EXECUTION COPY
Proprietary & Confidential
LEASE
dated as of June 27, 2001
between
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as Trustee of
RAC Distribution Statutory Trust
as Lessor,
and
RITE AID REALTY CORP.
as Lessee
THIS LEASE HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS NUMBERED CONSECUTIVELY
FROM l TO__. TO THE EXTENT, IF ANY, THAT THIS LEASE CONSTITUTES CHATTEL PAPER
(AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ANY
APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS LEASE MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OF THIS LEASE OTHER THAN
COUNTERPART NO. 1.
This is Counterpart No.
TABLE OF CONTENTS
(Not a part of the Lease)
Page
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ARTICLE I DEFINITIONS; RULES OF CONSTRUCTION ................................. 1
Section 1.01 Definitions; Rules of Construction........................ 1
ARTICLE II THE PROPERTIES..................................................... 2
Section 2.01 Lease of the Properties................................... 2
Section 2.02 Use of Properties......................................... 3
Section 2.03 Sublease.................................................. 3
Section 2.04 Quiet Enjoyment........................................... 3
Section 2.05 Hazardous Materials....................................... 4
ARTICLE III TERM.............................................................. 5
Section 3.01 Base Term................................................. 5
Section 3.02 Extended Term............................................. 5
Section 3.03 Lessee's Options Upon Expiration.......................... 5
Section 3.04 Property Sold............................................. 6
Section 3.05 Triple Net Lease; Non-Terminability ...................... 6
ARTICLE IV RENT............................................................... 7
Section 4.01 Fixed Rent................................................ 7
Section 4.02 Additional Rent........................................... 8
Section 4.03 Default Rate.............................................. 8
Section 4.04 Rent Payments............................................. 8
Section 4.05 Other Payments............................................ 8
ARTICLE V SALE OF PROPERTIES.................................................. 8
Section 5.01 Optional Purchase by Lessee of the Properties............. 8
Section 5.02 Optional Purchase of Unimproved Land ..................... 9
Section 5.03 Mandatory Purchase by the Lessee of the Properties ....... 9
Section 5.04 Purchase Procedures....................................... 9
Section 5.05 Alterations; Removal..................................... 11
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ARTICLE VI CERTAIN COVENANTS OF THE LESSEE................................... 13
Section 6.01 Taxes and Assessments.................................... 13
Section 6.02 Compliance with Laws .................................... 14
Section 6.03 Certain Agreements....................................... 14
Section 6.04 Liens.................................................... 15
Section 6.05 Insurance................................................ 16
Section 6.06 Maintenance and Repair .................................. 18
Section 6.07 Inspection Rights........................................ 20
Section 6.08 Assignments, Sublease, Etc .............................. 20
Section 6.09 Intellectual Property Rights; Applicable Permits ........ 20
ARTICLE VII CONDEMNATION AND CASUALTY........................................ 21
Section 7.01 Condemnation and Casualty................................ 21
Section 7.02 Condemnation or Casualty with Termination................ 22
Section 7.03 Condemnation or Casualty without Termination ............ 22
Section 7.04 Temporary Condemnation or Lease Termination.............. 24
ARTICLE VIII ENVIRONMENTAL MATTERS .......................................... 24
Section 8.01 Environmental Event...................................... 24
Section 8.02 Environmental Trigger Termination........................ 24
Section 8.03 Environmental Remediation................................ 25
Section 8.04 Environmental Compliance ................................ 25
ARTICLE IX REMEDIES.......................................................... 26
Section 9.01 General Remedies......................................... 26
Section 9.02 Default Remedies......................................... 26
Section 9.03 Lessee Default Repurchase Option......................... 29
Section 9.04 Payment on Default....................................... 29
Section 9.05 Additional Rights........................................ 29
ARTICLE X SURRENDER.......................................................... 30
Section 10.01 Return of Property...................................... 30
Section 10.02 Condition; No Liens..................................... 30
Section 10.03 Environmental Compliance ............................... 30
Section 10.04 Removal of Othe r Property.............................. 31
Section 10.05 Return Conditions....................................... 31
Section 10.06 Survival................................................ 34
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ARTICLE XI SECURITY; LESSOR WAIVERS ......................................... 34
Section 11.01 Characterization........................................ 34
Section 11.02 Security Agreement...................................... 35
Section 11.03 Lessor Waivers.......................................... 35
ARTICLE XII MISCELLANEOUS.................................................... 35
Section 12.01 Notices, Demands and Other Instruments.................. 35
Section 12.02 No Default Certificate.................................. 36
Section 12.03 Severability............................................ 36
Section 12.04 Binding Effect; Amendments ............................. 36
Section 12.05 Governing Law........................................... 36
Section 12.06 Counterparts............................................ 37
Section 12.07 No Recourse............................................. 37
Section 12.08 Lessor's Right to Cure Lessee's Default ................ 37
Section 12.09 Lessee's Right to Contest Real Property Taxes .......... 38
Section 12.10 Limitations on Amounts Payable ......................... 38
Section 12.11 Payments to the Agent................................... 38
Section 12.12 Remaining Moneys........................................ 38
Section 12.13 Waiver of Trial by Jury................................. 38
Section 12.14 Exculpation of the Lessor............................... 39
Section 12.15 No Merger of Title...................................... 39
Section 12.16 Registered Instrument................................... 39
Exhibit A - Form of Lease Supplement
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Proprietary & Confidential
LEASE dated as of June __, 20001 (this "Lease") between XXXXX FARGO
BANK NORTHWEST, NATIONAL ASSOCIATION, not in its individual capacity but solely
as Trustee of RAC Distribution Statutory Trust, a Connecticut statutory trust,
having an address c/o Wells Fargo Bank Northwest, National Association, 000
Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxx 00000, Attention: Corporate
Trust Services (the "Lessor"), and RITE AID REALTY CORP., a Delaware corporation
having an address at c/o Rite Aid Corporation, 00 Xxxxxx Xxxx, Xxxx Xxxx,
Xxxxxxxxxxxx 00000-0000 (the "Lessee"). The schedules and exhibits referred to
in this Lease are hereby incorporated by reference herein.
Preliminary Statement
The Lessor has acquired interests (fee or leasehold, as applicable) in
the Properties (including the Improvements) as more particularly described in
the Lease Supplements. The Lessor wishes to lease or sublease, as the case may
be, to the Lessee the Properties (including Improvements) it has acquired by fee
or leasehold (for convenience of reference, such lease or sublease of the
Properties being collectively referred to as the lease of the Properties) and
the Lessee wishes to lease the same from the Lessor.
NOW, THEREFORE, the parties do hereby agree as follows:
ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01 Definitions; Rules of Construction. As used in this Lease,
terms defined in the preceding paragraphs or in other sections of this Lease
have the meanings specified therein, and capitalized terms used herein and in
the schedules and Exhibits hereto and not otherwise defined herein or therein
shall have the meanings set forth in Appendix A to the Participation Agreement
dated as of the date hereof, by and among the Lessee, Rite Aid Corporation, the
Lessor, the Trustee, the Persons named therein as Note Holders and Certificate
Holders, and Citicorp USA, Inc., as Agent (as amended, supplemented or otherwise
modified from time to time, the "Participation Agreement"). In addition, the
rules of construction set forth in Part I of Appendix A to the Participation
Agreement shall apply to this Lease. All references herein to "Property" or
"Properties" means the Property or Properties then subject to the terms of this
Lease.
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ARTICLE II
THE PROPERTIES
Section 2.01 Lease of the Properties. (a) Subject to the terms and
conditions contained in this Lease, the Lessor hereby agrees to lease to the
Lessee and the Lessee hereby agrees to lease from the Lessor each Property
listed in each Lease Supplement, effective on and as of the date hereof. The
execution of a Lease Supplement by the Lessor and the Lessee will evidence that
the Lessee has unconditionally accepted the Property described therein to be
included under this Lease upon and subject to the terms, conditions and
provisions hereof and in the other Operative Document.
(b) Each Property is leased to the Lessee subject to:
(i) all applicable Legal Requirements;
(ii) all applicable Insurance Requirements;
(iii) with respect to the California Property, all terms, covenants and
provisions in the Ground Lease;
(iv) all Permitted Encumbrances; and
(v) the terms, covenants and provisions of this Lease and the other
Operative Documents.
(c) The Lessee has examined each Property subject to this Lease and
title thereto and has found the same satisfactory for all purposes of this Lease
and accepts the same AS IS, WHERE IS, WITH ALL FAULTS. The Lessee hereby assumes
for the Term of this Lease all of the obligations of the Lessor under the Ground
Lease.
(d) THE LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED,
WITH RESPECT TO ANY PROPERTY OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION
THEREOF, OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
SUITABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR DURABILITY
THEREOF OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR AS TO
THE COMPLIANCE THEREOF WITH APPLICABLE LEGAL REQUIREMENTS, OR AS TO THE LESSOR'S
TITLE THERETO OR OWNERSHIP THEREOF OR OTHERWISE, IT BEING AGREED THAT, SUBJECT
TO THE PROVISIONS OF SECTION 9.14(b) OF THE PARTICIPATION AGREEMENT, ALL RISKS
INCIDENT
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THERETO ARE TO BE BORNE BY THE LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY
OF ANY NATURE IN ANY PROPERTY OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A
PORTION THEREOF, WHETHER PATENT OR LATENT, OR THE LESSOR'S TITLE TO ANY OF THE
SAME, THE LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO.
THE PROVISIONS OF THIS SECTION 2.01(d) HAVE BEEN NEGOTIATED AND ARE INTENDED TO
BE A COMPLETE EXCLUSION AND NEGATION OF ANY AND ALL WARRANTIES AND
REPRESENTATIONS, EXPRESS OR IMPLIED, BY THE LESSOR WITH RESPECT TO EACH PROPERTY
OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING
PURSUANT TO THE UCC OR ANY OTHER LAW, NOW OR HEREAFTER IN EFFECT.
Section 2.02 Use of Properties. The Lessee shall use each Property for
its Intended Use and, with respect to the California Property, in compliance
with the terms of the Ground Lease. The Lessee covena nts that, with respect to
each Property, it will cause the related Improvements and any Alterations (as
long as title to such Alterations belongs to the Lessor pursuant to the terms
hereof) at all times to be located on the related Land.
Section 2.03 Sublease. The Lessee may, without the consent of the
Lessor, but with prior written notice to the Lessor, sublease any Property or
any portion thereof to any Subsidiary of the Guarantor or to the Guarantor so
long as no Event of Default or Non-Performance Event shall have occurred and be
continuing. No sublease or other relinquishment of possession of such Property,
or any portion thereof, shall in any way discharge or diminish any of the
Lessee's obligations to the Lessor hereunder and the Lessee shall remain
directly and primarily liable under this Lease as to such Property, or portion
thereof, so sublet. Any sublease of any Property, or any portion thereof, shall
expressly be made subject to and subordinated to this Lease and to the rights of
the Lessor hereunder. No such sublease may provide for use of such Property by
the sublessee in a manner different than that of the Lessee prior to the
sublease.
Section 2.04 Quiet Enjoyment.
(a) During the Term, the Lessor covenants that, unless a Default, Event
of Default, Environmental Trigger or Non-Performance Event has occurred and is
continuing, it will not, and will not permit any Person (other than the Lessee)
claiming by or under the Lessor (subject to the terms, covenants and provisions
of the Ground Lease with respect to the California Property) to interfere with
the peaceful and quiet possession and enjoyment of such Property by the Lessee,
subject to Section 6.07 and, with respect to the California Property, the terms,
covenants and provisions of the Ground Lease.
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(b) The Lessor will not, and will not permit any party claiming by,
through or under the Lessor (subject, with respect to the California Property,
to the terms, covenants and provisions of the Ground Lease) to assign, transfer,
lease or convey any Property or this Lease, or any part thereof or interest
therein. The foregoing restriction will not apply to (i) removal of the
Alterations by the Lessee to the extent permitted under this Lease, or (ii) any
assignment, transfer or conveyance of any Property or this Lease permitted under
the Operative Documents. In addition, the Lessor will not create or suffer to
exist any Lessor Liens on or against any Property or any part thereof.
(c) The Lessor, at the Lessee's sole cost and expense, shall cooperate
or assist with Lessee's efforts to obtain all services, Permits and contracts
necessary and useful for the acquisition, operation and maintenance of each
Property for its Intended Use, and the Lessor shall execute such documents or
papers as may be reasonably necessary for such purposes. The Lessee further
covenants that it will at its own cost and expense on behalf of and in the name
of the Lessor, apply for, obtain and maintain all Permits required in order to
permit the lawful ownership of each Property by the Lessor during the Term.
(d) Any failure by the Lessor or any other Person claiming by, through
or under the Lessor, to comply with the foregoing provisions of this Section
2.04 or any other provisions of this Lease will not give the Lessee any right to
cancel or terminate this Lease, or to xxxxx, reduce or make deduction from or
offset against any Fixed Rent, Additional Rent or other sum payable under this
Lease, or to fail to perform or observe any other covenant, agreement or
obligation hereunder.
Section 2.05 Hazardous Materials. The Lessee shall, and it shall
require and ensure that any and all sublessees, employees, contractors,
subcontractors, agents, representatives, affiliates, consultants, occupants and
any and all other Persons under the control of or representing Lessee, (i)
comply in all material respects with all applicable Environmental Laws in
connection with the occupancy, use and operation of the Properties, and (ii)
use, employ, process, emit, generate, store, handle, transport, dispose of
and/or arrange for the disposal of any and all Hazardous Materials in, on or,
directly or indirectly, related to or in connection with the Properties or any
part thereof in a manner consistent with prudent industry practice and in
compliance with all applicable Environmental Laws. The Lessor and the Lessee
hereby acknowledge and agree that Lessee's obligations hereunder with respect to
Hazardous Materials and Environmental Laws are intended to bind the Lessee with
respect to matters and conditions on, in, under, beneath, from, with respect to,
affecting, related to, in connection with, or involving any Property or any part
thereof.
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ARTICLE III
TERM
Section 3.01 Base Term. Each Property is leased for a base term (the
"Base Term") which will commence on the Funding Date and will terminate on the
Base Term Expiration Date or such earlier date as this Lease shall be terminated
pursuant to the provisions hereof, including by the sale of the Lessor's
interest in the Properties in accordance with Section 5.04, provided that this
Lease may be extended for an Extension Term pursuant to Section 3.02. The Base
Term and the Extension Term, if any, are hereinafter referred to as the "Term".
Section 3.02 Extended Term. So long as no Default, Event of Default,
Non-Performance Event or Environmental Trigger exists, the Lessee may request,
by written no xxxx given to the Agent at least twelve (12) months prior to the
Base Term Expiration Date, an extension of this Lease with respect to all
Properties for one additional period for a term to be agreed upon, but in any
event not to exceed seven (7) years (the "Extension Term"). If the Holders agree
to such Extension Term (in accordance with the procedures set forth in Section
5.09 of the Participation Agreement), the Lessor and the Lessee will determine
the Applicable Rate for the Extension Term, consistent with the terms outlined
below in this Section 3.02, and the appropriate parties will undertake to enter
into amendments and supplements to the Operative Documents and such other
agreements as the parties determine to be necessary and appropriate in
connection therewith, including delivery to the Agent of an Appraisal of the
Properties (satisfactory in form and substance to the Agent in its sole
discretion). Fixed Rent during the Extension Term will be paid monthly in
arrears, and include an annual amount (payable annually in arrears) to be
applied in a manner acceptable to (i) each Note Holder, to the outstanding
principal amount of the Notes, and (ii) each Certificate Holder, to the
outstanding Certificate Amount of the Certificates, such annual amount to be
based on an amortization schedule determined by reference to the Appraisal
described above and acceptable to the Note Holders and the Certificate Holders
in their sole discretion. If the Lessee or the Lessor does not accept the terms
of any such Extens ion Term (including any proposed changes to the Operative
Documents), the Lessee or the Lessor may reject the Extension Term and the
Lessee shall then elect either option provided in Section 3.03.
Section 3.03 Lessee's Options Upon Expiration. (a) If this Lease has
not been extended as set forth in Section 3.02, at least twelve (12) months
prior to the Expiration Date the Lessee shall elect by written notice given to
the Lessor and the Agent to either:
(i) deliver an Offer to Purchase the Properties and purchase
the Properties on the Expiration Date upon payment of an amount equal
to the
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Termination Value for the Properties, in which case the provisions of Section
5.04 shall apply; or
(ii) so long as no Default, Event of Default, Non-Performance
Event or Environmental Trigger has occurred and is continuing, and
subject to the satisfaction of the conditions set forth in Section
3.03(b) and Article X, terminate this Lease, abandon the Properties and
release all of its interest in the Properties as of the Expiration Date
and pay to the Agent, on behalf of the Lessor, on the Expiration Date,
in addition to any Fixed Rent, Additional Rent and any other amounts
then due and payable to the Lessor hereunder, an amount equal to the
Residual Value Amount for the Properties.
If the Lessee is unable to satisfy one or more of the conditions set forth
above, or fails to timely make an election as provided above, the Lessee shall
be deemed to have elected to proceed under Section 3.03(a)(i).
(b) Upon the Lessee's election to terminate this Lease pursuant to and
in compliance with Section 3.03(a)(ii), the Lessee shall use reasonable efforts
during the twelve-month period prior to the Expiration Date ("Remarketing
Period") to obtain bids from unrelated third parties for the Properties. All
bids received by the Lessee will immediately be copied to the Lessor and the
Agent in writing, setting forth the amount of such bid and the name and address
of the Person submitting such bid. The Lessor, the Agent, the Certificate
Holders and the B-Note Holders will have the right, but not the obligation, to
seek bids for the Properties during the Remarketing Period or at any time
thereafter. On the Expiration Date or at any time thereafter, the Properties
will be sold pursuant to the provisions of the Participation Agreement (any such
sale, a "Qualified Sale"). The Sales Proceeds from a Qualified Sale, if any,
will be distributed in accordance with Article VII of the Participation
Agreement.
Section 3.04 Property Sold. The term of the Lease (and the Lessee's
obligation to pay Rent) for the Properties will end on the date the Properties
are sold or otherwise disposed of pursuant to Section 5.04 and the Termination
Value shall have been paid with respect to the Properties in accordance with
Sections 5.01 and 5.03, as applicable.
Section 3.05 Triple Net Lease; Non-Terminability. (a) This Lease is a
triple net lease and, except as otherwise expressly provided in this Lease, any
present or future Law to the contrary notwithstanding, will not terminate, nor
will the Lessee be entitled to any abatement, reduction, set-off, counterclaim,
defense or deduction with respect to any Fixed Rent, Additional Rent or other
sum payable hereunder. Except as otherwise expressly provided in this Lease, the
obligations of the Lessee will not be affected by reason of: (i) any damage to
or destruction of any Property or any part
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thereof by any cause whatsoever (including by Casualty or any Force Majeure
event); (ii) any Condemnation, including a temporary Condemnation of any
Property or any part thereof; (iii) any prohibition, limitation, restriction or
prevention of the Lessee's use, occupancy or enjoyment of any Property or any
part thereof by any Person; (iv) any matter affecting title to any Property or
any part thereof; (v) any eviction of the Lessee from, or loss of possession by
the Lessee of, any Property or any part thereof, by reason of title paramount or
otherwise; (vi) any default by the Lessor hereunder or under any other Operative
Document; (vii) the invalidity or unenforceability of any provision hereof or
under any other Operative Document or the impossibility or illegality of
performance by the Lessor or the Lessee or both; (viii) any action of any
Governmental Authority; or (ix) any other cause or occurrence whatsoever,
whether similar or dissimilar to the foregoing. The parties intend that the
obligations of the Lessee hereunder will continue unaffected unless such
obligations will have been modified or terminated pursuant to an express
provision of this Lease.
(b) The Lessee will remain obligated under this Lease in accordance
with its terms and will not take any action to terminate, rescind or avoid this
Lease, notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting the Lessor or any action with respect
to this Lease which may be taken by any trustee, receiver or liquidator or by
any court. Except as expressly permitted in this Lease, the Lessee waives all
rights to terminate or surrender this Lease, or to any abatement or deferment of
Fixed Rent, Additional Rent or other sums payable hereunder or under the other
Operative Documents. The Lessee will remain obligated under this Lease in
accordance with its terms, and the Lessee hereby waives any and all rights now
or hereafter conferred by Law or otherwise to modify or to avoid strict
compliance with its obligations under this Lease. All payments made to or for
the benefit of the Lessor hereunder as required hereby will be final, and the
Lessee will not seek to recover any such payme nt or any part thereof for any
reason whatsoever, absent manifest error.
ARTICLE IV
RENT
Section 4.01 Fixed Rent. The Lessee shall pay to the Agent (on behalf
of the Lessor or its registered assigns), fixed rent ("Fixed Rent") for the
Properties commencing on the Funding Date and on each Payment Date thereafter
and ending on the last day of the Term in an amount equal to the sum of (i) the
aggregate amount of interest payable on such Payment Date on the Notes, plus
(ii) the aggregate amount of the Distributions payable on such Payment Date on
the Certificates, plus (iii) during any Extension Term, any other amounts to be
paid on any Payment Date in accordance with Section 3.02.
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Section 4.02 Additional Rent. During the Term, the Lessee shall pay to
the Agent (on behalf of the Lessor or its registered assigns) Additional Rent in
the amounts determined in accordance with (and at the times required under) the
Operative Documents. The Lessor shall give the Lessee notice of any Additional
Rent due hereunder promptly after it has knowledge of such Additional Rent, and
will use reasonable efforts to notify the Lessee in advance of the due date and
amount of such Additional Rent; provided that failure to give such prompt notice
will not relieve the Lessee of its obligation to pay such Additional Rent,
subject to, as applicable, the Lessee's rights, if any, under Section 6.01.
Additional Rent will be due and payable within ten (10) days after demand
therefor (unless a shorter or longer period of time is required by the
Participation Agreement or the other Operative Documents).
Section 4.03 Default Rate. The Lessee shall pay to the Lessor, on
demand, interest at the Default Rate on all amounts payable by it to the Lessor
hereunder from the due date thereof until paid in full.
Section 4.04 Rent Payments. All amounts payable by the Lessee hereunder
will be paid in Dollars and in immediately available funds by 12:00 Noon (New
York City time) on the applicable Payment Date or on the date when due, unless
any such due date is not a Business Day, in which case payment will be due and
payable on the next succeeding Business Day, at the Lessor's account as set
forth in Schedule I to the Participation Agreement, or at such other account or
to such other Person in the United States of America or in such other manner as
the Lessor from time to time may designate to the Lessee by written
instructions.
Section 4.05 Other Payments. The Lessee shall perform all of its
obligations under this Lease at its sole cost and expense and shall pay, or
cause to be paid, when due and without notice or demand all amounts due
hereunder or under the other Operative Documents (including Section 9.13 of the
Participation Agreement) in respect of Additional Rent.
ARTICLE V
SALE OF PROPERTIES
Section 5.01 Optional Purchase by Lessee of the Properties. (a) At any
time during the Term, subject to paragraph (b) below, the Lessee may deliver to
the Lessor and the Agent an Offer to Purchase the Lessor's interest in any
Property for an amount equal to the Termination Value for such Property, upon
and subject to the applicable terms of this Lease. The Termination Value
received by the Agent (on behalf of the Lessor) in accordance with the
provisions of this Section 5.01 and Section 5.04 will be applied in accordance
with Article VII of the Participation Agreement.
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(b) Notwithstanding the provisions contained in paragraph (a) above,
any Offer to Purchase delivered pursuant to paragraph (a) above within twelve
(12) months prior to the Expiration Date shall be an Offer to Purchase the
Lessor's interest in all of the Properties for an amount equal to the
Termination Value for all Properties.
Section 5.02 Optional Purchase of Unimproved Land. At any time and from
time to time during the Term, the Lessee shall have the option, upon thirty (30)
days' prior notice to the Lessor, to purchase or otherwise acquire all of
Lessor's right, title and interest in and to any unimproved portion of the
Maryland Land (and any related easements for utilities and access to be
specified at such time) not necessary for the operations and use of the
Improvements constructed on the Maryland Land at a price equal to then fair
market value, as determined by an Appraisal, of such unimproved portion and such
easements. If Lessee exercises its option pursuant to this Section 5.02, upon
receipt the purchase price therefor, the Lessor shall deliver to the Lessee a
quitclaim deed with respect to such unimproved portion of the Maryland Land,
which deed will state that such transfer is being made without representation or
warranty (expressed or implied) of any kind except that such unimproved portion
of the Maryland Land is free and clear of Liens created by the Operative
Documents or otherwise created or caused by the Lessor (other than any Liens
created by or through the Lessee).
Section 5.03 Mandatory Purchase by the Lessee of the Properties. If any
Termination Notice is issued pursuant to Section 7.02, 7.03, 8.02 or 9.02(a),
the Lessee shall deliver (or will be deemed to have delivered) to the Lessor an
Offer to Purchase the Lessor's interest in the applicable Property for an amount
equal to the Termination Value for such Property, upon and subject to the
applicable terms of this Lease.
Section 5.04 Purchase Procedures. (a) The Lessee may assign to any
Person the right to purchase the Lessor's interest in the applicable Property
pursuant to Section 5.01. Notwithstanding any such assignment, the Lessee will
remain liable to the Lessor for the prompt payment and performance, as and when
due, of all amounts payable (including the Termination Value) and all
obligations of the purchaser under this Lease and the other Operative Documents.
No consent to any such assignment, acceptance of payment from or performance by
any assignee or other action by or on behalf of the Lessor or the Agent will
release the Lessee of any obligations under this Lease or the other Operative
Documents, except upon full payment and performance as and when due.
(b) The Lessor will be deemed to have accepted, on the date of receipt,
any Offer to Purchase the Lessor's interest in the applicable Property (or
deemed Offer to Purchase) which satisfies the conditions set forth in this
Lease, including those set forth this Article V.
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(c) The date of the closing of the Lessee's (or its designee's)
purchase of the Lessor's interest in the applicable Property (the "Closing
Date") will be (i) in the case of an Offer to Purchase made (or deemed made)
pursuant to Section 3.03, the Expiration Date, or (ii) in the case of an Offer
to Purchase made pursuant to Section 5.01, the next scheduled Payment Date at
least thirty (30) days following the date of the Lessor's acceptance or deemed
acceptance of such Offer to Purchase, or (iii) in the case of an Offer to
Purchase made (or deemed made) pursuant to Section 5.03, the thirtieth (30 th )
day following the date of Lessor's acceptance or deemed acceptance of such Offer
to Purchase (or if that day is not a Payment Date, the first scheduled Payment
Date following such fifteenth (15th) day), or (iv) if the Lessee pays the
Termination Value for the applicable Property pursuant to Section 9.03, then on
the date of the Lessor's or the Agent's receipt of the Termination Value for the
applicable Property.
(d) On the Closing Date, the Lessee shall pay, or cause to be paid, to
the Agent (on behalf of the Lessor) the Termination Value for the applicable
Property and the Lessor shall simultaneously (i) deliver to the Lessee or its
designee an assignment (or termination of) its leasehold interest in the Land
with respect to the California Property, a quitclaim deed with respect to the
Maryland Property and a xxxx of sale for all Improvements and Alterations, if
any, which assignment, deed, termination and xxxx of sale will state that such
transfers are being made without representation or warranty (expressed or
implied) of any kind except that the Properties are free and clear of Liens
created by the Operative Documents or otherwise created or caused by the Lessor
(other than any Liens created by or through the Lessee), and (ii) convey, or
cause to be conveyed, to the Lessee or its designee any Net Proceeds related to
the applicable Property and/or the right to receive the same. Additionally, on
the Closing Date, upon receipt of the Termination Value for the applicable
Property, the Lessor shall execute the releases and take the other actions
described in Section 9.20(b) of the Participation Agreement.
(e) Upon the completion of any purchase of the Lessor's interest in the
applicable Property pursuant to this Article V, but not prior thereto, this
Lease shall terminate with respect to such Property, except with respect to
obligations and liabilities of the Lessee, actual or contingent, which have
arisen with respect to the applicable Property under the Operative Documents on
or prior to such date of purchase, and except for indemnification and other
obligations and liabilities which by the terms of this Lease or the other
Operative Documents survive termination of this Lease with respect to such
Property or the other Operative Documents.
(f) Notwithstanding any provisions of this Lease or the Participation
Agreement to the contrary, the Lessee will not be required to acquire title to
any Property until such time that all necessary filings and notifications under
the HSR Act or any similar Law shall have been made (including any filing or
provision of required
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additional information or documents) and the waiting period referred to in the
HSR Act applicable to such purchase shall have expired or been terminated
(without any objection or prohibition of such purchase). The Lessee hereby
covenants to use its best efforts to secure the prompt termination of such
waiting period without objection or prohibition. Notwithstanding the foregoing,
if the Lessee is precluded from acquiring the Lessor's interest in any Property
or any portion thereof pursuant to the HSR Act or any similar Law, the Lessee
shall pay the Termination Value with respect to such Property within the time
and in the manner described in this Article V as a consequence of the Lessee's
exercise or deemed exercise of its purchase option hereunder. However, if the
Lessee pays the Termination Value in compliance with the preceding sentence,
then the Lessee will be entitled to continue to lease the applicable Property
that the Lessee is precluded from acquiring for an additional rental payment of
$1 per annum under the terms and provisions of this Lease for an extended term
expiring on the earlier to occur of (i) one (1) year from the date the Lessee
delivers (or is deemed to have delivered) the Offer to Purchase or (ii) the date
that the Lessee is no longer precluded from purchasing the Lessor's interest in
such Property pursuant to the HSR Act or any similar Law. If the Lessee (or its
designee) does not purchase the Lessor's interest in the applicable Property
prior to the expiration of such extended term, then the Lessor shall thereafter
sell its interest in such Property and distribute the proceeds from such sale in
accordance with the Operative Documents. If, prior to the voluntary exercise by
the Lessee of the purchase options hereunder, the Lessee is unable to obtain a
ruling or an unqualified legal opinion (in form and substance and from
independent legal counsel, in each case, reasonably satisfactory to the Agent)
that a filing under the HSR Act or any similar Law is not required in order to
consummate such purchase, then the Lessor shall execute such conditional sales
contracts and other documents necessary to permit the Lessee to complete such
filing before irrevocably exercising its purchase option. As a condition to
executing such conditional sales contracts and other documents, the Lessee will
deliver to the Lessor an agreement obligating the Lessee to fully indemnify the
Lessor from all liabilities, damages, costs and expenses arising from the
execution of such documents and the completion of such filing.
Section 5.05 Alterations; Removal. (a) At any time, so long as no
Default, Event of Default, Environmental Trigger or Non-Performance Event has
occurred and is continuing, the Lessee may, at its sole cost and expense, make
Alterations to any Property or any portion thereof; provided, however, that (i)
except for an Alteration required by Legal Requirements, Insurance Requirements
or, with respect to the California Property, the Ground Lease, the fair market
value of such Property or any portion thereof will not be lessened by such
Alterations; (ii) except for an Alteration required by Legal Requirements,
Insurance Requirements or, with respect to the California Property, the Ground
Lease, such Alterations will not materially diminish the capacity, utility,
efficiency, or remaining useful life of such Property or any portion
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thereof; and (iii) such work will be completed in a good and workmanlike manner
free and clear of any Liens for labor, services or materials (other than
Permitted Encumbrances) and in compliance with all applicable Legal
Requirements, Insurance Requirements and, with respect to the California
Property, the Ground Lease.
(b) Title to all Alterations will vest in the Lessor (free and clear of
all Liens, except Permitted Encumbrances); provided, that title to Severable
Alterations shall vest in the Lessee.
(c) The Lessee will be permitted at any time during, or upon the
expiration or termination of, the Term, and at its sole cost and expense, to
remove or demolish any Severable Alterations to any Property in accordance with
prudent industry practices. For purposes of this Lease, a "Severable Alteration"
is any Alteration unless its removal will (i) materially impair the Intended Use
or materially reduce the fair market value of the applicable Property or any
portion thereof below their fair market value immediately prior to such
Alteration (assuming such Property is in the condition required by this Lease);
(ii) materially diminish the capacity, efficiency, utility or remaining useful
life of such Property or any portion thereof below the capacity, efficiency,
utility or remaining useful life immediately prior to such Alteration (assuming
such Property is in the condition required by this Lease); or (iii) cause a
violation of any Legal Requirement, Insurance Requirement or, with respect to
the California Property, the Ground Lease, or increase any risk of liability
under any Environmental Law or any risk to human health or the environment. Any
damage to any Property or any portion thereof caused by the removal of any
Alteration will promptly be repaired by the Lessee and the applicable Property
(and each and every portion thereof) will be restored to the condition (or the
reasonable equivalent thereof) as it existed immediately prior to the removal of
such Alterations (without regard to such Alterations), at the Lessee's sole cost
and expense. Upon any permitted removal or demolition of Alterations to which
the Lessor has title, the Lessor (at the sole cost and expense of the Lessee)
shall execute and deliver to the Lessee such instruments and releases as are
reasonably required to transfer the Alterations to the Lessee free and clear of
Liens created by the Operative Documents or otherwise created or caused by the
Lessor (other than any Liens created by or through the Lessee), in each case,
without representation or warranty (expressed or implied) of any kind except
that such Alterations are free and clear of any Lien created by the Operative
Documents or otherwise created or caused by the Lessor (other than any Liens
created by or through the Lessee).
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ARTICLE VI
CERTAIN COVENANTS OF THE LESSEE
Section 6.01 Taxes and Assessments. (a) The Lessee shall pay or cause
to be paid, subject to Section 6.01(b) of this Lease, all real property Taxes
attributable to any Property before the same become delinquent. If any of such
real property Taxes may legally be paid in installments, such real property
Taxes may be so paid in installments; provided that the Lessee pays all such
installments on or before the Expiration Date or earlier termination of this
Lease.
(b) So long as (A) no Termination Notice has been delivered, (B) no
Default, Event of Default, Environmental Trigger or Non-Performance Event has
occurred and is continuing, (C) the Lessee shall not have notified the Lessor
pursuant to Section 3.03(a)(ii) that it is terminating this Lease and releasing
all of its interest in the Properties or (D) the Lessee shall not have otherwise
surrendered or be required to surrender the Properties to the Lessor for any
reason (including pursuant to Article X), the Lessee will not be required, nor
will the Lessor have the right, to pay, discharge or remove any real property
Taxes or to pay any materialman's, laborer's or undischarged or unremoved Lien,
as long as the Lessee shall at its sole cost and expense contest, or cause to be
contested, diligently and in good faith, the existence, amount or validity
thereof by appropriate proceedings, which shall (i) in the case of any unpaid
real property Taxes attributable to any Property or any portion thereof or
undischarged or unremoved Lien, prevent the collection thereof from the Lessor
or against any Property or any portion thereof, (ii) prevent the sale,
forfeiture or loss of any Property or any portion thereof, and (iii) not subject
the Lessor, the Agent, the Certificate Holders, or the Note Holders to the risk
of any criminal liability or civil penalties or fines for failure to comply
therewith. The Lessee shall give such assurances as may be reasonably demanded
by the Lessor to insure ultimate payment of such real property Taxes or the
discharge or removal of any such materialman's, laborer's or mechanic's Lien and
to prevent any sale or forfeiture of any Property, or any portion thereof, or
any interference with or deductions from any Fixed Rent, Additional Rent or any
other sum required to be paid by the Lessee hereunder by reason of such
non-payment, non-discharge, non-removal or non-compliance.
(c) The Lessor shall cooperate with the Lessee in any contest and shall
allow the Lessee to conduct such contest (in the name of the Lessor, if
necessary) at the Lessee's sole cost and expense; provided that the Lessor will
not be required to execute any documents which would materially adversely affect
the fair market value, use or operation of any Property or any portion thereof
or be reasonably likely to subject the Lessor, the Agent, any Certificate Holder
or any Note Holder to any liability or result in the admission of liability,
guilt or culpability on the part of such Persons. The Lessee
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shall notify the Lessor of each such proceeding at least ten (10) days prior to
the commencement thereof, which notice will describe such proceeding in
reasonable detail.
(d) The Lessee shall, promptly after the final determination (including
appeals) of any contest brought by it pursuant to this Section 6.01, pay and
discharge all amounts which are determined to be payable therein and will be
entitled to receive and retain for its own account all amounts refunded and/or
rebated as a result of any such contest, and if the Lessor receives any amount
as a result of such contest to which it is not otherwise entitled pursuant to
this Lease, then it shall promptly return such amount to the Lessee.
Section 6.02 Compliance with Laws. (a) Subject to Section 6.01 and
Section 6.02(b), the Lessee shall, at the Lessee's sole cost and expense,
comply, and cause each Property to comply, in all material respects, with all
Legal Requirements.
(b) So long as (A) no Termination Notice has been delivered, (B) no
Default, Event of Default, Environmental Trigger or Non-Performance Event has
occurred and is continuing, (C) the Lessee shall not have notified the Lessor
pursuant to Section 3.03(a)(ii) that it is terminating this Lease and releasing
all of its interest in the Properties or (D) the Lessee shall not have otherwise
surrendered or be required to surrender the Properties to the Lessor for any
reason (including pursuant to Article X), the Lessee will not be required, nor
will the Lessor have the right to comply or cause any Property or any portion
thereof to comply with any applicable Legal Requirement, as long as the Lessee
shall at its sole cost and expense contest, or cause to be contested, diligently
and in good faith, compliance therewith, which shall (i) prevent the sale,
forfeiture or loss of any Property or any portion thereof, and (ii) not subject
the Lessor, the Agent, the Certificate Holders, or the Note Holders to the risk
of any criminal liability or civil penalties or fines for failure to comply
therewith. The Lessee shall give such assurances as may be reasonably demanded
by the Lessor to insure compliance in all material respects with such Legal
Requirement and to prevent any sale or forfeiture of any Property, or any
portion thereof, or any interference with or deductions from any Fixed Rent,
Additional Rent or any other sum required to be paid by the Lessee hereunder by
reason of such non-compliance.
Section 6.03 Certain Agreements. The Lessee shall, and (unless a
Default, Event of Default, Environmental Trigger or Non-Performance Event has
occurred and is continuing and the Lessor has revoked such authority) is hereby
authorized by the Lessor to, fully and promptly keep, observe, perform and
satisfy, on behalf of the Lessor, any and all obligations, conditions, covenants
and restrictions of or on the Lessor under the Ground Lease and any and all
material contracts involving any of the Properties or any portion thereof so
that there will be no default thereunder and so that the other parties
thereunder will be and remain at all times obliged to perform their
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obligations thereunder, and the Lessee, to the extent within its control, will
not permit to exist any condition, event or fact that could reasonably allow or
serve as a basis or justification for any such Person to avoid such performance.
Section 6.04 Liens. (a) Subject to Section 6.01, the Lessee will not
create or permit to be created or exist, and shall promptly remove and
discharge, any Lien upon this Lease, any Property or any other portion thereof
or interest therein, or upon any Fixed Rent, Additional Rent or other sum paid
hereunder, which Lien arises for any reason, including any and all Liens which
arise out of the ownership, leasing, use, condition, occupancy, demolition,
construction, installation, possession, repair or rebuilding of any Property or
any portion thereof or by reason of the failure to pay dues, fees or assessments
or by reason of labor or materials furnished or claimed to have been furnished
to the Lessee or for any Property or any portion thereof, but excluding Liens
created by the Operative Documents and any other Permitted Encumbrances. The
Lessee's obligation to remove any of the above-described Liens arising prior to
the termination of this Lease (or arising due to circumstances occurring prior
to the termination of this Lease) will survive the termination of this Lease.
Nothing contained in this Lease will be considered as constituting the consent
or request of the Lessor, express or implied, to or for the performance by any
contractor, laborer, materialman or vendor of any labor or services or for the
furnishing of any materials for any construction, installation, alteration,
addition, repair or demolition of or to the Property or any portion thereof.
(b) NOTICE IS HEREBY GIVEN THAT THE LESSOR IS NOT AND SHALL NOT BE
LIABLE TO ANY PARTY FURNISHING LABOR, SERVICES OR MATERIALS TO THE LESSEE, OR TO
ANYONE HOLDING OR POSSESSING ANY PROPERTY OR ANY PORTION THEREOF THROUGH OR
UNDER THE LESSEE, AND THAT NO MECHANIC'S OR OTHER SIMILAR STATUTORY LIENS FOR
ANY LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE LESSOR'S INTEREST
OR ESTATE IN ANY PROPERTY OR ANY PART THEREOF.
(c) The Lessor agrees that the Lessee during the Term shall have the
exclusive right (unless the Lessor has revoked such right with respect to the
Property as result of the occurrence and continuance of a Default, Event of
Default, Environmental Trigger or Non-Performance Event) to (i) secure
subdivision approvals, site plan approvals, annexation or de-annexation
approvals, zoning variances and Permits necessary or desirable for the
development, use, operation, maintenance or condition of any Property, the
Improvements or any portion thereof, (ii) to grant easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, operation, maintenance or
condition of any Property or (iii) release existing easements or other rights
and privileges in the nature of easements
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necessary or desirable for the use, operation, maintenance condition of any
Property, the Improvements or any portion thereof; provided that the fair market
value, marketability or use of such Property or any portion thereof is not
lessened by any such action. The Lessor agrees timely to execute such documents
and take all other actions as are reasonably requested, and otherwise cooperate
with the Lessee, in connection with the matters described above; provided,
however, that all costs and expenses incurred by the Lessor in connection
therewith shall be borne by the Lessee and that the Lessor shall not be required
to execute any documents which would, in the reasonable opinion of the Agent,
adversely affect the value, marketability or use of any Property or any portion
thereof or otherwise adversely affect the transactions contemplated by the
Operative Documents or the interests of the Lessor, the Agent, the Note Holders
or the Certificate Holders.
(d) The Lessee and the Lessor each hereby acknowledge that this Lease
will at all times be subject and subordinate to the Mortgages.
Section 6.05 Insurance. (a) During the Term, the Lessee will purchase
and maintain, or cause to be purchased and maintained, insurance with respect to
each of the Properties of the following types and in the following amounts, and
in no event in amounts less than those maintained by the Lessee or its
Affiliates for other similar facilities owned and/or operated by them:
(i) Property Insurance: All risk property insurance against
physical damage to each Property caused by perils now or hereafter
embraced by or defined in a manuscript "all risks" policy, including at
least such perils as customarily insured for similar properties in a
minimum amount as required by Section 6.05(b);
(ii) General Liability Insurance: Comprehensive general
liability (including contractual and completed operations), insurance
against claims for bodily injury (including death), personal injury and
property damage occurring in respect of each Property or resulting from
activities related to such Property, in the minimum combined single
limit amount of $4,000,000 per occurrence and $10,000,000 annual
aggregate for bodily injury (or death) and/or property damage; and
(iii) Other Insurance: Such other insurance, including
automobile liability, in such amounts and against such risks, as is
either (x) customarily carried by companies owning, operating or
leasing property or conducting businesses similar and/or similarly
situated to the Properties and/or the Lessee or (y) reasonably
requested from time to time by the Lessor.
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All of the insurance referenced in (i) through (iii) above shall contain such
limits consistent with insurance maintained by the Lessee with respect to
similarly situated properties and in any event consistent with industry
standards.
Such insurance will be written by companies that are nationally recognized
(including Lloyd's of London or other recognized international insurers with an
ISI rating of not less than BBB) and all primary insurance shall be written by
companies rated at least A-IX in the most recent edition of Best's Key Rating
Guide, or an equivalent rating from a nationally recognized rating agency or as
otherwise agreed to by the Agent, the Lessor and the Majority Holders, selected
by the Lessee. The insurance specified in Section 6.05(a)(i) will name the
Lessor, Xxxxx Fargo Bank Northwest, National Association (in its individual
capacity and as Trustee) and the Agent as additional insureds and loss payees,
as their interests may appear, and the insurance specified in Section
6.05(a)(ii) will name the Lessor, Xxxxx Fargo Bank Northwest, National
Association (in its individual capacity and as Trustee) and the Agent, on its
own behalf and on behalf of the Holders from time to time of the Instruments and
their assignees, as additional insureds.
(b) The insurance referred to in Section 6.05(a)(i) may be a blanket
policy and will (i) at all times be in an amount at least equal to the greater
of (x) one hundred percent (100%) of the full replacement cost value (without
depreciation) of the Properties and (y) the Termination Value for all
Properties; (ii) include a lenders' loss payable endorsement in favor of the
Lessor and any loss or damage under such insurance policies will be payable to
the Lessor to be held by the Lessor and applied pursuant to the terms of the
Participation Agreement; (iii) provide that the interests of the Lessor, the
Agent and the Holders from time to time of the Instruments will be insured
regardless of any breach or violation by the Lessee of any warranties,
declarations or conditions contained in such insurance; and (iv) provide that
such insurance will not be invalidated by any negligent act of the Lessee, nor
by any proceedings or notices thereof relating to any of the Properties or any
portion thereof, nor by legal title to, or ownership of any Property or any
portion thereof becoming vested in or by the Lessor or its agents, nor by use of
any Property or any portion thereof for purposes more hazardous than permitted
by such policy.
All policies of insurance required to be maintained pursuant to Section
6.05(a)(ii) which cover liability for bodily injury or property damage will
provide that all provisions of such insurance, except with respect to the limits
of insurance and any rights or duties specifically assigned to the named insured
will operate in the same manner as if there were a separate policy covering each
such insured and/or additional insured, without right of contribution from any
other insurance which may be carried by an insured and/or additional insured.
The insurance will be primary for claims covered as described in Section
6.05(a)(ii).
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Every policy required under Section 6.05(a) will (i) expressly provide
that it will not be canceled or terminated except upon sixty (60) days' written
notice to the Lessor and the Lessee, except in the case of cancellation or
termination due to a lapse for non-payment, in which case only ten (10) days'
written notice will be required; (ii) include a waiver of all rights of
subrogation against the Lessor, the Agent and the Holders from time to time of
the Instruments and a waiver of any recourse against the Lessor, the Agent or
the Holders from time to time of the Instruments for payment of any premiums or
assessments under any policy; and (iii) not contain a provision relieving the
insurer thereunder of liability for any loss by reason of the existence of other
policies of insurance covering any Property or any portion thereof against the
peril involved, whether collectible or not, if such other policies do not name
the Lessor, the Agent and the Holders from time to time of the Instruments as
additional insureds with loss payable as provided in the Lease. The Lessee shall
advise the Lessor promptly of any policy cancellation or any change adversely
affecting the coverage provided thereby.
(c) The Lessee shall deliver to the Lessor and the Agent the
certificates of ins urance evidencing the existence of all insurance which is
required to be maintained by the Lessee hereunder such delivery to be made (i)
as provided in the Participation Agreement, (ii) at least twenty-one (21) days
prior to the issuance of any additional policies or amendments or supplements to
any of such insurance, and (iii) on or before the expiration date of any such
insurance. The Lessee shall notify the Lessor and Agent of any nonrenewal of any
policy required hereunder and shall cause each insurer under each policy
required hereunder to give the Lessor notice of any lapse under any such policy.
The Lessee will not obtain or carry separate insurance concurrent in form, or
contributing in the event of loss, with that required by this Section 6.05
unless the Lessor, the Agent and the Holders from time to time of the
Instruments are named as additional insureds therein, with loss payable as
provided in this Lease. The Lessee shall immediately notify the Lessor, the
Agent and the Holders from time to time of the Instruments whenever any such
separate insurance is obtained and shall deliver to the Lessor the certificates
of insurance and any other documentation (other than blanket policies) required
by the Lessor evidencing the same as is required hereunder.
(d) The insurance requirements of this Section 6.05 will not be
construed to negate or modify the Lessee's obligations under Section 9.14 of the
Participation Agreement.
Section 6.06 Maintenance and Repair. (a) The Lessee, at its own cost
and expense, will ma nage and maintain the Properties in good operating order,
condition and repair (ordinary wear and tear excepted), in accordance with
prudent industry practice and in a manner consistent with that of other similar
properties owned or operated by the Lessee or its Affiliates similarly situated,
and will take all action, and will make all changes and repairs, structural and
nonstructural, foreseen and unforeseen,
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ordinary and extraordinary, which may be required to maintain the Properties in
good operating order, condition and repair (ordinary wear and tear excepted), in
accordance with prudent industry practice, and in compliance (1) with all Legal
Requirements (except to the extent failure to comply would not materially and
adversely affect any Property), all Insurance Requirements and, with respect to
the California Property, the Ground Lease, at any time in effect, and (2) with
any required maintenance procedures of the manufacturers of any item
constituting the Improvements, if applicable, relating to maintenance and
operation (if and so long as there are any manufacturer's warranties applicable)
necessary to preserve the manufacturer's warranties, if any, on such
Improvements. The Lessee shall, in accordance with prudent industry practice,
repair or replace each item constituting the Improvements that has become worn
out, damaged, inoperative or obsolete in whole or in part; provided, however,
that (i) to the extent consistent with the foregoing, the fair market value,
marketability or use of any Property will not be materially lessened and (ii)
such replacements will be of a type currently used in the industry for the same
purpose and having a remaining useful life at least as long as that of the
Improvements (or any part thereof), as the case may be, repaired or replaced
(prior to obsolescence, loss or damage and the like). All repairs, replacements
and rebuilding by the Lessee hereunder, to the extent permitted by Law, will
immediately become and will remain part of the applicable Property, subject to
this Lease. The Lessor will not be required to, and the Lessee hereby waives any
right to require the Lessor to, manage, maintain, replace, repair or rebuild any
Improvements or any part thereof and the Lessee waives any and all rights it may
now or hereafter have to make any repairs at the cost and expense of the Lessor
pursuant to any Legal Requirement, Insurance Requirement, the Ground Lease or
otherwise, at any time in effect.
(b) Except for Permitted Encumbrances, in the event that all or any
part of any of the Improvements encroach upon any adjoining or adjacent property
or right-of-way adjoining or adjacent to any Property or any portion thereof, or
violate any rights-of-way, permits, licenses, agreements or conditions affecting
any of the Properties or any portion thereof, or obstruct any easement or
right-of-way to which such Property or any portion thereof may be subject, then
the Lessee shall, at its sole cost and expense, either (i) contest such matter
pursuant to 6.01(b), (ii) obtain valid and effective Permits for or Consents to
such encroachments and/or violations (without any liability to the Lessor, the
Agent, the Certificate Holders or the Note Holders for which such parties are
not indemnified by the Lessee) or waivers or settlements of all claims,
liabilities and damages resulting therefrom, or (iii) make such changes,
including alteration or removal, to any Improvements (as the case may be) and
take such other action as is reasonably necessary to rectify such encroachments,
violations, hindrances, obstructions or impairments, subject to the Lessor's
consent if and to the extent required by Section 6.01(b).
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Section 6.07 Inspection Rights. (a) The Lessor, the Agent, the
Environmental Consultant, the Independent Engineer, the Appraiser and their
respective successors, assigns, representatives and agents (the "Lessor Group")
may, upon at least two (2) Business Days' advance written notice to the Lessee
(unless the Agent or the Lessor in its sole discretion has reason to believe
that a Default, Event of Default, Environmental Trigger or Non-Performance Event
has occurred, in which case no such notice shall be necessary), enter upon and
examine any Property or any portion thereof (including all records directly
related to such Property or any portion thereof) at reasonable times in
compliance with and subject to the Lessee's standard confidentiality, safety and
security procedures in effect from time to time; provided, further, that if a
Default, Event of Default, Environmental Trigger or Non-Performance Event has
occurred or if the Lessee has exercised its option to terminate this Lease
pursuant to Section 3.03(a)(ii), then the Lessee shall give the Lessor Group
such additional access to the Properties and to the Lessee's books and records
relating to the management, operation, use, maintenance, renovation,
construction or occupancy of the Properties as the Lessor Group may reasonably
require for any purpose relating to this Lease or to any Property, including for
marketing, selling, operating or otherwise disposing of such Property; and
provided further, that all such inspections upon the occurrence and during the
continuance of a Default, an Event of Default, Environmental Event or
Non-Performance Event will be at the expense of the Lessee.
(b) Subject to the provisions of Section 9.16 of the Participation
Agreement, if a Default, Event of Default, Environmental Event or
Non-Performance Event has occurred and is continuing or if the Lessee has
exercised its option to terminate this Lease pursuant to Section 3.03(a)(ii),
then the Lessee shall give or cause to be given to the Lessor Group such
additional access to the Properties or any portion thereof and to the Lessee's
books and records relating to the management, operation, use, maintenance,
renovation, construction or occupancy of the Properties or any portion thereof
as it may require for any purpose, including for marketing, selling, operating
or otherwise disposing of the Properties or any portion thereof.
Section 6.08 Assignments, Sublease, Etc. Except as expressly provided
in Section 2.03 or 5.04(a), the Lessee will not mortgage, pledge, assign,
sublease or otherwise encumber its interest in and to this Lease or the
Properties without the prior written consent of the Lessor, and any mortgage,
pledge, sublease or assignment of the Lessee's interest hereunder or in the
Properties in violation of this Section 6.08 will be null and void and of no
force or effect.
Section 6.09 Intellectual Property Rights; Applicable Permits. The
Lessee will do or cause to be done all things necessary to obtain, preserve,
renew and keep in full force and effect the Intellectual Property Rights,
Applicable Permits and other rights, licenses and rights-of-way required to
lease, use or operate each Property.
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ARTICLE VII
CONDEMNATION AND CASUALTY
Section 7.01 Condemnation and Casualty. (a) The Lessee hereby (subject
to the provisions hereinafter set forth) irrevocably assigns to the Lessor any
award or compensation or insurance payment or other proceeds to which the Lessee
may become entitled by reason of its interest in any Property or any portion
thereof if (i) such Property or any portion thereof, or any facility, edifice or
structure which furnishes or supplies any service upon which the use or
occupancy of such Property is dependent, in whole or in part, is damaged or
destroyed by fire, earthquake, tornado, hurricane or other casualty (each, a
"Casualty") or (ii) any Governmental Authority provides notice to the Lessor or
the Lessee of its intention to condemn, confiscate, seize or condemn any
Property or any portion thereof, or any facility, edifice or structure which
furnishes or supplies any service upon which the use or occupancy of any
Property is dependent, in whole or in part (each, a "Condemnation"). Any
Property or portion thereof affected by a Casualty or a Condemnation is hereby
referred to as the "Affected Property".
(b) The Lessee shall immediately thereafter notify the Lessor in
writing of any such Casualty or Condemnation. In addition, the Lessee shall
appear in any proceeding or action to defend, negotiate, prosecute or adjust any
claim for any award or compensation or insurance payment on account of any
Casualty or any such Condemnation and may take all appropriate action in
connection with any Casualty or any such Condemnation, including the employment
of counsel reasonably satisfactory to the Lessor. No settlement of any such
proceeding or action will be made by the Lessee or the Lessor without the prior
written consent of the other party hereto, which consent will not be
unreasonably withheld or delayed.
(c) Any and all amounts representing proceeds paid in connection with
any Condemnation or Casualty, as the case may be, to which the Affected
Property, the Lessee or the Lessor may be entitled (collectively, the
"Proceeds"), will, subject to Section 7.03(d), be paid over to the Proceeds
Trustee to be held in trust by such Proceeds Trustee and distributed pursuant to
this Section 7.01(c) and Sections 7.03 and 7.04 or pursuant to the Participation
Agreement, as appropriate (all such Proceeds, less the costs and expenses
incurred by the Lessor and the Lessee in collecting such amounts, but including
any reimbursement by the Lessee for costs and expenses in connection therewith
to which the Lessor, the Certificate Holders and the Note Holders are entitled
pursuant to the Operative Documents, are the "Net Proceeds"). If the Lessee
shall restore such Property, any Proceeds shall, subject to Section 7.03(d), be
paid over to the Lessee and used in accordance with Section 7.03. Any and all
reasonable charges, fees and expenses of the Proceeds Trustee will be paid from
the Net Proceeds. "Proceeds Trustee" means the Lessor.
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The Lessee agrees that this Lease controls the rights of the Lessor and
the Lessee in any such Proceeds paid or payable in connection with or as a
result of a Condemnation or Casualty and any rights of the Lessee (as same may
relate to rights between the Lessee and the Lessor, as distinct from rights the
Lessee may have against third parties other than the Lessor, the Agent, the Note
Holders or Certificate Holders) under any present or future Law to the contrary
are hereby waived.
Section 7.02 Condemnation or Casualty with Termination. (a) If a
Casualty or Condemnation occurs, then the Lessee shall promptly provide the
Lessor with a written estimate of the cost of restoration or replacement of the
Affected Property (which the Agent may have reviewed by an Independent Engineer
at the Lessee's sole cost and expense). If the cost of restoration or
replacement of the Affected Property in connection with a Casualty will exceed
$40,000,000 or if the Affected Property suffering such Casualty could not be
expected to be restored or replaced to an economic unit of substantially the
same value, operating condition, capacity, efficiency and useful life as existed
prior to such Casualty or such restoration or replacement could not be expected
to be completed in full prior to the Expiration Date or Extension Term
Expiration Date, as applicable, the Lessor or the Lessee will have the option,
each in their sole discretion, to deliver a Termination Notice with respect to
such Affected Property. If a Condemnation occurs with respect to any Property
and as a result thereof the operating condition, capacity, efficiency, and
useful life of such Property as existed prior to such Condemnation is materially
adversely affected, the Lessor or the Lessee will have the option, each in their
sole discretion, to deliver a Termination Notice with respect to such Property.
(b) In the event a Termination Notice is delivered pursuant to Section
7.02(a), the provisions of Section 5.03 shall apply.
Section 7.03 Condemnation or Casualty without Termination. (a) If a
Casualty or Condemnation occurs and neither the Lessor nor the Lessee has given
a Termination Notice in accordance with Section 7.02, then this Lease will
continue in full force and effect, and the Lessee shall, at its sole cost and
expense, promptly commence and diligently pursue to completion the rebuilding,
replacement or repair of any damage to the Affected Property caused by such
event in conformity with the requirements of Section 6.06, as applicable, in
order to restore the Affected Property (in the case of a Condemnation, as nearly
as practicable) to its previous value, operating condition, capacity, efficiency
and useful life immediately prior to such Casualty or Condemnation. To the
extent that such Affected Property will be restored by the Lessee, any Net
Proceeds shall be paid over to the Lessee and the Lessee shall use such Net
Proceeds to restore the Affected Property in accordance with the terms of this
Lease. In connection with such restoration the Lessee shall, before beginning
such restoration, submit a construction budget for such restoration for the
Lessor's approval, which will not be
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unreasonably withheld, conditioned or delayed; provided that (i) the Affected
Property can be restored to an economic unit of substantially the same character
and fair market value as existed immediately prior to such Casualty or
Condemnation and (ii) if the estimated cost to complete such restoration exceeds
the amount of Net Proceeds, the Lessor is, in its sole judgment, satisfied that
the Lessee has sufficient funds (the "Excess Funds") available to pay such
excess, which Excess Funds, subject to Section 7.03(d), will be deposited by the
Lessee with the Proceeds Trustee and distributed to the Lessee as hereafter
provided. If the conditions set forth in the foregoing proviso are not
satisfied, the Lessor may deliver a Termination Notice with respect to the
Affected Property in accordance with Section 7.02. The Lessee shall be entitled
to Net Proceeds only if it has paid the full Termination Value for such Affected
Property and the Termination Value shall be applied in accordance with Section
7.01(c) of the Participation Agreement.
(b) Such restoration work will be completed in a good and workmanlike
manner free and clear of all Liens for labor, services or materials (except
Permitted Encumbrances) and in compliance with all applicable Legal Requirements
and Insurance Requirements. Upon completion of such work, the Lessee shall cause
the Independent Engineer to deliver a certificate to the effect that final
completion of the work has occurred and the cost thereof does not exceed the
amounts set forth in the construction budget and that the operating condition of
the Affected Property, after taking into consideration the restoration, is at
least equivalent to the operating condition that existed immediately prior to
the Casualty or Condemnation assuming compliance with Section 6.06. All fees and
expenses of the Independent Engineer in connection with such Casualty will be at
the Lessee's sole cost and expense. Within forty-five (45) days of the delivery
of said certificate the Lessee shall deliver to the Agent duly executed Lien
waivers executed by each materialman or mechanic furnishing materials or labor
for restoration of the applicable Property, subject to the Lessee's right to
contest set forth in Section 6.01.
(c) The Lessee will be entitled to receive payment from (or, in the
case when held by the Lessee, apply) the Net Proceeds or the Excess Funds, as
the case may be, from time to time as such work of rebuilding, replacement or
repair progresses, but only after presentation of certificates of the
Independent Engineer, delivered by the Lessee to the Proceeds Trustee (with a
copy to the Lessor) from time to time as such work of rebuilding, replacement or
repair progresses. Each such certificate of the Independent Engineer will
describe the work for which the Lessee is requesting permission to pay or
requesting payment and the cost incurred by the Lessee in connection therewith
and will state that such work has been properly completed and that the Lessee
has not theretofore received payment for such work, or previously applied Net
Proceeds or Excess Funds to the payment of such work, and will be accompanied by
an Officer's Certificate of the Lessee certifying that no Default, Event of
Default or Non-Performance Event has occurred and is continuing and that the Net
Proceeds and Excess
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Funds held by the Proceeds Trustee or the Lessee, as applicable, are, to the
best of its knowledge, adequate to complete such rebuilding, replacement or
repair in accordance with this Section 7.03(c). Upon completion of and final
payment for such work, the Lessee's Officer's Certificate will be accompanied by
duly executed Lien waivers executed by each materialman or mechanic furnishing
materials or labor for which the Lessee requested permission to pay or requested
payment.
(d) Notwithstanding anything to the contrary in this Section 7.03, if
the Net Proceeds and Excess Funds which are or would be held by the Proceeds
Trustee at any time are equal to or less than $10,000,000 in the aggregate, such
amounts shall promptly be paid to (or retained by) the Lessee and applied by the
Lessee in accordance with the terms hereof.
Section 7.04 Temporary Condemnation or Lease Termination.
Notwithstanding any provision to the contrary contained in this Article VII, in
the event of any temporary Condemnation, this Lease will remain in full force
and effect, and provided no Default, Event of Default, Environmental Trigger or
Non-Performance Event has occurred and is continuing, the Lessee will be
entitled to receive the Net Proceeds allocable to such temporary Condemnation,
except that if this Lease expires or terminates during such temporary
Condemnation, then the Lessee will be entitled to the Net Proceeds allocable to
the period after the termination or expiration of this Lease only if it has paid
the Termination Value for the Properties.
ARTICLE VIII
ENVIRONMENTAL MATTERS
Section 8.01 Environmental Event. The Lessee shall promptly, but in any
case within five (5) Business Days, notify the Lessor and the Agent if (i) any
environmental event has occurred or any environmental condition is discovered
in, on, beneath, from or involving any Property or any portion thereof
(including the presence, emission or release of Hazardous Materials or the
violation of any applicable Environmental Law) for which a remediation or
reporting is required under applicable Environmental Law or (ii) the Lessee has
received notification that it, the Lessor, any Property or any portion thereof
is the subject of an Environmental Action that could reasonably be expected to
result in any ordered remediation or corrective action or other liability under
applicable Environmental Law (each of (i) and (ii) an "Environmental Event"; and
the Property or portion thereof involved in such Environmental Event, an
"Environmentally Affected Property").
Section 8.02 Environmental Trigger Termination. (a) Subject to the last
sentence of this Section 8.02, following the receipt of a notice pursuant to
Section 8.01,
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the Lessor or the Agent, each in its sole discretion, may require the Lessee to
cause the Environmental Consultant to conduct an environmental audit of such
Environmentally Affected Property, having a scope designed to evaluate the
existence and anticipated impact of the Environmental Event at issue, at the
cost and expense of the Lessee, and to provide a copy of the Environmental
Consultant's report on its audit to the Lessor, the Majority Holders and the
Agent, subject to the provisions of Section 9.16 of the Participation Agreement.
If it is the opinion of the Agent and the Environmental Consultant that an
Environmental Event has occurred or exists and the cost of remediation is
reasonably expected to exceed $15,000,000 or would result in a material adverse
effect on the use, value or condition of the Environmentally Affected Property
(an "Environmental Trigger"), then the Lessor or the Agent will have the option,
each in its sole discretion, to deliver, within thirty (30) days after receipt
of such report, a Termination Notice with respect to such Environmentally
Affected Property. In such event, the Lessee will be deemed to have delivered to
the Lessor, as of the date of such Termination Notice, an Offer to Purchase the
Lessor's interest in such Environmentally Affected Property in accordance with
Section 5.03. In such event, this Lease will terminate and the Lessee shall pay
to the Lessor the Termination Value for such Environmentally Affected Property
in accordance with Section 5.04.
(b) Nothing in this Section 8.02 is intended to limit in any manner the
indemnity of the Lessee set forth in Section 9.14 of the Participation
Agreement.
Section 8.03 Environmental Remediation. Upon the occurrence of an
Environmental Event, the Lessee shall immediately commence, or cause to be
commenced, at its sole cost and expense, such actions as may be necessary to
comply in all material respects with all applicable Environmental Laws and to
alleviate any significant risk to human health or the environment if the same
arises from a condition on or in respect of any Property or any portion thereof,
whether existing prior to, on or after the date of this Lease. Once the Lessee
commences such actions, the Lessee shall thereafter diligently and expeditiously
proceed to comply in a timely manner in all material respects with all
Environmental Laws and to eliminate any significant risk to human health or the
environment and shall, at the request of the Lessor or the Agent, give periodic
progress reports on its compliance efforts and actions. The right of the Lessor
and the Agent to receive such progress reports with respect to the relevant
Environmental Event shall cease upon the Lessee's completion of remediation of
such Environmental Event in accordance with the standards set forth in this
Section 8.03.
Section 8.04 Environmental Compliance. The Lessee shall, and it shall
require and ensure that any and all sublessees, employees, contractors,
subcontractors, agents, representatives, affiliates, consultants, occupants and
any and all other Persons under the control of or representing the Lessee, (i)
comply in all material respects with all applicable Environmental Laws in
connection with the occupancy, use or operation of
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each of the Properties, and (ii) use, employ, process, emit, generate, store,
handle, transport, dispose of and/or arrange for the disposal of any and all
Hazardous Materials in, on or, directly or indirectly, related to or in
connection with each of the Properties or any portion thereof in a manner
consistent with prudent industry practice and in compliance in all material
respects with all applicable Environmental Laws. The Lessor and the Lessee
hereby acknowledge and agree that the Lessee's obligations hereunder with
respect to Hazardous Materials and Environmental Laws are intended to bind the
Lessee with respect to matters and conditions on, in, under, beneath, from, with
respect to, affecting, related to, in connection with, or involving each of the
Properties or any portion thereof.
ARTICLE IX
REMEDIES
Section 9.01 General Remedies. In accordance with the terms and
conditions contained in this Lease, the Lessor may take all steps to protect and
enforce the rights of the Lessor or obligations of the Lessee hereunder, whether
by action, suit or proceeding at Law or in equity (for the specific performance
of any covenant, condition or agreement contained in this Lease, or in aid of
the execution of any power herein granted or for any foreclosure, or for the
enforceme nt of any other appropriate legal or equitable remedy) or otherwise as
the Lessor or the Agent deems necessary or advisable.
Section 9.02 Default Remedies. An Event of Default as defined in the
Participation Agreement constitutes an Event of Default under this Lease.
(a) Subject to Section 9.02(i), if an Event of Default has occurred and
is continuing, including an Event of Default involving the breach of a covenant,
condition or other provision hereof, then upon five (5) Business Days' prior
written notice by the Lessor to the Lessee, in addition to all other rights,
remedies or recourses available, the Lessor may, and if directed in writing by
the Majority Holders shall, either (i) terminate this Lease by issuing a
Termination Notice or (ii) terminate the Lessee's right to possession of each of
the Properties or any portion thereof.
(b) If the Lessor should elect to terminate this Lease as provided in
Section 9.02(a)(i), then this Lease and the estate hereby granted shall expire
and terminate at midnight on the fifth (5) Business Day (or such later date as
may be specified therein) after the date of such notice, as fully and completely
and with the same effect as if such date was the date herein fixed for the
expiration of the Term and all rights of the Lessee will terminate, but the
Lessee will remain liable as hereinafter provided.
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(c) Should the Lessor elect not to terminate this Lease, this Lease
shall continue in effect and the Lessor may enforce all the Lessor's rights and
remedies under this Lease including the right to recover the Fixed Rent and
Additional Rent as each becomes due under this Lease. For the purposes hereof,
the following do not constitute a termination of this Lease:
(i) Acts of maintenance or preservation of any of the
Properties or any portion thereof or efforts to relet any of the
Properties or any portion thereof, including termination of any
sublease of any Property to a third party and removal of such subtenant
from any Property;
(ii) The appointment of a receiver upon initiative of the
Lessor to protect the Lessor's interest under this Lease; and/or
(iii) The exercise of any rights under Section 11.01 or any
rights contained in the applicable Lease Supplement.
(d) If an Event of Default has occurred and is continuing, upon five
(5) Business Days' notice, the Lessor will ha ve (i) the right, whether or not
this Lease shall have been terminated pursuant to Section 9.02(a), to re-enter
and repossess the Properties or any portion thereof, as the Lessor may elect, by
summary proceedings, ejectment, any other legal action or in any other lawful
manner the Lessor determines to be necessary or desirable and (ii) the right to
remove all Persons and property therefrom. The Lessor will be under no liability
by reason of any such re-entry, repossession or removal. No such re-entry or
repossession of any Property or any portion thereof will be construed as an
election by the Lessor to terminate this Lease unless a Termination Notice is
given to the Lessee pursuant to Section 9.02(a)(i), or unless such termination
is decreed by a court or other governmental tribunal of competent jurisdiction.
Should the Lessor elect to re-enter any Property as herein provided or should
the Lessor take possession pursuant to legal proceedings or pursuant to any
notice provided for by Law or upon termination of this Lease of the Lessee's
right to possession of such Property or any portion thereof pursuant to Section
9.02(a) or otherwise as permitted by Law, the Lessee shall peaceably quit and
surrender such Property or any portion thereof to the Lessor. In any such event,
neither the Lessee nor any Person claiming through or under the Lessee, by
virtue of any Law, will be entitled to possession or to remain in possession of
such Property or any such portion thereof, but shall forthwith quit and
surrender suc h Property to the Lessor.
(e) At any time or from time to time after the re-entry or repossession
of any Property or any portion thereof pursuant to Section 9.02(d), whether or
not this Lease has been terminated pursuant to Section 9.02(a), the Lessor may
(but shall be under no obligation to) relet such Property or any portion
thereof, for the account of the Lessee, without notice to the Lessee, for such
term or terms and on such conditions and for such
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uses as the Lessor, in its sole and absolute discretion, may determine. The
Lessor may collect and receive any rents or other proceeds payable by reason of
such reletting. The Lessor will not be liable for any failure to relet any
Property or any portion thereof or for any failure to collect any rent due upon
any such reletting.
(f) No termination of this Lease or of the Lessee's right to possession
of any Property or any portion thereof pursuant to Section 9.02(a), or by
operation of Law, and no re-entry or repossession of such Property or any
portion thereof pursuant to Section 9.02(d), and no reletting of such Property
or any portion thereof pursuant to Section 9.02(e), will relieve the Lessee of
its liabilities and obligations hereunder, all of which will survive such
termination, re-entry, repossession or reletting.
(g) In the event of any termination of this Lease or of the Lessee's
right to possession of any Property or any portion thereof by reason of the
occurrence of an Event of Default, the Lessee shall pay to the Lessor all Fixed
Rent, Additional Rent and other sums required to be paid to and including the
date of such termination of this Lease or of the Lessee's right to possession;
and thereafter, until the end of the Term, whether or not such Property or any
portion thereof have been relet, the Lessee to the extent permitted by
applicable Law will be liable to the Lessor for, and shall pay to the Agent (on
behalf of the Lessor), on the days on which such amounts would be payable under
this Lease in the absence of such termination, re-entry or repossession, as
agreed current damages and not as a penalty: all Fixed Rent, Additional Rent and
other sums which would be payable under this Lease by the Lessee, in the absence
of such termination, re-entry or repossession, and all costs (including
attorneys' fees and expenses) incurred by the Lessor hereunder (payable on
demand) and all costs of any environmental remediation pursuant to Section 8.03.
(h) To the extent permitted by Law, at such time after the termination
or expiration of this Lease if the Lessee has paid all amounts required to be
paid by it under this Lease and the other Operative Documents and the Lessee has
discharged any and all obligations to the Lessor, the Certificate Holders and
the Note Holders, then the Lessor shall pay and assign to the Lessee, when
received, the net proceeds, if any, of any reletting effected for the account of
the Lessee pursuant to Section 9.02(e), and any residual interest in any
Property after deducting from such proceeds all of the Lessor's expenses in
connection with such reletting (including, but not limited to, all repossession
costs, brokerage commissions, attorneys' fees and expenses, employees' expenses,
alteration costs and expenses of preparation for such reletting and all costs of
any environmental remediation pursuant to Section 8.03).
(i) The Lessee may, at any time prior to exercise of any remedies by
the Lessor hereunder, elect, by written notice to the Lessor and the Agent, to
cure any Default, Event of Default or Non-Performance Event by purchasing the
Lessor's interest
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in the Properties to the extent that such purchase would cure (to the Agent's
sole satisfaction) a Default, Event of Default or Non-Performance Event and for
an amount equal to the Termination Value for the Properties.
Section 9.03 Lessee Default Repurchase Option. Notwithstanding the
foregoing, if an Event of Default has occurred, the Lessee may within five (5)
Business Days after the earliest of the Lessor's or Agent's notice of such
occurrence thereafter pay to the Agent, on behalf of the Lessor, an amount equal
to the Termination Value for the Properties in which event the Lessor will be
obligated to convey its interest in the Properties to the Lessee in compliance
with Section 5.04.
Section 9.04 Payment on Default. Subject to Section 9.02(i), if an
Event of Default has occurred, the Lessor will be entitled to recover from the
Lessee, and the Lessee will pay to the Agent (on behalf of the Lessor) on
demand, in lieu of all liquidated damages in respect of Fixed Rent beyond the
date of such demand (but in addition to any claim for current damages in respect
of Fixed Rent or Additional Rent and any other amounts due and payable to the
Lessor hereunder prior to the date of such demand), at any time after
termination of the Term of this Lease or re-entry or repossession of the
Properties, an amount equal to the Termination Value for the Properties, in
which event the Lessor will be obligated to convey its interest in the Property
to the Lessee in compliance with Section 5.04.
Section 9.05 Additional Rights. (a) No right or remedy hereunder will
be exclusive of any other right or remedy, but will be cumulative and in
addition to any other right or remedy hereunder or under the other Operative
Documents or now or hereafter existing at Law or in equity and the exercise by
the Lessor or the Agent of any one or more of such rights, powers or remedies
will not preclude the simultaneous exercise of any or all of such other rights,
powers or remedies. Failure to insist upon the strict performance of any
provision hereof or to exercise any option, right, power or remedy contained
herein will not constitute a waiver or relinquishment thereof for the future.
Receipt by the Lessor (or by the Agent on behalf of the Lessor) of any Fixed
Rent, Additional Rent, Residual Value Amount, Termination Value or other sum
payable hereunder or under any other Operative Document with knowledge of the
breach by the Lessee of any provision hereof will not constitute a waiver of
such breach, and no waiver by the Lessor of any provision hereof will be deemed
to have been made unless made in writing. The Lessor will be entitled to
injunctive relief in case of the violation or attempted or threatened violation
of any of the provisions hereof, a decree compelling performance of any of the
provisions hereof or any other remedy allowed to the Lessor at Law or in equity.
(b) Except as otherwise provided in Section 9.03, the Lessee hereby
waives and surrenders for itself and all those claiming under it, including
creditors of all
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kinds to the extent permitted by applicable Law, (i) any right and privilege
which they may have under any applicable Law or otherwise to redeem any Property
or any portion thereof or to have a continuance of this Lease after termination
of the Lessee's right of occupancy by Law or by any legal process or writ, or
under the terms of this Lease, or after the termination of the Term of this
Lease as herein provided and (ii) the benefits of any Law which exempts property
from liability for debt or for distress for rent.
(c) Subject to Section 9.02(i), if an Eve nt of Default exists
hereunder, the Lessee shall pay to the Agent (on behalf of the Lessor) on demand
all fees and out-of-pocket expenses incurred by the Lessor in enforcing its
rights under this Lease, including attorneys' fees and expenses.
ARTICLE X
SURRENDER
Section 10.01 Return of Property. If upon the expiration or termination
of the Term or the termination of the Lessee's possession of the Properties the
Lessee or its designee has not purchased the Lessor's interest in the Properties
as provided hereunder, the Lessee sha ll surrender the Properties including all
Improvements and Alterations thereon in accordance with all of the provisions of
this Article X.
Section 10.02 Condition; No Liens. (a) The Lessee shall surrender (i)
each of the Properties and the remaining Alterations in good operating condition
and with the efficiency and utility such Property had upon the commencement of
the Term and such Alterations had upon the addition thereof, except as repaired,
rebuilt, renovated, altered, added to or built as permitted or required under
this Lease and the other Operative Documents and except for ordinary wear and
tear, and (ii) each of the Properties with the remaining useful life such
Property had upon the commencement of the Term less the number of years in the
Term then expired. To the extent that any Property is, or any portion thereof
is, not in compliance with this Section 10.02(a) upon expiration or termination
of the Lease (except as a consequence of a Casualty or Condemnation, as to which
Article VII applies), the Lessee shall pay to the Agent (on behalf of the
Lessor) such additional amounts as are required to place such Property in
compliance therewith.
(b) The Lessee shall surrender each of the Properties to the Lessor
free and clear of all Liens, easements, consents and restrictive covenants and
agreements affecting such Property other than Permitted Encumbrances.
Section 10.03 Environmental Compliance. The Lessee shall surrender the
Properties in a condition such that it is in compliance with all applicable
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Environmental Laws then enacted and all regulations then proposed to the extent
such regulations contain retroactive requirements (regardless or whether the
deadline for such compliance would otherwise expire after the end of the Term).
Nothing contained in this Article X will relieve or discharge or in any way
affect the obligation of the Lessee to cure promptly pursuant to this Lease any
violations of Legal Requirements referred to in this Lease, or to pay and
discharge any Liens and Taxes against any Property, subject, however, to the
right of the Lessee to contest the same pursuant to the provisions of Sections
6.01(b) and 12.09. The Lessee shall cooperate, to the fullest extent permitted
by Law, with the Lessor, its subsequent lessees, operators or purchasers to
effect the transfer of all of the Lessee's Consents and Permits for each
Property to such Persons.
Section 10.04 Removal of Other Property. The Lessee, at its sole cost
and expense, shall remove from the Properties on or prior to expiration or
termination of this Lease, all property situated thereon that is not owned by
the Lessor or leased to the Lessor pursuant to the Ground Lease and shall repair
any damage caused by such removal and shall restore each Property to the
condition and working order (or reasonable equivalent thereof) in which it
existed immediately prior to the installation or removal of such property,
except for ordinary wear and tear. The Lessee shall indemnify and hold harmless
the Lessor, its successors and assigns against any loss, liability, cost,
expense, penalty or claim arising out of the Lessee's removal of such property
from each Property including any environmental liability arising therefrom. Any
such property of the Lessee not so removed will become the property of the
Lessor, and the Lessor may cause such property to be removed and disposed of,
and the cost of any such removal and disposition of the Lessee's property and of
repairing any damage caused by such removal and of the restoration of any
Property to the condition and working order (or reasonable equivalent thereof)
in which it existed immediately prior to the installation or removal of such
property, ordinary wear and tear excepted, will be borne by the Lessee.
Section 10.05 Return Conditions. Upon the election of the Lessee to
terminate this Lease pursuant to Section 3.03(a)(ii), or upon other termination
of this Lease, provided that the Lessee or its designee does not purchase the
Lessor's interest in the Properties, the Lessee shall provide, or cause to be
provided or accomplished, at the sole cost and expense of the Lessee, to or for
the benefit of the Lessor and the Holders of the Instruments, at least thirty
(30) days but not more than sixty (60) days prior to the Expiration Date or date
of such other termination of this Lease each of the following (collectively, the
"Return Conditions"):
(i) a copy of the Environmental Consultant's report,
satisfactory in form and substance to the Agent, the Lessor, the
Certificate Holders and the B-Note Holders, each in their reasonable
discretion, to the effect tha t, among other things, (A) each Property
is in compliance with all applicable Environmental Laws (irrespective
of whether the deadline for such compliance would otherwise
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expire after the Expiration Date) as determined by the Environmental
Consultant and Special Counsel selected by the Agent; (B) each Property
is free from all Hazardous Materials except those that are present in
amounts or concentrations that could not reasonably be anticipated to
give rise to a material liability for a removal or remediation and (C)
there is no pending or overtly threatened litigation, investigation or
other legal proceeding of any kind that could result in any liability
under applicable Environmental Laws to any Note Holder, any Certificate
Holder, the Agent or the Lessor or in the imposition of any Lien on any
Property;
(ii) a report of the Appraiser or Independent Engineer chosen
by the Lessor, satisfactory in scope and content to the Lessor, the
Agent, the B-Note Holders and the Certificate Holders, each in their
reasonable discretion, to the effect that (A) each Property has been
maintained in accordance with the terms and conditions of this Lease
and the other Operative Documents and the requirements of all Legal
Requirements, Applicable Permits and prudent industry standards; (B)
each Property meets or exceeds the original design specifications and
functionality requirements, ordinary wear and tear excepted; and (C) no
Condemnation or Casualty has occurred which has not been remedied in
accordance with the terms of this Lease and the Operative Documents;
(iii) ALTA form of extended coverage owner's title insurance
policy issued by the Title Company, marked "premium paid", in an
aggregate amount equal to the lesser of (i) the maximum insurable
amount or (ii) the aggregate principal amount of the B-Notes and
Certificate Amount of the Certificates, subject only to Permitted
Encumbrances and otherwise in form and substance satisfactory to the
Certificate Holders, the B-Note Holders, the Agent, the Lessor and
Special Counsel, to be delivered to the B-Note Holders, the Certificate
Holders, the Lessor, the Agent and Special Counsel, together with
copies of all documents relating to the Permitted Encumbrances referred
to therein, showing record title of the Lessor in the leasehold estate
of the Land, with respect to the California Property, a fee title of
the Lessor in the Land, with respect to the Maryland Property, and a
fee estate in the Improvements and also showing the Lessor as holder of
any necessary easements or rights-of-way or similar property rights and
containing such affirmative insurance and endorsements as the B-Note
Holders, the Certificate Holders, the Lessor, the Agent and Special
Counsel each requires;
(iv) all Fixed Rent and Additional Rent will have been paid in
full through such expiration or termination of the Term;
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(v) at the Lessor's request, the Lessee shall remove, or cause
the removal from each Property of, at the Lessee's sole expense, any
inventory, fixtures, machinery, equipment or other property belonging
to the Lessee or third parties in compliance with Section 10.04;
(vi) an Officer's Certificate (in form and substance
satisfactory to the Agent, the Lessor, the Certificate Holders and the
B-Note Holders) dated such date of termination of this Lease to the
effect that no Alterations to any Property have resulted in a material
and adverse effect on such Property's economic useful life or fair
market value;
(vii) if directed to do so by the Lessor, the Lessee (at its
expense) shall execute and deliver any and all further instruments,
agreements and documents as may, in the reasonable opinion of the
Lessor, be necessary to confirm the termination and expiration of this
Lease and to acknowledge that the Lessee from the date of termination
and expiration, ceases to have any interest in any Property under this
Lease and to confirm the Lessor's ownership of the fee or leasehold
interests or legal title (as appropriate) in or to the Properties;
(viii) an estoppel certificate from the Ground Lessor under
the Ground Lease with respect to the California Property, in form and
substance satisfactory to the Agent, the Lessor, the Certificate
Holders and the B-Note Holders, together with evidence satisfactory to
the Agent, the Lessor, the Certificate Holders and the B-Note Holders,
each in their reasonable discretion, that the Lessor otherwise has
title to, or other rights in respect of, each Property and other assets
or rights as may be necessary or appropriate either (1) to occupy each
Property or (2) to sell, lease, exchange, assign, encumber or otherwise
dispose of each Property, in each case in conformity with all Legal
Requirements, applicable Insurance Requirements, and contractual
commitments binding on such Property, including any licenses, easements
and rights-of-way;
(ix) a services agreement, in form and substance reasonably
satisfactory to the Agent, the Lessor and the Lessee, pursuant to which
the Lessee agrees to provide services, documents and other matters
necessary or useful for the ownership and operation of the Properties
for its Intended Use;
(x) receipt by the Agent of an agreement (the "Return
Indemnity Agreement") executed by the Lessee and satisfactory in form
and substance to all parties to the Participation Agreement, pursuant
to which the Lessee (i) represents, warrants and covenants that the
Return Conditions have been satisfied and will remain satisfied through
and immediately after the Expiration Date and (ii) agrees to indemnify
and hold harmless the Lessor, the Agent and the
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B-Note Holders and the Certificate Holders against any loss, cost,
expense, (including fees and expenses of legal counsel, accountants and
other professionals), tax, penalty or other liability of any kind
incurred as a consequence of the falsity or breach of the
representations, warranties and covenants of the Lessee described in
clause (i) above, subject to the limitations set forth in Section 6.03
of the Participation Agreement. The rights of Lessor under the Return
Indemnity Agreement will be assignable to any purchaser of all or any
part of any Property (or any other successor or assignee of the
Lessor);
(xi) evidence reasonably satisfactory to the Agent, the
Lessor, the Certificate Holders and the B-Note Holders that the
Property constitutes a separate and independent lot for all zoning,
subdivision and taxing purposes under applicable Law; and
(xii) an unconditional offer from the Lessee to the Lessor to
purchase from the Lessee the Equipment Collateral at a price equal to
the boxed and crated value of the Equipment Collateral on the loading
dock, net of de-installation and crating expense.
Section 10.06 Survival. The obligations of the Lessee under this
Article X will survive the expiration or any termination of the Term of this
Lease (whether by operation of Law or otherwise) for all matters described in
this Article X which occur or arise prior to such expiration or termination or
arise out of or result from facts, events, claims, liabilities, actions or
conditions occurring, arising or existing on or before such expiration or
termination.
ARTICLE XI
SECURITY; LESSOR WAIVERS
Section 11.01 Characterization. It is the intention of the parties that
the Lessee shall treat this Lease, for accounting purposes, as an operating
lease, and for all other purposes, including federal, state and local income
Tax, and commercial law and bankruptcy purposes, it is the intention of the
parties hereto that (i) this Lease and the corresponding Lease Supplement be
treated as either a mortgage, assignment of rents and security agreement or a
deed of trust, assignment of rents and security agreement and financing
statement or similar instrument with a POWER OF SALE (the "Lessee Mortgage")
from the Lessee, as mortgagor, to the Lessor, and that the Lessee, as grantor,
hereby has mortgaged, given, granted, bargained, sold alienated, enfeoffed,
conveyed, confirmed and assigned, WITH POWER OF SALE, and by these presents does
mortgage, give, grant, bargain, sale, alienate, enfeoff, convey, confirm and
assign WITH POWER OF SALE unto the Lessor, as mortgagee, a first and paramount
Lien on the
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Lessee's right, title and interest in the Mortgaged Property (as defined in the
applicable Lease Supplement), (ii) the Lessee Mortgage will secure the payment
and performance of the Secured Obligations, (iii) all payments of Fixed Rent and
Additional Rent shall be treated as payment of interest on the Secured
Obligations, and all payments of Termination Value and Residual Value Amount
shall be treated as payment of principal of the Secured Obligations, (iv) the
Lessor shall have all of the rights, powers and remedies of a mortgagee and/or
secured party available under applicable Law to take possession of and sell
(whether by judicial foreclosure, power of sale or otherwise) the Mortgaged
Property, (v) the effective date of the Lessee Mortgage will be the date of the
applicable Lease Supplement and (vi) the reference to Section 11.01 and the
recording of the applicable Lease Supplement shall be deemed to be the recording
of the Lessee Mortgage.
Section 11.02 Security Agreement. This Lease shall also be a security
agreement from the Lessee, as debtor, to the Lessor, as secured party, securing
the Secured Obligations, encumbering all personal property comprising the
Mortgaged Property, whether now owned or hereafter acquired and all proceeds
therefrom, all as more particularly described in the Lease Supplement applicable
to each Property.
Section 11.03 Lessor Waivers. The Lessor acknowledges the right of the
Lessee and any assignee or sublessee permitted pursuant to Section 5.01 or
Section 5.04 to finance and to secure under the Uniform Commercial Code,
inventory, furnishings, furniture, equipment, machinery, leasehold improvements
(provided such improvements constitute Severable Alterations) and all other
personal property located on, at, or under any Property, other than the
Equipment Collateral and the Improvements, and the Lessor agrees, so long as no
Event of Default, Non-Performance Event or Environmental Trigger has occurred
and be continuing, to execute, at the expense of the Lessee, lessor waiver forms
(including landlord waivers) in favor of any purchase money seller, lessor or
lender which has financed or provided or may finance or provide in the future
such items of personal property, such waivers shall bee in form and substance
reasonably satisfactory to the Lessor.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Notices, Demands and Other Instruments. All notices,
demands, offers, consents, approvals, instructions, requests and other
communications given pursuant to this Lease will be sent to the parties hereto
at the addresses set forth on Schedule I to the Participation Agreement and will
be given in the manner and shall be effective at the times and under the terms
set forth in Section 9.02 of the Participation
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Agreement. The Lessee shall send to the Agent copies of all notices, demands,
offers, consents, advices and other instruments hereunder sent to the Lessor.
Section 12.02 No Default Certificate. Each party hereto will, at the
reasonable request of the other party hereto, deliver to such other party a
certificate stating whether such first party has knowledge that, or has received
notice from any Person that, any Casualty, Condemnation, Default, Event of
Default, Environmental Event or Non-Performance Event has occurred and is
continuing.
Section 12.03 Severability. Except as expressly provided otherwise in
this Lease, each provision hereof will be separate and independent and the
breach of any such provision by the Lessee, or a breach of any obligation
hereunder by the Lessor, will not discharge or relieve the Lessee from its
obligations to perform each and every covenant to be performed by the Lessee
hereunder. If any provision hereof or the application thereof to any Person or
circumstance will be invalid or unenforceable, the remaining provisions hereof,
or the application of such provision to Persons or circumstances other than
those as to which it is invalid or unenforceable, will not be affected thereby,
and each provision hereof will be valid and will be enforceable to the extent
permitted by Law.
Section 12.04 Binding Effect; Amendments. All provisions contained in
this Lease will be binding upon, inure to the benefit of and be enforceable by,
the respective permitted successors and assigns of the Lessor and the Lessee to
the same extent as if each successor and assignee were named as a party hereto.
The Lessee may not assign its rights hereunder or any interest (by operation of
law or otherwise) herein without the prior written consent of the Lessor.
Subject to the provisions of Section 2.03 of this Lease and the other Operative
Documents, the Lessor may assign all or any portion of any Property and/or its
rights under this Lease. All amendments, waivers, consents or approvals arising
pursuant to this Lease will be consummated in accordance with the Participation
Agreement. Any amendment, waiver, consent or approval made otherwise than as
expressly permitted by this Section 12.04 will be null and void.
Section 12.05 Governing Law. THIS LEASE SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS TO
MATTERS RELATING TO THE CREATION OF THE LEASEHOLD ESTATES HEREUNDER AND THE
EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE
LOCATED. WITHOUT LIMITING THE FOREGOING, IN THE EVENT THAT THIS LEASE IS DEEMED
TO CONSTITUTE A FINANCING WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF THE
STATE OF NEW YORK,
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WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, WILL GOVERN THE CREATION, TERMS
AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY AND/OR ANY LEASE SUPPLEMENT,
BUT THE LIEN CREATED HEREBY AND/OR ANY LEASE SUPPLEMENT AND THE CREATION AND THE
ENFORCEMENT OF SAID LIEN WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED.
Section 12.06 Counterparts. The parties may sign this Lease in any
number of counterparts and on separate counterparts, each of which will be an
original but all of which when taken together will constitute one and the same
instrument, except that, if this Lease constitutes "chattel paper" within the
meaning of the UCC only one counterpart stamped or marked "COUNTERPART NUMBER
ONE" or "COUNTERPART NUMBER l" will constitute, to the extent applicable,
"chattel paper" or other "collateral" within the meaning of the Uniform
Commercial Code in effect in any jurisdiction.
Section 12.07 No Recourse. No recourse will be had against the Lessor,
the Agent, the Proceeds Trustee, any Certificate Holder or any Note Holder or
their respective successors, assigns, controlling persons, directors, officers,
partners, employees, agents or shareholders, and their successors and assigns
for any claim based on any failure by the Lessor in the performance or
observance of any of the agreements, covenants or provisions contained in this
Lease or any Lease Supplement and in the event of any such failure, recourse
will be had solely against the Properties; provided, however, that nothing
contained in this Lease shall be taken to prevent enforcement of this Lease or
of any claim against the Lessor or any other Person arising out of or in
connection with this Lease based on fraud, gross negligence or willful
misconduct of the Lessor or such other Person.
Section 12.08 Lessor's Right to Cure Lessee's Default. If the Lessee
fails to make any payment or perform any act required to be made or performed
under this Lease, the Lessor, without waiving any default or releasing Lessee
from any obligation, may (but will be under no obligation to) make such payment
or perform such act for the account and at the cost and expense of the Lessee,
and may enter upon the Property or any portion thereof for such purpose and take
all such action thereon as, at the Lessor's sole discretion, may be necessary or
appropriate therefor. No such entry will be deemed an eviction of the Lessee or
a breach of the Lessor's covenant for quiet possession pursuant to Section 2.03.
All sums so paid by the Lessor and all costs and expenses (including reasonable
attorneys' fees and expenses so incurred, together with interest thereon at the
Default Rate to the extent permitted by Law) will be paid by the Lessee to the
Agent (on behalf of the Lessor) on demand as Additional Rent.
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Section 12.09 Lessee's Right to Contest Real Property Taxes. The
Lessee, at its own cost and expense and in compliance with Section 6.01(c), will
have the sole right, at any time, to seek, in good faith, a reduction in the
assessed valuation of any Property or any portion thereof or to contest, in good
faith, any real or personal property taxes for any Property or any portion
thereof or to contest, in good faith, any dues, fees or assessments payable
under the Participation Agreement. The Lessor will cooperate with, but shall not
be required to join in, any proceeding or contest brought by the Lessee unless
the provisions of any Legal Requirement require that the proceeding or contest
be brought by or in the name of the owner of the applicable Property, provided
that the Lessor shall not be required to so cooperate unless all reasonable
costs and expenses of the Lessor in connection therewith are paid or reimbursed
by the Lessee. In that case the Lessor joins in the proceeding or contest or
permits it to be brought in the Lessor's name as long as the Lessee reimburses
the Lessor for any and all costs and expenses reasonably incurred by the Lessor
in connection therewith. The Lessee, on a final non-appealable determination of
the proceeding or contest, shall immediately pay, discharge and satisfy any
decision or judgment rendered, together with all costs, interest and penalties
incidental to the decision or judgment.
Section 12.10 Limitations on Amounts Payable. Notwithstanding anything
to the contrary contained in this Lease or any of the other Operative Documents,
the amounts which the Lessee is obliged to pay, as Fixed Rent pursuant to this
Lease and the other Operative Documents, and the amounts which the Lessor, the
Agent, the Certificate Holders and the Note Holders are entitled to receive as
Fixed Rent pursuant to this Lease and the other Operative Documents, are subject
to limitations pursuant to Section 9.17 of the Participation Agreement.
Section 12.11 Payments to the Agent. The Lessee hereby acknowledges,
and the Lessor hereby directs, that all payments of Fixed Rent, Additional Rent
and other sums due to the Lessor hereunder will be made to the Agent (on behalf
of the Lessor), to the account specified for the Agent in Schedule I to the
Participation Agreement.
Section 12.12 Remaining Moneys. Except as otherwise provided for herein
or in the Participation Agreement, any and all moneys remaining, and all
residual interests in the Properties after all payments of interest on and
principal of the Notes, and all payments of current yield on and the Certificate
Amount of the Certificates, all payments of other sums due to the parties
entitled thereto under the Operative Documents, have been made in accordance
with the Operative Documents, will be paid and assigned to the Lessee.
Section 12.13 Waiver of Trial by Jury. IN ANY ACTION OR PROCEEDING
UNDER OR RELATED TO THIS LEASE, THE OPERATIVE DOCUMENTS OR ANY AMENDMENT,
INSTRUMENT, DOCUMENT OR
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AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING, THE LESSOR AND THE LESSEE HEREBY AGREE THAT ANY SUCH ACTION OR
PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY, IRRESPECTIVE OF
WHICH PARTY COMMENCES SUCH ACTION OR PROCEEDING.
Section 12.14 Exculpation of the Lessor. It is expressly agreed,
anything herein to the contrary notwithstanding, that each and all of the
representations, warranties, covenants, undertakings and agreements herein made
on the part of the Lessor are made and intended not as personal representations,
warranties, covenants, undertakings and agreements by the Lessor, or for the
purpose or with the intention of binding the Lessor, personally, but are made
and intended for the purpose of binding only the Trust Estate and this Lease is
executed and delivered by the Lessor not in its own right but solely in the
exercise of the powers expressly conferred upon it as Trustee; and no personal
liability or personal responsibility is assumed by or will at any time be
asserted or enforceable against the Lessor on account of this Lease or on
account of any representation, warranty, covenant, undertaking or agreement of
the Lessor, either expressed or implied herein, all such personal liability, if
any, being expressly waived and released by the Lessee and by all Persons
claiming by, through or under it, and that all recourse against the Lessor under
this Lease will be limited to the Trust Estate.
Section 12.15 No Merger of Title. There will be no merger of this Lease
nor of the leasehold estate created by this Lease with the ownership of any
Property or the Alterations by reason of the fact that the same Person may
acquire, own or hold, directly or indirectly, this Lease or the leasehold estate
created by this Lease or any interest in this Lease or interest in the fee or
leasehold ownership of any Property or the Alterations and no such merger will
occur unless and until all Persons having any interest in (x) the leasehold
estate created by this Lease and (y) the ownership of such Property or the
Alterations, or any portion thereof, join in a written instrument effecting such
merger and duly record the same.
Section 12.16 Registered Instrument. (a) This Lease is a registered
instrument. The Lessee will keep a record of ownership (the "Record of
Ownership") in which it will register, and will register any transfer of, the
Lessor's interest in this Lease and in the rights to receive any payments
hereunder.
(b) No transfer by the Lessor (whether or not with the Lessee's
consent) of any interst in this Lease or in the rights to receive any payments
hereunder shall be permitted or effective unless such transfer is made upon the
Lessee's Record of Ownership. Prior to entry by the Lessee into the Lessee's
Record of Ownership of any transfer by the Lessor as provided in this Section
12.16, the Lessee shall deem and treat the Lessor as the owner of this Lease for
all purposes, provided that the Lessee shall
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register each such transfer promptly upon the occurrence thereof and shall
provide the Lessor with evidence thereof immediately upon written request.
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
duly executed by their respective Officers thereunto duly authorized as of the
date hereof.
LESSOR:
XXXXX FARGO BANK NORTHWEST,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Trustee of
RAC DISTRIBUTION STATUTORY
TRUST
By:_____________________________________
Name:
Title:
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Proprietary & Confidential
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 2001, before me personally came
, to me known, who, being by me duly sworn, did
depose and say that he is of Xxxxx Fargo Bank Northwest, National Association,
the national banking association described in and which executed the foregoing
instrument; and that he signed his name thereto by order of the Board of
Directors of such association.
______________________________
Notary Public
LEASE
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LESSEE:
RITE AID REALTY CORP.
By:________________________________
Name:
Title:
LEASE
Proprietary & Confidential
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On this day of , 2001, before me personally came
, to me known, who, being by me duly sworn, did
depose and say that he is of Rite Aid Realty Corp., the corporation described
in and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of such corporation.
______________________________
Notary Public
Schedule A
to the Lease
Exhibit A
Form of Lease Supplement
[Previously distributed]
