Operating Leases. (a) (i) perform and observe in all material respects all of the covenants required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, under the respective Operating Leases in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Administrative Agent of any material default under any Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under any Operating Lease. (b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shall, without the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease. (c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect. (d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor. (e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor. (f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated. (g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto. (h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Operating Leases. (a) Borrowers shall (i) perform and observe the material obligations in all material respects all of the covenants which Borrowers are required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, perform under the respective Operating Leases in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunderLeases; (ii) promptly notify Administrative Agent of any enforce the material default obligations to be performed by the Operator under any the Operating Lease of which they become awareLeases; (iii) promptly deliver furnish to Administrative Agent any notice of default or termination received by any Borrower from any Operator, and any notice of default or termination given by any Borrower to any Operator under the Operating Lease; (iv) not collect any rents for more than one month in advance of the time when the same shall become due under the Operating Lease, except for bona fide Security Deposits; (v) not, except with Administrative Agent’s prior written consent, cancel or accept surrender or termination or assignment of any Operating Lease with respect to all or any portion of the Projects (subject to the release rights under Section 2.18 above); (vi) not, except with Administrative Agent’s prior written consent, modify or amend the Operating Lease (except for minor modifications and amendments entered into in the ordinary course of business, consistent with prudent property management practices, not affecting the economic terms or term of the Operating Lease); and (vii) to the extent any Operator requires Borrowers’ consent under any Operating Lease, not grant any such consent without Administrative Agent’s prior written consent. Any action in violation of clauses (v), (vi), and (vii) of this Section 4.3(b) shall be void at the election of Administrative Agent (after consultation with the Required Lenders). Borrowers will not suffer or permit any breach or default to occur in any of any Borrower’s obligations under any Operating Lease nor suffer or permit the same to terminate by reason of any failure of any Borrower to meet any requirement of any Operating Lease; provided, however, that any Borrower may terminate an Operating Lease to which it is a party and enter into a new Operating Lease on substantially the same terms with an Affiliate of the Borrowers that will operate only the related Project. In addition to the foregoing, the Borrowers shall promptly furnish to Administrative Agent (A) any notice of default or termination received by any Borrower from Operators and (B) a copy of any notice of default under any Operating Lease delivered or termination given by Borrowers to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under any Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shall, without the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable Operators under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating LeaseLeases.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Operating Leases. (a) Each Individual Property shall at all times be leased directly and exclusively by the Borrower to the applicable Tenant under the applicable Operating Lease (and not to any other Person under such Operating Lease or any replacement operating lease), and each Operating Lease shall be made subordinate to the Mortgage. Neither Borrower nor the Tenant thereunder shall terminate any Operating Lease or consent to the termination of any Operating Lease unless the following conditions are met: (i) perform and observe in all material respects prior to such termination of the Operating Lease, all of the covenants required Tenant’s rights, obligations, contracts or other agreements related to be performed each Individual Property are assigned to Borrower, including, without limitation if applicable, all of the Tenant’s right, title and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, under the respective Operating Leases interest in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunder; the applicable Management Agreement, if any, and the Manager has agreed in writing to such assignment, (ii) promptly notify Administrative Agent written notice of any material default under any the termination of the Operating Lease of which they become aware; is delivered to Lender, and (iii) promptly deliver to Administrative Agent a copy such termination of any notice of default under any the Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lesseeshall not materially adversely affect the continuous operation of each Individual Property consistent with single tenant retail stores of similar quality nor affect the validity and enforceability of the applicable Management Agreement, if any; (iv) promptly give notice to Administrative Agent of any notice or information provided, however, that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an the Operating Lease shall be terminated or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce with respect to any Individual Property which has been released from the performance and observance in all material respects of all lien of the covenants required Mortgage pursuant to be performed and observed by a Subsidiary Guarantor Owner the terms of Section 2.05 hereof or a Subsidiary Guarantor Operating Lessee, as applicable, under any Operating Leasesubstituted pursuant to Section 2.06 hereof.
(b) Assure that no Subsidiary Guarantor Owner Borrower shall not, and shall cause Tenant not to, pledge, transfer, sublease, assign, mortgage, encumber, or a Subsidiary Guarantor allow to be encumbered its interest in the Operating Lessee shallLease or any interest therein without the prior written consent of the Lender, except for any sublease, license or other occupancy agreement entered into by the Tenant in the ordinary course of business to the extent such sublease, license or other occupancy agreement is permitted by the terms of the Operating Lease. Borrower shall not, and shall cause the Tenant not to, consent to any assignment by any assignee or sublessee of such assignee’s or sublessee’s interest in the Operating Lease or its rights and interests thereunder.
(c) Borrower shall not, and shall cause Tenant under any Operating Lease not to, without the prior written consent of Administrative Agent, such consent Lender (not to be unreasonably withheld, conditioned, conditioned or delayed: (i) surrenderrenew, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter intoextend, amend, modify, waive any provisions of, or increase or terminate, reduce the rents payable under, any Operating Lease; provided thataccept a surrender of, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend shorten the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to timeof, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, except with respect to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions termination of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, applicable to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Individual Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate which has been released from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien lien of the Mortgage on such Borrowing Base Property and pursuant to the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event terms of the bankruptcy, reorganization Section 2.05 hereof or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights substituted pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated2.06 hereof.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Loan Agreement (Bon Ton Stores Inc)
Operating Leases. (a) Each Loan Party shall (i) perform and observe in all material respects as and when required thereunder all of the covenants required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, it under the respective Operating Leases in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunderLease; (ii) promptly notify Administrative Agent of any material default (beyond any applicable notice, grace or cure period) under any the Operating Lease of which they become awareLease; and (iii) promptly deliver to Administrative Agent (without duplication) a copy of any notice of default or other material notice under any the Operating Lease delivered to or from a Subsidiary Guarantor Loan Party.
(b) If at any time, (i) Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner shall become insolvent or a Subsidiary Guarantor Operating Lesseedebtor in a bankruptcy proceeding or (ii) Agent or its designee has taken title to the Premises by foreclosure, as applicabledeed in lieu, under or assignment in lieu of foreclosure, has become a mortgagee-in-possession or has otherwise taken title to the Premises, Agent shall have the absolute right to (and each Loan Party shall reasonably cooperate and not in any way hinder, delay or otherwise interfere with Agent’s right to), immediately terminate the Operating Lease.
(bc) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallLoan Parties shall not, without the prior written consent of Administrative Agent, such which consent shall not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any the Operating Lease or otherwise replace a Subsidiary Guarantor the Operating Lessee or enter into any other operating lease with respect to the Premises; provided, however, at the end of the term of the Operating Lease, Borrower may renew the Operating Lease or enter into a replacement Operating Lease with Operating Lessee at rent mutually determined by Loan Parties pursuant to the Internal Revenue Code (if applicable) and otherwise on substantially the same terms as the expiring Operating Lease (but Agent shall have the right to approve any Borrowing Base Property; material change thereto) or (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Operating Leases. (a) Without the prior written consent of Agent, Borrowers shall not: (i) perform enter into any Leases other than the Operating Leases and observe the Resident Agreements; (ii) modify, amend, renew, surrender, terminate, consent to a sublease of, consent to a transfer of, xxxxx rent or other payments due under or otherwise grant any financial or other concession under any Lease except for immaterial, non-monetary modifications; (iii) accept any rental payment under any Leases more than one month in advance of its due date; or (iv) enter into any ground lease of any Project.
(b) Borrowers shall, and shall cause Operator to provide Agent with a copy of all material respects Leases (excluding Resident Agreements) no less than ten (10) days prior to execution of such Leases and such Leases shall be on the form of lease reasonably approved by Agent (which form shall include an automatic attornment provision whereby, in the event of a foreclosure, the tenant automatically shall recognize the successor owner as landlord and such tenant shall have no right to terminate its lease in the event of such foreclosure).
(c) Any Operating Lease shall at all times be in form and substance reasonably satisfactory to Agent; provided that Lender acknowledge and agrees that the Operating Lease in effect as of the covenants required date hereof is approved by Agent. The Operating Lease shall at all times require the tenant thereunder to furnish to Borrowers such information as Borrowers shall require to fulfill their obligations to Agent under this Agreement.
(d) Borrowers shall not suffer or knowingly permit any breach or default to occur in any of Borrowers’ obligations under any of the Leases nor suffer or knowingly permit the same to terminate by reason of any failure of Borrowers to meet any requirement of any Lease. Borrowers shall notify Agent promptly in writing in the event an Operator commits a default under an Operating Lease. CHICAGO/#2321168.11 Borrowers shall notify Agent promptly in writing in the event a tenant other than an Operator commits a material default under a Lease.
(e) Borrowers shall not suffer or knowingly permit any breach or default by an Operator to occur in any of the Operator’s obligations under any Resident Agreement nor suffer or permit the same to terminate by reason of any failure of the Operator to meet any requirement of any Resident Agreement.
(f) If the Operator for a Project is a Person separate and distinct from the Borrowers, then the Operator’s occupancy of the Project shall at all times be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, under pursuant to the respective Operating Leases approved by Agent. Each such Operating Lease shall provide Agent the right to terminate the occupancy rights of the Operator upon Agent (or its designee) or any receiver taking possession of the applicable Project or acquisition of the applicable Project through foreclosure, a deed in lieu of foreclosure, UCC sale or otherwise. In the event a Operator loses its license to operate a Project, Borrowers shall act in good faith to promptly replace such Operator or assist such Operator to reinstate such license in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Administrative Agent of any material default under any Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under any applicable Project Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shall, without the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Operating Leases. (a) Subject to the provisions of Section 7.6 hereof, Borrower shall cause Mortgage Loan Borrower and Maryland Owner to (i) cause the hotel located on each Individual Property to be operated pursuant to the applicable Operating Lease; (ii) promptly perform and and/or observe in all material respects all of the covenants material covenants, agreements and obligations required to be performed and observed by each Subsidiary Guarantor Individual Property Owner and each Subsidiary Guarantor and/or Operating Lessee, respectively, Lessee under the respective applicable Operating Leases in accordance with the terms thereof Lease and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (iiiii) promptly notify Administrative Agent Lender of any material default under any the Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating LesseeLease; (iv) promptly give notice deliver to Administrative Agent Lender a copy of any notice or information that a Subsidiary Guarantor each financial statement, business plan, capital expenditures plan, notice, report and estimate received by Individual Property Owner receives which indicates that a Subsidiary Guarantor and/or Operating Lessee is terminating an under the Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base PropertyLease; and (v) promptly enforce in a commercially reasonable manner the performance and observance in all material respects of all of the covenants and agreements required to be performed and and/or observed by Operating Lessee under the Operating Lease; (vi) deliver irrevocable written instructions to the Manager of each CIGNA Mortgage Loan Property, to cause all revenues, after payment of CIGNA Mortgage Loan Debt Service, amounts reserved or paid under the applicable Management Agreement and amounts which are required to be reserved under the applicable CIGNA Mortgage Loan Documents, to be delivered directly by such Manager to the Mezzanine Cash Management Account, unless and until Manager or CIGNA Mortgage Loan Borrower receives written notice from CIGNA Mortgage Lender of the occurrence of a Subsidiary Guarantor Mortgage Loan Default under the applicable CIGNA Mortgage Loan Documents; and (vii) cause Operating Lessee to conduct its business and operations in accordance with the terms of the Loan Documents and the applicable Mortgage Loan Documents and not allow or permit Operating Lessee to take any of the actions that Borrower, any Other Senior Mezzanine Borrower, any Mortgage Loan Borrower or Maryland Owner is prohibited from taking pursuant to the terms of the Loan Documents, the Other Senior Mezzanine Loan Documents or a Subsidiary Guarantor Operating Lesseethe Mortgage Loan Documents, as applicable, under any Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallSubject to the provisions of Section 7.6, without the Lender’s prior written consent of Administrative Agentconsent, such consent not to be unreasonably withheld, conditioned, Borrower shall not permit any Mortgage Loan Borrower or delayed: Maryland Owner to (ia) surrender, terminate or cancel any an Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base PropertyLease; (iib) reduce or consent to the reduction of the term of any the Operating Lease; or (iiic) enter into, amend, modify, waive any provisions of, or increase or reduce consent to the rents under, increase of the amount of rent or any other charges under the Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5d) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration waive or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from release any of its obligations under this Agreement and the other Loan DocumentsBorrower’s, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, Other Senior Mezzanine Borrower’s or any portion thereof, under their Operating Lease, Mortgage Loan Borrower’s or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Maryland Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable and remedies under the Operating Lease; or (e) waive, pursuant to Section 365(h)(2) of the Bankruptcy Codeexcuse, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of condone or in any Subsidiary Guarantor Owner way release or Subsidiary Guarantor discharge any Operating Lessee any renewal of or extension options under any from Operating Lease if such Subsidiary Guarantor Owner Lessee’s material obligations, covenants and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option conditions under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Operating Leases. (a) Subject to the provisions of Section 7.6 hereof, Borrower shall cause Mortgage Loan Borrower and Maryland Owner to (i) cause the hotel located on each Individual Property to be operated pursuant to the applicable Operating Lease; (ii) promptly perform and and/or observe in all material respects all of the covenants material covenants, agreements and obligations required to be performed and observed by each Subsidiary Guarantor Individual Property Owner and each Subsidiary Guarantor and/or Operating Lessee, respectively, Lessee under the respective applicable Operating Leases in accordance with the terms thereof Lease and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (iiiii) promptly notify Administrative Agent Lender of any material default under any the Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating LesseeLease; (iv) promptly give notice deliver to Administrative Agent Lender a copy of any notice or information that a Subsidiary Guarantor each financial statement, business plan, capital expenditures plan, notice, report and estimate received by Individual Property Owner receives which indicates that a Subsidiary Guarantor and/or Operating Lessee is terminating an under the Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base PropertyLease; and (v) promptly enforce in a commercially reasonable manner the performance and observance in all material respects of all of the covenants and agreements required to be performed and and/or observed by Operating Lessee under the Operating Lease; (vi) deliver irrevocable written instructions to the Manager of each CIGNA Mortgage Loan Property, to cause all revenues after payment of CIGNA Mortgage Loan Debt Service, amounts reserved or paid under the applicable Management Agreement and amounts which are required to be reserved under the applicable CIGNA Mortgage Loan Documents, to be delivered directly by such Manager to the Mezzanine Cash Management Account, unless and until Manager or CIGNA Mortgage Loan Borrower receives written notice from CIGNA Mortgage Lender of the occurrence of a Subsidiary Guarantor Mortgage Loan Default under the applicable CIGNA Mortgage Loan Documents; and (vii) cause Operating Lessee to conduct its business and operations in accordance with the terms of the Loan Documents and the applicable Mortgage Loan Documents and not allow or permit Operating Lessee to take any of the actions that Borrower, Mezzanine 1 Borrower or any Mortgage Loan Borrower or Maryland Owner is prohibited from taking pursuant to the terms of the Loan Documents, the Mezzanine 1 Loan Documents or a Subsidiary Guarantor Operating Lesseethe Mortgage Loan Documents, as applicable, under any Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallSubject to the provisions of Section 7.6, without the Lender’s prior written consent of Administrative Agentconsent, such consent not to be unreasonably withheld, conditioned, Borrower shall not permit any Mortgage Loan Borrower or delayed: Maryland Owner to (ia) surrender, terminate or cancel any an Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base PropertyLease; (iib) reduce or consent to the reduction of the term of any the Operating Lease; or (iiic) enter into, amend, modify, waive any provisions of, or increase or reduce consent to the rents under, increase of the amount of rent or any other charges under the Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5d) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration waive or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from release any of its obligations under this Agreement and the other Loan DocumentsBorrower’s, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, Mezzanine 1 Borrower’s or any portion thereof, under their Operating Lease, Mortgage Loan Borrower’s or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Maryland Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable and remedies under the Operating Lease; or (e) waive, pursuant to Section 365(h)(2) of the Bankruptcy Codeexcuse, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of condone or in any Subsidiary Guarantor Owner way release or Subsidiary Guarantor discharge any Operating Lessee any renewal of or extension options under any from Operating Lease if such Subsidiary Guarantor Owner Lessee’s material obligations, covenants and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option conditions under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Operating Leases. (a) (i) perform Grantor has delivered a true, correct and observe complete schedule of the Operating Lease as of the date hereof, which accurately and completely sets forth in all material respects all respects, for such Operating Lease, the following (collectively, the "RENT ROLL"): the name and address of the covenants required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, under the respective Operating Leases in accordance tenant with the terms thereof name, title and do telephone number of the contact person of such tenant; the lease expiration date, extension and renewal provisions; the base rent and percentage rent payable; all things necessary to preserve additional rent and to keep unimpaired its material rights thereunderpass-through obligations; and the security deposit held thereunder and the location of such deposit.
(ii) promptly notify Administrative Agent The Operating Lease constitutes the legal, valid and binding obligation of any material Grantor and, to the knowledge of Grantor, is enforceable against the tenant thereof. No default exists, or with the passing of time or the giving of notice would exist under any Operating Lease of which they become aware; would, in the aggregate, have a Material Adverse Effect.
(iii) promptly deliver to Administrative Agent a copy of any notice of default No tenant under any the Operating Lease delivered to a Subsidiary Guarantor has, as of the date hereof, paid Rent more than thirty (30) days in advance, and the Rents under such Operating Lessee by a Subsidiary Guarantor Owner Lease have not been waived, released, or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; otherwise discharged or compromised.
(iv) promptly give notice Except as otherwise set forth in the Operating Lease, all work to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an be performed by Grantor under the Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; has been substantially performed, all contributions to be made by Grantor to the tenants thereunder have been made except for any held-back amounts, and all other conditions precedent to each such tenant's obligations thereunder have been satisfied.
(v) promptly enforce the performance and observance Except as previously disclosed to Beneficiary in all material respects of all of the covenants required writing, there are no options to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under terminate any Operating Lease.
(bvi) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shall, without Each tenant under the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter has entered into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent occupancy of the demised premises to the reduction extent required under the terms of its Operating Lease, and each such tenant is open and conducting business with the public in the demised premises.
(vii) Grantor has delivered to Beneficiary true, correct and complete copies of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments described in the rents payable under such Rent Roll.
(viii) The Operating Lease is in connection with such extension under such Operating Lease from time to timefull force and effect and (except as disclosed on the Rent Roll) has not been assigned, subject to satisfaction of all of the following terms and conditions: modified, supplemented or amended in any way.
(Aix) no Default has occurred and is then continuing; (B) the revised rent payable Each tenant under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in free from bankruptcy, reorganization or arrangement proceedings or a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, general assignment for the benefit of Lenders, as further security creditors.
(x) No Operating Lease provides any party with the right to obtain a lien or encumbrance upon the Trust Property superior to the lien of this Deed of Trust.
(xi) There are no Leases for the payment and performance any portion of the Obligations and observance of the terms, covenants and conditions of this Agreement and the Trust Property other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by than the Operating Lease or identified pursuant to terminate subparagraph (i) above. Grantor shall not enter into any Lease of any portion of the Trust Property other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent thereforGrantor's prior written consent.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Deed of Trust, Security Agreement, Assignment of Rents and Fixture Filing (Host Funding Inc)
Operating Leases. (a) Each Borrower Party shall (i) perform and observe in all material respects as and when required thereunder all of the covenants required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, it under the respective Operating Leases in accordance with the terms thereof and do all things necessary Lease to preserve and to keep unimpaired its material rights thereunderwhich it is a party; (ii) promptly notify Administrative Agent of any material default (beyond any applicable notice, grace or cure period) under any Operating Lease of which they become awareLease; and (iii) promptly deliver to Administrative Agent (without duplication) a copy of any notice of default or other material notice under any Operating Lease delivered to or from a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under any Operating LeaseBorrower Party.
(b) Assure that no Subsidiary Guarantor Owner If at any time, (i) any Operating Lessee shall become insolvent or a Subsidiary Guarantor debtor in a bankruptcy proceeding or (ii) Agent or its designee has taken title to a Property by foreclosure or deed in lieu (or assignment in lieu, with respect to the Xxxxxx Xxxxx Property) of foreclosure, has become a mortgagee-in-possession, has appointed a receiver with respect to a Property or has otherwise taken title to a Property, Agent shall have the absolute right to (and each Borrower Party shall reasonably cooperate and not in any way hinder, delay or otherwise interfere with Agent’s right to), immediately terminate the affected Operating Lessee shallLease under and in accordance with the terms of the applicable Subordination and Security Agreement.
(c) Except with respect to any Property which is the subject of a Release pursuant to Section 2.14 hereof, Borrower Parties shall not, without the prior written consent of Administrative Agent, such which consent shall not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor any Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; , provided, however, at the end of the term of the Operating Lease, Borrowers may renew any Operating Lease or enter into a replacement Operating Lease with the applicable Operating Lessee at a fair market rent required pursuant to the Internal Revenue Code (if applicable) or which Borrowers may establish using a transfer pricing report obtained from a Big 4 accounting firm, and otherwise on substantially the same terms as the expiring Operating Lease or (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Operating Leases. (a) Subject to the provisions of Section 7.6 hereof, Borrower shall cause Mortgage Loan Borrower and Maryland Owner to (i) cause the hotel located on each Individual Property to be operated pursuant to the applicable Operating Lease; (ii) promptly perform and and/or observe in all material respects all of the covenants material covenants, agreements and obligations required to be performed and observed by each Subsidiary Guarantor Individual Property Owner and each Subsidiary Guarantor and/or Operating Lessee, respectively, Lessee under the respective applicable Operating Leases in accordance with the terms thereof Lease and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (iiiii) promptly notify Administrative Agent Lender of any material default under any the Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating LesseeLease; (iv) promptly give notice deliver to Administrative Agent Lender a copy of any notice or information that a Subsidiary Guarantor each financial statement, business plan, capital expenditures plan, notice, report and estimate received by Individual Property Owner receives which indicates that a Subsidiary Guarantor and/or Operating Lessee is terminating an under the Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base PropertyLease; and (v) promptly enforce in a commercially reasonable manner the performance and observance in all material respects of all of the covenants and agreements required to be performed and and/or observed by Operating Lessee under the Operating Lease; (vi) deliver irrevocable written instructions to the Manager of each CIGNA Mortgage Loan Property, to cause all revenues, after payment of CIGNA Mortgage Loan Debt Service, amounts reserved or paid under the applicable Management Agreement and amounts which are required to be reserved under the applicable CIGNA Mortgage Loan Documents, to be delivered directly by such Manager to the Mezzanine Cash Management Account, unless and until Manager or CIGNA Mortgage Borrower receives written notice from CIGNA Mortgage Lender of the occurrence of a Subsidiary Guarantor Mortgage Loan Default under the applicable CIGNA Mortgage Loan Documents; and (vii) cause Operating Lessee to conduct its business and operations in accordance with the terms of the Loan Documents and the applicable Mortgage Loan Documents and not allow or permit Operating Lessee to take any of the actions that any Borrower, any Senior Mezzanine Borrower, any Mortgage Loan Borrower or Maryland Owner is prohibited from taking pursuant to the terms of the Loan Documents, the Senior Mezzanine Loan Documents or a Subsidiary Guarantor Operating Lesseethe Mortgage Loan Documents, as applicable, under any Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallSubject to the provisions of Section 7.6, without the Lender’s prior written consent of Administrative Agentconsent, such consent not to be unreasonably withheld, conditioned, Borrower shall not permit any Mortgage Loan Borrower or delayed: Maryland Owner to (ia) surrender, terminate or cancel any an Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base PropertyLease; (iib) reduce or consent to the reduction of the term of any the Operating Lease; or (iiic) enter into, amend, modify, waive any provisions of, or increase or reduce consent to the rents under, increase of the amount of rent or any other charges under the Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5d) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration waive or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from release any of its obligations under this Agreement and the other Loan DocumentsBorrower’s, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, Senior Mezzanine Borrower’s or any portion thereof, under their Operating Lease, Mortgage Loan Borrower’s or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Maryland Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable and remedies under the Operating Lease; or (e) waive, pursuant to Section 365(h)(2) of the Bankruptcy Codeexcuse, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of condone or in any Subsidiary Guarantor Owner way release or Subsidiary Guarantor discharge any Operating Lessee any renewal of or extension options under any from Operating Lease if such Subsidiary Guarantor Owner Lessee’s material obligations, covenants and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option conditions under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Operating Leases. (a) Subject to the provisions of Section 7.6 hereof, Borrower shall cause Mortgage Loan Borrower and Maryland Owner to (i) cause the hotel located on each Individual Property to be operated pursuant to the applicable Operating Lease; (ii) promptly perform and and/or observe in all material respects all of the covenants material covenants, agreements and obligations required to be performed and observed by each Subsidiary Guarantor Individual Property Owner and each Subsidiary Guarantor and/or Operating Lessee, respectively, Lessee under the respective applicable Operating Leases in accordance with the terms thereof Lease and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (iiiii) promptly notify Administrative Agent Lender of any material default under any the Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating LesseeLease; (iv) promptly give notice deliver to Administrative Agent Lender a copy of any notice or information that a Subsidiary Guarantor each financial statement, business plan, capital expenditures plan, notice, report and estimate received by Individual Property Owner receives which indicates that a Subsidiary Guarantor and/or Operating Lessee is terminating an under the Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base PropertyLease; and (v) promptly enforce in a commercially reasonable manner the performance and observance in all material respects of all of the covenants and agreements required to be performed and and/or observed by Operating Lessee under the Operating Lease; (vi) deliver irrevocable written instructions to the Manager of each CIGNA Mortgage Loan Property, to cause all revenues, after payment of CIGNA Mortgage Loan Debt Service, amounts reserved or paid under the applicable Management Agreement and amounts which are required to be reserved under the applicable CIGNA Mortgage Loan Documents, to be delivered directly by such Manager to the Mezzanine Cash Management Account, unless and until Manager or CIGNA Mortgage Loan Borrower receives written notice from CIGNA Mortgage Lender of the occurrence of a Subsidiary Guarantor Mortgage Loan Default under the applicable CIGNA Mortgage Loan Documents; and (vii) cause Operating Lessee to conduct its business and operations in accordance with the terms of the Loan Documents and the applicable Mortgage Loan Documents and not allow or permit Operating Lessee to take any of the actions that Borrower or any Mortgage Loan Borrower or Maryland Owner is prohibited from taking pursuant to the terms of the Loan Documents or a Subsidiary Guarantor Operating Lesseethe Mortgage Loan Documents, as applicable, under any Operating Lease.
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallSubject to the provisions of Section 7.6, without the Lender’s prior written consent of Administrative Agentconsent, such consent not to be unreasonably withheld, conditioned, Borrower shall not permit any Mortgage Loan Borrower or delayed: Maryland Owner to (ia) surrender, terminate or cancel any an Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base PropertyLease; (iib) reduce or consent to the reduction of the term of any the Operating Lease; or (iiic) enter into, amend, modify, waive any provisions of, or increase or reduce consent to the rents under, increase of the amount of rent or any other charges under the Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5d) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration waive or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from release any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, Borrower’s or any portion thereof, under their Operating Lease, Mortgage Loan Borrower’s or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Maryland Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable and remedies under the Operating Lease; or (e) waive, pursuant to Section 365(h)(2) of the Bankruptcy Codeexcuse, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of condone or in any Subsidiary Guarantor Owner way release or Subsidiary Guarantor discharge any Operating Lessee any renewal of or extension options under any from Operating Lease if such Subsidiary Guarantor Owner Lessee’s material obligations, covenants and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option conditions under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Mezzanine Loan Agreement (Ashford Hospitality Trust Inc)
Operating Leases. Neither Borrower nor any Subsidiary of the Borrower will enter into or permit to remain in effect any agreements to rent or lease (as lessee) any real or personal property (other than Capitalized Leases) for initial terms (including options to renew or extend any term, whether or not exercised) of more than one (1) year which in the aggregate (for the Borrower and all Subsidiaries of the Borrower) provide for payments in excess of $7,500,000.00 during any consecutive twelve-month (12-month) period.
18. In consideration of the amendments and agreements of Agent and Lenders as set forth herein, Borrower agrees to pay to Agent the fees set forth in that certain fee letter dated as of the date hereof. Agent shall pay each Bank from such amount received from Borrower the amendment fee agreed to between Agent and each such Lender as evidenced by letters from Agent to each such Lender, with Agent retaining the remaining portion of such amendment fee for its own account.
19. The agreements of Agent and the Lenders as set forth herein are expressly conditioned upon the following:
(a) (i) perform Execution by Borrower and observe in all material respects all Guarantors of this Agreement and each of the covenants required to be performed Amended and observed by each Subsidiary Guarantor Owner Restated Revolving Credit Notes and each Subsidiary Guarantor Operating Lessee, respectively, under the respective Operating Leases in accordance with the terms thereof Amended and do all things necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Administrative Agent of any material default under any Operating Lease of which they become aware; (iii) promptly deliver to Administrative Agent a copy of any notice of default under any Operating Lease delivered to a Subsidiary Guarantor Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, as applicable, under any Operating Lease.Restated Reducing Revolver Notes;
(b) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shall, without the prior written consent of Administrative Agent, such consent not to be unreasonably withheld, conditioned, or delayed: (i) surrender, terminate or cancel any Operating Lease or otherwise replace a Subsidiary Guarantor Operating Lessee or enter into any other operating lease with respect to any Borrowing Base Property; (ii) reduce or consent to the reduction Execution by Guarantors of the term Consent of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments Guarantors in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time form attached to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.Agreement;
(c) Assign Delivery to Administrative AgentAgent and Lenders of an opinion of Borrower's counsel in form and substance satisfactory to Agent and Lenders relating to the due execution, for the benefit of Lenders, as further security for the payment delivery and performance of the Obligations and observance of the terms, covenants and conditions enforceability of this Agreement and the other Loan DocumentsTransaction Documents and such other matters as Agent and Lenders may reasonably require; and
(d) Payment by Borrower to Agent of the amendment fee required under Paragraph 18 above.
20. Borrower hereby represents and warrants to Agent and to Lenders that:
a. The execution, delivery and performance by Borrower of this Second Amendment and the amended and restated Reducing Revolver Notes are within the corporate powers of Borrower, have been duly authorized by all necessary corporate action and require no action by or in respect of, or filing with, any governmental or regulatory body, agency or official. The execution, delivery and performance by Borrower of this Second Amendment and the amended and restated Reducing Revolver Notes do not conflict with, or result in a breach of the terms, conditions or provisions of, or constitute a default under or result in any violation of, and Borrower is not now in default under or in violation of, the terms of the Certificate of Incorporation or Bylaws of Borrower, any applicable law, any rule, regulation, order, writ, judgment or decree of any court or governmental or regulatory agency or instrumentality, or any agreement or instrument to which Borrower is a party or by which it is bound or to which it is subject;
b. This Second Amendment and the amended and restated Reducing Revolver Notes have been duly executed and delivered and constitute the legal, valid and binding obligations of Borrower enforceable in accordance with their respective terms; and
c. As of the date hereof, all of the rightscovenants, privileges representations and prerogativeswarranties of Borrower set forth in the Credit Agreement are true and correct and no "Event of Default" (as defined therein) under or within the meaning of the Credit Agreement, as landlord under the Operating Leases to which it hereby amended, has occurred and is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effectcontinuing.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee21. The Credit Agreement, as tenant thereunderhereby amended, the Reducing Revolver Notes, as hereby amended and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Leaserestated, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan DocumentsTransaction Documents are and shall remain the binding obligations of Borrower, Administrative Agent shall have and except to the rightextent amended by this Second Amendment, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants provisions, conditions, agreements, covenants, representations, warranties and conditions powers contained in the Credit Agreement, the Reducing Revolver Notes and the other Transaction Documents shall be and remain in full force and effect and the same are hereby ratified and confirmed. This Second Amendment amends the Credit Agreement and is not a novation thereof.
22. All references in the Credit Agreement or the other Transaction Documents to "this Agreement" and any other references of such Operating Lease on similar import shall henceforth mean the part Credit Agreement as amended by this Second Amendment.
23. This Second Amendment shall be binding upon and inure to the benefit of such Subsidiary Guarantor Operating Lesseethe parties hereto and their respective successors and assigns, except that Borrower may not assign, transfer or delegate any of its rights or obligations hereunder.
24. This Second Amendment is made solely for the benefit of Borrower, Agent and Lenders as tenant thereunderset forth herein, and is not intended to be performed relied upon or observed in all material respects enforced by any other person or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lesseeentity.
25. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, to the end that the rights of such Subsidiary Guarantor Operating Lessee inEXTEND CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT, to and under the applicable Operating Lease INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWER, AGENT AND LENDERS FROM ANY MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWER, AGENT AND LENDERS COVERING SUCH MATTERS ARE CONTAINED IN THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, WHICH CONSTITUTE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS BETWEEN BORROWER, AGENT AND LENDERS EXCEPT AS BORROWER, AGENT AND LENDERS MAY LATER AGREE IN WRITING TO MODIFY. THIS SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR WRITTEN) RELATING TO THE SUBJECT MATTER HEREOF.
26. This Second Amendment shall be kept unimpaired governed by and free from default. If Administrative Agent shall make any payment or perform any act or take action construed in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion internal laws of the Obligations, shall be secured by the Lien State of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent thereforMissouri.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default27. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of any inconsistency or conflict between this Second Amendment and the bankruptcyCredit Agreement or the other Transaction Documents, reorganization or insolvency the terms, provisions and conditions of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent Second Amendment shall be null govern and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminatedcontrol.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
Appears in 1 contract
Samples: Credit Agreement (Staffmark Inc)
Operating Leases. (a) Each Loan Party shall (i) perform and observe in all material respects as and when required thereunder all of the material covenants required to be performed and observed by each Subsidiary Guarantor Owner and each Subsidiary Guarantor Operating Lessee, respectively, it under the respective Operating Leases in accordance with the terms thereof and do all things necessary to preserve and to keep unimpaired its material rights thereunderLease; (ii) promptly notify Administrative Agent of any material default (beyond any applicable notice, grace or cure period) under any the Operating Lease of which they become awareLease; and (iii) promptly deliver to Administrative Agent (without duplication) a copy of any notice of default or other material notice under any the Operating Lease delivered to or from a Subsidiary Guarantor Loan Party.
(b) If at any time, (i) Operating Lessee by a Subsidiary Guarantor Owner or to a Subsidiary Guarantor Owner by a Subsidiary Guarantor Operating Lessee; (iv) promptly give notice to Administrative Agent of any notice or information that a Subsidiary Guarantor Owner receives which indicates that a Subsidiary Guarantor Operating Lessee is terminating an Operating Lease or that a Subsidiary Guarantor Operating Lessee is otherwise discontinuing its operation of a Borrowing Base Property; and (v) promptly enforce the performance and observance in all material respects of all of the covenants required to be performed and observed by a Subsidiary Guarantor Owner shall become insolvent or a Subsidiary Guarantor Operating Lesseedebtor in a bankruptcy proceeding or (ii) Agent or its designee has taken title to the Premises by foreclosure, as applicabledeed in lieu, under or assignment in lieu of foreclosure, has become a mortgagee-in-possession or has otherwise taken title to the Premises, Agent shall have the absolute right to (and each Loan Party shall reasonably cooperate and not in any way hinder, delay or otherwise interfere with Agent’s right to), immediately terminate the Operating Lease.
(bc) Assure that no Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee shallExcept in connection with the Hotel Rebranding, Loan Parties shall not, without the prior written consent of Administrative Agent, such which consent shall not to be unreasonably withheld, conditioned, or delayed: (i) modify, amend, surrender, terminate or cancel any the Operating Lease or otherwise replace a Subsidiary Guarantor the Operating Lessee or enter into any other operating lease with respect to the Premises; provided, however, at the end of the term of the Operating Lease, Borrower may renew the Operating Lease or enter into a replacement Operating Lease with Operating Lessee at rent mutually determined by Loan Parties pursuant to the Internal Revenue Code (if applicable) and otherwise on substantially the same terms as the expiring Operating Lease (but Agent shall have the right to approve any Borrowing Base Property; material change thereto) or (ii) reduce or consent to the reduction of the term of any Operating Lease; or (iii) enter into, amend, modify, waive any provisions of, or increase or reduce the rents under, any Operating Lease; provided that, notwithstanding the foregoing, a Subsidiary Guarantor Owner and Subsidiary Guarantor Operating Lessee shall be permitted to, without the consent of Administrative Agent or Lenders, modify an Operating Lease to extend the term thereof for a period of five (5) years from the current expiration thereof and to reflect adjustments in the rents payable under such Operating Lease in connection with such extension under such Operating Lease from time to time, subject to satisfaction of all of the following terms and conditions: (A) no Default has occurred and is then continuing; (B) the revised rent payable under the Operating Lease is “market rent” in accordance with rules governing real estate investment trusts and as set forth in a transfer pricing report prepared by any of Pricewaterhouse Coopers, Deloitte Touche Tohmatsu Limited, Ernst & Young, Klynveld Peat Marwick Goerdeler, BDO USA, LLP, or other independent public accountants of recognized standing reasonably acceptable to Administrative Agent; (C) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent within five (5) Business Days of execution of the amendment to such Operating Lease modifying the rent payable thereunder, a true, accurate and complete copy of such amendment; (D) the applicable Subsidiary Guarantor Owner shall have delivered to Administrative Agent an Officer’s Certificate certifying that all conditions set forth in this Section 7.14(b) have been satisfied; and (E) the applicable Subsidiary Guarantor Owner shall deliver to Administrative Agent any additional information reasonably requested by Administrative Agent in connection with such modification of such rents payable under the applicable Operating Lease.
(c) Assign to Administrative Agent, for the benefit of Lenders, as further security for the payment and performance of the Obligations and observance of the terms, covenants and conditions of this Agreement and the other Loan Documents, all of the rights, privileges and prerogatives, as landlord under the Operating Leases to which it is a party, to surrender the leasehold estate created by the Operating Lease or to terminate (other than as expressly allowed under this Agreement), cancel, modify, change, supplement, alter or amend the Operating Leases subject only to the rights granted to a Subsidiary Guarantor Owner pursuant to this Section 7.14, and any such surrender of the leasehold estate created by such Operating Lease or termination, cancellation, modification, change, supplement, alteration or amendment of such Operating Lease not permitted pursuant to the foregoing terms of this Section 7.14 shall be void and of no force or effect.
(d) If at any time a Subsidiary Guarantor Operating Lessee shall default in the performance or observance of any material term, covenant or condition of an Operating Lease that is to be performed or observed by such Subsidiary Guarantor Operating Lessee, as tenant thereunder, and such default would give a Subsidiary Guarantor Owner the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing such Subsidiary Guarantor Operating Lessee from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of such Operating Lease on the part of such Subsidiary Guarantor Operating Lessee, as tenant thereunder, to be performed or observed in all material respects or to be promptly performed or observed in all material respects on behalf of such Subsidiary Guarantor Operating Lessee, to the end that the rights of such Subsidiary Guarantor Operating Lessee in, to and under the applicable Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify such Subsidiary Guarantor Operating Lessee thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the applicable Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If Borrower shall deliver to Administrative Agent a copy of any notice of default sent by a Subsidiary Guarantor Owner to a Subsidiary Guarantor Operating Lessee, as tenant under an Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(d) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(e) If at any time a Subsidiary Guarantor Owner shall default in the performance or observance of any material term, covenant or condition of an Operating Lease to be performed or observed by such Subsidiary Guarantor Owner, as landlord thereunder, and such default would give a Subsidiary Guarantor Operating Lessee the right to terminate the Operating Lease, if such default is not remedied within any applicable notice and cure periods set forth therein, then, without limiting the generality of the other provisions of this Section 7.14, and without waiving or releasing Borrower from any of its obligations under this Agreement and the other Loan Documents, Administrative Agent shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action as may be appropriate to cause all of the terms, covenants and conditions of the Operating Lease on the part of such Subsidiary Guarantor Owner, as landlord thereunder, to be performed or observed or to be promptly performed or observed on behalf of such Subsidiary Guarantor Owner, to the end that the rights of such Subsidiary Guarantor Owner in, to and under the Operating Lease shall be kept unimpaired and free from default. If Administrative Agent shall make any payment or perform any act or take action in accordance with the preceding sentence, Administrative Agent will notify Borrower thereof. In any such event, subject to the rights of tenants and guests and applicable Law, Administrative Agent and any Person designated by Administrative Agent shall have, and are hereby granted, the right to enter upon the Borrowing Base Property at any time and from time to time for the purpose of taking any such action. If a Subsidiary Guarantor Operating Lessee shall deliver to Administrative Agent a copy of any notice of default sent by such Subsidiary Guarantor Operating Lessee to a Subsidiary Guarantor Owner, as landlord under their Operating Lease, such notice shall constitute full protection to Administrative Agent for any action taken or omitted to be taken by Administrative Agent, in good faith, in reliance thereon. Any sums expended by Administrative Agent pursuant to this Section 7.14(e) shall bear interest at the Default Rate from the date such cost is incurred to the date of payment to Administrative Agent, shall be deemed to constitute a portion of the Obligations, shall be secured by the Lien of the Mortgage on such Borrowing Base Property and the other Loan Documents and shall be immediately due and payable upon demand by Administrative Agent therefor.
(f) In the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, any attempt by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to surrender its leasehold estate, or any portion thereof, under their Operating Lease, or any attempt under such circumstances by a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to terminate (other than as expressly allowed under this Agreement), cancel or acquiesce in the rejection of their Operating Lease without the consent of Administrative Agent shall be null and void. Each Subsidiary Guarantor Owner hereby expressly releases, assigns, relinquishes and surrenders unto Administrative Agent all of its right, power and authority to terminate (other than as expressly allowed under this Agreement), cancel, acquiesce in the rejection of, modify, change, supplement, alter or amend their Operating Lease in any respect, either orally or in writing, in the event of the bankruptcy, reorganization or insolvency of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee, and any attempt on the part of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee to exercise any such right without the consent of Administrative Agent shall be null and void. Solely in connection with the foregoing sentence, each Subsidiary Guarantor Owner hereby irrevocably appoints Administrative Agent as its true and lawful attorney-in-fact which power of attorney shall be coupled with an interest, for the purpose of exercising its rights pursuant to Section 365(h) of the Bankruptcy Code or any successor to such Section (i) to obtain for the benefit of a Subsidiary Guarantor Owner or a Subsidiary Guarantor Operating Lessee or Administrative Agent a right to possession or statutory term of years derived from or incident to their Operating Lease, or (ii) to treat their Operating Lease as terminated.
(g) Notwithstanding the rejection of an Operating Lease by a Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, pursuant to Section 365 of the Bankruptcy Code, neither the Lien of the Mortgage on such Borrowing Base Property nor Administrative Agent’s rights with respect to such Operating Lease shall be affected or impaired by reason thereof. In the event that such Subsidiary Guarantor Operating Lessee shall remain in possession of the Borrowing Base Property following a rejection of the Operating Lease by such Subsidiary Guarantor Owner, as debtor in possession, or by a trustee for such Subsidiary Guarantor Owner, such Subsidiary Guarantor Owner shall not permit the Subsidiary Guarantor Operating Lessee under such Operating Lease to exercise any right of offset against the rent payable under the Operating Lease, pursuant to Section 365(h)(2) of the Bankruptcy Code, without the prior consent of Administrative Agent thereto.
(h) Administrative Agent shall have the right, but shall be under no obligation, to exercise on behalf of any Subsidiary Guarantor Owner or Subsidiary Guarantor Operating Lessee any renewal or extension options under any Operating Lease if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall fail to exercise any such options or if such Subsidiary Guarantor Owner and/or Subsidiary Guarantor Operating Lessee shall take any action (including the delivery of any termination notice) that shall prevent any renewal or extension option under the Operating Lease from automatically taking effect. Each Subsidiary Guarantor Owner hereby absolutely and unconditionally assigns and grants to Administrative Agent such Subsidiary Guarantor Owner’s irrevocable power of attorney, coupled with an interest, to exercise any renewal or extension options under their Operating Lease on behalf of and in the name of such Subsidiary Guarantor Owner following such Subsidiary Guarantor Owner’s failure to do so, and to take at any time any or all other actions on behalf of such Subsidiary Guarantor Owner (including the withdrawal of any termination notice delivered by such Subsidiary Guarantor Owner) required for the preservation of such Operating Lease.
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