental Actions have been taken or, to the best knowledge of the Lessee, are in process or have been threatened, which could reasonably be expected to subject such Leased Property, any Lender or the Lessor to any Claims or Liens with respect to such Leased Property under any Environmental Law which would have a material adverse effect, or would have a Material Adverse Effect on the Lessor or any Lender.
(iii) The Lessee has, or will obtain on or before the date required by Applicable Law, all Environmental Permits necessary to operate the Leased Property, if any, in accordance with Environmental Laws and is complying with and has at all times complied with all such Environmental Permits, except to the extent the failure to obtain such Environmental Permits or to so comply would not have a Material Adverse Effect.
(iv) Except as set forth in the Environmental Audit or in any notice subsequently furnished by the Lessee to the Agent and approved by the Agent in writing prior to the respective times that the representations and warranties contained herein are made or deemed made hereunder, no notice, notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to the Lessee, no penalty has been assessed on the Lessee and no investigation or review is pending or, to its best knowledge, threatened by any Governmental Authority or other Person in each case relating to the Leased Property with respect to any alleged material violation or liability of the Lessee under any Environmental Law. To the best knowledge of the Lessee, no material notice, notification, demand, request for information, citations, summons, complaint or order has been issued or filed to or with respect to any other Person, no material penalty has been assessed on any other Person and no investigation or review is pending or threatened by any Governmental Authority or other Person relating to the Leased Property with respect to any alleged material violation or liability under any Environmental Law by any other Person.
(v) The Leased Property and each portion thereof are presently in compliance in all material respects with all Environmental Laws, and, to the best knowledge of the Lessee, there are no present or past facts, circumstances, activities, events, conditions or occurrences regarding the Leased Property (including without limitation the release or presence of Hazardous Materials) that could reasonably be anticipated to (A) form the basis of a material Claim against the Leased Property, any Funding Party or the Lessee, (B) cause the Leased Property to be subject to any material restrictions on ownership, occupancy, use or transferability under any Environmental Law, (C) require the filing or recording of any notice or restriction relating to the presence of Hazardous Materials in the real estate records in the county or other appropriate municipality in which the Leased Property is located, or (D) prevent or materially interfere with the continued operation and maintenance of the Leased Property as contemplated by the Operative Documents.
(A) The unaudited balance sheet of the Lessor as of December 31, 2000 and the related statements of income, partners' capital and cash flows for the year then ended, copies of which have been delivered to the Agent and the Lessee, fairly present, in conformity with sound accounting principles, the financial condition of the Lessor as of such date and the results of operations and cash flows for such period.
(B) Since December 31, 2000, there has been no event, act, condition or occurrence having a material adverse effect upon the financial condition, operations, performance or properties of the Lessor, or the ability of the Lessor to perform in any material respect its obligations under the Operative Documents.
(C) The Lessor has no recourse indebtedness, and the Lessor has not entered into any other transactions, purchases, leases or other agreements, other than immaterial transactions, purchases, leases and other agreements entered into by the Lessor in the ordinary course of its business, in which the Lessor has any liability to the other parties to such transactions, purchases, leases or other agreements that is in excess of the Lessor's ownership or other interest in the property subject to such transactions, purchases, leases or other agreements other than liability for required fundings, breach of contract, misrepresentation, gross negligence, willful misconduct, fraud, failure to turn over funds and similar exceptions to limitations on recourse.
ARTICLE V
COVENANTS OF LESSEE, JFC AND LESSOR
(i) engage in any Prohibited Transaction;
(ii) incur any "accumulated funding deficiency" as such term is defined in Section 302 of ERISA, whether or not waived; or
(iii) terminate under circumstances which could result in the imposition of a Lien on any property of the Lessee, JFC or any of their Subsidiaries pursuant to Section 4068 of ERISA.
The Lessee and JFC shall, and shall cause each of their ERISA Affiliates to: (x) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state law; (y) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (z) make all required contributions to any Plan subject to Section 412 of the Code.
(i) maintain its property in good condition and repair and make all needful and proper renewals, repairs, replacements, additions, betterments and improvements thereof and thereto, so that the business carried on in connection therewith may be conducted properly and efficiently at all times;
(ii) maintain, with financially sound insurers of nationally recognized stature and responsibility, insurance with respect to its property and business of such a nature, with such terms and in such amounts as a prudent person would maintain with respect to similar properties and a similar business, and, in any event, will maintain insurance on all its property of a character usually insured by corporations or partnerships engaged in the same or a similar business similarly situated against loss or damage of the kinds and in the amounts customarily insured against and for by such corporations or partnerships and carry, with such insurers in customary amounts, such other insurance, including public liability
(iii) keep proper books of record and accounts with respect to all of its business transactions in accordance with GAAP in effect in the United States, which books of record and accounts shall, in all material respects, be true, correct and complete;
(iv) set aside on its books from its earnings for each fiscal year, in reasonably adequate amounts, all proper accruals and reserves that, in accordance with GAAP, should be set aside from such earnings in connection with its business, including reserves for litigation, depreciation, obsolescence and/or amortization, and accruals for taxes based on or measured by income or profits and for all other taxes; and
(v) at all times maintain and keep in full force and effect its rights and franchises material to its business and its memberships in such Business Associations as are necessary to enable it to engage (in the case of those entities
presently so engaged) in the business of a securities broker, dealer or underwriter, or financial services institution and take all actions necessary to comply with the rules and regulations, as in effect from time to time, of such Business Associations and each other association, corporation or governmental authority to which it is subject.
(i) Each of the Lessee, JFC and each of their Subsidiaries will pay and discharge promptly:
(x) all taxes, assessments and governmental charges and levies imposed upon it, its income or profits or any of its properties, before the same shall become delinquent, and
could reasonably be expected to have a Material Adverse Effect or is otherwise prohibited or limited under the Operative Documents.
(i) as soon as available and, in any case, within 90 days after the close of each fiscal year, two copies of the respective consolidated statements of financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries setting forth the financial condition of such entities as of the end of such fiscal year, together with consolidated statements of income, cash flows, changes in partnership capital and changes in liabilities of the Lessee and JFC, respectively, for such fiscal year, in each case setting forth, in comparative form, the figures for the preceding fiscal year, all in reasonable detail, such financial statements to be accompanied by an opinion with respect thereto of Arthur Andersen LLP or another Independent Certified Public Accountant, which opinion shall state that (x) the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and, accordingly, included such tests of the accounting records and such other auditing procedures as were considered necessary in the circumstances, and (y) such financial statements present fairly the financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries, respectively, at such date and the results of operations thereof for such period and have been prepared in accordance with generally accepted accounting principles consistently applied, except for noted changes in application in which such accountants concur;
(ii) as soon as practicable and, in any case, within 45 days after the end of each of the first, second and third quarterly accounting periods in each fiscal year, two copies of (x) the respective unaudited consolidated statements of financial condition of the Lessee and its Subsidiaries and JFC and its Subsidiaries
as of the end of such accounting period, and (y) the respective unaudited consolidated statements of income of the Lessee and its Subsidiaries and JFC and its Subsidiaries for the quarterly accounting period and for the fiscal year to date, setting forth in each case in comparative form the figures for the corresponding periods a year earlier, prepared and certified by the principal financial officer of the Lessee and JFC, respectively, as complete and correct, as having been prepared in accordance with GAAP consistently applied and as presenting fairly such financial condition and results of operations, subject, in each case, to changes resulting from year-end audit adjustments;
(iii) promptly upon receipt thereof, two copies of each report other than those referred to in paragraph (i) hereof (including, without limitation, the auditors' comment letter to management) submitted to JFC, the Lessee or any Subsidiary by independent certified public accountants in connection with any annual, interim or special audit;
(iv) promptly upon distribution thereof, copies of all such financial or other statements (including proxy statements) and reports as JFC, the Lessee or any Subsidiary shall send to any class of its partners or shareholders, as the case may be, its bank lenders or holders of any issue of its debt securities;
(v) promptly after filing thereof, copies of all reports, proxy statements and registration statements that JFC, the Lessee or any Subsidiary shall file with any securities exchange or the SEC, or any governmental or public authority or agency substituted therefor, or any Business Association, including, without limitation, all Focus Reports (provided that such Focus Reports may be provided on a quarterly basis) and all amendments to any of the foregoing filed by or with respect to the Lessee or any Subsidiary, and promptly after filing of any Form BD, Form ADV or CRD report or any amendment thereto that reflects any material disciplinary action, liability or change in financial position, an Officer's Certificate specifying the nature thereof and what action the Lessee is taking or proposes to take with respect thereto;
(vi) promptly upon receipt thereof, copies of all notices received from United States, Canadian or any other Permitted Nation or any state, provincial or local governmental or public authorities or agencies or any Business Association relating to any order, ruling, statute, regulation or other law or directive that might materially adversely affect the financial condition or business of the Lessee or any Subsidiary;
(vii) immediately after the occurrence or institution thereof, an Officer's Certificate specifying any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including, to the extent so
applicable: (w) any breach or non-performance of, or any default under, a Contractual Obligation of the Lessee, JFC or any of their Subsidiaries; (x) any dispute, litigation, investigation, proceeding or suspension between the Lessee, JFC or any of their Subsidiaries and any Governmental Authority; (y) the commencement of, or any material development in, any litigation or proceeding affecting the Lessee, JFC or any of their Subsidiaries, including pursuant to any applicable Environmental Laws; or (z) any other Environmental Claims, which certificate shall describe what action the Lessee is taking or proposes to take with respect thereto;
(x) immediately upon any partner or officer of the Lessee obtaining knowledge of any new designation of an Examining Authority, an Officer's Certificate specifying such new Examining Authority;
(xi) immediately upon any partner or officer of the Lessee obtaining knowledge of any condition or event which constitutes or which, after notice or lapse of time or both, would constitute an Event of Default or Potential Event of Default, an Officer's Certificate, specifying the nature and period of existence
thereof and what action the Lessee has taken or is taking or proposes to take with respect thereto;
(xii) immediately upon becoming aware of the occurrence of any of the following events affecting the Lessee, JFC or any ERISA Affiliate (but in no event more than 10 days after such event), and deliver to the Agent and each Funding Party a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Lessee, JFC or any ERISA Affiliate with respect to such event:
(w) an ERISA Event;
(x) a material increase in the Unfunded Pension Liability of any Pension Plan;
(y) the adoption of, or the commencement of contributions to, any Plan subject to Section 412 of the Code by the Lessee or any ERISA Affiliate; or
(z) the adoption of any amendment to a Plan subject to
Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability;
(xiii) at the time of release thereof, copies of all press releases of the Lessee, JFC or any of their Subsidiaries concerning any event or condition material to the business, prospects, earnings, properties or condition, financial or other, of any of them;
(xiv) promptly after the execution thereof, a copy of each amendment to the partnership agreement of the Lessee or JFC, other than an amendment made solely to reflect additional capital contributions to the Lessee or JFC, as the case may be, by a partner;
(xv) of any material change in accounting policies or financial reporting practices by the Lessee, JFC or any of their Subsidiaries;
(xvi) upon, but in no event later than 15 days after, any officer of the Lessee, JFC or any of their Subsidiaries becoming aware of (x) any and all enforcement, investigation, cleanup, removal or other governmental or regulatory actions instituted, completed or threatened against the Lessee, JFC or any of the Subsidiaries or any of their respective properties pursuant to any applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect, (y) all other material Environmental Claims, and (z) any
environmental or similar condition on any real property adjoining or in the vicinity of the property of the Lessee or any Subsidiary that could reasonably be anticipated to cause such property of the Lessee or such Subsidiary or any part thereof to be subject to any material restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws; and
its Consolidated Subsidiaries; provided, however, consolidating financial statements which separately incorporate each such Restricted Subsidiary may be provided in lieu of separate financial statements therefor.
(i) The Lessee shall, and shall cause each Subsidiary to, conduct its operations and keep and maintain its property and develop the Leased Property in compliance with all Environmental Laws.
(iii) The Lessee shall, and cause each Subsidiary to, maintain the Leased Property free from any Release.
taxes and assessments due and owing on the Leased Property for the period covered by such tax bill(s).
(ii) any Lien created under any Operative Document;
(iv) carriers', warehousemen's, mechanics', landlords', materialmen's, repairmen's or other similar Liens arising in the ordinary course of business which are not delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto;
(v) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation;
(viii) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or interfere with the ordinary conduct of the businesses of the Lessee and its Subsidiaries;
(xiii) Liens securing other obligations of the Lessee and its Subsidiaries not to exceed in the aggregate at any one time outstanding ten percent (10%) of the total tangible assets of JFC and its Consolidated Subsidiaries, as would be shown in the consolidated financial statements of JFC and its Consolidated Subsidiaries as at the end of the fiscal quarter next preceding the date on which such determination is made;
(xvi) Leases of property entered into with third party lessors in the ordinary course of business by the Lessee or any Subsidiary, as lessee, which are treated as operating leases under GAAP.
(i) endorsements for collection or deposit in the ordinary course of business;
(ii) Permitted Swap Obligations;
(v) other Contingent Obligations not exceeding at any time ten percent (10%) of the Lessee's Partnership Capital.
(i) Indebtedness evidenced by the notes issued pursuant to the Subordinated Debt Agreement, the 1992 Notes, the 1994 Notes and the 1996 Notes;
(ii) Additional Subordinated Debt, if immediately after the occurrence thereof, and giving effect thereto, total Subordinated Debt would not exceed 50% of Total Capitalization;
(vi) Other Indebtedness incurred by Lessee or any Subsidiary from time to time, provided however, the aggregate Indebtedness permitted by this paragraph (vi) shall not exceed $50,000,000 or 20% of Lessee's Net Capital, whichever is greater; and
(vii) Indebtedness evidenced by that certain Master Agreement dated as of November 30, 2000, among Edward D. Jones & Co., L.P., as Lessor, Construction Agent and Guarantor, Atlantic Financial Group, Ltd. as Lessor, SunTrust Bank and certain financial institutions parties thereto, as Lenders, and SunTrust Bank, as Agent, and joined in by The Jones Financial Companies, L.L.L.P.
(viii) Indebtedness that may be incurred by Lessee in the event Lessee elects to complete the purchase of the property located at 8333 South River Parkway, Tempe, Arizona pursuant to a letter of intent between Lessee and Motorola, Inc. dated August 8, 2001.
Section 5.1(m)) to exceed $15,000,000. Any such interest of the Lessee or a Consolidated Subsidiary acquired by it after the date of this Master Agreement shall be owned only indirectly by it, and only through a series of affiliated entities including at least one duly organized and validly existing corporation which is in good standing under the laws of its jurisdiction of incorporation and is at all times adequately capitalized and as to which all corporate formalities are at all times observed.
The Lessee shall not be a general partner in any general or limited partnership.
(i) dispositions of inventory, or used, worn-out or surplus equipment, all in the ordinary course of business;
(ii) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment,
or the proceeds of such sale are reasonably promptly applied to the purchase price of such replacement equipment; and
(a) The Lessee shall ensure that all written information, exhibits and reports furnished to the Agent or the Funding Parties do not and will not contain any untrue statement of a material fact and do not and will not omit to state any material fact or any fact necessary to make the statements contained therein not misleading in light of the circumstances in which made, and will promptly disclose to the Agent and the Funding Parties and correct any defect or error that may be discovered therein or in any Operative Document or in the execution, acknowledgment or recordation thereof.
(b) Promptly upon request by the Agent or the Funding Parties, the Lessee shall (and shall cause any of its Subsidiaries to) do, execute, acknowledge, deliver, record, rerecord, file, re-file, register and re-register, any and all such further acts, certificates, assurances and other instruments the Agent or such Lenders, as the case may be, may reasonably require from time to time in order (i) to carry out more effectively the purposes of this Agreement or any other Operative Document, and (ii) to better assure, convey, grant, assign, transfer, preserve, protect and confirm to the Agent and Lenders the rights granted or now or hereafter intended to be granted to the Lenders under any Loan Document or under any other document executed in connection therewith.
(c) Upon the written request of the Lessor or the Agent, the Lessee, at its own cost and expense, will cause all financing statements (including precautionary financing statements), fixture filings and other similar documents, to be recorded or filed at such places and times in such manner, as may be necessary to preserve, protect and perfect the interest of the Lessor, the Agent and the Lenders in the Leased Property as contemplated by the Operative Documents.
(a) the proceeds of the Loans received from the Lenders will be used by the Lessor solely to acquire the Leased Property and to pay the Construction Agent or the Lessee for certain closing, development and transaction costs associated therewith and for the costs of Construction. No portion of the proceeds of the Loans will be used by the Lessor (i) in connection with, whether directly or indirectly, any tender offer for, or other acquisition of, stock of any corporation with a view towards obtaining control of such other corporation or (ii) directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of purchasing or carrying any Margin Stock;
(b) it shall not engage in any business or activity, or invest in any Person, except for activities similar to its activities conducted on the date hereof, the Transaction and lease transactions similar to the Transaction;
(d) it will deliver to the Agent and the Lessee, as soon as available and in any event within 90 days after the end of each fiscal year, a balance sheet of the Lessor as of the end of such fiscal year and the related statements of income, partners' capital and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, together with copies of its tax returns, all certified by an officer of the Lessor's General Partner (and if the Lessor ever prepares audited financial statements, it shall deliver copies thereof to the Agent and the Lessee);
(e) it will permit the Agent, the Lessee and their respective representatives to examine, and make copies from, the Lessor's books and records, and to visit the offices and properties of the Lessor for the purpose of examining such materials, and to discuss the Lessor's performance hereunder with any of its, or its general partner's, officers and employees;
(f) it shall not consent to the creation of any easement or other restriction against any Leased Property other than as permitted pursuant to Article V of the Lease;
(g) it shall promptly discharge each Lessor Lien and shall indemnify the Lenders and the Lessee for any diminution in value of the Leased Property resulting from such Lessor Liens;
(h) it shall not enter into any other transactions, leases, purchases or other agreements, other than immaterial transactions, purchases, leases and other agreements entered into by the Lessor in the ordinary course of its business, in which the other parties to said transactions, leases, purchases or other agreements will have any recourse against Lessor which is in addition to Lessor's ownership or other interest in the property subject to such transactions, purchases, leases or other agreements, other than liability for required fundings, breach of contract, misrepresentation, gross negligence, willful misconduct, fraud, failure to turn over funds and similar exceptions to limitations on recourse;
(i) it shall not guaranty the liabilities of any other Person;
(j) it shall pay its debts as such debts become due unless such debts are the subject of a bona fide dispute;
(k) it shall not appoint a successor trustee or co-trustee to replace or serve with Bond Trustee, as the case may be (provided the Lessee's consent shall not be required so long as the fees of such successor trustee or co-trustee do not exceed the then current fees charged by the Bond Trustee for serving in such capacity);
(l) it shall not exercise any rights under the Bond Documents or grant any approvals or consents required to be granted pursuant to the Bond Documents (provided, except as otherwise set forth in (n) below, the Lessee's consent shall not be required as a prerequisite to the Lessor exercising any of its rights under the Bond Documents or granting any approvals or consents required to be granted pursuant thereto);
(m) it will promptly deliver to the Agent copies of any and all notices received pursuant to the Bond Documents; and
(n) it shall not exercise its option to purchase fee simple title to the Leased Property from the Issuer pursuant to Bond Lease until the occurrence of an Event of Default or a Potential Event of Default (provided, however, if at any time prior to the Lease Termination Date
the Issuer's credit or bond rating is downgraded below either A by S&P or A1 by Moody's, the Lessor, with the consent of the Agent and the Lender, may, after first giving the Lessee forty-five (45) days prior written notice and the right and opportunity to exercise the Lessee's option to purchase the Lessor's interest in the Leased Property in accordance with the terms of Article XIV of the Lease, exercise such purchase option without the necessity of obtaining the Lessee's consent thereto, in which case the Lessee shall promptly reimburse the Lessor for any and all costs incurred by the Lessor in exercising such option and the Lease shall continue in full force and effect as a direct lease by the Lessor to the Lessee so long as no Event of Default or Potential Event of Default then exists).
ARTICLE VI
TRANSFERS BY LESSOR AND LENDERS
(a) Any Lender may make, carry or transfer Loans at, to or for the account of, any of its branch offices or the office of an Affiliate of such Lender.
(b) Each Lender may assign all or a portion of its interests,
rights and obligations under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitment and the Loans at the time
owing to it) to any Eligible Assignee; provided, however, that (i) the Agent
and, unless a Potential Event of Default or Event of Default shall have
occurred, the Lessee must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld or delayed) unless such
assignment is to another Lender or to an Affiliate of the assigning Lender,
(ii) unless such Lender is assigning all of its Commitment, after giving
effect to such assignment, the Commitment of both the assignor and the
assignee is at least $1,000,000 and (iii) the parties to each such
assignment shall execute and deliver to the Agent an Assignment and
Acceptance, and, unless such assignment is to another Lender or to an
Affiliate of such Lender, a processing and recordation fee of $3,000. Any
such assignment of the Loans shall include both the A Loans and the B Loans,
on a pro rata basis. The Lessee shall not be responsible for such processing
and recordation fee or any costs or expenses incurred by any Lender or the
Agent in connection with such assignment. From and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, the assignee
thereunder shall be a party hereto and to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations
of a Lender under this Master Agreement and the Loan Agreement.
ARTICLE VII
INDEMNIFICATION
indemnify, protect, defend, save and hold harmless each Indemnitee, on an After-Tax Basis, from and against, any and all Claims that may be imposed on, incurred by or asserted, or threatened to be asserted, against such Indemnitee, whether or not such Indemnitee shall also be indemnified as to any such Claim by any other Person and whether or not such Claim arises or accrues prior to the Closing Date or after the Lease Termination Date, or results from such Indemnitee's negligence, in any way relating to or arising out of:
(a) any of the Operative Documents or any of the transactions contemplated thereby, and any amendment, modification or waiver in respect thereof; or
(b) the Land, the Building or any part thereof or interest therein, including the Bond Lease;
(c) the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition, substitution,
storage, transfer of title, redelivery, use, financing, refinancing,
disposition, operation, condition, sale (including, without limitation, any
sale pursuant to the Lease), return or other disposition of all or any part
of any interest in the Leased Property or the imposition of any Lien, other
than a Lessor Lien (or incurring of any liability to refund or pay over any
amount as a result of any Lien, other than a Lessor Lien) thereon,
including, without limitation: (i) Claims or penalties arising from any
violation or alleged violation of law or in tort (strict liability or
otherwise), (ii) latent or other defects, whether or not discoverable, (iii)
any Claim based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting title
to the Leased Property or any part thereof, (iv) the making of any
Alterations in violation of any standards imposed by any insurance policies
required to be maintained by the Lessee pursuant to the Lease which are in
effect at any time with respect to the Leased Property or any part thereof,
(v) any Claim for patent, trademark or copyright infringement, (vi) Claims
arising from any public improvements with respect to the Leased Property
resulting in any charge or special assessments being levied against the
Leased Property or any Claim for utility "tap-in" fees, and (vii) Claims for
personal injury or real or personal property damage occurring, or allegedly
occurring, on the Land, the Building or otherwise on or with respect to the
Leased Property;
(d) the breach or alleged breach by the Lessee of any representation or warranty made by it or deemed made by it in any Operative Document or any certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or financial advisor by the Lessee to act on its behalf in connection with this Master Agreement, or the incurring of any fees or commissions to which the Lessor, the Agent or any Lender might be subjected by virtue of their entering into the transactions contemplated by this Master Agreement (other than fees or
commissions due to any broker, finder or financial advisor retained by the Lessor, the Agent or any Lender);
(f) the existence of any Lien on or with respect to the Leased Property, the Construction, any Basic Rent or Supplemental Rent, title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Leased Property or by reason of labor or materials furnished or claimed to have been furnished to the Construction Agent, the Lessee, or any of its contractors or agents or by reason of the financing of any personalty or equipment purchased or leased by the Lessee or Alterations constructed by the Lessee;
(g) the transactions contemplated hereby or by any other Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction described in Section 4975(c) of the Code; or
(h) any act or omission by the Lessee under the Bond Lease or any other Operative Document, and any breach of any requirement, condition, restriction or limitation in the Bond Lease or any other Operative Document;
(i) the presence on or under the Land of any Hazardous Materials, or any releases or discharges of any Hazardous Materials on, under, from or onto the Land,
(ii) any activity, including, without limitation, construction, carried on or undertaken on or off the Land, and whether by the Lessee or any predecessor in title or any employees, agents, contractors or subcontractors of the Lessee or any predecessor in title, or any other Person, in connection with the handling, treatment, removal, storage, decontamination, clean-up, transport or disposal of any Hazardous Materials that at any time are located or present on or under or that at any time migrate, flow, percolate, diffuse or in any way move onto or under the Land,
(iii) loss of or damage to any property or the environment (including, without limitation, clean-up costs, response costs, remediation and removal costs, cost of corrective action, costs of financial assurance, fines and penalties and natural resource damages), or death or injury to any Person, and all expenses associated with the protection of wildlife, aquatic species, vegetation, flora and fauna, and any mitigative action required by or under Environmental Laws, in each case to the extent related to the Leased Property,
(iv) any claim concerning the Leased Property's lack of compliance with Environmental Laws, or any act or omission causing an environmental condition on or with respect to the Leased Property that requires remediation or would allow any governmental agency to record a lien or encumbrance on the land records, or
(v) any residual contamination on or under the Land, or affecting any natural resources on the Land, and to any contamination of any property or natural resources arising in connection with the generation, use, handling, storage, transport or disposal of any such Hazardous Materials on or from the Leased Property; in each case irrespective of whether any of such activities were or will be undertaken in accordance with applicable laws, regulations, codes and ordinances;
--- ---
(w) prior to or during the Lease Term,
(x) at any time during which the Lessee or any Affiliate
thereof owns any interest in or otherwise occupies or possesses the
Leased Property or any portion thereof, or
|
(y) during any period after and during the continuance of any Event of Default;
reasonable manner at its own expense and with its own counsel in any proceeding conducted by the Lessee in accordance with the foregoing.
(i) Taxes on, based on, or measured by or with respect to net
income of the Lessor, the Agent and the Lenders (including minimum
Taxes, capital gains Taxes, Taxes on or measured by items of tax
preference or alternative minimum Taxes) other than (A) any such
Taxes that are, or are in the nature of, sales, use, license,
rental or property Taxes, and (B) withholding Taxes imposed by the
United States or any state in which the Leased Property is located
(i) on payments with respect to the Notes, to the extent imposed by
reason of a change in Applicable Law occurring after the date on
which the holder of such Note became the holder of such Note or
(ii) on Rent, to the extent the net payment of Rent after deduction
of such withholding Taxes would be less than amounts currently
payable with respect to the Funded Amounts provided that this
clause (i) shall not
prevent a payment from being made on an After-Tax Basis if such payment is otherwise required to be so made;
(ii) Taxes on, based on, or in the nature of or measured by Taxes on doing business, business privilege, franchise, capital, capital stock, net worth, or mercantile license or similar taxes other than any Taxes that are or are in the nature of sales, use, rental, license or property Taxes relating to the Leased Property provided that this clause (ii) shall not prevent a payment from being made on an After-Tax Basis if such payment is otherwise required to be so made;
(iii) Taxes that are based on, or measured by, the fees or other compensation received by a Person acting as Agent (in its individual capacities) or any Affiliate of any thereof for acting as trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or omission, or are attributable to any period of time, that occurs after the earlier of (A) the expiration of the Lease Term with respect to the Leased Property and, if the Leased Property is required to be returned to the Lessor in accordance with the Lease, such return and (B) the discharge in full of the Lessee's obligations to pay the Lease Balance, or any amount determined by reference thereto, with respect to the Leased Property and all other amounts due under the Lease, unless such Taxes relate to acts, events or matters occurring prior to the earlier of such times or are imposed on or with respect to any payments due under the Operative Documents after such expiration or discharge;
(v) Taxes imposed on a Tax Indemnitee that result from any voluntary sale, assignment, transfer or other disposition or bankruptcy by such Tax Indemnitee or any related Tax Indemnitee of any interest in any Leased Property or any part thereof, or any interest therein or any interest or obligation arising under the Operative Documents, or from any sale, assignment, transfer or other disposition of any interest in such Tax Indemnitee or any related Tax Indemnitee, it being understood that each of the following shall not be considered a voluntary sale: (A) any assignment, sublease, substitution, replacement or removal of any of the Leased Property by the Lessee, (B) any sale or transfer resulting from the exercise by any Lessee of any termination option, any purchase option or sale option, (C) any sale or transfer while an Event of Default shall have occurred and be continuing under the Lease, (D) a Casualty or Condemnation affecting the Leased Property or any part thereof, and (E) any sale or transfer resulting from the Lessor's exercise of remedies under the Lease;
(vii) any Tax that is imposed on a Tax Indemnitee as a result of such Tax Indemnitee's gross negligence or willful misconduct (other than gross negligence or willful misconduct imputed to such Tax Indemnitee solely by reason of its interest in the Leased Property);
(viii) any Tax that results from a Tax Indemnitee engaging, with respect to any Leased Property, in transactions other than those permitted by the Operative Documents;
(ix) to the extent any interest, penalties or additions to tax result in whole or in part from the failure of a Tax Indemnitee to file a return or pay a Tax that it is required to file or pay in a proper and timely manner, unless such failure (A) results from the transactions contemplated by the Operative Documents in circumstances where Lessee did not give timely notice to such Tax Indemnitee of such filing or payment requirement that would have permitted a proper and timely filing of such return or payment of such Tax, as the case may be, or (B) results from the failure of the Lessee to supply information necessary for the proper and timely filing of such return or payment of such Tax, as the case may be, that was not in the possession of such Tax Indemnitee;
Notwithstanding the foregoing, the exclusions provided for in clauses (i), (ii) and (v) of this Subsection 7.4(b) shall not apply (but the other exclusions shall apply) to any Taxes or any increase in Taxes imposed on any Tax Indemnitee net of any decrease in Taxes realized by such Tax Indemnitee to the extent that any such Tax increase or decrease would not have occurred if on the date of each Advance the Lessor and the Lenders had advanced funds directly to the Lessee in the form of a loan by such Lessor or Lender secured by the Leased Property in an amount equal to the amounts funded by the Lessor and the Lenders on each such date and a principal balance at the maturity of such loan in an amount equal to the Funded Amounts at the end of the Lease Term.
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Funding Party which is not otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Funding Party any other condition;
and the result of any of the foregoing is to increase the cost to such Funding Party, by an amount which such Funding Party deems to be material, of making, converting into, continuing or maintaining LIBOR Advances or to reduce any amount receivable hereunder in respect thereof then, in any such case, the Lessee shall promptly pay such Funding Party, upon its demand, any additional amounts necessary to compensate such Funding Party on an After- Tax Basis for such increased cost or reduced amount receivable. If any Funding Party becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify the Lessee, through the Agent, of the event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection submitted by such Funding Party, through the Agent, to the Lessee in good faith and setting forth in reasonable detail the calculation of such amounts shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Master Agreement and the payment of the Notes and all other amounts payable under the Operative Documents.
other amounts payable hereunder at the rates or in the amounts specified in the Operative Documents. Whenever any Withholding Taxes are payable by the Lessee, as promptly as possible thereafter the Lessee shall send to the Agent for its own account or for the account of such Funding Party, as the case may be, a certified copy of an original official receipt received by such Lessee showing payment thereof. If the Lessee fails to pay any Withholding Taxes when due to the appropriate taxing authority or fails to remit to the Agent the required receipts or other required documentary evidence, each Lessee, jointly and severally, shall indemnify the Agent and the Funding Parties for any incremental taxes, interest or penalties that may become payable by the Agent or any Funding Party as a result of any such failure. The agreements in this subsection shall survive the termination of this Master Agreement and the payment of the Notes and all other amounts payable under the Operative Documents.
of a Rent Period with respect thereto, including, without limitation, in each case, any such loss (other than non- receipt of the Applicable Margin or, without duplication, anticipated profits) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained (it being understood that any such calculation will be made on notional amounts as the Funding Parties are not required to show that they matched deposits specifically). A certificate as to any additional amounts payable pursuant to this subsection submitted by such Funding Party, through the Agent, to the Lessee in good faith shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Notes and all other amounts payable under the Operative Documents.
Balance. The Lessee shall promptly reimburse the Lessor for the amount equal to such decline in value to the extent that the Report indicates that such decline was due to:
(w) extraordinary use, failure to maintain, to repair, to restore, to rebuild or to replace, failure to comply with all Applicable Laws, failure to use, workmanship, method of installation or removal or maintenance, repair, rebuilding or replacement, or any other cause or condition within the power of the Lessee to control or effect resulting in the Building failing to be of the type and quality contemplated by the Appraisal (excepting in each case ordinary wear and tear), or
(x) any Alteration made to, or any rebuilding of, the Leased Property or any part thereof by the Lessee, or
(y) any restoration or rebuilding carried out by the Lessee or any condemnation of any portion of the Leased Property pursuant to Article X of the Lease, or
(z) any use of the Leased Property or any part thereof by the Lessee other than as permitted by the Lease, or any act or omission constituting a breach of any requirement, condition, restriction or limitation set forth in the Deed or the Purchase Agreement.
ARTICLE VIII
MISCELLANEOUS
Business Day after being sent, if sent by overnight courier service; (ii) the Business Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and confirmed electronically or otherwise during business hours of a Business Day (or on the next Business Day if otherwise sent by facsimile and confirmed electronically or otherwise); or (iv) three Business Days after being sent, if sent by registered or certified mail, postage prepaid.
(iii) reducing any amount payable to such Funding Party under the Operative Documents or extending the time for payment of any such amount, including, without limitation, any Rent, any Funded Amount, any fees, any indemnity, the Lease Balance, any Funding Party Balance, the Recourse Deficiency Amount, interest or Yield; or
(iv) consenting to any assignment of the Lease or the extension of the Lease Term, releasing any of the collateral assigned to the Agent
and the Lenders pursuant to any Mortgage and any Assignment of Lease and Rents (but excluding a release of any rights that the Lenders may have in the Leased Property, or the proceeds thereof as contemplated in the definition of "Release Date"), releasing the Lessee from its obligations in respect of the payments of Rent and the Lease Balance, releasing any Lessee from its obligations under the Operative Documents or changing the absolute and unconditional character of any such obligation; and
(y) no such termination, amendment, supplement, waiver or modification shall, without the written agreement or consent of the Lessor, the Agent and the Required Lenders, be made to the Lease or the Security Agreement and Assignment; and
Documents and the documents and instruments referred to therein), and (ii) McGuireWoods LLP, but not including any fees and disbursements for any other outside counsel representing any Lender) and of the Lessor, the Agent, the Lenders, SunTrust Equitable Securities Corporation and the Bond Trustee in connection with endeavoring to enforce the Operative Documents and the documents and instruments referred to therein (including, without limitation, the reasonable fees actually incurred and disbursements of counsel for the Lessor, the Agent, the Lenders and the Bond Trustee). All references in the Operative Documents to "attorneys' fees" or "reasonable attorneys fees" shall mean reasonable attorneys' fees actually incurred, without regard to any statutory definition thereof. During the Construction Term, the foregoing costs and expenses of the Lessor, the Agent, the Lenders, SunTrust Equitable Securities Corporation and the Bond Trustee may be paid using the proceeds of Advances (which costs and expenses shall be included in the Construction Budget); thereafter, all such costs and expenses shall be paid by the Lessee.
(a) submits for itself and its property in any legal action or proceeding relating to this Master Agreement or any other Operative Document, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive general jurisdiction of the Courts of the State of Georgia sitting in Fulton County, the courts of the United States of America for the Northern District of Georgia, and appellate courts from any thereof;
(b) consents that any such action or proceedings may be brought to such courts, and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;
(d) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.
EDWARD D. JONES & CO., L.P., as Lessee,
Construction Agent and Guarantor
By: EDJ Holding Company, Inc., its General
Partner
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Missouri as
Atlantic Financial Group, L.P.),
as Lessor
By: Atlantic Financial Managers, Inc., its
General Partner
SUNTRUST BANK, as Agent
MASTER AGREEMENT
SUNTRUST BANK, as Lender
BRANCH BANKING AND TRUST
COMPANY, as Lender
The Jones Financial Companies, L.L.L.P. ("JFC") joins in the foregoing Master Agreement for the purpose of acknowledging the terms, conditions and provisions thereof and hereby covenants and agrees to observe, perform and comply with all of the obligations of JFC thereunder.
THE JONES FINANCIAL COMPANIES,
L.L.L.P.
SCHEDULE 2.2
Amount of Each Funding Party's Commitment
Lessor Commitment Percentage: 3.5% Lessor Commitment $840,000.00 Lender Commitment Percentages: SunTrust Bank ____% Branch Banking and Trust Company ____% Lender Commitments: $23,160,000.00 SunTrust Bank $______________ Branch Banking and Trust Company $______________ |
SCHEDULE 4.1(a)(i)
Indebtedness of Lessee
BANK LOANS:
The Lessee borrows from banks on a short-term basis primarily to finance customer margin balances and inventory securities. As of June 30, 2001, the Lessee had bank lines of credit aggregating $1,145,000 of which $1,095,000 was through uncommitted facilities. Actual borrowing availability is primarily based on the value of securities owned and customers' margin securities. At June 30, 2001, collateral, with a market value of $1,330,723, was available to support secured bank loans. Bank loans outstanding approximate their fair value.
LIABILITIES SUBORDINATED TO CLAIMS OF GENERAL CREDITORS:
Liabilities subordinated to the claims of general creditors consist of:
June 30, 2001
-------------
Capital notes, 8.18%, due in annual installments of
$10,500 commencing on September 1, 2000, with a final
installment on September 1, 2008. $ 84,000
Capital notes, 7.95%, due in annual installments of
$10,225 with a final installment of $10,200 on
April 15, 2006. 51,100
Capital notes, 8.96%, due in annual installments of
$6,000 with a final installment on May 1, 2002. 6,000
Capital notes, with rates ranging from 7.51% to 7.79%
due in annual installments commencing on August 15,
2005 with a final installment on August 15, 2011. 75,000
--------
$216,100
========
|
Required annual principal payments, as of June 30, 2001, are as follows:
Year Ending Principal
Last Friday of June Payment
------------------- -------
2002 $ 26,725
2003 20,725
2004 20,725
2005 20,725
2006 43,225
Thereafter 84,000
--------
$216,100
|
SCHEDULE 4.1(a)(ii)
Subsidiaries
[TO BE ATTACHED]
SCHEDULE 4.1(d)(v)
Pending Investigations or Inquiries
On January 5, 1999, the Company issued its response summarizing corrective actions. Upon receipt of this correspondence on January 15, 1999, the Securities and Exchange Commission issued a letter for the Company urging it to give immediate attention to the internal control issues. Subsequently, on January 26, 1999, a telephone conference call was conducted between representatives of the Securities and Exchange Commission and the Company reviewing the changes in internal control systems.
On November 10, 1999, a formal document request for certain items relating to internal controls and conversion cases was issued, for which responsive information has been issued. Since November 10, 1999 substantial discovery has been conducted and the Company has been notified that the staff will recommend to the Commission that an enforcement action be instituted regarding instances that occurred during 1996 through early 1998. On March 26, 2001 the Company filed a Wells Submission outlining its reasons why such an enforcement action is not warranted.
SCHEDULE 4.1(m)
Environmental Matters
None.
SCHEDULE 4.1(u)(i)
Leases
[TO BE ADDED]
SCHEDULE 5.2(a)(i)
Existing Permitted Liens
Those liens encumbering the property located at 8640 S. River Parkway, Tempe, Arizona and created in connection with the transactions contemplated by that certain Master Agreement dated as of November 30, 2000, among Edward D. Jones & Co., L.P., as Lessee, Construction Agent and Guarantor, Atlantic Financial Group, Ltd., as Lessor, SunTrust Bank and certain financial institutions parties thereto, as Lenders, and SunTrust Bank, as Agent, and joined in by the Jones Financial Companies, L.L.L.P.
Those liens created to perfect purchase money indebtedness which will encumber the property located at 8333 South River Parkway, Tempe, Arizona to the extent Lessee elects to complete the purchase of such real property pursuant to a non-binding letter of intent between Lessee and Motorola, Inc. dated August 8, 2001.
SCHEDULE 5.2(a)(xiv) Existing Options, Etc.
JFC and Subsidiaries has the right to purchase the building at 1245 Kelley Memorial Drive, St. Louis, MO 63131, in the 20th year of the lease, or if the building is offered for sale during the lease term which commenced January 1, 2002. Additionally, JFC and Subsidiaries has the option to purchase the adjacent buildings at 12444 Powerscourt Drive and 12412 Powerscourt Drive if and when the space is offered.
JFC and Subsidiaries has the right to purchase the building at 700 Maryville Centre, St. Louis, MO 63141, between the 25th month and 31st month of the lease which commenced March 1, 2000.
JFC and Subsidiaries has the right to purchase the building at 8640 S. River Parkway, Tempe, Arizona 85284, at the end of the initial five year lease term which commenced on November 30, 2000, and at the end of each of the five year lease renewals.
Edward D. Jones & Co., L.P. will have the right to purchase an interest in a ground lease, building and personal property located at 8333 South River Parkway, Tempe, Arizona following a sixty (60) day due diligence period and a thirty (30) day closing period following acceptance of an offer dated August 8, 2001 from the seller of such property.
SCHEDULE 5.2(d)
Contingent Obligations
CONTINGENCIES:
Lessee's guarantee of Edward Jones Limited (UK) GBP 1,000,000 credit facility with the Royal Bank of Scotland.
Lessee's guarantee of Edward Jones Limited (UK) $500,000 USD foreign exchange line with Wells Fargo Bank, N.A., currently under negotiation.
Various legal actions are pending against the Lessee with certain cases claiming substantial damages. These actions are in various stages and the results of such actions cannot be predicted with certainty. In the opinion of management, after consultation with legal counsel, the ultimate resolution of these actions is not expected to have a material adverse impact on the Lessee's results of operations or financial condition.
SCHEDULE 8.2
Addresses for Notices
Lessee: Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Kenneth E. Schutte
Lessor: Atlantic Financial Group, Ltd.
2808 Fairmount, Suite 250
Dallas, Texas 75201
Attn: Stephen S. Brookshire
Agent for Lender: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attn: Linda L. Dash
JFC: The Jones Financial Companies, L.L.L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Lawrence R. Sobol
|
EXHIBIT A
TO MASTER AGREEMENT
FORM OF FUNDING REQUEST
TO: The Lessor, the Agent and each Lender (as defined in the Master Agreement referred to below)
months] [a Base Rate Advance] [allocated as follows: $ to a LIBOR
-----------
Advance with a Rent Period of months and $ to a Base Rate
--- ---------------
Advance].
|
In connection with such requested Funding, the undersigned, hereby represents and warrants to you as follows:
1. on the requested Funding Date the representations and warranties of the Lessee contained in Section 4.1 of the Master Agreement shall be true and correct in all material respects on and as of such Funding Date as though made on and as of such Funding Date, except to the extent such representations or warranties relate solely to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date;
2. there shall not have occurred any Event of Default or Potential Event of Default;
3. the amount of the requested Funding represents costs of Construction and transaction permitted to be funded pursuant to the Operative Documents as more
4. the amount expended by the Construction Agent to date for the construction of the Building does not exceed the amount budgeted to be expended for the percentage of construction completed to date and, in the good faith judgment of the undersigned, the construction of the Building will be completed within the Construction Budget;
6. no Event of Default, Potential Event of Default, Event of Loss, or Event of Taking has occurred, and no action is pending or, to the knowledge of the undersigned, threatened by a Governmental Authority to initiate a Condemnation or an Event of Taking with respect to the Leased Property; and
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc., its sole general
partner
SCHEDULE 1
TO FUNDING REQUEST
EXHIBIT B
TO MASTER AGREEMENT
FORM OF ASSIGNMENT OF LEASE AND RENTS
This instrument prepared by and when recorded return to:
McGuireWoods LLP, One James Center, Richmond, Virginia 23219, Attention:
Edmund S. Pittman, Esquire
ASSIGNMENT OF LEASE
AND RENTS
Dated as of September 18, 2001
between
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Missouri as Atlantic Financial Group, L.P.), as Lessor and Assignor
and
SUNTRUST BANK,
as Agent and Assignee
St. Louis County, Missouri
TABLE OF CONTENTS
Page
----
SECTION 1. COLLATERAL ASSIGNMENT OF LEASE AND GUARANTY AGREEMENT..... 2
SECTION 2. ASSIGNMENT AS COLLATERAL SECURITY......................... 3
SECTION 3. PAYMENTS UNDER LEASE...................................... 3
SECTION 4. POWER OF ATTORNEY IN RESPECT OF LEASE..................... 4
SECTION 5. ASSIGNEE DESIGNATED RECIPIENT............................. 4
SECTION 6. ALLOCATION PURSUANT TO LOAN AGREEMENT..................... 4
SECTION 7. IRREVOCABILITY; SUPPLEMENTAL INSTRUMENTS.................. 4
SECTION 8. AMENDMENTS OR TERMINATION OF LEASE........................ 5
SECTION 9. LESSEE'S CONSENT AND AGREEMENT............................ 5
SECTION 10. REMEDIES CUMULATIVE....................................... 5
SECTION 11. MISCELLANEOUS............................................. 5
Consent and Agreement of Lessee
EXHIBITS
--------
EXHIBIT A - Description of Land
|
RECITALS:
The Lessor has entered into the Master Agreement with the Assignee, the Lessee, the Lenders and the Assignee providing, among other things, for the commitment of the Lenders to assist in financing or refinancing, as applicable, the Lessor's acquisition of the Land and the construction of the Building thereon, and the acquisition and installation of the Equipment, by making Loans to be evidenced by the respective Notes. Such Loans as evidenced by the Notes
NOW, THEREFORE, the Lessor hereby agrees for the benefit of Assignee as follows:
TOGETHER WITH the right to inspect the Leased Property and all records relating thereto and to enforce performance or observance by the Lessee of any of such rights by the exercise of the right to proceed by appropriate court action or actions, either at law or in equity,
to enforce performance by the Lessee of the applicable covenants and terms or to recover damages for the breach thereof.
TO HAVE AND TO HOLD the same unto the Assignee, for the benefit of the Lenders, and its successors and assigns forever.
the Lessee has received from the Assignee written notice of the termination of such assignment, make any other assignment, designation or direction inconsistent therewith, and that any assignment, designation or direction inconsistent therewith shall be void. The Lessor will from time to time, upon request of the Assignee, execute all instruments of further assurance and all such supplemental instruments as the Assignee may reasonably specify.
(b) This Assignment Agreement shall be binding upon, inure to the benefit of and be enforceable by, the respective successors and assigns of the parties hereto. The headings to the various paragraphs of this Assignment Agreement have been inserted for convenience reference only and shall not modify, define, limit or expand the express provisions of this Assignment Agreement. Neither this Assignment Agreement nor any provision hereof may be amended, modified, waived, discharged or terminated orally, but only by an instrument signed by the parties hereto. If any provision of this Assignment Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Assignment Agreement and any other application of such provision shall not be affected thereby.
(c) This Assignment Agreement may be executed in counterparts, each of which shall be deemed an original, and such counterparts shall together constitute but one and the same Assignment Agreement. It shall not be necessary in making proof of this Assignment Agreement to produce or account for more than one such counterpart signed by the party against which enforcement of this Assignment Agreement is sought.
(d) THIS ASSIGNMENT AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LIEN HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE LAND IS LOCATED.
(e) Upon payment in full of all indebtedness secured by this Assignment Agreement and the Loan Agreement and performance of all other obligations secured hereby and thereby, this Assignment Agreement and the Lien created hereby shall terminate and be of no further force or effect. The Assignee shall, at the Lessee's expense, do, execute, acknowledge and deliver each and every deed, conveyance, transfer and release necessary or proper to evidence the release of record of this Assignment Agreement.
(f) Notwithstanding anything to the contrary set forth herein, in the event of any conflict between any provision of this Assignment Agreement and the Loan Agreement, the terms and provisions of the Loan Agreement shall control.
(g) All amounts paid by the Lessee to the Assignee hereunder shall be fully credited against amounts payable by the Lessee to the Lessor under the Lease.
IN WITNESS WHEREOF, the Lessor and the Assignee have each caused this Assignment Agreement to be duly executed and delivered, in its respective name and behalf, all as of the date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership (registered to do
business in Missouri as Atlantic Financial Group,
L.P.), as Lessor and Assignor
By: Atlantic Financial Managers, Inc.,
a Texas corporation.
its general partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STATE OF TEXAS )
) ss.
COUNTY OF )
----------------
On this day of September, 2001, before me, , a
---- --------------------
|
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
SUNTRUST BANK, a Georgia banking
corporation, as Agent and Assignee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STATE OF GEORGIA )
) ss.
COUNTY OF )
---------------
On this day of September, 2001, before me, ,
--- ----------------------
|
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
ASSIGNMENT OF LEASE AND RENTS
CONSENT AND AGREEMENT
OF LESSEE
2. Notwithstanding (i) the bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceeding affecting the Lessor under the Lease, (ii) any action with respect to the Lease which may be taken by any trustee or receiver of the Lessor, or by any court in such proceeding, and (iii) the exercise by the Agent or the Lenders of any rights and remedies under the Assignment Agreement, the Lessee agrees that it will remain obligated under the Lease in accordance with its terms and that it will not take any action to terminate (other than pursuant to its express rights under the Lease and the Master Agreement to do so), rescind or avoid the Lease.
3. To the extent that the Lessee may acquire any indebtedness of the Lessor or any other party to the Master Agreement, or any claim against the Lessor or any other party to the Master Agreement, by way of subrogation or otherwise, all such indebtedness and claims are hereby subordinated and made fully subject in right of payment thereof to the prior payment in full of the Notes.
4. In addition to (and not in limitation of) all of the Lessee's reimbursement and indemnity obligations set forth in the Operative Documents, the Lessee agrees to pay promptly all reasonable and documented costs and expenses incurred by the Lessor, pursuant to the Assignment Agreement, for the release of the Assignment Agreement.
IN WITNESS WHEREOF, the Lessee has caused this Consent and Agreement to be duly executed and delivered, in its name and behalf, all as of the date and year first above written.
EDWARD D. JONES & CO., L.P., a Missouri
limited partnership, as Lessee
By: EDJ Holding Company, Inc., a Missouri
corporation, its sole general partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
STATE OF MISSOURI )
) ss.
COUNTY OF )
--------------
On this day of September, 2001, before me, ,
---- ------------------------
|
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
EXHIBIT A
[TO BE ADDED]
EXHIBIT C
TO MASTER AGREEMENT
SECURITY AGREEMENT AND ASSIGNMENT
(Construction Contract, Architect's Agreement, Permits, Licenses and Governmental Approvals, and Plans, Specifications and Drawings)
3. all other Construction Documents, including contracts and agreements relating to the acquisition and installation of the Equipment;
For purposes of completing the Construction following the occurrence of an Event of Default or a Construction Agency Event of Default, the Secured Party may, at its option, further assign its right, title and interest in the Collateral without the consent of the Assignor, the Contractor, the Architect or any other contractor or vendor, but shall promptly thereupon notify the Contractor and the Architect, and upon exercise by such assignee of its rights to complete the Construction pursuant hereto, only such assignee, and not the Secured Party, shall become liable to pay or perform the Secured Party's obligations under the Construction Contract, the Architect's Agreement and the other Construction Documents.
This assignment is a present, perfected and absolute assignment, provided that the Secured Party shall not have the right to undertake completion of the Construction or directly to enforce the provisions of the Construction Contract or the Architect's Agreement until an Event of Default shall occur under the Lease or a Construction Agency Event of Default shall occur under the Lease or a Construction Agency Event of Default shall occur under the Construction Agency Agreement or until the Leased Property is returned to the Secured Party pursuant to the Construction Agency Agreement. Following the occurrence of any such Event of Default or Construction Agency Event of Default, the Secured Party may, without affecting any other right or remedy available to it, exercise its rights under this assignment as provided herein in any manner permitted by law. If any notice to the Assignor is required by law, such notice shall be deemed commercially reasonable if given at least ten (10) days prior to the date of intended
action. If the Assignor returns the Leased Property to the Secured Party pursuant to the Construction Agency Agreement, the Secured Party may (subject to any necessary third party consents) exercise all of the Assignor's rights, and assert all of the Assignor's claims, under and with respect to the Construction Contract, the Architect's Agreement, the other Construction Documents and the other Collateral.
This assignment may be effectively waived, modified, amended or terminated only by a written instrument executed by the Secured Party. Any waiver by the Secured Party shall be effective only with respect to the specific instance described therein. Delay or course of conduct shall not constitute a waiver of any right or remedy of the Secured Party.
THIS ASSIGNMENT HAS BEEN DELIVERED IN, AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
All terms capitalized herein and not specifically defined herein which are capitalized and defined in the Lease shall have the same respective meanings for purposes hereof as for purposes of the Lease.
IN WITNESS WHEREOF, the undersigned have executed and delivered this assignment as of September ___, 2001, pursuant to proper authority duly granted.
EDWARD D. JONES & CO., L.P., a
Missouri limited partnership
By: EDJ Holding Company, Inc., a
Missouri corporation, its sole general
partner
SECURITY AGREEMENT
ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (registered to do business in Missouri as Atlantic Financial Group, L.P.)
By: Atlantic Financial Managers, Inc., a Texas corporation, its General Partner
SECURITY AGREEMENT
SCHEDULE 1
[TO BE PROVIDED]
The undersigned hereby acknowledges receipt of a counterpart original of, and consents to, the foregoing Security Agreement and Assignment.
2. The undersigned agrees to look solely to the Assignor for the
performance of all of the obligations of the Assignor under the Construction
Contract, and not to look to Secured Party for such performance, except only
as provided below. However, if the Secured Party exercises, with respect to
the Construction Contract, the rights and privileges conferred upon it by
the Security Agreement and Assignment and asserts (by written election as
specified in the immediately succeeding two sentences) the present right to
have the benefits of the Construction Contract and to enforce the same
against the undersigned in the place and stead of the Assignor, the
undersigned agrees to perform for, and for the benefit of, the Secured Party
all of the undersigned's obligations under and pursuant to the Construction
Contract if the balance due under the Construction Contract (being the
portion of the total price which is then or thereafter due and payable as
provided therein, less the total of all portions thereof theretofore paid to
or for the benefit of the Contractor) has been paid or is then paid (or for
portions thereof not then due under the Construction Contract, such amounts
are paid as and when due under the Construction Contract). Prior to the
Secured Party's express written election (if any) to succeed to the
Assignor's rights and to assume the Assignor's obligations (to the extent
provided in the immediately succeeding sentence) under the Construction
Contract, the Contractor agrees that the Secured Party shall have no
personal obligations or liabilities of any kind under the Construction
Contract, the Security Agreement and Assignment, or otherwise. In the event
that the Secured Party shall so expressly elect in writing to succeed to the
Assignor's rights and to assume the Assignor's obligations under the
Construction Contract, the sole obligations that the Secured Party shall
assume and be liable for are (i) obligations to pay the Contractor the
amounts due under the Construction Contract as provided in the second
sentence of this paragraph (whether due before or after such election), and
(ii) other obligations of the Assignor under the Construction Contract first
accruing after such election by the Secured Party, and the Secured Party
shall not be liable or obligated for any other obligations.
3. The Contractor hereby agrees to send to the Secured Party copies of all notices of any pending or threatened default, nonperformance or termination to the Assignor under the Construction Contract by courier or certified mail, return receipt requested, to the following address (or at such other address as the Secured Party shall, from time to time, notify the undersigned in writing):
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Such notices of any pending or threatened default, nonperformance or termination shall be sent at the same time as any such notices are sent to the Assignor.
5. Notices to the Contractor hereunder shall be sent by courier or certified mail, return receipt requested, to the following:
6. In the event the Construction Contract is terminated, the Secured Party shall be entitled to use, as required for the Construction (as defined in the Lease), without any additional cost or fee, any and all Permits and all Plans and Specifications and final plans, drawings and specifications ("Plans Permits") developed in connection therewith for the Construction, but in no event will such Plans and Permits be used for any project other than the current project.
The foregoing is furnished for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the undersigned, and the undersigned understands and intends that the Secured Party will rely on the foregoing and that the undersigned will be legally bound by the foregoing. This Consent and Acknowledgment shall inure to the benefit of the Secured Party and its successors and assigns.
The Contractor hereby acknowledges that the Secured Party will assign all of its rights hereunder to SunTrust Bank, as Agent for the benefit of the Lenders, and agrees that the Agent may exercise all rights of the Secured Party hereunder.
All capitalized terms used herein and not otherwise specifically defined shall have the meanings provided therefor in the Security Agreement and Assignment.
[INSERT NAME OF CONTRACTOR]
Attach copy of Construction Contract
The undersigned hereby acknowledges receipt of a counterpart original of, and consents to, the foregoing Security Agreement and Assignment.
2. The undersigned agrees to look solely to the Assignor for the performance of all of the obligations of the Assignor under the Architect's Agreement, and not to look to Secured Party for such performance. However, if the Secured Party exercises, with respect to the Architect's Agreement, the rights and privileges conferred upon it by the Security Agreement and Assignment and asserts (by written election as specified in the immediately succeeding two sentences) the present right to have the benefits of the Architect's Agreement and to enforce the same against the undersigned in the place and stead of the Assignor, the undersigned agrees to perform for, and for the benefit of, the Secured Party all of the undersigned's obligations under and pursuant to the Architect's Agreement if the balance due under the Architect's Agreement (being the portion of the total price which is then or thereafter due and payable as provided therein, less the total of all portions thereof theretofore paid to or for the benefit of the Architect) has been paid or is then paid (or for portions thereof not then due under the Architect's Agreement, such amounts are paid as and when due under the Architect's Agreement). Prior to the Secured Party's express written election (if any) to succeed to the Assignor's rights and to assume the Assignor's obligations (to the extent provided in the immediately succeeding sentence) under the Architect's Agreement, the Architect agrees that the Secured Party shall have no personal obligations or liabilities of any kind under the Architect's Agreement, the Security Agreement and Assignment or otherwise. In the event that the Secured Party shall so expressly elect in writing to succeed to the Assignor's rights and to assume the Assignor's obligations under the Architect Agreement, the sole obligations which the Secured Party shall assume and be liable for are (i) obligations to pay the Architect the amounts due under the Architect's Agreement as provided in the second sentence of this paragraph (whether due before or after such election), and (ii) other obligations of the Assignor under the Architect's Agreement first accruing after such election by the Secured Party, and the Secured Party shall not be liable or obligated for any other obligations.
3. The Architect hereby agrees to send to the Secured Party copies of all notices to the Assignor under the Architect's Agreement by courier or certified mail, return receipt requested, to the following address (or at such other address as the Secured Party shall, from time to time, notify the undersigned in writing):
D-1-1
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Such notices shall be sent at the same time as any notices to the Assignor.
5. The Architect agrees to deliver to the Secured Party, upon completion of the Construction (as defined in the Lease), a certificate of the Architect, in form and substance reasonably satisfactory to the Secured Party, and stating, if such be the case, that (i) the Building has been completed substantially in accordance with the Plans and Specifications therefor, and the Leased Property is ready for occupancy, (ii) such Plans and Specifications comply in all material respects with all Applicable Laws in effect at such time, and (iii) to the best of the Architect's knowledge, the Leased Property, as so completed, complies in all material respects with all Applicable Laws in effect at such time (capitalized terms in this sentence having the meanings set forth in the Lease). If the Architect cannot deliver such certificate because the facts do not support the foregoing requested certification, the Architect agrees that it will deliver a modified certificate or other written notice to the Secured Party specifying the reason(s) the certificate cannot be given as requested.
6. Notices to the Architect hereunder shall be sent by courier or certified mail, return receipt requested, to the following:
7. In the event the Architect's Agreement is terminated, the Secured Party shall be entitled to use, as required for the Construction (as defined in the Lease), without any additional cost or fee, any and all Permits and all Plans and Specifications and final plans, drawings and specifications developed in connection therewith for the Construction.
The foregoing is furnished for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged by the undersigned, and the undersigned
D-1-2
understands and intends that Secured Party will rely on the foregoing and that the undersigned will be legally bound by the foregoing. This Consent and Acknowledgment shall inure to the benefit of the Secured Party and its successors and assigns. The Architect hereby acknowledges that the Secured Party will assign all of its rights hereunder to SunTrust Bank, as Agent for the benefit of the Lenders, and agrees that the Agent may exercise all rights of the Secured Party hereunder.
All capitalized terms used herein and not otherwise specifically defined shall have the meanings provided therefor in the Security Agreement and Assignment.
[NAME OF ARCHITECT]
D-1-3
Attach copy of Architect's Agreement
D-1-4
EXHIBIT F
TO MASTER AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
To: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Ladies and Gentlemen:
(the "Assignee") of % of (i) its Commitment and (ii) the
--------------- -------- ----
A Loans and B Loans of (the "Assignor") outstanding
-------------------- --------
|
[Add paragraph dealing with accrued interest and fees with respect to Loans assigned.]
The Assignee hereby acknowledges and confirms that it is an Eligible Assignee and that it has received a copy of each of the Operative Documents. The Assignee further confirms and agrees that in becoming a Lender and in making its Loans under the Loan Agreement, such actions have and will be made without recourse to, or representation or warranty by, the Agent, the Assignor or the Lessor.
Except as otherwise provided in the Master Agreement, effective as of the date of acceptance hereof by the Agent and the Lessee:
(i) shall be deemed automatically to have become a party to the Master Agreement and the Loan Agreement, have all the rights and obligations of a "Lender" under the Master Agreement, the Loan Agreement and the other Operative Documents as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and
(ii) agrees to be bound by the terms and conditions set forth in the Master Agreement, the Loan Agreement and the other Operative Documents that are applicable to a Lender, and makes the representations and warranties of a Lender therein, as if it were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under the Master Agreement, the Loan Agreement and the other Operative Documents to the extent of the interest assigned hereby as specified in the second paragraph hereof; provided, that the Assignor shall not be relieved of any such obligation arising prior to the date specified in the second paragraph hereof.
The Assignee hereby advises you of the following administrative details with respect to the assigned Loans and requests the Agent to acknowledge receipt of this document:
A. Address for Notices:
Institution Name:
Attention:
Telephone:
Facsimile:
B. Payment Instructions:
This Agreement may be executed by the Assignor and Assignee in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
Adjusted Commitment Percentage [ASSIGNOR]
------------------------------
% By:
------- ------------------------------
Title:
---------------------------
Commitment Percentage % [ASSIGNEE]
-----
By:
------------------------------
|
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc.,
its sole general partner
EXHIBIT H
TO MASTER AGREEMENT
FORM OF COMPLETION DATE CERTIFICATE
TO: Lessor, Agent and each Lender (as defined in the Master Agreement referred to below)
1. All amounts owing to third parties for the Construction have been paid in full (other than contingent obligations for which the Construction Agent has made adequate reserves), and no litigation or proceedings are pending, or to the best of the Construction Agent's knowledge, are threatened, against the Leased Property, the Construction Agent or the Lessee which could reasonably be expected to have a Material Adverse Effect.
2. All material consents, licenses and permits and other governmental authorizations or approvals required for the Construction and operation of the Leased Property have been obtained and are in full force and effect.
3. The Leased Property has available all services of public facilities and other utilities necessary for the use and operation of the Leased Property for its intended purposes, including, without limitation, adequate water, gas and electrical supply, storm and sanitary sewerage facilities, telephone, other required public utilities and means of access between the Building and public highways for pedestrians and motor vehicles.
4. All material agreements, easements and other rights, public or private, which are necessary to permit the lawful use and operation of the Leased Property as the Lessee intends to use the Leased Property under the Lease and which are necessary to permit the lawful intended use and operation of all then intended utilities, driveways, roads and other means of egress and ingress to and from the same have been obtained and are in full force and effect and neither the Construction Agent nor the Lessee has any knowledge of any pending modification or cancellation of any of the same, and the use of the Leased Property does not depend on any
variance, special exception or other municipal approval, permit or consent that has not been obtained and is in full force and effect for its continuing legal use.
6. To the best of the Construction Agent's knowledge, the Leased Property is in compliance in all material respects with all applicable zoning laws and regulations.
The Construction Agent has caused this Completion Date Certificate to be executed and delivered by its duly authorized officer this
, .
-------------- -----
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, Inc., its
sole general partner
By:
--------------------------------
Name Printed:
----------------------
Title:
-----------------------------
H-2
|
EXHIBIT I
TO MASTER AGREEMENT
PAYMENT DATE NOTICE
Atlantic Financial Group, Ltd.
2808 Fairmont, Suite 250
Dallas, Texas 75201
Attention: Stephen S. Brookshire
SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attention: Linda L. Dash
Ladies and Gentlemen:
Edward D. Jones & Co., L.P., as Construction Agent, hereby requests
that on :
-----------
1. $ of the presently outstanding Funded Amounts originally
-----------
made on , [and $ of the presently
------------ --- ----- -------------
outstanding Funded Amounts originally made on , ],
--------------- -----
|
2. and all presently being maintained as (1)[LIBOR Advances] [Base Rate Advances],
3. be [converted into] [continued as],
Edward D. Jones & Co., L.P., as Lessee, Guarantor and Construction Agent, hereby certifies and warrants that no Potential Event of Default or Event of Default has occurred and is continuing.
EDWARD D. JONES & CO., L.P.
By: EDJ Holding Company, its sole general
partner
EXHIBIT J
TO MASTER AGREEMENT
FORM OF COMPLIANCE CERTIFICATE
SEE ATTACHED
MASTER LEASE AGREEMENT
Dated as of September 18, 2001
between
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Missouri as Atlantic Financial Group, L.P.), as Lessor,
and
EDWARD D. JONES & CO., L.P.,
as Lessee
TABLE OF CONTENTS
(Lease Agreement)
Page
ARTICLE I DEFINITIONS................................................ 1
-----------
ARTICLE II LEASE OF LEASED PROPERTY.................................. 1
------------------------
Section 2.1 Restatement of Bridge Lease; Acceptance and Lease of
Property ................................................ 1
Section 2.2 Acceptance Procedure..................................... 2
ARTICLE III RENT .................................................... 2
----
Section 3.1 Basic Rent .............................................. 2
Section 3.2 Supplemental Rent........................................ 2
Section 3.3 Method of Payment........................................ 3
Section 3.4 Late Payment ............................................ 3
Section 3.5 Net Lease; No Setoff, Etc. .............................. 3
Section 3.6 Certain Taxes ........................................... 4
Section 3.7 Utility Charges ......................................... 5
ARTICLE IV WAIVERS .................................................. 5
-------
ARTICLE V LIENS; EASEMENTS; PARTIAL CONVEYANCES...................... 6
-------------------------------------
ARTICLE VI MAINTENANCE AND REPAIR; ALTERATIONS, MODIFICATIONS AND
------------------------------------------------------
ADDITIONS............................................... 7
---------
Section 6.1 Maintenance and Repair; Compliance With Law.............. 7
Section 6.2 Improvements and Alterations............................. 8
Section 6.3 Title to Alterations .................................... 9
Section 6.4 Lessee's Personal Property .............................. 10
ARTICLE VII USE...................................................... 11
---
ARTICLE VIII INSURANCE............................................... 11
---------
ARTICLE IX ASSIGNMENT AND SUBLEASING................................. 12
-------------------------
ARTICLE X LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE.................. 13
-----------------------------------------
Section 10.1 Event of Loss ......................................... 13
Section 10.2 Event of Taking........................................ 13
Section 10.3 Casualty............................................... 14
Section 10.4 Condemnation........................................... 14
Section 10.5 Verification of Restoration and Rebuilding............. 14
Section 10.6 Application of Payments................................ 15
Section 10.7 Prosecution of Awards.................................. 16
Section 10.8 Application of Certain Payments Not Relating to an
Event of Taking........................................ 16
Section 10.9 Other Dispositions .................................... 17
Section 10.10 No Rent Abatement...................................... 17
ARTICLE XI INTEREST CONVEYED TO LESSEE............................... 17
---------------------------
ARTICLE XII EVENTS OF DEFAULT ....................................... 17
-----------------
ARTICLE XIII ENFORCEMENT ............................................ 23
-----------
Section 13.1 Remedies................................................ 23
i
|
Section 13.2 Remedies Cumulative; No Waiver; Consents................ 25
Section 13.3 Purchase Upon an Event of Default....................... 26
ARTICLE XIV SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL..... 26
----------------------------------------------------
Section 14.1 Lessee's Option to Purchase............................ 26
Section 14.2 Conveyance to Lessee................................... 26
Section 14.3 Acceleration of Purchase Obligation ................... 27
Section 14.4 Determination of Purchase Price ....................... 27
Section 14.5 Purchase Procedure..................................... 27
Section 14.6 Option to Remarket..................................... 28
Section 14.7 Rejection of Sale ..................................... 30
Section 14.8 Return of Leased Property ............................. 30
Section 14.9 Renewal................................................ 31
Section 14.10 Environmental Report................................... 32
ARTICLE XV LESSEE'S EQUIPMENT........................................ 32
------------------
ARTICLE XVI RIGHT TO PERFORM FOR LESSEE ............................. 33
---------------------------
ARTICLE XVII MISCELLANEOUS........................................... 33
-------------
Section 17.1 Reports ............................................... 33
Section 17.2 Binding Effect; Successors and Assigns................. 33
Section 17.3 Quiet Enjoyment ....................................... 33
Section 17.4 Notices ............................................... 34
Section 17.5 Severability .......................................... 34
Section 17.6 Amendment; Complete Agreements......................... 34
Section 17.7 Construction........................................... 35
Section 17.8 Headings .............................................. 35
Section 17.9 Counterparts........................................... 35
Section 17.10 GOVERNING LAW.......................................... 35
Section 17.11 Reserved............................................... 35
Section 17.12 Liability of the Lessor Limited ....................... 35
Section 17.13 Estoppel Certificates ................................. 36
Section 17.14 No Joint Venture ...................................... 36
Section 17.15 No Accord and Satisfaction ............................ 36
Section 17.16 No Merger.............................................. 36
Section 17.17 Survival .............................................. 37
Section 17.18 Chattel Paper.......................................... 37
Section 17.19 Time of Essence........................................ 37
Section 17.20 Recordation of Lease .................................. 37
Section 17.21 Investment of Security Funds .......................... 37
Section 17.22 Bond Lease............................................. 38
Section 17.23 Land and Building...................................... 38
EXHIBIT A Lease Supplement
|
PRELIMINARY STATEMENT
A. Pursuant to the Bridge Lease, the Lessor acquired a leasehold interest in the Leased Property specified by the Construction Agent and is subleasing the same to the Lessee, subject to the Bond Lease.
B. Pursuant to this Lease, the Lessor and the Lessee desire to restate and amend the Bridge Lease, and the Lessor desires to sublease to the Lessee, and the Lessee desires to sublease from the Lessor, the Leased Property, as described in the Lease Supplement.
C. The Construction Agent will construct, or cause to be constructed, the Building on the Land, and the Building, as constructed, will become part of the property subject to the Bond Lease and will, likewise, become part of the property subject to the terms of this Lease.
In consideration of the mutual agreements herein contained and other good and valuable consideration, receipt of which is hereby acknowledged, the Lessor and the Lessee hereby agree as follows:
insofar as the same may lawfully be done, the Lessor shall be, except as specifically provided for herein, free from all expenses in any way related to the Leased Property and the use and occupancy thereof. The Lessee covenants to furnish the Lessor and the Agent, upon the Agent's written request, within thirty (30) days after the last date when any tax must be paid by the Lessee as provided in this Section 3.6, official receipts of the appropriate taxing, authority or other proof satisfactory to the Lessor, evidencing the payment thereof.
During the Lease Term, the Lessor's interest in the Leased Property, including the Building (whether or not completed) and the Land, is demised and let by the Lessor "AS IS" subject to (a) the terms and conditions of the Bond Lease and the Bond Deed of Trust, (b) the rights of any parties in possession thereof, (c) the state of the title thereto existing at the time the Lessor acquired its interest in the Leased Property, (d) any state of facts which an accurate survey or physical inspection might show (including the survey delivered on the Closing Date), (e) all Applicable Laws, and (f) any violations of Applicable Laws which may exist upon or subsequent to the commencement of the Lease Term. THE LESSEE ACKNOWLEDGES THAT, ALTHOUGH THE LESSOR WILL OWN AND HOLD LEASEHOLD TITLE TO THE LEASED PROPERTY, THE LESSOR IS NOT RESPONSIBLE FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE BUILDING OR ANY ALTERATIONS. NEITHER THE LESSOR, THE AGENT NOR ANY LENDER HAS MADE, OR SHALL BE DEEMED TO HAVE MADE, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, MERCHANTABILITY, TITLE, HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF THE LEASED PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR
The Lessee shall not directly or indirectly create, incur or assume, any Lien on or with respect to the Leased Property, the title thereto, or any interest therein, including any Liens which arise out of the possession, use, occupancy, construction, repair or rebuilding of the Leased Property or by reason of labor or materials furnished or claimed to have been furnished to the Lessee, or any of its contractors or agents or Alterations constructed by the Lessee, except, in all cases, Permitted Encumbrances.
Notwithstanding the foregoing paragraph, at the request of the
Lessee, and subject to the terms and conditions of the Bond Lease, the
Lessor shall, from time to time during the Lease Term and upon
reasonable advance written notice from the Lessee given in accordance
with Section 8.2 of the Master Agreement and receipt of the materials
specified in the next succeeding sentence, consent to and join in any
(i) grant of easements, licenses, rights of way and other rights in the
nature of easements, including, without limitation, utility easements to
facilitate the Lessee's use, development and construction of the Leased
Property, (ii) release or termination of easements, licenses, rights of
way or other rights in the nature of easements which are for the benefit
of the Land or the Building or any portion thereof, (iii) dedication or
transfer of portions of the Lessor's interest in the Land, not improved
with the Building, for road, highway or other public purposes, (iv)
execution of agreements for ingress and egress and amendments to any
covenants and restrictions affecting the Land or the Building or any
portion thereof and (v) request to any Governmental Authority for
platting or subdivision or replatting or resubdivision approval with
respect to the Land or any portion thereof or any parcel of land of
which the Land or any portion thereof forms a part or a request for
rezoning or any variance from
zoning or other governmental requirements. The Lessor's obligations pursuant to the preceding sentence shall be subject to the requirements that:
(a) any such action shall be at the sole cost and expense of the Lessee, and the Lessee shall pay all actual and reasonable out-of-pocket costs of the Lessor, the Agent and the Lenders in connection therewith (including, without limitation, the reasonable fees of attorneys, architects, engineers, planners, appraisers and other professionals reasonably retained by the Lessor, the Agent or any Lender in connection with any such action, and, when practicable, the Lessor will endeavor to utilize the services of the same architect(s), engineer(s), planner(s) and appraiser(s) used by the Agent and the Lenders, in connection with the review of such requests),
(b) the requesting Lessee shall have delivered to the Lessor and the Agent a certificate of a Responsible Officer of the Lessee stating that:
(i) such action will not cause the Leased Property, the Land or the Building or any portion thereof to fail to comply in any material respect with the provisions of this Lease or any other Operative Documents, or in any material respect with Applicable Laws; and
(ii) such action will not materially reduce the Fair Market Sales Value, utility or useful life of the Leased Property, the Land or the Building nor the Lessor's interest therein; and
(c) in the case of any release or conveyance, if the Lessor, the Agent or any Lender so reasonably requests, the Lessee will cause to be issued and delivered to the Lessor and the Agent by the Title Insurance Company an endorsement to the Title Policy pursuant to which the Title Insurance Company agrees that its liability for the payment of any loss or damage under the terms and provisions of the Title Policy will not be affected by reason of the fact that a portion of the real property referred to in Schedule A of the Title Policy has been released or conveyed by the Lessor.
Property in the condition required by the preceding clauses (a) and (b).
The Lessee shall perform the foregoing maintenance obligations
regardless of whether the Leased Property is occupied or unoccupied. The
Lessee waives any right that it may now have or hereafter acquire to (i)
require the Lessor, the Agent or any Lender to maintain, repair,
replace, alter, remove or rebuild all or any part of the Leased Property
or (ii) make repairs at the expense of the Lessor, the Agent or any
Lender pursuant to any Applicable Law or other agreements or otherwise.
NEITHER THE LESSOR (EXCEPT WITH RESPECT TO ANY LESSOR LIENS), THE AGENT
NOR ANY LENDER SHALL BE LIABLE TO THE LESSEE OR TO ANY CONTRACTORS,
SUBCONTRACTORS, LABORERS, MATERIALMEN, SUPPLIERS OR VENDORS FOR SERVICES
PERFORMED OR MATERIAL PROVIDED ON OR IN CONNECTION WITH THE LEASED
PROPERTY OR ANY PART THEREOF. Neither the Lessor, the Agent nor any
Lender shall be required to maintain, alter, repair, rebuild or replace
the Leased Property in any way.
(b) The making of any Alterations must be in compliance with the following requirements:
(i) No Structural Alterations or Alterations with a cost exceeding Two Hundred Fifty Thousand Dollars ($250,000) shall be made or undertaken without the prior written consent of the Lessor and the Agent (which consent shall not be unreasonably withheld or delayed), except for Alterations required by Applicable Laws (provided that except in the case of an emergency, the Lessee shall give the Lessor and the Agent at least thirty (30) days prior written notice of such Alterations). If the Lessee reasonably expects the cost of any Alterations to exceed $250,000, the Lessee shall deliver to the Lessor and the Agent a brief written narrative of the work to be performed prior to undertaking any such Alteration.
(ii) No Alterations shall be undertaken in violation of the terms of any restriction, easement, condition, covenant or other similar agreement (including, without limitation, the Bond Lease) affecting title to or binding on the Leased Property. The Lessee shall
procure when required and pay for, so far as the same may be required from time to time, all permits and authorizations with regard to such Alterations from all Governmental Authorities having jurisdiction. The Lessor, at the Lessee's expense, and without any liability on the part of the Lessor, shall join in the application for any such permit or authorization and execute and deliver any document in connection therewith, whenever such joinder is necessary or advisable.
(iii) The Alterations shall be completed in a good and workmanlike manner and in compliance with all Applicable Laws then in effect and the standards imposed by any insurance policies required to be maintained hereunder or by any vendor, supplier or manufacturer in order to maintain all warranties, and all Alterations must be located solely on the Land or other property used in connection with the Leased Property as to which the Lessor has an easement, license, lease, sublease or other right or interest in real property reasonably satisfactory to Agent for a term not less than the useful life of such Alterations.
(iv) All Alterations shall, when completed, be of such a character as to not adversely affect the Fair Market Sales Value, utility, remaining economic useful life or residual value of the Leased Property from the Fair Market Sales Value, utility, remaining economic useful life or residual value thereof immediately prior to the making thereof or, in the case of Alterations being made by virtue of a Casualty or Condemnation, immediately prior to the occurrence of such Casualty or Condemnation. If such Modifications have a cost exceeding Two Hundred Fifty Thousand Dollars ($250,000), the Lessor or the Agent may obtain a report from an independent engineer or engage an appraiser of nationally recognized standing, at the Lessee's sole cost and expense, to determine (by appraisal or other methods satisfactory to the Agent) the projected Fair Market Sales Value of such item of Leased Property as of the completion of the Alterations relating thereto.
(v) The Lessee shall have made adequate arrangements for payment of the cost of all Alterations when due so that the Leased Property shall at all times be free of Liens for labor and materials supplied or claimed to have been supplied to the Leased Property, other than Permitted Liens.
(a) Alterations that are in replacement of or in substitution for a portion of any item of Leased Property;
(c) Alterations that, notwithstanding any repairs, replacements or modifications by or on behalf of Lessee, are nonseverable or that cannot be removed without damaging the Leased Property or any part thereof.
The Lessee, at the Lessor's reasonable request, shall execute and deliver any deeds, bills of sale, assignments or other documents of conveyance reasonably necessary to evidence the vesting of title in and to such Alterations to the Issuer.
Subject to the terms and conditions of the Bond Lease, all Alterations to which the Lessee shall have title may be removed at any time by the Lessee, so long as removal thereof shall not result in the violation of any Applicable Laws or give rise to a Potential Event of Default or an Event of Default, and no Potential Event of Default or Event of Default then exists. The Lessee agrees to notify Lessor in writing at least 30 days before it removes any such Alterations which individually or in the aggregate had an original cost exceeding Two Hundred Fifty Thousand Dollars ($250,000), and the Lessee shall at its expense repair any damage to any item of Leased Property caused by the removal of such Alterations. The Lessor (or the purchaser of the Leased Property) may purchase from the Lessee any such Alterations (if not already owned by the Lessor) that the Lessee intends to remove from the Leased Property prior to the return of the Leased Property to the Lessor or sale of the Leased Property, which purchase shall be at the Fair Market Sales Value of such Alterations as determined by the Appraiser at the time of such purchase. Title to any such Alterations shall vest in the Lessor (or the purchaser of the applicable Leased Property) if not removed from the Leased Property by the Lessee prior to the return of the Leased Property to the Lessor or sale of the Leased Property. Severable Alterations, title to which is vested in the Lessee, shall be made available to the Lessor or its designee without cost during the Lease Term and thereafter if the Leased Property is sold pursuant to the Remarketing Option and the use thereof is necessary or useful for the operation of the Leased Property in the manner and capacity operated at or prior to the expiration of the Lease Term.
(a) At any time during which any part of the Building or any Alteration is under construction and as to any part of the Building or any Alteration under construction, the Lessee shall maintain, or cause to be maintained, at its sole cost and expense, as a part of its blanket policies or otherwise, "all risk" non-reporting completed value form of builder's risk insurance.
(b) During the Lease Term, the Lessee shall maintain, at its sole cost and expense, as a part of its blanket policies or otherwise, insurance against loss or damage to the Building by fire and other risks, including comprehensive boiler and machinery coverage, on terms and in amounts no less favorable than insurance covering other similar properties owned or leased by the Lessee and that are in accordance with prudent industry practice, but in no event less than the replacement cost of the Building from time to time.
shall be adjusted solely by, and all insurance proceeds shall be paid solely to, the Agent (or the Lessor if the Loans have been fully paid) for application pursuant to this Lease.
(h) During the Lease Term, the Lessee, on behalf of the Lessor, shall maintain, at the Lessee's sole cost and expense, any and all insurance coverages required pursuant to the Bond Documents, including, without limitation, the Bond Lease and the Bond Deed of Trust, and otherwise comply at the Lessee's sole cost and expense, with any provisions relating thereto in the Bond Documents, including, without limitation, the Bond Lease and the Bond Deed of Trust.
Except pursuant to an Operative Document, this Lease shall not be mortgaged or pledged by the Lessee, nor shall the Lessee mortgage or pledge any interest in the Leased Property or any portion thereof. Any such mortgage or pledge shall be void.
inspecting parties shall have any duty to make any such inspection or inquiry and none of the inspecting parties shall incur any liability or obligation by reason of making or not making any such inspection or inquiry.
limitation, satisfaction of conditions to release of such funds to the Lessee comparable to the conditions precedent to Advances under the Operative Documents); and
(b) Notwithstanding the foregoing, the Lessee may prosecute, and the Lessor shall have no interest in, any claim with respect to the Lessee's personal property and equipment not financed by or otherwise property of the Lessor, business interruption or similar award and the Lessee's relocation expenses.
Property shall, unless a Potential Event of Default or Event of Default has occurred, be paid to the Lessee.
The Lessee and the Lessor intend that this Lease be treated, for accounting purposes, as an operating lease. For all other purposes, the Lessee and the Lessor intend that the transaction represented by this Lease be treated as a financing transaction, and for such purposes, it is the intention of the parties hereto (i) that this Lease be treated as a mortgage, security deed or deed of trust (whichever is applicable in the jurisdiction in which the Leased Property is located) and security agreement, encumbering the Leased Property, and that the Lessee, as grantor, hereby grants to the Lessor, as mortgagee or beneficiary and secured party, or any successor thereto, a first and paramount Lien on the Leased Property in which the Lessee has an interest, (ii) that the Lessor shall have, as a result of such determination, all of the rights, powers and remedies of a mortgagee, deed of trust beneficiary or secured party available under Applicable Law to take possession of and sell (whether by foreclosure or otherwise) the Leased Property, (iii) that the effective date of such mortgage, security deed or deed of trust shall be the effective date of this Lease, or the Lease Supplement, if later, (iv) that the recording of this Lease or the Lease Supplement shall be deemed to be the recording of such mortgage, security deed or deed of trust, and (v) that the obligations secured by such mortgage, security deed or deed of trust shall include the Funded Amount and all Basic Rent and Supplemental Rent hereunder and all other obligations of and amounts due from the Lessee hereunder and under the Operative Documents.
Each of the following events shall constitute an Event of Default (whether any such event shall be voluntary or involuntary or come about or be effected by operation of law or pursuant to or in compliance with any judgment, decree or order of any court or any order, rule or regulation of any Governmental Authority):
(a) The Lessee shall fail to make any payment of Basic Rent when due; or
(c) The Lessee or JFC or any of their Subsidiaries fails to perform or observe any term, covenant or agreement contained in Section 5.1(p)(vii), (xi), (xii), (xv) or (xvi) or in Section 5.2 of the Master Agreement; or
(e) The Lessee, JFC or any of their Subsidiaries shall default in the due and punctual performance of or compliance with any covenant, condition or agreement to be performed or observed by it under any provision of Sections 5.1(g), (h), (j), (k) or (m), inclusive, of the Master Agreement or shall use the proceeds of the Fundings for a purpose other than as stated in Section 5.1(u) of the Master Agreement, and any such failure or use shall continue unremedied for five (5) days following the date on which such covenant, condition or agreement shall have been required to be performed or observed, or such use of proceeds shall have varied from that stated in Section 5.1(u) of the Master Agreement; or
(f) The Lessee, JFC or any of their Subsidiaries shall default
in the due and punctual performance of or compliance with any covenant,
condition or agreement to be performed or observed by it under any
provision of Sections 5.1(c)-(f), inclusive, 5.1(i) or 5.1(n) of the
Master Agreement and any such failure shall continue unremedied for ten
(10) days following the date on which such covenant, condition or
agreement shall have been required to be performed or observed; or
(g) The Lessee, JFC or any of their Subsidiaries shall default in the due and punctual performance of or compliance with any covenant, condition or agreement to be performed or observed by it under any other provision of this Lease or any of the other Operative Documents
and any such failure shall continue unremedied for thirty (30) days
after the earlier of (x) the date upon which any senior officer of the
Lessee or JFC knew or reasonably should have known of such default or
(y) the date on which such covenant, condition or agreement shall have
been required to be performed or observed; or
(h) Any representation or warranty of the Lessee or JFC made in any of the Operative Documents or in any certificate, document or financial or other statement or in connection with the Transaction or pursuant to the Operative Documents shall have been false or inaccurate in any material respect on the date as of which made or deemed made; or
(j) A default shall occur under the provisions of any preferred stock (or any agreement relating thereto) of any Subsidiary, and the effect of the same shall be (i) to require, or permit the holders thereof to require, the issuer thereof to redeem the same prior to any mandatory redemption date or (ii) to permit the holders thereof to elect any Person to the Board of Directors of such Subsidiary; or
(k) A final judgment or judgments for the payment of money in excess of $500,000 in the aggregate shall be rendered against the Lessee, JFC and any Subsidiary (or any one or more of such Persons) and shall remain in force undischarged and unstayed for a period of more than
the longer of (x) 60 days or (y) the shorter of (i) the period provided for requesting a stay of such judgment or (ii) the period provided for filing an appeal from such judgment, both as established for the jurisdiction in which such judgment was rendered and without regard for any extension or renewal periods applicable to either thereof; or
(m) (i) An ERISA Event shall occur with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Lessee, JFC or any ERISA Affiliate under Title IV of ERISA to such Pension Plan or Multiemployer Plan or to the PBGC in an aggregate amount for all such Pension Plans and Multiemployer Plans in excess of $500,000, less any outstanding amounts under clauses (ii) and (iii); (ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans and Multiemployer Plans at any time exceeds $500,000, less any outstanding amounts under clauses (i) and (iii) (determined, in respect of Multiemployer Plans, by reference to the Unfunded Pension Liability for which the Lessee, JFC or any ERISA Affiliate may be liable); or (iii) the Lessee, JFC or any ERISA Affiliate shall fail to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of $500,000, less any outstanding amounts under clauses (i) and (ii); or
(n) Intentionally Omitted.
(p) Any non-monetary judgment, order or decree is entered against the Lessee or any Subsidiary which does or would reasonably be expected to have a Material Adverse Effect, and there shall be any period of fifteen (15) consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect; or
(q) There occurs any Change of Control; or
(r) Any Governmental Authority or any Business Association revokes or fails to renew any material license, permit or franchise of the Lessee, JFC or any Subsidiary, or the Lessee, JFC or any Subsidiary for any reason loses any material license, permit or franchise, or the Lessee, JFC or any Subsidiary suffers the imposition of any restraining order, escrow, suspension or impound of funds in connection with any proceeding (judicial or administrative) with respect to any material license, permit or franchise which, in the case of any restraining order, escrow or impound of funds is not dismissed or released within thirty (30) days after filing or imposition; or
(s) The occurrence of a Construction Agency Event of Default; or
(t) There shall have been asserted against the Lessee or any of its Subsidiaries an environmental claim that, in the reasonable judgment of the Lenders, is reasonably likely to be determined adversely to the Lessee or any of its Subsidiaries, and the amount thereof (either individually or in the aggregate) is reasonably likely to have a Material Adverse Effect (insofar as such amount is payable by the Lessee or any of its Subsidiaries but after deducting any portion thereof that is reasonably expected to be paid by other creditworthy Persons jointly and severally liable therefor); or
(u) The Lessee, JFC or the Lessee's General Partner shall be terminated, dissolved or liquidated (as a matter of law or otherwise) or proceedings shall be commenced by any Person (including the Lessee, JFC or the Lessee's General Partner) seeking the termination, dissolution or liquidation of the Lessee, JFC or the Lessee's General Partner, as the case may be, and such proceedings are not dismissed within twenty (20) days after filing; or
(v) The Liens created by the Operative Documents shall at any time not constitute a valid and perfected Lien on the collateral intended to be covered thereby (to the extent perfection by filing, registration, recordation or possession is required herein or therein) in favor of the
Agent, free and clear of all other Liens (other than Permitted Liens), or, except for expiration in accordance with its terms, any of the Operative Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by the Lessee or any other obligor; or
(w) A court or other Governmental Authority or agency or Business Association having jurisdiction shall enter a decree or order approving or acknowledging as properly filed or commenced against the Lessee or any Subsidiary a petition or proceedings for liquidation pursuant to SIPA or otherwise, rehabilitation, readjustment or composition (or for any related or similar purpose) under any law (other than the Bankruptcy Code) relating to financially distressed debtors, their creditors or property, and any such decree or order shall remain in force undischarged and unstayed for a period of more than 30 days; or
(x) The Lessee, JFC or any of their Subsidiaries shall take corporate action for the purpose or with the effect of authorizing, acknowledging or confirming the taking or existence of any action or condition specified in paragraph (l) above; or
(y) The Lessee shall fail to file any report or information required pursuant to SIPA, or shall fail to pay when due all or any part of an assessment made upon the Lessee pursuant to SIPA, and such failure shall not have been cured, by the filing of such report or information or by the making of such payment, together with interest thereon, within five days after receipt by the Lessee, of written notice of such failure given by or on behalf of SIPC pursuant to Section 10(a) of SIPA; or
(z) The making of an application by SIPC for a decree adjudicating that customers of the Lessee are in need of protection under SIPA and the failure of the Lessee to obtain the dismissal of such application within 30 days;
(aa) Aggregate Indebtedness of the Lessee shall exceed 1500% of
its Net Capital or, if the Lessee has elected to operate under paragraph
(a)(1)(ii) of Rule 15c3-1, its Net Capital computed in accordance
therewith shall be less than 2% of its aggregate debit items computed in
accordance with Exhibit A to Rule 15c3-3 or (if registered as a futures
commission merchant) its net capital (as defined in the CEA or the
regulations then existing thereunder) shall be less than 4% of the funds
required to be segregated pursuant to the CEA and the regulations
thereunder and the foreign futures or foreign options secured amounts
(less the market value of commodity options purchased by option
customers on or subject to the rules of a contract market or a foreign
Board of Trade, each such deduction not to exceed the amount of funds in
the option customer's account and the foreign futures or foreign options
secured amounts), if greater (or, in either case, such greater or lesser
percentage as may be made applicable to the Lessee by the self-
regulatory or governmental agencies or bodies having appropriate
authority), throughout a period of not less than fifteen (15)
consecutive Business Days, commencing on the date the Lessee first
determines and notifies the Examining Authority or the Examining
Authority or the SEC first determines and notifies the Lessee of such
fact; or
(bb) The SEC or any State Securities Commission shall revoke the broker-dealer registration of the Lessee;
(cc) The Examining Authority or any Business Association shall suspend (and not reinstate within 10 days) or revoke the Lessee's membership as a member of such Examining Authority or any Business Association; or
(dd) The Lessee shall default in the due and punctual performance of or compliance with any covenant, condition or agreement to be performed or observed by the Lessee or the Lessor under the Bond Documents, and any such default shall continue unremedied beyond any applicable cure period provided for in the Bond Documents.
(a) The Lessor may, by notice to the Lessee, rescind or
terminate this Lease as of the date specified in such notice; however,
(i) no reletting, reentry or taking of possession of the Leased Property
by the Lessor will be construed as an election on the Lessor's part to
terminate this Lease unless a written notice of such intention is given
to the Lessee, (ii) notwithstanding any reletting, reentry or taking of
possession, the Lessor may at any time thereafter elect to terminate
this Lease for a continuing Event of Default, and (iii) no act or thing
done by the Lessor or any of its agents, representatives or employees
and no agreement accepting a surrender of the Leased Property shall be
valid unless the same be made in writing and executed by the Lessor;
taking or otherwise and, in addition to the Lessor's other damages, the Lessee shall be responsible for the actual and reasonable costs and expenses of reletting, including brokers' fees and the reasonable costs of any alterations or repairs made by the Lessor;
(f) The Lessor may exercise any other right or remedy that may be available to it under Applicable Law, or proceed by appropriate court action (legal or equitable) to enforce the terms hereof or to recover damages for the breach hereof. Separate suits may be brought to collect any such damages for any Rent Period(s), and such suits shall not in any manner prejudice the Lessor's right to collect any such damages for any subsequent Rent Period(s), or the Lessor may defer any such suit until after the expiration of the Lease Term, in which event such suit shall be deemed not to have accrued until the expiration of the Lease Term; or
(g) The Lessor may retain and apply against the Lessor's damages (but only to the extent thereof) all sums which the Lessor would, absent such Event of Default, be required to pay to, or turn over to, the Lessee pursuant to the terms of this Lease.
(b) [Reserved]
(a) If the Lessee shall purchase the Lessor's interest in the Leased Property pursuant to any provision of this Lease, (i) the Lessee shall accept from the Lessor, and the Lessor shall convey, its interest in the Leased Property by a duly executed and acknowledged assignment of the Bond Lease, in a form reasonably acceptable to the Lessor and the Lessee, (ii) upon the date fixed for any purchase of the Lessor's interest in the Leased Property hereunder, the Lessee shall pay to the order of the Agent (or the Lessor if the Loans have been paid in full) the Lease Balance, plus any amount due pursuant to Section 7.5 of the Master Agreement as a result of such purchase, by wire transfer of immediately available funds, and (iii) the Lessor will execute and deliver to the Lessee such other documents, including releases, affidavits, termination agreements and termination statements, as may be legally required or as may be reasonably requested by the Lessee in order to effect such conveyance, free and clear of Lessor Liens and the Liens of the Operative Documents.
(b) The Lessee shall, at the Lessee's sole cost and expense, obtain all required governmental and regulatory approvals and consents and, in connection therewith, shall make such filings as required by Applicable Law. In the event that the Lessor is required by Applicable Law to take any action in connection with such purchase and sale, the Lessee shall pay prior to transfer all costs incurred by the Lessor in connection therewith. Without limiting the foregoing, all costs incident to such conveyance, including, without limitation, the Lessee's attorneys' fees, the Lessor's attorneys' fees, commissions, the Lessee's and the Lessor's escrow fees, recording fees, title insurance premiums and all applicable documentary transfer or other transfer taxes and
other taxes required to be paid in order to record the transfer documents that might be imposed by reason of such conveyance and the delivery of such assignment of Bond Lease shall be borne entirely by and paid by the Lessee.
(c) Upon expiration or termination of this Lease resulting in conveyance of the Lessor's interest in the title to the Leased Property to the Lessee, there shall be no apportionment of rents (including, without limitation, water rents and sewer rents), taxes, insurance, utility charges or other charges payable with respect to the Leased Property, all of such rents, taxes, insurance, utility or other charges due and payable with respect to the Leased Property prior to termination being payable by the Lessee hereunder and all due after such time being payable by the Lessee as the then owner of the Leased Property.
(a) Not later than twelve (12) months prior to the Lease Termination Date, the Lessee shall give to the Lessor and the Agent written notice of the Lessee's exercise of the Remarketing Option.
(b) Not later than ten (10) Business Days prior to the Lease Termination Date, the Lessee shall deliver to the Lessor and the Agent an environmental assessment of the Leased Property leased by it dated not earlier than forty-five (45) days prior to the Lease Termination Date. Such environmental assessment shall be prepared by an environmental consultant selected by the Required Funding Parties, shall be in form, detail and substance reasonably satisfactory to the Required Funding Parties and shall otherwise indicate the environmental condition of the Leased Property to be the same as described in the Environmental Audit.
(c) On the date of the Lessee's notice to the Lessor and the Agent of the Lessee's exercise of the Remarketing Option, each of the Construction Conditions shall have been timely satisfied and no Event of Default or Potential Event of Default shall exist, and thereafter, no Event of Default or Potential Event of Default shall exist under this Lease.
the same shall be within the Lessee's control. If any use of the Leased Property has substantially changed the character of the Leased Property (without implying any consent to such use by the Lessor or the Agent), the Lessee shall, if requested by the Lessor or the Agent, restore the Leased Property to its general character as of the commencement of this Lease, except for normal wear and tear.
(e) The Lessee shall promptly provide any maintenance records relating to the Leased Property leased by it to the Lessor, the Agent and any potential purchaser upon request and shall otherwise do all things necessary to deliver possession of the Leased Property to the potential purchaser. The Lessee shall allow the Lessor, the Agent and any potential purchaser access to the Leased Property for the purpose of inspecting the same.
(h) In connection with any such sale of the Lessor's interest in the Leased Property, the Lessee shall pay directly, and not from the sale proceeds, all prorations, credits, costs and expenses of the sale of the Leased Property leased by it, whether incurred by the Lessor, any Lender, the Agent or the Lessee, including without limitation, the cost of all title insurance, surveys, environmental reports, appraisals, transfer taxes, the Lessor's and the Agent's attorneys' fees, the Lessee's attorneys' fees, commissions, escrow fees, recording fees and all applicable documentary and other transfer taxes.
If the Lessee has exercised the Remarketing Option, the following additional provisions shall apply: During the period commencing on the date twelve (12) months prior to the scheduled expiration of the Lease Term, the Lessee shall, as nonexclusive agent for the Lessor, use commercially reasonable efforts to sell the Lessor's interest in the Leased Property and will attempt to obtain the highest purchase price therefor. All such marketing of the Leased Property shall be at the Lessee's sole expense. Lessee promptly shall submit all bids to the Lessor and the
(a) Subject to the conditions set forth herein, the Lessee may by written notice to the Lessor and the Agent given not later than ninety (90) days prior to the Construction Term Expiration Date, request the renewal of this Lease for a renewal period equal to the Construction Term, but in no event in excess of twelve (12) months, commencing on the date following the Lease Termination Date. No later than the date that is forty-five (45) days after the date the request to renew has been delivered to each of the Lessor and the Agent, the Agent will notify the Lessee whether or not the Lessor's and the Lenders' consent (which consent, in the case of the Lessor and the Lenders, may be granted or denied in their sole discretion) to such renewal request (which renewal shall require the unanimous consent of the Lessor and the Lenders and may be conditioned on such conditions precedent as may be specified by the Lessor and the Lenders). If the Agent fails to respond within such timeframe, such failure shall be a rejection of such request. If the Agent notifies the Lessee of the Lessor's and the Lenders' consent to such renewal, such renewal shall be effective as of the Lease Termination Date.
(b) Subject to the conditions set forth herein and the terms and conditions of the Bond Lease, the Lessee may, by written notice to the Lessor and the Agent given not later than twelve (12) months and not earlier than sixteen (16) months prior to the then scheduled Lease Termination Date, request the renewal of this Lease, for five (5) years in the case of the first renewal term and up to five years in the case of the second renewal term, provided that in no event shall the term of this Lease exceed fifteen (15) years from the date of this Lease, in each case commencing on the date following such Lease Termination Date. No later than the date that is forty-five (45) days after the date the request to renew has been delivered to each of the Lessor and the Agent, the Agent will notify the Lessee whether or not the Lessor and the Lenders consent (such consent, in the case of the Lessor and the Lenders, may be granted or denied in their sole discretion) to such renewal request (which renewal shall require the unanimous consent of the Lessor and the Lenders, and may be conditioned on such conditions precedent as may be
If the Lessee shall fail to perform or comply with any of its agreements contained herein, the Lessor, upon ten (10) days' prior notice to the Lessee (except in the case of an emergency), may perform or comply with such agreement, and the Lessor shall not thereby be deemed to have waived any default caused by such failure, and the amount of such payment and the amount of the expenses of the Lessor (including actual and reasonable attorneys' fees and expenses) incurred in connection with such payment or the performance of or compliance with such agreement, as the case may be, shall be deemed Supplemental Rent, payable by the Lessee to the Lessor within ten (10) days after written demand therefor.
during the Lease Term, so long as no Potential Event of Default or Event of Default has occurred. Such right of quiet enjoyment is independent of, and shall not affect, the Lessor's rights otherwise to initiate legal action to enforce the obligations of the Lessee under this Lease.
If to the Lessor: Atlantic Financial Group, Ltd.
c/o Grogan & Brawner
2808 Fairmount, Suite 250
Dallas, Texas 75201
Attn: Stephen S. Brookshire
If to the Lessee: Edward D. Jones & Co., L.P.
12555 Manchester Road
St. Louis, Missouri 63131-3729
Attn: Kenneth E. Schutte
If to the Agent: SunTrust Bank
303 Peachtree Street, 3rd Floor
Mail Code 1928
Atlanta, Georgia 30308
Attn: Linda L. Dash
|
If to a Lender, to the address provided in the Master Agreement.
the other Operative Documents, is intended by the parties as a final expression of their agreement and as a complete and exclusive statement of the terms thereof, all negotiations, considerations and representations between the parties having been incorporated herein and therein. No course of prior dealings between the parties or their officers, employees, agents or Affiliates shall be relevant or admissible to supplement, explain or vary any of the terms of this Lease or any other Operative Document. Acceptance of, or acquiescence in, a course of performance rendered under this or any prior agreement between the parties or their Affiliates shall not be relevant or admissible to determine the meaning of any of the terms of this Lease or any other Operative Document. No representations, undertakings or agreements have been made or relied upon in the making of this Lease other than those specifically set forth in the Operative Documents.
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.
[Signature page follows]
IN WITNESS WHEREOF, the undersigned have each caused this Lease Agreement to be duly executed and delivered and attested by their respective officers thereunto duly authorized as of the day and year first above written.
EDWARD D. JONES & CO., L.P., a
Missouri limited partnership, as the Lessee
By: EDJ Holdings Company, Inc., a
Missouri corporation, its sole general
partner
By:__________________________________________ Name:________________________________________ Title:_______________________________________
ATLANTIC FINANCIAL GROUP, LTD.,
a Texas limited partnership (registered to do
business in Missouri as Atlantic Financial
Group, L.P.), as the Lessor
By: Atlantic Financial Managers, Inc., its
General Partner
By:____________________________________________ Name:__________________________________________ Title:_________________________________________
EXHIBIT A
This instrument prepared by and when recorded return to:
McGuireWoods LLP, One James Center, Richmond, Virginia 23219, Attention:
Edmund S. Pittman, Esquire
LEASE SUPPLEMENT, MEMORANDUM OF LEASE
AND FUTURE ADVANCE DEED OF TRUST AND SECURITY AGREEMENT
Dated as of September 18, 2001
among
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Missouri as Atlantic Financial Group, L.P.), as Lessor
EDWARD D. JONES & CO., L.P.,
as Lessee,
and
St. Louis County, Missouri
THIS INSTRUMENT IS INTENDED ALSO TO BE A FIXTURE FILING TO BE FILED IN THE REAL ESTATE RECORDS OF ST. LOUIS COUNTY, MISSOURI.
THIS FUTURE ADVANCE DEED OF TRUST AND SECURITY AGREEMENT SECURES FUTURE ADVANCES AND FUTURE OBLIGATIONS AND SHALL BE GOVERNED BY SECTION 443.055 RSMO, AS AMENDED. THE TOTAL PRINCIPAL AMOUNT OF THE PRESENT AND FUTURE OBLIGATIONS WHICH MAY BE SECURED HEREBY IS $24,000,000.
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS; INTERPRETATION............................... 2
SECTION 2. THE SUBJECT PROPERTY...................................... 2
SECTION 3. NATURE OF TRANSACTION; DEED OF TRUST ..................... 2
SECTION 4. RATIFICATION; INCORPORATION .............................. 10
SECTION 5. ORIGINAL LEASE SUPPLEMENT................................. 10
SECTION 6. GOVERNING LAW............................................. 10
SECTION 7. COUNTERPART EXECUTION..................................... 10
EXHIBITS:
---------
EXHIBIT A - Description of Land
EXHIBIT B - Schedule of Equipment
|
THIS FUTURE ADVANCE DEED OF TRUST AND SECURITY AGREEMENT SECURES FUTURE ADVANCES AND FUTURE OBLIGATIONS AND SHALL BE GOVERNED BY SECTION 443.055 RSMO, AS AMENDED. THE TOTAL PRINCIPAL AMOUNT OF THE PRESENT AND FUTURE OBLIGATIONS WHICH MAY BE SECURED HEREBY IS $24,000,000.
"Lessee") and , a , as trustee
------ ------------------------ --------------------
(the "Trustee"), having an address of , for
------- -----------------------------
the benefit of the Lessor.
|
RECITALS:
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
B. TO SECURE PAYMENT OF ALL AMOUNTS OWING BY THE GRANTOR UNDER THE LEASE AND THE OTHER OPERATIVE DOCUMENTS AND THE PAYMENT AND PERFORMANCE OF ALL OTHER OBLIGATIONS UNDER THE OPERATIVE DOCUMENTS, THE GRANTOR HEREBY CONVEYS TO THE TRUSTEE AND HEREBY BARGAINS, SELLS, CONVEYS, CONFIRMS, GRANTS, ASSIGNS, TRANSFERS, WARRANTS AND SETS OVER TO THE TRUSTEE, WITH POWER OF SALE, THE SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND PROCEEDS THEREOF (INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND OTHER LOSS PROCEEDS), WITH GENERAL WARRANTY OF TITLE, IN TRUST FOR THE USE AND BENEFIT OF THE LOAN PARTY, AND GRANTS THE LOAN PARTY A SECURITY INTEREST IN THE SUBJECT PROPERTY AND ALL RENTS, LEASES, ISSUES AND PROCEEDS THEREOF (INCLUDING AWARDS AND INSURANCE, CONDEMNATION AND OTHER LOSS PROCEEDS), TO HAVE AND TO HOLD the Subject Property and the rights and privileges hereby granted unto the Trustee, its successors and assigns for the uses and purposes set forth, until all amounts owed by and all other obligations to be paid or performed by the Grantor under the Lease and the other Operative Documents are indefeasibly paid and performed in full.
C. If an Event of Default has occurred and is continuing under the Lease, at the direction of the Loan Party:
(i) The Loan Party or its agents may enter and take possession of the Subject Property by actual physical possession or by written notice served personally upon or sent by registered or certified mail, postage prepaid, to the Grantor, and the Grantor shall surrender possession upon request and the Loan Party may take possession
without further authorization required, and may let the Subject Property and receive the rents, issues and profits thereof, make repairs and apply said rentals and profits, after payment of all necessary or proper charges and expenses, on account of the amounts hereby secured.
(ii) The Loan Party, shall, as a matter of contract right, at the option of the Loan Party, be entitled to the appointment of a receiver for the Subject Property, and the Grantor hereby consents to such appointment without the posting of a bond or undertaking without regard to the value of the Subject Property and waives notice of any application therefor.
(iii) The Trustee may proceed to sell the Subject Property at public auction, as a whole or in such parcels, for cash or credit and, in addition to the requirements imposed by state law, upon any terms as the Trustee deems appropriate. Before such sale at public auction is made, there shall first be such notice of default and such notice or advertisement of the time, place and terms of sale as required by Applicable Law. Such sale may be postponed for any reason, from time to time, to the extent permitted by Applicable Law. In the event the sale is postponed, the Trustee shall advertise or give notice of any subsequent sale in the same manner as the original advertisement or notice of sale provided for above or otherwise as may be permitted by Applicable Law. The Trustee shall execute and deliver to the purchaser its Trustee's deed conveying that portion of the Subject Property so sold, but without any covenant or warranty, express or implied. The recitals in the Trustee's deed of any matters or facts shall be conclusive proof of the truthfulness thereof. The Loan Party may become the purchaser of the Subject Property so sold, and no purchaser shall be required to see to the proper application of the purchase money. Unless otherwise required by Applicable Law, the Trustee shall apply the proceeds of sale as directed by the Loan Party. The Grantor agrees to surrender possession of the Subject Property so sold to the purchaser at the sale immediately after such sale.
D. The Grantor hereby waives the benefit of all appraisement, valuation, stay, extension, reinstatement and redemption laws (whether equitable or statutory) now or hereafter in force and all rights of marshaling in the event of any sale of the Subject Property or any interest therein.
E. The Trustee shall be entitled to enforce payment of the indebtedness and performance of the Lessee's obligations and to exercise all rights and powers under this instrument or under any of the other Operative Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the Lessee's obligations may now or hereafter be otherwise secured, whether by deed of trust, deed to secure debt, mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this instrument nor its enforcement, shall prejudice or in any manner affect the Trustee's right to realize upon or enforce any other security now or hereafter held by the Trustee, it being agreed that the Trustee shall be entitled to enforce this instrument and any other security now or hereafter held by the Trustee in such order and manner as the Trustee or the Loan Party may determine in its or their absolute discretion. No remedy herein conferred upon or reserved to the Trustee or the Loan Party is intended to
be exclusive of any other remedy herein or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Every power or remedy given by any of the Operative Documents to the Trustee or the Loan Party or to which they may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by the Loan Party. In no event shall the Trustee, in the exercise of the remedies provided in this instrument (including, without limitation, the appointment of a receiver and the entry of such receiver on to all or any part of the Subject Property), be deemed a "mortgagee in possession," and the Trustee shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.
G. All powers, authorizations and agencies contained in this Deed of Trust are coupled with an interest and are irrevocable until this instrument is terminated and the lien created hereby is released.
H. Pursuant to Section 9-402 of the UCC as in effect in the state in which the Subject Property is located, the Grantor authorizes the Trustee or the Loan Party to file financing statements with respect to the Subject Property with the signature of the Grantor in such form and in such filing offices as the Trustee or the Loan Party reasonably determines appropriate to perfect the security interests of the Trustee and the Loan Party under this Deed of Trust. A carbon, photographic or other reproduction of this Deed of Trust shall be sufficient as a financing statement for filing in any jurisdiction.
personal property constituting the Subject Property in accordance with the Trustee's rights, powers and remedies with respect to the real property (in which event the default provisions of the UCC shall not apply). If the Trustee, at the direction of the Loan Party, shall elect to proceed under the UCC, then five (5) days' notice of sale of the personal property shall be deemed reasonable notice and the reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by the Trustee or the Loan Party shall include, but not be limited to, attorneys' fees and legal expenses. At the Trustee's request, the Grantor shall assemble the personal property and make it available to the Trustee and the Loan Party at a place designated by the Trustee or the Loan Party which is reasonably convenient to both parties. The Grantor stipulates and agrees that a sale of the Personal Property in conjunction with the Subject Property is a commercially reasonable manner of disposing of the Personal Property. The Loan Party also may (x) require the Grantor to, and the Grantor hereby agrees that the Grantor will at the Grantor's expense and upon request of the Loan Party forthwith, assemble all or part of the Personal Property as directed by the Loan Party and make it available to the Loan Party at a place to be designated by the Loan Party which is reasonably convenient to the parties, and (y) sell the Personal Property or any part thereof in one or more parcels at public or private sale for cash or credit or for future delivery, and at such price or prices and upon such other terms as the Loan Party may deem commercially reasonable. The Loan Party shall not be obligated to make any sale of the Personal Property regardless of notice of sale having been given. The Loan Party may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.
The Grantor, the Trustee and the Loan Party further agree, to the extent permitted by law, that this instrument upon recording or registration in the real estate records of the proper office shall constitute a financing statement filed as a "fixture filing" within the meaning of Sections 9-313 and 9-402 of the UCC as in effect in the state in which the Subject Property is located.
The Grantor, upon request by the Trustee or the Loan Party from time to time, shall execute, acknowledge and deliver to the Trustee or the Loan Party one or more separate security agreements, in form satisfactory to the Trustee and the Loan Party, covering all or any part of the Subject Property and will further execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any financing statement, affidavit, continuation statement or certificate or other document as the Trustee or the Loan Party may request in order to perfect, preserve, maintain, continue or extend the security interest under and the priority of this instrument. The Grantor further agrees to pay to the Trustee and the Loan Party on demand all costs and expenses incurred by the Trustee or the Loan Party in connection with the preparation, execution, recording, filing and refiling of any such document and all reasonable costs and expenses of any record searches for financing statements the Trustee or the Loan Party shall reasonably require. If the Grantor shall fail to furnish any financing or continuation statement within ten (10) days after request by the Trustee or the Loan Party, then pursuant to the provisions of the UCC, the Grantor hereby authorizes the Trustee and the Loan Party, without the signature of the Grantor, to execute and file any
such financing and continuation statements. The filing of any financing or continuation statements in the records relating to personal property or chattels shall not be construed as in any way impairing the right of the Trustee to proceed against any personal property encumbered by this Deed of Trust as real property, as set forth above.
J. The Grantor acknowledges that in connection with the rights and responsibilities of the Trustee under this instrument with respect to any action taken by the Trustee or the exercise or non-exercise by the Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this instrument, as between the Grantor and the Loan Party, the Trustee shall be conclusively presumed to be acting as agent for the Loan Party with full and valid authority so to act or refrain from acting, and the Grantor shall be under no obligation, or entitlement, to make any inquiry respecting such authority.
K. Except as otherwise set forth herein, to the fullest extent permitted by law, the Grantor waives the benefit of all laws now existing or that may subsequently be enacted providing for (i) any appraisement before sale of any portion of the Subject Property, (ii) any extension of the time for the enforcement of the collection of the indebtedness or the creation or extension of a period of redemption from any sale made in collecting such debt and (iii) exemption of the Subject Property from attachment, levy or sale under execution or exemption from civil process. Except as otherwise set forth herein, to the full extent the Grantor may do so, the Grantor agrees that the Grantor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, exemption, extension, reinstatement or redemption, or requiring foreclosure of this instrument before exercising any other remedy granted hereunder, and the Grantor, for the Grantor and its successors and assigns, and for any and all Persons ever claiming any interest in the Subject Property, to the extent permitted by law, hereby waives and releases all rights of reinstatement, redemption, valuation, appraisement stay of execution, notice of election to mature or declare due the whole of the secured indebtedness and marshaling in the event of foreclosure of the liens hereby created.
L. If (a) the Subject Property shall consist of one or more parcels, whether or not contiguous and whether or not located in the same city or county, or (b) in addition to this instrument, the Trustee and the Loan Party shall now or hereafter hold one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the obligations secured hereby upon other property in the state in which the Subject Property is located (whether or not such property is owned by the Grantor or by others) or (c) both the circumstances described in clauses (a) and (b) shall be true, then to the fullest extent permitted by law, the Trustee and the Loan Party may, in their discretion, commence or consolidate in a single foreclosure action all foreclosure proceedings against all such collateral securing the Obligations (including the Subject Property), which action may be brought or consolidated in the courts of any county in which any of such collateral is located. The Grantor acknowledges that the right to maintain a consolidated foreclosure action is a specific inducement to the Loan Party to extend the Obligations, and the Grantor expressly and irrevocably waives any objections to the commencement or
M. Except as expressly provided in the Operative Documents, the Trustee and the Loan Party, with the express written consent of the Grantor, may at any time or from time to time renew or extend this instrument, or alter or modify the same in any way. The Trustee may waive any of the terms, covenants or conditions hereof in whole or in part and may release any portion of the Subject Property or any other security, and grant such extensions and indulgences in relation to the obligations secured hereby as the Loan
Party may determine without the consent of any other Person (including, without limitation, the Grantor) and without any obligation to give notice of any kind thereto and without in any manner affecting the priority of the lien hereof on any part of the Subject Property.
N. If Trustee shall be made a party to or shall intervene in any
action or proceeding, whether in court or before any governmental
agency, affecting the Subject Property or the title thereto or the
interest of Trustee under this instrument, including, without
limitation, any form of condemnation or eminent domain proceeding,
Trustee shall be reimbursed by the Grantor upon demand for all costs,
charges and reasonable attorneys' fees incurred by it in any such case.
All such sums shall be secured hereby, are due and payable within ten
(10) days after demand, and if not paid within ten (10) days after
demand, shall bear interest at the Overdue Rate set forth in the
Operative Documents.
The Trustee shall be under no duty to take any action hereunder except as expressly required, to perform any act which would involve it in expense or liability, or to institute or defend any suit in respect hereof, unless properly indemnified to its satisfaction. All reasonable expenses, charges, counsel fees and other disbursements incurred by Trustee from and after the occurrence of an Event of Default in and about the administration and execution of the trust created hereby, and the performance of its duties and powers hereunder shall be secured by this instrument prior to the indebtedness represented by the Lease and shall bear interest at the Overdue Rate set forth in the Operative Documents. The Loan Party, with or without cause, is hereby authorized and empowered to substitute and appoint, at any time and from time to time, by an instrument recorded wherever this instrument is recorded, a trustee in the place of any Trustee hereunder.
The Grantor agrees to indemnify, defend and hold the Trustee
harmless from and against any and all liability, loss, damage and
expense, including reasonable attorneys' fees, which it may incur by
reason of this instrument or by reason of any action taken by the
Trustee hereunder, and from and against any and all claims and demands
whatsoever which may be asserted against the Trustee by reason of any
alleged obligation or undertaking on its part to perform or discharge
any of the terms, covenants or conditions contained herein, unless
caused by the gross negligence or willful misconduct of the Trustee.
Should the Trustee incur any such liability, loss, damage or expense,
the amount thereof, together with interest thereon at the Overdue Rate
set forth in the Operative Documents, shall be secured by this
instrument and shall be payable by the Grantor to the Trustee within ten
(10) days after demand therefor.
O. Nothing in this instrument shall operate or be construed to obligate the Trustee or the Loan Party to perform any obligations of the Grantor contained in any lease of the Subject Property. This instrument shall not operate to place upon the Loan Party or the Trustee any responsibility for the operation, control, care, management or repair of the Subject Property prior to the Trustee or the Loan Party taking possession
thereof, and the execution of this Deed of Trust by the Grantor shall constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Subject Property prior to the Trustee or the Loan Party taking possession thereof is and shall be that of Grantor.
P. This instrument is given to secure not only existing indebtedness, but also future advances made pursuant to or as provided in the Operative Documents, whether such advances are obligatory or to be made at the option of the Loan Party, or otherwise, to the same extent as if such future advances were made on the date of execution of this instrument, although there may be no advance made at the time of execution hereof, and although there may be no indebtedness outstanding at the time any advance is made. To the fullest extent permitted by law, the lien of this instrument shall be valid as to all such indebtedness, including all revolving credit and future advances, from the time this instrument is recorded.
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT GRANTOR AND LOAN PARTY FROM MISUNDERSTANDING OR DISAPPOINTMENT,
ANY AGREEMENTS GRANTOR AND LOAN PARTY REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT BETWEEN GRANTOR AND LOAN PARTY, EXCEPT AS GRANTOR AND LOAN PARTY MAY LATER AGREE IN WRITING TO MODIFY IT.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease Supplement to be duly executed by an officer thereunto duly authorized as of the date and year first above written.
ATLANTIC FINANCIAL GROUP, LTD.
(registered to do business in Missouri as Atlantic
Financial Group, L.P.), as the Lessor
By: Atlantic Financial Managers, Inc.,
its General Partner
By:__________________________________
Name:________________________________
Title: ______________________________
EDWARD D. JONES & CO., L.P., as the Lessee
By: EDJ Holding Company, Inc., a Missouri
corporation, its sole general partner
By:_______________________________
Name:_____________________________
Title:____________________________
LEASE SUPPLEMENT
STATE OF TEXAS )
) ss.
COUNTY OF )
|
On this _____ day of September, 2001, before me, _______________, a Notary Public in and for said County and State, personally appeared __________________, to me personally known, who being by me duly sworn, did say that (s)he is the ___________________ of Atlantic Financial Managers, Inc., a Texas corporation, and the general partner of Atlantic Financial Group, Ltd., a Texas limited partnership, and that the foregoing instrument was signed on behalf of said corporation by authority of its Board of Directors, and said _____________________ acknowledged said instrument to be the free act and deed of said corporation as general partner of Atlantic Financial Group, Ltd.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
My Commission Expires:______________
(notary seal)
STATE OF MISSOURI )
) ss.
COUNTY OF )
On this ____ day of September, 2001, before me ____________________, a Notary Public in and for said County and State, personally appeared __________________, to me personally known, who being by me duly sworn, did say that (s)he is the ______________________ of EDJ Holding Company, Inc., a Missouri corporation, and the general partner of Edward D. Jones & Co., L.P., a Missouri limited partnership, and that the foregoing instrument was signed on behalf of said corporation by authority of its Board of Directors, and said __________________ acknowledged said instrument to be the free act and deed of said corporation as general partner of Edward D. Jones & Co., L.P.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
My Commission Expires:______________
(notary seal)
Receipt of this original counterpart of the foregoing Lease Supplement is hereby acknowledged as of the date hereof.
SUNTRUST BANK, as the Agent
By:______________________________
Name:____________________________
Title:___________________________
STATE OF GEORGIA )
)
COUNTY OF ____________ )
On this _____ day of September, 2001, before me, _________________, a Notary Public in and for said County and State, personally appeared _____________________, to me personally known, who being by me duly sworn, did say that (s)he is the ____________________ of SunTrust Bank, a Georgia banking corporation, and that the foregoing instrument was signed on behalf of said corporation by authority of its Board of Directors, and said ____________________ acknowledged said instrument to be the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my notarial seal the day and year last above written.
My Commission Expires: _________________
(notary seal)
LEASE SUPPLEMENT
EXHIBIT A
[TO BE ADDED]
LEASE SUPPLEMENT
EXHIBIT B
[TO BE ADDED]
LEASE SUPPLEMENT
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our reports included in this Form 10-K, into The Jones Financial Companies, L.L.L.P.'s previously filed Form S-2 Registration Statement File No. 33-61049 and Form S-8 Registration Statements File No. 333-48233, No. 333-36258, 333-55729, No. 33-35247 and No. 33-62734.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
March 19, 2002