MASTER LEASE
THIS MASTER LEASE (this "Lease") is made as of July 30, 2001 (the
"Effective Date"), by and between XXXXXXX FAMILY, LLC, a Massachusetts limited
liability company ("Lessor"), whose address is 000 Xxxxxxx Xxxx Xxxx, Xxxx
Xxxxxxx, XX 00000 and SLA MAIL, INC., a Massachusetts corporation ("Lessee"),
whose address is 000 Xxxxxxx Xxxx Xxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H :
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. CERTAIN DEFINED TERMS. The following terms shall have the following
meanings for all purposes of this Lease:
"ACKNOWLEDGEMENT" means the Acknowledgement of Master Lease Assignment and
Subordination, Nondisturbance and Attornment Agreement dated as of the date of
this Lease among Lessor, Lessee and Lender. A duplicate original Acknowledgement
will be executed and recorded in the applicable real property records for each
Property.
"ADA" has the meaning set forth in Section 16.C.
"ADDITIONAL RENTAL" has the meaning set forth in Section 5.B.
"AFFILIATE" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"APPLICABLE REGULATIONS" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over Lessee and/or any of the
Properties, including, without limitation, all health, building, fire, safety
and other codes, ordinances and requirements and all applicable standards of the
National Board of Fire Underwriters and the ADA, in each case, as amended, and
any judicial or administrative interpretation thereof, including any judicial
order, consent, decree or judgment applicable to Lessee.
"APPLICABLE RENT REDUCTION PERCENTAGE" means, with respect to any
Property, a fraction, the numerator of which shall be the Purchase Price for
such Property, and the denominator of which shall be the sum of the Purchase
Price for all of the Properties then subject to this Lease, including such
Property.
"BASE ANNUAL RENTAL" means $768,366.98.
"BASE MONTHLY RENTAL" means an amount equal to 1/12 of the applicable Base
Annual Rental.
"BUSINESS DAY" means a day on which banks located in Boston, Massachusetts
are not required or authorized to remain closed (other than a Saturday and
Sunday).
"CODE" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 ET
SEQ., as amended.
"DE MINIMIS AMOUNTS" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms, the use, storage or release of which does not
constitute a violation of, or require regulation or remediation under, any
Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the states in which the
Properties are located.
"DEFAULT RATE" means 18% per annum or the highest rate permitted by law,
whichever is less.
"DISCLOSURES" has the meaning set forth in Section 8.B.
"EFFECTIVE DATE" has the meaning set forth in the Preamble.
"ENVIRONMENTAL LAWS" means any present and future federal, state and local
laws, statutes, ordinances, rules and regulations relating to Hazardous
Materials and/or the protection of human health or the environment, by reason of
a Release or a Threatened Release of Hazardous Materials or relating to
liability for or costs of Remediation or prevention of Releases. "Environmental
Laws" includes, but is not limited to, the following statutes, as amended, any
successor thereto, and any regulations, rulings, orders or decrees promulgated
pursuant thereto, and any state or local statutes, ordinances, rules,
regulations and the like addressing similar issues: the Comprehensive
Environmental Response, Compensation and Liability Act; the Emergency Planning
and Community Right-to-Know Act; the Hazardous Materials Transportation Act; the
Resource Conservation and Recovery Act (including but not limited to Subtitle I
relating to underground storage tanks); the Solid Waste Disposal Act; the Clean
Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe
Drinking Water Act; the Occupational Safety and Health Act; the Federal Water
Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act;
the Endangered Species Act; the National Environmental Policy Act; and the River
and Harbors Appropriation Act. "Environmental Laws" also includes, but is not
limited to, any present and future federal, state and local laws, statutes,
ordinances, rules, regulations and the like, as well as common law: conditioning
transfer of property upon a negative declaration or other approval of a
Governmental Authority of the environmental condition of the property; requiring
notification or disclosure of Releases or other environmental condition of any
of the Properties to any Governmental Authority or other person or entity,
whether or not in connection with transfer of title to or interest in property;
relating to nuisance, trespass or other causes of action related to Hazardous
Materials; and relating to wrongful death, personal injury, or property or other
damage in connection with the physical condition or use of any of the Properties
by reason of the presence of Hazardous Materials in, on, under or above any of
the Properties.
"ENVIRONMENTAL LIENS" has the meaning set forth in Section 16.D(ix).
"EVENT OF DEFAULT" has the meaning set forth in Section 23.
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"EXTENDED TERM" means the period subsequent to the expiration of the
Primary Term which this Lease is actually in effect.
"GAAP" means generally accepted accounting principles consistently
applied.
"GOVERNMENTAL AUTHORITY" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the states in which the
Properties are located or any political subdivision thereof.
"GUARANTOR" means Uno Restaurant Corporation, a Delaware corporation.
"GUARANTY" means that certain Unconditional Guaranty of Payment and
Performance dated as of the date of this Lease to be executed by Guarantor with
respect to the obligations of Lessee under this Lease, as the same may be
amended from time to time.
"HAZARDOUS MATERIALS" means (i) any toxic substance or hazardous waste,
substance, solid waste, or related material, or any pollutant or contaminant;
(ii) radon gas, asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contains
dielectric fluid containing levels of polychlorinated biphenyls in excess of
federal, state or local safety guidelines, whichever are more stringent, or any
petroleum product; (iii) any substance, gas, material or chemical which is or
may be defined as or included in the definition of "hazardous substances,"
"toxic substances," "hazardous materials," "hazardous wastes," "regulated
substances" or words of similar import under any Environmental Laws; and (iv)
any other chemical, material, gas or substance the exposure to or release of
which is or may be prohibited, limited or regulated by any Governmental
Authority that asserts or may assert jurisdiction over any of the Properties or
the operations or activity at any of the Properties, or any chemical, material,
gas or substance that does or may pose a hazard to the health and/or safety of
the occupants of any of the Properties or the owners and/or occupants of
property adjacent to or surrounding any of the Properties.
"INDEMNIFIED PARTIES" means Lessor and Lender and their directors,
officers, shareholders, trustees, beneficial owners, partners, members, and any
directors, officers, shareholders, trustees, beneficial owners, partners,
members of any beneficial owners, partners or members of Lessor or Lender, and
all employees, agents, servants, representatives, contractors, subcontractors,
affiliates, subsidiaries, participants, successors and assigns of any of the
foregoing, including, but not limited to, any successors by merger,
consolidation or acquisition of all or a substantial portion of the assets and
business of Lessor or Lender, as applicable.
"LEASE TERM" shall have the meaning described in Section 4.
"LENDER" means General Electric Capital Business Asset Funding
Corporation, a Washington corporation, its successors and assigns, any successor
lender in connection with any loan secured by Lessor's interest in any of the
Properties, and any servicer of any loan secured by Lessor's interest in any of
the Properties.
"LESSEE ENTITIES" means, collectively, Lessee and Permitted Lessees and
all Affiliates of Lessee and Permitted Lessees.
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"LOAN AGREEMENT" means the Loan Agreement dated as of the date of this
Lease in effect between Lessor and Lender, as such agreement may be amended from
time to time and any and all replacements or substitutions thereof.
"LOAN DOCUMENTS" means, collectively, the Loan Agreement, the Notes, the
Mortgages and all other documents, instruments and agreements executed in
connection therewith or contemplated thereby, all as amended and supplemented
and any and all replacements or substitutions thereof.
"LOSSES" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the net
worth or operation of Lessee, Guarantor or any of the Properties, including,
without limitation, the operations of any of the Properties as a Permitted
Facility and/or the value of any of the Properties, or (ii) Lessee's ability to
perform its obligations under this Lease and the other Sale-Leaseback Documents.
"MATURITY DATE" means August 1, 2021.
"MEMORANDUM" means the memorandum of master lease dated as of the date of
this Lease between Lessor and Lessee with respect to the Properties. A duplicate
original Memorandum will be executed and recorded in the applicable real
property records for each Property. Each Memorandum will contain exhibits with
the addresses and store identification numbers for all of the Properties and the
legal description for the applicable Property.
"MORTGAGES" means, collectively, the mortgages, deeds of trust or deeds to
secure debt, assignments of rents and leases dated as of even date herewith
executed by Lessor for the benefit of Lender with respect to the Properties, as
such instruments may be amended, restated and/or supplemented from time to time
and any and all replacements or substitutions thereof.
"NOTES" means, collectively, the promissory notes dated as of the date of
this Lease executed by Lessor and payable to Lender with respect to the
Properties, as such notes may be amended, restated and/or substituted from time
to time.
"NOTICES" means, when used herein, written notice.
"OTHER AGREEMENTS" means, collectively, all agreements and instruments now
or hereafter entered into between, among or by (1) any of the Lessee Entities,
and, or for the benefit (as intended beneficiary or intended third party
beneficiary) of, (2) Lessor; provided, however, the term Other Agreements shall
not include this Lease, the other Sale-Leaseback Documents, agreements between
and among institutional lenders and one or more of the Lessee Entities.
"PARTICIPATION" means the granting of any participations in any document
evidencing loan obligations or any or all servicing rights with respect thereto.
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"PERMITTED FACILITY" means with respect to those properties located in the
State of Illinois, a Pizzeria Uno Chicago Bar & Grill restaurant, Pizzeria Due,
Su Casa or any future concept or use to be developed. Permitted Facility means
with respect to that property located in the State of Massachusetts, a food
service production facility or any future concept or use to be developed.
"PERMITTED SUBLEASES" means the master subleases of even date herewith of
all the Properties by Lessee, as sublessor, to the Permitted Sublessees, as
sublessees.
"PERMITTED SUBLESSEE" or "PERMITTED SUBLESSEES" means, individually or
collectively, as the context may require, SLA Brockton, Inc., a Massachusetts
corporation, Pizzeria Uno, Inc., an Illinois corporation, Pizzeria Due, Inc., an
Illinois corporation, Su Casa, Inc., an Illinois corporation, or their
successors or assigns.
"PERSON" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"PERSONALTY" means all machinery, appliances, furniture, equipment, trade
fixtures and other personal property of Lessee (excluding inventory) from time
to time situated on or used in connection with the Properties; provided,
however, the term "Personalty" shall not include the HVAC, walk-in coolers,
walk-in freezers, supply fans, exhaust fans, air ducts, hoods, vents, built-in
sinks, built-in countertops, plumbing and electrical fixtures, merchandise
shelving, sign poles and lighting poles, all of which items are intended to be
fixtures as such term is used within the definition of "Properties".
"PREPAYMENT CHARGES" means, for purposes of this Lease, an amount equal to
any prepayment premium or charge, yield maintenance payment, or other cost or
expense imposed on Lessor by the applicable Lender in connection with the
payment of the applicable Note(s) or promissory note(s) prior to the Maturity
Date.
"PRIMARY TERM" means the period commencing on the Effective Date and
expiring on July 31, 2021.
"PROPERTIES" means, collectively, the parcels of real estate described by
address, Lessor Number and Unit Number in EXHIBIT A attached hereto as the same
may be modified from time to time to reflect removed and substituted Properties
and legally described in EXHIBIT A-1 attached hereto as the same may be modified
from time to time to reflect removed and substituted Properties, all rights,
privileges and appurtenances associated therewith, and all buildings,
structures, fixtures and other improvements now or hereafter located on such
real estate (excluding Personalty and inventory).
"PROPERTY" means any one of the Properties.
"PURCHASE PRICE" means, with respect to any Property, the amount of the
purchase price corresponding to such Property as set forth on EXHIBIT A to the
Sale-Leaseback Agreement.
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"QUESTIONNAIRES" means the environmental questionnaires completed by
Lessee with respect to each of the Properties and submitted to General Electric
Capital Business Funding Corporation in connection with the mortgage loan on the
Properties.
"REJECTABLE OFFER" has the meaning set forth in Section 21.B.
"REJECTABLE PURCHASE OFFER" has the meaning set forth in Section 58.A.
"REJECTABLE SUBSTITUTION OFFER" has the meaning set forth in Section 57.A.
"RELEASE" means any depositing, discharging, leaking, spilling, injecting,
pumping, pouring, emptying, escaping, dumping or disposing of Hazardous
Materials into the environment, except for De Minimis Amounts.
"REMEDIATION" means any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Materials, any actions to prevent, cure or mitigate any Release,
any inspection, investigation, study, monitoring, assessment, sampling and
testing, laboratory or other analysis relating to any Hazardous Materials.
"SALE-LEASEBACK AGREEMENT" means that certain Sale-Leaseback Agreement
dated as of the date hereof between Lessor and Uno Foods Inc., a Massachusetts
Corporation and Saxet Corporation, a Delaware Corporation, with respect to the
Properties.
"SALE-LEASEBACK DOCUMENTS" means the Sale-Leaseback Agreement, this Lease,
the Memorandum, the Guaranty, the Acknowledgement and all other documents
executed in connection therewith or contemplated thereby.
"SUBSTITUTE PROPERTY" means one or more parcels of real estate substituted
for any of the Properties in accordance with the requirements of Section 57,
together with all rights, privileges and appurtenances associated therewith, and
all buildings, structures, fixtures and other improvements located thereon. For
purposes of clarity, where two or more parcels of real property comprise a
Substitute Property, such parcels shall be aggregated and deemed to constitute
the Substitute Property for all purposes of this Lease.
"THREATENED RELEASE" means a substantial likelihood of a Release which
requires action pursuant to Environmental Law to prevent or mitigate damage to
the soil, surface waters, groundwaters, land, stream sediments, surface or
subsurface strata, ambient air or any other environmental medium comprising or
surrounding any of the Properties which may result from such Release.
"TITLE COMPANY" means Chicago Title Insurance Company, or such other
nationally recognized title insurance company reasonably acceptable to Lessor.
"TRANSFER" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
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2. DEMISE OF PROPERTIES. In consideration of the rentals and other sums to
be paid by Lessee and of the other terms, covenants and conditions on Lessee's
part to be kept and performed, Lessor hereby leases to Lessee, and Lessee hereby
takes and hires, the Properties. The Properties are leased to Lessee "AS IS" and
"WHERE IS" without representation or warranty by Lessor and subject to the
rights of parties in possession, to the existing state of title, any state of
facts which an accurate survey or physical inspection might reveal, and all
Applicable Regulations now or hereafter in effect. Lessee has examined each of
the Properties and title to each of the Properties and has found all of the same
satisfactory for all of Lessee's purposes.
3. CHARACTERIZATION OF LEASE. A. Lessor and Lessee intend that:
(i) this Lease constitutes a single master lease of all, but not
less than all, of the Properties and that Lessor and Lessee have executed
and delivered this Lease with the understanding that this Lease
constitutes a unitary, unseverable instrument pertaining to all, but not
less than all, of the Properties, and that neither this Lease nor the
duties, obligations or rights of Lessee may be allocated or otherwise
divided among the Properties by Lessee;
(ii) this Lease is a "true lease" and not a financing lease, capital
lease, mortgage, equitable mortgage, deed of trust, trust agreement,
security agreement or other financing or trust arrangement, and the
economic realities of this Lease are those of a true lease; and
(iii) the business relationship created by this Lease and any
related documents is solely that of a long-term commercial lease between
landlord and tenant and has been entered into by both parties in reliance
upon the economic and legal bargains contained herein.
X. Xxxxxx and Lessee acknowledge and agree that the Lease Term, including
any term extensions provided for in this Lease, is less than the remaining
economic life of each of the Properties.
C. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a true lease and irrevocably waives any claim
or defense which asserts that this Lease is anything other than a true lease.
Lessee covenants and agrees that it will not assert that this Lease is anything
but a true lease. Lessee stipulates and agrees not to challenge the validity,
enforceability or characterization of the lease of the Properties as a true
lease and further stipulates and agrees that nothing contained in this Lease
creates or is intended to create a joint venture, partnership (either de jure or
de facto), equitable mortgage, trust, financing device or arrangement, security
interest or the like. Lessee shall support the intent of the parties that the
lease of the Properties pursuant to this Lease is a true lease and does not
create a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the like,
if, and to the extent that, any challenge occurs.
D. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a master lease of all of the Properties and
irrevocably waives any claim or defense which asserts that this Lease is
anything other than a master lease. Lessee covenants and
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agrees that it will not assert that this Lease is anything but a unitary,
unseverable instrument pertaining to the lease of all, but not less than all, of
the Properties. Lessee stipulates and agrees not to challenge the validity,
enforceability or characterization of the lease of the Properties as a unitary,
unseverable instrument pertaining to the lease of all, but not less than all, of
the Properties. Lessee shall support the intent of the parties that this Lease
is a unitary, unseverable instrument pertaining to the lease of all, but not
less than all, of the Properties, if, and to the extent that, any challenge
occurs.
E. Lessee represents and warrants to Lessor that (i) the Base Annual
Rental is the fair market value for the use of the Properties and was agreed to
by Lessor and Lessee on that basis, and (ii) the execution, delivery and
performance by Lessee of this Lease does not constitute a transfer of all or any
part of the Properties.
F. The expressions of intent, the waivers, the representations and
warranties, the covenants, the agreements and the stipulations set forth in this
Section are a material inducement to Lessor entering into this Lease.
4. LEASE TERM. The Lease Term for all of the Properties shall commence as
of the Effective Date and shall expire on July 31, 2021, unless terminated
sooner as provided in this Lease and as may be extended for four additional
successive periods of five years each as set forth in Section 27 below. The time
period during which this Lease shall actually be in effect is referred to herein
as the "Lease Term."
5. RENTAL, OTHER PAYMENTS AND SECURITY DEPOSIT. A. If the Effective Date
is a date other than the first day of the month, Lessee shall pay Lessor on the
Effective Date the Base Monthly Rental prorated on the basis of the ratio that
the number of days from the Effective Date through the last day in the month
containing the Effective Date bears to the number of days in such month.
Thereafter, on or before the first day of each succeeding calendar month, Lessee
shall pay Lessor in advance the Base Monthly Rental.
B. All sums of money required to be paid by Lessee under this Lease which
are not specifically referred to as rent ("Additional Rental") shall be
considered rent although not specifically designated as such. Lessor shall have
the same remedies for nonpayment of Additional Rental as those provided herein
for the nonpayment of Base Annual Rental.
6. REPRESENTATIONS AND WARRANTIES OF LESSOR. The representations and
warranties of Lessor contained in this Section are being made to induce Lessee
to enter into this Lease and Lessee has relied and will continue to rely upon
such representations and warranties. Lessor represents and warrants to Lessee as
of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSOR. (i) Lessor has been
duly organized and is validly existing and in good standing under the laws
of the State of Massachusetts. All necessary corporate action has been
taken to authorize the execution, delivery and performance by Lessor of
this Lease and the other documents, instruments and agreements provided
for herein.
(ii) The person who has executed this Lease on behalf of Lessor is
duly authorized so to do.
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B. ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessor, enforceable against Lessor in accordance
with its terms.
7. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and
warranties of Lessee contained in this Section are being made to induce Lessor
to enter into this Lease and Lessor has relied, and will continue to rely, upon
such representations and warranties. Lessee represents and warrants to Lessor as
of the Effective Date as follows:
A. ORGANIZATION, AUTHORITY AND STATUS OF LESSEE. (i) Lessee has been
duly organized or formed, is validly existing and in good standing under
the laws of its state of incorporation or formation and is qualified to do
business in any jurisdiction where such qualification is required. All
necessary corporate action has been taken to authorize the execution,
delivery and performance by Lessee of this Lease and of the other
documents, instruments and agreements provided for herein. Lessee is not a
"foreign corporation", "foreign partnership", "foreign trust", "foreign
limited liability company" or "foreign estate", as those terms are defined
in the Internal Revenue Code and the regulations promulgated thereunder.
Lessee's United States tax identification number is correctly set forth on
the signature page of this Lease.
(ii) The person who has executed this Lease on behalf of Lessee is
duly authorized to do so.
B. ENFORCEABILITY. This Lease constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance
with its terms.
C. LITIGATION. There are no suits, actions, proceedings or
investigations pending, or, to the best of its knowledge, threatened
against or involving Lessee, Guarantor, any Permitted Sublessee or any of
the Properties before any arbitrator or Governmental Authority which might
reasonably result in any Material Adverse Effect.
D. ABSENCE OF BREACHES OR DEFAULTS. Neither Lessee, Guarantor nor
any of the Permitted Sublessees is in default under any document,
instrument or agreement to which Lessee, Guarantor or any Permitted
Sublessee is a party or by which Lessee or any Permitted Sublessee, any of
the Properties or any of Lessee's, Guarantor's or any Permitted
Sublessee's property is subject or bound, which default could reasonably
be expected to result in a Material Adverse Effect. The authorization,
execution, delivery and performance of this Lease, the Guaranty and the
other documents, instruments and agreements provided for herein will not
result in any breach of or default under any document, instrument or
agreement to which Lessee or Guarantor is a party or by which Lessee,
Guarantor, any of the Properties or any of Lessee's or Guarantor's
property is subject or bound. The authorization, execution, delivery and
performance of this Lease and the documents, instruments and agreements
provided for herein will not violate any applicable law, statute,
regulation, rule, ordinance, code, rule or order.
E. LIABILITIES OF LESSOR. Lessee is not liable for any indebtedness
for money borrowed by Lessor and has not guaranteed any of the debts or
obligations of Lessor.
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8. COVENANTS. Lessee covenants to Lessor for so long as this Lease is in
effect as follows:
For purposes of this Agreement, the following terms shall be defined
as set forth below:
"CAPITAL LEASE" shall mean any lease of any property (whether real,
personal or mixed) by Lessee and any Permitted Sublessee with respect to
one or more of the Properties which lease would, in conformity with GAAP,
be required to be accounted for as a capital lease on the balance sheet of
Lessee. The term "Capital Lease" shall not include any operating lease or
this Lease.
"DEBT" shall mean as directly related to all of the Properties and
the period of determination (i) indebtedness of Lessee and the Permitted
Sublessees for borrowed money, (ii) obligations of Lessee and the
Permitted Sublessees evidenced by bonds, indentures, notes or similar
instruments, (iii) obligations of Lessee and any Permitted Sublessee to
pay the deferred purchase price of property or services, (iv) obligations
of Lessee and the Permitted Sublessees under leases which should be, in
accordance with GAAP, recorded as Capital Leases, and (v) obligations of
Lessee and the Permitted Sublessees under direct or indirect guarantees in
respect of, and obligations (contingent or otherwise) to purchase or
otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to
in clauses (i) through (iv) above. The term "Debt" shall not include
Lessor's debt with respect to the Properties or otherwise.
"DEPRECIATION AND AMORTIZATION" shall mean with respect to all of
the Properties the depreciation and amortization accruing during any
period of determination with respect to Lessee and the Permitted
Sublessees as determined in accordance with GAAP. The term "Depreciation
and Amortization" shall not include Lessor's depreciation and amortization
with respect to the Properties or otherwise.
"EQUIPMENT PAYMENT AMOUNT" shall mean for any period of
determination the sum of all amounts payable during such period of
determination under all (i) leases entered into by Lessee and any
Permitted Sublessee for equipment located at one or more of the Properties
and (ii) all loans made to Lessee and any Permitted Sublessee secured by
Lessee's and Permitted Sublessee's interests in the equipment located at
one or more of the Properties.
"GROSS SALES" means the sales or other income arising from all
business conducted at all of the Properties by Lessee and any Permitted
Sublessee during the period of determination, less sales tax paid by
Lessee in connection with the business conducted at each of the Properties
during such period.
"INTEREST EXPENSE" shall mean for any period of determination, the
sum of all interest accrued or which should be accrued in respect of all
Debt of Lessee and Permitted Sublessees allocable to one or more of the
Properties and all business operations thereon
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during such period (including interest attributable to Capital Leases), as
determined in accordance with GAAP.
"NET INCOME" shall mean with respect to the period of determination,
the net income or net loss of Lessee and the Permitted Sublessees
allocable to all of the Properties. In determining the amount of Net
Income, (i) adjustments shall be made for nonrecurring gains and losses
allocable to the period of determination, (ii) deductions shall be made
for, among other things, Depreciation and Amortization, Interest Expense
and Operating Lease Expense allocable to the period of determination, and
(iii) no deductions shall be made for (x) income taxes or charges
equivalent to income taxes allocable to the period of determination, as
determined in accordance with GAAP, or (y) corporate overhead expense
allocable to the period of determination.
"OPERATING LEASE EXPENSE" shall mean the expenses incurred by Lessee
and Permitted Sublessees under any operating leases with respect to one or
more of the Properties (including this Lease) and the business operations
thereon during the period of determination, as determined in accordance
with GAAP.
A. NONCONSOLIDATION COVENANTS. (i) Lessee will not assume liability
for any indebtedness for money borrowed by Lessor and does not, and will
not, guarantee any of the debts or obligations of Lessor. Lessee will not
hold itself out as being liable for any obligations or indebtedness of
Lessor.
(ii) Lessee shall not and shall use its best efforts to cause its
affiliates not to hold Lessor out to the public or to any individual
creditors as being a unified entity with assets and liabilities in common
with Lessee.
(iii) Lessee shall conduct its business so as not to mislead others
as to the separate identity of Lessor, and particularly will avoid the
appearance of conducting business on behalf of Lessor. Without limiting
the generality of the foregoing, no oral and written communications of
Lessee, including, without limitation, letters, invoices, purchase orders,
contracts, statements and loan applications, will be made in the name of
Lessor which to the extent that to do otherwise would materially bear upon
the maintenance of Lessor's separate identity.
(iv) Lessee will not act in Lessor's name.
(v) Where necessary and appropriate, Lessee shall disclose the
independent business status of Lessor to creditors of Lessee, if any.
(vi) The resolutions, agreements and other instruments of Lessee, if
any, underlying the transactions described in this Lease will be
maintained by Lessee.
(vii) All transactions between Lessee and Lessor will be no less
fair to each party than they could obtain on an arm's-length basis.
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(viii) The books, records and accounts of Lessee shall at all times
be maintained in a manner permitting the assets and liabilities of Lessor
to be easily separated and readily ascertained from those of Lessee.
(ix) Lessee will not direct, or otherwise control, the ongoing
business decisions of Lessor.
(x) Lessee will not file or cause to be filed a voluntary or
involuntary petition in bankruptcy on behalf of or against Lessor.
B. TRANSFER AND PARTICIPATION COVENANTS. (i) Lessee agrees to
cooperate and to cause the Permitted Sublessees to cooperate, in good
faith with Lessor and Lender in connection with any Transfer and/or
Participation of any of the Notes, Mortgages and/or any of the Loan
Documents, or any or all servicing rights with respect thereto, including,
without limitation, (x) providing such documents, financial and other
data, and other information and materials (the "Disclosures") which would
typically be required with respect to Lessee and Permitted Sublessees by a
purchaser, transferee, assignee, servicer, participant, investor or rating
agency involved with respect to such Transfer and/or Participation as
applicable; provided, however, Lessee shall not be required to make
Disclosures of any confidential information or any information which has
not previously been made public unless required by applicable federal or
state securities laws; and (y) amending the terms of this Lease to the
extent necessary so as to satisfy the requirements of purchasers,
transferees, assignees, servicers, participants, investors or selected
rating agencies involved in any such Transfer or Participation so long as
such amendments would not increase the Base Annual Rental or Additional
Rental required to be paid under this Lease or have a material adverse
effect upon Lessee or the transactions contemplated by this Lease.
(ii) Lessee consents to Lessor and Lender providing the Disclosures,
as well as any other information which Lessor and Lender may now have or
hereafter acquire with respect to the Properties or the financial
condition of Lessee to each purchaser, transferee, assignee, servicer,
participant, investor or rating agency involved with respect to such
Transfer and/or Participation, as applicable. Lessee shall pay its own
attorney fees and other out-of-pocket expenses incurred in connection with
the performance of its obligations under this Section 8.B in an amount not
to exceed $7,500.00.
C. COMPLIANCE CERTIFICATE. Within 60 days after the end of each
fiscal year of Lessee, Lessee and Permitted Sublessees shall deliver to
Lessor such compliance certificates as Lessor may reasonably require in
order to establish that Lessee and Permitted Sublessees are in compliance
in all material respects with all of the obligations, duties and covenants
imposed pursuant to Section 8.
9. RENTALS TO BE NET TO LESSOR. The Base Annual Rental payable hereunder
shall be net to Lessor, so that this Lease shall yield to Lessor the rentals
specified during the Lease Term, and that all costs, expenses and obligations of
every kind and nature whatsoever relating to the Properties shall be performed
and paid by Lessee.
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10. TAXES AND ASSESSMENTS. Lessee shall pay, or shall cause the Permitted
Sublessees to pay, prior to the earlier of delinquency or the accrual of
interest on the unpaid balance, all taxes and assessments of every type or
nature assessed against, imposed upon or arising with respect to Lessor, any of
the Properties, this Lease, the rental or other payments due under this Lease or
Lessee during the Lease Term which affect in any manner the net return realized
by Lessor under this Lease, including, without limitation, the following:
A. All taxes and assessments upon any of the Properties or any part
thereof and upon any Personalty, whether belonging to Lessor, Lessee or
any Permitted Sublessee, or any tax or charge levied in lieu of such taxes
and assessments;
B. All taxes, charges, license fees and or similar fees imposed by
reason of the use of any of the Properties by Lessee and the Permitted
Sublessees; and
C. All excise, transaction, privilege, license, sales, use and other
taxes upon the rental or other payments due under this Lease, the
leasehold estate of either party or the activities of either party
pursuant to this Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay and cause to be paid all taxes which are imposed on
the rental or other payments due under this Lease, in no event will Lessee be
required to pay any net income taxes (i.e., taxes which are determined taking
into account deductions for depreciation, interest, taxes and ordinary and
necessary business expenses) or franchise taxes of Lessor (unless imposed in
lieu of other taxes that would otherwise be the obligation of Lessee under this
Lease, including, without limitation, any "gross receipts tax" or any similar
tax based upon gross income or receipts of Lessor with respect to this Lease
which does not take into account deductions from depreciation, interest, taxes
and/or ordinary or necessary business expenses), any transfer taxes of Lessor,
or any tax imposed with respect to the sale, exchange or other disposition by
Lessor, in whole or in part, of any of the Properties or Lessor's interest in
this Lease (other than transfer or recordation taxes imposed in connection with
the transfer of any of the Properties to Lessee, the substitution of a
Substitute Property or the termination of this Lease pursuant to the provisions
of this Lease).
All taxing authorities shall be instructed to send all tax and assessment
invoices to Lessee and Lessee shall promptly provide Lessor and Lender with
copies of all tax and assessment invoices received by Lessee. Upon request,
Lessee shall also provide Lessor and Lender with evidence that such invoices
were paid in a timely fashion. Lessee may, at its own expense, contest or cause
to be contested (in the case of any item involving more than $1,000.00, after
prior written notice to Lessor), by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any item specified in this Section or lien therefor,
provided that (i) such proceeding shall suspend the collection thereof from the
applicable Properties or any interest therein, (ii) none of such Properties nor
any interest therein would be in any danger of being sold, forfeited or lost by
reason of such proceedings, (iii) no Event of Default has occurred, and (iv)
Lessee shall have deposited with Lessor adequate reserves for the payment of the
taxes, together with all interest and penalties thereon, unless paid in full
under protest, or Lessee shall have furnished the security as may be required in
the proceeding or as may be required by Lessor to ensure payment of any
contested taxes.
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11. UTILITIES. Lessee and the applicable Permitted Sublessee shall
contract, in their own name, for and pay when due all charges for the connection
and use of water, gas, electricity, telephone, garbage collection, sewer use and
other utility services supplied to the Properties during the Lease Term. Under
no circumstances shall Lessor be responsible for any interruption of any utility
service.
12. INSURANCE. Throughout the Lease Term, Lessee shall maintain and cause
the Permitted Sublessees to maintain with respect to each of the Properties, at
their sole expense, the following types and amounts of insurance (which may be
included under a blanket insurance policy if all the other terms hereof are
satisfied):
A. Insurance against loss, damage or destruction by fire and other
casualty, including theft, vandalism and malicious mischief, flood (for
each of the Properties which is in a location designated by the Federal
Emergency Management Administration as a Special Flood Hazard Area),
earthquake (for each of the Properties which is in an area subject to
destructive earthquakes within recorded history), boiler explosion (for
each of the Properties with a boiler), plate glass breakage, sprinkler
damage (for each of the Properties which has a sprinkler system), all
matters covered by a standard extended coverage endorsement, all matters
covered by a special coverage endorsement commonly known as an "all-risk"
endorsement and such other risks as Lessor may reasonably require,
insuring each of the Properties for not less than 100% of their full
insurable replacement cost.
B. Commercial general liability and property damage insurance,
including a products liability clause, covering Lessor, Lessee and
Permitted Sublessees against bodily injury liability, property damage
liability and automobile bodily injury and property damage liability,
including without limitation any liability arising out of the ownership,
maintenance, repair, condition or operation of the Properties or adjoining
ways, streets or sidewalks and, if applicable, insurance covering Lessor,
Lessee and Permitted Sublessees against liability arising from the sale of
liquor, beer or wine on the Properties. Such insurance policy or policies
shall contain a broad form contractual liability endorsement under which
the insurer agrees to insure Lessee's obligations under Section 19 hereof
to the extent insurable, and a "severability of interest" clause or
endorsement which precludes the insurer from denying the claim of Lessee,
Permitted Sublessees or Lessor because of the negligence or other acts of
the other, shall be in amounts of not less than $1,000,000.00 per injury
and occurrence with respect to any insured liability, whether for personal
injury or property damage, or such higher limits as Lessor or Lender may
reasonably require from time to time, and shall be of form and substance
satisfactory to Lessor.
C. Business income insurance or rental interruption insurance, as
requested by Lessor, equal to 100% of the Base Annual Rental for a period
of not less than 12 months.
D. State worker's compensation insurance in the statutorily mandated
limits, employer's liability insurance with limits not less than $500,000
or such greater amount
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as Lessor may from time to time require and such other insurance as may be
necessary to comply with applicable laws.
E. Such other insurance as may from time to time be reasonably
required by Lessor or Lender in order to protect their respective
interests with respect to the Properties.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the insurer as to
claims against Lessor, Lender and their respective employees and
agents;
(ii) Provide that any "no other insurance" clause in the
insurance policy shall exclude any policies of insurance maintained
by Lessor or Lender and that the insurance policy shall not be
brought into contribution with insurance maintained by Lessor or
Lender;
(iii) Contain a standard without contribution mortgage clause
endorsement in favor of Lender and any other party designated by
Lessor;
(iv) Provide that the policy of insurance shall not be
terminated, cancelled or substantially modified without at least
thirty (30) days' prior written notice to Lessor, Lender and to any
other party covered by any standard mortgage clause endorsement;
(v) Provide that the insurer shall not have the option to
restore the applicable Properties if Lessor or Lessee elects to
terminate this Lease in accordance with the terms hereof;
(vi) Be issued by insurance companies licensed to do business
in the states in which the Properties are located and which are
rated A:VI or better by A.M. Best's Insurance Guide or are otherwise
approved by Lessor; and
(vii) Provide that the insurer shall not deny a claim nor
shall the insurance be cancelled, invalidated or suspended by (1)
any action, inaction, conduct or negligence of Lessor, Lender or any
other party covered by any standard mortgage clause endorsement,
Lessee, anyone acting for Lessee or any subtenant or other occupant
of any of the Properties, (2) occupancy or use of any of the
Properties for purposes more hazardous than permitted by such
policies, (3) any foreclosure or other proceedings relating to any
of the Properties or change in title to or ownership of any of the
Properties, or (4) any breach or violation by Lessee or any other
person of any warranties, declarations or conditions contained in
such policies or the applications for such policies.
It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Lessee for its acts or
omissions as provided in this Lease. All insurance policies (with the exception
of worker's compensation insurance to the extent not available under statutory
law), shall designate Lessor and Lender as additional named insureds as
15
their interests may appear and shall be payable as set forth in Section 21
hereof. All such policies shall be written as primary policies, with deductibles
not to exceed 10% of the amount of coverage. Any other policies, including any
policy now or hereafter carried by Lessor, or Lender, shall serve as excess
coverage. Lessee shall procure and cause Permitted Sublessees to procure
policies for all insurance for periods of not less than one year and shall
provide to Lessor, and Lender certificates of insurance or, upon the request of
Lessor, or Lender, duplicate originals of insurance policies evidencing that
insurance satisfying the requirements of this Lease is in effect at all times.
In the event of any transfer by Lessor of Lessor's interest in any of the
Properties or any financing or refinancing of Lessor's interest in any of the
Properties, Lessee shall, upon not less than ten (10) days' prior written
notice, deliver to Lessor or any Lender providing such financing or refinancing,
as the case may be, certificates of all insurance required to be maintained and
caused to be maintained by Lessee and the Permitted Sublessees hereunder naming
such transferee or such Lender, as the case may be, as an additional named
insured to the extent required herein effective as of the date of such transfer,
financing or refinancing.
13. TAX AND INSURANCE IMPOUND. Upon the occurrence of an Event of Default,
Lessor may require Lessee to pay to Lessor sums which will provide an impound
account (which shall not be deemed a trust fund) for paying up to the next one
year of taxes, assessments and/or insurance premiums for each of the Properties.
Upon such requirement, Lessor will estimate the amounts needed for such purposes
and will notify Lessee to pay the same to Lessor in equal monthly installments,
as nearly as practicable, in addition to all other sums due under this Lease.
Should additional funds be required at any time, Lessee shall pay the same to
Lessor on demand. Lessee shall advise Lessor of all taxes and insurance bills
which are due and shall cooperate fully with Lessor in assuring that the same
are paid timely. Lessor may deposit all impounded funds in accounts insured by
any federal or state agency and may commingle such funds with other funds and
accounts of Lessor. Interest or other gains from such funds, if any, shall be
the sole property of Lessor. In the event of any default by Lessee, Lessor may
apply all impounded funds against any sums due from Lessee to Lessor. Lessor
shall give to Lessee an annual accounting showing all credits and debits to and
from such impounded funds received from Lessee.
14. PAYMENT OF RENTAL AND OTHER SUMS. All rental and other sums which
Lessee is required to pay hereunder shall be the unconditional obligation of
Lessee and shall be payable in full when due without any setoff, abatement,
deferment, deduction or counterclaim whatsoever. Upon execution of this Lease,
Lessee shall establish arrangements whereby payments of the Base Monthly Rental
and impound payments, if any, are transferred by Automated Clearing House Debit
directly from Lessee's bank account to such account as Lessor may designate. Any
delinquent payment (that is, any payment not made within five calendar days
after the date when due) shall, in addition to any other remedy of Lessor, incur
a late charge of 5% (which late charge is intended to compensate Lessor for the
cost of handling and processing such delinquent payment and should not be
considered interest) and bear interest at the Default Rate, such interest to be
computed from and including the date such payment was due through and including
the date of the payment; provided, however, in no event shall Lessee be
obligated to pay a sum of late charge and interest higher than the maximum legal
rate then in effect.
15. USE. Lessee and the Permitted Sublessees shall occupy the Properties
promptly following the Effective Date and, except as set forth below and except
during periods when any
16
of the Properties is untenantable by reason of fire or other casualty or
condemnation (provided, however, during all such periods while any of the
Properties is untenantable, Lessee shall strictly comply with the terms and
conditions of Section 21 of this Lease). Lessee may cease or permit a Permitted
Sublessee to cease diligent operation of business at any of the Properties for a
period not to exceed 180 days; provided, however, Lessee may not cease or permit
a Permitted Sublessee to cease diligent operation at more than two Properties at
any one time and Lessee may cease or permit a Permitted Sublessee to cease
operation only once with respect to each Property within any five-year period
during the Lease Term. If Lessee or a Permitted Sublessee does discontinue
operation as permitted by this Section, Lessee shall (i) give written notice to
Lessor within 10 days after Lessee or a Permitted Sublessee elects to cease
operation, (ii) provide adequate protection and maintenance of any such
Properties during any period of vacancy, (iii) comply with all Applicable
Regulations and otherwise comply with the terms and conditions of this Lease
other than the continuous use covenant set forth in this Section, and (iv) pay
all costs necessary to restore such Properties to their condition on the day
operation of the business ceased at such time as such Properties are reopened
for business operations or other substituted use approved by Lessor as
contemplated below. Notwithstanding anything herein to the contrary, Lessee
shall pay the Base Monthly Rental on the first day of each month during any
period in which Lessee discontinues operation.
Lessee shall not, by itself or through any assignment, sublease or other
type of transfer, convert any of the Properties to a use other than a Permitted
Facility during the Lease Term without Lessor's consent, which consent shall not
be unreasonably withheld or delayed. Lessor may consider any or all of the
following in determining whether to grant its consent, without being deemed to
be unreasonable: (i) whether the rental paid to Lessor would be equal to or
greater than the anticipated rental assuming continued existing use, (ii)
whether the proposed rental to be paid to Lessor is reasonable considering the
converted use of the Properties and the customary rental prevailing in the
community for such use, (iii) whether the converted use will be consistent with
the highest and best use of the Properties, and (iv) whether the converted use
will increase Lessor's risks or decrease the value of the Properties.
16. COMPLIANCE WITH LAWS, RESTRICTIONS, COVENANTS AND ENCUMBRANCES. A.
Lessee's and the Permitted Sublessees' use and occupation of each of the
Properties, and the condition thereof, shall, at Lessee's and the Permitted
Sublessees' sole cost and expense, comply in all material respects with all
Applicable Regulations and all restrictions, covenants and encumbrances of
record with respect to each of the Properties. In addition to the other
requirements of this Section, Lessee shall, at all times throughout the Lease
Term, comply with and cause the Permitted Sublessees to comply with all
Applicable Regulations, including, without limitation, in connection with any
maintenance, repairs and replacements of the Properties undertaken by Lessee as
required by Section 17 of this Lease.
B. Lessee will not permit any act or condition to exist on or about any of
the Properties which will increase any insurance rate thereon, except when such
acts are required in the normal course of business and Lessee shall pay for such
increase.
C. Without limiting the generality of the other provisions of this
Section, Lessee agrees that it shall be responsible for complying in all
respects with and causing compliance in all respects with the Americans with
Disabilities Act of 1990, as such act may be amended from
17
time to time, and all regulations promulgated thereunder (collectively, the
"ADA"), as it affects the Properties, including, but not limited to, making
required "readily achievable" changes to remove any architectural or
communications barriers, and providing auxiliary aides and services within the
Properties. Lessee further agrees that any and all alterations made to the
Properties during the Lease Term will comply with the requirements of the ADA.
All plans for alterations which must be submitted to Lessor under the provisions
of Section 18 must include a statement from a licensed architect or engineer
certifying that they have reviewed the plans, and that the plans substantially
comply with all applicable provisions of the ADA. Any subsequent approval or
consent to the plans by Lessor shall not be deemed to be a representation of
Lessor's part that the plans comply with the ADA, which obligation shall remain
with Lessee. Lessee agrees that it will defend, indemnify and hold harmless the
Indemnified Parties from and against any and all Losses caused by, incurred or
resulting from Lessee's failure to comply with its obligations under this
Section.
D. Lessee represents and warrants to Lessor, as of the Effective Date, to
Lessee's knowledge and except as disclosed in the Questionnaires:
(i) None of the Properties nor Lessee are in violation of, or
subject to, any pending or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any
Environmental Laws, and this representation and warranty would continue to
be true and correct following disclosure to the applicable Governmental
Authorities of all relevant facts, conditions and circumstances, if any,
pertaining to the Properties.
(ii) No permits, licenses or similar authorizations to construct,
occupy, operate or use any buildings, improvements, fixtures and equipment
forming a part of any of the Properties by reason of any Environmental
Laws have been obtained or are required to be obtained, except for such
permits, licenses or authorizations the failure of which to obtain could
reasonably be expected to have a Material Adverse Effect.
(iii) No Hazardous Materials have been used, handled, manufactured,
generated, produced, stored, treated, processed, transferred, disposed of
or otherwise Released in, on, under, from or about any of the Properties,
except in De Minimis Amounts.
(iv) The Properties do not contain Hazardous Materials, other than
in De Minimis Amounts, or underground storage tanks.
(v) There is no threat of any Release migrating to any of the
Properties.
(vi) There is no past or present non-compliance with Environmental
Laws, or with permits issued pursuant thereto, in connection with any of
the Properties which could reasonably be expected to have a material
adverse effect.
(vii) Lessee has not received any written or oral notice or other
communication from any person or entity (including but not limited to a
Governmental Authority) relating to Hazardous Materials or Remediation
thereof, of possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in
18
connection with any of the Properties, or any actual or potential
administrative or judicial proceedings in connection with any of the
foregoing, in each case with respect to a condition or event that could
reasonably be expected to have a Material Adverse Effect.
(viii) Lessee has truthfully and fully provided to Lessor, in
writing, any and all information relating to environmental conditions in,
on, under or from the Properties that is known to Lessee and that is
contained in Lessee's files and records, including but not limited to any
reports relating to Hazardous Materials in, on, under to or from any of
the Properties.
(ix) All uses and operations on or of the Properties, whether by
Lessee or any other person or entity, have been in compliance with all
Environmental Laws and permits issued pursuant thereto, except for such
non-compliance which could not reasonably be expected to have a Material
Adverse Effect; there have been no Releases in, on, under to or from any
of the Properties, except in De Minimis Amounts; there are no Hazardous
Materials in, on, or under or to Lessee's knowledge, migrating to any of
the Properties, except in De Minimis Amounts; and the Properties have been
kept free and clear of all liens and other encumbrances imposed pursuant
to any Environmental Law (the "Environmental Liens"). Lessee has not
allowed any tenant or other user of any of the Properties to do any act
that materially increased the dangers to human health or the environment,
posed an unreasonable risk of harm to any person or entity (whether on or
off the Properties), impaired the value of any of the Properties, is
contrary to any requirement of any insurer, constituted a public or
private nuisance, constituted waste, or violated any covenant, condition,
agreement or easement applicable to any of the Properties.
E. Lessee covenants to Lessor during the Lease Term that: (i) the
Properties shall not be in violation of or subject to any investigation or
inquiry by any Governmental Authority or to any remedial or other obligations
under any Environmental Laws, except for such violations or investigations or
inquiries which relate to Hazardous Materials in De Minimis Amounts which are or
will be handled in accordance with applicable law. If any such investigation or
inquiry is initiated, Lessee shall promptly notify Lessor; (ii) all uses and
operations on or of each of the Properties, whether by Lessee, a Permitted
Sublessee or any other person or entity, shall be in compliance with all
Environmental Laws and permits issued pursuant thereto; (iii) there shall be no
Releases in, on, under or from any of the Properties, except in De Minimis
Amounts; (iv) there shall be no Hazardous Materials in, on, or under any of the
Properties, except in De Minimis Amounts; (v) Lessee shall keep each of the
Properties free and clear of all Environmental Liens, whether due to any act or
omission of Lessee or any other person or entity; (vi) Lessee shall, at its sole
cost and expense, fully and expeditiously cooperate in all activities pursuant
to subsection F below, including but not limited to providing all relevant
information and making knowledgeable persons available for interviews; (vii)
Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
any of the Properties as may be reasonably requested by Lessor and where there
is an independent reasonable reason to perform such investigation (including but
not limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Lessor the reports and other results thereof, and Lessor and the
other Indemnified Parties shall be entitled to rely on
19
such reports and other results thereof; (viii) Lessee shall, at its sole cost
and expense, comply with all reasonable written requests of Lessor to (1)
reasonably effectuate Remediation of any condition (including but not limited to
a Release) in, on, under or from any of the Properties where such Remediation is
required under applicable Environmental Law; (2) comply with any Environmental
Law; (3) comply with any directive from any Governmental Authority; and (4) take
any other reasonable action necessary or appropriate for protection of human
health or the environment where such Remediation is required under applicable
Environmental Law; (ix) Lessee shall not do or allow any Permitted Sublessee or
any other tenant or other user of any of the Properties to do any act that
materially increases the dangers to human health or the environment, poses an
unreasonable risk of harm to any person or entity (whether on or off any of the
Properties), impairs or may impair the value of any of the Properties, is
contrary to any requirement of any insurer or Lender, constitutes a public or
private nuisance, constitutes waste, or violates any covenant, condition,
agreement or easement applicable to any of the Properties; and (x) Lessee shall
immediately notify Lessor in writing of (A) any presence of Releases or
Threatened Releases in, on, under, from or migrating towards any of the
Properties; (B) any non-compliance with any Environmental Laws related in any
way to any of the Properties; (C) any actual Environmental Lien; (D) any
required or proposed Remediation of environmental conditions relating to any of
the Properties; and (E) any written or oral notice or other communication of
which Lessee becomes aware from any source whatsoever (including but not limited
to a Governmental Authority) relating in any way to Hazardous Materials or
Remediation thereof, possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with any of the
Properties, or any actual or potential administrative or judicial proceedings in
connection with anything referred to in this Section.
X. Xxxxxx, Lender and any other person or entity designated by Lessor,
including but not limited to any receiver, any representative of a Governmental
Authority, and any environmental consultant, shall have the right, after five
Business Days' prior written notice to Lessee (except that in the event of an
emergency no such prior notice shall be required) but not the obligation, to
enter upon the Properties at all reasonable times (including, without
limitation, in connection with any Participation or Transfer or in connection
with a proposed sale or conveyance of any of the Properties or a proposed
financing or refinancing secured by any of the Properties or in connection with
the exercise of any remedies set forth in this Lease, the Mortgages or the other
Loan Documents, as applicable) to assess any and all aspects of the
environmental condition of the Properties and its use, including but not limited
to conducting any environmental assessment or audit (the scope of which shall be
determined in the sole and absolute discretion of the party conducting the
assessment but which events shall be reasonable and in proportion to the
environmental conditions at the property) and taking samples of soil,
groundwater or other water, air, or building materials, and conducting other
invasive testing; provided, however, that any such persons (except in
emergencies) shall use reasonable efforts to undertake any such assessments or
investigations so as to minimize the impact on business operations at the
Properties. Lessee shall cooperate with and provide access to Lessor, Lender and
any other person or entity designated by Lessor. Any such assessment and
investigation shall be at Lessee's sole cost and expense.
G. Lessee shall, at its sole cost and expense, protect, defend, indemnify,
release and hold harmless each of the Indemnified Parties for, from and against
any and all Losses (excluding Losses suffered by an Indemnified Party directly
arising out of such Indemnified
20
Party's gross negligence or willful misconduct; provided, however, that the term
"gross negligence" shall not include gross negligence imputed as a matter of law
to any of the Indemnified Parties solely by reason of the Lessor's interest in
any of the Properties or Lessor's failure to act in respect of matters which are
or were the obligation of Lessee under this Lease) and costs of Remediation
(whether or not performed voluntarily), engineers' fees, environmental
consultants' fees, and costs of investigation (including but not limited to
sampling, testing, and analysis of soil, water, air, building materials and
other materials and substances whether solid, liquid or gas) imposed upon or
incurred by or asserted against any Indemnified Parties, and directly or
indirectly arising out of or in any way relating to any one or more of the
following: (i) any presence of any Hazardous Materials in, on, above, under or
from any of the Properties; (ii) any past or present Release or Threatened
Release in, on, above, under or from any of the Properties; (iii) any activity
by Lessee, a Permitted Sublessee, any person or entity affiliated with Lessee or
a Permitted Sublessee or any other tenant or other user of any of the Properties
in connection with any actual, proposed or threatened use, treatment, storage,
holding, existence, disposition or other Release, generation, production,
manufacturing, processing, refining, control, management, abatement, removal,
handling, transfer or transportation to or from any of the Properties of any
Hazardous Materials at any time located in, under, on or above any of the
Properties; (iv) any activity by Lessee, a Permitted Sublessee, any person or
entity affiliated with Lessee or a Permitted Sublessee or any other tenant or
other user of any of the Properties in connection with any actual or proposed
Remediation of any Hazardous Materials at any time located in, under, on or
above any of the Properties, whether or not such Remediation is voluntary or
pursuant to court or administrative order, including but not limited to any
removal, remedial or corrective action; (v) any non-compliance or violations of
any Environmental Laws (or permits issued pursuant to any Environmental Law) in
connection with any of the Properties or operations thereon, including but not
limited to any failure by Lessee, a Permitted Sublessee, any person or entity
affiliated with Lessee or a Permitted Sublessee or any other tenant or other
user of any of the Properties to comply with any order of any Governmental
Authority in connection with any Environmental Laws; (vi) the imposition,
recording or filing of any Environmental Lien encumbering any of the Properties;
(vii) any administrative processes or proceedings or judicial proceedings in any
way connected with any matter addressed in this Section; (viii) any Remediation
required pursuant to Environmental Laws relating to injury to, destruction of or
loss of natural resources in any way connected with any of the Properties,
including but not limited to costs to investigate and assess such injury,
destruction or loss; (ix) any acts of Lessee, a Permitted Sublessee, any person
or entity affiliated with Lessee or a Permitted Sublessee or any other tenant or
user of any of the Properties in arranging for disposal or treatment, or
arranging with a transporter for transport for disposal or treatment, of
Hazardous Materials owned or possessed by Lessee, a Permitted Sublessee, any
person or entity affiliated with Lessee or a Permitted Sublessee or any other
tenant or user of any of the Properties, at any facility or incineration vessel
owned or operated by another person or entity and containing such or similar
Hazardous Materials; (x) any acts of Lessee, a Permitted Sublessee, any person
or entity affiliated with Lessee or a Permitted Sublessee or any other tenant or
user of any of the Properties, in accepting any Hazardous Materials for
transport to disposal or treatment facilities, incineration vessels or sites
selected by Lessee, a Permitted Sublessee, any person or entity affiliated with
Lessee or a Permitted Sublessee or any other tenant or user of any of the
Properties, from which there is a Release, or a Threatened Release of any
Hazardous Materials which causes the incurrence of costs for Remediation; (xi)
any personal injury, wrongful death,
21
or property damage arising under any statutory or common law or tort law theory,
relating to the use or presence of Hazardous Materials at the Properties; and
(xii) any misrepresentation or inaccuracy in any representation or warranty or
material breach or failure to perform any covenants or other obligations
pursuant to this Section.
H. The obligations of Lessee and the rights and remedies of the
Indemnified Parties under the foregoing subsections D through G shall survive
the termination, expiration and/or release of this Lease.
17. CONDITION OF PROPERTIES; MAINTENANCE. Lessee, at its own expense, will
maintain and cause the Permitted Sublessees to maintain all parts of each of the
Properties in good repair and sound condition, except for ordinary wear and
tear, and will take all action and will make all structural and non-structural,
foreseen and unforeseen and ordinary and extraordinary changes and repairs or
replacements which may be required to keep all parts of each of the Properties
in good repair and sound condition. Lessee waives any right to (i) require
Lessor to maintain, repair or rebuild all or any part of any of the Properties
or (ii) make repairs at the expense of Lessor, pursuant to any Applicable
Regulations at any time in effect.
18. WASTE; ALTERATIONS AND IMPROVEMENTS. Neither Lessee nor any Permitted
Sublessee shall commit actual or constructive waste upon any of the Properties.
Neither Lessee nor any Permitted Sublessee shall alter the exterior, structural,
plumbing or electrical elements of any of the Properties in any manner without
the consent of Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed (it being understood and agreed that to the extent Lessor
is required to obtain the approval of Lender with respect to any such
alterations, Lessor shall in no event be deemed to have unreasonably withheld
Lessor's approval thereof if Lender shall not have given its approval if
required); provided, however, Lessee or a Permitted Sublessee may undertake
nonstructural alterations to any of the Properties costing less than $50,000.00
without Lessor's consent. If Lessor's consent is required hereunder and Lessor
consents to the making of any such alterations, the same shall be made according
to plans and specifications approved by Lessor and subject to such other
conditions as Lessor shall require. All alterations shall be made by Lessee or a
Permitted Sublessee shall be at their sole expense by licensed contractors and
in accordance with all applicable laws governing such alterations. Any work at
any time commenced by Lessee or a Permitted Sublessee on any of the Properties
shall be prosecuted diligently to completion, shall be of good workmanship and
materials and shall comply fully with all the terms of this Lease. Upon
completion of any alterations, Lessee shall promptly provide Lessor with (i)
evidence of full payment to all laborers and materialmen contributing to the
alterations, (ii) to the extent Lessor is required to preapprove plans and
specifications for such alterations, an architect's certificate certifying the
alterations to have been completed in conformity with the plans and
specifications, (iii) a certificate of occupancy (if the alterations are of such
a nature as would require the issuance of a certificate of occupancy), and (iv)
any other documents or information reasonably requested by Lessor. Any addition
to or alteration of any of the Properties shall automatically be deemed a part
of the Properties and belong to Lessor, and Lessee and the applicable Permitted
Sublessee shall execute and deliver to Lessor such instruments as Lessor may
require to evidence the ownership by Lessor of such addition or alteration.
Lessee and the applicable Permitted Sublessee shall execute and file or
22
record, as appropriate, a "Notice of Non-Responsibility," or any equivalent
notice permitted under applicable law in the states where the applicable
Properties are located.
19. INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
harmless each of the Indemnified Parties from and against any and all Losses
(excluding Losses suffered by an Indemnified Party arising out of the gross
negligence or willful misconduct of such Indemnified Party; provided, however,
that the term "gross negligence" shall not include gross negligence imputed as a
matter of law to any of the Indemnified Parties solely by reason of the Lessor's
interest in any of the Properties or Lessor's failure to act in respect of
matters which are or were the obligation of Lessee under this Lease) caused by,
incurred or resulting from Lessee's or any Permitted Sublessee's operations of
or relating in any manner to any of the Properties, whether relating to their
original design or construction, latent defects, alteration, maintenance, use by
Lessee, any Permitted Sublessee or any person thereon, supervision or otherwise,
or from any breach of, default under, or failure to perform, any term or
provision of this Lease by Lessee, its officers, employees, agents or other
persons, or to which any Indemnified Party is subject because of Lessor's
interest in any of the Properties, including, without limitation, Losses arising
from (1) any accident, injury to or death of any person or loss of or damage to
property occurring in, on or about any of the Properties or portion thereof or
on the adjoining sidewalks, curbs, parking areas, streets or ways, (2) any use,
non-use or condition in, on or about, or possession, alteration, repair,
operation, maintenance or management of, any of the Properties or any portion
thereof or on the adjoining sidewalks, curbs, parking areas, streets or ways,
(3) any representation or warranty made herein by Lessee, in any certificate
delivered in connection herewith or in any other agreement to which Lessee is a
party or pursuant thereto being false or misleading in any material respect as
of the date of such representation or warranty was made, (4) performance of any
labor or services or the furnishing of any materials or other property in
respect to any of the Properties or any portion thereof, (5) any taxes,
assessments or other charges which Lessee is required to pay or cause to be paid
under Section 10, (6) any lien, encumbrance or claim arising on or against any
of the Properties or any portion thereof under any Applicable Regulation or
otherwise which Lessee is obligated hereunder to remove and discharge or cause
to be removed or discharged, or the failure to comply with any Applicable
Regulation, (7) the claims of any invitees, patrons, licensees or subtenants of
all or any portion of any of the Properties or any Person acting through or
under Lessee or any Permitted Sublessee or otherwise acting under or as a
consequence of this Lease or any sublease, (8) any act or omission of Lessee or
any Permitted Sublessee or their agents, contractors, licensees, subtenants or
invitees, (9) any contest referred to in Section 10, and (10) the sale of
liquor, beer or wine on any of the Properties. It is expressly understood and
agreed that Lessee's obligations under this Section shall survive the expiration
or earlier termination of this Lease for any reason.
20. QUIET ENJOYMENT. So long as Lessee shall pay the rental and other sums
herein provided and shall keep and perform all of the terms, covenants and
conditions on its part herein contained, Lessee shall have, subject and
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Properties. Notwithstanding the foregoing, however, in no event
shall Lessee be entitled to bring any action against Lessor to enforce its
rights hereunder if an Event of Default shall have occurred and be continuing.
21. CONDEMNATION OR DESTRUCTION. A. In the event of a taking of all or any
part of any of the Properties for any public or quasi-public purpose by any
lawful power or authority by
23
exercise of the right of condemnation or eminent domain or by agreement between
Lessor, Lessee and those authorized to exercise such right ("Taking") or the
commencement of any proceedings or negotiations which might result in a Taking
or any damage to or destruction of any of the Properties or any part thereof (a
"Casualty"), Lessee will promptly give written notice thereof to Lessor,
generally describing the nature and extent of such Taking, proceedings,
negotiations or Casualty and including copies of any documents or notices
received in connection therewith. Thereafter, Lessee shall promptly send Lessor
copies of all correspondence and pleadings relating to any such Taking,
proceedings, negotiations or Casualty. During all periods of time following a
Casualty, Lessee shall ensure that the subject Property is secure and does not
pose any risk of harm to adjoining property owners or occupants or
third-parties.
B. In the event of (i) a Taking of the whole of any of the Properties,
other than for temporary use, (ii) a Taking of substantially all of any of the
Properties (other than for temporary use) that results in Lessee making a good
faith determination that the restoration and continued use of the remainder of
such Property as a Permitted Facility would be uneconomic (each of (i) and (ii),
a "Total Taking"), or (iii) a Casualty of substantially all of any of the
Properties that results in Lessee making a good faith determination that the
restoration and continued use of such Property as a Permitted Facility would be
uneconomic (a "Total Casualty"), Lessor shall be entitled to receive the entire
award, insurance proceeds or payment in connection therewith without deduction
for any estate vested in Lessee by this Lease or any Permitted Sublessee by the
Permitted Subleases. Lessee hereby expressly assigns to Lessor all of its right,
title and interest in and to every such award, insurance proceeds or payment and
agrees that neither Lessee nor any Permitted Sublessee shall be entitled to any
award, insurance proceeds or payment for the value of Lessee's leasehold
interest in this Lease. Lessee shall be entitled to claim and receive any award
or payment from the condemning authority expressly granted for the taking of
Personalty, the interruption of its business and moving expenses, but only if
such claim or award does not adversely affect or interfere with the prosecution
of Lessor's claim for the Total Taking or otherwise reduce the amount
recoverable by Lessor for the Total Taking. Lessee shall be entitled to claim
and receive any insurance proceeds with respect to the Personalty, the
interruption of its business and moving expenses, but only if such claim or
proceeds does not adversely affect or interfere with the prosecution of Lessor's
claim for the Total Casualty or otherwise reduce the amount recoverable by
Lessor for the Total Casualty.
In the event of a Total Taking or Total Casualty, Lessee shall have the
right to terminate this Lease with respect to the applicable Property by notice
(the "Termination Notice") given to Lessor not later than 30 days after the
Total Taking or Total Casualty, as applicable. The Termination Notice must: (i)
specify a date on which this Lease with respect to such Property shall
terminate, which date shall be the last day of a calendar month occurring not
earlier than 120 days and not later than 150 days after the delivery of such
notice (the "Early Termination Date"); (ii) contain a certificate executed by
the president, chief financial officer or treasurer of Lessee which (X)
describes the Total Taking or Total Casualty, (Y) represents and warrants that
either the whole of such Property has been taken, or that substantially all of
such Property has been taken and Lessee has determined in good faith that the
restoration and continued use of the remainder of such Property as a Permitted
Facility would be uneconomic, or that substantially all of such Property has
been damaged or destroyed and Lessee has determined in good faith that the
restoration and continued use of such Property as a Permitted Facility would be
uneconomic, and
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(Z) contains a covenant by Lessee that neither Lessee or any Affiliate of Lessee
will use such Property for a period of 2 years following the Early Termination
Date; and (iii) if the Early Termination Date shall occur prior to the
commencement of any extension options which may be exercised pursuant to Section
27, contain either (X) an irrevocable rejectable written offer (the "Rejectable
Offer") of Lessee to purchase Lessor's interest in such Property and in the net
award for such Total Taking or net insurance proceeds for such Total Casualty,
as applicable, after deducting all costs, fees and expenses incident to the
collection thereof, including all costs and expenses incurred by Lessor and
Lender in connection therewith (the "Net Award") on the Early Termination Date
for a purchase price equal to the Stipulated Loss Value (as defined below) for
such Property, or (Y) a Rejectable Substitution Offer to substitute a Substitute
Property satisfying the applicable requirements of Section 57.A for such
Property and Lessor's interest in the Net Award. As used herein, the term
"Stipulated Loss Value" shall mean the sum of (a) the product of the percentage
specified on SCHEDULE I attached hereto which corresponds to the Early
Termination Date multiplied by the Purchase Price for such Property, plus (b)
all Base Annual Rental, Additional Rental and other sums and obligations then
due and payable under this Lease, plus (c) in the event of a Total Casualty
only, the Prepayment Charge corresponding to such Property. In the event of a
termination of this Lease with respect to a Property pursuant to this Section
21.B which does not involve the acceptance (or deemed acceptance) of a
Rejectable Substitution Offer, the Base Annual Rental then in effect shall be
reduced by an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for such Property, and (y) the Base Annual Rental then in effect.
If the Early Termination Date shall occur prior to the commencement of any
extension options which may be exercised pursuant to Section 27, Lessor shall
have 90 days from the delivery of the Termination Notice to deliver to Lessee
written notice of its election to either accept or reject any Rejectable Offer
or Rejectable Substitution Offer contained in the Termination Notice. Lessor's
failure to deliver such notice within such time period shall be deemed to
constitute Lessor's acceptance of the applicable Rejectable Offer or Rejectable
Substitution Offer. If the Mortgage corresponding to such Property is still
outstanding, any rejection of the Rejectable Offer or Rejectable Substitution
Offer by Lessor shall not be effective unless it is consented to in writing by
the Lender and such written consent is delivered to Lessee within such 90-day
period.
If Lessor accepts the Rejectable Offer or is deemed to have accepted the
Rejectable Offer or if, while the Mortgage corresponding to such Property is
still outstanding, any rejection of the Rejectable Offer by Lessor is not
consented to in writing by the Lender, then, on the Early Termination Date,
Lessor shall sell and convey, and Lessee shall purchase for the Stipulated Loss
Value, Lessor's interest in such Property and the Net Award. Lessee's
obligations under this Lease with respect to such Property shall not be
terminated until the applicable Stipulated Loss Value is paid in full. Upon such
payment, (i) Lessor shall convey such Property to Lessee "as-is" by quit-claim
deed, subject to all matters of record (except for the Mortgage corresponding to
such Property and any other consensual liens granted by Lessor other than those
granted by Lessor at the request of Lessee), and without representation or
warranty, and (ii) all obligations of either party hereunder with respect to
such Property shall cease as of the Early Termination Date, provided, however,
Lessee's obligations to the Indemnified Parties under any indemnification
provisions of this Lease with respect to such Property (including, without
limitation, Sections 16 and 19) and Lessee's obligations to pay any sums
(whether payable to
25
Lessor or a third party) accruing under this Lease with respect to such Property
prior to the Early Termination Date shall survive the termination of this Lease
with respect to such Property. This Lease shall, however, continue in full force
and effect with respect to all other Properties.
If Lessor accepts the Rejectable Substitution Offer or is deemed to have
accepted the Rejectable Substitution Offer or if, while the Mortgage
corresponding to such Property is still outstanding, any rejection of the
Rejectable Substitution Offer by Lessor is not consented to in writing by the
Lender, then, on the Early Termination Date, Lessee shall complete such
substitution, subject, however, to the satisfaction of each of the applicable
terms and conditions set forth in Section 57. Upon such substitution (i) Lessee
shall be entitled to claim and receive the Net Award and (ii) all obligations of
either party hereunder with respect to the Property being replaced shall cease
as of the Early Termination Date, provided, however, Lessee's obligations to the
Indemnified Parties under any indemnification provisions of this Lease with
respect to such Property (including, without limitation, Sections 16 and 19) and
Lessee's obligations to pay any sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior to the
Early Termination Date shall survive the termination of this Lease with respect
to such Property. This Lease shall, however, continue in full force and effect
with respect to all other Properties.
Lessee shall be solely responsible for the payment of all costs and
expenses incurred in connection with the conveyance of a Property to Lessee
pursuant to this Section 21, including, without limitation, to the extent
applicable, the cost of title insurance, survey charges, stamp taxes, mortgage
taxes, transfer taxes, charges and fees, escrow and recording fees, water
certification charges and costs, City of Chicago Transaction tax, taxes imposed
on Lessor as a result of such conveyance, taxes imposed in connection with the
transfer of a Property to Lessee or the termination of this Lease with respect
to a Property pursuant to the provisions of this Section 21, Lessee's attorneys'
fees and the reasonable attorneys' fees and expenses of counsel to Lessor and
Lender.
If Lessor rejects the Rejectable Offer or Rejectable Substitution Offer
and, as long as the Mortgage corresponding to the Property subject to such
Rejectable Offer or Rejectable Substitution Offer is still outstanding, such
rejection is consented to in writing by Lender (and such written consent
delivered to Lessee within the applicable 90-day period), or if the Early
Termination Date shall occur after the commencement of any extension options
exercised pursuant to Section 27, then (i) the Net Award shall be paid to and
belong to Lessor, (ii) on the Early Termination Date, Lessee shall pay to Lessor
all Base Annual Rental, Additional Rental and other sums and obligations then
due and payable under this Lease, and (iii) all obligations of either party
hereunder shall cease as of the Early Termination Date with respect to the
applicable Property, provided, however, Lessee's obligations to the Indemnified
Parties with respect to such Property under any indemnification provisions of
this Lease with respect to such Property (including, without limitation,
Sections 16 and 19) and Lessee's obligations to pay any sums (whether payable to
Lessor or a third party) accruing under this Lease with respect to such Property
prior to the Early Termination Date shall survive the termination of this Lease.
This Lease shall, however, continue in full force and effect with respect to all
other Properties.
C. In the event of a Taking of all or any part of any of the Properties
for a temporary use ("Temporary Taking"), this Lease shall remain in full force
and effect without any reduction
26
of Base Annual Rental, Additional Rental or any other sum payable hereunder.
Except as provided below, Lessee shall be entitled to the entire award for a
Temporary Taking, whether paid by damages, rent or otherwise, unless the period
of occupation and use by the condemning authorities shall extend beyond the date
of expiration of this Lease, in which case the award made for such Taking shall
be apportioned between Lessor and Lessee as of the date of such expiration. At
the termination of any such Temporary Taking, Lessee will, at its own cost and
expense and pursuant to the terms of Section 18 above, promptly commence and
complete the restoration of the Property affected by such Temporary Taking;
provided, however, Lessee shall not be required to restore such Property if the
Lease Term shall expire prior to, or within one year after, the date of
termination of such Temporary Taking, and in such event Lessor shall be entitled
to recover the entire award relating to the Temporary Taking.
D. In the event of a Taking which is not a Total Taking or a Temporary
Taking ("Partial Taking") or of a Casualty which is not a Total Casualty (a
"Partial Casualty"), all awards, compensation or damages shall be paid to
Lessor, and Lessor shall have the option to (i) terminate this Lease with
respect to the Property affected, provided that, as long as the Mortgage
corresponding to the applicable Property is still outstanding, Lessor shall have
obtained Lender's prior written consent, by notifying Lessee within 60 days
after Lessee gives Lessor notice of such Partial Casualty or that title has
vested in the taking authority or (ii) continue this Lease in effect, which
election may be evidenced by either a notice from Lessor to Lessee or Lessor's
failure to notify Lessee that Lessor has elected to terminate this Lease with
respect to such Property within such 60-day period. Lessee shall have a period
of 60 days after Lessor's notice that it has elected to terminate this Lease
with respect to such Property during which to elect to continue this Lease with
respect to such Property on the terms herein provided. If Lessor elects to
terminate this Lease with respect to such Property and Lessee does not elect to
continue this Lease with respect to such Property or shall fail during such
60-day period to notify Lessor of Lessee's intent to continue this Lease with
respect to such Property, then this Lease shall terminate with respect to such
Property as of the last day of the month during which such period expired.
Lessee shall then immediately vacate and surrender such Property, all
obligations of either party hereunder with respect to such Property shall cease
as of the date of termination (provided, however, Lessee's obligations to the
Indemnified Parties under any indemnification provisions of this Lease with
respect to such Property (including, without limitation, Sections 16 and 19) and
Lessee's obligations to pay Base Annual Rental, Additional Rental and all other
sums (whether payable to Lessor or a third party) accruing under this Lease with
respect to such Property prior to the date of termination shall survive such
termination) and Lessor may retain all such awards, compensation or damages. The
Lease shall continue in full force and effect with respect to all other
Properties. If Lessor elects not to terminate this Lease with respect to such
Property, or if Lessor elects to terminate this Lease with respect to such
Property but Lessee elects to continue this Lease with respect to such Property,
then this Lease shall continue in full force and effect on the following terms:
(i) all Base Annual Rental, Additional Rental and other sums and obligations due
under this Lease shall continue unabated, and (ii) Lessee shall promptly
commence and diligently prosecute restoration of such Property to the same
condition, as nearly as practicable, as prior to such Partial Taking or Partial
Casualty as approved by Lessor. Subject to reasonable conditions for
disbursement imposed by Lessor, Lessor shall promptly make available in
installments as restoration progresses an amount up to but not exceeding the
amount of any award, compensation or damages received by Lessor after
27
deducting all costs, fees and expenses incident to the collection thereof,
including all costs and expenses incurred by Lessor and Lender in connection
therewith (the "Net Restoration Amount"), upon request of Lessee accompanied by
evidence reasonably satisfactory to Lessor that such amount has been paid or is
due and payable and is properly a part of such costs and that Lessee has
complied with the terms of Section 18 above in connection with the restoration.
Prior to the disbursement of any portion of the Net Restoration Amount with
respect to a Partial Casualty, Lessee shall provide evidence reasonably
satisfactory to Lessor of the payment of restoration expenses by Lessee up to
the amount of the insurance deductible applicable to such Partial Casualty.
Lessor shall be entitled to keep any portion of the Net Restoration Amount which
may be in excess of the cost of restoration, subject to the rights of Lender
under the Loan Documents, and Lessee shall bear all additional costs, fees and
expenses of such restoration in excess of the Net Restoration Amount. If this
Lease is terminated with respect to any Property as a result of a Partial
Casualty, simultaneously with such termination Lessee shall pay Lessor an amount
equal to the insurance deductible applicable to such Partial Casualty.
E. Any loss under any property damage insurance required to be maintained
by Lessee or any Permitted Sublessee shall be adjusted by Lessor and Lessee. Any
award relating to a Total Taking or a Partial Taking shall be adjusted by Lessor
or, at Lessor's election, Lessee. Notwithstanding the foregoing or any other
provisions of this Section to the contrary, if at the time of any Taking or any
Casualty or at any time thereafter Lessee shall be in default under this Lease
and such default shall be continuing, Lessor is hereby authorized and empowered
but shall not be obligated, in the name and on behalf of Lessee and otherwise,
to file and prosecute Lessee's claim, if any, for an award on account of such
Taking or for insurance proceeds on account of such Casualty and to collect such
award or proceeds and apply the same, after deducting all costs, fees and
expenses incident to the collection thereof, to the curing of such default and
any other then existing default under this Lease and/or to the payment of any
amounts owed by Lessee to Lessor under this Lease, in such order, priority and
proportions as Lessor in its discretion shall deem proper.
F. Notwithstanding the foregoing, nothing in this Section 21 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease, including,
without limitation, those provisions set forth in Section 3 of this Lease.
22. INSPECTION. Lessor and its authorized representatives shall have the
right, upon giving reasonable advance notice, to enter any of the Properties or
any part thereof at reasonable times in order to inspect the same and make
photographic or other evidence concerning Lessee's compliance with the terms of
this Lease or in order to show the Properties to prospective purchasers and
lenders. Lessee hereby waives any claim for damages for any injury or
inconvenience to or interference with Lessee's business, any loss of occupancy
or quiet enjoyment of any of the Properties and any other loss occasioned by
such entry so long as Lessor shall have used reasonable efforts not to
unreasonably interrupt Lessee's normal business operations. Lessee shall keep
and maintain and cause the Permitted Sublessees to keep and maintain at the
Properties or Lessee's corporate headquarters full, complete and appropriate
books of account and records of Lessee's business relating to the Properties in
accordance with GAAP. Lessee's and Permitted Sublessees' books and records shall
be open for inspection at reasonable times and upon reasonable notice by Lessor,
Lender and their respective auditors or
28
other authorized representatives and shall show such information as is
reasonably necessary to determine compliance with Lessor's obligations under the
Loan Documents.
23. DEFAULT, REMEDIES AND MEASURE OF DAMAGES. A. Each of the following
shall be an event of default under this Lease (each, an "Event of Default"):
(i) If any representation or warranty of Lessee set forth in this
Lease is false as and when made in any material respect, or if Lessee
renders any statement or account which is false as and when made in any
material respect;
(ii) If any rent or other monetary sum due under this Lease is not
paid within five days from the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lessor shall
not be entitled to exercise its remedies set forth below unless and until
Lessor shall have given Lessee written notice thereof and a period of five
days from the delivery of such written notice shall have elapsed without
such Event of Default being cured;
(iii) If Lessee fails to pay, prior to delinquency, any taxes,
assessments or other charges, the failure of which to pay will result in
the imposition of a lien against any of the Properties or the rental or
other payments due under this Lease or a claim against Lessor, unless
Lessee is contesting such taxes, assessments or other charges in
accordance with the provisions of Section 10 of this Lease; provided,
however, notwithstanding the occurrence of such an Event of Default,
Lessor shall not be entitled to exercise its remedies set forth below
unless and until Lessor shall have given Lessee written notice thereof and
a period of 5 days from the delivery of such written notice shall have
elapsed without such Event of Default being cured;
(iv) If Lessee becomes insolvent within the meaning of the Code,
files or notifies Lessor that it intends to file a petition under the
Code, initiates a proceeding under any similar law or statute relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts
(collectively, hereinafter, an "Action"), becomes the subject of either a
petition under the Code or an Action which is not dissolved within 90 days
after filing, or is not generally paying its debts as the same become due;
(v) If Lessee vacates or abandons any of the Properties other than
in accordance with the provisions of Section 15 of this Lease;
(vi) If Lessee fails to observe or perform any of the other
covenants, conditions or obligations of this Lease; provided, however, if
any such failure does not involve the payment of any monetary sum, is not
willful or intentional, does not place any rights or property of Lessor in
immediate jeopardy, and is within the reasonable power of Lessee to
promptly cure after receipt of notice thereof, all as determined by Lessor
in its reasonable discretion, then such failure shall not constitute an
Event of Default hereunder, unless otherwise expressly provided herein,
unless and until Lessor shall have given Lessee notice thereof and a
period of 30 days shall have elapsed, during which period Lessee may
correct or cure such failure, upon failure of which an Event of Default
shall be deemed to have occurred hereunder without further notice or
demand of any kind
29
being required. If such failure cannot reasonably be cured within such 30
day period, as determined by Lessor in its reasonable discretion, and
Lessee is diligently pursuing a cure of such failure, then Lessee shall
have a reasonable period to cure such failure beyond such 30 day period,
which shall in no event exceed 90 days after receiving notice of such
failure from Lessor. If Lessee shall fail to correct or cure such failure
within such 90-day period, an Event of Default shall be deemed to have
occurred hereunder without further notice or demand of any kind being
required;
(vii) If there is an "Event of Default" or a breach or default,
after the passage of all applicable notice and cure or grace periods,
under any other Sale-Leaseback Document, any of the Other Agreements or
any of the Permitted Subleases;
(viii) If a final, nonappealable judgment is rendered by a court
against Lessee which has a material adverse effect on either the ability
to conduct business at any of the Properties for its intended use or
Lessee's ability to perform its obligations under this Lease, or is in the
amount of $1,000,000.00 or more that is not covered by insurance, and in
either event is not discharged or provision made for such discharge within
60 days from the date of entry thereof; or
(ix) If Lessee shall fail to maintain or cause to be maintained
insurance in accordance with the requirements of Section 12 of this Lease.
B. Upon the occurrence of an Event of Default, with or without notice or
demand, except the notice prior to default required under certain circumstances
by subsection A. above or such other notice as may be required by statute and
cannot be waived by Lessee (all other notices being hereby waived), Lessor shall
be entitled to exercise, at its option, concurrently, successively, or in any
combination, all remedies available at law or in equity, including without
limitation, any one or more of the following:
(i) To terminate this Lease, whereupon Lessee's and Permitted
Sublessees' right to possession of the Properties shall cease and this
Lease, except as to Lessee's liability, and the Permitted Subleases shall
be terminated.
(ii) To reenter and take possession of any or all of the Properties
and, to the extent permissible, all franchises, licenses, area development
agreements, permits and other rights or privileges of Lessee pertaining to
the use and operation of any or all of the Properties and to expel Lessee
and those claiming under or through Lessee, without being deemed guilty in
any manner of trespass or becoming liable for any loss or damage resulting
therefrom, without resort to legal or judicial process, procedure or
action. To extent permitted by applicable law, no notice from Lessor
hereunder or under a forcible entry and detainer statute or similar law
shall constitute an election by Lessor to terminate this Lease unless such
notice specifically so states. If Lessee shall, after default, voluntarily
give up possession of any of the Properties to Lessor, deliver to Lessor
or its agents the keys to any of the Properties, or both, such actions
shall be deemed to be in compliance with Lessor's rights and the
acceptance thereof by Lessor or its agents shall not be deemed to
constitute a termination of this Lease. Lessor reserves the right
following any reentry and/or reletting to exercise its right to terminate
this Lease by
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giving Lessee written notice thereof, in which event this Lease will
terminate as specified in said notice.
(iv) To bring an action against Lessee for any damages sustained by
Lessor or any equitable relief available to Lessor.
(v) To relet any or all of the Properties or any part thereof for
such term or terms (including a term which extends beyond the original
Lease Term), at such rentals and upon such other terms as Lessor, in its
sole discretion, may determine, with all proceeds received from such
reletting being applied to the rental and other sums due from Lessee in
such order as Lessor may, in it sole discretion, determine, which other
sums include, without limitation, all repossession costs, brokerage
commissions, attorneys' fees and expenses, employee expenses, alteration,
remodeling and repair costs and expenses of preparing for such reletting.
Lessor shall attempt to mitigate damages in a commercially reasonable
manner. Lessor reserves the right following any reentry and/or reletting
to exercise its right to terminate this Lease by giving Lessee written
notice thereof, in which event this Lease will terminate as specified in
said notice.
(vi) To recover from Lessee all rent and other monetary sums then
due and owing under this Lease; and (y) to accelerate and recover from
Lessee the present value (discounted at the rate of 6% per annum) of all
rent and other monetary sums scheduled to become due and owing under this
Lease after the date of such breach for the entire original scheduled
Lease Term, provided, however, in no event shall such recovery be less
than the sum of (i) the product of the percentage specified on Schedule I
attached hereto which corresponds to the month in which such Event of
Default first occurred multiplied by the sum of the Purchase Price for all
of the Properties which are then subject to the Lease plus (ii) the sum of
the Prepayment Charges corresponding to all of the Properties which are
then subject to this Lease.
(vii) To recover from Lessee all costs and expenses, including
reasonable attorneys' fees, court costs, expert witness fees, costs of
tests and analyses, travel and accommodation expenses, deposition and
trial transcripts, copies and other similar costs and fees, paid or
incurred by Lessor as a result of such breach, regardless of whether or
not legal proceedings are actually commenced.
(viii) To immediately or at any time thereafter, and with or without
notice, at Lessor's sole option but without any obligation to do so,
correct such breach or default and charge Lessee all costs and expenses
incurred by Lessor therein. Any sum or sums so paid by Lessor, together
with interest at the Default Rate, shall be deemed to be Additional Rental
hereunder and shall be immediately due from Lessee to Lessor. Any such
acts by Lessor in correcting Lessee's breaches or defaults hereunder shall
not be deemed to cure said breaches or defaults or constitute any waiver
of Lessor's right to exercise any or all remedies set forth herein.
(ix) To immediately or at any time thereafter, and with or without
notice, except as required herein, set off any money of Lessee held by
Lessor under this Lease against any sum owing by Lessee or Guarantor
hereunder.
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(x) To seek any equitable relief available to Lessor, including,
without limitation, the right of specific performance.
All powers and remedies given by this Section to Lessor, subject to
applicable law, shall be cumulative and not exclusive of one another or of any
other right or remedy or of any other powers and remedies available to Lessor
under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained in
this Lease, and no delay or omission of Lessor to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto.
Every power and remedy given by this Section or by law to Lessor may be
exercised from time to time, and as often as may be deemed expedient, by Lessor,
subject at all times to Lessor's right in its sole judgment to discontinue any
work commenced by Lessor or change any course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations under
this Lease or in the event of an emergency, then, without waiving any Event of
Default which may result from such failure or emergency, Lessor may, but without
any obligation to do so, take all actions, including, without limitation, entry
upon any or all of the Properties to perform Lessee's obligations, immediately
and without notice in the case of an emergency and upon five days written notice
to Lessee in all other cases. All expenses incurred by Lessor in connection with
performing such obligations, including, without limitation, reasonable
attorneys' fees and expenses, together with interest at the Default Rate from
the date any such expenses were incurred by Lessor until the date of payment by
Lessee, shall constitute Additional Rental and shall be paid by Lessee to Lessor
upon demand.
24. LIENS; MORTGAGES, SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
Lessor's interest in this Lease and/or any of the Properties shall not be
subordinate to any liens or encumbrances placed upon any of the Properties by or
resulting from any act of Lessee, and nothing herein contained shall be
construed to require such subordination by Lessor. Lessee shall keep the
Properties free from any liens for work performed, materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST,
SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF ANY OF THE
PROPERTIES OR LESSEE'S LEASEHOLD INTEREST THEREIN OR THE PERSONALTY, AND ANY
SUCH PURPORTED TRANSACTION WHICH IS NOT APPROVED BY LESSOR SHALL BE VOID.
FURTHERMORE, ANY SUCH PURPORTED TRANSACTION SHALL BE DEEMED A TORTIOUS
INTERFERENCE WITH LESSOR'S RELATIONSHIP WITH LESSEE AND LESSOR'S OWNERSHIP OF
THE PROPERTIES. NOTWITHSTANDING THE FOREGOING, LESSEE MAY PLACE OR ALLOW TO BE
PLACED ANY LIEN, MORTGAGE, DEED OF TRUST, SECURITY INTEREST OR OTHER ENCUMBRANCE
OF ANY KIND UPON ALL OR ANY PART OF LESSEE'S LEASEHOLD INTEREST OR THE
PERSONALTY TO SECURE OBLIGATIONS OF LESSEE OR ITS AFFILIATES TO INSTITUTIONAL
LENDERS FOR INDEBTEDNESS AND OTHER OBLIGATIONS OR ANY REFINANCING THEREOF
("INSTITUTIONAL LOANS".)
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This Lease at all times shall automatically be subordinate to the
Mortgages and to the lien of any and all ground leases, mortgages, trust deeds
and deeds to secure debt now or hereafter placed upon any of the Properties by
Lessor, and Lessee covenants and agrees to execute and deliver, upon demand,
such further instruments subordinating this Lease to the lien of the Mortgages
and any or all such ground leases, mortgages, trust deeds or deeds to secure
debt as shall be desired by Lessor, or any present or proposed mortgagees or
lenders under trust deeds or deeds to secure debt, upon the condition that
Lessee shall have the right to remain in possession of the Properties under the
terms of this Lease, notwithstanding any default in the Mortgages or any or all
such ground leases, mortgages, trust deeds or deeds to secure debt or after
foreclosure of any or all such Mortgages, mortgages, trust deeds or deeds to
secure debt or termination of any or all such ground leases, so long as Lessee
is not in default under any of the covenants, conditions and agreements
contained in this Lease.
If any landlord, mortgagee, receiver, Lender or other secured party elects
to have this Lease and the interest of Lessee hereunder be superior to any of
the Mortgages or any such ground lease, mortgage, trust deed or deed to secure
debt and evidences such election by notice given to Lessee, then this Lease and
the interest of Lessee hereunder shall be deemed superior to any such Mortgage,
ground lease, mortgage, trust deed or deed to secure debt, whether this Lease
was executed before or after such Mortgage, ground lease, mortgage, trust deed
or deed to secure debt and in that event such landlord, mortgagee, receiver,
Lender or other secured party shall have the same rights with respect to this
Lease as if it had been executed and delivered prior to the execution and
delivery of such Mortgage, ground lease, mortgage, trust deed or deed to secure
debt and had been assigned to such landlord, mortgagee, receiver, Lender or
other secured party.
Although the foregoing provisions shall be self-operative and no future
instrument of subordination shall be required, upon request by Lessor, Lessee
shall execute and deliver whatever instruments may be required for such
purposes, and in the event Lessee fails so to do within 10 days after demand,
Lessee does hereby make, constitute and irrevocably appoint Lessor as its agent
and attorney-in-fact and in its name, place and stead so to do, which
appointment shall be deemed coupled with an interest.
In the event any purchaser or assignee of Lender at a foreclosure sale
acquires title to any of the Properties, or in the event Lender or any assignee
otherwise succeeds to the rights of Lessor as landlord under this Lease, Lessee
shall attorn to Lender or such purchaser or assignee, as the case may be (a
"Successor Lessor"), and recognize the Successor Lessor as lessor under this
Lease, and this Lease shall continue in full force and effect as a direct lease
between the Successor Lessor and Lessee, provided that the Successor Lessor
shall only be liable for any obligations of the lessor under this Lease which
accrue after the date that such Successor Lessor acquires title. The foregoing
provision shall be self operative and effective without the execution of any
further instruments.
The Permitted Subleases at all times shall automatically be subordinate to
this Lease and the Mortgages.
25. ESTOPPEL CERTIFICATE. A. At any time, but not more often than twice
every 12 months, and from time to time, Lessee shall, promptly and in no event
later than 10 days after a
33
request from Lessor or Lender, execute, acknowledge and deliver to Lessor or
Lender a certificate in the form supplied by Lessor, Lender or any present or
proposed mortgagee or purchaser designated by Lessor, certifying: (i) that
Lessee has accepted the Properties (or, if Lessee has not done so, that Lessee
has not accepted the Properties, and specifying the reasons therefor); (ii) that
this Lease is in full force and effect and has not been modified (or if
modified, setting forth all modifications), or, if this Lease is not in full
force and effect, the certificate shall so specify the reasons therefor; (iii)
the commencement and expiration dates of the Lease Term, including the terms of
any extension options of Lessee; (iv) the date to which the rentals have been
paid under this Lease and the amount thereof then payable; (v) whether there are
then any existing defaults by Lessor in the performance of its obligations under
this Lease, and, if there are any such defaults, specifying the nature and
extent thereof; (vi) that no notice has been received by Lessee of any default
under this Lease which has not been cured, except as to defaults specified in
the certificate; (vii) the capacity of the person executing such certificate,
and that such person is duly authorized to execute the same on behalf of Lessee;
(viii) that neither Lessor nor Lender has actual involvement in the management
or control of decision making related to the operational aspects or the
day-to-day operations of the Properties; and (ix) any other information
reasonably requested by Lessor, Lender or such present or proposed mortgagee or
purchaser.
B. If Lessee shall fail or refuse to sign a certificate in accordance with
the provisions of this Section within 10 days following a written request by
Lessor, Lessee irrevocably constitutes and appoints Lessor as its
attorney-in-fact to execute and deliver the certificate to any such third party,
it being stipulated that such power of attorney is coupled with an interest and
is irrevocable and binding; provided, however, that Lessor's execution and
delivery of such certificate on behalf of Lessee shall not cure any default
arising by reason of Lessee's failure to execute and deliver such certificate.
26. ASSIGNMENT; SUBLETTING. A. Lessor shall have the right to sell or
convey all, but not less than all, of the Properties or to assign its right,
title and interest as Lessor under this Lease in whole, but not in part. In the
event of any such sale or assignment other than a security assignment, provided
Lessee receives written notice that such purchaser or assignee has assumed all
of Lessor's obligations under this Lease, Lessee shall attorn to such purchaser
or assignee and Lessor shall be relieved, from and after the date of such
transfer or conveyance, of liability for the performance of any obligation of
Lessor contained herein, except for obligations or liabilities accrued prior to
such assignment or sale.
B. Lessee acknowledges that Lessor has relied both on the business
experience and creditworthiness of Lessee and the Permitted Sublessees and upon
the particular purposes for which Lessee and the Permitted Sublessees intend to
use the Properties in entering into this Lease. Without the prior written
consent of Lessor which will not be unreasonably withheld and except as provided
below and for the Permitted Subleases: (i) except as provided in Section 24,
Lessee shall not assign, transfer or convey this Lease or any interest therein,
whether by operation of law or otherwise; (ii) Lessee shall not sublet or
license the use of all or any part of any of the Properties provided, however,
in the event of a foreclosure of any leasehold mortgage, a substitute Lessee may
be designated by Lessee's institutional Lender without the consent of Lessor or
any Substitute Lessor; and (iii) in the event of a foreclosure of the Mortgage,
a substitute Lessor may be designated provided Lessee's right of possession of
the Properties is not
34
disturbed without further consent. Nothing contained herein shall limit any
assignment, pledge or transfer of any stock ownership interest in Lease or
Guarantee, and nothing shall limit the transferability of interests in the
Lessee and the Guarantor.
C. Notwithstanding the foregoing, Lessee shall have the right to sublease
any of the Properties, without the prior written consent of Lessor or Lender, if
the following conditions are satisfied:
(1) no Event of Default shall have occurred and be continuing under
this Lease as of the effective date of such sublease;
(2) any such sublease shall be subordinate to this Lease and the
Mortgage corresponding to the Property to which such sublease relates;
(3) Lessee shall remain liable under this Lease notwithstanding such
sublease; and
(4) the Properties subject to such subleases shall be used as
Permitted Facilities and shall otherwise be operated and maintained in
accordance with the terms and conditions of this Lease.
27. OPTION TO EXTEND; NEW LEASE. A. Lessee shall have the option to
continue this Lease in effect for four additional successive periods of five
years each, provided that, at the time of exercise of such option or at the
expiration of the Lease Term or, if applicable, the preceding extension of the
Lease Term, no Event of Default shall have occurred and be continuing under this
Lease. If Lessee exercises such option, this Lease shall continue for the
applicable period in accordance with the terms and provisions of this Lease then
in effect, except that the Base Annual Rental during each extension period shall
be in an amount set forth on attached Exhibit X. Xxxxxx and Lessee agree that
the Base Annual Rental during each extension period represents the then fair
market value of the Properties.
Lessee may only exercise the first extension option by giving notice to
Lessor of Lessee's intention to do so not later than November 30, 2019. If the
first extension option is exercised by Lessee, Lessee may only exercise the
second extension option by giving notice to Lessor of Lessee's intention to do
so not later than August 31, 2025. If the first two extension options are
exercised, Lessee may only exercise the third extension option by giving notice
to Lessor of Lessee's intention to do so not later than August 31, 2030. If the
first three extension options are exercised, Lessee may only exercise the fourth
extension option by giving notice to Lessor of Lessee's intention to do so not
later than August 31, 2035.
28. RIGHT OF FIRST OFFER TO PURCHASE PROPERTIES. If, during the Lease
Term, Lessor desires to sell its interest in the Properties, as a result of a
third party offer or expression of interest from a third party (which may be
solicited by Lessor and with no requirement that an offer actually be made by
such third party), then, provided no Event of Default has occurred and is
continuing, Lessor shall give Lessee the right to purchase such interest (the
"Interest") for a price and on terms and conditions, determined by Lessor and
set forth in a notice given to Lessee (the "ROFO Notice"). Lessee shall have
thirty (30) days after receipt of the ROFO Notice to elect, in writing, to
acquire such Interest at the price and on such terms and conditions set forth in
35
the ROFO Notice. Lessee's silence shall be deemed a rejection of its right to
acquire such Interest. Any such election by Lessee shall only be effective if
accompanied by Lessee's payment to Lessor of a non-refundable cash down payment
equal to 10% of the price set forth in the ROFO Notice. If Lessee timely and
properly elects to acquire such Interest, the closing shall take place within
one hundred and twenty (120) days after the ROFO Notice. The balance of the
purchase price shall be paid in cash at closing. If Lessee does not timely elect
to acquire such Interest, Lessor shall be free to sell the Interest to any other
Person within one (1) year of Lessee's rejection or deemed rejection without
being required to comply again with the foregoing provisions of this Section,
provided that, if Lessor intends to sell the Interest after such one (1) year
period or within such one (1) year period at a price less than 95% of the price
described in the ROFO Notice or on terms materially more favorable to a
purchaser than those set forth in the ROFO Notice, Lessor shall give Lessee
written notice, setting forth the applicable purchase price and terms and
conditions, and Lessee shall have thirty (30) days to elect in writing to
purchase the Interest at such purchase price and on such terms and conditions.
The right of first offer granted by this Section shall not survive the
expiration or earlier termination of this Lease or the purchase of the
Properties by a third party after Lessee's failure to exercise such right or
Lessee's waiver thereof. Furthermore, the right of first offer granted by this
Section shall not apply to a foreclosure of any of the Mortgages or the delivery
to Lender of a deed in lieu of foreclosure and shall not survive any such
foreclosure or delivery of a deed in lieu of foreclosure. Upon the termination
of this right of first offer, Lessee shall execute such instruments as may be
reasonably required by Lessor to provide constructive notice of the termination
thereof.
Lessor hereby grants Lessee a right of first refusal to purchase the
Properties at the same price and upon the same terms, provisions and conditions
as shall be contained in any written bona fide offer or offers for the amount of
purchase thereof which the Lessor shall at any time during the Original Term or
Option Terms of this Lease, or any extension thereof, be ready and willing to
accept (hereinafter "Purchase Terms"). The Lessor shall give the Lessee written
notice by certified mail of all of the Purchase Terms of each offer that Lessor
is considering and the Lessee shall have thirty (30) days from and after the
receipt of such notice from the Lessor in which to exercise such right of first
refusal. In the event that Lessee shall fail to exercise its right of first
refusal, as aforesaid and Lessor shall not within six (6) months thereafter sell
the Premises upon such Purchase Terms of the bona fide offer Lessor has
selected, Lessee's right of first refusal shall thereafter be reinstated.
29. NOTICES. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Lease shall
be in writing and given by (i) hand delivery, (ii) facsimile, (iii) express
overnight delivery service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a) receipt, if hand
delivered, (b) transmission, if delivered by facsimile, (c) the next Business
Day, if delivered by express overnight delivery service, or (d) the third
Business Day following the day of deposit of such notice with the United States
Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
36
If to Lessee: SLA Mail, Inc.
000 Xxxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Lessor: Xxxxxxx Family, LLC
000 Xxxxxxx Xxxx Xxxx
Xxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. No such notices, consents, approvals or other communications
shall be valid unless Lender receives a duplicate original thereof at the
following address:
General Electric Capital Business Asset Funding Corporation
00000 XX 0xx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
or to such other address or such other person as Lender may from time to time
specify to Lessor and Lessee in a notice delivered in the manner provided above.
30. HOLDING OVER. If Lessee remains in possession of any of the Properties
after the expiration of the term hereof, Lessee, at Lessor's option and within
Lessor's sole discretion, may be deemed a tenant on a month-to-month basis and
shall continue to pay rentals and other sums in the amounts herein provided,
except that the Base Monthly Rental shall be increased by 150%, and to comply
with all the terms of this Lease; provided that nothing herein nor the
acceptance of rent by Lessor shall be deemed a consent to such holding over.
Lessee shall defend, indemnify, protect and hold the Indemnified Parties
harmless from and against any and all Losses resulting from Lessee's failure to
surrender possession upon the expiration of the Lease Term, including, without
limitation, any claims made by any succeeding lessee. The terms of this Section
30 shall survive the expiration of the Lease Term.
31. LANDLORD'S LIEN. Lessor hereby waives any landlord's lien with respect
to Personalty whether arising under any agreement between the Parties hereto or
pursuant to any law, ordinance, regulation or otherwise.
32. REMOVAL OF PERSONALTY. At the expiration of the Lease Term, and if
Lessee is not then in breach hereof, Lessee may remove all Personalty from the
Properties. Lessee shall repair any damage caused by such removal and shall
leave the Properties broom clean and in good and working condition and repair
inside and out. Any property of Lessee left on the Properties on the
37
tenth day following the expiration of the Lease Term shall, at Lessor's option,
automatically and immediately become the property of Lessor.
33. FINANCIAL STATEMENTS. Within 45 days after the end of each fiscal
quarter and within 120 days after the end of each fiscal year of Lessee and
Guarantor, Lessee shall deliver to Lessor and Lender (i) complete financial
statements of Lessee, Guarantor and Permitted Sublessees including a balance
sheet, profit and loss statement, statement of cash flows and all other related
schedules for the fiscal period then ended; and (ii) income statements for the
business at each of the Properties. All such financial statements shall be
prepared in accordance with GAAP and shall be certified to be accurate and
complete by Lessee and Guarantor (or the Treasurer or other appropriate officer
of Lessee and Guarantor). Lessee understands that Lessor and Lender will rely
upon such financial statements and Lessee represents that such reliance is
reasonable. In the event that Lessee's, Guarantor's and Permitted Sublessees'
property and business at the Properties is ordinarily consolidated with other
business for financial statement purposes, such financial statements shall be
prepared on a consolidated basis showing separately the sales, profits and
losses, assets and liabilities pertaining to each of the Properties with the
basis for allocation of overhead of other charges being clearly set forth. The
financial statements delivered to Lessor and Lender need not be audited, but
Lessee shall deliver to Lessor and Lender copies of any audited financial
statements of Lessee and Guarantor which may be prepared, as soon as they are
available.
34. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fire or other casualty beyond the control of the party obligated to perform
shall excuse the performance by such party for a period equal to any such
prevention, delay or stoppage, except the obligations imposed with regard to
rental and other monies to be paid by Lessee pursuant to this Lease and any
indemnification obligations imposed upon Lessee under this Lease.
35. TIME IS OF THE ESSENCE. Time is of the essence with respect to each
and every provision of this Lease in which time is a factor.
36. LESSOR'S LIABILITY. Notwithstanding anything to the contrary provided
in this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that (i) there
shall be absolutely no personal liability on the part of Lessor, its successors
or assigns and the trustees, members, partners, shareholders, officers,
directors, employees and agents of Lessor and its successors or assigns, to
Lessee with respect to any of the terms, covenants and conditions of this Lease,
(ii) Lessee waives all claims, demands and causes of action against the
trustees, members, partners, shareholders, officers, directors, employees and
agents of Lessor and its successors or assigns in the event of any breach by
Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, and (iii) Lessee shall look solely to the Properties for
the satisfaction of each and every remedy of Lessee in the event of any breach
by Lessor of any of the terms, covenants and conditions of this Lease to be
performed by Lessor, or any other matter in connection with this Lease or the
Properties, such exculpation of liability to be absolute and without any
exception whatsoever.
37. CONSENT OF LESSOR. (a) Unless specified otherwise herein, Lessor's
consent to any request of Lessee may be conditioned or withheld in Lessor's sole
discretion. Lessor shall
38
have no liability for damages resulting from Lessor's failure to give any
consent, approval or instruction reserved to Lessor, Lessee's sole remedy in any
such event being an action for injunctive relief.
(b) It is understood and agreed that to the extent Lessor is required to
obtain the consent, approval, agreement or waiver of Lender with respect to a
matter for which Lessor's approval has been requested under this Lease, Lessor
shall in no event be deemed to have unreasonably withheld Lessor's consent,
approval, agreement or waiver thereof if Lender shall not have given its
approval if required.
38. WAIVER AND AMENDMENT. No provision of this Lease shall be deemed
waived or amended except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion. No acceptance by
Lessor of an amount less than the monthly rent and other payments stipulated to
be due under this Lease shall be deemed to be other than a payment on account of
the earliest such rent or other payments then due or in arrears nor shall any
endorsement or statement on any check or letter accompanying any such payment be
deemed a waiver of Lessor's right to collect any unpaid amounts or an accord and
satisfaction.
39. SUCCESSORS BOUND. Except as otherwise specifically provided herein,
the terms, covenants and conditions contained in this Lease shall bind and inure
to the benefit of the respective heirs, successors, executors, administrators
and assigns of each of the parties hereto.
40. NO MERGER. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, shall not result in a merger of Lessor's and
Lessee's estates, and shall, at the option of Lessor, either terminate any or
all existing subleases or subtenancies, or operate as an assignment to Lessor of
any or all of such subleases or subtenancies.
41. CAPTIONS. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
42. SEVERABILITY. The provisions of this Lease shall be deemed severable.
If any part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
43. CHARACTERIZATION. A. It is the intent of the parties hereto that the
business relationship created by this Lease and any Lease related documents is
solely that of a long-term commercial lease between landlord and tenant and has
been entered into by both parties in reliance upon the economic and legal
bargains contained herein. None of the agreements contained herein, is intended,
nor shall the same be deemed or construed, to create a partnership between
Lessor and Lessee, to make them joint venturers, to make Lessee an agent, legal
representative, partner, subsidiary or employee of Lessor, nor to make Lessor in
any way responsible for the debts, obligations or losses of Lessee.
X. Xxxxxx and Lessee acknowledge and warrant to each other that each has
been represented by independent counsel and has executed this Lease after being
fully advised by said
39
counsel as to its effect and significance. This Lease shall be interpreted and
construed in a fair and impartial manner without regard to such factors as the
party which prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party. Whenever in this Lease any words of
obligation or duty are used, such words or expressions shall have the same force
and effect as though made in the form of a covenant.
44. EASEMENTS. During the Lease Term Lessor shall have the right to grant
utility easements on, over, under and above any of the Properties without the
prior consent of Lessee, provided that such easements will not materially
interfere with Lessee's or a Permitted Sublessee's use.
45. BANKRUPTCY. A. As a material inducement to Lessor executing this
Lease, Lessee acknowledges and agrees that Lessor is relying upon (i) the
financial condition and specific operating experience of Lessee and Lessee's and
Permitted Sublessees' obligation to use each of the Properties specifically in
accordance with system-wide requirements imposed from time to time on Permitted
Facilities, (ii) Lessee's timely performance of all of its obligations under
this Lease notwithstanding the entry of an order for relief under the Code for
Lessee and (iii) all defaults under this Lease as to all Properties being cured
promptly and this Lease being assumed within 60 days of any order for relief
entered under the Code for Lessee, or this Lease being rejected within such 60
day period and the Properties surrendered to Lessor.
Accordingly, in consideration of the mutual covenants contained in this
Lease and for other good and valuable consideration, Lessee hereby agrees that:
(i) All obligations that accrue under this Lease (including the
obligation to pay rent), from and after the date that an Action is
commenced shall be timely performed exactly as provided in this Lease and
any failure to so perform shall be harmful and prejudicial to Lessor;
(ii) Any and all obligations under this Lease that become due from
and after the date that an Action is commenced and that are not paid as
required by this Lease shall, in the amount of such rents, constitute
administrative expense claims allowable under the Code with priority of
payment at least equal to that of any other actual and necessary expenses
incurred after the commencement of the Action;
(iii) Any extension of the time period within which Lessee may
assume or reject this Lease without an obligation to cause all obligations
coming due under this Lease from and after the date that an Action is
commenced to be performed as and when required under this Lease shall be
harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within which Lessee
must cure all defaults and compensate Lessor for all pecuniary losses
which extends beyond the date of assumption of this Lease shall be harmful
and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all terms and
conditions of this Lease being assumed by the assignee without alteration
or amendment, and any assignment which results in an amendment or
alteration of the terms and conditions of
40
this Lease without the express written consent of Lessor shall be harmful
and prejudicial to Lessor;
(vi) Any proposed assignment of this Lease to an assignee: (a) that
will not use the Properties specifically in accordance with a franchise,
license and/or area development agreement with the franchisor of Permitted
Facilities, (b) that does not possess financial condition, operating
performance and experience characteristics equal to or better than the
financial condition, operating performance and experience of Lessee as of
the Effective Date, or (c) that does not provide guarantors of the Lease
obligations having a financial condition equal to or better than the
financial condition of Guarantor as of the Effective Date, shall be
harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease for any
reason whatsoever shall constitute cause for immediate relief from the
automatic stay provisions of the Code, and Lessee stipulates that such
automatic stay shall be lifted immediately and possession of the
Properties will be delivered to Lessor immediately without the necessity
of any further action by Lessor; and
(viii) This Lease shall at all times be treated as consistent with
the specific characterizations set forth in Section 3 of this Lease, and
assumption or rejection of this Lease shall be (a) in its entirety, (b)
for all of the Properties, and (c) in strict accordance with the specific
terms and conditions of this Lease.
B. No provision of this Lease shall be deemed a waiver of Lessor's rights
or remedies under the Code or applicable law to oppose any assumption and/or
assignment of this Lease, to require timely performance of Lessee's obligations
under this Lease, or to regain possession of the Properties as a result of the
failure of Lessee to comply with the terms and conditions of this Lease or the
Code.
C. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Lessee to or on behalf of Lessor under this Lease, whether or not
expressly denominated as such, shall constitute "rent" for the purposes of the
Code.
D. For purposes of this Section addressing the rights and obligations of
Lessor and Lessee in the event that an Action is commenced, the term "Lessee"
shall include Lessee's successor in bankruptcy, whether a trustee, Lessee as
debtor in possession or other responsible person.
46. NO OFFER. No contractual or other rights shall exist between Lessor
and Lessee with respect to the Properties until both have executed and delivered
this Lease, notwithstanding that deposits may have been received by Lessor and
notwithstanding that Lessor may have delivered to Lessee an unexecuted copy of
this Lease. The submission of this Lease to Lessee shall be for examination
purposes only, and does not and shall not constitute a reservation of or an
option for Lessee to lease or otherwise create any interest on the part of
Lessee in the Properties.
47. OTHER DOCUMENTS. Each of the parties agrees to sign such other and
further documents as may be necessary or appropriate to carry out the intentions
expressed in this Lease.
41
48. ATTORNEYS' FEES. In the event of any judicial or other adversarial
proceeding between the parties concerning this Lease, to the extent permitted by
law, the prevailing party shall be entitled to recover all of its reasonable
attorneys' fees and other costs in addition to any other relief to which it may
be entitled. Lessor shall, upon demand, be entitled to all attorneys' fees and
all other costs incurred in the preparation and service of any notice or demand
hereunder, whether or not a legal action is subsequently commenced. References
in this Lease to Lessor's attorneys' fees and/or costs shall mean both the fees
and costs of independent counsel retained by Lessor with respect to the matter
and the fees and costs incurred in connection with the matter.
49. ENTIRE AGREEMENT. This Lease and any other instruments or agreements
referred to herein, constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreements except as herein provided. Without limiting the
foregoing, Lessee specifically acknowledges that neither Lessor nor any agent,
officer, employee or representative of Lessor has made any representation or
warranty regarding the projected profitability of the business to be conducted
on the Properties. Furthermore, Lessee acknowledges that Lessor did not prepare
or assist in the preparation of any of the projected figures used by Lessee in
analyzing the economic viability and feasibility of the business to be conducted
by Lessee at the Properties.
50. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. Lessee
acknowledges that this Lease was partially negotiated in the States of
Massachusetts and Illinois. This Lease was partially executed and delivered in
the States of Massachusetts and Illinois. There are substantial contacts between
the parties and the transactions contemplated herein and the State of
Massachusetts and Illinois. For purposes of any action or proceeding arising out
of this Lease, the parties hereto expressly submit to the jurisdiction of all
federal and state courts located in the State of Massachusetts or Illinois
depending on situs of the property. Lessee and Lessor consent that they may be
served with any process or paper by registered mail or by personal service
within or without the State of Massachusetts and Illinois in accordance with
applicable law. Furthermore, Lessee and Lessor waive and agree not to assert in
any such action, suit or proceeding that they are not personally subject to the
jurisdiction of such courts, that the action, suit or proceeding is brought in
an inconvenient forum or that venue of the action, suit or proceeding is
improper. The creation of this Lease and the rights and remedies of Lessor with
respect to the Properties, as provided herein and by the laws of the states in
which the Properties are located, as applicable, shall be governed by and
construed in accordance with the internal laws of the states in which the
Properties are located, as applicable, without regard to principles of conflicts
of law. With respect to other provisions of this Lease, this Lease shall be
governed by the internal laws of the State of Massachusetts or State of
Illinois, depending on the situs of the Property, without regard to its
principles of conflicts of law. Nothing contained in this Section shall limit or
restrict the right of Lessor or Lessee to commence any proceeding in the federal
or state courts located in the states in which the Properties are located to the
extent Lessor or Lessee deems such proceeding necessary or advisable to exercise
remedies available under this Lease.
51. COUNTERPARTS. This Lease may be executed in one or more counterparts,
each of which shall be deemed an original.
42
52. MEMORANDUM OF MASTER LEASE. Concurrently with the execution of this
Lease, Lessor and Lessee are executing the Memorandum to be recorded in the
applicable real property records with respect to each of the Properties.
Further, upon Lessor's request, Lessee agrees to execute and acknowledge a
termination of lease and/or quit claim deed in recordable form with respect to
each of the Properties to be held by Lessor until the expiration or sooner
termination of the Lease Term.
53. NO BROKERAGE. Lessor and Lessee represent and warrant to each other
that they have had no conversation or negotiations with any broker concerning
the leasing of the Properties. Each of Lessor and Lessee agrees to protect,
indemnify, save and keep harmless the other, against and from all liabilities,
claims, losses, costs, damages and expenses, including attorneys' fees, arising
out of, resulting from or in connection with their breach of the foregoing
warranty and representation.
54. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT
DAMAGES. LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY AND ALL ISSUES
PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LESSOR AND LESSEE, LESSEE'S USE OR OCCUPANCY OF ANY OF THE PROPERTIES, AND/OR
ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. THIS
WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY HAS
BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN. FURTHERMORE, LESSEE
AND LESSOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHTS THEY
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM EACH
OTHER AND ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR EMPLOYEES OR
ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL ISSUES PRESENTED IN ANY
ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY EITHER PARTY AGAINST THE
OTHER PARTY OR ANY OF THEIR AFFILIATES, OFFICERS, DIRECTORS, MEMBERS OR
EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY MATTER ARISING OUT OF
OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT CONTEMPLATED HEREIN OR RELATED
HERETO. THE WAIVER BY EITHER PARTY OF ANY RIGHT IT MAY HAVE TO SEEK PUNITIVE,
CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES
HERETO AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
55. RELIANCE BY LENDER. Lessee acknowledges and agrees that Lender may
rely on all of the representations, warranties and covenants set forth in this
Lease, that Lender is an intended third-party beneficiary of such
representations, warranties and covenants and that Lender shall have all rights
and remedies available at law or in equity as a result of a breach of such
representations, warranties and covenants, including to the extent applicable,
the right of subrogation.
43
56. DOCUMENT REVIEW. In the event Lessee makes any request upon Lessor
requiring Lessor, Lender or the attorneys of Lessor or Lender to review and/or
prepare (or cause to be reviewed and/or prepared) any documents, plans,
specifications or other submissions in connection with or arising out of this
Lease, then Lessee shall reimburse Lessor or its designee promptly upon Lessor's
demand therefor for all out-of-pocket costs and expenses incurred by Lessor in
connection with such review and/or preparation plus a reasonable processing and
review fee.
57. SUBSTITUTION. A. Subject to the fulfillment of all of the conditions
set forth in the following subsection B, Lessee shall have the right to deliver
a rejectable offer to Lessor (each, a "Rejectable Substitution Offer") to
substitute a Substitute Property for a Property if:
(i) the terms of Section 21.B of this Lease permit such substitution
(each, a "Casualty/Condemnation Substitution").
From and after the third anniversary of the Effective Date and subject to
the fulfillment of all of the conditions set forth in the following subsection
B, Lessee shall also have the right to deliver a Rejectable Substitution Offer
to substitute any Property with a Substitute Property (each a "Discretionary
Substitution").
Each Rejectable Substitution Offer shall identify the proposed Substitute
Property in reasonable detail and contain a certificate executed by a duly
authorized officer of Lessee pursuant to which Lessee shall certify that in
Lessee's good faith judgment such proposed Substitute Property satisfies as of
the date of such notice, or will satisfy as of the date of the closing of such
substitution, all of the applicable conditions to substitution set forth in this
Section 57. Lessee agrees to deliver to Lessor all of the diligence information
and materials contemplated by the provisions of Section 57.B of this Lease
within 30 days after the delivery to Lessor of a Rejectable Substitution Offer.
Lessor shall have 90 days after the delivery of a Rejectable Substitution
Offer notice satisfying the requirements of the preceding paragraph to deliver
to Lessee written notice of its election to either accept or reject the
Rejectable Substitution Offer. Lessor's failure to deliver such notice within
such time period shall be deemed to constitute Lessor's acceptance of the
Rejectable Substitution Offer. If the Mortgage corresponding to the Property to
be replaced is still outstanding, any rejection of the Rejectable Substitution
Offer by Lessor shall not be effective unless it is consented to in writing by
Lender. If Lessor accepts the Rejectable Substitution Offer or is deemed to have
accepted the Rejectable Substitution Offer or if Lender does not consent in
writing to any rejection of the Rejectable Substitution Offer by Lessor, then
Lessee shall complete such substitution, subject, however, to the satisfaction
of each of the applicable terms and conditions set forth in this Section 57.
If Lessor rejects the Rejectable Substitution Offer pursuant to the
previous paragraph for reasons other than that, in Lessor's reasonable judgment,
the proposed Substitute Property would not have satisfied the applicable
substitution conditions set forth in this Section 57, and such rejection is
consented to by Lender, then:
44
(X) if such rejected Rejectable Substitution Offer was made with
respect to a Casualty/Condemnation Substitution, the provisions of the
last paragraph of Section 21.B and the last sentence of the second
paragraph of Section 21.B shall be applicable; and
(Y) if such rejected Rejectable Substitution Offer was made with
respect to a Discretionary Substitution, this Lease shall terminate with
respect to the Property which Lessee proposed to replace on the next
scheduled Base Monthly Rental payment date (the "Early Substitution
Termination Date") provided Lessee has paid to Lessor all Base Annual
Rental, Additional Rental and all other sums and obligations then due and
payable under this Lease as of such Early Substitution Termination Date.
On the Early Substitution Termination Date, and provided Lessee shall have
paid to Lessor all Base Annual Rental, Additional Rental and other sums
and obligations then due and payable under this Lease as of the Early
Substitution Date:
(i) the Base Annual Rental then in effect shall be reduced by
an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for the Property which Lessee proposed to replace, and
(y) the Base Annual Rental then in effect; and
(ii) all obligations of Lessor and Lessee shall cease as of
the Early Substitution Termination Date with respect to such
Property; provided, however, Lessee's obligations to Lessor with
respect to such Property under any indemnification provisions of
this Lease with respect to such Property (including, without
limitation, Sections 16 and 19 of this Lease) and Lessee's
obligations to pay any sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior
to the Early Substitution Termination Date shall survive the
termination of this Lease with respect to such Property or
otherwise. This Lease shall, however, continue in full force and
effect with respect to all other Properties.
B. The substitution of a Substitute Property for a Property pursuant to
the preceding subsection A shall be subject to the fulfillment of all of the
following terms and conditions:
(i) The Substitute Property must:
(1) be a Permitted Facility, in good condition and repair,
ordinary wear and tear excepted;
(2) have a fair market value no less than the greater of the
then fair market value of the Property being replaced or the fair
market value of such Property as of the Effective Date (in each
case, determined without regard to this Lease, but assuming that
while this Lease has been in effect, Lessee has complied with all of
the terms and conditions of this Lease), as determined by Lessor,
and consented to by Lender, utilizing the same valuation method as
used in connection with the closing of the transaction described in
the Sale-Leaseback Agreement, which was based upon the sum of (x)
the fair market value of the land comprising such Property and (y)
the replacement cost of the improvements located thereon;
45
(3) have improvements which have a remaining useful life
substantially equivalent to, or better than, that of the
improvements located at the Property to be replaced;
(4) be conveyed to Lessor by special or limited warranty deed,
free and clear of all liens and encumbrances, except such matters as
are reasonably acceptable to Lessor (the "Substitute Property
Permitted Exceptions"); and
(5) be located in either (a) the same state as the Property to
be replaced is then located, or (b) in another state acceptable to
Lessor in Lessor's reasonable discretion;
(ii) Lessor shall have inspected and approved the Substitute
Property utilizing Lessor's customary site inspection and underwriting
approval criteria. Lessee shall have reimbursed Lessor and Lender for all
of their reasonable costs and expenses incurred with respect to such
proposed substitution, including, without limitation, Lessor's third-party
and/or in-house site inspectors' costs and expenses with respect to the
proposed Substitute Property. Lessee shall be solely responsible for the
payment of all costs and expenses resulting from such proposed
substitution, regardless of whether such substitution is consummated,
including, without limitation, the cost of title insurance and
endorsements for both Lessor and Lender, survey charges, stamp taxes,
mortgage taxes, transfer fees, transfer taxes, charges, escrow and
recording fees, water certification charges and costs, City of Chicago
Transaction tax (if applicable), income and transfer taxes imposed on
Lessor as a result of such substitution and the reasonable attorneys' fees
and expenses of counsel to Lessee, Lessor and Lender;
(iii) Lessor shall have received a preliminary title report and
irrevocable commitment to insure title by means of an ALTA extended
coverage owner's policy of title insurance (or its equivalent, in the
event such form is not issued in the jurisdiction where the proposed
Substitute Property is located) for the proposed Substitute Property
issued by Title Company and committing to insure Lessor's good and
marketable title in the proposed Substitute Property, subject only to the
Substitute Property Permitted Exceptions (as defined in the Sale-Leaseback
Agreement) and containing endorsements substantially comparable to those
required by Lessor at the Closing (as defined in the Sale-Leaseback
Agreement) and Lender shall have received such title report and
irrevocable commitment to insure its first priority lien encumbering the
proposed Substitute Property as Lender shall reasonably require;
(iv) Lessor shall have received a current ALTA survey of the
proposed Substitute Property, the form of which shall be comparable to
those received by Lessor at the Closing and sufficient to cause the
standard survey exceptions set forth in the title policy referred to in
the preceding subsection to be deleted;
(v) no Event of Default shall have occurred and be continuing under
any of the Sale-Leaseback Documents;
46
(vi) Lessee shall have executed such documents as may be reasonably
required by Lessor as a result of such substitution, including amendments
to this Lease and the Memorandum (the "Substitute Documents"), all of
which documents shall be in form and substance reasonably satisfactory to
Lessor;
(vii) the representations and warranties set forth in the Substitute
Documents, this Lease and the Sale-Leaseback Agreement applicable to the
proposed Substitute Property shall be true and correct in all material
respects as of the date of substitution, and Lessee shall have delivered
to Lessor an officer's certificate certifying to that effect;
(viii) Lessee shall have delivered to Lessor certificates of
insurance showing that insurance required by the Substitute Documents is
in full force and effect;
(ix) Lessor shall have obtained an endorsement to the policy of
residual value insurance issued to Lessor and Lender in connection with
the transaction described in the Sale-Leaseback Agreement with respect to
the proposed Substitute Property, which endorsement shall be in form and
substance reasonably satisfactory to Lessor and Lender;
(x) Lender shall have consented to the substitution of the proposed
Substitute Property; and
(xi) the date of the closing of the substitution shall occur no
later than 20 days after the date of acceptance (or deemed acceptance) by
Lessor of the Rejectable Substitution Offer.
C. Upon satisfaction of the foregoing conditions set forth in Section 57.B
and provided Lessor has accepted the Rejectable Substitution Offer or is deemed
to have accepted the Rejectable Substitution Offer, or while the Mortgage
corresponding to such Property is still outstanding, any rejection of the
Rejectable Substitution Offer by Lessor is not consented to in writing by the
Lender:
(i) the proposed Substitute Property shall be deemed substituted for
the Property to be replaced;
(ii) the Substitute Property shall be referred to herein as a
"Property" and included within the definition of "Properties";
(iii) the Substitute Documents shall be dated as of the date of the
substitution; and
(iv) Lessor shall convey the Property to be replaced to Lessee or a
designee of Lessee "as-is" by quit-claim deed, subject to all matters of
record (except for the Mortgage corresponding to the Property to be
replaced and any other consensual liens granted by Lessor other than those
granted by Lessor at the request of Lessee), and without representation or
warranty.
D. Notwithstanding the foregoing, nothing in this Section 57 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and
47
characterizations set forth in Lease, including, without limitation, those
provisions set forth in Section 3 of this Lease.
58. REJECTABLE PURCHASE OFFER. Subject to the fulfillment of all of the
conditions set forth in this Section 58.
A. Lessor shall have 90 days from the delivery by Lessee of a Rejectable
Purchase Offer notice to purchase a certain property as described in the
Rejectable Purchase Offer ("Rejectable Purchase Offer") by delivering to Lessee
written notice of its election to either accept or reject the Rejectable
Purchase Offer. Lessor's failure to respond to such Rejectable Purchase Offer
notice within such time period shall be deemed to constitute Lessor's acceptance
of the Rejectable Purchase Offer. If the Mortgage corresponding to the Property
to be purchased is still outstanding, any rejection of the Rejectable Purchase
Offer by Lessor shall not be effective unless it is consented to in writing by
Lender. If Lessor accepts the Rejectable Purchase Offer or is deemed to have
accepted the Rejectable Purchase Offer or if Lender does not consent in writing
to any rejection of the Rejectable Purchase Offer by Lessor, then Lessee shall
complete such purchase, subject, however, to the satisfaction of each of the
terms and conditions set forth in the following subsection B.
B. The purchase of a Property pursuant to the preceding subsection A shall
be subject to the fulfillment of all of the following terms and conditions:
(i) no Event of Default shall have occurred and be continuing under
any of the Sale-Leaseback Documents;
(ii) Lessee shall have delivered to Lessor a certificate executed by
a duly authorized officer of Lessee certifying to Lessor that Lessee does
not own any properties which are available for substitution and which meet
the applicable requirements for substitution set forth in Section 57;
(iii) Lessee shall have paid to Lessor the Subject Purchase Price
(as defined below), together with all Base Annual Rental, Additional
Rental and other sums and obligations then due and payable under this
Lease as of the date of the closing of such purchase;
(iv) Lessee shall be solely responsible for the payment of all costs
and expenses resulting from such proposed purchase, regardless of whether
the purchase is consummated, including, without limitation, to the extent
applicable, the cost of title insurance and endorsements, including,
survey charges, stamp taxes, mortgage taxes, transfer taxes and fees,
escrow and recording fees, taxes imposed on Lessor as a result of such
purchase, the attorneys' fees of Lessee and the reasonable attorneys' fees
and expenses of counsel to Lessor and Lender; and
(v) the date of the closing of such purchase shall occur on the next
scheduled Base Monthly Rental payment date following Lessor's acceptance
(or deemed acceptance) of the Rejectable Purchase Offer, but in no event
later than 20 days after the date of acceptance (or deemed acceptance) by
Lessor of such Rejectable Purchase Offer.
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On the date of the closing of the purchase of a Property pursuant to this
Section (the "Rejectable Purchase Closing Date"), subject to satisfaction of the
foregoing conditions:
(1) this Lease shall be deemed terminated with respect to such
Property only, but this Lease shall continue in full force and effect with
respect to all of the other Properties; provided, however, such
termination shall not limit Lessee's obligations to Lessor with respect to
such Property under any indemnification provisions of this Lease
(including, without limitation, Sections 16 and 19 of this Lease) and
Lessee's obligations to pay any sums (whether payable to Lessor or a third
party) accruing under this Lease with respect to such Property prior to
the Rejectable Purchase Closing Date shall survive the termination of this
Lease;
(2) the Base Annual Rental shall be reduced for each such Property
by an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for such Property and (y) the Base Annual Rental then in
effect; and
(3) Lessor shall convey such Property to Lessee "as-is" by
quit-claim deed, subject to all matters of record (except for the Mortgage
corresponding to the Property to be replaced and any other consensual
liens granted by Lessor other than those granted by Lessor at the request
of Lessee), and without representation or warranty.
For purposes of this Section 58, the term "Subject Purchase Price"
shall mean the product of the amount specified on SCHEDULE I attached
hereto which corresponds to the time period during which such purchase
occurs multiplied by the Purchase Price for the Property being purchased.
59. STATE SPECIFIC PROVISIONS. The provisions and/or remedies which are
set forth on SCHEDULE II shall be deemed a part of and included within the terms
and conditions of this Lease.
60. CERTIFICATE. At any time, and from time to time, at or following the
assignment by any Permitted Sublessee of its right, title and interest in any
Permitted Sublease, Lessor, provided all of the conditions in Section 12 of the
Permitted Sublease have been satisfied, agrees, promptly and in no event later
than twenty (20) Business Days after a request from Lessee to execute,
acknowledge and deliver to Lessee and any such Permitted Sublessee a certificate
from Lessor, certifying that such Permitted Sublessee has been released from all
liabilities, obligations and duties to Lessor under the Permitted Sublease.
61. Intentionally Deleted.
62. Lessor acknowledges and agrees that in the event the proposal by Xxxxx
Xxxxxxx and certain members of senior management of Uno Restaurant Corporation
to acquire all of the shares of Uno Restaurant Corporation's common stock not
owned by Xx. Xxxxxxx and his affiliates is not approved and consummated, then
Lessor will tender the Properties back to Uno Foods Inc. and Saxet Corporation,
respectively, and they shall assume the Lessor's mortgage with Lender on the
Properties.
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IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written.
LESSOR:
XXXXXXX FAMILY, LLC,
a Massachusetts limited liability company
By: its member
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------
Printed Name: Xxxxx X. Xxxxxxx
-----------------------
Its: Member
--------------------------------
LESSEE:
SLA MAIL, INC., a Massachusetts
corporation
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Printed Name: Xxxxxx X. Xxxxxxx
---------------------------
Its: Executive Vice President, Treasurer
------------------------------------
Lessee's Tax Identification Number:
-----------------------------
50
POWER OF ATTORNEY
Lessor may act as attorney-in-fact or otherwise on behalf of Lessee
pursuant to Sections 24, 25.B and 31 of this Lease. This power of attorney is
coupled with an interest, is durable and is not affected by subsequent
disability or incapacity of the principal or lapse of time.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxx
--------------------- ---------------------
Witness Lessee
51
STATE OF MASSACHUSETTS ]
] SS.
COUNTY OF SUFFOLK ]
The foregoing instrument was acknowledged before me on July 27, 2001 by
Xxxxx X. Xxxxxxx, a member of XXXXXXX FAMILY, LLC, a Massachusetts limited
liability company, on behalf of the limited liability company.
/s/ Xxxxxxxxx X. Xxxxxxx
----------------------------------
Notary Public Xxxxxxxxx X. Xxxxxxx
My Commission Expires: 9/2/2006
-------------------------------
STATE OF MASSACHUSETTS ]
] SS.
COUNTY OF SUFFOLK ]
The foregoing instrument was acknowledged before me on July 27, 2001 by
Xxxxxx X. Xxxxxxx, Executive Vice President, Treasurer and Assistant Clerk of
SLA MAIL, INC., a Massachusetts corporation, on behalf of the corporation.
/s/ Xxxxxxxxx X. Xxxxxxx
----------------------------------
Notary Public Xxxxxxxxx X. Xxxxxxx
My Commission Expires: 9/2/2006
-------------------------------
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