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LEASE AGREEMENT
Dated as of December 2, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the Sunrise Trust 1998-1,
as Lessor
and
SUNRISE MIDWEST LEASING, L.L.C.,
as Lessee
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This Lease Agreement is subject to a security interest in favor of NationsBank,
N.A., as the agent for the Lenders and respecting the Security Documents, as the
agent for the Lenders and the Holders, to the extent of their interests (the
"Agent") under a Security Agreement dated as of December 2, 1998, between First
Security Bank, National Association, not individually, but solely as the Owner
Trustee under the Sunrise Trust 1998-1 and the Agent, as amended, modified,
extended, supplemented, restated and/or replaced from time to time in accordance
with the applicable provisions thereof. This Lease Agreement has been executed
in several counterparts. To the extent, if any, that this Lease Agreement
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no security interest in this
Lease Agreement may be created through the transfer or possession of any
counterpart other than the original counterpart containing the receipt therefor
executed by the Agent on the signature page hereof.
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TABLE OF CONTENTS
ARTICLE I.........................................................................................................1
1.1 Definitions..........................................................................................1
1.2 Interpretation.......................................................................................2
ARTICLE II........................................................................................................2
2.1 Property.............................................................................................2
2.2 Lease Term...........................................................................................2
2.3 Title................................................................................................2
2.4 Lease Supplements....................................................................................2
ARTICLE III.......................................................................................................3
3.1 Rent.................................................................................................3
3.2 Payment of Basic Rent................................................................................3
3.3 Supplemental Rent....................................................................................3
3.4 Performance on a Non-Business Day....................................................................4
3.5 Rent Payment Provisions..............................................................................4
ARTICLE IV........................................................................................................4
4.1 Taxes; Utility Charges...............................................................................4
ARTICLE V.........................................................................................................5
5.1 Quiet Enjoyment......................................................................................5
ARTICLE VI........................................................................................................5
6.1 Net Lease............................................................................................5
6.2 No Termination or Abatement..........................................................................6
ARTICLE VII.......................................................................................................6
7.1 Ownership of the Properties..........................................................................6
ARTICLE VIII......................................................................................................7
8.1 Condition of the Properties..........................................................................7
8.2 Possession and Use of the Properties.................................................................8
8.3 Integrated Properties................................................................................9
ARTICLE IX........................................................................................................9
9.1 Compliance With Legal Requirements, Insurance Requirements and Manufacturer's
Specifications and Standards.........................................................................9
ARTICLE X........................................................................................................10
10.1 Maintenance and Repair; Return.....................................................................10
10.2 Environmental Inspection...........................................................................11
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ARTICLE XI.......................................................................................................12
11.1 Modifications......................................................................................12
ARTICLE XII......................................................................................................12
12.1 Warranty of Title..................................................................................12
ARTICLE XIII.....................................................................................................13
13.1 Permitted Contests Other Than in Respect of Indemnities............................................13
13.2 Impositions, Utility Charges, Other Matters; Compliance with Legal Requirements....................14
ARTICLE XIV......................................................................................................14
14.1 Insurance..........................................................................................14
15.1 Environmental Matters..............................................................................21
15.2 Notice of Environmental Matters....................................................................22
ARTICLE XVI......................................................................................................22
16.1 Termination Upon Certain Events....................................................................22
16.2 Procedures.........................................................................................22
ARTICLE XVII.....................................................................................................23
17.1 Lease Events of Default............................................................................23
17.2 Surrender of Possession............................................................................26
17.3 Reletting..........................................................................................26
17.4 Damages............................................................................................27
17.5 Power of Sale......................................................................................27
17.6 Final Liquidated Damages...........................................................................27
17.7 Environmental Costs................................................................................28
17.8 Waiver of Certain Rights...........................................................................28
17.9 Assignment of Rights Under Contracts...............................................................29
17.10 Remedies Cumulative...............................................................................29
ARTICLE XVIII....................................................................................................29
18.1 Lessor's Right to Cure Lessee's Lease Defaults.....................................................29
ARTICLE XIX......................................................................................................29
19.1 Provisions Relating to Lessee's Exercise of its Purchase Option....................................29
19.2 No Purchase or Termination With Respect to Less than All of a Property.............................30
ARTICLE XX.......................................................................................................30
20.1 Purchase Option or Sale Option-General Provisions..................................................30
20.2 Lessee Purchase Option.............................................................................30
20.3 Third Party Sale Option............................................................................31
ARTICLE XXI......................................................................................................32
21.1 [Intentionally Omitted]............................................................................32
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ARTICLE XXII.....................................................................................................32
22.1 Sale Procedure.....................................................................................32
22.2 Application of Proceeds of Sale....................................................................35
22.3 Indemnity for Excessive Wear.......................................................................35
22.4 Appraisal Procedure................................................................................36
22.5 Certain Obligations Continue.......................................................................36
ARTICLE XXIII....................................................................................................36
23.1 Holding Over.......................................................................................36
ARTICLE XXIV.....................................................................................................37
24.1 Risk of Loss.......................................................................................37
ARTICLE XXV......................................................................................................37
25.1 Assignment.........................................................................................37
25.2 Subleases..........................................................................................38
ARTICLE XXVI.....................................................................................................38
26.1 No Waiver..........................................................................................38
ARTICLE XXVII....................................................................................................38
27.1 Acceptance of Surrender............................................................................38
27.2 No Merger of Title.................................................................................39
ARTICLE XXVIII...................................................................................................39
28.1 Incorporation of Covenants.........................................................................39
ARTICLE XXIX.....................................................................................................40
29.1 Notices............................................................................................40
ARTICLE XXX......................................................................................................40
30.1 Miscellaneous......................................................................................40
30.2 Amendments and Modifications.......................................................................40
30.3 Successors and Assigns.............................................................................40
30.4 Headings and Table of Contents.....................................................................40
30.5 Counterparts.......................................................................................40
30.6 GOVERNING LAW......................................................................................41
30.7 Calculation of Rent................................................................................41
30.8 Memoranda of Lease and Lease Supplements...........................................................41
30.9 Allocations between the Lenders and the Holders....................................................41
30.10 Limitations on Recourse...........................................................................41
30.11 WAIVERS OF JURY TRIAL.............................................................................42
30.12 Exercise of Lessor Rights.........................................................................42
30.13 SUBMISSION TO JURISDICTION; VENUE.................................................................42
30.14 USURY SAVINGS PROVISION...........................................................................42
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EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of December 2, 1998 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time,
this "Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at 00 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, not individually, but solely as the Owner Trustee under
the Sunrise Trust 1998-1 as lessor (the "Lessor"), and SUNRISE MIDWEST LEASING,
L.L.C., a Virginia limited liability company, having its principal place of
business at 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, as lessee (the
"Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Basic Term shall commence with respect to each Property
upon the Property Closing Date with respect thereto; provided, Basic Rent with
respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
For purposes of this Lease, capitalized terms used in this
Lease and not otherwise defined herein shall have the meanings assigned to them
in Appendix A to that certain Participation Agreement dated as of December 2,
1998 (as amended, modified, extended, supplemented, restated and/or replaced
from time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Lessee, Sunrise Assisted Living, Inc., as the
Guarantor, Lessor, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and NationsBank, N.A., as agent for the
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Lenders and respecting the Security Documents, as the agent for the Lenders and
the Holders, to the extent of their interests. Unless otherwise indicated,
references in this Lease to articles, sections, paragraphs, clauses, appendices,
schedules and exhibits are to the same contained in this Lease.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
The basic term of this Lease with respect to each Property
(the "Basic Term") shall begin upon the Property Closing Date for such Property
(in each case the "Basic Term Commencement Date") and shall end on the third
annual anniversary of the Initial Closing Date (the "Basic Term Expiration Date"
or "Expiration Date"), unless the Basic Term is earlier terminated or the term
of this Lease is renewed (as described below) in accordance with the provisions
of this Lease. Notwithstanding the foregoing, Lessee shall not be obligated to
pay Basic Rent until the Rent Commencement Date with respect to such Property.
2.3 TITLE.
Each Property is leased to Lessee without any representation
or warranty, express or implied, by Lessor and subject to the rights of parties
in possession (if any), the existing state of title (including without
limitation the Permitted Liens) and all applicable Legal Requirements. Lessee
shall in no event have any recourse against Lessor for any defect in Lessor's
title to any Property or any interest of Lessee therein other than for Lessor
Liens.
2.4 LEASE SUPPLEMENTS.
On or prior to each Basic Term Commencement Date, Lessee and
Lessor shall each execute and deliver a Lease Supplement for the Property to be
leased effective as of such Basic Term Commencement Date in substantially the
form of Exhibit A hereto.
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ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect
to any or all Properties during the Term; provided, however, with
respect to each individual Property Lessee shall have no obligation to
pay Basic Rent with respect to such Property until the Rent
Commencement Date with respect to such Property (notwithstanding that
Basic Rent for such Property shall accrue from and including the
Scheduled Interest Payment Date immediately preceding such Rent
Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid on the due date therefor (or within the
applicable grace period) to such account or accounts at such bank or
banks as Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall
not delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00
Noon, Charlotte, North Carolina time, on the applicable date for
payment of such amount.
3.2 PAYMENT OF BASIC RENT.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 SUPPLEMENTAL RENT.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable, and if
Lessee fails to pay any Supplemental Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein or
by law or equity or otherwise in the case of nonpayment of Basic Rent. All such
payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person, (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period) for the period for which the same shall
be overdue and on any payment of Supplemental Rent not paid when due or demanded
by the appropriate Person (subject to any applicable grace period) for the
period from the due date or the date of any such
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demand, as the case may be, until the same shall be paid and (c) amounts
referenced as Supplemental Rent obligations pursuant to Section 8.3 of the
Participation Agreement. It shall be an additional Supplemental Rent obligation
of Lessee to pay to the appropriate Person all rent and other amounts when such
become due and owing from time to time under each Ground Lease and without the
necessity of any notice from Lessor with regard thereto. The expiration or other
termination of Lessee's obligations to pay Basic Rent hereunder shall not limit
or modify the obligations of Lessee with respect to Supplemental Rent. Unless
expressly provided otherwise in this Lease, in the event of any failure on the
part of Lessee to pay and discharge any Supplemental Rent as and when due,
Lessee shall also promptly pay and discharge any fine, penalty, interest or cost
which may be assessed or added for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date. If any Supplemental Rent is required hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
Lessee shall make payment of all Basic Rent and Supplemental
Rent when due (subject to the applicable grace periods) regardless of whether
any of the Operative Agreements pursuant to which same is calculated and is
owing shall have been rejected, avoided or disavowed in any bankruptcy or
insolvency proceeding involving any of the parties to any of the Operative
Agreements. Such provisions of such Operative Agreements and their related
definitions are incorporated herein by reference and shall survive any
termination, amendment or rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
Lessee shall pay or cause to be paid all Impositions with
respect to the Properties and/or the use, occupancy, operation, repair, access,
maintenance or operation thereof and all charges for electricity, power, gas,
oil, water, telephone, sanitary sewer service and all other rents, utilities and
operating expenses of any kind or type used in or on any Property and related
real property during the Term. Upon Lessor's request, Lessee shall provide from
time to time Lessor with evidence of all such payments referenced in the
foregoing sentence. Lessee shall be entitled to receive any credit or refund
with respect to any Imposition or utility charge paid by Lessee. Unless an Event
of Default shall have occurred and be continuing, the amount of any credit or
refund received by Lessor on account of any Imposition or utility charge paid by
Lessee, net of the costs and expenses incurred by Lessor in obtaining such
credit or refund, shall be promptly paid over to Lessee. All charges for
Impositions or utilities imposed with respect to
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any Property for a period during which this Lease expires or terminates shall be
adjusted and prorated on a daily basis between Lessor and Lessee, and each party
shall pay or reimburse the other for such party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT.
Subject to the rights of Lessor contained in Sections 17.2,
17.3 and 20.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Event of Default shall have occurred and be
continuing, Lessee shall peaceably and quietly have, hold and enjoy each
Property for the applicable Term, free of any claim or other action by Lessor or
anyone rightfully claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the applicable Basic Term
Commencement Date.
ARTICLE VI
6.1 NET LEASE.
This Lease shall constitute a net lease, and the obligations
of Lessee hereunder are absolute and unconditional. Lessee shall pay all
operating expenses arising out of the use, operation and/or occupancy of each
Property. Any present or future law to the contrary notwithstanding, this Lease
shall not terminate, nor shall Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the Rent,
nor shall the obligations of Lessee hereunder be affected (except as expressly
herein permitted and by performance of the obligations in connection therewith)
for any reason whatsoever, including without limitation by reason of: (a) any
damage to or destruction of any Property or any part thereof; (b) any taking of
any Property or any part thereof or interest therein by Condemnation or
otherwise; (c) any prohibition, limitation, restriction or prevention of
Lessee's use, occupancy or enjoyment of any Property or any part thereof, or any
interference with such use, occupancy or enjoyment by any Person or for any
other reason; (d) any title defect, Lien or any matter affecting title to any
Property; (e) any eviction by paramount title or otherwise; (f) any default by
Lessor hereunder; (g) any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding relating to or affecting the Agent,
any Lender, Lessor, Lessee, any Holder or any Governmental Authority; (h) the
impossibility or illegality of performance by Lessor, Lessee or both; (i) any
action of any Governmental Authority or any other Person; (j) Lessee's
acquisition of ownership of all or part of any Property; (k) breach of any
warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants,
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agreements and obligations shall have been modified or terminated in accordance
with an express provision of this Lease. Lessor and Lessee acknowledge and agree
that the provisions of this Section 6.1 have been specifically reviewed and
subjected to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
Lessee shall remain obligated under this Lease in accordance
with its terms and shall not take any action to terminate, rescind or avoid this
Lease, notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that for federal and all state
and local income tax purposes, bankruptcy purposes, regulatory
purposes, commercial law and real estate purposes and all other
purposes (other than for accounting purposes) (A) this Lease will be
treated as a financing arrangement and (B) Lessee will be treated as
the owner of the Properties and will be entitled to all tax benefits
ordinarily available to owners of property similar to the Properties
for such tax purposes. Notwithstanding the foregoing, neither party
hereto has made, or shall be deemed to have made, any representation or
warranty as to the availability of any of the foregoing treatments
under applicable accounting rules, tax, bankruptcy, regulatory,
commercial or real estate law or under any other set of rules. Lessee
shall claim the cost recovery deductions associated with each Property,
and Lessor shall not, to the extent not prohibited by Law, take on its
tax return a position inconsistent with Lessee's claim of such
deductions.
(b) For all purposes described in Section 7.1(a), Lessor and
Lessee intend this Lease to constitute a finance lease and not a true
lease. In order to secure the obligations of Lessee now existing or
hereafter arising under any and all Operative Agreements, Lessee hereby
conveys, grants, assigns, transfers, hypothecates, mortgages and sets
over to Lessor, for the benefit of all Financing Parties, a first
priority security interest (but subject to the security interest in the
assets granted by Lessee in favor of the Agent in accordance with the
Security Agreement) in and lien on all right, title and interest of
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Lessee (now owned or hereafter acquired) in and to all Properties to
the extent such is personal property and irrevocably grants and conveys
a lien, deed of trust and mortgage on all right, title and interest of
Lessee (now owned or hereafter acquired) in and to all Properties to
the extent such is a real property. Lessor and Lessee further intend
and agree that, for the purpose of securing the obligations of Lessee
and/or the Construction Agent now existing or hereafter arising under
the Operative Agreements, (i) this Lease shall be a security agreement
and financing statement within the meaning of Article 9 of the Uniform
Commercial Code respecting each of the Properties and all proceeds
(including without limitation insurance proceeds thereof) to the extent
such is personal property and an irrevocable grant and conveyance of a
lien, deed of trust and mortgage on each of the Properties and all
proceeds (including without limitation insurance proceeds thereof) to
the extent such is real property; (ii) the acquisition of title by
Lessor (or to the extent applicable, a leasehold interest pursuant to a
Ground Lease) in each Property referenced in Article II constitutes a
grant by Lessee to Lessor of a security interest, lien, deed of trust
and mortgage in all of Lessee's right, title and interest in and to
each Property and all proceeds (including without limitation insurance
proceeds thereof) of the conversion, voluntary or involuntary, of the
foregoing into cash, investments, securities or other property, whether
in the form of cash, investments, securities or other property, and an
assignment of all rents, profits and income produced by each Property;
and (iii) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of Lessee shall be
deemed to have been given for the purpose of perfecting such lien,
security interest, mortgage lien and deed of trust under applicable
law. Lessee shall promptly take such actions as Lessor may reasonably
request (including without limitation the filing of Uniform Commercial
Code Financing Statements, Uniform Commercial Code Fixture Filings and
memoranda (or short forms) of this Lease and the various Lease
Supplements) to ensure that the lien, security interest, lien, mortgage
lien and deed of trust in each Property and the other items referenced
above will be deemed to be a perfected lien, security interest,
mortgage lien and deed of trust of first priority under applicable law
and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH
PROPERTY "AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS
OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND
CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF
TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY
STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY
MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF
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THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR
ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY
OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY
FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY
WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN,
OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART
THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS
OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER
LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY
LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY
PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE
BASIC TERM COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT
EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS
LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE
RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS
OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS
DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT, THE LENDERS
AND THE HOLDERS, ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND, ARE TO BE BORNE
BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times during the Term with respect to each
Property, such Property shall be a Permitted Facility and shall be used
by Lessee in the ordinary course of its business. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the
use of the Properties as contemplated by this Lease. Lessee shall not
commit or permit any waste of the Properties or any part thereof.
(b) The address stated in Section 29.1 of this Lease is the
principal place of business and chief executive office of Lessee (as
such terms are used in Section 9-103(3) of the Uniform Commercial Code
of any applicable jurisdiction), and Lessee will provide Lessor with
prior written notice of any change of location of its principal place
of business or chief executive office. Regarding a particular Property,
each Lease Supplement correctly identifies the initial location of the
related Equipment (if any) and Improvements (if any) and contains an
accurate legal description for the related parcel of Land or a copy of
the Ground Lease (if any). The Equipment and Improvements respecting
each particular Property will be located only at the location
identified in the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property in a manner that could give rise to the
assertion of any Lien on such item of Equipment by reason of such
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attachment or the assertion of a claim that such item of Equipment has
become a fixture and is subject to a Lien in favor of a third party
that is prior to the Liens thereon created by the Operative Agreements.
(d) On the Basic Term Commencement Date for each Property,
Lessor and Lessee shall execute a Lease Supplement in regard to such
Property which shall contain an Equipment Schedule that has a general
description of the Equipment which shall comprise the Property, an
Improvement Schedule that has a general description of the Improvements
which shall comprise the Property and a legal description of the Land
to be leased hereunder (or in the case of any Property subject to a
Ground Lease to be subleased hereunder) as of such date. Each Property
subject to a Ground Lease shall be deemed to be ground subleased from
Lessor to Lessee as of the Basic Term Commencement Date, and such
ground sublease shall be in effect until this Lease is terminated or
expires, in each case in accordance with the terms and provisions
hereof. Lessee shall satisfy and perform all obligations imposed on
Lessor under each Ground Lease. Simultaneously with the execution and
delivery of each Lease Supplement, such Equipment, Improvements, Land,
ground subleasehold interest, all additional Equipment and all
additional Improvements which are financed under the Operative
Agreements after the Basic Term Commencement Date and the remainder of
such Property shall be deemed to have been accepted by Lessee for all
purposes of this Lease and to be subject to this Lease.
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided that such exercise will
not impair the value, utility or remaining useful life of such
Property) shall be permitted to exercise all rights and remedies under,
all operation and easement agreements and related or similar agreements
applicable to such Property.
8.3 INTEGRATED PROPERTIES.
On the Rent Commencement Date for each Property, Lessee shall,
at its sole cost and expense, cause such Property and the applicable property
subject to a Ground Lease to constitute (and for the duration of the Term shall
continue to constitute) all of the equipment, facilities, rights, other personal
property and other real property necessary or appropriate to operate, utilize,
maintain and control a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws) and all Insurance Requirements relating to the
15
Properties, (b) procure, maintain and comply with all licenses, permits, orders,
approvals, consents and other authorizations required for the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties and (c) comply with all
manufacturer's specifications and standards, including without limitation the
acquisition, installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Properties, whether or
not compliance therewith shall require structural or extraordinary changes in
any Property or interfere with the use and enjoyment of any Property, unless the
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not have and
could not reasonably be expected to have a Material Adverse Effect. Lessor
agrees to take such actions as may be reasonably requested by Lessee in
connection with the compliance by Lessee of its obligations under this Section
9.1.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally
delivered to Lessor and make all necessary repairs thereto and
replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property, such that such Property is capable of being
immediately utilized by a third party and in compliance with standard
industry practice subject, however, to the provisions of Article XV
with respect to Casualty and Condemnation.
(b) Lessee shall not use or locate any component of any
Property outside of the Approved State therefor. Lessee shall not move
or relocate any component of any Property beyond the boundaries of the
Land (comprising part of such Property) described in the applicable
Lease Supplement, except for the temporary removal of Equipment and
other personal property for repair or replacement.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered
unfit for use, Lessee, at its own expense, will within a reasonable
time replace such component with a replacement component which is free
and clear of all Liens (other than Permitted Liens and Lessor Liens)
and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been maintained
and repaired in accordance with the requirements of this Lease). All
components which are added to any Property shall immediately become the
property of (and title thereto shall vest in) Lessor and shall be
deemed incorporated in such Property and subject to the terms of this
Lease as if originally leased hereunder.
16
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not, in the absence of an Event of Default,
materially disrupt the business of Lessee.
(e) Lessee shall cause to be delivered to Lessor (at Lessee's
sole expense) one or more additional Appraisals (or reappraisals of
Property) as Lessor may request if any one of Lessor, the Agent, the
Trust Company, any Lender or any Holder is required pursuant to any
applicable Legal Requirement to obtain such Appraisals (or
reappraisals) and upon the occurrence of any Event of Default.
(f) Lessor shall under no circumstances be required to build
any improvements or install any equipment on any Property, make any
repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any Property, or (ii)
make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenant,
condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) pursuant to the
exercise of the applicable remedies upon the occurrence of a Lease
Event of Default, to Lessor or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof, to Lessor or the third party purchaser, as the
case may be, subject to Lessee's obligations under this Lease
(including without limitation the obligations of Lessee at the time of
such surrender under Sections 9.1, 10.1(a) through (f), 10.2, 11.1,
12.1, 22.1 and 23.1).
10.2 ENVIRONMENTAL INSPECTION.
If Lessee has not given notice of exercise of its Purchase
Option on the Expiration Date pursuant to Section 20.1 or for whatever reason
Lessee does not purchase a Property in accordance with the terms of this Lease,
then not more than one hundred twenty (120) days nor less than sixty (60) days
prior to the Expiration Date, Lessee at its expense shall cause to be delivered
to Lessor a Phase I environmental site assessment recently prepared (no more
than thirty (30) days prior to the date of delivery) by an independent
recognized professional reasonably acceptable to Lessor, and in form, scope and
content reasonably satisfactory to Lessor.
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ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations, improvements and additions to any Property or
any part thereof and substitutions and replacements therefor
(collectively, "Modifications"), and Lessee shall make any and all
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and standards;
provided, that: (i) no Modification shall materially impair the value,
utility or useful life of any Property from that which existed
immediately prior to such Modification; (ii) each Modification shall be
done expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is
in progress; (v) subject to the terms of Article XIII relating to
permitted contests, Lessee shall pay all costs and expenses and
discharge any Liens arising with respect to any Modification; (vi) each
Modification shall comply with the requirements of this Lease
(including without limitation Sections 8.2 and 10.1); and (vii) no
Improvement shall be demolished or otherwise rendered unfit for use
unless Lessee shall finance the proposed replacement Modification
outside of this lease facility; provided, further, Lessee shall not
make any Modification (unless required by any Legal Requirement) to the
extent any such Modification, individually or in the aggregate, shall
have or could reasonably be expected to have a Material Adverse Effect.
All Modifications shall immediately and without further action upon
their incorporation into the applicable Property (1) become property of
Lessor, (2) be subject to this Lease and (3) be titled in the name of
Lessor. Lessee shall not remove or attempt to remove any Modification
from any Property. Each Ground Lease for a Property shall expressly
provide for the provisions of the foregoing sentence. Lessee, at its
own cost and expense, will pay for the repairs of any damage to any
Property caused by the removal or attempted removal of any
Modification.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each Property and all Modifications)
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest
18
therein is acknowledged to be a leasehold interest pursuant to such
Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, Lessee shall not
directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment,
levy, title retention agreement or claim upon any Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent, any Lender or any Holder pursuant to any Operative
Agreement, other than Permitted Liens and Lessor Liens. Lessee shall
promptly notify Lessor in the event it receives actual knowledge that a
Lien other than a Permitted Lien or Lessor Lien has occurred with
respect to a Property, the Rent or any other such amounts, and Lessee
represents and warrants to, and covenants with, Lessor that the Liens
in favor of Lessor and/or the Agent created by the Operative Agreements
are (and until the Financing Parties under the Operative Agreements
have been paid in full shall remain) first priority perfected Liens
subject only to Permitted Liens and Lessor Liens. At all times
subsequent to the Basic Term Commencement Date respecting a Property,
Lessee shall (i) cause a valid, perfected, first priority Lien on each
applicable Property to be in place in favor of the Agent (for the
benefit of the Lenders and the Holders) and (ii) file, or cause to be
filed, all necessary documents under the applicable real property law
and Article 9 of the Uniform Commercial Code to perfect such title and
Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
Except to the extent otherwise provided for in Section 11 of
the Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall
19
suspend the collection of any such contested amount from, and suspend the
enforcement thereof against, the applicable Properties, Lessor, each Holder, the
Agent and each Lender; (b) there shall not be imposed a Lien (other than
Permitted Liens and Lessor Liens) on any Property and no part of any Property
nor any Rent would be in any danger of being sold, forfeited, lost or deferred;
(c) at no time during the permitted contest shall there be a risk of the
imposition of criminal liability or material civil liability on Lessor, any
Holder, the Agent or any Lender for failure to comply therewith; and (d) in the
event that, at any time, there shall be a material risk of extending the
application of such item beyond the end of the Term, then Lessee shall deliver
to Lessor an Officer's Certificate certifying as to the matters set forth in
clauses (a), (b) and (c) of this Section 13.1. Lessor, at Lessee's sole cost and
expense, shall execute and deliver to Lessee such authorizations and other
documents as may reasonably be required in connection with any such contest and,
if reasonably requested by Lessee, shall join as a party therein at Lessee's
sole cost and expense.
13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH
LEGAL REQUIREMENTS.
Except with respect to Impositions, Legal Requirements,
utility charges and such other matters referenced in Section 13.1 which are the
subject of ongoing proceedings contesting the same in a manner consistent with
the requirements of Section 13.1, Lessee shall cause (a) all Impositions,
utility charges and such other matters to be timely paid, settled or
compromised, as appropriate, with respect to each Property and (b) each Property
to comply with all applicable Legal Requirements.
ARTICLE XIV
14.1 INSURANCE.
The Lessee shall maintain the following insurance as to each
of the Properties at its sole cost and expense:
(a) Insurance against Casualty to the Property under a policy
or policies covering such risks as are ordinarily insured against by
similar businesses, but in any event including fire, lightning,
earthquake, windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, damage from aircraft, smoke, vandalism and malicious
mischief. Unless otherwise agreed in writing by the Agent, such
insurance shall be for the greater of (i) the full insurable value of
the Property, or (ii) the Termination Value of the Property. The
deductible amount under such policy or policies shall not exceed
$25,000. No policy of insurance shall be written such that the proceeds
thereof will produce less than the minimum coverage required by this
Section by reason of co-insurance provisions or otherwise. The term
"full insurable value" means the actual replacement cost of the
Property (excluding foundation and excavation costs and costs of
underground flues, pipes, drains and other uninsurable items). The
"full insurable value" shall be determined from time to time at the
request of the Agent (but not more frequently
20
than once every three (3) years) by an appraiser or appraisal company
or one of the insurers, who shall be selected and paid for by the
Lessee but subject to the Agent's approval. Such insurance shall name
the Lessee as the insured and shall be endorsed to name the Lessor and
the Agent, on behalf of the Holders and Lenders, as additional insureds
and loss payees, to the extent of their respective interests.
(b) Comprehensive general public liability insurance for
injuries to Persons and damage to property, in limits of not less than
$1,000,000 for any one occurrence and $5,000,000 for the aggregate of
all occurrences during any given annual policy period. No policy of
insurance shall be written such that the proceeds thereof will produce
less than the minimum coverage required by this Section by reason of
co-insurance provisions or otherwise. Such insurance shall name the
Lessee as the insured and shall be endorsed to name the Lessor, the
Holders, the Agent and the Lenders as additional insureds.
(c) Worker's compensation insurance for all employees of the
Lessee in such amount as is required by Law.
(d) During any period of construction upon the Property, the
Lessee shall maintain, or cause others to maintain, builder's risk
insurance (non-reporting form) of the type customarily carried in the
case of similar construction for the full replacement cost of work in
place and materials stored at or upon the Property.
(e) If at any time the Property is in an area that has been
identified as having special flood and mudslide hazards, and flood
insurance is available in such area, the Lessee shall purchase and
maintain a flood insurance policy in form and amount acceptable to the
Agent. In the event that the Property is not in an area having special
flood and mudslide hazards, the Lessee shall deliver to the Agent upon
request evidence satisfactory to the Agent stating that the Property is
not in such a flood or mudslide hazard area.
(f) Business interruption insurance in an amount equal to at
least twelve (12) months' Basic Rent upon the issuance of the
certificate of occupancy.
(g) To the extent that health care professionals are employed
by the Management Company or the Lessee, medical liability, malpractice
and other health care professional liability insurance protecting the
Lessee and the Management Company, as the case may be, against claims
arising from the professional services performed by the Lessee or the
Management Company, as the case may be, with limits of (A) not less
than One Million Dollars ($1,000,000) with respect to injury or death
for each person or occurrence, and (B) not less than Three Million
Dollars ($3,000,000) in the aggregate for claims made for injury or
death in any one year, and an umbrella policy insuring against such
liability in an aggregate amount of Five Million Dollars ($5,000,000).
(h) The Lessee will obtain and keep in force such other and
further insurance as may be required from time to time by the Agent in
order to comply with regular
21
requirements and practices of the Agent in similar transactions. Each
policy of insurance shall (i) be issued by one or more recognized,
financially sound and responsible insurance companies approved by the
Agent and which are qualified or authorized by the Laws of the state
where the Property is located to assume the risks covered by such
policy, (ii) with respect to the insurance described under the
preceding subsections (a), (d), (e) and (f), have attached thereto
standard non-contributing, non-reporting mortgagee clauses in favor of
and entitling the Agent for and on behalf of the Lessor, the Holders,
the Lenders and the Agent, without contribution to collect any and all
proceeds payable under such insurance, (iii) provide that such policy
shall not be canceled or modified without at least thirty (30) days
prior written notice to the Agent, and (iv) provide that any loss
otherwise payable thereunder shall be payable notwithstanding any act
or negligence of the Lessee which might, absent such agreement, result
in a forfeiture of all or a part of such insurance payment. The Lessee
shall promptly pay all premiums when due on such insurance and, not
less than thirty (30) days prior to the expiration dates of each such
policy, the Lessee will deliver to the Agent a renewal policy or
policies marked "premium paid" or accompanied by other evidence of
payment satisfactory to the Agent. The Lessee will immediately give the
Agent notice of any cancellation of, or chance in, any insurance
policy. The Agent shall not, because of accepting, rejecting, approving
or obtaining insurance, incur any liability for (i) the existence,
nonexistence, form or legal sufficiency thereof, (ii) the solvency of
any insurer, or (iii) the payment of losses. The Lessee will provide to
the Agent annually, and more frequently upon request, certificates of
insurance demonstrating compliance with the provisions of this Section,
and, at any time after the occurrence and during the continuance of an
Event of Default, will provide to the Agent, promptly upon request,
copies of all insurance policies addressing the requirements of this
Section.
14.2 ADJUSTMENT OF CONDEMNATION AND INSURANCE CLAIMS.
(a) The Lessee shall give prompt notice to the Agent of the
Casualty or any Condemnation or threatened written Condemnation. The
Agent is authorized, at its sole option, to commence, appear in and
prosecute, in its own or the Lessee's name, any action or proceeding
relating to any Condemnation or Casualty, and to settle or compromise
any Claim in connection therewith. In such case, the Agent may also
deduct from any payment all of its Expenses. The Agent agrees, however,
that, so long as no Event of Default has occurred, it will not settle
or compromise any such Claim without the prior written consent of the
Lessee, which consent shall not be unreasonably withheld or delayed. If
the Agent elects not to adjust a Claim, the Lessee agrees to promptly
pursue the settlement and compromise of the Claim subject to the
Agent's approval which will not be unreasonably withheld or delayed.
If, prior to the receipt by the Agent of any Condemnation Award or
insurance proceeds, the Lease shall have been terminated pursuant to
the provisions of Section 17.1 hereof, the Agent shall have the right
to receive such funds to the extent of (i) any deficiency found to be
due or amounts otherwise owing under the Lease or the Operative
Documents with interest thereon (whether or not a deficiency judgment
shall have been sought or recovered or denied), and (ii) necessary to
reimburse the Agent for its Expenses. The Lessee agrees to execute and
deliver from
22
time to time, upon the request of the Agent, such further instruments
or documents as may be requested by the Agent to confirm the grant and
assignment to the Agent of any Condemnation Awards or insurance
proceeds.
(b) If the Lessee shall receive notice of any Casualty or
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed twenty-five (25%) of
the Property Cost of such Property, the Lessee shall give notice
thereof to the Lessor promptly after Lessee's receipt of such notice.
In the event of such a Casualty or Condemnation (regardless of whether
notice is given as provided herein), the Lessee shall be deemed to have
delivered a Termination Notice to the Lessor and the provisions of
Sections 16.1 and 16.2 shall apply.
(c) In the event of a Casualty or Condemnation (regardless of
whether notice thereof must be given pursuant to the foregoing
subsection (b) hereof), this Lease shall terminate with respect to the
applicable Property in accordance with Section 16.1, if the Lessee,
within thirty (30) days after such occurrence, delivers to the Lessor a
notice to such effect.
(d) If pursuant to this Section, this Lease shall continue if
full force and effect following a Casualty or Condemnation with respect
to an affected Property, the Lessee shall restore the Property in
accordance with the provisions of Section 14.3.
(e) In no event shall a Casualty of Condemnation affect the
Lessee's obligations to pay Rent pursuant to Article III.
(f) Notwithstanding anything to the contrary set forth in
subsections (b) and (d) of this Section, if during the Term with
respect to a Property a Casualty occurs with respect to such Property
or the Lessee receives notice of a Condemnation with respect to such
Property, and following such Casualty or Condemnation, the applicable
Property cannot reasonably be restored, repaired or replaced on or
before the day one hundred eighty (180) days prior to the Expiration
Date or the date nine (9) months after the occurrence of such Casualty
or Condemnation (if such Casualty or Condemnation occurs during the
Term) to the same or a greater remaining economic value, useful life,
utility, condition, operation and function as existed immediately prior
to such Casualty or Condemnation (assuming all maintenance and repair
standards have been satisfied) or on or before such day such Property
is not in fact so restored, repaired or replaced, then Lessee shall be
required to exercise its Purchase Option for such Property on the next
Payment Date (notwithstanding the limits on such exercise contained in
Section 20.2) and pay Lessor the Termination Value for such Property;
provided, if any Default or Event of Default has occurred and is
continuing, Lessee shall also promptly (and in any event within three
(3) Business Days) pay Lessor any award, compensation or insurance
proceeds received on account of any Casualty or Condemnation with
respect to any Property; provided, further, that if no Default or Event
of Default has occurred and is continuing, any Excess Proceeds shall be
paid to Lessee. If a Default or an Event of Default has occurred and is
continuing and any Loans, Holder Advances or other amounts
23
are owing with respect thereto, then any Excess Proceeds (to the extent
of any such Loans, Holder Advances or other amounts owing with respect
thereto) shall be paid to Lessor, held as security for the performance
of Lessee's obligations hereunder and under the other Operative
Agreements and applied to such obligations upon the exercise of
remedies in connection with the occurrence of an Event of Default, with
the remainder of such Excess Proceeds in excess of such Loans, Holder
Advances and other amounts owing with respect thereto being distributed
to the Lessee.
(g) The provisions of this Section (a) through (f) shall not
apply to any Property until after the Construction Period Termination
Date applicable to such Property.
14.3 APPLICATION OF NET PROCEEDS.
At the sole discretion of the Agent, Net Proceeds must be
applied to either (a) be held as security for the performance of the Lessee's
obligations hereunder and under the other Operative Agreements and applied to
such obligations upon the exercise of remedies in connection with the occurrence
of an Event of Default, or (b) the restoration of the Property; provided,
however, that if the aggregate amount of Net Proceeds is less than $500,000
unless an Event of Default has occurred and is continuing, the Net Proceeds
shall be applied to the restoration. In the event that, and to the extent that,
Net Proceeds are to be applied to the restoration of the Property, each of the
following conditions must also be met and complied with if and to the extent
required by the Agent:
(a) An escrow account shall have been established with the
Agent composed of Net Proceeds, and, if necessary, additional deposits
made by the Lessee, which, in the sole judgment of the Agent, is
sufficient to restore the Property to its use, value and condition
immediately prior to the Casualty or Condemnation. The Agent shall be
entitled, at the expense of the Lessee, to consult such professionals
as the Agent may deem necessary, in its sole discretion, to determine
the total costs of restoring the Property. Interest will be paid on
funds in the escrow account. The Lessee hereby assigns to, and grants
the Agent a security interest in, such escrow account and the funds
therein to secure the payment and performance of the Lessee's
obligations hereunder and under the other Operative Agreements.
(b) (i) Either all Resident Agreements and Material Subleases
must continue in full force and effect (subject to rent abatement
during restoration as may be provided in the Resident Agreements and
the Material Subleases) or, if terminated, the terminated Material
Subleases must have been replaced with Material Subleases or equal
quality in the reasonable judgment of the Agent. Any tenant having the
right to terminate its Material Sublease due to the Casualty or
Condemnation, and which has not exercised that right, shall have
confirmed in writing to the Agent its irrevocable waiver of such
termination right, or proceeds from business interruption insurance or
other moneys of SALI, must be available to the Lessee in such amounts
as the Agent, in its reasonable judgment, considers sufficient to pay
the Termination Value relating to the Property, and
24
all Impositions, insurance premiums and other sums becoming due from
the Lessee pursuant to this Lease and the other Operative Agreements
during the time required for restoration, OR
(ii) Proceeds from business interruption insurance or
other moneys of the Lessee must be available to the Lessee in such
amounts as the Agent, in its reasonable judgment, considers sufficient
to pay the Termination Value relating to the Property, and all
Impositions, insurance premiums and other sums becoming due from the
Lessee pursuant to this Lease during the time required for restoration.
(c) All restoration will be conducted under the supervision of
an architect or engineer, or both, selected and paid for by the Lessee
and approved in advance by the Agent, and by a general contractor who
shall be approved by the Agent and shall have executed a fixed price
contract.
(d) The restoration will be performed pursuant to the original
plans and specifications approved by the Agent.
(e) If required by the Agent at its sole option, the
contractor or contractors responsible for the restoration shall have
obtained payment and performance bonds from a corporate surety
acceptable to the Agent and naming the Lessor, the Holders, the Lenders
and the Agent as dual obligees.
(f) The Lessee shall have provided the Agent with reasonably
satisfactory evidence that there has been no adverse change in the
economic viability of the Property since the date of this Lease, such
evidence to include, among other things, an appraisal and market study
prepared by a firm or firms acceptable to the Agent, but at the
Lessee's expense.
If any of the foregoing conditions are not satisfied, the Agent may, in its sole
discretion, hold the Net Proceeds as security for the performance of the
Lessee's obligations hereunder and under the other Operative Agreements and
applied to such obligations upon the exercise of remedies in connection with the
occurrence of an Event of Default.
If applied to restoration, Net Proceeds (and any other funds required
to be deposited with the Agent) shall be disbursed from time to time in
accordance with the terms and conditions of the construction loan agreement most
commonly used by the Agent or other regionally recognized construction lenders,
at the time of the Casualty or Condemnation for major commercial construction
loans, and subject also to the following conditions (which shall control in the
event of any conflict with the provisions of such construction loan agreement):
(a) Restoration shall commence within sixty (60) days
following receipt of the Net Proceeds by the Agent or such additional
time as may be required by Lessee in obtaining the necessary licenses,
permits or approvals from the applicable Governmental Authorities
provided the Lessee has and continues to diligently pursue obtaining
the
25
necessary licenses, permits and approvals, and shall be completed
within such time as may be determined by the Agent in view of the
extent of the Casualty or Condemnation but, in any event, shall be
completed within a reasonable period after the date of the Net Proceeds
are received.
(b) (i) At the time of each disbursement, (A) no Subleases (if
any) shall have been terminated which either singularly or in the
aggregate affect more than ten percent (10%) of the leaseable area of
the Property unless the same have been replaced with Subleases of equal
quality, in the reasonable judgment of the Agent, and (B) no Default
shall have occurred, OR
(ii) Proceeds from business interruption insurance or
other moneys of the Lessee must be available to the Lessee in such
amounts as the Agent, in its reasonable judgment, considers sufficient
to pay the Termination Value relating to the Property, and all
Impositions, insurance premiums and other sums becoming due from the
Lessee pursuant to this Deed of Trust during the time required for
restoration.
(c) Restoration involving costs in excess of $100,000 in the
aggregate shall be subject to the prior written consent of the Agent.
Any such restoration shall be completed and paid for, within a
reasonable time, following any such consent. Restoration of permitted
Improvements shall be (i) strictly in accordance with all applicable
Laws and any private restrictive covenants, (ii) entirely on lots or
parcels of the Land, (iii) so as not to encroach upon any easement or
right of way or upon the land of others, and (iv) wholly within any
building restriction lines applicable to the Land.
(d) With respect to each disbursement and accompanying each
request therefor, there shall be delivered to the Agent (i) a
certificate addressed to the Agent from the architect or engineer
supervising the restoration stating that such disbursement is to pay
the cost of restoration not paid previously by any prior disbursement,
that all restoration completed to the date of such certificate has been
completed in accordance with applicable Laws and the approved plans and
specifications, and that the amount of such disbursement, together with
all other disbursements, does not exceed ninety percent (90%) of the
requisition for direct construction costs until such time as fifty
percent (50%) of the restoration has been completed, then such
disbursements shall not exceed ninety-five percent (95%) of the
requisition for direct construction costs, and (ii) evidence
satisfactory to the Agent that all Claims then existing fro labor,
services and materials have been paid in full or will be paid in full
from the proceeds of the disbursement requested.
(e) The final holdback shall be disbursed only upon delivery
to the Agent, in addition to the items required in paragraph (d) above
and the Operative Agreements, of the following:
(i) Final waivers of Liens from all contractors and
subcontractors.
26
(ii) A certificate of architect or engineer stating
that the restoration has been completed in a good and workmanlike
manner, in accordance with the plans and specifications approved by the
Agent in accordance with applicable Laws.
(iii) An estoppel affidavit from each tenant
occupying or leasing space under a Material Sublease in the Property
stating that its Sublease is in full force and effect.
(f) Immediately upon the occurrence of any Event of Default,
the Agent may apply Net Proceeds and any other sums deposited with the
Agent to the repayment of the Lessee's obligations hereunder and under
the other Operative Agreements.
ARTICLE XV
15.1 ENVIRONMENTAL MATTERS.
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $15,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and diligently complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental Laws. Any such
undertaking shall be timely completed in accordance with prudent industry
standards. If Lessee does not deliver a Termination Notice with respect to such
Property pursuant to Section 16.1, Lessee shall, upon completion of remedial
action by Lessee, cause to be prepared by a reputable environmental consultant
acceptable to Lessor a report describing the Environmental Violation and the
actions taken by Lessee (or its agents) in response to such Environmental
Violation, and a statement by the consultant that the Environmental Violation
has been remedied in full compliance with applicable Environmental Law. Not less
than sixty (60) days prior to any time that Lessee elects to cease operations
with respect to any Property or to remarket any Property pursuant to Section
20.1 hereof or any other provision of any Operative Agreement, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental site
assessment respecting such Property recently prepared (no more than thirty (30)
days prior to the date of delivery) by an independent recognized professional
acceptable to Lessor in its reasonable discretion and in form, scope and content
satisfactory to Lessor in its reasonable discretion. Notwithstanding any other
provision of any Operative Agreement, if Lessee fails to comply with the
foregoing obligation regarding the Phase I environmental site assessment, Lessee
shall be obligated to
27
purchase such Property for its Termination Value and shall not be permitted to
exercise (and Lessor shall have no obligation to honor any such exercise) any
rights under any Operative Agreement regarding a sale of such Property to a
Person other than Lessee.
15.2 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from
the date Lessee has actual knowledge thereof, Lessee shall provide to Lessor
written notice of any pending or threatened claim, action or proceeding
involving any Environmental Law or any Release on or in connection with any
Property or Properties. All such notices shall describe in reasonable detail the
nature of the claim, action or proceeding and Lessee's proposed response
thereto. In addition, Lessee shall provide to Lessor, within five (5) Business
Days of receipt, copies of all material written communications with any
Governmental Authority relating to any Environmental Law in connection with any
Property. Lessee shall also promptly provide such detailed reports of any such
material environmental claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
If Lessee has delivered, or is deemed to have delivered,
written notice of a termination of this Lease with respect to the applicable
Property to Lessor in the form described in Section 16.2(a) (a "Termination
Notice") pursuant to the provisions of this Lease, then following the applicable
Casualty, Condemnation or Environmental Violation, this Lease shall terminate
with respect to the affected Property on the applicable Termination Date.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than ninety (90) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
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ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within five (5) days after notice
of such failure has been given to the Lessee by the Agent or any
Lender, or (ii) any Termination Value, on the date any such payment is
due and payable, or any payment of Basic Rent or Supplemental Rent due
on the due date of any such payment of Termination Value, or any amount
due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or
any other Credit Party shall fail to make any payment of any amount
under any Operative Agreement which has become due and payable within
five (5) days after receipt of notice that such payment is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual
certificate with respect thereto within ten (10) days of the date such
certificate is due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease or any
other Operative Agreement to which Lessee is a party other than those
set forth in Sections 17.1(a), (b) or (c) hereof, or any other Credit
Party shall fail to observe or perform any term, covenant, obligation
or condition of such Credit Party under any Operative Agreement other
than those set forth in Section 17.1(b) hereof and such failure shall
continue for thirty (30) days after notice thereof to the Lessee or
such Credit Party; provided, however, if (A) the nature of the failure
is such that it cannot be cured within the thirty (30) day period and
(B) the Lessee institutes corrective action within the thirty (30) day
period, then such failure shall not constitute a Lease Event of Default
unless the Lessee is unable to cure such failure within ninety (90)
days of such notice, or (ii) any representation or warranty made by
Lessee or any other Credit Party set forth in this Lease (including
without limitation the Incorporated Representation and Warranties) or
in any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way when made;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) A default which continues beyond any applicable grace
period shall be made under any obligation of or guaranteed by any
Credit Party or any Subsidiary of a Credit
29
Party equal to or greater than $250,000, if the effect of such default
is to accelerate the maturity of such obligation or to permit the
holder or obligee thereof to cause such obligation to become due prior
to its stated maturity, or a default shall be made under any obligation
of a consolidated Affiliate of any Credit Party equal to or greater
than $1,000,000, which is otherwise non-recourse to such Credit Party
or any of its Subsidiaries, if the holder or obligee with respect to
any such obligation has commenced an action on any remedies available
to such Person under the obligation;
(g) Any Credit Party shall (i) apply for or consent to the
appointment of a receiver, trustee or liquidator of itself or any of
its property, (ii) admit in writing its inability to pay its debts as
they mature, (iii) make a general assignment for the benefit of
creditors, (iv) be adjudicated a bankrupt or insolvent, (v) file a
voluntary petition in bankruptcy or a petition or an answer seeking or
consenting to reorganization or an arrangement with creditors or to
take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or an
answer admitting the material allegations of a petition filed against
it in any proceeding under any such law, or take corporate action for
the purposes of effecting any of the foregoing, or (vi) by any act
indicate its consent to, approval of or acquiescence in any such
proceeding or the appointment of any receiver of or trustee for any of
its property, or suffer any such receivership, trusteeship or
proceeding to continue undischarged for a period of sixty (60) days, or
(vii) by any act indicate its consent to, approval of or acquiescence
in any order, judgment or decree by any court of competent jurisdiction
or any Governmental Authority enjoining or otherwise prohibiting the
operation of a material portion of any Credit Party's business or the
use or disposition of a material portion of any Credit Party's assets;
(h) (i) An order for relief shall be entered in any
involuntary case brought against any Credit Party under the Bankruptcy
Code, or (ii) any such case shall be commenced against any Credit Party
and shall not be dismissed within sixty (60) days after the filing of
the petition, or (iii) an order, judgment or decree under any other Law
is entered by any court of competent jurisdiction or by any other
Governmental Authority on the application of a Governmental Authority
or of a Person other than a Credit Party or its Subsidiaries (A)
adjudicating any Credit Party bankrupt or insolvent, or (B) appointing
a receiver, trustee or liquidator of any Credit Party, or (B)
appointing a receiver, trustee or liquidator of any Credit Party, or of
a material portion of any Credit Party's assets, or (C) enjoining,
prohibiting or otherwise limiting the operation of a material portion
of any Credit Party's businesses or the use or disposition of a
material portion of any Credit Party's assets, and such order, judgment
or decree continues unstayed and in effect for a period of thirty (30)
days from the date entered;
(i) Any Credit Party shall liquidate, dissolve or terminate
its existence or any change occurs in management or control of SALI
without the prior written consent of the Agent and the Majority
Lenders;
30
(j) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of any Credit Party
pursuant to the terms of this Lease or any other Operative Agreement is
false or misleading in any material respect when made or delivered;
(k) Any Master Guaranty of Payment Event of Default shall have
occurred and be continuing and shall not have been waived;
(l) To the extent not adequately covered by insurance in the
reasonable determination of the Agent and the Majority Lenders, the
entry of a final judgment for the payment of money involving more than
$1,000,000 against any Credit Party or any Subsidiary of a Credit
Party, and the failure by such Credit Party or Subsidiary to discharge
the same, or case it to be discharged, within thirty (3) days from the
date of the order, decree or process under which or pursuant to which
such judgment was entered, or to secure a stay of execution pending
appeal of such judgment.
(m) Any Credit Party or any member of the Controlled Group
shall fail to pay when due an amount or amounts aggregating in excess
of $2,000,000 which it shall have become liable to pay to the PBGC or
to a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
Liabilities in excess of $2,000,000 shall be filed under Title IV of
ERISA by any Credit Party or any member of the Controlled Group, any
plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Pension Plan or
Pension Plans or a proceeding shall be instituted by a fiduciary of any
such Pension Plan or Pension Plans against any Credit Party or any
member of the Controlled Group to enforce Section 515 or 4219(c)(5) of
ERISA; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Pension Plan or
Pension Plans must be terminated;
(n) [RESERVED]
(o) Any Operative Agreement shall cease to be in full force
and effect;
(p) Except as to any Credit Party which is released in
connection with the Operative Agreements, the guaranty given by any
Guarantor under the Participation Agreement or any material provision
thereof shall cease to be in full force and effect, or any Guarantor or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any
Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any guaranty; or
(q) A default shall occur under any sublease (each a
"Sublease") of Property between Karrington and the Lessee; provided,
however, if the Lessee is diligently pursuing the termination of such
Sublease and the recovery of the applicable Property
31
from Karrington such default (a "Sublease Default") shall not
constitute a Lease Event of Default unless such Sublease has not been
terminated and the applicable Property recovered from Karrington within
90 days of the occurrence of the Sublease Default.
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h) or (i)), and this Lease shall terminate, and
all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor or any other Financing Party, including
without limitation reasonable fees and expenses of counsel, as a result of any
Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
Lessor possession of the Properties. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and personalty and severable Modifications from the Properties. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law. Upon the written demand of Lessor,
Lessee shall return the Properties promptly to Lessor, in the manner and
condition required by, and otherwise in accordance with the provisions of,
Section 22.1(c) hereof.
17.3 RELETTING.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
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17.4 DAMAGES.
Neither (a) the termination of this Lease as to all or any of
the Properties pursuant to Section 17.1; (b) the repossession of all or any of
the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve Lessee of its liabilities and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any Lease Event of
Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, Lessee shall forthwith pay
to Lessor all Rent and other sums due and payable hereunder to and including
without limitation the date of such termination. Thereafter, on the days on
which the Basic Rent or Supplemental Rent, as applicable, are payable under this
Lease or would have been payable under this Lease if the same had not been
terminated pursuant to Section 17.1 and until the end of the Term hereof or what
would have been the Term in the absence of such termination, Lessee shall pay
Lessor, as current liquidated damages (it being agreed that it would be
impossible accurately to determine actual damages) an amount equal to the Basic
Rent and Supplemental Rent that are payable under this Lease or would have been
payable by Lessee hereunder if this Lease had not been terminated pursuant to
Section 17.1, less the net proceeds, if any, which are actually received by
Lessor with respect to the period in question of any reletting of any Property
or any portion thereof; provided, that Lessee's obligation to make payments of
Basic Rent and Supplemental Rent under this Section 17.4 shall continue only so
long as Lessor shall not have received the amounts specified in Section 17.6. In
calculating the amount of such net proceeds from reletting, there shall be
deducted all of Lessor's, any Holder's, the Agent's and any Lender's reasonable
expenses in connection therewith, including without limitation repossession
costs, brokerage or sales commissions, fees and expenses for counsel and any
necessary repair or alteration costs and expenses incurred in preparation for
such reletting. To the extent Lessor receives any damages pursuant to this
Section 17.4, such amounts shall be regarded as amounts paid on account of Rent.
Lessee specifically acknowledges and agrees that its obligations under this
Section 17.4 shall be absolute and unconditional under any and all circumstances
and shall be paid and/or performed, as the case may be, without notice or demand
and without any abatement, reduction, diminution, setoff, defense, counterclaim
or recoupment whatsoever.
17.5 POWER OF SALE.
Without limiting any other remedies set forth in this Lease,
Lessor and Lessee agree that Lessee has granted, pursuant to Section 7.1(b)
hereof and each Lease Supplement, a Lien against the Properties WITH POWER OF
SALE, and that, upon the occurrence and during the continuance of any Lease
Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Properties.
17.6 FINAL LIQUIDATED DAMAGES.
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall
1
33
have collected any current liquidated damages pursuant to Section 17.4, Lessor
shall have the right to recover, by demand to Lessee and at Lessor's election,
and Lessee shall pay to Lessor, as and for final liquidated damages, but
exclusive of the indemnities payable under Section 11 of the Participation
Agreement (which, if requested, shall be paid concurrently), and in lieu of all
current liquidated damages beyond the date of such demand (it being agreed that
it would be impossible accurately to determine actual damages) the Termination
Value. Upon payment of the amount specified pursuant to the first sentence of
this Section 17.6, Lessee shall be entitled to receive from Lessor, either at
Lessee's request or upon Lessor's election, in either case at Lessee's cost, an
assignment of Lessor's entire right, title and interest in and to the
Properties, Improvements, Fixtures, Modifications, Equipment and all components
thereof, in each case in recordable form and otherwise in conformity with local
custom and free and clear of the Lien of this Lease (including without
limitation the release of any memoranda of Lease and/or the Lease Supplement
recorded in connection therewith) and any Lessor Liens. The Properties shall be
conveyed to Lessee "AS-IS, WHERE-IS" and in their then present physical
condition. If any statute or rule of law shall limit the amount of such final
liquidated damages to less than the amount agreed upon, Lessor shall be entitled
to the maximum amount allowable under such statute or rule of law; provided,
however, Lessee shall not be entitled to receive an assignment of Lessor's
interest in the Properties, the Improvements, Fixtures, Modifications, Equipment
or the components thereof unless Lessee shall have paid in full the Termination
Value. Lessee specifically acknowledges and agrees that its obligations under
this Section 17.6 shall be absolute and unconditional under any and all
circumstances and shall be paid and/or performed, as the case may be, without
notice or demand and without any abatement, reduction, diminution, setoff,
defense, counterclaim or recoupment whatsoever.
17.7 ENVIRONMENTAL COSTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such payment. The provisions of this Section 17.7
shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of
re-entry or the institution of legal proceedings to obtain re-entry or
possession; (b) any right of redemption, re-entry or possession; (c) the benefit
of any laws now or hereafter in force exempting property from liability for rent
or for debt; and (d) any other rights which might otherwise limit or modify any
of Lessor's rights or remedies under this Article XVII.
34
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor all of Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of the Properties (including without limitation
all right, title and interest of Lessee with respect to all warranty,
performance, service and indemnity provisions), as and to the extent that the
same relate to the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties or any of them.
17.10 REMEDIES CUMULATIVE.
The remedies herein provided shall be cumulative and in
addition to (and not in limitation of) any other remedies available at law,
equity or otherwise, including without limitation any mortgage foreclosure
remedies.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon any
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
out-of-pocket costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE
OPTION.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to any Property, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by deed or other appropriate instrument) of
Lessor's entire interest in
35
such Property, in each case in recordable form and otherwise in conformity with
local custom and free and clear of any Lessor Liens attributable to Lessor but
without any other warranties (of title or otherwise) from Lessor. Such Property
shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in then present physical
condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF A
PROPERTY.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting of
Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease but
shall be required to exercise its Purchase Option or the Sale Option with
respect to an entire Property.
ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than one hundred twenty (120) days and no more than
one hundred eighty (180) days prior to the Expiration Date or (respecting the
Purchase Option only) any Payment Date, Lessee may give Lessor irrevocable
written notice (the "Election Notice") that Lessee is electing to exercise
either (a) the option to purchase all, but not less than all, the Properties on
the Expiration Date or on the Payment Date specified in the Election Notice (the
"Purchase Option") or (b) with respect to an Election Notice given in connection
with the Expiration Date only, the option to remarket all, but not less than
all, the Properties to a Person other than Lessee or any Affiliate of Lessee and
cause a sale of such Properties to occur on the Expiration Date pursuant to the
terms of Section 22.1 (the "Sale Option"). If Lessee does not give an Election
Notice indicating the Purchase Option or the Sale Option at least one hundred
twenty (120) days and not more than one hundred eighty (180) days prior to the
Expiration Date, then, unless such Expiration Date is the final Expiration Date
to which the Term may be extended, the term of this Lease shall be extended in
accordance with Section 2.2 hereof; if such Expiration Date is the final
Expiration Date, then Lessee shall be deemed to have elected the Purchase
Option. If Lessee shall either (i) elect (or be deemed to have elected) to
exercise the Purchase Option or (ii) elect the Sale Option and fail to cause
all, but not less than all, the Properties to be sold in accordance with the
terms of Section 22.1 on the Expiration Date, then in either case Lessee (or its
designee) shall pay to Lessor on the date on which such purchase or sale is
scheduled to occur an amount equal to the Termination Value for all, but not
less than all, the Properties (which the parties do not intend to be a "bargain"
purchase price) and, upon receipt of such amounts and satisfaction of such
obligations, Lessor shall transfer to Lessee (or its designee) all of Lessor's
right, title and interest in and to all, but not less than all, the Properties
in accordance with Section 20.2.
20.2 LESSEE PURCHASE OPTION.
Provided, no Default or Event of Default shall have occurred
and be continuing (other than those that will be cured by the payment of the
Termination Value for all the
36
Properties) and provided, that the Election Notice has been appropriately given
specifying the Purchase Option, Lessee (or its designee) shall purchase all the
Properties on the Expiration Date or Payment Date at a price equal to the
Termination Value for such Properties (which the parties do not intend to be a
"bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to a Property or all of the
Properties, and upon tender by Lessee (or its designee) of the amounts set forth
in Section 16.2(b) or this Section 20.2, as applicable, Lessor shall execute,
acknowledge (where required) and deliver to Lessee (or its designee), at
Lessee's (or its designee) cost and expense, each of the following: (a) a
termination or assignment (as requested by the Lessee) of each applicable Ground
Lease and special or limited warranty Deeds conveying each Property (to the
extent it is real property not subject to a Ground Lease) to Lessee (or its
designee) free and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a Xxxx of Sale conveying each Property (to
the extent it is personal property) to Lessee (or its designee) free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (c) any real estate tax affidavit or other document required by law to be
executed and filed in order to record the applicable Deed and/or the applicable
Ground Lease termination; and (d) FIRPTA affidavits. All of the foregoing
documentation must be in form and substance reasonably satisfactory to Lessor.
The applicable Property shall be conveyed to Lessee (or its designee) "AS-IS,
WHERE-IS" and in then present physical condition.
If any Property is the subject of remediation efforts
respecting Hazardous Substances at the Expiration Date which could materially
and adversely impact the Fair Market Sales Value of such Property (with
materiality determined in Lessor's discretion), then Lessee shall be obligated
to purchase each such Property pursuant to Section 20.2.
On the Expiration Date and/or any Payment Date on which Lessee
has elected to exercise its Purchase Option, Lessee shall pay (or cause to be
paid) to Lessor, the Agent and all other parties, as appropriate, the sum of all
costs and expenses incurred by any such party in connection with the election by
Lessee to exercise its Purchase Option and all Rent and all other amounts then
due and payable or accrued under this Lease and/or any other Operative
Agreement.
20.3 THIRD PARTY SALE OPTION.
(a) Provided, that (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake
to cause a sale of the Properties on the Expiration Date (all as
specified in the Election Notice) in accordance with the provisions of
Section 22.1 hereof.
(b) In the event Lessee exercises the Sale Option then, as
soon as practicable and in all events not less than sixty (60) days
prior to the Expiration Date, Lessee at its
37
expense shall cause to be delivered to Lessor a Phase I environmental
site assessment for each of the Properties recently prepared or updated
(no more than thirty (30) days old prior to the Sale Date) by an
independent recognized professional reasonably acceptable to Lessor and
in form, scope and content reasonably satisfactory to Lessor. Lessor
(at the direction of the Agent) shall elect whether the costs incurred
respecting the above-referenced Phase I environmental site assessment
shall be paid by either (i) sales proceeds from the Properties, (ii)
Lessor (but only the extent amounts are available therefor with respect
to the Available Commitments and the Available Holder Commitments or
each Lender and each Holder approves the necessary increases in the
Available Commitments and the Available Holder Commitments to fund such
costs) or (iii) Lessee; provided, amounts funded by the Lenders and the
Holders with respect to the foregoing shall be added to the Property
Cost of each applicable Property; provided, further, amounts funded by
Lessee with respect to the foregoing shall be a part of (and limited
by) the Maximum Residual Guarantee Amount. In the event that Lessor
shall not have received such environmental site assessment by the date
sixty (60) days prior to the Expiration Date or in the event that such
environmental assessment shall reveal the existence of any material
violation of Environmental Laws, other material Environmental Violation
or potential material Environmental Violation (with materiality
determined in each case by Lessor in its reasonable discretion), then
Lessee on the Expiration Date shall pay to Lessor an amount equal to
the Termination Value for all the Properties and any and all other
amounts due and owing hereunder. Upon receipt of such payment and all
other amounts due under the Operative Agreements, Lessor shall transfer
to Lessee all of Lessor's right, title and interest in and to all the
Properties in accordance with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY OMITTED].
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of all the Properties in
connection with a sale to one (1) or more third party purchasers to be
consummated on the Expiration Date or such earlier date as is
acceptable to the Agent and the Lessee (the "Sale Date") for the
highest price available, shall notify Lessor promptly of the name and
address of each prospective purchaser and the cash price which each
prospective purchaser shall have offered to pay for each such Property
and shall provide Lessor with such additional information about the
bids and the bid solicitation procedure as Lessor may reasonably
request from time to time. All such prospective purchasers must be
Persons other than Lessee or any Affiliate of Lessee. On the Sale Date,
Lessee shall pay (or cause to be paid) to Lessor and all other parties,
as appropriate, all Rent and all other amounts then due and payable or
accrued
38
under this Lease and/or any other Operative Agreement and Lessor (at
the direction of the Agent) shall elect whether the costs and expenses
incurred by Lessor and/or the Agent respecting the sale of one or more
Properties shall be paid by either (i) sales proceeds from the
Properties, (ii) Lessor (but only the extent amounts are available
therefor with respect to the Available Commitments and the Available
Holder Commitments or each Lender and each Holder approves the
necessary increases in the Available Commitments and the Available
Holder Commitments to fund such costs and expenses) or (iii) Lessee;
provided, amounts funded by the Lenders and the Holders with respect to
such costs and expenses shall be added to the Property Cost of each
applicable Property; provided, further, amounts funded by Lessee with
respect to such costs and expenses shall be a part of (and limited by)
the Maximum Residual Guarantee Amount.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject the bids
submitted by Lessee if such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all the Properties,
and represent bona fide offers from one (1) or more third party
purchasers. If the highest price which a prospective purchaser or the
prospective purchasers shall have offered to pay for all the Properties
on the Sale Date is less than the sum of the Limited Recourse Amount
for all the Properties or if such bids do not represent bona fide
offers from one (1) or more third parties or if there are no bids,
Lessor may elect to retain one or more of the Properties by giving
Lessee prior written notice of Lessor's election to retain the same,
and promptly upon receipt of such notice, Lessee shall surrender, or
cause to be surrendered, each of the Properties specified in such
notice in accordance with the terms and conditions of Section 10.1.
Upon acceptance of any bid, Lessor agrees, at Lessee's request and
expense, to execute a contract of sale with respect to such sale, so
long as the same is consistent with the terms of this Article 22 and
provides by its terms that it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph,
Lessee shall arrange for Lessor to sell all the Properties free and
clear of the Lien of this Lease and any Lessor Liens attributable to
Lessor, without recourse or warranty (of title or otherwise), for cash
on the Sale Date to the purchaser or purchasers offering the highest
cash sales price, as identified by Lessee or Lessor, as the case may
be; provided, however, solely as to Lessor or the Trust Company, in its
individual capacity, any Lessor Lien shall not constitute a Lessor Lien
so long as Lessor or the Trust Company, in its individual capacity, is
diligently and in good faith contesting, at the cost and expense of
Lessor or the Trust Company, in its individual capacity, such Lessor
Lien by appropriate proceedings in which event the applicable Sale
Date, all without penalty or cost to Lessee, shall be delayed for the
period of such contest. To effect such transfer and assignment, Lessor
shall execute, acknowledge (where required) and deliver to the
appropriate purchaser each of the following: (a) special or limited
warranty Deeds conveying each such Property (to the extent it is real
property titled to Lessor) and an assignment of the Ground Lease
conveying the leasehold interest of Lessor in each such Property (to
the extent it is real property and subject to a Ground
39
Lease) to the appropriate purchaser free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (b) a
Xxxx of Sale conveying each such Property (to the extent it is personal
property) titled to Lessor to the appropriate purchaser free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any
Lessor Liens; (c) any real estate tax affidavit or other document
required by law to be executed and filed in order to record each Deed
and/or each Ground Lease assignment; and (d) FIRPTA affidavits, as
appropriate. All of the foregoing documentation must be in form and
substance reasonably satisfactory to Lessor. Lessee shall surrender the
Properties so sold or subject to such documents to each purchaser in
the condition specified in Section 10.1, or in such other condition as
may be agreed between Lessee and such purchaser. Lessee shall not take
or fail to take any action which would have the effect of unreasonably
discouraging bona fide third party bids for any Property. If each of
the Properties is not either (i) sold on the Sale Date in accordance
with the terms of this Section 22.1, or (ii) retained by Lessor
pursuant to an affirmative election made by Lessor pursuant to the
second sentence of the second paragraph of this Section 22.1(a), then
(x) Lessee shall be obligated to pay Lessor on the Sale Date an amount
equal to the aggregate Termination Value for all the Properties less
any sales proceeds received by the Lessor, and (y) Lessor shall
transfer each applicable Property to Lessee in accordance with Section
20.2.
(b) If the Properties are sold on a Sale Date to one (1) or
more third party purchasers in accordance with the terms of Section
22.1(a) and the aggregate purchase price paid for all the Properties is
less than the sum of the aggregate Property Cost for all the Properties
(hereinafter such difference shall be referred to as the "Deficiency
Balance"), then Lessee hereby unconditionally promises to pay to Lessor
on the Sale Date the lesser of (i) the Deficiency Balance, or (ii) the
Maximum Residual Guarantee Amount for all the Properties. On a Sale
Date if (x) Lessor receives the aggregate Termination Value for all the
Properties from one (1) or more third party purchasers, (y) Lessor and
such other parties receive all other amounts specified in the last
sentence of the first paragraph of Section 22.1(a) and (z) the
aggregate purchase price paid for all the Properties on such date
exceeds the sum of the aggregate Property Cost for all the Properties,
then Lessee may retain such excess. If one or more of the Properties
are retained by Lessor pursuant to an affirmative election made by
Lessor pursuant to the provisions of Section 22.1(a), then Lessee
hereby unconditionally promises to pay to Lessor on the Sale Date an
amount equal to the Maximum Residual Guarantee Amount for the
Properties so retained. Any payment of the foregoing amounts described
in this Section 22.1(b) shall be made together with a payment of all
other amounts referenced in the last sentence of the first paragraph of
Section 22.1(a).
(c) In the event that all the Properties are either sold to
one (1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date Lessee shall provide Lessor or such third
party purchaser (unless otherwise agreed by such third party purchaser)
with (i) all permits, certificates of occupancy, governmental licenses
and authorizations necessary to use, operate, repair, access and
maintain each such Property for the purpose it is being used by Lessee,
and (ii)
40
such manuals, permits, easements, licenses, intellectual property,
know-how, rights-of-way and other rights and privileges in the nature
of an easement as are reasonably necessary or desirable in connection
with the use, operation, repair, access to or maintenance of each such
Property for its intended purpose or otherwise as Lessor or such third
party purchaser(s) shall reasonably request (and a royalty-free license
or similar agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to Lessor or such third party purchaser(s), as
applicable, and shall be fully assignable (including without limitation
both primary assignments and assignments given in the nature of
security) without payment of any fee, cost or other charge. Lessee
shall also execute any documentation requested by Lessor or such third
party purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 APPLICATION OF PROCEEDS OF SALE.
In the event Lessee receives any proceeds of sale of any
Property, such proceeds shall be deemed to have been received in trust on behalf
of Lessor and Lessee shall promptly remit such proceeds to Lessor. Lessor shall
apply the proceeds of sale of any Property in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in connection
with the sale (to the extent Lessee has not satisfied its obligation to
pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in effect and
any Loans or Holder Advances or any amount is owing to the Financing
Parties under any Operative Agreement, to the Agent to be applied
pursuant to intercreditor provisions among Lessor, the Lenders and the
Holders contained in the Operative Agreements; and
(c) THIRD, to Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
If the proceeds of the sale described in Section 22.1 with
respect to the Properties shall be less than the Limited Recourse Amount with
respect to the Properties, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties shall have been impaired by greater than expected
wear and tear during the term of the Lease, Lessee shall pay to Lessor within
ten (10) days after receipt of Lessor's written statement (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Sale Proceeds Shortfall, whichever amount is less.
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22.4 APPRAISAL PROCEDURE.
For determining the Fair Market Sales Value of the Properties
or any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice from the other party of the
selection of its appraiser, then the appraisal by such appointed appraiser shall
be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within
twenty (20) days after both shall have been appointed, then a third appraiser
shall be selected by the two (2) appraisers or, failing agreement as to such
third appraiser within thirty (30) days after both shall have been appointed, by
the American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
Lessee; provided, that if the highest appraisal and the lowest appraisal are
equidistant from the third appraisal, the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee
shall be paid by Lessee; the fees and expenses of the appraiser appointed by
Lessor shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 13 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between Lessee and
Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay
Rent with respect to the Properties (including without limitation the
installment of Basic Rent due on the Expiration Date) shall continue
undiminished until payment in full to Lessor of the sale proceeds, if any, the
Maximum Residual Guarantee Amount, the amount due under Section 22.3, if any,
and all other amounts due to Lessor or any other Person with respect to all
Properties or any Operative Agreement. Lessor shall have the right, but shall be
under no duty, to solicit bids, to inquire into the efforts of Lessee to obtain
bids or otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
ARTICLE XXIII
23.1 HOLDING OVER.
If Lessee shall for any reason remain in possession of a
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to Lessee), such possession shall be
as a tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were
42
the Lease then in full force and effect with respect to such Property and Lessee
shall continue to pay Basic Rent at the lesser of the highest lawful rate and
one hundred ten percent (110%) of the last payment of Basic Rent due with
respect to such Property prior to such expiration or earlier termination of this
Lease. Such Basic Rent shall be payable from time to time upon demand by Lessor
and such additional amount of Basic Rent shall be applied by Lessor ratably to
the Lenders and the Holders based on their relative amounts of the then
outstanding aggregate Property Cost for all Properties. During any period of
tenancy at sufferance, Lessee shall, subject to the second preceding sentence,
be obligated to perform and observe all of the terms, covenants and conditions
of this Lease, but shall have no rights hereunder other than the right, to the
extent given by law to tenants at sufferance, to continue their occupancy and
use of such Property. Nothing contained in this Article XXIII shall constitute
the consent, express or implied, of Lessor to the holding over of Lessee after
the expiration or earlier termination of this Lease as to any Property (unless
such Property is conveyed to Lessee) and nothing contained herein shall be read
or construed as preventing Lessor from maintaining a suit for possession of such
Property or exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS.
During the Term, unless Lessee shall not be in actual
possession of any Property in question solely by reason of Lessor's exercise of
its remedies of dispossession under Article XVII, the risk of loss or decrease
in the enjoyment and beneficial use of such Property as a result of the damage
or destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1
or otherwise) or other relinquishment of possession to any Property
shall in any way discharge or diminish any of the obligations of Lessee
to Lessor hereunder and Lessee shall remain directly and primarily
liable under the Operative Agreements as to any rights or obligations
assigned by Lessee or regarding any Property in which rights or
obligations have been assigned or otherwise transferred.
43
25.2 SUBLEASES.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Properties described in such Lease Supplement from
Lessor, and any existing tenant respecting such Property shall
automatically be deemed to be a subtenant of Lessee and not a tenant of
Lessor.
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor and subject to the other provisions of
this Section 25.2, Lessee may sublet any Property or portion thereof to
any wholly-owned Subsidiary of Lessee or to Karrington. Except as
referenced in the immediately preceding sentence, no other subleases
shall be permitted unless consented to in writing by Lessor. All
subleasing shall be done on market terms and shall in no way diminish
the fair market value or useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet. During the Basic
Term, the term of any such sublease shall not extend beyond the Basic
Term. During any Renewal Term, the term of any such sublease shall not
extend beyond such Renewal Term. Each sublease shall be expressly
subject and subordinate to this Lease.
ARTICLE XXVI
26.1 NO WAIVER.
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
No surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or the Agent or any representative or agent of
44
Lessor or the Agent, other than a written acceptance, shall constitute an
acceptance of any such surrender.
27.2 NO MERGER OF TITLE.
There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS.
Reference is made to the Master Guaranty of Payment and the
representations and warranties of Lessee contained in Article 2 of the Master
Guaranty of Payment (hereinafter referred to as the "Incorporated
Representations and Warranties"). Lessee agrees with Lessor that the
Incorporated Representations and Warranties (and all other relevant provisions
of the Master Guaranty of Payment related thereto, including without limitation
the defined terms which are used in the Incorporated Representations and
Warranties, referred to as the "Additional Incorporated Terms") are hereby
incorporated by reference into this Lease to the same extent and with the same
effect as if set forth fully herein and shall inure to the benefit of Lessor,
without giving effect to any waiver, amendment, modification or replacement of
the Master Guaranty of Payment or any term or provision of the Incorporated
Representations and Warranties occurring subsequent to the date of this Lease,
except to the extent otherwise specifically provided in the following provisions
of this paragraph. In the event a waiver is granted under the Master Guaranty of
Payment or an amendment or modification is executed with respect to the Master
Guaranty of Payment, and such waiver, amendment and/or modification affects the
Incorporated Representations and Warranties or the Additional Incorporated
Terms, then such waiver, amendment or modification shall be effective with
respect to the Incorporated Representations and Warranties and the Additional
Incorporated Terms as incorporated by reference into this Lease only if
consented to in writing by the Agent (acting upon the direction of the Majority
Secured Parties). In the event of any replacement of the Master Guaranty of
Payment with a similar arrangement (the "New Facility") the representations and
warranties, covenants and additional terms contained in the New Facility which
correspond to the representations and warranties contained in Article 2 and such
additional terms (each of the foregoing contained in the Master Guaranty of
Payment) shall become the Incorporated Representations and Warranties and the
Additional Incorporated Terms only if consented to in writing by the Agent
(acting upon the direction of the Majority Secured Parties) and, if such consent
is not granted or if the Master Guaranty of Payment is terminated and not
replaced, then the representations and warranties and covenants contained in
Article 2 and such additional terms (each of the foregoing contained in the
Master Guaranty of Payment (together with any modifications or amendments
approved in
45
accordance with this paragraph)) shall continue to be the Incorporated
Representations and Warranties and the Additional Incorporated Terms hereunder.
ARTICLE XXIX
29.1 NOTICES.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 MISCELLANEOUS.
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any provision of
this Lease shall be held to be unenforceable in any jurisdiction, such
unenforceability shall not affect the enforceability of any other provision of
this Lease and such jurisdiction or of such provision or of any other provision
hereof in any other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS.
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
This Lease may be executed in any number of counterparts, each
of which shall be an original, but all of which shall together constitute one
(1) and the same instrument.
46
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA, EXCEPT TO THE
EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE REQUIRED
TO APPLY.
30.7 CALCULATION OF RENT.
All calculation of Rent payable hereunder shall be computed
based on the actual number of days elapsed over a year of three hundred
sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
This Lease shall not be recorded; provided, Lessor and Lessee
shall promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to Lessor) regarding
each Property promptly after the acquisition thereof in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under applicable law to sufficiently evidence this Lease and any such Lease
Supplement in the applicable real estate filing records. Lessor (at the
direction of the Agent) shall elect whether the costs and expenses incurred by
Lessor and/or the Agent respecting the recordation of the above-referenced items
shall be paid by either (i) Lessor (but only the extent amounts are available
therefor with respect to the Available Commitments and the Available Holder
Commitments or each Lender and each Holder approves the necessary increases in
the Available Commitments and the Available Holder Commitments to fund such
costs and expenses) or (ii) Lessee; provided, amounts funded by the Lenders and
the Holders with respect to such costs and expenses shall be added to the
Property Cost of each applicable Property; provided, further, amounts funded by
Lessee with respect to such costs and expenses shall be a part of (and limited
by) the Maximum Residual Guarantee Amount.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
Notwithstanding any other term or provision of this Lease to
the contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
Notwithstanding anything contained in this Lease to the
contrary, Lessee agrees to look solely to Lessor's estate and interest in the
Properties (and in no circumstance to the Agent, the Lenders, the Holders or
otherwise to Lessor) for the collection of any judgment requiring the
47
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the foregoing shall be subject to levy, execution or other
enforcement procedure for the satisfaction of the remedies of Lessee under or
with respect to this Lease, the relationship of Lessor and Lessee hereunder or
Lessee's use of the Properties or any other liability of Lessor to Lessee.
Nothing in this Section shall be interpreted so as to limit the terms of
Sections 6.1 or 6.2 or the provisions of Section 12.9 of the Participation
Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
Lessee hereby acknowledges and agrees that the rights and
powers of Lessor under this Lease have been assigned to the Agent pursuant to
the terms of the Security Agreement and the other Operative Agreements. Lessor
and Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to the provisions of
Sections 8.2(h) and 8.6 of the Participation Agreement, (b) all notices to be
given to Lessor shall be given to the Agent and (c) all notices to be given by
Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE
HEREIN, MUTATIS MUTANDIS.
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH
48
AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR
ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION
PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY
INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS LEASE
OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE
LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR
ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS
OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE
PROVISIONS OF THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS
SHALL BE AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS
LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
[SIGNATURE PAGE FOLLOWS]
49
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as the
Owner Trustee under the Sunrise Trust 1998-1, as
Lessor
By: /s/ XXX X. XXXXX
----------------------------------------
Name: Xxx X. Xxxxx
--------------------------------------
Title: Vice President
-------------------------------------
SUNRISE MIDWEST LEASING, L.L.C.
by Sunrise Assisted Living Investments, Inc.,
as Sole Member
By: /s/ XXXXX X. XXXX
----------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
Title: Senior Vice President
-------------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
NATIONSBANK, N.A.,
as the Agent
By: /s/ XXXXXX X. XXXX
------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------
Title: Senior Vice President
---------------------------------
50
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
___________, 199__ between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
Sunrise Trust 1998-1, as lessor (the "Lessor"), and SUNRISE MIDWEST LEASING,
L.L.C., a Virginia limited liability company, as lessee (the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of December 2, 1998, among Lessee, Sunrise Assisted Living, Inc., as
Guarantor, Lessor, not individually, except as expressly stated therein, but
solely as the Owner Trustee under the Sunrise Trust 1998-1, the various banks
and other lending institutions which are parties thereto from time to time, as
the Holders, the various banks and other lending institutions which are parties
thereto from time to time, as the Lenders, and NationsBank, N.A., as the Agent
for the Lenders and respecting the Security Documents, as the Agent for the
Lenders and Holders, to the extent of their interests, as such may be amended,
modified, extended, supplemented, restated and/or replaced from time to time.
SECTION 2. THE PROPERTIES. Attached hereto as Schedule 1 is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and [A
LEGAL DESCRIPTION OF THE LAND / A COPY OF THE GROUND LEASE] attached hereto as
Schedule 1-C. Effective upon the execution and delivery of this Lease Supplement
by Lessor and Lessee, the Leased Property shall be subject to the terms and
provisions of the Lease. Without further action, any and all additional
Equipment funded under the Operative Agreements and any and all additional
Improvements made to the Land shall be deemed to be titled to the Lessor and
subject to the terms and conditions of the Lease and this Lease Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust,
security agreement and financing statement under the laws of the state in which
the Leased Property is situated. The maturity date of the obligations secured
hereby shall be [___________].
For purposes of provisions of the Lease and this Lease Supplement
related to the creation and enforcement of the Lease and this Lease Supplement
as a security agreement and a fixture
51
filing, Lessee is the debtor and Lessor is the secured party. The mailing
addresses of the debtor (Lessee herein) and of the secured party (Lessor herein)
from which information concerning security interests hereunder may be obtained
are set forth on the signature pages hereto. A carbon, photographic or other
reproduction of the Lease and this Lease Supplement or of any financing
statement related to the Lease and this Lease Supplement shall be sufficient as
a financing statement for any of the purposes referenced herein.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided, that such exercise will not
impair the value of such Property) shall be permitted to exercise all rights and
remedies under, all operation and easement agreements and related or similar
agreements applicable to such Property.
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE
OF VIRGINIA, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR
PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. MORTGAGE; POWER OF SALE. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee hereby grants a Lien against the Leased Property WITH POWER OF SALE, and
that, upon the occurrence of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.
SECTION 8. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
52
For purposes of the provisions of this Lease Supplement concerning this
Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
53
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as the
Owner Trustee under the Sunrise Trust 1998-1, as
Lessor
By: ____________________________________
Name: __________________________________
Title: _________________________________
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxx X. Xxxxx
Vice President
SUNRISE MIDWEST LEASING, L.L.C.,
as Lessee
by Sunrise Assisted Living Investments, Inc.
as Sole Member
By: ____________________________________
Name: __________________________________
Title: _________________________________
SUNRISE MIDWEST LEASING, L.L.C.
c/o Sunrise Assisted Living Investments, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
54
Receipt of this original counterpart
of the foregoing Lease Supplement
is hereby acknowledged as the date hereof.
NATIONSBANK, N.A., as the Agent
By: ____________________________________
Name: __________________________________
Title: _________________________________
NationsBank, N.A.
00 Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxxxxx 21202-1499
Attn: Xxxxxx Xxxx
55
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not individually,
but solely as the Owner Trustee under the Sunrise Trust 1998-1, on behalf of the
Owner Trustee.
[Notarial Seal] ____________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of SUNRISE ASSISTED
LIVING INVESTMENTS, INC., a Delaware corporation, as Sole Member of SUNRISE
MIDWEST LEASING, L.L.C., a Virginia limited liability company, on behalf of the
limited liability company.
[Notarial Seal] ____________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ________________ this ____ day of
___________, by _____________, as __________________ of NATIONSBANK, N.A., a
national banking association, as the Agent.
[Notarial Seal] ____________________________________
Notary Public
My commission expires: ____________
56
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
57
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
58
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
59
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)/
(GROUND LEASE)]
60
EXHIBIT B TO THE LEASE
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
Xxxxx & Xxx Xxxxx, PLLC
After recordation return to:
Xxxxx & Xxx Xxxxx, PLLC (WMA)
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000-0000
Space above this line
for Recorder's use
--------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT NO. ____
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. ____
("Memorandum"), dated as of _____________, 199___, is by and between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the Sunrise Trust 1998-1,
with an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (hereinafter
referred to as "Lessor") and SUNRISE MIDWEST LEASING, L.L.C., a Virginia limited
liability company, with an office at 0000 Xxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000 (hereinafter referred to as "Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise
and agree as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee, and
Lessee has leased from Lessor, for the Term (as hereinafter defined), certain
real property and other property located in ________________, which is described
in the attached Schedule 1 (the "Property"), pursuant to the terms of a Lease
Agreement between Lessor and Lessee dated as of __________, 1998 (as such may be
amended, modified, extended, supplemented, restated and/or replaced from time to
time, "Lease") and a Lease Supplement No. ____ between Lessor and Lessee dated
as of ______________ (the "Lease Supplement").
61
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated. The maturity date of the obligations secured
thereby shall be ___________.
For purposes of provisions of the Lease and the Lease Supplement
related to the creation and enforcement of the Lease and the Lease Supplement as
a security agreement and a fixture filing, Lessee is the debtor and Lessor is
the secured party. The mailing addresses of the debtor (Lessee herein) and of
the secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are as set forth on the signature pages
hereof. A carbon, photographic or other reproduction of this Memorandum or of
any financing statement related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
2. TERM, RENEWAL, EXTENSION AND PURCHASE OPTION. The term of the Lease
for the Property ("Term") commenced as of __________, 19__ and shall end as of
_________, 19__, unless the Term is extended or earlier terminated in accordance
with the provisions of the Lease. The tenant has a purchase option under the
Lease.
3. TAX PAYER NUMBERS.
Lessor's tax payer number: __________________.
Lessee's tax payer number: __________________.
4. MORTGAGE; POWER OF SALE. Without limiting any other remedies set
forth in the Lease, in the event that a court of competent jurisdiction rules
that the Lease constitutes a mortgage, deed of trust or other secured financing
as is the intent of the parties, then Lessor and Lessee agree that Lessee has
granted, pursuant to the terms of the Lease and the Lease Supplement, a Lien
against the Property WITH POWER OF SALE, and that, upon the occurrence and
during the continuance of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Property.
5. EFFECT OF MEMORANDUM. The purpose of this instrument is to give
notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. This Memorandum shall not modify in any
manner the terms, conditions or intent of the Lease or the Lease Supplement and
the parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement.
[The remainder of this page has been intentionally left blank.]
62
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument as of the day and year first written.
LESSOR:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as the
Owner Trustee under the Sunrise Trust 1998-1
By: ____________________________________
Name: __________________________________
Title: _________________________________
First Security Bank, National Association
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxx X. Xxxxx
Vice President
LESSEE:
SUNRISE MIDWEST LEASING, L.L.C.
by Sunrise Assisted Living Investments, Inc.,
as Sole Member
By: ____________________________________
Name: __________________________________
Title: _________________________________
SUNRISE MIDWEST LEASING, L.L.C.
c/o Sunrise Assisted Living Investments, Inc.
0000 Xxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
63
SCHEDULE 1
(Description of Property)
64
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
Sunrise Trust 1998-1, on behalf of the Owner Trustee.
[Notarial Seal] ____________________________________
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of SUNRISE ASSISTED LIVING INVESTMENTS, INC., a Delaware
corporation, as Sole Member of SUNRISE MIDWEST LEASING, L.L.C., a Virginia
limited liability company, on behalf of the limited liability company.
[Notarial Seal] ____________________________________
Notary Public
My commission expires:____________
