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EXHIBIT 10.5
[EXECUTION COPY]
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LEASE AND SECURITY AGREEMENT
Dated as of February 10, 1999
between
ALTERNATIVE LIVING SERVICES INC.,
as the Lessee
and
SELCO SERVICE CORPORATION,
as the Lessor.
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Acquisition and Improvement Program for a
Headquarters Office Facility
in Wauwatosa, Wisconsin
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This Lease has been executed in several counterparts. To the extent, if any,
that this Lease constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no lien on
this Lease may be created through the transfer or possession of any counterpart
other than the original counterpart containing the receipt therefor executed by
the Lessor on the signature page hereof.
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LEASE AND SECURITY AGREEMENT
THIS LEASE AND SECURITY AGREEMENT (this "Lease"), dated as of February
10, 1999, between SELCO SERVICE CORPORATION, an Ohio corporation, having its
principal office at c/o KeyCorp. Leasing, 00 Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx
00000, and ALTERNATIVE LIVING SERVICES INC., a Delaware corporation, having its
principal office at 000 X. Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxx
00000.
W I T N E S E T H:
WHEREAS, the Lessor wishes to finance the acquisition and development
of the Land and Improvements to be used by the Lessee;
WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee
desires to lease from the Lessor, the Property; and
WHEREAS, the Lessee, as Construction Agent, will construct certain
Improvements which as constructed will be the property of the Lessor and will
become part of the Property subject to the terms of this Lease;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions; Interpretation. Capitalized terms used but not
otherwise defined in this Lease have the respective meanings specified in
Appendix 1 to this Lease; and the rules of interpretation set forth in Appendix
1 to this Lease shall apply to this Lease.
ARTICLE II
PURCHASE AND LEASE
2.1. Acceptance and Lease of Property. Subject to the terms and
conditions of this Lease, on the Closing Date (i) the Seller shall convey to the
Lessor, and the Lessor shall accept delivery of, the Land together with any
Improvements thereon pursuant to the terms hereof (and subject to the conditions
set forth herein) and (ii) the Lessor shall demise and lease to the
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Lessee hereunder for the Term the Lessor's interest in the Land and in such
Improvements together with any Improvements which thereafter may be constructed
thereon pursuant to the Construction Agency Agreement or this Lease, and the
Lessee hereby agrees, expressly for the direct benefit of the Lessor, to lease
from the Lessor for the Term, the Lessor's interest in the Land together with
the Lessor's interest in any Improvements on the Land and in any Improvements on
the Land which thereafter may be constructed thereon pursuant to the
Construction Agency Agreement and this Lease.
2.2. Acceptance Procedure. The Lessee hereby agrees that the execution
and delivery by the Lessee of the Memorandum of Lease substantially in the form
of Exhibit B shall, without further act, constitute the irrevocable acceptance
by the Lessee of the Land and the Improvements, respectively, for all purposes
of this Lease and the other Operative Documents on the terms set forth therein
and herein, and that all of the Property, together with any Improvements
constructed thereon pursuant to the Construction Agency Agreement and this
Lease, shall be deemed to be included in the leasehold estate of this Lease and
shall be subject to the terms and conditions of this Lease as of the Closing
Date.
2.3. Lease Term. This Lease shall be in full force and effect on the
Documentation Date. Subject to the terms of the Construction Agency Agreement
regarding extensions of the Outside Completion Date, the Base Date (the "Base
Date") will occur upon delivery of the Lease Supplement on the earlier of (x)
the date of Completion and (y) the date corresponding to twelve (12) months
after the Closing Date, or, on account of a Force Majeure Event, the Outside
Completion Date. The Base Term (the "Base Term") shall begin on the Base Date
and end on the Expiration Date, unless the Base Term is earlier terminated in
accordance with the provisions of this Lease.
2.4. Title. The Property is hereby leased to the Lessee without any
representation or warranty, express or implied, by the Lessor and subject to the
rights of parties in possession, the existing state of title (including, without
limitation, Permitted Liens other than Lessor Liens) and all applicable
Requirements of Law. The Lessee shall in no event have any recourse against the
Lessor for any defect in or exception to title to the Property other than to the
extent resulting from Lessor Liens.
ARTICLE III
FUNDING OF ADVANCES
3.1. Lessor Commitment. Subject to the conditions and terms hereof,
the Lessor shall, upon the written request of the Lessee from time to time
during the Commitment Period, make Advances on Funding Dates for the purpose of
financing the acquisition, renovation and improvement of the Property, including
Land Acquisition Costs, Property Improvement Costs, Transaction Expenses,
Capitalized Interest and the fees owed pursuant to the Fee Letter.
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Notwithstanding any other provision hereof, the Lessor shall not be obligated to
make any Advance if, after giving effect thereto, the aggregate original amounts
of Advances would exceed the Commitment of the Lessor.
3.2. Procedures for Advances.
(a) With respect to each funding of an Advance, the Lessee, as
Construction Agent, shall give the Lessor prior written notice not
later than 10:00 a.m., New York City time, five (5) Business Days prior
to the date of the proposed funding, pursuant to a Funding Request
substantially in the form of Exhibit A (a "Funding Request"),
specifying the proposed Funding Date (the "Funding Date") and the
amount of Advance requested. Except as the parties may otherwise agree
in writing, (i) each Funding Date shall occur on the first (1st) day
(or if such day is not a Business Day, then the next succeeding
Business Day thereafter) of a month, and (ii) Advances shall be made
solely to provide the Construction Agent with funds with which to pay
or reimburse itself for Land Acquisition Costs, Property Improvements
Costs, Capitalized Interest, Transaction Expenses, the Arrangement Fee
and all fees paid or payable by the Lessee to the Lessor in connection
with the Operative Documents and any amounts paid or payable by Lessee
pursuant to Section 31.2 hereof. With respect to the initial Advance,
the Lessee may deliver a Funding Request no sooner than five (5)
Business Days but no less than two (2) Business Days prior to the
proposed Funding Date therefor, which is not required to be the first
(1st) day of the month, and in the event that the Lessor is unable to
obtain a Eurodollar Rate for the Advance requested in such Funding
Request, notwithstanding the definition of "Capitalized Interest" in
Appendix 1 hereto, the Lessor shall make available the Advance at the
Alternate Base Rate. Such Advance shall bear interest at the Alternate
Base Rate until the date on which the Lessor shall be able to obtain a
Eurodollar Rate for the amount of such Advance, at which time such
Advance shall convert and thereafter accrue interest at the Eurodollar
Rate; provided, however, that no such conversion shall occur unless the
Lessee shall have submitted a Funding Request in connection therewith.
(b) All remittances made by the Lessor for the funding of any
Advance shall be made on the applicable Funding Date in immediately
available federal funds by wire transfer to the account designated by
the Construction Agent, except that a portion of the initial Advance
shall be made (in accordance with instructions to be included in the
initial Funding Request) by wire transfer directly to the Seller and/or
to the Lessee to reimburse the Lessee for Transaction Expenses.
3.3. Capitalized Interest Advances. On each Payment Date occurring on
or prior to the Base Date, the Lessee, as Construction Agent, shall be deemed to
have requested an Advance (a "Capitalized Interest Advance") pursuant to Section
3.2 in an amount equal to the aggregate amount of accrued Capitalized Interest,
and unpaid amounts with respect to the fees
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owed pursuant to the Fee Letter and Transaction Expenses (for which invoices
have been received by Lessee sufficiently in advance pursuant to Section
31.1(a)), if any, due and payable on such Payment Date. The Funding Date with
respect to any such Capitalized Interest Advance shall be the relevant Payment
Date (provided that the Lessor's obligation to make a Capitalized Interest
Advance shall be subject to satisfaction of the conditions precedent set forth
in Section 4.3) and the proceeds of such payment shall be applied to pay such
accrued Capitalized Interest, and unpaid amounts with respect to the fees owed
pursuant to the Fee Letter and Transaction Expenses, if any. On each such
Funding Date, the Lease Balance shall be increased by an amount equal to the
Capitalized Interest Advance made on such date. The Lessor shall notify the
Lessee of the amounts to be capitalized and paid by each Capitalized Interest
Advance ten (10) days prior to the applicable Payment Date; provided, however,
that the failure of the Lessor to provide such notice shall not relieve the
Lessee of its obligation to pay same.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Documentation Date. The Documentation Date (the "Documentation
Date") shall occur on the earliest date on which the following conditions
precedent shall have been satisfied:
(a) Lease. This Lease shall have been duly authorized, executed
and delivered by the parties thereto.
(b) Construction Agency Agreement. The Construction Agency
Agreement shall have been duly authorized, executed and delivered by
the parties thereto.
(c) Fees. All fees due on the Documentation Date pursuant to the
Fee Letter shall have been paid.
(d) Lessee's Resolutions and Incumbency Certificate, etc. The
Lessee shall have delivered to the Lessor (i) a certificate of its
Secretary or an Assistant Secretary attaching and certifying as to (A)
the resolutions of the Board of Directors duly authorizing the
execution, delivery and performance by it of each Operative Document to
which it is or will be a party, (B) its certificate of incorporation
and by-laws, and (C) the incumbency and signature of persons authorized
to execute and deliver on its behalf the Operative Documents to which
it is a party and (ii) a certificate of good standing with respect to
it issued by the Secretary of State of the State of Wisconsin.
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(e) Opinion of Counsel to the Lessee. On or prior to the
Documentation Date, the Lessor shall have received an opinion of
counsel for the Lessee in form and substance satisfactory to the
Lessor.
(f) Certain Transaction Expenses. Counsel for the Lessor shall
have received, to the extent then invoiced, payment in full in cash of
all Transaction Expenses payable to such counsel pursuant to Section
31.1(a).
(g) Pledge Agreement. The Pledge Agreement shall have been duly
authorized, executed and delivered by the parties hereto.
(h) Construction Documents Assignment. The Construction Documents
Assignment shall have been duly authorized, executed and delivered by
the Construction Agent.
(i) Fee Letter. The Fee Letter shall have been duly authorized,
executed and delivered by the parties thereto.
4.2. Closing Date Conditions. The occurrence of the Closing Date (the
"Closing Date") is subject to the following conditions precedent:
(a) Operative Documents; No Default. Each of the Operative
Documents shall have been duly authorized, executed and delivered by
the Lessee in form and substance as agreed to by the parties hereto as
of the Closing Date, and shall be in full force and effect. No Default
or Event of Default shall exist under any of the Operative Documents to
which the Lessee is a party (either before or after giving effect to
the transactions contemplated by the Operative Documents), and the
Lessor shall have received a copy of each of the Operative Documents
fully executed by the Lessee (other than this Lease, of which the
Lessor shall receive the original). The Operative Documents (or
memoranda thereof), any supplements thereto and any financing
statements in connection therewith required under the Uniform
Commercial Code shall have been recorded, registered and filed, if
necessary, in such manner as to enable counsel to render the opinions
referred to in clause (c) below and to enable the title company to
issue the title insurance policies referred to in clause (i) below.
(b) Taxes. All taxes, fees and other charges in connection with
the execution, delivery, recording, filing and registration of the
Operative Documents shall have been paid or provisions for such payment
shall have been made to the reasonable satisfaction of the Lessor.
(c) Opinions of Counsel. Counsel to the Lessee in Wisconsin shall
have issued to the Lessor their opinions in form and scope satisfactory
to the Lessor.
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(d) Governmental Actions. All necessary (or, in the reasonable
opinion of the Lessor, advisable) Governmental Actions, in each case
required by any Requirement of Law applicable to the Property with
respect to obligations of Lessee which are to have been performed prior
to the Closing Date pursuant to this Lease, shall have been obtained or
made and be in full force and effect.
(e) Litigation. No action or proceeding shall have been
instituted, nor shall any action or proceeding be threatened in writing
against the Lessor or the Lessee, before any Governmental Authority,
nor shall any order, judgment or decree have been issued or proposed to
be issued by any Governmental Authority (i) to set aside, restrain,
enjoin or prevent the full performance of this Lease, any other
Operative Document or any transaction contemplated hereby or thereby or
(ii) which is reasonably likely to adversely affect the Lessee (except
where such violation is not material).
(f) Requirements of Law. The transactions contemplated by the
Operative Documents do not and will not violate any Requirement of Law
(except where such violation is not material) and do not and will not
subject the Lessor to any adverse regulatory prohibitions or
constraints.
(g) Responsible Employee's Certificate. The Lessor shall have
received a Responsible Employee's Certificate of the Lessee, in
substantially the form of Exhibit E, dated as of the Closing Date,
stating that for the Lessee (i) each and every representation and
warranty of the Lessee contained in each Operative Document to which it
is a party is true and correct on and as of the Closing Date; (ii) no
Default or Event of Default has occurred and is continuing under any
Operative Document with respect to the Lessee; (iii) each Operative
Document to which the Lessee is a party is in full force and effect
with respect to it; and (iv) the Lessee has duly performed and complied
with all covenants, agreements and conditions contained herein or in
any Operative Document required to be performed or complied with by it
on or prior to the Closing Date.
(h) Environmental Audit. The Lessor shall have received an
Environmental Audit for the Property in form and substance acceptable
to the Lessor.
(i) Survey and Title Insurance. The Lessee shall have delivered
to the Lessor an ALTA/1992 (Urban) Survey of the Property (other than
the Equipment) prepared by a licensed surveyor and meeting the Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys as
adopted by the American Land Title Association/American Society and
American Congress on Surveying and Mapping in 1992 certified to the
Lessor and the title company and otherwise in form reasonably
acceptable to the Lessor and an ALTA owners and lender's title
insurance policy covering the Property (other than the Equipment) in
favor of the Lessor, and a
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leasehold policy in favor of the Lessee evidencing the Lessee's
equitable ownership in the Property, each such policy to be dated as of
the Closing Date and in an amount not less than the Commitment of the
Lessor and to be reasonably satisfactory to the Lessor with
comprehensive, zoning and mechanics liens' endorsements and such other
endorsements reasonably requested by the Lessor.
(j) Recordation. The Lessor shall have received evidence
reasonably satisfactory to it that each of the Deed and the Memorandum
of Lease shall have been or are being recorded with the appropriate
Governmental Authorities (and the issuance of the title insurance
policies in clause (i) above shall be satisfactory evidence of the
foregoing), and the UCC Financing Statements with respect to the
Property shall have been or are being filed with the appropriate
Governmental Authorities.
(k) Construction Agency Agreement Supplement. On or prior to each
Closing Date, the Lessee shall have delivered to the Lessor a
Construction Agency Agreement Supplement with respect to the Property
fully executed by the Lessee, as Construction Agent, and the Lessor.
(l) Fees. All fees due on the Closing Date pursuant to the Fee
Letter shall have been paid.
(m) Certain Transaction Expenses. Counsel for the Lessor shall
have received, to the extent then invoiced, payment in full in cash of
all Transaction Expenses payable to Lessor's counsel pursuant to
Section 31.1(a).
All documents and instruments required to be delivered on the Closing Date shall
be delivered at the offices of Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or at such other location as may be reasonably determined by the
Lessor and the Lessee.
4.3. Conditions Precedent to each Advance. The obligation of the
Lessor to make an Advance on a Funding Date (including the initial Advance), is
subject to satisfaction or waiver of the following conditions precedent:
(a) Funding Request. The Lessor shall have received a fully
executed counterpart of the applicable Funding Request, executed by the
Lessee.
(b) Fees. The Lessee shall have paid, prior to the Lessor making
such Advance, all fees due and payable pursuant to Section 7.4.
(c) Accuracy of Representations and Warranties. On the applicable
Funding Date the representations and warranties of the Lessee contained
herein and in each of the other Operative Documents shall be true and
correct as though made on and as of
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such date, except to the extent such representations or warranties
relate solely to an earlier date, in which case such representations
and warranties shall have been true and correct on and as of such
earlier date.
(d) Litigation. Other than actions, suits or proceedings that are
being contested by the Lessee in good faith, on the applicable Funding
Date there shall not be any actions, suits or proceedings pending or,
to the knowledge of the Lessee, threatened in writing against the
Lessor or the Lessee (i) that are reasonably likely to have an adverse
effect on the Property (except for such adverse effects which are not
material) or (ii) that question the validity of the Operative Documents
or the rights or remedies of the Lessor with respect to the Lessee or
the Property under the Operative Documents.
(e) No Default. There shall not have occurred and be continuing
any Default or Event of Default under this Lease, and no Default or
Event of Default under this Lease will have occurred after giving
effect to the making of the Advance requested by such Funding Request.
(f) Commitment Amount. After giving effect to the applicable
Advance, the condition set forth in the last sentence of Section 3.1
shall not be violated.
(g) Cost of Completion. After giving effect to the applicable
Advance, the estimated as yet unpaid cost to the Construction Agent of
completing the Construction, in the aggregate, pursuant to the
Construction Documents shall not exceed the Available Commitment.
(h) Building Permits. All building permits required by any
Governmental Authority in connection with the Construction for which
the applicable Advance is being made shall have been obtained.
4.4. Post Closing Conditions. The following conditions shall be
satisfied by the Lessee:
(a) Architect's Certificate. Prior to the making of the Advance
which would result in the Lease Balance being equal to or exceeding
$5,000,000, the Lessor shall have received a certificate from the
Architect (to be paid for by funds from an Advance and added to the
Lease Balance) or as to individual matters, other qualified
professionals, in form and scope satisfactory to the Lessor, certifying
that (i) the Property as improved in accordance with the Plans and
Specifications and the contemplated use thereof by the Lessee will
comply with all Requirements of Law (except where such failure to
comply is not material) (including, without limitation, all zoning and
land use laws and Environmental Laws) and Insurance Requirements
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(except where such failure to comply is not material) and (ii) the
Plans and Specifications have been prepared in accordance with
applicable Requirements of Law (except where such failure to comply is
not material) (including, without limitation, applicable Environmental
Laws and building, planning, zoning and fire codes) and upon completion
of the Improvements in accordance with the Plans and Specifications,
such Improvements on the Property will not encroach in any manner onto
any adjoining land (except as permitted by express written easements or
as insured by appropriate title insurance).
(b) Appraisal. The Lessor shall have received prior to the making
of the Advance which would result in the Lease Balance being equal to
or exceeding $5,000,000 an Appraisal of the Property, which Appraisal
(to be paid for by funds from an Advance and added to the Lease
Balance) shall show that as of the Base Date, and as of the Expiration
Date, the Fair Market Sales Value of the Land and the Improvements to
be constructed thereon in accordance with the Plans and Specifications
shall not be less than the Commitment.
(c) Evidence of Insurance. Prior to the commencement of
Construction on the Property but in no event later than ten (10) days
subsequent to the Closing Date, the Lessor shall have received evidence
of insurance with respect to the Property (to be paid for by funds from
an Advance and added to the Lease Balance) required to be maintained
pursuant to this Lease, setting forth the respective coverages, limits
of liability, carrier, policy number and period of coverage, and
otherwise in accordance with Article XVII.
(d) Opinion of Counsel. Counsel to the Lessee shall have issued
to the Lessor on or prior to the date ten (10) days after the Closing
Date, their opinions in form and substance satisfactory to the Lessor
regarding certain matters set forth in Section 6.2(c).
The failure by the Lessee to comply with such conditions shall be an Event of
Default.
ARTICLE V
CONDITIONS TO COMPLETION
5.1. Conditions to Completion of the Property. Completion with respect
to the Property shall be deemed to have occurred for purposes of the Operative
Documents at such time as the Construction shall have been substantially
completed in accordance with the Plans and Specifications and all Applicable
Law, and the Property shall be ready for occupancy and operation, as evidenced
by certificates of the Architect, the Prime Contractor and the Construction
Agent and the issuance by the appropriate Governmental Authority of certificates
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of occupancy (or other approvals or assurances in lieu thereof which are
sufficient to permit the Lessee to occupy the Improvements lawfully) for all of
the Improvements contemplated by the Plans and Specifications, all in form and
substance reasonably satisfactory to the Lessor.
ARTICLE VI
REPRESENTATIONS
6.1. Representations of the Lessor. The Lessor represents and warrants
to the Lessee that:
(a) ERISA. The Lessor is not and will not be funding its Advances
hereunder, and is not performing its obligations under the Operative
Documents, with the assets of an "employee benefit plan" (as defined in
Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan"
(as defined in Section 4975(e)(1) of the Code).
(b) Status. The Lessor is a commercial bank, savings and loan
association, savings bank, pension plan, depository institution,
insurance company, branch or agency of a foreign bank or other similar
financial institution, or an Affiliate thereof. The Lessor is generally
engaged in the business, among other things, of leasing tangible
property and acts as the lessor in leasing such property to multiple
lessees.
(c) Power and Authority. The Lessor has the requisite power and
authority to enter into and perform under the Operative Documents to
which it is a party.
6.2. Representations of Lessee. The Lessee represents and warrants
to the Lessor that:
(a) Corporate Status. The Lessee is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, and the Lessee has the corporate power and authority to enter
into and perform its obligations under each of the Operative Documents
to which it is or will be a party and is duly qualified to do business
as a foreign corporation in good standing in the State of Wisconsin.
The Lessee has not failed to qualify or to be in good standing in any
other jurisdiction where the failure to qualify or to be in good
standing would have an material adverse effect on the business or
financial condition of the Lessee or the ability of the Lessee to
perform its obligations under the Operative Documents, except for such
effect which is not material.
(b) Enforceability. Each of the Operative Documents, in each case
to which the Lessee is or will be a party, when executed and delivered,
will constitute legal, valid and binding obligations of the Lessee,
enforceable against the Lessee in accordance with the respective terms
thereof, except as such enforceability may be
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limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally
and by general principles of equity and except, in the case of the
Lease, as limited by Applicable Laws which may affect the remedies
provided in the Lease, which laws, however, do not make the remedies
provided in the Lease inadequate for the practical realization of the
rights and benefits provided thereby.
(c) No Violation. The execution, delivery and performance by the
Lessee of each of the Operative Documents and the other agreements or
documents referred to herein or in any other Operative Document, in
each case to which it is a party, have been duly authorized by all
necessary corporate action on the part of the Lessee and have been duly
executed and delivered, do not require any approval or consent of the
Lessee, or any trustee or holders of any indebtedness or obligations of
Lessee which have not been duly obtained, and the execution, delivery
and performance by the Lessee of each of the Operative Documents to
which it is a party and such other agreements and documents do not
contravene the Articles of Incorporation or By-laws or Code of
Regulations of the Lessee or any Applicable Law which is applicable to
the Lessee or its Subsidiaries, or contravene any provision of, or
constitute a default under any indenture, mortgage, contract or other
agreement to which the Lessee is a party or by which it or its
properties may be bound or affected.
(d) Litigation. Except as otherwise disclosed on Schedule II,
there are no suits or proceedings pending or, to the knowledge of the
Lessee, threatened in writing against or affecting the Property or the
Lessee before any Governmental Authority that question the legality,
validity or enforceability of the Operative Documents or the rights or
remedies of the Lessor with respect to the Lessee or the Property under
the Operative Documents.
(e) Governmental Actions. All Governmental Actions required for
the execution and delivery of each of the Operative Documents to which
the Lessee is or will be a party, have been obtained or made or, by the
Documentation Date, will be obtained or made, and are or, by the
Documentation Date, will be in full force and effect, and with respect
to each Funding Date, all Governmental Actions required for the
performance by the Lessee of its obligations under such Operative
Documents, and which performance is contemplated to have occurred by
such Funding Date, have been obtained or made and are in full force and
effect, and no such Governmental Actions are subject to any pending or,
to the best knowledge of the Lessee, threatened in writing, suit,
action, inquiry, investigation, proceeding or appeal (administrative,
judicial or otherwise).
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(f) Investment Company Act. The Lessee is not an "investment
company" or a company "controlled" by an "investment company," within
the meaning of the Investment Company Act.
(g) Taxes. All Taxes, if any, due and payable in connection with
the execution, delivery, recording and filing of the Operative
Documents in connection with the transactions contemplated hereby,
shall have been paid in full on the Documentation Date (or arrangements
for payment have been made satisfying Section 4.1(b)) with respect to
Taxes incurred in connection with the transactions to be consummated on
such date.
(h) Prohibited Transactions. Assuming the accuracy of the
Lessor's representation in Section 6.1(a), the execution and delivery
by the Lessee of this Lease and the other Operative Documents to which
the Lessee is or is to become a party will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975
of the Code.
(i) Environmental Laws. Except with respect to (y) any
Environmental Laws or Government Actions the compliance with which the
Lessee is contesting as permitted pursuant to the terms hereof and
which contest the Lessee shall have previously disclosed to the Lessor
in writing, and (z) any remedial activity being conducted by Lessee or
any other Environmental Violation permitted by this Lease, the Lessee
has, to its knowledge, complied and is now in material compliance with
all Environmental Laws and any Governmental Actions issued under such
Environmental Laws, as such Governmental Actions and Environmental Laws
relate to the Property. Except as otherwise set forth in this
subsection (i), to the Lessee's knowledge, there are no circumstances
that would reasonably be expected to prevent or interfere with the
Lessee's ability to operate and maintain the Property (A) as
contemplated by the Operative Documents and (B) in compliance in all
respects with all applicable Environmental Laws and Governmental
Actions (except where such failure is not material). All known
Governmental Actions required under Environmental Laws to operate and
maintain the Property (A) have been duly obtained, made or given or
applied for, (B) where obtained, made or given are in full force and
effect and, where applied for, Lessee has no reasonable basis to
conclude that such will not be obtained, and, (C) upon the request of
the Lessor, copies thereof will be furnished to counsel to the Lessor.
Except as otherwise set forth in this subsection (i), there are no
unresolved past or pending or, to the knowledge of the Lessee,
threatened Environmental Claims against the Lessee with respect to the
Property. Except as otherwise set forth in this subsection (i), to the
knowledge of the Lessee, there are no present or past actions,
activities, circumstances, conditions, events or incidents arising from
the use, operation or maintenance of the Property, including, without
limitation, the release, emission, discharge, presence or disposal of
any Hazardous Substance from the Property that
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would reasonably be expected to (i) form the basis of an Environmental
Claim against the Lessee with respect to the Property and (ii) have a
material adverse effect on the value or the operating condition of the
Property or impair the Lessor's title thereto.
(j) Offer of Securities, etc. Except as contemplated by the
Operative Documents, the Lessee has not offered any interest in the
Property or the Lease, or any similar securities of the Lessee, to, or
solicited any offer to acquire any of the same from any Person, in
violation of Section 5 of the Securities Act or any state securities
laws, nor has it authorized any Person to take any such action, and the
Lessee has not taken any action which would subject any interest in the
Property or the Lease to the registration requirements of Section 5 of
the Securities Act or any state securities laws provided that the
Lessee makes no representations as to any actions taken by or offers
made by the Lessor.
(k) Financial Statements. The consolidated balance sheet of the
Lessee and its consolidated subsidiaries as at September 30, 1998 and
the consolidated statements of income and changes in financial position
for the fiscal year then ended, fairly present the financial condition
of the Lessee and its consolidated subsidiaries in all respects for the
periods then ended on such dates, all in accordance with GAAP
consistently applied.
(l) Property. The Property as improved in accordance with the
Plans and Specifications and the contemplated use thereof by the Lessee
and its agents, assignees, employees, lessees, licensees and tenants
will comply with all Requirements of Law (including, without
limitation, all zoning and land use laws and Environmental Laws) and
Insurance Requirements, except for such Requirements of Law as the
Lessee shall be contesting in good faith by appropriate proceedings.
Except as otherwise disclosed on Schedule II, there is no action, suit
or proceeding (including any proceeding in condemnation or eminent
domain or under any Environmental Law) pending or, to the best of the
Lessee's knowledge, threatened in writing with respect to the Lessee,
its Affiliates or the Property which adversely affects the title to, or
the use, operation or value of, the Property.
(m) Plans and Specifications. Upon Completion of the Construction
all water, sewer, electric, gas, telephone and drainage facilities and
all other utilities required to adequately service such Improvements
for its intended use will be available pursuant to adequate permits
(including any that may be required under applicable Environmental
Laws). Upon Completion of the Construction the Property will have
available all services of public facilities and other utilities
necessary for use and operation of the Property and the other
Improvements for their primary intended purposes including, without
limitation, adequate water, gas and electrical supply, storm and
sanitary sewerage facilities, telephone, other required public
utilities and means of
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access between such Improvements and public highways for pedestrians
and motor vehicles. All utilities serving the Property, or proposed to
serve the Property in accordance with the related Plans and
Specifications, are located in, and vehicular access to the
Improvements on the Property is provided by, either public
rights-of-way abutting the Property or Appurtenant Rights. All
licenses, approvals, authorizations, consents, permits (including,
without limitation, building, demolition and environmental permits,
licenses, approvals, authorizations and consents), easements and
rights-of-way, including proof and dedication, required for (x) the
use, treatment, storage, transport, disposal or disposition of any
Hazardous Substance on, at, under or from the Property during the
construction of the Improvements thereon, and (y) construction of the
Improvements in accordance with the Plans and Specifications and the
Construction Agency Agreement have either been obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, or will be obtained from the
appropriate Governmental Authorities having jurisdiction or from
private parties, as the case may be, prior to commencing of the
relevant portion of any such construction or use and operation.
(n) Title. The Deed as delivered on the Closing Date is in form
and substance sufficient to convey good and marketable title to the
Property in fee simple, subject only to Permitted Liens. The Lessor
will at all times during the Term have good title to all Equipment
located on the Property and in any Improvements, subject only to
Permitted Liens.
(o) Insurance. The Lessee has obtained insurance coverage
covering the Property which meets the requirements of this Lease, and
such coverage is in full force and effect.
(p) Flood Hazard Areas. No portion of the Property is located in
an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, or if the
Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency, then flood insurance has been obtained for the Property in
accordance with Section 17.2 and in accordance with the National Flood
Insurance Act of 1968, as amended.
(q) Defaults. There has not occurred any Event of Default which
is presently continuing.
(r) Use of Advances. No part of any Advance will be used directly
or indirectly for the purpose of purchasing or carrying, or for payment
in full or in part of any indebtedness of the Lessee that was incurred
for the purposes of purchasing or carrying, any margin security as such
term is defined in Section 207.2 of Regulation G
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of the Board of Governors of the Federal Reserve System (12 C.F.R.,
Chapter II, Part 207).
(s) Solvency. Taking into consideration the transactions
contemplated by this Lease and the other Operative Documents, the
Lessee reasonably believes that: (a) the fair value of the Lessee's
assets on a going concern basis exceeds the total amount of liabilities
of the Lessee, valued at the reasonably probable liability of the
Lessee with respect thereto, (b) the Lessee can pay its obligations as
they become due and (c) the Lessee does not have an unreasonably small
capital base with which to conduct its business.
6.3. Representations of the Lessee with respect to each Advance. The
Lessee represents and warrants to the Lessor as of each Funding Date on which an
Advance is made as follows:
(a) Representations. The representations and warranties of the
Lessee set forth in the Operative Documents (including the
representations and warranties set forth in Section 6.2) are true and
correct in all respects on and as of such Funding Date, except to the
extent such representations or warranties relate solely to an earlier
date, in which case such representations and warranties shall have been
true and correct on and as of such earlier date. The Lessee is in
compliance with its respective obligations under the Operative
Documents and no Default or Event of Default has occurred and is
continuing under this Lease, or the Construction Agency Agreement, or
any other Operative Document to which the Lessee is a party. No Default
or Event of Default under this Lease, the Construction Agency Agreement
or, any other Operative Document to which the Lessee is a party will
occur as a result of, or after giving effect to, the Advance requested
by the Funding Request on such date.
(b) Improvements. The Construction of the Improvements to date
has, to the knowledge of the Lessee, been performed in all respects in
a good and workmanlike manner, substantially in accordance with the
Plans and Specifications and in compliance with all Insurance
Requirements and Requirements of Law.
(c) Liens. The Lessee has not permitted Liens to be placed
against the Property other than Permitted Liens.
(d) Advance. With respect to each Advance other than a
Capitalized Interest Advance, the amount of the Advance requested
represents amounts owed by or to the Lessee or Construction Agent in
respect of Property Improvements Costs, Land Acquisition Costs,
Transaction Expenses, the Arrangement Fee and any other appropriate
amounts paid or payable by the Lessee prior to the date of such Advance
and for which the Lessee has not previously been reimbursed by an
Advance. With
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respect to each Advance (including Capitalized Interest Advances), the
conditions precedent to such Advance set forth in Article IV have been
satisfied or waived in writing by the Lessor.
ARTICLE VII
PAYMENT OF RENT; FEES
7.1. Rent.
(a) The Lessee, as Construction Agent, shall to the extent not
funded by Advances, pay Capitalized Interest then due on each Payment
Date prior to the commencement of the Base Term. The Lessee shall pay
Basic Rent on (i) each Payment Date during the Term, (ii) the date
required under Section 24.1(i) in connection with the Lessee's exercise
of the Remarketing Option, and (iii) any date on which this Lease shall
terminate.
(b) Rent shall be due and payable in lawful money of the United
States and shall be paid by a Capitalized Interest Advance (in the case
of Capitalized Interest) or by wire transfer of immediately available
funds on the due date therefor to such account or accounts at such bank
or banks or to the Lessor or in such other manner as the Lessor shall
from time to time direct in a written notice to the Lessee. The Lessor
shall provide written notice of the amount of Basic Rent due at least
five (5) days prior to each due date therefor; provided, however, that
the failure of the Lessor to provide such notice shall not affect
Lessee's obligations hereunder or impose liability on Lessor.
(c) Neither the Lessee's inability or failure for any reason
whatsoever to take possession of all or any portion of the Property
when delivered by the Lessor, shall delay or otherwise affect the
Lessee's obligation to pay Rent for such Property in accordance with
the terms of this Lease.
7.2. Payment of Rent. Rent shall be paid absolutely net to the Lessor,
so that this Lease shall yield to the Lessor the full amount thereof, without
setoff, deduction or reduction.
7.3. Supplemental Rent. The Lessee shall pay to the Lessor any and all
Supplemental Rent promptly as the same shall become due and payable, and if the
Lessee fails to pay any Supplemental Rent, the Lessor shall have all rights,
powers and remedies provided for herein or by law or equity or otherwise in the
case of nonpayment of Capitalized Interest or Basic Rent. The Lessee shall pay
to the Lessor, as Supplemental Rent, among other things, on written demand, to
the extent permitted by applicable Requirements of Law, interest at the
applicable Overdue Rate on any installment of Capitalized Interest or Basic Rent
not paid when
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due or demanded by the Lessor for the period for which the same shall be overdue
and on any payment of Supplemental Rent not paid when due or demanded by the
Lessor for the period from the due date or the date of any such demand, as the
case may be, until the same shall be paid. The expiration or other termination
of the Lessee's obligations to pay Capitalized Interest or Basic Rent hereunder
shall not limit or modify the obligations of the Lessee with respect to
Supplemental Rent. Unless expressly provided otherwise in this Lease, in the
event of any failure on the part of the Lessee to pay and discharge any
Supplemental Rent as and when due, the Lessee shall also promptly pay and
discharge any fine, penalty, interest or cost which may be assessed or added
under any agreement with a third party for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
7.4. Fees. The Lessee shall pay on the Closing Date all fees payable
pursuant to the Fee Letter, which fees shall be funded from the initial Advance
and will be capitalized and included in the Lease Balance. The Lessee shall
further pay all fees payable after the Closing Date pursuant to the Fee Letter
in accordance with the terms thereof.
7.5. Method of Payment. Each payment of Rent or any other amount due
hereunder that is not paid with the proceeds of a Capitalized Interest Advance
shall be made by the Lessee to the Lessor prior to 1:00 p.m., New York City time
at the place of payment designated in writing by the Lessor in funds consisting
of lawful currency of the United States of America which shall be immediately
available on the scheduled date when such payment shall be due, unless such
scheduled date shall not be a Business Day, in which case such payment shall be
made on the next succeeding Business Day. Payments received after 2:00 p.m., New
York City time on the date due shall for the purpose of Section 20.1 hereof be
deemed received on such day; provided, however, that for the purposes of the
second sentence of Section 7.3 hereof, such payments shall be deemed received on
the next succeeding Business Day and, unless the Lessor is otherwise able to
invest or employ such funds on the date received, subject to interest at the
Overdue Rate as provided in such Section 7.3.
ARTICLE VIII
QUIET ENJOYMENT; RIGHT TO INSPECT
8.1. Quiet Enjoyment. Subject to Sections 2.4 and 8.2, and subject to
the rights of the Lessor contained herein and the other terms of the Operative
Documents to which the Lessee is a party, the Lessee shall peaceably and quietly
have, hold and enjoy the Property for the Term, free of any claim or other
action by the Lessor or anyone claiming by, through or under the Lessor (other
than the Lessee) with respect to any matters arising from and after the Closing
Date. Such right of quiet enjoyment is independent of, and shall not affect the
Lessor's rights otherwise to initiate legal action to enforce, the obligations
of the Lessee under this Lease.
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8.2. Right to Inspect. During the Term, the Lessee shall, upon
reasonable notice from the Lessor (except that no notice shall be required if an
Event of Default under this Lease has occurred and is continuing), permit the
Lessor and its authorized representatives to inspect the Property during normal
business hours, provided that such inspections shall not unreasonably interfere
with the Lessee's business operations at the Property.
ARTICLE IX
NET LEASE, ETC.
9.1. Net Lease. This Lease shall constitute a net lease. Any present
or future law to the contrary notwithstanding, this Lease shall not terminate,
nor shall the Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall
the obligations of the Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (i) any defect in the condition, merchantability, design,
construction, quality or fitness for use of the Property or any part thereof, or
the failure of the Property to comply with all Requirements of Law, including
any inability to occupy or use the Property by reason of such non-compliance;
(ii) any damage to, removal, abandonment, salvage, loss, contamination of or
Release from, scrapping or destruction of or any requisition or taking of the
Property or any part thereof; (iii) any restriction, prevention or curtailment
of or interference with any use of the Property or any part thereof including
eviction; (iv) any defect in title to or rights to the Property or any Lien on
such title or rights or on the Property (other than Lessor Liens); (v) any
change, waiver, extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by the Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to the Lessee or any other Person, or any action
taken with respect to this Lease by any trustee or receiver of the Lessee or any
other Person, or by any court, in any such proceeding; (vii) any claim that the
Lessee has or might have against any Person, including without limitation the
Lessor and any vendor, manufacturer, contractor of or for any portion of the
Property; (viii) any failure on the part of the Lessor to perform or comply with
any of the terms of this Lease (other than performance by Lessor of its
obligations set forth in Section 2.1 hereof), of any other Operative Document or
of any other agreement; (ix) any invalidity or unenforceability or illegality or
disaffirmance of this Lease against or by the Lessee or any provision hereof or
any of the other Operative Documents or any provision of any thereof; (x) the
impossibility or illegality of performance by the Lessee, the Lessor or both;
(xi) any action by any court, administrative agency or other Governmental
Authority; (xii) any restriction, prevention or curtailment of or interference
with the construction on or any use of the Property or any part thereof; or
(xiii) any other cause or circumstances, whether or not the Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of the Lessee hereunder shall be covenants and agreements that are
separate and independent from any obligations of the Lessor hereunder or under
any other Operative
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Documents and the obligations of the Lessee shall continue unaffected unless
such obligations shall have been modified or terminated in accordance with an
express provision of this Lease. Nothing contained in this Section 9.1 shall
affect any claim, action or right that the Lessee may have against the Lessor or
any other Person, nor be considered as (a) a guaranty of (i) the fair market
value of any Property upon the commencement, expiration or termination of the
Construction Period or the Basic Term or (ii) the useful life of the
Improvements, (b) a prohibition of assertion of any claim against any
manufacturer, supplier, dealer, vendor, contractor, subcontractor or installer
with respect to the Improvements or the Equipment or any part thereof or (c) a
waiver by the Lessee of any of its rights under any of the Operative Documents
or of its right to assert and xxx upon any claims it may have against any other
Person in one or more separate actions.
9.2. No Termination or Abatement. The Lessee shall remain obligated
under this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting the Lessor, or any action with respect to this Lease which
may be taken by any trustee, receiver or liquidator of the Lessor or by any
court with respect to the Lessor. The Lessee hereby waives all right (i) to
terminate or surrender this Lease (except as provided herein) or (ii) to avail
itself of any abatement, suspension, deferment, reduction, setoff, counterclaim
or defense with respect to any Rent. The Lessee shall remain obligated under
this Lease in accordance with its terms and the Lessee hereby waives any and all
rights now or hereafter conferred by statute or otherwise to modify or to avoid
strict compliance with its obligations under this Lease. Notwithstanding any
such statute or otherwise, the Lessee shall be bound by all of the terms and
conditions contained in this Lease.
ARTICLE X
SUBLEASES
10.1. Subletting. The Lessee may, without the consent of the Lessor,
sublease the Property or any portion thereof to any Person. No sublease or other
relinquishment of possession of the Property 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 the Property,
or portion thereof, so sublet. Any sublease of the Property shall expressly be
made subject to and subordinated to this Lease and to the rights of the Lessor
hereunder.
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ARTICLE XI
LESSEE ACKNOWLEDGMENTS
11.1. Condition of the Property. THE LESSEE ACKNOWLEDGES AND AGREES
THAT ALTHOUGH THE LESSOR WILL OWN AND HOLD TITLE TO THE PROPERTY, THE
CONSTRUCTION AGENT IS SOLELY RESPONSIBLE UNDER THE TERMS OF THE CONSTRUCTION
AGENCY AGREEMENT FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE
IMPROVEMENTS AND ANY ALTERATIONS OR MODIFICATIONS. THE LESSEE FURTHER
ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE PROPERTY "AS IS" WITHOUT
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE LESSOR AND
SUBJECT TO (A) THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN
POSSESSION THEREOF, (C) ANY STATE OF FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL
INSPECTION MIGHT SHOW, AND (D) VIOLATIONS OF REQUIREMENTS OF LAW WHICH MAY EXIST
ON THE DATE HEREOF OR ON THE CLOSING DATE. THE LESSOR HAS NOT MADE AND SHALL NOT
BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) AND SHALL NOT BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE
TITLE (OTHER THAN FOR LESSOR LIENS), VALUE, HABITABILITY, USE, CONDITION,
DESIGN, OPERATION, OR FITNESS FOR USE OF THE PROPERTY (OR ANY PART THEREOF), OR
ANY OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF) AND THE LESSOR SHALL NOT BE
LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR
LIENS) OR THE FAILURE OF THE PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY
REQUIREMENT OF LAW.
11.2. Risk of Loss. During the Term the risk of loss of or decrease in
the enjoyment and beneficial use of such Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by the Lessee, and the Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XII
POSSESSION AND USE OF THE PROPERTY, ETC.
12.1. Utility Charges. The Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Property during the
Term. The Lessee shall be entitled to receive any credit or refund with respect
to any utility charge paid by the Lessee and the amount of any credit or refund
received by the Lessor on account of any utility charges paid by the
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Lessee, net of the costs and expenses reasonably incurred by the Lessor in
obtaining such credit or refund at the Lessee's request, shall be promptly paid
over to the Lessee.
12.2. Possession and Use of the Property. The Property may be used only
in a manner consistent with the Construction Agency Agreement and, after the
Base Date, may be used as consistent with the Plans and Specifications and in a
manner consistent with the standards applicable to properties of a similar
nature in the geographic area in which the Property is located and in any event
not less than the standards applied by the Lessee for other comparable
properties owned or leased by the Lessee. The Lessee shall pay, or cause to be
paid, all charges and costs required in connection with the use of the Property
as contemplated by this Lease and the Construction Agency Agreement. The Lessee
shall not commit or permit any waste of the Property or any part thereof.
12.3. Compliance with Requirements of Law and Insurance Requirements.
Subject to the terms of Article XVI, the Lessee, at its sole cost and expense,
shall (a) comply in all respects with all Requirements of Law (including all
Environmental Laws) and Insurance Requirements relating to the Property,
including the use, construction, operation, maintenance, repair and restoration
thereof and the remarketing thereof pursuant to Article XXIV, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Property, and (b)
procure, maintain and comply with all licenses, permits, orders, approvals,
consents and other authorizations required for the construction, use,
maintenance and operation of the Property and for the use, operation,
maintenance, repair and restoration of the Improvements, except where such
failure to procure, maintain and comply is not material.
12.4. Assignment by Lessee. The Lessee may assign all (and not less
than all) of its rights hereunder to any other Person so long as the Lessee
remains fully liable for all of the obligations of the "Lessee" hereunder and
under the other Operative Documents.
12.5. Acceptance; Offset. On the Base Date (i) the Lessee will
unconditionally accept the Property (provided that nothing contained herein
shall be deemed a waiver by the Lessee of any right of action against Persons
with respect to title to and condition of the Property on the Closing Date or
the condition, quality or completeness of the Construction, other than the
Lessor) and (ii) no right of offset in favor of the Lessee will exist with
respect to any Rent or other sums payable under this Lease.
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ARTICLE XIII
MAINTENANCE AND REPAIR; RETURN
13.1. Maintenance and Repair; Return.
(a) The Lessee, at its sole cost and expense, shall maintain the
Property in good condition (ordinary wear and tear excepted) and make
all necessary repairs thereto, of every kind and nature whatsoever,
whether interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
all Requirements of Law and Insurance Requirements (other than those
Requirements of Law or Insurance Requirements being contested by the
Lessee in good faith) and on a basis consistent with the operation and
maintenance of properties comparable in type and location to the
Property and in no event less than the standards applied by the Lessee
in the operation and maintenance of other comparable properties owned
or leased by the Lessee or its Affiliates.
(b) The Lessor shall under no circumstances be required to build
any improvements on the Property, make any repairs, replacements,
alterations or renewals of any nature or description to the Property,
make any expenditure whatsoever in connection with this Lease (other
than for Advances made in accordance with and pursuant to the terms of
this Lease and the Construction Agency Agreement) or maintain the
Property in any way. The Lessor shall not be required to maintain,
repair or rebuild all or any part of the Property, and the Lessee
waives any right to (i) require the Lessor to maintain, repair, or
rebuild all or any part of the Property, or (ii) make repairs at the
expense of the Lessor pursuant to any Requirement of Law, Insurance
Requirement, contract, agreement, or covenant, condition or restriction
in effect at any time during the Term.
(c) The Lessee shall, upon the expiration or earlier termination
of this Lease, vacate and surrender such Property to the Lessor in its
then-current, "AS IS" condition, subject to the Lessee's obligations
under Sections 12.3, 13.1(a), 14.1, 15.1, 18.1(e), 18.2 and 24.1,
unless the Lessee has purchased the Property from the Lessor as
provided herein.
ARTICLE XIV
MODIFICATIONS, ETC.
14.1. Modifications, Substitutions and Replacements. The Lessee, at its
sole cost and expense, may at any time and from time to time make alterations,
renovations, improvements and additions to the Property or any part thereof and
substitutions and replacements therefor (collectively, "Modifications");
provided, however, that: (i) except for any Modification
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required to be made pursuant to a Requirement of Law (a "Required
Modification"), no Modification shall impair the value, utility or useful life
of the Property or any part thereof from that which existed immediately prior to
such Modification; (ii) the Modification shall be done expeditiously and in a
good and workmanlike manner; (iii) except as otherwise permitted pursuant to
Article XVI, the Lessee shall comply with all Requirements of Law (including all
Environmental Laws) and Insurance Requirements applicable to the Modification,
including the obtaining of all permits and certificates of occupancy, and the
structural integrity of the Property shall not be adversely affected; (iv)
subject to the terms of Article XVI relating to permitted contests, the Lessee
shall pay all costs and expenses and shall discharge (or cause to be insured or
bonded over) within sixty (60) days after the same shall be filed (or otherwise
become effective) any Liens arising with respect to the Modification; (v) such
Modifications shall comply with Sections 12.3 and 13.1(a); and (vi) the Lessee
shall be required to obtain the prior written approval of the Lessor, which
approval shall not be unreasonably withheld, with respect to any alterations
(other than Required Modifications and/or alterations authorized by the
Construction Agency Agreement) that shall (A) affect any structural element of
the Improvements or major building system therein, except where such effect is
not material or (B) cost in excess of $3,000,000 or (C) change the nature of the
Improvements (except where such change is not material) or reduce the amount of
usable area therein (except where such reduction is not material) or the utility
thereof for the purposes contemplated by the Lessor and the Lessee as of the
date hereof. All Modifications shall remain part of the realty and shall be
subject to this Lease and title thereto shall immediately vest in the Lessor;
provided, however, that Modifications that meet each of the following conditions
shall not be subject to this Lease: (x) such Modifications are not Required
Modifications, (y) such Modifications were not financed by the Lessor and (z)
such Modifications are readily removable without impairing the value, utility or
remaining useful life of the Property. So long as no Event of Default has
occurred and is continuing, the Lessee may place upon the Property any trade
fixtures, machinery, equipment or other property belonging to the Lessee or
third parties and may remove the same at any time during the Term, subject,
however, to the terms of Section 13.1(a); provided that such trade fixtures,
machinery, equipment or other property do not impair the value, utility or
remaining useful life of the Property (except to the extent such impairment is
not material); provided, further, that the Lessee shall keep and maintain at the
Property and shall not remove from the Property (other than to the extent
removed or replaced as a consequence of permitted Modifications) any Equipment
financed or otherwise paid for (directly or indirectly) by the Lessor pursuant
to this Lease.
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ARTICLE XV
WARRANT OF TITLE; EASEMENTS
15.1. Warrant of Title.
(a) The Lessee agrees that except as otherwise provided herein
and subject to the terms of Article XVI relating to permitted contests,
the Lessee shall not directly or indirectly create or allow to remain,
and shall promptly discharge at its sole cost and expense (which shall
be paid for by funds from an Advance and added to the Lease Balance
during the Construction Period), any Lien, defect, attachment, levy,
title retention agreement or claim upon the Property or any
Modifications or any Lien, attachment, levy or claim with respect to
the Rent, other than Permitted Liens and Liens on trade fixtures,
machinery, equipment, general intangibles and other personal property
not financed by Advances.
(b) Except as otherwise expressly contained herein or in the
Construction Agency Agreement, nothing contained in this Lease shall be
construed as constituting the consent or request of the Lessor,
expressed or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Property or any
part thereof. NOTICE IS HEREBY GIVEN THAT THE LESSOR IS NOT AND SHALL
NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE
FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY PART
THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANIC'S OR OTHER
LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR
AFFECT THE INTEREST OF THE LESSOR, IN AND TO THE PROPERTY.
15.2. Grants and Releases of Easements; Lessor's Waivers. Provided that
no Default shall have occurred and be continuing and subject to the provisions
of Articles XII, XIII and XIV the Lessor hereby consents in each instance to the
following actions by the Lessee, in the name and stead of the Lessor, but at the
Lessee's sole cost and expense (which shall be paid for by funds from an Advance
and added to the Lease Balance during the Construction Period): (a) the granting
of easements, licenses, rights-of-way and other rights and privileges in the
nature of easements reasonably necessary or desirable for the use, repair, or
maintenance of the Property as herein provided; (b) the release of existing
easements or other rights in the nature of easements which are for the benefit
of the Property; (c) if required by applicable Governmental Authority in
connection with the Construction, Modifications or restoration of the Property
in the event of a Casualty or Condemnation, the dedication or transfer of
unimproved portions of the Property for road, highway or other public purposes;
and (d) the execution of amendments to any covenants and restrictions affecting
the Property; provided,
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however, that in each case (i) such grant, release, dedication, transfer or
amendment does not impair the value, utility or remaining useful life of the
Property, (ii) such grant, release, dedication, transfer, annexation or
amendment is reasonably necessary in connection with the use, maintenance,
alteration or improvement of the Property, (iii) such grant, release,
dedication, transfer, annexation or amendment will not cause the Property or any
portion thereof to fail to comply in any respect with the provisions of this
Lease or any other Operative Documents and all Requirements of Law (including,
without limitation, all applicable zoning, planning, building and subdivision
ordinances, all applicable restrictive covenants and all applicable
architectural approval requirements); (iv) all governmental consents or
approvals required prior to such grant, release, dedication, transfer,
annexation or amendment have been obtained, and all filings required prior to
such action have been made; (v) such grant, release, dedication, transfer,
annexation or amendment will not result in any down- zoning of the Property or
any portion thereof; (vi) the Lessee shall remain obligated under this Lease and
under any instrument executed by the Lessee consenting to the assignment of the
Lessor's interest in this Lease as security for indebtedness, in each such case
in accordance with their terms, as though such grant, release, dedication,
transfer, annexation or amendment had not been effected and (vii) the Lessee
shall pay and perform any obligations of the Lessor under such grant, release,
dedication, transfer, annexation or amendment. The Lessor acknowledges the
Lessee's right to finance and to secure under the Uniform Commercial Code,
inventory, furnishings, furniture, equipment, trade fixtures, machinery,
leasehold improvements and other personal property located at the Property other
than Equipment, and Lessor agrees to execute Lessor waiver forms in favor of any
purchase money seller, lessor or lender which has financed or may finance in the
future such items. Without limiting the effectiveness of the foregoing, provided
that no Default shall have occurred and be continuing, the Lessor shall, upon
the request of the Lessee, and at the Lessee's sole cost and expense, execute
and deliver any instruments necessary or appropriate to confirm any such grant,
release, dedication, transfer, annexation or amendment to any Person permitted
under this Section 15.2 including landlord waivers with respect to any of the
foregoing.
ARTICLE XVI
PERMITTED CONTESTS
16.1. Permitted Contests in Respect of Applicable Law. If, to the
extent and for so long as (a) a test, challenge, appeal or proceeding for review
of any Applicable Law, Requirement of Law or Government Action relating to the
Property shall be prosecuted diligently and in good faith in appropriate
proceedings by the Lessee or (b) compliance with such Applicable Law,
Requirement of Law or Government Action shall have been excused or exempted by a
valid nonconforming use, variance permit, waiver, extension or forbearance, the
Lessee shall not be required to comply with such Applicable Law, Requirement of
Law or Government Action but only if and so long as any such test, challenge,
appeal, proceeding, waiver, extension, forbearance or noncompliance shall not,
in the reasonable opinion of the
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Lessor, involve (A) any risk of criminal liability being imposed on the Lessor
or the Property, or (B) any risk of (1) imminent foreclosure, forfeiture or loss
of the Property, or any part thereof that is material, or (2) the nonpayment of
Rent or (C) any substantial danger of (1) the sale of, or the creation of any
Lien (other than a Permitted Lien) on, any part of the Property, (2) civil
liability being imposed on the Lessor, or the Property, or (3) imminent
enjoyment of, or interference with, the use, possession or disposition of the
Property in any respect, except for uses, possessions or dispositions which are
not material. If the Lessor or the Lessee shall receive notice of a test,
challenge, appeal or proceeding for review of any Applicable Law, Requirement of
Law or Government Action relating to the Property, the Lessor or the Lessee, as
the case may be, shall give notice thereof to the other promptly after the
receipt of such notice.
The Lessor will not be required to join in any proceedings pursuant to
this Section 16.1 unless a provision of any Applicable Law, Requirement of Law
or Governmental Action requires, or diligent and effective pursuit of such
proceedings requires, that such proceedings be brought by or in the name of the
Lessor; and in that event the Lessor will join in the proceedings or permit them
or any part thereof to be brought in its name if and so long as (i) no Default
has occurred and is continuing and (ii) the Lessee pays all related
out-of-pocket expenses and indemnifies the Lessor to its satisfaction.
ARTICLE XVII
INSURANCE
17.1. Public Liability and Workers' Compensation Insurance.
(a) During the Term the Lessee shall procure and carry, at the
Lessee's sole cost and expense, commercial general liability insurance
for claims for bodily injury or death sustained by persons or damage to
property while on the Property and such other public liability
coverages as are ordinarily procured by the Lessee or its Affiliates
who own or operate similar properties. Such insurance shall be in an
amount of no less than $3,000,000 per incident and of no less than
$5,000,000 per occurrence and shall otherwise be on terms that are
consistent with commercially reasonable practices. The Lessor shall be
named as an additional insured on such policy. The policy shall also
specifically provide that the policy shall be considered primary
insurance which shall apply to any loss or claim before any
contribution by any insurance which the Lessor may have in force.
(b) The Lessee shall, in the construction of the Improvements
(including in connection with any Modifications thereof) and the
operation of the Property, comply with, or cause the applicable
contractor to comply with, all applicable workers' compensation laws.
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17.2. Hazard and Other Insurance. During the Term the Lessee shall
keep, or cause to be kept, the Property insured against loss or damage by fire,
earthquake, flood and other risks in the amount of no less than $3,000,000 and
otherwise on terms and in amounts that are consistent with commercially
reasonable practices. During the construction of any Improvements the Lessee
shall also maintain or cause to be maintained builders' risk insurance. All
insurance proceeds in respect of any loss or occurrence for which the proceeds
related thereto are (i) less than or equal to $3,000,000, in the absence of the
occurrence and continuance of a Default, shall be adjusted by and paid to the
Lessee for application toward the reconstruction, repair or refurbishment of the
Property and (ii) greater than $3,000,000, shall be adjusted jointly by the
Lessee and the Lessor (unless a Default has occurred and is continuing, in which
case such proceeds shall be adjusted solely by the Lessor) and held by the
Lessor for application in accordance with Article XVIII hereof.
17.3. Insurance Coverage.
(a) The insurance required to be obtained under Sections 17.1 and
17.2 may be subject to deductibles not greater than $25,000 for each.
The Lessee shall furnish the Lessor with certificates showing the
insurance required under Sections 17.1 and 17.2 to be in effect and
naming the Lessor as additional insured with respect to liability
coverage (excluding worker's compensation insurance, and naming the
Lessor as loss payee with respect to property coverage and showing the
mortgagee endorsement required by Section 17.3(c) with respect to such
coverage. All such insurance shall be at the cost and expense of the
Lessee. Such certificates shall include a provision for no less than
thirty (30) days' advance written notice by the insurer to the Lessor
in the event of cancellation or reduction of such insurance. In
addition, the Lessee shall cause the Lessor to be named as additional
insured under the liability policies maintained with respect to the
Construction.
(b) The Lessee agrees that the insurance policy or policies
required by Sections 17.2, shall include an appropriate clause pursuant
to which such policy shall provide that it will not be invalidated
should the Lessee waive, in writing, prior to a loss, any or all rights
of recovery against any party for losses covered by such policy, and
that the insurance in favor of the Lessor and its rights under and
interests in said policies shall not be invalidated or reduced by any
act or omission or negligence of the Lessee or any other Person having
any interest in the Property. The Lessee hereby waives any and all such
rights against the Lessor to the extent of payments made under such
policies.
(c) All such insurance shall be written by reputable insurance
companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance
being provided by such companies. Any insurance company selected by the
Lessee which is rated in Best's Insurance Guide or any
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successor thereto (or if there be none, an organization having a
similar national reputation) shall have a general policyholder rating
of "A" and a financial rating of at least "12" or be otherwise
acceptable to the Lessor. All insurance policies required by Section
17.2 shall include a standard form mortgagee endorsement in favor of
the Lessor.
(d) The Lessor may carry separate liability insurance at its sole
cost so long as (i) the Lessee's insurance is designated as primary and
in no event excess or contributory to any insurance the Lessor may have
in force which would apply to a loss covered under the Lessee's policy
and (ii) each such insurance policy will not cause the Lessee's
insurance required under this Article XVII to be subject to a
coinsurance exception of any kind.
(e) The Lessee shall pay as they become due all premiums for the
insurance required by Section 17.1 and Section 17.2, and shall renew or
replace each policy prior to the expiration date thereof. Throughout
the Term, at the time each of the Lessee's insurance policies is
renewed (but in no event less frequently than once each year), the
Lessee shall deliver to the Lessor certificates of insurance evidencing
that all insurance required by this Article XVII is being maintained by
the Lessee and is in effect.
ARTICLE XVIII
CASUALTY AND CONDEMNATION;
ENVIRONMENTAL MATTERS
18.1. Casualty and Condemnation.
(a) Subject to the provisions of this Article XVIII, if all or a
portion of the Property is damaged or destroyed in whole or in part by
a Casualty or if the use, access, occupancy, easement rights or title
to the Property or any part thereof, is the subject of a Condemnation,
then (i) in the case of a Casualty where the cost of restoration of the
Property in the reasonable judgment of the Lessor is (x) less than or
equal to $3,000,000 any insurance proceeds payable with respect to such
Casualty shall be paid directly to the Lessee, or if received by the
Lessor, shall be paid over to the Lessee for the reconstruction,
refurbishment and repair of the Property, and (y) greater than
$3,000,000 any insurance proceeds payable with respect to such Casualty
shall be paid to the Lessor but may be obtained by the Lessee, and
shall be used by the Lessee for the purpose of reconstructing,
refurbishing and repairing the Property to the condition required under
this Lease prior to the end of the Term, including, without limitation,
Completion thereof, upon submission to the Lessor of an Architect's
Certificate to the effect that such restoration can be fully effected
prior to the end of the Term, and as to the cost of such restoration,
and upon receipt of such certificate in
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form reasonably satisfactory to the Lessor such amounts shall be made
available to the Lessee in the manner contemplated by the Construction
Agency Agreement with respect to the Construction, and (ii) in the case
of a Condemnation of any part of the Land that in the reasonable
judgment of the Lessor is not a Significant Condemnation, any award or
compensation relating thereto shall be paid to the Lessee and in the
case of all other Condemnations such award or compensation shall be
paid to the Lessor to be applied in its reasonable discretion to the
restoration of the Property or toward the payment of the Lease Balance;
provided, however, that if a Default shall have occurred and be
continuing, such award, compensation or insurance proceeds shall be
paid directly to the Lessor or, if received by the Lessee, shall be
held in trust for the Lessor, and shall be paid over by the Lessee to
the Lessor. If, contrary to such provision, any such award,
compensation or insurance proceeds are paid to the Lessee, rather than
to the Lessor, the Lessee hereby agrees to transfer any such payment to
the Lessor. All amounts held by the Lessor when a Default exists
hereunder on account of any award, compensation or insurance proceeds
either paid directly to the Lessor or turned over to the Lessor shall
either be (i) paid to the Lessee for the repair of damage caused by
such Casualty or Condemnation in accordance with clause (d) of this
Section 18.1, or (ii) applied to the purchase price of the Property on
the Termination Date, with any Excess Proceeds being payable to the
Lessee.
(b) The Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At the Lessee's
reasonable request, and at the Lessee's sole cost and expense, the
Lessor shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. The Lessor and the Lessee agree that this
Lease shall control the rights of the Lessor and the Lessee in and to
any such award, compensation or insurance payment.
(c) If the Lessor or the Lessee shall receive notice of a
Casualty for which the reasonable anticipated cost of restoration
exceeds an amount equal to 10% of the Lease Balance or of an actual,
pending or threatened Condemnation of the Property or any material
interest therein, the Lessor or the Lessee, as the case may be, shall
give notice thereof to the other promptly after the receipt of such
notice.
(d) If pursuant to this Section 18.1 and Section 19.1 this Lease
shall continue in full force and effect following a Casualty or
Condemnation with respect to the Property, the Lessee shall, at its
sole cost and expense with funds from an Advance during the
Construction Period and added to the Lease Balance (and, without
limitation, if any award, compensation or insurance payment is not
sufficient to restore such Property in accordance with this paragraph,
the Lessee shall pay the shortfall with funds from an Advance during
the Construction Period and added to the Lease Balance), promptly and
diligently repair any damage to the Property caused by such Casualty
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or Condemnation in conformity with the requirements of Sections 13.1
and 14.1 using the as-built plans and specifications for the Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the Property and all applicable Requirements of
Law) so as to restore the Property to at least the same condition,
operation, function and value as existed immediately prior to such
Casualty or Condemnation with such Modification as the Lessee may elect
in accordance with Section 14.1. In such event, title to the Property
shall remain with the Lessor. Upon completion of such restoration, the
Lessee shall furnish the Lessor an architect's certificate of
substantial completion and a Responsible Employee's Certificate
confirming that such restoration has been completed pursuant to this
Lease.
(e) In no event shall a Casualty or Condemnation affect the
Lessee's obligations to pay Rent pursuant to Section 7.1 or to perform
its obligations and pay any amounts due on the Expiration Date or
pursuant to Articles XXII and XXV.
(f) Any Excess Proceeds received by the Lessor in respect of a
Casualty or Condemnation shall be turned over to the Lessee.
18.2. Environmental Matters. Promptly upon the Lessee's actual
knowledge of the existence of an Environmental Violation with respect to the
Property, the Lessee shall notify the Lessor in writing of such Environmental
Violation. If the Lessor elects not to terminate this Lease pursuant to Section
19.1, at the Lessee's sole cost and expense, the Lessee shall promptly and
diligently commence any response, clean up, remedial or other action necessary
to remove, clean up or remediate the Environmental Violation in accordance with
the terms of Section 12.3. If the Lessor does not deliver a Termination Notice
with respect to such Property pursuant to Section 19.1, the Lessee shall, upon
completion of remedial action by the Lessee, cause to be prepared by an
environmental consultant reasonably acceptable to the Lessor a report describing
the Environmental Violation and the actions taken by the Lessee (or its agents)
in response to such Environmental Violation, and a statement by the consultant
that the Environmental Violation has been remedied in compliance in all respects
with applicable Environmental Law. Each such Environmental Violation shall be
remedied prior to the Expiration Date. Nothing in this Article XVIII shall
reduce or limit the Lessee's obligations under the indemnity provisions hereof.
18.3. Notice of Environmental Matters. Promptly, but in any event
within sixty (60) Business Days from the date the Lessee has actual knowledge
thereof, the Lessee shall provide to the Lessor written notice of any pending or
threatened claim, action or proceeding involving any Environmental Law or any
Release on or in connection with the Property. All such notices shall describe
in reasonable detail the nature of the claim, action or proceeding and the
Lessee's proposed response thereto. In addition, the Lessee shall provide to the
Lessor, within sixty (60) Business Days of receipt, copies of all written
communications with any Governmental Authority relating to any Environmental
Violation in connection with the
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Property. The Lessee shall also promptly provide such detailed reports of any
such environmental claims as may reasonably be requested by the Lessor. In the
event that the Lessor receives written notice of any pending or threatened
claim, action or proceeding involving any Environmental Law or any Release on or
in connection with the Property, the Lessor shall promptly give notice thereof
to the Lessee.
ARTICLE XIX
TERMINATION OF LEASE
19.1. Mandatory Termination upon Certain Events. If during the Term
either:
(i) a Significant Condemnation occurs; or
(ii) a Significant Casualty occurs; or
(iii) an Environmental Violation occurs or is discovered the cost
of remediation of which would exceed the greater of $1,000,000 and 15%
of the Lease Balance;
and the Lessor shall have given written notice to the Lessee that this Lease is
to be terminated as a consequence of the occurrence of such an event (a
"Termination Notice"), then, the Lessee shall be obligated to purchase the
Lessor's interest in the Property on or prior to the date occurring one hundred
eighty (180) days after the date of Lessor's notice of termination by paying the
Lessor an amount equal to the Lease Balance on such termination date.
19.2. Termination Procedures. On the date of the payment by the Lessee
of the Lease Balance in accordance with the Termination Notice in accordance
with Section 19.1 (such date, the "Termination Date"), this Lease shall
terminate and, concurrent with the Lessor's receipt of such payment,
(a) the Lessor shall execute and deliver to the Lessee (or to the
Lessee's designee) at the Lessee's cost and expense a special warranty
deed with respect to the Property, a xxxxx xxxx of sale with respect to
the Equipment and an assignment of the Lessor's entire interest in the
Property (which shall include an assignment of all of the Lessor's
right, title and interest in and to any Net Proceeds not previously
received by the Lessor and existing subleases and security deposits
thereunder), in each case in recordable form and otherwise in
conformity with local custom and free and clear of the Lien of the
Memorandum of Lease and any Lessor Liens attributable to the Lessor;
(b) the Property shall be conveyed to such Person "AS IS" and in
its then present physical condition;
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(c) the Lessor shall, at the Lessee's sole cost and expense,
execute and deliver to Lessee and the Lessee's title insurance company,
if any, an affidavit as to the Lessor's title and the absence of Lessor
Liens, and shall, at the Lessee's sole cost and expense, execute and
deliver to Lessee a statement of termination of this Lease and the
Construction Agency Agreement with respect to the Property, releases of
any Liens created by the Operative Documents attributable to the Lessor
and termination statements for any financing statements which are then
of record naming the Lessor as the secured party;
(d) the Lessor shall convey to the Lessee an assignment of all of
Lessor's right, title and interest in and to any insurance proceeds or
award with respect to the Casualty or Condemnation giving rise to the
termination of this Lease with respect to the Property or shall convey
to the Lessee any awards, compensation or insurance proceeds in respect
of such Casualty or Condemnation theretofore or thereafter received by
the Lessor or at the request of the Lessee, such amounts shall be
applied against sums due hereunder; and
(e) in the case of a termination pursuant to clause (i) or (ii)
of Section 19.1, the Lessor shall convey to the Lessee any Net Proceeds
with respect to the Casualty or Condemnation giving rise to the
termination of this Lease theretofore received by the Lessor or at the
request of the Lessee, such amounts shall be applied against sums due
hereunder.
ARTICLE XX
EVENTS OF DEFAULT
20.1. Events of Default. The occurrence of any one or more of the
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute an "Event of Default":
(a) the Lessee shall fail to make payment of any Capitalized
Interest or Basic Rent, Purchase Option Price, Contingent Rental
Adjustment or Lease Balance within five (5) Business Days after the due
date therefor, including, without limitation, amounts due pursuant to
Sections 19.1 or 22.1, or Article XXIV;
(b) the Lessee shall fail to make payment of any Supplemental
Rent due and payable within ten (10) Business Days after receipt of
notice thereof;
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(c) the Lessee shall fail to maintain insurance as required by
Article XVII of this Lease, or to restore the Property in the manner
and to the extent set forth at Section 18.1(a)(i)(y);
(d) The Lessee shall fail to observe or perform in any respect
any term, covenant or condition of the Lessee under this Lease or the
Operative Documents to which it is party other than those described in
Section 20.1(a), (b) or (c) hereof, and such failure shall have
continued for forty-five (45) days after the delivery to the Lessee of
written notice thereof from the Lessor; provided, however, that if such
failure is capable of cure but cannot be cured by payment of money or
cannot be cured by diligent efforts within such forty-five (45) day
period but such diligent efforts shall be properly commenced within the
cure period and the Lessee is diligently pursuing, and shall continue
to pursue diligently, remedy of such failure, the cure period shall be
extended for a reasonable additional period of time as may be necessary
to cure, not to exceed one hundred eighty (180) days from the date of
such notice or to extend beyond the Expiration Date; provided further,
that failure by the Lessee to fully comply with the requirements of
Section 24.1 hereof shall not be subject to any cure period;
(e) any representation or warranty made by the Lessee in any
of the Operative Documents to which it is a party shall prove to have
been inaccurate in any respect at the time made, except for such
inaccuracies and misstatements which are not material, and if such
inaccuracy can be cured, it shall not have been cured within forty-five
(45) days after the earlier of (i) delivery to the Lessee of written
notice thereof from the Lessor or (ii) a Responsible Employee of the
Lessee shall have knowledge of such inaccuracy;
(f) a Construction Agency Event of Default shall have occurred
and be continuing;
(g) the Lessee shall (i) admit in writing its inability to pay
its debts generally as they become due, (ii) file a petition under the
United States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or any State or Commonwealth
thereof, (iii) make a general assignment for the benefit of its
creditors, (iv) consent to the appointment of a receiver of itself or
the whole or any substantial part of its property, (v) fail to cause
the discharge of any custodian, trustee or receiver appointed for the
Lessee, or the whole or a substantial part of its property within sixty
(60) days after such appointment, or (vi) file a petition or answer
seeking or consenting to reorganization under the United States
bankruptcy laws or any other applicable insolvency law or statute of
the United States of America or any State or Commonwealth thereof;
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(h) insolvency proceedings or a petition under the United States
bankruptcy laws or any other applicable insolvency law or statute of
the United States of America or any State or Commonwealth thereof shall
be filed against the Lessee and not dismissed within sixty (60) days
from the date of its filing, or a court of competent jurisdiction shall
enter an order or decree appointing, without the consent of the Lessee,
a receiver of the Lessee or the whole or a substantial part of any of
its property and such order or decree shall not be vacated or set aside
within ninety (90) days from the date of the entry thereof;
(i) any Lien granted under any Operative Document shall, in whole
or in part, terminate, cease to be effective against, or cease to be
the legal, valid, binding and enforceable obligation of, the Lessee;
(j) the Lessee shall directly or indirectly contest the validity
of any Operative Document in any manner in any court of competent
jurisdiction or any lien granted by any Operative Document, or shall
repudiate, or purport to discontinue or terminate, the Construction
Agency Agreement, or the Construction Agency Agreement shall cease to
be a legal, valid and binding obligation or shall cease to be in full
force and effect for any reason;
(k) the Lessee fails to comply with the provisions of Section
4.4; or
(l) the Lessee shall fail to satisfy any of its obligations under
the Pledge Agreement within the applicable grace period provided
therefor, if any, for which the exclusive remedy for such Event of
Default is provided in Section 20.2(m).
20.2. Remedies. Upon the occurrence of any Event of Default and at any
time thereafter, the Lessor may, so long as such Event of Default is continuing,
do one or more of the following as the Lessor in its sole discretion shall
determine, without limiting any other right or remedy the Lessor may have on
account of such Event of Default:
(a) The Lessor may, by notice to the Lessee, rescind or terminate
this Lease as of the date specified in such notice; however, (i) no
reletting, reentry or taking of possession of the Property (or any
portion thereof) by the Lessor will be construed as an election on the
Lessor's part to terminate this Lease unless a written notice of such
intention is given to the Lessee, (ii) notwithstanding any reletting,
reentry or taking of possession, the Lessor may at any time thereafter
elect to terminate this Lease for a continuing Event of Default and
(iii) no act or thing done by the Lessor or any of its agents,
representatives or employees and no agreement accepting a surrender of
the Property shall be valid unless the same be made in writing and
executed by the Lessor.
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(b) The Lessor may (i) demand that the Lessee, and the Lessee
shall upon the written demand of the Lessor, return the Property
promptly to the Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Articles XI and
XIII and Section 12.3 hereof as if the Property were being returned at
the end of the Term, and the Lessor shall not be liable for the
reimbursement of the Lessee for any costs and expenses incurred by the
Lessee in connection therewith and (ii) without prejudice to any other
remedy which the Lessor may have for possession of the Property, and to
the extent and in the manner permitted by Applicable Law, enter upon
the Property and take immediate possession of (to the exclusion of the
Lessee) the Property or any part thereof and expel or remove the Lessee
and any other Person who may be occupying the Property, by summary
proceedings or otherwise, all without liability to the Lessee for or by
reason of such entry or taking of possession, whether for the
restoration of damage to property caused by such taking or otherwise
and, in addition to the Lessor's other damages, the Lessee shall be
responsible for all costs and expenses incurred by the Lessor in
connection with any reletting, including, without limitation,
reasonable brokers' fees and all costs of any alterations or repairs
made by the Lessor.
(c) Subject to the limitation on recovery set forth in Section
5.4 of the Construction Agency Agreement, the Lessor may (i) to the
fullest extent permitted by Applicable Law sell all or any part of the
Property at public sale free and clear of any rights of the Lessee and
without any duty to account to the Lessee with respect to such action
or inaction or any proceeds (except that Net Proceeds are payable to
and shall be paid to the Lessee) with respect thereto (except to the
extent required by clause (ii) below if the Lessor shall elect to
exercise its rights thereunder) in which event the Lessee's obligation
to pay Capitalized Interest or Basic Rent hereunder for periods
commencing after the date of such sale shall be terminated or
proportionately reduced, as the case may be; and (ii) if the Lessor
shall so elect, demand that the Lessee pay to the Lessor, and the
Lessee shall pay to the Lessor, on the date of such sale, as liquidated
damages for loss of a bargain and not as a penalty (the parties
agreeing that the Lessor's actual damages would be difficult to
predict, but the aforementioned liquidated damages represent a
reasonable approximation of such amount) (in lieu of Capitalized
Interest or Basic Rent due for periods commencing on or after the
Payment Date coinciding with such date of sale (or, if the sale date is
not a Payment Date, the Payment Date next preceding the date of such
sale)), an amount equal to (A) the excess, if any, of (1) the Lease
Balance calculated as of such Payment Date (including all Rent due and
unpaid to and including such Payment Date and), over (2) the net
proceeds of such sale (that is, after deducting all costs and expenses
incurred by the Lessor incident to such conveyance, including, without
limitation, repossession costs, brokerage commissions, prorations,
transfer taxes, fees and expenses for counsel, title insurance fees,
survey costs, recording fees, and any repair costs); plus (B) interest
at the
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Overdue Rate on the foregoing amount from such Payment Date until
the date of payment.
(d) The Lessor may, at its option, elect not to terminate this
Lease and continue to collect all Capitalized Interest, Basic Rent,
Supplemental Rent, and all other amounts due the Lessor (together with
all costs of collection) and enforce the Lessee's obligations under
this Lease as and when the same become due, or are to be performed, and
at the option of the Lessor, upon any abandonment of any or all of the
Property by the Lessee or re-entry of same by the Lessor, the Lessor
may, in its sole and absolute discretion, elect not to terminate this
Lease and may make the necessary repairs in order to relet the
Property, and relet the Property or any part thereof for such term or
terms (which may be for a long term extending beyond the Term of this
Lease) and at such rental or rentals and upon such other terms and
conditions as the Lessor in its reasonable discretion may deem
advisable; and upon each such reletting all rentals actually received
by the Lessor from such reletting shall be applied to the Lessee's
obligations hereunder and the other Operative Documents in such order,
proportion and priority as the Lessor may elect in the Lessor's sole
and absolute discretion. If such rentals received from such reletting
during any period are less than the Rent with respect to such Property
to be paid during that period by the Lessee hereunder, the Lessee shall
pay any deficiency, as calculated by the Lessor, to the Lessor on the
next Payment Date.
(e) Unless the Property has been sold in its entirety, the Lessor
may, whether or not the Lessor shall have exercised or shall thereafter
at any time exercise any of its rights under paragraph (b), (c) or (d)
of this Section 20.2 with respect to the Property or portions thereof,
demand, by written notice to the Lessee specifying a date (a
"Termination Date") not earlier than 10 days after the date of such
notice, that the Lessee purchase, on such Termination Date, the
Property (or the remaining portion thereof) in accordance with the
provisions of Article XXII; provided, however, that no such written
notice shall be required upon the occurrence of any Event of Default in
clause (g) or (h) of Section 20.1.
(f) Subject to the limitation on recovery set forth in Section
5.4 of the Construction Agency Agreement, the Lessor may exercise any
other right or remedy that may be available to it under Applicable Law,
or proceed by appropriate court action (legal or equitable) to enforce
the terms hereof or to recover damages for the breach hereof. Separate
suits may be brought to collect any such damages for any period(s), and
such suits shall not in any manner prejudice the Lessor's right to
collect any such damages for any subsequent period(s), or the Lessor
may defer any such suit until after the expiration of the Term, in
which event such suit shall be deemed not to have accrued until the
expiration of the Term.
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(g) The Lessor may retain and apply against the Lessor's damages
all sums which the Lessor would, absent such Event of Default, be
required to pay to, or turn over to, the Lessee pursuant to the terms
of this Lease.
(h) If an Event of Default shall have occurred and be continuing,
the Lessor, as a matter of right and without notice to the Lessee, and
without regard to the value of the Property or the solvency of the
Lessee, shall have the right to apply to any court having jurisdiction
to appoint a receiver or receivers of any or all of the Property, and
the Lessee hereby irrevocably consents to any such appointment. Any
such receiver(s) shall have all of the usual powers and duties of
receivers in like or similar cases and all of the powers and duties of
the Lessor in case of entry, and shall continue as such and exercise
such powers until the date of confirmation of the sale of the Property
unless such receivership is sooner terminated.
(i) To the maximum extent permitted by law, the Lessee hereby
waives the benefit of any appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale of any or all of the
Property or any interest therein.
(j) The Lessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations secured hereby and to
exercise all rights and powers under this instrument or under any of
the other Operative Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the obligations
secured hereby may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this instrument nor its enforcement, shall
prejudice or in any manner affect the Lessor's right to realize upon or
enforce any other security now or hereafter held by the Lessor, it
being agreed that the Lessor shall be entitled to enforce this
instrument and any other security now or hereafter held by the Lessor
in such order and manner as the Lessor may determine in its absolute
discretion. No remedy herein conferred upon or reserved to the Lessor
is intended to be exclusive of any other remedy herein or by law
provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute. Every power or remedy given
by any of the Operative Documents to the Lessor or to which it may
otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by the
Lessor.
(k) In no event shall the Lessor, in the exercise of the remedies
provided in this instrument (including, without limitation, in
connection with the assignment of rents to Lessor, or the appointment
of a receiver and the entry of such receiver on to all or any part of
the Property), be deemed a "mortgagee in possession," and the Lessor
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shall not in any way be made liable for any act, either of commission
or omission, in connection with the exercise of such remedies.
(l) An action of mortgage foreclosure as now provided or
hereafter prescribed by law, may forthwith be commenced and prosecuted
to judgment, execution and sale, for the collection of the whole amount
of the Lease Balance, together with all fees, costs and expenses of
such proceedings, including a reasonable attorney's commission. All
errors in such proceedings, together with any stays of or exemptions
from execution, or extensions of time of payment, which may be given by
any Applicable Law now in force, or which may be enacted hereafter, are
hereby forever waived and released.
(m) The Lessor may exercise any and all rights under the Pledge
Agreement against the collateral pledged thereunder.
If, pursuant to the exercise by the Lessor of its remedies pursuant to this
Section 20.2, the Lease Balance, all other amounts due and owing from the Lessee
under this Lease and the other Operative Documents have been paid in full, then
the Lessor shall remit to the Lessee any excess amounts received by the Lessor.
20.3. Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 20.2, the Lessee waives, to the fullest extent permitted by
law, (a) any notice of re-entry or the institution of legal proceedings to
obtain re-entry or possession; (b) any right of redemption, re-entry or
repossession; (c) the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt or limiting the Lessor with respect
to the election of remedies; and (d) any other rights which might otherwise
limit or modify any of the Lessor's rights or remedies under this Article XX.
20.4. Excess Proceeds; Return of Property. If, pursuant to the exercise
by the Lessor of its remedies pursuant to Section 20.2, an amount equal to the
Lease Balance for the Property plus all other amounts due and owing from the
Lessee under this Lease and the other Operative Documents (including all accrued
and unpaid Basic Rent and all Supplemental Rent then due and owing) shall have
been paid in full in cash, then the lessor shall promptly remit to the Lessee
any excess amounts received by the Lessor and, at the sole cost and expense of
the Lessee, transfer to the Lessee (or its designee) all of the Lessor's
remaining right, title and interest in the Property (if any) in accordance with
Section 25.1(a) hereof.
20.5. Lessee's Purchase Option During Event of Default. Notwithstanding
anything to the contrary contained in this Article XX, upon any Event of Default
and during its continuance, Lessee may exercise its Purchase Option in
accordance with Section 22.1 upon written notice to the Lessor within ten (10)
days of the occurrence of such Event of Default, such purchase to occur within
(30) days of the occurrence of the exercise of such Purchase
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Option. The exercise of such Purchase Option shall, subject to the occurrence of
such sale within such thirty (30) day period, be deemed to have cured such Event
of Default; provided, however, that nothing contained in this Section 20.5 shall
preclude the Lessor from exercising the remedy provided in Section 20.2(m) upon
the occurrence and during the continuance of an Event of Default regardless of
the Lessee's election to exercise its Purchase Option pursuant to this Section
20.5.
ARTICLE XXI
TRANSFERS OF LESSOR'S INTERESTS
21.1. Assignments. Upon ten (10) days' written notice to the Lessee,
all or any part of the interest of the Lessor in, to or under this Agreement,
the other Operative Documents or the Property may be assigned or transferred by
the Lessor at any time to any assignee or transferee, including any Affiliate of
the Lessor; provided, however, that such assignee or transferee is (i) a
commercial bank, savings and loan association, savings bank, pension plan,
depository institution, insurance company, branch or agency of a foreign bank or
other similar financial institution, in each case, having a minimum capital and
surplus of $10,000,000 or (ii) an Affiliate of any institution described in
clause (i) and the obligations of such assignee or transferee hereunder are
guaranteed by such institution.
Any assignment by the Lessor of its rights under this Lease to an
entity organized under the laws of a jurisdiction other than the United States
of America or a political subdivision thereof (any such entity, a "Foreign
Transferee") shall not be effective unless the Foreign Transferee provides the
Lessee with evidence satisfactory to the Lessee that the Foreign Transferee is
entitled to receive payments under this Agreement without deduction or
withholding of United States federal income tax or United States backup
withholding tax. From and after any transfer effected in accordance with this
Section 21.1, the Lessor making such transfer shall be released, to the extent
of the obligations assumed by the Transferee, from its liability hereunder and
under the other Operative Documents to which it is or will be a party in respect
of obligations to be performed on or after the date of such transfer. Upon any
transfer by Lessor in accordance with this Section 21.1, the Transferee shall be
deemed the "Lessor" for all purposes of the Operative Documents, shall have all
rights and obligations under such Operative Documents, from the date of the
transfer and, each reference herein to the Lessor making such transfer shall
thereafter be deemed a reference to such Transferee for all purposes, except as
provided in the preceding sentence; provided that in no event shall the
obligations of the Lessee be increased or the Lessee's rights decreased.
21.2. Participations. Upon ten (10) days' written notice to the Lessee,
the Lessor may without the consent of the Lessee sell participations to one or
more commercial banks or branches or agencies of foreign banks or their
Affiliates (such banks and such Affiliates are hereinafter referred to,
collectively, as "Participants") in all or a portion of its rights and
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obligations under this Lease, the other Operative Documents or the Property
(including, without limitation, all or a portion of the Rent owing to it);
provided, however, that (i) the Lessor's obligations under this Lease and the
other Operative Documents to which it is a party shall remain unchanged, (ii)
the Lessor shall remain solely responsible to the Lessee for the performance of
such obligations, (iii) the Participant, but not the Lessor to the extent it has
assigned its interest hereunder, shall be entitled to the cost protection and
tax indemnification provisions contained in this Lease (provided that no
Participant shall be entitled to receive any greater amount pursuant to such
provisions than the Lessor would have been entitled to receive in respect of the
amount of the participation transferred by the Lessor to such Participant had
not such transfer occurred), (iv) the Lessee shall continue to deal solely and
directly with the Lessor in connection with the Lessor's rights and obligations
under this Lease and the other Operative Documents to which it is a party and in
connection with the cost protection and tax indemnification provisions of this
Lease and the other applicable and Operative Documents to which any Participant
is entitled pursuant to this Section 21.2, and (v) the Lessor shall retain the
sole right and responsibility to enforce the obligations of the Lessee relating
to this Lease, the Lease and the other Operative Documents.
ARTICLE XXII
PURCHASE PROVISIONS
22.1. Purchase Option. Provided that the Lessee shall not have given
notice of its intention to exercise the Remarketing Option, the Lessee shall
have the option (exercisable by giving the Lessor irrevocable written notice
(the "Purchase Notice") of the Lessee's election to exercise such option) to
purchase the Property on the date specified in such Purchase Notice at a price
equal to the Lease Balance theretofore accruing (the "Purchase Option Price").
The Lessee may deliver the Purchase Notice to the Lessor not less than three
hundred sixty (360) days prior to such purchase. If the Lessee exercises or is
deemed to have exercised its option to purchase the Property pursuant to this
Section 22.1 (the "Purchase Option"), the Lessor shall transfer to the Lessee or
its designee all of the Lessor's right, title and interest in and to the
Property as of the date specified in the Purchase Notice upon receipt of the
Purchase Option Price in accordance with Section 25.1(a). The Lessee may
designate, in a notice given to the Lessor not less than three (3) Business Days
prior to the closing of such purchase (time being of the essence), the
transferee or transferees to whom the conveyance shall be made (if other than to
the Lessee), in which case such conveyance shall (subject to the terms and
conditions set forth herein) be made to such designee; provided, however, that
such designation of a transferee or transferees shall not cause the Lessee to be
released, fully or partially, from any of its obligations under this Lease,
including, without limitation, the obligation to pay the Lessor the Lease
Balance on such Expiration Date.
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ARTICLE XXIII
RENEWAL OPTIONS
23.1. Renewal Options. So long as no Lease Event of Default has
occurred and is continuing, with the consent of the Lessor, the Lessee may
extend and renew the Term, beyond the initial Term for two additional periods of
one (1) year each as if the Term was continuing the ("Renewal Period"). Lessee
shall give Lessor notice of its intention to exercise a renewal option ("Renewal
Option") no less than three hundred sixty (360) days prior to the Expiration
Date; provided, however, that the Renewal Option may not be exercised if the
Lessee has exercised the Remarketing Option. In no event shall any Renewal
Period extend beyond the date seven (7) years from the Base Date.
ARTICLE XXIV
REMARKETING OPTION
24.1. Option to Remarket. Subject to the fulfillment of each of the
conditions set forth in this Section 24.1, the Lessee shall have the option (the
"Remarketing Option") to market and complete the sale of the Property for the
Lessor.
The Lessee's effective exercise and consummation of the Remarketing
Option shall be subject to the due and timely fulfillment of each of the
following provisions as to the Property as of the dates set forth below.
(a) Not later than six months prior to the Expiration Date, the
Lessee shall give to the Lessor written notice of the Lessee's exercise
of the Remarketing Option, which exercise shall be irrevocable. Failure
of the Lessee to timely provide such notice or the notice exercising
the Renewal Option pursuant to Section 23.1 shall be deemed to be an
election by the Lessee of its Purchase Option under Section 22.1.
(b) Not later than one hundred twenty (120) days prior to
Expiration Date, the Lessee shall deliver to the Lessor an
Environmental Audit for the Property. Such Environmental Audit shall be
prepared by an environmental consultant selected by the Lessor in the
Lessor's reasonable discretion and shall contain conclusions reasonably
satisfactory to the Lessor as to the environmental status of the
Property. If any such Environmental Audit indicates any exceptions, the
Lessee shall have also delivered a Phase Two environmental assessment
by such environmental consultant prior to the Expiration Date showing
the completion of the remedying of such exceptions in compliance with
Applicable Law.
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(c) On the date of the Lessee's notice to the Lessor of the
Lessee's exercise of the Remarketing Option, no Event of Default or
Default shall exist, and thereafter, no Event of Default or Default
shall exist.
(d) All of the Improvements shall have been constructed in
accordance with the Plans and Specifications. The Lessee shall have
completed in all respects all Modifications, restoration and rebuilding
of the Property pursuant to Sections 14.1 and 18.1 (as the case may
be), and shall have fulfilled in all respects all of the conditions and
requirements in connection therewith pursuant to said Sections, in each
case by the date on which the Lessor receives the Lessee's notice of
the Lessee's exercise of the Remarketing Option (time being of the
essence), regardless of whether the same shall be within the Lessee's
control. The Lessee shall have also paid the cost of all Modifications
commenced prior to the Expiration Date. The Lessee shall not have been
excused pursuant to Section 16.1 from complying with any Applicable Law
that involved the extension of the ultimate imposition of such
Applicable Law beyond the last day of the Term. Any Permitted Liens
(other than Lessor Liens) on the Property that were contested by the
Lessee shall have been removed.
(e) During the Marketing Period, the Lessee shall, as
nonexclusive agent for the Lessor, use best efforts to sell the
Lessor's interest in the Property and will attempt to obtain the
highest purchase price therefor and for not less than the Fair Market
Sales Value of all of the Property. The Lessee will be responsible for
hiring brokers and making the Property available for inspection by
prospective purchasers. The Lessee shall promptly upon request permit
inspection of the Property and any maintenance records relating to the
Property by the Lessor and any potential purchasers, and shall
otherwise do all things necessary to sell and deliver possession of the
Property to any purchaser. All such marketing of the Property shall be
at the Lessee's sole expense. The Lessee shall allow the Lessor and any
potential qualified purchaser reasonable access to the Property for the
purpose of inspecting the same.
(f) The Lessee shall submit all bids to the Lessor, and the
Lessor will have the right to submit any one or more bids. The Lessee
shall deliver to the Lessor, not less than ninety (90) days prior to
the Expiration Date, binding written unconditional (except as set forth
below), irrevocable offer or offers by such purchaser or purchasers
offering the highest bid to purchase the Property. No such purchaser
shall be the Lessee or an Affiliate of the Lessee. The written offer
must specify the Expiration Date as the closing date unless the Lessor
shall otherwise agree in its sole discretion. Any sale by the Lessee
shall be for the highest cash bid submitted to the Lessor. The
determination of the highest bid shall be made by the Lessor prior to
the end of the Marketing Period, but in any event, the Lessor shall
have no obligation to approve any bid unless such bid for the Property
equals or exceeds the Lease Balance determined as of the Expiration
Date less the Contingent Rental Adjustment payment made by the
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Lessee to the Lessor pursuant to Section 24.1(i). All bids shall be on
an all-cash basis unless the Lessor shall otherwise agree in its sole
discretion.
(g) In connection with any such sale of the Property, the Lessee
will provide to the purchaser all customary "seller's" indemnities,
representations and warranties regarding absence of Liens (except
Lessor Liens) and the condition of such Property, including, without
limitation, an environmental indemnity to the extent the same are
required by the Purchaser. The Lessee shall have obtained, at its cost
and expense, all required governmental and regulatory consents and
approvals and shall have made all filings as required by Applicable Law
in order to carry out and complete the transfer of the Property. As to
the Lessor, any such sale shall be made on an "as is, with all faults"
basis without representation or warranty by the Lessor other than the
absence of Lessor Liens. Any agreement as to such sale shall be made
subject to the Lessor's rights hereunder.
(h) The Lessee shall pay directly, and not from the sale
proceeds, all prorations, credits, costs and expenses of the sale of
the Property, whether incurred by the Lessor or the Lessee, including
without limitation, the cost of all title insurance, surveys,
environmental reports, appraisals, transfer taxes, the Lessor's
reasonable attorneys' fees, the Lessee's attorneys' fees, commissions,
escrow fees, recording fees, and all applicable documentary and other
transfer taxes.
(i) The Lessee shall pay to the Lessor on or prior to the
Expiration Date (or to such other Person as the Lessor shall notify the
Lessee in writing) an amount equal to the Contingent Rental Adjustment,
plus all Basic Rent and all other amounts hereunder which have accrued
or will accrue prior to or as of the Expiration Date, in the type of
funds specified in Section 7.5 hereof.
(j) The Lessee shall pay to the Lessor on or prior to the
Expiration Date the amounts, if any, required to be paid pursuant to
Section 26.2 hereof.
(k) If the Lessor approves any bid for the Property, the purchase
of the Property shall be consummated on or before the Expiration Date
and the gross proceeds (the "Gross Proceeds") of the sale of the
Property, less the documented expenses incurred by the Lessee under
clause (h) shall be paid directly to the Lessor; provided, however,
that if the sum of (x) the remaining Gross Proceeds from such sale plus
(y) the Contingent Rental Adjustment received by the Lessor pursuant to
clause (i) plus (z) amounts received by the Lessor pursuant to Section
26.2 hereof exceeds the Lease Balance for such Property as of such
date, then the excess shall be paid to the Lessee on such Expiration
Date.
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If one or more of the foregoing provisions shall not be fulfilled as of
the date set forth above with respect to the Property, then the Lessor shall
declare by written notice to the Lessee the Remarketing Option to be null and
void (whether or not it has been theretofore exercised by the Lessee), in which
event all of the Lessee's rights under this Section 24.1 shall immediately
terminate and the Lessee shall be obligated to purchase the Property pursuant to
Section 22.1 on the Expiration Date.
If the Lessee effectively elects the Remarketing Option and no sale of
the Property is consummated prior to the end of the Marketing Period, the Lessee
shall, in addition to making the payment required pursuant to Section 24.1(i)
above, return the Property to the Lessor (or to any other Person specified by
the Lessor). In connection with any such return of the Property, the Lessee
shall, at its own cost and expense, do each of the following:
(i) the Lessee shall, on or prior to the Expiration Date,
execute and deliver to the Lessor (or to the Lessor's designee) (A) a
deed with respect to such Property or Properties containing
representations and warranties of grantor to the Lessor (or such other
Person) regarding the absence of Liens (other than Permitted Liens of
the type described in clause (i), (viii) or (x) of the definition of
"Permitted Liens"), (B) a xxxx of sale with respect to any Equipment
then located on the Property and (C) an assignment of the Lessee's
entire interest in the Property (which shall include an assignment of
all of the Lessee's right, title and interest in and to any Net
Proceeds with respect to the Property not previously received by the
Lessee and an assignment of leases of the Property), in each case in
recordable form and otherwise in conformity with local custom and free
and clear of any Liens attributable to the Lessee;
(ii) the Lessee shall execute and deliver to Lessor and the
Lessor's title insurance company an affidavit as to the absence of any
Liens (other than Permitted Liens of the type described in clause (i),
(viii) or (x)), and shall execute and deliver to the Lessor a statement
of termination of this Lease to the extent relating to the Property;
(iii) the Lessee shall, on the Expiration Date, transfer
possession of the Property to the Lessor or any Person designated by
the Lessor, by surrendering the same into the possession of the Lessor
or such Person, as the case may be, in the condition required by this
Section 24.1 and in compliance with Applicable Law; and
(iv) the Lessee shall, for a period of up to one year after the
Expiration Date, cooperate reasonably with the Lessor and/or any Person
designated by the Lessor to receive the Property, which cooperation
shall include reasonable efforts with respect to the following, all of
which the Lessee shall do on or before the Expiration Date for the
Property or as soon thereafter as is reasonably practicable: providing
copies of all books and records regarding the maintenance and ownership
of the Property and all
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know-how, data and technical information relating thereto, providing a
current copy of the Plans and Specifications, granting or assigning all
assignable licenses necessary for the operation and maintenance of the
Property and cooperating reasonably in seeking and obtaining all
necessary Governmental Action. The obligations of the Lessee under this
paragraph shall survive the expiration or termination of this Lease.
Except as expressly set forth herein, the Lessee shall have no right,
power or authority to bind the Lessor in connection with any proposed sale of
the Property.
24.2. Certain Obligations Continue. During the Marketing Period, the
obligation of the Lessee to pay Rent shall continue undiminished until payment
in full to the Lessor of the Contingent Rental Adjustment and all other amounts
due to the Lessor with respect to the Property under the Operative Documents to
which the Lessee is a party. The Lessor shall have the right, but shall be under
no duty, to solicit bids, to inquire into the efforts of the Lessee to obtain
bids or otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXIV.
ARTICLE XXV
PROCEDURES RELATING TO PURCHASE OR REMARKETING
25.1. Provisions Relating to the Exercise of Purchase Option and
Conveyance Upon Remarketing and Conveyance Upon Certain Other Events.
(a) In connection with the Lessee's exercise of its Purchase
Option, upon the Expiration Date, or in connection with a purchase of
the Property under Article XIX or Section 20.2(e) hereof or the payment
of all amounts due under Sections 5.4 or 5.5 of the Construction Agency
Agreement and upon tender by the Lessee of the amounts set forth in
Article XIX, Sections 20.2(e), or 22.1 hereof or Sections 5.4 or 5.5 of
the Construction Agency Agreement, as applicable:
(i) the Lessor shall execute and deliver to the Lessee (or
to the Lessee's designee) at the Lessee's cost and expense a
special warranty deed with respect to the Property, a special
warranty xxxx of sale with respect to the Equipment and an
assignment of the Lessor's entire interest in the Property
(which shall include an assignment of all of the Lessor's right,
title and interest in and to any Net Proceeds not previously
received by the Lessor, an assignment of leases of the Property
and any security deposits collected by the Lessor, in each case
in recordable form and otherwise in conformity with local custom
and free and clear of the Lien of the Memorandum of Lease and
any Lessor Liens;
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(ii) the Property shall be conveyed to the Lessee "AS IS"
and in its then present physical condition; and
(iii) the Lessor shall, at the Lessee's sole cost and
expense, execute and deliver to Lessee and the Lessee's title
insurance company an affidavit as to the Lessor's title and the
absence of Lessor Liens attributable to the Lessor, and shall,
at the Lessee's sole cost and expense, execute and deliver to
Lessee a statement of termination of this Lease and the
Construction Agency Agreement, releases of any Liens created by
the Operative Documents attributable to the Lessor, and
termination statements for any financing statements which are
then of record naming the Lessor as the secured party.
(b) If the Lessee properly exercises the Remarketing Option,
then the Lessee shall, on the Expiration Date, and at its own cost,
transfer possession of the Property to the independent purchaser(s)
thereof, in each case by surrendering the same into the possession of
the Lessor or such purchaser(s), as the case may be, free and clear of
all Liens other than Lessor Liens, in good condition (as modified by
Modifications permitted by this Lease), ordinary wear and tear
excepted, and in compliance with Applicable Law. The Lessee shall, on
and within a reasonable time before and up to one year after the
Expiration Date, cooperate reasonably with the Lessor and the
independent purchaser(s) of the Property in order to facilitate the
purchase by such purchaser(s) of the Property, which cooperation shall
include the following, all of which the Lessee shall do on or before
the Expiration Date or as soon thereafter as is reasonably practicable:
providing all books and records regarding the maintenance and ownership
of the Property and all know-how, data and technical information
relating thereto, providing a current copy of the Plans and
Specifications for the Property, granting or assigning all licenses
necessary for the operation and maintenance of the Property and
cooperating reasonably in seeking and obtaining all necessary
Governmental Action. The obligations of the Lessee under this paragraph
shall survive the expiration or termination of this Lease.
ARTICLE XXVI
INDEMNIFICATION
26.1. General Indemnification. The Lessee agrees, whether or not any of
the transactions contemplated hereby shall be consummated, to assume liability
for, and to indemnify, protect, defend, save and keep harmless each Indemnitee,
on an After Tax Basis, from and against, any and all Claims arising during the
Term or thereafter that may be imposed on, incurred by or asserted against such
Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to any
such Claim by any other Person and whether or not such Claim arises or
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accrues prior to the Documentation Date or after the Expiration Date, in any way
relating to or arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(b) the Property or any part thereof or interest therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental, lease,
sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, operation, condition, sale (including, without
limitation, any sale pursuant to any provision hereof), return or other
disposition of all or any part or any interest in the Property during
the Term or in connection with the exercise of remedies under the Lease
or the imposition of any Lien, (or incurring of any liability to refund
or pay over any amount as a result of any Lien) or return, including,
without limitation: (1) Claims or penalties arising from any violation
of law or in tort (strict liability or otherwise), (2) latent or other
defects, whether or not discoverable, (3) any Claim based upon a
violation or alleged violation of the terms of any restriction,
easement, condition or covenant or other matter affecting title to the
Property, (4) the making of any Modifications in violation of any
standards imposed by any insurance policies required to be maintained
by the Lessee pursuant to this Lease which are in effect at any time
with respect to the Property or any part thereof, (5) any Claim for
patent, trademark or copyright infringement, and (6) Claims arising
from any public improvements with respect to the Property resulting in
any change or special assessments being levied against the Property or
any plans to widen, modify or realign any street or highway adjacent to
the Property, or any Claim for utility "tap-in" fees;
(d) the breach by the Lessee of any covenant, representation or
warranty made by it or deemed made by it in any Operative Document or
any certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or
financial advisor by the Lessee to act on its behalf in connection with
the transactions contemplated hereby;
(f) the existence of any Lien on or with respect to the
Property, the Improvements, any Capitalized Interest or Basic Rent or
Supplemental Rent, title thereto, or any interest therein including any
Liens which arise out of the possession, use, occupancy, construction,
repair or rebuilding of the Property or by reason of labor or materials
furnished or claimed to have been furnished to the Lessee, or any of
its contractors or agents or by reason of the financing of any
personalty or equipment
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purchased or leased by the Lessee or Modifications constructed by the
Lessee, except Lessor Liens and Liens in favor of the Lessor; or
(g) subject to the accuracy of Lessor's representation set forth
in Section 6.1(a), the transactions contemplated by this Lease or by
any other Operative Document, in respect of the application of Parts 4
and 5 of Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975(c) of the Code;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 26.1 for any of the following: (1) any Claim to the extent
resulting from the willful misconduct or gross negligence of such Indemnitee (it
being understood that the Lessee shall be required to indemnify an Indemnitee
even if the ordinary (but not gross) negligence of such Indemnitee caused or
contributed to such Claim) or the breach of any representation, warranty or
covenant of such Indemnitee set forth in any Operative Document, (2) any Claim
resulting from Lessor Liens, (3) any Claim to the extent attributable to acts or
events occurring after the expiration of the Term or the return or remarketing
of the Property so long as the Lessor is not exercising remedies against the
Lessee in respect of the Operative Documents, and (4) any Claim arising from a
breach or alleged breach by the Lessor of any agreement entered into in
connection with the assignment or participation of Rent. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
remedy under this Lease or any other Operative Document. Without limiting the
express rights of any Indemnitee under this Section 26.1, this Section 26.1
shall be construed as an indemnity only and not a guaranty of residual value of
the Property.
26.2. End of Term Indemnity.
(a) If the Lessee elects the Remarketing Option and there would,
after giving effect, to the proposed remarketing transactions, be a
Shortfall Amount, then prior to the Expiration Date and as a condition
to the Lessee's right to complete the remarketing of the Property
pursuant to Section 24.1, the Lessee shall cause to be delivered to the
Lessor at least 60 days prior to the Expiration Date, at the Lessee's
sole cost and expense, a report from an appraiser selected by the
Lessor and reasonably satisfactory to the Lessee in form and substance
satisfactory to the Lessor (the "End of the Term Report") which shall
state the appraiser's conclusions as to the reason for any decline in
the Fair Market Sales Value of the Property from that anticipated for
such date in the Appraisal delivered on the Closing Date.
(b) If the Lessee elects the Remarketing Option, then on or
prior to the Expiration Date the Lessee shall pay to the Lessor an
amount (not to exceed the Shortfall Amount) equal to the portion of the
Shortfall Amount that the End of the Term
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Report demonstrates was the result of a decline in the Fair Market
Sales Value of the Property due to
(i) extraordinary use, failure to maintain, to repair,
to restore, to rebuild or to replace, failure to comply with all
applicable laws, failure to use, workmanship, method of
installation or removal or maintenance, repair, rebuilding or
replacement, (excepting in each case ordinary wear and tear), or
(ii) any change to the Plans and Specifications as
submitted to the appraiser for the Appraisal after the
Documentation Date, or any Modification made to, or any
rebuilding of, the Property or any part thereof by the Lessee
other than as contemplated by the Plans and Specifications, or
(iii) the existence of any Hazardous Activity,
Hazardous Substance or Environmental Violations, or
(iv) any restoration or rebuilding carried out by the
Lessee other than as contemplated by the Plans and
Specifications, or
(v) any condemnation of any portion of the Property
pursuant to Article XVIII, or
(vi) any use of the Property or any part thereof by
the Lessee other than as set forth in the Plans and
Specifications, or
(vii) any grant, release, dedication, transfer,
annexation or amendment made pursuant to Section 15.2, or
(viii) the failure of the Lessor to have title to the
Property free and clear of all Liens (excluding Permitted
Liens), or
(ix) the existence of any sublease relating to the
Property that shall survive the Expiration Date.
26.3. Environmental Indemnity. Without limitation of the other
provisions of this Article XXVI, the Lessee hereby agrees to indemnify, hold
harmless and defend each Indemnitee from and against any and all claims
(including without limitation third party claims for personal injury or real or
personal property damage), losses (including but not limited to, to the extent
the Lease Balance has not been fully paid, any loss of value of the Property),
damages, liabilities, fines, penalties, charges, administrative and judicial
proceedings (including informal proceedings) and orders, judgments, remedial
action under Environmental Laws, requirements, enforcement actions of any kind,
and all reasonable and documented costs
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and expenses incurred in connection therewith (including but not limited to
reasonable and documented attorneys' and/or paralegals' fees and expenses),
including, but not limited to, all costs incurred in connection with any
investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any federal, state or local government agency,
arising in whole or in part, out of (i) the matters and arrangements
contemplated by the Operative Documents and/or (ii) any one or more of the
following:
(a) the presence on or under the Property of any Hazardous
Substance, or any releases or discharges of any Hazardous Substance,
on, under, from or onto the Property,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or off the Property, and whether by the
Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of the Lessee or any predecessor in
title, or any other Persons (including such Indemnitee), in connection
with the handling, treatment, removal, storage, decontamination,
clean-up, transport or disposal of any Hazardous Substance that at any
time are located or present on or under or that at any time migrate,
flow, percolate, diffuse or in any way move onto or under the Property,
(c) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource damages),
or death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Environmental Laws,
(d) any claim concerning lack of compliance of the Property with
Environmental Laws, or any act or omission causing an environmental
condition at the Property that requires remediation under Environmental
Laws or would allow any Governmental Authority to record a Lien on the
land records, or
(e) any residual contamination on or under the Land, or
affecting any natural resources, and to any contamination of any
property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Substance, and irrespective of whether any of such activities
were or will be undertaken in accordance with applicable laws,
regulations, codes and ordinances;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
under this Section 26.3 for (1) any Claim to the extent resulting from the
willful misconduct or gross negligence of such Indemnitee (it being understood
that, unless the applicable Indemnitee was
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in possession of the Property and caused the Claim, the Lessee shall be required
to indemnify an Indemnitee even if the ordinary (but not gross) negligence of
such Indemnitee caused or contributed to such Claim) or (2) any Claim to the
extent attributable to acts or events occurring after the expiration of the Term
or the return or remarketing of the Property so long as the Lessor is not
exercising remedies against the Lessee in respect of an Event of Default, or (3)
any Claim which does not result from an action, suit or proceeding unless the
Indemnitee provides the Lessee with written notice of the circumstances from
which such claim arises and allows the Lessee a reasonable opportunity to
address such circumstances as required by applicable Environmental Law in order
to minimize any such Claim. It is expressly understood and agreed that the
indemnity provided for herein shall survive the expiration or termination of and
shall be separate and independent from any remedy under this Lease or any other
Operative Document.
So long as no Default has occurred and is continuing, the Lessee shall
have the exclusive right to remediate and to control the remediation of the
circumstances related to any such Claim in accordance with Section 18.2.
26.4. Proceedings in Respect of Claims. With respect to any amount
that the Lessee is requested by an Indemnitee to pay by reason of Section 26.1
or 26.3, such Indemnitee shall, if so requested by the Lessee and prior to any
payment, submit such additional information to the Lessee as the Lessee may
reasonably request and which is in the possession of such Indemnitee to
substantiate properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall notify the Lessee of the commencement thereof,
and the Lessee shall be entitled, at its expense, to participate in, and, to the
extent that the Lessee desires to, assume and control the defense thereof;
provided, however, that the Lessee shall have acknowledged in writing its
obligation to fully indemnify such Indemnitee to the extent provided herein in
respect of such action, suit or proceeding, and, the Lessee shall keep such
Indemnitee fully apprised of the status of such action suit or proceeding and
shall provide such Indemnitee with all information with respect to such action
suit or proceeding as such Indemnitee shall reasonably request, and provided,
further, that the Lessee shall not be entitled to assume and control the defense
of any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves any risk of imposition of criminal liability or any risk of imposition
of civil liability on such Indemnitee or will involve a risk of the imminent
sale, forfeiture or loss of, or the creation of any Lien (other than a Permitted
Lien) on the Property or any part thereof unless, in the case of civil
liability, the Lessee shall have posted a bond or other security satisfactory to
the relevant Indemnitees in respect to such risk or (y) the control of such
action, suit or proceeding would involve an actual or potential conflict of
interest, (B) such proceeding involves Claims not fully indemnified by the
Lessee which the Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), or (C) an Event of Default has occurred and is continuing.
The
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Indemnitee may participate in a reasonable manner at its own expense and with
its own counsel in any proceeding conducted by the Lessee in accordance with the
foregoing. The Lessee shall not enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section 26.1
or 26.3 without the prior written consent of the Indemnitee, which consent shall
not be unreasonably withheld in the case of a money settlement not involving an
admission of liability of such Indemnitee; provided, however, that in the event
that such Indemnitee withholds consent to any settlement or other compromise,
the Lessee shall not be required to indemnify such Indemnitee under Section 26.1
or 26.3 to the extent that the applicable Claim (x) is for legal fees and
expenses incurred after the date of the proposed settlement or (y) results in a
judgment in excess of such offered money settlement.
Each Indemnitee shall at the expense of the Lessee supply the Lessee
with such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by Section 26.1 or 26.3. Unless an Event of
Default shall have occurred and be continuing, no Indemnitee shall enter into
any settlement or other compromise with respect to any Claim which is entitled
to be indemnified under Section 26.1 or 26.3 without the prior written consent
of the Lessee, which consent shall not be unreasonably withheld, unless such
Indemnitee waives its right to be indemnified under Section 26.1 or 26.3 with
respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section
26.1 or 26.3 to or on behalf of an Indemnitee, the Lessee, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Upon receipt by any Indemnitee of a repayment or reimbursement of all
or any part of any Claim for which such Indemnitee has already received payment
by the Lessee pursuant to Section 26.1 or 26.3, such Indemnitee shall pay to the
Lessee, as promptly as practicable after the receipt thereof, the amount of such
repayment or reimbursement plus any amount received by such Indemnitee as a
component of such repayment of reimbursement representing interest in respect of
such Claim. Section 26.5(c) shall be applicable to this provision. The Lessee
shall reimburse the Indemnitee for any out of pocket costs and reasonable
internal costs incurred in determining the amount of any tax savings required to
be paid to the Lessee pursuant to Section 26.5(c).
Any amount payable to an Indemnitee pursuant to Section 26.1 or 26.3
shall be paid to such Indemnitee promptly upon receipt of a written demand
therefor from such Indemnitee,
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accompanied by a written statement describing in reasonable detail the basis for
such indemnity and the computation of the amount so payable and, if requested by
the Lessee, such determination shall be verified by a nationally recognized
independent accounting firm mutually acceptable to the Lessee and the Indemnitee
at the expense of the Lessee; provided, however, that if the Lessee has assumed
the defense of the related Claim or is paying the costs of the Indemnitee's
defense of the related claim on an ongoing basis, the Lessee shall not be
required to pay such amount to the applicable Indemnitee until such time as a
judgment is entered with respect to such Claim, the enforcement of which is not
stayed or which judgment is not bonded over, or the Claim is otherwise settled
in accordance with this Lease or lost.
26.5. General Tax Indemnity.
(a) Indemnification. During the Term, the Lessee shall pay and
assume liability for, and does hereby agree to indemnify, protect and
defend the Property and all Tax Indemnitees, and hold them harmless
against, all Impositions on an After Tax Basis.
(b) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax
Indemnitee (including a written notice of such proceeding) for any
Imposition as to which the Lessee may have an indemnity obligation
pursuant to this Section 26.5, or if any Tax Indemnitee shall determine
that any Imposition as to which the Lessee may have an indemnity
obligation pursuant to this Section 26.5 may be payable, such Tax
Indemnitee shall promptly (and in any event, within 30 days) notify the
Lessee in writing (provided that failure to so notify the Lessee within
30 days shall not alter such Tax Indemnitee's rights under this Section
26.5 except to the extent such failure precludes or materially
adversely affects the ability to conduct a contest of any indemnified
Taxes) and shall not take any action with respect to such claim,
proceeding or Imposition without the written consent of the Lessee
(such consent not to be unreasonably withheld or unreasonably delayed)
for 30 days after the receipt of such notice by the Lessee; provided,
however, that in the case of any such claim or proceeding, if such Tax
Indemnitee shall be required by law or regulation to take action prior
to the end of such 30-day period, such Tax Indemnitee shall in such
notice to the Lessee, so inform the Lessee, and such Tax Indemnitee
shall not take any action with respect to such claim, proceeding or
Imposition without the consent of the Lessee (such consent not to be
unreasonably withheld or unreasonably delayed) for 10 days after the
receipt of such notice by the Lessee unless the Tax Indemnitee shall be
required by law or regulation to take action prior to the end of such
10-day period.
The Lessee shall be entitled for a period of 30 days from
receipt of such notice from the Tax Indemnitee (or such shorter period
as the Tax Indemnitee has notified the Lessee is required by law or
regulation for the Tax Indemnitee to commence such
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contest), to request in writing that such Tax Indemnitee contest the
Imposition, at the Lessee's expense. If (x) such contest can be pursued
in the name of the Lessee and independently from any other proceeding
involving a Tax liability of such Tax Indemnitee for which the Lessee
has not agreed to indemnify such Tax Indemnitee, (y) such contest must
be pursued in the name of the Tax Indemnitee, but can be pursued
independently from any other proceeding involving a Tax liability of
such Tax Indemnitee for which the Lessee has not agreed to indemnify
such Tax Indemnitee or (z) the Tax Indemnitee so requests, then the
Lessee shall be permitted to control the contest of such claim,
provided that in the case of a contest described in clause (y), if the
Tax Indemnitee determines in good faith that such contest by the Lessee
could have a material adverse impact on the business or operations of
the Tax Indemnitee and provides a written explanation to the Lessee of
such determination, the Tax Indemnitee may elect to control or reassert
control of the contest, and provided, that by taking control of the
contest, Lessee acknowledges that it is responsible for the Imposition
ultimately determined to be due by reason of such claim, and provided,
further, that in determining the application of clauses (x) and (y) of
the preceding sentence, each Tax Indemnitee shall take any and all
reasonable steps to segregate claims for any Taxes for which the Lessee
indemnifies hereunder from Taxes for which the Lessee is not obligated
to indemnify hereunder, so that the Lessee can control the contest of
the former. In all other claims requested to be contested by the
Lessee, the Tax Indemnitee shall control the contest of such claim,
acting through counsel reasonably acceptable to the Lessee. In no event
shall the Lessee be permitted to contest (or the Tax Indemnitee
required to contest) any claim, (A) if such Tax Indemnitee provides the
Lessee with a legal opinion of counsel reasonably acceptable to the
Lessee that such action, suit or proceeding involves a risk of
imposition of criminal liability or will involve a material risk of the
sale, forfeiture or loss of, or the creation of any Lien (other than a
Permitted Lien) on the Property or any part thereof unless the Lessee
shall have posted and maintained a bond or other security reasonably
satisfactory to the relevant Tax Indemnitee in respect to such risk,
(B) if an Event of Default has occurred and is continuing unless the
Lessee shall have posted and maintained a bond or other security
satisfactory to the relevant Tax Indemnitee in respect of the Taxes
subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably foreseeable in connection with the
contest of such claim, (C) unless the Lessee shall have agreed to pay
and shall pay, to such Tax Indemnitee on demand all reasonable
out-of-pocket costs, losses and expenses that such Tax Indemnitee may
incur in connection with contesting such Imposition including all
reasonable legal, accounting and investigatory fees and disbursements,
or (D) if such contest shall involve the payment of the Tax prior to
the contest, unless the Lessee shall provide to the Tax Indemnitee an
interest-free advance in an amount equal to the Imposition that the
Indemnitee is required to pay (with no additional net after-tax costs
to such Tax Indemnitee). In addition for Tax Indemnitee controlled
contests and claims contested in the name of the Tax Indemnitee in a
public forum, no contest shall be required: (A) unless the amount
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of the potential indemnity (taking into account all similar or
logically related claims that have been or could be raised in any audit
involving such Tax Indemnitee for which the Lessee may be liable to pay
an indemnity under this Section 26.5(b)) exceeds $500,000 and (B)
unless, if requested by the Tax Indemnitee, the Lessee shall have
provided to the Tax Indemnitee an opinion of counsel selected by the
Lessee (which may be in-house counsel) (except, in the case of income
taxes indemnified hereunder which shall be an opinion of independent
tax counsel selected by the Tax Indemnitee and reasonably acceptable to
the Lessee) that a reasonable basis exists to contest such claim. In no
event shall a Tax Indemnitee be required to appeal an adverse judicial
determination to the United States Supreme Court.
The party conducting the contest shall consult in good faith
with the other party and its counsel with respect to the contest of
such claim for Taxes (or claim for refund) but the decisions regarding
what actions to be taken shall be made by the controlling party in its
sole judgement, provided, however, that if the Tax Indemnitee is the
controlling party and the Lessee recommends the acceptance of a
settlement offer made by the relevant Governmental Authority and such
Tax Indemnitee rejects such settlement offer then the amount for which
the Lessee will be required to indemnify such Tax Indemnitee with
respect to the Taxes subject to such offer shall not exceed the amount
which it would have owed if such settlement offer had been accepted. In
addition, the controlling party shall keep the noncontrolling party
reasonably informed as to the progress of the contest, and shall
provide the noncontrolling party with a copy of (or appropriate
excerpts from) any reports or claims issued by the relevant auditing
agents or taxing authority to the controlling party thereof, in
connection with such claim or the contest thereof.
Each Tax Indemnitee shall at the Lessee's expense supply the
Lessee with such information and documents reasonably requested by the
Lessee as are necessary or advisable for the Lessee to participate in
any action, suit or proceeding to the extent permitted by this Section
26.5(b). No Tax Indemnitee shall enter into any settlement or other
compromise or fail to appeal an adverse ruling with respect to any
claim which is entitled to be indemnified under this Section 26.5 (and
with respect to which contest is required under this Section 26.5(b))
without the prior written consent of the Lessee, unless such Tax
Indemnitee waives its right to be indemnified under this Section 26.5
with respect to such claim.
Notwithstanding anything contained herein to the contrary, a
Tax Indemnitee will not be required to contest (and the Lessee shall
not be permitted to contest) a claim with respect to the imposition of
any Tax if such Tax Indemnitee shall waive its right to indemnification
under this Section 26.5 with respect to such claim (and any claim with
respect to such year or any other taxable year the contest of which is
materially adversely affected as a result of such waiver), unless the
failure to contest such claim
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would, in the reasonable judgement of the Lessee, have an adverse
effect on the Lessee (except for such effect which is not material), in
which case such claim may be contested at the request and expense of
the Lessee, with such claim remaining subject to the indemnification
provided hereunder.
(c) Reimbursement for Tax Savings. If (x) a Tax Indemnitee or
any Affiliate thereof realizes a deduction, offset, credit or refund of
any Taxes or any other savings or benefit as a result of any indemnity
paid by the Lessee pursuant to this Section 26.5 or (y) by reason of
the incurrence or imposition of any Tax (or the circumstances or event
giving rise thereto) for which a Tax Indemnitee is indemnified
hereunder or any payment made to or for the account of such Tax
Indemnitee by the Lessee pursuant to this Section 26.5 or any payment
made by a Tax Indemnitee to the Lessee by reason of this Section
26.5(c), such Tax Indemnitee at any time actually realizes a reduction
in any Taxes for which the Lessee is not required to indemnify such Tax
Indemnitee pursuant to this Section 26.5 which reduction in Taxes was
not taken into account in computing such payment by the Lessee to or
for the account of such Tax Indemnitee or by the Tax Indemnitee to the
Lessee, then such Tax Indemnitee shall promptly pay to the Lessee (xx)
the amount of such deduction, offset, credit, refund, or other savings
or benefit together with the amount of any interest received by such
Tax Indemnitee on account of such deduction, offset, credit, refund or
other savings or benefit or (yy) an amount equal to such reduction in
Taxes, as the case may be, in either case together with an amount equal
to any reduced Taxes payable by such Tax Indemnitee as a result of such
payment; provided that no such payment shall be made so long as a
Default or Event of Default shall have occurred and be continuing but
shall be paid promptly after cure of such Default or Event of Default.
Each Tax Indemnitee agrees to take such actions as the Lessee may
reasonably request (provided in the good faith judgment of the Tax
Indemnitee, such actions would not result in a material adverse effect
on the Tax Indemnitee for which the Tax Indemnitee is not entitled to
indemnification from the Lessee) and to otherwise act in good faith to
claim such refunds and other available Tax benefits, and take such
other actions as may be reasonable to minimize any payment due from the
Lessee pursuant to this Section 26.5 and to maximize the amount of any
Tax savings available to it. The disallowance or reduction of any
credit, refund or other tax savings with respect to which a Tax
Indemnitee has made a payment to the Lessee under this Section 26.5(e)
shall be treated as a Tax for which the Lessee is obligated to
indemnify such Tax Indemnitee hereunder without regard to the
exclusions set forth in the definition of Impositions except the
exclusions set forth in clauses (iv), (v), (vi), (vii), (ix), (x),
(xi), (xiv) and (xvi) of such definition.
(d) Payments. Any Imposition indemnifiable under this Section
26.5 shall be paid directly when due to the applicable taxing authority
if direct payment is practicable and permitted. If direct payment to
the applicable taxing authority is not
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permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to Section 26.5 shall be paid within thirty (30)
days after receipt of a written demand therefor from such Tax
Indemnitee accompanied by a written statement describing in reasonable
detail the amount so payable, but not before two Business Days prior to
the date that the relevant Taxes are due. Any payments made pursuant to
this Section 26.5 shall be made directly to the Tax Indemnitee entitled
thereto or the Lessee, as the case may be, in immediately available
funds at such bank or to such account as specified by the payee in
written directions to the payor, or, if no such direction shall have
been given, by check of the payor payable to the order of the payee by
certified mail, postage prepaid at its address as set forth in Schedule
I hereto. Upon the request of any Tax Indemnitee with respect to a Tax
that the Lessee is required to pay, the Lessee shall furnish to such
Tax Indemnitee the original or a certified copy of a receipt for the
Lessee's payment of such Tax or such other evidence of payment as is
reasonably acceptable to such Tax Indemnitee.
(e) Reports. In the case of any report, return or statement
required to be filed with respect to any Taxes that are subject to
indemnification under this Section 26.5 and of which the Lessee has
knowledge, the Lessee shall promptly notify the Tax Indemnitee of such
requirement and, at the Lessee's expense (i) if the Lessee is permitted
(unless otherwise requested by the Tax Indemnitee) by Applicable Law,
timely file such report, return or statement in its own name or (ii) if
such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee or the Tax Indemnitee otherwise requests
that such report, return or statement for filing by such Tax Indemnitee
in such manner as shall be satisfactory to such Tax Indemnitee and send
the same to the Tax Indemnitee for filing no later than 15 days prior
to the due date therefor. In any case in which the Tax Indemnitee will
file any such report, return or statement, the Lessee shall, upon
written request of such Tax Indemnitee, provide such Tax Indemnitee
with such information as is reasonably necessary to allow the Tax
Indemnitee to file such report, return or statement.
(f) Verification. At the Lessee's request, the amount of any
indemnity payment by the Lessee or any payment by a Tax Indemnitee to
the Lessee pursuant to this Section 26.5 shall be verified and
certified by an independent public accounting firm mutually acceptable
to the Lessee and the Tax Indemnitee. The costs of such verification
shall be borne by the Lessee unless such verification shall result in
an adjustment in the Lessee's favor of the lesser of (i) $10,000, and
(ii) 5 percent of the payment as computed by the Tax Indemnitee, in
which case such fee shall be paid by the Tax Indemnitee. In no event
shall the Lessee have the right to review the Tax Indemnitee's tax
returns or receive any other confidential information from the Tax
Indemnitee in connection with such verification. Any information
provided to such accountants by any Person shall be and remain the
exclusive property of such Person and shall be deemed by the parties to
be (and the accountants will confirm in writing
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that they will treat such information as) the private, proprietary and
confidential property of such Person, and no Person other than such
Person and the accountants shall be entitled thereto and all such
materials shall be returned to such Person. Such accounting firm shall
be requested to make its determination within 30 days of the Lessee's
request for verifications and the computations of the accounting firm
shall be final, binding and conclusive upon the Lessee and the Tax
Indemnitee. The parties agree that the sole responsibility of the
independent public accounting firm shall be to verify the amount of a
payment pursuant to this Lease and that matters of interpretation of
this Lease are not within the scope of the independent accounting
firm's responsibilities.
(g) Tax Ownership. The Lessor represents and warrants that it
will not, prior to the termination of this Lease, claim ownership of
(or any tax benefits, including depreciation, with respect to) the
Property for any income tax purposes, it being understood that the
Lessee is and will remain the owner of the Property for such income tax
purposes until the termination of this Lease. If, notwithstanding the
income tax intentions of the parties as set forth herein, the Lessor
actually receives any income tax deductions, reductions in income tax
or other income tax benefit as a result of any claim for, or
recharacterization requiring such party to take, any tax benefits
attributable to ownership of the Property for income tax purposes, the
Lessor shall pay to the Lessee, together with an amount equal to any
reduced Taxes payable by such Tax Indemnitee as a result of such
payment, the amount of such income tax savings actually realized by the
Lessor (less the amount of any anticipated increase in income tax which
the Lessor determines is currently payable as a result of such claim or
recharacterization), provided that the Lessee shall agree to reimburse
the Lessor for any subsequent increase in the Lessor's income taxes
resulting from such claim or recharacterization not taken into account
in the payment made to the Lessee, up to the amount paid to the Lessee
by the Lessor. The parties agree that this Section 26.5(g) is intended
to require a payment to the Lessee if and only if the Lessor shall have
actually received an unanticipated tax savings with respect to the
Property that would not have been received if the Lessor had advanced
funds to the Lessee in the form of a loan secured by the Property in an
amount equal to the Lease Balance. Nothing in this Section 26.5(g)
shall be construed to require the Lessor to take any affirmative action
to realize any tax savings if in its good faith judgment such action
may have a material adverse affect on the Lessor.
26.6. Funding Losses. If any payment of Rent or the Lease Balance,
including pursuant to Lessee's exercise of the Purchase Option under Section
22.1, is made on any day other than the last day of an Interest Period
applicable thereto, the Lessee shall reimburse the Lessor within fifteen (15)
days after written demand for any resulting loss or expense incurred by it,
including (without limitation) any loss incurred in obtaining, liquidating or
employing deposits from third parties, swaps, xxxxxx or similar transactions
entered into in connection
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with or in contemplation of transactions relating to the Property but excluding
loss of margin for the period after any such payment or conversion or failure to
borrow or prepay, provided that the Lessor shall have delivered to the Lessee a
certificate as to the amount of such loss or expense, which certificate shall be
conclusive in the absence of manifest error, and provided, further, that such
loss shall in no event exceed the then effective Lease Rate which would have
been payable for the balance of such Interest Period. The Lessor will, at the
request of the Lessee, furnish such additional information concerning the
determination of such loss as the Lessee may reasonably request.
26.7. Regulation D Compensation. During the Term, for so long as the
Lessor (or an Affiliate thereof) is required to maintain reserves against
"Eurocurrency Liabilities" (or any other category of liabilities which include
deposits by reference to which the Lease Rate is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of the Lessor to United States residents), and, as a result, the cost to
the Lessor (or its Funding Office) of making or maintaining its Advances is
increased, then the Lessor may require the Lessee to pay, contemporaneously with
each payment of Rent, an additional amount at a rate per annum up to but not
exceeding the excess of (i) (A) the applicable Eurodollar Rate divided by (B)
one minus the Eurocurrency Reserve Requirements and (ii) the applicable
Eurodollar Rate. In the event that the Lessor wishes to require payment of such
additional amount, the Lessor (x) shall so notify the Lessee, in which case such
additional Rent shall be payable to the Lessor at the place indicated in such
notice with respect to each Interest Period commencing at least three Business
Days after the giving of such notice and (y) shall furnish to the Lessee at
least five Business Days prior to each date on which Rent is payable a
certificate setting forth the amount to which it is then entitled under this
Section (which shall be consistent with its good faith estimate of the level at
which the related reserves are maintained by it). Each such certificate shall be
accompanied by such information as the Lessee may reasonably request as to the
computation set forth therein.
26.8. Deposits Unavailable. If on or prior to the first day of any
Interest Period:
(a) deposits in dollars (in the applicable amounts) are not
being offered to the Lessor (or its Affiliates) in the relevant market
for such Interest Period, or
(b) the Lessor advises the Lessee that the Eurodollar Rate as
determined by the Lessor will not adequately and fairly reflect the
cost to the Lessor of funding Advances for such Interest Period,
the Lessor shall forthwith give notice thereof to the Lessee, whereupon until
the Lessor notifies the Lessee that the circumstances giving rise to such
suspension no longer exist, (i) the obligation of the Lessor to make Advances at
the Eurodollar Rate shall be suspended, (ii) any Advance made thereafter shall
be made at the Alternate Base Rate, and (iii) each outstanding Advance shall
begin to bear interest at the Alternate Base Rate on the last day of the then
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current Interest Period applicable thereto. The Lessor shall provide to the
Lessee a statement in writing of the Alternate Base Rate as calculated
hereunder.
26.9. Illegality. If during the Term, the adoption of any applicable
law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Lessor (or its Funding Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Lessor (or its Funding Office) to make, maintain or fund its Advances, and the
Lessor shall so notify the Lessee, whereupon until the Lessor notifies the
Lessee that the circumstances giving rise to such suspension no longer exist,
the obligation to make Advances shall be suspended. The Lessor, with the consent
of the Lessee (which consent shall not unreasonably be withheld), will designate
a different Funding Office if such designation will avoid the need for giving
such notice and will not, in the judgment of the Lessor, be otherwise
disadvantageous to the Lessor. If such notice is given (i) the Lessee shall be
entitled upon its request to a reasonable explanation of the factors underlying
such notice and (ii) each Advance then outstanding shall begin to bear interest
at the Alternate Base Rate either (a) on the last day of the then current
Interest Period applicable thereto, if the Lessor may lawfully continue to
maintain and fund such Advance to such day or (b) immediately, if the Lessor
shall determine that it may not lawfully continue to maintain and fund such
Advance to such day. The Lessor shall provide to the Lessee a statement in
writing of the Alternate Base Rate as calculated hereunder.
26.10. Increased Cost and Reduced Return.
(a) In the event during the Term that the adoption of any
applicable law, rule or regulation, or any change therein or in the
interpretation or application thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof or compliance by the Lessor with any request or
directive after the date hereof (whether or not having the force of
law) of any such authority, central bank or comparable agency:
(i) does or shall subject the Lessor to any additional
tax of any kind whatsoever with respect to the Operative
Documents or any Advance made by it, or change the basis or the
applicable rate of taxation of payments to the Lessor of
principal, interest or any other amount payable hereunder
(except for the imposition of or change in any tax on or
measured by the overall net income of the Lessor (other than any
such tax imposed by means of withholding));
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, insurance assessment, compulsory
loan or similar requirement against assets held by, or deposits
or other liabilities in or for the account of, advances
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or loans by, or other credit extended by, or any other
acquisition of funds by, any office of the Lessor which are not
otherwise included in determination of the rate of interest on
Advances hereunder; or
(iii) does or shall impose on the Lessor any other
condition;
and the result of any of the foregoing is to increase the cost to the
Lessor of making or maintaining Advances or to reduce any amount
receivable hereunder, then in any such case, the Lessee shall promptly
pay to the Lessor, upon demand, any additional amounts necessary to
compensate the Lessor for such increased cost or reduced amount
receivable which the Lessor deems to be material as determined by the
Lessor with respect to its Advances.
(b) If the Lessor shall have determined that, after the date
hereof the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on capital of the Lessor (or any
entity directly or indirectly controlling the Lessor) as a consequence
of the Lessor's obligations under the Operative Documents to a level
below that which the Lessor (or any entity directly or indirectly
controlling the Lessor) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by the Lessor to
be material, then from time to time, within fifteen (15) days after
demand by the Lessor, the Lessee shall pay to the Lessor such
additional amount or amounts as will compensate the Lessor (or its
Parent) for such reduction.
(c) The Lessor will promptly notify the Lessee of any event of
which it has knowledge, occurring after the date hereof, which will
entitle the Lessor to compensation pursuant to this Section and will,
if practicable, with the consent of the Lessee (which consent shall not
unreasonably be withheld), designate a different Funding Office or take
any other reasonable action if such designation or action will avoid
the need for, or reduce the amount of, such compensation and will not,
in the judgment of the Lessor, be otherwise disadvantageous to the
Lessor. A certificate of the Lessor claiming compensation under this
Section and setting forth in reasonable detail its computation of the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, the Lessor may use any reasonable averaging and attribution
methods.
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(d) Notwithstanding the foregoing clauses (a) and (b) of this
Section 26.10, the Lessee shall only be obligated to compensate the
Lessor for any amount arising or accruing both:
(i) during (A) any time or period commencing (x) in
the case of subsection (a), not earlier than the first day of
any Interest Period in effect on the date which, and (y) in the
case of subsection (b), not earlier than the date on which the
Lessor notifies the Lessee that it proposes to demand such
compensation and identifies to the Lessee the statute,
regulation or other basis upon which the claimed compensation is
or will be based and (B) any time or period during which,
because of the retroactive application of such statute,
regulation or other basis, the Lessor did not know that such
amount would arise or accrue; and
(ii) within six months prior to any written demand
therefor, accompanied by a certificate of the Lessor claiming
compensation and setting forth in reasonable detail its
computation of the additional amount or amounts to be paid to it
hereunder.
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1. Estoppel Certificates. At any time and from time to time upon
not less than twenty (20) days' prior request by the Lessor or the Lessee (the
"Requesting Party"), the other party (whichever party shall have received such
request, the "Certifying Party") shall furnish to the Requesting Party (but not
more than four times per year unless required to satisfy the requirements of any
sublessees and only to the extent that the required information has been
provided to the Lessor by the Lessee) a certificate signed by an individual
having the office of vice president or higher in the Certifying Party certifying
that this Lease is in full force and effect (or that this Lease is in full force
and effect as modified and setting forth the modifications); the dates to which
the Basic Rent and Supplemental Rent have been paid; to the knowledge of the
signer of such certificate, whether or not the Requesting Party is in default
under any of its obligations hereunder (and, if so, the nature of such alleged
default); and such other matters under this Lease as the Requesting Party may
reasonably request. Any such certificate furnished pursuant to this Article
XXVII may be relied upon by the Requesting Party, and any existing or
prospective mortgagee, purchaser or lender, and any accountant or auditor, of,
from or to the Requesting Party (or any Affiliate thereof).
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ARTICLE XXVIII
ACCEPTANCE OF SURRENDER
28.1. Acceptance of Surrender. No surrender to the Lessor of this
Lease or of all or any portion of the Property or of any part of any thereof or
of any interest therein shall be valid or effective unless agreed to and
accepted in writing by the Lessor, and no act by the Lessor or any
representative or agent of the Lessor, other than a written acceptance, shall
constitute an acceptance of any such surrender.
ARTICLE XXIX
NO MERGER OF TITLE
29.1. No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee or groundleasehold estate in the Property,
except as may expressly be stated in a written instrument duly executed and
delivered by the appropriate Person or (c) a beneficial interest in the Lessor.
ARTICLE XXX
INTENT OF THE PARTIES
30.1. Ownership of the Property. (a) It is the intent of the parties
hereto that for financial accounting purposes the Lease constitutes an
"operating lease" pursuant to Statement of Financial Accounting Standards No.
13, as amended, and for purposes of bankruptcy and federal, state and local
income tax law, the transaction contemplated hereby is a financing arrangement.
The parties further intend that Lessee shall be treated as owner of the Property
for income tax purposes and shall be entitled to all deductions for depreciation
thereof. Lessor shall take no action inconsistent with such treatment.
(b) It is the intent of the parties hereto that (i) for all
purposes other than financial accounting purposes, the obligations of
the Lessee under this Lease to pay Capitalized Interest or Basic Rent
and Supplemental Rent or Lease Balance in connection with any purchase
of the Property pursuant to this Lease shall be treated as payments of
interest on and principal of, respectively, loans from the Lessor to
the Lessee, and (ii) this Lease grants to the Lessor a security
interest and/or deed of trust/mortgage on the portions of the Property
which constitute interests in real property, and a security interest
and lien on the portions of the Property which do not constitute
interests in real property, in each case to secure the Lessee's
performance under and payment of all amounts under this Lease and the
other Operative Documents.
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(c) Specifically, without limiting the generality of subsection
(a) of this Section 30.1, the Lessor and the Lessee intend and agree
that in the event of any insolvency or receivership proceedings or a
petition under the United States bankruptcy laws or any other
applicable insolvency laws or statute of the United States of America
or any State or Commonwealth thereof affecting the Lessee and the
Lessor, the transactions evidenced by this Lease are loans made by the
Lessor as unrelated third party lender to the Lessee secured by the
Property (it being understood that the Lessee hereby and pursuant to
the terms of the Memorandum of Lease, mortgages, grants, bargains,
sells, releases, confirms, conveys, assigns, transfers and sets over to
the Lessor, and grants a security interest in, the Property (consisting
of a fee mortgage with respect to all right, title and interest of the
Lessee in and to the fee title to, and reversionary interest in, the
Land and Improvements) and a leasehold mortgage on the Lessee's
leasehold estate under this Lease, all to secure such loans, effective
on the date hereof, to have and to hold such interests in the Property
unto the Lessor and its successors and assigns, forever, provided
always that these presents are upon the express condition that, if all
amounts due under this Lease shall have been paid and satisfied in
full, then this instrument and the estate hereby granted shall cease
and become void.
(d) Specifically, but without limiting the generality of
subsection (b) of this Section 30.1, the Lessor and the Lessee further
intend and agree that, with respect to that portion of the Property
constituting personal property, for the purpose of securing the
Lessee's obligations for the repayment of the above-described loans
from the Lessor to the Lessee, (i) this Lease and the Memorandum of
Lease shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial
Code; (ii) the conveyance provided for hereby and by the Memorandum of
Lease shall be deemed to be a grant by the Lessee to the Lessor of a
lien and security interest in all of the Lessee's present and future
right, title and interest in and to such portion of the Property,
including but not limited to the Lessee's leasehold estate therein and
all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, investments, securities or other property, whether
in the form of cash, investments, securities or other property to
secure such loans, effective on the date hereof, to have and to hold
such interests in the Property unto the Lessor and its successors and
assigns, forever, provided always that these presents are upon the
express condition that, if all amounts due under this Lease shall have
been paid and satisfied in full, then this instrument and the estate
hereby granted shall cease and become void; (iii) the possession by the
Lessor of notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to Section 9-305 of the
Uniform Commercial Code; and (iv) notifications to Persons holding such
property, and acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of the Lessee shall
be deemed to have been given for the purpose of perfecting such
security
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interest under Applicable Law. The Lessor and the Lessee shall, to the
extent consistent with this Lease, take such actions and execute,
deliver, file and record such other documents, financing statements,
mortgages and deeds of trust, including, without limitation, the
Memorandum of Lease as may be necessary to ensure that, if this Lease
were deemed to create a security interest in the Property in accordance
with this Section, such security interest would be deemed to be a
perfected security interest with priority over all Liens other than
Permitted Liens, under Applicable Law and will be maintained as such
throughout the Term.
30.2. Grant of Lien and Power of Sale. The Lessee has agreed to grant,
and does hereby grant, the Liens, rights and remedies (including the power of
sale remedy) set forth on Exhibit B hereto, the terms of which are incorporated
by reference herein and made a part hereof as if originally set forth herein in
full.
ARTICLE XXXI
PAYMENT OF CERTAIN EXPENSES
31.1. Transaction Expenses.
(a) The Lessee shall pay, or cause to be paid from Advances
during the Construction Period, from time to time all Transaction
Expenses in respect of the transactions taking place on the
Documentation Date, the Closing Date and on each Funding Date on such
respective date; provided, however, that, if the Lessee has not
received written invoices therefor prior to such date, such Transaction
Expenses shall be paid within ten (10) Business Days after the Lessee
has received written invoices therefor.
(b) The Lessee shall pay or cause to be paid (i) all Transaction
Expenses incurred by the Lessor in entering into any future amendments
or supplements with respect to any of the Operative Documents, whether
or not such amendments or supplements are ultimately entered into, or
giving or withholding of waivers of consents hereto or thereto, in each
case which have been requested by or approved by the Lessee, (ii) all
Transaction Expenses incurred by the Lessor in connection with any
purchase of the Property by the Lessee or other Person pursuant to this
Lease and (iii) all Transaction Expenses incurred by the Lessor in
respect of enforcement of any of Lessor's rights or remedies against
the Lessee in respect of the Operative Documents.
31.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or cause to
be paid any brokers' fees incurred or otherwise caused by the Lessee and any and
all stamp, transfer and other similar taxes, fees and excises, if any, including
any interest and penalties, which are
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payable in connection with the transactions contemplated by this Lease and the
other Operative Documents.
ARTICLE XXXII
OTHER COVENANTS AND AGREEMENTS OF LESSEE
32.1. Covenants. The Lessee hereby agrees that so long as this Lease
is in effect:
(a) Information. The Lessee will deliver to the Lessor:
(i) the following financial and other information: (A)
as soon as available and in any event within sixty days after
the end of each semi-annual accounting period of the Lessee, the
semi-annual consolidated financial statements of the Lessee and
its consolidated subsidiaries (including a balance sheet as at
the end of such semi-annual accounting period and statements of
income and cash flows for such semi-annual accounting period)
prepared in accordance with GAAP (subject to normal year end
adjustments and excluding the treatment of goodwill)
consistently applied; and (B) as soon as available and in any
event within 100 days after the end of each fiscal year of the
Lessee, a copy of the annual consolidated financial statements
for such year for the Lessee and its consolidated subsidiaries
(including a balance sheet as at the end of such fiscal year and
statements of income and cash flows for such fiscal year), which
shall be prepared in accordance with GAAP consistently applied
and audited by KPMG Peat Marwick LLP or another nationally
recognized independent public accountants in accordance with
generally accepted auditing standards;
(ii) as soon as possible and in any event within five
days after a Responsible Employee of the Lessee shall have
knowledge of the occurrence of each Event of Default or each
event that, with the giving of notice or time elapse, or both,
would constitute an Event of Default continuing on the date of
such statement, a statement of the authorized officer setting
forth details of such Event of Default or event and the action
that the Lessee proposes to take with respect thereto; and
(iii) during the Term, concurrently with their being
filed, mailed or delivered, as applicable, copies of all proxy
statements, financial statements and reports which the Lessee
shall send or make available generally to its shareholders, and
copies of all reports on Forms 10-K, 10-Q and 8-K and all other
filings and reports specifically requested by the Lessor which
the Lessee or any Subsidiary may be required to file with the
Securities and Exchange Commission, any similar or corresponding
governmental commission,
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department or an agency substituted therefor or with any
securities exchange located in the United States of America.
(b) Delivery of Lease Supplement. The Lessee will execute and
deliver on the Base Date the Lease Supplement.
(c) Merger, Consolidation. The Lessee will not merge or
consolidate with any other corporation or sell or convey all or
substantially all of its assets to any person, firm or corporation,
unless (i) either the Lessee shall be the continuing corporation, or
the successor corporation (if other than the Lessee) shall be a
corporation organized and existing under the laws of the United States
of America or a state thereof and such corporation shall expressly
assume the obligations of the Lessee under this Lease and the other
Operative Documents and (ii) the Lessee or such successor corporation,
as the case may be, shall not, immediately after and as a result of
such merger or consolidation, or such sale or conveyance, be in default
in the performance of any covenant or condition in this Lease or any
other Operative Document. In the event of any such consolidation,
merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and
be substituted for the Lessee in this Lease and the other Operative
Documents, with the same effect as if it had been originally named
herein and therein.
(d) Further Assurances. The Lessee shall take or cause to be
taken from time to time all action necessary to assure that the intent
of the parties pursuant to the Operative Documents is given effect as
contemplated by this Lease and that the Lessor holds a perfected Lien
on the Property securing the Lease Balance as contemplated by Section
30.1. The Lessee shall execute and deliver, or cause to be executed and
delivered, to the Lessor from time to time, promptly upon request
therefor, any and all other and further instruments (including
correction instruments and supplemental mortgages, deeds of trust and
security agreements) that may be reasonably requested by the Lessor to
cure any deficiency in the execution and delivery of this Lease or any
Operative Document to which it is a party.
(e) Preservation of Existence, Etc. Subject to Section 32.1(c),
the Lessee shall at all times maintain its corporate existence and
financial viability in the State of Wisconsin and shall remain
qualified to do business in the States of Wisconsin and Delaware.
(f) Compliance with Laws. The Lessee will comply in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA and the rules and regulations
thereunder) with respect to its material assets,
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including the Property, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
ARTICLE XXXIII
MISCELLANEOUS
33.1. Survival; Severability; Etc. Anything contained in this Lease to
the contrary notwithstanding, all claims against and liabilities of the Lessee
or the Lessor arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier termination
for a period of one year except as to indemnification which shall continue to
survive. If any term or provision of this Lease or any application thereof shall
be declared invalid or unenforceable, the remainder of this Lease and any other
application of such term or provision shall not be affected thereby. If any
right or option of the Lessee provided in this Lease would, in the absence of
the limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule of law relating to
the vesting of an interest in or the suspension of the power of alienation of
property, then such right or option shall be exercisable only during the period
which shall end twenty-one (21) years after the date of death of the last
survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the former President of
the United States, Xxxxx Xxxx, the deceased automobile manufacturer, and Xxxx X.
Xxxxxxxxxxx, the founder of the Standard Oil Company, known to be alive on the
date of the execution, acknowledgment and delivery of this Lease.
33.2. Amendments and Modifications. Neither this Lease nor any
provision hereof may be amended, waived, discharged or terminated except by an
instrument in writing in recordable form signed by the Lessor and the Lessee.
33.3. No Waiver. No failure by the Lessor or the Lessee to insist upon
the strict performance of any term hereof or to exercise any right, power or
remedy upon a default hereunder, and no acceptance of full or partial payment of
Rent during the continuance of any such default, shall constitute a waiver of
any such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
33.4. Notices. All notices, demands, requests, consents, approvals and
other communications hereunder shall be in writing (including by facsimile), and
directed to the address of the appropriate party as set forth in Schedule I.
33.5. Successors and Assigns. All the terms and provisions of this
Lease shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
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33.6. Headings and Table of Contents. The headings and table of
contents in this Lease are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof.
33.7. Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
33.8. GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES OTHER THAN SS.5-1401 OF THE NEW YORK
GENERAL OBLIGATION LAW (WHICH THE PARTIES HERETO SPECIFICALLY AGREE SHALL BE
APPLICABLE), EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD
ESTATES HEREUNDER AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO,
WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF WISCONSIN. WITHOUT LIMITING THE FOREGOING, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES OTHER THAN SS.5-1401 OF THE NEW
YORK GENERAL OBLIGATION LAW (WHICH THE PARTIES HERETO SPECIFICALLY AGREE SHALL
BE APPLICABLE), SHALL GOVERN THE CREATION, TERMS AND PROVISIONS OF THE
OBLIGATIONS EVIDENCED HEREBY, BUT THE LIEN CREATED HEREBY AND THE CREATION AND
THE ENFORCEMENT OF SAID LIEN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF WISCONSIN.
33.9. Original Lease. The single executed original of this Lease
marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature
page thereof and containing the receipt of the Lessor therefor on or following
the signature page thereof shall be the Original Executed Counterpart of this
Lease (the "Original Executed Counterpart"). To the extent 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 other
than the Original Executed Counterpart.
33.10. Waiver of Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS LEASE AND/OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF SUCH PARTIES. THE PARTIES
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HERETO ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LEASE AND EACH SUCH OTHER OPERATIVE
DOCUMENT.
33.11. Submission to Jurisdiction. The Lessee hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York for purposes of all legal proceedings arising out of or
relating to the Operative Documents or the transactions contemplated hereby. The
Lessee irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
33.12. Further Assurances. (a) The parties hereto shall promptly cause
to be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee (which during the Construction Period shall be funded by an Advance and
added to the Lease Balance), all such further acts, conveyances, documents and
assurances as the other parties may from time to time reasonably request in
order to carry out and preserve the security interests and liens (and the
priority thereof or release therefrom) intended to be created pursuant to this
Lease, the other Operative Documents, the documents relating to the Secondary
Financing, and the transactions contemplated hereunder and thereunder
(including, without limitation, the preparation, execution and filing of
security documents which the parties hereto may from time to time request to be
filed or effected).
(b) The parties hereto further agree to use their best efforts to cause
a mutually agreeable entity to commit to provide financing of no greater than
ninety-seven (97%) percent of the Commitment ("Secondary Financing") pursuant to
documents satisfactory to the Lessor, at the sole expense of the Lessee. In the
event that definitive documentation of the Secondary Financing is not executed
and delivered prior to June 15, 1999, the Applicable Margin shall equal 3.0% per
annum until July 15, 1999, at which time the Applicable Margin increases to 4.0%
per annum until the Secondary Financing is consummated pursuant to documents
satisfactory to the Lessor. In the event that the Applicable Margin is increased
pursuant to the preceding sentence, the parties agree to revise the calculation
of the Contingent Rental Adjustment to maintain compliance with the Statement of
Financial Accounting Standards No. 13 as in effect at such time.
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IN WITNESS WHEREOF, the parties have caused this Lease be duly executed
and delivered as of the date first above written.
ALTERNATIVE LIVING SERVICES INC.
By /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Senior Vice President
LEASE AND SECURITY
AGREEMENT
S-1
73
Commitment: SELCO SERVICE CORPORATION
$25,000,000
By /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Funding Office:
LEASE AND SECURITY
AGREEMENT
S-2
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THIS COUNTERPART IS NOT THE ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.
SELCO SERVICE CORPORATION
By /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
LEASE AND SECURITY
AGREEMENT
S-3
75
STATE OF ___________________)
) ss.
COUNTY OF __________________)
The foregoing instrument was acknowledged before me this day of
, 1999, by as of ALTERNATIVE LIVING
SERVICES INC., a corporation, on behalf of the corporation.
Witness my hand and official seal.
(SEAL)
-------------------------------
Notary Public
My commission expires:
00
XXXXX XX Xxx Xxxx )
-------------------
) ss.
COUNTY OF Albany )
-------------------
The foregoing instrument was acknowledged before me this 17th day of
February, 1999, by Xxxxxx X. Xxxxx as Vice President of SELCO SERVICE
CORPORATION, an Ohio corporation, on behalf of the corporation.
Witness my hand and official seal.
(SEAL) /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Notary Public
My commission expires:
77
SCHEDULE I
NOTICE INFORMATION
If to the Lessee:
Alternative Living Services
000 X. Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000
Telephone:
Fax:
Attention:
If to the Lessor:
SELCO Service Corporation
c/o KeyCorp. Leasing
00 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxx Xxxxx
with a copy to:
Xxxxx, Xxxxx & Xxxxx
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
78
ANNEX 1
TO
THE LEASE
Description of Land
Parcel 16 of Certified Survey Map No. 6616, recorded on January 28, 1999, in
Reel 4487, Images 1058-1063 as Document No. 7676908, being a redivision of
Parcel 7 of Certified Survey Map No. 6485, lying in the Xxxxxxxxx 0/0, Xxxxxxxxx
1/4 and Northwest 1/4 of Section 29, Town 7 North, Range 21 East, in the City of
Wauwatosa, County of Milwaukee, State of Wisconsin.
Part of Tax Key No. 000-0000-00
A-1
79
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS
1.1. Definitions; Interpretation.........................................................................................1
ARTICLE II
PURCHASE AND LEASE
2.1. Acceptance and Lease of Property....................................................................................1
2.2. Acceptance Procedure................................................................................................2
2.3. Lease Term..........................................................................................................2
2.4. Title...............................................................................................................2
ARTICLE III
FUNDING OF ADVANCES
3.1. Lessor Commitment...................................................................................................2
3.2. Procedures for Advances.............................................................................................3
3.3. Capitalized Interest Advances.......................................................................................3
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Documentation Date..................................................................................................4
4.2. Closing Date Conditions.............................................................................................5
(a) Operative Documents; No Default................................................................5
(b) Taxes..........................................................................................5
(c) Opinions of Counsel............................................................................5
(d) Governmental Actions...........................................................................5
(e) Litigation.....................................................................................5
(f) Requirements of Law............................................................................6
(g) Responsible Employee's Certificate.............................................................6
(h) Environmental Audit............................................................................6
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TABLE OF CONTENTS
(continued)
Section Page
------- ----
(i) Survey and Title Insurance.....................................................................6
(j) Recordation....................................................................................6
(k) Construction Agency Agreement Supplement.......................................................7
(l) Fees...........................................................................................7
(m) Certain Transaction Expenses...................................................................7
4.3. Conditions Precedent to each Advance................................................................................7
(a) Funding Request................................................................................7
(b) Fees...........................................................................................7
(c) Accuracy of Representations and Warranties.....................................................7
(d) Litigation.....................................................................................7
(e) No Default.....................................................................................8
(f) Commitment Amount..............................................................................8
(g) Cost of Completion.............................................................................8
(h) Building Permits...............................................................................8
4.4. Post Closing Conditions.............................................................................................8
(a) Architect's Certificate........................................................................8
(b) Appraisal......................................................................................8
(c) Evidence of Insurance..........................................................................9
ARTICLE V
CONDITIONS TO COMPLETION
5.1. Conditions to Completion of the Property............................................................................9
ARTICLE VI
REPRESENTATIONS
6.1. Representations of the Lessor.......................................................................................9
(a) ERISA..........................................................................................9
(b) Status.........................................................................................9
(c) Power and Authority...........................................................................10
6.2. Representations of Lessee..........................................................................................10
(a) Corporate Status..............................................................................10
(b) Enforceability................................................................................10
(c) No Violation..................................................................................10
(d) Litigation....................................................................................10
(e) Governmental Actions..........................................................................11
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TABLE OF CONTENTS
(continued)
Section Page
------- ----
(g) Taxes.........................................................................................11
(h) Prohibited Transactions.......................................................................11
(i) Environmental Laws............................................................................11
(j) Offer of Securities, etc......................................................................12
(k) Financial Statements..........................................................................12
(l) Property......................................................................................12
(m) Plans and Specifications......................................................................13
(n) Title.........................................................................................13
(o) Insurance.....................................................................................13
(p) Flood Hazard Areas............................................................................13
(q) Defaults......................................................................................14
(r) Use of Advances...............................................................................14
6.3. Representations of the Lessee with respect to each Advance.........................................................14
(a) Representations...............................................................................14
(b) Improvements..................................................................................14
(c) Liens.........................................................................................15
(d) Advance.......................................................................................15
ARTICLE VII
PAYMENT OF RENT; FEES
7.1. Rent...............................................................................................................15
7.2. Payment of Rent....................................................................................................16
7.3. Supplemental Rent..................................................................................................16
7.4. Fees...............................................................................................................16
7.5. Method of Payment..................................................................................................16
ARTICLE VIII
QUIET ENJOYMENT; RIGHT TO INSPECT
8.1. Quiet Enjoyment....................................................................................................17
8.2. Right to Inspect...................................................................................................17
ARTICLE IX
NET LEASE, ETC.
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TABLE OF CONTENTS
(continued)
Section Page
------- ----
9.1. Net Lease..........................................................................................................17
9.2. No Termination or Abatement........................................................................................18
ARTICLE X
SUBLEASES
10.1. Subletting........................................................................................................18
ARTICLE XI
LESSEE ACKNOWLEDGMENTS
11.1. Condition of the Property.........................................................................................19
11.2. Risk of Loss......................................................................................................19
ARTICLE XII
POSSESSION AND USE OF THE PROPERTY, ETC.
12.1. Utility Charges...................................................................................................20
12.2. Possession and Use of the Property................................................................................20
12.3. Compliance with Requirements of Law and Insurance Requirements....................................................20
12.4. Assignment by Lessee..............................................................................................20
12.5. Acceptance; Offset................................................................................................20
ARTICLE XIII
MAINTENANCE AND REPAIR; RETURN
13.1. Maintenance and Repair; Return....................................................................................21
ARTICLE XIV
MODIFICATIONS, ETC.
14.1. Modifications, Substitutions and Replacements.....................................................................21
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TABLE OF CONTENTS
(continued)
Section Page
------- ----
ARTICLE XV
WARRANT OF TITLE; EASEMENTS
15.1. Warrant of Title..................................................................................................22
15.2. Grants and Releases of Easements; Lessor's Waivers................................................................23
ARTICLE XVI
PERMITTED CONTESTS
16.1. Permitted Contests in Respect of Applicable Law...................................................................24
ARTICLE XVII
INSURANCE
17.1. Public Liability and Workers' Compensation Insurance..............................................................25
17.2. Hazard and Other Insurance........................................................................................25
17.3. Insurance Coverage................................................................................................26
ARTICLE XVIII
CASUALTY AND CONDEMNATION;
ENVIRONMENTAL MATTERS
18.1. Casualty and Condemnation.........................................................................................27
18.2. Environmental Matters.............................................................................................29
18.3. Notice of Environmental Matters...................................................................................29
ARTICLE XIX
TERMINATION OF LEASE
19.1. Mandatory Termination upon Certain Events.........................................................................29
19.2. Termination Procedures............................................................................................30
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TABLE OF CONTENTS
(continued)
Section Page
------- ----
ARTICLE XX
EVENTS OF DEFAULT
20.1. Events of Default.................................................................................................31
20.2. Remedies..........................................................................................................33
20.3. Waiver of Certain Rights..........................................................................................36
20.4. Excess Proceeds; Return of Property...............................................................................36
20.5. Lessee's Purchase Option During Event of Default..................................................................37
ARTICLE XXI
TRANSFERS OF LESSOR'S INTERESTS
21.1. Assignments.......................................................................................................37
21.2. Participations....................................................................................................38
ARTICLE XXII
PURCHASE PROVISIONS
22.1. Purchase Option...................................................................................................38
ARTICLE XXIII
RENEWAL OPTIONS
23.1. Renewal Options...................................................................................................39
ARTICLE XXIV
REMARKETING OPTION
24.1. Option to Remarket................................................................................................39
24.2. Certain Obligations Continue......................................................................................43
ARTICLE XXV
PROCEDURES RELATING TO PURCHASE OR XXXXXXXXXXX
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TABLE OF CONTENTS
(continued)
Section Page
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25.1. Provisions Relating to the Exercise of Purchase Option and Conveyance Upon Remarketing and
Conveyance Upon Certain Other Events..............................................................................43
ARTICLE XXVI
INDEMNIFICATION
26.1. General Indemnification...........................................................................................44
26.2. End of Term Indemnity.............................................................................................46
26.3. Environmental Indemnity...........................................................................................47
26.4. Proceedings in Respect of Claims..................................................................................49
26.5. General Tax Indemnity.............................................................................................51
(a) Indemnification...................................................................................51
(b) Contests..........................................................................................51
(c) Reimbursement for Tax Savings.....................................................................53
(d) Payments..........................................................................................54
(e) Reports...........................................................................................54
(f) Verification......................................................................................55
(g) Tax Ownership.....................................................................................55
26.6. Funding Losses....................................................................................................56
26.7. Regulation D Compensation.........................................................................................56
26.8. Deposits Unavailable..............................................................................................57
26.9. Illegality........................................................................................................57
26.10. Increased Cost and Reduced Return.................................................................................58
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1. Estoppel Certificates.............................................................................................60
ARTICLE XXVIII
ACCEPTANCE OF SURRENDER
28.1. Acceptance of Surrender...........................................................................................60
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TABLE OF CONTENTS
(continued)
Section Page
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ARTICLE XXIX
NO MERGER OF TITLE
29.1. No Merger of Title................................................................................................60
ARTICLE XXX
INTENT OF THE PARTIES
30.1. Ownership of the Property.........................................................................................61
30.2. Grant of Lien and Power of Sale...................................................................................62
ARTICLE XXXI
PAYMENT OF CERTAIN EXPENSES
31.1. Transaction Expenses..............................................................................................63
31.2. Brokers' Fees and Stamp Taxes.....................................................................................63
ARTICLE XXXII
OTHER COVENANTS AND AGREEMENTS OF LESSEE
32.1. Covenants.........................................................................................................63
(a) Information........................................................................................63
(b) Delivery of Lease Supplement.......................................................................64
(c) Merger, Consolidation..............................................................................64
(d) Further Assurances.................................................................................65
(e) Preservation of Existence, Etc.....................................................................65
ARTICLE XXXIII
MISCELLANEOUS
33.1. Survival; Severability; Etc.......................................................................................65
33.2. Amendments and Modifications......................................................................................66
33.3. No Waiver.........................................................................................................66
33.4. Notices...........................................................................................................66
33.5. Successors and Assigns............................................................................................66
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TABLE OF CONTENTS
(continued)
Section Page
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33.6. Headings and Table of Contents....................................................................................66
33.7. Counterparts......................................................................................................66
33.8. GOVERNING LAW.....................................................................................................66
33.9. Original Lease....................................................................................................67
33.10. Waiver of Jury Trial.............................................................................................67
33.11. Submission to Jurisdiction.......................................................................................67
33.12. Further Assurances...............................................................................................67
Schedules
---------
SCHEDULE I Notice Information
Annexes
-------
ANNEX 1 Description of Land
Exhibits
--------
EXHIBIT A Funding Request
EXHIBIT B Memorandum of Lease
EXHIBIT C Construction Agency Agreement
EXHIBIT D Lease Supplement
EXHIBIT E Responsible Employee's Certificate
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APPENDIX 1
to
Lease and Security Agreement
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear contrary intention
appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
the Operative Documents, and reference to a Person in a particular capacity
excludes such Person in any other capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative Document),
document or instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms of the other Operative Documents and reference to
any promissory note includes any promissory note which is an extension or
renewal thereof or a substitute or replacement therefor;
(v) reference to any Applicable Law means such Applicable Law as
amended, modified, codified, replaced or reenacted, in whole or in part, and in
effect from time to time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any Applicable Law means that
provision of such Applicable Law from time to time in effect and constituting
the substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) reference in any Operative Document to any Article, Section,
Appendix, Schedule or Exhibit means such Article or Section thereof or Appendix,
Schedule or Exhibit thereto;
89
(vii) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term; and
(ix) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding".
B. Accounting Terms. In each Operative Document, unless expressly
otherwise provided, accounting terms shall be construed and interpreted, and
accounting determinations and computations shall be made, in accordance with
GAAP.
C. Conflict in Operative Documents. If there is any conflict between
any Operative Documents, such Operative Document shall be interpreted and
construed, if possible, so as to avoid or minimize such conflict but, to the
extent (and only to the extent) of such conflict, the Lease shall prevail and
control.
D. Legal Representation of the Parties. The Operative Documents were
negotiated by the parties with the benefit of legal representation and any rule
of construction or interpretation otherwise requiring the Operative Document to
be construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
E. Defined Terms. Unless a clear contrary intention appears, terms
defined herein have the respective indicated meanings when used in each
Operative Document.
"Advance" means an advance of funds by the Lessor pursuant to Article
III of the Lease.
"Affiliate" means, when used with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or under direct or
indirect common control with such Person.
"After Tax Basis" means, with respect to any payment to be received,
the amount of such payment increased so that, after deduction of the amount of
all Taxes required to be paid currently by the recipient (less any Tax savings
realized currently and the present value (determined using a discount rate equal
to the Applicable Federal Rate (as defined in Section 1275(d) of the Code)) of
any Tax savings projected to be realized by the recipient as a result of the
payment of the indemnified amount) with respect to the receipt by the recipient
of such amounts, such increased payment (as so reduced) is equal to the payment
otherwise required to be made.
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90
"Alternate Base Rate" means, for any period, an interest rate per annum
equal to the sum of (i) the Federal Funds Effective Rate most recently
determined by the Lessor plus .50% and (ii) the Applicable Margin. If the
aforesaid rate changes from time to time after the date of the Lease, the
Alternate Base Rate shall be automatically increased or decreased, if
appropriate and as the case may be, without notice to the Lessee as of the
effective time of each change.
"Applicable Law" means all existing and future applicable laws, rules,
regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and binding
interpretations by, any Governmental Authority, and applicable judgments,
decrees, injunctions, writs, orders or like action of any court, arbitrator or
other administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction (including those pertaining to health, safety or the environment
(including, without limitation, wetlands) and those pertaining to the
construction, use or occupancy of the Property) and any restrictive covenant or
deed restriction or easement of record affecting the Property.
"Applicable Margin" means, at any time, 2% per annum or the rate
determined pursuant to Section 33.12(b) of the Lease.
"Appraisal" means an appraisal, prepared by a reputable appraiser
selected by the Lessor, of the Property as if improved in accordance with the
Plans and Specifications, which in the judgment of counsel to the Lessor,
complies with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant thereto, and all other applicable Requirements of Law and, in
the case of the Appraisal delivered on or prior to the Closing Date, will
appraise the Fair Market Sales Value of the Property as built in accordance with
the Plans and Specifications as of the Base Date and as of the Expiration Date.
"Appurtenant Rights" means (i) all agreements, easements, rights of way
or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to the Land or the Improvements, including, without limitation, the use of any
streets, ways, alleys, vaults or strips of land adjoining, abutting, adjacent or
contiguous to the Land and (ii) all permits, licenses and rights, whether or not
of record, appurtenant to the Land.
"Architect" means the architect acting in such capacity with respect to
the Property. Any requirement in any Operative Document that a certificate of
the Architect be delivered shall be satisfied by delivery of certificate(s) from
the foregoing so long as such certificates collectively satisfy the requirements
set forth in such Operative Documents.
"Available Commitment" means, at any time, an amount equal to the
excess, if any, of (a) the amount of the Commitment over (b) the aggregate
original principal amount of all Advances.
"Base Date" is defined in Section 2.3 of the Lease.
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91
"Base Term" is defined in Section 2.3 of the Lease.
"Basic Rent" means, as to any Payment Date, the sum which results from
adding all the amounts obtained by dividing (I) the product of (a) the Lease
Balance outstanding on each day during the period of time which has elapsed
since the immediately preceding Payment Date and (b) the Lease Rate for such day
by (II) 360; provided, however, that with respect to the first Basic Rent
payment, the Lease Rate shall be calculated for the number of days then elapsed
since the Funding Date therefor; provided, further, however, that for any day on
which Basic Rent is to be determined by reference to the Alternate Base Rate or
outstanding Advances are to bear interest at the Alternate Base Rate, "Lease
Rate" shall be replaced by "Alternate Base Rate" and "360" shall be replaced by
"365" in the foregoing calculation.
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Break Costs" means an amount equal to the amount, if any, required to
compensate the Lessor or an Affiliate of the Lessor from which the Lessor
obtained the funds necessary to make the Advances, for any losses or costs
(including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or funds acquired by the Lessor to
fund its obligations hereunder and reasonable internal charges) it or such
Affiliate incurs as a result of (w) the Lessee's payment of Rent or Lease
Balance other than on a Payment Date, (x) any Advance not being made on the date
specified therefor in the applicable Funding Request (other than as a result of
a breach by the Lessor of its obligation under Section 3.1 of the Lease to make
an Advance), (y) as a result of any conversion of the Eurodollar Rate in
accordance with Section 26.8 or 26.9 of the Lease, or (z) the payment of the
Lease Balance on any day other than the Expiration Date. A statement as to the
amount of such loss, cost or expense, prepared in good faith and in reasonable
detail and submitted by the Lessor to the Lessee, shall be conclusive and
binding for all purposes absent manifest error.
"Business Day" means each day which is not a day on which banks in New
York, New York or Boston, Massachusetts are generally authorized or obligated,
by law or executive order, to close and, in the context of determining a
Eurodollar Rate, which is also a day on which dealings in Dollars are carried on
in the London interbank eurodollar market.
"Capitalized Interest" means, as of any date, an amount equal to the
Lease Rate multiplied by the Lease Balance on such date, calculated for the
number of days then elapsed since the last Payment Date over a year of 360 days.
"Capitalized Interest Advance" is defined in Section 3.3 of the Lease.
"Casualty" means any damage or destruction of all or any portion of the
Property as a result of a fire or other casualty.
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92
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. xx.xx. 9601 et seq., as amended from time
to time, or any successor statute.
"Certifying Party" is defined in Section 27.1 of the Lease.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including, without limitation, reasonable legal fees and expenses) of
any nature whatsoever.
"Closing Date" is defined in Section 4.2 of the Lease.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute thereto.
"Commitment" means the obligation of the Lessor to make Advances to the
Lessee in an aggregate principal amount not to exceed the amount set forth
opposite the Lessor's name on its signature page to the Lease.
"Commitment Period" means the period from and including the Closing
Date to but not including the date occurring on the earlier of (x) the date of
Completion and (y) the date corresponding to fifteen (15) months after the
Closing Date or (i) such earlier date on which the Commitment shall terminate as
provided in the Operative Documents, or (ii) such later date to which Completion
may be extended on account of a Force Majeure Event, but in no event beyond the
Outside Completion Date.
"Completion" means such time as the conditions set forth in Article V
of the Lease are satisfied.
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement rights
or title to the Property or any part thereof, wholly or partially (temporarily
or permanently), by or on account of any actual or threatened eminent domain
proceeding or other taking of action by any Person having the power of eminent
domain, including an action by a Governmental Authority to change the grade of,
or widen the streets adjacent to, the Property or alter the pedestrian or
vehicular traffic flow to the Property so as to result in change in access to
such Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, occupancy or
title vests in the condemning authority.
"Construction" means the construction and installation of all
Improvements contemplated by the Plans and Specifications.
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93
"Construction Agency Agreement" means the Construction Agency
Agreement, dated as of the Documentation Date, between the Lessor and the
Construction Agent.
"Construction Agency Event of Default" means a "Construction Agency
Event of Default" as defined in Section 5.1 of the Construction Agency
Agreement.
"Construction Agent" means the Lessee, as construction agent under the
Construction Agency Agreement.
"Construction Documents" is defined in Section 2.4 of the Construction
Agency Agreement.
"Construction Documents Assignment" means the Construction Documents
Assignment dated as of the Documentation Date executed and delivered by the
Construction Agent.
"Construction Period" means the period commencing on the Closing Date
and ending on the Base Date.
"Contingent Rental Adjustment" means the maximum amount (calculated as
a percentage of the Fair Market Value of the Property as set forth in the
Appraisal) that when present valued with the minimum Basic Rent payments
relating to the Property to be made during the applicable Term permits the Lease
of such Improvements to be characterized as an "operating lease" in accordance
with the Statement of Financial Accounting Standards No. 13 as in effect on the
Closing Date.
"Control" means (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, the possession directly or indirectly, of the power to direct or cause
the direction of the management policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"Deed" means a [grant] [quitclaim] deed with respect to the real
property comprising the Land, in conformity with Applicable Law and appropriate
for recording with the applicable Governmental Authorities, conveying fee simple
title to such real property to the Lessor, subject only to Permitted Liens and
otherwise in form and substance satisfactory to the Lessor.
"Default" means any event or condition which, with the lapse of time or
the giving of notice, or both, would constitute an Event of Default.
"Documentation Date" is defined in Section 4.1.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"End of the Term Report" is defined in Section 26.2(a) of the Lease.
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"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of the Property.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions or causes of action, suits, obligations, liabilities, losses,
proceedings, executory decrees, judgments, penalties, fees, demands, demand
letters, orders, directives, claims (including without limitation any claims
involving liability in tort, strict, absolute or otherwise), liens, notices of
noncompliance or violation, or legal fees, costs of investigations or
proceedings, relating in any way to any Environmental Law or any Governmental
Action issued under any such Environmental Law, or arising from the presence or
release (or alleged presence or release) into the environment of any Hazardous
Substance including, without limitation, and regardless of the merit of such
claim, any and all such claims by any Governmental Authority or by any third
party for enforcement, cleanup, removal, response, remedial or other actions for
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.
"Environmental Law" means, whenever enacted or promulgated, any
applicable Federal, state, county or local law, statute, ordinance, rule,
regulation, license, permit, authorization, approval, covenant, criteria,
guideline, administrative or court order, judgment, decree, injunction, code or
requirement or any agreement with a Governmental Authority:
(x) relating to pollution (or the cleanup, removal,
remediation or encapsulation thereof, or any other response thereto),
or the regulation or protection of human health, safety or the
environment, including air, water, vapor, surface water, groundwater,
drinking water, land (including surface or subsurface), plant, aquatic
and animal life, or
(y) concerning exposure to, or the use, containment, storage,
recycling, treatment, generation, discharge, emission, Release or
threatened Release, transportation, processing, handling, labeling,
containment, production, disposal or remediation of any Hazardous
Substance, Hazardous Condition or Hazardous Activity.
in each case as amended and as now or hereafter in effect, and any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries (whether personal or property) or
damages due to or threatened as a result of the presence of, exposure to, or
ingestion of, any Hazardous Substance, whether such common law or equitable
doctrine is now or hereafter recognized or developed. Environmental Laws
include, but are not limited to, CERCLA; the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. ss. 6901 et seq.; the Federal Water Pollution Control
Act, 33 U.S.C. ss. 1251 et seq.; the Clean Air Act, 42 U.S.C. xx.xx. 7401 et
seq.; the National Environmental Policy Act, 42 U.S.C. ss. 4321; the Refuse Act,
33 U.S.C. xx.xx. 401 et seq.; the Hazardous Materials Transportation Act of
1975, 49 U.S.C. xx.xx. 1801-1812; the Toxic Substances Control Act, 15 U.S.C.
xx.xx. 2601 et seq.; the Federal
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Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. xx.xx. 136 et seq.; the
Safe Drinking Water Act, 42 U.S.C. xx.xx. 300f et seq., each as amended and as
now or hereafter in effect, and their state and local counterparts or
equivalents, including any regulations promulgated thereunder.
"Environmental Violation" means any activity, occurrence or condition
that violates or results in non-compliance with any Environmental Law in any
material respect.
"Equipment" means equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired by the Lessee using the proceeds of Advances and now or
subsequently attached to, contained in or used or usable in any way in
connection with any operation or letting of a Property, including but without
limiting the generality of the foregoing, all screens, awnings, shades, blinds,
curtains, draperies, artwork, carpets, rugs, storm doors and windows, shelving,
furniture and furnishings, heating, electrical, and mechanical equipment,
lighting, switchboards, plumbing, ventilation, air conditioning and air-cooling
apparatus, refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry equipment,
cleaning systems (including window cleaning apparatus), telephones,
communication systems (including satellite dishes and antennae), televisions,
computers, sprinkler systems and other fire prevention and extinguishing
apparatus and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind and
description.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time or any successor Federal statute.
"Eurocurrency Reserve Requirements" means, for any day as applied to a
payment of Rent, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Rate" means the rate which shall remain in effect during
the applicable Interest Period, subject to Section 26.8 of the Lease, at which
deposits in Dollars appear with respect to a one (1) month period (or a shorter
period with respect to the first Interest Period) on the Telerate Page 3750 (or
any successor page), in each case as of 11:00 a.m. (London time) two Business
Days prior to the beginning of such Interest Period, or if such rate is not
available, then the average (rounded upward, if necessary, to the nearest
multiple of one-sixteenth of one percent) of the rates offered for Dollar
deposits to the prime banks by leading banks in the London interbank market at
or about 11:00 a.m. (London time) two Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market for delivery on the
first day of such Interest Period for a one (1) month period in an amount
comparable to the amount of the Advances to be outstanding during such Interest
Period.
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"Event of Default" means a Lease Event of Default or a Construction
Agency Event of Default.
"Excess Proceeds" means the excess, if any, of the aggregate of (i) all
awards, compensation or insurance proceeds payable in connection with a Casualty
or Condemnation over the sum of the Lease Balance paid by the Lessee pursuant to
Articles XVIII and XIX of the Lease with respect to such Casualty or
Condemnation and (ii) all proceeds received by the Lessor in connection with any
sale of the Property pursuant to the Lessor's exercise of remedies under Section
20.2 of the Lease or the Lessee's exercise of the Remarketing Option under
Article XXIV of the Lease.
"Expiration Date" means, unless the Lease shall have been earlier
terminated in accordance with the provisions of the Lease or the other Operative
Documents, the date five (5) years from the Base Date or the last day of any
Renewal Period then in effect, provided under no circumstances shall the
Expiration Date extend beyond the date that is the seventh anniversary of the
Base Date.
"Fair Market Sales Value" means the amounts, which in any event shall
not be less than zero, that would be paid in cash in an arm's-length transaction
between an informed and willing purchaser and an informed and willing seller,
neither of whom is under any compulsion to purchase or sell, respectively, for
the ownership of all of the Property. The Fair Market Sales Value of the
Property shall be determined based on the assumption that, except for purposes
of Article XX and Section 26.2 of the Lease, the Property is in the condition
and state of repair required under Section 13.1 of the Lease and the Lessee is
in compliance with the other requirements of the Operative Documents.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of quotations for such day on such transaction received by the
Lessor from three Federal funds brokers of recognized standing selected by it.
"Fixtures" means all fixtures relating to the Improvements, including
all components thereof, located in or on the Improvements, together with all
replacements, modifications, alterations and additions thereto, excepting
however any and all trade fixtures and equipment (other than Equipment)
belonging to the Lessee or any Person other than the Lessor, regardless of
whether or not attached or affixed to the Improvements.
"Fee Letter" means that certain fee letter dated as of the
Documentation Date between the Lessor and the Lessee.
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"Force Majeure Event" means any event beyond the control of the Lessee
and the Construction Agent, including, but not limited to a non-performance by
any Person other than Construction Agent under any Construction Documents so
long as Construction Agent is diligently pursuing the enforcement of rights
under such Construction Documents and/or seeking alternate means of performance,
a Casualty, a Condemnation, strikes, lockouts, adverse soil conditions, acts of
God, adverse weather conditions, inability to obtain labor or materials,
government activities (including delays or unavailability of Governmental
Action), civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition or
failure to pay or any event, cause or condition which could have been avoided by
the Lessee or which could be remedied by the Lessee through the exercise of
commercially reasonable efforts or the commercially reasonable expenditure of
funds.
"Foreign Transferee" is defined in Section 21.1 of the Lease.
"Funding Date" is defined in Section 3.2(a) of the Lease.
"Funding Office" means the office of the Lessor identified on its
signature page to the Lease as its Funding Office.
"Funding Request" is defined in Section 3.2(a) of the Lease.
"GAAP" means United States generally accepted accounting principles
(including principles of consolidation), in effect from time to time.
"Governmental Action" means all permits, authorizations, registrations,
consents, approvals, waivers, exceptions, variances, orders, judgments, written
interpretations, decrees, licenses, exemptions, publications, filings, notices
to and declarations of or with, or required by, any Governmental Authority, or
required by any Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are required for the use
pursuant to the Lease, occupancy, zoning and operation of the Property.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Gross Proceeds" is defined in Section 24.1(k) of the Lease.
"Hazardous Activity" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the Release of any Hazardous Substance into the environment (including air,
water vapor, surface water, groundwater, drinking water, land (including surface
or subsurface), plant, aquatic and animal life); (iii) involves the containment
or storage of any
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Hazardous Substance; or (iv) would be regulated as hazardous waste treatment,
storage or disposal within the meaning of any Environmental Law.
"Hazardous Condition" means any condition that violates or threatens to
violate (except such violation which is not material), or that results in or
threatens noncompliance with, any Environmental Law (except such noncompliance
which is not material).
"Hazardous Substance" means any of the following: (i) any petroleum or
petroleum product, explosives, regulated radioactive materials, friable
asbestos, ureaformaldehyde, polychlorinated biphenyls in regulated
concentrations, lead and radon gas; (ii) any substance, material, product,
derivative, compound or mixture, mineral, chemical, waste, gas, medical waste,
or pollutant, in each case whether naturally occurring, man-made or the
by-product of any process, that is toxic, harmful or hazardous to the
environment or human health or safety, as defined under any Environmental Law;
or (iii) any substance, material, product, derivative, compound or mixture,
mineral, chemical, waste, gas, medical waste or pollutant that would support the
assertion of any claim under any Environmental Law, whether or not defined as
hazardous as such under any Environmental Law.
"Impositions" means any and all liabilities, losses, expenses and costs
of any kind whatsoever for fees, taxes, levies, imposts, duties, charges,
assessments or withholdings of any nature whatsoever and all interest, additions
to tax and penalties thereon ("Taxes") (including, without limitation,
(i) real and personal property taxes, including personal
property taxes on any property covered by the Lease that is classified
by Governmental Authorities as personal property, and real estate or ad
valorem taxes in the nature of property taxes;
(ii) sales taxes, use taxes and other similar taxes (including
rent taxes and intangibles taxes);
(iii) any excise taxes;
(iv) real estate transfer taxes, conveyance taxes, mortgage
taxes, intangible taxes, stamp taxes and documentary recording taxes
and fees;
(v) taxes that are or are in the nature of franchise, income,
value added, gross receipts, privilege and doing business taxes,
license and registration fees; and
(vi) assessments on the Property, including all assessments
for public improvements or benefits, whether or not such improvements
are commenced or completed within the Term);
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relating to or arising from or in connection with the Property or the
transactions contemplated by the Operative Documents, which at any time may be
levied, assessed or imposed by any Federal, state or local authority upon or
with respect to
(a) any Tax Indemnitee, the Property or any part thereof or
interest therein, or the Lessee or any sublessee or user of the
Property;
(b) the financing, refinancing, demolition, construction,
substitution, subleasing, assignment, control, condition, occupancy,
servicing, maintenance, repair, ownership, possession, purchase,
rental, lease, activity conducted on, delivery, insuring, use,
operation, improvement, transfer, return or other disposition of such
Property or any part thereof or interest therein;
(c) other indebtedness with respect to the Property or any
part thereof or interest therein or transfer thereof;
(d) the rentals, receipts or earnings arising from the
Property or any part thereof or interest therein;
(e) the Operative Documents or any payment made or accrued
pursuant thereto;
(f) the income or other proceeds received with respect to the
Property or any part thereof or interest therein upon the sale or
disposition thereof;
(g) any contract (including the Construction Agency Agreement)
relating to the construction, acquisition or delivery of the
Improvements or any part thereof or interest therein; or
(h) otherwise in connection with the transactions contemplated
by the Operative Documents.
Notwithstanding anything in the first paragraph of this definition (except as
provided in the final paragraph of this definition) the term "Imposition" shall
not mean or include:
(i) any Taxes or impositions (other than Taxes that are, or
are in the nature of, sales, use, rental, transfer or property taxes)
that are imposed by any Governmental Authority and that are based upon
or measured by the gross or net income or gross or net receipts
(including any minimum taxes, withholding taxes or taxes on, measured
by or in the nature of capital, net worth, excess profits, items of tax
preference, capital stock, franchise, business privilege or doing
business taxes); provided that this clause (i) shall not be interpreted
to prevent a payment from being made on an After Tax Basis if such
payment is otherwise required to be so made;
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(ii) any Tax or imposition to the extent, but only to such
extent, it relates to any act, event or omission that occurs, or
relates to a period, after the expiration or earlier termination of the
Lease (but not any Tax that relates to any period prior to the
expiration or earlier termination of the Lease with respect to the
Property to which such Tax relates unless such Tax would otherwise be
the subject of one of the exclusions described in clauses (i) through
(xix) hereof);
(iii) any Tax or imposition for so long as, but only for so
long as, it is being contested in accordance with the provisions of
Section 26.5(b) of the Lease, provided that the foregoing shall not
limit the Lessee's obligation under Section 26.5(b) of the Lease to
advance to such Tax Indemnitee amounts with respect to Taxes that are
being contested in accordance with Section 26.5(b) of the Lease (if
required to be paid to the applicable Governmental Authority
notwithstanding the pendency of such contest) or any expenses incurred
by such Tax Indemnitee in connection with such contest;
(iv) any interest or penalties imposed on a Tax Indemnitee as
a result of a breach by such Tax Indemnitee of its obligations under
Section 26.5(e) of the Lease or otherwise as a result of a Tax
Indemnitee's failure to file any return or other documents timely and
as prescribed by applicable law; provided that this clause (iv) shall
not apply (x) if such interest or penalties arise as a result of a
position taken (or requested to be taken) by the Lessee in a contest
controlled by the Lessee under Section 26.5(b) of the Lease or (y) if
such failure is attributable to a failure by the Lessee to fulfill its
obligations under the Lease with respect to any such return;
(v) any Taxes or impositions imposed upon a Tax Indemnitee
with respect to any voluntary transfer, sale, financing or other
voluntary disposition of any interest in the Property or any part
thereof, or any interest therein or any interest or obligation under
the Operative Documents, or from any sale, assignment, transfer or
other disposition of any interest in a Tax Indemnitee or any Affiliate
thereof, (other than any transfer in connection with (1) the exercise
by the Lessee of its Purchase Option or any termination option or other
purchase of the Property by the Lessee, (2) the occurrence of an Event
of Default, (3) a Casualty or Condemnation affecting the Property, or
(4) any sublease, modification or addition to the Property by the
Lessee);
(vi) any Taxes or impositions imposed on a Tax Indemnitee, to
the extent such Tax Indemnitee actually receives a credit (or otherwise
has a reduction in a liability for Taxes) in respect thereof against
Taxes that are not indemnified under the Lease (but only to the extent
such credit is not taken into account in calculating the indemnity
payment on an After Tax Basis);
(vii) any Taxes imposed on or with respect to or payable by
any Tax Indemnitee based on, measured by or imposed with respect to any
fees received by such Tax Indemnitee;
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(viii) any Taxes imposed against or payable by a Tax
Indemnitee resulting from, or that would not have been imposed but for,
the gross negligence or willful misconduct of such Tax Indemnitee;
(ix) any Taxes imposed on or payable by a Tax Indemnitee to
the extent such Taxes would not have been imposed but for a breach by
the Tax Indemnitee or any Affiliate thereof of any representations,
warranties or covenants set forth in the Operative Documents (unless
such breach is caused by the Lessee's breach of its representations,
warranties or covenants set forth in the Operative Documents);
(x) any Taxes to the extent resulting from such Tax
Indemnitee's failure to comply with the provisions of Section 26.5(b)
of the Lease, which failure precludes or adversely affects the ability
to conduct a contest pursuant to Section 26.5(b) of the Lease (unless
such failure is caused by the Lessee's breach of its obligations);
(xi) any Taxes which are included in Property Improvements
Cost or Land Acquisition Cost if and to the extent actually paid;
(xii) any Taxes that would have been imposed in the absence of
the transactions contemplated by the Operative Documents;
(xiii) any Taxes imposed on or with respect to or payable as a
result of activities of a Tax Indemnitee or Affiliate thereof unrelated
to the transactions contemplated by the Operative Documents;
(xiv) any Taxes imposed on or with respect to or payable by a
Tax Indemnitee resulting from, or that would not have been imposed but
for the existence of, any Lessor Lien;
(xv) any Tax imposed against or payable by a Tax Indemnitee to
the extent that the amount of such Tax exceeds the amount of such Tax
that would have been imposed against or payable by the original Tax
Indemnitee (or, if less, that would have been subject to
indemnification under Section 26.5 of the Lease) if the transactions
pursuant to which such Tax Indemnitee became a direct or indirect
successor, transferee or assign of the applicable original Tax
Indemnitee had never occurred; provided, however, that this exclusion
(xiv) shall not apply if such direct or indirect successor, transferee
or assign acquired its interest as a result of a transfer while an
Event of Default shall have occurred and is continuing;
(xvi) any Taxes imposed on or with respect to or payable by a
Tax Indemnitee that would not have been imposed but for an amendment,
supplement, modification, consent or waiver to any Operative Document
not initiated, requested or consented to by the Lessee unless such
amendment, supplement, modification, consent or waiver (A)
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arises due to, or in connection with there having occurred, an Event of
Default or (B) is required by the terms of the Operative Documents or
is executed in connection with any amendment to the Operative Documents
required by law and unless, in the case of a Tax Indemnitee that is a
direct or indirect successor, transferee or assign of the original Tax
Indemnitee, such Taxes would have been imposed on or with respect to or
payable by the original Tax Indemnitee if the transaction(s) pursuant
to which such Tax Indemnitee became a direct or indirect successor,
transferee or assign of the original Tax Indemnitee had never occurred;
(xvii) any Taxes in the nature of intangibles, stamp,
documentary or similar Taxes;
(xviii) any Taxes imposed on or with respect to or payable by
a Tax Indemnitee or any Affiliate because such Tax Indemnitee or any
Affiliate thereof is not a United States person within the meaning of
Section 7701(a)(30) of the Code; and
(xix) any tax imposed by its express terms in lieu of or in
substitution for a Tax not subject to indemnity pursuant to the
provisions of Section 26.5 of the Lease.
Notwithstanding the foregoing, the exclusions from the definition of Impositions
set forth in clauses (i), (ii), (v), (vii), (xvii) and (xix) (solely as applied
to clause (xix), to the extent that any such tax is imposed by its express terms
in lieu of or in substitution for a Tax set forth in clauses (i), (ii), (v),
(vii), and (xvii)) above shall not apply (but the other exclusions shall apply)
to any Taxes or any increase in Taxes imposed on a Tax Indemnitee net of any
decrease in Taxes realized by such Tax Indemnitee, to the extent that such Taxes
or Tax increase or decrease would not have occurred if on each Funding Date the
Lessor had advanced funds to the Lessee in the form of a loan secured by the
Property in an amount equal to the amount of the Advance funded on such Funding
Date, with debt service for such loan equal to the Basic Rent payable on each
Payment Date and a principal balance at the maturity of such loan in an amount
equal to the then outstanding amount of the Advances at the end of the term of
the Lease.
"Improvements" means all buildings, structures, Fixtures, Equipment,
and other improvements of every kind existing at any time and from time to time
(including those constructed pursuant to the Construction Agency Agreement and
those purchased with amounts advanced by the Lessor pursuant to the Lease) on or
under the Land, together with any and all appurtenances to such buildings,
structures or improvements, including sidewalks, utility pipes, conduits and
lines, parking areas and roadways, and including all Modifications and other
additions to or changes in the Improvements at any time.
"Indemnitee" means the Lessor, its successors, assigns, directors,
shareholders, partners, officers, employees and agents.
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"Initial Lease Balance" means the Initial Lease Balance set forth on
the Lease Supplement.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Interest Period" means:
(a) prior to the Base Date:
(i) initially, the period commencing on the Funding Date with
respect to any Advance and ending on the 1st calendar day of the next
succeeding month (or, if such day is not a Business Day, the next
Business Day thereafter); and
(ii) thereafter, each period commencing the day after the last
Business Day of the next preceding Interest Period and ending one month
thereafter; and
(b) after the Base Date:
(i) each period commencing the day after the last Business Day
of the immediately preceding Interest Period and ending one (1) month
thereafter;
provided that, the foregoing provisions relating to Interest Periods are subject
to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day; and
(ii) any Interest Period that would otherwise extend beyond
the Expiration Date shall end on the Expiration Date.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Land" means, the parcel of real property described on Annex 1 to the
Lease and all Appurtenant Rights attached thereto.
"Land Acquisition Cost" means the amount of an Advance funded to the
Lessee or the Construction Agent for the purpose of acquiring that portion of
the Property constituting Land
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and paying Transaction Expenses relating to such funding and acquisition, as
such amount is set forth in the Funding Request relating to the acquisition of
the Property.
"Lease" means the Lease and Security Agreement, dated as of the
Documentation Date, between the Lessor and the Lessee.
"Lease Balance" means, as of any date of determination, an amount equal
to (i) the sum of all Advances outstanding under the Lease (including, without
limitation, Capitalized Interest Advances) and all other amounts owing by the
Lessee under the Operative Documents (including, without limitation, accrued but
unpaid Supplemental Rent), less amounts paid pursuant to Sections 18.1(a) and
22.2, if any, or any other payment by the Lessee to the Lessor constituting a
repayment of any Advances.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" is defined in Section 20.1 of the Lease.
"Lease Rate" means, during any Interest Period, the rate per annum
equal to the sum of the Eurodollar Rate for such Interest Period plus the
Applicable Margin.
"Lease Supplement" means the Lease Supplement in the form of Exhibit D
to the Lease.
"Lessee" means Alternative Living Services Inc., prior to the Base
Date, as Construction Agent under the Construction Agency Agreement, and after
the Base Date, as lessee under the Lease, and its successors and assigns
expressly permitted under the Operative Documents.
"Lessor" means SELCO Service Corporation, as lessor under the Lease.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against the Lessor not resulting from
the transactions contemplated by the Operative Documents, (b) any act or
omission of the Lessor which is not required by the Operative Documents or is in
violation of any of the terms of the Operative Documents, (c) any claim against
the Lessor with respect to Taxes or Transaction Expenses against which Lessee is
not required to indemnify Lessor pursuant to the Lease or (d) any claim against
the Lessor arising out of any transfer by the Lessor of all or any portion of
the interest of the Lessor in the Property or the Operative Documents other than
the transfer of title to or possession of the Property by the Lessor pursuant to
and in accordance with the Lease or pursuant to the exercise of the remedies set
forth in Article XX of the Lease.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including, without
limitation, any irrevocable license, conditional sale or other title retention
agreement, any lease in the nature thereof, or any other
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right of or arrangement with any creditor to have its claim satisfied out of any
specified property or asset with the proceeds therefrom prior to the
satisfaction of the claims of the general creditors of the owner thereof,
whether or not filed or recorded, or the filing of, or agreement to execute as
"debtor", any financing or continuation statement under the Uniform Commercial
Code of any jurisdiction or any federal, state or local lien imposed pursuant to
any Environmental Law.
"Marketing Period" means the period commencing on the date six months
prior to the Expiration Date and ending on the Expiration Date.
"Memorandum of Lease" means the Memorandum of Lease and Lease
Supplement dated as of the Closing Date made by the Lessee in favor of the
Lessor and satisfactory in form and substance to the Lessor in order to create a
first priority mortgage lien on the Land and Improvements at any time located on
or under the Land, substantially in the form of Exhibit B to the Lease.
"Modifications" is defined in Section 14.1 of the Lease.
"Net Proceeds" means all amounts received in connection with any
Casualty or Condemnation or any sale of the Property pursuant to Lessor's
exercise of remedies under Section 20.2 of the Lease or the Lessee's exercise of
the Remarketing Option under Article XXIV of the Lease, and all interest earned
thereon, less the expense of claiming and collecting such amounts, including all
costs and expenses in connection therewith for which the Lessor is entitled to
be reimbursed pursuant to the Lease.
"Operative Documents" means the following:
(a) the Lease;
(b) the Deed;
(c) the Memorandum of Lease;
(d) the Construction Agency Agreement;
(e) the Construction Documents Assignment;
(f) the Pledge Agreement; and
(g) the Fee Letter
"Outside Completion Date" means the date occurring twelve (12) months
after the Closing Date, as such date may be extended from time to time by reason
of a Force Majeure Event; provided, however, that in no event shall the Outside
Completion Date occur later than the date occurring fifteen (15) months after
the Closing Date.
"Overdue Rate" means the lesser of (a) the highest interest rate
permitted by Applicable Law and (b) the Alternate Base Rate plus 5%.
"Participants" is defined in Section 21.2 of the Lease.
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"Payment Date" means the last day of any Interest Period and the
Expiration Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means with respect to the Property:
(i) the respective rights and interests of the parties to the
Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease;
(iii) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 16.1 of the
Lease;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
60 days past due or are being diligently contested in good faith by
appropriate proceedings, so long as such proceedings satisfy the
conditions for the continuation of proceedings set forth in Section
16.1 of the Lease;
(v) Liens of any of the types referred to in clause (iv) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor have
been made), which bonding (or arrangements) shall comply with
applicable Requirements of Law, and has effectively stayed any
execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest set forth in Section 16.1 of
the Lease;
(vii) easements, rights of way and other encumbrances on title
to real property pursuant to Section 15.2 of the Lease;
(viii) Lessor Liens;
(ix) Liens created by the Lessee with the consent of the
Lessor; and
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(x) Liens described on the title insurance policy delivered to
the Lessor pursuant to the Lease, other than Liens described in clause
(iv) or (vi) above.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
governmental authority or any other entity.
"Plans and Specifications" means the plans and specifications for the
Construction, as more particularly described in Schedule I to, and as may be
modified pursuant to, the Construction Agency Agreement.
"Pledge Agreement" means the Pledge Agreement dated as of the
Documentation Date between the Lessee and the Lessor.
"Prime Construction Contract" means the contract dated on or about the
Closing Date between the Construction Agent and the Prime Contractor, as it may
be amended from time to time in accordance with the Construction Agency
Agreement.
"Prime Contractor" means the Person who shall, with the prior consent
of the Lessor, have been designated by the Lessee to act as the general
contractor for purposes of the Construction.
"Property" means (i) the Land and (ii) all of the Improvements at any
time located on or under the Land.
"Property Cost" means the aggregate amount of the Land Acquisition Cost
and the Property Improvements Cost.
"Property Improvements Cost" means out-of pocket costs of the
Construction Agent incurred and properly payable under the Construction
Documents in accordance with the Operative Documents.
"Purchase Notice" is defined in Section 22.1 of the Lease.
"Purchase Option" is defined in Section 22.1 of the Lease.
"Purchase Option Price" is defined in Section 22.1 of the Lease.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
"Remarketing Option" is defined in Section 24.1 of the Lease.
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"Rent" means, collectively, Capitalized Interest, the Basic Rent and
the Supplemental Rent, in each case payable under the Lease.
"Requesting Party" is defined in Section 27.1 of the Lease.
"Required Modification" is defined in Section 14.1(a) of the Lease.
"Requirement of Law" means all Federal, state, county, municipal and
other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions affecting the Property, the Improvements or
the demolition, construction, use or alteration thereof, whether now or
hereafter enacted and in force, including any that require repairs,
modifications or alterations in or to the Property or in any way limit the use
and enjoyment thereof (including all building, zoning and fire codes and the
Americans with Disabilities Act of 1990, 42 U.S.C. ss. 1201 et seq. and any
other similar Federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including all Environmental Laws), and all permits, certificates of occupancy,
licenses, authorizations and regulations relating thereto, and all covenants,
agreements, restrictions and encumbrances contained in any instruments which are
either of record or known to the Lessee affecting the Property, the Appurtenant
Rights and any easements, licenses or other agreements entered into pursuant to
Section 15.2 of the Lease.
"Responsible Employee" means, with respect to the Lessee, its Chairman,
President, any of its corporate Vice Presidents, its corporate Controller, its
corporate Treasurer or others duly authorized by the Lessee to execute
documents.
"Responsible Employee's Certificate" means a certificate signed by any
Responsible Employee, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Secondary Financing" is defined in Section 33.12 of the Lease.
"Securities Act" means the Securities Act of 1933, as amended, together
with the rules and regulations promulgated thereunder.
"Seller" means the seller of the Land.
"Shortfall Amount" means, as of the Expiration Date, an amount equal to
(i) the Lease Balance, minus (ii) the Contingent Rental Adjustment received by
the Lessor from the Lessee pursuant to Section 24.1(i) of the Lease, minus (iii)
the aggregate amount of the highest, binding, written, unconditional,
irrevocable offer to purchase the Property obtained by the Lessee pursuant to
Section 24.1(f) of the Lease; provided, however, that if the sale of the
Property to the Person submitting such offer is not consummated on or prior to
the Expiration Date, then the term
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"Shortfall Amount" shall mean an amount equal to (i) the Lease Balance, minus
(ii) the Contingent Rental Adjustment received by the Lessor pursuant to Section
24.1(i) of the Lease.
"Significant Casualty" means a Casualty that in the reasonable, good
faith judgment of the Lessor with respect to which the Lessee shall have not
complied, or otherwise cannot comply, with the terms and conditions of Section
18.1(a)(i)(y).
"Significant Condemnation" means (a) a Condemnation that involves a
taking of Lessor's entire title to the Land, or (b) a Condemnation that in the
reasonable, good faith judgment of the Lessor either (i) renders the Property
unsuitable for continued use as property of the type of such Property
immediately prior to such Condemnation or (ii) is such that restoration of the
Property to substantially its condition as existed immediately prior to such
Condemnation would (x) be impracticable or impossible or (y) cost in excess of
the greater of $1,000,000 and an amount equal to ten (10%) percent of the Lease
Balance to effect.
"Submitted Financial Statements" means the financial statements of the
Lessee for the fiscal year ended September 30, 1998 which were audited by KPMG
Peat Marwick LLP, copies of which have been delivered to the Lessor.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of:
(a) the outstanding capital stock having Voting Power to elect
a majority of the Board of Directors of such corporation (irrespective
of whether at the time capital stock of any other class or classes of
such corporation shall or might having Voting Power upon the occurrence
of any contingency),
(b) the interest in the capital or profits of such partnership
or joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.
"Supplemental Rent" means all amounts, liabilities and obligations
(other than Capitalized Interest and Basic Rent) which Lessee assumes or agrees
to pay to Lessor or any other Person under the Lease or under any of the other
Operative Documents, including, without limitation, Break Costs.
"Tax Indemnitee" means the Lessor.
"Taxes" is defined in the definition of Impositions.
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"Term" means the period commencing on the Base Date and ending on the
Expiration Date.
"Termination Date" is defined in Sections 19.2 and 20.2(e) of the
Lease.
"Termination Notice" is defined in Section 19.1 of the Lease.
"Transaction Expenses" means all costs and expenses incurred in
connection with the preparation, execution and delivery of the Operative
Documents and the transactions contemplated by the Operative Documents including
without limitation:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel for each of the Lessor and the Lessee in
negotiating the terms of the Operative Documents and the other
transaction documents, including documents relating to the Secondary
Financing, preparing for the closing under, and rendering opinions in
connection with, such transactions and in rendering other services
customary for counsel representing parties to transactions of the types
involved in the transactions contemplated by the Operative Documents;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of any law firm or other external counsel, and all
disbursements of internal counsel of the Lessor in connection with (1)
any amendment, supplement, waiver or consent with respect to any
Operative Documents or the documents relating to the Secondary
Financing requested or approved by the Lessee and (2) any enforcement
of any rights or remedies against the Lessee in respect of the
Operative Documents;
(c) any other reasonable fees, out-of-pocket expenses,
disbursements or cost of the Lessor with respect to the Operative
Documents or the documents relating to the Secondary Financing or any
of the other transaction documents;
(d) any and all Taxes and fees incurred in recording,
registering or filing any Operative Document or the documents relating
to the Secondary Financing or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Documents or the documents relating to the Secondary Financing;
(e) any title fees, premiums and escrow costs, land and
topographical surveys, and other expenses relating to title insurance,
due diligence and investigation with respect to the Land, securing all
zoning, land use, permits and other Governmental Action with respect to
the acquisition and development of the Land or the Construction, and
the closings contemplated by the Transaction Documents or the documents
relating to the Secondary Financing; and
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(f) all expenses relating to all Environmental Audits.
"UCC Financing Statements" means UCC financing statements appropriately
completed and executed for filing in the applicable jurisdiction in order to
protect the Lessor's interest under the Lease to the extent the Lease is a
security agreement.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
"Voting Power" means, with respect to securities issued by any Person,
the combined voting power of all securities of such person which are issued and
outstanding at the time of determination and which are entitled to vote in the
election of directors of such Person, other than securities having such power
only by reason of the happening of a contingency.
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