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EXHIBIT 10.42
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AMENDED AND RESTATED
LEASE
between
TRAVERSE RETAIL LIMITED PARTNERSHIP,
as Lessor
and
BORDERS, INC.,
as Lessee
Dated as of October 25, 2000
For Property Located In:
TRAVERSE CITY, MICHIGAN
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This Lease is subject to a security interest and an Assignment of Leases and
Rents in favor of KeyBank National Association (together with its successors and
assigns, the "Bank") under a Credit Agreement, dated as of October 25, 2000,
among Lessor, Braintree Retail Limited Partnership, Fredericksburg Retail
Limited Partnership, Whitehall Retail, L.L.C. and the Bank, as the same may from
time to time be amended, restated or supplemented. This Lease has been executed
in several counterparts. To the extent, if any, that this Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect from time to time in the applicable jurisdiction), no security interest
in this Lease may be created through the transfer or possession of any
counterpart other than the original counterpart containing the receipt therefor
executed by the Bank on the signature page hereof.
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TABLE OF CONTENTS
Page
ARTICLE I.........................................................................................................1
1.1 Definitions.....................................................................................1
ARTICLE II........................................................................................................1
2.1 Property........................................................................................1
2.2 Lease Term......................................................................................1
ARTICLE III.......................................................................................................2
3.1 Basic Rent......................................................................................2
3.2 Supplemental Rent...............................................................................2
3.3 Performance on a Non-Business Day...............................................................2
3.4 Rent............................................................................................3
3.5 Application of Rent.............................................................................3
ARTICLE IV........................................................................................................3
4.1 Utility Charges.................................................................................3
ARTICLE V.........................................................................................................3
5.1 Quiet Enjoyment.................................................................................3
ARTICLE VI........................................................................................................3
6.1 Net Lease.......................................................................................3
6.2 No Termination or Abatement.....................................................................4
ARTICLE VII.......................................................................................................4
7.1 Ownership of the Property.......................................................................4
ARTICLE VIII......................................................................................................5
8.1 Condition of the Property.......................................................................5
ARTICLE IX........................................................................................................5
9.1 Possession and Use of the Property..............................................................5
ARTICLE X.........................................................................................................5
10.1 Compliance with Legal Requirements and Insurance Requirements...................................5
ARTICLE XI........................................................................................................6
11.1 Maintenance and Repair; Return..................................................................6
ARTICLE XII.......................................................................................................6
12.1 Modifications, Substitutions and Replacements...................................................6
ARTICLE XIII......................................................................................................7
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13.1 Permitted Liens.................................................................................7
13.2 Grants and Releases of Easements................................................................7
ARTICLE XIV.......................................................................................................8
14.1 Permitted Contests Other than in Respect of Indemnities.........................................8
ARTICLE XV........................................................................................................9
15.1 Public Liability and Workers' Compensation Insurance............................................9
15.2 Hazard and Other Insurance......................................................................9
15.3 Coverage........................................................................................9
ARTICLE XVI......................................................................................................10
16.1 Casualty and Condemnation......................................................................10
16.2 Environmental Matters..........................................................................12
16.3 Notice of Environmental Matters................................................................13
16.4 Environmental Indemnification..................................................................13
ARTICLE XVII.....................................................................................................13
17.1 Termination upon Certain Events................................................................13
17.2 Procedures.....................................................................................13
ARTICLE XVIII....................................................................................................14
18.1 Lease Events of Default........................................................................14
18.2 Surrender of Possession........................................................................15
18.3 Reletting......................................................................................15
18.4 Damages........................................................................................16
18.5 Acceleration of Rent...........................................................................16
18.6 Final Liquidation Damages......................................................................17
18.7 Waiver of Certain Rights.......................................................................17
18.8 Assignment of Rights Under Contract............................................................18
18.9 Remedies Cumulative............................................................................18
18.10 Lessee's Right to Purchase During Lease Event of Default.......................................18
ARTICLE XIX......................................................................................................18
19.1 Lessor's Right to Cure Lessee's Lease Defaults.................................................18
ARTICLE XX.......................................................................................................18
20.1 Provisions Relating to Lessee's Termination of this Lease or Exercise of Purchase
Obligation.....................................................................................18
ARTICLE XXI......................................................................................................19
21.1 Purchase Obligation............................................................................19
ARTICLE XXII.....................................................................................................20
22.1 Holding Over...................................................................................20
ARTICLE XXIII....................................................................................................21
23.1 Lessor Default Under Lease, Development and Other Agreements...................................21
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ARTICLE XXIV.....................................................................................................21
24.1 Risk of Loss...................................................................................21
ARTICLE XXV......................................................................................................21
25.1 Subletting and Assignment......................................................................21
ARTICLE XXVI.....................................................................................................22
26.1 Estoppel Certificates..........................................................................22
ARTICLE XXVII....................................................................................................22
27.1 Right to Inspect...............................................................................22
27.2 No Waiver......................................................................................22
ARTICLE XXVIII...................................................................................................22
28.1 Acceptance of Surrender........................................................................22
ARTICLE XXIX.....................................................................................................22
29.1 No Merger of Title.............................................................................22
ARTICLE XXX......................................................................................................23
30.1 Notice.........................................................................................23
ARTICLE XXXI.....................................................................................................23
31.1 Miscellaneous..................................................................................23
31.2 Amendments and Modifications...................................................................24
31.3 Successors and Assigns.........................................................................24
31.4 Headings and Table of Contents.................................................................24
31.5 Counterparts...................................................................................24
31.6 GOVERNING LAW..................................................................................24
31.7 Memorandum of Lease............................................................................24
31.8 Limitations on Recourse........................................................................24
31.9 Priority.......................................................................................25
ARTICLE XXXII....................................................................................................25
32.1 Ground Lease...................................................................................25
32.2 Wal-Mart REA...................................................................................25
32.3 Condominium....................................................................................25
ARTICLE XXXIII...................................................................................................25
33.1 Power of Attorney..............................................................................25
ARTICLE XXXIV....................................................................................................26
34.1 Lessee's Right of Specific Performance.........................................................26
ARTICLE XXXV.....................................................................................................26
35.1 Lessor Liabilities.............................................................................26
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EXHIBITS:
Exhibit A Legal Description of the Land
Exhibit B Site Plan
Exhibit C Intentionally Deleted
Exhibit D Ground Lease
Exhibit E Lease Guaranty Agreement
Appendix 1 Lease Rules of Usage and Definitions
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AMENDED AND RESTATED LEASE
This Amended and Restated Lease (this "Lease"), effective as of October
25, 2000 (the "Effective Date"), between TRAVERSE RETAIL LIMITED PARTNERSHIP, a
Delaware limited partnership, having its principal office at 00000 Xxxxxxx
Xxxxxx, Xxxxxxxx, Xxxx 00000 (the "Lessor"), and BORDERS, INC., a Colorado
corporation, having its principal office at 000 Xxxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxx 00000 (the "Lessee").
WITNESSETH:
WHEREAS, the Lessor and the Lessee are parties to a Lease effective as
of May 31, 1996 (the "Old Lease") which is related to financing obtained by the
Lessor pursuant to certain Project Loan Documents as defined in the Old Lease;
and
WHEREAS, the Lessor has agreed to participate in a refinancing
transaction pursuant to the Interim Project Loan Documents, and in connection
therewith, the Lessor and Lessee wish to amend and restate this Lease to conform
to the requirements of the Interim Project Loan Documents.
In consideration of the rents, covenants and conditions herein set
forth, and of other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree to amend and restate
the Lease as follows:
ARTICLE I.
1.1 Definitions. Capitalized Terms used but not otherwise defined in
this Lease have the respective meanings specified in Appendix 1 to this Lease,
attached hereto and incorporated herein by reference.
ARTICLE II.
2.1 Property. Subject to the terms and conditions hereinafter set
forth and the terms of the Ground Lease (as described in Section 32.1), Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the following
property in the Township of Garfield, County of Grand Traverse, State of
Michigan consisting of all Improvements existing thereon including, without
limitation, a building containing approximately 20,000 square feet of rentable
space, in the location shown on Exhibit B attached hereto and incorporated
herein by reference, located on the parcel of Land (which, by definition,
includes the Appurtenant Rights) described in Exhibit A attached hereto and
incorporated herein by reference. The Improvements and the Land shall sometimes
hereinafter be referred to collectively as the "Property".
2.2 Lease Term. The term of this Lease (the "Basic Term") shall begin
on the Effective Date and shall end on the Lease Maturity Date.
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ARTICLE III.
3.1 Basic Rent. (a) "Basic Rent" shall mean the sum of Interim
Project Loan Basic Rent and Developer Basic Rent, calculated as of the
applicable date on which Basic Rent is due. "Developer Basic Rent" shall mean
and refer to the Developer Yield, which shall equal a return on Developer Equity
equal to twelve percent (12%) per annum.
(b) Subject only to Lessee's rights pursuant to Article XXIII
with respect to payment of the Developer Basic Rent, during the Basic Term and
commencing on the Rent Commencement Date, Lessee shall pay Basic Rent on each
Payment Date and on the Lease Maturity Date and on any date on which this Lease
shall terminate. The "Rent Commencement Date" shall mean the Effective Date.
(c) Neither Lessee's inability or failure to take possession of
all or any portion of the Property when delivered by Lessor, nor Lessor's
inability or failure to deliver all or any portion of the Property to Lessee at
any time, whether or not attributable to any act or omission of Lessee or any
action or omission of Lessor or for any other reason whatsoever, shall delay or
otherwise affect Lessee's obligation to pay Rent (as hereinafter defined) in
accordance with the terms of this Lease.
(d) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately available funds
on the due date therefor to such account or accounts at such bank or banks or to
such other Person or in such other manner as Lessor shall from time to time
direct, in accordance with the Interim Project Loan Documents.
3.2 Supplemental Rent. During the Basic Term, Lessee shall pay to
Lessor, or the person entitled thereto, any and all Supplemental Rent, on each
Payment Date and otherwise promptly as the same shall become due and payable,
and if Lessee fails to pay any Supplemental Rent, Lessor shall have all rights,
powers and remedies provided for herein or at law or in equity or otherwise in
the case of nonpayment of Basic Rent. In addition to the other amounts payable
as Supplement Rent, Lessee shall pay to Lessor, as Supplemental Rent, on demand,
to the extent that Lessor may be required to make such payment under the Interim
Project Loan Agreement, but subject to applicable Legal Requirements, interest
at the Interim Project Loan Agreement Interest Rate on (a) any installment of
Basic Rent not paid when due for the period for which the same shall be overdue
and (b) any payment of Supplemental Rent not paid when due on demand by Lessor.
Unless expressly provided otherwise in this Lease, in the event of any failure
on the part of Lessee to pay and discharge any Supplemental Rent as and when
due, Lessee shall also promptly pay and discharge any fine, penalty, interest or
cost which may be assessed or added for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.3 Performance on a Non-Business Day. Except as otherwise required
by the definition of Payment Date, if any payment is required hereunder on a day
that is not a Business Day, then such payment shall be due on the next
succeeding Business Day.
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3.4 Rent. For purposes of the Lease, the term "Rent" shall mean and
refer to, collectively, Basic Rent and Supplemental Rent.
3.5 Application of Rent. Unless otherwise specifically stated in this
Lease, all Rent and other sums or proceeds paid to or received by or on behalf
of Lessor, with respect to the Property or otherwise, shall be applied to
payment of the Interim Project Loan Debt in accordance with the terms of the
Interim Project Loan Documents.
ARTICLE IV.
4.1 Utility Charges. Lessee shall pay or cause to be paid all charges
for electricity, power, gas, oil, water, telephone, sanitary dry sewer service
and all other rents and utilities used in or on the Property during the Basic
Term. Lessee shall be entitled to receive any credit or refund with respect to
any utility charge paid by Lessee and, provided no Lease Event of Default shall
have occurred and be continuing, the amount of any credit or refund received by
Lessor on account of any utility charges paid by Lessee, net of the costs and
expenses incurred by Lessor in obtaining such credit or refund, shall be
promptly paid over to Lessee. All charges for utilities imposed with respect to
the Property for a billing period during which this Lease expires or terminates
shall be adjusted and prorated on a daily basis between Lessor and Lessee, and
each party shall pay or reimburse the other for each party's pro rata share
thereof.
ARTICLE V.
5.1 Quiet Enjoyment. So long as no Lease Event of Default shall have
occurred and be continuing, Lessee shall, subject to the terms of this Lease,
peaceably and quietly have, hold and enjoy the Property, throughout the Basic
Term, free of any claim or other action by Lessor or anyone rightfully claiming
by, through or under Lessor (other than Lessee) with respect to any matters
arising from and after the Effective Date.
ARTICLE VI.
6.1 Net Lease. This Lease shall constitute a net lease. Any present
or future law to the contrary notwithstanding, this Lease shall not terminate,
nor shall Lessee be entitled to any abatement, suspension, deferment, reduction,
set off, counterclaim, or defense with respect to Rent, nor shall the
obligations of Lessee hereunder be affected (except as expressly herein
permitted, including the terms of Article XXIII) by reason of: (i) any damage to
or destruction of the Property or any part thereof from any cause whatsoever;
(ii) any taking of the Property or any part thereof or interest therein by
Condemnation or otherwise; (iii) any prohibition, limitation, restriction or
prevention of Lessee's use, occupancy or enjoyment of the Property or any part
thereof, or any interference with such use, occupancy or enjoyment by any Person
or for any other reason; (iv) any title defect or encumbrance or any matter
affecting title to the Property; (v) any eviction by paramount title or
otherwise; (vi) any default by Lessor hereunder or under the Interim Project
Loan Documents; (vii) any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution or other proceeding relating to or affecting Lessor or
Lessee; (viii) the impossibility or illegality of performance by Lessor, Lessee
or both; (ix) any action of any Governmental Authority; (x) Lessee's acquisition
of ownership of all or part of the Property (except to the extent this Lease is
terminated pursuant to the terms hereof); (xi) breach of any
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warranty or representation with respect to the Property; (xii) any defect in the
condition, quality or fitness for use of the Property or any part thereof; or
(xiii) any other cause or circumstances, whether similar or dissimilar to the
foregoing, and whether or not Lessee shall have notice or knowledge of any of
the foregoing. The parties intend that the obligations of Lessee hereunder shall
be covenants and agreements that are separate and independent from any
obligations of Lessor hereunder and shall continue unaffected unless such
obligations shall have been modified or terminated in accordance with an express
provision of this Lease.
6.2 No Termination or Abatement. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, or any action with respect to this Lease which may
be taken by any trustee, receiver or liquidator of Lessor or by any court with
respect to Lessor. Lessee hereby waives all right (i) to terminate or surrender
this Lease, except as otherwise set forth in Article XXIII, or (ii) to avail
itself of any abatement, suspension, deferment, reduction, set off, counterclaim
or defense with respect to any Rent (except as expressly herein permitted,
including the terms of Article XXIII). Lessee shall remain obligated under this
Lease in accordance with its terms and Lessee hereby waives any and all rights
now or hereafter conferred by statute or otherwise to modify or to avoid strict
compliance with its obligations under this Lease. Notwithstanding any such
statute or otherwise, Lessee shall be bound by all of the terms and conditions
contained in this Lease.
ARTICLE VII.
7.1 Ownership of the Property. (a) Lessor and Lessee intend that, for
financial accounting purposes with respect to Lessee, (i) this Lease will be
treated as an "operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, (ii) Lessor will be treated as the owner and
lessor of the Property, and (iii) Lessee will be treated as the lessee of the
Property,
(b) Lessor and Lessee further agree that, in the event that the
transaction contemplated by the Operative Agreements shall be deemed a financing
(i) this Lease shall constitute a security agreement and financing statement
within the meaning of Article 9 of the Uniform Commercial Code and a real
property mortgage or deed of trust under the applicabale State's real property
law; (ii) the conveyance provided for in Article II shall be deemed to be a
grant by Lessee to Lessor of a mortgage lien and security interest in all of
Lessee's right, title and interest in and to the Property and all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property; (iii) the possession by Lessor or any
of its agents of notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" for purposes of perfecting the security
interest pursuant to Section 9-305 of the Uniform Commercial Code; and (iv)
notifications to Persons holding such property, and acknowledgments, receipts or
confirmations from financial intermediaries, bankers or agents (as applicable)
of Lessee shall be deemed to have been given for the purpose of perfecting such
security interest under applicable law. Lessor and Lessee shall, to the extent
consistent with this Lease, take such actions as may be necessary to ensure
that, if this Lease were deemed to create a security interest in and
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mortgage on the Property in accordance with this Section, such security interest
would be deemed to be a perfected mortgage and security interest of first
priority under applicable law and will be maintained as such throughout the
Basic Term.
(c) Lessor and Lessee further intend and agree that in the
event of any insolvency or receivership proceedings or a petition under the
United States bankruptcy laws or any other applicable insolvency laws or statute
of the United States of America or any State or Commonwealth thereof affecting
Lessee the transactions evidenced by this Lease shall be regarded as loans made
by an unrelated third party lender to Lessee.
ARTICLE VIII.
8.1 Condition of the Property. Except as otherwise provided expressly
herein, (a) Lessee acknowledges and agrees that it is renting the Property "AS
IS " without representation, warranty or covenant (express or implied) by Lessor
and subject to (i) the existing state of title, (ii) the rights of any parties
in possession thereof, (iii) any state of facts which an accurate survey or
physical inspection might show and (iv) violations of legal requirements which
may exist on the date hereof or at any time hereafter; (b) Lessor has not made
nor shall be deemed to have made any representation, warranty or covenant
(express or implied, including, without limitation, the fact that no
representations and warranties are being made in connection with the Property,
the condition of any improvements thereon, the soil condition, or any
environmental or hazardous material condition) or shall be deemed to have any
liability whatsoever as to the title, value, habitability, use, condition
(including, without limitation, any Environmental Condition or matter relating
to Hazardous Substances or Regulated Substances of any kind), design, operation,
or fitness for use of the Property (or any part thereof), or any other
representation, warranty or covenant whatsoever, express or implied, with
respect to the Property (or any part thereof); and (c) Lessor shall not be
liable for any latent, hidden, or patent defect therein or the failure of the
Property, or any part thereof, to comply with any Legal Requirement. Lessee
hereby waives any rights or claims that it now has or may hereafter acquire with
respect to any matters set forth in this Section 8.1.
ARTICLE IX.
9.1 Possession and Use of the Property. (a) The Property may be used
for any lawful purpose, which use shall (i) not materially adversely affect the
value, utility or remaining useful life of the Property, and (ii) be in material
compliance with all Legal Requirements.
(b) During the Basic Term, Lessee shall pay, or cause to be
paid, all charges and costs required in connection with the use of the Property,
as contemplated by this Lease. Lessee shall not commit or permit any waste of
the Property or any part thereof.
ARTICLE X.
10.1 Compliance with Legal Requirements and Insurance Requirements.
Subject to the terms of Article XIV relating to permitted contests, during the
Basic Term, Lessee, at its sole cost and expense, shall (a) comply with all
Legal Requirements (including all Environmental Laws) and Insurance Requirements
relating to the Property, including the use, construction,
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operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Property, and (b)
procure, maintain and comply with all licenses, permits, orders, approvals,
consents and other authorizations required for the construction, use,
maintenance and operation of the Property and for the use, operation,
maintenance, repair and restoration of the Improvements.
ARTICLE XI.
11.1 Maintenance and Repair; Return. (a) Lessee, at its sole cost and
expense, shall maintain the Property in good condition (ordinary wear and tear
excepted) and make all necessary repairs thereto, of every kind and nature
whatsoever, whether interior or exterior, ordinary or extraordinary, structural
or nonstructural or foreseen or unforeseen, in each case as required by all
Legal Requirements and Insurance Requirements and on a basis consistent with the
operation and maintenance of commercial or retail properties comparable in type
and location to the Property subject, however, to the provisions of Article XVI
with respect to Condemnation and Casualty;
(b) Lessor shall, under no circumstances, be required to build
any improvements on the Property, make any repairs, replacements, alterations or
renewals of any nature or description to the Property, make any expenditure
whatsoever in connection with the Lease, or maintain the Property in any way;
(c) Lessee waives the right to (i) require Lessor to maintain,
repair, or rebuild all or any part of the Property, or (ii) make repairs at the
expense of Lessor pursuant to any Ground Lease, Legal Requirement, Insurance
Requirement, contract, agreement, covenant, condition or restriction at any time
in effect; and
(d) Lessee shall, upon the Lease Maturity Date or earlier
termination of this Lease, vacate and surrender the Property to Lessor in its
then-current, "AS IS" condition, subject to Lessee's obligations under Sections
10.1, 11.1(a), 12.1 and 13.1.
ARTICLE XII.
12.1 Modifications, Substitutions and Replacements. So long as no
Lease Event of Default has occurred and is continuing, Lessee, at its sole cost
and expense, may, at any time and from time to time, make alterations,
renovations, improvements and additions to the Property or any part thereof
(collectively, "Modifications"); provided, that: (i) except for any
Modifications required to be made pursuant to a Legal Requirement or an
Insurance Requirement, no Modifications shall materially impair the value,
utility or useful life of the Property from that which existed immediately prior
to such Modifications and Lessee shall deliver to Lessor an Officer's
Certificate prior to commencing such Modifications to such effect; (ii) the
Modifications shall be done expeditiously and in a good and workmanlike manner;
(iii) Lessee shall comply with all Legal Requirements (including all
Environmental Laws) and Insurance Requirements applicable to the Modifications,
including the obtaining of all permits and certificates of occupancy, and the
structural integrity of the Property shall not be adversely
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affected; (iv) Lessee shall maintain builders' risk insurance at all times when
Modifications are in progress; (v) subject to the terms of Article XIV relating
to permitted contests, Lessee shall pay all costs and expenses and discharge any
Liens arising with respect to the Modifications; and (vi) such Modifications
shall comply with Sections 9. 1 and 11.1. All Modifications (other than those
that may be readily removed without impairing the value, utility or remaining
useful life of the Property) shall remain part of the realty and shall be
subject to this Lease, and title thereto shall immediately vest in Lessor.
Lessee may place upon the Property any inventory, trade fixtures, machinery,
equipment or other property belonging to Lessee or third parties and may remove
the same at any time during the term of this Lease, subject however, to the
terms of Section 11.1(a); provided, that such inventory, trade fixtures,
machinery, equipment or other property shall at the request of Lessor be removed
on the Lease Maturity Date, and will not materially impair the value, utility or
remaining useful life of the applicable Property. Lessor, by itself or its
agents, shall have the right, but not the obligation, from time to time to
inspect such Modifications to ensure that the same are completed consistent with
the Lease and such plans and specifications.
ARTICLE XIII.
13.1 Permitted Liens. (a) Lessee agrees that, except as otherwise
provided herein and subject to the terms of Article XIV relating to permitted
contests, Lessee shall not, directly or indirectly, create or allow to remain,
and shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon any Property or any
Modifications or any Lien, attachment , levy or claim with respect to the Rent,
other than Permitted Liens. Lessee shall promptly notify Lessor in the event it
receives actual knowledge that a Lien, other than the Permitted Exceptions, has
occurred with respect to the Property.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to or for
the performance by any contractor, mechanic, laborer, materialmen, supplier or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to the Property
or any part thereof. NOTICE IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR IN AND TO THE
PROPERTY.
13.2 Grants and Releases of Easements. Provided that no Lease Event of
Default shall have occurred and be continuing and subject to the provisions of
Article X, Lessor hereby consents in each instance to the following actions by
Lessee, in the name and stead of Lessor, but at Lessee's sole cost and expense:
(a) the granting (prior to the Lien of the Mortgage) of easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, repair, or maintenance of the
Property as herein provided; (b) the release (free and clear of the Lien of the
Mortgage) of existing easements or other rights in the nature of easements which
are for the benefit of the Property; (c) the dedication or transfer (prior to
the Lien of the Mortgage) of unimproved portions of the Property
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for road, highway or other public purposes; (d) the execution of petitions to
have the Property annexed to any municipal corporation or utility district; and
(e) the execution of amendments to any covenants and restrictions affecting the
Property; provided, however in each case Lessee shall have delivered to Lessor
an Officer's Certificate stating that (i) such grant, release, dedication,
transfer, annexation or amendment does not materially impair the value, utility
and remaining useful life of the Property or the Lien of the Mortgage, (ii) such
grant, release, dedication, transfer, annexation or amendment is reasonably
necessary in connection with the use, maintenance, alteration or improvement of
the Property, (iii) Lessee shall remain obligated under this Lease and under any
instrument executed by Lessee consenting to the assignment of Lessor's interest
in this Lease as security for indebtedness, in each such case in accordance with
their terms, as though such grant, release, dedication, transfer, annexation or
amendment had not been effected, and (iv) Lessee shall pay and perform any
obligations of Lessor under such grant, release, dedication, transfer,
annexation or amendment. For the purposes of carrying out the provisions and
exercising the rights, powers and privileges granted in this subsection, and
without limiting the effectiveness of the foregoing, provided that no Lease
Event of Default shall have occurred and be continuing, Lessor shall, upon the
request of Lessee, and at Lessee's sole cost and expense, promptly execute and
deliver any instruments necessary or appropriate to confirm any such grant,
release, dedication, transfer, annexation or amendment to any Person permitted
under this Section 13.2. By taking any action permitted or contemplated under
this Section 13.2, Lessee shall be deemed to have accepted and assumed all
obligations and liabilities of Lessor that may arise in connection with or as a
result of such actions and Lessee hereby agrees to indemnify, protect, defend
and hold Lessor and the holder of the Mortgage harmless from and against any and
all actions, claims, demands, liability, penalties, liens, loss, cost and
expense related to or arising out of such actions.
ARTICLE XIV.
14.1 Permitted Contests Other than in Respect of Indemnities. Lessee,
on its own or on Lessor's behalf but at Lessee's sole cost and expense, may
contest, by appropriate administrative or judicial proceedings conducted in good
faith and with due diligence, the amount, validity or application, in whole or
in part, of any Legal Requirement, or utility charges payable pursuant to
Section 4.1 or any Lien, attachment, levy, encumbrance or encroachment (other
than any Lien, attachment, levy, encumbrance or encroachment in favor of Bank),
and Lessor agrees not to pay, settle or otherwise compromise any such contested
item, provided that (a) the commencement and continuation of such proceedings
shall suspend the collection thereof from, and suspend the enforcement thereof
against, the Property and the Lessor; (b) there shall be no risk of the
imposition of a Lien (other than Permitted Liens) on the Property and no part of
the Property nor any Rent would be in any danger of being sold, forfeited, lost
or deferred; (c) at no time during the permitted contest shall there be a risk
of the imposition of criminal liability or material civil liability on Lessor
for failure to comply therewith; and (d) Lessee shall deliver to Lessor an
Officer's Certificate certifying as to the matters set forth in clauses (a), (b)
and (c) of this Section 14.1, and certifying that Lessee shall indemnify, defend
and save Lessor harmless against all loss, liability, penalties, claims or
demands of whatsoever nature arising out of such contest. Lessor, at Lessee's
sole cost and expense, shall execute and deliver to Lessee such authorizations
and other documents as may reasonably be required in connection with any such
contest and, if reasonably requested by Lessee, shall join as a party therein at
Lessee's sole cost and expense.
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ARTICLE XV.
15.1 Public Liability and Workers' Compensation Insurance. Lessee
shall procure and carry, at Lessee's sole cost and expense commercial general
liability insurance for claims for injuries or death sustained by persons or
damage to property while on the Property, in which the aggregate limits of
public liability and property damage liability shall be Two Million and no/00
Dollars ($2,000,000). Such insurance shall be on terms that are no less
favorable than commercial general liability insurance and such other public
liability coverages as may be maintained by Lessee with respect to similar
properties that it owns or leases and that are in accordance with prudent normal
industry practice. Lessee shall, in the operation of the Property, comply with
the applicable workers' compensation laws and protect Lessor against any
liability under such laws.
15.2 Hazard and Other Insurance. (a) Lessee shall keep, or cause to be
kept, the Improvements insured against loss or damage by fire and other risks
for the full replacement cost thereof (excluding foundations and excavations)
with an agreed amount endorsement on terms and in amounts that are no less
favorable than all risk insurance covering other similar properties owned or
leased by Lessee and that are in accordance with normal industry practice. So
long as no Lease Event of Default exists, any loss payable under the insurance
policy required by this Section will be paid to and adjusted solely by Lessee;
provided, however (i) if a Lease Event of Default exists, or (ii) if the
estimated cost of restoration of the Improvements with respect to any such loss
is in excess of $100,000, the proceeds of insurance on account of such loss
shall be delivered to the Bank (or to Lessor if the Interim Project Loan has
been fully paid) for application in accordance with Article XVI.
(b) If, at any time during the Basic Term, the area in which
the Property is located is designated a "flood-prone" area pursuant to the Flood
Disaster Protection Act of 1973, or any amendments or supplements thereto, then
Lessee shall comply with the National Flood Insurance Program as set forth in
the Flood Disaster Protection Act of 1973. In addition, Lessee will fully comply
with the requirements of the National Flood Insurance Act of 1968 and the Flood
Disaster Protection Act of 1973, as each may be amended from time to time, and
with any other Legal Requirement, concerning flood insurance to the extent that
it applies to the Property.
15.3 Coverage. (a) Lessee shall furnish Lessor with certificates,
together with additional insured endorsements, each in form and substance
satisfactory to Lessor and Bank, showing the insurance required under Sections
15.1 and 15.2 to be in effect and naming Lessor and the Bank as additional
insureds. The policies shall also specifically provide that the policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor or the Bank may have in force.
All such insurance shall be at the cost and expense of Lessee. Such certificates
shall include a provision for thirty (30) days' advance written notice by the
insurer to Lessor and the Bank in the event of cancellation or non-renewal of
such insurance. Lessee shall deliver to Lessor copies of all insurance policies
required by Sections 15.1 and 15.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 15.1 and 15.2(a) shall, to the extent reasonably available,
include an appropriate clause pursuant to which such policy shall provide that
it will not be invalidated should Lessee waive, in writing,
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prior to a loss, any or all rights of recovery against any party for losses
covered by such policy. Lessee hereby waives all rights of recovery and causes
of action which it has or may have or which may arise hereafter against Lessor
or the Bank for any damage to the Property, to the property or business of
Lessee or of anyone claiming through Lessee, by way of subrogation or otherwise,
caused by any of the perils coverable (whether or not covered) by fire, extended
coverage, vandalism, malicious mischief, special extended perils (all risk),
boilers or contents insurance (irrespective of whether or not such insurance
coverage is in fact carried or obtained), or by any other insurance for damage
to property carried by Lessee.
(c) All insurance policies required by Section 15.2 shall
include a standard form mortgagee endorsement in favor of the Bank.
(d) [Intentionally Omitted].
(e) Any insurance which Lessee is required to obtain and
maintain under this Lease may, at Lessee's election, be carried under "blanket"
and umbrella policies covering other properties and liabilities of Lessee.
(f) Lessor and Lessee may carry separate liability insurance so
long as (i) Lessee's insurance required under this Article XV is designated as
primary and in no event excess or contributory to any other insurance Lessor or
Lessee may have in force which would apply to a loss covered under Lessee's
policy, and (ii) each such insurance policy will not cause Lessee's insurance
required under this Article XV to be subject to a coinsurance exception of any
kind.
(g) Lessee shall pay, as they become due, all premiums for the
insurance required to be carried by Lessee by Section 15.1 and 15.2, shall renew
or replace each policy prior to the expiration date thereof, and shall, upon
request of Lessor or Bank, promptly deliver to Lessor and the Bank certificates
for renewal and replacement policies.
(h) In addition to the insurance required to be carried by
Lessee under this Article XV, Lessee shall carry such other insurance as Lessor
may be required to carry pursuant to the terms of either the Wal-Mart REA or the
Condominium Documents as described in Article XXXII.
ARTICLE XVI.
16.1 Casualty and Condemnation. (a) Subject to the provisions of this
Article XVI, and Article XVII in the event Lessee delivers or is obligated to
deliver a Termination Notice, and prior to the occurrence and continuation of a
Lease Event of Default, Lessee shall be entitled to receive (and in such case.
Lessor hereby irrevocably assigns to Lessee all of Lessor's right, title and
interest in) any award, compensation or insurance proceeds to which Lessee or
Lessor may became entitled by reason of their respective interests in the
Property (i) if all or a portion of the Property is damaged or destroyed, in
whole or in part, by a Casualty or (ii) if the use, access, occupancy, easement
rights or title to the Property or any part thereof is the subject of a
Condemnation; provided, however, if a Lease Event of Default shall have occurred
and be continuing, such award, compensation or insurance proceeds shall be paid
directly to Bank (or
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Lessor if the Interim Project Loan Debt shall have been paid in full) or, if
received by Lessee, shall be held in trust for Bank (or Lessor if the Interim
Project Loan Debt shall have been paid in full), and shall be paid over by
Lessee to Bank (or Lessor if the Interim Project Loan Debt shall have been paid
in full) and held in accordance with the terms of this paragraph. All amounts
held by Bank hereunder on account of any award, compensation or insurance
proceeds shall be applied by Bank to the Indebtedness and other obligations
outstanding under the Interim Project Loan Documents, or, if the Interim Project
Loan Debt has been paid in full, held by Lessor as security for the performance
of Lessee's obligations hereunder.
(b) So long as no Lease Event of Default has occurred and is
continuing Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or insurance
payment on account of any such Casualty or Condemnation and shall pay all
expenses thereof. At Lessee's reasonable request, and at Lessee's sole cost and
expense, Lessor and the Bank shall participate in any such proceeding, action,
negotiation, prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessor or Lessee shall receive notice of a Casualty or a
possible Condemnation of the Property or any interest therein, Lessor or Lessee,
as the case may be, shall give notice thereof to the other and to the Bank
promptly after the receipt of such notice.
(d) This Lease shall terminate in the event of a Total
Condemnation, Significant Condemnation or Significant Casualty on the date
specified in and in accordance with Section 17.1. Subject to the foregoing, in
the event of a Casualty or receipt of notice by Lessee of a Condemnation, Lessee
shall, not later than sixty (60) days after such occurrence, but in any event
prior to the Lease Maturity Date, deliver to Lessor and the Bank a notice
stating that either (i) this Lease shall remain in full force and effect and, at
Lessee's sole cost and expense, Lessee shall promptly and diligently restore the
Property in accordance with the terms of Section 16.1(e) or (ii) this Lease
shall terminate in accordance with Section 17.1. This Lease shall not stay in
full force and effect (other than for Rent obligations as herein provided) under
the preceding clause (i) unless Lessee shall deliver to Lessor and the Bank an
Officer's Certificate stating that either (x) such Condemnation is neither a
Total Condemnation nor a Significant Condemnation or (y) such Casualty is not a
Significant Casualty.
(e) If, pursuant to this Section 16.l, this Lease shall
continue in full force and effect following a Casualty or Condemnation with
respect to the Property, Lessee shall, at its sole cost and expense, promptly
and diligently repair any damage to the Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections 11.1 and 12. 1
either (i) using the as-built plans and specifications for the Property (as
modified to give effect to any subsequent Modifications, any Condemnation
affecting the Property and all applicable Legal Requirements) so as to restore
the Property to the same condition, operation, function and value as existed
immediately prior to such Casualty or Condemnation, or (ii) in accordance with
such plans and specifications as are then generally in use by Lessee for the
conduct of its business operations, provided, however, that the repaired
premises shall have a value not less than its value just prior to said loss
("Tenant's Current Plans and Specifications"). In such event, title to this
Property shall remain with Lessor.
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(f) In no event shall a Casualty or Condemnation with respect
to which this Lease remains in full force and effect under this Section 16.1
affect Lessee's obligations to pay Rent pursuant to Article 3.
(g) Notwithstanding anything to the contrary set forth in
Section 16.1(a) or Section 16.1(e), if a Casualty occurs with respect to the
Property or Lessee receives notice of a Condemnation with respect to the
Property and, following such Casualty or Condemnation, the Property cannot
reasonably be restored, on or before the 15th day prior to the Lease Maturity
Date, (i) to substantially the same condition as existed immediately prior to
such Casualty or Condemnation (as modified to give effect to any subsequent
Modifications, any Condemnation affecting the Property and all applicable Legal
Requirements) or (ii) to Tenant's Current Plans and Specifications, then Lessee
shall be required to purchase the Property in accordance with the terms of
Article XVII and (x) any award, compensation or insurance proceeds to which
Lessor or Lessee may be entitled to by reason of their respective interests in
the Property on account of such Casualty or Condemnation shall be paid to Bank
and applied to the Interim Project Loan Debt (if the same has not been paid in
full and then in such case, Lessor), and (y) if any such award, compensation or
insurance proceeds shall not in fact be paid to Bank on or prior to the
Termination Date (as defined in Section 17.2), then Lessee shall pay to Bank, on
the Termination Date, an amount which, in the reasonable good-faith judgment of
Lessee (as evidenced by an Officer's Certificate), is equal to the award,
compensation or insurance proceeds that will be payable in connection with such
Casualty or Condemnation, and any such award, compensation or insurance proceeds
actually paid on or after such date shall be payable to Lessee. The amounts
referred to in the preceding clauses (x) and (y), to the extent actually
received by Bank net of all costs and expenses of collection, shall be applied
as a credit on the Termination Date to the payment of the Termination Value
payable in accordance with Article XVII. Provided that no Lease Event of Default
has occurred and is continuing, any proceeds in excess of the Interim Project
Loan Debt shall be paid to the Lessee. If a Lease Event of Default has occurred
and is continuing, then the proceeds in excess of the Interim Project Loan Debt
shall be paid to Lessor.
16.2 Environmental Matters. Promptly, upon Lessee's actual knowledge
of the presence of Hazardous Substances in any portion of the Property in
concentrations and conditions that constitute an Environmental Violation, Lessee
shall notify Lessor in writing of such condition. In the event of such
Environmental Violation, Lessee shall, not later than thirty (30) days after
Lessee has actual knowledge of such Environmental Violation, at its election
either (a) deliver to Lessor and the Bank an Officer's Certificate advising
Lessor of such Environmental Violation and a Termination Notice pursuant to
Section 17.l(b), or, (b) if Lessee does not deliver a Termination Notice
pursuant to Section 17.1(b), at Lessee's sole cost and expense, promptly and
diligently undertake any response, clean up, remedial or other action necessary
to remove, clean up or remediate the Environmental Violation in accordance with
the terms of Section 10.1. If Lessee does not deliver a Termination Notice
pursuant to Section 17.1(b) and is required to undertake such action to remove,
clean up or remediate as aforesaid, Lessee shall notify Lessor of Lessee's
proposed remedial actions, and, upon completion of remedial action by Lessee,
cause to be prepared by an environmental consultant reasonably acceptable to
Lessor a report describing the Environmental Violation and the actions taken by
Lessee (or its agents) in response to such Environmental Violation, and a
statement by the
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consultant that the Environmental Violation has been remedied in full compliance
with applicable Environmental Laws.
16.3 Notice of Environmental Matters. Promptly, but in any event
within five (5) Business Days from the date Lessor or Lessee has actual
knowledge thereof, Lessor or Lessee, as the case may be, shall provide to the
other written notice of any material pending or threatened claim, action or
proceeding involving any Environmental Law or any Release on or in connection
with the Property. All such notices shall describe in reasonable detail the
nature of the claim, action or proceeding. In addition, Lessor or Lessee, as the
case may be, shall provide to the other, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with the Property.
Lessor and Lessee shall also promptly provide such detailed reports of any such
material environmental claims as may reasonably be requested by the other or by
the Bank. Failure by the Lessor to provide any such notices to Lessee shall not
affect any of Lessee's obligations under this Lease, including its obligation
hereunder, if any, to remediate any Environmental Violation.
16.4 Environmental Indemnification Lessee shall defend, indemnify and
hold Lessor and Bank harmless against all costs, expenses, claims, damages,
penalties and liabilities of every kind or nature whatsoever (including
attorneys' fees) arising out of or resulting from the noncompliance of Lessee
with any Environmental Law. Such indemnification shall survive any termination
of this Lease.
ARTICLE XVII.
17.1 Termination upon Certain Events. (a) If Lessor or Lessee shall
have received notice of a Total Condemnation, then Lessee shall be obligated,
within sixty (60) days after Lessee receives notice to Lessor and Bank thereof
but no later than the Lease Maturity Date, to deliver a written notice to Lessor
and Bank in the form described in Section 17.2(a) (a "Termination Notice") of
the termination of this Lease.
(b) If either: (i) Lessee or Lessor shall have received notice
of a Condemnation, and Lessee shall have delivered to Lessor an Officer's
Certificate that such Condemnation is a Significant Condemnation; (ii) a
Casualty occurs, and Lessee shall have delivered to Lessor an Officer's
Certificate that such Casualty is a Significant Casualty; (iii) restoration of
the Property following a Casualty or Condemnation cannot be accomplished in
accordance with the terms and time frames set forth in Section 16.1(g); or (iv)
an Environmental Violation occurs or is discovered and Lessee shall have
delivered to Lessor an Officer's Certificate stating that, in the reasonable
good faith judgment of Lessee, the cost to remediate the same will exceed
twenty-five percent (25 %) of the Termination Value pursuant to Section 16.2
then, Lessee shall, simultaneously with the delivery of the Officer's
Certificate pursuant to the preceding clause (i), (ii), (iii) or (iv), deliver a
Termination Notice.
17.2 Procedures. (a) A Termination Notice shall contain: (i) notice of
termination of this Lease on a date not more than thirty (30) days after
Lessor's receipt of such Termination Notice and in all events not later than the
Lease Maturity Date (the "Termination Date"); and (ii)
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a binding and irrevocable agreement of Lessee to pay the Termination Value
(subject to the terms of Article XXIII) and purchase the Property on such
Termination Date.
(b) On the Termination Date, Lessee shall, subject to the terms
of Article XXIII, pay to Lessor the Termination Value plus all amounts owing in
respect of Rent theretofore accruing and Lessor shall convey the Property or the
remaining portion thereof, if any, to Lessee (or Lessee's designee) all in
accordance with Section 20.1, as well as deliver to Lessee any proceeds with
respect to Casualty or Condemnation theretofore received by Lessor; provided,
however, that if a Lease Event of Default shall have occurred and be continuing,
the proceeds in excess of the Interim Project Loan Debt, if any, shall be paid
to Lessor.
ARTICLE XVIII.
18.1 Lease Events of Default. A Lease Event of Default shall be
deemed to have occurred if any one or more of the following events (each a
"Lease Event of Default") shall occur:
(a) Lessee shall fail to make payment hereunder of (i) any
Interim Project Loan Basic Rent or any Supplemental Rent that consists of
principal under the Interim Project Loan Note within five (5) Business Days
after the same has become due and payable or (ii) the purchase price under
Article XXI or Termination Value after the same has become due and payable;
(b) Lessee shall, subject to the terms of Article XXIII with
respect to the Excepted Amounts, fail to make payment of any Developer Basic
Rent or Supplemental Rent (other than with respect to those items set forth in
clause (ii) of Section 18.1(a)) due and payable within ten (10) Business Days
after receipt of notice thereof from Lessor or Bank;
(c) Lessee shall fail to maintain insurance as required by
Article XV;
(d) Lessee shall fail to observe or perform, beyond applicable
notice and cure periods, if any, any term, covenant or condition of Lessee under
this Lease or any other Operative Agreement to which it is a party, other than
with respect to those set forth in Section 18.1(a), (b) or (c) hereof; or any
default shall have occurred and be continuing, beyond applicable notice and cure
periods, if any, which such default is attributable, directly or indirectly, to
any Guarantor under the Operative Agreements;
(e) any representation or warranty made by Lessee or any
Guarantor (i) in this Lease, (ii) in any other Operative Agreement to which
Lessee or any Guarantor is a party, (iii) in any document entered into by Lessee
or any Guarantor in connection herewith or therewith or (iv) in any document,
certificate or financial or other statement delivered by or on behalf of Lessee
or any Guarantor in connection herewith or therewith shall be false or
inaccurate in any material respect when so made.
(f) any Guarantor (other than Lessee) shall default after
applicable notice and cure periods in the due performance or observance by it of
any term, covenant or agreement contained in any Operative Agreement;
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(g) (i) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction seeking
(A) relief in respect of any Guarantor or Lessee or of a substantial part of the
Property or assets of any Guarantor or Lessee under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (B) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Guarantor or Lessee or for a substantial part of the property or assets
of any Guarantor or Lessee, (C) the winding up or liquidation of any Guarantor
or Lessee, and such proceeding or petition shall continue undismissed for sixty
(60) days or an order or decree approving or ordering any of the foregoing shall
be entered; or (ii) any Guarantor or Lessee shall (A) voluntarily commence any
proceeding or file any petition seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other Federal or
state bankruptcy, insolvency, receivership or similar law, (B) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or the filing of any petition described in (i) above, (C) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for any Guarantor or Lessee or for a substantial
part of the property or assets of any Guarantor or Lessee, (D) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (E) make a general assignment for the benefit of creditors, (F)
become unable, admit in writing its inability or fail generally to pay its debts
as they become due, or (G) take any action for the purpose of effecting any of
the foregoing; and
(h) any Guarantee or any provision thereof shall cease to be in
full force and effect, or any Guarantor, or any Person acting by or on behalf of
such Guarantor, shall deny or disaffirm such Guarantor's obligations under any
Guarantee.
Upon the occurrence of a Lease Event of Default, Lessor may, in
addition to the other rights and remedies provided for in this Article XVIII and
in Section 19.1, terminate this Lease by giving Lessee thirty (30) days notice
of such termination, and this Lease shall terminate, and all rights of Lessee
under this Lease shall cease; provided, however, that nothing herein shall
relieve Lessee of its obligations in all cases to pay either all of the Rent or
the Termination Value.
18.2 Surrender of Possession. If a Lease Event of Default shall have
occurred and be continuing and, whether or not this Lease shall have been
terminated pursuant to Section 18.1 Lessee shall, upon thirty (30) days written
notice from Lessor, surrender to Lessor possession of the Property and Lessee
shall quit the same. Lessor may enter upon and repossess the Property by such
means as are available at law or in equity, and may remove Lessee and all other
Persons, other than an Approved Sublessee which has been granted non-disturbance
pursuant to Section 25.2, and any and all personal property and Lessee's
inventory, personalty and severable Modifications from the Property. Lessor
shall have no liability by reason of any such entry, repossession or removal
performed in accordance with applicable law.
18.3 Reletting. If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 18.1, Lessor may, but shall be under no obligation to, relet the
Property, for the account of Lessee or otherwise, for such term or terms (which
may be greater or less than the period which would otherwise have
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constituted the balance of the Basic Term) and on such conditions (which may
include concessions or free rent) and for such purposes as Lessor may determine,
and Lessor may collect, receive and retain the rents resulting from such
reletting. Lessor shall not be liable to Lessee for any failure to relet the
Property or for any failure to collect any rent due upon such reletting.
18.4 Damages. Lessee shall, to the fullest extent permitted by law,
pay, as Supplemental Rent, all costs and expenses incurred by or on behalf of
Lessor in exercising its rights hereunder as a result of any Lease Event of
Default, including fees and expenses of counsel. Neither (a) the termination of
this Lease pursuant to Section 18.1; (b) the repossession of the Property; nor
(c) except to the extent required by applicable law, (i) the failure of Lessor
to relet the Property, (ii) the reletting of all or any portion thereof, or
(iii) the failure of Lessor to collect or receive any rentals due upon any such
reletting, shall relieve Lessee of its liability and obligations hereunder, all
of which shall survive any such termination, repossession or reletting. If any
Lease Event of Default shall have occurred and be continuing and,
notwithstanding any termination of this Lease pursuant to Section 18.1, Lessee
shall forthwith pay to Lessor all Rent and other sums due and payable hereunder
to and including the date of such termination. Thereafter, on the days on which
the Basic Rent or Supplemental Rent, as applicable, are payable under this Lease
or would have been payable under this Lease if the same had not been terminated
pursuant to Section 18.1 and until the end of the Basic Term hereof or what
would have been the Basic Term in the absence of such termination, Lessee shall
pay Lessor, as current liquidated damages (it being agreed that it would be
impossible accurately to determine actual damages) an amount equal to the Basic
Rent and Supplemental Rent that are payable under this Lease or would have been
payable by Lessee hereunder if this Lease had not been terminated pursuant to
Section 18.1, less the net proceeds, if any, which are actually received by
Lessor with respect to the period in question of any reletting of the Property
or any portion thereof; provided, however, that Lessee's obligation to make
payments of Basic Rent and Supplemental Rent under this Section 18.4 shall
continue only so long as Lessor shall not have received the amounts specified in
Section 18.5 or Section 18.6. In calculating the amount of such net proceeds
from reletting, there shall be deducted all of Lessor's and the Bank's expenses
in connection therewith, including repossession costs, brokerage commissions,
fees and expenses for counsel and any necessary repair or alteration costs and
expenses incurred in preparation for such reletting. To the extent Lessor
receives any damages pursuant to this Section 18.4, such amounts shall be
regarded as amounts paid on account of Rent.
18.5 Acceleration of Rent. If a Lease Event of Default shall have
occurred and be continuing, and this Lease shall not have been terminated
pursuant to Section 18. 1, and whether or not Lessor shall have collected any
current liquidated damages pursuant to Section 18.4, Lessor may, upon written
notice to Lessee, accelerate all payments of Rent due hereunder and, upon such
acceleration, Lessee shall immediately pay Lessor, as and for final liquidated
damages and in lieu of all current liquidated damages on account of such Lease
Event of Default beyond the date of such acceleration (it being agreed that it
would be impossible accurately to determine actual damages) an amount, equal to
the sum of (a) all Basic Rent (assuming interest at a rate per annum equal to
the Overdue Rate), as applicable, due from the date of such acceleration until
the later of (i) the end of the Basic Term or (ii) the payment of the
Termination Value, plus (b) the Termination Value provided that in no event
shall such amount exceed the sum of the Termination Value plus the Developer
Yield (Developer Yield being subject to adjustments
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pursuant to Article XXIII). Following payment of such amount by Lessee, Lessee
will be permitted to stay in possession of the Property for the remainder of the
Basic Term, subject to the terms and conditions of this Lease, including the
obligation to pay Supplemental Rent, provided that no further Lease Event of
Default shall occur and be continuing, following which Lessor shall have all the
rights and remedies set forth in this Article XVIII (but not including those set
forth in this Section 18.5). If any statute or rule of law shall limit the
amount of such final liquidated damages to less than the amount agreed upon,
Lessor shall be entitled to the maximum amount allowable under such statute or
rule of law.
18.6 Final Liquidation Damages. If a Lease Event of Default shall have
occurred and be continuing, whether or not this Lease shall have been terminated
pursuant to Section 18. 1 and whether or not Lessor shall have collected any
current liquidated damages pursuant to Section 18.4, Lessor shall have the right
to recover, by demand to Lessee and at Lessor's election, and Lessee shall pay
to Lessor, as and for final liquidated damages, and in lieu of all current
liquidated damages with respect to the Lessor beyond the date of such demand (it
being agreed that it would be impossible accurately to determine actual damages)
the sum of (a) the Termination Value and Developer Yield (Developer Yield being
subject to adjustments pursuant to Article XXIII), plus (b) all other amounts
owing in respect of Rent theretofore accruing under this Lease. Upon payment of
the amount specified pursuant to the first sentence of this Section 18.6, Lessee
shall be entitled to receive, from Lessor, at Lessee's request and cost, (i) a
deed to the Land or an assignment of Lessor's right, title and interest as
lessee under the Ground Lease, if any, (ii) conveyance of Lessor's entire
interest in the Property, including, by definition, the Improvements and
Modifications, by xxxx of sale and/or such other documents of conveyance as may
be appropriate, (iii) Lessor's right, title and beneficial interest in and to
each agreement executed by or on behalf of Lessor in connection with the
construction, development, use or operation of the Property (including, without
limitation, all right, title, and beneficial interest of Lessor with respect to
all warranty, performance, service and indemnity provisions), as and to the
extent that the same relate to the construction and operation of the Property,
in each case in recordable form and otherwise in conformity with local custom
and free and clear of the Lien of all mortgages (including the Mortgage) and any
Lessor Liens and any encumbrance other than the Permitted Exceptions
(collectively, the "Conveyance Documents"). Subject to the foregoing, the
Property shall be conveyed to Lessee (or Lessee's designee) "AS IS" and in its
then present physical condition. Lessee (or Lessee's designee) shall execute and
deliver to Lessor an assumption of all of Lessor's obligations under the Ground
Lease and Condominium Documents. If any statute or rule of law shall limit the
amount of such final liquidated damages to less than the amount agreed upon,
Lessor shall be entitled to the maximum amount allowable under such statute or
rule of law; provided, however Lessee shall not be entitled to receive an
assignment of Lessor's interest under the Ground Lease, if any, or in the
Property, the Improvements and Modifications unless Lessee shall have paid in
full the Termination Value and Developer Yield (Developer Yield being subject to
adjustments pursuant to Article XXIII) plus all other amounts owing in respect
of Rents theretofore accruing under the Lease.
18.7 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 18.1, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, reentry or repossession;
(c) the benefit of any laws now or hereafter in force exempting property
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from liability for rent or for debt; and (d) any other rights which might
otherwise limit or modify any of Lessor's rights or remedies under this Article
XVIII.
18.8 Assignment of Rights Under Contract. If a Lease Event of Default
shall have occurred and be continuing, and whether or not this Lease shall have
been terminated pursuant to Section 18. 1, Lessee shall, upon Lessor's demand,
immediately assign, transfer and set over to Lessor all of Lessee's right, title
and interest in and to each agreement executed by Lessee in connection with the
construction, development, use or operation of the Property (including, without
limitation, all right, title and interest of Lessee with respect to all
warranty, performance, service and indemnity provisions), as and to the extent
that the same relate to the construction and operation of the Property.
18.9 Remedies Cumulative. The remedies herein provided shall be
cumulative and in addition to (and not in limitation of) any other remedies
available at law, equity or otherwise.
18.10 Lessee's Right to Purchase During Lease Event of Default.
Notwithstanding any provision contained in this Lease or any other Operative
Agreement, if a Lease Event of Default has occurred and is continuing, Lessee
shall, nevertheless, have the right to exercise its purchase obligation in
accordance with Section 21.1 at any time prior to such time as a foreclosure
upon the Property has been ratified, and the exercise of such purchase
obligation shall be deemed to have cured such Lease Event of Default.
ARTICLE XIX.
19.1 Lessor's Right to Cure Lessee's Lease Defaults. Lessor, without
waiving or releasing any obligation or Lease Event of Default, may (but shall be
under no obligation to) remedy any Lease Event of Default for the account and at
the sole cost and expense of Lessee, and may, to the fullest extent permitted by
law, and notwithstanding any right of quiet enjoyment in favor of Lessee, enter
upon the Property for such purpose and take all such action thereon as may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
Lessee. All reasonable out-of-pocket costs and expenses so incurred (including
reasonable fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by Lessor,
shall be paid by Lessee to Lessor on demand.
ARTICLE XX.
20.1 Provisions Relating to Lessee's Termination of this Lease or
Exercise of Purchase Obligation. In connection with any termination of this
Lease pursuant to the terms of Section 17.1, or in connection with Lessee's
exercise of its purchase obligation pursuant to the terms of Section 21.1, upon
the date on which this Lease is to terminate and upon tender by Lessee of the
amounts set forth in Section 17.2(b) or 21.1, as applicable:
(a) Lessor shall execute and deliver to Lessee (or to Lessee's
designee), at Lessee's cost and expense, the Conveyance Documents. Subject to
the foregoing, the Property shall be conveyed to Lessee (or Lessee's designee)
"AS IS" and in its then present physical condition.
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(b) Lessee shall execute and deliver to Lessor an assumption
of all of Lessor's obligations under the Ground Lease and the Condominium
Documents, if applicable.
ARTICLE XXI.
21.1 Purchase Obligation. (a) If on or before the Lease Maturity Date
Lessee has not offered or arranged to be offered to Lessor Take-out Financing,
Alternative Take-out Financing (both as hereinafter defined in this Section
21.1) or other nonrecourse financing acceptable to Lessor, and if such financing
has not closed on or before the Lease Maturity Date, then Lessee (or its
designee) shall purchase the Property on the Lease Maturity Date, and, in such
event, the Lessee's purchase price shall be equal to the outstanding balance of
the Interim Project Loan, plus all other amounts due by Lessor under the Interim
Project Loan Documents, plus an amount equal to twelve percent (12%) of the
Total Property Costs as adjusted pursuant to Article XXIII.
(b) If, on or before the Lease Maturity Date, (i) Lessor is in
default under its obligations under the Lease, or the Interim Project Loan
Documents, (ii) Lessor has accepted financing offered or arranged to be offered
by Lessee under this Section 21.1, but has failed to close on such financing
within the time frame specified by Lessee, or (iii) Lessee has offered or
arranged to be offered to Lessor nonrecourse financing for not less than 95 % of
the Total Property Costs (a "Permanent Loan"), which Permanent Loan has a term
of twenty (20) years or less during which term the Permanent Loan shall be fully
amortized, and Lessee has agreed to execute and deliver to Lessor a Standard Net
Lease (as defined herein) providing a return per annum on the Developer Equity
equal to the Current Yield (as defined below) for the term of such financing
(the "Take-out Financing"), and Lessor does not accept such Take Out Financing
by delivery of an unconditional acceptance thereof in writing delivered to
Lessee within fifteen (15) days of receipt of Lessee's written offer to provide
such financing, then, in the case of any of (i), (ii) or (iii) of this subpart
(b), Lessee (or its designee) shall purchase the Property on or prior to the
Lease Maturity Date and, in such event, Lessee's purchase price shall be equal
to the outstanding balance of the Interim Project Loan plus all other amounts
due by Lessor under the Interim Project Loan Documents. "Current Yield" shall
mean: (x) 12%, if the long term unsecured debt rating of Borders Group, Inc.,
assigned by Standard & Poor's Corporation, is below BBB, (y) 11.5% if the long
term unsecured debt rating of Borders Group, Inc., assigned by Standard & Poor's
Corporation, is BBB or higher but below A and (z) 11%, if the long term
unsecured debt rating of Borders Group, Inc., assigned by Standard & Poor's
Corporation, is A or better. A "Standard Net Lease" shall mean a lease having a
primary term equal to the term of the Permanent Financing, with rent payable to
Lessor on a "net basis" (i.e., Lessee responsible for payment of all taxes,
insurance costs and for maintenance and repair of the Property containing such
other terms and conditions as are generally standard and consistent with
then-current industry standards for institutional lenders in securitized
mortgage financing programs, and providing eight (8) option terms of five (5)
years each on the same terms and conditions as during the Primary Term but with
payments of base rent to increase on the first day of each option term by the
lesser of ten percent (10%) or five (5) times the average annual increase in the
CPI for the five year period ending on the commencement of such option term;
provided, however, that notwithstanding the foregoing, in no event shall the
term of the Standard Net Lease (including any option terms which are contained
in the Standard Net Lease and which are exercised by Lessee) extend beyond the
term of the Ground Lease (including any option terms which are contained in the
Ground Lease). The term "CPI" shall mean the Consumer Price Index
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for all Urban Consumers - U.S. Average (1982-84 = 100) as determined by the
United States Department of Labor, Bureau of Labor Statistics for "All Items".
The obligations of the Lessee under the Standard Net Lease shall be guaranteed
by Borders Group, Inc. under a Lease Guaranty Agreement not less favorable to
Lessor than the Lease Guaranty Agreement attached as Exhibit E. Borders Group,
Inc. has executed this Lease solely for the purpose of acknowledging its
obligation to provide a Lease Guaranty Agreement for the Standard Net Lease.
(c) If, on or before the Lease Maturity Date, Lessee has offered or
arranged to be offered to Lessor nonrecourse financing for greater than or equal
to 87%, but less than 95%, of the Total Property Costs upon terms and conditions
(including a Standard Net Lease) providing a return per annum on the Developer
Equity (which shall, in such event, include any additional contribution to
equity made by Lessor to cover any spread between the 87 % + financing actually
offered and the 95% of the Total Property Costs) equal to the Current Yield for
the term of such financing (the "Alternative Take-out Financing"), and Lessor
does not accept such Alternative Take-out Financing by delivery of an
unconditional acceptance thereof in writing delivered to Lessee within fifteen
(15) days of receipt of Lessee's written offer to provide such financing, then
Lessee (or its designee), shall purchase the Property on or prior to the Lease
Maturity Date and, in such event, the Lessee's purchase price shall be equal to
the outstanding balance of the Interim Project Loan, plus all other amounts due
by Lessor under the Interim Project Loan Documents, plus an amount equal to
seven percent (7%) of the Total Property Costs as adjusted pursuant to Article
XXIII.
ARTICLE XXII.
22.1 Holding Over. If Lessee shall for any reason remain in possession
of the Property after the expiration or earlier termination of this Lease
(unless the Property is conveyed to Lessee), such possession shall be as a
tenancy at sufferance, during which time Lessee shall continue to pay
Supplemental Rent that would be payable by Lessee hereunder were the Lease then
in full force and effect with respect to the Property and Lessee shall continue
to pay all Rent at an annual rate equal to the average rate of the Rent payable
hereunder during the preceding Basic Term; provided, however that from and after
the sixtieth (60th) day Lessee shall remain in possession of the Property after
such expiration or earlier termination, Lessee shall pay Rent at an annual rate
equal to one hundred and ten percent (110%) of the Rent payable hereunder
immediately preceding such expiration or earlier termination. Such Rent shall be
payable from time to time upon demand by Lessor. During any period of tenancy at
sufferance, Lessee shall, subject to the second preceding sentence, be obligated
to perform and observe all of the terms, covenants and conditions of this Lease,
but shall have no rights hereunder other than the right, to the extent given by
law to tenants at sufferance, to continue its occupancy and use of such
Property. Nothing contained in this Article XXII shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the expiration
or earlier termination of this Lease as to the Property (unless the Property is
conveyed to Lessee) and nothing contained herein shall be read or construed as
preventing Lessor from maintaining a suit for possession of the Property or
exercising any other remedy available to Lessor at law or in equity.
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ARTICLE XXIII.
23.1 Lessor Default Under Lease, Development and Other Agreements.
(a) Lessor and Lessee acknowledge and agree that, in accordance with Article VI,
a default by Lessor under this Lease shall not affect Lessee's performance
hereunder, except that, in the event of such default by Lessor hereunder, Lessee
shall have the right to xxxxx, suspend, defer, reduce, set off, counterclaim or
raise a defense against the payment of (i) Developer Basic Rent, (ii) the
portion of Termination Value and Rent payable pursuant to Section 17.2 to the
extent it may exceed the balance of the Interim Project Loan and all other
amounts payable under the Interim Project Loan Documents; (iii) Lessee's
purchase price payable pursuant to Section 21.1 to the extent it may exceed the
balance of the Interim Project Loan and all other amounts payable under the
Interim Project Loan Documents, (iv) current or final liquidated damages payable
pursuant to Section 18.5 to the extent they may exceed the balance of the
Interim Project Loan and all other amounts payable under the Interim Project
Loan Documents, and (v) and all other amounts payable by Lessee hereunder to the
extent they may exceed the balance of the Interim Project Loan and all other
amounts payable under the Interim Project Loan Documents (items (i), (ii),
(iii), (iv) and (v) are herein sometimes referred to collectively as "Excepted
Amounts").
(b) In addition to the other rights and remedies described in this
Article XXIII, in the event that Lessee or any Guarantor has, in accordance with
the Operative Agreements, (a) purchased the Interim Project Loan Note and the
Mortgage from the Bank, as a result of a default by Lessor under the Interim
Project Loan Documents or this Lease, then, in such event, Lessee shall be
forever relieved from any obligation whatsoever to pay to Lessor under this
Lease Rent or any other amounts which may be or become due to Lessor hereunder
or (b) performed under the Guarantee, in a manner other than by purchase of the
Interim Project Loan Note and Mortgage from the Bank, as a result of a default
by Lessor under the Interim Project Loan Documents or this Lease, then, and if
such performance was made directly to the Bank, in such event, Lessee shall be
forever relieved from any obligation whatsoever to pay to Lessor under this
Lease an amount equitably equivalent to such performance under the Guarantee,
and to xxxxx, suspend, reduce and set off such amount against any Rent or other
amounts which may be due or become due to Lessor hereunder.
ARTICLE XXIV.
24.1 Risk of Loss. The risk of loss of or decrease in the enjoyment
and beneficial use of the Property as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
fully assumed by Lessee, and Lessor shall in no event be answerable or
accountable therefor.
ARTICLE XXV.
25.1 Subletting and Assignment. Lessee may assign this Lease or sublet
the whole or any part of the Property, provided, however, that no such
assignment or sublease shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder, and Lessee shall remain directly and primarily
liable under this Lease as to the Property, or portion thereof, so assigned or
sublet. Any sublease of any Property shall be made subject to and subordinated
to
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this Lease and the Mortgage and to the rights of the Lessor hereunder and
shall be subject to the prior written consent of Bank.
ARTICLE XXVI.
26.1 Estoppel Certificates. At any time and from time to time, upon
not less than twenty (20) days' prior request by Lessor or Lessee (the
"Requesting Party"), the other party (whichever party shall have received such
request, the "Certifying Party") shall furnish to the Requesting Party a
certificate signed by an individual having the office of vice president or
higher in the Certifying Party certifying that this Lease is in full force and
effect (or that this Lease is in full force and effect as modified and setting
forth the modifications); the dates to which the Basic Rent or Supplemental Rent
have been paid; to the best knowledge of the signer of such certificate, whether
or not the Requesting Party is in default under any of its obligations hereunder
(and, if so, the nature of such alleged default); and such other matters under
this Lease as the Requesting Party may reasonably request. Any such certificate
furnished pursuant to this Article XXVI may be relied upon by the Requesting
Party, and any existing or prospective mortgagee, purchaser or lender, and any
accountant or auditor, of, from or to the Requesting Party (or any Affiliate
thereof).
ARTICLE XXVII.
27.1 Right to Inspect. So long as Lessee shall have any obligations to
Lessor under this Lease, Lessee shall, upon reasonable notice from Lessor or
Bank (except that no notice shall be required if a Lease Event of Default has
occurred and is continuing), permit Lessor or Bank and their respective
authorized representatives to inspect the Property, provided that such
inspections shall not reasonably interfere with Lessee's business operations at
the Property.
27.2 No Waiver. No failure by Lessor or Lessee to insist upon the
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
ARTICLE XXVIII.
28.1 Acceptance of Surrender. No surrender to Lessor of this Lease or
of all or any portion of the Property or of any part thereof or of any interest
therein shall be valid or effective unless agreed to and accepted in writing by
Lessor and, prior to the payment or performance of all obligations under the
Interim Project Loan Documents, the Bank, and no act by Lessor or the Bank or
any representative or agent of Lessor or the Bank, other than a written
acceptance, shall constitute an acceptance of any such surrender.
ARTICLE XXIX.
29.1 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or
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any interest in this Lease or such leasehold estate, (b) the fee estate in any
Property, except as may expressly be stated in a written instrument duly
executed and delivered by the appropriate Person or (c) a beneficial interest in
Lessor.
ARTICLE XXX.
30.1 Notice. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing and delivered personally or
by a nationally recognized overnight courier service or mailed (by registered or
certified mail, return receipt requested, postage prepaid), addressed o the
respective parties, as follows:
If to Lessee: Borders, Inc.
000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Vice President-Development
with a copy to: Borders Group, Inc.
000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Vice President and General Counsel
and: Xxxxxxxxx Xxxxxx PLLC
000 Xxxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxx, Esq.
If to Lessor: Traverse Retail Limited Partnership
c/o Zaremba Group, Incorporated
00000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
and in all cases a KeyBank National Association
copy to the Bank: 000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: X.X. Xxxxxx, Large Corporate Lending
Division
or such additional parties and/or other address as such party may hereafter
designate (provided, however, in no event shall either party be obligated to
notify, in the aggregate, more than two (2) designees of the other party in
addition to those listed above), and shall be effective upon receipt or refusal
thereof.
ARTICLE XXXI.
31.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination.
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If any term or provision of this Lease or any application thereof shall be
declared invalid or unenforceable, the remainder of this Lease and any other
application of such term or provision shall not be affected thereby. If any
right or option of Lessee provided in this Lease, including any right or option
described in Articles XVI, XVII or XXI, would, in the absence of the limitation
imposed by his sentence, be invalid or unenforceable as being in violation of
the rule against perpetuities or any other rule of law relating to the vesting
of an interest in or the suspension of the power of alienation of property, then
such right or option shall be exercisable only during the period which shall end
twenty-one (21) years after the date of death of the last survivor of the
descendants of Xxxxxxxx X. Xxxxxxxxx, the former President of the United States,
Xxxxx Xxxx, the deceased automobile manufacturer, and Xxxx X. Xxxxxxxxxxx, the
founder of the Standard Oil Company, known to be alive on the date of the
execution, acknowledgment and delivery of this Lease.
31.2 Amendments and Modifications. Neither this Lease nor any
provision hereof (or thereof) may be amended, waived, discharged or terminated
except by an instrument in writing in recordable form signed by Bank, Lessor and
Lessee.
31.3 Successors and Assigns. All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided that neither of Lessor or Lessee
shall assign any right hereunder without the prior written consent of Bank.
31.4 Headings and Table of Contents. The headings and table of
contents in this Lease are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.
31.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
31.6 GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MICHIGAN, EXCEPT AS TO MATTERS RELATING
TO THE CREATION OF THE LEASEHOLD AND SUBLEASEHOLD ESTATES HEREUNDER, AND THE
EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH SUCH ESTATES ARE
LOCATED.
31.7 Memorandum of Lease. This Lease shall not be recorded, but Lessor
and Lessee shall execute and deliver a short-form memorandum of this Lease (a
"Memorandum of Lease") in form suitable for recording under the laws of the
jurisdiction in which the Property is located, which memorandum shall be
recorded at Lessee's sole cost and expense.
31.8 Limitations on Recourse. Notwithstanding anything contained in
this Lease to the contrary, Lessee agrees to look solely to Lessor's estate and
interest in the Property for the collection of any judgment requiring the
payment of money by Lessor in the event of liability by Lessor, and no other
property or assets of Lessor or any shareholder, owner or partner (direct or
indirect) in or of Lessor, or any director, officer, employee, beneficiary,
Affiliate of any of the
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foregoing shall be subject to levy, execution or other enforcement procedure for
the satisfaction of Lessee's remedies under or with respect to this Lease, the
relationship of Lessor and Lessee hereunder or Lessee's use of the Property or
any other liability of Lessor to Lessee. Nothing in this Section shall be
interpreted so as to limit the terms of Article VI.
31.9 Priority The Mortgage shall be subject and subordinate to the
Lease on or prior to the Lease Maturity Date. After the Lease Maturity Date, the
Mortgage shall be senior to the Lease without any further action by any Person.
ARTICLE XXXII.
32.1 Ground Lease. During the Basic Term, Lessee shall observe and
perform all of the obligations of Lessor under any Ground Lease of the Property
(collectively, the "Ground Lease"), a copy of such Ground Lease being attached
hereto as Exhibit D (including the payment of all rent and other amounts
thereunder) and, in connection therewith, shall, prior to the occurrence and
continuation of a Lease Event of Default, have the benefit of all of Lessor's
rights as lessee under any Ground Lease. If, prior to the Effective Date, a
short-form memorandum of the Ground Lease, in form suitable for recording under
the laws of the jurisdiction in which the Property is located (a "Memorandum of
Ground Lease"), has not been recorded, such memorandum shall be recorded at
Lessee's sole cost and expense.
32.2 Wal-Mart REA. Lessee acknowledges that the Property is subject to
the terms of an Easement with Covenants and Restrictions Affecting Land dated
October 24, 1995 (the "Wal-Mart REA"), a copy of which is attached as Exhibit
B-1 to the Ground Lease. Provided that no Lease Event of Default is continuing,
Lessor agrees not to consent to any amendment to the Wal-Mart REA without the
prior written consent of Lessee if such amendment, as determined in the sole
discretion of Lessee, would adversely affect Lessee's use or occupancy of the
Property.
32.3 Condominium. Lessee and Lessor acknowledge that pursuant to
paragraph 41 of the Ground Lease, the Landlord under the Ground Lease has
created the Grand Traverse Crossing Condominium (the "Condominium") and has
subjected the demised premises to a condominium Master Deed (all documents
creating, governing or providing for operation of the Condominium are
collectively referred to as the "Condominium Documents"). Lessee has, and hereby
confirms that it has, assumed, and shall comply with, all obligations under the
Condominium Documents applicable to the demised premises.
ARTICLE XXXIII.
33.1 Power of Attorney. Lessor named above hereby irrevocably
constitutes and appoints each of Lessee and Bank, independently, its true and
lawful attorney-in-fact to execute, acknowledge and deliver the Conveyance
Documents and any instruments and do and perform any acts such as are referred
to in Section 13.2, and Section 25.2, in the name and on behalf of Lessor;
provided, however, that the foregoing appointment, and exercise thereof by
Lessee or Bank, as the case may be, shall relate solely to Lessor's rights in
the Property and shall in no way be deemed to release the Lien of the Mortgage,
or to bind the Bank under the Assignment of Leases. The foregoing power of
attorney is a power coupled with an interest and cannot be revoked.
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ARTICLE XXXIV.
34.1 Lessee's Right of Specific Performance. Notwithstanding anything
herein to the contrary, in the event of Lessor's failure to convey the Property
as required under this Lease, Lessee may bring an action, for specific
performance, mandatory injunction, or otherwise, as permitted in equity to
enforce such obligations. In that regard, Lessor acknowledges and agrees that,
if the harm to Lessee is irreparable, Lessee cannot be compensated in damages
and that Lessee has no adequate remedy at law.
ARTICLE XXXV.
35.1 Lessor Liabilities. Lessor hereby represents, warrants and
covenants that Lessor shall not incur any obligation or Indebtedness whatsoever
to any Person, except as may be expressly provided in the Interim Project Loan
Documents; provided, however, that the foregoing provisions of this Section 35.1
shall not apply to or be binding upon any successor to Lessor or subsequent
owner of the property or holder of the Lessee's interest under the Ground Lease.
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IN WITNESS WHEREOF, the parties have caused this Lease be duly executed
and delivered as of the date first above written.
WITNESSES: BORDERS, INC. ("Lessee")
By:
---------------------------- ---------------------------
Its: Vice President
----------------------------
BORDERS GROUP, INC.
(pursuant to Section 21.1(b))
By:
---------------------------- ---------------------------
Its: Senior Vice President and
Chief Financial Officer
----------------------------
TRAVERSE RETAIL LIMITED PARTNERSHIP
By: Xxxxxxx Traverse, LLC
a Delaware limited liability
company
Its: General Partner
By:
---------------------------- -------------------------------
Its:
---------------------------- -------------------------------
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged on this day of October, 2000.
------
KEYBANK NATIONAL ASSOCIATION
By:
--------------------------------
Its:
-------------------------------
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STATE OF MICHIGAN )
) SS.
COUNTY OF WASHTENAW )
On this day of October, 2000, before me, a Notary Public in and
for said County and State, personally appeared Xxxxxx X. Xxxxxxx, the Vice
President of Borders, Inc., a Colorado corporation, who acknowledged the signing
of the foregoing instrument on behalf of said corporation to be his free act and
deed and the free act and deed of said corporation for the uses and purposes set
forth therein.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
------------------------------------------
Notary Public
STATE OF MICHIGAN )
) SS.
COUNTY OF WASHTENAW )
On this day of October, 2000, before me, a Notary Public in and
for said County and State, personally appeared Xxxxxx X. Xxxxxxx, the Senior
Vice President and Chief Financial Officer of Borders Group, Inc., a Michigan
corporation, who acknowledged the signing of the foregoing instrument on behalf
of said corporation to be his free act and deed and the free act and deed of
said corporation for the uses and purposes set forth therein.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
------------------------------------------
Notary Public
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STATE OF OHIO )
) SS.
COUNTY OF )
On this day of October, 2000, before me, a Notary Public in and
for said County and State, personally appeared the
of Xxxxxxx Traverse, LLC, the General Partner of TRAVERSE RETAIL
LIMITED PARTNERSHIP, a Delaware limited partnership, who acknowledged the
signing of the foregoing instrument on behalf of said General Partner to be his
free act and deed and the free act and deed of said limited partnership for the
uses and purposes set forth therein.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal.
------------------------------------------
Notary Public
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LEASE APPENDIX 1
RULES OF USAGE AND DEFINITIONS
The following rules of usage shall apply to this Appendix 1
and the Lease (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions
set forth herein or in any other document shall be equally applicable to
the singular and plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any
document to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits are references to articles, sections,
paragraphs, clauses, annexes, appendices, schedules or exhibits in or
to such document.
(c) The headings, subheadings and table of contents used in
any document are solely for convenience of reference and shall not
constitute a part of any such document nor shall they affect the
meaning, construction or effect of any provision thereof.
(d) References to any Person shall include such Person, its
successors and permitted assigns and transferees.
(e) Except as otherwise expressly provided, reference to any
agreement means such agreement as amended, modified, extended or
supplemented from time to time in accordance with the applicable
provisions thereof.
(f) Except as otherwise expressly provided, references to any
law includes any amendment or modification to such law and any rules or
regulations issued thereunder or any law enacted in substitution or
replacement therefor.
(g) When used in any document, words such as "hereunder",
"hereto", "hereof" and "herein" and other words of like import shall,
unless the context clearly indicates to the contrary, refer to the
whole of the applicable document and not to any particular article,
section, subsection, paragraph or clause thereof.
(h) References to "including" means including without
limiting the generality of any description preceding such term and for
purposes hereof the rule of ejusdem generis shall not be applicable to
limit a general statement, followed by or referable to an enumeration of
specific matters, to matters similar to those specifically mentioned.
TRAVERSE CITY, MICHIGAN
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Definitions
"Affiliate" shall mean with respect to any Person, any other
Person (i) which directly or indirectly controls, is controlled by, or is under
common control with such Person, (ii) which beneficially owns or holds 5% or
more of any class of the voting or other equity interests of such Person, or
(iii) 5% or more of any class of voting interests or other equity interests of
which is beneficially owned or held, directly or indirectly, by such Person.
Control, as used in this definition, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise, including the power to elect a majority of the directors
or trustees of a corporation or trust, as the case may be.
"Appurtenant Rights" shall mean (i) all agreements, easements,
rights of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land or the Improvements, including, without limitation, the
use of any streets, ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to the Land and (ii) all permits, licenses and rights,
whether or not of record, appurtenant to the Land.
"Assignment of Lease" shall have the meaning assigned to such
term in the Interim Project Loan Agreement.
"Bank" shall mean KeyBank National Association, a national
banking association, together with its successors and assigns.
"Basic Rent" shall have the meaning assigned to such term in
Section 3.1 of the Lease.
"Basic Term" shall have the meaning assigned to such term in
Section 2.2 of the Lease.
"Borders" shall mean Borders, Inc., a corporation organized
and existing under the laws of the State of Colorado, and its permitted
successors and assigns.
"Business Day" shall mean any day other than a Saturday or
Sunday or a legal holiday on which commercial banks are authorized or required
to be closed for business in New York, New York, Delaware or Ohio.
"Casualty" shall mean, with respect to the Property, any
damage or destruction of all or any portion of the Property as a result of a
fire or other casualty.
"Certifying Party" shall have the meaning specified in Section
26.1 of the Lease.
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"Claims" shall mean any and all obligations, liabilities,
losses, actions, suits, penalties, claims, demands, costs and expenses
(including, without limitation, reasonable attorney's fees and expenses) of any
nature whatsoever.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute thereto.
"Condemnation" shall mean any taking or sale of the use,
access, occupancy, easement rights or title to the Property or any part thereof,
wholly or partially (temporarily or permanently), by or on account of any actual
or threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain, including an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, the Property
or alter the pedestrian or vehicular traffic flow to the Property so as to
result in a change in access to the Property, or by or on account of an eviction
by paramount title or any transfer made in lieu of any such proceeding or
action.
"Condominium Documents" shall have the meaning assigned to
such term in Section 32.3 of the Lease.
"Contingent Obligations" shall mean, as to any Person, any
obligation of such Person guaranteeing or in effect guaranteeing any liability
or obligation of any other Person (other than, if the first Person is a
Guarantor, another Guarantor) in any manner, whether directly or indirectly,
including any agreement, undertaking or arrangement to indemnify or hold
harmless any other person (other than, if the first Person is a Guarantor,
another Guarantor), any performance bond or other suretyship arrangement, any
contingent agreement to purchase or provide funds for such liability or
obligation, any comfort letter, any take-or-pay contract, and any other form of
assurance against loss, except endorsements of negotiable or other instruments
for deposit or collection in the ordinary course of business.
"Control" shall mean (including the correlative meanings of
the terms "controlled by" and "under common control with"), as used with respect
to any Person, the possession directly or indirectly, of the power to direct or
cause the direction of the management policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.
"Conveyance Documents" shall have the meaning assigned to such
term in Section 18.5 of the Lease.
"Default" shall mean any event or condition which, with the
lapse of time or the giving of notice, or both, would constitute a Lease Event
of Default.
"Developer Equity" shall mean, as of the date hereof, the sum
of $88,729.63 as such amount may be increased, dollar for dollar, as a result of
the application of principal payments on the Interim Project Loan which reduce
the principal balance of the Interim Project Loan.
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"Developer Yield" shall mean the sum of $887.30 per month,
payable as Basic Rent under the Lease.
"Dollars", "U.S. Dollars" and "$" shall mean dollars in lawful
currency of the United States of America.
"Effective Date" shall mean October 25, 2000.
"Environmental Audit" shall mean a phase one environmental
audit of the Property caused to be obtained by the Lessor with respect to the
Property.
"Environmental Complaint" shall mean any written complaint
(including but not limited to any complaint alleging a cause of action for
personal injury or property damage or natural resource damage or equitable
relief), order, notice of violation, citation, request for information issued
pursuant to any Environmental Laws by a Governmental Authority, subpoena or
other written notice of any type relating to, arising out of, or issued pursuant
to any of the Environmental Laws or any Environmental Conditions, as the case
may be.
"Environmental Conditions" shall mean any conditions of the
environment, including the work place, the ocean, natural resources (including
flora or fauna), soil, surface water, ground water, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the work place.
"Environmental Violation" shall mean any activity, occurrence
or condition that violates or threatens to violate or results in or threatens to
result in non-compliance with any Environmental Law.
"Equipment" shall mean equipment, apparatus, furnishings,
fittings and personal property of every kind and nature whatsoever purchased,
leased or otherwise acquired by the Lessee or the Lessor and now or subsequently
attached to, contained in or used or usable in any way in connection with any
operation or letting of the Property, including but without limiting the
generality of the foregoing, all screens, awnings, shades, blinds, curtains,
draperies, artwork, carpets, rugs, storm doors and windows, shelving, display
cases, counters, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilation, air conditioning and
air-cooling apparatus, refrigerating, and incinerating equipment, escalators,
elevators, loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus), telephones,
communication systems (including satellite dishes and antennae), televisions,
computers, sprinkler systems and
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other fire prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description together with all additions
and accessions thereto, substitutions therefor and replacements thereof;
provided, however, that Equipment shall not include any inventory or trade
fixtures at any time and from time to time acquired by the Lessee in connection
with the Property.
"Facility" shall mean a facility used for the treatment,
storage or disposal of Hazardous Substances.
"Fixtures" shall mean all fixtures relating to the
Improvements, including all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto, exclusive of trade fixtures at any time and from time to time
acquired by Lessee in connection with the Property.
"GAAP" shall mean generally accepted accounting principles as
are in effect from time to time, and applied on a basis consistent with the
prior financial historical statements both as to classification of items and
amounts.
"Governmental Authority" shall mean any national, federal,
state, local or other government or political subdivision or any agency,
authority, bureau, central bank, commission, department or instrumentality of
either, or any court, tribunal, grand jury or arbitrator, in each case whether
foreign or domestic.
"Guarantee" shall mean any guarantee executed and delivered by
any Guarantor in connection with the Property.
"Guarantor" shall mean Borders Group, Inc., a Michigan
corporation, or any other Person that shall execute and deliver a Guarantee.
"Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety; or (iii) any substance, material,
product, derivative, compound or mixture, mineral, chemical, waste, gas, medical
waste or pollutant that would support the assertion of any claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law.
"Improvements" shall mean all buildings, structures, Fixtures,
Equipment, and other improvements of every kind existing at any time and from
time to time on or under the Land, together with any and all appurtenances to
such buildings, structures or improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time.
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"Indebtedness" shall mean as to any Person at a particular
time, (a) indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise and (b) obligations under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases in respect of which obligations such Person is liable, contingently or
otherwise, or in respect of which obligations such Person assures a creditor
against loss.
"Insurance Requirements" shall mean all terms and conditions
of any insurance policy required by the Lease to be maintained by the Lessee and
all requirements of the issuer of any such policy.
"Interim Project Loan" shall mean the Traverse Loan, as
defined in the Interim Project Loan Agreement.
"Interim Project Loan Agreement" shall mean the Credit
Agreement dated as of the date hereof between the Bank, Lessor and other
lessors.
"Interim Project Loan Agreement Interest Rate" shall mean the
interest rate provided for in Section 2.2 of the Interim Project Loan Agreement
and, if applicable, the Default Rate, as defined in the Interim Project Loan
Agreement, provided for in Section 2.6 of the Interim Project Loan Agreement.
"Interim Project Loan Basic Rent" shall mean an amount equal
to the interest due on the Interim Project Loan on any Payment Date pursuant to
the Interim Project Loan Agreement.
"Interim Project Loan Debt" shall mean, on any date, the
principal amount of the Interim Project Loan Note then outstanding, together
with all accrued and unpaid interest thereon and all other Indebtedness or other
obligations owing by Lessee or Lessor to Bank under the Operative Agreements.
"Interim Project Loan Documents" shall mean the Loan
Documents, as defined in the Interim Project Loan Agreement.
"Interim Project Loan Note" shall mean any Note, as defined in
the Interim Project Loan Agreement, executed by Lessor.
"Land" shall mean the parcel of real property described on
Exhibit A of the Lease for Land and all Appurtenant Rights attached thereto.
"Law" shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Governmental Authority.
"Lease" shall have the meaning given to such term in the first
paragraph hereof.
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"Lease Event of Default" shall have the meaning given to such
term in Section 18.1 of the Lease.
"Lease Maturity Date" shall mean the later of (a) January 25,
2001, (b) the Maturity Date (as defined in the Interim Project Loan Agreement)
or (c) such later date as agreed to by Lessor, Lessee and, if the Interim
Project Loan Debt has not been paid in full, Bank.
"Legal Requirements" shall mean all Federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting any Property, any
Improvements or the demolition, construction, use or alteration thereof or
access thereto, whether now or hereafter enacted and in force, including any
that require repairs, modifications or alterations in or to any Property or in
any way limit the use and enjoyment thereof (including all building, zoning and
fire codes and the Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101
et. seq. and any other similar Federal, state or local laws or ordinances and
the regulations promulgated thereunder) and any that may relate to environmental
requirements (including all Environmental Laws), and all permits, certificates
of occupancy, licenses, authorizations and regulations relating thereto, and all
covenants, agreements, restrictions and encumbrances contained in any
instruments which are either of record or known to the Lessee affecting any
Property, the Appurtenant Rights and any easements, licenses or other agreements
entered into pursuant to Section 13.2 of the Lease.
"Lessee" shall mean Borders, Inc., a Colorado corporation, its
successors and assigns.
"Lessor" shall mean the Person identified as the Lessor in the
Lease.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against Lessor, (b)
any act or omission of Lessor which is not required by the Interim Project Loan
Documents or is in violation of any of the terms of the Interim Project Loan
Documents, (c) any claim against Lessor with respect to Taxes against which
Lessee is not required to indemnify Lessor, or (d) any claim against Lessor
arising out of any transfer by Lessor of all or any portion of the interest of
Lessor in the Property, other than the transfer of title to or possession of any
Property by Lessor pursuant to and in accordance with the Lease, the Interim
Project Loan Agreement or pursuant to the exercise of the remedies set forth in
Article XVIII of the Lease.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.
"Material Adverse Effect" shall mean (a) a material adverse
effect upon the validity or enforceability of any of the Interim Project Loan
Documents or the Operative Agreements, (b) a material adverse effect on the
business, properties, assets, financial condition or results of operations of
the Guarantor and its subsidiaries taken as a whole, (c) a material impairment
of the ability of Guarantor and its subsidiaries taken as a whole to duly and
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punctually pay or perform its or their Indebtedness, or (d) a material
impairment of the ability of the Bank, to the extent permitted, to enforce its
legal remedies pursuant the Interim Project Loan Documents or any other
Operative Agreement.
"Memorandum of Lease" shall have the meaning specified in
Section 31.7 of the Lease.
"Modifications" shall have the meaning specified in Section
12.1 of the Lease.
"Mortgage" shall mean, with respect to the Property, the
Mortgage (as defined in the Interim Project Loan Agreement) executed by Lessor,
or any other Mortgage and Security Agreement made by the Lessor in favor of the
Bank in order to create a first priority mortgage lien on the Property.
"Officer's Certificate" shall mean a certificate signed by any
individual holding the office of vice president or higher, which certificate
shall certify as true and correct the subject matter being certified to in such
certificate.
"Operative Agreements" shall mean the Interim Project Loan
Agreement and the other Interim Project Loan Documents.
"Overdue Rate" shall mean the Default Rate (as defined in the
Interim Project Loan Agreement).
"Payment Date" shall mean each day that a payment of principal
or interest, as the case may be, is due and payable on the Interim Project Loan
Note, as set forth in the Interim Project Loan Agreement.
"Permitted Exceptions" shall mean:
(i) Liens of the types described in clauses (i), (ii) and
(v) of the definition of Permitted Liens; and
(ii) all encumbrances, exceptions, restrictions, easements,
rights of way, servitudes, encroachments and irregularities in title,
other than Liens which, in the reasonable assessment of Lessor or
Lessee, do not materially impair the use of the Property for its
intended purpose.
"Permitted Liens" shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due
and payable;
(ii) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate
in any fund in connection with
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worker's compensation, unemployment insurance, old-age pensions or
other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers,
or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of
landlords securing obligations to pay lease payments that are not yet
due and payable or in default;
(iv) pledges or deposits made in the ordinary course of
business to secure performance of bids, tenders, contracts (other than
for the repayment of Indebtedness) or leases, not in excess of the
aggregate amount due thereunder, or to secure statutory obligations, or
surety, appeal, indemnity, performance or other similar bonds required
in the ordinary course of business;
(v) encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of
which materially impairs the use of such Property or the value thereof,
and none of which is violated in any material respect by existing or
proposed structures or land use;
(vi) the following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been
stayed and continue to be stayed or (B) if a final judgment is entered
and such judgment is discharged within thirty (30) days of entry, and
in either case individually or in the aggregate, they could not
reasonably be expected to have a Material Adverse Effect;
(1) Liens for taxes, assessments or similar
charges due and payable and subject to interest or
penalty, provided that the Guarantor or Lessor
maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all
such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien
and is otherwise conducted in accordance with the
provisions of the Participation Agreement;
(2) Liens upon, and defects of title to, the
Property, including any attachment of the Property or
other legal process prior to adjudication of a dispute
on the merits; or
(3) Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens.
"Person" shall mean any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, governmental authority or any other entity.
"Property" shall have the meaning set forth in Section 2.1 of
the Lease.
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"Regulated Substances" shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material,
refuse, garbage, wastes, chemicals, petroleum products, by-products, co
products, impurities, dust, scrap, heavy metals, any substance defined as a
"hazardous substance," "pollutant," "pollution," "contaminant," "hazardous or
toxic substance," "extremely hazardous substance," "toxic chemical," "toxic
waste," "hazardous waste," "industrial waste," "residual waste," "solid waste,"
"municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste,"
"medical waste," "regulated substance" or any related materials, substances or
wastes as now or hereafter defined pursuant to any Environmental Laws, the
generation, manufacture, extraction, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge, escape,
release or other management or mismanagement of which is regulated by the
Environmental Laws.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Rent" shall have the meaning assigned to such term in Section
3.4 of the Lease.
"Requesting Party" shall have the meaning specified in Section
26.1 of the Lease.
"Significant Casualty" shall mean a Casualty during the last
two (2) years of any Term that in the reasonable, good faith judgment of the
Lessee either (a) as a result of such damage or destruction Lessee's fixtures,
equipment or other property shall be damaged or destroyed in an amount exceeding
Five Hundred Thousand Dollars ($500,000), or (b) the extent of such damage or
destruction is such that the cost of restoration would exceed fifty percent
(50%) of the amount it would cost to replace Lessee's building in its entirety
at the time of such damage or destruction.
"Significant Condemnation" shall mean a Condemnation that in
the reasonable, good faith judgment of the Lessee either (a) affects at least
30% of usable space of the Property and renders the Property unsuitable for
continued use as commercial or retail property of the type of such Property
immediately prior to such Condemnation or (b) is such that restoration of such
Property to substantially its condition as existed immediately prior to such
Condemnation would be impracticable or impossible.
"Supplemental Rent" shall mean the outstanding principal
amount of the Interim Project Loan Note and all other amounts, liabilities and
obligations (other than Basic Rent) under the Lease or under any of the other
Operative Agreements including, without limitation, fees, costs and expenses
payable to the Bank pursuant to the Interim Project Loan Agreement or any other
Interim Project Loan Document, or otherwise, and payments required to be made by
Lessor under the Termination Value.
"Term" shall have the meaning specified in Section 2.2 of the
Lease.
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"Termination Date" shall have the meaning specified in Section
17.2 of the Lease.
"Termination Notice" shall have the meaning specified in
Section 17.1 of the Lease.
"Termination Value" shall mean an amount equal to the sum of
(a) the Interim Project Loan Debt, and (b) the Developer Yield, all calculated
as of the Termination Date, or, if later, the date the Termination Value is
actually paid.
"Total Condemnation" shall mean a Condemnation that involves a
taking of Lessor's entire title to the Property.
"Total Property Costs" shall mean $1,774,592.60.
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