Exhibit 10.40
MASTER LEASE
THIS MASTER LEASE (this "Lease") is made as of December 4, 2001 (the
"Effective Date"), by and between DOUBLE 9 PROPERTY IV LLC, a Delaware limited
liability company ("Lessor"), whose address is c/o U.S. Realty Advisors, LLC,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and DOE FAMILY II LLC, a
Massachusetts limited liability company ("Lessee"), whose address is 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
W I T N E S S E T H :
THAT, in consideration of the mutual covenants and agreements herein
contained, Lessor and Lessee hereby covenant and agree as follows:
1. CERTAIN DEFINED TERMS. The following terms shall have the following
meanings for all purposes of this Lease:
"Acknowledgement" means the Acknowledgement of Master Lease Assignment and
Subordination, Nondisturbance and Attornment Agreement among Lessor, Lessee,
Lender and Remainderman, as the same may be amended from time to time. A
duplicate original Acknowledgement will be executed and recorded in the
applicable real property records for each Property.
"Action" has the meaning set forth in Section 23.A(iv).
"ADA" has the meaning set forth in Section 16.C.
"Additional Rental" has the meaning set forth in Section 5.C.
"Adjustment Date" means the first day of the month following the month in
which the first anniversary of the Effective Date occurs, and every one year
anniversary thereafter during the Lease Term (including the extension periods if
Lessee exercises its option pursuant to Section 27).
"Affiliate" means any Person which directly or indirectly controls, is
under common control with, or is controlled by any other Person. For purposes of
this definition, "controls", "under common control with" and "controlled by"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
"Aggregate Assumed Base Annual Rental" means the aggregate amount of Base
Annual Rental required to be paid by Lessee during the Assumed Base Annual
Rental Period.
"Aggregate Fixed Charge Coverage Ratio" shall have the meaning set forth
in Section 8.A.
"Aggregate Rent Refund" means the positive difference, if any, between the
Aggregate Assumed Base Annual Rental and the CPI-Adjusted Rent.
"Applicable Regulations" means all applicable statutes, regulations,
rules, ordinances, codes, licenses, permits, orders and approvals of each
Governmental Authority having jurisdiction over Lessee and/or any of the
Properties, including, without limitation, all health, building, fire, safety
and other codes, ordinances and requirements and all applicable standards of the
National Board of Fire Underwriters and the ADA, in each case, as amended, and
any judicial or administrative interpretation thereof, including any judicial
order, consent, decree or judgment applicable to Lessee.
"Applicable Rent Reduction Percentage" means, with respect to any
Property, a fraction, the numerator of which shall be the Purchase Price for
such Property, and the denominator of which shall be the sum of the Purchase
Price for all of the Properties then subject to this Lease, including such
Property.
"Assumed Base Annual Rental Period" means the period commencing on January
1, 2002 and ending on December 31, 2021.
"Base Annual Rental" means $1,468,344.72, subject to the increases
provided in Section 5.B.
"Base Monthly Rental" means an amount equal to 1/12 of the applicable Base
Annual Rental.
"Business Day" means a day on which banks located in Phoenix, Arizona are
not required or authorized to remain closed.
"Code" means the United States Bankruptcy Code, 11 U.S.C. Sec. 101 et
seq., as amended.
"CPI" means the Consumer Price Index which is designated for the
applicable month of determination as the United States City Average for All
Urban Consumers, All Items, Not Seasonally Adjusted, with a base period equaling
100 in 1982-1984, as published by the United States Department of Labor's Bureau
of Labor Statistics or any successor agency.
"CPI-Adjusted Rent" means the aggregate amount of Base Annual Rental that
would have been paid during the entire Assumed Base Annual Rental Period had the
Base Annual Rental on each CPI Adjustment Date been increased over the Base
Annual Rental immediately preceding such CPI Adjustment Date by two times the
applicable CPI Increase.
"CPI Adjustment Date" means the first day of the month following the month
in which the first anniversary of the Effective Date occurs, and every one year
anniversary thereafter during the Lease Term.
"CPI Increase" means the quotient (expressed as a percentage) of (a) the
positive difference, if any, between (i) the CPI for the month which is one
month prior to the month of the applicable CPI Adjustment Date and (ii) the CPI
for the month which is thirteen months prior to the month of such CPI Adjustment
Date (the "Base CPI"), and (b) the Base CPI. In the event the statistics are not
available or in the event that publication of the CPI is modified or
discontinued in its entirety, the CPI Increase shall be determined on the basis
of an index chosen by Lessor as a comparable and
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recognized index of the purchasing power of the United States consumer dollar
published by the United States Department of Labor or other governmental agency.
In the event that the CPI contemplated herein is not reported for the months
required for the calculation set forth above, the parties agree to utilize the
CPI reported for the month(s) nearest preceding the month(s) required for such
calculation.
"De Minimis Amounts" shall mean, with respect to any given level of
Hazardous Materials, that level or quantity of Hazardous Materials in any form
or combination of forms, the use, storage or release of which does not
constitute a violation of, or require regulation or remediation under, any
Environmental Laws and is customarily employed in the ordinary course of, or
associated with, similar businesses located in the states in which the
Properties are located.
"Default Rate" means 18% per annum or the highest rate permitted by law,
whichever is less.
"Disclosures" has the meaning set forth in Section 8.C.
"Effective Date" has the meaning set forth in the Preamble.
"Environmental Insurer" means American International Specialty Lines
Insurance Company or such other insurer providing Environmental Policies
reasonably acceptable to Lessor and Lessee.
"Environmental Laws" means any present and future federal, state and local
laws, statutes, ordinances, rules, regulations and the like, as well as common
law, relating to Hazardous Materials and/or the protection of human health or
the environment, by reason of a Release or a Threatened Release of Hazardous
Materials or relating to liability for or costs of Remediation or prevention of
Releases. "Environmental Laws" includes, but is not limited to, the following
statutes, as amended, any successor thereto, and any regulations, rulings,
orders or decrees promulgated pursuant thereto, and any state or local statutes,
ordinances, rules, regulations and the like addressing similar issues: the
Comprehensive Environmental Response, Compensation and Liability Act; the
Emergency Planning and Community Right-to-Know Act; the Hazardous Materials
Transportation Act; the Resource Conservation and Recovery Act (including but
not limited to Subtitle I relating to underground storage tanks); the Solid
Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances
Control Act; the Safe Drinking Water Act; the Occupational Safety and Health
Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide
and Rodenticide Act; the Endangered Species Act; the National Environmental
Policy Act; the River and Harbors Appropriation Act; New Hampshire Revised
Statutes Annotated Sections 147-A and 147-B (with respect to any Properties
located in the State of New Hampshire) and Rhode Island General Laws Section
23-19.1-1 et seq. (with respect to any Properties located in the State of Rhode
Island). "Environmental Laws" also includes, but is not limited to, any present
and future federal, state and local laws, statutes, ordinances, rules,
regulations and the like, as well as common law: conditioning transfer of
property upon a negative declaration or other approval of a Governmental
Authority of the environmental condition of the property; requiring notification
or disclosure of Releases or other environmental condition of any of the
Properties to any Governmental Authority or other person or entity, whether or
not in connection with transfer of
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title to or interest in property; imposing conditions or requirements relating
to Hazardous Materials in connection with permits or other authorization for
lawful activity; relating to nuisance, trespass or other causes of action
related to Hazardous Materials; and relating to wrongful death, personal injury,
or property or other damage in connection with the physical condition or use of
any of the Properties by reason of the presence of Hazardous Materials in, on,
under or above any of the Properties.
"Environmental Liens" has the meaning set forth in Section 16.D(ix).
"Environmental Policies" means the environmental insurance policy or
policies, as applicable, issued by Environmental Insurer to Lessor and Lessee
with respect to the Properties, which Environmental Policies shall be in form
and substance satisfactory to each of Lessor and Lessee in its sole discretion.
"Event of Default" has the meaning set forth in Section 23.
"Extended Term" means the period subsequent to the expiration of the
Primary Term during which this Lease is actually in effect.
"FCCR Period" means the twelve month period of time immediately preceding
the date on which Lessee gives written notice to Lessor that Lessee is proposing
to substitute a Substitute Property as permitted by Section 57.A.
"Fixed Charge Coverage Ratio" has the meaning set forth in Section
57.B(i)(2).
"GAAP" means generally accepted accounting principles consistently
applied.
"Governmental Authority" means any governmental authority, agency,
department, commission, bureau, board, instrumentality, court or
quasi-governmental authority of the United States, the states in which the
Properties are located or any political subdivision thereof.
"Guarantors" means, collectively, 99 Boston, Inc., a Massachusetts
corporation, and 99 West, Inc., a Massachusetts corporation.
"Guaranty" means that certain unconditional guaranty of payment and
performance dated as of the date of this Lease executed by Guarantors with
respect to the obligations of Lessee under this Lease, as the same may be
amended from time to time.
"Hazardous Materials" means (i) any toxic substance or hazardous waste,
substance, solid waste, or related material, or any pollutant or contaminant;
(ii) radon gas, asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, transformers or other equipment which contains
dielectric fluid containing levels of polychlorinated biphenyls in excess of
federal, state or local safety guidelines, whichever are more stringent, or any
petroleum product; (iii) any substance, gas, material or chemical which is or
may be defined as or included in the definition of "hazardous substances,"
"toxic substances," "hazardous materials," "hazardous wastes," "regulated
substances" or words of similar import under any Environmental Laws; and (iv)
any other chemical, material, gas or substance the exposure to or release of
which is or may be prohibited, limited or regulated by any Governmental
Authority that asserts or may
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assert jurisdiction over any of the Properties or the operations or activity at
any of the Properties, or any chemical, material, gas or substance that does or
may pose a hazard to the health and/or safety of the occupants of any of the
Properties or the owners and/or occupants of property adjacent to or surrounding
any of the Properties.
"Indemnified Parties" means Lessor, Remainderman, and Lender and their
directors, officers, shareholders, trustees, beneficial owners, partners,
members, and any directors, officers, shareholders, trustees, beneficial owners,
partners, members of any beneficial owners, partners or members of Lessor,
Remainderman or Lender, and all employees, agents, servants, representatives,
contractors, subcontractors, affiliates, subsidiaries, participants, successors
and assigns of any of the foregoing, including, but not limited to, any
successors by merger, consolidation or acquisition of all or a substantial
portion of the assets and business of Lessor, Remainderman or Lender, as
applicable.
"Lease Term" shall have the meaning described in Section 4.
"Lease Year" means the 12-month period commencing on the first day of the
calendar year or any other 12-month period as may be approved in writing by
Lessor after the commencement of the Lease Term and each successive 12-month
period thereafter.
"Lender" means GE Capital Franchise Finance Corporation, a Delaware
corporation, its successors and assigns, any successor lender in connection with
any loan secured by Lessor's interest in any of the Properties, and any servicer
of any loan secured by Lessor's interest in any of the Properties.
"Lessee Entities" means, collectively, Lessee, Guarantors and all
Affiliates of Lessee and/or any of the Guarantors.
"Lessor Entities" means, collectively, Double 9 Property I LLC, Double 9
Property II LLC, Double 9 Property III LLC, Double 9 Property IV LLC, 99
Remainder I LLC, 99 Remainder II LLC, 99 Remainder III LLC and 99 Remainder IV
LLC, each a Delaware limited liability company.
"Loan Agreement" means the Loan Agreement or Loan Agreements in effect
between Lessor and Lender with respect to the Properties, as such agreements may
be amended from time to time and any and all replacements or substitutions
thereof.
"Loan Documents" means, collectively, the Loan Agreement, the Notes, the
Mortgages and all other documents, instruments and agreements executed in
connection therewith or contemplated thereby, all as amended and supplemented
and any and all replacements or substitutions thereof.
"Loan Pool" means:
(i) in the context of a Securitization, any pool or group of loans
that are a part of such Securitization;
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(ii) in the context of a Transfer, all loans which are sold,
transferred or assigned to the same transferee; and
(iii) in the context of a Participation, all loans as to which
participating interests are granted to the same participant.
"Losses" means any and all claims, suits, liabilities (including, without
limitation, strict liabilities), actions, proceedings, obligations, debts,
damages, losses, costs, expenses, diminutions in value, fines, penalties,
charges, fees, expenses, judgments, awards, amounts paid in settlement and
damages of whatever kind or nature (including, without limitation, attorneys'
fees, court costs and other costs of defense).
"Maturity Date" means January 1, 2022.
"Memorandum" means the memorandum or notice of master lease between Lessor
and Lessee with respect to the Properties, as the same may be amended from time
to time. A duplicate original Memorandum will be executed and recorded in the
applicable real property records for each Property. Each Memorandum will contain
exhibits with the addresses and store identification numbers for all of the
Properties and the legal description for the applicable Property.
"Mortgages" means, collectively, the mortgages, deeds of trust or deeds to
secure debt, assignments of rents and leases, security agreements and fixture
filings executed by Lessor for the benefit of Lender with respect to the
Properties, as such instruments may be amended, restated and/or supplemented
from time to time and any and all replacements or substitutions thereof.
"Net Income" means, for any period, the consolidated net income (or loss)
of the Lessee Entities determined in accordance with GAAP, but excluding: (a)
the income of any Person (other than any of the Lessee Entities) in which any of
the Lessee Entities has an ownership interest, unless received by any of the
Lessee Entities in a cash distribution; (b) any after-tax gains or losses
attributable to an asset disposition; and (c) to the extent not included in
clauses (a) and (b) immediately above, any after-tax extraordinary, non-cash or
non-recurring gains or losses.
"Notes" means, collectively, the promissory notes executed by Lessor and
payable to Lender with respect to the Properties, as such notes may be amended,
restated and/or substituted from time to time.
"Other Agreements" means, collectively, all agreements and instruments now
or hereafter entered into between, among or by (1) any of the Lessee Entities,
and, or for the benefit of, (2) any of the Lessor Entities, including, without
limitation, the Related Leases; provided, however, the term Other Agreements
shall not include this Lease and the other Sale-Leaseback Documents.
"Participation" means the granting of any participations in any document
evidencing loan obligations or any or all servicing rights with respect thereto.
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"Permitted Facility" means a restaurant operated under the brand name
"Ninety Nine Restaurant and Pub".
"Permitted Sublessee" means 99 Boston, Inc., a Massachusetts corporation,
or 99 West, Inc., a Massachusetts corporation.
"Person" means any individual, corporation, partnership, limited liability
company, trust, unincorporated organization, Governmental Authority or any other
form of entity.
"Personalty" means all machinery, appliances, furniture, equipment, trade
fixtures and other personal property from time to time situated on or used in
connection with the Properties (including, without limitation, portable
stainless steel merchandise racks); provided, however, the term "Personalty"
shall not include the HVAC, walk-in coolers, walk-in freezers, supply fans,
exhaust fans, air ducts, hoods, vents, built-in sinks, built-in countertops,
plumbing and electrical fixtures, built-in merchandise shelving, sign poles and
lighting poles, all of which items are intended to be fixtures as such term is
used within the definition of "Properties".
"Prepayment Charges" means, for purposes of this Lease, an amount equal to
any prepayment premium or charge, yield maintenance payment, or other cost or
expense imposed on Lessor by the applicable Lender in connection with the
payment of the applicable Note(s) or promissory note(s) prior to the Maturity
Date.
"Primary Term" means the period commencing on the Effective Date and
expiring on January 31, 2022.
"Properties" means, collectively, the parcels of real estate described by
address, FFC Number and Unit Number in Exhibit A attached hereto, as the same
may be modified from time to time to reflect removed, added and substituted
Properties, and legally described in Exhibit A-1 attached hereto, as the same
may be modified from time to time to reflect removed, added and substituted
Properties, all rights, privileges and appurtenances associated therewith, and
all buildings, structures, fixtures and other improvements now or hereafter
located on such real estate (excluding Personalty).
"Property" means any one of the Properties.
"Purchase Price" means, with respect to any Property, the amount of the
purchase price corresponding to such Property as set forth on Exhibit A to the
Sale-Leaseback Agreement.
"Questionnaires" means the environmental questionnaires completed with
respect to each of the Properties and submitted to Environmental Insurer in
connection with the issuance of the Environmental Policies.
"Rejectable Offer" has the meaning set forth in Section 21.B.
"Rejectable Purchase Offer" has the meaning set forth in Section 58.A.
"Rejectable Substitution Offer" has the meaning set forth in Section 57.A.
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"Related Leases" means those leases between any of the Lessor Entities, as
lessor, and Lessee, as lessee, relating to the Related Properties.
"Related Properties" means any properties (other than the Properties)
which are the subject of a lease between any of the Lessor Entities, as lessor,
and Lessee, as lessee.
"Release" means any release, deposit, discharge, emission, leaking,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Materials.
"Remainderman" means 99 Remainder IV LLC, a Delaware limited liability
company, which owns a remainder interest in the parcels of real estate described
by address, Lessor Number and Unit Number in Exhibit A attached hereto and
legally described in Exhibit A-1 attached hereto and all rights, privileges and
appurtenances associated therewith, together with its successors and assigns.
"Remediation" means any response, remedial, removal, or corrective action,
any activity to cleanup, detoxify, decontaminate, contain or otherwise remediate
any Hazardous Materials, any actions to prevent, cure or mitigate any Release,
any action to comply with any Environmental Laws or with any permits issued
pursuant thereto, any inspection, investigation, study, monitoring, assessment,
audit, sampling and testing, laboratory or other analysis, or any evaluation
relating to any Hazardous Materials.
"Sale-Leaseback Agreement" means the Sale-Leaseback Agreement or
Sale-Leaseback Agreements among Lessor, Lessee, Xxxxxxx X. Xxx, Xx., Xxxx X. Xxx
and Xxxxxxx X. Xxx, Trustees of the Doe Family Trust II u/d/t dated September
16, 1992, and Xxxxxxx X. Xxx, Trustee of the Doe Family Trust u/d/t dated April
30, 1980 with respect to the Properties, as the same may be amended from time to
time.
"Sale-Leaseback Documents" means the Sale-Leaseback Agreement, this Lease,
the Memorandum, the Guaranty, the Acknowledgement and all other documents
executed in connection therewith or contemplated thereby, all as amended and
supplemented and any and all replacements or substitutions thereof.
"Securitization" means one or more sales, dispositions, transfers or
assignments by Lender or any Affiliate of Lender to a special purpose
corporation, trust or other entity identified by Lender or any Affiliate of
Lender of notes evidencing obligations to repay secured or unsecured loans owned
by Lender or any Affiliate of Lender (and, to the extent applicable, the
subsequent sale, transfer or assignment of such notes to another special purpose
corporation, trust or other entity identified by Lender or any Affiliate of
Lender), and the issuance of bonds, certificates, notes or other instruments
evidencing interests in pools of such loans, whether in connection with a
permanent asset securitization or a sale of loans in anticipation of a permanent
asset securitization. Each Securitization shall be undertaken in accordance with
all requirements which may be imposed by the investors or the rating agencies
involved in each such sale, disposition, transfer or assignment or which may be
imposed by applicable securities, tax or other laws or regulations.
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"Space Leases" means the existing leases affecting certain of the
Properties, which leases are identified on Schedule I to the Sale-Leaseback
Agreement.
"Space Lessees" means the tenants under the Space Leases.
"Subject Transfer" means a change in control of Lessee or any of the
Guarantors such that 50.1% of the ownership interests in Lessee or any of the
Guarantors becomes held, directly or indirectly, by Persons who do not hold
ownership interests in Lessee or any of the Guarantors as of the Effective Date.
"Substitute Property" means one or more parcels of real estate substituted
for any of the Properties in accordance with the requirements of Section 57,
together with all rights, privileges and appurtenances associated therewith, and
all buildings, structures, fixtures and other improvements located thereon. For
purposes of clarity, where two or more parcels of real property comprise a
Substitute Property, such parcels shall be aggregated and deemed to constitute
the Substitute Property for all purposes of this Lease.
"Threatened Release" means a substantial likelihood of a Release which
requires action to prevent or mitigate damage to the soil, surface waters,
groundwaters, land, stream sediments, surface or subsurface strata, ambient air
or any other environmental medium comprising or surrounding any of the
Properties which may result from such Release.
"Title Company" means Lawyers Title Insurance Corporation, or such other
nationally recognized title insurance company reasonably acceptable to Lessor.
"Transfer" means any sale, transfer or assignment of any document
evidencing loan obligations, or any or all servicing rights with respect
thereto.
2. DEMISE OF PROPERTIES. In consideration of the rentals and other sums to
be paid by Lessee and of the other terms, covenants and conditions on Lessee's
part to be kept and performed, Lessor hereby leases to Lessee, and Lessee hereby
takes and hires, the Properties. The Properties are leased to Lessee "AS IS" and
"WHERE IS" without representation or warranty by Lessor and subject to the
rights of parties in possession, to the existing state of title, any state of
facts which an accurate survey or physical inspection might reveal, and all
Applicable Regulations now or hereafter in effect. Lessee has examined each of
the Properties and title to each of the Properties and has found all of the same
satisfactory for all of Lessee's purposes.
3. CHARACTERIZATION OF LEASE. A. Lessor and Lessee intend that:
(i) this Lease constitutes a single master lease of all, but not
less than all, of the Properties and that Lessor and Lessee have executed
and delivered this Lease with the understanding that this Lease
constitutes a unitary, unseverable instrument pertaining to all, but not
less than all, of the Properties, and that neither this Lease nor the
duties, obligations or rights of Lessee may be allocated or otherwise
divided among the Properties by Lessee;
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(ii) this Lease is a "true lease" and not a financing lease, capital
lease, mortgage, equitable mortgage, deed of trust, trust agreement,
security agreement or other financing or trust arrangement, and the
economic realities of this Lease are those of a true lease; and
(iii) the business relationship created by this Lease and any
related documents is solely that of a long-term commercial lease between
landlord and tenant and has been entered into by both parties in reliance
upon the economic and legal bargains contained herein.
X. Xxxxxx and Lessee acknowledge and agree that the Lease Term, including
any term extensions provided for in this Lease, is less than the remaining
economic life of each of the Properties.
C. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a true lease and irrevocably waives any claim
or defense which asserts that this Lease is anything other than a true lease.
Lessee covenants and agrees that it will not assert that this Lease is anything
but a true lease. Lessee stipulates and agrees not to challenge the validity,
enforceability or characterization of the lease of the Properties as a true
lease and further stipulates and agrees that nothing contained in this Lease
creates or is intended to create a joint venture, partnership (either de jure or
de facto), equitable mortgage, trust, financing device or arrangement, security
interest or the like. Lessee shall support the intent of the parties that the
lease of the Properties pursuant to this Lease is a true lease and does not
create a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the like,
if, and to the extent that, any challenge occurs.
D. Lessee waives any claim or defense based upon the characterization of
this Lease as anything other than a master lease of all of the Properties and
irrevocably waives any claim or defense which asserts that this Lease is
anything other than a master lease. Lessee covenants and agrees that it will not
assert that this Lease is anything but a unitary, unseverable instrument
pertaining to the lease of all, but not less than all, of the Properties. Lessee
stipulates and agrees not to challenge the validity, enforceability or
characterization of the lease of the Properties as a unitary, unseverable
instrument pertaining to the lease of all, but not less than all, of the
Properties. Lessee shall support the intent of the parties that this Lease is a
unitary, unseverable instrument pertaining to the lease of all, but not less
than all, of the Properties, if, and to the extent that, any challenge occurs.
E. Lessee and Lessor each stipulate that (i) the Base Annual Rental is the
fair market value for the use of the Properties and was agreed to by Lessor and
Lessee on that basis, and (ii) the execution, delivery and performance by Lessee
of this Lease does not constitute a transfer of all or any part of the
Properties, except with respect to the creation of the leasehold estate and
other rights hereunder.
F. The expressions of intent, the waivers, the representations and
warranties, the covenants, the agreements and the stipulations set forth in this
Section are a material inducement to Lessor entering into this Lease.
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4. LEASE TERM. The Lease Term shall commence as of the Effective Date and
shall expire on January 31, 2022, unless terminated sooner as provided in this
Lease and as may be extended for five additional successive periods of five
years each as set forth in Section 27 below. The time period during which this
Lease shall actually be in effect is referred to herein as the "Lease Term."
5. RENTAL AND OTHER PAYMENTS. A. If the Effective Date is a date other
than the first day of the month, Lessee shall pay Lessor on the Effective Date
the Base Monthly Rental prorated on the basis of the ratio that the number of
days from the Effective Date through the last day in the month containing the
Effective Date bears to the number of days in such month. Thereafter, on or
before the first day of each succeeding calendar month, Lessee shall pay Lessor
in advance the Base Monthly Rental.
B. Commencing on the first Adjustment Date and on each Adjustment Date
thereafter, the Base Annual Rental shall increase by an amount equal to the
product of the then-current Base Annual Rental multiplied by 1.00%. The
increased Base Annual Rental shall constitute the Base Annual Rental due and
payable until the next Adjustment Date.
C. All sums of money required to be paid by Lessee under this Lease which
are not specifically referred to as rent shall be considered additional rent
("Additional Rental") although not specifically designated as such. Lessor shall
have the same remedies for nonpayment of Additional Rental as those provided
herein for the nonpayment of Base Annual Rental.
D. (i) Lessor hereby agrees that, to the extent that the Aggregate Assumed
Base Annual Rental exceeds the CPI-Adjusted Rent, Lessor shall be required to
pay Lessee the Aggregate Rent Refund in accordance with the provisions of this
Section 5.D. In no event shall Base Annual Rental be deemed reduced as of any
Adjustment Date from the Base Annual Rental which would have been payable during
the year immediately preceding such Adjustment Date. In addition, if the
Aggregate Assumed Base Annual Rental is less than or equal to the aggregate
CPI-Adjusted Rent, then no additional amounts shall be payable by Lessee to
Lessor and the payments of Base Annual Rental otherwise contemplated by this
Lease for the Primary Term shall become the final amounts payable as Base Annual
Rental for the Primary Term. Anything contained herein to the contrary
notwithstanding, in no event shall Lessor be required to pay the Aggregate Rent
Refund in the event of any termination of this Lease resulting from the
occurrence of an Event of Default or a rejection of this Lease in a bankruptcy
case involving Lessee.
(ii) Within thirty (30) days after the end of the Primary Term (other than
a termination resulting from the occurrence of an Event of Default or a
rejection of this Lease in a bankruptcy case involving Lessee), Lessor shall (x)
provide Lessee with a statement setting forth Lessor's calculation of the amount
of the Aggregate Rent Refund and each CPI Increase used in calculating the
Aggregate Rent Refund and (y) pay the Aggregate Rent Refund to Lessee; provided,
however, the obligation of Lessor to pay the Aggregate Rent Refund to Lessee
shall not excuse or reduce Lessee's obligation to pay any Base Annual Rental or
Additional Rental payable in respect of the Primary Term or, except as provided
in subsection (iii) below, the Extended Term, or any payment due in respect of
any termination of this Lease or as a result of the rejection of this Lease in a
bankruptcy case involving Lessee, or any other amount (including, without
limitation, indemnification payments or damages) payable hereunder during
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or with respect to the Primary Term or the Extended Term, and Lessee shall not
have any right to set-off the Aggregate Rent Refund or any part thereof against
its obligation to pay any such Base Annual Rental, Additional Rental, any
payment due in respect of any termination of this Lease or as a result of the
rejection of this Lease in a bankruptcy case involving Lessee, or any such other
amount, except as provided in subsection (iii) below. If this Lease is
terminated as a result of an Event of Default or if this Lease is rejected in a
bankruptcy case involving Lessee, or if an Event of Default shall have occurred
and be continuing at the expiration of the Primary Term, Lessor may, but shall
not be required to, in exercising its rights hereunder, use, apply or retain the
whole or any part of the Aggregate Rent Refund for the payment of any rent or
other sum (including damages) to which Lessor may be entitled by reason of such
Event of Default or rejection.
(iii) In the event Lessee exercises its option to extend this Lease as set
forth in Section 27 below, Lessor may elect to apply the Aggregate Rent Refund,
if any, as a credit against the Base Annual Rental first accruing for the
Extended Term, until the balance of the Aggregate Rent Refund shall be reduced
to zero. Lessor shall evidence its election by giving notice thereof to Lessee
no later than the due date of the first installment of rent due in the first
Extended Term; provided, however, if Lessor fails to deliver such notice, Lessor
shall be deemed to have elected to so credit the Aggregate Rent Refund.
(iv) Notwithstanding anything contained herein to the contrary, the
obligation created by this Section 5.D shall be subordinate in all respects to
the loans secured by the Mortgages. Without limiting the generality of the
preceding sentence, in the event that Lender succeeds to the interest of Lessor
in this Lease whether by a foreclosure of the Mortgages or the delivery to
Lender of deeds-in-lieu of foreclosure, the preceding subsections of this
Section 5.D shall be of no force or effect, Lender shall have no obligation to
pay Lessee the Aggregate Rent Refund, and Lessee shall have no right to receive
a credit for the Aggregate Rent Refund against the Base Annual Rental due for
the Extended Term.
6. REPRESENTATIONS AND WARRANTIES OF LESSOR. The representations and
warranties of Lessor contained in this Section are being made to induce Lessee
to enter into this Lease and Lessee has relied and will continue to rely upon
such representations and warranties. Lessor represents and warrants to Lessee as
of the Effective Date as follows:
A. Organization, Authority and Status of Lessor. (i) Lessor has been
duly organized and is validly existing and in good standing under the laws
of the State of Delaware. All necessary limited liability company action
has been taken to authorize the execution, delivery and performance by
Lessor of this Lease and the other documents, instruments and agreements
provided for herein.
(ii) The person who has executed this Lease on behalf of Lessor is
duly authorized to do so.
B. Enforceability. This Lease constitutes the legal, valid and
binding obligation of Lessor, enforceable against Lessor in accordance
with its terms.
7. REPRESENTATIONS AND WARRANTIES OF LESSEE. The representations and
warranties of Lessee contained in this Section are being made to induce Lessor
to enter into this Lease and
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Lessor has relied, and will continue to rely, upon such representations and
warranties. Lessee represents and warrants to Lessor as of the Effective Date as
follows:
A. Organization, Authority and Status of Lessee. (i) Lessee has been
duly organized, is validly existing and in good standing under the laws of
the State of Massachusetts and is qualified to do business in any
jurisdiction where such qualification is required. All necessary limited
liability company action has been taken to authorize the execution,
delivery and performance by Lessee of this Lease and of the other
documents, instruments and agreements provided for herein. Lessee is not a
"foreign corporation", "foreign partnership", "foreign trust", "foreign
limited liability company" or "foreign estate", as those terms are defined
in the Internal Revenue Code and the regulations promulgated thereunder.
Lessee's United States tax identification number is correctly set forth on
the signature page of this Lease.
(ii) The person who has executed this Lease on behalf of Lessee is
duly authorized to do so.
B. Enforceability. This Lease constitutes the legal, valid and
binding obligation of Lessee, enforceable against Lessee in accordance
with its terms.
C. Litigation. There are no suits, actions, proceedings or
investigations pending, or, to the best of Lessee's knowledge after
reasonable inquiry, threatened against or involving Lessee, any Guarantor
or any of the Properties before any arbitrator or Governmental Authority
which might reasonably result in any material adverse change in the
contemplated business, condition, worth or operations of Lessee, any
Guarantor or any of the Properties.
D. Absence of Breaches or Defaults. To the best of Lessee's
knowledge after reasonable inquiry, neither Lessee nor any Guarantor is in
default under any document, instrument or agreement to which Lessee or any
Guarantor is a party or by which Lessee, any Guarantor, any of the
Properties or any of Lessee's or any Guarantor's property is subject or
bound. To the best of Lessee's knowledge after reasonable inquiry, the
authorization, execution, delivery and performance of this Lease and the
documents, instruments and agreements provided for herein will not result
in any breach of, or default under, any document, instrument or agreement
to which Lessee or any Guarantor is a party or by which Lessee, any
Guarantor, any of the Properties or any of Lessee's or any Guarantor's
property is subject or bound. The authorization, execution, delivery and
performance of this Lease and the documents, instruments and agreements
provided for herein will not violate any applicable law, statute,
regulation, rule, ordinance, code, rule or order.
E. Liabilities of Lessor. Lessee is not liable for any indebtedness
for money borrowed by Lessor and has not guaranteed any of the debts or
obligations of Lessor.
8. COVENANTS. Lessee covenants to Lessor for so long as this Lease is in
effect as follows:
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A. Aggregate Fixed Charge Coverage Ratio. Lessee shall maintain or
cause to be maintained an Aggregate Fixed Charge Coverage Ratio calculated
for all of the Properties of at least 1.50:1, determined as of the last
day of each fiscal year of Lessee. For purposes of this Lease, the term
"Aggregate Fixed Charge Coverage Ratio" shall mean with respect to the
twelve month period of time immediately preceding the date of
determination, the ratio calculated for such period of time, each as
determined in accordance with GAAP, of (a) the sum of FCCR Income,
Depreciation and Amortization, Interest Expense and Operating Lease
Expense, less a corporate overhead allocation in an amount equal to 5.00%
of Gross Sales, to (b) the sum of the Operating Lease Expense and the
Equipment Payment Amount.
For purposes of this Section 8.A, the following terms shall be defined as
set forth below:
"Capital Lease" shall mean any lease of any property (whether real,
personal or mixed) by Lessee or any Permitted Sublessee with respect to
one or more of the Properties which lease would, in conformity with GAAP,
be required to be accounted for as a capital lease on the balance sheet of
Lessee or any Permitted Sublessee. The term "Capital Lease" shall not
include any operating lease or this Lease.
"Debt" shall mean as directly related to all of the Properties and
the period of determination (i) indebtedness of Lessee or any Permitted
Sublessee for borrowed money, (ii) obligations of Lessee or any Permitted
Sublessee evidenced by bonds, indentures, notes or similar instruments,
(iii) obligations of Lessee or any Permitted Sublessee to pay the deferred
purchase price of property or services, (iv) obligations of Lessee or any
Permitted Sublessee under leases which should be, in accordance with GAAP,
recorded as Capital Leases, and (v) obligations of Lessee or any Permitted
Sublessee under direct or indirect guarantees in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (iv)
above. The term "Debt" shall not include (x) Lessor's debt with respect to
the Properties or otherwise or (y) any corporate debt of Lessee or any
Permitted Sublessee which is not secured by any of the Properties or any
Personalty.
"Depreciation and Amortization" shall mean with respect to all of
the Properties the depreciation and amortization accruing during any
period of determination with respect to Lessee or any Permitted Sublessee
as determined in accordance with GAAP. The term "Depreciation and
Amortization" shall not include Lessor's depreciation and amortization
with respect to the Properties or otherwise.
"Equipment Payment Amount" shall mean for any period of
determination the greater of:
(i) $54,000 multiplied by the number of Properties, and
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(ii) the sum of all amounts payable during such period of
determination under all (x) leases entered into by Lessee or
any Permitted Sublessee for equipment located at one or more
of the Properties (other than leases for which amounts
required to be paid would constitute an Operating Lease
Expense) and (y) all loans made to Lessee or any Permitted
Sublessee secured by Lessee's or any Permitted Sublessee's
interest in the equipment located at one or more of the
Properties.
"FCCR Income" shall mean with respect to the period of
determination, the aggregate net income or net loss arising from all
business operated at the Properties by Lessee or any Permitted
Sublessee, as applicable. In determining the amount of FCCR Income,
(i) adjustments shall be made for nonrecurring gains and losses
allocable to the period of determination, (ii) deductions shall be
made for, among other things, Depreciation and Amortization,
Interest Expense and Operating Lease Expense allocable to the period
of determination, and (iii) no deductions shall be made for (x)
income taxes or charges equivalent to income taxes allocable to the
period of determination, as determined in accordance with GAAP, or
(y) corporate overhead expense allocable to the period of
determination.
"Gross Sales" means the aggregate sales or other income
arising from all business operated at the Properties by Lessee or
any Permitted Sublessee, as applicable, during the period of
determination, less sales tax paid by Lessee or any Permitted
Sublessee, as applicable, in connection with the business conducted
at each of the Properties during such period.
"Interest Expense" shall mean for any period of determination,
the sum of all interest accrued or which should be accrued in
respect of all Debt of Lessee or any Permitted Sublessee allocable
to one or more of the Properties and all business operations thereon
during such period (including interest attributable to Capital
Leases), as determined in accordance with GAAP.
"Operating Lease Expense" shall mean the expenses incurred by
Lessee or any Permitted Sublessee under any operating leases with
respect to one or more of the Properties and the business operations
thereon (including this Lease, but excluding any permitted subleases
and any leases for which amounts required to be paid would
constitute an Equipment Payment Amount) during the period of
determination, as determined in accordance with GAAP.
B. Nonconsolidation Covenants. (i) Lessee will not assume liability
for any indebtedness for money borrowed by Lessor and does not, and will
not, guarantee any of the debts or obligations of Lessor. Lessee will not
hold itself out as being liable for any obligations or indebtedness of
Lessor.
(ii) Lessee shall not, and shall use its best efforts to cause its
Affiliates not to, hold Lessor out to the public or to any individual
creditors as being a unified entity with assets and liabilities in common
with Lessee.
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(iii) Lessee shall conduct its business so as not to mislead others
as to the separate identity of Lessor, and particularly will avoid the
appearance of conducting business on behalf of Lessor. Without limiting
the generality of the foregoing, no oral and written communications of
Lessee, including, without limitation, letters, invoices, purchase orders,
contracts, statements and loan applications, will be made in the name of
Lessor which to the extent that to do otherwise would materially bear upon
the maintenance of Lessor's separate identity.
(iv) Lessee will not act in Lessor's name.
(v) Where necessary and appropriate, Lessee shall disclose the
independent business status of Lessor to creditors of Lessee, if any.
(vi) The resolutions, agreements and other instruments of Lessee, if
any, underlying the transactions described in this Lease will be
maintained by Lessee.
(vii) All transactions between Lessee and Lessor will be no less
fair to each party than they could obtain on an arm's-length basis.
(viii) The books, records and accounts of Lessee shall at all times
be maintained in a manner permitting the assets and liabilities of Lessor
to be easily separated and readily ascertained from those of Lessee.
(ix) Lessee will not direct, or otherwise control, the ongoing
business decisions of Lessor.
(x) Lessee will not file or cause to be filed a voluntary or
involuntary petition in bankruptcy on behalf of or against Lessor.
C. Transfer, Participation and Securitization Covenants. (i) Lessee
agrees to cooperate in good faith with Lessor and Lender in connection
with any Transfer, Participation and/or Securitization of any of the
Notes, Mortgages and/or any of the Loan Documents, or any or all servicing
rights with respect thereto, including, without limitation, (x) providing
such documents, financial and other data, and other information and
materials (the "Disclosures") which would typically be required with
respect to Lessee or Guarantors by a purchaser, transferee, assignee,
servicer, participant, investor or rating agency involved with respect to
such Transfer, Participation and/or Securitization, as applicable;
provided, however, Lessee and Guarantors shall not be required to make
Disclosures of any confidential information or any information which has
not previously been made public unless required by applicable federal or
state securities laws; and (y) amending the terms of this Lease to the
extent necessary so as to satisfy the requirements of purchasers,
transferees, assignees, servicers, participants, investors or selected
rating agencies involved in any such Transfer, Participation or
Securitization, so long as such amendments would not have a material
adverse effect upon Lessee, Guarantors or the transactions contemplated by
this Lease.
(ii) Lessee consents to Lessor and Lender providing the Disclosures,
as well as any other information which Lessor and Lender may now have or
hereafter acquire with
16
respect to the Properties or the financial condition of Lessee or
Guarantors to each purchaser, transferee, assignee, servicer, participant,
investor or rating agency involved with respect to such Transfer,
Participation and/or Securitization, as applicable. Lessee shall pay its
own attorney fees and other out-of-pocket expenses incurred in connection
with the performance of its obligations under this Section 8.C.
D. Compliance Certificate. Within 120 days after the end of each
fiscal year of Lessee, Lessee shall deliver to Lessor such compliance
certificates as Lessor may reasonably require in order to establish that
Lessee is in compliance in all material respects with all of the
obligations, duties and covenants imposed on Lessee pursuant to this
Lease.
9. RENTALS TO BE NET TO LESSOR. The Base Annual Rental payable hereunder
shall be net to Lessor, so that this Lease shall yield to Lessor the rentals
specified during the Lease Term, and that all costs, expenses and obligations of
every kind and nature whatsoever relating to the Properties shall be performed
and paid by Lessee.
10. TAXES AND ASSESSMENTS. Lessee shall pay, prior to the earlier of
delinquency or the accrual of interest on the unpaid balance, all taxes and
assessments of every type or nature assessed against, imposed upon or arising
with respect to Lessee, Lessor, any of the Properties, this Lease, the rental or
other payments due under this Lease during the Lease Term which affect in any
manner the net return realized by Lessor under this Lease, including, without
limitation, the following:
A. All taxes and assessments upon any of the Properties or any
part thereof and upon any Personalty, whether belonging to Lessor or
Lessee, or any tax or charge levied in lieu of such taxes and
assessments;
B. All taxes, charges, license fees and or similar fees
imposed by reason of the use of any of the Properties by Lessee; and
C. All excise, transaction, privilege, license, sales, use and
other taxes upon the rental or other payments due under this Lease,
the leasehold estate of either party or the activities of either
party pursuant to this Lease.
Notwithstanding the foregoing, but without limiting the preceding
obligation of Lessee to pay all taxes which are imposed on the rental or other
payments due under this Lease, in no event will Lessee be required to pay any
net income taxes (i.e., taxes which are determined taking into account
deductions for depreciation, interest, taxes and ordinary and necessary business
expenses) or franchise taxes of Lessor (unless imposed in lieu of other taxes
that would otherwise be the obligation of Lessee under this Lease, including,
without limitation, any "gross receipts tax" or any similar tax based upon gross
income or receipts of Lessor with respect to this Lease which does not take into
account deductions from depreciation, interest, taxes and/or ordinary or
necessary business expenses), any transfer taxes of Lessor, or any tax imposed
with respect to the sale, exchange or other disposition by Lessor, in whole or
in part, of any of the Properties or Lessor's interest in this Lease (other than
transfer or recordation taxes imposed in connection with the transfer of any of
the Properties to Lessee, the substitution of a Substitute Property or the
termination of this Lease pursuant to the provisions of this Lease; provided,
however, that Lessor shall be obligated to pay
17
any transfer or recordation taxes imposed in connection with the transfer of the
Properties to Lessee pursuant to Section 31 unless the ROFO Notice contemplates
otherwise).
All taxing authorities shall be instructed to send all tax and assessment
invoices to Lessee and Lessee shall promptly provide Lessor and Lender with
copies of all tax and assessment invoices received by Lessee. Upon request,
Lessee shall also provide Lessor and Lender with evidence that such invoices
were paid in a timely fashion. Lessee may, at its own expense, contest or cause
to be contested (in the case of any item involving more than $1,000.00, after
prior written notice to Lessor), by appropriate legal proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any item specified in this Section or lien therefor,
provided that (i) the collection thereof from the applicable Properties or any
interest therein shall have been suspended, (ii) neither such Properties nor any
interest therein would be in any danger of being sold, forfeited or lost by
reason of such proceedings, (iii) no Event of Default has occurred and is
continuing, and (iv) Lessee shall have deposited with Lessor adequate reserves
for the payment of the taxes, together with all interest and penalties thereon,
unless paid in full under protest, or Lessee shall have furnished the security
as may be required in the proceeding or as may be required by Lessor to ensure
payment of any contested taxes.
11. UTILITIES. Lessee shall contract, in its own name, for, and pay when
due, all charges for the connection and use of water, gas, electricity,
telephone, garbage collection, sewer use and other utility services supplied to
the Properties during the Lease Term. Under no circumstances shall Lessor be
responsible for any interruption of any utility service.
12. INSURANCE. Throughout the Lease Term, Lessee shall maintain with
respect to each of the Properties, at its sole expense, the following types and
amounts of insurance (which may be included under a blanket insurance policy if
all the other terms hereof are satisfied):
A. Insurance against loss, damage or destruction by fire and other
casualty, including theft, vandalism and malicious mischief, flood (for
each of the Properties which is in a location designated by the Federal
Emergency Management Administration as a Special Flood Hazard Area),
earthquake (for each of the Properties which is in an area subject to
destructive earthquakes within recorded history), boiler explosion (for
each of the Properties with a boiler), plate glass breakage, sprinkler
damage (for each of the Properties which has a sprinkler system), all
matters covered by a standard extended coverage endorsement, all matters
covered by a special coverage endorsement commonly known as an "all-risk"
endorsement and such other risks as Lessor may reasonably require,
insuring each of the Properties for not less than 100% of their full
insurable replacement cost.
B. Commercial general liability and property damage insurance,
including a products liability clause, covering Lessor, Remainderman and
Lessee against bodily injury liability, property damage liability and
automobile bodily injury and property damage liability, including without
limitation any liability arising out of the ownership, maintenance,
repair, condition or operation of the Properties or adjoining ways,
streets or sidewalks and, if applicable, insurance covering Lessor,
Remainderman and Lessee against liability arising from the sale of liquor,
beer or wine on the Properties. Such insurance policy or policies shall
contain a broad form contractual liability endorsement under which the
insurer agrees to insure Lessee's obligations under Section 19 hereof to
the extent insurable, and a
18
"severability of interest" clause or endorsement which precludes the
insurer from denying the claim of Lessee, Remainderman or Lessor because
of the negligence or other acts of the other, shall be in amounts of not
less than $1,000,000.00 per injury and occurrence with respect to any
insured liability, whether for personal injury or property damage, or such
higher limits as Lessor or Remainderman may reasonably require from time
to time, and shall be of form and substance satisfactory to Lessor and
Remainderman.
C. Business income insurance or rental interruption insurance, as
requested by Lessor, equal to 100% of the Base Annual Rental for a period
of not less than 12 months.
D. State Worker's compensation insurance in the statutorily mandated
limits, employer's liability insurance with limits not less than $500,000
or such greater amount as Lessor or Remainderman may from time to time
require and such other insurance as may be necessary to comply with
applicable laws.
E. Such other insurance as may from time to time be reasonably
required by Lessor, Remainderman or Lender in order to protect their
respective interests with respect to the Properties.
All insurance policies shall:
(i) Provide for a waiver of subrogation by the insurer as to
claims against Lessor, Remainderman, Lender and their respective
employees and agents;
(ii) Provide that any "no other insurance" clause in the
insurance policy shall exclude any policies of insurance maintained
by Lessor, Remainderman or Lender and that the insurance policy
shall not be brought into contribution with insurance maintained by
Lessor, Remainderman or Lender;
(iii) Contain a standard without contribution mortgage clause
endorsement in favor of Lender and any other party designated by
Lessor;
(iv) Provide that the policy of insurance shall not be
terminated, cancelled or substantially modified without at least
thirty (30) days' prior written notice to Lessor, Remainderman,
Lender and to any other party covered by any standard mortgage
clause endorsement;
(v) Provide that the insurer shall not have the option to
restore the applicable Properties if Lessor or Lessee elects to
terminate this Lease in accordance with the terms hereof;
(vi) Be issued by insurance companies licensed to do business
in the states in which the Properties are located and which are
rated A:VI or better by A.M. Best's Insurance Guide or are otherwise
approved by Lessor and Remainderman, which approval shall not be
unreasonably withheld or delayed; and
(vii) Provide that the insurer shall not deny a claim nor
shall the insurance be cancelled, invalidated or suspended by (1)
any action, inaction,
19
conduct or negligence of Lessor, Remainderman, Lender or any other
party covered by any standard mortgage clause endorsement, Lessee,
anyone acting for Lessee or any subtenant or other occupant of any
of the Properties, (2) occupancy or use of any of the Properties for
purposes more hazardous than permitted by such policies, (3) any
foreclosure or other proceedings relating to any of the Properties
or change in title to or ownership of any of the Properties, or (4)
any breach or violation by Lessee or any other person of any
warranties, declarations or conditions contained in such policies or
the applications for such policies.
It is expressly understood and agreed that the foregoing minimum limits of
insurance coverage shall not limit the liability of Lessee for its acts or
omissions as provided in this Lease. All insurance policies (with the exception
of worker's compensation insurance to the extent not available under statutory
law), shall designate Lessor, Remainderman and Lender as additional named
insureds as their interests may appear and shall be payable as set forth in
Section 21 hereof. All such policies shall be written as primary policies, with
deductibles not to exceed 10% of the amount of coverage. Any other policies,
including any policy now or hereafter carried by Lessor, Remainderman or Lender,
shall serve as excess coverage. Lessee shall procure policies for all insurance
for periods of not less than one year and shall provide to Lessor, Remainderman
and Lender certificates of insurance or, upon the request of Lessor,
Remainderman or Lender, duplicate originals of insurance policies evidencing
that insurance satisfying the requirements of this Lease is in effect at all
times. In the event of any transfer by Lessor of Lessor's interest in the
Properties or any financing or refinancing of Lessor's interest in the
Properties, or by Remainderman of Remainderman's interest in the Properties,
Lessee shall, upon not less than ten (10) days' prior written notice, deliver to
Lessor and Remainderman or any Lender providing such financing or refinancing,
as the case may be, certificates of all insurance required to be maintained by
Lessee hereunder naming such transferee or such Lender, as the case may be, as
an additional named insured to the extent required herein effective as of the
date of such transfer, financing or refinancing.
13. TAX AND INSURANCE IMPOUND. Upon the occurrence of an Event of Default
which is not cured within five days after Lessor shall have given Lessee notice
of the occurrence of such Event of Default, Lessor may require Lessee to pay to
Lessor sums which will provide an impound account (which shall not be deemed a
trust fund) for paying up to the next one year of taxes, assessments and/or
insurance premiums for each of the Properties. Upon such requirement, Lessor
will estimate the amounts needed for such purposes and will notify Lessee to pay
the same to Lessor in equal monthly installments, as nearly as practicable, in
addition to all other sums due under this Lease. Should additional funds be
required at any time, Lessee shall pay the same to Lessor on demand. Lessee
shall advise Lessor of all taxes and insurance bills which are due and shall
cooperate fully with Lessor in assuring that the same are paid timely. Lessor
may deposit all impounded funds in accounts insured by any federal or state
agency and may commingle such funds with other funds and accounts of Lessor.
Interest or other gains from such funds, if any, shall be added to the impounded
funds. In the event of any default by Lessee, Lessor may apply all impounded
funds (including any interest) against any sums due from Lessee to Lessor. Any
collected impound funds which are not applied pursuant to the previous sentence
against any sums due from Lessee to Lessor shall be used to pay the
20
taxes and insurance premiums for which they were collected. Lessor shall give to
Lessee an annual accounting showing all credits and debits to and from such
impounded funds received from Lessee.
14. PAYMENT OF RENTAL AND OTHER SUMS. All rental and other sums which
Lessee is required to pay hereunder shall be the unconditional obligation of
Lessee and shall be payable in full when due without any setoff, abatement,
deferment, deduction or counterclaim whatsoever. Upon execution of this Lease,
Lessee shall establish arrangements whereby payments of the Base Monthly Rental
and impound payments, if any, are transferred by Automated Clearing House Debit
directly from Lessee's bank account to such account as Lessor may designate. Any
delinquent payment (that is, any payment not made within five calendar days
after the date when due) shall, in addition to any other remedy of Lessor, incur
a late charge of 5% (which late charge is intended to compensate Lessor for the
cost of handling and processing such delinquent payment and should not be
considered interest) and bear interest at the Default Rate, such interest to be
computed from and including the date such payment was due through and including
the date of the payment; provided, however, in no event shall Lessee be
obligated to pay a sum of late charge and interest higher than the maximum legal
rate then in effect.
15. USE. Except as set forth below, each of the Properties shall be used
solely for the operation of a Permitted Facility in accordance with the
standards of operations then in effect on a system-wide basis, and for no other
purpose. Lessee shall occupy the Properties promptly following the Effective
Date and, except as set forth below and except during periods when any of the
Properties is untenantable by reason of fire or other casualty or condemnation
(provided, however, during all such periods while any of the Properties is
untenantable, Lessee shall strictly comply with the terms and conditions of
Section 21 of this Lease), Lessee shall at all times during the Lease Term
occupy each of the Properties and shall diligently conduct its business on each
of the Properties as a Permitted Facility. In connection with any alterations to
be performed by Lessee at any Property pursuant to this Lease, Lessee may cease
diligent operation of business at such Property for a period not to exceed 180
days and may do so only once with respect to such Property within any five-year
period during the Lease Term. As long as no Event of Default has occurred and is
continuing, Lessee may also cease diligent operations of business at any
Property for reasons other than as contemplated by the preceding sentence,
provided that (i) no Property may be closed pursuant to this sentence for more
than 30 days from the date of closure, and (ii) no more than one Property may be
closed at any one time pursuant to this sentence. If Lessee does discontinue
operation as permitted by this Section, Lessee shall (i) give written notice to
Lessor within 10 days after Lessee elects to cease operation, (ii) provide
adequate protection and maintenance of any such Properties during any period of
vacancy, (iii) comply with all Applicable Regulations and otherwise comply with
the terms and conditions of this Lease other than the continuous use covenant
set forth in this Section, and (iv) pay all costs necessary to restore such
Properties to their condition on the day operation of the business ceased at
such time as such Properties are reopened for Lessee's business operations or
other substituted use approved by Lessor as contemplated below. Notwithstanding
anything herein to the contrary, Lessee shall pay the Base Monthly Rental on the
first day of each month during any period in which Lessee discontinues
operation.
Lessee shall not, by itself or through any assignment, sublease or
other type of transfer, convert any of the Properties to a use other than a
Permitted Facility during the Lease Term
21
without Lessor's consent, which consent shall not be unreasonably withheld or
delayed. Lessor may consider any or all of the following in determining whether
to grant its consent, without being deemed to be unreasonable: (i) whether the
rental paid to Lessor would be equal to or greater than the anticipated rental
assuming continued existing use, (ii) whether the proposed rental to be paid to
Lessor is reasonable considering the converted use of the Properties and the
customary rental prevailing in the community for such use, (iii) whether the
converted use will be consistent with the highest and best use of the
Properties, and (iv) whether the converted use will increase Lessor's risks or
decrease the value of the Properties.
16. COMPLIANCE WITH LAWS, RESTRICTIONS, COVENANTS AND ENCUMBRANCES. A.
Lessee's use and occupation of each of the Properties, and the condition
thereof, shall, at Lessee's sole cost and expense, comply in all material
respects with all Applicable Regulations and all restrictions, covenants and
encumbrances of record with respect to each of the Properties. In addition to
the other requirements of this Section, Lessee shall, at all times throughout
the Lease Term, comply in all material respects with all Applicable Regulations,
including, without limitation, in connection with any maintenance, repairs and
replacements of the Properties undertaken by Lessee as required by Section 17 of
this Lease.
B. Lessee will not permit any act or condition to exist on or about any of
the Properties which will increase any insurance rate thereon, except when such
acts are required in the normal course of its business and Lessee shall pay for
such increase.
C. Without limiting the generality of the other provisions of this
Section, Lessee agrees that it shall be responsible for complying in all
respects with the Americans with Disabilities Act of 1990, as such act may be
amended from time to time, and all regulations promulgated thereunder
(collectively, the "ADA"), as it affects the Properties, including, but not
limited to, making required "readily achievable" changes to remove any
architectural or communications barriers, and providing auxiliary aides and
services within the Properties. Lessee further agrees that any and all
alterations made to the Properties during the Lease Term will comply with any
applicable requirements of the ADA. All plans for alterations which must be
submitted to Lessor under the provisions of Section 18 must include a statement
from a licensed architect or engineer certifying that they have reviewed the
plans, and that the plans comply with all applicable provisions of the ADA. Any
subsequent approval or consent to the plans by Lessor shall not be deemed to be
a representation on Lessor's part that the plans comply with the ADA, which
obligation shall remain with Lessee. Lessee agrees that it will defend,
indemnify and hold harmless the Indemnified Parties from and against any and all
Losses caused by, incurred or resulting from Lessee's failure to comply with its
obligations under this Section.
D. Lessee represents and warrants to Lessor as follows:
(i) To Lessee's Actual Knowledge and except as disclosed in the
Questionnaires, none of the Properties nor Lessee are in violation of, or
subject to, any pending or threatened investigation or inquiry by any
Governmental Authority or to any remedial obligations under any
Environmental Laws, and this representation and warranty would continue to
be true and correct following disclosure to the applicable Governmental
Authorities of all relevant facts, conditions and circumstances, if any,
actually known to Lessee pertaining to the Properties.
22
(ii) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires, all permits, licenses or similar authorizations to
construct, occupy, operate or use any buildings, improvements, fixtures
and equipment forming a part of any of the Properties by reason of any
Environmental Laws have been obtained.
(iii) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires, no Hazardous Materials have been used, handled,
manufactured, generated, produced, stored, treated, processed,
transferred, disposed of or otherwise Released in, on, under, from or
about any of the Properties, other than in De Minimis Amounts.
(iv) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires, the Properties do not contain Hazardous Materials,
other than in De Minimis Amounts, or underground storage tanks.
(v) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires, there is no threat of any Release migrating to any
of the Properties.
(vi) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires, there is no past or present non-compliance with
Environmental Laws, or with permits issued pursuant thereto, in
connection with any of the Properties.
(vii) Lessee has not received any written notice from any
person or entity (including but not limited to a Governmental
Authority) relating to Hazardous Materials or Remediation thereof, of
possible liability of any person or entity pursuant to any
Environmental Law, other environmental conditions in connection with
any of the Properties, or any actual or potential administrative or
judicial proceedings in connection with any of the foregoing.
(viii) Lessee has truthfully and fully provided to Lessor, in
writing, any and all information relating to environmental conditions
in, on, under or from the Properties of which Lessee has Actual
Knowledge and that, to Lessee's Actual Knowledge, is contained in
Lessee's files and records, including but not limited to any reports
relating to Hazardous Materials in, on, under or from any of the
Properties.
(ix) To Lessee's Actual Knowledge and except as disclosed in
the Questionnaires: (1) all uses and operations on or of the
Properties, whether by Lessee or any other person or entity, have been
in compliance with all Environmental Laws and permits issued pursuant
thereto; (2) there have been no Releases in, on, under or from any of
the Properties, except in De Minimis Amounts; (3) there are no
Hazardous Materials in, on, or under any of the Properties, except in
De Minimis Amounts; and (4) the Properties have been kept free and
clear of all liens and other encumbrances imposed pursuant to any
Environmental Law (the "Environmental Liens"). To Lessee's Actual
Knowledge and except as disclosed in the Questionnaires, no tenant or
other user of any of the Properties has done any act that materially
increased the dangers to human health or the environment, posed an
unreasonable risk of harm to any person or entity (whether on or off
the Properties), impaired the value of any of the Properties, is
contrary to any requirement of any insurer, constituted a public or
private nuisance, constituted waste, or
23
violated any covenant, condition, agreement or easement applicable to
any of the Properties.
The terms "Lessee's Actual Knowledge" and "Actual Knowledge" as used in
this Section 16.D shall mean the conscious awareness of facts or other
information by any of Xxxxxxx X. Xxx, Xx., Xxxx X. Xxx or Xxxxxxx X. Xxx.
E. Lessee covenants to Lessor during the Lease Term that: (i) the
Properties shall not be in violation of or subject to any investigation or
inquiry by any Governmental Authority or to any remedial obligations under any
Environmental Laws except for such violations or investigations or inquiries
which relate to Hazardous Materials in De Minimis Amounts. If any investigation
or inquiry is initiated by any Governmental Authority (except for investigations
or inquiries which relate to Hazardous Materials in De Minimis Amounts), Lessee
shall promptly notify Lessor; (ii) all uses and operations on or of each of the
Properties, whether by Lessee or any other person or entity, shall be in
compliance in all material respects with all Environmental Laws and permits
issued pursuant thereto; (iii) there shall be no Releases in, on, under or from
any of the Properties, except in De Minimis Amounts or that do not violate any
Environmental Laws; (iv) there shall be no Hazardous Materials in, on, or under
any of the Properties, except in De Minimis Amounts or that do not violate any
Environmental Laws; (v) Lessee shall keep each of the Properties free and clear
of all Environmental Liens, whether due to any act or omission of Lessee or any
other person or entity; (vi) Lessee shall, at its sole cost and expense, fully
and expeditiously cooperate in all activities pursuant to subsection F below,
including but not limited to providing all relevant information and making
knowledgeable persons available for interviews; (vii) in the event that Lessor
notifies Lessee that it has knowledge of a Release or a Threatened Release at
any of the Properties or has a reasonable basis to believe that a material
violation of Environmental Laws at any of the Properties may have occurred,
Lessee shall, at its sole cost and expense, perform any environmental site
assessment or other investigation of environmental conditions in connection with
any of the Properties as may be reasonably requested by Lessor (including but
not limited to sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Lessor and Environmental Insurer the reports and other results
thereof, and Lessor, Environmental Insurer and the other Indemnified Parties
shall be entitled to rely on such reports and other results thereof; (viii)
Lessee shall, at its sole cost and expense, comply with all reasonable written
requests of Lessor to (1) reasonably effectuate Remediation of any Release in,
on, under or from any of the Properties; (2) comply with any Environmental Law;
and (3) comply with any applicable directive from any Governmental Authority;
(ix) Lessee shall not do or allow any tenant or other user of any of the
Properties to do any act that materially increases the dangers to human health
or the environment or poses an unreasonable risk of harm to any person or entity
(whether on or off any of the Properties); and (x) Lessee shall, upon obtaining
such information, promptly notify Lessor in writing of (A) any Releases or
Threatened Releases in, on, under, from or migrating towards any of the
Properties in violation of any applicable Environmental Laws; (B) any
non-compliance with any Environmental Laws related in any way to any of the
Properties; (C) any Environmental Lien; (D) any required Remediation of
environmental conditions relating to any of the Properties; and (E) any written
notice of which Lessee becomes aware relating in any way to liability of any
person or entity pursuant to any Environmental Law, or any administrative or
judicial proceedings commenced or overtly threatened in connection with any
alleged violation of Environmental Laws.
24
X. Xxxxxx, Lender and any other person or entity designated by Lessor,
including but not limited to any receiver, any representative of a Governmental
Authority, and any environmental consultant, shall have the right, but not the
obligation, to enter upon the Properties at all reasonable times (including,
without limitation, in connection with any Securitization, Participation or
Transfer or in connection with a proposed sale or conveyance of any of the
Properties or a proposed financing or refinancing secured by any of the
Properties or in connection with the exercise of any remedies set forth in this
Lease, the Mortgages or the other Loan Documents, as applicable) to assess any
and all aspects of the environmental condition of the Properties and its use,
including but not limited to conducting any environmental assessment or audit
(the scope of which shall be determined in the sole and absolute discretion of
the party conducting the assessment) and taking samples of soil, groundwater or
other water, air, or building materials, and conducting other invasive testing;
provided, however, that any such persons (except in emergencies) shall use
reasonable efforts to undertake any such assessments or investigations so as to
minimize the impact on Lessee's business operations at the Properties. Lessee
shall cooperate with and provide access to Lessor, Lender and any other person
or entity designated by Lessor. Any such assessment and investigation shall be
at Lessor's sole cost and expense unless at the time of any such assessment or
investigation Lessor has knowledge of a Release or a Threatened Release at any
of the Properties or has a reasonable basis to believe that a material violation
of Environmental Laws at any of the Properties may have occurred or an Event of
Default has occurred and is continuing, in which case Lessee shall be
responsible for the cost of any such assessment or investigation.
G. Lessee shall, at its sole cost and expense, protect, defend,
indemnify, release and hold harmless each of the Indemnified Parties for, from
and against any and all Losses (excluding Losses suffered by an Indemnified
Party directly arising out of such Indemnified Party's gross negligence or
willful misconduct; provided, however, that the term "gross negligence" shall
not include gross negligence imputed as a matter of law to any of the
Indemnified Parties solely by reason of the Lessor's interest in any of the
Properties or Lessor's failure to act in respect of matters which are or were
the obligation of Lessee under this Lease) and costs of Remediation (whether or
not performed voluntarily), engineers' fees, environmental consultants' fees,
and costs of investigation (including but not limited to sampling, testing, and
analysis of soil, water, air, building materials and other materials and
substances whether solid, liquid or gas) imposed upon or incurred by or asserted
against any Indemnified Parties, and directly or indirectly arising out of or in
any way relating to any one or more of the following: (i) any presence of any
Hazardous Materials in, on, above, or under any of the Properties; (ii) any past
or present Release or Threatened Release in, on, above, under or from any of the
Properties; (iii) any activity by Lessee, any person or entity affiliated with
Lessee or any other tenant or other user of any of the Properties in connection
with any actual, proposed or threatened use, treatment, storage, holding,
existence, disposition or other Release, generation, production, manufacturing,
processing, refining, control, management, abatement, removal, handling,
transfer or transportation to or from any of the Properties of any Hazardous
Materials at any time located in, under, on or above any of the Properties; (iv)
any activity by Lessee, any person or entity affiliated with Lessee or any other
tenant or other user of any of the Properties in connection with any actual or
proposed Remediation of any Hazardous Materials at any time located in, under,
on or above any of the Properties, whether or not such Remediation is voluntary
or pursuant to court or administrative order, including but not limited to any
removal, remedial or corrective action; (v) any past, present or threatened
non-compliance or violations of any Environmental Laws (or permits issued
pursuant to any Environmental Law) in
25
connection with any of the Properties or operations thereon, including but not
limited to any failure by Lessee, any person or entity affiliated with Lessee or
any other tenant or other user of any of the Properties to comply with any order
of any Governmental Authority in connection with any Environmental Laws; (vi)
the imposition, recording or filing or the threatened imposition, recording or
filing of any Environmental Lien encumbering any of the Properties; (vii) any
administrative processes or proceedings or judicial proceedings in any way
connected with any matter addressed in this Section; (viii) any past, present or
threatened injury to, destruction of or loss of natural resources in any way
connected with any of the Properties, including but not limited to costs to
investigate and assess such injury, destruction or loss; (ix) any acts of
Lessee, any person or entity affiliated with Lessee or any other tenant or user
of any of the Properties in arranging for disposal or treatment, or arranging
with a transporter for transport for disposal or treatment, of Hazardous
Materials owned or possessed by Lessee, any person or entity affiliated with
Lessee or any other tenant or user of any of the Properties, at any facility or
incineration vessel owned or operated by another person or entity and containing
such or similar Hazardous Materials; (x) any acts of Lessee, any person or
entity affiliated with Lessee or any other tenant or user of any of the
Properties, in accepting any Hazardous Materials for transport to disposal or
treatment facilities, incineration vessels or sites selected by Lessee, any
person or entity affiliated with Lessee or any other tenant or user of any of
the Properties, from which there is a Release, or a Threatened Release of any
Hazardous Materials which causes the incurrence of costs for Remediation; (xi)
any personal injury, wrongful death, or property damage arising under any
statutory or common law or tort law theory relating to any of the Properties,
including but not limited to damages assessed for the maintenance of a private
or public nuisance or for the conducting of an abnormally dangerous activity on
or near any of the Properties; and (xii) any misrepresentation or inaccuracy in
any representation or warranty or material breach or failure to perform any
covenants or other obligations pursuant to this Section.
H. The obligations of Lessee and the rights and remedies of the
Indemnified Parties under the foregoing subsections D through G shall survive
the termination, expiration and/or release of this Lease.
17. CONDITION OF PROPERTIES; MAINTENANCE. Lessee, at its own expense,
will maintain all parts of each of the Properties in good repair and sound
condition, except for ordinary wear and tear, and will take all action and will
make all structural and non-structural, foreseen and unforeseen and ordinary and
extraordinary changes and repairs or replacements which may be required to keep
all parts of each of the Properties in good repair and sound condition. Lessee
waives any right to (i) require Lessor to maintain, repair or rebuild all or any
part of any of the Properties or (ii) make repairs at the expense of Lessor,
pursuant to any Applicable Regulations at any time in effect.
18. WASTE; ALTERATIONS AND IMPROVEMENTS. Lessee shall not commit actual
or constructive waste upon any of the Properties. Without the prior written
consent of Lessor, which consent shall not be unreasonably withheld or
conditioned, Lessee shall not (a) make any additions to or alter the structural
elements of the improvements at any of the Properties or the load-bearing walls,
roof, foundation or "footprint" of any building located at any of the
Properties, other than adding or replacing windows, (b) alter any material part
of any building system of any of the Properties in any manner, other than
replacements of parts of any building system with parts of like kind and of
equal or greater value, or (c) make any other change or
26
related series of other changes to any Property that is estimated to cost in
excess of $250,000 per Property, other than changes in the color or style of
wall colors/coverings, floor coverings or treatments or changes to (or
alterations of) exterior colors (any of (a), (b) or (c) being hereinafter
referred to as a "Material Alteration" and any alteration that does not
constitute a Material Alteration is hereinafter referred to as a "Non-Material
Alteration"). Lessee may undertake a Non-Material Alteration to any Property
without first notifying Lessor. If Lessor's consent is required hereunder and
Lessor consents to the making of any such alterations, the same shall be made
according to plans and specifications approved by Lessor and subject to such
other conditions as Lessor shall require. All alterations shall be made by
Lessee at Lessee's sole expense by licensed contractors and in accordance with
all applicable laws governing such alterations. Any work at any time commenced
by Lessee on any of the Properties shall be prosecuted diligently to completion,
shall be of good workmanship and materials and shall comply fully with all the
terms of this Lease. Upon completion of any Material Alteration, Lessee shall
promptly provide Lessor with (i) evidence of full payment to all laborers and
materialmen contributing to the alterations, (ii) an architect's certificate
certifying the alterations to have been completed in conformity with the plans
and specifications, (iii) a certificate of occupancy (if the alterations are of
such a nature as would require the issuance of a certificate of occupancy), and
(iv) any other documents or information reasonably requested by Lessor. Upon
completion of any Non-Material Alteration for which a permit was issued, Lessee
shall promptly provide Lessor with a copy of such permit and evidence that the
Governmental Authority which issued the permit has signed off on the work done
pursuant to such permit (to the extent such sign off is required by Applicable
Regulations). Any addition to, or alteration of, any of the Properties
(excluding Personalty) shall automatically be deemed a part of the Properties
and belong to Lessor, and Lessee shall execute and deliver to Lessor such
instruments as Lessor may require to evidence the ownership by Lessor of such
addition or alteration. Lessee shall execute and file or record, as appropriate,
a "Notice of Non-Responsibility," or any equivalent notice permitted under
applicable law in the states where the applicable Properties are located.
19. INDEMNIFICATION. Lessee shall indemnify, protect, defend and hold
harmless each of the Indemnified Parties from and against any and all Losses
(excluding Losses suffered by an Indemnified Party arising out of the gross
negligence or willful misconduct of such Indemnified Party; provided, however,
that the term "gross negligence" shall not include gross negligence imputed as a
matter of law to any of the Indemnified Parties solely by reason of the Lessor's
interest in any of the Properties or Lessor's failure to act in respect of
matters which are or were the obligation of Lessee under this Lease) caused by,
incurred or resulting from Lessee's operations of or relating in any manner to
any of the Properties, whether relating to their original design or
construction, latent defects, alteration, maintenance, use by Lessee or any
person thereon, supervision or otherwise, or from any breach of, default under,
or failure to perform, any term or provision of this Lease by Lessee, its
officers, employees, agents or other persons, or to which any Indemnified Party
is subject because of Lessor's or Remainderman's interest in any of the
Properties, including, without limitation, Losses arising from (1) any accident,
injury to or death of any person or loss of or damage to property occurring in,
on or about any of the Properties or portion thereof or on the adjoining
sidewalks, curbs, parking areas, streets or ways, (2) any use, non-use or
condition in, on or about, or possession, alteration, repair, operation,
maintenance or management of, any of the Properties or any portion thereof or on
the adjoining sidewalks, curbs, parking areas, streets or ways, (3) any
representation or warranty made herein by Lessee, in any certificate delivered
in connection herewith or in any other agreement to which Lessee is a party
27
or pursuant thereto being false or misleading in any material respect as of the
date of such representation or warranty was made, (4) performance of any labor
or services or the furnishing of any materials or other property in respect to
any of the Properties or any portion thereof, (5) any taxes, assessments or
other charges which Lessee is required to pay under Section 10, (6) any lien,
encumbrance or claim arising on or against any of the Properties or any portion
thereof under any Applicable Regulation or otherwise which Lessee is obligated
hereunder to remove and discharge, or the failure to comply with any Applicable
Regulation, (7) the claims of any invitees, patrons, licensees or subtenants of
all or any portion of any of the Properties or any Person acting through or
under Lessee or otherwise acting under or as a consequence of this Lease or any
sublease, (8) any act or omission of Lessee or its agents, contractors,
licensees, subtenants or invitees, (9) any contest referred to in Section 10,
and (10) the sale of liquor, beer or wine on any of the Properties. It is
expressly understood and agreed that Lessee's obligations under this Section
shall survive the expiration or earlier termination of this Lease for any
reason.
20. QUIET ENJOYMENT. So long as Lessee shall pay the rental and other
sums herein provided and shall keep and perform all of the terms, covenants and
conditions on its part herein contained, Lessee shall have, subject and
subordinate to Lessor's rights herein, the right to the peaceful and quiet
occupancy of the Properties. Notwithstanding the foregoing, however, in no event
shall Lessee be entitled to bring any action against Lessor to enforce its
rights hereunder if an Event of Default shall have occurred and be continuing.
21. CONDEMNATION OR DESTRUCTION. A. In the event of a taking of all or
any part of any of the Properties for any public or quasi-public purpose by any
lawful power or authority by exercise of the right of condemnation or eminent
domain or by agreement between Lessor, Lessee and those authorized to exercise
such right ("Taking") or the commencement of any proceedings or negotiations
which might result in a Taking or any damage to, or destruction of, any of the
Properties or any part thereof (a "Casualty"), Lessee will promptly give written
notice thereof to Lessor, generally describing the nature and extent of such
Taking, proceedings, negotiations or Casualty and including copies of any
documents or notices received in connection therewith. Thereafter, Lessee shall
promptly send Lessor copies of all correspondence and pleadings relating to any
such Taking, proceedings, negotiations or Casualty. During all periods of time
following a Casualty, Lessee shall ensure that the subject Property is secure
and does not pose any risk of harm to adjoining property owners or occupants or
third-parties.
B. In the event of (i) a Taking of all of any of the Properties, other
than for temporary use, (ii) a Taking of substantially all of any of the
Properties (other than for temporary use) that results in Lessee making a good
faith determination that the restoration and continued use of the remainder of
such Property as a Permitted Facility would be uneconomic (each of (i) and (ii),
a "Total Taking"), or (iii) a Casualty of all or substantially all of any of the
Properties that results in Lessee making a good faith determination that the
restoration and continued use of such Property as a Permitted Facility would be
uneconomic (a "Total Casualty"), Lessor shall be entitled, subject to the
provisions of this Section 21, to receive the entire award, insurance proceeds
or payment in connection therewith without deduction for any estate vested in
Lessee by this Lease. Lessee hereby expressly assigns to Lessor all of its
right, title and interest in and to every such award, insurance proceeds or
payment and agrees that Lessee shall not be entitled to any award, insurance
proceeds or payment for the value of Lessee's leasehold interest in this
28
Lease. Lessee shall be entitled to claim and receive any award or payment from
the condemning authority expressly granted for the taking of Personalty, the
interruption of its business and moving expenses, but only if such claim or
award does not adversely affect or interfere with the prosecution of Lessor's
claim for the Total Taking or otherwise reduce the amount recoverable by Lessor
for the Total Taking. Lessee shall be entitled to claim and receive any
insurance proceeds with respect to the Personalty, the interruption of its
business and moving expenses, but only if such claim or proceeds does not
adversely affect or interfere with the prosecution of Lessor's claim for the
Total Casualty or otherwise reduce the amount recoverable by Lessor for the
Total Casualty.
In the event of a Total Taking or Total Casualty, Lessee shall have the
right to terminate this Lease with respect to the applicable Property by notice
(the "Termination Notice") given to Lessor not later than 30 days after the
Total Taking or Total Casualty, as applicable. The Termination Notice must: (i)
specify a date on which this Lease with respect to such Property shall
terminate, which date shall be the last day of a calendar month occurring not
earlier than 120 days and not later than 150 days after the delivery of such
notice (the "Early Termination Date"); (ii) contain a certificate executed by
the president, chief financial officer or treasurer of Lessee which (X)
describes the Total Taking or Total Casualty, (Y) represents and warrants that
either the whole of such Property has been taken, or that substantially all of
such Property has been taken and Lessee has determined in good faith that the
restoration and continued use of the remainder of such Property as a Permitted
Facility would be uneconomic, or that either the whole or substantially all of
such Property has been damaged or destroyed and Lessee has determined in good
faith that the restoration and continued use of such Property as a Permitted
Facility would be uneconomic, and (Z) contains a covenant by Lessee that neither
Lessee or any Affiliate of Lessee will use such Property for a period of 2 years
following the Early Termination Date; and (iii) if the Early Termination Date
shall occur prior to the commencement of any extension options which may be
exercised pursuant to Section 27, contain either (X) an irrevocable rejectable
written offer (the "Rejectable Offer") of Lessee to purchase Lessor's interest
in such Property and in the net award for such Total Taking or net insurance
proceeds for such Total Casualty, as applicable, after deducting all costs, fees
and expenses incident to the collection thereof, including all costs and
expenses incurred by Lessor and Lender in connection therewith (the "Net Award")
on the Early Termination Date for a purchase price equal to the Stipulated Loss
Value (as defined below) for such Property, or (Y) a Rejectable Substitution
Offer to substitute a Substitute Property satisfying the applicable requirements
of Section 57.A for such Property and Lessor's interest in the Net Award. As
used herein, the term "Stipulated Loss Value" shall mean the sum of (a) the
product of the percentage specified on Schedule I attached hereto which
corresponds to the Early Termination Date multiplied by the Purchase Price for
such Property, plus (b) all Base Annual Rental, Additional Rental and other sums
and obligations then due and payable under this Lease, plus (c) in the event of
a Total Casualty only, the Prepayment Charge corresponding to such Property. In
the event of a termination of this Lease with respect to a Property pursuant to
this Section 21.B which does not involve the acceptance (or deemed acceptance)
of a Rejectable Substitution Offer, the Base Annual Rental then in effect shall
be reduced by an amount equal to the product of (x) the Applicable Rent
Reduction Percentage for such Property, and (y) the Base Annual Rental then in
effect.
If the Early Termination Date shall occur prior to the commencement of
any extension options which may be exercised pursuant to Section 27, Lessor
shall have 90 days from the
29
delivery of the Termination Notice to deliver to Lessee written notice of its
election to either accept or reject any Rejectable Offer or Rejectable
Substitution Offer contained in the Termination Notice. Lessor's failure to
deliver such notice within such time period shall be deemed to constitute
Lessor's acceptance of the applicable Rejectable Offer or Rejectable
Substitution Offer. If the Mortgage corresponding to such Property is still
outstanding, any rejection of the Rejectable Offer or Rejectable Substitution
Offer by Lessor shall not be effective unless it is consented to in writing by
the Lender and such written consent is delivered to Lessee within such 90-day
period.
If Lessor accepts the Rejectable Offer or is deemed to have accepted
the Rejectable Offer or if, while the Mortgage corresponding to such Property is
still outstanding, any rejection of the Rejectable Offer by Lessor is not
consented to in writing by the Lender, then, on the Early Termination Date,
Lessor shall sell and convey, and Lessee shall purchase for the applicable
Stipulated Loss Value, Lessor's interest in such Property and the Net Award.
Lessee's obligations under this Lease with respect to such Property shall not be
terminated until the applicable Stipulated Loss Value is paid in full. Upon such
payment, (i) Lessor shall convey such Property to Lessee "as-is" by quit-claim
deed, subject to all matters of record (except for the Mortgage corresponding to
such Property and any other consensual liens granted by Lessor other than those
granted by Lessor at the request of Lessee), and without representation or
warranty, and (ii) all obligations of either party hereunder with respect to
such Property shall cease as of the Early Termination Date, provided, however,
Lessee's obligations to the Indemnified Parties under any indemnification
provisions of this Lease with respect to such Property (including, without
limitation, Sections 16 and 19) and Lessee's obligations to pay any sums
(whether payable to Lessor or a third party) accruing under this Lease with
respect to such Property prior to the Early Termination Date shall survive the
termination of this Lease with respect to such Property. This Lease shall,
however, continue in full force and effect with respect to all other Properties.
If Lessor accepts the Rejectable Substitution Offer or is deemed to
have accepted the Rejectable Substitution Offer or if, while the Mortgage
corresponding to such Property is still outstanding, any rejection of the
Rejectable Substitution Offer by Lessor is not consented to in writing by the
Lender, then, on the Early Termination Date, Lessee shall complete such
substitution, subject, however, to the satisfaction of each of the applicable
terms and conditions set forth in Section 57. Upon such substitution (i) Lessee
shall be entitled to claim and receive the Net Award and Lessor shall pay over
to Lessee any portion of the Net Award which Lessor shall have received prior to
such date and (ii) all obligations of either party hereunder with respect to the
Property being replaced shall cease as of the Early Termination Date, provided,
however, Lessee's obligations to the Indemnified Parties under any
indemnification provisions of this Lease with respect to such Property
(including, without limitation, Sections 16 and 19) and Lessee's obligations to
pay any sums (whether payable to Lessor or a third party) accruing under this
Lease with respect to such Property prior to the Early Termination Date shall
survive the termination of this Lease with respect to such Property. This Lease
shall, however, continue in full force and effect with respect to all other
Properties.
Lessee shall be solely responsible for the payment of all costs and
expenses incurred in connection with the conveyance of a Property to Lessee
pursuant to this Section 21, including, without limitation, to the extent
applicable, the cost of title insurance, survey charges, stamp
30
taxes, mortgage taxes, transfer fees, escrow and recording fees, taxes imposed
on Lessor as a result of such conveyance, taxes imposed in connection with the
transfer of a Property to Lessee or the termination of this Lease with respect
to a Property pursuant to the provisions of this Section 21, Lessee's attorneys'
fees and the reasonable attorneys' fees and expenses of counsel to Lessor and
Lender.
If Lessor rejects the Rejectable Offer or Rejectable Substitution Offer
and, as long as the Mortgage corresponding to the Property subject to such
Rejectable Offer or Rejectable Substitution Offer is still outstanding, such
rejection is consented to in writing by Lender (and such written consent
delivered to Lessee within the applicable 90-day period), or if the Early
Termination Date shall occur after the commencement of any extension options
exercised pursuant to Section 27, then (i) the Net Award shall be paid to and
belong to Lessor, (ii) on the Early Termination Date, Lessee shall pay to Lessor
all Base Annual Rental, Additional Rental and other sums and obligations then
due and payable under this Lease, and (iii) all obligations of either party
hereunder shall cease as of the Early Termination Date with respect to the
applicable Property, provided, however, Lessee's obligations to the Indemnified
Parties with respect to such Property under any indemnification provisions of
this Lease with respect to such Property (including, without limitation,
Sections 16 and 19) and Lessee's obligations to pay any sums (whether payable to
Lessor or a third party) accruing under this Lease with respect to such Property
prior to the Early Termination Date shall survive the termination of this Lease.
This Lease shall, however, continue in full force and effect with respect to all
other Properties.
C. In the event of a Taking of all or any part of any of the Properties
for a temporary use ("Temporary Taking"), this Lease shall remain in full force
and effect without any reduction of Base Annual Rental, Additional Rental or any
other sum payable hereunder. In the event that any restoration to the
corresponding Property is necessary as a result of a Temporary Taking, the award
for a Temporary Taking, whether paid by damages, rent or otherwise, shall be
first applied to the costs of such restoration, which restoration shall be
promptly commenced and completed by Lessee pursuant to the terms of Section 18
above if the termination of such Temporary Taking occurs prior to the date of
expiration of this Lease and the restoration can reasonably be completed by such
date. If the amount of the award with respect to such Temporary Taking exceeds
the costs of restoration, the excess award shall be paid to Lessee, unless the
period of occupation and use by the condemning authorities shall extend beyond
the date of expiration of this Lease, in which case the excess award made for
such Taking shall be apportioned between Lessor and Lessee as of the date of
such expiration.
D. In the event of a Taking which is not a Total Taking or a Temporary
Taking ("Partial Taking") or of a Casualty which is not a Total Casualty (a
"Partial Casualty"), all awards, compensation or damages shall be paid to
Lessor, and Lessor shall have the option to (i) terminate this Lease with
respect to the Property affected, provided that, as long as the Mortgage
corresponding to the applicable Property is still outstanding, Lessor shall have
obtained Lender's prior written consent, by notifying Lessee within 60 days
after Lessee gives Lessor notice of such Partial Casualty or that title has
vested in the taking authority or (ii) continue this Lease in effect, which
election may be evidenced by either a notice from Lessor to Lessee or Lessor's
failure to notify Lessee that Lessor has elected to terminate this Lease with
respect to such Property within such 60-day period. Lessee shall have a period
of 60 days after Lessor's notice that it has elected to terminate this Lease
with respect to such Property during
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which to elect to continue this Lease with respect to such Property on the terms
herein provided. If Lessor elects to terminate this Lease with respect to such
Property and Lessee does not elect to continue this Lease with respect to such
Property or shall fail during such 60-day period to notify Lessor of Lessee's
intent to continue this Lease with respect to such Property, then this Lease
shall terminate with respect to such Property as of the last day of the month
during which such period expired. Lessee shall then immediately vacate and
surrender such Property, all obligations of either party hereunder with respect
to such Property shall cease as of the date of termination (provided, however,
Lessee's obligations to the Indemnified Parties under any indemnification
provisions of this Lease with respect to such Property (including, without
limitation, Sections 16 and 19) and Lessee's obligations to pay Base Annual
Rental, Additional Rental and all other sums (whether payable to Lessor or a
third party) accruing under this Lease with respect to such Property prior to
the date of termination shall survive such termination) and Lessor may retain
all such awards, compensation or damages. The Lease shall continue in full force
and effect with respect to all other Properties. If Lessor elects not to
terminate this Lease with respect to such Property, or if Lessor elects to
terminate this Lease with respect to such Property but Lessee elects to continue
this Lease with respect to such Property, then this Lease shall continue in full
force and effect on the following terms: (i) all Base Annual Rental, Additional
Rental and other sums and obligations due under this Lease shall continue
unabated, and (ii) Lessee shall promptly commence and diligently prosecute
restoration of such Property to the same condition, as nearly as practicable, as
prior to such Partial Taking or Partial Casualty as approved by Lessor. Subject
to reasonable conditions for disbursement imposed by Lessor, Lessor shall
promptly make available in installments as restoration progresses an amount up
to but not exceeding the amount of any award, compensation or damages received
by Lessor after deducting all costs, fees and expenses incident to the
collection thereof, including all costs and expenses incurred by Lessor and
Lender in connection therewith (the "Net Restoration Amount"), upon request of
Lessee accompanied by evidence reasonably satisfactory to Lessor that such
amount has been paid or is due and payable and is properly a part of such costs
and that Lessee has complied with the terms of Section 18 above in connection
with the restoration. As long as the Mortgage corresponding to the Property
affected by such Partial Taking or Partial Casualty is outstanding, the Net
Restoration Amount shall be held by Lender in an interest-bearing account until
disbursed pursuant to this Section 21.D. Prior to the disbursement of any
portion of the Net Restoration Amount with respect to a Partial Casualty, Lessee
shall provide evidence reasonably satisfactory to Lessor of the payment of
restoration expenses by Lessee up to the amount of the insurance deductible
applicable to such Partial Casualty. Lessor shall be entitled to keep any
portion of the Net Restoration Amount which may be in excess of the cost of
restoration, subject to the rights of Lender under the Loan Documents, and
Lessee shall bear all additional costs, fees and expenses of such restoration in
excess of the Net Restoration Amount. If this Lease is terminated with respect
to any Property as a result of a Partial Casualty, simultaneously with such
termination Lessee shall pay Lessor an amount equal to the insurance deductible
applicable to such Partial Casualty.
E. Any loss under any property damage insurance required to be
maintained by Lessee shall be adjusted by Lessor and Lessee. Any award relating
to a Total Taking shall be adjusted by Lessor, provided that, unless and until
Lessor has previously rejected a Rejectable Offer or Rejectable Substitution
Offer with respect to such Total Taking pursuant to the provisions of Section
21.B, Lessor shall obtain Lessee's prior written consent (which consent shall
not be unreasonably withheld, delayed or conditioned) before a final settlement
of the
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amount of such award. Any award relating to a Partial Taking shall be adjusted
by Lessor, provided that Lessor shall obtain Lessee's prior written consent
(which consent shall not be unreasonably withheld, delayed or conditioned)
before a final settlement of the amount of such award. Notwithstanding the
foregoing or any other provisions of this Section to the contrary, if at the
time of any Taking or any Casualty or at any time thereafter there shall be an
Event of Default existing under this Lease, Lessor is hereby authorized and
empowered but shall not be obligated, in the name and on behalf of Lessee and
otherwise, to file and prosecute Lessee's claim, if any, for an award on account
of such Taking or for insurance proceeds on account of such Casualty and to
collect such award or proceeds and apply the same, after deducting all costs,
fees and expenses incident to the collection thereof, to the curing of such
Event of Default and any other then existing Event of Default under this Lease
and/or to the payment of any amounts owed by Lessee to Lessor under this Lease,
in such order, priority and proportions as Lessor in its discretion shall deem
proper.
F. Notwithstanding the foregoing, nothing in this Section 21 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease, including,
without limitation, those provisions set forth in Section 3 of this Lease.
22. INSPECTION. Lessor and its authorized representatives shall have
the right, upon giving reasonable advance notice, to enter any of the Properties
or any part thereof during normal business hours of Lessee in order to inspect
the same and make photographic or other evidence concerning Lessee's compliance
with the terms of this Lease or in order to show the Properties to prospective
purchasers and lenders. Lessee hereby waives any claim for damages for any
injury or inconvenience to or interference with Lessee's business, any loss of
occupancy or quiet enjoyment of any of the Properties and any other loss
occasioned by such entry so long as Lessor shall have used reasonable efforts
not to unreasonably interrupt Lessee's normal business operations. Lessee shall
keep and maintain at the Properties or Lessee's corporate headquarters full,
complete and appropriate books of account and records of Lessee's business
relating to the Properties in accordance with GAAP. Lessee's books and records
shall be open for inspection at reasonable times and upon reasonable notice by
Lessor, Lender and their respective auditors or other authorized representatives
and shall show such information as is reasonably necessary to determine
compliance with Lessor's obligations under the Loan Documents.
23. DEFAULT, REMEDIES AND MEASURE OF DAMAGES. A. Each of the following
shall be an event of default under this Lease (each, an "Event of Default"):
(i) If any representation or warranty of Lessee set forth in
this Lease is false in any material respect, or if Lessee renders any
statement or account which is false in any material respect and could
reasonably be expected to result in damages to Lessor;
(ii) If any rent or other monetary sum due under this Lease is
not paid within five days from the date when due; provided, however,
notwithstanding the occurrence of such an Event of Default, Lessor
shall not be entitled to exercise its remedies set forth below unless
and until Lessor shall have given Lessee notice thereof and a period of
five days from the delivery of such notice shall have elapsed without
such Event of Default being cured;
33
(iii) If Lessee fails to pay, prior to delinquency, any taxes,
assessments or other charges, the failure of which to pay will result
in the imposition of a lien against any of the Properties or the rental
or other payments due under this Lease or a claim against Lessor,
unless Lessee is contesting such taxes, assessments or other charges in
accordance with the provisions of Section 10 of this Lease;
(iv) If Lessee or any of the Guarantors becomes insolvent
within the meaning of the Code, files or notifies Lessor that it
intends to file a petition under the Code, initiates a proceeding under
any similar law or statute relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts (collectively,
hereinafter, an "Action"), becomes the subject of either a petition
under the Code or an Action which is not dissolved within 90 days after
filing, or is not generally paying its debts as the same become due;
(v) If Lessee vacates or abandons any of the Properties other
than in accordance with the provisions of Section 15 of this Lease;
(vi) If Lessee fails to observe or perform any of the other
covenants (except with respect to a breach of the Aggregate Fixed
Charge Coverage Ratio, which breach is addressed in subitem (ix)
below), conditions or obligations of this Lease; provided, however, if
any such failure does not involve the payment of any monetary sum, is
not willful or intentional, does not place any rights or property of
Lessor in immediate jeopardy, and is within the reasonable power of
Lessee to promptly cure after receipt of notice thereof, all as
determined by Lessor in its reasonable discretion, then such failure
shall not constitute an Event of Default hereunder, unless otherwise
expressly provided herein, unless and until Lessor shall have given
Lessee notice thereof and a period of 30 days shall have elapsed,
during which period Lessee may correct or cure such failure, upon
failure of which an Event of Default shall be deemed to have occurred
hereunder without further notice or demand of any kind being required.
If such failure cannot reasonably be cured within such 30 day period,
as determined by Lessor in its reasonable discretion, and Lessee is
diligently pursuing a cure of such failure, then Lessee shall have a
reasonable period to cure such failure beyond such 30 day period, which
shall in no event exceed 90 days after receiving notice of such failure
from Lessor. If Lessee shall fail to correct or cure such failure
within such 90-day period, an Event of Default shall be deemed to have
occurred hereunder without further notice or demand of any kind being
required;
(vii) If there is an "Event of Default" or a breach or
default, after the passage of all applicable notice and cure or grace
periods, under any other Sale-Leaseback Document or any of the Other
Agreements; provided, however, that (x) an "Event of Default" or a
breach or default, after the passage of all applicable notice and cure
or grace periods, under any Other Agreement relating to a property for
which Lender or an Affiliate of Lender has made a loan to one of the
Lessor Entities which has not been the subject of a Loan Pool shall not
constitute an Event of Default under this Lease if the loans secured by
the Mortgages have been the subject of a Loan Pool, and (y) an "Event
of Default" or a breach or default, after the passage of all applicable
notice and cure or grace periods, under any Other Agreement relating to
a property for which Lender or an Affiliate of Lender has made a loan
to one of the Lessor Entities which has been the
34
subject of a Loan Pool shall not constitute an Event of Default under
this Lease if the loans secured by the Mortgages have been the subject
of a different Loan Pool;
(viii) If a final, nonappealable judgment is rendered by a
court against Lessee which has a material adverse effect on either the
ability to conduct business at any of the Properties for its intended
use or Lessee's ability to perform its obligations under this Lease, or
is in the amount of $100,000.00 or more, and in either event is not
discharged or provision made for such discharge within 60 days from the
date of entry thereof;
(ix) If there is a breach of the Aggregate Fixed Charge
Coverage Ratio requirement and Lessor shall have given Lessee notice
thereof and Lessee shall have failed within a period of 20 days from
the delivery of such notice to either:
(1) deliver a Rejectable Substitution Offer to Lessor
for the substitution of such Substitute Properties satisfying
the applicable requirements of Section 57.A for the Properties
(starting with the Property with the lowest "Fixed Charge
Coverage Ratio" (determined as contemplated in the following
sentence) and proceeding in ascending order to the Property
with the next lowest Fixed Charge Coverage Ratio) as is
necessary to cure the breach of the Aggregate Fixed Charge
Coverage Ratio requirement;
(2) deliver a Rejectable Purchase Offer to Lessor to
purchase such of the Properties (starting with the Property
with the lowest Fixed Charge Coverage Ratio and proceeding in
ascending order to the Property with the next lowest Fixed
Charge Coverage Ratio) as is necessary to cure the breach of
the Aggregate Fixed Charge Coverage Ratio requirement; or
(3) deliver notice to Lessor that it has elected to
pay the FCCR Rent Prepayment Amount (as hereinafter defined)
on the first day of the calendar month immediately following
the date such notice is delivered.
For purposes of the preceding subitems (1) and (2), the definitions set
forth in Section 8.A of this Lease with respect to the calculation of the
Aggregate Fixed Charge Coverage Ratio shall be deemed modified as applicable to
provide for the calculation of a Fixed Charge Coverage Ratio for each Property
on an individual basis rather than on an aggregate basis with all the other
Properties. For purposes of such calculation, the Operating Lease Expense with
respect to this Lease for each such Property shall equal the product of (x) the
Applicable Rent Reduction Percentage for such Property, and (y) the Base Annual
Rental then in effect.
If Lessee makes a Rejectable Substitution Offer or Rejectable Purchase
Offer as contemplated by subitems (1) and (2) above, unless Lessor rejects such
Rejectable Substitution Offer or Rejectable Purchase Offer as contemplated by
Section 57 or 58, as applicable, the failure of Lessee to complete such
substitutions or purchases within the time period contemplated by Section 57 or
58, as applicable, shall be deemed an Event of Default without further notice or
demand of any kind being required. If Lessee delivers notice to Lessor that it
has elected to pay the FCCR Rent Prepayment Amount as provided in subitem (3)
above, the failure of Lessee to pay Lessor the FCCR Rent Prepayment Amount on
the first day of the calendar month immediately
35
following the date such notice is delivered shall be deemed an Event of Default
without further notice or demand of any kind being required.
In the event Lessee elects to pay Lessor the FCCR Rent Prepayment
Amount as provided in subitem (3) above, Base Monthly Rental beginning with the
calendar month in which such payment is made shall be equal to the Base Monthly
Rental then in effect reduced by the FCCR Rent Reduction Amount (as hereinafter
defined).
For purposes of this Section 23.A(ix), the following terms shall be
defined as set forth below:
"FCCR Rent Prepayment Amount" means the present value,
discounted on a monthly basis at 8.99% per annum, of the FCCR Rent
Reduction Amount for each month beginning with the calendar month in
which the FCCR Rent Prepayment Amount is paid and ending with the
calendar month of January, 2022, inclusive.
"FCCR Rent Reduction Amount" the product of (x) the Base
Monthly Rental for the last month of the fiscal year for which the
breach of the Aggregate Fixed Charge Coverage Ratio requirement
occurred and (y) the Fixed Charge Coverage Shortfall Percentage. For
purposes of illustration and not limitation, if (i) Lessee's Aggregate
Fixed Charge Coverage Ratio for the fiscal year ending December 31,
2009 was 1.2:1 (which results in a Fixed Charge Coverage Shortfall
Percentage of 20%), (ii) Lessee paid the FCCR Rent Prepayment Amount on
September 1, 2010, and (iii) the Base Monthly Rental for December, 2009
was $100, then the Base Monthly Rental payment beginning on September
1, 2010 shall be equal to the Base Monthly Rental for August, 2010
reduced by the sum of $20.
"Fixed Charge Coverage Shortfall Percentage" means the
percentage represented by (x) 1 minus (y) a fraction, the numerator of
which shall be the Aggregate Fixed Charge Coverage Ratio for the fiscal
year for which the breach of the Aggregate Fixed Charge Coverage Ratio
requirement occurred, and the denominator of which shall be 1.50:1.
Notwithstanding the foregoing, if, within a 30 day period after the
delivery of Lessor's notice to Lessee of Lessee's breach of the Aggregate Fixed
Charge Coverage Ratio requirement, Lessee provides evidence satisfactory to
Lessor that the Aggregate Fixed Charge Coverage Ratio is at least 1.50:1 for the
twelve calendar month period immediately preceding the delivery to Lessor of
such evidence, no Event of Default shall be deemed to have occurred as a result
of such breach of the Aggregate Fixed Charge Coverage Ratio requirement; or
(x) If Lessee shall fail to maintain insurance in accordance
with the requirements of Section 12 of this Lease; or
(xi) If Lessee shall fail to sign any instrument, certificate,
financing statement or document in accordance with the provisions of
Sections 24 or 25 of this Lease and such failure shall not be cured
within five days following notice from Lessor.
B. Upon the occurrence of an Event of Default, with or without notice
or demand, except the notice required under certain circumstances by subsection
A. above or such other
36
notice as may be required by statute and cannot be waived by Lessee (all other
notices being hereby waived), Lessor shall be entitled to exercise, at its
option, concurrently, successively, or in any combination, all remedies
available at law or in equity, including without limitation, any one or more of
the following:
(i) To terminate this Lease, whereupon Lessee's right to
possession of the Properties shall cease and this Lease, except as to
Lessee's liability, shall be terminated.
(ii) To reenter and take possession of any or all of the
Properties and, to the extent permissible, all franchises, licenses,
area development agreements, permits and other rights or privileges of
Lessee pertaining to the use and operation of any or all of the
Properties and to expel Lessee and those claiming under or through
Lessee, without being deemed guilty in any manner of trespass or
becoming liable for any loss or damage resulting therefrom, without
resort to legal or judicial process, procedure or action. No notice
from Lessor hereunder or under a forcible entry and detainer statute or
similar law shall constitute an election by Lessor to terminate this
Lease unless such notice specifically so states. If Lessee shall, after
default, voluntarily give up possession of any of the Properties to
Lessor, deliver to Lessor or its agents the keys to any of the
Properties, or both, such actions shall be deemed to be in compliance
with Lessor's rights and the acceptance thereof by Lessor or its agents
shall not be deemed to constitute a termination of this Lease. Lessor
reserves the right following any reentry and/or reletting to exercise
its right to terminate this Lease by giving Lessee written notice
thereof, in which event this Lease will terminate as specified in said
notice.
(iii) To cause all Personalty located on or at any or all of
the Properties to be stored in a public warehouse or elsewhere at
Lessee's sole expense, without becoming liable for any loss or damage
resulting therefrom and without resorting to legal or judicial process,
procedure or action.
(iv) To bring an action against Lessee for any damages
sustained by Lessor or any equitable relief available to Lessor.
(v) To relet any or all of the Properties or any part thereof
for such term or terms (including a term which extends beyond the
original Lease Term), at such rentals and upon such other terms as
Lessor, in its sole discretion, may determine, with all proceeds
received from such reletting being applied to the rental and other sums
due from Lessee in such order as Lessor may, in it sole discretion,
determine, which other sums include, without limitation, all
repossession costs, brokerage commissions, attorneys' fees and
expenses, employee expenses, alteration, remodeling and repair costs
and expenses of preparing for such reletting. Except to the extent
required by applicable law, Lessor shall have no obligation to relet
any of the Properties or any part thereof and shall in no event be
liable for refusal or failure to relet any of the Properties or any
part thereof, or, in the event of any such reletting, for refusal or
failure to collect any rent due upon such reletting, and no such
refusal or failure shall operate to relieve Lessee of any liability
under this Lease or otherwise to affect any such liability. Lessor
reserves the right following any reentry and/or reletting to exercise
its right to terminate this Lease by giving Lessee written notice
thereof, in which event this Lease will terminate as specified in said
notice.
37
(vi) (x) To recover from Lessee all rent and other monetary
sums then due and owing under this Lease; and (y) to accelerate and
recover from Lessee the present value (discounted at the rate of 6% per
annum) of all rent and other monetary sums scheduled to become due and
owing under this Lease after the date of such breach for the entire
original scheduled Lease Term, provided, however, in no event shall
such recovery be less than the sum of (i) the product of the percentage
specified on Schedule I attached hereto which corresponds to the month
in which such Event of Default first occurred multiplied by the sum of
the Purchase Price for all of the Properties which are then subject to
the Lease plus (ii) the sum of the Prepayment Charges corresponding to
all of the Properties which are then subject to this Lease.
(vii) To recover from Lessee all costs and expenses, including
attorneys' fees, court costs, expert witness fees, costs of tests and
analyses, travel and accommodation expenses, deposition and trial
transcripts, copies and other similar costs and fees, paid or incurred
by Lessor as a result of such breach, regardless of whether or not
legal proceedings are actually commenced.
(viii) To immediately or at any time thereafter, and with or
without notice, at Lessor's sole option but without any obligation to
do so, correct such breach or default and charge Lessee all costs and
expenses incurred by Lessor therein. Any sum or sums so paid by Lessor,
together with interest at the Default Rate, shall be deemed to be
Additional Rental hereunder and shall be immediately due from Lessee to
Lessor. Any such acts by Lessor in correcting Lessee's breaches or
defaults hereunder shall not be deemed to cure said breaches or
defaults or constitute any waiver of Lessor's right to exercise any or
all remedies set forth herein.
(ix) To immediately or at any time thereafter, and with or
without notice, except as required herein, set off any money of Lessee
held by Lessor under this Lease against any sum owing by Lessee
hereunder.
(x) To seek any equitable relief available to Lessor,
including, without limitation, the right of specific performance.
All powers and remedies given by this Section to Lessor, subject to
applicable law, shall be cumulative and not exclusive of one another or of any
other right or remedy or of any other powers and remedies available to Lessor
under this Lease, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements of Lessee contained in
this Lease, and no delay or omission of Lessor to exercise any right or power
accruing upon the occurrence of any Event of Default shall impair any other or
subsequent Event of Default or impair any rights or remedies consequent thereto.
Every power and remedy given by this Section or by law to Lessor may be
exercised from time to time, and as often as may be deemed expedient, by Lessor,
subject at all times to Lessor's right in its sole judgment to discontinue any
work commenced by Lessor or change any course of action undertaken by Lessor.
If Lessee shall fail to observe or perform any of its obligations under
this Lease or in the event of an emergency, then, without waiving any Event of
Default which may result from such failure or emergency, Lessor may, but without
any obligation to do so, take all actions, including,
38
without limitation, entry upon any or all of the Properties to perform Lessee's
obligations, immediately and without notice in the case of an emergency and upon
five days written notice to Lessee in all other cases. All expenses incurred by
Lessor in connection with performing such obligations, including, without
limitation, reasonable attorneys' fees and expenses, together with interest at
the Default Rate from the date any such expenses were incurred by Lessor until
the date of payment by Lessee, shall constitute Additional Rental and shall be
paid by Lessee to Lessor upon demand.
24. LIENS; MORTGAGES, SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
Lessor's interest in this Lease and/or any of the Properties shall not be
subordinate to any liens or encumbrances placed upon any of the Properties by or
resulting from any act of Lessee, and nothing herein contained shall be
construed to require such subordination by Lessor. Lessee shall keep the
Properties free from any liens for work performed, materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE OR ALLOW TO BE PLACED ANY LIEN, MORTGAGE, DEED OF TRUST,
SECURITY INTEREST OR ENCUMBRANCE OF ANY KIND UPON ALL OR ANY PART OF ANY OF THE
PROPERTIES OR LESSEE'S LEASEHOLD INTEREST THEREIN, AND ANY SUCH PURPORTED
TRANSACTION WHICH IS NOT APPROVED BY LESSOR SHALL BE VOID. FURTHERMORE, ANY SUCH
PURPORTED TRANSACTION SHALL BE DEEMED A TORTIOUS INTERFERENCE WITH LESSOR'S
RELATIONSHIP WITH LESSEE AND LESSOR'S INTEREST IN THE PROPERTIES.
This Lease at all times shall automatically be subordinate to the
Mortgages and to the lien of any and all ground leases, mortgages, trust deeds
and deeds to secure debt now or hereafter placed upon any of the Properties by
Lessor, and Lessee covenants and agrees to execute and deliver, upon demand,
such further instruments subordinating this Lease to the lien of the Mortgages
and any or all such ground leases, mortgages, trust deeds or deeds to secure
debt as shall be desired by Lessor, or any present or proposed mortgagees or
lenders under trust deeds or deeds to secure debt, upon the condition that
Lessee shall have the right to remain in possession of the Properties under the
terms of this Lease, notwithstanding any default in the Mortgages or any or all
such ground leases, mortgages, trust deeds or deeds to secure debt or after
foreclosure of any or all such Mortgages, mortgages, trust deeds or deeds to
secure debt or termination of any or all such ground leases, so long as no Event
of Default has occurred and is continuing.
If any landlord, mortgagee, receiver, Lender or other secured party
elects to have this Lease and the interest of Lessee hereunder be superior to
any of the Mortgages or any such ground lease, mortgage, trust deed or deed to
secure debt and evidences such election by notice given to Lessee, then this
Lease and the interest of Lessee hereunder shall be deemed superior to any such
Mortgage, ground lease, mortgage, trust deed or deed to secure debt, whether
this Lease was executed before or after such Mortgage, ground lease, mortgage,
trust deed or deed to secure debt and in that event such landlord, mortgagee,
receiver, Lender or other secured party shall have the same rights with respect
to this Lease as if it had been executed and delivered prior to the execution
and delivery of such Mortgage, ground lease, mortgage, trust deed or deed to
secure debt and had been assigned to such landlord, mortgagee, receiver, Lender
or other secured party.
39
Although the foregoing provisions shall be self-operative and no future
instrument of subordination or non-disturbance shall be required, upon request
by Lessor, Lessee shall execute and deliver whatever instruments may be
reasonably required for such purposes within 10 days after demand.
In the event any purchaser or assignee of Lender at a foreclosure sale
acquires title to any of the Properties, or in the event Lender or any assignee
otherwise succeeds to the rights of Lessor as landlord under this Lease, Lessee
shall attorn to Lender or such purchaser or assignee, as the case may be (a
"Successor Lessor"), and recognize the Successor Lessor as lessor under this
Lease, and this Lease shall continue in full force and effect as a direct lease
between the Successor Lessor and Lessee, provided that the Successor Lessor
shall only be liable for any obligations of the lessor under this Lease which
accrue after the date that such Successor Lessor acquires title. The foregoing
provision shall be self operative and effective without the execution of any
further instruments.
25. ESTOPPEL CERTIFICATE. At any time, and from time to time, Lessee
shall, promptly and in no event later than 15 days after a request from Lessor
or Lender, execute, acknowledge and deliver to Lessor or Lender a certificate in
the form supplied by Lessor, Lender or any present or proposed mortgagee or
purchaser designated by Lessor, certifying: (i) that Lessee has accepted the
Properties (or, if Lessee has not done so, that Lessee has not accepted the
Properties, and specifying the reasons therefor); (ii) that this Lease is in
full force and effect and has not been modified (or if modified, setting forth
all modifications), or, if this Lease is not in full force and effect, the
certificate shall so specify the reasons therefor; (iii) the commencement and
expiration dates of the Lease Term, including the terms of any extension options
of Lessee; (iv) the date to which the rentals have been paid under this Lease
and the amount thereof then payable; (v) whether there are then any existing
defaults by Lessor in the performance of its obligations under this Lease known
to Lessee, and, if there are any such known defaults, specifying the nature and
extent thereof; (vi) that no notice has been received by Lessee of any default
under this Lease which has not been cured, except as to defaults specified in
the certificate; (vii) the capacity of the person executing such certificate,
and that such person is duly authorized to execute the same on behalf of Lessee;
(viii) that neither Lessor nor Lender has actual involvement in the management
or control of decision making related to the operational aspects or the
day-to-day operations of the Properties; and (ix) any other information
reasonably requested by Lessor, Lender or such present or proposed mortgagee or
purchaser.
26. ASSIGNMENT; SUBLETTING. A. Lessor shall have the right to sell,
convey or mortgage all, but not less than all, of the Properties or to assign
its right, title and interest as Lessor under this Lease in whole, but not in
part; provided, however, the prohibition on Lessor's right to sell, convey or
mortgage less than all of the Properties shall not restrict Lessor's right to
convey Properties to Lessee pursuant to the provisions of Sections 21.B,
23.A(ix), 57 or 58 hereof. In the event of any such sale or assignment other
than a security assignment, provided Lessee receives written notice that such
purchaser or assignee has assumed all of Lessor's obligations under this Lease,
Lessee shall attorn to such purchaser or assignee and Lessor shall be relieved,
from and after the date of such transfer or conveyance, of liability for the
performance of any obligation of Lessor contained herein, except for obligations
or liabilities accrued prior to such assignment or sale.
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B. Lessee acknowledges that Lessor has relied both on the business
experience and creditworthiness of Lessee and upon the particular purposes for
which Lessee intends to use the Properties in entering into this Lease. Without
the prior written consent of Lessor and except as provided below: (i) Lessee
shall not assign, transfer or convey this Lease or any interest therein, whether
by operation of law or otherwise; (ii) no Subject Transfer shall occur; (iii) no
interest in Lessee or any of the Guarantors shall be pledged, encumbered,
hypothecated or assigned as collateral for any obligation of any of the Lessee
Entities; and (iv) Lessee shall not sublet all or any part of any of the
Properties. It is expressly agreed that Lessor may withhold or condition such
consent based upon such matters as Lessor may in its reasonable discretion
determine, including, without limitation, the experience and creditworthiness of
any assignee, the assumption by any assignee of all of Lessee's obligations
hereunder by undertakings enforceable by Lessor, the transfer to any assignee of
all necessary licenses and franchises to continue operating the Properties for
the purposes herein provided, receipt of such representations and warranties
from any assignee as Lessor may request, including such matters as its
organization, existence, good standing and finances and other matters, whether
or not similar in kind. At the time of any assignment of this Lease which is
approved by Lessor, the assignee shall assume all of the obligations of Lessee
under this Lease pursuant to Lessor's standard form of assumption agreement. No
such assignment nor any subletting of any of the Properties shall relieve Lessee
of its obligations respecting this Lease or Guarantors of any of their
obligations respecting the Guaranty. Any rentals owing under a sublease which
are in excess of the rentals owing hereunder may be retained by Lessee unless an
Event of Default has occurred, in which case, Lessor shall be entitled to
receive such excess rentals applicable to the period during which such Event of
Default is continuing. Any assignment, transfer, conveyance, pledge, mortgage or
subletting in violation of this Section shall be voidable at the sole option of
Lessor.
C. Notwithstanding the provisions of Section 26.B, Lessor's consent to
a Subject Transfer shall not be required if each of the following conditions are
satisfied:
(i) no Event of Default shall have occurred and be continuing
under this Lease as of the date on which Lessee gives the Subject
Transfer Notice (as hereinafter defined) and as of the date on which
such Subject Transfer is consummated;
(ii) after giving effect to such Subject Transfer, whether as
a single transaction or as a series of transactions, the Lessee
Entities, including any surviving entity as a result of such Subject
Transfer and/or successor of Lessee or any of the Guarantors, shall
have a consolidated net worth determined in accordance with GAAP of not
less than the sum of (1) $29,690,500.00, plus (2) fifty (50%) percent
of Net Income, if positive, for each fiscal quarter of the Lessee
Entities ending after the Effective Date (i.e., exclusive of any
negative Net Income for any such fiscal quarter) determined on a
cumulative basis subsequent to the Effective Date, plus (3)
seventy-five (75%) percent of the proceeds of any issuance of equity
securities of any of the Lessee Entities or other contributions to the
capital of any of the Lessee Entities subsequent to the Effective Date
(the "Net Worth Condition");
(iii) Lessee and Guarantors, including any surviving entity as
a result of such Subject Transfer and/or successor of Lessee or any of
the Guarantors, shall not be released from any of their respective
obligations under this Lease and the Guaranty, and any such surviving
entity or successor entity, as applicable, has assumed in writing or by
operation
41
of law (provided Lessor has received a satisfactory opinion of counsel
confirming that such assumption will occur by operation of law) all
obligations of Lessee under this Lease or Guarantors under the
Guaranty, as applicable;
(iv) after giving effect to such Subject Transfer, whether as
a single transaction or as a series of transactions, the Lessee
Entities shall have a Corporate Fixed Charge Coverage Ratio (as
hereinafter defined) determined as of the end of Lessee's most recently
closed fiscal quarter on a proforma basis after giving effect to such
Subject Transfer of at least equal to 1.50:1 (the "Corporate Fixed
Charge Coverage Ratio Condition")
(v) after such Subject Transfer, the Properties will be
operated as a Permitted Facility or such other nationally or regionally
recognized casual dining concepts reasonably acceptable to Lessor;
(vi) the Lessee Entities, including any surviving entity as a
result of such Subject Transfer and/or successor of Lessee or any of
the Guarantors, shall have at least 5 years' experience operating a
multi-unit casual dining restaurant concept with the same or greater
number of units as are operated by the Lessee Entities immediately
prior to the consummation of such Subject Transfer;
(vii) if and to the extent that the loans contemplated by the
Loan Documents have been subject to a Securitization, Lender shall have
received a notice or confirmation of the rating agencies which have
issued ratings in connection with such Securitization that such Subject
Transfer will not cause any of such rating agencies to downgrade,
modify, withdraw or qualify any of such ratings (the "Rating Agency
Condition"); and
(viii) Lessee shall have delivered to Lessor a certification
that all of the conditions to such Subject Transfer set forth in this
Section 26.C have been satisfied.
Notwithstanding the foregoing, in the event that Lessee is unable to
satisfy the Net Worth Condition, the Corporate Fixed Charge Coverage Ratio
Condition and/or the Rating Agency Condition, such conditions shall be deemed
satisfied if Lessee shall (1) pay to Lessor the Subject Transfer Rent Prepayment
Amount (as hereinafter defined), and (2) pay to Lessor the Prepayment Charges
payable by Lessor to Lender as a result of the payment of the Subject Transfer
Rent Prepayment Amount. Upon Lessee's payment of the Subject Transfer Rent
Prepayment Amount and Prepayment Charges as contemplated by the preceding
sentence, Lessor agrees that the Base Monthly Rental beginning with the calendar
month immediately following the month in which such payment is made (or, if such
payment is made on the first day of a calendar month, beginning with the
calendar month in which such payment is made) shall be equal to the Base Monthly
Rental then in effect reduced by the Subject Transfer Rent Reduction Amount (as
hereinafter defined)
For purposes of this Section 26.C, the following terms shall be defined
as set forth below:
"Capital Lease" shall mean all leases of any
property, whether real, personal or mixed, by Lessee or any of
the other Lessee Entities, as applicable, which leases would,
in conformity with GAAP, be required to be accounted for as
42
a capital lease on the balance sheet of Lessee. The term
"Capital Lease" shall not include any operating lease.
"Corporate Fixed Charge Coverage Ratio" shall mean
with respect to the twelve month period of time immediately
preceding the date of determination, the ratio calculated for
such period of time, each as determined in accordance with
GAAP, of (a) the sum of Net Income, Depreciation and
Amortization, Interest Expense and Operating Lease Expense,
minus income taxes or charges equivalent to income taxes
allocable to the period of determination, to (b) the sum of
Operating Lease Expense, scheduled principal payments of long
term Debt, scheduled maturities of all Capital Leases and
Interest Expense (excluding non-cash interest expense and
amortization of non-cash financing expenses).
"Debt" shall mean with respect to Lessee and the
other Lessee Entities, collectively, and for the period of
determination (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, indentures, notes or similar
instruments, (iii) obligations to pay the deferred purchase
price of property or services, (iv) obligations under leases
which should be, in accordance with GAAP, recorded as Capital
Leases, and (v) obligations under direct or indirect
guarantees in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i)
through (iv) above.
"Depreciation and Amortization" shall mean the
depreciation and amortization accruing during any period of
determination with respect to Lessee and the other Lessee
Entities, collectively, as determined in accordance with GAAP.
"Interest Expense" shall mean for any period of
determination, the sum of all interest accrued or which should
be accrued in respect of all Debt of Lessee and the other
Lessee Entities, collectively, as determined in accordance
with GAAP.
"Net Income" shall mean with respect to the period of
determination, the net income or net loss of Lessee and the
other Lessee Entities, collectively. In determining the amount
of Net Income, (i) adjustments shall be made for nonrecurring
gains and losses or non-cash items allocable to the period of
determination, (ii) deductions shall be made for, among other
things, Depreciation and Amortization, Interest Expense,
Operating Lease Expense and actual corporate overhead expense
allocable to the period of determination, and (iii) no
deductions shall be made for income taxes or charges
equivalent to income taxes allocable to the period of
determination, as determined in accordance with GAAP.
"Operating Lease Expense" shall mean the sum of all
payments and expenses incurred by Lessee and the other Lessee
Entities, collectively, under any
43
operating leases during the period of determination, as
determined in accordance with GAAP.
"Subject Transfer FCCR Shortfall Percentage" means
the percentage represented by (x) 1 minus (y) a fraction, the
numerator of which shall be the Aggregate Fixed Charge
Coverage Ratio for the twelve month period of time immediately
preceding the end of the fiscal quarter of Lessee which closed
prior to the date on which Lessee gives the Subject Transfer
Notice, and the denominator of which shall be 3:1.
"Subject Transfer Rent Prepayment Amount" means the
present value, discounted on a monthly basis at 8.99% per
annum, of the Subject Transfer Rent Reduction Amount for each
month beginning with the calendar month immediately following
the month in which the Subject Transfer Rent Prepayment Amount
is paid (or, if the Subject Transfer Rent Prepayment Amount is
paid on the first day of a calendar month, beginning with the
calendar month in which the Subject Transfer Rent Prepayment
Amount is paid) and ending with the calendar month of January,
2022, inclusive.
"Subject Transfer Rent Reduction Amount" the product
of (x) the Base Monthly Rental for the last month of the
fiscal quarter of Lessee which ended prior to the date on
which Lessee gives Lessor the Subject Transfer Notice and (y)
the Subject Transfer FCCR Shortfall Percentage. For purposes
of illustration and not limitation, if (i) Lessee's Aggregate
Fixed Charge Coverage Ratio for the fiscal quarter ending June
30, 2010 was 2:1 (which results in a Subject Transfer FCCR
Shortfall Percentage of 33%), (ii) Lessee paid the Subject
Transfer Rent Prepayment Amount on August 15, 2010, and (iii)
the Base Monthly Rental for June, 2010 was $100, then the Base
Monthly Rental payment beginning on September 1, 2010 shall be
equal to the Base Monthly Rental for August, 2010 reduced by
the sum of $33.33.
Lessee shall notify Lessor and Lender at least 30 days but not more
than 90 days prior to the completion of any Subject Transfer (each, a "Subject
Transfer Notice"). Lessee shall provide Lessor and Lender with information
reasonably sufficient to enable Lessor and Lender to determine that Lessee has
satisfied the conditions to any Subject Transfer, including, without limitation,
such financial information as Lessor and Lender may reasonably require to enable
them to determine that the Net Worth Condition, Corporate Fixed Charge Coverage
Ratio Condition and/or other requirements set forth in this Section 26.C have
been satisfied, or will be satisfied simultaneously with the completion of the
Subject Transfer. In addition, to the extent that the loans contemplated by the
Loan Documents have been subject to a Securitization, Lessee agrees to cooperate
in good faith in connection with providing such information as the rating
agencies may reasonably require to evaluate any such Subject Transfer.
D. Notwithstanding the provisions of Section 26.B, Lessee shall have
the right to sublease any of the Properties, without the prior written consent
of Lessor or Lender, to any Permitted Sublessee if each of the following
conditions are satisfied:
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(1) no Event of Default shall have occurred and be continuing
under this Lease as of the effective date of the applicable sublease;
(2) any such sublease shall be subordinate to this Lease and
the Mortgage corresponding to the Property to which such sublease
relates;
(3) Lessee shall remain liable under this Lease
notwithstanding such subleases and Guarantors shall remain liable under
the Guaranty notwithstanding such subleases;
(4) the Properties subject to such subleases shall be used as
Permitted Facilities and shall otherwise be operated and maintained in
accordance with the terms and conditions of this Lease; and
(5) the form of sublease is reasonably acceptable to Lessor
and Lender.
Within 10 days after the execution of each sublease, Lessee shall
provide Lessor and Lender with a notice of such sublease and a photocopy of the
fully executed sublease.
27. OPTION TO EXTEND. Lessee shall have the option to continue this
Lease in effect for five additional successive periods of five years each,
provided that, at the time of exercise of such option or at the expiration of
the Lease Term or, if applicable, the preceding extension of the Lease Term, no
Event of Default shall have occurred and be continuing under this Lease. If
Lessee exercises such option, this Lease shall continue for the applicable
period in accordance with the terms and provisions of this Lease then in effect,
including, without limitation, adjustments in the Base Annual Rental during each
extension term in accordance with the provisions of Section 5.B.
Lessee may only exercise the first extension option by giving notice to
Lessor of Lessee's intention to do so not later than June 30, 2020. If the first
extension option is exercised by Lessee, Lessee may only exercise the second
extension option by giving notice to Lessor of Lessee's intention to do so not
later than April 30, 2026. If the first two extension options are exercised,
Lessee may only exercise the third extension option by giving notice to Lessor
of Lessee's intention to do so not later than April 30, 2031. If the first three
extension options are exercised, Lessee may only exercise the fourth extension
option by giving notice to Lessor of Lessee's intention to do so not later than
April 30, 2036. If the first four extension options are exercised, Lessee may
only exercise the fifth extension option by giving notice to Lessor of Lessee's
intention to do so not later than April 30, 2041.
Notwithstanding the foregoing, Lessee's failure to deliver notice of
the exercise of its options under this Section by the applicable outside dates
set forth above shall not terminate the applicable option unless and until
Lessor shall, following the applicable outside date, give written notice of the
applicable option to Lessee, and Lessee shall fail to exercise the applicable
option within thirty (30) days after such notice is given.
28. STATE SPECIFIC PROVISIONS. The provisions and/or remedies which are
set forth on Schedule II shall be deemed a part of and included within the terms
and conditions of this Lease.
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29. NOTICES. All notices, consents, approvals or other instruments
required or permitted to be given by either party pursuant to this Lease shall
be in writing and given by (i) hand delivery, (ii) facsimile, (iii) express
overnight delivery service or (iv) certified or registered mail, return receipt
requested, and shall be deemed to have been delivered upon (a) receipt or
refusal of the intended recipient to accept receipt, if hand delivered, (b)
electronic confirmation of transmission, if delivered by facsimile, (c) the next
Business Day, if delivered by express overnight delivery service, or (d) the
third Business Day following the day of deposit of such notice with the United
States Postal Service, if sent by certified or registered mail, return receipt
requested. Notices shall be provided to the parties and addresses (or facsimile
numbers, as applicable) specified below:
If to Lessee: Doe Family II LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx, Xx.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxx Xxxxx Carens & XxXxxxxxx, A
Limited Liability Partnership
00 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esquire
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Lessor: Double 9 Property IV LLC
c/o U.S. Realty Advisors, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as either party may from time to
time hereafter specify to the other party in a notice delivered in the manner
provided above. No such notices, consents, approvals or other communications
shall be valid unless Lender receives a duplicate original thereof at the
following address:
46
Xxxxxx X. Xxxxx, Esq.
Executive Vice President, General Counsel and Secretary
GE Capital Franchise Finance Corporation
00000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
or to such other address or such other person as Lender may from time to time
specify to Lessor and Lessee in a notice delivered in the manner provided above.
30. HOLDING OVER. If Lessee remains in possession of any of the
Properties after the expiration of the term hereof, Lessee, at Lessor's option
and within Lessor's sole discretion, may be deemed a tenant on a month-to-month
basis and shall continue to pay rentals and other sums in the amounts herein
provided, except that the Base Monthly Rental shall be automatically doubled,
and to comply with all the terms of this Lease; provided that nothing herein nor
the acceptance of rent by Lessor shall be deemed a consent to such holding over.
Lessee shall defend, indemnify, protect and hold the Indemnified Parties
harmless from and against any and all Losses resulting from Lessee's failure to
surrender possession upon the expiration of the Lease Term, including, without
limitation, any claims made by any succeeding lessee. The terms of this Section
30 shall survive the expiration of the Lease Term.
31. RIGHT OF FIRST OFFER TO PURCHASE PROPERTIES. If, during the Lease
Term, Lessor desires to sell its interest in the Properties, as a result of a
third-party offer or expression of interest from a third party (which may be
solicited by Lessor and with no requirement that an offer actually be made by
such third party), then, provided no Event of Default has occurred and is
continuing, Lessor shall give Lessee the right to purchase such interest (the
"Interest") for a price and on terms and conditions, determined by Lessor and
set forth in a notice (the "ROFO Notice") given to Lessee. Lessee shall have
thirty (30) days to elect in writing to acquire such Interest at such price and
on such terms and conditions. Lessee's silence shall be deemed a rejection of
its right to acquire such Interest. Any such election by Lessee shall only be
effective if accompanied by Lessee's payment to Lessor of a cash down payment
equal to 10% of such price. If Lessee timely and properly elects to acquire such
Interest, the closing shall take place within one hundred and twenty (120) days
after the ROFO Notice is given to Lessee. The balance of the purchase price
shall be paid in cash at closing. If Lessee does not timely elect to acquire
such Interest, Lessor shall be free to sell the Interest to any other Person
within six (6) months of Lessee's rejection or deemed rejection without being
required to comply again with the foregoing provisions of this Section, provided
that, if Lessor intends to sell the Interest (i) after such six (6) month period
or (ii) within such six (6) month period at a price less than 95% of the price
described in the ROFO Notice or on economic terms more favorable to a purchaser
than those set forth in the ROFO Notice, Lessor shall give Lessee written
notice, setting forth the applicable purchase price and terms and conditions,
and Lessee shall have thirty (30) days to elect in writing to purchase the
Interest at such purchase price and on such terms and conditions. The right of
first offer granted by this Section shall not survive the expiration or earlier
termination of this Lease or the purchase of the Properties by a third party
after Lessee's failure to exercise such right or Lessee's waiver thereof.
Furthermore, the right of first offer granted by
47
this Section shall not apply to a foreclosure of any of the Mortgages or the
delivery to Lender of a deed-in-lieu of foreclosure and shall not survive any
such foreclosure or delivery of a deed-in-lieu of foreclosure. Upon the
termination of this right of first offer, Lessee shall execute such instruments
as may be reasonably required by Lessor to provide constructive notice of the
termination thereof.
32. REMOVAL OF PERSONALTY. At the expiration of the Lease Term, and if
Lessee is not then in breach hereof, Lessee may remove all Personalty from the
Properties. Lessee shall repair any damage caused by such removal and shall
leave the Properties broom clean and in good and working condition and repair
inside and out, normal wear and tear excepted. Any property of Lessee left on
the Properties on the tenth day following the expiration of the Lease Term
shall, at Lessor's option, automatically and immediately become the property of
Lessor.
33. FINANCIAL STATEMENTS. Within 45 days after the end of each fiscal
quarter of Lessee, Lessee shall deliver to Lessor and Lender (i) complete
financial statements of Guarantors including a balance sheet, profit and loss
statement, statement of cash flows and all other related schedules for the
fiscal period then ended; and (ii) income statements for the business at each of
the Properties. Within 120 days after the end of each fiscal year of Lessee,
Lessee shall deliver to Lessor and Lender (i) complete financial statements of
Lessee and Guarantors including a balance sheet, profit and loss statement,
statement of cash flows and all other related schedules for the fiscal period
then ended; and (ii) income statements for the business at each of the
Properties. All such financial statements shall be prepared in accordance with
GAAP and shall be certified to be accurate and complete by Lessee or Guarantors,
as applicable (or the Treasurer or other appropriate officer of Lessee or
Guarantors, as applicable). Lessee understands that Lessor and Lender will rely
upon such financial statements and Lessee represents that such reliance is
reasonable. In the event that Lessee's property and business at the Properties
is ordinarily consolidated with other business for financial statement purposes,
such financial statements shall be prepared on a consolidated basis showing
separately the sales, profits and losses, assets and liabilities pertaining to
each of the Properties with the basis for allocation of overhead of other
charges being clearly set forth. The financial statements delivered to Lessor
and Lender need not be audited, but Lessee shall deliver to Lessor and Lender
copies of any audited financial statements of Lessee or Guarantors which may be
prepared, as soon as they are available.
34. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, acts of God, enemy or hostile governmental action, civil commotion,
fire or other casualty beyond the control of the party obligated to perform
shall excuse the performance by such party for a period equal to any such
prevention, delay or stoppage, except the obligations imposed with regard to
rental and other monies to be paid by Lessee pursuant to this Lease and any
indemnification obligations imposed upon Lessee under this Lease.
35. TIME IS OF THE ESSENCE. Time is of the essence with respect to each
and every provision of this Lease in which time is a factor.
36. LIABILITY. A. Notwithstanding anything to the contrary provided in
this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that (i) there
shall be absolutely no personal liability on the
48
part of Lessor, its successors or assigns and the trustees, members, partners,
shareholders, officers, directors, employees and agents of Lessor and its
successors or assigns, to Lessee with respect to any of the terms, covenants and
conditions of this Lease, (ii) Lessee waives all claims, demands and causes of
action against the trustees, members, partners, shareholders, officers,
directors, employees and agents of Lessor and its successors or assigns in the
event of any breach by Lessor of any of the terms, covenants and conditions of
this Lease to be performed by Lessor, and (iii) Lessee shall look solely to the
Properties for the satisfaction of each and every remedy of Lessee in the event
of any breach by Lessor of any of the terms, covenants and conditions of this
Lease to be performed by Lessor, or any other matter in connection with this
Lease or the Properties, such exculpation of liability to be absolute and
without any exception whatsoever.
B. Notwithstanding anything to the contrary provided in this Lease, it
is specifically understood and agreed, such agreement being a primary
consideration for the execution of this Lease by Lessee, that (i) there shall be
absolutely no personal liability on the part of any members, partners,
shareholders, officers, directors and employees of Lessee to Lessor with respect
to any of the terms, covenants and conditions of this Lease, and (ii) Lessor
waives all claims, demands and causes of action against the members, partners,
shareholders, officers, directors and employees of Lessee in the event of any
breach by Lessee of any of the terms, covenants and conditions of this Lease to
be performed by Lessee, such exculpation of liability to be absolute and without
any exception whatsoever.
37. CONSENT OF LESSOR. (a) Unless specified otherwise herein, Lessor's
consent to any request of Lessee may be conditioned or withheld in Lessor's sole
discretion. Lessor shall have no liability for damages resulting from Lessor's
failure to give any consent, approval or instruction reserved to Lessor,
Lessee's sole remedy in any such event being an action for injunctive relief.
(b) It is understood and agreed that to the extent Lessor is required
to obtain the consent, approval, agreement or waiver of Lender with respect to a
matter for which Lessor's approval has been requested under this Lease, Lessor
shall in no event be deemed to have unreasonably withheld Lessor's consent,
approval, agreement or waiver thereof if Lender shall not have given its
approval if required.
38. WAIVER AND AMENDMENT. No provision of this Lease shall be deemed
waived or amended except by a written instrument unambiguously setting forth the
matter waived or amended and signed by the party against which enforcement of
such waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion. No acceptance by
Lessor of an amount less than the monthly rent and other payments stipulated to
be due under this Lease shall be deemed to be other than a payment on account of
the earliest such rent or other payments then due or in arrears nor shall any
endorsement or statement on any check or letter accompanying any such payment be
deemed a waiver of Lessor's right to collect any unpaid amounts or an accord and
satisfaction.
39. SUCCESSORS BOUND. Except as otherwise specifically provided herein,
the terms, covenants and conditions contained in this Lease shall bind and inure
to the benefit of the respective heirs, successors, executors, administrators
and assigns of each of the parties hereto.
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40. NO MERGER. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not result in a merger of
Lessor's and Lessee's estates, and shall, at the option of Lessor, either
terminate any or all existing subleases or subtenancies, or operate as an
assignment to Lessor of any or all of such subleases or subtenancies.
41. CAPTIONS. Captions are used throughout this Lease for convenience
of reference only and shall not be considered in any manner in the construction
or interpretation hereof.
42. SEVERABILITY. The provisions of this Lease shall be deemed
severable. If any part of this Lease shall be held unenforceable by any court of
competent jurisdiction, the remainder shall remain in full force and effect, and
such unenforceable provision shall be reformed by such court so as to give
maximum legal effect to the intention of the parties as expressed therein.
43. CHARACTERIZATION. A. It is the intent of the parties hereto that
the business relationship created by this Lease and any related documents is
solely that of a long-term commercial lease between landlord and tenant and has
been entered into by both parties in reliance upon the economic and legal
bargains contained herein. None of the agreements contained herein, is intended,
nor shall the same be deemed or construed, to create a partnership between
Lessor and Lessee, to make them joint venturers, to make Lessee an agent, legal
representative, partner, subsidiary or employee of Lessor, nor to make Lessor in
any way responsible for the debts, obligations or losses of Lessee.
X. Xxxxxx and Lessee acknowledge and warrant to each other that each
has been represented by independent counsel and has executed this Lease after
being fully advised by said counsel as to its effect and significance. This
Lease shall be interpreted and construed in a fair and impartial manner without
regard to such factors as the party which prepared the instrument, the relative
bargaining powers of the parties or the domicile of any party. Whenever in this
Lease any words of obligation or duty are used, such words or expressions shall
have the same force and effect as though made in the form of a covenant.
44. EASEMENTS. During the Lease Term, Lessor agrees to grant such
utility, access or other similar easements on, over, under and above any of the
Properties as Lessee may request, provided that such easements are reasonably
required for the operation of such Property as a Permitted Facility and will not
decrease the value of such Property.
45. BANKRUPTCY. A. As a material inducement to Lessor executing this
Lease, Lessee acknowledges and agrees that Lessor is relying upon (i) the
financial condition and specific operating experience of Lessee and Lessee's
obligation to use each of the Properties specifically in accordance with
system-wide requirements imposed from time to time on Permitted Facilities, (ii)
Lessee's timely performance of all of its obligations under this Lease
notwithstanding the entry of an order for relief under the Code for Lessee and
(iii) all defaults under this Lease as to all Properties being cured promptly
and this Lease being assumed within 60 days of any order for relief entered
under the Code for Lessee, or this Lease being rejected within such 60 day
period and the Properties surrendered to Lessor.
Accordingly, in consideration of the mutual covenants contained in this
Lease and for other good and valuable consideration, Lessee hereby agrees that:
50
(i) All obligations that accrue under this Lease (including
the obligation to pay rent), from and after the date that an Action is
commenced shall be timely performed exactly as provided in this Lease
and any failure to so perform shall be harmful and prejudicial to
Lessor;
(ii) Any and all obligations under this Lease that become due
from and after the date that an Action is commenced and that are not
paid as required by this Lease shall, in the amount of such rents,
constitute administrative expense claims allowable under the Code with
priority of payment at least equal to that of any other actual and
necessary expenses incurred after the commencement of the Action;
(iii) Any extension of the time period within which Lessee may
assume or reject this Lease without an obligation to cause all
obligations coming due under this Lease from and after the date that an
Action is commenced to be performed as and when required under this
Lease shall be harmful and prejudicial to Lessor;
(iv) Any time period designated as the period within which
Lessee must cure all defaults and compensate Lessor for all pecuniary
losses which extends beyond the date of assumption of this Lease shall
be harmful and prejudicial to Lessor;
(v) Any assignment of this Lease must result in all terms and
conditions of this Lease being assumed by the assignee without
alteration or amendment, and any assignment which results in an
amendment or alteration of the terms and conditions of this Lease
without the express written consent of Lessor shall be harmful and
prejudicial to Lessor;
(vi) Any proposed assignment of this Lease to an assignee: (a)
that will not use the Properties specifically in accordance with a
franchise, license and/or area development agreement with the
franchisor of Permitted Facilities, (b) that does not possess financial
condition, operating performance and experience characteristics equal
to or better than the financial condition, operating performance and
experience of Lessee as of the Effective Date, or (c) that does not
provide guarantors of the Lease obligations with financial condition
equal to or better than the financial condition of Guarantors as of the
Effective Date, shall be harmful and prejudicial to Lessor;
(vii) The rejection (or deemed rejection) of this Lease for
any reason whatsoever shall constitute cause for immediate relief from
the automatic stay provisions of the Code, and Lessee stipulates that
such automatic stay shall be lifted immediately and possession of the
Properties will be delivered to Lessor immediately without the
necessity of any further action by Lessor; and
(viii) This Lease shall at all times be treated as consistent
with the specific characterizations set forth in Section 3 of this
Lease, and assumption or rejection of this Lease shall be (a) in its
entirety, (b) for all of the Properties, and (c) in strict accordance
with the specific terms and conditions of this Lease.
B. No provision of this Lease shall be deemed a waiver of Lessor's
rights or remedies under the Code or applicable law to oppose any assumption
and/or assignment of this Lease, to require timely performance of Lessee's
obligations under this Lease, or to regain
51
possession of the Properties as a result of the failure of Lessee to comply with
the terms and conditions of this Lease or the Code.
C. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Lessee to or on behalf of Lessor under this Lease, whether or not
expressly denominated as such, shall constitute "rent" for the purposes of the
Code.
D. For purposes of this Section addressing the rights and obligations
of Lessor and Lessee in the event that an Action is commenced, the term "Lessee"
shall include Lessee's successor in bankruptcy, whether a trustee, Lessee as
debtor in possession or other responsible person.
46. NO OFFER. No contractual or other rights shall exist between Lessor
and Lessee with respect to the Properties until both have executed and delivered
this Lease, notwithstanding that deposits may have been received by Lessor and
notwithstanding that Lessor may have delivered to Lessee an unexecuted copy of
this Lease. The submission of this Lease to Lessee shall be for examination
purposes only, and does not and shall not constitute a reservation of or an
option for Lessee to lease or otherwise create any interest on the part of
Lessee in the Properties.
47. OTHER DOCUMENTS. Each of the parties agrees to sign such other and
further documents as may be necessary or appropriate to carry out the intentions
expressed in this Lease.
48. ATTORNEYS' FEES. In the event of any judicial or other adversarial
proceeding between the parties concerning this Lease, to the extent permitted by
law, the prevailing party shall be entitled to recover all of its reasonable
attorneys' fees and other costs in addition to any other relief to which it may
be entitled. In addition, Lessor shall, upon demand, be entitled to all
attorneys' fees and all other costs incurred in the preparation and service of
any notice or demand hereunder, whether or not a legal action is subsequently
commenced. References in this Lease to Lessor's attorneys' fees and/or costs
shall mean both the fees and costs of independent counsel retained by Lessor
with respect to the matter and the fees and costs of Lessor's in-house counsel
incurred in connection with the matter.
49. ENTIRE AGREEMENT. This Lease and any other instruments or
agreements referred to herein, constitute the entire agreement between the
parties with respect to the subject matter hereof, and there are no other
representations, warranties or agreements except as herein provided. Without
limiting the foregoing, Lessee specifically acknowledges that neither Lessor nor
any agent, officer, employee or representative of Lessor has made any
representation or warranty regarding the projected profitability of the business
to be conducted on the Properties. Furthermore, Lessee acknowledges that Lessor
did not prepare or assist in the preparation of any of the projected figures
used by Lessee in analyzing the economic viability and feasibility of the
business to be conducted by Lessee at the Properties.
50. FORUM SELECTION; JURISDICTION; VENUE; CHOICE OF LAW. Lessee
acknowledges that this Lease was partially negotiated in the State of Arizona,
this Lease was partially executed in the State of Arizona and delivered in the
State of Arizona, all payments under this Lease will be delivered in the State
of Arizona (unless otherwise directed by Lessor or its successors) and there
52
are substantial contacts between the parties and the transactions contemplated
herein and the State of Arizona. For purposes of any action or proceeding
arising out of this Lease, the parties hereto expressly submit to the
jurisdiction of all federal and state courts located in the State of Arizona.
Lessee and Lessor consent that they may be served with any process or paper in
accordance with the laws of the State of Arizona; provided, however, no such
service of process or paper shall be deemed delivered pursuant to Section 29
hereof if not actually received. Furthermore, Lessee and Lessor waive and agree
not to assert in any such action, suit or proceeding that they are not
personally subject to the jurisdiction of such courts, that the action, suit or
proceeding is brought in an inconvenient forum or that venue of the action, suit
or proceeding is improper. The creation of this Lease and the rights and
remedies of Lessor with respect to the Properties, as provided herein and by the
laws of the states in which the Properties are located, as applicable, shall be
governed by and construed in accordance with the internal laws of the states in
which the Properties are located, as applicable, without regard to principles of
conflicts of law. With respect to other provisions of this Lease, this Lease
shall be governed by the internal laws of the State of Arizona, without regard
to its principles of conflicts of law. Nothing contained in this Section shall
limit or restrict the right of Lessor or Lessee to commence any proceeding in
the federal or state courts located in the states in which the Properties are
located to the extent Lessor or Lessee deems such proceeding necessary or
advisable to exercise remedies available under this Lease.
51. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall be deemed an original.
52. MEMORANDUM OF MASTER LEASE. Concurrently with the execution of this
Lease, Lessor and Lessee are executing the Memorandum to be recorded in the
applicable real property records with respect to each of the Properties.
53. NO BROKERAGE. Lessor and Lessee represent and warrant to each other
that they have had no conversation or negotiations with any broker concerning
the leasing of the Properties. Each of Lessor and Lessee agrees to protect,
indemnify, save and keep harmless the other, against and from all liabilities,
claims, losses, costs, damages and expenses, including attorneys' fees, arising
out of, resulting from or in connection with their breach of the foregoing
warranty and representation. Lessee has been advised by Xxxxxxx Xxxxx &
Associates, Inc., whose fees shall be paid by Lessee.
54. WAIVER OF JURY TRIAL AND PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES. LESSOR AND LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO
ANY AND ALL ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR ITS SUCCESSORS WITH
RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE
RELATIONSHIP OF LESSOR AND LESSEE, LESSEE'S USE OR OCCUPANCY OF ANY OF THE
PROPERTIES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY
REMEDY. THIS WAIVER BY THE PARTIES HERETO OF ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY HAS BEEN NEGOTIATED AND IS AN ESSENTIAL ASPECT OF THEIR BARGAIN.
FURTHERMORE, LESSOR AND
53
LESSEE HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER
MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM THE
OTHER PARTY AND ANY OF SUCH OTHER PARTY'S AFFILIATES, OFFICERS, DIRECTORS,
MEMBERS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY AND ALL
ISSUES PRESENTED IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY A
PARTY AGAINST THE OTHER PARTY OR ANY OF SUCH OTHER PARTY'S AFFILIATES, OFFICERS,
DIRECTORS, MEMBERS OR EMPLOYEES OR ANY OF THEIR SUCCESSORS WITH RESPECT TO ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO, EXCEPT THAT SUCH WAIVER ON THE PART OF
LESSOR SHALL NOT BE DEEMED TO LIMIT, REDUCE OR PRECLUDE IN ANY WAY LESSOR'S
REMEDIES PURSUANT TO SECTION 23 HEREOF. THE RECIPROCAL WAIVERS BY LESSOR AND
LESSEE OF ANY RIGHT EITHER MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND
INDIRECT DAMAGES HAS BEEN NEGOTIATED BY THE PARTIES HERETO AND IS AN ESSENTIAL
ASPECT OF THEIR BARGAIN.
55. RELIANCE BY LENDER. Lessee acknowledges and agrees that Lender may
rely on all of the representations, warranties and covenants set forth in this
Lease, that Lender is an intended third-party beneficiary of such
representations, warranties and covenants and that Lender shall have all rights
and remedies available at law or in equity as a result of a breach of such
representations, warranties and covenants, including to the extent applicable,
the right of subrogation.
56. DOCUMENT REVIEW. In the event Lessee makes any request upon Lessor
requiring Lessor, Lender or the attorneys of Lessor or Lender to review and/or
prepare (or cause to be reviewed and/or prepared) any documents, plans,
specifications or other submissions in connection with or arising out of this
Lease, then Lessee shall reimburse Lessor or its designee promptly upon Lessor's
demand therefor for all reasonable out-of-pocket costs and expenses incurred by
Lessor in connection with such review and/or preparation plus a reasonable
processing and review fee.
57. SUBSTITUTION. A. Subject to the fulfillment of all of the
conditions set forth in the following subsection B, Lessee shall have the right
to deliver a rejectable offer to Lessor (each, a "Rejectable Substitution
Offer") to substitute a Substitute Property for a Property if:
(i) the terms of Section 21.B of this Lease require a
Rejectable Substitution Offer to be made (each, a
"Casualty/Condemnation Substitution"); or
(ii) the terms of Section 23.A(ix)(1) of this Lease permit a
Rejectable Substitution Offer to be made (each, a "FCCR Substitution").
From and after the third anniversary of the Effective Date and subject
to the fulfillment of all of the conditions set forth in the following
subsection B, Lessee shall also have the right to deliver a Rejectable
Substitution Offer to substitute a Substitute Property for a Property if Lessee
determines for any reason to make a substitution (each, a "Discretionary
Substitution"); provided, however, that once Lessee has done
Casualty/Condemnation Substitutions,
54
Discretionary Substitutions and/or FCCR Substitutions for one Property, Lessee
shall no longer have the right to deliver a Rejectable Substitution Offer with
respect to a Discretionary Substitution.
Each Rejectable Substitution Offer shall identify the proposed
Substitute Property in reasonable detail and contain a certificate executed by a
duly authorized officer of Lessee pursuant to which Lessee shall certify that in
Lessee's good faith judgment such proposed Substitute Property satisfies as of
the date of such notice, or will satisfy as of the date of the closing of such
substitution, all of the applicable conditions to substitution set forth in this
Section 57. Lessee agrees to deliver to Lessor all of the diligence information
and materials contemplated by the provisions of Section 57.B of this Lease
within 30 days after the delivery to Lessor of a Rejectable Substitution Offer.
Lessor shall have 90 days from the delivery of a Rejectable
Substitution Offer notice satisfying the requirements of the preceding paragraph
to deliver to Lessee written notice of its election to either accept or reject
the Rejectable Substitution Offer. Lessor's failure to deliver such notice
within such time period shall be deemed to constitute Lessor's acceptance of the
Rejectable Substitution Offer. If the Mortgage corresponding to the Property to
be replaced is still outstanding, any rejection of the Rejectable Substitution
Offer by Lessor shall not be effective unless it is consented to in writing by
Lender. If Lessor accepts the Rejectable Substitution Offer or is deemed to have
accepted the Rejectable Substitution Offer or if Lender does not consent in
writing to any rejection of the Rejectable Substitution Offer by Lessor, then
Lessee shall complete such substitution, subject, however, to the satisfaction
of each of the applicable terms and conditions set forth in this Section 57.
If Lessor rejects the Rejectable Substitution Offer pursuant to the
previous paragraph for reasons other than that, in Lessor's reasonable judgment,
the proposed Substitute Property would not have satisfied the applicable
substitution conditions set forth in this Section 57, and such rejection is
consented to by Lender, then:
(X) if such rejected Rejectable Substitution Offer was made
with respect to a Casualty/Condemnation Substitution, the provisions of
the last paragraph of Section 21.B and the last sentence of the second
paragraph of Section 21.B shall be applicable; and
(Y) if such rejected Rejectable Substitution Offer was made
with respect to a FCCR Substitution or a Discretionary Substitution,
this Lease shall terminate with respect to the Property which Lessee
proposed to replace on the next scheduled Base Monthly Rental payment
date (the "Early Substitution Termination Date") provided Lessee has
paid to Lessor all Base Annual Rental, Additional Rental and all other
sums and obligations then due and payable under this Lease as of such
Early Substitution Termination Date. On the Early Substitution
Termination Date, and provided Lessee shall have paid to Lessor all
Base Annual Rental, Additional Rental and other sums and obligations
then due and payable under this Lease as of the Early Substitution
Termination Date:
(i) the Base Annual Rental then in effect shall be
reduced by an amount equal to the product of (x) the
Applicable Rent Reduction Percentage for the
55
Property which Lessee proposed to replace, and (y) the Base
Annual Rental then in effect; and
(ii) all obligations of Lessor and Lessee shall cease
as of the Early Substitution Termination Date with respect to
such Property; provided, however, Lessee's obligations to
Lessor with respect to such Property under any indemnification
provisions of this Lease with respect to such Property
(including, without limitation, Sections 16 and 19 of this
Lease) and Lessee's obligations to pay any sums (whether
payable to Lessor or a third party) accruing under this Lease
with respect to such Property prior to the Early Substitution
Termination Date shall survive the termination of this Lease
with respect to such Property or otherwise. This Lease shall,
however, continue in full force and effect with respect to all
other Properties.
B. The substitution of a Substitute Property for a Property pursuant to
the preceding subsection A shall be subject to the fulfillment of all of the
following terms and conditions:
(i) The Substitute Property must:
(1) be a Permitted Facility, in good condition and
repair, ordinary wear and tear excepted;
(2) have a Fixed Charge Coverage Ratio (with the
definitions of Section 8.A being deemed to be modified, as
contemplated by the following sentence to provide for a
calculation of an individual "Fixed Charge Coverage Ratio" for
the Substitute Property only) for the FCCR Period of not less
than the Fixed Charge Coverage Ratio for the Property to be
replaced for such FCCR Period; provided that, with respect to
each FCCR Substitution, the Fixed Charge Coverage Ratio for
the Substitute Property for such FCCR Period must also be high
enough (after taking into account any other substitutions for
Properties which are being consummated simultaneously
therewith) to result in a cure of the breach of the Aggregate
Fixed Charge Coverage Ratio requirement (it being understood
and agreed that the determination of the Fixed Charge Coverage
Ratio for the Substitute Property shall be based on an
assumption that the Operating Lease Expense for the Substitute
Property would be the same amount as the Operating Lease
Expense for the Property to be replaced, as determined in
accordance with the last sentence of this subitem (2)). For
purposes of this subitem (2), the definitions set forth in
Section 8.A of this Lease with respect to the calculation of
the Aggregate Fixed Charge Coverage Ratio shall be deemed
modified as applicable to provide for the calculation of a
Fixed Charge Coverage Ratio for each Property on an individual
basis rather than on an aggregate basis with the other
Properties. For purposes of such calculation, the Operating
Lease Expense with respect to this Lease for each such
Property shall equal the product of (x) the Applicable Rent
Reduction Percentage for such Property, and (y) the Base
Annual Rental then in effect;
56
(3) have a fair market value no less than the greater
of the then fair market value of the Property being replaced
or the fair market value of such Property as of the Effective
Date (in each case, determined without regard to this Lease,
but assuming that while this Lease has been in effect, Lessee
has complied with all of the terms and conditions of this
Lease), as determined by Lessor, and consented to by Lender,
utilizing the same valuation method as used in connection with
the closing of the transaction described in the Sale-Leaseback
Agreement, which was based upon the sum of (x) the fair market
value of the land comprising such Property and (y) the
replacement cost of the improvements located thereon;
(4) have improvements which have a remaining useful
life substantially equivalent to, or better than, that of the
improvements located at the Property to be replaced;
(5) be conveyed to Lessor (or, if directed by Lessor,
to Lessor and a person designated to acquire the remainderman
interest) by special or limited warranty deed, free and clear
of all liens and encumbrances, except such matters as are
reasonably acceptable to Lessor (the "Substitute Property
Permitted Exceptions"); and
(6) be located in either (a) the same state as the
Property to be replaced is then located, or (b) in another
state acceptable to Lessor in Lessor's reasonable discretion;
(ii) Lessor shall have inspected and approved the Substitute
Property utilizing Lessor's customary site inspection and underwriting
approval criteria. Lessee shall have reimbursed Lessor and Lender for
all of their reasonable costs and expenses incurred with respect to
such proposed substitution, including, without limitation, Lessor's
third-party and/or in-house site inspectors' costs and expenses with
respect to the proposed Substitute Property. Lessee shall be solely
responsible for the payment of all costs and expenses resulting from
such proposed substitution, regardless of whether such substitution is
consummated, including, without limitation, the cost of title insurance
and endorsements for both Lessor and Lender, survey charges, stamp
taxes, mortgage taxes, transfer fees, escrow and recording fees, the
cost of environmental due diligence undertaken pursuant to subsection
(v) below, including, without limitation, the cost of environmental
insurance, income and transfer taxes imposed on Lessor as a result of
such substitution and the reasonable attorneys' fees and expenses of
counsel to Lessee, Lessor and Lender;
(iii) Lessor shall have received a preliminary title report
and irrevocable commitment to insure title by means of an ALTA extended
coverage owner's policy of title insurance (or its equivalent, in the
event such form is not issued in the jurisdiction where the proposed
Substitute Property is located) for the proposed Substitute Property
issued by Title Company and committing to insure Lessor's good and
marketable title in the proposed Substitute Property, subject only to
the Substitute Property Permitted Exceptions and containing
endorsements substantially comparable to those required by Lessor at
the Closing (as defined in the Sale-Leaseback Agreement) and Lender
shall have received such title
57
report and irrevocable commitment to insure its first priority lien
encumbering the proposed Substitute Property as Lender shall reasonably
require;
(iv) Lessor shall have received a current ALTA survey of the
proposed Substitute Property, the form of which shall be comparable to
those received by Lessor at the Closing and sufficient to cause the
standard survey exceptions set forth in the title policy referred to in
the preceding subsection to be deleted;
(v) Lessor shall have completed such environmental due
diligence of the proposed Substitute Property as it deems necessary or
advisable in its sole discretion, including, without limitation,
receiving an environmental insurance policy with respect to such
proposed Substitute Property, or to the extent applicable, an
endorsement to the Environmental Policies, in form and substance and
issued by such environmental insurance company as is acceptable to
Lessor in its sole discretion, and Lessor shall have approved the
environmental condition of the proposed Substitute Property in its sole
discretion;
(vi) Lessee shall deliver, or cause to be delivered, with
respect to Lessee and the Substitute Property, opinions of Counsel (as
defined in the Sale-Leaseback Agreement) in form and substance
comparable to those received at Closing (but also addressing such
matters unique to the Substitute Property as may be reasonably required
by Lessor);
(vii) no Event of Default shall have occurred and be
continuing under any of the Sale-Leaseback Documents;
(viii) Lessee shall have executed such documents as may be
reasonably required by Lessor as a result of such substitution,
including amendments to this Lease and the Memorandum (the "Substitute
Documents"), all of which documents shall be in form and substance
reasonably satisfactory to Lessor;
(ix) the representations and warranties set forth in the
Substitute Documents, this Lease and the Sale-Leaseback Agreement
applicable to the proposed Substitute Property shall be true and
correct in all material respects as of the date of substitution, and
Lessee shall have delivered to Lessor an officer's certificate
certifying to that effect;
(x) Lessee shall have delivered to Lessor certificates of
insurance showing that insurance required by the Substitute Documents
is in full force and effect;
(xi) Lessor shall have obtained an endorsement to the policy
of residual value insurance issued to Lessor and Lender in connection
with the transaction described in the Sale-Leaseback Agreement with
respect to the proposed Substitute Property, which endorsement shall be
in form and substance reasonably satisfactory to Lessor and Lender;
(xii) Lender shall have consented to the substitution of the
proposed Substitute Property; and
(xiii) the date of the closing of the substitution shall occur
no later than 20 days after the date of acceptance (or deemed
acceptance) by Lessor of the Rejectable Substitution Offer.
58
C. Upon satisfaction of the foregoing conditions set forth in Section
57.B and provided Lessor has accepted the Rejectable Substitution Offer or is
deemed to have accepted the Rejectable Substitution Offer, or while the Mortgage
corresponding to such Property is still outstanding, any rejection of the
Rejectable Substitution Offer by Lessor is not consented to in writing by the
Lender:
(i) the proposed Substitute Property shall be deemed
substituted for the Property to be replaced;
(ii) the Substitute Property shall be referred to herein as a
"Property" and included within the definition of "Properties";
(iii) the Substitute Documents shall be dated as of the date
of the substitution; and
(iv) Lessor shall convey the Property to be replaced to Lessee
or a designee of Lessee "as-is" by quit-claim deed, subject to all
matters of record (except for the Mortgage corresponding to the
Property to be replaced and any other consensual liens granted by
Lessor other than those granted by Lessor at the request of Lessee),
and without representation or warranty.
D. Notwithstanding the foregoing, nothing in this Section 57 shall be
construed as limiting or otherwise adversely affecting the representations,
warranties, covenants and characterizations set forth in Lease, including,
without limitation, those provisions set forth in Section 3 of this Lease.
58. REJECTABLE PURCHASE OFFER. A. If Lessor shall have given Lessee
notice of a breach of the Aggregate Fixed Charge Coverage Ratio requirement
under this Lease, Lessee shall have the right to deliver a rejectable offer to
Lessor (a "Rejectable Purchase Offer") to purchase such of the Properties as is
contemplated by Section 23.A(ix)(2), subject to the fulfillment of all of the
conditions set forth in this Section 58.
Lessor shall have 90 days from the delivery of the Rejectable Purchase
Offer notice to deliver to Lessee written notice of its election to either
accept or reject the Rejectable Purchase Offer. Lessor's failure to deliver such
notice within such time period shall be deemed to constitute Lessor's acceptance
of the Rejectable Purchase Offer. If the Mortgage corresponding to the Property
to be purchased is still outstanding, any rejection of the Rejectable Purchase
Offer by Lessor shall not be effective unless it is consented to in writing by
Lender. If Lessor accepts the Rejectable Purchase Offer or is deemed to have
accepted the Rejectable Purchase Offer or if Lender does not consent in writing
to any rejection of the Rejectable Purchase Offer by Lessor, then Lessee shall
complete such purchase, subject, however, to the satisfaction of each of the
terms and conditions set forth in the following subsection B.
If Lessor rejects the Rejectable Purchase Offer pursuant to the
previous paragraph, and such rejection is consented to by Lender, this Lease
shall terminate with respect to the Property which Lessee proposed to purchase
on the next scheduled Base Monthly Rental payment date (the "Early Purchase
Termination Date") provided Lessee has paid to Lessor all Base Annual Rental,
Additional Rental and all other sums and obligations then due and payable under
this
59
Lease as of such Early Purchase Termination Date. On the Early Purchase
Termination Date, and provided Lessee shall have paid to Lessor all Base Annual
Rental, Additional Rental and other sums and obligations then due and payable
under this Lease as of the Early Purchase Termination Date:
(1) the Base Annual Rental then in effect shall be reduced by
an amount equal to the product of (x) the Applicable Rent Reduction
Percentage for the Property which Lessee proposed to purchase, and (y)
the Base Annual Rental then in effect; and
(2) all obligations of Lessor and Lessee shall cease as of the
Early Purchase Termination Date with respect to such Property;
provided, however, Lessee's obligations to Lessor with respect to such
Property under any indemnification provisions of this Lease with
respect to such Property (including, without limitation, Sections 16
and 19 of this Lease) and Lessee's obligations to pay any sums (whether
payable to Lessor or a third party) accruing under this Lease with
respect to such Property prior to the Early Purchase Termination Date
shall survive the termination of this Lease with respect to such
Property or otherwise. This Lease shall, however, continue in full
force and effect with respect to all other Properties.
B. The purchase of a Property pursuant to the preceding subsection A
shall be subject to the fulfillment of all of the following terms and
conditions:
(i) no Event of Default shall have occurred and be continuing
under any of the Sale-Leaseback Documents;
(ii) Lessee shall have delivered to Lessor a certificate
executed by a duly authorized officer of Lessee certifying to Lessor
that Lessee does not own any properties which are available for
substitution and which meet the applicable requirements for
substitution set forth in Section 57;
(iii) the purchase of such Property (together with any other
Properties which are being purchased simultaneously therewith) must
result in a cure of the breach of the Aggregate Fixed Charge Coverage
Ratio requirement;
(iv) Lessee shall have paid to Lessor the Subject Purchase
Price (as defined below), together with all Base Annual Rental,
Additional Rental and other sums and obligations then due and payable
under this Lease as of the date of the closing of such purchase;
(v) Lessee shall be solely responsible for the payment of all
costs and expenses resulting from such proposed purchase, regardless of
whether the purchase is consummated, including, without limitation, to
the extent applicable, the cost of title insurance and endorsements,
including, survey charges, stamp taxes, mortgage taxes, transfer taxes
and fees, escrow and recording fees, taxes imposed on Lessor as a
result of such purchase, the attorneys' fees of Lessee and the
reasonable attorneys' fees and expenses of counsel to Lessor and
Lender; and
60
(vi) the date of the closing of such purchase shall occur on
the next scheduled Base Monthly Rental payment date following Lessor's
acceptance (or deemed acceptance) of the Rejectable Purchase Offer, but
in no event later than 20 days after the date of acceptance (or deemed
acceptance) by Lessor of such Rejectable Purchase Offer.
On the date of the closing of the purchase of a Property pursuant to
this Section (the "Rejectable Purchase Closing Date"), subject to satisfaction
of the foregoing conditions:
(1) this Lease shall be deemed terminated with respect to such
Property only, but this Lease shall continue in full force and effect
with respect to all of the other Properties; provided, however, such
termination shall not limit Lessee's obligations to Lessor with respect
to such Property under any indemnification provisions of this Lease
(including, without limitation, Sections 16 and 19 of this Lease) and
Lessee's obligations to pay any sums (whether payable to Lessor or a
third party) accruing under this Lease with respect to such Property
prior to the Rejectable Purchase Closing Date shall survive the
termination of this Lease;
(2) the Base Annual Rental shall be reduced for each such
Property by an amount equal to the product of (x) the Applicable Rent
Reduction Percentage for such Property and (y) the Base Annual Rental
then in effect; and
(3) Lessor shall convey such Property to Lessee "as-is" by
quit-claim deed, subject to all matters of record (except for the
Mortgage corresponding to the Property to be purchased and any other
consensual liens granted by Lessor other than those granted by Lessor
at the request of Lessee), and without representation or warranty.
For purposes of this Section 58, the term "Subject Purchase
Price" shall mean the product of the percentage specified on Schedule I
attached hereto which corresponds to the time period during which such
purchase occurs multiplied by the Purchase Price for the Property being
purchased.
59. SPACE LEASES. Lessor hereby assigns to Lessee all of Lessor's
right, title and interest as landlord under the Space Leases, which Space Leases
shall be subleases of the applicable Properties on the terms and conditions set
forth in the Space Leases. Lessee shall fulfill, perform and observe in all
respects, at its own cost and expense, each and every condition and covenant of
the lessor in each Space Lease and give prompt notice to Lessor of any claim or
event of default under any Space Lease given to Lessee by any Space Lessee or
given by Lessee to any Space Lessee, together with a complete copy or statement
of any information submitted or referenced in support of such claim or event of
default. Lessor agrees that the Space Leases are not subject to the consent
requirements set forth in Section 26.B, provided that, Lessee shall not be
relieved of any of its obligations with respect to this Lease by reason of the
Space Leases.
61
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as
of the date first above written.
LESSOR:
DOUBLE 9 PROPERTY IV LLC,
a Delaware limited
liability company
By Double 9 Equity
IV LLC, a
Delaware limited
liability
company, its
member manager
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Xxxxx Xxxxxxxx
Its Vice President,
Assistant Secretary and
Assistant Treasurer
LESSEE:
DOE FAMILY II LLC, a Massachusetts
limited liability company
By: /s/ Xxxxxxx X. Xxx, Xx.
------------------------------
Xxxxxxx X. Xxx, Xx.
A Manager
Lessee's Tax Identification Number:
00-0000000
STATE OF ARIZONA ]
] SS.
COUNTY OF MARICOPA ]
The foregoing instrument was acknowledged before me on December 3, 2001
by Xxxxx Xxxxxxxx, Vice President, Assistant Secretary and Assistant Treasurer
of Double 9 Equity IV LLC, a Delaware limited liability company, member manager
of Double 9 Property IV LLC, a Delaware limited liability company, on behalf of
the limited liability company.
/s/ Xxxxxxx X. Xxxxxx
------------------------------
Notary Public
My Commission Expires:
11/21/03
STATE OF MASSACHUSETTS ]
] SS.
COUNTY OF MIDDLESEX ]
The foregoing instrument was acknowledged before me on November 16th,
2001 by Xxxxxxx X. Xxx, Xx., a Manager of Doe Family II LLC, a Massachusetts
limited liability company, on behalf of the limited liability company.
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Notary Public
My Commission Expires:
March 26, 2006
EXHIBIT A
Properties
Pool 4
EXHIBIT A
FFC # STORE # ADDRESS CITY COUNTY STATE
----- ------- ------- ---- ------ -----
8001-3344 2039 821 Fall Xxxxx Xxxxxx Xxxxxxx Xxxxxxx XX
0000-0000 3032 00 Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx XX
0000-0000 2041 000 Xxxxx Xxxxxx Xxxxxxx Xxxxxxxxx XX
0000-0000 2042 0000 X. Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx Xxxxxxx XX
0000-0000 3033 000 Xxxxxxxxxx Xxxxxx Xxxxxx Xxxxxxxxx XX
0000-0000 3020 000 Xxxxxxxxx Xxxx Xxxxxx Xxxxxxxxx XX
0000-0000 3002 000 Xxxxxx Xxxxxx (Xx 000) Xxxxxxx Xxxxx MA
EXHIBIT A-1
LEGAL DESCRIPTIONS OF PROPERTIES
LEGAL DESCRIPTION
A parcel of land located in Andover, Essex County, Massachusetts,
bounded and described as follows:
Commencing at a point in the southerly line of Xxxxxx Street at a drill
hole in the wall at a point four hundred forty-five feet westerly from the
northwesterly xxxxx of land now or formerly of Xxx X. Xxxxxxxxx;
Thence running Southerly by land now or formerly of Xxxxxx Xxxxxxxx as
the wall stands two hundred seventy feet to a pipe;
Thence running Westerly by land now or formerly of said Bredbury one
hundred sixty and 5/10 feet to a pipe;
Thence turning and running Northerly by land now or formerly of said Bredbury
two hundred seventy feet to a drill hole in the wall on the Southerly line of
Lowell Street;
Thence turning and running Easterly by said Lowell Street one hundred
sixty one feet to the point of beginning.
FFCA No. 8001-3332
Store No. 3002
000 Xxxxxx Xxxxxx (Xx 000)
Xxxxxxx, XX
EXHIBIT A
PARCEL I
A certain parcel of land with the building and all other improvements
thereon commonly known as and numbered 000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxx
Xxxxxx, Xxxxxxxxxxxxx, and shown as Lot 3 on a plan entitled "Plan of Land in
Woburn, Mass. (Middlesex County) for Blue Fin Realty Trust, Scale: 1"-40',
September 4, 1976," by Xxxxxx X. Xxxxx Co., recorded with Middlesex South
District Registry of Deeds in Book 13115, Page 305, and being more particularly
bounded and described as follows:
SOUTHWESTERLY: By Cambridge Street, Two Hundred Six and 82/100
(206.82) feet;
NORTHWESTERLY: By Lot 2 and Lot 1 shown on said plan, One Hundred
Ninety-Eight and 07/100 (198.07) feet;
NORTHEASTERLY: By Lot 1 on said plan, Two Hundred Ten and 39/100
(210.39) feet; and
SOUTHEASTERLY: By two lots of land now or formerly of XxXxx,
according to said plan, Two Hundred Thirteen and
40/100 (213.40) feet.
Said Lot 3 contains 42,854 square feet of land (0.984 acres), more or
less, according to said plan.
PARCEL II
A certain parcel of land situate in Woburn, Middlesex County,
Commonwealth of Massachusetts, shown as Parcel A on a plan entitled "Subdivision
Plan of Land in Woburn, Mass." By Xxxxx & Xxxxxxx, Inc., dated April 19, 1991,
recorded in Book 21410, Page 259. Said Parcel A containing 20,000 square feet of
land according to said plan.
FFCA No. 8001-3339
Store No. 3020
000 Xxxxxxxxx Xxxx
Xxxxxx, XX
LEGAL DESCRIPTION
The land in Easton in the Country of Bristol and Commonwealth of Massachusetts,
being the lot containing 3.70 acres, more or less, shown on a "Plan of Land in
Easton showing conveyances to Xxxxxxx X. Xxxxxx & Xxxxxx Xxxxx Xxxxxx, dated
February 12, 1947, by Hayward & Hayward, Surveyors," which plan is recorded with
Bristol North District Deeds in Plan Book 39, Page 104, bounded and described as
follows:
NORTHERLY: by Belmont Street by a curved line, 208 feet;
EASTERLY: by a lot marked 0.92 acres and land now or formerly of Xxxxx X. Xxxxxxx &
Xxxxxx X. Xxxxxxxxx d/b/a Brockton Sand & gravel Co., as shown on said plan,
789 feet, more or less;
SOUTHERLY: by land now or formerly of Xxxxx and Xxxxx, 300 feet; and
WESTERLY: by land now or formerly of Xxxxxx and Xxxxxxxxx, 725.37 feet.
FFCA No. 8001-3341
Store No. 3032
00 Xxxxxxx Xxxxxx
Xxxxxx, XX
LEGAL DESCRIPTION
The land, with the buildings and other improvements thereon, situated in Lowell,
Middlesex County, Massachusetts, on the southeasterly side of Chelmsford Street,
described as follows:
Northwesterly by Xxxxxxxxxx Xxxxxx;
Northeasterly by land now or formerly of Xxxxxx X. Xxxxxxx, Xx.,
and by land now or formerly of Xxxxxx X. Xxxxxxx;
Southeasterly by Electronics Avenue; and
Southwesterly by Industrial Avenue.
Said land is shown on a plan of land entitled: "'As Built' Site Plan of
Land in Lowell, Mass. For 000 Xxxxxxxxxx Xxxxxx Corporation Scale: l" = 30' July
7, 1991 Xxxxxx X. Xxxx & Associates, Inc., Civil Engineers & Land Surveyors",
which plan is recorded with the Middlesex North District Registry of Deeds in
Plan Book 176, Plan 80.
FFCA No. 8001-3342
Store No. 3033
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX
LEGAL DESCRIPTION
A certain parcel of land, together with the buildings and other improvements
thereon, situated on the Westerly side of Fall River Avenue (Route 114A) in
Seekonk, Bristol County, Massachusetts, being shown as Parcel 1 on a plan
entitled "Plan of Land in Seekonk, Mass., Surveyed for Seekonk Foods Inc.,
Scale: 1" = 40', Dec. 13, 1968, Xxxxxxxx Engineering Corp., New Bedford, Mass.",
recorded with the Bristol North District Registry of Deeds in Plan Book 116,
Plan 37 (the "Plan"). Said Parcel 1 is more particularly bounded and described,
according to the Plan, as follows:
Beginning at the Southeasterly corner thereof, at a concrete bound on the
Westerly side of said Fall River Avenue and at other land of Seekonk Foods Inc.,
thence running
S 73(degree) 26' 34" W by said other land of Seekonk Foods Inc., 238.35 feet to a point at land shown as
Parcel 2; thence turning and running
N 16(degree) 33' 26" W by said Parcel 2, 310.00 feet to a concrete bound; thence turning and running
N 73(degree) 26' 34" E still by said Parcel 2, 175.03 feet to a nail; thence turning and running
S 16(degree) 33' 26" E still by said Parcel 2, 12.42 feet to a point; thence turning and running
N 73(degree) 26' 34" E still by said Parcel 2, 10.00 feet to a point; thence turning and running
S 16(degree) 33' 26" E still by said Parcel 2, 19.95 feet to a nail; thence turning and running
N 72(degree) 57' 34" E still by said Parcel 2, 50.15 feet to a railroad spike; thence turning and running
S 17(degree) 02' 26" E still by said Parcel 2, 16.20 feet to a nail; thence turning and running
N 73(degree) 27' 34" E still by said Parcel 2, 5.95 feet to a nail; thence turning and running
S 16(degree) 58' 56" E still by said Parcel 2, 13.82 feet to a drill hole; thence turning and running
N 73(degree) 31' 34" E still by said Parcel 2, 21.75 feet to a concrete bound on the Westerly side of said
Fall River Avenue; thence turning and running
S 16(degree) 33' 26" E by the Westerly side of said Fall River Avenue, 26.84 feet to a concrete bound; thence
turning and running
SOUTHEASTERLY still by the Westerly side of said Fall River Avenue, on a curve to the right having a
radius of 1,000.00 feet, a distance of 223.00 feet to a concrete bound at the point of
beginning.
FFCA No. 8001-3344
Store No. 2039
000 Xxxx Xxxxx Xxxxxx
Xxxxxxx, XX
LEGAL DESCRIPTION
The following described parcels of land with the buildings thereon:
PARCEL A: The land in said Waltham shown on plan entitled "Plan of Land in
Waltham, Mass., dated May 1950, Xxxxxx X. Xxxx, C.E." recorded with Middlesex
South District Deeds in Book 7586, page 356, bounded:
NORTHERLY by Xxxxxxx Street, one hundred forty-four and 58/100 (144.58) feet;
EASTERLY by land now or formerly of West End Chevrolet, Inc. as shown on said plan, two
hundred fifty and 05/100 (250.05) feet;
SOUTHERLY by land of Xxxxxxxx X. Xxxxxxx and Xxxxxx X. by land of Xxxxxx X. XxXxxxx and
Xxxxxxxxx X., by land of Xxxxxxxxx X. Xxxxxxxxx, by land of Xxxxxxxx Xxxxxxxx
and by land of Xxxx X. Xxxx, two hundred sixty and 38/100 (260.38) feet;
WESTERLY by South Street, two hundred fifty-six and 70/100 (256.70) feet; and
NORTHWESTERLY by a curved line with a radius of twenty (20) feet, forming the junction of South
and Xxxxxxx Streets, twenty-three and 64/100 (23.64) feet.
PARCEL B: The land in said Waltham, with the buildings thereon and being shown
on a plan entitled "Plan of Land Owned by Xxxxxx Clock Products, Inc." dated
Dec. 1957, made by Xxxxxx X. Xxxx, C.E., recorded with Middlesex South District
Deeds in Book 9071, Page 537, bounded and described according to said plan as
follows:
NORTHERLY by Xxxxxxx Street, forty (40) feet;
EASTERLY by land of Xxxxxx Clock Products, Inc., two hundred fifty and 6/100 (250.06)
feet;
SOUTHERLY by land of Xxxxxxx and land of Hooban, forty (40) feet; and
WESTERLY by land now or formerly of West End Chevrolet, Inc., two
hundred fifty and 5/100 (250.05) feet.
1
FFCA No. 8001-3345
Store No. 2041
000 Xxxxx Xxxxxx
Xxxxxxx, XX
PARCEL C: The land in Waltham, Massachusetts, bounded and described as follows:
Beginning at the southeasterly corner of the granted premises at a point in the
northerly line of Bedford Street at land of Xxxxxxxx, distant 113.88 feet easterly
from its intersection with the easterly line of South Street; thence running
SOUTH 81(degree) 57' 15" West along said northerly line of Bedford Street twenty-three
and 99/100 (23.99) feet to a point of curvature thence in a general Westerly
direction by a curve to the right with a radius of two hundred forty and 00/100
(240.00) feet, sixty-two and 58/100 (62.58) feet to a tangent point; thence
NORTH 83(degree) 06' 25" West eleven and 69/100 (11.69) feet to a point of curvature;
thence in a general northwesterly direction by a curve to the right with a radius
of ten and 00/100 (10.00) feet sixteen and 98/100 (16.98) feet to a tangent point
in the easterly line of South Street, the last three described courses being along
land of the City of Waltham reserved for a future widening of Xxxxxxx Xxxxxx;
thence
NORTH 14(degree) 12' 00" East along said Easterly line of South Street, eighty-one and
49/100 (81.49) feet to a corner at land of the Keystone Watch Case Company
thence
NORTH 8(degree) 57' 15" East along said land of the Keystone Watch Case Company,
seventy-two and 98/100 (72.98) feet to a corner at land of Xxxxxxxx; thence
SOUTH 8(degree) 02' 45" East along said land of Xxxxxxxx one hundred and 00/100 (100.00)
feet to the point of beginning.
FFCA No. 8001-3345 2
Store No. 2041
000 Xxxxx Xxxxxx
Xxxxxxx, XX
LEGAL DESCRIPTION
Beginning at the intersection of the northerly line of Cumberland Avenue and the
easterly line of Washington Street, which point is the southwesterly corner of
the parcel herein conveyed; thence running northerly along said easterly line of
Washington Street, 662.00 feet to land formerly of Xxxxxxx to a corner; thence
turning an interior angle of 47 degrees 40 minutes and running southeasterly,
bounded northerly by said Xxxxxxx land, 515 feet more or less to land now or
formerly of Xxxx Goidz a corner; thence turning an interior angle of 107 degrees
46 minutes and running southwesterly bounded easterly by said Goidz land 237
feet to land now or formerly of Valliancourt to a corner; thence turning an
interior angle of 81 degrees 39 minutes and running northwesterly bounded
southerly by said Xxxxxxxxxxxx land, 100 feet to a corner; thence turning an
exterior angle of 90 degrees and running southwesterly 240 feet to the northerly
line of Cumberland Avenue, a corner; thence turning and running northwesterly
along said easterly line of Xxxxxxxxxx Xxxxxx, 00 feet to the easterly line of
Washington Street, the first point and place of beginning.
FFCA No. 8001-3346
Store No. 2012
0000 X. Xxxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, XX
SCHEDULE I
STIPULATED LOSS VALUE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
1/1/2002 114.722290%
2/1/2002 115.635084%
3/1/2002 115.665139%
4/1/2002 115.695233%
5/1/2002 115.725366%
6/1/2002 115.755536%
7/1/2002 115.785744%
8/1/2002 115.815989%
9/1/2002 115.846270%
10/1/2002 115.876586%
11/1/2002 115.906936%
12/1/2002 115.937320%
1/1/2003 115.967738%
2/1/2003 115.990147%
3/1/2003 116.012526%
4/1/2003 116.034875%
5/1/2003 116.057192%
6/1/2003 116.079475%
7/1/2003 116.101725%
8/1/2003 116.123938%
9/1/2003 116.146115%
10/1/2003 116.168254%
11/1/2003 116.190353%
12/1/2003 116.212412%
1/1/2004 116.234428%
2/1/2004 116.248279%
3/1/2004 116.262023%
4/1/2004 116.275659%
5/1/2004 116.289185%
6/1/2004 116.302598%
7/1/2004 116.315897%
8/1/2004 116.329080%
9/1/2004 116.342145%
10/1/2004 116.355089%
11/1/2004 116.367912%
12/1/2004 116.380611%
1/1/2005 116.393183%
2/1/2005 116.397425%
3/1/2005 116.401474%
4/1/2005 116.405328%
5/1/2005 116.408984%
6/1/2005 116.412439%
STIPULATED LOSS VALUES - LEASE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
7/1/2005 116.415692%
8/1/2005 116.418739%
9/1/2005 116.421577%
10/1/2005 116.424205%
11/1/2005 116.426618%
12/1/2005 116.428815%
1/1/2006 116.430792%
2/1/2006 116.424262%
3/1/2006 116.417444%
4/1/2006 116.410334%
5/1/2006 116.402930%
6/1/2006 116.395227%
7/1/2006 116.387222%
8/1/2006 116.378912%
9/1/2006 116.370293%
10/1/2006 116.361361%
11/1/2006 116.352114%
12/1/2006 116.342547%
1/1/2007 116.332656%
2/1/2007 116.314071%
3/1/2007 116.295092%
4/1/2007 116.275714%
5/1/2007 116.255933%
6/1/2007 116.235745%
7/1/2007 116.215145%
8/1/2007 116.194130%
9/1/2007 116.172694%
10/1/2007 116.150833%
11/1/2007 116.128542%
12/1/2007 116.105818%
1/1/2008 116.082655%
2/1/2008 116.050598%
3/1/2008 116.018028%
4/1/2008 115.984941%
5/1/2008 115.951332%
6/1/2008 115.917194%
7/1/2008 115.882523%
8/1/2008 115.847314%
9/1/2008 115.811560%
10/1/2008 115.775257%
11/1/2008 115.738398%
12/1/2008 115.700978%
1/1/2009 115.662992%
STIPULATED LOSS VALUES - LEASE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
2/1/2009 115.615898%
3/1/2009 115.568161%
4/1/2009 115.519775%
5/1/2009 115.470734%
6/1/2009 115.421031%
7/1/2009 115.370659%
8/1/2009 115.319613%
9/1/2009 115.267885%
10/1/2009 115.215469%
11/1/2009 115.162359%
12/1/2009 115.108547%
1/1/2010 115.054026%
2/1/2010 114.990170%
3/1/2010 114.925525%
4/1/2010 114.860086%
5/1/2010 114.793844%
6/1/2010 114.726792%
7/1/2010 114.658922%
8/1/2010 114.590226%
9/1/2010 114.520697%
10/1/2010 114.450327%
11/1/2010 114.379107%
12/1/2010 114.307030%
1/1/2011 114.234088%
2/1/2011 114.151565%
3/1/2011 114.068094%
4/1/2011 113.983666%
5/1/2011 113.898273%
6/1/2011 113.811906%
7/1/2011 113.724554%
8/1/2011 113.636211%
9/1/2011 113.546865%
10/1/2011 113.456509%
11/1/2011 113.365132%
12/1/2011 113.272726%
1/1/2012 113.179280%
2/1/2012 113.075991%
3/1/2012 112.971577%
4/1/2012 112.866027%
5/1/2012 112.759331%
6/1/2012 112.651480%
7/1/2012 112.542461%
8/1/2012 112.432266%
STIPULATED LOSS VALUES - LEASE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
9/1/2012 112.320882%
10/1/2012 112.208299%
11/1/2012 112.094507%
12/1/2012 111.979495%
1/1/2013 111.863251%
2/1/2013 111.736882%
3/1/2013 111.609191%
4/1/2013 111.480167%
5/1/2013 111.349798%
6/1/2013 111.218072%
7/1/2013 111.084977%
8/1/2013 110.950499%
9/1/2013 110.814629%
10/1/2013 110.677351%
11/1/2013 110.538655%
12/1/2013 110.398528%
1/1/2014 110.256956%
2/1/2014 110.104956%
3/1/2014 109.951417%
4/1/2014 109.796327%
5/1/2014 109.639671%
6/1/2014 109.481436%
7/1/2014 109.321608%
8/1/2014 109.160173%
9/1/2014 108.997116%
10/1/2014 108.832423%
11/1/2014 108.666080%
12/1/2014 108.498073%
1/1/2015 108.328386%
2/1/2015 108.147945%
3/1/2015 107.965726%
4/1/2015 107.781713%
5/1/2015 107.595892%
6/1/2015 107.408245%
7/1/2015 107.218759%
8/1/2015 107.027415%
9/1/2015 106.834199%
10/1/2015 106.639094%
11/1/2015 106.442083%
12/1/2015 106.243150%
1/1/2016 106.042279%
2/1/2016 105.830300%
3/1/2016 105.616279%
STIPULATED LOSS VALUES - LEASE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
4/1/2016 105.400198%
5/1/2016 105.182039%
6/1/2016 104.961785%
7/1/2016 104.739417%
8/1/2016 104.514917%
9/1/2016 104.288267%
10/1/2016 104.059448%
11/1/2016 103.828441%
12/1/2016 103.595229%
1/1/2017 103.359790%
2/1/2017 103.112864%
3/1/2017 102.863604%
4/1/2017 102.611990%
5/1/2017 102.358002%
6/1/2017 102.101619%
7/1/2017 101.842821%
8/1/2017 101.581588%
9/1/2017 101.317897%
10/1/2017 101.051729%
11/1/2017 100.783063%
12/1/2017 100.511876%
1/1/2018 100.238148%
2/1/2018 99.952521%
3/1/2018 99.664238%
4/1/2018 99.373276%
5/1/2018 99.079612%
6/1/2018 98.783225%
7/1/2018 98.484089%
8/1/2018 98.182183%
9/1/2018 97.877482%
10/1/2018 97.569964%
11/1/2018 97.259603%
12/1/2018 96.946376%
1/1/2019 96.630258%
2/1/2019 96.301797%
3/1/2019 95.970325%
4/1/2019 95.635816%
5/1/2019 95.298245%
6/1/2019 94.957585%
7/1/2019 94.613811%
8/1/2019 94.266897%
9/1/2019 93.916816%
10/1/2019 93.563541%
STIPULATED LOSS VALUES - LEASE
99 RESTAURANTS
% OF NET
DATE PURCHASE PRICE
---- --------------
11/1/2019 93.207046%
12/1/2019 92.847303%
1/1/2020 92.484285%
2/1/2020 92.108441%
3/1/2020 91.729194%
4/1/2020 91.346516%
5/1/2020 90.960378%
6/1/2020 90.570751%
7/1/2020 90.177605%
8/1/2020 89.780912%
9/1/2020 89.380641%
10/1/2020 88.976762%
11/1/2020 88.569246%
12/1/2020 88.158061%
1/1/2021 87.743177%
2/1/2021 87.314945%
3/1/2021 86.882879%
4/1/2021 86.446946%
5/1/2021 86.007115%
6/1/2021 85.563353%
7/1/2021 85.115627%
8/1/2021 84.663904%
9/1/2021 84.208152%
10/1/2021 83.748335%
11/1/2021 83.284421%
12/1/2021 82.816375%
1/1/2022 82.344163%
STIPULATED LOSS VALUES - LEASE
SCHEDULE II
STATE SPECIFIC PROVISIONS
MASSACHUSETTS
With respect to those Properties located in the State of Massachusetts,
all indemnification provisions of this Lease, including, without limitation,
Sections 16.C, 16.G and 19 shall be deemed to be modified so that they comply
with Massachusetts General Laws Chapter 186, Section 15, it being the intent of
the parties that, with respect to such Properties, Lessor shall not be
indemnified, held harmless, or precluded or exonerated from any or all
liability, for any injury, loss, damage or liability arising from any omission,
fault, negligence or other misconduct of Lessor on or about such Properties or
on or about any elevators, stairways, hallways or other appurtenance used in
connection therewith.
