Exhibit 4.8
Counterpart No. __
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LEASE AGREEMENT
dated as of
February 12, 2001
between
[NAME OF LESSOR LLC],
Lessor
and
AHOLD LEASE U.S.A., INC.,
Lessee
THIS LEASE AGREEMENT HAS BEEN ASSIGNED
AS SECURITY FOR INDEBTEDNESS OF LESSOR.
SEE SECTION 16.
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Leveraged Lease of [Supermarket/Warehouse/Office Building] located in
[Location of Leased Property]
Property Code:
TO THE EXTENT THAT THIS LEASE AGREEMENT 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 AGREEMENT MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL
COUNTERPART NO. 1 THAT CONTAINS THE RECEIPT THEREFOR EXECUTED BY INDENTURE
TRUSTEE ON OR FOLLOWING THE SIGNATURE PAGE THEREOF.
TABLE OF CONTENTS
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RECITALS ..............................................................................................1
ARTICLE 1 DEFINED TERMS.................................................................................1
Section 1.1 Defined Terms...............................................................................1
ARTICLE 2 NET LEASE; NO WARRANTIES......................................................................1
Section 2.1 Leased Property.............................................................................1
Section 2.2 Net Lease...................................................................................1
Section 2.3 Disclaimer of Warranties....................................................................4
ARTICLE 3 BASE LEASE TERM;
POSSESSION; RENEWAL TERMS.....................................................................5
Section 3.1 Base Lease Term.............................................................................5
Section 3.2 Fixed Rate Renewal Term.....................................................................5
Section 3.3 Fair Market Renewal Terms...................................................................5
Section 3.4 Conditions to Renewal Terms; Right to Extended Fixed Rate Renewal Terms.....................5
Section 3.5 Rent During Renewal Terms...................................................................6
Section 3.6 Stipulated Loss Value During Renewal Terms..................................................7
ARTICLE 4 [INTENTIONALLY OMITTED].......................................................................7
ARTICLE 5 ECONOMIC TERMINATION; SUBSTITUTION............................................................7
Section 5.1 Economic Termination........................................................................7
Section 5.2 Substitutions...............................................................................9
ARTICLE 6 BASIC RENT AND ADDITIONAL RENT...............................................................11
Section 6.1 Payment....................................................................................11
Section 6.2 Additional Rent............................................................................12
Section 6.3 Late Charge................................................................................12
Section 6.4 Manner of Payment of Rent and Additional Rent..............................................12
Section 6.5 Minimum Rental Amounts.....................................................................12
Section 6.6 Adjustments to Average Annual Basic Rent, Basic Rent, Stipulated Loss Value, etc...........13
Section 6.7 Stipulated Loss Values.....................................................................14
ARTICLE 7 INSURANCE....................................................................................14
(i)
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Section 7.1 Coverage...................................................................................14
Section 7.2 Policy Provisions..........................................................................16
Section 7.3 Certificates of Insurance; Performance by Lessor...........................................17
Section 7.4 General....................................................................................17
Section 7.5 Proceeds...................................................................................18
Section 7.6 Separate Insurance.........................................................................18
ARTICLE 8 USE; REQUIREMENTS OF APPLICABLE LAW..........................................................18
Section 8.1 Use..18
Section 8.2 Compliance with Applicable Law.............................................................18
Section 8.3 Environmental Covenants....................................................................19
Section 8.4 Contests...................................................................................21
Section 8.5 Records and Reports........................................................................22
Section 8.6 Compliance with Matters of Record and Leases...............................................22
ARTICLE 9 ASSIGNMENT AND SUBLETTING; EXISTING LEASES...................................................22
Section 9.1 [Intentionally Omitted]....................................................................22
Section 9.2 Subletting of Portions of the Leased Property Without Lessor's Consent.....................22
Section 9.3 Delivery of Non-disturbance Agreements by Lessor...........................................23
Section 9.4 Non-disturbance Agreement..................................................................23
Section 9.5 Assignment of Lease........................................................................24
Section 9.6 Continued Obligation of Lessee.............................................................24
Section 9.7 Assignment of Subleases....................................................................24
ARTICLE 10 MAINTENANCE AND REPAIRS......................................................................25
Section 10.1 Maintenance and Repairs...................................................................25
Section 10.2 Repairs...................................................................................25
ARTICLE 11 ALTERATIONS; ADDITIONS.......................................................................25
Section 11.1 Alterations; Additions....................................................................25
Section 11.2 Permanent and Non-Severable...............................................................27
Section 11.3 Financing of Alterations..................................................................27
Section 11.4 Cooperation...............................................................................27
Section 11.5 Obligations with Respect to Alterations and Additions at End of Term......................27
Section 11.6 Integration of Leased Property............................................................28
ARTICLE 12 LIENS........................................................................................28
Section 12.1 Liens.....................................................................................28
ARTICLE 13 END OF TERM..................................................................................29
Section 13.1 Surrender; Environmental Compliance.......................................................29
(ii)
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ARTICLE 14 DAMAGE OR DESTRUCTION........................................................................30
Section 14.1 Notice of Destruction During the Lease Term; Event of Loss................................30
Section 14.2 Repair and Restoration Obligation in Case of Partial Destruction..........................30
ARTICLE 15 CONDEMNATION.................................................................................32
Section 15.1 Notice of Total Taking During the Term; Lessee Obligations................................32
Section 15.2 Partial Taking............................................................................33
Section 15.3 Temporary Taking..........................................................................33
ARTICLE 16 COLLATERAL ASSIGNMENT BY LESSOR..............................................................34
Section 16.1 Collateral Assignment by Lessor...........................................................34
Section 16.2 Rights of Assignees.......................................................................34
Section 16.3 Lease Superior............................................................................34
Section 16.4 Original Lease............................................................................34
ARTICLE 17 ENTRY ON LEASED PROPERTY; INSPECTION OF RECORDS..............................................34
Section 17.1 Entry on Leased Property..................................................................34
ARTICLE 18 QUIET ENJOYMENT..............................................................................35
Section 18.1 Quiet Enjoyment...........................................................................35
ARTICLE 19 DEFAULT......................................................................................35
Section 19.1 Events of Default.........................................................................35
ARTICLE 20 RIGHTS UPON DEFAULT..........................................................................38
Section 20.1 Rights Upon Default.......................................................................38
Section 20.2 Suits to Enforce..........................................................................39
Section 20.3 Receipt of Payment Not a Waiver...........................................................39
Section 20.4 Damages Payable by Lessee.................................................................39
Section 20.5 Current Damages...........................................................................40
Section 20.6 Final Damages.............................................................................40
Section 20.7 Remedies Cumulative.......................................................................41
ARTICLE 21 MISCELLANEOUS................................................................................42
Section 21.1 Recordation...............................................................................42
Section 21.2 No Waiver.................................................................................42
Section 21.3 Limitation on Recourse....................................................................42
Section 21.4 Estoppel Certificates.....................................................................42
Section 21.5 No Merger.................................................................................43
Section 21.6 Holding Over..............................................................................43
Section 21.7 Notices...................................................................................44
Section 21.8 Lessor's Performance of Lessee's Covenants................................................44
Section 21.9 Severability..............................................................................44
(iii)
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Section 21.10 Written Amendment Required...............................................................44
Section 21.11 Entire Agreement.........................................................................44
Section 21.12 Captions.................................................................................44
Section 21.13 Authority................................................................................45
Section 21.14 Applicable Law...........................................................................45
Section 21.15 Binding Effect...........................................................................45
Section 21.16 Lease Only...............................................................................45
ARTICLE 22 PURCHASE PROCEDURE; APPRAISAL PROCEDURE......................................................45
Section 22.1 Purchase Procedure........................................................................45
Section 22.2 Appraisal Procedure; Right to Revoke Fair Market Renewal Option...........................46
EXHIBITS
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Exhibit A - Form of Subordination, Non-Disturbance and Attornment Agreement
SCHEDULES
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Schedule I - Description of Leased Property
Schedule II - Liens
Schedule III-A - Basic Rent Payment Schedule
Schedule III-B - Basic Rent Allocation
Schedule IV - Stipulated Loss Values
Schedule IV-A - Remainderman Stipulated Loss Values
Schedule V - [Intentionally Omitted]
Schedule VI - Property Specific Terms
Schedule VII - Pricing Assumptions
Schedule VIII - Environmental Action Schedule
(iv)
LEASE AGREEMENT
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LEASE AGREEMENT (this "Lease") dated as of February 12, 2001
between [NAME OF LESSOR LLC], a Delaware limited liability company ("Lessor"),
and AHOLD LEASE U.S.A., INC., a Delaware corporation ("Lessee").
RECITALS
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WHEREAS, Lessee and Lessor, together with the Participants
identified on Schedule VI hereto, the Indenture Trustee identified on Schedule
VI hereto and certain other entities listed therein are parties to a
Participation Agreement, dated as of January 26, 2001 (the "Participation
Agreement");
WHEREAS, pursuant to, and subject to the terms of, the
Participation Agreement Lessor is acquiring the Leased Property (as hereinafter
defined) from the Seller of such Leased Property identified in Schedule 2 to the
Participation Agreement;
WHEREAS, Lessor desires to lease the Leased Property to
Lessee, and Lessee desires to lease the Leased Property from Lessor, all upon
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, Lessor and Lessee hereby agree as follows:
ARTICLE 1
DEFINED TERMS
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Section 1.1 Defined Terms. Capitalized terms not otherwise
defined herein shall have the respective meanings specified in Schedule VI
hereto or, if not defined herein or in Schedule VI, in Appendix A annexed to the
Participation Agreement.
ARTICLE 2
NET LEASE; NO WARRANTIES
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Section 2.1 Leased Property. Lessor hereby leases, lets and
demises unto Lessee, and Lessee hereby rents from Lessor, all of Lessor's right,
title and interest in and to the property described on Schedule I hereto (such
property, together with any Alterations which are deemed to become part of the
Leased Property under Article 11, shall be collectively called the "Leased
Property"), to have and to hold such Leased Property upon and subject to the
terms, conditions and limitations set forth herein.
Section 2.2 Net Lease. Notwithstanding any other term or
provision of this Lease or any of the other Operative Agreements, the
obligations of Lessee to pay all amounts payable
pursuant to this Lease (including specifically and without limitation amounts
due and payable under Articles 5 (Economic Termination; Substitution), 6 (Basic
Rent and Additional Rent), 7 (Insurance), 8 (Use; Requirements of Applicable
Law), 14 (Damage or Destruction), 15 (Condemnation) and 20 (Rights Upon Default)
and all amounts which are Additional Rent) shall be absolute and unconditional
under any and all circumstances, and such amounts shall be paid without notice
(except as expressly provided in this Lease), demand (except as expressly
provided in this Lease), defense (except the defense of prior payment or
manifest error), set-off, deduction or counterclaim and without abatement,
suspension, deferment, diminution or reduction of any kind whatsoever. To the
extent not expressly prohibited by Applicable Law, Lessee waives all rights now
or hereafter conferred upon it by Applicable Law or otherwise to quit the Leased
Property (except as expressly provided in Articles 5, 14 and 15 of this Lease),
to terminate or surrender this Lease (except as expressly provided in Articles
5, 14 and 15 of this Lease), or to any abatement, deferment, diminution or
reduction of any Rent payable hereunder. This Lease is a net lease and the
obligation of Lessee to lease and pay Rent for the Leased Property is without
any warranty or representation, express or implied, as to any matter whatsoever
on the part of Lessor, Indenture Trustee, any Participant or any of their
respective Affiliates, or any other Person, whether or not acting on behalf of
any of them.
The performance by Lessee of its obligations hereunder
including, without limitation, the obligation to pay Rent, shall not be
released, discharged or affected by any circumstances whatsoever, including any
notice, deduction, suspension, deferment, diminution, abatement, reduction,
set-off, defense (other than the defense of prior payment or manifest error),
counterclaim or recoupment whatsoever, or any right to any thereof (including
due to any past, present or future claims of Lessee against Lessor or any other
Person for any reason whatsoever); nor shall this Lease terminate (except as
expressly provided in Articles 5, 14 and 15 of this Lease), nor shall any of the
obligations of Lessee to pay Rent and/or any other amounts payable by Lessee
hereunder from time to time be otherwise released, discharged or affected by
reason of any circumstance of any character, including (i) any defect in or
failure of the title, merchantability, condition, design, engineering,
compliance with specifications, operation, or any defect in or lack of fitness
for use of all or any portion of the Leased Property, (ii) any damage to, or
loss of, or loss of the use of, or destruction or theft of, or abandonment,
dismantling, salvage, scrapping or removal of, all or any part of the Leased
Property or any part thereof, from any cause whatsoever, the prohibition of the
use or possession by Lessee or any other Person of, or any ouster or
dispossession by paramount title or otherwise of, the Leased Property or any
part thereof, (iii) any interruption or interference with, or cessation in, the
use or possession of all or any portion of the Leased Property by any Person for
any reason whatsoever or of whatever duration, (iv) any change, waiver,
extension, indulgence or other action or omission in respect of any duty,
obligation or liability of Lessor, Indenture Trustee, any Participant, or any of
their respective Affiliates, any tenant, sublessee or assignee (whether or not
permitted under Article 9 hereof), or any other Person, whether or not acting on
behalf of any of them, (v) any restriction, prevention or curtailment of or
interference with any use of all or any part of the Leased Property or any
right, title, estate or interest in any of the foregoing, (vi) the invalidity,
disaffirmance, contractual prohibition or unenforceability of this Lease, any of
the other Operative Agreements, or any agreement, document, instruction or
certificate related thereto, (vii) any failure by Lessor, Indenture Trustee, any
Participant, any of their respective Affiliates, any tenant, sublessee or
assignee (whether or
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not permitted under Article 9 hereof) or any other Person to perform any of its
or their obligations contained herein or in any of the other Operative
Agreements, or by reason of any Liens on all or any part of the Leased Property,
(viii) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, moratorium, liquidation or other like proceeding relating to
Lessee, Lessor, Indenture Trustee, any Participant, any of their respective
Affiliates, any tenant, sublessee or assignee (whether or not permitted under
Article 9 hereof), or any other Person, whether or not acting on behalf of any
of them, or any action taken with respect to this Lease or any of the other
Operative Agreements by any trustee, receiver or like Person with respect to any
such Person, or by any court or other tribunal, (ix) any claim that Lessee has
against any Person or for any other cause whether similar or dissimilar to the
foregoing, (x) any lack of right, power or authority of Lessee, Lessor,
Indenture Trustee, any Participant or any other Person to enter into this Lease
or any of the other Operative Agreements or any agreement, document, instrument
or certificate relating thereto or to any of the transactions contemplated by
any thereof or to perform any of the duties, obligations or liabilities
hereunder or thereunder or consummate any of such transactions, (xi) any
doctrine of force majeure, impossibility, frustration or failure of
consideration, (xii) the breach, default or failure of any warranty or
representation, if any, made by Lessor in this Lease or by Lessor, Indenture
Trustee, any Participant or any other Person in any of the other Operative
Agreements, or any agreement, document, instrument or certificate delivered in
connection with any thereof, whether by Lessee, Lessor, Indenture Trustee, any
Participant or any other Person, or (xiii) any other event, circumstance or
happening whatsoever, whether similar or dissimilar to any of the foregoing, and
whether or not Lessee shall have notice or knowledge of any such event,
circumstance or happening, it being the intention of the parties hereto that all
Rent and all other amounts payable by Lessee hereunder from time to time shall
continue to be payable in all events in the manner and at the times herein
provided unless the obligation to pay the same shall be terminated pursuant to
the express provisions of this Lease. In that connection, to the extent not
expressly prohibited by Applicable Law, Lessee hereby waives any and all rights,
powers and remedies which it may now have or which may at any time hereafter be
conferred upon it, by Applicable Law or otherwise, to terminate, cancel, quit or
surrender this Lease (except as expressly provided in Articles 5, 14 and 15 of
this Lease) or to effect or claim any abatement, diminution or reduction of Rent
and all other amounts payable by Lessee from time to time hereunder. Lessee
agrees that if, for any reason whatsoever, this Lease shall be terminated or
suspended in whole or in part by operation of Applicable Law or otherwise,
except as specifically provided herein, Lessee will nonetheless pay an amount
equal to each installment and payment of Rent payable by Lessee hereunder from
time to time as and at the time such payment would have become due and payable
in accordance with the terms and provisions hereof had this Lease not been
terminated or suspended in whole or in part. All covenants, agreements and
undertakings of Lessee herein and in the other Operative Agreements shall be
performed, complied with, discharged and satisfied at Lessee's sole cost,
expense and risk unless expressly stated otherwise herein or therein, as the
case may be.
Nothing in this Section 2.2 or elsewhere in this Lease shall
be construed as a guaranty by Lessee of any residual value in the Leased
Property or as a guaranty of the Notes. Lessee's covenant to pay Rent, as
provided in Article 6, shall be absolute and irrevocable as provided in this
Section 2.2, and shall not affect Lessee's right, at Applicable Law, in equity
or otherwise, to enforce the obligations of Lessor under this Lease or the
obligations of Lessor, Indenture
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Trustee, any Participant, any of their respective Affiliates or any other Person
under any of the other Operative Agreements, subject to the applicable terms
hereof or thereof, as the case may be.
Section 2.3 Disclaimer of Warranties. LESSEE HAS SELECTED THE
LEASED PROPERTY ON THE BASIS OF ITS OWN JUDGMENT. LESSEE EXPRESSLY REPRESENTS,
WARRANTS, ACKNOWLEDGES AND AGREES THAT THE LEASED PROPERTY AND EACH PORTION
THEREOF ARE LEASED HEREUNDER SUBJECT TO ALL REQUIREMENTS OF APPLICABLE LAW NOW
IN EFFECT OR HEREAFTER ADOPTED AND AS IS, WHERE IS, IN THEIR EXISTING STATE AND
PHYSICAL CONDITION AND LOCATION, WITH ALL FAULTS, WITHOUT REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, OF ANY KIND BY LESSOR, INDENTURE TRUSTEE,
ANY PARTICIPANT, ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PERSON ACTING
ON BEHALF OF ANY OF THEM. NEITHER LESSOR, INDENTURE TRUSTEE, ANY PARTICIPANT,
ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PERSON ACTING ON BEHALF OF ANY
OF THEM MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE SAFETY, TITLE, CONDITION,
QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, OR ANY OTHER CHARACTERISTIC OF THE LEASED PROPERTY, OR AS TO
WHETHER THE LEASED PROPERTY OR THE OWNERSHIP, USE, OCCUPANCY, OPERATION OR
POSSESSION THEREOF, COMPLIES WITH ANY APPLICABLE LAW, RULES, REGULATIONS OR
REQUIREMENTS OF ANY KIND OR AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS,
WHETHER OR NOT DISCOVERABLE, OR THE CONFORMITY THEREOF TO ANY PLANS OR ANY OTHER
MATTER WHATSOEVER, WHETHER OR NOT DISCOVERABLE, NOR SHALL LESSOR, INDENTURE
TRUSTEE, ANY PARTICIPANT, ANY OF THEIR RESPECTIVE AFFILIATES OR ANY OTHER PERSON
ACTING ON BEHALF OF ANY OF THEM BE LIABLE FOR OR OBLIGATED WITH RESPECT TO
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY TYPE OR NATURE (INCLUDING ANY
LIABILITY IN TORT, STRICT OR OTHERWISE) IN CONNECTION THEREWITH, IT BEING AGREED
THAT ALL SUCH RISKS ARE TO BE BORNE SOLELY BY LESSEE. THE PROVISIONS OF THIS
SECTION 2.3 HAVE BEEN NEGOTIATED BY LESSOR AND LESSEE AND ARE INTENDED TO BE A
COMPLETE EXCLUSION AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES BY LESSOR,
INDENTURE TRUSTEE, ANY PARTICIPANT, ANY OF THEIR RESPECTIVE AFFILIATES OR ANY
PERSON ACTING ON BEHALF OF ANY OF THEM, EXPRESS OR IMPLIED, WITH RESPECT TO THE
LEASED PROPERTY THAT MAY ARISE PURSUANT TO ANY APPLICABLE LAW NOW OR HEREAFTER
IN EFFECT OR OTHERWISE.
Each payment of Rent and any other amount due hereunder made
by Lessee shall be final, and Lessee, without waiving any other remedies it may
have, will not seek or have any right to recover all or any part of such payment
from Lessor, Indenture Trustee, any Participant, any of their respective
Affiliates or any other Person for any reason whatsoever except for prior
payment or manifest error.
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ARTICLE 3
BASE LEASE TERM;
POSSESSION; RENEWAL TERMS
-------------------------
Section 3.1 Base Lease Term. The Base Lease Term shall
commence on the Closing Date and expire on the Scheduled Expiration Date. In the
event Lessee exercises its right to extend the term of this Lease as herein
provided or the Term is extended pursuant to Section 22.2 hereof, or this Lease
expires or is terminated on an earlier date in accordance with the terms of this
Lease, the last day of the Term shall be such extended date or such earlier
date, as the case may be (the "Expiration Date").
Section 3.2 Fixed Rate Renewal Term. Upon the expiration of
the Base Lease Term and each Fixed Rate Renewal Term (other than the final Fixed
Rate Renewal Term), Lessee shall have the right and option, subject to the terms
of this Article 3, to extend the Term for a fixed rate renewal term (each such
renewal term, a "Fixed Rate Renewal Term") of FIVE (5) years (or, if the date
specified on Schedule VI hereto as the Fixed Rate Term Expiration Date is less
than FIVE (5) years from the commencement of such final Fixed Rate Renewal Term,
the expiration date of such Fixed Rate Renewal Term shall be the Fixed Rate Term
Expiration Date) commencing immediately following the expiration of the Base
Lease Term or the immediately preceding Fixed Rate Renewal Term, as the case may
be; provided that in no event shall any Fixed Rate Renewal Term end later than
the Fixed Rate Term Expiration Date, as such date may be extended as provided in
Section 3.4(b) hereof.
Section 3.3 Fair Market Renewal Terms. Upon the expiration of
the Base Lease Term and each Renewal Term, Lessee shall have the right and
option, subject to the terms of this Article 3, to extend the Term for a renewal
period of not less than TWO (2) years and not more than FIVE (5) years, in the
case of the first such renewal period, and for successive renewal periods of
FIVE (5) years each thereafter (each, a "Fair Market Renewal Term"; each Fixed
Rate Renewal Term and each Fair Market Renewal Term shall be collectively
referred to as the "Renewal Terms").
Section 3.4 Conditions to Renewal Terms; Right to Extended
Fixed Rate Renewal Terms. (a) The right and option of Lessee to extend this
Lease for any of the Renewal Terms shall be subject to the following terms:
(i) At the times hereinafter set forth for the giving of notice
of the exercise of any renewal right, or after which the exercise of
the right and option to extend the Term shall be deemed to be effective
as provided herein, this Lease shall be in full force and effect and no
Event of Default shall have occurred and be continuing;
(ii) At the commencement of any of the Renewal Terms, this Lease
shall be in full force and effect and no Material Default shall have
occurred and be continuing;
(iii) Unless Lessee shall have given written notice to Lessor of
the election of a Fair Market Renewal Term as provided below or that it
does not desire to extend this
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Lease as herein provided, in each case no later than TWELVE (12) months
prior to the expiration of the Base Lease Term or the then current
Fixed Rate Renewal Term, as the case may be, Lessee shall be deemed to
have elected a Fixed Rate Renewal Term to the extent that this Lease
may then be extended for a Fixed Rate Renewal Term as provided herein;
(iv) Lessee may exercise its right to each Fair Market Renewal
Term by giving written notice to Lessor no later than TWELVE (12)
months prior to the expiration of the Base Lease Term or the then
current Renewal Term, which notice with respect to the first Fair
Market Renewal Term shall state the desired length of such first Fair
Market Renewal Term (subject to Section 3.3 hereof) and shall be
subject to revocation as provided in Section 22.2(b) hereof;
(v) Each Renewal Term shall be on the same terms, covenants and
conditions set forth in this Lease; provided, however, that Rent,
including, without limitation, Stipulated Loss Values, shall be
determined in the manner set forth in Sections 3.5 and 3.6 hereof; and
(vi) No Renewal Term shall cause the Term to extend beyond the
Final Date, if any.
(b) So long as no Material Default shall have occurred and be
continuing, Lessee shall have the right on one occasion to cause a reappraisal
of the useful life and residual value of the Improvements (valued taking into
account their location) by notice ("Election Notice") given to Lessor not less
than TWELVE (12) months prior to the expiration of the Base Lease Term or any
Fixed Rate Renewal Term. Such appraisal shall be completed prior to Lessee's
giving the Election Notice and conducted by an appraiser selected by Lessee and
reasonably acceptable to Lessor, and at the cost and expense of Lessee. If such
appraisal indicates that 75% of the then estimated remaining economic useful
life of the Improvements (measured from the Closing Date) ends on a date which
is later than the Fixed Rate Term Expiration Date, and if on the date which is
the last day of 80% of such reappraised estimated remaining economic useful life
(the "Reappraised Fixed Rate Term Expiration Date"), the residual value of the
Improvements (valued taking into account their location) will be equal to at
least 20% of Lessor's Cost of the Improvements (without taking into account
inflation or deflation that has occurred or is estimated to occur from the
Closing Date through the Reappraised Fixed Rate Term Expiration Date), then the
latest date on which a Fixed Rate Renewal Term may end, as provided in Section
3.2 hereof, shall be extended to the Reappraised Fixed Rate Term Expiration
Date.
Section 3.5 Rent During Renewal Terms. (a) Basic Rent for each
Basic Rent Payment Date during a Fixed Rate Renewal Term shall be payable
semi-annually in arrears in the amount of the Fixed Renewal Rent as specified on
Schedule VI.
(b) Basic Rent for the first Fair Market Renewal Term shall be
105% of the Fair Market Rental as then determined, and thereafter shall be 100%
of the Fair Market Rental for each successive Fair Market Renewal Term;
provided, however, that, upon the request of Lessee, accompanied by an opinion
of independent tax counsel selected by it concluding that reducing the
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Basic Rent during the first Fair Market Renewal Term to 100% of Fair Market
Rental will not result in any adverse tax consequences to Lessor or Owner
Participant, Lessor shall reduce the Basic Rent during the first Fair Market
Renewal Term to 100% of Fair Market Rental provided that Lessor shall not be
required to make such reduction if it is advised by its tax counsel that such
reduction could result in adverse tax consequences to it or Owner Participant.
Section 3.6 Stipulated Loss Value During Renewal Terms.
Stipulated Loss Value during the first TEN (10) years of Renewal Terms hereunder
shall be equal to 50% of the Aggregate Purchase Price of the Leased Property and
thereafter, during any subsequent Renewal Term permitted hereunder, Stipulated
Loss Value shall equal 40% of the Aggregate Purchase Price of the Leased
Property and in any event, during a Renewal Term Lessee shall pay, together with
any payment of Stipulated Loss Value, any Basic Rent due and payable on the date
the Stipulated Loss Value amount is to be paid.
ARTICLE 4
[INTENTIONALLY OMITTED]
---------------------
ARTICLE 5
ECONOMIC TERMINATION; SUBSTITUTION
----------------------------------
Section 5.1 Economic Termination. (a) If, (i) at any time
during the period starting with the fifth anniversary of the Closing Date and
ending one year prior to the date on which the Term is then scheduled to expire,
a good faith determination is made by Lessee, as evidenced by an Officer's
Certificate, that the Leased Property has become obsolete, surplus or uneconomic
to the needs of Lessee and the Affiliates of Lessee, or (ii) at any time prior
to the date on which the Term is then scheduled to expire, a good faith
determination is made by Lessee, as evidenced by an Officer's Certificate, that
disposition of the Leased Property is necessary or advisable for purposes of
complying with Applicable Law (including, without limitation, compliance with
the requirements of any governmental agency or regulatory authority in order to
obtain approval of an acquisition, merger or other business or association
proposed by Guarantor or any of its Affiliates), Lessee shall have the right, so
long as no Event of Default and (in the case of clause (i) only) no Material
Default has occurred and is continuing, on not less than NINETY (90) days' prior
written notice (the "Termination Notice") (which Termination Notice shall
include the Officer's Certificate) to Lessor and Indenture Trustee (which,
except as expressly provided herein, shall be irrevocable), to terminate this
Lease on the first Basic Rent Payment Date occurring at least NINETY (90) days
after delivery of such notice (the "Obsolescence Termination Date"). The
Termination Notice may be revoked by Lessee for any reason up to THIRTY (30)
days prior to the Obsolescence Termination Date; provided, however, that no such
revocation shall be made during the one year period prior to the date on which
the Term is scheduled to expire; and provided, further, that Lessee shall not
have the right to revoke more than four Termination Notices hereunder. Upon such
termination election, Lessee, as agent for Lessor, shall use all reasonable
efforts to sell the Leased Property (subject to any Senior Subleases) for cash
on such Obsolescence Termination Date to the highest bidder which is neither
Lessee nor an
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Affiliate of Lessee. Lessor and Owner Participant may, but shall have no
obligation to, attempt to locate a purchaser for the Leased Property, provided
that such attempts do not interfere with Lessee's attempts to locate such a
purchaser and are coordinated through Lessee, and provided further, that no such
sale shall be made to a Competitor of Lessee or any of its Affiliates without
the prior written approval of Lessee, which approval Lessee may withhold in its
absolute and sole discretion. In the event such a buyer is found, Lessee shall
vacate the Leased Property and the sale shall occur on the Obsolescence
Termination Date and net sales proceeds shall be paid to Lessor. If the net
sales proceeds received by Lessor are less than the Stipulated Loss Value of the
Leased Property on the Stipulated Loss Value Determination Date that is the
Obsolescence Termination Date, Lessee shall pay to Lessor on such Obsolescence
Termination Date such shortfall and all other amounts then due, including any
accrued and unpaid Basic Rent payable prior to such Obsolescence Termination
Date and any Additional Rent then due. If no such buyer is found by the
Obsolescence Termination Date, Lessee may elect to either continue this Lease
without any such termination and such election shall count as one of the four
permitted revocations of a Termination Notice or vacate the Leased Property (it
being understood that sublessees under Senior Subleases need not vacate) and pay
to Lessor the Stipulated Loss Value for the Leased Property plus all other
amounts then due, including accrued and unpaid Basic Rent payable prior to such
Obsolescence Termination Date and any Additional Rent then due on such
Obsolescence Termination Date.
(b) In the event Lessee elects to terminate this Lease as
provided in this Section 5.1, Lessor may elect to retain the Leased Property,
subject to Senior Subleases (by notice given to Lessee no later than SIXTY (60)
days after Lessor receives the Termination Notice), and thereby relieve Lessee
from any obligation to pay Stipulated Loss Value (but Lessee shall nonetheless
promptly pay any Basic Rent and Additional Rent then due), provided that no such
election shall be made unless Lessor shall have deposited funds sufficient to
pay the Notes in full on the Obsolescence Termination Date or shall have
otherwise satisfied Indenture Trustee that amounts sufficient to pay the Notes
in full on the Obsolescence Termination Date will be available. Upon such an
election by the Lessor, Lessee shall pay to Lessor as Basic Rent through the
Obsolescence Termination Date the amount, if any, set forth opposite the
Obsolescence Termination Date under the caption, "Basic Rent Amount as of
Stipulated Loss Value Determination Date" or, if such amount is a negative
number, Lessor shall pay Lessee such amount as a refund of Basic Rent allocated
to the period after such Obsolescence Termination Date. Upon such termination on
the Obsolescence Termination Date Lessor may transfer the Leased Property,
subject to Senior Subleases, to such other Person as it shall determine, but at
its or such other Person's sole cost and expense, including, without limitation,
as to transfer taxes.
(c) Upon compliance by Lessee with its obligations under
Section 5.1(a), unless Lessee elects to continue this Lease, this Lease and all
obligations and liabilities of Lessee hereunder shall terminate, except for
obligations of Lessee which expressly survive the Expiration Date.
(d) In the event, for any reason, the purchaser fails to
purchase the Leased Property on the Obsolescence Termination Date, this Lease
shall continue, and Lessee shall pay any costs incurred by Lessor, any
Participant or Indenture Trustee in connection therewith unless
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such failure resulted from a breach by a party of its obligations under the
Operative Agreements, in which case Lessee shall not pay such party's costs.
Section 5.2 Substitutions. (a) Upon the occurrence of an Event
of Loss or a Taking or if a good faith determination is made by Lessee, as
evidenced by an Officer's Certificate, (x) that the Leased Property has become
obsolete, surplus or uneconomical in its present state to the needs of Lessee
and the Affiliates of Lessee, or (y) that disposition of the Leased Property is
necessary or advisable for purposes of complying with this Agreement, or (z)
that disposition of the Leased Property is necessary or advisable for purposes
of complying with Applicable Law (including, without limitation, compliance with
the requirements of any governmental agency or regulatory authority in order to
obtain approval of an acquisition, merger or other business or association
proposed by Guarantor or any of its Affiliates), Lessee shall have the right, at
any time during the Lease Term, to request that the Leased Property be replaced
with other property which meets the conditions of paragraph (b) below (the
"Replacement Property"). Such request shall be made to Lessor and Indenture
Trustee not less than NINETY (90) days prior to the date of such proposed
replacement, which notice shall be accompanied by
(i) a description of the Replacement Property;
(ii) an appraisal from the Appraiser with respect to the Fair
Market Value, remaining economic useful life and residual value of the
Replacement Property and of the Leased Property; and
(iii) a title report, a Survey and an Environmental Report with
respect to the Replacement Property, in each case reasonably acceptable
to Lessor.
(b) Any replacement of the Leased Property as provided in
paragraph (a) above shall be subject to the approval of Lessor and the
satisfaction of the following conditions precedent (at Lessee's sole cost and
expense); provided that, in the case of a replacement as a result of an Event of
Loss, a Taking or an event described in Section 5.2(a)(z), Lessor shall not have
the right to withhold its approval if Lessee has satisfied the following
conditions precedent:
(A) on the date of such replacement the following documents
shall have been duly authorized, executed and delivered by the
respective party or parties thereto and shall be in full force and
effect, and an executed counterpart of each thereof in form and
substance reasonably satisfactory to Lessor shall have been delivered
to Lessor, Owner Participant and Indenture Trustee:
(1) a Lease Supplement covering the Replacement
Property;
(2) so long as the Indenture shall not have been
discharged and satisfied, an Indenture Supplement covering the
Replacement Property;
(3) conveyance documents with respect to the
Replacement Property which are substantially similar to, and
which shall be integrated into the transactions contemplated
by the Operative Agreements with respect to such Leased
Property in substantially the same manner as, the conveyance
documents delivered
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with respect to the Leased Property on the Closing Date,
executed by the owner thereof in favor of Lessor and any other
applicable party;
(4) a Mortgage and an Assignment of Leases and Rents
with respect to the Replacement Property; and
(5) evidence of the making of (I) so long as the
Indenture shall not have been discharged, such Uniform
Commercial Code financing statements and fixture filings
covering the security interests created by the Indenture, and
(II) such "precautionary" Uniform Commercial Code financing
statements and fixture filings as are deemed necessary or
desirable by counsel for Lessor to protect the ownership
interests of Lessor and the security interests of Indenture
Trustee in the Replacement Property;
(B) on such replacement date, Lessor shall receive good title
to the Replacement Property free and clear of Liens (other than
Permitted Liens of the type specified in clauses (a), (b), (c), (e),
(h), and (j) of the definition thereof) and each of Lessor and
Indenture Trustee shall have received a title insurance policy (or a
binding marked commitment to issue the same) in form and substance
satisfactory to Lessor and Indenture Trustee insuring their interests
in the Replacement Property for its Fair Market Value and the amount of
the Notes secured thereby, respectively;
(C) Lessor shall have received evidence reasonably
satisfactory to it that the Fair Market Value, expected residual value,
condition, utility and remaining economic useful life of the
Replacement Property is, in each case, no less than the Fair Market
Value, expected residual value, condition, utility and remaining
economic useful life of the Leased Property prior to the event giving
rise to such substitution, assuming such Leased Property was in the
condition required by this Lease;
(D) Owner Participant shall have received an opinion of
independent tax counsel (selected by Owner Participant and reasonably
acceptable to Lessee) to the effect that there should be no adverse tax
consequences resulting from such replacement and Lessee shall have
agreed to indemnify Owner Participant in a manner satisfactory in all
respects to Owner Participant for any such adverse tax consequences.
Alternatively, so long as the Credit Rating of Guarantor shall satisfy
the Minimum Credit Criteria, if such independent tax counsel is unable
to deliver such opinion, Lessee shall have agreed to either (i) adjust
Rent in accordance with Section 6.6 hereof by, or (ii) pay as
Additional Rent, an amount sufficient to protect Owner Participant's
Net Economic Return against such adverse tax consequences and to
indemnify Owner Participant in a manner satisfactory in all respects to
Owner Participant against any adverse tax consequences resulting from
such adjustment to Rent or payment of Additional Rent;
(E) no Event of Default or (in the case of an Event of Loss, a
Taking or an event described in clause (x) or (y) of paragraph (a) of
this Section 5.2 only) no Material Default shall have occurred and be
continuing after giving effect to such substitution;
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(F) Lessor and Indenture Trustee shall have received Rating
Agency Confirmation;
(G) Guarantor shall execute and deliver to Lessor, Indenture
Trustee and each Participant an agreement pursuant to which Guarantor
confirms its obligations after giving effect to the replacement of the
Leased Property; and
(H) Lessee and/or the seller of such Replacement Property
shall have satisfied the conditions set forth in Sections 3(a)(7),
(12), (13), (14), (15), (16), (17) (if the Replacement Property
includes a Remainder), (18), (22), (23), (29), (30), (31), (32), (35)
and (36) and the corresponding provisions of Section 3(c) of the
Participation Agreement with respect to such Replacement Property and
otherwise complied with this Section 5.2, and Lessor, each Participant
and Indenture Trustee shall have received such other documents,
certificates and opinions as shall be reasonably requested.
(c) Should Lessee have provided Replacement Property in
accordance with paragraphs (a) and (b) of this Section 5.2, (y) the Replacement
Property shall become the Leased Property for all purposes of this Lease, which
shall continue in full force and effect with respect to such Replacement
Property; and (z) Lessor shall convey as-is, where-is, without recourse or
warranty, except for a warranty against Lessor's Liens and Owner Participant's
Liens, to Lessee all right, title and interest of Lessor in and to the Leased
Property being replaced by executing and delivering to Lessee such bills of sale
and other documents and instruments as Lessee may reasonably request to evidence
such conveyance.
ARTICLE 6
BASIC RENT AND ADDITIONAL RENT
------------------------------
Section 6.1 Payment. During the Base Lease Term, rent in the
amounts and for the periods occurring during the Base Lease Term as set forth in
Schedule III-A hereto will be paid by Lessee on the dates as specified on
Schedule III-A under the caption "Basic Rent Payment Date" and in the amounts as
specified on Schedule III-A under the caption "Basic Rent Payment." Basic Rent
shall be allocated to each Lease Period in the amount set forth for such Lease
Period on Schedule III-B, provided, however, that no Basic Rent shall be
allocated to the Rent Holiday Period. Basic Rent allocated to any Lease Period
pursuant to Schedule III-B shall be further allocated ratably to each day within
such Lease Period. Basic Rent shall accrue for the use of the Leased Property
pursuant to this Lease in the manner so allocated in the immediately preceding
two sentences. It is the intention of Lessor and Lessee that the allocations of
Basic Rent to each Lease Period as set forth in Schedule III-B constitute
specific allocations of fixed rent within the meaning of Treasury Regulation
section 1.467-1(c)(2)(ii). Basic Rent with respect to the applicable Renewal
Term in the amount described in Section 3.5 of this Lease will be paid by Lessee
semi-annually in arrears, commencing on the first Basic Rent Payment Date
following the start of such Renewal Term, and continuing on each Basic Rent
Payment Date thereafter occurring during such Renewal Term. With the exception
of the Rent Holiday Period, Basic Rent shall be allocated to each calendar year
in the Term based on the assumption that each calendar year in the Term is
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360 days, consisting of four 90 day quarters and twelve 30-day months with each
quarter consisting of three 30-day months.
Section 6.2 Additional Rent. Lessee also agrees to pay Lessor,
or to whomsoever shall be entitled thereto, without any duplication of payment,
any and all Additional Rent promptly as the same shall become due and owing.
Lessee agrees to pay during the Term, as Additional Rent, in addition to all
other sums constituting Additional Rent, all amounts payable by Lessee under the
Operative Agreements, and all amounts of additional interest payable with
respect to the Notes pursuant to Section 1.4(b) of the First Supplemental
Indenture.
Section 6.3 Late Charge. Any payment of Rent which is not paid
by Lessee on the date that it is due shall bear interest at the Late Rate from
(and including) such due date to (but excluding) the date such Rent is paid in
full with such interest.
Section 6.4 Manner of Payment of Rent and Additional Rent.
Basic Rent and Additional Rent shall be paid to whomsoever shall be entitled
thereto without demand, prior notice, abatement, deduction, counterclaim,
defense, or offset, in Dollars at Lessor's address as set forth in Schedule 1 to
the Participation Agreement, or to such other Person or at such other address as
Lessor or as such Person, respectively, may designate in writing. Each payment
of Basic Rent due hereunder shall be made, or caused to be made, by Lessee by
11:00 a.m. local time in New York, New York, in immediately available funds
having same day value on the date when such payment shall be due. In any case
where the scheduled date for a payment of any Rent hereunder shall not be a
Business Day, such payment shall be made on the next succeeding Business Day
and, for all purposes of this Lease, such payment shall be deemed due on such
next succeeding Business Day. Anything herein to the contrary notwithstanding
(so long as the Loan remains outstanding and the Liens of the Security Documents
have not been discharged and released), any payment of Basic Rent, Stipulated
Loss Value, sums payable by Lessee as a result of the disposition of Lessor's
interest in the Leased Property and other income, revenues, issues, profits,
insurance proceeds, condemnation awards, bankruptcy claims, liquidated damages
and other payments, tenders and security now or hereafter due and payable to or
receivable by Lessor shall be paid by Lessee (to the extent that the same are
payable by Lessee) to Indenture Trustee; provided, however, anything in this
Lease to the contrary notwithstanding, any payment constituting an Excepted
Payment shall be paid to the Person entitled thereto.
Section 6.5 Minimum Rental Amounts. During the Base Lease
Term, (i) the amount of the installment of Basic Rent (both before and after any
reduction or other adjustment thereof pursuant to Section 6.6 of this Lease) and
payments of Additional Rent consisting of interest on the Notes pursuant to
Section 1.4(b) of the First Supplemental Indenture, payable on each Basic Rent
Payment Date or on such other date as any installment of Basic Rent may be due
and payable shall be at least equal to the aggregate amount of principal (other
than principal due by reason of prepayment or acceleration) and accrued interest
due and payable on such Basic Rent Payment Date or such other date in respect of
all Notes then outstanding and (ii) each payment of Stipulated Loss Value (both
before and after any reduction or other adjustment thereof pursuant to Section
6.6 of this Lease) shall be at least equal to an amount sufficient, as of the
date of payment, to pay in full the principal of and interest on all outstanding
Notes on and as of such date of
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payment. Nothing in this Section 6.5 or elsewhere in this Lease shall be
construed as a guaranty by Lessee of any residual value in the Leased Property
or as a guaranty of any Notes.
Section 6.6 Adjustments to Average Annual Basic Rent, Basic
Rent, Stipulated Loss Value, etc. Average Annual Basic Rent, Basic Rent and
Stipulated Loss Value shall be subject to adjustment in the event that:
(i) (A) the transaction shall close on a date other than the
Scheduled Closing Date or (B) Transaction Expenses paid by Lessor or
Owner Participant in accordance with its obligation set forth in
Section 18(b)(i) of the Participation Agreement in respect of the
Leased Property and the Other Leased Properties shall be in an amount
which is other than 3.25% of the Aggregate Purchase Price for the
Leased Property and the Other Leased Properties;
(ii) there shall be an Additional Equity Investment or a
Supplemental Financing in respect of Alterations;
(iii) after September 26, 2000 and prior to the Closing Date a
Change in Tax Law that adversely affects Owner Participant's Tax
Assumptions occurs; or
(iv) there shall be a Refinancing or an adjustment of Rent
pursuant to Section 5.2(b)(D)(i) hereof.
In each such case, Average Annual Basic Rent, Basic Rent and Stipulated Loss
Value percentages shall be adjusted upward or downward by such amounts as will
preserve Owner Participant's Net Economic Return, which adjustments shall be
computed solely on the basis of the Tax Assumptions and the Pricing Assumptions
(as such Assumptions may be adjusted as a result of previous adjustments to
Basic Rent pursuant to this Section 6.6) and subject to compliance with the
limitations of Section 467 of the Code and the Regulations thereunder in the
same manner as prior to such adjustment unless a change in Section 467 of the
Code or the Regulations thereunder has occurred after the Closing Date, in which
case the adjustment will comply with such change, and otherwise utilizing the
same methodology as was used in the initial calculation of Basic Rent and, to
the extent not inconsistent with the foregoing, will minimize the implicit
financing cost to Lessee of the Basic Rent payable under this Lease. Any
adjustment pursuant to clause (i) of the first sentence of this Section 6.6
shall be made on or before the date that is FIVE (5) Business Days prior to the
first Basic Rent Payment Date. Subject to the foregoing, adjustments shall be
made as soon as practical after the event requiring an adjustment. Each
adjustment of Average Annual Basic Rent, Basic Rent or Stipulated Loss Value
percentages shall be evidenced by the execution and delivery of a Lease
Supplement, but shall be effective as of the occurrence of the event requiring
an adjustment without regard to when such Lease Supplement is so executed and
delivered.
Owner Participant shall confirm to Lessee, by means of a
certificate of one of its vice presidents, that the adjustments to Average
Annual Basic Rent, Basic Rent and Stipulated Loss Value percentages were
computed on the basis required by this Section 6.6. The accuracy of any such
calculation shall be subject to confirmation, at the request of Lessee, by an
indepen-
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dent auditing firm selected by Lessee and acceptable to Owner Participant;
provided that such auditing firm shall execute a confidentiality agreement
reasonably acceptable to Owner Participant. The fees and expenses of such
independent auditing firm shall be paid by Lessee, unless the net present value
of Basic Rent payable as determined by such auditing firm (using the Discount
Rate) shall be less than that calculated by Owner Participant by 10 basis points
or more, in which case Owner Participant shall pay such fees and expenses.
Except as provided in the immediately preceding sentence, the costs and expenses
of all adjustments hereunder (including, without limitation, filing and
documentation costs, and reasonable legal fees and expenses incurred by the
Persons involved in effecting such adjustments) shall be for the account of
Lessee.
Section 6.7 Stipulated Loss Values. (a) Stipulated Loss Values
for the Base Lease Term have been calculated on the basis that (1) any Basic
Rent actually due and payable on the date of such calculation shall not be paid;
(2) any Basic Rent scheduled to be paid prior to the date of such calculation is
assumed to have been paid; and (3) any Basic Rent scheduled to accrue on or
after the date of such calculation shall not accrue. During the Base Lease Term,
any installment of Basic Rent otherwise scheduled to become due and payable on
or after the date on which any payment of Stipulated Loss Value becomes due and
payable shall not be due and payable hereunder. Stipulated Loss Value, as of any
date in the Base Lease Term as shown under the column entitled "Net Stipulated
Loss Value" on such Schedule IV, has been increased by the amount shown on
Schedule IV for such date under the column entitled "Basic Rent Amount as of
Stipulated Loss Value Determination Date" (or decreased by such amount if such
amount is a negative number). Any increase referred to in the previous sentence
shall be treated as, and shall constitute, a payment of Basic Rent, and any
decrease referred to in the previous sentence shall be treated as, and shall
constitute, a refund of Basic Rent.
(b) Stipulated Loss Values for any Renewal Term shall be
determined in accordance with Section 3.6 hereof.
ARTICLE 7
INSURANCE
---------
Section 7.1 Coverage. Subject to Lessee's rights of
self-insurance set forth in this Section 7.1, Lessee shall maintain:
(a) all-risk property insurance covering each and every
component of the Leased Property against physical loss or damage,
including, but not limited to fire and extended coverage, collapse,
flood and earth movement in an amount at least equal to the replacement
value. Such insurance policy shall contain an agreed amount endorsement
waiving any coinsurance penalty;
(b) "boiler and machinery" insurance with respect to damage
(not insured against pursuant to Section 7.1(a) hereof) to the boilers,
pressure vessels or similar apparatus located on the Leased Property
for risks normally insured against under boiler and machinery policies;
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(c) commercial general liability insurance written on an
occurrence basis (not claims made basis) with a limit of not less than
$1,000,000 per occurrence. Such coverage shall include, but shall not
be limited to, premises/operations, explosion, collapse, underground
hazards, hostile fire and limited sudden and accidental pollution,
contractual liability, independent contractors, products/completed
operations, property damage, bodily injury, advertising injury and
personal injury liability. Such insurance shall not contain an
exclusion for punitive or exemplary damages when insurable by law;
(d) (i) Workers' Compensation insurance in accordance with
statutory provisions covering accidental injury, illness or death of an
employee of Lessee while at work or in the scope of his employment with
Lessee and (ii) Employer's Liability in an amount not less than
$1,000,000. Such coverage shall not contain any occupational disease
exclusion; and
(e) excess or umbrella liability insurance in an amount not
less than $100,000,000 written on an occurrence basis (i.e., not claims
made basis) providing coverage limits in excess of the insurance limits
in (c) and (d)(ii) above. Such insurance shall follow from the primary
insurance and drop down in case of exhaustion of underlying limits.
Such insurance shall not contain an exclusion for punitive or exemplary
damages where insurable under law.
The insurance required to be maintained pursuant to this Lease shall be no less
favorable than that generally maintained by Lessee and the U.S. operating
subsidiaries of Guarantor on properties which are owned or operated by them and
all insurance carried pursuant to this Section shall be placed with such insurer
having a minimum A.M. Best rating of A.X and a Credit Rating of not less than
Baa2 by Moody's and BBB by Standard & Poor's, and be in such form, with terms,
conditions, limits and deductibles as shall be acceptable to the Lessor;
provided that such insurance may be reinsured by insurers in which Lessee or any
of its Affiliates has an interest.
Any of the foregoing insurance coverages may be carried as a
part of blanket policies, provided that (i) amounts shall not be less than those
required by this Section 7.1; (ii) any such policy(ies) shall otherwise comply
with the requirements of this Article 7; and (iii) the protection afforded,
except for the exhaustion of aggregate limits, under any such policy(ies) shall
be no less than that which would have been afforded under a separate policy or
policies relating only to the Leased Property.
Notwithstanding the preceding provisions of this Section 7.1,
Lessee shall be entitled to self-insure and/or have deductibles against all
risks described in Section 7.1(a)-(d) so long as such risks retained do not
exceed $10,000,000 in any single occurrence, no Event of Default shall have
occurred and be continuing for THIRTY (30) days and the Credit Rating of
Guarantor shall not be less than Baa2 by Moody's and BBB by Standard & Poor's.
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Section 7.2 Policy Provisions. Any insurance policy required
to be maintained by Lessee pursuant to Section 7.1 shall:
(a) specify Lessee as the insured and, except in the case of
the insurance described in Section 7.1(d), Lessor, each Participant and
Indenture Trustee (in both its individual and trust capacities) as
additional insureds as to all such insurances. It shall be understood
that any obligation imposed upon the Lessee, including but not limited
to the obligation to pay premiums, shall be the sole obligation of
Lessee and not of Lessor, any Participant or Indenture Trustee;
(b) provide, in the case of insurance carried pursuant to
Section 7.1(a) and (b), that all insurance proceeds in respect of any
loss or occurrence (i) shall be adjusted with Lessee, unless (and only
for so long as) an Event of Default shall be continuing, in which case
such proceeds shall be adjusted solely with Lessor and (ii) shall be
payable (x) if in an amount (including amounts with respect to which
Lessee is self-insured as provided in Section 7.5 hereof) of
$10,000,000 or less and no Material Default is continuing, to Lessee in
accordance with Section 14, and (y) in all other circumstances unless
and until the Indenture shall have been satisfied and discharged in
accordance with Section 3.1 thereof, to Indenture Trustee and
thereafter, to Lessor;
(c) provide that, in respect of the interests of Lessor, each
Participant and Indenture Trustee, such policies shall not be
invalidated by any action or inaction of Lessee or any other Person
(other than the Person making the claim thereunder) and shall insure
Lessor, each Participant and Indenture Trustee regardless of, and any
claims for losses shall be payable notwithstanding:
(i) any act of negligence, including any breach of any
condition or warranty in any policy of insurance, of Lessee or
any other Person (other than the Person making the claim
thereunder);
(ii) the occupation or use of the Leased Property for
purposes more hazardous than permitted by the terms of the
policies;
(iii) any foreclosure or other similar proceeding or
notice of sale relating to any of the Leased Property; and
(iv) any change in the title to or ownership of any of
the Leased Property after Lessee and its insurance underwriter
has notice of such change in title or ownership;
(d) provide that such insurance shall be primary insurance and
that the insurers under such insurance policies shall be liable under
such policies without right of contribution from any other insurance
coverage effected by or on behalf of Lessor, each Participant or
Indenture Trustee under any other insurance policies covering a loss
that is also covered under the insurance policies maintained or
arranged by Lessee pursuant to this Article 7 and shall expressly
provide that all provisions thereof, except the limits of liability
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(which shall be applicable to all insureds as a group) and liability
for premiums (which shall be solely a liability of Lessee), shall
operate in the same manner as if there were a separate policy covering
each insured;
(e) provide that any cancellation thereof shall not be
effective as to Lessee, Lessor, each Participant or Indenture Trustee
until at least THIRTY (30) days after receipt by Lessee, Lessor, each
Participant or Indenture Trustee, as applicable, of written notice
thereof; provided that such delayed effectiveness shall not be required
where the insurance proposed to be canceled has been replaced with
other insurance, or Lessee has self-insured, in either case in
accordance with the terms hereof;
(f) waive any right of subrogation of the insurers against
Lessor, each Participant and Indenture Trustee, and waive any right of
the insurers to any setoff or counterclaim or any other deduction,
whether by attachment or otherwise, in respect of any liability of
Lessor, each Participant and Indenture Trustee; and
(g) provide that the whole or any part of the right, title and
interest of Lessor therein may be assigned to Indenture Trustee.
Section 7.3 Certificates of Insurance; Performance by Lessor.
On or prior to the Closing Date and on or before the TENTH (10th) day after the
expiration of any policy maintained pursuant to this Article 7 and not less than
FIVE (5) days prior to any assignment of Lessee's interest in this Lease
permitted under Section 9.5 of this Lease, Lessee shall deliver to each of
Lessor, each Participant and Indenture Trustee certificates of insurance issued
by the insurers evidencing the insurance maintained pursuant to this Article 7
or, to the extent Lessee is permitted to self-insure under the requirements
established in Section 7.1 of this Lease and Lessee has elected to do so, an
Officer's Certificate that self-insurance is permitted under Section 7.1 of this
Lease and that self-insurance is in place for any insurance coverage required
under this Article 7 that is not otherwise evidenced by the insurers'
certificates of insurance. In the event that Lessee shall fail to maintain
insurance or provide notice of self-insurance as herein provided, Lessor,
Indenture Trustee, each Participant and/or their respective successors,
designees, or assigns may at their respective option, but without obligation,
provide such insurance and, in such event, Lessee shall, within THIRTY (30) days
after receipt of demand from time to time, reimburse Lessor, Indenture Trustee,
each Participant and/or their respective successors, designees, or assigns for
the cost thereof, together with interest on such cost at the Late Rate computed
from the date of payment of such cost to the date of reimbursement. Lessor,
Indenture Trustee, each Participant and/or their successors, designees, or
assigns shall give prompt written notice to Lessee of any such insurance.
Section 7.4 General. Lessor shall be entitled, upon reasonable
advance notice, to review Lessee's insurance policies carried and maintained
with respect to the Leased Property and Lessee's obligations under this Article
7. Upon request, Lessee shall furnish Lessor with copies of all insurance
policies, binders, and cover notes or other evidence of such insurance.
Notwithstanding anything to the contrary herein, no provision of this Article 7
or any provision of this Agreement shall impose on Lessor or any Participant any
duty or obligation to verify the existence or adequacy of the insurance coverage
maintained by Lessee, nor shall Lessor or any Participant
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be responsible for any representations or warranties made by or on behalf of
Lessee to any insurance broker, company or underwriter.
Section 7.5 Proceeds. All proceeds of property insurance
policies or self-insurance maintained pursuant to this Article 7 shall be paid
in the manner set forth in Article 14 of this Lease; provided, however, that, if
the applicable Section of this Lease requires that the proceeds of property
insurance be retained by Lessor or Indenture Trustee because a Material Default
shall have occurred and be continuing, and Lessee was self-insured with respect
to the occurrence which would have generated such proceeds, then Lessee shall,
within SEVEN (7) days after receipt of written notice from Lessor or Indenture
Trustee, as the case may be, pay a sum equal to the proceeds which would have
been paid by the insurance policies required under Section 7.1(a) (assuming that
there was no deductible allowed and no self-insurance in place), to Lessor or
Indenture Trustee, as the case may be, as though there were an actual policy of
insurance in place.
Section 7.6 Separate Insurance. Nothing in this Article 7
shall be construed to prohibit Lessor, each Participant, and/or Indenture
Trustee from insuring at its own expense any Leased Property or its interest
therein, provided any insurance so maintained shall not provide for or result in
a reduction of the coverage or the amounts payable under any of the insurance
required to be maintained by Lessee under this Article 7.
ARTICLE 8
USE; REQUIREMENTS OF APPLICABLE LAW
-----------------------------------
Section 8.1 Use. Lessee may use the Leased Property for any
Permitted Uses, it being understood that Lessee shall have the right not to
utilize the Leased Property or any part thereof at any time and from time to
time, subject to compliance with all other terms of this Lease and Other
Requirements as defined on Schedule VI. "Permitted Uses" shall mean any lawful
purposes except that no use may be made (whether by Lessee or any assignee or
sublessee of Lessee or otherwise) (a) which would violate Section 8.2 or 8.3
hereof upon, in or relating to the Leased Property or any portion thereof, (b)
which would void any certificate of occupancy required for the Leased Property,
or (c) which results in the primary use of the Leased Property being (i) the
mining or removal of any oil, gas or minerals or (ii) the handling,
transportation, processing, storage or disposal of Hazardous Materials on or at
the Leased Property.
Section 8.2 Compliance with Applicable Law. During the Term,
at Lessee's expense and without expense to any Participant, Lessor or Indenture
Trustee, Lessee will comply in all material respects with the provisions of all
Applicable Law governing the use, operation, condition or maintenance of, or
otherwise affecting, the Leased Property; provided, however, that this Section
8.2 shall not apply to compliance with Environmental Laws, which compliance
shall be governed solely by Section 8.3.
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Section 8.3 Environmental Covenants. In order to induce Lessor
to enter into this Lease, Lessee covenants and agrees during the term of this
Lease:
(a) to comply in all material respects and to cause all
assignees, tenants, subtenants and other Persons occupying or
conducting operations on the Leased Property to comply in all material
respects with all Environmental Laws now or hereafter applicable to the
Leased Property or any operation thereon or to Lessee and its
subtenants, assignees, tenants and other Persons occupying or
conducting operations on the Leased Property, except where failure to
comply is in the process of being investigated, remediated or otherwise
addressed, remedied or cured in compliance with applicable
Environmental Laws and would not have a material adverse effect on the
ability of Lessee (taking into account the Guarantee) to perform its
obligations hereunder and under the other Operative Agreements;
(b) to have sole responsibility for any and all costs and
expenses of compliance with applicable Environmental Laws, including
any such compliance directed to each Participant, Indenture Trustee or
Lessor or to which any of the foregoing may become subject;
(c) not to generate, use, treat, store, Release or dispose of,
or permit the generation, use, treatment, storage, Release or disposal
of Hazardous Materials on the Leased Property, or transport or permit
the transportation of Hazardous Materials to or from the Leased
Property in any quantity or manner which would violate in any material
respect, or give rise to material liability under, any applicable
Environmental Laws; provided that Lessee shall not be in breach of this
covenant if it is complying with reasonable promptness and diligence,
including by way of investigation or remediation, with applicable
Environmental Laws in response to such generation, use, treatment,
storage, Release or disposal;
(d) to conduct or cause to be conducted any investigation,
study, sampling and testing and undertake any Remedial Action with
respect to Hazardous Materials on or from the Leased Property as
required by and in accordance with the requirements of the applicable
Environmental Laws; provided, however, that if such Remedial Action
would include the use of institutional controls or land use
restrictions that would have a material adverse effect on the Fair
Market Value of such Leased Property or that would preclude the use of
such Leased Property in a manner which is substantially similar to its
then current or intended use, Lessor's consent shall be required (which
consent shall not be unreasonably withheld); provided further, however,
that no such consent shall be required for any institutional controls
or use limitations (x) that may apply in the future to the Leased
Property if so identified in Part B of Schedule 4 to the Participation
Agreement, so long as such limitations and controls are not materially
more restrictive than the limitations and controls currently in effect
for the Other Leased Property as identified in Part A of Schedule 4 to
the Participation Agreement (taking into account differences in
applicable state law), or (y) currently in effect for the Leased
Property as identified in Part A of Schedule 4 to the Participation
Agreement;
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(e) (i) Lessee shall promptly notify Lessor, Owner
Participant and Indenture Trustee of (A) any fact, circumstance,
condition, occurrence or Release of Hazardous Materials occurring at or
from the Leased Property relating to any underground storage tank or
otherwise that may be reasonably expected to result in an expense in
excess of $5,000,000 relating to or as a result of noncompliance with
any applicable Environmental Law, such notice to be given no later than
THIRTY (30) days after the condition is discovered by Lessee or such
Release or occurrence takes place, whichever is later, and (B) any
pending or threatened Environmental Claim that may reasonably be
expected to result in an expense in excess of $5,000,000 against Lessee
relating to the Leased Property, such notice to be given no later than
TEN (10) Business Days after Lessee receives written notice that such
Environmental Claim is commenced or threatened. To the extent possible,
all such notices shall describe in reasonable detail the nature of the
Environmental Claim, investigation, condition, incident or occurrence
and Lessee's response thereto.
(ii) Upon the written request of Lessor, Owner
Participant or Indenture Trustee, Lessee shall provide Owner
Participant, Lessor and Indenture Trustee (so long as the Notes remain
outstanding) with copies of all written, non-privileged communications
with any Governmental Authority or third party, or other documents
reasonably requested by the foregoing Persons, relating to the subject
of any notice required under Section 8.3(e)(i).
(iii) Lessee shall provide reports relating to any
Environmental Claim relating to the subject of any notice required
under Section 8.3(e)(i) in such detail as may reasonably requested by
Owner Participant, Lessor or Indenture Trustee. In addition, if any
Release or other condition occurs at the Leased Property that relates
to any underground storage tank or otherwise that may reasonably be
expected to result in an expense in excess of $5,000,000 relating to or
as a result of noncompliance with any applicable Environmental Law or
Environmental Claim, Owner Participant or Lessor may require with
respect to the Leased Property that is the subject of the claim at
Lessee's sole cost and expense, the undertaking of a Phase I
environmental audit and, if such Phase I environmental audit discloses
any environmental condition or conditions that reasonably require a
Phase II environmental audit, a Phase II environmental audit for the
Leased Property. All audits pursuant to this provision shall be
prepared by a consultant that is, and the scope of the audit shall be,
reasonably acceptable to the requesting Person.
(iv) Subject to the terms of Article 17 (other than the
timing limits contained in the last sentence of the first paragraph
thereof), Lessor, Owner Participant, or their respective agents,
employees, contractors or representatives shall have the right, but not
the duty, at its own cost and expense (unless an Event of Default is
continuing in which case such inspection will be at Lessee's cost and
expense), to enter upon the Leased Property during reasonable times and
upon reasonable notice to monitor and inspect any Release of Hazardous
Materials thereon that relates to an underground storage tank or
otherwise that may result in an expense in excess of $5,000,000
relating to or as a result of or any violation of an applicable
Environmental Law, if after being required by applicable Environmental
Law to do so, Lessee fails to (i) contest the allegations surrounding
such
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violations in accordance with the terms hereof or (ii) commence such
investigation, response, removal, corrective action or remediation to
the extent required by applicable Environmental Law promptly thereafter
and to continue diligently to effect such action or contest. In
exercising its rights herein, each such party shall use reasonable
efforts to minimize interference with the Lessee's business but any
such entry shall not constitute an eviction of Lessee, in whole or in
part. If any Governmental Authority shall ever require testing to
ascertain whether there has been a Release or violation of applicable
Environmental Laws, then the costs thereof shall be paid by Lessee;
(f) Lessee acknowledges that asbestos and asbestos-containing materials
may have been used in the construction of the Leased Property. Lessee shall
maintain the Leased Property and cause alterations to be performed to the Leased
Property in compliance with Environmental Law applicable to asbestos; and
(g) Lessee agrees to undertake, promptly and at its own expense,
appropriate Remedial Action regarding the items described in Schedule VIII
hereof; provided, however, that if such Remedial Action would include the use of
institutional controls or land use restrictions that would have a material
adverse effect on the Fair Market Value of such Leased Property or which would
preclude the use of such Leased Property in a manner which is substantially
similar to its then current or intended use, Lessor's consent shall be required
(which consent shall not be unreasonably withheld); provided further, however,
that no such consent shall be required for any institutional controls or use
limitations (x) that may apply in the future to the Leased Property if so
identified in Part B of Schedule 4 to the Participation Agreement, so long as
such limitations and controls are not materially more restrictive than the
limitations and controls currently in effect for the Other Leased Property as
identified in Part A of Schedule 4 to the Participation Agreement (taking into
account differences in applicable state law), or (y) currently in effect for the
Leased Property as identified in Part A of Schedule 4 to the Participation
Agreement.
Section 8.4 Contests. (a) Subject to the terms of Section
8.4(b) of this Lease, during the Term, Lessee may contest the validity or
application of any Applicable Law by appropriate proceedings diligently
conducted in good faith in the name of Lessee, or, if the provisions of any
Applicable Law require that such proceeding be brought by or in the name of
Lessor, with Lessor, in the name of Lessor, or both, without any cost or expense
to Lessor so long as such proceedings shall not interfere with the disposition
of the Leased Property or any part thereof or involve (i) any material risk of
the sale, forfeiture or loss of the Leased Property, (ii) a material risk of
extending the ultimate imposition of such Applicable Law beyond the termination
of the Term, (iii) any risk of criminal liability being imposed on Lessor,
Indenture Trustee or any Participant, or (iv) a material risk of reduction of
the value, utility or remaining useful life (except to an insignificant extent)
of the Leased Property. Any such contest shall be deemed to constitute a
confirmation by Lessee that Lessor, Indenture Trustee and each Participant is
covered by the provisions of Section 16 of the Participation Agreement with
respect to matters being contested.
(b) Subject to Section 8.4(a) and satisfaction of the
following conditions, Lessee, at its sole cost and expense, may contest the
assertion by any Governmental Authority or any other Person of any Applicable
Law affecting all or a portion of the Leased Property:
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(i) with respect to contests so instituted, no Event of
Default under the Lease or the other Operative Agreements has occurred
and is continuing;
(ii) any such contests, once instituted, unless discontinued,
settled or compromised, shall be prosecuted diligently until a final
judgment is obtained; and
(iii) Lessee may only delay compliance with the subject
Applicable Law until the earlier to occur of: (A) a determination by
the applicable judicial or Governmental Authority that the contest is
unsuccessful, which determination is not, or ceases to be, subject to
further appeal, or (B) the discontinuance, settlement or compromise of
such judicial proceeding or proceeding involving or heard by a
Governmental Authority.
Section 8.5 Records and Reports. Lessee shall maintain records
and reports with respect to the Leased Property as required by Applicable Law
and consistent with good industry standards, and shall retain copies thereof for
the period mandated by any such Applicable Law. Such records and reports shall
be made available to Lessor as provided in Article 17 hereof.
Section 8.6 Compliance with Matters of Record and Leases.
Lessee shall comply in all material respects with the covenants, conditions,
restrictions, easements, declarations and other matters of record which affect
title to the Leased Property. To the extent that any interest in the Leased
Property held by Lessor is being held by Lessor under the terms and provisions
of a lease, then Lessee shall comply with the covenants, conditions, terms and
provisions of such lease. Lessee shall use its commercially reasonable efforts
to discharge, release, or otherwise remove the Liens identified on Part A and
Part B-1 of Schedule II hereto as promptly as practicable, but in any event
within five years after the Closing Date. Lessee shall provide to Lessor an
annual written report describing Lessee's efforts to discharge, release, or
otherwise remove the Liens identified on Part A and Part B-1 of Schedule II
hereto; provided, however, that Lessee's failure to provide any such report
shall not constitute a Default or an Event of Default pursuant to the Operative
Agreements. Within 180 days after the fifth anniversary of the Closing Date,
Lessee shall provide Lessor with an indemnification reasonably satisfactory to
Lessor with respect to any Liens identified on Schedule II hereto which have not
been discharged, released, or otherwise removed prior to the return of the
Leased Property to Lessor pursuant to the terms hereof, notwithstanding Lessee's
commercially reasonable efforts to do so as provided herein.
ARTICLE 9
ASSIGNMENT AND SUBLETTING; EXISTING LEASES
------------------------------------------
Section 9.1 [Intentionally Omitted]
Section 9.2 Subletting of Portions of the Leased Property
Without Lessor's Consent. Lessee (and each direct and indirect sublessee
thereof) may sublease and sub-sublease all or any part of the Leased Property to
any Person at any time on such terms and conditions as Lessee (or such direct or
indirect sublessee) may desire in its sole discretion, without the consent of
Lessor; provided, however, that (i) any such sublease or sub-sublease shall be
expressly subject and subordinate to this Lease and shall not release Lessee or
Guarantor from any of their respective obligations or liabilities under this
Lease or the Guarantee, as the case may be, of any nature whatsoever; (ii) no
such sublease or sub-sublease may be entered into if a Material Default has
occurred and is continuing; (iii) any sublessee or sub-sublessee shall not be
bankrupt at the inception of the sublease or sub-sublease and shall be permitted
to use the Leased Property only for Permitted Uses; and (iv) unless consented to
by Lessor (which consent shall be in its sole and absolute discretion) any such
sublease or sub-sublease shall be for a term that does not extend beyond the
Term. Notwithstanding the foregoing, any Existing Sublease shall not be subject
and
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subordinate to this Lease and may, to the extent currently provided under such
Existing Sublease, extend beyond the Term.
Section 9.3 Delivery of Non-disturbance Agreements by Lessor.
(a) If, at the time that a subordination, non-disturbance and attornment
agreement is requested by Lessee with respect to a sublease or sub-sublease to a
third party (which is not an Affiliate of Lessee or Guarantor) as permitted
under Section 9.2 hereof (i) Guarantor's Credit Rating shall satisfy the Minimum
Credit Criteria, (ii) the rental under the sublease or the sub-sublease
(computed in a manner consistent with respect to the amounts covered in clause
(vi) below) shall not be less than fair market rental on a per square foot basis
for tenants with a Credit Rating comparable to the sublessee or sub-sublessee
and for lease terms comparable to the sublease or sub-sublease, in each case as
reasonably determined by Lessee, (iii) unless Lessor shall have otherwise
consented in its sole and absolute discretion as provided in Section 9.2(iv)
above, the term of the sublease or sub-sublease does not extend beyond one day
prior to the Scheduled Expiration Date of this Lease or any expiration date of a
Renewal Term then in effect, as applicable, (iv) the sublease or sub-sublease
shall be no less restrictive with respect to the Leased Property's alteration,
use, maintenance, compliance with laws and inspection rights and obligations
than this Lease, (v) if such sublease or sub-sublease is for all of the Leased
Property, the surrender of possession conditions in such sublease or
sub-sublease (other than the requirement for an Environmental Report) shall be
as restrictive as the surrender of possession conditions in this Lease, and (vi)
the sublease or sub-sublease will contain provisions that obligate the sublessee
to pay a pro rata share of operating expenses of the Leased Property unless such
amount is reflected in the rental thereof, Lessor shall execute and deliver a
subordination, non-disturbance and attornment agreement in the form attached to
this Lease as Exhibit A (a "Non-disturbance Agreement") with respect to such
sublease or sub-sublease within TEN (10) Business Days after request by Lessee
so long as (x) Lessee pays all reasonable costs and expenses (including
reasonable attorneys' fees and expenses) in connection therewith, (y) no
Material Default has then occurred and is continuing and (z) the form of such
sublease or sub-sublease has been approved or deemed approved pursuant to
Section 9.4 of this Lease.
(b) If, at the time that a Non-disturbance Agreement is
requested by Lessee, Guarantor's Credit Rating shall not satisfy the Minimum
Credit Criteria, Lessor shall execute and deliver a Non-disturbance Agreement
with respect to a sublease or sub-sublease to a third party within THIRTY (30)
days after request by Lessee if the sublessee or sub-sublessee has a Credit
Rating that shall satisfy the Minimum Credit Criteria or an equivalent rating
from another nationally recognized rating agency, and the requirements of
Section 9.3(a) hereof (other than clause (i) thereof) are met.
(c) Should Lessee or any of its Affiliates acquire the
sublessee's interest under a Senior Sublease, Lessee agrees to, or agrees to
cause such Affiliate to, subordinate such interest to this Lease and to the
Liens of the Security Documents.
Section 9.4 Non-disturbance Agreement. With respect to each
request by Lessee for a Non-disturbance Agreement, Lessee shall deliver to
Lessor and Owner Participant the final form of sublease or sub-sublease together
with a certificate from Lessee outlining in reasonably satisfactory detail
whether or not Lessor is obligated under this Article 9 to deliver a
Non-distur-
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bance Agreement and the reasons therefor. Within FIVE (5) Business Days after
receipt of such certificate and form of sublease or sub-sublease (except with
respect to a sublease or sub-sublease that extends beyond the Term), Lessor
shall deliver its approval or disapproval of the form of such sublease or
sub-sublease, which approval shall not be unreasonably withheld so long as all
of the conditions specified above are satisfied, and Lessor shall be deemed to
have approved the form of such sublease or such sub-sublease if it shall not
have delivered any approval or disapproval within such period. If the term of
such sublease or sub-sublease shall extend beyond the Term, Lessor shall have 30
days to deliver its approval or disapproval of the form of such sublease or
sub-sublease and shall not be deemed to have approved such form if it shall not
have responded within such period. If Lessor disapproves of the form of sublease
or sub-sublease, Lessor shall deliver to Lessee, in reasonable detail, the
reasons for its disapproval.
Section 9.5 Assignment of Lease. Subject to the delivery of
the opinion required in Section 9.6 of this Lease and so long as no Material
Default has occurred and is continuing, Lessee may assign its interest in this
Lease without the consent or approval of Lessor.
Section 9.6 Continued Obligation of Lessee. No assignment or
sublease permitted hereunder shall relieve Lessee of any of its obligations,
liabilities or duties hereunder and under the other Operative Agreements, which
shall be and remain those of a principal and not a guarantor. On or prior to the
effective date of any assignment of this Lease, Lessee covenants and agrees that
it shall deliver an opinion of counsel to Lessor in form and content reasonably
satisfactory to Lessor that each of Lessee and Guarantor has not been relieved
or released from its respective obligations, liabilities and duties hereunder
and under the other Operative Agreements to which Lessee or Guarantor, as
applicable, is a party by reason of such assignment, together with an estoppel
certificate from Lessee in the form described in Section 21.4 of this Lease with
the additional representation that Lessee has no off-sets or defenses with
respect to Lessee's obligations under the Lease or any of the other Operative
Agreements.
Section 9.7 Assignment of Subleases. (a) Existing Subleases
are hereby assigned by Lessor to Lessee for the Term, and Lessee assumes and
agrees to perform each and every obligation of the landlord with respect to the
Existing Subleases affecting the Leased Property, whether such obligations
accrued prior to the Closing Date or accrue during the period from and after the
Closing Date to the date such Existing Subleases are absolutely reassigned to
Lessor as provided in Section 9.7(b) hereof.
(b) Upon the expiration of the Term in circumstances in which
Lessee is returning the Leased Property to Lessor in accordance with Article 13
hereof, (1) each Existing Sublease and (2) each and every sublease that Lessee
may enter into with respect to the Leased Property from time to time after the
Closing Date (the "Assigned Subleases") in the Leased Property shall
automatically and without further action of Lessor or Lessee be assigned to
Lessor, in all cases free and clear of all Liens except Lessor's Liens and Owner
Participant's Liens. Upon Lessor's reasonable request, Lessee shall execute an
assignment of leases in form and substance reasonably satisfactory to Lessor
confirming the foregoing.
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ARTICLE 10
MAINTENANCE AND REPAIRS
-----------------------
Section 10.1 Maintenance and Repairs. Lessee, at its sole cost
and expense, shall maintain the Leased Property and make all repairs,
restorations, renewals and replacements to the Leased Property, including,
without limitation, the heating, ventilating, air conditioning, mechanical,
electrical, and plumbing systems, roof, walls and foundations, and the fixtures
and appurtenances to the Leased Property as and when needed to maintain the
Leased Property in the quality and condition in effect at the inception of this
Lease, ordinary wear and tear excepted, and in accordance with the customary
practice of Lessee and the U.S. operating subsidiaries of Guarantor for similar
property occupied and operated by them regardless of whether the repairs,
restorations, renewals and replacements are structural or nonstructural,
ordinary or extraordinary, foreseeable or unforeseeable, capital or noncapital,
or the fault or not the fault of Lessee, its agents, employees, invitees,
visitors and contractors. Lessee shall make all repairs, restorations, renewals
and replacements in compliance with Applicable Law including, without
limitation, all Environmental Laws.
Section 10.2 Repairs. Lessee shall, at its sole cost and
expense, promptly repair in a good and workmanlike manner any items listed on
Schedule 5 to the Participation Agreement as in effect on the date hereof.
ARTICLE 11
ALTERATIONS; ADDITIONS
----------------------
Section 11.1 Alterations; Additions. (a) During the Term,
Lessee shall make all alterations, renovations, modifications, additions or
improvements to the Improvements, including, without limitation, construction of
new facilities with respect thereto and expansion and rearrangement of the
Improvements ("Alterations"), which are required by Applicable Law. In addition,
Lessee may make any Alterations (which may include, without limitation,
destruction or demolition of existing Improvements) without Lessor's consent,
provided that:
(i) the cost of such Alterations (including any related
destruction or demolition) is reasonably expected to be less than 15%
of Lessor's Purchase Price;
(ii) no Material Default has occurred and is continuing; and
(iii) such Alterations do not decrease (other than to a de
minimis extent) the Fair Market Value, expected residual value,
condition, utility or remaining economic useful life of the Leased
Property below the Fair Market Value, expected residual value,
condition, utility or remaining economic useful life of the Leased
Property immediately prior to the Alterations, assuming the Leased
Property was in the condition required by this Lease, or cause the
Leased Property to be characterized as "limited use property" as
defined in Revenue Procedure 76-30.
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(b) Lessee may also make Alterations (which may include,
without limitation, destruction or demolition of existing Improvements), the
cost of which are reasonably expected to be equal to or greater than 15% of
Lessor's Purchase Price, without Lessor's consent (including, without
limitation, Alterations which involve a complete reconstruction of a facility or
any part thereof which is included as part of the Leased Property), provided
that:
(i) such Alterations do not decrease (other than to a de
minimis extent) the Fair Market Value, expected residual value,
condition, utility or remaining economic useful life of the Leased
Property below the Fair Market Value, expected residual value ,
condition, utility or remaining economic useful life of the Leased
Property immediately prior to the Alterations (assuming the Leased
Property was in the condition required by this Lease) or cause the
Leased Property to be characterized as "limited use property" as
defined in Revenue Procedure 76-30;
(ii) Lessee has delivered to Lessor the plans and specifications
relating to the proposed Alteration and an Officer's Certificate which
includes an estimate of the cost of such Alterations and states that
such Alterations can be completed prior to the earlier of (A) three
years after commencement of such Alterations and (B) ONE HUNDRED EIGHTY
(180) days prior to the expiration of the Term; and
(iii) either Guarantor's Credit Rating shall satisfy the Minimum
Credit Criteria or Lessee shall have delivered to Lessor a letter of
credit or other form of credit support from an entity which meets the
Minimum Credit Criteria, which credit support shall be in form
reasonably satisfactory to Lessor and in an amount equal to not less
than 110% of the cost of such Alterations, as indicated in the
Officer's Certificate delivered pursuant to clause (ii).
(c) It is understood and agreed that, so long as no Material
Default shall have occurred and be continuing, Lessee shall have the right to
construct on the Site, without the consent or approval of Lessor, additional
buildings and other facilities (including, without limitation, gas station
facilities and/or improvements) which are not an integral part of the
Improvements ("Additions"), subject to the execution and delivery of easement
agreements and/or shared facilities agreements between Lessee and Lessor that
meet the requirements of Section 18(t) of the Participation Agreement and which
agreements do not, in the reasonable judgment of Lessor, decrease (other than to
a de minimis extent) the Fair Market Value, expected residual value, condition,
utility or remaining economic useful life of the Leased Property, assuming the
Leased Property was in the condition required by this Lease, or adversely affect
Lessor's or Owner Participant's rights and interests under this Lease and the
other Operative Agreements.
(d) If Lessee shall make or cause to be made any Alterations
or Additions, it shall do so in a good and workmanlike manner and in compliance
with Applicable Law (subject to Lessee's contest rights as provided herein), and
such Alterations or Additions, as the case may be, shall be free of Liens other
than Permitted Liens. Whenever Lessee is making Alterations, Lessee shall
commence such Alterations promptly and, once commenced, shall diligently pursue
the completion of such Alterations and, in any event, shall complete such
Alterations prior to the date
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occurring ONE HUNDRED EIGHTY (180) days before the end of the Term or within
THREE (3) years after commencement of such Alterations, whichever is earlier.
Section 11.2 Permanent and Non-Severable. All Alterations not
required by Applicable Law, which are severable from the Leased Property, which
have not been financed by a Supplemental Financing or an Additional Equity
Investment, and which may be removed therefrom without (a) decreasing (other
than to a de minimis extent) the Fair Market Value, expected residual value or
remaining economic useful life of the Leased Property from the Fair Market
Value, expected residual value and remaining economic useful life that the
Leased Property would have had if such Alterations had never been made and (b)
causing material damage to the Leased Property (after taking into account the
repairs which would be required to return the Leased Property to its condition
prior to the time that such Alterations were made (provided that Lessee makes
all such repairs)) ("Severable Alterations") shall remain the property of
Lessee. All Additions shall remain the property of Lessee. If requested by
Lessor at least ONE HUNDRED EIGHTY (180) days prior to the end of the Term, all
Severable Alterations and all Additions shall, and otherwise may, be removed at
the end of the Term in accordance with Section 11.5 of this Lease. Any such
Severable Alterations or Additions which Lessor has not requested be removed and
which Lessee elects to leave in place at the end of the Term shall, at such
time, become Lessor's property and title thereto shall vest in Lessor without
compensation to Lessee. All Alterations which are not Severable Alterations will
become part of the Leased Property and title thereto will automatically vest in
Lessor when made without compensation to Lessee, and will thereupon become part
of the Leased Property subject to this Lease. On the Expiration Date at the
request of Lessor, Lessee shall deliver a deed and xxxx of sale to Lessor
covering all Alterations which are not Severable Alterations and all other
Alterations and Additions which Lessee is not removing from the Leased Property,
in each case, appropriate to transfer title to Lessor, free and clear of all
Liens other than Permitted Exceptions, Lessor's Liens and Participant Liens.
Section 11.3 Financing of Alterations. The financing of any
Alterations shall comply with Section 15(a) of the Participation Agreement. In
connection with any such permitted financing Lessor shall, subject to the
provisions of Sections 15(a) and 18(t) of the Participation Agreement, provide
Lessee with such easements and other rights as may be reasonably required to
accomplish such financing.
Section 11.4 Cooperation. If any Applicable Law requires that
Lessor submit a request for governmental approvals and permits in connection
with any Alterations or Additions, Lessor shall subject to the terms and
conditions of Section 18(t) of the Participation Agreement cooperate in
obtaining all necessary governmental permits and approvals to complete any such
Alterations or Additions without any cost or expense to Lessor, Indenture
Trustee or any Participant.
Section 11.5 Obligations with Respect to Alterations and
Additions at End of Term. At the end of the Term, if requested by Lessor
pursuant to Section 11.2 hereof, Lessee shall remove all Additions and all
Alterations which are not owned by Lessor and as to which Lessor has not
consented to their remaining on the Leased Property. Lessee shall diligently
complete the removal of such Additions and Alterations (including any portion
thereof below
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ground level) in a good and workmanlike manner in compliance with Applicable
Law, and shall restore the land on which such Alterations or Additions were
constructed to grade.
Section 11.6 Integration of Leased Property. Lessee shall have
the right during the Term to integrate the Leased Property with land which is
adjacent to or in the vicinity of the Leased Property for the purpose of
providing such access and other easement and/or use rights on, over and/or under
the Site and such other land as Lessee considers necessary or appropriate for
its business purposes, and subject to the terms and conditions of Section 18(t)
of the Participation Agreement (or conditions substantially equivalent thereto
given the particular circumstances) Lessor agrees to execute such agreements
relating to such access, easement and/or use rights as Lessee shall reasonably
request.
ARTICLE 12
LIENS
-----
Section 12.1 Liens. At no time during the Term shall Lessee,
directly or indirectly, create, incur, assume or suffer to exist any Liens on or
with respect to the Leased Property, or any component thereof, right or title
thereto or any interest or estate therein or in this Lease, except for Permitted
Liens. Lessee will promptly remove and discharge any Liens (other than Permitted
Liens) upon the Leased Property or any Rent payable hereunder which arises for
any reason, including all Liens which arise out of the use, occupancy,
construction, repair or rebuilding of the Leased Property or by reason of labor
or materials furnished or claimed to have been furnished to Lessee or for the
Leased Property. If any Lien (other than any Permitted Lien) is filed or
recorded against any portion of the Leased Property, Rent, or any part thereof,
Lessee will cause such Lien to be discharged of record or bonded (to the extent
permitted by Applicable Law) or otherwise rendered void within THIRTY (30) days
after notice thereof; provided, however, that Lessee shall not be required to so
discharge or bond any such Lien while the same is being contested in good faith
by appropriate proceedings diligently prosecuted so long as such proceedings
shall not involve (i) any material risk of the sale, forfeiture or loss of the
Leased Property or (ii) a material risk of reduction of the value, utility or
remaining useful life (except to an insignificant extent) of the Leased
Property, and shall not interfere with the disposition, of the Leased Property
or any part thereof. If a final judgment, after the exhaustion of all appeals by
Lessee, establishes the validity or existence of a Lien (other than a Permitted
Lien) for any amount, Lessee shall promptly satisfy such judgment and release
such Lien of record. If Lessee fails to pay any charge for which a Lien (other
than a Permitted Lien) has been filed or recorded, as the case may be, Lessor,
at its option, after THIRTY (30) days' prior written notice to Lessee, may pay
the Lien and related costs and interest, and the amount so paid, together with
reasonable attorneys' fees and other reasonable expenses incurred by Lessor in
connection therewith, will be immediately due from Lessee to Lessor, together
with interest at a rate equal to the Late Rate from the date any such payment
was made by Lessor until Lessor is paid in full with such interest, all as
Additional Rent. Nothing contained in this Lease is intended to be or should be
deemed to be the consent or agreement of Lessor to the performance by any
contractor, laborer, materialman 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 Leased Property or any part thereof or to
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subject Lessor's interest therein to liability under any mechanics' or other
lien under Applicable Law. If either Lessor or Lessee receives notice that a
Lien has been filed or is about to be filed against any portion of the Leased
Property, or any action affecting title to the Leased Property has been
commenced on account of work done for Lessee or materials furnished to Lessee,
Lessor or Lessee, as the case may be, shall promptly give the other party
written notice of such Lien or action.
ARTICLE 13
END OF TERM
-----------
Section 13.1 Surrender; Environmental Compliance. (a) On the
Expiration Date (which for avoidance of doubt shall include the date this Lease
terminates pursuant to Section 20 hereof), Lessee shall surrender the Leased
Property in good order and condition, ordinary wear and tear excepted free and
clear of all Liens other than Permitted Exceptions (excluding those Liens which
are required to be removed in accordance with the provisions of Section 8.6
hereof), Lessor's Liens and Participant's Liens, in compliance with all
provisions of Articles 8, 10 and 11 hereof. In addition, prior to the Expiration
Date, Lessee, at its own expense, shall provide Lessor with (i) a valid
certificate of occupancy for the Leased Property and (ii) an Environmental
Report (addressed to Lessor) dated not more than ONE HUNDRED TWENTY (120) days
and not less than THIRTY (30) days prior to the Expiration Date, and if such
Environmental Report (or Lessor in good faith) identifies Remedial Action that
is required by applicable Environmental Laws then in effect with respect to the
Leased Property or any part thereof, Lessee, at its sole expense, will promptly
undertake and complete such required Remedial Action in compliance with such
Environmental Laws then in effect; provided, however, that if such Remedial
Action would include the use of institutional controls or land use restrictions
that would have a material adverse effect on the Fair Market Value of such
Leased Property or which would preclude the use of such Leased Property in a
manner which is substantially similar to its then current or intended use,
Lessor's consent shall be required (which consent shall not be unreasonably
withheld); and provided further that no such consent shall be required for
institutional controls already in place as of the date hereof or as otherwise
have been put into effect for the Leased Property without violating this Lease.
To the extent any Remedial Action is required to be performed by Lessee after
the Expiration Date, Lessor shall, subject to Section 18(t) of the Participation
Agreement, provide, or cause to be provided to Lessee, all such easements,
licenses and rights of way as may be reasonably necessary to enable Lessee to
perform such work.
(b) In the event this Lease shall have terminated by reason of
the occurrence of an Event of Default or, if an Event of Default shall have
occurred hereunder by reason of Lessee's failure or refusal to perform its
obligations under Section 13.1(a), Lessor may engage an environmental
consultant, satisfactory to it, to prepare an Environmental Report of the Leased
Property (which shall be addressed to Lessor). Lessee shall take any Remedial
Action as is recommended by such Environmental Report or is otherwise reasonably
necessary to remediate the Leased Property in accordance with applicable
Environmental Laws consistent with its obligations under Section 13.1(a). Lessee
shall pay, as Additional Rent hereunder, the costs and expenses for such
Environmental Report within THIRTY (30) days of delivery to Lessee of an invoice
therefor.
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ARTICLE 14
DAMAGE OR DESTRUCTION
---------------------
Section 14.1 Notice of Destruction During the Lease Term;
Event of Loss. (a) If at any time during the Lease Term the Improvements
included in the Leased Property are damaged or destroyed by fire or other
casualty and such damage or destruction affects Improvements constituting more
than the lesser of 25% of Lessor's Purchase Price of the Leased Property or
$5,000,000, Lessee shall promptly notify Lessor, each Participant and Indenture
Trustee. Lessee shall furnish to Lessor, each Participant and Indenture Trustee
within NINETY (90) days following such damage or destruction an Officer's
Certificate stating that (i) the Leased Property will be replaced within ONE
HUNDRED EIGHTY (180) days after such notice in accordance with Section 5.2 or
(ii) Lessee elects to comply with the provisions of Section 14.2 hereof relating
to restoration or replacement of the Leased Property affected by such damage or
destruction or (iii) Lessee has determined in good faith that such damage or
destruction constitutes an Event of Loss, is declaring such damage or
destruction an Event of Loss and will cause a termination of this Lease on the
first Basic Rent Payment Date which is at least ONE HUNDRED EIGHTY (180) days
after such damage or destruction (the "Casualty Termination Date"), it being
agreed that if Lessee shall not have made the election referred to in clause (i)
or (ii) within such NINETY (90) day period, Lessee shall be deemed to have made
the election referred to in clause (iii).
(b) If Lessee makes or is deemed to have made the election
provided in Section 14.1(a)(iii), on the Casualty Termination Date (i) Lessee
shall pay to Lessor (A) the Stipulated Loss Value as of the Stipulated Loss
Value Determination Date that is the Casualty Termination Date, (B) any Basic
Rent due prior to and unpaid as of the Casualty Termination Date and accrued and
unpaid Additional Rent to and including the Casualty Termination Date, and (C)
all expenses of Lessor and the Participants under this Article 14 including,
without limitation, reasonable attorneys' fees and expenses, as Additional Rent,
(ii) Lessor shall convey or cause to be conveyed all of Lessor's interest in the
Leased Property (which for this purpose shall include, without limitation, all
property damage insurance proceeds (other than that paid from insurance
maintained by Lessor, any Participant or Indenture Trustee in accordance with
Section 7.6 of this Lease) and all other rights applicable to Lessor's interest
in the Leased Property, other than the right to receive Excepted Payments in
respect thereof) to Lessee in accordance with and subject to the provisions of
Section 22.1 of this Lease, and (iii) this Lease and all obligations of Lessee
not theretofore accrued hereunder shall terminate (except for the obligations of
Lessee which expressly survive the Expiration Date).
Section 14.2 Repair and Restoration Obligation in Case of
Partial Destruction. (a) If Lessee makes the election provided in Section
14.1(a)(ii) hereof, Lessee shall promptly commence and diligently prosecute to
completion the repair and restoration or replacement of the portions of the
Leased Property affected by the damage or destruction (whether or not insurance
proceeds are available) in accordance with all Applicable Law so as to complete
the repair and restoration or replacement within the time period referred to in
paragraph (b) of this Section 14.2, all at Lessee's expense, so as to make the
Fair Market Value, expected residual value, condition, utility and remaining
economic useful life of the Leased Property after such repairs and restorations
or replacement at least equal to the Fair Market Value, expected residual value,
condition, utility and remaining economic useful life of the Leased Property
existing immediately prior to such damage or destruction (provided that if the
Leased Property is returned to the quality and condition it was in prior to such
damage or destruction (assuming for this purpose that Lessee was maintaining the
Leased Property in accordance with Section 10 hereof), it shall be deemed to
have a Fair Market Value, expected residual value, condition, utility and useful
life at least equal to the Fair Market Value, expected residual value,
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condition, utility and useful life of the Leased Property existing prior to such
damage or destruction). The quality of materials and workmanship of such repairs
and restoration or replacement shall be in accordance with the provisions of
Article 10 of this Lease. Such repairs and rebuilding or replacement shall be
completed free and clear of Liens other than Permitted Liens. Provided no
Material Default shall have occurred and be continuing, (i) all insurance
proceeds in respect of damage or destruction in an amount of $10,000,000 or less
(including all self-insurance amounts) shall be paid directly to Lessee, which
shall apply such proceeds to the repairing or rebuilding of the Leased Property
and (ii) all amounts (including amounts with respect to which Lessee is
self-insured as provided in Section 7.5) of insurance proceeds in respect of
damage or destruction which exceed $10,000,000 shall be paid to Lessor (or to
Indenture Trustee if the Liens of the Security Documents have not been
discharged and released), subject to release to Lessee upon compliance with the
conditions set forth in paragraph (c) of this Section 14.2. If a Material
Default shall have occurred and be continuing, all insurance proceeds (and
self-insurance amounts in accordance with Section 7.5 hereof) shall be paid to
Lessor (or, to Indenture Trustee, if the Liens of the Security Documents have
not been discharged and released) for application to all reasonable expenses of
Lessor and Indenture Trustee under this Section 14.2 (including, without
limitation, all reasonable attorneys' fees and expenses) and the cost of repair
or rebuilding as and when the same is completed by Lessee or, at Lessor's
option, such proceeds shall be applied to pay Rent hereunder, but the
application of such proceeds to Rent shall in no event affect or offset Lessee's
obligation to repair and restore the Leased Property as provided herein. To the
extent that there are any excess property damage insurance proceeds, such
proceeds shall be the sole and exclusive property of Lessee unless a Material
Default shall have occurred and be continuing under this Lease, in which case
such proceeds shall be delivered to Lessor (or to Indenture Trustee if the Liens
of the Security Documents have not been discharged and released) and shall be
retained as security for Lessee's obligations hereunder.
(b) The repair and restoration referred to in paragraph (a) of
this Section 14.2 shall be completed within THREE (3) years following the
election by Lessee described in Section 14.1(a)(ii) hereof, subject to extension
for delays attributable to strikes, lockouts, acts of God, embargoes,
governmental restrictions and other causes beyond Lessee's reasonable control
(other than inability to make payment), but in all cases such repair and
restoration shall be completed by the end of the Term. If Lessee fails to
complete such repair and restoration within the time period provided in this
paragraph, such failure shall be deemed an Event of Loss as of such third year
anniversary, as such date may be extended pursuant to this paragraph (b), with
respect to such damage or destruction and on or prior to such third anniversary
Lessee may replace the Leased Property in accordance with Section 5.2 or the
Casualty Termination Date shall be the first Basic Rent Payment Date occurring
at least NINETY (90) days after such third anniversary and the other provisions
of Section 14.1 hereof shall apply.
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(c) So long as no Material Default shall have occurred and be
continuing, any insurance proceeds in respect of property damage or destruction
being held by Lessor (or Indenture Trustee) shall be paid to Lessee from time to
time upon written request of Lessee and upon receipt by Lessor, each Participant
and Indenture Trustee (if the Liens of the Security Documents have not been
discharged and released) of a certificate of Lessee (i) showing in reasonable
detail the cost of repairing, restoring or replacing any damaged or destroyed
portions of the Improvements, (ii) stating that such damaged or destroyed
portions of the Improvements have been repaired, restored or replaced to the
standards, if any, required by Section 14.2(a), (iii) stating further that no
Material Default has occurred and is continuing, (iv) stating that all proceeds
previously paid to Lessee with respect to such property damage or destruction
have been utilized in such repair, restoration or replacement and (v) stating
that the proceeds then held by the Indenture Trustee are sufficient to complete
such repair, or if not, that Lessee will make available funds which, together
with such proceeds, shall be sufficient to complete such repair. If any such
proceeds are paid with respect to any damaged or destroyed portions, the same
shall be applied to reimburse Lessee for the cost thereof and the balance, if
any, shall be retained by Lessee. If any payment payable to Lessee under this
Section 14.2(c) is received by Lessor (or Indenture Trustee), it shall promptly
be paid over to Lessee (and Lessor shall thereafter use reasonable efforts to
cause the Person obligated to pay the same to make payment directly to Lessee).
Except as specified herein, Lessee shall be free to apply such payments for such
purposes as it shall deem appropriate.
ARTICLE 15
CONDEMNATION
------------
Section 15.1 Notice of Total Taking During the Term; Lessee
Obligations. (a) Lessee shall promptly notify Lessor, each Participant and
Indenture Trustee of any event or occurrence which could result in a Total
Taking, and, within THIRTY (30) days after the determination has been made that
a Total Taking will occur or has occurred, shall deliver an Officer's
Certificate to such effect and stating (i) that the Leased Property will be
replaced within ONE HUNDRED EIGHTY (180) days after such notice in accordance
with Section 5.2 or (ii) that this Lease will be terminated on the first Basic
Rent Payment Date which is at least NINETY (90) days after the date of such
Officer's Certificate (the "Taking Termination Date").
(b) Unless Lessee has replaced the Leased Property pursuant to
an election referred to in clause (i) in Section 15.1(a) above, on the Taking
Termination Date (i) Lessee shall pay to Lessor (A) the Stipulated Loss Value as
of the Stipulated Loss Value Determination Date that is the Taking Termination
Date, (B) all expenses of Lessor under this Section 15.1 including, without
limitation, reasonable attorneys' fees and expenses as Additional Rent (unless
such expenses have been separately paid by Lessee), and (C) any Basic Rent due
prior to and unpaid as of the Taking Termination Date and all accrued and unpaid
Additional Rent to and including the Taking Termination Date, and (ii) this
Lease and all obligations of Lessee not theretofore accrued hereunder shall
terminate (except for the obligations of Lessee which expressly survive the
Expiration Date). To the extent that Lessee has made payment as provided in
clause (i) above, it shall be entitled to receive from Lessor such portion of
any condemnation award and other
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consideration payable in connection with such taking as shall be attributable to
Lessee's interest in the Leased Property.
Section 15.2 Partial Taking. In case of a Taking other than a
Total Taking (a "Partial Taking") during the Lease Term, Lessee shall give
prompt notice thereof to Lessor, Indenture Trustee and the Participants and
Lessee shall have the following options: (1) to the extent the Taking relates to
an Improvement, Lessee shall have the right, at its sole cost and expense, to
construct a replacement Improvement on the Site which has a Fair Market Value,
expected residual value, condition, utility and remaining economic useful life
at least equal to the Improvement which is the subject of the Taking, (2) to
replace the Leased Property within ONE HUNDRED EIGHTY (180) days after such
notice in accordance with Section 5.2 or (3) to terminate this Lease with
respect to that part of the Leased Property subject to the Partial Taking on the
date title thereto vests in the condemning authority responsible for the Taking,
provided that if the option referred to in clause (3) is elected, at its cost,
Lessee shall restore so much of the Leased Property as remains to good condition
and repair, in compliance with Applicable Law. In each case, Lessee shall
continue to remain liable for the performance in full of all of its obligations
under this Lease, including, without limitation, the obligation to pay in full
Rent, Stipulated Loss Value, and all other amounts due and owing under this
Lease without any reduction, abatement or limitation. The option referred to in
clause (1) must be elected prior to the date that title vests in the condemning
authority responsible for the Taking, and shall be accompanied by an Officer's
Certificate of Lessee with respect to the cost of construction of the
replacement Improvement and the estimated time for completion thereof. Any
condemnation proceeds attributable to the portion of the Leased Property subject
to the Partial Taking shall be paid to Lessee for application to all expenses of
Lessor, Lessee, the Participants and Indenture Trustee (if the Loan is
outstanding and the Liens of the Security Documents have not been discharged and
released) under this Section 15.2 (including, without limitation, reasonable
attorneys' fees and expenses) and the cost of construction as described in
clause (1), the cost of replacement as described in clause (2) or the cost of
restoration as described in clause (3) of the first sentence of this Section
15.2. To the extent that there are any excess condemnation awards after
application as provided in the preceding sentence of this Section 15.2 (the
"Excess Partial Condemnation Proceeds"), such excess shall be paid to Lessee and
Lessor, as their interests may appear.
Section 15.3 Temporary Taking. In the case of any
condemnation, confiscation or seizure of use or possession of the Leased
Property which does not constitute a Total Taking or a Partial Taking (a
"Temporary Taking"), this Lease shall remain in full force and effect, there
shall be no adjustment of Rent and, provided that no Material Default has
occurred and is continuing, Lessee shall be entitled to the entire condemnation
award and other consideration resulting from such Temporary Taking to the extent
attributable to any period during the Term, and Lessor shall be entitled to all
such amounts attributable to any period after the Term. If any Material Default
shall have occurred and be continuing, such proceeds shall be delivered to
Lessor (or to Indenture Trustee if the Liens of the Security Documents have not
been discharged and released) and shall be retained as additional security for
Lessee's obligations hereunder.
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ARTICLE 16
COLLATERAL ASSIGNMENT BY LESSOR
Section 16.1 Collateral Assignment by Lessor. Pursuant to the
Security Documents with respect to the Leased Property, Lessor has, among other
things, collaterally assigned its right, title and interest hereunder to
Indenture Trustee and granted a first Lien on Lessor's interest in the Leased
Property to Indenture Trustee all upon the terms and conditions set forth in the
Security Documents and, pursuant to Section 9(b)(6) of the Participation
Agreement, Lessee hereby consents to such assignment and grant of Lien.
Section 16.2 Rights of Assignees. Any assignee of Lessor
permitted under Section 5(b)(4) of the Participation Agreement shall, except as
otherwise agreed by Lessor and such assignee, have all the rights, powers,
privileges and remedies of Lessor hereunder. Lessee acknowledges and agrees that
it has received written notice of the collateral assignment referred to in
Section 16.1 hereof pursuant to the Security Documents and, accordingly, Lessee
shall make payments of Basic Rent and Additional Rent (other than Excepted
Payments) due hereunder to Indenture Trustee, to the extent specified in the
Security Documents and Section 6.4 hereof, and such payments shall discharge the
obligation of Lessee to Lessor hereunder to the extent of such payments.
Section 16.3 Lease Superior. This Lease and Lessee's rights
hereunder are and shall continue to be superior to and have priority over any
lease (other than Existing Leases), mortgage, indenture, deed of trust or other
Lien, together with any renewals, extensions, modifications, consolidations and
replacements of such encumbrance, hereafter affecting or placed, charged or
enforced against all or any portion of the Leased Property or any interest of
Lessor in it or Lessor's interest in this Lease and the leasehold estate created
by this Lease (except to the extent that Lessee and the holder of any of the
foregoing enter into an agreement or instrument which expressly provides that
this Lease is subject and subordinate to it).
Section 16.4 Original Lease. 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 "Counterpart No. 1" that contains the receipt therefor
executed by Indenture Trustee on or following the signature page thereof.
ARTICLE 17
ENTRY ON LEASED PROPERTY; INSPECTION OF RECORDS
-----------------------------------------------
Section 17.1 Entry on Leased Property. Lessor, each
Participant and Indenture Trustee, their agents, employees and contractors, at
their own expense, or after an Event of Default has occurred and is continuing
at Lessee's expense, may enter the Leased Property (to be accompanied by a
designated representative of Lessee) during normal business hours and upon not
less than FIVE (5) Business Days' prior notice to conduct inspections of the
Leased Property, or exhibit the Leased Property to bona fide prospective
purchasers or lenders, excluding desig-
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nated secured areas. Other than during a period when an Event of Default shall
have occurred and be continuing or during the TWELVE (12) month period prior to
the expiration of the Term of the Lease, such inspections shall not be made
during the periods from November 1 in any year through January 31 in the
following year or from the second Saturday before Easter Sunday in any year
through the second Saturday following Easter in that year, and shall be limited
to no greater than once per calendar year.
Lessee waives any claim for damages for any injury or
inconvenience to or interference with Lessee's business or any loss of occupancy
or quiet enjoyment of the Leased Property occasioned by such entry; except if
the claim arises out of the gross negligence or willful misconduct of such
parties or their respective agents or contractors in connection with such entry.
In the exercise of its right of entry hereunder, such parties shall use all
reasonable efforts not to interfere with the business operations of Lessee or
any other Person at the Leased Property. In addition, subject to such
confidentiality requirements as Lessee shall deem necessary or appropriate and
upon reasonable prior notice, Lessor, each Participant and Indenture Trustee and
their agents, employees and contractors, shall be entitled to inspect the books
and records relating to the condition, maintenance and operation of the Leased
Property (other than in respect of any businesses operated thereon) at the
offices of Lessee or any Affiliate of Lessee that may be subleasing the Leased
Property and to meet with representatives of Lessee regarding the same, in each
case during normal business hours; provided, however, that nothing in this
Agreement shall require Lessee to disclose any of its Tax returns or Tax
calculations.
ARTICLE 18
QUIET ENJOYMENT
---------------
Section 18.1 Quiet Enjoyment. (a) So long as no Event of
Default has occurred and is continuing, Lessee shall have and be entitled to,
and neither Lessor nor anyone claiming by, through or under Lessor shall
interfere with, the peaceful and quiet possession and enjoyment of the Leased
Property by Lessee during the Term of this Lease.
(b) So long as no event of default has occurred and is
continuing under a Senior Sublease, lessee or sublessee thereunder shall have
and be entitled to, and neither Lessor nor anyone claiming by, through or under
Lessor shall interfere with, the peaceful and quiet possession and enjoyment by
such lessee or sublessee of the portion of the Leased Property to which such
Senior Sublease relates during the term of such Senior Sublease.
ARTICLE 19
DEFAULT
-------
Section 19.1 Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" (whether any such Event
of Default shall be voluntary or involuntary or shall arise or be effected by
operation of Applicable Law or pursuant to or in
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compliance with any requirement of Applicable Law), and shall give rise to the
rights on the part of Lessor described in Article 20 hereof:
(a) (i) failure of Lessee to pay any Basic Rent or any
Additional Rent with respect to additional interest on the Notes
pursuant to Section 1.4(b) of the First Supplemental Indenture when due
and the continuation of such failure for FIVE (5) Business Days;
(ii) failure of Lessee to pay Stipulated Loss Value when due
and the continuation of such failure for FIVE (5) Business Days after
receipt by Lessee and Guarantor of notice of such failure; or
(iii) failure of Lessee to make any other payment of
Additional Rent hereunder and the continuation of such failure for
THIRTY (30) days after receipt by Lessee and Guarantor of notice of
such failure; or
(b) any representation or warranty (relating to the Lessee or
the Leased Property) made by Lessee in this Lease or in any one or more
of the other Operative Agreements (other than the Tax Indemnification
Agreement) to which it is a party or made by Lessee in any certificate
furnished by Lessee pursuant to this Lease or any such other Operative
Agreement was false or inaccurate in any material respect when made,
and which is not cured within THIRTY (30) days after receipt by Lessee
and Guarantor of notice thereof; provided, however, that in the case of
any misrepresentation or breach of warranty that is not capable of
being cured within such THIRTY (30) day period, if Lessee shall
diligently commence to cure such misrepresentation or breach of
warranty within such THIRTY (30) day period and diligently and in good
faith thereafter proceeds to complete curing the same, the time within
which such default may be cured shall be extended for such period as is
reasonably necessary to complete the curing thereof with diligence, but
not in excess of THREE HUNDRED SIXTY (360) days; or
(c) (i) failure by Lessee to maintain the insurance required
to be maintained by Section 7.1 and, except as provided in clause (iii)
of this clause (c), the continuation of such failure for FIVE (5)
Business Days after receipt by Lessee and Guarantor of notice of such
failure, or (ii) failure by Lessee to renew the insurance required to
be maintained by Section 7.1 which insurance expired on its scheduled
expiration date, or (iii) if the credit rating of Guarantor's long-term
unsecured senior debt obligations shall be less than Baa2 by Moody's or
BBB by Standard & Poor's, failure by Lessee to maintain the insurance
required to be maintained by Section 7.1(c); or
(d) default by Lessee in the performance or observance of any
material covenant of Lessee (relating to the Lessee or the Leased
Property) pursuant to this Lease or any of the other Operative
Agreements to which it is a party (other than those covered by clauses
(a), (b) and (c) above) and the continuance of such default for THIRTY
(30) days after receipt by Lessee and Guarantor of notice specifying
such default and requiring that it be remedied; provided, however, that
in the case of any such default which cannot be cured by the payment of
money and which is of a nature that is not capable of being
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cured within such THIRTY (30) day period, if Lessee shall diligently
commence to cure such default within such THIRTY (30) day period and
diligently and in good faith thereafter proceeds to complete curing
such default, the time within which such default may be cured shall be
extended for such period as is reasonably necessary to complete the
curing thereof with diligence, but not in excess of THREE HUNDRED SIXTY
(360) days; or
(e) if any case, proceeding or other action shall be commenced
against Lessee or Guarantor seeking to have an order for relief entered
against Lessee or Guarantor as debtor, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of any
of its debts under any federal or state Applicable Law relating to
bankruptcy, insolvency, reorganization or relief of debtors, or seeking
appointment of a receiver, trustee, custodian or other similar official
for Lessee or for any substantial part of its property, and any such
case, proceeding or other action (i) results in the entry of an order
for relief which is not fully stayed within NINETY (90) days after the
entry thereof or (ii) is not dismissed within such period of NINETY
(90) days; or
(f) if Lessee or Guarantor shall commence any case, proceeding
or other action seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of its debts under any federal
or state Applicable Law relating to bankruptcy, insolvency,
reorganization or relief of debtors or seeking appointment of a
receiver, trustee, custodian or similar official for Lessee or
Guarantor or for any substantial part of its property, or if Lessee or
Guarantor shall consent to any such relief or to the appointment of
such official in any voluntary case or other proceeding commenced
against it, or if Lessee or Guarantor makes a general assignment for
the benefit of creditors, or admits in writing its inability to pay its
debts, or is adjudged insolvent by any federal or state court of
competent jurisdiction, or if an attachment or execution is levied
against all or substantially all of the property of Lessee or
Guarantor; or
(g) if the Guarantee is revoked, canceled, repudiated, deemed
invalid or terminated by Guarantor or the Guarantee is no longer in
full force and effect; or
(h) any representation or warranty made by Guarantor in the
Guarantee or made by Guarantor in any certificate furnished by
Guarantor pursuant to the Guarantee was false or inaccurate in any
material respect when made, and which is not cured within THIRTY (30)
days after receipt by Guarantor of notice thereof; provided, however,
that in the case of any misrepresentation or breach of warranty that is
not capable of being cured within such THIRTY (30) day period, if
Guarantor shall diligently commence to cure such misrepresentation or
breach of warranty within such THIRTY (30) day period and diligently
and in good faith thereafter proceeds to complete curing the same, the
time within which such default may be cured shall be extended for such
period as is reasonably necessary to complete the curing thereof with
diligence, but not in excess of THREE HUNDRED SIXTY (360) days; or
(i) default by Guarantor in the performance or observance of
any material covenant of Guarantor pursuant to the Guarantee (other
than those covered by clauses (a), (c), (g) and (h) above) and the
continuance of such default for THIRTY (30) days after
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receipt by Guarantor of notice specifying such default and requiring
that it be remedied; provided, however, that in the case of any such
default which cannot be cured by the payment of money and which is of a
nature that is not capable of being cured within such THIRTY (30) day
period if Guarantor shall diligently commence to cure such default with
such THIRTY (30) day period and diligently and in good faith thereafter
proceeds to complete curing such default, the time within which such
default may be cured shall be extended for such period as is reasonably
necessary to complete the curing thereof with diligence, but not in
excess of THREE HUNDRED SIXTY (360) days; or
(j) a Payment Event of Default shall have occurred and be
continuing under any of the Other Leases and neither Guarantor nor
Lessee shall have paid the defaulted amount together with interest at
the applicable Late Rate within FIVE (5) Business Days after receipt of
notice of such Event of Default.
ARTICLE 20
RIGHTS UPON DEFAULT
-------------------
Section 20.1 Rights Upon Default. Upon the occurrence and
continuation of any Event of Default, Lessor, at its option, may declare this
Lease to be in default (provided, however, that, in the case of an occurrence of
any Event of Default described in Section 19.1(e) or (f), no such declaration
shall be required) and take one or more of the following actions:
(a) Lessor may take all steps to protect and enforce the
rights of Lessor or the obligations of Lessee hereunder, whether by
action, suit or proceeding at Applicable Law or in equity (for the
specific performance of any covenant, condition or agreement contained
in this Lease, or in aid of the execution of any power herein granted,
or for the enforcement of any other appropriate legal or equitable
remedy) or otherwise as Lessor shall deem advisable to protect and
enforce any rights of Lessor hereunder or to enforce the obligations of
Lessee hereunder;
(b) Lessor may terminate this Lease by giving a written
termination notice to Lessee specifying a date not less than THIRTY
(30) days after the date of such notice on which the Term shall
terminate and on such date the Term and the estate granted hereunder
shall expire and terminate and all rights of Lessee under this Lease
and the Operative Agreements to which it is a party shall cease on the
termination date so specified; or
(c) Lessor, whether or not this Lease shall have been
terminated pursuant to clause (b) of this Section 20.1, shall have the
right to terminate Lessee's right to possession hereunder and to
re-enter and take possession of the Leased Property hereunder or any
part thereof by giving a written notice to Lessee to quit the Leased
Property and surrender possession thereof on a date not less than
THIRTY (30) days after the date of such notice, whereupon the right of
Lessee to the possession of the Leased Property hereunder shall cease
and terminate on such date, and Lessee shall be required to surrender
the Leased Property to Lessor in accordance with Article 13 hereof and
Lessor shall have the immediate and continuing right then and at any
time and from time to time
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thereafter without further notice to re-enter upon or take possession
of the Leased Property or any part thereof with or without legal
proceedings (summary or otherwise), to remove all Persons and property
therefrom to hold vacant the Leased Property, or to relet or sell it,
in each case as Lessor may elect to do. Lessor shall have no liability
to Lessee for or by reason of such entry or taking of possession and
during such possession. Should Lessor elect to reenter as herein
provided or should Lessor take possession pursuant to legal proceedings
or pursuant to any notice provided for by Applicable Law or upon
termination of this Lease pursuant to clause (b) of this Section 20.1
or termination of Lessee's right to possession pursuant to this clause
(c) of this Section 20.1 or otherwise as permitted by Applicable Law,
Lessee shall peaceably quit and surrender the Leased Property to Lessor
in the condition required by Article 13 hereof.
Section 20.2 Suits to Enforce. Suit or suits for the recovery
of any default in the payment of any sum due hereunder or for damages may be
brought by Lessor from time to time at Lessor's election, and nothing herein
contained shall be deemed to require Lessor to await the date whereon this Lease
or the Term would have expired had there been no such default by Lessee or no
such termination or cancellation.
Section 20.3 Receipt of Payment Not a Waiver. The receipt of
any payments under this Lease by Lessor with knowledge of any breach of this
Lease by Lessee or of any default by Lessee in the performance of any of the
terms or conditions of this Lease, shall not be deemed to be a waiver of such
breach or default (other than with respect to a monetary default wherein
complete payment is tendered by Lessee and Lessor accepts such tender, subject,
however, to the immediately succeeding sentence). No receipt of moneys by Lessor
from Lessee after the termination or cancellation hereof in any lawful manner
shall reinstate, continue or extend the Term, or affect any notice theretofore
given to Lessee, or operate as a waiver of the right of Lessor to enforce the
payment of Rent hereunder, or operate as a waiver of the right of Lessor to
recover possession of the Leased Property covered by this Lease by proper suit,
action, proceedings or remedy; it being agreed that Lessor may demand, receive
and collect and accept the tender of any moneys payable hereunder or under any
of the other Operative Agreements, as the case may be, without in any manner
affecting such notice, or any proceedings, suit, action, order, warrant,
judgment or other remedy with respect to any such default and any and all such
moneys so collected shall be deemed to be payments on account for the use,
operation and occupation of the Leased Property or, at the election of Lessor,
on account of Lessee's other obligations hereunder. Acceptance of the keys to
the Leased Property, or any similar act, by Lessor, or any agent or employee,
during the Term, shall not be deemed to be an acceptance of a surrender of the
Leased Property unless Lessor shall acknowledge such acceptance in writing.
Section 20.4 Damages Payable by Lessee. Except as otherwise
provided in this Article 20, no termination of this Lease, and no repossession
of the Leased Property or any part thereof, and no reletting of the Leased
Property, in any such case pursuant to this Article 20, shall relieve Lessee of
its liabilities and obligations hereunder, all of which shall survive such
expiration, termination, repossession or reletting, including without limitation
the liabilities and obligations of Lessee set forth in Article 13 hereof.
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Section 20.5 Current Damages. In the event of any such
termination, repossession, reletting or removal, Lessee will pay to Lessor all
unpaid Basic Rent due and payable prior to and all Additional Rent due and
payable up to the time of such termination, repossession or reletting, and
thereafter Lessee, until the end of what would have been the Term in the absence
of such termination or repossession or any reletting and whether or not the
Leased Property or any part thereof shall have been relet, shall be liable to
Lessor for, and shall pay to Lessor as Additional Rent hereunder, as agreed
current damages for the loss of Lessor's bargain (and not as a penalty) (a) all
Rent and other sums that would be payable under this Lease by Lessee in the
absence of such termination, repossession or any reletting less (b) the net
proceeds of any reletting of the Property after deducting all reasonable
expenses of Lessor in connection with such termination and repossession and any
reletting effected for the account of Lessee (including, without limitation, all
reasonable repossession costs, brokerage commissions, legal expenses, alteration
costs, remediation costs and expenses of preparing for such reletting). Lessee
will pay such current damages within THIRTY (30) days after receipt of demand.
If Lessee fails to pay such current damages as aforesaid, Lessee shall pay
interest on such unpaid amount at the Late Rate from the date of demand until
Lessor is paid in full with such interest.
Section 20.6 Final Damages. At any time after this Lease has
been terminated pursuant to this Article 20, whether or not Lessor shall have
collected any damages under Section 20.5, Lessor shall be entitled to recover
from Lessee and Lessee will pay to Lessor within THIRTY (30) days after receipt
of demand from time to time, as and for agreed-upon final damages for the loss
of Lessor's bargain (and not as a penalty), and in lieu of all Basic Rent beyond
the date of such demand (it being agreed that it would be impracticable to fix
actual damages) at Lessor's option: (a) an amount equal to the excess of (i) the
present value on the date such demand is made of all Basic Rent that would be
payable under this Lease as of the date of such demand for what would be the
unexpired Term of this Lease in the absence of such termination, over (ii) the
present value on the date such demand is made of the Fair Market Rental for the
Leased Property for what would be the unexpired Term of this Lease, which
present value shall in each case be determined by the application of the
Discount Rate, plus the amount of all unpaid Basic Rent due and payable
hereunder prior to and all Additional Rent due and payable hereunder prior to
and including, or relating to periods ending on or prior to, the date on which
the amount payable pursuant to this Section 20.6(a) is actually paid; or (b) the
sum of (i) the Stipulated Loss Value calculated as of the Stipulated Loss Value
Determination Date immediately succeeding the date on which payment thereof is
made, plus (ii) all Additional Rent due and payable up to the date of payment,
plus (iii) (x) during the Base Lease Term, all unpaid Basic Rent due and payable
prior to the date of payment, and (y) during any Renewal Term, all unpaid Basic
Rent due and payable on or prior to the date of payment, which shall include any
accrued and unpaid Basic Rent, payable for the period from the preceding Basic
Rent Payment Date to the date of payment, prorated for such period on a per diem
basis; or (c) if Lessor shall sell and convey Lessor's interest in the Leased
Property to any other Person pursuant to a bona fide, arm's-length, fair market
transaction, Lessor shall be entitled to recover from Lessee an amount equal to
the sum of (i) the Stipulated Loss Value calculated as of the Stipulated Loss
Value Determination Date immediately succeeding the date on which such sale and
conveyance occurs, plus (ii) the amount of all Additional Rent due and payable
and other sums accrued hereunder to and including, or relating to periods ending
on or prior to, such date of such sale or conveyance, plus (iii) during
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the Base Lease Term, all unpaid Basic Rent due and payable prior to such date of
such sale or conveyance, plus (iv) during any Renewal Term, all unpaid Basic
Rent due and payable on or prior to such date of such sale or conveyance, which
shall include any accrued and unpaid Basic Rent, payable for the period from the
preceding Basic Rent Payment Date to such date of such sale or conveyance,
prorated for such period on a per diem basis, minus (v) the amount of the
consideration received by Lessor in connection with such sale, less all expenses
incurred in connection with such sale.
In addition to any sums payable pursuant to Section 20.6(a),
(b) or (c), as the case may be, Lessee shall be liable for, and agrees to pay as
Additional Rent, all reasonable legal fees and other reasonable costs and
expenses incurred by Lessor by reason of the occurrence of any Event of Default
or the exercise of Lessor's remedies with respect thereto, including all
reasonable costs and expenses incurred in connection with the surrender of the
Leased Property or repossession thereof or in placing the Leased Property in the
condition required by this Lease.
In the event that Lessor terminates this Lease during the Base
Lease Term pursuant to any provision of this Article 20 pursuant to which
Stipulated Loss Value is not paid, Lessee shall pay to Lessor as Basic Rent
through the Expiration Date, the amount, if any, set forth on Schedule IV hereto
opposite the Stipulated Loss Value Determination Date under the caption "Basic
Rent Amount as of Stipulated Loss Value Determination Date" or, if such amount
is a negative number, Lessor shall pay to Lessee as a refund of Basic Rent
allocated to any portion of a Lease Period ending on or after such Expiration
Date, such amount, provided that at any time after the Notes have been paid in
full, Lessor shall be entitled to set off its obligation to make any such refund
against any amount due to Lessor or Owner Participant from Lessee hereunder or
under any other Operative Agreement. If the Lease terminates during the Base
Lease Term pursuant to any provision of this Article 20 on a date that is not a
Stipulated Loss Value Determination Date, to the extent the amounts payable do
not precisely reflect the excess of Basic Rent allocated over Basic Rent paid or
the excess of Basic Rent paid over Basic Rent allocated, whichever the case may
be, as of the date on which Basic Rent ceases to accrue, such applicable amount
shall be further increased or decreased by the amount necessary to ensure that
the aggregate amount of Basic Rent paid equals the aggregate amount of Basic
Rent allocated as of the date on which Basic Rent ceases to accrue; provided,
further, that at any time after the Notes have been paid in full, Lessor shall
be entitled to set off its obligation to make any such refund against any amount
due to Lessor or Owner Participant from Lessee hereunder or under any other
Operative Agreement.
In the event that Lessor terminates this Lease during any
Renewal Term pursuant to any provision of this Article 20 pursuant to which
Stipulated Loss Value is not paid, Lessee shall pay to Lessor any accrued and
unpaid Basic Rent payable for the period from the preceding Basic Rent Payment
Date through the Expiration Date plus all other unpaid Basic Rent and Additional
Rent due and payable on or prior to such date.
Section 20.7 Remedies Cumulative. Except as expressly provided
in this Article 20, no remedy referred to in this Article 20 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Lessor at Applicable Law or in
equity, and the exercise in whole or in part by Lessor of any one or more of
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such remedies shall not preclude the simultaneous or later exercise by Lessor of
any or all such other remedies but in no event may Lessor collect any two or
more of the amounts described in Section 20.6(a), (b) and (c).
ARTICLE 21
MISCELLANEOUS
-------------
Section 21.1 Recordation. If requested by Lessee, this Lease
or a memorandum or short form of this Lease shall be recorded.
Section 21.2 No Waiver. The waiver by Lessor of any breach of
any agreement, condition or provision contained in this Lease will not be deemed
to be a waiver of any subsequent breach of the same or any other agreement,
condition or provision contained in this Lease, nor will any custom or practice
in the administration of the terms of this Lease be construed to waive, impair
or restrict the right of Lessor to insist upon the performance by Lessee in
strict accordance with the terms of this Lease.
Section 21.3 Limitation on Recourse. (a) It is expressly
understood and agreed by and between Lessee and Lessor and their respective
successors and assigns that nothing herein contained shall be construed as
creating any liability of Lessor or its Affiliates or any of the officers,
directors, members, shareholders, partners, venturers, trustees, custodians,
beneficiaries, employees, managers or agents of Lessor or its Affiliates,
individually or personally, to perform any covenant, either express or implied,
contained herein, all such liability, if any, being expressly waived by Lessee
and by each and every person now or hereafter claiming by, through or under
Lessee, and that, so far as Lessor or any of its Affiliates or any of the
respective officers, members, directors, shareholders, partners, venturers,
trustees, beneficiaries, employees or agents of Lessor or its Affiliates,
individually or personally, is concerned, Lessee and any Person claiming by,
through or under Lessee shall look solely to the right, title and interest of
Lessor in the Leased Property and under the Operative Agreements for the
performance of any obligation under this Lease and satisfaction of any liability
arising herefrom. For the purposes of this Section 21.3(a), the term "Lessor"
shall be deemed to include any successor to Lessor's interest in the Leased
Property. The provisions of this Section 21.3(a) shall not be deemed to limit
Lessee's recourse against any Person for those matters for which such Person has
express liability under any other Operative Agreement.
(b) Nothing contained in this Section 21.3 shall be deemed or
construed to permit Lessee to xxxxx, reduce, terminate or rescind any payment of
Rent or any other sum due and payable hereunder or terminate this Lease or any
other Operative Agreement or fail to perform any of its obligations hereunder or
thereunder.
Section 21.4 Estoppel Certificates. At any time and from time
to time, but on not less than TEN (10) Business Days' prior written request by
Lessor, any Participant, Indenture Trustee or Lessee, as the case may be, either
party hereto will execute, acknowledge and deliver to the requesting party,
promptly upon request, a certificate certifying to the extent then true (a) that
this Lease and the other Operative Agreements to which it is a party are
unmodified and
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in full force and effect or, if there have been modifications, that this Lease
and the other Operative Agreements to which it is a party are in full force and
effect, as modified, and stating the date and nature of each modification; (b)
the date, if any, to which Rent and other amounts due and owing under the other
Operative Agreements to Lessor or any Indemnified Person have been paid; (c)
that no notice has been received by the responding party of any default under
this Lease or any of the other Operative Agreements which has not been cured,
except as to defaults specified in said certificate; and (d) if a certificate
from Lessee, that no Default or Event of Default has occurred and is continuing
and Lessee has received no notice of any Event of Loss or Total Taking. Any such
certificate may be relied upon by any Participant, any Alteration Lender, any
tenant, assignee or sublessee of Lessee, or by any prospective purchaser or
mortgagee or beneficiary under any mortgage, deed of trust or trust indenture
for all or any portion of the Leased Property, or by Lessor or Lessee, as the
case may be.
Section 21.5 No Merger. There shall be no merger of this Lease
or of the leasehold estate hereby created with the fee estate in the Leased
Property by reason of the fact that the same Person acquires or holds, directly
or indirectly, this Lease for the leasehold estate as well as the fee estate in
the Leased Property or any interest in such fee estate. Without limiting the
foregoing, the voluntary or other surrender of this Lease by Lessee, or the
cancellation of this Lease by mutual agreement of Lessee and Lessor or the
termination of this Lease on account of an Event of Default will not work a
merger, but at the option of Lessor will operate as an assignment to Lessor of
all or any leases, subleases or subtenancies effective upon Lessor's written
election thereof to Lessee and all lessees, sublessees or subtenants in the
Leased Property or any part of the Leased Property known to Lessor.
Section 21.6 Holding Over. Lessee will have no right to remain
in possession of all or any part of the Leased Property after the Expiration
Date. If Lessee remains in possession of all or any part of the Leased Property
after the Expiration Date (a) such tenancy will be deemed to be a tenancy at
will only; (b) such tenancy will not constitute a renewal or extension of this
Lease for any further term; (c) Basic Rent will be increased to an amount equal
to the greater of (i) the Fair Market Rental of the Leased Property as of the
Expiration Date or (ii) (x) ONE HUNDRED TEN PERCENT (110%) of the Average Annual
Basic Rent (on a per diem basis) payable over the Base Lease Term for the first
SIXTY (60) days and (y) thereafter ONE HUNDRED FIFTY (150%) of the Average
Annual Basic Rent (on a per diem basis) payable over the Base Lease Term; and
(d) Lessee shall pay all damages of Lessor attributable to any such holding over
and all other out-of-pocket expenses of Lessor with respect to such holding
over, including, without limitation, reasonable attorneys' fees and expenses.
Such tenancy-at-will shall be subject to every other term, condition and
covenant contained in this Lease and shall not limit any other rights and
remedies which Lessor may otherwise have. The provisions of this Section 21.6
shall not apply to any extensions permitted in Section 22.2(b).
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Section 21.7 Notices. All notices, offers, acceptances,
rejections, consents, requests, exercises of options and other communications
hereunder shall be in writing (which may be a photostatic or other copy thereof)
and shall be deemed to have been given when received by first class registered
or certified mail, postage prepaid, return receipt requested, or by Federal
Express or other overnight delivery service that provides evidence of receipt,
in each case prepaid and addressed to the appropriate party at the address
specified in Schedule 1 to the Participation Agreement or to such other address
as any party hereto may from time to time designate by notice given in
accordance with the provisions of this Section to the other parties hereto.
Section 21.8 Lessor's Performance of Lessee's Covenants. If
Lessee at any time fails to pay any Taxes or other charge which it is currently
required to pay in accordance with Section 16 of the Participation Agreement
within the time therein permitted, or to pay for or maintain any of the
insurance policies required by Article 7, within the time permitted in such
Section or Article, as the case may be, or fails to perform any other covenant
on Lessee's part to be performed hereunder, then Lessor, after TEN (10) days'
prior written notice to Lessee (or, in case of any emergency, upon such notice
or without notice as may be reasonable under the circumstances or, if sooner,
when such failure shall constitute an Event of Default hereunder) and without
waiving or releasing Lessee from any obligation of Lessee under this Lease, may,
but will not be required to, pay such Taxes or other charges payable by Lessee
or perform such covenant pursuant to the applicable provisions hereof. All sums
so paid by Lessor and all costs and expenses incurred by Lessor in connection
with the performance of any such act shall be Additional Rent, and will become
payable by Lessee to Lessor TEN (10) days after receipt by Lessee of Lessor's
written demand therefor, accompanied by reasonable documentation confirming
payment of said sums by Lessor. To the extent that Lessor makes any payment on
behalf of Lessee pursuant to this Section, Lessee shall also pay interest to
Lessor at the Late Rate from the date any such payment was made by Lessor on
behalf of Lessee until Lessor is paid in full with such interest.
Section 21.9 Severability. If any provision of this Lease
proves to be illegal, invalid or unenforceable, the remainder of this Lease will
not be affected thereby, and, in lieu of each provision of this Lease that is
illegal, invalid or unenforceable, a provision will be added as a part of this
Lease as similar in terms to such illegal, invalid or unenforceable provision as
may be possible without violating any Applicable Law.
Section 21.10 Written Amendment Required. No amendment,
alteration or addition to, or modification of, this Lease will be valid or
binding unless expressed in writing and signed by the party or parties to be
bound.
Section 21.11 Entire Agreement. This Lease and the Operative
Agreements contain the entire agreement between Lessor and Lessee with respect
to the subject matter hereof.
Section 21.12 Captions. The captions of the various Articles
and Sections of this Lease are for convenience only and are not intended to
define, limit, describe or construe the contents of such Articles or Sections,
as the case may be.
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Section 21.13 Authority. Lessor and Lessee each hereby
represent to the other that the Person executing this Lease on behalf of such
party is authorized to do so by requisite action of the board of directors or
other authorizing committee or entity.
Section 21.14 Applicable Law. THIS LEASE WILL BE GOVERNED BY
AND CONSTRUED PURSUANT TO THE INTERNAL APPLICABLE LAW (AND NOT THE CONFLICTS
LAW) OF THE STATE OF NEW YORK, provided that, to the extent the law of the State
in which the Leased Property is located requires that the laws of such State
apply to any aspect of this Lease, then, to that extent, the laws of such State
will so apply.
Section 21.15 Binding Effect. The covenants, conditions and
agreements contained in this Lease will bind and inure to the benefit of Lessor
and Lessee and their respective successors and permitted assigns.
Section 21.16 Lease Only. This Lease shall constitute an
agreement of lease, and nothing herein shall be construed as conveying to Lessee
any right, title or interest in the Leased Property except as Lessee. Lessor and
Lessee agree that Lessor will be the sole owner of the Leased Property for all
purposes (including income tax purposes) and that this Lease is not intended to
provide Lessee any ownership interest in the Leased Property or any proprietary
interest in Lessor's business. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third person to create the
relationship of principal and agent or of partnership or of joint venture or of
any association between Lessor and Lessee, and no provision contained in this
Lease or any acts of the parties hereto contemplated by this Lease shall be
construed to constitute or establish any relationship between Lessor and Lessee
other than the relationship of lessor and lessee.
ARTICLE 22
PURCHASE PROCEDURE; APPRAISAL PROCEDURE
---------------------------------------
Section 22.1 Purchase Procedure. If Lessee shall purchase or
acquire Lessor's interest in the Leased Property pursuant to any provision of
this Lease, including, without limitation, Article 5, 14 or 15 , then Lessee
shall accept from Lessor a deed, assignment and/or such other instrument or
instruments as may be appropriate and in the form required by the state in which
the Leased Property is located, which shall transfer Lessor's interest in the
Leased Property without representation or warranty except as to the absence of
Lessor's Liens and Owner Participant's Liens.
Upon the date fixed for any purchase or acquisition of
Lessor's interest in the Leased Property, Lessee shall pay to the order of
Lessor the purchase price, if applicable, therefor, together with all Rent then
accrued hereunder to and including such date of purchase, by certified check
drawn on, or wire transfer of, immediately available funds having same day
value, and Lessor shall (a) make the conveyances to Lessee described above, and
(b) except as otherwise provided to the contrary herein, pay over or assign to
Lessee without recourse or warranty, except as otherwise provided herein, all
property insurance proceeds relating to the interest of Lessor in the Leased
Property and all rights thereto and Lessor's interest in all condemnation
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awards and payments with respect to a Taking relating to Lessor's interest in
the Leased Property being purchased or acquired. All charges incident to such
conveyance, including, without limitation, escrow fees, reasonable attorneys'
fees, recording fees, title insurance premiums and all applicable transfer taxes
and other taxes required to be paid in connection with such conveyance or in
order to record the transfer documents (but not any income tax, capital gains
tax, minimum tax or similar taxes imposed upon Lessor) that may be imposed by
reason of such conveyance and assignment and the delivery of such deed(s) shall
be paid by Lessee. In the event of any purchase by Lessee, Lessee may assign
such right or obligation to purchase or designate the purchaser; provided,
however, that no such assignment or designation shall relieve Lessee of any
obligation to pay all amounts due in order to purchase under this Lease.
Section 22.2 Appraisal Procedure; Right to Revoke Fair Market
Renewal Option. (a) If Lessor and Lessee cannot agree as to the Fair Market
Value of the interest of Lessor in the Leased Property or any part thereof, or
the remaining useful life or residual value (as of the appropriate date) of the
Improvements or any part thereof, or the Fair Market Rental, or Fair Market
Value of any other property or interest which is to be determined under this
Lease or under any other Operative Agreement which requires determination by an
"Appraisal Procedure", each may within TEN (10) Business Days after notice by
either of them to the other that it has been unable to agree with the other as
to such value (but not more than TWO HUNDRED SEVENTY (270) days prior to the
date for which the determination is being made), appoint an appraiser which is
not affiliated with the appointing party. In the event that either Lessee or
Lessor shall not have appointed an appraiser within FIFTEEN (15) Business Days
after the appointment of an appraiser by the other, such value shall be deemed
to be the amount determined by the appraiser appointed by the other. In the
event that Lessor and Lessee each appoint appraisers and either of such
appraisers fails to deliver an appraisal within FORTY-FIVE (45) days of
appointment of both appraisers, such Fair Market Value, Fair Market Rental,
remaining useful life and/or residual value shall be deemed to be the value
specified in the appraisal that was so delivered. In the event that Lessor and
Lessee each appoint appraisers and the value determined by such appraisers shall
differ by less than TEN PERCENT (10%) of the greater of such two appraisers'
appraisals, such Fair Market Value, Fair Market Rental, remaining useful life
and/or residual value shall be deemed to be the average of such two appraisals.
In the event that the amounts determined to be such Fair Market Value, Fair
Market Rental, remaining useful life and/or residual value by such two
appraisers shall differ to a greater extent, such two appraisers shall, within
FIFTEEN (15) Business Days after delivery of both appraisals, select a third
appraiser meeting the standards set forth in this Lease. If the two appraisers
cannot agree on the third appraiser, either Lessee or Lessor may request the
American Arbitration Association, or any successor organization thereto, to
appoint the third appraiser. Upon such selection or appointment, such third
appraiser shall deliver an appraisal of such Fair Market Value, Fair Market
Rental, remaining useful life and/or residual value within FORTY-FIVE (45) days
of his or her appointment, and Fair Market Value, Fair Market Rental, remaining
useful life and/or residual value shall be deemed to be the average of the
appraisals rendered by such three appraisers. In the event, however, that the
lowest or the highest of the three appraisals, or both, varies by more than
FIFTEEN PERCENT (15%) from the middle appraisal, the appraisal or appraisals so
varying shall be disregarded (and if only the third appraisal is remaining, such
appraisal alone shall be used to determine the Fair Market Value, Fair Market
Rental, remaining useful life and/or residual
-46-
value being determined under this Section 22.2). Except with respect to any
appraisal pursuant to Section 20.6 of this Lease, Lessor and Lessee shall pay
for their own appraisers and any costs or expenses, including legal expenses,
relating to such appraisal, and the cost of any third appraisal required
hereunder shall be divided between Lessor and Lessee equally. With respect to
any appraisal pursuant to Section 20.6 of this Lease, Lessee shall pay for all
appraisers and Lessee shall have no right to approve any appraiser selected by
Lessor pursuant to this Section 22.2. All appraisers appointed hereunder shall
be members of the Appraisal Institute with not less than FIVE (5) years of
experience nationwide in the appraisal of commercial real estate similar to the
Leased Property and be devoting substantially all of their time to professional
appraisal work at the time of appointment and be in all respects impartial and
disinterested.
(b) In the event that Lessee has elected a Fair Market Renewal
Option as provided herein and the determination of Fair Market Rental is made by
the Appraisal Procedure, Lessee shall have the right to revoke its prior Fair
Market Renewal Option within TEN (10) Business Days after receipt by it of the
final determination of Fair Market Rental; provided that if Lessee shall revoke
its prior Fair Market Renewal Options within the TWELVE (12) month period prior
to the Expiration Date, the Term shall be extended so that the Term shall not
expire until the one year anniversary date of such revocation, Lessee's renewal
rights under this Lease shall be extinguished and Lessee agrees to pay rent
during such extension at the per diem rate of the Average Annual Basic Rent or
if such revocation notice is delivered during a Fair Market Renewal Term, at the
per diem rate of the Fair Market Rental payable during such Fair Market Renewal
Term, payable on the Expiration Date, as extended.
-47-
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease
as of the day and year first above written.
LESSEE:
AHOLD LEASE U.S.A., INC.
By
-------------------------------
Name:
Its:
LESSOR:
[NAME OF LESSOR]
By: [NAME OF OWNER PARTICIPANT],
as managing member
By
-------------------------------
Name:
Its:
-48-
*[Receipt of this original counterpart of the foregoing Lease Agreement is
hereby acknowledged on this 12th day of February 2001.
[NAME OF INDENTURE TRUSTEE,] as
Indenture Trustee,
By:
-------------------------------
Name:
Title:
*This language contained in
the original counterpart only.
EXHIBIT A
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
------------------------------
This Subordination, Non-Disturbance and Attornment Agreement
(this "Agreement"), made this ___ day of ___________, 20__, by and between [NAME
OF LESSOR LLC], a Delaware limited liability company, having its principal
office and place of business located at __________________ (hereinafter referred
to as "Prime Lessor"), ___________________, not in its individual capacity, but
solely as Indenture Trustee, having its principal place of business at
__________________________ (hereinafter called "Indenture Trustee") [add
Remainderman or Ground Lessor as a party, if applicable] and
_____________________, a ________________, having an office and place of
business located at ___________________________ (hereinafter referred to as
"Sublessee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Prime Lessor is the owner of [a fee interest/a ground
leasehold interest/an estate for years] in the land described on Exhibit A
hereto and a fee interest in the improvements located at _______, ____________
(hereinafter referred to as "Building") [revise this recital to reflect
ownership structure for each property; i.e., [estate for years/remainderman
structure with fee ownership of buildings,] fee ownership of land and
buildings[, ground leasehold interest in land with fee ownership of buildings],
or leasehold interest in land and buildings]; and
WHEREAS, Prime Lessor has issued certain promissory notes
evidencing indebtedness, which promissory notes are secured by, among other
things, a lien on the Prime Lessor's interest in the Building in favor of
Indenture Trustee, which lien was created by a certain [Mortgage/Deed of
Trust/Deed to Secure Debt] Assignment of Leases and Rents, Security Agreement
and Financing Statement (the "Mortgage"); and
[Insert a Recital describing Remainderman's, Ground Lessor's
or XXX Xxxxxx'x interest, as applicable]; and
WHEREAS, Prime Lessor has leased the Building to Ahold Lease
U.S.A., Inc. (hereinafter called "Prime Lessee") pursuant to that certain Lease
Agreement dated as of February 12, 2001, between Prime Lessor and Prime Lessee
(hereinafter called the "Prime Lease"); and
WHEREAS, Prime Lessee has leased the Building to [insert name
of applicable Ahold operating company] (hereinafter called "Prime Sublessee")
pursuant to that certain Sublease Agreement dated as of _________, 2001, between
Prime Lessee and Prime Sublessee (hereinafter called the "Prime Sublease"); and
WHEREAS, Prime Sublessee, as sublessor, has subleased or
sub-subleased to Sublessee, certain space in the Building pursuant to a Sublease
dated as of __________ __, ____, which Sublease is hereinafter referred to as
the "Sublease", the premises demised thereby are
A-1
hereinafter referred to as the "Demised Premises" and which Demised Premises are
more particularly described in the Sublease; and
WHEREAS, Sublessee has requested that Prime Lessor and
Indenture Trustee [Remainderman/Ground Lessor] agree not to disturb Sublessee's
possessory rights in the Demised Premises and Sublessee's rights and privileges
under the Sublease (as the same may be extended or renewed in accordance with
the terms thereof) in the event that Prime Lessor should terminate the Prime
Lessee's interest in the Prime Lease or otherwise cancels the Prime Lease, or
the term of the Prime Lease expires or otherwise comes to an end, or in the
event the lien of the Mortgage is foreclosed or the property encumbered thereby
is sold pursuant to the exercise of a power of sale or transferred in lieu of
foreclosure [or if the Ground Lease is terminated, if the Ground Lease is in
effect] provided that Sublessee is not in default (subsequent to any required
notice and the expiration of any cure or grace period) under the Sublease and
further provided the Sublessee attorns to Prime Lessor or any successor lessor
under the Prime Lease, Indenture Trustee or any purchaser in the event of any
sale of the Building by the exercise of a power of sale or at any foreclosure
sale or any transfer in lieu of foreclosure [or the Ground Lessor, if the Ground
Lease is in effect] (each of the foregoing parties being hereinafter called the
"Successor", as the case may be); and
WHEREAS, Prime Lessor and Indenture Trustee
[Remainderman/Ground Lessor] are willing to so agree on the terms and conditions
hereinafter provided.
NOW, THEREFORE, in consideration of the premises, the mutual
covenants contained herein and TEN DOLLARS ($10.00) and other good and valuable
consideration each to the other in hand paid, receipt of which is hereby
acknowledged, Prime Lessor, Indenture Trustee [Ground Lessor] and Sublessee
hereby agree as follows:
1. The Sublease is and shall be subject and subordinate in all
respects to the Prime Lease, the Mortgage [the Ground Lease] and to all
renewals, modifications, replacements, amendments and/or extensions of any
thereof.
2. Provided Sublessee complies with this Agreement and is not
in default under the terms of the Sublease in the payment of the basic rent or
the additional rent provided in the Sublease, or the performance of any other
terms, conditions, covenants, clauses or agreements on its part to be performed
under the Sublease beyond all applicable notice and grace periods provided in
the Sublease, no default by the Prime Lessee under the Prime Lease, no default
by Prime Lessor under the Mortgage [no default by Prime Lessor under the Ground
Lease] as any thereof may have been modified, extended, renewed and/or replaced,
and no expiration, cancellation or termination of the Prime Lease [or the Ground
Lease] for any reason, or foreclosure of the lien created by the Mortgage or
sale of the property encumbered thereby by the exercise of a power of sale or a
transfer of such property in lieu of foreclosure, will disturb Sublessee's
possession under the Sublease, or Sublessee's rights and privileges under the
Sublease (as same may be extended or renewed in accordance with the terms
thereof) and the Sublease will not be affected or cut off thereby (except to the
extent that Sublessee's right to receive or set-off any monies or obligations
owed or to be performed by the Prime Lessee, Prime Sublessee or any of their
successors or assigns shall not be enforceable thereafter against Prime Lessor
or Indenture Trustee
A-2
[Remainderman/Ground Lessor]) and notwithstanding any expiration, termination or
cancellation of the Prime Lease for any reason, other acquisition of the Prime
Lessee's interest in the Prime Lease and merger with the Prime Lessor's interest
in the land and the Building, foreclosure of the lien of the Mortgage, sale of
the property encumbered thereby or transfer thereof in lieu of foreclosure [or
termination of the Ground Lease], the Sublease will be recognized as a direct
lease from the Successor, except that the Successor or any subsequent holder of
the Successor's interest in the land and the Building shall not (a) be liable
for any previous act or omission under the Sublease by the holder of the Prime
Sublessee's interest in the Sublease; (b) be subject to any offset or defenses
which shall theretofore have accrued to Sublessee against the holder of the
Prime Sublessee's interest in the Sublease; (c) have any obligation with respect
to any security deposited under the Sublease unless such security has been
physically delivered to the Successor; or (d) be bound by any amendment,
modification, assignment, subletting, extension or renewal of the Sublease to
the extent such amendment, modification, assignment, subletting, extension or
renewal of the Sublease causes the Sublease not to be in compliance with Section
9.3(a)(ii)-(v) of the Prime Lease.
3. In the event the Sublease is recognized as a direct lease
from the Successor as provided in Paragraph 2 hereof, Sublessee does hereby
attorn to the Successor or any subsequent holder of the Successor's interest in
the land and the Building, said attornment to be effective and self-operative,
without the execution of any further instruments, upon the expiration,
cancellation or termination of the Prime Lease, the foreclosure of the lien of
the Mortgage, sale of the property encumbered thereby pursuant to the exercise
of a power of sale, transfer of such property in lieu of foreclosure [or
termination of the Ground Lease]. Sublessee shall, upon request of the Successor
or any subsequent holder of the Successor's interest in the land and the
Building, execute a written agreement in form reasonably acceptable to Sublessee
whereunder Sublessee confirms this attornment to the Successor or any such
subsequent holder of the Successor's interest in the land and the Building and
affirms Sublessee's obligations under the Sublease and agrees to pay all rentals
and charges then due or to become due to the Successor or any such subsequent
holder of the Successor's interest in the land and the Building in accordance
with the terms of the Sublease.
4. No modification, amendment, waiver or release of any
provision of this Agreement or of any right, obligation, claim or cause of
action arising hereunder shall be valid, or binding for any purpose whatsoever
unless in writing and duly executed by the party against whom such modification,
amendment, waiver or release is sought to be asserted.
5. This Agreement shall inure to the benefit of the parties
hereto, their successors and assigns; provided, however, that in the event of
the assignment or transfer of the interest of Prime Lessor or Indenture Trustee
[Remainderman/Ground Lessor], all of the respective obligations and liabilities
of Prime Lessor or Indenture Trustee [Remainderman/Ground Lessor], as the case
may be, under this Agreement shall terminate, and thereupon all such respective
obligations and liabilities of Prime Lessor or Indenture Trustee
[Remainderman/Ground Lessor] arising or accruing prior to, contemporaneous with,
or subsequent to, the date of such transfer or assignment shall, without the
necessity of the execution of any further instrument, be the responsibility of
the party to whom such interest is assigned or transferred; provided that the
interest of
A-3
Sublessee under this Agreement may not be assigned or transferred, except in
connection with an assignment or transfer permitted under and in accordance with
the terms of the Sublease.
6. Sublessee agrees that this Agreement satisfies any
condition or requirements in the Sublease relating to the granting of a
non-disturbance agreement from the owner of the Building of which the Demised
Premises are a part.
7. In the event that Prime Lessor or Indenture Trustee
notifies Sublessee of an Event of Default under the Prime Lease and demands that
Sublessee pay its rent and all other sums due under the Sublease to Prime Lessor
or Indenture Trustee, Sublessee agrees that it will honor such demand and pay
its rent and all other sums due under the Sublease directly to Prime Lessor or
Indenture Trustee, as directed. Prime Sublessee, as holder of the lessee's
interest in the Prime Lease, and as the sublessor under the Sublease, hereby
consents, agrees and directs Sublessee, upon Sublessee's receipt of the
aforesaid notice and demand from Prime Lessor or Indenture Trustee, to pay the
rents and other sums payable by Sublessee under the Sublease directly to Prime
Lessor or Indenture Trustee, and the amounts so paid to Prime Lessor or
Indenture Trustee shall be credited against the rentals and other sums payable
by Sublessee under the Sublease to the extent and as if such amounts had been
paid to Sublessor.
8. Prime Lessor and Indenture Trustee [Remainderman/Ground
Lessor] shall have no obligation, nor incur any liability, with respect to any
warranties of any nature whatsoever, whether pursuant to the Sublease or
otherwise, including, without limitation, any warranties respecting the use of
the Demised Premises, compliance of the Building with zoning or other laws or
ordinances, title of the Prime Sublessee under the Sublease, the authority of
the Prime Sublessee under the Sublease, habitability, fitness for purpose or
possession of the Building or the Demised Premises.
9. Anything herein or in the Sublease to the contrary
notwithstanding, neither Indenture Trustee nor Prime Lessor shall have any
obligation, or incur any liability, beyond such party's then interest, if any,
in the land and the Building and Sublessee shall look exclusively to such
interest of Prime Lessor or Indenture Trustee, if any, as the case may be, in
the land and the Building for the payment and discharge of any obligations
imposed upon such party hereunder or under the Sublease, and Indenture Trustee
and Prime Lessor are each hereby released or relieved of any other obligations
hereunder and under the Sublease.
10. If the Sublessee becomes an Affiliate of the Prime Lessee,
the nondisturbance provisions of Section 2 of this Agreement shall be of no
further force and effect.
A-4
IN WITNESS WHEREOF, the parties hereto have respectively
signed this Agreement as of the day and year first above written.
[NAME OF LESSOR LLC]
By: [OWNER PARTICIPANT],
as managing member
By:
----------------------------------
Its:
---------------------------------
[NAME OF INDENTURE TRUSTEE], a
national banking association, not
in its individual capacity, but
solely as Indenture Trustee
By:
----------------------------------
Its:
---------------------------------
[GROUND LESSOR]
By:
----------------------------------
Its:
---------------------------------
SUBLESSEE
By:
----------------------------------
Its:
---------------------------------
A-5
Agreed to this ___ day
of ____________, 20__
[ADD SIGNATURE BLOCKS FOR
PRIME LESSEE AND PRIME
SUBLESSEE]
A-6
[Insert State Acknowledgment Forms]
SCHEDULE I
----------
DESCRIPTION OF LEASED PROPERTY
------------------------------
Please See Attached
SCHEDULE II
-----------
ADDITIONAL EXCEPTIONS
---------------------
[List additional Permitted Exceptions with respect to the applicable Leased
Property. Some items may be footnoted as not being required to be promptly
discharged, released, removed or indemnified under Section 8.6]
Part A - Mortgages
------------------
Part B - Other Liens
--------------------
SCHEDULE III-A
--------------
BASIC RENT PAYMENT SCHEDULE
---------------------------
Property Code: _____________
Aggregate Purchase Price: $_________
Basic Rent Payment(1)
Basic Rent Payment Date (Percentage of Aggregate Purchase Price)
----------------------- ----------------------------------------
----------
(1) Basic Rent will be allocated to the Lease Periods as set forth in
Schedule III-B.
SCHEDULE III-B
--------------
BASIC RENT ALLOCATION
---------------------
Property Code: _____________
Aggregate Purchase Price: $_________
Lease Periods
-------------
Basic Rent Allocated to
Each Lease Period Basic Rent Payment
From (and To (and (Percentage of Aggregate (Percentage of Aggregate Basic Rent
including) including) Purchase Price) Purchase Price) Payment Date
---------- ---------- --------------- --------------- ------------
SCHEDULE IV
-----------
STIPULATED LOSS VALUES
----------------------
Property Code: _____________
Aggregate Purchase Price: $_____________
Basic Rent Amount as of
Stipulated Loss Value
Unadjusted Stipulated Loss Determination Date(1) Net Stipulated Loss Value(2)
Stipulated Loss Value Value (Percentage of (Percentage of (Percentage of
Determination Date Aggregate Purchase Price) Aggregate Purchase Price) Aggregate Purchase Price)
------------------ ------------------------- ------------------------- -------------------------
----------
(1) This amount reflects the excess of Basic Rent allocated over Basic Rent
paid (if shown as a positive number) or the excess of Basic Rent paid over
Basic Rent allocated (if shown as a negative number).
(2) The "Net Stipulated Loss Value" in this column is the amount payable on
termination which is the sum of, and represents (i) a payment (or
reduction) of "Basic Rent Amount" and (ii) a payment of the "Unadjusted
Stipulated Loss Value".
SCHEDULE IV-A
-------------
REMAINDERMAN STIPULATED LOSS VALUES
-----------------------------------
Property Code: _____________
Aggregate Purchase Price: $_____________
Stipulated Loss Value
Stipulated Loss Value Determination Date (Percentage of Aggregate Purchase Price)
---------------------------------------- ----------------------------------------
SCHEDULE VI
-----------
PROPERTY SPECIFIC TERMS
-----------------------
Basic Rent Payment Date for any Renewal Term shall be each
February 12, __ and August 12__ of each calendar year during such Renewal Term,
and the Expiration Date of the Lease.
Discount Rate: 9.11% per annum
Final Date: [99 year anniversary for Xxxxxxxxxxx] [00 year
anniversary for New York] [98 year anniversary for New Jersey] [99 year
anniversary for Massachusetts].
Fixed Rate Term Expiration Date: [Lease 3.2 - not to exceed
75% of the original estimated useful life of the Leased Property, as such date
may be extended pursuant to Section 3.4(b)]
[Fixed Renewal Rent: for each Basic Rent Payment Date during
any Fixed Rate Renewal Term, shall be determined as follows: (i) for a Fixed
Rate Renewal Term of a full 5-year period, the Fixed Renewal Rent for the first
five semi-annual payments shall equal 45% [42.5%] of the Average Annual Basic
Rent and the Fixed Renewal Rent for the second five semi-annual payments shall
equal 55% [57.5%] of the Average Annual Basic Rent and (ii) for a Fixed Rate
Renewal Term made up of a period of less than five years (A) for the portion of
such Fixed Rate Renewal Term made up of whole lease years, the first one-half of
the Fixed Renewal Rent payments shall equal 45% [42.5%] of the Average Annual
Basic Rent and the second one-half of the Fixed Renewal Rent payments shall
equal 55% [57.5%] of the Average Annual Basic Rent, and (B) for the last portion
of such Fixed Rate Renewal Term made up of less than a full year, the Fixed
Renewal Rent payments shall be equal to the per diem rate of the Average Annual
Basic Rent for the number of days in such period such that, in all events, for
any Fixed Renewal Term the average annual rent for each year during such Fixed
Renewal Term shall equal the Average Annual Basic Rent and the Fixed Renewal
Rent allocated to any calendar year is not less than 90 [85]% of the Average
Annual Basic Rent or greater than 110 [115]% of the Average Annual Basic Rent
(provided that if the last year of such Fixed Rate Renewal Term is less than a
full calendar year, the rent allocated to such year shall be annualized for the
purpose of such calculation).]
Indenture: the Indenture dated as of the date hereof between
the Indenture Trustee and Lessor with respect to the Leased Property.
Indenture Trustee: First Union National Bank, a national
banking association, as indenture trustee under the Indenture.
Other Requirements: [Lease 8.1, the XXX Lease, PA Lease, RI
ground lease]
Owner Participant:
Participant: Owner Participant and Pass Through Trustee [and
the Remainderman].
Schedule VI
Page 2
Participant Liens: Owner Participant's Liens [and
Remainderman's Liens].
Scheduled Expiration Date: the twenty-fifth anniversary of the
Closing Date.
SCHEDULE VII
------------
PRICING ASSUMPTIONS
-------------------
Property Code:
Aggregate Purchase Price: $
Location: ________________
Average Annual Basic Rent:
Rent Holiday Period:
Closing Date: __________ __, 2001
Equity Amount (without Transaction Expenses):
Base Lease Term: 25 years
Rent Periodicity: Semi-annual
Transaction Expenses (% of Aggregate Purchase Price): 3.25%
Debt Amount
-- Series A-1:
-- Series A-2:
Debt Rates
%
-- Series A-1: %
-- Series A-2: %
%
Depreciation Breakdown (Cost Segmentation):
-- 39-year property: ________
-- 15-year MACRS: ________
-- 7-year MACRS: ________
-- 5-year MACRS: ________
-- [Estate for Years:] ________
Land Value: $________
[Option Payment:] $________
[Remainderman's Interest:] $________
Schedule VIII
Page 2
[Remainder Price (Option Payment plus Remainderman's Interest)] $________
[Lessor's Cost of XXX Lease] $________
SCHEDULE VIII
-------------
ENVIRONMENTAL ACTION SCHEDULE
-----------------------------
