EXHIBIT 10.36
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LEASE AGREEMENT
Dated as of June 29, 1998
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the USF Real Estate Trust 1998-1,
as Lessor
and
JP FOODSERVICE DISTRIBUTORS, INC.,
as Lessee
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent") under a Security Agreement dated as of June 29, 1998
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between First Security Bank, National Association, not individually, but solely
as the Owner Trustee under the USF Real Estate Trust 1998-1 and the Agent, as
amended, modified, extended, supplemented, restated and/or replaced from time to
time in accordance with the applicable provisions thereof. This Lease Agreement
has been executed in several counterparts. To the extent, if any, that this
Lease Agreement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no
security interest in this Lease Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I.............................................................. 1
1.1 Definitions................................................... 1
1.2 Interpretation................................................ 2
ARTICLE II............................................................. 2
2.1 Property...................................................... 2
2.2 Lease Term.................................................... 2
2.3 Title......................................................... 3
2.4 Lease Supplements............................................. 3
ARTICLE III............................................................ 3
3.1 Rent.......................................................... 3
3.2 Payment of Basic Rent......................................... 4
3.3 Supplemental Rent............................................. 4
3.4 Performance on a Non-Business Day............................. 4
3.5 Rent Payment Provisions....................................... 4
ARTICLE IV............................................................. 5
4.1 Taxes; Utility Charges........................................ 5
ARTICLE V.............................................................. 5
5.1 Quiet Enjoyment............................................... 5
ARTICLE VI............................................................. 5
6.1 Net Lease..................................................... 5
6.2 No Termination or Abatement................................... 6
ARTICLE VII............................................................ 7
7.1 Ownership of the Properties................................... 7
ARTICLE VIII........................................................... 8
8.1 Condition of the Properties................................... 8
8.2 Possession and Use of the Properties.......................... 9
8.3 Integrated Properties.........................................10
ARTICLE IX.............................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements
and Manufacturer's Specifications and Standards...................10
ARTICLE X..............................................................11
10.1 Maintenance and Repair; Return...............................11
10.2 Environmental Inspection.....................................12
ARTICLE XI.............................................................12
11.1 Modifications................................................12
ARTICLE XII............................................................13
12.1 Warranty of Title............................................13
ARTICLE XIII...........................................................14
13.1 Permitted Contests Other Than in Respect of Indemnities......14
13.2 Impositions, Utility Charges, Other Matters; Compliance with
Legal Requirements................................................15
ARTICLE XIV............................................................15
14.1 Public Liability and Workers' Compensation Insurance.........15
14.2 Permanent Hazard and Other Insurance.........................15
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14.3 Coverage.....................................................16
ARTICLE XV.............................................................17
15.1 Casualty and Condemnation....................................17
15.2 Environmental Matters........................................19
15.3 Notice of Environmental Matters..............................20
ARTICLE XVI............................................................20
16.1 Termination Upon Certain Events..............................20
16.2 Procedures...................................................20
ARTICLE XVII...........................................................21
17.1 Lease Events of Default......................................21
17.2 Surrender of Possession......................................24
17.3 Reletting....................................................24
17.4 Damages......................................................25
17.5 Power of Sale................................................25
17.6 Final Liquidated Damages.....................................26
17.7 Environmental Costs..........................................26
17.8 Waiver of Certain Rights.....................................26
17.9 Assignment of Rights Under Contracts.........................27
17.10 Remedies Cumulative.........................................27
ARTICLE XVIII..........................................................27
18.1 Lessor's Right to Cure Lessee's Lease Defaults...............27
ARTICLE XIX............................................................28
19.1 Provisions Relating to Lessee's Exercise of its Purchase
Option............................................................28
19.2 No Purchase or Termination With Respect to Less than All of
a Property........................................................28
ARTICLE XX.............................................................28
20.1 Purchase Option, Sale Option, Extension Option - General
Provisions........................................................28
20.2 Lessee Purchase Option.......................................29
20.3 Third Party Sale Option......................................30
ARTICLE XXI............................................................31
21.1 [Intentionally Omitted]......................................31
ARTICLE XXII...........................................................31
22.1 Sale Procedure...............................................31
22.2 Application of Proceeds of Sale..............................34
22.3 Indemnity for Excessive Wear.................................34
22.4 Appraisal Procedure..........................................34
22.5 Certain Obligations Continue................................35
ARTICLE XXIII..........................................................35
23.1 Holding Over.................................................35
ARTICLE XXIV...........................................................36
24.1 Risk of Loss.................................................36
ARTICLE XXV............................................................36
25.1 Assignment...................................................36
25.2 Subleases....................................................36
ARTICLE XXVI...........................................................37
26.1 No Waiver....................................................37
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ARTICLE XXVII..........................................................37
27.1 Acceptance of Surrender......................................37
27.2 No Merger of Title...........................................37
ARTICLE XXVIII.........................................................37
28.1 Incorporation of Covenants...................................37
ARTICLE XXIX...........................................................38
29.1 Notices......................................................38
ARTICLE XXX............................................................39
30.1 Miscellaneous................................................39
30.2 Amendments and Modifications.................................39
30.3 Successors and Assigns.......................................39
30.4 Headings and Table of Contents...............................39
30.5 Counterparts.................................................39
30.6 GOVERNING LAW................................................39
30.7 Calculation of Rent..........................................39
30.8 Memoranda of Lease and Lease Supplements.....................40
30.9 Allocations between the Lenders and the Holders..............40
30.10 Limitations on Recourse.....................................40
30.11 WAIVERS OF JURY TRIAL.......................................40
30.12 Exercise of Lessor Rights...................................40
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION..............41
30.14 USURY SAVINGS PROVISION.....................................41
EXHIBITS
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EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
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THIS LEASE AGREEMENT dated as of June 29, 1998 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
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banking association, having its principal office at 00 Xxxxx Xxxx Xxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000, not individually, but solely as the Owner Trustee under
the USF Real Estate Trust 1998-1, as lessor (the "Lessor"), and JP FOODSERVICE
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DISTRIBUTORS, INC., a Delaware corporation, having its principal place of
business at 0000 Xxxxxxxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx, as lessee (the
"Lessee").
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W I T N E S S E T H:
- - - - - - - - - -
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon
the Property Closing Date with respect thereto; provided, Basic Rent with
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respect thereto shall not be payable until the applicable Rent Commencement
Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
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For purposes of this Lease, capitalized terms used in this Lease and not
otherwise defined herein shall have the meanings assigned to them in Appendix A
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to that certain Participation Agreement dated as of June 29, 1998 (as amended,
modified, extended, supplemented, restated and/or replaced from time to time in
accordance with the applicable provisions thereof, the "Participation
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Agreement") among Lessee, the various parties thereto from time to time, as the
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Guarantors, Lessor, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National
Bank, as agent for the Lenders and respecting the Security Documents, as the
agent for the Lenders and the Holders, to the extent of their interests. Unless
otherwise indicated, references in this Lease to articles, sections, paragraphs,
clauses, appendices, schedules and exhibits are to the same contained in this
Lease.
1.2 INTERPRETATION.
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The rules of usage set forth in Appendix A to the Participation Agreement
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shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
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Subject to the terms and conditions hereinafter set forth and contained in
the respective Lease Supplement relating to each Property, Lessor hereby leases
to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
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The term of this Lease with respect to each Property (the "Term") shall
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begin upon the Property Closing Date for such Property (in each case the
"Commencement Date") and shall end on the fifth annual anniversary of the
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Initial Closing Date, unless the Term is earlier terminated or extended pursuant
to the next paragraph. Notwithstanding the foregoing, Lessee shall not be
obligated to pay Basic Rent until the Rent Commencement Date with respect to
such Property.
Lessee may, not less than sixty (60) days and no more than two hundred
forty (240) days prior to the Expiration Date, by irrevocable notice to Lessor,
the Lenders, the Holders and the Agent make written request to extend the
Expiration Date for all, but not less than all, the Properties for an additional
period of one year. Lessor, each Lender, each Holder and the Agent shall each
make a determination, in the absolute and sole discretion of each such party,
not later than thirty (30) days prior to the Expiration Date as to whether or
not such party will agree to extend the Expiration Date as requested; provided,
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however, that failure by any such party to make a timely response to Lessee's
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request for extension of the Expiration Date shall be deemed to constitute a
refusal by such party to extension of the Expiration Date. In response to a
request for an extension of the Expiration Date, if (a) Lessor, each Lender,
each Holder and the Agent shall agree to the requested extension, then the Term
shall be extended and shall expire on the date one (1) year after the then
current Expiration Date or (b) Lessor, any Lender, any Holder or the Agent shall
refuse (or be deemed to have refused) to agree to the requested extension, then
the Term shall not be extended and shall expire on the then current Expiration
Date.
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2.3 TITLE.
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Except for Lessor's representations and warranties that each Property is
free of Lessor Liens, each Property is leased to Lessee without any
representation or warranty, express or implied, by Lessor and subject to the
rights of parties in possession (if any), the existing state of title (including
without limitation the Permitted Liens) and all applicable Legal Requirements.
Lessee shall in no event have any recourse against Lessor for any defect in
Lessor's title to any Property or any interest of Lessee therein other than for
Lessor Liens.
2.4 LEASE SUPPLEMENTS.
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On or prior to each Commencement Date, Lessee and Lessor shall each execute
and deliver a Lease Supplement for the Property to be leased effective as of
such Commencement Date in substantially the form of EXHIBIT A HERETO.
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ARTICLE III
3.1 RENT.
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(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect to
any or all Properties during the Term; provided, however, with respect to
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each individual Property Lessee shall have no obligation to pay Basic Rent
with respect to such Property until the Rent Commencement Date with respect
to such Property (notwithstanding that Basic Rent for such Property shall
accrue from and including the Scheduled Interest Payment Date immediately
preceding such Rent Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of
the United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable grace
period) to such account or accounts at such bank or banks as Lessor shall
from time to time direct.
(c) Lessee's inability or failure to take possession of all
or any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of the Construction Agent, Lessee or
any other Person other than Lessor or for any other reason whatsoever,
shall not delay or otherwise affect Lessee's obligation to pay Rent for
such Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00 Noon,
Charlotte, North Carolina time, on the applicable date for payment of such
amount.
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3.2 PAYMENT OF BASIC RENT.
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Basic Rent shall be paid absolutely net to Lessor or its designee, so that
this Lease shall yield to Lessor the full amount thereof, without setoff,
deduction or reduction.
3.3 SUPPLEMENTAL RENT.
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Lessee shall pay to the Person entitled thereto any and all Supplemental
Rent when and as the same shall become due and payable, and if Lessee fails to
pay any Supplemental Rent within three (3) days after the same is due, Lessor
shall have all rights, powers and remedies provided for herein or by law or
equity or otherwise in the case of nonpayment of Basic Rent. All such payments
of Supplemental Rent shall be in the full amount thereof, without setoff,
deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by Lessee to the Agent,
any Lender, any Holder or any other Person, (b) interest at the applicable
Overdue Rate on any installment of Basic Rent not paid when due (subject to the
applicable grace period) for the period for which the same shall be overdue and
on any payment of Supplemental Rent not paid when due or demanded by the
appropriate Person (subject to any applicable grace period) for the period from
the due date or the date of any such demand, as the case may be, until the same
shall be paid and (c) amounts referenced as Supplemental Rent obligations
pursuant to Section 8.3 of the Participation Agreement. It shall be an
additional Supplemental Rent obligation of Lessee to pay to the appropriate
Person all rent and other amounts when such become due and owing from time to
time under each Ground Lease and without the necessity of any notice from Lessor
with regard thereto. The expiration or other termination of Lessee's
obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of Lessee with respect to Supplemental Rent. Unless expressly
provided otherwise in this Lease, in the event of any failure on the part of
Lessee to pay and discharge any Supplemental Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such Supplemental Rent, all
of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
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If any Basic Rent is required hereunder on a day that is not a Business
Day, then such Basic Rent shall be due on the corresponding Scheduled Interest
Payment Date. If any Supplemental Rent is required hereunder on a day that is
not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
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Lessee shall make payment of all Basic Rent and Supplemental Rent when due
(subject to the applicable grace periods) regardless of whether any of the
Operative Agreements pursuant to which same is calculated and is owing shall
have been rejected, avoided or disavowed in any bankruptcy or insolvency
proceeding involving any of the parties to any of the
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Operative Agreements. Such provisions of such Operative Agreements and their
related definitions are incorporated herein by reference and shall survive any
termination, amendment or rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
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Lessee shall pay or cause to be paid all Impositions with respect
to the Properties and/or the use, occupancy, operation, repair, access,
maintenance or operation thereof and all charges for electricity, power, gas,
oil, water, telephone, sanitary sewer service and all other rents, utilities and
operating expenses of any kind or type used in or on any Property during the
Term. Upon Lessor's request, Lessee shall provide from time to time Lessor with
evidence of all such payments referenced in the foregoing sentence. Lessee shall
be entitled to receive any credit or refund with respect to any Imposition or
utility charge paid by Lessee. Unless an Event of Default shall have occurred
and be continuing, the amount of any credit or refund received by Lessor on
account of any Imposition or utility charge paid by Lessee, net of the
reasonable costs and expenses incurred by Lessor in obtaining such credit or
refund, shall be promptly paid over to Lessee. All charges for Impositions or
utilities imposed with respect to any Property for a period during which this
Lease expires or terminates shall be adjusted and prorated on a daily basis
between Lessor and Lessee, and each party shall pay or reimburse the other for
such party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT.
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Subject to the rights of Lessor contained in Sections 17.2, 17.3
and 20.3 and the other terms of this Lease and the other Operative Agreements
and so long as no Event of Default shall have occurred and be continuing, Lessee
shall peaceably and quietly have, hold and enjoy each Property for the
applicable Term, free of any claim or other action by Lessor or anyone
rightfully claiming by, through or under Lessor (other than Lessee) with respect
to any matters arising from and after the applicable Commencement Date.
ARTICLE VI
6.1 NET LEASE.
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This Lease shall constitute a net lease, and the obligations of
Lessee hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of each Property.
Any present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement,
5
suspension, deferment,reduction, setoff, counterclaim, or defense with respect
to the Rent, nor shall the obligations of Lessee hereunder be affected (except
as expressly herein permitted and by performance of the obligations in
connection therewith) for any reason whatsoever, including without limitation by
reason of: (a) any damage to or destruction of any Property or any part thereof;
(b) any taking of any Property or any part thereof or interest therein by
Condemnation or otherwise; (c) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of any Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (d) any title defect, Lien or any matter affecting
title to any Property; (e) any eviction by paramount title or otherwise; (f) any
default by Lessor hereunder; (g) any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding relating to or
affecting the Agent, any Lender, Lessor, Lessee, any Holder or any Governmental
Authority; (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental Authority or any other Person; (j)
Lessee's acquisition of ownership of all or part of any Property; (k) breach of
any warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of Lessee hereunder shall be covenants, agreements and obligations
that are separate and independent from any obligations of Lessor hereunder and
shall continue unaffected unless such covenants, agreements and obligations
shall have been modified or terminated in accordance with an express provision
of this Lease. Lessor and Lessee acknowledge and agree that the provisions of
this Section 6.1 have been specifically reviewed and subject to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
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Lessee shall remain obligated under this Lease in accordance with its terms
and shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be
bound by all of the terms and conditions contained in this Lease.
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ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
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(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting Standards
No. 13, as amended, (B) Lessor will be treated as the owner and lessor of
each Property and (C) Lessee will be treated as the lessee of each
Property, but (ii) for federal and all state and local income tax purposes,
bankruptcy purposes and bank regulatory purposes (A) this Lease will be
treated as a financing arrangement and (B) Lessee will be treated as the
owner of the Properties and will be entitled to all tax benefits ordinarily
available to owners of property similar to the Properties for such tax
purposes. Notwithstanding the foregoing, neither party hereto has made, or
shall be deemed to have made, any representation or warranty as to the
availability of any of the foregoing treatments under applicable accounting
rules, tax, bankruptcy, regulatory, commercial or real estate law or under
any other set of rules. Lessee shall claim the cost recovery deductions
associated with each Property, and Lessor shall not, to the extent not
prohibited by Law, take on its tax return a position inconsistent with
Lessee's claim of such deductions.
(b) For all purposes other than as set forth in
Section 7.1(a)(i), Lessor and Lessee intend this Lease to constitute a
finance lease and not a true lease. In order to secure the obligations of
Lessee now existing or hereafter arising under any and all Operative
Agreements, Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of all
Financing Parties, a first priority security interest (but subject to the
security interest in the assets granted by Lessee in favor of the Agent in
accordance with the Security Documents) in and lien on all right, title and
interest of Lessee (now owned or hereafter acquired) in and to all
Properties, to the extent such is personal property and irrevocably grants
and conveys a lien, deed of trust and mortgage on all right, title and
interest of Lessee (now owned or hereafter acquired) in and to all
Properties to the extent such is real property. Lessor and Lessee further
intend and agree that, for the purpose of securing the obligations of
Lessee and/or the Construction Agent now existing or hereafter arising
under the Operative Agreements, (i) this Lease shall be a security
agreement and financing statement within the meaning of Article 9 of the
Uniform Commercial Code respecting each of the Properties and all proceeds
(including without limitation insurance proceeds thereof) to the extent
such is personal property and an irrevocable grant and conveyance of a
lien, deed of trust and mortgage on each of the Properties and all proceeds
(including without limitation insurance proceeds thereof) to the extent
such is real property; (ii) the acquisition of title (or to the extent
applicable, a leasehold interest pursuant to a Ground Lease) in each
Property referenced in Article II constitutes a grant by Lessee to Lessor
of a security interest, lien, deed of trust and mortgage in all of Lessee's
right, title and interest in and to each Property and all proceeds
(including without limitation insurance proceeds thereof) of the
conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments,
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securities or other property, and an assignment of all rents, profits and
income produced by each Property; and (iii) notifications to Persons
holding such property, and acknowledgments, receipts or confirmations from
financial intermediaries, bankers or agents (as applicable) of Lessee shall
be deemed to have been given for the purpose of perfecting such lien,
security interest, mortgage lien and deed of trust under applicable law.
Lessee shall promptly take such actions as Lessor may reasonably request
(including without limitation the filing of Uniform Commercial Code
Financing Statements, Uniform Commercial Code Fixture Filings and memoranda
(or short forms) of this Lease and the various Lease Supplements) to ensure
that the lien, security interest, lien, mortgage lien and deed of trust in
each Property and the other items referenced above will be deemed to be a
perfected lien, security interest, mortgage lien and deed of trust of first
priority under applicable law and will be maintained as such throughout the
Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
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LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY
"AS-IS, WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR
OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING STATE OF TITLE,
(B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY), (C) ANY STATE OF
FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW,
(D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF LEGAL REQUIREMENTS
WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE APPLICABLE LEASE
SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER HAS MADE
OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE AND CLEAR
OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE
TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY
OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY LEGAL REQUIREMENT. LESSEE HAS OR PRIOR TO THE BASIC TERM COMMENCEMENT
DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH PROPERTY AND THE
IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT, EACH
LENDER AND EACH HOLDER ARE
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CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO
THIS LEASE SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL
RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN
LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE (1) HAND, AND LESSEE,
ON THE OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
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(a) At all times during the Term with respect to each Property,
such Property shall be a Permitted Facility and shall be used by Lessee in
the ordinary course of its business. Lessee shall pay, or cause to be paid,
all charges and costs required in connection with the use of the Properties
as contemplated by this Lease. Lessee shall not commit or permit any waste
of the Properties or any part thereof.
(b) The principal place of business and chief executive office of
Lessee (as such terms are used in Section 9-103(3) of the Uniform
Commercial Code of any applicable jurisdiction) is 9830 Patuxent Xxxxx
Drive, Columbia, Maryland, and Lessee will provide Lessor with prior
written notice of any change of location of its principal place of business
or chief executive office. Regarding a particular Property, each Lease
Supplement correctly identifies the initial location of the related
Equipment (if any) and Improvements (if any) and contains an accurate legal
description for the related parcel of Land or a copy of the Ground Lease
(if any). The Equipment and Improvements respecting each particular
Property will be located only at the location identified in the applicable
Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment to
or in any other item of equipment or personal property or to or in any real
property in a manner that could give rise to the assertion of any Lien by a
third party on such item of Equipment by reason of such attachment, or the
assertion of a claim that such item of Equipment has become a fixture and
is subject to a Lien in favor of a third party, that is prior to the Liens
thereon created by the Operative Agreements.
(d) On the Commencement Date for each Property, Lessor and Lessee
shall execute a Lease Supplement in regard to such Property which shall
contain an Equipment Schedule that has a general description of the
Equipment which shall comprise the Property, an Improvement Schedule that
has a general description of the Improvements which shall comprise the
Property and a legal description of the Land to be leased hereunder (or, in
the case of any Property subject to a Ground Lease, to be subleased
hereunder) as of such date. Each Property subject to a Ground Lease shall
be deemed to be ground subleased from Lessor to Lessee as of the
Commencement Date, and such ground sublease shall be in effect until this
Lease is terminated or expires, in each case in accordance with the terms
and provisions hereof. Lessee shall satisfy and perform all obligations
imposed on Lessor under each Ground Lease. Simultaneously with the
execution and delivery of each Lease Supplement, such Equipment,
Improvements, Land,
9
ground subleasehold interest, all additional Equipment and all additional
Improvements which are financed under the Operative Agreements after the
Commencement Date and the remainder of such Property shall be deemed to
have been accepted by Lessee for all purposes of this Lease and to be
subject to this Lease.
(e) At all times during the Term with respect to each Property, Lessee
will comply with all obligations under and (to the extent no Event of
Default exists and provided that such exercise will not impair the value,
utility or remaining useful life of such Property) shall be permitted to
exercise all rights and remedies under, all operation and easement
agreements and related or similar agreements applicable to such Property.
8.3 INTEGRATED PROPERTIES.
---------------------
On the Rent Commencement Date for each Property, Lessee shall, at
its sole cost and expense, cause such Property and the applicable property
subject to a Ground Lease to constitute (and for the duration of the Term shall
continue to constitute) all of the equipment, facilities, rights, other personal
property and other real property necessary or appropriate to operate, utilize,
maintain and control a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
--------------------------------------------------------------
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
-------------------------------------------
Subject to the terms of Article XIII relating to permitted
contests, Lessee, at its sole cost and expense, shall (a) comply with all
applicable Legal Requirements (including without limitation all Environmental
Laws) and all Insurance Requirements relating to the Properties, (b) procure,
maintain and comply with all licenses, permits, orders, approvals, consents and
other authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Properties, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property unless the
failure to procure, maintain and comply with such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not and could
not reasonably be expected to have a Material Adverse Effect. Lessor agrees to
take such actions as may be reasonably requested by Lessee in connection with
the compliance by Lessee of its obligations under this Section 9.1.
10
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
------------------------------
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally delivered
to Lessor and make all necessary repairs thereto and replacements thereof,
of every kind and nature whatsoever, whether interior or exterior, ordinary
or extraordinary, structural or nonstructural or foreseen or unforeseen, in
each case as required by Section 9.1 and on a basis consistent with the
operation and maintenance of properties or equipment comparable in type and
function to the applicable Property, such that such Property is capable of
being immediately utilized by a third party and in compliance with standard
industry practice subject, however, to the provisions of Article XV with
respect to Casualty and Condemnation.
(b) Lessee shall not use or locate any component of any Property
outside of the Approved State therefor. Lessee shall not move or relocate
any component of any Property beyond the boundaries of the Land (comprising
part of such Property) described in the applicable Lease Supplement, except
for the temporary removal of Equipment and other personal property for
repair or replacement.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered unfit
for use, Lessee, at its own expense, will within a reasonable time replace
such component with a replacement component which is free and clear of all
Liens (other than Permitted Liens and Lessor Liens) and has a value,
utility and useful life at least equal to the component replaced (assuming
the component replaced had been maintained and repaired in accordance with
the requirements of this Lease). All components which are added to any
Property shall immediately become the property of (and title thereto shall
vest in) Lessor and shall be deemed incorporated in such Property and
subject to the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents shall
have the right to inspect each Property and all maintenance records with
respect thereto at any reasonable time during normal business hours but
shall not, in the absence of an Event of Default, materially disrupt the
business of Lessee.
(e) If, at any time, the aggregate appraised value of Properties
then subject to this Lease for which the Agent has received an Appraisal
pursuant to the terms of Section 5.3 of the Participation Agreement is less
than the lesser of (i) $12,000,000 or (ii) the aggregate Property Cost at
such time (the "Base Amount"), then Lessee will cause an additional
Appraisal or Appraisals to be immediately delivered to Lessor in an amount
sufficient to cause such aggregate appraised value to equal or exceed the
Base Amount. In addition, Lessee shall cause to be delivered to Lessor (at
Lessee's sole expense) one (1) or more additional Appraisals (or
reappraisals of Property) as Lessor may request if
11
any one (1) of Lessor, the Agent, the Trust Company, any Lender or any
Holder is required pursuant to any applicable Legal Requirement to obtain
such Appraisals (or reappraisals) and upon the occurrence of any Event of
Default.
(f) Lessor shall under no circumstances be required to build any
improvements or install any equipment on any Property, make any repairs,
replacements, alterations or renewals of any nature or description to any
Property, make any expenditure whatsoever in connection with this Lease or
maintain any Property in any way. Lessor shall not be required to
maintain, repair or rebuild all or any part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or rebuild all
or any part of any Property, or (ii) make repairs at the expense of Lessor
pursuant to any Legal Requirement, Insurance Requirement, contract,
agreement, covenant, condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination of
this Lease with respect to a Property, if Lessee shall not have exercised
its Purchase Option with respect to such Property and purchased such
Property, surrender such Property (i) to Lessor pursuant to the exercise of
the applicable remedies upon the occurrence of a Lease Event of Default or
(ii) pursuant to the second paragraph of Section 22.1(a) hereof, to Lessor
or the third party purchaser, as the case may be, subject to Lessee's
obligations under this Lease (including without limitation the obligations
of Lessee at the time of such surrender under Sections 9.1, 10.1(a) through
(f), 10.2, 11.1, 12.1, 22.1 and 23.1).
10.2 ENVIRONMENTAL INSPECTION.
------------------------
If Lessee has not given notice of exercise of its Purchase Option
on the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee
does not purchase a Property in accordance with the terms of this Lease, then
not more than one hundred twenty (120) days nor less than sixty (60) days prior
to the Expiration Date, Lessee at its expense shall cause to be delivered to
Lessor a Phase I environmental site assessment recently prepared (no more than
thirty (30) days prior to the date of delivery) by an independent recognized
professional reasonably acceptable to Lessor, prepared in accordance with
standard industry practice and reasonably satisfactory to Lessor.
ARTICLE XI
11.1 MODIFICATIONS.
-------------
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor, may make modifications,
alterations, renovations, improvements and additions to any Property or any
part thereof and substitutions and replacements therefor (collectively,
"Modifications"), and Lessee shall make any and all Modifications required
to be made pursuant to all Legal Requirements, Insurance Requirements and
manufacturer's specifications and standards; provided, that: (i) no
12
Modification shall materially impair the value or utility of any Property
from that which existed immediately prior to such Modification; (ii) each
Modification shall be done expeditiously and in a good and workmanlike
manner; (iii) no Modification shall adversely affect the structural
integrity of any Property; (iv) to the extent required by Section 14.2(a),
Lessee shall maintain builders' risk insurance at all times when a
Modification is in progress; (v) subject to the terms of Article XIII
relating to permitted contests, Lessee shall pay all costs and expenses and
discharge any Liens (other than Permitted Liens) arising with respect to
any Modification; (vi) each Modification shall comply with the requirements
of this Lease (including without limitation Sections 8.2 and 10.1); and
(vii) no Improvement shall be demolished or otherwise rendered unfit for
use unless Lessee shall finance the proposed replacement Modification
outside of this lease facility; provided, further, Lessee shall not make
any Modification (unless required by any Legal Requirement) to the extent
any such Modification, individually or in the aggregate, shall or could
reasonably be expected to have a Material Adverse Effect. All Modifications
shall immediately and without further action upon their incorporation into
the applicable Property (1) become property of Lessor, (2) be subject to
this Lease and (3) be titled in the name of Lessor. Lessee shall not remove
or attempt to remove any Modification from any Property. Each Ground Lease
for a Property shall expressly provide for the provisions of the foregoing
sentence. Lessee, at its own cost and expense, will pay for the repairs of
any damage to any Property caused by the removal or attempted removal of
any Modification.
(b) The construction process provided for in the Agency Agreement
is acknowledged by Lessor to be consistent with and in compliance with the
terms and provisions of this Article XI.
ARTICLE XII
12.1 WARRANTY OF TITLE.
-----------------
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements, all
replacement components to each Property and all Modifications) immediately
and without further action to vest in and become the property of Lessor and
to be subject to the terms of this Lease (provided, respecting each
Property subject to a Ground Lease, Lessor's interest therein is
acknowledged to be a leasehold interest pursuant to such Ground Lease) from
and after the date hereof or such date of incorporation into any Property.
Lessee agrees that, subject to the terms of Article XIII relating to
permitted contests, Lessee shall not directly or indirectly create or allow
to remain, and shall promptly discharge at its sole cost and expense, any
Lien, defect, attachment, levy, title retention agreement or claim upon any
Property, any component thereof or any Modifications or any Lien,
attachment, levy or claim with respect to the Rent or with respect to any
amounts held by Lessor, the Agent, any Lender or any Holder pursuant to any
Operative Agreement, other than Permitted Liens and Lessor Liens. Lessee
shall promptly notify Lessor in the event it receives actual knowledge that
a Lien other than a Permitted Lien or Lessor Lien has
13
occurred with respect to a Property, the Rent or any other such amounts,
and Lessee represents and warrants to, and covenants with, Lessor that the
Liens in favor of Lessor and/or the Agent created by the Operative
Agreements are (and until the financing parties under the Operative
Agreements have been paid in full shall remain) first priority perfected
Liens subject only to Permitted Liens and Lessor Liens. At all times
subsequent to the Commencement Date respecting a Property, Lessee shall (i)
cause a valid, perfected, first priority Lien on each applicable Property
to be in place in favor of the Agent (for the benefit of the Lenders and
the Holders) and (ii) file, or cause to be filed, all necessary documents
under the applicable real property law and Article 9 of the Uniform
Commercial Code to perfect such title and Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to or
for the performance by any contractor, mechanic, laborer, materialman,
supplier or vendor of any labor or services or for the furnishing of any
materials for any construction, alteration, addition, repair or demolition
of or to any Property or any part thereof. NOTICE IS HEREBY GIVEN THAT
LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING A PROPERTY OR
ANY PART THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC'S OR OTHER
LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
THE INTEREST OF LESSOR IN AND TO ANY PROPERTY OTHER THAN PERMITTED LIENS.
ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
-------------------------------------------------------
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
--------
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens)
on any Property and no part of any Property nor any Rent would be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee
14
such authorizations and other documents as may reasonably be required in
connection with any such contest and, if reasonably requested by Lessee, shall
join as a party therein at Lessee's sole cost and expense.
13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH
------------------------------------------------------------
LEGAL REQUIREMENTS.
------------------
Except with respect to Impositions, Legal Requirements, utility
charges and such other matters referenced in Section 13.1 which are the subject
of ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges and such other matters to be timely paid, settled or compromised, as
appropriate, with respect to each Property and (b) each Property to comply with
all applicable Legal Requirements.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
----------------------------------------------------
During the Term for each Property, Lessee shall procure and
carry, at Lessee's sole cost and expense, commercial general liability and
umbrella liability insurance for claims for injuries or death sustained by
persons or damage to property while on such Property or respecting the Equipment
and such other public liability coverages as are then customarily carried by
similarly situated companies conducting business similar to that conducted by
Lessee. Such insurance shall be on terms and in amounts that are no less
favorable than insurance maintained by Lessee with respect to similar properties
and equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee, and in no event shall
have a minimum combined single limit per occurrence coverage (i) for commercial
general liability of less than $1,000,000 and (ii) for umbrella liability of
less than $15,000,000. The policies shall name Lessee as the insured and shall
be endorsed to name Lessor, the Holders, the Agent and the Lenders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. In the operation of the Properties, Lessee shall
comply with applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE.
------------------------------------
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire and
other risks and shall maintain builders' risk insurance during construction
of any Improvements or Modifications in each case in amounts no less than
the Property Cost of such Property from time to time and on terms that (i)
are no less favorable than insurance covering other similar properties
owned by Lessee and (ii) are then carried by similarly situated
15
companies conducting business similar to that conducted by Lessee. The
policies shall name Lessee as the insured and shall be endorsed to name
Lessor and the Agent (on behalf of the Lenders and the Holders) as a named
additional insured and loss payee, to the extent of their respective
interests; provided, so long as no Event of Default exists, any loss
--------
payable under the insurance policies required by this Section for losses up
to $1,000,000 will be paid to Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area pursuant
to the Flood Disaster Protection Act of 1973, or any amendments or
supplements thereto or is in a zone designated A or V, then Lessee shall
comply with the National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973. In addition, Lessee will fully comply with
the requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from time to time,
and with any other Legal Requirement, concerning flood insurance to the
extent that it applies to any such Property. During the Term, Lessee
shall, in the operation and use of each Property, maintain workers'
compensation insurance consistent with that carried by similarly situated
companies conducting business similar to that conducted by Lessee and
containing minimum liability limits of no less than $100,000. In the
operation of each Property, Lessee shall comply with workers' compensation
laws applicable to Lessee, and protect Lessor, each Holder, the Agent and
each Lender against any liability under such laws.
14.3 COVERAGE.
--------
(a) As of the date of this Lease and annually thereafter during
the Term, Lessee shall furnish the Agent (on behalf of Lessor and the other
beneficiaries of such insurance coverage) with certificates prepared by the
insurers or insurance broker of Lessee showing the insurance required under
Sections 14.1 and 14.2 to be in effect, naming (to the extent of their
respective interests) Lessor, the Holders, the Agent and the Lenders as
additional insureds and loss payees and evidencing the other requirements
of this Article XIV. All such insurance shall be at the cost and expense of
Lessee and provided by nationally recognized, financially sound insurance
companies having an A or better rating by A.M. Best's Key Rating Guide.
Lessee shall cause such certificates to include a provision for thirty (30)
days' advance written notice by the insurer to the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) in the event
of cancellation or material alteration of such insurance. If an Event of
Default has occurred and is continuing and the Agent (on behalf of Lessor
and the other beneficiaries of such insurance coverage) so requests, Lessee
shall deliver to the Agent (on behalf of Lessor and the other beneficiaries
of such insurance coverage) copies of all insurance policies required by
Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies required
by Sections 14.1, 14.2(a) and 14.2(b) shall include an appropriate clause
pursuant to which any such policy shall provide that it will not be
invalidated should Lessee or any Contractor, as the
16
case may be, waive, at any time, any or all rights of recovery against any
party for losses covered by such policy or due to any breach of warranty,
fraud, action, inaction or misrepresentation by Lessee or any Person acting
on behalf of Lessee. Lessee hereby waives any and all such rights against
Lessor, the Hold ers, the Agent and the Lenders to the extent of payments
made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with any
insurance required under this Article XIV, except that Lessor may carry
separate liability insurance at Lessor's sole cost so long as (i) Lessee's
insurance is designated as primary and in no event excess or contributory
to any insurance Lessor may have in force which would apply to a loss
covered under Lessee's policy and (ii) each such insurance policy will not
cause Lessee's insurance required under this Article XIV to be subject to a
coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or replace
each policy prior to the expiration date thereof or otherwise maintain the
coverage required by such Sections without any lapse in coverage.
ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
-------------------------
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is obligated
to deliver or is deemed to have delivered, a Termination Notice), and prior
to the occurrence and continuation of a Default or an Event of Default,
Lessee shall be entitled to receive (and Lessor hereby irrevocably assigns
to Lessee all of Lessor's right, title and interest in) any condemnation
proceeds, award, compensation or insurance proceeds under Sections 14.2(a)
or 14.2(b) hereof to which Lessee or Lessor may become entitled by reason
of their respective interests in a Property (i) if all or a portion of such
Property is damaged or destroyed in whole or in part by a Casualty or (ii)
if the use, access, occupancy, easement rights or title to such Property or
any part thereof is the subject of a Condemnation; provided, however, if a
-------- -------
Default or an Event of Default shall have occurred and be continuing or if
such award, compensation or insurance proceeds shall exceed $1,000,000,
then such award, compensation or insurance proceeds shall be paid directly
to Lessor or, if received by Lessee, shall be held in trust for Lessor, and
shall be paid over by Lessee to Lessor and held in accordance with the
terms of this Section 15.1(a). All amounts held by Lessor hereunder on
account of any award, compensation or insurance proceeds either paid
directly to Lessor or turned over to Lessor shall be held as security for
the performance of Lessee's obligations hereunder and under the other
Operative Agreements and when all such obligations of Lessee with respect
to such matters (and all other obligations of
17
Lessee which should have been satisfied pursuant to the Operative
Agreements as of such date) have been satisfied, all amounts so held by
Lessor shall be paid over to Lessee.
(b) 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 Lessee's reasonable request, and at Lessee's
sole cost and expense, Lessor and the Agent shall participate in any such
proceeding, action, negotiation, prosecution or adjustment. Lessor and
Lessee agree that this Lease shall control the rights of Lessor and Lessee
in and to any such award, compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a Condemnation
of a Property or any interest therein where damage to the affected Property
is estimated to equal or exceed twenty-five percent (25%) of the Property
Cost of such Property, Lessee shall give notice thereof to Lessor promptly
after Lessee's receipt of such notice. In the event such a Casualty or
Condemnation occurs (regardless of whether Lessee gives notice thereof),
then Lessee shall be deemed to have delivered a Termination Notice to
Lessor and the provisions of Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless of
whether notice thereof must be given pursuant to Section 15.1(c)), this
Lease shall terminate with respect to the applicable Property in accordance
with Section 16.1 if Lessee, within thirty (30) days after such occurrence,
delivers to Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall continue in
full force and effect following a Casualty or Condemnation with respect to
the affected Property, Lessee shall, at its sole cost and expense (subject
to reimbursement in accordance with Section 15.1(a)) promptly and
diligently repair any damage to the applicable Property caused by such
Casualty or Condemnation in conformity with the requirements of Sections
10.1 and 11.1, using the as-built Plans and Specifications or
manufacturer's specifications for the applicable Improvements, Equipment or
other components of the applicable Property (as modified to give effect to
any subsequent Modifications, any Condemnation affecting the applicable
Property and all applicable Legal Requirements), so as to restore the
applicable Property to the same or a greater remaining economic value,
useful life, utility, condition, operation and function as existed
immediately prior to such Casualty or Condemnation (assuming all
maintenance and repair standards have been satisfied). In such event, title
to the applicable Property shall remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect Lessee's
obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth in Section
15.1(a) or Section 15.1(e), if during the Term with respect to a Property a
Casualty occurs with respect to such Property or Lessee receives notice of
a Condemnation with respect to such Property, and following such Casualty
or Condemnation, the applicable Property cannot
18
reasonably be restored, repaired or replaced on or before the day one
hundred eighty (180) days prior to the Expiration Date or the date nine (9)
months after the occurrence of such Casualty or Condemnation (if such
Casualty or Condemnation o c curs during the Term) to the same or a greater
remaining economic value, useful life, utility, condition, operation and
function as existed immediately prior to such Casualty or Condemnation
(assuming all maintenance and repair standards have been satisfied) or on
or before such day such Property is not in fact so restored, repaired or
replaced, then Lessee shall be required to exercise its Purchase Option for
such Property on the next Payment Date (notwithstanding the limits on such
exercise contained in Section 20.2) and pay Lessor the Termination Value
for such Property; provided, if any Default or Event of Default has
--------
occurred and is continuing, Lessee shall also promptly (and in any
event within three (3) Business Days) pay Lessor any award, compensation or
insurance proceeds received on account of any Casualty or Condemnation with
respect to any Property; provided, further, that if no Default or Event of
-------- -------
Default has occurred and is continuing, any Excess Proceeds shall be paid
to Lessee. If a Default or an Event of Default has occurred and is
continuing and any Loans, Holder Advances or other amounts are owing with
respect thereto, then any Excess Proceeds (to the extent of any such Loans,
Holder Advances or other amounts owing with respect thereto) shall be paid
to Lessor, held as security for the performance of Lessee's obligations
hereunder and under the other Operative Agreements and applied to such
obligations upon the exercise of remedies in connection with the occurrence
of an Event of Default, with the remainder of such Excess Proceeds in
excess of such Loans, Holder Advances and other amounts owing with respect
thereto being distributed to the Lessee.
15.2 ENVIRONMENTAL MATTERS.
---------------------
Promptly upon Lessee's actual knowledge of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $15,000, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and diligently complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental Laws. Any such
undertaking shall be timely completed in accordance with prudent industry
standards. If Lessee does not deliver a Termination Notice with respect to such
Property pursuant to Section 16.1, Lessee shall, upon completion of remedial
action by Lessee, cause to be prepared by a reputable environmental consultant
acceptable to Lessor a report describing the Environmental Violation and the
actions taken by Lessee (or its agents) in response to such Environmental
Violation, and a statement by the consultant that the Environmental Violation
has been remedied in full
19
compliance with applicable Environmental Law. Not less than sixty (60) days
prior to any time that Lessee elects to cease operations with respect to any
Property or to remarket any Property pursuant to Section 20.1 hereof or any
other provision of any Operative Agreement, Lessee at its expense shall cause to
be delivered to Lessor a Phase I environmental site assessment respecting such
Property recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent recognized professional reasonably acceptable to
Lessor in its reasonable discretion and prepared in accordance with standard
industry practice and satisfactory to Lessor in its reasonable discretion.
Notwithstanding any other provision of any Operative Agreement, if Lessee fails
to provide a Phase I environmental site assessment as set forth herein, Lessee
shall be obligated to purchase such Property for its Termination Value and shall
not be permitted to exercise (and Lessor shall have no obligation to honor any
such exercise) any rights under any Operative Agreement regarding a sale of such
Property to a Person other than Lessee or any Affiliate of Lessee.
15.3 NOTICE OF ENVIRONMENTAL MATTERS.
-------------------------------
Promptly, but in any event within five (5) Business Days from the
date Lessee has actual knowledge thereof, Lessee shall provide to Lessor written
notice of any pending or threatened claim, action or proceeding involving any
Environmental Law or any Release on or in connection with any Property or
Properties. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and Lessee's proposed response thereto. In
addition, Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property.
Lessee shall also promptly provide such detailed reports of any such material
environmental claims as may reasonably be requested by Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
-------------------------------
If Lessee has delivered, or is deemed to have delivered, written
notice of a termination of this Lease with respect to the applicable Property to
Lessor in the form described in Section 16.2(a) (a "Termination Notice")
------------------
pursuant to the provisions of this Lease, then following the applicable
Casualty, Condemnation or Environmental Violation, this Lease shall terminate
with respect to the affected Property on the applicable Termination Date.
16.2 PROCEDURES.
----------
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of such
Termination Notice (the "Termination Date"); and (ii) a binding and
----------------
irrevocable agreement of Lessee to pay the Termination Value for the
applicable Property and purchase such Property on such Termination Date.
20
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey such
Property or the remaining portion thereof, if any, to Lessee (or Lessee's
designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
-----------------------
If any one (1) or more of the following events (each a
"Lease Event of Default") shall occur:
----------------------
(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within five (5) Business Days after
the same has become due and payable or (ii) any Termination Value, on the
date any such payment is due and payable, or any payment of Basic Rent or
Supplemental Rent due on the due date of any such payment of Termination
Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) or any
other Credit Party shall fail to make any payment of any amount under any
Operative Agreement which has become due and payable within five (5)
Business Days after receipt of notice that such payment is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual certificate
with respect thereto within ten (10) days of the date such certificate is
due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease (including
without limitation the Incorporated Covenants (other than failure to comply
with the second sentence of Section 8.19 of the Lessee Credit Agreement))
or any other Operative Agreement to which Lessee is a party other than
those set forth in Sections 17.1(a), (b) or (c) hereof, or any other Credit
Party shall fail to observe or perform any term, covenant, obligation or
condition of such Credit Party under any Operative Agreement other than
those set forth in Section 17.1(b) hereof and such failure shall continue
for thirty (30) days (or with respect to the Incorporated Covenants, the
grace period, if any, applicable thereto provided, that references to
--------
Incorporated Covenants in this Section 17.1(d) shall not be deemed to apply
to a failure to comply with the second sentence of Section 8.19 of the
Lessee Credit Agreement) after notice thereof to the Lessee or such Credit
Party, or (ii) any representation or warranty made by Lessee or any other
Credit Party set forth in this Lease (including without limitation the
Incorporated Representation and Warranties) or in any other Operative
Agreement or in any document entered into in connection herewith or
therewith or in any
21
document, certificate or financial or other statement delivered in
connection herewith or therewith shall be false or inaccurate in any
material way when made;
(e) An Agency Agreement Event of Default shall have occurred and be
continuing and shall not have been waived;
(f) Any Credit Party or any Subsidiary of any Credit Party shall
default (beyond applicable periods of grace and/or notice and cure) in the
payment when due of any principal of or interest on any Debt having an
outstanding principal amount of at least $15,000,000; or any other event or
condition shall occur which enables the holder of any such Debt or any
Person acting on such holder's behalf to accelerate the maturity thereof;
(g) JPFDI, U.S. Foodservice, Inc. or any Restricted Subsidiary shall
(i) apply for or consent to the appointment of, or the taking of possession
by, a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) become insolvent or be generally
unable to or shall generally fail or admit in writing its inability to pay
its debts as such debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect), (v) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors'
rights generally, (vi) acquiesce in writing to, or fail to controvert in a
timely or appropriate manner, any petition filed against it in an
involuntary case under such Bankruptcy Code, (vii) take any action under
the laws of any jurisdiction (foreign or domestic) analogous to any of the
foregoing, or (viii) take any corporate action in furtherance of any of the
foregoing; or
(h) A proceeding or case shall be commenced in respect of JPFDI, U.S.
Foodservice, Inc. or any Restricted Subsidiary, without its application or
consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of it or of all or any
substantial part of its assets, or (iii) similar relief in respect of it
under any law providing for the relief of debtors, and such proceeding or
case described in clause (i), (ii) or (iii) shall continue undismissed, or
unstayed and in effect, for a period of 45 days, or an order for relief
shall be entered in an involuntary case under the Bankruptcy Code (as now
or hereafter in effect) against JPFDI, U.S. Foodservice, Inc. or any
Restricted Subsidiary or action under the laws of any jurisdiction (foreign
or domestic) analogous to any of the foregoing shall be taken with respect
to JPFDI, U.S. Foodservice, Inc. or any Restricted Subsidiary and shall
continue undismissed, or unstayed and in effect, for a period of 45 days;
(i) [INTENTIONALLY OMITTED];
(j) [INTENTIONALLY OMITTED];
(k) [INTENTIONALLY OMITTED];
22
(l) Any Lessee Credit Agreement Event of Default shall have occurred
and be continuing and shall not have been waived;
(m) A final judgment or decree for the payment of money shall be
rendered by a court of competent jurisdiction against JPFDI, U.S.
Foodservice, Inc. or any Restricted Subsidiary which, either alone or
together with other outstanding judgments or decrees against JPFDI, U.S.
Foodservice, Inc. or any one or more Restricted Subsidiaries, shall
aggregate more than $15,000,000, and JPFDI, U.S. Foodservice, Inc. or such
Subsidiary, as the case may be, shall not discharge the same or provide for
its discharge in accordance with its terms within 60 days from the date of
entry thereof or within such longer period (including, without limitation,
any period during which JPFDI, U.S. Foodservice, Inc. or such Subsidiary
shall be contesting a denial of coverage of its liability in respect of
such judgment by a reputable insurance carrier) during which execution of
such judgment shall have been stayed; or
(n) Any Credit Party or any member of the Controlled Group shall fail
to pay when due any amount which it shall have become liable to pay to the
PBGC or to a Pension Plan or Multiemployer Plan under Title IV of ERISA;
(ii) any Credit Party or any member of the Controlled Group shall withdraw
from a Multiple Employer Plan during a plan year in which it is a
substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or shall be treated as having so withdrawn under Section 4062(e) of
ERISA, or any Multiple Employer Plan shall be terminated; (iii) notice of
intent to terminate any Pension Plan or Multiemployer Plan shall be filed
under Title IV of ERISA by any Credit Party or any member of the Controlled
Group, any plan administrator or any combination of the foregoing; (iv) the
PBGC shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Pension Plan or
Multiemployer Plan; (v) any Credit Party or any member of the Controlled
Group shall withdraw from any Multiemployer Plan ; (vi) any Plan shall have
an Unfunded Liability; or (vii) any prohibited transaction (as defined in
Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject any Credit Party or any member
of the Controlled Group to any liability under Section 406, 409, 502(i) or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which such Credit Party or any member of the
Controlled Group has agreed or is required to indemnify any Person against
any such liability; and there shall result from any such event or events
referred to in the foregoing subdivisions (n)(i) through (n)(vii) a
material risk of incurring a liability in excess of $5,000,000; or
(o) A Change of Control shall occur; or
(p) Any Operative Agreement shall cease to be in full force
and effect;
(q) Except as to any Credit Party which is released in connection with
the Operative Agreements, the guaranty given by any Guarantor
under the Participation
23
Agreement or any material provision thereof shall cease to be in full force
and effect, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under such
guaranty;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g) or (h)) and this Lease shall terminate, and all
rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor or any other Financing Party, including
without limitation reasonable fees and expenses of counsel, as a result of any
Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY ALLOW
LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO COURT IN
A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 SURRENDER OF POSSESSION.
-----------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall, upon thirty (30) days written notice, surrender to
Lessor possession of the Properties. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
Lessee and all other Persons and any and all personal property and Lessee's
equipment and personalty and severable Modifications from the Properties. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law. Upon the written demand of Lessor,
Lessee shall return the Properties promptly to Lessor, in the manner and
condition required by, and otherwise in accordance with the provisions of,
Section 22.1(c) hereof.
17.3 RELETTING.
---------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of Lessee or otherwise, for such term or
terms (which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
24
17.4 DAMAGES.
-------
Neither (a) the termination of this Lease as to all or any of the
Properties pursuant to Section 17.1; (b) the repossession of all or any of the
Properties; nor (c) the failure of Lessor to relet all or any of the Properties,
the reletting of all or any portion thereof, nor the failure of Lessor to
collect or receive any rentals due upon any such reletting, shall relieve Lessee
of its liabilities and obligations hereunder, all of which shall survive any
such termination, repossession or reletting. If any Lease Event of Default shall
have occurred and be continuing and notwithstanding any termination of this
Lease pursuant to Section 17.1, Lessee shall forthwith pay to Lessor all Rent
and other sums due and payable hereunder to and including without limitation the
date of such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
Section 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1, less
the net proceeds, if any, which are actually received by Lessor with respect to
the period in question of any reletting of any Property or any portion thereof;
provided, that Lessee's obligation to make payments of Basic Rent and
--------
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have received the amounts specified in Section 17.6. In calculating
the amount of such net proceeds from reletting, there shall be deducted all of
Lessor's, any Holder's, the Agent's and any Lender's reasonable expenses in
connection therewith, including without limitation repossession costs, brokerage
or sales commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses incurred in preparation for such reletting. To the
extent Lessor receives any damages pursuant to this Section 17.4, such amounts
shall be regarded as amounts paid on account of Rent. Lessee specifically
acknowledges and agrees that its obligations under this Section 17.4 shall be
absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 POWER OF SALE.
-------------
Without limiting any other remedies set forth in this Lease, in
the event that a court of competent jurisdiction rules that this Lease
constitutes a mortgage, deed of trust or other secured financing as is the
intent of the parties, then Lessor and Lessee agree that Lessee has granted,
pursuant to Section 7.1(b) hereof and each Lease Supplement, a Lien against the
Properties WITH POWER OF SALE, and that, upon the occurrence and during the
continuance of any Lease Event of Default, Lessor shall have the power and
authority, to the extent provided by law, after prior notice and lapse of such
time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Properties.
25
17.6 FINAL LIQUIDATED DAMAGES.
------------------------
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to Lessee and at Lessor's election, and Lessee shall pay to
Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value. Upon payment of
the amount specified pursuant to the first sentence of this Section 17.6, Lessee
shall be entitled to receive from Lessor, either at Lessee's request or upon
Lessor's election, in either case at Lessee's cost, an assignment of Lessor's
entire right, title and interest in and to the Properties, Improvements,
Fixtures, Modifications, Equipment and all components thereof, in each case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease (including without limitation the release of any
memoranda of Lease and/or the Lease Supplement recorded in connection therewith)
and any Lessor Liens. The Properties shall be conveyed to Lessee "AS-IS, WHERE-
IS" and in their then present physical condition. If any statute or rule of law
shall limit the amount of such final liquidated damages to less than the amount
agreed upon, Lessor shall be entitled to the maximum amount allowable under such
statute or rule of law; provided, however, Lessee shall not be entitled to
-------- -------
receive an assignment of Lessor's interest in the Properties, the Improvements,
Fixtures, Modifications, Equipment or the components thereof unless Lessee shall
have paid in full the Termination Value. Lessee specifically acknowledges and
agrees that its obligations under this Section 17.6 shall be absolute and
unconditional under any and all circumstances and shall be paid and/or
performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 ENVIRONMENTAL COSTS.
-------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property, as such testing or work is
deemed appropriate in the reasonable judgment of Lessor. Lessee shall pay all
amounts referenced in the immediately preceding sentence within ten (10) days of
any request by Lessor for such payment. The provisions of this Section 17.7
shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
------------------------
If this Lease shall be terminated pursuant to Section 17.1,
Lessee waives, to the fullest extent permitted by Law, (a) any notice of re-
entry or the institution of legal proceedings to obtain re-entry or possession;
(b) any right of redemption, re-entry or possession; (c) the
26
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt; and (d) any other rights which might otherwise limit or
modify any of Lessor's rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
------------------------------------
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessee shall upon Lessor's demand immediately assign, transfer and
set over to Lessor, if permissible pursuant to the terms thereof, all of
Lessee's right, title and interest in and to each agreement executed by Lessee
in connection with the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties (including without limitation all right, title and interest of
Lessee with respect to all warranty, performance, service and indemnity
provisions), as and to the extent that the same relate to the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties or any of them.
17.10 REMEDIES CUMULATIVE.
-------------------
The remedies herein provided shall be cumulative and in addition
to (and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
----------------------------------------------
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of Lessee,
including without limitation the failure by Lessee to maintain the insurance
required by Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon any
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All out-of-
pocket costs and expenses so incurred (including without limitation reasonable
fees and expenses of counsel), together with interest thereon at the Overdue
Rate from the date on which such sums or expenses are paid by Lessor, shall be
paid by Lessee to Lessor on demand.
27
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
---------------------------------------------------------------
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to any Property, and upon tender
by Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by deed or other appropriate instrument) of
Lessor's entire interest in such Property, in each case in recordable form and
otherwise in conformity with local custom and free and clear of any Lessor Liens
attributable to Lessor but without any other warranties (of title or otherwise)
from Lessor. Such Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in
then present physical condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF A
-------------------------------------------------------------
PROPERTY.
--------
Lessee shall not be entitled to exercise its Purchase Option or the Sale
Option separately with respect to a portion of any Property consisting of Land,
Equipment, Improvements and/or any interest pursuant to a Ground Lease but shall
be required to exercise its Purchase Option or the Sale Option with respect to
an entire Property.
ARTICLE XX
20.1 PURCHASE OPTION, SALE OPTION, EXTENSION OPTION - GENERAL PROVISIONS.
-------------------------------------------------------------------
Not less than one hundred eighty (180) days (or respecting the Purchase
Option only, not less than sixty (60) days) and no more than two hundred forty
(240) days prior to the Expiration Date or, respecting the Purchase Option only,
any Payment Date (such Expiration Date or, respecting the Purchase Option only,
any such Payment Date being hereinafter referred to as the "Election Date"),
-------------
Lessee may give Lessor irrevocable written notice (the "Election Notice") that
---------------
Lessee is electing to exercise (a) with respect to an Election Notice given in
connection with any Payment Date prior to the Expiration Date only, the option
to purchase one or more Properties; provided, Lessee may not make the election
under this Section 20.1(a) unless (i) with respect to an election to purchase
less than all the Properties, no Default or Event of Default shall have occurred
and be continuing, either at the date any such election is made or at the
applicable Election Date (other than those that will be cured by the payment of
the Termination Value for all the Properties), (ii) the aggregate Property Cost
of all remaining Properties after the purchase by Lessee on the applicable
Election Date is equal to or exceeds $15,000,000, and (iii) except as otherwise
agreed in writing by all of the Lenders and Holders, the Lessee provides one or
more Appraisals indicating that the aggregate fair market value of all remaining
Properties after the purchase by the Lessee on the applicable Election Date is
at least four (4) times the sum of (A) the aggregate of all amounts outstanding
under the Tranche B Notes and (B) the aggregate of all amounts outstanding under
the Holder Certificates, in each
28
case after giving effect to the prepayment under such Tranche B Notes and Holder
Certificates in connection with the purchase by Lessee on the applicable
Election Date, (b) with respect to an Election Notice given in connection with
the Expiration Date only, the option to purchase all, but not less than all, the
Properties on the Expiration Date (the election or option to purchase one or
more Properties, the "Purchase Option"), (c) with respect to an Election Notice
given in connection with the Expiration Date only, the option to remarket all,
but not less than all, the Properties to a Person other than Lessee or any
Affiliate of Lessee and cause a sale of such Properties to occur on the
Expiration Date pursuant to the terms of Section 22.1 (the "Sale Option") or (d)
-----------
with respect to an Election Notice given in connection with the
Expiration Date only, the option to renew the Term for all, but not less than
all, the Properties for an additional period of one year pursuant to the terms
of Section 2.2 (the "Extension Option"). If Lessee does not give an Election
----------------
an Notice indicating the Purchase Option, the Sale Option or the
Extension Option within the allotted period of time prior to the Expiration Date
specified above in this Section 20.1, or if the requirements set forth in
Section 2.2 of this Lease are not fully satisfied regarding the Extension
Option, then Lessee shall be deemed to have elected for the Purchase Option to
apply on the Expiration Date. With respect to any such election by Lessee to
exercise its Purchase Option for one or more Properties prior to the Expiration
Date, Lessee shall pay to Lessor on the applicable Election Date an amount equal
to the Termination Value for all Properties Lessee has designated for purchase
in its election. Lessee may assign its rights and obligations under the Purchase
Option with respect to any Property or Properties to a third party or parties;
provided, that Lessee shall remain directly and primarily liable to perform
-------
the Purchase Option pursuant to the terms of the Operative Agreements in the
event any such assignee fails to do so. Notwithstanding the foregoing, with
respect to the continuing obligations under the Operative Agreements (including
without limitation indemnification obligations) pertaining to each Property
purchased by Lessee or its designee or sold to any other Person, Lessee shall
remain directly and primarily liable under the Lease and the other Operative
Agreements. If Lessee shall either (i) elect (or be deemed to have elected) to
exercise the Purchase Option on the Expiration Date or (ii) elect the Sale
Option on the Expiration Date and fail to cause all, but not less than all, the
Properties to be sold in accordance with the terms of Section 22.1, then on the
Expiration Date Lessee shall pay to Lessor on the date on which such purchase or
sale is scheduled to occur an amount equal to the Termination Value for all, but
not less than all, the Properties. In connection with the matters set forth in
each of the two preceding sentences, Lessee shall comply with the terms and
provisions of Section 22.1(c) to the same extent as if Lessor had exercised its
option to retain one (1) or more Properties pursuant to Section 22.1(a) and,
upon receipt of such amounts and satisfaction of such obligations, Lessor shall
transfer to Lessee all of Lessor's right, title and interest in and to all, but
not less than all, the Properties in accordance with Section 20.2.
20.2 LESSEE PURCHASE OPTION.
----------------------
Provided, with respect to clause (y) below, no Default or Event of Default
--------
shall have occurred and be continuing (other than those that will be cured by
the payment of the Termination Value for all the Properties) and provided, that
--------
the Election Notice has been appropriately given specifying the Purchase Option,
Lessee shall purchase (x) (in the case of Lessee's election of the Purchase
Option on a date prior to the Expiration Date) the Properties
29
designated for purchase in such election and (y) (in the case of Lessee's
election of the Purchase Option on the Expiration Date) all the Properties on
the Expiration Date at a price equal to the Termination Value for all the
Properties to be purchased.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with Lessee's exercise of its Purchase Option, upon the date on
which this Lease is to terminate with respect to a Property or all of the
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where required) and deliver to Lessee, at Lessee's cost and expense, each of
the following: (a) a termination or assignment (as requested by the Lessee) of
each applicable Ground Lease and special or limited warranty Deeds conveying
each Property (to the extent it is real property not subject to a Ground Lease)
to Lessee free and clear of the Lien of this Lease, the Lien of the Credit
Documents and any Lessor Liens; (b) a Xxxx of Sale conveying each Property (to
the extent it is personal property) to Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. All of the foregoing documentation must
be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to Lessee "AS-IS, WHERE-IS" and in then present
physical condition.
If any Property is the subject of remediation efforts respecting
Hazardous Substances at the applicable Election Date which could materially and
adversely impact the Fair Market Sales Value of such Property (with materiality
determined in Lessor's reasonable discretion), then Lessee shall be obligated to
repurchase each such Property pursuant to Section 20.2.
On the applicable Election Date on which Lessee has elected to
exercise its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor,
the Agent and all other parties, as appropriate, the sum of all costs and
expenses incurred by any such party in connection with the election by Lessee to
exercise its Purchase Option and all Rent and all other amounts then due and
payable or accrued under this Lease and/or any other Operative Agreement.
20.3 THIRD PARTY SALE OPTION.
-----------------------
(a) Provided, that (i) no Default or Event of Default shall have
--------
occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake to
cause a sale of the Properties on the applicable Election Date (all as
specified in the Election Notice), in accordance with the provisions of
Section 22.1. Such Election Date on which a sale is required may be
hereafter referred to as the "Sale Date."
---------
(b) In the event Lessee exercises the Sale Option then, as soon
as practicable and in all events not less than sixty (60) days prior to the
Sale Date, Lessee at its expense shall cause to be delivered to Lessor a
Phase I environmental site assessment for each of
30
the Properties recently prepared (no more than thirty (30) days old prior
to the Sale Date) by an independent recognized professional reasonably
acceptable to Lessor, prepared in accordance with standard industry
practice and reasonably satisfactory to Lessor. In the event that Lessor
shall not have received such environmental site assessment by the date
sixty (60) days prior to the Sale Date or in the event that such
environmental assessment shall reveal the existence of any material
violation of Environmental Laws, other material Environmental Violation or
potential material Environmental Violation (with materiality determined in
each case by Lessor in its reasonable discretion), then Lessee on the Sale
Date shall pay to Lessor an amount equal to the Termination Value for all
the Properties and any and all other amounts due and owing hereunder. Upon
receipt of such payment and all other amounts due under the Operative
Agreements, Lessor shall transfer to Lessee all of Lessor's right, title
and interest in and to all the Properties in accordance with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY OMITTED].
ARTICLE XXII
22.1 SALE PROCEDURE.
--------------
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of all the Properties in connection
with a sale to one (1) or more third party purchasers to be consummated on
the Sale Date for the highest price available, shall notify Lessor promptly
of the name and address of each prospective purchaser and the cash price
which each prospective purchaser shall have offered to pay for each such
Property and shall provide Lessor with such additional information about
the bids and the bid solicitation procedure as Lessor may reasonably
request from time to time. All such prospective purchasers must be Persons
other than Lessee or any Affiliate of Lessee. On the Sale Date, Lessee
shall pay (or cause to be paid) to Lessor and all other parties, as
appropriate, the sum of all costs and expenses incurred by Lessor and/or
the Agent (as the case may be) in connection with such sale of one or more
Properties, all Rent and all other amounts then due and payable or accrued
under this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
-------- -------
that notwithstanding the foregoing, Lessor may not reject the bids
submitted by Lessee if such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all the Properties, and
represent bona fide offers from one (1) or more third party purchasers. If
the highest price which a prospective purchaser or the prospective
purchasers shall have offered to pay for all the Properties on the Sale
Date is less than the sum of the
31
Limited Recourse Amount for all the Properties or if such bids do not
represent bona fide offers from one (1) or more third parties or if there
are no bids, Lessor may elect to retain one or more of the Properties by
giving Lessee prior written notice of Lessor's election to retain the same,
and promptly upon receipt of such notice, Lessee shall surrender, or cause
to be surrendered, each of the Properties specified in such notice in
accordance with the terms and conditions of Section 10.1. Upon acceptance
of any bid, Lessor agrees, at Lessee's request and expense, to execute a
contract of sale with respect to such sale, so long as the same is
consistent with the terms of this Article 22 and provides by its terms that
it is nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph, Lessee
shall arrange for Lessor to sell all the Properties free and clear of the
Lien of this Lease and any Lessor Liens attributable to Lessor, without
recourse or warranty (of title or otherwise), for cash on the Sale Date to
the purchaser or purchasers offering the highest cash sales price, as
identified by Lessee or Lessor, as the case may be; provided, however,
-------- -------
solely as to Lessor or the Trust Company, in its individual capacity, any
Lessor Lien shall not constitute a Lessor Lien so long as Lessor or the
Trust Company, in its individual capacity, is diligently and in good faith
contesting, at the cost and expense of Lessor or the Trust Company, in its
individual capacity, such Lessor Lien by appropriate proceedings in which
event the applicable Sale Date, all without penalty or cost to Lessee,
shall be delayed for the period of such contest; provided, further, that in
-------- -------
no event shall such contest materially and adversely affect the rights of
the Lessee hereunder and the other Operative Agreements or materially
interfere with the disposition of the Properties as set forth herein. To
effect such transfer and assignment, Lessor shall execute, acknowledge
(where required) and deliver to the appropriate purchaser each of the
following: (a) special or limited warranty Deeds conveying each such
Property (to the extent it is real property titled to Lessor) and an
assignment of the Ground Lease conveying the leasehold interest of Lessor
in each such Property (to the extent it is real property and subject to a
Ground Lease) to the appropriate purchaser free and clear of the Lien of
this Lease, the Lien of the Credit Documents and any Lessor Liens; (b) a
Xxxx of Sale conveying each such Property (to the extent it is personal
property) titled to Lessor to the appropriate purchaser free and clear of
the Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (c) any real estate tax affidavit or other document required by law
to be executed and filed in order to record each Deed and/or each Ground
Lease assignment; and (d) FIRPTA affidavits, as appropriate. All of the
foregoing documentation must be in form and substance reasonably
satisfactory to Lessor. Lessee shall surrender the Properties so sold or
subject to such documents to each purchaser in the condition specified in
Section 10.1, or in such other condition as may be agreed between Lessee
and such purchaser. Lessee shall not take or fail to take any action which
would have the effect of unreasonably discouraging bona fide third party
bids for any Property. If each of the Properties is not either (i) sold on
the Sale Date in accordance with the terms of this Section 22.1, or (ii)
retained by Lessor pursuant to an affirmative election made by Lessor
pursuant to the second sentence of the second paragraph of this Section
22.1(a), then (x) Lessee shall be obligated to pay Lessor on the Sale Date
an amount equal to the aggregate Termination
32
Value for all the Properties less any sales proceeds received, and (y)
Lessor shall transfer each applicable Property to Lessee in accordance with
Section 20.2.
(b) If the Properties are sold on a Sale Date to one (1) or more third
party purchasers in accordance with the terms of Section 22.1(a) and the
aggregate purchase price paid for all the Properties is less than the sum
of the aggregate Property Cost for all the Properties (hereinafter such
difference shall be referred to as the "Deficiency Balance"), then Lessee
------------------
hereby unconditionally promises to pay to Lessor on the Sale Date the
lesser of (i) the Deficiency Balance, or (ii) the Maximum Residual
Guarantee Amount for all the Properties. On a Sale Date if (x) Lessor
receives the aggregate Termination Value for all the Properties from one
(1) or more third party purchasers, (y) Lessor and such other parties
receive all other amounts specified in the last sentence of the first
paragraph of Section 22.1(a) and (z) the aggregate purchase price paid for
all the Properties on such date exceeds the sum of the aggregate Property
Cost for all the Properties, then Lessee may retain such excess. If one or
more of the Properties are retained by Lessor pursuant to an affirmative
election made by Lessor pursuant to the provisions of Section 22.1(a), then
Lessee hereby unconditionally promises to pay to Lessor on the Sale Date an
amount equal to the Maximum Residual Guarantee Amount for the Properties so
retained. Any payment of the foregoing amounts described in this Section
22.1(b) shall be made together with a payment of all other amounts
referenced in the last sentence of the first paragraph of Section 22.1(a).
(c) In the event that all the Properties are either sold to one (1) or
more third party purchasers on the Sale Date or retained by Lessor in
connection with an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then in either case on the applicable Sale
Date Lessee shall provide Lessor or such third party purchaser (unless
otherwise agreed by such third party purchaser) with (i) all permits,
certificates of occupancy, governmental licenses and authorizations
necessary to use, operate, repair, access and maintain each such Property
for the purpose it is being used by Lessee, and (ii) such manuals, permits,
easements, licenses, intellectual property, know-how, rights-of-way and
other rights and privileges in the nature of an easement as are reasonably
necessary or desirable in connection with the use, operation, repair,
access to or maintenance of each such Property for its intended purpose or
otherwise as Lessor or such third party purchaser(s) shall reasonably
request (and a royalty-free license or similar agreement to effectuate the
foregoing on terms reasonably agreeable to Lessor or such third party
purchaser(s), as applicable). All assignments, licenses, easements,
agreements and other deliveries required by clauses (i) and (ii) of this
paragraph (c) shall be in form reasonably satisfactory to Lessor or such
third party purchaser(s), as applicable, and shall be fully assignable
(including without limitation both primary assignments and assignments
given in the nature of security) without payment of any fee, cost or other
charge. Lessee shall also execute any documentation requested by Lessor or
such third party purchaser(s), as applicable, evidencing the continuation
or assignment of each Ground Lease.
33
22.2 APPLICATION OF PROCEEDS OF SALE.
-------------------------------
Lessor shall apply the proceeds of sale of any Property in the
following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
-----
the case may be) for the payment of all reasonable costs and expenses incurred
by Lessor (and/or the Agent, as the case may be) in connection with the sale (to
the extent Lessee has not satisfied its obligation to pay such costs and
expenses);
(b) SECOND, so long as the Credit Agreement is in effect and any
------
Loans or Holder Advances or any amount is owing to the Financing Parties under
any Operative Agreement, to the Agent to be applied pursuant to intercreditor
provisions among Lessor, the Lenders and the Holders contained in the Operative
Agreements; and
(c) THIRD, to Lessee.
-----
22.3 INDEMNITY FOR EXCESSIVE WEAR.
----------------------------
If the proceeds of the sale described in Section 22.1 with
respect to the Properties shall be less than the Limited Recourse Amount with
respect to the Properties, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties shall have been impaired by greater than expected
wear and tear during the term of the Lease, Lessee shall pay to Lessor within
ten (10) days after receipt of Lessor's written statement (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Sale Proceeds Shortfall, whichever amount is less.
22.4 APPRAISAL PROCEDURE.
-------------------
For determining the Fair Market Sales Value of the Properties or
any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and Lessee shall use
the following procedure (the "Appraisal Procedure"). Lessor and Lessee shall
-------------------
endeavor to reach a mutual agreement as to such amount for a period of ten (10)
days from commencement of the Appraisal Procedure under the applicable section
of the Lease, and if they cannot agree within ten (10) days, then two (2)
qualified appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor,
shall mutually agree thereupon, but if either party shall fail to choose an
appraiser within twenty (20) days after notice from the other party of the
selection of its appraiser, then the appraisal by such appointed appraiser shall
be binding on Lessee and Lessor. If the two (2) appraisers cannot agree within
twenty (20) days after both shall have been appointed, then a third appraiser
shall be selected by the two (2) appraisers or, failing agreement as to such
third appraiser within thirty (30) days after both shall have been appointed, by
the American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
Lessee; provided, that if the
--------
34
highest appraisal and the lowest appraisal are equidistant from the third
appraisal, the third appraisal shall be binding on Lessor and Lessee. The fees
and expenses of the appraiser appointed by Lessee shall be paid by Lessee; the
fees and expenses of the appraiser appointed by Lessor shall be paid by Lessor
(such fees and expenses not being indemnified pursuant to Section 13 of the
Participation Agreement); and the fees and expenses of the third appraiser shall
be divided equally between Lessee and Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
----------------------------
During the Marketing Period, the obligation of Lessee to pay
Rent with respect to the Properties (including without limitation the
installment of Basic Rent due on the Sale Date) shall continue undiminished
until payment in full to Lessor of the sale proceeds, if any, the Maximum
Residual Guarantee Amount, the amount due under Section 22.3, if any, and all
other amounts due to Lessor or any other Person with respect to all Properties
or any Operative Agreement. Lessor shall have the right, but shall be under no
duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or
otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
ARTICLE XXIII
23.1 HOLDING OVER.
------------
If Lessee shall for any reason remain in possession of a Property
after the expiration or earlier termination of this Lease as to such Property
(unless such Property is conveyed to Lessee), such possession shall be as a
tenancy at sufferance during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to such Property and Lessee shall continue
to pay Basic Rent at the lesser of the highest lawful rate and one hundred ten
percent (110%) of the last payment of Basic Rent due with respect to such
Property prior to such expiration or earlier termination of this Lease. Such
Basic Rent shall be payable from time to time upon demand by Lessor and such
additional amount of Basic Rent shall be applied by Lessor ratably to the
Lenders and the Holders based on their relative amounts of the then outstanding
aggregate Property Cost for all Properties. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given by
law to tenants at sufferance, to continue their occupancy and use of such
Property. Nothing contained in this Article XXIII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to any Property (unless such Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of such Property or
exercising any other remedy available to Lessor at law or in equity.
35
ARTICLE XXIV
24.1 RISK OF LOSS.
------------
During the Term, unless Lessee shall not be in actual possession
of any Property in question solely by reason of Lessor's exercise of its
remedies of dispossession under Article XVII, the risk of loss or decrease in
the enjoyment and beneficial use of such Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
ARTICLE XXV
25.1 ASSIGNMENT.
----------
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in part
to any Person without the prior written consent of the Agent, the Lenders,
the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1 or
otherwise) or other relinquishment of possession to any Property shall in
any way discharge or diminish any of the obligations of Lessee to Lessor
hereunder and Lessee shall remain directly and primarily liable under the
Operative Agreements as to any rights or obligations assigned by Lessee or
regarding any Property in which rights or obligations have been assigned or
otherwise transferred.
25.2 SUBLEASES.
---------
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such sublease.
As of the date of each Lease Supplement, Lessee shall lease the respective
Properties described in such Lease Supplement from Lessor, and any existing
tenant respecting such Property shall automatically be deemed to be a
subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any Lender,
any Holder or Lessor and subject to the other provisions of this Section
25.2, Lessee may sublet any Property or portion thereof to any wholly-owned
Subsidiary of Lessee. Except as referenced in the immediately preceding
sentence, no other subleases shall be permitted unless consented to in
writing by Lessor. All subleasing shall be done on market terms and shall
in no way diminish the fair market value or useful life of any applicable
Property.
36
(c) No sublease (referenced in this Section 25.2 or otherwise) or
other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder and
Lessee shall remain directly and primarily liable under this Lease as to
such Property, or portion thereof, so sublet. The term of any such sublease
shall not extend beyond the Term. Each sublease shall be expressly subject
and subordinate to this Lease.
ARTICLE XXVI
26.1 NO WAIVER.
---------
No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
-----------------------
No surrender to Lessor of this Lease or of all or any portion of
any Property or of any part of any thereof or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by Lessor and no act
by Lessor or the Agent or any representative or agent of Lessor or the Agent,
other than a written acceptance, shall constitute an acceptance of any such
surrender.
27.2 NO MERGER OF TITLE.
------------------
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 INCORPORATION OF COVENANTS.
--------------------------
Reference is made to the Lessee Credit Agreement and the
representations and warranties of Lessee contained in Article IX of the Lessee
Credit Agreement (hereinafter referred
37
to as the "Incorporated Representations and Warranties")and the covenants
-------------------------------------------
contained in Article VIII the Lessee Credit Agreement (hereinafter referred to
as the "Incorporated Covenants"). Lessee agrees with Lessor that the
------------------------
Incorporated Representations and Warranties and the Incorporated Covenants (and
all other relevant provisions of the Lessee Credit Agreement related thereto,
including without limitation the defined terms contained in Article I thereof
which are used in the Incorporated Representations and Warranties and the
Incorporated Covenants, hereinafter referred to as the "Additional Incorporated
-----------------------
Terms") are hereby incorporated are hereby incorporated by reference into this
-----
Lease to the same extent and with the same effect as if set forth fully herein
and shall inure to the benefit of Lessor, without giving effect to any waiver,
amendment, modification or replacement of the Lessee Credit Agreement or any
term or provision of the Incorporated Representations and Warranties or the
Incorporated Covenants occurring subsequent to the date of this Lease, except to
the extent otherwise specifically provided in the following provisions of this
paragraph. In the event a waiver is granted under the Lessee Credit Agreement or
an amendment or modification is executed with respect to the Lessee Credit
Agreement, and such waiver, amendment and/or modification affects the
Incorporated Representations and Warranties, the Incorporated Covenants or the
Additional Incorporated Terms, then such waiver, amendment or modification shall
be effective with respect to the Incorporated Representations and Warranties,
the Incorporated Covenants and the Additional Incorporated Terms as incorporated
by reference into this Lease only if consented to in writing by the Agent
(acting upon the direction of the Majority Secured Parties). In the event of any
replacement of the Lessee Credit Agreement with a similar credit facility (the
"New Facility"), the representations and warranties, covenants and additional
------------
terms contained in the New Facility which correspond to the representations and
warranties, covenants contained in Article I and Article VIII, respectively, and
such additional terms (each of the foregoing contained in the Lessee Credit
Agreement) shall become the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms only if consented
to in writing by the Agent (acting upon the direction of the Majority Secured
Parties) and, if such consent is not granted or if the Lessee Credit Agreement
is terminated and not replaced, then the representations and warranties and
covenants contained in Article I and Article VIII, respectively, and such
additional terms (each of the foregoing contained in the Lessee Credit Agreement
(together with any modifications or amendments approved in accordance with this
paragraph)) shall continue to be the Incorporated Representations and
Warranties, the Incorporated Covenants and the Additional Incorporated Terms
hereunder.
ARTICLE XXIX
29.1 NOTICES.
-------
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
38
ARTICLE XXX
30.1 MISCELLANEOUS.
-------------
Anything contained in this Lease to the contrary notwithstanding,
all claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease and
such jurisdiction or of such provision or of any other provision hereof in any
other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS.
----------------------------
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
----------------------
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
------------------------------
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 COUNTERPARTS.
------------
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which shall together constitute one (1)
and the same instrument.
30.6 GOVERNING LAW.
-------------
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE
REQUIRED TO APPLY.
30.7 CALCULATION OF RENT.
-------------------
All calculation of Rent payable hereunder shall be computed based
on the actual number of days elapsed over a year of three hundred sixty (360)
days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
39
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
----------------------------------------
This Lease shall not be recorded; provided, Lessor and Lessee
--------
shall to the extent required and in accordance with Section 8.9 of the
Participation Agreement, promptly record a memorandum of this Lease and the
applicable Lease Supplement (in substantially the form of EXHIBIT B ATTACHED
---------
HERETO) OR A SHORT FORM LEASE (IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
LESSOR) REGARDING EACH PROPERTY IN THE LOCAL FILING OFFICE WITH RESPECT THERETO,
IN ALL CASES AT LESSEE'S COST AND EXPENSE.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
-----------------------------------------------
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the inter-
creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
-----------------------
Notwithstanding anything contained in this Lease to the
contrary, Lessee agrees to look solely to Lessor's estate and interest in the
Properties (and in no circumstance to the Agent, the Lenders, the Holders or
otherwise to Lessor) for the collection of any judgment requiring the payment of
money by Lessor in the event of liability by Lessor, and no other property or
assets of Lessor or any shareholder, owner or partner (direct or indirect) in or
of Lessor, or any director, officer, employee, beneficiary, Affiliate of any of
the foregoing shall be subject to levy, execution or other enforcement procedure
for the satisfaction of the remedies of Lessee under or with respect to this
Lease, the relationship of Lessor and Lessee hereunder or Lessee's use of the
Properties or any other liability of Lessor to Lessee. Nothing in this Section
shall be interpreted so as to limit the terms of Sections 6.1 or 6.2 or the
provisions of Section 12.9 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
---------------------
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM
THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
-------------------------
Lessee hereby acknowledges and agrees that the rights and powers
of Lessor under this Lease have been assigned to the Agent pursuant to the terms
of the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to
40
the provisions of Sections 8.2(h) and 8.6 of the Participation Agreement, (b)
all notices to be given to Lessor shall be given to the Agent and (c) all
notices to be given by Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
----------------------------------------------
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
------- --------
30.14 USURY SAVINGS PROVISION.
-----------------------
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR
41
REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH
AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF
THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST
WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR DOES NOT
INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH DEMAND.
ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD THROUGHOUT THE
FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR EXTENSION) OF THIS
LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED
THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE LAW.
[signature pages follow]
42
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as the Owner Trustee under
the USF Real Estate Trust 1998-1, as Lessor
By: /s/ C. Xxxxx Xxxxxxx
----------------------------------
Name: C. Xxxxx Xxxxxxx
--------------------------------
Title: Vice President
-------------------------------
JP FOODSERVICE DISTRIBUTORS, INC., as Lessee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
----------------------------
Name:
---------------------------
Title:
--------------------------
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as the Owner Trustee under
the USF Real Estate Trust 1998-1, as Lessor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
JP FOODSERVICE DISTRIBUTORS, INC., as Lessee
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------
Title: Vice President & Secretary
-------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
----------------------------
Name:
---------------------------
Title:
--------------------------
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as the Owner Trustee under
the USF Real Estate Trust 1998-1, as Lessor
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
JP FOODSERVICE DISTRIBUTORS, INC., as Lessee
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By: /s/ Xxxx X. Xxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxx
---------------------------
Title: Vice President
--------------------------
EXHIBIT A TO THE LEASE
----------------------
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
----------------
[________________] between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
USF Real Estate Trust 1998-1, as lessor (the "Lessor"), and JP FOODSERVICE
------
DISTRIBUTORS, INC., a Delaware corporation, as lessee (the "Lessee").
------
WHEREAS, Lessor is the owner or will be the owner of the Property described
on Schedule 1 hereto (the "Leased Property") and wishes to lease the same to
---------- ---------------
Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
----------
dated as of __________, 1998, among Lessee, Lessor, not individually, except as
expressly stated therein, but solely as the Owner Trustee under the USF Real
Estate Trust 1998-1, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National Bank, as the Agent for the Lenders and
respecting the Security Documents, as the Agent for the Lenders and Holders, to
the extent of their interests, as such may be amended, modified, extended,
supplemented, restated and/or replaced from time to time.
SECTION 2. THE PROPERTIES. Attached hereto as Schedule 1 is the
----------
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and [A
------------ ------------
LEGAL DESCRIPTION OF THE LAND / A COPY OF THE GROUND LEASE] attached hereto as
Schedule 1-C. Effective upon the execution and delivery of this Lease
------------
Supplement by Lessor and Lessee, the Leased Property shall be subject to the
terms and provisions of the Lease. Without further action, any and all
additional Equipment funded under the Operative Agreements and any and all
additional Improvements made to the Land shall be deemed to be titled to the
Lessor and subject to the terms and conditions of the Lease and this Lease
Supplement.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect to
each Property, Lessee will comply with all obligations under and (to the extent
no Event of Default exists and provided, that such exercise will not impair the
--------
value of such Property) shall be permitted to exercise all rights and remedies
under, all operation and easement agreements and related or similar agreements
applicable to such Property.
A-1
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
-----------------
Counterpart"). To the extent that this Lease Supplement constitutes chattel
-----------
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED TO AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NORTH CAROLINA, EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR
PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. MORTGAGE; POWER OF SALE. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing, then Lessor and Lessee agree that Lessee hereby grants a Lien against
the Leased Property WITH POWER OF SALE, and that, upon the occurrence of any
Lease Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Leased Property.
SECTION 8. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
[The remainder of this page has been intentionally left blank.]
A-2
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as the
Owner Trustee under the USF Real Estate Trust
1998-1, as Lessor
By:
---------------------------
Name:
-------------------------
Title:
------------------------
JP FOODSERVICE DISTRIBUTORS, INC., as Lessee
By:
---------------------------
Name:
-------------------------
Title:
------------------------
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
FIRST UNION NATIONAL BANK, as
the Agent
By:
---------------------------
Name:
-------------------------
Title:
------------------------
A-3
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the undersigned
Notary Public, in the County of _________________ this _____ day of
____________, by ________________, as __________________ of FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, not individually, but
solely as the Owner Trustee under the USF Real Estate Trust 1998-1, on behalf of
the Owner Trustee.
[Notarial Seal] -----------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the undersigned
Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of JP FOODSERVICE
DISTRIBUTORS, INC., a DELAWARE corporation, on behalf of the corporation.
[Notarial Seal]
-----------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the undersigned
Notary Public, in the County of ________________ this ____ day of ___________,
by _____________, as __________________ of FIRST UNION NATIONAL BANK, a national
banking association, as the Agent.
[Notarial Seal]
-----------------------------
Notary Public
My commission expires:____________
A-4
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-5
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-6
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-7
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)/
(GROUND LEASE)]
A-8
EXHIBIT B TO THE LEASE
----------------------
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
Xxxxx & Xxx Xxxxx, PLLC
After recordation return to:
Xxxxx & Xxx Xxxxx, PLLC (LSJ)
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000-0000
Space above this line
for Recorder's use
-------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT
AND
LEASE SUPPLEMENT NO. ____
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. ____
("Memorandum"), dated as of _____________, 1998, is by and between FIRST
------------
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the USF Real Estate Trust
1998-1, with an office at 00 Xxxxx Xxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000
(hereinafter referred to as "Lessor"), and JP FOODSERVICE DISTRIBUTORS, INC., a
------
Delaware corporation, with an office at 9830 Patuxent Xxxxx Drive, Columbia,
Maryland (hereinafter referred to as "Lessee").
------
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise and
agree as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee,
----------------------------------
and Lessee has leased from Lessor, for the Term (as hereinafter defined),
certain real property and other property located in ________________, which is
described in the attached Schedule 1 (the "Property"), pursuant to the terms of
---------- --------
a Lease Agreement between Lessor and Lessee dated as of __________, 1998 (as
such may be amended, modified, extended, supplemented, restated and/or
B-1
replaced from time to time, "Lease") and a Lease Supplement No. ___ between
Lessor and-----Lessee dated as of ______________ (the "Lease Supplement").
----------------
2. TERM, RENEWAL, EXTENSION AND PURCHASE OPTION. The term of the
--------------------------------------------
Lease for the Property ("Term") commenced as of __________, 1998 and shall end
----
as of ___________, unless the Term is extended or earlier terminated in
accordance with the provisions of the Lease. The Lease contains provisions for
renewal and extension. The tenant has a purchase option under the Lease.
3. TAX PAYER NUMBERS.
-----------------
Lessor's tax payer number:
------------------.
Lessee's tax payer number:
------------------.
4. MORTGAGE; POWER OF SALE. Without limiting any other remedies set
-----------------------
forth in the Lease, in the event that a court of competent jurisdiction rules
that the Lease constitutes a mortgage, deed of trust or other secured financing,
then Lessor and Lessee agree that Lessee has granted, pursuant to the terms of
the Lease and the Lease Supplement, a Lien against the Property WITH POWER OF
SALE, and that, upon the occurrence and during the continuance of any Lease
Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be foreclosed) in all
or any part of the Property.
5. EFFECT OF MEMORANDUM. The purpose of this instrument is to give
--------------------
notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. This Memorandum shall not modify in any
manner the terms, conditions or intent of the Lease or the Lease Supplement and
the parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement.
[The remainder of this page has been intentionally left blank.]
B-2
IN WITNESS WHEREOF, the parties hereto have duly executed this instrument
as of the day and year first written.
LESSOR:
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually, but solely as the Owner Trustee
under the USF Real Estate Trust 1998-1
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
LESSEE:
JP FOODSERVICE DISTRIBUTORS, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
B-3
SCHEDULE 1
----------
(Description of Property)
B-4
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No. ____
was acknowledged before me, the undersigned Notary Public, in the County of
_________________ this _____ day of ______________, by ________________, as
__________________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
USF Real Estate Trust 1998-1, on behalf of the Owner Trustee.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No. ____
was acknowledged before me, the undersigned Notary Public, in the County of
_________________ this _____ day of ______________, by ________________, as
__________________ of JP FOODSERVICE DISTRIBUTORS, INC., a Delaware corporation,
on behalf of the corporation.
[Notarial Seal]
----------------------------------
Notary Public
My commission expires:____________
B-5
