HomeMy WebLinkAboutDDA SPLOST VI AGREEMENT BETWEEN AUGUSTA, GEORGIA AND DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA STATE OF GEORGIA)
RICHMOND COUNTY)
SPLOST VI OUTSIDE AGENCY AGREEMEN This AGREEMENT made and entered into this I/ day of do)
, 2017, between
Augusta,Georgia,a political subdivision of the State of Georgia(hereinafter referred to as"Augusta"), and
the Downtown Development Authority of Augusta-Richmond County, a public body corporate and politic
of the State of Georgia(hereinafter referred to as the"Authority").
WITNESSETH
WHEREAS, the voters of Augusta, Georgia on June 16th 2009, approved the imposition of the
Special Purpose County One Percent Sales and Use Tax ("SPLOST VI") and designated the use of the
proceeds of said tax for certain capital outlay projects, as defined on O.C.G.A. 48-8-111(a) and further
approved a project priority payment order in an Intergovernmental Agreement entered into by and between
Augusta,Georgia, and the municipalities of Hephzibah and Blythe; and
WHEREAS, the Augusta Commission approved SPLOST funding for certain recreational,
historical and cultural improvement capital outlay projects to be implemented through various outside
agencies as provided in guidelines adopted on February 19th 2009; and
WHEREAS, Augusta has determined that the project described on Exhibit A hereof (the
"Project") is beneficial to the citizens of Augusta as it provides and enhances recreational,historical and/or
cultural resources in Augusta; and
WHEREAS, Augusta has determined that it is more cost effective, avoids duplication of services
and is in the best interest of Augusta and the citizens of Augusta to contract with the Authority to undertake
the Project,rather than Augusta directly constructing and operating the Project; and
WHEREAS, Augusta desires to contract with the above named Authority to construct and operate
the Project,which was a part of the approved capital outlay projects;and
WHEREAS, the sum of$5,142,856.00 from the proceeds of said tax(the "SPLOST Funds")has
been allocated for the Project and Augusta has agreed to advance the SPLOST Funds to the Authority to
allow for the Project to begin upon the satisfaction of the conditions provided below.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements between
the parties, it is agreed as follows:
SECTION 1 -APPROPRIATION AND USE OF FUNDS
1.1 Augusta agrees to appropriate the SPLOST Funds to be used by the Authority on behalf of
Augusta for the purpose of completing the Project as provided in Exhibit A hereto attached and
incorporated herein.
1.2 The Authority agrees to use such funds that it may receive,pursuant to this Agreement, solely and
exclusively for the completion of the above described Project; said Project, including the Project Budget, is
more specifically described in Exhibit A.
1.3 Said disbursement of the SPLOST Funds to the Authority is an authorized use of proceeds of
SPLOST VI, under O.C.G.A. Section 48-8-111(a)(1)(E), as said use benefits a "cultural facility, a
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recreational facility, or historical facility or a facility for some combination of such purposes" (referred to
as the "Public Purposes"), and this Agreement is entered into on behalf of and for the benefit of Augusta
and the Authority and also as an acknowledgement that upon distribution of the SPLOST Funds by
Augusta to the Authority, that Augusta will have fully met its SPLOST VI project obligation to the
Authority.
SECTION 2-RESPONSIBILITIES AND OBLIGATIONS OF AUTHORITY
In consideration of the disbursement of the SPLOST Funds, the Authority shall observe all conditions that
the law and/or this Agreement imposes on the use of said SPLOST Funds, including:
2.1 The Authority shall use said SPLOST Funds only in connection with the capital outlay for the
Project as described in Exhibit A hereof.
2.2 The Authority covenants not to use any of said SPLOST Funds for any part of its maintenance and
operation budget,now or in the future.
2.3 The Authority will set up any and all banking accounts necessary or convenient to segregate the
account containing SPLOST Funds from its other accounts. The Authority shall keep any SPLOST Funds
that it receives from Augusta in a separate account fund and shall not commingle SPLOST Funds with
other funds of the Authority prior to their expenditure.
2.4 The Authority shall maintain a record of each and every expense, in compliance with the generally
accepted accounting principles, for which the SPLOST Funds are used. The Authority shall submit
quarterly or more frequent accounting reports to Augusta for all SPLOST Funds that the Authority receives
from Augusta. Said accounting reports shall set forth the amounts expended on the Project during the term
of this Agreement, which, shall include any amount expended on such Project in that current year, and the
estimated percentage of the completion of the Project. It is understood and agreed that the Authority may
satisfy its recordkeeping and reporting requirements by directing the SOA to provide such information
directly to Augusta, and the Authority may rely upon the accuracy of the information provided by SOA.
The initial report of expenditures regarding the Project shall be made within 10 business days of the first
installment of the SPLOST Funds being made available to the Authority and at least quarterly thereafter
(commencing at the end of the third month following the initial installment of SPLOST Funds being paid to
the Authority) until the end of the quarter in which the Project is deemed completed as determined by the
Augusta Finance Department. Quarterly reports are due within ten (10)business days following the end of
each said quarter and shall be delivered to Augusta Finance Department, 535 Telfair St Street, Augusta
Georgia 30901 to the attention of Mr. Tim Schroer, Deputy Finance Director; provided, however, in the
event any such report is not delivered as and when due,the Augusta Finance Department shall not suspend
disbursement of SPLOST Funds until it notifies the Authority, SOA (as hereinafter defined) and the
Registered Mortgagee (as hereinafter defined) in writing that such report was not submitted, and the
Authority, SOA and the Registered Mortgagee shall have ten(10)days after receipt of such notice to cause
such reports to be submitted (the failure to submit a report shall not be a ground for terminating this
Agreement, however, Augusta shall have no obligation to disburse any installment of SPLOST Funds until
such reports are received). The SPLOST Funds will be disbursed by Augusta to the Authority within
fourteen (14) days of the approval of each such report(which approval will not be unreasonably withheld,
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conditioned or delayed) in the amount of the invoices submitted for such report and the Authority shall
disburse such funds to SOA (or its affiliate, MT Augusta Property LLC or Miller Theater, LLC) or the
Registered Mortgagee(as hereinafter defined)within five(5)days of receipt of such SPLOST Funds by the
Authority.
2.5 The Authority accepts the following conditions for disbursement of said funds:
A. Unless otherwise agreed by Augusta, no funds shall be made available to the Authority until such
time as the tax has been collected as provided in the disbursement schedule adopted in the
Intergovernmental Agreement.
B. Augusta Symphony, Inc., also known as "Symphony Orchestra Augusta" (herein referred to as
"SOA"),has raised an amount equal to a minimum of twenty five(25%)percent of the SPLOST Funds(the
"Matching Funds")and has otherwise raised or otherwise obtained any remaining funds(which may be in
the form of a loan from a financial institution) necessary to complete the Project on or before April 1,
2018. Only cash or cash equivalents raised subsequent to June 16, 2009 shall qualify as Matching Funds.
Pledges(prior to being collected)and in-kind donations or other in-kind contributions(other than donations
and contributions of cash,cash equivalents, stocks or bonds)will not qualify as Matching Funds.
C. Upon Augusta executing an acknowledgement that the minimum amount of Matching Funds has
been raised by SOA, which acknowledgment will not be unreasonably withheld, conditioned or delayed,
the Authority shall be deemed to have authorized SOA to expend the Matching Funds on the Project,
provided that the same record keeping requirements as provided in 2.4 are kept for expenditures of
Matching Funds.
D. Prior to receipt of the SPLOST Funds or the above-authorization for the expenditure of Matching
Funds, the Authority shall cause SOA to furnish Augusta with a copy of SOA's current audited financial
statements(and annually thereafter until the Project is completed),budget, scope of work and the projected
time for completion of the work on the Project, which must be approved by Augusta prior to disbursing
SPLOST Funds with respect to the Project. In addition, the Authority and SOA must provide Augusta
with a W-9, E-verify number, and SAVE Program verification prior to SPLOST Funds being distributed to
Authority.
E. With respect to the SPLOST Funds, the Authority or SOA have followed a competitive bid process
consistent with purchasing policies of Augusta. The Project has been effectively bonded through a
sub-guard policy covering sub-contractors on the Project or through a performance bond on one or more
subcontractors. Payments of SPLOST Funds to any contractor or sub-contractor employed on the Project
by the Authority or SOA or its subsidiary or affiliate shall be made subject to Augusta's audit and approval,
which audit and approval will not be unreasonably conditioned, withheld or delayed. Payments by the
Authority or SOA or its subsidiary or affiliate to any contractor or sub-contractors shall be made only upon
presentation of invoices verified (or approved) by the architect, and if at such time as the Project is
completed, and provided such completion (meaning the Project is completed such that the same has been
approved by the applicable governmental authorities for occupancy and use)occurs prior to April 1, 2018,
any SPLOST Funds remaining to be disbursed shall be disbursed to the Authority to be disbursed to the
Registered Mortgagee (as hereinafter defined) for application to the debt of MT Augusta Property LLC to
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such Registered Mortgagee (as hereinafter defined) in connection with the Project, and if such debt is paid
in full, to the Operating Tenant under the Lease (as hereinafter defined). For purposes hereof, the
"Registered Mortgagee" is the Registered Leasehold Mortgagee (as defined in the Lease (as hereinafter
defined)).
F. The Authority hereby acknowledges and agrees that as the Project is to benefit the citizens of
Augusta by providing and enhancing the recreational, historical and/or cultural resources in Augusta, the
use of the Project must be open and available for public use, such as symphonic performances by
Symphony Orchestra Augusta. The Authority (or an entity wholly-owned by the Authority) shall enter
into a lease with Miller Theater,LLC(a wholly owned subsidiary of SOA)with a minimum term of twenty
five (25)years (such 25 year period(regardless of whether such lease has a longer term)being referred to
as the "Servitude") in substantially similar form as the lease attached hereto as Exhibit B hereof (the
"Lease"),but with such modifications thereof and amendments thereto as are approved by the Chairman or
Vice Chairman of the Authority, such approval to be evidenced by the execution of the Lease on behalf of
the Authority by its Chairman or Vice Chairman, provided that such modifications or amendments do not
materially change the Project or the"Public Use Requirement"as defined in the Lease.
G. Should SOA (or its affiliate, MT Augusta Property LLC) during the construction of the Project or
subsequently thereto obtain financing and all or a portion of the Project is pledged or is to be pledged as
collateral for such loan, any such lender shall be required to provide to the Authority a "non-disturbance"
agreement for at least the period of the Servitude (or if sooner, until the termination of the Authority's
interest under the Lease) in form satisfactory to the Authority's attorney, providing in part,that the interest
of the Authority in the Lease shall not be terminable by such lender except(i) with the written consent of
the Authority, or (ii) upon the termination or expiration of the DDA Lease (as defined in the Lease)
pursuant to the terms of the Lease, or(iii) upon the payment of the SPLOST Repayment Amount, or (iv)
taking of a material portion of the Project through condemnation or eminent domain, or(v)the bankruptcy
of the Authority or the Operating Tenant(as defined in the Lease), or(vi) in connection with a New Lease
(as defined in the Lease), or(vii)the failure of Augusta and/or the Authority to disburse SPLOST Funds as
and when required under this Agreement or (viii) the amendment or modification of this Agreement
without the prior written consent of the landlord under the Lease,the Operating Tenant under the Lease and
the Fee Mortgagee(as defined in the Lease).
H. In the event that SOA (or any of its affiliates or successors in interest) or the Authority desires to
change the use of the Project prior to the expiration of the Servitude such that the use of the Project would
not satisfy the Public Use Requirement in the Lease (following any applicable cure periods), or sells,
disposes of or transfers title or ownership of the Project prior to the expiration of the Servitude, and
following such sale, disposal or transfer, the use of the Project would not satisfy the Public Use
Requirement in the Lease (following any applicable cure periods), then in such event the Authority and/or
SOA shall reimburse Augusta, Georgia an amount equal to the fraction determined by the number of years
remaining on the Servitude as the numerator and the total number of years of the Servitude as the
denominator multiplied by $5,142,856.00 (or such lesser amount of SPLOST Funds actually disbursed
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and used in connection with the Project) (such reimbursement amount is herein called the "SPLOST
Repayment Amount").
I. Notwithstanding anything herein to the contrary, if SOA (and/or its affiliates) complies with the
conditions hereof for the disbursements of the SPLOST Funds, and the Authority and/or Augusta fails to
disburse SPLOST Funds as and when contemplated herein, then SOA (and/or its affiliates) shall have no
obligation to pay the SPLOST Repayment Amount and shall have no obligation to use the Project for, inter
alia, Public Uses, and the leasehold estate of the Authority under the Lease and any non-disturbance and/or
other rights afforded Augusta and/or the Authority hereunder and/or under the Lease shall be null and void,
and SOA (and/or its affiliates and/or any Registered Mortgagee) may pursue any rights and/or remedies
available to it under applicable law.
2.6 The Authority and/or SOA and/or the Operating Tenant (as defined in the Lease) will maintain
the following insurance during the performance of this Agreement:
A. Comprehensive General Liability Insurance shall be maintained in force at all times and shall include
the following coverage: Commercial Liability Insurance in the combined single limits of$1,000,000. This
coverage shall be intended to apply as primary and shall not be affected by any insurance that Augusta may
carry in its own name. The Authority and/or SOA shall maintain Workers Compensation and Employer's
Liability Insurance for the benefit of its workers related to the Project. The above requirements shall also
apply to the Authority's contractors and subcontractors who are engaged in the Project.
B. Prior to, or simultaneously with the execution of, the Lease, the Authority will provide Augusta with
a certificate of insurance, which evidences the above coverage and names Augusta, Georgia as an
"additional insured"with respect to liability insurance.
SECTION 3 -RESPONSIBILITIES AND OBLIGATIONS OF AUGUSTA
3.1 Augusta enters this Agreement to improve the quality of life of its citizens and to provide its
citizens with additional facilities for delivery of recreational, historical and/or cultural services in a more
cost effective manner than it could if it were to construct and operate similar facilities without the
participation of the Authority.
3.2 Augusta and any auditors employed by Augusta shall have the right to verify and audit the
expenditures of the Authority and the Project, sufficient to determine that the SPLOST Funds are being
appropriately spent for the Project,in accordance with Georgia laws that govern the expenditures of Special
Purpose Local Option Sales Tax monies. Official representatives of Augusta may inspect the official
records of the Authority, which relate to this Project, at reasonable times and upon reasonable notice to the
Authority. Augusta shall also have the right to inspect the Project at any reasonable time for any purpose
related to the performance of any contract awarded, or to be bid upon or awarded,by the Authority for this
Project.
SECTION 4-OBLIGATIONS OF THE AUTHORITY AND COUNTY
4.1 Each of the parties hereto warrants and represents to the other that it will comply with all the
requirements of the laws of the State of Georgia.
4.2 After approval of this Agreement, all contracts between the Authority or SOA and any
subcontractor shall be submitted to Augusta Administrator for administrative review. If any irregularity or
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illegality appears, the Administrator may submit any such questions to the Augusta Richmond County
Commission.
4.3 This Agreement, including the Exhibits, constitutes the entire agreement between the parties as to
the matters described herein and may not be amended except by a written instrument, signed by each
party's duly authorized officers. It is understood and agreed that (i) this Agreement represents only a
portion of the funds required for the Project as described in Exhibit A, (ii) the terms of the Lease contain
more definitive terms as to the Project, (iii)the terms of the Lease shall be controlling as to the Authority's
obligations, responsibilities and liabilities for the operation of the Project, (iv) performance by SOA or
Augusta of any obligation of the Authority shall be acceptable, and (v) the terms of the Lease attached as
Exhibit B are hereby approved.
4.4 Breach of contract with respect to any of the terms of this Agreement, or with respect to the use of
funds, shall terminate Augusta's obligations under this Agreement; shall terminate Augusta's obligation for
the payment of any future funds; and shall entitle the Parties to all remedies provided by law. Provided,
however, prior to any such termination, the Authority and SOA and each Registered Mortgagee shall be
given written notice of such breach and at least sixty(60)days following receipt of such notice to cure any
such breach, or if such breach cannot be cured within such sixty (60) days period, as long as such cure is
being diligently pursued, such cure period shall be extended for a reasonable period to allow for such cure
(provided, however, nothing herein obligates SOA or any Registered Mortgagee to cure any such breach)
and Augusta will accept any cure by SOA and/or Registered Mortgagee as a cure by the Authority.
IN WITNESS WHEREOF, Augusta and Authority have caused these presents to be executed by
their respective,duly authorized officials,on the date entered above.
AUGUSTA,GEORGIA Adoll
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EXHIBIT A
PROJECT
A facility designed for use as a performing arts center substantially in accordance with Rehabilitation Plan
as defined in the Lease,with the costs related to the Project as described in the Rehabilitation Plan being
the"Project Budget".
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Exhibit B
Lease
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LEASE
between
MILLER THEATER, LLC, as Landlord
DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA, GEORGIA, as Tenant
and
MT AUGUSTA PROPERTY, LLC, as Subtenant
Dated as of , 2017
LEASE
THIS LEASE (together with Exhibits hereto, which are incorporated herein by this
reference, and the DDA Lease (as hereinafter defined) and Sublease (as hereinafter defined)
which are included herein, and all amendments and extensions hereof, collectively, "this Lease")
is made on the day of , 2017, by and among MILLER THEATER, LLC, a
Georgia limited liability company, having an address at 1301 Greene St., Suite 200 in Augusta,
Georgia ("Landlord"), DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA,
GEORGIA, having an address at in Augusta, Georgia ("DDA") and
MT AUGUSTA PROPERTY LLC, a Georgia limited liability company, having an address at
1301 Greene St., Suite 200 in Augusta, Georgia ("Operating Tenant"). This Lease amends and
restates the Lease between Landlord and Operating Tenant dated as of February 28, 2016,
effective July 25, 2015, related to the Land (as hereinafter defined) (said Lease being herein
referred to as the "Original Lease"), to reflect the interest of the DDA in this Lease.
RECITALS
WHEREAS, Landlord is the owner in fee simple title of certain Land (as defined herein),
which it has agreed to lease under the terms and conditions hereof to Operating Tenant for
Operating Tenant's development, rehabilitation and construction upon the Land of a historic
building ("Project");
WHEREAS, Operating Tenant has been in possession of the Land under the Original
Lease and has been conducting rehabilitation and construction activities substantially consistent
with that certain Standard Form of Agreement Between Owner and Architect on AIA Document
B101-2017 by and among Miller Theater, LLC and Lord, Aeck & Sargent, Inc. ("Architect"),
dated June 5, 2012 (the "Architect Agreement"), which Architect Agreement has been assigned
by Miller Theater, LLC to MT Augusta Property LLC (the "Rehabilitation Plan");
WHEREAS, DDA is entitled to receive the sum of$5,142,856.00 from the proceeds of a
the Special Purpose County One Percent Sales and Use Tax (the "SPLOST Funds") under that
certain SPLOST VI Outside Agency Agreement (the "SPLOST Agreement") dated the
day of , 2017, with Augusta, Georgia, a political subdivision of the State of Georgia
(hereinafter referred to as "Augusta");
WHEREAS, DDA desires to invest the SPLOST Funds in the Project in order to acquire
a 49-year leasehold interest as tenant in the Project, and desires to sublease its leasehold interest
to Operating Tenant to allow Operating Tenant to complete the Rehabilitation Plan, to use the
SPLOST Funds and to use and occupy the Project under the terms of this Lease;
NOW THEREFORE, IN CONSIDERATION of the covenants and agreements of the
parties hereto, as are hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged by each party hereto, Landlord hereby
leases to DDA and DDA hereby subleases to Operating Tenant all of that tract of land (the
"Land"), in Augusta-Richmond County, Georgia, which is more particularly described in
Exhibit A attached hereto,
TOGETHER WITH any and all rights, alleys, ways, waters, privileges, roads,
appurtenances, easements and advantages, to the same belonging or in any way appertaining,
including the existing and future Improvements on or under the Land (all of which, together with
the Land, are hereinafter referred to collectively as the "Premises"),
TO HAVE AND TO HOLD the Premises unto Operating Tenant, its successors and
permitted assigns, for and during the Term set forth herein,
ON THE TERMS AND SUBJECT TO THE CONDITIONS which are hereinafter set
forth:
Section 1. DEFINITIONS.
1.1. Specific. As used herein, the following terms have the following meanings:
"Annual Rent" has the meaning given it in subsection 3.1.
"Annual Subrent" has the meaning given it in subsection 3.1.
"Augusta"has the meaning given it in the Recitals.
"Bankruptcy" shall be deemed, for any person, to have occurred either
(a) if and when such person (i) applies for or consents to the appointment of a
receiver, trustee or liquidator of such person or of all or a substantial part of its assets, (ii) files a
voluntary petition in bankruptcy or admits in writing its inability to pay its debts as they come
due, (iii) makes an assignment for the benefit of its creditors, (iv) files a petition or an answer
seeking a reorganization or an arrangement with its creditors or seeks to take advantage of any
insolvency law, or(v) files an answer admitting the material allegations of a petition filed against
such person in any bankruptcy, reorganization or insolvency proceeding; or
(b) if (i) an order, judgment or decree is entered by any court of competent
jurisdiction adjudicating such person a bankrupt or an insolvent, approving a petition seeking
such a reorganization, or appointing a receiver, trustee or liquidator of such person or of all or a
substantial part of its assets, or (ii) there otherwise commences with respect to such person or
any of its assets any proceeding under any bankruptcy, reorganization, arrangement, insolvency,
readjustment, receivership or similar law, and if such order, judgment, decree or proceeding
continues unstayed for any period of one hundred twenty (120) consecutive days after the
expiration of any stay thereof.
"Business Day" means any day other than a Saturday, Sunday or a legal holiday on
which banks are authorized or required to be closed for the conduct of commercial banking
business in Augusta, Georgia.
"Commencement Date" has the meaning given it in paragraph 2.1.1.
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"Default Rate" shall mean a per annum rate of simple interest equal to the lesser of(i)
10% per annum and (ii) the maximum non-usurious interest rate that may be charged under
applicable law.
"DDA" means Downtown Development Authority of Augusta, Georgia, and any
successor governmental or quasi-governmental entity thereto.
"DDA Lease" means the lease from Landlord to DDA contained within this Lease for the
DDA Lease Term.
"DDA Lease Term"has the meaning given it in subsection 2.1.1.
"DDA Lease Termination Date" has the meaning given it in subsection 2.1.1.
"Effective Date" means , 2017.
"Environmental Laws" shall mean any and all Federal, State or local laws, pertaining to
health, safety, or the environment now or at any time hereafter in effect and any judicial or
administrative interpretation thereof(including, but not limited to, any judicial or administrative
order, consent decree or judgment relating to the environment or hazardous substances (as such
term is defined in any such law), or exposure to hazardous substances) including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Superfund Amendments and Reorganization Act of 1986, as amended, the
Resource, Conservation and Recovery Act of 1976, as amended, the Clean Air Act, as amended,
the Federal Water Pollution Control Act, as amended, the Oil Pollution Act of 1990, as amended,
the Safe Drinking Water Act, as amended, the Hazardous Materials Transportation Act, as
amended, the Toxic Substances Control Act, as amended, the federal Clean Water Act of 1977,
all regulations and laws adopted by the Occupational Safety and Health Administration, and any
other environmental or health conservation or protection laws.
"Event of Default" has the meaning given it in subsection 13.1.
"Fee Mortgage" means any Mortgage encumbering, inter alia, the Landlord's fee interest
in the Land and any present and future interest of Landlord in the Property.
"Fee Mortgagee"means the Person secured by a Fee Mortgage.
"Force Majeure" means any (a) strike, lock-out or other labor troubles, (b) governmental
restrictions or limitations, (c) failure or shortage of materials, electrical power, gas, water, fuel
oil, or other utility or service, (d) riot, war, insurrection or other national or local emergency, (e)
accident, flood, fire or other casualty, (f) adverse weather condition, (g) other act of God, or (h)
other cause similar or dissimilar to any of the foregoing and beyond the reasonable control of the
person in question.
"Historic Tax Credits" means rehabilitation tax credits provided by Section 47 of the
Internal Revenue Code of 1986, as amended, and any successor provisions thereto, allocated in
connection with the Improvements.
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"Improvements" mean the historic building located on the Land, and all fixtures and
personal property, all off-street parking areas on the Property; an undivided interest in all
common areas at the Property, and all replacements, additions and alterations thereto.
"Land Records" means the records of the Clerk of Superior Court of Richmond County,
Georgia.
"Landlord" means Miller Theater, LLC, a Georgia limited liability company, and its
successors and assigns as owner of the fee simple title to the Land.
"Lease" means this Lease (as defined in the first paragraph hereof), including
amendments hereto and extensions hereof, if any.
"Lease Year" means (a) the period commencing on July 25, 2015 and terminating on the
first (1St) anniversary of the last day of the calendar month containing the Commencement Date,
and (b) each successive period of twelve (12) calendar months thereafter during the Term.
"Leasehold Estate" means the leasehold estate in the Premises held by Operating Tenant
under this Lease, any interest in future improvements made by Operating Tenant on the Premises
during this Lease and any fee or other interest in the Property acquired by Operating Tenant
hereafter.
"Leasehold Mortgage" means any Mortgage encumbering Operating Tenant's Leasehold
Estate.
"Leasehold Mortgagee" means the Person secured by a Leasehold Mortgage.
"Legal Requirements"has the meaning given it in paragraph 4.3.8.
"Mortgage"means any mortgage, deed to secure debt or deed of trust, as amended and/or
modified from time to time, at any time encumbering any or all of the Property (or all or any
interest in the Property), and any other security interest therein existing at any time under any
other form of security instrument or arrangement used from time to time in the locality of the
Property (including but not limited to any such other form of security arrangement arising under
any deed of trust, sale-and-leaseback documents, lease-and-leaseback documents, security deed
or conditional deed, or any financing statement, security agreement or other documentation used
pursuant to the Uniform Commercial Code or any successor or similar statute), provided that
such mortgage, deed to secure debt, deed of trust or other form of security instrument, and an
instrument evidencing any such other form of security arrangement, has been recorded among
• the records of the Clerk of Superior Court of Richmond County, Georgia or in such other place
as is, under applicable law, required for such instrument to give constructive notice of the
matters set forth therein.
"Mortgagee" means the Person secured by a Mortgage.
"Operating Tenant" means MT Augusta Property LLC, a Georgia limited liability
company, and its successors and permitted assigns as holder of the Leasehold Estate.
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"Original Lease" has the meaning assigned to said term in the first paragraph of this
Lease.
"Permitted Encumbrances" means any and all encumbrances of record existing as of the
date hereof with respect to all or any of the Property and any encumbrances hereafter consented
to in writing by Landlord, Operating Tenant, the Registered Leasehold Mortgagee and the Fee
Mortgagee. Each of the parties hereto hereby consent to and acknowledge as Permitted
Encumbrances, the Leasehold Deed to Secure Debt, Security Agreement and Assignment of
Leases and Rents from Operating Tenant in favor of AFB&T, a division of Synovus Bank
granting and conveying to AFB&T, a division of Synovus Bank, security title to and security
interest in the Operating Tenant's interest under this Lease and the Operating Tenant's rights,
title and interest in the Property, and any amendments and/or modifications thereof, and the Deed
to Secure Debt, Security Agreement and Assignment of Leases and Rents from Landlord in
favor of AFB&T, a division of Synovus Bank granting and conveying to AFB&T, a division of
Synovus Bank, security title to and security interest in the Land and Landlord's rights, title and
interest in the Property, and any amendments and/or modifications thereof.
"Person" means a natural person(s), a trustee, a corporation, a partnership, a limited
liability company and any other form of legal entity.
"Premises" has the meaning assigned to such term in the recitals of this Lease.
"Project" or"Property" means collectively the Premises, including the Improvements.
"Public Uses" means uses that benefit a cultural, recreational or historical purpose or
some combination of such purposes, within the meaning of O.C.G.A. Section 48-8-111(a)(1)(E).
(For avoidance of doubt, "Public Uses" does not require the use to be free).
"Public Use Requirement" means, commencing when the Improvements are placed in
service, use of the Property (i) as a performing arts center, including other uses permitted by law
incident thereto which would not preclude use of the Property as a performance hall for
Symphony Orchestra Augusta, (ii) if, after exercising reasonable commercial efforts, it becomes
economically infeasible to continue to operate the Property as a performing arts center, then for
any other Public Uses approved by Augusta, which approval shall not be unreasonably withheld,
(iii) after the Registered Leasehold Mortgagee exercises its remedies under Article 18 or under
the Registered Leasehold Mortgage or other loan documents related thereto, then for any Public
Uses, or (iv) any other use approved by Augusta. The fact the Property is not being used (i.e., is
"dark"), if it is reasonably determined to be economically infeasible to operate as a performing
arts center, is not a violation of the Public Use Requirement and the fact the Property is used for
uses in addition to Public Uses is not a violation of the Public Use Requirement.
"Recapture Period" means the period commencing as of the date hereof and ending on
the next business day following the fifth (5th) anniversary of the date on which the last "qualified
rehabilitation expenditure" as defined in Section 47(c)(3) of the Code with respect to the
Property is first placed in service or ending sooner, upon the payment of the recapture amount as
provided in any subordination, non-disturbance and attornment agreement entered into in
connection with this Lease among Landlord, Operating Tenant, DDA, Fee Mortgagee and/or
5
Registered Leasehold Mortgagee, and the federal historic tax credit investor that becomes a
member of Borrower.
"Registered Leasehold Mortgage" has the meaning set forth in paragraph 18.2 hereof.
"Registered Leasehold Mortgagee"has the meaning set forth in paragraph 18.2 hereof
"Rehabilitation Plan"has the meaning given it in the Recitals.
"Rent" means all Annual Rent.
"Restoration" means the repair, restoration or rebuilding of any or all of the Property
after any damage thereto or destruction thereof, with such alterations or additions thereto as are
made by Operating Tenant in accordance with this Lease, together with any temporary repairs or
improvements made to protect the Property pending the completion of such work.
"Servitude" means the twenty-five (25) year period commencing on , 2017
and ending on , 2042.
"SNDA" means a Subordination, Non-Disturbance and Attornment Agreement entered
into by Landlord, DDA, Operating Tenant and Fee Mortgagee, substantially in the form of
Exhibit C hereof
"SPLOST Agreement"has the meaning given it in the Recitals.
"SPLOST Funds"has the meaning given it in the Recitals.
"SPLOST Repayment" means an amount equal to the product of a fraction determined
by the number of years remaining on the Servitude at the time of the determination of the
SPLOST Repayment as the numerator and the total number of years of the Servitude (i.e., 25
years) as the denominator multiplied by the lesser of(i) $5,142,856.00 or (ii) the total amount of
SPLOST Funds that are paid to Landlord and/or Augusta Symphony, Inc. and/or Operating
Tenant and/or Registered Leasehold Mortgagee and applied to costs associated with the
Rehabilitation Plan.
"Sublease" means the sublease contained herein of the DDA's interest under this Lease
to Operating Tenant; provided, however, if the DDA should cease to have an interest in this
Lease (either by voluntary cancellation or surrender, by termination or by expiration), then the
Sublease shall refer to this Lease as a direct lease between Landlord and Operating Tenant
expiring on the Termination Date, unless sooner terminated pursuant to the terms hereof
"Sublease Commencement Date" means the date of this Agreement as stated in the first
paragraph.
"Term"has the meaning given it in subsection 2.1.1.
"Termination Date"has the meaning given it in subsection 2.1.1.
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1.2. General. Any other term to which meaning is expressly given in this Lease shall
have such meaning.
Section 2. TERM.
2.1. Length.
2.1.1. Original Term. With respect to the Operating Tenant, this Lease shall be for a
term ("Term") commencing on July 25, 2015 (which was the commencement date of the
Original Lease) ("Commencement Date"), and terminating on July 25, 2070 (the "Termination
Date", except that if the date of such termination is hereafter advanced to an earlier date or
postponed pursuant to any provision of this Lease, or by express, written agreement of the parties
hereto, or by operation of law, the date to which it is advanced or postponed shall thereafter be
the "Termination Date" for all purposes of this Lease).
With respect to the DDA Lease, this Lease shall be for a term ("DDA Lease Term")
commencing on the Sublease Commencement Date, and terminating on the forty-ninth (49th)
anniversary of the Sublease Commencement Date (the "DDA Lease Termination Date", except
that if the date of such termination is hereafter advanced to an earlier date or postponed pursuant
to any provision of this Lease, or by express, written agreement of the parties hereto, or by
operation of law, the date to which it is advanced or postponed shall thereafter be the "DDA
Termination Date" for all purposes of this Lease). Operating Tenant was in possession of the
Premises on the Sublease Commencement Date, and shall remain in possession thereof under the
terms of this Lease.
2.1.2. Surrender.
(a) DDA shall, at the expiration of the DDA Lease Term or any earlier
termination of this Lease or DDA Lease, promptly yield up to Landlord the Property, and
personal property which remains at the Property as of the DDA Lease Termination Date, in
reasonable order and repair, ordinary wear and tear and damage by casualty, or condemnation
excepted. Upon such expiration or termination (whether by reason of an Event of Default or
otherwise), (i) DDA shall not thereafter have any right at law or in equity in or to any or all of
the Property (including the Improvements) and shall be conclusively deemed to have abandoned
same, and Landlord, or if the Lease remains in effect with Operating Tenant, Operating Tenant,
shall automatically be deemed immediately thereupon to have succeeded to all of the same, free
and clear of the right, title or interest therein of DDA (but subject to any Fee Mortgage and to the
lien of all Permitted Encumbrances then outstanding), and (ii) DDA hereby waives any and all
rights of redemption which it may otherwise hold under any applicable law, and (iii) upon such
termination or expiration of the DDA Lease, unless the Lease has terminated or expired as
contemplated in the next paragraph, this Lease shall continue as between Landlord, as lessor, and
Operating Tenant, as lessee, on the same terms as this Lease and the Sublease contained herein
and upon the termination of the DDA Lease, the term of the Sublease shall refer to the Term of
the Lease; provided, however, the Landlord shall not be liable to Operating Tenant for any act,
omission, negligence or default of DDA under this Lease or the Sublease that occurred prior to
the termination, cancellation or surrender of the DDA Lease; shall not be bound by any pre-
payment of rents or other amounts paid by Operating Tenant to DDA under the Sublease more
7
than one month in advance of its due date (other than the pre-payment of Sublease Annual Rent
stated in section 3.1.1 hereof); and shall not be subject to any offsets, credits, claims or defenses
which Operating Tenant might have against DDA under this Lease or the Sublease contained
herein.
(b) Operating Tenant shall, at its expense, at the expiration of the Term or any earlier
termination of this Lease, promptly yield up to Landlord the Property, and personal property
which remains at the Property as of the Termination Date, in reasonable order and repair,
ordinary wear and tear and damage by casualty, or condemnation excepted. Upon such
expiration or termination (whether by reason of an Event of Default or otherwise), (i) neither
DDA nor Operating Tenant shall thereafter have any right at law or in equity in or to any or all of
the Property (including the Improvements) and shall be conclusively deemed to have abandoned
same, and Landlord shall automatically be deemed immediately thereupon to have succeeded to
all of the same, free and clear of the right, title or interest therein of DDA or Operating Tenant
(but subject to any existing Permitted Encumbrances then outstanding), and (ii) each of DDA
and Operating Tenant hereby waive any and all rights of redemption which it may otherwise
hold under any applicable law.
2.2. Holding Over.
2.2.1. Nothing in this Lease shall be deemed in any way to permit Operating Tenant or
DDA to use or occupy the Premises after the expiration of the Term (or in the case of DDA, after
the expiration of the DDA Lease Term) or any earlier termination of this Lease (or in the case of
the DDA, after the early termination of the DDA Lease); provided, however, any such early
termination would be subject to the rights of the Registered Leasehold Mortgagee under Section
18 of this Lease. If and only if Operating Tenant continues to occupy the Premises after such
expiration or termination after obtaining Landlord's express, written consent thereto;
(a) such occupancy shall (unless the parties hereto otherwise agree in writing) be
deemed to be under a month-to-month tenancy, which shall continue until either party hereto
notifies the other in writing, by at least thirty (30) days before the end of any calendar month,
that the party giving such notice elects to terminate such tenancy at the end of such calendar
month, in which event such tenancy shall so terminate;and
(b) subject to the provisions of subparagraph 2.2.2, but anything in the remaining
provisions of this Section to the contrary notwithstanding, the monthly rent payable with respect
to each such monthly period shall equal one-twelfth (1/12) of the Annual Rent (such amount
being the "Monthly Rent") for the Lease Year during which such expiration or termination
occurred, as aforesaid plus, the additional rent provided in subparagraph 2.2.2. below.
2.2.2. If Operating Tenant continues to occupy the Premises after the expiration of the
Term or any earlier termination of this Lease without having obtained Landlord's express,
written consent thereto and the written consent of any existing Fee Mortgagee, then without
altering or impairing any of Landlord's rights under this Lease or applicable law, (a) Operating
Tenant hereby agrees to pay to Landlord immediately on demand by Landlord as monthly rent
for the Premises, for each calendar month or portion thereof after such expiration of the Term or
such earlier termination of this Lease, as aforesaid, until Operating Tenant surrenders possession
8
of the Premises to Landlord, a sum equaling One Hundred and 00/100 Dollars ($100.00) per
each day of such holdover occupancy, and (b) Operating Tenant shall surrender possession of the
Premises to Landlord immediately on Landlord's having demanded the same. Nothing in this
Lease shall be deemed in any way to give Operating Tenant any right to remain in possession of
the Premises after such expiration or termination, regardless of whether Operating Tenant has
paid any such rent to Landlord.
2.3. Title to and Alterations of Improvements. Notwithstanding any provision in this
Lease to the contrary, at all times during the Term of this Lease, the Improvements and all
alterations and additions shall be deemed owned by Operating Tenant for tax purposes (subject
to a right of reversion in favor of Landlord) and Operating Tenant alone shall be entitled to all of
the tax attributes of ownership, including, without limitation, the right to claim depreciation or
cost recovery deductions and the right to claim the federal historic rehabilitation tax credits
pursuant to Section 47 of the Internal Revenue Code of 1986, as amended (the "Code") and the
right to amortize capital costs and to claim any other federal or state tax benefits attributable to
the Improvements. At the expiration or earlier termination of the Term of this Lease, or any
portion thereof, in accordance herewith, Operating Tenant shall peaceably leave, quit and
surrender the Premises in the manner required under paragraph 2.1.2, and said ownership of the
Improvements, including all alterations and improvements thereto, shall revert to the Landlord at
the time of such-expiration or termination of this Lease. Upon such expiration or termination,
the Property, including any Improvements remaining (other than personal property and
equipment owned by Operating Tenant that are not fixtures and are removed by Operating
Tenant from the Property at or prior to the termination or expiration of the Lease), shall become
the sole property of the Landlord at no cost to Landlord in an"as is" condition, and subject to the
Permitted Encumbrances then outstanding and any other encumbrance consented to by Landlord
in writing, and Operating Tenant shall execute and deliver to Landlord such quit claim deed, bill
of sale and other instruments reasonably required by Landlord to confirm said ownership of the
Property to said Landlord.
Section 3. RENT.
3.1. Amount. As rent for the Premises, (i) DDA, during the DDA Lease Term, shall pay
to Landlord annual rent in the amount of One and No/100ths Dollars ($1.00) ("Annual Rent")
payable in single annual installments for a period of forty nine (49) years beginning on the
Sublease Commencement Date, and (ii) thereafter Operating Tenant shall pay Annual Rent
directly to Landlord until the termination of the Lease. As rent for the Premises, Operating
Tenant shall pay to DDA annual rent in the amount of One and No/100ths Dollars ($1.00)
("Annual Subrent") payable in single annual installments for a period of forty nine (49) years
beginning on the Sublease Commencement Date. For convenience, the Operating Tenant may
pay its Annual Subrent directly to the Landlord, in satisfaction of both its obligation to pay
Annual Subrent to DDA and DDA's obligation to pay Annual Rent to Landlord. Landlord, DDA
and Operating Tenant hereby acknowledge that the Annual Rent and Annual Subrent has been
pre-paid for the entire Term, and DDA and Operating Tenant agree that such pre-paid rent shall
be, notwithstanding any provisions herein to the contrary, non-refundable in the event of the
early termination of the Sublease, the DDA Lease or the Lease.
3.2. Security Deposit. None.
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3.3. Leasehold Obligations.
3.3.1. Net Lease. Other than as is expressly set forth in this Lease, all costs, expenses,
liabilities, charges or other deductions whatsoever with respect to the Property and the
construction, ownership, leasing, operation, maintenance, repair, rebuilding, use, occupation of,
or conveyance of any or all of the Property, or this Lease generally shall be the sole
responsibility of and payable by Operating Tenant, including, but not limited to any cost,
expenses, liabilities, charges or other sums, in connection with the closing of the loan secured by
the Registered Leasehold Mortgage. Landlord shall be and remain liable for all obligations
respecting the Premises incurred by Landlord as well as any property tax liability imposed upon
the Land (however, Operating Tenant shall pay any portion of such property tax liability
attributable to the Improvements, and if the invoice for said taxes does not allocate the taxes
between the Land and the Improvements, such allocation shall be made by Landlord in its
reasonable, good faith judgment). Operating Tenant shall be responsible for any property tax
liability attributable to the DDA Lease, the Operating Tenant's Leasehold Estate and the
Improvements.
3.3.2 DDA's Obligations. The parties understand and agree that the DDA shall not
have any financial obligations or liabilities relating to the ownership or operation of the Property,
unless and until the DDA assumes the obligations of the Operating Tenant, and DDA shall have
no right to terminate this Lease or the Sublease without the prior written consent of Landlord,
Operating Tenant, and the Registered Leasehold Mortgagee (if any). The DDA hereby
acknowledges that the Landlord and Operating Tenant are relying on the disbursement of
SPLOST Funds as and when contemplated in the SPLOST Agreement, and DDA agrees that
DDA will comply with and perform its obligations under the SPLOST Agreement and will not
agree to any amendment, modification or termination of the SPLOST Agreement without the
prior written consent of Landlord, Operating Tenant and the Registered Leasehold Mortgagee.
The Operating Tenant shall satisfy the reporting and recordkeeping requirements of the DDA
under the SPLOST Agreement by providing information directly to Augusta, with copies
provided to DDA. DDA hereby agrees to enter into such subordination, non-disturbance and
attornment agreement approved by Landlord, Operating Tenant, Fee Mortgagee and/or
Registered Leasehold Mortgagee and the investor in Borrower purchasing the federal Historic
Tax Credits provided such agreement does not place any liability on DDA beyond its interest in
the Lease and any rents, profits and/or income derived from the Property and recognizes the
Public Use Requirement provided in 3.4 below.
3.4 SPLOST Funds. DDA agrees to pay the SPLOST Funds immediately (and in any
event within five (5) days upon receipt) to Landlord in further consideration of the DDA's
interest in this Lease. Landlord agrees to make the SPLOST Funds Landlord receives
immediately available to Operating Tenant for the purpose of using the funds in payment of the
costs of the Rehabilitation Plan. For convenience, DDA may pay the SPLOST Funds directly to
Operating Tenant or the Registered Leasehold Mortgagee.
The parties have agreed that during the Servitude the uses of the Property shall satisfy the
Public Use Requirement. In the event that during the Servitude the Operating Tenant (or any of
its affiliates or successors in interest) uses the Project such that the uses do not satisfy the Public
Use Requirement, or if Operating Tenant sells, disposes of or transfers title or ownership of the
10
Project, and subsequent to such sale, disposition or transfer the uses of the Project during the
Servitude do not satisfy the Public Use Requirement, DDA shall notify the Operating Tenant
(with a copy to the Registered Leasehold Mortgagee) in writing of the violation of the Public Use
Requirement, and the Operating Tenant shall have ninety (90) days after receipt of such notice to
cure such violation, and if Operating Tenant does not cure such violation within said ninety (90)
day period, the Registered Leasehold Mortgagee shall have the extended cure rights under
Section 18 of this Lease.
For avoidance of doubt, at the conclusion of the Servitude or upon payment of the
SPLOST Repayment or termination of the DDA Lease, the Public Use Requirement shall no
longer be applicable and the DDA shall no longer have any rights under this paragraph regarding
the use of the Property.
At any time, the Operating Tenant and/or the Landlord may cause the termination of the
DDA Lease and the Public Use Requirement by paying to the DDA the SPLOST Repayment,
calculated as of the effective date of any such termination (with a credit for any payments made
pursuant to the SPLOST Agreement in re-payment of the SPLOST Funds), and upon such
payment, the DDA Lease shall terminate and the Sublease shall immediately become a direct
lease between the Landlord and Operating Tenant pursuant to the terms hereof, and DDA shall
have no further interest under this Lease. Nothing in this Lease (and for avoidance of doubt,
nothing in the Sublease) obligates the Operating Tenant, Landlord or any Mortgagee to pay, or
makes Operating Tenant, Landlord or any Mortgagee liable for the payment of, the SPLOST
Repayment, and any obligation under the SPLOST Agreement for the payment of the SPLOST
Repayment is an agreement between the DDA, Augusta and the Augusta Symphony, Inc. that is
outside the obligations of this Lease (and the Sublease). The fact a violation of the Public Use
Requirement could be cured by paying the SPLOST Repayment does not deem such violation to
be a monetary default but the same shall be deemed a non-monetary default (i.e., one that is not
curable by the payment of money) with respect to any and all notice, grace and cure provisions
contained in this Lease.
Section 4. USE OF PROPERTY.
4.1. Nature of Use. Operating Tenant may throughout the Term use and operate the
Property including the Improvements for the following uses and such other uses as are
reasonably and customarily attendant to such uses: rehabilitation, construction, development,
using or marketing for lease or license and leasing or licensing of space in the Property as a
performing arts center, any other uses satisfying the Public Use Requirement and/or any other
uses permitted by applicable law incident thereto. In particular, Operating Tenant agrees to
conduct rehabilitation and construction activities substantially consistent with the Rehabilitation
Plan (including any amendments thereto before or after the Effective Date so long as such
amendment is agreed to by Landlord).
4.2. Compliance with Environmental Laws. Operating Tenant, throughout the Term and
at its sole expense, in its rehabilitation, possession and use of the Improvements or other use of
the Property, shall not (a) cause or permit the escape, disposal or release of any biologically or
chemically active or other Hazardous Substances brought onto the Property by Operating Tenant
or its agents or contractors in violation of applicable laws and/or regulations, or (b) allow the
11
storage or use of such Hazardous Substances in any manner not sanctioned or permitted by law
or by the standards prevailing in the industry for the storage and use of such substances or
materials, or (c) allow any Hazardous Substances to be brought onto o the Property except to use
in the ordinary course of Operating Tenant's business and in compliance with Environmental
Laws. For purposes of this Lease, "Hazardous Substances" shall include those substances and
materials subject to regulation under any applicable Environmental Law. If any Mortgagee or
governmental agency responsible for monitoring Hazardous Substances reasonably requires
testing to ascertain whether or not there has been any release of hazardous materials on the
Property for which Operating Tenant is responsible hereunder while this Lease is in effect, then
the costs thereof shall be paid by Operating Tenant if such requirement applies to the Property.
Operating Tenant shall execute affidavits, representations and the like from time to time at
Landlord's request concerning Operating Tenant's best knowledge and belief regarding the
presence of hazardous substances or materials on the Property.
4.3. Representations, Warranties and Covenants of Landlord. As an inducement to DDA
and Operating Tenant to enter into and proceed under this Lease, Landlord warrants and
represents to DDA and Operating Tenant as follows, which warranties, representations and
covenants are true and correct as of the date of this Lease:
4.3.1. Landlord has good and marketable, fee simple title to the Premises, free and clear
of all other liens and encumbrances except for any Permitted Encumbrances, and has the right,
power and authority to enter into this Lease, to lease the Premises to DDA and Operating Tenant
in accordance with the terms, provisions and conditions contained in this Lease, and has received
all applicable governmental consents and approvals in connection therewith, and no other party
has any right or option to or in connection with the Premises other than AFB&T, a division of
Synovus Bank, as Fee Mortgagee and a Leasehold Mortgagee.
4.3.2. There is no litigation proceeding, or other action pending or, to the best knowledge
and belief of Landlord, threatened, affecting the Premises or Landlord's estate therein;
4.3.3. Landlord has received no written notice, and has no knowledge, nor has Landlord
been otherwise advised, of any pending or threatened condemnation, building or zoning code
violation relating to all or any part of the Property;
4.3.4. Landlord has received no written notice and has no knowledge of the intention of
any party holding an easement affecting the Premises or any part thereof to expand the exercise
of any such easement beyond the scope of the present exercise thereof (as by replacing or
expanding existing facilities, conduits (including underground or overhead wires, cables or
pipes) or systems for sewers, water, electric, gas, cable and other utilities);
4.3.5. The entry by Landlord into this Lease with DDA and Operating Tenant and the
performance of all of the terms, provisions and conditions contained herein will not, or with the
giving of notice or the passage of time, or both, would not, violate or cause a breach or default
under any other agreement relating to the Property to which Landlord is a party or by which it is
bound;
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4.3.6 The Property is unoccupied and vacant, except for the occupancy of Operating
Tenant, and there is no tenant, lessee or other occupant of the Property having any right or claim
to possession or use of the Premises except as provided in this Lease; and possession of the
Premises is hereby delivered free of the rights or claims of any third party tenants, occupants or
other parties in possession of, or claiming any right to possession or use of the Premises;
4.3.7. There are no unpaid special assessments of which Landlord has received notice
for sewer, sidewalk, water, paving, gas, electrical or utility improvements or other capital
expenditures, matured or un-matured, affecting the Property;
4.3.8. There are no outstanding notices of, nor, to Landlord's knowledge, any violations
of any applicable laws, ordinances, notices, orders, rules, regulations and requirements of
applicable federal, state and municipal governments, public or quasi-public authorities and all
departments, commissions, bureaus boards and officers thereof affecting any portion of the
Property (collectively the "Legal Requirements");
4.3.9. Landlord is not obligated under any contract, lease (other than this Lease) or
agreement, oral or written, with respect to the ownership, use, operation or maintenance of the
Property, other than the Fee Mortgage and related documents with AFB&T, a division of
Synovus Bank; and
4.3.10. Landlord hereby consents to Operating Tenant's encumbering its interest in the
Property with a Leasehold Mortgage; provided, however, at no times shall there be more than
one Leasehold Mortgage outstanding, unless such additional Leasehold Mortgage(s) are
consented to by Landlord, Operating_Tenant, the Fee Mortgagee and the Registered Leasehold
Mortgagee.
4.4. Consent of DDA. DDA hereby consents to Operating Tenant's encumbering its
interest in the Property with Leasehold Mortgage(s) and acknowledges the right of Landlord to
encumber its fee interest (and reversionary rights) with Fee Mortgage(s) provided such Fee
Mortgagees enter into a SNDA.
4.5 Consent of Operating Tenant. Operating Tenant hereby consents to Landlord
encumbering its interest in the Property with Fee Mortgage(s) provided, however, at no time
shall there be more than one Fee Mortgage outstanding at any one time that has priority over this
Lease and such Fee Mortgagee shall enter into a SNDA, and upon request of Landlord, neither
DDA nor Operating Tenant shall unreasonably withhold, condition or delay its execution of a
SNDA with respect to a Fee Mortgage provided there is no more than one Fee Mortgage
outstanding at any one time that has priority over this Lease and provided the SNDA is in
substantially the form of Exhibit C hereof. For avoidance of doubt, AFB&T, a division of
Synovus Bank (and its successors and assigns) is the current Fee Mortgagee and has the rights
and benefits of a Fee Mortgagee under this Lease. Only a Fee Mortgagee that has entered into a
SNDA shall have the rights and benefits of the Fee Mortgagee under this Lease.
13
Section 5. OPERATING EXPENSES.
5.1. Operating Expenses.
5.1.1. Operating Tenant's Obligation. Operating Tenant will pay (or cause to be paid)
directly to the providers of such services all costs and expenses attributable to or incurred in
connection with the development, construction, completion, marketing, leasing and occupancy of
the Property including the Improvements (collectively, "Operating Expenses") including
without limitation (a) all energy sources for the Improvements, such as propane, butane, natural
gas, steam, electricity, solar energy and fuel oil; (b) all water, sewer and trash disposal services;
(c) all rehabilitation, maintenance, repair, replacement and rebuilding of the Improvements, (d)
all landscaping, maintenance, repair and striping of all parking areas; (e) all insurance premiums
relating to the Property including the Improvements, including fire and extended coverage,
public liability insurance, rental insurance and all risk insurance; and (f) the cost and expenses of
all capital improvements or repairs (whether structural or non-structural) required by any
governmental or quasi-governmental authority having jurisdiction over the Property including
the Improvements.
5.1.2. Permits and Licenses. Operating Tenant shall procure, or cause to be procured, at
Operating Tenant's sole cost and expense, any and all necessary permits, licenses, or other
authorizations required for the rehabilitation, construction and occupancy of the Improvements
and the lawful and proper installation and maintenance upon the Premises of wires, pipes,
conduits, tubes, and other equipment and appliances for use in supplying any such service to the
Improvements and upon the Premises. Landlord agrees to use Landlord's best reasonable
efforts, at Operating Tenant's sole cost and expense, to cooperate with Operating Tenant in
obtaining any and all permits, licenses, easements and other authorizations required by any
governmental authority with respect to any construction or other work to be performed on the
Premises and grant (or cooperate in processing as regards third party providers), all permits,
licenses, easements and other governmental authorizations that are necessary or helpful for
electric, telephone, gas, cable television, water, sewer, drainage, access and such other public or
private utilities or facilities as may be reasonably necessary or desirable in connection with the
construction or operation of the Improvements. Landlord shall use Landlord's reasonable
efforts, at Operating Tenant's sole cost and expense, to cooperate in the relocation or termination
of easements currently encumbering the Premises to the extent that same may be reasonably
necessary or desirable in connection with the Improvements. Operating Tenant shall be entitled,
without payment to Landlord, for tap or connection fees, to tap into the existing lines, facilities
and systems of applicable electric, gas, cable, water, sewer, sewer treatment and other utilities
serving the Premises. Landlord agrees to use Landlord's reasonable efforts to assist Operating
Tenant to obtain waiver, reduction or deferral, as applicable, of all fees and other charges
otherwise payable in connection with obtaining any permits, licenses, easements and other
authorizations required by any governmental authority with respect to any construction or other
work to be performed on the Property in connection with the Improvements.
Section 6. INSURANCE AND INDEMNIFICATION.
6.1. Insurance to be maintained by Operating Tenant. Operating Tenant shall maintain at
its expense throughout the Term casualty and commercial general liability insurance with respect
14
to the Property. The casualty insurance shall be in an amount equal to the full replacement cost
of the Improvements (and any upgrades and additions thereto) and the liability insurance shall be
in an amount equal to at least $1,000,000 per occurrence.
6.2. Insureds. Each such policy shall name Landlord (and each Fee Mortgagee that has
entered into a SNDA and each Registered Leasehold Mortgagee) as an additional insured
thereon.
6.3. Insurer. All insurance required and all renewals of insurance shall be issued by
companies of recognized responsibility licensed to issue such policies and otherwise transact
business in the State of Georgia. All insurance policies will expressly provide that such policies
will not be cancelled or altered without thirty (30) days' prior written notice to Landlord.
6.4. Subrogation. Anything in this Lease to the contrary notwithstanding, Operating
Tenant hereby waives any and all rights of recovery, claim, action, or cause of action, against
Landlord, its agents, officers, or employees, for any loss or damage that may occur to the
Property, or any Improvements, or any personal property of such party therein, or for any loss of
life or injury to persons by reason of fire, the elements, or any other cause(s) which are insured
against under the terms of the insurance policies referred to herein, regardless of cause or origin,
including negligence of Landlord, its agents, officers, or employees, and covenants that no
insurer shall hold any right of subrogation against Landlord. Operating Tenant's insurance
policies shall include appropriate clauses waiving all rights of subrogation against Landlord with
respect to losses payable under such policies.
Section 7. IMPROVEMENTS TO PREMISES.
7.1. Rehabilitation of Improvements.
7.1.1. Alterations. Landlord and DDA agree that Operating Tenant shall have the right
to make such alterations, additions and changes to the Property as Operating Tenant deems
necessary or appropriate, including, without limitation, replacement and disposal thereof;
provided, however, material alterations, additions and changes that are not substantially in
accordance with the Rehabilitation Plan shall require the prior written approval of Landlord,
which approval will not be unreasonably withheld.
7.1.2. Estoppel Certificates. Landlord, DDA and Operating Tenant agree that at any
time and from time to time upon not less than twenty (20) days' prior written notice by the other
party, or upon request from a Fee Mortgagee, Registered Leasehold Mortgagee, a permitted
assignee or other interested party, Landlord, DDA and/or Operating Tenant will execute,
acknowledge and deliver to the other party a statement in writing certifying: (a) that this Lease is
unmodified (or if modified, stating such modifications) and in full force and effect; (b) the date
through which the Rents have been paid and any outstanding payment obligations then due under
the Lease; and (c) that, to the knowledge of the Person executing such certification (if such be
the case), there is no default, set-off, defense or other claim against Landlord, DDA or Operating
Tenant, as applicable, other than those, if any, so specified under the provisions of this Lease;
and (d) as long as the DDA Lease is in effect, the amount of the SPLOST Repayment as of the
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date of such certificate. It is intended that any such statement may be relied upon by any such
Persons.
7.1.3. DDA Lease. DDA shall not execute any Mortgage or other encumbrance or
security instrument with respect to DDA's interest under this Lease (or the Sublease), without
the prior written consent of Landlord, Operating Tenant, any Registered Leasehold Mortgagee
and the Fee Mortgagee that is a party to a SNDA, which consent may be withheld in the
reasonable discretion of such Persons, and without such consent, such encumbrance or security
instrument shall be void. For avoidance of doubt, Landlord and Operating Tenant have
consented to any such encumbrance by DDA to AFB&T, a division of Synovus Bank, as the
current Fee Mortgagee and Registered Leasehold Mortgagee.
7.1.4. Leasehold Mortgages. Operating Tenant shall provide written notice to Landlord
and DDA of the name and address of each Leasehold Mortgagee under this Lease. Such
Leasehold Mortgagee of which Landlord and DDA has been notified of in writing (such notice to
be given in the manner provided in the notice provision of Section 15 hereof and shall detail the
name and notice address of such Leasehold Mortgagee) shall be a Registered Leasehold
Mortgagee, and as hereinafter provided, at no time shall there be more than one Registered
Leasehold Mortgagee. Landlord and DDA hereby acknowledge that they have been properly
notified that AFB&T, a division of Synovus Bank holds a Leasehold Mortgage and hereby
confirm AFB&T, a division of Synovus Bank is the Registered Leasehold Mortgagee for all
purposes of this Lease, and as long as AFB&T, a division of Synovus Bank (or its successor
and/or assign) is the Registered Leasehold Mortgagee, there shall be no other Registered
Leasehold Mortgagee unless consented to in writing by AFB&T, a division of Synovus Bank (or
its successor or assign).
7.2. Joinder. Without limiting Landlord's or DDA's obligations under any other
provision of this Lease, Landlord and DDA shall, promptly at Operating Tenant's request and
expense at any time during the Term (and provided that Landlord or DDA thereby assumes no
liability or obligation), join in any and all applications for building permits, subdivision plat
approvals or certificates of dedication thereon, public works or other agreements and permits for
sewer, water or other utility services, other instruments of dedication or other permits or
approvals, the granting of or entry into which by any governmental or quasi-governmental
authority having jurisdiction over the Property is necessary to permit (a) the development,
rehabilitation, improvement, use and occupancy of the Property for the purposes permitted by
this Lease, without violating applicable law; and (b) the dedication to Augusta-Richmond
County and/or the State of Georgia after the Commencement Date of such title to or easements
for utility, roadway and slope or storm drainage areas or facilities as are, in Operating Tenant's
opinion, necessary or desirable in connection therewith; provided, however, any such easement,
transfer or dedication shall be subject to each Fee Mortgage and Leasehold Mortgage unless
consented to in writing by such Fee Mortgagee and Leasehold Mortgagee.
Section 8. REPAIRS AND MAINTENANCE.
8.1. Repairs. Operating Tenant shall, throughout the Term and at its expense,
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(a) keep the Premises in good order and condition (ordinary wear and tear
excepted) and in compliance with applicable building and health and safety codes; and
(b) promptly make any and all repairs, ordinary or extraordinary, foreseen or
unforeseen, to the Property (including but not limited to the landscaping thereon) as are
necessary to maintain it in good condition, subject, in the event of casualty or
condemnation to receipt of applicable insurance and/or condemnation proceeds therefor,
and Landlord shall have no obligation hereunder as to the same.
8.2. Maintenance. Operating Tenant shall keep and maintain all of the Property in a
clean and orderly condition, free of accumulation of dirt and rubbish.
Section 9. LANDLORD'S RIGHT OF ENTRY.
9.1. Inspection and Repair. Subject to the rights of any tenant under any lease of space
in the Property, Landlord shall be entitled to enter the Property during Operating Tenant's
normal business hours to (a) inspect the Property at any time, upon forty-eight (48) hours'
advance written notice and (b) make any repairs thereto and/or take any other action therein
which is required by applicable law, or which Landlord is permitted to make by any provision of
this Lease, after giving Operating Tenant at least twenty (20) Business Days' prior written notice
of Landlord's intention to take such action and provided Operating Tenant doesn't timely cure
same (and any sums expended by Landlord in making such repairs and/or taking any such
actions (and all interest thereon) shall be immediately due from Operating Tenant to Landlord
and from the date such sums are paid by Landlord, interest shall accrue daily on such sums at the
Default Rate). Landlord may, while taking any such action upon the Property, store therein any
and all necessary materials, tools and equipment, and Operating Tenant shall have no liability to
Landlord for any damage to or destruction of any such materials, tools and equipment, except if
and to the extent that such damage or destruction is proximately caused by the gross negligence
of Operating Tenant. Landlord shall use its best efforts to not disrupt the rights of tenants at the
Property. Provided further, in the event the Operating Tenant fails to pay or perform any
obligations of Operating Tenant under this Lease, the Landlord may pay and/or perform any such
obligations and any costs incurred by Landlord in connection therewith shall be immediately due
from Operating Tenant to Landlord, with interest thereon from the date incurred until re-paid at
the Default Rate. Nothing herein obligates Landlord to make any such inspection or any such
repairs or to cure any such failure on the part of Operating Tenant.
Section 10. FIRE AND OTHER CASUALTIES.
10.1. Damages or Destruction to Premises. Operating Tenant shall give prompt notice
to Landlord and DDA (if the DDA Lease is in effect) after the occurrence of any fire,
earthquake, act of God or other casualty to or in connection with the Property, the Improvements
or any portion thereof (hereinafter sometimes referred to as a "Casualty"). Subject to Section
10.2 below, if during the Term the Property shall be damaged or destroyed by Casualty, to the
extent permitted by the Registered Leasehold Mortgagee (which consent shall not be
unreasonably withheld), Operating Tenant shall repair or restore the Property, so long as
Operating Tenant reasonably determines that Restoration is feasible and provided that sufficient
insurance proceeds are available to do so. In the event that Operating Tenant shall determine by
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notice to Landlord and DDA (if the DDA Lease is in effect) given within ninety (90) days after
such Casualty, that it is not economically practical to restore the Property to substantially the
same condition in which they existed prior to the occurrence of such Casualty (or that the
Registered Leasehold Mortgagee is not allowing the insurance proceeds to be used for
Restoration), then Operating Tenant may terminate this Lease as of a date that is not less than
thirty (30) days after the date of such notice, subject to the rights of the Registered Leasehold
Mortgagee under Section 18 hereof
10.2. Distribution of Insurance Proceeds. In the event that this Lease is terminated
pursuant to Section 10.1 hereof, the insurance proceeds received as the result of such Casualty
shall be distributed as follows: (a) first, to the Operating Tenant, in an amount equal to market
value of the Improvements less the residual value of the Improvements at the conclusion of the
Term (with such proceeds payable to the Operating Tenant being paid to the Registered
Leasehold Mortgagee pursuant to term of the Leasehold Mortgage and related loan documents
between Operating Tenant and Registered Leasehold Mortgagee), and (b) to the Landlord, the
remainder of the proceeds (with such proceeds payable to Landlord being paid to the Fee
Mortgagee pursuant to term of the Fee Mortgage and related loan documents between Landlord
and Fee Mortgagee); provided, however, if the Property is subject to the Public Use Requirement
and the Public Use Requirement is no longer being satisfied, any proceeds retained by Operating
Tenant after payment in full of the indebtedness owing to any Registered Leasehold Mortgagee
shall be applied to the SPLOST Repayment. For avoidance of doubt, and notwithstanding the
forgoing, as long as AFB&T, a division of Synovus Bank has a Leasehold Mortgage and/or a Fee
Mortgage encumbering all or any of the Property securing, inter alia, the construction loan for
the rehabilitation of the Project or any debt related to any amendment, modification, extension,
renewal, restructuring or refinancing thereof, all insurance proceeds shall be payable to AFB&T,
a division of Synovus Bank for application as provided in said Mortgages. DDA hereby
acknowledges that DDA has no interest in any such insurance proceeds other than with
application of proceeds to the SPLOST Repayment provided above and any insurance proceeds
payable to DDA as sublessor would be paid to Landlord (subject to the rights of any Fee
Mortgagee thereto).
Section 11. CONDEMNATION.
11.1. Notice of Taking. Forthwith upon receipt by either Landlord, DDA or Operating
Tenant of notice of the institution of any proceedings for the taking or condemnation of all or a
portion of the Property or Improvements by the government of the United States, State of
Georgia, Augusta-Richmond County, or any other governmental authority, or any corporation
under the right of eminent domain (a "Taking"), the party receiving such notice shall promptly
give notice thereof to the others, and such other parties may also appear in such proceeding and
be represented by counsel, who may be counsel for the party receiving such notice.
11.2. Special Account. If a Total Taking (as defined in Section 11.3), the full amount
of any award for any Taking (the "Award"), shall, notwithstanding any allocation made by the
awarding authority, be paid, and allocated (x) to the Operating Tenant, an amount equal to the
amount allocated to the Improvements minus the residual fair market value of the Improvements
as of the expiration of the Term, and (y) to the Landlord, the rest of the Award; provided,
however, any Award payable to Operating Tenant shall be paid to the Registered Leasehold
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Mortgagee (with such portion of the Award being paid to the Registered Leasehold Mortgagee
having first priority) and any portion payable to Landlord shall be paid to any Fee Mortgagee
(with such portion of the Award being paid to the Fee Mortgagee having first priority). The
portion of the Award so allocated to the Landlord shall be known herein as the "Landlord's
Award," and the portion so allocated to the Operating Tenant shall be known herein as the
"Operating Tenant's Award." For avoidance of doubt, and notwithstanding the forgoing, as
long as AFB&T, a division of Synovus Bank has a Leasehold Mortgage and/or a Fee Mortgage
encumbering all or any of the Property securing the construction loan for the rehabilitation of the
Project, or any debt related to any amendment, modification, extension, renewal, restructuring or
refinancing thereof, all Awards shall be payable to AFB&T, a division of Synovus Bank for
application as provided in said Mortgages.
11.3. Total Taking. In the event of a permanent Taking of the fee title to or of control
of the Premises or of the entire Leasehold Estate hereunder or the entire Improvements (a "Total
Taking"), this Lease shall thereupon terminate as of the effective date of such Total Taking,
without liability or further recourse to the parties (and the reversion of title to the Improvement
contemplated 2.3 shall be deemed to have occurred at the time of such termination), provided
that any Rent payable or obligations owed by the Operating Tenant to the Landlord as of the date
of said Total Taking shall be paid or otherwise carried out in full.
11.4. Partial Taking; Procedures and Criteria for Course of Action. In the event of a
permanent Taking of less than all of the Premises (a"Partial Taking"),
(a) if Operating Tenant reasonably determines that the continued use and
occupancy of the remainder of the Premises by the Operating Tenant is or can reasonably
be made to be economically viable, structurally sound, and otherwise feasible based upon
the amount of eminent domain proceeds available for the purpose of paying for such
restoration (the "Restoration Criteria"), then, upon receipt of the consent of the
Registered Leasehold Mortgagee having the first priority Registered Leasehold
Mortgage, the entire Award shall be applied to restoration of the Premises and the
Premises shall be restored pursuant to Section 10.1; or
(b) if the continued use and occupancy of the remainder of the Premises by the
Operating Tenant is not or cannot, in Operating Tenant's reasonable judgment, be made
to be economically viable, structurally sound, and otherwise feasible (or if the first
priority Registered Leasehold Mortgagee does not permit such Restoration), then this
Lease may be terminated by Operating Tenant pursuant to Section 10.1 and the Award
applied pursuant to Section 11.2; provided, however, any such termination shall be
subject to the rights of the Registered Leasehold Mortgagee to a New Lease as
contemplated in Section 18 hereof.
11.5. Restoration. If a decision is made pursuant to Section 10.1 to restore the remainder
of the Property following receipt of the Award, the Operating Tenant shall promptly proceed, at
its expense, to commence and complete the restoration pursuant to the provisions of Section 10,
using the Award for such restoration, with any excess remaining after the completion of the
restoration being payable to Operating Tenant and Landlord, using the calculation set forth in
such Section 11.2. If Operating Tenant has decided pursuant to Section 10.1 to restore the
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remainder of the Property, and if the cost of the restoration shall exceed the amount of the entire
Award, the deficiency shall be paid by the Operating Tenant. Operating Tenant's obligation
hereunder shall be subject to receipt of the entire Award of funds and approval of the Registered
Leasehold Mortgagee.
11.6. Termination upon Non-Restoration. Following a Partial Taking, if a decision is
made pursuant to Section 11.4(b) that the remaining portion of the Premises is not to be restored,
the DDA and Operating Tenant shall surrender the Premises to the Landlord and this Lease shall
thereupon be terminated without liability or further recourse to the parties hereto; provided,
however, if the Registered Leasehold Mortgagee elects to enter into (or have its nominee,
assignee or designee enter into) a New Lease under Section 18 hereof, the entire Award shall be
made available to such Registered Leasehold Mortgagee for the Restoration, and any remainder
after such Restoration shall may be retained by the tenant under such New Lease or retained by
said Registered Leasehold Mortgagee, in its sole discretion.
11.7. No Waiver. No provisions in this Lease limit the rights of any of the Landlord or
Operating Tenant to seek compensation from a condemning authority as provided by statute,
common law, or the United States Constitution. DDA hereby acknowledges that unless DDA
has taken over the Operating Tenant's obligations under this Lease, the DDA shall not be entitled
to retain any Award and portion of any Award paid to DDA shall paid to Landlord in accordance
with the above.
Section 12. ASSIGNMENT AND SUBLETTING.
12.1. Transfer by Operating Tenant.
12.1.1. Operating Tenant shall have the right to assign, sublet and encumber its interest
under this Lease, from time to time, in full or in part, subject to the approval of Landlord (but
without requiring the approval of DDA), which consent shall not be unreasonably withheld or
delayed (provided, however, license or occupancy agreements, or similar agreements, entered
into by Operating Tenant in the ordinary course of business for the short-term rental or use of the
Property for performances, public or private functions and other uses shall not require the
approval of Landlord or DDA). In no event shall Operating Tenant be permitted to assign any
of its interest under this Lease without the prior written consent of the Registered Leasehold
Mortgagee, which consent may be withheld in the sole discretion of the Registered Leasehold
Mortgagee. During the Recapture Period, Operating Tenant shall not enter into any sublease of
any portion of the Premises whose occupancy thereof would, singularly, or in the aggregate with
other subtenants or sub-subtenants of the Premises, cause the Premises to be deemed to be "tax-
exempt use property" under Sections 47(c)(2)(B)(v) or 168(h) of the Code (or any corresponding
or related provision of the Code).
12.2. Transfer by Landlord.
12.2.1. Subject to the provisions of Section 12.2.2 below, Landlord may assign this Lease
and Landlord's reversion hereunder without the necessity of obtaining DDA's or Operating
Tenant's consent or permission; provided, however, at all times the interest of the Landlord
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under this Lease shall be held by the fee simple owner of the Land and the reversionary interest
in the Improvements run with the Land and pass to the owner of the Land (Landlord may not
assign its interest in the Lease or any reversionary interest herein contemplated to any Person
other than the Person owning the Land and/or pursuant to a Fee Mortgage); provided, however,
any Fee Mortgage shall be subordinate to this Lease unless the Fee Mortgagee enters into a
SNDA (and each of Operating Tenant and DDA will, upon request of Landlord, enter into a
SNDA in substantially the form attached hereto as Exhibit C hereof and provided at no time
shall there be more than one Fee Mortgage outstanding having priority over this Lease (and that
Operating Tenant shall cause each Leasehold Mortgagee to join such SNDA and agrees that the
Leasehold Mortgage and Leasehold Mortgagee (and any party acquiring the Operating Tenant's
interest in this Lease (and the Sublease) through the foreclosure or enforcement of, and/or
assignment in lieu of foreclosure with respect to, said Leasehold Mortgage shall be subject to the
terms of SNDA as a successor and assign to Operating Tenant). Notwithstanding the foregoing,
as long as AFB&T, a division of Synovus Bank is the holder of any Mortgage encumbering all or
any of the Property, no Fee Mortgage will be permitted, other than a Fee Mortgage in favor of
AFB&T, a division of Synovus Bank, without the prior written consent of AFB&T, a division of
Synovus Bank.
12.2.2. Notwithstanding anything herein to the contrary, during the Recapture Period,
Landlord shall not assign or transfer this Lease to a person or entity that would cause a recapture
or loss of all or any portion of the Historic Tax Credits.
12.3. Transfer by DDA.
12.3.1. DDA may not assign its interest in this Lease or enter into any property
management agreement with respect to the DDA's interest in the Lease, without the necessity of
obtaining the prior written consent or permission of Landlord, Operating Tenant and any Fee
Mortgagee a party to an SNDA with DDA, which consent may be withheld in the reasonable
discretion of such Landlord, Operating Tenant and Fee Mortgagee, and any such assignment or
management agreement without such prior written consent shall be void and of no effect.
Operating Tenant and Landlord do hereby consent to DDA entering into an Assignment of
Leases and Rents with AFB&T, a division of Synovus Bank.
12.3.2. Notwithstanding anything herein to the contrary, DDA shall not assign or transfer
its interest in this Lease to a person or entity that would cause a recapture or loss of all or any
portion of the Historic Tax Credits.
Section 13. DEFAULT.
13.1. Definition. As used in this Lease, each of the following events shall constitute an
"Event of Default" by DDA, Operating Tenant or Landlord, as applicable, unless such Event of
Default is caused, in full or in part, by Force Majeure:
(a) if DDA or Operating Tenant fails (a) to pay any Annual Rent or Annual
Sub-Rent or other sum which it is obligated to pay under this Lease, when and as it is due and
payable hereunder, or (b) to perform any of its obligations under this Lease or observe or comply
21
with any provision of this Lease, in each case not cured within the grace or cure period set forth
below;
(b) if Landlord (a) fails to pay any sum which it is obligated to pay under this
Lease when and as it is due and payable hereunder, or (b) if Landlord fails to perform any of its
obligations under this Lease, in each case not cured within the grace or cure period set forth
below;
(c) if DDA fails to pay (and Augusta does not otherwise directly pay)
SPLOST Funds to Landlord or Operating Tenant or the Registered Leasehold Mortgagee as and
when disbursement of such funds are made available for disbursement under the SPLOST
Agreement and in any event prior to April 1, 2018 (for avoidance of doubt, a default under this
subpart (c) may, at the option of Operating Tenant (with the consent of the Registered Leasehold
Mortgagee), terminate DDA's interest in the Lease and Sublease but not the rights of Operating
Tenant to continue the Lease and Sublease directly with Landlord);
(d) if a Bankruptcy of DDA or Operating Tenant occurs (for avoidance of
doubt, the Bankruptcy of DDA shall terminate DDA's interest in the Lease and Sublease but not
the rights of Operating Tenant to continue the Lease and Sublease directly with Landlord).
13.2. Notice; Grace Period. Anything in this Section to the contrary notwithstanding, if
an Event of Default occurs neither Landlord, DDA nor Operating Tenant shall exercise any right
or remedy on account thereof which it holds under this Lease or applicable law unless and until:
(a) The non-defaulting party gives written notice thereof to the defaulting
party;
(b) If such Event of Default consists of a failure to pay money, within twenty
(20) days after the non-defaulting party gives such written notice, the defaulting party
fails to pay all of such money, or if such Event of Default consists of something other
than a failure to pay money, within sixty (60) days after the non-defaulting party gives
such written notice such Event of Default is not cured, or if such Event of Default is not
reasonably curable within such period, the defaulting party has not commenced to
proceed within such period actively, diligently and in good faith to begin to cure such
Event of Default and to continue thereafter to do so until it is fully cured;
(c) Following the grace periods set forth in this Section 13.2, the non-
defaulting party shall be entitled, upon notice to the defaulting party, to pursue its
available remedies at law or in equity; provided, that if the default is a default by
Operating Tenant and is caused, directly or indirectly, by a default by a subtenant of
Operating Tenant, Operating Tenant shall be given such additional grace period as
reasonably necessary to cause its subtenant to cure such default.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO
EVENT WILL THIS LEASE (OR THE SUBLEASE) BE TERMINATED WITHOUT
THE PRIOR WRITTEN CONSENT OF AFB&T, A DIVISION OF SYNOVUS BANK
(OR ITS SUCCESSORS AND/OR ASSIGNS) AS LONG AS AFB&T, A DIVISION OF
SYNOVUS BANK IS THE HOLDER OF A LEASEHOLD MORTGAGE AND/OR FEE
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MORTGAGE, BUT UNLESS THE PUBLIC USE REQUIREMENT HAS TERMINATED
AS PROVIDED HEREIN, THE PUBLIC USE REQUIREMENT SHALL REMAIN IN
EFFECT. THE DDA LEASE SHALL BE TERMINATED UPON THE PAYMENT IN
FULL OF THE SPLOST REPAYMENT AMOUNT CALCULATED AS OF THE DATE
OF SUCH REPAYMENT AND THE DDA LEASE MAY BE TERMINATED AT THE
OPTION OF LANDLORD IN THE EVENT DDA FAILS TO MAKE ANY PAYMENT
OF SPLOST FUNDS AS AND WHEN DUE, UNLESS AUGUSTA CURES SUCH
FAILURE TO PAY (AND IN THE EVENT OF SUCH TERMINATION OF THE DDA
LEASE, THE SUBLEASE WILL SURVIVE AS A DIRECT LEASE BETWEEN
LANDLORD AND OPERATING TENANT).
Section 14. CONDITION OF TITLE AND PREMISES.
14.1. Quiet Enjoyment. Landlord hereby
(a) covenants and agrees that, at the time of the execution and delivery of this
Lease by the parties hereto, it (i) is the owner of a fee simple estate in and to the
Premises, subject to the operation and effect of and only of the Permitted Encumbrances,
and (ii) has the full right, power and authority to enter into this Lease and, thereby to
lease the Premises; and
(b) warrants that Operating Tenant will have quiet and peaceful possession of
the Premises during the Term so long as all of Operating Tenant's obligations hereunder
are timely performed, except if and to the extent that such possession is terminated
pursuant to Sections 10, 11 or 13 or any other provision of this Lease.
Section 15. NOTICES.
15.1. Any notice, demand, consent, approval, request or other communication or
document to be provided hereunder to Landlord, DDA or Operating Tenant (a) shall be in
writing, and (b) shall be deemed to have been provided on the earlier of(i) (1) forty-eight (48)
hours after being sent as certified or registered mail in the United States mails, postage prepaid,
return receipt requested, or (2) the next Business Day after having been deposited (in time for
delivery by such service on such Business Day) with Federal Express or another national courier
service, or (3) (if such party's receipt thereof is acknowledged in writing) upon having been sent
by telefax or another means of immediate electronic communication, in each case to the address
of such party set forth hereinabove or to such other address in the United States of America as
such party may designate from time to time by notice to each other party hereto, or (ii) (if such
party's receipt thereof is acknowledged in writing) its having been given by hand or other actual
delivery to such party.
15.2. All notices required or permitted to be given under this Lease shall be deemed
given in accordance with the foregoing paragraph of this Section 15, and addressed as set forth in
Exhibit B. Any party may change its address by timely notice to the other party.
Section 16. [Intentionally Omitted].
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Section 17. GENERAL.
17.1. Effectiveness. This Lease shall be effective as of the Effective Date.
17.2. Complete understanding. This Lease represents the complete understanding
between the parties hereto as to the subject matter hereof
17.3. Amendment. This Lease may be amended, modified and/or extended by and only
by an instrument executed and delivered by each party hereto, and as long as there is any Fee
Mortgage and the Fee Mortgagee has entered into a SNDA, any such amendment, modification
or extension shall not be effective without the written consent of the first priority Fee Mortgagee,
which consent may be withheld in the reasonable discretion of the Fee Mortgagee, and as long as
there is any Registered Leasehold Mortgage, any such amendment, modification or extension
shall not be effective without the prior written consent of the Registered Leasehold Mortgagee,
which consent may be withheld in the reasonable discretion of the Registered Leasehold
Mortgagee. NOTWITHSTANDING THE FOREGOING, AS LONG AS AFB&T, A
DIVISION OF SYNOVUS BANK HOLDS A MORTGAGE THEN THIS LEASE MAY NOT
BE AMENDED, MODIFIED AND/OR EXTENDED WITHOUT THE PRIOR WRITTEN
CONSENT OF AFB&T, A DIVISION OF SYNOVUS BANK, WHICH CONSENT MAYBE
WITHHELD IN THE REASONABLE DISCRETION OF AFB&T, A DIVISION OF
SYNOVUS BANK.
17.4. Waiver. No party hereto shall be deemed to have waived the exercise of any right
which it holds hereunder unless such waiver is made expressly and in writing (and, without
limiting the generality of the foregoing, no delay or omission by any party hereto in exercising
any such right shall be deemed a waiver of its future exercise). No such waiver made in any
instance involving the exercise of any such right shall be deemed a waiver as to any other such
instance, or any other such right.
17.5. Applicable law. This Lease shall be given effect and construed by application of
the law of the State of Georgia, and any action or proceeding arising hereunder shall be brought
in the courts of Georgia.
17.6. Time of essence. Time shall be of the essence of this Lease, except that, whenever
the last day for the exercise of any right or the discharge of any obligation hereunder falls on a
Saturday, Sunday or statutory holiday, the party having such right or obligation shall have until
5:00 p.m. (Eastern Time) on the next succeeding day which is not a Saturday, Sunday or
statutory holiday to exercise such right or discharge such obligation.
17.7. Headings. The headings of the Sections, subsections, paragraphs and
subparagraphs hereof are provided herein for and only for convenience of reference, and shall
not be considered in construing their contents.
17.8. Construction. As used herein, all references made (a) in the neutral, masculine or
feminine gender shall be deemed to have been made in all such genders, (b) in the singular or
plural number shall be deemed to have been made, respectively, in the plural or singular number
as well, and (c) to any Section, subsection, paragraph or subparagraph shall be deemed, unless
24
otherwise expressly indicated, to have been made to such Section, subsection, paragraph or
subparagraph of this Lease.
17.9. Exhibits. Each writing or plat referred to herein as being attached hereto as an
exhibit or otherwise designated herein as an exhibit hereto is hereby incorporated herein and
made a part hereof.
17.10. Severability. No determination by any court, governmental or administrative body
or agency or otherwise that any provision of this Lease or any amendment hereof is invalid or
unenforceable in any instance shall affect the validity or enforceability of (a) any other such
provision, or (b) such provision in any circumstance not controlled by such determination. Each
such provision shall remain valid and enforceable to the fullest extent allowed by, and shall be
construed wherever possible as being consistent with, applicable law.
17.11. Disclaimer of Partnership Status. Nothing in this Lease shall be deemed in any
way to create between the parties hereto any relationship of partnership, joint venture or
association, and the parties hereto hereby disclaim the existence of any such relationship.
17.12. Commissions. Each party hereto hereby represents and warrants to the other that,
in connection with the leasing of the Premises hereunder, the party so representing and
warranting has not dealt with any real estate broker, agent or finder, and there is no commission,
charge or other compensation due on account thereof. Each party hereto shall defend, indemnify
and hold harmless the other against and from any liability, claim of liability or expense arising
out of any inaccuracy in such party's representation.
17.13. Prevailing Party. In the event any party hereunder initiates judicial action against
the other in order to enforce the terms, covenants and provisions of this Lease, the non-prevailing
party in such judicial action shall reimburse the prevailing party in such judicial action for all
reasonable expenses, fees, costs, including reasonable attorneys' fees actually incurred by the
prevailing party in connection with such judicial action.
17.14 Liability. Any liability of Landlord under this Lease shall be limited to the
Landlord's interest in the Property. Any liability of DDA under this Lease shall be limited to the
DDA's interest in the Property, and any liability of Operating Tenant under this Lease shall be
limited to the Operating Tenant's interest in the Property. The parties understand and agree that
the DDA is an accommodating party serving without compensation to facilitate the
Rehabilitation Plan for the benefit of Augusta-Richmond County, Georgia, and shall have no
liability to Landlord, Operating Tenant or any third party during or following the termination of
this Lease, except for acts constituting p t tutmg known intentional wrong doing, and DDA has no right to
terminate this Lease or the Sublease, however, DDA may terminate the DDA Lease and thereby
cause the Sublease to be a direct lease between Landlord and Operating Tenant. Operating
Tenant shall reimburse DDA for its reasonable and necessary increase in costs, if any, incurred
with respect to its audited financial statements attributable to this Lease and for its attorney fees
or other costs incurred attributable to this Lease or the SPLOST Agreement.
17.15. Benefit and Burden. This Lease shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Each Fee Mortgagee who
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enters into a SNDA and each Registered Leasehold Mortgagee is a third party beneficiary of the
terms of this Lease, however, no Fee Mortgagee shall have any liability under this Lease unless
such Fee Mortgagee succeeds to the interest of the Landlord under this Lease and then such
liability shall be limited to such Fee Mortgagee's interest in the Property, and no Leasehold
Mortgagee (including, without limitation, any Registered Leasehold Mortgagee) shall have any
liability under this Lease unless such Leasehold Mortgagee succeeds to the interest of Operating
Tenant under this Lease and then such liability shall be limited to the such Leasehold
Mortgagee's interest in the Property.
SECTION 18
Rights of Leasehold Mortgagees
18.1 Leasehold Mortgages.
(a) Operating Tenant may mortgage or convey security title to its entire
interest under this Lease and in and to the Improvements to a Leasehold Mortgagee;
provided however, only a Registered Leasehold Mortgage and a Registered Leasehold
Mortgagees shall have the benefits of this Section 18. Notwithstanding anything herein
to the contrary, at no time shall there be more than one Registered Leasehold Mortgage or
Registered Leasehold Mortgagee, and the parties agree that as of the date hereof the
Registered Leasehold Mortgagee is AFB&T, a division of Synovus Bank.
(i) No amendment or modification of this Lease shall be made without
the prior written consent of the Registered Leasehold Mortgagee, which consent
may be withheld in the reasonable discretion of such Registered Leasehold
Mortgagee.
(ii) Substantially concurrently with Landlord's giving to DDA or
Operating Tenant, or DDA's giving to Landlord or Operating Tenant, or
Operating Tenant's giving to Landlord or DDA, any notice of default or other
notice given under or pursuant to this Lease, Landlord or DDA or Operating
Tenant, as applicable, will send a copy of such notice to the Registered Leasehold
Mortgagee pursuant to paragraph 18.2 below.
(b) Any restrictions contained in this Lease on the assignment or transfer of
Operating Tenant's interest in this Lease shall not apply to any purchases at a foreclosure
sale (or sale under power of sale) under a Leasehold Mortgage, or the foreclosure or
enforcement by Leasehold Mortgagee (or its assignee, designee or nominee) of its
security title or interest herein, or the acceptance by Leasehold Mortgagee (or its
assignee, designee or nominee) of a deed in lieu thereof(such foreclosure purchaser or
Leasehold Mortgagee (or its assignee, designee or nominee), as applicable, a "Successor
Operating Tenant"), or to the assignment or transfer of such Leasehold Mortgagee's (or
its designee's or nominee's) interest in this Lease.
18.2 Notices to Leasehold Mortgagees; Leasehold Mortgagee's Right to Cure.
Whenever a Registered Leasehold Mortgage exists, Landlord shall deliver to any Registered
Leasehold Mortgagee written notice of any default by DDA or Operating Tenant or notice of
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termination or election to terminate this Lease, the DDA Lease or the Sublease simultaneously
with providing notice to DDA and/or Operating Tenant, and no such notice to DDA or Operating
Tenant, and no exercise of any remedy by Landlord or DDA as a result of any such default or
termination of this Lease, shall be effective against the Registered Leasehold Mortgagee until
such notice shall have been delivered to Registered Leasehold Mortgagee at its address specified
in its notice given to Landlord in accordance with paragraph 7.1.4 hereof (or in the case of
AFB&T, a division of Synovus Bank, at the address provided below). Landlord hereby
covenants and agrees that such Registered Leasehold Mortgagee shall have the right, but not the
obligation, to cure any default by DDA or Operating Tenant under this Lease (and DDA hereby
agrees Registered Leasehold Mortgagee shall have the right, but not the obligation, to cure any
default by Operating Tenant under the Sublease). The Registered Leasehold Mortgagee shall
have a period of twenty (20) Business Days with respect to the nonpayment of rent or any other
amount payable by Operating Tenant under this Lease (or the Sublease) beyond any cure period
expressly provided to Operating Tenant herein, or, ninety (90) days with respect to any other
Event of Default by Operating Tenant beyond any cure period expressly provided to Operating
Tenant herein, in which to cure or cause to be cured any such Event of Default; provided
however, in the event that any such default cannot, with reasonable diligence, be cured within
such ninety (90) day period, such longer time as may be required to complete such cure,
provided such Registered Leasehold Mortgagee commits in writing to Landlord (and if the DDA
Lease is in effect, commits to DDA) to cure such default and such Registered Leasehold
Mortgagee promptly commences and diligently pursues such cure to completion. Landlord (and
if applicable, DDA) shall accept any such performance by a Registered Leasehold Mortgagee as
though the same had been done or performed by Operating Tenant. Landlord hereby
acknowledges and agrees that AFB&T, a division of Synovus Bank, a Georgia banking
corporation (also known as Synovus Bank), has complied with the requirements of paragraph
7.1.4 hereof, is the "Registered Leasehold Mortgagee" and its Leasehold Mortgage (and any
amendments and/or modifications thereof) is the "Registered Leasehold Mortgage" as of the date
of this Lease, and its address for purposes hereof is: AFB&T, a division of Synovus Bank, Attn:
Mac McKnight, 1148 Broadway, P.O. Box 120, Columbus, Georgia 31902, with a copy to
AFB&T, a division of Synovus Bank, Attn: Mac McKnight, 150 West Hancock Avenue (P.O.
Box 1747), Athens, Georgia 30603.
18.3 Leasehold Mortgagee's Obtaining of Possession. If a Registered Leasehold
Mortgagee cannot cure any such default as contemplated in 18.2 above without having taken
over possession of the Premises by a receiver or otherwise through enforcement of the remedies
under its Leasehold Mortgage, then neither Landlord nor DDA shall exercise any (if any) right
is has to terminate this Lease (or in the case of DDA, the Sublease) by reason of any Event of
Default which is not curable by the payment of money (which the parties agree includes, without
limitation, any violation of the Public Use Requirement) and which by its nature may only be
cured by the Registered Leasehold Mortgagee's taking possession of the Premises and the
Improvements, or by reason of any default that is personal to Operating Tenant (e.g., bankruptcy,
breach of any use requirement etc.) which cannot be cured by the Registered Leasehold
Mortgagee, in each case as long as the Registered Leasehold Mortgagee (a) within the time
allotted for Registered Leasehold Mortgagee's cure under Section 18.2 above, commits to
Landlord and/or DDA in writing that it shall proceed promptly and diligently to prosecute its
rights and remedies under and in respect of its Registered Leasehold Mortgage in order to obtain
possession of the Premises and the Improvements and obtain the Leasehold Estate in and to the
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Premises by foreclosure or otherwise, and to thereafter cure such Event of Default (to the extent
same are susceptible of cure) that were the grounds for the termination of this Lease, and (b)
thereafter does so within one hundred eighty (180) days of such written commitment (or such
longer period as is required if such obtaining of possession is restricted during the Recapture
Period, including, without limitation, any restriction in any subordination, non-disturbance or
attornment agreement entered into by Landlord, Operating Tenant, DDA, Registered Leasehold
Mortgagee and the investor in Borrower acquiring the federal Historic Tax Credits (regardless of
whether such Recapture Period could be terminated by paying any "recapture amount" to the
such investor; nothing herein obligates Registered Leasehold Mortgagee to pay any such
recapture amount to end the Recapture Period), or such longer time as may be reasonably
necessary under the circumstances so long as Registered Leasehold Mortgagee diligently and
continuously pursues the same to completion (provided, however, that any default that is
personal to Operating Tenant and cannot be cured by the Registered Leasehold Mortgagee shall
be deemed waived upon the Registered Leasehold Mortgagee taking possession of the Premises
and Improvements and foreclosing or accepting a deed in lieu of foreclosure as aforesaid). If a
Registered Leasehold Mortgagee succeeds to the interest of Operating Tenant, then for so long as
such Registered Leasehold Mortgagee is the "Operating Tenant" hereunder, the Registered
Leasehold Mortgagee's liability hereunder shall be limited to its interest in the Premises and
when the Registered Leasehold Mortgagee disposes of its interest in the Premises, the Registered
Leasehold Mortgagee shall be relieved of any further liability to Landlord and/or DDA with
respect to this Lease.
18.4 Termination of Lease;New Lease.
(a) If the Lease or the Sublease is to be terminated or surrendered prior to the
expiration date of the Term for whatever reason, the Landlord will so notify the Registered
Leasehold Mortgagee in writing, and, at the option of the Registered Leasehold Mortgagee,
Landlord and DDA (if the DDA Lease remains in effect) hereby agrees to enter into a new lease
of the Premises and as applicable, the Property with such Registered Leasehold Mortgagee (or its
assignee, designee or nominee) for the remainder of the original stated Term of this Lease at the
rent and upon substantially all of the covenants, agreements, terms, provisions and limitations of
this Lease and the Sublease but with such modifications as may be reasonably necessary or
appropriate to reflect the terms of this Section 18.4 and changes in the factual circumstances
reflected herein (the "New Lease"), effective as of the date of such termination, but only if such
Registered Leasehold Mortgagee commits in writing to Landlord and DDA (if the DDA Lease
remains in effect), in a written notice delivered to Landlord, within ninety (90) days after
Landlord delivers the termination notice to such Registered Leasehold Mortgagee, that the
Registered Leasehold Mortgagee (or its assignee, designee or nominee) will enter into a New
Lease).
(b) If Landlord, the DDA (if the DDA Lease remains in effect) and Registered
Leasehold Mortgagee, or its nominee, assignee or designee (the "New Operating Tenant"), enter
into a New Lease pursuant to this Section 18.4, any interest of the prior Operating Tenant in the
Improvements that reverted to Landlord or DDA upon termination of this Lease shall be deemed
the property of the New Operating Tenant under the New Lease on and subject to the terms and
provisions of the New Lease, to the same extent as the prior Operating Tenant's interest therein
under this Lease and subject to the Landlord's reversionary interest therein and thereto.
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(c) Nothing contained in this Section 18.4 shall be deemed to limit or affect
Landlord's interest in and to such property existing upon the expiration of the Term of the New
Lease. The provisions of this Section 18.4 shall survive the termination of this Lease and shall
continue in full force and effect thereafter to the same extent as if this Section 18.4 were a
separate and independent contract made by Landlord, DDA (if the DDA Lease remains in effect)
and the Registered Leasehold Mortgagee, and (provided that the Registered Leasehold
Mortgagee shall have affirmed in writing its intent to enter into (or have its assignee, designee or
assignee enter into) and be bound by a New Lease) from the effective date of such termination of
this Lease to the date of execution and delivery of the New Lease, the Registered Leasehold
Mortgagee (or its assignee, designee or nominee) may use and enjoy the Leasehold Estate
created by this Lease and the Improvements without hindrance by Landlord or DDA, but only on
and subject to the terms and provisions of this Lease (and the Sublease contained herein). Any
Fee Mortgage (and related fee loan documents) existing as of the date of execution of any New
Lease shall continue to constitute a collateral assignment of Landlord's interest in such New
Lease (and such New Lease shall maintain the benefits and rights under any SNDA that existed
with respect to this Lease as a replacement of this Lease), however, if requested by the New
Operating Tenant, the existing Fee Mortgagee, DDA (if the DDA Lease remains in effect) and
Landlord shall enter into a SNDA with respect to the New Lease.
(d) Intentionally Omitted.
(e) If a Registered Leasehold Mortgagee enters into a New Lease with Landlord
directly under this Section 18.4, then for so long as Registered Leasehold Mortgagee is the
"Operating Tenant" thereunder, the Registered Leasehold Mortgagee's liability under the New
Lease shall be limited to its interest in the Premises, and when the Registered Leasehold
Mortgagee disposes of its interest in the Premises, the Registered Leasehold Mortgagee shall be
relieved of any further liability to Landlord or DDA with respect to such New Lease. The
restrictions contained in this Lease on the assignment or transfer of Operating Tenant's interest
in this Lease shall not apply to the assignment or transfer of such Registered Leasehold
Mortgagee's interest in such a New Lease, except during the Recapture Period, the New
Operating Tenant shall not be a person that would cause a recapture or loss of all or a portion of
the Historic Tax Credits.
18.5 Rejection by Bankruptcy Trustee; New Lease.
(a) If this Lease (or the Sublease contained herein) is rejected or disaffirmed pursuant
to any bankruptcy law or proceeding or other similar law or proceedings affecting creditors'
rights generally, Landlord and DDA (if applicable) shall, if timely requested to do so by a
Registered Leasehold Mortgagee as provided herein, enter into a New Lease of the Premises and
as applicable, the Property with the Registered Leasehold Mortgagee (or its assignee, designee or
nominee) not later than sixty (60) days after the Registered Leasehold Mortgagee delivers to
Landlord its written request therefor, which New Lease shall be effective as of the date of such
rejection or disaffirmance, but the Landlord will be obligated to do so only if such Registered
Leasehold Mortgagee commits in writing to Landlord, in a written notice delivered to Landlord,
within ninety (90) days after the effective date that Registered Leasehold Mortgagee receives
written notice of such rejection or disaffirmance, as the case may be, that the Registered
Leasehold Mortgagee (or its assignee, designee or nominee) will enter into a New Lease and in
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such case, such New Lease will be entered promptly after such commitment is sent by the
Registered Leasehold Mortgagee and in substantially the same for as the Lease for the
remaining term of this Lease.
(b) Notwithstanding anything to the contrary contained herein, if Landlord, DDA (if
applicable) and a Registered Leasehold Mortgagee (or its assignee, designee or nominee), as a
"New Operating Tenant", enter into a New Lease pursuant to this Section 18.5, any interest of
the prior Operating Tenant in the Improvements which reverts to Landlord upon the termination
of this Lease shall be deemed the property of the New Operating Tenant under the New Lease on
and subject to the terms and provisions of the New Lease, to the same extent as the interest
therein of the prior Operating Tenant under this Lease, subject to the Landlord's reversionary
interest therein and thereto.
(c) Nothing contained in this Section 18.5 shall be deemed to limit or affect
Landlord's interest in and to such property existing upon the expiration of the Term of the New
Lease. The provisions of this Section 18.5 shall survive the rejection or disaffirmance of this
Lease (or Sublease) and shall continue in full force and effect thereafter to the same extent as if
this Section 18.5 were a separate and independent contract made by Landlord, DDA and the
Registered Leasehold Mortgagee, and (provided that the Registered Leasehold Mortgagee shall
have affirmed in writing its intent to enter into (or have its assignee, designee or nominee enter
into) and be bound by a New Lease) from the effective date of such rejection or disaffirmance of
this Lease to the date of execution and delivery of the New Lease, the Registered Leasehold
Mortgagee (or its assignee, designee or nominee) may use and enjoy the Leasehold Estate
created by this Lease without hindrance by Landlord or DDA, but only on and subject to the
terms and provisions of this Lease. Any Fee Mortgage (and related fee loan documents) existing
as of the date of execution of any New Lease shall continue to constitute a collateral assignment
of Landlord's interest in such New Lease (and such New Lease shall maintain the benefits and
rights under any SNDA that existed with respect to this Lease as a replacement of this Lease),
however, if requested by the New Operating Tenant, the existing Fee Mortgagee, DDA (if the
DDA Lease remains in effect) and Landlord shall enter into a SNDA with respect to the New
Lease.
(d) Intentionally Omitted.
(e) If a Registered Leasehold Mortgagee enters into a New Lease with Landlord
directly under this Section 18.5, then for so long as Registered Leasehold Mortgagee is the "New
Operating Tenant" thereunder, Registered Leasehold Mortgagee's liability under the New Lease
shall be limited to its interest in the Premises and when the Registered Leasehold Mortgagee
disposes of its interest in the Premises, the Registered Leasehold Mortgagee shall be relieved of
any further liability to Landlord with respect to such New Lease. The restrictions contained in
this Lease on the assignment or transfer of operating tenant's interest in this Lease shall not
apply to the assignment or transfer of such Registered Leasehold Mortgagee's interest in such a
New Lease, except during the Recapture Period, the New Operating Tenant shall not be a person
that would cause a recapture or loss of all or a portion of the Historic Tax Credits.
18.6 Recognition by Landlord of Leasehold Mortgagee. If there is more than one
Leasehold Mortgagee, only the Registered Leasehold Mortgagee, to the exclusion of all other
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Leasehold Mortgagees, shall have the benefit of and right to exercise the leasehold lender
protections under this Section 18 and elsewhere in this Lease (including, without limitation, any
right to receive notices of default and termination, any right to grant consents or approvals, any
Leasehold Mortgagee cure rights, and the right to enter into a New Lease under Sections 18.4
and 18.5), unless such Registered Leasehold Mortgagee has designated in writing another
Leasehold Mortgagee to exercise such rights. As of the date hereof, Landlord and DDA and
Operating Tenant agree that AFB&T, a division of Synovus Bank shall be deemed to have the
rights as the Registered Leasehold Mortgagee hereunder.
18.7 Extension of Periods. Any cure or notice provisions provided in this Section 18
shall be tolled for the time period that the Registered Leasehold Mortgagee is prohibited from
exercising any rights afforded the Registered Leasehold Mortgagee hereunder or under the
Leasehold Mortgage, including, without limitation, if during the Recapture Period the Registered
Leasehold Mortgagee is prohibited or restricted from foreclosing or enforcing its rights under the
Registered Leasehold Mortgage pursuant to any subordination, non-disturbance and attornment
agreement entered into by, inter alia, Landlord, DDA, Operating Tenant, Fee Mortgagee (and/or
Registered Leasehold Mortgagee) and any investor in Operating Tenant acquiring the Historic Tax
Credits, such notice and cure periods of the Registered Leasehold Mortgagee shall be tolled (and nothing
herein shall obligate Registered Leasehold Mortgagee to pay any recapture amount to end such Recapture
Period).
18.8 Surrender. Operating Tenant may not cancel or surrender this Lease (including,
without limitation, the Sublease) without the prior written consent of Registered Leasehold
Mortgagee, and even with such consent, such Registered Leasehold Mortgagee shall maintain its
right to a New Lease as contemplated under this Section 18.
18.9 Amendments and Modifications. Landlord and DDA hereby agree that
references herein to any Registered Leasehold Mortgage shall apply to any amendments,
modifications, extensions and/or restatements thereof, and any such amendments, modifications,
extensions and/or restatements shall not require consent by DDA or Landlord.
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IN WITNESS WHEREOF, each party hereto has caused this Lease to be executed on
its behalf by its duly authorized representatives, to be made effective the day and year first above
written.
LANDLORD:
MILLER THEATER, LLC, a Georgia limited liability company
By:
DDA:
DOWNTOWN DEVELOPMENT AUTHORITY OF AUGUSTA,
GEORGIA
By:
OPERATING TENANT:
MT AUGUSTA PROPERTY, LLC, a Georgia limited liability
company
By:
EXHIBIT"A"
Property Description
ALL THAT TRACT or parcel of land, with improvements thereon, situate, lying and being in the
State of Georgia, County of Richmond and being shown and designated as Tract "A" on that certain plat
of survey prepared for Miller Theater, LLC by Cranston Engineering Group, P.C., dated September 4,
2013, and recorded in the Office of the Clerk of Superior Court of Richmond County, Georgia, in Plat
Book 10, page 24. Reference is hereby made to said plat for a more complete and accurate description as
to the metes, bounds and location of said property. Said property is known under the current system of
street numbering in August-Richmond County, Georgia as 708 Broad Street, Augusta,Georgia 30901.
Tax Map and Parcel No. 047-1-051-00-0
1
EXHIBIT B
Notice Addresses
Landlord:
Miller Theater, LLC
1301 Greene St; Suite 200
Augusta, GA 30901
Attn: President
DDA:
Downtown Development Authority of Augusta, Georgia
Augusta, GA
Attn:
Operating Tenant :
MT Augusta Property, LLC
1301 Greene St; Suite 200
Augusta, GA 30901
Attn: President
With copies to the following parties:
Augusta Symphony, Inc.
1301 Greene St; Suite 200
Augusta, GA 30901
Attn: Executive Director
00930167-2