LOAN CURE RIGHTS AGREEMENT THIS LOAN CURE RIGHTS AGREEMENT, dated as of the day of, 201_, between CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth of Virginia ( Landlord ), a grantor for purposes of indexing; UNITED STATES MANAGEMENT, LLC, a Delaware limited liability company ( Tenant ), a grantee for purposes of indexing; and, a ( Leasehold Mortgagee ), a grantee for purposes of indexing. RECITALS: R-1. Landlord and Tenant are parties to a certain Deed of Lease (the Arena Lease ) dated, 201_, a memorandum of which is being recorded simultaneously herewith and [immediately] prior hereto, pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord, a certain parcel of land (the Premises ) located in the City of Virginia Beach, Virginia, which Premises is more particularly described on Exhibit A to this Agreement. R-2. Landlord (as City ) and Tenant (as Developer ) are parties to a certain Development Agreement dated, 201_ (the Development Agreement ) relating to the development of the Arena Project, including the construction, operation and maintenance of the Arena on the Premises. R-3. Leasehold Mortgagee intends to make a [$170,000,000.00] loan (the Loan ) to Tenant for the development and construction of the Arena Project, which will be evidenced by a certain note (the Note ) made by Tenant and secured by a certain deed of trust ( Deed of Trust ), encumbering, among other things, Tenant s Leasehold Estate under the Arena Lease to be recorded simultaneously herewith and [immediately] subsequent hereto, together with the other documents (collectively with the Note and Deed of Trust, the Loan Documents ) more particularly described on Exhibit B to this Agreement. R-4. Landlord, Tenant and Leasehold Mortgagee (each individually a Party, and collectively the Parties ), desire to enter into this Agreement to memorialize their understanding and agreement with respect to matters relating to the Transaction Documents and the Loan Documents and the transactions evidenced and contemplated thereby. NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, and in order to induce Leasehold Mortgagee to make the Loan and induce Landlord to enter into the Arena Lease, Development Agreement and other Transaction Documents, the Parties hereby agree as follows: 1. Definitions. For purposes of this Agreement, unless otherwise defined to the contrary in this Agreement, the capitalized terms used in this Agreement shall have the corresponding meanings specified for such items in the attached Appendix 1 which is incorporated GPIN: 1 Prepared by: Stephen R. Davis, Esquire Willcox & Savage, PC 222 Central Park Avenue, #1500 Virginia Beach, VA 23462
into this Agreement by reference and made a part hereof. Additionally, the rules of usage set forth in Appendix 1 shall apply to this Agreement. 2. Landlord Certifications. Landlord hereby certifies to Leasehold Mortgagee and agrees with Leasehold Mortgagee as follows: (a) Landlord is the owner of the fee simple interest in the Premises and the lessor s interest under the Arena Lease. (b) The Arena Lease is in full force and effect and has not been modified or amended. The Arena Lease represents the complete agreement between Landlord and Tenant with respect to Tenant s lease of the Premises, and any options or rights of first refusal, termination, renewal or extension are contained in the Arena Lease or Development Agreement. (c) All rent payable by Tenant to Landlord under the Arena Lease has been paid in full for the entire Term of the Arena Lease. (d) No notice of default under the Arena Lease has been given by Landlord or Tenant which has not been cured or waived, and, to the best knowledge of Landlord, no default exists on the part of Tenant or Landlord under the Arena Lease, and no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default by Tenant or Landlord thereunder. Tenant has not asserted in writing to Landlord any defense, set-offs, basis for withholding of rent, claims or counterclaims against Landlord for any failure of performance of any terms of the Arena Lease. (e) Leasehold Mortgagee is approved as an Institutional Lender and Leasehold Mortgagee under the Transaction Documents, and is approved as a participating lender for the Construction Loan pursuant to Section 4.3 of the Development Agreement. The Loan evidenced and secured by the Note and Deed of Trust constitutes the Construction Loan under the Development Agreement satisfying the requirements of the terms of Section 4.3 of the Development Agreement. 3. Arena Lease: Landlord hereby recognizes Leasehold Mortgagee as a Leasehold Mortgagee under the Arena Lease, entitled to all rights, notices and protections provided to Leasehold Mortgagees pursuant to the Arena Lease. Leasehold Mortgagee s address for Notice purposes in accordance with the Arena Lease and this Agreement is as follows: Leasehold Mortgagee: 2
4. Development Agreement. Landlord and Leasehold Mortgagee covenant and agree that Landlord shall have all obligations, rights and benefits of City and Leasehold Mortgagee shall have all obligations, rights and benefits of Construction Lender under the Development Agreement, including but not limited to the obligations, rights and benefits under Sections 4.3, 6.6, 8.1(e)-(g) and 8.3 of the Development Agreement. 5. Loan Documents. Landlord and Leasehold Mortgagee covenant and agree that Landlord shall have all obligations, rights and benefits of City and Leasehold Mortgagee shall have all obligations, rights and benefits of Lender under the Loan Documents, including but not limited to the obligations, rights and benefits under Sections of the. [NOTE: To be completed and revised upon review of Loan Documents. This assumes that the loan purchase and assumption rights and other cure rights set forth in the Development Agreement will be contained in the Loan Documents and can simply be cross-referenced here. If not, these specific provisions will need to be set forth.] 6. Conditional Assignments. Pursuant to the Conditional Assignments, Tenant has assigned to Landlord all Contracts and Plans as necessary for completion of construction of the Developer Improvements. Landlord acknowledges and agrees that the Conditional Assignments are subject and subordinate to the rights of the Leasehold Mortgagee under the Loan Documents, and Leasehold Mortgagee acknowledges that the Leasehold Mortgagee s rights in such Contracts and Plans are subject to the terms and conditions of the Transaction Documents. 7. Notices. Any notice required or permitted by or in connection with this Agreement shall be in writing and shall be made by email, facsimile or by hand delivery, or by Federal Express or other similar nationally recognized delivery service, or by certified mail, return receipt requested, addressed to the respective parties at the appropriate address set forth below (or to such other address as may be hereafter specified by written notice by the respective parties given in compliance with this Section). If notice is tendered pursuant to this Section and is refused, or intentionally evaded by the intended recipient thereof, the notice, nevertheless, shall be considered to have been given and shall be effective as of the date given as herein provided. Notice in the manner required herein shall be effective if given by any Party s attorney. To Landlord: With a copy to: City Manager City of Virginia Beach Municipal Center Virginia Beach, VA 23456 9001 Facsimile: 757/ 427 5626 Email: dougsmith@vbgov.com City Attorney 3
City of Virginia Beach Municipal Center Virginia Beach, VA 23456 9001 Facsimile: 757/ 385-1167 Email: MStiles@vbgov.com And with a copy to: Willcox & Savage, P.C. Attn: Stephen R. Davis, Esquire 222 Central Park Avenue, Suite 1500 Virginia Beach, VA 23462 Facsimile: 757/628-5659 Email: SDavis@wilsav.com To Tenant: United States Management, LLC Andrea Kilmer, CEO United States Management, LLC 3333-24 Virginia Beach Boulevard Virginia Beach, VA 23452 Email: AKilmer@esgco.com With a copy to: Jay F. Wilks, Esquire Wilks, Alper, Harwood & McIntyre, P.C. 468 Viking Drive, Suite 200 Virginia Beach, VA 23452 Email: JWIlks@wahlaw.com To Leasehold Mortgagee: With a copy to: 4
8. Successors in Interest. This Agreement will be binding on and inure to the benefit of the Parties and their respective successors and assigns. 9. Modification and Waiver. No modification or waiver of any provision of this Agreement, any exhibit or any document or instrument delivered in connection with the transactions contemplated by this Agreement, and no consent by any Party to any departure from the provisions of such documents, will be effective unless such modification or waiver is in writing and signed by a duly authorized representative of each Party. Any such modification or waiver will be effective only for the period and on the condition and for the specific instances and purposes set forth in such writing. No waiver of any condition, breach or default will be deemed to be a waiver of any subsequent condition, breach or default. No omission or delay by any Party in exercising any right or power under this Agreement, any exhibits or any documents or instruments relating to the transactions contemplated by this Agreement will impair such right or power or be construed to be a waiver of any default or any acquiescence therein. 10. Headings. The Section headings contained in this Agreement are for the convenience of the Parties only and are not a part of the substantive agreement between the Parties, nor will such headings be used in the interpretation or construction of any of the provisions of this Agreement. 11. City Obligations Subject to Appropriation. Each and every obligation of Landlord under this Agreement and the Transaction Documents requiring the transfer or expenditure of money shall be subject to annual appropriation by the City Council in the ordinary course of the budgetary and appropriations process, as required by Applicable Law. Landlord will cause requisite procedural steps to be taken by the City Manager with regard to each specified funding and insure that the appropriation will be recommended annually to the City Council for inclusion in the budget of the City. 12. Applicable Law; Forum; Mediation. This Agreement will be construed, enforced and performed in accordance with the laws of the Commonwealth of Virginia, without regard to principles of conflicts of laws. All actions relating to this Agreement shall be instituted and litigated in the Virginia Beach Circuit Court or the United States District Court for the Eastern District of Virginia, Norfolk Division. In the event of a dispute under this Agreement, either Party, by written notice, can demand mediation, and, in such event, the Parties agree to mediate any dispute in good faith and on an expedited basis. In the event neither Party demands mediation, or in the event the Parties are unable to resolve the dispute after good faith mediation, the Parties agree to pursue litigation expeditiously and without undue delay. 13. Counterparts. This Agreement may be executed in any number of counterparts and all counterparts taken together will be deemed to constitute one and the same instrument. 5
[NOTE: If subordination required, restrictive covenants will be added to this Agreement (which will be recorded prior to the Deed of Trust) making the Development Agreement, the Cooperation Agreement and the following provisions of the Arena Lease binding upon the Premises subsequent to any foreclosure: Sections 1(b) - (g), 3(b), 4-6, 8, 10-12, 13(d) (e), 14, 15 (except Section 15(d)), 25, 28 and 36 and any associated exhibits. The provisions will be modified with respect to fee ownership versus leasehold issues. For example, Section 15 (except Section 15(d)) of the Arena Lease would be modified to apply to a sale or lease of all or substantially all of the Premises and/or Improvements instead of to an assignment or subletting under the Arena Lease.] [Signature Pages Follow] 6
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under seal as of the day of, 201_. LANDLORD: CITY OF VIRGINIA BEACH, a municipal corporation of the Commonwealth of Virginia By: (SEAL) City Manager/Authorized Designee of the City Manager Attest: City Clerk COMMONWEALTH OF CITY/COUNTY OF, to-wit: The foregoing instrument was acknowledged before me this day of, 201_, by, as, of the City of Virginia Beach, a municipal corporation of the Commonwealth of Virginia, for and on behalf of the City. My Commission Expires: Registration No.: Notary Public [Signatures Continue on the Following Pages] 7
[Signature Page to Loan Cure Rights Agreement] TENANT: UNITED STATES MANAGEMENT, LLC, a Delaware limited liability company By: (SEAL) Name: Title: STATE OF CITY/COUNTY OF, to-wit: The foregoing instrument was acknowledged before me this day of, 201_, by, as of United States Management, LLC, a Delaware limited liability company, for and on behalf of the company. My Commission Expires: Registration No.: Notary Public [Signatures Continue on the Following Page] 8
[Signature Page to Loan Cure Rights Agreement] LEASEHOLD MORTGAGEE: By: (SEAL) Name: Title: STATE OF CITY/COUNTY OF, to-wit: The foregoing instrument was acknowledged before me this day of, 201_, by, as of by and on behalf of said national banking association. My Commission Expires: Registration No.: Notary Public 9
EXHIBIT A Description of Premises
EXHIBIT B Description of Loan Documents