EXHIBIT 10.57
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LEASE
Dated as of November 21, 1997
between
BROOKDALE LIVING COMMUNITIES OF CONNECTICUT, INC.
as the Lessee
and
THE GABLES BUSINESS TRUST
as the Lessor
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Acquisition of Managed Residential Care Facility in Farmington, Connecticut
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This Lease has been executed in several counterparts. To the extent, if any,
that this Lease constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no lien on
this Lease may be created through the transfer or possession of any counterpart
other than the original counterpart containing the receipt therefor executed by
Nomura Asset Capital Corporation and its successors and assigns, as Lender.
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS; INTERPRETATION
1.1. Definitions; Interpretation......................................... 1
ARTICLE II
PURCHASE AND LEASE
2.1. Acceptance and Lease of Property.................................... 1
2.2. Acceptance Procedure................................................ 1
2.3. Lease Term.......................................................... 2
2.4. Title............................................................... 2
ARTICLE III
FUNDING OF THE ADVANCE
3.1. Lessor Commitment................................................... 2
3.2. Procedures for Advance.............................................. 2
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Documentation Date.................................................. 3
4.2. Acquisition Date.................................................... 3
4.3. Conditions Precedent to the Acquisition Date and the Advance........ 3
ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
REPRESENTATIONS
6.1. Representations of the Lessor....................................... 6
6.2. Representations of Lessee........................................... 7
6.3. Representations of the Lessee with Respect to the Advance........... 10
ARTICLE VII
PAYMENT OF RENT
7.1. Rent................................................................ 10
7.2. Payment of Rent..................................................... 11
7.3. Supplemental Rent................................................... 11
7.4. Method of Payment................................................... 11
ARTICLE VIII
QUIET ENJOYMENT:RIGHT TO INSPECT
8.1. Quiet Enjoyment..........................................................12
8.2. Right to Inspect.........................................................12
ARTICLE IX
NET LEASE, ETC.
9.1. Net Lease................................................................12
9.2. No Termination or Abatement..............................................13
ARTICLE X
SUBLEASES
10.1. Subletting..............................................................13
ARTICLE XI
LESSEE ACKNOWLEDGEMENTS
11.1. Condition of the Property...............................................13
11.2. Risk or Loss............................................................14
ARTICLE XII
POSSESSION AND USE OF THE PROPERTY, ETC.
12.1. Utility Charges.........................................................14
12.2. Possession and Use of the Property......................................14
12.3. Compliance with Requirements of Law and Insurance Requirements..........14
12.4. Assignment by Lessee....................................................14
ARTICLE XIII
MAINTENANCE AND REPAIR; RETURN
13.1. Maintenance and Repair; Return..........................................15
ARTICLE XIV
MODIFICATIONS, ETC.
14.1. Modifications, Substitutions and Replacements...........................15
Article XV
WARRANT OF TITLE; EASEMENTS
15.1. Warrant of Title........................................................16
15.2. Grants and Releases of Easements; Lessor's Waivers......................16
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ARTICLE XVI
PERMITTED CONTESTS
16.1. Permitted Contests in Respect of Applicable Law ....................... 17
ARTICLE XVII
INSURANCE
17.1. Public Liability and Workers' Compensation Insurance .................. 18
17.2. Hazard and Other Insurance ............................................ 18
17.3. Insurance Coverage .................................................... 18
17.4. Insurance Proceeds .................................................... 19
17.5. Insurance Requirements in Loan Documents .............................. 19
ARTICLE XVIII
CASUALTY AND CONDEMNATION;
ENVIRONMENTAL MATTERS
18.1. Casualty and Condemnation ............................................. 20
18.2. Environmental Matters ................................................. 21
18.3. Notice of Environmental Matters ....................................... 21
18.4. Environmental Obligations of the Lessor Pursuant to the
Nomura Loan Agreement ................................................ 21
ARTICLE XIX
TERMINATION OF LEASE
19.1. Termination upon Certain Events ....................................... 21
19.2. Termination Procedures ................................................ 22
ARTICLE XX
EVENTS OF DEFAULT
20.1. Events of Default ..................................................... 22
20.2. Remedies .............................................................. 24
20.3. Waiver of Certain Rights .............................................. 27
ARTICLE XXI
LESSOR ASSIGNMENT
21.1. Assignment ............................................................ 27
ARTICLE XXII
PURCHASE PROVISIONS
22.1. Purchase Option ....................................................... 28
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ARTICLES XXIII
RENEWAL PROCEDURES
23.1. Renewal .............................................................. 28
ARTICLE XXIV
REMARKETING OPTION
24.1. Option to Remarket ................................................... 29
24.2. Certain Obligations Continue ......................................... 32
ARTICLE XXV
PROCEDURES RELATING TO PURCHASE OR REMARKETING
25.1. Provisions Relating to the Exercise of Purchase Option and
Conveyance Upon Remarketing and Conveyance Upon Certain
Other Events. ........................................................ 32
ARTICLE XXVI
INDEMNIFICATION
26.1. General Indemnification .............................................. 33
26.2. End of Term Indemnity ................................................ 34
26.3. Environment Indemnity ................................................ 35
26.4. Proceedings in Respect of Claims ..................................... 36
26.5. General Tax Indemnity ................................................ 37
26.6. Funding Losses ....................................................... 42
26.7. Regulation D Compensation ............................................ 42
26.8. Deposits Unavailable ................................................. 42
26.9. Illegality ........................................................... 43
26.10. Increased Cost and Reduced Return .................................... 43
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1. Estoppel Certificates ................................................ 44
ARTICLE XXVIII
ACCEPTANCE OF SURRENDER
28.1. Acceptance of Surrender .............................................. 45
ARTICLE XXIX
NO MERGER OF TITLE
29.1. No Merger of Title ................................................... 45
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ARTICLE XXX
INTENT OF THE PARTIES
30.1. Ownership of the Property ............................................ 45
ARTICLE XXXI
PAYMENT OF CERTAIN EXPENSES
31.1. Transaction Expenses ................................................. 46
31.2. Broker's Fees and Stamp Taxes ........................................ 46
ARTICLE XXXII
OTHER COVENANTS AND AGREEMENTS OF LESSEE
32.1. Covenants ............................................................ 47
ARTICLE XXXIII
MISCELLANEOUS
33.1. Survival; Severability; Etc. ......................................... 49
33.2. Amendments and Modifications ......................................... 49
33.3. No Waiver ............................................................ 49
33.4. Notices .............................................................. 49
33.5. Successors and Assigns ............................................... 49
33.6. Headings and Table of Contents ....................................... 49
33.7. Counterparts ......................................................... 49
33.8. GOVERNING LAW ........................................................ 49
33.9. Original Lease ....................................................... 50
33.10. Waiver of Jury Trial ................................................. 50
33.11. Compliance with Loan Documents ....................................... 50
33.12. Payment of Equity Balance, Transfer of Beneficial Interest
in Lessor ........................................................... 50
33.13. Concerning the Lessor ................................................ 50
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Schedules
SCHEDULE I Notice Information
SCHEDULE II FBTC Basic Rent
Exhibits
EXHIBIT A Funding Request
EXHIBIT B Lease Supplement
EXHIBIT C Responsible Employee's Certificate
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LEASE
THIS LEASE (together with the Lease Supplement (as defined in Appendix 1
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hereto), this "Lease"), dated as of November 21, 1997, between THE GABLES
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BUSINESS TRUST, a Delaware business trust, having its principal office at
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000-0000, and BROOKDALE LIVING COMMUNITIES OF
CONNECTICUT, INC., a Delaware corporation, having its principal office at c/o
Brookdale Living Communities, Inc., 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000.
WITNESSETH:
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WHEREAS, the Lessor desires to lease to the Lessee, and the Lessee desires
to lease from the Lessor, the Property; and
NOW, THEREFORE, in consideration of the foregoing, and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions; Interpretation. Capitalized terms used but not otherwise
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defined in this Lease have the respective meanings specified in Appendix 1 to
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this Lease; and the rules of interpretation set forth in Appendix 1 to this
----------
Lease shall apply to this Lease; provided, however, that capitalized terms used
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but not otherwise defined in this Lease and Appendix 1 to this Lease shall have
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the respective meanings specified in the Nomura Loan Agreement.
ARTICLE II
PURCHASE AND LEASE
2.1 Acceptance and Lease of Property. Subject to the terms and conditions
--------------------------------
of this Lease, on the Acquisition Date (i) the Seller shall convey to the
Lessor, and the Lessor shall accept delivery of, the Property pursuant to the
terms hereof (and subject to the conditions set forth herein) and (ii) the
Lessor shall demise and lease to the Lessee hereunder for the Term the Lessor's
interest in the Property, subject to the Loan Documents and the Lessee hereby
agrees, expressly for the direct benefit of the Lessor, to lease from the Lessor
for the Term, the Lessor's interest in the Property.
2.2 Acceptance Procedure. The Lessee hereby agrees that the execution and
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delivery by the Lessee on the Acquisition Date of an appropriately completed
Lease Supplement in the form of Exhibit B hereto covering the Property thereon
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shall, without further act, constitute the irrevocable acceptance by the Lessee
of the Property for all purposes of this Lease and the other Operative Documents
on the terms set forth therein and herein, and that the Property, shall be
deemed to be included in the leasehold estate of this Lease and shall be subject
to the terms and conditions of this Lease as of the Acquisition Date.
2.3 Lease Term. The term of this Lease (the "Term") shall consist of an
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Interim Lease Term (the "Interim Lease Term") and a Base Lease Term (a "Base
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Lease Term"). The Interim Lease Term of this Lease shall commence on (and
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include) the Acquisition Date and end on February 11, 1999. Upon no less than
sixty (60) days' prior written notice to the Lessor and the payment of an
extension fee in the amount of one percent (1%) of the Principal Indebtedness,
if the payment of same by Lessor is required under the Nomura Loan Agreement,
the Lessee may extend the Interim Lease Term for a period not to exceed twelve
(12) months, but in all events to the eleventh day of a calendar month. The
Base Lease Term shall commence on (and include) the last day of the Interim
Lease Term (and any extensions thereto) and end on (but exclude) the Expiration
Date, as such Expiration Date may be extended from time to time in accordance
with Article XXIII.
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2.4 Title. The Property is leased to the Lessee without any
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representation or warranty, express or implied, by the Lessor and subject to the
rights of parties in possession, the existing state of title (including, without
limitation, Permitted Liens other than Lessor Liens) and all applicable
Requirements of Law. The Lessee shall in no event have any recourse against the
Lessor for any defect in or exception to title to the Property other than to the
extent resulting from Lessor Liens.
ARTICLE III
FUNDING OF THE ADVANCE
3.1 Lessor Commitment. Subject to the conditions and terms hereof, the
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Lessor shall, upon the written request of the Lessee, make the Advance on the
Acquisition Date up to the amount of the Commitment for the purpose of financing
the acquisition of the Property.
3.2 Procedures for Advance.
----------------------
(a) The Lessee shall give the Lessor prior written notice not
later than 9:00 a.m., New York City time, five (5) Business Days prior to the
Acquisition Date, pursuant to a Funding Request substantially in the form of
Exhibit A (the "Funding Request"), specifying the proposed Acquisition Date and
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the amount of Advance requested. Except as the parties may otherwise agree in
writing, the Advance shall be made solely to provide the Lessee with funds with
which to pay or reimburse itself for amounts paid or payable to third parties as
Property Cost and Transaction Expenses paid or payable by the Lessee in
connection with the preparation, execution and delivery of the Operative
Documents, and all fees paid or payable by the Lessee to the Lessor in
connection with the Operative Documents and any amounts paid or payable by
Lessee pursuant to Section 31.2 hereof.
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(b) The Advance shall be made on the Acquisition Date in
immediately available federal funds by wire transfer to the account designated
by the Lessee, except that a portion of the Advance shall be made (in accordance
with instructions to be included in the Funding Request) by wire transfer
directly to an account designated by Lessee to pay the Seller and/or to
reimburse the Lessee for Transaction Expenses.
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ARTICLE IV
CONDITIONS PRECEDENT
4.1. Documentation Date. The Documentation Date (the "Documentation Date")
------------------ ------------------
shall occur on the earliest date on which the following conditions precedent
shall have been satisfied:
(a) Lease. This Lease shall have been duly authorized, executed
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and delivered by the parties thereto.
(b) FBTC Loan Agreement. The FBTC Loan Agreement shall have been
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duly authorized, executed and delivered by the parties thereto.
(c) Lessee's Resolutions and Incumbency Certificate. The Lessee
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shall have delivered to the Lessor a certificate of its Secretary or an
Assistant Secretary attaching and certifying as to the incumbency and signature
of persons authorized to execute and deliver on its behalf the Operative
Documents to which it is a party.
(d) Opinion of Counsel to the Lessee. On or prior to the
--------------------------------
Documentation Date, the Lessor shall have received an opinion of internal
counsel for the Lessee in form and substance satisfactory to the Lessor.
(e) Certain Transaction Expenses. Counsel for the Lessor shall
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have received, to the extent then invoiced, payment in full in cash of all
Transaction Expenses payable to such counsel pursuant to Section 31.1(a).
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(f) FBTC Indemnity. The FBTC Indemnity shall have been duly
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authorized, executed and delivered by the Parent.
(g) Opinion of Counsel to Lessor. On or prior to the Documentation
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Date, the Lessee shall have received an opinion of counsel to the Lessor in form
and substance reasonably satisfactory to the Lessee.
4.2. Acquisition Date. The closing date with respect to the acquisition of
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Land (and the improvements, if any, existing thereon) (the "Acquisition Date")
----------------
shall occur on the earliest date after the Documentation Date, on which all the
conditions precedent thereto set forth in Section 4.3 with respect to such
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acquisition of the Property shall have been satisfied or waived by the
applicable parties as set forth therein. The Acquisition Date for the Property
shall be the date the Advance is made.
4.3. Conditions Precedent to the Acquisition Date and the Advance. The
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occurrence of the Acquisition Date and the obligation of the Lessor to make the
Advance are subject to the satisfaction or waiver of the following conditions
precedent:
(a) Operative Documents; No Default. Each of the Operative
-------------------------------
Documents shall have been duly authorized, executed and delivered by the parties
thereto, in form and substance satisfactory to the parties hereto, and shall be
in full force and effect. No Default or Event of Default shall exist under any
of the Operative Documents (either before or after giving effect to the
transactions contemplated by the Operative Documents), and the Lessor shall have
received a fully executed copy of each of such Operative Documents (other than
this Lease, of which the Lessor shall receive the original). The Operative
Documents (or memoranda thereof), any
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supplements thereto and any financing statements in connection therewith
required under the Uniform Commercial Code shall have been recorded, registered
and filed, if necessary, in such manner as to enable counsel to render the
opinions referred to in clause (c) below and to enable the title company to
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issue the title insurance policies referred to in clause (j) below.
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(b) Taxes. All taxes, fees and other charges in connection with the
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execution, delivery, recording, filing and registration of the Operative
Documents shall have been paid or provisions for such payment shall have been
made to the satisfaction of the Lessor.
(c) Opinions of Counsel. Counsel to the Lessee (i) in the
-------------------
jurisdiction in which the Property is located shall have issued to the Lessor
their opinions, all in form and substance satisfactory to the Lessor and (ii)
shall have issued to the Lessor their opinions to the effect that upon delivery
to the Custodian of the Pledged Securities pursuant to the Securities Pledge
Agreement, a valid first priority security interest in the Pledged Securities
shall have been created and granted to the Custodian in the Pledged Securities.
(d) Governmental Approvals. All necessary (or, in the reasonable
----------------------
opinion of the Lessor, advisable) Governmental Actions, in each case required by
any Requirement of Law, shall have been obtained or made and be in full force
and effect.
(e) Litigation. No action or proceeding shall have been instituted,
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nor shall any action or proceeding be threatened, before any Governmental
Authority, nor shall any order, judgment or decree have been issued or proposed
to be issued by any Governmental Authority (i) to set aside, restrain, enjoin or
prevent the full performance of this Lease, any other Operative Document or any
transaction contemplated hereby or thereby or (ii) which is reasonably likely to
materially and adversely affect the Lessee.
(f) Requirements of Law. The transactions contemplated by the
-------------------
Operative Documents do not and will not violate any Material Requirement of Law
and do not and will not subject the Lessor to any Material adverse regulatory
prohibitions or constraints.
(g) Responsible Employee's Certificates. The Lessor shall have
-----------------------------------
received a Responsible Employee's Certificate of the Lessee, in substantially
the form of Exhibit C, dated as of the Acquisition Date, stating that for the
---------
Lessee (i) each and every representation and warranty of the Lessee contained in
each Operative Document to which it is a party is true and correct in all
material respects on and as of the Acquisition Date; (ii) no Default or Event of
Default has occurred and is continuing under any Operative Document with respect
to the Lessee; (iii) each Operative Document to which the Lessee is a party is
in full force and effect with respect to it; and (iv) the Lessee has duly
performed and complied in all material respects with all covenants, agreements
and conditions contained herein or in any Operative Document required to be
performed or complied with by it on or prior to the Acquisition Date.
(h) Environmental Audit. The Lessor shall have received an
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Environmental Audit for the Property in form and substance acceptable to the
Lessor, provided, Lessor shall not deem an Environmental Audit unacceptable
solely because a Phase Two environmental site assessment is called for.
(i) Appraisal. The Lessor shall have received an Appraisal of the
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Property.
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(j) Survey and Title Insurance. The Lessee shall have delivered to
--------------------------
the Lessor an ALTA/1992 (Urban) Survey of the Property (other than the Equipment
located therein) prepared by a licensed surveyor and meeting the Minimum
Standard Detail Requirements for ALTA/ACSM Land Title Surveys as adopted by the
American Land Title Association/American Society and American Congress on
Surveying and Mapping in 1992 certified to the Lessor and the title company and
otherwise in form reasonably acceptable to the Lessor and an ALTA owner's
insurance policy covering the Property (other than any Equipment) in favor of
the Lessor, and, at an option of Lessee, a leasehold policy in favor of the
Lessee evidencing the Lessee's equitable ownership in the Property, each such
policy to be dated as of the Acquisition Date and in an amount not less than the
Property Cost and to be reasonably satisfactory to the Lessor with
comprehensive, zoning and mechanics liens' endorsements and such other
endorsements reasonably requested by the Lessor.
(k) Recordation. The Lessor shall have received evidence
-----------
reasonably satisfactory to it that each of the Deed and the Lease Supplement
shall have been delivered to the title company in escrow for recordation with
the appropriate Governmental Authorities (and the issuance of the title
insurance policies in clause (j) above shall be satisfactory evidence of the
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foregoing).
(l) Evidence of Property Insurance. The Lessor shall have received
------------------------------
evidence of insurance with respect to the Property required to be maintained
pursuant to this Lease, setting forth the respective coverages, limits of
liability, carrier, policy number and period of coverage, and otherwise
satisfying the requirements set forth in Article XVII.
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(m) Lease Supplement. On or prior to the Acquisition Date, the
----------------
Lessee shall have delivered to the Lessor the Lease Supplement executed by the
Lessee.
(n) Nomura Loan Agreement Conditions Precedent. The conditions
------------------------------------------
precedent set forth in Section 3.1 of the Nomura Loan Agreement shall have been
satisfied or waived; provided, however, that the conditions precedent set forth
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in Sections 3.1 (a)(A), (ix), (xi), (D)-(J) (but with respect to Section
-------------------- ----- ----- ------------------------------------
3.1(a)(J) only to the extent same is made by the Lessee). (K), (M)-(T) and
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(V)-(W) of the Nomura Loan Agreement shall have been satisfied by the Lessee
-------
or waived.
(o) Funding Request. The Lessor shall have received no later than
---------------
five (5) Business Days prior to the Acquisition Date a fully executed
counterpart of the applicable Funding Request, executed by the Lessee.
(p) Delivery of Pledged Securities and Certificate A. The Lessee
------------------------------------------------
shall have delivered the Pledged Securities and the Certificate A to the
Custodian and the Lessor, respectively, in accordance with the Securities Pledge
Agreement and Certificate Pledge Agreement, respectively.
All documents and instruments required to be delivered on the Acquisition
Date shall be delivered at the offices of Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or at such other location as may be determined by the
Lessor and the Lessee.
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ARTICLE V
[INTENTIONALLY OMITTED]
ARTICLE VI
REPRESENTATIONS
6.1. Representations of the Lessor. The Lessor represents and warrants to
-----------------------------
the Lessee that:
(a) ERISA. The Lessor is not and will not be funding the Advance
-----
hereunder, and is not performing its obligations under the Operative Documents,
with the assets of an "employee benefit plan" (as defined in Section 3(3) of
------------
ERISA) which is subject to Title I of ERISA, or "plan" (as defined in Section
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4975(e)(l) of the Code).
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(b) Status. The Lessor is a duly organized and validly existing
------
Delaware business trust and has all requisite power and authority to own its
property and to conduct the business in which it is currently engaged.
(c) Corporate Power and Authority. The Lessor has the requisite
-----------------------------
power and authority to execute, deliver and carry out the terms and provisions
of the Operative Documents to which it is or will be a party and has taken all
necessary action to authorize the execution, delivery and performance of the
Operative Documents to which it is a party and has duly executed and delivered
each Operative Document required to be executed and delivered by it and,
assuming the due authorization, execution and delivery thereof on the part of
each other party thereto, each such Operative Document constitutes a legal,
valid and binding obligation enforceable against it in accordance with its terms
except as the same may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
generally and by equitable principles whether enforcement is sought by
proceedings in equity or at law and except as the same may be limited by certain
circumstances under law or court decisions in respect of provisions providing
for indemnification of a party with respect to liability where such
indemnification is contrary to public policy.
(d) No Legal Bar. Neither the execution, delivery and performance
------------
by the Lessor of the Operative Documents to which it is or will be a party nor
compliance with the terms and provisions thereof, nor the consummation by the
Lessor of the transactions contemplated therein (i) will result in a violation
by the Lessor of any provision of any Applicable Law that would Materially
adversely affect (x) the validity or enforceability of the Operative Documents
to which the Lessor is a party, or the title to, or value or condition of, the
Property, or (y) the financial position, business or results of operations of
the Lessor or the ability of the Lessor to perform its obligations under the
Operative Documents (ii) will conflict with or result in any breach which would
constitute a default under, or (other than pursuant to the Operative Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the property or assets of the Lessor pursuant to the terms
of any indenture, loan agreement or other agreement for borrowed money to which
the Lessor is a party or by which it or any of its property or assets is bound
or to which it may be subject (other than Permitted Liens), or (iii) will
violate any provision of the Trust Agreement.
(e) Litigation. There are no actions, suits or proceedings pending
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or, to the knowledge of the Lessor, threatened (i) against the Property, (ii)
that are reasonably likely to have a Materially
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adverse effect on the ability of the Lessor to perform its obligations under the
Operative Documents or (iii) that question the validity of the Operative
Documents or the rights or remedies of the Lessor with respect to the Lessor or
the Property under the Operative Documents.
(f) Governmental Approvals. No Governmental Action by any Governmental
----------------------
Authority having jurisdiction over the Lessor which has not been taken on or
prior to the Acquisition Date is required to authorize or is required in
connection with (i) the execution, delivery and performance by the Lessor of any
Operative Document to which it is a party, or (ii) the legality, validity,
binding effect or enforceability against the Lessor of any Operative Document to
which it is a party.
(g) Investment Company Act. The Lessor is not an "investment company" or
----------------------
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act.
(h) Public Utility Holding Company Act. The Lessor is not a "holding
----------------------------------
company" or a "subsidiary company," or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company," within the meaning of the
Public Utility Company Act of 1935, as amended.
6.2 Representations of Lessee. The Lessee represents and warrants to the Lessor
-------------------------
that:
(a) Corporate Status. The Lessee (i) is a duly organized and validly
----------------
existing corporation in good standing under the laws of the State of Delaware
and (ii) had the corporate power and authority to own its properties and to
conduct the business in which it is currently engaged.
(b) Corporate Power and Authority. The Lessee has the corporate power and
-----------------------------
authority to execute, deliver and carry out the terms and provisions of the
Operative Documents to which it is or will be a party and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Operative Documents to which it is a party and has duly executed and
delivered each Operative Document required to be executed and delivered by it
and, assuming the due authorization, execution and delivery thereof on the part
of each other party thereto, each such Operative Document constitutes a legal,
valid and binding obligation enforceable against it in accordance with its
terms, except as the same may be limited by insolvency, bankruptcy,
reorganization or other laws relating to or affecting the enforcement of
creditors' rights generally and by equitable principles whether enforcement is
sought by proceedings in equity or at law and except as the same may be limited
by certain circumstances under law or court decisions in respect of provisions
providing for indemnification of a party with respect to liability where such
indemnification is contrary to public policy.
(c) No Legal Bar. Neither the execution, delivery and performance by the
------------
Lessee of the Operative Documents to which it is or will be a party nor
compliance with the terms and provisions thereof, nor the consummation by the
Lessee of the transactions contemplated therein (i) will result in a violation
by the Lessee of any provision of any Applicable Law that would Materially
adversely affect (x) the validity or enforceability of the Operative Documents
to which the Lessee is a party, or the title to, or value or condition of, the
Property, or (y) the consolidated financial position, business or consolidated
results of operations of the Lessee or the ability of the Lessee to perform its
obligations under the Operative Documents, (ii) will conflict with or result in
any breach which would constitute a default under, or (other than pursuant to
the Operative Documents) result in the creation or imposition of (or the
obligation to create or impose) any Lien
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upon any of the property or assets of the Lessee pursuant to the terms of any
indenture, loan agreement or other agreement for borrowed money to which the
Lessee is a party or by which it or any of its property or assets is bound or to
which it may be subject (other than Permitted Liens), or (iii) will violate any
provision of the certificate of incorporation or by-laws of the Lessee.
(d) Litigation. There are no actions, suits or proceedings pending or,
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to the knowledge of the Lessee, threatened (i) against the Property, (ii) that
are reasonably likely to have a Materially adverse effect on the ability of the
Lessee to perform its obligations under the Operative Documents or (iii) that
question the validity of the Operative Documents or the rights or remedies of
the Lessor with respect to the Lessee or the Property under the Operative
Documents.
(e) Governmental Approvals. No Governmental Action by any
----------------------
Governmental Authority having jurisdiction over the Lessee or the Property which
has not been taken on or prior to the Acquisition Date is required to authorize
or is required in connection with (i) the execution, delivery and performance by
the Lessee of any Operative Document to which it is a party, or (ii) the
legality, validity, binding effect or enforceability against the Lessee of any
Operative Document to which it is a party.
(f) Investment Company Act. The Lessee is not an "investment company"
----------------------
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act.
(g) Public Utility Holding Company Act. The Lessee is not a "holding
----------------------------------
company" or a "subsidiary company", or an "affiliate" of a "holding company" or
of a "subsidiary company" of a "holding company", within the meaning of the
Public Utility Company Act of 1935, as amended.
(h) Offer of Securities, etc. Neither the Lessee nor any Person
------------------------
authorized to act on the Lessee's behalf has, directly or indirectly, offered
any interest in the Property or any other interest similar thereto (the sale or
offer of which would be integrated with the sale or offer of such interest in
the Property), for sale to, or solicited any offer to acquire any of the same
from, any Person other than the Lessor and other "accredited investors" (as
defined in Regulation D of the Securities and Exchange Commission).
(i) Solvency. The Lessee's representations and warranties set forth
--------
in Section 4.1 (c)(I) are true and correct.
---
(j) Use of Property. The Property and the contemplated use thereof
---------------
by the Lessee and its agents, assignees, employees, lessees, licensees and
tenants will comply with all Material Requirements of Law (including, without
limitation, all zoning and land use laws and Environmental Laws) and Material
Insurance Requirements, except for such Requirements of Law as the Lessee shall
be contesting in good faith by appropriate proceedings. There is no action,
suit or proceeding (including any proceeding in condemnation or eminent domain
or under any Environmental Law) pending or, to the best of the Lessee's
knowledge, threatened with respect to the Lessee, its Affiliates or the Property
which adversely Materially affects the title to, or the use, operation or value
of, the Property.
-8-
(k) Condition of Property. The Property has all utilities required
---------------------
to adequately service it for its intended use pursuant to adequate permits
(including any that may be required under applicable Environmental Laws). No
fire or other casualty with respect to the Property has occurred which fire or
other casualty has had a Material adverse effect on the Property. The Property
has available all Material services of public facilities and other utilities
necessary for use and operation of the Property as a managed residential
community with assisted living services, including required public utilities and
means of access between the Property and public highways for pedestrians and
motor vehicles. All utilities proposed to serve the Property are located in, and
vehicular access to the Property is provided by, either public rights-of-way
abutting the Property of Appurtenant Rights.
(l) Title. The Deed will be in form and substance sufficient to
-----
convey good and marketable title to the Property in fee simple, subject only to
Permitted Liens. The Lessor will at all time during the Term have good title to
all Equipment located on the Property and in any Improvements, subject only to
Permitted Liens and Lessor Liens, if any.
(m) Insurance. The Lessee has obtained insurance coverage covering the
---------
Property or self insures in a manner which satisfies the terms of this Lease,
and any such coverage is in full force and effect. The Lessee carries insurance
with reputable insurers in respect of its Material Assets, in such manner, in
such amounts and against such risks as is customarily maintained by other
Persons of similar size engaged in similar business.
(n) Flood Hazard Areas. Except as otherwise identified on the survey
------------------
delivered pursuant to Section 4.3(i), no portion of the Property is located in
--------------
an area identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency. With respect to any portion of
the Property located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, the Lessee is
self-insured with respect to all risks related thereto to the same extent as the
Lessee self-insures its other assets similarly situated, and otherwise, in
accordance with Section 17.2 and in accordance with the National Flood Insurance
------------
Act of 1968, as amended, or has provided adequate flood hazard insurance as
required under the Nomura Loan Agreement.
(o) Defaults. No Event of Default or similar event which with the
--------
lapse of time or notice or both would constitute an "Event of Default" or
similar event has occurred and is continuing hereunder or under any Material
bond, debenture, note or other evidence of indebtedness or Material mortgage,
deed of trust, indenture or loan agreement or other instrument to which the
Lessee is a party or is subject to or bound.
(p) Use of Advance. No part of the Advance will be used directly or
---------------
indirectly for the purpose of purchasing or carrying, or for payment in full or
in part of Debt that was incurred for the purposes of purchasing or carrying,
any margin security as such term is defined in Section 207.2 of Regulation G of
-------------
the Board of Governors of the Federal Reserve System (12 C.F.R., Chapter II,
Part 207).
6.3. Representations of the Lessee with Respect to the Advance. The
---------------------------------------------------------
Lessee represents and warrants to the Lessor as of the Acquisition Date as
follows:
(a) Representations. The representations and warranties of the Lessee
---------------
set forth in the Operative Documents (including the representations and
warranties set forth in Section 6.2) are
-----------
-9-
true and correct in all material respects on and as of the Acquisition Date,
except to the extent such representations or warranties relate solely to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date. The
Lessee is in compliance in all material respects with its respective obligations
under the Operative Documents and there exists no Default or Event of Default
under this Lease or any other Operative Documents to which the Lessee is a
party. No Default or Event of Default under this Lease or any other Operative
Document to which the Lessee is a party will occur as a result of, or by giving
effect to, the Advance requested by the Funding Request on such date.
(b) Liens. The Lessee had not permitted Liens to be placed against
-----
the Property other than Permitted Liens.
(c) Advance. The Advance requested represents amounts owed by, or
-------
previously paid by, the Lessee to third parties in respect of Property Cost. The
conditions precedent to the Advance set forth in Article IV have been satisfied.
----------
ARTICLE VII
PAYMENT OF RENT
7.1. Rent
----
(a) The Lessee shall pay FBTC Basic Rent and Lessor Basic Rent on the
Acquisition Date. Thereafter the Lessee shall pay Basic Rent (to the extent such
Basic Rent (or any component thereof) is then due and owing) on (x) each Payment
Date during the Term, (y) the date required under Section 24.1(i) in connection
---------------
with the Lessee's exercise of the Remarketing Option, and (z) any date on which
this Lease shall terminate. The Lessee and Lessor hereby agree that amounts
which would otherwise be payable by Lessee to Lessor hereunder as Lessor Basic
Rent are payable as interest on the Pledged Securities pursuant to the terms of
the Securities Pledge Agreement and such amounts shall not constitute Rent
hereunder.
(b) Rent shall be due and payable in lawful money of the United
States and, after the occurrence and during the continuance of a Cash Management
Event, shall be paid by wire transfer of immediately available funds on the due
date therefor from the relevant Sub-Accounts of the Cash Collateral Account, to
the extent funds exist therein. With the exception of the first payment on the
Acquisition Date of FBTC Basic Rent and Lessor Basic Rent, for which at least
two (2) Business Days prior written notice from the Lessor shall be provided,
the Lessor shall provide written notice of the amount of Basic Rent due at least
five (5) Business Days prior to each due date therefor; provided, however, that
-------- -------
the failure of the Lessor to provide such notice shall not affect Lessee's
obligations hereunder or impose liability on Lessor. Lessee shall deposit all
security deposits received by it with respect to the Property into the Security
Deposit Account and shall cause all relevant checks to be made payable to the
name on the Security Deposit Account.
(c) So long as Cash Management Event is not continuing, Rent shall
be payable by wire transfer of immediately available funds on the due date
therefor as follows: (i) Lessor Basic Rent and FBTC Basic Rent and Supplemental
Rent to which the Lessor is entitled shall be payable to the Lessor at the place
of payment designated in writing by the Lessor and (ii) the
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remainder of Basic Rent and Supplemental Rent to which the Lender is
entitled shall be payable to the Lender or Lender's designee or to an
account identified by the Lender of Lender's designee as set forth in
Section 2.12 (b) of the Nomura Loan Agreement.
----------------
(d) Neither the Lessee's inability or failure to take
possession of all or any portion of the Property when delivered by the
Lessor, whether or not attributable to any act or omission of the
Lessee, or for any other reason whatsoever, shall delay or otherwise
affect the Lessee's obligation to pay Rent for the Property in
accordance with the terms of this Lease.
7.2. Payment of Rent. Rent shall be paid absolutely net to the Lessor,
---------------
so that this Lease shall yield to the Lessor the full amount thereof, without
setoff, deduction or reduction.
7.3. Supplemental Rent. The Lessee shall pay promptly as Supplemental
-----------------
Rent shall become due and payable (a) after the occurrence and during the
continuance of a Cash Management Event, to the Collection Account and (b) so
long as that a Cash Management Event is not continuing, any and all Supplemental
Rent payable pursuant to the Nomura Loan Agreement, to the Lender, Lender's
designee or to such parties as set forth in the Nomura Loan Agreement, and all
other Supplemental Rent to the Lessor. If the Lessee fails to pay any
Supplemental Rent, the Lessor shall have all rights, powers and remedies
provided for herein or by law or equity or otherwise in the case of nonpayment
of Basic Rent. The Lessee shall pay as Supplemental Rent, among other things,
with ten (10) days following demand (or such shorter period that such payment is
required to be made under the Loan Documents) to the extent permitted by
applicable Requirements of Law, interest at the applicable Overdue Rate on any
installment of Basic Rent not paid when due for the period for which the same
shall be overdue and on any payment of Supplemental Rent not paid when due or
demanded by the Lessor for the period from the due date or the date of any such
demand, as the case may be, until the same shall be paid. The expiration or
other termination of the Lessee's obligations to pay Basic Rent hereunder shall
not limit or modify the obligations of the Lessee with respect to Supplemental
Rent. Unless expressly provided otherwise in this Lease, in the event of any
failure on the part of the Lessee to pay and discharge any Supplemental Rent as
and when due, the Lessee shall also promptly pay and discharge any fine,
penalty, interest or cost which may be assessed or added under any agreement
with a third party for nonpayment or late payment of such Supplemental Rent, all
of which shall also constitute Supplemental Rent.
7.4. Method of Payment. Except as otherwise set forth in the Nomura Loan
-----------------
Agreement, each payment of Rent or any other amount due hereunder shall be made
by the Lessee to the applicable party prior to 12:00 noon., New York City time
at the place of payment designated in writing by the Lessor or such applicable
party in funds consisting of lawful currency of the United States of America
which shall be in federal or other immediately available funds to an account
specified by Lender ( with respect to payments to Lender ) and, with respect to
all other payees, to such accounts as specified by such payees. If any payment
is due on a date which is not a Business Day, such payment shall be made on the
next succeeding Business Day. Payments received after 12:00 noon, New York City
time on the date due shall for all purposes hereof be deemed to have been paid
on the next succeeding Business Day.
ARTICLE VIII
QUIET ENJOYMENT; RIGHT TO INSPECT
8.1. Quiet Enjoyment. Subject to Sections 2.4 and 8.2, and subject to
--------------- ------------ ----
the rights of the Lessor contained herein and the other terms of the Operative
Documents to which the Lessee is a party, the Lessee shall peaceably and quietly
have, hold and enjoy the Property for the Term free of any claim or
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other action by the Lessor or anyone claiming by, through or under the Lessor
(other than the Lessee) with respect to any matters arising from and after the
Acquisition Date. Such right of quiet enjoyment is independent of, and shall not
affect the Lessor's rights otherwise to initiate legal action to enforce, the
obligations of the Lessee under this Lease.
8.2. Right to Inspect. During the Term, the Lessee shall, upon
----------------
reasonable prior written notice from the Lessor (except that no notice shall be
required if an Event of Default under this Lease has occurred and is
continuing), and subject to the rights of permitted sublessees permit the Lessor
and its authorized representatives to inspect the Property during normal
business hours, provided that such inspections shall not unreasonably interfere
with the Lessee's business operations at the Property.
ARTICLE IX
NET LEASE, ETC.
9.1. Net Lease. This Lease shall constitute a net lease. Any present or
---------
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall the Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of the Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) by
reason of: (i) any defect in the condition, merchantability, design,
construction, quality or fitness for use of the Property or any part thereof, or
the failure of the Property to comply with all Requirements of Law, including
any inability to occupy or use the Property by reason of such non-compliance;
(ii) any damage to, removal, abandonment, salvage, loss, contamination of or
Release from, scrapping or destruction of or any requisition or taking of the
Property or any part thereof; (iii) any restriction, prevention or curtailment
of or interference with any use of the Property or any part thereof including
eviction; (iv) any defect in title to or rights to the Property or any Lien on
such title or rights or on the Property (other than Lessor Liens); (v) any
change, waiver, extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by the Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to the Lessee or any other Person, or any action
taken with respect to this Lease by any trustee or receiver of the Lessee or
any other Person, or by any court, in any such proceeding; (vii) any claim that
the Lessee has or might have against any Person, including without limitation
the Lessor and any vendor, manufacturer, contractor of or for any portion of the
Property; (viii) any failure on the part of the Lessor to perform or comply with
any of the terms of this Lease (other than performance by Lessor of its
obligations set forth in Section 2.1 hereof), of any other Operative Document or
-----------
of any other agreement; (ix) any invalidity or unenforceability or illegality or
disaffirmance of this Lease against or by the Lessee or any provision hereof or
any of the other Operative Documents or any provision of any thereof; (x) the
impossibility or illegality of performance by the Lessee, the Lessor or both;
(xi) any action by any court, administrative agency or other Governmental
Authority; (xii) any restriction, prevention or curtailment of or interference
with the construction on or any use of the Property or any part thereof; or
(xiii) any other cause or circumstances, whether or not the Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of the Lessee hereunder shall be covenants and agreements that are
separate and independent from any obligations of the Lessor hereunder or under
any other Operative Documents and the obligations of the Lessee shall continue
unaffected unless such obligations shall have been modified or terminated in
accordance with an express provision of this Lease. Nothing contained herein is
intended to obviate or otherwise diminish any right the Lessee may have to bring
an action, either at law or in equity, to remedy any breach by the Lessor of the
Lessor's obligations hereunder.
-12-
9.2. No Termination or Abatement. The Lessee shall remain obligated under
---------------------------
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting the Lessor, or any action with respect to this Lease which
may be taken by any trustee, receiver or liquidator of the Lessor or by any
court with respect to the Lessor. The Lessee hereby waives all right (i) to
terminate or surrender this Lease (except as provided herein) or (ii) to avail
itself of any abatement, suspension, deferment, reduction, setoff, counterclaim
or defense with respect to any Rent. The Lessee shall remain obligated under
this Lease in accordance with its terms and the Lessee hereby waives any and all
rights now or hereafter conferred by statute or otherwise to modify or to avoid
strict compliance with its obligations under this Lease. Notwithstanding any
such statute or otherwise, the Lessee shall be bound by all of the terms and
conditions contained in this Lease. Notwithstanding anything contained in this
Article IX, this Lease may be terminated by Lessor pursuant to, inter alia,
---------- ----- ----
Sections 19.1 and 20.2 hereof.
------------- ----
ARTICLE X
SUBLEASES
10.1. Subletting. The Lessee may, without the consent of the Lessor,
----------
sublease the Property or any portion thereof to any Person. No sublease or other
relinquishment of possession of the Property shall in any way discharge or
diminish any of the Lessee's obligations to the Lessor hereunder, and the Lessee
shall remain directly and primarily liable under this Lease, even if assigned,
and as to the Property or portion thereof so sublet. Any sublease of the
property shall have a term of not longer than one year or if such sublease has a
term of more than one year, such term shall not extend beyond the Base Lease
Term or any Renewal Period. The Lessor hereby expressly agrees that any
obligations or covenants under this Lease may be performed by any permitted
sublessee directly, and the Lessor agrees that any such performance will be
accepted in satisfaction of the obligations or covenants in this Lease.
ARTICLE XI
LESSEE ACKNOWLEDGMENTS
11.1. Condition of the Property. THE LESSEE ACKNOWLEDGES AND AGREES THAT IT
-------------------------
IS LEASING THE PROPERTY "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY THE LESSOR AND SUBJECT TO (A) THE EXISTING STATE OF
TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF, (C) ANY STATE OF
FACTS WHICH AN ACCURATE SURVEY OR PHYSICAL INSPECTION MIGHT SHOW, AND (D)
VIOLATIONS OF REQUIREMENTS OF LAW WHICH MAY EXIST ON THE DATE HEREOF OR ON THE
ACQUISITION DATE. THE LESSOR HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE
ANY REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) AND SHALL NOT BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN FOR LESSOR
LIENS), VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS FOR
USE OF THE PROPERTY (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY
OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY
PART THEREOF) AND THE LESSOR SHALL NOT BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE OF THE
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY REQUIREMENT OF LAW.
-13-
11.2. Risk of Loss. During the Term the risk of loss of or decrease in the
------------
enjoyment and beneficial use of the Property as a result of the damage or
destruction thereof by fire, the elements, casualties, thefts, riots, wars or
otherwise is assumed by the Lessee, and the Lessor shall in no event be
answerable or accountable therefor.
ARTICLE XII
POSSESSION AND USE OF THE PROPERTY, ETC.
12.1. Utility Charges. The Lessee shall pay or cause to be paid all
---------------
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on the Property during the
Term. The Lessee shall be entitled to receive any credit or refund with respect
to any utility charge paid by the Lessee and the amount of any credit or refund
received by the Lessor on account of any utility charges paid by the Lessee, net
of the costs and expenses reasonably incurred by the Lessor in obtaining such
credit or refund, shall be promptly paid over to the Lessee.
12.2. Possession and Use of the Property. The Property shall be used as a
----------------------------------
managed residential community with assisted living services in a manner
consistent with the standards applicable to properties of a similar nature in
the geographic area in which the Property is located and in any event not less
than the standards applied by Affiliates of the Lessee for other comparable
properties of the Lessee or such Affiliates in such geographic area. The Lessee
shall pay, or cause to be paid, all charges and costs required in connection
with the use of the Property as contemplated by this Lease. The Lessee shall not
intentionally commit or permit any waste of the Property or any part thereof.
12.3. Compliance with Requirements of Law and Insurance Requirements.
--------------------------------------------------------------
Subject to the terms hereof relating to permitted contests, the Lessee, at its
sole cost and expense, shall (a) comply in all Material respects with all
Requirements of Law (including all Environmental Laws) and Insurance
Requirements relating to the Property, including the use, construction,
operation, maintenance, repair and restoration thereof and the remarketing
thereof pursuant to Article XXIV, whether or not compliance therewith shall
------------
require structural or extraordinary changes in the applicable Improvements or
interfere with the use and enjoyment of the Property, and (b) procure, maintain
and comply with all Material licenses, permits, orders, approvals, consents and
other authorizations required for the construction, use, maintenance and
operation of the Property and for the use, operation, maintenance, repair and
restoration of the applicable Improvements.
12.4. Assignment by Lessee. Subject to the terms of the Nomura Loan
--------------------
Agreement, the Lessee may, with the consent of the Lessor, assign its rights
hereunder, including the Purchase Option, to any other Person so long as the
Lessee remains fully liable for all of the obligations of the "Lessee" hereunder
and under the other Operative Documents.
ARTICLE XIII
MAINTENANCE AND REPAIR; RETURN
13.1. Maintenance and Repair; Return.
------------------------------
(a) The Lessee, at its sole cost and expense, shall maintain the
Property in good condition (ordinary wear and tear excepted) and make all
necessary repairs thereto, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
-14-
nonstructural or foreseen or unforeseen, in each case as required by all
Requirements of Law and Insurance Requirements and on a basis consistent
with the operation and maintenance by the Lessee or its Affiliates of
properties of a similar nature owned or leased by the Lessee or any of its
Affiliates in the geographic area where the Property is located.
(b) The Lessor shall under no circumstances be required to build any
improvements on the Property, make any repairs, replacement, alterations or
renewals of any nature or description to the Property, make any expenditure
whatsoever in connection with this Lease or maintain the Property in any
way. The Lessor shall not be required to maintain, repair or rebuild all or
any part of the Property, and the Lessee waives any right to (i) require
the Lessor to maintain, repair, or rebuild all or any part of the Property,
or (ii) make repairs at the expense of the Lessor pursuant to any
Requirement of Law, Insurance Requirement, contract, agreement, or
covenant, condition or restriction in effect at any time during the Term.
(c) The Lessee shall, upon the expiration or earlier termination of
this Lease, vacate and surrender the Property to the Lessor in its then-
current, "AS IS" condition, subject to the Lessee's obligations under
Section 12.3, 13.1(a), 14.1, 15.1, 18.1(e), 18.2 and 24.1, unless the
------------ ------- ---- ---- ------- ---- ----
Lessee has purchased the Property from the Lessor as provided herein.
ARTICLE XIV
MODIFICATIONS, ETC.
14.1 Modifications, Substitutions and Replacements. The Lessee, at its sole
---------------------------------------------
cost and expense, may at any time and from time to time make alterations,
renovations, improvements and additions to the Property or any part thereof and
substitutions and replacements therefor (collectively, "Modifications");
-------------
provided, however, that: (i) except for any Modification required to be made
-------- -------
pursuant to a Requirement of Law, (a "Required Modification"), no Modification
---------------------
shall impair the value, utility or useful life of the Property or any part
thereof from that which existed immediately prior to such Modification; (ii) the
Modification shall be done expeditiously and in a good and workmanlike manner,
(iii) the Lessee shall comply with all Requirements of Law (including all
Environmental Laws) and Insurance Requirements applicable to the Modification,
including the obtaining of all permits and certificates of occupancy, and the
structural integrity of the Property shall not be materially adversely affected;
(iv) subject to the terms of Article XVI relating to permitted contests, the
-----------
Lessee shall pay all costs and expenses and shall discharge (or cause to be
insured or bonded over) within sixty (60) days after the same shall be filed (or
otherwise become effective) any Liens arising with respect to the Modification;
and (v) such Modifications shall comply with Sections 12.3 and 13.1(a). All
------------- -------
Modifications shall remain part of the realty and shall be subject to this Lease
and title thereto shall immediately vest in the Lessor; provided, however, that
-------- -------
Modifications that meet each of the following conditions shall not be subject to
this Lease: (x) such Modifications are not Required Modifications, (y) such
Modifications were not financed by the Lessor and (z) such Modifications are
readily removable without impairing the value, utility or remaining useful life
of the Property. The Lessee may place upon the Property any trade fixtures,
machinery, equipment or other property belonging to the Lessee or third parties
and may remove the same at any time during the Term, subject, however, to the
terms of Section 13.1(a) and Lessor hereby waives any liens, to which it may be
---------------
entitled pursuant to any statutory or common law, in such trade fixtures,
machinery, equipment or other property; provided that such trade fixtures,
--------
machinery, equipment or other property do not Materially impair the value,
utility or remaining useful life of the Property; provided, further, that the
-------- -------
Lessee shall keep and maintain at the Property and shall not, without the
Lessor's prior consent, remove from the Property and Equipment financed or
otherwise paid for (directly or indirectly) by the Lessor
-15-
pursuant to this Lease. Notwithstanding the foregoing, the Lessee shall comply
with all provisions of the Loan Documents with respect to Modifications as if
the Lessee were the Borrower thereunder, and to the extent the provisions hereof
are inconsistent with same, the provisions of the Loan Documents shall control.
ARTICLE XV
WARRANT OF TITLE; EASEMENTS
15.1. Warrant of Title.
----------------
(a) The Lessee agrees that except as otherwise provided herein and
subject to the terms of Article XVI relating to permitted contests, the
-----------
Lessee shall not directly or indirectly create or allow to remain, and
shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon the Property or
any Modifications or any Lien, attachment, levy or claim with respect to
the Rent, other than Permitted Liens and Liens on machinery, equipment,
general intangibles and other personal property not financed by the
Advance.
(b) Nothing contained in this Lease shall be construed as constituting
the consent or request of the Lessor, expressed or implied, to or for the
performance by any contractor, mechanic, laborer, materialman, supplier or
vendor of any labor or services or for the furnishing of any materials for
any construction, alteration, addition, repair or demolition of or to the
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT THE LESSOR IS NOT
AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR
TO BE FURNISHED TO THE LESSEE, OR TO ANYONE HOLDING THE PROPERTY OR ANY
PART THEREOF THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANIC'S OR OTHER
LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
THE INTEREST OF THE LESSOR, IN AND TO THE PROPERTY.
15.2. Grants and Releases of Easements; Lessor's Waivers. (x) Provided that
--------------------------------------------------
no Event of Default shall have occurred and be continuing, (y) subject to the
rights of the Lessee under the provisions of Articles XII, XIII and XIV and (z)
------------ ---- ---
provided that the following is consistent with the terms of the Loan Documents,
the Lessor hereby consents in each instance to the following actions by the
Lessee, in the name and stead of the Lessor, but at the Lessee's sole cost and
expense: (a) the granting of easements, licenses, rights-of-way and other rights
and privileges in the nature of easements reasonably necessary or desirable for
the use, repair, or maintenance of the Property as herein provided; (b) the
release of existing easements or other rights in the nature of easements which
are for the benefit of the Property; (c) if required by applicable Governmental
Authority for any purpose, including, but not limited to, the dedication or
transfer of unimproved portions of the Property for road, highway or other
public purposes; and (d) the execution of amendments to any covenants and
restrictions affecting the Property; provided, however, that in each case (i)
-------- -------
such grant, release, dedication, transfer or amendment does not Materially
impair the value, utility or remaining useful life of the Property, (ii) such
grant, release, dedication, transfer, annexation or amendment is reasonably
necessary in connection with the use, maintenance, alteration or improvement of
the Property, (iii) such grant, release, dedication, transfer, annexation or
amendment will not cause the Property or any portion thereof to fail to comply
in any Material respect with the provisions of this Lease or any other Operative
Documents and all Requirements of Law (including, without limitation, all
applicable zoning, planning, building and subdivision ordinances, all
-16-
applicable restrictive covenants and all applicable architectural approval
requirements): (iv) all governmental consents or approvals required prior to
such grant, release, dedication, transfer, annexation or amendment have been
obtained, and all filings required prior to such action have been made; (v) such
grant, release, dedication, transfer, annexation or amendment will not result in
any down-zoning of the Property or any portion thereof or a material reduction
in the maximum density or development rights available to the Property under all
Requirements of Law; (vi) the Lessee shall remain obligated under this Lease and
under any instrument executed by the Lessee consenting to the assignment of the
Lessor's interest in this Lease as security for indebtedness, in each such case
in accordance with their terms, as though such grant, release, dedication,
transfer, annexation or amendment had not been effected and (vii) the Lessee
shall pay and perform any obligations of the Lessor under such grant, release,
dedication, transfer, annexation or amendment. The Lessor acknowledges the
Lessee's right to finance and to secure under the Uniform Commercial Code,
inventory, furnishings, furniture, equipment, machinery, leasehold improvements
and other personal property located at the Property other than Equipment which
has been purchased with funds provided by the Lessor, and Lessor hereby
disclaims and waives any interest therein and right thereto and the Lessor
shall, upon the request of the Lessee, and at the Lessee's sole cost and
expense, execute and deliver any instruments necessary or appropriate to confirm
any such grant, release, dedication, transfer, annexation, amendment, disclaimer
or waiver to any Person permitted under this Section 15.2 including landlord
------------
waivers with respect to any of the foregoing.
ARTICLE XVI
PERMITTED CONTESTS
16.1. Permitted contests in Respect of applicable Law. Subject to the terms
-----------------------------------------------
of the Loan Documents, if, to the extent and for so long as (a) a test,
challenge, appeal or proceeding for review of any Applicable Law relating to the
Property shall be prosecuted diligently and in good faith in appropriate
proceedings by the Lessee or (b) compliance with such Applicable Law shall have
been excused or exempted by a valid nonconforming use, variance permit, waiver,
extension or forbearance, the Lessee shall not be required to comply with such
Applicable Law but only if and so long as any such test, challenge, appeal,
proceeding, waiver, extension, forbearance or noncompliance shall not, in the
reasonable opinion of the Lessor, involve (A) any risk of criminal liability
being imposed on the Lessor or the Property, or (B) any risk of (1) foreclosure,
forfeiture or loss of the Property, or any Material part thereof, or (2) the
nonpayment of Rent or (C) any substantial danger of (1) the sale of, or the
creation of any Lien (other than a Permitted Lien) on, any part of the Property,
(2) civil liability being imposed on the Lessor, or the Property, or (3)
enjoinment of, or interference with, the use, possession or disposition of the
Property in any Material respect.
The Lessor will not be required to join in any proceedings pursuant to this
Section 16.1 unless a provision of any Applicable Law requires that such
------------
proceedings be brought by or in the name of the Lessor; and in that event the
Lessor will join in the proceedings or permit them or any part thereof to be
brought in its name if and so long as (i) no Default has occurred and is
continuing and (ii) the Lessee pays all related expenses and indemnifies the
Lessor to its reasonable satisfaction.
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ARTICLE XVII
INSURANCE
17.1. Public Liability and Workers' Compensation Insurance.
----------------------------------------------------
(a) During the Term the Lessee shall procure and carry, at the
Lessee's sole cost and expense, commercial general liability insurance
for claims for bodily injury or death sustained by persons or damage to
property while on the Property and such other public liability coverages
as are ordinarily procured by the Lessee or its Affiliates who own or
operate similar properties. Such insurance shall be on terms and in
amounts that are in accordance with normal industry practice. The policy
shall be endorsed to name the Lessor, the Trust Company and the Lender
as additional insured. The policy shall also specifically provide that
the policy shall be considered primary insurance which shall apply to
any loss or claim before any contribution by any insurance which the
Lessor may have in force.
(b) The Lessee shall, in the construction of any Improvements
(including in connection with any Modifications thereof) and the
operation of the Property, comply with, or cause the applicable
contractor to comply with, all applicable workers' compensation laws.
17.2. Hazard and Other Insurance. During the Term the Lessee shall keep,
--------------------------
or cause to be kept, the Property insured against loss or damage by fire, flood
and other risks on terms and in amounts that are no less favorable than
insurance covering other similar properties owned by the Lessee or its
Affiliates and that are in accordance with normal industry practice and as
required in the Loan Documents. During the construction of any Improvements the
Lessee shall also maintain or cause to be maintained builders' risk insurance.
17.3. Insurance Coverage.
------------------
(a) The Lessee shall furnish the Lessor with certificates
showing the insurance required under Sections 17.1 and 17.2 to be in
------------- ----
effect and naming the Lessor as additional insured with respect to
liability coverage (excluding worker's compensation insurance), and
naming the Lessor as loss payee with respect to property coverage and
showing the mortgagee endorsement required by Section 17.3(c) with
---------------
respect to such coverage. All such insurance shall be at the cost and
expense of the Lessee. Such certificates shall include a provision for
no less than thirty (30) days' advance written notice by the insurer to
the Lessor in the event of cancellation or reduction of such insurance.
(b) The Lessee agrees that the insurance policy or policies
required by Section 17.2 shall include appropriate clause pursuant to
------------
which such policy shall provide that it will not be invalidated should
the Lessee waive, in writing, prior to a loss, any or all rights of
recovery against any party for losses covered by such policy, and that
the insurance in favor of the Lessor and its rights under and interests
in said policies shall not be invalidated or reduced by any act or
omission or negligence of the Lessee or any other Person having any
interest in the Property. The Lessee hereby waives any and all such
rights against the Lessor to the extent of payments made under such
policies.
(c) All such insurance shall be written by reputable insurance
companies that are financially sound and solvent and otherwise
reasonably appropriate considering the amount and type of insurance
being provided by such companies. Any insurance company selected by the
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Lessee which is rated in Best's Insurance Guide or any successor thereto
(or if there be none, an organization having a similar national
reputation) shall have a general policyholder rating of "A" and a
financial rating of at least "12" or be otherwise acceptable to the
Lessor. All insurance policies required by Section 17.2 shall include a
------------
standard form mortgagee endorsement in favor of the Lender.
(d) The Lessor may carry separate liability insurance so long as
(i) the Lessee's insurance is designated as primary and in no event
excess or contributory to any insurance the Lessor may have in force
which would apply to a loss covered under the Lessee's policy and (ii)
each such insurance policy will not cause the Lessee's insurance
required under this Article XVII to be subject to a coinsurance
------------
exception of any kind.
(e) The Lessee shall pay as they become due all premiums for the
insurance required by Section 17.1 and Section 17.2, and shall renew or
------------ ------------
replace each policy prior to the expiration date thereof. Throughout the
Term, at the time each of the Lessee's insurance policies is renewed
(but in no event less frequently than once each year), the Lessee shall
deliver to the Lessor certificates of insurance evidencing that all
insurance required by this Article XVII is being maintained by the
------------
Lessee and is in effect.
17.4. Insurance Proceeds. All insurance proceeds in respect of any loss
------------------
or occurrence shall, to the extent permitted under the Loan Documents, be paid
to the Lender and, upon compliance with the terms of the Loan Documents, the
Lender shall pay same to the Lessee for application toward the reconstruction,
repair or refurbishment of the Property to the extent permitted under the Loan
Documents.
17.5. Insurance Requirements in Loan Documents. Notwithstanding the
----------------------------------------
provisions of Section 17.1, 17.2, 17.3 and 17.4, the Lessee shall comply with
------- ---- ---- ---- ----
all Insurance Requirements (as defined in the Nomura Loan Agreement) and to the
extent the provisions hereof are inconsistent with same, the provisions of the
Loan Documents shall control. The Lessor acknowledges that the Insurance
Requirements are acceptable to it; provided, however, that notwithstanding the
-------- -------
foregoing, the Lessee must at all times during the Term have liability
insurance complying with Section 17.1.
------------
ARTICLE XVIII
CASUALTY AND CONDEMNATION;
ENVIRONMENTAL MATTERS
18.1. Casualty and Condemnation.
-------------------------
(a) Subject to the provisions of the Article XVIII, if all or a
-------------
portion of the Property is damaged or destroyed in whole or in part by a
Casualty or if the use, access, occupancy, easement rights or title to
the Property or any part thereof, is the subject of a Condemnation, then
the Lessee shall (i) reconstruct, refurbish and repair the Property upon
submission to the Lessor of an architect's certificate as to the cost of
such restoration and to the effect that the Property can be fully
restored to the condition required under the Operative Documents and as
to the cost of such restoration or (ii) pay the Lease Balance.
(b) The Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At the Lessee's
reasonable request,
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and at the Lessee's sole cost and expense, the Lessor shall participate in
any such proceeding, action, negotiation, prosecution or adjustment. The
Lessor and the Lessee agree that this Lease shall control the rights of the
Lessor and the Lessee in and to any such award, compensation or insurance
payment.
(c) If the Lessor or the Lessee shall receive notice of a Casualty or
of an actual, pending or threatened Condemnation of the Property or any
interest therein, the Lessor or the Lessee, as the case may be, shall give
notice thereof to the other and the Lender promptly after the receipt of
such notice.
(d) If pursuant to this Section 18.1 and Section 19.1 this Lease shall
------------ ------------
continue in full force and effect following a Casualty or Condemnation with
respect to the Property, the Lessee shall, at its sole cost and expense
(and, without limitation, if any award, compensation or insurance payment
is not sufficient to restore the Property in accordance with this
paragraph, the Lessee shall pay the shortfall), promptly and diligently
repair any damage to the Property caused by such Casualty or Condemnation
in conformity with the requirements of Sections 13.1 and 14.1 using the as-
------------- ----
built plans and specifications for the Property (as modified to give effect
to any subsequent Modifications, any Condemnation affecting the Property
and all applicable Requirements of Law) so as to restore the Property as
near as possible to the condition, operation, function and value as existed
immediately prior to such Casualty or Condemnation with such Modification
as the Lessee may elect in accordance with Section 14.1. In such event,
------------
title to the Property shall remain with the Lessor. Upon completion of such
restoration, the Lessee shall furnish the Lessor an architect's certificate
of substantial completion and a Responsible Employee's Certificate
confirming that such restoration has been completed pursuant to this Lease.
(e) In no event shall a Casualty or Condemnation affect the Lessee's
obligations to pay Rent pursuant to Section 7.1 or to perform its
-----------
obligations and pay any amounts due on the Expiration Date or pursuant to
Articles XXII and XXV.
------------- ---
(f) Any Excess Proceeds received by the Lessor in respect of a
Casualty or Condemnation shall be turned over to the Lessee.
(g) Notwithstanding the provisions of this Section 18.1, the Lessee
------------
shall comply with and be entitled to the benefit of all provisions in the
Loan Documents regarding Casualty and Condemnation and to the extent the
provisions hereof are inconsistent with same, the provisions of the Loan
Documents shall control.
18.2. Environmental Matters. Promptly upon the Lessee's knowledge of the
---------------------
existence of an Environmental Violation, the Lessee shall notify the Lessor in
writing of such Environmental Violation. If the Lessor elects not to terminate
this Lease pursuant to Section 19.1, at the Lessee's sole cost and expense, the
------------
Lessee shall promptly and diligently commence any response, clean up, remedial
or other action necessary to remove, clean up or remediate the Environmental
Violation in accordance with the terms of Section 12.3. If the Lessor does not
------------
deliver a Termination Notice pursuant to Section 19.1, the Lessee shall, upon
------------
completion of remedial action by the Lessee, cause to be prepared by an
environmental consultant reasonably acceptable to the Lessor a report describing
the Environmental Violation and the actions taken by the Lessee (or its agents)
in response to such Environmental Violation, and a statement by the consultant
that the Environmental Violation has been remedied in compliance in all material
respects with applicable Environmental Law. Each such Environmental Violation
shall be remedied prior
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to the Expiration Date. Nothing in this Article XVIII shall reduce or limit the
-------------
Lessee's obligations under the indemnity provisions hereof.
18.3. Notice of Environmental Matters. Promptly, but in any event within
-------------------------------
sixty (60) Business Days from the date the Lessee has actual knowledge thereof,
the Lessee shall provide to the Lessor written notice of any pending or
threatened claim, action or proceeding involving any Environmental Violation on
or in connection with the Property. All such notices shall describe in
reasonable detail the nature of the claim, action or proceeding and the Lessee's
proposed response thereto. In addition, the Lessee shall provide to the Lessor,
within sixty (60) Business Days of receipt, copies of all written communications
with any Governmental Authority relating to any Environmental Law or any Release
in connection with the Property. The Lessee shall also promptly provide such
detailed reports of any such environmental claims as may reasonably be requested
by the Lessor. In the event that the Lessor receives written notice of any
pending or threatened claim, action or proceeding involving any Environmental
Violation on or in connection with the Property, the Lessor shall promptly give
notice thereof to the Lessee.
18.4. Environmental Obligations of the Lessor Pursuant to the Nomura Loan
-------------------------------------------------------------------
Agreement. The representations, warranties and covenants set forth in Section
--------- -------
4.1(d)(U) and Section 5.1(b)(D) through Section 5.1(b)(I) of the Nomura Loan
--------- ----------------- -----------------
Agreement imposed upon Lessee pursuant thereto shall survive in perpetuity.
ARTICLE XIX
TERMINATION OF LEASE
19.1. Termination upon Certain Events. With respect to the Property, if
-------------------------------
either:
(i) a Significant Condemnation occurs; or
(ii) an Environmental Violation occurs which (x) either causes the
Lender to accelerate the Principal Indebtedness or (y) is not being
addressed by the Lessee or the Parent as required hereby or by the FBTC
Environmental Guaranty;
and the Lessor or the Lessee shall have given written notice to the other party
that this Lease is to be terminated as a consequence of the occurrence of such
an event (a "Termination Notice"), then, the Lessee shall be obligated to
------------------
purchase all or a portion of the Lessor's interest in the Property on a Payment
Date prior to the date occurring one hundred eighty (180) days after the date of
the notice of termination (or if such Payment Date arises prior to the second
anniversary of the Start-Up Date, on the first Payment Date after such
anniversary) by paying the Lessor on such Payment Date an amount equal to (a)
the Equity Balance, in which case this Lease shall not terminate but the Lease
Balance shall be reduced by the amount of such payment of Equity Balance or (b)
the Lease Balance.
19.2. Termination Procedures. On the date of the payment by the Lessee of
----------------------
the Lease Balance in accordance with the Termination Notice or in accordance
with Section 19.1 (such date, the "Termination Date"), this Lease shall
------------ ----------------
terminate and, concurrent with the Lessor's receipt of such payment,
(a) the Lessor shall execute and deliver to the Lessee (or to the
Lessee's cost and expense a quitclaim deed with respect to the Property, a
quitclaim xxxx of sale with respect to the applicable Equipment and an
assignment of the Lessor's entire interest in the
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Property (which shall include an assignment of all of the Lessor's
right, title and interest in and to any Net Proceeds not previously
received by the Lessor and existing subleases and security deposits
thereunder), in each case in recordable form and otherwise in conformity
with local custom and free and clear of any Lessor Liens attributable to
the Lessor;
(b) the Property shall be conveyed to such Person "AS IS" and in
its then present physical condition;
(c) in the case of a termination pursuant to clause (i) or (ii)
---------- ----
of Section 19.1 the Lessor shall convey to the Lessee any Net Proceeds
------------
with respect to the Casualty or Condemnation giving rise to the partial
termination of this Lease theretofore received by the Lessor or at the
request of the Lessee, such amounts shall be applied against sums due
hereunder; and
(d) the Lessor shall execute and deliver to Lessee and the
Lessee's title insurance company an affidavit as to the absence of any
Lessor Liens and shall execute and deliver to the Lessee a statement of
termination of this Lease to the extent relating to the Property.
ARTICLE XX
EVENTS OF DEFAULT
20.1 Events of Default. The occurrence of any one or more of the
-----------------
following events (whether such event shall be voluntary of involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute an "Event of Default";
----------------
(a) the Lessee shall fail to make a payment of any Basic Rent,
including amounts due pursuant to Section 19.1 or 22.1 or Article XXIV,
------------ ---- ------------
Equity Balance or Lease Balance when due; provided, however, that if a
-------- -------
Cash Management Event has not occurred, the failure to pay those
portions of Basic Rent consisting of FBTC Basic Rent, Lessor Basic Rent,
the Required Debt Service Payment due on such date, the Basic Carrying
Costs Monthly Installment due on such date or the Capital Reserve
Monthly Installment due on the due date therefor shall not constitute an
Event of Default if Lessee shall cure such failure within five (5) days
after the due date therefor;
(b) the Lessee shall fail to make payment of any Supplemental
Rent (i) required to be made pursuant to the Nomura Loan Agreement on
the due date therefor and such failure is not remedied within any
applicable grace period set forth in the Loan Documents, and (ii) any
other component of Supplement Rent due and payable within five (5)
Business Days after receipt of notice thereof;
(c) the Lessee shall fail to maintain insurance as required by
Article XVII of this Lease;
------------
(d) the Lessee shall fail in any Material respect to observe or
perform any term, covenant or condition of the Lessee under this Lease
or the Operative Documents to which it is party other than those
described in Section 20.1(a), (b), or (c) hereof, and such failure shall
--------------- --- ---
have continued for thirty (30) days after the earlier or (i) delivery to
the Lessee of written notice thereof from the Lessor or (ii) a
Responsible Employee of the Lessee shall have knowledge of such failure;
provided, however, that if such failure is capable of cure but cannot be
-------- -------
cured by payment of
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money or cannot be cured by diligent efforts within such thirty (30) day
period but such diligent efforts shall be properly commenced within the
cure period and the Lessee is diligently pursuing, and shall continue to
pursue diligently, remedy of such failure, the cure period shall be
extended for an additional period of time as may be necessary to cure,
not to exceed an additional one hundred twenty (120) days or the extend
beyond the Expiration Date; provided further, that failure by the Lessee
-------- -------
to fully comply with the requirements of Section 24.1, hereof shall not
------------
be subject to any cure period;
(e) to the extent the same causes an Event of Default under the
Nomura Loan Agreement, any representation or warranty made by the Lessee
in any of the Operative Documents to which it is a party shall prove to
have been inaccurate in any Material respect at the time made, and if
such inaccuracy can be cured, it shall not have been cured within forty-
five (45) days after the earlier of (i) delivery to the Lessee of
written notice thereof from the Lessor or (ii) a Responsible Employee of
the Lessee shall have knowledge of such inaccuracy;
(f) an "Event of Default" under the Nomura Loan Agreement shall
have occurred and be continuing;
(g) the Lessee or the Parent shall (i) admit in writing its
inability to pay its debts generally as they become due, (ii) file a
petition under the United States bankruptcy laws or any other applicable
insolvency law or statute of the United States of America or any State
or Commonwealth thereof, (iii) make a general assignment for the benefit
of its creditors, (iv) consent to the appointment of a receiver of
itself or the whole or any substantial part of its property, (v) fail to
cause the discharge of any custodian, trustee or receiver appointed for
the Lessee or the Parent, as applicable, or the whole or a substantial
part of the Lessee's or the Parent's property within ninety (90) days
after such appointment, (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy laws or
any other applicable insolvency law or statute of the United States of
America or any State or Commonwealth thereof; or (vii) be adjudicated as
bankrupt or insolvent;
(h) dissolution, liquidation or insolvency proceedings or a
petition under the United States bankruptcy laws or any other applicable
insolvency law or statute of the United States of America or any State
or Commonwealth thereof shall be filed against, consented to or
acquiesced by the Lessee or the Parent and not dismissed within ninety
(90) days from the date of its filing, or a court of competent
jurisdiction shall enter an order or decree appointing, without the
consent of the Lessee or the Parent, as applicable, a receiver,
liquidator or trustee of the Lessee or the Parent or the whole or a
substantial part of any of the Lessee's or the Parent's property and
such order or decree shall not be vacated or set aside within ninety
(90) days from the date of the entry thereof;
(i) an event of default, as defined in any agreement, mortgage,
indenture or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Lessee in a
principal amount in excess of $5,000,000, whether such indebtedness now
exists or shall hereafter be created, shall happen, if the effect of
such default is to accelerate the maturity of such indebtedness, unless
the Lessee is diligently and in good faith contesting such default in
appropriate proceedings;
-23-
(j) any Lien granted by the Lessee under any Operative Document shall, in
whole or in part, terminate, cease to be effective against, or cease to be the
legal, valid, binding and enforceable obligation of, the Lessee:
(k) the Lessee shall directly or indirectly contest the validity of any
Operative Document in any manner in any court of competent jurisdiction or any
lien granted by the Lessee under any Operative Document:
(l) the Lessee shall fail to satisfy any of its obligations under the
Securities Pledge Agreement or Certificate Pledge Agreement, including, without
limitation, satisfying the Collateral Requirement (as defined in the Securities
Pledge Agreement) within the applicable grace period provided therefor, for
which the exclusive remedy for such Event of Default is provided in Section
-------
20.2(k); or
-------
(m) the Lessor shall not have received all FBTC Basic Rent and Lessor Basic
Rent within five (5) days after any FBTC Payment Date.
20.2. Remedies. Upon the occurrence of any Event of Default and at any time
--------
thereafter, the Lessor may, so long as such Event of Default is continuing, do
one or more of the following as the Lessor in its sole discretion shall
determine, without limiting any other right or remedy the Lessor may have on
account of such Event of Default:
(a) The Lessor may, by notice to the Lessee, rescind or terminate this
Lease as of the date specified in such notice; however, (i) no reletting,
reentry or taking of possession of the Property (or any portion thereof) by the
Lessor will be construed as an election on the Lessor's part to terminate this
Lease unless a written notice of such intention is given to the Lessee,
(ii) notwithstanding any reletting, reentry or taking of possession, the Lessor
may at any time thereafter elect to terminate this Lease for a continuing Event
of Default and (iii) no act or thing done by the Lessor or any of its agents,
representatives or employees and no agreement accepting a surrender of the
Property shall be valid unless the same be made in writing and executed by the
Lessor.
(b) The Lessor may (i) demand that the Lessee, and the Lessee shall upon
the written demand of the Lessor, return the Property promptly to the Lessor in
the manner and condition required by, and otherwise in accordance with all of
the provisions of, Articles XI and XIII and Section 12.3 hereof as if the
----------- ---- ------------
Property were begin returned at the end of the Term, and the Lessor shall not be
liable for the reimbursement of the Lessee for any costs and expenses incurred
by the Lessee in connection therewith and (ii) without prejudice to any other
remedy which the Lessor may have for possession of the Property, and to the
extent and in the manner permitted by Applicable Law, enter upon the Property
and take immediate possession of (to the exclusion of the Lessee) the Property
or any part thereof and expel or remove the Lessee and any other Person who may
be occupying the Property, by summary proceedings or otherwise, all without
liability to the Lessee for or by reason of such entry or taking of possession,
whether for the restoration of damage to property caused by such taking or
otherwise and, in addition to the Lessor's other damages, the Lessee shall be
responsible for all costs and expenses incurred by the Lessor in connection with
any reletting including, without limitation, reasonable brokers' fees and all
costs of any alterations or repairs made by the Lessor.
-24-
(c) The Lessor may (i) sell all or any part of the Property at public sale
free and clear of any rights of the Lessee and without any duty to account to
the Lessee with respect to such action or inaction or any proceeds (except that
Excess Proceeds are payable to and shall be paid to the Lessee) with respect
thereto (except to the extent required by clause (ii) below if the Lessor shall
-----------
elect to exercise its rights thereunder) in which event the Lessee's obligation
to pay Basic Rent hereunder for periods commencing after the date of such sale
shall be terminated or proportionately reduced, as the case may be; and (ii) if
the Lessor shall so elect, demand that the Lessee pay to the Lessor, and the
Lessee shall pay to the Lessor, on the date of such sale, as liquidating damages
for loss of a bargain and not as a penalty (the parties agreeing that the
Lessor's actual damages would be difficult to predict, but the aforementioned
liquidated damages represents a reasonable approximation of such amount) (in
lieu of Basic Rent due for periods commencing on or after the Payment Date
coinciding with such date of sale (or, if the sale date is not a Payment Date,
the Payment Date next preceding the date of such sale)), an amount equal to (A)
the excess, if any, of (1) the Lease Balance calculated as of such Payment Date
(including all Rent due and unpaid to and including such Payment Date and), over
(2) the net proceeds of such sale (that is, after deducting all costs and
expenses incurred by the Lessor incident to such conveyance, including, without
limitation, repossession costs, brokerage commissions, prorations, transfer
taxes, fees and expenses for counsel, title, insurance fees, survey costs,
recording fees, and any repair costs); plus (B) interest at the Overdue Rate on
the foregoing amount from such Payment Date until the date of payment.
(d) The Lessor may, at its option, elect not to terminate this Lease and
continue to collect all Basic Rent, Supplemental Rent, and all other amounts due
the Lessor (together with all costs of collection) and enforce the Lessee's
obligations under this Lease as and when the same become due, or are to be
performed, and at the option of the Lessor, upon any abandonment of the Property
by the Lessee or re-entry of same by the Lessor, the Lessor may, in its sole and
absolute discretion, elect not to terminate this Lease and may make the
necessary repairs in order to relet the Property, and relet the Property or any
part thereof for such term or terms (which may be for a long term extending
beyond the Term of this Lease) and at such rental or rentals and upon such other
terms and conditions as the Lessor in its reasonable discretion may deem
advisable; and upon each such reletting all rentals actually received by the
Lessor from such reletting shall be applied to the Lessee's obligation hereunder
and their other Operative Documents in such order, proportion and priority as
the Lessor may elect to the Lessor's sole and absolute discretion. If such
rentals received from such reletting during any period are less than the Rent
with respect to the Property to be paid during that period by the Lessee
hereunder, the Lessee shall pay any deficiency, as calculated by the Lessor, to
the Lessor on the next Payment Date.
(e) Unless the Property has been sold in its entirety, the Lessor may,
whether or not the Lessor shall have exercised or shall thereafter at any time
exercise any of its rights under paragraph (b), (c) or (d) of this Section 20.2
------------ --- --- ------- ----
with respect to the Property or portion thereof, demand, by written notice to
the Lessee specifying a date (a "Termination Date") not earlier than 10 days
----------------
after the date of such notice, that the Lessee purchase, on such Termination
Date, the Property (or the remaining portion thereof) in accordance with the
provisions of Article XXII; provided, however, that no such written notice shall
------------ -------- -------
be required upon the occurrence of any Event of Default in clause (g) or (h) of
---------- ---
Section 20.1.
------------
(f) The Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, or proceed by appropriate court action
(legal or equitable) to enforce the terms.
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hereof or to recover damages for the breach hereof. Separate suits may
be brought to collect any such damages for any period(s), and such suits
shall not in any manner prejudice the Lessor's right to collect any such
damages for any subsequent period(s), or the Lessor may defer any such
suit until after the expiration of the Term, in which event such suit
shall be deemed not to have accrued until the expiration of the Term.
(g) The Lessor may retain and apply against the Lessor's damages
all sums which the Lessor would, absent such Event of Default, be
required to pay to, or turn over to, the Lessee pursuant to the terms of
the Lease.
(h) If an Event of Default shall have occurred and so long as
same is continuing, the Lessor, as a matter of right and without notice
to the Lessee, and without regard to the value of the Property or the
solvency of the Lessee, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers of the Property,
and the Lessee hereby irrevocably consents to any such appointment. Any
such receiver(s) shall have all of the usual powers and duties of
receivers in like or similar cases and all of the powers and duties of
the Lessor in case of entry, and shall continue as such and exercise
such powers until the date of confirmation of the sale of the Property
unless such receivership is sooner terminated.
(i) To the maximum extent permitted by law, the Lessee hereby
waives the benefit of any appraisement, valuation, stay, extension,
reinstatement and redemption laws now or hereafter in force and all
rights of marshaling in the event of any sale of any or all of the
Property or any interest therein.
(j) The Lessor shall be entitled to enforce payment of the
indebtedness and performance of the obligations secured hereby and to
exercise all rights and powers under this instrument or under any of the
other Operative Documents or other agreement or any laws now or
hereafter in force, notwithstanding some or all of the obligations
secured hereby may now or hereafter be otherwise secured, whether by
mortgage, security agreement, pledge, lien, assignment or otherwise.
Neither the acceptance of this instrument nor its enforcement, shall
prejudice or in any manner affect the Lessor's right to realize upon or
enforce any other security now or hereafter held by the Lessor, it being
agreed that the Lessor shall be entitled to enforce this instrument and
any other security now or hereafter held by the Lessor in such order and
manner as the Lessor may determine in its absolute discretion. No remedy
herein conferred upon or reserved to the Lessor is intended to be
exclusive of any other remedy herein or by law provided or permitted,
but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity
or by statute. Every power or remedy given by any of the Operative
Documents to the Lessor or to which it may otherwise be entitled, may be
exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by the Lessor.
(k) The Lessor may exercise any and all rights under (a) the
Certificate Pledge Agreement against Certificate A and/or (b) the
Securities Pledge Agreement against the Pledged Securities, and the
collateral represented thereby.
In no event shall the Lessor, in the exercise of the remedies provided in this
instrument (including, without limitation, in connection with the assignment of
rents to Lessor, or the appointment of a receiver and the entry of such receiver
on to all or any part of the Property), be deemed a "mortgagee in
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possession," and the Lessor shall not in any way be made liable for any act,
either of commission or omission, in connection with the exercise of such
remedies.
If, pursuant to the exercise by the Lessor of its remedies pursuant to
this Section 20.2, the Lease Balance, all other amounts due and owing from the
------------
Lessee under this Lease and the other Operative Documents have been paid in
full, then the Lessor shall remit to the Lessee any excess amounts received by
the Lessor.
20.3. Waiver of Certain Rights. If this Lease shall be terminated
------------------------
pursuant to Section 20.2, the Lessee waives, to the fullest extent permitted by
------------
law, (a) any notice of re-entry or the institution of legal proceedings to
obtain re-entry or possession; (b) any right of redemption, re-entry or
repossession; (c) the benefit of any laws now or hereafter in force exempting
property from liability for rent or for debt or limiting the Lessor with respect
to the election of remedies; and (d) any other rights which might otherwise
limit or modify any of the Lessor's rights or remedies under this Article XX.
----------
ARTICLE XXI
LESSOR ASSIGNMENT
21.1. Assignment. The Lessee hereby consents to the Lessor's assignment
----------
of this Lease to the Lender and the Lender and the Lessee acknowledge that the
Lender is a third party beneficiary of this Lease.
ARTICLE XXII
PURCHASE PROVISIONS
22.1. Purchase Option. Provided that the Lessee shall not have given
---------------
notice of its intention to exercise the Remarketing Option, the Lessee shall
have the option on any Payment Date after the second anniversary of the Start-Up
Date (exercisable by giving the Lessor irrevocable written notice (the "Purchase
--------
Notice") of the Lessee's election to exercise such option) to (a) purchase all,
------
and not less than all, of the Property on the date specified in such Purchase
Notice at a price equal to the Lease Balance theretofore accruing or (b) pay the
Lessor the Equity Balance and reduce the amount of the Lease Balance by the
amount paid. The Lessee shall deliver the Purchase Notice to the Lessor not less
than thirty (30) days prior to such purchase or payment of the Equity Balance.
If the Lessee exercises its option to purchase the Property pursuant to Section
-------
22.1(a) (the "Purchase Option"), the Lessor shall transfer to the Lessee or its
------- ---------------
designee all of the Lessor's right, title and interest in and to the Property as
of the date specified in the Purchase Notice upon receipt of the Lease Balance
in accordance with Section 25.1. Subject to Section 12.4 and with the consent of
------------ ------------
the Lessor the Lessee may assign the Purchase Option to any Person. The Lessee
may designate, in a notice given to the Lessor not less than five (5) Business
Days prior to the closing of such purchase (time being of the essence), the
transferee or transferees to whom the conveyance shall be made (if other than
to the Lessee), in which case such conveyance shall (subject to the terms and
conditions set forth herein) be made to such designee; provided, however, that
-------- -------
such designation of a transferee or transferees shall not cause the Lessee to
be released, fully or partially, from any of its obligations under this Lease,
including, without limitation, the obligation to pay the Lessor the Lease
Balance on the Expiration Date.
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ARTICLE XXIII
RENEWAL PROCEDURES
23.1. Renewal. Subject to the conditions set forth herein, the Lessee and
-------
the Lessor may agree to renew the Base Lease Term for the Property for up to
eleven one-year terms (each, a "Renewal Term"), with each such Renewal Term to
------------
commence on the first day following the Expiration Date then in effect. The
effective extension of the Base Lease Term for the Property shall be subject to
the satisfaction of each of the following conditions:
(a) each renewal shall be automatic unless on or before one hundred
eighty (180) days prior to the Expiration Date the Lessee shall have
delivered written notice to the Lessor of the Lessee's determination not to
extend the Base Lease Term for the Property;
(b) on the Expiration Date then in effect prior to any renewal, no
Event of Default shall have occurred and be continuing; and
(c) the Lessee shall not have given notice of its intention to
exercise the Remarketing Option.
ARTICLE XXIV
REMARKETING OPTION
24.1. Option to Remarket. Subject to the fulfillment of each of the
------------------
conditions set forth in this Section 24.1 the Lessee shall have the option
------------
beginning on the second anniversary of the Start-Up Date (the "Remarketing
-----------
Option") to market and complete the sale of the Property for the Lessor.
------
The Lessee's effective exercise and consummation of the Remarketing Option
shall be subject to the due and timely fulfillment of each of the following
provisions as to the Property as of the dates set forth below.
(a) Not later than one hundred eighty (180) days prior to the
Expiration Date, the Lessee shall give to the Lessor written notice of the
Lessee's exercise of the Remarketing Option, which exercise shall be
irrevocable. If Lessee does not deliver a notice of its intention not to
renew this Lease as provided in Section 23.1 and fails to timely provide
the Remarketing Notice, then this Lease shall be renewed for a Renewal Term
as provided in Section 23.1. If Lessee delivers the notice of its intention
not to renew this Lease as provided in Section 23.1 and fails to timely
provide the Remarketing Notice, then Lessee shall be deemed to have elected
to exercise its Purchase Option under Section 22.1(i).
---------------
(b) Not later than one hundred twenty (120) days prior to the
Expiration Date, the Lessee shall deliver to the Lessor an Environmental
Audit for the Property. Such Environmental Audit shall be prepared by an
environmental consultant selected by the Lessor in the Lessor's reasonable
discretion and shall contain conclusions reasonably satisfactory to the
Lessor as to the environmental status of the Property. If any such
Environmental Audit indicates any exceptions with respect to which a Phase
Two environmental assessment is recommended, the Lessee shall also deliver
(i) a Phase Two environmental assessment by such environmental consultant
within thirty (30) days prior to the Expiration Date and (ii) a certificate
of such environmental consultant
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prior to the Expiration Date showing the completion of all remedial action
in compliance with Applicable Law.
(c) On the date of the Lessee's notice to the Lessor of the Lessee's
exercise of the Remarketing Option, and on the Expiration Date, no Event of
Default shall exist.
(d) The Lessee shall have completed in all Material respects all
Modifications, restoration and rebuilding of the Property pursuant to
Sections 14.1 and 18.1 (as the case may be) and shall have fulfilled in all
------------- ----
Material respects all of the conditions and requirements in connection
therewith pursuant to said Sections, in each case by the date on which the
Lessor receives the Lessee's notice of the Lessee's exercise of the
Remarketing Option (time being of the essence), regardless of whether the
same shall be within the Lessee's control. The Lessee shall have also paid
the cost of all Modifications commenced prior to the Expiration Date. The
Lessee shall not have been excused pursuant to Section 16.1 from complying
------------
with any Applicable Law that involved the extension of the ultimate
imposition of such Applicable Law beyond the last day of the Term. Any
Permitted Liens (other than Lessor Liens) on the Property that were
contested by the Lessee shall have been removed.
(e) During the Marketing Period, the Lessee shall, as nonexclusive
agent for the Lessor, use best efforts to sell the Lessor's interest in the
Property and will attempt to obtain the highest purchase price therefor and
for not less than the Fair Market Sales Value of the Property. The Lessee
will be responsible for hiring brokers and making the Property available
for inspection by prospective purchasers. The Lessee shall promptly upon
request permit inspection of the Property and any maintenance records
relating to the Property by the Lessor and any potential purchasers, and
shall otherwise do all things reasonably necessary to sell and deliver
possession of the Property to any purchaser. All such marketing of the
Property shall be at the Lessee's sole expense. The Lessee shall allow the
Lessor and any potential qualified purchaser reasonable access to the
Property for the purpose of inspecting the same.
(f) The Lessee shall submit all bids to the Lessor, and the Lessor
will have the right to submit any one or more bids. The Lessee shall
deliver to the Lessor, not less than thirty (30) days prior to the
Expiration Date, binding written unconditional (except as set forth below),
irrevocable offer or offers by such purchaser or purchasers offering the
highest bid to purchase the Property. No such purchaser shall be the Lessee
or an Affiliate of the Lessee. The written offer must specify the
Expiration Date as the closing date unless the Lessor shall otherwise agree
in its reasonable discretion. Any sale by the Lessee shall be for the
highest cash bid submitted to the Lessor. The determination of the highest
bid shall be made by the Lessor prior to the end of the Marketing Period,
but in any event, the Lessor shall have no obligation to approve any bid
unless the aggregate amount of the highest bids for the Property equals or
exceeds an amount equal to the Lease Balance minus the Contingent Rental
-----
Adjustment determined as of the Expiration Date. All bids shall be on an
all-cash basis unless the Lessor shall otherwise agree in its sole
discretion.
(g) In connection with any such sale of the Property, the Lessee will
provide to each Purchaser all customary "seller's" indemnities,
representations and warranties regarding absence of Liens (other than
Lessor Liens and the condition of the Property. The Lessee shall have
obtained, at its cost and expense, all required governmental and regulatory
consents and approvals and shall have made all filings as required by
Applicable Law in order to carry out and complete the transfer of the
Property. As to the Lessor, any such sale shall be made on an "as is
-29-
with all faults" basis without representation or warranty by the Lessor
other than the absence of Lessor Liens. Any agreement as to such sale
shall be made subject to the Lessor's rights hereunder.
(h) The Lessee shall pay directly, and not from the sale
proceeds, all prorations, credits, costs and expenses of the sale of the
Property, whether incurred by the Lessor or the Lessee, including
without limitation, the cost of all title insurance, surveys,
environmental reports, appraisals, transfer taxes, the Lessor's
reasonable attorneys' fees, the Lessee's attorneys' fees, commissions,
escrow fees, recording fees, and all applicable documentary and other
transfer taxes.
(i) The Lessee shall pay to the Lessor on or prior to the
Expiration Date (or to such other Person as the Lessor shall notify the
Lessee in writing) an amount equal to the Contingent Rental Adjustment
for the Property plus all Basic Rent and all other amounts hereunder
----
which have accrued or will accrue prior to or as of the Expiration Date
or such other closing date approved by the parties, in the type of funds
specified in Section 7.4 hereof.
-----------
(j) The Lessee shall pay to the Lessor on or prior to the
Expiration Date the amounts, if any, required to be paid pursuant to
Section 26.2 hereof.
------------
(k) If the Lessor approves any bid for the Property, the
purchase of the Property shall be consummated on or before the
Expiration Date and the gross proceeds (the "Gross Proceeds") of the
--------------
sale of the Property, less the documented expenses incurred by the
Lessee under clause (h) shall be paid directly to the Lessor; provided,
---------- --------
however, that if the sum of (x) the remaining Gross Proceeds from such
-------
sale or sales plus (y) the Contingent Rental Adjustment received by the
----
Lessor pursuant to clause (i) plus (z) amounts received by the Lessor
---------- ----
pursuant to Section 26.2 hereof exceeds the Lease Balance as of such
------------
date, then the excess shall be paid to the Lessee on the Expiration Date
or such other closing date approved by the parties.
(l) All reconstruction, refurbishment and repair to the Property
resulting from a Casualty or Condemnation shall have been completed prior to
the end of the Marketing Period.
If one or more of the foregoing provisions shall not be fulfilled as of
the date set forth above with respect to the Property, then the Lessor shall
declare by written notice to the Lessee the Remarketing Option to be null and
void (whether or not it has been theretofore exercised by the Lessee), in which
event all of the Lessee's rights under this Section 24.1 shall immediately
------------
terminate and the Lessee shall be obligated to purchase the Property pursuant to
Section 22.1 on the Expiration Date.
------------
If the Lessee effectively elects the Remarketing Option and no sale of
the Property is consummated prior to the end of the Marketing Period, the Lessee
shall, in addition to making the payment required pursuant to Section 24.1(i)
---------------
above, return the Property to the Lessor (or to any other Person specified by
the Lessor). In connection with any such return of the Property, the Lessee
shall, at its own cost and expense, do each of the following:
(i) the Lessee shall, on or prior to the Expiration Date,
execute and deliver to the Lessor (or to the Lessor's designee) (A) a
deed with respect to the Property containing representations and
warranties of grantor to the Lessor (or such other Person) regarding the
absence of Liens (other than Permitted Liens of the type described in
clause (i), (iii), (vii), (viii), (ix) or (x) of the definition of
---------- ----- ----- ------ --- ---
"Permitted Liens"), (B) a xxxx of sale with respect to any Equipment
then located on
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the Property and (C) an assignment of the Lessee's entire interest in
the Property (which shall include an assignment of all of the Lessee's
right, title and interest in and to any Net Proceeds with respect to the
Property not previously received by the Lessee and an assignment of
leases of the Property) in each case in recordable form and otherwise in
conformity with local custom and free and clear of any Liens
attributable to the Lessee:
(ii) the Lessee shall execute and deliver to Lessor and the
Lessor's title insurance company an affidavit as to the absence of any
Liens (other than Permitted Liens of the type described in clause (i),
----------
(iii), (vii), (viii), (ix) or (x)), and shall execute and deliver to the
----- ----- ------ ---- ---
Lessor a statement of termination of this Lease to the extent relating
to the Property;
(iii) the Lessee shall, on the Expiration Date, transfer
possession of the Property to the Lessor or any Person designated by the
Lessor, by surrendering the same into the possession of the Lessor or
such Person, as the case may be, in the condition required by this
Section 24.1 and in compliance with Applicable Law;
------------
(iv) the Lessee shall, for a period of up to one year after
the Expiration Date, cooperate reasonably with the Lessor and/or Person
designated by the Lessor to receive the Property, which cooperation
shall include reasonable efforts with respect to the following, all of
which the Lessee shall do on or before the Expiration Date or as soon
thereafter as is reasonably practicable; providing copies of all books
and records regarding the maintenance and ownership of the Property and
all know-how, data and technical information relating thereto, granting
or assigning all licenses necessary for the operation and maintenance of
the Property and cooperating reasonably in seeking and obtaining all
necessary Governmental Action. The obligations of the Lessee under this
paragraph shall survive the expiration or termination of this Lease; and
(v) no subleases with respect to the Property or any portion
thereof shall be in effect on the Expiration Date.
Except as expressly set forth herein, the Lessee shall have no right,
power or authority to bind the Lessor in connection with any proposed sale or
sales of the Property.
24.2. Certain Obligations Continue. During the Marketing Period, the
----------------------------
obligation of the Lessee to pay Rent shall continue undiminished until payment
in full to the Lessor of the Contingent Rental Adjustment and all other amounts
due to the Lessor by Lessee under the Operative Documents to which the Lessee is
a party. The Lessor shall have the right, but shall be under no duty, to solicit
bids, to inquire into the efforts of the Lessee to obtain bids or otherwise to
take actions in connection with any such sale, other than as expressly provided
in this Article XXIV.
------------
ARTICLE XXV
PROCEDURES RELATING TO PURCHASE OR REMARKETING
25.1. Provisions Relating to the Exercise of Purchase Option and
----------------------------------------------------------
Conveyance Upon Remarketing and Conveyance Upon Certain Other Events. In
--------------------------------------------------------------------
connection with the Lessee's exercise of its Purchase Option, upon the
Expiration Date or the purchase of the Property under Article XIX or
-----------
Section 20.2 (e) hereof and upon tender by the Lessee of the amounts set forth
----------------
in Article XIX, Section 20.2 (e) or 22.1 (a) hereof, as applicable;
----------- ---------------- --------
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(i) the Lessor shall execute and deliver to the Lessee (or to
the Lessee's designee) at the Lessee's cost and expense a limited
warranty deed (with covenants against grantor acts) with respect to
the Property, a limited warranty xxxx of sale (with covenants against
grantor acts) with respect to any Equipment and an assignment of the
Lessor's entire interest in the Property (which shall include an
assignment of all of the Lessor's right, title and interest in and to
any Net Proceeds not previously received by the Lessor, and an
assignment of leases of the Property and any security deposits
collected by the Lessor), in each case in recordable form and
otherwise in conformity with local custom and free and clear of any
Lessor Liens attributable to the Lessor;
(ii) the Property shall be conveyed to the Lessee "AS IS" and
in its then present physical condition;
(iii) the Lessor shall execute and deliver to Lessee and the
Lessee's title insurance company an affidavit as to the Lessor's
title and the absence of Lessor Liens; and
(iv) the Lessor shall execute such other documents reasonably
requested by the Lessee, or otherwise required under local law, to
effect a transfer of the Property and title thereto.
ARTICLE XXVI
INDEMNIFICATION
26.1. General Indemnification. The Lessee agrees, whether or not any
-----------------------
of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless
each Indemnitee, on an After Tax Basis, from and against, any and all
Claims that may be imposed on, incurred by or asserted against such
Indemnitee (whether because of action or omission by such Indemnitee or
otherwise), whether or not such Indemnitee shall also be indemnified as to
any such Claim by any other Person and whether or not such Claim arises or
accrues prior to the Documentation Date or after the Expiration Date, in
any way relating to or arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in
respect thereof;
(b) the Property or any part thereof or interest therein;
(c) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance,
rejection, ownership, management, possession, operation, rental,
lease, sublease, repossession, maintenance, repair, alteration,
modification, addition or substitution, storage, transfer of title,
redelivery, use, financing, refinancing, disposition, operation,
condition, sale (including, without limitation, any sale pursuant to
any provision hereof), return or other disposition of all or any part
or any interest in the Property or the imposition of any Lien other
than a Lessor Lien (or incurring of any liability to refund or pay
over any amount as a result of any Lien other than a Lessor Lien)
thereon, including, without limitation: (1) Claims or penalties
arising from any violation of law or in tort (strict liability or
otherwise), (2) latent or other defects, whether or not discoverable,
(3) any Claim based upon a violation or alleged violation of the
terms of any restriction, easement, condition or covenant or other
matter affecting title to the Property, (4) the making of any
Modifications in violation of any standards imposed by any insurance
policies required to be maintained by the Lessee pursuant to this
Lease which are in effect at any time with respect to the Property or
any part thereof, (5) any Claim for patent,
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trademark or copyright infringement, and (6) Claims arising from any public
improvements with respect to the Property resulting in any change or
special assessments being levied against the Property or any plans to
widen, modify or realign any street or highway adjacent to the Property, or
any Claim for utility "tap-in" fees;
(d) the breach by the Lessee of any covenant, representation or
warranty made by it or deemed made by it in any Operative Document or any
certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or financial
advisor by the Lessee to act on its behalf in connection with the
transactions contemplated hereby;
(f) the existence of any Lien on or with respect to the Property, any
Improvements, or Basic Rent or Supplemental Rent, title thereto, or any
interest therein including any Liens which arise out of the possession,
use, occupancy, construction, repair or rebuilding of the Property or by
reason of labor or materials furnished or claimed to have been furnished to
the Lessee, or any of its contractors or agents or by reason of the
financing of any personalty or equipment purchased or leased by the Lessee
or Modifications constructed by the Lessee, except with respect to any of
the foregoing Lessor Liens and Liens in favor of the Lessor; or
(g) subject to the accuracy of Lessor's representation set forth in
Section 6.1(a), the transactions contemplated by this Lease or by any other
--------------
Operative Document, in respect of the application of Parts 4 and 5 of
Subtitle B of Title 1 of ERISA and any prohibited transaction described in
Section 4975(c) of the Code;
---------------
provided, however, the Lessee shall not be required to indemnify any Indemnitee
-------- -------
under this Section 26.1 for any of the following: (1) any Claim to the extent
------------
resulting from the willful misconduct or gross negligence of such Indemnitee (it
--
being understood that the Lessee shall be required to indemnify an Indemnitee
----------------
even if the ordinary (but not gross) negligence of such Indemnitee caused or
contributed to such Claim) or the breach of any representation, warranty or
covenant of such Indemnitee set forth in any Operative Document, (2) any Claim
resulting from Lessor Liens which the Lessor is responsible for discharging
under the Operative Documents, (3) any Claim to the extent attributable to acts
or events occurring after the expiration of the Term or the return or
remarketing of the Property so long as the Lessor is not exercising remedies
against the Lessee in respect of the Operative Documents, and (4) any Claim
arising from a breach or alleged breach by the Lessor of any agreement entered
into in connection with the assignment or participation of Rent. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
remedy under this Lease or any other Operative Document. Without limiting the
express rights of any Indemnitee under this Section 26.1, this Section 26.1
------------ ------------
shall be construed as an indemnity only and not a guaranty of residual value of
the Property.
26.2. End of Term Indemnity.
---------------------
(a) If the Lessee elects the Remarketing Option and there would, after
giving effect, to the proposed remarketing transactions, be a Shortfall
Amount, then prior to the Expiration Date and as a condition to the
Lessee's right to complete the remarketing of the Property pursuant to
Section 24.1, the Lessee shall cause to be delivered to the Lessor at least
------------
thirty (30) days prior to the Expiration Date, at the Lessee's sole cost
and expense, a report from an appraiser selected by the Lessor and
reasonably satisfactory to the Lessee in form and substance satisfactory to
the
-33-
Lessor (the "End of the Term Report") which shall state the appraiser's
----------------------
conclusions as to the reason for any decline in the Fair Market Sales Value
of the Property from that anticipated for such date in the Appraisal
delivered on the Acquisition Date.
(b) If the Lessee elects the Remarketing Option, then on or prior to
the Expiration Date, the Lessee shall pay to the Lessor an amount (not to
exceed the Shortfall Amount) equal to the portion of Shortfall Amount that
the End of the Term Report demonstrates was the result of a decline in the
Fair Market Sales Value of the Property due to
(i) extraordinary use, failure to maintain, to repair, to
restore, to rebuild or to replace, failure to comply with all
applicable laws, failure to use, workmanship, method of installation
or removal or maintenance, repair, rebuilding or replacement,
(excepting in each case ordinary wear and tear), or
(ii) with respect to the Property, any Modification made to, or
any rebuilding of, the Property or any part thereof by the Lessee, or
(iii) the existence of any Environmental Violations, or
(iv) any restoration or rebuilding carried out by the Lessee, or
(v) any use of the Property or any part thereof by the Lessee
other than as permitted under this Lease, or
(vi) any grant release, dedication, transfer, annexation or
amendment made pursuant to Section 15.2, or
------------
(vii) the failure of the Lessor to have title to the Property
free and clear of all Liens (excluding Permitted Liens).
26.3. Environmental Indemnity. Without limitation of the other provisions
-----------------------
of this Article XXVI, the Lessee hereby agrees to indemnify, hold harmless and
------------
defend each Indemnitee from and against any all and claims (including without
limitation third party claims for personal injury or real or personal property
damage), losses (including but not limited to, to the extent the Lease Balance
has not been fully paid, any loss of value of the Property), damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
(including informal proceedings) and orders, judgments, remedial action,
requirements, enforcement actions of any kind, and all reasonable and documented
costs and expenses incurred in connection therewith (including but not limited
to reasonable and documented attorneys' and/or paralegals' fees and expenses),
including, but not limited to, all costs incurred in connection with any
investigation or monitoring of site conditions or any clean-up, remedial,
removal or restoration work by any federal, state or local government agency,
arising in whole or in part, out of
(a) the presence on or under the Property of any Hazardous Substance
in violation of Environmental Law, or any releases or discharges of any
Hazardous Substance on, under, from or onto the Property in violation of
Environmental Law,
(b) any activity, including, without limitation, construction,
carried on or undertaken on or off the Property, and whether by the Lessee
or any predecessor in title or any employees, agents, contractors or
subcontractors of the Lessee or any predecessor in title, or any other
-34-
Persons (including such Indemnitee), in connection with the handling,
treatment, removal, storage, decontamination, clean-up, transport or
disposal of any Hazardous Substances in violation of Environmental Law that
at any time are located or present on or under or that at any time migrate,
flow, percolate, diffuse or in any way move onto or under the Property.
(c) loss of or damage to any property or the environment (including,
without limitation, clean-up costs, response costs, remediation and removal
costs, costs of corrective action, costs of financial assurance, fines and
penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic
species, vegetation, flora and fauna, and any mitigative action required by
or under Environmental Laws.
(d) any claim concerning lack of compliance with Environmental Laws,
or any act or omission causing an environmental conditions that requires
remediation or would allow any Governmental Authority to record a Lien on
the land records, or.
(e) any residual contamination on or under the Land, or affecting any
natural resources, and to any contamination of any property or natural
resources arising in connection with the generation, use, handling,
storage, transport or disposal of any such Hazardous Substances, and
irrespective of whether any of such activities were or will be undertaken
in accordance with applicable laws, regulations, codes and ordinances;
provided, however, the Lessee shall not be required to indemnify any Indemnitee
-------- -------
under this Section 26.3 for (1) any Claim to the extent resulting from the
------------
willful misconduct or gross negligence of such Indemnitee (it being understood
-- ----- ----------
that, unless the applicable Indemnitee was in possession of the Property and
caused the Claim, the Lessee shall be required to indemnify an Indemnitee even
if the ordinary (but not gross) negligence of such Indemnitee caused or
contributed to such Claim) of (2) any Claim to the extent attributable to acts
or events occurring after the expiration of the Term or the return or
remarketing of the Property so long as the Lessor is not exercising remedies
against the Lessee in respect or the Operative Documents. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of and shall be separate and independent from any
remedy under this Lease or any other Operative Document.
26.4. Proceedings in Respect of Claims. With respect to any amount that the
--------------------------------
Lessee is requested by the Indemnitee to pay by reason of Section 26.1 or 26.3,
------------ ----
such Indemnitee shall, if so requested by the Lessee and prior to any payment,
submit such additional information to the Lessee as the Lessee may reasonably
request and which is in the possession of such Indemnitee to substantiate
properly the requested payment.
In case any action, suit or proceeding shall be brought against any
Indemnitee, such Indemnitee shall promptly notify the Lessee of the commencement
thereof, and the Lessee shall be entitled, at its expense, to participate in,
and, to the extent that the Lessee desires to, assume and control the defense
thereof; provided, however, that the Lessee shall not have any increased
-------- -------
liability as a direct result of an Indemnitee's failure to provide such notice
promptly; provided, further, that the Lessee shall have acknowledged in writing
-------- -------
its obligation to fully indemnify such Indemnitee in respect of such action,
suit or proceeding, and, the Lessee shall keep such Indemnitee fully apprised of
the status of such action suit or proceeding and shall provide such Indemnitee
with all information with respect to such action suit or proceeding as such
Indemnitee shall reasonably request, and provided, further, that the Lessee
-------- -------
shall not be entitled to assume and control the defense of any such action, suit
or proceeding if and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) such action, suit or proceeding involves any risk of
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imposition of criminal liability or any risk of imposition of material civil
liability on such Indemnitee or will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted Lien
or Lessor Lien) on the Property or any part thereof unless, in the case of civil
liability, the Lessee shall have posted a bond or other security satisfactory to
the relevant Indemnitees in respect to such risk or (y) the control of such
action, suit or proceeding would involve an actual or potential conflict of
interest, (B) such proceeding involves Claims not fully indemnified by the
Lessee which the Lessee and the Indemnitee have been unable to sever from the
indemnified claim(s), or (C) an Event of Default has occurred and is continuing.
The Indemnitee may participate in a reasonable manner at its own expense and
with its own counsel in any proceeding conducted by the Lessee in accordance
with the foregoing. The Lessee shall not enter into any settlement or other
compromise with respect to any Claim which is entitled to be indemnified under
Section 26.1 or 26.3 without the prior written consent of the Indemnitee which
------------ ----
consent shall not be unreasonably withheld in the case of a money settlement not
involving an admission of liability of such Indemnitee; provided, however, that
-------- -------
in the event that such Indemnitee withholds consent to any settlement or other
compromise, the Lessee shall not be required to indemnify such Indemnitee under
Section 26.1 or 26.3 to the extent that the applicable Claim (x) is for legal
------------ ----
fees and expenses incurred after the date of the proposed settlement or (y)
results in a judgement in excess or such offered money settlement.
Each indemnitee shall at the expense of the Lessee supply the Lessee with
such information and documents reasonably requested by the Lessee are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by Section 26.1 or 26.3. Unless an Event of
------------ -----
Default shall have occurred and be continuing, no Indemnitee shall enter into
any settlement or other compromise with respect to any Claim which is entitled
to be indemnified under Section 26.1 or 26.3 without the prior written consent
------------ ----
of the Lessee, which consent shall not be unreasonably withheld, unless such
Indemnitee waives its right to be indemnified under Section 26.1 or 26.3 with
------------ ----
respect to such Claim.
Upon payment in full of any Claim by the Lessee pursuant to Section 26.1 or
------------
26.3 to or on behalf of an Indemnitee, the Lessee, without any further action,
----
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise cooperate with the Lessee and give such further
assurances as are necessary or advisable to enable the Lessee vigorously to
pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 26.1 or 26.3 shall
------------ ----
be paid to such indemnitee within ten (10) Business Days after receipt of a
written demand therefor from such indemnitee, accompanied by a written statement
describing in reasonable detail the basis for such indemnity and the computation
of the amount so payable and, if requested by the Lessee, such determination
shall be verified by a nationally recognized independent accounting firm
mutually acceptable to the Lessee and the Indemnitee at the expense of the
Lessee; provided, however, that if the Lessee has assumed the defense of the
-------- -------
related Claim or is paying the costs of the Indemnitee's defense of the related
claim on an ongoing basis, the Lessee shall not be required to pay such amount
to the applicable Indemnitee until such time as a judgment is entered with
respect to such Claim, the enforcement of which is not stayed or which judgment
is not bonded over, or the Claim is otherwise settled or lost. To the extent the
Lessee suffers any losses or damages as a result of an Indemnitee's failure to
provided the Lessee with prompt notice of the commencement of any action, suit
or proceeding against any Indemnitee in accordance with the first sentence of
the second paragraph of this Section 26.4,
------------
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the amounts of such losses or damages may be offset against the Lessee's
indemnification obligation to such Indemnitee.
26.5. General Tax Indemnity.
---------------------
(a) Indemnification. The Lessee shall pay and assume liability for,
---------------
and does hereby agree to indemnify, protect and defend the Property and all
Tax Indemnitees, and hold them harmless against, all Impositions on an
After Tax Basis.
(b) Contests. If any claim shall be made against any Tax Indemnitee
--------
or if any proceeding shall be commenced against any Tax Indemnitee
(including a written notice of such proceeding) for any Imposition as to
which the Lessee may have an indemnity obligation pursuant to this Section
-------
26.5, or if any Tax Indemnitee shall determine that any Imposition to which
----
the Lessee may have an indemnity obligation pursuant to this Section 26.5
------------
may be payable, such Tax Indemnitee shall promptly (and in any event,
within 30 days) notify the Lessee in writing (provided that failure to so
--------
notify the Lessee within 30 days shall not alter such Tax Indemnitee's
rights under this Section 26.5 except to the extent such failure precludes
------------
or materially adversely affects the ability to conduct a contest of any
indemnified Taxes) and shall not take any action with respect to such
claim, proceeding or Imposition without the written consent of the Lessee
(such consent not to be unreasonably withheld or unreasonably delayed) for
30 days after the receipt of such notice by the Lessee; provided, however,
-------- -------
that in the case of any such claim or proceeding, if such Tax Indemnitee
shall be required by law or regulation to take action prior to the end of
such 30-day period, such Tax Indemnitee shall in such notice to the Lessee,
so inform the Lessee, and such Tax Indemnitee shall not take any action
with respect to such claim, proceeding or Imposition without the consent of
the Lessee (such consent not to be unreasonably withheld or unreasonably
delayed) for 10 days after the receipt of such notice by the Lessee unless
the Tax Indemnitee shall be required by law or regulation to take action
prior to the end of such 10-day period.
The Lessee shall be entitled for a period of 30 days from receipt
of such notice from the Tax Indemniteee (or such shorter period as the Tax
Indemnitee has notified the Lessee is required by law or regulation for the
Tax Indemnitee to commence such contest), to request in writing that such
Tax Indemnitee contest the imposition of such Tax, at the Lessee's expense.
If (x) such contest can be pursued in the name of the Lessee and
independently from any other proceeding involving a Tax liability of such
Tax Indemnitee for which the Lessee has not agreed to indemnify such Tax
Indemnitee, (y) such contest must be pursued in the name of the Tax
Indemnitee, but can be pursued independently from any other proceeding
involving a Tax liability of such Tax Indemnitee for which the Lessee has
not agreed to indemnify such Tax Indemnitee or (z) the Tax Indemnitee so
requests, then the Lessee shall be permitted to control the contest of such
claim, provided that in the case of a contest described in clause (y), if
-------- ----------
the Tax Indemnitee determines in good faith that such contest by the Lessee
could have a material adverse impact on the business or operations of the
Tax Indemnitee and provides a written explanation to the Lessee of such
determination, the Tax Indemnitee may elect to control or reassert control
of the contest, and provided, that by taking control of the contest, Lessee
--------
acknowledges that it is responsible for the Imposition ultimately
determined to be due by reason of such claim, and provided, further, that
-------- -------
in determining the application of clauses (x) and (y) of the preceding
----------- ---
sentence, each Tax Indemnitee shall take any and all reasonable steps to
segregate claims for any Taxes for which the Lessee indemnifies hereunder
from Taxes for which the Lessee is not obligated to indemnify hereunder, so
that the Lessee can control the contest of the former. In all
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other claims requested to be contested by the Lessee, the Tax Indemnitee shall
control the contest of such claim, acting through counsel reasonably acceptable
to the Lessee. In no event shall the Lessee be permitted to contest (or the Tax
Indemnitee required to contest) any claim, (A) if such Tax Indemnitee provides
the Lessee with a legal opinion of counsel reasonably acceptable to the Lessee
that such action, suit or proceeding involves a risk of imposition of criminal
liability or will involve a material risk of the sale, forfeiture or loss of, or
the creation of any Lien (other than a Permitted Lien or Lessor Lien) on the
Property or any part of any thereof unless the Lessee shall have posted and
maintained a bond or other security reasonably satisfactory to the relevant Tax
Indemnitee in respect to such risk, (B) if an Event of Default has occurred and
is continuing unless the Lessee shall have posted and maintained a bond or other
security reasonably satisfactory to the relevant Tax Indemnitee in respect of
the Taxes subject to such claim and any and all expenses for which the Lessee is
responsible hereunder reasonably foreseeable in connection with the contest of
such claim, (C) unless the Lessee shall have agreed to pay and shall pay, to
such Tax Indemnitee within ten (10) Business Days after demand all reasonable
out-of-pocket costs, losses and expenses that such Tax Indemnitee may incur in
connection with contesting such Imposition including all reasonable legal,
accounting and investigatory fees and disbursements, or (D) if such contest
shall involve the payment of the Tax prior to the contest, unless the Lessee
shall provide to the Tax Indemnitee an interest-free advance in an amount equal
to the Imposition that the Indemnitee is required to pay (with no additional net
after-tax costs to such Tax Indemnitee). In addition for Tax Indemnitee
controlled contests and claims contested in the name of the Tax Indemnitee in a
public forum, no contest shall be required: (A) unless the amount of the
potential indemnity (taking into account all similar or logically related claims
that have been or could be raised in any audit involving such Tax Indemnitee for
which the Lessee may be liable to pay an indemnity under this Section 26.5(b)
---------------
exceeds $500,000 and (B) unless, if requested by the Tax Indemnitee, the Lessee
shall have provided to the Tax Indemnitee an opinion of counsel selected by the
Lessee (which may be in-house counsel) (except, in the case of income taxes
indemnified hereunder which shall be an opinion of independent tax counsel
selected by the Tax Indemnitee and reasonably acceptable to the Lessee) that a
reasonable basis exists to contest such claim. In no event shall a Tax
Indemnitee be required to appeal an adverse judicial determination to the United
States Supreme Court.
The party conducting the contest shall consult in good faith with the
other party and its counsel with respect to the contest of such claim for Taxes
(or claim for refund) but the decisions regarding what actions to be taken shall
be made by the controlling party in its sole judgement, provided, however, that
-------- -------
if the Tax Indemnitee is the controlling party and the Lessee recommends the
acceptance of a settlement offer made by the relevant Governmental Authority and
such Tax Indemnitee rejects such settlement offer then the amount for which the
Lessee will be required to indemnify such Tax Indemnitee with respect to the
Taxes subject to such offer shall not exceed the amount which it would have owed
if such settlement offer had been accepted. In addition, the controlling party
shall keep the noncontrolling party reasonably informed as to the progress of
the contest, and shall provide the noncontrolling party with a copy of (or
appropriate excerpts from) any reports or claims issued by the relevant auditing
agents or taxing authority to the controlling party thereof, in connection with
such claim or the contest thereof.
Each Tax Indemnitee shall at the Lessee's expense supply the Lessee with
such information and documents reasonably requested by the Lessee as are
necessary or advisable for the Lessee to participate in any action, suit or
proceeding to the extent permitted by this Section 26.5(b). No Tax Indemnitee
---------------
shall enter into any settlement or other compromise or fail to appeal an
adverse ruling with respect to any claim which is entitled to be indemnified
under this Section
-------
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26.5 (and with respect to which contest is required under this Section 26.5(b))
---- ----------------
without the prior written consent of the Lessee, unless such Tax Indemnitee
waives its right to be indemnified under this Section 26.5 with respect to such
------------
claim.
Notwithstanding anything contained herein to the contrary, a Tax Indemnitee
will not be required to contest(and the Lessee shall not be permitted to
contest) a claim with respect to the imposition of any Tax if such Tax
Indemnitee shall waive its right to indemnification under this Section 26.5 with
------------
respect to such claim (and any claim with respect to such year or any other
taxable year the contest of which is materially adversely affected as a result
of such waiver).
(c) Reimbursement for Tax Savings. If (x) a Tax Indemnitee or any Affiliate
-----------------------------
thereof realizes a deduction, offset, credit or refund of any Taxes or any other
savings or benefit as a result of any indemnity paid by the Lessee pursuant to
this Section 26.5 or (y) by reason of the incurrence or imposition of any Tax
------------
(or the circumstances or event giving rise thereto) for which a Tax Indemnitee
is indemnified hereunder or any payment made to or for the account of such Tax
Indemnitee by the Lessee pursuant to this Section 26.5 or any payment made by a
------------
Tax Indemnitee to the Lessee by reason of this Section 26.5(c), such Tax
---------------
Indemnitee at any time actually realizes a reduction in any Taxes for which the
Lessee is not required to indemnify such Tax Indemnitee pursuant to this Section
-------
26.5 which reduction in Taxes was not taken into account in computing such
----
payment by the Lessee to or for the account of such Tax Indemnitee or by the Tax
Indemnitee to the Lessee, then such Tax Indemnitee shall promptly pay to the
Lessee (xx) the amount of such deduction, offset credit, refund, or other
savings or benefit together with the amount of any interest received by such Tax
Indemnitee on account of such deduction, offset, credit, refund or other savings
or benefit or (yy) an amount equal to such reduction in Taxes, as the case may
be, in either case together with an amount equal to any reduced Taxes payable by
such Tax Indemnitee as a result of such payment; provided that no such payment
--------
shall be made so long as a Default or Event of Default shall have occurred and
be continuing but shall be paid promptly after cure of such Default or Event of
Default. Each Tax Indemnitee agrees to take such actions as the Lessee may
reasonably request (provided in the good faith judgment of the Tax Indemnitee,
such actions would not result in a material adverse effect on the Tax Indemnitee
for which the Tax Indemnitee is not entitled to indemnification from the Lessee)
and to otherwise act in good faith to claim such refunds and other available Tax
benefits, and take such other actions as may be reasonable to minimize any
payment due from the Lessee pursuant to this Section 26.5 and to maximize the
------------
amount of any Tax savings available to it. The disallowance or reduction of any
credit, refund or other tax savings with respect to which a Tax Indemnitee has
made a payment to the Lessee under this Section 26.5(e) shall be treated as a
---------------
Tax for which the Lessee is obligated to indemnify such Tax Indemnitee hereunder
without regard to the exclusions set forth in the definition of Impositions
except the exclusions set forth in (iv), (v), (vi), (vii), (ix), (x), (xi),
(xiv) and (xvi).
(d) Payments. Any Imposition indemnifiable under this Section 26.5 shall be
-------- ------------
paid directly when due to the applicable taxing authority if direct payment is
practicable and permitted. If direct payment to the applicable taxing authority
is not permitted or is otherwise not made, any amount payable to a Tax
Indemnitee pursuant to Section 26.5 shall be paid within thirty (30) days after
------------
receipt of a written demand therefor from such Tax Indemnitee accompanied by a
written statement describing in reasonable detail the amount so payable, but not
before two Business Days prior to the date that the relevant Taxes are due. Any
payments made pursuant to this Section 26.5 shall be made directly to the Tax
------------
Indemnitee entitled thereto or the Lessee, as the case may be, in immediately
available funds at such bank or to such account as specified by
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the payee in written directions to the payor, or, if no such direction
shall have been given, by check of the payor payable to the order of the
payee by certified mail, postage prepaid at its address as set forth in
Schedule I hereto. Upon the request of any Tax Indemnitee with respect
----------
to a Tax that the Lessee is required to pay, the Lessee shall furnish to
such Tax Indemnitee the original or a certified copy of a receipt for
the Lessee's payment of such Tax or such other evidence of payment as is
reasonably acceptable to such Tax Indemnitee.
(e) Reports. In the case of any report, return or statement
-------
required to be filed with respect to any Taxes that are subject to
indemnification under this Section 26.5 and of which the Lessee has
------------
knowledge, the Lessee shall promptly notify the Tax Indemnitee of such
requirement and, at the Lessee's expense (i) if the Lessee is permitted
(unless otherwise requested by the Tax Indemnitee) by Applicable Law,
timely file such report, return or statement in its own name or (ii) if
such report, return or statement is required to be in the name of or
filed by such Tax Indemnitee or the Tax Indemnitee otherwise requests
that such report, return or statement for filing by such Tax Indemnitee
in such manner as shall be satisfactory to such Tax Indemnitee and send
the same to the Tax Indemnitee for filing no later than 15 days prior to
the due date therefor. In any case in which the Tax Indemnitee will file
any such report, return or statement, the Lessee shall, upon written
request of such Tax Indemnitee, provide such Tax Indemnitee with such
information as is reasonable necessary to allow the Tax Indemnitee to
file such report, return or statement.
(f) Verification. At the Lessee's request, the amount of any
------------
indemnity payment by the Lessee or any payment by a Tax Indemnitee to
the Lessee pursuant to this Section 26.5 shall be verified and certified
------------
by an independent public accounting firm mutually acceptable to the
Lessee and the Tax Indemnitee. The costs of such verification shall be
borne by the Lessee unless such verification shall result in an
adjustment in the Lessee's favor of the lessor of (i) $10,000, and (ii)
five (5%) percent of the payment as computed by the Tax Indemnitee, in
which case such fee shall be paid by the Tax Indemnitee. In no event
shall the Lessee have the right to review the Tax Indemnitee's tax
returns or receive any other confidential information from the Tax
Indemnitee in connection with such verification. Any information
provided to such accountants by any Person shall be and remain the
exclusive property of such Person and shall be deemed by the parties to
be (and the accountants will confirm in writing that they will treat
such information as) the private, proprietary and confidential property
of such Person, and no Person other than such Person and the accountants
shall be entitled thereto and all such materials shall be returned to
such Person. Such accounting firm shall be requested to make its
determination within 30 days of the Lessee's request for verifications
and the computations of the accounting firm shall be final, binding and
conclusive upon the Lessee and the Tax Indemnitee. The parties agree
that the sole responsibility of the independent public accounting firm
shall be to verify and amount of a payment pursuant to this Lease and
that matters of interpretation of this Lease are not within the scope of
the independent accounting firm's responsibilities.
(g) Tax Ownership. The Lessor represents and warrants that it
-------------
will not, prior to the termination of this Lease, claim ownership of (or
any tax benefits, including depreciation, with respect to) the Property
for any income tax purposes, it being understood that the Lessee is and
will remain the owner of the Property for such income tax purposes until
the termination of this Lease. If, notwithstanding the income tax
intentions of the Parties as set forth herein, the Lessor actually
receives any income tax deductions, reductions in income tax or other
income tax benefit as a result of any claim for, or recharacterization
requiring such party to take, any tax benefits attributable to ownership
of the Property for income tax purposes, the Lessor shall pay to the
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Lessee, together with an amount equal to any reduced Taxes payable by
such Tax Indemnitee as a result of such payment, the amount of such
income tax savings actually realized by the Lessor (less the amount of
any anticipated increase in income tax which the Lessor determines is
currently payable as a result of such claim or recharacterization),
provided that the Lessee shall agree to reimburse the Lessor for any
--------
subsequent increase in the Lessor's income taxes resulting from such
claim or recharacterization not taken into account in the payment made
to the Lessee, up to the amount paid to the Lessee by the Lessor. The
parties agree that this Section 26.5(g) is intended to require a payment
---------------
to the Lessee if and only if the Lessor shall have actually received an
unanticipated tax savings with respect to the Property that would not
have been received if the Lessor had advanced funds to the Lessee in the
form of a loan secured by the Property in an amount equal to the Lease
Balance. Nothing in this Section 26.5(g) shall be construed to require
---------------
the Lessor to take any affirmative action to realize any tax savings if
in its good faith judgment such action may have a material adverse
affect on the Lessor.
26.6. Funding Losses. If any payment of Rent or the Lease Balance,
--------------
including pursuant to the Lessee's exercise of the Purchase Option under Section
-------
22.1, is made on any day other than the last day of an Interest Period
----
applicable thereto, the Lessee shall reimburse the Lessor within fifteen (15)
days after demand for any actual resulting loss or expense incurred by it,
including any loss incurred in obtaining, liquidating or employing deposits from
third parties, swaps, xxxxxx or similar transactions entered into in connection
with or in contemplation of transactions relating to the Property, but excluding
loss of margin for the period after any such payment or conversion or failure to
borrow or prepay, provided that the Lessor shall have delivered to the Lessee a
--------
certificate signed by an officer of the Lessor as to the amount of such loss or
expense, which certificate shall be conclusive in the absence of manifest error,
and provided, further, that such loss shall in no event exceed the then
-------- -------
effective Lease Rate which would have been payable for the balance of such
Interest Period. The Lessor will, at the request of the Lessee, furnish such
additional information concerning the determination of such loss at the Lessee
may reasonable request.
26.7. Regulation D Compensation. During the Term, for so long as the
-------------------------
Lessor (or FBTC) is required to maintain reserves against "Eurocurrency
Liabilities" (or any other category of liabilities which include deposits by
reference to which the Lease Rate is determined or any category of extensions of
credit or other assets which includes loans by a non-United States office of the
Lessor to United States residents), and, as a result, the cost to the Lessor (or
its Funding Office) of making or maintaining its Advances is increased, then the
Lessor may require the Lessee to pay, contemporaneously with each payment of
Rent, an additional amount at a rate per annum up to but not exceeding the
excess of (i)(A) the applicable Eurodollar Rate divided by (B) one minus the
-----
Eurocurrency Reserve Requirements and (ii) the applicable Eurodollar Rate. In
the event that the Lessor wishes to require payment of such additional amount,
the Lessor (x) shall so notify the Lessee, in which case such additional Rent
shall be payable to the Lessor at the place indicated in such notice with
respect to each Interest Period commencing at least three Business Days after
the giving of such notice and (y) shall furnish to the Lessee at least five
Business Days prior to each date on which Rent is payable a certificate setting
forth the amount to which it is then entitled under this Section (which shall be
consistent with its good faith estimate of the level at which the related
reserves are maintained by it). Each such certificate shall be accompanied by
such information as the Lessee may reasonably request as to the computation set
forth therein.
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26.8. Deposits Unavailable. If on or prior to the first day of any Interest
--------------------
Period:
(a) deposits in dollars (in the applicable amounts) are not being
offered to the Lessor (or its Affiliates) in the relevant market for such
Interest Period, or
(b) the Lessor advises the Lessee that the Eurodollar Rate as
determined by the Lessor will not adequately and fairly reflect the cost to
the Lessor of funding Advances for such interest Period,
the Lessor shall forthwith give notice thereof to the Lessee, whereupon until
the Lessor notifies the Lessee that the circumstances giving rise to such
suspension no longer exist, the Advance shall begin to bear interest at the
Alternate Base Rate on the last day of the then current Interest Period
applicable thereto. The Lessor shall provide to the Lessee a statement in
writing of the Alternate Base Rate as calculated hereunder.
26.9. Illegality. If, on or after the date hereof, the adoption of any
----------
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by the Lessor (or its Funding Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for the
Lessor (or its Funding Office) to make, maintain or fund the Advance, and the
Lessor shall so notify the Lessee, whereupon until the Lessor notifies the
Lessee that the circumstances giving rise to such suspension no longer exist,
the obligation to make the Advance shall be suspended. The Lessor, with the
consent of the Lessee (which consent shall not unreasonably be withheld), will
designate a different Funding Office if such designation will avoid the need for
giving such notice and will not, in the judgment of the Lessor, be otherwise
disadvantageous to the Lessor. If such notice is given (i) the Lessee shall be
entitled upon its request to a reasonable explanation of the factors underlying
such notice and (ii) the Advance shall begin to bear interest at the Alternate
Base Rate either (a) on the last day of the then current Interest Period
applicable thereto, if the Lessor may lawfully continue to maintain and fund the
Advance to such day or (b) immediately, if the Lessor shall determine that it
may not lawfully continue to maintain and fund the Advance to such day. The
Lessor shall provide to the Lessee a statement in writing of the Alternate Base
Rate as calculated hereunder.
26.10. Increased Cost and Reduced Return.
---------------------------------
(a) In the event that the adoption of any applicable law, rule or
regulation, or any change therein or in the interpretation or application
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof or compliance by
the Lessor with any request or directive after the date hereof (whether or
not having the force of law) of any such authority, central bank or
comparable agency:
(i) does or shall subject the Lessor to any additional tax of any
kind whatsoever with respect to the Operative Documents or the Advance
made by it, or change the basis or the applicable rate of taxation of
payments to the Lessor of principal, interest or any other amount
payable hereunder (except for the imposition of or change in any tax
on or measured by the overall net income of the Lessor (other than any
such tax imposed by means of withholding));
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(ii) does or shall impose, modify or hold applicable any reserve,
special deposit, insurance assessment, compulsory loan or similar
requirement against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of the Lessor which are not
otherwise included in determination of the rate of interest on the Advance;
or
(iii) does or shall impose on the Lessor any other condition; and the
result of any of the foregoing is to increase the cost to the Lessor of
making or maintaining the Advance or to reduce any amount receivable
hereunder, then in any such case, the Lessee shall promptly pay to the
Lessor, upon demand, any additional amounts necessary to compensate the
Lessor for such increased cost or reduced amount receivable which the
Lessor deems to be material as determined by the Lessor with respect to the
Advance.
(b) If the Lessor shall have determined that, after the date hereof, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of the Lessor (or any entity directly or
indirectly controlling the Lessor) as a consequence of the Lessor's obligations
under the Operative Documents to a level below that which the Lessor (or any
entity directly or indirectly controlling the Lessor) could have achieved but
for such adoption, change, request or directive (taking into consideration its
policies with respect to capital adequacy) by an amount deemed by the Lessor to
be material, then from time to time, within fifteen (15) days after demand by
the Lessor, the Lessee shall pay to the Lessor such additional amount or amounts
as will compensate for Lessor for such reduction.
(c) The Lessor will promptly notify the Lessee of any event of which it
has knowledge, occurring after the date hereof, which will entitle the Lessor to
compensation pursuant to this Section and will, if practicable, with the consent
of the Lessee (which shall not unreasonably by withheld), designate a different
Funding Office or take any other reasonable action if such designation or action
will avoid the need for, or reduce the amount of, such compensation and will
not, in the judgement of the Lessor, be otherwise disadvantageous to the Lessor.
A certificate signed by an officer of the Lessor claiming compensation under
this Section and setting forth in reasonable detail its computation of the
additional amount or amounts to be paid to it hereunder shall be conclusive in
the absence of manifest error. In determining such amount, the Lessor may use
any reasonable averaging and attribution methods.
(d) Notwithstanding the foregoing clauses (a) and (b) of this Section
----------- --- -------
26.10, the Lessee shall only be obligated to compensate the Lessor for any
-----
amount arising or accruing both:
(i) during (A) any time or period commencing (x) in the case of
subsection (a), not earlier than the first day of any Interest Period in
--------------
effect on the date which, and (y) in the case of subsection (b), not
--------------
earlier than the date on which the Lessor notifies the Lessee that it
proposes to demand such compensation and identifies to the Lessee the
statue, regulation or other basis upon which the claimed compensation is or
will be based and (B) any time or period during which, because of the
retroactive application of such statue, regulation or other basis, the
Lessor did not know that such amount would arise or accrue; and
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(ii) within six months prior to any demand therefor,
accompanied by a certificate of the Lessor claiming compensation
and setting forth in reasonable detail its computation of the
additional amount or amounts to be paid to it hereunder.
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1. Estoppel Certificates. At any time and from time to time upon not
---------------------
less than fifteen (15) days' prior request by the Lessor or the Lessee (the
"Requesting Party"), the other party (whichever party shall have received such
----------------
request, the "Certifying Party") shall furnish to the Requesting Party (but in
----------------
the case of the Lessor, as Certifying Party, not more than four times per year
unless required to satisfy the requirements of any subleases and only to the
extent that the required information has been provided to the Lessor by the
Lessee) a certificate signed by an individual having the office of vice
president or higher in the Certifying Party certifying that this Lease is in
full force and effect (or that this Lease is in full force and effect as
modified and setting forth the modifications); the dates to which the Basic Rent
and Supplemental Rent have been paid; to the best knowledge of the signer of
such certificate, whether or not the Requesting Party is in default under any of
its obligations hereunder (and, if so, the nature of such alleged default); and
such other matters under this Lease as the Requesting Party may reasonably
request. Any such certificate furnished pursuant to this Article XXVII may be
-------------
relied upon by the Requesting Party, and any existing or prospective mortgagee,
purchaser or lender, and any accountant or auditor, of, from or the Requesting
Party (or any Affiliate thereof.)
ARTICLE XXVIII
ACCEPTANCE OF SURRENDER
28.1. Acceptance of Surrender. No surrender to the Lessor of this Lease
-----------------------
or of all or any portion of the Property or of any interest therein shall be
valid or effective unless agreed to and accepted in writing by the Lessor, and
no act by the Lessor or any representative or agent of the Lessor, other than a
written acceptance, shall constitute an acceptance of any such surrender.
ARTICLE XXIX
NO MERGER OF TITLE
29.1. No Merger of Title. There shall be no merger of this Lease or of
------------------
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee or groundleasehold estate in the Property,
except as may expressly be stated in a written instrument duly executed and
delivered by the appropriate Person or (c) a beneficial interest in the Lessor.
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ARTICLE XXX
INTENT OF THE PARTIES
30.1. Ownership of the Property.
-------------------------
(a) It is the intent of the parties hereto that for financial
accounting purposes the Lease constitutes an "operating lease" pursuant to
Statement of Financial Accounting Standards No. 13, as amended, and for
purposes of commercial, real estate, bankruptcy and federal, state and
local income tax law, the transaction contemplated hereby is a financing
arrangement. The parties further intend that Lessee shall be treated as
owner of the Property for income tax purposes and shall be entitled to all
deductions for depreciation thereof. Lessor shall take no action
inconsistent with such treatment.
(b) It is the intent of the parties hereto that the obligations of
the Lessee under this Lease to pay Basic Rent and Supplemental Rent or
Lease Balance in connection with any purchase of the Property pursuant to
this Lease shall be treated as payments of interest on and principal of,
respectively, loans from the Lessor to the Lessee.
(c) Specifically, without limiting the generality of subsection (b)
--------------
of this Section 30.1, the Lessor and the Lessee intend and agree that with
------------
respect to the nature of the transactions evidenced by this Lease in the
context of the exercise of remedies under the Operative Documents,
including, without limitation, in the case of any insolvency or
receivership proceedings or a petition under the United States bankruptcy
laws or any other applicable insolvency laws or statute of the United
States of America or any State or Commonwealth thereof affecting the Lessee
and the Lessor, or any enforcement or collection actions, the transactions
evidenced by this Lease are loans made by the Lessor as unrelated third
party lender to the Lessee.
ARTICLE XXXI
PAYMENT OF CERTAIN EXPENSES
31.1. Transaction Expenses.
--------------------
(a) The Lessee shall pay, or cause to be paid, from time to time all
Transaction Expenses in respect of the transactions taking place on the
Documentation Date and on Acquisition Date on such respected date;
provided, however, that, if the Lessee has not received written invoices
-------- -------
therefor prior to such date, such Transaction Expenses shall be paid within
ten (10) Business Days after the Lessee has received written invoices
therefor.
(b) The Lessee shall pay or cause to be paid (i) all Transaction
Expenses incurred by the Lessor in entering into any future amendments or
supplements with respect to any of the Operative Documents, whether or not
such amendments or supplements are ultimately entered into, or giving or
withholding of waivers of consents hereto or thereto, in each case which
have been requested by or approved by the Lessee, (ii) all Transaction
Expenses incurred by the Lessor in connection with any purchase of the
Property by the Lessee or other Person pursuant to this Lease and (iii) all
Transaction Expenses incurred by the Lessor in respect of enforcement of
any of its rights or remedies against the Lessee in respect of the
Operative Documents.
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31.2. Brokers' Fees and Stamp Taxes. The Lessee shall pay or cause to be
-----------------------------
paid any broker's fees and any and all stamp, transfer and other similar taxes,
fees and excises, if any, including any interest and penalties, which are
payable in connection with the transactions contemplated by this Lease and the
other Operative Documents.
ARTICLE XXXII
OTHER COVENANTS AND AGREEMENTS OF LESSEE
32.1 Covenants. The Lessee hereby agrees that so long this Lease is in
----------
effect:
(a) Information. The Lessee will deliver to the Lessor:
-----------
(i) promptly upon the request of the Lessor, the publicly
available consolidated and consolidating statements of financial position of the
Lessee and its consolidated subsidiaries as of the end of each of the Lessee's
fiscal years and the related consolidated and consolidating statements of income
and cash flows for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, with such consolidated financial
statements reported on by Ernst & Young or other independent public accountants
of nationally recognized standing reasonably acceptable to the Lessor; and with
respect to each of the first three quarters of each fiscal year of the Lessee,
the publicly available unaudited consolidated statement of financial position of
the Lessee as of the end of such quarter and the related unaudited consolidated
statements of income and cash flows for such quarter and for the portion of the
Lessee's fiscal year ended at the end of such quarter:
(ii) as soon as possible and in any event within ten (10) days
after a Responsible Employee of the Lessee obtains knowledge of the occurrence
of each Event of Default or each event that, with the giving of notice or time
elapse, or both, would constitute an Event of Default continuing on the date of
such statement, a statement of the authorized officer setting forth details of
such Event of Default or event an the action that the Lessee proposes to take
with respect thereto; provided that the Lessee shall not be obligated to give
notice of any Event of Default which is remedied within ten (10) days after such
Responsible Employee first obtains knowledge;
(iii) promptly upon becoming aware thereof, written notice of the
commencement or existence of any proceeding against the Lessee or any Affiliate
of the Lessee by or before any court or governmental agency that might, in the
reasonable judgement of the Lessee, result in a Material adverse effect on the
business, operations or financial conditions of the Lessee or the ability of the
Lessee to perform its obligations under the Operative Documents;
(iv) as soon as possible and in any event within ten (10) days
after a Responsible Employee of the Lessee obtains knowledge of the occurence of
any violation or alleged violation of an Environmental Law by Lessee, a
statement of an authorized officer setting forth the details of such violation
and the action which the Lessee proposes to take with respect thereto; and
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(v) from time to time such additional information regarding the
business, properties, condition or operations, financial or otherwise, of
the Lessee, or regarding the Property or the status of any construction
thereon, if any, as the Lessor may reasonably request in connection with
the Property.
(b) Obligations under Loan Documents. Absent prior written notice from the
--------------------------------
Lessor to the contrary, the Lessee shall comply with (i) all requirements in the
Nomura Loan Agreement that the Lessor, as Borrower, furnish the Lender with
notices, documents, reports, budgets, data and all other information relating to
the Property, including, without limitation, the requirements in connection with
a defeasance of the Loan pursuant to Section 2.11 of the Nomura Loan Agreement
------------
and (ii) all requirements and obligations of Operator set forth in the Mortgage.
(c) Compliance with Laws. The Lessee will comply in all Material respects
--------------------
with all applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and
ERISA and the rules and regulations thereunder) with respect to its Material
Assets, including the Property, except where the necessity of compliance
therewith is contested in good faith by appropriate proceedings.
(d) Further Assurances. The Lessee shall take or cause to be taken from
------------------
time to time all action necessary to assure that the intent of the parties
pursuant to the Operative Documents is given effect as contemplated by this
Lease. The Lessee shall execute and deliver, or cause to be executed and
delivered, to the Lessor from time to time, promptly upon request therefor, any
and all other and further instruments that may be reasonably requested by the
Lessor to cure any deficiency in the execution and delivery of this Lease or any
Operative Document to which it is a party.
(e) Preservation of Existence, Etc. The Lessee will preserve and maintain
------------------------------
its existence and all rights, privileges and franchises necessary and desirable
in the normal conduct of its business and the performance of its obligations
hereunder and under the Operative Documents; provided that the Lessee may
consolidate with or merge with or into any other corporation or convey or
transfer its properties and assets substantially as an entirety to any Person,
if either the Lessee shall be the continuing corporation, or the corporation (if
other than the Lessee) formed by such consolidation or into which the Lessee is
merged or the Person which acquires by conveyance or transfer the properties and
assets of the Lessee substantially as an entirety shall expressly assume, by an
assumption agreement executed and delivered to the Lessor, the performance of
the Lessee's obligations under each of the Operative Documents.
(f) Nonpetition Covenants. Lessee shall not during the Term of the Lease
---------------------
acquiesce, petition or otherwise invoke or cause the Lessor to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Lessor under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Lessor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Lessor. Lessor shall not during the Term of the Lease
acquiesce, petition or otherwise invoke or cause the Lessee to invoke the
process of any court or government authority for the purpose of commencing or
sustaining a case against the Lessee under any federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Lessee or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Lessee.
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ARTICLE XXXIII
MISCELLANEOUS
33.1. Survival; Severability; Etc. Anything contained in this Lease to the
---------------------------
contrary notwithstanding, all claims against and liabilities of the Lessee or
the Lessor arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier termination
for a period of one year except as to indemnification which shall continue to
survive. If any term or provision of this Lease or any application thereof shall
be declared invalid or unenforceable, the remainder of this Lease and any other
application of such term or provision shall not be affected thereby. If any
right or option of the Lessee provided in this Lease would, in the absence of
the limitation imposed by this sentence, be invalid or unenforceable as being in
violation of the rule against perpetuities or any other rule of law relating to
the vesting of an interest in or the suspension of the power of alienation of
property, then such right or option shall be exercisable only during the period
which shall end twenty-one (21) years after the date of death of the last
survivor of the descendants of Xxxxxxxx X. Xxxxxxxxx, the former President of
the United States, Xxxxx Xxxx, the deceased automobile manufacturer, and Xxxx X.
Xxxxxxxxxxx, the founder of the Standard Oil Company, known to be alive on the
date of the execution, acknowledgment and delivery of this Lease.
33.2. Amendments and Modifications. Neither this Lease nor any provision
----------------------------
hereof may be amended, waived, discharged or terminated except by an instrument
in writing in recordable form signed by the Lessor and the Lessee.
33.3. No Waiver. No failure by the Lessor or the Lessee to insist upon the
---------
strict performance of any term hereof or to exercise any right, power or remedy
upon a default hereunder, and no acceptance of full or partial payment of Rent
during the continuance of any such default, shall constitute a waiver of any
such default or of any such term. To the fullest extent permitted by law, no
waiver of any default shall affect or alter this Lease, and this Lease shall
continue in full force and effect with respect to any other then existing or
subsequent default.
33.4. Notices. All notices, demands, requests, consents, approvals and
-------
other communications hereunder shall be in writing (including by facsimile), and
directed to the address of the appropriate party as set forth in Schedule I
----------
hereto.
33.5. Successor and Assigns. All the terms and provisions of this Lease
---------------------
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
33.6. Headings and Table of Contents. The headings and table of contents in
------------------------------
this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
33.7. Counterparts. This Lease may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
33.8. GOVERNING LAW. THIS LEASE SHALL BE GOVERNED BY, AND CONSTRUED AND
-------------
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CONNECTICUT. WITHOUT
LIMITING THE FOREGOING, IN THE EVENT THAT THIS LEASE IS DEEMED TO CONSTITUTE A
FINANCING, WHICH IS THE INTENTION OF THE PARTIES, THE LAWS OF THE STATE OF
CONNECTICUT, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES,
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SHALL GOVERN THE CREATION, TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED
HEREBY.
33.9. Original Lease. The single executed original of this Lease marked
--------------
"THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature page
thereof and containing the receipt of the Lessor therefor on or following the
signature page thereof shall be the Original Executed Counterpart of this Lease
(the "Original Executed Counterpart"). To the extent that this Lease constitutes
-----------------------------
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Lease may be
created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
33.10. Waiver of Jury Trial. THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND
--------------------
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH,
THIS LEASE AND/OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OF WRITTEN) OR ACTIONS OR SUCH PARTIES. THE PARTIES HERETO
ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
PARTIES ENTERING INTO THIS LEASE AND EACH SUCH OTHER OPERATIVE DOCUMENT.
33.33. Compliance with Loan Documents. Lessor covenants and agrees with
------------------------------
Lessee that Lessor shall (a) not without the express written consent of the
Lessee, which consent shall not be unreasonably withheld, enter into any
amendments or modifications of the FBTC Loan Agreement, the Lessor Pledge
Agreement or any of the Loan Documents to which it is a party and (b) comply
with the terms of the FBTC Loan Agreement, the Lessor Pledge Agreement and the
Loan Document to which it is a party.
33.12. Payment of Equity Balance; Transfer of Beneficial Interest in
-------------------------------------------------------------
Lessor. In the event the Lessee exercises it right to pay the Equity Balance to
------
the Lessor as set forth in this Lease, the Lessee shall not pay such Equity
Balance without complying with the provisions of the Nomura Loan Agreement. The
parties further agree that as soon as possible (time being of the essence) after
the payment by the Lessee to the Lessor of the Equity Balance or upon the
Lessor's exercise of all its rights under the Securities Pledge Agreement and
the Certificate Pledge Agreement, including, without limitation, its rights to
possess the Pledged Securities and the Certificate A, the Lessee shall accept a
transfer requested of it by the beneficial owner of the Lessor or its equity
interest in the Lessor. The Lessee and Lessor agree to execute all documents
reasonably necessary to effectuate such transfer. The acquisition by the Lessee
of the equity interest in the Lessor shall comply with the provisions of the
Nomura Loan Agreement.
33.13. Concerning the Lessor. This Lease has been executed by Wilmington
---------------------
Trust Company solely in its capacity as Trustee under the Trust Agreement and
not in its individual capacity and in no case shall the Trust Company (or any
entity acting as successor or additional Trustee under the Trust Agreement) be
personally liable for or on account of any of the statements, representations,
warranties, covenants or obligations of the Trust, the Trustee or the Lessor
hereunder, any such liabilities being hereby waived by the other parties hereto
provided, that Wilmington Trust Company accepts the benefits or running to it
--------
hereunder and agrees that is shall be liable in its individual capacity for its
own gross negligence or willful misconduct. If a successor Trustee is appointed
in accordance with the terms of the Trust Agreement, such successor Trustee
shall, without any further act, succeed to all the rights, duties,
-49-
immunities and obligations of the Lessor hereunder and the predecessor Trustee
shall be released from all further duties and obligations hereunder arising
after such successor Trustee will have been appointed.
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IN WITNESS WHEREOF, the parties have caused this Lease be duly executed
and delivered as of the date first above written.
BROOKDALE LIVING COMMUNITIES OF
CONNECTICUT, INC.,
By /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Vice President
Commitment: THE GABLES BUSINESS TRUST
---------- By Wilmington Trust Company, not in its
individual capacity but as Trustee
$23,125,000
By /s/ Xxxxxxxx Xxxxx
---------------------------------------
Xxxxxxxx X. Xxxxx
Financial Services Officer
THIS COUNTERPART IS NOT ORIGINAL EXECUTED COUNTERPART.
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.
NOMURA ASSET CAPITAL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
