Exhibit 4.15
MASTER LEASE AND SECURITY AGREEMENT
THIS MASTER LEASE AND SECURITY AGREEMENT (this "Lease"), dated as of
March 19, 1998, is entered into between RAC LEASING LLC, a Wyoming limited
liability Company, as the Lessor, and RITE AID REALTY CORP., a Delaware
corporation, as the Lessee.
W I T N E S S E T H:
WHEREAS, the Lessor wishes to finance the acquisition of the assets
described on Annex 1;
WHEREAS, the Lessor may in the future agree with the Lessee to
finance (i) the development of certain real property and construction of
improvements to be used by the Lessee and (ii) the acquisition of certain
equipment and systems related to such real property and improvements and
(iii) the acquisition of certain other assets to be used by the Lessee;
WHEREAS, the Lessee, as Construction Agent, will construct any such
improvements which, as constructed, will be the property of the Lessor and
will become part of the Leased Assets subject to the terms of this Lease;
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
desires to lease from the Lessor, the Leased Assets from time to time
subject to this Lease; and
WHEREAS, the Lessee is a wholly-owned direct subsidiary of Rite Aid
Corporation, and Rite Aid Corporation is willing to guarantee the payment
and performance of all of the Lessee's obligations hereunder and under the
other documents entered into by the Lessee in connection herewith;
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
DEFINITIONS
1.1 Definitions; Interpretation. Capitalized terms used but not
otherwise defined in this Lease have the respective meanings specified in
Appendix 1 to this Lease; and the rules of interpretation set forth in
Appendix 1 to this Lease shall apply to this Lease.
ARTICLE II
PURCHASE AND LEASE
2.1 Acceptance and Lease of Assets. (a) Properties. Subject to the
terms and conditions of this Lease, on each Acquisition Date for a parcel
of Land (i) the Lessor shall purchase a fee interest in such parcel of
Land, or the Lessee shall convey a leasehold interest in such parcel of
Land to the Lessor pursuant to a Ground Lease, and the Lessor shall accept
delivery of, such Land pursuant to the terms hereof (and subject to the
conditions set forth herein) and (ii) the Lessor shall demise and lease to
the Lessee hereunder for the Base Term applicable thereto the Lessor's
interest in such Land together with any Improvements which then may be
located thereon or thereafter may be constructed thereon pursuant to the
Construction Agency Agreement or this Lease, and the Lessee hereby agrees,
expressly for the direct benefit of the Lessor, to lease from the Lessor
for such Base Term, the Lessor's interest in such Land together with the
Lessor's interest in such Improvements.
(b) Equipment and Systems. Subject to the terms and
conditions of this Lease, from time to time after the Acquisition Date for
any Property and on or before the Base Date therefor, (i) the Lessor shall
purchase Equipment and Systems relating to such Property pursuant to the
terms hereof (and subject to the conditions set forth herein) and (ii) the
Lessor shall demise and lease to the Lessee hereunder for the Base Term
applicable thereto the Lessor's interest in such Equipment and Systems, and
the Lessee hereby agrees, expressly for the direct benefit of the Lessor,
to lease from the Lessor for such Base Term, the Lessor's interest in such
Equipment and Systems.
(c) Additional Assets. Subject to the terms and
conditions of this Lease, on each Acquisition Date for any Other Asset not
constituting Equipment and Systems (i) the Lessor shall purchase such Other
Asset pursuant to the terms hereof (and subject to the conditions set forth
herein) and (ii) the Lessor shall demise and lease to the Lessee hereunder
for the Base Term applicable thereto the Lessor's interest in such Other
Asset, and the Lessee hereby agrees, expressly for the direct benefit of
the Lessor, to lease from the Lessor for such Base Term, the Lessor's
interest in such Other Asset.
2.2 Acceptance Procedure. The Lessee hereby agrees that the execution
and delivery by the Lessee on each Acquisition Date of an appropriately
completed Lease Supplement shall, without further act, constitute the
unconditional and irrevocable acceptance by the Lessee of all of the Leased
Asset which is the subject of such Lease Supplement for all purposes of
this Lease and the other Operative Documents on the terms set forth therein
and herein, and that all of such Leased Assets shall be deemed to be
included in the leasehold estate of this Lease and shall be subject to the
terms and conditions of this Lease as of the applicable Acquisition Date
(or, in the case of any asset constituting Equipment and Systems, as of
such later date on which such asset is acquired by the Lessor).
2.3 Lease Term. This Lease shall be in full force and effect on the
Closing Date. The Base Date and the Base Term for each Leased Asset shall
be set forth in the applicable Lease Supplement therefor.
2.4 Title. Each Leased Asset is leased to the Lessee without, except
as expressly set forth herein, any representation or warranty, express or
implied, by the Lessor and subject to the rights of parties in possession,
the existing state of title (including, without limitation, Permitted Liens
other than Lessor Liens) and all applicable Requirements of Law. The Lessee
shall in no event have any recourse against the Lessor for any defect in or
exception to title to any Leased Asset other than to the extent resulting
from Lessor Liens.
ARTICLE III
FUNDING OF ADVANCES
3.1 Lessor Commitment. Subject to the conditions and terms hereof,
the Lessor shall, upon the written request of the Lessee from time to time,
make Advances on Funding Dates for the purpose of (i) in the case of any
Property, financing the acquisition, ownership, insurance, renovation and
improvement of such Property during the Construction Period applicable
thereto, (ii) in the case of any Equipment and Systems, financing the
acquisition, ownership and insurance of any asset constituting Equipment
and Systems during the Construction Period for the related Property and
(iii) in the case of any Other Asset not constituting Equipment and
Systems, financing the acquisition of such Other Asset. Notwithstanding any
other provision hereof, the Lessor shall not be obligated to make any
Advance if, after giving effect thereto, the aggregate original amounts of
Advances (x) with respect to the Leased Asset to be funded thereby would
exceed the Lessor's Commitment relating thereto or (y) with respect to all
Leased Assets would exceed the Lessor's Total Commitment. Notwithstanding
anything herein to the contrary, until the Lessee shall have executed and
delivered to the Lessor and to Sumitomo Bank Leasing and Finance, Inc., in
its capacity as lessor under the Existing Master Lease, amendments to this
Lease and the Existing Master Lease necessary to effect the Leased Asset
Transfer, the Lessor's Total Commitment shall be $100,000,000.
3.2 Procedures for Advances. (a) With respect to each funding of an
Advance, the Lessee shall give the Lessor and the Paying Agent prior
written notice not later than 3:00 p.m., New York City time, five (5)
Business Days prior to the date of the proposed funding, pursuant to a
Funding Request substantially in the form of Exhibit A (a "Funding
Request"), specifying: (i) the proposed Funding Date (the "Funding Date"),
(ii) the amount of Advance requested, (iii) whether such proposed Funding
Date will also be an Acquisition Date, (iv) the Leased Asset to which such
Advance is being allocated and the allocation of such Advance among the
various categories of costs and expenses listed in clause (c) below, (v)
the allocation of the Debt Contribution between CP Tranches and Eurodollar
Tranches and (vi) the requested Interest Periods for such CP Tranches. With
respect to any Funding Request related to the acquisition of a Property, in
addition to the foregoing, the Lessee shall also specify: (i) the Property
to be acquired, (ii) whether the Land component thereof is to be acquired
through a fee interest or Ground Lease, (iii) the seller and/or ground
lessor of the Property, and (iv) the Estimated Improvement Costs for such
Property.
(b) Except as the parties may otherwise agree in writing,
and except for the initial Funding Date for any Leased Asset and Funding
Dates caused by the maturity of a CP Tranche on a date other than a
Scheduled Payment Date, each Funding Date shall occur on a Scheduled
Payment Date.
(c) Advances shall be made solely to pay or reimburse the
Construction Agent or the Lessee for (i) Land Acquisition Costs and
Property Improvement Costs (including Capitalized Interest and Capitalized
Commitment Fees relating to any Property), (ii) Other Asset Acquisition
Costs (including Capitalized Interest and Capitalized Commitment Fees
relating to Equipment and Systems) and (iii) Transaction Expenses paid or
payable by the Lessee in connection with the preparation, execution and
delivery of the Operative Documents and all fees paid or payable by the
Lessee to the Paying Agent and the Lessor in connection with the Operative
Documents.
(d) All remittances made by the Lessor for the funding of
any Advance shall be made through the Paying Agent on the applicable
Funding Date in immediately available federal funds by wire transfer to the
account designated by the Lessee except that a portion of the initial
Advance shall be made (in accordance with instructions to be included in
the initial Funding Request) by wire transfer directly to the appropriate
Persons for Transaction Expenses.
(e) Notwithstanding anything in this Lease or any other
Operative Document to the contrary, with respect to the Aircraft listed on
Annex 1 hereto, the Lessee may, until the Base Date for such Aircraft,
request Advances to pay the cost of outfitting such Aircraft to the
Lessee's specifications, and to pay Capitalized Interest and Capitalized
Commitment Fees relating thereto, as if such Aircraft constituted Equipment
and Systems under this Lease. Any such Advance shall constitute an Advance
for all purposes of this Lease and the other Operative Documents.
(f) Notwithstanding anything to the contrary in this
Lease and the Operative Documents, the Lessee may request up to two
Advances, one on the date hereof and another on the immediately succeeding
day, solely for the purpose of paying agreed fees and expenses and to make
one or more deposits on Aircraft not to exceed $2,500,000. Any such Advance
shall constitute an Advance for all purposes under this Lease and the
Operative Documents. Such fees and expenses may be allocated for inclusion
in the Lease Balance for one or more Leased Assets.
ARTICLE IV
CONDITIONS PRECEDENT TO
CLOSING DATE, ACQUISITION DATES AND ADVANCES
4.1 Closing Date. The closing date (the "Closing Date") shall occur
on the earliest date on which the following conditions precedent shall have
been satisfied or waived in the reasonable discretion of the parties
hereto:
(a) Master Lease. This Lease shall have been duly
authorized, executed and delivered by the parties hereto.
(b) Master Construction Agency Agreement. The
Construction Agency Agreement shall have been duly authorized, executed and
delivered by the parties hereto.
(c) Guaranty. The Guaranty shall have been duly
authorized, executed and delivered by the Guarantor.
(d) Responsible Employee's Certificate of Lessee. The
Lessor shall have received a Responsible Employee's Certificate of the
Lessee, in substantially the form of Exhibit E, stating that (i) each and
every representation and warranty of the Lessee contained in each Operative
Document to which it is a party is true and correct on and as of the
Closing Date; (ii) no Default or Event of Default has occurred and is
continuing under any Operative Document to which it is a party; (iii) each
Operative Document to which the Lessee is a party is in full force and
effect with respect to it; and (iv) the Lessee has duly performed and
complied with all covenants, agreements and conditions contained herein or
in any Operative Document required to be performed or complied with by it.
(e) Resolutions and Incumbency Certificate, etc. of
Lessee. The Lessee shall have delivered to the Lessor (i) a certificate of
its Secretary or an Assistant Secretary attaching and certifying as to (A)
the resolutions of its Board of Directors duly authorizing the execution,
delivery and performance by it of each Operative Document to which it is or
will be a party, (B) its certificate of incorporation and by-laws, and (C)
the incumbency and signature of persons authorized to execute and deliver
on its behalf the Operative Documents to which it is a party and (ii) a
certificate of good standing with respect to it issued by the Secretary of
State of the State of its incorporation.
(f) Responsible Employee's Certificate of Guarantor. The
Lessor shall have received a Responsible Employee's Certificate of the
Guarantor, in substantially the form of Exhibit F, stating that (i) each
and every representation and warranty of the Guarantor contained in each
Operative Document to which it is a party is true and correct on and as of
the Closing Date; (ii) each Operative Document to which the Guarantor is a
party is in full force and effect with respect to it; and (iii) the
Guarantor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Document required to be
performed or complied with by it.
(g) Resolutions and Incumbency Certificate, etc. of
Guarantor. The Guarantor shall have delivered to the Lessor (i) a
certificate of its Secretary or an Assistant Secretary attaching and
certifying as to (A) the resolutions of its Board of Directors duly
authorizing the execution, delivery and performance by it of each Operative
Document to which it is or will be a party, (B) its certificate of
incorporation and by-laws, and (C) the incumbency and signature of persons
authorized to execute and deliver on its behalf the Operative Documents to
which it is a party and (ii) a certificate of good standing with respect to
it issued by the Secretary of State of the State of its incorporation.
(h) Opinions of Counsel. Wolf, Block, Xxxxxx and Xxxxx-
Xxxxx, special counsel to the Lessee, internal counsel for the Company,
Wolf, Block, Xxxxxx and Xxxxx-Xxxxx, special counsel to the Guarantor, and
internal counsel for the Guarantor shall each have issued to the Lessor and
the Receivable Purchaser an opinion in form and scope satisfactory to the
Lessor.
(i) Lessor Fee Letter. The Lessor Fee Letter shall have
been duly authorized, executed and delivered by the Lessor, the Lessee and
the Guarantor, and the Lessor shall have received that portion of the fees
payable thereunder on the date hereof.
4.2 Acquisition Date Conditions. (a) All Assets. The occurrence of
each Acquisition Date with respect to any Leased Asset is subject to the
following conditions precedent:
(i) Lease Supplement. The Lease Supplement relating
to such Leased Asset shall have been duly executed and delivered by
the parties hereto.
(ii) Appraisal. The Lessor shall have received an
Appraisal of such Leased Asset, which Appraisal shall show, in the
case of a Leased Asset consisting of Property, that as of Substantial
Completion and the Expiration Date the Fair Market Sales Value of
such Property shall not be less than 100% of the sum of the Land
Acquisition Cost, Estimated Improvements Cost, Capitalized Interest
and Transaction Expenses expected to be funded with respect to such
Property.
(iii) Filings. The Operative Documents (or memoranda
thereof), any supplements thereto and any UCC Financing Statements
shall have been recorded, registered and filed, if necessary, in such
manner as to perfect and protect the Lessor's interest in such Leased
Asset.
(iv) Taxes. All taxes, assessments, fees and other
charges in connection with the execution, delivery, recording, filing
and registration of the Operative Documents shall have been paid or
provisions for such payment shall have been made to the satisfaction
of the Lessor.
(v) Governmental Approvals. All necessary (or, in
the reasonable opinion of the Lessor, advisable) Governmental
Actions, in each case required by any Requirement of Law, shall have
been obtained or made and be in full force and effect.
(vi) Requirements of Law. In the reasonable opinion
of the Lessor and its counsel, the acquisition and ownership of such
Leased Assets as contemplated by the Operative Documents do not and
will not violate in any material respect any material Requirement of
Law and do not and will not subject the Lessor to any material
adverse regulatory prohibitions or constraints.
(vii) Responsible Employee's Certificates. The Lessor
shall have received a Responsible Employee's Certificate of the
Lessee, in substantially the form of Exhibit E, and a Responsible
Employee's Certificate of the Guarantor, in substantially the form of
Exhibit F.
(viii) Insurance. The Lessor shall have received
evidence of insurance with respect to each Leased Asset required to
be maintained pursuant to this Lease, setting forth the respective
coverages, limits of liability, carrier, policy number and period of
coverage.
(a) Properties. In addition to the conditions specified
in (a) above, the occurrence of each Acquisition Date with respect to any
Leased Asset consisting of Property is subject to the following conditions
precedent:
(i) Deed or Ground Lease. The Lessor shall have
received a Deed or Ground Lease with respect to the Land constituting
a part of such Property.
(ii) Mortgage. Except as the Lessor may otherwise
agree, the Lessor shall have received a Mortgage relating to such
Property duly executed and delivered by the Lessee.
(iii) Construction Agency Agreement Supplement. The
Construction Agency Agreement Supplement relating to such Property
shall have been duly executed and delivered by the parties hereto.
(iv) Opinion of Counsel. Counsel to the Lessee in the
jurisdiction where such Property is located shall have delivered an
opinion as to local law matters in form and scope satisfactory to the
Lessor.
(v) Environmental Audit. The Lessor shall have
received an Environmental Audit for such Property in form and
substance acceptable to the Lessor.
(vi) Survey and Title Insurance. The Lessee shall
have delivered to the Lessor an ALTA/1992 (Urban) Survey of the Land
included in such Property prepared by an independent, licensed
registered public land surveyor and meeting the Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys as adopted by
the American Land Title Association/American Society and American
Congress on Surveying and Mapping in 1992, certified to the Lessor
and the title company and otherwise in form reasonably acceptable to
the Lessor, and an ALTA owners or leasehold title insurance policy
covering such Property in favor of the Lessor, such policy to be
dated as of the Acquisition Date and in an amount not less than the
aggregate Commitment of the Lessor with respect to such Property and
to be reasonably satisfactory to the Lessor with an owner's
comprehensive (ALTA 9) endorsement and a 3.0 zoning endorsement and
such other endorsements requested by the Lessor to the extent
available in the State where such Property is located.
(vii) Property Insurance. The Lessor shall have
received evidence of insurance with respect to such Property required
to be maintained pursuant to this Lease, setting forth the respective
coverages, limits of liability, carrier, policy number and period of
coverage.
(viii) Architect's Certificate. The Lessor shall
have received a certificate from the Architect, in form and scope
satisfactory to the Lessor, certifying that (i) such Property as
improved in accordance with the Plans and Specifications and the
contemplated use thereof by the Lessee will comply in all material
respects with all Requirements of Law (including, without limitation,
all zoning and land use laws) and Insurance Requirements and (ii) the
Plans and Specifications have been prepared in accordance with
applicable Requirements of Law (including, without limitation,
building, planning, zoning and fire codes) and upon completion of the
Improvements in accordance with the Plans and Specifications, such
Improvements on the Property will not encroach in any manner onto any
adjoining land (except as permitted by express written easements or
as insured by appropriate title insurance).
(b) Xxxxxxxx.Xx addition to the conditions specified in
(a) above, the occurrence of each Acquisition Date with respect to any
Leased Asset consisting of Aircraft is subject to the following conditions
precedent:
(i) Xxxx of Sale. The Lessor shall have received an
AC Form 8050-2 Xxxx of Sale (or such other form of xxxx of sale as
may be approved by the FAA on the Acquisition Date for the Aircraft)
covering the Aircraft, executed by the owner thereof in favor of the
Lessor.
(ii) Registration, Etc. The Lessor shall have
received evidence satisfactory to it that application for
registration of the Aircraft in the name of the Lessee has been duly
made with the FAA.
(iii) Airworthiness. The Lessor shall have received
evidence satisfactory to it that the Aircraft has been certified by
the FAA with an appropriate airworthiness certificate and that such
certificate is in full force and effect.
(iv) Opinion of Counsel. FAA counsel shall have
delivered an opinion in form and scope satisfactory to the Lessor.
(v) Aircraft Insurance. The Lessor shall have
received evidence of insurance with respect to such Aircraft required
to be maintained pursuant to this Lease, setting forth the respective
coverages, limits of liability, carrier, policy number and period of
coverage.
4.3 Conditions Precedent to Each Advance. The obligations of the
Lessor to make an Advance on a Funding Date, including the initial Advance
occurring on any Acquisition Date, is subject to satisfaction or waiver of
the following conditions precedent:
(a) Funding Request. The Lessor shall have received a
fully executed counterpart of the applicable Funding Request, executed by
the Lessee.
(b) Accuracy of Representations and Warranties. On the
applicable Funding Date the representations and warranties of the Lessee
contained herein and in each of the other Operative Documents to which it
is a party and of the Guarantor contained in the Guaranty shall each be
true and correct in all material respects as though made on and as of such
date, except to the extent such representations or warranties relate solely
to an earlier date, in which case such representations and warranties shall
have been true and correct on and as of such earlier date.
(c) No Default. There shall not have occurred and be
continuing any Default or Event of Default and no Default or Event of
Default will have occurred after giving effect to the making of the Advance
requested by such Funding Request.
(d) Permits. In the case of an Advance relating to a
Property, all permits and approvals required by any Governmental Authority
in connection with the Construction for which such Advance is being made
shall have been issued or obtained and shall be in full force and effect.
(e) Title Policy Endorsement. In the case of an Advance
relating to a Property, the Lessor shall have received an endorsement to
the title policy delivered pursuant to this Lease, dated on or one Business
Day before the date of such Advance, (i) indicating that since the date of
the preceding Advance relating to such Property there has been no change in
the state of title and no additional survey exceptions not theretofore
approved by the Lessor and (ii) updating the title policy to the date of
such endorsement.
(f) Deposit. If the Guarantor has established the
Liquidity Collateral Account in accordance with Section 19.1(b)(ii) of this
Lease, the Collateral Agent shall have received from the Guarantor, for
deposit in the Liquidity Collateral Account in immediately available
Dollars, an amount such that immediately after giving effect to such
deposit and the Advance to be made on such date, the aggregate account
balance of all cash and investments then maintained in the Liquidity
Collateral Account shall be an amount at least equal to the Debt
Contribution of all outstanding Advances for all Leased Assets then subject
to this Lease.
ARTICLE V
CONDITIONS TO SUBSTANTIAL COMPLETION
5.1 Conditions to Substantial Completion of a Property. Substantial
Completion with respect to a Property shall be deemed to have occurred for
purposes of the Operative Documents at such time as the Construction shall
have been substantially completed in accordance with the Plans and
Specifications and all Applicable Law and the Lessee shall have delivered
to the Lessor a 3.1 zoning endorsement reasonably satisfactory to the
Lessor, and such Property shall be ready for occupancy and operation, as
evidenced by certificates of the Architect and the Construction Agent, the
Prime Contractor's application for the payment to be made upon substantial
completion and the issuance by the appropriate Governmental Authority of
certificates of occupancy for all of the Improvements contemplated by the
Plans and Specifications, all in form and substance reasonably satisfactory
to the Lessor.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations of the Lessor. The Lessor represents and warrants
to the Lessee that:
(a) ERISA. The Lessor is not and will not be funding its
Advances hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as
defined in Section 3(3) of ERISA) which is subject to Title I of ERISA, or
a "plan" (as defined in Section 4975(e)(1) of the Code).
(b) Status. The Lessor is a single member limited
liability company.
(c) Company Power and Authority. The Lessor has the power
and authority to execute, deliver and perform the terms and provisions of
the Operative Documents to which it is or will be a party and has taken all
necessary company action to authorize the execution, delivery and
performance of the Operative Documents to which it is a party and has duly
executed and delivered each Operative Document required to be executed and
delivered by it and, assuming the due authorization, execution and delivery
thereof on the part of each other party thereto, each such Operative
Document constitutes a legal, valid and binding obligation enforceable
against it in accordance with its terms, except as the same may be limited
by insolvency, bankruptcy, reorganization or other similar laws relating to
or affecting the enforcement of creditors' rights or by general equitable
principles and except as the same may be limited by certain circumstances
under law or court decisions in respect of provisions providing for
indemnification of a party with respect to liability where such
indemnification is contrary to public policy.
(d) Investment Company Act. The Lessor is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
6.2 Representations of Lessee. The Lessee represents and warrants to
the Lessor that:
(a) Corporate Status. The Lessee (i) is a duly organized
and validly existing corporation in good standing under the laws of the
State of Delaware and (ii) has duly qualified and is authorized to do
business and is in good standing in all jurisdictions where the failure to
do so might have a material adverse effect on it or its properties.
(b) Corporate Power and Authority. The Lessee has the
corporate power and authority to execute, deliver and perform the terms and
provisions of the Operative Documents to which it is or will be a party and
has taken all necessary corporate action to authorize the execution,
delivery and performance of the Operative Documents to which it is a party
and has duly executed and delivered each Operative Document required to be
executed and delivered by it and, assuming the due authorization, execution
and delivery thereof on the part of each other party thereto, each such
Operative Document constitutes a legal, valid and binding obligation
enforceable against it in accordance with its terms, except as the same may
be limited by insolvency, bankruptcy, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights or by general
equitable principles and except as the same may be limited by certain
circumstances under law or court decisions in respect of provisions
providing for indemnification of a party with respect to liability where
such indemnification is contrary to public policy.
(c) No Violation. Neither the execution, delivery and
performance by the Lessee of the Operative Documents to which it is or will
be a party nor compliance with the terms and provisions thereof, nor the
consummation by the Lessee of the transactions contemplated therein (i)
will result in a violation by the Lessee of any applicable provision of any
law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality having jurisdiction over the Lessee
or any Leased Asset that would materially adversely affect (x) the validity
or enforceability of the Operative Documents to which the Lessee is a
party, or the title to, or value or condition of, any Leased Asset, or (y)
the business, financial position, or results of operations of the Lessee
and its subsidiaries taken as a whole or the ability of the Lessee to
perform its obligations under the Operative Documents, (ii) will result in
any breach which would constitute a default under, or (other than pursuant
to the Operative Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets
of the Lessee pursuant to the terms of, any indenture, loan agreement or
other agreement for borrowed money to which the Lessee is a party or by
which it or any of its property or assets is bound or to which it may be
subject (other than Permitted Liens), or (iii) will violate any provision
of the certificate of incorporation or by-laws of the Lessee.
(d) Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Lessee, threatened (i) that
are reasonably likely to have a material adverse effect on any Leased Asset
or on the business, financial position or results of operations of the
Lessee and its subsidiaries taken as a whole or (ii) that question the
validity of the Operative Documents or the rights or remedies of the Lessor
with respect to the Lessee or any Leased Asset under the Operative
Documents.
(e) Governmental Approvals. No Governmental Action by any
Governmental Authority having jurisdiction over the Lessee or any Leased
Asset is required to authorize or is required in connection with (i) the
execution, delivery and performance by the Lessee of any Operative Document
to which it is a party or (ii) the Construction, except for any such
Governmental Action which is not yet required to be obtained and will be
duly obtained at and when required by Applicable Law.
(f) Investment Company Act. The Lessee is not an
"investment company" or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended.
(g) Public Utility Holding Company Act. The Lessee is not
a "holding company" or a "subsidiary company", or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Company Act of 1935, as amended.
(h) Provided Information. The information and materials
which have been provided by the Lessee or any Affiliate of the Lessee to
the Lessor in writing prior to the Closing Date are true and accurate in
all material respects on the date as of which such information and
materials are dated or certified and are not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
(i) Taxes. All United States Federal income tax returns
and all other tax returns which are required to have been filed have been
or will be filed by or on behalf of the Lessee by the respective due dates,
including extensions, and all taxes due with respect to the Lessee shown on
such returns or pursuant to any assessment received by the Lessee have been
or will be paid or are being contested in good faith by the Lessee by
appropriate procedures. The charges, accruals and reserves on the books of
the Lessee in respect of taxes or other governmental charges are, in the
opinion of the Lessee, adequate.
(j) Environmental Laws. The Lessee is in compliance with
all Environmental Laws relating to pollution and environmental control in
all domestic jurisdictions in which all real property of the Lessee,
including all Land, is located, other than those the non-compliance with
which would not have a material adverse effect on any Land or the business,
financial position or results of operations of the Lessee and its
subsidiaries taken as a whole.
(k) Offer of Securities, etc. Neither the Lessee nor any
Person authorized to act on the Lessee's behalf has, directly or
indirectly, offered any interest in any Leased Asset or any other interest
similar thereto (the sale or offer of which would be integrated with the
sale or offer of such interest in any Leased Asset), for sale to, or
solicited any offer to acquire any of the same from, any Person other than
the Lessor and other "accredited investors" (as defined in Regulation D of
the Securities and Exchange Commission).
(l) Properties. Each Prime Construction Contract for a
Property will provide for construction of the Improvements thereto for a
fixed price or a guaranteed maximum price on or before a date certain, will
contain customary retainage provisions and otherwise be in form and
substance reasonably satisfactory to the Lessor. Each Property as improved
in accordance with the Plans and Specifications for such Property and the
contemplated use thereof by the Lessee and its agents, assignees,
employees, lessees, licensees and tenants will comply in all material
respects with all Requirements of Law (including, without limitation, all
zoning and land use laws) and Insurance Requirements, except for such
Requirements of Law as the Lessee shall be contesting in good faith by
appropriate proceedings. Upon Substantial Completion of the Construction of
the Improvements to each Property, all water, sewer, electric, gas,
telephone and drainage facilities and all other utilities required to
adequately service such Improvements for its intended use will be available
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). There is no action, suit or proceeding
(including any proceeding in condemnation or eminent domain or under any
Environmental Law) pending or, to the best of the Lessee's knowledge,
threatened with respect to the Lessee, its Affiliates or such Property
which materially adversely affects the title to, or the use, operation or
value of, such Property. No fire or other casualty with respect to such
Property has occurred which fire or other casualty has had a material
adverse effect on the value or condition of such Property. All utilities
serving such Property, or proposed to serve such Property in accordance
with the related Plans and Specifications, are located in, and vehicular
access to the Improvements on such Property is provided by, either public
rights-of-way abutting such Property or Appurtenant Rights. All material
licenses, approvals, authorizations, consents, permits (including, without
limitation, building, demolition and environmental permits, licenses,
approvals, authorizations and consents), easements and rights-of-way,
including proof and dedication, required for (x) the use, treatment,
storage, transport, disposal or disposition of any Hazardous Substance on,
at, under or from such Property, and (y) construction of the Improvements
in accordance with the Plans and Specification and the Construction Agency
Agreement have either been obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case may
be, or will be obtained from the appropriate Governmental Authorities
having jurisdiction or from private parties, as the case may be, prior to
commencing any such construction or use and operation, as applicable.
(m) Aircraft. Neither the execution and delivery of a
Lease Supplement relating to Aircraft nor any of the transactions relative
to Aircraft contemplated by this Lease, require the consent or approval of
the FAA, except for notice pursuant to FAA Regulation ss.91.23 (14 C.F.R.
ss.91.23).
(n) Title; Ground Lease. The Lessor will at all times
during the Base Term have good title to all Improvements, subject only to
Permitted Liens. Each Ground Lease, if any, is in form and substance
sufficient to convey a valid leasehold interest in the applicable Land.
Each Deed is in form and substance sufficient to convey to the Lessor good
and marketable title to the applicable Property subject only to Permitted
Liens.
(o) Insurance. The Lessee carries insurance with
reputable insurers in respect of its material assets, in such manner, in
such amounts and against such risks as is customarily maintained by other
Persons of similar size engaged in similar business.
(p) Flood Hazard Areas. Except as otherwise identified on
the survey delivered pursuant to Section 4.2(b), no portion of any Property
is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency. If any
Property is located in such an area, then flood insurance has been obtained
for such Property in accordance with Section 17.2 and in accordance with
the National Flood Insurance Act of 1968, as amended.
(q) Defaults. The Lessee is not in default under (and no
event has occurred which with the giving of notice or lapse of time would
result in a default under) any instrument evidencing any debt or any
agreement relating thereto or any mortgage, deed of trust, security
agreement, lease, franchise or other agreement to which the Lessee is a
party or by which the Lessee or any of its properties or assets is bound or
to which it may be subject.
(r) Use of Advances. No part of any Advance will be used
directly or indirectly for the purpose of purchasing or carrying, or for
payment in full or in part of debt that was incurred for the purposes of
purchasing or carrying, any margin security as such term is defined in
Section 207.2 of Regulation G of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II, Part 207).
(s) Solvency. The Lessee is Solvent.
6.3 Representations of the Lessee with Respect to Each Advance. The
Lessee represents and warrants to the Lessor as of each Funding Date
as follows:
(a) Representations. The representations and warranties
of the Lessee and of the Guarantor set forth in the Operative Documents
(including the representations and warranties set forth in Section 6.2) are
true and correct in all material respects on and as of such Funding Date,
except to the extent such representations or warranties relate solely to an
earlier date, in which case such representations and warranties shall have
been true and correct on and as of such earlier date. There exists no
Default or Event of Default, and no Default or Event of Default will occur
as a result of, or after giving effect to, the Advance requested by the
Funding Request on such date.
(b) Improvements. In the case of a Funding Date for any
Property, the Construction of the Improvements to such Property to date, if
any, has been performed in a good and workmanlike manner, substantially in
accordance with the Plans and Specifications for such Property and in
compliance with all material Insurance Requirements and Requirements of
Law.
(c) Liens. The Lessee has not permitted Liens to be
placed against any Leased Asset other than Permitted Liens.
(d) Advance. The conditions precedent to such Advance set
forth in Article IV have been satisfied. The amount of the Advance
requested represents amounts owed to third parties in respect of Land
Acquisition Costs or to the Lessee or third parties in respect of Other
Asset Acquisition Costs or owed or paid by the Construction Agent to third
parties in respect of Property Improvements Costs and Transaction Expenses,
in each case incurred prior to the date of such Advance and for which
neither the Lessee nor the Construction Agent has previously been
reimbursed by an Advance, provided that this representation shall not apply
to any portion of an Advance made on Substantial Completion which is to be
used to pay for open punch list items or other holdbacks. With respect to
any portion of an Advance made on Substantial Completion which is to be
used to pay for open punch list items or other holdbacks, the Lessee
represents that such portion will be used for such purpose to the extent
that a contractor is entitled thereto and that neither the Lessee nor the
Construction Agent has previously been reimbursed therefor by an Advance.
ARTICLE VII
PAYMENT OF RENT; FEES
7.1 Rent. The Lessee shall pay Base Rent in arrears on each Leased
Asset on each Payment Date during the Base Term for such Leased Asset, on
the date required under Section 24.1(i) in connection with the Lessee's
exercise of the Remarketing Option and on any date on which this Lease
shall terminate. In addition, Lessee shall pay Base Rent in arrears on each
Payment Date in respect of the Advance made by Lessor pursuant to Section
3.2(f) hereof. Base Rent shall be calculated as provided in Appendix 2
hereto.
7.2 Payment of Rent. Rent shall be paid absolutely net to the Lessor,
so that this Lease shall yield to the Lessor the full amount thereof,
without setoff, deduction or reduction. Neither the Lessee's inability or
failure to take possession of all or any portion of any Leased Asset when
delivered by the Lessor, whether or not attributable to any act or omission
of the Lessee or any act or omission of the Lessor, or for any
other reason whatsoever, shall delay or otherwise affect the Lessee's
obligation to pay Rent for such Leased Asset in accordance with the terms
of this Lease.
7.3 Supplemental Rent. The Lessee shall pay to the Lessor any and all
Supplemental Rent promptly after receipt of an invoice therefor as the same
shall become due and payable, and if the Lessee fails to pay any
Supplemental Rent, the Lessor shall have all rights, powers and remedies
provided for herein or by law or equity or otherwise in the case of
nonpayment of Base Rent. The Lessee shall pay to the Lessor, as
Supplemental Rent, among other things, on demand, interest at the
applicable Overdue Rate on any installment of Base Rent not paid when due
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 Lessor for the
period from the due date or the date of any such demand, as the case may
be, until the same shall be paid. The expiration or other termination of
the Lessee's obligations to pay Base Rent hereunder shall not limit or
modify the obligations of the Lessee with respect to Supplemental Rent.
Unless expressly provided otherwise in this Lease, in the event of any
failure on the part of the Lessee to pay and discharge any Supplemental
Rent as and when due, the Lessee shall also promptly pay and discharge any
fine, penalty, interest or cost which may be assessed or added under any
agreement with a third party for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
7.4 Fees. The Lessee hereby agrees to pay to the Lessor the fees set
forth in this Section 7.4. All such fees shall be non-refundable, except as
may otherwise be provided in the Lessor Fee Letter.
(a) Commitment Fee. The Lessee shall pay to the Lessor
for each Leased Asset, for the period (including any portion thereof when
the Lessor's obligations pursuant to Section 3.1 are suspended by reason of
the Lessee's inability to satisfy any condition of Article IV) commencing
on (and including) the Closing Date and continuing to (but excluding), in
the case of the Lessor Commitment Fee, the Base Date for such Leased Asset,
and, in the case of the Liquidity Commitment Fee, the Expiration Date for
such Leased Asset, a Commitment Fee (the "Commitment Fee") as set forth in
Appendix 2.
7.5 Capitalized Interest. If and to the extent that the Lessee does
not request an Advance to pay any Capitalized Interest, then the Lessee
will pay the amount thereof to the Lessor on the last day of the Interest
Period during which such Capitalized Interest has accrued.
7.6 Method of Payment. Each payment of Rent or any other amount due
hereunder shall be made by the Lessee to the Lessor prior to 1:00 p.m., New
York City time, at the place of payment designated in writing by the Lessor
in funds consisting of lawful currency of the United States of America
which shall be immediately available on the scheduled date when such
payment shall be due, unless such scheduled date shall not be a Business
Day, in which case such payment shall be made on the next succeeding
Business Day. Payments received after 1:00 p.m., New York City time, on any
day shall be deemed received on the next succeeding Business Day. If
requested by the Lessee, the Lessor shall make arrangements to permit
payments hereunder to be made by the automated clearing house payments
system.
ARTICLE VIII
QUIET ENJOYMENT; RIGHT TO INSPECT
8.1 Quiet Enjoyment. Subject to Sections 2.4 and 8.2, and subject to
the rights of the Lessor contained herein and the other terms of the
Operative Documents to which the Lessee is a party, the Lessee shall
peaceably and quietly have, hold and enjoy each Leased Asset for the Base
Term applicable thereto, free of any claim or other action by the Lessor or
anyone claiming by, through or under the Lessor (other than the Lessee)
with respect to any matters arising from and after the Acquisition Date.
Such right of quiet enjoyment is independent of, and shall not affect the
Lessor's rights otherwise to initiate legal action to enforce, the
obligations of the Lessee under this Lease.
8.2 Right to Inspect. During the Lease Term, the Lessee shall, upon
reasonable notice from the Lessor (except that no notice shall be required
if an Event of Default under this Lease has occurred and is continuing),
permit the Lessor and its authorized representatives to inspect any Leased
Asset during normal business hours. Lessor and its authorized
representatives shall maintain the confidentiality of any confidential
information obtained during the course of any inspection and, at the
request and expense of the Lessee, shall execute and deliver non-disclosure
agreements to such effect as may be reasonably appropriate.
ARTICLE IX
NET LEASE, ETC.
9.1 Net Lease. This Lease shall constitute a net lease. Any present
or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall the Lessee be entitled to any abatement, suspension,
deferment, reduction, setoff, counterclaim, or defense with respect to the
Rent, nor shall the obligations of the Lessee hereunder be affected (except
as expressly herein permitted and by performance of the obligations in
connection therewith) by reason of: (i) any defect in the condition,
merchantability, design, construction, quality or fitness for use of any
Leased Asset or any part thereof, or the failure of any Leased Asset to
comply with all Requirements of Law, including any inability to occupy or
use any Leased Asset by reason of such non-compliance; (ii) any damage to,
removal, abandonment, salvage, loss, contamination of or Release from,
scrapping or destruction of or any requisition or taking of any Leased
Asset or any part thereof; (iii) any restriction, prevention or curtailment
of or interference with any use of the Leased Asset or any part thereof
including eviction; (iv) any defect in title to or rights to any Leased
Asset or any Lien on such title or rights or on any Leased Asset (other
than Lessor Liens); (v) any change, waiver, extension, indulgence or other
action or omission or breach in respect of any obligation or liability of
or by the Lessor; (vi) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceedings
relating to the Lessee or any other Person, or any action taken with
respect to this Lease by any trustee or receiver of the Lessee or any other
Person, or by any court, in any such proceeding; (vii) any claim that the
Lessee has or might have against any Person, including without limitation
the Lessor and any vendor, manufacturer, contractor of or for any portion
of any Leased Asset; (viii) any failure on the part of the Lessor to
perform or comply with any of the terms of this Lease (other than
performance by Lessor of its obligations set forth in Section 2.1 hereof),
of any other Operative Document or of any other agreement; (ix) any
invalidity or unenforceability or illegality or disaffirmance of this Lease
against or by the Lessee or any provision hereof or any of the other
Operative Documents or any provision of any thereof; (x) any restriction,
prevention or curtailment of or interference with the construction on or
any use of any Leased Asset or any part thereof; or (xi) any other cause or
circumstances, similar to the foregoing and whether or not the Lessee shall
have notice or knowledge of any of the foregoing. The agreement of the
Lessee in the preceding sentence shall not affect any claim, action or
right that the Lessee may have against the Lessor or any other Person. The
parties intend that the obligations of the Lessee hereunder shall be
covenants and agreements that are separate and independent from any
obligations of the Lessor hereunder or under any other Operative Documents
and the obligations of the Lessee shall continue unaffected unless such
obligations shall have been modified or terminated in accordance with an
express provision of this Lease.
9.2 No Termination or Abatement. The 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 the Lessor, or any action with respect to this Lease
which may be taken by any trustee, receiver or liquidator of the Lessor or
by any court with respect to the Lessor. The Lessee hereby waives all right
(i) to terminate or surrender this Lease (except as provided herein) or
(ii) to avail itself of any abatement, suspension, deferment, reduction,
setoff, counterclaim or defense with respect to any Rent. The Lessee shall
remain obligated under this Lease in accordance with its terms and the
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, the Lessee shall be bound by all of the terms and conditions
contained in this Lease.
ARTICLE X
SUBLEASES
10.1 Subletting. The Lessee may, without the consent of the Lessor,
sublease any Leased Asset or any portion thereof to any Person who, to the
best of Lessee's knowledge, has not filed, or had filed against it,
insolvency proceedings or a petition under the bankruptcy laws of the
United States. No sublease or other relinquishment of possession of such
Leased Asset shall in any way discharge or diminish any of the Lessee's
obligations to the Lessor hereunder and the Lessee shall remain directly
and primarily liable under this Lease as to such Leased Asset, or portion
thereof, so sublet. Any sublease of such Leased Asset shall expressly be
made subject to and subordinated to this Lease and to the rights of the
Lessor hereunder. No such sublease may provide for use of such Leased Asset
by the sublessee in a manner materially different than that of the Lessee
prior to the sublease. In connection with any sublease, the Lessee may
request the Lessor to enter into a customary non-disturbance agreement with
the sublessee. The Lessor will act in a commercially reasonable manner in
determining whether or not to enter into such non-disturbance agreement.
ARTICLE XI
LESSEE ACKNOWLEDGMENTS
11.1 Condition of the Properties. THE LESSEE ACKNOWLEDGES AND AGREES
THAT ALTHOUGH THE LESSOR WILL OWN AND HOLD TITLE TO THE IMPROVEMENTS, THE
CONSTRUCTION AGENT IS SOLELY RESPONSIBLE UNDER THE TERMS OF THE
CONSTRUCTION AGENCY AGREEMENT FOR THE DESIGN, DEVELOPMENT, BUDGETING AND
CONSTRUCTION OF THE IMPROVEMENTS AND ANY ALTERATIONS OR MODIFICATIONS. THE
LESSEE FURTHER ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH LEASED ASSET
"AS IS" WITHOUT, EXCEPT AS EXPRESSLY OTHERWISE PROVIDED HEREIN,
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR AND
SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES
IN POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR
PHYSICAL INSPECTION MIGHT SHOW, AND (D) VIOLATIONS OF REQUIREMENTS OF LAW
WHICH MAY EXIST ON THE DATE HEREOF OR AT ANY TIME HEREAFTER. THE LESSOR HAS
NOT MADE, EXCEPT AS EXPRESSLY OTHERWISE PROVIDED HEREIN, AND SHALL NOT BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) AND SHALL NOT BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE
TITLE (OTHER THAN FOR LESSOR LIENS), VALUE, HABITABILITY, USE, CONDITION,
DESIGN, OPERATION, OR FITNESS FOR USE OF ANY LEASED ASSET (OR ANY PART
THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY LEASED ASSET (OR ANY PART THEREOF)
AND THE LESSOR SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT
THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE OF ANY LEASED ASSET,
OR ANY PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF LAW.
11.2 Risk of Loss. During the Construction Period and the Base Term
for any Leased Asset, the risk of loss of or decrease in the enjoyment and
beneficial use of such Leased Asset as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars
or otherwise is assumed by the Lessee, and the Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XII
POSSESSION AND USE, ETC.
12.1 Possession and Use. Each Leased Asset shall be used as described
in the applicable Lease Supplement therefor and in a manner consistent with
the standards applicable to properties of a similar nature in the
geographic area in which such Leased Asset is located or operated and in
any event not less than the standards applied by the Lessee and its
Affiliates for other comparable properties owned or leased by the Lessee
and its Affiliates.
12.2 Charges. The Lessee shall pay, or cause to be paid, all charges
and costs required in connection with the use of such Leased Asset as
contemplated by this Lease. The Lessee shall not commit or permit any waste
of such Leased Asset or any part thereof. The Lessee shall pay or cause to
be paid all charges for electricity, power, gas, oil, water, telephone,
sanitary sewer service and all other rents and utilities used in or on each
Property through the Expiration Date. The Lessee shall be entitled to
receive any credit or refund with respect to any utility charge paid by the
Lessee and the amount of any credit or refund received by the Lessor on
account of any utility charges paid by the Lessee, net of the costs and
expenses reasonably incurred by the Lessor in obtaining such credit or
refund, shall be promptly paid over to the Lessee.
12.3 Compliance with Requirements of Law and Insurance Requirements.
Subject to the terms hereof relating to permitted contests, the Lessee, at
its sole cost and expense, shall (i) comply in all material respects with
all Requirements of Law and Insurance Requirements relating to each Leased
Asset, including the construction, use, operation, maintenance, repair and
restoration thereof and the remarketing thereof pursuant to Article XXIV,
whether or not compliance therewith shall require structural or
extraordinary changes in any Improvements or interfere with the use and
enjoyment of such Leased Asset, and (ii) procure, maintain and comply in
all material respects with all material licenses, permits, orders,
approvals, consents and other authorizations required for the construction,
use, operation, maintenance, repair and restoration of the Leased Assets.
ARTICLE XIII
MAINTENANCE AND REPAIR; RETURN
13.1 Maintenance and Repair. (a) The Lessee, at its sole cost and
expense, shall maintain each Leased Asset in good condition (ordinary wear
and tear excepted) and make all necessary repairs thereto, 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 all Requirements of Law and Insurance Requirements
and on a basis consistent with the operation and maintenance of properties
comparable in type and location to such Leased Asset and in no event less
than the standards applied by the Lessee and its Affiliates in the
operation and maintenance of other comparable properties owned or leased by
the Lessee and its Affiliates.
(b) The Lessor shall under no circumstances be required
to build any improvements on any Property, make any replacements,
alterations or renewals of any nature or description to any Leased Asset or
make any expenditure whatsoever in connection with this Lease (other than
for Advances made in accordance with and pursuant to the terms of this
Lease and the Construction Agency Agreement). The Lessor shall not be
required to maintain, repair or rebuild all or any part of any Leased
Asset, and the Lessee waives any right to (i) require the Lessor to
maintain, repair, or rebuild all or any part of any Leased Assets, or (ii)
make repairs at the expense of the Lessor pursuant to any Requirement of
Law, Insurance Requirement, contract, agreement, or covenant, condition or
restriction in effect at any time during the Base Term applicable to any
Leased Asset.
(c) With respect to Aircraft, without limiting the
generality of Section 13.1(a), the Lessee, at its sole cost and expense,
shall: (i) maintain, service, repair, overhaul and test such Aircraft (A)
so as to keep such Aircraft in operating condition as good as when
delivered to the Lessee hereunder, ordinary wear and tear excepted, and (B)
so as to keep such Aircraft in such operating condition as may be necessary
to enable the airworthiness certification of such Aircraft to be maintained
in good standing at all times under the Federal Aviation Act of 1958, as
amended, except during such period or periods as such Aircraft is being
overhauled, maintained, serviced, repaired or tested; (ii) maintain all
records, logs and other materials required by the FAA to be maintained in
respect of such Aircraft; and (iii) promptly furnish to the Lessor such
notification and take such other action on the Lessor's behalf as may be
required to be filed by the Lessor with any governmental authority because
of the Lessor's interest in such Aircraft. The Lessee shall forthwith upon
the Acquisition Date with respect to any Aircraft, cause such Aircraft to
be fully registered and at all times thereafter to remain duly registered
in the name of the Lessee. The Lessee shall affix or cause to be affixed to
each Aircraft in the place designated by the Lessor (or, if no such place
shall have been designated, in a prominent place), labels, plates or other
markings stating that such Aircraft is owned by the Lessor. The Lessee
shall not without the prior permission of the Lessor change or remove (or
permit to be changed or removed or otherwise permit a decrease in the
visibility of) any insignia or lettering which is on any Aircraft at the
time of delivery thereof or which is thereafter placed thereon indicating
the Lessor's ownership thereof.
13.2 Return. (a) The Lessee shall, upon the expiration or earlier
termination of this Lease, vacate and surrender each Leased Asset to the
Lessor in its then-current, "AS IS" condition, subject to the Lessee's
obligations under Sections 12.3, 13.1, 14.1, 15.1, 18.1(d), 18.2 and 24.1,
unless the Lessee has purchased such Leased Asset from the Lessor as
provided herein.
(b) Upon termination of the lease of any Aircraft, the
Lessee shall have the option of having the aircraft engines installed on
such Aircraft be engines of the same model as the original Engines or
substitute engines suitable and approved by the FAA for such Aircraft, free
and clear of all Liens, encumbrances or rights of others whatsoever and
having a value and utility at least equal to, and being in as good
operation and condition, ordinary wear and tear excepted, as such original
Engines. "Ordinary wear and tear" as used herein is intended to reflect the
FAA regulations pertaining to the requirement of a periodic overhauling of
aircraft engines. Thus, in returning the Engines, the Lessee, under normal
circumstances, shall be required to overhaul them only if the total flying
hours of such Engines would require an overhaul under the FAA regulations.
Upon the return of any Aircraft, the Lessee shall (i) deliver to the Lessor
or its designee, all logs, manuals, inspection data, modification and
overhaul records or copies thereof which are applicable to such Aircraft
and are of the type that the Lessee customarily retains or is required by
law to retain with respect to its own aircraft and (ii) at its own expense,
will cause such Aircraft, if not then registered in the name of the Lessor,
to be registered in the name of the Lessor or its designee. At the time of
such return such Aircraft shall be duly certified as airworthy by the FAA.
ARTICLE XIV
MODIFICATIONS, ETC.
14.1 Modifications, Substitutions and Replacements. After the date of
Substantial Completion for any Leased Asset consisting of Property and
after the Acquisition Date for any Other Asset, the Lessee, at its sole
cost and expense, may at any time and from time to time make alterations,
renovations, improvements and additions to such Leased Asset or any part
thereof and substitutions and replacements therefor (collectively,
"Modifications"); provided, however, that: (i) except for any Modification
required to be made pursuant to a Requirement of Law (a "Required
Modification"), no Modification shall impair the value, utility or useful
life of such Leased Asset or any part thereof from that which existed
immediately prior to such Modification; (ii) the Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) the Lessee shall
comply with all Requirements of Law and Insurance Requirements applicable
to the Modification, including the obtaining of all permits and
certificates of occupancy, and the structural integrity of such Leased
Asset shall not be adversely affected; (iv) subject to the terms of Article
XVI relating to permitted contests, the Lessee shall pay all costs and
expenses and shall discharge (or cause to be insured or bonded over) within
sixty (60) days after the same shall be filed (or otherwise become
effective) any Liens arising with respect to the Modification; (v) such
Modifications shall comply with Section 13.1(a); and (vi) the Lessee shall
be required to obtain the prior written approval of the Lessor, which
approval shall not be unreasonably withheld, with respect to any
alterations (other than Required Modifications and/or alterations
authorized by the Construction Agency Agreement) that shall (A) materially
affect any structural element of the Improvements to any Property or major
building system therein, or (B) cost in excess of the Threshold Amount or
(C) materially change the nature of the Improvements to any Property or the
amount of usable area therein or the utility thereof for the purposes
contemplated by the Lessor and the Lessee as of the date hereof and the
date of the Lease Supplement therefor. All Modifications shall remain part
of such Leased Asset and shall be subject to this Lease and title thereto
shall immediately vest in the Lessor; provided, however, that Modifications
that meet each of the following conditions shall not be subject to this
Lease: (x) such Modifications are not Required Modifications, (y) such
Modifications were not financed by the Lessor and (z) such Modifications
are readily removable without impairing the value, utility or remaining
useful life of the related Leased Asset. So long as no Event of Default has
occurred and is continuing, the Lessee may place upon each Leased Asset any
trade fixtures, machinery, equipment or other property belonging to the
Lessee or third parties and may remove the same at any time during the
Lease Term, subject, however, to the terms of Section 13.1; provided that
such trade fixtures, machinery, equipment or other property do not
materially impair the value, utility or remaining useful life of such
Leased Asset; and provided, further, that the Lessee shall keep and
maintain at each Property and shall not remove from such Property any
Equipment financed or otherwise paid for (directly or indirectly) by the
Lessor pursuant to this Lease. Notwithstanding the foregoing proviso, the
Lessee may substitute other equipment for such Equipment, which substituted
equipment shall have a Fair Market Sales Value and remaining useful life at
least equivalent to the Equipment for which it was substituted and, without
further act, such substituted equipment shall be Equipment hereunder and be
part of the applicable Property.
ARTICLE XV
WARRANT OF TITLE; EASEMENTS
15.1 Warrant of Title. (a) The Lessee agrees that except as otherwise
provided herein and subject to the terms of Article XVI relating to
permitted contests, the 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 Leased Asset or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent, other than Permitted Liens.
15.2 Nothing contained in this Lease shall be construed as
constituting the consent or request of the 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 Leased Asset or any part thereof. NOTICE IS HEREBY GIVEN THAT
THE LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING
ANY LEASED ASSET OR ANY PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT
NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS
SHALL ATTACH TO OR AFFECT THE INTEREST OF THE LESSOR, IN AND TO ANY LEASED
ASSET.
15.3 Grants and Releases of Easements; Lessor's Waivers. Provided
that no Default or Event of Default shall have occurred and be continuing
and subject to the provisions of Articles XII, XIII and XIV, the Lessor
hereby consents in each instance to the following actions by the Lessee,
but at the Lessee's sole cost and expense: (a) the granting of easements,
licenses, rights-of-way and other rights and privileges in the nature of
easements reasonably necessary or desirable for the use, repair, or
maintenance of any Property as herein provided and to give effect to the
state of title in effect for such Property as set forth in the title policy
therefor; (b) the release of existing easements or other rights in the
nature of easements which are for the benefit of any Property; (c) if
required by applicable Governmental Authority in connection with the
Construction, the dedication or transfer of unimproved portions of any Land
for road, highway or other public purposes; and (d) the execution of
amendments to any covenants and restrictions affecting any Property;
provided, however, that in each case (i) such grant, release, dedication,
transfer or amendment does not materially impair the value, utility or
remaining useful life of any Property, (ii) such grant, release,
dedication, transfer or amendment is reasonably necessary in connection
with the use, maintenance, alteration or improvement of any Property, (iii)
such grant, release, dedication, transfer or amendment will not cause any
Property or any portion thereof to fail to comply in any material respect
with the provisions of this Lease or any other Operative Documents and all
Requirements of Law (including, without limitation, all applicable zoning,
planning, building and subdivision ordinances, all applicable restrictive
covenants and all applicable architectural approval requirements); (iv) all
governmental consents or approvals required prior to such grant, release,
dedication, transfer or amendment have been obtained, and all filings
required prior to such action have been made; (v) such grant, release,
dedication, transfer or amendment will not result in any down-zoning of any
Property or any portion thereof or a material reduction in the maximum
density or development rights available to any Property under all
Requirements of Law; (vi) the Lessee shall remain obligated under this
Lease and under any Operative Document executed by the Lessee consenting to
the assignment of the Lessor's interest in this Lease as security for
Advances made by it to the Lessor, in each such case in accordance with
their terms, as though such grant, release, dedication, transfer or
amendment had not been effected; and (vii) the Lessee shall pay and perform
any obligations of the Lessor under such grant, release, dedication,
transfer or amendment. The Lessor acknowledges the Lessee's right to
finance and to secure under the Uniform Commercial Code, inventory,
furnishings, furniture, equipment, machinery, leasehold improvements and
other personal property located at any Property other than Equipment, and
Lessor agrees to execute Lessor waiver forms in favor of any purchase money
seller, lessor or lender which has financed or provided or may finance or
provide in the future such items. Without limiting the effectiveness of the
foregoing, provided that no Default or Event of Default shall have occurred
and be continuing, the Lessor shall, upon the request of the Lessee, and at
the Lessee's sole cost and expense, execute and deliver any instruments
necessary or appropriate to confirm any such grant, release, dedication,
transfer or amendment to any Person permitted under this Section 15.2,
including landlord waivers with respect to any of the foregoing.
ARTICLE XVI
PERMITTED CONTESTS
16.1 Permitted Contests in Respect of Applicable Law. If, to the
extent and for so long as (a) a test, challenge, appeal or proceeding for
review of any Applicable Law relating to any Leased Asset shall be
prosecuted diligently and in good faith in appropriate proceedings by the
Lessee or (b) compliance with such Applicable Law shall have been excused
or exempted by a valid nonconforming use, variance permit, waiver,
extension or forbearance, the Lessee shall not be required to comply with
such Applicable Law but only if and so long as any such test, challenge,
appeal, proceeding, waiver, extension, forbearance or noncompliance shall
not, in the reasonable opinion of the Lessor, involve (A) any risk of
criminal liability being imposed on the Lessor, or (B) any material risk of
(1) foreclosure, forfeiture or loss of any Leased Asset or any material
part thereof, or (2) the nonpayment of Rent or (C) any substantial danger
of (1) the sale of, or the creation of any Lien (other than a Permitted
Lien) on, any part of any Leased Asset, (2) civil liability being imposed
on the Lessor, or (3) enjoinment of, or interference with, the use,
possession or disposition of any Leased Asset in any material respect. The
Lessor will not be required to join in any proceedings pursuant to this
Section 16.1 unless a provision of any Applicable Law requires that such
proceedings be brought by or in the name of the Lessor; and in that event
the Lessor will join in the proceedings or permit them or any part thereof
to be brought in its name if and so long as (i) no Default or Event of
Default has occurred and is continuing, (ii) the Lessee has not elected the
Remarketing Option, and (iii) the Lessee pays all related expenses and
indemnifies the Lessor to its reasonable satisfaction.
ARTICLE XVII
INSURANCE
17.1 Public Liability and Workers' Compensation Insurance. (a)
Property. With respect to each Property, the Lessee shall procure and carry
commercial general liability insurance for claims for bodily injury or
death sustained by persons or damage to property while on such Property and
such other public liability coverages as are ordinarily procured by the
Lessee or its Affiliates who own or operate similar properties. Such
insurance shall be on terms and in amounts that are materially no less
favorable than insurance maintained by the Lessee or its Affiliates with
respect to similar properties that they own and that are in accordance with
normal industry practice in the state in which such Property is located.
The Lessee shall, in the construction of the Improvements (including in
connection with any Modifications thereof) and the operation of any
Property, comply with, or cause the applicable contractor to comply with,
all applicable workers' compensation laws. The insurance required by this
clause (a) may be subject to such deductibles and the Lessee may
self-insure with respect to the required coverage to the extent approved in
writing by the Lessor.
(b) Aircraft. With respect to each Aircraft, the Lessee
shall procure or cause to be procured and maintain or cause to be
maintained public liability insurance with respect to such Aircraft,
covering both bodily personal injury and damage to property (as to all
Persons, including employees of the Lessee or the Lessor). Policies
covering bodily injury and property damage shall provide for coverage in an
amount which is not less than the public liability and property damage
insurance usually carried with respect to aircraft similar to such Aircraft
by corporations of a similar size engaged in the same or similar business
and similarly situated with the Lessee and its Affiliates; provided, that
such insurance shall at all times be in an amount not less than $30,000,000
per occurrence.
(c) Other Assets. With respect to any Other Asset other
than Aircraft, the Lessee will carry public liability insurance and
property damage insurance with respect to such Other Asset (i) in amounts
which are not less than the public liability and property damage insurance
applicable to similar assets owned, leased or held by the Lessee and its
Affiliates and (ii) of the types usually carried by corporations engaged in
the same or a similar business, similarly situated with the Lessee and its
Affiliates, and owning or operating similar assets in the state in which
such Other Asset is located and which cover risk of the kind customarily
insured against by such corporations. The insurance required by this clause
(c) may be subject to such deductibles and the Lessee may self-insure with
respect to the required coverage to the extent approved in writing by the
Lessor.
17.2 Hazard and Other Insurance. (a) Property. With respect to each
Property, the Lessee shall keep, or cause to be kept, such Property insured
against loss or damage by fire, earthquake, flood and other risks on terms
and in amounts that are no less favorable than insurance covering other
similar properties owned by the Lessee or its Affiliates and that are in
accordance with normal industry practice, provided that such insurance
shall at all times be in an amount not less than the greater of the Lease
Balance of such Property or the replacement cost thereof. During the
construction of any Improvements the Lessee shall also maintain or cause to
be maintained builders' risk insurance or equivalent coverages. The
insurance required by this clause (a) may be subject to such deductibles
and the Lessee may self-insure with respect to the required coverage to the
extent approved in writing by the Lessor.
(b) Aircraft. With respect to each Aircraft, the Lessee
shall procure or cause to be procured and maintain or cause to be
maintained all risk aircraft hull insurance with respect to such Aircraft,
of the type and in substantially the amounts usually carried by
corporations engaged in the same or similar business and similarly situated
with the Lessee and its Affiliates; provided that such insurance shall at
all times be in an amount not less than the Lease Balance of such Aircraft
at such time.
(c) Other Assets.With respect to any Other Asset other
than Aircraft, the Lessee will maintain in effect physical damage insurance
with respect to such Other Asset which is of the type usually carried by
corporations engaged in the same or similar business, similarly situated
with the Lessee and its Affiliates, and owning or operating similar
equipment and which covers risk of the kind customarily insured against by
such corporations, and in substantially the amount applicable to similar
assets owned, leased or held by the Lessee and its Affiliates; provided
that such insurance shall at all times be in an amount not less than the
aggregate Lease Balance of all such Other Assets. The insurance required by
this clause (c) may be subject to such deductibles and the Lessee may
self-insure with respect to the required coverage to the extent approved in
writing by the Lessor.
17.3 Insurance Coverage. (a) Upon request the Lessee shall furnish
the Lessor and the Collateral Agent with certificates showing the insurance
required under Sections 17.1 and 17.2 to be in effect and naming the
Lessor, the Receivable Purchaser, the Conduits and the Liquidity Providers
as additional insureds with respect to liability coverage (excluding
worker's compensation insurance), and naming the Collateral Agent as loss
payee with respect to property coverage and showing the mortgagee
endorsement required by Section 17.3(c) with respect to such coverage. All
such insurance shall be at the sole cost and expense of the Lessee and
shall be maintained with respect to each Leased Asset from the Acquisition
Date thereof through the Expiration Date therefor. Such certificates shall
include a provision for no less than ten (10) days' advance written notice
by the insurer to the Lessor in the event of cancellation or reduction of
such insurance. In addition, the Lessee shall cause the Lessor, the
Receivable Purchaser, the Conduits and the Liquidity Providers to be named
as additional insureds under the liability policies maintained with respect
to the Construction for each Property.
(b) The Lessee agrees that the insurance policy or
policies required by Sections 17.1 and 17.2, shall include an appropriate
clause pursuant to which such policy shall provide that it will not be
invalidated should the Lessee waive, in writing, prior to a loss, any or
all rights of recovery against any party for losses covered by such policy,
and that the insurance in favor of the Lessor and the other additional
insureds and their rights under and interests in said policies shall not be
invalidated or reduced by any act or omission or negligence of the Lessee
or any other Person having any interest in any Leased Asset. The Lessee and
the Lessor each hereby waives any and all rights against the other for loss
or damage to or loss of use of its property to the extent of payments made
under its property insurance so long as such waiver shall not affect its
rights to recover under such insurance.
(c) Except as otherwise permitted by clause (d), all such
insurance shall be written by reputable insurance companies that are
financially sound and solvent and otherwise reasonably appropriate
considering the amount and type of insurance being provided by such
companies. Any insurance company selected by the Lessee which is rated in
Best's Insurance Guide or any successor thereto (or if there be none, an
organization having a similar national reputation) shall have a general
policyholder rating of "A" and a financial rating of at least "VIII" or be
otherwise acceptable to the Lessor. All insurance policies required by
Section 17.2 shall include a standard form mortgagee endorsement in favor
of the Lessor.
(d) The Lessor shall not carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XVII except that the Lessor may carry
separate liability insurance so long as (i) the Lessee's insurance is
designated as primary and in no event excess or contributory to any
insurance the Lessor may have in force which would apply to a loss covered
under the Lessee's policy and (ii) each such insurance policy will not
cause the Lessee's insurance required under this Article XVII to be subject
to a coinsurance exception of any kind. Each policy maintained by the
Lessee shall specifically provide that the policy shall be considered
primary insurance which shall apply to any loss or claim before any
contribution by any insurance which the Lessor may have in force.
(e) The Lessee shall pay as they become due all premiums
for the insurance required by Section 17.1 and Section 17.2, and shall
renew or replace each policy prior to the expiration date thereof.
Throughout the Base Term for any Leased Asset, at the time each of the
Lessee's insurance policies is renewed (but in no event less
frequently than once each year), the Lessee shall deliver to the Lessor and
the Collateral Agent certificates of insurance evidencing that all
insurance required by this Article XVII with respect to such Leased Asset
is being maintained by the Lessee and is in effect.
(f) All insurance proceeds in respect of any property
damage loss or occurrence for which the proceeds related thereto are (i)
less than or equal to the Threshold Amount, in the absence of the
occurrence and continuance of a Default or Event of Default, shall be
adjusted by and paid to the Lessee for application toward the
reconstruction, repair or refurbishment of the applicable Leased Asset and
(ii) greater than the Threshold Amount, shall be adjusted jointly by the
Lessee, the Lessor and the Collateral Agent (unless a Default or Event of
Default has occurred and is continuing, in which case such proceeds shall
be adjusted solely by the Collateral Agent) and held by the Collateral
Agent for application in accordance with Article XVIII hereof.
ARTICLE XVIII
CASUALTY AND CONDEMNATION; ENVIRONMENTAL MATTERS
18.1 Casualty and Condemnation. (a) Subject to the provisions of this
Article XVIII, if all or a portion of any Leased Asset is damaged or
destroyed in whole or in part by a Casualty or is the subject of a
Condemnation, then (i) in the case of a Casualty where the cost of
restoration of the affected Leased Asset in the reasonable judgment of the
Lessor and the Collateral Agent is (x) less than or equal to the Threshold
Amount, any insurance proceeds payable with respect to such Casualty shall
be paid directly to the Lessee, or if received by the Lessor or Collateral
Agent, shall be paid over to the Lessee for the reconstruction,
refurbishment and repair of such Leased Asset, (y) greater than the
Threshold Amount, any insurance proceeds payable with respect to such
Casualty shall be paid to the Lessor but may be obtained by the Lessee and
used for the purpose of reconstructing, refurbishing and repairing the
affected Leased Asset upon submission to the Lessor and the Collateral
Agent of a Responsible Employee's Certificate to the effect that such
Leased Asset can be fully restored to the condition required under this
Lease prior to the end of the Base Term for such Leased Asset (after giving
effect to any extensions of such Base Term) and as to the cost of such
restoration (accompanied by, in the case of a Leased Asset consisting of
Property, an Architect's certificate as to the foregoing matters) plus a
statement as to the Lessee's affirmative ability to finance such
restoration, and upon receipt of such certificate(s) in form reasonably
satisfactory to the Lessor and the Collateral Agent such amounts shall be
made available to the Lessee in the manner contemplated by the Construction
Agency Agreement with respect to Construction and if the foregoing
certificate(s) are not delivered to the Lessor and the Collateral Agent
such proceeds shall be applied toward the payment of the Lease Balance for
such Leased Asset and (ii) in the case of a Condemnation such award or
compensation shall be paid to the and the Collateral Agent to be applied in
the reasonable discretion of the Collateral Agent, after consultation with
the Required Participants to the restoration of the affected Leased Asset
or toward the payment of the Lease Balance; provided, however, that if a
Default or Event of Default shall have occurred and be continuing, such
award, compensation or insurance proceeds shall be paid directly to the
Collateral Agent or, if received by the Lessee, shall be held in trust for
the Collateral Agent and shall be paid over by the Lessee to the Collateral
Agent. All amounts held by the Lessor when a Default or Event of Default
exists hereunder on account of any award, compensation or insurance
proceeds either paid directly to the Collateral Agent or turned over to the
Collateral Agent shall at the request of the Required Participants either
be (i) paid to the Lessee for the repair of damage caused by such Casualty
or Condemnation in accordance with clause (d) of this Section 18.1, or (ii)
(A) if a Default exits, held by the Lessor until such Default is cured or
becomes an Event of Default or (B) if an Event of Default exists, applied
toward the payment of the Lease Balance of the affected Leased Asset.
(b) The Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At the Lessee's reasonable
request, and at the Lessee's sole cost and expense, the Lessor shall
participate in any such proceeding, action, negotiation, prosecution or
adjustment. The Lessor and the Lessee agree that this Lease shall control
the rights of the Lessor and the Lessee in and to any such award,
compensation or insurance payment.
(c) If the Lessor or the Lessee shall receive notice of a
Casualty or of an actual, pending or threatened Condemnation of any Leased
Asset or any interest therein, the Lessor or the Lessee, as the case may
be, shall give notice thereof to the other and to the Collateral Agent
promptly after the receipt of such notice.
(d) If pursuant to this Section 18.1 and Section 19.1
this Lease shall continue in fullforce and effect following a Casualty or
Condemnation with respect to any Leased Asset, the Lessee shall, at its
sole cost and expense (and, without limitation, if any award, compensation
or insurance payment is not sufficient to restore such Leased Asset in
accordance with this paragraph, the Lessee shall pay the shortfall),
promptly and diligently repair any damage to such Leased Asset caused by
such Casualty or Condemnation in conformity with the requirements of
Sections 13.1 and 14.1 using, in the case of any Property, the as-built
plans and specifications for such Property (as modified to give effect to
any subsequent Modifications, any Condemnation affecting such Property and
all applicable Requirements of Law) so as to restore such Leased Asset to
at least the same condition, operation, function and value as existed
immediately prior to such Casualty or Condemnation with such Modification
as the Lessee may elect in accordance with Section 14.1. Upon completion of
such restoration, the Lessee shall furnish the Lessor a Responsible
Employee's Certificate and, in the case of any Property, an Architect's
certificate confirming that such restoration has been completed pursuant to
this Lease.
(e) In no event shall a Casualty or Condemnation affect
the Lessee's obligations to pay Rent pursuant to Section 7.1 or to perform
its obligations and pay any amounts due on any Expiration Date or pursuant
to Articles XXII and XXV.
(f) Any Excess Proceeds received by the Lessor and held
by the Collateral Agent in respect of a Casualty or Condemnation affecting
any Leased Asset shall be turned over to the Lessee upon the full payment
of the Lease Balance for such Leased Asset and all other amounts then due
and payable hereunder.
18.2 Environmental Matters. Promptly upon the Lessee's knowledge of
the existence of an Environmental Violation that could materially affect
the value of any Property, the Lessee shall notify the Lessor and the
Collateral Agent in writing of such Environmental Violation. If the cost of
remediation of such Environmental Violation would not exceed the limits set
forth in Section 19.1, the Lessee will promptly and diligently undertake
any response, cleanup, remedial or other action required by Applicable Law
of the Lessor or the Lessee to remove, cleanup or mediate such
Environmental Violation of the Lessee's sole cost and expense. If the cost
of such remediation would exceed the limits set forth in Section 19.1, the
Lessor may elect to terminate the Lease with respect to such Property
pursuant to Section 19.1 or, alternatively, the Lessor may request that the
Lessee undertake any response, cleanup, remedial or other action required
by Applicable Law of the Lessor or Lessee to remove, clean up or remediate
the Environmental Violation in accordance with the terms of Section 12.3,
at the Lessee's sole cost and expense. If the Lessor does not deliver a
Termination Notice with respect to such Property pursuant to Section 19.1,
then the Lessee shall undertake such response, cleanup, remedial or other
action, and the Lessee shall, upon completion of remedial action by the
Lessee, cause to be prepared by an environmental consultant reasonably
acceptable to the Lessor a report describing the Environmental Violation
and the actions taken by the Lessee (or its agents) in response to such
Environmental Violation, along with a statement by the Lessee that the
Environmental Violation has been remedied to the satisfaction of the
Government Authority exercising jurisdiction, or in compliance in all
material respects with applicable Environmental Law. Nothing in this
Section shall reduce or limit the Lessee's obligations under the indemnity
provisions hereof.
18.3 Notice of Environmental Matters. Promptly, but in any event
within thirty (30) days from the date the Lessee has actual knowledge
thereof, the Lessee shall provide to the Lessor and the Collateral Agent
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. All such notices shall describe in reasonable detail the nature
of the claim, action or proceeding and the Lessee's proposed response
thereto. In addition, the Lessee shall provide to the Lessor and the
Collateral Agent, within thirty (30) days of receipt, copies of all written
communications with any Governmental Authority relating to any
Environmental Violation in connection with any Property. The Lessee shall
also promptly provide such detailed reports of any such environmental
claims as may reasonably be requested by the Lessor. In the event that the
Lessor receives 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, the Lessor shall promptly give notice thereof
to the Lessee and the Collateral Agent.
ARTICLE XIX
TERMINATION OF LEASE
19.1 Mandatory Termination upon Certain Events. (a) If, with respect
to any Property, any of:
(i) a Significant Condemnation occurs; or
(ii)an Environmental Violation occurs or is
discovered the cost of remediation of which for the affected Property
would exceed 20% of the then effective Lease Balance for such
Property, but in no event less than $5,000,000;
and the Lessor shall have given written notice to the Lessee that this
Lease as to the affected Property is to be terminated as a consequence of
the occurrence of such an event (a "Termination Notice"), then, the Lessee
shall be obligated to purchase the Lessor's interest in such Property on or
prior to the date occurring one hundred eighty (180) days after the date of
the Lessee's receipt of the Termination Notice by paying the Lessor an
amount equal to the Lease Balance therefor on such date of payment;
provided, however, that the Lessor shall not give such notice with respect
to any Environmental Violation if the Lessee (x) promptly submits an
approved corrective action plan for the remediation of such Environmental
Violation to the Lessor, (y) provides reasonable security to the Lessor for
the cost of the such remediation and (z) diligently pursues such
remediation in accordance with such plan.
(b) If on May 19, 1998, (i) the entire Commitment under
the Committed Loan Agreement of the Lender existing on the date of this
Agreement has not been assigned to, and assumed by, one or more banks or
other financial institutions, having a short-term credit rating of A-1 by
Standard and Poor's Rating Group and P-1 by Xxxxx'x Investor Services,
Inc., pursuant to the terms of the Committed Loan Agreement and (ii) such
banks or other financial institutions have simultaneously executed and
delivered a Liquidity Asset Purchase Agreement (the events in (i) and (ii)
hereof being collectively referred to as the "Liquidity Assignment"), then
Lessee shall be deemed to have delivered a Purchase Notice pursuant to
Section 22.1 of this Lease for all Leased Assets then subject to this
Lease, and shall be obligated to purchase all such Leased Assets on June
19, 1998, for an amount equal to the Lease Balance for all such Leased
Assets or, if, on May 19, 1998, the Lessee shall have delivered no Lease
Supplements under this Lease or if there are no Leased Assets then subject
to this Lease, Lessee shall be obligated to pay the Lease Balance
outstanding on June 19, 1998 (plus, in either case, the outstanding amount
of any Advances made pursuant to Section 3.2(f) hereof); provided that
Lessee shall have no such obligation to purchase such Leased Assets or make
such payments if:
(i) on or before June 19, 1998, the Liquidity
Assignment has been completed; or
(ii)on or before June 19, 1998, the Lessee shall
have (A) caused to be established with the Collateral Agent a
segregated account, under the sole dominion and control of the
Collateral Agent, for the benefit of the Lender (the "Liquidity
Collateral Account"), (B) deposited in such Liquidity Collateral
Account in immediately available Dollars an amount equal to the Debt
Contribution of all outstanding Advances made under this Lease on or
before June 19, 1998 and (C) shall have executed and delivered to the
Collateral Agent a security agreement, in form and substance
satisfactory to the Collateral Agent and its counsel, in respect of
the Liquidity Collateral Account, which security agreement shall
grant to the Collateral Agent for the benefit of the Lenders and the
Conduits a security interest in any amounts in the Liquidity
Collateral Account as security for the performance of the Lessee's
obligations under this Lease.
(c) If any event or condition described in Section
20.1(f) or (g) of this Lease shall occur or exist in respect of RX Choice,
Inc., then the Lessee shall be deemed to have delivered a Purchase Notice
pursuant to Section 22.1 of this Lease for all Leased Assets then subject
to this Lease, and shall be obligated to purchase all such Leased Assets on
or before the day (the "Purchase Date") which occurs 60 days after the
occurrence of such event or existence of such condition for an amount equal
to the entire Lease Balance for all Leased Assets or, if on such Purchase
Date, the Lessee shall have delivered no Lease Supplements under, or there
are no Leased Assets then subject to, this Lease, then the Lessee shall be
obligated to pay the entire Lease Balance outstanding on the Purchase Date
(together with, in either case, the outstanding amount of any Advances made
pursuant to Section 3.2(f) hereof); provided, however, that the provisions
of this Section 19.1(c) shall be of no further force and effect beginning
on the date that is 91 days after the loan provided for under the Senior
Loan Agreement (as such term is defined in the Intercreditor Agreement) is
repaid in full.
19.2 Termination Procedures. (a) On the date of the payment by the
Lessee of the Lease Balance for the affected Property in accordance with
the Termination Notice in accordance with Section 19.1(a) of this Lease,
this Lease and the Lessor's Commitment shall terminate with respect to such
affected Property and, the provisions of Section 25.1 shall be applicable.
(b) On the date of payment by the Lessee of the Lease
Balance in accordance with Section 19.1(b) or (c) above, this Lease, and
the Lessor's Commitment, shall terminate and, with respect to any Leased
Assets, the provisions of Section 25.1 shall be applicable.
ARTICLE XX
EVENTS OF DEFAULT; REMEDIES
20.1 Events of Default. The occurrence of any one or more of the
following events (whether such event shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in
compliance with any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body) shall
constitute an "Event of Default":
(a) the Lessee shall fail to make payment of any Base
Rent, Supplemental Rent, Purchase Option Price, Lease Balance or any other
amount payable hereunder within three (3) Business Days after the due date
therefor, including, without limitation, amounts due pursuant to Section
19.1, 22.1 or 22.2 or Article XXIV;
(b) the Lessee shall fail to maintain insurance as
required by Article XVII of this Lease;
(c) the Lessee shall fail to observe or perform any term,
covenant or condition of the Lessee under this Lease or the other Operative
Documents to which it is party other than those described in Section
20.1(a) or (b) hereof, and, in each such case, such failure shall have
continued for thirty (30) days after the earlier of (i) delivery to the
Lessee of written notice thereof from the Lessor or (ii) a Responsible
Employee of the Lessee shall have knowledge that such failure, if not
cured, will constitute an Event of Default;
(d) any representation or warranty made by the Lessee in
any of the Operative Documents to which it is a party shall prove to have
been inaccurate in any material respect at the time made;
(e) any representation or warranty made by the Guarantor
in any of the Operative Documents to which it is a party shall prove to
have been inaccurate in any material respect at the time made;
(f) the Guarantor or any Significant Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing;
(g) an involuntary case or other proceeding shall be
commenced against the Guarantor or any Significant Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against the Guarantor or any Significant Subsidiary under
the federal bankruptcy laws as now or hereafter in effect;
(h) an event of default (as defined therein) under the
Credit Agreement occurs, unless (i) such event of default has been waived
by the requisite parties to the Credit Agreement and (ii) the Lessor and
the Liquidity Providers shall have received a pro rata share (based on the
respective commitments of the Lessor, Liquidity Providers and parties to
the Credit Agreement) of any consideration given by the Guarantor or its
Affiliates in connection with obtaining any such waiver;
(i) an event of default (as defined therein) under the
Existing Master Lease shall occur;
(j) a Construction Agency Agreement Event of Default
shall occur, or an Event of Default (as defined therein) shall occur under
any other Operative Document;
(k) the Lessee or the Guarantor shall directly or
indirectly contest the validity of any Operative Document in any manner in
any court of competent jurisdiction or any lien granted by any Operative
Document, or shall repudiate, or purport to discontinue or terminate, the
Construction Agency Agreement, this Lease or the Guaranty or the
Construction Agency Agreement, this Lease or the Guaranty shall cease to be
a legal, valid and binding obligation or shall cease to be in full force
and effect for any reason; or
(l) the Guarantor shall fail to observe or perform any
term, covenant or condition of, or incorporated by reference in, the
Guaranty beyond any grace period applicable thereto (it being agreed that
the Guarantor's failure to perform any obligation of the Lessee or any
covenant incorporated in the Guaranty shall not constitute an Event of
Default until any grace period applicable to the Lessee under the Operative
Documents or to the Guarantor under the Credit Agreement, as the case may
be, shall have expired).
20.2 Remedies. Upon the occurrence of any Event of Default and at any
time thereafter, the Lessor may, so long as such Event of Default is
continuing, do one or more of the following as the Lessor in its sole
discretion shall determine, without limiting any other right or remedy the
Lessor may have on account of such Event of Default (including, without
limitation, the obligation of the Lessee to purchase the Leased Assets as
set forth in Section 22.3):
(a) The Lessor may, by notice to the Lessee terminate
this Lease as of the date specified in such notice; provided, however, (i)
no reletting, reentry or taking of possession of any Leased Asset or all of
the Leased Assets (or any portion thereof) by the Lessor will be construed
as an election on the Lessor's part to terminate this Lease unless a
written notice of such intention is given to the Lessee, (ii)
notwithstanding any reletting, reentry or taking of possession, the Lessor
may at any time thereafter elect to terminate this Lease for a continuing
Event of Default and (iii) no act or thing done by the Lessor or any of its
agents, representatives or employees and no agreement accepting a surrender
of the Leased Asset shall be valid unless the same be made in writing and
executed by the Lessor;
(b) The Lessor may (i) demand that the Lessee, and the
Lessee shall upon the written demand of the Lessor, return any Leased Asset
promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of Section 13.2 hereof
as if the Leased Asset were being returned at the end of the Base Term, and
the Lessor shall not be liable for the reimbursement of the Lessee for any
costs and expenses incurred by the Lessee in connection therewith and (ii)
without prejudice to any other remedy which the Lessor may have for
possession of any Leased Asset, and to the extent and in the manner
permitted by Applicable Law, enter upon such Leased Asset and take
immediate possession of (to the exclusion of the Lessee) such Leased Asset
or any part thereof and expel or remove the Lessee and any other Person who
may be occupying such Leased Asset, by summary proceedings or otherwise,
all without liability to the Lessee for or by reason of such entry or
taking of possession, whether for the restoration of damage to property
caused by such taking or otherwise and, in addition to the Lessor's other
damages, the Lessee shall be responsible for all costs and expenses
incurred by the Lessor in connection with any reletting, including, without
limitation, reasonable brokers' fees and all reasonable costs of any
alterations or repairs made by the Lessor;
(c) The Lessor may (i) sell all or any part of one or
more Leased Assets at public sale free and clear of any rights of the
Lessee and without any duty to account to the Lessee with respect to such
action or inaction or any proceeds in which event the Lessee's obligation
to pay Capitalized Interest or Base Rent hereunder for periods commencing
after the date of such sale shall be terminated or proportionately reduced,
as the case may be; and (ii) if the Lessor shall so elect, demand that the
Lessee pay to the Lessor, and the Lessee shall pay to the Lessor, on the
date of such sale, as liquidated damages for loss of a bargain and not as a
penalty (the parties agreeing that the Lessor's actual damages would be
difficult to predict, but the aforementioned liquidated damages represent a
reasonable approximation of such amount), an amount equal to (A) the
excess, if any, of (1) the Lease Balance calculated as of the date of such
sale (including all Rent due and unpaid to and including such date), over
(2) the net proceeds of such sale (that is, after deducting all costs and
expenses incurred by the Lessor incident to such conveyance, including,
without limitation, repossession costs, brokerage commissions, prorations,
transfer taxes, reasonable fees and expenses for counsel, title insurance
fees, survey costs, recording fees, and any repair costs); plus (B)
interest at the Overdue Rate on the foregoing amount from such date until
the date of payment;
(d) The Lessor may, at its option, elect not to terminate
this Lease and continue to collect all Base Rent, Supplemental Rent, and
all other amounts due the Lessor (together with all costs of collection)
and enforce the Lessee's obligations under this Lease as and when the same
become due, or are to be performed, and at the option of the Lessor, upon
any abandonment of any Leased Asset by the Lessee or re-entry of same by
the Lessor, the Lessor may, in its sole and absolute discretion, elect not
to terminate this Lease and may make the necessary repairs in order to
relet any Leased Asset, and relet any Leased Asset or any part thereof for
such term or terms (which may be for a term extending beyond the Base Term
of this Lease) and at such rental or rentals and upon such other terms and
conditions as the Lessor in its reasonable discretion may deem advisable;
and upon each such reletting all rentals actually received by the Lessor
from such reletting shall be applied to the Lessee's obligations hereunder
and the other Operative Documents in such order, proportion and priority as
the Lessor may elect in the Lessor's sole and absolute discretion. If such
rentals received from such reletting during any period are less than the
Rent with respect to such Leased Asset to be paid during that period by the
Lessee hereunder, the Lessee shall pay any deficiency, as calculated by the
Lessor, to the Lessor on the next Payment Date;
(e) Unless all of the Leased Assets have been sold in
their entirety, the Lessor may, whether or not the Lessor shall have
exercised or shall thereafter at any time exercise any of its rights under
paragraph (b), (c) or (d) of this Section 20.2 with respect to the Leased
Assets or portions thereof, demand, by written notice to the Lessee
specifying a date not earlier than ten (10) days after the date of such
notice, that the Lessee purchase, on such date, all unsold Leased Assets
(or the remaining portion thereof) in accordance with the provisions of
Article XXII; provided, however, that no such written notice shall be
required upon the occurrence of any Event of Default in clause (f) or (g)
of Section 20.1;
(f) The Lessor may exercise any other right or remedy
that may be available to it under Applicable Law, or proceed by appropriate
court action (legal or equitable) to enforce the terms hereof or to recover
damages for the breach hereof. Separate suits may be brought to collect any
such damages for any period(s), and such suits shall not in any manner
prejudice the Lessor's right to collect any such damages for any subsequent
period(s), or the Lessor may defer any such right to suit until after the
expiration of the Base Term, in which event such right to suit shall be
deemed not to have accrued until the expiration of the Base Term;
(g) To the maximum extent permitted by Applicable Law,
the Lessee hereby waives the benefit of any appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and
all rights of marshalling in the event of any sale of any Leased Asset or
any interest therein;
(h) The Lessor shall be entitled to enforce payment of
the indebtedness and performance of the obligations secured hereby and to
exercise all rights and powers under this instrument or under any of the
other Operative Documents or other agreement or any laws now or hereafter
in force, notwithstanding some or all of the obligations secured hereby may
now or hereafter be otherwise secured, whether by mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of
this instrument nor its enforcement, shall prejudice or in any manner
affect the Lessor's right to realize upon or enforce any other security now
or hereafter held by the Lessor, it being agreed that the Lessor shall be
entitled to enforce this instrument and any other security now or hereafter
held by the Lessor in such order and manner as the Lessor may determine in
its absolute discretion. No remedy herein conferred upon or reserved to the
Lessor is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute. Every power or remedy given by any of
the Operative Documents to the Lessor or to which it may otherwise be
entitled, may be exercised, concurrently or independently, from time to
time and as often as may be deemed expedient by the Lessor. In no event
shall the Lessor, in the exercise of the remedies provided in this
instrument (including, without limitation, in connection with the
assignment of rents to Lessor, or the appointment of a receiver and the
entry of such receiver on to all or any part of the Leased Assets), be
deemed a "mortgagee in possession," and the Lessor shall not in any way be
made liable for any act, either of commission or omission, in connection
with the exercise of such remedies; or
(i) An action of mortgage foreclosure as now provided or
hereafter prescribed by law, may forthwith be commenced and prosecuted to
judgment, execution and sale, for the collection of the whole amount of
such Lease Balance, together with all fees, costs and expenses of such
proceedings, including a reasonable attorney's fees. And all errors in such
proceedings, together with any stays of or exemptions from execution, or
extensions of time of payment, which may be given by any Applicable Law now
in force, or which may be enacted hereafter, are hereby forever waived and
released.
If, pursuant to the exercise by the Lessor of its remedies pursuant
to this Section 20.2, the Lease Balance, all other amounts due and owing
from the Lessee under this Lease and the other Operative Documents have
been paid in full, the Lessor shall remit to the Lessee any excess amounts
received by the Lessor.
20.3 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 20.2, the 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 repossession; (c) the benefit of any laws now or hereafter in
force exempting property from liability for rent or for debt or limiting
the Lessor with respect to the election of remedies; and (d) any other
rights which might otherwise limit or modify any of the Lessor's rights or
remedies under this Article XX.
20.4 Power of Sale and Foreclosure. In addition to any other rights
herein, Lessor shall upon the occurrence of any Event of Default have the
option to exercise its rights under each Mortgage executed in connection
herewith, pursuant to which the trustee thereunder has the POWER OF SALE.
ARTICLE XXI
ASSIGNMENT
21.1 Assignment by Lessor. The Lessor may not assign, sell or
transfer all or any part of its rights and obligations hereunder or under
the other Operative Documents or the Leased Assets; provided, however, that
(i) the Lessor may sell Purchaser Interests to the Receivable Purchaser and
(ii) with the consent of the Lessee, the Conduits and the Liquidity
Providers, which consent shall not be unreasonably withheld, the Lessor may
assign, sell or transfer all or any part of such rights and obligations or
the Leased Assets to any financial institution, provided that the Lessor is
not thereby released from its obligations hereunder.
21.2 Assignment by Lessee. The Lessee may not assign this Lease or
any of its rights or obligations hereunder in whole or in part to any
Person without the consent of the Lessor; provided, however, that the
Lessee may assign all (and not less than all) of its rights hereunder
without such consent to one or more of its Affiliates so long as the Lessee
remains fully liable for all of the obligations of the "Lessee" hereunder
and under the other Operative Documents.
ARTICLE XXII
PURCHASE PROVISIONS
22.1 Purchase Option. Provided that the Lessee shall not have given
notice of its intention to exercise the Remarketing Option, the Lessee
shall have the option (exercisable by giving the Lessor irrevocable written
notice (the "Purchase Notice") of the Lessee's election to exercise such
option) to purchase all of the Leased Assets under any Lease Supplement
(unless provisions with respect to joinder of purchase options for the
Leased Assets under more than one Lease Supplement are set forth in a Lease
Supplement, in which case such exercise must comply with such provisions)
on any Scheduled Payment Date specified in such Purchase Notice at a price
equal to the Lease Balance for such Leased Assets (the "Purchase Option
Price"). The Lessee shall deliver the Purchase Notice to the Lessor not
less than thirty (30) days prior to such purchase. If the Lessee exercises
its option to purchase one or more Leased Assets pursuant to this Section
22.1 (the "Purchase Option"), the Lessor shall transfer to the Lessee or
its designee all of the Lessor's right, title and interest in and to the
applicable Leased Assets as of the date specified in the Purchase Notice
upon receipt of the Purchase Option Price in accordance with Section
25.1(a). The Lessee may designate, in a notice given to the Lessor not less
than ten (10) Business Days prior to the closing of such purchases (time
being of the essence), the transferee or transferees to whom the conveyance
shall be made (if other than to the Lessee), in which case such conveyance
shall (subject to the terms and conditions set forth herein) be made to
such designee; provided, however, that such designation of a transferee or
transferees shall not cause the Lessee to be released, fully or partially,
from any of its obligations under this Lease, including, without
limitation, the obligation to pay the Lessor the Lease Balance on the
applicable Expiration Date.
22.2 Acceleration of Purchase Obligation. (a) The Lessee shall be
obligated to purchase for an amount equal to the Lease Balance the Lessor's
interest in the Leased Assets (notwithstanding any prior election to
exercise its Purchase Option pursuant to Section 22.1) (i) automatically
and without notice upon the occurrence of any Event of Default specified in
clause (f) or (g) of Section 20.1 and (ii) as provided for at Section
20.2(e) immediately upon written demand of the Lessor upon the occurrence
of any other Event of Default.
(b) The Lessee shall be obligated to purchase the
Lessor's interest in the Leased Assets for an amount equal to the Lease
Balance immediately upon written demand of the Lessor at any time during
the term when (i) subject to Section 21.1, the Lessor ceases to have title
as contemplated by Section 15.1 or (ii) any related Security Document
(other than this Lease) to which the Lessee is a party shall cease to be in
full force and effect, or shall cease to give the Lessor the Liens, rights,
powers and privileges purported to be created thereby.
(c) Any purchase under Section 22.1 or this Section 22.2
shall be in accordance with Section 25.1(a).
22.3 Purchase of Unimproved Land. Provided that no Default or Event
of Default has occurred and is continuing, the Lessee shall have the option
(exercisable by giving the Lessor irrevocable written notice of the
Lessee's exercise of such option) to purchase any unimproved portion of any
Land (and any related easements for utilities and access to be specified at
such time) not necessary or desirable for operations of the Improvements
constructed or to be constructed on such Land on any Scheduled Payment Date
specified in such notice at a price equal to the Fair Market Sales Value,
as determined by an Appraisal, of such unimproved portion and such
easements. The Lessee shall give such notice to the Lessor not less than
thirty (30) days prior to such purchase. If the Lessee exercises its option
pursuant to this Section 22.3, the Lessor shall transfer to the Lessee or
its designee all of the Lessor's right, title and interest in and to the
applicable unimproved portion of Land and grant the related easements as of
the date specified in the Lessee's notice under procedures analogous to
those set forth in Section 25.1(a). The purchase price paid by the Lessee
shall be applied to reduce the Lease Balance for the related Property.
ARTICLE XXIII
RENEWAL TERMS
23.1 Renewal. (a) Subject to the conditions set forth herein, and
unless otherwise specified in the Lease Supplement applicable to any Leased
Assets, the Lessee shall have the option (the "Renewal Option"), to extend
the Base Term for such Leased Assets for up to three (3) additional
one-year periods (each, a "Renewal Term"), with each such Renewal Term to
commence on the first day following the Expiration Date then in effect. The
Renewal Option with respect to each Renewal Term shall automatically be
effective upon satisfaction of each of the following conditions:
(A) the Lessor and each Liquidity Provider
shall have consented to the renewal of the Lease after receipt
of Lessee's request therefor delivered to the Lessor and the
Liquidity Agent not later than ninety (90) days prior to each
of the fourth, fifth and sixth anniversaries of the Closing
Date,
(B) (i) no Event of Default under this
Lease shall have occurred and be continuing, and (ii) by
exercise of such Renewal Option, the Lessee shall be deemed to
represent to the Lessor as to the matters set forth in clause
(i) of this condition (B), and
(C) the Lessee shall not have exercised the
Remarketing Option or the Purchase Option for such Leased
Assets under this Lease.
(b) Each extension of this Lease for a Renewal Term shall
be subject to this Lease. Each Renewal Term shall cause the remaining Base
Term of relevant Leased Assets to be extended by one additional year from
the Expiration Date in effect immediately prior to such extension; thus, if
this Lease is extended on each of the anniversaries referred to above, the
term of this Lease shall be for ten (10) years; provided, however, that in
no event shall the Base Term as extended by any Renewal Term extend beyond
the date identified in the applicable Lease Supplement.
(c) In the event that the Lessor and each Liquidity
Provider have not agreed to extend this Lease at least fifteen (15) days
prior to each applicable anniversary date, the Lessee's request for
extension shall be deemed to have been rejected.
ARTICLE XXIV
REMARKETING OPTION
24.1 Option to Remarket. Subject to the fulfillment of each of the
conditions set forth in this Section 24.1, the Lessee shall have the option
(the "Remarketing Option") from and after June 19, 1998, to market and
complete the sale of Lessor's interest in one or more Leased Assets for the
Lessor.
The Lessee's effective exercise and consummation of the Remarketing
Option as to one or more Leased Assets shall be subject to the due and
timely fulfillment of each of the following provisions as to such Leased
Assets as of the dates set forth below.
(a) Not later than six (6) months prior to the Expiration
Date, the Lessee shall give to the Lessor written notice of the Lessee's
exercise of the Remarketing Option under this Lease, which exercise shall
be irrevocable.
(b) Not later than one hundred twenty (120) days prior to
the Expiration Date, the Lessee shall deliver to the Lessor an
Environmental Audit for each Property included in such Leased Assets. Such
Environmental Audit shall be prepared by an environmental consultant
selected by the Lessee and approved in advance by the Lessor and shall
contain conclusions reasonably satisfactory to the Lessor as to the
environmental status of such Property. If any such Environmental Audit
indicates any exceptions, the Lessee shall have also delivered a Phase Two
environmental assessment by such environmental consultant prior to the
Expiration Date showing the completion of the remedying of such exceptions
in compliance with Applicable Law.
(c) On the date of the Lessee's notice to the Lessor of
the Lessee's exercise of the Remarketing Option, no Event of Default shall
exist, and on the Expiration Date, no Event of Default or Default shall
exist. Any Permitted Liens (other than Lessor Liens) on each Leased Asset
that were contested by the Lessee shall have been removed on or before the
Expiration Date.
(d) The Improvements on each Property included in such
Leased Assets shall have been constructed in accordance with the Plans and
Specifications and shall have achieved Substantial Completion on or before
the date of the Lessee's notice to the Lessor of the Lessee's exercise of
the Remarketing Option. The Lessee shall have completed in all material
respects all Modifications, restoration and rebuilding of such Leased
Assets pursuant to Section 14.1 and 18.1 (as the case may be) and shall
have fulfilled in all material respects all of the conditions and
requirements in connection therewith pursuant to said Sections, in each
case by the date of the Lessee's notice to the Lessor of the Lessee's
exercise of the Remarketing Option (time being of the essence), regardless
of whether the same shall be within the Lessee's control. The Lessee shall
have also paid the cost of all Modifications commenced prior to the
Expiration Date. The Lessee shall not have been excused pursuant to Section
16.1 from complying with any Applicable Law that involved the extension of
the ultimate imposition of such Applicable Law beyond the last day of the
Base Term.
(e) During the Marketing Period, the Lessee shall use
best efforts, in such manner as the Lessee shall reasonably determine, to
sell the Lessor's interest in the Leased Assets and will attempt to obtain
the highest purchase price therefor and for not less than the Fair Market
Sales Value of all of the Leased Assets. The Lessee will be responsible for
hiring brokers and making the Leased Assets available for inspection by
prospective purchasers. The Lessee shall promptly upon request permit
inspection of the Leased Assets and any maintenance records relating to the
Leased Assets by the Lessor and any potential purchasers, and shall
otherwise do all things necessary to sell and deliver possession of the
Leased Assets to any purchaser. All such marketing of the Leased Assets
shall be at the Lessee's sole expense. The Lessee's agency under this
clause shall, for the first three (3) months of the Marketing Period, be on
an exclusive basis. In the event the Lessee is unable to procure during
such period a bona fide bid from a non-Affiliated Person with demonstrable
financial capacity to consummate such bid for any Leased Asset, from and
after such third month, the agency hereunder shall be on a non-exclusive
basis.
(f) The Lessee shall submit all bids to the Lessor and
the Lessor will have the right to review the same and the right to submit
any one or more bids. All bids shall be on an all-cash basis unless the
Lessor shall otherwise agree in its sole discretion. No such purchaser
shall be the Lessee or an Affiliate of the Lessee. The written offer must
specify the Expiration Date as the closing date unless the Lessor shall
otherwise agree in its sole discretion.
(g) In connection with any such sale of Lessor's interest
in the Leased Assets, the Lessee will provide to the purchaser all
customary "seller's" indemnities, representations and warranties regarding
absence of Liens (except Lessor Liens) and the condition of such Leased
Assets, including, without limitation, an environmental indemnity for any
Property to the extent the same are required by the purchaser. The Lessee
shall have obtained, at its cost and expense, all required governmental and
regulatory consents and approvals and shall have made all filings as
required by Applicable Law in order to carry out and complete the transfer
of the Leased Assets. As to the Lessor, any such sale of Lessor's interest
in the Leased Assets shall be made on an "as is, with all faults" basis
without representation or warranty by the Lessor other than the absence of
Lessor Liens. Any agreement as to such sale shall be made subject to the
Lessor's rights hereunder.
(h) The Lessee shall pay directly, and not from the sale
proceeds, all prorations, credits, costs and expenses of the sale of
Lessor's interest in the Leased Assets, whether incurred by the Lessor or
the Lessee, including without limitation, the cost of all title insurance,
surveys, environmental reports, appraisals, transfer taxes, the Lessor's
reasonable attorneys' fees, the Lessee's attorneys' fees, commissions,
escrow fees, recording fees, and all applicable documentary and other
transfer taxes.
(i) The Lessee shall pay to the Lessor on or prior to the
Expiration Date (or to such other Person as the Lessor shall notify the
Lessee in writing) an amount equal to the Contingent Rental Adjustment for
such Leased Assets, plus all Base Rent and all other amounts hereunder
which have accrued or will accrue with respect thereto prior to or as of
the Expiration Date, in the type of funds specified in Section 7.5 hereof.
(j) The purchase of Lessor's interest in such Leased
Assets shall be consummated on the Expiration Date and the Gross Proceeds
of the sale of the Leased Assets shall be paid directly to the Lessor. The
Lessor shall remit to the Lessee from Gross Proceeds the documented
expenses incurred by the Lessee under clause (h) hereof in connection with
such sale. If the remaining Gross Proceeds plus the aggregate Contingent
Rental Adjustment received by Lessor, exceeds the Lease Balance for such
Leased Assets as of such date, then the excess shall be paid to the Lessee
on the Expiration Date.
Except as provided in the next sentence hereof or as may be otherwise
provided in a Lease Supplement, if one or more of the foregoing provisions
shall not be fulfilled as of the date set forth above with respect to the
Leased Assets under any Lease Supplement, then the Lessor shall declare by
written notice to the Lessee the Remarketing Option to be null and void
(whether or not it has been theretofore exercised by the Lessee), in which
event all of the Lessee's rights under this Section 24.1 shall immediately
terminate and the Lessee shall be obligated to purchase Lessor's interest
in such Leased Assets as if it had exercised its option under Section 22.1
on the Expiration Date. Notwithstanding the foregoing, the Lessee shall not
be required to purchase Lessor's interest in such Leased Assets pursuant to
the preceding sentence if Lessor's interest in such Leased Assets is not
sold on or prior to the Expiration Date and the Lessee has otherwise
fulfilled all of its obligations under clauses (a) through (i) hereof
(including the payment of all amounts referred to therein).
Except as expressly set forth herein, the Lessee shall have no right,
power or authority to bind the Lessor in connection with any proposed sale
of Lessor's interest in the any Leased Asset.
In the event that the sale of any Leased Asset is not consummated on
the Expiration Date, but such sale is consummated any time thereafter, the
Lessor shall remit to the Lessee, promptly after the consummation of the
sale of the such Leased Asset, any excess remaining after deducting the
then outstanding Lease Balance plus the Imputed Equity Return thereon
accruing from and after the Expiration Date from the Gross Proceeds.
24.2 Certain Obligations Continue. During the Marketing Period, the
obligation of the Lessee to pay Rent shall continue undiminished until
payment in full to the Lessor of the Contingent Rental Adjustment and all
other amounts due to the Lessor with respect to the Leased Assets under
each Lease Supplement under the Operative Documents to which the Lessee is
a party. The Lessor shall have the right, but shall be under no duty, to
solicit bids, to inquire into the efforts of the Lessee to obtain bids or
otherwise to take action in connection with any such sale of Lessor's
interest in the Leased Assets, other than as expressly provided in this
Article XXIV.
ARTICLE XXV
PROCEDURES RELATING TO PURCHASE OR REMARKETING
25.1 Provisions Relating to the Purchase and Conveyance Upon
Remarketing. (a) In connection with the Lessee's purchase of the Leased
Assets under any Lease Supplement pursuant to Section 22.1 or 22.2, or in
connection with a purchase of Lessor's interest in any Leased Asset under
Article XIX or the payment of all amounts due under Section 5.1 of the
Construction Agency Agreement:
(i) the Lessee shall pay the amounts set forth in
Section 22.1, Section 22.2, Article XIX, Section 5.1 of the
Construction Agency Agreement, as applicable, together with all
accrued Rent relating to such Leased Assets and any other amount then
due and payable by the Lessee to the Lessor under this Lease or the
other Operative Documents;
(ii) the Lessor shall execute and deliver to the
Lessee (or to the Lessee's designee) at the Lessee's cost and expense
a special warranty deed with respect to the Improvements, a special
warranty deed or release of Ground Lease with respect to the Land, a
xxxx of sale with respect to the Equipment or any other Leased Asset
and an assignment of the Lessor's entire interest in the Leased
Assets being sold (which shall include an assignment of all of the
Lessor's right, title and interest in and to any Net Proceeds not
previously received by the Lessor and, if applicable, a termination
notice pursuant to the Ground Lease, in each case in recordable form
and otherwise in conformity with local custom and free and clear of
the Lien of the Mortgage and any Lessor Liens attributable to the
Lessor;
(iii) the Leased Assets being sold shall be conveyed
to the Lessee "AS IS" and in their then present physical condition;
and
(iv) the Lessor shall execute and deliver to Lessee
and the Lessee's title insurance company an affidavit as to the
absence of Lessor Liens.
(b) If the Lessee properly exercises the Remarketing
Option with respect to the Leased Assets under any Lease Supplement, then
the Lessee shall, on the Expiration Date, and at its own cost, transfer
possession of the Leased Assets to the Lessor or the independent
purchaser(s) thereof, as the case may be, in each case by surrendering the
same into the possession of the Lessor or such purchaser(s), as the case
may be, free and clear of all Liens other than Lessor Liens, in good
condition (as modified by Modifications permitted by this Lease), ordinary
wear and tear excepted, and in compliance with Applicable Law. The Lessee
shall, on and within a reasonable time before and up to one year after the
Expiration Date, cooperate reasonably with the Lessor and the independent
purchaser(s) of Lessor's interest in the Leased Assets in order to
facilitate the purchase by such purchaser's) of Lessor's interest in the
Leased Assets, which cooperation shall include the following, all of which
the Lessee shall do on or before the Expiration Date or as soon thereafter
as is reasonably practicable: providing copies of all books and records
regarding the maintenance and ownership of the Leased Assets and all data
and technical and all other information relating thereto, providing a
current copy of the Plans and Specifications for the Properties, granting
or assigning all licenses (to the extent such licenses are assignable under
Applicable Law) necessary for the operation and maintenance of the Leased
Assets and cooperating reasonably in seeking and obtaining all necessary
Governmental Action. The obligations of the Lessee under this paragraph
shall survive the expiration or termination of this Lease.
ARTICLE XXVI
INDEMNIFICATION
26.1 General Indemnification. The Lessee agrees, whether or not any
of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless
each Indemnitee from and against, any and all Claims that may be imposed
on, incurred by or asserted against such Indemnitee (whether because of
action or omission by such Indemnitee or otherwise), whether or not such
Indemnitee shall also be indemnified as to any such Claim by any other
Person and whether or not such Claim arises or accrues prior to the Closing
Date or after the Expiration Date, in any way relating to or arising out
of:
(a) any of the Operative Documents or any of the
transactions contemplated thereby, and any amendment, modification or
waiver in respect thereof entered into or acknowledged by the Lessee;
(b) the Leased Assets or any part thereof or interest
therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition or
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to any provision hereof), return or other
disposition of all or any part or any interest in any Leased Asset or the
imposition of any Lien (or incurring of any liability to refund or pay over
any amount as a result of any Lien) thereon, including, without limitation:
(1) Claims or penalties arising from any violation of law or in tort
(strict liability or otherwise), (2) latent or other defects, whether or
not discoverable, (3) any Claim based upon a violation or alleged violation
of the terms of any restriction, easement, condition or covenant or other
matter affecting title to any Leased Asset, (4) the making of any
Modifications in violation of any standards imposed by any insurance
policies required to be maintained by the Lessee pursuant to this Lease
which are in effect at any time with respect to any Leased Asset or any
part thereof, (5) any Claim for patent, trademark or copyright
infringement, (6) Claims which would otherwise be covered by insurance
policies of the Lessee, as required by Article XVII, and (7) Claims arising
from any public improvements with respect to any Property resulting in any
charge or special assessments being levied against the Property or any
plans to widen, modify or realign any street or highway adjacent to any
Property, or any Claim for utility "tap-in" fees;
(d) the breach by the Lessee of any covenant,
representation or warranty made by it or deemed made by it in any Operative
Document or any certificate required to be delivered by any Operative
Document;
(e) the retaining or employment of any broker, finder or
financial advisor by the Lessee to act on its behalf in connection with the
transactions contemplated hereby;
(f) the existence of any Lien on or with respect to any
Leased Asset, any Capitalized Interest or Base Rent or Supplemental Rent,
title thereto, or any interest therein including any Liens which arise out
of the possession, use, occupancy, construction, repair or rebuilding of
any Leased Asset or by reason of labor or materials furnished or claimed to
have been furnished to the Lessee, or any of its contractors or agents or
by reason of the financing of any personalty or equipment purchased or
leased by the Lessee or Modifications constructed by the Lessee, except
Lessor Liens and Liens in favor of the Lessor; or
(g) subject to the accuracy of Lessor's representation
set forth in Section 6.1(a), the transactions contemplated by this Lease or
by any other Operative Document, in respect of the application of Parts 4
and 5 of Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975 (c) of the Code; provided, however, the Lessee
shall not be required to indemnify any Indemnitee under this Section 26.1
for any of the following: (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee (it being
understood that the Lessee shall be required to indemnify an Indemnitee
even if the ordinary (but not gross) negligence of such Indemnitee caused
or contributed to such Claim) or the breach of any representation, warranty
or covenant of such Indemnitee set forth in any Operative Document, (2) any
Claim resulting from Lessor Liens which the Lessor is responsible for
discharging under the Operative Documents, (3) any Claim to the extent
attributable to acts or events occurring after the expiration of the Base
Term and the return or remarketing of any Leased Asset so long as the
Lessor is not exercising remedies against the Lessee in respect of the
Operative Documents, (4) any Claim arising from a breach or alleged breach
by the Lessor of any agreement entered into in connection with the
assignment or participation of Rent and (5) any Claim arising from the
Lessor's or any other Indemnitee's violation of any state or federal law or
regulation relating to banking or the offer or sale of securities. It is
expressly understood and agreed that the indemnity provided for herein
shall survive the expiration or termination of and shall be separate and
independent from any remedy under this Lease or any other Operative
Document. Without limiting the express rights of any Indemnitee under this
Section 26.1, this Section 26.1 shall be construed as an indemnity only and
not a guaranty of residual value of any Leased Asset.
26.2 Environmental Indemnity. Without limitation of the other
provisions of this Article XXVI, the Lessee hereby agrees to indemnify,
hold harmless and defend each Indemnitee from and against any and all
claims (including without limitation third party claims for personal injury
or real or personal property damage), losses (including but not limited to,
to the extent the Lease Balance has not been fully paid, any loss of value
of any Property), damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings (including informal proceedings)
and orders, judgments, remedial action, requirements, enforcement actions
of any kind, and all reasonable and documented costs and expenses incurred
in connection therewith (including but not limited to reasonable and
documented attorneys' and/or paralegals' fees and expenses), including, but
not limited to, all costs incurred in connection with any investigation or
monitoring of site conditions or any clean-up, remedial, removal or
restoration work by any federal, state or local government agency, arising
in whole or in part, out of
(a) the presence on or under any Property of any
Hazardous Materials, or any releases or discharges of any Hazardous
Materials on, under, from or onto any Property for which any Indemnitee or
Lessee may be legally liable,
(b) any activity for which any Indemnitee or Lessee may
be legally liable, including, without limitation, construction, carried on
or undertaken on or off the Property, and whether by the Lessee or any
predecessor in title or any employees, agents, contractors or
subcontractors of the Lessee or any predecessor in title, or any other
Persons (including such Indemnitee), in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Materials that at any time are located or present
on or under or that at any time migrate, flow, percolate, diffuse or in any
way move onto or under any Property,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs, remediation
and removal costs, cost of corrective action, costs of financial assurance,
fines and penalties and natural resource damages), or death or injury to
any Person, and all expenses associated with the protection of wildlife,
aquatic species, vegetation, flora and fauna, and any mitigative action
required by or under Environmental Laws for which any Indemnitee or Lessee
may be legally liable,
(d) any claim concerning any Indemnitee's or Lessee's
lack of compliance with Environmental Laws, or any act or omission by any
Indemnitee, the Lessee or any of their agents, employees or contractors
causing an environmental condition that requires remediation or would allow
any Governmental Authority to record a Lien on the land records, or
(e) any residual contamination on or under the Land, or
affecting any natural resources, and to any contamination of any property
or natural resources arising in connection with the generation, use,
handling, storage, transport or disposal of any such Hazardous Materials,
and irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations, codes and
ordinances for which any Indemnitee or Lessee may be legally liable;
provided, however, the Lessee shall not be required to indemnify any
Indemnitee under this Section 26.2 for (1) any Claim to the extent
resulting from the willful misconduct or gross negligence of such
Indemnitee (it being understood that the Lessee shall be required to
indemnify an Indemnitee even if the ordinary (but not gross) negligence of
such Indemnitee caused or contributed to such Claim) or (2) any Claim to
the extent attributable to acts or events occurring after the expiration of
the Base Term and the return or remarketing of the Properties so long as
the Lessor is not exercising remedies against the Lessee in respect of the
Operative Documents. It is expressly understood and agreed that the
indemnity provided for herein shall survive the expiration or
termination of and shall be separate and independent from any remedy
under this Lease or any other Operative Document.
26.3 Proceedings in Respect of Claims. With respect to any amount
that the Lessee is requested by an Indemnitee to pay by reason of Section
26.1 or 26.2, such Indemnitee shall, if so requested by the Lessee and
prior to any payment, submit such additional information to the Lessee as
the Lessee may reasonably request and which is in the possession of such
Indemnitee to substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement
thereof, and the Lessee shall be entitled, at its expense, to participate
in, and, to the extent that the Lessee desires to, assume and control the
defense thereof; provided, however, that the Lessee shall have acknowledged
in writing its obligation to fully indemnify such Indemnitee in respect of
such action, suit or proceeding, and, the Lessee shall keep such Indemnitee
fully apprised of the status of such action, suit or proceeding and shall
provide such Indemnitee with all information with respect to such action,
suit or proceeding as such Indemnitee shall reasonably request, and
provided, further, that the Lessee shall not be entitled to assume and
control the defense of any such action, suit or proceeding if and to the
extent that, (A) in the reasonable opinion of such Indemnitee, (x) such
action, suit or proceeding involves any risk of imposition of criminal
liability or any risk of imposition of material civil liability on such
Indemnitee beyond that for which the Indemnitee is jointly and severally
liable with the Lessor or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on any Leased Asset or any part thereof unless, in the case of civil
liability, the Lessee shall have posted a bond or other security
satisfactory to the relevant Indemnitees in respect to such risk or (y) the
control of such action, suit or proceeding would involve a material actual
conflict of interest, (B) such proceeding involves Claims not fully
indemnified by the Lessee which the Lessee and the Indemnitee have been
unable to sever from the indemnified claim(s), or (C) an Event of Default
has occurred and is continuing. The Indemnitee may participate in a
reasonable manner at its own expense and with its own counsel in any
proceeding conducted by the Lessee in accordance with the foregoing. The
Lessee shall not enter into any settlement or other compromise with respect
to any Claim which is entitled to be indemnified under Section 26.1 or 26.2
without the prior written consent of the Indemnitee which consent shall not
be unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee; provided, however, that in the
event that such Indemnitee withholds consent to any settlement or other
compromise, the Lessee shall not be required to indemnify such Indemnitee
under Section 26.1 or 26.2 to the extent that the applicable Claim (x) is
for legal fees and expenses incurred after the date of the proposed
settlement or (y) results in a judgment in excess of such offered money
settlement.
Each Indemnitee shall at the expense of the Lessee supply the Lessee
with such information and documents reasonably requested by the Lessee and
in the possession of such Indemnitee as are necessary or advisable for the
Lessee to participate in any action, suit or proceeding to the extent
permitted by Section 26.1 or 26.2. Unless an Event of Default shall have
occurred and be continuing under Section 20.1(a), (f) or (g) no Indemnitee
shall enter into any settlement or other compromise with respect to any
Claim for which it is entitled to be indemnified under Section 26.1 or 26.2
without the prior written consent of the Lessee, which consent shall not be
unreasonably withheld, unless such Indemnitee waives its right to be
indemnified under Section 26.1 or 26.2 with respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section
26.1 or 26.2 to or on behalf of an Indemnitee, the Lessee, without any
further action, shall be subrogated to any and all claims that such
Indemnitee may have relating thereto (including claims in respect of
insurance policies maintained by such Indemnitee at its own expense), and
such Indemnitee shall execute such instruments of assignment and
conveyance, evidence of claims and payment and such other documents,
instruments and agreements as may be necessary to preserve any such claims
and otherwise cooperate with the Lessee and give such further assurances as
are necessary or advisable to enable the Lessee vigorously to pursue such
claims.
Any amount required to be paid to an Indemnitee pursuant to Section
26.1 or 26.2 shall be paid to such Indemnitee promptly upon receipt of a
written demand therefor from such Indemnitee, accompanied by a written
statement describing in reasonable detail the basis for such indemnity and
the computation of the amount so payable and, if requested by the Lessee,
such determination shall be verified by a nationally recognized independent
accounting firm mutually acceptable to the Lessee and the Indemnitee at the
expense of the Lessee; provided, however, that if the Lessee has assumed
the defense of the related Claim or is paying the costs of the Indemnitee's
defense of the related Claim on an ongoing basis, the Lessee shall not be
required to pay such amount to the applicable Indemnitee until such time as
a judgment is entered with respect to such Claim, the enforcement of which
is not stayed or which judgment is not bonded over, or the Claim is
otherwise settled or lost.
26.4 General Tax Indemnity.
(a) Indemnification. The Lessee agrees to pay and assume
liability for, and to indemnify, protect, defend, save and keep harmless
each Indemnitee from and against, all Impositions.
(b) Contests. If any claim shall be made against any
Indemnitee or if any proceeding shall be commenced against any Indemnitee
(including a written notice of such proceeding) for any Imposition as to
which the Lessee may have an indemnity obligation pursuant to this Section
26.4, or if any Indemnitee shall reasonably determine that any Imposition
to which the Lessee may have an indemnity obligation pursuant to this
Section 26.4 may be payable, such Indemnitee shall promptly (and in any
event, within thirty (30) days) notify the Lessee in writing (provided that
failure to so notify the Lessee within thirty (30) days shall not alter
such Indemnitee's rights under this Section 26.4 except to the extent such
failure precludes or materially adversely affects the ability to conduct a
contest of any indemnified Taxes) and shall not take any action with
respect to such claim, proceeding or Imposition without the written consent
of the Lessee (such consent not to be unreasonably withheld or unreasonably
delayed) for thirty (30) days after the receipt of such notice by the
Lessee; provided, however, that in the case of any such claim or
proceeding, if such Indemnitee shall be required by law or regulation to
take action prior to the end of such 30-day period, such Indemnitee shall
in such notice to the Lessee, so inform the Lessee, and such Indemnitee
shall not take any action with respect to such claim, proceeding or
Imposition without the consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for ten (10) days after the
receipt of such notice by the Lessee unless the Indemnitee shall be
required by law or regulation to take action prior to the end of such
10-day period.
The Lessee shall be entitled for a period of thirty (30) days from
receipt of such notice from the Indemnitee (or such shorter period as the
Indemnitee has notified the Lessee is required by law or regulation for the
Indemnitee to commence such contest), to request in writing that such
Indemnitee contest the imposition of such Tax, at the Lessee's expense. If
(x) such contest can be pursued in the name of the Lessee and independently
from any other proceeding involving a Tax liability of such Indemnitee for
which the Lessee has not agreed to indemnify such Indemnitee, (y) such
contest must be pursued in the name of the Indemnitee, but can be pursued
independently from any other proceeding involving a Tax liability of such
Indemnitee for which the Lessee has not agreed to indemnify such Indemnitee
or (z) the Indemnitee so requests, then the Lessee shall be permitted to
control the contest of such claim, provided that in the case of a contest
described in clause (y), if the Indemnitee determines in good faith that
such contest by the Lessee could have a material adverse impact on the
business or operations of the Indemnitee and provides a written explanation
to the Lessee of such determination, the Indemnitee may elect to control or
reassert control of the contest, and provided, that by taking control of
the contest, Lessee acknowledges that it is responsible for the Imposition
ultimately determined to be due by reason of such claim, and provided,
further, that in determining the application of clauses (x) and (y) of the
preceding sentence, each Indemnitee shall take any and all reasonable steps
to segregate claims for any Taxes for which the Lessee indemnifies
hereunder from Taxes for which the Lessee is not obligated to indemnify
hereunder, so that the Lessee can control the contest of the former. In all
other claims requested to be contested by the Lessee, the Indemnitee shall
control the contest of such claim, acting through counsel reasonably
acceptable to the Lessee. In no event shall the Lessee be permitted to
contest (or the Indemnitee required to contest) any claim, (A) if such
Indemnitee provides the Lessee with a legal opinion of counsel reasonably
acceptable to the Lessee that such action, suit or proceeding involves a
risk of imposition of criminal liability or will involve a material risk of
the sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on any Leased Asset or any part of any thereof unless the
Lessee shall have posted and maintained a bond or other security
satisfactory to the relevant Indemnitee in respect to such risk, (B) if an
Event of Default has occurred and is continuing under Section 20.1(a), (f)
or (g) unless the Lessee shall have posted and maintained a bond or other
security satisfactory to the relevant Indemnitee in respect of the Taxes
subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably foreseeable in connection with the contest
of such claim, (C) unless the Lessee shall have agreed to pay and shall
pay, to such Indemnitee on demand all reasonable out-of-pocket costs,
losses and expenses that such Indemnitee may incur in connection with
contesting such Imposition including all reasonable legal, accounting and
investigatory fees and disbursements, or (D) if such contest shall involve
the payment of the Tax prior to the contest, unless the Lessee shall
provide to the Indemnitee an interest-free advance in an amount equal to
the Imposition that the Indemnitee is required to pay (with no additional
net after-tax costs to such Indemnitee). In addition, for Indemnitee
controlled contests and claims contested in the name of the Indemnitee in a
public forum, no contest shall be required: (A) unless the amount of the
potential indemnity (taking into account all similar or logically related
claims that have been or could be raised in any audit involving such
Indemnitee for which the Lessee may be liable to pay an indemnity under
this Section 26.4(b)) exceeds $50,000 and (B) unless, if requested by the
Indemnitee, the Lessee shall have provided to the Indemnitee an opinion of
counsel selected by the Lessee (which may be in-house counsel) (except, in
the case of income taxes indemnified hereunder which shall be an opinion of
independent tax counsel selected by the Indemnitee and reasonably
acceptable to the Lessee) that a reasonable basis exists to contest such
claim. In no event shall an Indemnitee be required to appeal an adverse
judicial determination to the United States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for
Taxes (or claim for refund) but the decisions regarding what actions are to
be taken shall be made by the controlling party in its sole judgement,
provided, however, that if the Indemnitee is the controlling party and the
Lessee recommends the acceptance of a settlement offer made by the relevant
Governmental Authority and such Indemnitee rejects such settlement offer
then the amount for which the Lessee will be required to indemnify such
Indemnitee with respect to the Taxes subject to such offer shall not exceed
the amount which it would have owed if such settlement offer had been
accepted. In addition, the controlling party shall keep the noncontrolling
party reasonably informed as to the progress of the contest, and shall
provide the noncontrolling party with a copy of (or appropriate excerpts
from) any reports or claims issued by the relevant auditing agents or
taxing authority to the controlling party thereof, in connection with such
claim or the contest thereof.
Each Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 26.4(b). No Indemnitee
shall enter into any settlement or other compromise or fail to appeal an
adverse ruling with respect to any claim which is entitled to be
indemnified under this Section 26.4 (and with respect to which contest is
required under this Section 26.4(b)) without the prior written consent of
the Lessee, unless such Indemnitee waives its right to be indemnified under
this Section 26.4 with respect to such claim.
Notwithstanding anything contained herein to the contrary, an
Indemnitee will not be required to contest (and the Lessee shall not be
permitted to contest) a claim with respect to the imposition of any Tax if
such Indemnitee shall waive its right to indemnification under this Section
26.4 with respect to such claim (and any claim with respect to such year or
any other taxable year the contest of which is materially adversely
affected as a result of such waiver).
(c) Reimbursement for Tax Savings. If (x) an Indemnitee
or any Affiliate thereof actually realizes a deduction, offset, credit or
refund of any Taxes or any other savings or benefit as a result of any
indemnity paid by the Lessee pursuant to this Section 26.4 or (y) by reason
of the incurrence or imposition of any Tax (or the circumstances or event
giving rise thereto) for which an Indemnitee is indemnified hereunder or
any payment made to or for the account of such Indemnitee by the Lessee
pursuant to this Section 26.4 or any payment made by an Indemnitee to the
Lessee by reason of this Section 26.4(c), such Indemnitee at any time
actually realizes a reduction in any Taxes for which the Lessee is not
required to indemnify such Indemnitee pursuant to this Section 26.4, then
such Indemnitee shall promptly pay to the Lessee (xx) the amount of such
deduction, offset, credit, refund, or other savings or benefit together
with the amount of any interest received by such Indemnitee on account of
such deduction, offset, credit, refund or other savings or benefit or (yy)
an amount equal to such reduction in Taxes, as the case may be, in either
case together with an amount equal to any reduced Taxes payable by such
Indemnitee as a result of such payment. Each Indemnitee agrees to take such
actions as the Lessee may reasonably request (provided in the good faith
judgment of the Indemnitee, such actions would not result in a material
adverse effect on the Indemnitee for which the Indemnitee is not entitled
to indemnification from the Lessee) and to otherwise act in good faith to
claim such refunds and other available Tax benefits, and take such other
actions as may be reasonable to minimize any payment due from the Lessee
pursuant to this Section 26.4 and to maximize the amount of any Tax savings
available to it. The disallowance or reduction of any credit, refund or
other tax savings with respect to which an Indemnitee has made a payment to
the Lessee under this Section 26.4(c) shall be treated as a Tax for which
the Lessee is obligated to indemnify such Indemnitee hereunder without
regard to the exclusions set forth in the definition of Impositions.
(d) Payments. Any Imposition identifiable under this
Section 26.4 shall be paid directly when due to the applicable taxing
authority if direct payment is practicable and permitted. If direct payment
to the applicable taxing authority is not permitted or is otherwise not
made, any amount payable to an Indemnitee pursuant to Section 26.4 shall be
paid within thirty (30) days after receipt of a written demand therefor
from such Indemnitee accompanied by a written statement describing in
reasonable detail the amount so payable, but not before two Business Days
prior to the date that the relevant Taxes are due. Any payments made
pursuant to this Section 26.4 shall be made directly to the Indemnitee
entitled thereto or the Lessee, as the case may be, in immediately
available funds at such bank or to such account as specified by the payee
in written directions to the payor, or, if no such direction shall have
been given, by check of the payor payable to the order of the payee by
certified mail, postage prepaid at its address. Upon the request of any
Indemnitee with respect to a Tax that the Lessee is required to pay, the
Lessee shall furnish to such Indemnitee the original or a certified copy of
a receipt for the Lessee's payment of such Tax or such other evidence of
payment as is reasonably acceptable to such Indemnitee.
(e) Reports. In the case of any report, return or
statement required to be filed with respect to any Taxes that are subject
to indemnification under this Section 26.4 and of which the Lessee has
knowledge, the Lessee shall promptly notify the Indemnitee of such
requirement and, at the Lessee's expense (i) if the Lessee is permitted
(unless otherwise requested by the Indemnitee) by Applicable Law, timely
file such report, return or statement in its own name or (ii) if such
report, return or statement is required to be in the name of or filed by
such Indemnitee or the Indemnitee otherwise requests that such report,
return or statement for filing by such Indemnitee in such manner as shall
be satisfactory to such Indemnitee and send the same to the Indemnitee for
filing no later than fifteen (15) days prior to the due date therefor. In
any case in which the Indemnitee will file any such report, return or
statement, the Lessee shall, upon written request of such Indemnitee,
provide such Indemnitee with such information as is reasonably necessary to
allow the Indemnitee to file such report, return or statement.
(f) Verification. At the Lessee's request, the amount of
any indemnity payment by the Lessee or any payment by an Indemnitee to the
Lessee pursuant to this Section 26.4 shall be verified and certified by an
independent public accounting firm mutually acceptable to the Lessee and
the Indemnitee. The Indemnitee shall provide such independent public
accounting firm, on a confidential basis, the requisite financial
information. The costs of such verification shall be borne by the Lessee
unless such verification shall result in an adjustment in the Lessee's
favor of the lesser of (i) $10,000, and (ii) five percent of the payment as
computed by the Indemnitee, in which case such fee shall be paid by the
Indemnitee. In no event shall the Lessee have the right to review the
Indemnitee's tax returns or receive any other confidential information from
the Indemnitee in connection with such verification. Any information
provided to such accountants by any Person shall be and remain the
exclusive property of such Person and shall be deemed by the parties to be
(and the accountants will confirm in writing that they will treat such
information as) the private, proprietary and confidential property of such
Person, and no Person other than such Person and the accountants shall be
entitled thereto and all such materials shall be returned to such Person.
Such accounting firm shall be requested to make its determination within
thirty (30) days of the Lessee's request for verifications and the
computations of the accounting firm shall be final, binding and conclusive
upon the Lessee and the Indemnitee. The parties agree that the sole
responsibility of the independent public accounting firm shall be to verify
the amount of a payment pursuant to this Lease and that matters of
interpretation of this Lease are not within the scope of the independent
accounting firm's responsibilities.
(g) Tax Ownership. The Lessor represents and warrants
that it will not, prior to the termination, claim ownership of (or any tax
benefits, including depreciation, with respect to) the Leased Assets for
any income tax purposes, it being understood that the Lessee is and will
remain the owner of the Leased Assets for such income tax purposes until
the termination of this Lease. If, notwithstanding the income tax
intentions of the parties as set forth herein, the Lessor actually receives
any income tax deductions, reductions in income tax or other income tax
benefit as a result of any claim for, or recharacterization requiring such
party to take, any tax benefits attributable to ownership of the Leased
Assets for income tax purposes, the Lessor shall pay to the Lessee the
amount of such income tax savings actually realized by the Lessor (less the
amount of any anticipated increase in income tax which the Lessor
determines is currently payable as a result of such claim or
recharacterization), provided that the Lessee shall agree to reimburse the
Lessor for any subsequent increase in the Lessor's income taxes resulting
from such claim or recharacterization not taken into account in the payment
made to the Lessee, up to the amount paid to the Lessee by the Lessor. The
parties agree that this Section 26.4(g) is intended to require a payment to
the Lessee if and only if the Lessor shall have actually received an
unanticipated tax savings with respect to the Leased Assets that would not
have been received if the Lessor had advanced funds to the Lessee in the
form of a loan secured by the Leased Assets in an amount equal to the
aggregate amount of Advances made with respect to such Leased Assets.
Nothing in this Section 26.4(g) shall be construed to require the Lessor to
take any affirmative action to realize any tax savings if in its good faith
judgment such action may have a material adverse affect on the Lessor.
26.5 Funding Losses. If any payment of Base Rent or any portion of a
Lease Balance is made on any day other than the last day of an Interest
Period applicable thereto (other than as a result of the failure of the
Lessor and each Liquidity Provider to act in accordance with the provisions
of the Operative Documents), the Lessee shall reimburse the Lessor, each
Conduit and each Liquidity Provider within fifteen (15) days after demand
for any resulting loss or expense incurred by it, including (without
limitation) any loss incurred in obtaining, liquidating or employing
deposits from third parties, but excluding loss of margin for the period
after any such payment or conversion or failure to borrow or prepay,
provided that the Lessor, such Conduit and such Liquidity Provider shall
have delivered to the Lessee a certificate as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest
error, and provided, further, that such loss shall in no event exceed the
then effective Lease Rate which would have been payable for the balance of
such Interest Period. In the event that the Lessee pays any portion of the
Lease Balance allocated to one or more CP Tranches prior to the maturity
date thereof, the Lessee shall pay to the Lessor for the account of each
Conduit the interest that would have accrued on its CP Tranches at the
applicable CP Rates to such maturity dates. Any amount paid to the Lessor
pursuant to the preceding sentence shall be invested in Permitted
Investments of the type described in clause (a) of the definition thereof,
which investments shall mature as close as possible to, but not later than,
the date such CP Tranche(s) mature. All earnings on such Permitted
Investments shall be paid over to the Lessee provided that no Event of
Default has occurred and is continuing. The Lessor will, at the request of
the Lessee, furnish such additional information concerning the
determination of such loss as the Lessee may reasonably request.
26.6 Regulation D Compensation. For so long as the Equity Lender or
any Liquidity Provider is required to maintain reserves against
"Eurocurrency Liabilities" (or any other category of liabilities which
include deposits by reference to which the Base Rent is determined or any
category of extensions of credit or other assets which includes loans by a
non-United States office of any Liquidity Provider to United States
residents), and, as a result, the cost to (i) the Lessor of making or
maintaining its Advances, (ii) the Receivable Purchaser of making or
maintaining the Seller Loan or its purchases of Purchaser's Interests, or
(iii) any Liquidity Provider of making or maintaining its Loans or
Liquidity Purchases, which in each case bear interest by reference to the
Eurodollar Rate is increased, then the Lessor, on behalf of the Equity
Lender, the Receivable Purchaser or such Liquidity Provider, as the case
may be, may require the Lessee to pay, contemporaneously with each payment
of Base Rent, an additional amount at a rate per annum up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided by
(B) one minus the Eurocurrency Reserve Requirements over (ii) the
applicable Eurodollar Rate to reimburse the Equity Lender, the Receivable
Purchaser, or such Liquidity Provider to the extent any such Person is
required to maintain such reserves. In the event that the Equity Lender,
the Receivable Purchaser or a Liquidity Provider wishes to require payment
of such additional amount, the Lessor (x) shall so notify the Lessee, in
which case such additional Rent shall be payable to the Equity Lender or
such Liquidity Provider, as the case may be, at the place indicated in such
notice and (y) shall furnish to the Lessee at least five (5) Business Days
prior to each date on which Rent is payable a certificate setting forth the
amount to which it is then entitled under this Section (which shall be
consistent with its good faith estimate of the level at which the required
related reserves are maintained by it).
Each such certificate shall be accompanied by such information as the
Lessee may reasonably request as to the computation set forth therein.
26.7 Basis for Determining Eurodollar Rate Inadequate or
Unfair. If on or prior to the first day of any Interest Period:
(a) deposits in dollars (in the applicable amounts) are
not being offered to the Equity Lender or any Liquidity Provider in the
relevant market for such Interest Period, or
(b) the Lessor advises the Lessee that the Eurodollar
Rate as determined by the Liquidity Agent and/or the Equity Lender will not
adequately and fairly reflect the cost to the Equity Lender and the
Liquidity Providers of funding loans under the Equity Loan Agreement, Loans
or Liquidity Purchases, as the case may be, for such Interest Period,
the Lessor shall forthwith give notice thereof to the Lessee, whereupon
until the Lessor notifies the Lessee that the circumstances giving rise to
such suspension no longer exist, (i) the obligation of the Lessor to make
Advances based on the Eurodollar Rate shall be suspended and Advances shall
be made on the basis of the Alternate Base Rate and (ii) each outstanding
Advance shall begin to bear interest at the Alternate Base Rate on the last
day of the then current Interest Period applicable thereto.
26.8 Illegality. If, on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by the Lessor, the Equity Lender, the
Receivable Purchaser or any Liquidity Provider with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for
the Lessor, Receivable Purchaser (or any lender to either) or any Liquidity
Provider to make, maintain or fund its Advances, loans under the Equity
Loan Agreement, Loans or Liquidity Purchases, as the case may be, based on
the Eurodollar Rate and the Lessor shall so notify the Lessee, whereupon
until the Lessor notifies the Lessee that the circumstances giving rise to
such suspension no longer exist, the obligation to make Advances based on
the Eurodollar Rate shall be suspended and Advances shall be made on the
basis of the Alternate Base Rate. If such notice is given (i) the Lessee
shall be entitled, upon its request, to a reasonable explanation of the
factors underlying such notice and (ii) each Advance then outstanding shall
begin to bear interest at the Alternate Base Rate either (a) on the last
day of the then current Interest Period applicable thereto, if the Lessor
may lawfully continue to maintain and fund such Advance to such day or (b)
immediately, if the Lessor, the Equity Lender, Receivable Purchaser (or any
Affiliate of either) or any Liquidity Provider shall determine that it
may not lawfully continue to maintain and fund such Advance, loan under the
Equity Loan Agreement, Loan or Liquidity Purchase, as the case may be, to
such day.
26.9 Increased Cost and Reduced Return. (a) In the event that the
adoption of any applicable law, rule or regulation, or any change therein
or in the interpretation or application thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by the Lessor, the
Equity Lender, Receivable Purchaser or any Liquidity Provider with any
request or directive after the date hereof (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) does or shall subject the Lessor, the Equity
Lender, Receivable Purchaser or any Liquidity Provider to any
additional tax of any kind whatsoever with respect to the Operative
Documents or any Advance, loan under the Equity Loan Agreement, Loan
or Liquidity Purchase, as the case may be, made by it, or change the
basis or the applicable rate of taxation of payments to the Lessor,
the Equity Lender, Receivable Purchaser or any Liquidity Provider of
principal, interest or any other amount payable hereunder or under
any other Operative Document (except for the imposition of or change
in any tax on or measured by the overall net income of the Lessor,
the Equity Lender, Receivable Purchaser (or any Affiliate of either)
or any Liquidity Provider (other than any such tax imposed by means
of withholding));
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, insurance assessment, compulsory loan
or similar requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, the Lessor,
any office of the Equity Lender, Receivable Purchaser or any
Liquidity Provider which are not otherwise included in determination
of the rate of interest on Advances hereunder; or
(iii) does or shall impose on the Lessor, the
Equity Lender, Receivable Purchaser or any Liquidity Provider any other
condition;
and the result of any of the foregoing is to increase the cost to the
Lessor, the Equity Lender, Receivable Purchaser or any Liquidity Provider
of making or maintaining Advances, Loans or Liquidity Purchases, as the
case may be, or to reduce any amount receivable hereunder, then in any such
case, the Lessee shall promptly pay to the Lessor, the Equity Lender, the
Receivable Purchaser or any Liquidity Provider, upon demand, any additional
amounts necessary to compensate such affected Person for such increased
cost or reduced amount receivable.
(b) If the Lessor, the Equity Lender, Receivable
Purchaser or any Liquidity Provider shall have determined that, after the
date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, or if any Liquidity Provider shall have
determined that a change in the risk weighing of its Commitment is
necessary, and any of the foregoing has or would have the effect of
reducing the rate of return on capital of the Lessor, the Equity Lender,
the Receivable Purchaser or any Liquidity Provider (or any entity directly
or indirectly controlling any of such Persons) as a consequence of their
respective obligations under the Operative Documents to a level below that
which they could have achieved but for such adoption, change, request or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time, within fifteen (15) days after demand by
the Lessor on its own behalf or on behalf of the Equity Lender, the
Receivable Purchaser, or any Liquidity Provider, the Lessee shall pay to
the Lessor such additional amount or amounts as will compensate the Lessor,
the Equity Lender, the Receivable Purchaser (or any Affiliate of either)
and the Liquidity Providers (or their respective controlling entities) for
such reduction.
(c) The Lessor will promptly notify the Lessee of any
event of which it has knowledge, occurring after the date hereof, which
will require the Lessee to make payments pursuant to this Section. A
certificate of the Person claiming compensation under this Section and
setting forth in reasonable detail its computation of the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the affected Person may use any
reasonable averaging and attribution methods.
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1 Estoppel Certificates. At any time and from time to time upon
not less than twenty (20) days' prior request by the Lessor or the Lessee
(the "Requesting Party"), the other party (whichever party shall have
received such request, the "Certifying Party") shall furnish to the
Requesting Party (but in the case of the Lessor, as Certifying Party, not
more than four times per year unless required to satisfy the requirements
of any sublessees and only to the extent that the required information has
been provided to the Lessor by the Lessee) a certificate signed by an
individual having the office of vice president or higher in the Certifying
Party certifying that this Lease is in full force and effect (or that this
Lease is in full force and effect as modified and setting forth the
modifications); the dates to which the Base Rent and Supplemental Rent have
been paid; to the best knowledge of the signer of such certificate, whether
or not the Requesting Party is in default under any of its obligations
hereunder (and, if so, the nature of such alleged default); and such other
matters under this Lease as the Requesting Party may reasonably request.
Any such certificate furnished pursuant to this Article XXVII may be relied
upon by the Requesting Party, and any existing or prospective mortgagee,
purchaser or lender, and any accountant or auditor, of, from or to the
Requesting Party (or any Affiliate thereof).
ARTICLE XXVIII
ACCEPTANCE OF SURRENDER
28.1 Acceptance of Surrender. No surrender to the Lessor of this
Lease or of all or any portion of any Leased Asset 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 the Lessor, and no act by the Lessor
or any representative or agent of the Lessor, other than a written
acceptance, shall constitute an acceptance of any such surrender.
ARTICLE XXIX
NO MERGER OF TITLE
29.1 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) the fee or ground leasehold
estate in any Leased Asset, except as may expressly be stated in a written
instrument duly executed and delivered by the appropriate Person or (c) a
beneficial interest in the Lessor.
ARTICLE XXX
INTENT OF THE PARTIES
30.1 Ownership of the Properties. (a) It is the intent of the parties
hereto that: (i) this Lease constitutes an operating lease from the Lessor
to the Lessee for the purposes of the Lessee's financial reporting, (ii)
the Lease and other transactions contemplated hereby preserve ownership in
the Leased Assets in the Lessee for Federal and state income tax and
bankruptcy purposes, (iii) each Lease Supplement grants to the Lessor a
Lien on the Leased Assets covered thereby, and (iv) the obligations of the
Lessee to pay Base Rent and any part of the Lease Balance shall be treated
as payments of interest and principal, respectively, for Federal and state
income tax and bankruptcy purposes. The Lessor shall be deemed to have a
valid and binding security interest in and Lien on the Leased Assets, free
and clear of all Liens other than Permitted Liens, as security for the
obligations of the Lessee under the Operative Documents (it being
understood and agreed that the Lessee does hereby grant a security interest
in and Lien on, and convey, transfer, assign, mortgage and warrant to the
Lessor and its successors, transferees and assigns, the Leased Assets and
any proceeds or products thereof, to have and hold the same as collateral
security for the payment and performance of the obligations of the Lessee
under the Operative Documents), and each of the parties hereto agrees that
it will not, nor will it permit any Affiliate to at any time, take any
action or fail to take any action with respect to the preparation or filing
of any income tax return, including an amended income tax return, to the
extent that such action or such failure to take action would be
inconsistent with the intention of the parties expressed in this Section
30.1.
(b) Specifically, without limiting the generality of
clause (a) of the Section 30.1, the parties hereto intend and agree that in
the event of any insolvency or receivership proceedings or a petition under
the United States bankruptcy laws or any other applicable insolvency laws
or statute of the United States of America or any State or Commonwealth
thereof affecting the Lessee, the Guarantor, the Lessor, any other Person
or any collective actions, the transactions evidenced by the Operative
Documents shall be regarded as loans made by the Lessor to the Lessee.
ARTICLE XXXI
PAYMENT OF CERTAIN EXPENSES
31.1 Transaction Expenses. (a) The Lessee shall pay, or cause to be
paid, from time to time all Transaction Expenses in respect of the
transactions taking place on the Closing Date and on each Funding Date on
such respective date; provided, however, that, if the Lessee has not
received written invoices therefor five (5) days prior to such date, such
Transaction Expenses shall be paid on the earlier of (i) the next Funding
Date and (ii) the date thirty-five (35) days after the Lessee has received
written invoices therefor.
(b) The Lessee shall pay or cause to be paid (i) the
reasonable fees and expenses of the Paying Agent or any successor Paying
Agent, (ii) all reasonable Transaction Expenses from time to time incurred
by the Lessor in entering into any future amendments or supplements with
respect to any of the Operative Documents, whether or not such amendments
or supplements are ultimately entered into, or giving or withholding of
waivers of consents hereto or thereto, in each case which have been
requested by or approved by the Lessee, (iii) all reasonable Transaction
Expenses incurred by the Lessor in connection with any purchase of any
Leased Asset by the Lessee or other Person pursuant to this Lease and (iv)
all Transaction Expenses incurred by the Lessor, the Receivable Purchaser,
the Collateral Agent, the Conduits, the Liquidity Agent and the Liquidity
Providers in respect of enforcement of any of their rights or remedies
against the Lessee or the Guarantor in respect of the Operative Documents.
31.2 Brokers' Fees and Stamp Taxes. The Lessee shall pay or cause to
be paid any brokers' fees and any and all stamp, transfer and other similar
taxes, fees and excises, if any, including any interest and penalties,
which are payable in connection with the transactions contemplated by this
Lease and the other Operative Documents. The Lessor and the Lessee each
represent to the other that it has not employed any brokers in connection
with the transactions contemplated by the Operative Documents.
ARTICLE XXXII
OTHER COVENANTS AND AGREEMENTS OF LESSEE
32.1 Information. The Lessee will deliver to the Lessor:
(a) within five (5) days after a Responsible Employee of
the Lessee or any Affiliate of the Lessee obtains knowledge of the
occurrence of each Event of Default or each event that, with the giving of
notice or time elapse, or both, would constitute an Event of Default
continuing on the date of such statement, a statement of the authorized
officer setting forth details of such Event of Default or event and the
action that the Lessee proposes to take with respect thereto;
(b) within five (5) days of any change of the Guarantor's
or the Lessee's independent public accountants, notification thereof;
(c) promptly upon becoming aware thereof, written notice
of any material adverse change in the business, financial position or
results of operations of the Guarantor and its Subsidiaries, considered as
a whole;
(d) as soon as possible and in any event within five (5)
days after knowledge of (or such time as a Responsible Employee of Lessee
or any Affiliate of the Lessee reasonably should have had knowledge of) the
occurrence of any material violation or alleged violation of an
Environmental Law relating to any Property, a statement of an authorized
officer setting forth the details of such violation and the action which
the Lessee proposes to take with respect thereto;
(e) from time to time such additional information
regarding the business, properties, condition or operations, financial or
otherwise, of the Guarantor and its Significant Subsidiaries, or regarding
the Leased Assets or the status of any construction thereon, as the Lessor
may reasonably request;
(f) not later than five (5) Business Days after request,
copies of all amendments to and waivers of the Credit Agreement requested
by the Guarantor; and
(g) not later than five (5) Business days after delivery,
copies of all amendments to and waivers of the Credit Agreement.
32.2 Financial Statements.
(a) The Lessee will furnish or cause to be furnished to
the Lessor and each Liquidity Provider, as and when required by Section
5.01(a)-(d) of the Credit Agreement, all the reports, schedules,
certificates and statements required of the Guarantor and its Subsidiaries
to be delivered pursuant to Section 5.01(a)-(d) of the Credit Agreement;
provided, however, that the Lessee shall not be required to furnish any
such document to any such Person pursuant to this Lease if such Person or
its Affiliate is a party to the Credit Agreement and receives such document
pursuant to the terms thereof.
(b) The Lessee will furnish to the Lessor and each
Liquidity Provider, not later than ninety (90) days after the end of each
of its fiscal years, unaudited financial statements of the Lessee, together
with a Responsible Employee Certificate of the Lessee certifying that, to
the best knowledge of such Responsible Employee, no Default or Event of
Default has occurred and is continuing or, if a Default or Event of Default
has occurred and is continuing, the nature thereof and the action the
Lessee is taking with respect thereto.
32.3 Other Covenants. If any covenants are set forth in any Lease
Supplement, then the Lessee will observe and perform such covenants
according to the terms thereof with the same force and effect as if set
forth in full
herein.
ARTICLE XXXIII
MISCELLANEOUS
33.1 Survival; Severability; Etc. If any term or provision of this
Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application of
such term or provision shall not be affected thereby. If any right or
option of the Lessee provided in this Lease would, in the absence of the
limitation imposed by this sentence, be invalid or unenforceable as being
in violation of the rule against perpetuities or any other rule of law
relating to the vesting of an interest in or the suspension of the power of
alienation of property, then such right or option shall be exercisable only
during the period which shall end twenty-one (21) years after the date of
death of the last survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the
former President of the United States, and Xxxx X. Xxxxxxxxxxx, the founder
of the Standard Oil Company, known to be alive on the date of the
execution, acknowledgement and delivery of this Lease.
33.2 Amendments and Modifications. Neither this Lease nor any
provision hereof may be amended, waived, discharged or terminated except by
an instrument in writing signed by the Lessor and the Lessee.
33.3 No Waiver. No failure by the Lessor or the 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.
33.4 Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing (including by
facsimile), and directed to the address of the appropriate party as set
forth in Schedule I hereto.
33.5 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.
33.6 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.
33.7 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 and the same instrument.
33.8 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES, EXCEPT AS TO MATTERS
RELATING TO THE CREATION OF THE LEASEHOLD ESTATES HEREUNDER WITH RESPECT TO
ANY PROPERTY (AS DEFINED IN THIS LEASE) AND THE EXERCISE OF RIGHTS AND
REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE WHERE SUCH PROPERTY IS LOCATED.
WITHOUT LIMITING THE FOREGOING, IN THE EVENT THAT THIS LEASE IS DEEMED TO
CONSTITUTE A FINANCING, WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
SHALL GOVERN THE CREATION, TERMS AND PROVISIONS OF THE INDEBTEDNESS
EVIDENCED HEREBY, BUT THE LIEN CREATED HEREBY AND THE CREATION AND THE
ENFORCEMENT OF SAID LIEN WITH RESPECT TO ANY PROPERTY (AS DEFINED IN THIS
LEASE) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE WHERE SUCH PROPERTY IS LOCATED.
33.9 Original Lease. The single executed original of this Lease
containing the receipt of the Lessor therefor on or following the signature
page thereof shall be the Original Executed Counterpart of this Lease (the
"Original Executed Counterpart"). To the extent that this Lease 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
may be created through the transfer or possession of any counterpart other
than the Original Executed Counterpart.
33.10 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER,
OR IN CONNECTION WITH, THIS LEASE AND/OR ANY OF THE OTHER OPERATIVE
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF SUCH PARTIES. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THEY
HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE
LEASE AND EACH SUCH OTHER OPERATIVE DOCUMENTS.
33.11 TRUTH IN LEASING REQUIREMENT IN COMPLIANCE WITH FEDERAL
AVIATION REGULATION ss.91.23. THE LESSEE HEREBY ADVISES THE LESSOR THAT
FROM THE DATE OF ITS MANUFACTURE TO THE DATE OF THIS LEASE, THE AIRCRAFT
LEASED UNDER THIS LEASE HAS BEEN MAINTAINED AND INSPECTED IN ACCORDANCE
WITH ss.91.409(f)(3) OF THE FEDERAL AVIATION REGULATIONS.
THE LESSEE CERTIFIES THAT IT IS RESPONSIBLE FOR THE STATUS OF
COMPLIANCE OF THE AIRCRAFT WITH APPLICABLE MAINTENANCE AND INSPECTION
REQUIREMENTS AS SET FORTH UNDER FAA REGULATIONS APPLICABLE TO THE LESSEE'S
USE AND OPERATION OF THE AIRCRAFT. IN ADDITION, UPON THE LESSOR'S REQUEST,
THE LESSEE AGREES TO ADVISE THE LESSOR WHICH OF THE REQUIRED FAA
MAINTENANCE PROGRAMS THE LESSEE HAS SELECTED AND AGREES TO PROVIDE THE
LESSOR WITH WRITTEN INSPECTION REPORTS FOR INSPECTIONS ACCOMPLISHED UNDER
SAID PROGRAM.
THE LESSEE IS SOLELY RESPONSIBLE FOR OPERATIONAL CONTROL OF THE
AIRCRAFT UNDER THIS LEASE AND CERTIFIES AND AGREES TO COMPLY WITH ALL
APPLICABLE FAA REGULATIONS ISSUED DURING THE TERM OF THIS LEASE. THE LESSEE
IS HEREBY ADVISED THAT AN EXPLANATION OF FACTORS BEARING ON OPERATIONAL
CONTROL AND PERTINENT FAA REGULATIONS CAN BE OBTAINED FROM THE NEAREST FAA
FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT OFFICE OR AIR
CARRIER DISTRICT OFFICE.
THE LESSEE AGREES TO KEEP A COPY OF THIS LEASE IN THE AIRCRAFT AT ALL
TIMES DURING THE TERM OF THIS LEASE.
THE LESSEE AGREES TO COMPLY WITH ALL REQUIREMENTS OF
FEDERAL AVIATION REGULATION ss. 91.23.
IN WITNESS WHEREOF, the parties have caused this Lease be duly
executed and delivered as of the date first above written.
RITE AID REALTY CORP.,
as Lessee
By: ___________________________________
Name:
Title:
RAC LEASING LLC, as Lessor
By: The Diversified Group Incorporated,
as manager
By: _______________________________
Name:
Title:
