Exhibit 10.2
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LEASE AGREEMENT
Dated as of June 27, 2003
between
WACHOVIA DEVELOPMENT CORPORATION,
as Lessor
and
CYPRESS SEMICONDUCTOR CORPORATION,
as Lessee
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This Lease Agreement is subject to a security interest in favor of Wachovia
Bank, National Association, as the agent for the Primary Financing Parties and
respecting the Security Documents, as the agent for the Secured Parties (the
"Agent") under a Security Agreement dated as of June 27, 2003, between Wachovia
Development Corporation, as the Borrower and the Agent, as amended, modified,
extended, supplemented and/or restated 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 Properties.......................................................2
2.2 Lease Term.......................................................2
2.3 Title............................................................3
2.4 Lease Supplement.................................................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................................5
3.5 Rent Payment Provisions..........................................5
3.6 Payment to Agent.................................................5
ARTICLE IV...................................................................5
4.1 Taxes; Utility Charges...........................................5
ARTICLE V....................................................................6
5.1 Quiet Enjoyment..................................................6
ARTICLE VI...................................................................6
6.1 Net Lease........................................................6
6.2 No Termination or Abatement......................................7
ARTICLE VII..................................................................7
7.1 Ownership of Each Property.......................................7
ARTICLE VIII.................................................................9
8.1 Condition of Each Property.......................................9
8.2 Possession and Use of Each Property..............................9
ARTICLE IX..................................................................11
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.....................11
ARTICLE X...................................................................11
10.1 Maintenance and Repair; Return..................................11
10.2 Environmental Inspection........................................13
ARTICLE XI..................................................................13
11.1 Modifications...................................................13
ARTICLE XII.................................................................15
12.1 Warranty of Title...............................................15
ARTICLE XIII................................................................16
13.1 Permitted Contests Other Than in Respect of Indemnities.........16
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13.2 Impositions, Utility Charges, Other Matters; Compliance with
Legal Requirements..............................................16
ARTICLE XIV.................................................................17
14.1 Public Liability and Workers' Compensation Insurance............17
14.2 Permanent Hazard and Other Insurance............................17
14.3 Coverage........................................................18
ARTICLE XV..................................................................19
15.1 Casualty and Condemnation.......................................19
15.2 Environmental Matters...........................................23
15.3 Notice of Environmental Matters.................................24
ARTICLE XVI.................................................................24
16.1 Termination Upon Certain Events.................................24
16.2 Procedures......................................................24
ARTICLE XVII................................................................24
17.1 Lease Events of Default.........................................24
17.2 Surrender of Possession.........................................29
17.3 Reletting.......................................................29
17.4 Damages.........................................................30
17.5 Power of Sale...................................................30
17.6 Final Liquidated Damages........................................31
17.7 Environmental Costs.............................................31
17.8 Waiver of Certain Rights........................................32
17.9 Assignment of Rights Under Contracts............................32
17.10 Remedies Cumulative.............................................32
17.11 Lessee's Right to Cure by Purchase of the Properties............32
17.12 Limitation Regarding Certain Lease Events of Default............33
ARTICLE XVIII...............................................................34
18.1 Lessor's Right to Cure Lessee's Lease Defaults..................34
ARTICLE XIX.................................................................34
19.1 [Reserved]......................................................34
19.2 No Purchase or Termination With Respect to Less than All of
a Property......................................................34
ARTICLE XX..................................................................35
20.1 Purchase Option or Sale Option-General Provisions...............35
20.2 Lessee Purchase Option..........................................35
20.3 Third Party Sale Option.........................................36
ARTICLE XXI.................................................................37
21.1 [Reserved]......................................................37
ARTICLE XXII................................................................37
22.1 Sale Procedure..................................................37
22.2 Application of Proceeds of Sale.................................39
22.3 Indemnity for Excessive Wear....................................39
22.4 Appraisal Procedure.............................................40
22.5 Certain Obligations Continue....................................40
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ARTICLE XXIII...............................................................40
23.1 Holding Over....................................................40
ARTICLE XXIV................................................................41
24.1 Risk of Loss....................................................41
ARTICLE XXV.................................................................41
25.1 Assignment......................................................41
25.2 Subleases.......................................................42
ARTICLE XXVI................................................................42
26.1 No Waiver.......................................................42
ARTICLE XXVII...............................................................43
27.1 Acceptance of Surrender.........................................43
27.2 No Merger of Title..............................................43
ARTICLE XXVIII..............................................................43
28.1 [Reserved]......................................................43
ARTICLE XXIX................................................................43
29.1 Notices.........................................................43
ARTICLE XXX.................................................................43
30.1 Miscellaneous...................................................43
30.2 Amendments and Modifications....................................44
30.3 Successors and Assigns..........................................44
30.4 Headings and Table of Contents..................................44
30.5 Counterparts....................................................44
30.6 GOVERNING LAW...................................................44
30.7 Calculation of Rent.............................................44
30.8 Memoranda of Lease and Lease Supplement.........................44
30.9 Allocations between the Lenders and Lessor......................45
30.10 Limitations on Recourse.........................................45
30.11 WAIVERS OF JURY TRIAL...........................................45
30.12 Exercise of Lessor Rights.......................................45
30.13 SUBMISSION TO JURISDICTION; VENUE...............................45
30.14 USURY SAVINGS PROVISION.........................................46
30.15 Restriction On Collateralization................................47
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
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LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of June 27, 2003 (as amended, modified,
extended, supplemented and/or restated from time to time, this "Lease") is
between WACHOVIA DEVELOPMENT CORPORATION, a North Carolina corporation, having
its principal office at One Wachovia Center, 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, as lessor (the "Lessor"), and CYPRESS
SEMICONDUCTOR CORPORATION, having its principal office at 0000 Xxxxx Xxxxx
Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, as lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement, Lessor will acquire one or more Properties consisting of parcels of
Land, Improvements and Equipment; and
B. WHEREAS, the Term shall commence with respect to each Property upon the
Commencement Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to lease
from Lessor, the Properties.
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions.
For purposes of this Lease, capitalized terms used in this Lease and not
otherwise defined herein shall have the meanings assigned to them in Appendix A
to that certain Participation Agreement dated as of June 27, 2003 (as amended,
modified, extended, supplemented and/or restated from time to time in accordance
with the applicable provisions thereof, the "Participation Agreement") among
Lessee, Lessor, the various financial institutions and other institutional
investors which are parties thereto from time to time as Credit Lenders, the
various financial institutions and other institutional investors which are
parties thereto from time to time as Mortgage Lenders, Wachovia Bank, National
Association, as agent for the Primary Financing Parties and respecting the
Security Documents, as the agent for the Secured Parties. Unless otherwise
indicated, references in this Lease to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Lease.
1.2 Interpretation.
The rules of usage set forth in Appendix A to the Participation Agreement
shall apply to this Lease.
ARTICLE II
2.1 Properties.
Subject to the terms and conditions hereinafter set forth and contained in
the Lease Supplement relating to the applicable Property, Lessor hereby leases
to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 Lease Term.
The term of this Lease with respect to each Property (the "Basic Term")
shall begin upon the Property Closing Date for such Property (the "Basic Term
Commencement Date") and shall end on the fifth annual anniversary of the Initial
Closing Date (the "Basic Term Expiration Date"), unless the Basic Term is
earlier terminated or renewed.
Subject to the consents required pursuant to this Section 2.2 and the
other applicable terms and conditions of the Operative Agreements, the Lessee
may request that the Lease be extended for up to three (3) successive five-year
terms (each a "Renewal Term") for all, but not less than all of the Properties.
Each Renewal Term shall end on the fifth annual anniversary of the commencement
of such Renewal Term, unless such Renewal Term is earlier terminated.
To the extent no Default or Event of Default has occurred and is
continuing as of the Basic Term Expiration Date or the last day of the first or
second Renewal Term only, as applicable, Lessee may, not less two hundred fifty
(250) days and no more than three hundred sixty (360) days prior to the fifth
annual anniversary of the Initial Closing Date or the last day of the first or
second (but not the third) Renewal Term, if any, by irrevocable notice to
Lessor, the Lenders and the Agent make written request to extend the Expiration
Date for all, but not less than all, of the Properties for an additional period
of five (5) years. Lessor, each Lender and the Agent shall each make a
determination, in the absolute and sole discretion of each such party, within
sixty (60) days of receiving a request from the Lessee to extend the Term as to
whether or not such party will agree to extend the Expiration Date as requested;
provided, however, that failure by any such party to make a timely response to
Lessee's request for extension of the Expiration Date shall be deemed to
constitute a refusal by such party to the requested extension of the Expiration
Date. In response to a request for an extension of the Expiration Date, if (a)
Lessor, each Lender (including replacement Lenders pursuant to Section 5.7 of
the Participation Agreement) and the Agent shall each agree to the requested
extension by delivering written confirmation of such acceptance of the extension
to the Agent, Lessee and Lessor, then the Term shall be extended and shall
expire on the date five (5) years after the then current Expiration Date or (b)
Lessor, any Lender 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
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Expiration Date and unless the Lessee properly makes an election pursuant to
Section 20.1, the Lessee shall be deemed to have elected the Purchase Option
which shall be exercised on the then current Expiration Date. If any Lender
declines, or is deemed to have declined, to consent to such extension, the
Lessee may cause any such Lender to be replaced as a Lender pursuant to Section
5.7 of the Participation Agreement. Each Renewal Term, if any, shall commence on
the day immediately following the Basic Term Expiration Date or the last day of
the first or second Renewal Term, as applicable.
2.3 Title.
Each Property is leased to Lessee without any representation or warranty,
express or implied, by Lessor and subject to the rights of parties in possession
(if any), the state of title (including without limitation the Permitted Liens)
existing as of the Commencement Date, 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 Supplement.
On or prior to the Commencement Date, Lessee and Lessor shall each execute
and deliver a different Lease Supplement for each Property effective as of such
Commencement Date in substantially the form of Exhibit A hereto.
ARTICLE III
3.1 Rent.
(a) Lessee shall pay Basic Rent in arrears on each Scheduled
Interest Payment Date during the Term and on any date on which this Lease
shall terminate with respect to any or all Properties.
(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 to such account at such bank as Lessor
shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or any
portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, Lessee or any other Person
or for any other reason whatsoever, shall not delay or otherwise affect
Lessee's obligation to pay Rent for such Property in accordance with the
terms of this Lease.
(d) Lessee shall make all payments of Rent payable to Lessor by wire
transfer initiated prior to 1:00 p.m., Charlotte, North Carolina time, on
the applicable date for payment of such amount.
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3.2 Payment of Basic Rent.
Basic Rent shall be paid absolutely net to Lessor or its designee, so that
this Lease shall yield to Lessor the full amount thereof, without setoff,
deduction or reduction.
3.3 Supplemental Rent.
Lessee shall pay directly to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable. All such
payments of Supplemental Rent payable to any Financing Party shall be in the
full amount thereof, without setoff, deduction or reduction. Lessee shall pay to
the appropriate Person or a designee therefor, as Supplemental Rent due and
owing to such Person, among other things, on demand, (a) any and all payment
obligations (except for amounts payable as Basic Rent) owing from time to time
under the Operative Agreements by any Person to the Agent, any Primary Financing
Party or any other Person, (b) (i) interest at the interest rate determined
pursuant to Section 2.8(b) of the Credit Note Loan Agreement with respect to (A)
any portion of any installment of Basic Rent payable to any Credit Lender not
paid when due for the period for which the same shall be overdue and (B) any
portion of any payment of Supplemental Rent payable to any Credit Lender not
paid when due for the period from the due date until the same shall be paid,
(ii) interest at the interest rate determined pursuant to Section 2.8(b) of the
Mortgage Note Loan Agreement with respect to (A) any portion of any installment
of Basic Rent payable to any Mortgage Lender not paid when due for the period
for which the same shall be overdue and (B) any portion of any payment of
Supplemental Rent payable to any Mortgage Lender not paid when due for the
period from the due date until the same shall be paid, (iii) interest at the
Lessor Overdue Rate with respect to (A) any portion of any installment of Basic
Rent payable to Lessor not paid when due for the period for which the same shall
be overdue and (B) any portion of any payment of Supplemental Rent payable to
Lessor not paid when due for the period from the due date until the same shall
be paid and (iv) to the extent such is not duplicative of the foregoing,
interest at the greater of the interest rates determined pursuant to Section
2.8(b) of the Credit Note Loan Agreement and Section 2.8(b) of the Mortgage Note
Loan Agreement with respect to (A) any portion of any installment of Basic Rent
payable to any Financing Party (other than any Credit Lender, any Mortgage
Lender or Lessor) not paid when due for the period for which the same shall be
overdue and (B) any portion of any payment of Supplemental Rent payable to any
Financing Party (other than any Credit Lender, any Mortgage Lender or Lessor)
not paid when due for the period from the due date until the same shall be paid
and (c) amounts referenced as Supplemental Rent obligations pursuant to Section
8.3 of the Participation Agreement. 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, except to the extent such
payment arises from a Primary Financing Party entering into a financing of its
Note or Lessor Advance not contemplated in the transactions set forth in the
Operative Agreements.
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3.4 Performance on a Non-Business Day.
If any Basic Rent or Supplemental Rent is required hereunder on a day that
is not a Business Day, then such Basic Rent or Supplemental Rent, as applicable,
shall, subject to the definition of "Interest Period" in Appendix A to the
Participation Agreement, be due on the next succeeding Business Day, and such
extension of time in such case shall be included in the computation of Basic
Rent and Supplemental Rent and fees payable pursuant to the Operative
Agreements, as applicable and as the case may be.
3.5 Rent Payment Provisions.
Lessee shall make payment of all Basic Rent and Supplemental Rent when due
regardless of whether any of the Operative Agreements pursuant to which same is
calculated and is owing shall have been rejected, avoided or disavowed in any
bankruptcy or insolvency proceeding involving any of the parties to any of the
Operative Agreements. Such Operative Agreements and their related definitions
are incorporated herein by reference and shall survive any termination,
amendment or rejection of any such Operative Agreements pursuant to or in
connection with such bankruptcy or insolvency proceeding.
3.6 Payment to Agent.
Notwithstanding any other provision herein, Lessor hereby instructs
Lessee, and Lessee hereby acknowledges and agrees, that until such time as all
the Lessee Secured Obligations are paid in full and all Commitments have been
terminated, any and all Rent (excluding Excepted Payments) and any and all other
amounts of any kind or type under this Lease due and owing or payable to any
Person shall instead be paid directly to the Agent (excluding Excepted Payments)
or as the Agent may direct from time to time for allocation and distribution in
accordance with the procedures set forth in Section 8.7 of the Participation
Agreement.
ARTICLE IV
4.1 Taxes; Utility Charges.
Subject to the terms of Article XIII relating to permitted contests,
Lessee shall pay or cause to be paid all Impositions with respect to each
Property 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 reasonable request, Lessee shall provide from time to time Lessor with
evidence of all such payments referenced in the foregoing sentence. Lessee shall
be entitled to receive any credit or refund with respect to any Imposition or
utility charge paid by Lessee. Unless an Event of Default shall have occurred
and be continuing, the amount of any credit or refund received by Lessor on
account of any Imposition or utility charge paid by Lessee, net of the costs and
expenses incurred by Lessor in obtaining such credit or refund, shall be
promptly paid over to Lessee. All charges for Impositions or utilities imposed
with respect to any Property for a period
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during which this Lease expires or terminates shall be adjusted and prorated on
a daily basis between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2, 17.3 and 20.3 and
the other terms of this Lease and the other Operative Agreements and in the
event of a foreclosure of Lessor's Interest so long as no Lease Event of Default
shall have occurred and be continuing, (a) Lessee shall peaceably and quietly
have, hold and enjoy each Property for the Term, free of any claim or other
action by Lessor and the Financing Parties or anyone rightfully claiming by,
through or under Lessor or the Financing Parties (other than Lessee) with
respect to any matters arising during the Term and (b) the Lease shall continue
in full force and effect and the Lease shall automatically and unconditionally
become a direct lease between the Primary Financing Parties or any successor
thereto, as lessor as if such Primary Financing Parties or their successors were
the Lessor originally named in the Lease, and Lessee.
ARTICLE VI
6.1 Net Lease.
This Lease shall constitute a net lease, and the obligations of Lessee
hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of each Property
during the Term. Any present or future law to the contrary notwithstanding,
except as expressly provided in the Operative Agreements, this Lease shall not
terminate prior to the Expiration Date, nor shall Lessee be entitled to any
abatement, suspension, deferment, reduction, setoff, counterclaim, or defense
with respect to the Rent, nor shall the obligations of Lessee hereunder be
affected (except in each case as expressly contemplated under the terms of the
Operative Agreement) for any reason whatsoever, including without limitation by
reason of: (a) any damage to or destruction of any Property or any part thereof
(subject to Article XV below); (b) any taking of any Property or any part
thereof or interest therein by Condemnation or otherwise (subject to Article XV
below); (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, receivership, dissolution or other proceeding relating to or
affecting the Agent, any Primary Financing Party, Lessee 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
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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.
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 in each case as expressly contemplated
under the terms of the Operative Agreements) or (b) to avail itself of any
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
with respect to any Rent. Lessee shall remain obligated under this Lease in
accordance with its terms and Lessee hereby waives any and all rights now or
hereafter conferred by statute or otherwise to modify or to avoid strict
compliance with its obligations under this Lease. Notwithstanding any such
statute or otherwise, Lessee shall be bound by all of the terms and conditions
contained in this Lease.
ARTICLE VII
7.1 Ownership of Each Property.
(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, regulatory purposes, commercial law and
real estate purposes and all other 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 treat payments made by
Lessee hereunder as payments of interest and principal for income taxes
and bankruptcy purposes and shall claim the cost recovery deductions
associated with each Property, and
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Lessor shall not, to the extent not prohibited by Law, take on its tax
return a position inconsistent with Lessee's treatment of such items or
such deductions.
(b) In order to secure the obligations of Lessee now existing or
hereafter arising under any and all Operative Agreements, pursuant hereto
and to the Lease Supplement, Lessee hereby conveys, grants, assigns,
bargains, transfers, pledges, hypothecates, mortgages and sets over to
Agent, for the benefit of the Secured Parties, (i) a security interest in
and lien on and hereby conveys and transfers to the party described in the
Lease Supplement, as security for Lessee Secured Obligations, all right,
title and interest of Lessee (now owned or hereafter acquired) in and to
each Property and all proceeds (including without limitation Property
Proceeds), to the extent such is personal property and (ii) irrevocably
grants and conveys a lien, deed of trust or mortgage, as applicable, on
all right, title and interest of Lessee (now owned or hereafter acquired)
in and to each Property and all proceeds (including without limitation
insurance proceeds thereof), to the Agent in trust with private power of
sale, all right, title and interest of Lessee in the Property to the
extent such is real property to secure the Lessee Secured Obligations.
Lessor and Lessee further intend and agree that, for the purpose of
securing the Lessee Secured Obligations now existing or hereafter arising
under the Operative Agreements, this Lease as supplemented by the Lease
Supplement shall be a security agreement and financing statement within
the meaning of Article 9 of the Uniform Commercial Code respecting the
Lessee's interest in each Property and all proceeds (including without
limitation Property Proceeds and insurance proceeds thereof) and in and to
the deposit amount referenced in Section 15.1(e)(iii), to the extent such
is property governed by the UCC and irrevocably grants and conveys a lien,
deed of trust or mortgage, as applicable, on the Lessee's interest in each
Property and all proceeds (including without limitation Property
Proceeds), to the Agent in trust with private power at sale, all right,
title and interest of Lessee in the Property to the extent such is real
property and constitutes a grant by Lessee to Lessor of a security
interest, lien, deed of trust or mortgage, as applicable, in all of
Lessee's right, title and interest in and to each Property and all
proceeds (including without limitation Property Proceeds thereof) of the
conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all rents,
profits and income produced by any Property. Lessee and Lessor further
intend and agree that notifications to Persons holding such proceeds, and
acknowledgments, receipts or confirmations from financial intermediaries,
bankers or agents (as applicable) of Lessee, when given, shall be deemed
to have been given for the purpose of perfecting the foregoing lien,
security interest, mortgage lien or deed of trust, as applicable, under
applicable law (including without limitation the UCC). Lessee shall
promptly take such actions as necessary (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
Lease Supplement) to ensure that the lien, security interest, mortgage
lien or deed of trust, as applicable, in each Property and the other items
referenced above will be deemed to be a perfected lien, security interest,
mortgage lien or deed of trust under applicable law and will be maintained
as such throughout the Term.
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ARTICLE VIII
8.1 Condition of Each Property.
EXCEPT FOR THE REPRESENTATIONS OF LESSOR IN SECTION 6.1 OF THE
PARTICIPATION AGREEMENT, 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 STATE OF TITLE
EXISTING AS OF THE COMMENCEMENT DATE, (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 THE
AGENT NOR ANY PRIMARY FINANCING PARTY 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 THE AGENT NOR ANY PRIMARY FINANCING PARTY 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 COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO
INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON, IS OR WILL BE (INSOFAR AS
THE AGENT AND EACH PRIMARY FINANCING PARTY ARE CONCERNED) SATISFIED WITH THE
RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS
OF THE RESULTS OF ITS OWN INSPECTIONS (EXCEPT FOR THE REPRESENTATIONS OF LESSOR
IN SECTION 6.1 OF THE PARTICIPATION AGREEMENT), AND ALL RISKS INCIDENT TO THE
MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN THE AGENT AND THE
PRIMARY FINANCING PARTIES, ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND, ARE
TO BE BORNE BY LESSEE.
8.2 Possession and Use of Each Property.
(a) At all times during the Term, each Property shall be a Permitted
Facility and shall be used by Lessee in the ordinary course of its
business provided, subleasing pursuant to Section 25.2 hereof shall be
permitted. Lessee shall pay, or cause to be paid during the Term, all
charges and costs required in connection with the use of each
9
Property as contemplated by this Lease. Lessee shall not commit or permit
any waste of any Property or any part thereof.
(b) The address stated in Section 6.2(i) of the Participation
Agreement is the principal place of business and chief executive office of
Lessee and its jurisdiction of organization (as such terms are used in the
Uniform Commercial Code of any applicable jurisdiction), and Lessee will
provide Lessor with prior written notice of any change of the location of
its principal place of business, the location of its chief executive
office or the location of its jurisdiction of organization. Regarding each
Property, the applicable Lease Supplement shall correctly identify the
Equipment and the Improvements and contain an accurate legal description
for the related parcel of Land. The Equipment and Improvements respecting
each Property will be located on the parcel of Land identified in the
applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of Equipment to
or in any other item of equipment or personal property, or to or in any
real property, in a manner that could give rise to the assertion of any
Lien on such item of Equipment in favor of a third party that is prior to
the Liens thereon created by the Operative Agreements by reason of such
attachment or the assertion of a claim that such item of Equipment has
become an accession or 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 or prior to 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 a part of such Property, a schedule
that has a general description of the Improvements which shall comprise a
part of such Property and a legal description of the Land upon which such
Improvements are located, all of which shall be leased hereunder as of the
Commencement Date. As of the Commencement Date, such Equipment,
Improvements, Land (whether owned or ground leased) 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 any such exercise of rights and
remedies hereinafter referred to in this Section 8.2(e) 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 [Reserved.]
10
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, during the
Term 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 each Property, (b) procure, maintain and
comply with all licenses, permits, orders, approvals, consents and other
authorizations required for the acquisition, use, operation, maintenance,
repair, refurbishment and restoration of each Property, and (c) comply with all
industry standards, including without limitation the acquisition, use,
operation, maintenance, repair, refurbishment and restoration of each Property,
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.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) During the Term, subject to the provisions of Article XV with
respect to a Casualty or Condemnation, Lessee, at its sole cost and
expense, shall maintain each Property as the type of facility described in
the applicable Appraisal as of the Commencement Date and shall maintain,
repair and keep the condition of such Property to the industry standard
applicable to such type of facility (ordinary wear and tear excepted), but
in any event, Lessee shall maintain each Property in a manner which does
not have a Material Adverse Effect on such Property. Lessee, at its sole
cost and expense, shall make all necessary repairs to each Property 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 Lessee's properties or equipment comparable in type and function to
each Property, such that each Property is capable of being immediately
utilized by a third party, subject to normal tenant upfits, and in
compliance with standard industry practice for the type of facility
described in the applicable Appraisal as of the Commencement Date,
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
11
in the applicable Lease Supplement, except for the temporary removal of
Equipment or Fixtures for repair or replacement of worn out or obsolete
Equipment or Fixtures.
(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise rendered unfit for use,
Lessee, at its own expense, will within a reasonable time replace such
component with a replacement substitute 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 such component
replacements and substitutions which are added to any Property shall be
treated as Required Modifications as provided in Article XI and shall be
replaced in accordance with such Article XI.
(d) Upon reasonable advance notice and during regular business
hours, Lessor and its agents shall have the right to inspect each Property
and all maintenance records with respect thereto, but shall not, in the
absence of an Event of Default, materially disrupt the business of Lessee.
In connection with any such inspection initiated upon the occurrence of,
and thereafter during any continuance of, a Lease Event of Default, costs
and expenses in connection with any such inspection shall be borne by the
Lessee. Such inspection shall be subject to Lessee's reasonable safety and
security procedures applicable to employees and invitees of Lessee.
(e) Lessee shall cause to be delivered to Lessor Appraisals in
compliance with Section 8.3(e) of the Participation Agreement.
(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, industry
standards, 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 any Property, if Lessee shall not have exercised its
Purchase Option with respect to such Property and purchased or caused its
designee to purchase such Property, surrender such Property (i) to Lessor
pursuant to the exercise of the applicable remedies upon the occurrence
and continuance 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).
12
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
elect (for itself or its designee) to purchase each Property in accordance with
the terms of this Lease, then not more than one hundred eighty (180) days nor
less than sixty (60) days prior to the Expiration Date, Lessee at its expense
shall cause to be delivered to Lessor a Phase I environmental site assessment
recently prepared (no more than thirty (30) days prior to the date of delivery)
by an independent recognized professional reasonably acceptable to Lessor, and
in form, scope and content reasonably satisfactory to Lessor.
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 each Property or
any part thereof and substitutions and replacements therefor (collectively
and including Required Modifications (hereinafter defined),
"Modifications"), and Lessee shall make any and all Modifications
necessary to maintain warranties for the Properties and each component
thereof or required to be made pursuant to all Legal Requirements,
Insurance Requirements and industry standards applicable to the Property
or any part thereof, but in all cases excluding Non-Integral Equipment
(the "Required Modifications"); provided, that: (i) unless required or
recommended pursuant to any Legal Requirement, Insurance Requirement or
industry standard, no Modification shall diminish the fair market value,
utility or useful life of any Property from that which existed immediately
prior to such Modification (assuming such Property has been maintained and
repaired in accordance with the requirements of this Lease) nor shall such
Modification otherwise have or reasonably be expected to have a Material
Adverse Effect; (ii) each Modification shall be performed and completed
diligently and in a good and workmanlike manner; (iii) no Modification
shall adversely affect the structural integrity of any Property; (iv) to
the extent required by Section 14.2(a), Lessee shall maintain builders'
risk insurance at all times when a Modification is in progress; (v)
subject to the terms of Article XIII relating to permitted contests,
Lessee shall pay all costs and expenses and discharge any Liens arising
with respect to any Modification; (vi) each Modification shall comply with
the requirements of this Lease (including without limitation Sections 8.2
and 10.1); (vii) no Improvement shall be demolished or otherwise rendered
unfit for use unless Lessee shall, at its cost and expense, provide a
replacement Modification in compliance with the Lease and the other
Operative Agreements; (viii) Lessee has obtained all consents, approvals
and each other item required by any Governmental Authority and as required
pursuant to the restrictive covenants applicable to the Land and
Improvements; and (ix) no Modification shall result in a diminution in the
value of such Property, after taking into account the removal of such
Modification (provided such Modification is permitted to be removed), in
the aggregate, below what the expected value of such Property would have
been prior to the
13
addition of such Modifications, in the aggregate, as determined by the
Lessor in its sole discretion. Excluding in each case, Non-Integral
Equipment, all Modifications shall immediately and without further action
upon their incorporation into any Property (1) become property of Lessor,
(2) be subject to this Lease and (3) be titled in the name of Lessor.
Subject to the fourth sentence of this Section 11.1, Lessee shall not
remove or attempt to remove any Modification titled to Lessor from any
Property, except as set forth in Section 10.1. Notwithstanding the
immediately preceding sentence, provided, no Lease Event of Default has
occurred and is continuing (or for ninety (90) days after the date a Lease
Event of Default has first occurred and, if requested by Lessor, Lessee
has posted a bond to cover damages to the Properties caused by removal of
the Non-Integral Equipment or otherwise caused by Lessee or its Affiliates
or agents during such period), then Lessee may, upon reasonable advance
notice to Lessor and with the consent of Lessor (which consent shall not
be unreasonably or delayed) enter the applicable Properties for the
purpose of removing the Non-Integral Equipment in accordance with Sections
10.1 and 11.1) and so long as Lessee has completed all repairs required
pursuant to the Lease contemporaneously with the removal of such
Non-Integral Equipment and such removal occurs prior to the Expiration
Date, Lessee may remove such Non-Integral Equipment prior to the end of
the Basic Term or during such 90-day period, as applicable, and such
Non-Integral Equipment shall be deemed to be property of Lessee or the
relevant third party who financed such Non-Integral Equipment, provided,
if Lessee fails to remove such Non-Integral Equipment in accordance with
the Operative Agreements (including the 90-day period set forth above) or
prior to the Expiration Date then all of Lessee's right, title and
interest in and to such Non-Integral Equipment shall be deemed to be
immediately and automatically transferred to Lessor on such date and shall
become part of the applicable Property and Lessor may sell or dispose of
such Non-Integral Equipment without notice to Lessee and Lessee waives all
rights it may have to dispute or contest such sale or disposal, provided
proceeds of such sale or disposal are distributed in accordance with
Section 8.7 of the Participation Agreement. In all cases, 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 Non-Integral
Equipment.
(b) [Reserved].
(c) The parties hereto agree that Non-Integral Equipment and other
personal property which is owned by Lessee or a third party and is not a
part of any Property may be removed by Lessee prior to the Expiration
Date, so long as such personal property without causing material damage,
after taking into account repairs which are actually completed or caused
to be completed by Lessee, at Lessee's sole cost and expense, at the time
of such removal.
14
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, but not
Non-Integral Equipment) immediately and without further action to vest in
and become the property of Lessor and to be subject to the terms of this
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 Modification (or
any part or component thereof other than Non-Integral Equipment) or any
Lien, attachment, levy or claim with respect to the Rent or with respect
to any amount held by the Agent or any Primary Financing Party pursuant to
any Operative Agreement, other than Permitted Liens and Lessor Liens.
Lessee shall promptly notify Lessor in the event it receives actual
knowledge that a Lien other than a Permitted Lien or Lessor Lien has
occurred with respect to any such Property, any component thereof, any
Modification other than Non-Integral Equipment, the Rent or any other such
amount, 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) perfected Liens
subject only to Permitted Liens and Lessor Liens. At all times subsequent
to the Commencement Date respecting any Property, Lessee shall (i) cause a
valid, perfected Lien on each Property to be in place in favor of the
Agent (for the benefit of the Secured Parties), subject to no Lien other
than Permitted Liens and Lessor Liens 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 or Agent, 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 NEITHER LESSOR NOR THE AGENT IS AND NEITHER SHALL BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED
TO LESSEE, OR TO ANYONE HOLDING ANY 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 OR
THE AGENT IN AND TO ANY PROPERTY.
15
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,
Insurance Requirement, Imposition or utility charge payable pursuant to Section
4.1 or 13.2 or any Lien, attachment, levy, encumbrance or encroachment (other
than the Liens created pursuant to the Operative Agreements in favor of the
Agent for the benefit of the Financing Parties) 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,
each Property, the Agent and each Primary Financing Party; (b) there shall not
be imposed a Lien (other than Permitted Liens and Lessor Liens) on any Property
that would subject any part of any Property or any Rent to a material risk of
being sold, forfeited, lost or deferred or a material reduction in value (with
respect to a reduction in value, after taking into account actual reserves
designated for payment of the applicable loss on Lessee's books and any bonds
provided by Lessee to protect the Lessor's Interest and the interest of the
Financing Parties from the applicable loss; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on the Agent or any Primary Financing Party for failure
to comply therewith; (d) to the extent a payment or any portion thereof, which
is the subject of a permitted contest, was paid with Advances, then upon receipt
of any payment, refund or other receipt of proceeds pursuant to a permitted
contest, such amount shall be delivered to the Agent for distribution pursuant
to Section 8.7 (b)(i) of the Participation Agreement; and (e) 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 each Financing
Party an Officer's Certificate certifying as to the matters set forth in clauses
(a), (b) and (c) of this Section 13.1. Lessor shall execute and deliver to
Lessee such authorizations and other documents as may reasonably be required in
connection with any such contest and, if reasonably requested by Lessee, shall
join as a party therein; provided, that all reasonable costs and expenses
actually incurred by Lessor shall be payable by Lessee.
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, Insurance Requirements 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, Insurance
Requirements and industry standards.
16
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 any Property or respecting the Equipment and such
other public liability coverages as are in accordance with Lessee's historical
practices and if required by the Mortgage Note Lender other than Wachovia Bank,
National Association, earthquake insurance acceptable to the Mortgage Note
Lender. 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
name the Agent and each Primary Financing Party 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 arising in connection
with any Property before any contribution by any insurance which the Agent or
any Primary Financing Party may have in force. In the operation of each
Property, Lessee shall comply with applicable workers' compensation laws and
protect the Agent and each Primary Financing Party 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 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 companies
conducting business similar to that conducted by Lessee; provided, that
Lessee shall not be required to maintain builders' risk insurance during
construction of any Modifications that have construction costs equal to or
less than of $250,000, provided, however, all contractors, subcontractors
and any other party providing services related to such construction shall
be bonded and insured pursuant to industry standards appropriate for the
work to be performed. The policies shall name Lessee as the insured and
the policies themselves or by endorsement shall name Lessor and the Agent
(on behalf of the Secured Parties) as additional insureds, mortgagees and
loss payees, as their interests may appear; provided, so long as no Lease
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 directly
to Lessee.
(b) If, during the Term with respect to each 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
17
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 Property. During the Term, Lessee shall, in the operation and use of
each Property, maintain workers' compensation insurance compliant with all
Legal Requirements and 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.
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 the Agent, each Primary
Financing Party) with certificates, in form and substance reasonably
satisfactory to the Agent, 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) the Agent
and each Primary Financing Party as additional insureds (in the case of
liability insurance) and mortgagees and loss payees (in the case of
property/hazard, builders' risk and flood insurance) 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 with respect to property and casualty insurance
and at least A- or better rating by A.M. Best's Key Rating Guide with
respect to all other insurance and, in all cases, a rating by S&P or
Xxxxx'x of A or A2, respectively, or higher. Lessee shall cause such
certificates to include a provision for ten (10) days' advance written
notice by the insurer to the Agent (on behalf of the Agent and each
Primary Financing Party) 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 the Agent and each Primary
Financing Party) so requests, Lessee shall deliver to the Agent (on behalf
of the Agent and each Primary Financing Party) 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 case may be, have
waived 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 the Agent and each
Primary Financing Party to the extent of payments made to any such Person
under any such policy in accordance with the Operative Agreements.
(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
18
Article XIV, except that Lessor may carry separate liability insurance at
Lessor's sole cost.
(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 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 with respect to a Property), and prior to the
occurrence and continuation of a Lease Default or Lease 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 Property
Proceeds or other 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 any
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 Lease Default or Lease
Event of Default shall have occurred and be continuing or if such Property
Proceeds shall exceed $1,000,000, then such Property Proceeds shall be
paid directly to Lessor to be held for the benefit of the Secured Parties
and, provided no Lease Default or Lease Event of Default has occurred and
is continuing, to be disbursed pursuant to this Article XV and if received
by Lessee or any Primary Financing Party shall be held in trust for
Lessor, and shall be paid over by such party to the Agent and held in
accordance with the terms of this paragraph (a). Except as expressly set
forth in this Section 15.1, all such amounts in excess of $1,000,000 held
by the Agent hereunder for the benefit of the Secured Parties on account
of any condemnation proceeds, award, compensation or insurance proceeds
either paid directly to Lessor or turned over to Lessor shall be delivered
to the Agent and held for the benefit of the Secured Parties as security
for the performance of Lessee's obligations hereunder and under the other
Operative Agreements. When all such obligations of Lessee with respect to
such matters (and all other obligations of Lessee which should have been
satisfied pursuant to the Operative Agreements as of such date) have been
satisfied or expressly waived, all amounts so held by Lessor shall be paid
over to Lessee. If a Property is sold pursuant to this Lease, the Agent
has received Termination Value with respect to each such Property and no
Lease Default or Lease Event of Default has occurred and is continuing,
the Property Proceeds held by the Agent with respect to such Property,
shall be delivered by the Agent to the purchaser of such Property at the
time of such sale subject to the foregoing conditions.
19
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any Property Proceeds on account
of any such Casualty or Condemnation and shall pay all expenses thereof.
At Lessee's reasonable request, Lessor and the Agent shall participate in
any such proceeding, action, negotiation, prosecution or adjustment;
provided, that all reasonable costs and expenses actually incurred by
Lessor or the Agent in connection therewith shall be payable by the
Lessee. Lessor and Lessee agree that this Lease shall control the rights
of Lessor and Lessee in and to any such Property Proceeds or other
condemnation proceeds, award, compensation or insurance payment.
(c) If Lessee shall receive notice or otherwise have knowledge of a
Casualty where the cost to repair, restore or replace the damaged portion
of any Property is estimated to equal or exceed ten percent (10%) of the
Property Cost of such Property, Lessee shall give notice thereof to Lessor
promptly after Lessee's receipt of such notice or gaining of such
knowledge. In the event such a Casualty 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; provided, however, if no Lease Default or Lease
Event of Default shall have occurred and be continuing and if the cost to
repair, restore or replace the damaged portion of such Property is less
than thirty-five percent (35%) of the Property Cost of such Property and,
Lessee delivers within thirty (30) days of such Casualty written notice to
Lessor that Lessee intends to repair and restore the portion of such
Property affected by such Casualty, then Lessee may repair and restore the
portion of such Property affected by such Casualty pursuant to the terms
and conditions of the Operative Agreements, including without limitation
Sections 10.1, 11.1 and 15.1 of this Lease and Property Proceeds held by
Lessor pursuant to this Section 15.1 with respect to such loss shall be
made available for the Restoration in accordance with Section 15.1(e)
hereof. If Lessee shall receive notice of a Condemnation of any Property
or any portion thereof or interest therein where the fair market value of
such Property shall be diminished by more than ten percent (10%), Lessee
shall give notice thereof to Lessor promptly after Lessee's receipt of
such notice. In the event such a Condemnation occurs (regardless of
whether Lessee gives notice thereof), then Lessee shall be deemed to have
delivered a Termination Notice for the affected Property to Lessor and the
provisions of Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation with respect to any
Property (regardless of whether notice thereof must be given pursuant to
paragraph (c)), this Lease shall terminate with respect to such 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) (i) If, pursuant to this Section 15.1, Lessee does not deliver a
notice to terminate this Lease pursuant to clause (d) above or is
not required to deliver or deemed to have delivered a notice to
terminate this Lease pursuant to clause (c) above, then this Lease
shall continue in full force and effect following a Casualty or
Condemnation with respect to any affected Property, Lessee shall, at
its sole cost and expense (subject to reimbursement in accordance
with this Section 15.1)
20
promptly and diligently repair any damage to any affected Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1 (the "Restoration"), using
the as-built plans and specifications, in accordance with industry
standards, for the applicable Improvements, Equipment, Fixtures or
other components of such Property other than Non-Integral Equipment
(as modified to give effect to (x) any subsequent Modifications or
to give effect to such Modifications to be made as a part of such
Restoration as may be permitted under Section 11.1, (y) any previous
Condemnation affecting such Property and (z) all applicable Legal
Requirements, Insurance Requirements and industry standards), so as
to restore such Property to the same or a greater fair market value,
and such that such Property shall after such Restoration have the
same or greater useful life and utility for its intended use as
existed immediately prior to such Casualty or Condemnation (assuming
all maintenance and repair standards have been satisfied) and such
that the fair market value of the Property is not less than the
Termination Value for such Property and the security interests of
Lessor and the Primary Financing Parties in the Property are not
adversely affected. In such event, title to such Property shall
remain with Lessor.
(ii) If the Property Proceeds are received by or turned over
to the Agent, in accordance with Section 15.1(a), in respect of any
Casualty or Condemnation, and if a Lease Default or Lease Event of
Default shall not have occurred and be continuing, then the Agent
shall make available for expenses related to the Restoration of any
affected Property all such Property Proceeds Lessor receives
pursuant to this Lease with respect to such Property provided that
such Restoration shall be accomplished as provided in Section
15.1(g) so long as such Restoration can, in the reasonable judgment
of the Agent, be completed by the earlier of (A) nine (9) months
after the date of the Casualty or Condemnation or (B) the date two
hundred forty (240) days prior to the Expiration Date, and in such a
manner so that such Property will, on the date upon which
Restoration was completed or was supposed to be completed, have a
value (as determined in the reasonable judgement of the Agent) at
least equal to its value prior to the Casualty or Condemnation.
(iii) Unless a Default or Event of Default shall have occurred
and be continuing, any such Property Proceeds held by the Agent for
the Restoration shall be made available by the Agent (or at Lessor's
election by a disbursing or escrow agent who shall be selected by
Lessor and whose fees shall be paid by Lessee) from time to time as
requested by Lessee, but no more frequently than once a month as the
Restoration progresses, upon delivery to the Agent of the following:
(A) evidence reasonably satisfactory to the Agent of the estimated
cost of the Restoration; (B) funds (or assurances reasonably
satisfactory to the Agent that such funds are available) sufficient
in addition to such Proceeds to complete and fully pay for the
Restoration; and (C) such architect's certificates, waivers of lien,
contractor's sworn statements, title insurance endorsements, plats
of survey and such other evidence of cost, payment and performance
as the Agent may
21
reasonably require and approve. No payment made from such Property
Proceeds prior to the final completion of the Restoration shall
exceed ninety percent (90%) of the value of the work performed from
time to time, as such value shall be determined by the Agent in its
reasonable judgment. Prior to commencement of the work, and from
time to time thereafter, if so requested by the Agent, Lessee shall
deposit with Lessor an amount of funds in excess of such Property
Proceeds which, together with such Property Proceeds, shall at all
times be at least sufficient in the reasonable judgment of the Agent
to pay the entire unpaid cost of the Restoration, free and clear of
all Liens or claims of Lien other than the Liens created pursuant to
the Operative Agreements. If requested by the Agent, Lessee shall
execute such documentation at the time the initial deposit is made
to subject all such deposit amounts to a perfected security interest
in favor of the Agent for the Secured Parties, which perfected
security interest shall be assigned to the Agent. Further, if
requested by the Agent, a legal opinion shall be issued in favor of
the Agent and the Primary Financing Parties opining as to the
perfected status of such security interest. All such documentation
and legal opinion shall be in form and substance reasonably
satisfactory to the Agent. Unless a Lease Default or Lease Event of
Default shall have occurred and be continuing, any surplus which may
remain out of such Property Proceeds held by the Agent after payment
of all costs of the Restoration shall be paid to Lessee. At Lessee's
reasonable request, Lessor shall deliver to the Agent and the Agent
will deposit any Proceeds held by the Agent for the Restoration into
an interest-bearing account over which the Agent has sole
possession, authority and control, and otherwise on terms and
conditions reasonably satisfactory to the Agent.
(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 any
affected Property a Casualty occurs with respect to such Property or
Lessee receives notice of a Condemnation with respect to any Property, and
following such Casualty or Condemnation, such Property cannot reasonably
be restored, repaired or replaced on or before the day two hundred forty
(240) days prior to the Expiration Date or the date nine (9) months after
the occurrence of such Casualty or Condemnation to the same or a greater
fair market value, and such that such Property shall after such repair or
restoration have the same or greater useful life and utility for its
intended purpose 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 or
otherwise) and pay Lessor the Termination Value for such Property. If a
Lease Default or a Lease Event of Default has occurred and is continuing
and any Loans, Lessor Advances or other amounts are owing with respect
thereto, then any Excess Proceeds (to the extent of any such Loans, Lessor
Advances or other amounts owing with respect thereto) shall be paid to the
Agent, held as security for the performance of the
22
Lessee Secured 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, Lessor 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 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 $100,000,
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 such Property pursuant to Section 16.1, if applicable, or, at
Lessee's sole cost and expense, promptly during such thirty (30) day period
deliver to Lessor notice of intention to remediate, and thereafter promptly and
diligently undertake and 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 compliance 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 reasonably acceptable to Agent 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 compliance with applicable
Environmental Law. Not less than sixty (60) days and not more than one hundred
eighty (180) days prior to any time that Lessee elects to cease operations with
respect to any Property or to remarket any Property pursuant to the Sale Option
pursuant to Section 20.1 hereof or pursuant to any other provision of any
Operative Agreement, Lessee at its expense shall cause to be delivered to the
Agent a Phase I environmental site assessment (or an update of a prior Phase I
environmental site assessment) respecting such Property recently prepared (no
more than thirty (30) days prior to the date of delivery) by an independent
recognized professional acceptable to the Agent in its reasonable discretion and
in form, scope and content satisfactory to the Agent in its reasonable
discretion. Notwithstanding any other provision of any Operative Agreement, if
Lessee fails to comply with the foregoing obligation regarding the Phase I
environmental site assessment, Lessee shall be obligated to 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 or other designee of Lessee.
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15.3 Notice of Environmental Matters.
Promptly, but in any event within fifteen (15) 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. 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 ten (10) days of receipt, copies of all 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 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 any 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 such
Property upon the payment in full of the Termination Value for such Property in
accordance with the terms of the Operative Agreements 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 applicable 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.
(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, subject to the penultimate
paragraph of this Section 17.1, (each a "Lease Event of Default") shall occur
and be continuing:
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(a) Lessee shall fail to make payment of (i) any Basic Rent (except
as set forth in clause (ii)) within three (3) days after the same has
become due and payable or (ii) any Termination Value on the date any such
payment is due and payable, 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)) within
three (3) days after receipt of written notice that such payment is due
and payable;
(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 pursuant to Sections
5.4 or 8A.9 of the Participation Agreement or (ii) Lessee shall fail to
observe or perform any term, covenant, obligation or condition of Lessee
under this Lease or any other Operative Agreement to which Lessee is a
party other than those set forth in Sections 17.1(a), (b), (c) or (d)(i)
hereof, and such failure shall continue for thirty (30) days after the
Lessee either has received written notice thereof or a Responsible Officer
of Lessee shall have actual knowledge thereof; provided, that in the case
of this clause (ii), if such failure is not capable of remedy by the
payment of money or otherwise within such thirty (30) day period but may
be remedied with further diligence and if Lessee has and continues to
pursue diligently such remedy, then Lessee shall be granted additional
time to pursue such remedy for such period as the Agent may determine in
its reasonable discretion; provided, further, in no event shall such
additional period exceed ninety (90) days or (iii) any representation or
warranty or statement of fact made by Lessee set forth in this Lease or in
any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or therewith
shall be false or inaccurate in any material way when made, provided,
however, with respect to this Section 17.1(d)(ii) and (iii) to the extent
Agent exercises discretion in making the determination that an Event of
Default has occurred, Agent shall exercise such discretion in a
commercially reasonable manner;
(e) [Reserved];
(f) The Lessee or any Subsidiary of the Lessee shall (i) fail to
make any payment, whether of principal, premium or interest, in an
aggregate amount equal to or greater than $5,000,000 in respect of any
Indebtedness (other than any Indebtedness pursuant to the Operative
Agreements) of, or guaranteed by, the Lessee or any Subsidiary when due
(whether at scheduled maturity or by required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to
such indebtedness; or (ii) any other default under any agreement or
instrument relating to any Indebtedness of the
25
Lessee or any of its Subsidiaries, or any other event (including a default
in payment of a lesser amount than that specified above if such default
would cause or permit acceleration as described in this clause) shall
occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default
or event (A) is to permit the acceleration of the maturity of any such
indebtedness in an aggregate principal amount equal to or greater than
$20,000,000 or (B) results in the acceleration of the maturity of any such
indebtedness in an aggregate principal amount equal to or greater than
$20,000,000;
(g) The liquidation or dissolution of Lessee, or the suspension of
the business of Lessee, or the filing by Lessee of a voluntary petition or
an answer seeking reorganization, arrangement, receivership, readjustment
of its debts, insolvency, liquidation, dissolution, winding-up or for any
other relief under the Bankruptcy Code, or under any other insolvency act
or law, state or federal, now or hereafter existing, or any other action
of the Lessee indicating its consent to, approval of or acquiescence in,
any such petition or proceeding; the application by the Lessee for, or the
appointment by, consent or acquiescence of the Lessee of a receiver, a
conservator, a trustee or a custodian of the Lessee for all or a
substantial part of its property; the making by the Lessee of any general
assignment for the benefit of creditors; the inability of the Lessee or
the admission by the Lessee in writing of its inability to pay its debts
as they mature or the Lessee is generally not paying its debts and other
financial obligations as they become due and payable; or the Lessee taking
any corporate action to authorize any of the foregoing;
(h) The filing of an involuntary petition against the Lessee in
bankruptcy or seeking reorganization, arrangement, readjustment of its
debts, insolvency, liquidation, dissolution, winding-up or for any other
relief under the Bankruptcy Code, or under any other insolvency act or
law, state or federal, now or hereafter existing; or the involuntary
appointment of a receiver, a conservator, a trustee or a custodian of the
Lessee for all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any
substantial part of the property of the Lessee, and the continuance of any
of such events for sixty (60) days undismissed or undischarged;
(i) [Reserved];
(j) The entering of any order in any proceedings against the Lessee
or any Subsidiary of the Lessee decreeing the dissolution, divestiture or
split-up of the Lessee or any Subsidiary of the Lessee and such order
remains in effect for more than sixty (60) days; provided to the extent
such does not have a Material Adverse Effect (determined in a commercially
reasonable manner), Subsidiaries of Lessee may be dissolved, provided,
however, with respect to this Section 17.1(j) to the extent Agent
exercises discretion in making the determination that an Event of Default
has occurred, Agent shall exercise such discretion in a commercially
reasonable manner
(k) Any Environmental Violation shall have occurred relating to any
Property and either (i) Lessee shall, not within thirty (30) days after
Lessee has actual knowledge
26
of such Environmental Violation, either deliver to Lessor a Termination
Notice with respect to such Property pursuant to Section 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly during such
thirty (30) day period deliver to Lessor notice of intention to remediate
or (ii) such Environmental Violation is reasonably expected to exceed
$500,000 in remediation costs;
(l) [Reserved];
(m) A final judgment or judgments for the payment of money shall be
rendered by a court or courts against the Lessee or any Subsidiary of the
Lessee in excess of $20,000,000 in the aggregate above amounts covered by
insurance, and (i) the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not
be procured, within thirty (30) days from the date of entry thereof, or
(ii) the Lessee or any such Subsidiary shall not, within said period of
thirty (30) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal, or (iii) such judgment or judgments shall
not be discharged (or provisions shall not be made for such discharge)
within thirty (30) days after a final decision has been reached with
respect to such appeal and the related stay has been lifted;
(n) The Lessee or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of $2,000,000
which it shall have become liable to pay to the PBGC or shall fail to pay
within thirty (30) days after becoming due an amount or amounts
aggregating in excess of $2,000,000 which it shall have become liable to
pay to a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
Liabilities in excess of $2,000,000 shall be filed under Title IV of ERISA
by the Lessee or any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause a
trustee to be appointed to administer any such Pension Plan or Pension
Plans or a proceeding shall be instituted by a fiduciary of any such
Pension Plan or Pension Plans against the Lessee or any member of the
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Pension Plan or Pension Plans
must be terminated;
(o) (i) As a result of one (1) or more transactions after the date
of this Lease, any "person" or "group" of persons shall have "beneficial
ownership" (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, and the applicable rules and regulations
thereunder) of fifty percent (50%) or more of the outstanding common stock
of Lessee; or (ii) without limiting the generality of the foregoing,
during any period of twelve (12) consecutive months, commencing after the
date of this Lease, individuals who at the beginning of such period of
twelve (12) months were directors of Lessee shall cease for any reason to
constitute a majority of the board of directors of Lessee (excluding for
such calculation, directors who die or retire (for reasons other than any
sale, transfer of assets or merger involving Lessee) during any
27
period of twelve (12) consecutive months so long as such directors are
replaced by the surviving directors during such period), provided, that
the relationships among the respective shareholders of Lessee on the
Initial Closing Date shall not be deemed to constitute all or any
combination of them as a "group" for purposes of clause (o)(i), provided,
it shall not cause an Event of Default pursuant to this Section 17.1(o) in
the event Lessee is acquired by or merged with and does not survive the
merger a company with a rating by S&P of BB+ or higher or a rating by
Xxxxx'x of Ba1 or higher, provided, further, such successor shall execute
and deliver documents in form and substance reasonably acceptable to the
Agent which reaffirm its obligations as Lessee pursuant to the Operative
Agreements;
(p) (i) Any Basic Document to which Lessee is a party shall cease to
be in full force and effect or (ii) any other Operative Agreement to which
Lessee is a party shall cease to be in full force and effect and such
could reasonably be expected to have a Material Adverse Effect, provided,
however, with respect to this Section 17.1(p) to the extent Agent
exercises discretion in making the determination that an Event of Default
has occurred, Agent shall exercise such discretion in a commercially
reasonable manner; or
(q) Any failure by Lessee to comply with any of its obligations
under the Cash Collateral Agreement and such failure shall continue for
ten (10) days after the earlier of (i) a Responsible Officer of Lessee has
knowledge of such noncompliance or (ii) the date upon which Lessor or the
Agent first provides notice thereof;
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, accelerate the
date for payment by Lessee of the Termination Value for all Properties or
terminate this Lease by giving Lessee five (5) days written notice of such
acceleration or termination, as the case may be, (provided, notwithstanding the
foregoing, this Lease shall be deemed to be automatically terminated, unless
otherwise accelerated, without the giving of notice upon the occurrence of a
Lease Event of Default under Sections 17.1(g), (h) or (j)), 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.
Upon the occurrence of any event described in Sections 17.1(c), (d), (f),
(k), (m), (n) or (o) or, if applicable, during any cure period, if any, the
Lessee may on or before the date such event would otherwise constitute a Lease
Event of Default to avoid such Event of Default or, if applicable, during the
cure period, if any, provided with respect to such Lease Event of Default, by
providing written notice to the Agent and each Primary Financing Party and
confirming receipt thereof which notice states that Lessee shall purchase all,
but not less than all, of the Properties for the aggregate Termination Value for
all Properties within two (2) Business Days (the "Immediate Purchase Notice"),
then such event which would otherwise constitute a Lease Event of Default shall
be deemed not to constitute a Lease Event of Default so long as Lessee is in
strict compliance (in the Lessor's judgment) with this Section 17.1. Immediately
upon receipt
28
of the Immediate Purchase Notice, the Loans, Lessor Advances and all other
obligations of the Lessee pursuant to the Operative Agreements shall be deemed
to be due and owing and the Agent and the Primary Financing Parties may
immediately apply all Cash Collateral to the aggregate Termination Value for all
Properties. Within five (5) Business Days of the delivery of the Immediate
Purchase Notice, Lessee shall deliver to the Agent the aggregate Termination
Value for all Properties less (to the extent such is not duplicative) the amount
of Cash Collateral, if any, that has been previously applied to such Termination
Value. Upon receipt in full of the aggregate Termination Value for all
Properties, Lessor and the Agent shall diligently work to convey title to the
Properties to Lessee and release the Liens on the Properties created by the
Operative Agreements pursuant to the applicable documentation set forth in
Section 20.2 of the Lease.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE AS SUPPLEMENTED BY THE
LEASE SUPPLEMENT. A POWER OF SALE MAY ALLOW AGENT, AS AGENT FOR LESSOR AND THE
PRIMARY FINANCING PARTIES, TO TAKE EACH PROPERTY AND SELL EACH PROPERTY WITHOUT
GOING TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE AND CONTINUANCE OF A
LEASE EVENT OF DEFAULT.
17.2 Surrender of Possession.
If a Lease Event of Default shall have occurred after the Commencement
Date and be continuing, and the Lessee's right to possession of the Property has
been foreclosed or terminated pursuant to Section 17.1 in any other manner, in
any event in accordance with any applicable Law, Lessee shall, upon thirty (30)
days written notice, surrender to Lessor possession of each Property. Lessor may
enter upon and repossess each Property 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 not
required to be surrendered to Lessor under this Lease from each Property. Such
removed property shall be deemed abandoned and 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 each
Property 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 after the Commencement
Date 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.
29
17.4 Damages.
The parties hereto agree that upon the occurrence of an Event of Default
damages would be hard to estimate and the parties agree that this damages
section and the damages set forth in Section 17.6 are a good estimate of the
damages. Neither (a) the termination of this Lease as to any Property pursuant
to Section 17.1; (b) the repossession of any Property; nor (c) the failure of
Lessor to relet any Property, 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 after the Commencement Date and
be continuing and this Lease is terminated 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. In the event
this Lease is not terminated pursuant hereto, 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 and until the end of the Term hereof 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 the Agent's and any Primary Financing Party'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.
(a) Without limiting any other remedies set forth in this Lease, Lessor
and Lessee agree that Lessee has granted, pursuant to Section 7.1(b) hereof and
the Lease Supplement its right, title and interest in and to the Properties and
this Lease to the Agent for the benefit of the Secured Parties, a Lien against
each Property as trustee WITH POWER OF SALE for each Property, and that, upon
the occurrence and during the continuance of any Lease Event of Default, the
Agent 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
Lessee's interest (or cause such interest to be foreclosed) in all or any part
of any Property for use in satisfaction of the Lessee Secured Obligations.
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(b) Upon the occurrence and during the continuance of a Lease Event of
Default, the Agent, in lieu of or in addition to exercising any power of sale
hereinabove given, may proceed by a suit or suits in equity or at law, whether
for a foreclosure hereunder, or for the sale of such interest in one or more of
the Properties, against Lessee for the Termination Value or for the appointment
of a receiver pending any foreclosure hereunder or the sale of such interest in
such Property or Properties, or for the enforcement of any other appropriate
legal or equitable remedy.
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 (including, without limitation, the Make -
Whole Amount). 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 which is not, in
each of the foregoing cases, Non-Integral 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 and the other Operative Agreements
(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 17.3,
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 one or more Properties, as such testing or work is deemed
appropriate in the reasonable judgment of Lessor, and shall indemnify and hold
harmless Lessor and each other Indemnified Person therefrom. Lessee shall pay
all amounts referenced in the immediately preceding sentence within five (5)
Business Days of any request by Lessor for
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such payment. Except as otherwise provided in the Operative Agreements, Lessee
shall not be responsible for additional incidents caused by actions by third
parties other than Lessee, Lessee's Affiliates and any of their agents,
employees, designees and assignees occurring after sale and conveyance of such
Property so long as none of Lessee, any of its Affiliates or and any of their
agents, employees, designees and assignees is in possession of, occupies or has
any right, title or interest in or to such Property. The provisions of this
Section 17.7 shall not limit the obligations of Lessee under any Operative
Agreement regarding indemnification obligations, environmental testing,
remediation and/or work.
17.8 Waiver of Certain Rights.
If this Lease shall be terminated pursuant to Section 17.1, Lessee waives,
to the fullest extent permitted by Law, (a) any notice of re-entry or the
institution of legal proceedings to obtain re-entry or possession; (b) any right
of redemption, re-entry or possession; (c) the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt; and
(d) the benefit of all appraisement, valuation, stay, extension and redemption
laws now or hereafter in force and all rights of marshalling in the event of any
sale of the Properties or any portion thereof or interest therein; and (e) 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 all of Lessee's right, title and interest in and to each agreement
executed by Lessee in connection with the acquisition, testing, use, 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, testing, use, 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.
17.11 Lessee's Right to Cure by Purchase of the Properties.
Notwithstanding anything in this Lease or in any of the other Operative
Agreements to the contrary, upon the occurrence and continuance of a Lease
Default or Lease Event of Default, Lessee may, but shall not be obligated to,
cure any such Lease Default or Lease Event of Default, as the case may be, by
purchasing the Properties, such purchase to be consummated as provided in
Section 20.2.
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17.12 Limitation Regarding Certain Lease Events of Default.
Notwithstanding anything contained herein or in any other Operative
Agreement to the contrary, upon the occurrence and during the continuance of a
Lease Event of Default under Sections 17.1(d)(ii) or 17.1(d)(iii) of the Lease
arising solely as a result of a violation of Sections 5.3(k), 5.3(u), 5.3(x),
6.2(z), 8A.1 (relating solely to the "going concern" qualification of the
Lessee's financial statements by its independent certified public accountants),
in each case of the Participation Agreement and with respect to Section
17.1(d)(i) of the Lease, arising solely as a result of a violation of Section
8A.9 of the Participation Agreement, attributable solely to a Lease Event of
Default pursuant to Section 17.1(f)(ii)(A), or 17.1(f)(ii)(B) if the Primary
Financing Parties and their Affiliates, either collectively or individually,
have the ability to control (by vote or otherwise) whether such Indebtedness
will become due prior to its stated maturity or Section 17.1(o) (collectively, a
"Limited Recourse Event of Default"), the maximum aggregate amount of Lessee's
obligations attributable solely to a Limited Recourse Event of Default
(including without limitation any liability of amounts due pursuant to Section
3.2 of the Cash Collateral Agreement or Section 7.3(c) and 7.3(d) of the
Participation Agreement, pursuant to Section 11.1 (c) or (g) or 11.4 of the
Participation Agreement for enforcement costs or losses arising as a result of
such Limited Recourse Event of Default, or pursuant to Section 11.2 of the
Participation Agreement related to transfer taxes incurred as a result of a
disposition of any Property following and resulting from a Limited Recourse
Event of Default) shall be an amount equal to the Maximum Residual Guarantee
Amount (net of Remarketing Expense for such Property) for each affected
Property, provided, this Section 17.12 shall not in any way limit the liability
of the Lessee in the event of any other Lease Event of Default other than a
Limited Recourse Event of Default or any indemnity payment to any Indemnified
Person not resulting from or related to the occurrence of such Limited Recourse
Event of Default, including without limitation (except as expressly stated
above), the indemnities set forth in Sections 11.1 through 11.5 of the
Participation Agreement and such indemnity payment shall not be included in the
calculation set forth above. Lessee nonetheless acknowledges and agrees that
even though the maximum aggregate recovery from Lessee is limited as aforesaid,
neither Lessor's nor any other Financing Party's right of recovery from the
Properties (as opposed to any recovery from Lessee) is so limited and Lessor or
any other applicable Financing Party shall be entitled to recover 100% of the
amounts owed to Lessor or such other Financing Party in accordance with the
Operative Agreements from its interest in the Properties, including without
limitation, to the extent not duplicative, 100% of the aggregate Termination
Value for all Properties. Proceeds from any such disposition of the Properties
after the occurrence of a Limited Recourse Event of Default shall be distributed
in accordance with Section 8.7 of the Participation Agreement. In the event any
Property is remarketed by Lessor after the occurrence and solely as a result of
a Limited Recourse Event of Default, then Lessee shall have a nonexclusive right
to deliver bids for the purchase of any Property to Lessor for one hundred
twenty (120) days commencing on the date the applicable Limited Recourse Event
of Default occurred (such period the "LRED Period"). Promptly upon, but in no
event more than three (3) Business Days after the occurrence of a Limited
Recourse Event of Default, Lessee shall pay the Maximum Residual Guarantee
Amount to the Agent and shall promptly surrender, or cause to be surrendered,
(but in not event greater than thirty (30) days after the date of such Limited
Recourse Event of Default) each Property in accordance with the terms and
conditions of Section 10.1, and thereafter Lessee shall have an additional sixty
(60) days when Lessee may, upon reasonable advance notice to Lessor and the
consent of Lessor (which consent shall not be unreasonably or delayed) enter the
applicable
33
Properties for the purpose of removing the Non-Integral Equipment in accordance
with Sections 10.1 and 11.1 of the Lease. If Lessee should fail to timely pay
the Maximum Residual Guarantee Amount, Lessee shall purchase (or cause its
designee to purchase) all such Properties in accordance with Section 20.2 on the
date one (1) Business Day after the Maximum Residual Guaranty Amount was due
pursuant to the preceding sentence. Lessor may reject any and all bids (and
retain the Properties) with respect to any Property which is less than the
Limited Recourse Amount and may solicit and obtain bids by giving Lessee written
notice to that effect; provided, however, that notwithstanding the foregoing,
Lessor may not reject any bid submitted by Lessee during the LRED Period if such
bid would result in the full repayment of the Limited Recourse Amount for such
Property, and represents a bona fide offer from one (1) or more third party
purchasers. If the highest price (net of Remarketing Expense) which a
prospective purchaser or the prospective purchasers shall have offered to pay
for any such Property during the LRED Period would not result in the full
payment of the Limited Recourse Amount for the Properties or if such bid does
not represent a bona fide offer from one (1) or more third parties or if there
are no bids, then Lessor shall have the option to retain the Properties.
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 each
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
reasonable out-of-pocket costs and expenses so incurred (including without
limitation fees and expenses of counsel), together with interest thereon at the
interest rates referenced in Section 3.3(b)(iii) from the date on which such
sums or expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand
and constitutes part of the obligations secured by this Lease.
ARTICLE XIX
19.1 [Reserved].
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 but shall be
required to exercise its Purchase Option or the Sale Option with respect to the
entire Property, which shall be an entire Lease Supplement.
34
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
Not less than one hundred eighty (180) days and no more than three hundred
sixty (360) days prior to the Expiration Date, Lessee shall give the Agent (on
behalf of Lessor) irrevocable written notice (the "Election Notice") that Lessee
is electing (a) to purchase any of the Properties on the Expiration Date or (b)
with respect to an Election Notice given in connection with the Expiration Date
only, the option to remarket any of the Properties to a Person other than Lessee
or any Affiliate of Lessee and cause a sale of such Properties to occur on the
applicable Election Date pursuant to the terms of Section 22.1 (the "Sale
Option"). In addition, Lessee may during the Term, provide an Election Notice
not less that sixty (60) and not more than more than two hundred forty (240)
days prior to any Payment Date irrevocably electing to purchase a Property on
such Payment Date (the Expiration Date or, respecting the Purchase Option only,
any such Payment Date being hereinafter referred to as the "Election Date")
referenced in the Election Notice that it will purchase one or more Properties
for the respective Termination Values (the "Early Purchase Option" and together
with the option set forth in (a) above, the "Purchase Option"). If Lessee does
not give an Election Notice indicating the Purchase Option or the Sale Option at
least one hundred eighty (180) days and not more than three hundred sixty (360)
days prior to the Expiration Date, then Lessee shall be deemed to have elected
for the Purchase Option to apply on the Expiration Date.
If any Property has not been fully repaired after a Casualty pursuant to
Article XV or 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 purchase
such Property pursuant to Section 20.2.
20.2 Lessee Purchase Option.
Provided, that the Election Notice has been appropriately given specifying
the Purchase Option or Lessee shall be deemed to have elected the Purchase
Option, Lessee shall purchase all the Properties on the applicable Election Date
at a price equal to the Termination Value for all the Properties (which the
parties do not intend to be a "bargain" purchase price) or with respect to the
Early Purchase Option, Lessee shall purchase the applicable Property on the
applicable Election Date at a price equal to the Termination Value for such
Property.
Subject to Section 19.2, in connection with any termination of this Lease
with respect to any Property pursuant to 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 all the Properties (or any individual Property
pursuant to Section 16.2 or the Early Purchase Option) and upon tender by Lessee
of the amounts set forth in Section 16.2(b) or this Section 20.2, as applicable
(which could include the application of the Cash Collateral as permitted by the
terms and conditions of the Operative Agreements), Lessor shall execute,
acknowledge (where required) and deliver to Lessee, at Lessee's cost and
expense, each of the following: (a) a special or limited warranty Deed or the
local law equivalent conveying each such Property (to the extent it is real
property)
35
to Lessee (or Lessee's designee) free and clear of the Lien of this Lease, the
Liens of the Security Documents and any other Operative Agreements and any
Lessor Liens; (b) a Xxxx of Sale conveying each such Property (to the extent it
is personal property) to Lessee (or Lessee's designee) free and clear of the
Lien of this Lease, the Liens of the Credit Documents and any other Operative
Agreements and any Lessor Liens; (c) any real estate tax affidavit required by
law to be executed by Lessor and filed in order to record the Deed; (d) FIRPTA
affidavits and (e) such other documents as the Lessee or the Agent shall
reasonably request, in form and substance acceptable to each of Lessee and the
Agent in each party's sole discretion, to facilitate the conveyance of the
Properties in accordance with the Operative Agreements. All of the foregoing
documentation must be in form and substance reasonably satisfactory to Agent and
Lessee. Each such Property shall be conveyed to Lessee (or Lessee's designee)
"AS-IS, WHERE-IS" and in then present physical condition.
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 or the
Agent, as appropriate, the sum of all reasonable costs and expenses incurred by
any such party in connection with the election by Lessee to exercise its
Purchase Option and all Rent 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 Lease Default or Lease 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 all the Properties (with respect to which the
Sale Option has been elected) on the Expiration Date (all as specified in
the Election Notice), in accordance with the provisions of Section 22.1
hereof. The Expiration Date 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 and not more
than one hundred eighty (180) days prior to the Sale Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental site
assessment (or an update of a Phase I environmental site assessment
previously delivered) (with respect to which the Sale Option has been
elected) for each Property recently prepared (no more than thirty (30)
days old prior to the date of delivery) by an independent recognized
professional reasonably acceptable to Lessor and in form, scope and
content reasonably satisfactory to Lessor. In the event that Lessor shall
not have received each such environmental site assessment by the date
sixty (60) days prior to the Sale Date or in the event that any 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
such Properties. Upon receipt of such payment, Lessor shall transfer to
Lessee all of Lessor's right, title and interest in and to all such
Properties in accordance with the second paragraph of Section 20.2.
36
ARTICLE XXI
21.1 [Reserved].
ARTICLE XXII
22.1 Sale Procedure.
(a) If Lessee properly elects the Sale Option, during the Marketing
Period, Lessee, on behalf of Lessor, shall obtain bids for the cash
purchase of any of the Properties (with respect to which the Sale Option
has been elected) 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 the
Agent the sum of all reasonable costs and expenses incurred by Lessor
and/or the Agent (as the case may be) in connection with such sale of the
Properties, all Rent then due and payable or accrued under this Lease
and/or any other Operative Agreement.
Lessor may reject any and all bids (and retain such Property) with
respect to any Property which is less than the Limited Recourse Amount and
may solicit and obtain bids by giving Lessee written notice to that
effect; provided, however, that notwithstanding the foregoing, Lessor may
not reject any bid submitted by Lessee if such bid would result in the
full repayment of the Limited Recourse Amount for such Property, and
represents a bona fide offer from one (1) or more third party purchasers.
If the highest price (net of Remarketing Expense) which a prospective
purchaser or the prospective purchasers shall have offered to pay for any
such Property on the Sale Date would not result in the full payment of the
Limited Recourse Amount for such Property or if such bid does not
represent a bona fide offer from one (1) or more third parties or if there
are no bids, then Lessee shall pay the Maximum Residual Guarantee Amount
and shall surrender, or cause to be surrendered, each such Property in
accordance with the terms and conditions of Section 10.1 each on or before
the Expiration Date and if Lessee should fail to timely pay such amount
Lessee shall purchase (or cause its designee to purchase) all such
Properties on the Expiration Date in accordance with Section 20.2.
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, the Liens of the Credit Documents and any other
Operative Agreement and any Lessor Liens, 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. To effect
37
such transfer and assignment, Lessor shall execute, acknowledge (where
required) and deliver to the appropriate purchaser each of the following:
(a) a special or limited warranty Deed or its local law equivalent
conveying each such Property or the local law equivalent (to the extent it
is real property) to the appropriate purchaser free and clear of the Lien
of this Lease, the Liens of the Credit Documents and the other Operative
Agreements 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 Liens
of the Credit Documents and the other Operative Agreements and any Lessor
Liens; (c) any real estate tax affidavit required by law to be executed by
Lessor and filed in order to record the Deed; (d) FIRPTA affidavits and
(e) such other documents as the Lessee or the Agent shall reasonably
request, in form and substance acceptable to each of Lessee and the Agent
in each party's sole discretion, to facilitate the conveyance of the
Properties in accordance with the Operative Agreements. All of the
foregoing documentation must be in form and substance reasonably
satisfactory to Lessor and the Agent. Lessee shall surrender each such
Property 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. Neither Lessor nor Lessee shall
take or fail to take any action which would have the effect of
unreasonably discouraging bona fide third party bids for any Property. If
any Property is neither (i) sold on the Sale Date in accordance with the
terms of this Section 22.1, nor (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 Lessee shall pay the
Maximum Residual Guarantee Amount and shall surrender, or cause to be
surrendered, each such Property in accordance with the terms and
conditions of Section 10.1 each on or before the Expiration Date and if
Lessee should fail to timely pay such amount Lessee shall purchase (or
cause its designee to purchase) all such Properties on the Expiration Date
in accordance with Section 20.2.
(b) In the event Lessee shall have elected the Sale Option, Lessee
hereby unconditionally promises to pay to Lessor on the Sale Date, the
Maximum Residual Guarantee Amount. On the Sale Date if (x) Lessor receives
the aggregate Termination Value for any of the Properties from one (1) or
more third party purchasers and (y) Lessor and such other parties receive
all other amounts specified in the last sentence of the first paragraph of
Section 22.1(a) then Lessee may retain any excess above Termination Value.
If one or more of the Properties is 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 all Basic Rent and Supplemental Rent (exclusive of a payment
of the Termination Value) and, without duplication, all other amounts then
due and owing pursuant to the Operative Agreements and, without
duplication, an amount equal to the Maximum Residual Guarantee Amount for
each Property so retained. Any payment of the foregoing amounts described
in this Section 22.1(b) shall be made, without duplication, together with
a payment of all Rent and all other amounts referenced in the last
sentence of the first paragraph of Section 22.1(a).
38
(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 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.
22.2 Application of Proceeds of Sale.
In the event Lessee receives any proceeds of sale of any Property, such
proceeds shall be deemed to have been received in trust on behalf of Lessor, and
Lessee shall promptly remit such proceeds to Lessor. Lessor shall apply the
proceeds of sale of any Property in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as the
case may be) for the payment of all Remarketing Expense; and
(b) SECOND, in accordance with Section 8.7 of the Participation
Agreement.
22.3 Indemnity for Excessive Wear.
If the proceeds of the sale described in Section 22.1 with respect to all
the Properties shall be less than the Limited Recourse Amount with respect to
all 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 any Property 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.
39
22.4 Appraisal Procedure.
For determining the Fair Market Sales Value of one or more 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 applicable Operative Agreement, and if they cannot agree within ten (10)
days, then two (2) qualified appraisers, one (1) chosen by Lessee and one (1)
chosen by Lessor, shall mutually agree thereupon, but if either party shall fail
to choose an appraiser within twenty (20) days after notice from the other party
of the selection of its appraiser, then the appraisal by such appointed
appraiser shall be binding on Lessee and Lessor. If the two (2) appraisers
cannot agree within twenty (20) days after both shall have been appointed, then
a third appraiser shall be selected by the two (2) appraisers or, failing
agreement as to such third appraiser within thirty (30) days after both shall
have been appointed, by the American Arbitration Association. The decisions of
the three (3) appraisers shall be given within twenty (20) days of the
appointment of the third appraiser and the decision of the appraiser most
different from the average of the other two (2) shall be discarded and such
average shall be binding on Lessor and Lessee; provided, that if the highest
appraisal and the lowest appraisal are equidistant from the third appraisal, the
third appraisal shall be binding on Lessor and Lessee. The fees and expenses of
the appraiser appointed by Lessee shall be paid by Lessee; the fees and expenses
of the appraiser appointed by Lessor shall be paid by Lessor (such fees and
expenses not being indemnified pursuant to Section 11 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 all 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 Maximum Residual Guarantee Amount, the sale proceeds, if
any, remaining after the payment of 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 one or more 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 any Property after
the expiration or earlier termination of this Lease (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
40
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
paid to the Agent and applied ratably to the Primary Financing Parties based on
their relative amounts of the then outstanding Property Cost for such Property.
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 (unless
such Property is conveyed to Lessee) and nothing contained herein shall be read
or construed as preventing Lessor from maintaining a suit for possession of such
Property or exercising any other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss.
During the Term, unless Lessee shall not be in actual possession of any
Property 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 each of the Agent, the
Credit Lenders, the Mortgage Lenders and the 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.
41
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 and the Agent of the execution of
such sublease and shall provide a copy of such sublease to Lessor and the
Agent. As of the date of each Lease Supplement, Lessee shall lease the
Property 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 or any Primary
Financing Party and subject to the other provisions of this Section 25.2,
Lessee may sublet any Property or any portion thereof (i) only to any
Wholly-Owned Entity of Lessee or (ii) to any other Person provided, all
subleasing pursuant to this subsection (ii) shall be done on market terms
for a term not to exceed the Term hereof and shall in no way diminish the
fair market value, useful life or utility of such Property.
(c) No sublease (referenced in this Section 25.2 or otherwise) or
other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder and
Lessee shall remain directly and primarily liable under this Lease as to
such Property, or portion thereof, so sublet. The term of any such
sublease shall not extend beyond the Term. Each sublease shall be
expressly subject and subordinate to this Lease. Subject to a
subordination, non disturbance and attornment agreement acceptable to
Lessor and upon request, Lessor shall agree that it will recognize any
sublease entered into on market terms to an entity which would fulfill
Lessor's customary credit requirements (in Lessor's discretion) for the
obligations undertaken by the sublessee in the sublease and which is not
otherwise prohibited by this Lease, in the event this Lease is terminated
prior to the Expiration Date.
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.
42
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 or (c) any Note.
ARTICLE XXVIII
28.1 [Reserved].
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 Section 12.2 of the Participation
Agreement.
ARTICLE XXX
30.1 Miscellaneous.
Anything contained in this Lease to the contrary notwithstanding, all
claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease or of
such provision or of any other provision hereof in any other jurisdiction.
43
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 INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), 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.
30.8 Memoranda of Lease and Lease Supplement.
This Lease shall not be recorded; provided, Lessor and Lessee shall
promptly record a memorandum of this Lease and each Lease Supplement (in
substantially the form of Exhibit A 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, and as required under applicable law to sufficiently evidence this
Lease and any such Lease Supplement in the applicable real estate filing
records.
44
30.9 Allocations between the Lenders and Lessor.
Notwithstanding any other term or provision of this Lease to the contrary,
the allocations of the proceeds of each Property and any and all other Rent and
other amounts received hereunder shall be subject to the inter-creditor
provisions among the Primary Financing Parties contained in the Intercreditor
Agreement and the other Operative Agreements (or as otherwise agreed among the
Primary Financing Parties 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 each Property (and in
no circumstance to the Agent, the Primary Financing Parties 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 or 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 or otherwise for the satisfaction of 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.
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY
APPLICABLE LAW, WAIVES 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 by Lessor to the Agent pursuant to the terms
of the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(e) and
8.6 of the Participation Agreement, (b) all notices to be given to Lessor shall
be given to the Agent and (c) all notices to be given by Lessor may be given by
the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE.
THE PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION AND VENUE ARE HEREBY INCORPORATED BY REFERENCE
HEREIN, MUTATIS MUTANDIS.
45
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 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
46
OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY
APPLICABLE LAW.
30.15 Restriction On Collateralization.
Except to the extent required or permitted by the Operative Agreements,
Lessor shall not mortgage, pledge, hypothecate or encumber its interest in this
Lease, any Lease Supplement or any Property.
[signature pages follow]
47
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.
WACHOVIA DEVELOPMENT CORPORATION, as Lessor
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[signature pages continue]
CYPRESS SEMICONDUCTOR CORPORATION, as Lessee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[signature pages continue]
Receipt of this original counterpart of
the foregoing Lease is hereby
acknowledged as the date hereof
WACHOVIA BANK, NATIONAL ASSOCIATION,
as the Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[signature pages end]
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
___________, 200___ between WACHOVIA DEVELOPMENT CORPORATION, a North Carolina
corporation, as lessor (the "Lessor"), and Cypress Semiconductor Corporation, 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 June 27, 2003, among Lessee, Lessor, the various financial
institutions and other institutional investors which are parties hereto from
time to time as Credit Lenders, the various financial institutions and other
institutional investors which are parties hereto from time to time as Mortgage
Lenders, Wachovia Bank, National Association, as the Agent for the Primary
Financing Parties and respecting the Security Documents, as the Agent for the
Secured Parties, as such may be amended, modified, extended, supplemented and/or
restated from time to time.
SECTION 2. The Property. Attached hereto as Schedule 1 is the description
of the Leased Property, a schedule of Improvements attached hereto as Schedule
1-B and a legal description of the Land 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 which are not
Non-Integral Equipment made to the Land shall be deemed to be titled to the
Lessor and subject to the terms and conditions of the Lease and this Lease
Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust, security
agreement and financing statement under the laws of the state in which the
Leased Property is situated. The maturity date of the obligations secured hereby
shall be ___________ unless extended to not later than ___________.
For purposes of provisions of the Lease and this Lease Supplement related
to the creation and enforcement of the Lease and this Lease Supplement as a
security agreement and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor (Lessee herein) and of the
secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are set forth on the signature pages hereto.
A-1
A carbon, photographic or other reproduction of the Lease and this Lease
Supplement or of any financing statement related to the Lease and this Lease
Supplement shall be sufficient as a financing statement for any of the purposes
referenced herein.
SECTION 3. Use of Leased Property. At all times during the Term with
respect to the Property, Lessee will comply with all obligations under and (to
the extent no Lease Event of Default exists and provided, that such exercise
will not impair the value of the Leased Property) shall be permitted to exercise
all rights and remedies under, all operation and easement agreements and related
or similar agreements applicable to the Leased Property.
SECTION 4. Ratification; Incorporation by Reference. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. Original Lease Supplement. The single executed original of this
Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART"
on the signature page thereof and containing the receipt of the Agent therefor
on or following the signature page thereof shall be the original executed
counterpart of this Lease Supplement (the "Original Executed Counterpart"). To
the extent that this Lease Supplement constitutes chattel paper, as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction, no security interest in this Lease Supplement may be created
through the transfer or possession of any counterpart other than the Original
Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE LEASED
PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. Mortgage; Power of Sale. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee hereby grants a Lien or deed of trust interest in and against the Leased
Property WITH POWER OF SALE, for the benefit of the Secured Parties, 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. Lessee Acknowledgement. Lessee hereby acknowledges that
Lessor's rights under the Lease and this Lease Supplement have been assigned to
the Agent.
A-2
SECTION 9. 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.
For purposes of the provisions of this Lease Supplement concerning this
Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
A-3
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.
WACHOVIA DEVELOPMENT CORPORATION, as Lessor
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Wachovia Development Corporation
c/o Wachovia Securities
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxxxxx Xxxxxxxxx
CYPRESS SEMICONDUCTOR CORPORATION, as Lessee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: _________________________
[Signature Pages Continued]
A-4
Receipt of this original counterpart of
the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
WACHOVIA BANK, NATIONAL ASSOCIATION, as
the Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Wachovia Bank, National Association
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxxxx
[Signatures Pages End]
A-5
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-6
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-7
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-8
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
(Land)
A-9
EXHIBIT B TO THE LEASE
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
This Instrument Has Been Prepared By and
Should Be Mailed to:
Xxxxx & Xxx Xxxxx, PLLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxx Xxxxxxxx Xxxxxxx
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 _____________, 200___, is by and between WACHOVIA
DEVELOPMENT CORPORATION, a North Carolina corporation (hereinafter referred to
as "Lessor") having an address at c/o Wachovia Securities, One Wachovia Center,
------- 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attn:
Xxxxxxxxx Xxxxxxxxx and CYPRESS SEMICONDUCTOR CORPORATION, a Delaware
corporation (hereinafter referred to as "Lessee") having an address at 0000
Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000-0000, Attention:
________________.
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 June 27, 2003 (as such may be
amended, modified, extended, supplemented and/or restated from
B-1
time to time, "Lease") and a Lease Supplement No. _____ between Lessor and
Lessee dated as of ______________ (the "Lease Supplement").
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated. The maturity date of the obligations secured
thereby shall be ___________, unless extended to not later than ___________.
For purposes of provisions of the Lease and the Lease Supplement related
to the creation and enforcement of the Lease and the Lease Supplement as a
security agreement and a fixture filing, Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor (Lessee herein) and of the
secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are as set forth on the signature pages
hereof. A carbon, photographic or other reproduction of this Memorandum or of
any financing statement related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
2. Term, Renewal, Extension and Purchase Option. The term of the Lease for
the Property ("Term") commenced as of __________, 200__ and shall end as of
_________, 200__, unless the Term is extended or earlier terminated in
accordance with the provisions of the Lease. The tenant has a purchase option
under the Lease.
3. Tax Payer Numbers.
Lessor's tax payer number: __________________.
Lessee's tax payer number: __________________.
4. Mortgage; Power of Sale. Without limiting any other remedies set forth
in the Lease, in the event that a court of competent jurisdiction rules that the
Lease constitutes a mortgage, deed of trust or other secured financing as is the
intent of the parties, then Lessor and Lessee agree that Lessee has granted,
pursuant to the terms of the Lease and the Lease Supplement, a Lien against the
Property WITH POWER OF SALE, and that, upon the occurrence and during the
continuance of any Lease Event of Default, Lessor shall have the power and
authority, to the extent provided by law, after prior notice and lapse of such
time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Property.
5. Effect of Memorandum. The purpose of this instrument is to give notice
of the Lease and the Lease Supplement and their respective terms, covenants and
conditions to the same extent as if the Lease and the Lease Supplement were
fully set forth herein. This Memorandum shall not modify in any manner the
terms, conditions or intent of the Lease or the Lease Supplement and the parties
agree that this Memorandum is not intended nor shall it be used to interpret the
Lease or the Lease Supplement or determine the intent of the parties under the
Lease or the Lease Supplement.
B-2
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B-3
IN WITNESS WHEREOF, the parties hereto have duly executed this instrument
as of the day and year first written.
LESSOR:
WACHOVIA DEVELOPMENT CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Wachovia Development Corporation
c/o Wachovia Securities
One Wachovia Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxxxxx Xxxxxxxxx
LESSEE:
CYPRESS SEMICONDUCTOR CORPORATION
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
Cypress Semiconductor Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: _________________________
B-4
SCHEDULE 1
(Description of Property)
B-5
[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 WACHOVIA DEVELOPMENT CORPORATION, a North Carolina
corporation, on behalf of the corporation.
[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 CYPRESS SEMICONDUCTOR CORPORATION, a Delaware corporation,
on behalf of the corporation.
[Notarial Seal]
------------------------------------------
Notary Public
My commission expires: ____________
B-6
