LEASE
between
THE DOMINICK'S REALTY TRUST 1997,
as Lessor,
and
DOMINICK'S FINER FOODS, INC.
as Lessee
___________________________
Dated as of August 19, 1997
___________________________
This Lease is subject to a security interest in favor of The Chase
Manhattan Bank, as agent (the "Agent"), under a Credit Agreement,
dated as of August 19, 1997 among The Dominick's Realty Trust 1997,
the Lenders, and the Agent, as amended or supplemented. This Lease
has been executed in several counterparts. To the extent, if any,
that this Lease constitutes chattel paper (as such term is defined in
the Uniform Commercial Code of the State of Illinois or Indiana), no
security interest in this Lease 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
Page
SECTION 1. DEFINITIONS ................................. 1
1.1 Defined Terms ..................................... 1
SECTION 2. PROPERTY AND TERM............................ 1
2.1 Property .......................................... 1
2.2 Lease Term ........................................ 1
2.3 Title ............................................. 1
2.4 Lease Supplements ................................. 1
SECTION 3. RENT ........................................ 1
3.1 Rent .............................................. 1
3.2 Supplemental Rent ................................. 2
3.3 Performance on a Non-Business Day ................. 2
SECTION 4. UTILITY CHARGES ............................. 2
4.1 Utility Charges ................................... 2
SECTION 5. QUIET ENJOYMENT ............................. 3
5.1 Quiet Enjoyment ................................... 3
SECTION 6. NET LEASE ................................... 3
6.1 Net Lease; No Setoff; Etc. ........................ 3
6.2 No Termination or Abatement ....................... 4
SECTION 7. OWNERSHIP OF PROPERTY........................ 4
7.1 Ownership of the Property ......................... 4
SECTION 8. CONDITION OF PROPERTY........................ 6
8.1 Condition of the Property ......................... 6
8.2 Possession and Use of the Property ................ 6
8.3 Construction on Store Land Property ............... 6
SECTION 9. COMPLIANCE .................................. 6
9.1 Compliance with Legal Requirements and Insurance
Requirements ...................................... 6
9.2 Environmental Matters ............................. 7
SECTION 10. MAINTENANCE AND REPAIR.................... 7
10.1 Maintenance and Repair; Return .................... 7
10.2 Right of Inspection. .............................. 9
10.3 Environmental Inspection .......................... 9
SECTION 11. MODIFICATIONS ............................. 9
11.1 Modifications, Substitutions and Replacements ..... 9
SECTION 12. TITLE ...................................... 10
12.1 Liens. ............................................ 10
12.2 Grants and Releases of Easements .................. 11
SECTION 13. PERMITTED CONTESTS.......................... 11
13.1 Permitted Contests Other Than in Respect of
Impositions ....................................... 11
SECTION 14. INSURANCE ............................... 12
14.1 Public Liability and Workers'Compensation Insurance 12
14.2 Hazard and Other Insurance ........................ 12
14.3 Coverage .......................................... 12
SECTION 15. CONDEMNATION AND CASUALTY................... 13
15.1 Casualty and Condemnation ......................... 13
SECTION 16. LEASE TERMINATION........................... 15
16.1 Termination upon Certain Events ................... 15
16.2 Procedures ........................................ 15
SECTION 17. DEFAULT .................................... 15
17.1 Lease Events of Default ........................... 15
17.2 Final Liquidated Damages .......................... 17
17.3 Lease Remedies .................................... 17
17.4 Waiver of Certain Rights .......................... 19
17.5 Assignment of Rights Under Contracts .............. 19
17.6 Remedies Cumulative ............................... 19
SECTION 18. LESSOR'S RIGHT TO CURE...................... 19
18.1 Lessor's Right to Cure Lessee's Lease Defaults .... 19
SECTION 19. LEASE TERMINATION........................... 20
19.1 Provisions Relating to Lessee's Termination of this
Lease or Exercise of Purchase Option .............. 20
19.2 Aggregate Tranche A Percentage .................... 20
SECTION 20. PURCHASE OPTION............................. 20
20.1 Purchase Option ................................... 20
20.2 Maturity Date Purchase Option ..................... 21
20.3 Obligation to Purchase All Properties ............. 21
SECTION 21. SALE OF PROPERTY............................ 21
21.1 Sale Procedure .................................... 21
21.2 Application of Proceeds of Sale ................... 22
21.3 Indemnity for Excessive Wear ...................... 22
21.4 Appraisal Procedure ............................... 22
21.5 Certain Obligations Continue ...................... 23
SECTION 22. HOLDING OVER ............................... 23
22.1 Holding Over ...................................... 23
SECTION 23. RISK OF LOSS ............................... 23
23.1 Risk of Loss ...................................... 23
SECTION 24. SUBLETTING AND ASSIGNMENT................... 24
24.1 Subletting and Assignment ......................... 24
24.2 Subleases ......................................... 24
SECTION 25. ESTOPPEL CERTIFICATES....................... 24
25.1 Estoppel Certificates ............................. 24
SECTION 26. NO WAIVER .................................. 24
26.1 No Waiver ......................................... 24
SECTION 27. ACCEPTANCE OF SURRENDER..................... 25
27.1 Acceptance of Surrender ........................... 25
SECTION 28. NO MERGER OF TITLE.......................... 25
28.1 No Merger of Title ................................ 25
SECTION 29. NOTICES .................................... 25
29.1 Notices ........................................... 25
SECTION 30. MISCELLANEOUS .............................. 26
30.1 Miscellaneous ..................................... 26
30.2 Amendments and Modifications ...................... 27
30.3 Successors and Assigns ............................ 27
30.4 Headings and Table of Contents .................... 27
30.5 Counterparts ...................................... 27
30.6 GOVERNING LAW ..................................... 27
30.7 Limitations on Recourse ........................... 27
30.8 Memorandum of Lease ............................... 27
30.9 Priority .......................................... 28
30.10 Ground Lease ...................................... 28
Exhibits
Exhibit A Lease Supplement
Exhibit B Memorandum of Lease
LEASE (this "Lease"), dated as of August 19, 1997, between
THE DOMINICK'S REALTY TRUST 1997, a Delaware business trust, having
its principal office at Wilmington Trust Company, Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, as
lessor (the "Lessor"), and DOMINICK'S FINER FOODS, INC., a Delaware
corporation, having its principal office at 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, as lessee (the "Lessee").
In consideration of the mutual agreements herein contained,
and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS
1 Defined Terms. Capitalized terms used herein but not
otherwise defined in this Lease shall have the respective meanings
specified in Annex A to the Participation Agreement dated as of the
date hereof among Lessee, Lessor, Agent, the Investor and the Lenders
named therein, as such Participation Agreement may be amended,
supplemented or otherwise modified from time to time.
2. PROPERTY AND TERM
1 Property. Subject to the terms and conditions
hereinafter set forth and contained in the respective Lease
Supplement relating to each Property, Lessor hereby leases to Lessee,
and Lessee hereby leases from Lessor, each Property.
2 Lease Term. Each Property is leased for the Term,
unless extended or earlier terminated in accordance with the
provisions of this Lease.
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, the existing state of title
(including, without limitation, the Permitted Exceptions) and all
applicable Legal Requirements. Lessee shall in no event have any
recourse against Lessor for any defect in title to any Property.
4 Lease Supplements. On each Property Closing Date,
Lessee and Lessor shall each execute and deliver a Lease Supplement
for the Property to be leased on such date in substantially the form
of Exhibit A hereto and thereafter such Property shall be subject to
the terms of this Lease.
3. RENT
1 Rent. (a) On each applicable Payment Date occurring
after the termination of the Construction Period for a Construction
Period Property, on each applicable Payment Date with respect to a
Completed Property, on each applicable Payment Date occurring after
the termination of the Store Land Period for a Store Land Property
and on any date when this Lease shall terminate with respect to a
Property, Lessee shall pay the Basic Rent attributable to such
Property.
(a) 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 or accounts
at such bank or banks or to such other Person or in such other manner
as Lessor shall from time to time direct.
(b) Neither Lessee's inability or failure to take
possession of all, or any portion, of the Property when delivered by
Lessor, nor Lessor's inability or failure to deliver all or any
portion of the Property to Lessee, whether or not attributable to any
act or omission of Lessee or any act or omission of Lessor, or for
any other reason whatsoever, shall delay or otherwise affect Lessee's
obligation to pay Rent in accordance with the terms of this Lease.
2 Supplemental Rent. (a) Lessee shall pay to Lessor or
the Person entitled thereto any and all Supplemental Rent promptly as
the same shall become due and payable, and if Lessee fails to pay any
Supplemental Rent, Lessor shall have all rights, powers and remedies
provided for herein or by law or equity or otherwise in the case of
nonpayment of Basic Rent. Lessee shall pay to Lessor as Supplemental
Rent, among other things, on demand, to the extent permitted by
applicable Legal Requirements, interest at the applicable Overdue
Rate on any installment of Basic Rent not paid when due for the
period for which the same shall be overdue and on any payment of
Supplemental Rent not paid when due or demanded by Lessor for the
period from the due date or the date of any such demand, as the case
may be, until the same shall be paid. The expiration or other
termination of 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
or any other Operative Agreement, 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.
(a) Lessee shall make a payment of Supplemental Rent equal
to the Maximum Residual Guarantee Amount in accordance with Section
21.1(c).
3 Performance on a Non-Business Day. If any payment is
required hereunder on a day that is not a Business Day, then such
payment shall be due on the next succeeding Business Day, unless, in
the case of payments based on the Eurodollar Rate, the result of such
extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately
preceding Business Day.
4. UTILITY CHARGES
1 Utility Charges. Lessee shall pay, or cause to be
paid, all charges for electricity, power, gas, oil, water, telephone,
sanitary sewer service and all other rents and utilities used in or
on each Property during the Term. Lessee shall be entitled to
receive any credit or refund with respect to any utility charge paid
by Lessee and the amount of any credit or refund received by Lessor
on account of any utility charges 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 utilities
imposed with respect to the Property for a billing period during
which this Lease expires or terminates shall be adjusted and prorated
on a daily basis between Lessor and Lessee, and each party shall pay
or reimburse the other for each party's pro rata share thereof.
5. QUIET ENJOYMENT
1 Quiet Enjoyment. So long as no Lease Event of Default
shall have occurred and be continuing, Lessee shall peaceably and
quietly have, hold and enjoy each Property for the Term, free of any
claim or other action by Lessor or anyone rightfully claiming by,
through or under Lessor.
6. NET LEASE
1 Net Lease; No Setoff; Etc. This Lease shall
constitute a net lease and, notwithstanding any other provision of
this Lease, it is intended that Basic Rent and Supplemental Rent
shall be paid without counterclaim, setoff, deduction or defense of
any kind and without abatement, suspension, deferment, diminution or
reduction of any kind, and Lessee's obligation to pay all such
amounts is absolute and unconditional. The obligations and
liabilities of Lessee hereunder shall in no way be released,
discharged or otherwise affected for any reason, including, without
limitation, to the maximum extent permitted by law: (a) any defect
in the condition, merchantability, design, construction, quality or
fitness for use of any portion of any Property, or any failure of any
Property to comply with all Legal Requirements, including any
inability to occupy or use any Property by reason of such non-
compliance; (b) any damage to, abandonment, loss, contamination of or
Release from or destruction of or any requisition or taking of any
Property or any part thereof, including eviction; (c) any
restriction, prevention or curtailment of or interference with any
use of any Property or any part thereof, including eviction; (d) any
defect in title to or rights to any Property or any Lien on such
title or rights or on any Property; (e) any change, waiver,
extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by Lessor, Investor,
Agent or any Lender; (f) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like
proceedings relating to Lessee, Lessor, Investor, Agent, any Lender
or any other Person, or any action taken with respect to this Lease
by any trustee or receiver of Lessee, Lessor, Investor, Agent, any
Lender or any other Person, or by any court, in any such proceeding;
(g) any claim that Lessee has or might have against any Person,
including, without limitation, Lessor, Investor, Agent or any Lender;
(h) any failure on the part of Lessor to perform or comply with any
of the terms of this Lease, any other Operative Agreement or of any
other agreement; (i) any invalidity or unenforceability or
disaffirmance against or by Lessee of this Lease or any provision
hereof or any of the other Operative Agreements or any provision of
any thereof; (j) the impossibility of performance by Lessee, Lessor
or both; (k) any action by any court, administrative agency or other
Governmental Authority; any restriction, prevention or curtailment of
or any interference with the construction on or any use of any
Property or any part thereof; or (m) any other occurrence whatsoever,
whether similar or dissimilar to the foregoing, whether or not Lessee
shall have notice or knowledge of any of the foregoing. This Lease
shall be noncancellable by Lessee for any reason whatsoever except as
expressly provided herein, and Lessee, to the extent permitted by
Legal Requirements, waives all rights now or hereafter conferred by
statute or otherwise (except as otherwise expressly provided herein)
to quit, terminate or surrender this Lease, or to any diminution,
abatement or reduction of Rent payable by Lessee hereunder. If for
any reason whatsoever this Lease shall be terminated in whole or in
part by operation of law or otherwise, except as otherwise expressly
provided herein, Lessee shall, unless prohibited by Legal
Requirements, nonetheless pay to Lessor (or, in the case of
Supplemental Rent, to whomever shall be entitled thereto) an amount
equal to each Rent payment at the time and in the manner that such
payment would have become due and payable under the terms of this
Lease if it had not been terminated in whole or in part, and in such
case, so long as such payments are made and no Lease Event of Default
shall have occurred and be continuing, Lessor will deem this Lease to
have remained in effect. Each payment of Rent made by Lessee
hereunder shall be final and, absent manifest error in the
computation of the amount thereof, Lessee shall not seek or have any
right to recover all or any part of such payment from Lessor,
Investor, Agent or any party to any agreements related thereto for
any reason whatsoever. Lessee assumes the sole responsibility for
the condition, use, operation, maintenance, and management of the
Property and Lessor shall have no responsibility in respect thereof
and shall have no liability for damage to the property of Lessee or
any subtenant of Lessee on any account or for any reason whatsoever.
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, reorgan-
ization, liquidation, dissolution, or other proceeding affecting
Lessor, or any action with respect to this Lease which may be taken
by any trustee, receiver or liquidator of Lessor or by any court with
respect to Lessor, except as otherwise expressly provided herein.
Lessee hereby waives all right (i) to terminate or surrender this
Lease, except as otherwise expressly provided herein, or (ii) 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.
7. OWNERSHIP OF PROPERTY
1 Ownership of the 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 (SFAS) No.
13, as amended, (B) Lessor will be treated as the owner and lessor of
the Property and (C) Lessee will be treated as the lessee of the
Property, but (ii) for federal, state and local income tax and all
other purposes (A) this Lease will be treated as a financing
arrangement, (B) the Lenders will be treated as senior lenders making
loans to Lessee in an amount equal to the Loans, which Loans will be
secured by the Property, (C) Lessor will be treated as a subordinated
lender making a loan to Lessee in an amount equal to the Investor
Contribution, which loan is secured by the Property, and (D) Lessee
will be treated as the owner of the Property and will be entitled to
all tax benefits ordinarily available to an owner of property like
the Property for such tax purposes.
(a) Lessor and Lessee further intend and agree that, for
the purpose of securing Lessee's obligations for the repayment of the
above-described loans, (i) this Lease shall also be deemed to be a
security agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code and a real property mortgage
or deed of trust, as applicable; (ii) the conveyance provided for in
Section 2 shall be deemed a grant of a security interest in and a
mortgage lien on the Lessee's right, title and interest in the
Properties (including the right to exercise all remedies as are
contained in the applicable Mortgage and Memorandum of Lease upon the
occurrence of a Lease Event of Default) and all proceeds 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, for the benefit of
the Lessor to secure the Lessee's payment of all amounts owed by the
Lessee under this Lease and the other Operative Agreements and Lessor
holds title to the Properties so as to create and grant a first lien
and prior security interest in each Property (A) pursuant to this
Lease for the benefit of the Agent under the Assignment of Lease, to
secure to the Agent the obligations of the Lessee under the Lease and
(B) pursuant to the Mortgages to secure to the Agent the obligations
of the Lessor under the Mortgages and the Notes; (iii) the possession
by Lessor or any of its agents of notes and such other items of
property as constitute instruments, money, negotiable documents or
chattel paper shall be deemed to be "possession by the secured party"
for purposes of perfecting the security interest pursuant to Section
9-305 of the Uniform Commercial Code; and (iv) notifications to
Persons holding such property, and acknowledgements, receipts or
confirmations from financial intermediaries, bankers or agents (as
applicable) of Lessee shall be deemed to have been given for the
purpose of perfecting such security interest under applicable law.
Lessor and Lessee shall, to the extent consistent with this Lease,
take such actions as may be necessary to ensure that, if this Lease
were deemed to create a security interest in the Properties in
accordance with this Section, such security interest would be deemed
to be a perfected security interest of first priority under
applicable law and will be maintained as such throughout the Basic
Term. Nevertheless, Lessee acknowledges and agrees that none of
Lessor, Investor, the Trust Company, Agent, or any Lender has
provided or will provide tax, accounting or legal advice to Lessee
regarding this Lease, the Operative Agreements or the transactions
contemplated hereby and thereby, or made any representations or
warranties concerning the tax, accounting or legal characteristics of
the Operative Agreements, and that Lessee has obtained and relied
upon such tax, accounting and legal advice concerning the Operative
Agreements as it deems appropriate.
(b) Lessor and Lessee further intend and agree that in the
event of any insolvency or receivership proceedings or a petition
under the United States bankruptcy laws or any other applicable
insolvency laws or statute of the United States of America or any
State or Commonwealth thereof affecting Lessee or Lessor, the
transactions evidenced by this Lease shall be regarded as loans made
by an unrelated third party lender to Lessee.
8. CONDITION OF PROPERTY
1 Condition of the Property. LESSEE ACKNOWLEDGES AND
AGREES THAT IT IS RENTING EACH PROPERTY "AS IS" WITHOUT
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY LESSOR
AND SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY
PARTIES IN POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN
ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW AND (D) VIOLATIONS
OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF. NONE OF
LESSOR, THE INVESTOR, THE AGENT AND ANY LENDER HAS MADE OR SHALL BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS
OR IMPLIED, INCLUDING THE CONDITION OF ANY IMPROVEMENTS THEREON, THE
SOIL CONDITION, OR ANY ENVIRONMENTAL OR HAZARDOUS MATERIAL CONDITION)
OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE,
VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS
FOR USE OF THE 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 NONE OF
LESSOR, THE INVESTOR, THE AGENT AND ANY LENDER SHALL BE LIABLE FOR
ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE OF ANY
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT.
2 Possession and Use of the Property. Each Property
shall be used in a manner consistent with the Agency Agreement and,
after the Completion Date for the Property, as (i) a retail grocery
store or supermarket, (ii) a distribution facility, (iii) a strip
center, including outlots located within such Property, provided that
(A) such center is anchored by a retail grocery store or supermarket
and (B) not more than 60% of the retail space in such center,
including outlots, is subleased to unaffiliated third parties or (iv)
an office or other facility used by the Lessee in the normal course
of its operations, as applicable. Lessee shall pay, or cause to be
paid, all charges and costs required in connection with the use of
the Properties. Lessee shall not commit or permit any waste of any
Property or any part thereof.
3 Construction on Store Land Property. Lessee shall
cause the Construction Agent to commence construction and renovation
of the Improvements on each Store Land Property on or prior to the
third anniversary of the Property Closing Date for such Store Land
Property.
9. COMPLIANCE
1 Compliance with Legal Requirements and Insurance
Requirements. Subject to the terms of Section 13 relating to
permitted contests, Lessee, at its sole cost and expense, shall (a)
comply with all Legal Requirements (including all Environmental Laws)
and Insurance Requirements relating to each Property, including the
use, construction, operation, maintenance, repair and restoration
thereof, whether or not compliance therewith shall require structural
or extraordinary changes in the Improvements or interfere with the
use and enjoyment of each Property, and (b) procure, maintain and
comply in all material respects with all licenses, permits, orders,
approvals, consents and other authorizations required for the
construction, renovation, use, maintenance and operation of each
Property and for the use, operation, maintenance, repair and
restoration of the Improvements.
2 Environmental Matters. (a) Promptly upon Lessee's
actual knowledge of the presence of Hazardous Materials in any
portion of a Property in concentrations and conditions that
constitute an Environmental Violation, Lessee shall notify Lessor in
writing of such condition. In the event of such Environmental
Violation, Lessee shall, not later than thirty (30) days after Lessee
has actual knowledge of such Environmental Violation, either deliver
to Lessor and the Agent an Officer's Certificate and a Termination
Notice with respect to such Property pursuant to Section 16.1, if
applicable, or, at Lessee's sole cost and expense, promptly and
diligently undertake any response, clean up, remedial or other action
necessary to remove, cleanup or remediate the Environmental Violation
in accordance with the terms of Section 9.1. 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 an environmental consultant
reasonably acceptable to Lessor a report describing the Environmental
Violation and the actions taken by Lessee (or its agents) in response
to such Environmental Violation, and a statement by the consultant
that such Environmental Violation has been remedied in full
compliance with applicable Environmental Laws.
(a) In addition, Lessee shall provide to Lessor, within
five (5) Business 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 reasonably may be requested by Lessor and the Agent.
10. MAINTENANCE AND REPAIR
1 Maintenance and Repair; Return. (a) Lessee, at its
sole cost and expense, shall maintain each Property in good condition
(ordinary wear and tear excepted) and make all necessary repairs
thereto, of every kind and nature whatsoever, whether interior or
exterior, ordinary or extraordinary, structural or nonstructural or
foreseen or unforeseen, in each case as required by all Legal
Requirements and Insurance Requirements and on a basis reasonably
consistent with the operation and maintenance of retail and
commercial properties comparable in type and location to the
applicable Property subject, however, to the provisions of Section 15
with respect to Condemnation and Casualty.
(a) Lessor shall under no circumstances be required to
build any Improvements on any Property, make any repairs,
replacements, alterations or renewals of any nature or description to
any Property, make any expenditure whatsoever in connection with this
Lease or maintain any Property in any way. Lessor shall not be
required to maintain, repair or rebuild all or any part of any
Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any Property, or
(ii) make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenants,
condition or restriction at any time in effect.
(b) Lessee shall, upon the expiration or earlier
termination of the Term with respect to a Property (unless the
Property is being conveyed to Lessee), vacate, surrender and transfer
such Property to Lessor or a purchaser, at Lessee's own expense, free
and clear of all Liens other than Permitted Liens and Lessor Liens,
in as good condition as they were on its Completion Date, or the date
same became subject to this Lease, whichever is applicable, ordinary
wear and tear excepted, and in compliance with all Legal Requirements
and the other requirements of this Lease (and in any event without
(x) any asbestos installed or maintained in any part of such
Property, (y) any polychlorinated byphenyls (PCBs) in, on or used,
stored or located at such Property, and (z) any other Hazardous
Materials, other than Hazardous Materials used in the normal course
of operations at the Property in compliance with all Legal
Requirements). Lessee shall provide, or cause to be provided or
accomplished, at the sole cost and expense of Lessee, to or for the
benefit of Lessor or a purchaser, at least thirty Business Days prior
to the expiration or earlier termination of the Term with respect to
a Property, each of the following: (i) an endorsement to the title
policy issued for such Property showing (A) record title of the
Lessor in the leasehold or fee estate, as the case may be, subject to
no Liens other than Permitted Liens and Lessor Liens and (B) the
Mortgage as a valid and perfected first lien; (ii) an environmental
assessment for such Property satisfying the requirements set forth in
Section 10.3 below; (iii) an assignment (to the extent assignable) of
all of the Lessee's right, title and interest in and to each
agreement executed by Lessee in connection with the construction,
renovation, development, use, maintenance or operation of such
Property (including all warranty, performance, service and indemnity
provisions); (iv) copies of all Plans and Specifications relating to
the design, construction, renovation or development of such Property;
(v) an assignment (to the extent assignable) of all permits,
licenses, approvals and other authorizations from all Governmental
Authorities in connection with the construction, operation and use of
such Property; (vi) copies of all books and records, and in the case
of any Non-Completed Property, all Budgets and construction
schedules, with respect to the construction, renovation, maintenance,
repair, operation or use of such Property; (vii) in the case of any
Non-Completed Property, evidence satisfactory to Lessor that all
building materials purchased or contracted for purchase which have
not been incorporated into the Improvements at such Property are (A)
owned by Lessor free from any Liens, (B) secured, segregated and
identifiable (and if stored off-site, the location of such place of
storage) and (C) insured under policies in amounts and by insurers
reasonably satisfactory to Lessor; and (viii) in the case of any Non-
Completed Property, evidence satisfactory to Lessor that adequate
provision has been made for the protection of materials stored on-
site and for the protection of the Improvements, to the extent then
constructed, against deterioration and against other loss or damage
or theft. Lessee shall reasonably cooperate with any independent
purchaser of such Property in order to facilitate the ownership and
operation by such purchaser of such Property after such expiration or
earlier termination of the Term. Lessee shall have also paid the
total cost for the completion of all Modifications commenced prior to
such expiration or earlier termination of the Term. The obligation
of Lessee under this Section 10.1(c) shall survive the expiration or
termination of this Lease.
2 Right of Inspection. Lessor may, at reasonable times
and with reasonable prior notice, enter upon, inspect and examine at
its own cost and expense (unless a Lease Event of Default exists, in
which case the out-of-pocket costs and expenses of Lessor shall be
paid by Lessee), any Property, provided that, to the extent
reasonably practicable, such inspection and examination shall be
conducted so as to minimize any disruption to construction or other
operations at such Property. Lessee shall furnish to Lessor
statements, no more than once per year, accurate in all material
respects, regarding the condition and state of repair of each
Property. Lessor shall have no duty to make any such inspection or
inquiry and shall not incur any liability or obligation by reason of
not making any such inspection or inquiry.
3 Environmental Inspection. Not less than 12 months
prior to the Maturity Date (unless Lessee has previously irrevocably
exercised the Purchase Option, Maturity Date Purchase Option or paid
Termination Value with respect to each Property), and not more than
thirty Business Days prior to surrender of possession of a Property,
Lessor shall, at Lessee's sole cost and expense, obtain a report by
an environmental consultant selected by Lessor certifying that each
Property or any portion thereof (i) does not contain Hazardous
Materials under circumstances or in concentrations that could result
in a violation of or liability under any Environmental Law and (ii)
is in compliance with all Environmental Laws. If such is not the
case on either such date, then Lessee shall be deemed to have
irrevocably exercised the Maturity Date Purchase Option pursuant to
Section 20.2.
11. MODIFICATIONS
1 Modifications, Substitutions and Replacements. (a)
So long as no Lease Event of Default has occurred and is continuing,
Lessee, at its sole cost and expense, may at any time and from time
to time make alterations, renovations, improvements and additions to
a Property or any part thereof (collectively, "Modifications");
provided, that: (i) except for any Modification required to be made
pursuant to a Legal Requirement or an Insurance Requirement, no
Modification, individually, or when aggregated with any (A) other
Modification or (B) grant, dedication, transfer or release pursuant
to Section 12.2, shall materially impair the value of such Property
or the utility or useful life of such Property from that which
existed immediately prior to such Modification; (ii) the Modification
shall be performed expeditiously and in a good and workmanlike
manner; (iii) Lessee shall comply with all Legal Requirements
(including all Environmental Laws) and Insurance Requirements
applicable to the Modification, including the obtaining of all
permits and certificates of occupancy, and the structural integrity
of such Property shall not be adversely affected; (iv) to the extent
required pursuant to Section 14.2, Lessee shall maintain or cause to
be maintained builders' risk insurance at all times when a
Modification is in progress; (v) subject to the terms of Section 13
relating to permitted contests, Lessee shall pay all costs and
expenses and discharge any Liens arising with respect to the
Modification; (vi) such Modifications shall comply with Sections 8.2
and 10.1 and shall not change the primary character of such Property;
and (vii) no Improvements shall be demolished, except to the extent
such demolition does not materially impair the value, utility or
useful life of such Property. All Modifications (other than those
that may be readily removed without impairing the value, utility or
remaining useful life of such Property) shall remain part of the
realty and shall be subject to this Lease, and title thereto shall
immediately vest in Lessor. So long as no Lease Event of Default has
occurred and is continuing, Lessee may place upon a Property any
inventory, trade fixtures, machinery, equipment or other property
belonging to Lessee or third parties and may remove the same at any
time during the term of this Lease; provided that such inventory,
trade fixtures, machinery, equipment or other property, or their
respective operations, do not impair the value, utility or remaining
useful life of such Property.
(a) Following the Completion Date with respect to any
Property, Lessee shall notify Lessor of the undertaking of any
construction, repairs or alterations to the Property the cost of
which is anticipated to exceed $500,000. Prior to undertaking any
such construction or alterations, Lessee shall deliver to Lessor (i)
a brief narrative of the work to be done and a copy of the plans and
specifications relating to such work; and (ii) an Officer's
Certificate stating that such work when completed will not materially
impair the value, utility or remaining life of such Property.
Lessor, by itself or its agents, shall have the right, but not the
obligation, from time to time to inspect such construction to ensure
that the same is completed consistent with the plans and
specifications.
(b) Following the Completion Date with respect to any
Property, Lessee shall not without the consent of Lessor undertake
any construction or alterations to such Property (other than
construction or alterations resulting from any Legal Requirement or
any Casualty or Condemnation in accordance with Section 15) if such
construction or alterations cannot, in the reasonable judgement of
Agent, be completed on or prior to the date that is eighteen months
prior to the Expiration Date.
12. TITLE
1 Liens. (a) Lessee agrees that, except as otherwise
provided herein and subject to the terms of Section 13 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 or any Modifications or any
Lien, attachment, levy or claim with respect to the Rent or with
respect to any amounts held by the Agent pursuant to the Credit
Agreement, other than Permitted Liens. Lessee shall promptly notify
Lessor in the event it receives knowledge that a Lien (other than a
Permitted Lien) exists with respect to the Property.
(a) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied,
to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration,
addition, repair or demolition of or to any Property or any part
thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO LESSEE, OR TO ANYONE HOLDING 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 IN AND TO ANY PROPERTY.
2 Grants and Releases of Easements. Provided that no
Lease Event of Default shall have occurred and be continuing and
subject to the provisions of Sections 8, 9, 10 and 11, Lessor hereby
consents to the following actions by Lessee, in the name and stead of
Lessor, but at Lessee's sole cost and expense: (a) the granting
(prior to the Lien of the Mortgage) of easements, licenses,
rights-of-way and other rights and privileges in the nature of
easements reasonably necessary or desirable for the construction,
use, repair, renovation or maintenance of any Property as herein
provided; (b) the release (free and clear of the Lien of the
Mortgage) of existing easements or other rights in the nature of
easements which are for the benefit of any Property; (c) the
dedication or transfer (prior to the Lien of the Mortgage) of
unimproved portions of any Property for road, highway or other public
purposes; (d) the execution of petitions to have any Property annexed
to any municipal corporation or utility district; (e) the execution
by Lessee of agreements with Governmental Authorities or other third
parties required for the initial construction of Improvements or any
Modifications on any Property; (f) the execution of amendments to any
covenants and restrictions affecting any Property; and (g) any other
actions Lessee deems necessary or desirable; provided, that in each
case Lessee shall have delivered to Lessor an Officer's Certificate
stating that: (i) such grant, release, dedication or transfer does
not impair the value or utility or remaining useful life of the
applicable Property, (ii) such grant, release, dedication or transfer
is necessary in connection with the construction, use, maintenance,
alteration, renovation or improvement of the applicable Property,
(iii) Lessee shall remain obligated under this Lease and under any
instrument executed by Lessee consenting to the assignment of
Lessor's interest in this Lease as security for indebtedness, in each
such case in accordance with their terms, as though such grant,
release, dedication or transfer, had not been effected and
(iv) Lessee shall pay and perform any obligations of Lessor under
such grant, release, dedication or transfer. Without limiting the
effectiveness of the foregoing, provided that no Lease Event of
Default shall have occurred and be continuing, Lessor shall, upon the
request of Lessee, and at Lessee's sole cost and expense, execute and
deliver any instruments necessary or appropriate to confirm any such
grant, release, dedication or transfer to any Person permitted under
this Section.
13. PERMITTED CONTESTS
1 Permitted Contests Other Than in Respect of
Impositions. Except to the extent otherwise provided for in Section
12.2 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, or
utility charges payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not
to pay, settle or otherwise compromise any such item, provided that
(a) the commencement and continuation of such proceedings shall
suspend the collection thereof from, and suspend the enforcement
thereof against the applicable Properties, Lessor, the Agent, the
Investor and the Lenders; (b) there shall be no risk of the
imposition of a Lien (other than a Permitted Lien) on any Property
and no part of any Property nor any Rent would be in any danger of
being sold, forfeited, lost or deferred; (c) at no time during the
permitted contest shall there be a risk of the imposition of criminal
liability or civil liability on Lessor, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time,
there shall be a material risk of extending the application of such
item beyond the earlier of the Maturity Date and the Expiration Date
for the applicable Property, then Lessee shall deliver to Lessor an
Officer's Certificate certifying as to the matters set forth in
clauses (a), (b) and (c) of this Section 13.1. Lessor, at Lessee's
sole cost and expense, shall execute and deliver to Lessee such
authorizations and other documents as may reasonably be required in
connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and
expense.
14. INSURANCE
1 Public Liability and Workers' Compensation Insurance.
During the Term, Lessee shall procure and carry, at Lessee's sole
cost and expense, commercial general liability insurance for claims
for injuries or death sustained by persons or damage to property
while on each Property. Such insurance shall be on terms and in
amounts that are no less favorable than insurance maintained by
owners of similar properties, that are in accordance with normal
industry practice. The policy shall be endorsed to name Lessor, the
Trust Company, the Investor, the Agent and the Lenders as additional
insureds. The policy shall also specifically provide that the policy
shall be considered primary insurance which shall apply to any loss
or claim before any contribution by any insurance which Lessor, the
Trust Company, the Agent or the Lenders may have in force. Lessee
shall, in the operation of the Property, comply with the applicable
workers' compensation laws and protect Lessor against any liability
under such laws.
2 Hazard and Other Insurance. (a) During the Term,
Lessee shall keep each Property insured against loss or damage by
fire and other risks on terms and in amounts that are no less
favorable than insurance maintained by owners of similar properties,
that are in accordance with normal industry practice, are in amounts
equal to the actual replacement cost of the Improvements. So long as
no Lease Event of Default exists, any loss payable under the
insurance policy required by this Section will be paid to and
adjusted solely by Lessee, subject to Section 15.
(a) If at any time during the Term the area in which any
Property is located is designated a "flood-prone" area pursuant to
the Flood Disaster Protection Act of 1973 or any amendments or
supplements thereto, then Lessee shall comply with the National Flood
Insurance Program as set forth in the Flood Disaster Protection Act
of 1973, as may be amended. 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.
3 Coverage. (a) Lessee shall furnish Lessor with
certificates showing the insurance required under Sections 14.1 and
14.2 to be in effect and naming Agent, the Lenders, the Lessor, the
Investor, and the Trust Company as an additional insured with respect
to liability insurance and showing the mortgagee endorsement required
by Section 14.3(c). All such insurance shall be at the cost and
expense of Lessee. Such certificates shall include a provision in
which the insurer agrees to provide thirty (30) days' advance written
notice by the insurer to Lessor and the Agent in the event of
cancellation or modification of such insurance that could be adverse
to the interests of Lessor, the Trust Company or the Agent. If a
Lease Event of Default has occurred and is continuing and Lessor so
requests, Lessee shall deliver to Lessor copies of all insurance
policies required by this Lease.
(a) Lessee agrees that the insurance policy or policies
required by this Lease shall include an appropriate clause pursuant
to which such policy shall provide that it will not be invalidated
should Lessee waive, in writing, prior to a loss, any or all rights
of recovery against any party for losses covered by such policy.
Lessee hereby waives any and all such rights against Lessor, the
Trust Company, the Investor, the Agent and the Lenders to the extent
of payments made under such policies.
(b) All insurance policies required by Section 14.2 shall
include a "New York" or standard form mortgagee endorsement in favor
of the Agent.
(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 Lease except that Lessor
may carry separate liability insurance so long as (i) Lessee's
insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under
this Lease to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for
the insurance required by this Lease, shall renew or replace each
policy prior to the expiration date thereof and shall promptly
deliver to Lessor and the Agent certificates for renewal and
replacement policies.
15. CONDEMNATION AND CASUALTY
1 Casualty and Condemnation. (a) Subject to the
provisions of this Section 15 and Section 16 (in the event Lessee
delivers, or is obligated to deliver, a Termination Notice), and
prior to the occurrence and continuation of a Lease Default, Lessee
shall be entitled to receive (and Lessor hereby irrevocably assigns
to Lessee all of Lessor's right, title and interest in) any award,
compensation or insurance proceeds to which Lessee or Lessor may
become entitled by reason of their respective interests in a Property
(i) if all or a portion of such Property is damaged or destroyed in
whole or in part by a Casualty or (ii) if the use, access, occupancy,
easement rights or title to such Property or any part thereof is the
subject of a Condemnation; provided, however, if a Lease Default
shall have occurred and be continuing such award, compensation or
insurance proceeds shall be paid directly to Lessor or, if received
by Lessee, shall be held in trust for Lessor, and shall be paid over
by Lessee to Lessor, and provided further that in the event of any
Casualty or Condemnation, the estimated cost of restoration of which
is in excess of $1,000,000, any such award, compensation or insurance
proceeds shall be paid directly to Lessor, or if received by Lessee,
shall be held in trust for Lessor and shall be paid over by Lessee to
Lessor.
(a) So long as no Lease Event of Default has occurred and
is continuing, Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof; provided that if the
estimated cost of restoration of the Property or the payment on
account of such title defect is in excess of $1,000,000, then Lessor
shall be entitled to participate in any such proceeding or action.
At Lessee's reasonable request, and at Lessee's sole cost and
expense, Lessor and the Agent shall participate in any such
proceeding, action, negotiation, prosecution or adjustment. Lessor
and Lessee agree that this Lease shall control the rights of Lessor
and Lessee in and to any such award, compensation or insurance
payment.
(b) If Lessor or Lessee shall receive notice of a Casualty
or a possible Condemnation of a Property or any interest therein,
Lessor or Lessee, as the case may be, shall give notice thereof to
the other and to the Agent promptly after the receipt of such notice.
(c) In the event of a Casualty or receipt of notice by
Lessee or Lessor of a Condemnation, Lessee shall, not later than
sixty (60) days after such occurrence, deliver to Lessor and the
Agent an Officer's Certificate stating that either (i) (x) such
Casualty is not a Significant Casualty or (y) such Condemnation is
neither a Total Condemnation nor a Significant Condemnation and that
this Lease shall remain in full force and effect with respect to the
applicable Property and, at Lessee's sole cost and expense, Lessee
shall promptly and diligently restore the applicable Property in
accordance with the terms of Section 15.1(e) or (ii) this Lease shall
terminate with respect to the applicable Property in accordance with
Section 16.1.
(d) If pursuant to this Section 15.1, this Lease shall
continue in full force and effect following a Casualty or
Condemnation with respect to the affected Property, Lessee shall, at
its sole cost and expense, promptly and diligently repair any damage
to the applicable Property caused by such Casualty or Condemnation in
conformity with the requirements of Sections 10.1 and 11.1 using the
as-built plans and specifications for the applicable Property (as
modified to give effect to any subsequent Modifications, any
Condemnation affecting the Property and all applicable Legal
Requirements) so as to restore the applicable Property to the same
condition, operation, function and value as existed immediately prior
to such Casualty or Condemnation. In such event, title to the
applicable Property shall remain with Lessor.
(e) In no event shall a Casualty or Condemnation with
respect to which this Lease remains in full force and effect under
this Section 15.1 affect Lessee's obligations to pay Rent pursuant to
Section 3.1.
(f) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term a Casualty
occurs with respect to a Property or Lessee receives notice of a
Condemnation with respect to a Property, and following such Casualty
or Condemnation, such Property cannot reasonably be restored on or
before the date which is twelve months prior to the Maturity Date to
substantially the same condition as existed immediately prior to such
Casualty or Condemnation or before such day such Property is not in
fact so restored, then Lessee shall exercise its Purchase Option with
respect to such Property on the next Payment Date or irrevocably
agree in writing to exercise the Maturity Date Purchase Option with
respect to such Property, and in either such event such remaining
Casualty or Condemnation proceeds shall be paid to the Agent, which
shall pay such funds to Lessee upon the closing of the purchase of
such Property.
16. LEASE TERMINATION
1 Termination upon Certain Events. (a) Lessee shall be
obligated to deliver a written notice in the form described in
Section 16.2(a) (a "Termination Notice") of the termination of this
Lease with respect to any Property (i) within thirty (30) days after
Lessee receives notice of a Total Condemnation with respect to any
such Property or (ii) promptly after the occurrence of a Material
Environmental Violation with respect to any such Property.
(a) If either: (i) Lessee or Lessor shall have received
notice of a Condemnation, and Lessee shall have delivered to Lessor
an Officer's Certificate that such Condemnation is a Significant
Condemnation; or (ii) a Casualty occurs, and Lessee shall have
delivered to Lessor an Officer's Certificate that such Casualty is a
Significant Casualty; or (iii) a Material Environmental Violation
occurs with respect to any Property, and Lessee shall have delivered
to Lessor an Officer's Certificate that this Lease shall terminate
with respect to such Property then, Lessee shall, simultaneously with
the delivery of the Officer's Certificate pursuant to the preceding
clause (i), (ii) or (iii), deliver a Termination Notice with respect
to the affected Property.
2 Procedures. (a) A Termination Notice shall contain:
(i) notice of termination of this Lease with respect to the affected
Property on a date not more than thirty (30) days after Lessor's
receipt of such Termination Notice (the "Termination Date"); (ii) a
binding and irrevocable agreement of Lessee to pay the Termination
Value and purchase such Property on such Termination Date and (iii)
the Officer's Certificate described in Section 16.1(b).
(a) On the Termination Date, Lessee shall pay to Lessor as
Supplemental Rent the Termination Value for the applicable Property,
plus all other amounts owing in respect of such Property (including
Supplemental Rent) theretofore accruing and Lessor shall convey such
Property to Lessee (or Lessee's designee) all in accordance with
Section 19.1.
17. DEFAULT
1 Lease Events of Default. If any one or more of the
following events (each a "Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment of (i) any Basic
Rent within five (5) Business Days after the same has become due
and payable or (ii) any Maximum Residual Guarantee Amount,
Purchase Option Price or Termination Value after the same has
become due and payable; or
(b) Lessee shall fail to make payment of any Supplemental
Rent due and payable within five (5) Business Days after receipt
of notice thereof; or
(c) Lessee shall fail to maintain insurance as required by
Section 14; or
(d) Lessee shall fail to observe or perform any term,
covenant or condition of Lessee under this Lease, the
Participation Agreement, or any other Operative Agreement to
which it is a party (other than those set forth in Section
17.1(a), (b) or (c) hereof) or any representation or warranty 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 and such
failure is not cured, or such inaccuracy is not corrected within
thirty (30) days after receipt of notice thereof, provided that
such thirty (30) day period shall be extended (up to a maximum
period of 180 days) as to failures or inaccuracies which cannot
be cured with the payment of money but are curable though not
reasonably capable of cure within such thirty (30) day period,
provided that Lessee has commenced to cure such failures or
inaccuracies prior to the end of such time period and prosecutes
such cure to completion; or
(e) an Agency Agreement Event of Default shall have
occurred and be continuing; or
(f) Lessee or any Guarantor shall (i) admit in writing its
inability to pay its debts generally as they become due,
(ii) file a petition under the United States bankruptcy laws or
any other applicable insolvency law or statute of the United
States of America or any State or Commonwealth thereof,
(iii) make a general assignment for the benefit of its
creditors, (iv) consent to the appointment of a receiver of
itself or the whole or any substantial part of its property,
(v) fail to cause the discharge of any custodian, trustee or
receiver appointed for Lessee or any Guarantor or the whole or a
substantial part of its property within ninety (90) days after
such appointment, or (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy
laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof;
or
(g) insolvency proceedings or a petition under the United
States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or any State or
Commonwealth thereof shall be filed against Lessee or any
Guarantor and not dismissed within ninety (90) days from the
date of its filing, or a court of competent jurisdiction shall
enter an order or decree appointing, without its consent of, a
receiver of Lessee or any Guarantor or the whole or a
substantial part of its property, and such order or decree shall
not be vacated or set aside within ninety (90) days from the
date of the entry thereof; or
(h) a Credit Agreement Event of Default of the type
specified in Section 6.1(c), 6.1(e), 6.1(g), 6.1(i), 6.1(k),
6.1(m), 6.1(n), 6.1(o) or 6.1(p) of the Credit Agreement shall
have occurred and be continuing; or
(i) there shall occur and be continuing under the
Corporate Credit Agreement an event of default of the type
specified in Section 8.1 through 8.15 thereof (other than any
such event of default resulting from the occurrence of a Credit
Agreement Event of Default of the type specified in Sections 6.1
(a), (b), (d), (f), (h), (j) or (l) of the Credit Agreement).
then, in any such event, Lessor may, in addition to the other rights
and remedies provided for in this Section 17 and in Section 18.1,
terminate this Lease by giving Lessee five (5) days notice of such
termination, and this Lease shall terminate. Lessee shall, to the
fullest extent permitted by law, pay as Supplemental Rent all costs
and expenses incurred by or on behalf of Lessor, including fees and
expenses of counsel, as a result of any Lease Event of Default
hereunder.
2 Final Liquidated Damages. If a Lease Event of Default
shall have occurred and be continuing, 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 13 of the
Participation Agreement, and in lieu of all damages beyond the date
of such demand the sum of (a) the Termination Value, plus (b) all
other amounts owing in respect of Rent and Supplemental Rent
theretofore accruing under this Lease. Upon payment of the amount
specified pursuant to the first sentence of this Section 17.2, Lessee
shall be entitled to receive from Lessor, at Lessee's request and
cost, an assignment of Lessor's right, title and interest in the
Properties, in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of the
Mortgages. Lessee (or Lessee's designee) shall execute and deliver
to Lessor an assumption of all of Lessor's obligations under the
Ground Leases, if any. The Properties shall be quitclaimed to Lessee
(or Lessee's designee) "AS 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, that Lessee shall not be entitled
to receive an assignment of Lessor's interest under the Ground
Leases, if any, or in the Properties unless Lessee shall have paid in
full the Termination Value of each of the Properties.
3 Lease Remedies. Lessor and Lessee intend that for
commercial law and bankruptcy law purposes, this Lease will be
treated as a financing arrangement, as set forth in Section 7. If,
as a result of applicable state law, which cannot be waived, this
Lease is deemed to be a lease of the Properties, rather than a
financing arrangement, and Lessor is unable to enforce the remedies
set forth in Section 17.2, the following remedies shall be available
to Lessor:
(a) Surrender of Possession. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease
shall have been terminated pursuant to Section 17.1, Lessee shall,
upon thirty (30) days written notice, surrender to Lessor possession
of the Property and Lessee shall quit the same. Lessor may enter
upon and repossess the 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 from the Property. Lessor shall have no
liability by reason of any such entry, repossession or removal
performed in accordance with applicable law.
(b) Reletting. If a Lease Event of Default shall have
occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 17.1, Lessor may, but shall be
under no obligation to, relet all, or any portion, of the Property,
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 the Property or for any failure to collect
any rent due upon such reletting.
(c) Damages. None of (i) the termination of this Lease
pursuant to Section 17.1; (ii) the repossession of the Property; or
(iii) except to the extent required by applicable law, the failure of
Lessor to relet all, or any portion, of the 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 liability and obligations hereunder, all of which shall
survive any such termination, repossession or reletting. If any
Lease Event of Default shall have occurred and be continuing and
notwithstanding any termination of this Lease pursuant to Section
17.1, Lessee shall forthwith pay to Lessor all Basic Rent and other
sums due and payable hereunder to and including the date of such
termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or
would have been payable under this Lease if the same had not been
terminated pursuant to Section 17.1 and until the end of the Term or
what would have been the Term in the absence of such termination,
Lessee shall pay Lessor, as current liquidated damages (it being
agreed that it would be impossible accurately to determine actual
damages) an amount equal to the Basic Rent and Supplemental Rent that
are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section
17.1, less the net proceeds, if any, which are actually received by
Lessor with respect to the period in question of any reletting of the
Property or any portion thereof; provided that Lessee's obligation to
make payments of Basic Rent and Supplemental Rent under this Section
17.3 shall continue only so long as Lessor shall not have received
the amounts specified in Section 17.2. In calculating the amount of
such net proceeds from reletting, there shall be deducted all of
Lessor's, the Agent's and any Lenders' expenses in connection
therewith, including repossession costs, brokerage 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 17.3,
such amounts shall be regarded as amounts paid on account of Rent.
(d) Acceleration of Rent. If a Lease Event of Default
shall have occurred and be continuing, and this Lease shall not have
been terminated pursuant to Section 17.1, and whether or not Lessor
shall have collected any current liquidated damages pursuant to
Section 17.3(c), Lessor may upon written notice to Lessee accelerate
all payments of Basic Rent due hereunder and, upon such acceleration,
Lessee shall immediately pay Lessor, as and for final liquidated
damages and in lieu of all current liquidated damages on account of
such Lease Event of Default beyond the date of such acceleration (it
being agreed that it would be impossible accurately to determine
actual damages) an amount equal to the sum of (a) all Basic Rent
(assuming interest at a rate per annum equal to the Overdue Rate), as
applicable, due from the date of such acceleration until the end of
the Term, plus (b) the Maximum Residual Guarantee Amount that would
be payable under Section 21.1(c) assuming the proceeds of the sale
pursuant to such Section 21.1(c) are equal to zero, which sum is then
discounted to present value at a rate equal to the rate then being
paid on United States treasury securities with maturities
corresponding to the then remaining Term. Following payment of such
amount by Lessee, Lessee will be permitted to stay in possession of
the Property for the remainder of the Term, subject to the terms and
conditions of this Lease, including the obligation to pay
Supplemental Rent, provided that no further Lease Event of Default
shall occur and be continuing, following which Lessor shall have all
the rights and remedies set forth in this Section 17 (but not
including those set forth in this Section 17.3). 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.
4 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 repossession; (c) the
benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt; and (d) any other rights which might
otherwise limit or modify any of Lessor's rights or remedies under
this Section 17.
5 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
construction, renovation, development, use or operation of the
Property (including 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
construction renovation, and operation of the Property.
6 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 contained in
the Memorandum of Lease.
18. LESSOR'S RIGHT TO CURE
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 the failure by Lessee to maintain any insurance
required by Section 14, and may, to the fullest extent permitted by
law, and notwithstanding any right of quiet enjoyment in favor of
Lessee, enter upon any Property for such purpose and take all such
action thereon as may be necessary or appropriate therefor. No such
entry shall be deemed an eviction of Lessee. All out-of-pocket costs
and expenses so incurred (including the fees and expenses of
counsel), together with interest thereon at the Overdue Rate from the
date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand as Supplemental Rent.
19. LEASE TERMINATION
1 Provisions Relating to Lessee's Termination of this
Lease or Exercise of Purchase Option. In connection with any
termination of this Lease with respect to any Property pursuant to
the terms of Section 16.2, or in connection with Lessee's exercise of
its Purchase Option or Maturity Date Purchase Option, upon the date
on which this Lease is to terminate with respect to the applicable
Property or upon the Expiration Date with respect to the applicable
Property, and upon tender by Lessee of the amounts set forth in
Section 16.2(b), 20.1 or 20.2, as applicable:
(a) Lessor shall execute and deliver to Lessee (or to
Lessee's designee) at Lessee's cost and expense an assignment of
Lessor's entire interest in the applicable Properties, in each
case in recordable form and otherwise in conformity with local
custom and free and clear of the Lien of the applicable Mortgage
and/or Deed of Trust and any Lessor Liens; and
(b) The applicable Property shall be conveyed to Lessee
"AS IS" and in then present physical condition.
0 Xxxxxxxxx Xxxxxxx A Percentage. Notwithstanding any
other provision of this Lease or the other Operative Agreements, the
Lessee shall not be permitted to terminate this Lease with respect to
a Property pursuant to Section 16 or exercise its Purchase Option
with respect to a Property pursuant to Section 20.1 if the Aggregate
Tranche A Percentage, after giving effect to the termination of this
Lease with respect to such Property, would be less than 87.6%.
20. PURCHASE OPTION
1 Purchase Option. Provided that no Lease Default under
Section 17.1(a), (b), (f) or (g) or Lease Event of Default shall have
occurred and be continuing, Lessee shall have the option (exercisable
by giving Lessor irrevocable written notice (the "Purchase Notice")
of Lessee's election, which election shall be irrevocable, given not
less than twelve months prior to the Maturity Date, to exercise such
option not less than ten (10) days prior to the date of purchase
pursuant to such option) to purchase one or more of the Properties on
the date specified in such Purchase Notice, which date must occur
prior to the date which is twelve months prior to the Maturity Date,
at a price equal to the Termination Value (the "Purchase Option
Price") (which the parties do not intend to be a "bargain" purchase
price) of such Property. If Lessee exercises its option to purchase
one or more of the Properties pursuant to this Section 20.1 (the
"Purchase Option"), Lessor shall quitclaim to Lessee or Lessee's
designee all of Lessor's right, title and interest in and to such
Property as of the date specified in the Purchase Notice upon receipt
of the Purchase Option Price and all Rent and other amounts then due
and payable under this Lease and any other Operative Agreement, in
accordance with Section 19.1.
2 Maturity Date Purchase Option. Not less than twelve
months prior to the Maturity Date, Lessee may give Lessor and Agent
irrevocable written notice (the "Maturity Date Election Notice") that
Lessee is electing to exercise the Maturity Date Purchase Option. If
Lessee does not give a Maturity Date Election Notice on or before the
date twelve months prior to the Maturity Date, then Lessee shall be
obligated to remarket the Properties pursuant to Section 21. If
Lessee has elected to exercise the Maturity Date Purchase Option,
then on the Maturity Date Lessee shall pay to Lessor an amount equal
to the Termination Value for all the Properties (which the parties do
not intend to be a "bargain" purchase price) and, upon receipt of
such amount plus all Rent and other amounts then due and payable
under this Lease and any other Operative Agreement, Lessor shall
transfer to Lessee or Lessee's designee all of Lessor's right, title
and interest in and to the Properties in accordance with Section
19.1.
3 Obligation to Purchase All Properties. If on the date
which is twelve months prior to the Maturity Date the then
Termination Value of all the Properties is less than the Maximum
Purchase Option Amount, then on the Maturity Date Lessee shall be
required to exercise its Purchase Option on the Maturity Date with
respect to all remaining Properties.
21. SALE OF PROPERTY
1 Sale Procedure. (a) With respect to each Property,
at the expiration of the Term, unless Lessee shall have elected to
purchase such Property and has paid the Purchase Option Price with
respect thereto, or otherwise terminated this Lease with respect
thereto and paid the Termination Value with respect thereto, Lessee
shall (i) pay to Lessor the Maximum Residual Guarantee Amount for
such Property as provided in Section 21.1(c), and (ii) sell such
Property to one or more third parties for cash, in each instance, in
accordance with Section 21.1(b) and (c).
(a) During the Marketing Period, Lessee, as nonexclusive
broker for Lessor, shall use its best efforts to obtain bids for the
cash purchase of each Property being sold for the highest price
available in the relevant market, 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 such
Property and shall provide Lessor with such additional information
about the bids and the bid solicitation procedure as Lessor may
request from time to time. Lessor may reject any and all bids and
may assume sole responsibility for obtaining bids by giving Lessee
written notice to that effect; provided, however, that
notwithstanding the foregoing, Lessor may not reject a bid if such
bid, together with any amounts to be paid pursuant to Section 21.3,
is greater than or equal to the sum of the Limited Deficiency Amount
and all costs and expenses referred to in Section 21.2(i) and is a
bona fide offer by a third party purchaser who is not an Affiliate of
Lessee. If the price which a prospective purchaser shall have
offered to pay for all or any of the Properties is less than the sum
of the Limited Deficiency Amount and all costs and expenses referred
to in Section 21.2(i), Lessor may elect to retain the Property by
giving Lessee at least two Business Days' prior written notice of
Lessor's election to retain the Property, and upon receipt of such
notice, Lessee shall surrender the Property to Lessor pursuant to
Section 10.1(c). Unless Lessor shall have elected to retain the
Property pursuant to the preceding sentence, Lessor shall sell the
Property free of any Lessor Liens attributable to it, without
recourse or warranty, for cash to the purchaser or purchasers
identified by Lessee or Lessor, as the case may be. Lessee shall
surrender the Property so sold to each purchaser in the condition
specified in Section 10.1.
(b) On each date during the Marketing Period on which a
Property is sold pursuant to Section 21.1(b), and on the Maturity
Date with respect to any Properties remaining unsold, Lessee shall
pay to Lessor the Maximum Residual Guarantee Amount for such
Property.
2 Application of Proceeds of Sale. Lessor shall apply
the proceeds of sale of each Property in the following order of
priority:
(i) FIRST, to pay or to reimburse Lessor for the
payment of all reasonable costs and expenses incurred by Lessor
in connection with the sale; and
(ii) SECOND, the balance shall be paid to the Agent to
be applied pursuant to the provisions of the Credit Agreement.
3 Indemnity for Excessive Wear. If the proceeds of the
sale described in Section 21.1(b) with respect to any Property, less
all expenses incurred by Lessor in connection with such sale, shall
be less than the Limited Deficiency Amount for such Property at the
time of such sale and if it shall have been determined (pursuant to
the Appraisal Procedure) that the Fair Market Sales Value of such
Property shall have been impaired by greater than expected wear and
tear during the Term, 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 Net Sale Proceeds Shortfall, whichever amount is
less.
4 Appraisal Procedure. For determining the Fair Market
Sales Value of a Property 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, and if
they cannot agree within ten (10) days, then two qualified
appraisers, one chosen by Lessee and one 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 appraisers cannot agree within twenty (20) days after both shall
have been appointed, then a third appraiser shall be selected by the
two 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
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 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 all of the appraisers shall be
paid by the Lessee.
5 Certain Obligations Continue. During the Marketing
Period, the obligation of Lessee to pay Rent with respect to each
Property (including the installment of Basic Rent due on the Maturity
Date) shall continue undiminished until payment in full to Lessor of
the sale proceeds, the Maximum Residual Guarantee Amount, if any, the
amount due under Section 21.3, if any, and all other amounts due to
Lessor with respect to the Property. 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 Section 21.
22. HOLDING OVER
1 Holding Over. If Lessee shall for any reason remain
in possession of a Property after the expiration or earlier
termination of this Lease (unless the Property is conveyed to
Lessee), such possession shall be as a tenancy at sufferance during
which time Lessee shall continue to pay Supplemental Rent that would
be payable by Lessee hereunder were the Lease then in full force and
effect with respect to such Property and Lessee shall continue to pay
Basic Rent at an annual rate equal to the rate payable hereunder
immediately preceding such expiration or earlier termination;
provided, however, that from and after the sixtieth (60th) day Lessee
shall remain in possession of such Property after such expiration or
earlier termination, Lessee shall pay Basic Rent at an annual rate
equal to one hundred twenty-five percent (125%) of the Basic Rent
payable hereunder immediately preceding such expiration or earlier
termination. Such Basic Rent shall be payable from time to time upon
demand by Lessor. 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 its
occupancy and use of the Property. Nothing contained in this Section
22 shall constitute the consent, express or implied, of Lessor to the
holding over of Lessee after the expiration or earlier termination of
this Lease as to any Property and nothing contained herein shall be
read or construed as preventing Lessor from maintaining a suit for
possession of any Property or exercising any other remedy available
to Lessor at law or in equity.
23. RISK OF LOSS
1 Risk of Loss. The risk of loss of or decrease in the
enjoyment and beneficial use of the 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.
24. SUBLETTING AND ASSIGNMENT
1 Subletting and Assignment. Lessee may not assign this
Lease or any of its rights or obligations hereunder in whole or in
part. Lessee may, without the consent of Lessor, sublease the
Property or a portion thereof to any Person. No sublease or other
relinquishment of possession of the 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 the Property, or any portion thereof, so sublet. Any
sublease of the Property shall be made subject to and subordinate to
this Lease and to the rights of Lessor hereunder, shall expire prior
to the expiration of the Term and shall expressly provide for the
surrender of the Property after a Lease Event of Default hereunder.
2 Subleases. Promptly following the execution and
delivery of any sublease permitted by this Section 24, Lessee shall
deliver a copy of such executed sublease to Lessor and the Agent.
25. ESTOPPEL CERTIFICATES
1 Estoppel Certificates. At any time and from time to
time upon not less than twenty (20) days' prior request by Lessor,
the Lessee shall furnish to the Lessor a certificate signed by an
individual having the office of vice president or higher in the
Certifying Party certifying that this Lease is in full force and
effect (or that this Lease is in full force and effect as modified
and setting forth the modifications); the dates to which the Basic
Rent or Renewal Rent and Supplemental Rent have been paid; to the
best knowledge of the signer of such certificate, whether or not the
Lessor is in default under any of its obligations hereunder (and, if
so, the nature of such alleged default); and such other matters under
this Lease as the Lessor may reasonably request. Any such
certificate furnished pursuant to this Section 25 may be relied upon
by the Lessor, and any existing or prospective mortgagee, purchaser
or lender, and any accountant or auditor, of, from or to the Lessor
(or any Affiliate thereof).
26. NO WAIVER
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.
27. ACCEPTANCE OF SURRENDER
1 Acceptance of Surrender. (a) As of the Expiration
Date, no Default shall have occurred and be continuing under the
Lease.
(a) Except as otherwise expressly provided in this Lease,
no surrender to Lessor of this Lease or of all or any portion of the
Property or of any interest therein shall be valid or effective
unless agreed to and accepted in writing by Lessor and, prior to the
payment or performance of all obligations under the Credit Documents,
the Agent, 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.
28. NO MERGER OF TITLE
1 No Merger of Title. There shall be no merger of this
Lease or of the leasehold estate created hereby by reason of the fact
that the same Person may acquire, own or hold, directly or
indirectly, in whole or in part, (a) this Lease or the leasehold
estate created hereby or any interest in this Lease or such leasehold
estate, (b) the fee estate in the Property, except as may expressly
be stated in a written instrument duly executed and delivered by the
appropriate Person, or (c) a beneficial interest in Lessor.
29. NOTICES
1 Notices. Unless otherwise specifically provided
herein, all notices, consents, directions, approvals, instructions,
requests and other communications required or permitted by the terms
hereof to be given to any Person to be effective shall be in writing
(including by Facsimile transmission) and shall be deemed to have
been duly given or made (a) when delivered by hand, (b) one Business
Day after delivery to such nationally recognized courier service
specifying overnight delivery, (c) three Business Days after being
deposited in the mail, certified or registered, postage prepaid or
(d) in the case of Facsimile notice, when received if received on a
Business Day during regular business hours, or else on the next
Business Day, addressed to such Person as indicated:
If to Lessee: Dominick's Finer Foods, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn:Xxxxxx Xxxxx, Executive Vice President of
Administration and Chief Financial Officer
Fax: (000) 000-0000
with a copy
to: Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxx, Esq.
Fax: (000) 000-0000
If to Lessor: The Dominick's Realty Trust 1997
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attn: Corporate Trust Administration
Fax: (000) 000-0000
with a copy
to the Agent: The Chase Manhattan Bank
One Chase Manhattan Plaza - 8th Floor
New York, New York 10081
Attn: Xxxxxx Xxxxxxx
Fax: (000) 000-0000
or such additional parties and/or other address (or facsimile number)
as such party may hereafter designate.
30. MISCELLANEOUS
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 term or provision of this
Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application
of such term or provision shall not be affected thereby. If any
right or option of Lessee provided in this Lease, including any right
or option described in Sections 15, 16, 22 or 21, would, in the
absence of the limitation imposed by this sentence, be invalid or
unenforceable as being in violation of the rule against perpetuities
or any other rule of law relating to the vesting of an interest in or
the suspension of the power of alienation of property, then such
right or option shall be exercisable only during the period which
shall end twenty-one (21) years after the date of death of the last
survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the former
President of the United States, Xxxxx Xxxx, the deceased automobile
manufacturer, and Xxxx X. Xxxxxxxxxxx, the deceased founder of the
Standard Oil Company, known to be alive on the date of the execution
and delivery of this Lease.
2 Amendments and Modifications. Neither this Lease nor
any provision hereof may be amended, waived, discharged or terminated
except by an instrument in writing signed by Lessor and Lessee.
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.
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.
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 and the same instrument.
6 GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN, AND
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, EXCEPT AS TO MATTERS
RELATING TO THE CREATION, PERFECTION AND ENFORCEMENT OF LIENS AND
SECURITY INTERESTS AND THE EXERCISE OF REMEDIES WITH RESPECT THERETO,
WHICH SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE IN WHICH THE APPLICABLE PROPERTY IS LOCATED.
7 Limitations on Recourse. Except as expressly set forth
in the Operative Agreements, Lessee agrees to look solely to Lessor's
estate and interest in the Property, the proceeds of sale thereof,
any insurance proceeds or any other award or any third party proceeds
received by Lessor in connection with the Property 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,
the Trust Company member, partner or other owner of an interest,
direct or indirect, in Lessor, or any director, officer, shareholder,
employee, beneficiary, Affiliate of any of the foregoing shall be
subject to levy, execution or other enforcement procedure for the
satisfaction of Lessee's remedies under or with respect to this
Lease, the relationship of Lessor and Lessee hereunder or Lessee's
use of the Property or any other liability of Lessor to Lessee;
provided that nothing in this Section shall be construed to impair or
limit the rights of Lessee against the Investor under the Operative
Agreements. Nothing in this Section shall be interpreted so as to
limit the terms of Section 6.1 or 6.2.
8 Memorandum of Lease. This Lease shall not be
recorded, but Lessor and Lessee shall, upon the execution and
delivery of each Lease Supplement, execute and deliver a memorandum
of this Lease (a "Memorandum of Lease") substantially in the form of
Exhibit B and otherwise in form suitable for recording under the laws
of the jurisdiction in which the Property covered by such Memorandum
of Lease is located, which memorandum shall be recorded at Lessee's
sole cost and expense.
9 Priority. On and prior to the Maturity Date, the
Mortgage shall be subject and subordinate to this Lease and following
the Maturity Date, the Mortgage, at the sole election of the Agent,
shall be senior to this Lease without any further act by any Person.
10 Ground Lease. During the Term, Lessee shall observe
and perform all of the obligations of Lessor under any Ground Lease
(including the payment of all rent and other amounts thereunder) and,
in connection therewith, shall, prior to the occurrence and
continuation of a Lease Event of Default, have the benefit of all of
Lessor's rights as lessee under any Ground Lease.
IN WITNESS WHEREOF, the parties have caused this Lease
Supplement No. __ be duly executed and delivered as of
the date first above written.
DOMINICK'S FINER FOODS, INC.
By:
__________________________________
Name:
Title:
THE DOMINICK'S REALTY TRUST 1997
By: Wilmington Trust Company, not in
its individual capacity but solely
as Trustee
By:
__________________________________
Name:
Title:
Receipt of this original counterpart of the foregoing Lease
is hereby acknowledged on this ____ day of August, 1997.
THE CHASE MANHATTAN BANK, as the
Agent for the Lenders
By:
__________________________________
Name:
Title:
